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Underenrollment' which was released on December 04, 2003.

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Report to Congressional Requesters:

United States General Accounting Office:

GAO:

December 2003:

Head Start:

Better Data and Processes Needed to Monitor Underenrollment:

GAO-04-17:

GAO Highlights:

Highlights of GAO-04-17, a report to Congressional Requesters 

Why GAO Did This Study:

Head Start, created in 1965, is designed to prepare low-income 
preschool children for school by providing a comprehensive set of 
early child development services primarily through community-based 
organizations. Over the last decade there have been a number of 
changes in Head Start’s operating environment, including a decrease in 
the number of poor children; an increase in the number, size, and 
scope of other federal and state early childhood programs; and an 
expansion in Head Start spending and enrollment. Given this 
environment, GAO was asked to determine (1) what is known about the 
extent to which Head Start programs are underenrolled, (2) ACF 
regional officials’ and Head Start grantees’ views on what factors 
contribute to underenrollment, and (3) what actions ACF and grantees 
have taken to address underenrollment.

What GAO Found:

The extent to which Head Start programs have enrolled fewer children 
than they are funded to serve is unknown because the Administration 
for Children and Families (ACF) does not collect accurate national 
data and does not monitor underenrollment in a uniform or timely 
manner. While some modest fluctuations in enrollment are to be 
expected, regional offices had differing definitions of unacceptable 
underenrollment, and the approaches they used to identify it were 
either not timely or not systematic. The regional offices identified a 
total of about 7 percent of grantees as unacceptably underenrolled in 
2001-02, significantly less than the percentage of grantees reporting 
enrollment ratios below 100 and 95 percent on ACF’s survey of grantees 
(see chart below). As a result of differences in regional definitions 
of what constitutes an unacceptable level of underenrollment, grantees 
with similar levels of underenrollment may be treated differently 
across regions.

ACF regional officials and officials of underenrolled Head Start 
grantees often cited a mixture of factors that made it difficult to 
achieve full enrollment, including increased parental demand for full-
day child care, a decrease in the number of eligible children, 
facilities-related problems, and more parents seeking openings with 
other sponsors of early education and care. 

ACF national and regional offices and grantees all report taking 
action to address underenrollment through the issuance of guidance, 
increased monitoring by regional offices, and more aggressive outreach 
attempts by grantees. The ACF national office issued a memo in April 
2003 that instructed regional offices to address underenrollment with 
a variety of measures depending on its causes. While this guidance was 
clear on the actions to be taken, it lacked clear criteria for 
prioritizing grantees for corrective actions. Also, while many 
grantees we spoke with had taken steps to address underenrollment, 
some told us of their concern to maintain total funded enrollment 
levels, even as they were converting unfilled part-day openings to 
full-day. While 18 of the 25 grantees we contacted had made progress 
toward full enrollment, others cited continuing problems. 

What GAO Recommends:

GAO recommends that the Secretary of HHS direct ACF to 
(1) ensure the accuracy of national enrollment data, (2) develop a 
standard criterion for regional offices to use in identifying grantees 
whose underenrollment merits action, (3) develop an additional 
enrollment measure that takes into consideration the different levels 
of service provided by full-day and part-day programs, and (4) develop 
a more systematic process for regional offices to collect reliable 
enrollment data during the program year.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

The Extent to Which Head Start Programs Are Underenrolled is Not Known:

Regional and Grantee Officials Often Cited Combinations of Factors as 
Responsible for Underenrollment:

ACF and Grantees Use a Variety of Approaches to Address 
Underenrollment:

Conclusions:

Recommendations for Executive Action:

Agency Comments:

Appendix I: Scope And Methodology:

Appendix II: Factors That the ACF Regions and the American Indian-
Alaska Native Program Branch Believed Contributed to Underenrollment 
to a Major or Moderate Extent:

Appendix III: Factors that Grantees Believed Contributed to Their Head 
Start Programs' Underenrollment:

Appendix IV: Comments from the U.S. Department of Health and Human 
Services:

Appendix V: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Acknowledgments:

Related GAO Products:

Tables:

Table 1: ACF Regional Thresholds for Unacceptable Levels of 
Underenrollment:

Table 2: Number of ACF Regions Relying on Various Methods to Oversee 
Head Start Grantee and Delegate Agency Enrollment Levels:

Table 3: Percentage of Head Start Grantees, by Region, Reported as 
Unacceptably Underenrolled by ACF Regions with Unacceptable 
Underenrollment Thresholds, Compared with PIR Data at the Same 
Thresholds:

Table 4: Comparison of Region II and III Grantees Identified as 
Underenrolled:

Table 5: April 2003 National Head Start Guidance to ACF Regions:

Table 6: Actions by ACF Regions toward Underenrolled Grantees:

Table 7: Actions Taken by Interviewed Grantees to Address 
Underenrollment:

Table 8: Factors Cited By ACF Regions as Contributing to 
Underenrollment to a Major or Moderate Extent, during Program Years 
2001-02 and 2002-03:

Table 9: Factors Cited by 25 Grantees as Contributing to Head Start 
Program Underenrollment, during Program Years 2001-02 and 2002-03:

Figures:

Figure 1: ACF Regions:

Figure 2: Distribution of Head Start Services between Full-day and 
Part-day:

Figure 3: Head Start Enrollment Compared with Children Under Age 6 
Living in Poverty (1992-2002):

Figure 4: Growth in Federal Investment in Child Care, Fiscal Years 1997 
through 2002 in Nominal Dollars:

Figure 5: Comparison of Enrollment Ratios as reported in 2001-02 PIR 
Survey with Unacceptably Underenrolled Grantees as Reported by ACF 
Regions:

Abbreviations:

ACF: Administration for Children and Families:

CCDF: Child Care Development Fund:

HHS: Department of Health and Human Services:

PIR: Program Information Report:

SSI: Supplemental Security Income:

TANF: Temporary Assistance for Needy Families:

United States General Accounting Office:

Washington, DC 20548:

December 4, 2003:

The Honorable George Miller: 
Ranking Minority Member: 
Committee on Education and the Workforce: 
House of Representatives:

The Honorable Dale E. Kildee:
House of Representatives:

The Honorable Adam Schiff: 
House of Representatives:

Head Start is the largest federal early childhood program, funded at 
about $6.7 billion in fiscal year 2003. Created in 1965, Head Start is 
designed to prepare poor children for school by providing a 
comprehensive set of developmental services. The Administration for 
Children and Families (ACF) of the Department of Health and Human 
Services (HHS) administers the program. Over the last decade, the Head 
Start program has expanded substantially. Between fiscal years 1990 and 
2002, appropriations for Head Start quadrupled from $1.6 billion to 
over $6.5 billion, and the number of children served increased by 69 
percent from about 540,000 to over 910,000.

Over the past decade, significant changes to Head Start's environment 
may have created challenges for some Head Start grantees when they 
tried to find children to fill funded slots. For example, in the 1990s 
there was a decline in welfare caseloads following welfare reform and a 
decline in the number of children living in poverty, which may have 
decreased the number of children eligible for Head Start. At the same 
time, the expansion of other federal and state early childhood programs 
may have increased child care options available to Head Start-eligible 
families. Consequently, it is possible that federally funded Head Start 
slots in some areas remain unfilled even while eligible children 
elsewhere remain on waiting lists. Given these potential challenges, 
and in anticipation of Head Start's reauthorization, you asked that we 
determine the extent to which Head Start grantees were underenrolled 
and that we identify potential causes of underenrollment. As agreed 
with your offices, our review addresses: (1) what is known about the 
extent to which Head Start programs are underenrolled, (2) what factors 
may have contributed to underenrollment, and (3) what actions ACF and 
grantees have taken to address underenrollment.

To determine what is known about the extent to which Head Start 
programs are underenrolled, we attempted to verify the accuracy of 
national enrollment data, interviewed ACF headquarters officials, and 
reviewed federal guidance and regulations on enrollment. Because we 
determined that national enrollment data were not reliable and because 
the regional offices have primary responsibility for identifying and 
addressing underenrollment, we surveyed all 10 ACF regional offices and 
the American Indian-Alaska Native Program Branch.[Footnote 1] We asked 
them to identify the threshold below which they consider 
underenrollment to be unacceptable and to identify grantees with 
enrollment levels beneath this threshold. To gather further details on 
the process by which regions identify and address underenrollment, we 
interviewed regional officials in 3 regions--region III (covering 
Delaware, the District of Columbia, Maryland, Pennsylvania, Virginia, 
and West Virginia), region V (Illinois, Indiana, Michigan, Minnesota, 
Ohio, and Wisconsin), and region IX (Arizona, California, Hawaii, 
Nevada, and the Pacific Insular Areas)--selected on the basis of 
geographical representation and the number of underenrolled grantees 
they reported to us. To determine what factors ACF officials and Head 
Start grantees believed contributed to underenrollment and to identify 
actions they took to address it, we surveyed all 10 ACF regional 
offices and the American Indian-Alaska Native Program Branch office, 
selected and interviewed 25 grantees identified by regional offices as 
unacceptably underenrolled, and conducted site visits to 3 regional 
offices listed above. We performed our work between May and October 
2003 in accordance with generally accepted government accounting 
standards. Appendix I further describes our scope and methodology.

Results in Brief:

The extent to which Head Start programs are underenrolled is unknown 
because ACF does not collect accurate national data and its regional 
offices do not monitor grantee enrollment in a uniform or timely 
manner. The agency surveys grantees annually to determine national 
enrollment levels, but we found these data contained many inaccuracies 
and were unavailable during the current program year for regional use 
in monitoring grantees. Consequently, we could not determine the extent 
to which Head Start grantees had enrollments below 100 percent of 
funded enrollment, which is how HHS' regulations define 
underenrollment. We found that three regional offices did not set a 
threshold below which they view underenrollment as unacceptable, while 
the other regions use thresholds ranging from anything below 100 
percent to enrollment below 74 percent. We also found that the 
approaches regions used to identify unacceptable levels of 
underenrollment, such as visits to grantees and reviews of grant re-
funding applications and grantee audits, were either not timely or did 
not systematically address underenrollment. Using varying thresholds, 
the regional offices identified a total of 170 grantees as unacceptably 
underenrolled in program year 2001-02, or about 7 percent of all 
grantees. By contrast, using the regulatory definition of 
underenrollment, survey data indicated that as many as half or more of 
the grantees could be underenrolled. As a result of differences in 
regional thresholds for what constitutes an unacceptable level of 
underenrollment, grantees with similar levels of underenrollment may be 
treated differently across regions.

ACF regional officials and officials of underenrolled Head Start 
grantees often cited combinations of factors that made it difficult to 
achieve acceptable levels of enrollment, including increasing parental 
demand for full-day child care and decreasing numbers of eligible 
children. Providing full-day care was said to be more expensive than 
providing part-day care because it would require more facility space 
and staff per child. To make full-time slots available, many grantees 
we spoke with were attempting to expand their facilities or partner 
with other programs. However, 14 of the 25 grantees we interviewed 
reported having difficulty acquiring and developing adequate 
facilities. Underenrolled grantees and regional officials also said 
that underenrollment occurred because parents were increasingly seeking 
services from other early education and child care programs, some of 
which subsidized care provided by relatives. Other contributing factors 
were less frequently cited, such as eligible families moving from the 
service area, language and cultural differences between children's 
families and program staff, and weak or inadequate outreach efforts by 
grantees to locate eligible families.

ACF national and regional offices and grantees all report taking 
actions to address underenrollment, such as issuing guidance, 
increasing monitoring, and more aggressively trying to recruit 
participants. The ACF national office issued a memorandum in April 2003 
that instructed regional offices to address underenrollment in 
particular ways depending on its underlying cause. However, the 
guidance lacked clear criteria for prioritizing which grantees should 
be subject to corrective action based upon their level of 
underenrollment. According to regional officials, the actions they most 
frequently took to address underenrollment were to monitor enrollment 
levels, track improvement efforts, and provide training and technical 
assistance. Many grantees we spoke with have also taken steps to 
address underenrollment, such as increasing their outreach efforts, 
seeking partners to help them provide more full-day service, or 
increasing the availability of full-day slots. Furthermore, some 
grantees told us of their concern to maintain total funded enrollment 
levels, even as they were converting unfilled part-day openings to full 
day. Consequently, in some instances, grantees attempting to convert 
part-day slots to full-day slots said they had to expand facilities or 
find other child care partners in order to serve the same number of 
children. While 18 of the 25 grantees we contacted had made progress 
toward achieving full enrollment, others cited continuing problems.

To improve ACF's ability to identify and address underenrollment in a 
more systematic and timely manner, we are making recommendations that 
the agency improve the quality of enrollment data and establish more 
uniform criteria and procedures for identifying and addressing 
underenrollment.

Background:

Head Start was designed to help break the cycle of poverty by providing 
comprehensive educational, social, health, nutritional, and 
psychological services to low-income children. Head Start is authorized 
to serve children at any age prior to compulsory school attendance. 
Originally, the program was aimed at 3-to 5-year-olds. A companion 
program begun in 1994, Early Head Start, made these services available 
to children from birth to 3 years of age as well as to pregnant women. 
Head Start and Early Head Start programs are administered by ACF, which 
funds and monitors more than 1,500 grantees through its 10 regional and 
2 branch offices. (See fig. 1) ACF's national office has responsibility 
for overseeing and providing guidance to the regional offices, as well 
as for administering and collecting annual survey data from grantees.

Figure 1: ACF Regions:

[See PDF for image]

[End of figure]

Head Start grantees include community action agencies, school systems, 
for-profit and nonprofit organizations, other government agencies, and 
tribal governments or associations. Also, many Head Start grantees 
provide services by subcontracting with other organizations, known as 
delegate agencies. In fiscal year 2002, Head Start grantees served more 
than 912,000 children, a 69 percent increase over the number of 
children served in 1990. Head Start has traditionally been a part-day, 
part-year program, but currently serves more children on a full-day 
basis, which is defined as 6 hours or more a day, than on a part-day 
basis. Approximately 47 percent of children served by Head Start were 
enrolled in a center-based full-day program for 6 hours or more a 
day.[Footnote 2] Less than 20 percent of children enrolled in Head 
Start receive 8 hours or more of center-based services a day. As of 
2001-02, about 44 percent of Head Start children were enrolled in a 
part-day center-based program. Figure 2 shows the percentages of Head 
Start services provided on a full-day or part-day basis.

Figure 2: Distribution of Head Start Services between Full-day and 
Part-day:

[See PDF for image]

[End of figure]

Head Start funds are allotted among the states based on their 1998 
allocation and, for funds exceeding that amount, by formula based on 
the number of children in each state under the age of 5 from families 
whose income is below the federal poverty level.[Footnote 3] Head Start 
grantees are required to provide at least 20 percent of annual program 
funding, which can include in-kind contributions, such as facilities 
for holding classes. During the award process, Head Start grantees 
receive from ACF regional officials their level of funded enrollment--
the number of children the grantee is to serve.

Head Start regulations require that at least 90 percent of the children 
enrolled in Head Start come from families with incomes at or below the 
federal poverty guidelines, from families receiving public assistance, 
or from families caring for a foster child. While the poverty 
guidelines are firm, grantees have some flexibility in determining 
income eligibility. For example, grantees can use the 12 months prior 
to the month the family applied to Head Start or the previous calendar 
year as a basis for determining income eligibility. Also, once a family 
is determined to be eligible in 1 program year, it is considered 
eligible for the subsequent program year, for a total of 2 years. 
Additionally, families that participate in the Temporary Assistance for 
Needy Families program (TANF) or the Supplemental Security Income 
program (SSI)[Footnote 4] or that care for a foster child are eligible 
for Head Start services even when family income exceeds the poverty 
guidelines. Grantees may fill up to 10 percent of their slots with 
children from families that exceed the low-income guidelines.

An enrollment occurs when a Head Start program officially accepts a 
child and completes all necessary steps to begin providing services. If 
a child is chronically absent and the grantee cannot serve the child in 
another way, the child's slot is considered vacant. Once a slot is 
vacant, the grantee generally must fill it within 30 days to be 
considered fully enrolled. Consequently, actual enrollments can 
fluctuate somewhat throughout funding periods. Head Start regulations 
require grantees to track program attendance on a daily basis. However, 
grantees are asked to annually report enrollment levels for any 2 
months they choose as part of ACF's annual Program Information Report 
(PIR) survey. ACF regions may require grantees to report enrollment 
data more frequently.

Head Start regulations require grantees to maintain enrollment at 100 
percent of the funded level and regional offices have primary 
responsibility for identifying and addressing 
underenrollment.[Footnote 5] However, as a practical matter, not all 
grantees are able to continually sustain enrollment at the fully funded 
level. Underenrollment can occur for a variety of reasons and can vary 
from month to month in a given program. Therefore, before deciding that 
underenrollment is unacceptable and taking action, the regions take 
into consideration a variety of factors about underenrollment, 
including its level and duration, its causes, and the actions taken by 
grantees to address it.

The number of children eligible for Head Start services on the basis of 
being below the poverty line has decreased over the last decade, 
falling from over 6 million children in 1992 to just over 4 million in 
2000. By 2002, the number of children under age 6 living in poverty had 
increased to nearly 4.3 million. Over the same period, Head Start 
enrollment has increased to over 910,000 children--a level that is 
significantly below the number of children living in poverty. (See fig. 
3.) However, it should be noted that Head Start predominately serves 
children ages 3 and 4, who make up only a portion of all children under 
6 living in poverty.

Figure 3: Head Start Enrollment Compared with Children Under Age 6 
Living in Poverty (1992-2002):

[See PDF for image]

Note: Data on number of children under age 6 living in poverty includes 
only those residing with a relative.

[End of figure]

In addition, during the 1990s, the number of other federal and state 
programs offering services to low-income children increased 
substantially. For example, welfare reform in 1996 greatly expanded the 
Child Care Development Fund (CCDF) and also allowed TANF funds to be 
used for child care.[Footnote 6] For fiscal years 1997 through 2002, 
these programs increased their investment in children; CCDF spending 
increased from $2.5 billion to $6.4 billion and TANF spending on child 
care increased from $13 million to $1.6 billion.[Footnote 7] (See fig. 
4.) On the state level, one study cited by the Congressional Research 
Service (CRS) found that state spending on prekindergarten programs 
increased from about $700 million in 1991-92 to about $1.7 billion in 
1998-99.[Footnote 8] Over the same period, the number of children 
served by these programs has increased from 290,000 to 725,000.

Figure 4: Growth in Federal Investment in Child Care, Fiscal Years 1997 
through 2002 in Nominal Dollars:

[See PDF for image]

Note: CCDF amounts include dollars states transferred from their TANF 
programs to CCDF as allowed under the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996. The amounts shown for TANF 
include only those TANF funds expended for child care.

[End of figure]

Expanding federal and state early childhood programs has increased the 
need for coordination to better ensure that services are provided in a 
complementary fashion. One way that Head Start encourages coordination 
is by requiring all grantees to periodically prepare community 
assessments that analyze trends in the number of eligible children in 
their jurisdictions and assess the other early childhood services 
provided in the area. While grantees are not required to coordinate 
with other service providers, ACF has issued guidance encouraging 
grantees to coordinate with other providers in order to provide more 
full-day services. Also, in recent years, ACF has used some Head Start 
expansion money to build partnerships with child care providers to 
deliver full-day, full-year services. As another way to increase 
coordination, HHS has been authorized since 1998 to provide additional 
funds to states to encourage such collaboration.

The Extent to Which Head Start Programs Are Underenrolled is Not Known:

The extent to which Head Start programs are underenrolled is unknown 
because ACF does not collect accurate national data and it does not 
monitor grantee enrollment in a uniform or timely way. Specifically, 
national enrollment data contain many inaccuracies and regional offices 
use a variety of thresholds to define "unacceptable" levels of 
underenrollment.[Footnote 9] Additional approaches used by the regions 
to identify underenrollment do not systematically address 
underenrollment or provide timely information. Using varying 
thresholds, the regional offices identified 170 grantees as 
unacceptably underenrolled in program year 2001-02, or about 7 percent 
of all grantees. By contrast, the agency's annual survey data indicated 
that as many as half or more of the grantees were enrolled at less than 
100 percent--the enrollment level grantees are required to maintain 
under Head Start regulations. Overall, regions' use of different 
thresholds for unacceptable underenrollment suggests that regions may 
treat grantees with similar enrollment ratios differently.

ACF Annual Grantee Surveys Contain Inaccurate Enrollment Data:

ACF's annual survey of grantees--the only source of nationwide 
information on grantee enrollment rates--contained many inaccuracies. 
The PIR survey, as it is known, requests actual enrollment figures for 
any 2 months that grantees choose to report. When we attempted to 
verify 2001-02 PIR enrollment data for 19 of the grantees, we found 
that 8 had reported erroneously. For 6 underenrolled grantees, we found 
they underreported their enrollment ratio by an average of 25 percent. 
We also found that 2 overenrolled grantees had erroneously reported 
enrollment ratios that were over 200 percent. A similar review by ACF 
of 75 grantees and delegate agencies[Footnote 10] that had reported 
particularly high or low enrollment levels found that approximately 
half had erroneously reported their actual numbers. GAO and ACF found a 
variety of causes that grantees cited for misreported enrollments, 
including typographical errors, failure to report children who were 
enrolled in the home-based or after-school programs, and reporting on 2 
months in which enrollment was not their highest.

Regional Monitoring Efforts Employed Varied Criteria and Lacked Timely 
Data:

We found that ACF regional offices employed different criteria and used 
a variety of data sources and approaches to determine if a grantee is 
underenrolled. Given that regional offices are responsible for 
identifying and monitoring underenrollment, we asked regional offices 
to identify their operational criterion for an unacceptable level of 
underenrollment. Of 11 regional offices we surveyed, we found that 3 
did not utilize a specific threshold to distinguish between acceptable 
and unacceptable underenrollment, while the other 8 offices used 
different thresholds. Each of the 3 regions that did not have a set 
threshold for "unacceptable" underenrollment indicated that 
underenrollment was treated on a case-by-case basis that would take 
into consideration the degree of underenrollment and other factors, 
including the grantee's efforts to increase enrollment. For the regions 
that specified thresholds of "unacceptable" underenrollment, these 
thresholds ranged from any enrollment ratio below 100 percent in 3 
regions to below 74 percent in one region (See table 1.):

Table 1: ACF Regional Thresholds for Unacceptable Levels of 
Underenrollment:

ACF region or branch and coverage area: Region I; Connecticut, Maine, 
Massachusetts, New Hampshire, Rhode Island, and Vermont; 
Thresholds for unacceptable underenrollment: No threshold.

ACF region or branch and coverage area: Region II; New Jersey, New 
York, Puerto Rico, and U.S. Virgin Islands; Thresholds for 
unacceptable underenrollment: No threshold.

ACF region or branch and coverage area: Region III; Delaware, District 
of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia; 
Thresholds for unacceptable underenrollment: Less than 97 
percent.

ACF region or branch and coverage area: Region IV; Alabama, Florida, 
Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and 
Tennessee; Thresholds for unacceptable underenrollment: Less 
than state average[A].

ACF region or branch and coverage area: Region V; Illinois, Indiana, 
Michigan, Minnesota, Ohio, and Wisconsin; Thresholds for 
unacceptable underenrollment: Less than 100 percent.

ACF region or branch and coverage area: Region VI; Arkansas, Louisiana, 
New Mexico, Oklahoma, and Texas; Thresholds for unacceptable 
underenrollment: No threshold.

ACF region or branch and coverage area: Region VII; Iowa, Kansas, 
Missouri, and Nebraska; Thresholds for unacceptable 
underenrollment: Less than 74 percent.

ACF region or branch and coverage area: Region VIII; Colorado, Montana, 
North Dakota, South Dakota, Utah, and Wyoming; Thresholds for 
unacceptable underenrollment: Less than 95 percent.

ACF region or branch and coverage area: Region IX; Arizona, California, 
Hawaii, Nevada, and Pacific Insular Areas; Thresholds for 
unacceptable underenrollment: Less than 95 percent.

ACF region or branch and coverage area: Region X; Alaska, Idaho, 
Oregon, and Washington; Thresholds for unacceptable 
underenrollment: Less than 100 percent.

ACF region or branch and coverage area: American Indian-Alaska Native 
Program Branch--23 of 50 states; Thresholds for unacceptable 
underenrollment: Less than 100 percent.

Source: GAO survey of ACF regional offices and ACF.

[A] State average in region IV refers to the average enrollment level 
of all Head Start grantees for each state within the region.

[End of table]

ACF regional offices reported that they identify unacceptable 
underenrollment primarily by visiting grantees every 3 years and also 
by engaging grantees in periodic dialogue. More than half of the 
regions also said that they relied heavily on PIR data and on their 
review of grant-refunding applications. Finally, 5 regions indicated 
that they rely to a great extent on their reviews of annual audits of 
grantees. Table 2 presents the extent to which regional offices rely on 
various approaches to identify underenrollment.

Table 2: Number of ACF Regions Relying on Various Methods to Oversee 
Head Start Grantee and Delegate Agency Enrollment Levels:

On-site monitoring; Extent relied upon: Great or very great: 11; Extent 
relied upon: Moderate: 0; Extent relied upon: Some, little, or no: 0.

Periodic dialogue with grantees; Extent relied upon: Great or very 
great: 10; Extent relied upon: Moderate: 1; Extent relied upon: Some, 
little, or no: 0.

Review of grant re-funding application; Extent relied upon: Great or 
very great: 8; Extent relied upon: Moderate: 2; Extent relied upon: 
Some, little, or no: 1.

Analyze PIR data; Extent relied upon: Great or very great: 7; Extent 
relied upon: Moderate: 3; Extent relied upon: Some, little, or no: 1.

Review of annual audits; Extent relied upon: Great or very great: 5; 
Extent relied upon: Moderate: 3; Extent relied upon: Some, little, or 
no: 3.

Source: GAO survey of ACF regional offices.

[End of table]

Each of the approaches used by regional offices to monitor enrollment 
is lacking in timeliness or accuracy, or is not used systematically to 
monitor underenrollment. For example, in 3 regions we visited, ACF 
officials commented that while the on-site visits are designed to 
systematically assess underenrollment, the visits do not provide timely 
information because they are only conducted every 3 years. Conversely, 
while most regional officials we surveyed said that they rely on 
periodic discussions with grantees to identify underenrolled grantees, 
regional officials we visited said that they do not systematically 
discuss enrollment levels with grantees during this process. Officials 
from one region we interviewed also said that enrollment data included 
in grant re-funding applications are not informative because the data 
are based on forecasts. Also, while surveyed officials listed the PIR 
data as a key resource, those we spoke with said it was not necessarily 
accurate or timely due to the fact that data arrive after the 
subsequent program year has begun. Finally, regarding the use of annual 
audits, regional officials we spoke with said they did not always 
receive them for all grantees and that the audits they did receive do 
not necessarily comment on grantee enrollments.[Footnote 11]

National Data on the Extent of Underenrollment Differs from Regionally 
Reported Data on Number of Unacceptably Underenrolled Grantees:

Applying a range of underenrollment thresholds to national data 
indicates that a higher percentage of grantees may be underenrolled 
than what was reported to us by regional offices. Regional offices, 
using a range of enrollment thresholds, reported to us that about 7 
percent of grantees were unacceptably underenrolled. Comparatively, PIR 
survey data indicated that more than 50 percent of Head Start grantees 
had enrollment ratios below 100 percent--the regulatory definition of 
fully enrolled. PIR data also showed a significantly higher proportion 
of grantees--33 percent--reported enrollment ratios below 95 percent 
than the 7 percent of grantees reported as unacceptably underenrolled 
by the regional offices. Finally, PIR data showed that a similar 
proportion of grantees--about 9 percent--reported an enrollment ratio 
below 80 percent as the 7 percent of unacceptably underenrolled 
grantees reported to us by the regions. (See fig. 5.):

Figure 5: Comparison of Enrollment Ratios as reported in 2001-02 PIR 
Survey with Unacceptably Underenrolled Grantees as Reported by ACF 
Regions:

[See PDF for image]

[End of figure]

The portion of grantees that regions reported as unacceptably 
underenrolled differed from what would have been identified by applying 
the regional threshold to national PIR data. When compared with the 
percentage of unacceptably underenrolled grantees reported by regions, 
PIR data show larger percentages of grantees below these thresholds for 
each region that specified a threshold. This was true even in regions 
that indicated they relied on PIR data to a great or very great extent. 
(See table 3). For example, region V, using a threshold of 100 percent 
for unacceptable underenrollment, reported to us that slightly less 
than 2 percent of its grantees were unacceptably underenrolled in 2001-
02. PIR data from that same year indicate that about 62 percent of 
region V grantees had enrollment ratios less than 100 percent--a 
difference of 60 percentage points from what was reported to us. In 
fact, only regions III and VII, of the 7 regions in table 3 with 
clearly defined thresholds for unacceptable underenrollment, reported 
to us a percentage of unacceptably underenrolled grantees that was 
within 10 percentage points of what PIR data show using the same 
threshold. While we do not think that PIR data are reliable for 
reporting national enrollment figures, the regional offices based what 
they reported to us in part on their review of PIR data.

Table 3: Percentage of Head Start Grantees, by Region, Reported as 
Unacceptably Underenrolled by ACF Regions with Unacceptable 
Underenrollment Thresholds, Compared with PIR Data at the Same 
Thresholds:

Region/program branch: Region V; Illinois, Indiana, Michigan, 
Minnesota, Ohio, and Wisconsin; Regionally defined unacceptable 
underenrollment threshold: Less than 100 percent; Percentage of 
grantees reported by ACF regions as being unacceptably underenrolled in 
2001-02: 1.7; Extent to which regional office reported relying 
on PIR data: Moderate; Percentage of grantees reporting enrollment 
ratios at less than regionally defined unacceptable underenrollment 
threshold using 2001-02 PIR survey: 62.

Region/program branch: Region X; Alaska, Idaho, Oregon, and Washington; 
Regionally defined unacceptable underenrollment threshold: Less than 
100 percent; Percentage of grantees reported by ACF regions as being 
unacceptably underenrolled in 2001-02: 13.6; Extent to which 
regional office reported relying on PIR data: Great; Percentage of 
grantees reporting enrollment ratios at less than regionally defined 
unacceptable underenrollment threshold using 2001-02 PIR survey: 64.8.

Region/program branch: American Indian-Alaska Native Branch - 23 of 50 
states; Regionally defined unacceptable underenrollment threshold: 
Less than 100 percent; Percentage of grantees reported by ACF regions 
as being unacceptably underenrolled in 2001-02: 44.5; Extent 
to which regional office reported relying on PIR data: Great; 
Percentage of grantees reporting enrollment ratios at less than 
regionally defined unacceptable underenrollment threshold using 2001-
02 PIR survey: 59.8.

Region/program branch: Region III; Delaware, District of Columbia, 
Maryland, Pennsylvania, Virginia, and West Virginia; Regionally defined 
unacceptable underenrollment threshold: Less than 97 percent; 
Percentage of grantees reported by ACF regions as being unacceptably 
underenrolled in 2001-02: 14.3; Extent to which regional 
office reported relying on PIR data: Very great; Percentage of grantees 
reporting enrollment ratios at less than regionally defined 
unacceptable underenrollment threshold using 2001-02 PIR survey: 21.4.

Region/program branch: Region VIII; Colorado, Montana, North Dakota, 
South Dakota, Utah, and Wyoming; Regionally defined unacceptable 
underenrollment threshold: Less than 95 percent; Percentage of grantees 
reported by ACF regions as being unacceptably underenrolled in 2001-02: 
4.3; Extent to which regional office reported relying on PIR 
data: Some; Percentage of grantees reporting enrollment ratios at less 
than regionally defined unacceptable underenrollment threshold using 
2001-02 PIR survey: 26.1.

Region/program branch: Region IX; Arizona, California, Hawaii, Nevada, 
and Pacific Insular Areas; Regionally defined unacceptable 
underenrollment threshold: Less than 95 percent; Percentage of grantees 
reported by ACF regions as being unacceptably underenrolled in 2001-02: 
0.9; Extent to which regional office reported relying on PIR 
data: Moderate; Percentage of grantees reporting enrollment ratios at 
less than regionally defined unacceptable underenrollment threshold 
using 2001-02 PIR survey: 33.8.

Region/program branch: Region VII; Iowa, Kansas, Missouri, and 
Nebraska; Regionally defined unacceptable underenrollment threshold: 
Less than 74 percent; Percentage of grantees reported by ACF regions as 
being unacceptably underenrolled in 2001-02: 2.2; Extent to 
which regional office reported relying on PIR data: Great; Percentage 
of grantees reporting enrollment ratios at less than regionally defined 
unacceptable underenrollment threshold using 2001-02 PIR survey: 8.2.

Source: GAO analysis of survey responses from ACF regional offices and 
PIR data.

[End of table]

Differing Definitions of Underenrollment Create Potential for Uneven 
Treatment of Grantees across Regions:

As a result of differences in regional definitions of what constitutes 
an unacceptable level of underenrollment, grantees with similar levels 
of underenrollment may be treated differently across regions, 
particularly in areas without a defined threshold. Regional offices 
reported to us that they take a variety of actions to address 
unacceptable underenrollment, including increased monitoring, 
technical assistance, and, occasionally, enforcement actions, 
including recouping funds and reducing future grant awards. To the 
extent that differing thresholds affect the identification of 
deficiencies that would lead to these actions, regions may subject 
grantees to different treatment. For example, as shown in table 4, 
although a higher percentage of grantees in region II have enrollment 
levels below 95 percent than in region III, according to PIR data (44 
percent versus 18 percent), region II considers only 3 percent of its 
grantees unacceptably underenrolled, while region III considers 14 
percent of its grantees unacceptably underenrolled. This discrepancy 
may be attributable to the fact that region II lacks a threshold for 
defining unacceptable enrollment, while region III has set a threshold 
of 97 percent. As a result, more grantees in region III have been 
subject to monitoring and enforcement actions.

Table 4: Comparison of Region II and III Grantees Identified as 
Underenrolled:

Percentage of grantees with enrollment ratio below 95% according to 
PIR; Region II--New Jersey, New York, Puerto Rico, and U.S. Virgin 
Islands: 44.4 %; Region III--Delaware, District of Columbia, Maryland, 
Pennsylvania, Virginia, and West Virginia: 17.6 %.

Threshold for unacceptable enrollment; Region II--New Jersey, New York, 
Puerto Rico, and U.S. Virgin Islands: No threshold; Region III--
Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and 
West Virginia: Less than 97%.

Percentage of grantees reported to us by region as unacceptably 
underenrolled; Region II--New Jersey, New York, Puerto Rico, and U.S. 
Virgin Islands: 2.7; Region III--Delaware, District of Columbia, 
Maryland, Pennsylvania, Virginia, and West Virginia: 14.3.

Source: GAO analysis of survey responses from ACF regional offices and 
PIR data.

[End of table]

Regional and Grantee Officials Often Cited Combinations of Factors as 
Responsible for Underenrollment:

ACF regional officials and officials of underenrolled Head Start 
grantees often cited a mixture of factors that made it difficult to 
achieve full enrollment, including increased parental demand for full-
day child care and a decrease in the number of eligible children. Many 
said welfare reform has increased the number of working parents, 
increasing demand for full-day child care and reducing the number of 
eligible children. Also, more than one-half of the grantees we 
interviewed reported they were having difficulty acquiring and 
developing adequate facilities. Meanwhile, underenrolled grantees and 
ACF regional officials also said that underenrollment was occurring 
because more parents were seeking services with other early education 
and child care programs, some of which subsidized care with relatives. 
Other contributing factors, such as eligible families moving from the 
service area, language, and cultural differences between children's 
families and program staff, and weak or inadequate recruiting efforts 
by the grantees, were less frequently cited.

Multiple Factors Often Linked to Underenrollment:

Many grantees indicated that the combination of multiple factors had 
fostered underenrollment for their program. Nearly two-thirds of the 
underenrolled grantees we spoke with cited two or more contributing 
factors. For example, one northern California grantee believed that 
underenrollment was caused by a decrease in income-eligible children in 
its area, because the high cost of living and a shortage of affordable 
housing in the area, and also by the number of families moving from 
welfare to work. In addition to citing the decrease in eligible 
children, this grantee expressed a need for more full-day slots, and 
reported facing increasing competition from day care programs that 
reimbursed relatives or friends to provide full-time child care. 
Similarly, one New Jersey grantee experiencing problems acquiring a new 
facility was also affected by a state supreme court decision requiring 
free preschool for poor children. Additionally, this grantee felt that 
it was losing eligible children as a result of families on welfare 
finding jobs and needing more full-day slots. A commonly cited 
combination of factors--cited by 8 of the 25 grantees we interviewed--
was the simultaneous shortage of full-day slots and the movement of 
families out of welfare and into the workforce.

Increased Demand for Full-day Care, Facilities Problems, and Increased 
Availability of Other Programs Most Frequently Cited as Affecting 
Underenrollment:

Regional and grantee officials most frequently cited the increased 
demand for full-day child care, construction delays and inadequate 
facilities, and the increased availability of early education and child 
care programs as the factors causing underenrollment. Other factors, 
such as high turnover rates and income eligibility criteria were also 
cited, but less frequently. Each of the factors affecting 
underenrollment that grantees and regions cited is described in more 
detail in the following sections. Appendix II lists the factors 
identified by regions as contributing to grantee underenrollment, and 
appendix III lists factors identified by grantees.

Grantees and Regions Said Movement of Families from Welfare to Work 
Affected Enrollment and Increased Demand for Full-day Care:

Both regional and grantee officials said that the movement of low-
income families from welfare to work had contributed to 
underenrollment. Seven of 11 regions cited the movement of low-income 
families from welfare to work as either a major or a moderate reason 
for grantees' underenrollments. Similarly, of the 25 grantees we 
contacted, 11 cited this factor. Regional officials and grantees 
suggested the movement from welfare to work affected enrollments in two 
ways. First, as many parents began to work full-time, they increasingly 
needed full-day care. When Head Start grantees could not meet this 
need, some eligible families secured child care elsewhere. Second, some 
families entered work and earned income that disqualified their 
children from Head Start programs. A number of grantees related 
specific examples of how the movement from welfare to work affected 
enrollments. For example,

* A large grantee in Illinois said that many former welfare recipients 
who need full-day child care services no longer qualify for Head Start 
because they earn wages just above the Head Start income guidelines or 
work rotating schedules to avoid using formal child care services.

* A grantee in California said that the cost associated with switching 
to full-day care sometimes is a barrier to meeting families' needs.

Construction Delays and Inadequate Facilities Affected Enrollments:

Of the 25 underenrolled grantees we surveyed, 14 reported that 
difficulty acquiring and developing adequate facilities contributed to 
underenrollment. Similarly, over half of the 11 regions reported that 
underenrollment was linked to a major or moderate extent to facilities 
being completed more slowly than expected. For example, an Eastern 
grantee was unable to serve children in need of full-day care because 
it lacked classrooms and found it difficult to acquire more space. In 
the Midwest, 2 grantees reported that their inadequate facilities kept 
them from filling about 1,800 funded slots--43 percent of their funded 
slots--even though many eligible families desired Head Start services 
for their children. The grantees said that they had difficulty 
acquiring alternate facilities: some potential sites were 
environmentally unsuitable, while others faced neighborhood 
opposition. In another case, an American Indian grantee that had 25 
unfilled Early Head Start slots expects to achieve 100 percent 
enrollment in the fall of 2003 when a new facility is scheduled to 
open.

Other Early Education and Child Care Programs Can Affect Enrollments:

Regional and grantee officials often indicated that competition from 
other early education or child care centers serving low-income 
preschool children contributed to Head Start underenrollment. Seven of 
11 regions cited this factor as a major or moderate contributor to 
underenrollment, and 8 of 25 grantees we interviewed identified this 
factor. In addition, 5 grantees said that a closely related factor also 
reduced families' use of Head Start--the availability of state 
subsidies to pay relatives or friends for child care.

Officials in 2 regions provided specific examples of increased 
availability of other programs having a negative impact on Head Start 
enrollment. According to region V officials, the availability of other 
programs had a major impact on a large grantee in Michigan when the 
public school system increased its preschool programming and as a 
result increased the options available to Head Start-eligible children. 
As a result, the grantee sustained a shortfall of almost 2,000 
children.

Grantees also reported specific examples of increased availability of 
other programs having a negative impact on Head Start enrollment:

* A large underenrolled grantee on the East Coast said that 
availability of prekindergarten programs at public and charter schools 
is the most important reason its delegate agencies are underenrolled.

* A medium-sized grantee in Oklahoma with 454 funded slots indicated 
that in the 2001-02 school year, the local public school started a 
preschool program for 4-year-old children that resulted in a slight 
decline in Head Start enrollments at some of its service centers.

* Officials representing a smaller grantee in Georgia with 161 funded 
slots said that their program was affected in 2001-02 when the state 
funded a prekindergarten program in public schools. Specifically, the 
grantee said that some children who had been pre-enrolled for Head 
Start switched to the state-funded program.

Regional and grantee officials also indicated that state subsidies for 
unlicensed child care caused some grantees to be underenrolled. 
Officials of region IX (Arizona, California, Hawaii, Nevada, and 
Pacific Insular Areas) said that increasingly, low-income parents make 
use of state child care subsidies to pay for child-care exempt from 
licensing standards, such as care provided by friends or nonresident 
relatives. Region IX officials believed this had a significant impact 
on reducing Head Start program enrollments. In another example, a 
grantee in Pennsylvania saw its enrollments drop after the state 
allowed parents to use state child care subsidies to pay nonlicensed 
child care providers such as relatives and friends. In another 
instance, a grantee in California said that since its program primarily 
offers part-day/part-year services, many families chose to use 
subsidized, license-exempt care by relatives or friends who can provide 
full-day or part-day care.

Other Factors Affected Enrollments, but Were Cited Less Frequently:

Less frequently, regions and grantees also cited other factors as 
negatively influencing Head Start enrollment. Eight grantees indicated 
that eligible families had moved from their service areas, often 
because of the high cost of living, increasing underenrollment. Three 
regions also reported that high turnover rates among enrolled children 
contributed moderately to underenrollment.

Five grantees indicated that the income-eligibility criterion for Head 
Start was too low in their high-cost areas. For example, 4 
underenrolled California grantees said that even relatively poor 
families were disqualified from Head Start participation because their 
incomes, though inadequate to meet the basic costs in the local area, 
were above the federal poverty guidelines. Officials of an 
underenrolled grantee in Oakland indicated that during the 2002-03 
program year they had denied Head Start services to over 100 families 
because their incomes exceeded the current poverty guidelines. The 
other three California grantees said that they were also turning 
families away because they were slightly over the income guidelines. 
Grantees said that families just over the federal poverty guideline 
cannot afford to send their children to education and child care 
programs equivalent in quality to Head Start programs.

Four regions cited inadequate program management factors, such as weak 
recruitment efforts, as a major or moderate contributor to 
underenrollment. Five grantees also cited such factors as inhibiting 
Head Start enrollments. Inadequate program management was characterized 
by weak recruitment efforts, not developing or using waiting lists of 
Head Start-eligible children, and planning enrollment expansions 
poorly. For example, a grantee in Pennsylvania agreed to expand 
enrollment by 144 slots, and although the grantee received increased 
funding in the 2000-2001 program year, grantee officials said they had 
difficulty filling the additional slots because of inadequate planning 
by the previous management team.

Three grantees in California noted that language and cultural 
differences between eligible Head Start families and program staff 
complicated outreach and consequently reduced enrollments from some 
minority groups. One grantee indicated that families in its service 
area spoke over 25 languages at home. Another grantee said it was 
difficult to find staff that spoke the same languages as the families 
needing service.

ACF and Grantees Use a Variety of Approaches to Address 
Underenrollment:

ACF national and regional offices and grantees all report taking action 
to address underenrollment, such as issuing guidance, increasing 
monitoring, and attempting to conduct broader outreach efforts. The ACF 
national office issued a memorandum instructing regional offices to 
address underenrollment, and all ACF regions we surveyed said that they 
have increased their monitoring efforts. Some ACF regions have also 
taken action to reduce grantees' funding and recoup federal funds. Many 
grantees we spoke with have increased outreach efforts, sought partners 
to help provide more full-day services, and increased the capacity of 
physical facilities. While 18 of the 25 grantees we contacted had made 
progress toward achieving full enrollment, others cited continuing 
challenges.

ACF-Issued Guidance for Managing Underenrollment Lacks Specific 
Criteria for Priority Review and Corrective Action:

In April 2003, ACF headquarters issued policy guidance to its regional 
offices instructing them to take specific actions with underenrolled 
grantees, although it provided no particular instructions for the 
review process or any criteria for prioritizing grantees for corrective 
action. The guidance instructs regional officials to address 
underenrollment depending on four possible causes. For example, if the 
grantee can demonstrate that an inappropriate program option is causing 
underenrollment, the guidance instructs regions to carefully consider 
grantee requests to make changes to their services, such as converting 
current part-day slots to full-day slots. The four causes identified in 
the guidance and the recommended actions are summarized in table 5.

Table 5: April 2003 National Head Start Guidance to ACF Regions:

1; Category of underenrollment: Temporary in nature (e.g., awaiting 
completion of a new facility); Expected regional action: Ask grantee 
to document in writing when it will return to full enrollment. Periodic 
follow-up by assigned regional program specialist. Reevaluate grantee 
status if it remains in this category for more than several months.

2; Category of underenrollment: Attributable to a nonimplemented 
expansion (i.e., where a grantee that was given expansion funding to 
serve an increased number of children failed to enroll these children 
within a reasonable time period); Expected regional action: Generally, 
all grantees must have the additional children enrolled in their 
programs within 1 year of receiving their grant expansion. Regions 
should; * track grantee expansion, * contact grantee and discuss 
reasons for delays, * judge whether grantee is making sufficient 
progress to warrant extension, * require an implementation plan for 
any extension, which must not exceed 6 months, and; * inform the 
grantee in writing that expansion funds will no longer be available if 
at any time the region determines that the grantee will not be able to 
implement its approved expansion in a reasonable time period.

3; Category of underenrollment: Attributable to demographic changes 
that have reduced the number of eligible children in the grantee's 
service area; Expected regional action: Determine an appropriate 
reduction in the grantee's enrollment and funding levels. ACF's general 
policy will be to; * give the grantee appropriate notice that a funding 
reduction will be initiated, * implement funding reductions at the 
time a grant is being refunded, based on a grantee's historical 
underenrollment problems, and; * reduce funding proportionate to the 
degree of underenrollment (i.e., on a cost per child basis adjusting 
for those grantee costs that are not directly related to enrollment 
such as the salaries and fringe benefits of management staff.

4; Category of underenrollment: Not attributable to any of the above 
causes, but occurring because of grantee management issues. This would 
include poor community outreach, inadequate needs assessments, 
inappropriate program options, inadequate transportation services, 
poor facility planning, lack of coordination with other community 
providers, such as prekindergarten programs, or any other management 
problems causing underenrollment; Expected regional action: Make an 
on-site monitoring visit to the grantee to fully assess the reasons for 
underenrollment. The assessment could result in the region designating 
the grantee as deficient. (The region may designate a grantee as being 
in non-compliance rather than deficient if it determines 
underenrollment is an isolated issue that does not seem to be part of a 
more systemic problem with the grantee's ability to provide an 
appropriate level of Head Start services.); A deficient grantee is 
required to submit a Quality Improvement Plan (QIP) indicating how, 
within 1 year or less, it will achieve full enrollment. This could be 
accomplished by fixing the problem causing the underenrollment or by 
agreeing to an enrollment reduction that would bring the grantee to its 
full enrollment level, or some combination thereof. The region should 
monitor the grantee's progress in implementing its QIP and provide any 
appropriate technical assistance. If the underenrollment has not been 
corrected at the end of the QIP period, the region needs to initiate an 
adverse action against the grantee, which would be termination or 
denial of re-funding; If an inappropriate program option is a major 
factor causing underenrollment, regions must consider a grantee's 
request to reconfigure its program options. Changes such as conversion 
of part-day slots to full-day or reduction of double sessions may 
include some proposed reduction for enrollment levels. Each such 
proposal should be judged on its own merits, including the extent to 
which the grantee proposes to collaborate with other community 
providers and the extent to which the proposed reconfiguration is 
supported by data from the grantee's current community assessment.

Source: GAO analysis of ACF memorandum.

[End of table]

The April guidance does not suggest any systematic process for 
identifying underenrolled grantees, nor does it specify criteria for 
prioritizing when grantees should be subject to corrective action based 
on their level of underenrollment. One regional official said that the 
lack of a threshold offered no gauge for establishing priorities and 
intensifying monitoring efforts.

Regional Officials Reported Intervening with Underenrolled Grantees to 
Correct Underenrollment:

The ACF regions we surveyed reported taking a variety of actions to 
address underenrollment ranging from providing assistance to recouping 
federal funds in some cases. Officials in all 11 regions responded that 
they had taken at least one action to ensure that grantees address 
underenrollment. The interventions taken most often were to monitor 
enrollment levels (55 grantees), track improvement efforts (43), and 
provide training and technical assistance (30). Notably, 4 regions 
provided additional funds to a total of 18 underenrolled grantees to 
purchase or renovate facilities. Somewhat less often, regions took 
action to reduce funded enrollment levels or recoup funds. 
Specifically, only 2 regions reported that they recouped funds from a 
total of 6 underenrolled grantees. (See table 6.):

Table 6: Actions by ACF Regions toward Underenrolled Grantees:

Regional actions: Identified deficiency and pursued QIP; Count of 
regions taking the action: 6; Number of grantees to which action 
applied: 19.

Regional actions: Met with grantees and developed plan to address 
underenrollment; Count of regions taking the action: 5; Number of 
grantees to which action applied: 29.

Regional actions: Required frequent (such as monthly) reporting of 
enrollment; Count of regions taking the action: 5; Number of grantees 
to which action applied: 55.

Regional actions: Provided funds for purchase or renovation of 
facilities or for more comprehensive community assessments; Count of 
regions taking the action: 4; Number of grantees to which action 
applied: 18.

Regional actions: Tracked correction efforts for compliance; Count of 
regions taking the action: 3; Number of grantees to which action 
applied: 43.

Regional actions: Provided training and technical assistance; Count 
of regions taking the action: 3; Number of grantees to which action 
applied: 30.

Regional actions: Negotiated reductions in funding levels and funded 
slots; Count of regions taking the action: 3; Number of grantees to 
which action applied: 9.

Regional actions: Withheld or recaptured funds for the year of 
underenrollment; Count of regions taking the action: 2; Number of 
grantees to which action applied: 6.

Regional actions: Held meetings with grantee's board and management; 
Count of regions taking the action: 2; Number of grantees to which 
action applied: 3.

Regional actions: Proposed Head Start grant be relinquished or 
terminated; Count of regions taking the action: 2; Number of grantees 
to which action applied: 2.

Regional actions: Requested audit by the HHS Office of Inspector 
General; Count of regions taking the action: 1; Number of grantees to 
which action applied: 1.

Regional actions: Changed program options; Count of regions taking 
the action: 1; Number of grantees to which action applied: 1.

Source: GAO analysis of ACF regional office survey responses.

[End of table]

As noted earlier, many regions and grantees said the need for full-day 
services was a major factor fostering underenrollment. As part of their 
efforts to assist grantees in providing more full-day services, some 
ACF regional officials told us they had encouraged grantees to 
collaborate with other programs or had provided additional funds to 
purchase or renovate facilities. However, such efforts can be costly. 
For example, region V officials told us that it costs more to provide 
full-day care than part-day care because full-day care requires more 
facility space and staff per child.

Underenrolled Grantees Report Taking Some Remedial Actions:

Grantees we interviewed took a variety of actions to address 
underenrollment, including more aggressive recruiting efforts, 
collaborating with other preschool and child care programs, and 
increasing slots in selected program options such as home-based 
services. Most grantees we contacted said that they had taken one or 
more actions. The most frequently mentioned was more aggressive 
recruiting followed by collaboration with other programs. For example, 
a large grantee in New York State that faced increased demand for full-
day care since welfare reform collaborated increasingly with other 
child care providers to piece together a package of full-day services. 
Nine grantees also reported trying to increase physical facilities 
capacity. (See table 7.) Other actions taken to address 
underenrollment, which were cited by 3 or fewer grantees, included 
improving the tracking or monitoring of enrollment opportunities, 
hiring multilingual staff, reducing the number of funded slots, and 
providing contractual incentives for delegate agencies to maintain full 
enrollment.

Table 7: Actions Taken by Interviewed Grantees to Address 
Underenrollment:

Action taken: Took more aggressive and proactive recruiting approach; 
Number of grantees taking the action: (n = 25): 14.

Action taken: Collaborated with other preschool and child care 
programs; Number of grantees taking the action: (n = 25): 12.

Action taken: Increased capacity of physical facilities; Number of 
grantees taking the action: (n = 25): 9.

Action taken: Increased slots in selected program options; Number of 
grantees taking the action: (n = 25): 6.

Action taken: Worked on updating community assessment; Number of 
grantees taking the action: (n = 25): 6.

Action taken: Increased marketing of Head Start to the community; 
Number of grantees taking the action: (n = 25): 5.

Action taken: Relocated and developed new program centers; Number of 
grantees taking the action: (n = 25): 5.

Action taken: Identified a new unserved low-income population; Number 
of grantees taking the action: (n = 25): 4.

Action taken: Trained staff in recruitment and program promotion; 
Number of grantees taking the action: (n = 25): 2.

Action taken: Increased home-based program enrollments; Number of 
grantees taking the action: (n = 25): 1.

Source: GAO analysis of interviews with underenrolled grantees.

[End of table]

Grantees Cite Obstacles to Providing Additional Full-Day Care:

Several grantees told us that converting part-day services to full-day 
was often challenging to implement in addition to being more costly. 
Additionally, 2 grantees said that ACF did not fully understand all 
that was involved in transitioning from part-day to full-day services, 
and that there was no clear national guidance on how to do so. 
According to these California grantees,

The costs of transitioning part-day, double sessions, to full-day 
services have never been fully understood and no national process has 
emerged to assist grantees and regional offices to address this 
problem. The major costs often include facilities and additional 
staffing (where only two and one-half staff are needed for a double 
session, four to six are needed to staff a full-day session, depending 
on the number of hours the option operates). Such fixed costs would 
require a reduction in the number of slots (children enrolled) or an 
increase in funding in order to transition from part-day double 
sessions to two full-day sessions.

While these two grantees expressed concern over a lack of guidance, it 
should be noted that there is national guidance on budgeting for 
partnerships between child care and Head Start and on financial 
management issues in Head Start programs utilizing other funding 
sources.[Footnote 12]

Furthermore, grantees told us of their concern to maintain total funded 
enrollment levels, even as they were converting unfilled part-day 
openings to full-day. According to region V officials, this concern to 
maintain enrollment levels may be in keeping with national efforts to 
serve a greater number of needy children.[Footnote 13] For example, one 
underenrolled grantee said that ACF suggested several alternatives to 
address underenrollment, including converting part-day to full-day 
slots, but would not permit the grantee to reduce funded slots as a way 
to address underenrollment. Consequently, while converting part-day 
slots to full-day slots, the grantee would have had to expand its 
facilities or find other child care partners in order to serve the same 
number of children.

Grantees Reported Mixed Results Resolving Underenrollments:

Some grantees reported success addressing underlying factors 
contributing to underenrollment, while others did not. Of the 25 
underenrolled grantees that we contacted, 18 (72 percent) indicated 
that their underenrollment had either been corrected (10 grantees) or 
would be corrected shortly (8 grantees). These 18 grantees overcame a 
variety of factors that they said affected underenrollment. For 
example, 6 of these 18 grantees overcame a shortage of available full-
day slots and 8 managed to fill slots lost due to a decline in eligible 
children attributed to declining TANF rolls. The 7 grantees that had 
not made progress addressing underenrollment often cited similar 
issues. For example, 3 of these 7 grantees said they had faced 
challenges resulting from decreasing TANF caseloads and were unable to 
respond to the increased demand for full-day services. On the basis of 
our limited number of interviews, we could not determine why some 
grantees reported they were able to successfully address problems that 
other grantees could not.

Conclusions:

Because ACF has no reliable nationwide data on enrollment, it is not 
possible for the agency to identify and track underenrollment trends 
and to develop strategies to ensure that federally funded Head Start 
slots are filled. While we could not determine with any precision the 
extent to which there is underenrollment, our survey work and analysis 
indicate it is possible that underenrollment is more widespread than 
ACF has acknowledged. The complexity of factors buffeting Head Start 
grantees underscores the need for ACF to accurately identify 
underenrollment and its causes on a timely basis. Even if ACF corrects 
national survey data issues, there is no guarantee that its regions 
will know of underenrollment in a timely manner because the main 
national data source is not available until the following program year.

Furthermore, because ACF regions vary in how they define unacceptable 
levels of underenrollment and because they rely on approaches to 
identify grantees that are not timely or consistent, there is some 
indication that Head Start grantees with similar levels of 
underenrollment are treated differently across regions. ACF guidance to 
the regions on how to address different types of underenrollment is a 
good first step toward a more systematic approach to underenrollment. 
However, until ACF issues guidance that more clearly explains how to 
prioritize grantees with varying levels of underenrollment for purposes 
of corrective action, regions are likely to continue using varied 
criteria or none at all. Also, until more timely and systematic 
approaches are developed for regions to identify underenrolled 
grantees, it is possible that low enrollment will go undetected and 
federal dollars will not be fully utilized for low-income children who 
could benefit from Head Start's program goals.

Finally, it appears that there may be a perceived incentive for 
underenrolled grantees to maintain or increase enrollments due, in 
part, to ACF's emphasis on counting the total number of children served 
irrespective of whether they are enrolled part-day or full-day. 
Measuring Head Start enrollments without capturing the difference in 
level of service provided by full-day or part-day programs adds to the 
difficulty of meeting local needs and adjusting to changes in those 
needs. Until ACF can get a better grasp of the nature and size of 
underenrollment and align program incentives with family needs, it may 
be a challenge for Head Start to best meet the needs of some families 
it could serve.

Recommendations for Executive Action:

We recommend that the Secretary of HHS direct ACF to (1) take steps to 
ensure the accuracy of enrollment data reported in its annual 
nationwide survey of grantees, (2) develop a standard criterion for 
regional offices to use in identifying grantees whose underenrollment 
merits monitoring or corrective actions, (3) develop an additional 
measure of aggregate services other than total enrollment that takes 
into consideration the different levels of service provided by full-day 
and part-day programs, and (4) work with regional offices to develop a 
more systematic process for them to collect reliable enrollment data 
during the program year so that they can address underenrollment more 
quickly.

Agency Comments:

We provided a draft of this report to the Department of Health and 
Human Services for review and comment. In its written response, 
included as appendix IV of this report, HHS agreed with our 
recommendations and indicated that it will take action to address each 
recommendation.

We are sending copies of this report to the Secretary of Health and 
Human Services and other interested parties. In addition, the report 
will be available at no charge on GAO's Web site at http://www.gao.gov.

If you or your staffs have any further questions about this report, 
please call me on (202) 512-7215. Other GAO contacts and staff 
acknowledgments are listed in appendix V.

Sincerely yours,

Marnie S. Shaul: 
Director, Education, Workforce, and Income Security Issues:

Signed by Marnie S. Shaul: 

[End of section]

Appendix I: Scope And Methodology:

To determine what is known about the extent to which Head Start 
programs are underenrolled, we assessed the reliability of PIR 
enrollment data, conducted interviews, reviewed program documentation, 
and surveyed ACF regional offices. Specifically, we assessed the 
reliability of the PIR data on grantee enrollment by (1) performing 
electronic testing of key data elements for obvious errors in 
completeness and accuracy, (2) reviewing existing information about the 
data and the system that produces it, and (3) contacting 19 
underenrolled and overenrolled grantees selected across a range of 
reported enrollment ratios. We did not assess the reliability of other 
PIR data used in the report. We also interviewed ACF headquarters 
officials, reviewed federal guidance and regulations on enrollment, 
surveyed the regions and a branch office, and interviewed regional 
officials in regions III, V, and IX. The 3 regions were selected for 
site visits on the basis of geographical representation and the number 
of underenrolled grantees they reported to us. Since ACF oversight of 
Head Start grantees is primarily accomplished through its regions and 
program branches, we designed a survey instrument in which these 
entities could provide written responses to our specific requests for 
such information as:

* the methods the regions used to oversee grantee and delegate agency 
enrollment levels;

* the threshold, if any, they had established for determining the point 
at which a grantee or delegate agency's level of underenrollment is 
considered to be unacceptable;

* a list of all grantees and delegate agencies that they believed had 
unacceptable levels of underenrollment for both the 2001-02 and 2002-03 
program years;

* the reasons that they believed unacceptable levels of underenrollment 
had occurred and the extent (major, moderate, minor, or none) that they 
believed each identified reason had contributed to underenrollment;

* the actions they had taken to address the unacceptable level of 
underenrollment for their grantees and delegate agencies.

We surveyed all 10 ACF regional offices and the American Indian-Alaska 
Native Program Branch. The Migrant and Seasonal Program Branch was 
excluded from our review because of its lack of comparability with the 
other branch and regions caused by anticipated enrollment fluctuations 
resulting from the seasonal movement of migrant families.

To determine ACF officials' and Head Start grantees' views on the 
factors that contribute to underenrollment and to identify actions they 
took to address underenrollment, we relied on our survey of the ACF 
regional offices and the American Indian-Alaska Native Program Branch 
office as well as a interviews with 27 grantees (1 of which was 
actually a delegate agency) that had been identified by the regions as 
underenrolled. Twenty grantees were contacted by telephone and 7 were 
interviewed face-to-face. Two of the 27 grantees said that they had not 
experienced any underenrollment; therefore, our grantee survey results 
were based on the responses of 25 grantees that agreed with the 
regions' designation of their underenrolled status.

Using a standard set of questions, we interviewed at least 1 identified 
grantee from each region or branch. In selecting grantees to be 
interviewed, we chose 7 from the metropolitan areas of the 3 regions 
that we visited so that we could conduct some of the interviews in 
person. The other 20 grantees we interviewed were primarily selected 
from each region based on having been identified as being underenrolled 
for 2 program years (2001-02 and 2002-03). We also attempted to 
interview both grantees that were funded for more than 500 slots and 
grantees that were funded for fewer.

The grantee interview requested that grantee officials:

* describe the factors they believed contributed to the grantee's 
underenrollment,

* identify the actions the grantee had taken to address 
underenrollment, and:

* indicate whether they believed that the grantee's underenrollment had 
been corrected.

Because of the lack of reliable enrollment data, the information we 
collected regarding underenrollment was primarily testimonial. Apart 
from assessing the basic consistency of interviewees' responses with 
known program characteristics, we did not independently test the 
information they provided, such as reasons for underenrollment.

[End of section]

Appendix II: Factors That the ACF Regions Believed Contributed to 
Underenrollment to a Major or Moderate Extent:

Table 8: Factors Cited By ACF Regions as Contributing to 
Underenrollment to a Major or Moderate Extent, during Program Years 
2001-02 and 2002-03:

1; Factor cited as contributing to underenrollment: Fewer eligible 
families (moving into jobs and off TANF); Number of times cited: 7; 
Percentage of regions citing factor: 63.6.

2; Factor cited as contributing to underenrollment: Not enough full-
day slots; Number of times cited: 7; Percentage of regions citing 
factor: 63.6.

3; Factor cited as contributing to underenrollment: Other day care or 
education centers are available in the area; Number of times cited: 
7; Percentage of regions citing factor: 63.6.

4; Factor cited as contributing to underenrollment: Completion of 
facilities was slower than planned; Number of times cited: 6; 
Percentage of regions citing factor: 54.5.

5; Factor cited as contributing to underenrollment: Demographic 
change: decrease in the number of eligible children in service area; 
Number of times cited: 6; Percentage of regions citing factor: 54.5.

6; Factor cited as contributing to underenrollment: Shortage of 
eligible children below the poverty rate cutoff; Number of times 
cited: 5; Percentage of regions citing factor: 45.5.

7; Factor cited as contributing to underenrollment: Too many part-day 
slots; Number of times cited: 5; Percentage of regions citing factor: 
45.5.

8; Factor cited as contributing to underenrollment: Waiting lists of 
eligible children not developed or used; Number of times cited: 4; 
Percentage of regions citing factor: 36.4.

9; Factor cited as contributing to underenrollment: Weak recruitment 
efforts; Number of times cited: 4; Percentage of regions citing 
factor: 36.4.

10; Factor cited as contributing to underenrollment: High turnover 
rate (e.g., families move often); Number of times cited: 3; 
Percentage of regions citing factor: 27.3.

11; Factor cited as contributing to underenrollment: Actual 
enrollments not yet caught up with recent funded program expansion; 
Number of times cited: 2; Percentage of regions citing factor: 18.2.

12; Factor cited as contributing to underenrollment: Not enough part-
day slots; Number of times cited: 1; Percentage of regions citing 
factor: 9.1.

13; Factor cited as contributing to underenrollment: Too many full-
day slots; Number of times cited: 1; Percentage of regions citing 
factor: 9.1.

Source: GAO analysis of ACF regional office survey responses.

[End of table]

[End of section]

Appendix III: Factors that Grantees Believed Contributed to Their Head 
Start Programs' Underenrollment:

Table 9: Factors Cited by 25 Grantees as Contributing to Head Start 
Program Underenrollment, during Program Years 2001-02 and 2002-03:

1; Factors contributing to underenrollment: Difficulties in acquiring 
and developing adequate facilities; Number of times cited: 14; 
Percentage of grantees citing factor: (n = 25): 56.0.

2; Factors contributing to underenrollment: Families moving into jobs 
and off TANF; Number of times cited: 11; Percentage of grantees citing 
factor: (n = 25): 44.0.

3; Factors contributing to underenrollment: Not enough full-day slots; 
Number of times cited: 9; Percentage of grantees citing factor: (n = 
25): 36.0.

4; Factors contributing to underenrollment: Other day care or education 
centers are in the area; Number of times cited: 8; Percentage of 
grantees citing factor: (n = 25): 32.0.

5; Factors contributing to underenrollment: Lack of housing for low-
income families; Number of times cited: 7; Percentage of grantees 
citing factor: (n = 25): 28.0.

6; Factors contributing to underenrollment: Income eligibility 
criterion too low for high-cost area; Number of times cited: 5; 
Percentage of grantees citing factor: (n = 25): 20.0.

7; Factors contributing to underenrollment: Programs paying relatives 
or friends for child care; Number of times cited: 5; Percentage of 
grantees citing factor: (n = 25): 20.0.

8; Factors contributing to underenrollment: Lack of income-eligible 
children in service area; Number of times cited: 4; Percentage of 
grantees citing factor: (n = 25): 16.0.

9; Factors contributing to underenrollment: High turnover rate (e.g., 
families move often); Number of times cited: 4; Percentage of grantees 
citing factor: (n = 25): 16.0.

10; Factors contributing to underenrollment: High cost of living causes 
low-income families to move; Number of times cited: 4; Percentage of 
grantees citing factor: (n = 25): 16.0.

11; Factors contributing to underenrollment: Language and cultural 
barriers among eligible families make selling program difficult; Number 
of times cited: 3; Percentage of grantees citing factor: (n = 25): 
12.0.

12; Factors contributing to underenrollment: Actual enrollments not yet 
caught up with expansion; Number of times cited: 2; Percentage of 
grantees citing factor: (n = 25): 8.0.

13; Factors contributing to underenrollment: Centers in wrong service 
area location; Number of times cited: 2; Percentage of grantees citing 
factor: (n = 25): 8.0.

14; Factors contributing to underenrollment: Centers with wrong mix of 
program service options; Number of times cited: 2; Percentage of 
grantees citing factor: (n = 25): 8.0.

15; Factors contributing to underenrollment: High cost of transitioning 
from part-day to full-day care; Number of times cited: 2; Percentage of 
grantees citing factor: (n = 25): 8.0.

16; Factors contributing to underenrollment: Inadequate program 
management; Number of times cited: 2; Percentage of grantees citing 
factor: (n = 25): 8.0.

17; Factors contributing to underenrollment: Poorly planned enrollment 
expansion; Number of times cited: 2; Percentage of grantees citing 
factor: (n = 25): 8.0.

18; Factors contributing to underenrollment: Weak or inadequate 
recruiting efforts; Number of times cited: 2; Percentage of grantees 
citing factor: (n = 25): 8.0.

19; Factors contributing to underenrollment: Completion of facilities 
was slower than planned; Number of times cited: 1; Percentage of 
grantees citing factor: (n = 25): 4.0.

20; Factors contributing to underenrollment: Difficulties in finding 
qualified collaborative care partners; Number of times cited: 1; 
Percentage of grantees citing factor: (n = 25): 4.0.

21; Factors contributing to underenrollment: Head Start income levels 
too low for collaborating with other low-income programs; Number of 
times cited: 1; Percentage of grantees citing factor: (n = 25): 4.0.

22; Factors contributing to underenrollment: Parents do not recognize 
the benefit of Head Start for their child; Number of times cited: 1; 
Percentage of grantees citing factor: (n = 25): 4.0.

23; Factors contributing to underenrollment: Waiting lists of eligible 
children not developed or used; Number of times cited: 1; Percentage of 
grantees citing factor: (n = 25): 4.0.

Source: GAO analysis of interviews with underenrolled grantees.

[End of table]

[End of section]

Appendix IV: Comments from the U.S. Department of Health and Human 
Services:

DEPARTMENT OF HEALTH & HUMAN SERVICES	
Office of Inspector General:

Washington, D.C. 20201:

NOV 25 2003:

Ms. Mamie S. Shaul:

Director, Education, Workforce, and Income Security Issues United 
States General Accounting Office Washington, D.C. 20548:

Dear Ms. Shaul:

Enclosed are the Department's comments on your draft report entitled, 
"Head Start: Better Data and Processes Needed to Monitor 
Underenrollment." The comments represent the tentative position of the 
Department and are subject to reevaluation when the final version of 
this report is received.

The Department appreciates the opportunity to comment on this draft 
report before its publication.

Sincerely,

Signed by: 

Dara Corrigan:

Acting Principal Deputy Inspector General:

Enclosure:

The Office of Inspector General (OIG) is transmitting the Department's 
response to this draft report in our capacity as the Department's 
designated focal point and coordinator for General Accounting Office 
reports. OIG has not conducted an independent assessment of these 
comments and therefore expresses no opinion on them.

Comments of the Department of Health and Human Services on the General 
Accounting Office's Draft Report, "Head Start: Better Data and 
Processes Needed to Monitor Underenrollment" (GAO-04-17):

The Department of Health and Human Services (HHS) appreciates the 
opportunity to comment on the General Accounting Office's (GAO) draft 
report.

GAO Recommendations:

GAO recommends that the Secretary of HHS direct the Administration for 
Children and Families (ACF) to (1) take steps to ensure the accuracy of 
national enrollment data reported in its annual nationwide survey of 
grantees, (2) develop a standard criterion for regional offices to use 
in identifying grantees whose underenrollment merits monitoring or 
corrective action, (3) develop an additional measure of aggregate 
services other than total enrollment that takes into consideration the 
different levels of service provided by full-day and part-day programs, 
and (4) work with regional offices to develop a more systematic process 
for them to collect reliable enrollment data during the program year so 
that they can address underenrollment more quickly.

HHS Comments:

The Department fully supports the recommendations. ACF will implement 
changes to the annual Program Information Report (PIR) data collection 
instrument to assure these data are accurate. ACF will also implement 
uniform criteria based upon the enrollment requirements of 45 C.F.R. 
Part 1305 that will be used in identifying and working with grantees 
with underenrollment problems. ACF will work on a method for assessing 
whether underenrollment varies for part-and full-day programs. ACF will 
develop a more systematic process for regional offices to collect 
reliable enrollment data during the program year.

[End of section]

Appendix V: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Betty Ward-Zukerman, (202) 512-2732, wardzukermanb@gao.gov Bryon 
Gordon, (202) 512-9207, gordonb@gao.gov:

Acknowledgments:

In addition to those named above, Daniel Jacobsen, Lesley Woodburn, 
Luann Moy, Barbara Johnson, James Rebbe, Susan Bernstein, and Amy Buck 
made key contributions to the report.

[End of section]

Related GAO Products:

Education and Care: Head Start Key Among Array of Early Childhood 
Programs, but National Research on Effectiveness Not Completed. GAO-03-
840T. Washington, D.C.: July 22, 2003.

Head Start and Even Start: Greater Collaboration Needed on Measures of 
Adult Education and Literacy. GAO-02-348. Washington, D.C.: March 29, 
2002.

Early Childhood Programs: The Use of Impact Evaluations to Assess 
Program Effects. GAO-01-542. Washington, D.C.: April 16, 2001.

Title I Preschool Education: More Children Served, but Gauging Effect 
on School Readiness Difficult. GAO/HEHS-00-171. Washington, D.C.: 
September 20, 2000.

Early Education and Care: Overlap Indicates Need to Assess Crosscutting 
Programs. GAO/HEHS-00-78. Washington, D.C.: April 28, 2000.

Early Childhood Programs: Characteristics Affect the Availability of 
School Readiness Information. GAO/HEHS-00-38. Washington, D.C.: 
February 28, 2000.

Education and Care: Early Childhood Programs and Services for Low-
Income Families. GAO/HEHS-00-11. Washington, D.C.: November 15, 1999.

Head Start: Challenges in Monitoring Program Quality and Demonstrating 
Results. GAO/HEHS-98-186. Washington, D.C.: June 30, 1998.

Head Start Programs: Participant Characteristics, Services, and 
Funding. GAO/HEHS-98-65. Washington, D.C.: March 31, 1998.

FOOTNOTES

[1] We did not survey the Migrant and Seasonal Program Branch due to 
the program's distinct seasonal operating schedule. We generally will 
refer to the 10 regions and 1 program branch we surveyed as "regional 
offices" or "regions" throughout the report. 

[2] Center-based programs are those where services are provided to 
children primarily in classroom settings.

[3] For 2003, the federal poverty line for a family of four was $18,400 
within the 48 contiguous states and the District of Columbia. In Alaska 
and Hawaii, the guidelines were $23,000 and $21,160, respectively. The 
poverty guidelines are updated periodically in the Federal Register, by 
the U.S. Department of Health and Human Services under the authority of 
42 U.S.C. 9902(2).

[4] Under TANF, the federal government provides grant funds to states, 
territories, and tribes for their programs to assist needy families 
with children. SSI pays monthly benefits to people who are age 65 or 
older or blind or have a disability and who do not own much or have 
much income. 

[5] Enrollment ratio is the ratio of actual enrollment to funded 
enrollment; therefore, a grantee with 100 funded enrollment slots and 
an actual enrollment of 95 has an enrollment ratio of 0.95, or 95 
percent.

[6] Other federal programs that support early childhood education for 
children under 5 years include Special Education Preschool grants under 
the Individuals with Disabilities Education Act, preschool programs 
under Title I, and Even Start. See Education and Care: Head Start Key 
Among Array of Early Childhood Programs, but National Research on 
Effectiveness Not Completed, GAO-03-840T (Washington D.C.: July 22, 
2003).

[7] CCDF child care funds can be used for families with children up to 
age 13. In 2000, we reported that an estimated 70 percent of CCDF funds 
and 7.5 percent of TANF funds were used for child care for children 
under age 5 in fiscal year 1999. See Early Education and Care: Overlap 
Indicates Need to Assess Crosscutting Programs. GAO/HEHS-00-78. 
Washington D.C.: April 28, 2000.

[8] See Blank, Helen, with Karen Schulman and Danielle Ewin. Seeds of 
Success, State Prekindergarten Initiatives, 1998-99. Children's 
Defense Fund, September 1999 as cited in Early Childhood Education: 
Federal Policy Issues, CRS, (Washington, D.C.: January 27, 2003). 

[9] While 100 percent of funded enrollment is required by Head Start 
regulations, as a practical matter underenrollment can occur as a 
result of programmatic fluctuations. Consequently, we asked the 
regional offices to identify the threshold, if any, they used for 
determining when a grantee's level of enrollment compared with its 
total funded enrollment was "unacceptable." We then asked regional 
officials to report back to us the grantees they were aware of that 
fell beneath this threshold. 

[10] A delegate agency means a public or private nonprofit organization 
or agency to which a Head Start grantee has delegated all or part of 
its responsibility for operating a Head Start program. For the 
remainder of the report, we will refer to grantees and delegate 
agencies as grantees only. 

[11] Currently, under the Single Audit Act any state or local 
government or nonprofit organization that spends $300,000 or more per 
year ($500,000 for fiscal years ending after December 31, 2003) in 
federal funds must have its financial statements, internal controls, 
and compliance with federal laws and regulations audited. 

[12] ACF Information Memorandums: IM-HS-01-13, 11/16/2001 and IM-HS-01-
06, 3/8/2001.

[13] ACF's primary performance indicator for the number of children 
served gives equal weight to part-day and full-day slots. 

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