Department of Health and Human Services—Application of Impoundment Control Act to Availability of Head Start Program Funds

Decision

Matter of: Department of Health and Human Services—Application of Impoundment Control Act to Availability of Head Start Program Funds

File: B-337202

Date: July 23, 2025

Congress appropriated amounts to the Department of Health and Human Services (HHS) for fiscal year (FY) 2025 to carry out the Head Start Act. Between January 20, 2025, and April 15, 2025, HHS significantly reduced the rate of disbursement of funds for Head Start grant programs, as compared to amounts disbursed in the same time period in FY 2024. Current publicly available information suggests that funds have since been made available for expenditure at rates consistent with those in FY 2024.

Unless Congress has enacted a law providing otherwise, executive branch officials must take care to ensure that they prudently obligate appropriations during their period of availability. The Impoundment Control Act of 1974 (ICA) allows the President to withhold funds from obligation, but only under strictly limited circumstances and only in a manner consistent with that Act. The ICA was enacted to ensure that legislation passed by Congress and signed by the President is faithfully executed.[1] Additionally, the Head Start Act requires the Secretary to prescribe procedures to assure that “financial assistance under this subchapter shall not be suspended, except in emergency situations, unless the recipient agency has been given reasonable notice and opportunity to show cause why such action should not be taken.”

GAO’s institutional role is to support the Congress, including in Congress’s exercise of its constitutional power of the purse. GAO’s role is procedural—to protect congressional prerogatives and help ensure compliance with the ICA and appropriations law—and is not to be interpreted as taking a position on the underlying policies. HHS has not provided the information we requested regarding factual information and its legal views concerning the potential impoundment of appropriated funds. Yet publicly available evidence, including data recorded by HHS on its Tracking Accountability in Government Grants System, indicates that between January 20, 2025, and April 15, 2025, HHS withheld from disbursement funds appropriated for Head Start. Based on this evidence, we conclude that HHS violated the ICA.

GAO is aware of ongoing litigation involving reported delays in Head Start recipients’ ability to access Head Start funds.[2] GAO will continue to monitor this and any other litigation related to the delay in the disbursement of Head Start funds. If a court makes relevant findings of fact relating to Head Start funds, we will update this decision as necessary.

Pursuant to our reporting responsibilities under the Impoundment Control Act of 1974 (ICA), we are issuing this decision.[3] Congress appropriated amounts to the Department of Health and Human Services (HHS) under the “Children and Families Services Programs” for the implementation of Head Start.[4] As explained below, we conclude that HHS withheld these funds from expenditure in violation of the ICA.[5] The Head Start Act requires the Secretary to prescribe procedures to assure that “financial assistance under this subchapter shall not be suspended, except in emergency situations, unless the recipient agency has been given reasonable notice and opportunity to show cause why such action should not be taken”. HHS’s actions here were inconsistent with this legal requirement.

In accordance with our regular practice, we contacted HHS to seek factual information and the agency’s legal views.[6] At present, HHS has not transmitted the requested information.

In the past, in addition to requesting the agency’s factual assertions and legal views, we have typically analyzed apportionment schedules and obligational data from an appropriation to determine whether there is any indication of an improper withholding.[7] However, the Office of Management and Budget has removed agency apportionment data from its public websites, which is both contrary to OMB’s duty to make such information publicly available and to GAO’s statutory authority to access such information.[8] HHS, moreover, did not provide apportionment schedules in response to GAO’s request.[9] Having access to such information aids in our review of ICA issues and our support of congressional oversight of programs.

Given the absence of information from HHS, we have based this letter upon publicly available evidence. Because that evidence indicates that HHS withheld appropriated funds from expenditure, and because the burden to justify such withholdings rests with HHS and the executive branch[10], we conclude that HHS violated the ICA by withholding funds from expenditure.

BACKGROUND

Head Start Program

Head Start is a grant program that aims to promote school readiness of low-income children by providing educational, nutritional, health, social, and other services.[11] HHS, through its Administration for Children & Families, administers Head Start through the Office of Head Start (OHS).[12] As of 2024, there were approximately 1,600 grant recipients across all 50 states, the District of Columbia, five territories, and Palau.[13] Grant recipients, known as Head Start agencies, can generally receive federal funds that cover up to 80 percent of the approved costs of an agency’s Head Start program.[14] OHS provides funding for each grant recipient to offer a specified number of enrollment slots to eligible children.[15]

Each year, Congress appropriates funds under its Children and Families Services Programs appropriation for programs authorized under the Head Start Act.[16] Pursuant to the Head Start Act, OHS allocates the large majority of Head Start and Early Head Start funding to existing Head Start grant recipients, according to a statutory formula.[17] For FY 2025, Congress appropriated $14,789,089,000 to the Children and Families Services Programs account, for carrying out, in part, the Head Start Act.[18]

Under Head Start’s “designation renewal system”, Head Start grant recipients that are deemed “to be delivering high-quality and comprehensive” Head Start programs retain their status as Head Start grant recipients for a five-year period.[19] The Head Start Act requires the HHS Secretary to monitor Head Start programs’ compliance with applicable performance standards.[20] OHS staff must conduct regular performance evaluations of Head Start programs, including a “full review” of each Head Start agency at least once every three years.[21] The Head Start Act provides the Secretary with the authority to terminate, suspend, or reduce funding to a Head Start agency in specific circumstances, such as an agency’s failure to meet performance standards[22], or when the Secretary determines that a reduction and redistribution of funds is warranted in cases of under-enrollment.[23]

If OHS determines that a Head Start agency fails to meet various performance standards, the Head Start Act sets out a detailed process for corrective action.[24] The Head Start Act requires the Secretary to prescribe procedures to assure that “financial assistance under this subchapter shall not be suspended, except in emergency situations, unless the recipient agency has been given reasonable notice and opportunity to show cause why such action should not be taken”.[25] Under the Head Start Act, Head Start agencies must be afforded an opportunity to have a full and fair hearing, and to apply for refunding, prior to financial assistance being terminated.[26] According to HHS, this review process “could take years to complete allowing for ample time to adjudicate [a] case before a grantee faces loss of awarded grant funds.”[27]

Recent Actions Regarding Head Start

On January 27, 2025, the then-acting Director of the Office of Management and Budget (OMB) issued a memorandum to all executive branch agency heads directing agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated” by several executive orders “to the extent permissible by applicable law.”[28] Since the memorandum’s issuance, Head Start recipients in over twenty states have reported delays in accessing funds.[29]

Specifically, on January 28, 2025, the National Head Start Association (NHSA) issued a press release stating that Head Start grant recipients were unable to “draw down any funds.”[30] On February 4, 2025, NHSA conducted a survey of Head Start grant recipients.[31] According to NHSA, the survey found that “at least 45 grant recipients[,] serving nearly 20,000 children ages zero to five and their families, are experiencing delays in accessing funds. This includes grant recipients in 23 states, D.C., and Puerto Rico.”[32] In a motion before the United States District Court for the District of Rhode Island, the plaintiffs, a group of several states, argued that as of February 5, 2025, Head Start programs in Michigan and Vermont were still unable to access federal funds.[33]

In a Complaint submitted to the United States District Court for the Western District of Washington, local Head Start agencies and family advocacy groups alleged that as of April 2025, local Head Start agencies had continued to experience delays accessing Head Start grant funds allocated to them.[34] Additionally, the Complaint alleges that on April 1, 2025, HHS closed half of its regional offices and laid off associated staff, leaving local Head Start agencies in 23 states “without necessary support.”[35]

Consistent with these court filings, data recorded by HHS on its Tracking Accountability in Government Grants System (TAGGS)[36] indicates that between January 20, 2025, and April 15, 2025, HHS had disbursed for Head Start grants roughly 65 percent of what it had disbursed for Head Start grants between January 20, 2024, and April 15, 2024.[37] Between January 20, 2024 and April 15, 2024, TAGGS data indicates that HHS disbursed $2,397,037,861 to Head Start grant recipients using FY 2024 funds.[38] In contrast, HHS reported through TAGGS that it disbursed $1,571,620,771 to Head Start grant recipients using its FY 2025 funds between January 20, 2025, and April 15, 2025.[39] In sum, the data shows that HHS disbursed over $825 million less to Head Start grant recipients between January 20, 2025, and April 15, 2025, than it had during the same time period in FY 2024.[40] TAGGS data indicates that HHS has since increased its disbursements of FY 2025 Head Start grant funding, and as of June 9, 2025, has disbursed amounts similar to those of FY 2024 during the same time period.[41]

DISCUSSION

At issue here is whether HHS complied with the requirements of the ICA. We conclude that HHS’s withholding of funds for Head Start constitutes a deferral, as defined by the ICA (““deferral of budget authority” includes withholding or delaying the obligation or expenditure of budget authority (whether by establishing reserves or otherwise) provided for projects or activities”).[42] As explained below, because the ICA’s fourth disclaimer does not permit the withholding from obligation or expenditure funds for programs for which there is a mandate to spend, HHS’s withholding of Head Start funds from expenditure violates the ICA.[43]

It is important to understand the constitutional and historical underpinnings of the ICA with respect to the critical role of Congress in exercising its constitutional powers. The Constitution specifically vests Congress with the power of the purse, providing that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”[44] The Constitution also gives Congress the exclusive power to legislate, and sets forth the procedures of bicameralism and presentment, through which the President may accept or veto a legislative bill passed by both houses of Congress, and Congress may subsequently override a presidential veto.[45] This process does not grant the President the authority to pass his own laws or to ignore or amend a law duly enacted by Congress.[46] Instead, the President must “faithfully execute” the law as Congress enacts it.[47]

Once enacted, an appropriation is a law like any other, and the President must implement it by ensuring that appropriated funds are obligated and expended prudently during their period of availability unless and until Congress enacts another law providing otherwise.[48] In fact, Congress was concerned about the failure to prudently obligate according to its congressional prerogatives when it enacted and later amended the ICA.[49]

The Constitution grants the President no unilateral authority to withhold funds from obligation.[50] Instead, Congress has vested the President with strictly circumscribed authority to impound, or withhold, budget authority only in limited circumstances as expressly provided in the ICA.[51] The ICA separates impoundments into two exclusive categories – deferrals and rescissions. First, the President may seek to temporarily withhold funds by proposing a “deferral.”[52] Second, the President may seek the permanent cancellation of funds for fiscal policy or other reasons, including the termination of programs for which Congress has provided budget authority, by proposing a “rescission.”[53]

In either case, the ICA requires the President to first transmit a special message to Congress outlining the amounts in question and the reasons for the proposed deferral or rescission.[54] These special messages must provide detailed and specific reasoning to justify the withholding, as set out in the ICA.[55] The burden to justify a withholding of budget authority rests with the executive branch.

While the ICA does not circumscribe when funds can be proposed for rescission, it only permits deferral of budget authority in a limited range of circumstances: to provide for contingencies; to achieve savings made possible by or through changes in requirements or greater efficiency of operations; or as specifically provided by law.[56] With respect to deferrals, the ICA specifies that the funds at issue are only temporarily withheld and must still be obligated before expiration.[57] The ICA’s fourth disclaimer further clarifies that the ICA’s deferral and rescission proposal mechanisms do not provide any process by which the President may withhold from obligation or expenditure funds that are “require[d]” by law to be spent; rather, such withholdings are categorically prohibited.[58]

GAO’s institutional role is to support the Congress, including in Congress’s exercise of its constitutional power of the purse. This includes GAO’s functions under the ICA, such as reviewing special messages[59] and reporting impoundments the President has not reported.[60]

Application of the ICA to HHS’s Administration of Head Start

In this case, the Administration has not sent a special message under the ICA related to Head Start. While HHS has not formally indicated that it intended to pause funds directed for Head Start grant recipients specifically[61], current publicly available evidence indicates that there was a delay in the expenditure of funds for Head Start programs.

As noted previously, TAGGS data indicates that between January 20, 2025, and April 15, 2025, HHS had disbursed for Head Start grants around 65 percent of what it had disbursed for Head Start grants between January 20, 2024, and April 15, 2024.[62] In addition, plaintiffs in numerous cases before federal district courts reported Head Start agencies’ inabilities to access Head Start grant funding.[63] While we accept that the rate of an agency’s obligations or disbursements of a given appropriation may vary from year to year, we expect that an agency’s obligations and expenditures, at any time throughout the fiscal year, will reflect a “reasonable attempt by the agency to carry out the purposes of the appropriation.”[64] Moreover, we would not expect substantial variations in disbursement rates in this case, where disbursements are directed by the Head Start Act. As such, we find that between January 20, 2025, and April 15, 2025, HHS withheld Head Start funds from disbursement.[65]

An impoundment occurs when an agency refuses to spend budget authority. By its plain terms, the ICA applies to both obligations and expenditures. However, we have said that not all delays in obligation or expenditure of budget authority constitute impoundments under the ICA. For example, when an agency is taking reasonable and necessary steps to implement a program or activity, but the obligation or expenditure of funds is unavoidably delayed, such action constitutes a programmatic delay and is not an impoundment, as defined by the ICA. The burden to justify a withholding rests with the agency; absent a sufficient justification, we will find that an impoundment has taken place. Here, HHS has not provided requested factual information nor its legal views on the matter. As such, HHS has not provided an adequate justification, and we cannot find that a programmatic delay has occurred.

Importantly, Head Start is a formula grant program and expenditure of funds is directed by the Head Start Act.[66] And, the only flexibilities provided to the Secretary to withhold or delay the expenditure of Head Start grant funds are those afforded through the Head Start Act. In particular, the Secretary may terminate, suspend, or reduce funding to a Head Start agency in specific circumstances, such as an agency’s failure to meet performance standards[67], or when the Secretary determines that a reduction and redistribution of funds is warranted in cases of under enrollment.[68] We are not aware of attempts by the Secretary to avail himself of these flexibilities. Therefore, HHS’s actions to delay the expenditure of funds for Head Start between January 20, 2025, and April 15, 2025, constitute an impermissible impoundment.

Application of the Fourth Disclaimer to Head Start

While the ICA only permits deferrals in a limited range of circumstances, we need not determine whether this delay fits within any of those circumstances. This is because under the ICA, a section referred to as the fourth disclaimer expressly precludes withholding from obligation or expenditure funds for programs for which there is a “provision of law which requires the obligation of budget authority or the making of outlays thereunder.”[69] Our case law has interpreted formula grant programs as falling under the fourth disclaimer. Head Start is one such program. Therefore, Head Start funds cannot be deferred under the ICA.

For example, in B-205053, Feb. 5, 1982, we held that OMB could not use the ICA to withhold funds appropriated for a formula grant program authorized by the Library Services and Construction Act (LSCA) because such action was prohibited by the ICA’s fourth disclaimer. [70]

We reached this conclusion in our prior decisions by analyzing the framework of the underlying statute, looking at the formula by which funds are to be allocated, and the requirements prescribed regarding the agency discretion in withdrawing or withholding funds, and the language mandating the allocation of funds to states or territories.[71] These factors, taken together, constitute a mandatory statutory scheme.[72]

Similarly, Head Start is governed by the Head Start Act, which prescribes a formula by which funds are to be allocated and uses language mandating the allocation of funds to states.[73] The Head Start Act dictates that “financial assistance . . . shall not be suspended, except in emergency situations, unless the recipient agency has been given reasonable notice and opportunity to show cause why such action should not be taken.”[74] In addition, under the Head Start Act, Head Start agencies are afforded an opportunity to have a full and fair hearing, and to apply for refunding, prior to financial assistance being terminated.[75] Based on these factors, we conclude that the Head Start Act constitutes a mandate to spend funds appropriated for Head Start. Because we conclude that the Head Start Act constitutes a mandate to provide amounts appropriated for Head Start to Head Start grant recipients, the amounts currently available for the program are subject to the ICA’s fourth disclaimer and may not be withheld from expenditure under the ICA.

CONCLUSION

GAO’s institutional role is to support Congress, including in Congress’s exercise of its constitutional power of the purse. This includes GAO’s responsibilities under the ICA, such as reviewing special messages and informing Congress of impoundments that the President has not reported. Our analysis and conclusions regarding Head Start help ensure compliance with the ICA and appropriations law. GAO does not take a position on the policy goals of HHS, and this decision is not to be interpreted as taking a position on the underlying policies entailed. Changes to Head Start can be addressed through the legislative process with Congress and the Administration.

Current publicly available information indicates that between January 20, 2025, and April 15, 2025, HHS withheld from disbursement funds that Congress had appropriated for Head Start.[76] HHS violated the ICA when it withheld appropriated funds that were not eligible for ICA-based withholdings due to the ICA’s fourth disclaimer. The burden to justify withholdings rests with the executive branch. If the Administration wishes to make changes to the appropriation provided for Head Start, it must propose legislation for consideration by Congress.

Edda Emmanuelli Perez
General Counsel

 

---