Head Start
Undercover Testing Finds Fraud and Abuse at Selected Head Start Centers Gao ID: GAO-10-733T May 18, 2010The Head Start program, overseen by the Department of Health and Human Services and administered by the Office of Head Start, provides child development services primarily to low-income families and their children. Federal law allows up to 10 percent of enrolled families to have incomes above 130 percent of the poverty line--GAO refers to them as "over-income." Families with incomes below 130 percent of the poverty line, or who meet certain other criteria, are referred to as "under-income". Nearly 1 million children a year participate in Head Start, and the American Recovery and Reinvestment Act provided an additional $2.1 billion in funding. GAO received hotline tips alleging fraud and abuse by grantees. In response, GAO investigated the validity of the allegations, conducted undercover tests to determine if other centers were committing fraud, and documented instances where potentially eligible children were put on Head Start wait lists. The investigation of allegations is ongoing. To perform this work, GAO interviewed grantees and a number of informants and reviewed documentation. GAO used fictitious identities and bogus documents for proactive testing of Head Start centers. GAO also interviewed families on wait lists. Results of undercover tests and family interviews cannot be projected to the entire Head Start program. In a corrective action briefing, agency officials agreed to address identified weaknesses.
GAO received allegations of fraud and abuse involving two Head Start nonprofit grantees in the Midwest and Texas. Allegations include manipulating recorded income to make over-income applicants appear under-income, encouraging families to report that they were homeless when they were not, enrolling more than 10 percent of over-income children, and counting children as enrolled in more than one center at a time. GAO confirmed that one grantee operated several centers with more than 10 percent over-income students, and the other grantee manipulated enrollment data to over-report the number of children enrolled. GAO is still investigating the other allegations reported. Realizing that these fraud schemes could be perpetrated at other Head Start programs, GAO attempted to register fictitious children as part of 15 undercover test scenarios at centers in six states and the District of Columbia. In 8 instances staff at these centers fraudulently misrepresented information, including disregarding part of the families' income to register over-income children into under-income slots. The undercover tests revealed that 7 Head Start employees lied about applicants' employment status or misrepresented their earnings. This leaves Head Start at risk that over-income children may be enrolled while legitimate under-income children are put on wait lists. At no point during our registrations was information submitted by GAO's fictitious parents verified, leaving the program at risk that dishonest persons could falsify earnings statements and other documents in order to qualify. In 7 instances centers did not manipulate information. To see selected video clips of GAO enrollments, see http://www.gao.gov/products/gao-10-733T. In addition, GAO found that most of the 550 Head Start centers contacted had wait lists. GAO also found that 2 centers where it enrolled fictitious children later became full and developed wait lists after the fictitious children had been withdrawn. Only 44 centers reported that they had openings. GAO interviewed families on wait lists from other centers and found that many stated that their incomes were at or below the federal poverty level. In some cases, families stated they had experienced some type of domestic violence, or were receiving some type of public assistance, a group automatically eligible for Head Start. GAO did not attempt to verify family statements.
GAO-10-733T, Head Start: Undercover Testing Finds Fraud and Abuse at Selected Head Start Centers
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Testimony:
Before the Committee on Education and Labor, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery:
Expected at 1:30 p.m. EDT:
Tuesday, May 18, 2010:
Head Start:
Undercover Testing Finds Fraud and Abuse at Selected Head Start Centers:
Statement of Gregory D. Kutz, Managing Director:
Forensic Audits and Special Investigations:
GAO-10-733T:
GAO Highlights:
Highlights of GAO-10-733T, a testimony before the Committee on
Education and Labor, House of Representatives.
Why GAO Did This Study:
The Head Start program, overseen by the Department of Health and Human
Services and administered by the Office of Head Start, provides child
development services primarily to low-income families and their
children. Federal law allows up to 10 percent of enrolled families to
have incomes above 130 percent of the poverty line”GAO refers to them
as ’over-income.“ Families with incomes below 130 percent of the
poverty line, or who meet certain other criteria, are referred to as ’
under-income“. Nearly 1 million children a year participate in Head
Start, and the American Recovery and Reinvestment Act provided an
additional $2.1 billion in funding.
GAO received hotline tips alleging fraud and abuse by grantees. In
response, GAO investigated the validity of the allegations, conducted
undercover tests to determine if other centers were committing fraud,
and documented instances where potentially eligible children were put
on Head Start wait lists. The investigation of allegations is ongoing.
To perform this work, GAO interviewed grantees and a number of
informants and reviewed documentation. GAO used fictitious identities
and bogus documents for proactive testing of Head Start centers. GAO
also interviewed families on wait lists. Results of undercover tests
and family interviews cannot be projected to the entire Head Start
program. In a corrective action briefing, agency officials agreed to
address identified weaknesses.
What GAO Found:
GAO received allegations of fraud and abuse involving two Head Start
nonprofit grantees in the Midwest and Texas. Allegations include
manipulating recorded income to make over-income applicants appear
under-income, encouraging families to report that they were homeless
when they were not, enrolling more than 10 percent of over-income
children, and counting children as enrolled in more than one center at
a time. GAO confirmed that one grantee operated several centers with
more than 10 percent over-income students, and the other grantee
manipulated enrollment data to over-report the number of children
enrolled. GAO is still investigating the other allegations reported.
Realizing that these fraud schemes could be perpetrated at other Head
Start programs, GAO attempted to register fictitious children as part
of 15 undercover test scenarios at centers in six states and the
District of Columbia. In 8 instances staff at these centers
fraudulently misrepresented information, including disregarding part
of the families‘ income to register over-income children into under-
income slots. The undercover tests revealed that 7 Head Start
employees lied about applicants‘ employment status or misrepresented
their earnings. This leaves Head Start at risk that over-income
children may be enrolled while legitimate under-income children are
put on wait lists. At no point during our registrations was
information submitted by GAO‘s fictitious parents verified, leaving
the program at risk that dishonest persons could falsify earnings
statements and other documents in order to qualify. In 7 instances
centers did not manipulate information. The table provides details on
two of GAO‘s successful enrollments. To see selected video clips of
GAO enrollments, see [hyperlink, http://www.gao.gov/products/gao-10-
733T/].
Table: Fictitious Over-Income Children Successfully Enrolled in Head
Start Centers by GAO:
State: New Jersey;
Test: Income exceeds poverty guidelines;
Case details:
* A Head Start associate disregarded over $23,000 worth of income in
order to qualify the family as under-income.
* The Head Start associate said with regard to the father‘s income
documentation, ’Now you see it, now you don‘t.“
State: Texas;
Test: Income exceeds poverty guidelines;
Case details:
* A Head Start associate disregarded over $20,000 worth of income in
order to qualify the family as under-income.
* With respect to the income documentation, the associate stated ’we
see this, but we don‘t see this,“ explaining that if both parents‘
incomes were counted the family would be over-income and on a wait
list.
Source: GAO.
[End of table]
In addition, GAO found that most of the 550 Head Start centers
contacted had wait lists. GAO also found that 2 centers where it
enrolled fictitious children later became full and developed wait
lists after the fictitious children had been withdrawn. Only 44
centers reported that they had openings. GAO interviewed families on
wait lists from other centers and found that many stated that their
incomes were at or below the federal poverty level. In some cases,
families stated they had experienced some type of domestic violence,
or were receiving some type of public assistance, a group
automatically eligible for Head Start. GAO did not attempt to verify
family statements.
View [hyperlink, http://www.gao.gov/products/GAO-10-733T] or key
components. For more information, contact Gregory Kutz at (202) 512-
6722 or kutzg@gao.gov.
[End of section]
Mr. Chairman and Members of the Committee:
Thank you for the opportunity to discuss our ongoing investigation
into fraud and abuse at selected Head Start locations. The Head Start
program, overseen by the Department of Health and Human Services'
(HHS) Administration for Children and Families, and administered by
the Office of Head Start (OHS), is one of the largest federal early
childhood programs. It gives grants to local organizations to provide
preschool education and other services to low-income children and
their families. In fiscal year 2010, the Congress appropriated $7.2
billion to serve approximately 900,000 children through approximately
1,600 Head Start grantees nationwide.[Footnote 1] The American
Recovery and Reinvestment Act of 2009 (Recovery Act) provided an
additional $2.1 billion in funding for Head Start and Early Head
Start. According to OHS, Recovery Act funds are to be used for staff
training, facilities upgrades, and cost-of-living increases and are
intended to allow certain programs to serve an additional 59,000
children and their families.
In August 2008, we received allegations through GAO's FraudNet hotline
that a Midwest nonprofit Head Start center manipulated information so
over-income or otherwise ineligible families would appear to qualify
for the program and the grantee would meet enrollment numbers required
as a condition of receiving Head Start funds. In October 2009, we
received additional allegations that a Texas nonprofit Head Start
center was also enrolling over-income or otherwise ineligible children
in the program in order to meet funded enrollment numbers. Based on
the significance of these claims, we (1) investigated the allegations
of fraud and abuse at these two Head Start grantees, (2) conducted
undercover tests to determine if other grantees were committing
similar abuses, and (3) documented instances in which potentially
eligible children were put on wait lists for Head Start services at
other centers.[Footnote 2]
To investigate the allegations of fraud and abuse we received through
our FraudNet hotline, we interviewed informants and the two Head Start
grantees in the Midwest and Texas. We reviewed grant documentation and
enrollment information reported to OHS by grantees. Our investigation
of allegations related to these two cases is ongoing. We plan to issue
a final report once the investigation is complete.
To conduct undercover testing, we created fictitious identities and
bogus documents, including pay stubs and birth certificates, in order
to attempt to register over-income or otherwise potentially ineligible
families and their children at 13 Head Start centers located in
California, Maryland, New Jersey, Pennsylvania, Texas, Wisconsin and
the Washington, D.C. metropolitan area. We also attempted to register
two eligible families and their children to determine if centers would
count these children toward reported enrollment numbers. We chose
these centers for two reasons: they indicated that they had openings
for new enrollees; and they were located either in states with a
significant proportion of Head Start funding, the same geographic area
as a GAO office, or in the same geographic area as the two programs
accused of committing fraud. We created 15 fictitious scenarios and
used fabricated documentation during our in-person applications.
Scenarios were designed to determine if other Head Start centers were
engaging in actions similar to those that were the basis of the
allegations we received about centers in the Midwest and Texas. We
used publicly available hardware, software, and materials to fabricate
our supporting documentation. In situations in which our fictitious
parents were told to bring our fictitious child to class, we monitored
centers by making follow-up phone calls, to determine if centers still
had openings in order to ensure that we were not occupying a space
that could be used by an actual, eligible child. Subsequent to our
applications, we requested, as GAO, that the centers provide us all
information regarding the submitted applications and information as to
whether these fictitious children ever were counted on center
attendance records.
In order to document situations of families waiting to enroll in Head
Start, we identified centers with wait lists through calls we made to
approximately 550 centers and contacted families on these wait lists.
We asked applicants for information on the length of time they spent
on a wait list, the family's economic situation, and whether they had
been affected by being waitlisted for Head Start services. We did not
attempt to verify the accuracy of the information that families
provided to us. We cannot project the results of our investigation of
allegations, undercover tests, and family interviews to the entire
Head Start program. We conducted our investigation from October 2008
through April 2010 in accordance with the standards prescribed by the
Council of the Inspectors General on Integrity and Efficiency.
Background:
The Head Start program was established in 1965 to deliver
comprehensive educational, social, health, nutritional, and
psychological services to low-income families and their children who
are below the age of compulsory school attendance. These services
include preschool education, family support, health screenings, and
dental care. Head Start was originally aimed at 3-to 5-year-olds. A
companion program, called Early Head Start, began in 1994, and focuses
on making these services available to pregnant women and children from
birth to 3 years of age. Head Start operates both full-and part-day
programs--most only during the school year. The Migrant and Seasonal
Head Start program is designed to meet the specific needs of migrant
and seasonal farm worker families. OHS makes Head Start grants
directly to approximately 1,600 local organizations, including
community action agencies, school systems, tribal governments and
associations, and for-profit and nonprofit organizations. To
accomplish Head Start's goals, the Congress provided $7.2 billion in
federal funds for fiscal year 2010, as well as $2.1 billion in
Recovery Act funds.
Head Start statutes and regulations establish several primary
eligibility criteria, one of which a child must generally meet in
order to enroll in the program. These primary criteria include: the
child's family earns income below the federal poverty level; the
child's family is eligible or, in the absence of child care, would
potentially be eligible for, public assistance; the child is in foster
care; or the child is homeless. However, Head Start programs may also
fill up to 10 percent of their slots with children from families who
do not meet any of the above criteria, but who "would benefit" from
participation in the program.[Footnote 3] We refer to these children
and their families as "over-income." There is no cap on the income
level for the over-income families. If the Head Start program has
implemented policies and procedures that ensure the program is meeting
the needs of children eligible under the primary criteria and
prioritizes their enrollment in the program, then the program may also
fill up to 35 percent of their slots with children from families with
income between the federal poverty line and 130 percent of the poverty
line. Programs filling slots under this provision are subject to
additional reporting requirements. Children from families with incomes
below 130 percent of the poverty line, and children that qualify under
one of the primary eligibility criteria, are referred to as "under-
income" for the purposes of this testimony. In addition, unless a
program applies for and receives a waiver, at least 10 percent of each
program's total slots must be filled with children with disabilities
who are determined to be eligible for special education and related
services or early intervention services. To qualify for the Migrant
and Seasonal Head Start program, families must have changed their
residence within the preceding 24 months for the purpose of engaging
in certain agricultural work, and the families' incomes must come
primarily from this type of work. In enrolling families in Head Start,
program staff are to review documentation of income and employment to
certify that each family is eligible. Head Start services are to be
provided free of charge to eligible families.
OHS assigns each grantee a specific number of children and families it
is required to serve, known as the funded enrollment. Head Start
statutes and regulations require grantees to maintain enrollment at
100 percent of the funded enrollment level. If a child stops attending
the program, after the grantee has attempted, unsuccessfully, to get
the child back in regular attendance, the grantee must reopen that
spot as a vacancy and no more than 30 calendar days may elapse before
the grantee fills the vacancy; otherwise, OHS considers the grantee
underenrolled.[Footnote 4] To facilitate the prompt filling of
vacancies, Head Start statutes and regulations require each grantee to
maintain a wait list that ranks children according to its selection
criteria and to select those with the greatest need for services.
Grantees report enrollment numbers monthly, and those that are
underenrolled for 4 consecutive months must receive technical
assistance from OHS and work to develop and implement a plan to
eliminate underenrollment. A grantee that continues to operate with
less than 97 percent of its funded enrollment level may have its grant
amount recaptured, withheld, or reduced by OHS. According to HHS,
funds for 30 grantees were reduced in 2006. A Head Start grantee may
also be terminated from participation in the program for continuously
failing to meet other performance, education, administrative, and
financial management standards that have been established by HHS.
Allegations of Fraud and Abuse Involving Two Head Start Grantees:
We are currently investigating the two allegations of fraud and abuse
that we received involving Head Start nonprofit grantees in the
Midwest and Texas. In Texas, individuals we spoke with told us that
the grantee encouraged enrollment of over-income families in order to
meet enrollment requirements. We were able to confirm, through records
obtained from the grantee, that 9 of the grantees' 28 centers had more
than 10 percent over-income families enrolled. The percentage of over-
income families in the 28 centers ranged from centers with no over-
income enrollments to one center where 44 percent of the families it
enrolled were over-income. Two families enrolled by this grantee had a
reported income in excess of $110,000. However, the grantee as a whole
did not report having more than 10 percent over-income families
enrolled. An aggregate accounting of all centers operated directly by
one grantee is permitted under the law for determination of the 10
percent over-income limit, therefore, we could not substantiate this
allegation. Individuals we spoke with also told us that Head Start
staff encouraged parents to report that they were homeless when they
were not in order to qualify them for the program. Records we obtained
indicate that 22 percent of all children enrolled by the grantee were
classified as "homeless"--a group considered at-risk and categorically
eligible for Head Start services regardless of income. Our concern,
based on the allegation, is that some portion of these families
classified as homeless in grantee records were actually over-income
families that were not, in fact, homeless, but were encouraged to
report that they were in order to qualify. In addition, we spoke with
several individuals who described a number of fraudulent activities
that they had witnessed. We are in the process of attempting to
determine if other allegations are true, including:
* classifying children as disabled when they were not,
* counting children in enrollment figures after they had left the
program, and:
* allowing staff to use company vehicles for personal use.
For the Midwest Migrant and Seasonal Head Start program, we were able
to confirm through documents obtained from the grantee that more than
50 children were moved from one center to other centers with vacancies
during the last 60 days of the grant period. According to OHS
regulations, if fewer than 60 days remain in the grantee's program
year at the time a child leaves the program, the grantee can choose
not to fill the vacancy without OHS considering the grantee
underenrolled. By using this process, the grantee was able to make
records appear that both centers had reached full enrollment, when in
fact 63 children were counted at more than one center. In addition, we
spoke with several individuals who alleged that numerous fraudulent
activities were occurring at the program. We are in the process of
attempting to determine if other allegations are true, including:
* manipulating family income documentation to make over-income
families appear to meet Head Start poverty guidelines,
* enrolling families who do not meet the specific program requirements
for the Migrant Head Start program, including earning at least 51
percent of the household income through agricultural work and
migrating for work within the past 24 months, and:
* misappropriation of property purchased with Head Start funds.
It is important to note that ultimate determination as to whether
these allegations are true is a significant challenge because of the
minimal requirement for records requested of families to be maintained
by grantees. For example, there is no requirement for grantees to
maintain support for income, such as pay stubs and Internal Revenue
Service Form W-2. In addition, as the proactive testing in the next
section discusses, and as alleged, it is possible the grantee records
have been fraudulently altered including showing that children who are
actually from over-income families are under-income.
Undercover Tests Show the Head Start Program Is Vulnerable to Fraud
and Abuse:
Our undercover tests determined that the types of eligibility and
enrollment fraud schemes allegedly perpetrated by the two grantees are
occurring at other Head Start locations around the country. Posing as
fictitious families, we attempted to register children at Head Start
centers in California, Maryland, New Jersey, Pennsylvania, Texas,
Wisconsin, and the Washington, D.C. metropolitan area. For 13 of these
tests our fictitious families were over-income or had disqualifying
characteristics. For 2 additional tests, our fictitious families did
not have any disqualifying characteristics and were under-income.
These 2 tests were designed to determine whether a Head Start center
would count our fictitious children toward enrollment numbers even if
our children never attended the program. For our tests, we contacted
each center in advance and were instructed in all cases to bring
certain documents necessary for enrollment, which included income
documentation.
In 8 out of 13 eligibility tests, our families were told they were
eligible for the program and instructed to attend class. In all 8 of
these cases, Head Start employees actively encouraged our fictitious
families to misrepresent their eligibility for the program. In at
least 4 cases, documents we later retrieved from these centers show
that our applications were doctored to exclude income information for
which we provided documentation, which would have shown the family to
be over-income. Employees at seven centers knowingly disregarded part
of our families' income to help make over-income families and their
children appear to actually be under-income. This would have had the
effect of filling slots reserved for under-income children with over-
income children. At two centers, staff indicated on application forms
that one parent was unemployed, even though we provided documentation
of the parents' income. A Head Start employee at one center even
assured us that no one would verify that the income information
submitted was accurate. For the 2 tests in which our family did not
have disqualifying characteristics, we were accepted into the program
once and not accepted in the other. In the test where our eligible
child was accepted into the program, the scenario was designed to test
how long the center would keep a child who never attended the program
on enrollment records before counting the spot as a vacancy and
attempting to fill it with another child. Due to our concerns about
occupying a slot for an actual child, we were forced to contact the
center and voluntarily withdraw our fictitious child before sufficient
time elapsed that would have allowed us to make a determination
regarding how long the center would have kept our child on enrollment
records. However, the enrollment of our family that appeared eligible
for the program as well as our other successful tests highlight the
ease with which unscrupulous parents could fabricate documentation
designed to make it appear as though their children were under-income
or otherwise eligible for the program. Our fictitious pay stubs and W-
2s were made using information found on the Internet, commercially
available word processing software, and a printer. At no point during
our registrations was any of the information contained in fictitious
documentation submitted by our parents verified, which indicates that
the program is vulnerable to beneficiary fraud in addition to grantee
fraud. For all 9 cases in which we were told that we were eligible for
the program, we are taking steps to determine whether our fictitious
children were counted on enrollment or attendance records.
Table 1 provides details on our approved applications, followed by our
unsuccessful applications. We withdrew our fictitious families from
the programs as soon as we documented that there were fewer than two
openings at a center. To view selected video clips of these undercover
enrollments, go to [hyperlink,
http://www.gao.gov/products/gao-10-733T/].
Table 1: Head Start Enrollment Scenarios:
Information manipulated:
Case: 1;
State: California;
Undercover scenario: Outside of service area;
Undercover scenario:
* A Head Start associate encouraged parent to provide falsified
information about the family's address in order to make the family
eligible for services by the center.
Case: 2;
State: New Jersey;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* A Head Start associate disregarded over $23,000 worth of income in
order to qualify the family of three (mother, father, and child) as
under-income;
* The Head Start associate said with regard to the father's income
documents, "Now you see it, now you don't" after handing back one of
two pay stubs provided;
* The Head Start associate explained that there were over 30 vacancies
at the center.
Case: 3;
State: Pennsylvania;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* A Head Start associate disregarded over $23,000 worth of income in
order to qualify the family of three (mother, father, and child) as
under-income;
* In addition, we told the Head Start associate that the mother also
received some cash income from a part-time job. The associate replied
"that's your business."
Case: 4;
State: Texas;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* A Head Start associate disregarded over $20,000 worth of income in
order to qualify the family of three (mother, father, and child) as
under-income;
* With respect to the disregarded income, the associate stated "we see
this, but we don't see this," explaining that if both parents' incomes
were counted the family would be on a long wait list for over-income
families;
* Our bogus applicant was assured that the government would never come
back to verify the income.
Case: 5;
State: Texas;
Undercover scenario: Income exceeded poverty and agricultural
guidelines;
Undercover scenario:
* A Head Start associate disregarded $11,700 in nonagricultural work
in order to qualify the family of three (mother, father, and child)
for migrant Head Start services. A requirement of migrant Head Start
programs is that the families income must be derived primarily from
certain agricultural work;
* Including the disregarded salary would have also put the family over
130 percent of the poverty guideline.
Case: 6;
State: Wisconsin;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* A Head Start associate disregarded over $23,000 worth of income in
order to qualify the family of three (legal guardians grandmother, and
grandfather, and child) as under-income;
* The Head Start associate said that she chose to report only the
grandmother's income because it was lower than the grandfather's
income.
Case: 7;
State: Wisconsin;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* A Head Start associate disregarded over $23,000 worth of income in
order to qualify the family of three (legal guardians grandmother, and
grandfather, and child) as under-income;
* The Head Start associate said that she chose to count only one
guardian's income so the family would qualify.
Case: 8;
State: Washington, D.C.;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* A Head Start associate disregarded $9,600 worth of cash income in
order to enroll the family of three (mother, father, and child) as
under-income. After we reported the family's cash income, the Head
Start associate stated "We don't need any extra; we need to keep you
low";
* The Head Start associate explained that if nine more children were
not enrolled by the end of the week, she might have to make staff cuts.
Not approved or No Evidence of Manipulation:
Case: 9;
State: Washington, D.C.;
Undercover scenario: None-fictitious children were eligible;
Undercover scenario:
* The fictitious family of three (father, and two children) met
program and income requirements and was approved with bogus documents.
The test was also designed to see whether the Head Start center would
count our fictitious children who never attended the program toward
enrollment figures;
* The Head Start center left the fictitious children on the enrollment
records for a month;
* We voluntarily withdrew our fictitious children from the center due
to concerns about occupying a slot for an actual child. Because of
this withdrawal, we were unable to determine how long the center would
have kept our children on enrollment records.
Case: 10;
State: California;
Undercover scenario: None-fictitious children were eligible;
Undercover scenario:
* The fictitious family of three (mother, father, and child) met
program and income requirements. The test was designed to see whether
the Head Start center would count our fictitious children toward
enrollment figures;
* The application was accepted by in-take staff at Head Start center,
but the main program office never called the family to complete
enrollment procedures.
Case: 11;
State: California;
Undercover scenario: Income exceeded poverty guidelines and outside
service area;
Undercover scenario:
* The income for the family of three (mother, father, and child) was
$50,000--more than double what poverty guidelines allow;
* A Head Start associate denied our application because our address
showed we lived outside the center's service area.
Case: 12;
State: California;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* The income for the family of three (mother, father, and child) was
$12,000 more than allowed for the family to be considered income-
eligible;
* A Head Start associate denied this application because the family
was over-income;
* The Head Start associate explained that families often lie about
being separated or divorced in order to reduce their income and that
Head Start is not strict about checking whether that is true.
Case: 13;
State: Maryland;
Undercover scenario: Child already enrolled in another Head Start
center;
Undercover scenario:
* The fictitious single mother of one stated that she wanted to enroll
the child in this Head Start center certain days of the week and
another nearby center on other days of the week--a violation of the
program's requirement that children be continuously enrolled;
* The Head Start associate denied the application because we claimed
that the child was already enrolled in another Head Start center.
Case: 14;
State: Texas;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* The income for the family of two (mother and child) was $2,000 more
than allowed for the family to be considered income-eligible;
* We submitted initial paperwork, but were told that our application
could not be processed further because we did not provide a full 12
months of pay stubs.
Case: 15;
State: Washington, D.C. metropolitan area;
Undercover scenario: Income exceeded poverty guidelines;
Undercover scenario:
* The income for the family of three (mother, father, and child) was
$75,000--more than triple what poverty guidelines allow;
* We submitted a prescreening application indicating that the family
was over-income and were never contacted by Head Start employees to
continue the enrollment process.
Source: GAO:
[End of table]
We also identified a key vulnerability during our investigation that
could allow over-income children to be enrolled in other Head Start
centers: income documentation for enrollees is not required to be
maintained by grantees. According to HHS guidance, Head Start center
employees must sign a statement attesting that the applicant child is
eligible and identifying which income documents they examined, such as
W-2s or pay stubs; however, they do not have to maintain copies of
them. We discovered that the lack of documentation made it virtually
impossible to determine whether only under-income children were
enrolled in spots reserved for under-income children.
Eligible Children May Not Receive Head Start Services Because of
Significant Wait Lists:
We are concerned that eligible children at other centers do not
receive services for which they are in need, given the vulnerabilities
to fraud and abuse we found through our undercover tests. At 2 of the
9 centers where we enrolled fictitious children, we were later told,
after withdrawing our children from the program, that the center was
at full enrollment and was not accepting more children at that time.
During the course of our work, we contacted approximately 550 Head
Start centers to determine whether they had space for our fictitious
children. We found that the majority of the centers stated that they
had no open slots for enrollment, but maintained wait lists per
program requirements. We found only 44 centers stated they had any
openings. We interviewed 21 families on wait lists and found that the
majority stated their income was at or below the federal poverty
level. In some cases, families had experienced some type of domestic
violence or were receiving some other type of public assistance, a
group targeted specifically for assistance by Head Start program
guidelines. We did not attempt to verify this information.
Head Start Center Wait Lists Were Substantial:
The length of these wait lists varied considerably; however, several
of the centers we contacted had lengthy wait lists. For example, one
grantee we contacted in Texas, which serves approximately 4,260
children in 36 centers, had over 1,150 children on its wait list.
Another Head Start grantee told us that they average around 500
children on their wait list. A representative from one Pennsylvania
Head Start center we contacted stated that there were around 120
applicants on the center's wait list. Furthermore, a review of media
sources reveals that Head Start centers around the country face
similar challenges meeting their communities' demand for services. We
queried a news media search engine and found numerous reports of
lengthy waiting lists to enroll in Head Start programs in many parts
of the country. For example, according to one Florida newspaper, the
state of Florida has 8,000 students on wait lists for Head Start
programs. Another newspaper in Indiana, reported that a program in
Indiana that serves 380 students has 170 students on the wait list. It
is important to note that we found a discrepancy in enrollment levels
among the centers we called. While several grantees had lengthy wait
lists, other grantees were eager to accept our fictitious, over-income
children to fill their rolls. The center in New Jersey that accepted
our fictitious over-income family told us that it had more than 30
openings. Another center in California, which did not accept our
application, told us that it had 40 part-day openings.
Eligible Applicants Cannot Be Admitted Because of Lack of Space:
We contacted 21 families who at the time of interview were on wait
lists for Head Start programs. We received a list of 1,600 wait list
applicants from a Head Start grantee in Texas--of these we were able
to speak to 11 applicants. We also received a wait list of 30
applicants for services in Pennsylvania--of these we were able to
speak to 10 applicants. We asked applicants for information on the
length of time they spent on the wait list, on the family's economic
situation, and whether they had been affected by being waitlisted for
Head Start services. Several of the applicants we spoke with described
circumstances that made them especially strong candidates for Head
Start, including receiving other types of public assistance, such as
Medicaid or Supplemental Nutrition Assistance, or having histories of
domestic abuse. Additionally, several applicants reported that family
members were unable to accept work opportunities as a result of not
enrolling in Head Start, or experienced additional financial strain
because they had to pay child care costs. Many applicants also cited
concerns that their children would not be adequately prepared for
school. Given the fraud committed by several grantees we investigated,
and the relative ease with which GAO employees posing as fictitious
parents were able to qualify for Head Start services, it is likely
that some over-income or otherwise ineligible children are currently
enrolled in Head Start programs while low-income children are put on
wait lists and do not receive necessary services. For example, when a
center manipulates information to make it appear that an over-income
family is a low-income family this takes up a Head Start slot set
aside for a low-income family. Table 2 summarizes the experiences of
10 applicants we contacted. We did not attempt to verify the
applicants' statements.
Table 2: Summary of Selected Head Start Wait List Families:
Case: 1;
State: Pennsylvania;
Months wait-listed: 4 months;
Case details[A]:
* The mother, a single parent of three children, is unemployed;
* The family has experienced domestic violence and is in an abuse
protection program;
* The family is enrolled in several public assistance programs,
including receiving Supplemental Nutrition Assistance Program (SNAP)
benefits;
* The mother stated that enrolling the child in Head Start would allow
her to look for work and help her child prepare for kindergarten.
Case: 2;
State: Pennsylvania;
Months wait-listed: 6 months;
Case details[A]:
* The mother, a single parent of three children, earns $150 to $200
per week--less than half of what poverty guidelines allow;
* The family is enrolled in several public assistance programs,
including Medicaid and SNAP benefits;
* The mother was told that her son was waitlisted because of a lack of
government funding;
* The child's grandmother cannot work because she must care for the
child.
Case: 3;
State: Pennsylvania;
Months wait-listed: 1 month;
Case details[A]:
* The mother, a single parent of three children, is unemployed;
* The mother has experienced domestic violence and the family receives
SNAP benefits;
* The mother received a letter from the Head Start center stating that
her child was eligible, but had been put on the wait list because the
center had no openings for funding reasons;
* The mother cannot work because she is taking care of her child.
Case: 4;
State: Texas;
Months wait-listed: 2 months;
Case details[A]:
* The mother, a single parent caring for two children, earns $1,025
per month--$6,000 a year below the poverty level;
* The mother works nights, and sleeps only a few hours a day as a
result of not having child care for her son during the day.
Case: 5;
State: Texas;
Months wait-listed: 3 months;
Case details[A]:
* The family of four lives on $290 per week--$7,000 per year below the
poverty level;
* The family is enrolled in Medicaid;
* The mother cannot work because she must take care of the child.
Case: 6;
State: Pennsylvania;
Months wait-listed: 2 months;
Case details[A]:
* The single mother is unemployed, but her aunt provides for the
family, giving them $150 every 2 weeks;
* The family does not receive any type of public assistance;
* The mother is concerned about the child's education as a result of
not attending Head Start.
Case: 7;
State: Texas;
Months wait-listed: 1 month;
Case details[A]:
* The mother, a single parent of two children, is unemployed and
receives $500 per month in child support;
* The family is on two public assistance programs: Women Infants and
Children (WIC) and Medicaid;
* The family has experienced domestic violence;
* The mother has offers for work but cannot accept them because she
must care for the child.
Case: 8;
State: Texas;
Months wait-listed: 2 months;
Case details[A]:
* The mother, a single parent of four children, made $1,000 per month,
almost $14,000 a year below the poverty line. Since applying for Head
Start services, she has become unemployed;
* The family is on two public assistance programs: Medicaid and SNAP
benefits;
* The family has faced domestic violence, but the Head Start center
did not ask the parent whether they had;
* When the mother was working, she had to pay over $300 a month to
hire a babysitter to take care of her child.
Case: 9;
State: Pennsylvania;
Months wait-listed: 2 months;
Case details[A]:
* Both parents are unemployed, and the family lives with brother who
currently provides for them;
* The mother feels that the child is missing out on an education as a
result of not attending Head Start.
Case: 10;
State: Pennsylvania;
Months wait-listed: 7 months;
Case details[A]:
* The family of three is $8,000 a year under the poverty guidelines
earning $200 a week;
* The family is on several public assistance programs, including WIC,
Medicaid and SNAP benefits;
* The applicant is concerned that his child will not be able to speak
English when he starts school.
Source: GAO:
[A] Statements made by parents were not verified by GAO.
[End of table]
Corrective Action Briefing:
On April 20 and April 23, 2010, we briefed OHS and HHS officials on
the results of our work. Officials indicated that HHS would work
quickly to address the weaknesses we identified. We suggested a number
of potential actions the agency should consider to minimize Head Start
fraud and abuse, including the following:
* Creating an OHS program management fraud hotline for individuals to
report fraud, waste, and abuse. These tips could be investigated by
the program, the HHS Inspector General, or both;
* Establishing more stringent income verification requirements,
documentation requirements, or both by Head Start employees
responsible for certifying family eligibility, such as maintaining
income documentation provided by the applicant (e.g., pay stubs or W-
2s); and:
* Conducting undercover tests, such as the ones we describe in our
report, as a management oversight function.
Agency officials indicated that they would consider these suggestions.
They also told us that they would make sure that grantee staff
received training regarding the proper way to validate income
documentation.
Mr. Chairman, this concludes my statement. I would be pleased to
answer any questions that you or other members of the committee may
have at this time.
Contacts and Acknowledgments:
For additional information about this testimony, please contact
Gregory D. Kutz at (202) 512-6722 or kutzg@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this statement.
[End of section]
Footnotes:
[1] OHS awards Head Start funds directly to local organizations,
called grantees. Many Head Start grantees contract out the operation
of services to delegate agencies that operate programs at the
community level. Throughout this testimony we refer to both grantees
and delegates as grantees.
[2] Wait lists were documented because potentially eligible children
could have been displaced by ineligible children fraudulently enrolled
in the program.
[3] A Head Start program operated by an Indian tribe or a program
located in certain remote areas with small populations may enroll
additional children who do not meet one of the primary criteria.
[4] If fewer than 60 days remain in the grantee's program year at the
time an enrollment vacancy occurs, the grantee can choose not to fill
the vacancy without OHS considering it underenrolled.
[End of section]
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