GAO Calls for Actions To Limit Head Start Fraud

Jerry Ashworth
October 7, 2019 at 07:58:19 ET

The Department of Health and Human Services (HHS) Office of Head Start (OHS) plans to conduct a fraud risk assessment for the Head Start program, which will address the effects of fraud on program performance, and will collaborate with other HHS and Administration for Children and Family officials on methods to prevent potential instances of fraud, in response to a recent Government Accountability Office (GAO) recommendation.

In 2010, GAO conducted undercover tests by submitting forms to Head Start centers that appeared to be sent from families seeking Head Start assistance. At that time, GAO reported numerous instances in which the centers, which receive Head Start grants, did not comply with eligibility verification and enrollment requirements. For example, staff at Head Start centers intentionally disregarded income thresholds to qualify for Head Start, and in the case of two Head Start grantees, the average number of students who attended class was significantly lower than the number of students the recipients reported as enrolled in class. Because Congress has appropriated more than $10 billion for Head Start programs for federal fiscal year 2019, in which some 1,600 Head Start grant recipients would serve about 1 million children, Congress requested GAO to determine if these fraud risks are still present.

Problems ‘Persist’

In its follow-up report released on Oct. 2, GAO explained that it again submitted covert forms to Head Start centers and again found a lack of controls related to eligibility screening and detecting potential fraud. Posing as fictitious families, GAO attempted to enroll children at 15 selected Head Start centers in metropolitan areas (e.g., Los Angeles and Boston). GAO provided incomplete or potentially disqualifying information during the enrollment process, such as pay stubs that exceeded income requirements, yet only seven of the 15 centers correctly determined GAO’s fictitious families were not eligible. At three centers, Head Start center staff encouraged GAO’s fictitious families to attend without following all eligibility-verification requirements, and GAO found potential fraud at five other centers. For example, GAO explained that in three cases, Head Start center documents showed that GAO’s fictitious applications had been doctored to exclude income information GAO had provided, which would have shown that the fictitious family’s income was above the income-eligibility threshold.

“Through our current review, we have found that systemic vulnerabilities in program controls persist, putting the program at risk for fraud and improper payments,” GAO said. “Further, OHS has not performed a comprehensive fraud risk assessment to consider the full range of fraud risks it faces and how to address them. Until OHS conducts a comprehensive fraud risk assessment, it may not understand the likelihood and impact of fraud risk facing the program and may not adequately address those risks.”

Other Weaknesses

GAO also found that OHS has not always monitored Head Start grant recipients in a timely manner, leading to delays in resolving grantee weaknesses. After reviewing Head Start recipient monitoring reports from October 2015 to October 2018, along with the related follow-up reports, GAO noted that OHS did not consistently meet each of three timeliness goals for: (1) notifying Head Start recipients of deficiencies identified during its monitoring reviews; (2) confirming recipient deficiencies were resolved; and (3) issuing a final follow-up report to the grantee. Although OHS issued guidance in October 2018 that details the office’s procedures for notifying, following up and issuing final reports on deficiencies identified by its monitoring reviews, in its report, GAO found that OHS had not yet established a method to evaluate the results of its new procedures to determine whether they are effective.

Further, GAO found that OHS gives recipient Head Start centers the discretion to allow children with extended absences — sometimes of a month or more — to remain counted as enrolled in the program. However, while OHS officials told GAO that a child’s Head Start slot should be considered vacant after 30 days of consecutive absences, the office has not provided guidance explaining this to grantees. “Without communicating such guidance, OHS may not be able to ensure slots that should be considered vacant are made available to children in need,” GAO explained. “Further, OHS risks paying grantees for services not actually delivered.”

Recommendations and Response

To address its concerns, GAO made several recommendations for OHS leadership. In response to a recommendation that OHS perform a fraud risk assessment for the Head Start program, including conducting an assessment as to the likelihood and impact of these fraud risks, OHS said it would work with its colleagues at ACF and HHS to improve fraud risk activities. “OHS continues to be committed to ensuring the most vulnerable families benefit from enrollment in Head Start and Early Head Start, and constantly works to improve our oversight of the program and our responsiveness in supporting families as they work towards moving beyond poverty,” OHS added.

OHS did not agree, however, with a GAO recommendation that the office explore options, as part of the fraud risk assessment for the Head Start program, for additional risk-based monitoring of the program, including covert testing similar to that used by GAO in its review. “The covert tests conducted by GAO are nongeneralizable to the more than 1,600 Head Start grantees,” OHS explained, adding that it will balance risk-based monitoring strategies with its efforts to serve low-income families. Still, GAO stood by its recommendation, explaining that covert tests can find potential fraud that would not be identified using OHS’ current monitoring and oversight methods.

GAO also recommended that OHS establish methods to monitor and evaluate OHS’ new internal procedures for monitoring reviews, which would include establishing a baseline to measure the effect of these procedures and identify any problems hampering the timeliness of the monitoring evaluations. Again, OHS did not agree with this recommendation, stating that it has already established processes to monitor the effectiveness of its procedures and has been successful in tracking and meeting most of the identified goals under its newly developed system of report tracking.

OHS did concur with the following three GAO recommendations:

  • adopt a risk-based approach for using attendance records to verify the reliability of the enrollment data that OHS uses to ensure Head Start grantees serve the number of families for which they are funded, such as during OHS’ monitoring reviews;
  • provide programwide guidance pertaining to when a student’s slot should be considered vacant due to absenteeism; and
  • develop and implement a method for grant recipients to document attendance and services provided to pregnant women under the Early Head Start program.

OHS told GAO that it plans to issue policy updates to: (1) clarify how grant recipients should work with families experiencing absenteeism, and (2) explain how recipients can track and provide services to pregnant women.

For More Information

The GAO report, “Head Start: Action Needed to Enhance Program Oversight and Mitigate Significant Fraud and Improper Payment Risks,” (GAO-19-519) is available at https://www.gao.gov/assets/710/701329.pdf.

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