[Federal Register Volume 75, Number 183 (Wednesday, September 22, 2010)]
[Proposed Rules]
[Pages 57704-57719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23583]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 75, No. 183 / Wednesday, September 22, 2010 /
Proposed Rules
[[Page 57704]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Part 1307
RIN 0970-AC44
Head Start Program
AGENCY: Office of Head Start (OHS), Administration for Children and
Families (ACF), Department of Health and Human Services (HHS).
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: This regulation proposes to amend Head Start Program
regulations to implement statutory provisions of the Improving Head
Start for School Readiness Act of 2007 for establishing a system of
designation renewal to determine if Head Start and Early Head Start
agencies are delivering high-quality and comprehensive Head Start and
Early Head Start programs that meet the educational, health,
nutritional, and social needs of the children and families they serve,
and meet program and financial management requirements and standards.
DATES: In order to be considered, comments on this proposed rule must
be received on or before December 21, 2010.
ADDRESSES: Interested persons are invited to submit comments to the
Office of Head Start, 1250 Maryland Avenue, SW., Washington, DC 20024,
Attention: Colleen Rathgeb or electronically via the Internet at http://www.regulations.gov. If you submit a comment, please include your name
and address, identify the docket number for this rulemaking, indicate
the specific section of this document to which each comment applies,
and give the reason for each comment. You may submit your comments and
material by electronic means, mail, or delivery to the address above,
but please submit your comments and material by only one means. A copy
of this Notice of Proposed Rulemaking may be downloaded from http://www.regulations.gov. Comments will be available for public inspection
at the Department's offices in Portals, 8th Floor, 1250 Maryland
Avenue, SW., Washington, DC 20024, Monday through Friday between 8:30
a.m. and 5 p.m.
FOR FURTHER INFORMATION CONTACT: Colleen Rathgeb, Office of Head Start,
202-205-7378 (not a toll-free call). Deaf and hearing impaired
individuals may call the Federal Dual Party Relay Service at 1-800-877-
8339 between 8 a.m. and 7 p.m. Eastern time.
SUPPLEMENTARY INFORMATION:
I. Statutory Authority
This proposed regulation is published under the authority granted
to the Secretary of Health and Human Services by sections 641,
645A(b)(12), and 644(c) of the Head Start Act (the Act) (42 U.S.C. 9801
et seq.), as amended by the Improving Head Start for School Readiness
Act of 2007 (Pub. L. 110-134).
II. Comment Procedures
Section 641(c)(5) of the Act requires the Secretary of HHS to
publish a notice in the Federal Register describing a proposed system
for designation renewal, including a proposal for the transition to
such system. The Act provides for a period of at least 90 days for
public comment.
In making any modifications to this notice of proposed rulemaking,
we will not consider comments received beyond the 90-day comment
period. To make sure your comments are addressed fully, we suggest the
following:
Be specific;
Address only issues raised by the proposed rule, not the
changes to the law itself;
Explain reasons for any objections or recommended changes;
Propose appropriate alternatives; and
Reference the specific section of the notice of the
proposed rule being addressed.
III. Background
The Head Start program is a national program administered by the
Office of Head Start (OHS), Administration for Children and Families
(ACF), Department of Health and Human Services (HHS), which promotes
school readiness of low-income children by enhancing their cognitive,
physical, social, and emotional development through the provision of
health, educational, nutritional, social, and other services that are
determined, based on family needs assessments, to be necessary.
The Head Start program provides grants to local public and private
non-profit and for-profit agencies to provide comprehensive child
development services to economically disadvantaged children and
families, with a special focus on helping preschoolers develop the
skills they need to be successful in school. In FY 1995, the Early Head
Start program was established to serve families of economically
disadvantaged children from birth to three years of age and pregnant
women from such families in recognition of the mounting evidence that
the earliest years matter a great deal to children's growth and
development.
On February 28, 2005, the United States Government Accountability
Office (GAO) issued a report entitled, ``Head Start: Comprehensive
Approach to Identifying and Addressing Risks Could Help Prevent Grantee
Financial Management Weaknesses'' (GAO-05-176). The report is available
on the GAO Web site at: http://www.gao.gov/new.items/d05176.pdf. In
that report, GAO found that the Administration for Children and
Families (ACF) did not recompete the grants of poorly performing
grantees. Instead, ACF gave continuous funding priority to current
grantees and as a result, in a number of instances, ACF funded poorly
performing grantees until the grantee either relinquished the grant or
ACF terminated the grant. GAO stated that, ``When grants are allowed to
remain with poorly performing grantees, children being served may not
be getting the `head start' they deserve because the grantees
continuously fail to meet program and financial management standards.''
In their Recommendations for Executive Action, GAO recommended that
ACF ``take steps to obtain competition for the grant if it has
determined that the current recipient of those grant funds fails to
meet program, financial management, or other requirements.'' In its
comments on the draft GAO report, ACF expressed
[[Page 57705]]
uncertainty about the scope of its authority to implement the GAO
recommendation to recompete Head Start grants. In response to the ACF
concerns, GAO asked Congress to consider providing ACF with the
authority to recompete grants when ACF determines that a current
grantee is not meeting Head Start's program or financial management
requirements.
On December 12, 2007, the Improving Head Start for School Readiness
Act of 2007 (Pub. L. 110-134) amended the Head Start Act (the Act) to
provide HHS with the authority to recompete grants. The Head Start Act,
as amended, establishes that Head Start grantees will be awarded grants
for a five-year period and only grantees delivering high-quality
services will be given another five-year grant non-competitively.
Section 641 of the Act requires the Secretary of the HHS to develop and
implement a system for designation renewal (e.g., Designation Renewal
System (DRS)) to determine if a Head Start agency is delivering a high-
quality and comprehensive Head Start program that meets the
educational, health, nutritional, and social needs of the children and
families it serves.
This proposed rule responds to those requirements. We also propose
to extend these requirements to Early Head Start programs pursuant to
the authority of section 645A(b)(12) of the Act. Early Head Start
programs provide family-centered services for low-income families--
pregnant women, infants and toddlers. These are the youngest children
and most vulnerable families we serve. We believe that Early Head Start
programs must be held to the same high standards as all other Head
Start programs in regard to designation and redesignation in order to
ensure that they provide high-quality services to promote the
development of the youngest children in the community and enable
parents to move towards self sufficiency.
Section 641(c)(1) of the Act requires that the DRS be shaped to
determine whether a grantee is providing high-quality services and
meets the program and financial management requirements and standards
described in section 641A(a)(1) of the Act, based on:
(A) Annual budget and fiscal management data;
(B) Program reviews conducted under section 641A(c);
(C) Annual audits required under section 647;
(D) Classroom quality as measured under section 641A(c)(2)(F); and
(E) Program Information Reports.
In the Conference Report that accompanied the Improving Head Start
for School Readiness Act of 2007, the Conference Committee stated,
``This system is meant to facilitate the designation of programs that
are in good standing and are providing a high-quality comprehensive
early childhood program, for a period of 5 years. The Conferees believe
that other programs not providing a high-quality comprehensive early
childhood program should not receive a designation renewal without
first entering into an open competition.'' H.R. Conf. Rep. No. 110-439
at 111 (2007), as reprinted in 2007 U.S.C.C.A.N. 442, 462.
The Conference Committee also noted that they did not intend the
designation renewal system to result in competition for all Head Start
grantees because such a process could undermine overall program
performance. As stated in the Conference Report: ``Furthermore, the
Conferees believe that the policy to limit open competition to under-
performing Head Start agencies will improve overall program
performance. The Conferees strongly believe the majority of Head Start
programs are delivering high-quality services and therefore do not
intend for this new designation system to result in competition for
designation for the majority of Head Start programs. Furthermore,
competing high-quality programs could undermine overall program
quality. The Conferees believe that in most instances, stability and
continuity within Head Start promotes better quality and greater
efficiency.'' Id.
Section 641(c) of the Act required the Secretary of HHS to convene
an expert panel (e.g., ``the Committee'') to inform the development of
a DRS and ``make recommendations to the Secretary on the development of
a transparent, reliable, and valid system for designation renewal.''
The seven members of the Committee were appointed by the Secretary per
the requirements in section 641(c)(3) of the Act. The Committee
convened three two-day meetings in March, June, and October 2008 and
issued a report in December 2008. The report, ``A System of Designation
Renewal of Head Start Grantees,'' is available at the following Web
site: http://eclkc.ohs.acf.hhs.gov/hslc/Program%20Design%20and%20Management/Head%20Start%20Requirements/Renewal%20of%20Head%20Start%20Grantees.
In its Report the Committee's first and overarching recommendation
was for ACF to ``develop a designation renewal system that is--
Reliable and valid in terms of the criteria and indicators
used, and is transparent to families, programs and the public;
Simple and easily understood by all stakeholders; and
Integrated into ongoing systems for program improvement in
such a way as to add value.''
ACF strongly agrees with this recommendation and used reliability
and validity, simplicity and understandability, and connections to
program improvement systems as the guiding principles in designing the
proposed system.
The Committee also recommended that the DRS be based on ``Automatic
Indicators'' and eventually also include ``Key Quality Indicators.''
The term ``Automatic Indicators'' as defined in the report means events
whose occurrence would require a grantee to compete for renewal
automatically. The term ``Key Quality Indicators'' refers to poor
performance in multiple areas that would require a grantee to compete
for renewal. ACF agrees with the recommendations of the Committee, and
we propose a set of conditions that would trigger competition.
In addition, ACF is proposing to ensure that a minimum of 25
percent of all grantees reviewed during each one-year cycle will be
required to recompete. If the conditions outlined in the rule do not
identify a minimum of 25 percent of grantees, then other indicators of
low performance will be used to identify other poor performers that
will be required to recompete. ACF believes that the expectation
embodied in this provision is critical to ensuring that the proposed
rule realizes its potential to improve child outcomes.
We acknowledge the Committee's expectation that ``no more than
approximately 15 to 20 percent of all grantees should be expected to
compete for another five-year grant.'' However, the Administration is
committed to funding only high-performing grantees and conducting
effective and rigorous competitions. Recent research on Head Start
programs has illustrated the need for improvement and for more rigorous
standards across Head Start programs. We understand that neither the
Committee nor the Congress intended for all grantees to recompete for
grants as required by most Federal grant programs. However, given the
importance of the provision of quality services for Head Start children
and families, we believe that setting a minimum 25 percent standard for
recompetition is appropriate to ensure the best services for Head Start
children.
The Administration is deeply committed to the mission of Head
Start--to helping our nation's most vulnerable children get a head
start on success in school and in life--and as
[[Page 57706]]
such is deeply committed to improving quality across all Head Start
programs. Participation in high-quality early childhood care and
education programs can affect crucial child outcomes dramatically, but
participation in low-quality programs has little or no impact. Recent
research suggests that quality in Head Start programs varies
considerably, and suggests that there is significant room for
improvement in Head Start programs. For example, ``FACES Findings: New
Research on Head Start Outcomes and Program Quality'' reports that
while average Head Start classroom quality is good, there was
substantial variation.
Competition for grants is an important tool for encouraging
excellence, establishing accountability for poor performance, and
opening up Head Start to new energetic organizations that may have
great capacity to run high-quality programs. Unless specified in the
regulations for grantees that have been terminated, current grantees
will be eligible to compete again for their current grants, but other
potential grantees will be able to do so as well. Finally, subjecting a
fixed percentage of grants to recompetition reduces the risk of
unintended consequences that could jeopardize a meaningful assessment
of grantee performance.
ACF agrees with the Committee that Head Start and Early Head Start
grantees should have a clear understanding of what criteria will be
used as ``triggers'' in making the decision to recompete a grant and so
proposes the concept of conditions/criteria that will result in
recompetition of a grant. The proposed conditions/criteria draw
substantively from both Automatic and Key Quality Indicators and allow
for a more simple and understandable system. ACF also believes that the
proposed data sources that are utilized to support the recompetition
decisions would be reliable, valid, and transparent as recommended by
the Committee.
The Committee made specific recommendations on determination
criteria that would automatically require a grantee to compete for
renewal, including: Suspension; bankruptcy or debarment; revocation by
a State or local government of a license to operate a child care
program; and a significantly higher number of deficiencies in OHS
monitoring than the average grantee has. In the discussion of
determination criteria, the Committee discussed program performance
indicators in the area of Financial Management, including: An audit
finding of going concern risk (going concern is proposed to be defined
as an organization that operates without the threat of liquidation for
the foreseeable future, a period of at least 12 months); and a
designation of fiscal high risk. The Committee discussed the use of
Program Management determination criteria, including: Governance;
internal controls; eligibility, recruitment, selection, enrollment,
attendance (ERSEA); self-assessment and ongoing monitoring; human
resources; and safety. The Committee discussed determination criteria
in the area of Education, including: Curriculum; assessment; and
structured learning environment. The Committee recommended
incorporating a practical classroom observation tool and effective
measures of child outcomes and of individualization when ACF is
satisfied it has the appropriate tools and measures. The Committee
recommended determination criteria in the area of Comprehensive
Services, including: Immunization; screening and follow-up; meeting the
requirement that at least 10 percent of actual enrollment include
children with disabilities that have been determined eligible for
special services under Individuals with Disabilities Education Act
(IDEA) by the agency providing IDEA services in their community; and a
developmental indicator on parent involvement.
As discussed in the following Section by Section Discussion of the
Regulatory Provisions, we are proposing to adopt the majority of the
Committee's recommendations in whole or with minor modifications.
Concurrent with publishing this proposed rule, ACF will provide a
report to Congress that provides a detailed description of the proposed
new system, including a clear rationale for any differences between the
proposed system and the recommendations of the Committee. Until the new
system is developed and implemented by the Secretary of HHS, section
641(a)(2) of the Act states that the interim policy after the enactment
of Public Law 110-134 is for ACF to award grants as it has done prior
to the 2007 Head Start reauthorization.
Section by Section Discussion of Regulatory Provisions
To address Head Start designation renewal, we propose to amend 45
CFR Chapter XIII by adding a new Part 1307, Policies and Procedures for
Designation Renewal of Head Start and Early Head Start Grantees.
Section 1307.1--Purpose and Scope
We propose to add section 1307.1 to set forth the purpose and scope
of Part 1307. The purpose of this Part is to set forth policies and
procedures for the designation renewal of Head Start and Early Head
Start programs. It is intended that these programs be administered
effectively and responsibly; that applicants to administer programs
receive fair and equitable consideration; and that the legal rights of
current Head Start and Early Head Start grantees be fully protected.
The designation renewal system is established in this Part to determine
if Head Start and Early Head Start agencies meet the educational,
health, nutritional, and social needs of the children and families they
serve and qualify to be designated for funding for five years without
competing for such funding as required under section 641(c) of the Head
Start Act with respect to Head Start agencies and pursuant to section
645A(b)(12) with respect to Early Head Start agencies. A competition to
select a new Head Start or Early Head Start grantee to replace a Head
Start or Early Head Start agency that has been terminated voluntarily
or involuntarily is not part of the designation renewal system
established in this Part, and is subject instead to the requirements of
Part 1302, Policies and Procedures for Selection, Initial Funding and
Refunding of Head Start Grantees, and for Selection of Replacement
Grantees.
Section 1307.2--Definitions
Section 1307.2 proposes the following definitions as applicable to
this part: ACF, Act, Agency, designated ACF official, Early Head Start
Agency, going concern, Head Start Agency, material weakness, and
transition period.
ACF is proposed to be defined as the Administration for Children
and Families in the Department of Health and Human Services.
Act is proposed to be defined as the Head Start Act, 45 U.S.C. 9831
et seq.
Agency is proposed to be defined as a public or private non-profit
or for-profit entity designated by ACF to operate a Head Start or Early
Head Start program.
Designated ACF official is proposed to be defined as the Official
authorized under Department of Health and Human Services delegations
authority to perform actions required or authorized by statute,
regulation, delegation, or order of a superior official.
Early Head Start Agency is proposed to be defined as a public or
private non-profit or for-profit entity designated by ACF to operate an
Early Head Start program to serve pregnant women and children from
birth to age three, pursuant to 645A(e) of the Head Start Act.
Going concern is proposed to be defined as an organization that
operates
[[Page 57707]]
without the threat of liquidation for the foreseeable future, a period
of at least 12 months. One Head Start agency, for example, had a
``going concern'' audit finding because it suffered recurring losses
from operations resulting in a net deficit in working capital, which
raised substantial doubt about its ability to continue as a viable
operation.
Head Start Agency is proposed to be defined as a local public or
private non-profit or for-profit entity designated by ACF to operate a
Head Start program to serve children age three to compulsory school
age, pursuant to section 641(b) and (d) of the Head Start Act.
Material weakness means a weakness, or a combination of weaknesses,
in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the grantee's
annual or interim financial statements will not be prevented or
detected on a timely basis. One Head Start agency, for example, had an
audit finding resulting from its failure to pay the payroll taxes for
personnel as required by the Internal Revenue Code. This resulted in
the agency being subject to Internal Revenue Service penalties.
ACF believes that an agency that is determined to have one or more
material weaknesses or to be unable to ensure that it can continue as a
going concern should result in the grantee being required to recompete
for renewal. If a grantee is not a going concern, it will not be able
to provide the Head Start services it is funded to provide because it
will have ceased operations and be in the process of being liquidated.
The definition of ``material weakness'' ACF is proposing to use is
based on the definition of the term in the Securities and Exchange
Commission regulation at 17 CFR 210.1-02(a)(4).
ACF is proposing to adopt the definitions for going concern and
material weakness because they reflect the way the two terms are used
in audits of Head Start grantees as required by section 647 of the Head
Start Act. We invite comments on these definitions and request that
along with any issues raised, commenters suggest specific alternative
definitions.
The final definition proposed is transition period, which ACF
proposes to mean the three-year time period after the effective date of
the final rule on the Designation Renewal System during which ACF will
convert all of the current continuous Head Start and Early Head Start
grants into five-year grants after reviewing each grantee to determine
if it meets any of the conditions or criteria under section 1307.3 that
would require recompetition or if the grantee will receive its first
five-year grant non-competitively.
Section 1307.3--Basis for Determining Whether a Head Start Agency Will
Be Subject to an Open Competition
In section 1307.3, ACF proposes to establish a designation renewal
system in which a minimum of 25 percent of all Head Start grantees
(including both Head Start and Early Head Start grantees) reviewed in
the same year will be required to recompete based on seven specified
performance conditions. As described further below, the rule sets forth
how other lower performing grantees will be selected for recompetition
if the seven conditions specified in the rule--such as having a
deficiency or license revocation--do not result in at least 25 percent
of grantees being identified for recompetition.
Under paragraph (a), a minimum of 25 percent of all Head Start
grantees (including both Head Start and Early Head Start grantees)
reviewed in the same year will be required to compete for their next
five years of funding.
Under paragraph (b), ACF proposes seven conditions in three
critical areas of Head Start program administration that would trigger
recompetition: quality, licensing and operation, and fiscal and
internal controls. Paragraphs (b)(1), (2), and (3) address the quality
of Head Start programs by proposing that an agency is required to
recompete if it has one or more deficiencies that were determined
during a single review of the Head Start agency; fails to establish and
use goals for improving school-readiness of children in their program;
or has low performance on one or more domains of the Classroom
Assessment Scoring System Pre-K (CLASS: Pre-K) in the two most recent
CLASS: Pre-K observations. Paragraphs (b)(4) and (b)(5) address the
area of licensing and operation by proposing that an agency is required
to recompete if it experiences a revocation of its license to operate
by a State or local licensing agency; or a suspension of its Head Start
grant by ACF. Paragraphs (b)(6) and (b)(7) address the area of fiscal
and internal controls by proposing that an agency is required to
recompete if it is debarred by any Federal or State agency from
receiving Federal or State funds or is disqualified from The Child and
Adult Care Food Program (CACFP); or is determined to have one or more
material weaknesses or determined to be unable to ensure that it can
continue as a going concern.
The conditions provided under paragraph (b) may result in the
designation of at least 25 percent of grantees for recompetition as
required under proposed paragraph (a). However, given the uncertainty
regarding the impact of this new system and the critical need to ensure
high-quality services for Head Start children, if a minimum of 25
percent of all grantees reviewed in the same year are not required to
compete for their next five years of funding based on the conditions
described in proposed paragraphs (b)(1)-(7), then objective criteria
established by the Secretary would identify additional low performing
grantees that will be required to recompete such that the total number
of grantees required to recompete meets the 25 percent requirement. We
are requesting public comments on several possible criteria to use to
strengthen the test for redesignation of poorly performing Head Start
grantees. We are considering two primary structures for defining the
additional criteria to be met by grantees if needed to satisfy the 25
percent standard and seek public comments on the most effective
approach to ensure high-quality performance by all grantees. We also
are considering use of a combination of the two approaches outlined
below.
The first approach would be based on a system that would assign
values to non-compliance findings from reviews under section
641A(c)(A), (C), and (D) of the Act, with higher values assigned to
more problematic non-compliance findings. This would result in a system
in which a higher score indicated that the grantee had demonstrated a
pattern of weaker performance. Each grantee then would be ranked among
all the other grantees reviewed in that year. Grantees that received
the highest scores would be identified for recompetition as a result of
their pattern of poor performance compared to all other grantees
reviewed during the same time period. We are seeking public comments
about the general merits of such a system, and specifically on the
relative weighting of findings, whether some non-compliances should be
weighted more heavily than others, and whether the size of the grantee
should be a factor taken into consideration in the ranking system.
The second approach we are considering would introduce the use of
evidence-based rating instruments into the Head Start monitoring review
system. Such rating instruments include: the Early Childhood
Environment Rating Scale, the Infant Toddler Environment Rating Scale,
and the Family Child Care Environment Rating Scale. Low scores
determined using any of these instruments would result in
recompetition. Use of these
[[Page 57708]]
instruments could provide an increased ability to distinguish the level
of quality of services being provided in Head Start and Early Head
Start classrooms and family child care homes with evidence-based
measures. We are seeking public comments about this structure in
general, as well as the three particular rating instruments mentioned
above and any alternative tools that interested parties wish to
identify in their comments. We also invite public comment on the
appropriate scoring level for each instrument that would indicate
poorer than acceptable performance as well as the most efficient
mechanism for incorporating these rating instruments into the Head
Start review process.
The proposed regulation describes the system whereby a Head Start
or Early Head Start agency shall be required to compete for its next
five years of funding whenever ACF determines that one of the specified
conditions/criteria under section 1307.3 are met during the relevant
time periods described in section 1307.7. Of note, ACF proposes two
exceptions related to the time periods under which data will be
considered for the conditions described in section 1307.3(b)(2) and
(3), as described below and in section 1307.7.
ACF is considering publication of the various data underlying
decisions to recompete. Making such information public would provide a
valuable service to parents and other community members concerned about
the quality of Head Start and Early Head Start, and also would provide
a valuable incentive for improvement among Head Start and Early Head
Start grantees.
It should be noted that this proposed competition process differs
from the current competition process that is used to select a new Head
Start or Early Head Start grantee to replace a Head Start or Early Head
Start agency that has been terminated voluntarily or involuntarily. The
replacement grantee process is not part of the DRS established in this
Part, and is subject instead to the requirements of Part 1302, Policies
and Procedures for Selection, Initial Funding and Refunding of Head
Start Grantees, and for Selection of Replacement Grantees.
ACF will begin implementing the DRS within 12 months of the
publication of the final rule. Consistent with section 641(c)(9) of the
Act, ACF will convert all of the current continuous grants into five-
year grants within a three-year transition period after the final rule
is published. Per section 641(c)(9)(C) of the Act, ACF is required to
establish and implement a schedule for reviewing each Head Start
agency. We propose that the designation review will be scheduled to
occur during the year following the year that the grantee has its
triennial review. In order to initiate the designation review process,
each Head Start or Early Head Start agency wishing to be renewed for
five years without competition shall request that status from ACF
immediately after its review under section 641A(c)(1)(A); the request
process is explained further in section 1307.7(a). Under this plan,
one-third of grantees will be reviewed in each of the first three years
after the final rule is published in order for ACF to determine if they
meet any of the conditions/criteria under section 1307.3 that would
require recompetition or if they will receive the first five-year grant
non-competitively. (Section 1307.7 addresses timing and notice of
designation decisions.)
After the three-year transition period is finished, all existing
Head Start and Early Head Start grantees will be subject to a five-year
grant period, as described further in section 1307.7. Grantees for
which none of the conditions/criteria in proposed section 1307.3 are
met will not be required to recompete and will be awarded another five-
year grant; grantees for which one or more of the conditions/criteria
in proposed section 1307.3 are met will be required to recompete.
During the DRS review, ACF proposes to examine relevant records
about the grantee's performance since June 12, 2009 consistent with
section 641(c)(9)(B) of the Act, which specifies that Head Start
agencies are not subject to the DRS requirements prior to 18 months
after the enactment of the 2007 reauthorization of the Head Start Act.
Therefore, no data prior to June 12, 2009 will be considered for the
conditions listed in section 1307.3(b)(1), (b)(2), or (b)(4)-(b)(7) or
the criteria in paragraph (c); for the condition listed in section
1307.3(b)(3), ACF proposes that no data will be considered until after
the effective date of this Part and then only in reviews under section
1307.7(c) beginning in the third year of the three-year transition
period.
The first three conditions ACF proposes to use to determine
designation renewal related to program quality are described in section
1307.3(b)(1)-(3). We are proposing several conditions that reflect the
Committee's recommendations that established conditions should be
simple and easily understandable and based on data that is reliable,
valid and transparent: (b)(1) one or more deficiencies that were
determined during a single review conducted by ACF under section
641A(c)(1)(A), (C), or (D) of the Act; (b)(2) lack of establishment and
use of goals for improving school-readiness of children in their
program as required by section 641A(g)(2) of the Act; and (b)(3) low
performance on the relevant number of domains depending on the time
period in which the DRS review occurs of the Classroom Assessment
Scoring System Pre-K (CLASS: Pre-K) in the two most recent CLASS: Pre-K
observations.
Paragraph (b)(1) as proposed cites deficiency findings through any
review conducted under section 641A(c)(1)(A), (C), or (D) of the Act--
full triennial reviews, follow-up reviews, or other reviews, including
unannounced site inspections of Head Start centers, as appropriate.
``Deficiency'' is defined in section 637(2) of the Act as: (1) A
systemic or substantial material failure of an agency in an area of
performance that the Secretary determines involves a threat to the
health, safety, or civil rights of children or staff; a denial to
parents of the exercise of their full roles and responsibilities
related to program operations; a failure to comply with standards
related to early childhood development and health services, family and
community partnerships, or program design and management; the misuse of
funds received under the Act; loss of legal status (as determined by
the Secretary) or financial viability, loss of permits, debarment from
receiving Federal grants or contracts, or the improper use of Federal
funds; or failure to meet any other Federal or State requirement that
the agency has shown an unwillingness or inability to correct, after
notice from the Secretary, within the period specified; (2) systemic or
material failure of the governing body of an agency to fully exercise
its legal and fiduciary responsibilities; or (3) an unresolved area of
non-compliance.
A grantee that has been determined by ACF to have one or more
deficiencies in a single review has demonstrated poor performance that
should require the grantee to recompete for renewal. ACF believes that
Head Start programs determined to have a failure of this kind are
considered appropriately to be failing to provide children with a high-
quality and comprehensive Head Start program. Failure to correct a
deficiency within the allotted time, which ACF generally establishes as
30 to 45 days for health and safety and financial integrity issues, and
90 to 180 days for most other deficiencies, is grounds to terminate an
agency from the Head Start or Early Head Start program under section
641A(e)(1)(C) of the Act. We note that the reviews conducted under
section 641A of the Act can result in deficiencies in each of the areas
of
[[Page 57709]]
education, health, family engagement and management and fiscal systems.
Violations of program requirements demonstrating a systemic or
substantial lack of program integrity, such as the absence of effective
internal financial controls or a failure to properly apply eligibility
criteria, will result in deficiency findings. The deficiencies may
include findings in the specific ``Key Quality Indicators'' noted in
the Committee's recommendations. Therefore, ACF believes that the
proposed deficiency condition indirectly addresses the specific program
performance indicators recommended by the Committee.
Proposed paragraph (b)(2) is consistent with the Committee's
recommendation regarding the importance of Head Start agencies
assessing their own performance in relation to achieving agency-
determined school-readiness goals. An agency would be required to
recompete if it has been determined by the designated ACF official
through a review conducted under section 641A(c)(1)(A), (C), or (D) of
the Act during the period covered by the ACF review under section
1307.7 not to have assessed its own performance regarding school-
readiness goals. Of note, we propose that the criteria that will be
considered when determining if an agency has assessed successfully its
own performance regarding school-readiness goals will differ for the
time period prior to the effective date of this Part compared to the
time period after the effective date of this Part, as described further
in Sec. 1307.7. Specifically, beginning on June 12, 2009, ACF proposes
that the criteria to be considered in the recompetition review is
whether agencies have established and taken steps to achieve their
goals for improving the school readiness of children participating in
their program in accordance with the requirements of section 641A(g)(2)
of the Act. Beginning with the effective date of this Part, ACF
proposes that the criteria to be considered in the recompetition review
also will include whether agencies have: analyzed individual child-
level assessment data in order to determine each child's status and
progress with regard to each of the domains of the Head Start Child
Outcomes Framework for Head Start programs and the Child Competencies
listed in the Early Head Start Program Performance Measures Framework
for Early Head Start programs and to plan how to individualize
experiences and instructional approaches to best support each child's
progress; and analyzed aggregated child assessment data at least three
times per year, except for programs operating less than 90 days, which
will be required to do so at least two times within their program
period, and program data to support continuous program improvement and
to inform professional development, staffing, and other program
decisions. We are proposing this two-phase process in order to provide
grantees with sufficient time to develop the necessary polices and
procedures and train staff on implementation of analysis of child-level
data and subsequent action steps to best support each child's progress.
The Head Start Child Outcomes Framework is not developed for, and
will not be utilized in, Early Head Start programs. Instead, the Child
Competencies listed in the Early Head Start Program Performance
Measures Framework will be used as the categories for determining the
status of infants and toddlers enrolled in Early Head Start programs.
The third condition proposed under paragraph (b)(3) is the Head
Start agency score from the Classroom Assessment Scoring System: Pre-K
(CLASS: Pre-K), a system that rates classroom interactions on a seven-
point scale with scores of one to two being in the low range; three to
five in the mid-range; and six to seven in the high range of quality.
Section 641A(c)(2)(F) of the Act requires the Secretary to include as
part of the Head Start monitoring review process ``a valid and reliable
research-based observational instrument, implemented by qualified
individuals with demonstrated reliability, that assesses classroom
quality, including assessing multiple dimensions of teacher-child
interactions that are linked to positive child development and later
achievement.'' Section 641(c)(1)(D) requires that such an instrument be
used as part of reviews and for determining whether the grantee meets
the program and financial management requirements and standards
described in section 641A(a)(1) of the Act. CLASS: Pre-K is ``a valid
and reliable research-based observational instrument'' that meets the
statutory requirements. As discussed in the ``CLASS Implementation
Guide: Measuring and Improving Classroom Interactions in Early
Childhood Settings'', CLASS has been validated by over ten years of
research in educational settings. The authors cite overarching
conclusions based on this extensive research noting that ``effective
teacher-child interactions are a crucial ingredient for children's
social and academic development''.
It should be noted that the regulations propose an alternative time
period to be considered for this condition compared to the other six
conditions described in this paragraph. In addition, the regulations
propose an alternative standard of performance that would apply only
for the cohort of grantees that receive its DRS review during the third
year of the three-year transition period.
Specifically, ACF proposes that a Head Start agency will be
required to compete for designation renewal if: (1) It scores one, on
one or more domains on CLASS: Pre-K, on the two most recent CLASS: Pre-
K observations, when the observations are conducted after the effective
date of Part 1307, and the findings are identified in a DRS review
under Part 1307 conducted after the beginning of the third year of the
transition period; and (2) it scores below three, on one or more
domains on CLASS: Pre-K, on the two most recent CLASS: Pre-K
observations, when the observations are conducted after the effective
date of Part 1307, and the findings are identified in a DRS review
under Part 1307 conducted after the close of the transition period.
Thus, ACF proposes that the results from CLASS: Pre-K observations will
not be considered starting on June 12, 2009 as will be the case for the
other six conditions described in this paragraph and instead will be
considered starting after the effective date of this Part and either at
the beginning of the third year of the transition period or after the
close of the transition period (depending on when the DRS review is
conducted for each grantee). ACF believes that a grantee that has such
low scores as described above on the two most recent CLASS: Pre-K
observations is not providing children the level of high-quality
instruction necessary to adequately prepare for school, and should be
required to recompete for renewal. ACF is seeking comment on this
standard.
The Administration believes that it is a major step forward to
bring the quality of teacher-child interactions to bear on
redesignation. The use of CLASS: Pre-K in particular is warranted by
the strong research base validating its correlation with student
outcomes. Use of CLASS: Pre-K in redesignation should begin as promptly
as possible, recognizing also that CLASS: Pre-K has not been used in
this way before. ACF will implement the use of CLASS: Pre-K results
during the third year of the three-year transition period rather than
waiting until the close of the transition period. For this third year
of the transition period, we are proposing an alternative standard of
performance related to CLASS: Pre-K data that would trigger
[[Page 57710]]
recompetition. For only the cohort of agencies reviewed under section
1307.7 during the third year of the three-year transition period,
agencies that received a score of one, on one or more domains of CLASS:
Pre-K, on the two most recent CLASS: Pre-K observations would be
required to compete for designation renewal.
ACF is considering incorporating into the final rule that the
condition based on CLASS: Pre-K observations will become effective in
the second year of the transition period. In this case, we would use
the same criteria stated above for the cohort of grantees reviewed in
the third year of the transition period, i.e., if a grantee scores one,
on one or more domains on CLASS: Pre-K, on the two most recent CLASS:
Pre-K observations. We are interested in receiving public comments on
both the implementation timeframe and the use of this alternative
standard of performance.
For both time periods, ACF is proposing the following methodology
for determining the domain scores for Head Start grantees. The CLASS:
Pre-K observations will be incorporated into the reviews under section
641A(c)(1)(A), (C), or (D) of the Act. Except when all children are
served by a grantee in a single classroom, ACF will conduct multiple
class observations and rate the conduct of the classes observed using
the CLASS: Pre-K instrument. When the grantee serves the children in
its program in a single class, that class will be observed and rated
using the CLASS: Pre-K instrument. The domain scores for that single
class will be the domain scores for the grantee for that CLASS: Pre-K
observation. For grantees that serve children in multiple classrooms,
ACF will conduct CLASS: Pre-K observations on a subset of the
classrooms. After the observation is completed, ACF will report to the
grantee the scores of the classes observed during the CLASS: Pre-K
observation in each of the domains covered by the CLASS: Pre-K
instrument. ACF will average the scores in each of the domains for all
classrooms assessed during an observation to determine the grantee's
average score in each domain. ACF has provided and will continue to
provide technical assistance to grantees on the CLASS: Pre-K
instrument.
We also are considering a number of alternatives related to (b)(3)
and the method of calculating the recompetition trigger using the
CLASS: Pre-K scores. One option we are considering is to apply
different absolute thresholds for each of the three domains based on
the national mean scores for those domains. For example, an absolute
threshold for the domains of Emotional Support and Classroom
Organization could be higher than the threshold for Instructional
Support. This approach would reflect research that shows ``the domains
of Emotional Support and Classroom Organization typically are at the
moderate to high level of quality in early childhood classrooms and
Instructional Support, however, is typically at a low level of
quality'' (CLASS Implementation Guide, Hamre et al, December 2009).
Research also is exploring whether there are thresholds of quality that
must be achieved in each domain in order to influence children's
development. For example, research has shown correlations between
children's social emotional outcomes in classrooms scoring in the mid
to high range of emotional support and for academic outcomes in the
lower end of the mid range on Instructional Support (Threshold analysis
of association between child care quality and child outcomes for low-
income children in pre-kindergarten programs, Burchinal et al, June
2008).
Another alternative we are considering is to base the determination
on the grantee's score on each domain relative to the scores of the
other grantees reviewed in the same year and then measure a grantee's
performance against that threshold. We are interested in receiving
public comments on these alternative approaches and whether they
provide a more meaningful assessment of grantee performance and/or
avoid possible unintended consequences.
The CLASS: Pre-K was developed as part of classroom observation
research supported by the National Center for Early Development and
Learning and the National Institute for Child Health and Human
Development (NICHD) Study of Early Care and Youth Development. It was
designed to allow a trained outside observer to provide a reliable
assessment of the quality of preschool classrooms. The CLASS: Pre-K
also has been used extensively for professional development to improve
the quality of classrooms.
The CLASS: Pre-K is based on research and theory suggesting that
interactions between children and adults are the primary mechanism for
children's development and learning.
The CLASS: Pre-K looks at three dimensions of quality in preschool
classrooms: Emotional Support, Classroom Organization, and
Instructional Support. In high-quality programs, effective teacher-
child interactions measured in the Emotional Support dimension create
positive relationships among teachers and children. In Classroom
Organization, high-quality interactions lead to well-managed classrooms
that provide children with frequent, engaging learning activities and
classrooms. High-quality effective interactions as measured in the
Instructional Support domain develop children's critical thinking
skills, provide ongoing feedback, and facilitate vocabulary
development.
The CLASS: Pre-K has been used in a number of large scale studies
of early childhood programs, including those mentioned, but also in the
Head Start Family and Children Experience Study (FACES) which provides
a nationally representative picture of Head Start programs. In general
across these studies, average CLASS: Pre-K scores are in the high end
of the mid range of quality in Emotional Support and Classroom
Organization and lower in the Instructional Support dimension. The
Office of Head Start has been pursuing the use of CLASS: Pre-K both as
an observational tool and a professional development tool.
The Committee recommended that when ACF was satisfied that it had a
valid, reliable, and practical classroom observation tool, we should
incorporate it into the designation renewal system. ACF now is
satisfied, based on extensive research and testing, that CLASS: Pre-K
has proven to be a valid, reliable, and practical classroom observation
tool. ACF believes that a low score on CLASS is a reliable and valid
indicator of poor performance in preparing Head Start children for
school, the primary statutory purpose of Head Start.
The CLASS: Pre-K is not developed for, and will not be utilized in,
either Early Head Start programs or Home-based programs. When ACF is
satisfied with a valid and reliable measure of quality interactions for
Early Head Start programs and Home-based programs, a measure will be
added as a recompetition condition through a subsequent rulemaking
process.
The next two conditions are described in paragraphs (b)(4) and
(b)(5), which address the area of licensing and operation by proposing
that an agency is required to recompete if it experiences a revocation
of its license to operate by a State or local licensing agency; or a
suspension of its Head Start grant by ACF.
Section 1307.3(b)(4) considers whether an agency has had its
license to operate a center or program revoked by a State or local
licensing agency, and the revocation of the license has not been
overturned or withdrawn. This is
[[Page 57711]]
consistent with the Committee's recommendations to consider revocation
of a license to operate a child care program as an automatic indicator
requiring competition under the DRS. A license to operate is required
in section 641A(a)(1)(D)(i) of the Act, which states that center-based
and combination program option facilities ``shall meet or exceed State
and local requirements concerning licensing for such facilities.''
Grantees have appeal rights for license revocations. It is possible
that these actions may be overturned. If these actions are overturned,
or withdrawn by the responsible State or local agency, before ACF
decides to require competition, they will not be used as a basis for a
recompetition decision by ACF. The grantee, however, could be required
to recompete by ACF based on the existence in its program of any other
conditions/criteria listed in section 1307.3. ACF does believe that
license revocations, if not overturned or withdrawn, are serious enough
to be included as conditions that would require recompetition of a
grant. Accordingly, if a challenge to a license revocation is pending
at the time of a final decision by ACF on required competition, the
grantee would still be required to compete for further funding.
It should be noted that revocation of a license to operate either a
child care facility or program, or any other necessary permit, can be
grounds for a ``deficiency'' finding, as the term is defined in section
637(2) of the Act. Failure to correct a deficiency within the allotted
time is grounds to terminate an agency from the Head Start or Early
Head Start program under section 641A(e)(1)(C) of the Act. An agency
that has had its license revoked, but subsequently has it restored
during the period for deficiency correction, still would be required to
recompete for funding because of the revocation. ACF understands that
licensing requirements vary based on State and locality, but agrees
with the Committee that licensing standards reflect the standards of
care for young children in that community and a sustained license
revocation is a serious violation of those standards. ACF is aware of
the fact that some grantees, like local government agencies and Indian
tribes, are responsible both for administering Head Start programs and
enforcing licensing standards applicable to Head Start facilities. We
are concerned about the potential conflict of interest that could arise
when such agencies are called to apply licensing standards to their own
facilities. ACF is seeking comment on this concern and ideas for
mitigating risks that may be associated with this condition. ACF also
is seeking comment on its impact on large grantees.
Section 1307.3(b)(5) proposes another condition, which was
recommended by the Committee: Whether an agency has been suspended from
the Head Start or Early Head Start program by ACF. ``Suspension of a
grant'' is defined at 45 CFR 1303.2 as the ``temporary withdrawal of
the grantee's authority to obligate grant funds pending corrective
action by the grantee.'' In accordance with 45 CFR 1303.12(a), ACF may
suspend a grant ``in whole or in part without prior notice and an
opportunity to show cause if it is determined that immediate suspension
is necessary because of a serious risk of: (1) Substantial injury to
property or loss of project funds; or (2) violation of a Federal,
State, or local criminal statute; or (3) if staff or participants'
health and safety are at risk.'' A grantee that has been suspended by
ACF will be required to compete for further funding unless the
suspension has been overturned or withdrawn before the date of ACF's
decision about requiring competition under section 1307.7. A grantee
that has had its suspension withdrawn or overturned before the ACF
decision under section 1307.7 may still be required to compete for
further funding based on having met one of the other conditions/
criteria in section 1307.3. ACF agrees that any Head Start agency that
has been suspended successfully has demonstrated an extremely poor
performance and should be required to recompete. A pending challenge to
the suspension or restoration of the grantee to the Head Start program
after correction of the violation shall not affect application of this
requirement. If there is a risk of the loss of Federal funds as a
result of mismanagement by a Head Start or Early Head Start agency, ACF
will suspend the agency.
The final two conditions are described in paragraphs (b)(6) and
(b)(7), which address the area of fiscal and internal controls by
proposing that an agency is required to recompete if it is debarred by
any Federal or State agency from receiving Federal or State funds or is
disqualified from the Child and Adult Care Food Program (CACFP); or is
determined to have one or more material weaknesses or to be unable to
ensure that it can continue as a going concern.
Section 1307.3(b)(6) proposes as the sixth condition, Head Start
agency debarment by a Federal or State agency from receiving Federal or
State funds or disqualification from the Child and Adult Care Food
Program (CACFP). CACFP disqualification applies to individuals who have
been disqualified from participation in the CACFP as principals of
institutions, sponsored centers, or as operators of day care homes, as
a result of being determined to be responsible for an uncorrected
serious deficiency in the operation of an institution, a sponsored
center, or a family day care home that participates in the program.
This is consistent with the Committee's recommendation that grantees
that have been debarred should be considered to be poor performing
programs that should have to recompete for their grants. Debarment is
grounds for a deficiency finding under section 637(2) of the Head Start
Act. Where a deficiency involving debarment exists, the means for
correction of the deficiency would be for an agency to obtain a waiver
pursuant to 2 CFR 180.135. A former grantee during the period of its
debarment would not be eligible for grants and other ``Covered
Transactions,'' including grants under the Head Start Act. 2 CFR
180.130(a). An agency that is terminated because it has been debarred
will not be in the position to be refunded without undergoing
competition because it is no longer participating in the Head Start or
Early Head Start program. While we cannot preclude previously debarred
grantees after their period of debarment has ended from applying in an
open competition, past performance is a criterion for funding under
section 641(d)(2)(A) of the Act.
Section 1307.3(b)(7) proposes the final of the seven conditions in
paragraph (b), which incorporates two criteria that are consistent with
the Committee's recommendations concerning the area of financial
management. The Committee proposed that audit findings that determine
an agency is unable to ensure it can continue as a going concern and/or
that an agency has received a designation of high risk should be used
as indicators of program performance determination criteria for
recompetition. ACF believes that an agency that is determined to have
one or more material weaknesses or to be unable to ensure that it can
continue as a going concern is a high-risk agency that has demonstrated
poor financial performance that should result in the grantee being
required to recompete for renewal. We propose to use the definitions
described in section 1307.2 for ``material weakness'' and ``going
concern.'' Section 1307.3(b)(7) provides that the basis for the two
criteria in this condition will be findings and opinions of either an
audit conducted in accordance with section 647 of the Act; an audit,
review or
[[Page 57712]]
investigation by a State agency; a review by the National External
Audit Review (NEAR) Center; or an audit, investigation or inspection by
the Department of Health and Human Services Office of Inspector General
as mandated under Public Law 95-452. We considered including as another
criterion in the area of financial management whether the grantee had a
disallowance of any of its Head Start or Early Head Start funds. As
defined in the HHS Uniform Administrative Requirements implemented at
45 CFR 74.2, ``disallowed costs'' means ``those charges to an award
that the HHS awarding agency determines to be unallowable, in
accordance with the applicable Federal cost principles or other terms
and conditions contained in the award.'' However, we recognize that an
instance of disallowed costs would lead to a deficiency finding by ACF
in most cases and therefore did not include this as one of the criteria
for recompetition.
In our development of this proposed rule, we also considered
incorporating into the DRS two other conditions: The results of Head
Start agencies' Program Information Reports (PIR) and agency
bankruptcy. However, based on the rationales described below, we
decided that the PIR should be used only in a limited way and
bankruptcy should not be included as a DRS condition.
The PIR is a survey tool used by ACF to collect self-reported
information about Head Start and Early Head Start services received by
children and families enrolled in Head Start programs. ACF uses the
information collected through the PIR to inform the public and Congress
about the status of children in Head Start programs as required by the
Act. We recognize that Congress included the PIR as a source of
information for the DRS in the 2007 reauthorization of the Head Start
Act. Specifically, section 641(c)(1)(E) of the Act requires that
Program Information Reports (PIR) be only one of the sources of
information that the DRS will use to make its determination of whether
the grantee meets the program and financial management requirements and
standards described in section 641A(a)(1) of the Act. However, the
Committee stated in its report that the PIR has ``significant
limitations,'' and noted in particular ``documented reliability
problems.'' In addition, a number of public comments were received by
the Committee arguing against use of PIR data as part of the DRS due to
reliability concerns. We note that in carrying out ongoing Federal
oversight of programs, and as preparation for conducting triennial
reviews, Federal staff already review the PIR data of specific programs
and look for ``red flags'' that warrant follow-up attention. Therefore,
ACF proposes to continue to utilize PIR data when gathering background
information about programs, including when performing DRS reviews, with
due regard to its limitations.
Similarly, we considered incorporating bankruptcy as another
condition under the DRS, but instead we propose to regard bankruptcy as
a ``red flag'' that should result in further inquiry. We note that the
Committee recommended that bankruptcy be included in the automatic
conditions for recompetition by stating that it is ``indicative of
instability in the program.'' While we agree that this is a very
serious situation that raises the question of whether a grantee is in
sound enough fiscal condition to continue to be funded to operate a
Head Start program, we believe that it is possible that, in some cases,
a grantee could file for bankruptcy or agree to a reorganization plan
as part of a bankruptcy settlement, but could continue to be able to
function as a Head Start program if it still has its Head Start funding
intact. In addition, we believe that the two financial conditions we
propose to establish in section 1307.3(b)(7) are sufficient to satisfy
the Committee's recommendations concerning financial management.
Section 1307.4--Grantee Reporting Requirements Concerning Certain
Conditions
Section 1307.4 proposes reporting requirements concerning the
occurrence of certain conditions related to requirements for grant
recompetition under section 1307.3. Under proposed paragraph (a), Head
Start and Early Head Start agencies are required to report in writing
to ACF within ten working days of occurrence of any of the following
events: (1) The agency has had a license to operate a center revoked by
a State or local licensing entity; (2) the agency has filed for
bankruptcy or agreed to a reorganization plan as part of a bankruptcy
settlement; (3) the agency has been debarred from receiving Federal or
State funds from any Federal or State department or agency or has been
disqualified from The Child and Adult Care Food Program (CACFP); or (4)
the agency has received an audit, audit review, investigation or
inspection report from the agency's auditor, a State agency, or the
cognizant Federal audit agency containing a determination that the
agency has one or more material weaknesses or is at risk for ceasing to
function as a going concern.
Currently Head Start and Early Head Start agencies are not required
to report these occurrences. ACF believes that timely reporting of the
occurrences is warranted because of their potential seriousness and
that ten days is a reasonable amount of time for the agency to report
the occurrence to ACF. Failure to comply with the reporting requirement
may result in additional monitoring of the grantee in order to
determine whether or not there is basis for ACF to issue a finding of
non-compliance or deficiency. While we considered making the failure to
report any of these occurrences another condition that would require
recompetition automatically, we recognized that the majority of
grantees will comply with these reporting requirements. We also would
not want to force a grantee to recompete based on an honest mistake
whereby it missed the 10-day reporting deadline or an extenuating
circumstance whereby it was unable to comply with the deadline.
However, if we learn through the Head Start monitoring process, or
other measures, that a grantee deliberately neglected to report any of
these occurrences, then ACF will issue a deficiency finding and the
grantee would be required to compete based on the condition described
in section 1307.3(b)(1).
Section 1307.5--Requirements To Be Considered for Designation for a
Five-Year Period When No Entity in a Community Is Determined To Be
Delivering a High-Quality and Comprehensive Head Start Program
Section 641(d) of the Act requires that ``if no entity in a
community is determined to be successfully delivering a high-quality
and comprehensive Head Start program * * * the Secretary shall, after
conducting an open competition, designate for a five-year period a Head
Start agency from among qualified applicants in such community.'' If a
grantee is found to meet any of the conditions/criteria in section
1307.3, its service area will be subject to an open competition to
determine if it or another provider is best able to serve children and
families in that community. Section 641(h) of the Act explains that
``for purposes of this subchapter, a community may be a city, county,
or multicity or multicounty unit within a State, an Indian reservation
(including Indians in any off-reservation area designated by an
appropriate tribal government in consultation with the Secretary), or a
neighborhood or other area (irrespective of boundaries or
[[Page 57713]]
political subdivisions) that provides a suitable organizational base
and possesses the commonality of interest needed to operate a Head
Start program.''
Section 1307.5 proposes requirements for how to compete for the
opportunity to be awarded a five-year grant if no entity in a community
is determined to be successfully delivering a high-quality and
comprehensive Head Start program. We are proposing that any agency that
has had its Head Start or Early Head Start grant terminated in the
preceding five years will be excluded from participating in such a
competition for a period of five years due to the extremely serious
nature of uncorrected deficiencies that would have led to such a
termination. ACF believes that because of their poor performance such
organizations cannot be considered to be `qualified applicants' in a
community under section 641(d)(1) of the Head Start Act.
Under this section, we propose that in order to compete for the
opportunity to be awarded a five-year grant, an agency must submit an
application to the designated ACF official that demonstrates it will
deliver a high-quality and comprehensive program. The application must
address the criteria for selection listed at section 641(d)(2) of the
Act.
Section 641(d)(2) of the Act provides the factors ACF will consider
in selecting a grantee, including the applicant's past performance and
plans to provide comprehensive services, attract and retain qualified
staff, maintain strong fiscal controls and cost effective fiscal
management, maintain child to teacher ratios, meet the program
performance standards, coordinate and collaborate with other early
childhood education and development entities, and facilitate parent
involvement in their program.
In cases in which a new grantee is selected as a result of
recompetition, ACF believes that the transition generally will proceed
without any disruption of services to children and families in the
community served. If ACF determines that a particular transition poses
a risk of disruption of services, ACF may exercise its statutory
authority to utilize the replacement process in exceptional
circumstances.
Section 1307.6--Tribal Government Consultation Under the Designation
Renewal System for When an Indian Head Start Grant Is Being Considered
for Competition
This section proposes a process for Tribal government consultation
under the Designation Renewal System for when an Indian Head Start
grant is being considered for competition. American Indian and Alaska
Native Head Start programs provide Head Start services to Tribes,
bands, pueblos, or other organized groups or communities, including
native villages, recognized as eligible for the special programs and
services provided by the United States to Indians because of their
status as Indians.
Section 641(c)(7)(B) of the Act prescribes a specific timeframe and
process for implementing the DRS for Indian Head Start agencies, which
differs from the DRS for other Head Start agencies. For instances in
which an Indian Head Start agency is determined to not be delivering a
high-quality and comprehensive Head Start program, the Act requires the
Secretary of HHS to engage in government-to-government consultation
with the appropriate Tribal government or governments in order to
establish a plan to improve the quality of Head Start programs operated
by the Indian Head Start agency. The Act requires that the Secretary of
HHS reevaluate the performance of the Indian Head Start agency no more
than six months after the implementation of the plan. If the Indian
Head Start agency still is not delivering a high-quality and
comprehensive Head Start program, the Secretary shall conduct an open
competition.
This section proposes the same process that is required by section
641(c)(7)(B) of the Act. Under paragraph (a), when making a designation
renewal determination, the designated ACF official will engage in
government-to-government consultation with the appropriate Tribal
government or governments for the purpose of establishing a plan to
improve the quality of Head Start programs operated by the Indian Head
Start agency.
The plan will be established and implemented within six months
after the designated ACF official's determination. Not more than six
months after the implementation of that plan, the designated ACF
official will reevaluate the performance of the Indian Head Start
agency and will conduct an open competition following a determination
that the Indian Head Start agency still is not delivering a high-
quality and comprehensive Head Start program.
Per section 641(e) of the Act, a non-Indian Head Start agency will
not be eligible to receive a grant to carry out an Indian Head Start
program, unless no Indian Head Start agency in the community is
available for designation to carry out an Indian Head Start program. In
such a circumstance, a non-Indian Head Start agency may receive a grant
to carry out an Indian Head Start program, but only until such time as
an Indian Head Start agency in such community becomes available and is
designated pursuant to section 641 of the Act.
Accordingly, under proposed paragraph (b), a non-Indian Head Start
or Early Head Start agency will not be eligible to receive a grant to
carry out an Indian Head Start program, unless there is no Indian Head
Start or Early Head Start agency available for designation to carry out
an Indian Head Start or Indian Early Head Start program.
Under proposed paragraph (c), a non-Indian Head Start or Early Head
Start agency may receive a grant to carry out an Indian Head Start
program only until such time as an Indian Head Start or Indian Early
Head Start agency in such community becomes available and is
designated.
Section 1307.7--Designation Request and Review Process
As discussed earlier in this preamble, following publication of the
final rule, ACF will implement the DRS and, consistent with section
641(c)(9) of the Act, will transition the current continuous grants
into five-year grants over a three-year period. One-third of grantees
will be reviewed in each of three years to determine if they meet any
of the conditions/criteria set out in section 1307.3 that would require
recompetition or if they will receive the first five-year grant non-
competitively. The designation review will be scheduled to occur during
the year following the year that the grantee has its triennial review.
ACF's designation review will examine relevant records about the
grantee's performance since June 12, 2009, and no data prior to June
12, 2009 will be considered in order to comply with section
641(c)(9)(B) of the Act, which describes the following limitation for
the transition to the DRS: ``A Head Start agency shall not be subject
to the requirements of the system for designation renewal prior to 18
months after the date of enactment of the Improving Head Start for
School Readiness Act of 2007.'' As discussed previously, there is one
exception to this time period. ACF proposes an alternative relevant
time period to be considered for the third condition described in
section 1307.3(b)(3), which considers the results of the classroom
interaction rating system known as ``CLASS: Pre-K.'' ACF proposes to
delay implementing the consideration of results from CLASS: Pre-K until
after
[[Page 57714]]
the effective date of the regulation and beginning in the third year of
the three-year transition period because the use of CLASS still is
relatively new to many Head Start agencies. Therefore, results from
CLASS: Pre-K will not be considered starting on June 12, 2009 and
instead will be considered starting after the effective date of this
Part and beginning in the third year of the three-year transition
period.
Paragraph (a) proposes that agencies wishing to be renewed without
competition must request that status. Under paragraph (b)(1), in the
three years after the effective date of the final rule, during the year
after review of a Head Start or Early Head Start agency under section
641(c)(1)(A) of the Act, each agency that has requested non-competitive
renewal would be reviewed to determine whether the conditions/criteria
in proposed section 1307.3 are met, using information on the agency's
performance since June 12, 2009.
As provided under paragraph (b)(2), ACF proposes to provide
preliminary notice to each grantee of the results of the designation
review at least twelve months before expiration of their current grant.
Such notices will be in writing by registered mail return receipt
requested providing preliminary notice under paragraph (b)(2)(i), that
the agency will be required to compete for funding for an additional
five-year period based on a determination that one or more conditions/
criteria in proposed section 1307.3 are met, or under (b)(2)(ii), that
the agency has been determined on a preliminary basis to be eligible
for renewed funding under section 1307.3.
ACF proposes to provide final notice to the grantee of the
designation decision at least six months before expiration of their
current grant. A grantee determined to be delivering a high-quality and
comprehensive Head Start or Early Head Start program, as established by
the fact that none of the conditions/criteria in proposed section
1307.3 are met for its program, will be awarded a five-year grant non-
competitively. A grantee determined to be not delivering a high-quality
and comprehensive Head Start or Early Head Start program, as
established by the fact that one or more of the conditions/criteria in
proposed section 1307.3 are met, will be subject to open competition
for the opportunity to be awarded a five-year grant. Proposed paragraph
(b)(3) provides that at least six months before the expiration of the
grant of an agency, written notice by certified mail return receipt
requested will be sent of the final finding that the agency is eligible
for renewed funding without competition, or that the agency will be
required to recompete for funding for an additional five-year period
based on a determination under section 1307.3. ACF invites grantees to
comment on the proposed transition plans.
Following the transition period, all existing grantees will be
subject to a five-year grant period. As provided in paragraph (c)(1),
during the fourth year of the grant period, ACF will review all
relevant data about a grantee's performance and make a determination,
based on the conditions/criteria established in section 1307.3, of
whether the grantee is providing high-quality, comprehensive services.
Grantees for which none of the conditions/criteria in proposed section
1307.3 are met will not be required to recompete under proposed section
1307.3 and will be awarded another five-year grant. Grantees for which
one or more of the conditions/criteria in proposed section 1307.3 are
met will be required to compete.
Following the approach proposed for the transition period under
paragraph (a) and (b), ACF proposes under paragraph (c)(2) to provide
preliminary notice to the grantee of the results of the designation
review at least twelve months before expiration of their current five-
year grant, subject to revision based on developments that take place
within the ensuing six-month period.
Under paragraph (c)(3), ACF proposes to provide final notice to the
grantee of the designation decision at least six months before
expiration of their current five-year grant. Grantees determined to be
delivering a high-quality and comprehensive program, evidenced by not
meeting any of the conditions/criteria, will be awarded a five-year
grant non-competitively. For grantees determined not to be delivering a
high-quality and comprehensive Head Start or Early Head Start program,
ACF proposes to provide final notice to the grantee at least six months
before expiration of their current five-year grant that they will have
to compete for the opportunity to be awarded a five-year grant.
Section 1307.8--Use of CLASS: Pre-K Instrument in the Designation
Review System
ACF is proposing in section 1307.8 that, except when all children
are served in a single classroom, ACF will conduct multiple class
observations and rate the conduct of the classes observed using the
Classroom Assessment Scoring System: Pre-K (CLASS: Pre-K) instrument.
When the grantee serves the children in its program in a single class,
that class will be observed and rated using the CLASS: Pre-K
instrument. The domain scores for that single class will be the domain
scores for the grantee for that observation. For grantees that serve
children in multiple classrooms, ACF will conduct CLASS: Pre-K
observations on a subset of the classrooms. After the CLASS: Pre-K
observation is completed, ACF will report to the grantee the scores of
the classes observed during the observation in each of the domains
covered by the CLASS: Pre-K instrument. ACF will average the scores in
each of the domains for all classrooms assessed during a CLASS: Pre-K
observation to determine the grantee's score in each domain. As
provided in section 1307.3(b)(3), an agency that has been determined by
ACF to have a score of one, on one or more domains during the
transition period or a score below three, on one or more domains, for
the period after the close of the transition period on each of the two
most recent CLASS: Pre-K observations in the time period covered by an
ACF decision under section 1307.7 will be required to compete for
designation renewal. As provided under section 1307.3(b)(3), the CLASS:
Pre-K condition will apply to CLASS: Pre-K observations in DRS reviews
under section 1307.7(c) that take place after the effective date of
this Part and during the third year of the transition period. As
discussed earlier in the preamble, ACF is considering alternatives for
calculating CLASS: Pre-K scores to determine the need to recompete and
we welcome comments on those alternatives.
IV. Paperwork Reduction Act
This rule establishes new information collection requirements in
section 1307.4. As required by the Paperwork Reduction Act of 1995,
codified at 44 U.S.C. 3507, ACF will submit a copy of these sections to
the Office of Management and Budget (OMB) for review and they will not
be effective until they have been approved and assigned a clearance
number.
[[Page 57715]]
----------------------------------------------------------------------------------------------------------------
Average burden
Requirement Respondents Annual per respondent Total burden
(hours) hours
----------------------------------------------------------------------------------------------------------------
Per section 1307.4, Head Start and Early 12-22 grantees.. 1 hour or less.. 1 hour or less. 12-22 hours.
Head Start agencies must report to ACF
within ten working days of occurrence of
any of the following:
(1) The agency has had a license to
operate a center revoked by a State
or local licensing entity.
(2) The agency has filed for
bankruptcy or agreed to a
reorganization plan as part of a
bankruptcy settlement.
(3) The agency has been debarred from
receiving Federal or State funds
from any Federal or State agency or
has been disqualified from the Child
and Adult Care Food Program (CACFP).
(4) The agency has received an audit,
audit review, investigation or
inspection report from the agency's
auditor, a State agency, or the
cognizant Federal audit agency
containing a determination that the
agency: Has one or more material
weaknesses; or is at risk of failing
to function as a going concern.
Per section 1307.7(a), each Head Start or 1,600 grantees.. 1 hour or less.. 1 hour or less. 1,600 hours.
Early Head Start agency wishing to be
renewed for five years without
competition shall request that status
from ACF immediately after its review
under section 641A(c)(1)(A).
----------------------------------------------------------------------------------------------------------------
We estimate the costs of implementing these requirements will be
approximately $20,000 annually.
We do not anticipate that Head Start agencies would be gathering
new information to accomplish these changes. They only will be required
to inform ACF that the event has occurred or that they wish to have
their designation renewed.
With respect to these provisions, ACF will consider comment by the
public on this proposed collection of information in the following
areas:
Evaluating whether the proposed collection is necessary
for the proper performance of the functions of ACF, including whether
the information will have practical utility;
Evaluating the accuracy of ACF's estimate of the proposed
collection of information, including the validity of the methodology
and the assumptions used;
Enhancing the quality, usefulness, and clarity of the
information to be collected; and
Minimizing the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technology, e.g.,
permitting electronic submission of responses.
OMB is required to make a decision concerning the collection of
information contained in these regulations between 30 and 60 days after
publication of this document in the Federal Register. Therefore, a
comment is best assured of having its full effect if OMB receives it
within 30 days of publication. This does not affect the deadline for
the public to comment to the Department on the regulations. Written
comments to OMB for the proposed information collection should be sent
directly to the following: Office of Management and Budget, either by
fax to 202-395-6974 or by e-mail to OIRA at [email protected].
Please mark faxes and e-mails to the attention of the desk officer for
ACF.
V. Regulatory Flexibility Act
The Secretary certifies that, under 5 U.S.C. 605(b), as enacted by
the Regulatory Flexibility Act (Pub. L. 96-354), this rule will not
result in a significant economic impact on a substantial number of
small entities. The actions required of grantees to comply with the
reporting, recordkeeping, and other requirements of this rule do not
require significant expenditures of funds.
Specifically, as noted under the Paperwork Reduction Act section of
this preamble, we estimate the cost of implementing new reporting
requirements to be approximately $20,000 annually, which when applied
to all 1,600 grantees nationally, results in a cost per grantee of less
than $20. In addition, only a subset of the 1,600 grantees will be
required to compete for renewal of a grant under these regulations. At
least 25 percent of grantees reviewed in a year will be affected by the
regulation. Those grantees that need to compete for another five-year
grant are required to submit an application. Since all grantees
currently are required to submit a refunding application each year for
their noncompetitive grant, there only will be an incremental increase
in costs for grantees that must prepare and submit a competitive
application. We estimate those costs to be less than $1,500 for each
grantee submitting a competitive application. In developing this
estimate, we assumed that the primary cost factor relates to hourly
salaries of the staff that likely would be involved in a refunding
application. Further, we assumed that grantees could spend up to twice
as much time preparing this competitive application as they do on their
regular annual refunding application.
These rules primarily are intended to ensure accountability for
Federal funds consistent with the purposes of the Head Start Act and
are not duplicative of other requirements. In developing this notice of
proposed rulemaking, we sought to implement the new and expanded
requirements of the Head Start Act in a manner that does not impinge on
a small entity's ability to design and manage effective and responsive
Head Start programs. At the same time, we sought to focus renewed
attention on strengthening accountability for Head Start programs and
increasing quality outcomes for low-income families. We believe this
rule implements the aims of the Head Start Act, as amended, to improve
the effectiveness of Head Start programs while preserving Head Start
grantees' abilities to continue using creativity and innovation to
promote the school readiness of low-income children. We request public
comments on whether we have adequately considered all costs for small
entities and achieved the balance described above.
[[Page 57716]]
VI. Regulatory Impact Analysis
Executive Order 12866 requires that regulations be reviewed to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. The Department has determined that this
notice of proposed rulemaking is consistent with these priorities and
principles. These regulations primarily implement statutory changes to
the Head Start program enacted in the Improving Head Start for School
Readiness Act of 2007 (Pub. L. 110-134). We have consulted with the
Office of Management and Budget (OMB) and determined that these rules
meet the criteria for a significant regulatory action under E.O. 12866.
Thus, they were subject to OMB's review.
ACF does not believe there will be a significant economic impact
from this regulatory action. At least 25 percent of grantees reviewed
in a year will be affected by the regulation. Combining the costs of
implementation of these rules for all grantees (approximately $20,000
annually) and the costs to those subset of grantees that would be
required to compete in any year (estimated to be no more than $1,500
for each grantee), the total cost per year resulting from this
regulation is well under $1 million.
VII. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that a covered agency prepare a budgetary impact statement before
promulgating a rule that includes any Federal mandate that may result
in the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year. If an agency must prepare a budgetary impact statement, section
205 requires that it select the most cost-effective and least
burdensome alternative that achieves the objectives of the rule
consistent with the statutory requirements. Section 203 requires a plan
for informing and advising any small government that may be
significantly or uniquely impacted. The Department has determined that
this rule, in implementing the new statutory requirements, would not
impose a mandate that will result in the expenditure by State, local,
and Tribal governments, in the aggregate, or by the private sector, of
more than $100 million in any one year.
VIII. Congressional Review
This regulation is not a major rule as defined in 5 U.S.C. Chapter
8.
IX. Executive Order 13132
Executive Order 13132, Federalism, requires that Federal agencies
consult with State and local government officials in the development of
regulatory policies with federalism implications. This rule will not
have substantial direct impact on the States, on the relationship
between the National Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
Therefore, in accordance with section 6 of Executive Order 13132, it is
determined that this rule does not have sufficient federalism
implications to warrant the preparation of a federalism summary impact
statement.
X. Treasury and General Government Appropriations Act of 1999
Section 654 of the Treasury and General Government Appropriations
Act of 1999 (Pub. L. 105-277) requires Federal agencies to issue a
Family Policymaking Assessment for any rule that may affect family
well-being. This rule would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, ACF has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
List of Subjects in 45 CFR Part 1307
Education of disadvantaged, Grant programs-social programs.
(Catalog of Federal Domestic Assistance Program Number 93.600, Head
Start)
Dated: June 14, 2010.
Carmen R. Nazario,
Assistant Secretary for Children and Families.
Approved: June 14, 2010.
Kathleen Sebelius,
Secretary.
For the reasons set forth in the preamble, we propose to amend 45
CFR Chapter XIII by adding part 1307 to read as set forth below:
PART 1307--POLICIES AND PROCEDURES FOR DESIGNATION RENEWAL OF HEAD
START AND EARLY HEAD START GRANTEES
Sec.
1307.1 Purpose and scope.
1307.2 Definitions.
1307.3 Basis for determining whether a Head Start agency will be
subject to an open competition.
1307.4 Grantee reporting requirements concerning certain conditions.
1307.5 Requirements to be considered for designation for a five-year
period when no entity in a community is determined to be delivering
a high-quality and comprehensive Head Start program.
1307.6 Tribal government consultation under the Designation Renewal
System for when an Indian Head Start grant is being considered for
competition.
1307.7 Designation request and review process.
1307.8 Use of CLASS: Pre-K Instrument in the Designation Review
System.
Authority: 42 U.S.C. 9801 et seq.
Sec. 1307.1 Purpose and scope.
The purpose of this part is to set forth policies and procedures
for the designation renewal of Head Start and Early Head Start
programs. It is intended that these programs be administered
effectively and responsibly; that applicants to administer programs
receive fair and equitable consideration; and that the legal rights of
current Head Start and Early Head Start grantees be fully protected.
The designation renewal system is established in this part to determine
if Head Start and Early Head Start agencies meet the educational,
health, nutritional, and social needs of the children and families they
serve and qualify to be designated for funding for five years without
competing for such funding as required under section 641(c) of the Head
Start Act with respect to Head Start agencies and pursuant to section
645A(b)(12) with respect to Early Head Start agencies. A competition to
select a new Head Start or Early Head Start to replace a Head Start or
Early Head Start agency that has been terminated voluntarily or
involuntarily is not part of the designation renewal system established
in this part, and is subject instead to the requirements of part 1302.
Sec. 1307.2 Definitions.
As used in this part--
ACF means the Administration for Children and Families in the
Department of Health and Human Services.
Act means the Head Start Act, 45 U.S.C. 9831 et seq.
Agency means a public or private non-profit or for-profit entity
designated by ACF to operate a Head Start or Early Head Start program.
Designated ACF official means the Official authorized under
Department of Health and Human Services delegations authority to
perform actions required or authorized by statute, regulation,
delegation, or order of a superior official.
Early Head Start Agency means a public or private non-profit or
for-profit entity designated by ACF to operate an Early Head Start
program to serve pregnant women and children from birth to age three,
pursuant to section 645A(e) of the Head Start Act.
[[Page 57717]]
Going concern means an organization that operates without the
threat of liquidation for the foreseeable future, a period of at least
12 months.
Head Start Agency means a local public or private non-profit or
for-profit entity designated by ACF to operate a Head Start program to
serve children age three to compulsory school age, pursuant to section
641(b) and (d) of the Head Start Act.
Material weakness means a weakness, or a combination of weaknesses,
in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the grantee's
annual or interim financial statements will not be prevented or
detected on a timely basis.
Transition period means the three-year time period after the
effective date of the final rule on the Designation Renewal System
during which ACF will convert all of the current continuous Head Start
and Early Head Start grants into five-year grants after reviewing each
grantee to determine if it meets any of the conditions or criteria
under Sec. 1307.3 that would require recompetition or if the grantee
will receive its first five-year grant non-competitively.
Sec. 1307.3 Basis for determining whether a Head Start agency will be
subject to an open competition.
(a) A minimum of 25 percent of all Head Start grantees (including
both Head Start and Early Head Start grantees) reviewed in the same
year will be required to compete for their next five years of funding.
(b) A Head Start or Early Head Start agency shall be required to
compete for its next five years of funding whenever the designated ACF
official determines that one or more of the following seven conditions
existed during the relevant time periods described under Sec. 1307.7:
(1) An agency has been determined by ACF to have one or more
deficiencies on a single review conducted under section 641A(c)(1)(A),
(C), or (D) of the Act in the period covered by an ACF review under
Sec. 1307.7.
(2) An agency has been determined by the designated ACF official
based on a review conducted under section 641A(c)(1)(A), (C), or (D) of
the Act during the period covered by the ACF review under Sec. 1307.7:
(i) In the period beginning on June 12, 2009, not to have
established and taken steps to achieve its goals for improving the
school-readiness of children participating in their program in
accordance with the requirements of section 641A(g)(2) of the Act; and
(ii) Beginning with the effective date of the part, not to have
analyzed individual child-level assessment data in order to determine
each child's status with regard to each of the domains of the Head
Start Child Outcomes Framework for Head Start programs and the Child
Competencies listed in the Early Head Start Program Performance
Measures Framework for Early Head Start programs and to plan how to
individualize experiences and instructional approaches to best support
each child's progress; and not to have analyzed aggregated child
assessment data at least three times per year, except for programs
operating less than 90 days, which will be required to do so at least
two times within their program period, and program data to support
continuous improvement and inform professional development, staffing,
and other program decisions.
(3) An agency has been determined by the designated ACF official
during the period covered by an ACF review under Sec. 1307.7:
(i) In the period after the effective date of part 1307, and for
the findings identified in a DRS review under part 1307 conducted
during the third year of the three-year transition period, but before
the close of the three-year transition period, to have a score of one,
on one or more domains on CLASS: Pre-K, on the two most recent CLASS:
Pre-K observations; and
(ii) In the period after the effective date of part 1307, and for
the findings identified in a DRS review under part 1307 conducted after
the close of the three-year transition period, to have a score that is
below three, on one or more domains of the CLASS: Pre-K on the two most
recent CLASS: Pre-K observations.
(4) An agency has had its license to operate a Head Start or Early
Head Start center or program revoked by a State or local licensing
agency in the period covered by an ACF review under Sec. 1307.7, and
the revocation has not been overturned or withdrawn during that period.
A pending challenge to the license revocation or restoration of the
license after correction of the violation shall not affect application
of this requirement.
(5) An agency has been suspended from the Head Start or Early Head
Start program by ACF during the period covered by the designated ACF
official review under Sec. 1307.7 and the suspension has not been
overturned or withdrawn before a competition for funding for the next
five-year period is announced. A pending challenge to suspension or
restoration of the grantee to the Head Start program after correction
of the violation shall not affect application of this requirement.
(6) An agency has been debarred from receiving Federal or State
funds from any Federal or State department or agency or has been
disqualified from The Child and Adult Care Food Program (CACFP) any
time during the period covered by the designated ACF official's review
under Sec. 1307.7 but has not yet been terminated or denied refunding
by ACF. (A debarred agency will only be eligible to compete for Head
Start funding if it receives a waiver described in 2 CFR 180.135.)
(7) An agency has been determined by ACF within the twelve months
preceding the designated ACF official's review under Sec. 1307.7 to
have either one or more material weaknesses or to be at risk for
failing to continue functioning as a going concern. The final
determination is made by the designated ACF official based on a review
of the findings and opinions of an audit conducted in accordance with
section 647 of the Act; an audit, review or investigation by a State
agency; a review by the National External Audit Review (NEAR) Center,
or an audit, investigation or inspection by the Department of Health
and Human Services Office of Inspector General.
(c) If a minimum of 25 percent of all Head Start grantees
(including both Head Start and Early Head Start grantees) reviewed in
the same year are not required to compete for their next five years of
funding based on the conditions described in paragraphs (b)(1) through
(7) of this section, then additional grantees up to that threshold,
identified by the Secretary through established criteria, will be
required to compete, pursuant to paragraph (a) of this section.
Sec. 1307.4 Grantee reporting requirements concerning certain
conditions.
(a) Head Start agencies must report in writing to the designated
ACF official within ten working days of occurrence any of the following
events:
(1) The agency has had a license to operate a center revoked by a
State or local licensing entity.
(2) The agency has filed for bankruptcy or agreed to a
reorganization plan as part of a bankruptcy settlement.
(3) The agency has been debarred from receiving Federal or State
funds from any Federal or State department or agency or has been
disqualified from The Child and Adult Care Food Program (CACFP).
(4) The agency has received an audit, audit review, investigation
or inspection report from the agency's auditor, a State agency, or the
cognizant Federal audit
[[Page 57718]]
agency containing a determination that the agency has one or more
material weaknesses or is at risk for ceasing to be a going concern.
Sec. 1307.5 Requirements to be considered for designation for a five-
year period when no entity in a community is determined to be
delivering a high-quality and comprehensive Head Start program.
In order to compete for the opportunity to be awarded a five-year
grant, an agency must submit an application to the designated ACF
official that demonstrates it will deliver a high-quality and
comprehensive Head Start program. The application must address the
criteria for selection listed at section 641(d)(2) of the Act. Any
agency that has been terminated as a Head Start or Early Head Start
agency in the preceding five years will be excluded from competing in
such competition.
Sec. 1307.6 Tribal government consultation under the Designation
Renewal System for when an Indian Head Start grant is being considered
for competition.
(a) In the case of an Indian Head Start or Early Head Start agency
determined not to be delivering a high-quality and comprehensive Head
Start or Early Head Start program, the designated ACF official will
engage in government-to-government consultation with the appropriate
Tribal government or governments for the purpose of establishing a plan
to improve the quality of the Head Start program or Early Head Start
program operated by the Indian Head Start or Indian Early Head Start
agency.
(1) The plan will be established and implemented within six months
after the designated ACF official's determination.
(2) Not more than six months after the implementation of that plan,
the designated ACF official will reevaluate the performance of the
Indian Head Start or Early Head Start agency.
(3) If the Indian Head Start or Early Head Start agency is still
not delivering a high-quality and comprehensive Head Start or Early
Head Start program, the designated ACF official will conduct an open
competition to select a grantee to provide services for the community
currently being served by the Indian Head Start or Early Head Start
agency.
(b) A non-Indian Head Start or Early Head Start agency will not be
eligible to receive a grant to carry out an Indian Head Start program,
unless there is no Indian Head Start or Early Head Start agency
available for designation to carry out an Indian Head Start or Indian
Early Head Start program.
(c) A non-Indian Head Start or Early Head Start agency may receive
a grant to carry out an Indian Head Start program only until such time
as an Indian Head Start or Indian Early Head Start agency in such
community becomes available and is designated pursuant to this part.
Sec. 1307.7 Designation request and review process.
(a) In the three years after the effective date of this part,
during the year after the review of a Head Start or Early Head Start
agency under section 641A(c)(1)(A) of the Act, each Head Start or Early
Head Start agency wishing to be renewed for five years without
competition shall request that status from ACF immediately after its
review under section 641A(c)(1)(A).
(b)(1) ACF shall review each Head Start and Early Head Start agency
which has made a request under paragraph (a) of this section to
determine if any of the conditions listed in Sec. 1307.3(b)(1),
(b)(2), or (b)(4) through (7) or the criteria under Sec. 1307.3(c)
were met by the agency's program since June 12, 2009 or if the
condition listed in Sec. 1307.3(b)(3) existed in the agency's program
since the effective date of this part and beginning in the third year
of the three-year transition period.
(2) Except as provided in Sec. 1307.6, at least twelve months
before the expiration date of a Head Start or Early Head Start agency's
then current grant, ACF shall give written notice by certified mail
return receipt requested or other system that establishes the date of
receipt of the notice by the addressee, stating:
(i) The Head Start or Early Head Start agency will be required to
compete for funding for an additional five-year period because ACF
finds that one or more conditions listed in Sec. 1307.3(b)(1), (b)(2),
or (b)(4) through (7) or the criteria under Sec. 1307.3(c) were met by
the agency's program after June 12, 2009 or if the condition listed in
Sec. 1307.3(b)(3) existed in the agency's program since the effective
date of this part and beginning in the third year of the three-year
transition period; or
(ii) That such agency has been determined on a preliminary basis to
be eligible for renewed funding for five years without competition
because ACF did not find that any conditions listed in Sec.
1307.3(b)(1), (b)(2), or (b)(4) through (7) or the criteria under Sec.
1307.3(c) were met by the agency's program after June 12, 2009 or the
condition listed in Sec. 1307.3(b)(3) existed in the agency's program
since the effective date of this part and beginning in the third year
of the three-year transition period.
(3) Except as provided in Sec. 1307.6, at least six months before
the expiration date of a Head Start or Early Head Start agency's then-
current grant, ACF shall give written notice by certified mail return
receipt requested or other system that establishes the date of receipt
of the notice by the addressee, stating either:
(i) The Head Start or Early Head Start agency will be required to
compete for funding for an additional five-year period because ACF
finds that one or more conditions or criteria listed in Sec. 1307.3
were met by the agency's program during the relevant time periods
described in Sec. 1307.7(b), identifying the conditions or criteria
ACF found, and summarizing the basis for the finding; or
(ii) That such agency has been determined on a final basis to be
eligible for renewed funding for five years without competition because
ACF did not find that any conditions or criteria listed in Sec. 1307.3
were met by the agency's program during the relevant time periods
described in Sec. 1307.7(b). The letter will include instructions on
the information it must provide to the designated ACF official in order
to receive funding.
(c)(1) Beginning with the five-year grant period after the
transition period under paragraph (b) of this section, at the beginning
of the fourth year of a Head Start or Early Head Start agency's then
current grant, an agency wishing to be renewed without competition
shall request that status. ACF shall review the applicant Head Start
and Early Head Start agency to determine if any of the conditions or
criteria listed in Sec. 1307.3 were met by the agency's program:
(i) Since the most recent ACF review of the agency under this part,
or,
(ii) After the effective date of this part, in the case of the
condition described under Sec. 1307.3(b)(3).
(2) Except as provided in Sec. 1307.6, at least twelve months
before the expiration date of a Head Start or Early Head Start agency's
grant, ACF shall give written notice by certified mail return receipt
requested, or other system that establishes the date of receipt of the
notice by the addressee, stating either:
(i) The Head Start or Early Head Start agency will be required to
compete for funding for an additional five-year period because ACF
finds that one or more conditions or criteria listed in Sec. 1307.3
were met by the agency's program during the period established in
paragraphs (c)(1)(i) or (ii) of this section, identifying the
conditions or criteria ACF found, and summarizing the basis for the
finding; or
(ii) That such agency has been determined on a preliminary basis to
be eligible for renewed funding for five years without competition
because ACF
[[Page 57719]]
did not find that any conditions or criteria listed in Sec. 1307.3
were met by the agency's program in the period established in
paragraphs (c)(1)(i) or (ii) of this section.
(3) Except as provided in Sec. 1307.6, at least six months before
the expiration date of a Head Start or Early Head Start agency's then
current grant, ACF shall give written notice by certified mail return
receipt requested, or other system that establishes the date of receipt
of the notice by the addressee, either stating:
(i) The Head Start or Early Head Start agency will be required to
compete for funding for an additional five-year period because ACF
finds that one or more conditions or criteria listed in Sec. 1307.3
were met by the agency's program during the period established under
paragraphs (c)(1)(i) or (ii) of this section identifying the conditions
or criteria ACF found, and summarizing the basis for the finding; or
(ii) That such agency has been determined on a final basis to be
eligible for renewed funding for five years without competition because
ACF did not find that any conditions or criteria listed in Sec. 1307.3
existed in the agency's program during the period established under
paragraphs (c)(1)(i) or (ii) of this section. The letter will include
instructions on the information it must provide to the designated ACF
official in order to receive funding.
Sec. 1307.8 Use of CLASS: Pre-K Instrument in the Designation Review
System.
Except when all children are served in a single classroom, ACF will
conduct multiple class observations and rate the conduct of the classes
observed using the CLASS: Pre-K instrument. When the grantee serves the
children in its program in a single class, that class will be observed
and rated using the CLASS: Pre-K instrument. The domain scores for that
class will be the domain scores for the grantee for that observation.
After the observation is completed, ACF will report to the grantee the
scores of the classes observed during the CLASS: Pre-K observation in
each of the domains covered by the CLASS: Pre-K instrument. ACF will
average the scores on each domain for all classrooms assessed during a
CLASS: Pre-K observation to determine the grantee's score in each
domain. As provided in Sec. 1307.3(b)(3), an agency that has been
determined by ACF to have a score of one, on one or more domains,
during the transition period or a score below three, on one or more
domains, for the period after the close of the transition period on
each of the two most recent CLASS: Pre-K observations in the time
period covered by an ACF decision under Sec. 1307.7 will be required
to compete for designation renewal. As provided under Sec.
1307.3(b)(3), the CLASS: Pre-K condition will apply to CLASS: Pre-K
observations in DRS reviews under Sec. 1307.7(c) that take place after
the effective date of this part and during the third-year of the
transition period.
[FR Doc. 2010-23583 Filed 9-21-10; 8:45 am]
BILLING CODE 4184-01-P