Short title

This Act may be cited as the

Head Start Accountability Act of 2007

Financial assistance for Head Start programs

Section 638 of the Head Start Act (42 U.S.C. 9833) is amended by inserting for a period of 5 years after provide financial assistance to such agency.

Designation of Head Start agencies

Subsections (a), (b), and (c) of section 641 of the Head Start Act (42 U.S.C. 9836) are amended to read as follows:

(a)

Designation

(1)

In general

The Secretary is authorized to designate as a Head Start agency any local public or private nonprofit or for-profit agency, within a community, including a community-based organization, that— (A)has power and authority to carry out the purpose of this subchapter and perform the functions set forth in section 642 within such community; and (B)is determined by the Secretary (in consultation with the chief executive officer of the State involved, if the State expends non-Federal funds to carry out Head Start programs) to be capable of planning, conducting, administering, and evaluating, either directly or by other arrangements, a Head Start program. (2)

Required goals for designation

In order to be eligible for designation as a Head Start agency, an entity described in paragraph (1) shall establish program goals for continuous improvement in all areas of program operations (including early childhood development and health services), program design and management, and family and community partnerships. (3)

Eligibility for subsequent designation

In order to be eligible for designation as a Head Start agency subsequent to the initial designation made by the Secretary after the effective date of the Head Start Accountability Act of 2007, a Head Start agency shall demonstrate that such agency has met or is making progress toward meeting such goals. (4)

Local oversight board

In order to be eligible for designation as a Head Start agency, an entity described in paragraph (1) shall establish a local oversight board that— (A)is composed of volunteer individuals who include (but are not limited to) a Head Start parent, a representative of a school board, a child development expert, a member of the business community, and other volunteer individuals who are residents of the community, including individuals who have an understanding of the general principles of accounting, law, business administration, and management; (B)operates as a unit independent of staff employed by such agency; (C)actively participates in the development, strategic planning, implementation, and evaluation of the Head Start program for which it is established; (D)provides oversight of such program to ensure that such Head Start agency is delivering high quality services to children and families in compliance with all applicable standards in effect under this subchapter and with the applicable performance measures established by the Secretary under section 644; (E)takes no action that may provide (and takes appropriate action to prevent providing) any direct or indirect financial benefit to any member of such board or to any member of the staff of such agency; (F)reviews and approves annually the operating budget of such program; (G)reviews and approves the bylaws applicable to such program; (H)reviews annually the human resources (including administrative and management staff) available to carry out such program and makes recommendations regarding such resources to ensure the effective operation of such program; and (I)monitors staff implementation of any corrective action necessary to comply with applicable laws (including regulations) governing financial statements and with all requirements applicable under this subchapter. (b)

Communities

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 political subdivisions) that provides a suitable organizational base and that possesses the commonality of interest needed to operate a Head Start program. (c)

Priority in designation

In administering the provisions of this section, the Secretary shall, in consultation with the chief executive officer of the State involved, give priority in the designation (including a subsequent designation) of Head Start agencies to any high-performing Head Start agency or delegate agency that— (1)is receiving assistance under this subchapter; (2)meets or exceeds program and financial management requirements, standards described in section 641A(a)(1), and other requirements established by the Secretary; (3)has no unresolved programmatic deficiencies or areas of noncompliance, and has not had findings of deficiencies during the then most recent triennial review conducted under section 641A(c); and (4)has taken the actions required by the Secretary under section 647(c) to correct deficiencies.

Quality standards; monitoring of Head Start agencies and programs

(a)

Quality standards

Section 641A(a) of the Head Start Act (42 U.S.C. 9836a(a)) is amended— (1)in paragraph (1) by amending subparagraph (C) to read as follows:

(C)administrative and financial management standards, including internal controls necessary to safeguard Federal funds;

, and

(2)by adding at the end the following:

(4)

Evaluations and corrective actions for delegate agencies

(A)

Procedures

Each Head Start agency shall establish procedures relating to its delegate agencies, including— (i)procedures for evaluating delegate agencies; (ii)procedures for terminating financial assistance otherwise provided to delegate agencies; and (iii)procedures for appealing a financial assistance termination decision relating to a delegate agency. (B)

Evaluations

Each Head Start agency— (i)shall evaluate its delegate agencies using the procedures established pursuant to this section; and (ii)shall inform such delegate agencies of the deficiencies identified through the evaluation that are required to be corrected. (C)

Remedies to ensure corrective actions

If a Head Start agency identifies a deficiency for a delegate agency through the evaluation, such Head Start agency may— (i)initiate procedures to terminate the designation of such delegate agency unless such delegate agency corrects the deficiency; (ii)conduct monitoring visits, as needed and without notice, to such delegate agency until either such deficiency is corrected or such Head Start agency terminates the financial assistance otherwise provided to such delegate agency; and (iii)release funds to such delegate agency only as reimbursements until either such deficiency is corrected by such delegate agency or such Head Start agency terminates financial assistance otherwise provided such delegate agency. (D)

Rule of construction

Nothing in this paragraph shall be construed to modify or supersede the responsibilities of the Secretary with respect to Head Start agencies or delegate agencies that receive financial assistance under this subchapter.

(b)

Corrective action; termination

Section 641A(d) of the Head Start Act (42 U.S.C. 9836a(d)) is amended— (1)in paragraph (1)(B)(ii)— (A)by striking 90 and inserting 60, and (B)by striking 90-day and inserting 60-day, and (2)in paragraph (2)— (A)in subparagraph (A) by striking 90-day and inserting 60-day, and (B)by amending subparagraph (B) to read as follows:

(B)

Secretarial responsibility

The Secretary shall— (i)not later than 30 days after receiving from a Head Start agency a proposed quality improvement plan for corrective action pursuant to subparagraph (A), either approve such plan or specify the reasons why such plan cannot be approved; and (ii)not later than 60 days after approving a quality improvement plan under this subparagraph, conduct an on-site review to certify that all deficiencies of such Head Start agency, and of all Head Start programs operated by such Head Start agency, have been corrected in accordance with the standards established under this subchapter and with the results-based performance measures developed by the Secretary under subsection (b).

Appeals, notice, and hearing

(a)

Procedures

Paragraphs (2) and (3) of section 646(a) of the Head Start Act (42 U.S.C. 9841(a)) are amended to read as follows:

(2)except in emergency situations, a recipient of financial assistance under this subchapter shall receive written notice not less than 30 days before such assistance is suspended, terminated, or reduced; (3)such recipient shall be provided an opportunity for full and fair hearing, including an opportunity to show cause why the action described in such notice should not be taken; and

(b)

Limitation on use of funds

Section 646 of the Head Start Act (42 U.S.C. 9841) is amended by adding at the end the following:

(f)A recipient of financial assistance under this subchapter may not use such assistance for the purpose of appealing any decision made by the Secretary under this subchapter.

Audits

Section 647 of the Head Start Act (42 U.S.C. 9842) is amended by adding at the end the following:

(c)(1)Not later that 60 days after the end of each fiscal year, each Head Start agency shall submit to the Secretary an independent financial audit of the Head Start program carried out with financial assistance provided under this subchapter. Such audit shall be carried out by a certified public accountant selected through a competitive process from among qualified certified accountants by the local oversight board established in accordance with section 641(a) by such agency, except that no accountant may perform audits of such program for a period exceeding 2 consecutive fiscal years. (2)Not later than 60 days after receiving such audit, the Secretary shall provide to such agency, and to the chief executive officer of the State in which such program is operated, a notice identifying the actions such agency is required to take to correct all deficiencies identified in such audit. (d)Each recipient of financial assistance under this subchapter shall— (1)maintain, and annually submit to the Secretary, a complete accounting of its administrative expenses (including a detailed statement identifying the amount of financial assistance provided under this subchapter used to pay expenses for salaries and compensation and the amount (if any) of other funds used to pay such expenses); and (2)provide such additional documentation as the Secretary may require.

Effective date

This Act and the amendments made by this Act shall take effect on the 1st day of the 1st fiscal year beginning after the date of the enactment of this Act.