[Federal Register Volume 84, Number 156 (Tuesday, August 13, 2019)]
[Proposed Rules]
[Pages 39996-40006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17024]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Parts 1304 and 1305
RIN 0970-AC77
Head Start Designation Renewal System
AGENCY: Office of Head Start (OHS), Administration for Children and
Families (ACF), Department of Health and Human Services (HHS).
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this NPRM, we propose changes to two of the seven
conditions of the Designation Renewal System for Head Start Grantees
(DRS): The condition related to the Classroom Assessment Scoring
System: Pre-K (CLASS) and the fiscal condition related to audit
findings. For the CLASS condition, we propose to remove the lowest 10
percent criterion and set more rigorous minimum thresholds across all
three domains that grantees must meet in order to avoid competition.
For the fiscal condition, we propose to add a second criterion that
would consider additional findings from annual audits. A grantee would
be required to compete for continued funding if they met either
criterion.
We also propose technical changes within part 1304 subpart B
(Designation Renewal) to remove any outdated provisions to the
regulation. These technical fixes were not included in the publication
of the Head Start Program Performance Standards (performance standards)
final rule in 2016 because the Designation Renewal section of the
regulation was not open for amendment in the revision of the
performance standards.
DATES: Submit either electronic or written comments by September 27,
2019.
ADDRESSES: You may submit comments, identified by [docket number and/or
RIN number], by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Office of Head Start, Attention: Director of Policy
and Planning, 330 C Street SW, 4th Floor, Washington, DC 20201.
Instructions: All submissions received must include the agency name
and docket number or Regulatory Information Number (RIN) for this
rulemaking. All comments received will be posted without change to
http://www.regulations.gov, including any personal information
provided.
FOR FURTHER INFORMATION CONTACT: Colleen Rathgeb, Office of Head Start,
Planning, Oversight, and Policy Division Director, (202) 358-3263,
[email protected]. 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 Standard Time.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
Designation Renewal System
Request for Comment on Head Start Designation Renewal System
Improvements
The CLASS Tool
Fiscal Condition
Goal of This NPRM
II. Statutory Authority To Issue NPRM
III. Section by Section Discussion of Proposed Changes to the
Designation Renewal System
1304.11(b) School Readiness Goals
1304.11(c) CLASS Condition
1304.11(e) Suspension by OHS
1304.11(g) Fiscal Condition
1304.12 Grantee Reporting Requirements Concerning Certain
Conditions
1304.15 Designation Request, Review and Notification Process
1305 Definitions
Effective Dates
IV. Regulatory Process Matters
Regulatory Flexibility Act
Unfunded Mandates Reform Act
Treasury and General Government Appropriations Act of 1999
Federalism Assessment Executive Order 13132
Congressional Review
Paperwork Reduction Act of 1995
Regulatory Planning and Review Executive Order 12866, Executive
Order 13563, and Executive Order 13771
V. Regulatory Impact Analysis
I. Background
Designation Renewal System
Since its inception in 1965, Head Start has been a leader in
helping children from low-income families reach kindergarten more
prepared to succeed in school. Through the Improving Head Start for
School Readiness Act of 2007 (the 2007 Reauthorization) amending the
Head Start Act (the Act), Congress required the Department of Health
and Human Services to ensure these children and
[[Page 39997]]
their families receive the highest quality services possible. In
support of that requirement, the 2007 Reauthorization directed the
Secretary to establish the DRS to: (1) Identify Head Start grantees
that are delivering high quality services and can receive funding
noncompetitively for a five-year period and grantees that will be
required to compete for continued funding and (2) to transition all
grants from indefinite grants to five-year grant periods.
The DRS requires grantees to compete for continued funding if they
meet one or more of the following seven conditions:
(1) One deficiency under section 641A(c)(1)(A), (C), or (D) of the
Act;
(2) failure to establish, use, and analyze children's progress on
agency established School Readiness goals;
(3) scores below minimum thresholds in any of the three domains of
the CLASS or in the lowest 10 percent in any CLASS domain out of the
grantees monitored in a given year unless the grantee's score is equal
to or above the standard of excellence for that domain;
(4) revocation of a license to operate a center or program;
(5) suspension from the program;
(6) debarment from receiving federal or state funds or disqualified
from the Child and Adult Care Food Program; or,
(7) an audit finding of at risk for failing to continue as a
``going concern.''
We did not revise the DRS when we issued the new Head Start Program
Performance Standards (performance standards) in 2016 because the
transition period to five-year grants was not complete.
As required in Section 641(c)(8) of the Head Start Act (42 U.S.C.
9836(c)(8)), ACF has been regularly analyzing data on the
implementation of the DRS and on those grantees required to compete. In
2016, ACF's Office of Planning, Research, and Evaluation published a
report of its DRS evaluation, titled ``Early Implementation of the Head
Start Designation Renewal System,'' which examined how the system is
addressing its goals of transparency, validity, and reliability.\1\ The
study further explored whether DRS is identifying lower-performing
grantees for competition and how DRS might support program quality
improvement.
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\1\ https://www.acf.hhs.gov/opre/research/project/evaluation-of-the-head-start-designation-renewal-system-drs.
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Request for Comment on Head Start Designation Renewal System
Improvements
We published a request for comment in the Federal Register in
December 2017 to solicit input from the public on the implementation of
DRS broadly, including the implementation of CLASS and other conditions
of DRS. See 82 FR 57905. We proposed consideration of the following:
(1) Remove lowest 10 percent in any of the three CLASS domains;
(2) Increase Emotional Support threshold from 3 to 5;
(3) Increase Classroom Organization threshold from 4 to 5;
(4) Allow the Secretary to set Instructional Support (IS) threshold
each year using CLASS scores from previous year's monitoring data;
(5) How Instructional Support and other thresholds could be set
and/or adjusted to incentivize continuous program improvement; and
(6) Administrative changes to DRS to more broadly include ways we
can incentivize robust competition with new applicants, facilitate
smooth transitions when there is a new grantee as a result of
competition, and improve the DRS processes.
We received 145 unique comments in response to the Federal Register
notice. It is important to note that one submission had thousands of
cosigners from organizations such as regional and state Head Start
associations, grantees, community partners, and national organizations.
All comments are available for public view at www.regulations.gov, and
we briefly summarize them here.
Some commenters recommended we no longer use CLASS in DRS. Nearly
all commenters supported removal of the lowest 10 percent CLASS
condition. Most commenters mentioned the lowest 10 percent CLASS
condition resulted in a moving target for grantees. A majority
supported the use of absolute thresholds and keeping the current
thresholds in each domain. Many commenters suggested using CLASS scores
from two reviews (e.g., two CLASS reviews) or an opportunity to show
improvement before designating grantees for competition. The tribal
community suggested establishing mandatory cultural and linguistic
awareness training for CLASS observers to be developed and implemented
in consultation with tribal nations. Commenters offered various
approaches or systems for using CLASS scores in determining designation
status, all of which had varying levels of complexity from an
implementation perspective.
We believe the DRS has driven increased accountability and improved
the quality of services Head Start programs are providing to children
and families. The DRS evaluation provides evidence that DRS is
incentivizing grantees to engage in a range of quality improvement
activities.\2\ In addition, the Head Start Family and Child Experiences
Survey (FACES) report from 2016 indicates improvements in Head Start
classroom quality from 2006 to 2014, including the time during the
implementation of DRS.\3\ However, concerns with the fiscal audit
finding and the way CLASS is implemented have become increasingly
clear.
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\2\ https://www.acf.hhs.gov/opre/research/project/evaluation-of-the-head-start-designation-renewal-system-drs.
\3\ Aikens, N., Bush, C., Gleason, P., Malone, L., & Tarullo, L.
(2016). Tracking Quality in Head Start Classrooms: FACES 2006 to
FACES 2014. Washington, DC: U.S. Department of Health and Human
Services.
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For reasons established in this document, we only propose targeted
changes to the CLASS condition and the audit-based fiscal condition.
The current CLASS condition competes grantees who fall below the 10
percent requirement in any of the three CLASS domains, which often
results in grantees being designated for competition that are
demonstrating high quality in Emotional Support and Classroom
Organization, while grantees who fall below the mid-range for quality
in Instructional Support are not always identified for competition. The
existing fiscal condition, under-identifies grantees with fiscal
challenges documented in their annual audit data and underutilizes
important annual audit data. Consequently, we believe revisions to
these conditions are necessary to ensure we identify those communities
where competition is the most warranted, more effectively hold grantees
accountable, and increase the transparency of DRS.
In the request for comments, we received a few comments related to
the deficiency condition. While ACF is not proposing a change to the
deficiency condition in this NPRM, we are seeking comment about whether
we should consider a change to the single deficiency trigger. ACF
continues to stand by its policy that one deficiency is serious enough
to cause a grantee to compete for continued funding. However, we have
heard concerns that the single deficiency trigger is too stringent and
causes competition for grantees that are high quality and had an
isolated issue. We believe this NPRM provides another opportunity for
stakeholders to provide input to ACF on this issue. We specifically
seek comment on whether the condition should be two or more
deficiencies rather than a single deficiency.
[[Page 39998]]
The CLASS Tool
After extensive expert feedback it was determined that CLASS is the
only existing instrument that meets the statutory requirements in
Section 641A(c)(2)(F) of the Act. The CLASS is a research-based tool
that measures teacher-child interaction on a seven-point scale in three
broad domains: Emotional Support, Classroom Organization, and
Instructional Support. Emotional Support assesses the degree to which
teachers establish and promote positive classroom climates through
everyday interactions. Classroom Organization assesses teachers'
productivity, how they organize classroom routines and learning
formats, and how they manage children's behaviors. Instructional
Support assesses the ways in which teachers implement the curriculum to
effectively promote cognitive and language development.\4\
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\4\ Hamre, Bridget K., La Paro, Karen M., & Pianta, Robert C.
(2009). Classroom Assessment Scoring System Manual Pre-K. Baltimore,
MD: Paul H. Brooks Publishing Co, Inc.
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The CLASS was developed in response to research findings indicating
the importance of teacher-child interactions as a demonstrated measure
of classroom quality and as a means to promote children's development
and learning. The tool is administered by trained and certified
observers using a specific protocol for scoring. Observers assess how
teachers interact with children in classrooms and rate each CLASS
domain on a 7-point scale, from low to high. Observers assign a score
of 1 to 2 (low-range of quality) when teachers poorly manage children's
behaviors, when instruction is purely rote, or when there is little
teacher-child interaction. Observers assign a score of 3 to 5 (mid-
range of quality) when teachers show a mix of effective interactions
with periods when interactions are either not effective or are absent.
Observers assign a score of 6 to 7 (high-range of quality) if teachers
show consistently effective teacher-child interactions throughout the
observation period.\5\
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\5\ Hamre, Bridget K., La Paro, Karen M., & Pianta, Robert C.
(2009). Classroom Assessment Scoring System Manual Pre-K. Baltimore,
MD: Paul H. Brooks Publishing Co, Inc.
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Fiscal Condition
Section 641(c)(1) of the Head Start Act requires DRS to include, as
a condition for competition, a criteria based on grantee's annual
audits. The current DRS fiscal condition requires competition when a
grantee is at risk for failing to continue as a going concern, meaning
an organization is facing threat of liquidation. As defined in the
performance standards, going concern means an organization that
operates without the threat of liquidation for a period of at least 12
months. This finding is a very serious fiscal finding related to the
viability of an organization. Based on our analysis of the last six
cohorts, this condition has identified very few grantees for
competition.
The Head Start Act and regulations have required annual audits of
grantees for decades. The performance standards conform to the new
Uniform Administrative Requirements for HHS Awards (45 CFR part 75)
that requires every federal grantee receiving $750,000 or more to
complete an annual audit and report the results to the Federal Audit
Clearinghouse (FAC). 45 CFR 75.501(a). This requirement applies to a
majority of Head Start grantees. Qualified independent audit
professionals prepare annual audit reports and file the reports with
the FAC. Once an audit report is filed with the FAC, it is final and
available to the public. If there are questioned cost or findings in
the audit report, ACF implements its audit resolution process to ensure
the grantee has addressed any issues. The audit resolution process may
require the grantee to implement new fiscal policies and procedures to
resolve an issue. Further, the process may require resolution of any
questioned costs or any disallowances.
Audit findings according to the Uniform Administrative Requirements
for HHS Awards at 45 CFR 75.2 mean ``deficiencies which the auditor is
required by 75.516(a) to report in the schedule of findings and
questioned costs.'' An independent auditor evaluates an entity based on
a set of several elements related to management of financial systems
and prudent fiscal decision making, or internal control.
Internal control, as defined in accounting and auditing, is a
process for assuring an organization's objectives in operational
effectiveness and efficiency, reliable financial reporting, and
compliance with laws, regulations, and policies. The elements of audit
findings include significant deficiencies or material weaknesses in
internal control; questioned costs, compliance with federal and other
statutes and regulations; and known or likely fraud.
In 2005, the United States Government Accountability Office (GAO)
issued a report that identified risks in ACF oversight of Head Start
grantees financial management weaknesses and recommended considering
competing grantees showing fiscal management and other risks.\6\
Subsequently, Congress required that OHS use audit findings in making
DRS determinations. The Secretary's Advisory Committee on Re-
designation of Head Start Grantees recommended that grantees that are
considered to be fiscally ``high risk'' be required to compete.\7\
While ACF no longer uses the ``high risk'' designation for grantees,
its mention in the report highlights the importance the Advisory
Committee placed on mitigating fiscal risk.
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\6\ GAO (2005). `Head Start: Comprehensive Approach to
Identifying and Addressing Risks Could Help Prevent Grantee
Financial Management Weaknesses (GAO-05 176). Washington, DC: U.S.
Government Accountability Office. http://www.gao.gov/new.items/d05176.pdf.
\7\ HHS (2008). A System of Designation Renewal of Head Start
Grantees: Report of the Secretary's Advisory Committee on Re-
designation of Head Start Grantees. https://eclkc.ohs.acf.hhs.gov/report/system-designation-renewal-head-start-grantees-report-secretarys-advisory-committee-re.
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In 2010, the DRS Notice of Proposed Rulemaking proposed a two part
fiscal condition that included ``going concern'' and ``material
weakness.'' 75 FR 57704, 57717. Commenters responding to the NPRM
stated a material weakness finding could represent a minor problem and
suggested that we look instead for a pattern of fiscal challenges. 76
FR 70010, 70021. As described in the Section-by-Section Discussion, we
believe that a more comprehensive look at the audit report would
identify patterns of fiscal challenges and more accurately identify
grantees for competition.
Goal of This NPRM
We propose changes to the CLASS condition and the fiscal condition
related to audit findings to ensure we identify those communities where
competition is the most warranted, more effectively hold grantees
accountable, and increase the transparency of DRS. For the CLASS
condition, our goals are to ensure we are not competing grantees
demonstrating high quality in Emotional Support and Classroom
Organization, to compete grantees who have Instructional Support scores
that fall below the mid-range of quality, and to create meaningful
competition that maximizes our resources and drives quality
improvement. For the fiscal condition, our goal is to broaden our use
of information about a grantee's fiscal processes, financial
management, and fiscal systems by incorporating additional audit
findings to ensure ACF better identifies grantees with fiscal
challenges for competition. The additional technical revisions to this
subpart will not alter the substance of the regulation, but will ensure
the
[[Page 39999]]
language of the Head Start requirements are clear, updated,
streamlined, and transparent to the public.
II. Statutory Authority To Issue NPRM
We publish this NPRM under the authority granted to the Secretary
of Health and Human Services by sections 641, 644(c), 645A(b)(12), and
647 of the Act (42 U.S.C. 9836, 9839, 9840a, 9842) as amended by the
Improving Head Start for School Readiness Act of 2007 (Pub. L. 110-
134). Generally, under these sections, the Secretary is required to
develop a system for designation renewal. The system must determine if
a grantee delivers high-quality comprehensive services that meet
families' educational, health, nutritional, and social needs and to
determine if the grantee meets program and financial management
requirements.
III. Section-by-Section Discussion of Proposed Changes to the
Designation Renewal System
We propose the following changes to the Head Start regulations,
under subpart B of part 1304, Federal Administrative Procedures, at
Sec. Sec. 1304.11, 1304.12, and 1304.15 and part 1305, Definitions. We
believe these changes will ensure the regulations are accurate and up
to date; and that they clarify and streamline the language of the
existing regulation. For example, we propose to remove all references
to December 9, 2011, the effective date of the DRS regulation, because
that date has passed. We also propose to remove any references to the
transition to five-year grants since all grantees have been evaluated
through DRS and transitioned to five-year grants.
Additionally, we propose substantive changes to conditions in
Sec. Sec. 1304.11(c) and (g) to ensure we identify grantees where
competition is most warranted, more effectively hold grantees
accountable, and increase the transparency of DRS. Specifically, we
propose to raise the absolute threshold for each CLASS domain and
remove the lowest 10 percent criterion. We also propose to add a second
criterion to the fiscal condition related to audit findings.
Section 1304.11 Basis for Determining Whether a Head Start Agency Will
Be Subject to an Open Competition
Section 1304.11 establishes the conditions that require a grantee
to compete for continued funding under the DRS. Congress established
the basis for the DRS and we published a final rule codifying these
requirements in 2011. If a grantee meets any one of the seven
conditions described in this section, an open competition is conducted
to determine whether the incumbent grantee or another entity in the
community is best qualified to run the Head Start program. This section
institutes effective dates for various conditions. Since all grantees
have transitioned through DRS and now have five-year grant periods, the
various effective dates are no longer relevant. Throughout this part of
the NPRM, we describe revisions to remove the outdated language.
1304.11(b) School Readiness Goals
This paragraph establishes requirements for grantees developing and
using school readiness goals as required in the Act. Grantees are
required to establish school readiness goals, aggregate and analyze
child-level assessment data three times a year, and analyze individual
child-level assessment data to inform progress on the goals. We propose
to maintain this requirement and only remove dates that are no longer
relevant. Paragraph (b)(1) sets ``December 9, 2011'' as the date by
which grantees must establish school readiness goals. We propose to
remove the phrase, ``After December 9, 2011'' because it is outdated.
In paragraph (b)(1)(ii), we propose to remove the phrase ``Birth to
Five Head Start Child Outcomes Framework,'' and replace it with ``Head
Start Early Learning Outcomes Framework: Ages Birth to Five.'' In 2015,
OHS issued a new framework to include children from birth to age five.
Additionally, the new framework now has indicators of what children
should know and be able to do at 36 and 60 months of age and the
developmental progressions that leads to those outcomes.
For the same reason discussed earlier, we propose to remove the
phrase, ``After December 9, 2011'', in paragraph (b)(2).
1304.11(c) CLASS Condition
This paragraph establishes the use of the CLASS: Pre-K tool to
assess a grantee's designation status. This condition is a two-part
criterion that consists of both an absolute threshold and a relative
threshold. With the absolute threshold, grantees must compete if their
CLASS scores fall below the following minimum quality thresholds for
each of the three domains: 2 for Instructional Support, 3 for Classroom
Organization, and 4 for Emotional Support. The relative threshold
requires grantees to compete for continued funding if their average
scores across classrooms fall in the lowest 10 percent on any of the
three CLASS domains for grantees observed in that year. Additionally,
the 10 percent criteria includes a high-quality threshold, or
``standard of excellence,'' across all domains that would exempt
grantees that score a 6 or above from competition.
Based on our experience implementing the CLASS condition since
2012, analysis of our monitoring data, findings of the implementation
evaluation, and comments we received in response to the December 2017
Federal Register notice, we have determined three challenges with the
current condition. First, the results of the lowest 10 percent
criterion show we are identifying relatively high performing grantees
demonstrating high quality in Emotional Support and Classroom
Organization to compete for continued funding, but we are not
identifying some grantees with Instructional Support scores that fall
below the mid-range of quality.
Second, the relative threshold in the current CLASS condition means
there is no clear target grantees can aim to achieve. Instead of a
transparent system where grantees know the standard for which they are
being held accountable, a relative threshold results in informing
grantees of the expectations after all grantees have been reviewed. The
lowest 10 percent criterion also results in a moving target where the
expectation of quality changes year to year. The cut-off for a group of
grantees monitored in one year is different from the standard for
another group of grantees monitored in another year. Recent cut-off
scores are as follows; in 2015: Emotional Support 5.6563; Classroom
Organization 5.2708; Instructional Support 2.2262; in 2016: Emotional
Support 5.5952; Classroom Organization 5.2500; Instructional Support
2.2222; in 2017: Emotional Support 5.7024; Classroom Organization
5.3264; Instructional Support 2.3095.\8\ This lack of transparency was
a concern highlighted in ACF's evaluation of DRS.\9\
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\8\ https://eclkc.ohs.acf.hhs.gov/data-ongoing-monitoring/article/national-overview-grantee-classr-scores-2017.
\9\ https://www.acf.hhs.gov/opre/research/project/evaluation-of-the-head-start-designation-renewal-system-drs.
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Third, the current condition creates implementation problems. To
determine which grantees score in the lowest 10 percent each year, we
must complete all monitoring reviews before we can analyze the full set
of data and identify the 10 percent cut-off point. During this waiting
period, Head Start programs know their CLASS scores, but do not know
whether they are in the lowest 10 percent and will be required to
compete.
[[Page 40000]]
In the DRS evaluation, programs reported uncertainty associated with
the waiting period and not knowing whether they would be designated for
competition has led to stress and turnover among staff. We know
stability and consistency from nurturing responsive caregivers are
important for children's development. Research suggests stress
compromises the quality of teacher-child interactions and staff
turnover disrupts continuity of care and reduces the stability programs
can provide to children.10 11
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\10\ Whitaker, R.C., Dearth-Wesley, T., & Gooze, R.A. (2015).
Workplace stress and the quality of teacher-children relationships
in Head Start. Early Childhood Research Quarterly, 30(1A), 57-69.
\11\ Cassidy, D.J., King, E.K., Wang, Y., Lower, J.K., &
Kintner-Duffy, V.L. (2017). Teacher work environments are toddler
learning environments: Teacher professional well-being, classroom
emotional support, and toddlers' emotional expressions and
behaviours. Early Child Development and Care, 187(11), 1666-1678.
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Given the emphasis on teacher-child interactions as a critical
ingredient of a high quality classroom experience, the CLASS tool has
been the observational tool used to address research questions in many
studies. Evidence suggests children learn more in well-organized
classroom environments that are characterized by sensitive and
responsive interactions that promote autonomy, conversation, literacy
skills, and executive functioning.\12\ Children gain these skills when
they experience higher quality teacher-children interactions and
instruction.\13\ Research suggests there is a ``threshold range,'' \14\
or ``active range,'' \15\ where we begin to see outcomes related to
children's school readiness. For example, research demonstrates that
when teachers were more responsive and sensitive and were rated as
providing high-quality emotional support, children showed better social
adjustment and fewer behavior problems.\16\
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\12\ Hatfield, B.E., Burchinal, M.R., Pianta, R.C., & Sideris,
J. (2016). Thresholds in the association between quality of teacher-
child interactions and preschool children's school readiness skills.
Early Childhood Research Quarterly, 36, 561-571.
\13\ Ibid.
\14\ National Center for Research on Early Childhood Education
In Focus: Increasing knowledge in early childhood (February 2010,
NCRECE in Focus Vo. 1 Issue 2). Learning how much quality is
necessary to get good results for children.
\15\ Burchinal, M., Xue, Y., Tien, H., Auger, A., & Mashburn
A.J. (2011, March). Secondary data analysis looking for thresholds
in child care quality. PowerPoint presentation at the Biennial
Meeting of the Society for Research in Child Development, Montreal,
Canada.
\16\ National Center for Research on Early Childhood Education
In Focus: Increasing knowledge in early childhood (February 2010,
NCRECE in Focus Vo. 1 Issue 2). Learning how much quality is
necessary to get good results for children.
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Additionally, children showed more advanced academic and language
skills when their preschool teachers provided instruction rated in the
mid- to high-quality range.\17\ In addition to suggesting a ``threshold
range'' rather than a specific threshold, there is also general support
from the research that classroom quality needs to be out of the low-
range (above a 2) to support children's development.\18\
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\17\ Ibid.
\18\ HHS (2012) report from the Secretary's Advisory Committee
on Head Start Research and Evaluation. https://www.acf.hhs.gov/sites/default/files/opre/eval_final.pdf.
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Lastly, there is no national average for CLASS scores, but we can
look to numerous studies and settings to tell us how early childhood
preschool classrooms typically score across the CLASS domains. Aside
from Head Start monitoring, 19 states use CLASS as the classroom
observation tool in their state Pre-K programs,\19\ and 23 states have
adopted it as part of their Quality Rating and Improvement System.\20\
We acknowledge there are some differences in the way CLASS is
implemented across different settings (e.g., the number of classroom
observations, whether the scores are averaged at the program or
classroom level), but the data are nonetheless useful for understanding
the landscape of how classrooms and programs score on the CLASS.
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\19\ Friedman-Krauss, A.H., Barnett, S.W., Weisenfeld, G.G.,
Richard Kasmin, R., Nicole DiCrecchio, N., & Horowitz, M. (2018).
The state of preschool 2017: State preschool yearbook, Appendix A.
New Brunswick, NJ: National Institute for Early Education Research.
\20\ Teachstone. CLASS: A Leading QRIS Standard. Retrieved from
https://teachstone.com/class/.
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We know the average preschool classroom scores are higher in the
domains of Emotional Support and Classroom Organization (5.0-6.0) than
in the domain of Instructional Support (2.0-3.0).21 22 CLASS
scores in the three domains appear consistent across a variety of
settings, even when settings include children of diverse backgrounds
and income levels.23 24 25 26 27 While these data do not
point to the ``right'' threshold, it provides the range in which
classrooms and programs typically score.
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\21\ Early, D., Barbarin, O., Bryant, D., Burchinal, M., Chang,
F., Clifford, R., Crawford, G. & Weaver, W. & Howes, C. & Ritchie,
S., & Kraft-Sayre, M., & Piata, B., & Barnett, S. (2005). Pre-
Kindergarten in Eleven States: NCEDL's Multi-State Study of Pre-
Kindergarten & Study of State-Wide Early Education Programs (SWEEP).
\22\ Moiduddin, E., Aikens, N., Tarullo, L., West, J., Xue, Y.
(2012). Child Outcomes and Classroom Quality in FACES 2009. OPRE
Report 2012-37a. Washington, DC: Office of Planning, Research and
Evaluation, Administration for Children and Families, U.S.
Department of Health and Human Services.
\23\ Early, D., Barbarin, O., Bryant, D., Burchinal, M., Chang,
F., Clifford, R., Crawford, G. & Weaver, W. & Howes, C. & Ritchie,
S., & Kraft-Sayre, M., & Piata, B., & Barnett, S. (2005). Pre-
Kindergarten in Eleven States: NCEDL's Multi-State Study of Pre-
Kindergarten & Study of State-Wide Early Education Programs (SWEEP).
\24\ Burchinal, M., Mokrova, I., Bratsch-Hines, M., Peisner-
Feinberg, E. (2018). Pre-K classroom characteristics and Pre-K gains
of children living in rural areas. PowerPoint presentation at the
National Research Conference on Early Childhood on the Early
Learning Network Year 1 Results: Preschool Educational Practices and
Child Outcomes.
\25\ Moiduddin, E., Aikens, N., Tarullo, L., West, J., Xue, Y.
(2012). Child Outcomes and Classroom Quality in FACES 2009. OPRE
Report 2012-37a. Washington, DC: Office of Planning, Research and
Evaluation, Administration for Children and Families, U.S.
Department of Health and Human Services.
\26\ Tout, K., Cleveland, J., Li, W., Starr, R., Soli, M. &
Bultinck, E. (2016). The Parent Aware Evaluation: Initial Validation
Report. Minneapolis, MN: Child Trends.
\27\ Swanson, C., Carran, D., Guttman, A., Wright, T., Murray,
M., Alexander, C., & Nunn, J. (2017). Maryland EXCELS Validation
Study. Johns Hopkins University, Baltimore, Maryland.
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For these reasons, we propose to eliminate the lowest 10 percent
criterion of the CLASS condition and raise the absolute thresholds to
2.5 for Instructional Support, 5 for Classroom Organization, and 5 for
Emotional Support which we believe will improve quality, address all
the concerns previously identified and ensure all grantees are held to
the same standard year to year. Since research does not specify an
exact threshold for each domain, our proposal uses guidelines from the
CLASS manual to set thresholds that align with the broad research
principle that programs need to be out of the low-range on quality
(i.e., above a 2). These proposed thresholds are higher than our
current minimums, and we believe this would strengthen the quality of
teacher-child interactions in Head Start classrooms.
In paragraph (c), we propose to remove the colon ``:'' from the
stem sentence. In paragraph (c)(1), we propose to remove the phrase
``After December 9, 2011,'' because it is outdated and we propose to
move the remaining text to the stem sentence. We propose to re-
designate paragraph (c)(1) as paragraph (c) and re-designate paragraphs
(i) through (iii) as paragraphs (1) through (3).
In new paragraph (c)(1), for the minimum threshold for Emotional
Support, we propose to remove ``4'' and replace it with ``5.'' We
believe this change will increase the standard of quality and move
programs closer to the high-quality range. At a score of 5, we would
expect to see with more frequency and consistency the behaviors and
interactions that matter for
[[Page 40001]]
children's social emotional development. For example, we would see more
evidence of warm and supportive relationships between the teacher and
child; more examples of teacher responsiveness and sensitivity to
children's needs; and more interactions where the teacher supports the
child's interests, motivations, and autonomy.
In new paragraph (c)(2), for Classroom Organization, we propose to
remove ``3'' and replace it with ``5.'' Like the change we propose as
the minimum threshold for Emotional Support, we believe this proposed
change will also set a much higher standard that moves programs closer
to the high-quality range. At a score of 5, we believe we would see
many more consistent examples of classroom processes and management
that support children's learning. For example, we would see more
instances of clear behavioral expectations and use of effective methods
to prevent and redirect misbehavior. We would see more teacher
preparation for activities, more evidence of classroom routines, and
more ways in which the teacher maximizes children's engagement and
interest.
In new paragraph (c)(3), for Instructional Support, we propose to
remove ``2'' and replace it with ``2.5.'' We believe this proposed
change would set an expectation that moves programs out of the low
range and toward the mid-range of quality. At this higher score, we
would expect to see with greater frequency more of the behaviors and
interactions that matter for children's learning. For example, we would
expect to see more activities that encourage analysis and reasoning,
more use of advanced language, and more evidence of teachers expanding
on children's learning. Setting the threshold at 2.5 would drive
quality improvement and set an achievable and transparent target.
Finally, we propose to remove the existing paragraph (c)(2) in its
entirety to eliminate the lowest 10 percent criterion and the standard
of excellence. With the proposed use of absolute thresholds, this
paragraph is no longer applicable. Additionally, we propose to replace
this paragraph with the newly designated paragraph (c)(2) to reflect
the proposed new threshold for Classroom Organization.
1304.11(e) Suspension by OHS
Paragraph (e) requires a grantee to compete for continued funding
if they have been suspended by OHS. When DRS became effective, grantees
had an opportunity to appeal a suspension by OHS. However, the
grantees' opportunity to appeal a suspension was removed in the
performance standards, so we propose to remove references to appeal.
For this reason, we are updating this paragraph but not changing the
requirement.
Specifically, we propose to remove the phrase ``there is a pending
appeal and'' in the second sentence. In the third sentence of paragraph
(e), we propose to add the phrase ``and the suspension remains in
place,'' and remove the phrase, ``regardless of the appeal status.''
Additionally, we propose to remove the incorrect reference to
``1304.16,'' and replace it with ``1304.15.''
1304.11(g) Fiscal Condition
Currently, the fiscal condition of DRS requires a grantee to
compete if an audit has indicated the grantee is at risk of ceasing to
be a going concern, in other words at risk of liquidation, in the near
future. The going concern condition under-identifies grantees with
fiscal challenges documented in their annual audit data. Based on our
analysis of the last six DRS cohorts, this condition has identified
very few grantees for competition. However, our analysis of grantee
annual audit reports shows fiscal concerns related to grantees' Head
Start funds is a more prevalent issue. For example, numerous grantees
had audit findings related to their Head Start grant in two or more
audits during their five-year grant period. In focusing only on fiscal
viability rather than broader audit findings in DRS, we are missing an
opportunity to compete grantees who have other strong indicators of
potential fiscal risks. We believe grantees with indicators pointing to
a lack of fiscal viability (going concern) must be required to compete,
as well as grantees with challenges in fiscal capacity identified
before their viability is at risk. Specifically, the current condition
does not capture valuable information to inform us of an organization's
fiscal processes, systems and management. Since the implementation of
this condition in 2011, it has become increasingly evident that we need
an earlier predictor to ensure we identify and mitigate potential
fiscal risks to an organization prior to facing the threat of a
liquidation.
Fiscal challenges may result in operational challenges that create
reduced program quality and stability of services to the children and
families grantees serve. While we can only speculate on how many
grantees would be impacted by this revised condition, we have
experiential knowledge that it is best to prevent fiscal emergencies.
In recent years, multiple grantees have been terminated or relinquished
their grants due to their inability to correct fiscal problems.
Unaddressed fiscal challenges can lead to a grantee's inability to
purchase supplies, pay teachers, or ultimately serve children. If a
Head Start grantee is terminated or relinquishes the grant due to a
fiscal crisis, a disruption in services to children and families may
occur. Therefore, we want to compete grantees before their fiscal
challenges escalate. Competition allows the incumbent grantee and other
entities in the community an opportunity to demonstrate they are best
qualified fiscally and programmatically to run the Head Start program.
Each community deserves to have a fiscally responsible grantee
administering the Head Start program.
Therefore, we propose to add a second criterion to the existing
condition based on grantees' annual independent audit findings. In
examining options for the proposed condition, we worked with the ACF
Office of Grants Management and other ACF divisions. Initially, we
considered requiring grantees to compete if they were not deemed a low
risk auditee in their audit filing. The determination of low risk
auditee considers elements that indicate fiscal soundness, strong
internal controls, and prudent financial management. A low risk
determination includes the following elements: (1) Less than five
percent total costs questioned, (2) continues as a going concern, and
(3) no material weaknesses. A ``material weakness'' is a deficiency, or
a combination of deficiencies, in internal control over financial
reporting, such that there is a reasonable possibility that a material
misstatement of the entity's annual or interim financial statements
will not be prevented or detected on a timely basis.
After analyzing this option, we decided that a not low risk
determination could indicate potential fiscal risk at the agency level.
However, it does not necessarily indicate major ongoing problems in
financial management of a Head Start grant. Instead, we propose to
focus on audit findings specifically related to the Head Start grant.
We believe a grantee should be required to compete if it had any audit
findings associated with Head Start funds in two or more annual audit
reports within the first three fiscal years of its five-year grant
cycle. We believe adding this second criterion to the fiscal condition
addresses the current weaknesses in two ways.
First, examining additional audit data gives a more comprehensive
picture of the grantee's fiscal management
[[Page 40002]]
capacity relative to Head Start funding. This process identifies
grantees with known multiple fiscal weaknesses and requires them to
compete for continued funding. Using additional audit findings allows
us to assess more information about potential risk to Federal Head
Start funds or Head Start property caused by ineffective financial
management systems. These findings demonstrate a pattern and indicate
significant fiscal concern that should require these grantees to
compete. This Head Start-specific use of audit findings in DRS
determinations allows us to identify indicators of fiscal management
weaknesses and oversight risks earlier and consistently in DRS.
Second, going concern does not directly target fiscal challenges in
managing the Head Start grant. We believe the proposed additional
criterion would ensure that we use specific Head Start data in making
DRS determinations. Many Head Start grantees manage grants from
multiple Federal agencies and the annual audit report encompasses all
the programs run by a grantee. We would only consider audit findings in
any Head Start grants for purposes of DRS to specifically mitigate
fiscal risks to the Head Start program.
Our proposal changes the timeframe for using a finding of going
concern but maintains the existing requirement for competition. Instead
of competing a grantee that has been found at risk of failing to be a
going concern in the previous 12 months, we believe that a finding of
going concern at any time during the five-year grant period is
significant and we revise the regulatory text accordingly.
This proposed revision to the fiscal condition does not impose a
new requirement on Head Start grantees. Conversely, it allows OHS to
use existing requirements and data more effectively for ongoing
oversight and improvement of grantees' fiscal systems. We believe this
proposal is in line with the goal of DRS to promote accountability and
continuous improvement of grantees. Competition is not an adverse
action. It requires the current grantee to demonstrate that renewal of
their grant is warranted, while providing other entities in the
community an opportunity to apply for funding.
Specifically, we propose to revise paragraph (g) and add new
paragraphs (g)(1) and (g)(2). The proposed new paragraph (g) outlines
the two fiscal criteria and would read as follows, ``An agency meets
one of the two criteria of this fiscal requirement:'' Existing
paragraph (g), the current criteria requiring a grantee to compete if
it is at risk of failing to be a going concern, will be redesignated as
(g)(1). We propose to amend new paragraph (g)(1) by changing the
timeframe from within the twelve months preceding the designation
determination to a timeframe within the five-year grant period.
Proposed new paragraph (g)(2) will establish a second fiscal
criterion that a grantee with audit findings associated with its Head
Start funds (CFDA 93.600) in two or more audit reports in the first
three years of the grant period will be required to compete.
1304.12 Grantee Reporting Requirements Concerning Certain Conditions
This section requires grantees to report to OHS when certain events
have occurred. Grantees are required to report to OHS within 10 working
days in the case of the following events: (1) Revocation of a license;
(2) bankruptcy; (3) debarment; and (4) audit finding of at risk for
ceasing to be a going concern. We do not propose any policy changes,
but propose to remove dates that are no longer relevant. We propose to
remove paragraph 1304.12 (a) in its entirety and in paragraph (b) we
propose to remove the phrase ``following December 9, 2011.'' Because
paragraph (a) is removed, we propose to redesignate paragraphs (b)(1)
through (4) as paragraphs (a), (b), (c), and (d) respectively.
1304.15 Designation Request, Review and Notification Process
This section creates the processes for a grantee requesting non-
competitive renewal, for OHS determining designation, and for OHS
notifying grantees of their designation renewal status. In this
section, we propose to remove the language that refers to the
transition to five-year grants and the process before and after the
transition. This language is no longer relevant as all grantees have
transitioned through DRS to five-year grants. Our proposal seeks to
simplify, clarify, and update this section. We also revise language to
make it clear that only data from the grantee's current grant period
will be reviewed for designation determinations. In addition, we no
longer send communication to grantees via certified mail and therefore
we propose to remove that language.
We propose to remove paragraph (a)(1) entirely. In existing
paragraph (a)(2), we propose to remove the phrase ``After the
transition period,'' at the beginning of the first sentence because it
is out of date. Next, we propose to redesignate paragraph (a)(2) as
paragraph (a). The newly redesignated paragraph (a) will read:
``Grantees must apply to be considered for Designation Renewal. A Head
Start or Early Head Start agency wishing to be considered to have its
designation as a Head Start or Early Head Start agency renewed for
another five-year period without competition must request that status
from ACF at least 12 months before the end of their five-year grant
period or by such time required by the Secretary.'' In paragraph (b),
we propose to add the phrase ``during the current grant period,'' at
the end of the sentence since all grantees are now on five-year grant
periods and only data from the current grant period will be reviewed.
We also propose to remove the colon ``:'' and replace it with a period
``.''. We propose to remove paragraphs (b)(1), (2) and (3) in their
entirety because they are out of date.
We propose to amend paragraph (c) by deleting the colon ``:'' at
the end and replacing it with a comma ``,''. At the end of paragraph
(c), we propose to add the phrase ``at least 12 months before the
expiration date of a Head Start or Early Head Start agency's current
grant stating:'' Further, due to the mention of the transition period,
we propose to eliminate paragraphs (c)(1), (c)(2) and (c)(3) entirely.
Consequently, we propose to redesignate paragraph (c)(3)(i) as
paragraph (c)(1) and paragraph (c)(3)(ii) as paragraph (c)(2). In
paragraph (c)(2), we propose to remove the reference to ``(c)(3)(i),''
and replace it with ``(c)(1).''
Section 1305.2 Terms
Section 1305.2 defines the terms used in the performance standards.
We propose to add to Sec. 1305.2 a definition of ``denial of
refunding'' which was referenced in Sec. 1304.13 and accidentally
omitted from the performance standards published in 2016.
Effective Dates: Current Head Start CLASS standards remain in
effect until this NPRM becomes final. We propose for this rule to
become effective with the fiscal year immediately following the
publication of the final rule, but not less than 30 days after the
publication date. We specifically request comments on this proposed
effective date.
IV. Regulatory Process Matters
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA),\28\ as amended by the Small
Business Regulatory Enforcement Fairness Act, requires Federal agencies
[[Page 40003]]
to determine, to the extent feasible, a rule's economic impact on small
entities, explore regulatory options for reducing any significant
economic impact on a substantial number of such entities, and explain
their regulatory approach.
---------------------------------------------------------------------------
\28\ See 5 U.S.C. 605(b).
---------------------------------------------------------------------------
The term ``small entities,'' as defined in the RFA, comprises small
businesses, not-for-profit organizations that are independently owned
and operated and are not dominant in their fields, and governmental
jurisdictions with populations of less than 50,000. Under this
definition, some Head Start grantees may be small entities. However, in
accordance with the RFA, we certify this proposed rule would not have a
significant economic impact on a substantial number of small entities.
In this NPRM, we are not imposing a negative impact on small
entities so we do not need to consider relief. The action we propose
here is intended to ensure accountability for Federal funds is
consistent with the purposes of the Head Start Act and is not
duplicative of other requirements. If you think your business,
organization, or governmental jurisdiction qualifies as a small entity
and this rule would have a significant economic impact on it, please
submit a comment (see ADDRESSES) explaining why you think it qualifies
and how and to what degree this rule would economically affect it.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (UMRA) \29\ was enacted to
avoid imposing unfunded Federal mandates on state, local, and tribal
governments, or on the private sector. Section 202 of UMRA requires
that agencies assess anticipated costs and benefits before issuing any
rule whose mandates require spending in any one year of $100 million in
1995 dollars, updated annually for inflation. In 2019, that threshold
is approximately $154 million. This rule does not contain mandates that
will impose spending costs on state, local, or tribal governments in
the aggregate, or by the private sector, in excess of the threshold.
---------------------------------------------------------------------------
\29\ See 2 U.S.C. 1501 et seq.
---------------------------------------------------------------------------
Treasury and General Government Appropriations Act of 1999
Section 654 of the Treasury and General Government Appropriations
Act of 1999 requires Federal agencies to determine whether a policy or
regulation may negatively affect family well-being. If the agency
determines a policy or regulation negatively affects family well-being,
then the agency must prepare an impact assessment addressing seven
criteria specified in the law.
We believe it is not necessary to prepare a family policymaking
assessment, because the action we propose in this NPRM will not have
any impact on the autonomy or integrity of the family as an
institution. However, if you think this action would have a negative
effect on family well-being, please submit a comment explaining why
(see ADDRESSES).
Federalism Assessment Executive Order 13132
Executive Order 13132 requires Federal agencies to consult with
state and local government officials if they develop regulatory
policies with federalism implications. Federalism is rooted in the
belief that issues that are not national in scope or significance are
most appropriately addressed by the level of government close to the
people. This proposed rule will not have substantial direct impact on
the states, on the relationship between the Federal 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 action does not
have sufficient federalism implications to warrant the preparation of a
federalism summary impact statement.
Congressional Review
The Congressional Review Act (CRA) allows Congress to review
``major'' rules issued by Federal agencies before the rules take
effect.\30\ The CRA defines a major rule as one that has resulted or is
likely to result in (1) an annual effect on the economy of $100 million
or more; (2) a major increase in costs or prices for consumers,
individual industries, Federal, state or local government agencies, or
geographic regions; or (3) significant adverse effects on competition,
employment, investment, productivity, or innovation, or on the ability
of United States-based enterprises to compete with foreign-based
enterprises in domestic and export markets.\31\ This action is not
expected to be a major rule.
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\30\ 5 U.S.C. 802(a).
\31\ 5 U.S.C. 804.
---------------------------------------------------------------------------
Paperwork Reduction Act of 1995
This proposed rule establishes new information collection
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C.
3507). As required by the Paperwork Reduction Act of 1995, we 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 an OMB control number.
----------------------------------------------------------------------------------------------------------------
Average
annual burden Total annual
Requirement Annual respondents per respondent burden hours
(hours)
----------------------------------------------------------------------------------------------------------------
1304.15(a): Each Head Start or Early Head Total grants 2,000, 400 grants 0.25 100
Start agency wishing to be renewed for five impacted annually.
years without competition shall request that
status from ACF. (Existing).
1304.13: Agencies required to compete will 120 Grants...................... 60 7,200
have to complete an application for each
grant competed. (Existing).
Revisions to 1304.11 CLASS and fiscal 14 Grants....................... 60 840
conditions (New).
----------------------------------------------------------------------------------------------------------------
[[Page 40004]]
Annual Burden Hours for Existing Requirements
45 CFR 1304.15(a) requires Head Start grantees to submit a letter
requesting renewal for a new non-competitive 5-year grant and the
estimated burden to submit a letter is 15 minutes for 400 grants. The
non-competitive renewal request consists of filling in a template
letter and sending it through OHS system, so the burden is small. This
calculation assumes in any given year, about one-fifth of all 2,000
grants, or 400 grants, are nearing the end of their current 5-year
project period and therefore a designation under DRS will be made for
these grants. Head Start grantees may hold more than one grant (Head
Start, Early Head Start, EHS--CC Partnership, Migrant Seasonal Head
Start, and American Indian Alaska Native Head Start) and each grant is
considered separately in DRS.
When a Head Start grant meets any of the conditions outlined in 45
CFR 1304.11 the grantee is designated for competition and must submit
an application during competition to be considered for continued
funding as required under 45 CFR 1304.13. The burden to submit an
application is estimated at 60 hours for an estimated 120 grants each
year. This figure assumes that about one-third of the 400 grants, or
120 grants, are required to compete. The total annual burden for
existing requirements is 7,300 hours.
Annual Burden Hours for Proposed Revisions
We estimate the proposed revisions to the CLASS and fiscal
conditions will increase the number of grants required to compete by 70
over five years, or 14 annually. The total burden hours for the
additional 14 grants is 840 hours.
Annual Cost for Existing Requirements
The total annualized cost for existing requirements is estimated at
$345,874. This figure is based on job code 11-9031 and wage data from
May 2017 at $23.69 per hour. To account for fringe benefits and
overhead the rate is multiplied by two, which is $47.38. The estimate
of annualized cost to respondents for hour burden is $47.38 times 7,300
or $345,874; https://www.bls.gov/oes/2017/may/oes119031.htm (child day
care services).
Annual Cost for Proposed Revisions
The total annualized cost for revisions to the CLASS and fiscal
conditions is $47.38 times 840 or $39,799. This is using the same job
code and wage data used for existing requirements.
We invite comments on: (1) Whether the proposed collection of
information is necessary for the DRS, including whether the information
will have practical utility; (2) the accuracy of our estimate of the
burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (3) ways to enhance
the quality, utility, and clarity of the information to be collected;
and (4) ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques, when appropriate and other forms of information technology.
OMB is required to make a decision concerning the collections of
information contained in these proposed 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 proposed
regulations. Written comments to OMB for the proposed information
collection should be sent directly to the following: Office of
Management and Budget, Paperwork Reduction Project, Fax: 202-395-7285,
or [email protected], Attention: Desk Officer for the
Administration for Children and Families. All comments should be
identified with the title, ``NPRM for Proposed DRS Rule.''
Regulatory Planning and Review Executive Order 12866, Executive Order
13563, and Executive Order 13771
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 is supplemental to and reaffirms the principles,
structures, and definitions governing regulatory review as established
in Executive Order 12866, emphasizing the importance of quantifying
both costs and benefits, of reducing costs, of harmonizing rules, and
of promoting flexibility.
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a rule:
(1) Having an annual effect on the economy of $100 million or more in
any 1 year, or adversely and materially affecting a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal governments or communities
(also referred to as ``economically significant''); (2) creating a
serious inconsistency or otherwise interfering with an action taken or
planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order. This
rule is significant under the meaning of section 3(f); accordingly, it
has been reviewed by OMB.
Executive Order 13771, entitled ``Reducing Regulation and
Controlling Regulatory Costs,'' was issued on January 30, 2017 (82 FR
9339, February 3, 2017) and requires that the costs associated with
significant new regulations ``shall, to the extent permitted by law, be
offset by the elimination of existing costs associated with at least
two prior regulations.'' This rulemaking is not expected to be subject
to the requirements of E.O. 13771 because it would result in no more
than de minimis costs.
V. Regulatory Impact Analysis
Estimated Impact of These Proposed Changes on Competition
Based on our analysis of our data, this proposed policy change
would have little to no impact on the number of grantees competing due
to the CLASS condition. The increase in the number of grantees
competing for their Instructional Support scores would offset any
decrease in the numbers of grantees competing for their Emotional
Support or Classroom Organization scores.
Based on our analysis of our fiscal data from 2015 through 2017,
this proposed policy change to the fiscal condition would significantly
increase the number of grantees that would be required to compete due
to the condition. Approximately 70 grantees (four percent) had audit
findings related to its Head Start funds in two or more audit reports
covering years one, two, and there of the current five-year grant
period. By comparison, in the first six cohorts of DRS, very few
grantees competed because of the going concern fiscal condition. We
believe this increase in the number of grantees that will be required
to compete is warranted to ensure we are competing grantees with fiscal
concerns. Competing grantees before known fiscal challenges escalate to
a crisis point could prevent potential termination or relinquishment of
the grant. A disruption in services to
[[Page 40005]]
children and families may occur if a Head Start grantee is terminated
or relinquishes the grant.
These changes proposed in this NPRM would revise policies
promulgated in a prior rule. In the case of CLASS revisions, grantees
have discussed revisions since the initial requirements were
implemented. This proposed regulation does not impose new requirements
on grantees. For the CLASS condition, it streamlines the requirement.
For the fiscal condition, it uses an existing requirement to make
designation renewal decisions.
We do not believe there will be a significant economic impact from
this regulatory action. We estimate that roughly one-third of grantees
reviewed in each review cycle will be affected by the regulation. The
costs of implementation of these rules for the subset of grantees that
would be required to compete in any year (estimated to be approximately
$1,500 for each grantee) is well under $1 million. The estimated $1,500
per-grantee cost is based on the time to complete a competitive
application. It assumes 60 hours per application at a cost of $25 per
hour in staff time. Applications would likely be completed by a
combination of the Head Start Assistant Director and other managers in
the program (i.e., Child Development Manager or Family and Community
Partnership Manager). The average annual salary for these positions is
$50,000 or $25 per hour. As a reference point, even if every grantee
reviewed each year were required to compete, the costs still would not
exceed $100 million.
List of Subjects
45 CFR Part 1304
Audit, Classroom Assessment Scoring System (CLASS), Competition,
Designation renewal system, Education of disadvantaged, Fiscal, Grant
programs, Head Start, Monitoring, Social programs.
45 CFR Part 1305
Administrative practice and procedure.
Dated: June 13, 2019.
Lynn A. Johnson,
Assistant Secretary for Children and Families.
Approved: June 20, 2019.
Alex M. Azar II,
Secretary.
For reasons stated in the preamble, we propose to amend 45 CFR
parts 1304 and 1305 as follows:
PART 1304--FEDERAL ADMINISTRATIVE PROCEDURES
0
1. The authority citation for part 1304 continues to read as follows:
Authority: 42 U.S.C. 9801 et seq.
Subpart B--Designation Renewal
0
2. Revise Sec. 1304.11 paragraphs (b)(1) introductory text,
(b)(1)(ii), (b)(2) introductory text, (b)(2)(i) and (ii), (c), (e), and
(g) to read as follows:
Sec. 1304.11 Basis for determining whether a Head Start agency will
be subject to an open competition.
* * * * *
(b) * * *
(1) Established program goals for improving the school readiness of
children participating in its program in accordance with the
requirements of section 641A(g)(2) of the Act and demonstrated that
such goals:
* * * * *
(ii) Align with the Head Start Early Learning Outcomes Framework:
Ages Birth to Five, state early learning guidelines, and the
requirements and expectations of the schools, to the extent that they
apply to the ages of children participating in the program, and at a
minimum address the domains of language and literacy development,
cognition and general knowledge, approaches toward learning, physical
well-being and motor development, and social and emotional development;
* * * * *
(2) Taken steps to achieve the school readiness goals described
under paragraph (b)(1) of this section demonstrated by:
(i) Aggregating and analyzing aggregate child-level assessment data
at least three times per year (except for programs operating fewer than
90 days, which will be required to do so at least twice within their
operating program period) and using that data in combination with other
program data to determine grantees' progress toward meeting its goals,
to inform parents and the community of results, and to direct
continuous improvement related to curriculum, instruction, professional
development, program design, and other program decisions; and
(ii) Analyzing individual ongoing, child-level assessment data for
all children participating in the program and using that data in
combination with input from parents and families to determine each
child's status and progress with regard to, at a minimum, language and
literacy development, cognition and general knowledge, approaches
toward learning, physical well-being and motor development, and social
and emotional development, and to individualize the experiences,
instructional strategies, and services that best support each child.
(c) An agency has been determined during the relevant time period
covered by the responsible HHS official's review under Sec. 1304.15 to
have an average score across all classrooms observed below the
following minimum thresholds on any of the three CLASS: Pre-K domains
from the most recent CLASS: Pre-K observation:
(1) For the Emotional Support domain the minimum threshold is 5;
(2) For the Classroom Organization domain, the minimum threshold is
5;
(3) For the Instructional Support domain, the minimum threshold is
2.5.
* * * * *
(e) An agency has been suspended from the Head Start or Early Head
Start program by ACF during the relevant time period covered by the
responsible HHS official's review under Sec. 1304.15 and the
suspension has not been withdrawn. If the agency did not have an
opportunity to show cause as to why the suspension should not have been
imposed, or why the suspension should have been lifted if it had
already been imposed under part 1304, the agency will not be required
to compete based on this condition. If an agency has received an
opportunity to show cause and the suspension remains in the place, the
condition will be implemented.
* * * * *
(g) An agency meets one of the two criteria of this fiscal
requirement:
(1) Has been determined within the first four years of the five-
year grant period to be at risk of failing to continue functioning as a
going concern. The final determination is made by the responsible HHS
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; or,
(2) Has been determined by the responsible HHS official within the
first four years of the five-year grant period to have audit findings
associated with its Head Start funds (CFDA 93.600) in two or more audit
reports covering years one, two, and three of the current project
period submitted to the Federal Audit Clearinghouse (in accordance with
section 647 of the Act).
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3. Revise Sec. 1304.12 as follows:
[[Page 40006]]
Sec. 1304.12 Grantee reporting requirements concerning certain
conditions.
Head Start agencies must report in writing to the responsible HHS
official within 10 working days of occurrence any of the following
events:
(a) The agency has had a revocation of a license to operate a
center by a state or local licensing entity.
(b) The agency has filed for bankruptcy or agreed to a
reorganization plan as part of a bankruptcy settlement.
(c) 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).
(d) 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 is at risk for ceasing to be a going concern.
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4. Revise Sec. 1304.15 to read as follows:
Sec. 1304.15 Designation request, review and notification process.
(a) Grantees must apply to be considered for Designation Renewal. A
Head Start or Early Head Start agency wishing to be considered to have
its designation as a Head Start or Early Head Start agency renewed for
another five-year period without competition must request that status
from ACF at least 12 months before the end of their five-year grant
period or by such time required by the Secretary.
(b) ACF will review the relevant data to determine if one or more
of the conditions under Sec. 1304.11 were met by the Head Start and
Early Head Start agency's program during the current grant period.
(c) ACF will give notice to all grantees on Designation Renewal
System status, except as provided in Sec. 1304.14, at least 12 months
before the expiration date of a Head Start or Early Head Start agency's
current grant stating:
(1) 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 under Sec. 1304.11 were met by the
agency's program during the relevant time period described in paragraph
(b) of this section, identifying the conditions ACF found, and
summarizing the basis for the finding; or,
(2) That such agency has been determined on a preliminary basis to
be eligible for renewed funding for five years without competition
because ACF finds that none of the conditions under Sec. 1304.11 has
been met during the relevant time period described in paragraph (b) of
this section. If prior to the award of that grant, ACF determines that
the grantee has met one of the conditions under Sec. 1304.11 during
the relevant time period described in paragraph (b) of this section,
this determination will change and the grantee will receive notice
under paragraph (c)(1) of this section that it will be required to
compete for funding for an additional five-year period.
PART 1305--DEFINITIONS
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5. The authority citation for part 1305 continues to read as follows:
Authority: 42 U.S.C. 9801 et seq.
0
6. Section 1305.2 is amended by adding, in alphabetical order, the
definition ``Denial of Refunding'' to read as follows:
Sec. 1305.2 Terms.
* * * * *
Denial of Refunding means the refusal of a funding agency to fund
an application for a continuation of a Head Start program for a
subsequent program year when the decision is based on a determination
that the grantee has improperly conducted its program, or is incapable
of doing so properly in the future, or otherwise is in violation of
applicable law, regulations, or other policies.
* * * * *
[FR Doc. 2019-17024 Filed 8-12-19; 8:45 am]
BILLING CODE 4184-01-P