Head Start: Information on Federal Funds Unspent By Program Grantees
(Letter Report, 12/29/95, GAO/HEHS-96-64).

Pursuant to a congressional request, GAO reviewed the: (1) amount of
Head Start funding unspent by program grantees at the end of budget
years 1992 to 1994 and the reasons for these unspent funds; (2)
proportion of carryover funds that were added to grantee awards and that
are 1 or more budget years old; and (3) grantees' intended use of
carryover funds.

GAO found that: (1) about two-thirds of the grantees reviewed had
unspent balances of $69,000 to $177,000 during budget years 1992 through
1994; (2) most of the unspent balances resulted from small differences
between grantees' budget estimates and actual expenditures, problems
related to building Head Start centers, and grantees' inability to spend
their awards because of the Department of Health and Human Services
(HHS) disbursement problems; (3) one-half of all the carryover funds in
budget year 1993 and about three-fourths of the carryover funds in
budget year 1994 were added to grantee awards in subsequent budget
years; (4) about one-half and one-fourth of carryover funds in grantee
budget years 1993 and 1994 offset grantee awards; (5) Head Start offset
70 to 90 percent of its grantee awards with carryover funds within 2
budget years of an unspent balance; and (6) carryover funds added to
grantee awards were used to expand Head Start enrollments, build new
facilities, purchase capital equipment and train staff.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-96-64
     TITLE:  Head Start: Information on Federal Funds Unspent By Program 
             Grantees
      DATE:  12/29/95
   SUBJECT:  Preschoolers
             Disadvantaged persons
             Educational grants
             Funds management
             Grant administration
             Reprogramming of appropriated funds
             Grants-in-aid
IDENTIFIER:  Head Start Program
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on the Budget, House of
Representatives

December 1995

HEAD START - INFORMATION ON
FEDERAL FUNDS UNSPENT BY PROGRAM
GRANTEES

GAO/HEHS-96-64

Funds Unspent by Head Start Grantees

(104823)


Abbreviations
=============================================================== ABBREV

  ACF - Administration for Children and Families
  HHS - Department of Health and Human Services
  NOA - new obligating authority
  TOA - total obligating authority

Letter
=============================================================== LETTER


B-261919

December 29, 1995

The Honorable John R.  Kasich
Chairman, Committee on the Budget
House of Representatives

Dear Mr.  Chairman: 

In fiscal year 1995, Head Start--the centerpiece of federal early
childhood programs--was appropriated $3.5 billion to provide a range
of services to eligible, preschool-aged children from low-income
families.\1 Currently, about 1,400 local agencies, known as grantees,
sponsor these programs and serve 752,000 children.  Local programs
provide education, nutrition, health, and social services to
low-income children and opportunities for parental involvement and
enrichment. 

Since 1990, the Congress has increased funding for Head Start 135
percent (in current dollars) to allow more children the opportunity
to participate and to improve the quality of Head Start services. 
During this period of growth, virtually all program funds were
awarded to grantees.  However, some Head Start grantees, as expected,
(1) did not spend all of the program funds awarded them each year to
conduct local program activities and (2) carried these unspent funds
forward for use in subsequent years.\2

This report responds to your request for us to determine

  the amount of Head Start funding unspent by program grantees at the
     end of grantee budget years 1992, 1993, and 1994 and the reasons
     for these unspent funds;\3

  the proportion of carryover funds that was added to grantee awards
     or that offset grantee awards in subsequent years;

  the proportion of carryover funds that are 1 or more grantee budget
     years old; and

  the grantees' intended use of carryover funds. 

To gather information about the extent and intended use of Head Start
grantees' carryover funds in grantee budget years ending 1992 through
1995, we drew a nationally representative sample of 108 grantee
files.  We subsequently examined key documents in these grantees'
files maintained at Head Start's Atlanta, Chicago, Dallas, Denver,
and New York regional offices.  We discussed the information we
collected with Department of Health and Human Services (HHS)
officials at headquarters and the field offices.  We did not
independently verify the accuracy of the data in the grantee files. 
Finally, we analyzed and weighted the data from 107 grantees and
projected the results to a universe of 1,197 Head Start grantees in
1994.\4

Our universe of 1,197 grantees did not include 135 grantees that
operate programs for Native American and migrant children; 69
grantees in existence less than 3 years; and 4 grantees with fiscal
year 1994 awards of $60 million or greater.  Our review was not
designed to (1) determine whether program grantees actually used
carryover funds for the purposes intended or (2) uncover program
abuses, such as fraud or mismanagement.  (See app.  I for a full
description of our methodology.)


--------------------
\1 Although Head Start is authorized to serve children at any age
before the age of compulsory school attendance, most children enter
the program at age four. 

\2 Unspent funds are the remainder of a grantee's Head Start award--a
federal obligation--that are unexpended or uncommitted by the grantee
at the end of its budget year.  In other words, unspent funds are the
difference between a Head Start grantee's total federal award and the
amount spent by the grantee during its budget year. 

\3 According to Head Start, a grantee budget year (1) is usually 12
months long but may be shorter or longer, if appropriate, and (2)
does not always correspond with the federal fiscal year, which begins
on October 1 and ends on September 30.  We used this term to
differentiate between the federal fiscal year in which the award was
made. 

\4 Our national estimates are based on data from 107 instead of the
108 grantees in our sample because 1 grantee with a fiscal year 1994
award of more than $60 million was excluded.  This grantee's
inclusion in our analysis would have diminished the precision of our
estimates.  For further information, see appendix I. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

About two-thirds of the 1,197 Head Start grantees included in our
study had unspent balances at the end of each grantee budget year
from 1992 through 1994.  The average amount of the unspent balances
increased from about $69,000 to $177,000 during the 3-year period and
ranged from as little as $2 to $2 million.  This represented about 4
to 6 percent of all grantees' total awards in the aggregate.  Most of
the unspent balances resulted from (1) small differences between
grantees' budget estimates and actual expenditures; (2) problems
related to building or renovating Head Start centers, which delayed
planned expenditures; and (3) the inability of grantees to spend
their awards because HHS disbursed certain types of funding (for
example, program expansion funds) late in a grantee's budget year. 

In grantee budget year 1994, a larger proportion of Head Start
carryover funding was added to grantee awards than was used to offset
grantee awards.  About one-half of all carryover funds in grantee
budget year 1993 and about three-fourths in grantee budget year 1994
were added to grantee awards in subsequent budget years.  About
one-half and one-fourth of carryover funds in grantee budget years
1993 and 1994, respectively, offset grantee awards.  Data were
incomplete for grantee budget year 1995. 

Our analysis of data for both grantee budget years 1993 and 1994
showed that Head Start regional offices either added to or offset
from about 70 to 90 percent of grantee awards with carryover funds
within 2 grantee budget years after an unspent balance occurred. 
However, the remaining proportion of carryover funds used to offset
grantee awards was 3 or more years old.  Head Start regional office
officials primarily cited administrative reasons--such as delays in
data entry or grantee errors--for not offsetting these carryover
funds sooner. 

According to grantee files, carryover funds were added to grantee
awards in grantee budget years 1993 and 1994 combined to expand Head
Start enrollments (40 percent) and build or renovate facilities (37
percent)--activities that are often not completed by grantees in a
single year.  Information in the grantee files also indicated that an
additional 23 percent of funds carried over were to be used for
capital equipment, supplies, and other purposes such as staff
training. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Head Start is administered by HHS' Administration for Children and
Families (ACF).  Services are provided at the local level by public
and private nonprofit agencies that receive their funding directly
from HHS.  These agencies include public and private school systems,
community action agencies, government agencies, and Indian tribes. 
Grantees may contract with one or more other public or private
nonprofit organizations--commonly referred to as delegate
agencies--in the community to run all or part of their local Head
Start programs.  Grantees may choose to provide center-based
programs, home-based programs, or a combination of both. 

Once approved for funding as a result of a competitive application
process, Head Start grantees do not compete for funding in succeeding
years.  However, they are required to submit applications for
continuation awards (hereafter called awards) to support their
programs beyond the initial grantee budget year.  After Head Start
receives its annual appropriation from the Congress, the respective
HHS regional offices make awards to grantees in their administrative
service areas at the beginning of each grantee's budget year as shown
in table 1. 



                                Table 1
                
                Head Start Grantees Receive 100 Percent
                 of Continuation Awards Throughout the
                          Federal Fiscal Year

Grantees with budget years          Quarter of federal fiscal year in
beginning in--                      which funds are disbursed
----------------------------------  ----------------------------------
October, November, December, and    First quarter
January                             (October -December)

February, March, April              Second quarter
                                    (January -March)

May, June, July                     Third quarter
                                    (April -June)

August and September                Fourth quarter
                                    (July -September)
----------------------------------------------------------------------
Grantees use their awards for the following purposes, among others,
to: 

  purchase or rent a facility if providing a center-based program;

  hire qualified teachers, aides, and support staff;

  coordinate or contract with Public Health agencies and local health
     providers to deliver medical and dental services;

  buy or lease vehicles to transport children to Head Start centers;

  purchase utilities, services, and supplies needed to operate a
     center and administer the program; and

  comply with program standards and local building and health codes
     that ensure quality and safety. 

During a grantee budget year, grantees may also receive supplemental
awards for specific purposes (such as expanding enrollment) or to
cover normal, though sometimes unexpected, expenses such as repairing
a roof or purchasing a new heating system.  In addition, grantee
accounts may be adjusted as the result of a routine financial audit
or Head Start regional office review of grantees' files.  These
activities sometimes identify unspent funds that the grantee did not
report due to an error or oversight.  HHS requires grantees to get
their Head Start accounts audited every 2 years, though many grantees
hire accountants to perform an audit every year. 

As shown in figure 1, grantees, as expected, may not necessarily
spend all of their award by the end of their budget year.  HHS
permits grantees to carry over unspent funds into the next grantee
budget year to complete any program objectives that remain unmet from
the previous year.\5

HHS regional offices generally handle carryover funds in two ways: 

1.  Carryover balances from a previous year or years are added to an
award that a grantee receives in a subsequent year.  This procedure
is known as "reprogramming" funds, and the amount of carryover funds
added to a grantee's award is called total obligating authority
(TOA). 

2.  Carryover balances from a previous year or years offset or reduce
the award that a grantee receives in a subsequent year.  This
procedure is known as "offsetting" funds, and the amount of carryover
deducted from the award is called new obligating authority (NOA).\6

   Figure 1:  Grantees May Not
   Spend All Funds When Initially
   Awarded

   (See figure in printed
   edition.)


--------------------
\5 Sometimes, anticipating an expenditure, regional offices may
prohibit a grantee from spending the entire carryover balance
immediately.  This earmarked or "unreprogrammed" portion of a
carryover balance is suspended in the grantee's account and may be
made available eventually to the grantee when needed. 

\6 According to the ACF Discretionary Grants Administration Manual,
HHS regional offices can also withdraw the obligating authority of a
grantee with a carryover balance and refund to the federal government
any cash that has already been transferred to the grantee.  We did
not find any instances in our sample of 108 grantee files in which
HHS used this option to handle carryover balances during the 3 years
we examined. 


      FUNDING INCREASES HAD NO
      IMPACT ON HHS' ABILITY TO
      DISBURSE AWARDS
---------------------------------------------------------- Letter :2.1

The growth in Head Start funding since 1990 (see fig.  2) reflects
the federal government's commitment to expanding the number of
children in the program and to ensuring program quality.\7 Overall
program funding increased from about $1.5 billion in fiscal year 1990
to about $3.5 billion in fiscal year 1995.  Twice in fiscal year 1990
and once each in fiscal years 1991, 1992, and 1993, the Congress
appropriated additional funding for Head Start to, among other
things, increase local enrollments, strengthen the program's social,
health, and parent involvement components; improve services for
disabled children; initiate and improve literacy programs; and
enhance salaries, benefits, training, and technical assistance for
program staff.  ACF allocated these expansion funds on the basis of a
formula as required by statute.\8

   Figure 2:  Head Start Funding
   Increased Significantly Between
   1990 and 1995 (in Current Year
   Dollars)

   (See figure in printed
   edition.)

Despite this dramatic growth in Head Start appropriations, HHS
awarded virtually all program funding to eligible grantees.  Head
Start's program obligation rates for each of these years stayed at or
above 99 percent, while the total number of grantees increased from
1,321 in fiscal year 1990 to about 1,400 in fiscal year 1994. 
Overall program outlay rates (that is, the ratio of outlays to budget
authority) during this period indicate that outlays remained stable
as grantees received infusions of Head Start expansion or quality
improvement funding.  However, at the grantee level, this funding
growth increased grantee awards and unspent balances for the grantees
included in our universe during the grantee budget years we examined. 


--------------------
\7 In 1994, 40 percent of eligible 3- and 4-year-olds participated in
local Head Start programs. 

\8 Eighty-seven percent of all Head Start funding except carryover is
allocated by state on the basis of the number of children in each
state who are (1) age 5 and younger and living with low-income
families (2) and age 18 and younger and in families receiving Aid to
Families With Dependent Children.  See 42 U.S.C.  Sec.  9835 (a)(4)
(1993). 


   GRANTEE AWARDS AND UNSPENT
   BALANCES INCREASED IN RECENT
   YEARS
------------------------------------------------------------ Letter :3

We found that total grantee awards for the 1,197 Head Start grantees
covered by our review increased from $1.4 billion to $2.3 billion
from grantee budget years 1992 through 1994, while mean awards rose
from $1.2 million to $1.9 million in these same years.  (See table
2.)



                                Table 2
                
                Unspent Balances of Head Start Grantees
                  Rose (Grantee Budget Years 1992-94)

                                 Total
                                unspen
                                     t
                         Total  balanc
                         award       e    Mean
                        (dolla  (dolla  unspen
                         rs in   rs in       t
                        billio  millio  balanc  Unspent balances
Grantee budget year        ns)     ns)       e  ranged from--
----------------------  ------  ------  ------  ----------------------
1992                      $1.4     $54  $69,00  $17 to $1.3 million
                                             0
1993                       1.8     101  133,00  2 to 2.4 million
                                             0
1994                       2.2     130  177,00  22 to 1.7 million
                                             0
----------------------------------------------------------------------
During grantee budget years 1992, 1993, and 1994--a period of intense
growth--about two-thirds of the 1,197 grantees had unspent balances
at the end of each budget year.  Almost 40 percent of these 1,197
grantees had unspent balances every year.  As shown in table 2, these
balances totaled approximately $54 million, $101 million, and $130
million, in grantee budget years 1992, 1993, and 1994, respectively,
and varied greatly by grantee. 

However, these unspent balances were a small part of grantees' total
awards.  On the basis of our analysis, unspent balances represented
from about 5 to 8 percent of the award for those grantees with
unspent balances and from 4 to 6 percent of total awards for all
grantees in the aggregate.  (See app.  II for the reported unspent
balances of the 108 grantees included in our sample.)


   WHY DO UNSPENT BALANCES OCCUR? 
------------------------------------------------------------ Letter :4

Unspent balances resulted from (1) small differences between the
amount of a grantee's annual award and its actual expenditures at the
end of its grantee budget year, (2) situations that delay a grantee's
expenditure of funds or that hamper a grantee's ability to spend
funds before the year's end, and (3) a combination of these and other
reasons.\9


--------------------
\9 In some cases, we could not determine why grantees had unspent
balances. 


      SMALL BUDGET VARIANCES
---------------------------------------------------------- Letter :4.1

We found that almost two-thirds of grantees in grantee budget year
1992 and about half in grantee budget years 1993 and 1994 had small
differences between their total award approved at the beginning of a
grantee budget year and the amount spent at year's end.  We
considered these spending variances small if the amount of unspent
funds was 5 percent or less of a grantee's award in a given year. 
These small budget variances could have occurred because, for
example, (1) grantees' projected budgets--upon which grant awards are
based--did not equal their actual expenditures or (2) grantees did
not purchase an item or service as originally planned.  For example,
a grantee in Ohio had ordered two buses and playground equipment for
its Head Start center.  However, these items were not delivered nor
paid for before the grantee's budget year ended, resulting in an
unspent balance of $84,762. 


      TIMING ISSUES
---------------------------------------------------------- Letter :4.2

We found that from 10 to 24 percent of grantees with unspent balances
in grantee budget years 1992 through 1994 (1) had problems renovating
or building a center, which delayed planned expenditures until
subsequent years, or (2) received additional funding late in a
grantee budget year, making it difficult for grantees to spend all of
their funds before year's end.  For example, a Head Start grantee in
Colorado received funding to increase its program enrollment in early
September 1991--about 2 months before the grantee's budget year was
to end on October 30.  Due to the short time remaining, the grantee
could not spend $89,980 of the amount awarded for expanding program
enrollment.  This same grantee had agreed verbally with a private
company to prepare a site so that the grantee could place a modular
unit on it to serve as a Head Start center.  Site preparation would
have involved establishing water, sewer, gas, and electrical hookups
at the site.  Before any work began, however, new owners took over
the company and did not honor the verbal agreement between the
grantee and the previous owner.  It took the grantee 2 years to find
another site suitable for the center, and that facility required
extensive renovations. 

HHS' Office of Inspector General reported in 1991 and 1993 that
acquiring adequate, affordable space was a major problem for Head
Start grantees attempting to expand program enrollments.  Grantees
told the Inspector General's office that it can take up to a year to
find suitable space that then may have to be renovated.  Strict
construction licensing requirements and delays in license approval
could also slow spending for center construction or renovation.  The
Inspector General reported that space problems were most prevalent
among grantees funded to increase enrollment by more than 200
children.\10 The grantees believed that being notified at least 6
months in advance of funding disbursements would help to alleviate
this problem. 

Head Start grantees interviewed by the Inspector General's staff also
said that receiving expansion funding late in the budget year results
in carryover fund balances.  After expansion, more than twice as many
grantees interviewed had carryover balances of over $50,000.  Many
grantees believe that even with adequate lead time large expansions
should not occur annually. 


--------------------
\10 Readiness To Expand Head Start Enrollment (OEI-02-91-00741) HHS
Office of Inspector General (Washington, D.C.:  Aug.  1991) and Head
Start Expansion:  Grantee Experiences (OEI-09-91-00760) HHS Office of
Inspector General (Washington, D.C.:  May 1993). 


      OTHER REASONS
---------------------------------------------------------- Letter :4.3

According to the grantee files we reviewed, unspent balances
sometimes occurred for reasons other than small budget variances or
timing issues.  On the basis of information included in grantee files
and discussions with regional office program officials, we found, for
example, that unspent balances occurred because grantees

  experienced accounting or management problems during 1 or more
     years,

  depended on large government bureaucracies, such as New York
     City's, to provide certain goods and services, which often
     slowed program expenditures; or

  assumed the program operations and accounts of a former grantee. 

Also, unspent balances may have occurred for a combination of reasons
described above.  In other cases we could not determine the reason
for grantees' unspent balances on the basis of file information or
discussions with Head Start regional office officials. 


   LARGER PROPORTION OF CARRYOVER
   FUNDS ADDED TO GRANTEE AWARDS
   IN GRANTEE BUDGET YEAR 1994
------------------------------------------------------------ Letter :5

Unspent balances occur when a grantee's total award differs from the
amount the grantee spent during its budget year.  As previously
stated, these unspent funds may be carried over into a subsequent
grantee budget year.  For our analysis, we defined carryover funds as
any unspent funds used to either offset or add to a grantee's award
during a subsequent budget year.  Carryover funds are not always
added to or offset in the year immediately following the year the
unspent funds occurred.  For example, a grantee in Florida with
$45,913 in unspent funds in grantee budget year 1992 did not have
this amount totally added to or offset as carryover funds in grantee
budget year 1993.  In fact, $45,759 was added to its budget year 1993
award and the remaining $154 was used to offset the grantee's budget
year 1994 award.  A grantee in Minnesota, on the other hand, had
$3,840 from grantee budget year 1993 added to its budget year 1995
award.  Yet, a Michigan grantee had its entire grantee budget year
1992 unspent balance of $1,568 offset as carryover funds in 1993. 

On the basis of our analysis of grantee files, we found that in
grantee budget year 1993 HHS added about half of all carryover funds
to grantees' awards as TOA and the remaining proportion of carryover
funds was offset as NOA.  Of the grantees in our sample with TOA in
grantee budget year 1993, the unspent funds added to grantee awards
ranged from $10,900 to $533,500 and averaged approximately $96,000. 
If we had included the grantee representing New York City in our
calculation, the upper end of this range would have been about $4.2
million.  NOA for the same period ranged from $59 to $664,700 and
averaged about $39,000. 

In grantee budget year 1994, we found that about three-fourths of
carryover funding was added to awards as TOA, and the remainder was
offset as NOA.  Of the grantees in our sample with TOA in grantee
budget year 1994, the amount of unspent funds added to grantee awards
ranged from $3,200 to $2.4 million and averaged about $197,400.  NOA
for the same period ranged from $17 to $621,000 and averaged
approximately $58,600.  This trend appears to continue in grantee
budget year 1995, though data for this year were incomplete when we
performed our final calculations in October 1995. 


      MOST CARRYOVER FUNDS ARE
      REPROGRAMMED OR OFFSET
      WITHIN 2 GRANTEE BUDGET
      YEARS
---------------------------------------------------------- Letter :5.1

We found that HHS generally adds to or offsets grantee carryover
funds within 2 grantee budget years after an unspent balance occurs. 
For example, for both grantee budget years 1993 and 1994, we found
that

  about 90 percent of carryover funds added to grantee awards was 1
     year old, and the remainder was from 2 to 3 years old; and

  from about 70 to 90 percent of carryover funds offsetting grantee
     awards was from 1 to 2 years old, and the remainder was 3 or
     more years old.\11

Because Head Start carryover funds are generally spent in 2 grantee
budget years but are available for up to 5 fiscal years following the
fiscal year in which they are initially awarded (31 U.S.C., sec. 
1552(a)), we asked Head Start regional office officials why certain
carryover balances were reprogrammed or offset as long as 3 or more
years after an unspent balance occurred.  Regional office officials
gave the following administrative and grantee-specific reasons: 

  Regional office staff may not process grantee files in a timely
     manner due to grantee or staff errors, delays in data entry,
     staff turnover, large workloads, and differences in staff
     competence. 

  Final forms documenting carryover balances are not due from
     grantees until 90 days after the budget year's end.  Incorrect
     carryover balances may not be caught immediately because
     independent auditors may take up to 13 months to complete an
     audit of a grantee's program accounts for a given year. 

  Actions, such as reprogramming or offsetting carryover balances,
     could be suspended if a grantee appeals an HHS decision to
     disallow funding. 

  A grantee's bankruptcy proceedings delayed a regional office from
     offsetting certain carryover funds. 


--------------------
\11 HHS officials told us that, at the program level, about 40
percent of all Head Start funding is outlayed by the end of the
federal fiscal year in which it is awarded; about 95 percent is
outlayed by the end of the second year; and about 99 percent is
outlayed by the end of the third year. 


   INTENDED USE OF CARRYOVER
   BALANCES REPORTEDLY FOR
   EXPANSION AND FACILITIES
------------------------------------------------------------ Letter :6

For grantee budget years 1993 and 1994 combined, we estimated that
carryover funds totaled $139 million.  Of this amount, carryover
funds added to grantee awards (TOA) totaled $97 million and those
offsetting grantee awards (NOA) totaled $42 million.  We focused our
analysis of intended use on the TOA portion because NOA has no
identifiable intended purpose. 

On the basis of our review of Head Start grantee files, the intended
use of a large proportion of Head Start carryover funds from grantee
budget years 1993 and 1994 combined was to be used for expanding
program enrollments and renovating or buying facilities.\12 Of the
$97 million of TOA carryover funds, the intended use of 40 percent of
these funds was for expansion and 37 percent was for facilities. 
Data from the files indicated that about 23 percent of the total TOA
for these years was reportedly to be used for capital equipment,
supplies, and other purposes such as staff training and moving
expenses.  Data were incomplete for grantee budget year 1995. 

We found that grantees in our sample with TOA in grantee budget years
1993 and 1994 combined to be used for facilities ranged from $901 to
$611,000 and averaged approximately $116,000.  TOA reportedly to be
used for expansion ranged from $4,200 to $2.4 million and averaged
about $296,000. 

In summary, although overall program outlay rates remained stable
during a period of intense program growth (fiscal years 1990-95),
Head Start grantees accrued increasingly larger average unspent
balances in grantee budget years 1992 through 1994.  Depending on the
size of grantees' awards, their reported unspent balances in those
years ranged from as little as $2 to about $2 million.  On the basis
of Head Start files, we determined in most cases that these unspent
balances resulted from (1) small differences between grantees' budget
estimates and actual expenditures; (2) grantee problems renovating or
constructing facilities, which delayed planned expenditures; and (3)
the receipt of supplemental funding by grantees late in their budget
year, which made it difficult for grantees to spend their funds
before year's end.  Of the unspent funds added to grantee awards in
budget years 1993 and 1994 combined, we found that grantees planned
to use these dollars for increasing local program enrollments and
buying or improving program facilities--activities that grantees
often do not complete in a single year. 


--------------------
\12 Here we combined data from the two budget years to increase the
precision of our estimate.  (See app.  I for a discussion of sampling
errors.)


---------------------------------------------------------- Letter :6.1

As arranged with your office, we will make copies available to the
Secretary of Health and Human Services and other interested parties. 
We will also make copies available to others on request. 

Please contact Fred E.  Yohey, Assistant Director, on (202) 512-7218
or Karen A.  Whiten, Evaluator-in-Charge, if you or your staff have
any questions.  Other GAO contributors to this report are listed in
appendix III. 

Sincerely yours,

Linda G.  Morra
Director, Education
 and Employment Issues


SCOPE AND METHODOLOGY
=========================================================== Appendix I

We designed our study to collect information about the extent and
nature of Head Start carryover funds.  To do so, we visited a sample
of Head Start regional offices and examined key documents in selected
grantee files.  Results are generalizable to Head Start grantees that
(1) were at least 3 years old in 1994, (2) had at least some but less
than $60 million in new funding in 1994, and (3) were located in 10
of the 12 Head Start regions.  Our work was performed between June
and October 1995 in accordance with generally accepted government
auditing standards. 


   DATA COLLECTION STRATEGY
--------------------------------------------------------- Appendix I:1

We reviewed grantee files for a nationally representative sample of
Head Start grantees.  We focused our efforts on grantee budget years
that ended in 1992 through 1995, examining file documents at selected
Head Start regional offices. 


      SAMPLE DESIGN
------------------------------------------------------- Appendix I:1.1

To generate national estimates, we employed a two-stage cluster
sampling strategy.  The Head Start regions constituted the first
stage of the sample.  Of the 12 Head Start regions, 2 are operated
from the Department of Health and Human Services headquarters in
Washington, D.C.--1 for Native Americans and the other for migrant
workers.  Because these regional offices share a unique relationship
with headquarters, they were not included in the regions to be
sampled.  We organized the 10 remaining regions by the amount of
grantee new funding received in federal fiscal year 1994,\13
separating them into three groups or strata:  regions with new
funding of $500 million or more; regions with new funding of $200 to
$499 million; and regions with new funding of less than $200 million. 
Table I.1 shows our population of regions. 



                         Table I.1
          
            Head Start Regions Stratified by New
             Funding Awards (Fiscal Year 1994)

Amount of
new funding
received in
fiscal year                       Total fiscal
1994                             year 1994 new       Total
(dollars in                   funding (dollars   number of
millions)     Region              in millions)    grantees
------------  --------------  ----------------  ----------
$500 or more  4--Atlanta                  $570         239
              5--Chicago                   532         213
$200 to 499   9--San                       441          82
               Francisco
              2--New York                  421         104
              6--Dallas                    385         176
              3--                          250         149
               Philadelphia
Less than     1--Boston                    118          84
 $200
              7--Kansas City               116          76
              10--Seattle                   89          69
              8--Denver                     78          78
----------------------------------------------------------
We then selected a sample of regions in each strata using a random
number generator program.  Table I.2 shows the regions selected in
our sample. 



                         Table I.2
          
               Regions Included in GAO Sample

Amount of new funding                    Total fiscal year
received in fiscal year                   1994 new funding
1994 (dollars in                               (dollars in
millions)                 Region                 millions)
------------------------  ----------  --------------------
$500 or more              4--                         $570
                           Atlanta
                          5--                          532
                           Chicago
$200 to $499              2--New                       421
                           York
                          6--Dallas                    385
Less than $200            8--Denver                     78
----------------------------------------------------------
Stage two of the sample consisted of individual Head Start grantees. 
Head Start had 1,270 grantees in the 10 regions in fiscal year 1994. 
Because we were reviewing 2 to 3 years of data, we excluded any
grantee not in existence at least 3 years.  We also excluded all
grantees with no new funding in fiscal year 1994.  This reduced the
number of grantees in our population to 1,201. 

We organized grantees in our sample regions by fiscal year 1994 new
funding and put them into four strata:  those with fiscal year 1994
new funding of less than $1 million; those with $1 million or more
but less than $3 million; those with $3 million or more but less than
$5 million; and those with $5 million or more.  We then selected a
random sample of grantees in each strata.  Table I.3 shows the
distribution of grantees by strata of our population and sample. 



                         Table I.3
          
          Distribution of Population and Sample of
             Grantees by Amount of New Funding
                Received in Fiscal Year 1994

                                        Number
Amount of new funding                       in
received in fiscal year     Populati    sample      Sample
1994 (dollars in millions)   on size   regions        size
--------------------------  --------  --------  ----------
Less than $1                     411       243          34
$1 to less than $3               567       375          44
$3 to less than $5               121        83          15
$5 or more                       102        68          15
==========================================================
Total grantees                 1,201       769         108
----------------------------------------------------------
Once the fieldwork was completed and records evaluated, we determined
that one very large grantee with fiscal year 1994 new funding of $60
million or more was, because of its complexity, unique and required
special handling.  Therefore, we set aside this one grantee--The City
of New York Human Resources Administration, Agency for Child
Development.  We did not include data collected from this site in our
overall estimates but used the data as a case study of a very large
grantee.  By eliminating the very large grantees, we reduced our
population further by 4 grantees to 1,197, thereby reducing our
sample from 108 to 107 grantees.  Our findings, therefore, are
representative of grantees in the 10 Head Start regions that are at
least 3 years old with at least some but less than $60 million in
fiscal year 1994 new funding. 


--------------------
\13 New funds are Head Start funds other than carryover funds that
grantees received. 


      FIELDWORK
------------------------------------------------------- Appendix I:1.2

We provided the list of sample grantees to each selected regional
office, which collected records for our review.  We examined key
documents from the files and summarized the information using a data
collection instrument.\14 Data elements we collected included the
number of service years for a selected grantee; total federal funds
authorized for specific funding periods; the unspent balance of
federal funds for specific funding periods and its intended usage;
and the amount of carryover funds added to or offsetting grantee
awards in grantee budget years 1993, 1994, and 1995 by type and
source year.  To link source year with carryover funds, we gathered
information from the Financial Assistance Award form, which
identifies the grantee service year in which the unspent funds
occurred. 

Once data collection was complete, we compiled and merged the data. 
Data elements were verified and traced to documents maintained in the
grantee files for 91 percent of the cases.  We then computed weights
to produce national estimates from our sample and calculated analytic
variables.  To calculate the age of carryover funds, we subtracted
the source year from the grantee's current service year. 

The Head Start grantee funding process presented unique data
collection challenges.  We made no attempt to capture the fiscal year
funding.  Rather, we used each grantee's budget year ending date to
guide our compilation of financial data. 


--------------------
\14 Key documents include the HHS form called the Financial
Assistance Award, Standard Form 269:  Financial Status Report, and
supporting HHS and grantee correspondence found in grantees' files. 


      SAMPLING ERRORS
------------------------------------------------------- Appendix I:1.3

Because our analysis is based on data from a sample of grantees, each
reported estimate has an associated sampling error.  The size of the
sampling error reflects the estimate's precision; the smaller the
error, the more precise the estimate.  The magnitude of the sampling
error depends largely on the size of the obtained sample and the
amount of data variability.  Our sampling errors for the estimates
were calculated at the 95-percent confidence level.  This means that
in 95 out of 100 instances, the sampling procedure we used would
produce a confidence interval\15 containing the population value we
are estimating. 

Some sampling errors for our dollar estimates are relatively high
because dollar amounts vary substantially.  Sampling errors also tend
to be higher for those estimates based on a subset of sample cases. 
For example, estimates of the mean and total amounts of grantee
unspent balances are based on fewer than the 107 grantees in our
sample and have large sampling errors.  Therefore, these estimates
must be used with extreme caution.  For a complete list of sampling
errors for dollar estimates and proportions in this report, see
tables I.4 and I.5, respectively. 



                               Table I.4
                
                  Sampling Errors for Dollar Estimates
                     (Grantee Budget Years 1992-94)

                                                          Number of
                                                       sample grantees
                                                       contributing to
                     Point estimate    Sampling error     estimate
---------------  ------------------  ----------------  ---------------
1992 Grant awards
----------------------------------------------------------------------
Mean                     $1,237,902     +/-$82,904103        103
 Total               $1,422,959,424    +/-$98,912,337

1993 Grant awards
----------------------------------------------------------------------
Mean                     $1,531,698       +/-$102,334        106
 Total               $1,819,803,471   +/-$123,885,671

1994 Grant awards
----------------------------------------------------------------------
Mean                     $1,899,588       +/-$102,618        107
 Total               $2,273,375,524   +/-$122,810,684

1992 Unspent balance
----------------------------------------------------------------------
Mean                        $69,052        +/-$19,304        74
 Total                  $54,286,803    +/-$15,412,760

1993 Unspent balance
----------------------------------------------------------------------
Mean                       $132,878        +/-$41,297        69
 Total                 $100,643,570    +/-$32,225,320

1994 Unspent balance
----------------------------------------------------------------------
Mean                       $176,716        +/-$36,568        66
 Total                 $129,902,350    +/-$27,732,575

1993/1994 Combined carryover balance
----------------------------------------------------------------------
                       $139,195,654    +/-$34,592,412        78

1993/1994 Carryover funds offsetting grantee awards (NOA)
----------------------------------------------------------------------
Mean                        $61,162        +/-$25,705        61
 Total                  $42,233,407    +/-$18,371,913

1993/1994 Carryover funds added to grantee awards (TOA)
----------------------------------------------------------------------
Mean                       $210,283        +/-$58,410        44
 Total                  $96,962,247    +/-$28,660,860
----------------------------------------------------------------------


                         Table I.5
          
              Sampling Errors for Estimates of
          Proportions (Grantee Budget Years 1992-
                            94)

                                                 Number of
                                      Sampling       cases
                                         error  contributi
                                   (percentage       ng to
Estimated proportion (percent)         points)    estimate
--------------------------------  ------------  ----------
Grantees with unspent balances
----------------------------------------------------------
1992--68                                  +/-7         102
 1993--64                                 +/-7         105
 1994--62                                 +/-7         106

Grantees with unspent balances all 3 years
----------------------------------------------------------
1992-94--39                               +/-7         107

Unspent balances as a percent of total
----------------------------------------------------------
1992--4                                   +/-1         101
 1993--6                                  +/-2         105
 1994--6                                  +/-1         106

Amount of unspent as a percent of award
----------------------------------------------------------
1992--5                                   +/-1          73
 1993--8                                  +/-2          69
 1994--8                                  +/-1          66

Unspent balances due to small budget variances
----------------------------------------------------------
1992--65                                  +/-8          74
 1993--50                                 +/-9          69
 1994--53                                 +/-9          66

Unspent balances due to timing issues
----------------------------------------------------------
1992--10                                  +/-5          74
 1993--20                                 +/-7          69
 1994--24                                 +/-7          66

Unspent balances due to other reasons
----------------------------------------------------------
1992--8                                   +/-4          74
 1993--20                                 +/-6          69
 1994--13                                 +/-6          66

Unspent balances due to unknown reasons
----------------------------------------------------------
1992--17                                  +/-7          74
 1993--10                                 +/-6          69
 1994--10                                 +/-6          66

Carryover as NOA
----------------------------------------------------------
1993--45                                 +/-18          57
 1994--24                                +/-11          59

Carryover as TOA
----------------------------------------------------------
1993--55                                 +/-18          57
 1994--76                                +/-11          59

Age of 1993 TOA
----------------------------------------------------------
1 year old--94                            +/-7          25
Age of 1994 TOA
1 year old--89                            +/-7          34

Age of 1993 NOA
----------------------------------------------------------
1 to 2 years old--89                      +/-9          40

Age of 1994 NOA
----------------------------------------------------------
1 to 2 years old--72                     +/-18          38

Intended use of 1993/1994 TOA
----------------------------------------------------------
Expansion--40                            +/-19          44
 Facilities--37                          +/-13          44
 Capital equipment, supplies,             +/-9          44
 and other--23
----------------------------------------------------------

--------------------
\15 "Confidence interval" is another term for the range defined by
the sampling error. 


   METHODOLOGY LIMITATIONS
--------------------------------------------------------- Appendix I:2

Because we wanted to obtain general information about the extent and
frequency of Head Start carryover funds, we limited our investigation
to reviewing grantee records maintained at HHS' Atlanta, Chicago,
Dallas, Denver, and New York regional offices.  We gave officials at
these regional offices an opportunity to review the accuracy of the
data we collected and subsequently used to develop our estimates.  We
did not contact individual grantees to verify records nor did we
visit grantee sites.  We did not follow the flow of funds to
determine if program abuses had occurred nor did we make any attempt
to determine whether program grantees actually used the funds for the
purposes intended. 


HEAD START GRANTEES INCLUDED IN
OUR REPRESENTATIVE SAMPLE
========================================================== Appendix II



                                    Table II.1
                     
                                Region 4--Atlanta


Grantee
name and
identifi  Grantee
er        city/     Unspent   Percent   Unspent   Percent   Unspent   Percent of
number    state     balance   of award  balance   of award  balance     award
--------  --------  --------  --------  --------  --------  --------  ----------
Blue      North        $0        0         $0        0         $0         0
 Ridge     Wilkesb
 Opportu   oro,
 nity      N.C.
 Commiss
 ion,
 Inc./
 2524
Breckenr  Hardinsb    122        <1      27,000      12        0          0
 idge      urg,
 County    Ky.
 Board
 of
 Educati
 on/
 2675
Broward   Fort      159,216      4      604,471      11     591,693       8
 County/   Lauderd
 0314      ale,
           Fla.
CAA of    Huntsvil  152,236      11      78,170      5       19,445       1
 Huntsvi   le,
 lle-      Ala.
 Madison
 &
 Limesto
 ne
 Countie
 s,
 Inc./
 0706
Chesterf  Cheraw,    88,770      10      5,330       1      295,477       20
 ield-     S.C.
 Marlbor
 o
 Economi
 c
 Opportu
 nity
 Council
 , Inc./
 3204
City of   Chattano   37,210      1       3,183       0       17,984       1
 Chattan   oga,
 ooga      Tenn.
 Departm
 ent of
 Human
 Service
 s/0047
Communit  Tuscaloo     0         0         0         0      228,398       8
 y         sa,
 Service   Ala.
 Program
 s of
 West
 Alabama
 /3409
DOP       Jacksonv   35,733      2       34,835      2       80,733       4
 Consoli   ille,
 dated     N.C.
 Service
 s/2516
Economic  Savannah  166,097      8       3,609       0      105,074       4
 Opportu   , Ga.
 nity
 for
 Savanna
 h-
 Chatham
 County
 Area,
 Inc./
 0584
Hillsbor  Tampa,    313,500      5      876,179      11     1,102,19      11
 ough      Fla.                                                8
 County
 Board
 of
 County
 Commiss
 ioners/
 3035
Jasper    Monticel     0         0         0         0       97,848       28
 County    lo, Ga.
 Board
 of
 Educati
 on/
 4025
Martin    Williams     0         0         0         0       41,248       2
 County    ton,
 Communi   N.C.
 ty
 Action,
 Inc./
 3020
Mid-      Brooksvi   81,641      10      3,690       0         0          0
 Florida   lle,
 Communi   Fla.
 ty
 Service
 s/0316
Montgome  Montgome   12,430      <1        0         0       49,195       1
 ry        ry,
 Communi   Ala.
 ty
 Action
 Committ
 ee/
 3179
Northeas  Jacksonv  403,740      6      938,247      12     233,004       3
 t         ille,
 Florida   Fla.
 /3053
Oldham    La         6,520       4       8,266       4         27         <1
 County    Grange,
 Board     Ky.
 of
 Educati
 on/
 2614
Pee Dee   Florence    776        0         0         0         0          0
 Communi   , S.C.
 ty
 Action
 Agency/
 3056
Polk      Bartow,    45,913      3      569,643      29     536,462       14
 County    Fla.
 Opportu
 nity
 Council
 , Inc./
 0199
Putnam    Eatonton    206        0         0         0         0          0
 County    , Ga.
 Board
 of
 Educati
 on/
 4017
Singing   Lucedale   1,971       0       27,644      7       20,679       4
 River/    , Miss.
 3219
Sumter    York,      84,880      7      201,050      14     125,465       8
 County    Ala.
 Opportu
 nity,
 Inc./
 3333
Tallatoo  Cartersv   6,985       1       87,980      6       14,068       1
 na        ille,
 Economi   Ga.
 c
 Opportu
 nity
 Authori
 ty/
 3466
Tri-      Bonifay,     0         0         0         0         0          0
 County/   Fla.
 0902
United    Ashland,   19,309      4       55,134      7       25,992       3
 CAC/      Miss.
 3230
Volusia   Deland,      0         0       5,186       0         0          0
 County/   Fla.
 3107
Walker    Jasper,    10,878      2       48,742      7       39,253       5
 County    Ala.
 Board
 of
 Educati
 on/
 0123
--------------------------------------------------------------------------------


                                    Table II.2
                     
                                Region 5--Chicago


Grantee
name and
identifi  Grantee
er        city/     Unspent   Percent   Unspent   Percent   Unspent   Percent of
number    state     balance   of award  balance   of award  balance     award
--------  --------  --------  --------  --------  --------  --------  ----------
Akron-    Akron,     $1,106      <1     $60,452      1      $186,490      3
 Summit    Ohio
 Communi
 ty
 Action
 Agency/
 0391
Allen     Lima,      10,280      2         0         0      272,552       16
 County    Ohio
 School
 Distric
 t/5369
Area      Loganspo   3,675       2         0         0         0          0
 Five      rt,
 Agency    Ind.
 on
 Aging
 and
 Communi
 ty
 Service
 s/4167
Branch    Coldwate   21,250      4         0         0         0          0
 Interme   r,
 diate     Mich.
 School
 Distric
 t/4209
Butler    Hamilton   83,163      9       97,154      6         0          0
 County    , Ohio
 School
 Distric
 t/5445
CAC of    Washingt   12,926      7       7,771       2       19,406       3
 Fayette   on
 County/   Court
 4221      House,
           Ohio
Communit  Marietta   21,242      4       23,101      3         0          0
 y         , Ohio
 Action
 Program
 Corpora
 tion of
 Washing
 ton-
 Morgan
 Countie
 s/4042
CAP       Stevens      0         0         NA        NA        0          0
 Service   Point,
 s,        Wis.
 Inc./
 4190
Catholic  Joliet,   545,597      34      96,477      6         0          0
 Chariti   Ill.
 es
 Diocese
 of
 Joliet,
 Inc./
 1111
Child     Columbus    752        0      1,424,68     46     1,661,62      42
 Develop   , Ohio                          7                   8
 ment
 Council
 of
 Frankli
 n
 County,
 Inc./
 6083
City of   Rockford   29,000      2       20,000      1         0          0
 Rockford  , Ill.
 Human
 Resourc
 es
 Departm
 ent/
 4056
Cooperat  Milton,    35,513      7       12,579      2         0          0
 ive       Wis.
 Educati
 onal
 Service
 Agency
 #2/
 5508
Coshocto  Coshocto     0         0         0         0         0          0
 n         n, Ohio
 County
 Head
 Start,
 Inc./
 5507
Council   Clevelan     NA        NA      74,691      1      1,422,64      10
 for       d, Ohio                                             1
 Economi
 c
 Opportu
 nities
 in
 Greater
 Clevela
 nd/
 0197
Eight     Greenvil  107,764      6       81,057      4       56,690       2
 Communi   le,
 ty        Mich.
 Action
 Program
 , Inc./
 4183
FIVECAP,  Scottvil   1,568       <1        NA        NA       491         <1
 Inc./     le,
 4161      Mich.
Inter-    Oklee,       0         0         0         0       38,057       6
 County    Minn.
 Communi
 ty
 Council
 /4041
Michigan  Grand        NA        NA     103,589      2      194,790       4
 Family    Rapids,
 Resourc   Mich.
 es/
 0115
Northeas  Alpena,   145,483      3       2,191       <1      66,640       1
 t         Mich.
 Michiga
 n
 Communi
 ty
 Service
 Agency/
 4329
Ounce of  Chicago,  127,492      4      110,918      3      787,447       16
 Prevent   Ill.
 ion/
 6100
Rock      Janesvil   23,089      2       24,812      2         0          0
 Walworth  le,
 Compreh   Wis.
 ensive
 Family
 Service
 s,
 Inc./
 4124
St.       Port        900        <1      65,064      6         0          0
 Clair     Huron,
 County    Mich.
 Economi
 c
 Opportu
 nity
 Committ
 ee/
 4016
SEMAC/    Rushford     0         0         0         0       47,966       4
 4231      , Minn.
Southern  East St.   70,915      NA      5,038       <1      2,187        <1
 Illinois  Louis,
 Univers   Ill.
 ity at
 Edwards
 ville/
 5228
Stark     Canton,      0         0         0         0      145,253       4
 County    Ohio
 Communi
 ty
 Action
 Agency/
 4022
Three     Zumbrota     0         0       3,840       1         0          0
 Rivers    , Minn.
 Communi
 ty
 Action,
 Inc./
 4171
Tri-      Rock         0         0       58,289      4      197,390
 County    Falls,                                              9
 Opportu   Ill.
 nities
 Council
 /4111
Warren-   Warren,    33,812      3      157,506      9       72,976       3
 Trumbell  Ohio
 Communi
 ty
 Service
 Agency/
 4005
--------------------------------------------------------------------------------
NA - Information not available. 



                                    Table II.3
                     
                                 Region 6--Dallas


Grantee
name and
identifi  Grantee
er        city/     Unspent   Percent   Unspent   Percent   Unspent   Percent of
number    state     balance   of award  balance   of award  balance     award
--------  --------  --------  --------  --------  --------  --------  ----------
Child     Angleton     $0        0        $689       0         $0         0
 Develop   , Tex.
 ment
 Council
 of
 Brazori
 a
 County/
 0017
Communit  Rio       124,243      8      300,678      14      78,077       3
 y         Grande
 Action    City,
 Council   Tex.
 of
 South
 Texas/
 5025
Communit  Conway,    1,817       <1        0         0         0          0
 y         Ark.
 Action
 Program
 for
 Central
 Arkansa
 s/5247
Communit  No.          34        <1        0         0         0          0
 y         Little
 Organiz   Rock,
 ation     Ark.
 for
 Poverty
 Elimina
 tion/
 0379
Day Care  Fort         0         0      2,431,45     36     619,076       6
 Associa   Worth,                          8
 tion of   Tex.
 Fort
 Worth &
 Tarrant
 County/
 0021
Detroit   Detroit,     0         0         0         0         0          0
 Indepen   Tex.
 dent
 School
 Distric
 t/5170
East      Lake         0         0       20,655      4        536         0
 Carroll   Provide
 Parish    nce,
 Police    La.
 Jury/
 0020
East      Jacksonv     77        <1        72        <1        0          0
 Texas     ille,
 Family    Tex.
 Service
 s/0384
Hays      San       104,664      13      81,446      5       30,693       2
 Caldwell  Marcos,
 &         Tex.
 Blanco
 Countie
 s
 Communi
 ty
 Action,
 Inc./
 5185
Jefferso  Harahan,  153,763      6      322,644      12     837,705       23
 n         La.
 Communi
 ty
 Action
 Program
 , Inc./
 5098
Little    Hugo,       161        <1      1,093       <1        0          0
 Dixie     Okla.
 Communi
 ty
 Action
 Agency,
 Inc./
 5671
Mesa      El Rito,     0         0         0         0      554,606       26
 Vista     N. Mex.
 Consoli
 dated
 School
 Distric
 t/0139
Mid-      Helena,      72        <1       118        <1        0          0
 Delta     Ark.
 Communi
 ty
 Service
 s,
 Inc./
 5099
Neighbor  San        29,204      1         0         0       42,039       1
 s in      Benito,
 Need of   Tex.
 Service
 s,
 Inc./
 0385
Quad      Hammond,   4,518       1       4,125       1      100,507       20
 Area      La.
 CAA/
 0402
Reeves    Pecos,       NA        NA     31,380 1     4       44,303       11
 County    Tex.
 Communi
 ty
 Council
 /5365
Regina    Covingto     17        <1        0         0         0          0
 Coeli     n, La.
 Child
 Develop
 ment
 Center/
 6007
Region    San        5,072       1         0         0       4,425        1
 XX        Antonio,
 Educati   Tex.
 on
 Service
 Center/
 0389
South     Levellan     0         0         0         0         0          0
 Plains    d, Tex.
 CAA/
 5487
Stonewal  Stonewal     NA        NA        0         0         0          0
 l Head    l, Tex.
 Start
 Inc. At
 Trinity
 Luthera
 n
 Church/
 5673
United    Winnsbor     0         0         0         0         0          0
 Ministe   o, La.
 rial
 Allianc
 e,
 Inc./
 0398
Wm.       Bay         173        <1       176        <1       601         <1
 Smith,    City,
 Sr. Tri   Tex.
 County
 Develop
 ment
 Council
 /0387
--------------------------------------------------------------------------------
NA - Information not available. 



                                    Table II.4
                     
                                 Region 8--Denver


Grantee
name and
identifi  Grantee
er        city/     Unspent   Percent   Unspent   Percent   Unspent   Percent of
number    state     balance   of award  balance   of award  balance     award
--------  --------  --------  --------  --------  --------  --------  ----------
Adams     Brighton  $89,980      8      $131,157     9      $216,932      12
 County    , Colo.
 Board
 of
 Commiss
 ioners/
 0008
Akron     Akron,       NA        NA       115        <1     108,180       40
 United    Colo.
 Methodi
 st
 Church/
 0103
Alamosa   Alamosa,   8,961       2       18,514      3       32,081       5
 Head      Colo.
 Start/
 0006
Bismarck  Bismarck     0         0         0         0         0          0
 Public    , N.
 School    Dak.
 Distric
 t/0038
Child     Denver,      0         0         0         0         0          0
 Opportu   Colo.
 nity
 Program
 , Inc./
 0013
Child     Missoula    540        <1      21,113      2       12,766       1
 Start,    , Mont.
 Inc./
 0037
Children  Lakewood     0         0         0         0         0          0
 Servies   , Colo.
 of
 Colorad
 o/0095
Communit  Cheyenne   68,565      13     120,543      17       370         <1
 y         , Wyo.
 Action
 of
 Laramie
 County,
 Inc./
 0092
Newport   Towner,      0         0         0         0         0          0
 Public    N. Dak.
 School
 Distric
 t #4/
 0046
Opportun  Great      2,189       <1        0         0         0          0
 ities,    Falls,
 Inc./     Mont.
 0032
Pueblo    Pueblo,    4,929       1       2,006       <1      7,843        1
 City      Colo.
 Manager
 's
 Office/
 0024
Rocky     Helena,      0         0         0         0       29,031       3
 Mountain  Mont.
 Develop
 ment
 Council
 /0035
Salt      Salt      114,519      3       56,033      1         0          0
 Lake      Lake
 Communi   City,
 ty        Utah
 Action
 Program
 /0061
Thompson  Loveland     0         0       55,463      12      64,180       10
 School    , Colo.
 Distric
 t #25/
 0022
--------------------------------------------------------------------------------
NA - Information not available. 



                                    Table II.5
                     
                                Region 2--New York


Grantee
name and
identifi  Grantee
er        city/     Unspent   Percent   Unspent   Percent   Unspent   Percent of
number    state     balance   of award  balance   of award  balance     award
--------  --------  --------  --------  --------  --------  --------  ----------
Associat  Brooklyn     $0        0         $0        0      $26,349       2
 ed Beth   , N.Y.
 Rivka
 Schools
 Head
 Start
 Divisio
 n/0265
Atlantic  Atlantic  100,363      3         0         0      189,151       5
 Human     City,
 Resourc   N.J.
 es,
 Inc./
 0447
Committe  Keesevil     94        <1        2         <1        22         <1
 e for     le,
 Economi   N.Y.
 c
 Improve
 ment of
 Essex
 County/
 2031
Communit  Deer       15,136      3       3,228       <1       747         <1
 y         Park,
 Program   N.Y.
 s
 Center
 of Long
 Island/
 0245
Long      Patchogu  365,996      6      316,145      5      1,184,50      15
 Island    e, N.Y.                                             3
 Head
 Start
 Child
 Develop
 ment
 Service
 s,
 Inc./
 0271
Madison   Morrisvi   1,214       <1      5,398       1         0          0
 County    lle,
 Coopera   N.Y.
 tive
 Extensi
 on/
 0242
Mercer    Trenton,   98,245      7      130,547      11     140,755       11
 County    N.J.
 Head
 Start
 Child
 Care
 Develop
 ment
 Program
 /0243
Montclai  Glen       58,064      4      158,043      9         NA         NA
 r Child   Ridge,
 Develop   N.J.
 ment
 Center,
 Inc./
 0274
NYS       Schenect     90        <1        0         0         0          0
 Federat   ady,
 ion of    N.Y.
 Growers
 ' &
 Process
 ors'
 Associa
 tion,
 Inc./
 0281
New York  New       182,783      11      56,378      3      220,815       8
 Foundli   York,
 ng        N.Y.
 Hospita
 l/0256
Oneida    Rome,      11,130      1       8,344       1       67,187       4
 County    N.Y.
 Communi
 ty
 Action
 Agency,
 Inc./
 1194
Passaic   Passaic,   19,200      2       34,200      4      285,433       24
 City      N.J.
 Human
 Resourc
 es
 Departm
 ent/
 0005
Ponce     Municipa  1,285,79     28     1,280,94     22     1,423,63      20
 Municip   lity of     4                   2                   1
 ality     Ponce,
 Head      P.R.
 Start
 Program
 /0267
Sullivan  Woodburn   36,192      4         0         0         0          0
 County    e, N.Y.
 Head
 Start,
 Inc./
 0279
Test      Bridgeto  100,343      4       93,867      3      282,450       9
 City      n, N.J.
 Child
 Care
 Center,
 Inc./
 Test
 City
 Head
 Start/
 1102
The City  Brooklyn  8,661,95     12     6,807,43     9      8,513,05      9
 of New    , N.Y.      4                   4                   8
 York
 Human
 Resourc
 es
 Adminis
 tration
 ,
 Agency
 for
 Child
 Develop
 ment/
 1064
Ulster    Kingston    716        <1     177,699      15     152,388       11
 County    , N.Y.
 Communi
 ty
 Action
 Committ
 ee,
 Inc./
 1108
United    Brooklyn     0         0         0         0         0          0
 Talmudi   , N.Y.
 cal
 Academy
 of Boro
 Park/
 0264
--------------------------------------------------------------------------------
NA - Information not available. 


GAO CONTACTS AND STAFF
ACKNOWLEDGMENTS
========================================================= Appendix III

GAO CONTACTS

Fred E.Yohey, Assistant Director, (202) 512-7218
Karen A.  Whiten, Evaluator-in-Charge, (202) 512-7291

ACKNOWLEDGMENTS

The following individuals made important contributions to this
report:  Robert Rogers and Karen Barry planned this review, and Karen
managed the data collection.  David Porter and Lawrence Kubiak
collected much of the data from the HHS regional offices.  Patricia
Bundy also helped to collect data, conducted follow-up discussions
with HHS headquarters and regional office officials, and assisted
with report processing.  Dianne Murphy drew the sample and performed
the analysis.  Steve Machlin calculated sampling errors.  Harry
Conley and Michael Curro provided technical assistance, and Demaris
Delgado-Vega provided legal advice. 


*** End of document. ***