HHS sends letter to Committee on Education and Labor over improper practices by Head Start grantees

May 19 2010

U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius sent a letter to Chairman George Miller and the Committee on Education and Labor regarding the Government Accountability Office (GAO) investigation into improper practices by Head Start grantees. The investigation is the subject of the Committee's upcoming hearing. Secretary Sebelius' letter outlines HHS's plans and steadfast commitment to upholding the integrity of this critical program.

Also today, the Secretary sent a letter to every Head Start grantee in the country underscoring the serious nature of these allegations of fraud, making clear that the Department will not tolerate intentional violations of Head Start rules and regulations.

The text of the letter is included below.

May 17, 2010

The Honorable George Miller
Chairman, Committee on Education and Labor
U.S. House of Representatives
Washington, D.C. 20515

Dear Mr. Chairman:

Thank you for holding a hearing on Tuesday to discuss the investigation by the Government Accountability Office (GAO) into improper eligibility determination practices by employees in approximately eight Head Start programs and other forms of misconduct in select programs. President Obama has been briefed on GAO's investigation, and I am writing to you to share our steadfast commitment to upholding the integrity of this critical program and my Department's concrete plans for reducing errors and fraud.

According to GAO, individuals employed by eight Head Start programs made determinations that children were eligible for Head Start services despite being given evidence that the families' incomes were above the eligibility limit. If proven, these actions would represent serious breaches of the public trust.

As a leader on Head Start, you know that the program is designed to put our nation's low-income children on a road to opportunity. Allowing ineligible children to enroll in the program is a blatant violation of Head Start's rules, and it steals opportunity from children who need it most. Our Administration will not stand for it.

As soon as I was given the names of the grantees that GAO alleges to have engaged in fraudulent eligibility practices, I referred the cases to the HHS Inspector General, the Department's investigative arm. The Inspector General has advised that the discussion of allegations regarding specific Head Start programs could jeopardize an ongoing investigation into each of these grantees. However, if either the Inspector General or the Office of Head Start develops evidence of fraudulent activity or misuse of funds by any Head Start grantee, we will take swift and appropriate action. Such action may include initiating the suspension or termination of Head Start grants, requiring grantees to fire employees who have engaged in wrongdoing, and referring cases for criminal prosecution.

We also are moving rapidly to bolster program integrity efforts across the Head Start program and prevent any future misconduct. On May 10, the Administration for Children and Families issued program guidance reminding grantees of their legal obligations to verify the eligibility of each child served in Head Start programs and the serious consequences for falsifying eligibility determinations. And today I am sending a letter to every Head Start grantee in the country to underscore the serious nature of these allegations and notify them that the Department is intensifying its oversight and enforcement actions.

Among the actions we will take, in the coming weeks the Office of Head Start will begin unannounced visits to Head Start centers as part of its ongoing monitoring and oversight efforts. Our Administration believes these unannounced visits are an essential tool in our effort to ensure full compliance with Head Start rules and to require centers to correct their shortcomings or lose Head Start funding. We also will develop new regulations to tighten verification and eligibility procedures, strengthen our efforts to identify grantees at risk for failing to meet program requirements, and require at-risk programs to mitigate those risks.

Additionally, we want to enlist the help of others in identifying fraud or misuse of funds, so we soon will create a web-based "hotline" at the Administration for Children and Families (ACF) website to enable citizens - including employees who want to do the right thing, parents, and others - to tell us if they have reason to believe that funds are being misused in Head Start or in other programs within ACF. And finally, we will vigorously implement the "re-competition" provisions of the Head Start reauthorization legislation so that, even when immediate suspension or termination is not in order, grantees with lapses in their financial practices or in the quality of services they provide are forced to compete against other organizations for Head Start funding.

Fighting fraud and ensuring program integrity are central to my mission as Secretary of Health and Human Services. Our work to protect Head Start from fraud and mismanagement is part of my Department-wide Program Integrity Initiative, including our ground-breaking partnership with the Department of Justice to combat Medicare fraud. Last week I created the first-ever Secretary's Council on Program Integrity, comprised of the heads of every division within HHS. This Council will bring together the Department's senior leadership on a regular basis to conduct risk assessments of programs or operations most vulnerable to waste, fraud, or abuse; enhance existing program integrity initiatives or create new ones; share best program integrity practices throughout HHS; and measure the results of our efforts.

Beyond Head Start, I will hold this Council accountable to provide me with practical solutions to address longstanding program integrity issues in Medicare and Medicaid and emerging challenges we are seeing in programs such as LIHEAP. We will work closely with the Office of the Inspector General in these endeavors.

In closing, I want to underscore that the vast majority of people who work at Head Start centers are dedicated professionals who work hard to deliver a better future to more than 900,000 children within the confines of the law. We cannot allow a few unscrupulous individuals or grantees to undermine the mission of Head Start. The Department has an obligation to be good stewards of the American people's tax dollars, and I am firmly committed to fulfilling that responsibility.

Sincerely,

Kathleen Sebelius

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