A - Grants Administration and Financial Management

A – 001 What requirements pertain specifically to faith-based programs?

OHS – PC – A – 001
What requirements pertain specifically to faith-based programs?

A faith-based organization that is a Head Start program may use space in its facilities to provide Head Start services without removing religious art, icons, scriptures, or other religious symbols.

In addition, a faith-based Head Start program retains its authority over its internal governance, and it may retain religious terms in its organization’s name, select its board members on a religious basis, and include religious references in its organization’s mission statements and other governing documents.

Head Start grantees and delegate agencies may not engage in inherently religious activities, such as worship, religious instruction, or proselytizing, as part of the services they provide as Head Start programs. If a Head Start program conducts such activities, the activities must be offered separately, in time or location, from the Head Start program and participation must be voluntary.

Requirement

45 CFR 87.1

July 11, 2006

A – 002 Can programs charge parents a fee for being late to pick up their children?

OHS – PC – A – 002
Can programs charge parents a fee for being late to pick up their children?

Head Start regulations preclude the charging of fees to parents for Head Start services. However, if a program incurs expenses to compensate employees for the caring of a child after the Head Start program has ended, parents may be charged a reasonable fee for “after care”. In all cases, fees should be collected by the program and not the employee who is providing "after care" services.

Requirement

45 CFR 1305.9; 42 USC 9840 (b); 2 CFR 215.2 (x); 45 CFR 92.25 (b)

March 15, 2007

A – 003 If a staff member is volunteering for a Head Start related activity during non-paid time, or if they donate materials to the Head Start program and/or its parents, is this allowable as non-federal share?

OHS – PC – A – 003
If a staff member is volunteering for a Head Start related activity during non-paid time, or if they donate materials to the Head Start program and/or its parents, is this allowable as non-federal share?

In regards to staff volunteering time there are three important considerations:

In order to be allowable as non-federal share a particular cost would have to be allowable as “federal share”. That is, these costs would have to be expended on an activity that is consistent with all relevant laws and regulations.
The activity being done by the Head Start staff must not in any way be part of the person’s job responsibilities.
The work must truly be voluntary; there can be no hint that the employee was in any way made to feel that there was no choice in the matter of volunteering. In addition, an employee cannot earn ‘comp’ time or other benefit in exchange for or as a reward for volunteering.

If the three above conditions are met then a staff’s time as a volunteer engaged in an activity is allowable and can be claimed toward a grantee’s non-federal share, valued at a rate for the type of work being done, not necessarily at the employee’s Head Start salary. For example, the time of a Head Start teacher volunteering to help paint the outside of a Head Start center should be valued at the rate of a painter not of a teacher.

In terms of donating materials, the only types of materials that can be counted as non-federal share are those that the program could use grant funds to purchase. So for example, donated classroom supplies would be considered as allowable non-federal share. Clothing for Head Start children could not generally be counted as non-federal share, as Head Start grantees are not authorized to use grant funds to purchase clothing for routine use by Head Start enrolled children and families. However, there are situations where a Head Start child may need a change of clothes during program hours of operation, and if the agency has received donated clothes (including diapers) that are kept on hand for such situations, the value of the clothes could be counted as non-federal share.

Requirement

2 CFR 215.23 (a); 2 CFR 215.23 (c)-(d); 45 CFR 92.24

April 23, 2007

A – 004 Can a grantee that owns a facility and makes the facility available to the Head Start program at no charge count this as non-federal share?

OHS – PC – A – 004
Can a grantee that owns a facility and makes the facility available to the Head Start program at no charge count this as non-federal share?

If a grantee owns a building that was not purchased with Head Start (or other federal) grant funds and is operating a Head Start program in that building, that grantee may calculate a ‘depreciation and use’ allowance for the building and include those costs as non-federal share. For example, a grantee is using a building that it owns to operate a Head Start program. The building is worth, say, $500,000 and has a 25 year useful life. The annual depreciation and use charge for this building is $20,000. The grantee, if Head Start was using the entire building, could include the $20,000 as non-federal share. If Head Start is occupying less than the whole building, the non-federal share would be calculated proportionately based on what percentage of the building was being used by Head Start.

Requirement

45 CFR 92.24 (e); 2 CFR 215.23 (g)

April 23, 2007

A – 005 Can Head Start federal or non-federal share funds be used to pay membership dues or fees?

OHS – PC – A – 005
Can Head Start federal or non-federal share funds be used to pay membership dues or fees?

Head Start agencies may use Head Start funds to pay the costs of the agency’s membership in business, technical, professional, civic or community organizations. Such membership dues or fees should be included in the annual grant application or supplemental application subject to the review and approval of the Regional Office.

Expenditure of Head Start funds for the membership dues of individual agency staff may be allowable if an organization doesn’t accept agency memberships or, if an agency membership would be more expensive. In either case, the grantee would need to be able to demonstrate the advantages of an individual membership to the Head Start program. Any membership dues or fees should be included in the annual grant application or supplemental application subject to the review and approval of the Regional Office.

Requirement

2 CFR 215.23 (a); 45 CFR 92.24 (a)

April 23, 2007
Revised July 31, 2007

A – 006 What types of activities between an enrolled Head Start child and that child’s parent(s) or guardian(s) can be conducted in the child’s home and counted, by the Head Start program, as non-federal share?

OHS – PC – A – 006
What types of activities between an enrolled Head Start child and that child’s parent(s) or guardian(s) can be conducted in the child’s home and counted, by the Head Start program, as non-federal share?

If a Head Start child’s teacher (or home visitor) provides the child’s parents with written plans or guidance as to the types of activities that need to be done with the child at home in order to support the child’s Head Start experience these activities may, when fairly valued, be counted as non-federal share. The "countability" of the parent’s efforts hinge on doing things with the enrolled child that support the child’s Head Start experience, that are articulated by the teacher (or home visitor) and that support the curriculum used by the program. General parenting duties do not constitute activities that can be counted as non-federal share, unless these activities meet the requirements noted above. The valuation of the parent’s time should, unless a program can demonstrate otherwise, be valued at the rate of a teacher’s assistant.

Requirement

2 CFR 215.23 (a); 45 CFR 92.24 (a); 45 CFR 1304.40 (e)(1); 45 CFR 1304.40 (e)(3)

April 25, 2007

A – 007 Can Head Start agencies engage in religious activities, such as prayer, as part of their programs or services?

OHS – PC – A – 007
Can Head Start agencies engage in religious activities, such as prayer, as part of their programs or services?

No. In accordance with 45 CFR 87.1 (c) organizations that receive direct financial assistance from the Department of Health and Human Services, including the Office of Head Start, "may not engage in inherently religious activities, such as worship, religious instruction, or proselytization, as part of the programs or services funded with direct financial assistance from the Department."

Requirement

45 CFR 87.1 (c)

April 26, 2007

A – 008 Does the requirement for Regional Office approval of the hiring of key staff apply to Delegate Agencies?

OHS – PC – A – 008
Does the requirement for Regional Office approval of the hiring of key staff apply to Delegate Agencies?

No. The requirement pertains only to Head Start grantees.

This Policy Clarification is based on ACF-PI-HS-06-01 and the regulation below.

Requirement

45 CFR 74.25 ( c ) ( 2 ) ; 45 CFR 92.30 ( d ) ( 3 )

May 8, 2007

A – 009 We are involved in a state-wide early education teacher training system which requires us to reward candidates who achieve each successive level (CDA, AA, and BA) with a small bonus. I have two questions; (1) are bonuses an allowable cost which can be charged to our Head Start grant, and (2) would this be a permissible use of Training and Technical Assistance funds (Program Accounts 20 and/or 26)?

OHS – PC – A – 009
We are involved in a state-wide early education teacher training system which requires us to reward candidates who achieve each successive level (CDA, AA, and BA) with a small bonus. I have two questions; (1) are bonuses an allowable cost which can be charged to our Head Start grant, and (2) would this be a permissible use of Training and Technical Assistance funds (Program Accounts 20 and/or 26)?

Grantees are allowed to provide incentive payments to staff related to performance or achievement but only as part of incentive program established by the grantee in policy.

2CFR Part 230, Appendix B (8) (j) says, Incentive compensation to employees based on cost reduction or efficient performance, suggestion awards, safety awards etc. are allowable to the extent that the overall compensation is determined to be reasonable and such costs are paid or accrued pursuant to an agreement entered into in good faith between the organization and the employees before the services were rendered, or pursuant to an established plan followed by the organization so consistently as to imply, in effect, an agreement to make such payment.

The above regulation is applicable to private non-profit grantees. While there is no exact equivalent in 2CFR225, applicable to state, local and tribal governments, 2CFR225, Appendix B, (8) (a) (1) says in part that to be allowable personal compensation cost must be reasonable ‘and conform(s) to the established policy of the governmental unit.’ Therefore the same principle would apply. The program must be established in grantees policies.

Thus, for example, an impromptu payment to staff (bonus) motivated by the fact that there is a Head Start budget surplus and staff have ‘done a good job’ would not be allowable. However, the kind of system described in the question would be an example of an allowable incentive payment as long as grantee policies, and probably most appropriately the personnel policies, describe the incentive program.

T/TA funds may be used for this purpose.

Requirement

2 CFR 230, Appendix B (8) (j) ; 2 CFR 225, Appendix B, (8) (a) (1)

May 8, 2007

A – 010 Can a Head Start program have a graduation ceremony for their children at the end of the year?

OHS – PC – A – 010
Can a Head Start program have a graduation ceremony for their children at the end of the year?

Yes. A graduation ceremony is an acceptable activity for a Head Start program to sponsor and it is permissible to use the Head Start center for such an event and for Head Start staff to participate in the graduation ceremony. However, it is important to note that Head Start grant funds may not be used to cover any of the costs of such an event (i.e. special clothing, refreshments, etc.). Programs can seek to get such items donated to the program or parents can raise funds through appropriate fundraising activities. However, the value of such donations cannot be claimed as non-Federal share.

Requirement

2 CFR 225, Appendix B(14); 2 CFR 230, Appendix B(14)

May 22, 2007
Revised July 15, 2008

A – 011 What are the requirements regarding when a grantee must get prior approval before purchasing equipment?

OHS – PC – A – 011
What are the requirements regarding when a grantee must get prior approval before purchasing equipment?

Equipment is defined as any item with a life expectancy of more than one year and an acquisition cost of $5,000 or more per unit. A grantee must receive prior approval from its responsible Regional Office before purchasing any equipment that is valued at $25,000 or more.

Requirement

2 CFR 215.25 (c)(6); 2 CFR 225, Appendix B (15); 2 CFR 230, Appendix B (15)(b); ACF Grants Policy Statement, Part II-1 (incorporated into terms and conditions of all Head Start grant awards)

May 22, 2007

A – 012 Can a Head Start program increase its enrollment if it moves to a new facility which will allow it to have a larger class size than it had in its old facility?

OHS – PC – A – 012
Can a Head Start program increase its enrollment if it moves to a new facility which will allow it to have a larger class size than it had in its old facility?

If, for example, a program could only serve 15 children in one of its classes because there was insufficient space to serve any more children and that program moved to another facility which could accommodate a class size of 20, that program could submit a revised budget proposal to its regional office proposing, with the same funding level, to increase its funded enrollment by 5 children. Such a request would need to indicate what revisions the grantee was proposing to make in its approved budget to cover any additional costs incurred by an increase in enrollment. (OHS understands that many of the operating costs would remain unchanged, nevertheless it is likely there would be some increase in such budget items as classroom supplies.) In no case, should a Head Start program enroll more children than it has been approved to serve in its most recent grant award.

Requirement

45 CFR 1305.2 (f); 2 CFR 215.25 (c)(6); 2 CFR 225, Appendix B (15); 2 CFR 230, Appendix B (15)(b); ACF Grants Policy Statement, Part II-1 (incorporated into terms and conditions of all Head Start grant awards)

June 12, 2007

A – 013 How should a Head Start program value parent volunteer time for purposes of claiming non-federal share?

OHS – PC – A – 013
How should a Head Start program value parent volunteer time for purposes of claiming non-federal share?

The value of the time should be equal to what it would have cost the program to employ someone to do the task for which the parent had volunteered. (It is important to note that for something to be allowable as non-federal it needs to be something for which grant funds could have been used). For example, if a parent is volunteering in the classroom, that parent is, in effect, functioning as a second teacher assistant and the average hourly rate for an assistant in that program (salary and benefits) would be a reasonable charge. If a parent volunteered to help paint the exterior of a Head Start center, then the program can fairly charge as non-federal what it would have cost to hire a painter to do the same work. Programs must ensure that all parent volunteer time is adequately documented.

Requirement

2 CFR 215.23 (d); 45 CFR 92.24 (c)

June 12, 2007

A – 014 Can a grantee that provides land for a Head Start program to build a facility that will be paid by federal funds use the value of the land as in-kind?

OHS – PC – A – 014
Can a grantee that provides land for a Head Start program to build a facility that will be paid by federal funds use the value of the land as in-kind?

Yes, as long as the land’s value has been recently established and the size of the land is appropriate to the proposed facility; i.e. a 200 acre parcel of land is not appropriate for a two classroom facility. The land’s value should be amortized over the expected life of the building and the grantee may claim the annual amortization as non-federal share.

Requirement

2 CFR 215.23 (h)(1); 45 CFR 92.24 (e)

June 19, 2007

A – 015 45 CFR Part 1304.50(f) states that Head Start programs must enable low-income members of the program’s Policy Council, Policy Committee or Parent Committee to participate fully in their group’s responsibility, including, if necessary, reimbursements for reasonable expenses incurred by the members. Are programs mandated to provide reimbursements to over-income members?

OHS – PC – A – 015
45 CFR Part 1304.50(f) states that Head Start programs must enable low-income members of the program’s Policy Council, Policy Committee or Parent Committee to participate fully in their group’s responsibility, including, if necessary, reimbursements for reasonable expenses incurred by the members. Are programs mandated to provide reimbursements to over-income members?

No. Programs are mandated to provide reimbursement only to low-income families. Programs, at their discretion, may, however, provide reasonable reimbursement to all members.

Requirement

45 CFR 1304.50 (f)

June 19, 2007

A – 016 If a State imposes a requirement that individuals must be finger printed in order to complete a criminal background check, do all potential Head Start new hires have to comply?

OHS – PC – A – 016
If a State imposes a requirement that individuals must be finger printed in order to complete a criminal background check, do all potential Head Start new hires have to comply?

Yes. Before an individual can be hired (or be considered permanent if completion of the background check prior to hiring is not feasible) a "State or national criminal record check, as required by State law or administrative requirement", must be completed. If finger printing is required in order to complete the criminal record check, all Head Start new hires in that State will have to comply.
45 CFR 1301.32 (b)

Requirement

45 CFR 1301.31 (b) (1) (iii)

June 26, 2007

A – 017 Is the use of Head Start facilities (in which there is a Federal interest) by community organizations, including faith based organizations, during hours that Head Start is not using them allowed? If allowed, are there any special conditions that pertain?

OHS – PC – A – 017
Is the use of Head Start facilities (in which there is a Federal interest) by community organizations, including faith based organizations, during hours that Head Start is not using them allowed? If allowed, are there any special conditions that pertain?

A Head Start grantee may permit a community organization, including a faith based organization, to use a Head Start facility (in which there is Federal interest) when it is not in use for Head Start purposes. For example, a community organization could be allowed to hold a class in the evening in a Head Start classroom. If there are costs to the grantee, such as heating, lighting or other utilities, OHS expects the Head Start grantee to collect reasonable compensation for those costs.

Informal Guidance

June 26, 2007

A – 018 How should a Head Start program cover the costs of providing health services to an enrolled child if the child’s family is not eligible for Medicaid/EPSDT?

OHS – PC – A – 018
How should a Head Start program cover the costs of providing health services to an enrolled child if the child’s family is not eligible for Medicaid/EPSDT?

The vast majority of Head Start families will be eligible for Medicaid/EPSDT, CHIP or some other publicly supported health care system. If a Head Start program enrolls a child whose family is not eligible for any such system, the Head Start program should seek to have services provided to the child by the program’s local health care providers at no or reduced costs. However, if all other funding sources have been exhausted, a grantee should cover any costs related to a child’s health care by using Head Start grant funds.

Requirement

45 CFR 1304.20 (a)(1)(ii)(A)-(B); 45 CFR 1304.20 (b) (5); 45 CFR 1304.20 (c)(5)

July 3, 2007

A – 019 We have some computer system components which are 7 years old and now incompatible with our newer system. May we transfer it to another part of our agency which still uses this type of equipment; we do not know if it has any residual value since the manufacturer no longer supports the hardware. Additionally, we have a variety of small used items such as books, blocks, small furniture which have been replaced by newer materials. It has been suggested that we sell this off at a garage sale or flea market, would this be all right to do?

OHS – PC – A – 019
We have some computer system components which are 7 years old and now incompatible with our newer system. May we transfer it to another part of our agency which still uses this type of equipment; we do not know if it has any residual value since the manufacturer no longer supports the hardware. Additionally, we have a variety of small used items such as books, blocks, small furniture which have been replaced by newer materials. It has been suggested that we sell this off at a garage sale or flea market, would this be all right to do?

Grantees which are units of local, state government or Tribal governments need to be guided by 45CFR Part 92 and Private non-profit grantees and institutions of higher education need to be guided by 45CFR Part 74.

If the small items mentioned above had an acquisition cost of less than $5,000 and the supplies, in aggregate, do not currently exceed $5,000 in fair market value, the grantee may use them in another federally funded program or sell the items and record the proceeds as program income to its Head Start grant. The manner of sale is not specified and given the likely value of the items described above, the garage sale or flea market would be acceptable. As with any financial transaction grantees must keep a record of the transaction, including a description of what was sold, for how much it sold and the bookkeeping entry of the program income.

In the case of equipment (an item with an acquisition cost of $5,000 or more and a useful life of at least one year) with a current fair market value of at least $5,000 the grantee may keep the equipment for use elsewhere as long as the federal government is reimbursed, at fair market value. If the equipment is no longer needed by the grantee, the Grants Officer of the ACF regional office originating the grant should be contacted for disposal instructions.

If the current fair market value is below $5,000, state, local or Tribal governments may retain, sell or otherwise dispose of such equipment with no further obligation to ACF. (45 CFR 92.32 (e) (1)). Non-profit grantees may sell the equipment but the proceeds must be treated as program income to the Head Start grant and reported on final Financial Status Report (SF – 269) for the applicable budget period. If there is uncertainty as to the value of an item, it is always safest to request disposal instructions from the ACF Grants Officer.

Requirement

2 CFR 215.34 (b)-(g); 2 CFR 215.35; 45 CFR 92.32 (c); 45 CFR 92.32 (e)-(f); 45 CFR 92.33

July 3, 2007

A – 020 We have some employees who, after calculating the COLA, will be over the top of the scale for their positions and therefore cannot get the COLA. It has been suggested that some sort of lump sum payment could be used to compensate these employees. Would this be permissible?

OHS – PC – A – 020
We have some employees who, after calculating the COLA, will be over the top of the scale for their positions and therefore cannot get the COLA. It has been suggested that some sort of lump sum payment could be used to compensate these employees. Would this be permissible?

No. Head Start grantees have been instructed since FY 1999 that when allocating any funding increases designed to provide staff cost-of-living raises that "COLA increases should be used to permanently increase Head Start pay scales, rather than only increasing the salaries of current employees." Thus, assuming that there are not issues involving either the ‘compensation cap’ or ‘wage comparability’, every employee should get a COLA and the top step of the salary scale (as well as all the other steps) should be adjusted upward commensurate with the amount of the COLA. Please also see the statute, Sec. 653 of [42 U.S.C. 9848], for further guidance.

Informal Guidance

July 3, 2007

A – 021 Our grantee agency is self-insured for workmen's comp costs. The agency submits an annual bill to Head Start for workmen's comp costs fund. This bill covers the costs for staff who are employed in the Head Start program. Should Head Start related workmen's comp costs exceed the funds paid, a subsequent bill will be submitted by the agency. This fiscal procedure has afforded Head Start to make more effective budgetary decisions about this expenditure. Is this procedure within federal regulations and policies?

OHS – PC – A – 021
Our grantee agency is self-insured for workmen's comp costs. The agency submits an annual bill to Head Start for workmen's comp costs fund. This bill covers the costs for staff who are employed in the Head Start program. Should Head Start related workmen's comp costs exceed the funds paid, a subsequent bill will be submitted by the agency. This fiscal procedure has afforded Head Start to make more effective budgetary decisions about this expenditure. Is this procedure within federal regulations and policies?

Yes, such a practice is acceptable. However, grantees need to carefully evaluate the cost effectiveness of such an approach. Where a grantee receives funding from multiple sources it is important in any such arrangement that the cost of this program be allocated over all of the benefiting programs in an equitable way using a documented methodology. Grantees must maintain records documenting how this (as well as other) shared costs are allocated among all parts of the organization that benefit from incurring the cost. Grantees must have a cost allocation system in place and the allocation should be based on actual cost. Many states and local governments, such as counties and local school districts, are self insured.

Informal Guidance

July 3, 2007

A – 022 We have some parents who sometimes volunteer in the classroom by helping the teachers with whatever is necessary. In essence they are doing the job of an "Assistant Teacher". Does the regulation require these volunteers to specify exactly what they did, i.e. read a story, cleaned up after lunch, prepared the cots for naptime etc. or can they just put it down as "Teacher’s Assistant"?

OHS – PC – A – 022
We have some parents who sometimes volunteer in the classroom by helping the teachers with whatever is necessary. In essence they are doing the job of an "Assistant Teacher". Does the regulation require these volunteers to specify exactly what they did, i.e. read a story, cleaned up after lunch, prepared the cots for naptime etc. or can they just put it down as "Teacher’s Assistant"?

It would be sufficient to simply categorize the parent’s activity as ‘Teacher’s Assistant’, assuming there is a ‘Teacher Assistant’s’ job description maintained by the Head Start program. Grantees should use the same procedure for any of the jobs for which there are paid employees and, therefore, job descriptions. For volunteer activities for which there is not a job description, grantees that anticipate using those volunteer services on an ongoing basis should establish a position description for that volunteer activity and in the description explain the basis for arriving at the hourly compensation level that will be used for claiming non-federal share. For example, if a grantee twice a year has a volunteer Saturday Center Clean-up Day that grantee might create a position description for a maintenance worker (assuming it does not already have one) and describe the duties and basis for valuing the service. Then on the individual timesheets for all the volunteers the grantee would only have to put Activity: Maintenance Worker (Volunteer). When a grantee does not have a valid position description it will have to create individual documentation for a particular volunteer activity, including a description of the work, the basis for valuation etc. As an alternative to developing job descriptions for all of the volunteer donated activity, programs may choose to identify and describe the activity on the volunteer time sheet.

Grantees are reminded that irrespective of how they determine the type of work performed by the volunteer (and, therefore, its value to the program), the use of volunteer time as match must include the establishment of a wage scale based upon the grantee agency’s internal scale or prevailing wages in the area. All volunteer time needs to be carefully documented by time sheets with the hours recorded and be verifiable from the grantee’s records; i.e. the date, times and location of the volunteer service and corroborated by the signature of both the volunteer and the volunteer’s supervisor. Programs may choose to use a monthly time sheet for regular volunteers or daily time sheets for occasional volunteers.

Requirement

2 CFR 215.23 (d), 45 CFR 92.24 (c)(1)

July 3, 2007

A – 023 Please explain why 1304.40 (b)(1)(i) does not allow for donated clothing to be counted as in-kind when it is provided for families to take home, especially in crisis situations such as house fires, or fleeing domestic violence.

OHS – PC – A – 023
Please explain why 1304.40 (b)(1)(i) does not allow for donated clothing to be counted as in-kind when it is provided for families to take home, especially in crisis situations such as house fires, or fleeing domestic violence.

The limitations on what can be counted as non-federal share is an issue of what would be an allowable cost to be charged to the Head Start grant. That is largely defined by the Head Start program performance standards which describe what a grantee is expected to provide in terms of services to children and families. A good gauge of whether something would be allowable as non-federal share is whether it could be justified as a federal cost charged to your grant. The purchase of clothing for children and families would not be an allowable use of federal funds (and therefore non-federal) because providing such an activity is beyond the scope of the purposes of the Head Start program. The language at 1304.40(b) is under the heading of "Accessing community services and resources" and is not meant to suggest that Head Start programs could use grant funds to directly provide such services or resources.

Please note: Donated clothing used for class room activities (e.g. dress-up time) or rain coats for use in inclement weather are examples of allowable in-kind contributions.

Requirement

2 CFR 215.23 (a), 45 CFR 92.24 (b)(7)

July 3, 2007

A – 024 Are there times when grantees can award a sole source contract?

OHS – PC – A – 024
Are there times when grantees can award a sole source contract?

Grantees are expected to follow standard government procurement procedures and to solicit bid estimates from several potential contractors. However, there may occasionally be situations in which competitive bid procedures would not make sense given there is only one organization which produces the product needed by the grantee (i.e. a specific piece of software). In this situation grantees should clearly document the process they followed and explain on what basis they concluded that a sole source contract was appropriate. Grantees should discuss any such situation with their OHS Regional Office before making any non-competitive contract award.

Requirement

2 CFR 215.43; 2 CFR 215.44 (e)(2); 45 CFR 92.36 (d)(4); 45 CFR 92.36 (g)(2)

July 13, 2007

A – 025 Can a Head Start program purchase gift certificates for Head Start children with donations/fund raising, etc.?

OHS – PC – A – 025
Can a Head Start program purchase gift certificates for Head Start children with donations/fund raising, etc.?

If the Head Start program itself is conducting a fund raising effort or receives a donation these funds need to be considered as program income and your OHS Regional Office needs to be advised that your program has generated program income. Program income can only be used for purposes consistent with the Head Start grant and, therefore, could not be used, for example, to give Head Start children gift certificates.

However, if the fund raising was done by an entity other than the Head Start program; i.e. friends of ABC Head Start, then whatever monies were collected from the fund raising event could be used at the discretion of the entity doing the fund raising including, if so desired, giving Head Start children gift certificates. This entity could also use funds that were donated to it at its own discretion consistent, of course, with any applicable state or local requirements.

Requirement

2 CFR 225, Appendix A (C)(1); 2 CFR 230, Appendix A (A)(2)

July 13, 2007

A – 026 What is the relationship between indirect cost rates and Administration and Development costs? Is it possible for a grantee with an indirect cost rate over 15% to exceed the 15% cap on Administration and Development costs?

OHS – PC – A – 026
What is the relationship between indirect cost rates and Administration and Development costs? Is it possible for a grantee with an indirect cost rate over 15% to exceed the 15% cap on Administration and Development costs?

Indirect costs are those costs which cannot be associated with only one program (funding source) in a grantee. Payroll costs, accounting costs, the salary of an executive director are examples of costs that benefit all the different programs in a grantee organization. To cover these costs grantees are given an indirect cost rate by the grantee’s cognizant federal agency (the agency that is the grantee’s largest source of federal funding). There is no direct relationship between indirect costs rates and Administrative/Development costs except that most (but not all; i.e. a nurse) items in an indirect cost pool are considered as administrative costs. However, irrespective of a grantee’s indirect cost rate, no grantee can incur development and administrative costs that exceed 15% of its total budget (federal and non-federal) unless the grantee has been given a waiver by OHS.

Requirement

2 CFR 225, Appendix A (F); 2 CFR 230, Appendix (C); 45 CFR 1301.32

July 13, 2007

A – 027 Can federal dollars be used to give incentives to Head Start parents for reasons such as perfect attendance at meetings, referring another eligible child, etc?

OHS – PC – A – 027
Can federal dollars be used to give incentives to Head Start parents for reasons such as perfect attendance at meetings, referring another eligible child, etc?

No, federal dollars can only be used to provide those services required by Head Start statute or regulation to enrolled children and families.

Requirement

2 CFR 225, Appendix A (C)(1); 2 CFR 230, Appendix A (A)(2)

July 13, 2007

A – 028 What can you do if you suspect that a member of the governing body is receiving or taking advantage of Head Start funds?

OHS – PC – A – 028
What can you do if you suspect that a member of the governing body is receiving or taking advantage of Head Start funds?

Any allegations of misuse of Head Start grant funds or concerns about the use of such funds should be addressed to the Regional Office and should include as much factual detail and specificity as possible.

Informal Guidance

July 13, 2007

A – 029 State daycare rules and Head Start’s rules sometimes differ. Which rule must Head Start programs comply with? Why?

OHS – PC – A – 029
State daycare rules and Head Start’s rules sometimes differ. Which rule must Head Start programs comply with? Why?

If State law or local requirements are more comprehensive or more stringent than federal requirements, State law or local requirements must be followed.

Requirement

45 CFR 1306.30 (c)

July 13, 2007

A – 030 Can program funds be used to reimburse families for mileage expenses to and from socialization activities in the home-based program option?

OHS – PC – A – 030
Can program funds be used to reimburse families for mileage expenses to and from socialization activities in the home-based program option?

Head Start agencies may use funds to reimburse families for transporting their children to and from socialization activities in the home-based program option.

Transportation services to children served under the home-based option for Head Start and Early Head Start services are excluded from the requirements of 45 CFR 1310.12, 1310.15(c), and 1310.16 related to the use of school buses and allowable alternate vehicles, child restraint systems, and bus monitors.

Requirement

2 CFR 225, Appendix A (C)(1); 2 CFR 230, Appendix A (A)(2); 45 CFR 1304.40 (e)(2); 45 CFR 1306.33 (c); 45 CFR 1310.12 ; 1310.15(c) ; and 1310.16

July 19, 2007

A – 031 If a Head Start program enrolls (as part of its 10%) children from families who are not low-income and these families do not have medical insurance, how would the program pay for health services provided to these children?

OHS – PC – A – 031
If a Head Start program enrolls (as part of its 10%) children from families who are not low-income and these families do not have medical insurance, how would the program pay for health services provided to these children?

Head Start programs must seek all alternative sources of funding for the costs to provide enrolled children health services. Such sources could include Medicaid/EPSDT, CHIP or services provided by your community doctor at no or reduced cost to your program. However, when a program is unable to find alternative funding sources to cover the costs of all required health services, the program should use Head Start grant funds to cover these costs. This should be made clear in your annual budget submission or, as appropriate, in your budget revision request.

Requirement

45 CFR 1304.20 (c)(5)

July 19, 2007

A – 032 Can Head Start program funds be used to cover a family’s health insurance co-payment, or deductible?

OHS – PC – A – 032
Can Head Start program funds be used to cover a family’s health insurance co-payment, or deductible?

Yes, Head Start funds may be used to cover the costs of professional medical and dental services, including health insurance co-payment or deductible, for Head Start children but only when no other source of funding is available.

Requirement

45 CFR 1304.20 (c)(5)

July 31, 2007

A – 033 Can programs count, as non-federal share, the time spent by a parent walking his/her child to the Head Start center?

OHS – PC – A – 033
Can programs count, as non-federal share, the time spent by a parent walking his/her child to the Head Start center?

No. If a Head Start/Early Head Start program transports a Head Start child to a center, that child becomes Head Start’s responsibility from the time the child boards the bus. If a program is not providing transportation, the child becomes Head Start’s responsibility at the time the child enters the Head Start center. Any activities prior to either of these times is not considered to be part of the Head Start day and, therefore, not chargeable to the Head Start grant, as either federal or non-federal share.

Requirement

2 CFR 215.23 (a); 45 CFR 92.24 (b)(7)

July 31, 2007

A – 034 If a program operates both a Head Start and an Early Head Start program, is the 20% non-federal share requirement and the 15% administrative cap applied to both programs separately or to just the total program’s grant?