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FY 2016 Head Start Funding Increase

NOTICE: This Issuance is currently under review by the Office of Head Start.

U.S. Department
of Health and Human Services

Administration for Children and Families

1. Log Number: ACF-PI-HS-16-03
2. Issuance Date: 04/27/2016
3. Originating Office: Office of Head Start
4. Key Words: Consolidated Appropriations Act; Appropriations; Fiscal Year (FY) 2016; Funding Increase; Cost of Living Adjustment (COLA)

Program Instruction

To: All Head Start and Early Head Start Grantees, Including Delegate Agencies, Early Head Start-Child Care Partnerships, and State Collaboration Grantees

Subject: FY 2016 Head Start Funding Increase


President Obama signed Public Law 114-113, the Consolidated Appropriations Act of 2016, on December 18, 2015. This Act includes $9,168,095,000 for programs under the Head Start Act, which is an increase of approximately $570 million over the fiscal year (FY) 2015 funding level.

The approximately $570 million increase provides grantees a 1.8 percent cost of living adjustment (COLA), depending on final funding decisions. The FY 2016 funding level also includes $294 million to support programs in lengthening their day and year, and $135 million for Early Head Start-Child Care (EHS-CC) Partnerships and Early Head Start (EHS) Expansion. We will provide more information in the coming weeks about how to apply for these funds.

This Program Instruction (PI) provides information about the additional funds that are available to Head Start and Early Head Start grantees in FY 2016 for the COLA and describes the requirements for applying for these funds. Grantees that already received partial funding for FY 2016 are eligible to receive a supplemental award for the COLA. Grantees that are subject to competition for continued funding through the Designation Renewal System are also eligible to receive the COLA. State Collaboration grants are not eligible for the COLA due to the statutory cap on their funding in the Head Start Act.

FY 2016 COLA
Each grantee, including those with EHS-CC Partnership funding, may apply for a COLA increase of 1.8 percent of the FY 2015 base funding level. Base funding excludes training and technical assistance (T/TA) funds and any one-time funding grantees may have received in FY 2015. COLA funds are to be used to increase staff salaries and fringe benefits and to pay for higher operating costs.

Programs that use COLA funds to increase staff salaries should increase the hourly rate of pay and permanently increase the Head Start pay scale rather than only increase the salaries of current employees. Sections 653 and 640(j) of the Head Start Act provide further guidance on the uses and limitations of the COLA funds. Section 653 of the Act restricts compensation to a Head Start employee that is higher than the average rate of compensation paid for substantially comparable services in the area where the program is operating. Section 653 also prohibits any Head Start employee from being compensated at a rate higher than that of an Executive Schedule Level II position. Section 640(j) of the Act requires that the compensation of Head Start employees must be improved regardless of whether the agency has the ability to improve the compensation of staff employed by the agency that do not provide Head Start services.

Each grantee, as specified in 45 CFR 1301.31 of the Head Start Program Performance Standards, is required to have personnel policies that specify salary rates and fringe benefits. Any grantee proposing differential COLA increases to staff, delegates, or partners must justify its rationale in its budget narrative.

Funds remaining after providing the COLA increase in the hourly rate of pay may be used to offset increased operating costs in other areas of the budget. This includes increased costs in rent, utilities, facilities maintenance and insurance, contractual arrangements, vehicle fuel, and maintenance, supplies, and equipment.

Application Requirements
Grantees are required to request these funds through a grant application. Your Regional Office will send a Funding Guidance Letter to provide information on the amount of funds available to your agency this year and to offer further guidance on the application requirements. Grantees must submit a grant application or supplemental application in the Head Start Enterprise System (HSES) that includes:

  • SF-424 Application for Federal Assistance
  • Program narrative
  • Budget and budget narrative
  • Signed statements of the governing body and Policy Council chairs and minutes documenting each group’s participation in the development and approval of the application

As always, grantees encountering one-time needs, especially related to health and safety concerns, should contact their Regional Office throughout the year.

Please direct any questions regarding this PI to your Regional Office.

Thank you for the work you do on behalf of children and families.

/ Blanca Enriquez /

Blanca Enriquez
Office of Head Start

See PDF Version of Program Instruction: