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FINANCIAL REQUIREMENTS OF THE HEAD START ACT

Improving Head Start for School Readiness Act of 2007, PL 110-134


Section
637

Description
Definition of deficiency includes:
Misuse or improper use of funds Loss of financial viability Failure of the Governing Body to fully exercise its legal and fiduciary responsibilities Limits Federal funds to no more than 80% of program costs States waiver criteria Allows match to be in the form of cash or in-kind (based on a fair valuation) If Federal grant funds are received for COLA, grantee must improve compensation of staff, regardless of ability to improve compensation of staff who do not provide Head Start services Has legal and fiscal responsibility for the agency At least one member must have a background and expertise in financial management If none can serve as a member, must use financial consultant to work directly with the Governing Body Shall not have a financial conflict of interest with the agency or delegate Shall not receive compensation for serving on the Board or for providing services to the agency Shall not be employed by, nor family members be employed by the agency or a delegate Shall operate as an entity independent of staff employed by the agency Exception: if the position, held as a result of public election or political appointment, provides compensation then the individual is not prohibited from receiving that compensation Shall not have a conflict of interest with the agency or delegate Shall not receive compensation for serving on the Policy Council or for providing services to the agency

640

Limitations on Assistance as it relates to non-Federal match:


640 642

Limitations on assistance as it relates to cost of living increases:

Governing Body:

642

Members of the Policy Council:


FINANCIAL REQUIREMENTS OF THE HEAD START ACT


642 Agency Responsibilities:
Sharing of accurate and regular information for use by the Governing Body and Policy Council, about program planning, policies, and agency operations, including: monthly financial statements, including credit card expenditures; monthly reports of meals and snacks provided through USDA; the annual financial audit; communications and guidance received from HHS Training and technical assistance shall be provided to members of the Governing Body and Policy Council to ensure they understand the information they receive and can effectively oversee and participate in the agency In order to receive Federal grant funds, an agency shall document strong fiscal controls, including the employment of wellqualified fiscal staff with a history of successful management of a public or private organization Legal and fiscal responsibility for administering and overseeing the program Safeguarding Federal funds Adopting practices that assure active, independent, and informed governance of the agency Ensuring compliance with Federal, State, and local laws and regulations Reviewing all grant applications Reviewing and approving all major policies of the agency, including the: annual financial audit fiscal provisions of grant application implementing corrective actions personnel policies for hiring, termination, and compensation of staff Approving financial management, accounting, and reporting policies Compliance with laws and regulations related to financial statements Approval of all major financial expenditures of the agency Selection of the independent financial auditors, who shall then report all Critical accounting policies and practices to the Governing Body Monitoring of the agencys actions to correct any audit findings Reviewing results from monitoring reviews, and ensuring appropriate follow-up activities Standards and procedures for resolving conflict of interest by Governing Body members, employees, or consultants

642

Governing Body Responsibilities:


FINANCIAL REQUIREMENTS OF THE HEAD START ACT


644 Administrative Requirements and Standards:
Observe standards of organization, management, and administration that will ensure their activities are conducted effectively, efficiently, and free of any taint of partisan political bias or personal or family favoritism. Establish rules to carry out this section, including rules to assure full staff accountability in matters governed by law, regulations, or agency policy. Make available to the public a report published each fiscal year that includes disclosures related to: total public and private funds received and amounts from each source an explanation of budgetary expenditures and proposed budget for the fiscal year results of the most recent monitoring review the most recent financial audit Adopt rules designed to establish specific standards governing salaries, salary increases, travel and per diem allowances, and other employee benefits Assure that only persons capable of discharging their duties with competence and integrity are employed, and that employees are promoted or advanced under impartial procedures calculated to improve agency performance and effectiveness Guard against personal or financial conflicts of interest Define employee duties in an appropriate manner Limit allowable administrative costs to a maximum of 15% and provide for possibility of waiver for up to 12 months Establish policies and procedures to ensure shared costs for services or facilities are fairly allocated to all the programs Not use Federal funds to purchase, construct, or do major renovations on a facility unless HHS approves a request that is submitted by such agencies Pay all laborers and mechanics employed by contractors or subcontractors in the construction or renovation of facilities not less than the prevailing wages on similar construction in the local area (Davis-Bacon Act) Agencies are prohibited from expending Federal grant funds to pay legal fees or other costs pursuant to an appeal.

646

Appeals, Notice, and Hearing:

FINANCIAL REQUIREMENTS OF THE HEAD START ACT


647 Records and Audits:
Keep accounting records that fully disclose: the amount of grant funds and expenditure of those funds total costs of the program, and amounts supplied by other sources such other records as will facilitate an effective audit States that HHS and GAO or any of their authorized representatives shall have access for the purpose of audit or examination to any books, documents, papers, and records that are pertinent to the grant. Maintain and annually submit a complete accounting of administrative expenses Not 30 days after completion of an audit, submit a HHS copy of the audit management letter and of any findings are they related to the program Agencies must: Pay their employees at least the minimum wage rate (prescribed by Fair Labor Standards Act) Provide compensation according to salary scales based on training and experience Not use Federal funds to pay any part of the compensation of an individual employed by the agency if such compensation, including non-Federal funds, exceeds an amount equal to the rate payable for Level II of the Executive Schedule ($179,700). Defines compensation to: include salary, bonuses, periodic payments, severance pay, the value of any vacation time, the value of a compensatory or paid leave benefit not excluded by subparagraph (B) , and the fair market value of any employee perquisite or benefit not excluded by subparagraph (B) exclude any agency expenditure for a health, medical, life insurance, disability, retirement, or any other employee welfare or pension benefit. Agencies, or employees during work hours, cannot engage in any political activity, or any activity that provides voters/prospective voters with transportation to polls No Head Start funds may be used to conduct voter registration activities

653

Comparability of Wages:

656

Political Activities: