Head Start: Designation Renewal System

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Head Start: Designation Renewal System

Summary

Head Start is a federal program that has provided comprehensive early childhood development

services (e.g., education, health, nutrition, and social services) to low-income children and their

families since 1965. These services are intended to promote the school readiness of children by

enhancing their cognitive, social, and emotional development. At the federal level, Head Start is

administered by the Office of Head Start within the Administration for Children and Families at

the U.S. Department of Health and Human Services (HHS). Federal Head Start funds are

provided directly to local public and private nonprofit and for-profit agencies (called “grantees”),

rather than through states. At this time, programs are administered by roughly 1,600 grantees.

Since the program’s inception, Head Start grantees have generally been given grant awards for

indefinite periods (i.e., awards with no end date). However, the 2007 Head Start reauthorization

law (P.L. 110-134) changed this by instituting a five-year designation period for Head Start

grantees. Under this law, at the end of its five-year designation period, a grantee must

demonstrate that it is delivering high-quality and comprehensive services, or else the grant is to

be opened for re-competition. The law refers to the process of identifying grantees for recompetition as the Designation Renewal System (DRS). The law tasked HHS with establishing

the DRS in consultation with a panel of experts and based on parameters specified in the law.

In January 2008, HHS convened an Advisory Committee on Re-designation of Head Start

Grantees. Twelve months later, the advisory committee released a report with formal

recommendations for implementing the DRS. In September 2010, HHS published a Notice of

Proposed Rulemaking (NPRM) on the DRS based, in part, on the advisory committee’s

recommendations. HHS received approximately 16,000 comments on the proposed rule from

Head Start grantees, parents, teachers, state associations, national organizations, academic

institutions, and legal entities. HHS took all comments into consideration before publishing a

final rule on the DRS in November 2011.

The DRS final rule established seven indicators for identifying Head Start grantees that are not

providing “high-quality and comprehensive services.” The indicators address various aspects of

program quality, licensing and operations, and fiscal and internal controls. Any grantee that fails

to meet the minimum quality standards set by one or more of the seven indicators will

automatically be required to compete for continued funding.

Under the terms of the final rule, the DRS became effective on December 9, 2011. That month,

HHS announced the first cohort of grantees required to re-compete. A second cohort of grantees

designated for re-competition was announced in January 2013. DRS competitions began in 2012.

As of July 2013, HHS had awarded roughly 153 grants through DRS competitions.

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Head Start: Designation Renewal System

Contents

Introduction...................................................................................................................................... 1

DRS Background ............................................................................................................................. 2

The 2007 Reauthorization Law ................................................................................................. 3

Secretary’s Advisory Committee on Re-designation ................................................................. 3

Notice of Proposed Rulemaking ................................................................................................ 4

DRS Final Rule ................................................................................................................................ 5

Indicators/Triggers..................................................................................................................... 5

Differences from the NPRM...................................................................................................... 6

Tribal Consultations .................................................................................................................. 6

How Are Deficiencies Identified? ............................................................................................. 7

What Is the CLASS: Pre-K? ...................................................................................................... 7

DRS Implementation ....................................................................................................................... 9

Competition Process .................................................................................................................. 9

Competition Results ................................................................................................................ 10

Additional DRS Issues ................................................................................................................... 11

Final Decisions and Appeals ................................................................................................... 11

Legal Challenges ..................................................................................................................... 11

Evaluation of the DRS ............................................................................................................. 12

Tables

Table 1. DRS Chronology ................................................................................................................ 1

Table 2. CLASS: Pre-K Scores for Head Start Grantees: Average Scores, DRS Minimum

Quality Thresholds, and Bottom Decile Scores for FY2012 ........................................................ 8

Table 3. DRS Triggers for Identifying Grantees for Re-competition ............................................ 13

Contacts

Author Contact Information........................................................................................................... 14

Acknowledgments ......................................................................................................................... 14

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Head Start: Designation Renewal System

Introduction

Head Start is a federal program that has provided comprehensive early childhood development

services (e.g., education, health, nutrition, and social services) to low-income children and their

families since 1965.1 These services are intended to promote the school readiness of children by

enhancing their cognitive, social, and emotional development. Most children served in Head Start

programs are three- and four-year-olds, but in the mid-1990s Head Start was expanded to include

Early Head Start programs targeted to infants, toddlers, and expectant parents. In this report, the

term Head Start is inclusive of the Early Head Start program, unless otherwise specified.

At the federal level, the Head Start program is administered by the Office of Head Start (OHS)

within the Administration for Children and Families (ACF) at the U.S. Department of Health and

Human Services (HHS). HHS provides federal Head Start funds directly to local public and

private non-profit and for-profit agencies (called “grantees”), rather than through states. Head

Start programs are locally designed and are administered by roughly 1,600 grantees.

Since the program’s inception, Head Start grantees have generally been given grant awards for

indefinite periods (i.e., awards with no end date). However, the 2007 Head Start reauthorization

law (P.L. 110-134) changed this by instituting a five-year designation period for Head Start

grantees. Under the new law, at the end of its five-year designation period, a grantee must

demonstrate that it is delivering high-quality and comprehensive services, or else the grant is to

be opened for re-competition. The law refers to the process of identifying grantees for recompetition as the Designation Renewal System (DRS). HHS was tasked with establishing the

DRS, based on certain parameters specified within the law.

This report provides an overview of the major milestones leading up to the early implementation

of the DRS.2 Table 1 outlines a chronology of these milestones and serves as a preview to the

remainder of the report, which discusses these events and activities in greater detail. The bulk of

the report is focused on the DRS itself, including the indicators used to identify grantees for recompetition and the status of competitions to date. The report concludes with a discussion of

additional issues related to the DRS, including legal challenges and evaluation plans.

Table 1. DRS Chronology

Date

Action

September 2007

Head Start reauthorization law calls for a five-year limitation on grantee designation periods

and for HHS to establish a new re-competition process.

January 2008

HHS Secretary convenes an Advisory Committee on Re-designation of Head Start Grantees to

make recommendations on how the designation renewal system should be implemented.

December 2008

HHS Secretary’s Advisory Committee on Re-designation of Head Start Grantees releases a

report with recommendations.

Head Start began in 1965 under the general authority of the Economic Opportunity Act of 1964 (P.L. 88-452).

This report is focused exclusively on the DRS. For more information on the Head Start program as a whole, see CRS

Report RL30952, Head Start: Background and Issues, by (name redacted).

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Date

September 2010

Action

HHS publishes a Notice of Proposed Rulemaking (NPRM) on designation renewal and recompetition, giving the public 90 days to comment.

HHS releases a report to Congress on the content of the NPRM.

September to

December 2010

HHS receives roughly 16,000 comments on the NPRM from Head Start grantees, parents,

teachers, state associations, national organizations, academic institutions, and legal entities.

November 2011

HHS publishes a Final Rule on designation renewal and re-competition.

HHS releases a report to Congress on the content of the final rule.

December 2011

HHS announces the first cohort of grantees required to compete for continued funding under

the DRS. In total, 131 grantees are designated for re-competition.a

January 2013

HHS announces the second cohort of grantees required to compete for continued funding

under the DRS. In total, 122 grantees are designated for re-competition.

April 2013

HHS makes a preliminary announcement on results of the first round of re-competitions.

July 2013

HHS announces awards to roughly 153 grantees from Cohort 1 re-competitions.

Source: Source data for all of the publications, reports, and press releases cited above can be found on the HHS

Early Childhood Learning and Knowledge Center website at http://eclkc.ohs.acf.hhs.gov/hslc/hs/grants/dr.

Notes: More detailed citations for each source can also be found elsewhere in this report.

The press release said 132 grantees would be required to re-compete, but one grantee was later removed

from the list because a deficiency was revoked, leaving 131 grantees designated for re-competition.

DRS Background

In the years leading up to the 2007 reauthorization law, Congress demonstrated a growing interest

in introducing more competition to the Head Start program. A Government Accountability Office

(GAO) report published in February 2005 recommended that HHS begin re-competing grants in

cases where a grantee had failed to meet program, financial management, or other requirements.3

In response, HHS expressed concerns over the legal authority for entering into such competitions

and GAO suggested that Congress may wish to “clarify” these authorities. Subsequently, the idea

of limiting grantee designation periods to five years and requiring “low performing” grantees to

re-compete was raised at congressional hearings and in various draft reauthorization bills

throughout the 109th and 110th Congresses.4 However, it was not until December 2007 that

Congress ultimately enacted legislation requiring HHS to carry out these activities.

U.S. Government Accountability Office, Head Start: Comprehensive Approach to Identifying and Addressing Risks

Could Help Prevent Grantee Financial Management Weaknesses, GAO-05-176, February 2005, http://www.gao.gov/

new.items/d05176.pdf.

For instance, see H.R. 2123 (109th), S. 1107 (109th), S. 556 (110th) and H.R. 1429 (110th). See also U.S. House,

Committee on Education and the Workforce, Subcommittee on Education Reform, Best of Head Start: Learning from

Model Programs, Hearing, 109th Congress, 1st session, April 14, 2005, and U.S. House, Committee on Education and

the Workforce, Financial Accountability in the Head Start Early Childhood Program, Hearing, 109th Congress, 1st

session, April 5, 2005.

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The 2007 Reauthorization Law

The Improving Head Start for School Readiness Act of 2007 (P.L. 110-134) reauthorized Head

Start through the end of FY2012. This law significantly amended the existing Head Start Act. A

seminal component of the reauthorization law was the requirement that HHS develop a

“Designation Renewal System” to identify low performing grantees for re-competition.

Under the law, the stated purpose of the DRS is to “determine if a Head Start agency is delivering

a high quality and comprehensive Head Start program that meets the educational, health,

nutritional, and social needs of the children and families it serves, and meets program and

financial management requirements and standards.”5 Section 641(c) of the amended Head Start

Act tasked the Secretary of HHS (the Secretary) with developing the DRS, in consultation with a

panel of experts, and specified that the DRS must base determinations of program quality on

•

annual budget and fiscal management data;

•

program monitoring reviews (which must occur at least once every three years

according to requirements set forth in Section 641A(c) of the Head Start Act);

•

annual audits (as required by Section 647 of the Head Start Act);

•

classroom quality (as measured under Section 641A(2)(F) of the Head Start Act,

which calls for the use of a “valid and reliable research-based observational

instrument, implemented by qualified individuals with demonstrated reliability,

that assesses classroom quality, including assessing multiple dimensions of

teacher-child interactions that are linked to positive child development and later

achievement”); and

•

Program Information Reports (annual reports submitted by all Head Start

grantees and delegate grantees, which provide comprehensive data on staff and

services, as well as children and families served).

The conference report (H.Rept. 110-439) accompanying the 2007 reauthorization law stated that

the DRS was not expected to require the majority of Head Start programs to re-compete: “The

Conferees strongly believe the majority of Head Start programs are delivering high quality

services, and therefore do not intend for this new designation system to result in competition for

designation for the majority of Head Start programs.”6 The conference report went on to express

the belief that having low-performing grantees compete for funding would improve overall

program performance.

Secretary’s Advisory Committee on Re-designation

The 2007 reauthorization law called for the Secretary of HHS to convene an expert panel to make

recommendations on the development of a “transparent, reliable, and valid” system for

designation renewal.7 To this end, the Secretary chartered an advisory committee in January 2008.

Section 641(c)(1) of the Head Start Act. The Head Start Act can be found at 42 USC 9801 et seq.

H.Rept. 110-439, p. 111.

See Section 641(c)(2).

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Twelve months later, in December 2008, the advisory committee released a report with formal

recommendations for implementing the DRS.8

The advisory committee recommended that the DRS include a combination of automatic

indicators and key quality indicators. Under the committee’s proposal, the automatic indicators

would be used for problems of “such a serious nature that a single occurrence would

automatically require a grantee to compete for renewal.”9 The committee suggested that this

include cases in which a grantee had declared bankruptcy, been debarred from receiving federal

funds, had a license revoked, or had a “high number” of deficiencies identified in a program

monitoring review (where “high number” was defined as two standard deviations from the

mean).10 Meanwhile, key quality indicators would require competition “when a pattern of poor

performance on multiple indicators is present.”11 The advisory committee recommended the

development of key quality indicators in four broad areas (program management, education,

comprehensive services, and financial management) and called for the Secretary to establish a

threshold for each indicator such that a meaningful distinction would be made between programs

providing high-quality services and those not providing high-quality services.12

Notice of Proposed Rulemaking

In September 2010, HHS released a Notice of Proposed Rulemaking (NPRM) on designation

renewal and re-competition based, in part, on the advisory committee’s recommendations.13 The

NPRM proposed re-competing at least 25% of all Head Start and Early Head Start grantees

participating in monitoring reviews in a given year. (Monitoring reviews are largely triennial, so

roughly one-third of all grantees participate in monitoring reviews each year.) Under the proposal,

grantees would be identified for re-competition based on performance on seven proposed

indicators addressing varied aspects of program quality, licensing and operations, and fiscal and

internal controls. (The seven indicators proposed in the NPRM serve as the basis for the seven

indicators included in the final rule, with some adjustments. For a more robust discussion of these

indicators, see the “DRS Final Rule” section of this report.)

The NPRM proposed requiring automatic re-competition for any grantee that failed to meet

standards set by one or more of the seven indicators. In the event fewer than 25% of grantees

were to trigger re-competition in a given year, the NPRM proposed using “objective criteria” to

identify additional low performing grantees for re-competition. The NPRM did not identify these

objective criteria, but solicited feedback from stakeholders on what they should be. Ultimately,

Jerlean E. Daniel, et. al., Report of the Secretary’s Advisory Committee on the Re-designation of Head Start Grantees,

December 2008, http://eclkc.ohs.acf.hhs.gov/hslc/hs/dr/pdf/Secy-Advisory-Committee_ReportRedesignation_December-2008.pdf.

Ibid, p. 3.

Ibid, p. 7.

Ibid, p. 3.

Ibid, pp. 7, 9-11.

U.S. Department of Health and Human Services, Administration for Children and Families, “Notice of Proposed

Rulemaking on Designation Renewal and Re-competition,” 75 Federal Register 57704-57719, September 22, 2010,

http://www.gpo.gov/fdsys/pkg/FR-2010-09-22/pdf/2010-23583.pdf. See also U.S. Department of Health and Human

Services, Administration for Children and Families, Office of Head Start, Report to Congress on the Proposed Head

Start Program Designation Renewal System, September 22, 2010, http://eclkc.ohs.acf.hhs.gov/hslc/mr/rc/

Head_Start_Proposed_Designation_Renewal_System.pdf.

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the final rule eliminated the 25% requirement altogether (see related discussion in the section on

“Differences from the NPRM”).

The NPRM gave the public 90 days to comment on the proposed rule (i.e., until December 21,

2010). During that time, HHS received approximately 16,000 comments on the NPRM from

Head Start grantees, parents, teachers, state associations, national organizations, academic

institutions, and legal entities.14 HHS took these comments into consideration before publishing a

final rule on the DRS in November 2011.

DRS Final Rule

HHS published the DRS final rule on November 9, 2011.15 Under the terms of the final rule, the

DRS became effective on December 9, 2011, thirty days after the rule was published in the

Federal Register. This section of the report explores the contents of the final rule, with emphasis

on the indicators selected for identifying grantees for re-competition.

Indicators/Triggers

The final rule established seven indicators for identifying programs that are not providing “highquality and comprehensive services.” Any Head Start grantee that fails to meet the minimum

quality standards established by one or more of the seven indicators listed below (and described

in greater detail in Table 3 at the end of this report) is automatically required to compete for

continued funding. This does not mean the grantee will automatically lose its funding. Rather, it

means the grantee will have to successfully compete against other interested applicants to

continue to receive funding.

DRS Triggers for Re-competition:

1. The grantee has had one or more deficiencies identified in a single monitoring

review.

2. The grantee has failed to establish and use goals for improving schoolreadiness (including analysis of aggregate and individual child-level assessment

data).

3. The grantee has received a low score on one or more domains of the CLASS:

Pre-K, an observational assessment tool used to measure classroom quality.

(This indicator does not apply to Early Head Start programs or those using only

the home-based program option.)

U.S. Department of Health and Human Services, Administration for Children and Families, Office of Head Start,

Report to Congress on the Final Head Start Program Designation Renewal System, November 9, 2011, p. 6,

http://eclkc.ohs.acf.hhs.gov/hslc/mr/rc/Head_Start_Designation_Renewal_System_Final_Rule.pdf (hereinafter cited as

ACF, Report to Congress on the DRS Final Rule, November 2011).

U.S. Department of Health and Human Services, Administration for Children and Families, “Final Rule on

Designation Renewal and Re-competition,” 76 Federal Register 70010-70032, November 9, 2011,

http://www.gpo.gov/fdsys/pkg/FR-2011-11-09/pdf/2011-28880.pdf. The final rule is codified at 45 C.F.R. 1307.

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4. The grantee has had its license revoked by a state or local authority. (An

exception is made if the revocation is overturned or withdrawn before the

competition is announced.)

5. The grantee has had operations suspended by HHS. (An exception is made if

the suspension has been overturned or withdrawn, or the grantee has appealed the

suspension and has not had a chance to show cause as to why it should be lifted

or not be imposed.)

6. The grantee has been debarred from receiving funds from any federal or state

agency or disqualified from participating in the Child and Adult Care Food

Program (CACFP).

7. The grantee has been determined to be at risk of ceasing to be a “going concern”

by HHS based on an audit or other investigation within the 12 month period

preceding the decision on whether a grantee must compete for funding.

(Additional details about the seven indicators are provided in Table 3 at the back of this report.)

Differences from the NPRM

The main difference between the proposed rule and the final rule is that the final rule eliminated a

provision from the NPRM that would have required at least 25% of grantees reviewed in each

round to compete for continued funding. The final rule included no such provision, but rather

expanded provisions related to the CLASS: Pre-K assessments, such that grantees are required to

compete if they fail to meet a minimum quality threshold on any CLASS domain or if they

receive a CLASS score that falls within the bottom 10% on any domain (unless a grantee scoring

in the bottom 10% received a score indicative of an “exceptional” level of quality). Based on

changes in the final rule, HHS estimated that about one-third of all programs would be designated

for re-competition.16

Tribal Consultations

Pursuant to requirements in the law, the final rule includes a special provision for American

Indian and Alaska Native (AIAN) Head Start and Early Head Start programs.17 When such

programs fail to meet the minimum standards established by one or more of the seven quality

indicators, HHS is to engage in a government-to-government consultation with the appropriate

tribal government(s) to develop a quality improvement plan for the grantee. This plan must be

implemented within six months of the DRS determination. Not more than six months after the

implementation of the quality improvement plan, HHS is to re-evaluate the performance of the

grantee. If the grantee is still not delivering a high-quality and comprehensive program, then HHS

is to hold a competition for the area served by the grantee. In general, a non-AIAN Head Start or

Early Head Start agency is not eligible to win such a competition unless there is no AIAN Head

Start or Early Head Start agency available. In such cases, a non-AIAN Head Start or Early Head

Start program may receive the grant until such time as an AIAN Head Start or Early Head Start

agency becomes available.

ACF, Report to Congress on the DRS Final Rule, November 2011, p. 5.

See 45 C.F.R. 1307.6 and Sections 641(c)(7)(B) and 641(e) of the Head Start Act.

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How Are Deficiencies Identified?

Separate from the DRS, the Head Start Act requires HHS to conduct a program monitoring

review for each grantee at least once every three years. (New grantees are subject to a full review

immediately upon completion of their first program year, but while data from first-year reviews

are used for general program oversight, they are exempt from consideration as part of the DRS.)

Monitoring reviews are used to determine whether or not grantees are meeting applicable

standards for program, administrative, financial management, and other requirements. The law

requires follow-up visits for any agency determined, based on findings from a monitoring review,

to have one or more deficiencies or significant areas of noncompliance. The law allows for

unannounced site inspections of Head Start centers, as appropriate.

In this context, a deficiency represents (1) a systemic or substantial material failure on the part of

a grantee to meet Head Start program performance standards (as specified in law and regulation),

(2) a systemic or material failure of the governing body of an agency to fully exercise its legal

and fiduciary responsibilities, or (3) an unresolved area of noncompliance.18 In practice, this may

mean that a grantee has, for instance, misused its federal Head Start funds or failed to minimize

threats to the health, safety, or civil rights of children or staff. (See Table 3 for more specifics.)

The law requires HHS to notify grantees in writing when a deficiency has been identified and to

indicate whether the deficiency is to be corrected immediately or pursuant to a Quality

Improvement Plan. Failure to correct a deficiency in a timely manner (to be not more than one

year) constitutes a material failure by a grantee to comply with the terms and conditions of its

funding award. This means that—separate from the DRS—grantees who fail to correct

deficiencies in a timely manner are at risk of termination or denial of refunding.

Under the DRS final rule, the issuance of one or more deficiencies within a grantee’s DRS review

period will trigger re-competition, regardless of how quickly the grantee corrects the deficiency.

According to HHS, the correction of a deficiency is “required in order to avoid termination, but is

not considered in determinations made under the Designation Renewal System.”19 In FY2009, a

total of 22 grantees (4.6% of all grantees who underwent first year or triennial reviews) were

found to have one or more deficiencies.20 The majority of these deficiencies were based on threats

to the health and safety of children or staff (e.g., failure to conduct criminal background checks,

failure to keep premises clean and free of undesirable or hazardous materials).

What Is the CLASS: Pre-K?

The Classroom Assessment Scoring System (CLASS) is an observational assessment tool used to

measure classroom quality. The CLASS: Pre-K is specifically designed to assess the interactions

of preschool children, ages 3-5, in classroom settings. The CLASS: Pre-K is organized around

three domains: (1) Emotional Support, (2) Classroom Organization, and (3) Instructional Support.

The Emotional Support domain examines positive and negative climate in a classroom, as well as

See Section 637(2) of the Head Start Act and 45 C.F.R. 1304.3(a)(6).

Colleen Rathgeb, “System for Designation Renewal of Head Start and Early Head Start Grantees,” Office of Head

Start, Administration for Children and Families, powerpoint presentation, September 12, 2012.

Office of Head Start, Administration for Children and Families, U.S. Department of Health and Human Services,

Report to Congress on Head Start Monitoring, Fiscal Year 2009, p. 26, http://eclkc.ohs.acf.hhs.gov/hslc/mr/rc/

FY2009_Head_Start_%20Monitoring_Report.pdf. Note that deficiency findings from a first year review are not

considered for DRS purposes.

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teachers’ sensitivity and regard for student perspectives. The Classroom Organization domain

explores behavior management, productivity, and learning formats. The Instructional Support

domain assesses the use of curriculum in promoting cognitive and language development.

CLASS observations are conducted by trained and certified “CLASS Observers,” who have

passed a reliability test.21 CLASS reviewers must be recertified on an annual basis. CLASS

Observers code classroom interactions across domains using a 7-point scale. For the DRS,

minimum quality thresholds differ by domain. Grantees will trigger re-competition by scoring

below 4 on Emotional Support, below 3 on Classroom Organization, below 2 on Instructional

Support, or in the lowest decile (i.e., bottom 10%) on any CLASS domain.

Table 2 compares the average scores for Head Start grantees in FY2012 with the minimum

quality thresholds for the DRS.

Table 2. CLASS: Pre-K Scores for Head Start Grantees: Average Scores, DRS

Minimum Quality Thresholds, and Bottom Decile Scores for FY2012

Minimum Quality Thresholds for DRS

Average Scores

for Grantees in

FY2012

General Threshold

(scoring below this level

results in re-competition)

Bottom 10% for FY2012

(scoring at or below this level

results in re-competition)a

Emotional Support

5.90

5.4926

Classroom Organization

5.45

4.8571

Instructional Support

2.98

2.1923

Domain

Source: Table prepared by the Congressional Research Service based on information provided in a frequently

asked questions summary by the HHS Office of Head Start, Use of Classroom Assessment Scoring System (CLASS) in

Head Start, as viewed online on May 9, 2013, http://eclkc.ohs.acf.hhs.gov/hslc/sr/quality/class/docs/use-of-class.pdf.

Notes: The table displays the greatest level detail (i.e., most decimal places) made available by HHS. The CLASS:

Pre-K is not used for Early Head Start programs or programs operating a home-based option only.

Each year, the 10% of grantees reviewed that receive the lowest average scores in each domain are

required to re-compete (an exception is made for grantees in the bottom decile if they scored a 6 or 7).

For FY2012, grantees scoring at or below the levels shown in this column represent the bottom 10%.

Under the terms of the final rule, the CLASS: Pre-K component of the DRS does not apply to

Early Head Start programs (which serve infants, toddlers, and expectant parents) or programs

operating only a home-based option. This is because the CLASS: Pre-K is not designed to assess

the quality of home-based programs or programs serving infants and toddlers. According to the

preamble to the final rule, HHS will “consider incorporating a valid and reliable measure of

teacher-child interaction in Early Head Start and in the Home-based program option when such a

tool becomes available” and will implement such a tool only after “soliciting public input through

an NPRM.”22

Learn more at http://eclkc.ohs.acf.hhs.gov/hslc/sr/quality/class or http://www.teachstone.org/about-the-class/.

See 76 Federal Register 70020.

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DRS Implementation

Under the final rule, any new grant awarded after the rule’s effective date (December 9, 2011) is

to be designated for a five-year period, instead of an indefinite period. For existing grantees, the

final rule called for the DRS to be phased-in over a three-year transition period (i.e., December 9,

2011, to December 9, 2014).

During the first year of the transition period, HHS reviewed all existing grantees against five of

the seven indicators (school readiness goals/data and CLASS: Pre-K scores were excluded).

During the following two years, HHS planned to evaluate any grantees that had not triggered recompetition in the first year against all seven DRS indicators. At some point prior to the end of

the three-year transition period, any grantee that has not triggered re-competition is to be notified

that they have been deemed eligible for five years of renewed funding without competition.23

Competition Process

Thus far, HHS has announced the first two cohorts of grantees required to re-compete:

•

Cohort 1: In December 2011, based on an assessment of five of the seven DRS

indicators, HHS notified 131 grantees that they would be required to re-compete

for funding.24

•

Cohort 2: In January 2013, based on an initial review of the full seven indicators,

HHS notified 122 grantees that they would be required to re-compete for

funding.25

Once a grantee has been designated for re-competition, the next step is to announce the

availability of funding and to hold a competition. HHS began posting Funding Opportunity

Announcements for DRS competitions in 2012. Funding opportunities made available as part of

the DRS are generally opened only to applicants looking to serve families within the same service

areas currently served by grantees who triggered re-competition. Federal regulations define a

service area as the “geographic area identified in an approved grant application within which a

grantee may provide Head Start services.”26 As a rule, service areas are unique to individual

For more information about the transition to five-year project periods, see the Office of Head Start Information

Memorandum, ACF-IM-HS-13-02, Five-Year Head Start Project Periods, July 1, 2013, http://eclkc.ohs.acf.hhs.gov/

hslc/standards/IMs_and_PIs_in_PDF/PDF_IMs/IM2013/ACF-IM-HS-13-02.pdf.

U.S. Department of Health and Human Services, Administration for Children and Families, “HHS continues Head

Start quality push, notifies grantees selected to compete for continued funding,” press release, December 19, 2011,

http://www.acf.hhs.gov/press/headstart-12-19-2011-0. Although the press release said 132 grantees would be required

to re-compete, one grantee was later removed from the list because a deficiency was revoked, leaving 131 grantees

designated for re-competition. A list of most of the Cohort 1 grantees is available online at http://eclkc.ohs.acf.hhs.gov/

hslc/hs/dr/pdf/Grantees-notified-of-requirement-to-compete-for-continued-funding.pdf. This list does not include the

six grantees from Cohort 1 who will re-compete as part of the summer 2013 Birth-to-Five Pilot Project competitions.

U.S. Department of Health and Human Services, Administration for Children and Families, “Head Start continues

quality reforms with second group of competitions,” press release, January 17, 2013, http://www.acf.hhs.gov/press/

head-start-continues-quality-reforms-with-second-group-of-competitions. A list of the Cohort 2 grantees is available

separately at http://eclkc.ohs.acf.hhs.gov/hslc/hs/dr/pdf/2nd-cohort-competition.pdf.

See 45 C.F.R. 1305.2(r). Because service areas are self-identified and defined by grantees, not by HHS, they can vary

widely in size and scope. In their applications, grantees must identify their service area by county or by sub-county

areas, such as municipalities, towns, or census tracts (see 45 C.F.R. 1305.3(a)).

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grantees (i.e., there is no overlap), meaning that HHS must hold individual competitions for each

grantee’s slot to ensure coverage for each service area affected by the DRS. In some cases, DRS

competitions may result in larger service areas being broken into smaller service areas based on

the interest and capacity of applicants (and the quality of applications).

To support agencies applying for these competitions, HHS established a grant application

toolkit.27 The toolkit provides explanatory information about Head Start, links to funding

opportunities, and a number of resources to support agencies in completing their applications

(e.g., details on how to apply, the criteria by which applicants will be evaluated, and answers to

frequently asked questions). All applications are reviewed by a panel of independent early

childhood professionals and assessed for viability by Certified Public Accountants.

Competition Results

On July 2, 2013, HHS announced that grants would be awarded to roughly 153 successful

applicants from Cohort 1 competitions.28 The announcement indicated that in some cases the

selection panel had determined an existing grant would be more effective if split among multiple

agencies. The July 2013 announcement followed a preliminary press release from April 2013, in

which HHS had indicated that, based on preliminary competition results, roughly 80 of the

original Cohort 1 grantees would continue to receive funding, 25 of the original grantees would

be replaced, and 14 of the original grantees would see their grants split up between new and

existing providers.29 These numbers suggest that roughly three-quarters of the Cohort 1 grantees

who have undergone re-competition will retain their grants (in part or in full).30 The April 2013

announcement also stated that some of the Cohort 1 competitions had no successful applicants,

meaning that HHS will have to hold a new series of competitions for grants in these service areas.

In addition, a few Cohort 1 grantees have not yet been re-competed, as six of these grants were

slated for inclusion in the Birth-to-Five Pilot competition currently underway.31 Meanwhile,

funding opportunity announcements for many Cohort 2 grantees were issued on July 25, 2013.32

See http://eclkc.ohs.acf.hhs.gov/hslc/hs/grants/grant-toolkit.

U.S. Department of Health and Human Services, Administration for Children and Families, “Head Start and Early

Head Start standards raised to increase quality and accountability,” press release, July 2, 2013, http://www.acf.hhs.gov/

press/head-start-and-early-head-start-standards-raised-to-increase-quality-and. A list of the awardees is available

separately at http://eclkc.ohs.acf.hhs.gov/hslc/hs/grants/dr/cohort-1-awards-results.html.

U.S. Department of Health and Human Services, Administration for Children and Families, “Head Start providers

improve quality through new competitions, greater accountability,” press release, April 3, 2013,

http://www.acf.hhs.gov/node/16359. A list of the preliminarily selected awardees is available separately at

http://eclkc.ohs.acf.hhs.gov/hslc/hs/dr/prelim-1st-cohort-awardees.html.

This estimate was calculated based on the assumption that 94 out of 125 Cohort 1 grantees retained some or all of

their funding following the re-competition process. (The remaining six Cohort 1 grantees have not yet competed.)

For more information on the Birth-to-Five Pilot Project, see U.S. Department of Health and Human Services,

Administration for Children and Families, “Head Start launches pilot project to encourage innovation in birth-to-5

education,” press release, February 4, 2013, http://www.acf.hhs.gov/press/head-start-launches-pilot-project-to.

U.S. Department of Health and Human Services, Administration for Children and Families, “Head Start Grant

Opportunities Expand Successful Birth-to-Five Pilot Initiative,” press release, July 25, 2013, http://www.acf.hhs.gov/

press/head-start-grant-opportunities-expand-successful-birth-to-five-pilot. Individual funding opportunity

announcements by service area are available at http://www.acf.hhs.gov/grants/open/foa/office/ohs.

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Head Start: Designation Renewal System

Additional DRS Issues

Final Decisions and Appeals

Under the terms of the final rule, grantees designated for re-competition do not have the right to

appeal, meaning that all DRS decisions are final. Some comments on the NPRM requested that

the final rule include procedures for these decisions to be appealed, but HHS did not adopt this

policy. HHS addressed this decision in the preamble to the final rule, noting that the 2007

reauthorization law had not required an appeals procedure for DRS decisions.33 HHS noted that

provisions elsewhere in the Head Start Act require appeals procedures to be in place for specified

circumstances. For instance, the law states that grantees must be able to appeal decisions by HHS

to terminate or reduce a grant award or to suspend a grantee for more than 30 days.34

Legal Challenges35

Following publication of the DRS final rule, several non-profit associations filed a lawsuit

challenging the lawfulness of the “single deficiency trigger” in the final regulations. In Ohio

Head Start v. Dep’t. Health and Human Serv.,36 the plaintiffs, three separate associations whose

membership included some Head Start agencies required to compete for new five-year Head Start

grants because of one or more deficiency findings, argued that the single deficiency trigger was

invalid on several grounds: (1) it was impermissibly retroactive because it applied to groups that

had already received funding; (2) it deprived grantees of their protected property and liberty

interests in grant renewals without due process; and (3) it was arbitrary and capricious under the

Administrative Procedure Act.37

The federal district court dismissed the challenges on summary judgment, concluding that the

Head Start associations failed on all claims.38 The court first noted that the DRS applies to future

grants, not current grants, so it is not retroactive.39 As to due process, the court ruled that the

plaintiffs did not identify a protected property or liberty interest that needed to be protected, and

even if they had, the agency provides sufficient constitutional due process.40 Finally, under the

administrative challenge, the court held that the rule was not arbitrary or capricious because,

while the Secretary had to provide a reasonable explanation for why the agency decided not to

follow the recommendation of the HHS Secretary’s Advisory Committee regarding deficiencies

(i.e., to re-compete programs with deficiencies equal to or exceeding two standard deviations

from the mean), it was not foreclosed from going with a single deficiency trigger instead.41

See 76 Federal Register 70012.

See Section 646 of the Head Start Act and 45 C.F.R. 1303.

This section was prepared by Erin Davis, law clerk, under the general supervision of Kathleen Swendiman, a

legislative attorney in the CRS American Law Division.

Ohio Head Start Ass’n v. United States Dep’t Health and Human Serv., 873 F. Supp. 2d 335 (D.D.C. 2012).

Ibid., 345.

Ibid.

Ibid., 347.

Ibid., 349.

Ibid., 357.

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Following this decision, the plaintiffs filed for an injunction to stop HHS from implementing the

DRS pending appeal.42 The district court denied the injunction on the grounds that the plaintiffs

failed to show any likelihood of success on the merits.43 The court also held that the plaintiffs

could not show that they would suffer irreparable harm if they were not granted the injunction. In

addition, the delay would require HHS to expend significant additional resources, and would

require a new round of applications and reviews.44 The plaintiffs appealed the ruling of the district

court, and on May 21, 2013, a three judge panel of the District of Columbia Court of Appeals

affirmed the lower court’s ruling without an opinion.45

Evaluation of the DRS

HHS has undertaken (via contract) an evaluation of the DRS to explore how and whether it is

meeting goals of “transparency, validity, reliability,” and “overall program quality improvement.”

The evaluation will examine the effectiveness of the DRS in differentiating between higher and

lower performing grantees and in improving the overall quality of Head Start programs by the

introduction of competition.46 HHS awarded the evaluation contract in 2012. The evaluation is

slated to run through 2015.

Ohio Head Start Ass’n v. United States Dep’t Health and Human Serv., 902 F. Supp. 2d 61 (D.D.C. 2012).

Ibid., 65.

Ibid., 71.

Ohio Head Start Ass’n v. United States Dep’t Health and Human Serv., No. 12-5231, U.S. Court of Appeals for the

District of Columbia Circuit, filed May 21, 2013.

U.S. Department of Health and Human Services, Administration for Children and Families, Evaluation of the Head

Start Designation Renewal System (DRS), 2012-2015: Project Overview, January 1, 2012, http://www.acf.hhs.gov/

sites/default/files/opre/evaluation_of_the_head_start_designation_renewal_system.pdf.

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Head Start: Designation Renewal System

Table 3. DRS Triggers for Identifying Grantees for Re-competition

Seven Triggers for Re-competition

One or more deficiencies in a single monitoring review.a

Note: All grantees must participate in a monitoring review at

least once every three years. If HHS determines, based on

findings from a monitoring review, that a grantee has a

deficiency, the grantee must correct the deficiency or risk

termination. Under the final rule, a grantee with a deficiency

identified during its DRS review period must re-compete,

regardless of whether the deficiency has been corrected.

Related Definitions or Additional Detail

Deficiencies refer to the systemic or substantial material failure of a grantee to

comply with state or federal requirements, particularly those which involve (1)

threats to the health, safety, or civil rights of children or staff; (2) denial of

parents’ rights to exercise their full roles in program governance; (3) failure to

perform substantially on requirements related to early childhood development,

health services, family and community partnerships, or program design and

management; (4) misuse of Head Start grant funds; (5) loss of legal status or

financial viability, loss of permits, debarment from receiving federal grants or

contracts; (6) any other violation of federal or state requirements (e.g., failure to

correct deficiencies identified by HHS for corrective action); etc.

See definitions at Section 637(2) of the Head Start Act and 45 C.F.R.

1304.3(a)(6).

Failure to establish and use school readiness goals,

including failure to

•

Analyze individual child-level assessment data to

determine (with other inputs) each child’s status and

progress on developmental domains and to individualize

instructional strategies and services.

•

Analyze aggregate child-level assessment data at

least three times per year (except for programs

operating for less than 90 days, which must analyze data

at least twice per program period) to determine (with

other inputs) each grantee’s progress toward school

readiness goals and to promote continuous program

improvement.

School readiness goals refer to “progress across domains of language and

literacy development, cognition and general knowledge, approaches to learning,

physical well-being and motor development, and social and emotional

development that will improve their readiness for kindergarten.” The regulation

calls for these goals to appropriately reflect ages of participating children; align

with the Head Start Child Development and Early Learning Framework,b state

early learning guidelines, and requirements and expectations of local schools (if

applicable); and be established in consultation with parents.c

Child-level assessment data refers to data collected from “one or more

valid and reliable assessments of a child’s status and progress, including but not

limited to direct assessment, structured observations, checklists, staff or parent

report measures, and portfolio records or work samples.”

Aggregate child-level assessment data refers to data collected on the

“status and progress of children that have been combined to provide summary

information about groups of children enrolled in specific classrooms, centers,

home-based or other options, groups or settings, or other groups of children

such as dual language learners, or to provide summary information by specific

domains of development.”

See full definitions at 45 C.F.R. 1307.2.

A low score on one or more domains during the most recent

CLASS: Pre-K observation. For grantees with multiple

classrooms, scores are averaged across all classrooms

observed (based on a random sample of all classes).

Note: This indicator will not be used for Early Head Start

programs or programs operating a home-based option only.d

The CLASS: Pre-K rates classroom interactions in 3 domains using a 7-point

scale. Re-competition is triggered by scoring below a minimum quality threshold

on any domain or by scoring in the bottom 10% of all grantees for any domain.

Minimum Quality Thresholds by Domain:

Emotional Support = Below 4

Classroom Organization = Below 3

Instructional Support = Below 2

An exception is made for grantees in the bottom 10% if their score equals or

exceeds an “exceptional” level of quality (a score of 6 or higher in any domain).e

Revocation of agency’s license by state or local authority.f

An exception is made if the revocation is overturned or withdrawn before the

announcement of the competition.

Suspension of operations by HHS.

An exception is made if the suspension has been overturned or withdrawn, or

the grantee has appealed the suspension and has not had a chance to show

cause as to why it should be lifted or not be imposed.

Debarment from receiving funds from any federal or state

agency or disqualification from participating in the CACFP.f

n/a

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Head Start: Designation Renewal System

Seven Triggers for Re-competition

Determined to be at risk of ceasing to be a going concern

by HHS based on an audit or investigation within the 12

month period preceding a DRS review.f

Related Definitions or Additional Detail

Going concern is defined as “an organization that operates without threat of

liquidation for the foreseeable future, a period of at least 12 months.”

See definition at 45 C.F.R. 1307.2.

Source: Table prepared by CRS based on information provided in the DRS Final Rule published by the U.S.

Department of Health and Human Services (HHS), Administration for Children and Families (ACF), Office of

Head Start (OHS), Federal Register, Vol. 76, No. 217, pp. 70010-70032, November 9, 2011.

Notes: CLASS = Classroom Assessment Scoring System. CACFP = Child and Adult Care Food Program.

In FY2009, a total of 22 grantees (4.5% of all grantees who underwent first year or triennial reviews) were

found to have one or more deficiencies, according to the Report to Congress on Head Start Monitoring, Fiscal

Year 2009, http://eclkc.ohs.acf.hhs.gov/hslc/mr/rc/FY2009_Head_Start_%20Monitoring_Report.pdf.

HHS Administration for Children and Families, Office of Head Start, The Head Start Child Development

and Early Children Framework: Promoting Positive Outcomes in Early Learning Programs Serving Children

3-5 Years Old, Revised September 2011, http://eclkc.ohs.acf.hhs.gov/hslc/tta-system/teaching/eecd/

Assessment/Child%20Outcomes/HS_Revised_Child_Outcomes_Framework(rev-Sept2011).pdf.

For examples of school readiness goals for Head Start programs, see http://eclkc.ohs.acf.hhs.gov/hslc/ttasystem/teaching/docs/sr-goals.pdf. For examples of school readiness goals for Early Head Start programs,

see http://eclkc.ohs.acf.hhs.gov/hslc/tta-system/ehsnrc/Early%20Head%20Start/early-learning/curriculum/

school-readiness-goals-infants-toddlers.pdf.

According to the preamble to the final rule, “ACF will consider incorporating a valid and reliable measure of

teacher-child interaction in Early Head Start and in the Home-based program option when such a tool

becomes available” and would implement such a tool only after “soliciting public input through an NPRM”

(see 76 Federal Register 70020).

In FY2012, the lowest 10% of CLASS scores by domain were equal to or less than 5.4926 for Emotional

Support, 4.8571 for Classroom Organization, and 2.1923 for Instructional Support. For more information,

see http://eclkc.ohs.acf.hhs.gov/hslc/sr/quality/class.

Head Start agencies must report to HHS (in writing) within ten working days if any of these events occur.

Agencies would also be required to notify HHS within ten days if they have filed for bankruptcy or agreed

to a reorganization plan as part of a bankruptcy settlement.

Author Contact Information

(name redacted)

Specialist in Social Policy

/redacted/@crs.loc.gov, 7-....

Acknowledgments

Erin Davis, Law Clerk, prepared the legal section of this report, under the general supervision of Kathleen

Swendiman, a legislative attorney in the American Law Division

Congressional Research Service

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