Allegations of fraud and abuse involving two Head Start nonprofit grantees have been documented in the Midwest and Texas. The strengthening of internal controls and performance measures can reduce the amount of fraud and increase quality services to the nation’s most vulnerable children and families.
Head Start, an anti-poverty program that dates to the 1960s, provides preschool, social and health services to more than 900,000 children and their families. (Anderson 2010) It receives more than $7 billion in federal funding annually. (Anderson 2010) Undercover investigators have found evidence of fraud and abuse at federal Head Start preschool centers, including cases in which enrollment procedures were manipulated to put potentially ineligible applicants into slots reserved for needier children. (Anderson 2010)
The Government Accountability Office reported to Congress that investigators posed as families to test whether Head Start centers in six states and the District of Columbia followed federal rules. In eight of 15 cases, the GAO found, staff members at the centers fraudulently misrepresented financial information from applicants. (Anderson 2010) "This leaves Head Start at risk that over-income children may be enrolled while legitimate under-income children are put on waiting lists," the GAO concluded. One D.C. center disregarded $9,600 in reported income to enroll a fictitious family of three. An associate at the center told undercover investigators: "We don't need any extra; we need to keep you low." (Anderson 2010)
In contrast, behind every good Head Start program is a good grantee or public organization. In other words, Head Start programs do not exist in isolation, but depend upon the organizational infrastructures in which they are housed. They are products of governance, management and organizational leadership. An organization or grantee’s ability to provide high quality Head Start services relies on a host of inspired individuals armed with skillful management techniques. The fraudulent activities of a few Head Start programs does not and should not represent the majority of the proficient programs serving the nation’s most vulnerable children and families.
As a grantee or organization accepts the fiduciary responsibility to implement a federally funded Head Start program a series of internal controls must be present to reduce the possible risk of unethical or unlawful behavior. Internal controls are designed to provide reasonable assurance regarding the achievement of objectives in the following categories; effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. Environmental factors including the integrity of the program, its ethical values, the competence of the agencies people, management's philosophy and operating style, and the way in which management assigns authority, responsibility, and organizes and develops its people, are...