Options for Full-Day Services for Children Participating in Head Start . Funding Issues


Managing and administering the wraparound funding that is required to operate a full-day program is often challenging. The specific issues that generate challenges are discussed below.

Funding source restrictions. Some Federal sources have restrictions that make them more difficult to use than others. For instance, parents are eligible for JOBS child-care funding only so long as they remain in training or are employed. In addition, parents who are eligible for JOBS often languish on long wait lists before they begin to receive funding. So that their children can continue to receive full-day care, the director does her best to find other funding for Head Start parents when they lose or are waiting for JOBS funding. Of course, she cannot guarantee continued full-day funding in such situations.

Charitable donations, city grants, and parent fees are appealing funding sources, says the director, because they can be used more flexibly than Federal or state funding sources to pay for any need the program may have. For this reason, the director is pursuing local community groups (e.g., the Junior Women's Club) and industry (e.g., the local General Motors plant) to sponsor some additional child care scholarships.

Funding source sufficiency. Reimbursement rates from some Federal sources are simply too low to maintain a program that can meet the Performance Standards throughout the day. The issue is one of "apples and oranges," notes the Head Start director; sources such as JOBS and SSBG (Title XX) are designed to pay for custodial child care, which is less expensive than a comprehensive child development program like Head Start. At WKUCCC, parent fees make up for the gap between what Federal sources pay and what a full-day program actually costs to run. Without these fees, it would be impossible to maintain, throughout the day, the Performance Standards and the low child/staff ratio of 8:1 (for preschool children) to which the program is committed.

The director acknowledges that Head Start participation in local market rate surveys of child care costs would help raise reimbursement rates in her area; it is her understanding that the state will not allow Head Start to participate, although her program's rates for the child care portion of the day are included in the survey.

The director has found that it is critical to scrutinize carefully the regulations for each Federal source to ensure that she obtains maximum possible reimbursement for each slot. For instance, some Federal programs will provide full-day, rather than part-day, reimbursement per slot for five hours of child care. In these cases, since she also can obtain part-day Head Start funding for individual slots, she can bring program revenues closer to the actual costs of serving low-income children, thereby minimizing the fees their parents must pay.

Use of parent fees. The program benefits enormously from the use of parent fees; because reimbursement rates from Federal sources other than Head Start are unrealistically low, they are essential for meeting the real costs of the full-day program.

Use of parent fees does generate, however, a conflict for the program when Head Start parents are delinquent in paying fees for the child-care portion of the day. If that happens, the director is forced to adopt the role of "debt collector" in order to meet the program's expenses, even though she knows how difficult families' financial circumstances may be.

For example, in 1984, in the program's first year of operation, it lost $6,000 (which the university absorbed) as a result of unpaid parent fees. Specifically, parents would drop children off in the morning for the five-hour Head Start portion of the day, but fail to pick them up until late in the afternoon, thus ensuring their children received free child care. As a result, the director had to switch these children to "afternoon Head Start" (on paper only, because Performance Standards are followed throughout the day), so that Head Start parents who were delinquent in their child care payments could not bring their children to the program until noon. In addition, she has published new rules in the program's parent manual mandating a late pick-up charge of $16 an hour. The manual also states that children who are dropped off at the program illegally or chronically left there late will be assumed "abandoned," and will be turned over to the Department of Social Services.

Financial realities have forced the director to adopt such policies, but she feels uncomfortable, since she believes that her role as "debt collector" conflicts with her role as Head Start family advocate. She is therefore opposed to the idea of regulatory changes that would allow programs to charge parent fees for the Head Start portion of the day, because she is certain that such a change would drastically interfere with staff-family relationships. On the other hand, she thinks fees for full-day service, though sometimes problematic for families and staff, are a good way to help families learn to manage the real costs associated with the attainment of self-sufficiency.

Reimbursement funding sources. Until 1991, when DSS and DSI policies changed, WKUCCC was reimbursed for child-care costs for each slot, based on a child's attendance, rather than enrollment, in the program.18 This policy generated enormous revenue problems, because if a child was sick and did not show up, costs of running the program, such as salaries and overhead, were still incurred. Again, WKUCCC resolved this problem, at least partially, through the use of parent fees that were due for enrolled children, whether or not the child was present each day. Parent fees thus encouraged regular program attendance (and helped parents learn to consistently budget their resources).

The director noted that cash-flow problems also result from Federal reimbursement policies, particularly for the small or stand-alone agencies she trains (which often lack start-up funding and monetary "cushions" to survive unanticipated revenue losses due to high numbers of absences and long waits for reimbursements). Parents who are eligible for Federal child care funding must often wait 60 to 90 days before their funding is approved and WKUCCC begins to receive reimbursement from DSS or DSI for their child's slot. In the meantime, the program must charge parents for services and reimburse them when fees are received retroactively from the state — an often expensive and futile effort. The director thus maintains that without the backing of Western Kentucky University, which absorbs her program's short-term cash shortages, it would be extremely difficult to run a full-day Head Start program.