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

03/07/1995

The administrative staff of the Tulare County Child Care Educational Program has managed the same three funding sources for many years, and so are familiar and comfortable with the administrative and fiscal requirements of the programs. However, certain complexities are endemic to multiple funding stream management, according to the program director.

Funding source restrictions. State Department of Education funding sources have different eligibility rules than does Head Start. Whereas Head Start allows 10 percent of its enrollment to be from families who exceed the Federal poverty level, GCC and SPS require that every child meet state-mandated low-income criteria. However, these California income guidelines are much more lenient than Federal guidelines; a family of 4 can earn up to $27,000 a year without losing program eligibility. The program director says these higher income guidelines are necessary in California, where the cost of living is much higher than in the rest of the nation. She feels that Head Start income guidelines are, in fact, too low to ensure that the California "working poor" remain eligible for the program.

Furthermore, GCC funding is provided only to children whose parents are working, in training, looking for work, or are victims of "special circumstances." If parents have been unemployed for more than 60 days and are not in a training program, their children must be dropped from the Tulare program. When this occurs, the administrative staff can sometimes make "paper enrollment switches" that allow a disqualified child to remain in the program. For instance, a GCC-funded child could be switched to Head Start funding, in place of a child currently funded by Head Start who is also eligible for GCC.

Funding source sufficiency. Since GCC and SPS funding actually pays more per slot than does Head Start, the Head Start director feels relatively comfortable about her program's funding sources. (The GCC program pays approximately $22 per child per 8-hour day, while the SPS program pays $12.57 for a 4-hour day). The director noted that through the use of funding "adjustment factors," the GCC program makes accommodations for children who receive full-day versus part-day service and for children who are more difficult to serve, such as infants and children who are severely handicapped. For instance, a child served for half a day carries a funding weight of .55, while a child served for a full-day carries a weight of 1.00. Likewise, full-day children who are severely handicapped are weighted at 1.50, while full-day children at risk of abuse or neglect are weighted at 1.10. The director feels that Head Start, too, could benefit from the use of such an approach.

The director feels comfortable about her program funding levels for a number of other reasons. First of all, the Tulare program participates in local market-rate surveys of child care, which are used in determining GCC funding levels. Secondly, the GCC and SPS programs, as well as Head Start, allow the program to reserve 15 percent of expenses for administrative costs. Finally, since the Tulare program operates under the umbrella of the County Superintendent of Schools, it receives a greater degree of income security than it would if it operated as a stand-alone agency.

Reimbursement funding sources. Under the Tulare program's contract with the California Department of Education for both GCC and SPS, the program is reimbursed for children whose absences are excused and for children whose absences are unexcused, as long as the unexcused absence rate is not greater than 5 percent. The director noted, however, that the state's definition of excused absences is much broader and more clearly defined than that of Head Start, as it includes not only child illness but parent illness and family emergencies. For this reason, she says, Tulare's attendance rate has never fallen below the mandated level. However, the program does lose money when a GCC or SPS child drops the program before another child can be enrolled in his or her place. In such a case, the Superintendent of Schools must absorb the loss.

Staff salary adjustments. The only time the program's multiple funding streams cause cost allocation difficulties is when Head Start provides a quality improvement salary increase or cost-of-living adjustment (COLA) that is not provided by the GCC or SPS programs. If such occurs, the Head Start salary increase is passed on to every staff member in the program, since 62 percent of each staff member's salary is paid by Head Start. According to the director, Head Start Federal staff voiced concern over this policy in recent years, because they felt they were funding salary increases for a greater number of staff than Head Start alone was paying for. Thus far, however, Head Start has allowed the Tulare program's method of allocating salary increases to stand, because the program also can claim that it uses the additional funding to serve more of the program's total enrollment through Head Start, rather than through GCC or SPS.35 Of course, in reality, this is just a "paper adjustment" among the three funding sources, because the Tulare program does not use the additional Head Start funding to increase the total number of children actually served.