Options for Full-Day Services for Children Participating in Head Start . Insufficient Revenues

03/07/1995

For grantees that rely on many funding sources to cover the expenses of full-day programs, shortfalls and late payments often produce situations in which there is not enough money to pay the bills. This may be a temporary phenomenon resulting from a delay in reimbursements or a more long-term problem that results from costs simply exceeding revenues.

The grantees participating in this study have devised a variety of options to deal with this situation. For the one grantee where child care reimbursement rates exceed Head Start allotments, the only time the grantee faces a funding shortfall is when children leave the program before replacements can be enrolled. For days when the program is "short on children," expenses continue to be realized (the teacher must be paid regardless of the number of children in the room) but reimbursements for the children present do not cover costs. In this circumstance, the grantee relies on its sponsoring agency (the superintendent of schools) to pick up the tab.

Other programs indicate that reimbursement rates from some Federal sources are simply too low to maintain a program that meets Head Start Performance Standards throughout the day. For instance, child-staff ratios and staffing patterns that are allowable under these other programs often fail to meet Head Start requirements. In some of these cases, parent fees are used to make up the difference between reimbursement rates and costs. Even with additional fees, one director still occasionally runs into short-term cash shortages and relies on the grantee's sponsoring agency as payer of last resort.

Other grantees make ends meet by collecting funds from more than one source to pay for full-day services. In places where full-day reimbursements are available for 25 hours or more of care per week, grantees can sometimes collect full-day reimbursement for the non-Head Start portion of the day. To illustrate, if a child is in a full-day program for nine hours a day, four of those hours are considered Head Start hours and are fully funded by Head Start: In addition, the child is eligible for full-day reimbursement for the remaining five hours. Grantees pursuing this strategy indicate that they need this additional funding to maintain Head Start quality throughout the day; reimbursements from other sources are almost always too low to maintain Head Start standards.

Until recently, one grantee relied on additional full-day funding to avoid chronic funding shortages for its infant-toddler program. These children's care was paid for entirely through the state's publicly funded child care account, but the money did not cover all the expenses of the program. Therefore, grantee staff asked each AFDC-eligible parent with a child in Head Start full- day care to apply for publicly funded child care money. For accounting purposes, the grantee defined Head Start as a 4-hour program and in addition, collected a full day of child care subsidy because the children were provided care for 5 hours longer than the designated Head Start time. This additional payment more than covered the costs of full-day services for 3- to 5-year-olds. Any funds that were not spent for 3- to 5-year- olds were placed in a special corporate account. At the end of the year, when the monies became general corporate funds, the grantee used them to offset the loss that its books showed for the infant-toddler program.8

Yet another, faced with a similar problem, continues to collect full-day reimbursements for the non-Head Start portion of the day. Grantees that are collecting full-day reimbursements for the part of the day that is not financed by Head Start indicated that they have been operating within the rules established by the funding sources when requesting reimbursements.