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The objectives of our review were to determine if (1) the compensation practices for five key executives and teachers were reasonable and consistent with Federal requirements and guidelines; and (2) KCMC’s administrative costs were allowable and reasonable in accordance with the Head Start Act, corresponding regulations at 45 CFR part 1301, and OMB Circulars A-110 and A-122. We found that Compensation for the teachers was reasonable and consistent with Federal requirements and guidelines. With regard to executive salaries, the executive director’s was not reasonable, and there was no clear written policy on compensation for any of the executives. In addition, certain other administrative costs were unallowable or unsupported. We recommend that KCMC refund $953,245 of questioned administrative costs. KCMS did not comment on our findings and recommendation.