Review of Compensation for Personnel Services Claimed By The Administracion De Familias Y Ninos To The Head Start Program for the Period March 1, 1998 to February 28, 1999

EXECUTIVE SUMMARY:

This report points out that Administracion De Familias Y Ninos' (ADFAN) practice of charging the cost of support services employees arbitrarily to the Head Start Program (HSP) and all other programs it administered is not appropriate.  Federal regulations require that these costs be allocated to benefiting programs.  Consequently, we came up with a reasonable basis for allocating the cost of all ADFAN support service employees to the HSP and all other programs.  The majority of the programs affected by the reallocation were administered by the Administration for Children and Families.  The reallocation resulted in a downward adjustment of $1,182,171 of compensated personnel services charged to the HSP program.  We also found that ADFAN improperly claimed $39,409 for health insurance and $75,694 for the cost of living adjustments for support service employees to the HSP.  Lastly, we found that the remaining balance of compensated personnel services costs claimed for the ADFAN administrative component was allowable, allocable and reasonable.