Office of Head Start Issues Further Guidance on COVID-19 Response and Reopening

On May 21, 2020, the federal Office of Head Start (OHS) issued its latest guidance for grantees adjusting to the ongoing challenges presented by the COVID-19 pandemic. The guidance includes a Q&A addressing outstanding questions from grantees, many of which have also been posed to CAPLAW, an Information Memorandum (IM) on fiscal flexibilities, and a Program Instruction (PI) with updates about funding. OHS will be conducting a webinar on fiscal management, including the IM and PI, on Friday, May 29, 2020, at 2 pm ET.

We have summarized OHS's clarifications below.

Q&A

The May 21 Q&A is part of the general guidance OHS is providing on an ongoing basis to empower grantee leadership to make decisions that support Head Start children and families and, when possible, others in need. Below is a summary of the recent updates:

Income eligibility. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) authorized economic stimulus payments and emergency unemployment compensation payments for eligible individuals. In the Q&A, OHS clarifies that it does not consider either of these forms of financial assistance to be “income” for purposes of determining income eligibility for Head Start programs. Unlike cash assistance, CARES Act stimulus payments are refundable tax credits paid in advance, and emergency unemployment compensation is short-term and directly related to the COVID-19 pandemic. This guidance is especially notable for those who initially interpreted the Head Start Act’s definition of “income” as excluding emergency unemployment compensation.

Child care partners. The May 21 Q&A directs grantees to continue to make payments to child care partners in the Early Head Start - Child Care Partnership program and to abide by existing agreements. Continuing to pay partners will help to ensure that facilities and services are available as soon as programs can re-open. Grantees should review their partnership agreements, and unless the agreements contain prohibition language, continue to pay partners.

Shared employees. OHS has directed grantees to continue to pay wages and provide benefits for staff unable to report to work during center closures necessary to address COVID-19, which has left many grantees wondering how to compensate agency staff whose services are shared between Head Start and other funding sources. The May 21 Q&A clarifies that while sites are closed due to COVID-19, Head Start funds can only be used to pay the portion of staff wages and benefits that would have been paid prior to closure, unless the employee takes on additional Head Start duties on account of site closure. If additional Head Start duties are assigned, wages and benefits charged to Head Start should be adjusted accordingly. If the non-Head Start portion of wages and benefits cannot be paid by another source, it may be in the employee's interest to apply for unemployment benefits. In most states, an employee can receive both wages and unemployment benefits if the wages do not exceed applicable thresholds and are disclosed to the unemployment provider. Note that staff who are paid with Maternal, Infant, and Early Childhood Home Visiting (MIECHV) funds can continue to be paid with MIECHV funds during this time.

Hiring. The Q&A clarifies that programs may allow newly hired employees to begin working virtually if they are unable to obtain required health screenings and remote work is appropriate for their position. All required health screenings for new hires should be completed before the new employee has any in-person contact with children, families or staff.

Background checks. Though state and local fingerprinting offices may be closed, grantees are still responsible for completing criminal record checks for new hires under Section 648A(g) of the Head Start Act and other funding sources. The background checks required under the Head Start Program Performance Standards (HSPPS) are currently on hold until September 30, 2021, but grantees may be able to conduct name-based checks using services available online. Recipients of Child Care and Development Block Grant (CCDBG) funds must comply with the CCDBG background check requirements as implemented in their states, although some states have waived certain CCDBG background check requirements in response to COVID-19. Both groups of grantees should check with their state or region before making changes to their background check policies.

Management and oversight. Many grantees are concerned about complying with requirements for screenings, assessments, data collection and enrollment given the fact that they have had to remain closed for some time. OHS expects programs to take actions that are feasible, reasonable and safe in terms of continuing to provide services and implementing management and oversight systems. OHS will not hold programs accountable for requirements that are not possible or reasonable for them to achieve during COVID-19 closures, but no Head Start requirement or HSPPS will be waived where failure to comply results in unreasonable risk to the health and safety of children, or constitutes fraud or misuse of federal funds.OHS expects programs to maintain records of services that were and were not provided. Many grantees have found it helpful to join the MyPeers community to discuss particular situations with their colleagues.

Fiscal Flexibilities IM

The May 21 IM builds upon guidance previously issued by the Administration for Children and Families (ACF) on administrative flexibilities under the Uniform Guidance, 45 C.F.R. Part 75, for grantees conducting human service activities related to or affected by COVID-19. It specifically describes how OHS is implementing each item from the ACF memorandum.

For a summary of the flexibilities available under the ACF guidance, see CAPLAW’s March 31 News Flash. Below is a summary of how some of those flexibilities apply to Head Start grantees:

1. Charging salaries to the Head Start grant. OHS has directed grantees to continue to pay regularly scheduled wages and benefits to employees unable to report to their usual work location because of COVID-19. This flexibility does not extend to non-COVID-19 related closures during which employees would not otherwise be paid, such as summer breaks.

2. Charging costs that are not normally allowable. OHS understands that costs that are necessary and reasonable for the performance of a Head Start award may be very different from allowable costs during normal operations. Grantees are expected to use prudent judgment and their knowledge of service populations and community circumstances to determine what expenses are necessary and reasonable to maintain services and, when possible, re-open centers. It will be important for grantees to document that costs incurred are necessary, reasonable, and allocable to the program’s COVID-19 response for enrolled children and their families.

3. Relaxing requirements for grantees to have active SAM registrations at the time of application. Through September 30, 2020, subject to the office’s discretion, OHS will accept applications from entities without a SAM number. However, within 60 days of the date of application or by the date of award issuance, whichever is sooner, the awardee must have obtained a SAM number.

4. Flexibility with application deadlines. There are currently no OHS-specific flexibilities with regard to application deadlines. Applicants should continue to submit them on their scheduled due dates. One-time applications, such as those needed to address facility health and safety concerns, will continue to be accepted for consideration. An applicant/grantee must contact its Regional Grants Management officer in the event it is unable to meet a scheduled due date.

5. Granting no-cost extensions on expiring awards. Grantees with Head Start awards active as of March 31, 2020, and scheduled to end on or before December 31, 2020, may, at the discretion of OHS, receive a no-cost extension of the project period of their award for up to 12 months, inclusive of any previous extensions. Grantees should submit their extension request to their Regional Grants Management officer as soon as possible to allow time for processing and issuance of a revised notice of award. OHS will address on a case-by-case basis the need for no-cost extensions for project periods to transition program services and assets, including real property, to a replacement grantee designated as a successor to some or all of a grantee's service area because of a designation renewal system (DRS) competition, OHS de-funding, or grantee relinquishment of an award.

6. Simplifying non-competitive continuation requests. OHS is accepting abbreviated narrative information in support of continuation applications due between April 1 and December 31, 2020. A grantee submitting an application for a non-competitive continuation award during such period must complete the budget and schedule tables within the Head Start Enterprise System (HSES) and submit only a budget justification (Section II) for the Application and Budget Justification Narrative document. Applicants must also complete any other applicable tabs in HSES with supporting documents. Previously published guidance around non-federal match waiver requests and governing body and Policy Council approvals also applies to continuation applications. Submission of the noted information indicates the applicant's intent to resume or restore its project activities and accept the continuation award once issued.

7. Waivers from prior approval requirements. Grantees may use funds from their current operating awards to respond to and recover from the impacts of COVID-19. For expenses necessary to respond to COVID-19, OHS grantees may utilize the following waivers of prior approval requirements between January 20, 2020, and December 31, 2020 (these waivers do not apply to COVID-specific summer program awards):

   1. Grantees may purchase equipment needed to respond to COVID-19 with a value of up to $25,000 (45 CFR §75.308(c)(1)(xi)). 

   2. Grantees may conduct budget transfers between direct cost categories for an aggregate amount not to exceed $1 million to respond to COVID-19 and, when possible, quickly reopen (45 CFR §75.308(e)).

   3. Grantees may engage in sole source purchasing to obtain goods and services needed for COVID-19 response and recovery, regardless of the dollar amount of the procurement transaction (45 CFR §75.329(f)(2)).

8. Extending financial and other reporting deadlines. Head Start grantees may delay submission of financial, performance and other reports for up to three months beyond the normal due date. Grantees will be allowed to continue to draw down federal funds without the timely submission of these reports. However, these reports must be submitted at the end of the postponed period. ACF will waive the requirement for recipients to notify the agency of problems, delays or adverse conditions related to COVID-19 on a grant by grant basis (45 CFR §75.342(d)(1); 2 CFR §200.328(d)(l)). Nonetheless, Head Start grantees must continue to submit open/closed center status reports and enrollment information without postponement.

9. Extending closeout reports. OHS grantees with project periods ending between April 1 and December 31, 2020, may request a delay of up to one year for submission of any pending financial, performance, or other reports required by the terms of their award. Grantees must submit a written request to their Regional Grants Management officer indicating the financial, performance, or other reports for which an extension is requested and the length of the requested extension. Extensions will generally be given in three-month increments and are effective only when approved in writing by ACF. OHS will not entertain requests for extension of any closeout reports or other materials needed to transition program services and assets, including real property, to a replacement grantee designated as a successor because of a designation renewal system competition, OHS de-funding, or grantee relinquishment of an award.

Funding PI

The May 21 PI supersedes PI-20-03, which required grantees seeking CARES Act supplemental Head Start funding to operate a summer program to submit applications to do so. In response to the ongoing uncertainty about when programs will be able to safely reopen, OHS has decided to fully distribute CARES Act funds by formula based on each grantee’s funded enrollment. Grantees are encouraged to use their supplemental funds to operate a summer program, whether or not they previously applied for summer program funding. If a summer program cannot operate, however, grantees may spend the funds on other one-time activities in response to COVID-19.

This News Flash is part of the Community Services Block Grant (CSBG) Legal Training and Technical Assistance (T/TA) Center. It was created by Community Action Program Legal Services, Inc. (CAPLAW) in the performance of the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services Cooperative Agreement – Grant Award Number 90ET0467-03. Any opinion, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration for Children and Families.

The contents of this news flash are intended to convey general information only and do not constitute legal advice. Any communication through this publication or through CAPLAW’s website does not constitute or create an attorney-client relationship. If you need legal advice, please contact CAPLAW or another attorney directly.