$1.5 million wasted in Head Start program

A state audit slammed Missouri early childhood development programs on Tuesday for receiving double funding without expanding services, as well as a lack of critical oversight.

The audit rated the Department of Social Services (DSS) and the Department of Elementary and Secondary Education (DESE) for poor performance. It stated that within the areas audited there were deficiencies in internal controls, noncompliance with legal provisions, and the need for improvement in management practices and procedures.

"The most problematic finding was that the Department of Social Services doubled its funding for the Early Head Start program and gave contractors seven months of the double funding, but did not require them to increase their number of children served," said State Auditor Thomas Schweich. "As a result, eight of the nine contractors were averaging service to 240 families, when they should have been serving up to 580 families, which wasted $1.5 million of tax payer money."

Schweich added that after the previously-mentioned seven months, the DSS continued to pay nonperforming contractors, which wasted another $133,000. The DSS has not attempted to get back any of the money they have paid contractors, Schweich said.

The DSS's in-audit response to this was that the contracts were reviewed by several DSS divisions and the Office of Administration, and "Contractors were paid in accordance with the contract. Thus, no over payments occurred and no recovery is necessary." Schweich translated that to the DSS admitting it created a bad contract and is not doing anything about it.

"What they ended up doing is spending $1.5 million on bureaucrats instead of children, and that is a problem for me," Schweich said. "On some of our findings, they (DSS and DESE) did agree to make some changes."

Another issue the audit raised was the department's bidding process. The audit noted when a competitive bidding process was allowed, it sometime saved more than $5,000 per family. This led Schweich to suggest more competitive biding processes over sole source selection.

The DSS responded by saying it will continue to use competitive and noncompetitive contract bidding because of the substantial value in the already-established relationships in the community partners, which do not compete with other bidders, and that the non-compete contract has proven to be a critical element in the success of certain programs.

"They (DSS) did not take our recommendation on competing ... which is very problematic for us," Schweich said. "Most auditees recognize that we are doing our job and that we have good suggestions. Then they simply implement them. Every now and then you get one that is very resistant to change, and this one is somewhere in between."

Other problems within the audit were the DSS and DESE had no uniform pricing index for services, and they are not monitoring their families enough to make sure they are eligible for the services they are given, or that afterward the services helped. The lack of on-site monitoring led to multiple inefficiencies and duplicated efforts. Some of these include a school district that billed the wrong program for 13 years, a district that duplicated a bill for 66 Parent as Teacher program visits, which did little to offset the same district's failure to bill for 256 other visits.

"One of the reasons we gave them a low rating is some of these findings have been pointed out before and not corrected," Schweich said. "One real good way to get a low rating from my office is to not correct your prior problems."

He also mentioned during the time these agencies were being monitored for the audit they were underfunded by approximately $7.85 million, and by law they should have had more funding, but that is an issue for legislation and budgeting.

"They are being underfunded for reasons that have nothing to do with performance," Schweich said. "But I will tell you, before you give them more money, you should fix these problems. I mean I am all for helping children, but if the money is being wasted it is just helping bureaucrats and not helping children."

Since the audit's release, DESE has started implementing the suggested changes, according to a DESE release. These changes include implementing a new online process for ensuring compliance with Early Childhood Special Education funding.

The release also said the DESE agrees it should make more on-site visits to monitor those who are receiving services, but the department's reduced budget has prevented it.