Editorial: Move ASAP on the EOB

Tuesday, Nov. 8, 2005 | 8:18 a.m.

On paper, serious accounting problems are jeopardizing the Economic Opportunity Board's federal contract to run the Head Start program in Las Vegas. The board has been under federal scrutiny since a 2002 audit uncovered inexplicable financial deficits and no bank statements to coincide with many purported expenditures.

Major shortcomings in Head Start financial records are not unique to the EOB. In 2003 the House and Senate education committees, reacting largely to media reports from around the country about financial irregularities in local Head Start programs, requested a study by the Government Accountability Office.

The GAO report, released in February, confirmed the nationwide scope of the problem and faulted lax oversight by the Administration for Children and Families, the branch of the Health and Human Services Department charged with overseeing the nearly $7 billion federal budget for Head Start. Among the shortcomings, the report found, was a failure by the ACF to ensure that local organizations receiving Head Start funds "promptly resolve" any problems noted in their financial audits.

That has certainly been the case with the EOB, which annually receives $12.2 million a year to run the local Head Start program. The ACF has known since the 2002 audit that the program for pre-schoolers here is rife with accounting errors. Last year the case against the EOB intensified when federal auditors found that the EOB, in just two transactions, had withdrawn $500,000 in Head Start funds but could not account for how the funds had been spent. The auditors also found that the Head Start children were being shortchanged on their health care benefits.

Other recent problems with the EOB have included $2.1 million in missing state money, as well as missing federal grant money. Additionally, several firings and resignations of key EOB employees and board members occurred last year.

We have repeatedly called for quick action in dealing with the EOB. This is an agency, whose total annual budget has been as high as $60 million, that is responsible for delivering vital services to low-income people throughout the Las Vegas Valley.

The most recent action is an Oct. 27 letter sent to the EOB by the ACF. The letter threatens to cancel the Head Start contract, after which other agencies would be able to apply for it. This would be encouraging, except for the fact that the EOB received a similar letter from the ACF in January. How many letters is this going to take? The current letter also gives the EOB an opportunity to mount a lengthy appeal to any action against its Head Start contract.

We believe the ACF should do as the GAO recommends, that is, "promptly resolve" the problems with the EOB.