SUBJECT: Philadelphia Housing Authority

DECISION

The Philadelphia Housing Authority (PHA) appealed the determination of the Administration for Children and Families (ACF) terminating PHA's grant under the Head Start Act, 42 U.S.C. § 9831 et seq. The ACF determination was based on a review conducted in March and April 2004 finding that PHA had not corrected deficiencies and noncompliance that had been initially identified in a January 2003 review. In response to PHA's appeal, ACF filed a motion for summary disposition.

We grant the motion for summary disposition and affirm ACF's decision because we find no genuine dispute of material fact regarding the existence of deficiencies and noncompliance sufficient to support termination of PHA's Head Start funding. In particular, the record indicates no genuine dispute of material fact concerning ACF findings that PHA failed to attain and maintain enrollment required by its grant award, did not adequately address hazardous conditions on its playground, and failed to comply with program governance requirements for shared decision making, information sharing, written procedures defining the roles and responsibility of the PHA governing body, and an ongoing program planning process. While the record indicates disputed facts related to other ACF findings, those facts are not material since the undisputed facts are sufficient to support ACF's decision. Even if all disputed facts were resolved in favor of PHA at a hearing, we would still uphold ACF's decision.

Background

The following facts are undisputed. PHA is a Head Start grantee that receives approximately $1.4 million in federal funds to provide Head Start services at multiple sites, or "centers," to 210 children and families living in or near public housing developments in Philadelphia, Pennsylvania. ACF's Submission of Material Facts (ACF Material Facts) at ¶¶ 1, 2. ⁽¹⁾ From January 13 to January 17, 2003, ACF conducted a comprehensive on-site review of PHA's Head Start program using a standardized review protocol entitled the "Program Review Instrument for Systems Monitoring of Head Start Grantees," and referred to as "PRISM"(the "2003 PRISM review"). Id. at ¶ 3. As a result of the 2003 PRISM review, ACF determined that PHA's Head Start program had deficiencies and areas of noncompliance in eleven major program areas. Id. at ¶¶ 4, 5; ACF Ex. 3.

By letter dated February 20, 2003, ACF transmitted the review report identifying the deficiencies and informed PHA that it must "correct all deficiencies as soon as possible." ACF Material Facts at ¶¶ 6, 7; PHA Ex. 4. ACF directed PHA to develop and submit a Quality Improvement Plan (QIP) within 30 days of receipt of the letter, pursuant to 45 C.F.R. § 1304.60, and stated that "if a Head Start grantee fails to correct a deficiency, either immediately, or within the timeframe specified in the approved QIP, the responsible HHS official will issue a letter of termination or a denial of refunding" and that "a deficiency that is not timely corrected shall be a material failure of a grantee to comply with the terms and conditions of the award." Id. at ¶¶ 7, 9-11; PHA Ex. 4. ACF specifically informed PHA that correction of PHA's deficiencies required its achieving "full and complete compliance with all cited regulatory standards no later than one year from [PHA's] receipt of the February 20, 2003 notice." Id. at ¶ 10; PHA Ex. 4.

The February 20, 2003 letter also identified areas of noncompliance and indicated that these areas of noncompliance should be corrected within 90 days of receipt of the letter unless more time was authorized, otherwise these areas of noncompliance would be determined to be deficiencies. ACF Material Facts at ¶ 8. On May 28, 2003, ACF notified PHA of additional deficiencies based on the areas of non-compliance that had not been corrected within the 90 day period, and requested that PHA address these additional deficiencies in its QIP. Id. at ¶ 13; PHA Ex. 8.

On May 12, 2003 PHA submitted a QIP. ACF Material Facts at ¶ 12. By letter dated May 30, 2003, ACF found this QIP unacceptable because it lacked a specific timetable and procedures to correct all deficiencies. Id. at ¶ 12; ACF Ex. 4. In the May 30 letter disapproving the QIP, ACF again informed PHA that correction of its deficiencies required achieving "full and complete compliance with all cited regulatory standards no later than one year from [PHA's] receipt of the February 20, 2003 notice." ACF Ex. 4, at 2. PHA submitted its Revised QIP on July 11, and ACF approved it by letter dated August 4, 2003. ACF Material Facts at ¶ 14; PHA Exs. 6 and 7.

In the August 4, 2003 letter approving the Revised QIP, ACF repeated, "In order to correct a deficiency, you must come into complete and full compliance with the cited regulations." ACF Material Facts at ¶ 14. The letter also notified PHA that a follow-up monitoring review was scheduled for the week of March 1-5, 2004. Id. ACF repeated both of these points in an October 10, 2003 letter to PHA, and stated, "If by February 25, 2004, you fail to correct all deficiencies, the responsible HHS official will issue a letter of termination or denial of funding." Id. at ¶ 18; ACF Ex. 6.

ACF conducted a follow-up monitoring review from March 1-5, 2004 (first 2004 review) and March 29-April 2, 2004 (second 2004 review) which resulted in a report finding continued deficiencies (2004 monitoring report). ACF Material Facts at ¶ 20; PHA Ex. 2. The 2004 monitoring report states that, by letter dated May 28, 2004, ACF transmitted to PHA a report of its monitoring review, and notified PHA of the termination of PHA's designation as a Head Start grantee. ACF Material Facts at ¶ 23.

ACF based the termination on its review findings that PHA had failed to correct deficiencies and noncompliance in the areas of (1) Family Partnerships, pursuant to 45 C.F.R. § 1304.40(a)(2); (2) Enrollment, pursuant to 45 C.F.R. § 1305.7(b); and (3) Program Design and Management, pursuant to 45 C.F.R. Part 1304, Subpart D. PHA Ex. 2. The findings related to the third area included issues related to a number of separate requirements, including requirements for program governance pursuant to 45 C.F.R. §§ 1304.50(d)(1)(ii) and 1304.50(g)(1), planning pursuant to 45 C.F.R. § 1304.51(a)(1), communication pursuant to 45 C.F.R. § 1304.51(d), recordkeeping and reporting, pursuant to 45 C.F.R. § 1304.51(g), ongoing monitoring pursuant to 45 C.F.R. § 1304.51(i)(2), human resources pursuant to 45 C.F.R. § 1304.52(j)(1), fiscal management pursuant to 45 C.F.R. § 92.20(b)(2), cost sharing pursuant to 45 C.F.R. § 92.44, and facilities, equipment and transportation pursuant to 45 C.F.R. § 1304.53(a)(10)(viii).

PHA timely appealed the termination to this Board. In its notice of appeal, PHA generally disputed ACF's findings of continued deficiencies, arguing that PHA had substantially performed in accordance with all requirements, that the ACF reviewers were biased against PHA, and that ACF had failed to provide adequate notice and an opportunity to cure.

ACF responded to PHA's notice of appeal with a Motion for Summary Disposition.

PHA submitted PHA Exhibits 1 through 60. ACF submitted ACF Exhibits 1 through 49. The parties filed the following memoranda of law: PHA Appeal Brief (PHA Appeal Br.), ACF Brief in Support of Disposition (ACF Summary Disposition Br.); PHA Brief in Opposition to Summary Disposition (PHA Opposition Br.); and ACF Additional Submission for Summary Disposition (ACF Additional Submission). ACF filed a Submission of Material Facts, and PHA filed a Response to ACF's Submission of Material Facts. At PHA's request, the Board heard oral argument on February 1, 2005, and the transcript from that argument is part of the record for this decision.

Applicable Law

Head Start is a national program that provides comprehensive child development services. 42 U.S.C. § 9831; 57 Fed. Reg. 46,718 (Oct. 9, 1992). The program serves primarily low-income children, ages three to five, and their families. Id. The Department of Health and Human Services (HHS) awards grants to community-based organizations that assume responsibility for delivering Head Start services - including education, nutrition, health, and social services -- to their communities. Id. A community Head Start program is required to provide for the direct participation of parents of enrolled children in the development, implementation, and management of the program. 42 U.S.C. § 9837(b).

To ensure that eligible children and their families receive high quality services responsive to their needs, Head Start grantees must comply with the Head Start Program Performance Standards codified in 45 C.F.R. Part 1304. Head Start Performance Standards (final rule), 61 Fed. Reg. 57,186 (Nov. 5, 1996). These performance standards cover the entire range of Head Start services and constitute the minimum requirements that a Head Start grantee must meet in three areas: Early Childhood Development and Health Services; Family and Community Partnerships; and Program Design and Management. Id.

HHS is required to conduct a periodic review of each Head Start grantee at least once every three years. 42 U.S.C. § 9836a(c)(1)(A). If as a result of the review the "responsible HHS official" finds that a grantee has one or more "deficiencies" the official must "notify the grantee promptly, in writing, of the finding, identifying the deficiencies to be corrected and, with respect to each identified deficiency, . . . inform the grantee that it must correct the deficiency either immediately or pursuant to a Quality Improvement Plan." 45 C.F.R. § 1304.60(b).

Not every instance of noncompliance with a Head Start requirement is a "deficiency" warranting termination pursuant to sections 1304.60(f) and 1303.14(b)(4). A grantee's noncompliance with a program performance standard or other Head Start requirement constitutes a "deficiency" if it meets one of the definitions of that term in 45 C.F.R. § 1304.3(a)(6). The definitions in sections 1304.3(a)(6)(i)(A) and (C) and 1304.3(a)(6)(iii) are relevant here.

Section 1304.3(a)(6)(i)(A) and (C) provide that a deficiency is:

An area or areas of performance in which an Early Head Start or Head Start grantee agency is not in compliance with State or Federal requirements, including but not limited to, the Head Start Act or one or more of the regulations under parts 1301, 1304, 1305, 1306 or 1308 of [title 42 C.F.R.] and which involves:

(A) A threat to the health, safety or civil rights of children or staff . . . [or]

* * *

(C) A failure to perform substantially the requirements related to Early Childhood Development and Health Services, Family and Community Partnerships, or Program Design and Management . . . .

Section 1304.3(a)(6)(iii) provides that a deficiency can be "any other violation" of the Head Start Act or regulations which "the grantee has shown an unwillingness or inability to correct within the period specified by the responsible HHS official, of which the responsible HHS official has given the grantee written notice of pursuant to section 1304.61." 45 C.F.R. § 1304.3(a)(6)(iii). Under this provision, noncompliance that does not constitute a deficiency under sections 1304.3(a)(6)(i)(A)-(D) or 1304.3(a)(6)(ii) is deemed to be a deficiency after the grantee has demonstrated an inability or unwillingness to correct it within the timeframe specified by the responsible HHS official.

If the responsible HHS official permits the grantee to correct a deficiency pursuant to a QIP, the grantee must submit a QIP that specifies, for each identified deficiency, "the actions that the grantee will take to correct the deficiency and the timeframe within which it will be corrected." 45 C.F.R. § 1304.60(c). The QIP must be approved by the responsible HHS official. See 45 C.F.R. § 1304.60(d). The period for correcting deficiencies under an approved QIP may not exceed one year from the date the grantee is notified about them. 42 U.S.C. § 9836A(d)(2)(A); 45 C.F.R. § 1304.60(c). The requirement that deficiencies be corrected within one year ensures that families receive the full benefits of the Head Start program and that grantees have sufficient incentive to take prompt action to improve their programs. Target Area Programs for Child Development, Inc., DAB No. 1615 (1997).

If a grantee fails to correct its deficiencies immediately or pursuant to the timetable specified in an approved QIP, then ACF is authorized, pursuant to 42 C.F.R. § 1304.60(f), to terminate funding. A single uncorrected deficiency is sufficient to warrant termination of funding. 45 C.F.R. § 1303.14(b)(4) (authorizing termination for failure to correct "one or more deficiencies"); The Human Development Corporation of Metropolitan St. Louis, DAB No. 1703, at 2 (1999).

In addition to the termination authority in 45 C.F.R. § 1304.60(f), the Head Start regulations at 45 C.F.R. § 1303.14(b) authorize ACF to terminate a grantee's funding based on any one of nine grounds. These include failure to timely correct a deficiency, failure to comply with eligibility requirements and limitations on enrollment, and failure to comply with any other terms of the grant award or any other applicable law, requirement or policy. 45 C.F.R. §§ 1303.14(b)(4), 1303.14(b)(5), 1303.14(b)(6) and 1303.14(b)(9).

The responsible HHS official initiates a termination action by issuing a notice of termination that sets forth, among other things, the legal basis for termination, the factual findings on which the termination is based, and citations to appropriate legal authority. 45 C.F.R. § 1303.14(c). The grantee may appeal the termination action to the Departmental Appeals Board (Board), which is authorized to conduct a hearing on the matter on behalf of the Secretary. Mansfield-Richland-Morrow Total Operation Against Poverty, Inc., DAB No. 1671 (1998). A grantee's appeal must, among other things, "[s]pecifically identify what factual findings are disputed . . . [and] identify any legal issues raised, including relevant citations . . . ." 45 C.F.R. § 1303.14(d)(2-3).

Standard of Review for Summary Disposition

Head Start grantees are entitled under the regulations to an evidentiary hearing to contest the basis for ACF's termination decision. See 45 C.F.R. § 1303.16. The Board may, however, issue a decision without a hearing if the prerequisites for summary disposition are satisfied. DOP Consolidated Human Services Agency, Inc., DAB No. 1689, at 6-8 (1999).

Summary disposition in the nature of summary judgment is appropriate when the record shows that there is no genuine dispute as to any material fact, and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Thus, summary disposition is appropriate when the grantee "fail[s] to allege that testimony at a hearing would address any disputed facts the resolution of which was necessary to decide the case." DOP at 7.

If a moving party carries its initial burden, the non-moving party must "come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ. P. 56(e)). To defeat an adequately supported summary judgment motion, the non-moving party may not rely on general denials in its pleadings or briefs, but must furnish evidence of a genuine dispute concerning a material fact - a fact that, if proven, would affect the outcome of the case under governing law. Id. at 586, n.11; Celotex, 477 U.S. at 322. In deciding a summary judgment motion, a tribunal must view the entire record in the light most favorable to the non-moving party, drawing all reasonable inferences from the evidence in that party's favor. Saginaw County Community Action Committee, Inc., DAB No. 1953, at 17 (2004).

The extent to which the parties have carried their respective evidentiary burdens under the relevant substantive law is a factor in evaluating whether the prerequisites for summary disposition have been met. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (in ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burdens). The burdens of proof applicable to Head Start grant terminations are well-settled. ACF must make a prima facie showing (that is, proffer evidence sufficient to support a decision in its favor absent contrary evidence) that it has a basis for termination under the relevant regulatory standards. See Target Area Programs for Child Development at 6 (indicating that ACF must "set forth legally adequate reasons to support a denial of refunding or termination" and provide "sufficient specificity for the grantee to respond to the substance of individual findings"). If ACF makes this prima facie showing, the grantee must demonstrate by a preponderance of the evidence that it is in compliance with program standards. ⁽²⁾ Id. This means that, when ACF has presented a prima facie case for termination, a grantee can avoid summary disposition only if it offers evidence that there is a genuine dispute of material fact or otherwise demonstrates that the record, viewed in the light most favorable to the grantee, might cause a rational trier of fact, applying a preponderance of the evidence standard, to conclude that the grantee was in compliance with program standards. See DOP at 6-8.

In the instant case, ACF presented a prima facie case that focused on alleged noncompliance with performance standards and program requirements relating to program governance, enrollment, family and community partnerships, human resources and record-keeping, facility safety, financial management systems, and cost sharing. Because we find that the evidence concerning the alleged deficiencies and noncompliance in program governance, enrollment, and facility safety are sufficient to support a judgment in favor of ACF, we limit our discussion to those deficiencies. ⁽³⁾

1. Full compliance or substantial performance

While PHA acknowledges that it must correct deficiencies to avoid termination, it asserts that to "correct a deficiency" it is not required to demonstrate that it fully complied with the program requirement, but only that it substantially performed that requirement. PHA Opposition Br. at 2-3; PHA letter of March 2, 2005 (PHA letter) at 1-3. PHA argues that its alleged deficiencies fall within 45 C.F.R. § 1304.3(a)(6)(i)(C), which defines "deficiency" as a failure to substantially perform requirements related to three regulatory areas. ⁽⁴⁾ Therefore, PHA asserts, to correct such a deficiency, it must only show that it is substantially performing the requirement. PHA Opposition Br. at 2-3.

ACF asserts that regulations for timely correction contemplate full compliance with program performance requirements. ACF Additional Submission at 2-8. ACF relied on the plain language of the regulation at 45 C.F.R. § 1304.60(f) authorizing termination for failure to "correct a deficiency" and the governing statutory authority at 42 U.S.C. § 9836a(d)(1)(C) and (2)(A)(i-iii) requiring that grantees "eliminate each deficiency identified." ACF correctly points out that this Board has previously found ACF's reading of the regulations to be permissible and reasonable. DOP Consolidated Human Services Agency, DAB No. 1689 (1999). ⁽⁵⁾

PHA responds that ACF's reading of 45 C.F.R. § 1304.60(f) is contrary to regulatory provisions at 45 C.F.R. § 1304.3(a)(6)(i)(C) that define a deficiency in three areas to be a failure to substantially perform. PHA argues that "correcting" a deficiency in those three areas therefore means substantially performing. PHA asserts that its reading is also supported by 45 C.F.R. § 1304.61(b) and 45 C.F.R. § 1304.3(a)(6)(iii), which it views as a separate procedure to address noncompliance. Under these provisions, such noncompliance becomes a deficiency only after the grantee has had notice and an opportunity to correct the noncompliance within a prescribed time limit and fails to do so. From this, PHA extrapolates that, if a grantee addresses an identified deficiency in the three areas encompassed by 45 C.F.R. § 1304.3(a)(6)(i)(C) by substantially performing, it no longer has a deficiency and, if there is remaining noncompliance, the grantee must be given another notice and opportunity to correct under 45 C.F.R. § 1304.3(a)(iii) prior to any termination action. PHA Letter at 1-3.

We disagree. While the definition of a deficiency sets forth substantial performance as the applicable standard for an initial finding of a deficiency in the listed areas, that definition does not address the standard for correction of an identified deficiency in any area that is set forth as a basis for termination. Specifically, the provision at 45 C.F.R. § 1304.60(f) that requires correction of identified deficiencies does not incorporate a substantial performance standard; nor is there any mention of substantial performance in the termination provision for failure to timely correct deficiencies at 45 C.F.R. § 1303.14(b)(4). Furthermore, ACF explained a reasonable basis for the interpretation that correction requires full compliance; to permit grantees to only partially correct a deficiency to avoid termination would effectively result in grantees never fully complying with Head Start requirements. ACF Additional Submission at 5.

In addition, PHA does not dispute that, under section 1304.3(a)(iii) and 1304.61, ACF may require a grantee to come into full compliance in order to correct noncompliance that does not constitute a deficiency unless uncorrected. It is logical to read the regulations to accord ACF the same authority to require full compliance to correct a deficiency, which represents a significant failing, that is available for uncorrected noncompliance. ⁽⁶⁾

2. Bias

PHA argued that the reviewers conducting the first 2004 review were biased against PHA and had been instructed to find a basis to terminate PHA. PHA Material Facts at 2. After their site visit, the PHA Executive Director specifically complained to the Regional Administrator about this bias and described reviewer conduct which he believed demonstrated bias. PHA Ex. 9; see also PHA Exs. 10, 48. In response, ACF discarded the findings of two of the reviewers on the first review team and conducted a second review with additional reviewers. ⁽⁷⁾ PHA Ex. 1, at 3.

In resisting summary judgment, PHA argues that the possibility of reviewer bias makes summary judgment inappropriate. PHA states "it would be improper to rely upon those reviewers' findings as the basis for terminating PHA's grant, especially without further hearings, testimonial evidence, and/or adversarial testing of ACF reviewers." PHA Material Facts at ¶ 2.

For purposes of summary judgment, we draw all inferences in favor of PHA, the non-moving party, and we treat as disputed all challenged reviewer observations that are supported only by subjective observations.

However, as we have found in other cases, reviewer bias does not affect the reliability of objective evidence, i.e., evidence that is not dependent on subjective reviewer observation. See, e.g., Vandalia Park, DAB No. 1940 (2004). Examples of such evidence in this case are documents or photographs, the authenticity of which is undisputed. Additionally, reviewer bias does not affect the reliability of statements of witnesses submitted by PHA. Therefore, in determining whether there are material facts in dispute, we rely solely on undisputed factual observations of the reviewers, on documents and photographs, and on statements of PHA witnesses filed by PHA in this proceeding.

3. Factual Issues: Deficiencies and Noncompliance

ACF asserts in its motion for summary disposition that the evidence (including documents submitted by PHA) establishes that PHA did not timely correct deficiencies, first identified during the 2003 PRISM Review, in the areas of enrollment, facilities, human resources and record keeping, program governance and management, financial management systems, and cost sharing documentation. ACF Summary Disposition Br. at 19-45. Below we conclude there are no genuine disputes of material fact regarding the existence of deficiencies in the areas of enrollment, facilities, and program governance and management and that ACF is entitled to prevail as a matter of law as to these deficiencies. Since a single uncorrected deficiency is sufficient to warrant termination of funding (45 C.F.R. § 1303.14(b)(4)), these deficiency findings provide a legally sufficient basis for ACF's termination of PHA's Head Start funding, and we do not address the remainder of ACF's factual allegations.

(a) Enrollment

Pursuant to 45 C.F.R. § 1305.7(b), a Head Start grantee is required to "maintain its funded enrollment level" and fill vacancies within 30 calendar days (except that a grantee may elect not to fill a vacancy if 60 calendar days or less remain in the enrollment year).

At all times relevant to this appeal, PHA was funded to serve 210 children. PHA admitted that "[d]uring the week of the January 2003 review, the PHA Head Start Program served only 191 children." PHA Material Facts at ¶ 25; PHA Ex. 3, at 18. In the 2004 monitoring review, ACF found PHA had not maintained or achieved funded enrollment at any time since the 2003 PRISM review and that its enrollment had actually declined from the 191 figure of January 2003. ACF Material Facts at ¶¶ 26, 27. ⁽⁸⁾

PHA admits that it failed to enroll 210 children at any time during the Quality Improvement Period and, therefore, was never in full compliance with the enrollment requirement. PHA Material Facts at ¶¶ 32, 34, 37. PHA represents that its failure to enroll 210 children resulted from the condemnation of one of its seven centers "due to circumstances beyond its control" (PHA Appeal Br. at 34; PHA Opposition Br. at 4) and its inability, "despite its diligent efforts" (PHA Material Facts at ¶ 34), to replace this space or fully enroll children in its existing space. PHA asserts it substantially performed this requirement because, it had "slated enrollment" of 206 children as of February 25, 2004 and actual enrollment of 206 children on February 27, 2004 when it opened a seventh center. ⁽⁹⁾ Id. at ¶¶ 26, 28-32, 34, 37. For the following reasons, we find that none of these assertions or arguments establish a dispute of material fact as to whether PHA was in compliance with the enrollment standard.

First, since PHA does not contend that it maintained funded enrollment in compliance with 45 C.F.R. § 1305.7, we find that there is an undisputed factual basis for termination.

Second, PHA has provided no legal authority to support its proposition that "circumstances beyond its control" or "diligent efforts" excuse a grantee's failure to meet enrollment requirements. Moreover, even if we were to accept this proposition, PHA proffers no evidence to support its allegation that failure to open a seventh center prior to February 25, 2005 or to fully enroll its existing centers was due to circumstances beyond its control or occurred despite its diligent efforts. ⁽¹⁰⁾ Nor does PHA indicate any reason why circumstances prevented it from achieving compliance by voluntarily requesting a reduction in funded enrollment.

Third, assuming for purposes of summary judgment that PHA had 206 children actually enrolled as of February 27, 2004 (PHA Material Facts at ¶¶ 31, 32.), PHA's actions after the Quality Improvement Period are not material because ACF is not required to consider PHA's actions subsequent to the end of the period for correction in determining whether PHA corrected its deficiencies. The regulations are clear that all deficiencies must be corrected by the end of the period for correction, which may not exceed one year. 45 C.F.R. § 1304.60(c). To require ACF to look beyond that period would effectively extend the period of correction and would be inconsistent with that requirement. ⁽¹¹⁾ On February 25, 2005, PHA's actual enrollment was 164 or 174, substantially below funded enrollment of 210. ⁽¹²⁾

Even if ACF were required to consider the imminent opening of the seventh center, it would not affect our conclusion. PHA's argument that its "slated enrollment" of 206 students by February 25, 2004 constitutes substantial performance reflects a fundamental misunderstanding of the requirement. Section 1305.7(b) requires a grantee to "maintain its funded enrollment level" rather than simply to attain (or take steps to attain) funded enrollment on the last day of the Quality Improvement Period. 45 C.F.R. § 1305.7(b)(emphasis added). The nature of the requirement is reflected in the Revised QIP in which PHA represented that, as of September 2003, it "would maintain funded enrollment class size for each center within thirty days of a confirmed vacancy." ACF Material Facts at ¶ 33. Therefore, in determining whether PHA's enrollment figures on the last day of the Quality Improvement Period constitute substantial performance, ACF may properly consider PHA's performance over the Quality Improvement Period as an indicator of its commitment and ability to maintain funded enrollment.

The undisputed facts show that PHA did not even maintain funded enrollment at the six existing centers it operated. PHA admits that it failed to maintain enrollment at those centers at their capacity of 180 children. PHA Material Facts at ¶ 34. Enrollment at those centers did not approach that number of children, nor was there a numerical trend indicating progress over the Quality Improvement Period in the performance of this requirement. The record indicates that PHA enrolled 191 children in January 2003 (Id. ¶ 25) but that this enrollment was lower throughout the Quality Improvement Period: PHA enrolled 174 children in May 2003 (PHA Ex. 2, at 27; ACF Ex. 35, at 3), 160 children in October 2003, 167 children in November 2003, 169 children in December 2003 (PHA Material Facts at ¶ 29), 166 children in January 2004 (Id. at ¶ 30), and 164 or 174 children as of February 25, 2004 (Id. at ¶ 31). ⁽¹³⁾

PHA did not dispute the material fact that it had failed to attain funded enrollment as of February 25, 2005. Nor did PHA proffer evidence that, viewed in the light most favorable to PHA, could cause a rational trier of fact to conclude that PHA met or was substantially performing the enrollment requirement as of February 25, 2004. Thus we conclude that there is no genuine dispute of material fact, and that ACF is entitled to judgment as a matter of law on enrollment issues.

While this enrollment shortfall is a legally sufficient basis for ACF's termination of PHA's Head Start funding, we consider below other grounds ACF advanced in support of this termination.

(b) Facilities - Playgrounds

Pursuant to 45 C.F.R. § 1304.53(a)(10)(viii), Head Start indoor and outdoor premises must be "cleaned daily and kept free of undesirable and hazardous materials and conditions."

In the 2003 PRISM review, reviewers reported observing litter, broken glass and other debris on four of PHA six playgrounds. ACF Material Facts at ¶ 85. In the first 2004 review, the reviewers reported observing, on two playgrounds, litter, broken glass and other foreign debris within reach of children. Id. at ¶ 86. In addition, at one of the two playgrounds, the review team found a hole, about three feet square, in the side of an adjacent abandoned building, which served as a perimeter wall to the playground. The hole was at ground level, easily accessible to children, and had no barrier to prevent children from entering. Id. at ¶ 87.

As to the cleanliness of the playgrounds, PHA responds with a statement of a PHA employee attesting to ongoing efforts to keep the playgrounds clean (PHA Ex. 60) and photographs the employee indicated were taken on the day the reviewers visited (PHA Exs. 40, 41, 60, Tab A), which PHA alleges demonstrate that the two playgrounds were clean. PHA also submitted evidence which drew into question the credibility of the reviewers who found otherwise. PHA Ex. 48.

The evidence PHA submitted was sufficient to raise a genuine dispute of material fact as to whether the playgrounds were clean. ACF's evidence is primarily the subjective observation of its initial reviewers and, as noted above, PHA has raised a genuine dispute as to the credibility of those reviewers. For purposes of this summary judgment motion, we assume that PHA could at a hearing sustain its challenge to the credibility of these reviewers.

As to the hole, PHA submitted photographs of the hole prior to and after it had been covered by plywood. PHA Ex. 9 at unnumbered page 5 of Ex. H and PHA Ex. 42. PHA also submitted a declaration of a PHA employee who stated:

6. The Richard Allen Playground is owned by the City of Philadelphia and regularly maintained by the PHA staff. During the Quality Improvement Period for the PHA Head Start program (February 25, 2003 to February 25, 2004), a building adjacent to the Richard Allen Playground developed a hole in the exterior wall facing the playground.

7. PHA's Head Start program sought to remedy the situation immediately by covering up the hole; unfortunately, PHA had neither the legal authority nor control over this adjacent property, and therefore could not cover up the hole.

8. Once PHA's Head Start program notified PHA of the condition of the wall, PHA staff sought and received authority from the City of Philadelphia's Department of Licenses and Inspections to remedy the hole itself. Upon receipt of this authority, PHA promptly covered the hole at it own expense. A photograph of the remedied hole is attached as Exhibit B.

PHA Ex. 60, at 1-2.

ACF alleges, and PHA did not deny, that the hole was a "hazardous condition" that was "easily accessible to children." PHA Material Facts at ¶ 87. Our review of PHA's photographs causes us to conclude that the hole posed a clear hazard to children on the playground. The hole was at ground level and was large enough for a child to easily enter. The hole was in a wall that forms one boundary of the playground, at the end of a painted hopscotch grid. PHA Ex. 9 at unnumbered page 5 of Ex. H; PHA Ex. 42.

PHA alleges justifications for why the hole was present at the time of the February 2004 survey. ⁽¹⁴⁾ PHA Material Facts at ¶ 87; PHA Ex. 60. This misses the point. The hazard existed, and PHA's attempts to justify its failure to eliminate it do not create a dispute of material fact as to the hazardous nature of the hole, nor do they show that PHA acted diligently in identifying and addressing the hazardous condition. No reasonable person could infer from the proffered declaration that PHA had acted diligently to ensure that the premises were kept free of hazardous conditions. The declaration is wholly lacking in any specifics about how long the hole had been present and offers no explanation about why, after determining that there was a legal impediment to covering the hole, PHA did not take any other steps to remove the hazard, until after ACF identified it as a hazard and PHA sought permission to cover the hole. Further, PHA's success in then obtaining permission and covering the hole shows that eliminating this hazard was quite feasible.

PHA also asserts that PHA kept children safe in the presence of the hole through adult supervision. PHA Appeal Br. at 27-28. PHA cited no evidence in support of this representation and did not include it as a disputed material fact. ⁽¹⁵⁾ Nor did PHA proffer any testimony about adult supervision in its list of witnesses and the summary of their testimony. Furthermore, adult supervision would not substitute for diligent efforts to eliminate the hazardous condition and to comply with the regulatory requirement that outdoor premises be kept free of hazardous conditions. Therefore, we do not consider the statements concerning adult supervision to be sufficient to raise a genuine dispute of material fact.

Based on the forgoing discussion, we conclude that PHA failed to correct a deficiency that presented a "threat to the . . . safety . . . of children" within the scope of 42 C.F.R. § 1304.3(a)(6)(i)(A).

(c) Program Governance

Pursuant to 45 C.F.R. § 1304.50, Head Start grantees are required to have a governance structure that involves shared decision making by a governing body (the entity with legal and fiscal responsibility for the Head Start program), a policy council or committee (composed of parents of current enrollees and community representatives), and, in some instances, a parent committee. Section 1304.51 requires grantees to implement a range of governance systems and procedures related to program planning, communication, and self-assessment.

The governing body of PHA is the PHA Board of Directors (PHA Board). PHA administers many programs, primarily involving housing. The Head Start program is a small component of its activities; the PHA 2002 Annual report stated that PHA revenues from all funding sources in 2002 exceeded 624.7 million dollars and that PHA employed 2,600 people. ACF Ex. 48, at 3, 6.

In the 2003 PRISM review, ACF reviewers found that no PHA Head Start managers and Policy Council members could describe or identify procedures to implement shared decision-making or identify a written policy defining the roles and responsibilities of governing board members in implementing a high quality Head Start program. Furthermore, ACF reviewers found that information was not regularly provided to the PHA Board or the Policy Council on Head Start program planning or financial reports and that PHA had no systematic process for program planning. PHA Ex. 2, at 10-14.

In the 2004 reviews, ACF reviewers concluded that PHA remained in noncompliance with the governance requirements in that it (1) could not provide procedures describing how shared decision making was implemented as required by section 1304.50(d)(1); (2) did not provide information to the PHA Board as required by section 1304.51(d); (3) had not established written policies that define the roles and responsibilities of the PHA governing body and that informed them of the management procedures necessary to implement a high quality program as required by 1304.50(g)(1); and (4) had not developed a systematic, ongoing process of program planning that included consultation with the governing body and other required participants. ACF Material Facts at ¶¶ 41-60; PHA Ex. 2, at 10-14. Below we discuss each of these allegations.

(i) Procedures for shared decision making

Section 1304.50(d)(1) requires that the policy council "work in partnership" with the governing body and staff to adopt procedures for implementing shared decision making.

PHA denied ACF's assertion that PHA had "did not have procedures in place describing how the governing body and the appropriate policy group implemented shared decision making." PHA Material Facts at ¶ 45. As the basis for this denial, PHA stated that "PHA implemented [and] utilized the [PHA] Board liaison to implement shared decision-making between the [PHA] Board and the Policy Council." Id.

It is undisputed that PHA appointed a member of the PHA Board to serve as a liaison to the Policy Council. The Revised QIP stated that the role of the PHA Board liaison was to "to ensure communication between the PHA Board and the Head Start Policy Council." PHA Ex. 6, at 22. Appointing a Board liaison to a Policy Council can be part of an appropriate mechanism for effectuating shared governance. First State Community Action Agency, DAB NO. 1877 (2003). However, that is not the end of the inquiry. One must also inquire whether the liaison actually took actions sufficient to effectuate shared governance.

PHA submitted a declaration from the PHA Board liaison describing her role as Board liaison as follows:

3. During the Quality Improvement Period . . . I was the designated liaison from the Board to PHA's Head Start Program. My duties as the liaison included representing the viewpoint of the Board and monitoring the Head Start program on its behalf. In addition, I was a member of the Policy Council. . . .

4. During the Quality Improvement Period, I was actively involved in the Head Start Program. I regularly attended Head Start Policy Council meetings and trainings. In addition, I would meet with the Head Start Director, who would inform me of any ongoing problems or important issues.

* * *

6. During the Quality Improvement Period, I was at all times aware that I had the authority to bring any matter to the full Board's attention, in addition to [the PHA Executive Director]. However, I did not feel that any situation I encountered with the Head Start Program during the Quality Improvement Period warranted my doing so.

PHA Ex. 54.

This declaration does not create a dispute of material fact as to whether PHA's Board liaison mechanism effectuated shared governance. Rather, the declaration shows that the PHA Board and the Policy Council did not engage in shared governance. Shared governance was not possible when the liaison never brought any Head Start matters to the full PHA Board's attention for discussion. Her statement that she "did not feel that any situation encountered with the Head Start Program during the Quality Improvement Period warranted my doing so" is particularly shocking given the undisputed facts that PHA was operating under a QIP to eliminate numerous deficiencies identified in the 2003 PRISM review; PHA was attempting to open a new center; and PHA was facing an ACF follow-up review to determine whether its Head Start funding would be terminated. Finally, even absent these extraordinary events, the liaison and the PHA Board should have been addressing, in consultation with the Policy Council, routine governance issues such as planning, higher-level personnel issues ⁽¹⁶⁾, goal setting, self-assessment, shared decision making and other matters set forth as Board responsibilities at Appendix A of 45 C.F.R. Part 1304, Subpart D.

PHA does not deny that the liaison did not submit information to the PHA Board, did not inform the PHA Board about the opinions of the Policy Council, and did not consult with the PHA Board as to any representations she was making or actions she was taking on its behalf. PHA argues that these facts are irrelevant to the issue of shared governance. PHA relies on a Pennsylvania statute that provides that a housing authority may "delegate to one or more of its agents or employees such of its powers as it shall deem necessary to carry out the purposes of this act, subject always to the control of the authority." 35 PA. STAT. ANN. § 1547. PHA's argument seems to be that the PHA Board could, and did, delegate to the liaison its authority to govern the Head Start program. We reject this argument for the following reasons:

• Shared governance between the governing body and the policy council and the governing body's participation in the governance of a Head Start program are fundamental federal requirements for the administration of such programs. To the extent that a state law actually authorizes a one-person board of directors, such a law would not be consistent with federal standards which call for the participation of "governing body members." 45 C.F.R. § 1304.50(g)(emphasis added).



• PHA proffered no evidence from which a reasonable person could infer that the PHA Board delegated to the liaison the authority to operate as a "board of one" for the Head Start program. In fact, PHA's evidence about two times that the PHA Board addressed the Head Start program during the Quality Improvement Period (approval of the Head Start funding application and contracting for food service) shows that the PHA Board acted as a whole. PHA Exs. 22-25.



• In its Revised QIP, PHA never suggested that the PHA Board delegated to the liaison the authority to act for the whole PHA Board. Rather the Revised QIP describes the PHA Board liaison to the Policy Council as a person whose role is "to ensure ongoing communication between the PHA Board and the Head Start Policy Council." PHA Ex. 6, at 22.
  

Therefore, we conclude that 35 PA. STAT. ANN. § 1547 is irrelevant to this dispute. A state statute does not supercede federal law regulating Head Start governance and is therefore legally irrelevant. Further, PHA cited no evidence from which a reasonable person could infer that the PHA Board transferred its responsibility for the PHA Head Start program solely to the PHA Board liaison.

To support its assertion that PHA failed to adopt a system for shared governance, ACF also points to PHA's failure to complete specific tasks it set forth in its Revised QIP related to the shared governance deficiency. The Revised QIP describes the following activities:

Quarterly QIP reports submitted to the Head Start Regional office will be submitted to the PHA Board updating them on the status of the Head Start program.

The Board Liaison to [the] Policy Council will provide reports to the Board on topics for future discussion and decision.

The PHA Board of Directors will participate in a joint ongoing training with the Policy Council. This training will focus on 45 CFR 1304.50 requirements.

PHA Ex. 6, at 9.

ACF asserts the PHA Board did not participate in such a training. (ACF Material Facts at ¶ 43) and the Board liaison did not submit any reports or information to the PHA Board (Id. at ¶¶ 47, 50). As explained below, PHA denies these allegations but none of its denials creates a dispute as to a material fact.

• First, PHA alleges surveyor bias. PHA Material Facts at ¶ 43. This argument is unavailing because ACF's allegations are substantiated by PHA's own documentation and not dependent on surveyor observation or opinions.



• Second, PHA asserts that the liaison's attendance at a training on section 1304.50 was sufficient under 35 PA. STAT. ANN. § 1547 to satisfy the QIP training obligation. Id. We explained above why this statute does not authorize the liaison to act as a board of one in relation to the PHA Head Start program. ⁽¹⁷⁾
  

• Third, PHA argues that the Revised QIP did not "specify frequency or form of the reports on topics of future discussion" to the PHA Board, and that the liaison discussed Head Start matters with the PHA Executive Director. Id. at ¶ 47. This argument ignores PHA's own language in its Revised QIP, which called for the quarterly QIP reports to the PHA Board in addition to "reports to the Board on topics for future discussion." The Revised QIP further provided that the due date for these submissions was "May 12, 2003 and ongoing." PHA proffers nothing to show that it provided quarterly QIP reports or that the liaison provided reports on "topics for future discussion" to the PHA Board during the Quality Improvement Period. Finally, even if the QIP is read to give the liaison wide discretion in submitting reports, a reasonable person could not conclude that no matter worthy of such a report arose over the course of the Quality Improvement Period. PHA had a self-imposed obligation to give reports to the PHA Board but did not do so.
  

  (ii) Provision of information to the PHA Board

In order to facilitate shared and informed decision making, section 1304.51(d) requires the grantee to "ensure" that certain information is regularly provided to its governing body and policy groups. ⁽¹⁸⁾ To correct this deficiency finding in the 2003 PRISM review, PHA's Revised QIP stated that its Board liaison would "relay information regarding annual reports, program plans, policies and procedures and grant applications between Head Start, PHA Board of Directors and PHA's Office of the General Manager." PHA Ex. 6, at 22; ACF Material Facts at ¶ 49. ACF asserts that neither PHA management nor the Board liaison performed this task. Id. at ¶¶ 50, 51.

PHA denies ACF's assertion of fact. PHA Material Facts at ¶¶ 50, 51. As the basis for its denials, PHA relies on 35 PA. STAT. ANN. § 1547, the fact that the liaison discussed the program with the PHA Executive Director, and the fact that the liaison was aware she could bring matters to the PHA Board's attention. Id.

None of these responses creates a dispute of material fact. As discussed above, the Pennsylvania statute is legally and factually irrelevant. The liaison's discussions with the Executive Director and her understanding that she could bring information to the PHA Board are not material to the question of whether this information was actually provided to the PHA Board.

(iii) Written policies for the PHA Board

Section 1304.50(g)(1) requires grantees to have "written policies that define the roles and responsibilities of the governing body members and that inform them of the management procedures and functions necessary to implement a high quality program." These policies must be approved by the governing body and the policy council. 45 C.F.R. Part 1304, Subpart D, App. A. II(b).

ACF alleges that PHA did not have the required written and approved policies as of February 25, 2004. PHA denies this allegation and proffers three documents, PHA Exhibits 27, 28, 29 (discussed in more detail below). PHA Material Facts at ¶ 41.

None of these documents demonstrates performance of this requirement. First, these documents are not policies of PHA because there is no evidence that they were even given to the PHA Board. PHA Material Facts at ¶¶ 43, 51. The document with the most apparent relevance to this deficiency, PHA Exhibit 29, (Agency Roles and Responsibilities ⁽¹⁹⁾) was distributed at a training attended by only one board member, the Board liaison. PHA Opposition to Summary Judgment at 9; PHA Material Facts at ¶ 43. Since PHA has proffered no evidence that these documents were provided to the PHA Board, they could not have been approved by it as required by Appendix A, ¶ II(b).

Second, even if we did not require PHA to show that its Board had formally approved these documents, a rational trier of fact, viewing the record in the light most favorable to PHA, could not reasonably find that these documents represented a written policy defining roles and responsibilities and informing PHA Board members of functions necessary to implement a high quality program when the record indicates that only the PHA Board liaison had ever seen them.

Finally, the documents are, individually or cumulatively, inadequate to satisfy the requirements of section 1304.50(g)(1). PHA Exhibit 29, titled "Agency Roles and Responsibilities," sets forth a generic list of tasks but does not address any of the particular requirements for governance of Head Start programs. Further, it describes the "roles and responsibilities" of the governing body and policy council as identical but, under Head Start regulations, they are not. PHA Exhibit 27 is titled "The Policy Council and Shared Decision Making" and addresses the role of the Policy Council, not the governing body. PHA Exhibit 28 is titled "Informing Governing Bodies" but only lists tasks related to informing the Board liaison of Policy Council meeting and program information and to the liaison's participation in a policy committee. While this document might be part of policies and procedures which "define the roles and responsibilities of the governing body members and . . . inform them of the management procedures and functions necessary to implement a high quality program," it is not sufficient by itself or in conjunction with PHA Exhibit 29 to accomplish this requirement.

(iv) Program Planning

Pursuant to 45 C.F.R. § 1304.51(a)(1), Head Start programs are required to undertake a systematic, ongoing process of program planning that includes consultation with the governing body, policy groups, and program staff, as well as with other community organizations that serve low income families with young children.

In the 2003 PRISM review, ACF found that, while PHA had performed some of the elements of program planning, such as a community assessment, a self-assessment and a listing of goals, PHA "did not have a systematic ongoing process of program planning that included consultation with the program's governing body, policy groups, program staff and other community organizations." ACF Material Facts at ¶ 56. In the 2004 monitoring report, the reviewers found that "PHA Head Start staff were still unable to demonstrate that a systematic, on-going process of program planning that included consultation with Policy Council, the governing body, program staff and other community organizations was in place and being followed." Id. at ¶ 57.

PHA makes three arguments in response to this allegation but none raises an issue involving a disputed material fact. First, PHA asserts that it had a process of program planning that included consultation with the governing body and other groups and points to its Board liaison "who met with both the Policy Council and program staff, as well as the PHA Director." PHA Material Facts at ¶ 57. We reject the argument. As explained above, PHA's own evidence establishes that the Board liaison did not effectuate any process which a reasonable person could find to have included consultation with the governing body.

Second, PHA argues that it "was using the Revised QIP as its strategic plan." PHA Appeal Br. at 17. We reject PHA's assertion that the development of the Revised QIP was equivalent to the integrated strategic program planning process required by section 45 C.F.R. § 1304.51(a)(1). A QIP is directed at correcting identified deficiencies. It does not have the breadth and scope of a program planning process set forth at section 1304.51(a), which requires assessments, long-term and short-term program goals, and written plans for implementing services in program areas covered by section 1304.

Third, PHA argues that its Revised QIP did not require it to engage in the type of integrated process that ACF had described in the 2003 PRISM review or in the 2004 monitoring report. PHA Appeal Br. at 17. Essentially, PHA is arguing it had no notice that an integrated program planning process would be required because ACF had approved a QIP that did not identify the involvement of the governing body as one of the implementation tasks in developing such a process. We reject this argument. Section 1304.51(a)(1) clearly informs grantees that the program planning process must involve consultation with the governing body. Further, the "expected outcome" paragraph of PHA's Revised QIP addressing section 1304.51(a)(1) expressly stated that PHA Upper Management Staff "will develop and implement a systematic, ongoing process of program planning that includes consultation with the program's governing body . . . ." PHA Ex. 6, at 10 (emphasis added). PHA had notice of the regulatory requirement and, in fact, that requirement was reflected in its Revised QIP. ⁽²⁰⁾

Therefore, we conclude that the proffered evidence as a whole, viewed in the light most favorable to PHA, could not cause a rational trier of fact to conclude that PHA had complied with the program governance and management requirements of 45 C.F.R. §§ 1304.50(d)(1)(ii), 1304.50(g)(1), 1304.51(a)(1) and 1304.51(d).

Conclusion

We grant the motion for summary disposition and affirm ACF's decision to terminate PHA's Head Start funding because we find no genuine disputes of material fact regarding deficiencies and noncompliance of which PHA had notice and an opportunity to correct but did not timely do so.

Judith A. Ballard

Sheila Ann Hegy

Daniel Aibel
Presiding Board Member

1. ACF submitted a numbered list of alleged material facts as a basis for summary disposition and related record citations (ACF Material Facts). PHA responded by identifying whether PHA disputed the alleged fact or the materiality of the fact, and setting forth additional numbered alleged material facts (PHA Material Facts). Unless otherwise specified, citations above to a numbered paragraph in ACF Material Facts should also be read as a citation to the corresponding numbered paragraph in PHA Material Facts.

2. "A grantee always bears the burden to demonstrate that it has operated its federally funded program in compliance with the terms and conditions of its grant and the applicable regulations. Moreover, a grantee is clearly in a better position to establish that it did comply with applicable requirements than ACF is to establish that it did not. Therefore, the Board has held that the ultimate burden of persuasion is on the grantee to show that it was in compliance with program standards." DOP at 6-7 (citations omitted); Rural Day Care Association of Northeastern North Carolina, DAB No. 1489 at 8, 16 (1994), aff'd No. 2:94-CV-40-BO (E.D.N.C. Dec. 19, 1995); see also 45 C.F.R. § 74.21(b)(2).

3. We had particular concern about ACF findings concerning PHA's failure to have an effective family partnership process and the continued absence of initial health screening information from PHA employee files. The family partnership process is essential to developing trust and cooperation with parents and ensuring that appropriate services are provided. 45 C.F.R. § 1304.40. Health screening of new employees ensures that children are not exposed to health risks from communicable diseases. 45 C.F.R. § 1304.52(j). In response to these findings, PHA relies on general assertions that are not clearly supported by specific proffered evidence. In accordance with the standards for summary judgment, however, we draw all inferences from the record in favor of PHA and conclude that there were disputes of fact sufficient to warrant a hearing on those issues.

4. Some of the disputed issues in this case, such as those concerning enrollment or health and safety issues, are actionable outside the scope of 45 C.F.R. § 1304.3(a)(6)(i)(C). That provision addresses only "the requirements related to Early Childhood Development and Health Services, Family and Community Partnerships, or Program Design and Management . . . ." So, even if we accepted PHA's arguments, the substantial performance standard would not be applicable to all the disputed deficiencies or areas of noncompliance.

5. In two subsequent cases, the issue arose of whether grantees had notice of that reading, but we did not address the notice issue because we found the grantee was neither fully compliant nor substantially performing. Saginaw County Community Action Council, DAB No. 1953 (2004); First State Community Action Agency, Inc., DAB No. 1877 (2003). In this case, PHA did not raise notice issues, and ACF consistently and repeatedly informed PHA during the period of correction that, in order to correct deficiencies, PHA must come into "complete and full compliance with the cited regulations." PHA Ex. 7.

6. Although we conclude that ACF could reasonably require full compliance to correct deficiencies under 45 C.F.R. § 1304.3(a)(6)(i)(C), the outcome in this case is not dependent on that conclusion. In our review of the facts below, we would conclude that PHA did not raise a material dispute of fact as to whether it was substantially performing in the relevant program areas.

7. ACF attempted to investigate PHA's allegations of reviewer bias by interviewing the PHA Executive Director and staff. ACF Ex. 39, at 2-3, 5-6. PHA declined to participate in such interviews "in light of the pending litigation before the HHS Departmental Appeals Board." Id. at 1.

8. PHA did not dispute these facts. PHA states that "results of the 2004 follow-up review should be treated with the utmost skepticism." PHA Material Facts at ¶ 26. PHA does not deny the ACF's allegations as to enrollment numbers for September 2003 through January 2004, nor offer records that would raise a genuine dispute of fact as to these allegations. PHA denies that its enrollment declined during the 2003-2004 program year solely on the grounds that, on February 27, 2004, it opened a seventh center and had enrollment of 206. Id. at ¶ 26. The facts discussed above concern PHA's performance during the Quality Improvement Period which ended February 25, 2004.

9. PHA does not explain what it means by "slated for enrollment." Section 1305.2(b) defines the term "enrollment," but PHA did not rely on this definition or proffer evidence related to the factors set forth in the definition.

10. As of at least August 2002, PHA knew it did not have the capacity to enroll 210 children in its six centers, but there is no indication that diligent efforts were being taken to address the capacity shortfall. In the Revised QIP, PHA described various strategies for meeting funded enrollment, but made no mention of a need for an additional center. ACF Material Facts at ¶ 35; PHA Ex. 6, at 37-38. The Revised QIP simply stated that PHA had back-up space available at other facilities "that could be used temporarily to ensure Head Start maintains its funded enrollment during a closure scenario." ACF Material Facts at ¶ 35; PHA Ex. 6, at 38. Moreover, there is evidence in the record that, as late as January 2004, PHA management had not yet decided how to expand its capacity. ACF Ex. 33.

11. That said, we do not preclude ACF, at its discretion, from looking at subsequent events as a measure of performance at the end of the period of correction.

12. ACF asserts in its material facts that enrollment on February 25, 2004 was 164. ACF Material Facts at ¶ 31. PHA denies this fact on the grounds that it had 206 children "slated" for enrollment. PHA does not deny that the number of students actually being served was 164. (PHA Exhibit 46 indicates an enrollment of 174, but this difference is not material here.)

13. PHA does not dispute the enrollment figures for October, November, December, and January.

14. PHA argued that it should have been given a further opportunity for correction, since the hole had not been specifically cited in the 2003 PRISM review. PHA Appeal Br. at 28. This argument is not compelling since the 2003 PRISM review found unsafe conditions on PHA playgrounds and gave notice that PHA needed to keep the playgrounds free from hazards. As we have indicated in prior decisions, the findings of a followup review need not be identical to findings of the initial or earlier review:

^{The mere fact that a deficiency was exhibited in a certain way in one review does not mean that different evidence may not be used to support a finding that a grantee continued to be deficient in meeting a requirement . . . . Where a requirement is clear and a QIP shows that the grantee understood what it was required to do, no notice question arises.}

^{First State , DAB No. 1877, at 17.}

^{15. The record contains a letter from the PHA Executive Director in response to ACF's termination notice in which he stated "PHA has been keeping its children safe by constant adult supervision to keep them from this area." PHA Ex. 9, at unnumbered page 11. Since this statement was not referenced in PHA's briefing or the PHA Material Facts and was not made by person who would have participated in the supervision of the hole, and since PHA made no specific proffer of evidence from any adult who allegedly did the supervising, this statement appears to be a statement of legal argument. This statement is not sufficient to raise a genuine dispute of fact.}

^{16. ACF alleges that PHA had five different Head Start Directors or Acting Directors in the 14 months between the January 2003 review and the March 2004 follow-up review. ACF Summary Disposition Br. at 15.}

^{17. By making this finding, we are not concluding that a Head Start program has no choice but to send its entire governing board to a training on section 1305.50. However, PHA committed to doing this as a means of curing its governance deficiency and then failed to keep its commitment or even have the liaison share an overview of the training with the PHA Board.}

^{18. This information is "(1) Procedures and timetables for program planning; (2) Policies, guidelines, and other communications from HHS; (3) Program and financial reports; and (4) Program plans, policies, procedures, and . . . Head Start grant applications."}

^{19. PHA Exhibit 29 is a one page document with two columns, one titled "Board of Directors/Policy Council" and the other titled "Executive Director/Staff." Under the first column are 12 types of activities (such as "Follows a set of By-laws and elects officers," "Hires Executive Director (and perhaps some senior staff)," "Establishes agencies goals and priorities").}

^{20. Additionally, while a QIP "does have significance, both in setting the time frames for corrective actions and in ensuring that the grantee understood each deficiency," a grantee still has "an ongoing responsibility for monitoring whether it is complying with the applicable requirements and for doing what is necessary to comply." First State, DAB No. 1877, at 19.}