Pasadena Star-News (California) - by Janette Williams

A federal audit of the now-shuttered Head Start program run by the Center for Community and Family Services will show what appears to be "gross financial mismanagement" at their 15 Pasadena, Altadena and Glendale sites, Administration for Children and Families spokesman Kenneth Wolff said Wednesday.

"The organization has been having financial difficulties and the audit that ended through June 30, 2010 showed that they had liabilities that exceeded their assets by $5.1 million," Wolff said from ACF headquarters in Washington, D.C.; ACF is a division of the U.S. Health and Human Services Department.

The annual direct federal grant to the CCFS Head Start and Early Head Start programs was $12 million, Head Start spokesman

Matthew Sheaff said Wednesday; CCFS was a grantee for more than 25 years, and the program serves 1,397 children and low-income families in Pasadena, Altadena and Glendale.

Gwen White, CCFS executive director, did not respond to requests for comment Wednesday. On Oct. 6, the day CCFS Head Start programs abruptly ended, White said their reasons for closing were "not financial."

CCFS spokesman Thomas Bagwell, who said the audit was still going on, said White was "dealing with the head office" Wednesday.

A statement released Monday by CCFS said: "After much deliberation by the Board and Management,(CCFS) has decided to relinquish its management role," and added that the last federal review found the program "100 percent compliant" with all Head Start performance standards.

Shocked parents first heard of the sudden closure in a letter CCFS handed out Thursday as they arrived to pick up their children.

Without explanation, the letter said when the program reopens it will be under Head Start's Community Development Institute (CDI) National Interim Management Contract.

The interim team is now at the sites, Wolfe said, and will try to reopen on Monday.

"They are working to get all 15 sites licenced by the state, and if all that can happen this week, which is the goal, classrooms would reopen Oct. 17," Wolfe said.

Re-hiring of teachers will be at the team's discretion, he said.

"CDI will likely interview and hire a lot, if not all, the teachers," he said. "In this case it sounds as though the problem was more with the management ... not necessarily teacher quality. The problem appears to be gross financial mismanagement."

Wolff said the audit was prompted by "some problems" with the CCFS administration.

"We have had the the Department of Health and Human Services Office of the Inspector General on-site since April," he said.

"There will be a final report from the Inspector General, but I'm not sure of the timing," he said. "What did happen is that on Friday (Oct. 7) the CCFS relinquished its grants."

The audit findings will come out in a "very in-depth report," including a timeline, Wolff said.

Parents were invited by CDI to attend one of two informational Wednesday, one in Glendale and one at 6 p.m. in Pasadena, at the Sheraton Hotel, Sheaff said.

Denise Ruiz, whose daughter attended the Head Start program at Pasadena's Scott Center, said Wednesday that she might go "out of curiosity."

But like some other parents, she said, she had turned to the Pasadena Unified School District and was able to enroll her daughter in a pre-kindergarten program at Longfellow Elementary School.

"I needed somewhere for my daughter to go, and I went to the school district," Ruiz said. "I couldn't take a chance ... I need stability, I'm a working mom."

Ruiz said because parents got "the run-around" and were given no notice about the closure, she no longer trusts the program.

However, she said she hasn't completely ruled out re-enrolling her daughter under a new administration.

"It's hard to say, but I would like to, especially if they rehire the teachers," Ruiz said.

The interim team will operate the Head Start program until a replacement "permanent grantee" can be located, Wolff said.

Organizations will be invited to apply to become the new grantee, going through a stringent process before the ultimate selection is made, he said.

CCFS had "ongoing problems," Wolff said, but was never under "probationary periods" or anything similar.

The "financial irregularities" such as those found at CCFS are rare, but not unprecedented, Wolff said.

"Head Start is a $7-billion program," he said. "No one wants to see this happen, but the good news is we do have a protocol in place."