A grant recipient is accountable for the services its delegate agencies provide. The grant recipient supports, oversees and ensures delegate agencies provide high-quality services to children and families and meet all applicable Head Start requirements. The grant recipient can only terminate a delegate agency if the grant recipient shows cause why termination is necessary and provides a process for delegate agencies to appeal termination decisions. The grant recipient retains legal responsibility and authority and bears financial accountability for the program when services are provided by delegate agencies.

(a) If a grant recipient enters into an agreement with another entity to serve children, the grant recipient must determine whether the agreement meets the definition of “delegate agency” in section 637(3) of the Act.

(b) A grant recipient must not award a delegate agency federal financial assistance unless there is a written agreement and the responsible HHS official approves the agreement before the grant recipient delegates program operations.

A grant recipient must evaluate and ensure corrective action for delegate agencies according to section 641A(d) of the Act.

(a) If a grant recipient shows cause why termination is appropriate or demonstrates cost effectiveness, the grant recipient may terminate a delegate agency's contract.

(b) The grant recipient's decision to terminate must not be arbitrary or capricious.

(c) The grant recipient must establish a process for defunding a delegate agency, including an appeal of a defunding decision and must ensure the process is fair and timely.

(d) The grant recipient must notify the responsible HHS official about the appeal and its decision.