President Biden signed the Further Consolidated Appropriations Act, 2024 (P.L. 118-47), into law on March 23, 2024. The funding level for programs under the Head Start Act (the Act) is $12,271,820,000, an increase of $275 million over FY 2023. This funding level provides all Head Start, Early Head Start, and Early Head Start-Child Care (EHS-CC) Partnership grant recipients a 2.35% cost-of-living adjustment (COLA).

Recipients subject to competition for continued funding through the Designation Renewal System (DRS) are entitled to COLA funds through the end of their current award. Head Start Collaboration Offices are not eligible for COLA funding due to the statutory cap on their funding in the Head Start Act.

FY 2024 COLA

Each eligible recipient will receive a COLA increase of 2.35% of the FY 2023 base funding level. Base funding excludes training and technical assistance funds and any one-time funding received during FY 2023.

Recipients must use COLA funds to permanently increase their Head Start pay scale, which includes the salaries of current staff and unfilled vacancies. Recipients may consider a permanent uniform percent increase to the pay scale or differential COLA increases to the pay scale across specific position types within the program. For example, a recipient may apply a larger increase to lower paid positions that are not currently receiving wages sufficient to cover costs of living, or to positions that are challenging to fill due to low wages. Recipients are encouraged to focus larger COLA increases on positions with the most staffing challenges and those which are blocking the program from fully serving children and families. Recipients are further encouraged to use findings from their wage comparability study to make every effort to offer wages competitive to similar positions in their communities, including teachers and other staff of local elementary schools. A recipient must maintain documentation that justifies applying differential adjustments to its pay scale and ensure the process is approved by its governing bodies.

Sections 653 and 640(j) of the Act provide further guidance on the uses and limitations of COLA funds. Sec. 653 restricts compensation to an employee paid with Head Start funds that is higher than the average rate of compensation paid for substantially comparable services in the program’s operating area. Any recipient concerned that it cannot increase salaries for staff due to wage comparability issues should ensure public school salaries for elementary school staff are included in its considerations. Sec. 653 also prohibits the use of Head Start funds of any employee compensated at a rate exceeding that of an Executive Schedule Level II position, including employees being paid through indirect costs. Sec. 640(j) of the Act requires that compensation of Head Start employees be improved regardless of whether the agency has the ability to improve the compensation of staff employed by the agency that do not provide Head Start services.

In addition, recipients must provide delegate agencies and other partners an equivalent increase of 2.35% to adjust their wage scales. A recipient must justify applying differential COLA increases between delegates or partners. COLA funds must be applied from the start of a recipient's FY 2024 budget period, which may require COLA to be retroactively applied. For example, for a recipient whose FY 2024 budget period began on November 1, 2023, the COLA must be applied from that date.

As specified in 45 CFR §1302.90, each recipient is required to establish written personnel policies and procedures that are approved by the governing body and Policy Council. They must be made available to all staff. Personnel policies and procedures should be reviewed as they may contain information relevant to this COLA.

Following the required permanent adjustment to Head Start pay scales, recipients may apply any remaining funds to fringe benefits costs or to offset increased operating costs in other areas of the budget. This includes increased costs in rent, utilities, facilities maintenance and insurance, contractual arrangements, vehicle fuel and maintenance, and supplies.

COLA Funding Notice of Awards

Each eligible recipient will receive a Notice of Award specifying its COLA increase and instructions for how the funding must be applied. Awards will also include instructions for recipients proposing to use funds for any other purposes than instructed.

Additional guidance on how COLA funds will be distributed will be forthcoming through the Head Start Enterprise System (HSES).

One-time Program Improvement Funding Requests

Recipients encountering program improvement needs that cannot be supported by the agency’s budget or other resources are invited to apply for one-time funding. This funding must be applied for through the appropriate supplemental amendment type in HSES. Program improvement requests generally include, but are not limited to, facility projects (construction, purchase, or major renovations requiring 1303 applications or minor repairs and enhancements). Requests are prioritized and funded based on funding availability and may require additional time before a final decision is made.

Please direct any questions about this PI to your Regional Office.

Thank you for your work on behalf of children and families.

/ Khari M. Garvin /

Khari M. Garvin
Director
Office of Head Start