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Kansas City Star: Head Start scandal could delay congressional reauthorization process
Excerpts from Saturday's story:
Head Start fallout spreads
Sen. Pat Roberts says a local Head Start director's compensation has become a factor in the congressional debate over reauthorizing the entire federal program.
“It's a sour apple situation that really could stop and delay the reauthorization process,” said Roberts, a Kansas Republican.
Roberts, who is on the Senate committee that handles Head Start legislation, was referring to a federal agency's questions about compensation for Dwayne Crompton, executive director of the KCMC Child Development Corp.
Crompton, whose agency oversees 11 Head Start centers in the Kansas City area, has received annual pay exceeding $300,000 at least once in the past four years.
Federal officials have said they are unaware of any Head Start executive director that is paid more than Crompton.
“Obviously, if the salaries are extraordinary, then that is more kids not being served,” Rep. Mike Castle said. “This has sure opened up a door to asking a heck of a lot more questions.”
Castle, a Delaware Republican, is chairman of a House subcommittee that has held hearings on Head Start reform.
Last week the Department of Health and Human Services told KCMC in a letter that it questioned $814,142 in compensation to Crompton over the three fiscal years that ended June 30, 2002 .
The letter, which was obtained by The Kansas City Star, gave KCMC 30 days to explain why the compensation did not violate federal regulations on paying “reasonable” wages or face having to repay all or some of the money.
Mack Alexander, a KCMC spokesman, said the organization would address the agency's concerns and release a statement next week “responding to some of the questions that have been raised.”
“I don't want to convey the impression that the board is not concerned,” he said.
In a June interview with The Star, Crompton said his compensation was a reward for keeping the agency afloat after financial problems caused by a former controller.
KCMC provides early education to more than 2,700 low-income preschoolers in Jackson , Clay and Platte counties. The agency, once called Kansas City Model Cities, also provides nutrition, day-care and summer-school programs.
Nearly 80 percent of KCMC's $26.6 million in revenue in fiscal 2002 came from federal tax money.
In the wake of questions about Crompton's compensation, officials at the Heart of America United Way and the Ewing Marion Kauffman Foundation said they would review how KCMC spent money their organizations had given the agency.
Federal W-2 tax forms cited by the Department of Health and Human Services indicate that Crompton received nearly $800,000 in pay over three fiscal years, including $237,000 in 2000, nearly $313,000 in 2001, and $247,000 in 2002.
In the fiscal year ending June 30, 2003 , Crompton made $245,562, Alexander said.
KCMC officials also said Head Start funds had been used in the past to pay part of a $600-a-month lease for a Mercedes sport-utility vehicle for Crompton. The agency now uses other funds to pay the lease, Alexander said.
Department of Health and Human Services officials said auditors had been unable to account for all of Crompton's salary and benefits from 1999 through 2002. The agency's findings will be forwarded to the Internal Revenue Service, the department's inspector general and other agencies.
For example, a Form 990 tax form that KCMC filed with the Internal Revenue Service showed that Crompton's total compensation for fiscal 2001 was $343,064, rather than the nearly $313,000 the W-2 form for 2001 reflected, according to the Department of Health and Human Services.
Roberts said he was “extremely concerned” that the department's safeguards “did not deter Mr. Crompton's very questionable salary expenses.”
Health and Human Services is reviewing all Head Start agencies' administrative costs and determining the 25 top-paid executive directors in the country.
Rep. John Boehner, an Ohio Republican who is chairman of the House Education and Work Force Committee, told The Star he expected the department to complete its review by the end of the year.
“I think sunlight is the best disinfectant,” he said this week.
Several area members of Congress expressed concern about Crompton's salary, but some offered praise for the agency's service to poor children.
“Dwayne Crompton has provided exemplary leadership at both the local and national levels for two decades,” said Rep. Karen McCarthy, a Kansas City Democrat.
Fight over changes
The National Head Start Association, an organization of Head Start employees, contends that criticism of Crompton's pay is retaliation for his opposition to proposed changes in the Head Start program.
In July the House of Representatives passed by one vote a bill that included a provision allowing governors of as many as eight states to directly oversee their states' Head Start programs. The bill is now before the Senate.
The National Head Start Association has opposed giving states direct control over Head Start spending, and Crompton testified against the proposal this spring before Castle's subcommittee.
The association contends that administrative salaries are not a problem and that criticism of Crompton's pay is retribution for his testimony.
Scott Stapf, an association spokesman, said previous Department of Health and Human Services' audits had not contested Crompton's pay. “It does not seem likely to me that it is a coincidence that HHS reversed itself only a few months after Mr. Crompton went to Washington to testify against the Bush plan.”
Sen. Judd Gregg, who is responsible for shepherding the proposed $6.8 billion Head Start budget through that chamber, thinks Congress must deal with excessive administrative pay, a spokeswoman said. Gregg is a New Hampshire Republican.
Rep. Sam Graves, a Missouri Republican whose district includes children served by KCMC, insisted that no retaliation was involved.
“Nobody was aware of it (Crompton's compensation) before. Now they are, and they are outraged,” Graves said.
Roberts said the flap over Crompton's pay could tarnish the image of Head Start. But he said that was something Head Start does not deserve, because it is a successful program.
Tom Dugard, president and chief executive of Heart of America United Way, said the agency was watching the Health and Human Services inquiry carefully. Last year KCMC got $278,015 from the United Way .
“We're in an inquiry phase and haven't come to any conclusions yet, but we're taking the matter seriously,” he said.
The focus of the Kauffman Foundation's audit is a $600,000 grant to KCMC. KCMC used $300,000 of the grant in August 2002 to repay an overdue debt to the Kansas City School District , which operates several Head Start centers.
KCMC officials said another $250,000 of the grant helped pay off part of a bank loan. The remaining $50,000 helped finance a May 31 fund raiser that netted between $30,000 and $50,000.
Carl Schramm, the Kauffman Foundation's chief executive officer, said this summer that the foundation holds KCMC and Crompton “in good regard,” but that it would no longer provide funding to pay off KCMC's debt.
“Our grant making is for specific programs,” he said.
The questions raised by the Department of Health and Human Services and other organizations come at a time when KCMC is saddled with an overdue debt to the school district.
KCMC has paid just $382,000 of a $1.5 million debt it incurred in 2000.
Several Kansas City school board members praised Crompton for his leadership but were divided about whether the board should pursue repayment more aggressively.
“We are being aggressive,” school board President Al Mauro said. “It's not going to do me any good to bankrupt them.”
But other board members said Crompton's salary proved that KCMC was far from bankruptcy.
“The taxpayers are owed that money,” said Harriett Plowman.
When interviewed by The Star this summer, Crompton said the agency was having difficulty paying the school district because of a kickback scheme that had been orchestrated by the former controller of KCMC, Andrew Nyakatura.
Federal prosecutors alleged that from September 1997 to March 2000, Nyakatura paid Luther White's D&H Realty Development Inc. $1.1 million in KCMC funds for renovation work on its Head Start centers.
Most of the renovation work was never done.
As part of the scheme, White, a twice-convicted felon who had served prison terms in the 1980s, was alleged to have paid Nyakatura more than $200,000 in kickbacks from the $1.1 million.
Because KCMC had employee fidelity bond coverage, it received $500,000 — its loss limitation — from its insurer. That left it with a loss from the scheme of about $600,000.
Crompton, who has been at the agency for 26 years, said he was unaware of Nyakatura's dealings with White and would have vetoed the dealings had he known about them.
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