What Head Start Programs Can Do When Their Fiscal Officer Retires

Every Head Start program needs a qualified fiscal officer, and many programs are preparing to replace a longtime one who is nearing retirement. That person often carries years of knowledge about federal grant rules, match documentation and the program’s own history. Planning a Head Start fiscal officer transition well before the last day keeps that knowledge in the program and keeps you ready for audits and federal reviews.

Why a Fiscal Officer Vacancy Is a Compliance Risk

Under the current Head Start Program Performance Standards, a program must secure the regularly scheduled or ongoing services of a fiscal officer whose education and experience match the organization’s fiscal complexity. The regulation, 45 CFR 1302.91, also requires a fiscal officer hired after November 7, 2016, to be a certified public accountant (CPA) or hold at least a bachelor’s degree in accounting, business, fiscal management or a related field.

A long vacancy puts that requirement at risk, and the consequences can reach well beyond one position. Programs must still meet federal financial management and internal control requirements under the Uniform Guidance. Under the designation renewal rules, two or more audit findings of material weakness or questioned costs can require a program to compete for its next five years of funding. Auditors and monitoring reviewers can also ask staff to pull up a written procedure and show they follow it, which is much harder once the person who wrote it has left.

The Work That Can’t Wait for a New Hire

Head Start fiscal work runs on a calendar that doesn’t pause for recruiting. Programs submit a continuation application with a budget every year of the five-year grant. They report to the board, policy council and finance committee, and they document non-federal share throughout the year. Under the current standards, development and administrative costs can’t exceed 15% of total approved program costs, so someone still has to track that percentage and keep cost allocations in line with how the program operates.

When those tasks fall to whoever is left, the strain shows up in the monthly numbers first. Variances go unexplained, match documentation thins out and allocations drift away from how the program operates. Those are the warning signs behind the six monthly financial questions every Head Start leader should be asking. Before the fiscal officer’s last day, decide who will review the monthly close, approve federal drawdowns and own the next continuation application.

What to Look for in a Replacement

A credential satisfies the regulation, and the right hire brings more. The same rule requires staff, consultants and contractors to have the knowledge, training, experience and competencies their role demands. For a fiscal officer, that means a working command of the Performance Standards, the Head Start Act and the Uniform Guidance. A strong candidate can explain which costs are allowable and allocable, value in-kind contributions and walk a board through a budget-to-actual report. In interviews, ask how they have handled a federal monitoring review or a single audit, and what they would focus on in their first 90 days.

The rules for this role may also change. A proposed rule from the Administration for Children and Families (ACF) would remove the federal fiscal officer qualification requirement. It would also bar programs from requiring postsecondary credentials unless they can show a position needs them, with alternatives such as assessments or relevant work experience. Until a final rule takes effect, the current requirement applies. Either way, boards should define the specific skills the job demands and document how each candidate meets them.

When Outsourced Fiscal Officer Support Makes Sense

Many programs don’t realize the fiscal officer role can be contracted. The current rule calls for the regularly scheduled or ongoing services of a fiscal officer and holds contractors to the same competency standard as staff, and Office of Head Start guidance confirms that programs have the option of contracting those services. It fits several situations:

Outsourced accounting also puts a team behind the role, so one person’s departure doesn’t leave the program without fiscal leadership. Accounting costs fall on the administrative side of the ledger, so build the contract into your administrative budget. Define the scope in writing, including who prepares reports, who approves transactions and how the contractor works with your executive director and board.

Plan Your Head Start Fiscal Officer Transition Early

Programs that plan a fiscal officer transition before it happens are better positioned to protect their audits, their reviews and their funding. James Moore’s nonprofit team helps Head Start and community action agency leaders plan fiscal transitions, cover the role through outsourced accounting and train new staff on federal requirements. Contact us when you’re ready to plan your next step.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.