Washington (CNN) - Staff members at eight Head Start centers manipulated income information given to them by undercover applicants so that the applicants would get benefits they were not qualified for, according to a Government Accountability Office report being released Tuesday.
In response to the report, Health and Human Services Director Kathleen Sebelius has notified the more than 1,600 operators of Head Start facilities nationwide of new steps being taken to crack down on fraud.
The GAO report says undercover applicants made 15 visits to 13 centers in six states and the District of Columbia to register their fictitious children.
At eight of those centers, Head Start employees disregarded "part of the families' income to register over-income children into under-income slots" or "lied about applicants' employment status or misrepresented their earnings," the report says.
The Head Start program provides child development services to around 1 million children of low-income families. Because of its popularity, many Head Start centers have waiting lists for spots for children. The GAO report raises concerns that many Head Start slots are taken up by children of families that are not low income, thereby leaving the targeted low income children on the waiting lists.
At a Wisconsin center, the report says, a Head Start associate knowingly included the income from only one of the child's guardians so that the family would qualify for the Head Start program.
And in Pennsylvania, a Head Start associate disregarded $23,000 in income for a family of three so that they would qualify. Then, when told that the mother also received some additional cash income from a part time job, the associate replied, "That's your business," the report says.
The GAO undercover operation also looked at centers in California, Maryland, New Jersey, Texas and the District of Columbia.
In her letter, sent Monday, Sebelius said that the department's inspector general's office is following up on the incidents reported by the GAO, and that those incidents and any other allegations of fraud could result in criminal prosecutions.
Among other steps the Health and Human Services Department will take, she said, are increasing the number of unannounced visits to monitor centers, requiring operators to improve any inadequate controls to prevent errors and other lapses, and developing "new regulations that promote program integrity."
"Allowing ineligible children to enroll in the program is a blatant violation of head Start's rules and it steals opportunity from children who need it most," Sebelius wrote.