In her office in an old building at the edge of downtown, Ruth Marshall, the director of Houston's Project Head Start for the last 20 years, looks downcast. A short woman with steel-gray hair, she tends to screw up her face when pondering the answer to a question. Today, she's been trying to explain her efforts to manage one of the most important federally funded anti-poverty programs in Harris County. While most public-service administrators have difficulty finding funds, Marshall has suffered from just the opposite problem: she hasn't figured out how to spend the money available to her.
From 1991 to 1994, Congress nearly tripled the budget of Houston's Head Start program, from $10.4 million to $29.3 million a year. With that increase, Marshall was supposed to enroll more than 2,000 new preschool children in Head Start. During the last four years, other Texas cities have received proportionate increases. San Antonio has used its funds to add 1,100 children to its program; Dallas has added more than 1,200; and Fort Worth has grown by 700. Houston, funded to be the state's biggest program, has added only 400 children. No other Head Start agency in the state has been declared by the federal government to be so seriously deficient.
Marshall almost hangs her head in shame when pressed about how much money her agency has failed to spend. "Through May 1994, about $5 million," she says. "Through May 1995, $9 million was not drawn down for children. While that's a lot of money not spent, at least we didn't go out and waste it."
Not, that is, unless you consider it a waste to pass up needed funding that you can never get again, as is the case with the $14 million Marshall refers to. Swallowed back up by the federal bureaucracy, that money is no longer available to Houston's Head Start program. In March 1994, when more than a dozen federal monitors reviewed Marshall's operation, they criticized almost every aspect of its management, citing inadequate maintenance, lack of a waiting list, improper hiring and firing, failure to delegate authority, and -- not surprisingly -- sloppy accounting and purchasing procedures.
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Houston Head Start's most pressing problem has come from its failure to expand. The U.S. Department of Human Health and Services has declared that if the city's Head Start program doesn't reach its target enrollment of 5,700 children by next January 6, then it may take away its grant altogether and give it to another organization.
That might be the only way to end the problems with Head Start's parent agency, Gulf Coast Community Services Association, the largest community action agency in Texas. While failing to supervise Head Start, GCCSA has also fumbled $1.2 million in utility assistance funds that would have helped local residents pay their heating and cooling bills during the last two years. People seeking help from Gulf Coast with their utilities have been subjected to rude treatment and broken promises of assistance. Only pressure from a group of angry ministers seems to have brought improvement in the program.
With all these problems one might think that advocates of the poor would have thrown up pickets and protests around GCCSA's headquarters. After all, in excess of $15 million seems to have slipped through the agency's fingers in recent years. Yet far from being focused on GCCSA's poor performance, past and present GCCSA board members charged with representing the poor have instead protested efforts to change GCCSA's management, spending their time accusing government and business leaders of trying to hijack the agency for their own purposes -- though what those purposes might be, no one seems to know.
GCCSA has board members from three different sectors: poverty members elected by the poor, and appointed government and business members. In June, when GCCSA board members from the government and business sectors moved to fire GCCSA director William Lawton, the poverty sector representatives protested in the streets. They packed the July board meeting with supporters of Lawton, reversed his firing and forced the resignation of board chairman, and HISD administrator, Livy Wilson II. Only the pressure of federal deadlines seems to keep the board on track for approving new Head Start facilities and clearing up other administrative problems.
Meanwhile, the simplest of administrative obligations goes unanswered. Since last October, GCCSA has owed Harris County Commissioners Court a copy of its financial audit. For months, Harris County Judge Robert Eckels, who has a seat on the GCCSA board, has repeatedly requested a copy of the audit from Lawton in letters and by phone, but at press time he had still received no response.
With its board in disarray, its management in question, its employees in rebellion and its books under suspicion, Gulf Coast poses a perplexing question: how could an agency whose financial resources have been soaring get into so much trouble?
In 1967, when Congress required local officials to designate a single community action agency to receive federal anti-poverty funds, the Harris County Community Action Association (HCCAA) was created. In 1976, HCCA changed its name to Gulf Coast Community Services Association to reflect its ambitions to serve not just the county, but the region.
Beginning with a budget of about $5 million, Gulf Coast became one of a thousand community action agencies across the country to receive a variety of federal funds to help the poor. GCCSA receives federal, state and local grants for job training, drug counseling, family therapy, illiteracy, homelessness, housing emergencies and utility assistance. The agency's broad theme has been the "empowerment" of its clients, to provide them with the skills they need to get out of poverty. Its annual budget -- provided it manages to spend it all -- is $41 million this year.
GCCSA's board consists of 30 members, with ten members each from the business, government and poverty sectors. The poverty representatives have always been suspicious of the "downtown" corporate and government interests, says City Councilman Al Calloway, whose first job out of college was as a social worker for the agency. In the late '70s and early '80s, Calloway served on the GCCSA board, both as representative of a poverty agency and as a delegate for a county commissioner. Today, along with Councilmen Ben Reyes and Michael Yarbrough, he also holds a seat on the board, to which he sends a delegate.
"Back then," Calloway says, "the corporate interests weren't viewed as the enemy per se. But there was an attitude that you have to have your guard up to make sure the power structure didn't take over."
That suspicion seems to have hardened. Over the years, Gulf Coast has become not simply an agency serving people in need, but a source of jobs. As recently as a few years ago, poverty representative George Gray, who was also board chairman, occupied an office at the agency, actually directing day-to-day operations of agency employees in violation of the separation of powers that's supposed to exist between boards and manage-ment. To this day, some board members are in constant touch with various employees within the agency, something that makes it difficult for clear lines of authority to be drawn. After years of such leadership, basic administrative and management issues have been ignored. Despite the board's frequent turnover (19 of the current board members are in their first year of service) and its growing budget, until last April GCCSA board members had never even received any training in their responsibilities.
For his efforts to remove GCCSA director Lawton, Calloway has been vilified by some poverty representatives. Calloway says he supported Lawton's appointment 18 months ago after the board dismissed his predecessor, a former oil company executive named Henry Brauer who had struggled ineffectually for eight years to shape up the agency. But Lawton has failed to fill such critical administrative positions as an associate director and a financial director, Calloway says, despite being given the go ahead to do so by the board.
"At the heart of it," says Calloway, "seemed an inability or an unwillingness to delegate authority."
Lawton, who was educated at Fiske University and has a law degree from Texas Southern University, worked as the second in command at Gulf Coast for nearly eight years. He has a reputation as an amiable man who doesn't raise his voice, which may be part of the reason some board members want to keep him around. His conversations about Gulf Coast's problems tend to ramble, as he rearranges the files on his desk and calls for copies of agency documents. Lawton seems to feel persecuted by the federal monitors who have put Head Start on probation for violations of a list of 155 standards that break down such essentials as facilities, education, health care, nutrition, parent involvement, board policy, recruitment of children, record keeping, purchasing, inventory and salaries.
"One hundred percent compliance?" he says incredulously of the federal demands. "Are you serious?"
The federal critique has been boiled down to six major differences, he says, and Gulf Coast expects to take care of them all, including revising its salary schedule, upgrading its accounting and purchasing procedures, fixing the Head Start waiting list, revising its employee policies and, most important, enrolling 2,000 more children in 14 new Head Start centers.
As to why Houston's Head Start has had difficulty expanding, he picks up a federal report that shows that agencies all over the country had problems finding facilities and hiring staff at Head Start's low wages. Still, other agencies in other cities appear to have coped with these difficulties, presumably by putting professionals in place who could deal with the demands. Exactly why Houston lagged behind is something Lawton fails to explain. But soon, he insists, he'll have a finance director and an associate director and a public affairs director to deal with the rash of bad publicity the agency has been receiving.
Lawton recites all the bromides: challenges are always opportunities, tough times never last, but tough people do and his clients are "customers" who deserve "customer service." Visibly frustrated by the focus on Gulf Coast's problems, he promises to be open.
But that openness doesn't include mentioning a lawsuit that Gulf Coast's lawyers filed in early July against Cole Educational Supply Inc. The suit states that in December 1993, Head Start paid Cole $1.7 million for educational equipment, which Cole was to store free of charge in its warehouse. Head Start was supposed to receive the supplies as needed. In May, upon learning that Cole was going bankrupt, GCCSA hurried to collect its goods, but only collected $559,000 worth. So the agency is suing for losses of $1.2 million.
These losses, and other problems, seem to have grown in part out of Ruth Marshall's tight control of Head Start. Although the agency required more than a dozen new Head Start sites for its expansion during the past four years, Marshall refused to surrender any control to other managers. While Marshall hired an assistant director, John Agnew, 52, an experienced business manager for nonprofit organizations, just as congressional funding for Head Start began to rise in 1991, Agnew says Marshall never allowed him access to any of the agency's financial records. This, despite the fact that Agnew's job description included management of day-to-day operations, including payroll and accounting.
While there was some concern for finding new facilities to enroll children, Agnew says, the real obsession within Head Start became the readjustment of salary schedules. Congress, recognizing the need for a more professional level of wages for Head Start employees, had authorized part of its increased funding to improve staff salaries, which compared unfavorably with both private and public sector pay. But Houston Head Start's two attempts at salary adjustments ended up creating dissension between employees with college degrees and those without.
In October 1994, an anonymous flier was circulated at GCCSA stating that a Head Start center director who had only a high school diploma was getting paid more than $40,000 and that this was fraud and misuse of tax dollars. The flier urged its readers to phone or write Lawton and a Head Start commissioner in Washington. Lawton responded by hiring a private detective to track down the flier's author; ultimately, he determined that the flier had been typed in Agnew's office. In January, Lawton fired both Agnew and his secretary; both deny creating the flier and both have sued the agency.
In 1993, six employees criticized Marshall's management in a vociferous, lengthy letter to U.S. Representative Bill Archer and U.S. Senator Kay Bailey Hutchison. Most of their concerns centered on job descriptions, titles, salaries and management directives. The employees, all of whom held the title of education coordinators, were responsible for reviewing the teaching at the Head Start centers and have complained of the ineptness of some teachers and teachers' aides. The education coordinators are required to hold college degrees in early childhood development, and they've been particularly critical that some non-degreed teachers and center directors, who have completed only a federally approved certification program for working with pre-school children, are often paid more than they are.
In their letter to Archer and Hutchison, the employees also urged the government to investigate Head Start's exclusive purchasing arrangement with Cole Educational Supply Inc. The education coordinators, too, have filed suit in U.S. District Court, charging Marshall with making false claims in grant applications about the accomplishments of the agency and its compliance with federal regulations, though no specific allegations are made in their filing.
Despite the ruckus they have raised, the six education coordinators have held onto their jobs. But this month, Marshall notified them that their department was being downsized in a restructuring move. All were offered teaching positions instead. Marshall insists that the restructuring is not retaliation.
The pressure of the January 6 federal deadline for expansion and improvement in the Head Start program appears to be having some effect. After four years of dithering, Houston's Head Start appears to be making management changes that might produce results.
Marshall says she's had a particularly difficult time finding facilities that can be converted into new Head Start centers. A great deal of that problem, she now admits, resulted from her failure to expand her management team. Her goal now is to enroll 765 more children by September and to enroll the remaining required students by the federally imposed January deadline. She's particularly enthusiastic that Gulf Coast is hiring a facilities manager to find buildings for new Head Start centers, and to coordinate the various centers' maintenance. GCCSA has also brought in consultants to create a computerized inventory program for Head Start and to adjust its purchasing procedures, both of which were criticized by federal monitors.
Head Start monitors have not been the only critics of GCCSA. Two Catholic lay ministers of Christ the Good Shepherd Catholic Church, a 10,000-member church in northwest Houston, have grown increasingly impatient with Gulf Coast, which they call an agency of last resort. Two years ago, Kathy Doran, director of social ministries for Christ the Good Shepherd, referred the poor in her parish to Gulf Coast for assistance in paying utility bills. GCCSA was administering approximately $5 million from the federally funded Comprehensive Energy Assistance Program (CEAP), and the policy of the church is to help people use the existing government sources before committing any funds itself.
The church's clients were interviewed by Gulf Coast intake workers, told they were qualified and promised funds, Doran says. Then nothing happened.
"Basically," says Doran, "they were lied to."
Doran called other social-service ministries in the county and found that they, too, were exasperated with GCCSA. Clients seeking help with their light bills were being interviewed in the parking lot of the agency's headquarters and being treated rudely by intake workers who seemed to have little training. Gulf Coast was promising to pay light bills, but the promises weren't being kept, and clients were having their lights cut off.
Doran appointed Barbara Lashley from her staff to get to the bottom of Gulf Coast's problems. Lashley was to represent not only the poor of her parish, but also the interests of the Texas Association of Social Ministry Coalitions, which represents 400 churches throughout Harris County.
In September 1994, Lashley spelled out her complaints in a letter to the Texas Department of Housing and Community Affairs, which oversees the distribution of the CEAP money. The following month, the state agency sent an inspector, who suggested immediate changes in the way Gulf Coast did business. The pledges for utility payments were being checked manually instead of by computer, creating a backlog. The outlying intake stations lacked telephones, computers and fax equipment. The CEAP money was not intended to be just a handout, but part of a case-working process in which clients were questioned about how their crises had come about; then they would be given counseling in budgeting and shown how to avoid future problems. But before that could happen, the GCCSA staff needed basic training in interviewing techniques, and it would have to stop interviewing hundreds of people in the parking lot.
What particularly angered Lashley was that, during a two-year period, GCCSA returned $1.2 million in CEAP funds to the government because it couldn't adequately process the money. In bureaucratic jargon, this was called "deobligation." Because agencies in other parts of the state had exhausted their funds to deal with a heat wave, the state appealed to the agencies with the largest unspent budgets -- GCCSA among them -- to give money back. For Houstonians, Gulf Coast's failure to manage the CEAP program effectively meant that for two summers in a row, more than half a million dollars was not available to help Houston's poor pay their utility bills.
Last October, Lashley began attending Gulf Coast's monthly board meetings. She was dismayed by what she learned. In the past, she was told, the 30-member board often failed to have a quorum at its monthly meetings, meaning little was accomplished by an agency beset with pressing problems. When a quorum was present, board members would yell at each other and the agenda wasn't adhered to. Though the situation had improved, the board, Lashley concluded, was still dysfunctional.
This April, Lashley and Doran set up a meeting to discuss a long list of problems with Gulf Coast. Representatives from the county commissioners, the City Council and members of the clergy, including Bishop Joseph Fiorenza, head of the Galveston-Houston Diocese, and the Reverend William Lawson, the politically powerful pastor of Wheeler Avenue Baptist Church, attended. The aim of the meeting was to discuss tactics for getting an independent management and financial audit of Gulf Coast.
The two women had been warned that reform was not going to be easy. Early in their work, Lashley and Doran drove to Austin to get advice from an official at the Texas Department of Housing and Community Affairs. He told Doran and Lashley how difficult it was going to be to turn Gulf Coast around. If they wanted to do it, he said, they were going to have to focus on the Gulf Coast board. The only way GCCSA could be fixed, they were told, was to take its board apart, "brick by brick."
For the last 30 years Gulf Coast Community Services Association has been headquartered in an oblong white building at the corner of Bowling Green and Dixie Drive near Highway 288. The condition of the building seems to reflect the disarray of the agency: the walls of the narrow hallways are scuffed and dirty; the linoleum floors need wax. The board meeting room features a wrinkled, orange wall-to-wall carpet. The ceiling tiles are cracked and the room divider is grimy and frayed. On the wall around the U-shaped conference table hang color photographs of various board members. In some places where pictures should be, yellow notes with members' names are stuck on the wall.
It's July 10, and about 20 board members have shown up along with 50 people in the audience. The disgruntled education coordinators and their lawyer, Dessiray Bell, are there to deliver an almost ritual denunciation of Ruth Marshall for "harassment, intimidation and acts of retaliation." But three dozen other people have one thing in mind: to voice their support for Gulf Coast's battered executive director, William Lawton. At the June board meeting, Lawton had ostensibly been given his walking papers after a vote of no confidence. That vote was led by several of the government representatives, including County Judge Robert Eckels and Councilmen Michael Yarbrough and Al Calloway, who attended the meeting along with their appointed representatives. Since selection of the director is the chief means by which the board can influence the conduct of the agency, it seemed as though the board had finally taken a step to solve its problems.
At the center of the table sits the board chair, Livy Wilson II. His task, as he sees it, is to keep the board focused on its agenda, which includes approving leases on six new Head Start centers and a much needed revision of its personnel policies. But the speakers have a different agenda: to get Lawton back, warts and all. Justice of the Peace Al Green comes forward and advises, "You don't want to be changing horses in midstream when the current is rough. You might want to hold on to that horse." A big white-haired man gets up. He's clearly a preacher, and as he moves around the room he exhorts the board to get together with oratorical fervor.
Not one speaker mentions the fact that GCCSA's chief problem has been its failure to spend millions of dollars on the poor. Not one person points out that thousands of children have forever lost the opportunity to attend Head Start. And if any of them knows that a week earlier, the agency's sloppy purchasing procedures had been exposed in a million-dollar lawsuit, he doesn't mention it.
Loretta Herpin, a business representative who owns a florist's shop, reads what she calls a minority board report. She denounces the vote against Lawton as a violation of the board laws and asks the board to rescind it. She also asks for the immediate removal of the HISD representative -- meaning chair Livy Wilson -- and the mayor's representative, Max Patterson of the city's finance office. Several earlier speakers had theorized that there's a conspiracy in the board to take over GCCSA, either by the county, the city or HISD.
"I don't know what the forces are," Herpin tells the board, "all I know is that they are evil."
By the end of the evening, Wilson has managed to coax the board through its agenda. The six urgently needed Head Start leases are almost delayed, but are approved after Wilson and Patterson remind the board that if it doesn't expand its services by January 6, it will lose its Head Start grant. Similarly, the personnel policies, which haven't been revised since 1981, are almost tabled because one board member has inside information that management hasn't sought employee feedback as required by the funding source.
Finally, the board retreats into executive session to discuss rescinding its vote against Lawton; when they come back out for a public vote, the pro-Lawton forces carry the day. Despite the threat of federal sanctions, the concern of investigators, the frustrations of the clients GCCSA is supposed to serve, the agency's status quo, in many ways, continues to be upheld. Later, the mayor's representative, Max Patterson, shakes his head at the mess. He has been a small-town police chief and a big-city financial officer, and he has never, he says, seen anything like this. Nobody really wants to take over Gulf Coast, he says. The headaches are just too enormous. Still, it may come to that; there's no question that the feds can take away the Head Start money and give it to another agency if GCCSA doesn't meet its goals. And at this point, Patterson, a big, calm man with no tendency to rhetoric, doesn't think it will.
"Part of me says you can only do so much as a board member," he says. "Sometimes you just have to let things take their course.
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