The Santa Clara County Office of Education today reported that federal auditors discovered more than $135,370 in Head Start funds had been misappropriated to pay for non-Head Start staff and credit card purchases.

In a statement, the education office said, “The failure has been remedied.”

U.S. Head Start auditors told local education officials that they had discovered “a pattern by previous administrators of scoffing grant rules and rejecting calls for oversight” by the Board of Education, the Head Start Parent Committee and the U.S. Department of Health and Human Services and the Administration for Children and Families, which oversees the Head Start program.

The federal auditor’s report confirmed recent internal investigations triggered by a whistleblower complaint that thousands of dollars had not been legally appropriated.

The report followed the October 2024 firing of Mary Ann Dewan, the superintendent of schools for Santa Clara County. The board's decision was controversial and led to accusations of misspending funds. “Previous administrators refused to comply with calls for public review, and neglected to engage the community members being served by the grant – a federal mandate,” the education office said in a statement.

“Since stepping into this role, myself and the rest of county leadership have taken these issues seriously and have been proactive in addressing concerns to ensure compliance with all federal regulations,” county Interim Superintendent Dr. Charles Hinman said. “We remain committed to completing our own investigations so we can fully understand how these things happened and ensure they never happen again. It is our duty to ensure that all possible resources are used in the best interest of our students.”

The audit report identified several areas of non-compliance with the Office of Head Start’s Program Performance Standards requiring corrective action within 120 days. “The County Office of Education is taking immediate action to address the findings and ensure complete compliance with all federal regulations moving forward.” the office said in a statement.

Hinman, who was appointed in October 2024 after DeWan’s dismissal, launched independent third-party investigations in November 2024 to examine various concerns about governance and administration of the county’s Head Start program by the previous administration, including the misappropriation of Head Start funds.

The federal auditor found that the county education office did not immediately comply with a federal review into its use of Head Start funds in spring of 2024. According to the report, the county office “charged the Head Start federal grant for wages and credit card expenses of a non-Head Start manager in the amount of $135,373 during the period of January 2024 through June 2024.”

During a meeting on April 9, 2024, Head Start officials had informed the county education office of complaints related to misuse of funds, with follow-up letters requesting responses on April 17, April 30, May 15 and June 6.

The auditor reported that the education office eventually confirmed the misallocation of funds and reversed the charges out of Head Start on June 11, but only came “after months of a failed cover-up,”  said County Board of Education President Maimona Afzal Berta.

“The results from this federal review validate the rightful concerns and actions of the Board of Education despite the now proven intentional and illegitimate effort to undermine the Board’s oversight and governance authority, as publicly elected officials,” Berta said. “The public has a right to know exactly what occurred. These are precious public dollars meant to help the most vulnerable in our community and no administrator should ever be allowed to act in this manner ever again. As stewards of the public’s trust, we must ensure that we have the unfettered ability to fulfill our duty to oversee this program and put appropriate measures in place.”

The audit report states that SCCOE’s previous administration did not meet the standard in its implementation of Head Start, including not having “a process for engaging the parents, including the policy council and parent committees” or providing “appropriate training and technical assistance” on Head Start to the policy council and governing county board of education.

“We are disappointed by these findings but are thankful to those who initially raised concerns about these issues,” Board Vice President Victoria Chon said in a statement. “We are fully committed to making things right and ensuring the resources meant for our children and families are used responsibly and  effectively moving forward.”

“We stand behind the actions being taken by the new leadership to address these concerns and implement necessary reforms,” she said.

The report also said previous education administrators “did not ensure the policy council received adequate information to make informed decisions” and “did not establish selection criteria that prioritized the selection of participants based on the community needs.”

“It is unfortunate that Head Start has experienced challenges stemming from the actions of previous leadership,” said Yadira Orozco, county Head Start Policy Council Chair. “Our focus now is on addressing these issues and working collaboratively to strengthen and enhance the program for the children and families we serve.”