Texas Neighborhood Services v. HHS, No. 16-5150 (D.C. Cir. 2017)Annotate this Case
Texas Neighborhood Services received Head Start grant money to provide childcare services to low-income families in Texas. The Department subsequently required Neighborhood Services to repay $1.3 million in federal funds it awarded to staff in the form of performance bonuses. The Department argued that the payments were unreasonable and inadequately documented and the Appeals Board agreed. The DC Circuit affirmed the district court's rejection of Neighborhood Services' challenge under the Administrative Procedures Act. In this case, Neighborhood Services failed to produce documentation sufficient to show that it was awarding performances in accordance with the Office of Management and Budget's Circular A-122, which explains when and how the government will reimburse federal grantees, including organizations receiving Head Start money, for different types of expenses.