KEY POINTS
- The Head Start Act sets a ceiling of 15 percent for development and administrative costs.
- The Head Start Act gives the HHS Secretary the flexibility to determine that administrative expenses are excessive below the 15 percent ceiling.
- Administrative expenses do not include program costs, which are those directly related to the provision of program component or direct service functions. Indirect costs comprise a large share of administrative expenses.
- In Fiscal Year 2025 (FY25), nearly one third of all grants (31.4 percent) operate at or below 10 percent administrative costs. Administrative spending as a share of total costs did not vary substantially by grant size.
- Across Head Start programs, the share of overall spending on administrative expenses remained relatively stable from FY16 to FY25, ranging from 10.9 percent to 11.2 percent.
- The 15 percent ceiling for Head Start sits at the high end of administrative limits used across related programs. Other federal human services and early childhood programs generally set a 5 percent or 10 percent administrative expense limit.
- Every dollar spent on general administrative expenses is a dollar unavailable for core program functions like classroom instruction or comprehensive services for children and families.
Read ASPE's issue brief: Over the Past 10 Years, Head Start Administrative Spending Remained Relatively Steady and Always Below the 15 Percent Statutory Ceiling