Federal undercover investigators found workers at federally financed child care centers frequently misrepresenting information about applicants' job status and earnings to fraudulently register ineligible children, the Government Accountability Office said in a report issued Tuesday. The investigators posed as parents or guardians of fictitious children and used bogus pay stubs and other documents to seek to register for day care services at Head Start centers, the report said. In 8 of 15 undercover tests, employees lied on federal forms about the applicants' family income and other information to gain approval for the ineligible children, the report said. An employee at one New Jersey Head Start center disregarded $23,000 worth of income to qualify a too-affluent, fictitious family the undercover agents were seeking to register. 'Now you see it, now you don't,' the New Jersey employee told the investigators, referring to the $23,000 in income, the GAO report said. Head Start, an agency of the Health and Human Services Department with a budget of about $9 billion this year, provides child care and other services to nearly one million children nationwide. To be eligible, children must be from families whose incomes do not exceed 130 percent of the poverty level, or about $28,600 a year for a family of four. Examining records at one nonprofit Head Start center in Texas, federal investigators found that the center had enrolled two families with incomes higher than $110,000, the report said. 'The system is vulnerable to fraud,' Gregory Kutz, the GAO's managing director for special investigations, told the House education committee in a hearing Tuesday. Investigators carried out their undercover inquiries at 13 Head Start centers in California, Maryland, New Jersey, Pennsylvania, Texas, Wisconsin and Washington, D.C. In an initial inquiry after two calls to a GAO fraud hot line, investigators found fraud and abuses at two additional centers, one in the Midwest and one in Texas. Kutz said in an interview that he could not identify the Midwestern state or the names of any of the centers because the investigation was continuing. The GAO will soon refer the Head Start findings to the inspector general's office at the Health and Human Services Department for its consideration for a criminal inquiry, Kutz said. The report and the hearing left unclear just how widespread the fraudulent practices may be. The investigation found fraud in more than half of all the centers it examined. But those were only a tiny fraction of the 1,600 or so nonprofit operators that receive Head Start money to run more than 3,000 programs. 