OGDEN, Utah (AP) -- Federal Head Start officials are demanding the Ogden Area Community Action Agency pay back almost a half million dollars in overcharges the agency billed from 1994 to 1997.

OACAA director AnnaJane Arroyo said her agency plans to appeal the decision in hopes of convincing them to either lower the amount or forgive the debt entirely.The overcharges occurred during the years that former executive director H.C. Massey ran the agency. The board fired him in November 1997 after an investigation substantiated charges that he harassed employees. At one point, Head Start officials threatened to take away a $1.4 million grant because of Massey's alleged mismanagement of the agency.

"It's a big blow," Arroyo said. "But the board of trustees, Dr. (Don) Carpenter, myself and others are working on this and staying on top of it. We remain optimistic."

The board hired Arroyo in May after restructuring the agency and eliminating the executive director position. Head Start has since renewed its contract with the agency.

Head Start initially told agency officials they owed $600,000 in overpayments, but officials were able to convince the feds that slightly more than $100,000 were legitimate expenses.

Investigators found that six questionable vouchers totaling $19,592 were legitimate but recommended the agency clean up its accounting procedure so that vouchers would be recorded in the appropriate year.

Head Start, however, did not accept the agency's explanation for $77,700 in rental charges for the Head Start program. The federal agency said OACAA was not entitled to charge Head Start the full rent since OACAA owned the building. Head Start regulations limit the amount to use and depreciation.

The ruling leaves the agency owing $496,407 which must be repaid from non-federal sources. Arroyo said she has not considered how the agency will repay the debt. The agency's only substantial asset is the building at 3159 Grant.

Earlier this year, the agency mortgaged some of the agency's land because it did not have enough money to pay salaries.