July 1, 2002

Honorable Patricia Hamamoto

Superintendent of Education

Hawaii Department of Education

#### 1390 Miller Street, #307

Honolulu, Hawaii 96813

Dear Superintendent Hamamoto:

This is to inform you that we have conditionally approved Hawaii's
Eligibility Document Submission for Federal Fiscal Year (FFY) 2002 under
Part B of the Individuals with Disabilities Education Act (IDEA). Our
determination that you are eligible for a conditional approval is based
on our receipt of the following documents submitted by Hawaii to the
Office of Special Education Programs:

1.  The Part B Eligibility Document Submission for FFY 2002 including
    the Eligibility Documents submitted May 11, 2000 subsequent
    revisions to those Eligibility Documents and the Submission
    Statement submitted May 15 and June 20, 2002; and

2.  The June 28, 2002 letter from Hawaii to OSEP, in which Hawaii
    assures that as soon as possible, but no later than July 1, 2003,
    Hawaii will complete all of the changes set forth in the June 13,
    2002 issues chart including 34 CFR §§ 300.121(b)(2); 300.575;
    300.555; 300.136(c) and (g); 300.137; 300.138(b); 300.139; 300.141;
    300.600; 300.142; and 300.146.

> In the June 28, 2002 letter, Hawaii also assures that it will take
> steps to ensure that, throughout the period of this grant award, all
> public agencies in the State that provide special education and
> related services to children with disabilities will operate their
> programs in a manner fully consistent with Part B. Hawaii further
> assures that it will provide OSEP with a copy of a memorandum
> notifying all public agencies of the changes that impact on public
> agencies' provision of special education and related services that
> OSEP requires as a result of its review of the State's eligibility
> documents.

Please note that as part of your Eligibility Document Submission for FFY
2002, your State has made an assurance, under 34 CFR §80.11(c), that it
will comply with all applicable Federal statutes and regulations in
effect with respect to the periods for which it receives grant funding.
Any changes made by the State, after OSEP approval, to information that
is a part of a State's Eligibility Document Submission, must meet the
public participation requirements of the IDEA and must be approved by
OSEP before implementation.

The Hawaii's FFY 2002 IDEA Part B grant award is being released subject
to [FFY 2002 Special Conditions]{.underline} as set forth in Enclosure C
that are being imposed pursuant to the Department's authority in 34 CFR
§80.12. Specifically, OSEP determined that Hawaii has not established a
goal and indicator for the performance of children with disabilities on
assessments and the State did not administer or report on the
participation and performance of children with disabilities on regular
or alternate assessments as required at 20 U.S.C. 1412(a)(16)-(17) and
34 CFR §§300.137-300.139. The Biennial Performance Report for Part B of
the IDEA for grant years 1999-2000 and 2000-2001 was due on May 31,
2002. Among other information, the Biennial Performance Report required
that States submit information regarding children with disabilities'
participation in and performance on Statewide assessments. 34 CFR
§300.138 requires that children with disabilities participate in general
State and district-wide assessment programs with appropriate
accommodations and modifications in administration, if necessary. In
addition, States are required to develop alternate assessments for those
children with disabilities who cannot participate in State and
district-wide assessment programs, even with appropriate accommodations
and modifications in administration. States also must report on the
progress of children with disabilities in the State toward meeting the
established performance goals and indicators for children with
disabilities on assessment, dropout rates and graduation rates, at a
minimum (34 CFR §300.137).

The requirements that States establish performance goals and indicators
on performance of children with disabilities on assessments, drop-out
rates and graduation rates and report publicly and to the Secretary
every two years on the progress of the State and of children with
disabilities within the State toward meeting those goals, ensure that
children with disabilities participate in State and district-wide
assessment systems; develop and administer alternate assessments, if
necessary; and report publicly on the participation and performance of
children with disabilities in State and district-wide assessments are
crucial to ensuring that children with disabilities are provided access
to high-quality instruction in the general curriculum, and that States
and districts are held accountable for the progress of these children.
20 U.S.C. 1412(a)(16)-(17); 34 CFR §§300.137-300.139. The requirements
regarding the participation of children with disabilities in, and
reporting on participation and performance of children with disabilities
in regular assessments have been in effect since July 1, 1998; the same
requirements regarding alternate assessments have been in effect since
July 1, 2000. The information reported to the Department in Hawaii's
Biennial Performance Report for the 2000-2001 school year demonstrates
that Hawaii has not established a goal and indicator for the performance
of children with disabilities on assessments and the State did not
administer or report on the participation and performance of children
with disabilities on regular or alternate assessments as required by
Part B.

Your State's failure to establish a goal and indicator for the
performance of children with disabilities on assessments and administer
and report on the participation and performance of children with
disabilities on regular or alternate assessments has resulted in the
Department imposing the [FFY 2002 Special Conditions]{.underline}
contained in Enclosure C of this letter. The reasons for doing so and
the specific conditions are detailed in the enclosure. Hawaii must
administer these awards both in keeping with the applicable provisions
of Federal law and regulations and the [Special Conditions]{.underline}
attached to the grant award document. Acceptance by Hawaii of these
grant awards constitutes an agreement by the State to comply with these
[Special Conditions]{.underline}.

Enclosed are grant awards for funds currently available under the
Department of Education FFY 2002 Appropriations Act for the Part B
Section 611 (Grants to States) and Section 619 (Preschool Grants)
programs. These funds are for use primarily in school year 2002-2003 and
are available for obligation by States from July 1, 2002 through
September 30, 2004.

The amount in your award for Section 619 represents the full amount of
funds to which you are entitled. However, the amount shown in your award
for the Section 611 program is only part of the total funds that will be
awarded to you for FFY 2002. Of the \$7,528,533,000 appropriated for
Section 611 in FFY 2002, \$2,456,533,000 is available for awards on July
1, 2002, and \$5,072,000,000 will be available on October 1, 2002.

The funding formula for the Section 611 program is the same as was
implemented for FFY 2000. Subject to certain maximum and minimum funding
requirements, State allocations are based on the amount that each State
received from FFY 1999 funds, the general population in the age range
for which each State ensures a free appropriate public education (FAPE)
to all children with disabilities, and the number of children living in
poverty in the age range for which each State ensures FAPE to all
children with disabilities.

Enclosure A provides a short description of how Section 611 funds were
allocated and how those funds can be used. In addition, Table I in
Enclosure A shows funding levels for distribution of Section 611 funds.

Enclosure B provides a short description of how Section 619 funds were
allocated and how those funds can be used. In addition, Table II in
Enclosure B shows State-by-State funding levels for distribution of
Section 619 funds.

These awards are based on submission of a complete eligibility document
package, a signed assurance statement regarding resolution of issues
identified in OSEP's review of that eligibility document package, and
implementation of the provisions of the Individuals with Disabilities
Education Act. The complete eligibility document package and assurances
must be made available for public inspection.

We appreciate your ongoing commitment to the provision of quality
educational services to children with disabilities.

> Sincerely,

###### Stephanie S. Lee

> Director
>
> Office of Special Education Programs

Enclosures

cc: Debra Farmer