September 8, 2005

Honorable David Berns

Director

Department of Economic Security\
1717 West Jefferson Street

P.O. Box 6123

Phoenix, Arizona 85005

Dear Director Berns:

The purpose of this letter is to respond to Arizona's March 31, 2005
submission of its Federal Fiscal Year (FFY) 2003 Annual Performance
Report (APR) under the Individuals with Disabilities Education Act
(IDEA) Part C during the grant period July 1, 2003 through June 30,
2004. The APR reflects actual accomplishments made by the State during
the reporting period, compared to established objectives. The Office of
Special Education Programs (OSEP) has designed the APR under the IDEA to
provide uniform reporting from States and result in high-quality
information across States. The APR is a significant data source for OSEP
in the Continuous Improvement and Focused Monitoring System (CIFMS).

The State's APR should reflect the collection, analysis, and reporting
of relevant data, and include specific data-based determinations
regarding performance and compliance in each of the cluster areas. This
letter responds to the State's FFY 2003 APR. OSEP has set out its
comments, analysis and determinations by cluster area.

### Background

OSEP's May 22, 2000 Monitoring Report identified the following
noncompliance with Part C. The Department of Economic Security through
the Arizona Early Intervention Program (DES/AzEIP) did not ensure: (1)
that monitoring procedures were effective in identifying and correcting
noncompliance with Part C (34 CFR §303.501); (2) the child find system
was a comprehensive, coordinated, statewide child find system (34 CFR
§303.321); (3) the dissemination of public awareness information to
primary referral sources (34 CFR §303.320); (4) the initial
Individualized Family Service Plan (IFSP) meeting was held within 45
days from initial referral (34 CFR §303.321(a)(1)); (5) it appropriately
developed interim IFSPs (34 CFR §303.322 (e)(2)); (6) the provision of
all services to all eligible infants and toddlers with disabilities,
including children on American Indian Reservations (34 CFR §303.322);
and (7) all service coordination functions were implemented (34 CFR
§303.23(a)(2)).

On March 15, 2004, in response to Arizona's Part C FFY 2001 APR and
following a State visit by OSEP to Arizona in December 2003 to verify
the State's systems for general supervision and collection of data under
section 618 of IDEA, OSEP issued two letters documenting the Arizona
Department of Economic Security's (DES's) continued noncompliance with
the following four requirements originally identified in OSEP's 2000
Monitoring Report: (1) utilizing effective monitoring procedures to
ensure the identification and correction of noncompliance with Part C as
required by 34 CFR §303.501; (2) conducting evaluations and assessments
and initial individualized family service plan (IFSP) meetings within 45
days from referral as required by 34 CFR §§303.321(e)(2), 303.322(e)(1)
and 303.342(a); (3) providing early intervention services identified on
the child's IFSP, in a timely manner, to all eligible infants and
toddlers with disabilities, including infants and toddlers on American
Indian Reservations as required by 34 CFR §303.342(e); and (4) ensuring
that all service coordination functions are implemented as required by
34 CFR §§303.23 and 303.344(g).

The State's FFY 2002 APR served as a Progress Report related to all
seven areas of noncompliance identified in OSEP's 2000 Monitoring
Report. The State's FFY 2002 APR indicated that the State had resolved
three findings: (1) the development of a comprehensive, coordinated,
statewide child find system as required by 34 CFR §303.321; (2) the
dissemination of public awareness information to primary referral
sources as required by 34 CFR §303.320; and (3) appropriately extending
timelines for evaluations and assessments and routinely developing
interim IFSPs as required by 34 CFR §303.322 (e)(2).

The remaining four areas of noncompliance are being addressed in the
Department's Compliance Agreement with DES/Arizona Early Intervention
Program (AzEIP), which was executed on December 22, 2004. The Compliance
Agreement and work plans specified goals and timetables required by
DES/AzEIP to come into full compliance with its Part C obligations in
each of the four areas within three years of December 22, 2004. Under
the Compliance Agreement, DES/AzEIP is required to submit documentation
concerning its compliance with enumerated activities, goals and
timetables. In addition, DES/AzEIP is required to submit quarterly
reports to OSEP on progress made under these work plans, reflecting
activities/goals met, any obstacles and other information related to
progress. OSEP received the first quarterly report on March 31, 2005
along with the FFY 2003 APR.

*General Supervision*

[Identification and timely correction of noncompliance]{.underline}

-   Monitoring procedures were not effective in identifying and
    correcting noncompliance with Part C (34 CFR §303.501).

This area of noncompliance is addressed in the Compliance Agreement.
OSEP will respond to Progress Reports from the first year of the State's
implementation of the Compliance Agreement upon receipt of the fourth
quarterly report, due March 31, 2006.

> [Dispute Resolution]{.underline}

On pages 13 and 14 of the FFY 2003 APR, the State included data and
analysis demonstrating continued compliance in this area. DES/AzEIP
reported that it logs both informal and formal complaints and that, in
the reporting period, there were thirteen informal complaints received
and all were resolved through informal procedures. In addition, there
were three formal complaints that were completed within required
timelines. OSEP looks forward to reviewing the State's data regarding
complaints, mediations and due process hearings in the State Performance
Plan (SPP), due December 2, 2005.

> [Personnel]{.underline}

On pages 17-20 of the FFY 2003 APR, the State included data and analysis
regarding its performance in this area. DES/AzEIP reported personnel
data that indicated an 11% increase in the number of personnel who
provide early intervention services from the previous year. DES/AzEIP
also reported the expansion of its contracts with early intervention
services providers, which increased the early intervention providers in
the State. OSEP appreciates the work of the State in this area.

> [Collection and timely reporting of accurate data]{.underline}

On pages 23-24 of the FFY 2003 APR, the State included data and analysis
regarding compliance in this area. DES/AzEIP reported that three AzEIP
participating agencies and all contractors submit child-tracking data on
a monthly basis. Furthermore, throughout the reporting period, the
DES/AzEIP data manager held meetings with the data managers of
participating agencies to discuss data requirements and to ensure
accurate data reporting. OSEP looks forward to reviewing the State's
response to the indicator regarding its reported data (618 and State
Performance Plan and Annual Performance Report) that are timely and
accurate in the SPP.

*Comprehensive Public Awareness and Child Find System*

OSEP's December 2004 response letter required DES/AzEIP to report its
progress on increasing the number of children served in the State and
the status of the Memorandum of Agreement (MOA) with the Reservations.

On page 28 of the FFY 2003 APR, DES/AzEIP reported an increase in
referrals from 4,115 in 2002 to 6,186 in 2003. Child count data for
infants and toddlers birth to three indicated improvement from 1.36% in
2002 to 1.39% in 2003. Child count data for birth to one also improved
from .5% in 2002 to .6% in 2003. In addition, DES/AzEIP reported that
the Intergovernmental Agreement (IGA) between DES/AzEIP and the Navajo
Nation was finalized in October 2004, and additional IGAs or MOAs will
be developed with four other Native American tribes. OSEP looks forward
to reviewing the State's data in the SPP regarding the percent of
infants and toddlers birth to one and birth to three with IFSPs compared
to: (a) other States with similar eligibility definitions; and (b)
National data.

*Family Centered Services*

On pages 36-40 of the FFY 2003 APR, the State included data and analysis
regarding its performance in this area. DES/AzEIP reported that site
visits, child file audits, family surveys, and family interviews
indicated family satisfaction with the Part C system. The IFSPs reviewed
indicated that families' resources, priorities, concerns and functional
outcomes were included. OSEP appreciates the State's efforts in this
area and looks forward to reviewing the plan for collecting data in the
SPP regarding the percent of families in Part C who report that early
intervention services have helped the family: (a) know their rights; (b)
effectively communicate their children's needs; and (c) help their child
develop and learn.

*Early Intervention Services in Natural Environments*

> [Service coordination]{.underline}

-   Not ensuring that all service coordination functions are implemented
    (34 CFR §303.23(a)(2)).

This area of noncompliance is addressed in the Compliance Agreement.
OSEP will respond to Progress Reports from the first year of the State's
implementation of the Compliance Agreement upon receipt of the fourth
quarterly report, due March 31, 2006.

> [Evaluation and identification of needs]{.underline}

-   Not convening the initial individualized family service plan (IFSP)
    meeting within 45 days of referral (34 CFR §303.321(a)(1)).

This area of noncompliance is addressed in the Compliance Agreement.
OSEP will respond to Progress Reports from the first year of the State's
implementation of the Compliance Agreement upon receipt of the fourth
quarterly report, due March 31, 2006.

> [Individualized family service plans (IFSPs)]{.underline}

-   Not ensuring the provision of all services to all eligible infants
    and toddlers with disabilities, including children on American
    Indian Reservations (34 CFR §§303.340(c) and 303.342(3)).

This area of noncompliance is addressed in the Compliance Agreement.
OSEP will respond to Progress Reports from the first year of the State's
implementation of the Compliance Agreement upon receipt of the fourth
quarterly report, due March 31, 2006.

> [Natural environments]{.underline}

On pages 52-53 of the FFY 2003 APR, the State included data and analysis
regarding its efforts to ensure compliance and improve performance in
this area. DES/AzEIP reported that 86% of children were provided
services in the home or in a program for typically developing children
and that 11% of children were provided services in "Other" settings that
include parks, libraries and community centers. OSEP looks forward to
reviewing the State's data in the SPP regarding the percent of infants
and toddlers with IFSPs who primarily receive early intervention
services in the home or programs for typically developing children.

> [Early childhood outcomes]{.underline}

Under the Government Performance and Results Act of 1993, 31 U.S.C.
1116, the effectiveness of the IDEA Part C program is measured based on
the extent to which children receiving Part C services demonstrate
improved and sustained functional abilities in the cognitive, physical,
communication, social or emotional and adaptive developmental areas. The
Part C FFY 2001, 2002 and 2003 APRs requested data on the percentage of
children participating in the Part C program that demonstrate improved
and sustained functional abilities in the developmental areas listed in
34 CFR §303.322(c)(3)(ii). On pages 60 and 61 of the FFY 2003 APR, the
State provided data and information as follows: (1) child file audits
regarding services provided indicated that IFSP outcomes were addressed
78% of the time and site visit data indicated that IFSP outcomes were
addressed 70% of the time; (2) child file audits indicated that progress
towards outcomes on IFSPs was addressed 86% of the time and 82% of the
time site visits indicated that progress towards outcomes on IFSPs was
addressed; and (3) family survey data indicated that families believed
their service providers helped them understand the supports and services
that led to IFSP outcomes. DES/AzEIP reported that the data demonstrated
a need for improvement in documenting the results of services in
relation to IFSP outcomes. In the State\'s submission of its SPP on
December 2, 2005, the State should incorporate and update the data and
information collected for and reported in the State\'s FFY 2001, 2002,
and 2003 APRs to address the requirements related to this indicator. The
SPP instructions establish a new indicator in this area, for which
States must provide baseline data in the FFY 2005 APR due February 1,
2007. Absence of this information at that time will be considered in
OSEP\'s annual determination on the status of the State\'s performance
and compliance required under section 616(d) of the IDEA. The State
should carefully review the instructions to the SPP in developing its
plans for this collection.

*Early Childhood Transition*

OSEP's December 2004 letter required DES/AzEIP to report on its efforts
to ensure compliance for timely transition planning. The State was to
provide evidence of progress in correcting any identified noncompliance,
including supporting data and its analysis.

On page 65 of the FFY 2003 APR, DES/AzEIP reported the following data
and information: sampling data from Maricopa County (August
2002-September 2003) indicated that of 931 children that transitioned to
Part B services, 51% were past their third birthday. DES/AzEIP did not
include data on Part C's transition requirements under 34 CFR
§§303.148(b)(1) and (b)(2) that transition steps and a plan are
identified on the child's IFSP for all children exiting Part C and, for
children potentially eligible under Part B, that the lead agency notify
the LEA and conduct, with family concurrence, the transition conference
at least 90 days prior to the child's third birthday.

While the State also included strategies, proposed evidence of change,
targets and timelines designed to collect additional data that would
provide information on the causes for late entry into the Part B system,
the State did not provide OSEP with data or analysis to determine
whether transition planning conferences were timely and whether they
invited Part B representatives to transition conferences. In the SPP,
the State must include data and analysis, along with a determination of
compliance or noncompliance with the transition planning timelines at 34
CFR §§303.148(b)(1) and (2). If the data indicate noncompliance, the
State must provide in the SPP strategies, targets, timelines and
evidence of change to correct the noncompliance no later than one year
from when OSEP accepts the plan.

## *Conclusion*

In the State Performance Plan, due December 2, 2005, DES/AzEIP must
submit to OSEP:

(1) Its determination on whether data collected related to early
    childhood outcomes and plans to collect additional data will be
    responsive to those requirements.

(2) Data and analysis, along with a determination of compliance or
    noncompliance with

> transition planning requirements regarding transition steps and plan,
> LEA notification, and 90 day conference at 34 CFR §§303.148(b)(1) and
> (2); and if data indicate noncompliance with any requirement, the
> State's plan to address the noncompliance.

IDEA 2004, §616, requires each State to submit an SPP that measures
performance on monitoring priorities and indicators established by the
Department. These priorities and indicators are, for the most part, the
same as clusters and probes in the APR. OSEP encourages the State to
carefully consider the comments in this letter as it prepares its SPP,
due December 2, 2005.

OSEP recognizes that the APR and its related activities represent only a
portion of the work in your State and we look forward to collaborating
with you as you continue to improve results for infants and toddlers
with disabilities and their families. If you have questions, please
contact Julia Martin at (202) 245-7431.

> Sincerely,
>
> /s/Troy R. Justesen
>
> Troy R. Justesen

Acting Director

Office of Special Education Programs

cc: Molly Dries

Part C Coordinator