December 13, 2004

Michelle Lujan Grisham, Secretary

Department of Health

1190 St. Francis Drive

P.O. Box 26110

Santa Fe, New Mexico 87502-6110

Dear Secretary Lujan Grisham:

The purpose of this letter is to respond to New Mexico's April 5, 2004
submission of its Federal Fiscal Year (FFY) 2002 Annual Performance
Report (APR) for the Individuals with Disabilities Education Act (IDEA)
Part C funds used during the grant period July 1, 2002 through June 30,
2003. The APR reflects actual accomplishments made by the State during
the reporting period, compared to established objectives. The APR for
IDEA is designed to provide uniform reporting from States and result in
high-quality information across States.

The APR is a significant data source utilized in the Continuous
Improvement and Focused Monitoring System (CIFMS) implemented by the
Office of Special Education Programs (OSEP), within the U.S. Department
of Education. The APR falls within the third component of OSEP's
four-part accountability strategy (i.e., supporting States in assessing
their performance and compliance, and in planning, implementing, and
evaluating improvement strategies) and consolidates the self-assessing
and improvement planning functions of the CIFMS into one document.
OSEP's Memorandum regarding the submission of Part C APRs directed
States to address five cluster areas: General Supervision; Comprehensive
Public Awareness and Child Find System; Family Centered Services; Early
Intervention Services in Natural Environments; and Early Childhood
Transition.

*Background*

OSEP's June 29, 2001 accepted New Mexico's Improvement Plan that was
developed in response to OSEP's January 7, 2000 Monitoring Report, that
identified the following eight areas of noncompliance: (1) supervision
and monitoring procedures do not ensure compliance with Part C of IDEA,
and all programs providing early intervention services are not monitored
by the State; (2) public awareness information does not adequately reach
the general public, and other agencies are not fully aware of their
responsibility for referral to the early intervention program; (3)
referrals are not made in a timely manner by primary referral sources in
all areas of the State; (4) evaluations and assessments are not
completed in a timely manner to ensure that the initial IFSP meeting is
held within 45 days of referral; (5) service coordinators do not fulfill
all required roles; (6) Individualized Family Service Plan (IFSP)
meeting participants do not always fulfill their responsibility to
identify all needed services and locations of services on an
individualized basis; (7) services included on the IFSP are not
provided; and (8) the transition conference with parents and the school
district does not consistently occur 90 to 120 days prior to the child's
third birthday. Based on the information in the FFY 2002 APR and
progress reports, OSEP has determined that the State had addressed four
of the findings above (monitoring, child find, public awareness, and
identification of early intervention services on the IFSP). The FFY 2002
APR, however, did not provide data demonstrating correction in the
remaining four areas from OSEP's 2000 monitoring report (45-day
timeline, service coordination, provision of IFSP services, and 90-day
transition) and includes a new area of noncompliance in the general
supervision cluster area.

In its June 2001 letter, OSEP directed the State to provide progress
reports, with the final report due December 31, 2002. The New Mexico
Department of Health (NMDOH) submitted its final report in February
2003; however, the final report lacked data to substantiate compliance
with all eight findings from OSEP's monitoring report. In July 2003,
NMDOH submitted its FFY 2001 APR and in October 2003, NMDOH submitted an
additional progress report under its Improvement Plan. OSEP responded to
the State's FFY 2001 APR and the October 2003 progress report in its
February 24, 2004 letter indicating that three findings had been
partially addressed (specifically in the general supervision, public
awareness and child find areas).

OSEP issued another letter on February 24, 2004 that summarized the
results of its visit to New Mexico during the week of August 18, 2003 to
verify the effectiveness of the State's systems for general supervision
and data collection under section 618 of IDEA. OSEP's February 2004
verification letter acknowledged that because NMDOH's monitoring system
had only been piloted in February 2003, OSEP could not determine yet how
the State ensures correction of noncompliance. OSEP requested in its
February 2004 verification letter that the State provide in its FFY 2002
APR, among other information, data on how the State ensures correction
of identified noncompliance.

The State\'s APR should reflect the collection, analysis and reporting
of relevant data, and document data-based determinations regarding
performance and compliance in each of the cluster areas (as well as any
other areas identified by the State to ensure improvement). OSEP\'s
comments regarding the FFY 2002 APR are listed by cluster area below.

***General Supervision***

*Identification of Noncompliance:* In the January 2000 Monitoring
Report, OSEP found that: (1) the State was not monitoring to identify
noncompliance with all Part C requirements as required by 34 CFR
§303.501(a) and (b)(1); and (2) the State was not monitoring all
programs and agencies that provided Part C requirements as required by
34 CFR §303.501(a)(2). In its February 2004 verification visit letter,
OSEP acknowledged that the State's monitoring system "constitutes a
reasonable approach to the identification of noncompliance" and further
noted that NMDOH had a system that would monitor all entities that
provide early intervention services and for all Part C requirements. On
pages 1 and 2 of the FFY 2002 APR, NMDOH provided updated information on
the ability of its monitoring system to identify noncompliance. NMDOH
monitored six provider agencies during FFY 2002 after piloting its
monitoring procedures in four sites during FFY 2001. All ten sites were
included in the State's data analysis in its FFY 2002 APR. Results of
monitoring indicated several instances of noncompliance in each of the
sites monitored. In addition, the State reported on its policies and
procedures to include all entities in its three-year monitoring cycle.
Based on the information and data provided in the FFY 2002 APR, OSEP
identifies no additional concerns regarding the State's ability to
identify noncompliance.

*Correction of Noncompliance:* In the February 2004 verification visit
letter, OSEP identified for the first time the issue of the State's
ability to correct State-identified noncompliance. In that letter OSEP
found that, because NMDOH had only begun to pilot its monitoring system,
the State was not able to ensure correction of deficiencies identified
through monitoring as required by 34 CFR §303.501(b)(4). OSEP's February
2004 letter requested that the State include data, strategies, targets
and timelines in its FFY 2002 APR for the State to demonstrate that its
monitoring system can effectively correct State-identified
noncompliance.

NMDOH provided on pages 3-4 of the FFY 2002 APR a summary of the ten
provider agencies monitored during the FFY 2002 reporting period. Of the
first four pilot sites, three resolved their noncompliance. The State
reported that the fourth site did not provide adequate data to determine
compliance; technical assistance was provided and the corrective action
plan was still in process for this site. Of the six sites monitored
during FFY 2002, all corrective action plans had been approved by the
State; however, the deadline for the one-year completion timeline to
resolve their noncompliance occurs during the FFY 2003 APR reporting
period. In the FFY 2002 APR, the State also included strategies, targets
and timelines to ensure correction of State-identified noncompliance.

OSEP accepts the strategies, timelines, and targets in the FFY 2002 APR
to address compliance with 34 CFR §303.501(b)(4), correction of
noncompliance within a reasonable period of time. The State must submit
two progress reports, the first as part of the FFY 2003 APR and the
final progress report 30 days following one year from the date of this
letter. As part of the next APR (due March 31, 2005), NMDOH must submit
to OSEP: (1) the corrective action plan from the fourth site in the
first pilot (Tresco TOTS); (2) a summary of the corrective actions taken
by, and correction data from, the other six sites monitored during FFY
2002 (Mescalero, DSI, PB&J, Zia Therapy, Las Cumbres, and Casa Alegre),
which are expected to have completed their corrective action plans
during FFY 2003. In its final progress report due thirty days following
one year from the date of this letter, NMDOH must provide updated
correction data.

*Personnel:* On pages 7-9 of the APR, NMDOH reported that data
demonstrated an increase in the numbers of early intervention
professional staff except nursing. They further stated that the increase
in staff was commensurate with the increase in eligible children and
that there were sufficient numbers of appropriately and adequately
trained personnel to provide early intervention services.

*Dispute Resolution*: The State reported no complaints were filed or due
process or mediation requests received during the FFY 2002 reporting
period. The State also reported in the FFY 2002 APR that two provider
agencies were found out of compliance with the requirement to provide
parents with dispute resolution options but also reported that the two
agencies had completed corrective action plans to address these areas of
noncompliance. The State indicated its target to monitor ten additional
provider agencies to determine if there are systemic bases for the lack
of use of dispute resolution mechanisms. OSEP's February 2004 letter to
New Mexico requested NMDOH provide a written assurance by April 24, 2004
that all programs in the State that provide Part C services were using
corrected prior written notice materials required by 34 CFR §303.403(b).
OSEP has not yet received this assurance. In the next APR, due March 31,
2005, NMDOH must provide the requested assurance.

*Data:* The State reported that the Family Infant Toddler (FIT) data
system was programmed to ensure that all required data are entered. The
system had built-in edits and security to ensure accuracy and
confidentiality. During the CBA on-site monitoring, at least 10 percent
of child records were compared to information entered into the FIT
database. Agencies with errors were provided with technical assistance,
which sometimes included attendance at training sessions, until accuracy
was ensured.

# 

# Comprehensive Child Find System

In the January 2000 Monitoring Report, OSEP found that: (1) the State
had not met its responsibility to implement an effective public
awareness program, that would include providing a variety of materials
to adequately inform the general public, including parents, about the
provision of early intervention services, and disseminating materials
broadly enough to reach the general public (34 CFR §303.320); and (2)
the State had not implemented their policies and procedures to ensure
that all eligible children were identified and that primary referral
sources make referrals in a timely manner (34 CFR §303.321).

OSEP's February 24, 2004 letter responding to the FFY 2001 APR noted
that the State had implemented its Improvement Plan strategies to
address these two areas of noncompliance, but requested that the State
provide trend child find data to illustrate progress. On page 12 of the
FFY 2002 APR, NMDOH described additional actions implemented and
provided trend data that indicated an increase in the percentage of
children served, including at-risk children, from 2.08 percent in
2000-2002 to 2.54 percent in 2002-2003; however, the State reported that
when the at-risk numbers are removed from the child count, NMDOH's
December 2002 child count is 1.52 percent compared to the national
average of 2.19 percent. The State has implemented the public awareness
and primary referral outreach strategies identified in its Improvement
Plan. OSEP requests that the State continue to report in the next APR on
its ongoing activities to improve child find efforts in the State.

***Family Centered Services***

No previous noncompliance was identified in this cluster area. OSEP's
February 24, 2004 FFY 2001 APR letter requested that NMDOH provide: (1)
data to support the conclusion that parents reported an increased
capacity to meet the developmental needs of their child; and (2) data to
indicate compliance with the IDEA requirements in 34 CFR §303.322(d) and
34 CFR §303.344(b) and (d) that family assessments and family services
were offered and provided. NMDOH provided information, on page 18 of the
FFY 2002 APR, indicating that the percent of families reporting
increased capacity to meet their child's needs was 95 percent in FFY
2001 and 98 percent in FFY 2002. OSEP appreciates the State's efforts to
improve performance in this cluster area.

***Early Intervention Services in Natural Environments***

OSEP's 2000 Monitoring Report identified the following four areas of
noncompliance in this cluster area: (1) evaluations and assessments were
not completed in a timely manner to ensure that the initial IFSP meeting
was held within 45 days of referral (34 CFR §§303.321(e)(2),
303.322(e)(1), and 303.342(a)); (2) service coordinators did not fulfill
all required roles (34 CFR §303.23(a)(1) and (b)); (3) IFSPs did not
identify all needed services and locations of services on an
individualized basis (34 CFR §§303.344(d)(1), 303.343 and 303.167(c));
and (4) early intervention services included on the IFSP were not
provided (34 CFR §303.344(d)). In addition, OSEP's February 2004 FFY
2001 APR letter requested data on two additional areas: (1) natural
environments and (2) early childhood outcomes.

*45-Day Timeline:* OSEP's 2000 monitoring report identified
noncompliance with Part C's 45-day timeline requirements at 34 CFR
§§303.321(e)(2), 303.322(e)(1), and 303.342(a), that evaluations,
assessments, and an initial meeting to develop the IFSP are completed
within 45 days of referral. OSEP's June 29, 2001 letter that accepted
the State's Improvement Plan noted that the State's strategies included
providing training and technical assistance, making diagnostic and
specialty evaluation available State-wide, partnering with local
personnel, and monitoring for compliance with the goal of timely
evaluations and assessments.

On pages 2-4 and 23 of the FFY 2002 APR, NMDOH reported State-wide data
for each year from 2000-2003 that indicated the percentages of initial
IFSPs developed within the State's required 45-day timeline were 41
percent, 52 percent, 55 percent and 54 percent respectively.[^1] These
data indicate continued noncompliance and only minimal improvement in
the last few years. On page 4 of the FFY 2002 APR, NMDOH reported that
it continued to identify noncompliance with this requirement; of ten
sites monitored using the CBA, six were identified as in noncompliance
with the 45-day timeline. However, on page 2 of the FFY 2002 APR, NMDOH
reported that three pilot sites had completed their corrective action
plans, one pilot site had partially corrected noncompliance, and the
remaining six sites had not reached their one-year deadline to complete
their corrective action plan.

In the next APR (due March 31, 2005), the State must provide: (1)
correction data from the three pilot provider agencies that the State
identified as having completed corrective action plans that demonstrate
compliance with Part C's 45-day timeline requirement (NAPPR, PMS, and
Tobosa); and (2) a summary of the correction status and any available
correction data from the other seven provider agencies. If any of these
ten provider agencies have not achieved full compliance with Part C's
45-day timeline requirement, the State must also include in its FFY 2003
APR: (1) its analysis of why full compliance has not been achieved in
these agencies; (2) additional or revised strategies, targets and
timelines to ensure compliance as soon as possible; and (3) a summary of
the State's response to and correspondence with each agency not in
compliance, including any sanctions or enforcement actions taken.
Failure to demonstrate full compliance with Part C's 45-day timeline
requirement by the FFY 2003 APR may result in the State's designation as
a "high risk" grantee for its FFY 2005 Part C grant funds.

*Service Coordination:* In its January 2000 Monitoring Report, OSEP
reported that service coordinators did not coordinate all services that
children and families needed as required by 34 CFR §303.23(a)(2), citing
that three of the areas monitored had not complied with the requirement.
OSEP's June 29, 2001 letter that accepted the State's Improvement Plan
noted that the State's strategies included developing a training module
for service coordinators, developing an agreement with the Medically
Fragile Program, and monitoring for compliance with service coordinator
roles and responsibilities. The State reported in its 2003 progress
reports that it had implemented all of its strategies.

However, on page 21 of the FFY 2002 APR, the State concluded that two of
ten programs (80%) it monitored did not comply with the requirement that
service coordinators monitor the delivery of all services needed on the
IFSP. In the FFY 2003 APR, NMDOH must report on the status of correction
of the noncompliance related to service coordination from the two
programs that it monitored during the FFY 2002 reporting period.

*Identification of Services on the IFSP:* In its January 2000 Monitoring
Report, OSEP reported that the IFSP meeting participants did not always
fulfill their responsibility to identify all needed services and
locations of services on an individual basis (34 CFR §§303.344(d),
303.343 and 303.167(c)). OSEP also noted in its report that decisions
concerning provision of early intervention services and the location of
services were based on parent choice, rather than the needs of the child
and results of the evaluation and assessment. The State reported in its
2003 progress reports that it had implemented all of its strategies from
its Improvement Plan, but indicated it would monitor for compliance with
this requirement. However, because the State did not provide monitoring
data in its FFY 2001 APR, OSEP requested in its February 2004 FFY 2001
APR letter that the State include in its FFY 2002 APR updated monitoring
data.

On page 25 of the FFY 2002 APR, NMDOH reported that one of six providers
monitored was found to be out of compliance with the standard "all
needed services are listed on the IFSP." The chart on page 20 of the FFY
2002 APR indicated that one of ten providers was found to be
noncompliant in the provision of information that families need to
participate in the IFSP process, and one provider was found to be
noncompliant in ensuring that service coordinators conducted an
assessment of the families' resources, priorities and concerns.
Providers found to be noncompliant established corrective action plans
and technical assistance was provided to the providers. The State
completed the strategies it identified in its Improvement Plan to
address this area of noncompliance and OSEP has identified no additional
concerns in this area.

*Provision of Early Intervention Services:* In its 2000 Monitoring
Report, OSEP reported that needed early intervention services were not
always provided (34 CFR §303.342(e)). OSEP's June 29, 2001 letter that
accepted the State's Improvement Plan noted that the State's strategies
included that service coordinators would conduct follow-up activities to
ensure provision of services, and conduct analyses to compare services
provided to those listed on the IFSP. Although the State reported
implementation of its strategies, it noted in its October 2003 progress
report that compliance with this requirement had not yet been achieved.
Specifically, the State noted, "results indicate 76% of families receive
services on their IFSP." The State indicated in that report a range of
10% to 100% but also noted "often a provider agency did not have
adequate documentation that the service was provided."

On pages 24-26 of its FFY 2002 APR, NMDOH included data identifying
early intervention services received by eligible children. The State
reported in its FFY 2002 APR that the CBA measures the standard
"Families receive all services in accordance with their IFSP," which is
monitored through review of progress notes/contact logs and interviews.
Five of six providers were found out of compliance because all early
intervention services were not provided in accordance with the child's
IFSP. Corrective action plans were in place for each agency, and two
provider agencies monitored during the pilot phase had been determined
compliant.

In the next APR (due March 31, 2005), the State must provide: correction
data, technical assistance and corrective action plan summaries from the
five provider agencies that the State identified as being in
noncompliance with the provision of IFSP services. If any of these five
provider agencies have not achieved full compliance with Part C
requirement to provide IFSP services, the State must also include in its
FFY 2003 APR: (1) its analysis of why full compliance has not been
achieved in these agencies; (2) additional or revised strategies,
targets and timelines to ensure compliance as soon as possible; and (3)
a summary of the State's response to and correspondence with each agency
not in compliance, including any sanctions or enforcement actions taken.
Failure to demonstrate full compliance with this requirement by the FFY
2003 APR may result in the State's designation as a "high risk" grantee
for its FFY 2005 Part C grant funds.

*Natural Environment:* OSEP's February 2004 response to the FFY 2001
APR, requested updated information on monitoring of services provided in
the natural environment or evidence that a justification was included on
the IFSP when services were not provided in a natural environment. On
pages 26-27 of its FFY 2002 APR, NMDOH reported the FIT database did not
collect information on whether there was a justification for services
provided in other than a natural environment, but the CBA did monitor
for the justification. CBA monitoring found four of six sites out of
compliance with the justification for placements in other than a natural
environment, but that each of these agencies had a corrective action
plan in place. The performance data provided on page 27 of the FFY 2002
APR indicated that NMDOH has increased the number of children who
receive services in the home or in programs with typically developing
children. In addition, the State rank orders its provider agencies on
natural environments indicators and has strategies to improve
performance in this area. In the next APR, the State must continue to
report and provide updated monitoring data on its efforts to improve
performance and ensure compliance in this area.

*Early Childhood Outcomes:* For the FFY 2001 and FFY 2002 APRs, OSEP
required States to provide information on the percentage of children
participating in the Part C program who demonstrated improved and
sustained functional abilities (in the developmental areas listed in 34
CFR §303.322(c)(3)(ii)). NMDOH reported that it had strong anecdotal
evidence that New Mexico children made developmental gains as a result
of early intervention, but the FIT data system did not collect that
data. The State explained that it had consulted with national experts
and identified four possible methods to obtain the data. The target for
2003 was to establish a baseline for this performance indicator by
developing a methodology for measuring child outcomes. In the FFY 2003
APR, NMDOH must provide its plan to collect and report by the FFY 2004
APR (expected deadline: March 31, 2006) data (whether collected through
sampling, monitoring, or other methods) on the percentage of children
participating in the Part C program who demonstrate improved and
sustained functional abilities in the five developmental areas.

*Early Childhood Transition*

In its January 2000 Monitoring Report and its February 24, 2002 FFY 2001
APR letter, OSEP reported that transition conferences for children
potentially eligible did not occur at least 90 days prior to a child's
third birthday. On pages 31-32 of the FFY 2002 APR, NMDOH reported that
a survey of parents indicated that 84 percent of parents stated that the
conference had been held at appropriate times. In the CBA monitoring for
the sites monitored during this reporting period, NMDOH found that four
sites out of six were noncompliant with the standard for holding the
transition planning conference on time. All of the providers found out
of compliance had a corrective action plan in place during the FFY 2002
APR reporting period and these plans were expected to be completed in
the FFY 2003 APR reporting period.

In the next APR (due March 31, 2005), NMDOH must report on the status of
the corrective action plans in the four provider agencies found out of
noncompliance with the 90-day transition conference requirement during
the FFY 2002 reporting period and include the State's analysis of the
data from the four provider agencies with corrective action plans and a
summary of the completed strategies for those provider agencies.

*Conclusion*

As part of the next APR (due March 31, 2005), NMDOH must submit to OSEP:

1.  the corrective action plan from the fourth site in the first pilot
    (Tresco TOTS);

2.  a summary of the corrective actions taken by, and correction data
    from, the other six sites monitored during FFY 2002 (Mescalero, DSI,
    PB&J, Zia Therapy, Las Cumbres, and Casa Alegre);

3.  a written assurance that all programs in the State that provide Part
    C services were using corrected prior written notice materials
    required by 34 CFR §303.403(b);

4.  a report on its ongoing activities to improve child find efforts in
    the State;

5.  correction data from the three pilot provider agencies that the
    State identified as having completed corrective action plans that
    demonstrate compliance with Part C's 45-day timeline requirement
    (NAPPR, PMS, and Tobosa); and a summary of the correction status and
    any available correction data from the other seven provider
    agencies. (If any of these ten provider agencies have not achieved
    full compliance with Part C's 45-day timeline requirement, the State
    must also include in its FFY 2003 APR: (1) its analysis of why full
    compliance has not been achieved in these agencies; (2) additional
    or revised strategies, targets and timelines to ensure compliance as
    soon as possible; and (3) a summary of the State's response to and
    correspondence with each agency not in compliance, including any
    sanctions or enforcement actions taken.);

6.  the status of correction of the noncompliance related to service
    coordination from the two programs that it monitored during the FFY
    2002 reporting period.;

7.  correction data, technical assistance and corrective action plan
    summaries from the five provider agencies that the State identified
    as being in noncompliance with the provision of IFSP services. (If
    any of these five provider agencies have not achieved full
    compliance with Part C requirement to provide IFSP services, the
    State must also include in its FFY 2003 APR: (1) its analysis of why
    full compliance has not been achieved in these agencies; (2)
    additional or revised strategies, targets and timelines to ensure
    compliance as soon as possible; and (3) a summary of the State's
    response to and correspondence with each agency not in compliance,
    including any sanctions or enforcement actions taken.);

8.  a report and updated monitoring data on its efforts to improve
    performance and ensure compliance in the area of natural
    environments;

9.  its plan to collect and report by the FFY 2004 APR (expected
    deadline: March 31, 2006) data (whether collected through sampling,
    monitoring, or other methods) on the percentage of children
    participating in the Part C program who demonstrate improved and
    sustained functional abilities in the five developmental areas; and

10. a report on the status of the corrective action plans in the four
    provider agencies found out of noncompliance with the 90-day
    transition conference requirement during the FFY 2002 reporting
    period and including the State's analysis of the data from the four
    provider agencies with corrective action plans and a summary of the
    completed strategies for those provider agencies.

Failure to demonstrate compliance with Part C's 45-day timeline (34 CFR
§§303.321(e)(2), 303.322(e)(1), and 303.342(a)) and IFSP service
provision (34 CFR §303.342(e)) requirements by the FFY 2003 APR may
result in the State's designation as a "high risk" grantee for its FFY
2005 Part C grant funds.

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 any questions, please
contact Ginger Johnson at 202-245-7353.

Sincerely,

/s/Patricia J. Guard for

Stephanie Smith Lee

Director

Office of Special

> Education Programs

cc: Andrew Gomm,

Part C Coordinator

[^1]: Although Part C requires that an initial meeting to develop the
    IFSP be held within 45 days, it is our understanding that New Mexico
    requires that the initial IFSP be developed at the initial IFSP
    meeting. While New Mexico is not required to maintain this higher
    standard, its data indicate noncompliance with Part C's 45-day
    timeline requirement.