July 3, 2006

Dr. Rafael Aragunde Torres

Secretary of Education

Puerto Rico Department of Education

P.O. Box 190759

#### San Juan, Puerto Rico 00919-0759

Dear Secretary Torres:

This is to inform you that we have conditionally approved Puerto Rico's
Eligibility Documents, including assurances and certifications, for
Federal Fiscal Year (FFY) 2006 under Part B of the Individuals with
Disabilities Education Act (IDEA). Our determination that you are
eligible for conditional approval is based on our receipt of the State's
application submitted by the Puerto Rico Department of Education (PRDE)
to the U.S. Department of Education, Office of Special Education
Programs (OSEP), on April 21, 2006 and as amended on June 1, 2006 (Use
of Funds Form) in which it assures that it will:

1.  Operate consistent with the Part B requirements of PL 108-446 and
    applicable regulations; and

2.  Make such changes to existing policies and procedures as are
    necessary to bring those policies and procedures into compliance
    with the requirements of Part B of the IDEA, as amended, as soon as
    possible, and not later than July 1, 2007. Section II of the State's
    application (which is incorporated by reference and enclosed with
    this grant letter) identifies the IDEA statutory sections for which
    the State needs to amend policies and procedures and the timelines
    by which the State will amend its policies and procedures in order
    to comply with Part B of the IDEA. Within Section II, the State has
    included the date by which it expects to complete necessary changes
    associated with any policies and procedures that are not yet in
    compliance with the requirements of Part B of the IDEA, as amended.

In a July 5, 2005 letter to OSEP, PRDE assured OSEP that as soon as
possible, but no later than July 1, 2006, Puerto Rico would revise and
finalize the interagency agreement between the Department of Health and
the Department of Education to coordinate Parts C and B of the IDEA to
address early childhood transition requirements and the requirements of
34 CFR §300.142 of the Individuals with Disabilities Education Act
(IDEA) and its implementing regulations, and provide the Secretary with
a copy of the revised documents showing those changes. On December 24,
2005, OSEP received the October 14, 2005 revised and signed Interagency
Agreement amendments from the Puerto Rico Department of Health and PRDE.
The documentation submitted demonstrates that PRDE has met the
assurances provided in the July 5, 2005 letter.

As set forth in Enclosure D, on June 2, 2006, the Department wrote to
Puerto Rico and indicated that the Department was imposing [Special
Conditions]{.underline} on all its grants to Puerto Rico based upon the
lack of progress under the 2004 Compliance Agreement. Therefore, the
Puerto Rico FFY 2006 IDEA Part B grant awards are being released subject
to Department-wide FFY 2006 [Special Conditions]{.underline}.

OSEP is also imposing programmatic [Special Conditions]{.underline} on
the State's FFY 2006 grant awards under Part B, pursuant to the
Department's authority, at 34 CFR §80.12, to designate "high-risk"
grantees. The basis for this designation is PRDE's continuing failure to
report publicly and to the Secretary on the participation and
performance of children with disabilities in State and district-wide
assessments, including alternate assessments, as required by 20 U.S.C.
§1412(a)(16) (2004)[^1] and by the [FFY 2005 Special
Conditions]{.underline} attached to PRDE's August 19, 2005 Part B grant
awards. OSEP also is imposing new programmatic [Special
Conditions]{.underline} on the State's FFY 2006 grant awards based on
PRDE's continued lack of progress in complying with the requirements of
34 CFR §300.661 to ensure that written complaint decisions are issued
within 60 days of the receipt, unless the timeline is extended due to
exceptional circumstances that exist with respect to a particular
complaint. In making this determination, OSEP relied, in part, on PRDE's
December 2005 State Performance Plan (SPP) submission and the progress
reports submitted on January 13, 2006 and May 26, 2006.[^2] In addition,
in OSEP's April 4, 2006 response to PRDE's SPP submission, OSEP noted
that PRDE's failure to demonstrate compliance with the [FFY 2005 Special
Conditions]{.underline} and that a failure to report progress in
reducing the backlog of unresolved complaints, could affect Puerto
Rico's FFY 2006 grant award. The specific reasons for this designation
and the specific conditions are further detailed in Enclosure E.

PRDE must administer these awards both in keeping with the applicable
provisions of Federal law and regulations and the [Special
Conditions]{.underline} in Enclosures D and E, attached to the grant
award document. Acceptance by PRDE 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 2006 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 2006-2007 and
are available for obligation by States from July 1, 2006 through
September 30, 2008.

Please note that as part of your Eligibility Documents for FFY 2006,
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 policies and procedures
needed to comply with Part B of the IDEA, must meet the applicable
public participation requirements, including those in 20 U.S.C.
1232d(b)(7).

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 2006. Of the \$10,582,960,540 appropriated for
Section 611 in FFY 2006, \$5,158,760,540 is available for awards on July
1, 2006, and \$5,424,200,000 will be available on October 1, 2006.

For FFY 2006, the final appropriations for the Grants to States program
and the Preschool Grants program represent a slight decrease below the
amounts for FFY 2005. The IDEA specifies how funds are allocated under
these programs when the amounts appropriated are less than for the prior
Federal fiscal year. At the level of decrease for the Grants to States
program, each State is first allocated the amount it received for FFY
1999. The remaining funds are allocated based on the relative amount of
the increase in funding that the State received between FFYs 1999 and
2005, as compared to the total of such increases for all States. At the
level of decrease for the Preschool Grants program, each State is first
allocated the amount it received for FFY 1997. The remaining funds are
allocated based on the relative amount of the increase in funding that
the State received between FFYs 1997 and 2005, as compared to the total
of such increases for all States.

Enclosure B provides a short description of how Section 611 funds were
allocated and how those funds can be used. In addition, Table I in
Enclosure B shows funding levels for distribution of Section 611 funds
and the parameters for within-State allocations. Table II in Enclosure B
shows your State-specific information for within-State distribution of
611 funds based on your State's application. If you disagree with the
information in Enclosure B Table II, notify your State contact
immediately.

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

Section 611(e)(1)(C) of the IDEA provides that \"\[p\]rior to
expenditure of funds under this paragraph \[section 611(e)(1) concerning
funds for State administration\], the State shall certify to the
Secretary that the arrangements to establish responsibility for services
pursuant to section 612(a)(12)(A) are current.\" We read this provision
to mean that if a State does not have interagency agreements or other
arrangements in place to establish responsibility for the provision of
services, the State may not expend funds available to the State under
section 611(e)(1) \[State administration funds\] until the State has
these agreements or arrangements in place.

Under section 608(a) of the IDEA, each State that receives funds under
Part B is required to inform in writing local educational agencies
located in the State of any State-imposed rule, regulation, or policy
that is not required by IDEA or Federal regulations (20 U.S.C.
1407(a)(2)). A State may use the same list of State-imposed rules,
regulations and policies that it was required to submit to the
Department in Section IV of its Part B application for this purpose.

The enclosed grant award for FFY 2006 is made with the continued
understanding that this Office may, from time to time, require
clarification of information within your application, if necessary.
These inquiries are needed to allow us to appropriately carry out our
administrative responsibilities related to Part B.

Section 604 of the IDEA provides that "\[a\] State shall not be immune
under the eleventh amendment to the Constitution of the United States
from suit in Federal court for a violation of this Act." Section 606
provides that each recipient of assistance under IDEA make positive
efforts to employ and advance in employment qualified individuals with
disabilities. Therefore, by accepting this grant a State is expressly
agreeing as a condition of IDEA funding to a waiver of Eleventh
Amendment immunity and to ensuring that positive efforts are made to
employ and advance employment of qualified individuals with
disabilities.

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

> Sincerely,
>
> /s/ William J. Wolf for

###### Alexa Posny, Ph.D.

> Director

Office of Special Education Programs

Enclosures

######### Enclosure A

Enclosure B

Enclosure C

Enclosure D

> Enclosure E

cc: Myrta Reyes

Acting Director

[^1]: Title I of the Elementary and Secondary Education Act, as amended
    by the No Child Left Behind Act of 2001, also includes a number of
    requirements related to including children with disabilities in
    State assessment programs and reporting on their participation and
    performance on regular and alternate assessments that in many
    instances are more specific than requirements in the IDEA. For
    example, the Title I regulations require, at 34 CFR §200.2(b)(3) and
    (4), that all State assessments must, "(3)(i) Be aligned with the
    State\'s challenging academic content and student academic
    achievement standards; and (ii) Provide coherent information about
    student attainment of those standards. (4)(i) Be valid and reliable
    for the purposes for which the assessment system is used; and (ii)
    Be consistent with relevant, nationally recognized professional and
    technical standards." This letter does not, and should not be
    interpreted to, address Puerto Rico's compliance with requirements
    of Title I.

[^2]: In our April 4, 2006 letter, OSEP required that PRDE submit a
    Progress Report on previously-identified areas of noncompliance
    prior to the FFY 2006 Grant Award. OSEP will address the other data
    included in PRDE's May 26, 2006 Progress Report under separate
    cover.