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The Department of Education’s mission is to promote student achievement and preparedness for global competitiveness by 

fostering educational excellence and ensuring equal access.

UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

OFFICE OF SPECIAL EDUCATION PROGRAMS

DIRECTOR

October 12, 2023 

By Email

Honorable Michael Rice

State Superintendent of Education 

Michigan Department of Education 

608 W. Allegan Street 

P.O. Box 30008 

Lansing, Michigan 48909 

Email: RiceM6@michigan.gov

Dear Superintendent Rice: 

The purpose of this letter is to provide an update on the status of the findings and corrective actions identified 

by the U.S. Department of Education’s (the Department) Office of Special Education Programs (OSEP) 

reported in the Differentiated Monitoring and Support (DMS) monitoring report dated June 26, 2020. 

This letter responds to the Michigan Department of Education’s (MDE) April 5, 2021, September 27, 2021, 

November 16, 2022, and March 8, 2023, electronic mail correspondence to OSEP to address the corrective 

actions noted in the June 26, 2020, DMS report. These findings and corrective actions were identified as result 

of the DMS activities conducted by OSEP during its on-site visit which occurred the week of 

September 16, 2019. 

Based on a review of all the submitted documents, OSEP is closing the remaining findings identified in the June 

26, 2020, monitoring report, and no further actions are required at this time. The summary of monitoring 

priorities and outcomes chart includes the monitoring component, finding, required actions, OSEP analysis, and

status of finding(s) based on the evidence received by OSEP to date. Please note that review of the 

implementation of MDE’s corrective actions to determine if they were, in fact, implemented properly may 

occur during future reviews of your Federal education programs. Also, be aware that failure to implement the 

corrective actions may result in additional enforcement actions.

We appreciate your efforts to ensure compliance and improve results for children with disabilities. If you have 

any questions, please contact your OSEP State Lead. 

Sincerely,

Valerie C. Williams

Director

Office of Special Education Programs

cc: State Director of Special Education
MICHIGAN PART B 1 | Page

SUMMARY OF MONITORING PRIORITIES AND OUTCOMES

MONITORING COMPONENT &

FINDING REQUIRED ACTIONS OSEP ANALYSIS AND COMMENTS

NEXT STEPS/REQUIRED 

ACTIONS/STATUS

Fiscal Management

1. MDE does not have internal 

controls, including 

comprehensive policies and 

procedures guiding its risk 

assessment and related 

tiered fiscal monitoring. 

OSEP has determined that 

MDE is in noncompliance 

with the requirements in 

2 C.F.R. §§ 200.303(c) and 

200.303(d). 

Within 120 days of the date of 

the letter accompanying this 

enclosure, MDE must submit: 

Policies and procedures 

directing MDE’s risk 

assessment and related tiered 

approach to fiscal monitoring 

(including annual process). 

Those policies and procedures 

should contain sufficient 

detail to address the 

requirements for internal 

controls in 

2 C.F.R. § 200.303. 

On November 16, 2022, and March 8, 2023, 

MDE submitted policies and procedures that, if 

implemented, are reasonably designed to 

ensure that a risk assessment and related tiered 

monitoring activities are performed each year. 

Specifically, MDE provided its Michigan 

Department of Education Program Fiscal 

Monitoring Manual, which includes sections 

devoted to Fiscal Risk Assessment Overviews, 

and Program Finance Monitoring Plans. These 

sections describe internal controls activities 

that are aligned with the conditions cited in this 

findings, and related Federal requirements. 

Based on a review of MDE’s policies and 

procedures, OSEP has determined that MDE 

has developed internal controls including a risk 

assessment and fiscal monitoring processes that 

meet the standards in 2 C.F.R. § 200.303. No 

further actions are required. 

CLOSED

Fiscal Management

2. OSEP has concluded that, 

when utilized, the MDE’s 

PFR on-site monitoring 

process appears to be 

reasonably designed to 

provide fiscal oversight and 

ensure that IDEA subawards 

are used for authorized 

purposes, in compliance 

with Federal statutes, 

regulations, and the terms of 

and conditions of the 

Within 120 days of the date of 

the letter accompanying this 

enclosure, MDE must submit: 

Documentation supporting the 

implementation of MDE’s 

FFY 2020 tiered monitoring 

activities, as determined by 

the risk assessment MDE 

utilized for its FFY 2019 

subgrants. MDE’s monitoring 

activities should ensure that 

IDEA subawards are used for 

authorized purposes, in 

On November 16, 2022, and March 8, 2023, 

MDE submitted documentation supporting the 

implementation of MDE’s FFY 2021-tiered 

monitoring activities, as determined by the risk 

assessment MDE utilized for its FFY 2021 

subgrants. Specifically, MDE provided a copy 

of its FFY 2021 risk assessment, including risk 

scores and a related level of program fiscal 

review for each of its 56 intermediate school 

districts (ISDs). MDE further provided 

examples of documentation related to its fiscal 

monitoring, including announcement letters, 

document request, completed questionnaires 

CLOSED

OSEP notes that adequate 

staffing is necessary in order 

to effectively implement and 

sustain MDE’s tiered system 

of monitoring. During 

OSEP’s monitoring, and 

subsequent calls with MDE, 

OSEP notes that changes in 

key staff, and staffing 

shortages were barriers to the 

timely correction of this 
MICHIGAN PART B 2 | Page

MONITORING COMPONENT &

FINDING REQUIRED ACTIONS OSEP ANALYSIS AND COMMENTS

NEXT STEPS/REQUIRED 

ACTIONS/STATUS

subaward. However, as 

reported above, the MDE 

did not carry out the tiered 

monitoring activities 

directed by MDE’s risk 

assessment, in FFY 2019. 

compliance with Federal 

statutes, regulations, and the 

terms and conditions of the 

subaward; and that subaward 

performance goals are 

achieved as required by 

2 C.F.R. § 200.331(d), and 

34 C.F.R. §§ 300.149 and 

300.600. 

and monitoring protocols, monitoring report, 

and closeout letter for a Tier 2 and Tier 3 

review. MDE also provided documentation 

supporting its Tier 1 Confirmation of 

Expenditures, and general ledger reviews, and 

a copy of the technical assistance tracker that 

MDE used to document training and support to 

ISDs on a variety of fiscal topics. Finally, 

MDE provided OSEP with documentation 

supporting its resolution of IDEA-related 

Single Audit findings from its ISDs. 

Based on the information provided, OSEP has 

determined that MDE has implemented a 

system of monitoring activities that are 

reasonably designed to ensure that IDEA 

subawards are used for authorized purposes, in 

compliance with Federal statutes, regulations, 

and the terms and conditions of the subaward; 

and that subaward performance goals are 

achieved as required by 2 C.F.R. § 200.331(d), 

and 34 C.F.R. §§ 300.149 and 300.600. No 

further actions are required. 

finding. 

Fiscal Management

3. MDE disclosed that, since 

initially providing those 

subrecipients with IDEA 

subgrants using the formula 

described in 

34 C.F.R. § 300.705 for 

base, population, and 

poverty, MDE has not 

consistently allocated 

remaining funds in 

accordance with the 

Within 120 days of the date of 

the letter accompanying this 

enclosure, MDE must submit: 

Documentation demonstrating 

that any subrecipient that 

received less than the amount 

of IDEA Section 611 funds to 

which it was entitled in FFY 

2018 and/or FFY 2019 was 

made whole, or a plan 

outlining how MDE will make 

these subrecipients whole 

On September 27, 2021, MDE submitted 

documentation supporting the actions taken to 

address this finding and make whole those 

ISDs that did not receive full funding in FFY 

2018 and 2019. Specifically, MDE provided 

Update of State Agency Allocations tables, and 

screenshots from the Michigan’s Electronic 

Grants Management System Plus (MEGS+) 

demonstrating that corrections were made for 

any subrecipient that received less than the 

amount of IDEA Section 611 funds to which it 

was entitled in FFY 2018 and FFY 2019. MDE 

CLOSED
MICHIGAN PART B 3 | Page

MONITORING COMPONENT &

FINDING REQUIRED ACTIONS OSEP ANALYSIS AND COMMENTS

NEXT STEPS/REQUIRED 

ACTIONS/STATUS

requirements in 

34 C.F.R. § 300.705(b)(3). 

OSEP has determined that 

MDE is in noncompliance 

with the requirements above 

and has determined that 

MDE is in noncompliance 

with the requirements in 

34 C.F.R. § 300.705(b)(3). 

during FFY 2020, in 

accordance with 

34 C.F.R. § 300.705. 

noted that adjustments were made using State 

set-aside funds, and that no ISDs were asked to 

return IDEA funds for FFY 2018 and FFY 

2019. 

Based on a review of the documentation 

submitted, OSEP has determined that MDE has 

made whole subrecipients that received less 

than the amount of IDEA Section 611 funds to 

which they were entitled in FFY 2018 and FFY 

2019. No further actions are required. 

Fiscal Management

4. MDE disclosed that, since 

initially providing those 

subrecipients with IDEA 

subgrants using the formula 

described in 

34 C.F.R. § 300.705 for 

base, population, and 

poverty, MDE has not 

consistently allocated 

remaining funds in 

accordance with the 

requirements in 

34 C.F.R. § 300.705(b)(3). 

OSEP has determined that 

MDE is in noncompliance 

with the requirements above 

and has determined that 

MDE is in noncompliance 

with the requirements in 

34 C.F.R. § 300.705(b)(3). 

Within 120 days of the date of 

the letter accompanying this 

enclosure, MDE must submit: 

Revised policies and 

procedures ensuring that, 

prospectively MDE will 

allocate IDEA Part B Section 

611 subgrants to all eligible 

subrecipients in accordance 

with 34 C.F.R. § 300.705. 

On April 5, 2021, MDE submitted 

documentation, including its Michigan 

Department of Education Office of Special 

Education Policies and Procedures for IDEA 

Part B Section 611 Subgrants to All Eligible 

Subrecipients (Flowthrough) in Accordance 

with 34 C.F.R. § 300.705. Those procedures 

describe MDE’s annual processes for ensuring 

the accuracy of allocations to its ISDs. 

Based on a review of MDE’s policies and 

procedures OSEP has determined that MDE 

has policies and procedures that are reasonably 

designed to ensure the accurate allocation of 

IDEA Part B 611 subgrants to all eligible 

subrecipients in accordance with 

34 C.F.R. § 300.705. No further actions are 

required. 

CLOSED