DMS

REPORT

DIFFERENTIATED MONITORING AND SUPPORT

OFFICE OF SPECIAL EDUCATION PROGRAMS

U.S. DEPARTMENT OF EDUCATION

STATE MONTANA

DATE JANUARY 24, 2023 

IDEA PART C 

CONTENTS

LETTER ...................................................................................................................................1

MONITORING AND IMPROVEMENT ..........................................................................................4

DATA ......................................................................................................................................7

FISCAL MANAGEMENT .........................................................................................................10

DISPUTE RESOLUTION ..........................................................................................................14

APPENDIX .............................................................................................................................18
400 MARYLAND AVE., S.W., WASHINGTON, D.C. 20202-2600 

www.ed.gov

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

Letter

January 24, 2023

By Email

Honorable Charlie Brereton 

Director 

Montana Department of Public Health and Human Services 

111 North Sanders, Room 301 

P.O. Box 4210 

Helena, Montana 59604 

By E-mail: charles.brereton@mt.gov 

Dear Director Brereton: 

The purpose of this monitoring report is to provide a summary of the results of the Differentiated Monitoring 

and Support (DMS) activities conducted by the U.S. Department of Education’s (the Department) Office of 

Special Education Programs (OSEP). As part of its DMS process, States are monitored on their general 

supervision systems which encompass States’ responsibilities to ensure that States and their subgrantees and 

contractors meet the requirements of the Individuals with Disabilities Education Act (IDEA). Those 

requirements include: 1) Improving educational results and functional outcomes for all infants, toddlers, 

children, and youth with disabilities; and 2) Ensuring that public agencies meet the program requirements under 

Parts B and C of IDEA, with a particular emphasis on those requirements that are most closely related to 

improving educational results for infants, toddlers, children, and youth with disabilities. During the DMS 

process1 OSEP examined the State’s policies and procedures and State-level implementation of these policies 

and procedures regarding the following monitoring priorities and components of general supervision: 

• Monitoring and Improvement

• Data including the State Performance Plan/ Annual Performance Report (SPP/APR) 

• Fiscal Management: Single Line of Responsibility

• Dispute Resolution 

This DMS monitoring report summarizes OSEP’s review of IDEA Part C requirements regarding these 

monitoring priorities and components. OSEP conducted phone interviews with representatives from the State’s 

lead agency (LA), the Montana Department of Public Health and Human Services (MT DPHHS), Early 

Childhood and Family Support Division (ECFSD), during the month of January 2021 for the fiscal management 

component and January through March 2022, for four areas: Monitoring and Improvement, Data, Fiscal 

Management and Dispute Resolution. 

1 For additional information on DMS, see Resources for Grantees - DMS. 
Page 2—Lead Agency Director

Additionally, DMS monitoring was conducted virtually on June 7–8, 2022, and an onsite visit occurred on June 

14–16, 2022. OSEP staff met with Wendy Studt, the Part C Coordinator for the Montana Milestones Program, 

the State’s early intervention (EI) program, and other State personnel responsible for implementing the State’s 

general supervision, data, fiscal, and local systems. Montana Milestones oversees five regional early 

intervention service (EIS) providers that are responsible for providing IDEA Part C services to eligible children 

and families. Supervision and support are provided by the State’s program administration staff including, a Part 

C Coordinator, a Part C Supervisor/EI Unit Manager, Program Support Staff, and Fiscal Bureau Chief. In 

addition to staff interviews, OSEP reviewed publicly available information, and ECFSD submitted policies and 

procedures including MT DPHHS Part C Compliance Document (2013), MT DPHHS General Contract 

Template (March 25, 2022), Attachment A to Contract No. (Scope of Work Part C/FES), Part C Early 

Intervention Dispute Resolution Handbook (August 2013), Montana Part C Procedural Safeguards (2013), and 

other related documents. Finally, in order to receive a broad range of perspectives on the State’s system of 

general supervision, OSEP also solicited feedback from a range of stakeholders and local early intervention 

service (EIS) providers.

Based on its review of available documents and information and interviews conducted, OSEP has identified 

eight findings of noncompliance with IDEA requirements at the conclusion of our monitoring activities. OSEP 

is making the following findings, listed below, and described in more detail further in the monitoring report, 

including any required actions. 

Summary of Monitoring Priorities and Outcomes 

MONITORING COMPONENT FINDINGS SUMMARY

1. Monitoring and Improvement 1.1 OSEP finds that DPHSS does not have a system 

reasonably designed to monitor its EIS providers 

to ensure compliance with IDEA Part C 

requirements, such as timely service provision to 

ensure there are no waitlists for services, as 

required under IDEA 34 C.F.R. §§ 303.120(a) 

and 303.700. 

2. Data 2.1 OSEP finds that DPHSS does not have a system 

reasonably designed to collect valid and reliable 

data as needed to report annually to the Secretary 

under 34 C.F.R § 303.702(b)(2) on three of the

indicators established by the Secretary for the 

State performance plans, as required under IDEA 

34 C.F.R. §§ 303.124, 303.224 and 303.701(c). 

3. Fiscal Management: Single Line of 

Responsibility 

3.1 OSEP finds that DPHSS does not have a general 

supervision system reasonably designed to 

monitor its EIS providers to ensure fiscal 

compliance with IDEA Part C, as required under 

34 C.F.R. §§ 303.120(a)(1) and (2) and 

303.700(a) and (b). Specifically, the DPHSS 

monitoring system is not reasonably designed to 
Page 3—Lead Agency Director

MONITORING COMPONENT FINDINGS SUMMARY

identify and verify correction of fiscal 

noncompliance. 

3.2 OSEP finds that DPHHS has failed to monitor its 

EIS providers for compliance as required under 

34 C.F.R. § 303.120(a) for the statewide system 

of payments policy requirements in 

34 C.F.R. §§ 303.520 and 303.521. 

3.3 OSEP finds that DPHHS does not have 

procedures and practices that are reasonably 

designed to ensure the appropriate use of IDEA 

Part C funds as required under 

34 C.F.R. §§ 303.120(a) and 303.205, and the 

OMB Uniform Guidance in 2 C.F.R. Part 200. 

4. Dispute Resolution 4.1 OSEP finds that Montana Milestones’ State 

complaint policies and procedures are 

inconsistent with 34 C.F.R. § 303.434(a). 

Specifically, publicly available documents 

indicate that families must engage in an informal 

process prior to filing a formal State complaint.

4.2 OSEP finds that the State does not maintain a list 

of trained mediators as required under 

34 C.F.R. § 303.431(a)(2). 

4.3 OSEP finds that the State does not ensure hearing 

officers possess knowledge of IDEA Part C 

consistent with 34 C.F.R. § 303.435(a). 

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: Part C Coordinator 

Enclosure: 

DMS Monitoring Report 

Appendix 
OSEP DMS REPORT MONTANA | 2023 PAGE 4 

MONITORING AND IMPROVEMENT

MONITORING AND IMPROVEMENT

Background: 

During OSEP’s monitoring activities, OSEP reviewed the State’s general supervision and monitoring policies 

and procedures. OSEP and Montana Milestones staff discussed the DMS Integrated Monitoring and Sustaining 

Compliance and Improvement protocols, which examines how Montana implements its general supervisory 

responsibilities, including policies and procedures to identify and ensure correction of noncompliance and 

improve educational results and functional outcomes for all infants and toddlers with disabilities. Montana 

Milestones provided OSEP with copies of its monitoring tools and sample reports which demonstrate the 

performance of its recently updated data system. 

Legal Requirements:

To effectively monitor the implementation of Part C IDEA requirements, the State LA must have policies and 

procedures that are reasonably designed to ensure that the State can meet its general supervision responsibilities 

by monitoring its EIS providers as required under 34 C.F.R. §§ 303.120 and 303.700 through 303.702. In 

addition, the State must annually report on the performance of each EIS program as required under 

34 C.F.R. §§ 303.700(a)(2) and 303.702(b)(2). In Montana, each of the five EIS providers are also EIS 

programs for reporting purposes in the State Performance Plan/Annual Performance Report (SPP/APR).

A State’s monitoring responsibilities include monitoring compliance by its EIS programs and providers 

(regardless of whether these programs are support with Federal IDEA Part C funds), to ensure that the State LA 

can effectively carry out its general supervision responsibility under IDEA Part C, consistent with 

34 C.F.R. § 303.120(a)(2). The State must also have in effect a system that includes monitoring and 

enforcement requirements in 34 C.F.R. §§ 303.700 through 303.701 and 303.704. 

See Appendix I for a listing of additional legal requirements.

OSEP Analysis:

As described in the introduction to the Federal fiscal year (FFY) 2020 SPP/APR submitted in February 2022, 

Montana’s general supervision system consists of the following components to identify and correct 

noncompliance in a timely manner and monitor its five EIS providers; a contractor annual report, a data 

verification process, a dispute resolution system, annual determinations and a system of technical assistance and 

professional development. 

OSEP was unable to verify the implementation of these components through the interviews with DPHHS

Montana Milestones staff, and review of State submitted documentation. OSEP found that the State did not 

have accurate and sufficient written policies and monitoring procedures that can help the State LA determine 

whether EIS providers are in compliance with IDEA, including whether IDEA Part C services are being 

implemented as written on the Individualized Family Service Plans (IFSPs). In addition, the State does not have 

a data system that is specific to IDEA Part C reporting requirements and thus State staff are unable to use the 

data system to monitor for compliance.

During OSEP’s interviews with State staff, staff admitted that Montana Milestones lacks a clear set of written 

policies and procedures related to the IDEA Part C monitoring system. As a result of the OSEP monitoring 
OSEP DMS REPORT MONTANA | 2023 PAGE 5 

MONITORING AND IMPROVEMENT

activities, Montana Milestones staff noted that they have begun to develop written policies and procedures to 

memorialize its monitoring activities. 

As explained by staff, Montana Milestones’ monitoring is dependent upon its data system. Montana Milestones’ 

staff explained during interviews the limitations of the data system, the workarounds developed, the lack of 

capacity for comprehensive monitoring, and the State’s inability to monitor the provision of services and verify 

IFSP implementation and compliance by its EIS Providers. The data system limitations have an overall impact 

on Montana Milestone’s ability to effectively monitor its EIS providers. 

Staff elaborated that Montana Milestones monitoring is currently limited to the collection of SPP/APR data 

through its recently adopted data system, MedCompass. Staff further stated that Montana Milestones is not able

to track other timeline requirements, such as service delivery, or monitor other IDEA related requirements in the 

MedCompass system. In conversations with OSEP, Montana Milestones staff admitted they do not have the 

capability to monitor, using the MedCompass system, on the provision of services and other requirements 

beyond those data elements required in the SPP/APR, such as SPP/APR Indicator 1 (timely receipt of services), 

Indicator 7 (45-day timeline), and Indicator 8 (early childhood transition). Furthermore, the data system does 

not allow Montana Milestones to monitor IFSPs to ensure that they include information about the length, 

duration, frequency, intensity, and method of delivering the early intervention services. Montana Milestones 

does not currently have a mechanism, either through MedCompass or otherwise, for ensuring that its EIS 

providers are providing early intervention services consistent with those listed on IFSPs. 

OSEP conducted separate interviews with State staff, the State’s five EIS providers, and parent focus groups. 

As a result of these interviews, and an onsite review of IFSP documents, OSEP staff noted a discrepancy 

between the high levels of compliance reported by the State in its SPP/APR and actual implementation. The 

State has reported in the SPP/APR under Indicator 1 (timely provision of services), 100 percent (FFY 2020) and 

98.21 percent (FFY 2019). Despite the high performance reported in the SPP/APR, parents reported during 

interviews (and OSEP confirmed through file reviews) that they experienced waiting lists for the IDEA Part C 

services listed on eligible infant and toddler’s IFSPs and that families often have to travel long distances to 

receive services.

During interviews with the five EIS providers, staff from two EIS providers reported waiting lists lasting 

between 4-6 months, and in some cases infants and toddlers aged out of the Part C program. This was also 

reflected in the approximately 25 IFSPs OSEP reviewed, which indicated “waiting list” in the service delivery 

section and a date. When OSEP staff asked Montana Milestones about the discrepancy between the SPP/APR 

performance and the actual implementation evidence, State staff noted that the SPP/APR data are self-reported 

by EIS providers. The State staff speculated that the EIS providers may consider services timely if one service 

such as service coordination is timely initiated, even if additional services in the IFSP are not timely initiated. 

The State’s definition for timely services is within 30 days of the IFSP completion and parent consent 

(Montana’s Rules and Regulations, pg. 93). In addition, the MedCompass Part C and Family Education and 

Supports Early Childhood and Family Services Division (ECFSD) Manual outlines the process the EIS 

providers must complete to validate the initiation of services on the IFSP:

• Once the IFSP is completed, the Family Support Specialist (Service Coordinators) will receive a task to 

“Validate the Initiation of Services.” This is a required reporting requirement for Part C of the IDEA to 

ensure the services listed on the IFSP are initiated within 30 days of the completion of the IFSP.

• Access to the Initiation of Services validation is straight from the task itself which will require the user 

to document the actual date the service was initiated. If it is more than 30 days from the completion of 

the IFSP, the user is required to document the reason why the service was initiated late.
OSEP DMS REPORT MONTANA | 2023 PAGE 6

MONITORING AND IMPROVEMENT

• All services identified must be initiated within 30 days. For example, if a member has three services, all 

services must be initiated and, if not, a reason must be documented by service. A child is “yes” if all, 

and “no” if one or more haven’t been initiated. If all of the services that are “no” have the “exceptional 

family reason,” it is still counted as timely. 

Despite the State having documentation which outlines the correct data reporting process, they are not 

monitoring to ensure that the EIS providers are correctly entering this information into the MedCompass system 

and are therefore not timely identifying and verifying the correction of noncompliance of SPP/APR data. To 

meet the data reporting requirements of IDEA sections 616 and 618 (as modified by IDEA section 642) and 

34 C.F.R. §§ 303.124, 303.224 and 303.701(c) and 303.720 through 303.724, the State must have a data system 

that is reasonably designed to collect and report valid and reliable data and information to the Department and 

the public in a timely manner and ensure that the data collected and reported reflects actual practice and 

performance.

Conclusion and Action Required:

OSEP’s analysis is based on the documents and information provided by Montana, and interviews with, 

Montana Milestones. Based on this analysis, OSEP finds that the LA does not have a system reasonably 

designed to monitor its EIS providers to ensure compliance with IDEA Part C requirements. Specifically, 

DPHSS, as the LA, does not have a monitoring system as required by 34 C.F.R. § 303.120, that is reasonably 

designed to identify and correct findings of noncompliance, particularly those requirements related to ensuring 

the timely provision of early intervention services to infants and toddlers with disabilities and their families. It 

does not have policies and procedures that are reasonably designed to ensure that the State can meet: 

1. Its general supervisory responsibility as required in 34 C.F.R. § 303.120. 

2. Its monitoring responsibilities in 34 C.F.R. §§ 303.700 through 303.702, and 

3. Its responsibility to annually report on performance of the State and of each EIS program, as provided in 

34 C.F.R. §§ 303.700(a)(2) and 303.702(b)(2).

Required Actions

Policies and Procedures—within 90 days of the date of this letter the State must submit to OSEP: 

• Updated policies and procedures documenting its process for monitoring its EIS providers on key IDEA 

Part C requirements such as ensuring timely IFSP service provision requirements based on a review of 

child records and all other relevant available data (once the State has resolved its data finding below). 

These policies must reflect that all services (not just service coordination) that are identified on the IFSP 

must be timely initiated and provided. 

Evidence of Implementation—as soon as possible, but no later than one year from the date of this letter:

• The State LA must submit evidence that all five EIS providers were monitored for IDEA Part C 

requirements, including timely service provision and, if a finding was issued, a copy of the monitoring 

report which reports identifies the findings of noncompliance with IDEA Part C requirements, and 

include the one-year timeline for correction. 
OSEP DMS REPORT MONTANA | 2023 PAGE 7 

DATA

DATA

Background:

During OSEP’s monitoring activities, OSEP and Montana Milestones staff discussed the DMS Data and 

SPP/APR protocols, which examine how Montana implements its general supervisory responsibility, including 

how the State collects and reports valid and reliable data in a timely manner. In addition, OSEP reviewed the 

State’s data processing guides including the Family Education and Support (FES) Part C workflows, Part C 

Business Rules, and IFSP Services Report. OSEP also reviewed the sample data extracts, an evaluation table 

document, and other relevant data reports and materials provided by the State. 

During the monitoring calls with OSEP, DPHHS identified the following five data systems currently used in the 

State that are related in some way to the IDEA Part C program:

1. Combined Healthcare Information and Medicaid Eligibility (CHIMES) – Montana Milestones staff use 

this system to search for Medicaid clients (members), to either create a Part C identifier or use the 

already created Part C identifier. This identifier confirms Part C eligibility and triggers the ability for the 

EIS provider to bill Medicaid for Part C services. Providers are not able to bill for Part C services if the 

Part C identifier is not attached to the client. 

2. MedCompass –The MedCompass system is a statewide healthcare management tool designed to enable 

cross-collaboration between providers and clients. Montana Milestones uses the data system to capture 

case management activities such as IFSP referrals, initial intakes, and evaluations. The Part C 

Coordinator and Data Manager have access to enter data into this system. Data is also entered by the 

five EIS providers. 

3. Montana Medicaid Information System (MMIS) – MMIS is an integrated group of procedures and 

computer operations (subsystems) developed to mechanize information retrieval and claims processing 

on a statewide level. While this program is not created for IDEA Part C nor used by Montana Milestones 

staff, EIS providers capture Part C service coordination and related services rendered for purposes of 

billing Medicaid. The system only allows data entry for one date per month for service coordination 

even if they provided service coordination on more than one date per month. EIS providers receive 

training by Montana Medicaid directly. Montana Milestones staff do not use this system. 

4. State Accounting Business Human Resources System (SABHRS) –This is the payment system used by 

the State. Part C staff have “view only” access. The Fiscal Manager uses the SABHR system to pull data 

reports on expenditures. 

5. Agency Wide Accounting and Client System (AWACS) – This data system serves as a bridge between 

MMIS and SABHRS to ensure vendors are in the system. It is a pass-through system that automatically 

processes each evening. 

Legal Requirements:

To meet the data reporting requirements of IDEA sections 616 and 618 (as modified by IDEA section 642) and 

34 C.F.R. §§ 303.124, 303.224 and 303.701(c) and 303.720 through 303.724, the State must have a data system 

that is reasonably designed to collect and report valid and reliable data and information to the Department and 
OSEP DMS REPORT MONTANA | 2023 PAGE 8

DATA

the public in a timely manner and ensure that the data collected and reported reflects actual practice and 

performance.

OSEP Analysis:

As described in the monitoring section and confirmed during interviews with the State, Montana Milestones 

staff explained that the MedCompass data system does not currently have the capabilities to track service 

provision. The State uses the MedCompass system for case management and functions as a tool for collecting 

data for reporting on the SPP/APR indicators. For example, the State staff explained the MedCompass system 

can generate a form to document the initiation of the IFSP process (Indicator C-7: 45-Day timeline) and 

document the IFSP initial date of services (Indicator C-1: timely provision of services). MedCompass is a taskbased system; tasks are generated onto a form to manually validate the initial services (based on service 

initiation date). 

The document the State created from MedCompass captures the initial date of services which the State uses to 

determine if the services were provided within the required 30 days. As stated in the previous section, the 

State’s definition for timely services is considered to be within 30 days of the IFSP completion and parent 

consent (Montana’s Rules and Regulations, pg. 93). If the EIS provider indicates on the form that the services 

were not provided within 30 days, they must explain why the delay occurred and provide the reasons for the 

delay. The completed form is uploaded into the child's file in the MedCompass system.

The issues described during the interviews raise concerns about the validity of the data for SPP/APR Indicators 

C-1 (timely provision of services), C-2 (services in natural environments), and C-7 (45-day timeline). Montana 

Milestones staff did not raise any specific examples of whether other data, such as IFSP meeting dates or 

transition dates, imported incorrectly or if such dates are currently being systematically verified. State staff were 

transparent about lacking a mechanism to validate data entered by EIS providers and acknowledged SPP/APR 

data is likely inaccurate.

Specifically, the information that OSEP staff obtained both from interview with parents and EIS providers as 

well as a IFSP record review raises questions about the accuracy of data regarding timely service initiation and 

provision, natural environments, and 45-day timeline. For example, as discussed in the Monitoring and 

Improvement section, there is a discrepancy between high rates of compliance for Indicator C-1 and the 

existence of waiting lists EIS providers use initiation of service coordination as the measure for timely services 

which doesn’t account for all services listed on a child’s IFSP. 

Similarly, the high percentage reported for natural environments does not appear consistent with the description 

by parents and EIS providers of the need to travel for related services. Parents reported traveling great distances 

to distant cities and neighboring counties requiring long hours traveling at a time each way to obtain services. 

EIS providers confirmed that it is a common occurrence that parents must travel long distances for IFSP 

services based on factors that include a lack of qualified providers in the local area, a lack of qualified providers 

covered by private insurance, and extremely long waiting lists for local qualified providers. Because the State 

does not monitor beyond the collection of EIS providers’ self-reported SPP/APR data, Montana Milestones has 

no mechanism to verify its data or to understand the apparent discrepancies. 

Conclusion and Action Required: 

OSEP’s analysis is based on the documents and information provided by DPHHS, and interviews with, 

Montana Milestones, as the LA. Based on this analysis, OSEP finds that DPHHS as the State LA does not have 

a data system that is reasonably designed to collect and report valid and reliable SPP/APR data for Indicators C1, C-2 and C-7 to the Department and the public in a timely manner and ensures that the data collected and 
OSEP DMS REPORT MONTANA | 2023 PAGE 9

DATA

reported reflects actual practice and performance under 34 C.F.R. §§ 303.124, 303.224 and 303.701(c) and 

303.720 through 303.724. 

Required Actions

Policies and Procedures—within 90 days of the date of this letter the State must submit to OSEP: 

• Procedures the State uses to verify the SPP/APR data for Indicators C-1, C-2 and C-7 that are submitted 

by its EIS providers to the LA as required under IDEA sections 616 and 618 (as modified by IDEA 

section 642) and 34 C.F.R. §§ 303.124, 303.224 and 303.701(c) and 303.720 through 303.724.

Evidence of Implementation—as soon as possible, but no later than one year from the date of this letter:

• The State will provide with its FFY 2022 SPP/APR an explanation of how its data for Indicators C-1, C2 and C-7 are valid and reliable and reflect the measurement. The explanation should include a 

discussion of the methodology used by the State to verify the validity and reliability of the data for C-1 

(the percentage of infants and toddlers with IFSPs who receive all EI services on their IFSPs in a timely 

manner); C-2 (the percentage of infants and toddlers with IFSPs who primarily receive EI services in the 

home or community-based settings); and C-7 (the percentage of infants and toddlers with IFSPs for 

whom an evaluation and initial assessment and an initial IFSP meeting were conducted within Part C’s 

45-day timeline).
OSEP DMS REPORT MONTANA | 2023 PAGE 10 

FISCAL

FISCAL MANAGEMENT

Background:

During OSEP’s monitoring activities, OSEP and Montana Milestones staff discussed the IDEA Part C Single 

Line of Responsibility Fiscal Monitoring protocol. This protocol examines Montana’s role in specific fiscal 

areas including general supervision, monitoring, funding, interagency coordination, and other responsibilities in 

meeting the requirements under Part C of IDEA. OSEP also reviewed the State’s fiscal contract templates, 

sample scopes of work, system of payments, and other relevant fiscal documents provided by the State. In 

accordance with its system of payments on file with OSEP, Montana Milestones accesses private and public 

insurance (Medicaid) with the consent of parents and does not charge family fees.

Legal Requirements:

Under 34 C.F.R. § 303.120(a)(1), each State’s system must include a single line of responsibility in a LA, 

designated or established by the Governor, that is responsible for the general administration and supervision of 

all EIS providers (regardless of whether they receive Federal IDEA funds), to ensure Statewide compliance with 

IDEA Part C requirements. As part of this responsibility, LAs must monitor and enforce the fiscal requirements 

under Part C of the IDEA, including the payor of last resort requirements in 34 C.F.R. §§ 303.500, use of funds 

requirements in 303.501, and the system of payment policies in 303.510, such as use of public benefits or 

insurance or private insurance to pay for Part C services in 34 C.F.R. §§ 303.520 and 303.521. If the LA 

identifies noncompliance, it must ensure that the noncompliance is corrected as soon as possible and in no case 

later than one year after the LA’s identification of the noncompliance consistent with 

34 C.F.R. § 303.120(a)(2)(iv) and 303.700(e). LAs must also monitor for IDEA Part C fiscal requirements 

including monitoring EIS providers for the use of Federal IDEA Part C funds and its distribution within the 

State as required by 34 C.F.R. §§ 303.120(a), and 303.205, as well as the coordination of all available funding 

sources as required by 34 C.F.R. § 303.120(b). 

See Appendix I for a listing of additional legal requirements. 

OSEP Analysis:

OSEP examined the State’s general supervision system and fiscal monitoring activities to ensure that Montana 

Milestones has the necessary fiscal policies, procedures, and authority to verify compliance, issue findings of 

noncompliance, and take appropriate enforcement actions, where required. Montana Milestones is responsible 

for grant management, oversight, and accountability for five EI providers that are contracted to receive Part C 

funds based on the number of infants and toddlers served. 

OSEP also examined the Statewide system which implements the fiscal elements of the single line of 

responsibility under IDEA by interviewing staff from Montana Milestones and the DPHHS Fiscal Staff, as well 

as reviewing the following documents: Montana Part C Compliance Document (July 2013), DPHHS General 

Contract Template (March 25, 2022), Attachment A to Contract No. (Scope of Work Part C/FES), Montana’s 

Part C Program System of Payments (2013), Montana Part C Written Notification for the Use of Private 

Insurance and Public Benefits (2013), Montana Operations Manual (DPHHS Contract Management and PostAward Obligations and Issues Policies, 2020), ECFSD Invoice Processing Steps Graphic and other fiscal related 

policies.
OSEP DMS REPORT MONTANA | 2023 PAGE 11

FISCAL

Montana Milestones contracts2 with five independent organizations (EIS providers) responsible for the 

provision of Part C services. DPHHS utilizes a general contract template for all LA contractors and attaches a 

scope of work specific to each program. The State’s scope of work for EIS providers requires compliance with 

performance-based standards in the provision of services to infants and toddlers and their families. The 

contracts are designed to ensure the accountability of EIS providers in implementing IDEA Part C requirements. 

Under the scope of work, the EIS provider agrees to be available for program compliance and quality reviews 

on an annual basis. Montana Milestones makes annual determinations based solely on performance, results and 

compliance indicators. 

As mentioned in the data section, the LA utilizes a data system called MMIS (Montana Medicaid Insurance 

System) to determine the number of children served by the EIS providers to calculate the bundled rate.

Although MMIS is the State Medicaid system, Montana Milestones use the system for this purpose. The 

Montana Milestones staff, however, have no access to MMIS. EIS provider staff receive training from the LA’s 

Medicaid Office, as Montana Milestones has no role in the oversight of the MMIS data system. Montana 

Milestones staff do not have the authority to certify or verify payments through the MMIS system. In addition, 

LA staff are not given user roles in MMIS, and have no ability to account for payments made from MMIS to 

EIS providers, including being able to account for how funds are spent.

During interviews that OSEP conducted with State staff, and all five EIS providers, as well as document 

reviews, OSEP learned that the State does not conduct fiscal monitoring for IDEA Part C requirements, 

including 34 C.F.R. §§ 303.500 (i.e., use of funds, payor of last resort, system of payments), 303.501(i.e., 

permissive use of funds), 303.510 (i.e., payor of last resort), 303.520 and 303.521 (system of payments). Both 

EIS provider staff and State staff confirmed that DPHHS does not conduct fiscal monitoring of its EIS 

providers. The State also does not monitor EIS provider contracts for IDEA Part C fiscal requirements, as well 

as other cross-cutting fiscal requirements, including applicable provisions in the General Education Provisions 

Act (GEPA), the Education Department General Administrative Regulations (EDGAR) in 34 C.F.R. Part 76, 

and the OMB Uniform Guidance in 2 C.F.R. Part 200. 

Monitoring for IDEA Part C fiscal requirements includes monitoring EIS providers for:

1. Use of Federal IDEA Part C funds and its distribution within the State as required by 

34 C.F.R. §§ 303.120(a), and 303.205, 

2. Coordination of all available funding sources as required by 34 C.F.R. § 303.120(b).

For monitoring of use of Federal IDEA Part C funds, OSEP notes that DPHHS staff failed to provide evidence 

of contractual oversight of EIS providers including the general administration and supervision of EIS programs 

and activities administered by contracted organizations, and EIS providers receiving assistance under Part C of 

the Act as required by 34 C.F.R § 303.120(a)(1). 

Regarding the monitoring of all available funding sources for the IDEA Part C system, OSEP notes that 

DPHHS identified concerns regarding how EIS providers are paid. Specifically, the State is conducting a study

of its bundled rate. In interviews with DPHHS staff, the State shared that Montana established a bundled rate in 

the 1980s to provide comprehensive Part C programming in regions throughout the State. The bundled rate is 

2 The fiscal bureau chief mentioned that the State considers its five EIS providers or programs to be subrecipients, as opposed to 

contractors. In discussions with the State, OSEP informed the State that if DPHHS is going to treat their EIS providers as 

subrecipients, the State will be responsible for conducting subrecipient monitoring in accordance with 2 C.F.R. § 200.332, as well as 

Subpart F. OSEP also recommends that the State obtain technical assistance from OSEP and OSEP funded technical assistance 

centers to support the State as it moves from a system that resembles contract oversight to subrecipient monitoring.
OSEP DMS REPORT MONTANA | 2023 PAGE 12

FISCAL

made up from a combination of State general funds, IDEA Part C funds, and State special revenue (which up 

until this point has not been accessed). The bundled rate is distributed to the State’s five regional EIS providers 

on a reimbursement basis and is based on pre-set contractual tiers based on historical child count data. The 

amount of funding each EIS provider receives from the State is based on the total number of children they serve 

in a given month which is tied to the pre-set contractual tiers established by the State for each contractor. This 

amount can vary, and EIS providers can move up and down tiers, but the amount comes out to approximately 

$500.00 a month/per child.

In stakeholder interviews with the State’s five EIS providers (which are regional) and the State’s Inter-agency 

Coordinating Committee (SICC), participants asserted that the bundled rate was not enough to cover the cost of 

Part C services. While some EIS providers mentioned that they were able to do private fundraising at the local 

level to supplement the bundled rate, other EIS providers noted that they did not have any additional sources of 

income. 

The State was transparent in explaining historical issues with the bundled rate and has plans to conduct a rate 

study to determine the cost of delivering services in the various regions to inform funding structures of the true 

cost of serving infants, toddlers, and families with disabilities in Montana. In addition, the State also noted that 

the current billing system under the bundled rate does not provide Montana Milestones sufficient information to 

determine if the Part C funds are being used in a manner consistent with IDEA Part C and the Uniform 

Guidance.

The State did not provide evidence of oversight of the implementation of its system of payments policy at the 

EIS provider level. During interviews with State staff, on-site file reviews, and a review of documents 

submitted by DPHHS, OSEP was unable to find sufficient documentation or evidence to ensure families had 

been provided a copy of the State’s system of payments or consented for the use of public and/or private 

insurance in accordance with 34 C.F.R. §§ 303.520, and 303.521. While the State did share copies of IFSPs 

(printed from MedCompass) that included a check box for families to consent to the use of private insurance, 

the State was unable to provide any additional documentation associated with the check box. The staff stated 

that EIS providers can upload information associated with all check boxes in MedCompass, but they could not 

access the documents during the site visit. 

OSEP further verified the inconsistent implementation of the system of payments policy during interviews with 

stakeholder groups. During those interviews, at least one parent mentioned paying private insurance co-pays, 

which is inconsistent with the State’s system of payments policy that explicitly states families will not be 

charged fees for co-pays and deductibles. Furthermore, the State was unable to provide sufficient 

documentation or evidence that they performed adequate oversight of its EIS providers for consistent 

implementation of its system of payments policy.

Conclusion and Action Required:

OSEP’s analysis is based on the documents and information provided by Montana, and interviews with, 

Montana Milestones, as the Lead Agency. Based on this analysis, OSEP finds that Montana Milestones: 

1. Does not have a general supervision system that includes policies and procedures reasonably designed to 

monitor its EIS providers to ensure compliance with IDEA Part C fiscal requirements (such as 

coordination of all available funding sources and payor of last resort), as required under 

34 C.F.R. §§ 303.120(a)(1) and (2) and 303.700(a) and (b). Specifically, the DPHSS monitoring system 

is not reasonably designed to identify and verify correction of fiscal noncompliance.
OSEP DMS REPORT MONTANA | 2023 PAGE 13

FISCAL

2. Has failed to monitor its EIS providers for compliance as required by 34 C.F.R. § 303.120(a) for the 

statewide system of payments policy requirements in 34 C.F.R. §§ 303.520, and 303.521.

3. Does not have procedures and practices (such as internal controls to reflect applicable cost principles) 

that are reasonably designed to ensure the appropriate use of IDEA Part C funds as required under

34 C.F.R. §§ 303.120(a) and 303.205, and the OMB Uniform Guidance in 2 C.F.R. Part 200. 

As a result, the State is required to implement the following corrective actions to address the two findings of 

noncompliance identified above.

Required Actions

Policies and Procedures—within 90 days of the date of this letter the State must submit to OSEP: 

1. Revised fiscal monitoring policies and procedures to ensure that the LA has a system in place to identify 

and verify the correction of noncompliance (such as coordination of all available funding sources and 

payor of last resort) as soon as possible and in no case later than one year after the LA's notification of 

the noncompliance as required under 34 C.F.R. §§ 303.120(a)(1) and (2) and 303.700(a) and (b).

2. Revised fiscal monitoring policies that demonstrate how the LA will provide oversight of the State’s 

system of payments as required under 34 C.F.R. §§ 303.120(a), 303.520 and 303.521.

3. Revised fiscal monitoring policies and procedures that demonstrate how the LA will provide oversight 

of the EIS providers use of IDEA Part C funds (including internal controls) as required under 

34 C.F.R. §§ 303.120(a) and 303.205, and the OMB Uniform Guidance in 2 C.F.R. Part 200.

Evidence of Implementation—as soon as possible, but no later than one year from the date of this letter:

1. Evidence of the State’s implementation of its fiscal monitoring policies and procedures such as, 

notification letters, monitoring reports, letters of findings, examples of fiscal finding close-out and 

verification of correction, or other supporting documentation demonstrating oversight of the State’s 

fiscal monitoring as required under 34 C.F.R. §§ 303.120(a)(1) and (2) and 303.700(a) and (b).

2. Evidence of the State’s system of payments practices such as, the process for evaluating the payor 

source, evidence of training to EIS providers, access to insurance, interim payments, or other supporting 

documentation demonstrating oversight of the State’s system of payments as required under 

34 C.F.R. §§ 303.120(a), 303.520 and 303.521. In addition, the State must provide evidence that 

families have been provided a copy of the State’s system of payments policy and have consented, as 

appropriate, for the use of public and/or private insurance.

3. Evidence of the State’s monitoring of its EIS providers use of IDEA Part C funds such as, fiscal 

monitoring reports, and local EIS provider budgets, and fiscal data system procedures/screenshots, 

demonstrating the system’s capacity for oversight of Federal IDEA Part C funds.

Recommendations

As discussed above, the State LA has undertaken a rate study. OSEP recommends that as part of the rate study, 

the State should look at whether its bundled rate is contributing to IDEA Part C service delays or waiting lists or

has had an impact on how IFSP service decisions are made by the IFSP team, including the frequency, duration 

and location of services take place. OSEP further recommends that, as the State makes future decisions about its 

funding system, it ensures that the State LA is able to conduct fiscal monitoring on the use of IDEA funds as 

well as coordinate all available funds used for IDEA Part C services.
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DISPUTE RESOLUTION

DISPUTE RESOLUTION

Background:

During OSEP’s monitoring activities, OSEP and Montana Milestones staff discussed the DMS Dispute 

Resolution protocol which examines how Montana Milestones implements its general supervisory 

responsibility, including how dispute resolution is used to identify and correct noncompliance. 

OSEP reviewed the State’s dispute resolution policies and procedures, dispute resolution manuals, brochures, 

training materials, and other relevant dispute resolution reports and data provided by the State. OSEP notes that, 

in accordance with 34 C.F.R. § 303.430(d)(1), the State has adopted the IDEA Part C due process hearing 

procedures under 34 C.F.R. §§ 303.435 through 303.438 and 303.421(a). 

Legal Requirements:

The State must have reasonably designed dispute resolution procedures and practices if it is to effectively 

implement:

1. The State complaint procedures requirements in 34 C.F.R. §§ 303.432 through 303.434, 

2. The mediation requirements in 34 C.F.R. § 303.431, and 

3. The due process complaint and impartial due process hearing requirements 34 C.F.R. §§ 303.440 

through 303.449. 

Filing a Complaint

An organization or individual may file a signed written complaint under 34 C.F.R. § 303.434, and the complaint 

must include— 

1. A statement that the LA, public agency, or EIS provider has violated a requirement of IDEA Part C,

2. The facts on which the statement is based,

3. The signature and contact information for the complainant; and

4. If alleging violations with respect to a specific child— 

a. The name and address of the residence of the child, 

b. The name of the EIS provider serving the child, 

c. A description of the nature of the problem of the child, including facts relating to the problem, 

and 

d. A proposed resolution of the problem to the extent known and available to the party at the time 

the complaint is filed. 

5. The complaint must allege a violation that occurred not more than one year prior to the date that the 

complaint is received in accordance with 34 C.F.R. § 303.432. 

6. The party filing the complaint must forward a copy of the complaint to the public agency or EIS 

provider serving the child at the same time they file the complaint with the LA.
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DISPUTE RESOLUTION

Qualified Mediators

Under 34 C.F.R. § 303.431(a)(b) the State must maintain a list of individuals who are qualified mediators and 

knowledgeable in laws and regulations relating to the provision of EI services. In addition, the LA must select 

mediators on a random, rotational, or other impartial basis.

Hearing Officers

At a minimum, under 34 C.F.R. § 303.435 a hearing officer must be impartial and must not -

A. Be an employee of the LA or the EIS provider that is involved in the provision of EI services or care of 

the child, and

B. Have a personal or professional interest that would conflict with his or her objectivity in implementing 

the process.

The hearing officer must have knowledge about the provisions of IDEA Part C, including EI services available 

for infants and toddlers with disabilities and their families. The hearing officer must be able to listen to the 

presentation of relevant viewpoints about the due process complaint, examine all information relevant to the 

issues, seek to reach a timely resolution of the due process complaint and provide a record of the proceedings, 

including a written decision. The hearing officer is not an employee of the LA solely because the person is paid 

by the LA to implement the due process hearing procedures or mediation procedures under Part C.

See Appendix I for explanation and listing of legal requirements.

OSEP Analysis:

OSEP engaged in virtual and on-site discussions with Montana Milestones staff regarding Montana’s dispute 

resolution system including their policies and procedures, program administration, program structure, and 

program data for dispute resolution. During the discussions, OSEP covered three main topics as it relates to the 

State’s dispute resolution system including: the State’s mediation, due process, and State complaint procedures. 

OSEP reviewed the State’s 618 dispute resolution data and found that the State has not had any mediation or 

due process hearings filed in the last three years, and only one State complaint filed in 2019. The State 

complaint in 2019 resulted in a finding of noncompliance that was corrected within one year of identification. 

OSEP staff reviewed documents submitted by Montana Milestones and those available on the State’s website. 

The primary documents OSEP reviewed as part of the DMS 2.0 activities included: the Montana Department of 

Health and Human Services, Developmental Disabilities Program Montana Milestones/Part C Early 

Intervention Dispute Resolution Handbook (August 2013), Montana Part C Procedural Safeguards (2013), and 

the Montana Milestones Part C of IDEA Early Intervention Program Understanding the Procedural Safeguards 

for Families (2018). Montana Milestones’ Procedural Safeguards and Dispute Resolution Handbook are 

provided to parents through its five EIS programs, at the time of the initial evaluation, the initial IFSP meeting, 

and then referenced every IFSP meeting thereafter.

During the interview with the State, OSEP and the Montana Milestones staff discussed the State’s “informal” 

State complaint process which allows for the submission of a complaint by a parent either in writing or verbally 

to the Family Support Specialist or the Part C EIS program Manager. OSEP reviewed language3 with the State 

regarding this informal process outlined in the Montana Milestones/Part C Early Intervention Dispute 

3 Language located in: “The Montana Milestones/Part C Early Intervention Dispute Resolution Handbook” (August 2013), pg. 2, and 

“The Rights and Procedural Safeguards Cont.,” pg. 1.
OSEP DMS REPORT MONTANA | 2023 PAGE 16

DISPUTE RESOLUTION

Resolution Handbook (August 2013) and in a document entitled, the “Rights and Procedural Safeguards Cont.”

The language in both documents describes the informal State Complaint process, as an opportunity for parties to 

consent to, and engage in, informal discussions, while exploring solutions to issues raised by the complainant. 

Nothing in IDEA prevents the State from having an informal complaint resolution system. However, the 

language embedded in the State’s documents requires that a parent or complainant must engage in the State’s 

informal process prior to filing a formal State complaint, which is inconsistent with 34 C.F.R. § 303.434.

The Montana Milestones/Part C Early Intervention Dispute Resolution Handbook (August 2013), under the 

heading, “Informal Complaints,” states that, “If an agreement is not readily achieved, families are informed of 

all procedural safeguards and dispute resolution options for resolution.” Montana’s Procedural Safeguard 

document, under the heading “Informal Complaints,” specifies that, “If agreement is not readily achieved, 

parents should be informed of all complaint procedural options and that they may use any option to resolve the 

dispute.” The State reported to OSEP that they do not require the parent to engage in the informal State 

complaint process, prior to filing a formal state complaint. However, State staff acknowledged that the language 

described in the document mentioned above implies a requirement that an informal agreement should be 

pursued before parents can be informed of their right to file a formal complaint. 

In addition, Montana’s Procedural Safeguards also requires that individual complaints involving violations of 

IDEA are to be filed using the State’s informal State complaint mechanism, and the formal state complaint 

process is reserved only for resolving complaints involving systemic issues. The document states that, “When 

two or more parties reach an impasse concerning an early intervention service issue, there are two dispute 

resolution procedures available primarily depending on the type of issue that formed the basis for the 

complaint.” The first set of procedures is the Individual Child Complaint Procedures for resolving disputes 

involving decisions regarding identification, evaluations or placement of the child, or the provision of 

appropriate early intervention services to the child and the child’s family. The other procedure is the State 

(Formal) Complaint Procedure for resolving disputes involving systemic issues that violate the requirements or 

regulations of Early Intervention under the Individuals with Disabilities Act of 2004 (IDEA).

During the Phase 2 on-site visit, Montana staff acknowledged the discrepancies found in their policies and 

procedures and stated that they are in the process of revising the two documents to ensure that they are fully 

consistent with the IDEA requirements in 34 C.F.R. § 303.434. 

Montana Milestones staff also reported that they do not maintain a list of trained mediators as required under 

34 C.F.R. § 303.431(a)(2). The State reported that while it does not have a system in place to ensure a list of 

trained mediators is available, when a request for mediation was made in the past, Montana Milestones utilized 

a mediator associated with Montana’s Part B program. The Part C Coordinator shared that information about 

Part C IDEA requirements have been provided on an “as needed” basis, because the Part B mediators are not 

regularly trained in IDEA Part C requirements. 

As reported in Montana’s 618 data, the State has not had any dispute resolution hearings in the last three years. 

During interviews, Montana Milestones staff, reported that, if the State were to receive a dispute resolution 

hearing request, the State would rely on the Montana Part B Program to secure a Hearing Officer. The State 

does not maintain a list of persons who serve as hearing officers for the Part C program. The State does not 

ensure that hearing officers are knowledgeable about Part C IDEA regulations. Training information is provided 

to the hearing officer by the Montana Milestones staff once the hearing officer is hired.

Conclusion and Action Required:

OSEP’s analysis is based on the documents and information provided by, and interviews with, staff of Montana 

Milestones. Based on this analysis, OSEP finds that:
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DISPUTE RESOLUTION

1. Montana Milestones’ State complaint policies and procedures are inconsistent with 

34 C.F.R. § 303.434(a). Specifically, the documents entitled, “Montana Milestones/Part C Early 

Intervention Dispute Resolution Handbook (August 2013)” and the “Rights and Procedural Safeguards 

Cont.” indicate that families must engage in an informal process prior to filing a formal State complaint. 

Further, OSEP finds that Montana’s Procedural Safeguards (Procedural Safeguards Cont.) indicate that 

individual complaints involving violations of IDEA are to be filed using the State’s informal State 

complaint mechanism, and the formal State complaint process is reserved only for resolving complaints 

involving systemic issues is also inconsistent with 34 C.F.R. § 303.434(a). 

2. Montana Milestones’ mediation policies and procedures are not consistent with the requirements of 

IDEA Part C of the Act. In interviews with DPHSS Staff, the State confirmed that it does not maintain a 

list of trained mediators as required under 34 C.F.R. § 303.431(a)(2). The State must maintain a list of 

individuals who are qualified mediators and knowledgeable in laws and regulations relating to the 

provision of early intervention services. 

3. The State does not ensure hearing officers possess knowledge of IDEA Part C. Hearing officers must 

possess knowledge of Part C and the needs of, and EI services available for, infants and toddlers with 

disabilities and their families, consistent with 34 C.F.R. § 303.435(a). 

Required Actions

Within 90 days of the date of this letter the State must submit to OSEP: 

1. For State complaints:

a. Revised procedural safeguards documents to ensure compliance with Part C requirements 

regarding complaints, under 34 C.F.R. §303.434(a); 

b. A copy of the memo sent to all EIS providers explaining the revised complaint procedures; and 

c. A training schedule for its EIS providers on implementing the revised Montana Milestones 

complaint procedures. 

2. For Qualified Mediators:

a. Policies and procedures that detail the State’s training activities and assurance that their 

mediators are knowledgeable on the Part C IDEA regulations relating to the provision of EI 

services. 

b. A list of individuals who are qualified mediators in the State and available on a random, 

rotational, or other impartial basis.

3. For Hearing Officers:

a. Policies and procedures that demonstrate that the State trains its hearing officers on IDEA Part C 

requirements and the EI services available to infants and toddlers with disabilities and their 

families.

b. Policies and procedures that demonstrate that the State ensures its hearing officers listen to the 

presentation of relevant viewpoints about the due process complaint, will examine all 

information relevant to the issues, will seek to reach a timely resolution of due process 

complaints and provide a record of the proceedings, including a written decision to the LA and 

parties involved in the due process hearing. 
APPENDIX

APPENDIX

Monitoring and Improvement Legal Requirements:

In order to effectively monitor the implementation of Part C of the IDEA, the State must have policies and 

procedures that are reasonably designed to ensure that the State can meet:

1. Its general supervisory responsibility as required in 34 C.F.R. § 303.120. 

2. Its monitoring responsibilities in 34 C.F.R. §§ 303.700 through 303.702, and 

3. Its responsibility to annually report on performance of the State and of each Early Intervention Service (EIS) 

program, as provided in 34 C.F.R. §§ 303.700(a)(2) and 303.702(b)(2). 

A State’s monitoring responsibilities include monitoring compliance by its EIS programs and providers 

(regardless of whether Federal IDEA Part C funds) with the requirements of IDEA Part C, to ensure that the LA 

can effectively carry out its general supervision responsibility under IDEA Part C, consistent with 

34 C.F.R. § 303.120(a)(2). 

Under 34 C.F.R. § 303.700(b), the State’s monitoring activities must primarily focus on:

4. Improving early intervention results and functional outcomes for all infants and toddlers with disabilities; 

and 

5. Ensuring that EIS programs and providers meet the program requirements under Part C of the Act, with a 

particular emphasis on those requirements that are most closely related to improving early intervention 

results for infants and toddlers with disabilities. Improving educational results and functional outcomes for

all children with disabilities.

In exercising its monitoring responsibilities under 34 C.F.R. § 303.700(d), the State also must ensure that when 

it identifies noncompliance with IDEA Part C requirements by EIS programs and providers, the noncompliance 

is corrected as soon as possible, and in no case later than one year after the State’s identification of the 

noncompliance, as required under 34 C.F.R. § 303.700(e). 

Further, under 34 C.F.R. § 303.120 the State must have a system that includes a single line of responsibility in a 

lead agency designated or established by the Governor that is responsible for the following: (1) The general 

administration and supervision of programs and activities administered by agencies, institutions, organizations, 

and EIS providers receiving assistance under Part C of the Act; and the monitoring of programs and activities 

used by the State to carry out Part C of the IDEA (whether or not the programs or activities are administered by 

agencies, institutions, organizations, and EIS providers that are receiving assistance under Part C of the IDEA), 

to ensure that the State complies with Part C of the Act. The State must also have in effect a system that 

includes monitoring and enforcement requirements in 34 C.F.R. §§ 303.700 through 303.701 and 303.704. 

In addition, under 34 C.F.R. § 303.700(a)(1), the State must monitor the implementation of IDEA Part C and 

under 34 C.F.R. § 303.700(a)(4) must report annually on the performance of the State and each EIS program on 

the targets in the State’s Performance Plan. As a part of its monitoring responsibilities under these provisions, 

the LA must use quantifiable and qualitative indicators in the priority areas identified in 34 C.F.R. § 303.700(d) 

and the SPP/APR indicators established by the Secretary, consistent with 34 C.F.R. § 303.700(c). Each State 

also must use the targets established in the State's performance plan under 34 C.F.R. § 303.701 and the priority 

areas described in 34 C.F.R. § 303.700(d) to analyze the performance of each EIS program located in the State. 

34 C.F.R. § 303.702. 
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DISPUTE RESOLUTION

Data Legal Requirements:

To meet the data reporting requirements of IDEA sections 616 and 618 (as modified by IDEA section 642) and 

34 C.F.R. §§ 303.124, 303.224 and 303.701(c) and 303.720 through 303.724, the State must have a data system 

that is reasonably designed to collect and report valid and reliable data and information to the Department and 

the public in a timely manner and ensure that the data collected and reported reflects actual practice and 

performance. 

Fiscal Management Legal Requirements: 

Under 34 C.F.R. § 303.120(a)(1), each State’s system must include a single line of responsibility in a LA, 

designated or established by the Governor, that is responsible for the general administration and supervision of 

all EIS providers (regardless of whether they receive Federal IDEA funds), to ensure Statewide compliance with 

IDEA Part C requirements. As part of this responsibility, LAs must monitor and enforce the fiscal requirements 

under Part C of the IDEA, including the payor of last resort requirements in 34 C.F.R. §§ 303.500 and 303.510 

and the system of payment policies, such as use of public benefits or insurance or private insurance to pay for 

Part C services in 34 C.F.R. §§ 303.520 and 303.521. If the State LA identifies noncompliance, it must ensure 

that the noncompliance is corrected as soon as possible and in no case later than one year after the LA’s 

identification of the noncompliance consistent with 34 C.F.R. § 303.120(a)(2)(iv) and 303.700(e). Further, 

under 2 C.F.R. § 200.303, the LA must establish effective internal controls that provide reasonable assurance of 

compliance with “Federal statutes, regulations, and the terms and conditions of the Federal award,” and the LA 

must monitor its compliance with the requirements of the Federal award.

Dispute Resolution Legal Requirements:

Under 34 C.F.R. § 303.421(a), the State must ensure that prior written notice is provided to parents a reasonable 

time before the EIS provider proposes or refuses to initiate or change the identification, evaluation or placement 

of the infant or toddler or the provision of early intervention services. Under 34 C.F.R. § 303.421(b), this notice 

must be in sufficient detail to inform parents about the dispute resolution procedures. 

The State must have reasonably designed dispute resolution procedures and practices if it is to effectively 

implement:

1. The State complaint procedures requirements in 34 C.F.R. §§ 303.432 through 303.434; 

2. The mediation requirements in 34 C.F.R. § 303.431; and 

3. The due process complaint and impartial due process hearing requirements 34 C.F.R. §§ 303.440 through 

303.449. 

State Complaint Procedures

Under 34 C.F.R. § 303.432, each LA must adopt written procedures for resolving any complaint, including a 

complaint filed by an organization or individual from another State, that meets the requirements of 

34 C.F.R. § 303.434. Under 34 C.F.R. § 303.434, the complaint, among other requirements, must be signed and 

written and contain a statement alleging that a public agency has violated a requirement of Part C of the Act or 

the Part C regulations including the facts on which the statement is based. Under 34 C.F.R. § 303.434(c), the 

complaint must allege a violation that occurred not more than one year prior to the date that the complaint is 

received. Under 34 C.F.R. § 303.433(a), the minimum State complaint procedures must include a time limit of 

60 days after the complaint is filed to:

1. Carry out an onsite investigation, if the LA determines that an investigation is necessary. 
OSEP DMS REPORT MONTANA | 2023 PAGE 20

DISPUTE RESOLUTION

2. Give the complainant the opportunity to submit additional information, either orally or in writing, about the 

allegations in the complaint;

3. Provide the public agency with the opportunity to respond to the complaint, including, at a minimum—

a. At the discretion of the public agency, a proposal to resolve the complaint; and

b. An opportunity for a parent who has filed a complaint and the public agency to voluntarily engage in 

mediation consistent with 34 C.F.R. § 303.431;

4. Review all relevant information and make an independent determination as to whether the public agency is 

violating a requirement of Part C of the Act or of this part; and

5. Issue a written decision to the complainant that addresses each allegation in the complaint and contains—

a. Findings of fact and conclusions; and

b. The reasons for the LA’s final decision.

Under 34 C.F.R. § 303.433(b)(1), the State’s procedures must permit an extension of the 60-day time limit only 

if:

1. Exceptional circumstances exist with respect to a particular complaint, or

2. The parent (or individual or organization, if mediation or other alternative means of dispute resolution is 

available to the individual or organization under State procedures) and the public agency involved agree to 

extend the time to engage in mediation under 34 C.F.R. § 303.433(a)(3)(ii), or to engage in other alternative 

means of dispute resolution, if available in the State.

Mediation

Under 34 C.F.R. § 303.431(a), each LA must ensure that procedures are established and implemented to allow

parties to dispute involving any matter under this part, including matters arising prior to the filing of a due 

process complaint, to resolve disputes through a mediation process. Under 34 C.F.R. § 303.431(b)(1), the 

State’s procedures must ensure that the mediation process—

1. Is voluntary on the part of the parties;

2. Is not used to deny or delay a parent’s right to a hearing on the parent’s due process complaint, or to deny 

any other rights afforded under Part C of the IDEA; and

3. Is conducted by a qualified and impartial mediator who is trained in effective mediation techniques.

Under 34 C.F.R. § 303.431(c)(1)(i)–(ii), an individual who serves as a mediator may not be an employee of the 

LA or an EIS provider that is involved in the provision of early intervention services or other services to the 

child and may not have a personal or professional interest that conflicts with the person’s objectivity.

Due Process Complaint and Hearing Procedures

Under 34 C.F.R. § 303.430(d)(1), the State must provide a means of filing a due process complaint regarding 

any matter listed in 34 C.F.R. § 303.421(a). Under 34 C.F.R. § 303.437(b) each LA must ensure that, not later 

than 30 days after the receipt of a parent’s due process complaint, the due process hearing required under Part C 

is completed and a written decision mailed to each of the parties. A hearing officer may grant specific 

extensions of time beyond the period set out in 34 C.F.R. § 303.437(b) at the request of either party. Any party 

aggrieved by the findings and decision issued pursuant to a due process complaint has the right to bring a civil 

action in State or Federal court under section 639(a)(1) of the Act. 34 C.F.R. § 303.438.