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October 21, 2009

Dear Colleagues:

As a result of the  enactment of the American Recovery and Reinvestment Act (ARRA), States are receiving  a large increase in fiscal year (FY) 2009 Individuals with Disabilities  Education Act (IDEA), Part B funds.  This  increase in special education funding under the ARRA represents an unprecedented opportunity to improve  outcomes for students with disabilities, and to advance systemic reforms that  will have a lasting impact.  This is  particularly true for those local educational agencies (LEAs) that, at least in prior years, have not been  in “meets requirements” status under the monitoring and accountability  provisions in section 616 of the IDEA.   In recent guidance specifically related to ARRA, the Department has identified many possible uses of IDEA, Part B ARRA funds that are  likely to have an impact on student learning outcomes and school reform (see: http://www.ed.gov/policy/gen/leg/recovery/guidance/idea-b-reform.pdf).

Because of this  increase, most LEAs will receive approximately  twice the amount of IDEA, section 611 funds in FY 2009 that they received in FY  2008.  This unparalleled increase in  funding has resulted in heightened interest in the possibility of taking  advantage of the flexibility provided for in section 613 of the IDEA*.*Under  section 613(a)(2)(C), LEAs that have been determined by their State to be in “meets  requirements” status under section 616 of the IDEA may reduce local spending on  special education by an amount equal to up to 50 percent of the increase in  their Part B allocation and use those funds to carry out activities authorized  under the Elementary and Secondary Education Act of 1965 (ESEA).  It has come to my attention that some States may  be changing their determinations simply so that additional LEAs would qualify  to reduce their maintenance of effort (MOE).   I am concerned about States lowering their standards for these  determinations, particularly since it enables LEAs that have not met previously  established performance targets to reduce spending on special education.

Under section 616 of  the IDEA, States are required to make annual determinations about the  performance of the LEAs using the categories of “meets requirements,”  “needs assistance,” “needs intervention,” and “needs substantial  intervention.”  Under section 616(f) (34  CFR §300.608(a)), if in making its annual determinations, a State educational  agency (SEA) determines that an LEA is not meeting the requirements of Part B,  including meeting targets in the State’s performance plan, the SEA *must* prohibit that LEA from reducing its  MOE under IDEA section 613(a)(2)(C) for any fiscal year.

The Department currently requires SEAs, in making these annual  LEA determinations, to use indicators that relate directly to LEA compliance  with IDEA requirements, such as those addressing timely evaluations; disproportionate  representation based on race and ethnicity in special education and related  services that is the result of inappropriate identification; early childhood  and secondary school transitions; as well as whether the LEA provided valid,  reliable, and timely data on all of the indicators, among other factors.  However, SEAs also have the option of using  indicators related to LEA performance in other critical areas, such as  graduation rates or performance on assessments, in determining which LEAs will  achieve “meets requirements” status.  As  part of its monitoring responsibilities, the Office of Special Education  Programs has been reviewing how States make LEA determinations, and will  continue to do so.

While I understand that many LEAs want the flexibility to  reduce local, or State and local, special education funding to free up those funds  for activities authorized under the ESEA, I urge States to maintain high  standards and not compromise the section 616 determination process.  It is each State’s responsibility to ensure  that this process is implemented in a rigorous manner, with a focus on improving  results for students with disabilities and ensuring that appropriate special  education and related services are provided.  I strongly advise States not to eliminate consideration  of important performance indicators (such as graduation rates or performance on  assessments) in making these determinations.   I believe that these performance indicators are valuable measures of the  overall success of an agency’s efforts to provide high-quality special  education services to children with disabilities.  Finally, I strongly encourage States to  further the transparency of the determinations process by informing the public  of the criteria used in making LEA determinations and the determination category  of each LEA in the State by posting this information on the SEA’s Internet Web  site.



| | Sincerely, 
| | -----------
| | /s/        
| | Arne Duncan