December 2, 2004

Honorable Jesse Ruiz, Board Chair
Honorable Randy J. Dunn, Interim State Superintendent of Education
State Board of Education
100 North First Street
Springfield, Illinois 62777-0001

Dear Mr. Ruiz and Dr. Dunn:

Two items have come to this Department's attention concerning the manner in 
  which the City of Chicago School District 299 (District 299) is implementing 
  the supplemental educational services (SES) provisions of Title I of the Elementary 
  and Secondary Education Act, as amended by the No Child Left Behind (NCLB) Act. 
  First, District 299 is functioning as an SES provider even though we understand 
  it has been identified by the State for improvement. Provision of SES by districts 
  in improvement status is prohibited under the Title I regulations. Second, District 
  299 has issued two memoranda to potential SES providers proposing minimum service 
  hours and predetermined maximum reimbursement amounts that are not related to 
  the per-child amounts specified by the statute or the actual costs of SES received 
  by a student, terms local educational agencies (LEAs) do not have the authority 
  to impose. The purpose of this letter is to ask the Illinois State Board of 
  Education to investigate these matters and take the steps necessary to ensure 
  that District 299 is implementing the SES requirements consistent with the statute 
  and regulations.

With regard to the first issue, District 299 officials have informed this Department 
  that the LEA is currently operating as an approved SES provider. We understand, 
  however, that District 299 has been identified by the State as in need of improvement. 
  Additionally, in a letter dated October 29, 2004, Superintendent Dunn asked 
  that District 299 be allowed to remain an approved SES provider and in subsequent 
  letters, has asked for the same exception for several other districts. Section 
  200.47(b)(1)(iv)(B) of the Title I regulations prohibits a State from approving, 
  as an SES provider, an LEA that has been identified for improvement, corrective 
  action, or restructuring. As such, I am not granting the exceptions requested 
  by Superintendent Dunn.

Superintendent Dunn argues that few other providers are able to offer bilingual 
  or special education services. The Title I regulations state that if no provider 
  is able to make the services available, with necessary accommodations, to an 
  eligible student with a disability or to make the services available, with necessary 
  language assistance, to an eligible student with limited English proficiency, 
  the LEA would have to provide these services, with necessary accommodations 
  or with necessary language assistance, either directly or through a contract.

From conversations we have had with your staff, we understand that former State 
  Superintendent Robert Schiller notified District 299 on August 6, 2004, of a 
  possible change in the LEA's status as an approved SES provider. In that letter, 
  Illinois told District 299 that it had not made adequate yearly progress (AYP) 
  in 2003 and that, if the district did not make AYP in 2004, the State would 
  remove it from the approved SES provider list. In subsequent conversations we 
  have had with your staff, Illinois has told us that it also informed District 
  299 that based on preliminary 2004 AYP data, the district would be identified 
  for improvement and no longer be an eligible SES provider. In addition to ensuring 
  District 299 is no longer a State-approved provider, the State must also ensure 
  that parents who signed up for the district's program are given the immediate 
  option of selecting another SES provider and require the district to cease offering 
  its SES program as soon as possible, but no later than the start of the second 
  semester of the school year.

While District 299 can continue providing non-SES tutoring to families who 
  are interested in the district's program, the funds spent by the district for 
  its tutoring program cannot be counted toward the 20 percent funding requirement 
  set forth in the statute for SES and transportation for public school choice.

Your staff has also asked what actions a State educational agency (SEA) can 
  take if and when an LEA that has been identified for improvement continues to 
  provide SES. Under the laws that govern programs under which this Department 
  makes funds available to LEAs in a State through, or under the supervision of, 
  a State board or agency, the State board or agency (the SEA) is responsible 
  for ensuring that those programs are properly implemented by the LEAs in the 
  State.

The enforcement mechanisms available to SEAs in carrying out these responsibilities 
  include: (1) withholding approval, in whole or in part, of the application of 
  an LEA until the SEA is satisfied that program requirements will be met; (2) 
  suspending payments to an LEA, in whole or in part, if the SEA has reason to 
  believe that the local agency has failed substantially to comply with program 
  requirements; (3) withhold payments, in whole or in part, if the State finds, 
  after reasonable notice and opportunity for a hearing, that an LEA has failed 
  substantially to comply; and (4) order, in accordance with a State audit resolution, 
  repayment of misspent funds. Sections 432 and 440 of the General Education Provisions 
  Act (20 U.S.C. 1231b-2, 1232c) provide more detailed information on these enforcement 
  mechanisms, including requisite notice and hearing requirements.

With regard to District 299's memoranda to potential SES providers, on August 
  26, 2004, this Department sent a letter to the Chief State School Officer of 
  every State responding to recent inquiries and information the Department had 
  received regarding LEAs' imposition of conditions or requirements for the provision 
  of SES that go beyond those set forth by States as part of their approval processes 
  for SES providers. The letter points out that, under the Title I statute, it 
  is the responsibility of the SEA to develop and apply objective criteria for 
  approval of potential providers based, among other things, on a demonstrated 
  record of effectiveness and to maintain an approved list of providers. The LEA 
  then enters into agreements with approved providers selected by parents. Conditions 
  relating to criteria for approval of a provider are the responsibility of the 
  SEA, and an LEA may not alter, or add to, those criteria. For example, LEAs 
  may not impose additional requirements related to program design, such as requiring 
  SES providers to offer a certain number of hours of service to receive the statutory 
  per-child amount for services, to employ only State-certified teachers as tutors, 
  or to use one-on-one tutoring as their sole delivery mechanism. These types 
  of local interventions in program design are not allowed because they undermine 
  the State's authority to set criteria for the approval of providers and to determine 
  which providers meet those standards. A copy of this letter is enclosed for 
  your information.

Superintendent Dunn's letter of October 29, 2004, states that the Illinois 
  State Board of Education has, on a number of occasions, reached out to the Department 
  of Education for guidance and has not yet received clear direction. My staff 
  and I have had numerous conversations with the former State Superintendent, 
  as well as Chief Executive Officer of Chicago Arne Duncan regarding this issue. 
  I can, of course, provide the dates and substance of those conversations with 
  you if you would like.

Please respond to me within 30 days regarding the results of the Illinois State 
  Board of Education's inquiry and the steps the Board has taken to ensure that 
  District 299 is implementing SES requirements consistent with the NCLB statute 
  and regulations.

| | Sincerely,      
| | ----------------
| |                 
| | /s/             
| |                 
| | Eugene W. Hickok