Legislation and Guidance
- OCFO to Undertake Cross Cutting Fiscal Monitoring of States
- Emergency Supplemental Hoards Congressional Calendar
- Budget Resolution Delayed
- Farm Bill Advances
- “New” Title V Guidance
- Proposed IDEA Amendments
News
Legislation and Guidance
OCFO to Undertake Cross Cutting Fiscal Monitoring of States
At the National Grants Management Forum conducted by Brustein & Manasevit in Washington, DC last week, Phil Maestri, Director of the Risk Management Team in the Office of the Secretary of the U.S. Department of Education, announced a significant shift in monitoring responsibilities. Phil Maestri stated that the Office of the Chief Financial Officer (OCFO) will be conducting cross cutting fiscal monitoring of State Educational Agencies (SEA). On the basis of prior OCFO monitoring under Title III, Brustein & Manasevit expects this change to lead to more invasive reviews of SEA internal controls, including cash management, procurement, time and effort, and inventory. James Evans from OCFO will provide more specifics on this initiative in the next few weeks. The firm has invited Mr. Evans to our Fall Forum, December 4 and 5 in Las Vegas, to address the direction his office will take on fiscal monitoring.
For several years the programmatic units in the Education Department (e.g. OVAE, OESE, OPE, and OSERS) conducted periodic monitoring of SEAs, and selected subgrantees, and covered both programmatic and fiscal issues. The scope and intensity of these monitoring visits was uneven at best. While the Office of Elementary and Secondary Education would often undertake in depth examination of internal controls, the Office of Vocational and Adult Education would barely scratch the surface for the Perkins and the Adult Education and Family Literacy Act programs. By moving the fiscal issues to OCFO, we will witness greater consistency across program lines. The programmatic units will continue to carry out monitoring of the states on program requirements.
Emergency Supplemental Hoards Congressional Calendar
Both chambers of Congress began work this week on the fiscal year 2009 (FY09) emergency supplemental appropriations bill. While the Senate moved forward with an Appropriations Committee markup, the House bill stalled as both Republicans and Democrats protested the legislation. Only a week away from the Memorial Day recess, the Senate is poised to debate the supplemental on the floor, while the House continues to deal with internal disagreements over the package as a whole. Interested parties are waiting patiently to see how the bill progresses, especially keeping an eye on provisions that will extend funding for rural schools and impose a moratorium on regulatory changes to Medicaid. The final bill, in whatever form it may appear, is now likely not going to pass until next month.
Speaker of the House Nancy Pelosi (D-CA) and House Appropriations Chairman David Obey (D-WI) brought their supplemental bill straight to the House floor, bypassing the committee markup. The bill contained funding requested by the Bush Administration for the wars in Iraq and Afghanistan. However, Democrats chose to add provisions to expand GI Bill educational benefits for veterans while offsetting the cost, to extend unemployment benefits and to suspend implementation of seven Bush administration Medicaid regulations, including reimbursements to schools for transportation and administrative costs. The entire supplemental package is divided into three amendments to an unfinished appropriations bill from last year.
The first amendment included the funds requested by the President for Iraq and Afghanistan. The second amendment focused on policy for troop deployments. The third consisted of domestic spending projects. A number of anti-war Democrats were planning to vote against the first amendment because they refuse to vote for any funding that will allow the war to continue. House leaders were relying on Republican support to pass the amendment. In a surprise move, 132 Republicans voted “present,” forcing Democrats to rely on their own majority, which failed with a final vote of 141-149. Minority Leader John Boehner (R-OH) and Minority Whip Roy Blunt (R-MO) did not support the effort to spoil the vote, but they did not try and stop their party from carrying out the questionable strategy.
Congressman Mike Pence (R-IN) and members of a conservative faction, the Republican Study Committee (RSC), pressed for this dramatic demonstration to show Democrats how dependent they are on Republican votes to keep money for the troops flowing. The effort was meant to show the RSC’s disappointment at the majority’s decision to attach domestic spending to the supplemental package. However, the amendments that included Iraq policy shifts and domestic spending did pass, and the bill will move forward. In the end, the failed war funding vote will not have too great an impact. Once the Senate reconciles their own bill with the House legislation, the funding for Iraq and Afghanistan will be part of the final package. Having made their voices heard during the first vote, Republicans are not likely to hold up troop funding again.
While the House muddled through protests and debates among its members, the Senate Appropriations Committee marked up its own supplemental bill. The Senate panel backed $168.9 billion in spending for the wars, which is a bit more than the President requested. They also included $10.4 billion, $4.6 billion above the President's request, for natural disaster cleanups including Hurricanes Katrina and Rita. Finally, the committee included a number of non-emergency funding for domestic programs, such as $400 million for a year-long extension of the Secure Rural Schools and Community Self-Determination Act. This program is set to expire on June 30. The bill also includes a moratorium on the proposed Medicaid regulations. The House bill also includes the Medicaid moratorium, but does not address the rural school funding crisis. The Senate plans to bring their bill to the floor next week.
Meanwhile, the President continues to threaten Congress over attaching domestic spending to the supplemental package. The President has already shown his willingness to veto important legislation in order to get Congress to conform to his requests. As evidenced by the strong showing against the first vote in the House, the President may have enough Republican support to sustain such a veto, which may force Congress into passing a “clean” supplemental, free of domestic spending. All in all, this process is far from over, with many twists and turns left ahead. The final package will not come through until June, unless Congressional leaders can pull off a miraculous compromise that can gain 2/3 majority of support in both chambers.
Resources
Alan K. Ota, “Republicans Pull Together Last-Minute Protest Vote on War Funding Bill,” CQ Today, May 15, 2008.
Ashley Roque, “Senate Appropriators Add $9 Billion in Spending to Bush's War Request,” Congress Now, May 15, 2008.
Josh Rogin and Liriel Higa, “Both Sides Foil War Supplemental,” CQ Today, May 15, 2008.
Budget Resolution Delayed
On Tuesday, the Senate Budget Chairman Kent Conrad (D-ND) and House Budget Chairman John Spratt (D-SC) announced that their negotiators have worked out a deal reconciling the House and Senate budget resolutions and addressing the concerns of the fiscally conservative moderate Democrats. The House was scheduled to select conferees this week, but work on the Farm Bill, the supplemental war appropriations bill and other matters delayed the process.
According to the Congressional Budget Act of 1974, Congress has until May 15 before appropriators can set their own spending caps in the absence of a joint budget resolution. That day came and went, and appropriators now have the authority to proceed without a joint budget resolution. Since the House and Senate budget committees are very close to completing their work and, more importantly, the President has already promised to veto any spending that exceeds his request, appropriators may hold off and wait for the budget chairmen to complete their work. Accordingly, the appropriations chairmen are not rushing to complete their line item allocations. The Democratic leadership has already stated that it will delay the appropriations process until they have a President who will support some increases in domestic spending. This year’s fiscal appropriations process will likely extend into 2009.
Meanwhile, President Bush’s own advisors are going around him to get additional funding from Congress. Food and Drug Commissioner Andrew C. von Eschenbach contacted Senator Arlen Specter (R-PA) requesting an immediate infusion of $275 million to ensure that imported foods, drugs and medical devices are safe. Some political analysts were surprised at this gross divergence from the normal executive process. Agency chiefs rarely go around the President to request funding from Congress. Some see this move as a possible sign of the President’s waning power. Agency officials, however, are classifying the issue simply as one government official responding to Congressional inquiries on funding. If this type of occurrence becomes a growing trend, it could take the President out of the equation for fiscal year 2009 spending, though that seems unlikely at this point.
Resources
Vicki Needham, “Conrad: Deal on Budget Resolution Balances Budget by 2012, Extends Several Tax Breaks,” Congress Now, May 13, 2008.
Gardiner Harris, “F.D.A. Chief Writes Congress for Money,” New York Times, May 14, 2008.
Farm Bill Advances
Congress overwhelmingly voted to pass the conference report to the Farm Bill this week. After the House voted 318-106 on Wednesday, May 14th, the Senate voted 81-15 the following day. Both votes are at least 2/3 of the chamber, effectually making them both “veto-proof.” The only remaining questions are if the overwhelming votes will make a difference in the President’s decision to veto the bill, and does he have the support to sustain such a veto. Neither answer is clear at this point, despite this week’s activities.
The finalized legislation includes an expansion of the fresh fruit and vegetable program into all 50 states and the District of Columbia. Each state and D.C. will receive 1 percent of the total annual appropriation with the remaining funds allocated based on population. There is no set minimum number of schools that the state may allocate funds to, but there are requirements which a state must follow in selecting eligible schools. Participating schools should have no less than 50 percent of the student body eligible for free and reduced price lunch. States should show priority to the schools with the highest percentage of these students. The only acceptation allowed is for states that still have funds available after exhausting all schools that meet this requirement.
The bill authorizes an increasing amount of annual appropriations through 2012. The proposed scale of funding is $40 million to go out on October 1, 2008, with an additional $65 million in July of 2009. In July 2010, $101 million is authorized, and $150 million in July 2011. From that point, the following year’s appropriations should be based on the previous 12 months changes to food prices and other economical considerations. While the authorization is spelled out clearly, the actual allocation will be up to appropriators.
While the original bill in the House included a 5 percent set aside for administrative purposes, the final bill directs the Secretary of Agriculture to allow each State to reserve such funding as the Secretary determines to be necessary to administer the program in the State (with adjustments for the size of the State and the grant amount), but not to exceed the amount required to pay the costs of 1 full-time coordinator for the program in the State. While this will differ from state to state, any inclusion of administrative funds is being received well by school nutrition advocates.
Despite the veto-proof majorities, the President has promised to veto the bill. While some might consider this a futile effort, the President may still win this round. Last year, many Republicans who voted in favor of the Labor-HHS-Education appropriations bill also voted to sustain the President’s veto. This allows members of Congress to go on record in support of a bill, and allow the President to absorb the political and public fallout over the veto. Since the President does not have to worry about reelection, he seems all too ready to play his part in this. Even though the bill still has a chance, if enough Republicans change their vote, lawmakers will have to go back to square one on the Farm Bill, likely passing a one year extension of the current bill, giving them ample time, and possibly a more compromising President, to finish the much anticipated legislation.
Resources
Catharine Richert, “Bush Unlikely to Get Much Help From Republicans If He Vetoes Farm Bill,” CQ Today, May 15, 2008.
“New” Title V Guidance
On May 14, the United States Department of Education (ED) published guidance discussing the lack of fiscal year 2008 funding for Title V, Part A, of the Elementary and Secondary Education Act. The document is a question-and-answer guide that is expands upon a letter that ED sent to chief state school officers in March of this year. The new guidance, in addition to reiterating some of the substance of the March letter, also addresses Title V carryover, equitable services, and use of administrative funds. For more information see “Fiscal Year 2008 Guidance for Title V, Part A of the Elementary and Secondary Education Act of 1965, as Reauthorized by the No Child Left Behind Act of 2001 (State Grants for Innovative Programs),” (Outside Source; PDF; 109 KB; 5 pp)
Proposed IDEA Amendments
There are several proposed amendments to the regulations in 34 C.F.R. Part 300 that govern the assistance to States for the education of children with disabilities and preschool grants for children with disabilities. Comments on the proposed amendments should be submitted on or before July 28, 2008.
Proposed amendments affect the following regulations:
- § 300.9 Consent.
- § 300.177 States’ Sovereign Immunity.
- § 300.300 Parental Consent.
- § 300.512 Hearing Rights.
- § 300.600 State Monitoring and Enforcement.
- § 300.602 State Use of Targets and Reporting.
- § 300.606 Public Attention.
- § 300.705 Subgrants to LEAs.
- § 300.815 Subgrants to LEAs.
- § 300.816 Allocations to LEAs.
- § 300.817 Reallocation of LEA funds.
I) PARENTAL REVOCATION OF CONSENT FOR SPECIAL EDUCATION SERVICES - §§ 300.9 and 300.300.
- Current regulation: § 300.300(b) requires parental consent prior to the initial provision of special education and related services.
- Proposed amendment: Parents may unilaterally withdraw their child from continued receipt of special education and related services. In addition, public agencies may not take steps to override a parent’s refusal to consent to further services.
This proposed amendment would not require public agencies to seek parental consent for subsequent special education and related services if parental consent was previously obtained.
- Current regulation: § 300.300(b)(3-4) requires that a public agency will not be in violation of its obligation to make a Free and Appropriate Public Education (FAPE) available and is not required to hold an Individualized Education Plan (IEP) meeting or develop an IEP if a parent does not consent to the initial provision of services.
- Proposed amendment: § 300.300(b)(4) should require that any time a child receives special education and related services, and the parents of this child revoke their consent for the provision of special education and related services, a public agency:
(a) May not continue to provide special education and related services to the child;
(b) May not use the procedures in subpart E (Due Process Procedures) of the regulations to obtain agreement or a ruling that services may be provided;
(c) Will not be considered in violation of its obligation to make FAPE available to a child for failure to provide a child with special education and related services; and
(d) Is not required to convene an IEP meeting or develop an IEP.
This proposed amendment would allow parents to withdraw their child from special education and related services without being subjected to mediation or a Due Process Hearing. Furthermore, it would protect the public agency against subsequent actions from the parents when special education and related services are terminated.
If a child no longer receives special education and related services, and he or she faces disciplinary action, a public agency would be able to discipline this child in the same manner as a non-disabled child.
Even if parents withdraw their child from special education and related services, and then later consents to such services, a public agency will have an obligation to once again provide a FAPE to that child.
- Current regulation: § 300.300(d)(2)(3)
(d)(2) provides that States may require parental consent for other services under Part 300 in addition to the consent requirements of § 300.300(a).
(d)(3) provides that a public agency may not use a parent’s refusal to consent to one service or activity under § 300.300(a) (parental consent for initial evaluation) or (d)(2) to deny the parent or child other services and activities.
- Proposed amendments: § 300.300(d)(2-3):
§ 300.300(d)(2) had an inadvertent omission and should include a reference to “paragraph (a), (b), and (c).”
§ 300.300(d)(3) had an inadvertent omission and should include a reference to “paragraph (a), (b), and (c).”
- Current regulation: § 300.9(c)(1-2) discusses parental consent.
- Proposed amendment: Creates § 300.9(c)(3), which would clarify that, if parents revoke their consent for their child to receive special education and related services after the child was provided with these services, the public agency would not be required to amend the child’s records to remove any references to the child’s receipt of special education and related services.
II) STATES’ SOVEREIGN IMMUNITY AND POSITIVE EFFORTS TO EMPLOY AND ADVANCE QUALIFIED INDIVIDUALS WITH DISABILITIES, §300.177.
- Current regulation: § 300.177(b) discusses States’ sovereign immunity.
- Proposed amendment: § 300.177(b) should state that “any recipient of assistance under Part B of the Act must make positive efforts to employ and advance in employment qualified individuals with disabilities in programs assisted under Part B of the Act such as special education programs of an SEA or LEA or the State-wide assessment program of an SEA that is using IDEA funds to develop assessments for children with disabilities.”
III) REPRESENTATIONS BY NON-ATTORNEYS IN DUE PROCESS HEARINGS, § 300.512
- Current regulation: § 300.512(a)(1) provides that any party to a hearing conducted under Part B (Due Process Hearing) has the right to be accompanied and advised by counsel and by individuals with special knowledge or training with respect to the problems of children with disabilities.
- Proposed amendment: § 300.512(a)(1) should state that “a parent’s right to be represented by non-attorneys at due process hearings is determined by State law.”
This proposed amendment would inform parents that State law dictates their rights be represented by a non-attorney at IDEA Due Process Hearings, which should reduce future litigation pertaining to this issue.
This proposed amendment would not prohibit parents from representing themselves at IDEA Due Process Hearings.
IV) STATE MONITORING TECHNICAL ASSISTANCE AND ENFORCMEENT, §§ 300.600, 300.602, and 300.606.
State determinations about LEA performance and State enforcement.
- Current regulation: § 300.600(a) discusses State monitoring and enforcement
- Proposed amendment: § 300.600(a) should add language “to clarify that States must use the categories listed in § 300.603(b)(1) to make annual determinations about the performance of each LEA.” § 300.600(a) should also identify the enforcement mechanisms associated with each relevant regulatory citation.”
§ 300.600(a) should state the following:
(a)The State must:
(1) Monitor the implementation of this part;
(2) Make determinations annually about the performance of each LEA using the categories in § 300.603(b)(1);
(3) Enforce this part, consistent with § 300.604(a)(1) technical assistance; (a)(3) conditions on funding of an LEA, (b)(2)(i) a corrective action plan or improvement plan, (b)(2)(v) withholding of funds in whole or in part by the SEA, and (c)(2) withholding of funds in whole or in part by the SEA; and
(4) Report annually on the performance of the State and of each LEA under this part as provided in § 300.602(b)(1)(A) and (b)(2).
- Current regulation: § 300.600 discusses State monitoring and enforcement
- Proposed amendment: § 300.600(e) should be added “because correction of non-compliance does not always occur in a timely manner.”
300.600(e) should state the following:
(e) In exercising its monitoring responsibilities under § 300.600(d), the State must ensure that when it identifies non-compliance with the requirements of this part by LEAs, the non-compliance is corrected as soon as possible, and in no case later than one year after the State’s identification.
Correction of non-compliance means that a State needs a public agency to revise any non-compliant policies, procedures, and practices and verifies through a follow-up review of documentation or interviews or both that the non-compliant policies, procedures, and practices were corrected.
Timeframe for public reporting about LEA performance.
- Current regulation: § 300.602(b)(1)(i)(A) discusses when a State must submit its annual report to the public.
- Proposed amendment: § 300.602(b)(2) should require “each State to report to the public on the performance of each LEA located in the State on the targets in the State’s performance plan no later than 60 days following a State’s submission of its annual performance report to the Secretary.
Additional information to be made available to the public.
- Current regulation: § 300.602(b)(1)(i)(B) discusses information other than the annual report that a State must provide to the public.
- Proposed amendment: § 300.602(b)(1)(i)(B) should require “States to make each of the following documents available through public means (including posting on the SEA’s Web site, distributing to the media, and distributing through public agencies): a) the State’s performance plan, b) the State’s annual performance report, and c) the State’s annual reports on the performance of each LEA located in the State.”
Notifying the public of Federal enforcement actions.
- Current regulation: § 300.606 discusses that when a State receives notice of a determination, it must bring it to the attention of the public.
- Proposed amendment: § 300.606 should require “States to provide public notice of any enforcement action taken by the Secretary pursuant to § 300.604 (enforcement actions)…each State’s public notice of enforcement actions must include: posting the notice on the State’s Web site and distributing the notice to the media, and through public agencies.”
V) ALLOCATION OF FUNDS UNDER SECTION 611 OF THE IDEA TO LEAs THAT ARE NOT SERVING ANY CHILDREN WITH DISABILITIES, § 300.705.
Subgrants to LEAs
- Current regulation: § 300.705(a) discusses subgrants to LEAs.
- Proposed amendment: § 300.705(a) should ease the problem of when “States comply with the requirement [under section 611(f) of the Act] to distribute funds to eligible LEAs not currently serving children with disabilities after subgrants have been made for a fiscal year” by clarifying that this requirement “would take effect with funds that become available on the first July 1 following the effective date of the final regulations.”
Base payment adjustments
- Current regulation: § 300.705(b)(2) discusses base payment adjustments.
- Proposed amendment: § 300.705(b)(2) should add paragraph (iv) to this section, which would require the base payment adjustments in subsequent years “to take effect with funds that become available on the first July 1 following the effective date of the final regulations.”
Reallocations of funds
- Current regulation: § 300.705(c) discusses reallocation of funds.
- Proposed amendment: § 300.705(c) should indicate that “after an SEA distributes funds under Part B to an eligible LEA that is not serving any children with disabilities…the SEA must determine within a reasonable period of time prior to the end of the carryover period whether the LEA has obligated the funds.” If not, the SEA “may reallocate any of those funds to other LEAs” or “the SEA may…retain those funds for use at the State level.”
VI) ALLOCATION OF FUNDS UNDER SECTION 619 OF THE IDEA TO LEAs THAT ARE NOT SERVING ANY CHILDREN WITH DISABILITIES, § 300.815.
Subgrants to LEAs
- Current regulation: § 300.815 discusses subgrants to LEAs.
- Proposed amendment: § 300.815 should ease the problem of when “States comply with the requirement [under section 619(g)] to distribute funds to eligible LEAs not currently serving children with disabilities after subgrants have been made for a fiscal year” by clarifying that this requirement “would take effect with funds that become available on the first July 1 following the effective date of the final regulations.”
Base payment adjustments
- Current regulation: § 300.816(b) discusses base payment adjustments.
- Proposed amendment: § 300.816(b) should add paragraph (4) to this section “to clarify that the requirement of an LEA receiving a base payment of zero in its first year would be entitled to a base payment adjustment after the first annual child count in which the LEA reports that it is serving any preschool children with disabilities…this requirement would take effect with funds that become available on the first July 1 following the effective date of the final regulations.”
Reallocations of funds
- Current regulation: § 300.817discusses reallocation of LEA funds.
- Proposed amendment: § 300.817 should indicate that “after an SEA distributes funds under section 619 to an eligible LEA that is not serving any preschool children with disabilities…the SEA must determine within a reasonable period of time prior to the end of the carryover period…whether the LEA has obligated funds.” The SEA “may reallocate any of those funds to other LEAs” or “the SEA may…retain those funds for use at the State level.”
Resource
Federal Register Vol. 73, No. 93 May 13, 2008/Proposed Rules (Outside Source; PDF; 147 KB; 13 pp)
News
Diane Auer Jones Moves On
On Thursday, Diane Auer Jones announced her resignation as Assistant Secretary for Postsecondary Education. The Senate approved Jones’ appointment in May 2007, after the President nominated Jones to replace Sally Stroup, who left to return to the House of Representatives. While most were not expecting the announcement, the move is not surprising. There are only six months until the public selects the administration, thus giving political appointees a short amount of time to secure their next role, if they have not done so already.
Resource
“Diane Auer Jones, Assistant Secretary for Postsecondary Education,” U.S. Department of Education, Senior Staff.
Check and Balances at Work
President Bush’s Administration and the 110th Congress have only eight months in office remaining. During that time, the Democratic leadership will try to secure more legislative accomplishments and President Bush will pursue his renewed dedication toward fiscal restraint on domestic spending. In recent weeks, the President has issued veto threats on a variety of bills including the Farm Bill, the emergency war spending bill, the Medicaid moratoriums and much more. In fact, the veto threat has been so plentiful that a keyword search in Congress Now spanning the last month resulted in 826 stories containing a veto threat reference. This is impressive coming from an Administration that did not issue its first veto until July 2006. The President has clearly made his political calculation: he will veto spending levels and authorizations that exceed his requests.
In short, the fate of the 110th Congress, is in Republican control. In the remaining eight months, the Republican leadership can support the President’s newfound fiscal restraint and uphold the vetoes or they can chart their own path and distinguish themselves from the President before the elections. The latter course of action is not likely, however, because the House Republicans may know how to do both. Last year’s approach to the Labor-HHS-ED appropriations bill is illustrative. Many Republicans in the House voted for the Democratic spending bill that contained $10 billion above the President’s request, but when the President vetoed the bill, many of those same Republicans also voted to uphold the veto. This gave them a win-win: they were on record for voting for the bill and for voting in support of the President’s veto.
The Republicans may have even more power in the Senate. Republicans hold 49 of the 100 seats. In order to move any legislation, the Democratic leadership has to secure 60 votes in order to prevent a filibuster, and they need 67 votes to override a veto. This makes 41 a magic number and the Republicans hold 49.
This is, of course, a powerful position for the Republicans and it will be a major calculation for every bill being debated from now until January of 2009, when Congress inducts the 111th Congress and the 44th President of the United States.
