oversight

Indiana Department of Education's Compliance with NCLB School Choice and SES Provisions.

Published by the Department of Education, Office of Inspector General on 2005-02-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                        UNITED STATES DEPARTMENT OF EDUCATION 

                                             OFFICE OF INSPECTOR GENERAL 

                                                                  REGION V 

                                                          III NORTH CANAL. SUITE 940 

                                                            CHICAGO. ILLINOIS 60606 


                                                                FAX: (312) 353-0244
     Audit                                                                                                                                 Investigation
(312) 886-6503                                                                                                                            (312) 353-7891

                                                              FEB 1 8 2005 


                                                                                       Control Number ED-OIG/A05-E0014

        Dr. Suellen Reed
        Superintendent of Public Instruction
        Indiana Department of Education
        Room 229, State House
        Indianapolis, IN 46204-2798

        Dear Dr. Reed:

        This Final Audit Report presents the results of our audit of the Indiana Department of
        Education's (IDE) compliance with Title I, Part A, of the Elementary and Secondary Education
        Act of 1965 (ESEA), as amended by the No Child Left Behind Act of2001, Public School
        Choice and Supplemental Educational Services (SES) provisions for the 2003-2004 school year
        that began July 1,2003. The objectives of our audit were to determine if(1) IDE had ail.
        adequate process in place to review local educational agency (LEA) and school compliance with
        the Adequate Yearly Progress (AYP), Public School Choice, and SES provisions of the ESEA
        and the implementing regulations; (2) LEAs provided to students attending schools identified for
        improvement (failed A yP two consecutive years), corrective action, or restructuring the option
        of attending another public school; and (3) LEAs provided SES to students attending schools that
        failed to make AyP while identified for improvement, corrective action, or restructuring. 1 To
        achieve these objectives, we reviewed IDE and six judgmentally selected LEAs with schools
        identified for improvement, corrective action, or restructuring. 2

         Our audit disclosed that, for the 2003-2004 school year, each ofthe LEAs reviewed provided the
         option of school choice if it had another school for the student to attend and generally provided
         SES to eligible students. However, we determined that IDE did not have an adequate process in
         place to determine whether all LEAs actually offered, timely and properly, school choice and
         SES to all students who were eligible for these services. In part as a result of IDE's inadequate
         process, five of six LEAs reviewed did not comply fully with the Public School Choice and SES
         provisions of the ESEA and the implementing regulations.



         1 To accomplish our objectives, we reviewed compliance with selected provisions of ESEA and the implementing
         regulations. See Objectives, Scope, and Methodology section of this report for more detail.
         2 We reviewed Gary Community School Corporation (Gary), School City of Whiting (Whiting), Indianapolis Public
         Schools, East Allen County Schools (East Allen), Muncie Community Schools (Muncie), and Marion Community
         Schools (Marion).


                    Our mission is to promote the efficiency, effectiveness, and integrity of the Department's programs and operations.
We provided a draft of this report to IDE. In its response dated December 22, 2004, IDE did not
dispute our finding or provide any additional information that caused us to change our finding
and recommendations. IDE agreed with our recommendation to revise the sample letters it
provides to LEAs and instruct the LEAs to discontinue using any previously provided sample
letters. We summarized IDE’s comments after the finding and included the comments in their
entirety as an attachment.

                                              AUDIT RESULTS

While IDE did not have an adequate process to review LEAs’ compliance with Public School
Choice and SES provisions of the ESEA and the implementing regulations for the 2003-2004
school year, it has developed policies and procedures that could improve its process for
reviewing LEAs beyond the 2003-2004 school year. We also determined that IDE (1) provided
AYP determinations to LEAs before the beginning of the school year, (2) had an adequate
process to identify persistently dangerous schools, (3) identified and provided an approved list of
SES providers to the LEAs, and (4) monitored the SES providers’ services. In addition, we
determined that each of the LEAs reviewed provided the option of school choice (if it had
another school for the student to attend) and generally provided SES to eligible students.

Finding Number 1 – IDE Did Not Adequately Review LEAs for Compliance with the ESEA
                   Public School Choice and SES Provisions

IDE officials indicated that before approving each LEA’s Title I, Part A (Title I) application,
IDE personnel reviewed sections that listed (1) schools required to offer school choice and SES
and (2) funds budgeted for SES. However, for the 2003-2004 school year, the process was not
adequate to determine whether all LEAs actually offered, timely and properly, school choice and
SES to all eligible students. As a result, five of the six Indiana LEAs3 we reviewed did not
comply fully with requirements for providing parental notification letters of both the school
choice and SES options, one LEA did not budget sufficient funds to meet the federal spending
requirement for SES, and one LEA transferred students from schools identified for improvement
to other schools identified for improvement.

Section 1116 (c)(1)(A) of the ESEA requires a state to annually review the progress of each LEA
receiving Title I funds to determine if each LEA is carrying out its responsibilities under Section
1116 of the ESEA.4

Had IDE reviewed LEAs as required by the ESEA, it could have reduced the risk of the
following occurring at Indiana LEAs.




3
 We did not identify any issues at Indianapolis Public Schools. 

4
 LEA responsibilities under Section 1116 of ESEA are discussed in detail later in this finding and the 

BACKGROUND section of this report. 



Final Audit Report                                        2                                  ED-OIG/A05-E0014
Five LEAs Had School Choice Notification Letter Deficiencies
Five of six LEAs reviewed did not comply fully with the Public School Choice provisions of the
ESEA and the implementing regulations. One LEA did not send any school choice parental
notification letters (Whiting) and four LEAs sent timely but deficient letters.

• 	 Three LEAs (Muncie, East Allen, Marion) did not identify schools to which a student may
    transfer.
• 	 Four LEAs (Muncie, East Allen, Gary, Marion) provided no information on the academic
    achievement of the schools to which a student may transfer or a comparison of the student’s
    current school to other schools served by the LEA and by IDE. All three schools reviewed
    for school choice in Gary (Ivanhoe Elementary School, Horace Mann High School, and
    David O. Duncan Elementary School) did not provide this information.
• 	 Three LEAs (East Allen, Gary, Marion), including all three schools we reviewed for school
    choice in Gary, provided transportation for students exercising school choice but did not state
    in their letters that they would provide this transportation.

By not including this information in school choice parental notification letters, the four LEAs did
not comply with Section 1116 (b)(6) of the ESEA and 34 C.F.R. § 200.37, which list the required
minimum information for school choice notification letters.5

Whiting also did not comply with these requirements. Whiting’s only elementary school was
required to offer both school choice and SES. Because Whiting did not have another elementary
school to which students could transfer and could not enter into a cooperative agreement with
another LEA to accept its students, Whiting only offered SES. However, Whiting did not
provide a school choice parental notification letter to (1) inform parents that their child was
eligible to attend another public school due to the identification of the current school as in need
of improvement, and (2) explain that there were no schools to which their child could transfer.

Because the five LEAs did not provide sufficient parental notification of school choice, parents
were not fully informed about the status of their child’s school and could not make a fully
informed decision whether to transfer their children from a school identified for improvement.
Two LEAs (East Allen and Gary) believed it was sufficient to only provide information to
parents through other methods such as meetings. The other three LEAs were not aware of their
responsibility for providing this information to parents, possibly because IDE did not provide
adequate guidance to LEAs regarding parental notification of school choice.

Five LEAs Had SES Notification Letter Deficiencies
Five of six LEAs reviewed did not comply fully with the SES provisions of the ESEA and the
implementing regulations.

• 	 Two LEAs (Whiting and Gary) did not provide parental notification of SES for all eligible
    students as required by Section 1116 (e)(2)(A) of the ESEA and 34 C.F.R. § 200.37.



5
 For a detailed description of criteria related to school choice and SES parental notification letters, see the
BACKGROUND section of this report. All regulatory citations are as of July 1, 2003.


Final Audit Report 	                                        3                                    ED-OIG/A05-E0014
    Whiting only provided SES parental notification letters for 14 of approximately 30 eligible
    students. One of 3 schools reviewed for SES in Gary (Horace Mann High School) only
    provided SES parental notification letters for 88 of 222 eligible students at the school.
• 	 One LEA (Gary) did not provide SES information directly to parents through such means as
    regular mail as required by 34 C.F.R. § 200.36 (c). All 3 schools reviewed for SES in Gary
    (Horace Mann High School, David O. Duncan Elementary School, and Tolleston Middle
    School) required parents to attend a conference to select an SES provider.
• 	 Four LEAs (Muncie, East Allen, Gary, and Marion) did not include the minimum
    information required by Section 1116 (e)(2)(A) of the ESEA and 34 C.F.R. § 200.37 in their
    SES parental notification letters. Muncie, East Allen, Marion, and all three schools reviewed
    for SES in Gary did not describe the qualifications and evidence of effectiveness for each
    provider from which a parent could select.

Because the LEAs did not provide SES parental notification for all eligible students, did not
provide information directly to parents, and/or did not include the minimum required
information, some parents did not have all the information needed to make a fully informed
decision regarding SES. Two LEAs (East Allen and Gary) believed it was sufficient to only
provide information to parents through other methods such as meetings. The other three LEAs
(Muncie, Marion, and Whiting) were not aware of their responsibility for providing this
information to parents, possibly because IDE did not provide adequate guidance to LEAs
regarding parental notification of SES.

One LEA Did Not Budget Sufficient Funds for SES
For the 2003-2004 school year, Whiting did not budget sufficient funds to allow it to meet the
federal spending requirement for SES. Whiting was unable to provide school choice, so it did
not budget any funds for school choice transportation. Whiting budgeted 10 percent of its Title I
allocation for SES, which would allow it to serve only 14 of the approximately 30 students
eligible for SES.

Section 1116 (b)(10)(A) of the ESEA requires that, unless a lesser amount is needed to provide
choice-related transportation and to satisfy all requests for SES, an LEA must spend an amount
equal to 20 percent of its Title I allocation for those purposes. Whiting was not aware of this
federal spending requirement but could have provided SES to additional eligible students had it
budgeted additional funds from its Title I allocation for SES.

One LEA Transferred Students to Other Schools Identified for Improvement
Five of 46 students who exercised school choice under the ESEA in Marion transferred from
schools identified for improvement to other schools identified for improvement. Marion
transferred two students from Frances Slocum Elementary School to Southeast Elementary
School, and three students from Southeast Elementary School to Frances Slocum Elementary
School. In both cases, Marion transferred students from a school identified for improvement to
another school identified for improvement.

Section 1116 (b)(1)(E) of the ESEA and 34 C.F.R. § 200.44 (a) require that, in the case of a
school identified for school improvement, the LEA shall provide all students enrolled in the




Final Audit Report 	                            4                            ED-OIG/A05-E0014
school with the option to transfer to another public school served by the LEA and not identified
for improvement, corrective action, or restructuring, unless such an option is prohibited by state
law.

By allowing students to transfer to other schools identified for improvement and not notifying
parents of each new school's improvement status, Marion did not provide complete information
to parents regarding school choice. Parents may have had the false impression that they were
transferring their child to a school that met AYP standards. Marion was not aware of its
responsibilities for providing students with school choice options that only included schools not
identified for improvement.

Revised Policies and Procedures Beyond the 2003-2004 School Year
IDE believed its lack of implementation of the necessary ESEA review procedures for the 2003-
2004 school year resulted from the time and labor required to implement and provide oversight
of the ESEA at the state and LEA levels. For the 2004-2005 school year and beyond, IDE has
developed and plans to implement policies and procedures that could improve its LEA review
process. IDE stated it plans to improve its review procedures by expanding LEAs’ Title I
applications and by visiting LEAs once every three years. IDE developed the Title I Program
Review Packet (Desktop and Onsite) that includes procedures to review each Title I application
for (1) school choice and SES budget information, (2) identification of schools in improvement,
and (3) copies of school choice and SES parental notification letters. IDE also developed the
Supplemental Services Toolkit for LEAs. The Toolkit includes information to assist LEAs with
administering SES and samples of school choice and SES parental notification letters.

We reviewed the sample school choice and SES letters and found them insufficient. The sample
school choice letter does not identify the schools to which a child may transfer or provide an
explanation of how the school compares in terms of academic achievement to other schools
served by the LEA and by IDE. The sample SES letter does not describe the qualifications and
evidence of effectiveness for each provider.

Recommendations

We recommend that the Assistant Secretary for Elementary and Secondary Education, in
conjunction with the Assistant Deputy Secretary for Innovation and Improvement:

1.1 Require IDE to revise the sample letters it provides to LEAs and instruct the LEAs to
    discontinue using any previously provided sample letters. The sample school choice letter
    should be enhanced so it identifies the schools to which a child may transfer and provide an
    explanation of how the school compares in terms of academic achievement to other schools
    served by the LEA and by IDE. The sample SES letter should be enhanced so it describes
    the qualifications and evidence of effectiveness for each provider.

1.2 Monitor IDE’s implementation of the planned corrective action during the 2005 school year
    to ensure it reviews the progress of each LEA to determine if each LEA is carrying out its
    responsibilities under the provisions of the ESEA and the implementing regulations related to




Final Audit Report                               5                             ED-OIG/A05-E0014
       (1) school choice and SES parental notification letters; (2) budgeting federal funds for
       choice-related transportation and SES; and (3) offering school choice options that include
       schools not identified for school improvement, corrective action, or restructuring.

Auditee Comments
In its response to our draft audit report, IDE did not dispute our finding. IDE stated that, to
ensure full compliance with the school choice and SES provisions, it has taken or will take
numerous actions. IDE stated it will revise its sample school choice and SES letters and submit
them, along with a Choice Request Form and SES (Free Tutoring) Provider Selection Form, to
the U.S. Department of Education, Office of Innovation and Improvement for review and
approval.

In addition, IDE stated it will improve guidance to LEAs by (1) reminding LEAs of school
choice and SES requirements via the 2005-2006 Title I Application for Grant and at Title I
Administrative Workshops offered in December 2004 and April 2005; (2) providing to LEAs
revised sample letters, Choice Request Forms, and SES (Free Tutoring) Provider Selection
Forms; and (3) instructing Title I program administrators to discontinue using previously
provided sample letters. IDE indicated it will improve monitoring of LEAs by (1) reviewing
reports LEAs submit each fall regarding compliance with school choice and SES requirements;
(2) reviewing copies of each LEA’s school choice and SES letters submitted with their Title I
Application for Grant; and (3) conducting on-site monitoring of LEAs, including meeting with
parents to ascertain their level of understanding of school choice and SES requirements.

IDE stated that these actions are underway or in place and ensure that IDE currently has an
adequate process in place to determine whether all LEAs actually offered, timely and properly,
school choice and SES to all students who were eligible for these services.

OIG Response
IDE did not dispute the finding and concurred with Recommendation 1.1. If fully implemented,
the corrective actions IDE described in its response should help it determine whether LEAs offer,
timely and properly, school choice and SES to all students who are eligible for these services.

                                                 BACKGROUND

Title I, Part A of the ESEA, as amended by the No Child Left Behind Act of 2001 (P.L.107-110),
significantly increased the choices available to the parents of students attending Title I schools
that fail to meet state standards, including immediate relief, beginning with the 2002-2003 school
year, for students in schools that were previously identified for improvement or corrective action
under the 1994 reauthorization of the ESEA. LEAs must offer all students attending schools
identified for improvement, corrective action, or restructuring the choice to attend a public
school not identified for improvement, corrective action, or restructuring, which may include a
public charter school within the LEA.6 The LEA must provide students transportation to the new
school and spend, at a minimum, an amount equal to five percent (up to as much as 20 percent)
of its Title I funds for this purpose, if needed.


6
    A school is identified for improvement after failing AYP two consecutive years.


Final Audit Report                                         6                          ED-OIG/A05-E0014
A school that fails to make AYP while being identified for improvement, corrective action, or
restructuring must offer SES to low-income students. SES providers must be approved by the
state and offer services tailored to help participating students meet challenging state academic
standards. To help ensure that LEAs offer meaningful choices, the ESEA requires an LEA to
spend an amount equal to 20 percent of its Title I allocation to provide choice-related
transportation and SES to eligible students, unless a lesser amount is needed to satisfy all
demand.

Section 1116 (c)(1)(A) of the ESEA requires states to review LEAs for compliance with the
school choice and SES provisions of the ESEA. Section 1116 (b) and (e) of the ESEA and 34
C.F.R. § 200.37 outline requirements for school choice and SES parental notification letters. For
school choice parental notification, Section 1116 (b)(6) of the ESEA and 34 C.F.R. § 200.37
require that an LEA promptly provide parents of each student enrolled in a school identified for
improvement with notice that includes, among other things, (1) an explanation of how the school
compares in terms of academic achievement to other schools served by the LEA and state
educational agency; (2) an explanation of the parents’ option to transfer their child to another
public school, which may include charter schools, or obtain SES; (3) identification of the schools
to which a child may transfer and information on the academic achievement of those schools;
and (4) notice that the LEA will provide or pay for transportation for the student to another
public school.

For SES parental notification, Section 1116 (e)(2)(A) of the ESEA and 34 C.F.R. § 200.37
require the LEA to provide, at a minimum, annual notice to parents of (1) the availability of
services and how parents can obtain the services for their child; (2) the identity of approved
providers within or near the LEA; and (3) a brief description of the services, qualifications, and
demonstrated effectiveness of each provider. According to 34 C.F.R. § 200.36(c), the state,
LEA, or school is required to provide information to parents directly, through such means as
regular mail. Section 1116 (e)(2)(C) of the ESEA requires the LEA to apply fair and equitable
procedures for serving students if the number of spaces at approved providers is not sufficient to
serve all eligible students. Section 1116 (b)(10)(C) of the ESEA requires the LEA to give
priority to the lowest achieving eligible students.

The U.S. Department of Education allocated $116,161,633 in Title I funds to IDE for the 2003-
2004 school year. IDE allocated Title I funds during this period to 285 of its 292 LEAs. For the
2003-2004 school year, 97 schools in 50 LEAs were identified as needing improvement—46
schools were in the first year of improvement, 32 schools were in the second year of
improvement, and 19 schools were in the third year of improvement. For the 6 LEAs we visited
during our audit, 509 of 18,753 (2.7 percent) eligible students at 38 schools exercised their right
to school choice, and 1,608 of 8,220 (19.6 percent) eligible students at 29 schools enrolled in
SES.

IDE administered the Indiana Statewide Testing for Educational Progress-Plus (ISTEP) in the
fall of 2002. Based on the results of the ISTEP, IDE provided the preliminary and final AYP
determinations to the LEAs on May 5, 2003, and August 1, 2003, respectively.




Final Audit Report                               7                             ED-OIG/A05-E0014
                          OBJECTIVES, SCOPE, AND METHODOLOGY 


The objectives of our audit were to determine if, for the 2003-2004 school year, (1) IDE had an
adequate process in place to review LEA and school compliance with AYP, Public School
Choice, and SES provisions of the ESEA and the implementing regulations; (2) LEAs provided
to students attending schools identified for improvement (failed AYP two consecutive years),
corrective action, or restructuring the option of attending another public school; and (3) LEAs
provided SES to students attending schools that failed to make AYP while identified for
improvement, corrective action, or restructuring. Our examination of IDE’s process for
reviewing LEA and school compliance with the AYP provisions focused solely on the timeliness
of providing AYP determinations to LEAs.

To achieve our objectives, we reviewed selected provisions of ESEA and the implementing
regulations. We also interviewed officials from IDE and the six LEAs reviewed. We reviewed
documents provided by IDE, including (1) the IDE Organization Chart; (2) documents related to
compliance with the ESEA provisions related to AYP, the identification of persistently
dangerous schools, school choice, and SES; (3) the IDE Application for Grant, Public Law 107-
110, Title I: Helping Disadvantaged Children Meet High Standards (2003-2004, 2004-2005); (4)
the Title I Program Review Packet (Desktop and Onsite); (5) the Supplemental Services Toolkit;
and (6) the State of Indiana Single Audit Report, July 1, 2001 to June 30, 2002, performed by the
Indiana State Board of Accounts.

We also reviewed, for compliance with Public School Choice and SES provisions of the ESEA
and the implementing regulations, 6 judgmentally selected LEAs from a universe of the 50
Indiana LEAs that had schools identified for improvement, corrective action, or restructuring for
the 2003-2004 school year. We judgmentally selected 6 LEAs based on total student
enrollment—2 large (Gary and Indianapolis Public Schools), 3 medium (Muncie, Marion, and
East Allen), and 1 small (Whiting). We defined a large LEA as one with a student enrollment of
10,000 or more, a medium LEA as one with an enrollment of 1,000 through 9,999, and a small
LEA as one with an enrollment of 999 or less.

In addition, we reviewed documents from the six selected LEAs. The documentation related to
the LEAs’ compliance with the Public School Choice and SES provisions of the ESEA and the
implementing regulations and included (1) excerpts from each LEA’s IDE 2003-2004
Application for Grant, Public Law 107-110, Title I: Helping Disadvantaged Children Meet High
Standards; (2) school choice and SES parental notification letters sent by five LEAs and selected
schools at another LEA;7 (3) documentation related to the number of students eligible for and
participating in school choice and SES; and (4) documentation related to school choice
transportation expenditures. Our review of the school choice and SES parental notification


7
 Because Gary relied on its schools to develop and provide school choice and SES notification letters to parents, we
selected a sample of schools in Gary to test the letters for compliance with requirements. For school choice, we
randomly selected 3 of 23 schools required to offer school choice. We selected 1 of 3 schools in the first year of
improvement, 1 of 11 schools in the second year of improvement, and 1 of 9 schools in the third year of
improvement. For SES, we selected 3 of 20 Gary schools required to offer SES. We randomly selected 1 of 11
schools in the second year of improvement and 1 of 9 schools in the third year of improvement. Because 1 of the
schools we randomly selected for school choice was also required to offer SES, we also reviewed that school.


Final Audit Report                                       8                                   ED-OIG/A05-E0014
letters focused on selected provisions of ESEA and the implementing regulations. Specifically,
for the school choice parental notification letter, we determined (1) whether parents were notified
in a timely manner; and (2) whether the notice, at a minimum, (a) informed parents that their
child was eligible to attend another public school due to the identification of the current school as
in need of improvement; (b) identified each public school, which may include charter schools,
that the parent can select; (c) explained how the school compares in terms of academic
achievement to other schools served by the LEA and IDE; (d) included information on the
academic achievement of the schools that the parent may select; and (e) clearly stated that the
LEA will provide, or pay for, transportation for the student.

For the SES parental notification letter, we determined (1) whether parents were notified of SES
and given comprehensive, easy-to-understand information about SES; and (2) whether the
notice, at a minimum, (a) identified each approved service provider within the LEA, in its
general geographic location, or accessible through technology such as distance learning; (b)
described the services, qualifications and evidence of effectiveness for each provider; (c)
described the procedures and timelines that parents must follow in selecting a provider to serve
their child; and (d) was easily understandable, in a uniform format, and, to the extent practicable,
in a language the parents can understand. If the LEA had insufficient funds to serve all students
eligible to receive services, we also determined whether the SES parental notification letter
included information on how the LEA will set priorities in order to determine which eligible
students receive services.

We performed our audit work at IDE’s administrative offices, the administrative offices of the
six LEAs reviewed, and our Chicago office from March 2004 through September 2004. We
discussed the results of our audit with IDE officials on August 26, 2004. We performed our
audit in accordance with generally accepted government auditing standards appropriate to the
scope of the review described above.

                         STATEMENT ON INTERNAL CONTROLS

As part of our audit, we gained an understanding of IDE’s internal controls for monitoring LEA
compliance with school choice and SES requirements. We also gained a general understanding
of IDE's policies and procedures related to AYP provisions of the ESEA. Though we did not
assess the adequacy of IDE’s internal controls, our compliance testing at six LEAs disclosed
instances of non-compliance that might have been caused, in part, by weaknesses in IDE’s
system of internal controls over reviewing LEAs. These weaknesses are related to IDE’s
insufficient review of LEAs to determine whether (1) school choice and SES parental
notification letters included all required information, (2) each LEA budgeted a sufficient amount
of its Title I allocation to meet the federal spending requirement for SES, and (3) each LEA only
transferred students to schools that had not been identified for school improvement. These
weaknesses are discussed in the AUDIT RESULTS section of this report.




Final Audit Report                               9                              ED-OIG/A05-E0014
                               ADMINISTRATIVE MATTERS 


Statements that managerial practices need improvements, as well as other conclusions and
recommendations in this report, represent the opinions of the Office of Inspector General.
Determinations of corrective action to be taken will be made by the appropriate U.S.
Department of Education officials.

If you have any additional comments or information that you believe may have a bearing on the
resolution of this audit, you should send them directly to the following Education Department
officials, who will consider them before taking final Departmental action on the audit:

                       Raymond J. Simon, Assistant Secretary
                       Office of Elementary and Secondary Education
                       U.S. Department of Education
                       Room3W315
                       Federal Building No.6
                       400 Maryland Avenue, S.W.
                       Washington, D.C. 20202

                       Nina S. Rees, Assistant Deputy Secretary
                       Office of Innovation and Improvement
                       U.S. Department of Education
                       Room4W317
                       Federal Building No.6
                       400 Maryland Avenue, S.W.
                       Washington, D.C. 20202

It is the policy of the U.S. Department of Education to expedite the resolution of audits by
initiating timely action on the finding and recommendations contained in audit reports.
Therefore, receipt of your comments within 30 days would be appreciated.

In accordance with Freedom of Information Act (5 U.S.C. §552), reports issued by the Office of
Inspector General are available to members of the press and general public to the extent
information contained therein is not subject to exemptions in the Act.

                                              Sincerely,


                                             ~£2,~
                                        pc.. Richard J. Dowd
                                              Regional Inspector General for Audit


Attachment




Final Audit Report                              10                             ED-OIG/A05-E0014
                                                                                           ATTACHMENT
                                                                                                       Page 1 of 3 





        Indiana Department of Education
        Ce nter (or Community RelaUon. and Special PopuJaUona
        Room 2S9, State HOUM • Indianapollll, IN 46204.2798




                December 22, 2004




                Richard J. Dowd
                U.S. Department of Education
                Office o f Inspector General
                III N. Canal Street, Suite 940
                Chicago, Illinois 606()6.7204

                Dear Mr. Dowd:

                This letter is written in response to the Office of Inspector General (010) draft report sent
                on November 17, 2004 to the Indiana Department of Educatio n (IDOE) regarding its
                compliance with the No Child Left Behind Act oj2001 as it relates to Indiana's
                implementation of the public school choice and Supplemental Educational Services
                (SES) requirements of thaI Act.

                As stated in the OIG 's draft report, IDOE met its com pliance requirements by ( I)
                pro viding adequ ate yearly progress (A YP) detenninations 10 LEAs before the beginning
                o f the school year; (2) ha ving an adequate process to iden tify persistently dangerous
                schools; (3) identi fying and providing an appro ved list of SES providers to the LEAs; and
                (4) monitoring the SES providers' services. In addition, it was noted that IDOE has
                developed policies and procedures that could improve its process for reviewing LEAs
                beyond those available for the audi ted 2003-2004 school year.

                The 010 audit d isclosed. that, for the 2003-2004 school year, the IDOE did not have an
                adequate process in place to determine whether all local educati onal agencies (LEAs)
                aClUal1 y offered , time ly and properly, school choice and SES to all students who were
                eligible for th ese services. Specific areas, noted in the drafl repon, requiring additional
                oversigh t by the [DOE included:
                    o Increase the ri gor of SEA oversight of relevant lEAs' compliance with public
                         school choice provisions. Ensure that the required LEA c hoice parental
                         notification letters indicate what the identification o f a school in improvement
                         means and the reasons for it; identify schools to whic h a student may trans fer;
                         prov ide information on the academic achieveme nt of the schools to which a
                         student may transfer an d a comparison to the student's current school; and specify
                         that choice transponalion will be provided by the LEA.




                                        Office Location · 151 West Ohio Street




Final Audit Report                                                                       ED-OIG/A05-E0014
                                                                                           ATTACHMENT
                                                                                               Page 2 of 3 





              December 22, 2004
              Mr. Richard J. Dowd, OIG

              Page 2


                 o     The SEA must ensure that relevan t LEAs comply with SBS provisions by
                       providing parental notification of SES for all eligible students: sending
                       notification letters directly to parents through such means as regular mail ;
                       describing the qualifications and evidence of effectiveness for each provider from
                       which a parent may select; and budgeting/expending sufficient funds to meet the
                       federal spending requirement for SES.

              To ensure full compliance with the NCLB public school choice and SES provisions, the
              IDOE has taken or will take the following actions:
                 o All LEAs wi ll be reminded of the public school choice and SES requirements
                     under NCLS through presentations at the December 15 and 16, 2004 ~
                     Administrative Workshops. The SEA will reiterate thc requirements that:
                     (a) Schools of choice must only be those that are not identified for school
                         improvement;
                     (b) LEAs must understand that notification regarding c hoice and SES must be
                         sent directl y to parents through regu lar mail;
                     (c) Parents must not be required to attend a meeting to receive information about
                         SES or to select an SES provider. and
                     (d) Unless a lesser amount is needed to comply with school choice transpon ation
                         and to satisfy all requests for SES, LEAs will expend an amount equal to 20
                         percent of their Tide I allocation for those purposes.
                  o Sample school choice lellers and SES leiters will be revised by the lDOE and
                     submitted to USDQE's Office of Innovation and Improvement (OlI) for its review
                     and approval. In addition, we will submit aChOlce Request Fonn and a SES
                     (Free Tutoring) Provider Selection Fonn to on for rev iew and approval.
                  o Sample choice and SES leiters, a Choice Request Fonn, and an SES Provider
                     Selection Form - all approved by OU -- will be posted on the Division of
                     Compensatory Education (Title I) web site for use by LEAs. Title I program
                     administrators will be instructed to discontinue using any previously provided
                     sample letters.
                  o Addi ti onal information regarding the SES providers' qualifications and evidence
                     of effecti veness will be provided to LEAs for the ir use with parents.
                  o A new Preliminary Data Collection Repon will be used each fa ll to collect school
                      improvement data relevant to choice, SES, corrective action, and restructuri ng
                      requirements under NCLB. Embedded in this repo" will be information to
                      infonn the IDOE of an LEA's compliance with choice and SES provisions (e.g.,
                      schools of choice will be listed to ensure that only schools not identified ror
                      improvement are available for public school choice).




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              December 22, 2004
              Mr, Richard J. Dowd, OlO

              Page 3


                 o     The requirements of choice and SES and the avI.ilability of sample parent
                       notification leiters will be reviewed, again, at the Apri l 2005 Il.!!.tl
                       Administrative Workshops.
                 o     The 200S-06 Title I Application f or Grant will specify choice and SES
                       requirements. All relevant LEAs will be required to submi t copies of their parent
                       notification choice and SES letters wi th their Grant Applications for SEA review
                       and approval.
                 o     The SEA's upcoming on-site compliance monitoring visits to LEAs will include
                       meetings with parents to ascertain their level of aware ness and understanding of
                       choice and SES options under NeLB .

              All of the aforementioned actions already are in place or underway thus ensuring that the
              Indiana Department of Education currently has an adequate process to determine whether
              all lEAs actually offered, timel y and properly, school choice and SES to al l students who
              are eligible for these services.

              Hopefull y, this response addresses those concerns raised in the draft audit report issued
              by your office. Please contact me directl y should additional information be required.


              Si1~          '0/\        ,

              U~i~
              Assistant Superintendent
              Indiana Department of Education
              (3 17) 232-0520

              cc: Division of Compensatory Education, IDOE
                  Kevin McDowell , General Counsel, IDOE




Final Audit Report                                                                                ED-OIG/A05-E0014