POLICY LETTER: June 27, 2002 to Dina O. Harris, Esq., John F. Walsh, Esq. and Arizona Assistant Attorney General Kacey Gregson

Dated 6/27/02By Overnight DeliveryDina O. Harris, Esq.John F. Walsh, Esq.Best Best & Krieger LLP402 West Broadway, 13th FloorSan Diego, California 92101-3542Kacey GregsonAssistant Attorney General1275 West Washington, ACD/EHSPhoenix, Arizona 85007Re:In the Matter of ABC Alternative Learning Center d/b/a Central City Academy v. State of Arizona, Arizona State Superintendent of Public Instruction, and Arizona Department of Education (IDEA-B Appeal)Dear Counsel:Enclosed please find a copy of the decision of the Assistant Secretary of Special Education and Rehabilitative Services in the above-referenced matter. Sincerely,/s/Stephanie S. LeeDirectorOffice of Special Education Programs***************************** *IN RE APPEAL OF *DECISION OF THE ASSISTANT SECRETARY__________________________________________________I.INTRODUCTION. The ABC Alternative Learning Center (ABC) - a public charter school operating in the State of Arizona as a local educational agency (LEA) - has appealed to the United States Department of Education (ED), pursuant to 34 C.F.R. 76.401(d)(5), the Arizona Department of Education's (SEA's) decision to withhold from ABC funds under Part B of the Individuals with Disabilities Education Act (IDEA-B), 20 U.S.C. 1411 1420. We have concluded that the SEA's decision in this matter is supported by substantial evidence and consistent with the IDEA-B and its implementing regulations. Specifically, the SEA's decision was necessary to ensure the provision of a free appropriate public education (FAPE) to a student with disabilities and compliance with the SEA's Letter of Findings issued pursuant to a complaint investigation. The SEA's decision, therefore, is affirmed.II.PROCEDURAL AND FACTUAL BACKGROUND.This appeal concerns the provision of special education and related services under IDEA-B to a student with disabilities enrolled at ABC. As a charter school operating as an LEA, ABC is eligible to receive funding under the IDEA-B for the children with disabilities it provides with special education and related services. ABC, however, is responsible for ensuring that all requirements of the IDEA-B are met. 34 C.F.R. 300.312(b). Similarly, children with disabilities attending charter schools, and their parents, retain all their rights under the IDEA-B. 34 C.F.R. 300.312(a).The Student was determined to be eligible for special education due to a speech and language impairment coupled with a specific learning disability in reading, math, and language. Exhibit 1 to the Administrative Record [Ex.1 to A.R.] at page 1, paragraph 3. An Impartial Due Process Hearing Decision and Order (Due Process Hearing Decision) issued on July 26, 1999 required ABC to provide the Student with a compensatory communications program and occupational therapy and enroll the Student in a communications program consistent with the Student's individualized education program (IEP) on or before August 13, 1999. This communications program was to be provided at a site other than ABC because of ABC's inability to develop such a program in a timely manner. Id. at pages 1-2, paragraph 4. The Arizona Office of Administrative Hearings and Appeals affirmed this Due Process hearing decision on November 29, 1999. Exhibit 2 to AR at page 13. ABC, however, did not comply with the Due Process Hearing Decision's order to place the student in a communications program at a site other than ABC. Exhibit 1 to AR at page 2, paragraph 6. Subsequently, in March 2000, the Student was placed at Summit Elementary Charter School (Summit) at the request of his parents. Id. and Exhibit 3 to AR at page 6.On March 17, 2000, the Student's parents filed, pursuant to 34 C.F.R. 300.660 300.662, a formal complaint with the SEA that alleged that ABC had failed to comply with the Due Process decision. Exhibit 1 to AR at page 2, paragraph 7. Based on that complaint, the SEA investigated the parent's allegations and, on November 30, 2000, issued a Letter of Findings to ABC. Exhibit 3 to AR. The SEA concluded, among other things, that ABC had not complied with the Due Process Hearing Decision's order to place the Student at a communications program at a site other than ABC. Id. at 2-7. ABC was required to work out a contractual arrangement with Summit for providing compensatory educational services to the Student. If ABC and Summit could not agree on the amount of payment for services to the Student, ABC was ordered to reimburse Summit at a rate of $2,500 per month for those services. In addition, ABC was required to compensate Summit for services provided to the Student from March 8, 2000 until the end of the 2000-2001 school year. Id. at 12. On June 20, 2001, the SEA issued a Notice of Intent to Withhold Funding from ABC because, as of that date, ABC had not provided any payment to Summit for services provided to the Student. Exhibit 1 to AR. ABC's appeal of this Notice was heard by a three member-hearing panel appointed by the Arizona Superintendent of Public Instruction. Arizona Department of Education Hearing Appeal Panel Proposed Decision at 1 (August 21, 2001). On August 21, 2001, the hearing panel issued a proposed decision that upheld the Notice of Intent to Withhold IDEA-B Funding from ABC. Id. at 14. The Arizona State Superintendent of Public Instruction accepted that recommended decision on August 24, 2001. August 24, 2001 Letter of Jaime A. Molera, Arizona State Superintendent for Public Instruction. ABC has appealed this decision to ED. III.ANALYSISThe Education Department General Administrative Regulations (EDGAR) provide that the State's findings of fact in a decision to withhold funds are final if supported by substantial evidence. 34 C.F.R. 76.401(d)(5). In order to meet the substantial evidence test, there must be such relevant evidence as a reasonable mind might accept as adequate to support a conclusion See, e.g., Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 477 (1951) (citations omitted). Additionally, under EDGAR, the State's final action is to be overturned only if it is contrary to Federal statutes or regulations that govern the applicable program. 34 C.F.R. 75.401(d)(6)(ii). The parties are in basic agreement on the facts of this case. ABC is responsible for providing special education and related services under the IDEA-B to Student. Exhibit 8 to AR. A Due Process Hearing Decision that was affirmed by the State required ABC, among other things, to place the Student at a site other than ABC for a communications program. The Student was placed at Summit for that program. The dispute in this case, therefore, is not factual but legal in nature. Specifically, the issue raised in this appeal is whether the SEA acted properly in withholding ABC's IDEA-B funds because ABC had not paid Summit for services provided to the Student. ABC contends that the SEA withholding decision is improper because there are no IDEA-B issues in this case due to the fact that the Student, since being placed at Summit, is receiving FAPE. The actual issue in this case, according to ABC, involves a contractual dispute between ABC and Summit on payment for services that Summit has provided to the Student. ABC contends that it would pay Summit $2,500 a month for services to the Student if Summit provided documentation supporting that amount. In the absence of such supporting documentation, ABC contends that it cannot pay the $2,500 consistent with its obligation to ensure that public funds are used properly and that the Student is receiving proper special education and related services. ABC's Opening Brief at 1-2, and 15-17 (December 5, 2001). The SEA contends that, contrary to ABC's assertions, this case is about the provision of FAPE to the Student as required by the IDEA-B. The Student, because ABC has failed to provide him with a communications program at a site other than ABC, as required by the Due Process Hearing Decision, was placed at Summit, where the required communications program (4) Has one or more children with disabilities who can best be served by a regional or State program or servicedelivery system designed to meet the needs of these children. 34 C.F.R. 300.360(a) (emphasis supplied). Finally, the SEA is required to adopt written procedures to resolve complaints that a public agency has violated the IDEA-B. 34 C.F.R. 300.660-300.662. The SEA's withholding action fits securely within this regulatory scheme. ABC, by not paying Summit $2,500 a month for services provided to the Student, defaulted on both its obligation to provide FAPE and to comply with the corrective action required by a Letter of Finding issued by the SEA on November 30, 2000 pursuant to a complaint investigation carried out under 34 C.F.R. 300.660-300.662. The SEA, therefore, was authorized by the IDEA-B to withhold funds from ABC to ensure FAPE for the Student and compliance with its November 30, 2000 Letter of Findings. Moreover, the IDEA-B regulations specifically provide for an SEA using the funds withheld from ABC to pay Summit for the special education and related services provided to the Student. We therefore conclude that the SEA's decision to withhold IDEA-B funds is based on substantial evidence and consistent with the IDEA-B and its implementing regulations.IV.CONCLUSION.The SEA's decision to withhold IDEA-B funds from ABC is hereby affirmed./s/___________________________Robert H. Pasternack, Ph.D.Assistant Secretary for Special Education and Rehabilitative Services.DATED: ____June 27, 2002__ibility for appeals under 34 C.F.R. 76.401(d)(5) that involve IDEA-B has been delegated to the Assistant Secretary for Special Education and Rehabilitative Services (Assistant Secretary). During the administrative proceedings conducted by the SEA, the parties agreed that, because the student is a minor, the student's identity would be protected. To accomplish that purpose, the student was referred to as Student and the father of the Student was referred to as Father. That practice will be followed in this Decision. ABC, in contesting the SEA's withholding decision, also argues that the required payment of $2,500 to Summit per month for services to Student, in the absence of appropriate documentation, could result in ABC violating a provision of Arizona's State Constitution, the anti-gift clause, and possible liability under audits required by State law. Appellant's Opening Brief at 15-17. These issues involve matters of State law, not the IDEA-B, and will not, as a consequence, be addressed in this Decision. PAGE Page 2 -- Letter to Counsel in IDEA-B Appeal to the SecretaryPAGE PAGE 13)Wcde0EG>@FV)8~HW&=>CORTWZ|*##&'2'3'''q66e*M)*?Sk!^^ STfDC$Ef&d^d^`^``^]=^='>(>?{A|AAAAAAAAAAAAAAALZRZTZ&`#$&`#$hh]h`h&`#$^=_=(>)>s?{???@@pAxA|A}AAAAAAAAAAAAAAAAAAAALZPZRZTZOJQJ^J0JmHnHu0J01h/ =!"#$%#01h/ =!"#$%13Dated 6/27/02By Overnight DeliveryDina O. Harris, Esq.John F. Walsh, Esq.Best Best & Krieger LLP402 West Broadway, 13th FloorSan Diego, California 92101-3542Kacey GregsonAssistant Attorney General1275 West Washington, ACD/EHSPhoenix, Arizona 85007Re:In the Matter of ABC Alternative Learning Center d/b/a Central City Academy v. State of Arizona, Arizona State Superintendent of Public Instruction, and Arizona Department of Education (IDEA-B Appeal)Dear Counsel:Enclosed please find a copy of the decision of the Assistant Secretary of Special Education and Rehabilitative Services in the above-referenced matter. Sincerely,/s/Stephanie S. LeeDirectorOffice of Special Education Programs***************************** *IN RE APPEAL OF *DECISION OF THE ASSISTANT SECRETARY__________________________________________________I.INTRODUCTION. The ABC Alternative Learning Center (ABC) - a public charter school operating in the State of Arizona as a local educational agency (LEA) - has appealed to the United States Department of Education (ED), pursuant to 34 C.F.R. 76.401(d)(5), the Arizona Department of Education's (SEA's) decision to withhold from ABC funds under Part B of the Individuals with Disabilities Education Act (IDEA-B), 20 U.S.C. 1411 1420. We have concluded that the SEA's decision in this matter is supported by substantial evidence and consistent with the IDEA-B and its implementing regulations. Specifically, the SEA's decision was necessary to ensure the provision of a free appropriate public education (FAPE) to a student with disabilities and compliance with the SEA's Letter of Findings issued pursuant to a complaint investigation. The SEA's decision, therefore, is affirmed.II.PROCEDURAL AND FACTUAL BACKGROUND.This appeal concerns the provision of special education and related services under IDEA-B to a student with disabilities enrolled at ABC. As a charter school operating as an LEA, ABC is eligible to receive funding under the IDEA-B for the children with disabilities it provides with special education and related services. ABC, however, is responsible for ensuring that all requirements of the IDEA-B are met. 34 C.F.R. 300.312(b). Similarly, children with disabilities attending charter schools, and their parents, retain all their rights under the IDEA-B. 34 C.F.R. 300.312(a).The Student was determined to be eligible for special education due to a speech and language impairment coupled with a specific learning disability in reading, math, and language. Exhibit 1 to the Administrative Record [Ex.1 to A.R.] at page 1, paragraph 3. An Impartial Due Process Hearing Decision and Order (Due Process Hearing Decision) issued on July 26, 1999 required ABC to provide the Student with a compensatory communications program and occupational therapy and enroll the Student in a communications program consistent with the Student's individualized education program (IEP) on or before August 13, 1999. This communications program was to be provided at a site other than ABC because of ABC's inability to develop such a program in a timely manner. Id. at pages 1-2, paragraph 4. The Arizona Office of Administrative Hearings and Appeals affirmed this Due Process hearing decision on November 29, 1999. Exhibit 2 to AR at page 13. ABC, however, did not comply with the Due Process Hearing Decision's order to place the student in a communications program at a site other than ABC. Exhibit 1 to AR at page 2, paragraph 6. Subsequently, in March 2000, the Student was placed at Summit Elementary Charter School (Summit) at the request of his parents. Id. and Exhibit 3 to AR at page 6.On March 17, 2000, the Student's parents filed, pursuant to 34 C.F.R. 300.660 300.662, a formal complaint with the SEA that alleged that ABC had failed to comply with the Due Process decision. Exhibit 1 to AR at page 2, paragraph 7. Based on that complaint, the SEA investigated the parent's allegations and, on November 30, 2000, issued a Letter of Findings to ABC. Exhibit 3 to AR. The SEA concluded, among other things, that ABC had not complied with the Due Process Hearing Decision's order to place the Student at a communications program at a site other than ABC. Id. at 2-7. ABC was required to work out a contractual arrangement with Summit for providing compensatory educational services to the Student. If ABC and Summit could not agree on the amount of payment for services to the Student, ABC was ordered to reimburse Summit at a rate of $2,500 per month for those services. In addition, ABC was required to compensate Summit for services provided to the Student from March 8, 2000 until the end of the 2000-2001 school year. Id. at 12. On June 20, 2001, the SEA issued a Notice of Intent to Withhold Funding from ABC because, as of that date, ABC had not provided any payment to Summit for services provided to the Student. Exhibit 1 to AR. ABC's appeal of this Notice was heard by a three member-hearing panel appointed by the Arizona Superintendent of Public Instruction. Arizona Department of Education Hearing Appeal Panel Proposed Decision at 1 (August 21, 2001). On August 21, 2001, the hearing panel issued a proposed decision that upheld the Notice of Intent to Withhold IDEA-B Funding from ABC. Id. at 14. The Arizona State Superintendent of Public Instruction accepted that recommended decision on August 24, 2001. August 24, 2001 Letter of Jaime A. Molera, Arizona State Superintendent for Public Instruction. ABC has appealed this decision to ED. III.ANALYSISThe Education Department General Administrative Regulations (EDGAR) provide that the State's findings of fact in a decision to withhold funds are final if supported by substantial evidence. 34 C.F.R. 76.401(d)(5). In order to meet the substantial evidence test, there must be such relevant evidence as a reasonable mind might accept as adequate to support a conclusion See, e.g., Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 477 (1951) (citations omitted). Additionally, under EDGAR, the State's final action is to be overturned only if it is contrary to Federal statutes or regulations that govern the applicable program. 34 C.F.R. 75.401(d)(6)(ii). The parties are in basic agreement on the facts of this case. ABC is responsible for providing special education and related services under the IDEA-B to Student. Exhibit 8 to AR. A Due Process Hearing Decision that was affirmed by the State required ABC, among other things, to place the Student at a site other than ABC for a communications program. The Student was placed at Summit for that program. The dispute in this case, therefore, is not factual but legal in nature. Specifically, the issue raised in this appeal is whether the SEA acted properly in withholding ABC's IDEA-B funds because ABC had not paid Summit for services provided to the Student. ABC contends that the SEA withholding decision is improper because there are no IDEA-B issues in this case due to the fact that the Student, since being placed at Summit, is receiving FAPE. The actual issue in this case, according to ABC, involves a contractual dispute between ABC and Summit on payment for services that Summit has provided to the Student. ABC contends that it would pay Summit $2,500 a month for services to the Student if Summit provided documentation supporting that amount. In the absence of such supporting documentation, ABC contends that it cannot pay the $2,500 consistent with its obligation to ensure that public funds are used properly and that the Student is receiving proper special education and related services. ABC's Opening Brief at 1-2, and 15-17 (December 5, 2001). The SEA contends that, contrary to ABC's assertions, this case is about the provision of FAPE to the Student as required by the IDEA-B. The Student, because ABC has failed to provide him with a communications program at a site other than ABC, as required by the Due Process Hearing Decision, was placed at Summit, where the required communications program (4) Has one or more children with disabilities who can best be served by a regional or State program or servicedelivery system designed to meet the needs of these children. 34 C.F.R. 300.360(a) (emphasis supplied). Finally, the SEA is required to adopt written procedures to resolve complaints that a public agency has violated the IDEA-B. 34 C.F.R. 300.660-300.662. The SEA's withholding action fits securely within this regulatory scheme. ABC, by not paying Summit $2,500 a month for services provided to the Student, defaulted on both its obligation to provide FAPE and to comply with the corrective action required by a Letter of Finding issued by the SEA on November 30, 2000 pursuant to a complaint investigation carried out under 34 C.F.R. 300.660-300.662. The SEA, therefore, was authorized by the IDEA-B to withhold funds from ABC to ensure FAPE for the Student and compliance with its November 30, 2000 Letter of Findings. Moreover, the IDEA-B regulations specifically provide for an SEA using the funds withheld from ABC to pay Summit for the special education and related services provided to the Student. We therefore conclude that the SEA's decision to withhold IDEA-B funds is based on substantial evidence and consistent with the IDEA-B and its implementing regulations.IV.CONCLUSION.The SEA's decision to withhold IDEA-B funds from ABC is hereby affirmed./s/___________________________Robert H. Pasternack, Ph.D.Assistant Secretary for Special Education and Rehabilitative Services.DATED: ____June 27, 2002__ibility for appeals under 34 C.F.R. 76.401(d)(5) that involve IDEA-B has been delegated to the Assistant Secretary for Special Education and Rehabilitative Services (Assistant Secretary). During the administrative proceedings conducted by the SEA, the parties agreed that, because the student is a minor, the student's identity would be protected. To accomplish that purpose, the student was referred to as Student and the father of the Student was referred to as Father. That practice will be followed in this Decision. ABC, in contesting the SEA's withholding decision, also argues that the required payment of $2,500 to Summit per month for services to Student, in the absence of appropriate documentation, could result in ABC violating a provision of Arizona's State Constitution, the anti-gift clause, and possible liability under audits required by State law. Appellant's Opening Brief at 15-17. These issues involve matters of State law, not the IDEA-B, and will not, as a consequence, be addressed in this Decision. PAGE Page 2 -- Letter to Counsel in IDEA-B Appeal to the SecretaryPAGE PAGE 13)Wcde0EG>@FV)8~HW&=>CORTWZ|*##&'2'3'''q66e*M)*?Sk!^^ STfDC$Ef&d^d^`^``^]=^='>(>?{A|AAAAAAAAAAAAAAALZRZTZ&`#$&`#$hh]h`h&`#$^=_=(>)>s?{???@@pAxA|A}AAAAAAAAAAAAAAAAAAAALZPZRZTZOJQJ^J0JmHnHu0J01h/ =!"#$%#01h/ =!"#$%13