December 18, 2008

Kerri L. Briggs, Assistant Secretary
Office of Elementary and Secondary Education
U.S. Department of Education
400 Maryland Avenue, S.W.
Washington, DC 20202

Dear Assistant Secretary Briggs:

We have received your letter dated November 21, 2008, indicating that the U.S. Department of Education (ED) intends to withhold a portion of California’s 2008 fiscal year Title I, Part A administrative funds, totaling $1,000,000. Your letter indicates that the withholding would be based on the ED’s finding of the State’s noncompliance with section 1111(b)(1) and (3) of the No Child Left Behind Act of 2001 (NCLB) and that, allegedly, the State: has not taken the necessary steps to enter into a compliance agreement or to request a timeline waiver; is unlikely to make significant progress in the 2009–10 school year to reduce the percentage of eighth grade students taking an assessment that is aligned with sixth and seventh grade content and academic achievement standards; and has not made meaningful progress to develop an action plan and timeline to come into compliance.

The purpose of this letter is to show cause as to why this withholding of funds is unwarranted and to request that the ED provide a hearing prior to making a final determination regarding the proposed withholding.

This notice to show cause demonstrates that the ED should not withhold the funds because doing so would:

1. Harm, rather than promote, both the State and federal interests.
   
   
2. Fail to recognize the significant, good faith efforts the State has made to come into compliance with the grade level assessment requirements of NCLB for eighth grade mathematics.
   
   
3. Fail to consider the precipitous and unforeseen decline in the financial resources of the State.

I. Background

In 2006, the California Department of Education (CDE) submitted the General Mathematics California Standards Test (General Mathematics Test) to the ED as part of its accountability plan. After full review, the ED approved California’s use of the General Mathematics assessment. Nearly two years later, in February 2008, the ED’s peer review team determined that the mathematics assessment offered to eighth graders was not aligned with the State’s grade level content and academic achievement standards and did not comply with NCLB sections 1111(b)(1) and (3).

In March 2008, the State Board of Education (SBE) took action to address the ED’s finding by voting to approve a plan that called for the development of a new eighth grade mathematics assessment that would be aligned with Algebra I content standards. On April 10, 2008, California promptly initiated discussion with the ED requesting a timeline waiver that would allow the State to develop the new mathematics assessment for eighth grade students and that would call for the test to be operational by 2010. (See Attachment A.)

From March through June of 2008, the State Superintendent of Public Instruction (SSPI) and SBE worked intensely on the planning and development of the new eighth grade mathematics assessment, and the ED indicated its preliminary approval of the timetable for that proposed assessment.

On July 9, 2008, the SBE adopted a policy that did not adopt the CDE’s recommended blueprint for a new mathematics assessment to replace the General Mathematics Test and instead designated the State’s existing Algebra I assessment as the sole test of record for NCLB accountability purposes. The SBE’s action further called for the formation of an agreement with the ED that would give the State sufficient time to develop the capacity needed to implement this policy.

Throughout August 2008, ED staff and SBE negotiated a Memorandum of Agreement, which, if approved by the SBE and the ED, would have granted the State a timeline waiver and provided four years for the implementation of the July 9, 2008, policy decision. If the timeline waiver had been granted, it would have given the State until the end of the 2011–12 school years to demonstrate its compliance with the assessment requirements of NCLB for its eighth grade mathematics students.

The SBE scheduled a vote on the agreement for its November 5, 2008, meeting. However, on October 28, 2008, the Superior Court for Sacramento County issued a temporary restraining order prohibiting the SBE from taking any further action to implement its July 9, 2008, decision. This temporary restraining order was issued in the context of a lawsuit that was filed by the California School Boards Association and the Association of California School Administrators on September 5, 2008, challenging the legality of the SBE’s July 9, 2008, action. A hearing is scheduled for December 19, 2008, at which time the court will consider whether to issue a preliminary injunction. Accordingly, at this juncture, it would be unlawful for the SBE to take any action that would implement the decision it made on July 9, 2008. Counsel for SBE, Ms. Donna Neville, has previously advised Ms. Judith Becker, of the General Counsel’s Office for the ED, of this temporary restraining order and of the surrounding issues in the lawsuit.

On November 21, 2008, the ED sent a letter to California stating that the ED intends to withhold $1,000,000 of California’s fiscal year 2008 Title I, Part A administrative funds for failure to come into compliance with the abovementioned requirements, allegedly failing to take the necessary steps to request a timeline waiver, and allegedly not making significant progress in reducing the percentage of eighth grade students taking an assessment that is aligned with sixth and seventh grade content and academic achievement standards.

II. SBE and CDE Demonstration of Cause as to Why the Withholding Should not Occur

The SBE and CDE fully recognize that some action must occur on the part of the State for it to come into full compliance with the assessment requirements of NCLB. Nonetheless, a withholding of a portion of the State’s Title I, Part A administrative funds would:

1. Harm, rather than promote, both the State and federal interests.
   
   
2. Fail to recognize the significant, good faith efforts the State has made to come into compliance with the grade level assessment requirements of NCLB for eighth grade mathematics.
   
   
3. Fail to consider the precipitous and unforeseen decline in the financial resources of the State.
   

A. The Proposed Withholding Would Harm, Rather than Promote, both the State and Federal Interests.

Both SBE and CDE contend that the withholding will diminish the State’s capacity to provide technical support to districts, ultimately harming both the State and federal interests. NCLB requires the CDE to play a critical technical support role, and that role is central to the implementation of the changes to the eighth grade assessment in 2009–10 and beyond. The withholding would diminish CDE’s capacity to help districts adequately prepare students for assessment in mathematics in eighth grade.

The Title I, Part A administrative funds serve as a vital resource that allows CDE to provide technical assistance and support to an increasing number of schools and districts that are identified for School Improvement, Corrective Action and Restructuring under NCLB. Based on 2006–07 data, CDE serves 961 Title I districts including 10,290 schools. Of the 961 districts, 159 were in School Improvement, known as Program Improvement in California, and serve more than 2.6 million students, or 42 percent of all students enrolled in California’s public schools. Of the 159 districts, 99 have advanced to Corrective Action status.

Because these numbers will continue to grow and because SBE and CDE recognize the urgency in providing quality technical assistance, SBE and CDE use District Assistance and Intervention Teams to provide targeted technical assistance and support to districts in Corrective Action. This assistance is not only critical to state level technical assistance work, but is essential to the success of NCLB and, specifically, to one of its primary objectives: closing achievement gaps.

California has been a national leader in working with districts to close achievement gaps. This is a top priority for California, and the CDE has been working closely with the State’s P–16 Council, WestEd, and the Bill and Melinda Gates Foundation, using philanthropic and state/local funds to help schools understand why the gaps exist and to deploy best practices to help narrow and eventually close them. This essential work is an expressed purpose of NCLB, and CDE relies on federal State administrative funds to help carry out this required technical support work. Districts cannot do this alone and a withholding of $1,000,000 will only diminish CDE’s capacity to provide such assistance and, ultimately, harm the State and federal interest in closing achievement gaps.

B. The Proposed Withholding Fails to Recognize the Significant, Good Faith Efforts the State Has Made to Come into Full Compliance with the Assessment Requirements of NCLB.

Since the receipt of the peer review findings identified in the ED’s February 2006 letter, both SBE and CDE have worked closely with your staff to address the various findings of noncompliance identified in that peer review. As of July 9, 2008, the only remaining peer review finding was the one pertaining to the State’s eighth grade mathematics assessment. At its July 9, 2008, meeting the board took action that was designed to address this last remaining finding.

Due to the pendency of the lawsuit regarding the SBE’s July 9, 2008, decision, it cannot take any action that would further implement that decision. This, however, does not necessarily preclude the adoption of some other proposal by the State which might satisfactorily address the ED’s peer review finding regarding the assessment of eighth grade mathematics in California. Withholding federal funds at this point, after the State has made such a considerable effort to come into full compliance, and while it awaits the court’s ruling as a result of the upcoming December 19, 2008, hearing, would be inequitable, premature and hostile to the possibility of a mutually agreeable solution to the eighth grade mathematics assessment issue.

C. The Proposed Withholding Fails to Consider the Precipitous and Unforeseen Decline in the Financial Resources of the State.

The proposed withholding would be inequitable because it also fails to consider the precipitous and unforeseen decline in the financial resources of the State. The national credit crisis is an event that U.S. Treasury Secretary Henry Paulson has called a "once or twice" in a 100 years financial crisis. The crisis is particularly acute in California where legislators are struggling to close an $11.2 billion deficit that economists believe may expand to more than $28 billion, and perhaps significantly more than that, within one year. This is not simply a foreseeable cyclical downturn, but an exceptional and uncontrollable circumstance warranting unique consideration.

III. Request for a Hearing

SBE and CDE contend that the ED’s proposed withholding action entitles the State to a due process hearing. Section 455(b) of the General Education Provisions Act states that before withholding payments, the Secretary must notify the recipient, in writing, of the following:

1. The intent to withhold payments;
   
   
2. The factual and legal basis of the Secretary’s belief that the recipient has failed to comply substantially with a requirement of law; and
   
   
3. An opportunity for a hearing to be held on a date at least 30 days after the notification has been sent to the recipient.

The ED’s November 21, 2008, letter did not notify the State of its opportunity for a hearing. The right to a hearing is also codified in 34 Code of Federal Regulations 80.43(b). “In taking an enforcement action, the awarding agency will provide the grantee or sub grantee an opportunity for such a hearing, appeal, or other administrative proceeding to which the grantee or sub grantee is entitled under any statute or regulation applicable to the action involved.” The withholding of administrative funds qualifies as an “enforcement action” under section 80.43(a) (1).

IV. Conclusion

Based on the foregoing arguments, the California Department of Education (CDE) and State Board of Education (SBE) contend that the U.S. Education Department (ED) should not withhold $1,000,000 of California's fiscal year 2008 Title I, Part A administrative funds. CDE and SBE will request a hearing to show cause in the Office of Administrative Law Judges in the ED. A copy of that letter will be forthcoming.

We look forward to continued work with the ED to resolve this matter in a timely and efficient manner.

JO/TM:gp
Attachment A [http://www.cde.ca.gov/be/ag/ag/yr08/documents/june08item04a3.pdf] (PDF; 60KB; 4pp.)

cc:   The Honorable Arnold Schwarzenegger, Governor of California
        Gavin Payne, Chief Deputy Superintendent of Public Instruction, California Department of Education
        Deb Merle, Executive Director, California State Board of Education

California Department of Education
1430 N Street
Sacramento, CA 95814

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