05-4199. Arizona Department of Economic Security; Written Findings and Decision and Compliance Agreement Under the Infants and Toddlers With Disabilities Program-Part C of the Individuals With Disabilities Education Act

AGENCY:

Office of Special Education Programs, Office of Special Education and Rehabilitative Services, Department of Education.

ACTION:

Notice of written findings and decision and compliance agreement.

SUMMARY:

Section 457 of the General Education Provisions Act (GEPA) authorizes the U.S. Department of Education (Department) to enter into a compliance agreement with a recipient that is failing to comply substantially with Federal program requirements. In order to enter into a compliance agreement, the Department must determine, in written findings, that the recipient cannot comply until a future date with the applicable program requirements and that a compliance agreement is a viable means of bringing about such compliance. On December 16, 2004, the Department entered into a compliance agreement with the Arizona Department of Economic Security (DES). Under section 457(b)(2) of GEPA, the written findings and decision and compliance agreement must be published in the Federal Register.

FOR FURTHER INFORMATION CONTACT:

Julia Martin, U.S. Department of Education, 400 Maryland Avenue, SW., room 4037, Potomac Center Plaza, Washington DC 20004-2600. Telephone [phone].

If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service (FRS) at 1-800-877-8339.

Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION:

Under Part C of the Individuals with Disabilities Education Act (Part C), the Department provides funds to States to “maintain and implement a statewide, comprehensive, coordinated, multidisciplinary, interagency system to provide early intervention services for infants and toddlers with disabilities and their families.” 20 U.S.C. 1433, 1435(a)(2), 1437(a)(3)(A). Early intervention services are services that are, among other things, “designed to meet the developmental needs of an infant or toddler with a disability in any one or more of the following areas—(i) physical development; (ii) cognitive development; (iii) communication development; (iv) social or emotional development; or (v) adaptive development”; “are provided by qualified personnel”; “to the maximum extent appropriate, are provided in natural environments, including the home, and community settings in which children without disabilities participate”; and “are provided in conformity with an individualized family service plan adopted in accordance with section 1436 of this title.” 20 U.S.C. 1432(4)(C), (F), (G) and (H).

On March 15, 2004, in response to Arizona's Part C Federal fiscal year (FFY) 2001 Annual Performance Report (APR) and following a State verification monitoring visit by the Department's Office of Special Education Programs (OSEP) to Arizona in December 2003, OSEP issued two letters documenting DES's continued non-compliance with the following four requirements:

(1) Utilizing effective monitoring procedures to ensure the identification and correction of noncompliance with Part C under 34 CFR 303.501;

(2) Conducting evaluations and assessments and holding the initial Individualized Family Service Plan (IFSP) meeting within 45 days from referral under 34 CFR 303.321(e)(2), 303.322(e)(1) and 303.342(a);

(3) Providing in a timely manner to all eligible infants and toddlers with disabilities, including infants and toddlers on reservations, early intervention services identified on the child's IFSP under 34 CFR 303.342(e); and

(4) Ensuring that all service coordination functions are implemented under 34 CFR 303.23 and 303.344(g). These same noncompliance findings were four of the seven findings originally identified in OSEP's 2000 Arizona Part C Monitoring Report.

On March 25, 2004, DES Director, David Berns, requested that the Department consider entering into a Compliance Agreement with DES under Part C of the IDEA. Before entering into a compliance agreement, the Department must hold a hearing at which the recipient, individuals affected by any potential compliance agreement, including infants and toddlers with disabilities and their families or other representatives, and other interested parties are invited to participate. In that hearing, the recipient has the burden of persuading the Department that: (1) Full compliance with the applicable requirements of law is not feasible until a future date; and (2) that a compliance agreement is a viable means for bringing about such compliance in no more than three years. 20 U.S.C. 1234f(b)(1) and (c). If, on the basis of all the evidence available, the Secretary determines that the recipient has met that burden, the Secretary is to make written findings to that effect and publish those findings, together with the substance of the compliance agreement, in the Federal Register. 20 U.S.C. 1234f(b)(2).

On May 20, 2004, Department officials conducted a public hearing in Phoenix, Arizona regarding DES's ability to meet certain Part C requirements. The testimony and materials either presented at the hearing, or submitted in relation to the hearing, by DES representatives, other State agency representatives, parent and State Interagency Coordinating Council representatives, Part C early intervention providers, and other affected or interested individuals confirmed that, as required under 20 U.S.C. 1234f, full compliance with Part C requirements by DES is genuinely not feasible until a future date, but that DES will be able to come into full compliance with Part C within three years. Testimony and written submissions supported the development of a compliance agreement that would bring DES into compliance with Part C as soon as feasible and would allow continuation of Part C funding by OSEP to Arizona during this process. As indicated in the Secretary's Written Findings and Decision of the Secretary, the Department has determined that a compliance agreement is appropriate to address the four areas of Part C non-compliance.

As required by section 457(b)(2) of GEPA, 20 U.S.C. 1234f(b)(2), the text of the Secretary's Decision is set forth as Appendix A and the Compliance Agreement is set forth as Appendix B of this notice.

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Note:

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(Authority: 20 U.S.C. 1234c, 1234f, 1431 through 1445)

Dated: February 25, 2005.

John H. Hager,

Assistant Secretary for Special Education and Rehabilitative Services.

Department of Education

In the matter of the Request of the Arizona Department of Economic Security to Enter into a Compliance Agreement; Written Findings and Decision of the Secretary.

I. Introduction

The United States Department of Education (Department) has determined, pursuant to 20 U.S.C. 1234c, that the Arizona Department of Economic Security (DES) has failed to comply substantially with the requirements of Part C of the Individuals with Disabilities Education Act (Part C or IDEA), codified at 20 U.S.C. 1401 through 1407 and 1431 through 1445, and its implementing regulations at 34 CFR part 303. DES is the lead agency designated by the Governor of Arizona to implement Arizona's statewide system of early intervention services under Part C of the IDEA. The Arizona Early Intervention Program (DES/AzEIP) is the office within DES that is responsible for the daily administration and oversight of Arizona's early intervention program for infants and toddlers with disabilities and their families under Part C of the IDEA.^[1]

On March 15, 2004, in response to Arizona's Part C Federal fiscal year (FFY) 2001 Annual Performance Report (APR) and following a State verification monitoring visit by the ED Office of Special Education Programs (OSEP) to Arizona in December 2003, OSEP issued two letters documenting DES's continued noncompliance with the following four Part C requirements:

(1) Utilizing effective monitoring procedures to ensure the identification and correction of noncompliance with Part C under 34 CFR 303.501;

(2) Conducting evaluations and assessments and holding the initial Individualized Family Service Plan (IFSP) meeting within 45 days from initial referral under 34 CFR 303.321(e)(2), 303.322(e)(1) and 303.342(a);

(3) Providing in a timely manner all early intervention services identified on the IFSP to all eligible infants and toddlers with disabilities, including infants and toddlers on reservations, under 34 CFR 303.342(e); and

(4) Ensuring that all service coordination functions are implemented under 34 CFR 303.23 and 303.344(g).

These four noncompliance findings were part of seven findings originally identified in OSEP's 2000 Arizona Part C Monitoring Report.^[2] As noted below, although DES has addressed three of the findings from OSEP's 2000 monitoring report, DES has indicated, and the Department has determined, that DES will need additional time to make systemic changes in its monitoring, data, service delivery, and other systems in order to ensure correction of the remaining four findings.

During OSEP's December 2003 verification visit to the State, DES and OSEP officials discussed the possibility of a compliance agreement, which would allow the State up to three years to correct noncompliance that the State could not effectively correct within a shorter period of time. On March 25, 2004, DES sent a letter to OSEP requesting that OSEP consider entering into a compliance agreement as a way to resolve the State's Part C noncompliance issues. On May 20, 2004, Department officials conducted a public hearing in Arizona in accordance with the GEPA requirements of 20 U.S.C. 1234f(b), at which oral and written testimony were received. Witnesses representing DES/AzEIP, the State Interagency Coordinating Council (SICC), other DES/AzEIP state agency partners, early intervention providers and other concerned organizations (including State stakeholders) testified at this hearing on the question of whether the Department should grant DES's request to enter into a Compliance Agreement. Additional written testimony was submitted to the Department both prior to and after the public hearing.

The Department has reviewed all oral and written testimony submitted, the Compliance Agreement DES has signed, and other relevant materials.^[3] On the basis of this evidence, the Department concludes, and issues these written findings as required by 20 U.S.C. 1234f(b)(2), that DES has met its burden of establishing that:

(1) Compliance by DES with Part C is not feasible until a future date, and

(2) DES will be able to carry out the terms and conditions of the Compliance Agreement it has signed and will come into full compliance with Part C by the end of the term of this Agreement.

During the effective period of the Compliance Agreement, which expires three years from the date of this decision, DES will continue to be eligible to receive Part C funds as long as it complies with all the terms and conditions of the Agreement.

II. Legal Basis for Entering Into a Compliance Agreement: Requirements Under Part C and GEPA

A. Part C Requirements

Part C was passed in response to Congress's finding that “there is an urgent and substantial need * * * to enhance the development of infants and toddlers with disabilities and to minimize their potential for developmental delay.” 20 U.S.C. 1431(a)(1). Congress established Part C “to provide financial assistance to States * * * to develop and implement a statewide, comprehensive, coordinated, multidisciplinary, interagency system that provides early intervention services for infants and toddlers with disabilities and their families.” ^[4] 20 U.S.C. 1441(b)(1). Early intervention services are defined as “developmental services that:—

(A) Are provided under public supervision;

(B) Are provided at no cost except where Federal or State law provides for a system of payments by families, including a schedule of sliding fees;

(C) Are designed to meet the developmental needs of an infant or toddler with a disability in any one or more of the following areas—(i) physical development; (ii) cognitive development; (iii) communication development; (iv) social or emotional development; or (v) adaptive development;

(D) Meet the standards of the State in which they are provided, including the requirements of this part;

(E) Include [list of early intervention services such as speech, occupational, physical therapy, etc.];

(F) Are provided by qualified personnel * * *;

(G) To the maximum extent appropriate, are provided in natural environments, including the home, and community settings in which children without disabilities participate; and

(H) Are provided in conformity with an individualized family service plan [IFSP] adopted in accordance with section 636 [20 U.S.C. 1436].”

20 U.S.C. 1432(4); 34 CFR 303.12.

In order to ensure that early intervention services are provided in compliance with Part C, a State must ensure it has a statewide system that addresses Part C requirements regarding: general supervision (including monitoring and data collection and reporting), child find and public awareness, timely evaluations and assessments, IFSP development, provision of early intervention services in natural environments, and transition planning. Under Part C, the lead agency's general supervision responsibilities include: (1) Monitoring for compliance and performance, (2) ensuring correction and enforcement of identified deficiencies, (3) providing technical assistance and training and (4) ensuring the provision of procedural safeguards through the due process and State complaint procedures. 20 U.S.C. 1435(a)(10)(A); 34 CFR 303.501, 303.403, 303.420, and 303.510 through 303.512. The Part C general supervision requirements must be read in conjunction with DES's responsibility under GEPA at 20 U.S.C. 1232d(b)(3), to adopt and use proper methods of administering the Part C program, including, among other requirements: (1) Monitoring of agencies, institutions, and organizations responsible for carrying out Part C; (2) the enforcement of the obligations imposed on those agencies, institutions, and organizations under Part C; (3) providing technical assistance, where necessary, to such agencies, institutions, and organizations; and (4) the correction of deficiencies in program operations that are identified through monitoring or evaluation.

Under Part C, the lead agency is required to ensure that all programs and activities used by the State to carry out Part C (whether or not they receive Part C funds) are monitored for compliance with Part C requirements and that interagency agreements are in place to ensure that services are provided in a timely manner. 20 U.S.C. 1435(a)(10)(A); 34 CFR 303.501 and 303.523 through 303.528. When the lead agency determines that program providers and other agencies, institutions and organizations that are part of the Part C system in a State are not in compliance, Part C requires the lead agency to enforce the requirements of Part C and correct deficiencies that are identified through monitoring and its general supervision authority. 20 U.S.C. 1435(a)(10)(A); 34 CFR 303.501(b)(2) and (4). The lead agency is also responsible for providing technical assistance and training to agencies, institutions and organizations that administer the Part C program. 20 U.S.C. 1435(a)(10)(A); 34 CFR 303.501(b)(3). Part C requires that there be a single line of responsibility and clear interagency guidelines to ensure that one agency, the lead agency, is responsible for administering Part C in the State. 20 U.S.C. 1435(a)(10)(A); 34 CFR 303.500. General supervision has been a challenge for DES due to the number of agencies that either directly provide or contract with private entities and individuals to provide early intervention services.

Other Part C requirements include ensuring that all infants and toddlers with disabilities and their families: are referred into the program in a timely manner (34 CFR 303.321(e)(2), 303.322(e)(1) and 303.342(a)), are assigned a single service coordinator (34 CFR 303.23(a)(2)) who helps the child and family through coordination and other activities (34 CFR 303.23(a)(2) and (b)), are evaluated in all five developmental areas (34 CFR 303.322(c)(3)(ii)), and, if determined eligible, have IFSPs developed in a timely manner that address all content requirements (34 CFR 303.342(a) and 303.344), are provided those early intervention services listed on their IFSP (34 CFR 303.342(e)), and receive timely transition meetings and plans as they exit the program (34 CFR 303.148(b) and 303.344(h)). This system is intended to be seamless so that an infant or toddler with a disability and the family receive all appropriate early intervention services to meet the unique developmental needs of the child and to support the family. DES's failure to comply with key Part C requirements (monitoring and correction, timely evaluations and assessments, service coordination and provision of early intervention services) have led to waiting lists for infants and toddlers and their families for evaluations and assessments as well as early intervention services.

B. Authority To Enter Into a Compliance Agreement Under Part C and GEPA

If a State fails to comply substantially with the requirements of Part C, the IDEA authorizes the Department to withhold funds from that State or refer the matter to the Department of Justice. 20 U.S.C. 1416(a) and 1442. GEPA provides the Department with additional enforcement options for a grant recipient that the Department concludes is “failing to comply substantially with any requirements of law applicable to such funds.” 20 U.S.C. 1234c. These remedies include issuing a cease and desist order. 20 U.S.C. 1234c. As an alternative to withholding funds, issuing a cease and desist order, or referral to the Department of Justice, the Department may enter into a Compliance Agreement with a recipient that is failing to comply substantially with specific program requirements. 20 U.S.C. 1234f. In this instance, and at DES's request, the Department has determined it is appropriate to address DES's failure to comply substantially with the requirements of Part C through a Compliance Agreement.

The purpose of a Compliance Agreement is “to bring the recipient into full compliance with the applicable requirements of the law as soon as feasible and not to excuse or remedy past violations of such requirements.” 20 U.S.C. 1234f(a). Before entering into a Compliance Agreement, the Department must hold a public hearing at which the recipient, affected infants and toddlers with disabilities and their parents or their representatives, and other interested parties are invited to participate. At the hearing, the recipient has the burden of persuading the Department that: (1) Full compliance with the applicable requirements of law is not feasible until a future date and (2) a compliance agreement is a viable means for bringing about such compliance in no more than three years. 20 U.S.C. 1234f(b)(1). If, on the basis of all the evidence available to the Department, the Secretary determines that the recipient has met that burden, the Secretary is to make written findings to that effect and publish those findings and the Secretary's decision, together with the substance of the Compliance Agreement, in the Federal Register. 20 U.S.C. 1234f(b)(2).

A Compliance Agreement must set forth an expiration date not later than 3 years from the date of the Secretary's written findings and decision under 20 U.S.C. 1234f(b)(2), by which time the recipient must be in full compliance with all program requirements. In addition, the Compliance Agreement must contain the terms and conditions with which the recipient must comply during the period that the Agreement is in effect. 20 U.S.C. 1234f(c). If the recipient fails to comply with any of the terms and conditions of the Compliance Agreement, the Department may consider the Agreement no longer in effect and may take any action authorized by law, including withholding of funds, issuing of a cease and desist order, or referring the matter to the Department of Justice. 20 U.S.C. 1234f(d).

III. DES's Ability To Meet the Requirements of the Compliance Agreement

In determining whether it is appropriate to enter into a Compliance Agreement with DES, the Department must first determine two issues. First, the Department must determine: Can DES come immediately into compliance with Part C (including its monitoring, timely evaluations and assessments, service coordination and provision of early intervention services requirements)? 20 U.S.C. 1234f(b). Second, the Department must determine: Will DES be able to come into compliance with the applicable Part C requirements within a period of no more than three years? If the Department cannot answer the first question in the negative and the second question in the affirmative, then it is inappropriate for the Department to enter into a Compliance Agreement with DES under 20 U.S.C. 1234f. In arriving at the terms of the Compliance Agreement, DES must not only come into full compliance by the end of the effective period of the Compliance Agreement, it must also make steady and measurable progress toward the Agreement's objectives while it is in effect.

A. DES Cannot Immediately Come Into Compliance With Part C Requirements

DES's failure to comply with four major Part C requirements, as documented in OSEP's March 15, 2004 monitoring and APR letters and OSEP's 2000 monitoring report and acknowledged by DES, is caused by a number of complicating factors such as the fact that early intervention services in Arizona are provided through a number of different interagency and intra-agency programs and private contractors and provided in rural settings including reservations, and, as a result, cannot be corrected immediately. DES's testimony and that of other witnesses at the Department's May 20, 2004 public hearing (including other State agency representatives, providers, SICC representatives and other Part C stakeholders) provided compelling support for this conclusion.

1. DES Cannot Come Into Compliance Immediately With the Four Part C Requirements That Were the Subject of OSEP's Findings

As noted below and confirmed through the testimony of DES, State agency representatives, early intervention providers, Arizona SICC representatives and others, DES is not in compliance now, and cannot immediately come into compliance, with the following specific Part C requirements that were ongoing findings of noncompliance originally identified in OSEP's 2000 report and reiterated in OSEP's March 15, 2004 letters (following OSEP's December 2003 verification monitoring visit to the State):

(1) Utilizing effective monitoring procedures to ensure the identification and correction of noncompliance with Part C under 34 CFR 303.501;

(2) Conducting evaluations and assessments and holding the initial Individualized Family Service Plan (IFSP) meeting within 45 days from initial referral under 34 CFR 303.321(e)(2), 303.322(e)(1) and 303.342(a);

(3) Providing in a timely manner all early intervention services identified on the IFSP to all eligible infants and toddlers with disabilities, including infants and toddlers on reservations, under 34 CFR 303.342(e); and

(4) Ensuring that all service coordination functions are implemented under 34 CFR 303.23 and 303.344(g).

2. DES Cannot Immediately Come Into Compliance With Part C Due to the Need for Major Systemic Changes To Address System Capacity Issues, Coordinate Monitoring, Policies, and Data Systems Across All Participating Agencies and Providers and Deliver Team-Based Services

At the May 20, 2004 hearing and in its testimony, DES acknowledged that it is not complying with Part C and cannot immediately come into compliance with Part C requirements. In her presentation, DES/AzEIP Director Molly Dries identified at least five major barriers to DES's ability to come into immediate compliance with Part C: (1) The lack of a coordinated interagency monitoring system to identify and correct noncompliance; (2) the lack of interagency coordination on policies and procedures to ensure they reflect Part C requirements; (3) the lack of coordinated data systems between and within participating agencies to ensure that Part C compliance elements are reflected; (4) insufficient system capacity to ensure adequate personnel to provide timely evaluations and assessments and early intervention services; and (5) a team-based model of service delivery that can track children from referral to exit from the Part C program.

One major barrier to immediate compliance is DES's need to establish an interagency monitoring system and coordinated policies and procedures, since Arizona's statewide system of early intervention services involves efforts from five different State agencies and two major programs within DES as well as numerous private contractors. Five different agencies (including DES) conduct child find, evaluations and assessments, and provide service coordination and early intervention services and transition planning. At the public hearing, DES officials testified that DES does not have a system to monitor its intra- and interagency State counterparts that provide early intervention services or the private providers that conduct evaluations and assessments and provide service coordination and early intervention services to infants and toddlers with disabilities and their families. DES has just begun to establish protocols for monitoring of all Part C requirements but has yet to conduct monitoring of other State agency partners. DES has established a dialogue for working with each of these agencies on an ongoing basis to coordinate all Part C activities including monitoring these agencies' compliance with Part C requirements and providing joint and collaborative training and technical assistance. However, as noted by all State agency representatives who testified at the hearing, much work remains to be done. As DeAnn Davies (SICC Chair) submitted in her written testimony, “* * * state systems were fragmented from each other. * * * The state AzEIP office did not hold the critically needed strength in order to demand compliance from partnering agencies * * *.” DES must undertake major interagency efforts to ensure that the monitoring systems are coordinated, State agency partner data systems reflect Part C requirements and all agencies' policies and procedures are aligned with Part C requirements.

DES cannot immediately address this barrier. The first critical step will be the development of memoranda of agreements that address each agency's responsibility in addressing Part C's requirements. Another critical step will be interagency cooperation to allow DES to monitor, based on Part C standards, each State participating agency for Part C requirements such as timely evaluations and assessments and provision of early intervention services and service coordination. DES also intends to align with its other agency partners all participating programs' and agencies' policies and procedures on substantive Part C requirements. Defining the respective agencies' responsibilities, implementing an interagency monitoring system that can identify and correct noncompliance, and aligning policies and procedures are all necessary to ensure compliance with Part C.

A second barrier is the need for DES/AzEIP to review (and revise if necessary) its data system (ACTS) to ensure that it includes critical Part C compliance elements and align its data system with participating State agencies and programs. DES officials testified that ensuring complete and accurate data reporting is critical for program evaluation and decision-making. Securing baseline compliance data is the first major step in DES's plan toward identifying and addressing system capacity and other root causes for each of the areas of noncompliance identified by OSEP. At the time of OSEP's December 2003 verification monitoring visit, DES did not collect data on the number of infants and toddlers waiting for evaluations and assessments and the number of infants and toddlers with disabilities and their families who were waiting for early intervention services. DES will revise its ACTS data system to collect and report on this information. Revising and verifying its new data system and aligning it with other State agency data systems will take DES more than one year. Effectively utilizing the data from the new data system as part of its new monitoring system to verify both noncompliance areas and corrective action results will take DES even longer.

Another major barrier that affects DES’ ability to comply with Part C is the capacity of the system to serve the number of infants and toddlers referred to the program. One possible cause is the lack of sufficient qualified personnel to conduct evaluations and assessments and provide early intervention services. Testimony from DES officials, tribal representatives, and early intervention providers cited personnel recruitment and retention, provider rate structure and other personnel and system issues as among the major challenges for timely evaluations and assessments and early intervention service delivery. DES cannot, acting on its own, immediately address this personnel shortage. DES has been unable to find providers who are willing to travel to rural areas or reservations or, in some cases, has discovered that different agency or funding source service provider rate structures create disincentives for provision of early intervention services in natural environments. Under the Compliance Agreement, DES will develop relationships with institutions of higher education, and also will develop regional service provider directories to better track existing personnel and recruit and retain new personnel in needed professions. Removing these system capacity barriers and obtaining needed personnel will require a long-term effort that will involve working with other organizations in Arizona to ensure that qualified personnel are available to conduct evaluations and assessments and provide early intervention services.

Finally, DES identified the lack of a streamlined system from referral to service delivery and a team-based approach for delivering services as barriers to the timely provision of evaluations and assessments and early intervention services. As Mary Ann Sheely, an early intervention occupational therapy provider, noted in her testimony, “* * * the process of evaluating a child and then determining the appropriate services still lacks coordination and clear communication methods with families. The current system is too complicated, due to the many steps it takes to complete.” However, as DES officials and State agency witnesses testified, envisioning and implementing such a system from the initial planning process (IPP) to the delivery of all early intervention services by all participating agencies and providers cannot occur immediately; interagency agreements, policies and procedures, and provider contracts must all be reviewed and revised to ensure consistency in a service delivery model that maximizes personnel resources while ensuring that early intervention services are coordinated for the infant or toddler with a disability and his or her family.

3. Testimony From Arizona State Agency Representatives, Early Intervention Providers, SICC Representatives and Others All Confirms That DES Cannot Immediately Come Into Compliance

Testimony from other individuals also confirmed that DES cannot come into full compliance with Part C requirements immediately. Representatives from other Arizona agencies that provide early intervention services, early intervention service providers, SICC representatives and others all testified that DES will need additional time to achieve full compliance. David Bern, DES Director, confirmed that although DES does not wish to take more time than necessary, DES will need additional time to address the remaining findings. Representatives from five other State Part C agency partners (Ida Fitch of DDD, Sue Juarez of ACCESS, Lynn Busenbark of ADE, Barbara Hess of ADHS, and Judy Parish of ASDB) testified that DES needs more time to ensure interagency coordination among the agencies that are part of the early intervention system in Arizona and align data systems and policies and procedures. Maria Bravo, SICC Vice-Chair and a grandparent of a child with a disability, testified that DES needed more time to work with its interagency partners.

Other witnesses, including private contractors, SICC representatives, parents of children with disabilities, and early intervention providers, confirmed that DES continues to face long-term challenges in complying with Part C, including system capacity issues and availability of qualified personnel to provide evaluations and assessments and early intervention services. Testimony from these witnesses confirmed that waiting lists continue to exist for evaluations and assessments and for early intervention services, although a few witnesses testified that the waiting lists appear to be decreasing. (Melanie Taylor (a parent) described how the delays had previously been as long as six months; Annabelle Ratley (of the Blake Foundation) noted that children are being seen sooner and eligibility is being determined faster; and George Hatchell (of DES/AzEIP) talked about the time for development of an IFSP decreasing such that fewer eligible children and their families were waiting for their IFSPs to be developed.) Early intervention service providers, including speech language pathologists, occupational therapists and physical therapists, also submitted testimony noting that timeliness of evaluations and assessments and of provision of services was a problem due to system capacity issues and confusion regarding roles and responsibilities of service coordinators and early intervention providers. Judy Capps of the Gilah Indian River Community (GIRC) testified for the need for additional time to ensure, among other things, that its data system was aligned with DES/AzEIP's data system.

The evidence gathered by the Department at the public hearings and through its monitoring of DES's early intervention program confirms that DES is not able to immediately come into compliance with the requirements of Part C. These problems are not isolated examples of noncompliance that can be quickly or easily corrected, but the outgrowth of systemic failures, for which systemic change is needed. The Department, therefore, concludes that DES cannot come into immediate compliance with the requirements of Part C.

B. DES Can Come Into Compliance With Part C Within Three Years

The Department has concluded that DES can meet the terms and conditions of the attached Compliance Agreement and come into full compliance with Part C within three years. The Compliance Agreement sets forth clear goals, outcomes and objectives, specific activities to reach those results, and timelines including target completion dates. Testimony at the hearing supports the conclusion that DES is committed to making the necessary changes to come into compliance with Part C. For example, SICC member Connie Shore noted that DES ­ had undertaken significant steps to address those areas of noncompliance that were in its direct control immediately after OSEP's initial on-site monitoring visit and such efforts indicate DES's ability to implement its plan for achieving compliance. These steps included developing a model IFSP form, developing and disseminating appropriate public awareness materials, and outlining a plan for a monitoring system. GIRC representative Judy Capps indicated that the number of infants and toddlers with disabilities served at the Gilah Indian River Community increased from 19 to 99 and over 400 potentially eligible children were screened during her short tenure (less than three years). Annabelle Ratley of the Blake Foundation (a private contractor that contracts with all participating State agencies except for ASDB) indicated that IFSPs look different and are more individualized now.

To ensure that DES remedy the areas of noncompliance as soon as possible, the Compliance Agreement sets forth realistic and specific timelines for accomplishing each objective. DES officials and other witnesses testified that DES had already implemented the following actions to fully address three of OSEP's seven findings of noncompliance and begin to address the remaining four findings:

—Development and implementation of intra- and interagency training on Part C;

—Development of model IFSP form to include all federally required elements;

—Development and distribution of appropriate public awareness materials;

—Increase in referrals from and number of children served in certain Indian reservations; and

—Training and professional development of service coordinators.

The actions that remain are long-term strategies to address the principal barriers identified by DES for the successful implementation of Part C. Thus, the Compliance Agreement contains specific plans to develop effective interagency monitoring and cooperation mechanisms regarding collection and reporting of data and compliance policies and procedures. It also requires a review and analysis of system capacity issues including short-term and long-term personnel identification, recruitment and retention policies. Finally, it provides for the delivery of early intervention services based on a team-based model.

The Compliance Agreement also establishes realistic goals and systemic strategies—which will be monitored by the Department—for bringing DES into compliance with Part C. The Compliance Agreement addresses the four major areas of DES's noncompliance with Part C, namely: (1) General Supervision, (2) Timely Evaluations and Assessments and IFSP Development, (3) Timely Provision of Early Intervention Services, and (4) Service Coordination. Under each of these Compliance Agreement areas, DES sets out objectives as well as specific steps that it will take to achieve its objectives and address the noncompliance areas that are at issue in OSEP's monitoring report. The Compliance Agreement also identifies the key parties (including DES, other State agencies and stakeholder groups including the SICC), that will take responsibility for carrying out each of the strategies. Thus, specific parties can be held accountable if an activity delineated in the Compliance Agreement is not properly implemented.

In addition to specifying overall compliance goals, a plan for meeting them, and the party responsible for implementing the specific action steps, the Compliance Agreement also sets out interim objectives that DES must meet during the next three years in attaining compliance with Part C. DES not only is committed to being in full compliance with Part C within three years, but also has a plan to address each objective in as timely a manner as possible. The Compliance Agreement sets forth the data collection and reporting procedures that DES will follow. These provisions will enable the Department to determine whether or not DES is meeting each of its commitments under the Compliance Agreement. The Compliance Agreement, because of the obligations it imposes on DES, will provide the Department with the information and authority it needs to protect the Part C rights of Arizona infants and toddlers with disabilities.

DES has developed a comprehensive plan to address the underlying causes of its failure to comply with Part C. For these reasons, the Department concludes that DES can meet all the terms and conditions of the Compliance Agreement and come into full compliance with Part C no later than three years from the date of the Agreement.

IV. Conclusion

For the foregoing reasons, the Department finds that: (1) Full compliance by DES with the requirements of Part C is not feasible until a future date, and (2) DES can meet the terms and conditions of the attached Compliance Agreement and come into full compliance with the requirements of Part C within three years of the date of this decision. Therefore, the Department determines that it is appropriate for this agency to enter into a Compliance Agreement with DES. Under the terms of 20 U.S.C. 1234f, this Compliance Agreement becomes effective the date these Written Findings and Decision are signed by the Secretary.

Dated: December 16, 2004.

From Rod Paige,

Secretary, U.S. Department of Education.

Appendix A: Arizona Part C Compliance Agreement.

Compliance Agreement—Under Part C of the Individuals With Disabilities Education Act (IDEA), the Infants and Toddlers With Disabilities Program, Between the United States Department of Education and the Arizona Department of Economic Security

I. Introduction/Background

This Compliance Agreement is entered into under the General Education Provisions Act (GEPA) (at 20 U.S.C. 1234f) between the United States Department of Education (the Department or ED) and the State of Arizona through the Arizona Department of Economic Security (DES) to address certain requirements under Part C of the Individuals with Disabilities Education Act (IDEA) (codified at 20 U.S.C. 1401 through 1407 and 1431 through 1445) and its implementing regulations (at 34 CFR part 303).

Under section 1234f of GEPA, the Department may enter into a Compliance Agreement with the purpose of bringing a grant recipient (DES) into full compliance with the applicable requirements of law as soon as feasible and not to excuse or remedy past violations. Before entering into a compliance agreement, the Department must hold a hearing where the recipient and other affected and interested parties are invited to participate. Compliance agreements must contain an expiration date not later than three years from the date of the Written Findings and the terms and conditions with which the recipient must comply until it is in full compliance. A compliance agreement allows a recipient to continue to receive its grant award while it works toward achieving full compliance under the terms of the agreement.

On March 15, 2004, in response to Arizona's Part C Federal fiscal year (FFY) 2001 Annual Performance Report (APR) and following a State verification monitoring visit by the ED Office of Special Education Programs (OSEP) to Arizona in December 2003, OSEP issued two letters documenting DES's continued noncompliance with the following four requirements: (1) Utilizing effective monitoring procedures to ensure the identification and correction of noncompliance with Part C under 34 CFR 303.501; (2) conducting evaluations and assessments and holding the initial Individualized Family Service Plan (IFSP) meeting within 45 days from initial referral under 34 CFR 303.321(e)(2), 303.322(e)(1) and 303.342(a); (3) providing in a timely manner all early intervention services identified on the IFSP to all eligible infants and toddlers with disabilities, including infants and toddlers on reservations, under 34 CFR 303.342(e); and (4) ensuring that all service coordination functions are implemented under 34 CFR 303.23 and 303.344(g). These same noncompliance findings were four of the seven findings originally identified in OSEP's 2000 Arizona Part C Monitoring Report. Although DES has addressed three of the findings from OSEP's 2000 monitoring report, DES has indicated that it will need more than one year to make systemic changes in its monitoring, data, service delivery, and other systems in order to ensure correction of these remaining four findings.

On March 25, 2004, DES Director David Berns requested that the Department consider entering into a Compliance Agreement with DES under Part C of the IDEA. In addition, Mr. Berns invited OSEP to conduct public hearings in Arizona as required by GEPA prior to the establishment of a Compliance Agreement. On May 20, 2004, OSEP conducted a public hearing in Phoenix, Arizona, regarding DES's ability to meet certain Part C requirements. The testimony and materials either presented at the hearing, or provided in relation to the hearing, by DES representatives, other Arizona participating agencies, Part C providers, and other affected or interested individuals confirmed that, as required under 20 U.S.C. 1234f, full compliance with Part C requirements by DES is genuinely not feasible until a future date, but that DES will be able to come into full compliance with Part C within three years. Testimony and written submissions supported the development of a compliance agreement that would bring DES into compliance with Part C as soon as feasible and allow continuation of Part C funding by OSEP to Arizona during this process. As indicated in the Secretary's Written Findings and Decision of the ED Secretary (Secretary), ED agrees that a compliance agreement is appropriate to address noncompliance and this document reflects the terms of the Compliance Agreement.

II. Parties

The parties to this Compliance Agreement under IDEA, Part C, are the U.S. Department of Education and the Arizona Department of Economic Security (DES). DES is the designated lead agency under Part C of the IDEA. The Arizona Early Intervention Program (DES/AzEIP) is the office within DES that is responsible for the daily administration and oversight of Arizona's early intervention program for infants and toddlers with disabilities and their families under Part C of the IDEA.^[1] The Arizona Part C program referred to herein includes the AzEIP participating state agencies (DES, AHCCCS, ADE, ASDB and ADHS) and the providers of early intervention services (whether contractors of AzEIP or other state agency entities).

III. Areas of Identified Noncompliance

Under the terms of this Compliance Agreement, entered into pursuant to 20 U.S.C. 1234f, DES must be in full compliance with the requirements of Part C of IDEA no later than three years from the effective date of this Agreement, which is the date the Secretary signs the Written Findings of Fact and Decision and the Compliance Agreement. Specifically, DES must ensure and document that no later than three years from the effective date of this Agreement, compliance is achieved in each of the following four major areas:

1. General Supervision: DES is meeting its general supervision responsibilities and monitoring for compliance with all requirements of Part C, including using appropriate methods to administer the Part C program. In particular, DES is: (1) Monitoring state participating agencies/DES participating programs and governmental or private providers who deliver or contract to deliver Part C services in Arizona; (2) enforcing contractual and/or legal obligations regarding Part C compliance; (3) providing training and technical assistance as needed to providers and governmental participants in the Part C program; and (4) correcting deficiencies identified through monitoring.

2. Timely Evaluation, Assessment and Development of the IFSP: DES is ensuring that all potentially eligible infants and toddlers referred to Part C receive timely and comprehensive evaluations in all five developmental areas (cognitive, physical, communication, social/emotional, and adaptive skills). Evaluations and assessments are completed and, if the infant or toddler is eligible, the initial IFSP meeting is conducted within 45 days of the date a referral is received containing sufficient family contact information to enable the Arizona Part C program to contact the family.

3. Identification and Timely Provision of All Early Intervention Services Specified in IFSPs: DES is ensuring that all early intervention services identified on the IFSPs are linked to functional outcomes, which are based on the current developmental needs of eligible infants or toddlers with disabilities and the resources, priorities and concerns of their families. DES is also ensuring that all early intervention services identified on the IFSP are provided in a timely manner to all eligible infants and toddlers with disabilities, including Native American families and children residing on reservations.

4. Service Coordination: DES is ensuring that each eligible family has a single service coordinator who: (1) Coordinates all services across agency lines; (2) serves as the single point of contact for the family to help parents obtain the services and assistance they need; (3) facilitates timely delivery of available services; (4) seeks appropriate services necessary to benefit the development of each child served for the duration of the child's eligibility; and (5) ensures that all infants and toddlers and their families receive appropriate prior written notice and understand their procedural rights and safeguards.

IV. Funding and Work Plans

During the term of the Compliance Agreement, DES is eligible to receive Part C funds if it complies with the terms and conditions of this Agreement and all other provisions of Part C not addressed by this Agreement.

This Compliance Agreement specifies the goals and timetables required for DES to come into full compliance with its Part C obligations in each of the four areas. DES is required to submit documentation concerning its compliance with enumerated activities, goals and timetables. Included in this Compliance Agreement are two individual work plans (Attachments A and B), which address the previously enumerated areas of noncompliance with Part C requirements. These work plans include measurable outcomes, goals/objectives, activities to achieve the goals, target completion dates for each activity and goal, and ways to verify compliance with the work plans during the three-year term of this Agreement. A report on progress made under these work plans, reflecting activities/goals met, any obstacles and other information as to progress shall be submitted by DES quarterly to OSEP. This reporting shall begin the final day of the third month following the effective date of this Agreement, and shall continue quarterly throughout the term of this Agreement. Attachment C, DES/AzEIP's Program Self-Assessment and Monitoring Cycle, supports Attachment A, General Supervision, and describes the schedule for monitoring programs within the State.

Amendments to this Compliance Agreement must be made in writing. If DES determines that any items in the work plans need to be changed or items need to be deleted/added, DES will promptly submit to OSEP in writing any requests for changes to the work plans and the terms of this Compliance Agreement. Within five working days of receipt of any such request, OSEP shall acknowledge via e-mail or letter that the request was received and the date of receipt. OSEP will respond in writing within a reasonable period of time to DES's written requests for amendments. OSEP will review proposed amendments for any activities to achieve compliance including tasks, timelines and reporting requirements; DES is not required to implement those activities that are the subject of proposed amendments and are pending review by OSEP until OSEP has provided its response regarding those activities. Any requests for amendments to the compliance agreement by the State will be responded to in writing by OSEP.

V. Current Status, Goals/Measurable Outcomes and Verification

Area 1: General Supervision

Current Status: The Department's 2000 Monitoring Report found that DES did not have a method for identifying and correcting noncompliance with Part C requirements. OSEP's March 15, 2004 letter following its December 2003 verification monitoring visit to the State confirmed that, although DES had piloted a partial monitoring system, it did not have in place a monitoring system to ensure the monitoring of all entities that provide Part C services as well as monitoring for all Part C compliance requirements. In addition, the March 15, 2004 letter documented that DES did not have in place methods to ensure the correction of any identified noncompliance.

Outcome: DES will utilize effective monitoring and general supervision procedures to ensure the identification and correction of noncompliance with Part C.

Measurable Goals:

Goal 1: DES will monitor all State or contracted programs that provide Part C services in Arizona, for compliance with all Part C requirements.

Goal 2: DES will ensure that deficiencies identified through monitoring are corrected in a timely manner.

Verification: In its quarterly reports to OSEP and through additional specific reporting (as identified on the attached workplans), DES shall submit verification that it has: (1) Revised or replaced its interagency agreement(s) among the AzEIP participating State agencies to address all Part C general supervision requirements; (2) aligned policies and procedures across agencies to include general supervision and Part C compliance issues (on monitoring, data collection, contract review and technical assistance); (3) implemented a monitoring system, which includes analysis of data to identify and correct noncompliance and ensuring correction of identified noncompliance; (4) formalized an interagency technical assistance system; (5) revised its ACTS data system to expand data collection and reporting functions, incorporating timely data access and management reporting at the local and State AzEIP offices; and (6) incorporated data elements and reports into the data systems of other Part C participating State agencies.

Areas 2, 3, and 4: Early Intervention Services in the Natural Environment (EIS-NE): Timely Identification, Individualization and Provision of All Early Intervention and Service Coordination Services

Current Status: OSEP's 2000 monitoring report found that DES had failed to: (1) Conduct evaluations and assessments and hold the initial Individualized Family Service Plan (IFSP) meeting within 45 days from initial referral; (2) individualize, and provide in a timely manner, all early intervention services identified on the IFSP to all eligible infants and toddlers with disabilities, including infants and toddlers on reservations; and (3) ensure that all service coordination functions are implemented. OSEP's March 15, 2004 letter following its December 2003 verification monitoring visit to the State confirmed that the State had not corrected these areas of noncompliance.

Outcomes: The initial IFSP meeting will be held within 45 days of a referral and IFSPs will be individualized based on the child and family's unique needs. All appropriate early intervention services will be identified on the IFSP and provided in a timely manner along with service coordination for all eligible infants and toddlers with disabilities, including infants and toddlers on reservations.

Measurable Goals:

Goal 1: Initial IFSP meetings (and evaluations and assessments) for all infants and toddlers referred to Part C shall be conducted within 45 days of the referral.

Goal 2: All IFSPs shall contain the early intervention services that are needed by the child and family to meet the functional outcomes, which are based on the unique strengths and needs of the child and the resources, priorities and concerns of the family. All eligible infants and toddlers with disabilities and their families shall receive the early intervention services identified on their IFSP in a timely manner.

Goal 3: Each family shall have a single designated service coordinator who shall: (1) Coordinate all services across agency lines; (2) serve as the single point of contact for the family to help it obtain the services and assistance it needs; (3) facilitate timely delivery of available services; (4) seek appropriate services necessary to benefit the development of each child served for the duration of the child's eligibility; and (5) ensure that all families receive appropriate prior written notice and understand their procedural rights and safeguards.

Verification: In its quarterly reports to OSEP and through additional other specific reporting (as identified on the attached work plans), DES shall submit verification that it has: (1) Evaluated the nature and cause of the delays in system capacity issues (timely evaluation and assessments and provision of early intervention services) and implemented appropriate and responsive recruitment and retention strategies; (2) developed an interagency, team-based service delivery model that ensures compliance with timely identification of infants and toddlers with disabilities and provision of services to infants and toddlers with disabilities and their families while maximizing personnel resources; (3) ensured that all service coordination functions are implemented statewide and across agencies; (4) aligned policies and procedures across agencies to ensure compliance with Part C requirements regarding the 45-day timeline, identification and timely provision of early intervention services and service coordination functions; (5) implemented a monitoring system, which includes analysis of data to identify and correct noncompliance and ensuring correction of identified noncompliance regarding 45-day timeline, identification and timely provision of early intervention services and service coordination functions; (6) revised its ACTS data system to expand data collection and reporting on Part C requirements regarding 45-day timeline, identification and timely provision of early intervention services and service coordination functions; and (7) incorporated data elements and reports into the data systems from other Part C participating state agencies (to ensure compliance with 45-day timeline, identification and timely provision of early intervention services and service coordination functions).

VI. Other Terms and Conditions

This Compliance Agreement is executed in two original counterparts in order to provide each party with an original. DES agrees that its continued eligibility to receive Part C funds is predicated upon compliance with statutory and regulatory requirements of that program, which include requirements not addressed specifically by this Agreement. Any failure by DES to comply with the goals, objectives, timetables, verification or other provisions of the Compliance Agreement, including the reporting requirements, will authorize the Department to consider the agreement no longer in effect. If DES fails to comply with the terms of the Agreement, the Department may take any actions authorized under GEPA at 20 U.S.C. 1200 et seq. and the IDEA at 20 U.S.C. 1401 et seq. (including 1443-1445). Such actions may include withholding of funds under the IDEA (42 U.S.C. 1416 and 1442), referral to the Department of Justice, and other enforcement mechanisms.

Attachments:

Attachment A: Area 1: General Supervision.

Attachment B: Areas 2, 3 and 4: Early Intervention Services in the Natural Environment.

Attachment C: Program Self Assessment and Monitoring Cycle.

Signed for the Arizona Department of Economic Security:

Dated: December 8, 2004.

David A. Berns,

Director.

Signed for the U.S. Department of Education:

Dated: December 16, 2004.

Rod Paige,

Secretary.

Date this Compliance Agreement Becomes Effective: December 16, 2004.

(Date on which written findings of fact and decision are signed).

Footnotes

1.  The Arizona Part C early intervention statewide system of services comprises the following State agencies and its contractors: (1) DES (which includes AzEIP, and the Division of Developmental Disabilities (DDD) (another unit within DES, and which is a major early intervention service provider in Arizona), (2) the Arizona State Schools for the Deaf and the Blind (ASDB), (3) the Arizona Department of Health Services (ADHS), (4) the Arizona Department of Education (ADE), and (5) the Arizona Health Care Cost Containment System (AHCCCS).

2.  OSEP's Monitoring Report, issued on May 22, 2000, identified the following seven findings of noncompliance with Part C:

(1) General Supervision: 34 CFR 303.501—Ineffective Monitoring Procedures to Ensure Consistent Implementation of Part C;

(2) Child Find: 34 CFR 303.321 and 303.320—Development of a Comprehensive, Coordinated, Statewide Child Find System;

(3) Failure to Disseminate Public Awareness Information to Primary Referral Sources;

(4) Failure under 34 CFR 303.322(e)(1) to convene the initial Individualized Family Service Plan (IFSP) meeting within 45 days from initial referral including identification of all needed services;

(5) Failure under 34 CFR 303.322(e)(2) to appropriately extend timelines for evaluations and assessments and to routinely and inappropriately develop interim IFSPs;

(6) Failure to provide all services to all eligible children under 34 CFR 303.322 including children on reservations; and

(7) Failure to ensure under 34 CFR 303.23(a)(2) that all service coordination functions are implemented.

3.  A copy of the Compliance Agreement is attached as Appendix A to these Written Findings and Decision.

4.  An “infant or toddler with a disability” “(A) means an individual under 3 years of age who needs early intervention services because the individual (i) is experiencing developmental delays, as measured by appropriate diagnostic instruments and procedures in one or more of the areas of cognitive development, physical development, communication development, social or emotional development, and adaptive development; or (ii) has a diagnosed physical or mental condition which has a high probability of resulting in developmental delay; and (B) may also include, at a State's discretion, at-risk infants and toddlers.” 20 U.S.C. 1432(5). Arizona does not include “at-risk infants and toddlers” in its definition of “infants and toddlers with disabilities.”

1.  The Arizona Part C early intervention statewide system of services comprises the following State agencies and its contractors: (1) DES (which includes AzEIP, and the Division of Developmental Disabilities (DDD) (another unit within DES, and which is a major early intervention service provider in Arizona), (2) the Arizona State Schools for the Deaf and the Blind (ASDB), (3) the Arizona Department of Health Services (ADHS), (4) the Arizona Department of Education (ADE), and (5) the Arizona Health Care Cost Containment System (AHCCCS).