BILL LEE STATE OF TENNESSEE PENNY SCHWINN

GOVERNOR DEPARTMENT OF EDUCATION COMMISSIONER

NINTH FLOOR, ANDREW JOHNSON TOWER
710 JAMES ROBERTSON PARKWAY
NASHVILLE, TN 37243-0375

January 25, 2021

Director Battle:

This letter is to notify you of significant issues in the use, drawn amounts, and oversight of federal grant funds by Metro
Nashville Public Schools (MNPS).

As of the date of this letter, MNPS has significant balances available that have not been drawn down since last summer
(2020), as well as federal funding still available from the previous fiscal year. These balances are close to $110 million
when reviewing all federal funds together.

Specifically, the grants in the table below were awarded to MNPS last July 1, 2020, and to date, have not
been utilized for their intended purpose. The chart below reflects the ESSER 1.0 grant, as well as awards from the three
major federal grant programs. These charts do not reflect additional grants awarded to MNPS. To be clear, there are
additional balances in those grant funding sources as well, which are not included in this letter.

Federal Grant FY21 Allocation FY21 Amount Drawn FY21 Amount Unpaid
ESSER $26,007,292.75 $331,058.22 $25,676,234.50
Title I-A $35,392,249.00 $0.00 $35,392,249.00
Title I-A Neglected $219,350.00 $0.00 $219,350.00
Title I-D LEA $189,010.87 $0.00 $189,010.87
Title I School $3,800,000 $0.00 $3,800,000
Improvement DPSG
Title I School $1,125,000 $0.00 $1,125,000
Improvement SLIG
Title II-A $4,350,670.00 $0.00 $4,350,670.00
Title III $2,115,406.06 $0.00 $2,115,406.06
Title IV Transfer $0.00 Transfer
Title V N/A $0.00 N/A
IDEA, Part B $19,671,651.00 $0.00 $19,671,651.00
IDEA, Preschool $419,807.00 $0.00 $419,807.00
Perkins Basic $1,839,983.07 $0.00 $1,839,983.07
TOTAL CURRENT FUNDING REMAINING $94,799,361.50

There are also additional balances remaining from the prior fiscal year, as noted below.

Tennessee Department of Education • Office of the Commissioner • 710 James Robertson Parkway • Nashville, TN 37243
Tel: (615) 741-5158 • tn.gov/education
 Federal Grant FY20 Allocation FY20 Amount Drawn FY20 Carryover
Title I-A $32,878,757.58 $25,014,217.91 $7,864,539.67
Title I-A Neglected $419,868.50 $239,678.92 $180,189.58
Title I-D LEA $259,276.62 $184,968.39 $74,308.23
Title II-A $5,627,947.94 $3,694,981.66 $1,932,966.28
Title III $2,506,816.20 $2,057,758.47 $449,057.73
Title IV Transfer $0.00 $0.00
Title V N/A $0.00 $0.00
IDEA, Part B $21,187,930.49 $17,578,857.51 $3,609,072.98
IDEA, Preschool $439,189.14 $219,074.84 $220,114.30
TOTAL REMAINING CARRYOVER $14,330,248.77

These funds are generated by and intended to serve students in vulnerable populations and to meet the needs of high-
risk schools and communities impacted by the pandemic. By not drawing these funds there is real concern that schools
are not getting the supports needed for teachers and students, including students with disabilities.

Specific to students with disabilities, there are additional concerns regarding compliance with program requirements.
MNPS has also earned the lowest annual performance report (APR) determination each of the past three years –
indicating systemic issues with the provision of a free and appropriate public education (FAPE), among other
compliance issues addressed in the APR. While the department will continue to work with your team on the required
corrective actions to address these compliance issues, there must be a sense of urgency from MNPS to address both
the compliance and funding issues – most importantly, to ensure students are being appropriately served.

Similarly, MNPS is not implementing the grants as intended and in compliance with the program and fiscal assurances
as agreed to upon approval. This includes federal requirements in the Uniform Grants Guidance, specifically 2 CFR
200.61, 200.62, 200.302, 200.303, and 200.334.

Our program and fiscal teams have worked with your staff for over a year – providing technical assistance, extensions,
and training on dozens of occasions. MNPS identified your fiscal accounting system as one of the key challenges in
being able to accurately and effectively distribute and manage your available funds; however, the issues with your
financial accounting system that were prevalent last January (2020) continue to be of serious concern in 2021. A
comment from the recent fiscal monitoring speaks to this issue: “LEA has not submitted regular reimbursements from
any federal program including CTE; in the 12/8/20 interview LEA has deemed their own financial reports as
unreliable.” This clearly creates strong concern in the fiscal management of these funds, as well as the ability for MNPS
to use these funds to meaningfully impact the students in your district, at a time when they are needed most.

Further, we are in ongoing communication with your teams on questioned costs of over $1,000,000 of Title I, funds
intended to be used to support low-income students. This is specific to expenditures by MNPS that have been
discovered in the Tennessee Comptroller’s audit, resulting primarily from both a lack of documentation and unallowable
uses of Title I funds by MNPS. Similar issues have been noted in both of the two previous audits; unfortunately, this is
exponentially more egregious and concerning. It has also come to the attention of the U.S. Department of Education, to
which the TDOE is accountable for the appropriate use and monitoring of federal funds.

The code of federal regulations (CFR) indicates that state education agencies cannot continue to award funds to a
subrecipient known to be out of compliance, and there are specific conditions and remedies that are noted in the
code §200.339.

In addition to acting in the best interest of students, the department has a legal responsibility to monitor and act
according to federal law. As a result, MNPS must provide evidence to the department that it has completed the following
actions in the timeframe indicated upon receipt of this letter:

Tennessee Department of Education • Office of the Commissioner • 710 James Robertson Parkway • Nashville, TN 37243
Tel: (615) 741-5158 • tn.gov/education
 1. Within 15 days, MNPS must request reimbursements (reflect actual expenditures for funds) for allowable
expenditures through 12/31/20 for the following grants:
a. ESSER 1.0
b. Title I-A
c. Title I-A Neglected
d. Title I-D LEA
e. Title II-A
f. Title III
g. Title IV
h. Title V
i. IDEA, Part B
j. IDEA, Preschool

2. Within 15 days, MNPS must submit a formal letter, signed by the Superintendent and responsible fiscal
officer, attesting that all funds requested are allowable, within the period of availability, and represent all eligible
expenses through December 31, 2020;

3. Within 30 days, MNPS must provide the department with a corrective action plan that reflects how MNPS will
address issues with documentation, timeliness of requesting funds, and allowability. This corrective action plan
should include the personnel responsible for implementing the corrective actions, the root cause for non-
compliance and mismanagement, the remediation actions to prevent continued non-compliance, and
the estimated completion date of all activities. The corrective action plan should also include plans for monthly
updates to the department until the issues are resolved to satisfaction; and

4. Within 45 days, MNPS must address and remedy audit findings related to MNPS’s subgrants included in the
Comptroller’s final report.

Failure to accomplish any of these items will result in a delay of the approval of additional grants including the ESSER
2.0 allocation for MNPS, or disbursement of additional payments until the department has reviewed the appropriate
documentation and verified that grants are being utilized as intended and in compliance with federal and state law. This
includes MNPS maintaining and making available for immediate review appropriate supporting documentation for
reimbursements, at the request of the department.

I cannot underscore enough the seriousness of the current financial management of federal funds and compliance
issues in MNPS. It is imperative that these issues be resolved quickly, accurately, and comprehensively, so as to
provide students with the resources that they need and to move the district to a space of compliance with federal and
state law.

The department will continue to stand ready to offer guidance and technical assistance as requested by MNPS, as well
as to continue to proactively engage with MNPS staff on these issues.

Please reach out to Eve Carney, Chief District and Schools Officer, at Eve.Carney@tn.gov with any questions.

Sincerely,

Penny Schwinn, PhD

Commissioner

Tennessee Department of Education • Office of the Commissioner • 710 James Robertson Parkway • Nashville, TN 37243
Tel: (615) 741-5158 • tn.gov/education