The U.S. Department of Education has restricted the initial flow of a $71 million charter school grant, pending further assurances that Ohio can responsibly oversee the money amid an investigation into the state's former school choice director.
In a letter sent Wednesday to Superintendent Richard Ross, the federal charter schools program director said that spending Ohio's grant payments will temporarily require special approval from a federal official. The letter says the arrangement was agreed to Oct. 26.
The department asked Ohio to refrain from drawing down funds or incurring expenses or obligations against the grant as it gathers additional information from the state auditor and inspector general, among others.
The restrictions have been imposed on the first $32.7 million installment of the grant, as the additional grant funds are dependent on future congressional appropriations. Ohio's full announced grant amount represents the largest single portion of proposed total federal funding of about $334 million over five years to improve charter schools nationwide.
The funding was announced after Ohio School Choice Director David Hansen resigned, acknowledging he withheld certain failing grades from charter sponsor evaluations. The state responded by pulling affected evaluations and referring documentation involving Hansen's actions to the state auditor and inspector general.
In his letter, U.S. Charter Schools Program Director Stefan Huh said the federal department made a preliminary determination - based on then-available information - that concerns surrounding the charter oversight office run by Hansen should not disqualify Ohio from the competition.
Since then, however, Huh said his department has received additional information that "raises continuing concerns" - "particularly in the areas of oversight and accountability" - over whether the Ohio Department of Education can properly administer the grant.
He said the department expects that once Ohio meets new conditions and provides all the information federal regulators are seeking, it will be able to carry out its intentions for the grant money and "be successful in creating high-quality public charter schools for its students, especially its most vulnerable students."
Ohio Department of Education spokeswoman Kimberly Norris said Ross and his team remain committed to addressing concerns raised by Hansen's actions.
"Even before receiving word of the awarding of the grant, ODE reached out to the USDOE to provide information about the status of the charter school evaluation process in Ohio," she said in a statement. "We are in ongoing conversations with the USDOE to ensure that our revised evaluation process and other accountability measures fully align with grant requirements and state laws."
The federal department has asked Ross to provide within two weeks an accuracy review of the state's initial grant application as well as additional information on steps the state department has taken to address concerns raised by the Hansen matter, its ethics and conflict of interest policies and a host of other materials. Within a month, it also wants a summary of seven years of state audits related to Ohio charter schools and copies of those audits.
Federal officials retained the right to commission a report from an independent auditor after all that information is gathered.