Feds issue warning on grant funds after Vermont identifies own mistakes

Vermont spent nearly eight years incorrectly choosing schools that needed state resources to address widening achievement gaps, according to Zoie Saunders, Vermont’s secretary of education. The state caught the error itself this spring and reported the mistake to the federal government within hours — then heard nothing for months.

Then, in September, officials from the U.S. Department of Education designated Vermont as “high risk” on a $41 million grant, demanding the state immediately fix the mistakes or risk a $100,000 penalty.

Now, Vermont officials are pushing back on that designation. They plan on sending a letter that calls the designation “premature” and asks the feds to reconsider while they fix the error, which at times directed the state to focus resources on schools that needed it the least.

“All of this came out of our very sincere and focused commitment on closing achievement gaps for students,” Saunders said in an interview, referring to the state catching its own errors.

The multimillion dollar grant in question is a type of Title 1 grant, which the state receives to support economically disadvantaged students. In exchange for the funds, federal law requires the state to identify underperforming schools and address inequalities accordingly, Saunders said.

The intervention from federal officials sheds light on a series of errors that Vermont made for years when deciding which schools needed state intervention to address inequities. Saunders said the errors are the result of a complicated and burdensome process that precedes her time as secretary. She said the agency is working to solve any errors to comply with federal officials’ demands.

“Vermont should have the opportunity to meet the deadlines we’ve been given before being labeled high risk,” Gov. Phil Scott said in a press release from the state Agency of Education.

Assistant U.S. Secretary to the Office of Elementary and Secondary Education Kirsten Baesler wrote in her letter to Vermont officials that — absent federal oversight — Vermont’s corrective plan would take too long.

“(Vermont’s) proposed timeline would leave the State out of compliance with central aspects of Title I, Part A requirements for several years,” Baesler wrote, noting the state planned to have its plan corrected by fall of 2028.

Officials at the state education agency got unanimous approval from the Vermont Board of Education last week to write a letter to federal officials, asking them to reconsider Vermont’s designation.

The agency proactively identified the problems and has been actively working to address them, said Tammy Kolbe, acting chair of the state board, in an interview.

“I think the State Board’s resolution last week signals that we believe that those actions matter,” Kolbe said.

The process for identifying underperforming schools changed following the passage of the federal Every Student Succeeds Act in 2015. Saunders said that federal law gave states more flexibility to determine their own metrics for school success — but also made the process complicated.

“It shouldn’t take a statistician to identify whether or not a school is performing well,” Saunders said.

Following the passage of the new federal law, Vermont created a new methodology for identifying schools in need of support in 2017 and 2018. And the federal government approved Vermont’s new plan.

But the new plan used a flawed methodology that incorrectly identified which schools were underperforming, according to Saunders, and the issues went undetected by the federal government.

The errors snowballed over years and at times the policy was at odds with its intended goals.

Vermont previously received a “high risk” designation in 2024 for separate grant reporting issues related to identifying underperforming schools, Baesler noted in her letter.

She summed up the consequences of Vermont’s recently identified mistakes: “Schools that made progress to improve performance gaps were identified as (needing resources), while schools with widening performance gaps were not identified,” she wrote.

Saunders said the state first caught the errors in February while it was doing an internal review. Within hours of identifying the mistakes, she notified superintendents across the state, then alerted the federal education department, she said.

Then the state heard nothing.

State officials decided to overhaul the methodology to track school performance to correct the mistakes. In July, state officials sent a remediation plan to federal officials, according to Saunders.

“What we uncovered was through a self-diagnosis. It was through our own quality assurance process,” Saunders said.

The federal warning imposes a number of deadlines for corrective action. The agency is required to create a new methodology for identifying schools that need support by Dec. 15. And the state must apply its new methodology for the 2025-26 school year by January.

If it fails to meet those deadlines, it could lose $100,000 in grant funding and be subject to new administrative burdens, according to Saunders.

This story was originally published by VTDigger and distributed through a partnership with The Associated Press.