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HARRISBURG SCHOOL DISTRICT

OFFICE OF SOLICITOR
James E. Ellison, Esquire
Lincoln Administration Building
1601 State Street • Harrisburg, PA 17103
717.703.4054 • 717.703.4127
Jellison@hbgsd.us
www.hbgsd.us

May 14, 2019

Susan McCrone Carmen M. Medina


Chief, Division of Federal Programs Chief, Division of Student Services
Commonwealth of Pennsylvania Commonwealth of Pennsylvania
Department of Education Department of Education
333 Market Street 333 Market Street
Harrisburg, PA 17126-0333 Harrisburg, PA 17126-0333

Re: RESPONSE TO NOTICE OF REIMBURSEMENT REQUIREMENT IMPOSED


PURSUANT TO 2 C.F.R §200.207

SENT VIA FIRST CLASS MAIL

Dear Ms. McCrone and Ms. Medina:

We are in receipt of your written correspondence dated May 13, 2019, which was received via
electronic mail on the same date, regarding the Pennsylvania Department of Education’s (PDE)
decision to lift its recent suspension of Harrisburg School District (“District”) federal funds. As I
am sure you know, the District objected to PDE’s initial decision to suspend based upon an
alleged failure to cooperate with the auditors retained by PDE. We maintain now, as we
maintained then, that we have fully cooperated with the auditors subject to our legal obligation to
protect the integrity of our data systems and our employees’ confidential information which is
stored in those systems. Moreover, with the consent of our employees, we were able to timely
resolve and meet that obligation in a positive manner for all parties involved. Accordingly, it was
always our expectation that PDE would reverse its prior suspension. What was unexpected,
however, is PDE’s declaration that the previously suspended funds will now only be released on
a reimbursement basis. As was the case with PDE’s initial suspension, we believe this most
recent decision is in bad faith and without sufficient legal basis or justification.

Your letter states that PDE’s decision to release the District’s funding on a reimbursement basis
is because “it has become apparent that the District’s ability to effectively document its
implementation of the terms of the District’s Grant Agreements and other applicable legal
requirements is clearly in question.”; however, PDE offers no foundation for this premise. Your
letter does not detail any specific instances where the District has failed to document its
implementation of grant agreements in accordance with their terms and applicable legal
“An Equal Rights And Opportunity School District”
Letter to PDE Re: Reimbursement Requirement
Page 2 of 3

requirements, and certainly not to the degree that an extraordinary step such as changing our
funding model is necessary or appropriate under the circumstances. You cite as authority for
your position, Chapter 2, Section 200.207 of the Code of Federal Regulations, which only
affords PDE such authority under specific circumstances as noted below:

(a) The Federal awarding agency or pass-through entity may impose additional specific award
conditions as needed, in accordance with paragraphs (b) and (c) of this section, under the
following circumstances:
(1) Based on the criteria set forth in § 200.205 Federal awarding agency review of risk posed
by applicants;
(2) When an applicant or recipient has a history of failure to comply with the general or
specific terms and conditions of a Federal award;
(3) When an applicant or recipient fails to meet expected performance goals as described in §
200.210 Information contained in a Federal award; or
(4) When an applicant or recipient is not otherwise responsible.

Given the language of the stated basis articulated in your letter, it would appear that PDE is
invoking subsection (a)(2), which requires a showing that the District has a HISTORY of failure
to comply with the general or specific terms of a Federal award. In your letter, PDE has neither
identified nor detailed any such history by the District, and is legally required to do so.
Moreover, even assuming that PDE did provide such a history which would authorize
implementing a reimbursement requirement rather than advance payments under subsection
(b)(2), your letter still falls short of the remaining requirements of Section 200.207, specifically
subsections (c) and (d) which provide:

(c) The Federal awarding agency or pass-through entity must notify the applicant or non-
Federal entity as to:
(1) The nature of the additional requirements;
(2) The reason why the additional requirements are being imposed;
(3) The nature of the action needed to remove the additional requirement, if applicable;
(4) The time allowed for completing the actions if applicable, and
(5) The method for requesting reconsideration of the additional requirements imposed.
(d) Any specific conditions must be promptly removed once the conditions that prompted them
have been corrected.
I am sure you would agree that while your letter may have complied with subsection (c)(1), it
falls woefully short of the mandatory requirements of subsections (c)(2) through (d) insofar as:

1. PDE articulated no defined reason for its decision as specifically required by


subsection (c)(2) other than to use a few buzz phrases such as “it has become
apparent” and “clearly in question” without showing which actions engaged in by the
district constitutes one or more reasons for PDE’s decision (which must be based
upon a documented “history” as required under subsection (a)(2) above);
“An Equal Rights And Opportunity School District”
Letter to PDE Re: Reimbursement Requirement
Page 3 of 3

2. PDE did not identify what corrective action(s) the District needed to take to remove
its reimbursement requirement as specifically required by subsection (c)(3);
3. PDE did not identify the time allowed for the District to take corrective action(s) as
specifically required by subsection (c)(4); and
4. PDE did not identify a specific method for the District to request reconsideration of
its reimbursement requirement as specifically required by subsection (c)(5).

None of the above referenced MANDATORY requirements were met by PDE, which is legally
problematic because the purpose of those mandatory requirements is to give effect to subsection
(d) above, i.e., requiring PDE to promptly remove the reimbursement requirement once the
District has complied with the notifications which should have been provided under subsections
(c)(3)-(5) - - notifications which PDE has failed to provide despite the fact that it is required to
do so. Coincidentally, in failing to comply with subsections (a)(2) and (c)(2)-(5), PDE has
essentially imposed a permanent reimbursement requirement, which is not contemplated or
sanctioned by section 200.207.

In sum, by failing to comply with multiple mandatory provisions of Section 200.207 (subsections
(a)(2) and (c)(2)-(5)), there is no legal basis or justification for PDE invoking a reimbursement
requirement thereunder. Accordingly, the District respectfully submits that in light of its failure
to comply with the aforementioned mandatory requirements, PDE’s invocation of a
reimbursement requirement under Chapter 2, Section 200.207 of the Code of Federal
Regulations is per se unlawful and must be reversed. We await a positive reply.

Very Truly Yours,

James E. Ellison

James E. Ellison, Esquire


Solicitor
Harrisburg School District

“An Equal Rights And Opportunity School District”