Vermont faces federal scrutiny over school grant oversight after self-discovered errors

The state says the problems were uncovered internally in February during a review.

Federal education officials have put Vermont on notice over a $41 million grant, warning that the state must move faster to correct mistakes in how it identifies schools for support under Title I or face a $100,000 penalty.

The state says the problems were uncovered internally in February during a review, and that it notified school leaders and the U.S. Department of Education within hours. For months after that, however, state officials say they received no response. In September, the federal government responded by labeling Vermont high risk.

That designation is now being challenged by state leaders, who plan to send a letter arguing the label came too early and asking Washington to reconsider while Vermont finishes its fixes. Gov. Phil Scott said in a release from the Agency of Education that the state should be allowed to meet the deadlines it has been given before being treated as high risk.

The dispute centers on a long-running process used to determine which schools need extra help to close achievement gaps. According to Zoie Saunders, Vermont’s secretary of education, the state’s method had for years sometimes pointed resources toward schools that needed them least and missed others with growing performance gaps.

The issue traces back to changes in federal law after the Every Student Succeeds Act passed in 2015. That law gave states more flexibility in deciding how to measure school performance, but Saunders said it also made the system harder to manage. Vermont built a new approach in 2017 and 2018, and federal officials approved it, but state leaders now say the methodology contained flaws that went undetected for years.

Saunders said the error was not the result of federal discovery but of Vermont’s own quality control process. She said the agency began overhauling the system after finding the mistake and sent a remediation plan to federal officials in July.

The federal response, from Kirsten Baesler, assistant U.S. secretary for the Office of Elementary and Secondary Education, said Vermont’s proposed timeline would leave the state out of compliance with key Title I, Part A requirements for years. Federal officials want a new method for identifying schools that need support in place by Dec. 15, with the system applied for the 2025-26 school year by January. Vermont had planned to finish its correction work by fall of 2028.

Last week, the Vermont Board of Education unanimously backed the idea of asking federal officials to rethink the high-risk designation. Acting board chair Tammy Kolbe said the state acted on its own initiative and has already been working to fix the problem, adding that the board’s resolution reflects that those efforts matter.

The latest warning follows an earlier 2024 high-risk designation tied to separate grant reporting problems involving the same school identification process. In her letter, Baesler said Vermont’s mistakes had produced the wrong result in practice: schools that were improving were marked as needing resources, while some with worsening gaps were not.

Saunders said the complicated nature of the system predates her tenure and has made compliance difficult. She said the state is continuing to correct the errors so it can satisfy federal requirements, but federal officials have warned that failure to meet the deadlines could bring financial and administrative consequences.