State wants Nashville school district to account for more than $100M in federal grants

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The Tennessee Department of Education is demanding Nashville’s public school district to account for nearly $110 million in federal grants.

In a letter to Adrienne Battle, director of Metro Nashville Public Schools (MNPS), Tennessee Education Commissioner Penny Schwinn outlined a total of nearly $110 million in federal grants allocated to MNPS over the past two fiscal years that she said the district has not yet drawn down.

Schwinn described “significant issues in the use, drawn amounts, and oversight of federal grant funds” and gave MNPS 15 days to account for any of the funds already spent. MNPS will have 30 days to develop a plan to improve documentation and timely requests of federal funds and 45 days to correct findings from a recent audit by the state comptroller.

MNPS spokesman Sean Braisted told The Center Square the district has utilized funding in compliance with state and federal law and officials look forward to providing a comprehensive response to Schwinn’s request.

“It was insinuated that MNPS had significant unspent resources in the form of federal grant funding,” Braisted said of Schwinn’s letter, which was sent Monday. “To be clear, there is not a pot of unspent money. There is a large distinction between drawing down funds through a formal process and allocating and spending funds to support the needs of our students and staff.”

Nearly $25.7 million of the unaccounted funds are federal COVID-19 pandemic relief funds. Schwinn said the state will withhold a second round of pandemic aid approved by Congress in December until MNPS provides an account of the funds, citing federal law that prescribes state education agencies may not award grant funds “to a subrecipient known to be out of compliance.”

The state’s concerns over MNPS’ financial management are not new.

“Our program and fiscal teams have worked with your staff for over a year – providing technical assistance, extensions, and training on dozens of occasions,” Schwinn wrote, noting that financial accounting concerns raised in January 2020 continued to be of concern.

Schwinn cited a recent audit that found MNPS “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,” Schwinn wrote.

The letter comes one week after Gov. Bill Lee strongly encouraged school districts to return to in-person learning in a speech opening an education-focused special legislative session. The next day, Republican state lawmakers filed a bill that would enable the state to defund school districts that refuse to reopen for in-person learning. The bill did not pass during the special legislative session, but may be refiled in the future.

“We hope this is a simple misunderstanding that can be addressed in the weeks to come, and is not motivated by opinions related to the district’s decision-making about in-person learning,” Braisted said.

In addition to last week’s exchange over in-person learning, MNPS joined Nashville Metro Government and Shelby County last February in suing the state over a school-choice program that authorized the state to fund Education Savings Accounts, enabling low-income students in failing school districts to pursue an alternative educational option. That lawsuit has been appealed to the Tennessee Supreme Court.

“I cannot underscore enough the seriousness of the current financial management of federal funds and compliance issues in MNPS,” Schwinn concluded. “It is imperative that these issues be resolved quickly, accurately, and comprehensively.”

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