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Seattle’s beleaguered special-education department will have to operate on a tighter leash until the district shows substantial progress on fixing a host of management and compliance problems.

The state is withholding about 28 percent of Seattle Public Schools’ federal funding for special education because of the district’s longstanding failures to educate children with disabilities in accordance with federal law.

The state will keep $3 million of the $10.6 million Seattle is supposed to receive this school year and will keep weekly tabs on the district’s progress.

The department’s total budget is $103 million to educate about 7,200 students.

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The state’s special-education director, Doug Gill, informed the district Sept. 18 of its new designation as a “high risk” recipient of federal dollars.

Superintendent Larry Nyland was unavailable for comment Tuesday afternoon, according to a district spokeswoman. But in a letter to the state, he has said he is confident Seattle will show enough progress to justify the release of the $3 million.

Seattle is entering the second year of an improvement plan that was supposed to have been completed June 30.

The state gave Seattle another year to carry out the plan, requiring the district to hire a national consultant to help, but then the wheels started coming off.

In July, the state received the district’s own audit of special education, which showed student files missing required signatures, outside services for students performed before contracts were approved, missing documentation for outside contracts, and the lack of a handbook clearly stating policies and procedures.

Then in August, the district announced it had sent its special-education director, Zakiyyah McWilliams,home on paid leave while it investigated the hiring of the national consultant this past spring.

The district named Wyeth Jessee, then executive director of leadership development, to be her interim replacement. McWilliams remains on paid leave, and the district provided no further details about her status Tuesday.

The TIERS Group from Louisiana State University, a subcontractor with a national education-consulting firm called Accelify Consulting, was hired in April with a $150,000 contract that expired Aug. 31.

TIERS consultants visited Seattle, conducted interviews and wrote a highly critical report painting a picture of systemic chaos and dysfunction in the department.

The firm was in line for a second $450,000 contract for the coming school year to help Seattle carry out its improvement plan, but that was put on hold when the district learned of possible problems with how the original contract was awarded.

The district asked for new proposals for the yearlong contract. Two firms responded, including Accelify, but TIERS decided to end its involvement with Seattle Public Schools, according to Alan Coulter, who leads the TIERS Group.

The administration is asking the Seattle School Board at its Wednesday meeting to approve a contract for about $421,000 with the other bidder, a California-based consultant, Seneca Family of Agencies.

Seneca would use the findings in the TIERS report as a starting point to help the district carry out the improvement plan rather than duplicate the work done this spring, Gill said.

And that work would take place under greater outside scrutiny, including:

• Weekly district meetings with an on-site compliance officer chosen by the Office of the Superintendent of Public Instruction.

• Monthly meetings that include staff from the district, the state superintendent’s office, the consultant and the Puget Sound Educational Service District.

• On-site quarterly reviews requested by the state superintendent’s office for staff from the U.S. Department of Education.

John Higgins: 206-464-3145 or jhiggins@seattletimes.com On Twitter @jhigginsST