The U.S. Department of Education on Friday warned Jeffco Public Schools it has 10 days to correct alleged Title IX violations over the Colorado district’s transgender policy or lose federal funding.

The Notice of Impending Action is the latest development in an ongoing saga between the district and the federal government that started last year, when the DOE’s Office of Civil Rights started an investigation into Jeffco over alleged Title IX violations relating to the district’s policies regarding transgender students.

The results of the investigation, released in March, alleged that the district had 61 “male students” participating in girls’ sports and allowed access to restrooms, locker rooms and overnight accommodations based on gender identity.

Jeffco has defended its policies as being in line with the Colorado Anti-Discrimination Act and said the 61 students the OCR found were a mix of mascots, managers and athletic trainers — not student athletes. The district’s board on Wednesday authorized its legal counsel in a 4-1 vote to begin preparing for a legal battle with the federal government.

Tim Heaphy, a Washington D.C.-based attorney representing the district, told The Denver Gazette on Thursday that Jeffco will seek to file an injunction in court that, if granted, would stop any potential enforcement actions the government may seek to take.

Enforcement action the federal government can take includes referral to the U.S. Department of Justice, administrative enforcement by OCR or the termination of $98 million in federal funding, which could prove disastrous to the district, which is already facing a budget deficit totaling tens of millions of dollars.

In a news release, Assistant Secretary for Civil Rights Kimberly Richey said the Trump administration will enforce federal law to “defend the rights, safety and dignity of the women and girls it promises to protect.”

“Jefferson County Public Schools has refused to correct its widespread and blatant Title IX violations, including policies as egregious as allowing children to share overnight accommodations with members of the opposite sex, despite repeated opportunities to come into compliance with the law,” Richey said. “Today’s action makes clear that continued noncompliance will be met with accountability and consequences.”

Jeffco said in a statement Friday that the letter relies on “the same factual inaccuracies” from the March letter of findings. The district also accused the federal government of disregarding Jeffco’s “good faith efforts” to engage with OCR and said the notice of enforcement is an intended attack on the Colorado Anti-Discrimination Act, which largely prohibits discrimination on the basis of, among other groups, gender identity.

“We have repeatedly asked the OCR how Colorado schools are supposed to follow both Colorado law and OCR’s interpretation of Title IX, which is not legally binding,” the district said. “Instead of continuing that conversation, OCR ended negotiations. Less than 24 hours after Jeffco asked to discuss these concerns in writing, OCR canceled a planned meeting. OCR did not respond to Jeffco’s June 15 letter and instead issued today’s Letter of Impending Enforcement Action.”

Jeffco’s outgoing Superintendent Tracy Dorland and incoming Interim Superintendent Robert Stein also wrote a letter to Gov. Jared Polis, Attorney General Phil Weiser and Colorado Department of Education Commissioner Susana Córdova asking for their support for the district against the federal government, which Jeffco accused of challenging Colorado state law.

“OCR’s proposed Resolution Agreement demands that the District refrain from accommodating transgender students in sports and other sex-segregated spaces ‘notwithstanding any provisions of conflicting state laws,’” the letter said. “In essence, OCR is challenging Colorado law rather than anything unique to Jeffco Public Schools. This is a matter of statewide concern, with implications for all of Colorado’s 179 school districts, as well as its public colleges and universities. For that reason, we are writing to ask for your assistance.”