The Arizona Department of Education is seeking a waiver to avoid sending millions of dollars for low achieving schools back to the federal government.
The Arizona Republic first reported the state Department of Education had to return a portion of improvement funds for Title 1 schools from 2021 and 2022, because schools missed a September 2023 deadline to obligate all of the money, or assign the funds for specific expenses. The U.S. Department of Education confirmed the state was at risk of losing a total of $28.5 million.
Shortly after that report, the U.S. Department of Education told KJZZ News that the state education department could request a waiver to extend that deadline but had not yet done so.
“If the state is interested in submitting a request to extend the obligation period for either FY2020 or FY2021 Title I funds, ED would be able to consider such a request,” according to a statement from the U.S. Department of Education on Aug. 9.
Then, on Aug. 12, Superintendent Tom Horne announced that the department submitted a waiver request to extend the obligation deadline the 2021 and 2022 funds along with school improvement money from 2023.
“On Aug. 8, USED contacted ADE Title I staff to encourage the department to apply for what is known as a Tydings waiver to allow excess funds that had accrued due to under-allocations that began in Fiscal Year 2020,” according to an Arizona Department of Education press release. “Prior to the Aug. 8 notification, no requests had been mentioned by USED to ADE.”
But it’s unclear why the Horne administration initiated the request itself before being contacted by the U.S. Department of Education. A spokesman for the department acknowledged it knew that former Superintendent Kathy Hoffman’s office sought a waiver in 2022 to extend the deadline for funds awarded the year prior.
Horne, a Republican, continues to blame staff hired by Hoffman, a Democrat who left office in January 2023.
Doug Nick, a spokesman for Horne, claimed that a former Hoffman staffer, who briefly served under Horne, failed to notify superiors about the impending Sept. 30 deadline before leaving the office in March 2023.
But the U.S. the Department of Education confirmed it sent at least one notification about the impending deadline to Horne’s office after that staffer left in March.
“Each year in the August/September timeframe, [the U.S. Department of Education’s Office of Finance and Operations] sends out a communication to chief state school officers noting the end of the obligation period,” according to a statement from the U.S. Department of Education.
Despite that, the Republic reported that Associate Superintendent Michelle Udall said the department only realized the money had expired in March 2024, and a spokesperson for the department confirmed it did not begin the waiver application process until federal education officials contacted them on Aug. 8.
Nick said the Arizona Department of Education’s Finance Department did not receive any notifications.
“And just to reiterate, ADE allocates the funds to the school districts and charters and we do not have direct knowledge of what they have spent until they report to us in their completion report.,” Nick said.
However, the federal agency said the state agency can access and see the remaining balances for the Title 1 funds in question at any time.
Still, Nick maintains it was Hoffman, not Horne, who is at fault. He pointed to the fact that the money in question had to be allocated — or awarded to specific schools — in 2022 while Hoffman was still in office.
“Even had the previous administration alerted us of the upcoming deadline, we could not have issued new grants to spend down that money because they would not have ended before the reversion date. Those grants had to have begun no later than summer of 2022,” Nick alleged.
Hoffman told the Republic that schools struggled to spend the influx of federal monies that came their way during the COVID-19 pandemic and that funds like the Title 1 school improvement monies — which can have their deadlines extended for years — took a backseat to pandemic relief money that had stricter deadlines.
But state agencies have to apply for those extensions — something Hoffman did in 2022 — in order to avoid returning those Title 1 dollars to the federal government.
The confusion over the school improvement funds and how they were allowed to lapse has led Gov. Katie Hobbs and Democratic lawmakers to ask the Legislature’s audit committee to order a special audit of the department’s administration of those funds.
“These actions bring into question whether the Department exercises the attention, transparency and clear communication needed to appropriately oversee our state's educational funding,” Rep. Nancy Gutierrez (R-Tucson) said in a letter to Rep. Matt Gress (R-Phoenix), who chairs the audit committee.
Gress said Auditor General Lindsey Perry’s office is already conducting an audit of the Department of Education that will cover those federal Title 1 grant dollars.
“I’m conferring with the Auditor General on the best course of action,” Gress said.
