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Ed. Dept. to Arizona on Stimulus: Not So Fast


The U.S. Department of Education and Arizona are in a stand-off over money from the State Fiscal Stabilization Fund, as state officials accuse the feds of delaying the release of stimulus funds. That forced Arizona to borrow some $130 million to make a payment to schools. Read all about the kerfluffle here.

The most interesting thing, to me, is how this all started. Turns out, there's a fraud and accountability alert built into the stimulus reporting system that's akin to credit card fraud protection (which often results in a call from your credit card company when a funny charge appears to be going through). Arizona officials, within the last several days, attempted to draw down from their $681 million stimulus allocation more than $400 million—which is an unusually high amount, especially in a state that hadn't drawn down a single dollar of stimulus money so far, says ED's Sandra Abrevaya. That unusually high amount triggered some sort of alert to ED officials, who called Arizona officials to ask what they were using that money for.

Turns out, ED officials say, Arizona wasn't planning to use it for education purposes, as promised in its application and as required by the stimulus law. Instead, state officials planned to use the money to plug general budget holes.

The feds and state officials hope to resolve this in a conference call today. Stay tuned.


As a retired teacher I must say that I'm glad the fraud and accountability alert is built into the stimulus requirements for education, especially with states wanting to accept funds meant for education and use them to plug holes in state budgets. What has always amazed me about states and their citizens is their demand for academic excellence does not match their willingness to pay for it. I worked 31 years at a high school in GA with the worst school library I've ever seen at any school, electrical outlets in classrooms but no computers, teachers given only $100.00 to purchase supplies for the entire school year, etc. In addition there is this drive to replace public education with voucher programs. I think many states and citizens want to underfund public education and fulfill the wishes of those who know little about public education but a lot about promoting their own interests. This is political pandering, pure and simple.

The fraud is in the provisions of the "State Fiscal Stabilization Fund." Arizona was clumsy. But in every state with reduced state and local income, the "education stimulus" is being used to plug general funds. With "education" being, by far, the largest state and local public service, it will inevitably take the largest cut.

The analogy to "credit card fraud" is inapt.

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