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Arizona Misallocated Millions in Federal Special Education Funds

Since at least 2015, Arizona has sent the wrong amount of special education dollars to some of its districts and now is asking the U.S. Department of Education if it can "hold harmless" school districts that received more than they should have. 

The Arizona Capitol Times reports that Arizona also plans to use set-aside funds to pay back districts that were shorted funds due to the state's error. 

The special education funding errors came to light on the heels of the state acknowledging it had also misappropriated a portion of its federal Title I money. 

The Arizona Daily Star reports that the misallocated funds amount to about 6 percent of the federal special education dollars the state has received in the past three years. 

Stefan Swiat, a spokesman for the Arizona Department of Education, told the newspaper that both errors were similiar—they resulted in incorrect application of a complex funding formula. 

From the article: 

Arizona Superintendent of Public Instruction Diane Douglas sent a letter to schools ... informing them of the problem and saying her department is working with the federal Department of Education in hopes of repaying schools that were shorted and "holding harmless" schools that received more than they should have.

But the U.S. Department of Education has not yet seen, nor approved, that plan, and it's unclear if they will forgive and forget the misallocations.

Swiat said that based on initial conversations, the Arizona Department of Education is optimistic its federal counterpart will forgive the error and not require schools that were overpaid to refund the money. But he acknowledged that at the end of the day, the decision is up to the federal government.

School districts are not yet aware if they were over- or underfunded, according to reports. At least one school leader wonders if the problems have yet to be resolved. The Arizona Capitol Times reported that the Pima Accommodation District, which provides educational services to students going through the juvenile justice system, saw special education funding drop from more than $200,000 last school year to less than $29,000 this school year. 

"To us, it's a blindside," Hernandez told the Capitol Times. 


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