Committee Grants Horne Exemption on Untapped Federal Funds

In a recent legislative session, Republican lawmakers rejected a proposal for a special audit of the Arizona Department of Education. The request, backed by Democrats and Governor Katie Hobbs, came after significant federal funds intended for public school districts went unallocated.

During a meeting of the Joint Legislative Audit Committee, Republican Superintendent Tom Horne presented information regarding the department’s handling of federal funding. The committee learned that $29 million in grant funds were being returned to the federal government due to unutilized allocations.

Horne attributed the inability to spend $24 million of those funds to actions taken by his predecessor, Kathy Hoffman, who failed to allocate Title I funding before the July 1, 2022 deadline. “We cannot spend money that has not been allocated,” Horne explained.

The Superintendent criticized an employee for incompetence, suggesting this individual withheld critical information, leading to their dismissal. He also noted that an additional $5 million returned was due to certain districts not utilizing the funds, despite repeated reminders from his staff.

“We nag the districts all the time to spend federal money that they have,” Horne remarked, acknowledging complaints from some districts about frequent reminders.

Confusion arose among Democrats regarding the timeline for fund disbursement. Representative Judy Schwiebert questioned Horne’s statements, prompting clarification that the confusion stemmed from misunderstanding the allocation process for separate school improvement grants.

Democrats attempted to introduce a motion for a special audit, but it failed, receiving only their votes. House Minority Whip Nancy Gutierrez expressed concerns over funding allocation discrepancies, advocating for continued efforts towards a special audit.

Hobbs also supported the need for an audit. However, JLAC Chairman Rep. Matt Gress opted for a committee hearing instead, citing ongoing audits of the education department as sufficient. “An audit is not supposed to be designed as punishment,” Gress stated, emphasizing the proactive role of regular audits.

Despite Horne’s presentation, committee Democrats remained uneasy. Gutierrez remarked that the Superintendent failed to address critical questions about his department’s management of federal education funding. She criticized Horne for misrepresenting facts and passing blame.

Representative Judy Schwiebert highlighted that schools were informed of funding decreases only in the summer, despite the department’s awareness of the situation as early as March. This late notification, she argued, jeopardized the financial stability of numerous schools already facing challenges.

Republicans contended that the focus on the funding issue was politically motivated. Senator Anthony Kern characterized the situation as “political theater,” arguing that had the previous administration been in charge, it wouldn’t have garnered similar scrutiny.

Mendez also criticized Republican committee members for not advocating for a special audit, noting their previous enthusiasm for audits on less consequential matters. “Why even have JLAC?” he questioned, underscoring the need for rigorous accountability.