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.