Arizona Wrongly Distributed $62 Million In Federal Aid For Poor Students Over 4 Years

By Jim Small and Evan Wyloge

The Arizona Department of Education was alerted in March 2015 that it was improperly distributing federal funds intended to help low-income students, but the department didn’t undertake serious efforts to identify and fix the problem until early 2017.

As a result, the amount given to every school district and charter school that qualifies for the funding, known as Title I, received the wrong amount of funding for four school years. In all, the department misallocated $62.2 million, according to AZCIR’s analysis of data provided by the department.

The lion’s share of those errors resulted in school districts being given too much money during those four years: $46.8 million was over-allocated to local education agencies (LEAs), the federal term used for school districts and individual charter schools, while $14.9 million was under-allocated.

Four years affected

For example, Legacy Traditional Charter School in Maricopa, was given $298,046 in 2014, but should have gotten $503,412. That same year, Tempe Preparatory Junior Academy got $185,586, but should have gotten only $3,164.

Some schools got too much money for the four years, other schools got too little over the four years, and some schools got too much in some years and too little in other years. Acclaim Charter School, for example, was given $32,091 too little in 2014, and $16,453 too much in 2015.

Although the Department of Education hasn’t yet negotiated a final plan with the U.S. Department of Education to rectify the situation, public records provided to AZCIR show that the agency is considering requiring school districts who received too much money between 2014 and 2017 to repay it over several years beginning in 2019.

Likewise, LEAs that didn’t receive enough Title I funding during those years – almost exclusively charter schools – would see their funding bumped for several years beginning in 2019, according to Department of Education documents.

Talking points

Erik Francis, an education consultant who works with Title I schools and used to work in the Department of Education as a Title I specialist, said students will pay the price if ADE claws back money from school districts who were erroneously given too much funding.

“Why do schools need to suffer, to experience cuts, because of an error the Department of Education made?” he said.

Because the department over-allocated more than it under-allocated, leaving a net deficit for the program, the agency reduced the total amount of funding for the 2017-2018 school year, and ensured that no LEA saw a reduction of more than 15 percent.

2017-18 changes to allocations

ADE spokesman Stefan Swiat said federal education officials asked for a range of possible remedies. Cutting payments to schools to recoup the $46.8 million that was over-allocated remains an option, he said.

“That is a worst case – not an agreed upon plan of action,” he said.

A more optimistic prediction, Swiat said, would be that the federal Title I program provides a forgiveness to the state over the current deficit.

Records show that the Title I problem initially came to light in March 2015 after a routine examination of the program by the State Auditor General. The audit was for July 2013 through June 2014, when the agency was led led by Superintendent of Public Instruction John Huppenthal.

Huppenthal lost re-election in 2014 and was replaced in January 2015 by Diane Douglas.

Swiat blamed his agency’s failure to fix the problem sooner on employees that Douglas inherited from Huppenthal, whom he said were replaced in late 2016. Shortly after that, he said the department’s leadership realized the problem had not been fixed. After contracting in June with consulting firm Afton Partners, Swiat said ADE realized the problem was much worse than initially believed.

Afton was hired to determine the scope of the problem, devise a correct allocation formula and develop a remediation plan to present to the U.S. Education Department.
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About Arizona Center for Investigative Reporting 25 Articles
The Arizona Center for Investigative Reporting is an independent, nonprofit media organization dedicated to statewide accountability journalism in Arizona. AZCIR’s mission is to produce, foster and promote investigative journalism through original and collaborative reporting, public events and trainings, for the betterment of our communities.


  1. Let the finger pointing begin.

    If this problem comes down to a few people left over from Supt. John Huppenthal days, then who was overseeing those few people? Moreover, if Supt Douglas kept these people on the payroll, then like it or not, the buck stops with her. These millions are not rounding errors. Here’s hoping this funding allocation gets corrected going forward. But none of us will be holding our breath.

    I’m beginning to wonder if the AZ Dept of Ed and State Board of Ed are using Common Core math to function.

    Presently AZ State Board of Ed and AZ Dept of Ed have been unable to compute accurate figures for the school letter grades based on their own created formula. What makes them able to compute Fed ED Title I funds which must have some firm guidance? Not much. It’s just tax dollars and deficits “work” in government budgets but not in our regular real world households.

    The hits to students keep coming. State Board of Ed just sent out a mea culpa over releasing private student data in the inaccurate school letter grade data. They can’t walk and chew gum and all they said basically was oops, and if you see the private student data, that YOU should be responsible with it.

    I support our Governor on several things; but, in the area of education, I feel let down on MANY issues. Our Governor talks about “accountability” and “tightening the belt” all the time. He thinks AZ parents and taxpayers have accountability and transparency on his appointed Board staffed with another dozen or so employees in his Office of Education. This is another layer separate from the AZ Dept of Ed.

    Where is it that all these people are being accountable to you and I?

  2. Knowing how many educational administrators function, they probably spent the same yearly amount on the school lunches for the students and pocketed the rest for themselves and their close cohorts.

  3. I think the question is ; what are the performance characteristics of the schools ‘overpaid’ and ‘underpaid’ – did the students ‘perform any better with more money’ – ‘did the perform any better with less money’ – dis less money drop performance? I think this is the perfect laboratory of cause and effect – even if the bone heads handing out the money didn’t have a clue. Of course don’t want them doing this post mortem evaluation, need to hire someone with a brain.. or perhaps a good teaching college project – how to have your cake and eat it too..

  4. “Erik Francis, an education consultant who works with Title I schools and used to work in the Department of Education as a Title I specialist, said students will pay the price if ADE claws back money from school districts who were erroneously given too much funding.”

    From above. Mr Eric Francis it is exactly your attitude is why we are in the fix we are in.

    If you received too much money the answer isn’t O-Well lets just go forward. The answer is pay it back and distribute it where it belongs. I realize it’s a lot of work but if YOU a had done it right in the first place it wouldn’t be a problem.

    Actually the districts are also to blame if there was a big change(+ or -) some one should have brought it up.

    Is it any wonder no one respects government bureaucrats.

    • This comment assumes the recipient of the funds knew their allocation was too high yet there is no evidence that they were in a position to know that to be the case AND, it is not their job to police distribution of Title 1 funds, their job is to spend the allocated funds for good programs. Presumably. repayment of the funds would be onerous on the schools and unless there is a showing that the funds were improperly spent, it is hard to see how requiring a refund of the over payments is fair. On the other hand, students in those schools that were given less funds than they were entitled to were denied educational benefits for those years and increasing their funding for the same number of years they were shorted funds would seem the fair way to proceed to address any harm students may have suffered during the years the schools were short changed. Of course some bumbling bureaucrat(s) should be disciplined but as long as our elected officials are irresponsible clowns, that`s not going to happen.

  5. I’d like to know just what they spent the money on. A complete breakdown right to each student if that was the case.

  6. Got to be so proud of your bureaucrats and their leaders don’t you. Can’t even do the job the taxpayer pays them to do. Utterly pathetic. Then they procrastinate about it for 4 years and make the situation worse. What the article didn’t say is if anyone lost their job. Likely not. Can’t live without incompetent bureaucrats and politicians can we….. Would like to try to find out one day.

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