Hobbs, Horne spar over federal COVID aid for private schools

Nearly $27 million in federal pandemic aid for private schools is in limbo while the Arizona Department of Education and the Governor’s Office spar over who has the authority to spend it. 

On Friday, Gov. Katie Hobbs sent a letter to Superintendent of Public Instruction Tom Horne, accusing him of dragging his feet when it came to releasing COVID-19 relief money awarded to Arizona. 

“I write to urge you, for the sake of Arizona’s children, to briefly set aside whatever political animosity you may harbor for me or my political party and collaborate with my Office to ensure that Arizona schools and students do not lose out on Arizona’s fair share of federal taxpayer funds,” she wrote. 

In 2021, the federal government set aside funding to help private schools weather the COVID-19 pandemic in two different packages known as Emergency Assistance to Non-Public Schools, or EANS funds. Part of the funding was intended to help schools with large numbers of low-income students. Arizona received almost $109 million in total. 

The Arizona Department of Education had the authority to award funds to private schools until early December of last year, when any leftovers were legally required to be sent to the Governor’s Office to be used for general education purposes. 

But, Hobbs said in her letter, that transfer never happened. And, despite repeated warnings that failing to release the funding amounted to a violation of federal law, ADE officials continued to hold onto it. Horne took over as leader of the education department in January.

“On each occasion, rather than initiating a reversion, your Chief Financial Officer advanced an erroneous interpretation of federal law that would require my Office to periodically request partial disbursements of funds from ADE,” Hobbs wrote. 

Eventually, the governor involved the U.S. Department of Education, which sided with her interpretation and moved all of the funding under her control, including money that the state education department awarded to private schools. And rapidly approaching funding deadlines mean the money could go right back to the federal government as soon as the end of this month if it isn’t disbursed as intended.

Hobbs calculates that as much as $6 million from the first funding package would have to be refunded by Sept. 30 and $22 million would be lost next September. In her letter, she accused Horne of making disbursement more complicated by failing to share accurate award amounts, leaving her office in the dark and sending award recipients to her for their promised grants. Contracts awarded by the department of education should be fulfilled by that same department, she argued. 

To resolve the ongoing confusion, Hobbs added an interagency agreement form to her letter. The form allows her budgeting office to disburse the money that Horne’s office already promised to private schools back to ADE so that it can fulfill those contracts. She urged Horne to approve the agreement and provide more accurate information on grant amounts.

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Horne rebutted that his office had its hands tied by Hobbs when she applied to become the fiscal agent of the EANS funding. 

“Every word in the governor’s letter is a lie,” he said in an emailed statement. “Due to her own actions, the governor now needs to take care of this problem, and not pass the buck to the Department of Education.”

The department is now effectively incapable of paying any awards, Horne said. ADE spokesman Doug Nick did not respond to a question about whether Horne intends to approve the interagency agreement form sent by Hobbs, reiterating that the next steps are up to her as the fiscal agent. 

Christian Slater, a spokesman for Hobbs, said Horne’s comments were yet another example of his unwillingness to reach across the aisle. 

“The fact is this: Superintendent Horne has time and again refused to work in good faith with the Governor’s office to meet his contractual obligations with the EANS money,” Slater said. “That’s why we proposed an interagency service agreement to dispense funds to ADE so that the department could pay its grantees and prevent the loss of tens of millions of education dollars.”