School funding slip results in millions of misplaced dollars

PHOENIX (AP) – The Arizona Department of Education has uncovered an error in federal funding allocations that led to millions of dollars intended for special education programs being allocated to the wrong schools.

The department under-allocated $15.2 million in Individuals with Disabilities Education Act funding, said a letter sent Tuesday to school districts and charter schools.

An audit by the Office of Special Education Programs in 2015 also found $14.3 million was over-allocated, affecting about 400 charters and districts, Arizona Department of Education spokesman Stefan Swiat said.

The letter, signed by Superintendent of Public Instruction Diane Douglas, blamed the mistake on "an incorrect funding formula that became less accurate."

Though the error was initially identified in 2015, Swiat said the extent of the problem was not clear until last week.

The department's plan to recover from the error was still unclear, but last week’s letter addressed ongoing questions about how both Title I and IDEA allocations may be impacted in the years to come.

The discovery follows a glitch resulting in hundreds of district and charter schools have been receiving more federal funding for low-income students than they were entitled to while others received far less.

The misallocation of Title I dollars dates back at least to fiscal year 2014, the Arizona Capitol Times reported.

In negotiating with the U.S. Department of Education, the department will propose to hold schools "harmless," the letter said, meaning districts and charters that received too much funding will not be asked to return the over-allocated funds, nor will their future allocations be reduced to make up for the lost dollars.

The department also will propose making the underfunded districts and charters whole over the next three to five years by allotting the funds they had been shorted.

The department will accomplish that by "completely emptying our coffers from set aside funds," the letter said.