Republican lawmakers denied a request from Democrats and Gov. Katie Hobbs for a special audit of the Arizona Department of Education after millions of federal funds were not allocated to public school districts.

Lawmakers on the Joint Legislative Audit Committee met Wednesday and heard a presentation from Department of Education Republican Superintendent Tom Horne about federal funding allocations following an announcement from the department that it was returning $29 million of grant funds back to the federal government because the money wasn’t spent on time. 

Horne said Wednesday his administration wasn’t able to spend $24 million of the $29 million because his predecessor Kathy Hoffman, a Democrat, didn’t allocate Title I funding meant for struggling schools before the deadline set on July 1, 2022. 

“We cannot spend money that has not been allocated,” Horne said. 

The failure to allocate the funds was due to an employee that Horne called incompetent because they “hoarded” information to themselves, leading to Horne’s administration firing the employee. 

Horne said the additional $5 million that was given back was due to some school districts not spending it despite numerous calls from his staff reminding them to spend the federal funds. Although he noted an “overwhelming majority” of school districts in the state did spend the federal dollars that were available to them. 

“We nag the districts all the time to spend federal money that they have,” Horne said. “A lot of districts have complained that we call them too much.”

There was confusion among Democrats on the audit committee about the timeline Horne laid out. Rep. Judy Schwiebert, D-Phoenix, said Horne had until September 30, 2023, to spend grant funds, but Horne said Democrats were confusing the non-allocated funds for school improvement grants that had already been allocated. 

House Minority Whip Nancy Gutierrez, D-Tucson, introduced the motion for a special audit on Wednesday, but only Democrats voted in favor for it, leading to it failing in the committee’s hearing. Gutierrez said she still wanted to pursue a special audit because of disagreements Democrats have with Horne over the funding allocation deadline. 

Democrats had earlier requested a special audit in a letter they sent to JLAC Chairman Rep. Matt Gress, R-Phoenix. Hobbs was also in support of an audit but Gress decided to hold a committee hearing instead after Horne requested to appear before the committee to explain the situation. 

Gress said he didn’t support a special audit because the education department, like other executive agencies, already undergo regular audits and the issue was something that auditors would examine.

“An audit is not supposed to be designed as a punishment,” Gress said. “It’s supposed to be something that helps us examine or explore what happened and right now you’re (the Department of Education) in audit and you’re going to be in audit next year.”

Democrats on the committee said they still had unresolved questions after Horne’s presentation. 

“Superintendent Horne did nothing today to allay the serious questions raised about his department’s demonstrated inability to responsibly oversee the state’s federal education funding distribution,” Gutierrez said in a written statement. “He instead confused the issue, misstated facts provided by his own staff, passed the buck and threw his employees under the proverbial bus, which only underscores the need for an audit. Superintendent Horne and his enablers on the committee should have no fear of a review to ensure attention to detail, basic transparency and better communication with schools – and with legislators providing oversight.”

Rep. Judy Schwiebert, D-Phoenix, also pointed out that schools weren’t notified of the decrease in federal funding until the summer. The Arizona Republic reported that Associate Superintendent Michelle Udall told the Arizona Charter Schools Association the department became aware of the issue in March and delayed informing school districts so the department could look for alternative funding sources.

“Public schools rely on the Department of Education for funding distribution and guidance, and with this school improvement incident alone, the department kneecapped the budgeting ability of nearly 200 schools,” Schwiebert said. “Those schools are already in a tight financial situation and this sets them up for more problems down the line.”

Other Republicans saw Democrats’ attention to the issue as a partisan stunt against Horne’s administration. 

“This is nothing more than political theater,” said Sen. Anthony Kern, R-Glendale. “It’s not about the children. It’s about who controls the ADE and had this been the prior administration, then it wouldn’t even be an issue.”

Kern has often called for further action on school districts and administrators that have been the subjects of audits. During an Audit Committee hearing on June 21, he called for Gadsden Elementary School District Superintendent Lizette Esparza to resign after Republicans on the committee said she had a lack of interest in following auditor general recommendations for issues that occurred at the school district before she was hired. 

Sen. Juan Mendez, D-Tempe, criticized Republicans on the committee Wednesday for not pursuing a special audit of the Department of Education after the actions he said he’s seen them take in previous meetings.

“The idea that we’re just letting the department come up, explain themselves, and then let them tell us that they fixed it. That is ridiculous. Why even have JLAC,” Mendez said. “I’ve seen you guys (Republicans) pull out special audits and other audits for asinine reasons.”