Education Dep't: Massachusetts did not break rules

The Education Department is reassuring the state of Massachusetts it does not agree with an internal watchdog who suggested the state was using economic stimulus money improperly.

The department's inspector general had singled out Massachusetts and two other states, Connecticut and Pennsylvania, for using stimulus dollars to plug budget holes instead of boosting aid for schools.

"We've looked at this pretty carefully," Education Secretary Arne Duncan said. "Massachusetts has done nothing wrong or illegal."

Massachusetts officials had sent a written complaint to the department, saying their plan for spending the stabilization dollars was approved by the department and was in compliance with the stimulus rules.

In a letter, Deputy Education Secretary Tony Miller assured Massachusetts Education Secretary Paul Reville that the department does not believe his state broke any rules or laws. That letter was sent Monday and made public Tuesday.

Reville said the letter "confirms what we've said all along," that Massachusetts used the stimulus money properly.

The inspector general, in a memorandum last month, had noted the intent of the stimulus was not for state lawmakers to simply cut state education spending and replace it with stimulus dollars.

The watchdog acknowledged Congress made that tough to enforce and said that some states - Connecticut, Massachusetts and Pennsylvania were named - are doing it. Unlike Massachusetts officials, those in the other two states didn't send similar written complaints.

Congress included $100 billion for education in the stimulus law earlier this year. Part of that was a $40 billion fund to stabilized state and local budgets. Nearly three-quarters of the $40 billion stabilization fund has already been awarded.

But as the bill made its way through Congress, lawmakers decided not to prohibit states from using the stabilization money to replace precious state aid for schools. They required states to maintain spending on K-12 schools and colleges but only at 2006 levels, which allowed most states to make significant cuts to education.

The letter from Miller noted that Massachusetts is keeping funding at 2006 levels.