Wow, this seems messy. I wrote yesterday that Arizona State Treasurer Dean Martin had to borrow $130.9 million to complete the monthly state payment to local school districts. Martin blamed the lack of cash in the state bank on the Obama administration, claiming the feds were dragging their feet on the transfer of $250 million in stimulus dollars that Arizona is eligible for.

But Capitol Media Services is reporting today that Gov. Jan Brewer’s administration might be to blame, because it failed to correctly apply for the education stimulus money in the first place.

Brewer and the Legislature were counting on that $250 million this month to shore up the state’s daily cash-on-hand as they struggle to keep the budget balanced. But Capitol Media Services quotes Sandra Abrevaya, a spokeswoman for the U.S. Department of Education, as saying the federal stimulus law requires individual schools to apply for the funds and the money has go straight to schoolhouse — it can’t pass through the state’s hands.

The result of this is local school districts will get another $250 million, once they send in the correct applications to the federal education department with help from the state.

Meanwhile, Brewer and lawmakers will have to figure out how to get back $250 million already sent to school districts, or the state budget deficit will grow even bigger. Most likely, the state will reduce a future monthly payment by the same amount as part of a budget special session. But the state has to be sure such cuts wouldn’t violate another section of the federal stimulus law.