“It seems wildly counterproductive to take badly needed dollars away from the restructuring effort,” said  Board member Daniel Corr, who was part of the unanimous vote.

The state took over Phoenix’s Murphy School District last June after years of financial mismanagement.

The Arizona Auditor General reported in December the district’s financial system was still not in compliance with state standards.

The firm hired to oversee Murphy, Simon Consulting,earlier found the district had overspent its budget, had unaccountable travel expenses and several schools were infested with mold and rats.

Murphy received $5,954,705.74 of state aid in fiscal year 2017.

The Arizona Department of Education has temporarily withheld funding from about 30 districts since 2005 for a lack of financial compliance and other reasons.

Board staff recommended Murphy lose 3 percent of its state funding until the Auditor General finds it’s in compliance.

“Taking that money away, it’s going to hurt the kids, it’s going to hurt teachers in those classrooms,” said Board Member Armando Ruiz.  “They’ve been punished enough already.”

Ruiz is one the Board’s newest members and a South Phoenix charter school operator. At the meeting he shared that he worked as a teacher in the Murphy district at the beginning of his career.

“That’s a community that it just has always struggled,” Ruiz said.