It appears everyone is pointing the finger at each other as the questions arise as to why New York was passed up for millions of federal dollars from the U.S. Department of Education. Between the city, the state and education officials, everyone seems to be a player in the blame game.

According to the U.S. Department of Education, New York ranked 15th out of the 16 finalists for a $770 million grant. Money instead went to Delaware and Tennessee in the first round of Race to the Top grants. A piece of over $4 billion is still up for grabs.

“We set a very high bar for the first phase,” U.S. Secretary of Education Arne Duncan said. “With $3.4 billion still available, we’re providing plenty of opportunities for all other states to develop plans and aggressively pursue reform.”

The 1,000-page application that the state submitted, along with a presentation made before a panel, wasn’t enough to convince reviewers. The competition grades states on a 500-point scale, with New York scoring 408.6.

Reviewers’ comments revealed several factors as to why the state didn’t get the money in the first round, including the question of how the state would spend funds.

One reviewer pointed out “there are projected expenses that call into question New York’s stewardship of funds.” The review specifically highlighted using the money to buy office furniture, totaling $200,000, on things like $550 office chairs, $1,800 desks and $1,500 printers. It was also pointed out that the state’s application was “silent” about removing ineffective teachers.

Teacher unions and education advocacy groups raised concerns about teacher evaluations and tenure being tied to student achievement. Others have issues with charter schools in public school buildings.

“We will closely analyze the USED reviewers’ response and will revisit our application with a view to submitting a successful second round plan that advances the Regents’ education reform agenda,” State Education Commissioner David Stier said. “For the sake of our 3.1 million children, we cannot allow this critical opportunity to undertake vital reforms to slip away.”

A key concern was about the state’s 200 charter schools. A reviewer wrote that New York has a hard cap on start-up charter schools, causing point deductions. When the New York team was asked about the hard cap, reviewers said the response was not convincing enough to change laws to make substantial reforms. The argument about what to do about charter school caps caused a split between legislators in Albany.

In a statement, New York Charter Schools Association President Bill Phillips said that the pass-over should be no surprise. He pointed out that the state’s application omitted key educational reforms that were advocated by the Regents.

“We urge the state legislature to use this second chance to compete for new funding by raising the statutory cap on charter schools and equalizing charter funding to ensure greater public educational opportunity and equity,” he said. “It’s time for New York’s lawmakers to embrace the president’s vision for charter schools to win $700 million that the state desperately needs to mitigate the state funding cuts looming for next school year.”

Democratic Senate Leadership and Assembly Speaker Sheldon Silver introduced a bill that would have raised the cap to 400 and placed more transparency and accountability in the charter school movement. It would have added more restrictions on the creation of charter schools overall, specifically by changing the hands that approve new charters.

Delaware has no limit to how many charter schools, while Tennessee raised its charter school membership from 50 to 90. Both states also tie together student achievement and evaluations when it comes to teacher tenures.

Losing the first round is a crucial blow to the state’s budget deficit. Gov. David Paterson is proposing to cut $1.4 billion from the state’s education funding. In a conference call earlier this week, Paterson said that the money Tennessee and Delaware were getting could have been a part of New York’s deficit reduction plan.

State Assemblyman Karim Camara, who is on the Standing Committee on Education, called the loss a “great disappointment” and blames a deeply flawed political process as to why the state missed out.

“Given the difficult times that we face, it is vital that we submit a plan by the next upcoming deadline that allows for vision, innovation and accountability to ensure that every child in New York receives the best education possible,” he said. “It is imperative that we do everything we can to ensure that New York is much more competitive in receiving the $700 million in the next round of Race to the Top funding.”

Mayor Michael Bloomberg blamed problems in Albany when it came to the budget for the state getting passed over for the $770 million.

“Race to the Top provides an unprecedented opportunity to reform our schools and challenge an educational status quo that is failing too many children. President Obama and Congress have provided significant financial support for school reform,” Bloomberg said. “This is a chance to change our schools and to accelerate student achievement, and we will continue to do everything in our power to ensure that we are more than eligible to receive as much federal funding as possible as this process continues.”

City Department of Education Chancellor Joel Klein said that Race to the Top’s standards are high when it comes to education reform and that New York’s weren’t high enough. He called the missed opportunity “painful” and said the state must now do everything to get a chance in the second round.

“That means working with lawmakers to lift the cap on charter schools, mandating a teacher evaluation system that takes into account student achievement data, making it easier to remove ineffective teachers and ensuring that teacher layoffs are based on merit rather than seniority,” said Klein.

New York will have another chance to get the money when the state reapplies for the Race to the Top competition on June 1.