Science Foundation Arizona is suing the State of Arizona for breach of contract over the sweep of funds the organization had already contractually spent. SFA wants $18.5 million returned. There are a number of convolutions to the legal issues here that are well described in the Arizona Capitol Times story yesterday.
The Legislature zeroed out the Foundation's entire state funding of $22.5 million midway through the fiscal year, after much of it had been obligated.
A lot of the funding was granted to researchers at the state's universities, so the cancellation of projects that professors thought were approved, has served as a double whammy to university budgets overall.