The first lady of the United States is speaking with people during a tour of a vaccine site at a middle school.
The Biden administration threatened to withdraw millions of dollars in federal aid for Arizona, accusing the state of using the funds to undermine efforts to stop the spread of the virus.
The Treasury Department gave the governor 60 days to either change the programs or use the money for something else.
The Centers for Disease Control and Prevention's guidance on how to reduce Covid transmission is contrary to the conditions imposed by the programs.
The Biden administration could take back the money if Arizona doesn't comply with the demands.
CNBC requested comment from the office of the governor on the letter.
The American Rescue Plan, a $350 billion chunk of the multitrillion-dollar Covid relief package, was signed into law by President Joe Biden last year.
The funds are intended to mitigate the fiscal effects stemming from the COVID-19 public health emergency, including by supporting efforts to stop the spread of the virus.
The letter said that the federal money was used by the Arizona school programs to impose conditions on participating in or accepting a service that undermined efforts to stop the spread of COVID-19.
The Education Plus-Up Grant Program allows funds to be given only to schools that do not enforce mask requirements.
The other program, totaling $10 million, provides grant money to help parents move their kids out of schools that are deemed to be imposing unnecessary closures and school mandates.
The program is only available to families if the student wears face coverings at school.
The latest letter was sent by Kathleen Victorino, acting deputy chief compliance officer of the Treasury Office of Recovery Programs.
The Treasury Department asked Arizona how it would fix the issues identified in the two school programs.
Victorino wrote that the state responded a month later but failed to give any plans for the issues identified.
The highly transmissible omicron variant fuels an unprecedented surge in cases, as the latest fight over Covid safety rules comes. The high court left intact a vaccine mandate for health-care workers, despite blocking enforcement of the Biden administration's rule for employees in large companies.
The disputes precede omicron. The Republican-controlled legislature in Arizona tried to ban mask mandates and other Covid safety measures. The Supreme Court ruled that the measures were illegal.
CNBC's Tom Franck contributed to the report.
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