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New York City cannot spend state school aid until it holds mandatory hearings on how the money will be used, the state said on Wednesday, correcting an earlier statement that the city could already use the funds.

The state funding, known as Contracts for Excellence, is only doled out to districts that prove they will spend the money in certain kinds of programs pre-approved by state school officials, such as training for teachers and principals, and reducing class size. This summer, the city’s Department of Education skipped the mandated date for hearings, and is now saying that the hearings will be held when the new school year begins in September.

“Contracts cannot be approved without proper public hearings being held,” Jonathan Burman, a spokesman for the state education department wrote in an email on Thursday. “Contracts need to be reviewed and approved before any contract funds are released by the State Education Dept.”

Previously, the state had said that the city could use funds continuing last year’s contract, and only money for “new purposes” would require the commissioner’s approval. The state’s grim financial picture has meant that the city will not receive an increase over the amount it was given last year.

A spokeswomen for the city DOE, Ann Forte, said that even though the state has yet to approve the contract, the city Office of Management and Budget has fronted the money to its schools.

“We pass it on to schools and then the state gives it to us when our plan is approved,” Forte said.

She added that this had been done in the previous two years as well when the state had not approved the city’s contract by the time school began. Last year the state ordered the city to hold two rounds of hearings and did not approve the contract until January.

In a statement sent out to reporters today, city Comptroller Bill Thompson chastised the DOE for not releasing its proposed contract and opening it up for public review. The mayoral hopeful accused the city of excluding parents from the process, a criticism his campaign frequently levies against the Bloomberg administration.

“This is done for a compelling reason,” Thompson said in the statement. “Timely public review and transparency is essential to ensure that the funds are used to address six specifically identified strategic areas using the best possible practices.”

City and state officials said they did not know when the proposed contract would be released publicly. The hearings, which have become something of a summer ritual, are held so that parents and groups can officially comment on the plan and discern how the money is being spent.

Hearings, according to state law, must be held in all five boroughs. In addition, district superintendents must submit the proposal to each of the city’s 32 community education councils, which then hold public meetings to review and comment on the contract.

Forte said that uncertainty about how much stimulus money the state would receive had caused the delay. Holding hearings during the school year rather than the summer would allow more parents to participate, she said.