When Art and Angie arrested Sarah for impersonating Beth, it seemed to become common knowledge, as charges were going to be file. This would be the episode when Daniel showed up right as Sarah was about to tell Art everything. Presumably at this point, Art doesn't want anyone to know he's still associating with…

IIRC:
- Art was suspended last season when he kept looking into the Sarah/Beth situation.
- In season 1, Art finds the train station security video of Sarah stealing Beth's purse and puts 2 and 2 together.