Arizona AG Probes School Voucher Program for Unlawful Payments

The Arizona Attorney General’s Office is investigating the state’s school voucher program for alleged illegal payments made without necessary documentation. The Empowerment Scholarship Account (ESA) program provides parents with a debit card to pay for various educational costs or offers reimbursements. These costs can cover private school tuition, homeschooling supplies, and even college savings.

Initially launched in 2012, the program expanded in 2022, transitioning from supporting about 12,000 students with specific criteria to a universal system available to all one million K-12 students in the state. This expansion led to a surge in enrollment, reaching approximately 74,000 students, greatly exceeding the estimated 68,000 and inflating the program’s cost to around $723.5 million, nearly $100 million over budget.

Republican legislators hailed the expansion as a triumph for school choice, while Democrats criticized it for subsidizing private school tuition for wealthy families and diverting tax dollars from public schools to religious ones. Earlier this year, Governor Katie Hobbs’ office noted that approximately 67% of students in the program had never attended public school.

The ESA program is overseen by Republican Tom Horne, an advocate for private school vouchers, while the Attorney General’s office, currently headed by Democrat Kris Mayes, initiated the investigation. On July 1, Assistant Attorney General Kathryn Boughton informed John Ward, director of the ESA program, through a letter that the 2023-2024 ESA Parent Handbook suggested possible illegal reimbursements for student expenses.

The issue centers on the Arizona Department of Education (ADE) approving supplementary education materials without verifying their connection to a curriculum. State law defines supplementary materials as resources enhancing or supporting the curriculum. However, the Parent Handbook indicates many supplementary materials do not need to be tied to a curriculum, leading to concerns about potential misuse of funds.

Boughton emphasized that approving payments for materials unrelated to a curriculum violates the program’s intent and could enable fraudulent activities, such as using ESA funds for personal resale items. The ESA program has faced criticism for reimbursing extravagant items, including home pianos and luxury vehicle driving lessons. In response, Ward agreed to halt approvals for supplemental materials lacking curriculum documentation.

In a July 3 letter to ESA parents, Ward acknowledged the obligation to comply with the Solicitor General’s directives and promised to update the ESA Handbook accordingly. He also pointed out that the lenient practice began under the previous administration led by Kathy Hoffman, the Democrat defeated by Horne in 2022.

The Attorney General’s Office posed several questions regarding curriculum documentation, seeking details on expenditures for supplementary materials from 2019 to 2024 and the oversight of these purchases. Boughton requested Ward answer the 17 questions within 30 days, though Ward indicated a 60-day period would be needed due to the extensive data required and the necessity to collaborate with the financial vendor, ClassWallet.

The Arizona Department of Education has refrained from commenting on the situation publicly. However, Doug Nick, a department spokesman, provided a letter confirming the immediate halt in approving supplemental materials without necessary documentation. Ward reassured parents that they could still obtain such materials, provided they align with recommended curricula and promised additional guidance on compliance.

Ward emphasized the importance of adhering to the law despite the challenges the changes might pose, underscoring the department’s commitment to transparency and legal compliance as directed by the Attorney General’s Office.