Horne Claps Back at Hobbs Over ESA ‘Risk-Based Auditing’ Controversy

By Matthew Holloway |

Governor Katie Hobbs recently criticized Superintendent of Public Instruction Tom Horne over the Arizona Department of Education’s (ADE) new risk-based auditing method for Empowerment Scholarship Account (ESA) reimbursements. Horne swiftly countered her claims, suggesting that she should familiarize herself with the legislation she endorses.

In his rebuttal, Horne highlighted that the auditing approach was mandated by a bill signed into law by Hobbs herself. He pointed out that the change was a direct result of her prior decision to allow private school tuition reimbursements, which altered the previous handling process with the third-party provider, Class Wallet.

Currently, the ESA program is experiencing a significant backlog with over 85,000 reimbursement requests pending. In light of this, the ADE plans to automatically approve payments of up to $2,000, subsequently auditing them.

At a recent state board meeting, Horne announced that all ESA payments below this threshold would be processed automatically and undergo risk-based audits. This change, he claims, is necessary to address the ever-growing backlog effectively.

In her initial communication to Horne, Hobbs raised concerns regarding recent fraud allegations associated with the ESA program. She labeled the new auditing method as a “complete dereliction” of ADE’s duty to manage public funds responsibly.

Horne’s response emphasized that the risk-based auditing was not only a legal requirement but also a measure to resolve the inefficiencies resulting from Hobbs’s prior legislative actions. He defended the program’s integrity, describing it as one of the most accountable within the state, and noted the extensive oversight involving multiple governmental agencies.

Further fueling the debate, a fact-check organization criticized Hobbs for her stance against the ESA program, asserting that it serves as an exemplary model of accountability and transparency. The coalition emphasized that the families utilizing ESAs merely seek the best educational opportunities for their children.

Matthew Holloway is a reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.