As Arizona’s school choice program continues to grow, the state is clawing back some taxpayer money for accounts misusing the program.
The Empowerment Scholarship Accounts program, or ESA, originally operated for students with disabilities. But in 2022, then-Governor Doug Ducey signed the universal expansion into law to include all Arizona students.
Before the program expanded universally, roughly 11,000 students used ESAs. Now, according to the Arizona Department of Education’s (ADE) website, it grew to more than 90,000 students as of Monday.
Since then, there’s been back and forth arguments about using taxpayer dollars for private education, misuse of funds, fraud and - what some would say - questionable purchases after ABC15 investigators analyzed about $300 million in purchases. However, others who support universal ESA have argued that the amount of fraud is minor compared to the amount of students using this program.
If families misuse the ESA program, there is a process in which the Arizona Department of Education (ADE) tries to get money back.
Accounts can get suspended and then terminated if ESA holders do not respond and rectify purchases after multiple contact attempts.
“I have real concerns when people are blatantly using it when the auto-processing system came out. People assumed it was automatically approved. I can't wait for the department to go back and ask for those funds,” said Lynn Fox Embrey, an ESA parent who used the program since 2017.
In December, Superintendent Tom Horne announced the department was auto processing purchases under $2,000 since there was a backlog for families trying to get reimbursements. Education staff would then go back and audit.
“We have the current fiscal years and two more fiscal years to audit any purchase that was made in the ESA program,” said John Ward, the ESA director.
An ADE spokesperson said the department pulls requests under $2,000 every Monday and "any accounts that look anomalous are monitored every day.” ADE said 250 audits are assigned a day to each 12 audit specialists with the program.
The department is clawing back money from accounts.
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Data from 2023 from ADE showed that 49 accounts, amounting to more than $182,000 were sent to collections with the Arizona Attorney General’s Office.
This includes the request on Monday at the Arizona State Board of Education meeting, where ADE referred 20 accounts to collections, amounting $118,000.
“These would be for families who made improper purchases,” Ward said.
A spokesperson for the Arizona Attorney General’s Office says they have received referrals from ADE this year related to potential fraud.
The Attorney General’s Office said two referrals were closed due to “insufficient evidence,” but they have seven ongoing investigations at this time.
Since July 2023, 110 accounts repaid the state, amounting to $170,000.
As of this month, about $73,000 are outstanding after account holders have been requested to repay.
"What I tell parents all the time, if I buy something, I'm willing to pay for it out of my own pocket. I'm just not buying it because I have ESA dollars to buy it. Be prepared to pay it back,” Lynn said.
ADE said there are more than 400 accounts currently suspended, however, details as to why were not disclosed as a spokesperson cited they’re still in due process.
