AZ school voucher expansion draws fire over fraud allegations, cost concerns

Arizona school voucher program faces fraud scrutiny

Costing about $1 billion for 92,000 students since its 2022 expansion, Arizona's universal voucher program (ESA) faces intense fraud scrutiny and a political fight between key state officials. FOX 10's Steve Nielsen reports.

PHOENIX - Arizona's universal school voucher program is under renewed scrutiny following allegations of massive fraud within the system, fueling a political battle over its cost and oversight.

What we know:

The program, known as Empowerment Scholarship Accounts, or ESAs, began in 2012 to assist students with disabilities. However, in 2022, Arizona became the first state in the nation to expand the program to allow all children access to state funds for private school tuition, homeschooling, or other educational needs.

Supporters argue the ESA program provides parents a choice in their child's education. Critics contend the program is draining public school resources and that fraud risks bankrupting the state. The overall cost of the program, currently utilized by approximately 92,000 Arizona children, is about $1 billion.

The debate centers on both the system’s utility and its accountability.

Local perspective:

For families like the Cechs, the program provides necessary flexibility.

Debbie Cech's son, Hunter, was diagnosed with acute flaccid myelitis after a month of kindergarten in California. The condition left him paralyzed from the neck down, limited to a wheelchair, and with limited mobility in his left hand.

"He got diagnosed with acute flaccid myelitis. Our lives changed overnight quite drastically," Debbie Cech said.

After moving to Phoenix for specialized care, the family struggled to find an adaptable learning environment in public schools. "Art was not adaptable, P.E. was not adaptable," she said.

The ESA program gave them the choice to enroll Hunter in Novatio, an online school that claims to adapt to every child's needs. The $7,000 annual tuition is covered by the ESA funds.

"They are getting a free private education in a way that fits their kiddo because they live in Arizona because of ESA and the state saying we value you being able to choose your school," said Karissa Ham of Novatio.

Dig deeper:

During a legislative audit this summer, administrators revealed they auto-approve every purchase request under $2,000 to keep up with parent requests.

State Superintendent of Public Instruction Tom Horne, a Republican and major proponent of the vouchers, is in charge of the Department of Education.

"We send the money out, but we make it clear to the parents that it's not an approval. An approval doesn't happen till after we audit. We audit later," Horne said.

Attorney General Kris Mayes, a Democrat, has called the situation a scandal, alleging parents have used ESA money for items like diamond rings, lingerie, and flat-screen televisions.

"It is so much easier to stop the misspending of these funds on the front end than claw it back once it's been spent," Mayes said, noting she plans to sue the Department of Education, and investigations against alleged fraudsters are underway.

Horne defended the program's oversight, stating they have recovered more than $600,000. He said Mayes "talks about the misspending. She doesn't talk about how much we got back, which is badly misleading the public."

When asked how much money has not been recovered, Horne replied, "I don't know of any ... If a parent is asked to give the money back, and they don't, they'll be terminated from the program."

He acknowledged the loss is a cost to taxpayers but characterized the amounts as "small."

The company responsible for distributing the ESA money, ClassWallet, is reportedly developing an artificial intelligence program to detect fraud beforehand, though no timeline was provided.

In the meantime, the auto-approvals continue.

Big picture view:

Ham argues that some purchases, like an expensive voice-activated chessboard Hunter hopes to get, serve a legitimate educational purpose for children with specific needs.

"He deserves that, and I think that's important for people to realize. It isn't black and white," Ham said.

While Horne predicts the program will be "bigger" in five years, Mayes warned, "If we keep seeing stuff like this happen this program may not exist in five years."