Millions remain unspent in school choice program

Parents with empowerment scholarship accounts have amassed roughly $2.5 million of unspent public money over three years, causing public school officials to question the program’s accountability.

The unspent funds represent 21 percent of the $11.8 million disbursed since fiscal-year 2012.  Sixty-eight parents have held onto amounts ranging from $10,000 to $61,047.

Arizona’s empowerment scholarship account program gives parents money they can use to send their children to private schools or to teach them at home.   The program pays a parent 90 percent of the funding that would have gone to his student’s public school. The money can be spent on a limited number of items such as private school tuition, tutoring, home school curriculum, and college tuition.

Parents are audited and cannot spend the money on whatever they want or hang onto to it indefinitely.  But unspent dollars means public money earmarked for education is not being used.

Aiden Fleming, who administers the program for the Arizona Department of Education, said the department is aware of the growing accounts, but has no authority over how much of the quarterly disbursements must be spent.

“For good administration you don’t want to see $60,000 or $100,000 accumulate on the (account) that could be spent,” Fleming said. “Every dollar that is not being spent is not being spent on the child.”

The program began in 2011 with just disabled students and has grown to allow an array of students such as ones from failing schools and children of military members.

There are 692 students in the program, almost 80 percent of whom have special needs.

Jennifer Liewer, a department spokeswoman, said the more severe the disability, the more money the student gets.

Tim Ogle, executive director of the Arizona School Boards Association, said the large amount of money being saved makes the organization’s case against the program.

“Now we have these individuals whose education is not being accounted for by the state and also you’ve got over $2 million of public money unaccounted for, so both educational lack of oversight and financial lack of oversight, and that’s why the empowerment account idea is so flawed philosophically,” Ogle said.

Opponents of the program say it drains money from public schools, potentially damaging them as the money goes into private schools.   Public school officials worry that the empowerment program has the potential to grow to hundreds of thousands of students, although enrollment is capped at roughly 5,400 students until 2019.

A spreadsheet the department prepared shows 16 students over the course of the program’s history have banked $20,000 or more. Fifty two more students have hung onto amounts between $10,000 and $19,999. The most tight-fisted parent has hung onto $61,047 while spending only $825. The next closest has held onto $31,000 of unspent funds.

Any monies left over after the student graduates from an Arizona college or four years after high-school graduation if the student doesn’t attend college goes back to the state.   If they spend money on something they are not allowed to spend it on, they would have to pay it back.

Fleming said a provision in SB1237, which is scheduled for a floor vote Wednesday in the House, would require parents to spend a “portion” of each quarterly disbursement without delay.

He said the department would then write a rule on what amount the portion would be.