ESA families were right all along

After heaping contempt and suspicion on the families participating in Arizona’s Empowerment Scholarship Account (ESA) program for years, partisan activists should acknowledge that their diagnoses of the program’s ailments have been wrong, and their solutions poorly prescribed. 

That’s because an extraordinary new report from Arizona’s Office of the Auditor General confirms what ESA parents have been saying all along: that their families need clarity and consistency from program administrators, not condemnation and bureaucratic bloat. 

For example, in perhaps the most striking statistic in the report, state auditors found that ESA parents have received chronically unreliable information from the Arizona Department of Education (ADE): “Program staff provided poor-quality information in 24% of calls” with ESA parents during 2019, such as an episode when “staff erroneously advised a customer that a specific tutoring service was not an allowable expense.” In other words, nearly one out of every four ESA parents who sought help understanding program rules came away still unclear – if not actively misinformed – about what constituted an eligible purchase, for example.  

This revelation puts a very different spin on the reported misspending within the ESA program, but more importantly, it also vindicates the parents who for years have been pleading with legislators for relief from fickle approvals offered and then rescinded by department officials. 

And regarding program misspending more generally, ESA opponents have obsessed over prior findings from the Auditor General in 2018 of “[more] than 900 successful [ESA] transactions at unapproved merchants totaling more than $700,000.” (In context, this meant that 99% of program funds were spent at approved merchants.)

But now, according to the same auditors, “Concerns with debit card administration have largely been addressed … Our review of all 168,020 approved transactions identified in the Department’s Program account transaction data between October 31, 2018 and October 30, 2019 found only 1 successful transaction at an unapproved merchant totaling $30” (emphasis added). That means less than 0.001% of ESA purchases went to ineligible vendors.   

It also means that those who’ve called for maxing out bureaucratic spending in order to more stringently enforce program rules were wildly off base: This dramatic drop in ESA purchases at unapproved vendors from $700,000 to $30 occurred without additional administrative funding.    

While the auditors did find a need for more ESA program staff, their suggested level (21 employees) is less than what the Legislature already greenlit earlier this spring, when it increased total ESA administrative funding to support additional customer service and case workers, bringing the total staff count to 26 employees. Most tellingly of all, the Legislature accomplished this at roughly half the cost of the solution pushed by media and department officials, whose recommendations were to simply spend every dollar allowed under the program’s arbitrary administrative funding formula. That formula would have diverted roughly $4 million next year to program administration. Instead, the Legislature abolished the formula and was able to meet (and even exceed) the Auditor General’s recommendations with just $2 million.

But how did opponents of the program characterize this accomplishment? Well, among the litany of grievances from Save Our Schools Arizona about SB 1224 – the bill that enacted the funding reforms – the group complained that “the  bill was also amended to  strip oversight funding from the program.” If exceeding auditors’ recommendations and avoiding lighting $2 million on fire needlessly is stripping oversight, well, then I guess legislators – like all the parents misinformed by the Department of Education – are guilty. 

The Auditor General’s report contains a trove of other findings – like 1) the department’s failure to properly redact ESA families’ information in one out of every four public records requests, and 2) department protocols that resulted in “inefficient use of program’s staff time, and unnecessary burdens for parents/guardians,” such as withholding ESA families’ payments even when no rational reason existed. 

But perhaps most importantly, this new audit should prompt opponents to dial down the anti-ESA hysterics and recognize that while department officials have meant well, many of their policies and practices have unnecessarily compounded the challenges faced by parents trying to do right by their kids. 

And after years of shouting to the wind – or at least to a number of callous pundits and activists – about inconsistent guidance from the department that has now been documented by the Auditor General, perhaps ESA parents could be forgiven for wanting to say, “I told you so.”

Matt Beienburg is the Director of Education Policy at the Goldwater Institute.