Key Points:
- ESA misspending referrals surge, totaling 20 times last year
- Attorney general considers litigation amid disputes over auditing practices
- Department of Education claims lack of prosecutorial support
The Arizona Department of Education referred more cases of misspending to the Attorney General’s Office of Collections this year, with the amount of funds to be clawed back on track to be 20 times higher than the year prior.
In 2024, the department sent about 11 cases of misspending Empowerment Scholarship Account funds, totalling $11,731, while in 2025, the total to be sent to collections spans 39 cases and rounds out to about $260,000.
Misspending reported and referred this year is not all new; some cases date back as far as July 2023.
But the sharp spike still comes at a contentious time, as Attorney General Kris Mayes considers suing Superintendent of Public Instruction Tom Horne over the department’s auditing practices, and as Horne alleges a lack of prosecutorial support from Mayes.
At a press conference on Dec. 2, Mayes said she was currently investigating Horne and the department for alleged misuse of public funds, taking aim at the use of risk-based auditing, a system in which any ESA purchase under $2,000 is initially approved without question and reviewed later on.
Mayes’ public monies investigation follows reporting by 12News, which found the department initially allowed the purchase of items such as diamond rings, lingerie and TVs with ESA dollars.
ESA funds are generally provided to parents of school children and are intended to cover various education expenses, including private school tuition, curricula, educational supplies, tutoring, and more.
“No public official is allowed to permit taxpayer dollars to be misspent,” Mayes said. “Whether you’re the superintendent of public instruction or you’re the people who actually use the money in that way, you’ve got to be concerned about enforcement of the law.”
Horne, meanwhile, maintains risk-based auditing is explicitly allowed, and even required, under state law.
“The very thing that the attorney general is attacking – risk based auditing – is provided for in legislation that passed the House, passed the Senate and was signed by the governor,” Horne said. “Now she’s saying it’s a waste of money to use that very system.”
Horne stressed, too, that the department is actively working to refer cases of criminal misspending and recover any improper payment on the backend, though the total to be clawed back keeps growing.
Statute and State Board of Education rules provide a process for addressing and recovering misused program funds.
As it stands now, the department is not auditing purchase requests under $2,000 on the front end but instead audits accounts afterward.
Upon finding an improper purchase, the department first suspends the account in question and then sends out a notice to the accountholder, with a 15-day deadline to respond and take corrective action.
An accountholder can either provide documentation showing the expense was allowable, prove the purchase was a result of identity theft or fraud, or agree to repay the department. The accountholder can also pursue an appeals process with an administrative law judge.
Under state board rules, the department must withhold any additional funds until the accountholder has either paid the debt back in full or started a payment plan.
If an accountholder refuses or fails to respond, or declines to repay in any capacity, the department can send the case to the State Board of Education, which can refer it to the Attorney General’s Office for collection or criminal prosecution.
Once it reaches the attorney general, the office opens a file, sends a demand letter for the outstanding balance, and continues to follow up by phone or other means.
The office can then take further legal action and file a lawsuit to recover the amounts owed.
In August, the department, with State Board approval, referred 20 cases, totalling $118,638, and at the upcoming meeting on Dec. 8, another 19 cases, worth $141,235, are likely to head to the attorney general too, bringing the total for 2025 to just about $260,000.
Not including the upcoming referrals, the department has sent a total of $232,097 to collections since the current department administration sent its first referrals in March 2023.
In that same time, the Office of Collections reported getting about $9,630.87 back.
Richie Taylor, spokesperson for the Attorney General, made note of higher referral amounts, with 2023 cases typically coming in under $1,000, while in 2025, most case referrals are closer to $5,000 and a select few eclipse $10,000.
Beyond collections, the Department of Education can also refer misspending cases for criminal charges, too, with the attorney general left to assess the viability of any prosecution.
But Horne claims the attorney general has failed to pursue cases sent by the department for prosecution.
“She refused so many cases we stopped sending them to her,” Horne said.
According to Horne, the department has sent three criminal cases totalling $158,000 in misspent funds – including a $14,000 purchase of vaginal probiotics and other lifestyle items, a $64,000 purchase of crystals and more than $80,000 for technology.
Mayes’ office has declined to pursue the referrals, with letters sent to the department citing a lack of evidence to support a criminal investigation.
With little luck at the Attorney General’s Office, the department is now sending cases to the Maricopa County Attorney’s Office. According to the department, the county attorney is now sorting through cases totalling about $215,000.
A spokesperson for the Maricopa County Attorney’s Office confirmed the department had sent over select cases for review, but said the county had not yet filed any criminal charges.
As for the attorney general, Mayes said she is keeping litigation against the department on the table.
“Tom Horne has allowed purchases below $2,000 to go unvetted on the front end, which clearly is what led to some parents using that money on diamond rings, lingerie and flat screen TVs when it should’ve been used for educational purposes and when it’s taxpayer dollars being spent,” Mayes said. “We are looking at potential public money violations by both Tom Horne and the parents who use the money in that way.”



















































