Arizona’s pioneering empowerment scholarship account policy is at a crossroads.
The ESA policy is extremely popular among the families who benefit from it, but a new Heritage Foundation survey of Arizona ESA families found that they are also very dissatisfied with the way the ESA is currently run. It turns out that
Fortunately, the Arizona Department of Education is listening to ESA parents and taking important steps to make the program more user-friendly. A few additional policy changes, such as reinstating the ESA debit card, should help restore ESA’s historically high levels of parental satisfaction.
In the Heritage survey, more than 99% of families using ESAs said they supported the policy. With the ESA, participating families in Arizona receive 90 percent of state funds that would have been spent on children attending public schools through restricted-use savings accounts.
Parents can use those funds to pay for private school tuition, online learning, special education services and therapy, tutoring, textbooks, curriculum, and other education-related goods and services. Unused funds can be carried over to the next year. There are currently approximately 84,000 ESA students.
Unfortunately, from 2023 onwards, satisfaction levels drop sharply. The most recent surveys of Arizona ESA family satisfaction by the Arizona Department of Education were conducted during the 2021-2022 school year (fourth quarter) and 2022-2022 under the Kathy Hoffman administration. For the 2023 academic year (first quarter), we found that 70 and 67 percent of respondents were satisfied with the department’s ESA management. program.
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In contrast, two-thirds of respondents to a Heritage survey conducted this fall expressed dissatisfaction with the department’s management of the ESA program, including 22 percent who said they were “very dissatisfied.”
ESA parents are dissatisfied with the way the ESA program is run. The majority of ESA parents report facing challenges using their ESA in the past year. When given a list of common complaints, only 2% answered “none of the above.” The most common complaints were long wait times for expense reimbursements (86%) and approvals (77%), difficulty in contacting department employees (65%), and difficulty in answering questions regarding ESA issues. It was about the difficulty of receiving (63%).
Many of these problems were caused or exacerbated by the Attorney General’s attempts to undermine the ESA program. Earlier this year, Arizona Attorney General Chris Mays asked the department to adopt new requirements for ESA families to provide curriculum and purchase or receive reimbursement for supplemental materials. Such purchases must be justified by being required or recommended by the written curriculum, including basic items such as books, pens, and paper.
Since the program’s inception in 2011, Mays has argued that ESA laws have been strictly enforced, even though they have never been interpreted that way by previous state attorneys general or Department of Education officials, Republican or Democratic. based on this interpretation, requested the Department to adopt this new requirement. As the Goldwater Institute stated in its pending lawsuit against the state seeking to overturn the new regulations, Arizona’s ESA law “explicitly authorizes the purchase of (supplemental) materials. “ESA Funds” and “The State Board of Education has similarly approved program regulations that explicitly permit the purchase of these materials without additional documentation.”
Parents complain that they are spending hours creating curriculum for common sense items that were previously automatically approved. “I feel like I’m being punished for having access to the program,” one ESA parent told the Heritage study. “We need a pencil curriculum!” That’s ridiculous. ”
The curriculum requirements for supplementary materials not only led to an increase in rejections due to insufficient documentation, but also required department personnel to manually review each curriculum, further exacerbating wait times for expense approval and reimbursement. The wait can be weeks or even months. Eliminating this requirement would allow the ESA program to run more efficiently.
However, curriculum requirements are not the complete cause of delays. Even before the AG’s intervention, the Arizona Department of Education, led by Superintendent Horn, made a series of changes to the way the ESA program was implemented that affected the efficiency and user-friendliness of the program.
In response to school choice opponents’ claims that the ESA program is “unaccountable” and has “great potential for fraud and abuse,” Horne urged faculty to manually review all ESA purchases before approving them. instructed the staff. “Your policy of reviewing all applications is very different from that of your predecessor, who allowed many inappropriate expenditures to be approved,” Horn said, adding, “Under my watch, we will review all expense requests regardless of dollar amount,” it added. “
As part of Horne’s efforts to increase accountability, the department will stop issuing new ESA debit cards in early 2023 and adopt the ClassWallet online payment system. With an ESA debit card, your family can shop instantly from approved vendors. However, because approved vendors sell both eligible and ineligible items, ESA families must submit receipts to the department for approval before the next quarterly disbursement of funds. In some cases, debit cards were used for ineligible items. ESA holders would then have to pay off their accounts or risk closure and prosecution.
In reality, Arizona’s ESA program already had high responsibilities. A 2018 report by the Arizona State Auditor General found “more than 900 successful Unauthorized Vendor (ESA) transactions totaling more than $700,000.” While that may sound like a lot, this is less than 1% of total ESA spending over the same period.
A recent audit concluded that “concerns regarding debit card management have been largely resolved.” In fact, auditors identified “only one successful transaction totaling $30 with an unauthorized merchant.” This means that the rate of improper payments to unauthorized merchants has decreased to just 0.001 percent.
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Compared to other government programs, Arizona’s ESA program is a model of accountability. The government-wide improper payment rate was 7.2%, according to a 2021 analysis by the Federal Office of Management and Budget.
The federal school lunch program is one of the worst offenders. According to a 2019 report from the U.S. Government Accountability Office, “School lunch programs have had high rates of improper payment errors over the past four years, rising to about 16 percent for the National School Lunch Program and about 23 percent for the School Breakfast Program. It is reported that “has been reached.” ”
Fortunately, the department has listened to the concerns of ESA parents. Superintendent Horne recently announced that all requests under $2,000 will be approved immediately to eliminate the backlog of expense reimbursements and approvals, with a risk-based audit on the back end to ensure accountability. This will go a long way in addressing parents’ main complaints.
The next step for the department to take is to reinstate the ESA debit card. This policy change is supported by 88 percent of ESA families who currently do not have access to an ESA debit card. A limited-use ESA debit card allows families to instantly purchase educational products and services from eligible vendors, even if they are not on the ClassWallet marketplace. Combining debit cards with risk-based auditing gives ESA families the freedom and flexibility to customize their child’s education while maintaining a high level of accountability.
“Arizona’s ESA program needs improvement,” the parents said. However, the challenges are not insurmountable. Removing the curriculum requirement for supplemental materials and reinstating the ESA debit card would significantly address the primary concerns of ESA families and potentially restore the program’s historically high levels of user satisfaction.
