Arizona ESA Needs Improvement | The Heritage Foundation

Arizona’s pioneering Empowerment Scholarship Account policy is at a crossroads.

Although the ESA policy is very popular with families who benefit from it, a new survey of Arizona ESA families by the Heritage Foundation finds that they are also very dissatisfied with the way it is currently administered .

Fortunately, the Arizona Department of Education is listening to ESA parents and taking important steps to make the program more user-friendly. With a few additional policy changes, such as the return of ESA debit cards, they should be able to restore the ESA’s historically high levels of parental satisfaction.

In the Heritage survey, more than 99 percent of families using ESA said they supported the policy. With an ESA, participating Arizona families receive 90 percent of the state funds that otherwise would have been spent on their child in a public school through a restricted savings account.

Parents can then use these funds to pay for private school tuition, online learning, special education services and therapies, private tutors, textbooks, curriculum, and a host of other benefits. other education-related products and services. Unused funds can be rolled over from year to year. ESA currently has approximately 84,000 students.

Unfortunately, there has been a sharp decline in satisfaction since 2023. The most recent surveys of Arizona ESA family satisfaction by the Arizona Department of Education were conducted under Kathy’s administration Hoffman during the 2021-2022 school year (T4) and the 2022-2022 school year. 2023 (Q1), which found that 70 percent and 67 percent of respondents, respectively, were satisfied with the department’s management of the ESA program.

>>> Educational Choice at the Crossroads: A Survey of Arizona Families Using Empowerment Scholarship Accounts

By contrast, in the Heritage survey conducted this fall, two-thirds of respondents expressed dissatisfaction with the department’s administration of the ESA program, including 22 percent who were “very dissatisfied.”

ESA parents are frustrated with how the department runs the program. The vast majority of ESA parents report having encountered difficulties using their ESA over the past year. When given a list of common complaints, only 2% responded “none of the above.” The most common complaints included long wait times for expense reimbursements (86%) and approvals (77%), as well as difficulty reaching a department employee (65%) and getting answers to their questions. questions on issues related to the LSE (63%).

Many of these problems were caused or exacerbated by the Attorney General’s attempt to undermine the ESA program. Earlier this year, Arizona Attorney General Kris Mayes requested that the department adopt a new requirement that ESA families provide a curriculum as well as purchase or reimbursement requests for additional materials . Each of these purchases must now be justified by being required or recommended by a written program – including basic items such as books, pens and paper.

Mayes asked the department to adopt this new requirement based on its strained interpretation of the ESA statute, even though it has never been interpreted that way by any state attorney general or Department of Justice administration. ‘Education, Republican or Democratic, since the program’s inception in 2011. , as the Goldwater Institute observed in its ongoing lawsuit against the state seeking to overturn the new regulations, Arizona’s ESA statute “expressly authorizes the purchase of (additional) materials with ESA funds” and the “The State Board of Education has also approved rules for the program explicitly authorizing the purchase of these materials without additional documentation.”

Parents complain about spending hours creating curriculum for common-sense subjects that were previously automatically approved. “We feel like we’re being punished for accessing the program,” one ESA parent said in the Heritage survey. “We need a program for a pencil!” It’s ridiculous.

The requirement for additional materials for study programs has not only led to an increase in refusals due to insufficient documentation, but it has also exacerbated wait times – which have reached weeks or even months – for approval and reimbursement of expenses, as ministry officials must manually review each program. Eliminating this requirement would make the ESA program much more effective.

However, curriculum requirements are not entirely responsible for delays. Even before the AG’s interference, the Arizona Department of Education, under the leadership of Superintendent Horne, made a series of changes to the way it implements the ESA program, which affected the effectiveness and user-friendliness of the program.

In response to allegations from school choice opponents that the ESA program was “irresponsible” and “widely open to fraud and abuse,” Horne directed department staff to manually review each ESA purchase before releasing it. ‘approve. “(Our) policy of reviewing all requests is very different from that of my predecessor, who authorized approval of a number of inappropriate expenditures,” said Horne, who added that “under my leadership, we review every expense request, regardless of the amount.” Rising.”

As part of Horne’s push for greater accountability, the department stopped issuing new ESA debit cards in early 2023 in favor of ClassWallet’s online payment system. With an ESA debit card, families can immediately make purchases from approved suppliers. However, because approved vendors sell both eligible and ineligible items, ESA families should still submit their receipts to the department for approval before their next quarterly disbursement of funds. Sometimes this meant debit cards were used for ineligible items. When this happened, the ESA holder would have to repay the account or risk account closure and prosecution.

The reality is that Arizona’s ESA program was already highly accountable. A 2018 report from the Arizona Auditor General found “more than 900 successful (ESA) transactions at unapproved merchants, totaling more than $700,000.” This may seem like a lot, but it represented less than 1% of the ESA’s total spending over this period.

A more recent audit concluded that “issues related to debit card administration have been largely resolved.” Indeed, the auditor identified “a single successful transaction at an unapproved merchant totaling $30,” meaning the rate of irregular payments to unapproved merchants was reduced to just 0.001%.

>>> Scandal: Arizona families educate their children

Compared to other government programs, Arizona’s ESA program is a model of accountability. According to a 2021 analysis by the Federal Office of Management and Budget, the government-wide rate of irregular payments was 7.2%.

Federal school lunch programs are among the worst offenders. A 2019 report from the U.S. Government Accountability Office found that “school lunch programs reported high rates of inappropriate payment errors, up to nearly 16% for the National School Lunch Program and nearly by 23% for the school breakfast program over the last 4 years. .”

Fortunately, the ministry has listened to the concerns of ESA parents. Recently, Superintendent Horne announced that his department would immediately approve all requests under $2,000 to eliminate the backlog of reimbursements and expenditure approvals, with risk-based verification ultimately to ensure accountability. This will go a long way to addressing parents’ biggest frustrations.

The next step the Department should take is to reinstate ESA debit cards, a policy change supported by 88% of ESA families who currently do not have access to an ESA debit card. With restricted-use ESA debit cards, families can immediately purchase educational goods and services from eligible providers, even if they are not on the ClassWallet marketplace. Combined with risk-based auditing, debit cards will give ESA families the freedom and flexibility to personalize their children’s education while maintaining a high level of accountability.

Parents have spoken: Arizona’s ESA program needs improvement. But the challenges are not insurmountable. Eliminating the additional hardware requirement and reinstating ESA debit cards would significantly address the primary concerns of ESA families and likely restore the program’s historically high level of user satisfaction.