Arizona investigation into fraud in school choice dismissed as an inside job

The recent legal actions against five individuals unveiled their involvement in a criminal conspiracy to deceive Arizona’s education savings account program, shedding light on one of the nation’s most extensive and least restricted initiatives providing state funds for private or homeschool education.

Highlighting the lack of fraud prevention measures, Arizona’s Democratic Attorney General Kris Mayes pointed out that three former education agency employees were among those indicted, suggesting how easy it was for them to manipulate the system, allegedly embezzling over $600,000 by forging birth certificates and special education evaluations.

Despite the revelations, supporters of education savings accounts (ESAs) in Arizona and other states remain unfazed, dismissing the incident as an “inside job” that reflects more on governmental corruption than the many families seeking better educational alternatives for their children. They argue that the uncovering of the scheme demonstrates that existing safeguards are effective.

Acknowledging the prevalence of fraud, Lisa Snell, Senior Fellow at Stand Together Trust, drew parallels to similar instances in government programs like the school lunch program and Medicaid, highlighting the unfortunate reality of individuals misusing taxpayer money across various sectors.

In contrast to several states, where private schools accepting ESA students need accreditation and staff background checks, Arizona’s program lacks such prerequisites, leaving room for abuse. Additionally, the surge in enrollment to nearly 76,000 students since 2022 has strained the program’s limited staff capacity of just over 30 employees.

The Arizona Attorney General’s office revealed a 40-count indictment surrounding suspects who took advantage of their positions as ESA program specialists by fabricating student admissions and expenses. The subsequent investigations uncovered financial irregularities, leading to a series of legal actions against those involved.

Amidst national debates over the ESA program, varying opinions have emerged regarding its accountability and transparency. While some advocate for tighter oversight to prevent future abuses, others remain skeptical about the possibility of implementing reforms that satisfy all parties, leading to ongoing discussions within the education sector.

Addressing the need for enhanced accountability, Arizona’s Governor Katie Hobbs proposed stringent measures to ensure proper usage of ESA funds, including external audit oversight of private schools. However, diverging viewpoints persist among education stakeholders regarding the efficacy of existing policies and potential reforms.

Despite recent scandals, proponents of ESAs argue that the program’s flexibility benefits many children in Arizona, emphasizing the importance of maintaining accountability measures. However, proposed reforms have faced opposition from certain political factions, complicating efforts to address program shortcomings effectively.