State auditors have determined Arizona’s education savings account (ESA) program is operating at a high level, but they say it should incorporate some recommended improvements.
The Arizona Empowerment Scholarship Account, the country’s first ESA, was implemented in 2011 and is run by the Arizona Department of Education (ADE). The program allows parents to use a portion of the money allotted to their child in a public school on other educational resources, such as private school tuition, tutoring, and textbooks.
The state Auditor General’s Office (AGO) audited the ESA program in July for the first time. Results of the audit indicate ADE has run Arizona’s ESA program well. Each Arizona governmental office is audited once every 10 years.
Enrollment in Arizona’s ESA program has grown steadily since its inception; it now totals 2,503 students.
‘A Pretty Outstanding Job’
ADE Public Information Officer Charles Task says he and his department are very pleased with the audit results.
“I think it’s clear the staff in [the ESA program] have done a pretty outstanding job keeping up with the changes in the program as best it can and that the program is safeguarding taxpayer dollars as best as they can,” said Task.
Matthew Ladner—senior advisor of policy research at the Foundation for Excellence in Education—says though ADE’s program has pioneered good ESA policies and practices, such as a parent handbook detailing guidelines for its use, auditors made several suggestions to improve practices within the program, such as implementing a fraud reporting system, which ADE has agreed to do.
Ladner says account oversight and transparency are “the laboratory of reform” and other states can learn from what Arizona has done.
“The Arizona Department of Education was the first agency ever to administer an account-based K–12 program, so there was little previous experience to draw upon,” Ladner says. “We’ve learned a great deal over the last five years, and Arizona’s experience has been crucial to [the reform] process.”
‘Minuscule’ Incidence of Fraud
Jonathan Butcher, education director at the Goldwater Institute, says Arizona’s ESA has successfully prevented fraud.
“The big takeaway from the auditors’ report was that the amount of fraud uncovered was miniscule: less than 1 percent of total ESA distributions, based on figures from the auditor,” Butcher said. “It is possible to do this program well, as designed in Arizona.”
Butcher says though ADE agreed with the majority of the changes AGO suggested, he urges caution in the process.
“When government tries to do something better, it often comes at the expense of the taxpayer’s freedom or ability to make choices for themselves,” said Butcher. “I agree improvements are due, but I think individual liberty must be preserved while you’re doing that.
“I think we understood that this is a newer program,” Task said. “It’s only been around a few years, and it seems to expand every year. Having the opportunity to have an external team come in and look at it was a good thing.”
Jenni White ([email protected]) writes from Oklahoma City, Oklahoma.