Arizona’s ESA school voucher program shares problems California’s Medicaid system




Photo courtesy U.S. Army

What do California’s Medicaid program and Arizona’s Empowerment Scholarship Accounts school vouchers have in common? 

The California state auditor flagged $4 billion in questionable payments made by that state’s Medi-Cal program (their version of Medicaid) from 2014-2017, mostly to beneficiaries who hadn’t been properly verified. Some were receiving services three years after their eligibility status was supposed to be resolved. 

Where have Arizonans heard about questionable spending of state funds, long eligibility determination wait-times, and years of insufficient oversight in Arizona? In our ESA voucher program. 

When a program is intentionally underfunded, as it has been basically since the ESA program was created, it doesn’t matter who is in charge. The oversight and administrative issues that Republican Superintendent of Public Instruction John Huppenthal experienced in 2013 and 2014 persisted under his Republican successor, Diane Douglas, and they still are being grappled with by Democrat Kathy Hoffman, who took control of the Arizona Department of Education in January.

The people who suffer most when Republican lawmakers purposefully hobble oversight of the voucher program are the families trying to secure the best education for their children and the taxpayers of Arizona who fund the program.

It’s this intentional underfunding of the administration and oversight of the program that led to the $700,000 in misspending and fraudulent ESA voucher purchases in 2018 discovered by the Arizona Auditor General.

Imagine having a budget to put locks on all the doors of your house, but then only being given the money to buy locks for half your doors. It doesn’t matter who is securing the locks, your home will only be half as protected as it could be. 

This is effectively what Republicans in the legislature are doing. It begs the question: What is gained by keeping the review and auditing arm of the ESA program so woefully underfunded?

Recently, news broke that Arizona ESA funds were mistakenly approved for a homeschool student who didn’t qualify for the program, a mistake that was only caught by the Department of Education after the parent then filed applications for ESA funds for all their children. Arizona’s hardworking taxpayers should be irate it took a second wave of applications for the ineligible award to be discovered. 

But that’s the ESA program our Republican-led Legislature wants: one that is so underfunded, understaffed and under-resourced it can’t ensure proper use and good stewardship of our tax dollars. And now this family is going to be left trying to find last-minute solutions as the school year has begun. Fortunately, they can simply enroll in one of the highly rated public district schools in the state, find a public charter school, or continue homeschooling on their own dime.

While working for the Foundation for Government Accountability, I traveled the country advocating for stronger fraud protections in government programs like Medicaid, the Supplemental Nutrition Assistance Program (food stamps) and Temporary Assistance for Needy Families (welfare cash assistance). 

Our mission was to improve these programs by utilizing technology and data to make more effective eligibility determinations to ensure only people who were supposed to be getting help were taking it. In Arizona, Rep. Anthony Kern led the charge at the Legislature to improve accountability, but those measures failed to pass.

Hoffman took a huge step in this direction by contracting with a vendor who will increase transparency and accountability in the ESA program. Despite that, Republican lawmakers continue to refuse to give the Department of Education sufficient funding to properly serve Arizona’s ESA families.

Reforming a program as large as Medi-Cal would be daunting, as there are roughly 12 million people enrolled at a cost of $98.5 billion for 2018. That’s why the time to address Arizona’s ESA voucher program’s administrative underfunding is now – the ESA voucher program covers about 8,200 students and is estimated to cost $110 million

The solution for Arizona is incredibly simple and uncontroversial: Fully appropriate the authorized ESA voucher administration budget. State law requires that  4 percent of the program’s cost be set aside for the Department of Education to administer the program and provide oversight, but the Republican-led legislature has only authorized the agency to spend less than half of that amount. 

Simply allowing them to spend the full funding doesn’t require any change to the law, and it won’t cost the state any money. But it would allow the Department of Education to double its ESA administration staff. This would cut down on the time families have to wait to hear back about their eligibility determinations, the amount of time they spend on hold when dealing with questions, and potentially ineligible students or expenses would be identified in a timely manner. 

Of course that would mean the national “school choice” lobbying industry would have to find new controversies to fuel its outrage, but that only matters if you care about a special-interest agenda more than children.

If public policy groups in the state of Arizona were actually interested in helping prospective ESA families, whether they be Navajo students, the stepchildren of military service members, parents frustrated by long wait times, or homeschool families wanting to explore their options, then they’d spend less time tweeting and making videos and more time pushing for the Legislature to fund the administration of the ESA voucher program. 

Everyone should be able to support making Arizona’s ESA voucher program as smooth as possible for parents and as responsible as possible for taxpayers.

2 COMMENTS

  1. ESA families watched as Kathy Hoffman stood in front of a senate committee and opposed a bill that would have added transparency and accountability to the ESA program, while also decreasing costs. Ms. Hoffman actively opposes the entire program, and the service has gone downhill exponentially since she took office. She is taking credit for a third party vendor to help manage the program – something that was part of the bill she opposed. Once that vendor is in place, the ESA office will be saving money and won’t need extra staff to manage that portion of the program. It is ironic that groups like Save Our Schools (and you yourself Mr. Siler who has actively been in conflict with parents in private ESA support groups) now are arguing for throwing more money at the ESA program instead of fixing the actual problem – mismanagement by Superintendents who are not qualified to run the program, train employees effectively, and manage a budget responsibly. You know, since you have participated in private ESA support groups to get information to undermine the program, that the “fraud” numbers are wrong and misleading. Less than a 1% “fraud” rate is unheard of for a government program, and a very high percentage of what was labeled as fraud was actually Bank of America being hacked, or parents who bought something they believed followed the guidelines but were later denied because ESA staff regularly changes rules and interpretation of the guidelines. The lack of consistency is the reason parents must call and email for every little thing to cover themselves in the very likely scenario that something approved will later be denied. This alone is responsible due the long wait times, unanswered calls and emails. If Hoffman trained her staff, it would cut down in the need for employees to respond to calls and emails. ESA families don’t want more money thrown at the program, we want clear, consistent guidelines, transparency in reporting and auditing, and trained staff – things that we fought to have implemented but were opposed by Save Our Schools and Hoffman.

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