Arizona treasurer says ESA platform review isn’t related to spending controversy

PHOENIX – Arizona Treasurer Kimberly Yee said the announcement that her office will review the ESA marketplace system is unrelated to recent reports of misused funds within the program.

The Empowerment Scholarship Account school voucher program allows families to use public education tax dollars for private school or homeschooling expenses. It was created in 2011 and became universal in 2022, opening the ESAs to any Arizona student. The program currently has over 100,000 users.

Yee announced Thursday she is looking to make changes to the ESA marketplace platform to avoid misuse of taxpayer dollars. Her department is opening a formal Request for Information (RFI) to solicit opinions from ESA program vendors on how to improve the payment system.

Why is Treasurer Kimberly Yee’s office taking action on ESA platform?

The Treasurer’s Office is in charge of the contract between the ESA program and the financial vendor that allows parents to be reimbursed for purchases or submitted payments.

Yee, who is running against Superintendent of Public Instruction Tom Horne in this year’s Republican primary election, told KTAR News 92.3 FM that her office is not responsible for monitoring potential ESA fraud. That is covered by the Arizona Department of Education.

She explained that the three-year contract for the voucher program’s current financial system is set to expire next summer, and opening the floor for vendors and families to weigh in is standard practice before a Request for Proposal (RFP) is opened.

“Three years is a long time when you talk about technologies. And as we request this, I believe that the ESA marketplace platforms really do need to be improved to protect taxpayer dollars,” she said.

Yee said it’s a coincidence the RFI was issued amid recent reports of widespread misuse within the voucher program.

What is the controversy about ESA usage?

Last month, 12News reported that nearly 20% of ESA users spent funds on unallowable purchases, adding up to $10.3 million.

On Tuesday, Arizona Superintendent of Public Instruction Tom Horne called the 20% report “ridiculous” while speaking to KTAR News 92.3 FM’s The Mike Broomhead Show.

The Arizona Department of Education said a random sample of 3,000 ESA users showed that 2% of funds were spent on unallowable purchases, with only 0.3% considered fraudulent or egregious.

Regardless, Yee said she hopes a new ESA financial system will help cut back on possible misspending.

“We want to be able to [ensure] program funds are efficiently identified for any misspending or misuse,” she said.

Funding for this journalism is made possible by the Arizona Local News Foundation.

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