{"id":67,"date":"2026-05-13T21:05:32","date_gmt":"2026-05-13T21:05:32","guid":{"rendered":"https:\/\/phoenixrelocationnews.com\/?p=67"},"modified":"2026-05-13T21:05:32","modified_gmt":"2026-05-13T21:05:32","slug":"arizonas-esa-program-was-audited-the-5-most-alarming-findings","status":"publish","type":"post","link":"https:\/\/phoenixrelocationnews.com\/?p=67","title":{"rendered":"Arizona\u2019s ESA program was audited: The 5 most alarming findings"},"content":{"rendered":"
\n

Arizona\u2019s Empowerment Scholarship Account program has been mired in controversy since it opened to the general public in 2022. Reporting has revealed inappropriate purchases of diamond necklaces, iPhones, widescreen TVs and Kenmore appliances.\u00a0<\/p>\n

Read more Who is Leroy McGill? What to know about the man Arizona will execute<\/a><\/p>\n

Still, the program has been strongly supported by Superintendent of Public Instruction Tom Horne and Republicans in the Arizona Legislature, who have balked at any attempts to ensure meaningful oversight. In 2024, Horne instituted a policy of auto-approving expenses under $2,000, saying those purchases would be audited later. Subsequent reporting by 12 News and others has since shown that unallowable purchases routinely sneak through.<\/p>\n

On Tuesday, the Arizona Auditor General threw more gasoline on that fire. Auditor General Lindsey Perry auditing the state\u2019s finances. The 342-page document examined the spending and auditing processes of dozens of state agencies, but the Department of Education \u2014 specifically its ESA program \u2014 was the star of the show. Perry\u2019s report outlined how the rapidly growing ESA program is marred by wasteful spending, inadequate oversight and rampant conflicts of interest. As of April, more than 102,500 students were enrolled in the ESA program for the 2025-2026 school year, according to the report \u2014 a 60% increase from just three years ago.\u00a0<\/p>\n

\u201cProgram management risks not setting an ethical tone at the top environment for the Program in general,\u201d the report reads.<\/p>\n

Horne\u2019s department attempted to cast the audit as a validation of its efforts.<\/p>\n

\u201cThe Auditor General\u2019s report completely demolishes the myth about misspending in the ESA program,\u201d wrote Department of Education spokesperson Doug Nick in an email to Phoenix New Times. \u201cThe potential is miniscule and far less than other government programs,\u201d he added. \u201cWith a budget of a billion dollars, the Auditor General found approximately $86,000 \u2014 that is 0.0086 percent \u2014 of potential ESA dollars at risk. That compares with findings at multiple state agencies involving hundreds of millions of dollars in errors or misspending. The ESA program is being operated appropriately and has been falsely and unfairly attacked by its critics.\u201d<\/p>\n

That\u2019s not an accurate representation of the audit\u2019s findings. In many cases, the Auditor General wrote that ESA program processes were inconsistent and incomplete to the point that performing a complete audit would have been difficult. And the $86,000 figure comes from a small-sample audit of transactions selected by the Auditor General\u2019s Office to examine ESA program procedures. It was not a representation of all ESA purchases, as the Auditor General noted in a footnote: \u201cWe selected our audit sample(s) to provide sufficient evidence to support our findings, conclusions, and recommendations. Unless otherwise noted, the results of our testing using these samples were not intended to be projected to the entire population.\u201d<\/p>\n

Horne\u2019s department rejected each of the auditor\u2019s recommendations, attempting to claim that its internal processes are managing the ESA program just fine.\u00a0In response, the Auditor General\u2019s Office wrote that the ESA program \u201chas included certain statements in its response that misrepresent our work, mislead the reader, and deflect attention from the message that the Program needs to improve internal controls in various areas.\u201d<\/p>\n

The report says auditors faced months of resistance from the Department of Education during their examination of the ESA program. The Department of Education rejected that claim, saying that the Auditor General\u2019s Office delayed signing an agreement with its ESA vendor, ClassWallet, to allow it access to its systems. \u201cFor the auditor general to mischaracterize the situation in her report by omitting key information to make it appear that ADE was obstructionist is blatantly deceptive,\u201d the education department wrote in response to the audit. In reply, the Auditor General noted that state law doesn\u2019t require them to jump through the hoops that the Department of Education had required.<\/p>\n

The audit is a lot to take in. Here are the five most alarming findings in the Auditor General\u2019s bombshell report.<\/p>\n

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Nearly 2.3 million transactions totaling more than $653 million were processed automatically.\u00a0<\/strong><\/p>\n<\/blockquote>\n

In December 2024, Horne announced that ESA transactions under $2,000 would automatically be processed \u2014 skipping any preliminary review \u2014 and later subjected to what the Department of Education called a risk-based audit after parents received the money. It was an attempt to clear the roughly 72-day wait time for ESA families, the report found.\u00a0<\/p>\n<\/div>\n

After that change was made, nearly 2.3 million transactions totaling $654.4 million across all spending types were automatically processed. That\u2019s where many unallowable purchases snuck through. The Auditor General found that the ESA program \u201cdoes not utilize a comprehensive risk-based audit approach\u201d in its post-approval audits of purchases.<\/p>\n

Without an effective auditing process, \u201cexplicitly unallowable\u201d items are more likely to slip by unnoticed, according to the report. And that\u2019s been happening. The report found that \u201camusement park tickets, hotels, meals and other travel expenditures\u201d were purchased using state dollars after being automatically approved.<\/p>\n

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The ESA program claimed it randomly selected 30% of purchases under $2,000 to audit. In reality, as few as 6.5% of purchases were actually audited.\u00a0<\/strong><\/p>\n<\/blockquote>\n

The ESA program\u2019s idea of a \u201crisk-based audit\u201d was using a random number generator in an Excel spreadsheet to review approximately 25% of automatically processed transactions. ESA program officials later told auditors that they selected 30% of purchases to audit in a given week.<\/p>\n<\/div>\n

However, the Auditor General found that the percentage of these transactions audited was well below the targeted 25%-30% range because certain types of transactions were being excluded. Over various two-week periods that auditors analyzed, the highest percentage of audited transactions was only 23.9%. The lowest was only 6.5% of automatically processed transactions.<\/p>\n

This meant that unallowable purchases or transactions with missing documentation likely went unnoticed.<\/p>\n

Read more Four years after unionizing, Phoenix Curaleaf workers ratify contract<\/a><\/p>\n

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The ESA program often failed to conduct timely reviews of unallowable transactions or those with missing documentation, resulting in the potential misuse of $86,599.\u00a0<\/strong><\/p>\n<\/blockquote>\n

Even when the ESA program identified that state funds were misused, it didn\u2019t always follow up to ensure the funds were recovered.<\/p>\n<\/div>\n

Between March 2025 and October 2025, the Auditor General\u2019s Office reviewed 15 transactions that ESA management had identified during its weekly audits. Four were unallowable expenses, and 11 of them were missing required documentation. Still, the Auditor General found that ESA program management failed to conduct a timely review of the audit results or take action \u2014 such as issuing a termination letter or reporting the account to the Arizona State Board of Education for collection \u2014 on 14 of them.<\/p>\n

Management failed to take action to recover state funds misappropriated for planter boxes, a refrigerator, gym equipment, a generator, curtain rod brackets, a dashboard camera, a home security camera and bathroom accessories. It also failed to follow up on cases involving missing documentation for purchases of tuition \u2014 in one case, the provided \u201cdocumentation\u201d was a handwritten bank transfer payment receipt for $1,000 \u2014 as well as a telescope and a raised garden bed.\u00a0<\/p>\n

Even after these accounts were identified for misspending, they continued to spend the state\u2019s money through the program.<\/p>\n

Adding to this problem, the ESA program didn\u2019t have \u201cdocumented\u201d internal policies to guide employees in manually reviewing and approving transactions, other than what is publicly available in the Empowerment Scholarship Account Parent Handbook. Formal training also wasn\u2019t provided to employees to ensure they understand the documentation requirements when a new handbook is developed.\u00a0<\/p>\n

In its response, the Department of Education cried poor, saying it would document its policies whenever lawmakers deigned to properly fund its operations. On this score, the Auditor General appeared to agree, writing that \u201calthough the Program has received appropriations to fund its operations, the resources provided may not have been enough based on Program growth.\u201d<\/p>\n

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Two families were put on a fast-track for expense approvals after meeting with the ESA program\u2019s executive director.<\/strong><\/p>\n<\/blockquote>\n

ESA program executive director John Ward directed his former deputy director to add two families to a \u201chigh-risk\/exclusion list\u201d that allowed their transitions to be \u201cmanually reviewed and receive expedited payment and reimbursement processing,\u201d according to the report. Instead, Ward said the former deputy director \u201cerroneously\u201d added these families to the conflict-of-interest logs, the report stated, which is how auditors discovered them.<\/p>\n<\/div>\n

Between July 2023 and October 2025, these two families submitted 266 transitions. The Auditor General\u2019s Office found \u201cunallowable expenses\u201d totaling $4,031, which included transitions that lacked evidence of a tutor\u2019s credentials and uniforms from a non-qualified school.\u00a0<\/p>\n

In its response, the Department of Education claimed that the two families were added to the list because Ward learned they were experiencing financial hardship. It also wrote that it \u201chas concerns with how poorly this was presented in the auditor general\u2019s report.\u201d<\/p>\n

The Auditor General\u2019s Office identified other potential conflict-of-interest issues. \u201cProgram management did not ensure $44,120 of transactions for account holders whom Program management and other Program employees had identified as having personal relationships within their employee disclosure statements received an independent review and approval to ensure they were allowable and followed program regulations,\u201d the report reads. That included one instance in which an ESA program employee approved her own child\u2019s tuition reimbursement. Also among those transactions, the auditor\u2019s office found potentially unallowable expenses that included adult romance books, an Amazon Echo Show 5 and Nintendo Switch accessories.<\/p>\n

In its response, the Department of Education took particular exception to the claim about allowing purchases of adult romance books, which were revealed to be by author Ana Huang. \u201cTo be clear, the ESA manager did not purchase these books,\u201d the education department wrote. \u201cTo attempt to impugn her because of purchases by an ESA holder who is related to her in some fashion is very low.\u201d The department also claimed that the Auditor General\u2019s Office had no relevant training to decide what books are and aren\u2019t allowable. \u201cWe do not believe there are any ESA families clamoring to have the auditor general decide which books their children should read,\u201d the education department wrote, adding that \u201cauditors are trained in numbers, not in principles of censorship.\u201d<\/p>\n

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5. The ESA program failed to identify problems in 34% of purchases in a sample collected by the Auditor General.<\/strong><\/p>\n

The Auditor General\u2019s Office pulled 63 expenses for a closer look, finding that the ESA program failed to identify issues in 25 of them. Those issues included 11 instances of missing documentation, two indications of possible misuse, seven instances of missing accreditation, three instances of overpayment and two unallowable expenses.<\/p>\n<\/div>\n

In one of those instances, an ESA employee \u201cinitially rejected\u201d a tutoring reimbursement transaction due to \u201cinsufficient documentation.\u201d The account holder \u201cresubmitted the transaction with the original documentation,\u201d and a different ESA employee missed the documentation problem and approved it.<\/p>\n

Read more County supervisor fibs about attending ceremony for fallen officers<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A long-awaited audit of Arizona’s troublesome school voucher program found myriad issues with how expenses are monitored.<\/p>\n","protected":false},"author":1,"featured_media":66,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-67","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education"],"yoast_head":"\nArizona\u2019s ESA program was audited: The 5 most alarming findings - Phoenix Relocation News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/phoenixrelocationnews.com\/?p=67\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arizona\u2019s ESA program was audited: The 5 most alarming findings - Phoenix Relocation News\" \/>\n<meta property=\"og:description\" content=\"A long-awaited audit of Arizona's troublesome school voucher program found myriad issues with how expenses are monitored.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/phoenixrelocationnews.com\/?p=67\" \/>\n<meta property=\"og:site_name\" content=\"Phoenix Relocation News\" \/>\n<meta property=\"article:published_time\" content=\"2026-05-13T21:05:32+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/phoenixrelocationnews.com\/wp-content\/uploads\/2026\/05\/af5ee40b10357a18a7cd2351f2a07253.webp\" \/>\n\t<meta property=\"og:image:width\" content=\"920\" \/>\n\t<meta property=\"og:image:height\" content=\"516\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/webp\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/phoenixrelocationnews.com\\\/?p=67#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/phoenixrelocationnews.com\\\/?p=67\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/phoenixrelocationnews.com\\\/#\\\/schema\\\/person\\\/b18a6d477e57bdeec7b4b61a70eace7b\"},\"headline\":\"Arizona\u2019s ESA program was audited: The 5 most alarming findings\",\"datePublished\":\"2026-05-13T21:05:32+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/phoenixrelocationnews.com\\\/?p=67\"},\"wordCount\":1785,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/phoenixrelocationnews.com\\\/?p=67#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/phoenixrelocationnews.com\\\/wp-content\\\/uploads\\\/2026\\\/05\\\/af5ee40b10357a18a7cd2351f2a07253.webp\",\"articleSection\":[\"Education\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/phoenixrelocationnews.com\\\/?p=67#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/phoenixrelocationnews.com\\\/?p=67\",\"url\":\"https:\\\/\\\/phoenixrelocationnews.com\\\/?p=67\",\"name\":\"Arizona\u2019s ESA program was audited: The 5 most alarming findings - 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