ESA fraud case discovered by Supt. Horne’s office results in conviction

Department of Education aggressive in rooting out fraud

PHOENIX – State schools chief Tom Horne says the only way today’s conviction of two people on charges of fraud using Empowerment Scholarship Account (ESA) dollars could happen was because the Department of Education discovered the activity in 2024 and referred it for prosecution.

Horne stated, “In a recent television interview, state Attorney General Chris Mayes outrageously and mindlessly accused me of permitting improper purchases such as lingerie and diamonds.  If she paid attention to her job or even to the news, she would know that this was a false charge.

To date we have collected or referred for collection more than $622,000 in improper purchases under the program where purchases for under $2,000 are paid but not approved immediately, subject to later audit. That method, called risk-based auditing, is a common practice in many federal and state agencies and is dictated by state law.  Without this program, reimbursements for expenditures would take over two months, putting a terrible burden on parents who have paid money and are entitled to reimbursements.

We have also won 16 appeals of improper expenses such as dune buggies, golf simulators and other unallowable items. In all those cases, the department has not received any support from the Attorney General’s office to ensure anyone who tried to defraud the system is held accountable. That appeals work is being done entirely by the Department of Education, and we have won them all.

The Department of Education has the same number of people authorized to review purchases as it had when it had one-tenth as man participants in the ESA program. The 12 people assigned to this task work very hard and courageously and can process 500 per day even though they get 1000 requests every day. Without this program, reimbursements for expenditures would take over two months, putting a terrible burden on parents who have paid money and are entitled to reimbursements.

In the most recent legislative session, the House of Representatives budget had an item for more people in the Department of Education doing this work, but Governor Katie Hobbs told them that if they did not remove it, she would veto the budget. As a result, they felt they had to remove it, because at that stage an unapproved budget would have resulted in a government shutdown. 

I am committed to doing everything possible to protect taxpayer resources and root out fraud and abuse.”