I have a suggestion for Representative Mark Finchem, (R-Oro Valley). How’s about one of his New Year’s Resolutions be that he sponsors a bill this session that actually improves the lives of his constituents?
Instead, the latest bill he is sponsoring, according to the AZ Capitol Times, is HB2022 (empowerment scholarships; financial oversight; treasurer) intended to broaden the state treasurer’s authority over the financial management of school vouchers. The bill “would add language to existing law that says the treasurer may contract with private financial management firms to manage the state’s Empowerment Scholarship Accounts (ESAs).” Evidently, Finchem believes the answer to ensuring more oversight over fraudulent ESA spending is to “grant the treasurer exclusive authority to issue requests for proposals from potential vendors, select payment processors and execute vendor contracts.”
But Chuck Essigs, lobbyist for the AZ Association of School Business Officials, questions the need for the bill since the Treasurer’s office only pays the vendor bills. It is up to Arizona’s Department of Education to ensure families have used their state-issued ESA debit card for only appropriate expenditures.
Yes, there have been problems, and tighter controls are needed. According to an October 2018 AZ Auditor General Report,
“Arizona parents made fraudulent purchases and misspent more than $700,000 in public money allocated by the state’s school-voucher style program and state officials have recouped almost none of that money.“
Arizona’s Department of Education (ADE) has repeatedly failed to flag accounts at high risk for fraud allowing parents to ”make numerous improper purchases on state-issued debit cards, even after the accounts should have been frozen or closed.” And although ADE sent 142 collection cases to the attorney general totaling about $500,000, only two of those cases were closed and only $11,000 has been repaid in full.
But, according to the Diane Douglas, AZ Superintendent of Public Instruction (a Republican), the failure of her department to catch the offenders was a result of decisions by the Republican-controlled Legislature to deny her department money needed to properly administer the program. Under the law, 4% of the program’s funding is supposed to go to ADE to administer and oversee the program. This year, it is getting about 2%, or $1.2 million.
Douglas said ADE needs the full 4 percent to properly oversee the program and although $5.7 million is sitting in a fund that is allocated for program oversight, the Legislature has not authorized the department to spend that money. She claims lawmakers resist properly funding oversight because they want a private entity to oversee it, telling the AZ Republic,
“If you’re not willing to put the resources into the oversight, then it doesn’t happen appropriately.
A key Republican senator, Bob Worsley, doesn’t discount Douglas’ assessment saying,
”My guess is just that the (Republican) caucus — my caucus — has been, probably, overly enthusiastic about ESAs, and vouchers in general, and therefore anything that would … make it more difficult, it would not be a high priority for them,“ said Worsley, of Mesa. Worsley said it is neither fiscally sound nor ethical for lawmakers to inadequately fund oversight of the program. ”In our capacity, we should be making sure the taxpayer dollars are going for what taxpayers intended, even if it’s your pet project … but I’m probably a lone voice in my caucus on that front,“ he said.”
I’m thinking Finchem’s bill is more about continuing to reduce government so it “can be drowned in the bathtub” than it is about catching parents buying big screens with their ESA debit card. This situation after all, follows the pro-privatizer playbook which says: 1) chronically underfund a government agency, 2) promote its failures to properly perform, and then 3) outsource to the private sector as a way to “save the day”. It’s a twist on the old “start the fire so you can be the hero and put it out” routine. In this case, start the fire, so you can burn down the existing structure and rebuild it the way you want it.
The GOP-led Legislature knows they haven’t properly funded ADE efforts to deal with the ever-increasing ESA expenditures. But, they want to shrink the department, not grow it. Especially when an educator who just happens to be a Democrat is about to take the reins. And before you ask, yes, Arizona’s new treasurer is a Republican. But I’m sure that has nothing to do with it…