By Matthew Holloway |
Responding to a letter issued by Arizona Democrat Attorney General Kris Mayes, Arizona Superintendent of Public Instruction Tom Horne issued a statement that Mayes is “misleading the public with claims she has leveled at the management of the Empowerment Scholarship Account (ESA) program.” In an 8-page letter with 12 pages of testimony from the Arizona Department of Education’s John Ward in the case of Velia Aguirre v. State of Arizona, Mayes outlined an investigation from her office, making allegations regarding the Department of Education’s use of a risk-based audit approach, which echoes a similar exchange between Horne and Governor Katie Hobbs in December 2024.
Mayes directly critiqued Horne and the ADE writing in part:
“Your failure to appropriately monitor ESA spending has created an untenable situation. Again, I do not want to disrupt the process for ESA holders who are following the law, but this cannot continue. Accordingly, you must act immediately to develop and implement appropriately rigorous purchase review standards and risk-based audit procedures so that ESA families may access their funds in a timely manner and public funds are not spent illegally. The Department’s purchase review and audit standards should employ appropriate controls to safeguard public funds. These controls, and any automatic payment thresholds, should consider the level of risk associated with different categories of expenses, vendors, methods of payment, and individual ESA holders.”
Mayes went on to cite a 12 News report that “the Department has automatically approved [$]1.2 million ESA purchases since the automatic approval policy took effect in December 2024.”
As Matt Beienburg wrote in an op-ed for AZ Free News, the Arizona Capitol Times issued a retraction of its initial report that “Education department under fire for approving $124M in improper ESA [education savings account] purchases,” clarifying with a formal correction that “an inaccurate dollar amount,” was reported. However, no similar retraction has been issued by 12 News as of this report.
Beienburg notes that blatantly inappropriate purchases such as iPhones, televisions, and other non-educational items “haven’t been approved, as the State Board of Education’s ESA Handbook—ratified by members appointed by both former Gov. Doug Ducey and Gov. Katie Hobbs—makes clear. The document expressly states that while families’ ESA purchases under $2,000 are promptly reimbursed by the state, these items ‘are not deemed ‘approved’ by the Department, until they are audited OR the timeframe to audit the orders has passed [2 fiscal years].’ Just like their tax returns filed with the IRS, these families’ ESA purchases are processed up front and subject to enforcement afterwards.”
In a lengthy statement, Horne addressed the allegations raised by Mayes and accused the AG of making false statements:
“In your letter today, and in a recent television interview, you misled the public by stating that improper ESA purchases had been approved, without any reference to the fact that under risk-based auditing dictated by the legislature the money has been recovered or is in the process of being recovered. We have collected or are in the process of collecting more than $600,000 that was paid out for improper purchases.
You also criticize risk-based auditing. Risk-based auditing is a very common and appropriate practice used by auditors, and the ESA Director has more than 16 years’ experience as an auditor. The risk-based approach involves not approving purchases prior to review, but paying amounts under $2,000 subject to later review, which is how we were able to collect or be in the process of collecting more than $600,000.”
He went on to chide Mayes writing, “You state that this is not partisan. That is disproved by all the false statements you made on the television interview.”
Horne continued, “Your argument is not with me but with the legislature. The legislature recently passed ARS section 15–2403B. It provides in part: ‘The department, in consultation with the office of the auditor general, shall develop risk-based auditing procedures for audits conducted pursuing to this subsection.’
“The statute was passed because the department is operating with the same number of people to check purchases as had been given by the legislature when the program was 1/7th as large. The most recent House budget included an appropriation for more people to check purchases, but it had to drop that provision when the governor said that if it did not do so, she would veto the entire budget. The limit on personnel had meant delays for reimbursement or more than two months, which was an unbearable burden for parents who had already paid the money and needed reimbursement. This explains why the legislature wanted to add more staff to serve parents.
“Again, you misled the public in your interview by stating that these improper items have been approved. They were not approved, and as to all the items you mentioned, the accounts have already been frozen. This is as egregious as ignoring the recovery of over $600,000, not to mention your failure to state that this procedure was dictated to us by the legislature and the ESA parent committee that you referred to set the limit at $2,000 pursuant to the legislative command to adopt risk-based auditing. It has been made clear to ESA users in multiple communications that payments of under $2,000 do not imply approval, which can be obtained only after the risk-based auditing dictated by the legislature.
“You referred to a July 21 meeting of the legislative audit committee. Within four days we consulted with the auditor general. Some have erroneously interpreted the word ‘consultation’ to mean that the auditor general has the right to dictate terms to us. That is incorrect. The normal English language use of the word consultation is that we have a discussion, which we have done, and then proceed. However, we have agreed to have further consultations with the auditor general and will do so.
“We will provide at a later date further responses to your long-winded letter of seven pages single space. We are responding now to the main points so you will have no further excuse to mislead the public.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
