The Arizona Department of Education (ADE) accused a major media outlet of misrepresenting the amount of fraud that occurs within the state’s school choice program.
Per ADE, 12News claimed the Empowerment Scholarship Account (ESA) Program had fraud totaling 20 percent. ADE said this figure was false, and that the true fraud rate sits at 0.3 percent.
The 20 percent claim originated from a risk-based audit — an audit of limited scope — which targeted specific higher-risk participants and accounts. It does not account for the entire ESA Program population, says ADE.
ADE presented the 0.3 percent figure from a study by Stanford PhD on a random sample to obtain a more accurate assessment of the entire ESA population. That study, which reviewed 3,000 random ESA orders between July 2025 and February 2026, also concluded that unallowable spending amounted to less than two percent of the total.
ADE Superintendent Tom Horne demanded 12News issue a retraction.
“A ridiculous figure of 20 percent fraud has been circulating concerning ESA purchases which resulted from a total misinterpretation of data provided to Channel 12. The 20 percent figure represented program participants that ADE had selected for risk-based auditing,” said Horne in a press release. “Continued use of the 20% fraud allegation is an outrageous misrepresentation to the public that must stop.”
By comparison, Horne noted, other government programs have higher rates of improper spending: Medicaid totals over seven percent, food stamps total over nine percent, and unemployment insurance totals over 14 percent.
Horne clarified that the unallowable purchases rate doesn’t constitute fraud necessarily. The superintendent said “most” of those purchases were confirmed as “innocent mistakes” such as improper form completions or viewing certain unpermitted educational items as permitted, like backpacks or lunch boxes.
Horne said ADE promptly recovers misspent funds, and has recovered over $1.2 million.
The disputed 20 percent figure was mentioned in multiple articles by 12News, including one of the latest pieces of coverage published on Wednesday.
“According to state records obtained by 12News Investigates, nearly 20% of ESA parents or at least 18,000 ESA account holders, have misused voucher funds,” read Wednesday’s article.
The original 20 percent figure by 12News stemmed from a report on public records reviewed by the outlet which estimated that misspending “could” amount to 20 percent of all purchases in the ESA Program. The report stated that over 18,600 out of the 102,000 ESA account holders had at least one unallowable purchase over the course of a year.
Horne said at the time that the percentage provided wasn’t totally representative of fraud; rather, the superintendent said “most of it” was attributable to mistakes by the parents.
While critics of the program highlight the millions ADE is forced to recover, mainly from misspending and marginally from fraud, supporters of the program highlight the millions saved by children entering the ESA Program rather than their designated public district school system.
Goldwater Institute director of education policy, Matt Beienburg, said in a press release that wrongful spending occurs just as much, if not more, in the public school district system.
“It’s also worth observing that just 52 cents of every dollar sent to Arizona district schools now makes it to classroom instruction according to the state auditor general,” said Beienburg. “Among the many uses of those funds outside the classroom: a $500,000 trip to Las Vegas by a school district that promptly cut bus services for students; a district spending $4,000 per person to send staff to Napa, California for a conference featuring wine tastings, a district spending $18,500 on ‘membership dues and for staff to attend golf tournaments,’ and more.”
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
It is said that a lie travels halfway around the world before the truth can get its pants on. But when the truth finally catches up, it tends to arrive with receipts.
In recent weeks, anti-school-choice activists have accused Arizona’s popular Empowerment Scholarship Account (ESA) program of having a ludicrously high rate of misspending. That narrative, repeated endlessly despite being repeatedly debunked, has now collided with an inconvenient reality: the Arizona Department of Education’s own data tell a starkly different story, one that exposes the “unaccountable ESA” myth for what it always was: a misleading talking point masquerading as journalism.
On Thursday, the Arizona Department of Education published the results of a random audit of the ESA program, finding very low rates of misspending relative to other publicly funded programs and even less fraud. Less than 2% of ESA funds were spent on unallowed items, and 0.3% of the funds were spent on items considered “egregious” or fraudulent. The department is in the process of recouping those funds.
The department’s audit has punctured the gross distortions of Phoenix-based journalist Craig Harris of Channel 12, who had misrepresented the ESA program as being rife with fraud. The department called Harris’s claims “ridiculous,” “reckless,” and “a total misinterpretation of data provided by [the department] to Channel 12.”
Harris had claimed that 20% of ESA purchases represented misuse of funds based upon an examination of only a small portion of total ESA purchases—384,478 of the 1.8 million total ESA transactions since December 2024, approximately 20% of the total.
But it was not a random sample. The Arizona Department of Education had selected these purchases under a risk-based audit for additional scrutiny, so it was not a random sample that one could use to extrapolate rates of misuse in the ESA program. Instead, the risk-based pool was far more likely to contain misuse than the average purchase.
In other words, among the 20% of ESA purchases flagged for additional scrutiny, the department found 20% to be misspending. Harris, however, extrapolated the risk-based results on to the entireuniverse of ESA purchases. This represented a blatant distortion because the remaining purchases outside of the risk-based sample were far less likely to involve misspending.
Think of it this way: imagine that a reporter read a study showing that 20% of Americans were obese and that 20% of obese Americans had diabetes, then he ran a story claiming that 20% of all Americans had diabetes. Such a claim would be a complete distortion of the data, a conclusion that is entirely unsupported by the facts.
Harris was warned both publicly and privately that his “analysis” was deeply misleading. Nevertheless, he continued to repeat his “20% misuse” claim on television and social media.
The Arizona Department of Education decided to set the record straight by auditing a random sample of thousands of Arizona ESA purchases. The audit’s conclusion: “About 2% of purchases are unallowable expenses and only 0.3% represent fraud or egregious purchases.”
In short, Harris’s “analysis” on misspending was off by a factor of 10, and his accusations of fraud were off by nearly a factor of 100.
And although Harris made it seem like one in five ESA parents were buying diamond rings, the reality is that egregious purchases represented a vanishingly small percentage of ESA spending. Most of the unallowed items appear to have been innocent mistakes.
The Arizona Department of Education explained the difference between unallowable purchases and egregious purchases/fraud in a press release:
The submission of a purchase that is deemed unallowable does not constitute fraud. Most are innocent mistakes, such as an error in a form that must be resubmitted, or educational items that are not on the allowable list but that the user could have in good faith believed were permitted. Some examples would be backpacks, lunch boxes and water bottles.
A ridiculous figure of 20% fraud has been circulating concerning ESA purchases which resulted from a total misinterpretation of data that we provided to Channel 12.
Cracking down on misspending is important, but so is keeping things in perspective. The rate of improper payments for the Arizona ESA program, at 1.9%, stands far below a variety of programs which ESA opponents support, such as Medicaid (7.4%), food stamps (9.3%), and unemployment insurance (14.4%). Moreover, the Arizona Department of Education actively recovers misspending, and refers serious cases for criminal prosecution to punish criminal activity and to deter fraud.
Indeed, the only reason we know about the miniscule level of unallowed purchases in the ESA program is because it is so transparent—far more transparent than district schools, which do not report transaction-level data to state officials, let alone the public. Given the rash of recentscandals in Arizona’sdistrictschoolsystem, one can only imagine what we would find if given access to information about every purchase that district schools have made, as we have for the ESA program.
In the interests of transparency and accountability, state lawmakers should require the district schools provide the same level of information about purchases as ESA families.
Harris has not yet retracted his false reporting. Instead, he has doubled down on his errors, erroneously claiming that the department’s audit was “largely skewed” and based on “a miniscule sample.” This claim is particularly ironic given that Harris erroneously treated a risk-based sample—which is inherently skewed—as though it was representative of the entire population. A random sample, by contrast, is representative of the whole.
Facts are stubborn things. So too, apparently, are anti-school-choice activists who can’t let go of the false narrative they pushed in the face of overwhelming evidence to the contrary.
Matthew Ladner is a Senior Advisor for education policy implementation and Jason Bedrick is a Senior Research Fellow at the Heritage Foundation’s Center for Education Policy.
Emerson famously noted that “a foolish consistency is the hobgoblin of little minds.” Opponents of Arizona’s school choice program seem determined to field legions of such monsters.
Exhibit A: the reporting of Craig Harris. Harris has over the years repeatedly filed anti-school choice stories which were riddled with errors. His latest salvo against Arizona’s popular Empowerment Scholarship Accounts (ESA) program is no exception.
In 2018 and 2019, Harris published articles in the Arizona Republic claiming charter schools underperformed district schools and faced mass closures, but both stories relied on flawed research—including counting schools that only went through 9th grade or had already closed as having 0% graduation rates and relying on “research” by anti-charter school activists that misunderstood basic accounting concepts.
More than six years later, the predicted mass closures have never materialized, and National Assessment of Educational Progress data actually showed Arizona charter students outscoring district peers by roughly two grade levels.
But Harris, unlike the students, doesn’t seem to have learned his lesson. These days he has fixated his efforts against Arizona’s ESA program—and the results are just as edifying.
With an ESA, parents can purchase a wide variety of educational goods and services using 90% of the state money that their child would have received at their local district school. The parent-managed accounts have state oversight to keep transactions focused on allowable education expenses. The program is wildly popular with Arizona families, with over 100,000 students participating.
However, the ESA program is not so popular with special interest groups tied to school districts and their allies in the press.
Now at Channel 12, Harris has produced misleading stories about Arizona’s ESA program, including claims that parents use accounts for “babysitting“—based on a since-corrected error by the Treasurer’s Office—and that families are “subsidizing vacations,” when in reality they’re purchasing tickets to museums, zoos, and aquariums, which are allowable educational expenses also used by public schools. The program uses risk-based auditing to detect fraud, the same widely accepted method used by the IRS and recommended by Arizona’s Auditor General.
In his latest salvo against ESAs, Harris has produced a so-called “analysis” claiming that 20% of ESA purchases constituted a misuse of funds—a huge jump from the less than 1% rate of misuse previously detected by the Arizona Auditor General.
Misuse of funds in publicly funded programs is a serious problem which the Arizona Department of Education has taken great pains to minimize in the ESA program. Harris, however, is once again playing games and tricks with the data.
First, Harris’s claim of that 20% misuse is based upon an examination only of a small portion of total ESA purchases—384,478 of the 1.8 million total ESA transactions since December 2024, or about 20% of the total. This smaller group of purchases had been selected by the Arizona Department of Education for additional scrutiny via risk-based auditing, so it’s not a random sample that one could use to extrapolate about rates of misuse in the ESA program generally.
In other words, among the 20% of ESA purchases flagged for additional scrutiny, 20% were found to be misspending. But 20% of 20% amounts to only 4% of total purchases. Harris’s claim that 20% of ESA purchases were misspending is a gross exaggeration.
In fact, even the supposed 4% misuse rate itself is an exaggeration, as it is 4% of total transactions, not 4% of total spending. The most recent data from the Arizona Department of Education show more than half of ESA funds are spent on private school tuition, so the rate of misspending is likely less than 2% of total spending—a rate of improper payments that is well below a variety of programs found in programs which ESA opponents support, such as Medicaid (7.4%), food stamps (9.3%), and unemployment insurance (14.4%).
Tears for Fears’s hit song “Everybody Wants to Rule the World” includes the line, “One headline—why believe it?” If the headline is followed by a Craig Harris byline, be very careful before you believe it as you are not getting the whole story—maybe even a false story.
Matthew Ladner is a Senior Advisor for education policy implementation and Jason Bedrick is a Research Fellow at the Heritage Foundation’s Center for Education Policy.
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.
"Facts don't lie, even if the media does."
Here are two MAJOR lies 12News "reported" in its bogus ESA attack 👇
❌ Dollar amounts were exaggerated up to 100 times!
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.”
For immediate release: August 29, 2025 Horne calls out AG Mayes for misleading attack on ESA program AG sent letter to Superintendent today Link: : https://t.co/ul3JSKLudp Contact: Communications@azed.gov pic.twitter.com/xGEPdsrHqB
— Arizona Department of Education (@azedschools) August 29, 2025
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.”
The legacy media seem to be on a mission: tear down Arizona’s groundbreaking school choice program with false accusations and inaccurate reporting.
Fortunately, facts don’t lie, even if the media does.
The Arizona Capitol Times declared this week in astonishing terms, “Education department under fire for approving $124M in improper ESA [education savings account] purchases.”
Such astronomical levels of fraud would seem to threaten the very foundations of the historic school choice revolution that has swept the nation. There was just one problem, the headline was completely false.
Not only were the supposed dollar amounts exaggerated up to 100 times greater than the amounts of improper spending actually reported by the department, but these purchases weren’t even approved in the first place.
Here’s the story the media won’t tell: Arizona’s 2022 adoption of a fully universal ESA program has been a nation-leading success, allowing parents across the state to give their children an education best suited to their needs.
To its credit, the Times quickly retracted its original headline and issued a formal correction admitting “an inaccurate dollar amount” in its first draft and eliminating the suggestion that the purchases were “approved.” Unfortunately, such journalistic ethics appear not to be shared by the Times’ more ideological media counterparts in Arizona, particularly those of the teachers’ union-aligned 12News team, who have resolutely declined to correct or retract their false reporting.
12News’ Craig Harris, for instance, has repeatedly and falsely declared that the state has “approved” ESA purchases for iPhones, televisions, and other non-educational items over the past year.
But all those purchases 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.
Yet, 12News either knowingly misrepresented the status of these orders or else incompetently failed to perform basic due diligence to learn how the program operates.
By 12News’ anti-ESA logic, the IRS should apparently also withhold refunds to taxpayers until their tax returns have been audited potentially years later, rather than promptly when the returns are filed.
Unfortunately, this is not the first time that 12News’ anti-school choice reporters have been exposed in such light. In 2018, Harris (then with the Arizona Republic) falsely reported that Arizona charter schools produced worse student graduation rates and worse outcomes on the state A-F letter grade system than district schools. Both claims turned out to have been fabricated results stemming from a faulty, agenda-driven data analysis by Harris’ team.
In 2024, 12News’ Joe Dana likewise doubled down on false claims that ESAs cost state taxpayers more than the public school system per student by conveniently ignoring major sources of public school funding. The state’s Classroom Site Fund, for example, allocates over $1,000 for every public school student in the state and gives not a penny to ESA families.
Undeterred by journalistic standards, Dana’s 12News team also went further, deceptively extracting a fragment of a statement given by the state’s budget director (given in response to a completely different question) to suggest the ESA program had created unprecedented strain on the state budget.
The Heritage Foundation’s Matt Ladner and Jason Bedrick have already exposed a litany of deceptive claims flowing from outlets like 12News, while more prestigious national news organizations like The Washington Post have seen their recent anti-ESA narratives similarly debunked. Yet none of these outlets have expressed any contrition for their deceptive coverage.
Indeed, in perhaps the richest of ironies, Harris’ 12News team recently attacked ESAs for “hurting” high-performing schools like Arizona charter network BASIS by competing with it for students. Never mind that Harris previously attacked BASIS for its alleged poor stewardship of taxpayer funds. Now that it is clear he and the media were on the wrong side of that school choice debate as well, they have simply shifted to a new enemy in their war on parents.
Looking at the whole of Arizona’s education landscape, there is no question that those who seek to defraud the state—whether via the traditional public school system or its competitors—should be prosecuted to the full extent of the law. But if there is a scandal in our education system, it is the dishonest reporting by journalists who are more disturbed by parental empowerment than by the tens of billions of dollars squandered year after year in chronically poor performing public schools.
Matt Beienburg is the Director of Education Policy at the Goldwater Institute.
