Concerns about Fraud in the Use of School-Choice Funds Are Misplaced

March 29, 2023 | Jason Bedrick
About the author: Yehoshua (Jason) Bedrick is director of policy at EdChoice. Previously, he was a policy analyst with the Cato Institute’s Center for Educational Freedom.

While opponents of allowing parents to use government monies to educate their children as they see fit have complained of the potential for waste and abuse, Jason Bedrick argues that there is very little of either:

A dozen states now have K-12 education savings account, or ESA, policies that allow families to use a portion of state education funds to customize their children’s education. Families can use money drawn from an ESA to pay for private-school tuition, tutoring, textbooks, homeschool curricula, special-needs therapy, and more. In five states, every K-12 student has or will soon have access to ESAs or ESA-like programs.

The most recent review of Arizona’s Empowerment Scholarship Account program by the Arizona auditor general found an improper payment rate of almost zero. A prior review in 2018 had found “[m]ore than 900 successful [ESA] transactions at unapproved merchants totaling more than $700,000.” Opponents of the school choice blasted the program for its supposed lack of accountability, but they failed to mention that this accounted for only about 1 percent of ESA spending.

Moreover, as Matthew Beienburg of the Goldwater Institute has documented, much of the misspending was the result of innocent mistakes, not fraud. For example, the grandmother whose had purchased “educational games and supplies for her special-needs grandson that weren’t explicitly required by his at-home curriculum and thus not approved under the program.” Other parents found their accounts flagged for purchasing things like pens, pencils, notebooks, and other consumable supplies that are not eligible expenses. Innocent misspending must be reimbursed. The rare instances of intentional fraud are subject to prosecution.

Indeed, education savings accounts have proven far more financially accountable than other government programs.

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