Tom Horne Pushes Back on Scholarship Account Fraud Claims

Superintendent of Public Instruction Tom Horne is challenging what he calls a serious misrepresentation surrounding the state's Empowerment Scholarship Account (ESA) program, disputing widely circulated claims that 20% of ESA purchases constitute fraud.

Back in August, an investigation by 12News revealed that the Arizona Department of Education had automatically approved over one million requests totaling $124 million between November and July after becoming overwhelmed by the volume of applications.

During that stretch, all purchases under $2,000 were approved without individual review, even though many lacked proper documentation. Parents made unexplained transactions at retailers without submitting required receipts.

The ESA program, which provides public funding for private school tuition and homeschooling expenses, has served approximately 90,000 students statewide, and it costs over $1 billion annually.

12News recently conducted a follow-up investigation that flagged more than 18,000 ESA accounts totaling roughly $10.3 million in misspending and inappropriate expenses. Only six cases were referred for prosecution.

Horne's Response

Now Horne is pushing back.

"There's been outrageous and reckless reporting that 20% of ESA purchases are fraud, that's completely false," he said, placing blame on the news outlet. According to Horne, the 20% figure reflected only the share of purchases his office selected to review, not a measure of fraudulent activity.

To set the record straight, Horne commissioned a study by a Stanford-trained PhD researcher, which identified roughly 2% of purchases as improper, largely innocent errors such as incorrectly submitted forms or parents buying backpacks and water bottles in the belief they qualified.

He placed actual fraud at just 0.3%, contrasting it with Medicaid at 7.4%, food stamps at 9.3%, and unemployment insurance at 14.4%.

"Continued use of the 20% fraud allegation is an outrageous misrepresentation to the public and it must stop," he said.

Questions remain about how many flagged accounts have been suspended and how the state plans to recover the misspent funds in this ongoing battle.