Katie Hobbs to Tom Horne: Don't greenlight rampant ESA fraud, dummy

Earlier this month, Arizona Superintendent of Public Instruction Tom Horne announced a plan to clear the state's massive backlog of reimbursement requests for Empowerment Scholarship Account expenses. Instead of scrutinizing each request before cutting a check with taxpayer money, the Arizona Department of Education would now auto-approve any expenses less than $2,000.

Horne sold the idea as a way to clear most of the roughly 89,000 outstanding reimbursement requests from parents in one fell swoop. However, considering that the ESA program has already been a boondoggle of wasteful spending — with parents successfully netting public money for luxury items — and that ESA fraud has been a persistent issue, the reaction to Horne's announcement was swift and mostly negative. Beth Lewis, the executive director of Save Our Schools and a frequent Horne critic, called the new reimbursement process a "recipe for disaster."

Now Gov. Katie Hobbs is getting in on the action. In a letter to Horne dated Dec. 17 and made public Thursday, Hobbs politely but sternly requested that the Republican superintendent reverse what was such an obviously bad decision.

"I urge you to reconsider this policy," Hobbs wrote. "The people of Arizona expect their elected officials to be strong stewards of their taxpayer dollars, not to enable fraudulent spending."

In a press release issued Thursday, Horne shot back that "the Governor played a major role in creating" the department's ESA backlog and that "part of the problem appears to be that staff in the Governor's office are slow learners."

In the letter, Hobbs noted the many problems with the ESA program. There were the lax standards for what constitutes a reimbursable expense, what Hobbs called "the pattern of excessive purchases including luxury car driving lessons, ski passes, expensive lego sets, and grand pianos." There was the fact that just two weeks ago, a grand jury indicted a couple who bilked $110,000 from the ESA coffers for expenses related to fake children.

Then there was Horne's own admission that the department had been forced to stop auto-approving expenses under $85 when parents began trying to sneak thousands of dollars of Amazon gift cards under the radar. Under the new system, Hobbs noted, a request for a $500 dune buggy that the department rejected in August would now receive blanket approval.

"Now, you are proposing to increase this threshold by more than twenty times," Hobbs wrote, "opening the door even wider for this type of activity that has no educational impact on students."

Horne and the Department of Education have said that auto-reimbursed expenses would be subjected to "risk-based auditing," though Hobbs cast doubt on the department's ability to catch fraudsters effectively. "If your staff is unable to review these purchases prior to authorizing them," the governor wrote, "how is the state assured that they will be reviewed afterwards?"

Horne responded in his statement that the provision to conduct risk-based auditing of ESA purchases was included in the latest state budget. "Maybe (Hobbs) should start reading what she signed," his statement said. However, nothing in the budget item cited in Horne's release says that the Department of Education must stop scrutinizing expenses on the front end.

In the end, the two politicians clearly diverge in their views of the ESA program. Department of Education spokesperson Doug Nick called it "among the most accountable program (sic) in the state." In contrast, Hobbs noted the program already has "rampant fraud" and rubber-stamping purchases less than $2,000 would just green light more swindling.

"Implementation of this course of action is a complete dereliction of ADE's responsibility to ensure the appropriate use of public funds" she wrote. "You must reconsider these actions."