Fraud found in Arizona’s Empowerment Scholarship Account program

For a few years, Arizona’s Republican leaders, including Superintendent of Public Instruction Tom Horne, have long insisted that fraud in Arizona’s Empowerment Scholarship Account (ESA) program is minimal.

However, public records obtained through a lawsuit by 12 News show a different story. The lawsuit investigates unallowable purchases, which are defined as spending that is explicitly banned under ESA program rules. Among the purchases discovered are diamond rings, gift cards and luxury clothing.
ESA spending from December 2024 through September 2025 found that out of 385,000 ESA purchases the department reviewed, nearly 84,000 were deemed unallowable. That’s just more than 20%.

A spokesperson for the State Department of Education says their system has uncovered fraud and recovered approximately $1.2 million in unallowable expenses through collections, repayments or referrals to legal authorities. The ESA program serves more than 100,000 students and is projected to cost the state budget up to $1 billion this fiscal year.

12 News Investigative Reporter Craig Harris joined “Arizona Horizon” to discuss the investigation and subsequent lawsuit.

“The Department of Education did their own, so these are their own records,” Harris said, “that show about 20% within the audit, within the sample, are on a list of banned items, things that you’re not supposed to buy.”

Harris emphasized tens of millions of dollars are being spent on items that are not supposed to be bought.

“Republican lawmakers do not want to touch this,” Harris explained, “they say, ‘It’s only 1% percent.’ Well, where do you get these numbers? They are being judicious and cracking down on fraud in the Medicaid and the SNAP program, but they don’t want to take that same kind of judicious look at the ESA program.”

One possible reason why they don’t give the same judgment on the ESA program is that many lawmakers actively use the program. He also debunked the theory that it is a balanced ratio of those leaving public schools for the ESA programs.

“It’s not a one-for-one,” Harris said. “The overwhelming majority of ESA users were kids that were already homeschooled, or kids already in private schools; they’re not leaving the public school systems to go to the ESAs. Some are, but it’s not a 1-to-1 basis.”