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 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 last September found that out of 385,000 ESA purchases the department reviewed, nearly 84,000 were deemed unallowable. That’s just more than 20 percent.

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.