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Three former Department of Education employees indicted for cheating voucher program

Posted 2/29/24

PHOENIX — Three former employees of the Arizona Department of Education have been indicted for cheating the voucher program of tax dollars to send children to private and parochial schools out …

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Three former Department of Education employees indicted for cheating voucher program


PHOENIX — Three former employees of the Arizona Department of Education have been indicted for cheating the voucher program of tax dollars to send children to private and parochial schools out of more than $600,000.

In an announcement Thursday, Attorney General Kris Mayes said the trio in some cases created “ghost children” with forged birth certificates. In other cases, there were real children, she said, but were adults not in school.

And Mayes said there also were instances where the trio submitted forged paperwork saying the students had special needs, something that entitled them to more than the typical $7,300 voucher.

Mayes, a Democrat, said the fraud was made possible by the fact the Republican-controlled Legislature never provided proper oversight of the program when it allowed the program for “empowerment scholarship accounts,” the formal name for vouchers, to be open in 2022 to all public school students.

That expanded the program from 12,000 children, mostly with special needs, to more than 70,000, the attorney general said, “many of whom were already attending private schools on their parents’ dime before this taxpayer-funded coupon for the wealthy was passed by the Legislature.”

Mayes acknowledged the three employees, all of whom were involved in approving requests for voucher funds, actually had been employed at the agency before the expansion occurred in 2022. Their tenure also predated January 2023 when state schools chief Tom Horne, a Republican and supporter of universal vouchers, took office from Democrat Kathy Hoffman who opposed the move.

The attorney general said, though, her investigators found the start of the fraud pretty much coincides with the expansion.

But House Speaker Ben Toma, the architect of voucher expansion, said the three indicated employees “began defrauding the state well before the passage of universal ESAs.”

Mayes also said the problems were not caught by Horne or his staff.

“Our investigators were tipped off about the case not by the Arizona Department of Education but rather by a credit union who noticed unusually large in-person cash withdrawals and contacted our office,” Mayes said. And she said the employees were not fired until her investigators began to look into the issue.

Indicted were Delores I. Sweet, Dorrian J. Jones and Jennifer Lopez. All three, Mayes said, were in a position to accept and review the requests for vouchers and approved them.

Horne said it is important to note all three were employees he inherited from the Hoffman administration “whose oversight of the empowerment scholarship account was lax.”

“In fact, it was so loose that when I took office, I faced dozens of parents at State Board of Education meetings furious at me for placing more controls on expenses and spending requests.”

That, however, relates to requests for authorization by parents for specific expenses, not the question of fraudulent applications which is at issue here.

Horne also said so far this year he has referred seven instance of suspected fraud to Mayes’ office.

“And, despite her efforts to smear this department, we will continue to do so.”

Toma said it would be wrong to blame the fraud discovered on universal vouchers.

“As we’ve seen in cases involving school districts, the Arizona Health Care Cost Containment System, unemployment insurance, and other governmental entities and programs, criminals invariably seek to exploit systems for personal gain,” he said in a prepared statement.

“Yet the law stands ready to hold them accountable,” Toma said. “I’m pleased to see today’s indictments for fraud from the attorney general, which highlights the effectiveness of the state to identify fraud.”

And Toma took a swat at Mayes for blaming all this on the expansion.

“It’s regrettable that critics of Arizona’s highly popular and successful ESA program are predictably seizing this opportunity to politicize and undermine it,” he said.

Central to all this are the vouchers of public funds to let students attend private and parochial schools.

Approved more than a decade ago, they were specially designed for students with special needs that could not be met in public schools.
Over the years the Republican-controlled Legislature has expanded it, taking in foster children, children of military families, reservation residents and students in schools rated D or F.

The 2022 law made it available to all 1.1 million students attending public schools after proponents, led by Toma, rejected calls for limits, such as an income cap.

Strictly speaking, the amount of individual vouchers is only slightly more than state aid to public schools.

But that does not take into account students who previously were in private schools, with the cost being paid by their parents. And there is evidence to show the sharp expansion is from those students.

That has led to charges by Democratic Gov. Katie Hobbs that the cost of these new vouchers is part of the reason the state is looking at a deficit of $1.8 billion for the balance of this fiscal year that ends June 30 and the new budget year beginning July 1.

There also have been charges the Department of Education is approving expenses for items that have no apparent educational value like ski trips, driving lessons and even a Lego set.

Mayes said Thursday that’s a separate issue than the question of providing dollars for individuals who are not eligible, either because they are adults or they don’t exist at all. And the attorney general said that, aside from the acts of the three former employees, she knows where the blame lies.

“I believe it is high time for the Legislature to get serious about putting some regulations to prevent the fraud that we’re seeing today from happening in the first place,” she said.

What isn’t known, Mayes said, is whether this kind of fraud is more common than just these three individuals.

“That’s what we want to get to the bottom of,” she said. “And I will tell you this: from what our investigators found there are very few controls and very little accountability in terms of analyzing birth certificates at the Department of Education.”

As proof, Mayes displayed one of the certificates submitted for a “ghost” students she said had clearly been torn and manipulated.

Then there are things that should have been obvious, like the fact one of the former employees submitted three certificates that all bore the same date of birth, something she said should have caught the attention of someone in the process — assuming there was proper oversight.

“One of the issues is, does ADE even have the resources right now to analyze those birth certificates?” Mayes asked. “There are legitimate questions about how many of these birth certificates are actually being scrutinized by the Department of Education and what they’re doing to scrutinize them.”

Horne said when he took office in 2023 he hired John Ward, a 19-year veteran of the state Auditor General’s Office to oversee the financial structure of the voucher program. He said Warn is now director of the program.

The attorney general declined to say how the recipients spent the more than $600,000. But she said it appears the funds did not go to actually educating any children but instead were spent on unspecified luxury items, some in the neighborhood of $20,000 to $40,000 each.