MEMO

TO: ESA families

CC:
Date: May 1, 2017
RE: Petition to ADE on ESAs and the handbook

On April 11, the Arizona Department of Education responded to the Goldwater Institutes letter
requesting that they adjust the ESA handbook to align with state law. Their responses are below,
and the emphasis (underlined phrases) is mine.

If you have any questions on the material below, please let me know.

p. 4: Applicants must spend a portion of quarterly funds each quarter and at least 25% of
the annual award by the end of the contract year.

o Department Response: The Department will revise this section to reflect the
requirement of A.RS. 15-2402(8)(1) that the ESA holder must spend merely
a portion of the ESA funds annually.

p. 5: policies are subject to change any time during the contract year without notice or
warning.

o Department Response: It is unclear what you are citing here as the Handbook
states, and has stated since at least August 2016, that the Department will
provide notice of any policy changes and the effective date of any change.
[Note that SB 1431 also requires the department to provide notice to families
when the agency changes the handbook.]

p. 7: the Department may request address verification at any time, and require applicants
to submit utility bills; failure to do so may result in termination from the ESA program.

o Department Response: Pursuant to A.R.S. 15-2401(5) and (7) it is a

requirement for the "parent" (ESA applicant) and "qualified student" to be
residents of Arizona to participate in the ESA program. The Department will
revise the address verification procedures to include any of the methods that
may be used to verify residency for attendance at a school district pursuant to
Department guidelines adopted pursuant to A.RS. 15-802(8)(1).

p. 10: Uniform expenditures cannot exceed $800 per school year.

o Department Response: The Department will remove the dollar limit on uniform
expenditures.

p. 15: The Department will disallow expenditures if, in its judgment, the costs of
materials for extra-curricular subjects far exceeds those for the academic curriculum

1
 so that 60% of purchases must be for core/academic subjects.

o Department Response: Pursuant to A.RS. 15-2401(8)(1), an ESA recipient is

required to use a portion of the ESA monies to provide an education in at least
the subjects of reading, grammar, mathematics, social studies, and science.
The Department will remove the percentage requirements but reserves the
right to terminate an account if the ESA holder is not expending any ESA funds
on core academic curriculum.

p. 16: Applicants must spend a reasonable amount on supplemental materials, and

should obtain 2-3 quotes before buying the materials.

o Department Response: The Department will remove the language

recommending that ESA holders receive multiple quotes before buying
supplemental materials. The Department reiterates, however, that pursuant to
A.R.S. 15-2401(2) only supplemental materials required by the curriculum
will be approved for ESA expenditures.

p. 16: The cost of supplemental materials should not exceed the cost of the curriculum.

o Department Response: The Department will remove this language.

p. 17: Applicants must provide an education to the child before using unspent funds
towards a Coverdell Education Savings Account.

o Department Response: The Department will remove this language.

pp. 25 & 28: To remain eligible for renewing an ESA contract, the applicant must have
spent 25% of annual funding.

o Department Response: The Department will remove this language to make it

consistent with the changes specified above regarding spending ESA funds
annually.

ADEs closing paragraph in the letter: The Department is willing to discuss any of the issues
raised above with you if you should have any questions. The Department does not believe
that costly, time-consuming litigation is in the best interests of either party or the ESA
program participants. The Department will reissue the Handbook within the next several
weeks and provide notice to all ESA holders regarding the changes specified above.