[{"_1":2,"_100":-5,"_101":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76,88],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6157852,"mediaKeyId","5463139-273098f79696e25e0631d335413e1899","parentId",5463139,"title","Auditor General presses Arizona Department of Education on ESA risk‑based auditing; ADE cites staffing and tech plans","audioSeconds",1647,"startMs",1359000,"endMs",3006000,"viewUrl","/Search/View?dp=1&key=5463139-273098f79696e25e0631d335413e1899&start=1359&end=3006","thumbnailUrl","https://assets.pipeline.soar.com/5463139-273098f79696e25e0631d335413e1899/thumbnail_1359000.jpg","articleUrl","/articles/6157852/Arizona/Auditor-General-presses-Arizona-Department-of-Education-on-ESA-riskbased-auditing-ADE-cites-staffing-and-tech-plans","mediaUrl","https://secure.pipeline.soar.com/6157852-00a22b0790300d09a89f097e8ab8e543/orig.mp4?Expires=1775343953&Signature=FDnK4-UaBK8ewUenugZo-diU2C4ZJiq-lLE~WeFA2BUVGQ57iEkVIu8fTZ3YfLqzsW2wiGiqxpsGSSpA2NjHYM4OHGxhZJyrwN2Im0Kg-TSYLRI3MBtRFiaaIPs1dE2qm510xYdkXC2WeNIRSUb4yh0i29T02ZYFNkKyLiBjCwcMiYQsTPZZtivR4tuj27X8vL1r4Mb11mgKl4WqteCgp1AfD~4YVPZSrYPCJfHsvX-rtrqjReS7oAmphL9KKNwAumcIWuPOVYOZbykjfRgEDiTZ2oU55I35FO~26OXRPOzctChE2z8e7PJ52-oOa82dsbcURSoOLWMc7rsyCGjBwg__&Key-Pair-Id=KUT5TJCACFTXG","author","Arizona Legislature","date","2025-07-21T00:00:00Z","article","The Auditor General told the Joint Legislative Audit Committee that the Arizona Department of Education (ADE) has not yet completed the consultation required by statute to develop risk‑based auditing procedures for Empowerment Scholarship Accounts (ESAs), and urged ADE to meet with the Auditor General’s team to finalize procedures.

Lindsey Perry, the state Auditor General, told the committee that a law passed last session requires ADE to develop a risk‑based audit approach in consultation with the Auditor General’s office, and that the Auditor General had repeatedly requested such a consultation. \"As of July 17,\" Perry said, \"the department still has not met with my office to develop those risk based auditing procedures or in consultation with my office as required. Therefore, I'm providing this information to you, JLAC, and for consideration of formal direction to my office on how to proceed.\" Perry said her office remained available to consult and complete follow‑up work on prior ESA audits.

John Ward, director of the Empowerment Scholarship Account program at ADE, said the department has been in operational crisis because the program has grown quickly and ADE has limited staff. Ward said the ESA program has roughly 86,400 students enrolled with about 40 staff in the program and that ADE disbursed approximately $869 million in fiscal year 2025. He said ADE moved in December to a risk‑based approach that applies prospective review to purchases above $2,000 and risk‑based sampling for orders at or below $2,000. Ward described the $2,000 threshold as a practical step to keep purchase review queues from overwhelming a small staff while prospective reviews continue for larger orders.

Ward and committee members described ongoing efforts with the program’s financial vendor, Classwallet. Ward said ADE has been pressing Classwallet for a new anomalous‑activity reporting tool that uses artificial intelligence to flag suspicious patterns and identify specific transactions for review. \"Using AI, they will be able to identify anomalous activity that would tip us off. We should probably take a look at this particular account and the spending associated with it,\" Ward said. He said Classwallet has developed similar functionality for other clients and ADE is pressing for an Arizona rollout.

Committee members pressed ADE about application and purchase processing times, account balances and funds that sit unused in ESA accounts. Ward said ADE can provide more granular reporting—such as fund balances by eligibility category and inactive accounts—and that the department would work with Classwallet to compile analytics for the committee.

Auditor General Perry and ADE agreed to a request from committee leadership to meet and to begin formal consultation. Committee Chair Finchem asked for a status update within two weeks on whether ADE and the Auditor General had conferred and how they plan to finalize the risk‑based procedures.

The committee also heard that ADE looks at many orders daily and that purchase reviewers check for misclassified items (for example, purchases labeled \"tuition\" that better fit another category) and for other potential misspending. ADE said some balances—money in ESA accounts for students not currently participating—become eligible for sweep only after statutory notice and waiting periods; ADE staff identified about $12 million available for immediate sweep linked to students who were found to be enrolled in public schools without resolving the eligibility question.

The committee directed ADE and the Auditor General’s office to coordinate on next steps and to report back to the committee as the consultation and implementation process moves forward.","mediaType","Video","parentTitle","07/21/2025 - Joint Legislative Audit Committee","oneSentenceSummary","The Auditor General told lawmakers ADE has not yet completed statutorily required consultation to develop risk‑based auditing procedures for Arizona's Empowerment Scholarship Accounts; ADE said it has adopted a $2,000 review threshold and is pursuing automated, AI‑driven analytics with its vendor.","taxTitle","2025 Legislature Arizona, Arizona","taxId",78572,"location","Arizona","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6157858,"Tolleson Union High School District draws scrutiny over land deals, lease to Isaac and governance as residents urge audits",1178,1865000,3043000,"/Search/View?dp=1&key=5463139-273098f79696e25e0631d335413e1899&start=1865&end=3043","https://assets.pipeline.soar.com/5463139-273098f79696e25e0631d335413e1899/thumbnail_1865000.jpg","/articles/6157858/Arizona/Tolleson-Union-High-School-District-draws-scrutiny-over-land-deals-lease-to-Isaac-and-governance-as-residents-urge-audits","https://secure.pipeline.soar.com/6157858-9e4dc3b0d110d354b7b70420f1474d61/orig.mp4?Expires=1775343953&Signature=QEV~DUthXAsEzGy4UjEe-N7oxC0eljKt3dgXBidLap2wV8wQ-cXOIyZu0phxARbKItV9N02F3-A~2MNf08PVBTy83o~JUL68KX1zzW8N3PGOGFZltKLKLyPyaf1UVGDJDlKprvuvvADKfZxa6UXZOC~Fj3ETrsL4m80dpxs26RPUrWG9KqpkHlIj8zJoGztmW8H-M-Zyx9Vhd4dtrXMfGJ5TBhqkTVmzJzn5Rn5UTCdj5mQUiTQik-r~jjlt6ziXShhci-FxKmwapusxIoFz8~hw2mJYsS36lYdm2tsWjvFB3OBCAlRLsg6U6vxDUe659e4sTtmrVrVZv1cTgIBtZg__&Key-Pair-Id=KUT5TJCACFTXG","Tolleson Union High School District officials defended an array of financial and development decisions on the committee floor while lawmakers and community members pressed for greater transparency and possible forensic review of district governance.

Jeremy Kayas, superintendent of the Tolleson Union High School District, gave a detailed presentation to the Joint Legislative Audit Committee on the district’s strategic plan, recent academic trends, teacher pay increases and multiple real‑estate transactions the district has pursued in recent years. Kayas described upgrades in district letter grades, a sharp rise in teacher and staff compensation and a series of property deals the district says will generate revenue and support career‑technical education.

But several committee members and many public commenters challenged the choices. Representative Gress, Representative Carbone and others questioned a $25 million lease‑leaseback Tolleson approved to help the Isaac Elementary School District, asking why Tolleson used reserve funds and whether the district had sufficient safeguards. Kayas said the structure is a five‑year, 6% arrangement with a final balloon payment and that Tolleson expected the transaction to generate about $7 million over the term compared with leaving cash idle. He said the deal was vetted by attorneys and that the district used a portion of its budget balance to assist Isaac as an emergency liquidity measure; the receiver for Isaac had considered alternatives and the district reduced the term to five years because of statutory limits when a government entity is on both sides of a deal.

Kayas also described a Tolleson ground lease for 12 acres intended for an affordable‑housing development: a $4 million up‑front payment, annual rent of $250,000 beginning in year three with 3% escalators, and a developer plan for about 331 units with rents reported to be roughly 20% below market (range cited $1,400–$1,758 monthly). The district also discussed land purchases: approximately $7.8 million for nearly 12 acres adjacent to the Loop 101 for a 500‑student CTE campus to be done in partnership with West MEC, and acquisition of about 6.96 acres for a new district office (the plan includes repurposing the existing district office for school programs).

Those transactions and a pending $125 million construction bond produced heavy questioning. Critics said voters and taxpayers should have received clearer disclosures about potential revenue uses; several residents and civic groups said board actions were taken with insufficient public notice and urged a forensic audit. \"We are disgusted with the leadership at the Tolleson Union High School District,\" said Adan Morado, chair of the Tolleson Community Coalition. The committee also heard from Citizens for School Accountability and a group calling for curriculum and governance improvements.

Community speakers and some legislators raised conflicts‑of‑interest concerns tied to Superintendent Kayas’s past and ongoing consulting work. Kayas said he has disclosed his consulting relationships to the district and that he has not billed Isaac School District and has not been paid for work on Isaac; he added that some staff members have performed occasional consulting work but said payments go to those staffers directly and that governing‑board evaluation of his work found no interference with his superintendent duties. Several members of the public and some legislators urged more complete disclosure and asked that the Auditor General assess potential self‑dealing.

Other governance concerns focused on meeting practices: critics told the committee a Tolleson board moved a bond‑approval vote into a special meeting with what some called minimal public notice and reduced opportunity for public comment; there were also allegations that the district limited or attempted to limit public commentary at board meetings. Multiple residents reported being banned or otherwise discouraged from speaking at meetings; one resident said the board had adopted a policy requiring prior approval by the board president to approach the dais for public comment.

Public‑safety and school policing issues also arose. Chief Rudy Mendoza of the Tolleson Police Department and the city manager, Reyes Medrano Jr., discussed a campus incident involving a school resource officer and said the department concluded the officer’s use of force in that episode was appropriate; the district and city described a strained relationship over SRO coverage, and Kayas said the district planned to maintain SSOs on campus pending any changes.

Several witnesses, including former Tolleson administrators and curriculum experts, told the committee the district lacks a board‑adopted, teacher‑developed curriculum and argued that resources purchased or adopted by the district have not been implemented through established curriculum policy. Dr. David Briggs, an educator and consultant, told lawmakers that an outside review (a WestEd engagement) found gaps and that the district has spent money on curriculum supports without following the board‑adoption processes required by district policy.

Committee members said they will consider requesting a forensic audit. Chair Finchem said he and Vice Chair Gress expected to coordinate with the Auditor General to design an appropriate audit and asked the Auditor General’s office and the department involved to meet to coordinate next steps.","Tolleson Union High School District officials defended strategic gains and several land and financing deals before the Joint Legislative Audit Committee, while lawmakers and residents raised concerns about a $25 million lease to Isaac Elementary, disclosures on a $125 million bond, real‑estate leases and possible conflicts of interest.",{"_33":89,"_35":36,"_37":38,"_39":90,"_41":91,"_43":92,"_45":93,"_47":94,"_49":95,"_51":96,"_53":97,"_55":56,"_57":58,"_59":98,"_61":62,"_63":64,"_65":99,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6157862,"Auditor General: Former Town of Parker employee indicted after alleged $173,000 embezzlement",1117,53000,1170000,"/Search/View?dp=1&key=5463139-273098f79696e25e0631d335413e1899&start=53&end=1170","https://assets.pipeline.soar.com/5463139-273098f79696e25e0631d335413e1899/thumbnail_53000.jpg","/articles/6157862/Arizona/Auditor-General-Former-Town-of-Parker-employee-indicted-after-alleged-173000-embezzlement","https://secure.pipeline.soar.com/6157862-99d58217c311de8459a9f8f154b242c3/orig.mp4?Expires=1775343953&Signature=Ftj8gYw~FK1pCepgnzf79uw3p-2V5oQT6cEFxjxRvPUkbDgS74QilUsOfHKtshlmCI1cZ91flt0KenzZOUgaw2XzvgrqyU65nR2JawXJWBfBDsi0WxantquUEdMXPn07~Ad06LiU~CdTrnsQtxhBGRTStk3fZ5amcztooGbFcw6CViwv6YeU2wXPYpIxKQ7nwdKoQakh1FuIjv7n76gsAHxu1Aa05M8N-vHzl-4tTmQT0-igGyiv6h3w0UPsKhVwunXRDGbLRqYID2qQWOfL6Ceyk2rAt960ZEku8fYISmSImjuBhQ2Hkdaiwyt-YRi6e9KC1YYDr3ckWwUE3A1uoQ__&Key-Pair-Id=KUT5TJCACFTXG","The Office of the Auditor General reported that a former Town of Parker office specialist has been indicted on nine felony counts after an audit and financial investigation found alleged embezzlement of town funds.

Gretchen Augustine, director of the Division of Financial Investigations for the Auditor General’s office, told the Joint Legislative Audit Committee that the investigation covered the period from February 2021 through October 2021 and found several schemes that together involved more than $173,000 in town funds. \"We conducted a financial investigation and found that from February 21 to October, the former office specialist may have embezzled over a $173,000 of town monies when she admittedly issued unauthorized checks to herself and others, kept cash that should have been deposited into the town's bank account, and made personal purchases using town credit cards,\" Augustine said. She added the office submitted the report to the Arizona Attorney General’s Office, which led to the indictment.

The Auditor General's presentation described three related schemes: (1) issuance of payroll checks that the office specialist allegedly forged and negotiated or sent to associates; (2) keeping cash receipts totaling $9,768 that should have been deposited into town bank accounts; and (3) personal use of two town credit cards for nine purchases totaling $4,690, including electronics and designer cologne. Augustine said the largest scheme involved six unauthorized payroll checks totaling about $180,000, of which approximately $158,000 were negotiated and $21,000 were not negotiated.

The report recounts that the employee allegedly used forged signatures and omitted check copies from accounting records, and that the town manager at the time failed to secure payroll check stock and to perform reconciliations of payroll and deposit records. The Auditor General's office also reported the employee may have participated in a fraudulent Paycheck Protection Program application, receiving approximately $20,000 in PPP funds; that matter was referred to the Attorney General, which the Auditor General said was assessing whether to involve federal authorities.

Augustine said the Auditor General issued seven recommendations to the town to strengthen controls over public funds, including separation of duties, written credit‑card policy and independent, periodic unannounced reviews of financial records. Town officials reported actions taken since the investigation: outside reconciliation of payroll to account statements, periodic unannounced payroll reviews by the town manager, dual custody and lockboxes for cash receipts, and new credit‑card receipt and purchase‑order procedures.

The Auditor General emphasized the case remains in the judicial process: \"Although the office specialist has been indicted, this case has not been adjudicated and is still moving through the judicial process. Therefore, I am limited to the information I can present only to the information in our June report,\" Augustine said.

The Auditor General provided the committee a copy of the Town of Parker financial investigation report; the committee packet lists that report as Tab 1, Attachment A.

The committee asked follow‑up questions about staffing and local controls. Augustine said the division handles public‑entity investigations only and provides its confidential findings to county attorneys or the Arizona Attorney General for prosecutorial consideration. She also said the division’s public findings are issued after a prosecuting agency files an indictment or complaint and that many of the office’s investigations have led to indictments and convictions historically.

The committee requested the Auditor General provide any additional details the office may release once the case progresses through the courts.","The Office of the Auditor General reported that a former Town of Parker office specialist admitted issuing unauthorized checks, keeping cash receipts and using town credit cards for personal purchases; the case led to a nine‑count felony indictment and recommendations for internal control changes.","actionData","errors"]

Article not found

Auditor General presses Arizona Department of Education on ESA risk‑based auditing; ADE cites staffing and tech plans

Tolleson Union High School District draws scrutiny over land deals, lease to Isaac and governance as residents urge audits

Auditor General: Former Town of Parker employee indicted after alleged $173,000 embezzlement