Little requests audit of possible improper purchases with tax dollars

Idaho Gov. Brad Little has requested a “full financial audit” of the troubled Empowering Parents education microgrant program, amid signs that taxpayers might have gotten the bill for thousands of improper or dubious purchases.

“I am offering the Division of Financial Management to contract with an independent third party to conduct a full financial audit of the program and status of eligible vs. ineligible purchases,” Little said in a letter Friday to State Board of Education leaders. “This will help us ensure we know the full scope of the situation and what has been reimbursed through the online marketplace relative to applicable laws.”

Little wants the State Board to move quickly. He wants the board to submit an “action plan” by Friday — and explore whether the state can “recoup” taxpayer dollars that covered improper purchases. The State Board is expected to take up Little’s request at its meeting Wednesday.

Little’s audit request casts a growing shadow over one of the governor’s top education priorities — a $50 million initiative designed to help families cover out-of-pocket education costs, such as computers or learning materials. The microgrants max out at $1,000 per child or $3,000 per household, and are geared toward low-income and middle-class households.

But the State Board launched a review of Empowering Parents in late April, after some program purchases raised red flags with board staff. The board has said some of the grants covered a host of improper purchases — such as TV sets, smart watches, clothing and household cleaning supplies.

The review is ongoing. Board staff have reviewed more than 70% of Empowering Parents purchases, staff said in a memo to board members, prepared in advance of Wednesday’s meeting.

While 80% of these reviewed purchases appear to be legitimate, 7% of purchases appear to fall outside the law, and another 13% are questionable. “More information has been requested,” board staff wrote, “in order to determine eligibility.”

The board staff memo does not put a price tag on the improper or questionable purchases. But it appears that thousands of Empowering Parents purchases could be improper, or questionable.

As of May 15, the state said it has processed microgrants for 49,429 students, coming to slightly more than $49.2 million.

On May 2, Idaho Education News filed a public records request seeking State Board documents outlining questionable Empowering Parents purchases. The request covered documents dating back to Feb. 1 — around the time when State Board staff began raising questions about purchases.

Idaho EdNews received records a week later and submitted a detailed list of written questions on May 16. The State Board has not responded.

“In consultation with the governor’s office, board staff will not comment, or answer questions related to the review until it is complete,” State Board spokesman Mike Keckler said in an email Monday.

The board’s review could be finished in the next couple of weeks.

Board staff are scheduled to report their findings July 10 to a parents committee that is spending the summer reviewing the Empowering Parents program. Appointed by Little and legislative leaders, the committee met for the first time earlier this month.

In his request for an audit — sent to State Board President Linda Clark and board executive director Matt Freeman — Little does not hide his displeasure.

“Only recently, my staff first received specific details from (State Board) staff on identified purchases that may not have been permitted,” Little wrote. “I expect all agencies within my administration to communicate early and often on matters of this magnitude.”

In his request for an “action plan,” Little wants the board to identify “all oversight efforts, safeguards and other steps” used to prevent improper purchases. Little also wants the State Board to review all contracts, “to identify opportunities to recoup funding from contractors” for any ineligible purchases.

That might be impossible. The State Board has said the state might have no way to recoup money — either from Primary Class Inc., its Empowering Parents contractor, or from the local and national vendors that sell products through the Empowering Parents online marketplace.

Using $50 million of federal coronavirus aid, Idaho went live with Empowering Parents last fall. The state attempted to build safeguards into the system. Parents were required to make purchases through an online marketplace, and purchase items only from state-approved vendors. Parents never received money directly, and instead used a digital wallet to cover their costs.

But the state also hired a relatively inexperienced contractor — the New York-based Primary Class — to oversee the program and the online marketplace. Primary Class had never run a statewide program of this type, yet stood to receive close to $1.5 million to oversee Empowering Parents, Idaho Education News reported in September.

Primary Class has a two-year contract with the state, running through Aug. 8, 2024, to see through the $50 million, federally funded grants. But the company’s long-term status is uncertain, as Idaho plans to use $30 million a year in ongoing state money to make Empowering Parents a permanent program. The state will seek a new round of bids later this year, Keckler said.

This story was originally posted on IdahoEdNews.org on June 12, 2023.