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Lawmakers want to audit N.H.'s new education freedom account program in 2023

A yellow school bus
Dan Tuohy
Among other things, the plan would require auditors to review the demographics of the students using the education freedom account program, and compare their circumstances the year before and after the program launched.

House and Senate lawmakers have passed legislation requiring a performance audit of the education freedom account program in 2023 in a rare point of bipartisan agreement over a divisive new initiative.

In a unanimous voice vote May 5, the Senate approved House Bill 1135, which would require the state’s legislative budget assistant to examine how well the Department of Education is monitoring who gets access to the program, what the funds are spent on, and how public schools are reimbursed.

Passed in the state budget in 2021 and launched that fall, the education freedom account program allows income-eligible parents to take state funds that would ordinarily follow their child to public school – generally between $4,000 and $7,000 per year – and use them for private school or home-schooling expenses.

The program, which is available to families making up to 300 percent of the federal poverty level, or $83,250 for a family of four in 2022, is administered by a private nonprofit organization that contracts with the state, the Children’s Scholarship Fund.

HB 1135 would require the legislative budget assistant to review the program’s performance in: determining whether parent expenditures are acceptable; assessing participants’ initial and ongoing eligibility; and finding and reclaiming improper expenditures or payments.

The audit must examine how well public schools are reimbursed with the program’s “phase-out grants,” which provide limited relief to school districts for the first few years after a student leaves and takes an EFA, according to the bill.

The bill also requires auditors to review the demographics of the students using the program, and compare their circumstances the year before and after the program launched.

Supporters of the EFA program, who include Gov. Chris Sununu and Department of Education Commissioner Frank Edelblut, have said it levels the playing field for lower-income families who are not satisfied with their public school by providing state money for different educational methods.

But Democrats and other opponents have argued that the program improperly diverts that money away from public schools, and warn it could lead to local school budget crunches and strain state education funding.

HB 1135 comes after other attempts by Democrats to rein in or even repeal the EFA program have been defeated by Republican House and Senate lawmakers. But the audit bill has moved ahead with bipartisan support.

Rep. Sallie Fellows, a Holderness Democrat, argued the audit was necessary because the structure of the program – a nonprofit distributing state funding and determining eligible families and expenses – is unusual.

“We need as much information as possible to predict how much money we should put into the budget for this program,” she testified at a Senate hearing in April. “This will help ensure the state funds are being properly managed.”

The Senate-passed version of the bill moved the effective date from June 2023 to October 2023. The tweaked bill is heading back to the House this week for a final vote.

New Hampshire Bulletin is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. New Hampshire Bulletin maintains editorial independence. Contact Editor Dana Wormald for questions: Follow New Hampshire Bulletin on Facebook and Twitter.

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