Big costs, little oversight for voucher program

Indiana spent over $131 million last year on tuition vouchers for students to attend private K-12 schools. But the state provides almost no fiscal oversight for the voucher program, according to a recent report from the Center for Evaluation and Education Policy at Indiana University.

Schools that participate in the program aren’t audited. There’s no public reporting or accounting of how they spend the public money they receive. It’s hard even for scholars to track down detailed data that would give a full picture of how the program operates and what it costs taxpayers.

And the lack of oversight and accountability is just one of several ways in which the Indiana program differs from established school voucher programs in Wisconsin, Ohio, Arizona, Louisiana and Washington, D.C., the report finds. Other differences include:

  • Indiana is unusually generous, offering vouchers to more categories of students.
  • Its treatment of special education is unusual, letting parents of special-needs students with vouchers decide if the private school or local public school will provide services.
  • Budgeting is opaque, with funding coming from overall education appropriations rather than a separate line for vouchers in the state budget.

CEEP’s Indiana voucher report is tied to a larger report, “Follow the Money: A Comprehensive Review of the Funding Mechanisms of Voucher Programs in Six Cases,” released last week by the IU research center. Authors are research associate Molly Stewart and graduate research assistant Jodi Moon.

The most significant difference about Indiana’s program, Stewart said, is the number of students who receive vouchers without ever having attended a public school. Over half of them.

When the state legislature created the program in 2011, advocates argued it would save the state money because vouchers would be less expensive than the cost of public schools. But that ceased to be the case as lawmakers opened the program to more students who had never attended public schools and probably never would.

It became public support for private schools, over 90 percent of which are religiously affiliated schools. An Indiana Department of Education report last summer put the net cost at up to $53.2 million.

“It’s definitely costing the state money,” Stewart said. “This is new state spending (for voucher students who never attended public schools), and all of it is going to private schools, which have very little oversight from the state.”

The state education department’s annual voucher report – not required by state law – provides a good deal of information about how much voucher money is spent and which schools receive it. But because of the multiple ways students can qualify and the varied costs of individual vouchers, it’s nearly impossible to calculate the impact of different aspects of the program.

Of the six voucher programs included in the CEEP report, only Indiana and Ohio have no fiscal accountability requirements for voucher schools and don’t require audits. And Ohio reports considerably more detailed financial data about its program, the authors said.

A 2014 analysis by the Indiana Non-Public Education Association found that over a quarter of voucher schools were overpaid because they miscalculated what the state owed them. The schools returned nearly $4 million to the state. If there have been more recent mistakes, we don’t know.

“There are issues everywhere,” Stewart said. “If you don’t look for them, you won’t find them, which is why public reporting and transparency are so important.”

In the area of special education, Indiana lets parents decide whether the local public school district or the voucher school should provide services, as long as the voucher school says it’s capable.

“However,” the report says, “there are no minimum qualifications or oversight regarding the private school’s ability to provide necessary services.” If the school claims it’s able to provide effective special education, it gets the extra money allotted for students with special needs, which could be thousands of dollars.

Moon and Stewart said budgeting is one of the voucher program’s biggest deficiencies. With no cap on the number of vouchers that can be awarded, spending is open-ended. A separate budget line – or at least an estimate of likely voucher costs – could make budgeting more transparent.

In the legislature’s 2015 session, Democrats proposed including a separate budget line for estimated voucher costs. But the Republican super-majority rejected the idea.

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2 thoughts on “Big costs, little oversight for voucher program

  1. Pingback: Study confirms voucher programs discriminate | School Matters

  2. Pingback: McCormick: “irresponsible” not to review voucher program | School Matters

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