Education Freedom Account Administrator Balks at Cooperating on Performance Audit

By GARRY RAYNO, InDepthNH.org

CONCORD — The Children’s Scholarship Fund NH is holding up work on a performance audit of its management of the Education Freedom Account program, a legislative committee was told Friday.

An audit of the Department of Education’s oversight of the program is moving forward, but the Legislative Performance Audit Oversight Committee decided in May to expand the audit to include a review of student residency and academic attainment which requires the cooperation of the scholarship fund who maintains those records and to date has refused to share them with auditors.

At Friday’s meeting, Christine Young, Director of Audits for the LBA, said her office drafted a memorandum of understanding that outlines the cooperation needed among the LBA, the Department of Education and the CSF. The education department has agreed to the MOU, but the CSF has expressed some concerns and has had several scheduled meetings delayed, Young said.

She said a meeting of all the parties involved, the DOE, CSF, LBA and Department of Justice, is scheduled prior to Thanksgiving, but noted she could not say how long it will take to reach agreement on the MOU or what it might include.

Because of the delay, her office has decided to continue working on the audit that is now ongoing concerning the department’s management of the program which they hope to present to the Joint Legislative Fiscal Committee in the Spring.

Several Democratic members of the committee expressed frustration with how long it has taken to reach an agreement that would allow the work to go forward.

Rep. Lucy Weber, D-Walpole, said these are taxpayer dollars and legislators follow these dollar to the recipients. The delay has been frustrating in the amount of time it has taken to arrive any kind of result, she said.

“I look at this matter with some mystification as to why this whole procedure has to be gone through,” she said. “It is a huge imposition on the taxpayers when we have been stonewalled about where taxpayers’ money is going and how it is being used.”

Weber noted the committee initially heard the CSF was willing to share the data, but the Department of Education was unwilling to cooperate, and now the department is willing and the CSF is unwilling to cooperate.

Sen. Suzanne Prentiss, D-West Lebanon, asked if such an organization that does business with the state would readily supply the information or is this situation unique?

Young said the arrangement with CSF to administer and manage the program is very unique.

She said the law that was passed establishing the program created a bit of a barrier that makes it difficult to obtain the records of a non-state entity.

In order to do so the LBA needs the cooperation of the DOE, she said. Initially the department (former Commissioner Frank Edelblut) was resistant to cooperate, but there is new leadership at the department that is more willing to work with her office to obtain the records they need to do the work for the expanded audit scope.

“The records we need for that work are not in our possession,” Young said. “In order to obtain those records we need cooperation to perform the work the committee instructed us to do.”

Sen. Cindy Rosenwald, D-Nashua, said when she first looked at the contract with CSF, the language said the data belongs to the state and they should be able to get whatever data is needed.

Young said there have been different interpretations and when the contract was renewed language was added that further limited the state’s access to those records.

She said the CSF interpretation is that the only records that are the state’s are those that come from the state, while the records held by CSF are not considered records of the state.

“There is still disagreement over that topic and our other audit touches on that topic as well,” Young said.

Weber asked if the second contract was approved by the Executive Council and she was told it was.

Weber questioned why they needed a MOU to retrieve the data, and Young said given the resistance in the past to share the data by CSF, “once we start work, we do not want to hit roadblocks and be able to actually do the work under the terms all have agreed to.”

By law, the performance audit of the EFA program was required after the third year of the program, but from the beginning of the audit process, access to the necessary data has been denied first by the DOE and then by CSF.

This is the sixth year of the program which now has 13,151 students enrolled (according to the CSF NH website) with an estimated cost of more than $55 million.

The program began with 1,635 students costing $8 million. The average per pupil grant has been about $5,000.

The vast majority of the students enrolled in the program did not leave public schools, but were already attending religious or private schools or homeschooled when they joined the program.

The program was originally sold as an option for low-income parents to provide an alternative education program if their child did not do well in the public school environment.

Instead the vast majority of the money for the program goes to tuition payments to religious and private school students and to homeschool costs.

At the end of the school year, the state will have spent nearly $190 million on the program.

At the same time, the state has reduced funding for public schools by phasing out the hold harmless grants begun more than 15 years ago when a substantial change was made in the education funding formula causing many districts to lose significant state aid.

The student population has declined over the years, but many districts continued to depend on the grants for their schools’ costs.

During the 2025 legislative session, lawmakers removed an earnings cap on the EFA program while capping the enrollment at 10,000 students. Last school year more than 12,000 students were enrolled in the program due to special exemptions including being in the program in prior years.

Because the cap was hit, the program this year grew by 25 percent to 12,500 students, and again the cap was hit which will result in 25 percent more students being eligible in the upcoming school year.

Garry Rayno may be reached at [email protected].

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