Despite law requiring legislative review, Department of Education has erected roadblocks

By Sarah Donovan, Granite State News Collaborative

New Hampshire legislators and public education advocates say they’re increasingly concerned that financial information about the state’s Education Freedom Account program is being hidden from public view.

Since its inception in 2021, the taxpayer-funded voucher-like program has distributed $44,918,979 to families sending their children to private schools and other alternatives to their local public schools.

A bill signed into law by Gov. Chris Sununu in July 2022 (House Bill 1135) requires the Office of the Legislative Budget Assistant — an arm of the state Legislature — to complete a performance audit of the N.H. Department of Education’s operation around the program, which a third party runs through a contract signed with the education department. 

Under the bill, which took effect in October 2023, the audit is supposed to review the eligibility of participants and the program’s expenditures program, and to identify and recover possible ineligible reimbursements. Also to be audited are the “procedures and controls” for disbursing the money to the Children’s Scholarship Fund, and demographic and geographic data about students who were in the program in the 2020-21 school year. The New York-based Children’s Scholarship Fund is the third-party contractor that administers the Freedom Accounts.

Legislators on the House-Senate Joint Legislative Performance Audit and Oversight Committee, meeting March 18, voiced frustration with the lack of an audit. At the meeting, officials of the Office of Legislative Budget Assistant notified the panel that they’d been unable to obtain the information needed to complete the audit that the law requires. 

At the meeting, as reported by New Hampshire Bulletin, the Office of Legislative Budget Assistant said it reached out to the education department in January to begin the audit process. However, the department said it did not have access to the data needed for the audit, because the Children’s Scholarship Fund is a private contractor, not a public agency. That opinion was backed by a ruling from the state attorney general’s office.

The legislative budget agency said it then reached out independently to the Children’s Scholarship Fund without consulting the education department, and the fund’s officials said that they could hand over the data after receiving approval from the education department. Shortly after that, the Children’s Scholarship Fund sent a follow-up letter to the budget agency, stating it could not share the data the agency had requested, New Hampshire Bulletin reported. 

State Sen. Cindy Rosenwald, D-Nashua — a member of the larger Joint Legislative Fiscal Committee, which oversees the Office of Legislative Budget Assistant and has discretion to investigate any matters that relate to state expenditures — said Education Commissioner Frank Edelblut told the legislative budget assistant it was unconstitutional for it to reach out to the Children’s Scholarship Fund, because the agency is connected to the Legislature and lacks authority to do so. Edelblut’s opinion was backed up by an opinion issued by the attorney general’s office.

Nevertheless, Kimberly Houghton, the education department’s communications administrator, told the Granite State News Collaborative, “The New Hampshire Department of Education continues to cooperate with the Office of Legislative Budget Assistant as it proceeds with the audit of the Children’s Scholarship Fund. Our agency welcomes the ongoing process to provide accountability and transparency for Education Freedom Accounts.”

Houghton did not clarify what the budget office can audit in regard to the education department, or how the audit would violate student privacy laws, cited among the reasons the information could not be provided to the budget office.

Christine Young, director of audits for the budget office, stated in an email that “in accordance with longstanding practice, our Office does not comment on ongoing audits.”

‘Defying the Legislature’

The failure to get a complete financial picture of the Education Freedom Accounts program has frustrated some lawmakers, including Sen. Debra Altschiller, D-Portsmouth.

“The commissioner of education …  is defying the Legislature. That’s what's happening,” Altschiller said.

Like Rosenwald, Altschiller is a member of the Joint Legislative Oversight Committee, and at several meetings of that committee, she has questioned the operation of the Education Freedom Accounts program, including the sudden disappearance of financial information on the state education department website that was once public. The information included a report listing how much money each vendor involved in the program has received. 

At an April 15 meeting of the committee, Altschiller asked Caitlin Davis of the education department why the information was removed from the agency’s website.

Davis replied, “The CSF is not required to provide that to the Department of Education, and while we’ve had it on the Department of Education in the past, it is not specific Department of Education data, and so we removed that from our website because of the number of informational requests we get about that that we don’t have additional information we can provide.” 

Davis said that if people have questions, they can contact the Children’s Scholarship Fund. 
Also at the meeting, Altschiller asked why the Children’s Scholarship Fund contract differs from contracts with other state departments. 

For example, she said, the Department of Health and Human Services —  the largest department in state government — “hires a plethora of third-party contractors,” Altschiller said, and information about those contracts is available. 

In an interview with the Granite State News Collaborative, Altschiller specifically cited Waypoint, a nonprofit organization that provides a range of social services through Health and Human Services. The nonprofit deals with highly sensitive information but can satisfy the requirements of an audit, she said, and it is not unreasonable to require an audit for a state contract that shows where the money is being spent and if it is being used effectively. 

She said she has received no answers to the questions she’s asked at Joint Legislative Oversight Committee meetings — answers she was told would be provided at further meetings but still has not been provided. Altschiller said that she anticipates as much obfuscation at future meetings.

“The only people asking questions are people in the Joint Legislative [Oversight] Committee,” she said, and they are not getting adequate answers.  “The EFAs are a black hole. They’re not required to give us any information, and don’t,” Altschiller said.

Some information available

Some information is available to the public on the Children’s Scholarship Fund New Hampshire website, including the gender demographic of students in the program, a breakdown of the number of students by grade level, the number of graduates from the program, other “exits” from the program and public school re-enrollments. Financial information is also available on the website — expenditure reports, an independent audit, and a parent handbook that outlines qualifications for the program, among other data. Also provided is the number of “switchers,” students who previously went to public school and are now in the EFA program. 

All of that general information can be found on the 2023 Education Freedom Account Financial Fact Sheet, as well as under the EFA Reporting and Fact Sheets on the Children’s Scholarship Fund NH website.

What is not included is the number of “non-switchers” taking part since the program's inception. “Non-switchers” are students who were already in a private school and are now receiving Education Freedom Account grants.

The program is open to any student who is a New Hampshire resident and is eligible for enrollment in a public elementary or secondary school, and whose annual family income is at or below 350% of the federal poverty level, or about $109,000 for a family of four.

The Children’s Scholarship Fund’s NH website also contains a 2022-23 EFA Vendor & Category Spending Data report that includes an itemized list of the amounts each private school and other vendors received during the 2022-23 school year. 

Who has access to the data?

Since certain information is contained on those websites, it’s unclear why the education department has not given the Office of the Legislative Budget Assistant the information it is seeking.

The Children’s Scholarship Fund 2024 contract with the state says it “shall provide available information in the form of data, reports and written and verbal testimony as requested by Education Freedom Savings Account Legislative Oversight Committee, State Board of Education, the NHED, or Parent and Education Service Provider Advisory Commission within 45 days of the request.”

The contract states that this requirement corresponds with governing federal and state laws regarding student data privacy. 

Kate Baker Demers, executive director of the Children’s Scholarship Fund NH, said the budget agency was seeking personally identifiable information and the education committee told the agency it wouldn’t provide families’ tax returns.

“They [the Office of Legislative Budget Assistant] were still working on the scope of the audit during that time of discussion when the commissioner told them they couldn’t have a piece of this from us — the tax returns,” said Baker Demers. “And so people took that to mean they couldn’t audit the program, which is not true. 

“One, we already audit the program. And two, they can definitely audit the Department of Ed’s part of the program. And then if the Department of Ed needs something, they can tell us to give it to them. 

“But for example, if we had to give them tax returns, they’d have to be redacted, because there’s privacy laws that tell me I have to do things with people’s private information, right? For example, I can’t give you a list of students that has their names on it, right? The student privacy laws would prohibit me from doing that,” said Baker Demers. 

‘The public has a right to know’

However, Gregory Sullivan — an attorney who specializes in media law, is president of the Manchester-based law firm Malloy & Sullivan, and is president of the New England First Amendment Coalition — said that he’s never seen a case similar to the Children’s Scholarship Fund audit argument. He’s been in the legal field for 46 years.

“From a legal point of view, this Children’s Scholarship Fund New Hampshire is subject to the Right-to-Know law, chapter 91-A,” Sullivan said. “So never mind a legislative budget assistant — any person should be able to request and receive specific information from CSF. It’s that simple.”

“If you’re a private organization, but you are dealing with taxpayers’ money, then the public has a right to know everything there is to know about those finances,” Sullivan said.

While it’s not clear what, if any, information the Office of Legislative Budget Assistant has received so far, it is putting together a “scope statement” for an audit — a statement that defines what the audit will examine, the time frame involved and what the audit’s objectives are. That statement is expected to be presented to the Joint Legislative Performance Audit and Oversight Committee when it meets Aug. 27.

While it’s a sign that the audit process might be getting underway, Sen. Rosenwald is not hopeful. “[There’s a] serious lack of accountability. There’s really no transparency in this program because there’s no data,” Rosenwald said.

She said lack of transparency about the Education Freedom Account data “makes you wonder what they’re afraid of” revealing.

But state Rep. Rick Ladd, R-Haverhill, chair of the House Education Committee, sees the Education Freedom Account program in a more positive light because, he said, it gives children an educational opportunity they may otherwise not have.

“The program is aimed at providing the best option for students,” said Ladd, adding that he’s “all on board for increasing the income eligibility.” An effort to raise the income eligibility limits to as high as 500% of the poverty level, or $158,000 for a family of four, failed in the last legislative session after the House and Senate couldn’t reach a compromise. In 2023, the median household income for a family of four in New Hampshire was $151,546, according to U.S. Census Bureau data analyzed by the U.S. Justice Department.

Asked if he was concerned about lack of program oversight, Ladd said he was not familiar enough with the audit process to comment on it, but does know that “the LBA is asking for the information.” 

“I’m looking forward to seeing any report come out of the Legislative Budget Office,” Ladd said.

These articles are being shared by partners in the Granite State News Collaborative. For more information, visit collaborativenh.org.