15-2403. Empowerment scholarship accounts; administration; audit; rules

A. The treasurer may contract with private financial management firms to manage Arizona empowerment scholarship accounts.

B. The department shall conduct or contract for annual audits of empowerment scholarship accounts to ensure compliance with section 15-2402, subsection B, paragraph 4. The department shall also conduct or contract for random, quarterly and annual audits of empowerment scholarship accounts as needed to ensure compliance with section 15-2402, subsection B, paragraph 4.

C. The department may remove any parent or qualified student from eligibility for an Arizona empowerment scholarship account if the parent or qualified student fails to comply with the terms of the contract or applicable laws, rules or orders or knowingly misuses monies or knowingly fails to comply with the terms of the contract with intent to defraud and shall notify the treasurer. The department shall notify the treasurer to suspend the account of a parent or qualified student and shall notify the parent or qualified student in writing that the account has been suspended and that no further transactions will be allowed or disbursements made. The notification shall specify the reason for the suspension and state that the parent or qualified student has ten days, not including weekends, to respond and take corrective action. If the parent or qualified student refuses or fails to contact the department, furnish any information or make any report that may be required for reinstatement within the ten-day period, the department may remove the parent or qualified student pursuant to this subsection.

D. A parent may appeal the department's decision pursuant to title 41, chapter 6, article 10.

E. The department may refer cases of substantial misuse of monies to the attorney general for the purpose of collection or for the purpose of a criminal investigation if the department obtains evidence of fraudulent use of an account.

F. The department shall make quarterly transfers of the amount calculated pursuant to section 15-2402, subsection C to the treasurer for deposit into the empowerment scholarship account of each qualified student, except the department may make transfers according to another transfer schedule if the department determines a transfer schedule other than quarterly transfers is necessary for the operation of the empowerment scholarship account.

G. The department shall accept applications between July 1 and June 30 of each year. The department shall enroll and issue an award letter to eligible applicants within forty-five days after receipt of a completed application and all required documentation. On or before May 30 of each year, the department shall furnish to the joint legislative budget committee an estimate of the amount required to fund empowerment scholarship accounts for the following fiscal year. The department shall include in its budget request for the following fiscal year the amount estimated in section 15-2402, subsection C for each qualified student.

H. The department may adopt rules and policies necessary for the administration of empowerment scholarship accounts, including:

1. Policies for conducting or contracting for examinations of the use of account monies.

2. Conducting or contracting for random, quarterly and annual reviews of accounts.

3. Establishing or contracting for the establishment of an online anonymous fraud reporting service.

4. Establishing an anonymous telephone hotline for fraud reporting.

5. Policies that require a surety bond or insurance for account holders.

I. The department shall contract with an independent third party for the purposes of determining if a qualified student is eligible to receive educational therapies or services pursuant to section 15-2402, subsection B, paragraph 4, subdivision (c).