Who's watching tax dollars for state voucher program?

When private and parochial schools recently returned nearly $4 million in public money overcharged in state vouchers, school choice advocates lauded the self-policing efforts.

But who is actually responsible for making sure such mistakes are caught? Who makes sure such errors won't happen again? And ultimately, who is supposed to make sure the increasing millions of tax dollars for voucher funding are appropriately spent?

The schools themselves? The Indiana Department of Education?

Or, as one lawmaker suggests, is nobody really able to enforce the rules?

At stake are millions of taxpayer dollars a year that subsidize private and religious educations for low-income students — amounting to $81 million in state funding last year and poised to rise this year with the continued explosive growth of vouchers.

"I can't tell you for a fact every school follows the law," said state Rep. Robert Behning, R-Indianapolis, who helped craft and expand the state's voucher program. "Education compliance has been a very tenuous agreement that we make."

He wasn't talking only about vouchers. For all schools in the state, he said, the problem persists: If you don't follow state guidelines, and nobody's watching — then what?

Then, well ... nothing?

That's what often happens, Behning said.

"Not that that makes it right," he said. "Not that that makes it acceptable.

"I don't know that we've found the right formula to make sure it's enforced."

Indiana's voucher program — also known as choice scholarships — was limited to 7,500 low-income students when it began in 2011. It now serves nearly 30,000 students at more than 300 private schools across Indiana.

Schools that accept vouchers sign off on a list of assurances, which include agreements to administer state tests, conduct teacher evaluations and follow nondiscrimination policies. The assurances outline what schools must do to receive voucher funds and what they can't do.

Under state law, the Indiana Department of Education is tasked with performing random compliance checks on 5 percent of schools. But spokesman Daniel Altman has said the department is not required — and does not have the statutory power — to audit the voucher program.

He did not respond to further questions from The Indianapolis Star about oversight of vouchers.

Unlike public schools, choice schools are not audited by the State Board of Accounts, lawmakers say.

Behning suggested that perhaps the General Assembly should look into simpler ways to administer choice scholarships. He said some of the voucher errors might have occurred if private schools mistakenly thought choice scholarships could apply to the full cost of tuition instead of discounted amounts.

Private schools charge widely varying amounts for tuition. They also often offer discounts to offset the full cost of tuition. In Indiana, vouchers can amount only up to the tuition rate for which a family ultimately qualifies, with all applicable discounts.

To cover what they discounted, private schools often rely on donations or church support, said John Elcesser, executive director of the Indiana Non-Public Education Association. They are not supposed to collect "extra" money from the state to make up the discounts for voucher students.

Those discounts were at the heart of the $3.9 million that 80 private schools recently identified during self-initiated reviews. The excessive voucher payments overdrawn from the state over three years had resulted from not applying the appropriate tuition discounts for parishioners, employees or families with more than one child enrolled, Elcesser said.

"Philosophically, schools subsidize those families (as) a way of trying to keep their tuition affordable," Elcesser said. "Technically, now the schools are subsidizing the state, because the family is still getting discounted tuition."

He said choice schools are improving training and ensuring that compliance structures are in place: "It's about self-discipline, I think. As long as there's a commitment to do it correctly and monitor it."

Schools also work in collaboration with the Indiana Department of Education.

"No one on either side is going to be able to catch everything," Elcesser said. "It's really through a partnership."

But for voucher critics, the $3.9 million in miscalculations is a further indictment of the school choice program.

Opponents recently decried the increasing state funds flowing to private and often religious educations, diverting money they say otherwise would go to public schools.

In the beginning, students had to attend public school for at least one year to qualify for a choice scholarship, but recent changes have broadened eligibility to more students who never have to enter the public school system.

Because vouchers are worth less than what the state would spend if a student attended public school, choice scholarships were pitched as a cost-saving program.

The Department of Education, however, said the state stopped seeing savings last year as vouchers extended to more students who never attended public schools. Last year, $81 million went to choice scholarships, but instead of technically saving money in the process, the department said the program came at a cost of nearly $16 million to the state.

With private schools now reimbursing nearly $4 million to the state, Rep. Gregory Porter, D-Indianapolis, said he has added doubts about whether all state money has been appropriately accounted for.

"That's just the tip of the iceberg," he said. "Of the schools that are receiving vouchers, how many are not returning those dollars?"

He said he is also concerned about how vulnerabilities could multiply as the program expands. Republican Gov. Mike Pence recently said he will seek to lift the $4,800 cap on elementary school vouchers, potentially allowing vouchers to redirect more state dollars.

"If the governor's going to remove the caps even further," Porter said, "that means more public dollars will be flowing to vouchers, to private schools, and there won't be any oversight."

Even Elcesser concedes that mistakes with voucher dollars may be inevitable.

"I think when you're dealing with things that are complex — which is true for most state programs — and you're dealing with 317 schools, and four or five people out at each of those schools," he said, "there's going to be misinterpretations. There are going to be errors."

More important, he said, is how choice schools respond when mistakes are found, to correct problems and "implement a program with fidelity."

Call Star reporter Stephanie Wang at (317) 444-6184. Follow her on Twitter: @stephaniewang.