Report: Contractor collected interest off taxpayer funds
| June 25, 2023 1:00 AM
The Idaho State Board of Education is still working to unravel a scope of issues with the Empowering Parents grants, intended to help low-income and middle-class families offset educational costs.
On Wednesday, the board discussed one significant problem. Some taxpayer-funded grants — designed to help parents pay for laptops, learning materials and other out-of-pocket education costs — instead covered items such as smartwatches and cleaning supplies.
And the State Board learned about a new issue Wednesday. Primary Class Inc. — the state-hired contractor, known also as Odyssey, which oversees the Empowering Parents online marketplace — has been “holding taxpayer funds in an interest-bearing account and retaining those interest earnings,” said Jenn Thompson, the board’s chief policy and government affairs officer.
It’s unclear how much taxpayer money has been held, how much Odyssey has made off the interest, or whether the state can recover the interest.
In April, the state’s Division of Purchasing issued Odyssey a “notice to cure” in an attempt to remedy the issue, Thompson said.
EdNews has requested more information on the issue from the Division of Purchasing and will update this story when that becomes available.
The interest issue is the latest complication for the $50 million federally funded microgrant program, which has already been under the microscope for the ineligible purchases — which are still under review.
Review should be completed by the end of June; some families will be barred from receiving grants again
The State Board has reviewed about three-quarters of the Empowering Parents purchases, and Thompson expects the process will be completed by the end of June. The board will present findings to an Empowering Parents advisory panel at its July 10 meeting.
The parents’ panel will ultimately make recommendations to the State Board about how to improve the Empowering Parents program, likely at its regular October meeting.
Families who purchased ineligible items will be barred from participating in Empowering Parents again — but can also make an appeal to the Parents Advisory Panel.
The State Board says 7% of purchases appear to be ineligible. But some of these fall into a gray area.
Those items, like ballet shoes, karate uniforms, backpacks, or computer cases — really are essential equipment for students, Thompson said. Rather than immediately barring families who made those purchases, the advisory panel will be asked to determine whether such items should be considered eligible.
Thompson did not discuss another group of transactions. Another 13% of purchases are considered questionable, and the State Board is seeking additional information through Odyssey.
A look back at missteps, and forward to fixes
After Gov. Brad Little publicly rebuked the State Board for a failure to communicate early with him about the grant program’s shortcomings, Thompson seemed eager to say the board is committed to improving future communications. She also said board staff had acted diligently in protecting taxpayer dollars since uncovering some of the inappropriate purchases.
She provided a brief history of the steps State Board employees have taken:
• The Empowering Parents marketplace opened in mid-November of 2022. Within a few weeks, the State Board’s program manager began “identifying purchases that appeared to be ineligible.”
• Over the next four months, State Board employees worked with Odyssey to clarify what expenses are eligible, and to conduct a review of purchases made.
• Odyssey was required to acquire written agreements from marketplace vendors that ensured only eligible purchases could be made.
• Several subcontractors’ accounts were suspended until issues were resolved.
• During that time, the issue of the interest-bearing account came up, and the Division of Purchasing began working to remedy it.
• In April, the State Board launched its independent review of nearly 50,000 program purchases.
“This has been a really intensive process and has taken a bit of time to conduct,” Thompson said.
Going forward, Thompson said Odyssey has established new procedures to protect against ineligible purchases. Board employees are working with the Division of Purchasing to determine whether it will be possible to recover money spent inappropriately.
Plus, the Empowering Parents program will start issuing a weekly — as opposed to monthly — report with updates, which will be distributed to more readers, including Little, legislators, State Board members, and other interested stakeholders.
Thompson said all issues should be resolved before the fall, when the next application cycle begins, to award $30 million in state-funded grants.
“We are committed to the success of this program … and we’re committed to doing our due diligence and performing our fiduciary duties as we administer this program with fidelity,” Thompson said.