College & Workforce Readiness

Florida School Choice Group Leaves Scholarship Program

By Alan Richard — February 04, 2004 3 min read
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More questions about the future of Florida’s most popular school choice program have arisen after an organization that provides tuition help to low- income families decided to get out of the scholarship business.

Miami-based FloridaChild announced last month that it would withdraw from the state’s tax-credit scholarship program.

The split came after Florida’s chief financial officer, former Education Commissioner Tom Gallagher, began investigating the scholarship group’s finances.

Corporate-tax-credit scholarships awarded by groups such as FloridaChild have supplied $3,500 this year to each of the roughly 16,000 students from low-income families who use the money for tuition at private and religious schools. Funding for the program is raised through donations from businesses in exchange for a tax break, as allowed by state law.

The more than 4,000 scholarships that had been administered by FloridaChild soon will be handled by Florida PRIDE, a scholarship group in Tampa. Students who received grants through FloridaChild are not expected to see any interruptions in their funding.

An audit report issued in December by the Florida Department of Financial Services, headed by Mr. Gallagher, questions whether FloridaChild was charging fees for its services and illegally using scholarship money to pay administrative costs. (See “Florida Voucher Management Blasted in State Audit Report,” Jan. 14, 2004.) State law prohibits the groups from putting scholarship money to such uses. Funds for administrative costs must be raised privately.

Beyond those allegations, Mr. Gallagher’s office would say only that it handles both administrative and criminal investigations, and was continuing its inquiry.

FloridaChild spokesman Scott Bohnenkamp denied any financial misdeeds by the group. He said the organization gave up its role in the tax-credit scholarship program to concentrate on expanding other school choice options. “It was just taking too much of our time,” Mr. Bohnenkamp said.

Fees and the Future

FloridaChild had been charging fees to scholarship recipients, through an outside contractor, for processing the applications. But, this year, the Miami group began processing most applications on its own, Mr. Bohnenkamp said, yet still charged the fees.

Many students on the scholarships are in their second year of the program and have not paid fees directly to FloridaChild, he said. The group has kept new clients’ fees because FloridaChild processed those applications itself, he added. The group insists that collecting fees does not violate Florida law. Mr. Bohnenkamp said FloridaChild has been careful not to use scholarship money for administrative costs.

“Every dollar that has been given to FloridaChild in tax-credit donations has gone to children,” he said.

While at least one scholarship group in the state has backing from a wealthy supporter to help cover its costs, FloridaChild did not have that kind of help.

School choice groups like FloridaChild may push state lawmakers to approve other types of choice programs this year that could be easier to manage.

State Commissioner of Education Jim Horne and his staff contend that the tax-credit scholarships should face only limited scrutiny from the Florida Department of Education, because the money does not flow through the agency and involves private schools and nonprofit groups.

“The most important thing to the education department is that these students’ educational lives don’t get interrupted,” said Frances Marine, a spokeswoman for the agency. “We still believe the program to be a successful one.”

Ms. Marine said that legislation proposed by Mr. Horne would help tighten accountability over school vouchers and the tax-credit scholarships. She added that “we will more closely monitor what is going on in these programs.”

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