—Major reforms proposed after audit reveals state can’t locate 30,000 scholarship students—
Senator Don Gaetz filed legislation today to restructure how Florida funds and tracks its Family Empowerment Scholarship programs, responding to an Auditor General’s report that found the state cannot account for the location of 30,000 students and has more than $270 million in misallocated education funding on any given day.
- Senate Bill 318, titled Educational Scholarship Programs, includes the changes that Sen. Gaetz discussed at the Senate Appropriations Committee on PreK-12 Education hearing on Nov. 19. The legislation has already attracted bipartisan support, with co-sponsorship from the Democrat, Republican and No Party Affiliation members.
The Accountability Crisis
The Auditor General’s operational audit pointed out three major issues:
- The state is currently paying scholarships for 30,000 students whose locations and enrollment status cannot be verified. That number has grown from 23,000 students identified in earlier reports.
- At the committee hearing, Gaetz stated that $100 million that should have been paid to public schools last year was instead improperly paid for scholarships, part of a larger pattern of funds not reaching their intended destinations at the correct times.
- The third major problem involves budgetary planning. With nearly 20% of school-age children now educated in private schools or home-schooling arrangements at public expense, and with application deadlines not aligned to budgetary calendars, the state cannot accurately project costs or ensure all eligible students can be funded.
Separating the Money Streams
The bill’s most fundamental change addresses what Gaetz called the “scrambled” architecture of current funding. Currently, money for public schools, private schools, homeschooling and unique ability scholarships all flows through the same Florida Education Finance Program calculation. The Department of Education and Scholarship Funding Organizations must then “unscramble upwards of $4 billion” to send appropriate amounts to different providers.
- SB 318 would create a separate categorical fund for Family Empowerment Scholarships within the FEFP, dedicating specific funding streams for the scholarship programs distinct from public school allocations. The bill would expand the use of the Educational Stabilization Fund to ensure all scholarships can be funded while preventing school districts from being paid in arrears months later when funding errors are discovered.
Tracking Students and Money
To address the problem of missing students, the bill establishes monthly rather than quarterly payments and requires verification of continued eligibility before each payment is issued. Parents would need to provide documentation that their student is not enrolled in public school and is properly enrolled with their chosen provider.
- The Department of Education would be required to assign a Florida student ID to all scholarship recipients, creating a unique identifier for cross-checking enrollment status. A standard withdrawal form would be created for families leaving the public school system, and the department would cross-check scholarship applicants against district enrollment files.
School districts would receive authority to establish menus of services they could sell to scholarship students who want to take individual courses or participate in activities at public schools, accommodating the mobility of students between different educational options.
Application Windows and Documentation
The legislation creates fall and spring application windows with clear deadlines that occur before scholarships are funded, addressing the current timing confusion that complicates budgetary planning. A single application would be required for all scholarship programs, and families would need to submit additional documentation, including multiple forms to verify residency and birth certificates.
- Payment protocols would be standardized, with clarified deadlines for initial and renewal students and clear procedures for handling ineligible or inactive accounts. The Department of Education would develop uniform reimbursement and invoicing processes.
Oversight and Accountability Measures
SB 318 requires the Auditor General to conduct annual end-of-year audits of the scholarship programs, institutionalizing the kind of review that uncovered the current problems. Scholarship Funding Organizations (SFOs) would be required to return funds based on audit findings.
- The bill authorizes the Department of Education to access SFO records and data to assist in reconciling scholarship payments and requires reporting on student mobility within the scholarship program. The department would be directed to propose ways to improve efficiency and effectiveness, including negotiating performance and price contracts with SFOs as an alternative to current arrangements, with competitive sourcing and awarding of those contracts.
Currently, SFOs receive a management fee of three percent of all scholarships awarded. The bill reduces this administrative fee to make more funding available for actual scholarships, specifically benefiting the Florida Tax Credit Scholarship program.
Implications for School Choice
The bill attempts to preserve and protect school choice while addressing fundamental implementation failures. As Gaetz acknowledged, “We don’t have a perfect bill. But we have a bill which fixes these issues, which, left unaddressed, will continue to worsen and threaten to disrupt and imperil school choice in Florida.”
Read Senate Files Bill to Improve Transparency and Efficiency for School Choice Scholarships
