Students work in a math class at Wasatch Junior High School in Salt Lake City on Tuesday, March 12, 2024. (Photo by Spenser Heaps for Utah News Dispatch)
After the first year awarding Utah Fits All scholarships, the state’s version of a school choice voucher program, lawmakers approved legislation to clean up some of the inconsistencies the state and parents witnessed in the program.
One of the factors lawmakers voted to correct was how the Utah State Board of Education contracts a third-party manager to run the program. Now, after Gov. Spencer Cox signed the bill into law on March 6, ACE Scholarships is counting its final days as that contractor.
Utah Fits All has quietly experienced challenges beyond the very public lawsuit the Utah Education Association filed against it, challenging its constitutionality. Lawmakers have spoken about internal issues that needed to be solved, especially with homeschooled students who received scholarships. Legislators hinted that there were inconsistencies with the approval of expenses filed by parents, unnecessary administrative fees charged, and location and household income irregularities that pushed the Legislature to set up some new guardrails for the program — to the dismay of a number of participants.
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When the state established Utah Fits All, it required the Utah State Board of Education to pay a contractor to run the program. After a request for proposals process, ACE Scholarships, in partnership with ClassWallet, a company that provides a purchasing and reimbursement platform for public funds, won a bid to manage the program for five years.
The board of education awarded $9 million for that effort. But, this year, the contract was terminated after just one year “for convenience,” Scott Jones, USBE’s contract administrator for the Utah Fits All program, said in a virtual townhall on Wednesday, without elaborating further.
“We did terminate the contract for convenience. That’s it. That’s the only reason we did it,” Jones said. “We can do that. It’s very clear up front. We’ve canceled contracts before. This is not the first time, and it likely will not be the last time that something like that happened.”
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“Welcome” changes to the law, which added more specific guidelines in the selection of the program manager, added to the decision to terminate the contract, Jones said. But, ACE Scholarships is welcome and encouraged to reapply for another shot at program manager.
“We recognize that new legislation brings change,” ACE Scholarships wrote in a statement posted on the program’s website. “In response to recent changes in Utah state law, ACE Scholarships is working closely with the Utah State Board of Education to ensure uninterrupted services and a seamless transition of UFA program management responsibilities to USBE by May 15, 2025.”
With that end date in mind, the board of education released a request for proposals so there’s a transition to a new manager on May 16. Despite the change, Jones doesn’t anticipate delays in the program, he said.
HB455, sponsored by Rep. Candice Pierucci, R-Herriman, made changes to its definition of program manager, removing a provision that mandated the contractor to be a nonprofit organization, and setting guidelines for processing scholarship applications, coordinating with vendors, providing customer service to participants and performing other operational duties.
Also, clearing the way for a smooth transition should the board of education need to transition out of its current program administrator.
“We also put specific program manager requirements in place, prohibiting the program manager and financial administrator from charging fees of students,” Pierucci told the House Education Committee in February. “That makes no sense, because they are already receiving funding for running the program.”
The bill also eliminated a requirement in the original bill that disqualified potential program managers that administered scholarships under the Carson Smith Opportunity Scholarship — another Utah education choice program for students with disabilities, which is managed by Children First Education Fund. The legislation also establishes that the Utah Fits All program manager is required to coordinate with the Carson Smith Opportunity Scholarship manager “to ensure that a student is not receiving duplicate benefits.”
Major changes
Before the 2025 bill, the state had given discretion to the program manager to set rules and guidelines around extracurricular expenses, but after the program’s first year, lawmakers voted to set hard guardrails, including a 20% cap for extracurriculars and physical education, and the clear exclusion of ski passes, furniture, musical instruments, apparel and other purchases from the allowable expenses.
The new program manager, Jones said, needs to demonstrate its ability to fulfill financial administrator duties, or contract with another organization to do so.
“That’s going to be really important too, because, as we were just talking about the 20% we’re going to need to see that there’s controls in place,” Jones said.
The first time there was a request for proposals to hire the Utah Fits All program manager, the state didn’t have the data on the issues presented in the first year of the scholarship program, said Ryan Bartlett, director of communications at the Utah State Board of Education.
“Now that it’s been put in place, the state legislature was able to look at the data, to hear feedback from their constituents, to speak with people who were participating in the program, and that helped them to determine where improvements could be made, where issues could be addressed,” Bartlett said.
There’s now an updated income verification process for students, so the state can capture lower income families first, there are stricter reporting guidelines for how the funds are being used, and more precise definitions for what qualifies as a private school.
Also, now the scholarship isn’t a flat $8,000 for everyone, another factor that the administrator must be able to manage. Homeschooled students 5 to 11 years old can receive up to $4,000 a year, while those 12 to 18 years old can get $6,000. Private school students are still eligible for $8,000 a year.
“When this RFP goes out, there’s that background knowledge of where these issues were, what improvements could be made, what types of challenges needed to be addressed.”
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