ESA vendors, he said, give families the “agency to get what they need but also the ease of knowing that what they’re doing and what they’re buying (complies with) program rules.”

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Adding than one vendor to the mix could make the companies work harder to reach lower-income and minority families who are less likely to use the programs, said Lisa Snell, a senior fellow at Stand Together Trust, which funds school choice initiatives.

“Family outreach and satisfaction become the goal rather than the government as the customer to one vendor,” she said.

Texas had the option to choose multiple vendors for its new ESA program, which launches next fall. The law allows the comptroller’s office to contract with up to five companies. But officials opted against it and awarded a two-year, $26 million contract to New York-based Odyssey, which currently runs programs in four other states.

Joe Connor, Odyssey’s CEO declined to comment on the state’s decision and referred The 74 to the state comptroller’s office. The office did not respond, but Amar Kumar, CEO of KaiPod Learning, a large national network of microschools, said the state likely felt multiple vendors would further complicate the process.

“There was this huge question of the complexity of doing that,” he said. “How do you tell families which portal to go to or how will they decide who manages which part of the program?”

‘Send a quarterly check’

The vendor platforms include built-in tools to prevent misuse. Student First Technologies has an AI feature, called QuinnIQthat reviews each expense, “assigns a confidence score” and flags anything that’s new or that the state hasn’t approved in the past.

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But Katie Switzer, a West Virginia parent using the state’s Hope Scholarship to homeschool her children, said it’s unreliable, sometimes approving purchases for some families and rejecting the same items for others. She thinks states should focus on monitoring students’ academic progress than tracking every purchase.

“It’s stupid in my opinion to micromanage down to like the $20 workbook level,” she said. “Honestly, I think it would be cost effective to send a quarterly check to families.”

That’s unlikely with such programs constantly under the microscope, and critics, especially in Arizona, pointing to high-end purchases, like diamonds and plane ticketsas examples of misuse. The state education department says it takes steps to prevent fraud and has referred cases to the attorney general’s office that have led to convictions.

West Virginia officials said they’re pleased with Student First’s progress since October, when parents complained that delayed orders caused students to fall behind on lessons. Orders are now “generally” processed within two business days, said Assistant Treasurer Carrie Hodousek, and the company has added and trained staff to prepare for peak order times.

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Providers like Kaipod have their own concerns. School founders in the network have sometimes gone to the brink of eviction from their leased space because of late tuition payments, said CEO Kumar.

“There should be a predictable schedule, but sometimes it can take weeks extra to get paid,” he said. “If you’re running a small business and you owe rent, you owe payroll and your state payment is delayed, that creates a huge amount of stress for founders.”

For now, rebidding contracts for vendors is the strongest form of accountability, he said.

“They ought to not feel safe once they’ve won a contract,” he said.

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Disclosure: Stand Together Trust provides financial support to The 74.

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