By GARRY RAYNO, InDepthNH.org
CONCORD — The House Republican Leader Tuesday touted a financial audit of the administrator of the state’s Education Freedom Account program.
According to the press release, “The audit confirmed that every piece of program data and financial information is accurate, compliant, and properly managed, earning the CSFNH the highest possible ranking from Grant Thornton LLP.”
The financial audit does not cover the same territory as a performance audit of the program currently being done by the Legislative Budget Assistant’s audit team which will determine if the Children’s Scholarship Program NH follows state laws, administrative rules and guidelines determined by the state in administering the program which has nearly doubled this school year — the first with no earnings cap — and will cost an estimated $51.7 million up from $28 million last school year.
The program is on course to be $28 million over budget this biennium.
House Majority Leader Jason Osborne, R-Auburn, said in the press release the results of the financial audit “are further proof that this wildly successful program continues to serve Granite State families with excellence. Republicans have said all along that EFAs are transparent, accountable, and life-changing for families.”
He said Democrats desperately hoped to find something wrong because the program is Republican-led and tremendously popular. Instead, the organization got a clean bill of health, again.
“Our gratitude goes to CSFNH for their stewardship and to the thousands of families who continue to demonstrate why school choice works,” Osborne said. “The EFA program is doing exactly what it was designed to do—and doing it extraordinarily well.”
The program was originally sold as a pathway for low-income parents to provide an alternative educational setting for their students if they did not do well in the public school environment.
Instead more than 90 percent of the students in the program were not attending public schools when their parents applied for the grants that average about $5,000 per student.
Instead these students were in religious and private schools and homeschooled when their parents sought the state money that comes from the Education Trust Fund which also provides the bulk of state aid to public education through adequacy grants to school districts.
Critics of the program have long claimed it has lacked transparency, accountability and guardrails, but Republican majorities in the House and Senate have defeated many attempts to change the program.
The voucher program has grown in five years from 1,635 students costing $8 million to 10,510 students this year costing $51.7 million without lawmakers approving any additional revenue source to fund the program.
The program began with the promise to help low-income families, but the percentage of low-income families participating has been dropping every year, so now they constitute 19 percent of the students. When the program began with the 2021-2022 school year, they comprised 54 percent of the students.
Opponents have long claimed the program is using state tax money that could increase support for public education and help property poor communities lower their education costs like Claremont which faces a $5 million deficit due to administrative mismanagement and lack of oversight over the past few years.
“Like other states with universal voucher programs, New Hampshire isn’t seeing a mass exodus from our public schools, which are attended by nearly 90 percent of students—and 95 percent of students with a disability,” said NEA-NH President Megan Tuttle. “Instead, what we are seeing is precious public dollars diverted to fund a second, private and unaccountable, education system that leaves less money to properly fund public schools and control property taxes.”
“Over the past two weeks, Granite Staters have learned that while the voucher program has more than doubled year over year, nearly 97 percent of enrollees to the program were already in a private or homeschool program, the list of approved vendors has been taken offline, and the legislative committee tasked with oversight of the education freedom account program has not met even once in a year,” she said. “Every single New Hampshire taxpayer should be alarmed by these headlines.”
All students deserve fully funded community public schools that give them a sense of belonging and prepare them with the lessons and life skills they need to follow their dreams and reach their full potential, Tuttle said.
“New Hampshire educators know what it takes to improve student outcomes: smaller class sizes, more one-on-one attention, and competitive compensation packages that help recruit and retain high-quality professionals,” she said. “But we can’t do those proven strategies if the state takes more and more public money out of public schools to fund their handouts to wealthy families – which is exactly what is happening now that there are no income requirements for these vouchers.”
The Children’s Scholarship Fund NH issued a press release on the Grant Thornton LLP audit as well saying it was issued an unqualified or “clean” opinion by the firm.
In the audit’s accompanying letter the firm wrote, “In our opinion, the accompanying summarized comparative information as of and for the year ended August 31, 2024 is consistent, in all material respects, with the audited financial statements from which it has been derived.”
The press release from the Manhattan-based non-profit said the audit “confirmed that all program data and financial information is correct.”
“In a time when transparency and accuracy matter more than ever, we are proud that this independent audit confirms our commitment to integrity and responsible administration,” said Kate Baker Demers, Executive Director of CSFNH. “New Hampshire families rely on us to manage this program with care, and this audit reflects the high standards we hold ourselves to every day.”
The audit notes the state of New Hampshire forwarded $30.1 million dollars to the organization in fiscal year 2025 and the organization is by law returning $1.33 million to the state, along with $4,140 for students who left the program early or were ineligible.
She noted her organization has reduced its administrative fee from the allowed 10 percent under the law establishing the voucher program to 7.83 percent.
The audit indicates the organization withheld $2.66 million for administrative costs or 9.23 percent, while $2.26 million was allocated to administrative costs or 7.83 percent, $405,494 was retained for the on-going administration of the $10.85 million that was allocated in student grants to the ClassWallet system to pay vendors and vet purchases but had not been spent as of Aug. 31.
The audit also indicates the Children’s Scholarship Fund received $175,000 in private money in fiscal 2025 to offset administrative costs.
According to the audit, $1.67 million of the administrative costs were salaries, payroll taxes and benefits, $334,154 paid for data base fees, $232,750 went to public awareness and outreach, $83,791 paid for professional fees, and $23,246 paid for occupancy fees.
The organization’s website lists 15 administrative staff, which would average over $111,000 per person.
In the organization’s most recent IRS 990 form for 2024 Baker’s compensation is listed as $220,667.
“We take seriously the trust that families, taxpayers, and state leaders place in our program,” Baker said. “Our priority is to provide the highest level of service with the upmost accountability. This audit reinforces that commitment.”
The LBA performance audit of the program is required by law, but the scholarship fund at the urging of former Department of Education Commissioner Frank Edelblut refused to share critical data needed to conduct the audit, claiming they owned the information, and that opinion was backed up by the Attorney General’s Office.
The audit now focuses on the department’s oversight of the program and is expected to be released this spring.
The financial audit of the Children’s Scholarship Fund is found here: https://nh.scholarshipfund.org/wp-content/uploads/2025/12/2025-CSF-FS-ISSUED.pdf
Garry Rayno may be reached at garry.rayno@yahoo.com.