PHOTO: Education Secretary Jacob Oliva speaks to superintendents about the LEARNS Act during a meeting at the Northwest Arkansas Education Service Cooperative on Mar. 10, 2023. | Antoinette Grajeda/Arkansas Advocate
By ANTOINETTE GRAJEDA | Arkansas Advocate
The Arkansas Department of Education has again selected a Florida-based company to administer the state’s school voucher program after firing the previous vendor for delays and failure to implement required components.
A state legislative committee on Thursday reviewed an $8 million contract with Kleo Inc (also known as Class Wallet) that’s worth up to $14 million over the course of four years. Class Wallet administered the first year of the state’s Education Freedom Account program, but Student First Technologies took over the second year when the state awarded a contract worth $15 million over seven years.
Created through the LEARNS Act, an expansive education law, the school voucher program provides around $6,800 per student for allowable student expenses such as private school tuition.
Darrell Smith, assistant commissioner of the Office of School Choice and Parent Empowerment, told the Arkansas Legislative Council’s Review subcommittee Thursday that he’s confident the program will be handled “in a much more seamless manner” because ADE is more familiar with Class Wallet, which has an easier to manage system.
“There’s not as many problems in the front end. The previous vendor had a number of problems that we were having to solve on the go, and so it was hard to approve things when the system was broken,” Smith said. “And so it wasn’t the approval process that was broken, it was the process of getting us the information so that we could approve it.”
Education Secretary Jacob Oliva sent a letter to Student First Technologies’ CEO on Sept. 16 voicing concerns about missing deadlines. Oliva sent another letter Oct. 8 notifying the Indiana-based vendor that ADE was terminating its contract because the company “failed to deliver a fully functioning system by the deadlines established under contract.”
Additionally, the letter noted components that were delivered “had significant problems and delays” that included “unreasonably slow payment processing” and “repeated failure of the system to operate as required.”
ADE posted an online bid last month for another vendor to run the state’s EFA and literacy tutoring grant programs. Kleo/Class Wallet was one of five companies that applied for the contract.
Rep. Fran Cavenaugh, R-Walnut Ridge, questioned the decision to return to Class Wallet during Thursday’s legislative meeting, noting that parents “lost a little faith” in the EFA program because of all the errors they’ve encountered.
“If we had such a good experience with Class Wallet, how come we ended up going with this other vendor, that to be honest we didn’t have a good experience with?” Cavenuagh asked.
Smith said ADE followed state law by going through the Request for Proposals (RFP) process and Student First Technologies won the contract. During a legislative meeting in May, legislators questioned whether Student First Technologies had the experience and capacity to manage thousands of applicants in the program, the Arkansas Democrat-Gazette reported.
The EFA program is being phased in over three years with expanding eligibility requirements until it’s open to all students during the 2025-2026 academic year. ADE announced the program reached its second-year cap in September, with 14,297 students funded for the 2024-25 school year.
Smith said Thursday that ADE shared lawmakers’ concerns, so state educational officials spoke with Student First Technologies, which provided assurances it could manage any issues.
“They did not,” Smith said. “We also promised you if they did not fulfill their part of the contract that we would leave, which we are.”
The company’s problems left thousands of home-school parents confused and angry, according to an October article by education news outlet The 74.
ADE is fining Student First $563,000 in damages and penalties. The money is due in full by Dec. 31, 2024, the date when the contract expires. The company is expected to fulfill its contractual obligations until the contract is terminated at the end of the year, according to the contract termination letter.
The full Arkansas Legislative Council will review the new vendor’s contract at its Friday meeting.
Discover more from
Subscribe to get the latest posts sent to your email.
