Alabama § 16-6J-7 - Fraud or Misuse of Program Funds; Appeals.

§ 16-6J-7. Fraud or Misuse of Program Funds; Appeals.

(a) To identify fraud or other potential misuse of program funds, the department shall do both of the following:

(1) Conduct random financial audits of ESAs and education service providers, including participating schools. The random financial audits shall be conducted with sufficient frequency to adequately deter misuse of program funds.

(2) Establish and publicize means for citizens to report fraud or other potential misuse of program funds, including websites and a toll-free phone number.

(b) To address instances of suspected fraud or other misuse of program funds, the department may do any of the following:

(1) Refer a case to local or state law enforcement agencies for further investigation. The program established by this chapter shall constitute a matter arising under the state revenue laws, and an application to participate in the program or a payment of qualifying expenses shall constitute a claim or other document, for purposes of the criminal prohibition against tax fraud in Section 40-29-115.

(2) Stop making advance credit payments into the ESA or otherwise reduce the amount of money in an ESA of a parent of a participating student, either temporarily or permanently.

(3) Suspend or disqualify an education service provider. If an education service provider is suspended or disqualified, the department shall notify participating students and their parents of the decision as soon as practicable. The department shall coordinate the suspension or disqualification to coincide with the end of the academic school year.

(4) Recapture misused program funds from a parent, education service provider, or other person responsible for the misuse of program funds.

(c) For purposes of this chapter, misuse of program funds includes any of the following:

(1) Violation of the agreements made by a parent pursuant to Section 16-6J-4(a), by an education service provider pursuant to Section 16-6J-5(a), or by a participating school pursuant to Section 16-6J-5(b).

(2) The misrepresentation of information provided to the department in the course of implementing this chapter.

(3) The failure to return any misspent program funds upon request of the department.

(4) The repeated and substantial failure to provide a participating student with educational services promised in exchange for program funds.

(d) A parent, participating student, education service provider, or other recipient of a CHOOSE Act tax credit may ask the department to reconsider its decision and appeal any final decision of the department to the Alabama Tax Tribunal under Chapter 2B of Title 40.