Auditors flag PPCG delays, costs; Kavanagh floats shutdown

Arizona's Parents as Paid Caregivers program is back under the microscope after state auditors reported agencies failed to fully implement mandated cost controls, a lapse they said has continued to cost the state hundreds of millions of dollars.

The July 30 report by the Arizona Auditor General found the two agencies running PPCG, AHCCCS and DES, did not deliver on cost-saving measures tied to $83 million lawmakers approved this year. Within days of a new standardized assessment tool taking effect last October, AHCCCS halted it through rulemaking amid what its interim director called imminent litigation concerns.

The consequence is not abstract. Enrollment ballooned 106% since 2019, from 8,756 to more than 18,000 participants, and attendant care spending rose by more than $537 million over that span, according to agency data cited in the audit. With federal COVID-19 aid ending April 1, 2025, the state is holding a bigger share of the bill.

Senate Majority Leader John Kavanagh, R-Fountain Hills, told the Arizona Capitol Times he favors scaling back or even eliminating PPCG. He framed it as a back-to-basics correction: parents should care for their children because they are parents, not employees. He also said the audit validates Republicans' warnings about abuse risk and suggested accountability for officials who "disobeyed the law."

AHCCCS Interim Director Roberta Harrison, in a formal response letter, pushed back on the premise that the agency could have foreseen the legal tangle sooner. She argued the extensive procedural requirements under administrative law made the October timeline unrealistic and that the projected savings were unlikely even with an on-paper start date.

The policy path here was already rocky. In 2025, lawmakers kept PPCG alive with a $109 million bill that capped parent caregiving at 40 hours per week and ordered a standardized tool to determine extraordinary care needs. Sixteen days after the October 1 implementation date, the tool was paused for rulemaking. Gov. Katie Hobbs announced on Oct. 16, 2025, that she directed changes to allow exceptions for extraordinary care, and Attorney General Kris Mayes approved the emergency rulemaking route.

Auditors, for their part, faulted the delay, writing that if AHCCCS believed rulemaking was necessary, it could have decided so months earlier and avoided ongoing costs. Harrison disagreed, saying the legal risks only became clear during implementation, and that the initial savings estimates were unlikely to materialize.

Democrats counter that Republicans are picking the wrong target. House Assistant Minority Leader Nancy Gutierrez, D-Tucson, a key 2025 negotiator, warned the GOP could try to end PPCG if it keeps the majority. She contrasted the scrutiny on PPCG with the lack of an audit for the ESA program, noting Republicans rejected her 2026 request to examine ESA spending.

Behind the rhetoric is a familiar Capitol split between proposals and results. Republicans floated stricter PPCG limits last year but settled for the 40-hour cap and an assessment tool. The result so far is a tool on ice, emergency rulemaking in place, and auditors saying taxpayers are eating avoidable costs.

The next move belongs to legislative leadership when they return. Kavanagh is openly eyeing funding cuts or a shutdown. Hobbs and Mayes already own the emergency process decisions. Families in PPCG, meanwhile, are left navigating a program whose rules were rewritten, paused, and reworked, while the bill keeps climbing.

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