Josiah Armstrong was flabbergasted to learn last year that he was being investigated for misusing his children’s state education funds.
Then he realized he had misunderstood the rules.
A father of five and a small business owner, the Manchester resident had enrolled his three school-aged children in the state’s education freedom account program in 2023 to receive financial support for their private school tuition and homeschooling expenses.
A week after enrolling his kids, Armstrong also applied on behalf of his business, a holistic wellness coaching company called Forerunner Fitness, at the request of some of the families whose children were enrolled in martial arts and dance classes he offered.
When Forerunner Fitness was approved as an educational provider, Armstrong was excited. The approval allowed his students’ families to easily pay for his courses using their EFA funds.
He assumed it also meant he could begin invoicing himself for his own children’s participation in his classes.
“Wow, I get to use my EFA for their training and program needs in my school,” Armstrong said he recalled thinking. “That’s so great.”
Over two years, Armstrong sent $4,764.99 to Forerunner Fitness out of the roughly $30,000 his family received, according to a document obtained through a public records request from the Department of Education, and the program’s average per-child funding. Armstrong himself said he did not know off the top of his head exactly how much his family had received in total.
Three of the four payments were for actual classes his children took at the school. In one case, however, Armstrong created an invoice from Forerunner Fitness to reimburse himself for $1,350 he said he had spent at another martial arts school that was not equipped to create invoices itself. (He acknowledged that the cost of his son’s class had actually been about $100 less than he billed himself.)
“As a parent, I was trying to pay myself back for what I paid for my son,” Armstrong said in an interview this week. “I was wrong for doing it. It wasn’t proper policy, but it wasn’t this deceptive workaround.”
It would take an email from an employee of the Children’s Scholarship Fund, which the state contracts to administer the program, for Armstrong to realize that none of the spending — not for the actual courses nor for the reimbursement — was allowed.
“I was shocked and felt terrible and, of course, immediately responded and paid everything back,” Armstrong said.
A state law prohibits EFA funds from being “refunded, rebated or shared with a parent.” The Children’s Scholarship Fund has understood the law to bar parents, like Armstrong, from spending their children’s funds at their own business, even when it is an approved provider and the child is receiving its services.
However, the prohibition has arguably not always been clearly articulated.
As a bipartisan group of lawmakers calls for increased oversight and regulation of EFA program spending, the incident with Armstrong, which has not previously been reported, raises questions about how clearly the Children’s Scholarship Fund is communicating its rules and monitoring whether they are followed.
Matt Southerton, the organization’s director of policy and compliance and the investigator in Armstrong’s case, wrote in a statement that its response to the issue “demonstrates that CSF’s established protocols are working as intended.”
Southerton said that an “internal review” conducted by his organization uncovered the improper spending. He declined to answer more specific questions about the investigation, including how the review was conducted or what prompted it.
Southerton’s investigation prompted the Children’s Scholarship Fund to disqualify Forerunner Fitness as an approved provider and remove Armstrong’s three children from the program. Armstrong appealed the decision to the state’s Board of Education, which partially reversed course.
No ‘monetary benefit’
Under its current rules, the education freedom account program grants families wide latitude to spend their funds as they see fit. Families received an average of $5,204 per child during the 2024-25 school year, when the bulk of Armstrong’s spending at Forerunner Fitness occurred.
A total of $20.2 million was spent that year, with 57% going to tuition. The rest of it was used to pay for a range of other expenses, including instructional materials and specialized education programs.
The recipients of funds through the specialized education category ran the gamut, from major ski resorts to small businesses like Armstrong’s. In all, nearly 500 entities in the category received money in 2024-25, according to an expenditure report prepared by the Children’s Scholarship Fund.
In total, Armstrong’s business received $10,362. That total likely included the $4,764.99 that came from his family, which was returned to the Children’s Scholarship Fund when Armstrong was notified of the rule violations in March 2025.
Armstrong said roughly six other families paid for Forerunner Fitness classes using EFA funds.
When he enrolled his children and then his business in the program, he said the Children’s Scholarship Fund never made it clear that he couldn’t bill himself for his own children’s costs.
“I had no paperwork or awareness that that was the case,” he said. “I was under the premise I could do that and was thrilled that I could do it.”
The handbook for education service providers at the time Armstrong’s business was approved stated only that funds cannot be used to “pay for the parent or guardian’s time or expenses.”
Under a section entitled “monetary benefit,” it was later updated to clarify that a parent who is also an approved education service provider “shall not receive EFA funds” for services provided to their child.
Southerton indicated that other documents, including the provider background check and certification statement, may have provided more details on the rules, but he did not respond to a request to provide them to the Concord Monitor.
He also said that the Children’s Scholarship Fund had increased its disclosure requirements for educational providers since Armstrong applied on behalf of his business in 2023.
At that time, only “individuals, tutors, and sole proprietors” were required to disclose whether they had children in the program, according to Southerton. Though Forerunner Fitness was a small business, it did not appear to fall into any of those categories.
“Now, regardless of organizational structure, all provider applicants notify CSF if they have children enrolled in the program,” Southerton wrote.
In April, members of a bipartisan legislative committee asked the Board of Education to revise the administrative rules that govern the EFA program so that they “provide clearer and more specific definitions of what constitutes a permissible education expense, and an eligible education provider.”
Board of Ed reverses part of penalty
When Southerton completed his investigation, he determined that Armstrong had engaged in “suspected intentional and substantial misuse of EFA funds” for the payment made to reimburse himself for his son’s martial arts classes at a different school.
He found that the rest of the payments did not rise to the level of “intentional and substantial misuse,” but that they violated a provision that is “well documented.”
The Children’s Scholarship Fund’s decision to disqualify his company as an approved provider was unprecedented. None of the other hundreds of previously approved providers have faced the same penalty, according to the organization’s own list.
The penalty also extended to his children, who were removed from the EFA program entirely. The loss of funding forced Armstrong and his wife to unenroll two of their children from a Manchester private school, due to the cost of tuition.
When Armstrong subsequently appealed the decision to the Board of Education last fall, the body unanimously voted to reinstate his children, while maintaining the disqualification of his business.
Drew Cline, the board’s chair, said in an interview that he and his fellow members didn’t feel Armstrong’s children should be penalized for their father’s actions as a business owner.
“The children did nothing wrong,” Cline said. “The parent, in his role as a vendor, violated the policies, so it was an easy decision to conclude that the vendor should no longer be able to participate in the program, but that the students should not be punished.”
Cline said he didn’t have any reason to believe the case was part of a broader issue of lax oversight. He noted the Children’s Scholarship Fund has been recognized by a pro-school choice publication for effectively implementing its program.
“We have no indication that this is happening anywhere for any other vendor,” Cline said.
