The check may or may not be in the mail.

Regardless, state officials still expect to receive close to $500,000 that a contractor collected while administering the Empowering Parents education microgrant program.

“Although we have not yet received the funds, we are confident that once logistical issues are resolved, the funds will be returned to the state,” Steve Bailey, deputy director of the state’s Department of Administration, said in an email to Idaho Education News Friday afternoon. “We expect to have this resolved soon.”

The New York-based Empowering Parents contractor — Primary Class, known also as Odyssey — collected the interest from $50 million in federal funding. The state set the federal coronavirus aid money aside in 2022 to launch Empowering Parents, which is designed to allow parents to receive grants to cover their out-of-pocket education expenses — computer equipment, learning materials or tutoring and therapy.

State officials have said Odyssey has no right to keep the interest, pegged at $478,656, based on a recent state estimate.

“The interest monies in the account are the state’s funds,” David Miller, a contract administrator for the state’s Division of Purchasing, said in a June 23 letter to Odyssey founder and CEO Joseph Connor.

If Odyssey does not return the money, the state could find the company in breach of its $1.5 million Empowering Parents contract — and subject to a number of possible sanctions, including termination of the contract.

Odyssey faced a July 6 deadline to issue a refund, but the state is not pursuing any sanctions against the company. Instead, Bailey pointed to Odyssey’s pledge to refund the money.

“While the contract did not contain any conditions related to the accrual of interest, Odyssey is committed to working with the state of Idaho to resolve this issue and we stand ready to refund the interest earned,” Connor wrote in a June 30 email to Miller, which the state purchasing division provided to Idaho Education News.

While the state and Odyssey appear to be working through the logistics of a refund, there could be one other potential snag. In his email, Connor noted that Odyssey “has incurred federal income tax liabilities” from the earned interest, an issue he would like “addressed” by the state.

State Board of Education staff uncovered the interest issue during an internal review of Empowering Parents — and improper taxpayer-funded purchases financed through the microgrant program.

This review pinpointed up to $180,000 in ineligible purchases, for items such as TV sets, smart watches, and clothing. Odyssey has also pledged to reimburse the state for these purchases.