ECOT loses another legal fight
A state appeals court has rejected the Electronic Classroom of Tomorrow’s arguments that the state is treating the online school unfairly in forcing it to repay $60 million for unverified student enrollment.
The 3-0 ruling on Thursday is the most recent legal setback for ECOT, the state’s largest charter school, which has thus far found no court, board or hearing officer willing to take its side in an ongoing fight with the Ohio Department of Education.
Last year, department
investigators used computer log-in durations and offline documentation to verify there were 6,313 full-time ECOT students, about 60 percent less than the 15,322 students for which the school was paid during the 2015-16 year.
“The state has a legitimate government interest in conducting (attendance) reviews of community schools that receive state funding to ensure those schools are entitled to the funds they claim,” said the opinion, written by Judge Betsy Luper Schuster and joined by Judges Gary Tyack and Julia Dorrian. It affirmed a trial court decision by Judge Jenifer French of Franklin County Common Pleas Court.
In addition to the ruling, state Auditor Dave Yost, who has been an ECOT supporter, spoke Thursday morning with Attorney General Mike DeWine and senior staff about going to court to stop the school from continuing a blitz of television ads paid for with taxpayer money.
The ads have attacked the Department of Education and tried to put pressure on lawmakers. Yost, who sent ECOT a cease-and-desist order last week, said that if ECOT were allowed to continue the ads, it would signal to other state agencies that they could use
taxpayer dollars on political campaigns.
“This is a very dangerous precedent — where money can be taken by force from taxpayers to tell the legislature what to do,” Yost said.
Dan Tierney, of the attorney general’s office, said it’s in the process of hiring outside counsel to represent the auditor in the matter.
In its lawsuit against the Department of Education, ECOT has argued that the department implemented an illegal rule change last year when it suddenly started relying on student log-in data to determine the school’s enrollment for funding purposes. The change, ECOT argued, was applied retroactively, doesn’t follow requirements that it only has to “offer” students 920 hours, and violated a 2003 funding agreement that the school signed with the department following questions about its reported attendance.
The appeals court rejected the arguments.
“The duration of a student’s participation is essential to determining whether a student has been ‘offered,’ or supplied with, learning opportunities for purposes of calculating (enrollment),” Luper Schuster wrote. “The amount of funding per student is dependent on a measure of student participation.”
As for the 2003 funding
agreement, the court noted that the phrase “and thereafter” was specifically not included in the document, after some back-and-forth exchanges between ECOT and the Department of Education. That means it applied only to the 2002 and 2003 enrollment reviews, the court ruled.
Two weeks ago, the state Board of Education voted 16-1 to require ECOT to repay the state $60 million of the $108 million in state money it received in 2015-16. The education department proposed a two-year repayment plan in which, starting in July, it would deduct $2.5 million from each monthly ECOT payment. The department has not yet released results of a new attendance audit for the 2016-17 school year.
The board vote was based on a ruling in May by hearing officer Lawrence Pratt, who said a school’s intent is not to “teach to what could be the equivalent of an empty classroom.”
ECOT is expected to appeal the most recent court ruling to the Ohio Supreme Court.
Though it was a 3-0 decision, ECOT focused its response on Tyack, whom it tried to have removed from the case after he made comments during oral arguments questioning the e-school model of education and likening ECOT founder William Lager to a Russian oligarch. Ohio Supreme Court Chief Justice Maureen O’Connor called the comments “out of line” but declined to remove him.
“Given the extreme bias by Judge Tyack, it is little surprise that the appeals court did not find in ECOT’s favor,” said ECOT spokesman Neil Clark.
“The facts remain the same: The Ohio Department of Education illegally changed their rules and applied them retroactively and broke its contract with ECOT. Any fair and impartial court recognizes this and will find in ECOT’s favor.”
ECOT, which pays about $22 million a year to software and management companies owned by Lager, and has spent unknown amounts on television ads, has argued that the $60 million repayment would force it to close its doors. It recently said it planned to lay off 350 staffers.
ECOT has filed a separate lawsuit in Franklin County accusing the state Board of Education of violating the Ohio Open Meetings Act. Earlier this week, ECOT asked the Ohio Supreme Court to block the Department of Education from collecting the money because of its “abuse of discretion and unlawful conduct.”