ECOT defiant after latest state audit
ECOT is showing no interest in following the Ohio auditor’s recommendations on adapting to the state’s requirements for tracking student enrollment.
Auditor Dave Yost, after releasing the latest financial audit of the state’s largest charter school on Thursday, said his staff determined that the online
school did not have systems designed to capture the time a student is actively logged in. He labeled that a weakness in the school’s financial controls.
The Electronic Classroom of Tomorrow remains locked in a court battle and an administrative appeal of the Ohio Department of Education’s conclusion that the school owes the state $59 million because it could only justify enrollment of about 41 percent of the 15,000-plus students it claimed last year.
An attendance audit by the Department of Education — separate from Yost’s audit — required ECOT to verify with computer log-in durations and offline documentation that students were participating in the 920 hours of “educational opportunities” required by state law. In prior years, state officials did not check on how much students were actually participating.
ECOT argues that the change violated state law and that it was not told about the need to provide that data until the 2015-16 school year was half over. The department says it can legally request the information and that the school should have it available.
Yost said he is directing his staff to conduct an expanded statewide review to determine what attendance documentation online schools are capable of capturing.
“Under these new standards, ECOT and many other e-schools will struggle to comply, and all are likely to owe something to the state,” Yost said. “Ultimately, the legislature may need to consider whether duration is the appropriate measure for funding an e-school.”
In some instances, ECOT was asking for a full $7,000 annual payment from the state for students who logged in for only a handful of hours during the school year, Yost wrote.
A Franklin County judge rejected ECOT’s arguments, and the case is pending before the Franklin County Court of Appeals. A separate administrative appeal will lead to a recommendation on whether the state Board of Education should require full repayment.
If repayment of $59 million is required over two years, Yost says in the audit, it “would create a closure scenario” for ECOT.
Yost recommends that ECOT determine what documentation is needed to verify its enrollment and develop policies to capture the time students spend on the computer and in “noncomputer learning opportunities.” Iincluding that in ECOT’s contract with its sponsor, the Education Service Center of Lake Erie West, would “facilitate the school’s compliance with requirements and standards established by law.”
But neither ECOT nor Lake Erie West is taking kindly to those recommendations.
ECOT said any recommendation to use Department of Education guidance to determine proper documentation “ignores reality. ECOT has acted consistent with the current statutory requirements.”
Lake Erie West added: “Insistence that standards for documenting student participation be included in the community school contract makes little sense given that such standards plainly did not exist.”
“ECOT’s latest audit shows the impossibility of the current situation for e-schools,” ECOT consultant Neil Clark said. “The auditor’s report is just further proof that ODE has overstepped its authority.”
According to the audit, ECOT received $109.4 million in operating revenue last year, including $107 million in state payments.
Of the $120 million the school spent last year, $64.4 million, or 54 percent, went toward salaries and benefits — lower than the 75-80 percent spent by a traditional public-school district.
ECOT paid $4.4 million to its for-profit management company, Altair Learning, and $17.5 million to IQ Innovations for software services.
Both companies are owned by ECOT founder Bill Lager, who also is one of the largest individual donors to GOP lawmakers. He has contributed nearly $24,000 to Yost.