ECOT sponsor to repay $879,000
The supposed public “watchdog” over the failed Ohio internet charter school ECOT has agreed to repay the state $879,000, a small fraction of the total it was paid by taxpayers for its role in one of the largest financial debacles in state history.
Ohio Attorney General Dave Yost announced a settlement by mutual resolution Wednesday with Toledo-based “sponsor” the Educational Service Center of Lake Erie West, regarding overpayments received from its sponsorship and oversight of the now-closed Electronic Classroom of Tomorrow.
The state says ECOT overbilled taxpayers by $124.2 million, and Lake Erie West had a contract with ECOT entitling it to 1.5% of all state revenue, meaning its share of the overpayment amounted to $1.86 million. Lake Erie West has repaid $1.27 million, which represents “the full amount” of overpayments, said Dominic Binkley, a spokesman for the state attorney general’s office.
“There was a lack of clarity in the overpayment amount to ECOT, thus creating discrepancies in the amount of money the ESC (of Lake Erie West) received from ECOT for fiscal year 2018,” Binkley said in an email.
ECOT still owes the state $106.58 million, Binkley said.
In June 2017, the State Board of Education voted 16-1 to accept the findings of a Department of Education review recommending that ECOT pay back more than half of the $108 million in state education funds it received for the 2015-16 school year because it grossly overinflated its student attendance. ECOT students worked from home on computers, and investigators found thousands of students performed little or no actual schoolwork.
“I feel like they’ve cheated the children and the taxpayers,” Cathye Flory, a state Board of Education member from Logan, said in 2017.
ECOT launched an expensive, taxpayer-financed lawsuit against the state to reclaim its payments and justify its methods of calculating attendance, arguing that it was required to provide only “learning opportunities” and saying students need not participate.
The online charter school lost a series of court cases, and the state eventually concluded that ECOT had received about $60 million too much in the 2015-16 school year. The state later found ECOT had overbilled by $19 million in the 201617 school year and $44.6 million — everything it was paid — for the final months it remained open.
None of the investigations considered any previous years’ payment calculations, dating back to ECOT’S founding in 2000 by Bill Lager, who showered mostly Republican Ohio legislators with millions of dollars in campaign donations.
U.S. Sen. Sherrod Brown called on ESC Lake Erie West on Wednesday to repay all of the money it “diverted from Ohio students.” The organization didn’t respond Wednesday to inquiries about how much money it received from the over $1 billion Ohio paid to ECOT over the charter school’s operating life.
ESC Lake Erie West suspended the school in January 2018 as ECOT ran out of money. The closure forced roughly 12,000 students to scramble to find new schools for the second half of the school year and put hundreds of teachers and other staff out of work.
The Dispatch reported in October 2016 that the login information for 699 randomly selected students showed that as many as 70 percent missed so many days of school the previous year that they could be declared truant under state law.
A 2016 state audit noted that ECOT’S contract with ESC Lake Erie West didn’t “specify how the school should document ‘student participation’ pursuant to requirements established by law, and, therefore, how the sponsor could effectively monitor such compliance.”
“Lake Erie West deserves credit for taking the high road in agreeing to this repayment,” Yost said in the written statement. “Although there’s still a lot of work to do, this is a significant step toward paying down the substantial debt that ECOT owes.”