Defunct online charter school owes Ohio $117M, state auditor says

The Electronic Classroom of Tomorrow, a now-closed online charter school that was once the largest in Ohio, owes the state more than $117 million in payments the state made based on disputed enrollments, according to a state audit.

The $117 million is significantly higher than previously known. In 2019, the Ohio Board of Education ordered ECOT to repay $60 million based on the 2015-16 school year review, as well as another $19 million based on a review the following school year.

ODE pays community schools like ECOT under a formula that uses the number of students enrolled and the time they spend in classroom and learning activities. ECOT operated from early 2000 to 2018, when it was suspended and shut down.

ExploreTears, confusion at abortion provider after ‘Heartbeat Bill’ becomes law

The $117 million includes $106,584,728 owed to the Ohio Department of Education and $10,658,473 owed to the Ohio Attorney General’s Office. ODE paid ECOT those funds in fiscal years 2016, 2017, and 2018 for students at the online charter school whose total hours of attendance could not be confirmed, the the Ohio Auditor’s Office said.

Ohio’s AG is suing ECOT to try to recover the funds the state paid ECOT based on disputed enrollments.

According to state auditors, “ODE determined ECOT was not entitled to a portion of the funding it had received in fiscal years 2016 and 2017, as well as none of the funding received in fiscal 2018.”

ExploreHusted encourages districts to update policies after ruling on religion for school employees

The auditor’s office also said two companies, IQ Innovations and Altair Learning Management I Inc., were improperly paid during this time. The auditor’s office found IQ Innovations owed more than $13 million and Altair Learning Management I owed more than $3.2 million in money ECOT improperly paid to both.

Altair Learning Management I and IQ Innovations were both founded by William Lager, who also founded ECOT in 2000, the auditor’s office said. Altair Learning Management I Inc. was a private company contracted by ECOT to manage the school, and IQ Innovations LLC was a separate private company contracted by ECOT to provide learning management systems and other services.

Legal proceedings against ECOT, Lager and others involved continue. In early May, a Franklin County Common Pleas Judge issued judgments against IQ Innovations, Altair Learning Management I and another firm, Third Wave Communications, totaling more than $161.6 million.

Additionally, “A trial is necessary to determine” Lager’s liability, the court ruled.

About the Author