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Auditor on ECOT school case: ‘I believe this may rise to a criminal act’

A state audit released Thursday says the Electronic Classroom of Tomorrow purposely inflated the amount of time it claimed its students were engaged in learning, leading the now-closed online school to receive more money than it deserved from the state.

Auditor of State Dave Yost’s office said they have referred their audit to the U.S. Attorney’s Office and the Franklin County Prosecutor’s Office for possible criminal prosecution.

“Our auditors documented that ECOT officials had the ability to provide honest, accurate information to the state and they chose not to,” Yost said in a press statement. “By withholding information, ECOT misled state regulators at the Department of Education, and ECOT was paid based on that information. I believe this may rise to a criminal act.”

RELATED: Charter school failure could be largest in state history

Yost’s audit found that ECOT did not submit full information from its ActivTrak software to the Ohio Department of Education to detail what its students were doing while logged on to their computers. Yost harshly criticized ODE for not pushing for evidence that students were doing learning activities, rather than sitting idle.

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“With the level of incompetence displayed by both the school and ODE, the regulator, it’s amazing that any money went to education whatsoever,” Yost said. “The Department of Education did not require proof that the students were engaged in learning, and ECOT was more than happy to oblige in providing watered-down information that the Department inexplicably accepted, even though they knew more-detailed information was available.”

But Yost’s office has come under criticism as well. The state auditor gave the online charter school awards for good bookkeeping in 2014 and 2016 and Yost himself served as a guest speaker at ECOT’s graduation ceremony in 2014 and 2015.

Yost, who has served as state auditor for nearly eight years, is a Republican now running for attorney general.

Auditor of State Dave Yost spells out findings from his department’s audit of the ECOT online charter school. LAURA BISCHOFF / STAFF (Columbus Bureau)

A whistleblower who worked for ECOT said he told ODE last year that school officials ordered technology staff to manipulate student data with software used after the state demanded repayment, according to The Associated Press. The whistleblower said he informed Yost.

RELATED: Whistleblower: School used software to get more state money

More than 1,000 students from all corners of the Miami Valley were listed as enrolled at ECOT in 2016-17, including more than 600 who lived in the Dayton school district. Another 168 lived in the Hamilton district, 94 in Springfield, 82 in Kettering and 79 in Xenia.

Following Ohio law for charter schools, state funding for those students was first delivered to their “resident” school district, then deducted and delivered to ECOT. School districts complained that they suffered a loss, as a full $6,000 per student was deducted from their bottom line, even though the state funding formula only gave them $3,000 or $4,000 in state money per regular student, depending on the district.

The Electronic Classroom of Tomorrow closed in January aver an attendance and funding scandal. (Columbus Bureau)

ECOT suspended operations Jan. 19 after it lost support from its sponsor, Educational Service Center of Lake Erie West. The online charter faced a court-order that it repay the state for over-reporting student attendance. The school claimed to be one of the nation’s largest online K-12 schools with more than 12,000 students enrolled. The school first graduated students in 2001.

As part of enrollment reviews by the Ohio Department of Education, ECOT could not prove student participation levels for the number of full-time students it claimed in 2015-16 and 2016-17.

JANUARY: Emails show state battle as ECOT appealed to stay open

ECOT claimed it had more than 15,000 students while state investigators concluded the true enrollment was about 60 percent fewer.

So ODE announced it would claw back $60.4 million that had been paid to ECOT for 2015-16 and $19.2 million for 2016-17.

In July 2017, the state started withholding $2.5 million each month from ECOT payments. The next month, ODE started holding back even more money for the 2017-18 school year, based on ECOT’s announcement that enrollment had dipped further.

State officials calculate that Ohio has recovered $25.9-million owed by ECOT for overpayments. It is up to the Ohio Attorney General’s office to recover the remainder. Recovered money is expected to be redistributed to local school districts, though details have yet to be worked out, an ODE spokeswoman said.

Mohamed Al-Hamdani, a member of Dayton’s school board, said he doubts the state or any school district will ever recover all of the money in question from ECOT. He also called for the state to take a hard look at the for-profit charter school model.

“It creates almost a competition between charter schools and public (district) schools,” Al-Hamdani said. “It creates a weird system where both sides at times are rooting for the failure of the other. What that does, essentially, is both sides are rooting for failure of students, and that’s really troubling.

“This is a very political game right now with ECOT,” Al-Hamdani continued. “Hopefully politics can be put aside by both parties, and we can focus on what’s important. Let’s recover the money that taxpayers lost to this organization and make sure that the districts that were hit the most — which was usually urban districts — recover some of that money to provide the services we need for our students.”

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