Ohio Judge Denies ECOT an Injunction to Prevent State’s Search for Phantom Students

On Friday afternoon, Ohio was granted the possibility that perhaps someday it can recover some of the hundreds of millions of dollars in years’ of over-payments to the notorious Electronic Classroom of Tomorrow (ECOT). The Ohio Department of Education won a preliminary court victory on Friday, but in the context of state politics, for-profit educational management organizations, and huge political donations from wealthy charter school operators, regulation of charter schools remains a distant possibility in Ohio and in many other states.  However, thanks to Jenifer French, a judge in Franklin County Common Pleas Court, there is at least now a chance here in Ohio. ECOT has been in court trying to get a temporary injunction to prevent the state’s crackdown on what are ECOT’s obviously inflated claims about the number of students the state should be paying for.

Patrick O’Donnell, the Plain Dealer’s education reporter, explains the significance of Judge French’s decision: “Ohio can try to make the state’s largest online school, the Electronic Classroom of Tomorrow, return money to the state for having no proof of how much time students spent learning, Franklin County Common Pleas Judge Jenifer French ruled Friday. French denied a request from the school for a preliminary injunction to stop the state from attempting to recover some of the $106 million the school was paid for the 2015-2016 school year. But ECOT can still try to block that process in a hearing before the state school board and through a larger, ongoing court fight.” ECOT has already announced that it will appeal Judge French’s decision all the way to the state’s supreme court if necessary.

Judge French demonstrated on Friday, however, that she at least does not accept ECOT’s argument that the school deserves to have collected an annual fee of $6,900 per student in tax dollars even if students have been logging on for only an hour per day.  The e-school argued in court that the school should be required to document only that students are offered 920 hours of online curriculum each year, not that the students are actually using the curriculum. O’Donnell quotes Judge French’s response to that argument: “There is a public interest in ensuring that our children are receiving the education that our taxpayers are funding… This may be occurring at ECOT and other e-schools, but ODE (the Ohio Department of Education) has no way of knowing whether it is occurring because there are no records being maintained to ensure that it is.”

The school’s operators also argued in court that when new regulations were put in place last winter, the state somehow shifted the rules without enough warning. O’Donnell describes French’s response: “French rejected that argument, noting that the state has told online schools for years that how long its students spend online would be part of any attendance and payment review.”

ECOT also defended itself by presenting a 2003 funding agreement signed by an official at the Ohio Department of Education—a 2003 agreement that required the school merely to provide the curriculum. Officials who worked at ODE in 2003 explained to the court that the agreement came very early in the evolution of charter schools in Ohio and is no longer valid.  In her decision, Judge French’s declares that the 2003 agreement is surely invalid: “‘The Court finds that interpreting the Funding Agreement in the manner ECOT suggests, and enforcing an outdated 2003 agreement would be in violation of public policy” and would “require the state to continue paying hundreds of millions of dollars per year, without any ability to determine whether students are in fact participating in any curriculum at ECOT at all.”

Since early last week, when the Ohio Department of Education released the results of a new attendance audit of ECOT, Ohioans had been anxiously awaiting Judge French’s decision.  ODE conducted the audit over the summer with a sample of ECOT’s supposed students.  Early last week O’Donnell described ODE’s new findings: “ECOT was paid about $106 million in state funding last year for a reported 15,322 full-time students. But after a preliminary attendance review in March and a final review in August that required the school to verify its enrollment through student log-in durations, the department has concluded that ECOT’s actual verified enrollment is 6,313 students.  Based on the final determination, the department could try to force ECOT and its politically influential founder, Bill Lager, to repay about $60 million to the state.”  And potentially much more if there is a retroactive claw-back for over-payments in previous years.

After Judge French’s decision, the Columbus Dispatch optimistically editorialized: “If ECOT, which has vowed to appeal, loses the fight, taxpayers stand to recoup $60 million of the $106 million paid to the school last year.”  Time will tell, however, whether Ohio can succeed in cracking down on charter school fraud. As ECOT’s appeal moves through the court system, we’ll see if William Lager is powerful enough to protect ECOT and continue cheating taxpayers.  Because of the complicated way Ohio calculates and routes funding for charter schools, a significant part of the dollars being diverted to ECOT are coming not just from the state but also from local school levy dollars.  Neither the state nor local school districts can afford to be losing the tens of millions of dollars being paid to ECOT as tuition for phantom students.


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