Will Ohio’s Giant Online ECOT Charter School Close Suddenly Day After Tomorrow?

Imagine everybody’s surprise when, at 7:53 PM last Wednesday night, reporters from the Columbus Dispatch announced that Ohio’s notorious Electronic Classroom of Tomorrow (ECOT) will likely be put out of business on Thursday, January 18th.  ECOT’s final legal appeal of the state’s attempt to claw back $60 million in tax dollars overpaid to ECOT for the 2015-16 school year and another $20 million for the 2016-17 school year is still scheduled on February 13 for oral arguments before the Ohio Supreme Court.

Here is what we learned last Wednesday night from Dispatch reporters Catherine Candisky and Jim Siegel: “The Educational Service Center of Lake Erie West, ECOT’s long-time sponsor, informed school officials this week that it has initiated proceedings to suspend ECOT operations ‘at or near the end of the current semester’ and terminate its sponsorship contract… ECOT’s semester ends next Thursday, Jan. 18.”  “ECOT, a statewide online school opened in 2000, has become a lightning rod for controversy over the past two years, with a spotlight on its poor academic performance, nearly $200 million in payments to companies run by school founder Bill Lager, plus a highly publicized fight with the state over its inability to verify its enrollment largely through log-in data.”

Candisky and Siegel also report that last Wednesday, a spokesperson for the Educational Service Center of Lake Erie West also announced that due to the school’s financial problems, as of February, ECOT is unable to secure a bond for its fiscal officer. A bonded fiscal officer is a requirement in Ohio for the operation of a charter school.

ECOT has been charging the state a per-pupil fee for educating what it said in 2015-2016 were 15,000 students—a count ECOT reduced to 12,000 students for 2016-2017. But the school has never been able to document that thousands of students have been regularly logging onto their computers. In its own defense, ECOT has claimed the state requires it only to provide 920 hours of curriculum per year but not to prove that its students are actually using the curriculum.

Ohio’s legislature toughened the law in 2015, but ECOT has claimed it is protected by an earlier 2003 policy.  While the Ohio Department of Education alleges the school has been inflating its attendance numbers for years to collect millions of tax dollars, passage of the 2015 law finally allowed the state to crack down.  That is why the state’s attempted clawback of dollars overpaid to ECOT—$60 million for 2015-16 and $20 million for 2016-17—dates back only for the past two school years.

Then there are the enormous private profits being sucked out of the ECOT enterprise. Bill Lager, ECOT’s founder, privately owns the two companies that create ECOT’s online curriculum (IQ Innovations) and operate the school (Altair Management).  Lager contributes lavishly to political campaigns of the Republicans who make up a super-majority in the Ohio legislature tasked with regulating charter schools and to the political campaigns of the elected members of the Ohio Supreme Court, scheduled to hear the ECOT appeal in mid-February.

The state of Ohio has been reducing its contributions to ECOT by $2.5 million each month and escrowing the money while awaiting the school’s appeal through the court process. Ohio’s auditor Dave Yost has worried that if ECOT eventually declares bankruptcy, the public should protect its right to collect at least some of the money ECOT has stolen.

Many Ohioans are, like me, probably wondering whether it can possibly be true that ECOT might be shut down. It has seemed the ECOT scam will never be resolved due to the power of Bill Lager’s money in Columbus.

The first question is about sponsor hopping. In the past, when sponsors have shut down shoddy charter schools, the charter school’s board has simply found another state-approved sponsor who will take a chance on the school. But apparently that will be difficult for ECOT.  The Thomas Fordham Institute explains that Ohio House Bill 2, passed in 2015 to regulate charter schools, prohibits sponsor hopping for schools being shut down unless “the school finds a new sponsor rated effective or better, hasn’t switched sponsors in the past, and gains approval from the Ohio Department of Education.”  In a follow-up report, Candisky and Siegel add: “A modification to the contract between Lake Erie West and ECOT signed in April 2017 says if the school is not renewed due to lack of fiscal management, the school must close permanently and ‘the school shall not enter into a contract with any other sponsor.'”

The Ohio Department of Education resolved a second potential question about the school’s future as well last Thursday. Not only are ECOT’s finances in trouble, but also its academic rating has been dismal.  To improve its academic standing—not by improving the way ECOT serves its students but instead by lowering the public’s expectations for the school—ECOT had applied to become what Ohio classes as a “dropout recovery school.”  The state demands less academically of such schools that serve primarily older students who may be on the verge of dropping out of school or have already done so.  But, Candisky and Siegel report: “Adding to ECOT’s troubles, the Department of Education informed the school Thursday that it does not qualify as a dropout recovery school. ECOT was seeking the designation, which would have significantly lowered its academic requirements on the school’s annual report card. The department said 49.4 percent of ECOT students are between the ages of 16 and 21. State law requires a dropout school to be above 50 percent.”

The third and biggest question is political. Will the legislature find a way to save ECOT?  Candisky and Siegel consider this question in the context of what ECOT has cost Ohio taxpayers: “The school has received about $1 billion in tax dollars since it opened in 2000.” Then they quote Senator Peggy Lehner, chair of the Senate Education Committee, who has consistently demonstrated concern for Ohio’s public schools, though she has sometimes been silenced by her party’s leaders: “What they’ve been accused of is pretty egregious, frankly. When you see someone ripping off the state by that amount of money, there’s not much of an appetite for taking it easy on them.”

If ECOT is saved by some kind of last minute agreement, it will more likely be orchestrated by the Ohio House, where, “Rep. Andrew Brenner, R-Powell, chairman of the House Education Committee whose largest contributor is ECOT founder Bill Lager, said, ideally, the state would find a way to let ECOT students finish the school year by reducing the monthly payment.”

Candisky and Siegel also quote ECOT’s Superintendent about how the school might avoid immediate collapse: “Asked to provide options to avoid mid-year closure, ECOT Superintendent Brittny Pierson cited potential staff cuts and possible rate reductions with vendors including IQ Innovations and Altair Management, the companies run by ECOT founder Lager that have received nearly $200 million since the school opened.”

Of course there is also concern about ECOT’s students. Local school districts across the state have been forthcoming—promising to welcome any students who want to return to their schools. Nobody knows, however, exactly what kind of upheaval would occur. ECOT says this year it is serving about 12,000 students.  Candisky and Siegel paint perhaps a more realistic picture: “More than 20,000 students generally cycle through ECOT in a given school year, though state data show a number enroll for short periods or infrequently log into the school’s academic system.”

For a long time there have been serious questions about whether ECOT is really a school or whether it is primarily a giant scam to suck profits out of Ohio’s state and local tax dollars.

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Ohio Senate Committee Will Finally Hold a Hearing on Joe Schiavoni’s Bill to Regulate ECOT

Ohio State Senator Joe Schiavoni ought to be a hero to public school teachers and parents—and to citizens who support responsible stewardship of tax dollars.  Except that thanks to the power of the Republican leadership in the Ohio legislature, few people are really aware of Schiavoni’s heroic effort to put a stop to Bill Lager’s massive scam—the Electronic Classroom of Tomorrow.

Schiavoni is a Democrat and his bill to regulate online charter schools has been pushed aside for over a year now.  As Schiavoni explained in testimony last February, “Senate Bill 39 is the updated version of Senate Bill 298 from the last General Assembly.”  In March of 2016, Schiavoni first introduced a version of this bill—designed to reign in Bill Lager’s giant scam. ECOT was (and still is) charging the state, which pays charter schools on a per pupil basis, for students who have enrolled at ECOT but are not regularly logging onto their computers to participate in the educational program.

Here is how Schiavoni described the bill (then Senate Bill 298) at that time: “We need to make sure that online schools are accurately reporting attendance and not collecting tax dollars for students who never log in to take classes. Online schools must be held accountable for lax attendance policies. Without strong oversight, these schools could be collecting millions of dollars while failing to educate Ohio’s school children.” Schiavoni’s bill required e-schools to keep accurate records of the number of hours student spend doing coursework. It required online schools to notify the Ohio Department of Education (ODE) if a student failed to log-in for ten consecutive days. It required that a qualified teacher check in with each student once a month to monitor active participation. In the last legislative session, the bill was never fully debated and never brought to the Senate floor for a vote.

Schiavoni re-introduced the bill in February, and this afternoon at 3:15,  Peggy Lehner, the chair of the Senate Education Committee, is finally holding a hearing on Schiavoni’s bill.  When he testified in February about the bill he was introducing, Schiavoni explained why it is needed: “Other than the requirement that e-schools provide no less than 920 hours per year of learning opportunities, there are no specific statewide standards related to the number of hours per day or week that e-school students must be engaged in learning.  In an environment where a teacher is not physically able to see students in a classroom, this lack of accountability is very concerning.”

Schiavoni believes Senate Bill 39 will address the outrageous problems at Ohio’s on-line charter schools: “Senate Bill 39 requires each e-school to keep an accurate record of how long each individual student is actively participating in learning in every 24-hour period.  This information must be reported to ODE on a monthly basis, and ODE would be required to make this report available on their website. Senate Bill 39 would also require a teacher who is licensed by the Ohio Department of Education to certify the accuracy of student participation logs… on a monthly basis.”

Senate Bill 39 has some new provisions that were not in the original SB 298. To protect local  school districts, Schiavoni has added “a provision specifying that when the Auditor issues a Finding for Recovery from an audit of a… (charter) school, that money is returned to the school district.”  Serious questions have been raised about the $60 million clawback the Ohio Department of Education is currently trying to institute against ECOT, because ECOT has been robbing not only the state, but also local school districts.  Because of the way Ohio school finance works, a significant amount of the money redirected to charter schools comes out of the budget of the school district where each student resides.

As the ECOT scam has dragged on and mushroomed, the need for improved oversight by the state has become increasingly apparent as the press has exposed how millions of tax dollars are being diverted not only to Bill Lager but also to Lager’s privately owned, for-profit companies that manage the school and provide its curriculum.  We have also learned that sponsoring agencies are collecting very significant fees without providing any real oversight.

Schiavoni describes provisions in Senate Bill 39 to address these concerns:

  • “In the event that a student’s academic performance declines, the student’s parent/guardian, teachers, and principal must evaluate the student’s continued enrollment in the school;
  • “Requires e-school sponsors to report a school’s failure to comply with online learning standards to ODE;
  • “Requires e-schools to report their student mobility rate on their report cards…
  • “Creates a bipartisan ‘E-school Funding Commission’ to study what the actual costs are to run an e-school.”

Schiavoni describes why passage of his bill is so important: “While this bill focuses on strengthening the oversight of attendance policies and the accurate accounting of tax dollars, it’s also about ensuring our children receive a quality education. Unfortunately, the evidence is growing that some online schools are failing too many of our children.”

In the meantime, the Ohio Supreme Court has agreed to hear ECOT’s case against the state. Also, Dave Yost, Ohio’s auditor has begun escrowing a portion of ECOT’s state funding for the 2017-2018 school year to ensure that, if the court finds against the school for over-reporting its enrollment and if the school should declare bankruptcy as a result, the state could recapture at least some of the money Lager has stolen.

Bill Lager has kept ECOT open and kept on collecting public funding, much of it for phantom students—by looking for and continuing to find loopholes in Ohio’s notoriously weak charter school regulations. For example, on Monday, the Ohio Department of Education granted ECOT initial approval to switch its designation and become a Dropout Recovery School. ECOT, which has been chronically awarded F ratings by the state for its students’ deplorable graduation rate and test scores, will have its F rating automatically turned into a C, without any change in its academic performance because the state will understand the school to be educating students with greater educational challenges.  Its new rating as a Dropout Recovery School will save the life of its sponsor, the Education Service Center of Lake Erie West, whose existence has been threatened due to ECOT’s deplorable record. This blog has covered the ECOT scandal here.

It is time for the legislature to begin seriously cracking down.  A good start would be for the Legislature to pass Joe Schiavoni’s sensible law to protect our children and our tax dollars by requiring that e-schools accurately report the number of students they enroll.

Notorious Online ECOT Airs Melodramatic Ads but Finally Gives Up Data to State of Ohio

The Associated Press reports on developments in the long-running saga of Ohio’s notorious Electronic Classroom of Tomorrow (ECOT): “Ohio’s largest online charter school has taken a dispute with state education officials over access to attendance records to the courts and the airwaves, raising questions among critics over the use of taxpayer funds to fight state regulators… Before submitting the records, the school aired a pair of ads around the state painting the department in a negative light—the same department that provides 88 percent to the school’s budget… ‘If ODE closes ECOT, where will I go?’  senior Summer Muhaymin asks in one spot.  She describes a transient young life sleeping in bus stations and on park benches in which the Electronic Classroom has been her ‘only constant.’ The ad concludes with the message: ‘Ohio Department of Education: Keep your word. Keep ECOT open.'”

The same article reports that in a lawsuit the online school has filed against the state, ECOT charges that the state changed the rules mid-school year and imposed more stringent attendance reporting without enough notice and before the state was supposed to have begun enforcing a new law.  With an outrageous twist of logic, Neil Clark, Ohio’s most powerful Republican lobbyist, is reported to claim that ECOT filed the lawsuit to “hold the Ohio Department of Education accountable.”

ECOT has been pulling every possible string to avoid reporting student attendance data to the state of Ohio, which pays ECOT over $100 million every year for educating the over 15,000 students reported by ECOT to be attending its online academy full time.  The state of Ohio requires that online schools serve full-time students for 920 hours per year—five hours per day for 180 school days.  ECOT claims it should be paid by the state of Ohio for merely providing 920 hours of curriculum every year instead of being required to prove that its students actually use the curriculum for 920 hours per year. In recent weeks ECOT has sought at least two court orders to prevent the state from requiring the online school to submit attendance data, but the courts have instead insisted that ECOT submit its records to the Ohio Department of Education. Catherine Candisky of the Columbus Dispatch reports that finally, at the end of last week, ECOT capitulated, delivering “more than 25,000 documents, filling nearly 50 ‘bankers boxes,’ to the Ohio Department of Education to comply with a judge’s order.”

Ohio Senate Minority Leader, Joe Schiavoni (D, Youngstown) introduced a bill earlier this year—a bill which the Republican leaders of the Senate have never brought to a vote—to ensure that the state has the capacity to identify and stop paying the online schools for phantom students.  Schiavoni commented this week on ECOT’s continuing maneuvers to delay: “It’s unbelievable… They’re supposed to be revving up for the school year, making investments and improving the quality of education. Instead of making investments in students, they’re spending thousands of dollars on advertising, thousands of dollars to file the lawsuit, thousands of dollars to pay lobbyists.”

Ohio is a super-majority, all Republican state, however, where passage of regulations to reign in Bill Lager—ECOT’s founder and the owner of the privately held, for-profit companies that provide all services for the school—will necessitate the buy-in of Republicans in the legislature. The Dispatch‘s Jim Siegel reminded readers yesterday that “ECOT founder William Lager gave more than $1.2 million in disclosed donations from 2010-15, largely to legislative Republicans.”  Perhaps, however, the ongoing ECOT scandal has turned off even some Republicans in the legislature.  Yesterday Siegel reported that Rep. Mike Duffey of Worthington, a Columbus suburb, has been courageous enough to speak: “I think there should be complete transparency to the records… There’s no reason why, with public money going to something, that we shouldn’t be able to know all of those kinds of things.”

Although the online schools are required to serve full-time students for at least five hours per school day, a preliminary audit of ECOT earlier this spring found that students were averaging only one hour each day online.  ECOT’s lobbyists have claimed that its students do a significant amount of their school work off-line and that log-in records are not an accurate way to measure students’ engagement with the school and its curriculum. Jim Siegel reports Rep. Duffey’s speculation that while ECOT makes the argument that off-line work should count, ECOT has kept no records of the offline activities of its students: “If ECOT can show its students are doing four hours of offline work each day, that’s a strong justification for its attendance, Duffey said. But based on statements the school made to the state auditor’s office, such records likely don’t exist.”