Ohio State Board of Education Demands that ECOT Return $60 Million It Overcharged the State

Yesterday afternoon, members of the Ohio State Board of Education voted 16-1 to demand that the Electronic Classroom of Tomorrow (ECOT), Ohio’s large and notorious cyber charter school, pay back $60 million it overcharged the state last year for students who were not participating full-time in its educational program. The Plain Dealer‘s Patrick O’Donnell reminds readers that ECOT has claimed an enrollment of 15,300 full-time students, while log-in data for the 2015-16 school year confirms the enrollment of only 6,300 students participating as state law requires: 5 hours-per-day (or 20 hours-per-week) (or 920 hours-per- year).

Today’s 16-1 vote margin among members of the State School Board demonstrates that opposition to ECOT’s theft of tax dollars has become bipartisan. After all, Ohio is an all-Republican state with both houses of the legislature and the governor’s mansion controlled by Republicans. The State Board of Education—part-appointed and part-elected—is also dominated by Republicans.

ECOT has taken the state to court to try to block the state’s claw-back of $60 million paid to the school last year for phantom students. O’Donnell fills in the legal background. Last September, Franklin County Common Pleas Court Judge Jenifer French upheld the Ohio Department of Education’s finding that many students have been logging in only about an hour per day. ECOT appealed Judge French’s decision, and it is expected that the Franklin County Court of Appeals will rule on ECOT’s appeal later this summer. To block yesterday’s vote by the State School Board to uphold the findings of a hearing officer at the Ohio Department of Education, however, ECOT had filed an emergency injunction in the Franklin County Court of Appeals. Last Wednesday, however, ECOT lost its bid to prevent yesterday’s vote.

Catherine Candisky of the Columbus Dispatch quotes Neil Clark, ECOT’s lobbyist, responding to yesterday’s overwhelming vote against ECOT by the State School Board’: “Any order (to repay the money) is irresponsible, premature, and vindictive until the court appeals are exhausted.” Unfortunately the matter will not be resolved quickly.  Clark declared that the school—founded by William Lager, a major Ohio Republican political donor, and operated by Lager-owned privately held management companies—will appeal to the Ohio Supreme Court.

Candisky describes ECOT’s plea for mercy after yesterday’s overwhelming vote to demand the $60 million repayment to the state: “The decision, ECOT officials say, is a death blow to the school; they claim it will have to close if forced to repay the money.”

The ECOT scandal has been long running. (See this blog’s coverage here.)  Karen Kasler commented late yesterday for the Statehouse News Bureau: “Simply put, ECOT is paid by the state for the number of full time students enrolled, as all traditional and charter schools are. And a 165-page report from an Ohio Department of Education hearing officer determined ECOT counted 9,000 more full time students than it actually had last year, inflating its full time enrollment by 60% to receive $108 million in state funding.”  Kasler also comments on Rep. Andrew Brenner, chair of the House Education Committee and a non-voting member of the State Board, who was present at yesterday’s meeting: “He’s also a supporter of ECOT. And though the battle between ECOT and the Department of Education has been going on for a year, Brenner said he thinks the board could have held off on its vote to allow time to look for more data to show what’s happening at the online school.”

The press has doggedly kept up the pressure on the legislature, the Department of Education, and the State Board of Education to stop the ECOT scandal.  Here is the most recent example, an editorial from yesterday morning’s Akron Beacon Journal warning members of the State Board of Education about what would be at stake in their vote yesterday afternoon: “The State Board of Education meets today, and the members have an opportunity to strike a blow for accountability and quality in the funding of public schools. A month ago, a state hearing officer ruled that the Electronic Classroom of Tomorrow failed to justify roughly 60 percent of its enrollment.  Now is the moment for the board to order that the online school pay back the money it claimed under false pretenses… The on-line school has been nothing if not brazen. It has argued for months, through its lobbyists and in court, that it does not have an obligation to ensure that students actually participate in learning… The State Board of Education has good reason to accept the findings and recommendation of the hearing officer. Collecting the money the state overpaid isn’t about shutting down ECOT. It’s about accountability and quality, ensuring that public dollars serve the intended purpose.”

Ohio’s Notorious E-Charters Evade Regulation: ECOT Saga Drags On and On and On

Ohio’s biggest charter school, the notorious e-school, the Electronic Classroom of Tomorrow (ECOT), held a big rally in Columbus early this week. Rick Teeters, ECOT’s superintendent, told all the school’s teachers and students to show up, even though the rally happened in the middle of the school day. Maybe everybody was expected to go home afterwards and study online until midnight.

ECOT’s founder, William Lager, made an emotional speech bragging that his school has provided more choices for those who have few. Lager didn’t mention, of course, the hundreds of millions of tax dollars the school has been receiving year after year from the state on a per-student basis. Neither did he say anything about the $60 million from last year alone that the Ohio Department of Education says ECOT fraudulently charged the state for students who did not really attend school at ECOT last year. ECOT is trying to avoid paying back the money.

In Ohio, pretty much everybody knows that ECOT is a huge scam, but because Ohio is an all-Republican state without any checks and balances at all, and because William Lager keeps on contributing to the campaign coffers of members of the legislature, no strong law has been passed to stop the ripoff.  And now, in the biennial budget bill the House passed on May 2, nobody will even claim the language that mysteriously appeared to undermine oversight of Ohio’s charter school sector.

Under enormous pressure from the press last year, the legislature did tighten the regulatory process to demand that the online academies must now provide documentation that students are at their computers doing 20 hours per week of work in order to be counted.  ECOT has continued to maintain that it has, as the law has specified for years, been providing 920 hours of curriculum for its students each year. But, says ECOT, the state never asked for attendance records in the past, and the state changed its demands suddenly and illegally.

ECOT has been in court trying to block the new regulations. However a Common Pleas Court rejected ECOT’s demand that the court block the state’s effort to claw back two-thirds of what ECOT was paid last year, when ECOT was able to document the participation of only 6,300 of the 15,300 students the school claimed were enrolled. After ECOT lost its case in Common Pleas Court, ECOT appealed the case.

Working assiduously to bog down the court proceedings, ECOT demanded the removal of appeals court Judge Gary Tyack because he made the mistake of telling the truth in a comment he made about ECOT.  Here’s what Tyack said: “The General Assembly cares more about what Mr. Lager (founder of ECOT) and David Brennan (founder of other large e-schools) think than about what I think, frankly.” “It’s hard to ignore the fact that between the two of them they’ve probably gotten a billion dollars worth of State funds that would have gone to public schools because of their clout. In Russia we call them oligarchs. Here, we don’t call them anything. We call them influential donors.”  Maureen O’Connor, the Chief Justice of the Ohio Supreme Court, refused this week to capitulate to ECOT’s demand that Judge Tyack be removed from the case. The case now moves forward; we must await the final decision of the Court of Appeals.

ECOT not only tried in court to block the state’s crackdown on e-school attendance reporting; it also filed an administrative appeal in the Ohio Department of Education itself. But this week ECOT lost that administrative appeal. On Wednesday, the Ohio Department of Education denied ECOT’s administrative appeal and demanded that that ECOT pay back $60 million in fees it overcharged the state last year. The decision of the Department of Education’s hearing officer is not final; the state school board  still needs to vote to seek recovery of the money. We’ll see how that goes; after all, the Ohio state board of education is dominated by a coalition of elected Republicans and members who have been appointed by Republican Governor John Kasich.

Then there are the mystery amendments that appeared in the fine print of the budget bill passed by the Ohio House on May 2.  Most of these last-minute amendments would weaken state oversight of the organizations that sponsor charter schools—sponsors who are paid by the state to provide oversight but who have no incentive to close the huge e-schools they supposedly oversee. The amendments are  pro-ECOT and anti-regulation.

Andrew Brenner, the chair of the House Education Committee, inserted a last minute amendment to change the way sponsors are rated. The state currently judges charter school sponsoring organizations by the quality of the schools they are supposed to oversee, but it weights the schools according to the number of students they serve. Here is the Akron Beacon Journal’s editorial board commenting on the change proposed by Andy Brenner to weight every school—no matter its size—equally in a sponsor’s evaluation: “For instance, ECOT has 15,000 students, or nearly one-half of those enrolled in the 59 schools sponsored by the Educational Service Center of Lake Erie West. Treat the academically challenged ECOT as one school, and it would rate as a tiny fraction of its sponsor’s portfolio.  The sponsor would receive a higher rating, assuming its other schools perform well enough… In the case of ECOT…. with those numbers in mind, the re-weighting, as proposed by Andy Brenner, diminishes the commitment to students, or what charter schools claim as their first purpose. ECOT would be better off. So would the sponsor.”

Nobody knows who added other language to the House budget to protect the organizations that sponsor the huge and notorious online charter schools. Some legislators are even blaming the Legislative Service Commission, the agency that crafts the language of bills, for adding the language that favors ECOT and its sponsor. The mysterious amendment to the House budget, explains Patrick O’Donnell of the Plain Dealer, “would prevent certain ESCs that take on online charter schools from losing oversight and income from the schools, regardless of their (the schools’) ratings in the future.”

Doug Livingston of the Akron Beacon Journal provides important background about the incentive the Ohio’s legislature has provided for  years encouraging the Education Service Centers to sponsor the giant online academies: “Sponsoring large e-schools is a money-maker for educational service centers….  For each student enrolled in one of their charter schools, the sponsor gets 3 percent of the state funding that follows the students from the local school district where he or she would otherwise attend. At e-schools with more than $100 million (every year) in state revenue, the sponsor fee can be worth millions.” Now the mysterious new budget amendment further protects the Education Service Centers—letting them off the hook when the schools, which they are being paid huge sums to oversee, fail to perform.

Even the pro-charter Thomas B. Fordham Institute wants better oversight of Ohio’s e-charters and wants the mystery amendment removed from the fine print of the state budget.  Livingston quotes Chad Aldis of the Fordham Institute explaining what is wrong with the mystery amendment: “The change would allow an educational service center that sponsors charter schools to bring on a statewide online charter school and maintain sponsorship of it even if the academic outcomes were poor… Essentially, the sponsor would have an exemption from the academic accountability portion of the state’s sponsor evaluation system.”

The ECOT saga drags on and on in Ohio, where it would seem money and state politics make charter school regulation impossible.  Here, summarizing the current operation of Ohio’s super-majority, one-party, Republican legislature, is Columbus Dispatch columnist Darrel Rowland: “They didn’t teach this in ‘How a Bill Becomes a Law.’ A mysterious amendment makes its way into a state budget bill. One by one, lawmakers, including the speaker of the House, express surprise that the three-paragraph provision was part of the measure they just approved, and all deny knowing how it got there. A Legislative Service Commission staffer eventually gets the blame.”

This blog has covered the long-running ECOT saga here.

Powerful ECOT Blocks Crackdown on Inflated Attendance Reports from Several Ohio Online Schools

For years and years, Ohio has negligently failed to demand that online charter schools submit accurate attendance records. In the meantime the state has kept on paying the schools for the students they claim to serve. While the state has continued to say it would crack down, oversight has been blocked by power and money.

More specifically, in 2016, the Ohio Department of Education began asking for attendance records, but the largest of the schools, the Electronic Classroom of Tomorrow (ECOT), said it hadn’t been collecting the information because the state had never asked the school to document that students were spending time online at the e-schools. The state, it said, had required the school to provide 920 hours of curriculum for its students every year, but not to prove the students were actually sitting at their computers using the materials. It seems clear that political contributions to Ohio’s legislators from William Lager, ECOT’s founder and for-profit operator, ensured that the legislature avoided consideration of any kind of law to demand the submission of an accurate student count.

A year ago, the legislature changed the rules and asked the Ohio Department of Education to begin collecting the data.  And the Department conducted a preliminary analysis that showed that ECOT, which collected $109 million for educating the 15,300 students it says it serves, must return $64 million for the 2015-2016 school year alone. ECOT went to court, and after a judge ruled that ECOT must pay back the money and start submitting accurate numbers, ECOT appealed the decision. This blog has been tracking the ECOT scandal.

Patrick O’Donnell reports for the Plain Dealer that, “ECOT lost its first challenge in Franklin County Common Pleas Court and is now appealing its case to the 10th Ohio District Court of Appeals. That court had its hearing on the case earlier this month and a ruling could come in the next couple of months. A dispute over one of the judges on the three-judge panel comparing ECOT founder William Lager, a major donor to Ohio Republicans, to a Russian oligarch could delay that ruling.”

O’Donnell explains that other online schools in the state have also been found inflating their students’ numbers, but as ECOT’s lawsuit drags on, the state education department has been unable to crack down on the smaller virtual academies: “Ohio’s attempts to recover about $20 million in state tax funding from eight online charter schools has stalled for more than six months while a much larger battle over more than $60 million from e-school giant ECOT lingers in appeals court.  The year-long fight between the Ohio Department of Education and ECOT… has also delayed the state legislature from sorting out how to avoid e-school funding controversies in the future.  Eight months after Ohio Auditor Dave Yost called on legislators to find a better way to measure how well online schools educate students and a better way for Ohio to fund the schools, legislators have not acted.  Despite many agreeing that Ohio needs to overhaul its funding of online schools, no one has suggested a single bill, held a single hearing or publicly called for any research.”

Actually Andrew Brenner, the chair of the Ohio House Education Committee, has now proposed a change in the e-school evaluation process.  But it is a change that would relax state oversight instead of strengthening it.  Today, in the way Ohio oversees the many nonprofit organizations that are permitted to sponsor charter schools, there is a requirement, “that the academic performance of the multiple charter schools in each overseer’s portfolio of schools be weighted by the number of students in each school… As the evaluation ratings stand now, the state report card grades for a 10,000-student online school count 50 times as much as grades for a small, 200-student neighborhood charter school.  If the big school has great state grades under current rules, the (sponsor’s) entire portfolio  of schools looks good when results are averaged together. But if the bigger schools have poor grades, as some large online schools do, the entire collection of schools looks bad.” In fact the huge online academies are notorious for their dismal ratings.  O’Donnell quotes Stephen Dyer, a former legislator and journalist describing Andrew Brenner: “He’s doing the ECOT fix. Wonderful.” O’Donnell confirms Dyer’s suspicion: “ECOT and its supporters backed a similar proposal two years ago, but failed to gain legislative support.”

Joe Schiavoni, the minority leader of the Ohio Senate, who has repeatedly proposed a bill to crack down on lax attendance reporting by the e-schools, believes the proposed change is aimed at relaxing standards for the all-powerful virtual academies: “This would be a break for them. The cynic in me says they are looking for a break.”  The bill Schiavoni has introduced in at least two different legislative sessions to regulate collection of attendance records at the e-schools has never made it out of committee in Ohio’s all-Republican dominated legislature.

Despite that many people across the country seem to believe it is possible to regulate charter schools to stamp out fraud and corruption, watching Ohio’s ECOT scandal has convinced me that money and power will render significant oversight impossible. However, in the past week there has been one small bright spot.  Paolo Demaria, Ohio’s relatively new Superintendent of Public Instruction, just turned back $22 million in federal Charter Schools Program funds to the U.S. Department of Education. The federal Charter Schools Program invests in new charter school startups, and to his credit, Demaria says Ohio can’t use all the money because there are not enough quality applicants.

Here is the back story, in case you have forgotten. In the summer of 2015, a huge public outcry arose over $71 million granted to Ohio from the federal Charter Schools Program. David Hansen, the man who wrote the federal grant proposal, was fired because his proposal was based on the false promise that our legislature had cracked down on sponsors of charter schools. But the U.S. Department of Education made the grant anyway. Ohio’s Congressional delegation and especially Senator Sherrod Brown demanded that the U.S. Department of Education provide extra oversight of Ohio’s grant because our state’s regulations have been notoriously weak.

Now Superintendent Demaria explains that Ohio has cracked down—at least somewhat—and due to stronger oversight, the state does not have enough strong applicants to use all the grant money. Again, here is Patrick O’Donnell: “In a letter sent last week, Demaria said the state will use $49 (million) of the $71 million over five years, not the full amount. He said the lower amount ‘more accurately reflects our eligible pool of prospective community school grantees based on our shared priorities’ of only giving money to strong schools.”  Big problems remain with state oversight of the sponsors.  O’Donnell reminds us: “Only five of the more than 60 sponsors in Ohio earned ‘effective’ ratings and none were rated ‘exemplary’ in the fall. The vast majority were rated as ‘ineffective’ or worse… The state is looking to shut down five charter school sponsor authorizers it rated as ‘poor’… as part of a plan to improve charter schools across the state.”

Superintendent Demaria deserves credit for his integrity.  We shouldn’t hold our collective breath, however, about the capacity of Ohio’s legislators to create regulations that might turn off the flow of political contributions.

School Privatization Means Loss of Public Investment to Profits and Sacrifice of Students’ Rights

Here is how political scientists Jacob Hacker and Paul Pierson begin their newest book, American Amnesia, that explores the subject of America’s capitulation to the belief that government is the problem, not the solution to our society’s concerns: “This book is about an uncomfortable truth: It takes government—a lot of government—for advanced societies to flourish. This truth is uncomfortable because American’s cherish freedom. Government is effective in part because it limits freedom—because, in the language of political philosophy, it exercises legitimate coercion. Government can tell people they must send their children to school rather than the fields, that they can’t dump toxins into the water or air, and that they must contribute to meet expenses that benefit the entire community. To be sure, government also secures our freedom. Without its ability to compel behavior, it would not just be powerless to protect our liberties; it would cease to be a vehicle for achieving many of our most important shared ends… Government works because it can force people to do things.” (American Amnesia, p. 1)

Exactly how our turning away from government has affected public schools is the subject of a fascinating analysis by Alex Molnar, Dismantling Public Education: Turning Ideology into Gold.  Molnar—a Research Professor and Publications Director of the National Education Policy Center at the University of Colorado—painstakingly traces the history of the development of public education as “an egalitarian institution that was redistributive in its effects… Public education in the United States has from its earliest days been structured to embody and strengthen representative democracy by inculcating democratic values….”  But, “The major education reforms of the past 35 years—education vouchers, charter schools, tuition tax credits, and education savings accounts—all seek to remove public schools from the control of elected bodies, to subject them to the ‘laws’ of the ‘market’; and to put them at the service of the economic elite.  The world being called into existence is based on the belief that anyone, but not everyone, can succeed—a world of winners and losers, each of whom has earned his or her fate.” It is also a world where “the progressive edifice that Roosevelt… constructed (in the New Deal) would have to be set aside, taxes on wealth and profits reduced, wages suppressed, and a greater share of government costs shifted to the working class.”

Molnar marks the beginning of our times with the economics of Ronald Reagan, which “replaced the citizen’s democratic right to a ‘voice’ in shaping their public schools with a consumer’s choice to ‘exit’ schools. Under the banner of ‘school choice,’ public education would thus be removed from democratic control and reformulated as a commodity to be ‘chosen.'” Our society has been wooed away from supporting public schools. “Under pressure from and with the aid of charitable foundations, wealthy philanthropists, and ideologues, government policy makers have steadily shifted control of the schools from locally elected school boards to appointed governing bodies. A for-profit school sector has emerged that depends entirely on taxpayer and philanthropic funds. Accountability has been shifted from government regulatory oversight mechanisms to ‘market discipline.’… Getting this myth ‘believed’ meant new opportunities to turn tax dollars into profits—profits from, for example, paying a few teachers more and many teachers less; profits from designing standardized tests; profits from renting school facilities; profits from managing schools; profits from data management systems and test scoring systems; and profits from selling software platforms and computing devices. Best of all, these profitmaking opportunities came with little or no government oversight to thwart self-dealing and ferret out fraud and abuse.  Oversight and regulation had by this time been successfully characterized as innovation and achievement killers.”

In his analysis Molnar highlights two prominent abuses that have emerged with the wave of school privatization—the removal of what Hacker and Pierson call “the coercive power of government”—regulation and oversight which are said by the privatizers to kill innovation, and the distortions that result when government funding flows to private profits. Conveniently, two exposes in the press this week—mere examples of the cascade of stories we are reading about abuses in charter schools and other privatized education ventures—exemplify the very problems Molnar highlights.

The first, These For-Profit Schools are ‘Like a Prison’, comes from Pro Publica and was jointly published at Slate.  It is an expose of staff abusing students in private, for-profit alternative schools run by Camelot Education. Camelot “contracts with traditional school  districts to run about 40 schools across the country—schools that serve kids who have gotten into trouble, have emotional or behavioral issues, or have fallen far behind academically.  In 2015, Camelot reported more than $77 million in revenue, more than a third from contracts with the school districts of Philadelphia, Houston, and Chicago.  The company also maintains a large presence in some heavily Hispanic old factory towns of Pennsylvania.” Pro Publica‘s story covers problems in York and Reading’s Camelot schools in some depth. “Some students are reassigned to Camelot because they committed serious disciplinary infractions at prior schools, such as possessing drugs or fighting. In other cases the reasons are more nebulous. In interviews, several families described feeling pressured by school-district officials to… (transfer their students to) Camelot-run schools simply because their children were far behind academically, couldn’t speak English fluently, or had special needs the district didn’t want to meet.” “Moreover, state officials in Pennsylvania have designed the accountability system in a way that obscures the academic results of the state’s alternative programs. Test scores of thousands of alternative students are never tagged to a school, instead counting only toward the district’s performance, making it virtually impossible to gauge and compare the quality of individual schools.” “Most Camelot students share two characteristics. They are nearly all poor. And they are overwhelmingly people of color.”  Pro Publica‘s report describes Camelot schools as resembling “the nation’s incarceration system: racially biased, isolated, punitive, unnecessarily violent and designed above all else, to maintain obedience and control.”

Because Camelot schools are privately operated, even courts investigating complaints of physical abuse of students have struggled to acquire evidence or get staff to testify after their schools threatened staff with job loss. Some parents describe being pressured to sign away their children’s due process rights at the schools.  The Pro Publica reporters describe a lawsuit brought against a Pensacola, Florida Camelot alternative school: “Pensacola’s school district stayed out of the Tillery cases. It let Camelot investigate and address them, said Vickie Mathis, the director of alternative education for the district. ‘They are Camelot employees,’ she said. ‘We expected Camelot to do the investigation and come to a finding and take action if there was a finding of wrongdoing.'”  The reporters do cite two school districts—Reading, Pennsylvania, and New Orleans—where, to protect students’ rights, public “school officials cut ties with Camelot as abuse allegations emerged.”

Then there is Ohio, where enormous profits from the online academies are being used to block the very regulations that would protect the state’s investment in its public schools. The legislature needs to increase oversight to prevent massive over-payments by the state for students the e-schools claim are enrolled, but who do not participate actively in online education.  Over-payments for phantom students in Ohio’s electronic schools have been regularly reported in the state’s newspapers, but this week the story made headlines in Education Week: Student Login Records at Ohio E-Schools Spark $80 Million Dispute: “The Ohio education department could seek repayment of more than $80 million from nine full-time online schools, based on audits of software-login records that led state officials to determine the schools had overstated their student enrollment. The Electronic Classroom of Tomorrow (ECOT), for example, was paid for 15,322 full-time students during the 2015-16 school year, but state officials said they could document just 41 percent of that total… Under Ohio law, schools are expected to offer students 920 hours of learning. But for the average ECOT student, state officials were able to document just 227 hours spent using the school’s learning software….  Historically, the Ohio education department determined student attendance, and thus enrollment, based on paperwork submitted by e-school representatives, who certified that students were enrolled and had been offered the 920 hours of learning required by state law.”

Now when regulators from the Ohio Department of Education are cracking down to insist that the state pay only for students who are actively participating and that e-schools do more than merely offer the curriculum, the e-schools are pushing back. ECOT has taken the state to court to block the enforcement of stricter regulations, and William Lager, who reaps the profits from both of his privately owned companies that manage ECOT, has hired the state’s most prominent lobbyists as well as keeping up the contributions to legislators’ political campaigns. The Ohio House and Senate, not surprisingly, continue to refuse to pass strict and explicit regulations. (This blog has covered the ECOT phantom student scandal here.)

Together these articles explore and expose what has been happening through school privatization and school reformers’ efforts to undermine the coercive power of government.  Only government—the law and its democratic enforcement—can protect students’ civil rights and our public investment in education.

ECOT Tries to Hold On to Over $60 Million in Tax Dollars It Collected for Phantom Students

The Ohio legislature is in the midst of its lame duck session—the opportunity for lawmakers to do something about the outrageous scam at the Electronic Classroom of Tomorrow (ECOT).  And today, according to Plunderbund, Senate Bill 3, an omnibus education law with 29 amendments is to be introduced in the House Education Committee.

A big question is whether the legislature will do anything at all about regulating the out-of-control online charter sector. Here are some of the issues, according to Plain Dealer education reporter, Patrick O’Donnell, who explained last week that, “ECOT, Ohio’s largest online school, has lost a court appeal that would have blocked the state from trying to ‘claw back’ as much as $65 million the school received last year…”  ECOT—which hasn’t been keeping accurate log-in attendance records, and which has claimed that the state requires it merely to provide 920 hours of instruction for the 15,000 students the school claims it educates but not to require its students to actively use the materials for at least 20 hours per week—took the state to court earlier this year to try to block the state’s crackdown on its massive reimbursement for phantom students. ECOT has lost in court at every turn as it has appealed its case, but the school’s leaders are shameless in demanding that the state continue paying the school for the students it claims, without proper records, are enrolled.  Its total tax-dollar reimbursement is currently over $100 million, but the state wants ECOT to return over $60 million.

O’Donnell reports that now in the legislature’s lame duck session, “The schools are asking state legislators to add a ‘hold harmless’ provision to another bill in the next few weeks to stop the state from using attendance reviews of the schools to take millions of dollars of state funding away from them.”  O’Donnell describes the pressure being brought on ECOT’s behalf by Neil Clark, Ohio’s most powerful Republican lobbyist, who represents ECOT and who alleges that “the Ohio Department of Education ‘created new rules for e-schools and then applied the new rules retroactively.'”

Last March, Senate Minority Leader Joe Schiavoni of Youngstown introduced a bill to try to establish oversight of charter school enrollment.  In a press release he declared: “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 would have required e-schools to keep accurate records of the number of hours student spend doing coursework. It would have required the online school to notify the Ohio Department of Education if a student failed to log-in for ten consecutive days.  It would have required that a qualified teacher check in with each student once a month to monitor active participation.

There was always a very dim hope that wisdom and the relentless exposure by the Cleveland Plain Dealer, the Columbus Dispatch and the Akron Beacon-Journal might have pressured Ohio’s lame duck legislature to consider Schiavoni’s bill, but it was sidetracked last summer to the Senate Finance Committee by the Senate leadership in an attempt to get around a sympathetic Peggy Lehner, chair of the Senate Education Committee. In Ohio’s supermajority Republican legislature, Senator Schiavoi’s sensible bill will die at the end of the legislative session.

Now as December begins, with only a couple of weeks left in the lame duck session, ECOT and its fellow online schools are begging to avoid the threatened claw-back of their funding for this year, because they say they were not properly warned of the new regulations that kicked in last winter.  After all, the problem is more widespread than ECOT. O’Donnell reports: “The state also ordered Provost Academy in Columbus to repay $800,000 after finding that it had the equivalent of just 3 full-time students, not the 160 it had claimed. And it found that Akron Digital Academy could not document 80% of its students and that the Buckeye Online School for Success could not document any of its 900 students.”

Jim Siegel of the Columbus Dispatch reports that as the e-schools are trying to pressure legislators to save their funding, ECOT’s hearing before the Ohio Department of Education—the one the school has attempted repeatedly to block in court—began yesterday.  The department is meeting with representatives of the online schools as they continue trying to appeal the department’s ruling earlier this year.

Like O’Donnell, Siegel has wondered whether ECOT’s demand for a one-year hold harmless might be added as an amendment to another bill—perhaps to the already highly amended omnibus Senate Bill 3.  When he posed the question to Republican leaders in the House, “(B)oth (Andrew) Brenner, (chair of the House Education Committee) and Speaker Cliff Rosenberger, R-Clarksville, said they do not expect to add proposals that have not already been heard in committee as separate bills. Asked specifically about help for e-schools, Rosenberger said, ‘We’re not going to be seeing anything like that.'”

Siegel believes, however, that Andrew Brenner will still try to figure out how to waive this year’s claw-back of taxpayer funds from the e-schools. Andrew Brenner is a “nonvoting member of the state Board of Education,”  who has told Siegel: “I’m going to be talking to the board president and a couple of others to see what we can do to at least get us through this last school year, and then maybe we can have a permanent fix going forward… Brenner said his key concern is that even if the state Department of Education is legally authorized to ask online schools to provide more detailed login durations to justify enrollment figures, state officials should not have implemented the policy in the middle of the school year… It would have been more reasonable, Brenner said, for the department to warn schools this year, and then start docking their funds next year if enrollment could not be verified by login durations.”

Notice that Brenner’s focus is protecting the Electronic Classroom of Tomorrow. Remember that legislators have have been encouraged to consider ECOT’s well-being through political contributions from ECOT’s operator William Lager. As columnist Brent Larkin declares in the December 4, Plain Dealer: “Ohio is saddled with a damaging reputation as home to some of the nation’s worst charter schools. Worse yet, none of this seems to bother the state’s legislative leaders, whose breathtaking incompetence and corruption prevent them from angering their campaign contributors by making the tough decisions needed to improve the state’s educational standing.”

Brenner doesn’t seem to care that funding for Ohio’s massive unregulated online charter school scam is being sucked out of the state’s education budget and that Ohio’s way of funding charter schools even steals back money from local school districts’ levy funds.

This blog has covered the long-running scandal of Ohio’s failure to regulate ECOT here.

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.

Ohio’s Notorious ECOT Tries to Make Its Case In Court

Attorneys for the Ohio Department of Education and Ohio’s largest and most notorious online charter school, the Electronic Classroom of Tomorrow, have been in court all this week tussling, as the Columbus Dispatch‘s Jim Siegel explains, “over ECOT’s lawsuit to block the state from using new attendance standards to impact funding….”  “As the state’s biggest online school, ECOT has taken the lead in fighting efforts by the Ohio Department of Education and Gov. John Kasich to use log-in durations to determine whether students are getting state-minimum ‘learning opportunities.’  ECOT, which has claimed the state requires it to provide 920 hours of (annual) curriculum but not prove that students are actually participating in ECOT’s education program, could lose $80 million or more based on an initial attendance audit in March, which found students were logging in for only about an hour per day.”

The problem across Ohio’s very large on-line sector is that the schools—and there are several operated by specific school districts as well as the huge ECOT and the Ohio Virtual Academy, an affiliate of K12, Inc.—have not been keeping careful records to confirm full-time participation. Ohio, which says students at e-schools ought to be online for five hours per day, pays the schools over $6,000 every year for each full-time student. In the past, the state has not pressed this matter, but last fall the legislature enacted House Bill 2, a very basic law to begin to regulate charter schools. ECOT’s lawsuit claims that the state is applying the new HB2 retroactively and without sufficient warning.

Widespread press coverage of the scandal at ECOT has put pressure on the all Republican legislature that has, in the past, been more lenient. Siegel quotes the chair of the Ohio Senate’s Education Committee, Peggy Lehner commenting on this week’s trial: “This is obviously a significant problem with online schools that we’re going to have to resolve. Clearly we have an obligation both to the students and the taxpayers that they are taking advantage of the learning opportunities for which we are paying.””

The Associated Press quotes the common sense of the attorney for the state, Douglas Cole: “Students deserve to actually receive an education, not merely be offered the possibility of one. ECOT is claiming it is entitled to a money tree that never stops growing and never stops bearing fruit.”

Plain Dealer reporter, Patrick O’Donnell describes how ECOT’s attorney, Marion Little, framed ECOT’s case to avoid oversight: “In opening arguments… lawyer Marion Little said the state rules and a 2003 contract with ODE only require the Electronic Classroom of Tomorrow to prove that students are enrolled, not that they are engaged in their lessons.  Little said that e-school funding is set by enrollment but the state this year has tried to ‘merge’ the ‘distinct’ and separate ideas of participation with enrollment to audit the school and put its funding at risk… He said that having to prove that students are participating is a much higher standard than traditional schools have to follow. Those schools receive state aid, he noted, even if students skip class.”

In a later report, Patrick O’Donnell describes the stonewalling of ECOT’s superintendent Rick Teeters, who “testified that the school has never tracked how many hours students spend on their lessons because it has never had to. ‘To my knowledge, we don’t have a tool to do that. We haven’t needed to. We haven’t been told that was something we needed to keep.’ ”

O’Donnell describes the response of Douglas Cole, the attorney for the state, who said ECOT should have noticed “at least three warnings before this year that the state could seek this ‘durational’ documentation: (1) The state’s funding manual for last year that said the state could seek it… (2) The school’s contract with its oversight agency known as a sponsor requires ECOT to itemize and record attendance daily… (3) House Bill 2, the charter school reform law passed last fall, requires participation of online classes to be documented in detail.  That law took effect Feb. 1.”

Mysteriously, when asked about the application of the legislature’s new law, HB 2, to ECOT, Teeters replied: “My view is that HB2 had no impact on ECOT.”

Teeters’ primary worry seems to be the penalty for ECOT if it is eventually required by the state to count its students accurately: “If the state requires ECOT to pay money back to the state—a ‘clawback’ of as much as 80% of its funding, by some estimates—the school would likely never be able to pay it back.  Even paying it back over time, he (Teeters) said, would put it in a financial ‘death spiral.’ ”

In a follow-up report Jim Siegel explains that on Tuesday, Aaron Rausch, director of the Ohio Department of Education’s Office of Budget and School Funding, spent five hours on the stand: Rausch said department officials initially got the idea to ask for detailed records of student participation in 2013, when state reviewers visited four charter schools and found the buildings void of students.  Each was operating as a correspondence school—a surprise to state officials. Schools showed no proof of student attendance, and each was ordered to repay a portion of its funding. Then in 2014, the state found that online Provost Academy had an operating manual that said students get five hours of credit for one hour of log-in time. When the problem was not fixed a year later, the state asked for log-in durations and eventually ordered the school to repay about 75 percent of its funding for that school year… Eight other online charter schools this year failed to document student attendance, putting portions of their funding at risk. Rausch said a number of the schools supplied additional data to the state last week.”

The ECOT case is important because ECOT has been receiving over $100 million each year in tax dollars—money coming from state and local public school budgets. In his court testimony Teeters pegged the money due to ECOT this year at $106 million. Much of this money has accrued in profits to William Lager, who owns the two privately held corporations that provide curriculum and operational services for ECOT.  Lager is deriving these profits from fees ECOT is collecting for phantom students.

Why do ECOT’s operators imagine they can win in court when other online charter schools have been capitulating by correcting their attendance figures and playing back money to the state?  Catherine Candisky and and Jim Siegel reported in February that: “William Lager, ECOT founder and operator, was the second-largest individual donor to legislative Republicans in the last election cycle, giving $393,500, plus another $202,000 in 2015.”  (This blog has covered the ECOT scandal here.)