COLUMBUS — The supposed public “watchdog” over failed Ohio internet charter school ECOT has agreed to repay the state $879,000, a small fraction of the total money it was paid by taxpayers for its longtime role in one of the largest financial debacles in state history.
Ohio Attorney General Dave Yost announced a settlement Wednesday by mutual resolution with ECOT’s “sponsor,” the Educational Service Center of Lake Erie West, regarding overpayments received from the now-closed Electronic Classroom of Tomorrow. In a written media release, Yost’s office said the amount represented “all funds in question” for sponsorship fees it received from ECOT.
In June of 2017 the State Board of Education voted 16-1 to accept the findings of a Department of Education review recommending ECOT pay back more than half of the $108 million of the state education funds it received for the 2015-2016 school year for having grossly overinflated its attendance. ECOT students worked from home on computers, and investigations found thousands of students performed little or no actual school work in return for ECOT’s payments.
“I feel like they’ve cheated the children and the taxpayers, and they should pay it back,” said Cathye Flory, a board member from Logan, said in 2017.
ECOT launched a massive taxpayer-financed lawsuit against the state to justify its payments and methods of calculating attendance, arguing it was required to provide only “learning opportunities,” not evidence of actual student participation. It lost a series of court cases, and the state eventually concluded ECOT had received about 123 percent too much money for the 2015-16 school year. The state later found ECOT had overbilled by another $19 million in the 2016-17 school year before being shut down.
None of the investigations dealt with the other payment calculations dating back to ECOT’s founding in 2000 by Bill Lager, who showered mostly GOP politicians with hundreds of thousands of dollars in campaign donations.
The Columbus Dispatch reported in October 2016 that the login information for 699 randomly selected students showed that as many as 70 percent missed so many days of school the previous year that they could be declared truant under state law.
Lake Erie West suspended the school in January 2018 as ECOT ran out of money. The closure forced roughly 12,000 students to find new schools for the second half of the school year and put hundreds of teachers and other staff out of work.
In ECOT’s 2016 state audit, auditors noted that ECOT’s contract with Lake Erie West didn’t “specify how the school should document ‘student participation’ pursuant to requirements established by law, and, therefore, how the sponsor could effectively monitor such compliance.” Another audit noted Lake Erie West collected 1.5 percent off the top of all state payments received by ECOT, which some estimates have put at over $1 billion in total.
“The inclusion of such documentation would facilitate the school’s compliance with requirements and standards established by law,” the 2016 audit said.
The money repaid by Lake Erie West, formerly the Lucas County Educational Service Center, will go to a special master appointed by the Franklin County Court of Common Pleas to oversee ECOT’s remaining assets. An attorney representing Lake Erie West said the agency may issue a statement later.
”Lake Erie West deserves credit for taking the high road in agreeing to this repayment,” Yost said in the written statement. “Although there’s still a lot of work to do, this is a significant step toward paying down the substantial debt that ECOT owes. For perspective, these dollars could have paid for 15 teachers.”
The attorney general’s office is involved in four ECOT-related cases pending in the courts. Yost’s office is seeking to recover funds from others affiliated with the school, including Altair Learning Management, IQ Innovations and Lager.