Ohio’s online charter schools have come under scrutiny lately for questions about their attendance.  Multiple smaller online schools have been found to have significantly overstated their enrollment numbers, resulting in a significant amount of state tax dollars being over-billed by the schools’ operators.

State Senator Joe Schiavoni introduced legislation in March of this year that would seek to hold online schools more accountable for accurate attendance records.

“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,” said Senator Schiavoni.  “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.”

Could be collecting millions of dollars” is a key phrase in Schiavoni’s statement and his bill sought to implement changes that would help uncover e-school attendance reporting.  Sadly, the bill (SB298) was stifled by Senate President Keith Faber, who referred the bill to the Finance Committee instead of the Education Committee, after Senate Education Committee Chair, Peggy Lehner, expressed support for the measure:

Republican Sen. Peggy Lehner of Kettering says this is a serious problem that goes beyond wasteful spending.

“We hear it all the time from schools that say their children leave brick and mortar schools, they go to an online school and come back a year or two later and haven’t made any academic progress at all. And I think it’s very important that we look at and make sure that isn’t happening.”

As chair of the Senate Education Committee, Lehner expressed interest in tackling the issue by considering a bill introduced by Democratic Sen. Joe Schiavoni of the Youngstown area that would implement strict attendance requirements.

But Republican Senate President Keith Faber of Celina had some people scratching their heads when he did not assign the bill to Lehner’s Education Committee and put it in the Finance Committee instead.

“I’m confused because it is an education policy bill,” says Schiavoni, the leader of the Senate Democrats. He says this kind of maneuver has happened in the past when Lehner showed interest in another one of his bills.

“She was supportive of this idea or said that there was some room to work and all of the sudden it gets moved to finance. It’s not coincidental that this happened twice in a row to two education bills that I was a sponsor of.”

Lehner was reserved when asked about the move.

“Well that’s the president’s prerogative to put it where he wants to put it, so I suggest you talk to him.”

Asked whether she thought it should be in her committee, Lehner replied  “I repeat that’s the president’s prerogative and I suggest you talk to him.”  (WKSU, April 14, 2016)

The big question that still remains is whether the Electronic Classroom of Tomorrow (ECOT), Ohio’s largest online charter school and whose founder and primary beneficiary of state funding, Bill Lager, is the state’s most significant political donor to the Republican majority in Ohio’s General Assembly, “could be” overcharging the state for students.

Question it no more.  The answer is a resounding YES.   And the numbers are stunning.

Through the use of publicly available records through the Ohio Department of Education, we’ve pieced together data that shows that ECOT appears to have overcharged the state of Ohio for nearly 35 million dollars in the 2014-15 school year, one third of the school’s total funding for the year.

We’ll explain the methodology used in greater detail (with calculations, etc.) so that our work can be easily replicated, but here’s the summary:  Up until last school year, all 10th graders in the state of Ohio (2017 graduating class) were required to take – and pass – the Ohio Graduation Test (OGT) in order to graduate from high school.  The Ohio Department of Education records the number of students in each school or district’s 10th grade class who actually took the test.   By comparing the number of students taking the test with the number of students who are reported as being enrolled, we are able to obtain the most accurate picture of attendance for a school or district that we have yet to see.  Without day-to-day attendance being reported, it is this benchmark figure of students tested that allows us to understand what is happening within the school.

With charter schools, we are also able to obtain the number of students that the school reports to the Ohio Department of Education on a monthly basis as that is how the schools obtain their funding from the state.  While some of the figures are not disaggregated, the ODE has a plethora of information at our disposal that allows us to make enough projections to calculate numbers that are staggering enough to warrant a serious investigation into ECOT’s billing and attendance-reporting practices.

THE NUMBERS

In the 2014-15 school year, ECOT reported testing only 66.4% of the 10th graders that they reported as being enrolled.  The base funding amount ($5,800 per student) that ECOT received for the missing 10th graders alone totaled over $10,000,000.

As ECOT is a large school (over 15,000 students reported as enrolled), we needed to research further to establish the testing rates for Ohio’s other large school districts.  For these public school districts (and ECOT), we utilized the ODE data to identify the number of 10th graders reported as enrolled by the district (not established monthly as in charter schools) and the average number of students tested across the five OGT tests.

ECOT 14-15 OGT Tested

To be clear, this is not the number of students who passed the OGT tests, this is the number who simply took the test.  ECOT likes to claim that their student population is highly mobile, that their students are economically disadvantaged, and that their students are behind in their academic careers.   While some of that may be true, the same can easily be said for the large urban school districts that are shown on this chart.  But the best comparison for those claims might come out of Cleveland, where legislative reforms have caused great instability in recent years, including a major expansion of charter schools in the district. Even so, Cleveland’s tested percentage of 83.8% is still much closer to the range of the other large urban school districts than is ECOT’s figure of 66.4%.  This means that ECOT is testing only two-thirds of the student that it is claiming are enrolled.

For additional perspective, Olentangy Local, one of the state’s highest-performing school districts and the 7th-largest district in Ohio for 2014-15, tested nearly all of its students (opting-out be damned) at a rate of 99.2%.   While the lower-performing Cleveland Schools’s tested rate fell 16 points below Olentangy, ECOT fell 17 points below Cleveland.  ECOT is clearly the outlier in these calculations.

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Furthermore, school districts aren’t set up to report their attendance on a monthly basis as is ECOT, so any corrections to their enrollment numbers are reflected from one year to the next, and Cleveland’s annual enrollment has been steadily declining.  ECOT, meanwhile, has been steadily increasing, especially in the high school grades, the the school regularly touts its graduation numbers and high school program.

In addition, Cleveland has entire sections of state law dedicated to the school district to legislate its practices while ECOT has been (and continues to be) completely ignored by members of Ohio’s General Assembly who regularly receive hundreds of thousands in campaign donations from ECOT’s Bill Lager.

As the charts below show, this trend is not new – ECOT has repeatedly put up these figures for years.

ECOT 13-14 OGT Tested

ECOT 12-13 OGT Tested

In the past three years, ECOT has consistently only tested around two-thirds of the students for which they have reported they had enrolled and been paid for educating by the state.  And while we will fully explain all the figures in great detail at the end of the article, we want to point out that we have used the most conservative figures and given ECOT the benefit of the doubt as much as possible.  Instead of using ODE’s overall enrollment figures for the school year which are higher, we used an average of ECOT’s reported attendance for payment purposes for the months of February – April of each of the above school years; the months before, during, and after the administration of the OGT tests.

Finally, by combining the tested student counts with state funding figures and the percentage of students enrolled in each grade and special education funding categories, we can project the total amount of funding that ECOT has over-billed the state for each of these school years.

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In the previous three school years alone, we’ve conservatively calculated that ECOT has over-billed the state of Ohio for nearly 100 million dollars, or over one-third of the school’s total budget on an annual basis.

If the numbers hold true for the 2015-16 school year (and the trend shows that it will), one-third of ECOT’s total projected funding of $107,517,808.16 for FY16 will be for students not enrolled, bringing ECOT’s four-year grand total of over-payment of state tax dollars all the way up to $135,558,750.12.

Even if we’re off by just a little bit on our conservative projections – though every number we’ve used is directly from the Ohio Department of Education’s official data records – the amount of taxpayer money being incorrectly directed to ECOT should leave Ohioans shocked.  ECOT has been paid by taxpayers somewhere in the neighborhood of $1 BILLION since its inception, meaning that the school has, quite possibly, over-billed the state for nearly $350 million.

If this type of information doesn’t make the case that ECOT needs to be comprehensively investigated for fraudulent attendance reporting by, at the very least, Ohio Auditor Dave Yost, then what does?  Senator Joe Schiavoni’s bill may be a good step going forward, but what about the millions of dollars already taken away from taxpayers and public school districts and diverted to Bill Lager’s private businesses?  And how, exactly, will the state of Ohio go about collecting this money back from ECOT and Bill Lager?

We welcome Ohio’s legislators and media outlets across Ohio to dig into these numbers on their own, verify the truth of this information, and report about what might just be ECOT’s – and Ohio’s – biggest education scandal to date.

 

 

RESOURCES AND METHODOLOGY

ENROLLMENT: Enrollment figures for school districts and ECOT were from the Ohio Department of Educations Advanced Reports website (http://reportcard.education.ohio.gov/Pages/Power-User-Reports.aspx).

  • The reports we downloaded were “Enrollment by Student Demographic (District)”.
  • The demographic option selected was grade level, and we identified the number of 10th grade students for each school district.
  • For ECOT, to obtain the more accurate, and more conservative figures, we combined this data with another source, the monthly payment reports for Community Schools for the months of February, March, and April – the months that encompass the administration of the Ohio Graduation Tests (http://education.ohio.gov/Topics/Finance-and-Funding/School-Payment-Reports/State-Funding-For-Schools/Community-School-Funding).
  • Using the Enrollment by Student Demographic spreadsheet, which also reports the percentage of students by grade level, combined with the total enrollment figures from the monthly payment reports, we projected the number of 10th grade students enrolled in ECOT during those three months for each school year, then averaged that number to arrive at the enrollment number used in our calculations.  The number of potential 10th grade test-takers identified using this method proved to be smaller (and more conservative) than the original, overall number of 10th graders reported by the Enrollment by Student Demographic report.
  • We calculated the number of students enrolled in ECOT for testing purposes by multiplying the reported annual percentage of 10th grade students enrolled in ECOT by the average number of total students reported by ECOT during the 3-month stretch of Feb-Apr for each school year.

TEST TAKERS: The number of 10th grade students taking the Ohio Graduation Test for school districts and ECOT were from the Ohio Department of Educations Advanced Reports website (http://reportcard.education.ohio.gov/Pages/Power-User-Reports.aspx).

  • The reports we downloaded were “Tested Student Counts (District)”.
  • The report provides a breakdown of the number of students taking each section of the OGT – Reading, Writing, Mathematics, Social Studies, & Science.
  • In order to simplify the calculations, we averaged the number of students within districts who took each test.  Olentangy Local was the only district that reported the exact same number of students taking each test.
  • For each school year, we divided the number of OGT test-takers by the number of 10th graders enrolled to arrive at the percentage of students tested.

FUNDING: The funding figures for ECOT were obtained from the Community School Funding monthly payment reports website for each respective fiscal year (http://education.ohio.gov/Topics/Finance-and-Funding/School-Payment-Reports/State-Funding-For-Schools/Community-School-Funding).

  • Percentages of students enrolled at ECOT were used significantly to project the funding figures.
  • The percentage of tested 10th grade students was used to project the overall percentage of students ECOT over-reported for the school year and multiplied by the base funding amount for each year, respectively.
  • For each special education category, we calculated the number of students in each category as a percentage of the total number of enrolled students, multiplied that total by the percentage of over-reported students, then multiplied that by the funding amount for each respective special education category
  • We totaled all of the projected over-billed funding amounts to arrive at the overpaid funding total, which correlated, as a percentage, with the number of 10th grade students not tested.

NOTES:

  • Most, if not all, figures published in this article have been rounded for readability purposes.
  • The comparison districts were chosen because they are the seven school districts in Ohio that are larger than ECOT and would experience similar “problems” that comes with operating a large district, especially those operating in an urban setting.  Olentangy was kept in the comparison due to its comparable size and because the reported tested numbers were significant and demonstrated that testing very close to 100% of the enrollment population is attainable.
  • If we had utilized the end-of year enrollment counts that were used for school districts for ECOT, the charter school’s percentage of tested students would be lower by 0.55% for 14-15, 1.38% for 13-14, and 1.63% for 12-13.  For this reason, and because the more accurate numbers were available, we opted to use the monthly figures for ECOT.  To reiterate – the monthly figures we used were favorable to ECOT.
  • Projections based on enrollment percentages were used for ECOT because the monthly payment reports posted on the ODE do not contain the enrollment figures disaggregated by either grade or special education category.

 

PARTING THOUGHT: Perhaps an investigation by public officials (or reporters) whose full-time jobs are to uncover waste and fraud by state entities like ECOT, a publicly-funded Ohio school, would have the time and resources to dig deeper into records (e.g., EMIS) that are not readily accessible to the public.

 

 

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