Audit: 2 Indiana online charter schools inflated enrollments

July 11, 2019 GMT

INDIANAPOLIS (AP) — Indiana education officials want to recover about $40 million in taxpayer money from two online charter schools after an audit found that they improperly received state payments by inflating their student enrollment figures.

The state Board of Education voted Wednesday to reduce by half the enrollment counts for Indiana Virtual School and Indiana Virtual Pathways Academy, which have a shared administration and last year reported about 7,200 students. The State Board of Accounts audit says more than half of the schools’ students were not active in any classes for at least six months during the 2017 calendar year.


“How did we miss this?” education board Chairman B.J. Watts asked during the meeting.

Officials pointed to a tangle of oversight responsibilities between the education board, the state Department of Education and the Daleville Community Schools, which was the charter authorizer for the two online schools.

The Daleville district reached an agreement in June under which Indiana Virtual School will close by Sept. 30, while Indiana Virtual Pathways Academy plans to stay open through the 2019-20 school year but stop enrolling new students by Sept. 13.

State Examiner Paul Joyce said many students were re-enrolled by the schools even after they had left, and auditors found at least one case in which a deceased student was re-enrolled. Joyce said the final audit results would be turned over to the state attorney general’s office to possibly seek money from the schools and to county prosecutors if suspected criminal wrongdoing is found.

Percy Clark, superintendent of the two online schools, said in response to the audit that the education board was treating his schools differently from traditional schools which don’t have state funding cut for students who withdraw after enrollment reporting dates. He also said the state action was based on incomplete audit results and could force the immediate closure of the schools, harming what he called 2,500 “active and engaged students.”

“The SBOE’s action in this matter suggests the SBOE and DOE wish to remove educational choice and force students to remain in school environments in which success has evaded them and where hope has abandoned them,” Clark wrote. “The beacon of hope has just been doused.”

A report provided by the Daleville district showed that hundreds of students counted in the online schools’ rolls were never assigned a single class. During the 2016-17 school year, 740 students took no classes in the first semester and 1,048 took no classes in the second semester.

Daleville schools Superintendent Paul Garrison blamed oversight troubles on gaps in the state law for virtual schools and the district’s charter agreement with the operator.

“This isn’t one of my proudest moments,” Garrison said.

Republican state schools Superintendent Jennifer McCormick, who has clashed with GOP legislative leaders on oversight for charter schools, said tighter rules are needed for such online school programs.

“In the big picture, the system at the state level, with very limited guard rails, is creating much of an environment where things like this happen,” she said.