Accountability Education Industry For-Profit Fraud Indiana Privatization Virtual Charter Schools

Indiana: State Tries to Recover $40 Million from Virtual Charter Frauds

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Indiana is one of the state’s that has been all in for choice. One of the choices pushed by former governors Mitch Daniels and Mike Pence is Virtual Charter Schools. These are online schools that allegedly enroll home-schoolers or students who prefer not to attend a Brick-and-mortar school.

Study after study has found that these online schools have high attrition, low test scores, and low graduation rates. However they are very profitable since their operators are paid far more than their actual costs.

The name of their game is enrollment, since their costs decline as enrollment grows, and they must constantly replace those who drop out.

Unfortunately, the incidence of fraud is high since the online schools are seldom auidited.

Indiana is currently trying to recover $40 million from two online charter corporations and their authorizer, which was stolen by inflating enrollments.

Indiana will try to claw back around $40 million from two virtual charter schools and the public school district charged with overseeing them after an investigation found the charters inflated student enrollment counts and defrauded the state for the last three years.

Daleville Community Schools is the charter authorizer, charged with oversight, for Indiana Virtual School and Indiana Virtual Pathways Academy. A state audit found that the schools inflated their enrollment counts, which are used to determine how much money the schools receive from the state.

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

Many students were re-enrolled by the school, even after they had left. In at least one case, the school re-enrolled a deceased student, said State Examiner Paul Joyce.

Joyce told the State Board of Education at its meeting Wednesday that the schools’ action could be considered criminal.

Is it a novel idea to treat the theft of millions of dollars as “criminal?” That certainly did not happen in Ohio, where the operator of the Electronic Classroom of Tomorrow (ECOT) closed his doors rather than repay the state some $60 million in inflated charges. Over the years, ECOT collected nearly $1 billion, and there were no audits or efforts to recapture public funds until the past year. No criminal charges either.

You know the old saying: If you steal a fortune, you are treated as a gentleman, if you steal a loaf of bread, you go to jail.

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