Reckoning for virtual schools

Is Indiana finally getting serious about cracking down on abuses by virtual charter schools? It sure looks like it, but we’ll have a better idea after Wednesday’s meeting of the State Board of Education.

The board will decide whether to try to recover tens of millions of dollars that two of the schools – Indiana Virtual School and Indiana Virtual Pathways Academy – received for students who were enrolled but apparently didn’t take classes or earn credits.

State officials estimate the schools inflated their enrollment figures and were awarded more than twice the appropriate funding in the past three years. The estimate comes from the head of the State Board of Accounts, which is auditing the schools’ books after they fell years behind in filing financial reports.

The partially completed audit reveals egregious examples. One former student was listed as enrolled for two years after he had died. Two students moved to Florida in 2010-11 and didn’t return but were listed as enrolled as late as this year.

State funding for the fast-growing schools has totaled more than $80 million since 2016. Yet the schools have produced abysmal results, including low test scores and graduation rates in the single digits. As Chalkbeat Indiana and audits through 2015-16 have revealed, Indiana Virtual School paid millions of dollars in management and technology fees to companies owned by the school’s founder and his son.

Under a staff recommendation for Wednesday’s meeting, the State Board of Education would try to claw back some of the state funding by reducing the amount the schools would receive in 2019-20. But there’s a problem with that, as the schools’ superintendent pointed out. If the schools don’t continue to get state funding, they won’t be able to hire teachers and pay for technology. If they can’t do that, they won’t be able to enroll students. If they can’t enroll students, there won’t be any state funding to reduce. It will be the “end of the road” for the schools, the superintendent wrote.

The state has a couple of other options for recovering funds, according to the state board staff report. The superintendent of public instruction has authority over spending state education funds and can go to court to recover money that was misspent. And the state attorney general can sue for recovery.

Those would be civil suits, but an affidavit from State Examiner Paul Joyce suggests he may view this as a criminal matter. Joyce said he was providing the affidavit “based on my responsibility … to take appropriate action upon learning of credible reports that misappropriation of public funds has occurred.”

“Misappropriation” isn’t a term that state officials throw around lightly. This sounds, well, serious.

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