Still waiting for action on virtual schools’ alleged malfeasance

It’s been a year since the State Board of Accounts released a detailed report alleging that tens of millions of dollars in “public funds were misappropriated” by two virtual charter schools. We’re still waiting to see if anyone will do anything.

Copies of the report were sent to the offices of local and federal prosecutors and the Indiana attorney general; but none are disclosing how they will respond. An official with the Marion County prosecutor’s office suggested the matter fell under federal jurisdiction. At the office of the U.S. attorney for the South District of Indiana, spokesperson Steven Whitaker provided a no-comment comment:

“I can neither confirm or deny the existence of a federal investigation.”

Lauren Houck, spokesperson for Attorney General Todd Rokita, confirmed that the office had received the report. “We are thoroughly reviewing the report and performing the necessary investigation to diligently pursue the charged parties,” she said.

Rokita just took office last month, however. His predecessor, Curtis Hill, spent much of last year fighting off his own legal troubles, joining multi-state lawsuits against Google and Facebook and trying to overturn the results of the 2020 presidential election.

The State Board of Accounts concluded that state funds were misappropriated through “malfeasance, misfeasance, and/or nonfeasance.” It said Indiana Virtual School and Indiana Virtual Pathways Academy inappropriately received more than $68.7 million by misrepresenting the number of students who were enrolled in the virtual schools. They spent more than $85.7 million with vendors who were connected with school officers or employees but failed to provide appropriate paperwork, according to the audit.

The audit came after years of reporting by Chalkbeat Indiana and others found questionable business practices, poor test scores, low graduation rates and other problems at the schools. Now another charter school has been accused of overbilling the state by claiming to be a brick-and-mortar school when, in fact, it was operating as a virtual or online school.

A report by the State Board of Accounts, dated Jan. 25, calls on the Indiana Agriculture and Technology School to reimburse the state over $329,000 for improper funding. According to the report, the school claimed to be providing over half of its instruction in-person in 2018-19 and 2019-20 but did not provide evidence of having done so.

Under state law, the school should have received only 85% or 90% of full state funding if it operated as a virtual school. Attorneys for Indiana Agriculture and Technology School deny that the school acted improperly.

Meanwhile, Indiana House Speaker Todd Huston said he expects legislators to change the law so virtual schools get just as much state funding as schools that provide instruction in person. Given what we’ve learned about Indiana Virtual School, Indiana Virtual Pathways Academy and Indiana Agriculture and Technology School, it seems like an odd time to make that call.