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:

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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.

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Audit: Virtual school paid millions to founder’s company

A 2015-16 audit report for Indiana Virtual School was released last week, and it shows the school continued to pay millions of dollars to for-profit companies run by the school’s founder and his son.

Chalkbeat Indiana laid out the details of this arrangements in an investigation published in October 2017. The online charter school, while organized as a nonprofit entity, paid management, administrative and technology fees to AlphaCom Inc., a business run by school founder Thomas Stoughton.

It also paid A Simple Reminder, a business run by Stoughton’s son, for IT and marketing services. Thomas Stoughton, the AlphaCom head, also served as chairman of the Indiana Virtual School board.

In 2015-16, according to the audit report, the school was charged:

  • $6,156,179 by AlphaCom.
  • $1,255,000 by A Simple Reminder.

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