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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Systemwide failure on virtual charter schools

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” — Upton Sinclair

We’ve known something fishy was going on with virtual charter schools since 2017, when a Chalkbeat Indiana investigation exposed shady business practices and lousy test scores and graduation rates at Indiana Virtual School and its sister school, Indiana Virtual Pathways Academy.

A blockbuster report this week from the State Board of Accounts shows just how bad it was – and it was worse than we’d imagined. The report charged that the schools overbilled the state by $68 million by vastly inflating the number of students who were enrolled in and attending classes online.

It also found schools made $85.7 million in questionable payments to vendors in which school officials or family members had an interest. Much of the taxpayer money that the schools received, the report shows, went to a network of for-profit businesses tied to school founder Thomas Stoughton and his associates.

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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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