Bookmark this page on your mobile

QR Code image

What is this?

Daily Court Reporter - News Overpaid charter schools must seek reimbursement from sponsors and management companies, Auditor Yost says

 

Overpaid charter schools must seek reimbursement from sponsors and management companies, Auditor Yost says

Certain community schools that were overpaid because their student participation could not be verified by the Ohio Department of Education should seek repayment from their sponsors and management companies that were also overcompensated, Auditor of State Dave Yost announced recently.

Community schools in Ohio typically contract with management companies, educational sponsors and other entities to help them operate, with the cost to the schools often based on a percentage of the dollars they receive annually. When a community school is overfunded, its vendors are sometimes overpaid, too.

Auditor Yost sent a letter to all community schools and their sponsors on Tuesday (Aug. 8) informing them that state auditors will be looking for documentation that any overpayments to vendors and sponsors, beginning with the 2015-16 school year, have been repaid or that a reasonable payment schedule has been established.

“A change in the application of standards by the Ohio Department of Education last year resulted in historic levels of undocumented student participation in our community schools,” Auditor Yost said. “This lack of documentation resulted in overpayments in the tens of millions of dollars, and the portion of those overpayments that went to sponsors, management companies and others should be returned to the schools to benefit the children.”

In his letter, Auditor Yost wrote, “If your management contract, educational service contract – or, for that matter, your sponsor contract – is based on a percentage of income, and ODE determines a clawback is appropriate, this also may mean you must seek a refund of overpayments under those contracts.”

“I understand that this may produce significant difficulty for some community schools, and for their management companies and sponsors. But if a school was overfunded, it must not result in a windfall profit for a private company, while the school itself suffers with reduced funding,” Yost wrote.

For example, the state’s largest community school, the Electronic Classroom of Tomorrow (ECOT), could not substantiate student participation in the Ohio Department of Education’s review for the 2015-16 school year. ECOT was ordered to repay the state $60 million.

ECOT’s contract requires it to pay 16 percent of school funding revenues to IQ Innovations, LLC Learning Management I, Inc.; 4 percent to Altair Learning Management I, Inc., and; 1.5 percent to Education Service Center of Lake Erie West. Based on the $60 million overpayment, ECOT may have overpaid IQ Innovations $9.6 million; Altair may have been overpaid $2.4 million; and Lake Erie West may have received $900,000 in overpayments. (Note: An earlier version of this release misstated the amount Lake Erie West’s potential overpayment.)

“Charter schools are public schools, and we’re giving these schools notice that they need to work with their finance officers to determine whether any sponsor or management company was overpaid and get the money back,” Yost said.

The Auditor encouraged all community schools to consult with legal counsel not affiliated with their sponsors to determine whether they are due refunds under the terms of their contracts with sponsors, management companies and other vendors who are compensated based on the school’s revenues. He also told community school officials that further guidance would be offered soon to assist them with compliance.

The Ohio Department of Education, in advance of House Bill 2 being implemented, established a more robust standard of proof for e-schools in documenting student participation for FY 2015-16 which led to record funding recovery actions. In reviewing who could be held responsible for making restitution, Auditor Yost directed his staff to explore whether overpayments were passed along to e-school management companies and sponsors because of their contracts.

The Auditor’s directive is likely to create a significant refund for some Ohio schools. Some 13 e-schools were found to have insufficient proof that students were properly participating under new ODE standards during the 2015-16 fiscal year. The state is in the process of clawing back some or all of the funding those schools receive, although most of those cases remain under appeal.

Below is a chart of the e-schools that face funding clawbacks from 2015-16, along with the percentage of funding the Department of Education says is unsubstantiated.

Video of the Aug. 9 press conference is available online at: http://ohiochannel.org/video/auditor-of-state-dave-yost-new-directive-regarding-overpayments-to-ohio-community-schools

About the Auditor of State's Office

The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.

Date Published: August 30, 2017

 

Auditor of State

 

Members of Ohio MS-13 arrested and charged

(Columbus) Thirteen individuals alleged to be members and associates of MS-13 were arrested in Central Ohio and Indiana recently.

21st Century Community Learning Center grants awarded

The Ohio Department of Education recently awarded approximately $44.3 million in new and continuing 21st Century Community Learning Center grants for Fiscal Year 2018.

Bill to thwart death penalty sentences for mentally ill has yet to progress

A bipartisan Senate effort that would scuttle death penalty sentences imposed against the mentally ill remains tied up in committee as lawmakers enjoyed the final weeks of a summer recess.

Task force seizes 200 pounds of marijuana, three arrested

Ohio Attorney General Mike DeWine, Montgomery County Sheriff Phil Plummer, U.S. Department of Homeland Security Investigations Special Agent in Charge Steve Francis, and members of the Miami Valley Bulk Smuggling Task Force announced recently the seizure of approximately 200 pounds of marijuana as part of an ongoing drug trafficking investigation.

'Freedom' is best response to white supremacy hatemongers

Let them march in Charlottesville. Let them speak.

The AFRL seeks innovative energy solutions

The Air Force Research Laboratory Advanced Power Technology Office is seeking innovative alternative energy and energy-efficient technology solutions with the recent release of its latest broad agency announcement, published July 19 on the Federal Business Opportunities website.

Montgomery County Tire Buyback event

On Sept. 24, 2017, Montgomery County Environmental Services will host its fifth Tire Buyback event. Residents can earn $2 for every scrap/used tire they bring, up to a maximum of 10 tires per vehicle.

The Cincinnati Zoo’s Baby Fiona update

The next milestone for Fiona will be transitioning from formula to solids so she is currently able to eat anything that Bibi is offered, but specifically given grain, beet pulp, apple, banana, and lettuce before and after each bottle feeding.

Dayton women's soccer falls short to Miami

The University of Dayton women's soccer team fought back and pulled within one goal at one point in the exhibition match, but fell 4-2 to visiting Miami Friday night at Baujan Field.

University of Dayton signs national pledge

President Eric F. Spina has joined CEO Action for Diversity & Inclusion, a growing coalition of more than 200 CEOs pledging to advance diversity and inclusion in the workplace.

University of Dayton’s class of 2021

The University of Dayton will welcome its largest and most diverse class in school history this fall.

Wright State, The Dayton Foodbank & Caresource helping others

On Aug. 11, over 500 families filed into the Wright State University Nutter Center parking lot. One by one the as The Dayton Foodbank provided the produce, Caresource the volunteers and Wright State’s Nutter Center the venue. This was the third consecutive year that Wright State welcomed the Dayton Foodbank’s distribution pick up in Greene County.

Ohio Chief Justice O’Connor named to lead two national court organizations

Ohio Chief Justice Maureen O’Connor has been elected president of the Conference of Chief Justices (CCJ) and chair of the National Center for State Courts (NCSC) Board of Directors. The one-year positions became effective recently during CCJ’s annual conference and NCSC’s Board of Directors meetings in Philadelphia.

New ways to comparison shop for health care

(BPT) As our nation seeks solutions to help improve the health care system, there is at least one goal we can all agree on: the importance of making health care quality and cost information more accessible to all Americans.

ABA House urges changes affecting undocumented immigrants, among other policy decisions

The American Bar Association House of Delegates, which determines association-wide policy, adopted policies over two days that urges Congress to add courthouses to the “sensitive locations” list for immigration enforcement and licensing groups to admit to the bar undocumented law school graduates under certain circumstances.

4 simple ways to stay productive and conquer your to-do list

(BPT) Did you know that in an average week, 75 percent of Americans skip doing something for themselves because they didn't adequately plan or allow enough time for it? Does looking at your to-do list feel so daunting that it discourages you from making any progress at all?

Canadian man charged with production of child pornography after meeting teen in Ohio

(Cleveland) A Canadian man arrested at a park in Rocky River was charged in federal court with production of child pornography.

Bill: Old records exempt from public disclosure law may see light of day

A bill before members of a committee in the Ohio House of Representatives may be an amateur genealogist's dream.

Small businesses, chamber oppose bill that would regulate employee hiring details

A bill crafted to protect some of the most private information of working individuals has come up against opposition in the Ohio House of Representatives.

Board of Professional Conduct concludes dual employment of specialized docket employees prohibited

The Board of Professional Conduct recently issued an advisory opinion concerning the dual employment of court employees in both a specialized drug court and a nonprofit drug treatment center under contract with the court.