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State overpays charter schools by $1.7 million

COLUMBUS, Ohio – The state yesterday said it made mistakes in monitoring an online charter school’s enrollment last year, but said a final audit is likely to find that funding problems were worked out by year’s end.

The Department of Education overpaid the Columbus-based Electronic Classroom of Tomorrow $1.7 million during its first two months last year, providing money for students even though they did not meet official enrollment standards, state auditor Jim Petro said yesterday.

For example, although eCOT said it had enrolled 2,270 students in September 2000, records show only seven students logged onto one of the school’s computer systems during that time. Nevertheless, the school received funding for all its students, or $932,030.

Petro said eCOT, the Education Department and the Lucas County Educational Service Center – which sponsored eCOT – all share blame.

Petro called the results of the audit “an exhibition of how to botch up the establishment of a new charter school.”

As for eCOT, “I think for the first two months they were gaming the system,” Petro said.

The school does not owe the state money because there were no guidelines in place to stop the overpayment from happening, Petro said.

The audit examined enrollment and funding figures from September and October of 2000, the time when discrepancies about the school’s actual and reported attendance arose.

ECOT believes it was funded appropriately, Eugene Brundige, president of eCOT’s board of directors, said yesterday.

The school complied with all state laws and the Education Department’s rules and requirements for reporting and funding through the school year, Brundige said in a statement.

The school “faced many challenges in its first year, including delivering computers and phone lines to a statewide student body and monitoring their performance,” he said. “We have learned from mistakes of the first year and are offering a high-quality education to all our students.”

Only 20 percent of eCOT fourth-graders passed all five proficiency tests in March, according to state records. Statewide, 38 percent passed all five.

Only 16 percent of eCOT sixth-graders passed all five tests in March, compared with 43 percent statewide.

The state probably should have documented in writing earlier the procedures for providing enrollment funding, David Varda, the department’s top financial officer, said yesterday.

“I acknowledge that there were mistakes made. We acknowledge that we could have done things better, and we will do things better,” he said.

He said it’s possible the state will end up owing eCOT money once the entire year’s finances are reviewed. But both Varda and eCOT said the amount is likely to be negligible.

Tom Baker, Lucas County ESC superintendent, attributed the problems to “start-up pains” of a new business. Lucas County monitors eCOT enrollment monthly, he said.

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