INDIANAPOLIS (WISH)- Almost $86 million misspent by two online Indiana charter schools.

That’s according to a special investigation report by the State Board of Accounts.

State Sen. Jeff Raatz, a Republican from Centerville, said Wednesday, “There’s obviously some terrible fraud that went on. The FBI is involved. We’re going to trust that the process, those who misbehaved are brought to justice. I think we can all agree up to that point.”

The report accuses Indiana Virtual School and Indiana Virtual Pathways Academy of wrongly collecting more than $68 million in state payments. It says the schools inflated enrollments by thousands of students over nine years. It also found those students never did any school work. The schools were based in Daleville, about 25 miles northeast of Indianapolis.

“However you want to characterize this: misappropriation, flat-out fraud,” state Sen. Tim Lanane, a Democrat from Anderson, said.

On Wednesday afternoon, Senate Democrats championed amendments they say would boost accountability and transparency in virtual schools.

“This year, I have Senate BIll 431, which again attempted to put some constraints on charter schools so we can have these guardrails in place moving forward so that this doesn’t happen again,” state Sen. Mark Stoops, a Democrat from Bloomington, said.

State Sen, Eddie Melton, a Democrat from East Chicago, said, “I also hope this news of this misuse will spur this body to take a closer look at this proposal that we’re putting forth today.”

On Wednesday afternoon, Republican Sen. Jeff Raatz mentioned a virtual charter school in his district that has accountability built in.

He said, “From things that are already set in place between the State Board of Accounts and the Department of Education that were great stops to prevent ghost students from existing or ghost districts being paid for students that aren’t there.”

The State Board of Accounts sent the report to federal and state criminal investigators because of potential violations of federal and state law. A spokesperson for the U.S. Attorney’s Office in Indianapolis declined to comment to News 8.

Statements

“Those found defrauding students, families and teachers of needed education dollars will be held accountable to the fullest extent of the law. I’m hopeful that through a thorough investigation, a complete restitution of the defrauded funds will be realized. In the meantime, I’ve instructed my campaign team to identify any and all contributions received from involved organizations and donate those past campaign contributions to a local nonprofit organization involved in education. I’m hopeful all other candidates, campaigns, and office holders will do the same.”

Indiana Gov. Eric Holcumb

“We have known for over a year about the massive problems at these two virtual schools, but the newly released audit report shows the issues were even worse than previously thought. In 2019, lawmakers passed Senate Enrolled Act 567, which addressed initial concerns the General Assembly had with Daleville Community Schools and its oversight of the two virtual schools. While SEA 567 set some good guardrails, as virtual learning continues to advance, we know that other measures will be required. There are bad actors who take advantage of the law in all industries, and I hope to see justice served in this case. I don’t believe this specific incident is representative of all charter schools. Not every student excels with traditional classroom instruction – some require a different environment to shine. As chair of the Senate Committee on Education and Career Development, I remain a fierce advocate for innovative policies that improve education in our state. I will remain actively engaged in ongoing conversations on how we, as a state, can best prevent this incident from occurring again.”

State Sen. Jeff Raatz, a Richmond Republican