Virtual schools inflate enrollment; ‘How did we miss this?’

INDIANAPOLIS (WISH) — A recent audit showed two Indiana virtual schools inflated their enrollment numbers, and the State Board of Education said Wednesday it wants millions of dollars in excess funding back.

Some of the findings:

• A virtual school kept two students on the rolls who moved to Florida years ago.
• Hundreds of enrolled students earned zero credits in the 2017-18 school year.
• A deceased student was listed as enrolled.

State Rep. Ed DeLaney, an Indianapolis Democrat, said Wednesday, “This is the worst example of government failure at the legislative, administrative and accounting level that I have seen in 20-something years of Indiana politics.”

The State Board of Education’s audit found Indiana Virtual School and Indiana Virtual Pathways Academy inflated enrollment to at least twice as many students as they had. Because of that, millions in state money went to virtual schools.

“I’m angry as a taxpayer,” Rep. DeLaney said. “I think more important than the money: We put thousands of kids into a system that did nothing for them.”

Daleville Community Schools oversees both virtual schools.

Jennifer McCormick, the state superintendent of public instruction, said, “Obviously, the whole situation is a concern. I commend Daleville for at least, during those audits, they self-reported when things weren’t adding up from the organizer.”

Daleville School Superintendent Paul Garrison said, “This isn’t one of my proudest moments.”

In February, Garrison asked the Daleville School Board to revoke the charters.

The Indiana Department of Education “never received a report at any time, to my knowledge, that 740 students did not (enroll) until our analysis came forward and we put that as part of our objection,” Garrison said.

B.J. Watts, chairman of the State Board of Education, asked. “How did we miss this?”

The board decided Wednesday to try to get its millions of dollars back.

McCormick said, “Today, they decided to basically look at that ADM (average daily membership) number and adjust the monies that go directly to the school. When they cut that, which is a significant cut, that’s their operations for the first six months out of the gate.”

Watts asked if the audit shows potentially criminal activity.

Paul Joyce, an examiner with the State Board of Accounts, answered, “In situations like this, we do contact all of our law enforcement partners.”

Percy Clark Jr., superintendent of the Indiana Virtual School and the Indiana Virtual Pathways Academy, has called the State Board of Education’s review premature. He said, in part, in a letter dated Friday, “The State Board of Accounts (SBOA) admits its audits of the schools are presently incomplete. The SBOA’s evidentiary submission is based on a restrictive, unrepresentative 100 student non-random sample, likely pulled from information provided by Daleville Community Schools (“DCS”). Why rush to judgement when the SBOE essentially adopts the terms and conditions of the proposal Closure Protocols negotiated by the schools and DCS?”

Statement

“Today’s determination by the State Board of Education is further proof that greater oversight of charter and virtual charter schools is essential, a position long held and advocated by Daleville Community Schools (DCS). Daleville Community Schools (DCS) in August of 2018, contacted State Board of Accounts (SBOA) with concerns regarding irregularities and inconsistencies of the Indiana Virtual School (IVS) and the Indiana Virtual Pathways Academy (IVPA). Prior to August 1, 2018, DCS did not have authority to access the data records of the charters that it authorized, making it impossible to verify the reports received from the charter schools. In addition, DCS, the SBOA and other agencies had great difficulty getting cooperation from IVS and IVPA when data was requested. The current findings from the SBOA investigation, while still ongoing, are consistent with the DCS investigation that resulted in the decision to revoke both charters on February 25, 2019.

DCS supports those findings and will continue to cooperate with any further investigations and determinations, but objects to recouping inflated ADM funds provided to the authorizer by both charter schools on the following basis:

• The State did not distribute the authorizer fees to Daleville, nor does it require them. Authorizer fees are part of the terms of the charter agreement.

• As the fiscal agent for the charter schools, Indiana Virtual Education Foundation (IVEF) received funds from the State and distributed those funds.

• Daleville accepted those fees in good faith and without malfeasance and had no role in incorrect reporting to the State.

• Daleville had no means of accessing data submissions from the charter schools until August, 2018, thus had no way to verify accuracy prior to that time.

• Once inaccuracies and inconsistencies came to light in the Fall of 2018, Daleville spent authorizer dollars on legal fees and investigations which resulted in issuing the Notices of Revocation.

• Both the SBOE and SBOA have benefited from those investigations.

• Retroactively recovering any overpayment of authorizer fees from Daleville Schools would put a chilling effect on other authorizers coming forward to report potential irregularities.

Finally, it is important to understand that the SBOE, as an advisory body, has provided its determination as a recommendation to the Department of Education. It is the responsibility of the IDOE to respond to DCS objections.”

On behalf of Daleville Community Schools from Donna Petraits, executive director of Indiana Chapter National School Public Relations Association, and school PR consultant for Administrator Assistance LLC