ECOT went to court in 2016 to keep the state Department of Education from examining how much time its online students spent doing daily classwork.

But after the court ordered the Electronic Classroom of Tomorrow to hand over the data, which would reveal a massive gap in what ECOT had reported and force a $60 million payback to the state, the online charter school bought new tracking software and volunteered new “durational documentation” on student participation for the audit of the following, 2016-17 school year.

The new program, ActivTrak, would supposedly answer the question: How much instructional time are ECOT students really receiving?

The new method paid off for ECOT. The repayment for the next school year dropped more than 68 percent, to $19 million, as ActivTrak documented enough student online participation for ECOT to receive 81.5 percent of its state allotment, up from 41 percent in the previous audit.

But an ECOT insider who says he worked closely with the for-profit charter school's data alerted the state auditor's office, and the Department of Education starting in May 2017 that ECOT was manipulating ActivTrak to collect more cash. Lot's more cash.

“The hard truth is that ECOT was not economically viable with honest time reporting to (the state) under the new rules,” the whistleblower told The Dispatch, which is protecting his identity because of feared repercussions.

ActivTrak's default setting considers a user “idle” if a computer keyboard or mouse is not touched at least once every two minutes. ECOT changed that setting to once every 15 minutes, then bumped it to once every 60 minutes to count an online student as “attending.” With each adjustment, student attendance increased, and officials would reprocess the entire year's worth of raw data, he said.

Then the Department of Education came looking for data as part of its next attendance audit, he said. The school provided a data dump to “inundate the state with detail to make auditing as tough as possible.” When the state said it just wanted log-in and log-out times, “something that was internally seen as too good to be true,” ECOT saw a chance to only provide a single daily window of time, he said.

“Thus, the conclusion emerged that ECOT was now justified that any midday idleness wasn't a concern. You just needed to know the student's first and last activity on the PC each day and take credit for the whole time, up to the daily limits allowed,” he said.

If true, that means ECOT's method of calculating attendance didn't change much from the previous audit, when it would count a student as having attended for an entire day for just having logged on in the morning, even if he or she did no work.

“Internal opinion at the time of my departure was that actual verifiable academic engagement is not likely to be much greater than 50% ... but that submitted data will represent a much higher funding rate than that — even on the order of 80% or higher,” the whistleblower said in an email to the Department of Education in August 2017. That prediction was spot on: ECOT's final participation number was 81.5 percent, “a level many find difficult to believe,” he said.

Since state funding is based on student attendance, the higher the student participation, the more money sent to ECOT.

Boosting participation from 50 percent to 81.5 percent would have netted ECOT about $32 million more from the state for the 2016-17 school year — even after being ordered to repay $19 million.

This has Democrats calling for a criminal probe of ECOT, founded by William Lager, who over the past decade had become not only a Columbus rags-to-riches story but one of the largest contributors to Ohio Republicans.

Neither the department nor state Auditor Dave Yost took any public action in response to the insider's accusation of what could amount to financial fraud.

Yost's office said Friday it received an anonymous email from the whistleblower on May 1, 2017. He eventually provided his name and met with the department's investigative unit that conducts special audits. But Yost didn't open a special audit, unlike when allegations of data manipulation surfaced against Columbus City Schools in 2012.

The Columbus case involved data manipulation that affected its state report cards, which “would not be part of a normal financial audit,” said Dominic Binkley, a Yost spokesman. The ECOT allegations involved finances, so Yost reviewed them as part of ECOT's annual financial audit, due out in a couple weeks, Binkley said.

The Education Department was emailed in August 2017 about concerns that ECOT's use of ActivTrak might have “inflated student participation time,” said spokeswoman Brittany Halpin. But Halpin said ongoing litigation with ECOT prohibits her from answering any questions, such as what the department did to follow up on that report.

The department “had independently raised concerns with ECOT about ActivTrak, and was investigating how ECOT used the product,” Halpin said in a written statement.

ECOT also had ActivTrak count any computer activity, such as playing games or watching videos, as instruction, the whistleblower claimed in emails to state officials.

“The use of the product and data only appears to add engagement time for students that other indicators show are not engaged,” wrote the whistleblower, who left ECOT last summer amid an initial round of layoffs.

Whether ECOT broke any laws may be difficult to determine because state law does not specify how online schools should record student participation.

Sen. Peggy Lehner, R-Kettering, chairwoman of the Senate Education Committee, said it “defies logic” to count a student as engaged in educational opportunities when there are long periods of computer inactivity.

“If a child is in school, he should be producing work,” she said. “That takes time and should be reflective of log-in time that shows they were actively engaged with the computer or a work product — a test or paper written. From what I can gather, there’s no evidence of any of that.”

The state's low-profile response last year fits with a longtime pattern of ignoring potential fraud at ECOT, said Bill Phillis, executive director of the Ohio Coalition for Equity & Adequacy of School Funding.

“It's a pattern of allowing ECOT to rip off taxpayers and screw up the students,” Phyllis said. “It's a travesty that this has been allowed to go on for so long.”

ECOT's sponsor suspended the school's operations in January, citing depleted funds. ECOT is counting on a case before the Ohio Supreme Court to put it back in business.

bbush@dispatch.com

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