Dive Brief:

• The Electronic Classroom of Tomorrow, one of the largest online charter schools in the country, is taking a case against the Ohio Department of Education, regarding how much the school must repay the state based on how many student log-ins were counted, to the state's Supreme Court, according to 10TV.
• The state’s Education Department has determined that the charter school must repay $60 million, with officials saying the school did not offer any documentation of student participation to justify the funding.
• The charter school says Ohio changed criteria for funding illegally in the previous school year, and it is asking the state’s highest court to consider overturning a prior appeals court ruling, saying the state acted by “bureaucratic fiat.”

Dive Insight:

Districts nationwide have expressed frustration with virtual charter schools, and other online charter organizations, such as K12, have faced their own accusations of fraud and mismanagement, including an investigation by California’s then-Attorney General Kamala Harris in 2015, part of an industry-wide investigation of online charters. The organizations are often accused of purportedly low graduation rates, with the San Diego branch of California Virtual Academies achieving a 58% graduation rate for students, compared to 80% statewide.

However, in early 2016, virtual schools were considered to still be on the rise despite growing controversies. In response to the burgeoning controversy over ECOT, Ohio’s auditor suggested last year that online charters receive funding from the state in response to achieving performance metrics, rather than based strictly on enrollment, as is customary with charter schools, generally.

District and school leaders can advocate with state legislatures for this as a means to staunch the bleeding of funding leaving their districts for online charters, which would typically be able to enrollment sizable student populations at comparatively low overhead. New Hampshire already ties charter funding to performance, though there are several notable differences with a state like Ohio. In the latter state, students must enroll in the charter full-time as they would in a brick-and-mortar K-12 school, whereas students in New Hampshire can enroll in a course at a time. District funding is also not tied to charter schools, meaning it will not diminish if more students enroll in the online charter. Administrators can potentially point to the questions of fraud and allegations of incompetence concerning online charters as a possible means to decouple district spending from online charter enrollment, as New Hampshire has done.