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Indiana State Board of Education approved action against charter authorizer

Wednesday, the Indiana State Board of Education approved recommendations to move forward with action against Daleville Community School, the charter authorizer for Indiana Virtual School and Indiana Virtual Pathways Academy. The two virtual schools are under investigation for inflated student enrollment while under Daleville’s oversight. The board’s recommendations include adjustments to the schools’ ADM counts, recovery of funds distributed to the schools and increased monitoring procedures.

The investigation will be turned over to the state’s attorney general. The state board of accounts examiner indicated that this could result in potential criminal prosecution if findings merit evidence of willful fraud or mismanagement. The details presented indicate that student ADM counts for the schools were inaccurate by up to 50 percent, including students who were not enrolled for up to three years.

This matter has been under investigation for some time and has drawn further scrutiny over gaps in financial oversight that exist in law specific to charter schools. Current law imposes certain consequences for charter authorizers and charter schools, but those consequences are limited mostly to school performance accountability and not the use of funds. ISTA has called for greater transparency and accountability for all charter and virtual schools, including the following measures:

  • Create a charter school market assessment board to oversee the number, along with the viability and need of establishing new charter schools.
  • Call for no less than 50 percent of a charter’s public meetings to take place in the residential zone in which the school is located.
  • Require a minimum of two board members residing within the school zone rather than out-of-state entity representation alone.
  • Establish annual audits and financial reports posted to the school’s website.
  • Require the Indiana Department of Education to approve and monitor a plan to prevent financial and enrollment fraud, waste and abuse.
  • Address balance and fairness in admissions by requiring charter schools to provide equal access and not be allowed to selectively admit and expel students.
  • Require that all charter school teachers possess a license.
  • Ensure school employees and staff can organize and collectively bargain without interference by, or discouragement from, the administration or governing body.
  • Prohibit charter organizers from opening new charters or expanding current ones until a track record of performance is available.

As the investigation proceeds at the direction of the attorney general, the state could seek to recover around $40 million in distributions to the virtual schools based on faulty counts. Some indications are that the state funds already distributed could be clawed back to more accurately reflect actual student counts from those years. The virtual schools in question are expected to close in the next year or two resulting from this scandal.

Also, virtual schools in Indiana have produced abysmal academic performance results for students and provided exceedingly high student/teacher ratios in online classes. These schools have among the very lowest graduation rates of any schools in the state year over year.