Total 18-Year Impact of ECOT Scam

When the Electronic Classroom of Tomorrow was caught getting paid $80 million in 2015-2016 and 2016-2017 for students they couldn’t prove they actually educated, the immediate question arises: how much more did they potentially rip off taxpayers during their entire 18 years in operation?

Estimates are always tricky. One has to be careful not to extrapolate too wildly or irresponsibly. Yet they can be helpful to understand the potential scale of a scandal or ripoff.

For example, extrapolating from the 2015-2016 school year, when the state determined ECOT was overpaid by an amount equivalent to 60 percent of its students, suggests a $600 million scandal over 18 years. But the following school year, 2016-2017, ECOT was determined to only be off by 20 percent.

Thankfully for analysts, in 9 of the 18 years of ECOT’s existence, the Auditor of State and Department of Education found and documented overpayments of various sizes. An extrapolation based on half of ECOT’s 18 years is a much more reasonable calculation to make.

In order to estimate the total amount of overbilling during ECOT’s 18 years, we calculated the average percentage overpayment of the years in which overpayments were found and applied those to the years when ECOT’s enrollment wasn’t scrutinized. This we then combined with the know amountĀ ECOT was overpaid in those other 9 years. The result is that between $161.8 million and $216.2 million were overbilled during the school’s time in operation.

>> Bottom Line: ECOT overbilled Ohio taxpayers between $162 and $216 million

This estimate is likely lower than the true amount because for many years, the Ohio Department of Education simply didn’t examine ECOT’s enrollment with the same scrutiny it did in the 2015-2016 and 2016-2017 school years thanks to a deal it cut with ECOT early in its existence — a deal that has been at the heart of the ECOT legal battle.

In terms of ripoff scale, the infamous Tom Noe “Coingate” scandal from 2005-2006 involved $50 million in unemployment insurance money — technically not even taxpayer money . And even with this relatively conservative estimate, ECOT’s taxpayer ripoff could represent more than four times as much money as Coingate.

Quite the scandal indeed.