When the Electronic Classroom of Tomorrow (ECOT) was caught billing the state a total of $80 million in 2015-2016 and 2016-2017 for students they couldn’t prove they actually educated, the immediate question arose: how much more did they potentially rip off taxpayers during their entire 18 years in operation?
In 9 of the 18 years of ECOT’s existence, the Department of Education found and documented overpayments of various sizes. Based on these findings, we took the percentage overpayment in each of those years, calculated an average percentage of overpayment during those FTE reviews, then applied that to the years in which ECOT’s enrollment wasn’t scrutinized. The estimated overpayment was combined with the previously-reported overpayments, and the result is that approximately $189 million was overbilled during the school’s time in operation.*
>> Bottom Line: ECOT may have overbilled Ohio taxpayers appoximately $189 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 2000-2001, 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. However, every court that has heard this case — including judges who received political contributions from ECOT founder Bill Lager — has agreed that the Department could have kept using the standard it used in its first and final two reviews for all the other reviews.
The Department simply chose not to do so. Also telling is that in the 2016-2017 school year, after ECOT knew the Department was actually going to require participation figures, they still overbilled by about 20 percent and were actively trying to game the system, according to a whistleblower.
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 we’ve calculated, ECOT’s taxpayer ripoff could represent more than four times as much money as Coingate, likely even more.
Tom Noe was given more than 20 years in prison for his scandal. Will this much larger, taxpayer funded scandal produce similar results?
*Note: Please see attached methodology for a detailed explanation, data and reference material for how this estimate was calculated.