New Analysis: ECOT Overbilled State Nearly $200 Million

New Analysis: ECOT Stole Nearly $200 Million from State

Estimate shows ECOT scandal is largest in state history

Columbus, OH – Today, Innovation Ohio Education Policy Fellow Stephen Dyer released a new analysis of the Electronic Classroom of Tomorrow (ECOT) scandal, finding that the shuttered charter school defrauded the state by at least $189 million since 2000. This is the first published estimate of the total amount stolen by ECOT.

When 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, Dyer 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.

“This is easily the largest scandal in Ohio history,” said Dyer. “ECOT stole nearly $200 million in taxpayer money that should have gone to educate our children. Instead, this money enriched ECOT’s founder and his political allies.”

A full explanation of Dyer’s methodology can be found here.

In terms of scale, the infamous Tom Noe “Coingate” scandal in 2006 involved $50 million in unemployment insurance money (technically not taxpayer money). Even with this relatively conservative estimate, the ECOT scandal could be four times larger than 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?

“While it is important to have this number and understand the scope of this scandal, this also raises many more questions that must be answered. The Department of Education and state Auditor owe us a full explanation of how they allowed this to happen for 18 years,” Dyer continued.

Despite the size and scope of this scandal, lawmakers have yet to address the underlying issues that allowed this to occur.

KEY NUMBERS IN THE ECOT SCANDAL

Total taxpayer dollars diverted to ECOT since 2000 – More than $1,000,000,000

Total diverted since 2012 that we can document by each school district – $591,000,000

Estimate for the total amount stolen – $189,000,000

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For more information:

All of Innovation Ohio’s ECOT research can be found here: innovationohio.org/ecot