Statehouse News Bureau

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Final audit shows online charter school ECOT owes $117 million to Ohio

By Karen Kasler

Published June 28, 2022 at 8:56 PM EDT

ECOT founder Bill Lager in a rare public appearance - at a rally at the Statehouse in May 2017, as questions were building about student attendance numbers the state's largest online charter school was reporting. [Karen Kasler / Statehouse News Bureau] — ECOT founder Bill Lager in a rare public appearance - at a rally at the Statehouse in May 2017, as questions were building about student attendance numbers the state's largest online charter school was reporting.

The charter school that was once Ohio’s largest online school owes the state more than $117 million, according to the state auditor’s office. That represents more than a $100 million paid to the Electronic Classroom of Tomorrow, ECOT, to educate kids who never attended and more than $10 million to businesses owned by the school’s founder Bill Lager.

The school closed in 2018.

The findings for recovery also include more than $13 million against IQ Innovations and Altair Learning Management Inc., two companies owned by Lager that did business with ECOT.

The final audit comes more than four years after ECOT shut down. Faber said in a press release: "Reporting delays, incomplete and inaccurate financial statements, and other issues hindered auditors’ work."

That goes back to the spring of 2018, when the school shut down because of financial problems related to court rulings that ECOT owed millions in repayments. At the time, Faber's predecessor Dave Yost -- now the attorney general -- was the auditor.

Yost had given ECOT an award for excellent record keeping in January 2016. A few months later ECOT tried to stop an Ohio Department of Education audit of student attendance, and in 2017 Yost called for state payments to ECOT to stop. Yost said a few months after ECOT closed in 2018 that it had turned over fraudulent data on student attendance.

ECOT was a big donor to mostly Republican campaign committees and candidates, including Faber and Yost, who gave the ECOT money to other causes. Legal proceedings continue against Lager, ECOT and others.

Yost's office provided this statement: “The Court held that ECOT and Lager’s companies violated Ohio’s public contracting laws, resulting in Lager’s companies receiving more than $160,000,000 in illegal payments. The Court also held that Lager violated his fiduciary duties to ECOT and that Lager is strictly liable for all illegal expenditures of ECOT’s public funds occurring after July 1, 2012. This is a significant win for Ohio’s taxpayers, both in this case and deterring similar corruption elsewhere. We will continue to pursue the case to final judgment.”