COLUMBUS — Ohio Auditor Dave Yost took more than $11,000 in campaign contributions from the founder of a for-profit online charter school — and now that the e-charter is under scrutiny for overbilling Ohio taxpayers, Yost is struggling to explain why his office was asleep at the wheel.
“Ohio Republicans — including Dave Yost — have taken millions from for-profit charter school operators, at the same time many of those charter schools have been failing our kids and ripping off the taxpayers,” said Ohio Democratic Party Chairman David Pepper. “There are only two reasons why these charter schools have not been held accountable — either the auditor’s office is incompetent in overlooking clear signs of impropriety and fiscal mismanagement or they are allowing those campaign contributions to influence their decision-making.”
Today’s Columbus Dispatch reveals that Yost’s office failed to crack down on the Electronic Classroom of Tomorrow (ECOT) when a whistleblower “made allegations that ECOT was cooking its attendance books” two years ago. Instead of conducting an audit of ECOT, Yost’s office negotiated an agreement with the charter school that effectively tied the auditor’s hands from fully examining the allegations.
ECOT receives more than $100 million annually from Ohio taxpayers. The school and its founder, William Lager, was highlighted in the New York Times this spring as a dropout factory. According to the Times, “In 2014, the school’s graduation rate did not even reach 39 percent.”
However, that disastrous performance didn’t deter Yost from speaking at ECOT’s graduation in 2015.
Columbus Dispatch: ECOT says no records kept of students’ offline work
… Yost’s office had an opportunity in 2014 to take a closer look at how ECOT operates when a school employee made allegations that ECOT was cooking its attendance books.
ECOT alerted Yost’s office in a letter that Dana Comparetto, then the school’s director of social services, alleged that she was approached during state proficiency “testing cycles about prematurely removing students from ECOT.” Although Comparetto didn’t do it, “ECOT successfully — but improperly — removed several students from school,” the letter said.
Also, Comparetto “has personal knowledge of employees forging signatures on student applications to bolster ECOT’s enrollment,” the letter said, raising the possibility of fraudulent billing.
First, Yost’s office made an agreement with ECOT that limited the scope of the examination. In what is called an “agreed upon procedures engagement,” or AUP, auditors were limited to examining certain records and could offer no opinions or note management weaknesses. The agreement specified that the examination — it’s not called an audit — was solely for the benefit of ECOT.
Then Yost’s office reported that all was OK: ECOT students were offered learning opportunities justifying tens of millions in state payments. Auditors verified that a list of these offerings existed and that an ECOT teacher certified that ECOT billed the state correctly.
“It would be nice to know what the facts and circumstances were when they made that decision” to do an AUP rather than an audit, said Michael Borowitz, a CPA and auditor with Clark, Schaefer and Hackett in Columbus. An AUP can quickly answer specific questions, he said, but they’re “not about substantiating an opinion, because there is no opinion.”
In January, Yost awarded ECOT his Auditor of State Award with Distinction for excellent record-keeping for its clean audits.
ECOT founder William Lager is among the largest individual contributors to Ohio Republicans, giving more than $1.2 million in disclosed donations from 2010 to 2015, mostly to GOP lawmakers. That includes $11,400 to Yost, who spoke at ECOT graduation ceremonies in 2014 and 2015.
None of that influenced the state auditor’s examinations of ECOT, Yost said.
“We did this by the book, by the numbers, on the merits, and no differently than anybody else,” Yost said. “So anybody who says anything else is a damn liar.”