Ohio auditor vows to keep eye on charter schools

Getting money back from some private companies, if you’re a charter school in Ohio, just got a little easier; in certain circumstances

Ohio Auditor Dave Yost
Ohio Auditor Dave Yost

COLUMBUS, Ohio (WKBN) – Getting money back from some private companies, if you’re a charter school in Ohio, just got a little easier; in certain circumstances.

State Auditor Dave Yost made it official Wednesday that his office would be watching charter schools and how they deal with getting money back they overpaid to vendors.

He also made it clear they have a fiduciary responsibility to get money back they overpaid.

You would think that anyone who overpaid someone would want to get that money back, but sometimes it’s not that cut and dry.

“[Vendors] are very important often to the success of the school,” said Chad Aldis with the Thomas Fordham Institute. “There’s always going to be those things you weigh whenever you’re dealing with somebody you do business with on a regular basis.”

Aldis is an expert in charter school policy. He says with the recent large scale recognition that some online charter schools were being overpaid and the state’s efforts to recover that money now under way, this is an area that the Auditors guidance in is not only relevant but helpful.

Yost put charter schools on notice on their responsibilities when they have to pay the state back because of an error that causes them to get too much money from the state.

One of those responsibilities is to recover money they paid to vendors that hold percentage of revenue based payment contracts.

Some charter schools have contracts with private companies for services, like IT.

Some of those contracts say the company will be paid a percentage of the revenue the school brings in, as opposed to a flat fee.

Yost says HB 2 from last legislative session gives local government subdivisions, like a school district, a route to recover this money.

“[ECOT] has a duty, as that public entity, that is different than the duties that a private company would have,” said Yost.

In all, ECOT has three companies it holds percentage of revenue contracts with.

All told, the school could recover nearly $12 million from those contracts because they overpaid those companies – due to having incorrect FTE student accounting.

Because they had less FTE students than originally thought, they have to pay a percentage of money back to the state that comes out to about $60 million.

That same percentage is being applied to the three vendors with the contracts, and that’s where the $12 million comes from.

On top of that, ECOT gets to keep the $12 million.

It should be noted, that $12 million is just a drop in the bucket of what ECOT paid those vendors; as it is the difference in number of students is said it had and what it has been able to prove it had.

This ability to recover money from private companies only applies to vendors the school has the percentage of revenue contracts with.

State Senator Joe Schiavoni, who recently submitted a bill on how to handle recovered money, at the state level, from overpayments to charter schools applauded Yost’s directive.

“I’m glad he’s listening to people across the state about what he needs to do as auditor in order to try and right the ship here,” said Schiavoni.

Yost says Schiavoni’s legislation is similar to a house bill introduced by Representative Kristina Roegner and that both are good, common sense bills.

Schiavoni says he doesn’t care whose bill is eventually adopted into law, as long as the money is being used for student benefit.

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