An astounding scandal is rocking the Statehouse in the closing weeks of the short session: Two virtual charter schools defrauded the taxpayers of Indiana of $68.7 million, according to a report filed February 12th by the State Board of Accounts.
The second shock hit on February 14th when it was revealed that State Senator Travis Holdman served as a paid consultant to these two virtual charter schools from 2011 to 2019, according to a report filed by Steve Hinnefeld, School Matters blogger based in Bloomington and confirmed in a story by well known reporter Niki Kelly in the Fort Wayne Journal Gazette on February 17th.
Your action this week outlined below can help prevent future fraud. Legislators can still act to correct auditing requirements for charter schools that are now obviously inadequate.
Fraud in Two Virtual Charter Schools
In a summary of the State Board of Accounts findings reported by Arika Herron on the front page of the Indianapolis Star on February 14th, the incredible dimensions of this fraud included:
- “more than 14,000 students were counted as enrolled when they should not have been” between 2011 and 2019 in the Indiana Virtual Charter School and the Indiana Virtual Pathways Academy.
- For three school years from 2016 through 2019, the “two schools received more than $103 million in state funds and funneled $85 million to related parties, including several companies run by the school’s founder , Thomas Stoughton and his son.”
- “The state is requesting reimbursement of the $85 million, improperly paid to 14 different vendors that were related to the schools through a common employee of family member.”
There’s more to this shocking story: State Senator Travis Holdman was paid for eight years as a consultant to the two virtual charter schools (Indiana Virtual Charter School and Indiana Virtual Pathways School), according to reports by Steve Hinnefeld (School Matters) and Niki Kelly (Fort Wayne Journal Gazette).
Do other charter schools pay powerful legislators as consultants?
Senator Holdman has been in the Indiana Senate since 2008 and serves as chairman of the powerful Senate Tax and Fiscal Policy Committee. He declined to tell the Journal Gazette on February 17th how much he was paid but considered it a small amount, saying “I tried to keep an arms-length business relationship with them. I’m terribly embarrassed to be linked in any way.”
One problem that could by fixed in the current special session pertains to audits.
Public schools get audited by the State Board of Accounts. Everything is transparent. Charter schools, however, which have received $1.4 billion in the past five years from Indiana taxpayers according to figures cited by Sen. Mark Stoops, are not audited by the State Board of Accounts but instead can arrange for an audit by any private firm. Obviously, this didn’t work in the case of the two virtual schools.
The Senate Appropriations Committee meets Thursday morning February 27th and could amend HB 1066 or HB 1204 or some other related bill this week to say that charter schools must be audited by the State Board of Accounts, providing oversight and transparency.
The committee could also drop the proposal in HB 1066 to open the budget and expand private school vouchers to the 11,000 foster children in Indiana and their foster family siblings, at a cost estimated by the Legislative Services Agency to be $6 million to $12 million! The budget was not opened to boost teacher pay and should not be opened in this short session for expanding private school vouchers.
Let your legislators and members of the Senate Appropriations Committee know that you are appalled by this scandal and the loss of $68 million. Tell them:
- all charter schools must be audited by the State Board of Accounts.
- this can’t wait until next year.
- they should fix the law for better audits yet this session.
- the budget should not be opened to expand private school vouchers to foster children and their siblings, at a cost of $6 million to $12 million.
Republican Senators Mishler (S9@iga.in.gov), Bassler (S39@iga.in.gov), Boots (S23@iga.in.gov), Brown (S15@iga.in.gov), Charbonneau (S5@iga.in.gov), Crider (S28@iga.in.gov), Ford (S38@iga.in.gov), Holdman (S19@iga.in.gov), Zay (S17@iga.in.gov)
Democrat Senators Tallian (S4@iga.in.gov), Breaux (S34@iga.in.gov), Melton (S3@iga.in.gov), Niezgodski (S10@iga.in.gov)
If you don’t read this in time for the Thursday, February 27th meeting, the Senate could still add second reading amendments to bills next week, so let them know how you feel about the virtual school scandal.
The Need for School Stability
Students need stable schools.
One of the great features of public schools run by elected boards for nearly 180 years is their stability as cornerstones of local communities.
Now, millions of taxpayer dollars are going to unstable private and charter schools run by unelected boards, whose closures disrupt the education of students in crucial ways.
Urge your Senator and your member of the House to stabilize our schools with proper audits.
Thank you for actively supporting public education in Indiana!
“Vic’s Statehouse Notes” and ICPE received one of three Excellence in Media Awards presented by Delta Kappa Gamma Society International, an organization of over 85,000 women educators in seventeen countries. The award was presented on July 30, 2014 during the Delta Kappa Gamma International Convention held in Indianapolis. Thank you Delta Kappa Gamma!
ICPE has worked since 2011 to promote public education in the Statehouse and oppose the privatization of schools. We need your membership to help support ICPE lobbying efforts. As of July 1st, the start of our new membership year, it is time for all ICPE members to renew their membership.
Our lobbyist Joel Hand is representing ICPE extremely well in the 2020 short session. We need your memberships and your support to continue his work. We welcome additional members and additional donations. We need your help and the help of your colleagues who support public education! Please pass the word!
Go to www.indianacoalitionforpubliced.org for membership and renewal information and for full information on ICPE efforts on behalf of public education. Thanks!
Some readers have asked about my background in Indiana public schools. Thanks for asking! Here is a brief bio:
I am a lifelong Hoosier and began teaching in 1969. I served as a social studies teacher, curriculum developer, state research and evaluation consultant, state social studies consultant, district social studies supervisor, assistant principal, principal, educational association staff member, and adjunct university professor. I worked for Garrett-Keyser-Butler Schools, the Indiana University Social Studies Development Center, the Indiana Department of Education, the Indianapolis Public Schools, IUPUI, and the Indiana Urban Schools Association, from which I retired as Associate Director in 2009. I hold three degrees: B.A. in Ed., Ball State University, 1969; M.S. in Ed., Indiana University, 1972; and Ed.D., Indiana University, 1977, along with a Teacher’s Life License and a Superintendent’s License, 1998. In 2013 I was honored to receive a Distinguished Alumni Award from the IU School of Education, and in 2014 I was honored to be named to the Teacher Education Hall of Fame by the Association for Teacher Education – Indiana. In April of 2018, I was honored to receive the 2018 Friend of Education Award from the Indiana State Teachers Association.