Audit: 2 Indiana online schools misspent nearly $86 million

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Two Indiana online charter schools accused of inflating their enrollments inappropriately paid nearly $86 million to companies linked to the schools’ founder or his associates, according to a new state audit report.

Posted: Feb 13, 2020 4:31 PM

INDIANAPOLIS (AP) — Two Indiana online charter schools accused of inflating their enrollments inappropriately paid nearly $86 million to companies linked to the schools’ founder or his associates, according to a new state audit report.

The State Board of Accounts review found that the Indiana Virtual School and Indiana Virtual Pathways Academy wrongly received $68.7 million in state payments by improperly claiming about 14,000 students as enrolled between 2011 and 2019.

Those students had no online course activity, the report said.

Both schools shut down in August after state education officials cut off funding based on initial estimates of $40 million in enrollment overpayments.

The audit report said its findings had been given to federal and state authorities for possible criminal violations.

A federal grand jury subpoena to the schools in August was included in documents released last year, but a spokeswoman for the U.S. attorney’s office in Indianapolis said Thursday she could not comment.

The state audit links much of the misspending to Thomas Stoughton, who headed the online schools from 2011 until 2017.

Stoughton couldn’t immediately be located for comment and a former attorney for his company declined to comment.

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