CLEVELAND, Ohio -- The controversial ECOT online charter school could close by the end of this month after financial woes led its sponsor and oversight agency to pull away.
The Electronic Classroom of Tomorrow (ECOT) was told Wednesday by its sponsor, the Educational Service Center of Lake Erie West, that it will suspend its sponsorship because the school cannot meet its financial and legal obligations for the rest of this school year.
The school has five days to appeal that decision, but it would have to close if its appeal is not granted. Charter schools must have a sponsor to operate.
The school has maintained that it will run out of money by March because it must pay back $2.5 million a month to the state. That goes toward $80 million the Ohio Department of Education says ECOT was improperly paid in recent years for inflated student counts.
The school is appealing those repayments to the Ohio Supreme Court, with oral arguments scheduled for Feb. 13, but the court has denied ECOT's request to block the repayments while the case plays out.
April Morin, who heads charter school oversight for the sponsoring ESC, told the school in a letter Wednesday that it must act now, not after money runs out.
"If ECOT's available funds are depleted in March or April 2018, it will be forced to close in the middle of a semester for students, causing substantial disruption and potential harm to ECOT's more than 12,000 students," Morin wrote.
ECOT's second quarter ends on Jan. 18.
ECOT will also lose a state-required bond for its treasurer by Jan. 27, which would make operations after that illegal.
And, Morin noted, "If ECOT continues to operate until available funds are almost depleted, there is a substantial risk that ECOT employees will not be paid for their service."
ECOT spokesman Neil Clark said the school could survive longer if the repayment amount is reduced.
"We are actively working with the sponsor to remedy the suspension and have been working with ODE over the last year to settle," Clark said. "ODE has not agreed to our settlement options. Our goal is to keep ECOT's doors open and our students in the classroom and provide them with the education they deserve and the setting that is appropriate for their needs."
State Sen. Peggy Lehner, chair of the Senate Education Committee, said legislators will watch what happens, but her concern is mostly for the roughly 12,000 students who would have to find another school mid-year.
"It's going to throw a lot of kids into scrambling to find someplace to land that they are comfortable with," she said.
ECOT, Ohio's largest online school, has drawn controversy in recent years both because of its repeated F grades on state report cards but also its state funding.
An attendance review by the department for the 2015-16 school year found that ECOT could document class participation of only 6,300 of its 15,300 students -- a 59% gap - leading the state school board to demand that ECOT repay $60 million.
In September, the state found that for the 2016-17 school year ECOT can properly document about 11,600 of the 14,200 students it claimed. ECOT could not prove that the other 18.5 percent of its students did enough classwork to satisfy the state.
That's a large reduction from the issues in 2015-16, but could still lead the state to demand repayment of $19.3 million of the $104 million in tax dollars the school took in last year.
ECOT has been fighting the department in multiple courts, claiming that the state is supposed to pay the school based solely on its enrollment, and that the state improperly changed the rules to base funding on how long students are signed on to the school's online learning program.