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State audit calls for Daleville Schools and charter schools to repay $40 million

Daleville Community Schools is looking at a potential money issue.
Photo courtesy Pixabay

DELAWARE COUNTY, Ind. (WTHR) — Daleville Community Schools is looking at a potential money issue.

A state audit was done of two of the charter schools Daleville authorized.

This issue is that Indiana Virtual School and Indiana Virtual Pathways Academy allegedly inflated student enrollment numbers. That led to them receiving more money from the state. The audit found about $79.9 million that would be owed in return.

The State Board of Accounts then recommended the charter schools and Daleville School District only have to pay back half of that, around $40 million.

Daleville Schools itself received 3 percent of the appropriated charter school funds from the state, which would leave it on the hook for about $1.2 million.

It is not clear how much would be able to be recouped from the charter schools.

Daleville Community Schools responded to the report saying it did not have access to the charter schools record until August of 2018 to even know that enrollment numbers were being inflated.

DCS then revoked the schools' charters in February of 2019.

The district then laid out the following objections to the audit:

  • The State did not distribute the authorizer fees to Daleville, nor does it require them. Authorizer fees are part of the terms of the charter agreement.
  • As the fiscal agent for the charter schools, Indiana Virtual Education Foundation (IVEF) received funds from the State and distributed those funds.
  • Daleville accepted those fees in good faith and without malfeasance and had no role in incorrect reporting to the State.
  • Daleville had no means of accessing data submissions from the charter schools until August, 2018, thus had no way to verify accuracy prior to that time.
  • Once inaccuracies and inconsistencies came to light in the Fall of 2018, Daleville spent authorizer dollars on legal fees and investigations which resulted in issuing the Notices of Revocation.
  • Both the SBOE and SBOA have benefited from those investigations.
  • Retroactively recovering any overpayment of authorizer fees from Daleville Schools would put a chilling effect on other authorizers coming forward to report potential irregularities.

It is still up to the Indiana Department of Education to respond to the objections and decide on what money should or should not be recouped.