The Ohio Auditor of State recently issued a finding for recovery against Elevated Excellence Academy, a now closed Cincinnati charter school, after determining that the school received more state funding than its student data supported. The report cites internal control deficiencies and inaccurate record keeping tied to enrollment and attendance documentation.
Read the full Auditor’s press release here:
https://ohioauditor.gov/news/pressreleases/Details/7723
On its face, this is a technical matter. A school overreported enrollment or could not substantiate participation. An audit followed. A recovery finding was issued. The enforcement mechanism worked.
But when these findings become a recurring headline rather than an anomaly, the question shifts. Is this evidence of a system functioning as intended, or evidence of structural weaknesses that allow problems to persist until after public money has already been spent?
The mechanics of overpayment
Ohio’s charter schools, known legally as community schools, are funded primarily through state per pupil allocations. When a student enrolls in a charter school, the state redirects funding from the student’s home district to the charter.
Because funding is enrollment driven, accurate documentation is central to the integrity of the system. The Auditor’s finding against Elevated Excellence Academy indicates that the school received funds unsupported by verifiable student data. When enrollment and participation records do not align with funding claims, the state issues a finding for recovery to recoup taxpayer dollars.
This is not an isolated concept in Ohio’s charter history.
The most prominent example remains the collapse of the Electronic Classroom of Tomorrow in 2018. After years of disputes over attendance verification, state officials concluded that ECOT had been overpaid for thousands of students. Subsequent findings for recovery exceeded $100 million. The Ohio Supreme Court upheld the Department of Education’s authority to verify student participation and demand repayment.
In both cases, the issue was not simply academic performance. It was documentation. Internal controls. Whether public funds were tied to actual student engagement.
A pattern or a safeguard?
Supporters of charter schools argue that audit findings demonstrate accountability in action. Unlike district schools, they note, charters can be closed when mismanagement occurs. Sponsors can revoke contracts. The Auditor can issue recovery findings. The system contains enforcement tools.
Critics respond that enforcement after closure is not prevention. When a school closes, students are displaced. Districts must absorb them, often mid year. Teachers lose jobs. And even when recovery is ordered, the full amount is not always recouped.
According to the Ohio Department of Education and Workforce’s annual Community Schools reports, dozens of charter schools have closed statewide over the past two decades due to academic failure, financial mismanagement, or sponsor action. Closure may signal accountability, but high closure rates also suggest instability.
In traditional public school districts, outright dissolution is rare. Governance occurs through elected boards, open meeting laws, and collective bargaining agreements that impose layers of oversight before financial breakdown reaches a terminal stage.
Charter schools operate under nonprofit governing boards but may contract with private management organizations for operations, staffing, and services. That hybrid structure can create blurred lines of responsibility, particularly when internal controls are weak.
Internal control deficiencies are not minor errors
In the language of public auditing, “internal control deficiencies” is a technical phrase. It refers to weaknesses in procedures that safeguard assets and ensure accurate reporting.
In education finance, internal control failures can mean incomplete attendance tracking, inadequate documentation of enrollment, or insufficient financial oversight. When funding depends on those metrics, the risk is straightforward: public dollars can be misallocated.
The Elevated Excellence Academy finding underscores that these issues persist even after years of reform prompted by larger scandals. If accurate student data is foundational to public funding, then recurring documentation failures raise concerns about the durability of oversight mechanisms.
The larger fiscal context
Ohio directs significant state funding to charter schools annually. Community schools receive state and federal dollars but do not receive local property tax revenue. When funding shifts to a charter, the student’s home district loses the associated state allocation but retains many fixed operational costs.
When a charter later closes due to mismanagement or financial failure, districts must absorb returning students, often without restoration of prior funding levels.
The cumulative effect can strain district budgets while audit findings chase money that may or may not be recoverable.
What does this say about the system?
One audit does not define a sector. But repeated findings for recovery across multiple schools over the years suggest that documentation and financial oversight remain pressure points.
The question for policymakers is not whether charter schools should exist. It is whether the funding model incentivizes enrollment growth more strongly than compliance discipline. And whether oversight is proactive enough to prevent overpayments before they accumulate.
Public education, in its traditional district form, is governed through direct democratic structures. Charter schools operate through contracts and sponsor agreements. Both models rely on trust. Only one depends heavily on external audits to confirm that students counted are students served.
If Ohio wants to demonstrate that its charter system has matured beyond the controversies of the past decade, findings for recovery should become rare. Not routine.
Until then, each new audit reinforces a difficult perception: that internal control deficiencies are not isolated accidents, but symptoms of a system still struggling to balance flexibility with fiscal responsibility.