Report: $225M in K-12 fraud found across six years

The Center Square ^ | 7/9/26 | Andrew Rice

[CFW]

(The Center Square) - More than $225 million in fraud was reported by state education departments and school districts from 2019 to 2026, according to a new report.

Open the Books, a federal spending watchdog, and the State Financial Officers Foundation, analyzed six years’ worth of reports from the U.S. Department of Education’s Office of the Inspector General. The report found multi-million dollar fraud schemes in school districts across the country and in American territories.

OJ Oleka, CEO of the SFOF, said the fraud schemes happened due to a lack of oversight in education departments and the ability of bad actors to take advantage of certain programs.

“These entities are engaged deliberately in trying to take money out of the hands and literally the mouths of kids,” Oleka told The Center Square. “It’s a pretty disgusting thing.”

The report found Indiana schools documented the largest fraud scheme over the last six years. Leadership at two virtual online charter schools in the state inflated their enrollment numbers and received an additional $44 million from the state than they should have. Leaders at the school directed the fraudulent fund to several companies, according to the Office of the Inspector General.

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TOPICS:
KEYWORDS: corruption; education; fraud; students

[CFW]

Meanwhile, a large number of college students can't read at a 4th grade level.

Trump needs to keep to his promise and dismantle the Dept of Education. It serves no purpose other than enriching the teacher's union leaders. All while the students are being dumbed down.

Give education back to the parents and local communities and you'll start to see an improvement.

[PeterPrinciple]

Give education back to the parents and local communities and you’ll start to see an improvement.

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the assumption is they want it back...................

[Liz]

One report singled out Indiana w/ the largest school fraud scheme over six years.
<><>Leadership at two virtual online charter schools inflated enrollment numbers
<><>the falsification got them an additional $44 million state funds than they should have.
<><>school leaders redirected the fraudulent monies to “several companies.”
<><>millions went to for-profit management companies and shell corporations they controlled.

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The primary entities identified in federal indictments and state audits include:

AlphaCom: A management and software company founded by the schools’ operator, which was paid approximately $10 million.

Eightbit: A vendor company that was overpaid more than $14 million.Cyber Educational Services: Another associated vendor overpaid by about $8 million.

Educational Innovation Research, LLC: A shell company allegedly used to launder money and funnel tens of thousands of dollars into political campaigns.

A Simple Reminder & Center for Leadership Development LLC: companies operated by the families of school leadership that improperly received public funds.

Together, these entities were tied to a $44.6 million fraud case involving Indiana Virtual School and Indiana Virtual Pathways Academy.

[Steely Tom]

Is this another of those “the system failed” things? No one gets in any trouble?

[crusty old prospector]

They always claim that it is a lack of oversight. How can that be with millions of civil servants staring at Instagram?

[CFW]

Speaking of education.....

The Fifth Circuit has held that federal law prevents states from providing in-state tuition benefits to illegal aliens.

"Appellants’ theory is ungrounded. Section 54.052(a)(3) makes residency turn on two elements: (A) graduation from a public or private high school (or the equivalent of a high school diploma) in Texas “and” (B) continuous residency requirements. “[A]nd” requires both elements be present to establish residency. See United States v. Palomares, 52 F.4th 640, 643 (5th Cir. 2022) (recognizing that the “ordinary meaning of ‘and’ . . . is conjunctive”). In other words, residency, for the purposes of in-state tuition, cannot be established under section 54.052(a)(3) without satisfying the continuous-residence requirement, which is “the basis” for the provision of postsecondary benefits. See § 1623(a). Plainly put, residence is a necessary condition for in-state tuition in Texas. "

Court's Ruling

[PeterPrinciple]

Chicago Public Schools lost $1 million in Indian Education formula grants that were intended for Native American and Alaska Native ancestry students. An investigation found that grant funds went to students of Indian, Burmese Bangladeshi, Pakistani and Nepali descent instead.

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an honest mistake.......................

[PeterPrinciple]

“When you start throwing around that much money, you’re going to lose it to fraud,” Staley said. “It’s just inevitable.”

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and there it is, no money, no fraud.

[PeterPrinciple]

Yee, who is running for school superintendent in Arizona, said the U.S. Department of Education’s planned shift to state enforcement will be an enormous change for fraud in schools. She said states with more discretion over fraud enforcement will lower costs to taxpayers.

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that is the good theory but......................

[17th Miss Regt]

All while the students are being dumbed down.

The better to enslave them with!

[Sicon]

Report: $225 million in fraud over six years.

Somalis: "Amateurs."

[Liz]

Nice contribution to the thread.

[MrBambaLaMamba]

Next audit all federal grants for municipal transit systems and public housing.