All told, the state questions whether districts received $27 million more than they deserved, mostly in the 2010-11 school year.
Four programs in Snohomish County are among those under review, together accounting for $3.8 million in questionable funding. They include programs in Edmonds, Mukilteo, Snohomish and Sultan. Marysville and Stanwood-Camano also received letters of concern.
Whether districts will have to pay that money back and, if so, how much, could take up to a year to sort out.
Meanwhile, school administrators are rushing to assure the public.
"It was a very frustrating experience for us. And we're frustrated that the public may come away with the impression that their tax dollars aren't being spent well," said Danny Rock, administrator at Edmonds Heights K-12.
Edmonds Heights did not have adequate documentation to justify $1.1 million in funding, according to state auditors. District officials vehemently dispute the claim and plan an appeal.
The state auditor's office audited 67 out of 295 districts, coming away with 52 "reportable conditions," including findings and management letters.
The sheer number of findings has raised eyebrows across the state. So much so that the state auditor's office plans to release a detailed overview of the issue next week, spokesman Matt Miller said.
"This is a very big deal. It's a relatively new program. And it's certainly something that caught our attention," Miller said.
At the same time, Miller noted that many of the findings had to do with documentation issues. He added that the findings don't mean students weren't actually enrolled and engaged in learning.
An audit resolution team at the state Office of the Superintendent of Public Instruction will handle appeals and determine the final outcome for each district.
"There are times that we reduce the amount through the resolution process. So the districts have an opportunity to work with us. So we don't just automatically recover the money," said Jennifer Carrougher, who handles audit management and resolution for the superintendent's office.
Alternative learning programs have long been a source of confusion -- for lawmakers as well as the educators trying to follow their changing rules.
These programs were targeted for funding cuts in 2010-11. Educators complain of paperwork that rivals that of law-heavy special education programs. Charter schools could further complicate how school programs are classified. And some worry a few bad apples, notably online programs, are making it more difficult for everyone, including proven programs.
Two bills before the Legislature aim at clarity. One would separate online learning programs, a source of particular concern with much of the work outsourced to private companies. Another seeks to clean up how we think of alternative learning programs, noting that the term encompasses myriad ways students learn outside a traditional classroom.
Rock, the Edmonds administrator, is deeply involved in state-level conversations about alternative learning rules, has served on various committees and is president-elect for the Washington Association for Learning Alternatives.
But he said even he has trouble sometimes interpreting the rules that come down from the state superintendent's office.
That complicated the audit process, he believes, especially for an audit staff that lost many of its school specialists to budget cuts.
"Most of the time, (an audit) is not a terribly complicated interpretative process because the rules around procurement cards, or how you spend your grant money, or how you file your purchases -- it is black and white," Rock said. With alternative learning, it's more gray. "By its very definition it's supposed to be something that can look different in every district and every school."
Part of Edmonds Heights' problems were due to a new software program that ended up not being ready by the start of school. So paper-and-pencil records were kept and transferred to the new digital system as the year went along. The problems have since been fixed.
"Our program was not a mess. Our practices were not a mess. But our data was," Rock said.
He noted that Edmonds Heights has the district's highest graduation rate and has been honored by the state.
Of particular concern to lawmakers has been Columbia Virtual Academy, an online program run out of the Valley School District, which administers the program for 13 other school districts.
In an earlier audit, Valley School District was required to pay the state back more than $1 million. It's paid back most of that bill.
"They were the center of the bulls'-eye, in terms of what SAO and lawmakers were aiming for, but the rest of us got caught up in that net," Rock said.
Sultan School District is among those that offers Columbia Virtual Academy classes through an agreement with Valley School District.
Sultan administrators maintain that the auditor's office focused on a small sample of students and the majority of students were actually properly enrolled, Superintendent Dan Chaplik said.
The auditor also did not focus on the agreement between Sultan and Valley school districts, Chaplik said.
There are 48 students of the district currently enrolled in the program. In 2010-11, the district claimed the full-time equivalent of 302 students.
The district plans to go through the audit resolution process.
"I'm confident that after all of this is done, you won't see a $2 million bill," Chaplik said.
Some school districts have since ditched alternative learning, if only as a technicality, since the rocky audit.
The Mukilteo School District is one of them.
The district's night classes at the alternative ACES High School came under scrutiny in the audit, which questioned $127,374 in funding to the program.
"While the night school is still offered, it now operates as a regular basic education program," district spokesman Andy Muntz said.
The result is a loss in state funding, since the district is unable to claim about a dozen full-time equivalent students based on the time teens actually spend in a physical classroom. But the district felt it was worth getting rid of the "administrative and paperwork burden."
Indeed, not everyone is fighting the results.
Snohomish School District's online learning program, APEX, also received a finding. Auditors questioned whether any of the students enrolled should have received funding, since the district never filled out required student learning forms.
According to the audit report, the district concurred with the results and has since fixed the issue.
The state auditor's office found reason to question $27 million in state funding to alternative learning programs statewide, mostly during the 2010-11 school year. Snohomish County programs cited for potential overpayment:
Sultan (online programs)*: $2.4 million
Edmonds (parent partnership school): $1.15 million
Mukilteo (high school night classes): $127,374
Snohomish (online program): $115,393
* Includes potential overpayment in fiscal years 2010 and 2011.
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