School officials in Steilacoom, Federal Way and Quillayute Valley stress that their districts served the students at issue in the audit.

They say the problems cited by auditors stem from trying to track enrollment, learning hours and academic progress in the expanding frontier of online education.

“I feel we’ve done what we’re supposed to do, given the guidance the state gave us in 2005-06, when we first started this program and there were no preprinted guidelines,” said Art Himmler, superintendent of the Steilacoom Historical School District.

“I think we need to recognize this form of instruction doesn’t jibe with the rules for brick-and-mortar instruction,” he added.

Virtual school programs have mushroomed since the Legislature made it more feasible for districts to offer online classes to students statewide, starting with the 2006-07 school year.

Students may come from a homeschool background, may struggle in a traditional school setting or may need a flexible way to earn a diploma because of jobs, medical conditions or other factors.

Districts’ online programs don’t have to stay within their boundaries. The Steilacoom and Quillayute Valley programs recruit students from all over Washington.

After the new law went into effect, the number of district-sponsored virtual programs swelled from 29 to 49, the audit said. More than 6,500 students were enrolled last school year.

The audit, requested by the Legislature, focused on districts with the three largest online programs in the 2006-07 school year.

After examining records of a small sample of students, auditors found that reporting errors resulted in state overpayments of $36,409 for Steilacoom’s Washington Virtual Academy and $27,843 for Federal Way’s Internet Academy.

If the sample results were projected to the programs’ total enrollment that school year, Steilacoom would owe the state more than $3 million and Federal Way more than $1 million.

Quillayute Valley’s Insight School of Washington, based in Forks, would owe $16,726 for its sampled students, or $1.25 million if projected to its total enrollment.

In a written response to the auditor, Himmler called the methodology “flawed,” and said auditors used too small of a sample.

According to district officials, the audit focused on 19 of Steilacoom’s 1,000 online students; eight of 600 in Quillayute Valley; and 22 of 314 in Federal Way.

State auditors responded that they stand by their methodology and recommendations.

As with other public school programs, the virtual academies are free to students and funded through per-pupil revenue from state and local levy dollars. But unlike traditional schools, students generally receive the bulk of their instruction at home.

Districts must keep learning plans for each child, records of weekly contact with teachers, hours spent in “learning activities,” monthly progress reviews and other documents.

Auditors found the districts lacked some required paperwork.

For instance, Steilacoom didn’t have records for about a quarter of its sampled students releasing them from their home school district. Federal Way and Quillayute Valley lacked monthly progress reviews for more than half of sampled students.

Federal Way and Quillayute Valley said they were changing the way they keep records to meet auditors’ concerns.

But they, like Himmler, said they were trying their best to comply with reporting rules that might need revision.

For instance, some Todd Beamer High School students took Internet Academy classes while sitting in a Beamer classroom.

Auditors dinged Federal Way for not having a form signed by those students’ parents saying they understood their children were not being homeschooled, Federal Way chief financial officer Sally McLean said.

She said requiring parents to sign a form in those cases seems bureaucratic. While tweaking that rule would be easy, she said, “Some of the more challenging discussion might wrap around how you measure student progress in an online academy.”

District officials will meet with the state Office of the Superintendent of Public Instruction to determine whether any state revenues should be returned.

It’s too early to say whether the superintendent’s office agrees with the audit recommendations, said spokesman Nathan Olson.

Quillayute Valley Superintendent Diana Reaume said the district has learned from its mistakes as it embarks on a new way to serve students.

“I feel we’re building the plane as we’re flying,” Reaume said. “The state has done a good job of guiding us, but sometimes they say, ‘What do you think is a reasonable solution?’ In some ways we’ve gotten very good technical assistance and in other ways neither party was sure what to do.”

Olson said the superintendent’s office has provided extensive training and technical help over the past 31/2 years.

“However, these audit findings make it clear that more is needed,” Olson said, “and OSPI will work with the state Legislature to better define the requirements for operating such programs.”

Debby Abe: 253-597-8694

Online academies

STEILACOOM

Name of school: Washington Virtual Academy

Grades served: Kindergarten through eighth grade

Current enrollment: 2,600

For more information: www.wava.org.

FEDERAL WAY

Name of school: Internet Academy

Grades served: Kindergarten through 12th grade

Current enrollment: 240

For more information: www.iacademy.org

QUILLAYUTE valley

Name of school: Insight School of Washington

Grades served: Ninth through 12th grade

Enrollment: 1,600

For more information: www.insightwa.net

TO READ THE AUDIT

Go to the Washington State Auditor Web site at www.sao.wa.gov. Search for report No. 75118, issued Nov. 26.

Debby Abe, The News Tribune