COLUMBUS — The state's biggest charter school must repay the Department of Education about $1.6 million as part of a settlement over a dispute involving its enrollment procedures.

        The state will deduct the money each month for three years from regular state aid payments to the Columbus-based Electronic Classroom of Tomorrow.

        The annual repayment of about $550,000 represents about 3 percent of eCOT's yearly revenue of $16 million. The $1.6 million settlement involves overpayments during the 2000-01 school year.

        The school and the state reached a tentative settlement this week. A final agreement is expected next week, said J.C. Benton, a Department of Education spokesman.

        “We're definitely pleased with the settlement and believe it's fair because it does not impose an undue burden on eCOT or the state,” Mr. Benton said. “We want to get over that first year of eCOT's existence and together move forward in allowing this sort of educational opportunity to take place in the state.”

        The settlement figure is included in eCOT's annual state audit being released today.

        The audit found that the school ended last school year with a deficit, although school officials wouldn't say how much.

        They blamed the deficit on start-up costs, depreciation of equipment and having to write off almost 400 computers that the school was unable to collect from students who left eCOT.

        The school recently hired bail bondsmen to recover about 100 computers still unaccounted for, said eCOT founder William Lager.

        At issue during the repayment negotiations was the way eCOT enrolled students. The school uses home-based computer instruction.

        A state audit of eCOT in November showed that the Education Department was providing money for students outside enrollment standards.

        Although eCOT said it had enrolled 2,270 students in September 2000, records show only seven students logged onto one of the school's computer systems during that time. Nevertheless, the school received funding for all its students, or $932,030, according to the state audit.

        The school said it followed all the state guidelines for enrollment that were available.

        Under the agreement, the school will provide certified information about a child's enrollment and studies each month. Other online schools must follow the same procedures, Mr. Benton said.

        Mr. Lager said he agreed to the settlement to close the matter and move on. The school has about 3,100 students statewide.

        “It is not an admission that anything was wrong on either side's part,” Mr. Lager said. “It is an admission that for the first year of operations and clear into the second year of operation, there existed no standards.”

        Tom Mooney, president of the Ohio Federation of Teachers, said the repayment confirms the union's suspicions about how long the enrollment problem lasted. The OFT has sued the state over charter schools, arguing they violate both the Ohio Constitution and state law.

        Steve Ramsey, president of the Ohio Charter School Association, said eCOT and other schools didn't receive guidance about what was expected of them in time to do anything about it.

        “There was a lack of thinking through and lack of working out the details, and trying to do it after the school was up and running was real problematic,” he said.

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