K12, Inc.,  a Virginia-based company that runs online-based public schools in 29 states, is under investigation by the Florida education department after several K12 teachers refused to sign class rosters with students the teachers had never taught.
From the Florida Center for Investigative Reporting , which reported on the Florida investigation Tuesday:
The Florida Department of Education has launched an investigation of K12, the nation’s largest online educator, over allegations the company uses uncertified teachers and has asked employees to help cover up the practice.
In one case, a K12 manager instructed a certified teacher to sign a class roster of more than 100 students. She only recognized seven names on that list.
“I cannot sign off on students who are not my actual students,” K12 teacher Amy Capelle wrote to her supervisor. “It is not ethical to submit records to the district that are inaccurate.”
Florida requires that teachers have state certification, and K12, Inc. is accused of trying to get around the requirement by having certified teachers (which are costlier for K12, Inc. to hire) sign off on students that were being taught by non-certified teachers.
K12 Inc. has denied any wrongdoing, and released a statement to FCIR Tuesday saying it was working with Florida education officials to resolve the issue.
“We do not believe the allegations against K12 regarding teacher certification are accurate,” K12 spokesman Jeff Kwitowski told FCIR.
The market reacted swiftly to Tuesday’s report about the Florida investigation, and K12 stock (NYSE:LRN ) had one of the biggest drops on the New York Stock Exchange yesterday, losing 13 percent of its value and ending at $20.31 a share, according to the Associated Press .
The company, once a favorite of Wall Street investors for its fast growth and high profit margins, has suffered a series of blows over the last year, after the New York Times  and Washington Post  both published extensive stories that questioned the company put profits over providing quality education to public school students.
The company is now facing a class-action investor lawsuit as well, accusing K12’s top officials of lying to investors about the viability and quality of its online education programs.
Earlier this year, a study by the National Education Policy Center  found that students at K12, Inc.-run schools are fell behind their public school counterparts in math and reading. A Tennessee legislator called that state’s decision to open a K12-run school a ““a risky experiment that blew up in our face” earlier this week  when test scores showed the school fell in the bottom 4 percent in the state.
The FCIR report also points out that the NCAA is no longer accepting credits from K12’s Aventa Learning, which offers online classes that student-athletes had used to fill in gaps in their academic records.
In Georgia, the company has also come under fire for running afoul of state and federal guidelines for disabled and special education students, according to The Financial Investigator , an investor news blog that’s written extensively about K12. The blog first wrote about the Florida troubles on Sept. 4, and had obtained records from Florida education officials about the teacher certification issues through a public records request.
The Office of the Georgia School Superintendent has threatened to terminate the K12-run Georgia Cyber Academy’s charter with the state unless the online school reduces its teacher-student ratios, hires more staff to help students with disabilities and irons out some financial issues, according to an Aug. 7 letter  from the state agency posted by the Financial Investigator.
The company is trying to corner a piece of North Carolina’s education market, and has lodged a legal fight to open a taxpayer funded virtual school in the state.
Students, from kindergarten through high school, would use their home computers and take classes online. Funding would come from taxpayers, with the home school district of each child sending K12 $6,700, or more, for each student.
In North Carolina, the company, under the auspices of a non-profit that was started up by K12, tried to gain approval to open a statewide online school by seeking an unusual route of approval through the N.C. State Board of Education by first getting backing from Cabarrus County school officials.
That attempt for approval failed after the state board ignored the online school’s application, and the company and its non-profit, N.C. Learns, filed a grievance against the N.C. State Board of Education seeking to open the school. An administrative law judge sided with K12, but a Wake Superior Court judge ruled earlier this summer that the N.C. Board of Education had acted properly in not considering the virtual school’s application.
(Click here  to read an N.C. Policy Watch story about the most recent ruling.)
Sen. Fletcher Hartsell, a prominent Republican legislator hired on as an attorney for N.C. Learns, is appealing that decision to the N.C. Court of Appeals. The appeal is expected to take several months.