MALAD — The Oneida School District will receive more than $2 million in added state funds this year to accommodate an unprecedented influx of hundreds of students.

Yet these new enrollees won’t walk the halls of Oneida’s schools, because they live in cities as far away as Coeur d’Alene, Twin Falls and Payette.

Earlier this year, the remote Southeast Idaho district signed a contract with Utah-based online curriculum provider Harmony to absorb the company’s 405 digital homeschoolers living across the Gem State. Idaho’s school funding formula, based on “average daily attendance,” enables Oneida to receive a full measure of taxpayer funds for these remote online learners, even though they don’t live in the district’s boundaries or attend its brick-and-mortar schools.  

On top of the boost in taxpayer dollars, Harmony guaranteed Oneida a 10 percent return on money typically paid to the company for its services — an amount on track to easily exceed $100,000 this school year. In return, Harmony, keeps its network of Idaho clientele and is on track to generate well over $1 million in revenues from state tax dollars in 2017-18.

Oneida superintendent Rich Moore insists that the partnership is not a “money maker” for the district, but an Idaho Education News investigation revealed an increase of $370,000 in the district’s savings account just one year into the partnership. (Moore didn’t respond to questions about Oneida’s savings.)

The investigation also revealed Harmony’s questionable past in Utah. In 2014, the company came under fire  after a state audit showed lax management of distance-learning programs in two charter schools. Both schools eventually severed ties with Harmony, with one local trustee calling it a “predatory company.”

Meanwhile, 22 certified Oneida teachers work from home to help sustain the program, creating Oneida’s own unique challenges for evaluating their performance.

Rep. Wendy Horman, an outspoken legislative leader on school funding and teacher performance, expressed concerns about districts enrolling online learners to boost funding.

“I’m aware of it happening, though not in (Oneida),” said Horman, R-Idaho Falls. “If anything, it illustrates the importance of updating our school funding formula.”

Harmony’s history in Idaho

Two of Idaho’s largest districts — Bonneville in Idaho Falls and West Ada in the Treasure Valley — first started contracting with Harmony in 2013.

The Bonneville agreement launched one of East Idaho’s first fully functioning K-8 online schools, and at least 100 homeschoolers across the state enrolled.

The school’s principal, Tyrell Salisbury, said families “did a great job” being faithful to the program, but “we just didn’t have the resources to work statewide.”

Bonneville struggled to track student progress within Harmony’s array of online programs, which range from math classes to Rosetta Stone courses in Mandarin Chinese. Meeting the state’s standardized testing requirements and serving special education students remotely also burdened the district.

After just one year, Bonneville severed ties with Harmony to build its own online program and limit enrollment to local students.

West Ada’s experience was similar and also short-lived. Idaho’s largest district limited its Harmony enrollment to those living within its boundaries. After one year, West Ada completely cut ties with Harmony in 2017.

In 2016-17, Harmony sought another Idaho district to absorb what had grown to more than 300 online learners.

Harmony partners with Oneida

To keep its snowballing Idaho clientele and share of state funding, Harmony found Oneida, which enrolled some 830 kids in 2015.

The district signed a no-bid contract with the company in September 2016, enrolling 200 remote students. Oneida called its new online school “Idaho Home Learning Academy.”

Under the terms of the initial 2016-17 agreement, Harmony would reimburse the district for any financial losses resulting from the influx of online students. A loss never occurred. According to Moore, the district netted $10,000 and “used the funds to buy textbooks.”

But the district’s audits show an increase of $370,000 in its fund balance from 2015-16 to 2016-17.

Still, Moore said he “had doubts” about continuing the program this school year, and sought an additional financial incentive from Harmony to continue serving the kids. Harmony again agreed to reimburse Oneida for any financial losses tied to IHLA. As an added incentive, Harmony said the district could keep 10 percent of the money drummed up by its Idaho services in 2017-18.

Moore accepted the deal, and Harmony’s remaining 62 students transferred from West Ada to Oneida. IHLA’s enrollment swelled to more than 405 kids.

It’s unclear how much Harmony or Oneida stand to make from the 2017-18 partnership, though the company’s first of nine monthly invoices totaled $114,481.

District educators say the partnership is essential to helping hundreds of homeschoolers improve their educational experience.

“I’m very confident about the program,” Oneida special programs director Terri Sorenson said. “We are doing what we need to do to make it happen here, and we’re seeing many good things because of it.”

Poor student performance and questions about teacher evaluations

IHLA’s standardized test scores were low last year.  Just 26 percent of the school’s third- through eighth-graders reached proficiency on the math portion of Idaho’s standardized test, well below the state average of 43 percent. English language arts scores trailed the state by more than 7 percentage points.

Parent Rebecca Smith and her four kids have used Harmony since 2014. Smith attributes the performance gap to less emphasis on standardized testing among homeschoolers.

“It keeps my kids on track and I know what they are supposed to be learning,” she said.

But teacher evaluation poses another unique challenge to the program. IHLA teachers typically let parents teach the material. Teachers focus on monitoring student assignments and pointing families to applicable and approved coursework.

The state requires at least two teacher observations annually, using the Charlotte Danielson framework. But this model aligns mostly with a traditional brick-and-mortar setting. Danielson’s metrics include managing student behavior and engaging students in learning — difficult tasks to perform if teachers rarely teach concepts.

Moore said all of Oneida’s Harmony teachers received state-mandated evaluations last year.

“There is some difficulty in using (Danielson) frameworks as the eval tool, in that it was designed for brick-and-mortar teachers, so we adapt it the best we can,” Moore said.

It’s not the first time questions over teacher accountability have swirled around Harmony’s school partnerships.

The Salt Lake Tribune reported in 2014 that Harmony was one of two private Utah-based companies recruiting students to boost enrollment for charter schools. Both schools later came under fire for lax management of their distance-learning programs. They cut ties with Harmony three months later, after public backlash.

What’s next in Oneida

Moore said he questioned whether to continue IHLA after its first year, but has continued to grow the program. In 2017-18, Oneida partnered with another Utah-based online curriculum provider, Tech Trep, bringing in another 158 homeschoolers from across the state.

The partnership boosts IHLA’s enrollment to 563 students, enough to help raise Oneida’s annual revenue from $4.7 million in 2013-14 to $7.6 million in 2017-18, and raise its enrollment by 37 percent from last year.

Despite the upswing in funds — from both an influx in students and direct payments from Harmony — Moore anticipates clearing a profit of $20,000 to $25,000 in 2017-18. However, that’s just a “very rough estimate,” he said.

Several other Idaho districts provide homeschooling services, including West Ada, Bonneville, Vallivue and Lake Pend Oreille, but they rarely serve more than 75 students and usually limit enrollment to students living within their boundaries.

As a rural district, which often struggles to scrounge up local funds, Oneida needs every nickel it can get, Moore said.

“If I were superintendent in one of these larger districts, like Bonneville or West Ada, I’d probably say don’t worry about it — we got bigger fish to fry,” Moore said. “Not here.”

According to its website, Harmony currently provides services in three other states: Utah, Minnesota and Hawaii.

Idaho Education News data analyst Randy Schrader provided data and information for this story.