Alternative learning programs, including online courses, have been popping up on the radar of state auditors.

At stake are millions of dollars worth of state-allocated basic education funds that support the so-called Alternative Learning Environment, or ALE, programs, individualized courses of study such as online courses, contracts between school and student and parent partnership plans.

For the 2009-10 school year, auditors estimate a total of 20 school districts overcharged state educational coffers a combined $3.9 million. The audits for 2011 are not complete, but so far auditors have found issues with the paperwork of 28 school districts, including five in the Yakima Valley.

“The reason that we have more findings is that we are auditing more (alternative programs),” said Mindy Chambers, a spokeswoman for State Auditor Brian Sonntag. “Last year, we audited 20 school districts. This year we audited 67. We audited more based on risks we identified the previous year.”

Some alternative programs, especially those that use online courses, are contracted out, meaning a portion of the overpayments could end up in the pockets of private companies.

Most of the problems lie in the way the districts report student progress on individual learning plans, the audit found. District officials argue they have been adequately monitoring student assessment but are using different terminology on the paperwork. They also point to state rules for reporting that have recently changed.

For example, in a September report, the auditor accused Grandview of overcharging $324,000 in 2010 and 2011 for students involved with contract learning, a program that lets kids check out educational packets while teachers monitor progress. The auditor faulted the district for not properly noting when a student had made satisfactory progress each month on individual learning plans, erring 53 percent of the time.

Kevin Chase, superintendent of the Grandview School District, said the students spend three or four hours a week with an instructor, who did everything except use the direct words “satisfactory progress.”

“That’s why everybody is getting caught,” Chase said.

This year, Sunnyside, East Valley and Naches Valley school districts also had “findings” — an auditor’s most severe red flag — about their ALE programs. The Ellensburg and Selah districts received management letters, a lower level of concern by auditors.

In Sunnyside, some of the problems were related to students enrolled in No Dropouts, an online program of the private school The American Academy that offers high school students a chance to pursue a diploma at their own pace. Officials with the district and the Salt Lake City company stand by their work, though The American Academy promised in a letter to the school district to pay back any of the overpayments that withstand an appeals process.

“If the state determines we made mistakes, we will be financially responsible for those mistakes,” Rebekah Richards, chief academic officer and founder of The American Academy, said in a phone interview.

The audit reports direct the schools to work with the state Office of the Superintendent of Public Instruction to determine how much of the allocation, if any, should be paid back.

Overpayments noted for the 2010-11 and 2011-12 school years are still in negotiation. For the 2008-09 and 2009-10 school years combined, the state superintendent collected roughly half of the $4.7 million of overpayments alleged by the auditor’s office.

The state superintendent and the Legislature have altered reporting requirements for alternative learning programs in an attempt to improve accountability, said Rep. Sam Hunt, D-Olympia, chairman of the House Ways and Means Committee.

“There were so many of them out there, we just weren’t sure what was going on with many of them,” he said.

The changes came during the last session, at the same time as cuts to ALE programs and many other school-related budget items.

“None of them were cuts that we wanted to make, including the ones we did with ALE,” Hunt said.

• Ross Courtney can be reached at 509-930-8798 or