OKLAHOMA CITY — With forensic audit findings now out in the public, multiple entities are asking questions about Epic Charter Schools finances and bookkeeping practices.
Along with its governing boards, the board of regents for Rose State College, the Oklahoma House of Representatives’ Common Education Committee and the House of Representatives’ Appropriation and Budget Committee’s education subcommittee all held meetings Wednesday to dissect and discuss the findings of the audit conducted by the State Auditor and Inspector into the operations of Epic Charter Schools.
“It would not matter if it was a state agency, a traditional school district or a university,” House Common Education Committee Chairwoman Rhonda Baker (R-Yukon) said. “When serious questions are raised about tax dollars and public policy, we get information and determine what needs to be done. Plain and simple.”
Epic Charter Schools, which now claims to be the largest school in the state, has an all-virtual option, known as Epic One-on-One, and blended learning centers in Oklahoma City, Midwest City and Tulsa. The two have separate sponsors, with the latter sponsored by Rose State College and the former by the Oklahoma Virtual Charter School Board.
At its meeting Wednesday morning, the Rose State College Board of Regents declined to take action regarding its sponsorship contract with Epic Blended Learning Centers. Epic One-on-One’s sponsor voted on Oct. 13 to proceed with potentially terminating their agreement.
Later in the day, lawmakers peppered both state Superintendent Joy Hofmeister and representatives from the State Auditor and Inspector’s Office about the audit’s findings at a joint meeting of the Oklahoma House of Representatives’ Common Education Committee and the House of Representatives’ Appropriation and Budget Committee’s education subcommittee.
Baker reiterated that the legislators’ questions were not an indictment of neither the school nor the methodologies used by State Auditor and Inspector’s Office.
“This meeting isn’t about any of the teachers, families or students associated with Epic Charter Schools,” she said. “They are participating in an innovative learning model that has a lot of support across the state. Our constituents across the state are clearly fans of this model, especially in this pandemic.
“This hearing is in no way an attack on that model. Because we represent those constituents, we need to protect their tax dollars and make sure they are used as intended for the benefit of students.”
Epic leadership was invited to participate in the legislative hearing. In lieu of an in-person appearance, Superintendent Bart Banfield submitted a written statement. Epic Charter School has contested the audit’s findings.
Gov. Kevin Stitt requested the forensic audit of the charter school and its for-profit management company in July 2019 after learning that the school’s financial practices were under investigation by state and federal law enforcement agencies. Among the audit’s findings were that almost one-fourth of the state funds allocated to Epic Charter Schools over the last six years wound up going to Epic Youth Services, a for-profit management company.
Litigation is still pending in state court over access to some of Epic Youth Services’ financial records, including almost $80 million that was allocated to Epic’s learning fund, which is issued to parents to pay for supplies, instructional curriculum or supplemental activities.
Earlier this month, the state Board of Education voted unanimously to require Epic to repay $11.2 million in state aid within 60 days.
That figure includes $8.3 million in underreported administrative costs from the last six fiscal years, $2.6 million that should have been paid as a penalty in 2016 for exceeding Oklahoma’s limit on administrative costs and $203,000 that was transferred to Epic’s charter school in California.
In response, the governing boards for both Epic One-on-One and Epic Blended unanimously approved a resolution calling for several changes to the operating agreement between the two schools, including requiring more precise language being used to define how student learning fund payments and management fees are calculated. Among the practices the state auditor took issue with were the schools’ use of estimates in its financial reporting.
On Monday, state Rep. Sheila Dills (R-Tulsa) announced she would be filing bills during the upcoming legislative session aimed at addressing some of the potential oversight gaps highlighted in the audit.
“Part one of the state audit of Epic Charter Schools confirmed an alarming breakdown with the current system of public school oversight,” Dills said. “We must reorganize the system to ensure all schools are held accountable, not just virtual charter schools. Taxpayers deserve protection and efficient government, and it is imperative this never happens again in any school.”