Update: About 12:20 a.m. Wednesday, Epic's governing board returned after a three-hour executive session and voted unanimously to approve a consent agreement offer to settle the Statewide Virtual Charter School Board's termination proceedings. The agreement, which was not available immediately after the meeting, is to be delivered by Epic's attorneys to the statewide virtual board, whose termination proceedings threaten to shutter the Epic One-on-One school over concerns about its handling of public monies.
Coverage of the Epic board meeting as it appears in Wednesday's paper appears below:
Governing board members for Epic Charter Schools just voted to make a change that will end one of the school’s most controversial accounting practices used to shield the use of tens of millions of taxpayer dollars over the last decade.
Epic’s Learning Fund dollars for student needs will be placed in new bank accounts solely under school personnel control beginning July 1.
“This change has been discussed with the charter management organization Epic Youth Services and is presented tonight on behalf of the district and the CMO, with understanding and agreement from both entities,” said Jeanise Wynn, assistant superintendent of finance at Epic.
“This will also require that all revenue and expenditure records for the public bank account be maintained by the District according to the rules and regulations for public school district funds.”
The release of previous Learning Fund spending records is still being fought by Epic attorneys in Oklahoma County District Court.
An investigative audit report from Oklahoma’s state auditor and inspector last fall revealed that $79.3 million in Epic Charter Schools’ spending on student learning for fiscal years 2015-20 was unaccounted for after being shifted to the bank accounts of Epic Youth Services, a private school management company that has reportedly made millionaires of Epic co-founders Ben Harris and David Chaney.
This is separate from the $45.9 million in fees — a 10% cut of every dollar of revenue received — the company was paid for its management contracts for Epic’s two charter schools during that same time period.
The practice continues to this day, and the Oklahoma attorney general’s legal pursuit of those spending records on behalf of State Auditor Cindy Byrd is still being opposed by attorneys for Epic Youth Services in Oklahoma County District Court.
In a February 2020 report, the Tulsa World was first to publicly document how Epic was shifting tens of millions of public school dollars in lump sum payments to Epic Youth Services for school expenditures that are never audited and which Epic claims are shielded from the Oklahoma Open Records Act.
The unique appeal of setting aside $1,000 in state funding per student has been one of the controversial online school’s chief student recruiting tools.
State law enforcement investigators have been probing allegations of embezzlement, racketeering and forgery by top executives at Epic and willful neglect by its independent governing board.
Several Epic board members have since left and been replaced. And in January, the Epic board approved the hiring of Wynn, who had been the business manager at Edmond Public Schools, to report directly to the board.
With Tuesday’s vote, Wynn was given the go-ahead to open the new bank accounts for Epic’s Learning Fund dollars.
“I think this is definitely a move we need to make,” said new board member Kathren Stehno.
Longtime board Chair Doug Scott said he agreed ahead of a unanimous 5-0 board vote.
Longtime Epic Chief Financial Officer Josh Brock now serves only the for-profit school management company, Epic Youth Services.
Epic’s longtime, previous arrangement of Brock serving as chief financial officer for both the school and Epic Youth Services was branded an “inherent conflict of interest” by the state auditor because having Brock write checks for Epic’s charter schools and then endorsing and depositing them into the for-profit company’s bank account “violates the most basic accounting principles.”
The same governing board members oversee Epic One-on-One, a virtual school in which students learn from home, and Epic Blended Learning Centers, a separate school model that offers students in Tulsa and Oklahoma counties a blend of at-home and in-classroom studies.
Two lawmakers who have authored virtual charter school policy in Oklahoma previously told the Tulsa World they question the shielding of Learning Fund expenditures from public scrutiny.
Rep. Sheila Dills, R-Tulsa, has been the architect of two previously enacted pieces of legislation to try to crack down on administrative cost reporting and spending transparency at virtual charter schools.
A bill she introduced this year to ensure full spending transparency for schools that contract with outside educational management organizations didn’t receive a hearing on the Education Appropriations Subcommittee.
“There was never, ever the intention of allowing these private, for-profit companies to take public money into private accounts and hide it,” Dills said last month.
And now former State Sen. Gary Stanislawski, also a Tulsa Republican, said in March 2020 that he had no idea Epic was sending Learning Fund dollars to its private management company.
“I never considered it, never crossed my mind. I had no idea,” Stanislawski said. “Do I think there should be transparency on the Learning Fund? The answer to that is yes, I do — because it’s direct expenditure for the benefit of a child. The public should be able to see of that $1,000 (per student), how much was spent and where did it go?”
Epic Charter Schools: A Tulsa World investigation