Epic Charter Schools’ governing board has decided to offer up an eleventh-hour settlement to the Statewide Virtual Charter School Board in an effort to halt termination proceedings that call into question the future of one of Epic’s two schools.
In a 12:20 a.m. vote Wednesday, Epic board members gave unanimous approval to the terms of a “consent agreement,” which their attorney will deliver to the Statewide Virtual Charter School Board for consideration.
Only one week earlier, the attorney for Epic’s governing board stood before the Statewide Virtual Charter School Board trying to make a case for dismissing altogether the termination proceedings against Epic over its handling of public monies to date.
But the effort failed, and the board, which sponsors all six statewide online public schools, voted to move ahead and schedule a two-day trial for May 12-13.
Asked later on Wednesday whether it was too late for the consent agreement offered by Epic to be considered, the chairman of the Statewide Virtual Charter School Board said that remains to be seen.
“We are in the process of trying to get the document for our executive director and legal counsel to review,” said Robert Franklin. “We will see how close they get (in terms of concessions). That will dictate what our next steps will be.”
At issue is whether Epic has violated the terms of its sponsorship contract and should therefore lose the statewide board’s sponsorship for Epic One-on-One, Oklahoma’s largest online public school.
Epic also operates a second school model, called Epic Blended Learning Centers, which enroll the vast majority of Epic students in Tulsa and Oklahoma counties under the sponsorship of Rose State College.
Termination proceedings began in October, shortly after Oklahoma Assistant Attorney General Marie Schuble recommended the move based on the state’s newly released investigative audit findings that found Epic’s operators might have violated various state laws and their contract terms for fiscal management, as well as for “good cause.”
An Oct. 1 forensic audit report from the Oklahoma State Auditor and Inspector’s Office found chronically inaccurate cost accounting by Epic to state education officials. It also found that Oklahoma taxpayer dollars totaling $203,000 were “improperly transferred” from Epic’s student Learning Fund account over several years to help cover payroll shortages at Epic’s California charter school.
The audit report also included the finding that Epic had improperly comingled, or mixed, public dollars allocated for its two separate charter schools in Oklahoma, despite terms in both of its sponsorship contracts prohibiting the comingling of funds or requiring separate accounts.
Governing board members for Epic Charter Schools also voted at the same meeting this week to make a change that will end one of the school’s most controversial accounting practices, which has been used to shield from public scrutiny 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.
The state’s forensic audit 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 reportedly has 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 release of previous Learning Fund spending records to Oklahoma State Auditor and Inspector Cindy Byrd is still being fought by Epic attorneys in Oklahoma County District Court.
Featured video: Statewide board begins contract termination proceedings against Epic