The Oklahoma State Board of Education chose to put off the advice of its attorney to take punitive action against the state accreditation of Epic Charter Schools.
General Counsel Brad Clark on Thursday presented to the board records he said showed a years-long history of Epic’s “nonresponsiveness and noncompliance” with state Department of Education requests for information about its use of taxpayer dollars — and new deficiencies discovered in reviews of Epic’s federally funded programs for special education and homeless students and English learners.
Clark recommended that the board lower the accreditation status of Epic’s two public schools — Epic One-on-One and Epic Blended Learning Centers — to probation status. That is the final straw before a district could lose state accreditation and be forced to close.
But State Superintendent Joy Hofmeister said such a serious action would be intended as a wake-up call for Epic and its governing board.
“We’re talking about the kinds of services that are required in federal law that are required to be provided for all students who qualify. The services that are required for children is what hangs in the balance right now,” Hofmeister said. “They have not been able to provide the kinds of oversight we would expect of any school board. When a school district is growing so rapidly, we have an extra duty, an extra requirement to be extra swift to say ‘you are on probation. You have to provide documents.’”
At the conclusion of a 10-hour meeting, the state board tabled the matter.
Member Estela Hernandez of Oklahoma City was adamant that the board would not be following its own precedent of communicating compliance problems to a school and then giving local administrators and board members time to respond, and member Bill Flanagan of Claremore said he agreed.
Member Jennifer Monies pointed out that it had been only a month since the board voted to demand back from Epic $11.2 million in taxpayer funding for chronically excessive administrative overhead costs and inaccurate cost accounting.
The Oklahoma State Department of Education is under increasing pressure to answer to State Auditor and Inspector Cindy Byrd’s recent findings, which questioned the oversight of Epic’s use of taxpayer dollars by the state agency run by Hofmeister, a statewide elected official.
On Wednesday, 22 GOP lawmakers called on Gov. Kevin Stitt to request an investigative audit into the state Education Department, and Stitt told the Tulsa World he would work with those lawmakers on such a request.
The state Board has given Epic a deadline for repayment of 60 days after it receives the state auditor’s “work papers,” which school representatives said Thursday they are still awaiting.
Doug Scott, president of Epic’s governing board, said it had already voted to adopt a series of corrective actions based on issues raised by the state auditor and inspector and would be meeting again on Nov. 18, when he said additional measures could be considered.
“We intend on taking action regardless of what you do here tonight,” he said. “Going straight to probation, in my opinion, might be inappropriate.”
Board members asked Clark to send to Scott a detailed list of every known deficiency.
Some of the examples Clark offered included documents that Epic One-on-One, a virtual school in which students learn from home, had paid for child food service when it has no school meal program.
He said state education officials had found that Epic was not creating individualized education programs for special-needs students as required by federal law and many irregularities in Epic’s claims about economically disadvantaged students, for which it receives federal funding.
In a review of 200 student forms, 71 were found to have household income reported at exactly $22,311. And one student was reported as economically disadvantaged despite reportedly living in a household of three with income of $161,000.
He also raised the question of whether Epic was violating federal law that prohibits recipients of federal dollars from replacing state funds with federal funds.
“If federal funds are being used to pay for things that state dollars are allocated for, that is supplanting, and there are penalties associated with it,” Clark said.
Hofmeister repeatedly referred to a recent incident that she said was illustrative of Epic school operators’ attitude toward complying with the accounting requirements with which all public schools must comply.
She called on Katherine Black, executive director of financial accounting at the state Department of Education, to detail her experience during an on-site review, which must be conducted every three years at all public schools receiving federal funds.
Black said she asked to review some purchase orders, which is a standard review practice, and found that one purchase order from Epic Youth Services, the for-profit management company that Epic’s governing boards have contracted with to operate both Epic schools, listed “certified salaries” on it.
Clark said the school — not the for-profit management company — pays all certified school personnel.
She inquired what certified school personnel’s salaries were being paid, but the school workers said they didn’t know and that she would have to ask the for-profit management company and called on one person to come speak to her.
“The person was mad the moment he walked through the door,” Black told the state board, without naming the individual. “He sat down, and I asked the question again. He said it was none of my business. … It is my business when (state accounting) coding is assigned to items on the invoice. He was very upset that I was even inquiring. It was very volatile. The meeting just kind of went downhill from there.”
Black said her office never received any follow-up communication about the inquiry, but board member Kurt Bollenbach of Kingfisher asked that Scott make it his personal business to follow up on that question, as well.
“When you have a pattern of `it’s none of your business’ to the regulatory agency when they go on site, then it is our business,” Hofmeister said. “It is indicative of state Department of Education employees following up for documentation for how funds were spent and being pushed aside and not having direct answers to questions that should be answered — and that other districts would be able to answer.”
VIDEO: State auditor releases Epic school investigation
Epic Charter Schools: A Tulsa World investigation