OKLAHOMA CITY — An Epic Charter Schools’ governing board member called the findings of a state investigative audit and the resulting actions by two separate state education boards “politically motivated.”
The same governing board members serve both Epic One-on-One and Epic Blended Learning Centers, Epic’s two separate schools with different models and separate charter school sponsors.
At a Wednesday evening meeting, attorneys for Epic reviewed their point-by-point response document rebutting most of the forensic audit findings State Auditor and Inspector Cindy Byrd released on Oct. 1.
“I’ve sat here for 10 years, and I’ve never heard of anything like this. And now all of a sudden this — and that doesn’t quite measure up to me,” said board member Mike Cantrell.
“For the very groups that have already audited us over the years and have approved our budgets and approved what we’ve done around this table and for them to pile on without giving us due process is just wrong.
“I hope we can all kind of work together to come to a resolution of things. None of us like this hanging over our head, but it sure seems politically motivated to me.”
The board unanimously approved a resolution that requires a host of “corrective actions” by Epic Charter Schools and its for-profit management company.
These include amendments to the formal agreements between Epic’s two separate schools, which share payroll and other costs, and between Epic and Epic Youth Services to “more specifically” define how student learning fund dollars and management fees are calculated and paid to EYS.
Last week, the Oklahoma State Board of Education demanded $11.2 million back from Epic Charter Schools, and the Statewide Virtual Charter School Board, which sponsors Epic One-on-One, entered into termination proceedings against Epic based on the state audit findings.
Cantrell said the penalty assessed by the state Board of Education amounted to “one state agency backing up another state agency, covering their ass,” referring to the State Auditor’s Office.
“This is a pile-on job,” Cantrell said. “We never heard anything like this from the state Department (of Education) before.”
Epic’s board did heed one bit of criticism from the auditor’s report and approved a new meeting schedule for 2021 with monthly meeting dates, rather than quarterly ones, which has been the board’s practice to date.
The state audit found oversight to be lacking on the part of Epic’s “handpicked” governing board members, selected by school co-founders David Chaney and Ben Harris, “whose for-profit school management company contract and performance should be overseen by an independent board,” the audit report states.
In all, $125.2 million of the $458 million allocated to Epic for educating students the past six years was found to have ended up in the coffers of Epic Youth Services, Chaney and Harris’ charter school management company, which reportedly has made them millionaires.
But auditors found no evidence that the board regularly reviews Epic Youth Services’ performance, and financial transactions are approved after the fact with no invoices, bank statements or purchase orders provided for board review.
The board’s resolution also directed Epic’s internal auditor to ensure timely payment of school invoices, in response to the state auditor’s discovery of hundreds of thousands of unpaid invoices.
And Epic’s governing board members called for their approval to be a requirement for any future fund transfers of various Epic school funds and for monthly treasurer’s reports and school encumbrance registers.
“Any errors that arise are immediately reported to the board at the following board meeting,” said Board Chairman Doug Scott.
Epic Charter Schools was directed to hire an encumbrance clerk and to have Superintendent Bart Banfield of the board chairman to sign all contracts on behalf of the school.
A Nov. 18 special meeting was scheduled where Board Member Betsy Brown said further corrective actions may be addressed.