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Epic fallout: Tulsa lawmaker vows systemic overhaul in state school district finances oversight

Epic fallout: Tulsa lawmaker vows systemic overhaul in state school district finances oversight

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A Tulsa lawmaker announced Monday that she is working on legislation that could significantly alter Oklahoma’s system for overseeing public school finances to “protect taxpayers.”

Rep. Sheila Dills, a Tulsa Republican, said the State Auditor and Inspector’s Office’s forensic audit of Epic Charter Schools revealed systemic failings in accountability for the use of public funds.

Combined with so much upheaval caused by the COVID-19 pandemic, Dills thinks now is the time to address long-standing problems.

“Part one of the state audit of EPIC Charter Schools confirmed an alarming breakdown with the current system of public school oversight,” Dills said in a written statement released statewide.

“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.”

In an interview with the Tulsa World, Dills said it’s too early in the process of drafting legislation to provide many details.

“This is just in the beginning stages. But there is a lot of cleanup — in laws, agency rules, human oversight — that needs to happen. When you look at it from a systemic point of view, it can’t be a Band-Aid fix. You’ve really got to go in and address the structure,” said Dills.

In mid-October, 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.

Initial findings include chronically inaccurate cost accounting by Epic to state education officials that reportedly allowed school co-founders Ben Harris and David Chaney to boost their personal earnings by nearly $2 million through their for-profit charter school management company.

Forensic auditors for the state said Epic schools’ operators “blurred lines” between running schools and making money and have established a complex web of entities lacking internal controls or outside checks and balances on their use of taxpayer dollars.

The report also raises questions that are now up to the Oklahoma attorney general to respond to about the legality of transferring hundreds of thousands of Oklahoma tax dollars to Epic’s California charter school, commingling of funds for Epic’s two separate Oklahoma schools and chronic misreporting of administrative costs.

But the state audit also points a finger at Hofmeister’s state Education Department, finding “ample oversight, but limited accountability,” even when red flags were raised.

State Auditor and Inspector Cindy Byrd found within the Education Department an accounting system preoccupied with school district compliance — with little to no verification of the information the districts report or accountability for falsehoods or other failings.

“Everything is on the table,” Dills said about the systemic changes she intends to propose.

So who will be at that table?

“I will be working with my colleagues, my constituents,” she said. “I would like for the (state) House and Senate and executive branch to give input. I’m eager to hear what they have to say.”

Video: Statewide board begins contract termination proceedings against Epic

Statewide board begins contract termination proceedings against Epic Charter Schools.

Epic Charter Schools: A Tulsa World investigation


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Staff Writer

I'm a projects reporter, examining key education topics and other local issues. Since joining the Tulsa World in 1999, I have been a three-time winner of Oklahoma’s top award for investigative reporting by an individual. Phone: 918-581-8470

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