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State education board calls special meeting on Epic Charter Schools audit

State education board calls special meeting on Epic Charter Schools audit

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Oklahoma State Board of Education April meeting

The Oklahoma State Board of Education holds a special meeting via videoconference using the Zoom platform on April 23. The board has called another special meeting for Monday to discuss the newly released findings of the state’s forensic audit of Epic Charter Schools.

A special meeting of the Oklahoma State Board of Education has been called to discuss the newly released findings of the state’s forensic audit of Epic Charter Schools.

The meeting is to be conducted virtually beginning at 11 a.m. Monday, according to the agenda posted Friday morning.

That agenda includes a presentation and discussion about the audit and a possible executive session with the board’s legal counsel “concerning a pending investigation, claim or action” concerning Epic.

In an interview with the Tulsa World last week, State Superintendent Joy Hofmeister vowed to take actions to “recoup” millions in taxpayer dollars from Epic identified by the office of State Auditor and Inspector Cindy Byrd.

Initial findings from the state’s investigative audit 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.

Byrd’s office found that Epic exceeded the state’s 5% state cap on administrative overhead costs intended to ensure public schools direct most resources on students “year after year.”

The state auditor’s report cites “questionable classification and reporting of administrative costs” between FY 2017 and FY 2019 totaling $16.6 million for Epic One-on-One, a statewide virtual charter school, and $6.7 million for Epic Blended Learning Centers, which offer students in Tulsa and Oklahoma counties a blend of at-home and classroom-based studies.

And a $530,000 penalty imposed by the state school board in February, while significant, represented a fraction of what the state auditor said she has documented proof that Epic actually owes for underreported administrative payroll costs the past six fiscal years: $8.9 million.

Byrd previously called the penalty “a slap on the wrist.”

Her report says had Epic Charter Schools been assessed full penalties by the state, Chaney and Harris’ company called Epic Youth Services would reportedly have collected at least $837,000 less in management fees.

The state audit team also found in 2016, Epic Charter Schools “inaccurately reclassified administrative costs,” thus avoiding a $2.6 million penalty for exceeding Oklahoma’s limit on administrative costs.

If that penalty had been assessed, it would have cut EYS’ management fees by $265,000.

Byrd’s report, which is believed to be Part I of a two-part report, as well as the auditor’s work papers are being turned over to law enforcement officials. And Byrd has vowed to continue to pursue public records for student learning spending at Epic in court, since EYS has blocked state auditors’ access.

In recent years, Hofmeister’s administration has led state board actions against the accreditation status of a handful of school districts in instances of extraordinary concerns.

These include downgrading the accreditation for Oologah-Talala Public Schools, where school leaders were also censured for “shocking disregard” for students amid a rash of teacher misconduct cases, to probation status earlier this year.

Other actions included the revocation of accreditation for Swink, a small rural district in southeastern Oklahoma, over a breakdown in local governance in July 2019, and in January 2019 over state compliance failures and student safety concerns at Langston Hughes Academy for Arts and Technology, a charter high school in north Tulsa.


Featured video

State Superintendent Joy Hofmeister talks with Tulsa World's Andrea Eger

Epic Charter Schools: A Tulsa World investigation

Andrea Eger

918-581-8470

andrea.eger@tulsaworld.com

Twitter: @AndreaEger

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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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