Members of the Oklahoma House of Representatives are dusting off legislation that lay dormant and considering other new recommendations because of last week’s call to action by the state’s multicounty grand jury, which has been investigating Epic Charter Schools.
Asked if anything would be done by the Legislature during the session that ends May 28, House Speaker Charles McCall, R-Atoka told the Tulsa World: “In light of the grand jury recommendations, the House will explore options to advance pending legislation filed earlier this session pertaining to those recommendations if possible within the three weeks remaining in the constitutional session. Additional recommendations that may come upon the conclusion of the many ongoing inquiries into Epic will be reviewed in the legislative interim for future consideration.”
Oklahoma’s multicounty grand jury became involved in October in investigating Epic Charter Schools after the state auditor and inspector issued a scathing report about the accounting practices of the operators of the state’s largest school system and lack of oversight by their hand-picked governing board members.
In a rare, inside look at an ongoing criminal inquiry, the multicounty grand jury filed in Oklahoma County District Court late last week an interim report outlining an urgent need for new safeguards and greater transparency requirements before even more taxpayer dollars are allocated to Epic.
No indictments were handed down in Thursday’s multicounty grand jury report.
“The investigation by the Multicounty Grand Jury continues,” the report states. “We regret that our investigation has not been able to be completed at this time. But the intentional diversion of public funds, obfuscation of public employees, and lack of cooperation with oversight entities has made the investigation difficult to be completed in a timely manner.”
Leaders in the Oklahoma Senate and House of Representatives have not heard any legislation related to the forensic audit findings, which one Tulsa lawmaker previously called disappointing and frustrating.
Rep. Sheila Dills, R-Tulsa, has been the architect of two previously enacted pieces of legislation to try to crack down on administrative cost reporting and spending transparency at virtual charter schools.
But this year, Dills found herself suddenly off the House education committee and a bill she introduced to ensure full spending transparency for schools that contract with outside educational management organizations, such as Epic, didn’t even receive a hearing on the education appropriations subcommittee.
On Monday, Dills said that dormant bill, House Bill 1735, and other recommendations just issued by the multicounty grand jury will form the basis of a House leadership bill she expects to be ready by next week.
“I was really happy to see many of the recommendations I had included in my bill in the grand jury’s report,” Dills said. “I think the multicounty grand jury legitimized my legislative proposals and probably made people feel more comfortable about it.”
Components of her bill would require comparative bids for outside school management companies, requirements for robust conflict of interest policies, disclosing vendors and a host of specific oversight duties for charter school sponsors.
“We also need to not only allow for clawback (of misspent funds) by the state Department of Education, but also have the ability to claw back money from sponsors with schools found to have problems,” Dills said. “And we’ve got to make sure there is no more comingling of funds as was found between One-on-One and Blended.”
The audit report found Epic had improperly comingled, or mixed, public dollars allocated for its two separate charter schools despite terms in both of its sponsorship contracts prohibiting the comingling of funds or requiring separate accounts.
Epic One-on-One is a public online school sponsored by the Statewide Virtual Charter School Board, while Epic Blended Learning Centers serve the vast majority of Epic’s students in Tulsa and Oklahoma counties and is sponsored by Rose State College. Each of those sponsors receives a cut of Epic’s state revenue.
The Oklahoma State Bureau of Investigation has been engaged most recently since early 2019 in an inquiry into allegations of embezzlement, obtaining money by false pretenses and racketeering at Epic.
The grand jury report blasted Epic’s own governing board for “failure in fiduciary duty” to its students and in accounting to the state of Oklahoma for many years before the state’s forensic audit exposed the issues.
It detailed the shifting of tens of millions of taxpayer dollars for school expenses into the private accounts of Epic Youth Services, the for-profit school management company that has reportedly made millionaires of Epic co-founders David Chaney and Ben Harris, who themselves hand-picked school governing board members.
“As designed this system is ripe for fraud,” the report states.
The state’s investigative audit revealed $79.3 million in Epic Charter Schools’ spending on student learning for fiscal years 2015-2020 were unaccounted for after being shifted over to the bank accounts of a private school management company. This is separate from the $45.9 million in fees the company was paid for its management contracts with the governing boards for Epic’s two charter schools.
Senate President Pro Tem Greg Treat declined to comment for this story.