State board orders Epic Charter Schools to repay $11M

BY KATHRYN MCNUTT
Oklahoma Watch
10/13/2020 12:30 PM
Main Cherokee Phoenix
A sign is seen outside of 50 Penn Place in Oklahoma City, where Epic Charter Schools leases 40,000 square feet for administrative use. Members of the State Board of Education voted unanimously in a special meeting on Oct. 12 to demand the refund of $11,235,919 to the state. WHITNEY BRYEN/OKLAHOMA WATCH
OKLAHOMA CITY – Epic Charter Schools must repay more than $11 million in state taxpayer money following a forensic audit released Oct. 1.

Members of the State Board of Education voted unanimously in a special meeting on Oct. 12 to demand the refund of more than $11.2 million to the state. Epic One-on-One and Epic Blended will have 60 days from receipt of the notice to repay the funds.

Epic could face additional fallout from the audit conducted by the Office of the State Auditor and Inspector, which pointed to inappropriate oversight, accounting and spending.

Attorney General Mike Hunter appointed a special counsel on Oct. 12 to work with the criminal investigations unit of his office to review the audit and its findings.

And the Statewide Virtual Charter School Board was expected to meet on Oct. 13 to discuss the audit and consider possible action on its contract with Community Strategies Inc., the governing board for Epic One-on-One and Epic Blended. That action could include termination of the contract, according to the meeting agenda.

Epic officials have denied wrongdoing and said the audit is an attack on school choice.

Gov. Kevin Stitt called for a forensic audit of Epic and its related entities in July 2019 after state and federal law enforcement agencies began investigating its financial dealings.

Brenda Holt, audit manager for the special investigative unit of the State Auditor and Inspector’s office, walked the Board of Education members through the findings Monday and answered their questions before they convened in closed session.

The monies to be recouped are:

· $8.9 million for failure to properly classify administrative payroll costs between 2015 and 2019 (minus $530,000 already paid);

· $2.6 million for exceeding the statutory administrative cost limit in 2016; and

· $203,000 for a transfer of state money from the Epic learning fund to Epic Charter School California.

“We have, as a state board, the duty to recoup those funds,” said Superintendent of Public Instruction Joy Hofmeister. 

The auditor’s report found oversight and accountability measures to be lacking on the part of the State Department of Education, which Hofmeister leads, the Epic board and Rose State College, one of Epic’s sponsors.

The attorney general appointed Melissa McLawhorn Houston to review the audit. He has recused himself and much of his office from further review of the audit because they are involved in investigations into Epic and ongoing litigation into Epic’s financial records. The office also serves as counsel to the Statewide Virtual Charter School Board.

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