One-two punches were delivered Monday and Tuesday to the seemingly charmed Epic Charter Schools and its founders David Chaney and Eric Harris.
Monday the Oklahoma State Board of Education voted to demand reimbursement of $11 million dollars after State Auditor and Inspector (SAI) Cindy Byrd delivered the audit report on the charter school and its associated entities.
Then, the Oklahoma State Virtual Charter School Board voted Tuesday to begin the termination process for their sponsorship contract with Community Strategies, Inc., the governing organization for Epic One-on-One charter schools.
Epic has 90 days to respond in a hearing where the State Virtual Charter School Board members will serve as the jury. There will be no immediate effect on the current day-to-day operations of Epic.
The vote came after Assistant State Attorney General Marie Schuble recommended termination of the board’s sponsorship contract with the Epic governing organization based on Byrd’s audit.
Oklahoma Education Association President Alicia Priest quickly issued a press statement after the decision.
“The State Auditor and the assistant attorney general have come to the same conclusion: that Epic violated their charter contract, the law, and the Oklahoma Constitution. Students deserve leaders who act legally and ethically.”
Point by point
Schuble laid out her reasoning in over 40 points of an Intent to Terminate showing what she believes to be Epic’s violations of state school law governing the administation of schools.
Point by point Schuble compared what every other public school funded with taxpayer dollars has to do by law to insure transparency and care with taxpayer dollars and showed how Epic’s entities had violated those state laws.
Key elements of Schuble’s reasoning were centered around the ways in which money – all from state taxpayers – was handled between the different Epic entities.
The auditor’s report found that one person, Josh Brock, was the chief financial officer for Epic One-on-One and for the for-profit Epic Youth Services.
She pointed out that in some cases the SAI had discovered where Brock had written an invoice as the CFO of one organization and paid that invoice as the CFO of the other.
She also pointed out several practices where Epic refused to allow state inspectors access to the school’s finances even though it was a public school using taxpayer dollars.
The 42 points Schuble delivered had finances as the red thread that ran through many of them.
Such practices are rare in traditional public school districts across Oklahoma and when they do, they represent an individual employee’s misdeeds, not the design of the district.
Schuble did point out that negotiations between the state and Epic are allowed before the hearing. That leaves open the possibility of a negotiated agreement with Epic before the hearing.
The following is the Intent to Terminate presented by Schuble.10.13.20-Notice-of-Intent-to-Terminate-Charter-Contract
In the course of a little over five years Epic has grown to be the largest public school in Oklahoma.
And, in a state where public school superintendents are often sharply criticized if they make anywhere around $100,000, David Chaney and Ben Harris have become millionaires profiting solely from state taxpayer funds under the guise of Epic Youth Services, their private management company paid to manage Epic.
Almost $46 million in management fees went to the private company between 2015 and 2020 even though it had no employees until October 2018.
Repayment demanded Monday
Monday, the Oklahoma State Department of Education took dramatic action against Epic Charter Schools demanding that they repay $11 million in state taxpayer money within 60 days of their receipt of notice.
The decisive action came on the heals of the Oklahoma State Auditor and Inspector released a report that showed significant problems with Epic’s oversight, accounting, and spending.
Since that report was released, Oklahoma State Attorney General Mike Hunter has appointed Melissa McLawhorn Houston as special counsel in charge of reviewing the audit’s findings. She will work with the AG’s criminal investigations unit to look more deeply into the legal implications of the audit.
After state and federal investigations began earlier in the year, Governor Kevin Stitt called for the SAI to conduct a forensic audit of Epic and its associated entities.