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 Monday to demand the refund of $11,235,919 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 Monday to work with the criminal investigations unit of his office to review the audit and its findings.
And the Statewide Virtual Charter School Board will meet at noon Tuesday 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).
* $2,657,207 for exceeding the statutory administrative cost limit in 2016.
* $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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The state Department of Education will withhold that amount from Epic Charter Schools’ state funding to cover misspending discovered in a 2020 audit.
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The state Department of Education is investigating “allegations of fraud, suppression of fraud, intimidation and harassment in the workplace” made against Epic Charter School’s board chairman by its former vice chair.
Kathren Stehno’s concerns include harassment and intimidation of female employees creating “an often-hostile work environment.”
Epic Charter Schools’ governing board has undergone a complete overhaul. The new chairman founded the state’s first rural charter school.
The lawsuit requests the release of Epic co-founder Ben Harris’ emails under the Oklahoma Open Records Act.