Oklahoma State Board of Education members unanimously voted Thursday to withhold $9.1 million that was slated to be paid to Epic Charter Schools in the upcoming year.
The state says the virtual charter giant owes the money because it misrepresented administrative employees as teachers during fiscal year 2019 and received too much money from the state in that period.
State schools superintendent and Democratic candidate for governor Joy Hofmeister said the money will now go to other Oklahoma public schools via the state’s funding formula.
"These were funds that belonged to other districts, so that’s what will happen with those funds and other districts will experience that through the funding formula," said Hofmeister.
Oklahoma’s State Auditor says that means Epic has been penalized a total of $20 million in the wake of its 2020 investigative audit report. That audit found that Epic Youth Services, the school's management company, had misused millions in state funds and made the founders rich despite school employees funded by state taxpayers fulfilling many of the company’s duties.
"Epic Charter Schools is a public school district, funded 100% by taxpayers, and my office has a duty to make sure they are spending the money properly," State Auditor & Inspector Cindy Byrd said in a statement. "Today’s agreement confirms that Epic’s EMO abused millions of taxpayer dollars by hiding its excessive administrative costs."
In a meeting Friday morning, Epic's Board says it will accept the penalty. Board chairman Paul Campbell says Epic will take its penalty in stride.
"We can’t fight this. We owe this. The school did this," said Campbell.
It’s a far different tone than Epic took during its previous administration. Epic officials and its founders’ for profit-management company — many of whom, including founders Ben Harris and David Chaney, were recently removed from the school — had called the audit a fraud and were unwilling to accept fines from the state.
Last week, the management company filed a lawsuit against the school. Epic Youth Services claims they provided nearly $7 million in IT support to finalize their separation. They say they filed invoices worth millions of dollars over a three-month period, but the school never responded.
In the year following Byrd's 2020 audit, Epic has experienced a massive drop in enrollment and laid off some employees.
In even more Epic news, the vice chair of its governing board suddenly resigned last week, calling for authorities to investigate the school for a number of issues. In a three-page letter, Kathren Stehno detailed "an often-hostile work environment," cited data about students being withdrawn for truancy and reported violations of the state’s Open Meetings Act.
