The first part of a long-awaited report from Oklahoma State Auditor & Inspector Cindy Byrd on Epic Charter Schools was released Thursday. Byrd found a litany of problems in her investigation of the school that has faced legal scrutiny for years.
"I have seen a lot of fraud in my 23 years and this situation deeply concerns me," Byrd said at a Thursday press conference.
Byrd said the virtual charter behemoth owes Oklahoma taxpayers $8.9 million for a string of concerning actions in the 120-page investigative report.
Her report said Epic, the state’s largest virtual charter school, was given half a billion dollars over the last five years. And of that, at least $125 million has been siphoned through a learning fund that goes to families and a for-profit management company operated by Epic's founders Ben Harris and David Chaney.
Because there’s no oversight of that money, it appears that it didn’t go to actually educating kids, Byrd said. And that’s a big problem.
Those records remain tied up in litigation as Epic says they should remain private. But Byrd continues to fight for a full accounting of those dollars in court.
The audit report concludes that Oklahoma should consider that for-profit organizations running charter schools might not be a good idea.
Byrd referred to Thursday's report as part one of the investigative audit. It's unclear when part two will be released.
Byrd said she will be sharing her office's findings with the Attorney General's office, the Oklahoma State Bureau of Investigation and the Oklahoma Tax Commission, as well as the Office of Inspector General, the Internal Revenue Service and the Federal Bureau of Investigation.
In a statement on Twitter, Epic Charter Schools categorized Byrd's press conference as 'political theatrics' and called the audit a 'seeming endless fishing expedition.' The charter school said they would be providing a point-by-point response within 24 hours.
State officials quickly responded to the report.
Governor Kevin Stitt said his office is still reviewing the audit, but called the initial findings 'concerning.'
"Our state has recently invested in public education at the highest levels in our state’s history, and Oklahomans deserve accountability and transparency on how their hard-earned tax dollars are being spent," Stitt said in a statement.
State Superintendent of Public Instruction Joy Hofmeister called the findings 'deeply disturbing.'
"In an education environment where every dollar is being stretched to the limit, these findings are deeply disturbing," Hofmeister said in a statement. "It is one thing for a public school to utilize the services of a private vendor, which is common practice, but when that private vendor operates the school in question and can manipulate that structure to obfuscate or mislead, there is something systematically wrong. Oklahomans deserve better."
Sen. Ron Sharp (R-Shawnee), a former public school teacher, has been demanding additional accountability for the state funds granted to Epic through the school funding formula. Administrators of the school sued Sharp for defamation, but an Oklahoma County district judge ruled against them and levied a $500,000 fine against the school for filing the lawsuit.
"The Oklahoma families who have put their faith in this school system need reassurance that their children are getting a proper education and not just being used in an illegal scheme to make the owners rich," Sharp said in a statement.
Sharp lost a primary runoff in August said bringing Epic's issues to light has been a 'difficult road.'
"My reputation and legislative career have been destroyed by what has now become Oklahoma’s largest school district because I brought their fraudulent activities to light," Sharp said. "Their attempt to stop my inquiries and silence my criticism has not been successful."
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