(Editor’s note: This story was authored by Jennifer Palmer of Oklahoma Watch and appears here in accordance with the non-profit journalism organization’s republishing terms.)
In his request for a search warrant, a law enforcement agent described Epic Charter Schools as being set up a decade ago as a profit-generating “scheme.”
And he described the school’s co-founders as deeply involved in alleged embezzlement of state funds and obtaining money under false pretenses – such as personally recruiting “ghost students” to boost the school’s funding and allowing students who completed no work or moved out of state on the school’s rolls.
All of which begs the question: Who is responsible for oversight of Epic? And have they done enough to be a check on the state’s largest virtual school?
Co-founders David Chaney and Ben Harris, in a joint statement, say the allegations are false.
“We will continue to cooperate with investigators, as we have throughout the history of our school. We are confident the facts will once again vindicate our team,” their joint statement reads.
The allegations outlined in the Oklahoma State Bureau of Investigation’s search warrant have drawn the attention of the highest-ranking state officials. Gov. Kevin Stitt has asked to be briefed on the investigation, and Superintendent of Public Instruction Joy Hofmeister called the allegations “extremely serious, disturbing.” On Friday afternoon, Stitt and Hofmeister announced they have requested an investigative audit on Epic and its related companies by the state Auditor & Inspector, looking at the past three years.
What will ultimately result from the audit and OSBI investigation is unclear. The accounts of alleged wrongdoing in the affidavit and the intense news coverage have put pressure on public officials to do something. Yet as a charter school, Epic is more loosely regulated than traditional district schools and is an icon of school choice to supporters. So increased efforts to curb its practices could meet resistance.
Epic, the brand name for Community Strategies Inc., is a nonprofit 501(c)(3) organization and has a board of directors, which is the first line of accountability. They serve as both a nonprofit board and the school’s board.
Above that, there’s the Statewide Virtual Charter School Board, which is a small state agency with a governor-appointed board charged with overseeing and authorizing each statewide virtual school.
Then there’s the state Department of Education, which accredits Epic as a charter school, and Rose State College, which sponsors Epic’s separate charter school composed of blended learning centers in Oklahoma City and Tulsa. The school is audited by an independent auditor each year, and until last Friday, an investigative audit had never been sought from the State Auditor.
As a nonprofit, Epic is also subject to IRS rules for tax-exempt charities requiring transparency and banning campaign activities and profits for shareholders.
Charter school authorizers – in Epic’s case, the Statewide Virtual Charter School Board – have two main responsibilities, said Greg Richmond, chief executive officer of the National Association of Charter School Authorizers. Those are making sure taxpayers are getting what they paid for and children are getting a good education.
Richmond said part of the problem with virtual school accountability is most school laws were not written with virtual schools in mind.
“That creates uncertainty around how things are supposed to be administered and creates openings which a disingenuous person can take advantage of,” he said.
Several states have uncovered fraud at virtual schools at taxpayers’ expense. A large virtual charter in Ohio closed abruptly last year and the state ordered it to repay $80 million. In Indiana, state investigators say two virtual charter schools received public funding based on inflated enrollments and have ordered the school to return $40 million.