After more than three and a half hours of special board meetings conducted by teleconference that included a 90-minute executive session, the governing body of Epic Charter Schools voted late Monday night to approve “a contract compliance audit” of its controversial “Learning Fund.”
During the subsequent public comment period of the telephone meeting, board members declined to answer questions about what “a contract compliance audit” entails or whether they will be complying with Oklahoma State Auditor and Inspector Cindy Byrd’s request for financial documentation related to Epic’s contract with a private, for-profit management firm called Epic Youth Services, LLC.
Monday night’s pair of meetings — for Epic One-on-One and Epic Blended schools — began at 6:30 p.m. and ended around 10:15 p.m. The meetings were conducted by teleconference as allowed by SB 661, a measure passed last week by the Oklahoma Legislature to expand public bodies’ digital meeting options in the wake of COVID-19 concerns.
During the public comment period of the teleconference meeting, Epic attorney Bill Hickman said the organization would consider responding to NonDoc’s questions after Monday’s meetings concluded, but no information was provided before midnight. The board’s 10:07 p.m. vote directed Hickman and Epic’s internal auditor, Linda Ladd, to conduct the “contract compliance audit.”
Epic’s two online-centric charter schools will receive more than $110 million for the current academic year. Superintendent Bart Banfield said Monday that combined enrollment between the two schools is 30,356. The schools’ enrollment has skyrocketed statewide as more families have sought non-traditional education environments for their children and a multi-million-dollar advertising campaign has marketed Epic’s flexibility.
Epic’s enrollment gains have vexed some traditional public school leaders, education establishment representatives and lawmakers. In April, school districts across the state are expected to conclude the remainder of the spring semester through “distance learning” owing to the COVID-19 pandemic. Banfield said Epic’s schools would resume online instruction April 6.
State auditor: ‘We have a responsibility’
Elected in 2018, Byrd runs the Oklahoma State Auditor and Inspector’s Office and was tasked with auditing Epic by a July 2019 order from Gov. Kevin Stitt and Superintendent of Public Instruction Joy Hofmeister. Epic has been under criminal investigation for several years owing to allegations of embezzlement and racketeering against the virtual charter schools’ co-founders, Ben Harris and David Chaney. Harris participated in Monday night’s board meetings, but Chaney did not comment during the teleconferences.
In February, Byrd issued a series of subpoenas to Epic Youth Services, and on March 5, she filed a motion in Oklahoma County District Court seeking an order compelling compliance with the administrative subpoenas (embedded below). Epic Youth Services originally faced a March 25 deadline for response to the lawsuit, though the Oklahoma Supreme Court has extended all court deadlines 30 days owing to COVID-19 concerns.
Epic’s two charter schools are both governed by the same five-member board. Two members — Betsy Brown and Liberty Mitchell — were absent during Monday night’s special board meetings. The board contracts with Epic Youth Services, LLC, a private company registered in 2005 to Todd Wedel, a certified public accountant in Oklahoma City.
“Epic Youth Services, LLC (…) refused to comply with an administrative investigative subpoena lawfully issued by the State Auditor,” Byrd’s filing stated. “Specifically, EYS has custody and control of records associated with the Learning Fund (…) The Learning Fund consists of individual student accounts funded by state dollars paid to the schools, who then transfers those public funds to EYS. Parents may submit requests for expenditures from the student’s Learning Fund account to pay for the student’s various educational and extracurricular activities. EYS received approximately $42 million in state funds for the Learning Fund accounts from 2011-2019.”
Byrd wrote March 5 that her office “conferred” with Epic Youth Services for almost five months before filing its request in district court.
“EYS maintains that it is a private entity, and as such, adamantly denies that any records in its custody or control are subject to disclosure. The State Auditor disagrees with EYS’ conclusion,” Byrd wrote. “EYS was unwilling to disclose the records in a manner necessary for the State Auditor to accurately reconcile the revenue and expenditures associated with the Learning Fund accounts.”
Byrd spoke to the Tulsa World after filing her motion in court.
“We have a responsibility to fully investigate the expenditure of public funds by a public entity,” she said. “On the advice of our legal counsel, the Attorney General’s Office, we believe filing in district court to produce public records was necessary to obtain the documentation and information identified in our subpoena. The subpoena was only issued after the virtual charter school did not voluntarily provide the records we requested in accordance with the Open Records Act.”
Board member: Criticism of Epic ‘pisses me off’
While Epic’s board members and attorney declined to discuss their actions Monday night, board member Mike Cantrell praised the charter schools, his fellow board members and the school’s founders earlier in the evening.
“I totally appreciate the Epic experience, and I’m glad to be a part of this. I’m honored to serve with you all in doing something cutting edge that is a benefit to students and families all across our state that are committed and doing it better and offering a better education for all of our children,” said Cantrell, a longtime oil and gas professional. “I appreciate you sticking with this through all the problems we’ve encountered from people who just don’t want to see something new succeed.”
Cantrell lauded Epic’s use of technology for digital interactions between students and teachers at the two charter schools. He asked questions to confirm that the board’s financial audits — presented Monday night by a representative of CBEW Professional Group — were “clean,” and he ultimately panned the investigations into Epic Youth Services.
“I have been a little miffed about what we’ve been going through this last year. I know of two no greater innovators in business that I’ve ever worked with than Ben and David. And for them to have to put up with what they’ve had to put up with just frankly pisses me off, to tell you the truth,” Cantrell said. “I’m sure proud of you guys and the whole Epic family, and I think we are doing something really good here, and we just need to stay the course.”
Reached directly after Monday’s teleconference meeting, Cantrell initially declined to comment but ultimately provided a statement.
“I think everyone is conscious of the State Auditor’s suit and feels like it’s not appropriate to comment on any aspect of that,” Cantrell said. “Believe it or not, the long executive session had little to do with the motion filed. We have conducted numerous audits over the years and have total confidence in our management group. It’s just a simple decision by a nonprofit board to audit a part of the program.”
(Update: This story was updated to include additional comment from Cantrell at 12:55 a.m. Tuesday, March 24.)