Community Strategies board members met Monday evening to discuss corrective actions surrounding the investigative audit of Epic Charter Schools One-on-One and Epic Blended, as well as issues of noncompliance found in the federal programs monitoring of Epic Blended.
Community Strategies is the governing board of both Epic Blended and Epic One-on-One. The meetings took place consecutively and lasted until nearly midnight.
New concerns regarding compliance by Epic Blended in federal programs, which serve low-income, homeless and special education students, were questioned during a State Board of Education meeting in November.
The federal programs compliance problems include, among other issues, discrepancies in reporting regarding low-income students, a lack of teacher knowledge of homeless requirements and identification procedures, under-identifying and providing inadequate services to English-learning students and failure to provide services to students in special education programs.
Every school district in Oklahoma goes through federal program monitoring by the State Department of Education on a three-year cycle.
Allison Brown, federal programs specialist for Epic, presented the deficiencies found during the monitoring of Blended at Monday evening’s meeting.
“This was brought up in the State Board meeting, but we received an email as a district on June 15 that everything we had submitted was acceptable,” Brown said. “There was never an indication that something was wrong until we received an email the day of the State Board meeting, when the State Board meeting was going on. I received an email at 11:21 a.m. that said there was a problem.”
Brown noted that it would have been nice to have collaboration between the Community Strategies board and the State Board of Education about the discrepancies found.
Board members voted to begin taking corrective actions presented by Brown in order to be in compliance with federal programs’ requirements, including:
- Retraining staff on homeless identification and services
- Creating more clear procedures to direct the utilization of funds for homeless students
- Outlining procedures for identifying English-learning students more thoroughly
- Revising procedures for Oklahoma Cost Accounting System reporting
Brown said corrective plans surrounding inconsistencies found in the reporting about low-income students by the State Department of Education are to be determined.
During the special meeting, board members also approved Kathren Stehno, an assistant professor at Southwestern Christian University, as a new board member and Dori Williams, a current Epic employee, as encumbrance clerk.
‘It’s not something that can be done overnight’
Community Strategies also discussed further corrective actions for both Blended and One-on-One to take regarding the investigative audit completed by the State Auditor & Inspector’s Office.
The noncompliance found through federal programs monitoring is an issue separate from the investigative audit.
Released on Oct. 1, the investigative audit released alleged that Epic owes Oklahoma $8.9 million after violating state law that limits the amount of money that can be spent on administrative costs with a 5 percent cap. The audit also showed Epic had used Oklahoma tax dollars to fund Epic Charter Schools California.
The State Board of Education unanimously approved a motion to demand Epic return $11.2 million to the Department of Education during an October meeting. The Statewide Virtual Charter School Board, Epic One-on-One’s charter authorizer, voted to begin contract termination proceedings.
In their own October meeting, Community Strategies voted to begin a series of corrective actions in response to the investigative audit, including amending the operating agreement with Epic Youth Services, Epic’s management company, to require board approval for how Learning Fund and management fees are calculated. They also voted to begin holding board meetings monthly rather than quarterly and requiring board approval for all financial transactions.
After a two-hour executive session during Monday’s meeting, the Community Strategies board moved to initiate further corrective actions for both Epic One-on-One and Blended, including:
- Ensuring that the funds portioned and dispersed to each of the charter schools are used for the instruction at each particular school
- Prohibiting the transfer, pledging or dedication of funds to schools or entities that manage schools outside of Oklahoma
- Ensuring that source documents for actions regarding school funds are made available to the State Department of Education in a timely manner, following OCAS reporting requirements
- Billing expenditure invoices for One-on-One and Blended separately
- Ensuring uniform reporting of actual costs and expenditures to the OSDE Office of School Personnel Records
- Supplying documentation to OSDE that Epic has an encumbrance clerk paid by Epic
- Ensuring no public school employee performs work for any private entity including, but not limited to, Epic Youth Services.
Epic’s attorney, Bill Hickman, said further actions could come in the future.
“There may be other changes forthcoming the board may want to consider based on any feedback we may receive from any of our sponsor agencies or the Department of Education,” Hickman said. “This is a living document, if you will, to the extent that there may be other changes that either management company wants to further discuss, or the board wants to further discuss, and that’s something we can further consider and consider to work on based on the feedback we receive as we move forward.”
The board also approved a measure that includes conflict of interest disclosures for board members. Hickman said that board members, Epic co-founders Ben Harris and David Chaney, superintendent Bart Banfield and Chief Financial Officer Josh Brock had signed the forms.
“It’s not required that a superintendent do that, it’s not required that Brock do that, but out of an abundance of caution and to be transparent, we have gone ahead and had these forms completed and included in the board packet,” Hickman said.
During the meeting, board member Betsy Brown said Epic is trying to make changes requested by the Department of Education and that they may need to make more.
“When being asked by different boards and agencies to make drastic changes, it’s not something that can be done overnight,” Brown said. “We’re all legitimately trying to do that without affecting the education that our kids are getting.”