In meetings Tuesday that lasted until after midnight, the governing board of Epic Blended and Epic One-on-One charter schools, Community Strategies, approved a motion that will move the school’s controversial learning fund from private account management to public bank accounts.
The board also approved items after a nearly four-hour executive session, including a settlement proposal regarding contract termination proceedings with the Statewide Virtual Charter School Board.
Epic’s learning fund reimburses the families of Epic Blended and Epic One-on-One students for up to $1,000 of educational curriculum or extra-curricular purchases and is currently administered by the for-profit management company Epic Youth Services, which is owned by Epic co-founder Ben Harris and David Chaney.
Epic’s assistant superintendent of finance, Jeanise Wynn, presented the proposed changes, which would, effective July 1, place all funds allocated to the learning fund in bank accounts owned by Community Strategies doing business as either Epic Blended Learning Charter or Epic One-on-One Charter School, respectively.
“This will also require that all revenue and expenditure records for the public bank account be maintained by the district according to the rules and regulations for public school district funds as stated by the Oklahoma State Department of Education, this governing board and our [Epic Blended] authorizer Rose State College,” Wynn said during the meeting. “As a district or public school account, only authorized school district personnel and/or board members will have access to the funds in this account.”
The board’s chairman, Doug Scott, and board member Kathren Stehno expressed approval of the changes during the meeting.
“I think this is definitely a move we need to make,” Stehno said.
In July 2019, Gov. Kevin Stitt requested that the State Auditor & Inspector’s Office complete an investigative audit of Epic and all related entities. The audit claims that Epic owes the state $8.9 million and that Epic Youth Services has received $79.3 million in state money for the student learning fund and $45.9 million in management fees between FY 2015 and FY 2020. State investigators have concerns over how Epic Youth Services manages state-allocated funds, and alleges abuse and fraud have been made.
State Auditor & Inspector Cindy Byrd had issued subpoenas to Epic Youth Services for records. However, Epic Youth Services had claimed that ,as a private company, their financial records should not be publicly audited.
On March 5, 2020, Byrd filed a motion in Oklahoma County District Court seeking an order compelling compliance with the administrative subpoenas.
The issue was slated for a hearing in district court in December, but it was stricken from the docket as both parties continued to explore a protective order issue. According to court documents, both parties met for a status update March 1.
The State Auditor & Inspector’s Office most recently filed a motion to settle journal entry on March 31.
Consent agreement proposed by Epic board
After Tuesday’s lengthy executive session during the Epic One-on-One meeting, the board approved resolution 2021-01 as well as a proposed consent agreement, drafted by Epic attorney Bill Hickman, to be considered by the Statewide Virtual Charter School Board regarding charter termination proceedings.
Scott did not read the entirety of the motion after executive session owing to its length and the late hour, but assistant superintendent of communications Shelly Hickman sent NonDoc the signed proposal Wednesday morning.
The eight-page consent agreement (embedded below) proposes a settlement for the SVCSB’s charter contract termination case. The SVCSB voted to begin charter termination proceedings in October owing to alleged contract violations, including a failure to meet the standards of fiscal management and violations of local, state, federal and tribal law.
Epic had filed a motion for summary judgement in an attempt to dismiss the charter termination hearing, but the motion was denied at the SVCSB meeting April 6. The SVCSB approved May 12 and May 13 as the new dates for the termination hearing.
If the SVCSB agrees to the proposal, the SVCSB will be considered to have dismissed allegations in the notice to terminate Epic’s charter contract.
The proposal includes revisions to financial management, such as implementing a contract and purchasing policy to require that all contracts under $150,000 entered into on behalf of Epic One-on-One be approved by superintendent signature and that all contracts of $150,000 or more be approved and signed by the governing board’s chairperson.
The proposal also includes terms for contracting an educational management company, revisions to board governance, revisions to learning fund management, clarification of requirements for entering into inter-local cooperative agreements and an agreement to use a different internal auditor than years prior for the FY 2021 audit.
A resolution also approved by board members after executive session states that the learning fund will be maintained in a public school bank account with all records in the public bank account for the learning fund being public record. Invoices and pertinent documentation approved by the governing board for the expenditure of public school funds from the schools’ learning fund bank accounts will also be public record. All aspects of the operation and management of the learning fund will be completed by the school and the management company, Epic Youth Services, will not have access, oversight or management of the learning fund.
“The school shall implement and manage this public school learning fund bank account effective July 1, 2021,” Scott read from the motion during the meeting.
The resolution also directs Superintendent Bart Banfield to prepare a reorganization plan for Epic One-on-One, effective immediately, wherein all public school employees are supervised by and report only to a public school employee or the governing board. Banfield must also take immediate action to ensure that only public school employees can access the public school bank accounts. Any private individuals on the account will be removed immediately, excluding the school’s treasurer who will have limited access to the accounts to be determined by the superintendent.
In the resolution, the board also directs, effective immediately, that no vendor use the nonprofit tax identification number of Community Strategies Inc. for any purchases and to cease and desist using any accounts in the name of Community Strategies in relation to any purchases without written superintendent approval.