Oklahoma’s current multi-county grand jury has been hearing testimony about Epic Charter Schools since December and has not completed its investigation, but the body released a 25-page interim report today to inform “the public, parents and policy makers regarding concerning trends which are emerging in the investigation.”
In addition to hearing testimony, the grand jury has been reviewing information from a damning state audit to determine whether Epic’s controversial virtual charter schools have used public funds inappropriately. Thursday’s interim report cites three major areas of concern: a lack of oversight, a lack of operational transparency and a lack of accountability by the for-profit management company Epic Youth Services.
The grand jury’s report (embedded below) references policy makers multiple times, an allusion to the fact that the Oklahoma Legislature is still in session and has yet to release a budget or finalize a proposal regarding funding changes for charter schools.
“The multi-county grand jury believes that parents, students, policy makers and the public have a need to know about the initial findings of our investigation and thus issues this partial report of its initial findings and recommendations,” the report states.
Oklahoma Attorney General Mike Hunter’s office has recused itself from the presentation of Epic Charter Schools information to the multi-county grand jury, which state and district attorneys use to investigate and bring indictments in complicated criminal cases.
Hunter appointed former Commissioner of Labor Melissa Houston as special counsel regarding the Epic investigation, and Houston has been working with several legal advisors to present information to the grand jury.
“The interim report speaks for itself,” Houston told NonDoc.
Federal law enforcement agencies have also been presented with information related to Epic, but it is unclear whether an active federal investigation is also ongoing.
Epic ‘will continue to fully cooperate’
Thursday’s report calls for Community Strategies Inc., the governing board of Epic, to “recognize its fiduciary duty to the taxpayers, and extricate itself from its incestuous relationship with a private company, profiting on the backs of students.”
In October, the State Auditor & Inspector’s Office released an investigative audit alleging that Epic Charter Schools owe the state $8.9 million after using Oklahoma tax dollars to fund Epic California and violating a law that limits how much money a charter school can spend on administrative costs.
Epic’s controversial learning fund, which reimburses families up to $1,000 for educational curriculum or extra-curricular purchases, has also been tied up in litigation. The audit revealed that between FY 2015 and FY 2020, the private Epic Youth Services management company had received received $79.3 million in state dollars for the student learning fund along with $45.9 million in management fees. (Epic Youth Services is owned by Epic co-founders Ben Harris and David Chaney.)
The State Auditor & Inspector’s Office had issued subpoenas for records from Epic Youth Services, but the management company had claimed that, as a private company, their financial records should not be publicly revealed.
In an April meeting, Community Strategies approved a motion that would move the learning fund from private account management to public bank accounts.
Shelly Hickman, an assistant superintendent for Epic Charter Schools, released a statement Thursday afternoon regarding the grand jury’s report.
“Epic’s board of education has since October 2020 made significant corrective actions, including Epic Youth Services no longer operationally or financially managing or controlling the school,” Hickman said. “The school itself has fully cooperated in providing public records. We will continue to fully cooperate in sharing any information we have with the grand jury.”
Recommendations from Thursday’s grand jury interim report include:
- The Legislative Office of Fiscal Transparency should conduct an evaluation of Epic Charter Schools and report their findings to the Oklahoma Legislature;
- Immediate disclosure and acknowledgment that any funds provided for the education of students, including the student learning fund, are public funds and must be easily reviewed and reconciled;
- Community Strategies, the governing board, should immediately change its methods of operation to provide for greater accountability and transparency;
- Charter sponsors should receive stronger oversight by making them liable for returning the allowable 3 percent to 5 percent administrative fee if public funds are found to be spent inappropriately;
- Educational management organizations that operate public charter schools should face increased accountability;
- The Oklahoma Legislature should publish all operating contracts for charter management organizations operating schools, as well as a comparison of management fees paid;
- In-depth and independent financial audits should be conducted at the mid-point of a charter contract prior to renewal, and any audits conducted for public charter schools should be completed by the state auditor or from a list of approved auditors;
- The State Department of Education should provide better oversight of charter schools;
- The Legislature should consider additional accountability and transparency provisions if a for-profit entity is managing a public charter school.
Read the multi-county grand jury’s interim report
