OKLAHOMA CITY — State leaders are now calling for an investigative audit of one of Oklahoma’s largest virtual charter school system.
Earlier this week, officials announced that Epic Charter Schools was under investigation for allegedly embezzling millions in state funding by illegally inflating enrollment numbers.
According to a search warrant filed in Oklahoma County court this week, Epic Charter Schools co-founders David Chaney and Ben Harris “acting jointly and together, devised a scheme to use their positions as public officers to unlawfully derive profits from state-appropriated funds.”
Investigators allege Chaney and Harris split the profit from Epic Youth Services (EYS) of at least $10 million between 2013 and 2018.
Epic received state appropriated funds from the Oklahoma State Department of Education based on the number of students enrolled, court documents state.
Harris and Chaney are accused of retaining “ghost students,” or students enrolled with Epic Charter Schools but received little or no instruction from their teachers. Investigators believe the students were recruited from home-schooled families and private and sectarian schools.
“Ben Harris and David Chaney enticed ghost students to enroll in Epic by offering each student an annual learning fund ranging from $800 and $1,000,” court documents state.
Today, EPIC’s Assistant Superintendent, Shelly Hickman responded to the inquiry with the following statement:
“We will fully cooperate with the governor’s request for Oklahoma Auditor & Inspector Cindy Byrd to conduct an audit of EPIC and we agree to bear the cost of that audit. We welcome this as an opportunity to once again prove to the public that our school follows the law in our service to the Oklahoma public school children and Oklahoma families we serve.”
According to the search warrant, one former Epic teacher told investigators she learned a rural family withdrew their 10 children from public school and received $8,000.
"The parents did not require the students to participate in any of Epic's curriculums and they spent their day horseback riding and participating in other non-educational activities," the search warrant states. "[Teacher] told me the main emphasis at Epic was to keep students on the rolls in order to keep the state aid money."
In response, Epic Charter Schools released the following statements:
“We are audited by the Department of Education and state-approved auditors each school year and are supremely confident that we operate our public school system within the boundaries of state and federal law. Since our inception in 2011, we have time after time proven ourselves innocent of all allegations. We will again. This latest attack comes at a time when our growth makes status quo education lobbying groups uncomfortable. We are considering legal action to combat what we believe is a coordinated effort to damage our school, our co-founders and our staff.”
"We were notified of an investigation in October 2013. We provided information about all of these allegations to the attorney general’s office and the OSBI between 2013 and 2017. More than two years ago, the attorney general’s office determined the evidence did not warrant further investigation, and we believed this to be a closed matter. The facts directly contradict the allegations in this affidavit, which have previously been reviewed by state investigators. The only new allegation in the affidavit is demonstrably false; the student who moved out of state was withdrawn from our school on November 8, 2017. According to records provided by the student’s new school, the student was enrolled at a different virtual school in Oregon on Nov. 16, 2017. That student never re-enrolled at EPIC and was never dually enrolled. 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. In the meantime, we will continue to serve the more than 23,000 students and families who have chosen EPIC – even if that makes the status quo education lobby uncomfortable."
Oklahoma Attorney General Mike Hunter's Communications Director, Alex Gerszewski sent News 4 the following statement in response to EPIC's release:
There has been an ongoing review of issues involving Epic Charter Schools by the Office of the Oklahoma Attorney General and the Oklahoma State Bureau of Investigation for the last several years. Attorney General Hunter spoke with OSBI Director Ricky Adams this morning and advised him, as in any investigation, that the OSBI should follow the evidence where it leads and recommitted our office’s support of his agency’s efforts. The Attorney General’s Office has never viewed this as a closed matter.
Now, Governor Kevin Stitt and State Superintendent Joy Hofmeister are calling for an investigative audit of Epic Charter Schools and all related entities. Officials are asking auditors to look back over three years and analyze previous audits.
“Oklahoma is investing in public education at the highest levels in our state’s history, while also modernizing and developing new solutions for the delivery of education that ensures the best outcomes for Oklahoma’s children,” said Gov. Stitt. “As we progress towards becoming a Top Ten state, we must be equally committed to accountability and transparency across the public education spectrum. This is why we are requesting for the State Auditor to engage with an investigative audit of Epic Charter School and its related entities.”
“As every public education dollar is precious, it is critical that there be full transparency and accountability for how those dollars are spent. I commend Gov. Stitt In calling for this audit to help shed light on the matter,” said State Superintendent Joy Hofmeister.