OKLAHOMA CITY (KFOR) – A report released Tuesday details how the state of Oklahoma did not provide controls when using outside companies for education initiatives and did not retain documents to prove the dispersing of funds met the federal government’s standards.
In a 69-page audit, the U.S. Department of Education Office of Inspector General laid out findings, concerns, and recommendations. It said out of the $39 million allocated to the state for GEER funds, $31 million given to other entities to perform state initiatives did not have the correct documentation to detail why it met the CARES Act criteria.
CARES Act funding was supposed to be distributed to support local educational agencies and institutions of higher education that were most significantly impacted by the coronavirus. This meant sending money to families or agencies for educational services, childcare, emotional support, or protecting education-related jobs.
The report detailed how four out of five initiatives did not meet those documentation requirements to explain why the money was spent.
The four initiatives – Skills to Rebuild, Learn Anywhere Oklahoma, Bridge the Gap, Stay in School Fund – “could not support its stated processes for awarding funds to eligible entities that were either most significantly impacted by the coronavirus.”
That amounted to $31 million. The recommendation from the federal government asked for the state to “provide documentation, or a full and detailed written explanation, of the process Oklahoma used to determine the initiatives it supported with GEER grant funds and the entities it selected to administer the initiatives.”
In the case of Bridge the Gap, the federal government is asking for $650,000 to be returned because of outright misuse.
On page 36, it goes into “Unallowable Purchases.”
Under Bridge the Gap, eligible families were awarded $1,500 to buy educational items. This was all administered through a company called ClassWallet.
The company could not be reached for comment.
The audit analyzed over 3,000 purchases and concluded that all of them were used for noneducational related purchases. This totaled $652,720.
Software was used to track down keywords that represented noneducational purchases. There were a remaining 94,942 purchases that total around $5.4 million. The audit is asking that the state inspect those remaining purchases to determine if they were for noneducational purchases.
One of the notes from the audit stated that current Education Secretary Ryan Walters was involved with the conceptualization of the contract between ClassWallet and the state. At the time, Walters was not the secretary of education, but was in charge of a non-profit called Every Kid Counts Oklahoma.
State Representative Andy Fugate has been a vocal critic of the misuse of GEER funds. He does not agree in no-bid contracts between the state and private companies.
“The buddy system leads to corruption and it needs to stop,” said Fugate.
Fugate is on the House Investigative Committee looking into the Swadley’s contract with the State Department of Tourism. He said Governor Kevin Stitt’s administration is to blame for the seemingly continuous corruption within state government.
“The checkpoints that were in place – the people involved were not doing the things that they needed to do to make sure that this system was being appropriately managed and awarding funds in a manner that was transparent and accountable to the people of Oklahoma,” said Fugate, speaking directly to the GEER funds.
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Governor Stitt’s office responded to the federal audit by saying that an audit into GEER funds was initiated months ago.
“If it is determined that a vendor failed to ensure funds were properly utilized or that any individual misused funds received for educational purposes, the state will take swift and appropriate action,” added Kate Vesper, Press Secretary to the Governor.
The Governor’s office did not name who was performing the audit, or when results should be expected.
State Auditor and Inspector Cindy Byrd confirmed that Governor Stitt has never made a request to the state auditors office to audit GEER funds. However, she did explain that her office is currently working on an audit as her office is required to audit GEER funds as part of the annual audit of federal expenditures.