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OKLAHOMA CITY (KFOR) – Epic Charter Schools signed a settlement Wednesday night with the Statewide Virtual Charter School Board, several months after a state auditor found what she described as extensive financial impropriety.

The settlement was signed at the end of a lengthy meeting.

The agreement requires Epic Charter Schools to separate from Epic Youth Services, LLC (EYS), the for-profit branch of Epic Charter Schools that previously oversaw the school’s day-to-day operations.

“As a result of corrective actions made by the EPIC Board prior to the settlement agreement, all school personnel now report to the superintendent and the board, and EYS is no longer logistically or financially managing the school,” an Epic-issued news release states.

However, the agreement allows Epic to continue serving the more than 35,000 students enrolled in its One-on-One charter, which has students in 75 Oklahoma counties.

Cindy Byrd, the Oklahoma State Auditor & Inspector, released a 120-page report on Oct. 1, detailing the first part of an extensive audit into Epic’s finances.

Byrd said they reviewed Epic Charter Schools’ finances from 2015 to 2020.

“Epic charter schools was given almost a half a billion dollars during the audit period,” Byrd previously said. “They take 10 percent of every tax dollar that comes through the school’s door.”

Epic was sending at least $200,000 worth of Oklahoma tax money to an Epic California school, according to Byrd.

Byrd, earlier this month, detailed to Oklahoma school leaders the findings of her investigation into Epic.

Much of the scathing report focused on the funds spent on Epic Youth Services, which schools contracted with.

EPIC charter schools
Epic Charter Schools

A PPP-loan report showed that last year, Epic Youth Services received a loan of $42,700 for its three employees.

Byrd pointed out the company was paid $46 million in tax-payer dollars from 2015 through 2020, even though it had zero employees besides the two founders for most of that time.

“In 2019, they hired two lobbyists and a security man, but we are unsure how these positions helped the management of the school,” Byrd said.

Byrd went on to spell out what she called falsified monthly invoices from EYS to Epic One-on-One and Epic Blended, including invoices for certified and non-certified employees – even though there were only the three – and food services for virtual-only students.

“See the food services management?” Byrd said. “How does a virtual only school have $37,000 spent every month, that same exact amount, $37,000 for students that require no child nutrition costs?”

One of Byrd’s biggest points of frustration is $125 million in tax payer dollars unaccounted for from 2015 to 2020.

Epic administrators have long maintained that the audit was politically driven.

“While we have objected to the politicization of the audit and some of its findings, we have implemented many changes it recommended to strengthen our school and make our operations more transparent,” Epic School Board President Doug Scott is quoted as saying in Epic’s Wednesday news release. “We’re in a different, stronger and better place than we were six months ago, and I’m proud of the hard work of this Board and our school leaders. I want to thank the SVCSB and Executive Director Dr. Rebecca Wilkinson for her leadership during this period of time. Everyone involved has a servant’s heart and wants to serve children and families to the best of our ability.”

The news release states there will be greater transparency, including changes that will “allow for a more detailed, public view of the school’s expenditures.”

The news release said the greater transparency will include public access to EPIC Learning Fund expenditures for the highest level of public transparency by July 1 and on a go-forward basis.

“We worked toward this settlement with one goal in mind: improve where we needed in the interest of continuous school improvement to better serve our 2,200 staff members and our approximate 55,000 students and families,” said EPIC Superintendent Bart Banfield. “Our team is now excited and ready to turn the page on what has been a turbulent chapter. We believe the 2021-2022 school year will be our best yet and show our commitment to having a positive, collaborative relationship with the SVCSB, the State Department of Education and our other partners and sponsors.”

The entire settlement is included below: