State auditor releases findings on Epic Charter Schools audit

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OKLAHOMA CITY (KFOR) – The Oklahoma State Auditor & Inspector released a 120-page report Thursday afternoon at the Oklahoma History Center, showing her findings in the audit of Epic Charter Schools.

A slew of different findings came from auditor Cindy Byrd. An entire 120-page document detailing only part 1 of the audit. However, Byrd, broke it down into specific issues.

“On a scale of 1 to 10, with 10 being the worst, how bad is this audit?” A reporter asked Byrd at the news conference Thursday.

“I would say that this ranks at a ten,” Byrd responded.

In the audit, 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 said. “They take 10 percent of every tax dollar that comes through the school’s door.”

According to Byrd, at least $200,000 worth of that tax money was being sent to an Epic California school.

“That money was dedicated for Oklahoma children,” she said.

Byrd added that Ben Harris and David Cheney, the co-founders of Epic Schools, were having Oklahoma teachers teach for the California school.

“Harris and Chaney used state resources and state employees to further their business interest,” she said.

Harris and Chaney are also co-owners of Epic Youth Services (EYS), a for-profit organization. Both Epic Charter Schools in Oklahoma and California, along with EYS, have the same chief financial officer.

“On one hand, the CFO writes the check from the school funds and then on the other hand deposits it on behalf of EYS for profit,” Byrd said.

Another finding by Byrd showed Epic Charter Schools allegedly exceeded an Oklahoma legislative-placed 5 percent cap on administration costs.

“Epic exceeded that 5 percent cap on administrative costs overhead year after year,” she said.

Byrd also claimed the school was forced to pay the state a half million dollars from under reporting the administration costs. However, Byrd said that was just a slap on the wrist.

“By our calculations EPIC owes the state of Oklahoma $8.9 million,” she said. “I have seen a lot of fraud in my 23 years and this situation is deeply concerning.”

Epic Charter Schools sent a statement that reads as follows:

“We haven’t had a chance to read this 120-page report. What we witnessed today was political theatrics, but the information was not new and has been in the public realm for many years. What we did witness was Auditor Byrd attacking parents’ rights to choose the public school they think is best for them, and disparaging the work we are doing to provide high quality, remote learning opportunities for over 61,000 students and parents.

We take issue with the auditor’s assertion that we were not helpful or cooperative in this process. Our school’s staff has spent thousands of hours responding to a seemingly endless fishing expedition. We gave them access to our computer system, and to date we have paid $243,000 for the audit.

What the auditor seems to object to is the idea that our school model provides an alternative to traditional public schools. We have grown from only 1700 kids to more than 61,000 students over our 10-year history. Does our Learning Fund help us attract and retain students? Of course it does because it empowers parents and individualizes their children’s education.

We also explained, many times, the method we use to calculate student enrollment. In fact, we provided the auditor’s office with a chart, outlining the method and the resulting calculations. Those calculations are in line with other school districts. They were also accepted, year after year, by the State Department of Education. If the State Auditor understood how those calculations are made and reported, she would understand why we don’t owe $8.9 million.

We will be providing a point by point response within 24 hours, but once you cut through the theatrics of today’s announcement, the conclusion of the report calls for changes to the law; it does not assert that laws have been broken. Policy makers should be cautious about believing politicians over parents.”

EPIC CHARTER SCHOOLS ASSISTANT SUPERINTENDENT SHELLY HICKMAN

The full audit report is as follows:

Late Friday, Epic released a detailed response to the audit:

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