OKLAHOMA CITY — After a review of an investigative audit and a ruling by the State Board of Education (SDE), Epic Charter Schools has agreed to repay upwards of $9.1 million to the state.
The investigative audit revealed that Epic Charter Schools and its hired management company owners, Ben Harris and David Chaney, were taking 10 percent of every dollar Epic received to provide administration and management to the school. Their 10 percent fee exceeds the 5 percent administrative cap in state law.
“I want to commend SDE for its work to determine Epic’s administrative costs,” said State Auditor & Inspector Cindy Byrd.
Byrd continues to state that Epic Charter Schools is still a public school district and is funded 100 percent by taxpayers. She said her office's duty is to make sure those funds are being spent properly and today's decision confirms that Epic and its previous leadership "abused millions of taxpayer dollars."
From day one, Byrd says she continually asked what services Epic's management company (EMO) provided in exchange for the 10 percent fee.
“They used state employees and state resources to do their company’s administrative work for the school. Where did the money go?” Byrd says of her investigation.
Until 2019, David Chaney was both Superintendent and 50% owner of the EMO. He also had the authority to submit false information to SDE.
When SAI reported about the company filing falsified invoices and personnel reports, the company claimed it would hire an internal auditor to reassess its administrative costs.
Byrd claims that the 'internal auditor' Epic claimed to hire turned out to be a relative of the company's CFO, Josh Brock. She questions why the new board of Epic now has to pay the price of its former EMO.
“Who is protecting the school and its students?" asks Byrd. "The new board at Epic Charter Schools has taken great steps toward transparency and has been very cooperative in providing SAI needed documentation; now they are under attack.”
Byrd hopes to get answers to her questions as State and Federal investigations progress.
“Almost 14 months ago, I provided documentation to the Attorney General’s office that proved the company submitted false invoices to siphon off millions in taxpayer dollars under false pretenses,” Byrd said. “I am still waiting for legal action to hold Harris, Chaney, and Brock accountable.”
Because of the questions concerning administrative costs within schools, lawmakers asked Governor Kevin Stitt to request a special investigative audit of SDE. That audit is currently underway, and the first phase should be released publicly in spring 2021.
Since the release of the audit, Epic Charter Schools decided to part ways with its co-founders in May 2021. According to the Oklahoman, both Harris and Chaney have filed a breach of contract lawsuit against the school district for nearly $7 million.
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