Oklahoma To Withhold $9.1 Million From Epic Charter Schools For Improper Spending

The Oklahoma State Board of Education voted unanimously on Thursday to withhold $9,111,727.60 from Epic Charter Schools after a state audit found the district improperly spent public funds.  

OSBE attorney Brad Clark said the audit uncovered improper disbursement of state funds for administrative costs and classification of district employees.  

“Inconsistency does not begin to describe it,” Clark said.  

Epic Charter Schools faced termination after the audit report was released in Oct. 2020 and has since restructured its organization and leadership.  

Related: Epic Charter Schools Announces Major Staff Cuts Due To Students Transferring Back To Traditional School Districts 

State Auditor & Inspector Cindy Byrd said the district owed more than $11 million for improper administrative spending when the audit was first released. Epic contested the amount and said an internal audit found it only owed $307,148.  

The Oklahoma State Dept. of Education reviewed the auditor’s work papers and found $9.1 million was the correct amount owed.  

“They have no reason to dispute the $9.11 million,” Clark said.  

Oklahoma State Superintendent Joy Hofmeister said the money will be diverted to other school districts through the state’s funding formula.  

State Auditor & Inspector Cindy Byrd said the $9.1 million withholding adds to other fees and repayments Epic has made as a result of the audit's findings. She said the board's vote is "an absolute victory for the taxpayers."

"How many time do you see $20 million... returned to the state for funds that were not spent the way they were supposed to by law?" Byrd said. Click here to read her full statement.

Enrollment at the district, which offers online and in-person courses, exploded during the COVID-19 pandemic but has since lapsed. Epic Charter Schools began the 2020-2021 school year with about 61,000 students and now has an enrollment of about 38,000.  

Epic issued a statement on their Facebook page Thursday afternoon:

"The Oklahoma State Board of Education (OSBE) met today and confirmed that the state will be withholding $9.1 million dollars from EPIC due to excessive administrative costs by our former for-profit management company, Epic Youth Services (EYS) which were discovered in the October 2020 Oklahoma State Auditor & Inspector (SAI) audit.

"EPIC appreciates the work of and supports the findings of SAI and OSBE. It is our responsibility to right the wrongs that occurred during the tenure of EYS. We will continue to cooperate with the OSBE and SAI.

"Our duty is to the students and parents that choose EPIC. EYS is responsible for this penalty and EPIC will pursue reimbursement on behalf of our school.

"Though this penalty is substantial these monies will be returned to Oklahoma public schools. EPIC is strong and supports public education statewide."