Stitt requests OSBI briefing on Epic "ghost students" investigation
A day after embezzlement allegations surfaced against Epic Charter Schools, Gov. Kevin Stitt has requested a briefing from the Oklahoma State Bureau of Investigation on its inquiry into “ghost students” enriching Oklahoma’s largest virtual charter school system.
The OSBI alleged Epic unlawfully received millions in state funds by inflating its enrollment with students who received little to no instruction from the virtual charter school, according to a search warrant filed Tuesday in Oklahoma County District Court. Investigators said Epic paid several families, schools and learning centers to dual-enroll children who were homeschooled or attended private and sectarian schools.
OSBI agents claim Epic co-founders David Chaney and Ben Harris illegally pocketed $10 million in state funds from 2013 to 2018, according to the search warrant.
“As we dig into this matter, the governor is committed to ensuring accountability and transparency with Oklahomans’ hard-earned tax dollars, most importantly in our public education system,” Stitt spokeswoman Donelle Harder said. “If there were loopholes used or laws broken, the governor is committed to working with the Legislature to address it.”
Epic has denied any wrongdoing.
State schools Superintendent Joy Hofmeister said the OSBI allegations were “extremely serious and disturbing.”
“The state Department of Education stands ready to work with any criminal investigation to determine if public education and countless Oklahoma taxpayers have been defrauded of millions of dollars,” Hofmeister said. “In the meantime, it is important to let the legal system do its work. For the sake of Oklahoma students and families all across the state, we must ensure accountability of all education funding.”
The Statewide Virtual Charter School Board, which has direct oversight of Epic, stated it is cooperating with the OSBI as the investigation continues. Executive Director Rebecca Wilkinson declined to comment further “because this matter is ongoing.”
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On Wednesday, Epic acknowledged the OSBI had been investigating the school since 2013 but said it believed the matter was resolved in 2017.
"More than two years ago, the attorney general’s office determined the evidence did not warrant further investigation, and we believed this to be a closed matter," Harris and Chaney said in a statement.
However, the attorney general's office said it never closed the matter.
"There has been an ongoing review of issues involving Epic Charter Schools by the Office of the Oklahoma Attorney General and the Oklahoma State Bureau of Investigation for the last several years," Alex Gerszewski, the attorney general's communications director, said in a statement to The Oklahoman.
"Attorney General Hunter spoke with OSBI Director Ricky Adams this morning and advised him, as in any investigation, that the OSBI should follow the evidence where it leads and recommitted our office’s support of his agency’s efforts.
"The attorney general’s office has never viewed this as a closed matter."
In its denial of wrongdoing, Epic leaders said its criticism stems from the way the fast-growing school has made "status quo education lobbying groups uncomfortable," said Shelly Hickman, assistant superintendent of communications for Epic.
On the campaign trail last year, Stitt said he supported charter schools. On Wednesday, Stitt’s office affirmed the governor’s support of “forward-thinking solutions” for public education.
“This should not become an assault on alternative public education opportunities that are emerging across our state, in various school districts,” Harder said. “The governor believes Oklahoma can be a leader on innovating and modernizing the delivery of public education to best meet the needs of children today and to better prepare them for the future workforce.”
Republican leadership in the Legislature remained silent on the embezzlement allegations. Neither House Speaker Charles McCall nor Senate Pro-Tem Greg Treat addressed the OSBI investigation as of Wednesday.
Rep. Ron Sharp, R-Shawnee, told The Oklahoman the investigation signaled a “tremendous breakdown” in oversight. Sharp, a former educator and longtime critic of Epic, said the state should establish a system of payment for virtual schooling that is based on students’ progress in online courses.
As a public school, Epic receives state funding for each student enrolled. OSBI investigators claim Epic received state funds for "ghost students" who were not required to complete assignments or merely finished a fraction of their schoolwork.
“The final payment (should) not be made until the student completes the virtual course work,” Sharp said. “That would have eliminated all of these problems that have been created.”
Heavy criticism of Epic arose from Democratic lawmakers, several of whom commented Tuesday evening.
House Minority Leader Emily Virgin, D-Norman, said she was concerned about the OSBI report that Epic profited from state funds by paying students and families to enroll. Investigators found Chaney and Harris enticed dozens of ghost students to enroll in Epic by offering an annual learning fund of $800 to $1,000, according to the warrant.
"I hope that my colleagues in the House will take these allegations seriously, as well,” Virgin said in a statement. “If we have a school that is defrauding the state to this magnitude, at a minimum, it shows a systematic flaw exists in the regulation of online and charter schools in our state. If the OSBI shows this to be true, the House must act to ensure that public funds are safeguarded today and in the future. "
Virgin called on the attorney general to hold Epic accountable if the allegations are proven to be true. The Oklahoman has learned the OSBI is expected to present its findings to Oklahoma County District Attorney David Prater once the investigation is concluded.
Last month, Rep. Melissa Provenzano, D-Tulsa, requested a House inquiry into virtual charter school attendance. Provenzano, a member of the House Common Education Committee, questioned why virtual schools showed poor academic performance but high attendance, which is usually an indicator of testing success.
The state Department of Education gave Epic One-on-One elementary and high school a D grade for academic achievement in its annual report card. Epic One-on-One middle school received a C in this category. All three achieved A grades in chronic absenteeism, meaning few students missed 10% or more of the school year.
Provenzano said Epic has consistently demonstrated questionable financial decisions, attendance counts and record keeping.
“$10 million. Stolen. The students and families of Oklahoma deserve better,” Provenzano said in a statement. “Given the strict oversight the state Department of Education has for brick and mortar schools, I am eager for their response to this situation and their plans to keep this from ever happening again.”