Epic Charter Schools' management company won't turn over records, state auditor says
Epic Charter Schools’ management company, run by the school’s co-founders, has been accused of refusing to turn over financial records to the state auditor.
The Office of the Attorney General filed a motion in Oklahoma County District Court on Thursday compelling the company to comply.
The attorney general’s office filed the motion on behalf of State Auditor and Inspector Cindy Byrd, whose office is conducting an investigative audit.
“Our office has been working with Auditor Byrd’s office in her ongoing audit of Epic,” the attorney general’s office said in a statement. “We filed a motion to compel documents that attorneys working for the school have refused to turn over for several months.”
Epic’s co-founders, David Chaney and Ben Harris, own the company Epic Youth Services.
Epic Youth Services receives 10% of all state funds allocated to Epic Charter Schools for providing management services to the virtual charter school system. Epic is a public charter school that serves more than 29,000 students across the state.
The company’s attorney, Elizabeth Scott, said Epic Youth Services offered to allow the state auditor to review records appropriate to their request but received no response before the court filing Thursday.
"The State Auditor's legal position — that private businesses are subject to state audit — should concern every business owner in Oklahoma,” Scott said in a statement. “We will vigorously fight for the protection that has historically been provided to private businesses like Epic Youth Services.”
Gov. Kevin Stitt requested an investigative audit of Epic and all its related entities in July after the Oklahoma State Bureau of Investigation alleged the virtual charter school system embezzled millions in taxpayer dollars.
The state auditor’s office issued two subpoenas to Epic Youth Services, but the company refused to provide the requested financial records, according to the court filing. The auditor’s office said Epic Youth Services refused to turn over records for five months after the first subpoena was issued Sept. 25.
“(Epic Youth Services) maintains that it is a private entity, and as such, adamantly denies that any records in its custody or control are subject to disclosure,” the court filing states. “The State Auditor disagrees with (Epic Youth Services’) conclusion.”
The state auditor issued a third subpoena to Epic Youth Services on Feb. 25, requesting more financial documents and all email accounts registered through EpicCharterSchools.org from July 1, 2014, through Jan. 31, 2020.
The auditor repeatedly requested records for the Learning Fund, which Epic uses to pay for students’ extracurricular activities.
The OSBI accused Epic of using the Learning Fund to give financial incentives to families for enrolling their children, even if they also attended private schools or were primarily home schooled, with little to no instruction from Epic.
The OSBI alleged Chaney and Harris pocketed $10 million in state funds that flowed through the virtual charter school to Epic Youth Services. The private company is shielded from oversight by the Oklahoma State Department of Education, which has no power to subpoena documents from private vendors.
Epic and its co-founders have denied any wrongdoing.
The auditor’s court filing will come before a district judge in a hearing March 26.