Byrd’s office found that Epic exceeded the state’s 5% state cap on administrative overhead costs intended to ensure public schools direct most resources on students “year after year.”
The state auditor’s report cites “questionable classification and reporting of administrative costs” between FY 2017 and FY 2019 totaling $16.6 million for Epic One-on-One, a statewide virtual charter school, and $6.7 million for Epic Blended Learning Centers, which offer students in Tulsa and Oklahoma counties a blend of at-home and classroom-based studies.
And a $530,000 penalty imposed by the state school board in February, while significant, represented a fraction of what the state auditor said she has documented proof that Epic actually owes for underreported administrative payroll costs the past six fiscal years: $8.9 million.
Byrd previously called the penalty “a slap on the wrist.”
Her report says had Epic Charter Schools been assessed full penalties by the state, Chaney and Harris’ company called Epic Youth Services would reportedly have collected at least $837,000 less in management fees.
The state audit team also found in 2016, Epic Charter Schools “inaccurately reclassified administrative costs,” thus avoiding a $2.6 million penalty for exceeding Oklahoma’s limit on administrative costs.