Epic virtual charter school leaders funneled millions of state tax dollars meant for educating students into a private management company, violating numerous state statutes and school financial norms, according to a state audit released Thursday.
The audit accused Epic Superintendent David Chaney and Chief Financial Officer Josh Brock of invoicing payments to Epic Youth Services, the private management company owned by Chaney and Ben Harris.
Those payments were “rubber stamped” by a school board that admitted to state auditors they did not review invoices, purchase orders, checks or other financial documents, according to the 105-page audit.
“I have seen a lot of fraud in my 23 years and this situation deeply concerns me,” said Cindy Byrd, the state’s auditor and inspector, who presented the audit during an afternoon media conference.
The audit, which was ordered last year by Gov. Kevin Stitt, has been turned over to the state Office of the Attorney General and the Oklahoma State Bureau of Investigation, Byrd said.
From 2015 to 2020, $485 million in state aid and federal education funds were disbursed to Epic, which is a public school.
More than $125 million was then dispersed to Epic Youth Services, the private company owned by Chaney and Harris.
Epic Youth Services denied requests by the state auditor’s office to review its finances, and the matter is currently before an Oklahoma County judge, who has scheduled a December hearing.
Epic has maintained that funds distributed to the private company are used for educational purposes.
The audit also found Epic had used more than $200,000 to establish a school in California, violating a state statute that prohibits state funds from being used to provide support for out-of-state schools.
Epic has grown significantly in recent years and has reported its current enrollment at more than 60,000, larger than any other school district in the state.
Epic has received intense scrutiny for its spending practices, including millions spent on advertising.
Epic spent more than $3 million on a recent media blitz, “Yet our classroom teachers are taking money away from their own families to buy school supplies,” Byrd said.
The school has also drawn the attention of the Oklahoma State Bureau of Investigation, where investigators claim the school has falsified enrollment records and that Epic’s founders split at least $10 million in state funding that was sent to Epic.
Epic has denied any wrongdoing and no charges have been brought against the school or its employees.