The state Board of Education met Thursday and discussed, both publicly and behind closed doors, the investigation of Epic Charter Schools.

State and federal investigators are probing allegations of embezzlement of public funds by the online school’s leaders. They have denied wrongdoing.

State Superintendent of Instruction Joy Hofmeister briefed board members on Oklahoma State Bureau of Investigation’s search warrant affidavit, filed in court July 16, and a forensic audit now underway by the State Auditor & Inspector's Office. Hofmeister joined Gov. Kevin Stitt in requesting the audit Friday.

The board also met in a closed-door session with staff attorney Brad Clark regarding the audit and OSBI investigation, among other legal business. Epic is being investigated by the FBI and Office of Inspector General, the law enforcement arm of the U.S. Department of Education, as well as the state entities.

Hofmeister called the allegations “very serious” and said she will continue to defer to investigators on anything that could affect the investigation.

“Every step we would need to take in the normal course of opening school and the new school year, we will be working with investigative authorities to ensure this is the right step,” she said.

After the meeting, Hofmeister answered some questions about the investigation and the department’s role moving forward.

What’s in the immediate future for Epic with the 2019-20 school year approaching?

Hofmeister said she doesn’t expect a displacement of current students. Funding and accreditation of Epic are being handled as business as usual. The state board, in fact, approved accreditation Thursday for school sites across the state, including Epic’s. That clears the way to receive state funding, of which Epic is to receive an estimated $120 million in the 2019-20 school year, beginning Aug. 1.

“We keep moving forward unless we are directed otherwise,” Hofmeister said.

How long has the state Education Department had concerns about Epic?

Epic has stirred controversy since the get-go, and in the OSBI affidavit, the investigator alleges that the entire premise of Epic was a money-making “scheme.” Hofmeister indicated the Education Department has fielded complaints for years but has been unable to verify allegations without additional authority, such as subpoena power, which she said 51 other state agencies (like the auditor) have.

“We will continue to ask for that (subpoena power),” she said.

She gave the example of the OSBI investigator’s seizure last month of an Epic teacher’s laptop, along with a cellphone. The Education Department does not have the authority to do that. They also do not have records of students who are home-schooled or are enrolled in private schools, which could have been used to verify the dual enrollment of “ghost students” alleged in the affidavit.

To begin tracking that, the Legislature would have to change the law. “I think that Oklahoma would have to decide, ‘How far would that reach be, with the government, in the personal lives of families?’” She also wants to see the Statewide Virtual Charter School Board, which authorizes Epic and other virtual schools, placed under the state Education Department. The department plans to push for subpoena power and authority over the Statewide Virtual Charter School Board in the next legislative session.

Why didn’t Hofmeister call for an investigative audit sooner?

The Education Department was assisting the FBI and OIG and those agencies did not want it, Hofmeister said.

“There are reasons why they would not want us to do that,” she said. “We’re very careful to not impede an investigation that we’re already aware of that the public is not.”

Will Epic be shut down?

Virtual schooling has many supporters, and some of the loudest and strongest advocates support Epic.

“It’s important to say there is a real place for virtual schools and that opportunity for students,” Hofmeister said.

But there are signs that state leaders and lawmakers want to place additional checks and restrictions on these schools. The Legislature approved this year House Bill 1395, authored by Rep. Sheila Dills, R-Tulsa, which requires virtual schools to be more transparent and report spending by a for-profit management company. Dills attended the closed-door session of the state board meeting.

Another expenditure Hofmeister wants addressed is schools’ use of public money for advertising to recruit students.

“I don’t like seeing dollars used in advertising to recruit new students and grow exponentially when school performance isn’t as successful for all kids,” she said, referring to Epic, which has blitzed the state with print, online, TV and radio ads. “But is that unlawful? Does that need to change? Perhaps.”

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