Epic Charter termination case nears settlement
Part of online school system may avoid closure
Epic Charter Schools and a state agency governing virtual schooling are closing in on a settlement that could end a threat to shut down an online school with more than 30,000 students.
The Oklahoma Statewide Virtual Charter School Board on Tuesday approved a counter proposal to an agreement Epic drew up last week.
The counter proposal demands finances and service contracts for Epic One-on-One be completely separate from Epic Blended Charter, another school district within the Epic system.
It also asks that Epic One-on-One and Epic Blended have seven-member school boards made up of entirely different people. Both have five-member boards made up of exactly the same members. The counter proposal would require all members have clearly defined terms of service.
The 14-page document includes numerous requests for institutional change, such as hiring new financial employees, much of which Epic has already begun doing.
If Epic’s own school board approves the settlement, it could avoid a termination hearing next month that threatened closure of its largest branch, Epic One-on-One.
Serving about 55,000 students, the embattled virtual charter school system is bigger than any traditional district in the state. It contains two school districts, Epic One-on-One and Epic Blended Charter, which make up 60% and 40% of its student enrollment, respectively.
The statewide board is the authoriz
“I think we’ve now tipped the first set of dominos to say,
‘OK, to interrupt that final domino falling, this is the
process.’ ”
Robert Franklin Chairperson of the statewide virtual charter school board
er for all six virtual charter schools in Oklahoma, including Epic One-on-One. No virtual charter school can operate in the state without a contract with the board.
A settlement between both sides would conclude termination proceedings and relieve fears among Epic officials and families who have worried their school might close. A May 12-13 termination hearing would be rendered moot.
However, the hearing likely would continue if Epic’s school board rejects the latest settlement proposal. If the hearing proceeds, the board would act as judge and jury while reviewing evidence and testimony on alleged contract violations and financial wrongdoing by Epic.
Both sides hope they don’t reach that point, said Robert Franklin, chairperson of the statewide virtual charter school board.
“I don’t think anybody has wanted to go to that place,” Franklin said. “But, I think we’ve now tipped the first set of dominos to say, ‘OK, to interrupt that final domino falling, this is the process.’”
Epic’s school board was scheduled to meet at 6 p.m. Wednesday to discuss the proposal.
Epic Charter Schools’ accusations and proposed reforms
After a scathing state audit accused Epic of mismanaging taxpayer funds and having weak school board oversight, the statewide board initiated a process to end its charter contract with Epic One-on-One on Oct. 13.
In its original settlement proposal, the virtual charter school system offered to overhaul its financial and governing structures. It pledged to expand its school board from five to seven seats with two longtime board members expected to resign.
Epic denies any criminal wrongdoing, but its board has approved rounds of reforms to strengthen its internal governance in light of the state audit.
Epic’s attorney, Bill Hickman, said the school is adding three new layers of financial oversight that didn’t exist before the audit report was released Oct. 1. Epic is hiring two encumbrance clerks, an assistant superintendent of finance and an external treasurer, he said.
A controversial Learning Fund bank account, which pays for students’ extracurricular activities and learning materials, will become public record July 1. The private company that managed the school system, Epic Youth Services, will lose control of the account and any access to public school funds.
State auditors and investigators questioned Epic Youth Services’ use of school funds. It maintained the Learning Fund account and received 10% of all Epic’s funding. The Oklahoma State Bureau of Investigation alleged the company was a vehicle for owners Ben Harris and David Chaney to embezzle $10 million in taxpayer dollars.
Harris and Chaney, who co-founded Epic, have denied any wrongdoing. Neither has been charged with a crime.
Epic’s school board has taken away control of day-to-day school operations from Epic Youth Services. Hickman said this marks the end of the company’s days as Epic’s charter management organization.
“What our relationship with Epic Youth Services looks like in the future is being discussed,” Hickman said. “It’s a private contract and that’s all I can really say about that right now, but I can tell you that they do not meet the definition of an educational management organization under the law any longer.”
Epic Charter Schools proposed settlement faces criticism
The statewide virtual board’s attorney, Assistant Attorney General Marie Schuble, said Epic’s settlement proposal lacked specifics and “does not go far enough to protect the interest of the state and the students enrolled at Epic.”
Despite Schuble’s comments, Franklin said her and Epic’s proposals are similar, especially after the board amended some of the wording in her counter offer.
Franklin said the board preferred Schuble’s settlement proposal because it included more specific language for Epic to follow.
“The specificity that is being proposed by Schuble’s document seemingly gets to the heart of what Epic’s (legal) counsel was saying, and it’s really not far off with the changes that we had suggested,” Franklin said. “It didn’t look like we were in an abyss. It looked like there was just more specificity that was being brought.”
The board’s meeting Tuesday was the first since member Mathew Hamrick sued Franklin, two other board members and Executive Director Rebecca Wilkinson. Hamrick filed a lawsuit April 13 in Oklahoma County District Court to counteract his recusal from all discussions and votes on Epic.
Board members Barry Beauchamp, Brandon Tatum and Franklin voted Dec. 8 to recuse Hamrick from all Epic-related matters because of his ties to the school’s co-founder and Epic Youth Services owner, Chaney. They also disqualified board member Phyllis Shepherd because she is a relative of Chaney.
The board discussed Hamrick’s lawsuit in a private executive session but took no action. Hamrick attended only the public portions of the meeting. He didn’t participate in any votes. Reporter Nuria Martinez-Keel covers K-12 and higher education throughout the state of Oklahoma. Have a story idea for Nuria? She can be reached at nmartinez-keel@oklahoman.com or on Twitter at @NuriaMKeel. Support Nuria’s work and that of other Oklahoman journalists by purchasing a digital subscription today at oklahoman.com/subscribe.