EPIC virtual charter school is locked in a battle with state auditors over the question of whether public money belongs to the public or to the owners of the school.

Face-Off Between Epic, State Centers on Controversial ‘Learning Fund’

EPIC is a charter school but it’s defense is that it is a private business, not a public agency. How refreshing!

The story:

The state is drawing a hard line: Public education funds that flow to a private company are public.

Founders of the state’s largest online charter school are fighting to shield those funds. Their company has refused to comply with subpoenas from the State Auditor and Inspector.

The showdown is headed to court and could have major ramifications for Epic Charter Schools and its for-profit management company, Epic Youth Services, both of which have drawn controversy since inception a decade ago.

At the heart of the issue is something Epic calls the “learning fund.” It’s a major draw for students and families and has helped propel Epic’s stunning enrollment growth.

Here’s how it works: Epic makes at least $1,000 available to each student annually in the student’s learning fund. Dollars are deducted for their choice of curriculum and for a plethora of other items of their choice, such as laptops and iPads, science kits and craft supplies, soccer club fees, horseback riding lessons, gymnastics and summer camps.

Parents don’t receive the money directly but instead request a purchase from Epic. Epic transfers the money to Epic Youth Services, according to the court filing, which then pays the vendors directly. There are more than 1,400 private learning-fund vendors.

The school makes periodic transfers of state funding into a checking account specifically for learning fund purchases. The school transfers into a separate checking account 10% of its total revenue to Epic Youth Services for a management fee.

Epic Charter School co-founder Ben Harris is seen at a board meeting in Oklahoma City on Oct. 16, 2019. (Whitney Bryen/Oklahoma Watch)
Epic was founded by David Chaney and Ben Harris; the two men also own Epic Youth Services LLC. Chaney and Harris have split at least $10 million in profits from Epic Youth Services between 2013 and 2018, according to the OSBI, which is investigating Chaney and Harris on allegations of embezzlement and racketeering.

Chaney and Harris have denied wrongdoing, and no charges have been filed. Through an attorney, they responded to the auditor’s court motion with a written statement.

“The state Auditor’s legal position – that private businesses are subject to state audit – should concern every business owner in Oklahoma. Epic Youth Services has offered to voluntarily allow the auditor to review records appropriate to their request, but we have received no response prior to this court filing. We will vigorously fight for the protection that has historically been provided to private businesses like Epic Youth Services.”