Epic Charter Schools projects nearly $270 million in revenue this fiscal year as its enrollment skyrockets into the largest public school system in Oklahoma.
The board for Community Strategies, the nonprofit in charge of Epic, voted unanimously Tuesday night by teleconference in favor of Fiscal Year 2021 budgets for Epic One-on-One and Epic Blended Learning Centers.
The board approved a $173,453,428 budget for Epic One-on-One, a statewide online learning platform. Epic Blended Learning Centers, located in Tulsa and Oklahoma County, will operate with a budget of $95,968,952.
Epic One-on-One budgeted for $170.8 million in expenditures, and Epic Blended estimated nearly $91.4 million in spending.
These budgets are based on an enrollment of 40,000 total students, a benchmark Epic achieved this week. The virtual charter school system reached 40,631 students on Tuesday, riding a wave of enrollment that began after the July 4 holiday.
The recent spike, propelled in part by the coronavirus pandemic, pushed Epic past Tulsa Public Schools and Oklahoma City Public Schools for the highest enrollment in the state.
Superintendent Bart Banfield said the virtual charter school system projects a total enrollment of 55,400 by the end of the 2020-21 school year. The first day of school is Sept. 8.
Epic is a free public virtual charter school that receives state funds for every student enrolled and a smaller portion of federal support. It does not receive any local tax revenue.
Initial state funding for Epic, which is distributed in August, will be based on its student count at the end of the previous school year, when the virtual system had about 32,000 students.
State funding is adjusted mid-year to account for enrollment changes between the end of the previous school year and Oct. 1. Epic could see a large hike in funding in its mid-year adjustment on account of its massive enrollment growth over the summer.
In less than a month, Epic has added thousands of new families, 60% of whom said they are seeking virtual schooling because of COVID-19, according to a survey Epic conducted of 2,300 newly enrolled parents. Nearly 50% said they did not intend to return to their previous school once the pandemic ends.
The board also heard results from an internal audit of Epic’s Learning Fund, a bank account that has drawn the attention of law enforcement and Oklahoma’s state auditor and inspector.
Epic’s Internal Auditor Linda Ladd presented a clean report to the board. Ladd said her audit had no material findings and all expenses were “appropriate and for the purpose of educating children.”
Epic directs some of its annual funding to an account called the Learning Fund, and its private management company, Epic Youth Services, doles out the money. Each student is allocated $1,000 to put toward extracurricular activities, a supplemental curriculum or educational technology.
The Oklahoma State Bureau of Investigation alleged Epic used the Learning Fund to entice homeschoolers and private school students to dual-enroll in the virtual charter school as a way to illegally inflate its enrollment counts, according to court documents filed last year.
Epic has denied any wrongdoing. The OSBI investigation is still ongoing.
State Auditor and Inspector Cindy Byrd said she has requested Learning Fund records from Epic Youth Services, but the company refused to divulge any documents. Byrd is conducting an investigative audit of Epic at the request of Gov. Kevin Stitt.
The dispute over financial records is now in Oklahoma County District Court. Attorneys representing Epic Youth Services said a private business should not be subject to a public audit.
In March, Epic’s school board requested Ladd, who works for Epic, perform an internal audit of the Learning Fund. She reviewed transactions between July 1, 2017, through June 30, 2019, involving about 2,700 students. The audit report did not specify the total amount spent on the Learning Fund over that time.
Ladd said any discrepancies she found were minor and were not recurring issues. Her audit found nine instances, amounting to $42, in which a Learning Fund payment differed from third-party documentation.