Hatchet Job of An Audit: Chapter 3 State Auditor Cindy Byrd Caught Lying

 

Chapter 3 of ... 

Hatchet Job of an Audit Torn Apart One Section at a Time

 

State Auditor Cindy Byrd Caught Lying on Multiple Issues and Facts

 

Another Inept & Incompetent “audit” like the Health Department Audit Where $30 Million was Missing and Then Not Missing?

 

Or a Case of a State Official Selling the Power of Her Office for Campaign Contributions and Teacher Union Thug Help in Elections?

 

  The political hatchet job of an “audit” done by Oklahoma State Auditor Cindy Byrd is an eye watering mess of opinion and fact designed to punish Epic Charter School and drive them out of business. It is 116 pages of complaints about the structure of Epic, bitching about Epic making a profit, and using state law that applies to normal schools to second guess Epic's normal procedures, all of which were set up under the auspices of Graham Public Schools, the original school down near Henryetta that sponsored Epic, the State Department of Education (SDE), the Statewide Virtual Charter School Board (SVCSB), Rose State College, and the school board for Epic One on One, Community Strategies.

 

Chapter 3 Payroll: The Teacher Retirement System Issue

 

Here is a link to the SAI, State Auditor and Inspector “audit”. Scroll down to page 50 through 52 for the discussion of the Teacher Retirement System payments, over on the right upper side there is a text box that displays the page number. Just type 50 into the box and it will take you to page 50. We are talking about just one of the many “issues” that Byrd generated out of thin air and will cover the others in a future newsletter.

 

Epic has two schools, One on One, and the Blended learning school. One on One is virtual, online. Blended is also online but it also has a brick and mortar location so the kids that don't have parental supervision during the day have a place to come to to study and work. To contain costs, which lowers the cost to the state, Epic's management company, EYS, Epic Youth Services, does the payroll and reporting for both school districts. The actual books are kept seperate including payroll and hard expenses, only the management costs such as payroll are pro rated to each entity.  The teachers would actually be part time in nature except Epic thought of having the teachers perform work for both schools so that they would count as full time teachers to protect their pensions.  To accomplish this the teachers have a single contract with EYS and Epic (EYS) attaches the expenses to the appropriate school district.

 

That of course was one of the “audit” complaints, sharing payroll calculation expenses, despite the arrangement being approved and condoned by both SDE, SVCSB, the two school boards of each district, and the two sponsoring school districts.

 

Keep in mind during all of this that this is a new way of doing things and not everything is nailed down by statute, indeed the entire reason for existence of Charter Schools if to be flexible and try new ways of doing things. So when the Blended school applied to the TRS, the Teacher Retirement System, they were turned down! Why? TRS wanted the superintendent of One on One to participate in the retirement program but the superintendent didn't want to do that. He had plenty of retirement coverage though Epic. And Epic had a late fee owed of around $2,300 for a late report.

 

 

After being rejected, Epic just included the 70 odd employees on the One on One TRS system, after all they were writing the checks and had to pay the teachers they contracted with. All the money owed was paid to the TRS.

 

 

And all of it was irrelevant anyway as the only “finding” was listed on page 52 and that was that the payroll totals given by Epic didn't match the payroll totals filed with the TRS. The discrepancies were between $6,000 and $20,000 per employee, this was the annual bonuses paid out to Epic teachers which the TRS had already instructed Epic not to count as payroll subject to TRS retirement payments.

 

 

In response to the State Auditor Epic sent a series of emails from the TRS outlining the fact that bonus payments are not considered part of retirement payroll but the money is considered when charging the teacher for the health insurance. Actually Epic had to wring that out of the TRS official.

 

 

You can find Epic's response to the State Auditor during actual “audit” at this link. Look on the left upper corner and find the page number text box to quickly go down to the correct page shown below. The best way to follow this is to go down to the bottom of page 34 on the Epic response to the State Auditor and read upward to page 25 so you read the emails in order they were sent. But here is the meat of the email exchange :

 

 

From: Lisa Giles [mailto:Lisa.Giles@trs.ok.gov] Sent: Tuesday, May 14, 2013 4:52 PMTo: Josh Brock

Subject: RE: Question about Merit-Based Pay

 

Ok. Do not pay Teachers Retirement Contributions for this bonus.

 

 

 

And later, these responses:

 

From: Josh Brock [mailto:josh.brock@epiccharterschools.org] Sent: Tuesday, May 14, 2013 4:55 PM

 

To: Lisa Giles Subject: RE: Question about Merit-Based Pay

 

And , it would not count toward the earnings limit or would it for our teachers if they were recently retired?

 

 

 

 

From: Lisa Giles [mailto:Lisa.Giles@trs.ok.gov] Sent: Tuesday, May 14, 2013 4:56 PM

 

To: Josh Brock Subject: RE: Question about Merit-Based Pay

 

Yes. I’m afraid it does count towards earnings limits. Only Insurance has been exempted from earnings limits.

 

 

Around the top of page 29 you see a series of emails from around 2014 that cover the annual audits that TRS did on Epic and the reiteration that bonus payments do not count toward retirement payroll. The issue was settled between TRS and Epic at that point.

 

Then on August 5^th 2020, before the “audit” was final you will see the email chain was sent to the State Auditors office and confirmed by the individual auditors doing the audit.

 

 

 

In short, Byrd knew there was no controversy between the TRS and Epic. Byrd and her auditors LIED about the TRS controversy on payroll discrepancies. Byrd and her auditors LIED again in the very closing sentence stating that they had informed Epic of this issue on August 18^th 2020 and that Epic had not provided any more information. See the last text line in the screen shot below. 

 

We can clearly see the mail marked August 5^th proving they had received the email chain that proved there were no TRS payroll discrepancies. Why would Bryd and her auditors lie about such an easily proven fact?

 

 

 

 [ chapter 5 of our 8-part special investigation of the state auditor will be released tonight at midnight ]