Torn Apart One Section at a Time
Three weeks ago we published Part II of the expose on Lying Cindy Byrd and her “audit” of the Epic Charter School. The attempt to steal the election came up and we focused on national issues but now it is time to get back to breaking down the lies used by the State Auditor Office.
The first huge lie was about the teacher retirement system payments and we included the actual emails proving exactly how Epic was instructed to report retirement pay to the system and exactly how to calculate the money owed to the retirement fund.
The second huge lie was Chapter 5 on the learning fund and how it was calculated. Again, we provided the actual contract pages and LEA forms where Epic had actually circled the numbers that were REQUIRED to be used by charter schools by the SDE and the State Charter School Board.
The third huge lie was over the Accountability and Oversight section of her “audit”, where it was shown that the State Department of Education, the State Virtual Charter School Board, Rose State College, Epic itself, and the Communities Strategies school board were all doing audits, SDE had done over 60 reviews in the past three years alone.
The third lie was over the Oklahoma Cost Accounting System and how Byrd's office ignored existing law and focused on criticizing how the State Department of Education (SDE) asked Epic to handle the bookkeeping.
This week we are going over Chapter 4 of the “audit”, the Allocated Dues and Fees.
The categories below are from Lying Cindy's own “audit” and the three already addressed are in green type. The one we will cover in this issue is in blue type.
Chapter 1 Accountability and Oversight
Chapter 2 Oklahoma Cost Accounting System
Chapter 3 Payroll
Chapter 4 Allocated Dues and Fees
Chapter 5 Student Learning Fund
Chapter 6 Community Strategies-CA, LLC
Chapter 7 Audits and Reviews
Chapter 8 Other Issues
Here is a link to the SAI, State Auditor and Inspector “audit”. Scroll down to page 43 through 52 for the discussion of Chapter 4, Allocated Dues and Fees. Those are the actual page numbers, not the PDF page numbers which start counting at the introduction.
The entirety of the “audit” finding on Chapter 4 boils down to Epic One on One serving as a contractor to the Blended Learning Center. There were two reasons, first the full time teachers wouldn't have enough hours working just for one entity to qualify for state benefits like insurance and retirement. Second, running all the payroll in one batch made for a cheaper and more efficient payroll processing, saving money for the school. Each payroll was kept separate in the books, as were the rest of the expenses that were contracted for. Lying Cindy's bitching is about there not being inter-company agreements in place.
Much is made of the Charter School contract requirements which specifically mention not to counter mingle funds but both entities are charter schools and the expenses are kept separately although the invoicing and collection from the Blended Learning Center was done as needed. Pretty much an open account like all businesses run with customers. Not a dime was diverted to outside businesses or people, all the money was spent operating the two schools.
In Section 2 a finding was made that Epic had increased one invoice by $6 million dollars to catch up the payments from Blended Learning Center to Epic. Lying Cindy Byrd claims this was done without board approval yet Epic and Blended have a Charter School Operating Agreement which authorizes money to be transferred as needed to pay the open account on payroll and other operating expenses. This is normal day to day business, pre negotiated and under contract, hardly something that needs board approval. Management is responsible for day to day operations, boards are responsible for long term planning and over sight. Miss Lying Cindy who never held a real job doesn't understand how the majority of businesses in the world operate.
The next finding was a temporary load of around $1.3 million dollars between Blended and Epic, paid back two and three weeks later. Was it actually a loan or was it advance payment before a complete invoice was generated for the previous calendar year? If the two entities have a business relationship and an open account this would be more of a pay down of a large accounts payable.
Epic's Response
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.
Go down to the middle of page 7 where Epic's response on the Allocated Dues and Fees starts. The section stops on page 8, right above the heading “Student Learning Fund”.
Despite Epic's request that Byrd state exactly which state law or regulation prohibited allocating expenses or requiring an inter-company agreement Byrd was unable or unwilling to do so. Some expenses are shared, this makes sense, as an example why would you lease one expensive payroll service for both schools when Epic can run the payroll for both and have just one lease payment? The two schools pro rated the expense between the schools using their average daily attendance numbers. Likewise the cost of the Human Resource department was shared and paid pro rated with zero additional cost to the state. This resulted in lower overhead costs for both schools and more money going into the classrooms.
The second “finding” was about the transfer of money not being authorized by the two school boards. But the school's contracts with EYI specifically state that money can be transferred without board approval although EYI would put the matter before the board shortly thereafter and the transfers were approved. Lying Cindy's opinion on this matter has zero basis in fact and indeed it is contrary to the signed and SDE approved contracts between EYI, Epic One on One, and the Blended Learning Center.
As we have seen in the previous stories that you can go back and read at this link, the State Auditor Office has complained about things that are governed by contract between the schools or about things that have no basis in any law or regulation. In Lying Cindy's opinion there are problems but under the laws of Oklahoma there are none.
We still have three small parts of the “audit” to cover in upcoming newsletters. But the legislators have seen enough; last week they petitioned Governor Stitt and Stitt issued a call for an audit of the State Department of Education. Twenty two legislators, many of whom are charter school supporters signed the petition. Of course the Oklahoman and the Tulsa World have spun the facts but it is quite simple; if Epic was following the SDE rules and regulations as instructed by experts at the SDE, why would Epic be at fault for doing as they were ordered to do by the regulating agency?
Another point is that now all schools are going to be scrutinized under the same microscope on these issues and we are surely going to learn that the entire “audit” winds up to be a simple hatchet attack by Lying Cindy to pay back campaign donations to the teachers and their unions.
Even more telling was Stitt dismissing the State Virtual Charter School Board president, one John Harrington. Harrington was trying to intimidate and bully two other board members, claiming they were “Epic supporters”. The other two members are appointed by the House and Senate and had been targeted by Harrington for their support of Epic. Which is a bit strange that a government agency designed to support charter schools not support one specific school. Harrington was demanding they they recuse themselves from future votes on Epic matters, leaving his vote being a stronger factor in his efforts to pillory Epic. Instead Harrington found himself dismissed a few days later and escorted from the building after being fired by Governor Stitt.
So some sanity is coming into the process. The “audit” is now itself becoming more of a scandal than the one Lying Cindy tried to create against Epic. The worst instigator at the virtual charter school board has been sent packing, and 22 legislators have banded together to start finding out why a charter school is being attacked for following SDE instructions.
