In the wake of Epic Schools misreporting its school administrative costs, Governor Kevin Stitt has requested an investigative audit of the Oklahoma Cost Accounting System (OCAS) at the Oklahoma State Department of Education (OSDE).

“I deeply appreciate Governor Stitt for his confidence in the findings of the Epic Schools audit report released last year,” said State Auditor Cindy Byrd. “It is clear Epic’s founders were able to take millions of dollars by manipulating the schools’ administrative costs reported to OSDE.”

Following the October 1, 2021, release of the Investigative Audit which included both Epic Schools districts, many have questioned if the same issue is occurring in additional public school districts including 22 legislators who wrote Governor Stitt seeking an audit of OSDE. The governor’s request will help the state answer those questions.

The audit has two primary objectives:

Identify all revenue sources flowing into the State Department of Education (SDE), including but not limited to, federal funds, state appropriations, taxes, and fees. Determine if the revenues were properly allocated and expenditures from selected funds were made in accordance with applicable laws.

Determine if SDE and Oklahoma school districts are complying with OCAS financial transaction reporting requirements and that SDE is effectively requiring consistent application and timely accountability.

“This type of audit has never been conducted in the history of Oklahoma and, perhaps, the nation,” Byrd said. “As always, these audits are about transparency and accountability to taxpayers. I commend Governor Stitt for requesting this audit. People want to know how their tax dollars are spent on education.”

Staying within administrative spending limits can create unique challenges for school boards and administrators especially when considering whether to accept certain federal grants that increase administrative costs for compliance with federal regulations.

“In the end, the intended purpose of this audit is to ensure per pupil spending and education funding is making it to the classroom,” Byrd said.

State Superintendent of Public Instruction Joy Hofmeister Friday made the following remarks after Gov. Kevin Stitt announced his audit request of the Oklahoma State Department of Education.

“The Governor’s call for an audit is yet another attack on Oklahoma’s public education system.

As the Governor should already know, the State Department of Education has undergone more than 20 financial, compliance and programmatic review audits by the state auditor’s office in the last 6-1/2 years. Additionally, the Governor’s hand-picked Secretary of Education approves every agency expenditure over $25,000 on a weekly basis. Every single spending request has been personally approved by Secretary Ryan Walters.

At a time during which there are serious audits we have requested which potentially involve criminal activity, and while 541 school districts are struggling to find normalcy during a pandemic, the Governor’s attack on public education couldn’t be worse timing for students, families, teachers and taxpayers.”