It becomes very convoluted and complicated to track Oklahoma tax dollars through the maze of virtual charter schools "expenditure reports", unless one has a thorough knowledge of the Oklahoma Cost Accounting System (OCAS). All Oklahoma public schools must utilize OCAS in coding revenue and expeditures as they report their budgeting. Expenditure dimensions include the Fiscal Year (FY), Fund (General, Building, Activity, Bond, etc..), Project, Function (Instruction, General Administration, Operation of building services, etc..), Object (salaries, staff travel, electricity, textbooks, etc..), Program, Subject (Art, business, math, language arts, etc..), Job Classification, and Operational Unit (elementary school, high school, etc..). Numbers are assigned for each "expenditure dimension" such as FY 19, Function XXXX - 2300 or 2500 for General Administrative functions, Function 1000 for Instructional functions. For Object dimensions XXX, 320 is assigned for "Professional Education - Services. We will focus on the Function XXXX and Object XXX dimensions for the purpose of tracking virtual tax dollars through OCAS coding.
For Administrative Services 2300, Object 320 (salaries, etc...) for the 2014-2015 school year, Epic spent $2,243,165 which amounted to 15.4% of total expenditures. For Instructional Services 1000, Object 320, Epic spent $3,379,498 in '14-'15. Nothing extraordinary about '14-'15 Epic expenditure coding, except it exceeded the allowable administrative limit (5%) by 10.4 percentage points.
During the 2015-2016 school year, Epic spent $0 in Administrative Services, Object 320, which amounted to only 3.4% of total expenditures when combined with other administrative costs. It spent $5,958,269 for Instructional Services, Object 320. It appears as if the $2,243,165 for administrative expenses in '14-'15 was combined with the $3,379,498 for Instructional costs, for the partial total of $5,958,269 for Instruction in 2015-2016.
As we examine the 2016-2017 expenditures for Epic, 2300 Administrative/320 Object is still at $0 dollars spent, while 1000 Instruction/320 Object has ballooned to $8,903,954. It appears as if Epic has found a way to code the CEO's salary to Instruction without raising suspicions. Administrative costs, with the newly found coding loophole, remain low.. at 3.2% of total expenditures.
The 2017-2018 school year found Epic to have coded $0 again to 2300/320, and only $752,128 to 1000/320. The $8.9 million spent for Instruction in '16-'17 mysteriously was coded to Administration in '17-'18, expanding Administrative costs to 8.1% of total expenditures. This 8.1% figure, once again exceeds the allowable limit of 5%. A 3.1% ($1.5 million) penalty should result from Epic's administrative overage, but it's a pretty sure bet that Epic won't be penalized by the State Department of Education, as Epic donated more than $30,000 to the current State Superintendent's election campaigns.
Beginning in '17-'18, the Epic Virtual Pyramid (EVP) started another school: Epic Blended Learning Center (EBLC), located at 4101 NW 122nd St. in Oklahoma City - the same address as its companion Epic One Virtual Charter (EOVC). For the 2017-2018 school year, EBLC coded $91,976 to Function 2300 (Administrative)/Object 320 (Professional Education Services), and $488,750 to Function 1000 (Instruction)/Object 320. It's administrative expenses were only 1.1% of total expenditures, less than any traditional public school in Oklahoma. The addition of this new Epic school has muddled "following the taxpayer dollar" even more.
Function 2300/Job Class 110
The Epic superintendent salary is coded the same way that all public school superintendent salaries are coded - Function 2300, Job 110. If we follow the money: In '14-'15, the Epic superintendent earned $207,056; '15-'16, $187,670; '16-'17, $372,935; and '17-'18, $100,000. The question that arises is not why the Epic superintendent earned over $370,000 in '16-'17, but why did the superintendent earn only $100,000 in '17-'18. Even when the Job 110 for EBLC ($60,000) is added to Job 110 for EOVC ($100,000), the total Job 110 salary is only $160,000.
While Epic's private management company CEO salary is unknown, it is probably between $5 and $10 million - a portion or all being paid by Oklahoma tax-payers. It is certainly understandable that Ben Harris personally donated more than $100,000 to elected official campaigns, but not so for David Chaney.
The Epic profitable non-profit CEO reported that all Epic campaign donations (more than $150,000 in '17-'18) originated in private accounts. In other words, Epic school officials donated personal funds to elected official campaigns. The next question is: If the Epic school superintendent earned, at most, $160,000 in 2017 - how and why did he donate more than $62,050 in personal funds to elected official campaigns? The answer may be that he didn't... he donated public funds (taxpayer dollars) to more than 100 campaigns... Epic's motto may be To make money, one must invest money, only in this case, it may be investing public money...
More Tracking Complications
It becomes very difficult for anyone not familiar with OCAS to track taxpayer dollars through public schools, especially from year to year. Epic officials are very knowledgeable of this fact, and evidence indicates that Epic has taken advantage of the convoluted nature of OCAS. For instance, Epic Virtual school hired a government relations director (GRD), assistant superintendent in charge of lobbying government officials, at some point between 2014 and 2018. It is unclear when the government relations director was hired because his salary could be coded to Function 2300, Function 2500, or Function 1000... and to Job Class 310 or Object 320. There are six possible combinations of coding using the Function, Job, and Object classifications, but maybe many more when other categories are utilized. In 2014-2015, Epic spent $30,000 for State and Federal Relations Services Function 2330, Object 320 Professional-Education Services. This may have been the GRD salary for 2015. The same year, however, Epic spent $3,379,498 for Instruction Function 1000, Object 320 Professional-Education Services, so it is unclear how the GRD was paid... if he was hired that year.
The changes in coding continued through 2015-2016, 2016-2017, and up until 2017-2018 when the GRD could have been coded: $39,000 to Function 2330, Job 310 or $752,128 to Function 1000, Object 320. It quickly becomes very clear that Epic, through OCAS coding, can hide questionable expenditures in plain sight. It also becomes crystal clear that Epic may be spending public funds instead of personal funds... to lobby lawmakers.
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