Wednesday, Oct. 6, 2021

Charter Management Companies Scrutinized by the Legislature

Epic Charter School co-founders Ben Harris, left, and David Chaney, right, at a school board meeting in 2020. (Whitney Bryen/Epic Text Books)

A legislative committee on Monday spent hours scrutinizing organizations that manage charter schools as lawmakers look to limit the organizations' ability to profit off education tax dollars. The interim study, brought before the House common education committee by state House Rep. Sheila Dills, included presentations by leaders at each of the state's online charter schools (video of the hearing can be found here).

The committee was specifically looking into educational management organizations which are for-profit companies that contract with schools for a fee. Every virtual school in Oklahoma has or had such an organization, and last year's investigative audit of Epic Charter Schools raised troubling issues with the companies.

It was Epic's presentation that raised the most eyebrows. Board Chairman Paul Campbell called the school's co-founders, David Chaney and Ben Harris, “bad actors” and “grifters.” Until July, their company, Epic Youth Services, was collecting 10% of the school's revenue as a management fee. Campbell said “maybe 1%” would have been reasonable for the services they provided.

Epic, the state's largest virtual charter school and likely the largest in the country, cut ties with the founders and their company this summer. Campbell on Monday sought to further distance the school from Chaney and Harris. “We've got to have a divide between those guys and the school because they aren't us. They're bad actors,” he said.

State Auditor & Inspector Cindy Byrd said one big problem is school board members not keeping a close watch on educational management organizations. Another problem is the schools don't have to use competitive bidding.

“Without fair market protections, it is possible to turn a nonprofit into a money-laundering scheme,” Byrd said.

Should Oklahoma law strengthen oversight of educational management organizations, or outlaw them altogether? I'd love to hear from you. As always, email and DMs are open. Have a great week.

— Jennifer Palmer

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