Epic’s New Board Chair Founded a Charter School. Its Start Has Been Rocky
To improve its board's oversight, the state's largest online school turned to a businessman who founded the state's first rural charter school.
Paul Campbell was named chairman of Epic Charter Schools' governing board, Community Strategy, on May 26, as part of the school's response to a critical investigative audit and a report by a multicount grand jury calling for greater accountability from the public. was requested.
Campbell, chief executive officer of Spartan Energy Services, also chairs the board of The Academy of Seminoles, giving him the unusual position of simultaneously supervising two school systems at once. Seminole Academy is a preparatory college school with 300 students; Epic Charter enrolled nearly 55,000 students last year and received more state funding than any other school.
Campbell replaces Doug Scott, a Tulsa attorney who has known Epic co-founders David Chaney and Ben Harris since childhood. Scott served on the board since his first year of school in 2011.
This completes a full board business. None of the members who served during the years examined by the state auditor and inspector remain.
New board members add to the increased scrutiny times. Auditors were highly critical of Epic's lax oversight of the board on Epic Youth Services, the company that managed the school and collected millions of dollars for the school's co-founders, Chaney and Harris. The Grand Jury Report called the entities' relationship "incestuous" and "ripe for fraud".
In his first act as chairman of the board, Campbell and the board severed all ties with the company.
In a termination agreement, Epic Youth Services agreed to hand over control of the school by June 30 – including the Learning Fund, a separate one used by each family to pay for chosen extra-curricular activities and educational items. Account. The school agreed to pay the company for the remaining tuition fund orders, including the school's fine of approximately $10.9 million from the state Department of Education.
"It's a big day for Epic Charter Schools and a big change in our strategy," Campbell said, noting that the change will save the school millions of dollars and improve its technology.
In harnessing Campbell, Epic is depicting his experience in the Seminoles. Seminole Academy just completed its third school year and celebrated its first graduating class; 17 received diplomas, and more than half have earned or are on track to complete their associate's degrees this year, school superintendent Wren Hawthorne said.
But the school's financial picture hasn't lived up to the expectations set in 2017, when it became the first charter school sponsored by a state education board after its proposal was twice rejected by the Seminole Public School Board.
Like a typical charter school proposal, the plan was to marry public and private funds to operate the school. According to a story in The Hechinger Report, the Academy of Seminoles received $600,000 in federal start-up money and $325,000 from the Walton Family Foundation.
Additional funding was to come from Campbell's, Advanced Rural Education, a non-profit formed in 2016 to supplement the school's state aid. At the time, Campbell was CEO of Seminole-based aerospace company Enviro Systems.
The school's proposal to the State Board of Education included $1 million over three years from Advance Rural Education, but the nonprofit only raised a total of $145,000 between 2016 and 2019. Almost all were in 2017 with $100,000 from a single contributor, records show.
"The finances got so bad last year," said Sheldon McCoy, who was on the Seminole board's academy, when the school took out a $400,000 "non-payable warrant," the same as a loan.
"When I left the school board I was in deep fear that I would have to do it again and I didn't want to put my name on it," McCoy said.
Records show that the school had several times transferred money from the activity fund to cover general expenses. It's not unusual for schools to cover expenses with fund transfers or non-payable warrants, said Sean Snow, executive director of the Oklahoma State School Boards Association, especially when they expect money through property tax payments or reimbursement from the federal government. We do.
Last year, the academy qualified for $226,900 through the Paycheck Protection Program, a federal COVID-19 relief effort to help companies cover payroll during the pandemic. Funds start out as loans but are forgiven in most cases.
Campbell said that once the Paycheck Protection Program's debt is forgiven, the school will be debt-free. "It's pretty incredible for a school only in its third year," he said, adding that he sees the school's finances as "a success story."
However, McCoy attributes some financial issues to the school's efforts to grow too quickly.
Student development is another area where the school has deviated from its original proposition. Like most new charter schools, Seminole Academy was expected to gradually add grades.
It proposed serving only juniors and seniors in its first year and adding a few grades each year until reaching Pre-K through grade 12 in its fourth year.
State education department data shows that the school enrolled 29 juniors and seniors as planned in 2018. For the second year, the school opened all grades and enrolled 283 students – 10 times more students than the year before.
"It was almost frightening to think about how much we were getting older," said Academy of Seminoles board member Dillon Robinson. He said the school was responding to a demand from the community to open more quickly, and with it came an additional cost.
Robinson didn't worry about bank loans or fund transfers. "We knew we were going to see the light at the end of the tunnel," he said.
The school's founders proposed locating the high school on the Seminole State College campus as part of an emphasis on earning college credit for those students. That arrangement lasted only one year. The school is now housed in a former National Guard building. But the emphasis on concurrent enrollment continues.
Campbell explained that the loan was needed for the school's development, which was paid in full after state aid was adjusted mid-year. "It was all done transparently and with the approval of our board, our school accountants and in an open meeting," he said.
Campbell says he will push for greater transparency at Epic in his new role. "It sounds like a tough job and I definitely feel for it," he said after naming the chair.