Education

Governor requests full audit of education agency

September 16, 2021

Ray Carter

Gov. Kevin Stitt has requested that the Oklahoma Auditor and Inspector’s Office conduct a full audit of the Oklahoma State Department of Education (OSDE).

“I promised Oklahomans that as governor I would clean up state government to make it more transparent and accountable and I am keeping that promise,” Stitt said. “As we make record investments in our public education system, students and parents deserve to know that their schools are spending our tax dollars appropriately and in accordance with the law.”

Officials said the audit will be the most comprehensive review ever conducted of the Oklahoma State Department of Education.

“This type of audit has never been conducted in the history of Oklahoma and, perhaps, the nation,” said State Auditor Cindy Byrd. “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.”

Nearly two dozen state lawmakers previously requested an OSDE audit after a separate state audit of Epic Charter Schools highlighted several problems with the OSDE’s financial oversight.

The state audit of Epic said the financial review processes of the state department of education (referenced as “SDE” in the report) amounted to little more than paperwork and noted the “data is self-certified by the school and accepted at face value by SDE without on-site follow-up.”

The audit also said the Oklahoma State Department of Education took at “face value” reports regarding the hours worked by teachers, and in at least two reporting areas “a process to verify the accuracy of the reported information did not exist” at OSDE.

The audit said the Oklahoma State Department of Education has “no process in place to evaluate actual compliance with the written policies and procedures, or with applicable laws, statutes, or Administrative Rules” that govern the use of funds [emphasis in original].

Most notably, auditors said OSDE officials ordered acceptance of improperly coded reports to the Oklahoma Cost Accounting System (OCAS), which is administered by OSDE to ensure state funds are spent appropriately by public schools.

In a 2020 appearance before the Oklahoma Statewide Virtual Charter School Board, Brenda Holt, audit manager for the Special Investigative Unit of the state auditor’s office, told officials that OSDE staff were ordered to accept a report staff believed was not valid.

“According to the state department director of OCAS, she did not willingly do that,” Holt said. “She was directed to do that.”

When asked who gave the order to accept the report, Holt indicated officials at the Oklahoma State Department of Education did not provide a straight answer.

“We do not have an exact answer to that,” Holt said. “We interviewed the three individuals that were involved in that decision. As we understood it, honestly, we got three different answers.”

Oklahoma Superintendent of Public Instruction Joy Hofmeister, who is head of OSDE, later flatly disputed the state auditor’s findings during an October 2020 legislative hearing.

“Actually, I don’t believe there was an order,” Hofmeister said.

A few weeks after the meeting with Hofmeister, 22 legislators asked Stitt to request a full investigative audit of the Oklahoma State Department of Education.

“If SDE did in fact routinely fail to perform its regulatory duties, this could result in the discovery of hundreds of millions of dollars of misused funds,” the lawmakers said in a joint statement. “It is the duty of the Legislature to protect taxpayer dollars, and as such we are respectfully requesting that Governor Stitt task the State Auditor and Inspector’s office to conduct an investigative audit of the State Department of Education to determine the full extent and impact of its potential failure to ensure compliance.”

Stitt’s audit request demands identification of all revenue sources flowing into OSDE through federal funds, state appropriations, taxes and fees, and to determine whether OSDE and Oklahoma school districts are complying with financial transaction reporting requirements.

The audit comes as more than $3 billion will be invested in education in FY2022, the largest amount ever in Oklahoma history.

Secretary of Education Ryan Walters voiced his support for the audit request to ensure state resources are being used to provide maximum support for teachers and classrooms.

“Oklahoma’s students deserve the best education and this audit will ensure that we are investing in the right priorities to better serve our kids,” Walters said. “I appreciate Governor Stitt and the legislators who requested this audit for their commitment to protecting taxpayer resources and delivering transparency to parents for the first time.”

Hofmeister issued a statement in response to the audit request, declaring, “The governor’s call for an audit is yet another attack on Oklahoma’s public education system.”

That drew a swift rebuke from one of the lawmakers who requested the audit in late 2020.

“With a historic $3.1 billion investment in public education by the Legislature, in addition to over $2 billion in new federal aid, it is more important now than ever that Oklahoma taxpayers know our education dollars are going toward the classroom where they belong,” said Rep. Chad Caldwell, R-Enid. “I was disappointed to hear Superintendent Hofmeister call financial accountability and transparency an attack on public education, especially after the concerns raised publicly by Oklahoma’s auditor.”

NOTE: This story has been updated since it was first posted to include responses from Hofmeister and Caldwell.