Budget & Tax, Education

Hofmeister backs down, agrees to greater transparency

July 25, 2022

Ray Carter

Oklahoma Secretary of Education Ryan Walters has prevailed in a face-off with State Superintendent of Public Instruction Joy Hofmeister regarding millions of dollars in state spending with Hofmeister belatedly agreeing to provide more transparency.

Email records show the Oklahoma State Department of Education (OSDE) sought to have millions in spending approved while providing little or no transparency about an associated contract until Walters held up the funding.

Walters issued a statement welcoming Hofmeister’s about-face on the issue.

“I will never back down from ensuring tax dollars are transparent even when government bureaucracy hides behind their fear of sunlight,” Walters said.

The face-off began in late June when the Oklahoma State Department of Education submitted several spending requests for Walters’ approval. As Secretary of Education, one of Walters’ duties is to review and sign-off on agency spending that exceeds a certain threshold.

In a June 30 email sent to Tom Bogdanowicz, chief of operations for the Oklahoma State Department of Education, Walters expressed concern about the volume of last-minute spending requests submitted by OSDE that the agency said needed approval in a matter of days, along with a lack of information about some expenditures, particularly a multi-million-dollar project in Tulsa.

“I need justification as to why I have received multiple requests in the last 48 hours that are deemed ‘urgent,’” Walters wrote. “Which items do you claim to need to be approved by June 30th and why is that the timeline? The State Department of Education is currently under an audit by the State Auditor and is waiting till the last minute to send items to my desk for my approval giving me very little time to review.”

Walters continued, “The State Department should be doing all they can to be providing transparency in the spending of taxpayer dollars and I will not be approving items that I have not been given ample time to review and proper justification.”

Of particular concern was the OSDE’s request to immediately approve a roughly $12 million contract described only as providing “an early childhood program to serve at-risk children” in the Tulsa area.

Walters declined to approve funding for the contract without a more thorough vetting.

Bogdanowicz responded in an email sent to Walters on July 14, writing that the Tulsa contract would be “monitored by the Deputy Superintendent of Curriculum and Instruction and the Executive Director of Early Childhood, who will ensure that the deliverables outlined in the contract are met and in accordance with the timeline.”

He also wrote that OSDE would “provide technical support to the vendor” with the vendor required to provide quarterly updates and a “comprehensive annual report” that included funding and budget information, participant enrollment data, classroom evaluation measures, technical assistance and training offered to early childhood providers, professional development opportunities for staff, and family support provided.

Bogdanowicz wrote that the OSDE Deputy Superintendent of Curriculum and Instruction and the Executive Director of Early Childhood would review monthly invoices.

On July 15, Walters emailed OSDE to request copies “of all documentation by Tulsa Public Schools on this contract as it moves forward.”

“There needs to be accountability measures put in place to ensure TPS is acting according to the contract,” Walters wrote. “Since OKSDE and Tulsa Public Schools are under an audit by the State Auditor due to financial concerns I will not agree to any budget expenditure unless you can provide clear explanation as to how funds will be accounted for.”

Walters sent a follow-up email to OSDE on July 20, writing, “Circling back on this. In an attempt to provide more transparency and accountability for taxpayer dollars I am asking that OKSDE agree to provide me the reports from Tulsa Public Schools for the FY-23 Agreement w(ith) Community Action Project of Tulsa County (CAP Tulsa) as they are produced. This item is awaiting approval by me until OKSDE agrees to make these assurances toward transparency around taxpayer dollars.

“Will OKSDE be providing me these reports as the(y) come in from TPS?” Walters concluded.

A day later, on July 21, Hofmeister sent a response to Walters—not by email, but through a press release that attacked Walters and Gov. Kevin Stitt.

“Secretary Walters’ refusal to approve this expenditure, which is required by law, received an appropriated line item and has been in state statute since 2006, is worse than irresponsible,” Hofmeister said. “His gamesmanship bullies infants and children, but it is not surprising. This is a pattern of Gov. Stitt’s administration when they don’t get their way or need to distract from their own financial scandals.”

But a day after Hofmeister issued her release, OSDE responded to Walters’ request for greater transparency.

On Friday, July 22, Bogdanowicz sent Walters an email with the annual report for the Oklahoma Early Childhood Program (OECP) attached and added, “Should you so desire, OSDE will seek and provide you with the quarterly report relating to this program and the requisition … that attempts to facilitate it.”

Walter responded the following Monday, July 25, writing, “Yes my request was to receive those reports going forward.”

“Why was this not the response a week ago when I asked the question?” Walters wrote. “Was it your decision to send out a political press release full of misinformation or was that just Supt Hofmeister? Should I start communicating directly with her communications department through press releases or will you be responding to my emails when I have questions?”

Longstanding Questions Abound About Hofmeister’s Financial Oversight at OSDE

Hofmeister has increasingly butted heads with other state officials since she switched parties to become a Democrat in 2021, but questions about financial oversight at OSDE precede her decision to formally change her party registration.

Hofmeister’s stances on financial oversight have also appeared self-contradictory at times.

During the June meeting of the Oklahoma State Board of Career and Technology Education, Hofmeister suggested competitive-bidding requirements had been evaded for a program supported by Gov. Kevin Stitt. Within days, Lee Denney, interim state director of Oklahoma CareerTech, informed officials that the issue had been reviewed and no competitive-bidding laws had been violated.

Even so, Hofmeister voted to oppose funding the Jobs for America’s Graduates (JAG) program at the Oklahoma State Board of Career and Technology Education’s July meeting. Although a majority of board members present voted in favor of funding the program, state law requires that a majority of all board members (five of nine) support a measure for it to pass. Because some other board members were absent, Hofmeister was able to kill funding for the dropout-prevention program despite only two votes being cast in opposition.

Hofmeister’s opposition to funding the roughly $433,000 JAG program occurred even as her agency was seeking rapid approval of the far-larger $12 million Tulsa grant while slow-playing Walters’ request for routine reporting.

A state audit has already suggested that Hofmeister’s agency is lax in performing its financial oversight duties.

A 2020 state audit of Epic Charter Schools said that the OSDE typically “accepted at face value” any data reported to the agency by school districts “without on-site follow-up,” and that in some instances “a process to verify the accuracy of the reported information did not exist” at the Oklahoma State Department of Education.

The audit said the Oklahoma State Department of Education had “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].

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, also said an unidentified official at OSDE ordered staff to accept what the Epic audit concluded were improperly classified administrative-spending reports.

Holt said auditors could not get a straight answer from OSDE officials as to who gave that order.

“We interviewed the three individuals that were involved in that decision,” Holt said. “As we understood it, honestly, we got three different answers.”

In an October 2020 legislative hearing, Hofmeister dismissed the state auditor’s findings, telling lawmakers, “Actually, I don’t believe there was an order.”

At that October 2020 hearing, Oklahoma State Auditor & Inspector Cindy Byrd warned lawmakers that the issue raised in the Epic audit “could potentially be a problem in all public schools.”

By Nov. 11, 2020, a group of 22 state legislators issued a joint release calling for a state 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 September 2021, Gov. Kevin Stitt requested a full audit of the Oklahoma State Department of Education, saying that “students and parents deserve to know that their schools are spending our tax dollars appropriately and in accordance with the law.”

Byrd noted at the time that such an audit “has never been conducted in the history of Oklahoma and, perhaps, the nation.”

That audit is still underway.

In the meantime, Walters said Oklahomans should welcome greater financial transparency at OSDE, even if it is provided circuitously.

“I’ve appreciated having the public discussion through the press with Joy Hofmeister regarding transparency and accountability of taxpayer dollars,” Walters said. “With the help of Hofmeister’s communication office, she’s now sending me the information I requested several weeks ago.”