Virtual charter financial transparency bill heads to Governor

The Senate unanimously approved House Bill 1395 Wednesday to improve the financial transparency and accountability of Oklahoma’s five public virtual charter schools. Sen. Dewayne Pemberton (R-Muskogee) and Rep. Sheila Dills (R-Tulsa) are the authors of the bill, which will subject virtual charter schools to same financial reporting requirements, financial audits, audit procedures and audit requirements as traditional public school districts.

“Our state’s virtual charter schools are extremely popular and are providing a crucial service for those students who can’t succeed in a traditional learning environment. However, being that these schools receive millions in both state and federal funds, it’s crucial that taxpayers know how their money is being spent,” Pemberton said. “Currently, as just one example, laptops and other items are being purchased for virtual charter students but there are no records as to who has that school property and if the student recipients are even still enrolled. All of our schools need to be good stewards of taxpayer dollars. This will level the playing field so that all of our public schools, whether traditional or virtual, are being financially transparent and accountable to taxpayers."

Pemberton explained that each for-profit state virtual charter school is managed by an Educational Management Organization (EMO), which receives a fee of 8-15% of profits. The EMO’s are Limited Liability Companies (LLCs) and currently do not have to follow the State Department of Education’s (SDE) cost accounting rules under the Oklahoma Cost Accounting System (OCAS), which left around $18 million in state funds unaccounted for in 2018 and that number is growing quickly. The measure requires virtual charters to use OCAS.

HB 1395 will also allow SDE and the State Auditor to conduct financial, program and compliance audits of virtual charters.

Virtual charter schools will be required to start following the same conflict of interest statutes as traditional public schools. Virtual governing boards will also be required to complete the same training as traditional public school board members do, which is 12 hours of classes in the first 15 months in office.

Finally, HB 1395 will put virtual charters and brick and mortar charters under the same statutory teacher contract requirements as traditional public schools. Pemberton noted this is necessary to keep virtual charters from luring traditional public school teachers away while they are under contract with a school district.

The next stop for HB 1395 is the Governor’s desk.