A newly issued federal audit is highly critical of Gov. Kevin Stitt’s administration’s handling of $31 million intended to provide emergency pandemic relief for Oklahomans’ educational needs.
The first of two rounds of Governor’s Emergency Education Relief Funds, spent between March 2020 and August 2021, are the subject of a new audit report issued this week by the U.S. Department of Education’s Office of Inspector General.
The audit covers a total of $39.9 million in GEER funds, including $8 million administered by the Oklahoma State Department of Education. The audit says the money handled by that department seems to have been administered properly.
Ultimately, Oklahoma may be forced to repay about $653,000 that auditors said was misspent by families on noneducational items such as televisions, washers and dryers, air conditioners and Christmas trees. The report further recommends a 100% review of an additional $5.4 million spent through the “Bridge the Gap” program and that the state repay the federal government for any additional unallowable purchases found.
People are also reading…
Bridge the Gap was largely overseen by Oklahoma Secretary of Education and state superintendent candidate Ryan Walters, both in his official capacity and as executive director of the non-profit Every Kid Counts Oklahoma.
Walters has blamed problems with the program on a vendor, ClassWallet.
“The state has received the report and is reviewing it,” said Kate Vesper, a spokeswoman for the Governor’s Office. “Collaboration with OIG (the Office of Inspector General) will continue.”
Stitt is in the United Kingdom attending the Farnborough Air Show, long a regular fixture for Oklahoma governors.
“The governor is committed to transparency and accountability in state government and has called for more audits than any other governor in our state’s history,” Vesper said. “The state has been proactive in monitoring and ensuring appropriate use of Oklahoma taxpayer dollars, and an internal audit (of GEER funds) was initiated several months ago.”
The report could not have been much of a surprise to the administration. It received a preliminary version this spring, and the final draft that was released late Tuesday includes a five-page response, dated May 13, signed by Oklahoma Chief Operating Officer Steven Harpe.
In it, Harpe says “corrective actions” are underway, and he reminds the auditors that the state was trying to disburse funds while dealing with “coronavirus and the unprecedented global health crisis to which it gave rise.”
The report states that Oklahoma initially returned $919,354 of its $39.9 million GEER grant award for the initial round of awards in February 2021 because the funds were not used by the grant’s deadline.
The report says a total of $1.7 million was ultimately turned back to the federal government.
It calls for a host of other “next steps” and corrective actions that could cost the state more time and money.
The auditors wrote, “Oklahoma provided us with documentation for some of the corrective actions that it stated it had implemented.”
However, the state’s proposed corrective actions were found not to be fully responsive to the recommendations, and none of the federal audit findings changed as a result of the administration’s response to the preliminary draft.
In general, the Office of Inspector General found that the administration “could not support its stated processes for awarding funds” totaling $31 million in the way GEER grant funds were intended.
The funds were to be used for “those most significantly impacted by the coronavirus or deemed essential for carrying out emergency educational services, providing childcare and early childhood education, providing social and emotional support, or protecting education-related jobs.”
Conversely, the OIG report states that the $8 million in GEER funds allocated to the state Department of Education was used appropriately to support local school districts most significantly impacted by the coronavirus.
The report comes a week after Stitt and Walters called for a state audit of Tulsa Public Schools because of a self-reported potential misuse of donated money the district says amounts to less than $20,000.
It also comes amid plans for a state audit of the Oklahoma State Department of Education requested by Stitt.
State Superintendent and gubernatorial candidate Joy Hofmeister blasted Stitt, saying, “Gov. Stitt weaponizes audits to distract from his administration’s own self-dealing, incompetence and arrogant disregard for the law. This federal audit speaks for itself.”
The $31 million in GEER grant funds whose management is criticized in the audit was divided among three entities for four initiatives:
$18 million to the Oklahoma Office of Educational Quality and Accountability for an $8 million initiative called “Bridge the Gap Digital Wallet,” which was to provide up to 5,000 low-income Oklahoma families with $1,500 grants to purchase materials for students ahead of the 2020-21 school year, and a $10 million private school voucher program for low-income students called the “Stay in School Fund.”
$12 million to the Statewide Virtual Charter School Board for the “Learn Anywhere Oklahoma” initiative to provide statewide access to digital content for both core classes and advanced coursework to students in kindergarten through grade 12.
$1 million to Tri-County Tech for the Skills to Rebuild initiative, which paid for tuition for fast-track coursework for 375 students in training programs for in-demand jobs such as those in health care. Tri-County Tech serves students in Washington, Nowata, and Osage counties.
For Bridge the Gap Digital Wallet, Oklahoma leaders awarded a no-bid contract to a Florida company called ClassWallet to administer the program and send out grants to families.
The audit states that Walters declined to use a control that ClassWallet offered that would have limited the items available for purchase to only those it had preapproved as education-related.
The report says Walters told auditors he did not use the control option because it would have limited families’ choices of retailers.
“The decision to not take advantage of the digital wallet system’s pre-approved purchases option resulted in grant recipients (families) using Bridge the Gap GEER grant funds to purchase items that were not education-related,” the report states.
The report also notes that while Walters was not secretary of education when the program launched and the contract for administering it was signed, he was involved in the process as executive director of Every Kid Counts Oklahoma, a position he still holds.
The auditors did not buy Walters’ and the Stitt administration’s assertion that ClassWallet is to blame for any failures.
“Oklahoma’s statement that any deficiencies relating to the Bridge the Gap initiative are wholly attributable to ClassWallet is not in line with Federal laws and regulations that require Oklahoma, as the recipient of the GEER grant funds, to ensure that its grant funds are used properly,” the report says.
The purpose of Stay in School private school vouchers was to offer up to $6,500 for low-income families of nonprofit private school students who had faced hardship or changes in income because of the coronavirus pandemic.
A press release from the Governor’s Office in January praised the program for having “exceeded expectations,” with 1,893 children receiving private school tuition assistance at an average cost of $5,132 each.
But when federal inspectors checked a small sample of 10 of those students, they were unable to find eligibility documentation for eight of those 10. The report does not say the recipients weren’t eligible, only that the contractor did not maintain records verifying eligibility.
The Office of Inspector General recommends that Oklahoma review 100% of the Stay in School recipients to confirm eligibility for the private school vouchers.
Additionally, the OIG has called for Oklahoma to return any unspent GEER funds currently held by grant “subrecipients” and “develop and implement policies requiring fiscal agents for federally funded grant programs (to be) aware of and understand the rules and regulations for the grant programs they’re overseeing.”
The report also states: “OIG recommends authorizing the (U.S.) Assistant Secretary for the Office of Elementary & Secondary Education to take additional action if the state does not provide documentation or answers that show it followed all requirements.”
Stitt’s office continued to blame contractors.
“It has been made apparent through demand letters that if it is determined that a vendor failed to ensure funds were properly utilized or that any individual misused funds received for educational purposes, the state will take swift and appropriate action,” Vesper said.
Randy Krehbiel contributed to this story.
Featured video: Majority of Oklahomans not taking advantage of internet discount offered by federal government