Ryan Walters Fails Federal Audit and Oklahoma Families.
Oklahoma State Auditor & Inspector (SAI) Cindy Byrd released the Federal Single Audit of Oklahoma’s 2021 federal pandemic funds.
This scathing audit report reveals the gross incompetence and willful neglect of duty of current State Superintendent, Ryan Walters.
When these programs began in 2021, Walters was serving as the CEO for Every Kid Counts, a school voucher reform group and had been tapped by Governor Stitt to manage the disbursement of the Governor’s Emergency Education Relief Fund (GEER), a pot of flexible federal money intended to give governors the power to fund educational programs during the COVID-19 pandemic. Walters was NOT a state employee when he initially began work on these projects and was later appointed to the role of Secretary of Education by Governor Stitt. This appointment was made several months after Walters began oversee the GEERs programs.
“The State of Oklahoma dropped the ball on compliance and oversight,” Byrd said in a statement on Tuesday. “This was a tangled web of government agencies, non-profit organizations, and non-government individuals representing special interest groups managing millions of tax dollars with no contracts and no written agreements,” Byrd said. “Sadly, millions of tax dollars were misspent because certain individuals who were put in charge on managing these programs seemingly ignored federal grant guidelines.”
$39.9 million was designated for the Governor’s Emergency Education Relief Fund (GEER). GEER was designed for Governors to decide how best to meet the needs of educating students during the pandemic. Oklahoma’s programs were designed to help families facing an economic hardship due to the pandemic and were marketed as being awarded on a first come, first served basis. THIS DID NOT HAPPEN.
The dismal audit findings of State Auditor Byrd prompted Oklahoma Attorney General Gentner Drummond to subsequently request a formal Investigative Audit of the Oklahoma State Department of Education, stating “a number of concerning items from the audit will require further investigation. I refuse to tolerate what amounts to a pervasive culture of waste, mismanagement and apparent fraud.”
“RYAN WALTERS’ GEER FUND NAUGHTY LIST” :
BRIDGE THE GAP PROGRAM - designed to help low-income families purchase education supplies, curriculum, technology, and tutoring for their child to effectively learn at home during COVID. 5,000 families received $1,500 each which they could spend at designated retailers.
Ryan Walters did not place any restrictions or parameters on which items families could purchase. In fact, he personally issued a blanket approval on all items purchased.
$1.7 million was spent on various non-educational items such as kitchen appliances, power tools, furniture, and entertainment.
Independent journalists from Oklahoma Watch and the Frontier released the first investigative report on these findings in May of 2022. You can read more details in their article.
STAY IN SCHOOL PROGRAM (SIS) - designed to help low-income families cover the families’ portion of school tuition in order to keep their child(ren) in their existing private school. 1,500 or more low-income families could qualify for up to $6,500 dollars per student. The audit report indicates private schools were excessively overpaid instead. This money was taken from the low-income families it was intended for, and given mostly to special VIP families who claimed zero financial hardship.
More than HALF the money was given to families who did not meet financial eligibility. $5.3M in awards were provided to 1,073 students whose family attested that they had NOT suffered an economic hardship due to the pandemic.
The audit found a deliberate operation to give 5 selected private schools and select individuals preferential treatment by allowing early access for application submission prior to the date this program was offered to the general public. The five private schools were allowed to hold open houses to get new students in (the money was intended only to KEEP the students in the same school). The open houses were held prior to the "go live" application date for funds.
A special interest group, Libertas Consulting, selected the schools given preferential treatment. Though unnamed in the audit, the president of Libertas Consulting is Jennifer Carter, who is also the senior advisor for American Federation for Children in Oklahoma. AFC is a national group supporting private school vouchers funded by millionaire Betsy Devos. They are well known as an anti-public school organization. Carter is closely linked with another anti-public school group, OCPA (Oklahoma Council for Public Affairs) and is married to Ray Carter, director of OCPA's “Center for Independent Journalism.” According to the audit, Jennifer Carter was named administrator for the Stay in School program without entering into a contract with the State of Oklahoma.
The same day that Governor Stitt announced the $30M Covid Education Plan that included this Stay in School program (July 17, 2020), conservative think tank OCPA wrote an article with praise from 4 of 5 schools that would later be listed as receiving unauthorized preferential treatment. The author of the article (Ray Carter) is married to Jennifer Carter of Libertas Consulting (see point above) - part of the “special interest group” that the audit report claims went outside guidelines to give money to schools, rather than families. One of the founders of Christo Rey (one of the special treatment schools) is also behind Every Kid Counts Oklahoma that hired Walters as Executive Director.
65% of the total budget expenditures were identified as questionable because the grant objectives were disregarded.
657 students of low-income families who qualified for the SIS program did not get the financial assistance they requested because the funds were exhausted by the pre-selected VIP students.
In nearly 87% of cases, auditors were unable to confirm the private schools were charging the state what parents would have been charged for tuition. some private schools inquired as to if they could bill for the program’s maximum student amount of $6500, even if it was more than the tuition parents owed.
20% of the federal money was paid to private schools in excess of the families’ tuition responsibility. This means that a good chunk of extra money paid went well beyond the private school tuition balances owed, so the extra money paid was absorbed by the private schools for profit, instead of being spent on the original intent of helping low income children stay in school.
WALTERS’ SPECIAL INTEREST INVOLVEMENT - The State of Oklahoma placed Ryan Walters, at the time not employed by the state, in the role of the key decision maker for managing the GEERS programs without a contract to govern his involvement.
Walters neither had the authority nor did he meet federal qualifications to administer or oversee these grant funds.
Federal guidelines, compliance requirements, and mandates to retain records were not followed.
Representing a special interest group, Walters was in charge of managing millions of tax dollars with no contracts and no written agreements placed on the third-party vendors he hired. Additionally, Walters hired these firms WITHOUT going through the mandatory public bidding process, hand selecting who would manage this business for the entire State of Oklahoma. This is illegal.
Millions of tax dollars were misspent because Ryan Walters ignored federal grant guidelines.
COLLECTION OF STUDENT DATA - Special interest groups requested that grant applications be customized to include two questions asking whether the student had a disability and/or an Individualized Education Program (IEP). To submit their applications, families were forced to provide their child’s personal information, which was never an eligibility requirement for these awards.
Walters failed to ensure that private information collected from families followed the guidelines of the Family Educational Rights and Privacy Act (FERPA). Violation of this federally protected information is very serious.
Because outside groups were allowed to collect and view personal student information without a contract, the State Auditor does not know where this personal student information has been stored or how it is being used by these outside special interest groups.
LACK OF STATE OVERSIGHT:
Ryan Walters was responsible for key decision-making, monitoring, reporting, and administering of the GEER grant.
Walters neglected to monitor and file the proper federal compliance reports for the GEER funds.
In June 2021, the Federal government warned Walters about the lack of monitoring and reporting of the GEER grant. The State then hired a consulting firm to monitor the GEER funds, paying $325,000 to the firm to monitor the GEER program. The firm has not fulfilled the duties for which it was paid.
This same consulting firm has been paid $1.3 million dollars to date to perform monitoring and reporting requirements for both the CARES and GEER programs.
Walters granted the digital wallet vendor an $18 million contract without employing a competitive bidding process required by state law. Also illegal.