Epic One on One virtual charter school has been penalized more than $530,000 for exceeding the state limit on administrative spending, a limit imposed by state statute meant to keep the bulk of state education funding in the classroom.

Epic’s superintendent, Bart Banfield, was notified of the penalty last month, according to an email obtained by The Frontier through an open records request.

The total penalty of $530,527.20 is based on Epic exceeding the allowable limits on administrative expenditures by 5.58 percent.

School districts with more than 1,500 students are not allowed to spend more than 5 percent of expenditures on administrative costs, which includes salaries for superintendent, assistant superintendent or any employee who has responsibility for administrative functions of a school district.

The amount will be deducted from Epic’s next state aid payment, according to the email to Banfield.

Thirteen school districts exceeded administration spending limits in Fiscal Year 2019, according to a report from the State Department of Education.

The penalties for the 12 other districts averaged $19,468, with penalties on school districts ranging from $27.39 to $39,514.

Epic’s penalty of more than half a million dollars is 10 times more than any penalty issued over the past three years, according to documents obtained by The Frontier.

Epic claims the penalty is a mistake.

“It is our understanding that EPIC is identified as exceeding the administrative cap because of a coding error and the State Department of Education requiring us to list administration under one charter rather than allocate it appropriately between our two charters,” said Shelly Hickman, a spokeswoman for Epic and an assistant superintendent at the school. “EPIC administration serves both charters so we don’t understand the agency’s direction. It is also confusing to us because the agency has us allocate administration appropriately between the two charters in annual School Personnel reporting. Amid this confusion, we are exploring options, which will likely include applying for a statutory waiver from the State Board of Education.”

However, state superintendent Joy Hofmeister told The Frontier there is no statutory waiver or appeal available to Epic.

“Even if there were, I wouldn’t recommend it,” Hofmeister said in a text message statement. “Epic waited until the 11th hour to certify this data as accurate under penalty of law. (The State Department of Education) sent Epic a lengthy list of questions on Dec. 20, 2019. Despite multiple inquiries, Epic has yet to respond. There is no confusion here. The penalty will be enforced.”

Epic One on One is a virtual school authorized by the Statewide Virtual Charter Schools Board, while Epic Blended also combines virtual and in-person instruction and is authorized by Rose State College in Midwest City.

Both charter schools are managed by the company Epic Youth Services, which receives millions in state funding from both schools.

Epic One on One expenditures in 2019 topped $90.2 million, with $5 million spent on administrative costs. Epic Blended’s total expenditures were $41.6 million with $164,950 in administrative costs.

In 2018, Epic appeared to spread out some of its administrative costs between its two schools, as Epic One on One spent $1.5 million on administrative costs, compared to $1 million by Epic Blended.

Epic’s two schools now top 28,000 students and have drawn scrutiny in recent years following rapid growth. The school has also drawn the attention of the Oklahoma State Bureau of Investigation, where investigators claim the school has falsified enrollment records and that Epic’s founders split at least $10 million in state funding that was sent to Epic.

Epic has denied any wrongdoing and no charges have been brought against the school or its employees.

Editor’s note: This story was updated with a statement from state superintendent Joy Hofmeister.