A special audit of the Oklahoma State Department of Education found administrative and oversight concerns but no evidence of wrongdoing, according to Oklahoma State Auditor & Inspector Cindy Byrd.
Governor Kevin Stitt requested the audit, which reviewed activity from July 1, 2020, through June 30, 2021.
“We found no evidence of wrongdoing, but we did identify issues that should concern both taxpayers and lawmakers,” Byrd said.
The audit notes that of the $7.6 billion spent annually on public education, about 0.21 percent is available for discretionary spending at the State Department of Education. Most funding is controlled by local school districts, which the report says is where any significant fraud, waste or abuse would likely occur. The department largely functions as a clearinghouse for distributing funds.
Among the findings:
The Oklahoma Cost Accounting System, or OCAS, is designed to categorize and track expenditures but is not built to detect improper spending or monitor compliance with the statutory 5 percent cap on administrative expenses, or 8 percent for small districts. Because the system relies on self-reported district data, the audit says its effectiveness as an oversight tool is limited.
The Office of Educational Quality and Accountability, overseen by the Secretary of Education, failed to meet regularly during the audit period and did not fully comply with statutory requirements. Although 23 school districts exceeded the 5 percent administrative expense cap, none were reviewed by the office during that time.
The audit also flagged line-item appropriations directing funds to a specific vendor for reading and math services. Lawmakers appropriated funds directly to the vendor, bypassing competitive bidding. Contracts between the vendor and school districts during the audit period totaled approximately $13 million, and the vendor’s curriculum was not formally reviewed against Oklahoma standards.
In addition, the Legislature allocated $11 million for the Reading Sufficiency Act during the audit period. Funds were distributed on a per-pupil basis, with 11 school districts receiving less than $370, four districts receiving less than $100 and one district receiving $12.
“Legislators never built a framework to measure the success of these programs,” Byrd said. “Did taxpayers get an appropriate return-on-investment for their $11 million? Did more kids learn how to read? No one knows.”
Byrd said the issues identified in the audit are fixable and that her office stands ready to work with lawmakers to strengthen financial oversight. The report marks the 197th audit released by her office this fiscal year.
