OKLAHOMA CITY — A multi-county Grand Jury investigation into the Governor’s Emergency Educational Relief (GEER) found no evidence of criminal actions or willful corruption; however, jurors characterized the handling of grant money and lack of internal controls as “irresponsible, disappointing, and indefensible.”
The investigation report is 31 pages and was released on Oct. 15.
2 News read through the full report to learn what the findings mean for the future of education spending in Oklahoma.
What is a Grand Jury?
A Grand Jury, made up of 16 to 23 citizens, is tasked with deciding if there is enough evidence to try someone for a crime.
All Grand Jury proceedings are held in private, so the media cannot attend.
This specific Grand Jury investigated how and why the state failed to properly manage its federal grant money.
What is the Governor’s Emergency Educational Relief (GEER) fund?
The GEER funds come from a federal grant awarded by the United States Department of Education (USDOE).
In March 2020, Congress established the GEER fund as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The purpose of the funds was to support educational entities, including local school districts, institutions for higher learning, and other education-related entities, to address educational disruptions caused by COVID-19.
The USDOE dispersed $3 billion across the country, with $39.9 million being sent to Governor Kevin Stitt to allocate statewide, with specifications on how the money should be spent and monitored.
Why did the Attorney General ask for a Grand Jury investigation?
Attorney General Gentner Drummond called for the investigation shortly after Gov. Stitt filed a lawsuit against ClassWallet, which claimed the company was to blame for mismanagement of funds.
Drummond called Stitt's lawsuit frivolous and dismissed it in January 2023.
The investigation was also prompted after both state and federal audits alerted the public to mismanagement and misspending of the relief money by the State of Oklahoma.
Local News
Federal audit released on Oklahoma education relief spending
Read the full state audit here.
What did Gov. Stitt put the money towards?
Of the $39.9 million fund, $8 million went to the Bridge the Gap (BTG) initiative and $10 million went to the Stay In School (SIS) initiative.
Out of five GEER funding initiatives, BTG and SIS were highlighted in the 2021 state audit as resulting in millions of dollars in questionable and unauthorized spending.
Bridge The Gap, also know as Digital Wallet, was designed to provide smaller grants to eligible families to buy technology, materials and supplies essential to virtual learning and homeschooling during the pandemic.
Stay In School was intended to provide scholarships to eligible families with kids already attending nonprofit private schools to subsidized tuition costs so they wouldn't be forced to leave their school during the pandemic.
The Grand Jury made sure to note that $8 million was awarded to the Oklahoma State Department of Education, only after the department offered to match the Governor's contribution with federal funding it received through a separate CARES Act program.
At the time, Joy Hofmeister was State Superintendent and headed the OSDE.
"Unlike the BTG and SIS programs, [OSDE] designed and implemented a comprehensive, formulaic awarding process that ensured its $8 million GEER grant was actually used to support local districts that were most significantly impacted by COVID-19.
What did the Grand Jury find?
The Grand Jury said it uncovered "deeply troubling" actions and inactions by state officials, non-state entities, and private individuals tasked with implementing the BTG and SIS initiatives.
Despite this, the jury said it did not find enough evidence to establish, beyond a reasonable doubt, that a crime was committed.
Administration of the funds:
Gov. Stitt signed the application for the GEER funds on April 30, 2020, and designated his Secretary of Education, Ryan Walters, as the State's Program Representative.
Stitt's office never solicited proposals for use of the GEER funds. However, the Governor's Office did receive some unsolicited proposals from various education-related entities.
On July 2, 2020, Stitt's office pulled out all $39.9 million from the fund, despite there being no immediate cash need from the grant at the time.
This immediate 100% drawdown of the funds is what caused targeted monitoring by the USDOE.
"[The drawdown] is also emblematic of the pervasive problem we found throughout the implementation of the BTG and SIS initiatives, namely that decision makers were ignorant of their own ignorance," the Grand Jury report reads.
The Grand Jury found that Gov. Stitt rejected guidance from the Trump Administration’s U.S. Department of Education that a state agency or office experienced with federal grants should serve as the funds’ fiscal agent.
Then-Secretary of Education Ryan Walters urged Stitt to use the Oklahoma State Department of Education to administer the funds instead.
The OSDE at the time submitted a thorough proposal to the Governor on April 20, 2020, giving him notice that OSDE was ready and able to handle the funds.
However, the governor reportedly believed that the OSDE wouldn't support low-income families attending private schools and opted to use private individuals and companies.
Witnesses also reported the strained relationship between the Governor and OSDE at the time over disagreements on mask policies and school closures.
“Without consulting the agency, the Governor’s Office assumed SDE would be unwilling to support such initiatives instead of supporting public schools. Evidence received by this Grand Jury shows this assumption was unfounded,” states the 31-page report.
Jurors said nothing indicates the Governor’s office vetted the individuals to determine their capability to oversee millions in federal grants subject to stringent compliance.
Working with individuals and non-state agencies:
The investigation found sometime during the summer of 2020, Governor Stitt started strategizing with two private citizens who led nonprofits aimed at advancing school choice policies.
The jury found no evidence that Stitt made any effort to vet the two nonprofits for their ability to handle the funds. By late June or early July 2020, both entities were engaged with implementing the BTG and SIS initiatives on behalf of the state.
Evidence was given that the director of Every Kid Count Oklahoma (EKCO) claimed to have staffing and expertise to administer the grant. However, the director was the only employee of EKCO at the time and had no federal grant experience.
There was also no contract or documentation holding these two private citizens accountable to the state.
Giving preferential treatment in grant applications:
The investigation also found that the preferential treatment was given to certain individuals when applying for grants.
“The evidence received by this Grand Jury irrefutably establishes that Bridge the Gap (BTG) and Stay In School (SIS) awards were not bestowed in a fair or equitable manner” the report notes.
Ultimately, 486 applicants for BTG and SIS funds applied before the public start date. It's unclear how these applicants learned of the application before its public start date.
The State Auditor found that SIS dollars were denied to an estimated 657 students of eligible families who actually had experienced financial woes due to the pandemic.
The investigation found that issues with the funds came from the state's disregard of existing administrative safeguards by delegating authority to private entities.
“The systemic deficiencies in the BTG and SIS programs resulted in the waste and misspending of millions of dollars in emergency relief funds, subjecting Oklahoma taxpayers to liability for repayment to the federal government and depriving hundreds, if not thousands, of Oklahoma families and students from receiving the educational pandemic aid that they needed and were entitled to receive," the grand jury wrote.
An audit by the USDOE Office of Inspector General identified over 3,100 purchases under the BTG initiative that did not fit under GEER fund requirements.
Those included:
- 817 televisions
- 385 watches or smartwatches
- 179 doorbell cameras
- 174 cell phones and related accessories
- 71 refrigerators
- 27 Xbox systems
- 3 Christmas trees
Because of this, the federal government demanded $650,000 be returned to them by the state. This cost can only be paid by Oklahoma taxpayers.
What was the conclusion of the Grand Jury investigation?
The Grand Jury found its investigation revealed significant issues, including a complete lack of oversight and accountability, which led to improper distribution of federal funds.
It concluded that "the fundamental problem from which all other deficiencies in the BTG and SIS programs stem from the State's disregard of existing administrative safeguards in the interest of advancing a political and philosophical agenda."
Here are recommendations from the Grand Jury:
- The State should establish mandatory and ongoing training requirements in federal grant management for any agency receiving at least $10 million annually in federal funding.
- State agencies or offices receiving more than $10 million annually should be required to promulgate written rules or adopt written internal policies establishing appropriate federal grant management guidance.
- The State should establish a training program for elected officials, agency and department heads, and others that encompass procurement and purchasing standards; competitive bidding requirements; identification and resolution of conflicts of interest, recordkeeping and retention requirements; the implementation of internal controls; and recognizing and preventing fraud and mismanagement.
- A state agency receiving federal grant money should ensure that its use is overseen by personnel with sufficient training and experience in federal grant management.
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