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OKLAHOMA CITY – An investigative audit requested by Governor Kevin Stitt has concluded that there is no evidence of financial misconduct at the Oklahoma State Department of Education (OSDE). But, the audit has highlighted significant weaknesses in how local school districts manage and track taxpayer spending. State Inspector and Auditor Cindy Byrd released the findings on February 18, 2026, after examining the agency during the tenure of former Superintendent Joy Hofmeister. The audit was prompted by ongoing scrutiny of education spending during the COVID-19 pandemic and concerns about financial practices associated with Epic Charter Schools.
Despite the audit’s findings of no wrongdoing at the state level, Byrd indicated that many issues stem from the financial oversight practices of individual school districts. She emphasized that any potential waste, fraud, or abuse is likely to occur at the district level, rather than within the OSDE itself.
The audit was specifically focused on the Oklahoma Cost Accounting System (OCAS), the reporting platform utilized to track school spending. Byrd noted that although the audit identified no misappropriation of funds at the department, the OCAS system is primarily a self-reporting mechanism and is not designed to detect fraud. Oklahoma allocates approximately $7.6 billion annually for K-12 education, with about 98% of that funding being spent at the district level across various public school districts.
Key Findings of the Audit
Among the key findings of the audit are:
- OCAS lacks the structure necessary to track and enforce spending caps set by state law, which are 5% of total expenditures for larger districts and 8% for smaller ones.
- The classification of expenditures relies on an honor-based system, which can lead to honest errors in reporting.
- Local school boards are responsible for oversight, but the current system may not adequately safeguard against financial mismanagement.
- Concerns were raised about a $1 million allocation in 2021 for supplemental math tutoring that required districts to use a specific vendor, potentially bypassing competitive bidding standards.
Recommendations for Improvement
In light of the findings, Byrd has proposed several recommendations aimed at improving financial accountability and transparency at the district level:
- Develop a more robust financial reporting system that can effectively track administrative costs and detect potential wrongdoing at the district level.
- Implement competitive bidding standards for vendors receiving public funds to ensure that taxpayers are receiving the best value for their investments.
- Enhance transparency through stronger public reporting requirements, similar to those observed in county governments.
Context and Future Implications
Governor Stitt’s audit request was part of a broader effort to ensure responsible management of education funds, particularly in the wake of significant investments in education during the pandemic. This audit is separate from a more recent review initiated by Attorney General Gentner Drummond, which is currently on hold, examining the financial practices under Superintendent Ryan Walters.
Byrd’s audit underscores the need for increased oversight and better financial practices in Oklahoma’s school districts. As the education landscape continues to evolve, addressing these identified weaknesses will be crucial for maintaining public trust and ensuring effective use of taxpayer dollars.
Joy Hofmeister, the former state superintendent, welcomed the audit’s findings, stating that they validate the integrity and transparency of her administration. She expressed gratitude for the thorough review conducted by Auditor Byrd.
As stakeholders digest these findings, discussions surrounding the necessary reforms will likely continue, with an emphasis on ensuring that educational funding is effectively utilized to benefit students across Oklahoma.
Readers are encouraged to share their thoughts and engage in discussions regarding the implications of these findings for the future of education in Oklahoma.
