Pandemic aid for school supplies spent on televisions, game consoles

Oklahoma Education Secretary Ryan Walters, left, and Governor Kevin Stitt. (Photo illustration by Dylan Goforth/The Frontier)

Editor’s note: This is an abridged version of a long story published by Oklahoma Watch in partnership with The Frontier.

Just give the money to the families. It was the driving force behind Gov. Kevin Stitt’s $18 million plan in US Department of Education relief dollars to help students during the coronavirus pandemic.

Other states used federal funds to train new teachers or support programs for deaf-blind students. But in Oklahoma, a history professor with political ambitions helped a Florida tech company win a no-tender state contract to quickly distribute $8 million to families with little government oversight. Another $10 million went to private school vouchers.

With little guardrail, some families used Oklahoma’s share of the federal governor’s emergency education relief funds to buy Christmas trees, game consoles, electric fireplaces and grills exteriors, according to an investigation by Oklahoma Watch and The Frontier.

Months later, the teacher, Ryan Walters, was on the national stage as Stitt’s new education secretary, calling the effort a success.

Oklahoma’s contract with Florida-based software company ClassWallet allowed families to quickly buy school supplies online with grants funded by federal relief funds through the Bridge the Gap Digital Wallet program. During a virtual conference for a national school reform group in 2020, Walters presented the Bridge the Gap program as a model for how to start a school voucher program with “minimum staffing requirements and control of maximum quality”.

From the outset, however, the strategy led to a lack of procurement oversight, possibly violating federal grant terms and state procurement requirements, according to federal regulators.

While most parents spent the money on school supplies, Oklahoma Watch and The Frontier found nearly half a million dollars in questionable purchases. News agencies found at least 548 TVs purchased through ClassWallet worth $191,000. Families also purchased pressure washers, car stereos, coffee makers, exercise equipment and smartwatches.

ClassWallet blamed the state for the lack of control over purchases.

“As a software provider, ClassWallet had neither the responsibility nor the authority to exercise programmatic decision-making regarding the program or its associated federal funds and had no responsibility for grant compliance,” said company spokesman Henry Feintuch said in a statement.

Oklahoma eventually returned $2.9 million in unspent relief funds to the federal government. ClassWallet terminated the Bridge the Gap program a day early after federal investigators and state attorneys found the company was operating on an expired contract with almost no government oversight.

Federal auditors are currently investigating how the Stitt administration awarded the ClassWallet contract and distributed the relief money.

Records obtained by Oklahoma Watch and The Frontier show that the state placed no limits on the items families could purchase from vendors.

Stitt’s spokeswoman, Carly Atchison, declined to schedule an interview with the governor and declined to answer written questions from Oklahoma Watch and The Frontier about how her administration handled the relief money.

“During the COVID pandemic, Governor Stitt had a duty to deliver federal relief funds to Oklahoma students and families as quickly as possible and he did just that,” Atchison said in the post. a written statement.

Federal money from the Governor’s Emergency Education Relief Fund was intended to support students from kindergarten through middle school as schools transitioned to remote learning during the pandemic. Congress has given state governors the authority to send relief funds to public or private schools and other education-related entities under the Economic Aid, Relief, and Security Act. of the coronavirus in 2020. The law gave states wide discretion over how to spend the money.

Even before Stitt named Walters education secretary in September 2020, Walters had worked to secure the contract with ClassWallet, according to emails obtained by Oklahoma Watch and The Frontier. Walters declined several interview requests.

Some states have solicited proposals and public comment on how to spend the relief funds. But in Oklahoma, only a “small group of people” decided how to spend the money and award sole-source contracts, federal regulators would later write.

As schools were set to reopen in August 2020, Stitt Chief Information Officer Jerry Moore waived state bidding requirements to award ClassWallet a contract to distribute $18 million in aid. federal government in the form of grants to families for school supplies and vouchers for private schools. ClassWallet received a $650,000 cut in relief money to run the programs.

State law allowed Moore to waive bidding requirements “in the best interest of the state to respond quickly to the effect Covid-19 was having on the state’s education system.” said Caden Cleveland, spokesperson for the Office of Management and Business Services. in a statement to Oklahoma Watch and The Frontier.

A federal rule prohibited states from giving money directly to parents or students. But states could get around that by awarding funds to a qualifying entity “that provides student services,” which could then distribute money to parents and students.

Publicly, the Stitt administration said the educational nonprofit Every Kid Counts Oklahoma would run the Bridge the Gap program. The organization was less than six months old at the time. Walters served as its executive director.

Yet none of the federal relief funds passed through Every Kid Counts before being distributed to parents as small grants to spend through the ClassWallet platform, the nonprofit organization said in a statement. Instead, the Oklahoma Office of Educational Quality and Accountability, a state agency that oversees teacher certification, sent ClassWallet a paper check for $17.35 million (the amount of the program, minus fees of ClassWallet) by certified mail in August 2020.

ClassWallet representatives told state officials that the company prevents fraud by limiting purchases to approved vendors. But even as some parents bought dishwashers and car stereo amplifiers, ClassWallet CEO Jamie Rosenberg called Oklahoma’s program “incredibly successful.”

“They were literally able to deploy $18 million without having to commit human capital from the government agency, and to have it almost hands-free and incredibly, incredibly streamlined,” Rosenberg said at the 2020 roundtable.

After weeks of investigations by The Frontier and Oklahoma Watch into the ClassWallet contract, Stitt’s office released a demand letter sent late Friday afternoon stating that it intends to pursue damages that the ‘State’ has suffered or will suffer as a result of ClassWallet’s failure to comply with its contractual and related legal obligations.

“Unfortunately, ClassWallet has not fulfilled its contractual and legal obligations to the state and some of our most vulnerable citizens,” Atchinson said. “Governor. Stitt is committed to recovering all misappropriated funds and if ClassWallet refuses to take appropriate action, we will have no choice but to pursue legal action.

The letter criticizes ClassWallet for allowing parents “to use ClassWallet’s financial management and payment system to spend grant funds for purposes not directly related to education.”

But records show ClassWallet gave Walters the ability to limit what parents could buy.

“We’re getting a few questions about eligible items,” a ClassWallet employee wrote to Walters in an email the day the program launched, before Walters was named education secretary. “I understand that all purchases from any of our vendors (are) permitted…is there blanket approval for items as long as they are purchased from vendors on our platform?”

“Global approval with vendors on your platform,” Walters replied.

Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public policy issues facing the state.


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