Ryan Walters questioned about federal funds, student testing

The Oklahoma Legislative Office of Fiscal Transparency evaluated the use of federal funds that account for 12% to 14% of all funding for public schools throughout the state and, in a second report, examined the Oklahoma State Department of Education’s rulemaking on student testing “for compliance with statutory language and legislative intent.”

LOFT is overseen by a committee of state legislators and was created as a kind of fact-finding operation to assist the Legislature in making “data-driven” policy decisions. Walters’ appearance before the committee began at 10 a.m.

On Thursday, LOFT reported examining OSDE’s compliance with the provisions of Senate Bill 36x, passed during the 2023 legislative session, which required the department to apply for or continue participating in any federal grant funding received by the state agency prior to fiscal year ’23 unless legislative leadership approved of an exception.

LOFT reported rather inconclusive findings.

The report states that the Department of Education allowed a health-focused competitive federal grant for participating school districts to expire in December 2023 over some unstated objection to a component of the grant. The report also alluded to a similar lapsing of two “STOP School Violence” grants, but stated application deadlines for both were prior to the Legislature’s new mandate.

The two grants through the U.S. Department of Justice aimed at preventing school violence were applied for and won in FY 2021. LOFT staff told lawmakers the projects were never completed and that Oklahoma had to refund $291,300 to the federal government and left an additional $1.4 million for the projects unused.

“The State does not have to repay any funds expended for these unfulfilled grants; OSDE is only required to return unused funds,” LOFT reported.

Further, “LOFT identified other grants that were similar to those received prior to FY 23 that had application deadlines after the mandate was in place,” the new report also states. “However, due to the nature of how competitive grants are offered — with differing federal grant identifiers, many grants being within the same general category but with varying objectives, and numerous variables of the same grant — it is difficult to determine which competitive grants would be subject to the application requirement.”

Between FY ’19 and FY ’23, the number of grants awarded and the value of the grants varied, but the overwhelming emphasis was on grants related to improving student mental health and preventing school violence.

When Walters took office in 2023, OSDE put in place new criteria for determining whether to pursue a competitive grant. In FY ’24, the only competitive grant awarded to OSDE was to expand partnerships for serving students with disabilities and expanding access to work-based learning for students with significant disabilities and those in rural, high-need areas.

Regina Birchum, interim director of LOFT, told lawmakers Thursday that she thought it was worth noting that local school districts are able to apply individually for federal competitive grant programs even if OSDE doesn’t.

Walters added that OSDE frequently writes letters of support for such individual district grant applications.

After only a few months in office, Walters drew criticism and questions when a longtime grant writer for the state Education Department came forward as a whistleblower to legislative leaders on both sides of the aisle, claiming that Walters lied to them at a public hearing and that current and future federal grant funding for Oklahoma public school students was in jeopardy.

On Thursday, Walters discounted those claims as having come from a “disgruntled ex-employee.” Under his administration, Walters said OSDE sifts through 2,500 grant opportunities and assesses what benefit they would be to students academically and “how transparent it will it be. Is it a good use of taxpayer dollars?”

He said his agency is in the process of applying for a student literacy grant that could bring in a total of $60 million over five years that he believes “was well worth our time.”

Several Republicans lawmakers, as well as the Democratic Caucus, have repeatedly expressed concerns about Walters’ administration of the State Department of Education. The minority caucus said it knows of at least $21 million lost because of administrative decisions or failures.

But Legislative leaders have done little to intervene.

During the recently concluded legislative session, Senate Education Committee Chairman Adam Pugh, R-Edmond, said he knew of no cases in which school districts had lost federal grants because of the State Department of Education’s failure to adhere to the bill passed in special session last year requiring it to apply for certain grants.

LOFT’s other noteworthy finance discoveries:

• Oklahoma’s public education system received its largest shares of federal funds through so-called “Title” programs for academic needs and for child nutrition in FY 2024.

Under the federal Every Student Succeeds Act for addressing educational equity needs of students living in poverty, Oklahoma received $305.8 million; under the Individuals with Disabilities Education Act for those with special education needs, Oklahoma received $192.3 million; and another $5.7 million was received to support federally mandated standardized tests for students nationwide.

Last, Oklahoma’s public schools are estimated to receive $342 million in funding from federal child nutrition programs in FY 2024.

Nearly half of OSDE’s state agency staff is supported by federal funds — 186 out of 388 full-time employees. Additionally, because OSDE is authorized to retain an administrative fee from federal funds received, it uses federal funds to support other personnel and other related administrative costs, such as information technology and professional services.

• Pandemic relief funding has temporarily inflated the appearance of education spending in Oklahoma, but OSDE has not been updating its online dashboard to provide public transparency about the use of those taxpayer dollars.

LOFT said the web page is missing $112 million in federal funds provided, has “understated the depiction of cost by $847 million” and excludes expenditures of pandemic relief funds by OSDE itself.

And LOFT found that only $2.06 billion of $2.43 billion allocated in relief funds has been spent and that OSDE only has until Sept. 30 to obligate — or specify its use of — the funds.

Walters responded that OSDE does not currently have access to its pandemic relief data dashboard and is awaiting assistance gaining access to it from from the Oklahoma Office of Management and Enterprise Services.

LOFT Co-Chairman Sen. Roger Thompson, R-Okemah, was floored by the response.

“Why do you not have access to your own website, and why is OMES not allowing you access to your website?” he asked.

An OSDE staffer responded that the dashboard was among certain pages on the OSDE website created and apparently maintained by individual employees who are no longer employed at OSDE.

Rep. Melissa Provenzano, D-Tulsa, asked a host of questions about why school districts are not being notified about their annual federal funding allocations as early in the summer as in previous administrations.

Walters and his team responded that the process is a complicated one and that they have to wait for more information to determine how much charter schools and private schools will receive before calculating all other schools’ allocations.

At the conclusion of that agenda item Thursday, Oklahoma State Department of Education Chief Academic Officer Todd Loftin got into a tit-for-tat with Provenzano over the issue.

“They do know,” he told her.

“No, they don’t,” Provenzano responded, before the two entered into a lively conversation during the LOFT oversight committee’s 15-minute break.