State sues Florida company over management of federal student COVID relief program

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The State of Oklahoma filed a court case Friday seeking to recover money from a contractor he hired to distribute emergency federal funds for education during the COVID-19 pandemic.

The lawsuit names the state’s Office of Management and Business Services and the state’s Office of Education Quality and Accountability as plaintiffs against the former provider, Kleo Inc., Florida-based parent company of ClassWallet.

Oklahoma officials hired ClassWallet in August 2020 to distribute $17.3 million in federal governor education emergency relief funds, a program commonly referred to as GEER.

ClassWallet provided services for two assistance programs for Oklahoma: the Stay in School Grant, which provided up to $6,500 in tuition assistance to parents of impacted private school students by the pandemic, and Bridge the Gap Digital Wallet, which provided $1,500 grants to low-income families to purchase educational materials.

For its services, Oklahoma paid ClassWallet a $650,000 cut from GEER funds.

A joint investigation by Oklahoma Watch and The border in May found that hundreds of thousands of dollars from the Bridge the Gap program were spent on non-educational items such as smartphones, televisions, video game consoles, Christmas trees and barbecues, among others.

When the program started, parents wondered if there were any restrictions on what they could buy. Secretary of Education Ryan Walters, the Republican candidate for state superintendent of public instruction, gave a ClassWallet representative blanket approval for all articles on ClassWallet’s online platform, revealed emails obtained by the media.

A watchdog agency recommended the US Department of Education recover at least $650,000 in mis-spent funds and force Oklahoma to review an additional $5.5 million in purchases, according to a federal audit report published on July 18. Auditors also found that the state failed to follow federal guidelines for four of Gov. Kevin Stitt’s five educational relief programs.

Records obtained by The border and Oklahoma Watch show that state officials, including the governor’s office, the Office of Management and Corporate Services, and the attorney general’s office were aware of numerous problems with the programs and that federal investigators were looking into how they were administered since the beginning of 2021.

Records also show Walters, executive director of the Every Kid Counts Oklahoma nonprofit, was instrumental in helping ClassWallet secure a no-tender contract with the state even before he was named secretary. to education in September 2020. ClassWallet runs similar programs in other states.

The state claimed in the lawsuit that ClassWallet failed to keep records verifying student eligibility for the Stay in School scholarship program, failed to follow guidelines for authorized purchases under the Bridge the Gap program. and had not submitted required surveillance reports to the US Department of Education.

The state is seeking more than $150,000 for breach of contract and fraud, and is asking the court to declare the company a sub-recipient of grant funds, which would make it legally responsible for monitoring and reporting on how whose money was spent.

The issue of who the subrecipient was was a point of contention between ClassWallet and the state. Federal auditors and ClassWallet say the company was only a contractor or supplier, while the Office of Educational Quality and Accountability was the subrecipient. The Stitt administration sent the money through the Office of Educational Quality and Accountability, which then wrote a check to ClassWallet.

This story was produced in partnership with the nonprofit Oklahoma Newsroom The border.

Jennifer Palmer has been a reporter for Oklahoma Watch since 2016 covering education. Contact her at (405) 761-0093 or [email protected] Follow her on Twitter @jpalmerOKC.

Clifton Adcock has been an investigative journalist in Oklahoma for decades and joined The Frontier in 2017. Since joining The Frontier, Adcock has written extensively on politics, criminal justice, medical marijuana and the environment . Contact him at [email protected] Follow @cliftonhowze

Reese Gorman joined The Frontier in 2022 after a stint at The Norman Transcript. Gorman primarily covers state and federal government for The Frontier. Contact him at [email protected] Follow @reesejgorman

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State sues Florida company over management of federal student COVID relief program

The State of Oklahoma filed a pursuit Friday is looking to recover money from a contractor he hired to distribute emergency federal funds for education during the COVID-19 pandemic.

The lawsuit names the state’s Office of Management and Business Services and the state’s Office of Quality and Accountability Education as plaintiffs against former vendor, Florida-based Kleo Inc. the parent company of ClassWallet.

Oklahoma officials hired ClassWallet in August 2020 to distribute $17.3 million in federal governor education emergency relief funds, a program commonly referred to as GEER.

ClassWallet provided services for two aid programs for Oklahoma: The Stay in School grant, which provided up to $6,500 in tuition assistance to parents of private school students who were impacted by the pandemic , and Bridge the Gap Digital Wallet, which provided low-income families with $1,500 to purchase materials.

For its services, Oklahoma paid ClassWallet a $650,000 cut from GEER funds.

A joint investigation by Oklahoma Watch and The Frontier in May found that hundreds of thousands of dollars from the Bridge the Gap program were earmarked for non-educational items such as smartphones, televisions, video game consoles, Christmas trees and barbecue grills, among others.

When the program started, parents wondered if there were any restrictions on what they could buy. Secretary of Education Ryan Walters, the Republican nominee for state superintendent of public instruction, gave a ClassWallet representative blanket approval for all articles on ClassWallet’s online platform, e -emails obtained by the media have been revealed.

A watchdog agency recommended the U.S. Department of Education recover at least $650,000 of mis-spent funds and force Oklahoma to review an additional $5.5 million in purchases, according to afederal audit report published on July 18. Auditors also found that the state failed to follow federal guidelines for four of Gov. Kevin Stitt’s five educational relief programs.

The records obtained by The Frontier and Oklahoma Watch show that officials including the governor’s office, the Office of Management and Corporate Services, and the attorney general’s office were aware of numerous problems with the programs and that federal investigators were looking into how they were being administered from the start of 2021.

Records also show Walters, executive director of the Every Kid Counts Oklahoma nonprofit, was instrumental in helping ClassWallet secure a no-tender contract with the state even before he was named secretary. to education in September 2020. ClassWallet runs similar programs in other states.

The state claimed in the lawsuit that ClassWallet failed to keep records verifying student eligibility for the Stay in School scholarship program, failed to follow guidelines for authorized purchases under the Bridge the Gap program. and failed to submit required monitoring reports to the US Department of Education.

The state is seeking more than $150,000 for breach of contract and fraud, and is asking the court to declare the company a subrecipient of grant funds, which would make it legally responsible for monitoring and reporting on how whose money was spent.

The issue of who the subrecipient was was a point of contention between ClassWallet and the state. Federal auditors and ClassWallet say the company was only a contractor or supplier, while the Office of Educational Quality and Accountability was the subrecipient. The Stitt administration sent the money through the Office of Educational Quality and Accountability, which then wrote a check to ClassWallet.

This story was produced in partnership with the nonprofit Oklahoma Newsroom The border.

This article first appeared on Oklahoma Watch and is republished here under a Creative Commons license.

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