Pennsylvania Auditor General Timothy L. DeFoor released an audit Thursday calling for a major overhaul of cyber charter schools funding, finding that between 2020 and 2023 they increased their revenues by $425 million and reserves by 141%.
He said the funding formula for cyber schools should be revised to reflect their actual costs, rather than be based on the per-pupil expenditures of the districts that send them students.
But the performance audit of five of the state’s 13 cyber schools did not find any illegalities.
“I am now the third auditor general to look at this issue and the third to come to the same conclusion: the cyber charter funding formula needs to change to reflect what is actually being spent to educate students and set reasonable limits to the amount of money these schools can keep in reserve,” DeFoor said in a statement. He called for the formation of a task force to study the issue.
In 2023-24, Pennsylvania cyber charters educated nearly 60,000 students, more than any other state.
The recommendation follows what was suggested by Gov. Josh Shapiro. In his budget address earlier this month. Shapiro asked the legislature to change the law so that all school districts pay a flat $8,000 tuition rate for each student. School districts currently pay cyber charters their own per-pupil costs, which vary widely.
Between 2019-20 and 2022-23, according to DeFoor, the five audited schools increased their revenue from $473 million to $898 million, some of which was used to pay for “staff bonuses, gift cards, vehicle payments and fuel stipends,” noting that these are all permitted under the law. Cyber school enrollment surged during and after the covid pandemic.
Still, he added, “Commonwealth Charter Academy spent $196 million to purchase and/or renovate 21 buildings, which to us seems a bit out of the ordinary for a public school that is based in online instruction.”
Susan Spicka, the executive director of Education Voters of PA and a leading cyber charter critic, called DeFoor’s audit “a clarion call for reform.” But she disagreed about forming a task force, which she said “would simply kick the can down the road” on needed reform.
Insight PA Cyber Charter School, one of those audited, issued a statement signaling that they would be open to changes to the charter law and willing to participate in a task force. But they would oppose a flat tuition rate, as proposed by Shapiro.
Rachel Langan of the Commonwealth Foundation, a proponent of cyber charters, said the audit proved that the schools made efficient use of their money.
“Cyber charters have unique financial needs, given their inability to collect taxes and reliance on public school districts to transfer tuition dollars, which often proves unstable,” Langan said in a statement. “These schools need their reserves to ensure they can continue to serve their students despite funding fluctuations.”
Prior efforts at cyber funding reform have deadlocked in the politically divided General Assembly.
The five audited cyber schools are Commonwealth Academy Charter School, Pennsylvania Leadership Charter School, Insight PA Cyber Charter School, Pennsylvania Cyber CharterSchool, and Reach Cyber Charter School.
Dale Mezzacappa is a senior writer for Chalkbeat Philadelphia, where she covers K-12 schools and early childhood education in Philadelphia. Contact Dale at dmezzacappa@chalkbeat.org.
