Pa. Auditor General calls for cyber charter school funding reforms in new report

Pennsylvania Auditor General Timothy DeFoor’s report confirms that cyber charter schools are hoarding taxpayer money and spending it on items such as staff bonuses, gift cards, vehicle payments and more. 

Following the release of an anticipated cyber charter school audit, Pennsylvania Auditor General Timothy DeFoor, a Republican, is calling for reforms to the commonwealth’s charter school law after five cyber charter schools increased their revenues by $425 million and reserves by 144%.

The five cyber charter schools included in the audit were Commonwealth Charter Academy, the state’s largest cyber charter school, Pennsylvania Leadership Charter School, Insight PA Cyber Charter School, Pennsylvania Cyber Charter School and Reach Cyber School. 

“In this audit, we found these cyber charter schools legally increased their revenue from $473 million in the 2019-2020 fiscal year to $898 million in the 2022-2023 fiscal year,” DeFoor said in a statement.

“We found instances of the cyber charter schools legally using taxpayer dollars on things like staff bonuses, gift cards, vehicle payments and fuel stipends. Additionally, 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.” 

Education Voters of Pennsylvania released a report last May that found the commonwealth’s unregulated cyber charter schools spent $21 million dollars on advertising fees and gift cards. That included close to $70,000 on advertising fees with minor league sport teams, $220,000 on search engine optimization and $1.1 million on grocery gift cards.

DeFoor is calling on Gov. Josh Shapiro and the Pennsylvania General Assembly to reform the outdated funding formula in three parts. First, DeFoor is calling on Shapiro to create a task force within the next six months and then issue a report determining the guidelines for a new funding formula. 

Then DeFoor wants the legislature to pass a new funding formula six months after the task force releases their findings. 

However, public education advocates have a simpler fix, which is capping the tuition rates for all students at $8,000 per student. 

“We acknowledge the quality of AG DeFoor’s audit and report but disagree with his recommendation for the formation of a task force to address the issue,” Susan Spicka, the Executive Director for the Education Voters of Pennsylvania, said in a statement. 

“A task force would simply kick the can down the road and ensure that tens or even hundreds of millions of additional property tax dollars will be hoarded or wasted by cyber charter schools while Harrisburg wrings its hands.”

There are 500 school districts in Pennsylvania, and cyber charter schools are allowed to charge school districts anywhere from $7,659 to $28,959 per student receiving a regular education or $18,627 to $59,523 per student receiving special education. 

Cyber charter schools, who have benefited greatly from the lack of changes in Pennsylvania’s charter school law since it was enacted, saw DeFoor’s report as an opportunity to take a victory lap claiming no wrongdoing. 

“This audit confirms that the CCA Board of Trustees and school administration manage taxpayer dollars effectively and efficiently, investing in programs, services, and supports that benefit every enrolled student,” Commonwealth Charter Academy Board Chairman, and former state senator, Jeffrey Piccola said in a statement.