A newly-released audit from Pennsylvania Auditor General Tim DeFoor’s office of five Pennsylvania cyber charter schools has confirmed what we’ve long known—Pennsylvania’s cyber charter school funding system is deeply flawed and in need of urgent reform.

Under the current funding system, school districts pay vastly different tuition rates for cyber charter education. In 2022-23, tuition payments ranged from $6,975 to $25,150 per student for regular education and $18,329 to $60,166 per student for special education These tuition payments are based on each district’s per pupil expenditures, not on the actual costs of educating a student online. 

Current law mandates that more than one billion property tax dollars are taken out of classrooms in our local public schools annually to pay for cyber charter tuition costs that are not tied to the actual expense of online education.

The result?

❌ Our local public schools struggle to provide essential resources.

❌ Property taxpayers face increasing financial pressure.

❌ Cyber charter schools amass enormous asset hoards with little oversight and waste millions of tax dollars on things unrelated to education including gift cards for students, parties, buildings, and advertising.

While school districts make cuts and raise property taxes to pay inflated cyber charter tuition bills, cyber charter schools are awash in so much excess funding that they simply cannot spend the money. 

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Key Findings from the Audit:

Skyrocketing Revenues & Fund Balances

• Revenue for the five cyber charter schools increased by $425 million (90%) from $473 million in 2019-20 to $898 million in 2022-23, primarily due to rising enrollment and tuition rates.
• Fund balances surged by $365 million (144%), reaching $619 million by June 30, 2023—raising concerns about excessive taxpayer-funded reserves.
• These schools collectively reported a General Fund surplus of $590 million, indicating revenue far exceeded expenditures.

Spending Raises Questions About Oversight & Transparency

• Commonwealth Charter Academy (CCA) transferred $354.3 million to a Capital Projects Fund, using $196 million to purchase or renovate 21 buildings—unusual spending for an online school.
• Other expenditures included staff bonuses, gift cards, vehicle payments, and fuel stipends, highlighting concerns over discretionary spending.
• A lack of clear oversight from the Pennsylvania Department of Education (PDE) resulted in delayed charter renewals, leaving cyber schools operating under expired agreements.

Next Steps

We agree with AG DeFoor’s recommendation that the Pennsylvania Department of Education, as the sole authorizer of the charter schools, must 

• Conduct reviews and renew the cyber charter agreements on a timely basis that coincides with the end of the charter agreement. 
• Determine if CCA’s acquisition/renovation of buildings throughout the state is consistent with the department’s guidance regarding building usage and aligns with the CSL (Charter School Law) and  consider the possible need to revise the department’s 2013 BEC (Basic Education Circular) pertaining to cyber facilities by further clarifying the appropriate use of taxpayer monies for student and family supports. 

While we acknowledge the thoroughness and quality of AG DeFoor’s audit, we strongly oppose his recommendation to form a task force to consider the issue of cyber charter funding. A task force would delay necessary action, ensuring that cyber charter schools would hoard and waste tens or even hundreds of millions of additional property tax dollars.

House Bill 1422 already passed with strong bipartisan support during the 2023-2024 legislative session. It is time for Republicans and Democrats in the PA House and Senate to come together and pass this reform once and for all—aligning cyber charter tuition with the actual cost of online education and ending the waste and abuse of property tax dollars.

We would like to thank every advocate who has taken action to demand increased accountability for cyber charter schools, including the thousands of you who sent emails to Auditor General DeFoor a few years ago asking him to audit cyber charters. It takes time, but our work together is moving the needle in Harrisburg and with continued advocacy and pressure, this could be the year we finally get real cyber charter funding reforms across the finish line in Pennsylvania. Stay tuned!

Grateful for your continued support of public education,

Susan Spicka, Executive Director, Education Voters of PA

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This week PCN’s On the Issues focused on cyber charter accountability and Ed Voters recent report.

Click HERE to Watch. This was taped before the surprise audit of cyber charters!