HARRISBURG, PA — Auditor General Timothy L. DeFoor has unveiled a performance audit of five Pennsylvania cyber charter schools, prompting calls for substantial changes to the state’s outdated funding formula. The audit, which reviewed operations between 2020 and 2023, revealed significant financial growth among these schools, with revenue increases of $425 million, a 144% rise in reserves, and taxpayer-funded expenditures that raise questions about fiscal accountability.
“I am now the third auditor general to look at this issue and the third to come to the same conclusion,” DeFoor stated. “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.”
The selected schools for the audit included Commonwealth Charter Academy, Pennsylvania Leadership Charter School, Insight PA Cyber Charter School, Pennsylvania Cyber Charter School, and Reach Cyber Charter School. The findings highlighted a staggering increase in revenue from $473 million in 2019-2020 to $898 million in 2022-2023, attributable in part to growing enrollment during the COVID-19 pandemic and an outdated funding formula established in 2002. This formula calculates tuition based on school district budgets rather than actual instructional costs, which DeFoor noted fundamentally fails to reflect current educational and technological realities.
Adding to the concerns, DeFoor reported that taxpayer dollars were legally spent on items such as staff bonuses, gift cards, and vehicle-related expenses. Further scrutiny revealed that Commonwealth Charter Academy invested $196 million in acquiring and renovating 21 buildings, a figure the audit flagged as unusual for a public school focused on online education.
To address these findings, DeFoor called on the Governor to form a task force within six months to reassess the funding formula. He urged the task force to produce a report within nine months, with the General Assembly expected to act on reform legislation within six months after the report’s release. “The most important thing we can do,” DeFoor emphasized, “is to provide our children with a quality education and as leaders we need to set our personal agendas aside and fix how we fund education in this state.”
Deputy Auditor General for Audits Gordon Denlinger supported the call for reform, with the audit further illustrating how rapid advances in technology and education have made the 2002 formula obsolete. DeFoor highlighted the significant changes in technology, teaching strategies, and resources since the COVID-19 pandemic, as well as over the last two decades, stressing the pressing need for modernization.
This audit and its recommendations spotlight the critical need for reform in how Pennsylvania funds its cyber charters. If implemented, the proposed changes could enhance the alignment of funding with actual educational costs, ensuring that taxpayer dollars are more effectively utilized to prioritize student outcomes.
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