The audit, which examined five statewide cyber charters from July 2020 until June 2023, found that pandemic-era enrollment and funding boosts led to a cyber school revenue explosion of 90 percent, from $473 million to $898 million. At the same time, their savings grew even more, by 144 percent, which shows that they're getting more public money than they can spend.
With an outdated Cyber School Law and little spending restrictions, cyber charter schools are currently running wild with public school money.
The flaws in the cyber charter school funding model are obvious: Reimbursements are based on projected expenditures from the public school district where a student resides, so cyber charters receive the same amount of money per student as a brick-and-mortar public school — and even more for special-needs students (Gov. Josh Shapiro signed an amended formula for special-needs students last year).
This means Pennsylvania has 500 school districts and 1,000 reimbursement rates. Cybers can receive anywhere from $6,000 to over $60,000 per student — and none of it is even remotely based on the actual costs of virtual instruction.
Further, as Mr. DeFoor pointed out, in a remarkable rebuke from a Republican official, it's hard to say exactly how much a cyber-charter education actually costs because reporting requirements are so lax, despite the fact these schools receive over billions in public funds and bill themselves as public schools.
What we can see is that cyber-charter revenue increases have led to ballooning reserve funds, which cybers have wide discretion in using. This has led to suspicious spending sprees, like Commonwealth Charter Academy shelling out $196 million to update and renovate 21 buildings. This is for an online school, where no students are required to attend a campus. It also spent over $21 million on advertising, and nearly $650,000 on lobbying.
All of this is perfectly legal, which is why Gov. Josh Shapiro and the state Department of Education must act quickly to determine the actual costs of running charter cyber schools. The audit's strong rebuke, especially coming from a Republican Auditor General, should result in immediate action.
CCA, in its lengthy response to Mr. DeFoor's audit, argued that the costs to ship technology statewide, to provide physical locations for state testing and student enrichment and to offer transportation to staff and students make its lower-than-state average student tuition reimbursements a comparative bargain.
This is sophistry. The cyber-charter argument constantly changes to meet the moment. First, it was that the schools were nimble because they weren't tied down by brick-and-mortar, and still somehow cost just as much as brick-and-mortar schools. Now, it's that cyber charters actually need brick-and-mortar, and that's why they need exorbitant funding.
All the while, though, there is one constant: massive savings accounts that are raided for everything from executive bonuses to PR and lobbying expenses, funded by local property tax dollars.
This might all be justifiable if cyber charters are providing an excellent education, but here, too, they fall short: Outcomes are, according to one study, "almost universally worse" than brick-and-mortar peers.
Two prior Auditors General, both Democrats, have already called for reforms, with recommendations going back over a decade. Now a Republican is joining the chorus. There's no reason for the General Assembly to delay cutting funds to cyber charter schools, which hoard taxpayer dollars while failing to produce results for the children of Pennsylvania.
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