Focus on Pa Cyber: Auditor general's report reveals pressing problems

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A lot of the negative attention focused on the Pennsylvania Cyber Charter School is the result of its unique role that began as a pioneer and mushroomed into questionable, overlapping business ventures.

A grand jury investigation is believed to be focused on former school executives who wore multiple hats at Pa Cyber, the Avanti Management Group and the nonprofit National Network of Digital Schools Management Foundation. Millions of dollars that started out as revenue from taxpayers flowed through Pa Cyber to those spin-offs, and sorting that all out is a matter for federal investigators.

But the result of Auditor General Jack Wagner's most recent review of the Beaver County-based school, released Thursday, points to a different set of problems, ones that are pronounced at Pa Cyber but also prevalent at other charter schools throughout the state.

Charters, including Pa Cyber -- by far the state's largest charter school with 11,300 students -- are paid whatever it costs local districts to educate their students, regardless of how much it costs charters to do the job. According to an earlier report from Mr. Wagner, cyber charters in the state spend an average of $10,145 per student per year, yet their payments from school districts vary widely -- from a low of $6,414 from the Altoona Area School District to $17,755 from the Lower Merion School District in suburban Philadelphia. That's true for bricks-and-mortar charters as well, which spend an average of $13,411 per student per year, according to Mr. Wagner.

Pa Cyber has been paid about $100 million a year from districts across the state, which left it with annual balances exceeding $10 million. That was after high business expenses. For example, Mr. Wagner said the school spent $2 million a year on advertising in 2009-10 and $12.6 million in business expenses in 2008-09, third-highest among 127 charters and all 500 public school districts.

State legislators could remedy the disparity between expenses and revenue for charters and cyber schools by crafting a new funding formula, one that takes into account their actual costs of doing business. It is particularly important that public dollars be allocated fairly at a time when state and local taxpayers cannot afford to pony up increasing levels of funding for educating the state's children from kindergarten through 12th grade.

The problems highlighted by Mr. Wagner's audit are not new. It is time for state lawmakers to fix them.



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