Audit Shows Pennsylvania Cyber Charter Schools are Fiscally Responsible

Cyber charter schools need reserve funds to ensure their continued operation despite fluctuations in their unpredictable funding.

CORRECTION: A previous version of this release incorrectly stated that the fund balance is $365 million. The fund balance of the five cyber charter schools audited increased by $365 million, reaching $619 million. 

Harrisburg, Pa., February 20, 2025 — The Pennsylvania Department of the Auditor General released its findings following a comprehensive audit of five of the state’s fourteen cyber charter schools.

In the 2024–25 school year, cyber charters serve over 60,000 students. When totaling all public school enrollments, cyber charters amount to the second-largest district in the state, just behind the school district of Philadelphia. Since 40 of Pennsylvania’s 66 counties have no brick-and-mortar charter schools, cyber charters are the only alternative to the traditional public school.

“This recent audit found that cyber charter schools in Pennsylvania increased their operating surplus by $365 million, with an enrollment surge of 60 percent, whereas public school districts hold a combined $6.8 billion in reserve funds, increasing property taxes, even as enrollment declines.

The Auditor General notes that the legal increase in reserves by cyber charters is due in part to “outdated funding formula that does not use actual instruction costs to determine tuition, set guidelines for spending or set limits for cyber charter school reserve funds.”

Cyber charters have unique financial needs, given their inability to collect taxes and reliance on public school districts to transfer tuition dollars, which often proves unstable. These schools need their reserves to ensure they can continue to serve their students despite funding fluctuations.

Pennsylvania currently spends $22,000 per pupil in public schools. In contrast, cyber charters receive roughly $14,000 per pupil. [CG1] Gov. Josh Shapiro has proposed cutting this funding nearly in half, providing only $8,000 per pupil. It is important to note that, historically, district public schools keep approximately 25 percent of student funding, passing on only 75 percent to cyber charters.

School districts also spend millions of taxpayer dollars for contract lobbyists and associations that lobby (including the push to cut charter school funding) and allocate funds for advertising and marketing expenses to promote limiting educational choice.

Commonwealth Foundation Senior Education Policy Analyst Rachel Langan issued the following statement in response to the report:

“Cyber charter schools exist in a delicate financial balance. Unlike traditional district schools, cyber charters cannot rely on consistent funding sources like local and state taxes. The only way for these schools to provide a stable, predictable environment for students, teachers, and staff is by maintaining a reliable reserve. By keeping such reserves, cyber charters can continue to explore, implement, and sustain innovative educational programs catered to their students without fear of funding shortfalls each school year. Cyber charters should not be punished for exercising fiscal responsibility for the sake of offering diverse educational options to Pennsylvania students.

“To ensure the equitable and accountable use of taxpayer dollars, we must re-evaluate how the commonwealth funds all education options. Despite Pennsylvania being the seventh-highest spender per pupil nationally, student achievement is still stalling.

“Pennsylvania families need a system that prioritizes achievement, choice, and fiscal responsibility. Unless lawmakers come through with reforms that allow education funding to follow the student and hold all schools accountable to responsible spending, Pennsylvania students will continue to fall behind.”

For more information on Pennsylvania’s Education Spending, please review the resource below:

2025 State of Education Spending in Pennsylvania

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