Auditor General Jack Wagner Again Urges General Assembly to Fix Flawed Charter School Funding Formula

Says fix needed before more money is spent on new education initiatives

HARRISBURG, Pa., Dec. 6, 2011 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner today urged the General Assembly to fix an oversight in an education reform bill that recently passed the Senate to address the flawed charter school funding formula, which, he said, is costing taxpayers hundreds of millions of dollars.

In a special report issued in 2010, Wagner found that taxpayers spent $936 million on 116 charter and 11 cyber charter schools with an enrollment of 73,054 students during the 2008-09 school year. In that school year, just over $700 million was spent on charter and cyber charter schools and about $225 million in reimbursements went to school districts, without knowing what it actually costs to educate a child in a charter or cyber charter school. Consequently, taxpayers paid an additional premium payment of $3,122 per child to school districts for students who transferred to a charter or cyber-charter school.

"Money is being spent without a clear idea of what it actually costs to educate a child, resulting in a system that is unfair to school districts, charter and cyber charter schools, and most importantly, taxpayers," Wagner said. "The charter school funding formula must be fixed before the General Assembly considers spending more money on alternative forms of education."

Wagner said that he voted for charter schools as a state senator in 1997 and that he supports them as a positive force in education reform. However, he believes that the current funding method for charter and cyber charter schools is a bad deal for taxpayers.

Wagner's report found that based on state law, school districts paid different tuition rates for students attending the same charter/cyber charter school, resulting in some school districts subsidizing others. Tuition varied from $6,000 per student to $16,000 per student depending on the actual cost of educating the child at the sending school district not the true cost of educating the child.

The report also found that cyber charter schools educate students at a lower cost than brick-and-mortar charters, but the funding formula is the same. Consequently, cyber charters could potentially be attaining additional revenue surpluses, while their brick-and-mortar counterparts operate with much smaller margins.

"Now is the time to fix the formula for funding charter schools," Wagner said. "With Pennsylvania still mired in its greatest economic downturn since the Great Depression, we can't afford to be wasting precious financial resources on schools whose costs currently have absolutely no basis whatsoever on what is actually needed to educate our children."

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly.  He is the commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations.  The Department of the Auditor General conducts thousands of audits each year.  To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's website at www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General