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PDE calls auditor general findings on cyber charters ‘concerning’; $8,000 tuition cap proposed to relieve districts
Summary
Acting Secretary Rowe said the auditor general’s audit of cyber charter schools highlighted real concerns about fund balances and capital spending; the administration’s $8,000 per‑student cap for cyber tuition is intended to reduce district transfers and bring cyber fund balances to a more typical level.
Members cited a recent auditor general performance audit that spotlighted five cyber charter schools with rapidly growing fund balances and large capital purchases. Representative Adney characterized the audit’s findings — including a 144% increase in fund balances for five cyber schools over three years and large capital spending by the Commonwealth Charter Academy — and asked what further reforms the legislature should consider.
Acting Secretary Rowe said she was "exceptionally concerned" by the audit and described recent administrative and legislative steps to address district fiscal strain. She noted last year’s transfer subsidy that returned roughly 9% of tuition funds to districts and described the governor’s proposal to cap cyber tuition at $8,000 per student as another measure to reduce the flow of dollars out of district budgets and to lower unusually high cyber school fund balances. PDE staff estimated that the $8,000 cap could save school districts approximately $378 million in the budget year and that a cyber‑tuition adjustment for high‑need special education students had a separate projected savings figure of about $95 million.
Rowe also said charter and cyber schools are public schools that serve students and that reforms should be crafted to preserve services while protecting district finances. Committee members asked about possible guardrails, such as limits on fund balances, capital spending restrictions or capital‑spending guardrails for cyber providers; Rowe and staff agreed those are policy choices the legislature can consider and that the department would provide data and implementation guidance.
Next steps: the committee requested PDE supply the auditor general report, district‑level fiscal impacts of proposed cyber tuition caps and options for statutory or regulatory guardrails.
