Jack Wagner – Auditor General

Jack Wagner is running for re-election this year. He is an honorable man deserving of another term in office. This story is from June 2007 and features some of the work that Jack has done for Pennsylvania.

Auditor General Jack Wagner Calls for Changes in Funding Of Charter Schools After Audits Show Overpayments

HARRISBURG (June 19, 2007) – Auditor General Jack Wagner today called on Gov. Rendell, the General Assembly and the Department of Education to work together to standardize the funding system for Pennsylvania’s 119 charter schools, including 11 cyber charter schools, to make it fairer for taxpayers and the commonwealth.

Wagner issued the call after releasing audits of three charter schools which showed that all three received hundreds of thousands of dollars more in reimbursement money than their actual costs for educating students.

The three charter schools were the Pennsylvania Global Academy Charter School and the Northwest Pennsylvania Collegiate Academy Charter School, in Erie County; and the Roberto Clemente Charter School in Lehigh County.

The two Erie County charter schools ceased operations on June 30, 2005, following the settlement of a lawsuit by the Erie County School District; Roberto Clemente remains open.

“The fact that all three charter schools were legally entitled to receive more funding than they needed to educate students underscores the critical need to fix the state’s Charter School Law immediately,” Wagner said. “The public is rightly concerned about rising property taxes and the escalating cost of education. We need to reassure taxpayers that their hard-earned dollars are being spent fairly and efficiently.”

According to auditors, Pennsylvania Global Academy, which opened in 2003, received $318,243 more than the actual cost of education during the 2003-04 and 2004-05 school years.

Auditors determined that Northwest Pennsylvania Collegiate Academy, which opened in 2003, received $593,158 more than the actual cost of education in the 2003-04 and 2004-05 school years.

They also found that Roberto Clemente, which opened in 2000, received $474,888 more than the actual cost of education during the 2003-04, 2004-05 and 2005-06 school years.

The overpayments were made by public school districts that were required by law to reimburse the three charter schools for students who had transferred. The charter school law requires school districts to pay an amount equal to selected budgeted expenditures from the prior school year. The charter school is not required to reconcile these payments with their actual costs at the end of the school year, Wagner said.

“Because each school district pays an amount equal to its particular budgeted expenditures from the previous school year, the payments get murkier when more schools are involved,” Wagner said.

“The way the law is currently written, if a charter school receives students from multiple districts, each district could pay a different tuition rate for the same service. This would lead to one district subsidizing another district’s students.”

Wagner noted when a tuition billing does not involve a charter school, such as when a student attends a school in another public school district, the formula is based on the actual costs of education. In these cases, he said, the districts reconcile the actual costs at the end of each year; no such reconciliation must be made at charter schools.

The commonwealth reimbursed the Allentown City School District nearly $1.1 million during the audit period for students attending Roberto Clemente. In the case of the Pennsylvania Global Academy and the Northwest Pennsylvania Collegiate Academy, the commonwealth reimbursed the sending school districts a total of $670,135 and $639,933, respectively.

The commonwealth is required by law under the general provisions of the Public School Code of 1949 to reimburse school districts up to 30 percent of tuition paid to charter schools, depending on commonwealth appropriations. Since the state reimbursement is based on the charter school tuition formula that has no relationship to the actual cost of education, the commonwealth also likely overpaid for services, Wagner said.

In addition to the funding observations, the charter school reports also contained these findings and observations:

  • A majority of Roberto Clemente’s board members and school principals failed to file their Statements of Financial Interests with the State Ethics Commission, as required by the state ethics act during the audit period;
  • All of Northwest Pennsylvania Collegiate Academy’s board members failed to file their Statements of Financial Interests at some time during the audit period and the charter school also failed to file its annual financial report for the 2005 school year and its general fund budget for the 2004 school year;
  • The existence and operation of both Northwest Pennsylvania Collegiate Academy and the Pennsylvania Global Academy were in violation of the Charter School Law, and indicate that the law should be amended to provide the Department of Education with more direct oversight and control over charter schools, including the authority to direct school districts and charter schools to cease conduct that violates the law.

“Charter schools are an innovative and promising component of Pennsylvania’s education system,” Wagner said. “I call on Gov. Rendell, the General Assembly and the Department of Education to work cooperatively to provide charter schools with the resources they need to educate their students and to ensure proper monitoring of their compliance with their mandates, without placing additional hardships on traditional public schools and taxpayers.”

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 approximately 5,000 audits per 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.

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