Outgoing state Auditor General Jack Wagner has said for years that Pennsylvania sends too much money to its 16 cyber charter schools.

This week, Wagner said an audit of the state's largest cyber showed the outcomes of that flawed funding system:  unspent millions of taxpayer dollars, wasteful contracts, and too much money spent on advertising.

"There is excess public money being spent to educate a child that sits at home and goes to school on a computer compared to a child that goes to school at a school district," said Wagner in a Thursday interview with public radio station WESA  in Pittsburgh.

In Pennsylvania, cybers are independently managed schools that receive public funding to operate.  They provide most of their instruction online.  Wagner and other critics contend that cybers — which generally have higher student-teacher ratios and lower facilities costs than brick-and-mortar schools — receive more money than they need to operate.  The auditor general's office has called for an overhaul of the state's charter funding system.

"There is over $300 million in public taxpayer dollars being lost each and every year due to the flawed funding formula for charter and cyber charter schools," said Wagner.

The audit released Thursday was of PA Cyber.  With over 10,000 students drawn from all across the state, the school is Pennsylvania's largest cyber.  Wagner said PA Cyber ended the 2009-10 school year with a $13 million budget surplus and spent nealy $4 million in advertising expenses between 2008-10.  

"These are taxpayer dollars that were allocated specifically for funding public education," said Wagner in a press release.  "Pennsylvania Cyber Charter School should stop spending taxpayer funds for advertising and should allocate them to additional student education services."

PA Cyber officials did not respond to a request for comment.  

The audit by Wagner's office found that the school "complied, in all significant respects, with applicable state laws, contracts, grant requirements, and administrative procedures."

Pennsylvania Department of Education Press Secretary Timothy Eller said there's nothing illegal about a cyber charter, or any other public school, holding a reserve fund or advertising.  Eller noted that because cybers operate on a statewide basis and don't serve as the default school for any particular community, they have no choice but to recruit students.  He  said decisions about how much should be spent on things like advertising should be left to local decision-makers.

"Trying to determine what's appropriate and not appropriate, it's in the eye of the beholder," said Eller.  

On Thursday, Wagner called for the Department of Education, as well as Gov. Tom Corbett and the state legislature, to fix what Wagner called "a broken system."

Eller said that Ronald Tomalis, Pennsylvania's education secretary, has acknowledged that there "is a need to look at the cyber charter funding formula" and called it "unfortunate" that legislators have twice in recent months failed to enact charter reform legislation.

Earlier this week, NewsWorks and the Public School Notebook reported that state approval of proposals for eight new cyber charters could cost Pennsylvania taxpayers $350 million over the next five years, despite concerns about cost and academic quality. 

Eller said the state Department of Education is required by law to follow the existing process for reviewing charters and that "there would be no impact on approving or denying those charters" based on the concerns raised by the auditor general.

This story was reported as part of a partnership in education coverage between WHYY/NewsWorks and the Public School Notebook.