HARRISBURG, Pa. (WHTM) - Following an audit of Pennsylvania's cyber charter schools, the Pennsylvania Auditor General is calling for "major reform" to how the schools are funded.

Auditor General Tim DeFoor released the performance audit of five cyber charter schools that he says show that from July 1, 2020, through June 30, 2023. the schools increased revenue by $425 million and reserves by 144%.

DeFoor notes that this comes due to "an outdated funding formula that does not use actual instruction costs to determine tuition, set guidelines for spending, or set limits for cyber charter school reserve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."

More than 160,000 students attend Pennsylvania's cyber charter schools. The five schools audited were Commonwealth Charter Academy, Pennsylvania Leadership Charter School, Insight PA Cyber Charter School, Pennsylvania Cyber Charter School, and Reach Cyber Charter School.

“I am now the third auditor general to look at this issue and the third to come to the same conclusion: the cyber charter funding formula needs to change to reflect what is actually being spent to educate students and set reasonable limits to the amount of money these schools can keep in reserve,” Auditor General DeFoor said. “Our recommendation is that in the next six months the Governor should appoint a task force to review the funding formula and direct it to issue a report within nine months determining a new formula that is equitable, reasonable and sustainable, and the General Assembly should act within six months of the taskforce’s report to facilitate the enactment of legislation.  The most important thing we can do is to provide our children with a quality education and as leaders we need to set our personal agendas aside and fix how we fund education in this state.”

The full audit can be read on the Auditor General's website.

“In this audit, we found these cyber charter schools legally increased their revenue from $473 million in the 2019-2020 fiscal year to $898 million in the 2022-2023 fiscal year,” Auditor General DeFoor said. “We found instances of the cyber charter schools legally using taxpayer dollars on things like staff bonuses, gift cards, vehicle payments and fuel stipends. Additionally, Commonwealth Charter Academy spent $196 million to purchase and/or renovate 21 buildings, which to us seems a bit out of the ordinary for a public school that is based in online instruction.”

Susan Spicka with the Education Voters of Pennsylvania says a task force would be too slow and that the problem is well known.

"Every time a student goes to a cyber charter school, the school district writes a check for that student, a tuition check," said Spicka. "And the payment has no relationship to the amount of money that it costs to educate that student."

Commonwealth Charter disagreed with the audit saying charters are popular with families and still get less per student than the average public school, adding "additional reductions in funding would be irresponsible, unfair and unconstitutional."

Why hasn't the problem been fixed? DeFoor says politics has a lot to do with it. The twice-elected Republican Auditor General knows many in his party want school choice. Short of that, they'll fight attempts to limit cyber charters.

"This doesn't really impact school choice," said DeFoor. "This is about a funding formula ultimately the taxpayers are paying for."

The audit also found that during the pandemic, the Pennsylvania Leadership Charter School requested and got millions in federal PPE loans that were forgiven while at the same time increasing their revenue balance.