Volume 86, No. 2, Winter 2014
By Albert F. Moran [PDF]

Pennsylvania Auditor General Jack Wagner characterized the Pennsylvania Cyber Charter School’s (PA Cyber) financial numbers as “out of whack.” His choice of words was not unwarranted: an audit of the 2009–10 school year showed that the school somehow commanded a $13.8 million surplus. PA Cyber, like all charter schools in Pennsylvania, is a privately operated institution that depends on taxpayer dollars to function.  Society expects taxpayer funding to be used responsibly and for the ends to which it was intended.  Accordingly, accountability is a key policy concern in the exercise of oversight of cyber charter schools.  Accountability becomes difficult, however, when nonprofit corporations can garner huge surpluses, oversight is a tangled web of state and local bureaucracies, and money can be shifted through complicated networks of corporations—corporations that serve distinct but related purposes and are formed by the same incorporators. This is the legal landscape surrounding Pennsylvania’s cyber charter schools, and it needs to change.

This Comment argues that the temptations to commit fraud are strong for cyber charter school leaders. The legal system as it currently exists perpetuates these temptations. It follows that reforms involving steps to proactively prevent fraud are worth considering. Given the steady expansion of cyber charter schools over the past decade and the continued push to privatize public education, the issue is pressing. This Comment proposes statutory reforms whereby cyber charter school executives would be motivated to use taxpayer dollars responsibly.