KC Board Discusses Budget, “Abysmal” Cyber Charter School Audit, Academic Performance

By Christopher Miller

BALD EAGLE TOWNSHIP – Keystone Central School Board heard from Business Manager Joni MacIntyre regarding the 2025-2026 budget update and a recent webinar she attended on cyber charter schools funding reform.

The current timeline states that the review for the proposed budget will be available at the April 10 school board meeting.

“We are currently seeing a small increase in the state subsidy of about $108,000, which is very small as compared to last year’s amount,” Joni said.

As of February, notable expenses include Liberty-Curtin bond obligations of $400,000 which will see no increases after this year, a health insurance increase of $1.7 million (15% over last year), a cyber charter school increase of $1.5 million due to an increase in enrollment and rates, a $275,000 expense for alternative education placement, and an increase in transportation expenses for additional transport needed for special education and alternative education students.

Anticipated reductions district-wide to date include $430,000 saved in staff retirement and attrition, curriculum savings of $98,000, $6,500 saved in the elementary schools, special education savings of $270,000, technology savings of $522,000, all of which trimmed about $1.3 million from the budget. Joni stated that her office was “still working” in other areas to trim additional money from the budget.

Calculations under consideration currently are expenses from operating budget requests, staff retirement and attrition, healthcare rates, increase in bond principal, cyber charter and KCSD virtual academy, capital projects, and use of fund balance of budget reserves. 

Revenue currently under consideration includes a loss of ESSER funding, possible maintaining state funding, a decrease in title funding, potential tax increases, and investment opportunities with lower interest rates.

Joni then went into a conversation about a webinar she attended recently about cyber charter school funding reform.

Governor Shapiro’s 2025-2026 budget proposal includes a proposed increase of $75 million (or 0.9%) for basic education for all 500 school districts, and a $40 million increase (2.7%) for special education.

The funding reform calls for a discontinuation of the cyber charter transition line item which was funded at $100 million for the current school year. This would be replaced with a new cyber reform proposal that would establish a base cyber charter tuition rate of $8,000 per student, per year, which would be a net savings of $278 million state-wide annually if adopted.

Enrollment in five cyber charter schools jumped from 27,450 in 2020 to 44,056 in 2023 while revenues and expenses almost doubled between those same years. Fund balances jumped more than 240% in the three year period: from $254 million in 2020 to over $618 million in 2023.

An audit, conducted by State Auditor Tim DeFoor’s office, noted that certain transaction types, while permissible and within their autonomy in financial management, may be considered “uncommon or unique” for a cyber charter and public school entity. These items included employee bonuses in excess of $22 million, fuel stipends of $2.3 million, vehicle fleet expenses of $1.3 million, and a Family Funfest Event to the tune of $70,280.

Audit findings from PA Cyber included employee bonuses of $1.4 million to staff for work during the pandemic. These included a $500 bonus and a $1,500 bonus, respectively, in July 2020 and June 2021. “Those payments may be uncommon for a public school entity,” said screenshots of the webinar findings.

Audit findings for REACH Cyber Charter included $4.3 million in gift cards to students and their families, along with $32,000 in rent or utility assistance. Bonuses were also given to staff at a flat-rate, and for effectiveness. These amounted to over $7.1 million in payments.

Joni expressed the need to “contact your state representatives, state senators, to create balance in the system.”

A talking point included that Auditor Tim DeFoor has made it clear that “cyber charters are being paid more than they need to educate students and are spending tax dollars ways that would be unacceptable for a district.”

When it comes to accountability, talking points there include how cyber charter performance is abysmal, cyber charter schools allow students to avoid accountability for truancy, boards are not elected, and that there is no limit on fund balances.

In a chart showing some cyber charter schools in the state as compared to PA State Average for Assessments in English, Math, Science, and students not chronically absent, most schools rated well below the PA State Average, one of the worst in academic performance being Commonwealth Charter Academy. 

School board comments on the audit findings report included comments such as, “I don’t understand why they don’t have strict guidelines like brick and mortar schools have,” “it is interesting how they are buying buildings since they are a computers-based school,” and, “it is criminal, beyond belief that if we even tried this, even a fraction of this, we would have auditors here, we would be held criminally negligent, people would be losing their jobs,” and that “cyber school law is a farce,” and that, “we are here scrambling to make a budget and they are wasting money.”