2013-03-21 / Local & State

Auditor General Says Charter Payments Improper

By Peter Jackson


HARRISBURG, Pa. (AP) – Improper lease reimbursements to charter schools may have cost state taxpayers millions of dollars, the state's newly elected fiscal watchdog said Thursday.

Auditor General Eugene DePasquale released audits of six charters that cited improper lease reimbursements totaling more than $550,000 over multiple years.

“The charter school law was established to provide students and parents with publicly funded education alternatives,” DePasquale said at a Scranton news conference. “The charter schools are funded by tuition payments from school districts and should be focused on providing the best possible education for students, not looking for additional revenue streams funded by taxout payers.”

The audits DePasquale released mostly involved buildings leased from organizations with direct ties to the schools: Basically, a privately run school would lease a building owned by its holding company or a similar organization and then bill the Department of Education for reimbursement with taxpayers' money.

DePasquale said his office focused on the issue in its ongoing performance audits because a 2010 review of Philadelphia charter schools by the city controller's office turned up similar problems. As part of the state audits, officials traced the ownership of property leased to the charter schools by inspecting the deeds on file in each county, he said.

The cost to state taxpayers could escalate to millions of dollars if the practice turns to be widespread among Pennsylvania's other privately run, publicly funded charter schools, DePasquale said.

An organization that represents 120 charter schools said it was unfamiliar with details of the latest audits but welcomes audits as a way to improve operations and ensure accountability.

“The situation may be a process issue as opposed to any intentional or inappropriate actions on the part of the charter schools,” the Pennsylvania Coalition of Public Charter Schools said.

DePasquale acknowledged that some officials at the audited schools seemed unaware that lease reimbursements under such circumstances are prohibited.

“ They were saying, ‘Why didn't anybody tell us it was wrong?” he said.

Education Secretary Ron Tomalis is aware of the audit findings and will review them, his spokesman Tim Eller said.

There are 159 bricks-andmortar charter schools and 16 Internet-based cybercharter schools operating in Pennsylvania, according to the state Department of Education.

The audits released Thursday focused on charter schools in Lehigh, Luzerne, Lackawanna, Mercer, Bucks and Monroe counties.

DePasquale, a Democrat who took office in January, said he hopes to work with Republican Gov. Tom Corbett's administration and the charter schools to resolve lease reimbursement problems and other issues.

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