Skip to main content

K-12 Education: Department of Education Should Help States Address Student Testing Issues and Financial Risks Associated with Virtual Schools, Particularly Virtual Charter Schools

GAO-22-104444 Published: Jan 31, 2022. Publicly Released: Mar 02, 2022.
Jump To:

Fast Facts

Even before the pandemic, virtual public school enrollment was growing—mostly in virtual charter schools.

Compared to students in brick-and-mortar public schools, 2018-2019 data shows that a lower percentage of virtual school students took state achievement tests, and their scores were significantly lower.

Also, Education officials said the virtual environment makes it harder to monitor attendance. Certain federal funds are allocated using attendance data, so there's a risk that virtual schools could get more or less funding than they should.

Our recommendations address these and other issues.

Enrollment in Virtual Charter Schools by State, School Year 2019-2020

Map of the United States showing virtual charter school enrollments

Skip to Highlights

Highlights

What GAO Found

Virtual charter schools—public charter schools that operate entirely or mostly online—largely depend on self-paced, asynchronous (accessed at any time) instruction and often rely on parents to act as instructors, according to GAO's review of a nationally representative sample of virtual charter school websites and interviews with school officials. Officials told GAO that families may choose these schools partly for these reasons, but students can struggle with the level of independence and parents can find the time commitment overwhelming.

Virtual charter schools had significantly lower proficiency rates on states tests compared to other school types. For example, the average math proficiency rate for virtual charter schools was 25 percentage points lower than the rate for brick and mortar traditional schools (see figure). In addition, a smaller proportion of virtual school students participated in state tests. However, there is a lack of systematic information about why virtual schools have lower participation rates and what common challenges across states may be contributing to low rates.

Average Student Proficiency Rates in Math and Reading, by Public School Type, School Year 2018-2019

Average Student Proficiency Rates in Math and Reading, by Public School Type, School Year 2018-2019

Virtual schools may pose increased financial risks due to challenges measuring attendance and—for charter schools, specifically—contracts with management organizations. State officials in the four states GAO reviewed reported different ways of measuring attendance for virtual compared to brick-and-mortar schools. Attendance calculations can affect the amount of certain state and federal funds a school receives. In addition, an estimated 42 percent of virtual charter schools had contracts with for-profit management organizations based on GAO's review. These contracts can pose heightened financial and programmatic risks to federal funds, according to Department of Education officials. To better understand the scope of the issue, Education officials told us they required states to report information about their contracts with charter school management organizations, including their for-profit status. However, GAO found inaccuracies and undercounting of management organizations in these data. Education's 2020 Data Strategy calls for using appropriate, accurate data. Unless Education takes steps to improve data quality, and to examine and address barriers to measuring and reporting student attendance consistently, inappropriate allocation of federal funds will remain a risk.

Why GAO Did This Study

Enrollment in virtual schools has increased faster than enrollment in other types of public schools in recent years. This trend was accelerated by COVID-19, which prompted an increase in distance learning. Virtual charter schools account for about 70 percent of students enrolled in virtual schools.

GAO was asked to review virtual charter school operations and oversight. This report examines (1) how virtual charter schools provide student instruction, (2) how virtual schools' academic proficiency and participation rates on state tests compare to other school types, and (3) the extent to which virtual charter schools' operations present challenges for state and federal oversight.

GAO interviewed state and charter authorizer officials from four states collectively serving over 50 percent of all virtual charter school students in 2019-2020. GAO analyzed federal data on virtual charter school enrollment and academic outcomes; reviewed a nationally representative sample of virtual charter school websites; reviewed school financial information; and interviewed federal and school officials.

Recommendations

GAO is recommending that Education examine lower testing participation rates in virtual public schools, and ensure states report comparable attendance information for public schools in a state as well as accurate information on charter schools' contracts with management organizations. Education agreed with these recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Education The Secretary of Education should examine the significantly lower participation rates of students attending public virtual schools on required state standardized tests to identify challenges contributing to the lower participation, and share strategies to help states increase the participation of these students. (Recommendation 1)
Open
Education agreed with this recommendation. Officials said the Institute of Education Sciences has made significant outreach efforts over the last two years to gather input from state and local officials, and to disseminate information useful to all schools including virtual charter schools. Education also noted that it has funded a technical assistance center to support states and districts in tracking attendance and addressing chronic absenteeism, and that states can use information developed through this center for virtual schools as needed. In November 2022, ED said it will review the assessment data submitted by States following the 2021-2022 school year and examine patterns of participation in virtual schools compared to brick-and-mortar schools in each State (including traditional, charter, and alternative public schools). Education anticipated having complete data from the 2021-2022 school year in June 2023, at which time it would work on the review. We will monitor the progress of these efforts.
Department of Education The Secretary of Education should take steps to help states ensure that they report comparable attendance data across their virtual and brick-and-mortar schools for federal reporting purposes. (Recommendation 2)
Open
Education agreed with this recommendation. Officials noted that it has funded a technical assistance center to support states and districts in tracking attendance and addressing chronic absenteeism, and that states can use information developed through this center for virtual schools as needed. In November 2022, Education said it would review the attendance data submitted by States following the 2021-2022 school year and will examine patterns of absenteeism in virtual schools compared to virtual schools in each State (including traditional, charter, and alternative public schools). Education anticipated having complete data from the 2021-2022 school year in June 2023. We await further progress on this efforts.
Department of Education
Priority Rec.
The Secretary of Education should identify the factors that cause underreporting and misreporting of information on management organizations that contract with charter schools, including virtual charter schools, and take steps to help states report accurate data on these contracts. (Recommendation 3)
Open
Education agreed with this recommendation. Officials said the Institute of Education Sciences has made significant outreach efforts over the last two years to gather input from state and local officials, and to disseminate information useful to all schools including virtual charter schools. Education also noted that it has funded a technical assistance center to support states and districts in tracking attendance and addressing chronic absenteeism, and that states can use information developed through this center for virtual schools as needed. As of March 2024, the agency revised Charter Schools Program (CSP) regulations to strengthen safeguards against for-profit organizations applying for grants or subgrants under the CSP. However, because CSP does not award grants to these charter schools, it is not clear that these steps will help states report accurate data on these contracts for virtual charter schools or charter schools that contract with for-profit management companies. To fully implement this recommendation, Education should take steps to help states report accurately on these contracts for all charter schools, not only CSP grantees.

Full Report

Office of Public Affairs

Topics

Charter schoolsData collectionDemographicsFederal fundsFinancial accountabilityParticipation ratesPublic schoolsSchool districtsSchoolsStudentsStudents with disabilitiesTeachersTest scoresWebsitespandemicsStudent performance