NC Schools Superintendent Mo Green discusses the academic gains of students taking and passing Advanced Placement courses during a meeting of the State Board of Education, Nov. 5, 2025. (Photo: NCDPI video)
The North Carolina State Board of Education is asking the General Assembly to change how virtual charter schools are funded, proposing to replace county-based payments with a statewide per-pupil rate.
Under current law, virtual charters receive state funding based on the per-pupil rate of the district where their administrative office is located. Because both current virtual academies are based in Durham, which has funding levels near the statewide average, DPI officials noted the change would not significantly shift their current budgets.
“As statewide virtual charter schools increase in number and in the location of their offices, the variation in funding between different districts may make this issue more salient, which is why DPI and the State Board are proposing this change,” Geoff Coltrane, Senior Director for Legislative Affairs and Strategy, said in a statement to NC Newsline.
“These schools serve students in dozens of counties,” said Alan Duncan, vice chairman of the State Board of Education. “Funding them based on where their office sits no longer reflects the student population they serve.”
The change would affect the state’s two largest virtual charters — North Carolina Virtual Academy and North Carolina Cyber Academy — which serve over 6,300 students. Both schools are holding a combined $25.7 million in reserves, with NC Virtual Academy alone holding more than $16 million.
These balances have prompted questions about transparency and whether public dollars are being sufficiently reinvested in students. Both schools have been designated as “continually low-performing” since they began operating a decade ago as pilot programs, though NC Virtual Academy exceeded growth expectations in 2023.
During a state board discussion this week, members questioned whether virtual schools should receive the same funding levels as traditional schools, given their lower operating costs and large fund balances. The conversation also touched on the role of for-profit management companies that provide curriculum and operations for the nonprofit academies.
“Why are we allowing our students to continue to be exposed to this inadequate form of education that is creating enormous profits or fund balances for outside entities?” Duncan asked.
Brooke Gabbert, a spokesperson for North Carolina Virtual Academy, defended the school’s fund balance as a product of “careful, long-term planning” intended to sustain student programs such as credit recovery and career pathways.
“As a virtual public school, we’ve worked to plan responsibly and ensure that the programs serving our students remain stable and sustainable over time,” Gabbert said.
She added that the reserves allow the school to meet state accountability expectations while maintaining “innovative public school models.”
North Carolina Cyber Academy Superintendent Martez Hill defended the school’s record, noting that more than 1,000 students have graduated from the academy over the last decade. “We are making progress as a school,” Hill said. “As we look to the future, we are going to continue to make progress.” He did not specifically address the proposed funding changes or the school’s reserves.
Those concerns dominated a January meeting of the Charter Schools Review Board, where members scrutinized the schools’ five-year renewals. The Review Board approved the renewals, but members asked why millions in taxpayer funds remained in bank accounts instead of being used to address poor academic performance.
“If they’ve truly got $16 million in the bank, why aren’t they using that to make their academic performance better for their students?” asked review board member Todd Godbey.
The number of virtual charter schools in North Carolina is set to reach four next year when NC Connections Academy opens next fall. The review board also approved Dogwood Virtual School as a standalone virtual school last month.
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