In light of the controversy over payments to charter schools during the stalemate over a Pennsylvania budget, the state auditor general Thursday announced that his office would audit the Department of Education's handling of charter-payment appeals.

"The ongoing state budget impasse brought to light potential failures in the process the Department of Education uses to handle school districts' appeals of payments to charter schools," Eugene DePasquale said in a statement.

"With more than $1.1 billion of state education funding going toward charter school tuition payments, it is important to make sure all education funding is handled accurately and appropriately."

Noting that the current system often pits districts against charter school operators, he said the lack of a state budget had exacerbated tensions in every region of the state.

When districts and charter schools have disputes over tuition payments, DePasquale said, the "appeals process should be judicious, fair, timely, and understandable."

The audit will examine that process from Jan. 1, 2011.

If a district does not pay a charter school for one of its students, the state Charter Law says the school can seek money from the Department of Education. The department pays the bill and deducts the amount from the district's state funding.

The department can later hear appeals when there are disputes over issues such as a student's residency or enrollment. Districts have long said the process is stacked in the charter schools' favor.

Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said his organization was unsure of the scope of DePasquale's announced audit.

But Fayfich said he welcomed the auditor general's comments about making sure that charter payment appeals were fair, timely and understandable. He said that if the audit achieved any of those objectives, "it will be an improvement."

Fayfich said that about 200 of the state's 500 districts do not pay charter schools and that the schools get their payments directly from the Education Department.

Fernando Gallard, spokesman for the Philadelphia School District, said the district had a number of charter payment appeals pending in Harrisburg.

He said the district had been talking with the Education Department's office of general counsel about moving the appeals forward since Gov. Wolf took office this year.

"They are looking to figure out a way to resolve the backlog as quickly as possible," Gallard said. He said that the number of cases and the amount of disputed funds were unavailable Thursday.

The issue of charter school payments was highlighted in October in a dispute over whether the state was required to divert gaming revenue to charter schools if districts were not paying their students' tuition during the budget impasse.

Wolf and the Education Department said the law required diverting the funds to charter schools. The Pennsylvania School Boards Association and two districts have filed a challenge in Commonwealth Court that is pending. 215-854-2789 @marwooda