Approximately one-third of Indiana charter schools spent more than they received in fiscal years 2016 or 2017, according to an analysis by Indiana Education Insight of audit reports posted on the Indiana State Board of Accounts website. The majority of the deficits were caused by weak enrollment.

Auditors issued going-concern opinions for five charter schools identified as on the brink of closure due to severe financial challenges. Another group of five charter schools were flagged as out of compliance with the terms of their debt covenants, a sign of deteriorating financial health.

Several charter schools achieved balanced budgets only after receiving short-term cash flow relief. For example, the State of Indiana agreed to suspend repayment on a Common School Fund loan for at least one charter school. At another school, an authorizer took the rare step of waiving its annual administrative fee. Others benefited from reductions in the service fees charged by their Education Management Organization (EMO), although the reductions were often structured in the form of a loan that will have to be paid back. Some charters avoided a deficit by relying on the private financial assistance of a single wealthy patron, benefactor, or foundation.

The dozens of charter schools that operated at a deficit in one or both years span nearly every segment of the charter school sector. They include urban, suburban, and rural charter schools from Gary to Evansville and in between; charter schools that contract with for-profit and non-profit vendors to manage key operations and charter schools without outside help; new schools and schools founded more than a decade ago; elementary, high school, and adult charter schools; schools that enroll less than 100 students and schools that enroll more than 1,000; and schools with almost every letter grade on the state accountability scale. Charter schools with a deficit in one or both fiscal years were also found across nearly all authorizer portfolios.

Charter schools are exempt from House Enrolled Act 1315, the legislation passed during the 2018 special session requiring the state Distressed Unit Appeal Board (DUAB) to establish a fiscal monitoring and early warning system for identifying schools before they reach financial insolvency. The new law directs the state to publish a dashboard of fiscal indicators for all school corporations by January 1, 2019. The Legislative Services Agency estimated in October 2017 that about 40% of traditional public school corporations operate at a deficit.