During a conference call with reporters, he said charter school operators and critics had told him the lack of clear direction and oversight by the state caused problems for charters and districts.
"In fact," he said, "several participants in the public meetings compared the current situation to the wild, wild west."
An independent statewide charter oversight board would provide needed clarity and direction, DePasquale said.
The board could be funded, in part, from the money the Education Department now spends on its charter office.
"With more than $1 billion being spent on charter schools every year," according to the report, "improved oversight is imperative."
The board would settle disputes between charter schools and districts, enforce regulations, develop a streamlined appeals process, and verify data that charter schools include in annual reports filed with the state.
Now, DePasquale said, there is little evidence that anyone reviews the reports.
Timothy Eller, an Education Department spokesman, said officials were reviewing the report.
Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said his organization was interested in learning more about several of DePasquale's proposals, including the oversight board.
"It's intriguing in concept, but the devil is in the details," he said. "We'd like to know more."
Fayfich said DePasquale "did a good job of listening to people on all sides of the issues."
Districts have responsibility for authorizing and overseeing charter schools within their boundaries, except for cyber charter schools, which are overseen by the Education Department.
The state law, DePasquale said, "punts a lot of this to the local school districts, but does not give them any tools to deal with this," except for when the schools are up for renewal after five years.
He said all districts should be given the same power as the Philadelphia School Reform Commission and be permitted to award one-year renewals to schools facing allegations of ethical, financial, and academic problems.
Successful charter schools, he added, should be eligible to be renewed for seven years.
DePasquale said complaints about oversight and confusion about the law had existed for years but had been exacerbated by recent cuts in state funding for schools. In particular, he cited the 2011 elimination of a state program that reimbursed districts for part of their charter school costs.
"Today, many school districts and charter schools are combatants fighting for students and for public dollars," the auditor general wrote.
Philadelphia, which has more than half the state's 174 charter schools, lost more than $100 million in reimbursements in 2011-12 alone.
DePasquale also urged the state to shift the burden of paying for students enrolled at cyber schools from the districts where they live to the state. Now districts must pay cyber schools but have no control over them.
State Rep. James Roebuck (D., Phila.), cochairman of the Education Committee, praised DePasquale's report.
"It's valuable to have independent confirmation of many of the problems and solutions I have identified," said Roebuck, who has introduced legislation to revamp the charter law.
DePasquale said he hoped the report would serve as a catalyst and a blueprint for the first major revision of the 17-year-old law.
Copies were sent to every member of the state legislature, the governor, the Department of Education, charter school leaders, school boards, and superintendents.
"I have no way to enforce this happening," DePasquale told reporters. "If I did, I would decree it right now."