Innovative Schools

Charter School

Law and Authorizer

Legislative Update – House Bill No. 205 (Synopsis)

Section 2 

• A charter in its first year of operation will receive 50% of funding at the beginning of the fiscal year (as long as DOE has preliminary roster of students by May 1), an additional 25% of funding on October 1, and the remaining 25% of funding on February 1.

Section 3 

• A charter school will put all Standardized Financial Report Forms for the current fiscal year on its website and the final monthly Standardized Report Forms for each previous fiscal year.  If a school is required to file Internal Revenue Service Form 990, then it and the Form 990 from the year before will be on website.
• Increasing a school’s authorized enrollment by more than 15% is a major modification.
• Impact on schools that the new charter school students will likely be pulled from should be considered, but cannot alone be the basis for approval or disapproval of the enrollment increase.

 Section 5 

• New charter school applications should be submitted between November 1 and December 31 for schools that are prepared to open the second August 1 after (about 19 months later).
• Application by a highly successful charter school operator should be submitted between November 1 and December 31 for school to admit students the following August 1.  Dates can be adjusted by the authorizer and applicant if students are potentially being displaced by a closure of a charter school.
• Renewal of charter applications should be submitted by September 1 of the year before the calendar year in which the current charter will expire.  All renewals of charters that expire on or before December 31, 2012 should be submitted by October 15, 2011.
• Applications for conversions of existing public schools to charter schools should be submitted by October 30 the year before the year that a new school year begins.
• If due dates fall on a weekend or holiday, time is extended to the next working day.

 Section 7 

• “Highly successful charter school operator” – entity that currently operates or whose principals currently operate schools showing sustained high levels of student achievement and sustained fiscal stewardship.
• A highly successful charter school operator can be authorized to operate a charter school at the site of and serving students attending a charter school whose charter has been revoked, not renewed, or is on formal review and the board agrees to abandon it.
• Applications should disclose any ownership or financial interest in the charter school including building and real property used by the school, founders, or board of directors.   If the information is not known at time of application, it should be disclosed once it’s known.  The information is required to be given to any member of the public upon request. 
• Board members and founders must complete a criminal background check and a check of the Child Abuse Registry.  Anyone convicted of a felony or crime against a child will not serve as a founder or board member.  Other crimes may be disqualifying.  Current members need to complete checks by February 1, 2012.  The founder or board member will be provided with the information, and it is confidential (will only be shared with chief officer and one additional person).  Costs for checks will be paid by applicant.

 Section 9 

• Charter schools will have an audit of business and financial transactions, records, and accounts after July 1 for the previous fiscal year.  Results should be shared with DOE, and the annual report (financial statement and audit) should be on the school’s website.

 Section 10 

• A transfer of a charter before its expiration will require a petition by the charter school or authorizer to the new authorizer.  It is considered a major modification.

 Section 11 

• Each charter with a common board of directors should be treated separately and individually.

 Section 12 

• If a charter school is in financial distress, DOE may appoint a Financial Recovery Team.
• A school is in financial distress if district financial position report projects less than 1 month’s carryover, projected payroll expenses will exceed local revenues, the school has been placed on formal review board based on finances, or it is projected that the school cannot fund 1 or more payroll disbursements.
• Financial Recovery Team will have control over the expenditure of funds including the right to approve the annual budget; approve financial reporting; request state financial assistance; approve accounting policies, procedures, and reports; and require a Financial Responsibility Committee.
• The Financial Recovery Team will report monthly to the Governor, the General Assembly, Director, and the Controller General.
• The District or charter school will reimburse the State for costs of the Team.
• The Team or members can be removed once the school is no longer in financial

For the entire House Bill No. 205, click here.