The purpose of this rule amendment is to revise the components of required monthly and/or quarterly charter school financial reports by incorporating a standard form. The rule also revises a sponsor’s responsibilities if a deteriorating financial ...

 

DEPARTMENT OF EDUCATION

State Board of Education

RULE NO.:RULE TITLE:

6A-1.0081Charter School and Charter Technical Career Center Monthly Financial Statements and Financial Conditions

PURPOSE AND EFFECT: The purpose of this rule amendment is to revise the components of required monthly and/or quarterly charter school financial reports by incorporating a standard form. The rule also revises a sponsor’s responsibilities if a deteriorating financial condition exists.

SUMMARY: In accordance with Sections 1002.33(9)(g) and 1002.34(11)(f), Florida Statutes, charter schools or charter technical career centers are required to provide a monthly financial statement to the school or center’s sponsor. This rule revises the components of required monthly and/or quarterly charter school financial reports by incorporating a standard form.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: This rule revision creates templates for charter school financial reporting, which will have a minimal financial impact on charter schools.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 1002.33(27) FS.

LAW IMPLEMENTED: 1002.33(9) FS.

A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:

DATE AND TIME: October 15, 2013, 9:00 a.m.

PLACE: Tampa, Florida (The physical location will be posted on the Department’s website no later than 14 days prior to the meeting at http://www.fldoe.org)

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Adam Miller, Executive Director, 325 W Gaines Street, Suite 1044, Tallahassee, Florida 32399-0400

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

6A-1.0081 Charter School and Charter Technical Career Center Monthly Financial Statements and Financial Conditions.

The following provisions have been established to prescribe the format for a charter school or charter technical career center’s monthly or quarterly financial statement required by Sections 1002.33(9)(g) and 1002.34(11)(f), F.S., respectively, and to administer the requirements of Section 1002.345(4), F.S.

(1) Monthly or quarterly financial statement.

(a) A charter school or charter technical career center shall provide a monthly financial statement to the school or center’s sponsor in accordance with Sections 1002.33(9)(g) and 1002.34(11)(f), F.S., respectively, on form IEPC-F1,Governmental Accounting Standards Board (GASB) Monthly Financial Form or IEPC-F2, Non-Profit Monthly Financial Form, hereby incorporated by reference to become effective_______. The school shall provide notes to the financial statement, if applicable, to include other information material to the financial statement. Material is defined as when the magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement. that contains the following information:

1. Projected enrollment for current school year upon which the school’s budget is based.

2. Actual enrollment at time statement is submitted.

3. A balance sheet with assets, liabilities, and fund balances.

4. Year-to-date comparison of budgeted versus actual revenues and expenditures.

5. Notes to the monthly financial statement to include other information material to the monthly financial statement. Material is defined as when the magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement.

(b) The sponsor shall determine whether the monthly financial statement must be prepared on a cash or accrual basis and the selected format shall apply to all schools and centers in the district.

(c) Monthly Ffinancial statements shall be formatted in accordance with the accounts and codes prescribed in the publication titled, “Financial and Program Cost Accounting and Reporting for Florida Schools,” which is adopted in Rule 6A-1.001, F.A.C.

(d) Charter schools and centers and sponsors shall agree in writing to the date by which the monthly financial statements are to be submitted, with the due date being no more than thirty (30) days after the last day of the reporting period month for the prior month’s statement.

(e) Sponsors shall not require that monthly or quarterly financial statements be prepared by an independent certified public accountant, unless otherwise agreed to in the charter or a financial recovery plan.

(f) The reporting requirements of this subsection are supplemental to any financial reporting requirements already established in the school or center’s charter.

(2) Deteriorating financial condition. A deteriorating financial condition is defined as a circumstance that significantly impairs the ability of a charter school or charter technical career center to generate enough revenues to meet its expenditures without causing the occurrence of a condition described in Section 218.503(1), F.S., or a circumstance that has resulted or will result in the occurrence of a condition described in Section 218.503(1), F.S., if action is not taken to assist the school or center.

(a) A deteriorating financial condition may be identified in one of the following ways:

1. The sponsor may determine that a deteriorating financial condition exists through review of a charter school or charter technical career center’s monthly or quarterly financial statement. A deteriorating financial condition may include, but is not limited to, the existence of one or more of the following circumstances:

a. through c. No change.

The sponsor shall notify the school or center’s governing board in writing within seven (7) business days of the determination.

2. No change.

(b) Upon determination under subparagraph (2)(a)1., of this rule or receipt of notification under subparagraph (2)(a)2., of this rule that a deteriorating financial condition exists, the sponsor shall initiate an expedited review and notify the governing board of the charter school and the Department of Education within seven (7) business days. an expedited review, and both parties The charter school and sponsor shall develop a corrective action plan pursuant to Section 1002.345(1)(c), F.S.

(3) through (b) No change.

(c) The corrective action plan shall include the following components:

1. A statement of the condition in Section 1002.345(1), F.S., that initiated the development of a corrective action plan. If the corrective action plan is required due to a deteriorating financial condition, the plan must include the three (3) most recent monthly financial statements submitted to the sponsor pursuant to subsection (1) of this rule and the most recent annual financial audit.

2. through (5) No change.

(6) Correspondence. All correspondence to the Commissioner of Education related to the financial condition of a charter school or charter technical career center shall be addressed to the Office of Independent Education and Parental Choice, 325 W. Gaines Street, Suite 1044 522, Tallahassee, Florida 32399-0400. In addition, electronic correspondence related to the school or center’s financial condition shall be sent to [e-mail]. This includes notifications that a financial condition identified in Section 218.503(1), F.S., has occurred or will occur, requests for the involvement of the Commissioner in creating a corrective action plan, completed corrective action plans, and completed financial recovery plans.

Rulemaking Authority 218.503, 1001.02(1) 1002.33(27), 1002.345 FS. Law Implemented 218.39, 218.503, 1002.33(9)(g), 1002.34(11)(f), 1002.345 FS. History–New 5-3-10, Amended________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Adam Miller, Executive Director, Office of Independent Education and Parental Choice

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Pam Stewart, Commissioner, Department of Education

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: September 11, 2013

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: August 27, 2013