Rep. K. Williams & Sen. Sokola
Reps. Baumbach, Bennett, Heffernan, Kowalko, Sens. Bushweller, Lopez, Pettyjohn
HOUSE OF REPRESENTATIVES
148th GENERAL ASSEMBLY
HOUSE BILL NO. 435
AN ACT TO AMEND TITLE 14 OF THE DELAWARE CODE RELATING TO CHARTER SCHOOLS.
Section 1. Amend § 1504, Title 14 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 1504. Audit.
The Auditor of Accounts shall each year as soon as possible after July 1 audit
the business and financial transactions, records, and accounts of the
Department of Education, the State Board of Education, the Delaware Center for
Education Technology, the Delaware Advisory Council for Career and Vocational
and the boards of education of the school districts, and,
if required by 513(d) of this title, the charter schools created under Chapter
5 of this title.
Section 2. Amend § 513, Title 14 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 513. Reporting and oversight.
(a) On or before December 1, each charter school shall produce an annual report for the school year ending the previous June, which shall include all of the following:
Discuss An explanation of the school's
progress in meeting overall student performance goals and standards; standards.
Discuss An explanation of the
innovation occurring at the charter school, including but not limited to the
areas of curriculum development, instruction, student culture and discipline,
community and parental involvement, teacher and staff development, school
operations and management, and extracurricular and after-school programming;
Contain a financial statement A copy of
the school’s annual financial audit report, as required under subsection (d) of
this section, and a copy of the school’s standardized financial report
setting forth by appropriate categories the school's revenues and expenditures
and assets and liabilities.
(4) In the case of a single gender school,
shall include an explanation of the efforts made by the charter
school to further advance its students' education and a quantitative analysis
of its efforts and results in recruiting and retaining
economically-disadvantaged students, regardless of race.
Each Notwithstanding subsection (a), each charter school seeking
renewal of its charter shall produce the annual report as outlined above
described in subsection (a) on or before September 30 October
1 of the final year of its current charter term. The approving authority
may, in its discretion and for good cause shown, elect to accept an annual
report submitted subsequent to this deadline.
To ensure that
such annual reports under this section
provide parents and approving authorities with clear and comparable information
about the performance of charter schools, the Department of Education shall
prescribe a uniform format for such reports, and the standardized financial
report required to be included in such reports, which may be supplemented by
requirements set by the approving authority for schools it has chartered.
The Unless subject to an audit by the Auditor of Accounts under
paragraph (2) of this subsection, the board of directors of each charter
school shall contract to have an audit of the business and financial
transactions, records, and accounts after July 1 for the prior fiscal year. The
results of the audit shall be shared with the Department of Education by
October 1 by October 1 with the Department of Education, the Auditor of
Accounts, the Division of Accounting, and the citizen budget oversight
committee established under § 1508 of this title.
(2) The Auditor of Accounts shall conduct or contract for an audit of the charter school’s business and financial transactions, records, and accounts after July 1 for the prior fiscal year in the event the charter school has any of the following:
a. A financial audit opinion with any of the following in any of the prior fiscal years under the current charter term:
1. Material exceptions.
2. A going concern disclosure in the notes or in an explanatory paragraph related thereto.
3, A finding of material weakness on either internal control or compliance. For purposes of this paragraph, “material weakness” means a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.
b. Has failed to maintain a current status with Internal Revenue Service Form 990 filings, if said filings are required of that charter school.
c. Has existed for a total of less than 5 years under its current and prior charter terms.
(3) If, however, a financial audit opinion of paragraph (d)(2)a. of this section is not the required annual audit and is, instead, performed at the request of the board of directors of its own volition and then provided to the Auditor of Accounts, then that financial audit opinion shall not form the basis for the Auditor of Accounts conducting or contracting the audit under paragraph (d)(2) of this section.
(e) The contract required by subsection (d)(1) of this section must be publicly bid no less than every 5 years and must provide for all of the following:
(1) That the auditor shall, at all times during the term of the contract, hold a valid certified public accountant permit to practice license in Delaware.
(2) That the auditor shall be peer-reviewed by the American Institute of Certified Public Accountants (AICPA) at least every 3 years, and the most recent review shall have been completed with an unqualified opinion.
(3) That the audit shall meet the requirements and standards of generally-accepted government auditing standards.
(4) That the audit required by subsection (d) of this section shall include any additional specific audit procedures which have been established in advance by the charter school or the State Auditor, or both, and which apply to the specific charter school or which the State Auditor has established for all school districts and charter schools.
A charter school shall display on its website the annual report including
financial statement and audit required by this subsection. A charter school
shall also display on its website all standardized financial report forms for
the current fiscal year and the final monthly standardized financial report
each previous fiscal year the 5 prior fiscal years of
operation. Charter schools that are required to file Internal Revenue Service
Form 990 shall post the current and prior year Form 990 on the website as well. (b)(g)
The annual report shall be submitted to the approving authority, the Department
and the State Board. Employees of the school and parents of students attending
the school shall receive a copy free of charge, upon request. The reports shall
be public records pursuant to Chapter 100 of Title 29. (c)(h)
The Department of Education, the State Board, and the approving authority may
conduct financial, programmatic, or compliance reviews of a charter school. In
cooperation with the Department, the approving authority shall conduct such
reviews no less often than every 3 years. The State Auditor shall conduct an
audit of all charter school funds annually on the same basis as applied to
regular school districts. (d)(i)
The Department of Education shall notify the superintendents of all reorganized
and vocational-technical school districts of receipt of new charter school
applications within 30 days of the close of the application deadline. The
Department of Education shall also notify the superintendent of a reorganized
school district of any applications for a major charter modification submitted
by a charter school with a facility located within their district. (e)(j)
Local school boards shall notify the superintendents of all reorganized and
vocational-technical school districts of receipt of new charter school
applications within 30 days of the close of the application deadline.
This Act seeks to strengthen certain aspects of Title 14 of the Delaware Code with respect to charter school audits and seeks to improve the relevant sections of the Title for consistency and cross-reference of terms. The Act allows charter schools to contract for an audit, unless the State Auditor has to perform the audit due to any of the specified circumstances.