CSO OUTLINES CHARTER RENEWAL PROCESS FOR PHILADELPHIA CHARTER SCHOOLS

                                                             CHARTER SCHOOL ALERT

The Office of Charter, Partnership and New Schools of The School District of Philadelphia (CSO) recently provided a Charter School Renewal Orientation for charter schools whose charters are up for renewal in 2012.  As the review protocol is not likely to be materially modified during the next few years, charter schools with renewals in 2013 and beyond should also be aware of this information and consider taking various actions now to ensure a smooth renewal process.

Complying with the Charter School Law’s mandate for local school boards to conduct a “comprehensive review” prior to granting a five year charter renewal[1], the CSO staff used the Orientation to outline the materials to be collected by the renewal evaluation team, address site visits to be conducted by SchoolWorks, an outside education consultant, and provide the timeline for the renewal application process. 

The CSO’s review of a charter school seeking renewal will be organized into four “domains:”

1.       Academic Performance – Analysis of the charter school’s academic performance including, among other areas, review of PSSAs, AYP performance, Special Education compliance, ELL compliance and review of existing improvement  plans.

2.      Financial Health – Assessment of the school’s financial stability by review of financial health ratios[2], independent audits, IRS Form 990s, and internal controls.

3.      Governance and Compliance – Review of the school’s compliance with statutory requirements and board governance in the areas of admissions, financial management, school policies and procedures and academic services.

4.      Customer Satisfaction – Analysis of the school’s survey results, parent complaint logs, student retention rates and school safety.

Renewal Site Visits

The CSO will supplement its review of documents relevant to each of the four domains with information obtained from the renewal site visits by SchoolWorks.  Prior to their visit, SchoolWorks consultants will be sent a variety of information from the school to prepare for the visits.  The specific information to be provided is shown on Appendix A of the CSO’s Fall 2011 Renewal Site Visit Protocol and includes a school staff roster, a description of the school’s special education program and ELL services, a current budget analysis report, cash flow projections for the year, and copies of board minutes.  Recommendation: Charters should be sure that they are currently maintaining the information sought by SchoolWorks and, if not, be able to articulate a compelling reason for not having it available when requested.  

Appendix B of the Renewal Site Visit Protocol contains general descriptions of the interview topics with the school’s various stakeholders as well as interview worksheets with specific questions.  For example, below is a sample of questions for discussions with the Board:

·         Describe the Board’s structure.  Describe the primary roles and responsibilities of members, committees.

·         How does the Board make decisions and establish policies?  Provide an example of a decision that is made by the Board vs. made by the school without Board input.

·         How does the Board define and measure the school’s performance?

·         How does the Board recruit new members?

·         How does the Board ensure the safety – both physical and emotional—of all students and staff?

·         What are the Board’s greatest strengths and areas for improvement?

Similar questions are also provided for interviews with school leadership, special education staff, ELL staff, teachers, parents and students.  Recommendation:  Charters should closely review the Interview Questions and Guidance contained on Appendix B of the Renewal Site Visit Protocol.  Copies are available from the CSO.

Timeline

Schools seeking to have charters renewed were required to file their renewal applications by November 15^th.  Renewal site visits were scheduled for October and November.  All additional materials requested by the CSO are due by December 30^th.  The CSO will provide reports to the School Reform Commission (SRC) in time for the SRC’s March 7, 2012 meeting to discuss and receive public comment on charter’s up for renewal.  The SRC is expected to render renewal decisions on March 14, 2012.

This Charter School Alert was authored by Eric L. Silberstein, an attorney with Salvo Rogers & Elinski in Blue Bell, PA.  Mr. Silberstein, a member of Salvo Rogers & Elinski’s Corporate and Real Estate Groups, has practiced law for 20 years and works closely with charter boards and administrators on governance, financing, special education, real estate, charter renewals and other matters.  Mr. Silberstein is admitted to practice law in Pennsylvania, New York and Connecticut.  He can be reached at (215) 653-0110 or esilberstein@salvorogers.com.  Salvo Rogers & Elinski is a boutique law firm started in 1988 that is committed to providing high quality, personal service and cost effectiveness to clients pursuing business transactions, commercial real estate matters, and trusts and estates planning.

Please follow charter school news of interest on my blog, “PA Charter School Law Forum” at pacharterlawforum.blogspot.com.  Your comments and suggestions are welcome.

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[1] See Section 1728-A of the Charter School Law.

[2] The Charter School Office published a “Charter School Financial Health Metrics: Reference Sheet,” dated January 6, 2011.  

SB 1 Passes Senate; Potential Impact on Trustees and Administrators

CHARTER SCHOOL ALERT

  PASSAGE OF SENATE BILL 1

Members of the Pennsylvania Senate passed Senate Bill 1 (SB 1) on October 26, 2011.  If adopted by the House of Representatives and signed into law by Governor Corbett, this legislation will create a program for taxpayer-funded tuition vouchers, expand the Education Improvement Tax Credit Program, and amend the Commonwealth’s Charter School Law of 1997.  The vote, 27-22, was largely on party lines, with 24 republicans and 3 democrats supporting SB 1. 

Many of the provisions found in SB 904, the Charter School Reform bill introduced earlier this year by Senator Piccola, Chair of the Education Committee (R-15^th District), were subsumed within SB 1.  Unfortunately, Senate debate of the bill and press coverage of SB 1 following its passage focused largely on the topic of school vouchers, with little attention placed on the possibility of significant changes to the Charter School Law. 

This Charter School Alert summarizes what we believe are the key provisions of SB 1 that will, if SB 1 becomes law, fundamentally impact charter boards of trustees and administrators: 

• Ethics Act applies to charter school board trustees and administrators; requires annual ethics filings; prohibits conflicts of interest; allows parents to petition for trustee removal.

SB 1 mandates that all members of a charter school’s board of trustees and school administrators will be subject to the requirements of the State Ethics Act (65 Pa.C.S. Ch. 11).  Specifically, trustees must file a statement of financial interest annually with the State Ethics Commission and administrators must annually file a statement of financial interest for the preceding calendar year with the charter’s board of trustees no later than May 1^st. 

SB 1 prohibits trustees and administrators from engaging in conflicts of interest and at all times act in the best interests of the school.  For example, an administrator may not receive compensation from another charter school or from an education management service provider unless the administrator submits a sworn statement to the trustees detailing the work for the other entity and the anticipated hours and pay, and the board of trustees adopts a resolution granting permission to the administrator.  Further, a trustee must abstain from voting on a contractual matter if such vote would result in a conflict of interest in the administration of the contract.  Any such contract may be voided by a court if it’s later determined that the trustee voted on a matter that, in light of a conflict of interest, the trustee should have recused himself. 

Consistent with the Charter School Law’s focus on increasing community involvement in education, SB 1 allows for a minimum of 25 parents or guardians of students enrolled in the charter to petition the Court of Common Pleas to remove a trustee that neglects the performance of his or her duties.  If removed by the Court, the trustee may not serve on another charter board for at least five years.

Recommendation:  Whether or not SB 1 becomes law, we recommend that charter boards and administrators review the Ethics Act and become familiar with the form of disclosure of financial interests.  Boards may want to require trustees and administrators to prepare financial interest statements at the beginning of each fiscal year for distribution to trustees. Also, trustees and administrators should become familiar with their schools’ conflict of interest policy or, if the charter does not have a policy in place, adopt a conflict of interest policy as soon as possible.

• Potential Modifications to Compositon of Board of Trustees.

SB 1 requires a board of trustees to have at least five non-related voting members and requires each board to have as a member at least one parent or guardian of a student enrolled in the school. 

Recommendation:  Reach into the local community for Board members.  Adding a parent or guardian of a student enrolled at a charter seems prudent practice.  

• Annual independent audits of charter schools and cyber charter schools and public disclosure of financial records.

SB 1 requires that an audit of the school’s operations is to be conducted annually and the audit findings are to be reviewed by an independent audit committee of the board of trustees.  In addition to looking into the charter’s financial records (e.g., tax filings and financial statements), the audit, conducted by a qualified certified public accountant, will examine Board policies and procedures regarding internal controls, code of ethics, conflicts of interest, whistle-blower protections, complaints from parents or the community, open meetings and public bidding.  

In addition, charter schools must provide copies of their annual budgets to the School District and the Department of Education.  The budget information must identify the source of funding for expenditures and the salary of all administrators.  Copies of all federal and state tax filings, including Form 990, are to be made available on request or be posted on each charter school’s or charter school foundation’s website.

Recommendation:  Maintain a manual of your school’s policies and procedures.  Consider adopting policies relating to the tracking of receipts and expenses, code of ethics, conflicts of interest, whistle-blower protections, handling complaints from parents or the community and public bidding.  Confirm board compliance with the State’s Open Meeting and Right to Know Laws.  Be transparent with financial information by making financial statements and tax filings available on the charter’s website.    

Aside from fostering greater transparency of management and greater disclosure of charter schools’ financial information, SB 1, if enacted into law, will offer charters significant benefits:  

• Direct Pay. The bill requires payments from the Department of Education to flow directly to the charter school. The school district will no longer serve as a pass-through for funding to charters.

• Increases Length of Charter Renewal.  Charter renewals may be granted for ten year periods (now five).  The increase in renewal term may yield significant funding advantages to charters as lenders are likely to be more comfortable lending knowing that, so long as the school operates successfully, the school’s charter will remain in effect for 10 years. 

• Standardizes the charter school application.  Charter school applicants and school board trustees will no longer need to “reinvent the wheel” during the charter application and review process.

• Allows for charter schools to file for amendments to their charters. Current charter law does not specify a process for amendments to charters. SB 1provides charter schools to apply for amendments to their charters during the course of their charter. The bill outlines the procedures charters and school board directors are to follow during the amendment process.

We will continue to issue Charter School Alerts as SB 1 is considered by the House of Representatives. 

This Charter School Alert was authored by Eric L. Silberstein, an attorney with Salvo Rogers & Elinski in Blue Bell, PA.  Mr. Silberstein, a member of Salvo Rogers & Elinski’s Corporate and Real Estate Groups, has practiced law for 20 years and works closely with charter boards and administrators on governance, financing, special education, real estate, charter renewals and other matters.  Mr. Silberstein is admitted to practice law in Pennsylvania, New York and Connecticut.  He can be reached at (215) 653-0110 or esilberstein@salvorogers.com.  Salvo Rogers & Elinski is a boutique law firm started in 1988 that is committed to providing high quality, personal service and cost effectiveness to clients pursuing business transactions, commercial real estate matters, and trusts and estates planning.

Please follow charter school news of interest on my blog, “PA Charter School Law Forum” at pacharterlawforum.blogspot.com.  Your comments and suggestions are welcome.