DC Public Charter School Board (PCSB), the Office of State Superintendent of Education (OSSE) and the Office of the Chief Financial Officer (OCFO) announced today the results of the annual financial analysis of DC public charter schools.
For Immediate Release:
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Washington, D.C. — DC Public Charter School Board (PCSB), the Office of State Superintendent of Education (OSSE) and the Office of the Chief Financial Officer (OCFO) announced today the results of the annual financial analysis of DC public charter schools. The results show overall that the financial health of charter schools has improved considerably over the past year.
The 2012 report is the definitive study of the financial health of all 53 public charter school LEAs in operation during the 2012 fiscal year. These LEAs received a total of $504 million in District funds in per-pupil allotments ($408 million) and for a facilities allowance ($96 million), as well as federal and philanthropic funds amounting to additional $110 million of revenue.
According to the 1996 School Reform Act, PCSB must review the financial health of DC public charter schools and can close a charter school at any time for specified financial reasons. PCSB joined with the two District agencies with responsibilities for aspects of charter school finance – OSSE’s Office of Charter School Financing and Support and the OCFO in 2011 to create the Audit Management Unit (AMU) to jointly analyze charter school finances. The AMU also works with bearsolutions LLC , an independent financial consulting firm with experience in nonprofit and education organizations, for additional assistance with the analysis. Many public charter school leaders were also involved in helping to lay the foundation for the AMU’s work.
Overall, the report found that the sector-wide financial health of DC public charter schools is improving. For example, the median charter school now has sufficient cash on hand to cover 59 days of operating expenses, up from 41 days a year before.
In addition, there were fewer individual schools with flagged financial circumstances:
The number of public charter schools (PCS) with reportable audit findings declined to eight, compared to 18 in fiscal year 2011.
The number of PCS with unresolved reportable findings from the prior year declined to four, compared to 15 in 2011.
The number of PCS with negative cash flow from operations declined to four. There were eight such schools in 2011.
Just three PCS had a negative net asset position (total assets minus total liabilities), which indicates that the school relies on borrowed funds to finance operations. This was down from seven in 2011.
“In years past we had a few schools literally run out of cash in the middle of the year, creating great disruption for families and school staff,” said Scott Pearson, Executive Director of PCSB. “With the creation of the Audit Management Unit, I am confident that we now have the oversight in place to ensure that charter schools have the financial health to meet their obligations.”
"The collaboration between the Public Charter School Board, OSSE and the OCFO was key to defining and maintaining the fiscal health of the District's public charter schools," added Emily Durso, interim state superintendent of education for the District of Columbia. "We anticipate that the improvements realized through this inclusive process will continue, and that this report is validation of our collective commitment to accountability and transparency with the public."
Deloras A. Shepherd, Associate Chief Financial Officer in the Office of the Chief Financial Officer, said: “The work of the Audit Management Unit has proven to be instrumental in improving the overall fiscal health of the DC charter school sector. The CHARM report findings are representative of the outcomes that are possible when interagency collaboration is implemented and consistently adhered to. We support the continued efforts of the Audit Management Unit and hope that it can serve as a national model for other charter school authorizers."
The Charter Audit Resource Management (CHARM) report uses financial audits submitted by each charter school to report out in three main areas:
Financial snapshot of individual charter schools. This information indicates which schools may be at risk for poor financial performance. This early warning system allows PCSB and charter school financial officials to meet during the year and address financial issues early before a school may become a candidate for charter revocation.
Financial Dashboard. This provides key measures of fiscal health and how those schools compare on the measures.
Financial audit summary. Total audit results and recommendations going forward.
Charter school audits are performed each year by a list of PCSB-approved auditors that is the result of an request-for-proposals process managed by PCSB and OCFO.
About PCSB: The DC Public Charter School Board (PCSB) is setting a national model for creating quality public school options through its rigorous review of new charter applications and effective oversight of charter school performance that is leading the transformation of public education in Washington, DC. PCSB currently oversees 57 public charter schools on 102 campuses serving 34,673 students living in every ward of the city. Learn more at www.dcpcsb.org .