Arizona Administrative Code
Title 7 - EDUCATION
Chapter 5 - STATE BOARD FOR CHARTER SCHOOLS
Article 1 - GENERAL PROVISIONS
Section R7-5-101 - Definitions
In this Chapter, the following definitions apply:
"Academic performance dashboard" means color-coded graphics that represent a charter school's academic performance by measure for the three most recent fiscal years and identifies whether the schools operated by the charter holder meet the minimum academic performance expectations.
"Academic Performance Framework" means a document publicly available and posted on the Board's website that sets forth the minimum academic performance expectations for charter schools, measures of progress towards meeting the expectations, and consequences of failing to meet the expectations.
"Accounting industry regulatory body" means any state or federal regulatory body that has authority to discipline a certified public accountant or audit firm.
"Administrative completeness review time frame" means the number of days from the Board's receipt of a submission for Board consideration until the Board staff determines whether the submission contains all components and is formatted as required by statute and rule.
"Annual application cycle" means the process the Board conducts each year to receive and review new charter application packages and grant or deny a charter.
"Applicant" means a person that applies to the Board for a new charter.
"Application" means the Board-approved forms and instructions used by an applicant or charter holder to apply for a new charter, transfer a charter as provided under R7-5-302(A)(1), transfer a charter school as provided under R7-5-302(A)(2), or renew or replicate a charter sponsored by the Board.
"Application package" means an application form, narratives, and documents, including exhibits and attachments, submitted by an applicant or charter holder.
"Audit" means a charter holder's annual audit required under A.R.S. § 15-914.
"Audit contract" means an engagement letter provided by an audit firm that describes the terms of a contract between a charter holder and the audit firm.
"Authorized representative" means an individual with the power to bind an applicant contractually according to the applicant's Articles of Incorporation, operating agreement, or by-laws.
"Board" means the Arizona State Board for Charter Schools.
"CAP" means corrective action plan.
"Charter" means a contract between a person and the Board to operate a charter school under A.R.S. § 15-181 et seq.
"Charter holder" means a person that enters into a charter with the Board.
"Charter representative" means an individual with the power to bind a charter holder contractually according to the charter holder's Articles of Incorporation, operating agreement, or by-laws and is the point of contact with the Board for the purposes of communication and accountability to charter terms and conditions.
"Charter school" has the meaning specified at A.R.S. § 15-101.
"Date of notice" means the date on which an electronic notification is sent by the Board to an applicant or charter holder through the authorized representative or charter representative.
"Day" means a business day.
"Demonstration of sufficient progress" means the process for a charter holder to show the charter holder is making progress towards achieving the minimum academic performance expectations specified in the Academic Performance Framework.
"Department" means the Arizona Department of Education.
"Education Service Provider" means an organization that contracts with or has a governance relationship with an applicant or charter holder to provide academic services, administrative services or both. These organizations may also be commonly referred to as Charter Management Organizations or Education Management Organizations.
"Financial performance dashboard" means a color-coded graphic that represents a charter holder's financial performance by measure for the most recent audited fiscal years and identifies whether the charter holder's financial performance meets the minimum financial performance expectations.
"Financial Performance Framework" means a document publicly available and posted on the Board's website, and incorporated herein by reference, that sets forth the minimum financial performance expectations for charter holders, measures of performance, and consequences of failing to meet the expectations.
"Fiscal year" means the 12-month period beginning July 1 and ending June 30.
"June 30 quarterly financial report" means the report for the quarter ending June 30 submitted to the Board by a charter holder assigned a summative financial performance rating of "Intervention" under R7-5-402(F) or a charter holder identified as "On Probation" and, therefore, under R7-5-402(G) does not meet the minimum financial performance expectations. In the June 30 report, the charter holder must include:
An unaudited balance sheet (statement of financial position) that identifies the charter holder's results at June 30 and the charter holder's unrestricted and restricted cash balances. Minimally, the charter holder's restricted cash balance must include the charter holder's unspent Classroom Site Fund monies;
An unaudited income statement (statement of activities) that identifies the charter holder's results for the year ended June 30;
The charter holder's revenue and expense budget that compares year-to-date actual results for the year ended June 30 to the charter holder's annual budget and, for each line item, identifies the percentage of the annual budget represented by the actual results; and
The charter holder's calculation of its performance on all six Financial Performance Framework measures, including all figures used in the mathematical calculations, completed using the measure calculator spreadsheet available on the Board's web-based interface;
If not specifically listed on the unaudited income statement (statement of activities), accounting system reports or lease and debt schedules identifying, as applicable, the facility lease expense and interest expense paid by the charter holder for the fiscal year and used in the charter holder's lease adjusted debt service coverage ratio calculation; and
Accounting system reports or debt schedules identifying, as applicable, the bond, loan and capital lease principal paid by the charter holder for the fiscal year and used in the charter holder's lease adjusted debt service coverage ratio calculation.
"Operational performance dashboard" means a color-coded graphic that represents a charter holder's operational performance by measure for up to the five most recent fiscal years and identifies whether the charter holder's operational performance meets the minimum operational performance expectations.
"Operational Performance Framework" means a document publicly available and posted on the Board's website that sets forth the minimum operational performance expectations for charter holders, measures of performance, and consequences of failing to meet the expectations.
"Overall time frame" means the number of days after receipt of a submission for Board consideration until the Board decides whether to grant or deny the request contained in the submission. The overall time frame consists of both the administrative completeness review time frame and the substantive review time frame.
"Peer review" means an external quality-control review, required by generally accepted government auditing standards, which determines whether an audit firm's internal quality-control system exists, is operating effectively, and provides assurance that established policies and procedures and applicable auditing standards are being followed.
"Performance expectations" means the minimum academic, financial, and operational performance expectations established by the Board.
"Person" means an individual, partnership, corporation, association, or public or private organization of any kind.
"Principals" means the officers, directors, members, partners, or board of an applicant or charter holder.
"Quarterly financial report" means the report for the quarters ending September 30, December 31 and March 31 submitted to the Board by a charter holder assigned a summative financial performance rating of "Intervention" under R7-5-402(F) or a charter holder identified as "On Probation" and, therefore, under R7-5-402(G) does not meet the minimum financial performance expectations. In each quarterly report, the charter holder must include:
An unaudited balance sheet (statement of financial position) that identifies the charter holder's results at the quarter end date and the charter holder's unrestricted and restricted cash balances. Minimally, the charter holder's restricted cash balance must include the charter holder's unspent Classroom Site Fund monies;
An unaudited income statement (statement of activities) that identifies the charter holder's results year-to-date through the quarter end date;
The charter holder's revenue and expense budget that compares year-to-date actual results through the quarter end date to the charter holder's annual budget and, for each line item, identifies the percentage of the annual budget represented by the actual results; and
The charter holder's calculation of its performance on the default, unrestricted days liquidity, adjusted net income and average daily membership measures, including all figures used in the mathematical calculations, completed using the measure calculator spreadsheet available on the Board's web-based interface.
"Serious impact finding" means an issue identified by the Board that the Board believes has or potentially has a detrimental impact on the operation of the charter school or students, such as threat to the health and safety of children, failure to meet the academic needs of children, gross violation of generally accepted accounting principles that increases the opportunity for fraud or theft, or repeated issues of noncompliance.
"Substantive review time frame" means the number of days after a submission for Board consideration is determined to be administratively complete until the Board decides whether to grant or deny the request contained in the submission.
"Sufficiently qualified" means the Board's determination that an applicant's knowledge, experience, qualifications, current and prior charter compliance, capacity, personal and professional background, and creditworthiness indicate an ability to implement a charter or operate a charter school in accordance with federal and state law and the performance expectations established by the Board.
"Supervising certified public accountant" means the certified public accountant responsible for leading the audit of a charter school or signing the final audit report.
"Technical Review Panel" means individuals approved by the Executive Director of the Board who use their expertise in charter school development, curriculum, and finance to assist the Executive Director by conducting a preliminary evaluation of an application package.
