Current through Register Vol. 30, No. 38, September 20, 2024
A. The Board shall assess a charter holder's
achievement of the minimum financial performance expectations using data
contained in the annual audit required under A.R.S. §
15-914
and conducted according to the standards specified in
R7-5-504
and average daily membership calculations completed by the Department using
student attendance data submitted to the Department by the charter holder.
1. The Board may assess a charter holder's
achievement of the minimum financial performance expectations at any
time.
2. The Board shall assess a
charter holder's achievement of the minimum financial performance expectations:
a. During the five-year-interval review
required under A.R.S. §
15-183(I);
b. When considering a charter contract
renewal request submitted by the charter holder;
c. Upon receipt of information that a charter
school operated by the charter holder failed to meet the minimum academic
performance expectations for three consecutive years;
d. Upon receipt of information that a charter
school operated by the charter holder has been assigned a letter grade of "F"
by the Department; and
e. When
making a decision related to the charter holder's achievement of the minimum
academic performance expectations or compliance with its charter, other
contractual agreements with the Board, federal and state law, and this
Chapter.
B.
The Board shall annually assign a charter holder a summative financial
performance rating, based on measures specified in the Financial Performance
Framework.
1. The Board shall assign a
summative financial performance rating of "Good Standing" if the charter holder
receives no measures rated "below standard" and no more than one measure rated
"approaches standard" based on the most recent audit conducted under
R7-5-504.
2. The Board shall assign a summative
financial performance rating of "Adequate Standing" if the charter holder
receives no measures rated "below standard" and two or more measures rated
"approaches standard" based on the most recent audit conducted under
R7-5-504.
3. The Board shall assign a summative
financial performance rating of "Intervention" if the charter holder receives
one or more measures rated "below standard" based on the most recent audit
conducted under
R7-5-504
or if the charter holder has received a summative financial performance rating
of "Adequate Standing" for three consecutive years.
C. A charter holder assigned a summative
financial performance rating of "Good Standing" or "Adequate Standing" based on
the most recent audit conducted under
R7-5-504
is financially eligible to submit to the Board, if the charter holder meets all
other eligibility criteria, an expansion request to:
1. Add a new charter school to an existing
charter;
2. Add one or more grade
levels to a charter;
3. Increase
the number of students the charter holder may serve;
4. Add an Arizona Online Instruction
program;
5. Replicate an existing
charter;
6. Transfer an existing
charter school to its own charter contract; or
7. Transfer an existing charter school or
charter contract from the current charter holder to an existing charter holder
with a different financial performance dashboard.
D. A charter holder assigned a summative
financial performance rating of "Intervention" or identified as "On Probation"
based on the most recent audit conducted under
R7-5-504
is not eligible to submit to the Board an expansion request specified in
subsection (C).
E. The Board shall
determine that a charter holder meets the minimum financial performance
expectations if the charter holder receives a summative financial performance
rating of "Good Standing" or "Adequate Standing" based on the most recent audit
conducted under
R7-5-504.
F. The Board shall require a charter holder
assigned a summative financial performance rating of "Intervention," based on
the most recent audit conducted under
R7-5-504,
to submit the financial intervention submissions as described in
R7-5-509
and the following attestation using the form available on the Board's web-based
interface:
1. The charter holder's board or,
if applicable, the charter school's governing body has considered the written
notice, provided by the Board under
R7-5-504(H)(2),
of the charter holder's intervention status, along with the Board's probation
risk levels and associated consequences identified in subsections (H) through
(K);
2. Management has identified
and the charter holder's board or, if applicable, the charter school's
governing body has considered the factors that caused or contributed to the
charter holder's financial performance in the audited fiscal year;
3. Management and the charter holder's board
or, if applicable, the charter school's governing body have reviewed the
charter holder's current financial plan and approved any necessary changes;
and
4. Management and the charter
holder's board or, if applicable, the charter school's governing body shall at
least quarterly review the charter holder's current performance under the
Financial Performance Framework.
G. A charter holder that receives a summative
financial performance rating of "Intervention" for two or more consecutive
years shall also be placed "On Probation" and be required to submit the
financial intervention submissions as described in R7-5-511. The Board shall
determine that a charter holder placed "On Probation" does not meet the minimum
financial performance expectations.
H. For each charter holder identified as "On
Probation" and, therefore, under subsection (G) does not meet the minimum
financial performance expectations, Board staff shall:
1. Determine the charter holder's "ADM
category" using publicly available average daily membership calculations
completed by the Department and the criteria set forth in Table 1;
2. Determine the charter holder's "default
measure category" using the following criteria:
a. The Board shall determine the charter
holder is "low risk" is the default measure received a rating of "meets
standard" based on the two most recent audits conducted under
R7-5-504.
b. The Board shall determine that a charter
holder is "moderate risk" if the default measure received a "below standard"
rating:
i. Based on the most recent prior
audit conducted under
R7-5-504;
or
ii. Based on the most recent
audit conducted under
R7-5-504
due to the charter holder's failure to comply with non-payment related
requirements.
c. The
Board shall determine that a charter holder is "high risk" if the default
measure received a rating of "below standard" based on the most recent audit
conducted under
R7-5-504
due to the charter holder's failure to make required payments; and
3. Assign the charter holder a
probation risk level using the charter holder's results based on the two most
recent audits conducted under
R7-5-504
and the criteria set forth in Table 2.
I. A charter holder assigned to probation
risk level one under subsection (H)(3):
1.
Shall be subject to charter oversight specified in Article 6, including a
consent agreement with the Board or charter revocation proceedings, or, if
applicable, to the denial of renewal under R7-5-301(I);
2. Shall be required to attest, within 30
days of the date of the written notice provided under subsection (L), using the
form available on the Board's web-based interface, to the following:
a. The charter holder's board or, if
applicable, the charter school's governing body has considered the written
notice, provided by the Board under subsection (L), that the charter holder
does not meet the Board's minimum financial performance expectations after
having been placed "On Probation" and has been assigned to probation risk level
one, along with the associated consequences;
b. The charter holder's board or, if
applicable, the charter school's governing body and management understand that,
due to the charter holder's assignment to probation risk level one, the charter
holder will be placed on a subsequent agenda for the Board to meet and
determine whether to approve a consent agreement with the charter holder or to
pursue revocation proceedings or, if applicable, denial of renewal;
c. Management has identified and the charter
holder's board or, if applicable, the charter school's governing body has
considered the factors that caused or contributed to the charter holder's
financial performance in the audited fiscal year;
d. Management and the charter holder's board
or, if applicable, the charter school's governing body have reviewed the
charter holder's current financial plan and approved any necessary changes;
and
e. Management and the charter
holder's board or, if applicable, the charter school's governing body shall at
least quarterly review the charter holder's current performance under the
Financial Performance Framework; and
3. Shall be required to
submit the quarterly financial reports required under R7-5-511(A) by the
deadlines identified in R7-5-511(B).
J. A charter holder assigned to probation
risk level two under subsection (H)(3) shall be required to:
1. attest, within 30 days of the date of the
written notice provided under subsection (L), using the form available on the
Board's web-based interface, to the following:
a. The charter holder's board or, if
applicable, the charter school's governing body has considered the written
notice, provided by the Board under subsection (L), that the charter holder
does not meet the Board's minimum financial performance expectations after
having been placed "On Probation" and has been assigned to probation risk level
two, along with the associated consequences;
b. The charter holder's board or, if
applicable, the charter school's governing body and management understand that
should the charter holder be placed "On Probation," based on the next audit
conducted under
R7-5-504,
the charter holder shall be subject to charter oversight, which may include a
consent agreement, charter revocation proceedings or, if applicable, denial of
renewal;
c. Management has
identified and the charter holder's board or, if applicable, the charter
school's governing body has considered the factors that caused or contributed
to the charter holder's financial performance in the audited fiscal
year;
d. Management and the charter
holder's board or, if applicable, the charter school's governing body have
reviewed the charter holder's current financial plan and approved any necessary
changes; and
e. Management and the
charter holder's board or, if applicable, the charter school's governing body
shall at least quarterly review the charter holder's current performance under
the Financial Performance Framework; and
2. submit the quarterly
financial reports required under R7-5-511(A) by the deadlines identified in
R7-5-511(B).
K. A
charter holder assigned to probation risk level three under subsection (H)(3)
shall be required to:
1. Attest, within 30
days of the date of the written notice provided under subsection (L), using the
form available on the Board's web-based interface, to the following:
a. The charter holder's board or, if
applicable, the charter school's governing body has considered the written
notice, provided by the Board under subsection (L), that the charter holder
does not meet the Board's minimum financial performance expectations after
having been placed "On Probation" and has been assigned to probation risk level
three, along with the associated consequences;
b. The charter holder's board or, if
applicable, the charter school's governing body and management understand that,
should the charter holder be placed "On Probation," based on the next audit
conducted under
R7-5-504,
the charter holder shall be subject to charter oversight, which may include a
consent agreement, charter revocation proceedings or, if applicable, denial of
renewal;
c. Management has
identified and the charter holder's board or, if applicable, the charter
school's governing body has considered the factors that caused or contributed
to the charter holder's financial performance in the audited fiscal
year;
d. Management and the charter
holder's board or, if applicable, the charter school's governing body have
reviewed the charter holder's current financial plan and approved any necessary
changes; and
e. Management and the
charter holder's board or, if applicable, the charter school's governing body
shall at least quarterly review the charter holder's current performance under
the Financial Performance Framework; and
2. Submit the quarterly financial reports
required under R7-5-511(A) by the deadlines identified in
R7-5-511(B).
L. For each
charter holder identified as "On Probation" and, therefore under subsection (G)
that does not meet the minimum financial performance expectations, Board staff
shall notify the charter holder in writing of:
1. The probation risk level assigned to the
charter holder under subsection (H)(3);
2. The student count visit required under
subsection (N);
3. The submission
requirements associated with the charter holder's probation risk level;
and
4. The deadline or
deadlines for submitting, to the Board, the information identified in
subsection (L) (3).
M.
Board staff shall report the following to the Board at a public meeting:
1. The probation risk level assigned to each
charter holder identified as "On Probation" and, therefore under subsection (G)
that does not meet the minimum financial performance expectations;
and
2. The detail underlying the
probation risk level determination for each charter holder assigned to
probation risk level one.
N. Subject to the provision set forth in
subsection (N)(1), for each charter holder identified as "On Probation" and,
therefore under subsection (G) that does not meet the minimum financial
performance expectations, Board staff shall visit each school operated by the
charter holder to conduct a physical count of students and compare the
information observed and obtained onsite with the number of students reported
to the Department.
1. Should extraordinary
circumstances preclude Board staff from completing one or more site visits,
Board staff shall:
a. Report to the Board at a
public meeting the specific extraordinary circumstance and the number of site
visits affected;
b. Propose an
alternative method for conducting the site visits, request a waiver of one or
more site visits, or both; and
c.
Provide at least five days' public notice of the Board meeting identified in
subsection (N)(1)(a).
2.
Time permitting, Board staff may visit each school operated by a charter holder
that has been assigned, under subsection (F), a summative financial performance
rating of "Intervention" based on the most recent audit conducted
R7-5-504.
O. "Improvement
plans," for the purpose of A.R.S. §
15-183,
shall include:
1. The first four quarterly
financial reports, including the June 30 quarterly financial report, and, if
applicable, the attestation submitted to the Board by a charter holder assigned
to probation risk level one based on scenario 1, scenario 2, scenario 3,
scenario 4 or scenario 5 as set forth in Table 2.
2. The first eight quarterly financial
reports, including the June 30 quarterly financial reports, and, if applicable,
the attestations submitted to the Board by a charter holder assigned to
probation risk level one based on scenario 6 as set forth in Table 2.
P. In general, Board staff does not grant
extensions for financial submissions as the Board has an interest and duty to
timely review these submissions to better understand the charter holder's
current financial status. However, if the deadline has not passed, Board staff
may, for good cause, grant the charter holder an extension of time to submit
the information pursuant to subsections (F), (I)(2), (J)(1), (K)(1),
R7-5-509(B), R7-5-509(E) or R7-5-511(B). A charter holder seeking an extension
of time must submit the request in writing and include the reason(s) for the
request.
Q. If a charter holder
fails to submit or fails to timely submit by the specified deadline the
attestation required by subsections (F), (I)(2), (J)(1) or (K)(1), Board staff
shall:
1. Provide written notice to the
charter holder that includes the reason for the finding and provides a
three-day window for the charter holder to submit the attestation.
2. If the charter holder does not submit the
attestation to the Board within the window identified in subsection (Q)(1),
note the charter holder's failure on its operational performance dashboard and
provide written notice to the charter holder of the deadline by which the
attestation must be received to avoid charter oversight as specified in Article
6.
R. If a charter
holder assigned a summative financial performance rating of "Intervention"
under subsection (B)(3) or a charter holder identified as "On Probation" and,
therefore, under subsection (G) does not meet the minimum financial performance
expectations fails to timely submit its next audit conducted under
R7-5-504,
Board staff shall report the charter holder's intervention status to the Board
when the Board considers action under
R7-5-504(E).
