Financial Expertise For Charter Schools
Who is stealing from your charter school? Keep your charter school financially safe. Don't let your charter school become a statistic! While most charter schools in Florida strive to be fiscally responsible to their communities, too many are not being operated in a fiscal manner that ensures their long-term sustainability. Others are mismanaged to benefit the corporations or entities that fraudulently siphon money meant for teacher salaries, equipment, supplies and facilities into their own pockets.
In a May 2016 report by The Center for Popular Democracy, the instances of fraud and mismanagement fall into six basic categories:
• Charter operators using public funds illegally for personal gain;
• School revenue used to illegally support other charter operator businesses;
• Mismanagement that puts children in actual or potential danger;
• Charters illegally requesting public dollars for services not provided;
• Charter operators illegally inflating enrollment to boost revenues; and,
• Charter operators mismanaging public funds and schools.
In a June 2015 report by the State of Florida Auditor General entitled “Report on Significant Financial Trends and Findings Identified in Charter School and Charter Technical Career Center 2013-2014 Fiscal Year Audit Reports,” of the 595 charter schools audited it found:
• Seventy-six (13 percent) of the 595 charter schools reported a deficit unassigned/assigned fund balance or unrestricted net assets for the general fund or other unrestricted fund at June 30, 2014.
• The audit reports for 125 charter schools included 209 audit findings addressing weaknesses in internal control, instances of noncompliance with applicable laws or rules, or additional matters that should be addressed by management, including 31 audit reports with findings classified as material weaknesses in internal control.
• Of the 209 findings reviewed, 117 (56 percent) did not include one or more of the elements required by Chapter 10.850, Rules of the Auditor General.
So how do you ensure that your school is operating in a fiscally and contractually responsible manner, and that revenue received from state and federal treasuries are being used for the purpose in which they were allocated? An outside accounting firm that has experience in managing the finances of charter schools, that understands the full scope of rules and regulations set forth by the State of Florida, and can easily spot material weaknesses in fiscal operations is a great start.
A firm that specializes in Charter School Accounting can ensure that state statutes are followed and that policies and procedures are in place to reduce the opportunities or instances that fraud may occur, including:
• Separation of Duties – Making certain that duties and responsibilities are adequately separated to properly safeguard assets and detect the risk of errors or fraud on a timely basis.
• Budget Administration – Providing adequate controls over budget administration. Weaknesses in budgetary controls increase the risk of inefficient or inappropriate use of financial resources, which may result in a deteriorating financial condition.
• Policies and Procedures – Adequate written policies and procedures are necessary to ensure implementation of internal controls and compliance with laws, rules and good business practices.
• Cash Controls – Adequate controls over cash decrease the risk that unauthorized disbursements or loss of cash could occur and not be timely detected.
• Transparency – Posting your school’s annual budget, annual independent fiscal audit, minutes of governing board meetings, and other information on your websites, as required in Section 1002.33(9)(p), Florida Statutes enhances citizen involvement and the school’s accountability.
• Payroll and Personnel Administration – Providing adequate controls and adherence to applicable legal requirements, relating to payroll and personnel administration. Documentation in personnel files that background checks and fingerprinting have been completed decrease the risk that employees with unsuitable backgrounds may be allowed access to students.
• Expenditures – Adequate disbursement controls and documentation to support expenditures, along with proper controls over purchasing and invoice payment functions, demonstrate the charter school’s ability to appropriately use public resources.
• Records Management – Properly and accurately maintaining accounting and financial records and ensuring transactions are correctly posted can positively affect the reliability of the charter school’s records and related reports on financial position, and results of operations.
• Charter Contract Compliance – Following the contract to the letter includes that new board members receive charter school governance training within 90 days of their appointment, per State Board of Education Rule 6A-6.0784, Florida Administrative Code and the establishment of a student advisory council are just some of the compliance issues to which a charter school must adhere.
Consider the hiring of an experienced, professional charter school accounting firm not as an additional expense but as a net-positive investment in your school, its future and the welfare and well-being of the children you teach.
For the complete reports cited in this blog, visit:
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