DAR File No. 42992

Education, Administration

Rule R277-481

Charter School Oversight, Monitoring and Appeals

Notice of Proposed Rule

(Amendment)

DAR File No.: 42992
Filed: 06/14/2018 03:11:16 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to establish procedures for oversight and monitoring of charter agreements and charter schools for compliance with minimum standards. Rule R277-481 is amended to provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Utah State Board of Education (Board) policies. The substantive amendments to Rule R277-481 are part of the Board's work to enact and amend rules relating to the passage of H.B. 313, Public Education Revisions, from the 2018 General Session.

Summary of the rule or change:

The substantive amendments to Rule R277-481 are part of the Board's work to enact and amend rules relating to the passage of H.B. 313 (2018) and provide changes in accordance with the Rulewriting Manual for Utah and Board policies.

Statutory or constitutional authorization for this rule:

• Article X Section 3
• Subsection 53E-3-401(4)

Anticipated cost or savings to:

the state budget:

These rule changes are not expected to have any fiscal impact on state government revenues or expenditures because they provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Board policies. These rule changes include warning status notification coming from the school�s authorizer rather than the Utah State Office of Education and the State Charter School Board staff providing technical assistance to schools on probation. However, these changes only clarify current practice.

local governments:

These rule changes are not expected to have any fiscal impact on local government revenues or expenditures because they provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Board policies. These rule changes do not change processes for charter schools.

small businesses:

These rule changes are not expected to have any fiscal impact on small businesses' revenues or expenditures because they provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Board policies.

persons other than small businesses, businesses, or local governmental entities:

These rule changes are not expected to have any fiscal impact on other individuals' revenues or expenditures because they provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Board policies. This rule is for charter schools and does not affect other individuals.

Compliance costs for affected persons:

There are no compliance costs for affected persons.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are 1,241 entities with a NAICS code 611110 (Elementary and Secondary Schools) operating in Utah according to a "Firm Find Data" search through Utah's Department of Workforce Services. Most of the entities in the list are schools including public schools, charter schools, and private schools. Of the 1,241 entities, there are 15 private businesses, all of which are small businesses (there are no large businesses with a NAICS code 611110). These rule changes apply to charter schools and will not have a fiscal impact on large or small businesses. The Assistant Superintendent of Financial Operations at the Utah State Board of Education, Natalie Grange, has reviewed and approved this fiscal analysis.

Sydnee Dickson, State Superintendent

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Education
Administration
250 E 500 S
SALT LAKE CITY, UT 84111-3272

Direct questions regarding this rule to:

• Angela Stallings at the above address, by phone at 801-538-7550, by FAX at 801-538-7768, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/31/2018

This rule may become effective on:

08/07/2018

Authorized by:

Angela Stallings, Deputy Superintendent of Policy

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2019	FY 2020	FY 2021
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

There are zero large businesses with a NAICS code 611110 (Elementary and Secondary Schools). There are 1,241 entities with a NAICS code 611110 operating in Utah according to a "Firm Find Data" search through Utah's Department of Workforce Services. Most of the entities in the list are schools including public schools, charter schools, and private schools. Of the 1,241 entities, there are 15 private businesses, all of which have fewer than 50 employees so qualify as small businesses. Thus, these rule changes are not expected to have any fiscal impact on large businesses' revenue or expenditures because there are no applicable large businesses and it does not require any expenditures of or generate any revenues for large businesses.

 

The Assistant Superintendent of Financial Operations at the Utah State Board of Education, Natalie Grange, has reviewed and approved this fiscal analysis.

 

 

R277. Education, Administration.

R277-481. Charter School Oversight, Monitoring and Appeals.

R277-481-[2]1. Authority and Purpose.

[A.](1) This rule is authorized under:

(a) Utah Constitution Article X, Section 3 which vests general control and supervision over public education in the Board[,]; and

(b) Subsection 53[A]E-[1]3-401[(3)](4), which allows the Board to adopt rules in accordance with its responsibilities[, and 20 U.S.C., Section 8063(3) which directs the Board to submit specific information prior to charter schools' receipt of federal funds].

[B.](2)(a) The purpose of this rule is to establish procedures for oversight and monitoring charter agreements and charter schools for compliance with minimum standards.

(b) The rule also provides appeals criteria and a process for schools found out of compliance with chartering entity findings.

 

R277-481-[1]2. Definitions.

[A. "Board" means the Utah State Board of Education.]

[B.](1) "Chartering entities" means entities that authorize a charter school under Subsection 53[A]G-[1a]5-[501.3]102(3).

[C.](2) "Charter schools" means schools acknowledged as charter schools by chartering entities under Sections [53A-1a-515, 53A-1a-521]53G-5-305, 53G-5-306, and this rule or by the Board under Section 53[A-1a-505]G-5-304.

[D.](3)(a) "Charter school agreement" or "[(]charter agreement[)]" means the terms and conditions for the operation of an approved charter school.

(b) The charter school agreement shall be maintained [at the USOE]by the Superintendent and is considered the final, official and complete agreement.

[E.](4) "Charter school deficiencies" means the following information:

[(1)](a) a charter school is not satisfying financial, academic or operational obligations as required in its charter agreement;

[(2)](b) a charter school is not providing required documentation after being placed on warning status; or

[(3)](c) compelling evidence of fraud or misuse of funds by charter school governing board members or employees.

(i) Fraud or misuse of funds need not rise to the minimal standard.

(ii) [It]Fraud or misuse of funds may include

(A) failure to properly account for funds received at the school;

(B) failure to follow regularly established accounting and receipting practices; or

(C) failure to provide data, financial records , or information as requested by the State Charter School Board or the Board.

[F.](5) "Charter school governing board" means the board designated by the charter school to make decisions for the operation of the school.

[G.](6) "Probation" means a formal process and time period during which a school is permitted to demonstrate its full compliance with its charter agreement and all applicable laws, rules and regulations.

[H.](7) "State Charter School Board" means the board designated in Section 53[A-1a-501.5]G-5-201.

[I. "Superintendent" means the State Superintendent of Public Instruction as designated under Section 53A-1-301.

J. "USOE" means the Utah State Office of Education.]

[K.](8) "Warning status" means an informal status in which a school is placed through written notification from the [USOE]the school's authorizer for the school's failure to maintain compliance with its charter agreement, applicable laws, rules or regulations.

 

R277-481-3. State Charter School Board Oversight, Minimum Standards, and Consequences.

[A.](1) The State Charter School Board shall provide direct oversight to the charter schools for which it is the chartering entity, including requiring all charter schools to:

[(1)](a) comply with their charter agreements containing clear and meaningful expectations for measuring charter school quality.

[(2)](b) annually review charter agreements, as maintained by the [USOE]Superintendent;

[(3)](c) regularly review other matters specific to effective charter school operations, including a comprehensive review of governing board performance at least once every five years; and

[(4)](d) audit and investigate claims of fraud or misuse of public assets or funds.

[B.](2) All charter schools authorized by the State Charter School Board shall also meet the following minimum standards:

[(1)](a) charter schools shall have no unresolved material findings, financial condition findings or repeat significant findings in the school's independent financial audit, federal single audit or [USOE]Board audits;

[(2)](b) charter schools shall maintain a minimum of 30 days cash on hand or the cash or other reserve amount required in bond covenants, whichever is greater;

[(3)](c) charter schools shall have no violations of federal or state law or regulation, Board rules or Board directives;

[(4)](d) charter schools shall have all teachers properly licensed and endorsed for teaching assignments in CACTUS; and

[(5)](e) charter school governing boards shall ensure all employees and board members have criminal background checks on file.

[C. Warning status]

([1]3) (a) A charter school that fails to meet any of the minimum standards or a significant number of performance standards may be placed on warning status and notified in writing by the [USOE]school's authorizer.

[(2)](b) While a school is on warning status, the school may seek technical assistance from the [USOE staff]school's authorizer to remedy any deficiencies.

[D. Probation status]

([1]4) (a) If any minimum standard or a significant number of performance standards has not been met by an assigned date following designation of warning status, the State Charter School Board shall notify the school in writing of the specific minimum standard(s) the school did not meet.

[(2)](b) Based on the State Charter School Board's review of the charter school's noncompliance, progress and response to technical assistance, the State Charter School Board may place the school on probation for up to one calendar year following the designation of warning status.

[(3)](c)(i) Upon placing a school on probation, the State Charter School Board shall set forth a written plan outlining those provisions in the charter agreement, applicable laws, rules and regulations with which the school is not in full compliance.

(ii) This written plan shall set forth the terms and conditions and the timeline that the school shall follow in order to be removed from probation.

[(4)](d) If the school complies with the written plan in a timely manner, the State Charter School Board shall remove the school from probation.

[(5)](e)(i) While a school is on probation, it shall be required to satisfy certain requirements and conditions set forth by the State Charter School Board.

(ii) If the school fails to satisfy specific requirements and conditions by a date established by the State Charter School Board, the State Charter School Board may terminate the school's charter.

[(6)](f) While a school is on probation, the school may seek technical assistance from the [USOE]State Charter School Board staff to remedy any deficiencies.

[(7)](g) The State Charter School Board may, for good cause, or if the health, safety, or welfare of the students at the school is threatened at any time during the probationary period, terminate the charter immediately.

 

R277-481-4. Charter School Governing Board Compliance with Law.

[A.](1) The Board may review or terminate the charter based upon factors that may include:

[(1)](a) failure to meet measures of charter school quality which includes adherence to a charter agreement required and monitored by chartering entities; or

[(2)](b) charter school deficiencies; or

[(3)](c) failure of the charter school to comply with federal or state law or regulation, Board rules , or Board directives.

[B.](2) If a charter school's charter conflicts with applicable federal or state law or rule, the charter shall be interpreted to require compliance with such law or rule; all other provisions of the school's charter shall remain in full force and effect.

[C.](3) A charter school governing board may amend its charter agreement by receiving approval from its chartering entity consistent with Section [53A-1a-508]53G-5-303.

[D.](4) Chartering entities shall obtain approval by the Board before amending charter agreements specific to :

([1]a) changes to mission and purpose;

([2]b) waivers from Board administrative rule;

([3]c) expansions of student enrollment;

([4]d) expansions of grade levels that will put students in different weighted pupil unit grade level categories; and

([5]e) revolving loans.

[E.](5) A charter school shall notify the Board and the chartering entity of any and all lawsuits filed against the charter school within 30 days of the filing of the lawsuit.

 

R277-481-5. Chartering Entity Oversight and Monitoring.

[A.](1) Local school board and institutions of higher education chartering entities shall:

[(1)](a) visit a charter school at least once during its first year of operation in order to ensure adherence to and implementation of approved charter and to finalize a review process;

[(2)](b) visit a charter school as determined in the review process;

[(3)](c) provide written reports to a charter school after the visits that set forth strengths, deficiencies, corrective actions, timelines and the reason for charter termination, if applicable; and

[(4)](d) audit and investigate claims of fraud or misuse of public assets or funds.

[B.](2) Chartering entities shall notify the Board within 20 days of charter school deficiencies that initiate corrective action by chartering entities.

 

R277-481-6. Charter School Financial Practices and Training.

[A.](1) Charter school business administrators shall attend [USOE required ]business meetings [for charter schools]required by the school's authorizer.

[B.](2) Charter school governing board members and school administrators shall be invited to all appropriate Board-sponsored training, meetings, and sessions for traditional school district financial personnel.

[C.](3) The Board shall work with other education agencies to encourage their inclusion of charter school representatives at training and professional development sessions.

[D.](4)(a) A charter school shall appoint a business administrator consistent with Sections 53[A]G-[3]4-302 [and ]through 53G-4-303.

(b) The business administrator shall be responsible for the submission of all financial and statistical information required by the Board.

[E.](5) The Board may interrupt disbursements to charter schools for failure to comply with financial and statistical information required by law or Board rules.

[F.](6) Charter schools shall comply with the Utah State Procurement Code, Title 63G, Chapter 6.

[G.](7) Charter schools are not eligible for necessarily existent small schools funding under S ubsection 53[A]F-[17a]2-[109]304(2) and Rule R277-445.

 

R277-481-7. Remedying Charter School Financial Deficiencies.

[A.](1) Upon receiving credible information of charter school deficiencies, the chartering entity shall immediately direct an independent review or audit through the charter school governing board.

[B.](2) The chartering entity or the Board through the chartering entity may direct a charter school governing board or the charter school administration to take reasonable action to protect state or federal funds consistent with Section 53[A-1a-510]G-5-503.

[C.](3) The chartering entity or the Board may:

[(1)](a) allow a charter school governing board to hold a hearing to determine financial responsibility and assist the charter school governing board with the hearing process;

[(2)](b) immediately terminate the flow of state funds;

[(3)](c) recommend cessation of federal funding to the school;

[(4)](d) take immediate or subsequent corrective action with employees who are responsible for charter school deficiencies consistent with Section 53A-1a-509; or

[(5)](e) any combination of the foregoing [(1), (2), (3) and (4)]Subsections (3)(a) through (d).

[D.](4) The recommendation by the chartering entity shall be made within 20 school days of receipt of complaint of deficiency(ies).

[E.](5) The chartering entity may exercise flexibility for good cause in making recommendation(s) regarding deficiency(ies).

[F.](6) The Board shall consider and affirm or modify the chartering entity's recommendation(s) for remedying a charter school's deficiency(ies) within 60 days of receipt of information from the chartering entity.

[G.](7) In addition to remedies provided for in Section [53A-1a-509]53G-5-501, the chartering entity may provide for a remediation team to work with the school.

 

R277-481-8. Appeals Criteria and Procedures.

[A.](1) Only an operating charter school, a charter school that has been recommended for approval to the Board, or a charter school applicant that has met State Charter School Board requirements for review by the full State Charter School Board, may appeal chartering entity administrative decisions or recommendations to the Board.

[B.](2) The following chartering entity administrative decisions may be appealed to the Board:

[(1)](a) termination of a charter;

[(2)](b) denial of proposed amendments to charter agreement;

[(3)](c) denial or withholding of funds from charter school governing boards; and

[(4)](d) denial of a charter.

[C. Appeals procedures and timelines]

[(1)](3) The chartering entity shall, upon taking any of the administrative actions:

(a) provide written notice of denial to the charter school or approved charter school;

(b) provide written notice of appeal rights and timelines to the charter school governing board chair or authorized agent; and

(c) post information about the appeals process on its website and provide training to charter school governing board members and authorized agents regarding the appeals procedure.

[(2)](4) A charter school governing board chair or authorized agent (appellant) may submit a written appeal to the [State ]Superintendent within 14 calendar days of the chartering entity administrative action under Subsection (3).

[(3)](5)(a) The Superintendent shall, in consultation with Board Leadership, review the written appeal and determine if the appeal addresses an administrative decision by a chartering entity.

(b) If the Superintendent and Board Leadership determine that the appeal is appropriate, Board Leadership shall designate three to five Board members and a hearing officer, who is not a Board member, to act as an objective hearing panel.

[(4)](c) The hearing officer, in consultation with the Superintendent, shall set a hearing date and provide notice to all parties, including the chartering entity and staff.

[(5)](d) The Hearing shall be held no more than 45 days following receipt of the written appeal.

[(6)](e) The hearing officer shall establish procedures that provide fairness for all parties, which may include:

[(a)](i) a request for parties to provide a written explanation of the appeal and related information and evidence;

[(b)](ii) a determination of time limits and scope of testimony and witnesses;

[(c)](iii) a determination for recording the hearing;

[(d)](iv) preliminary decisions about evidence; and

[(e)](v) decisions about representation of parties.

[(7)](6) The hearing panel shall make written findings and provide an appeal recommendation to the Board no more than 10 calendar days following the hearing.

[(8)](7) The Board shall take action on the hearing report findings at the next regularly scheduled Board meeting.

[(9)](8) The recommendation of the chartering entity shall be in place pending the conclusion of the appeals process, unless the Superintendent in his sole discretion, determines that the chartering entity's recommendation or failure to act presents a serious threat to students or an imminent threat to public property or resources.

[(10)](9) All parties shall work to schedule and conclude hearings as fairly and expeditiously as possible.

[(11)](10) The Board's acceptance or rejection of the hearing report is the final administrative action on the issue.

 

KEY: charter schools, oversight, monitoring, appeals

Date of Enactment or Last Substantive Amendment: [February 7, 2014]2018

Notice of Continuation: August 2, 2013

Authorizing, and Implemented or Interpreted Law: Art X Sec 3; [53A-1-401(3); 53A-1a-501.3; 53A-1a-515; 53A-1a-521; 53A-1a-505; 53A-1a-501.5; 53A-1a-510; 53A-1a-509; 53A-1-301; 53A-3-302; 53A-3-303; 53A-17a-109]53E-3-401(4); 53G-5