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Charter School Financial Reporting for 2004-05

Letter Head: Jack O'Connell, State Superintendent of Public Instruction, Phone number 916-319-0800

September 16, 2005

Dear County and District Superintendents, County and District Chief Business Officials,
and Charter School Administrators:

CHARTER SCHOOL FINANCIAL REPORTING FOR 2004–05

This letter serves as a reminder of the submission requirements for charter schools for the 2004–05 unaudited actual financial data reporting.

Due Dates. Charter schools’ unaudited actual financial reports for fiscal year 2004–05 are due to the California Department of Education (CDE) on or before October 15, 2005 (Education Code Section 42100).

Prior to the submission to the CDE, each charter school is required to submit the financial data to its authorizing local educational agency (LEA) on or before September 15, 2005. The reports are then to be reviewed by the county office of education (COE) and submitted by the COE to the CDE.

In accordance with the dates and procedures noted in the preceding paragraph, the COE will submit the charter school financial reports to the CDE via electronic transfer (eTransfer) or diskette. If eTransfer is used, the COE will retain the signed certification page. If diskette is used, the certification page (with all original signatures) must accompany the diskette. Starting with submittal of 2005–06 data, the CDE plans to accept submissions solely through eTransfer.

The Financial Reporting Software. By now, we hope you have already downloaded the software needed to report your 2004–05 unaudited actual financial reports. If not, the software and related user guides are available at http://www.cde.ca.gov/fg/sf/fr/. Charter schools may report with or separately from their authorizing LEA in the Standardized Account Code Structure (SACS), or separately from their authorizing LEA in the Charter School Unaudited Actuals Financial Report (Alternative Form).

Reminder Regarding Accuracy in Charter School Reporting. In reviewing 2003–04 submissions of charter school financial data, we observed some instances where incomplete or inappropriate data were submitted to the CDE. The most common errors related to charter school data were:

  • SACS Fund 09 was not being used appropriately in all cases. Authorizing LEAs should ensure that charter school data are not duplicated in whole or in part in any other fund or format used by the LEA or by the charter school reporting separately. Activities performed by an authorizing LEA on behalf of a charter school, such as the receipt and subsequent pass-through of charter school funds, should be reported in the General Fund (Fund 01) of the authorizing LEA because these are activities of the authorizing LEA, not the activities of the charter school.
  • There was inappropriate mixing of different bases of accounting, either accrual or modified accrual, as evidenced by the use of both capital outlay expenditures and depreciation, or both debt service expenditures and long-term debt. Only one basis of accounting should be used. If you are not sure how these transactions should be coded, you may refer to the California School Accounting Manual for additional guidance at http://www.cde.ca.gov/fg/ac/.

Comparison of 2004–05 Beginning Balances with 2003–04 Ending Balances. In finalizing the 2004–05 unaudited actual submissions to the CDE, care should be taken by LEAs and charter schools to ensure that the correct ending balances for charter schools, as reported to the CDE for 2003–04, are used as the basis for the 2004–05 beginning balances. In SACS, any changes to prior year balances should be reported as Audit Adjustments (Object 9793) or Other Restatements (Object Code 9795). In the Alternative Form, any changes to prior year balances should be reported as Adjustments/Restatements to Beginning Balance (Line F1b).

Contact Information. For more information about charter school accounting and financial reporting and the financial reporting software, charter school personnel should first contact their authorizing district or county office of education. If additional help is needed, contact our Office of Financial Accountability and Information Services at 916-322-1770 or by e-mail at sacsinfo@cde.ca.gov.

Sincerely,

 

Scott Hannan, Director
School Fiscal Services Division

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