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California Department of Education
Official Letter
California Department of Education
Official Letter
October 23, 2019

Charter School Superintendents, County and District Superintendents, and County and District Chief Business Officers:

NONCLASSROOM-BASED CHARTER SCHOOLS DETERMINATION OF FUNDING REQUESTS FOR THE FISCAL YEAR 2019–20

The purpose of this letter is to provide information regarding funding determination requests for charter schools operating under a nonclassroom-based (NCB) instructional setting. A charter school is considered operating as an NCB charter school if its total average daily attendance (ADA) is less than 80 percent classroom based.

An NCB charter school must submit a funding determination with the California Department of Education (CDE) to be eligible for funding for its NCB ADA. New NCB charter schools are required to file in their first year of operation. Existing NCB charter schools with expiring funding determinations are required to renew their funding determinations in the final fiscal year (FY) of their current funding determination period. Generally, new NCB charter schools are limited to a two-year funding determination period while existing NCB charter schools with expiring funding determinations may be approved for a minimum period of two years to a maximum period of five years.

California Education Code (EC) sections 47612.5 and 47634.2, and California Code of Regulations, Title 5 (5 CCR) established the criteria for the review and evaluation of determination of funding requests for NCB charter schools. The statutes specify that a charter school may receive apportionment funding for NCB instruction only if a determination of funding is made by the State Board of Education (SBE). NCB funding determination requests are reviewed by the CDE and presented to the Advisory Commission on Charter Schools (ACCS). Both the CDE and ACCS recommendations are then presented to the SBE for final approval.

If a charter school offers NCB instruction, as defined, and does not receive a funding determination from the SBE, the charter school will lose some or all of its state funding for its NCB ADA. EC Section 47612.5(e)(1) and 5 CCR Section 11963 specify the requirements for classroom-based instruction and school site conditions. Pertinent information is available on the California Legislative Information website at https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=EDC&sectionNum=47612 and the Thomson Reuters Westlaw California Code of Regulations web page at https://govt.westlaw.com/calregs/index.

A charter school that provides both classroom-based and NCB instruction should be aware that a funding determination is required to receive Local Control Funding Formula (LCFF) funding for their NCB ADA if their classroom-based ADA falls below the 80 percent minimum in accordance with EC Section 47612.5(e)(1). Furthermore, the CDE recommends that charter schools with classroom-based ADA to NCB ADA ratios projected near the 80 percent minimum obtain a funding determination to ensure against LCFF funding impacts should they unexpectedly fall below the 80 percent minimum.

Mitigating Circumstances

Pursuant to 5 CCR Section 11963.4(a), an NCB charter school may qualify for a funding determination of 70 percent, 85 percent, 100 percent, or be denied a funding determination. However, a charter school that does not meet the criteria for its requested funding determination may choose to submit mitigating circumstances (MC) for the ACCS to recommend otherwise. Pursuant to 5 CCR Section 11963.4(e), the ACCS may find a “reasonable basis” (also referred to as mitigating circumstances) by which to make a recommendation other than one that results from the criteria specified in 5 CCR Section 11963.4(a). The criteria specified in 5 CCR Section 11963.4(a) is available to be viewed on the Thomson Reuters Westlaw California Code of Regulations web page at https://govt.westlaw.com/calregs/index.

A charter school choosing to provide MC is required to complete Section VI of the NCB funding determination form. In previous years, the CDE had a separate form for providing MC. The separate MC form is no longer available and has been consolidated into the NCB funding determination form. Further, MC explanations must include, if any, documented data regarding the individual and specific circumstances; factors that are unique about the charter school; an explanation of why the charter school failed to meet the 5 CCR requirements for funding; and an explanation of the specific actions taken by the charter school to meet the funding criteria. The CDE may require additional information from the charter school in support of its MC response.

Filing Deadlines

The due dates to file a determination of funding request with the CDE are as follows:

  • New NCB charter schools in their first year of operation in FY 2019–20 must file on or before December 2, 2019.
  • NCB charter schools with an approved funding determination that will expire at the end of the FY 2019–20 must file on or before February 3, 2020.

Determination of funding requests received (not postmarked) after the applicable due date will not be accepted. The charter school will need to obtain a waiver approved by the SBE for any determination of funding request that is not filed timely or is not prospective. Information and timelines for filing a waiver are posted on the CDE Waivers web page at http://www.cde.ca.gov/re/lr/wr/index.asp.

Untimely Funding Determinations - Local Control Funding Formula Impact

There may be a significant fiscal impact to an NCB charter school’s LCFF if a determination of funding request is not submitted timely. While the timing will differ based on whether the NCB charter school is a new or an existing NCB charter school, the fiscal impact will be the same and LCFF funding will be jeopardized.

  • A new NCB charter school must have a funding determination approved by the SBE by its May 2020 meeting. If not met, beginning with the Second Principal (P-2) Apportionment for the FY 2019–20, the CDE will not disburse LCFF funds to the new charter school for any of its NCB ADA.
  • A continuing NCB charter school that files a prospective FY 2020–21 determination of funding request must have a funding determination approved by the SBE by its January 2021 meeting. If not met, beginning with the First Principal (P-1) Apportionment for the FY 2020–21, the CDE will not disburse LCFF funds to the charter school for any of its NCB ADA. In order to receive disbursement of LCFF funds for NCB ADA for P-2, the funding determination must be approved by the SBE by its May 2021 meeting.
  • A continuing NCB charter school that needs an FY 2019–20 funding determination must have a funding determination approved by the SBE by its January 2020 meeting. If not met, beginning with the P-1 Apportionment for the FY 2019–20, the CDE will not disburse LCFF funds to the charter school for any of its NCB ADA. In order to receive disbursement of LCFF funds for NCB ADA for P-2, the funding determination must be approved by the SBE by its May 2020 meeting.

In all three scenarios, funding may be adjusted after a funding determination is approved. However, any funding withheld at P-2 will not be adjusted until the following FY P-1 Apportionment certified in February. The charter school’s following FY Advance Apportionment funding will also be impacted. Other ADA driven funding for the charter school, such as lottery funding, may also be impacted. More information about the Principal Apportionment processes and timelines can be found on the CDE Fiscal Calendars web page at http://www.cde.ca.gov/re/ca/fc. Further questions regarding the implications to LCFF funding should be directed to the School Fiscal Services Division by email at pase@cde.ca.gov.

Filing Instructions

Information and instructions for completing the NCB funding determination form are available on the CDE Nonclassroom-Based Determination of Funding web page at http://www.cde.ca.gov/sp/ch/nclrbifunddet.asp.

In previous FYs, the CDE required NCB charter schools to submit hard and soft copies of their NCB funding determination form and Conflict of Interest Policy. However, as of FY 2019–20, the CDE is requiring NCB charter schools to submit only an electronic copy of their completed and signed NCB funding determination form. Hard copies of the NCB funding determination form and hard and soft copies of the Conflict of Interest Policy are no longer required.

The CDE will consider a filing as timely and complete when the completed and signed electronic copy of the funding determination request is received by email at Charter-SB740@cde.ca.gov by the applicable due dates.

Please direct all questions regarding this subject to the Charter Schools Division by phone at 916-322-6029 or by email at Charter-SB740@cde.ca.gov.

Sincerely,

/s/

Lisa F. Constancio, Director
Charter Schools Division

LFC:jy

Last Reviewed: Wednesday, October 23, 2019
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