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HOW TO IMPLEMENT THE
FINANCIAL TRANSPARENCY
ACT PAGE 4
PUBLIC SCHOOL FINANCIAL
TRANSPARENCY ACT
A GUIDE FOR COLORADO CHARTER
SCHOOLS PAGE 6
A PAIN-FREE AUDIT:
TIPS TO GET CLOSER TO IT PAGE 8
PROTECT CHARTER
SCHOOL ASSETS PAGE 10
THE CHARTER SCHOOL
BOARD
ENSURING ADEQUATE RESOURCES
TO FULFILL THE SCHOOL’S MISSION
PAGE 12
UNDERSTANDING THE
FISCAL YEAR FINANCIAL/
BUDGET CYCLE PAGE 18
A Q U A R T E R LY J O U R N A L F O R C H A R T E R S C H O O L B U S I N E S S M A N A G E R S | F A L L 2 0 1 2 I S S U E
CONTENTS
3
2013 Colorado Charter Schools Conference
4
How To Implement The Financial Transparency Act
6
Public School Financial Transparency Act
The Colorado Charter Schools Conference is a great professional development
opportunity which features finance, fundraising and other breakout sessions designed for
business managers. It’s also a chance to network with charter school business managers
from across Colorado to share best practices.
The Colorado General Assembly passed House Bill 10-1036 in the spring of 2010,
commonly known as the “Public School Financial Transparency Act.” The Bill requires
public school districts and charter schools to post financial information online, in a
downloadable format, for free public access.
A Guide For Colorado Charter Schools
Pursuant to the Public School Financial Transparency Act (C.R.S. § 22-44-304), all
Colorado charter schools must post certain information on-line, in a downloadable
format, for free public access.
8
A Pain-Free Audit:
Tips To Get Closer To It
It’s fall and charter school business managers are jumping into their new year. They are
busy catching up on bank reconciliations, preparing checks and monitoring the budgets
for the current year. Suddenly, they realize that the once-a-year event known as the audit
is coming up. Are you prepared and confident in completing this yearly requirement? If
you are not sure that you are ready, here are some tips to make sure that this process will
flow as smoothly as possible. These are the top ten items that insure a pain-free audit.
10
Colorado League of Charter Schools
725 S. Broadway, Suite 7
Denver CO 80209
Charter Focus Advisory Committee
Thank you to the following individuals for
donating their time and expertise.
Diane Borre
The Vanguard School
Dan Sherrill
Caprock Academy
Dina Walton
Rocky Mountain Academy of Evergreen
2
www.coloradoleague.org
Ten Control Activities to Prevent Fraud even with a Small Staff
At the National Charter School Conference held in Minneapolis in June, multiple
speakers stated that the number one reason that charter schools close is due to financial
mismanagement. Whether these types of closures have been due to innocent error, a lack
of training, or fraud, charter schools cannot afford to risk precious resources.
12
Phone 303-989-5356
Fax 303-984-9345
Email info@coloradoleague.org
www.coloradoleague.org
Tiffany Kallevik
Director of Member Business Services
Protect Charter School Assets
The Charter School Board:
Ensuring Adequate Resources to Fulfill the School’s Mission
The governing board at the charter school plays a critical role in financial oversight
and sustainability of the school. The board is responsible for establishing appropriate
financial policies and controls, developing and approving the annual and long term
budget, ongoing monitoring of the revenues and expenditures, contracting with an
independent audit firm annually, and raising funds to help support strengthening the
school’s programs.
14
Serving on the School Board:
15
Group Purchasing Program
17
Colorado League of Charter Schools’ Vendor
Marketplace
18
Understanding the Fiscal Year Financial/Budget Cycle
Training Opportunities from the League
‘Cost Savings Through Collaboration’
One of the many indicators of a successful charter school is a set of solid financial
procedures that meets state statutory requirements, as well as the needs of the school and
contractual obligations with the charter authorizer. Districts and charter schools have the
same financial obligations and no financial waivers are available for charter schools under
state law (C.R.S. 22-30.5-112(7)).
Colorado League of Charter Schools
Omni Interlocken Resort, Broomfield, CO
The Colorado Charter Schools Conference is a
great professional development opportunity which
features finance, fundraising and other breakout
sessions designed for business managers. It’s also
a chance to network with charter school business
managers from across Colorado to share best
practices. The 2013 Conference will also feature a
celebration of the 20th anniversary of Colorado’s
charter school law.
Be sure to register before December 10 to get
the lowest, early bird rates.
Charter Focus | Fall 2012
3
HOW TO
IMPLEMENT
THE FINANCIAL
TRANSPARENCY
ACT
FINANCIAL TRANSPARENCY LAW
The Colorado General Assembly passed House Bill
10-1036 in the spring of 2010, commonly known
as the “Public School Financial Transparency Act.”
The Bill requires public school districts and charter
schools to post financial information online, in a
downloadable format, for free public access.
Financial information to be posted online includes:
4
www.coloradoleague.org
Colorado League of Charter Schools
COMMENCING JULY 1, 2010
ff adopted annual budgets
ff audited financial
statements
ff quarterly financial
statements
ff salary schedules or policies
COMMENCING JULY 1, 2011
ff accounts payable registers
ff credit and/or debit card
statements
COMMENCING JULY 1, 2012
ff investment performance
reports
WHERE TO PLACE
FINANCIAL
INFORMATION ON
YOUR SCHOOL’S
WEBSITE
At Peak to Peak Charter
School, the information is
posted on the front page of the
school’s website
(www.peaktopeak.org)
under “About Us.” A link to
“Financial Transparency”
takes you to the financial data
for Peak to Peak, where all
of the above listed items can
be viewed. The law requires
that financial information
be updated within 60 days
of the completion or receipt
of report, statement, or
document. In addition, the
current year’s financial
information plus the
prior two years’ must
be posted at all times.
At Peak to Peak, we
update the financial information monthly as financial
reports are completed. Most
documents are posted in PDF
format, with the exception of
the check registers and credit
card transactions, which are
posted in Excel spreadsheet
format (.xls). The Excel format
allows the public to sort the
data and shows the transactions on a monthly basis
through the use of tabs.
In addition, a link to the
Colorado Department of
Education’s website and the
charter school’s authorizer’s
website is required.
ENGAGING YOUR
SCHOOL COMMUNITY
Peak to Peak’s commitment
to financial transparency does
not stop with the state statute.
Last year, a series of white
papers was released to parents
and staff addressing various
financial topics, and posted
on the Financial Transparency
section of the school’s website.
The subjects covered included:
state funding cuts, financial
reserves, financial transparency, future campus building
projects, and fundraising. The
purpose of the papers is to
provide a better understanding
of the school’s financial situation and to bring clarity to
decisions that have been made
with finances.
In addition, Peak to Peak’s
budget planning process has
been expanded to multiple
stakeholders by including
members of the executive
leadership team (ELT), which
includes all principals and
directors, in the development of the annual budget.
Members of the ELT include
the executive director of
education, executive director
of operations, high school
principal, middle school
principal, elementary school
principal, assistant director of
elementary school, director of
instructional data and technology, director of professional
development, director of the
executive office, food services
director, facilities director,
director of advancement,
human resources director,
and athletics and activities
director. This collaborative
approach has enhanced the
level of budget oversight
and increased ownership for
the execution of the annual
budget.
Regular financial updates
are also presented to staff on
professional development
days. These presentations are
designed to provide up-to-date
information, as well as a forum
to address questions about the
school’s finances.
Because all of the key financial documents for the school
are now posted for the public
to review, parents and other
stakeholders can now see how
the school is doing financially
with just a few keystrokes on
their computers. Never before
has it been so easy for staff and
families to understand how the
school’s finances are faring, but
they also have the ability to
ask questions, verify financial
results, and compare to other
schools.
Sam Todd is the Executive Director
of Operations at Peak to Peak Charter
School (www.peaktopeak.org).
Never before has it been
so easy for staff and families
to understand how the school’s
finances are faring.
Charter Focus | Fall 2012
5
PUBLIC SCHOOL FINANCIAL
TRANSPARENCY ACT
A Guide for Colorado Charter Schools
REQUIRED
INFORMATION
Pursuant to the Public School
Financial Transparency Act
(C.R.S. § 22-44-304), all
Colorado charter schools must
post the following information
on-line, in a downloadable
format, for free public access:
COMMENCING WITH 2009-10
BUDGET YEAR:
ff Annual budget
ff Annual audited financial
statements
COMMENCING JULY 1, 2011:
ff Accounts payable check
registers and credit,
debit, and purchase card
statements
COMMENCING WITH THE
2010-11 BUDGET YEAR:
ff Quarterly financial
statements
ff Salary schedules or policies
COMMENCING JULY 1, 2012:
ff Investment performance
reports or statements
For an example of what this
should look like, go to: http://
www.cde.state.co.us/
cdefinance/download/pdf/
TransparencyTemplate.pdf
UPDATING AND
MAINTENANCE
60-Day Rule: Information
must be updated within sixty
(60) days after completion
or receipt of the applicable
report, statement, or document
(following approval of the item
by the school’s Board).
Maintenance: Each school
must maintain the prior two
(2) budget years’ financial
information until the end of
the current budget year.
LINK TO DEPARTMENT
WEBSITE
The school must also provide a
link to the department of education website or the location
information for the department’s website where reports
are submitted (http://www.cde.
state.co.us/index_finance.htm).
LINKING TO
DISTRICT’S WEBSITE
If a charter school links to the
district’s financial transparency
website, the listed information
must be able to be seen for the
individual charter school. On
the charter school’s website, it
should be clear that the link will
direct the user to the school’s
financial documents. Linking
to the district’s main page is not
acceptable.
If the information is not
available at the school level
6
www.coloradoleague.org
Colorado League of Charter Schools
on the district’s website, then
each charter school is responsible for posting this information. Charter schools are also
responsible for ensuring that
all financial data is updated
within 60 days of issuance of
the data, and that financial
data for two prior years is
maintained online.
Information provided by the
Schools of Choice Unit at the Colo.
Dept. of Education, courtesy of
the Public School Finance Unit
(received by email, Nov. 15, 2011 ).
WHAT YOU SHOULD
NOT POST
Personal payroll information
such as deductions or contributions, or any other information that is confidential or
otherwise protected from
public disclosure pursuant
to state or federal law should
not be posted (i.e., protection of medical information
per HIPAA, personnel files,
accommodations made per
Americans with Disabilities
Act, etc.).
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learning.
At CCU,
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teaching career.
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QUESTIONS?
Please contact Trish Krajniak,
Legal Fellow at the Colorado
League of Charter Schools,
with any questions, comments
or concerns. Trish can be
reached by email at tkrajniak@
coloradoleague.org or by phone
at 303.989.5356 x120.
Trish Krajniak is a Legal Fellow at the
Colorado League of Charter Schools.
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Charter Focus | Fall 2012
7
I
t’s fall and charter school
business managers are
jumping into their new year.
They are busy catching up on
bank reconciliations, preparing
checks and monitoring the
budgets for the current year.
Suddenly, they realize that
the once-a-year event known
as the audit is coming up. Are
you prepared and confident in
completing this yearly requirement? Here are some tips to
make sure that this process will
flow as smoothly as possible.
These are the top ten items that
insure a pain-free audit.
ff Prepare an internal control
narrative – one thing that
can take up a large chunk
of your valuable time is to
sit with the auditors and
describe how you process
8
www.coloradoleague.org
transactions through your
accounting system. If you
prepare a narrative that
describes what you do and
how you do each, the auditors will only have to test
your document instead of
preparing their own control
narrative, which can save
you both time. At a minimum, you should describe
how you process cash
receipts, accounts payable
and payroll. If you are really
on top of it, you can add
human resources, credit or
debit card transactions and
investment strategies.
ff Use the Colorado
Department of Education
(CDE) Chart of Accounts –
CDE has a standard chart of
accounts that dictates and
flows into reports that the
auditors must present in
your audited financial statements. If you can mirror
your chart of accounts as
closely as possible to the
CDE standard, you can
eliminate many questions
and guesswork on the part
of the auditors. This will
also help with budgeting
each year and make CDE
happy. http://www.cde.
state.co.us/cdefinance/
sfCOA.htm
ff Record all journal entries
into your accounting system
before the auditors arrive
– Nothing is more frustrating to the school and the
auditors than trying to audit
a moving target. After you
give the trial balance to the
auditors your accounting
system is virtually “locked”
for any other entries for
the period under audit. If
you discover entries that
you would like to record,
inform the auditors and
they can make them as audit
entries. This will minimize
any confusion when you
try to reconcile the audited
numbers to your trial
balance.
ff Have all source documents
ready in advance – The
auditors will request various
source documents for their
files. These include leases,
bond documents, charters
with the District, articles of
incorporation and bylaws,
board minutes and a list of
the board members, and any
policies or procedures that
relate to the accounting or
finance department. The
auditors should provide you
with a list of the documents
that they are requesting.
You should go through this
list and make sure that you
can locate each and every
one that is applicable to
your school.
ff Your Equity Accounts
Should Agree to Your Prior
Year Audit – This will be
one of the first things that
your auditor will look at.
If they do not agree, you
should make sure that you
posted the prior year audit
adjustments. If you still
cannot find the difference,
you should review the
equity accounts to make
sure that you did not record
Colorado League of Charter Schools
any journal entries into
the equity accounts. As a
preventive measure, you
should always obtain the
final trial balance from the
auditors after the audit is
completed. You can then
compare your balance
sheet and net income to the
audited amounts to make
sure that they agree.
ff All Cash Accounts should be
Reconciled to the General
Ledger – This sounds like a
basic procedure but nothing
will slow down an audit
faster than having unreconciled differences in the bank
reconciliation. The auditors
will automatically become
more skeptical of your
trial balance and may be
required to test some items
with more detail than they
would have if the reconciliation tied out to the General
Ledger. So right before the
audit, quickly look at all
of your reconciliations and
bank statements to make
sure that no changes were
made to your accounting
records after the reconciliation process was completed.
ff All Supporting Documents
Should be Easy to Locate
– In performing their test
work, the auditors will
look at accounts payable
invoices, personnel files,
cash receipts and credit
and debit card charges.
Gathering this documentation is probably the most
time consuming process on
the part of the client during
the audit. If you file all items
in an orderly fashion and
are confident that you can
locate everything, your time
will be minimized and your
chances for frustration may
be eliminated.
ff Do Not Make Copies of
Every Document – As many
auditors utilize electronic
audit software, they do not
need copies of your source
documents. Standing by the
copier is a memory of audits
in the past. The auditors
will either scan the original
document or just incorporate the electronic copy
(i.e. Word, Excel or Adobe)
directly into the audit
software. This also makes
follow up questions much
easier to answer, as you can
just email the requested
information directly to the
auditors.
ff Make Sure that the
Information for all Potential
Component Units is
Available – Many entities
that are legally separate
need to be included in an
audit report to make the
audit report complete.
This always applies to
the Building Corporation
and sometimes to
Foundations or Parent
Teacher Organizations. You
should have the financial
information available for the
auditors at the start of the
audit. The information that
you need to have available
includes the trial balance,
bank statements and
reconciliations, support for
any revenues, and support
for the expenses. Having
this information available
will help complete the audit
and the completion of the
report on a timely basis.
ff Become familiar with Your
Balance Sheet – Before the
audit, you should review
your balance sheet and
make sure that you are
familiar with what each
item is. Some items to
keep in mind are accounts
receivable (are they valid,
have they been collected),
property and equipment (do
you have a detailed schedule
with depreciation calculated), prepaid expenses,
deposits and other assets
(are they accurate and up
to date), accounts payable
(does the trial balance agree
to the detail schedule in the
accounting system), and
payroll accruals (are they
accurate). By doing this, you
will not be intimidated by
questions the auditors
may ask.
There is no guarantee that
every audit will go smoothly
and there may be bumps in the
road, but these tips will help
make sure that any bumps are
minor and easily overcome.
John Cutler, CPA, is the owner of John
Cutler & Associates, a provider of audit
services for Colorado charter schools.
(www.jcacpa.net)
These are the top ten items that
insure a pain-free audit.
Charter Focus | Fall 2012
9
PROTECT
CHARTER
SCHOOL
ASSETS
Ten Control Activities
to Prevent Fraud even
with a Small Staff
At the National Charter Schools Conference
held in Minneapolis last June, multiple
speakers stated that the number one reason
that charter schools close is due to financial
mismanagement. Whether these types of
closures have been due to innocent error,
a lack of training, or fraud, charter schools
cannot afford to risk precious resources. My
colleague and team member, Linda Saddlemire
combines her expert knowledge of school
business administration with her experience
investigating fraud to offer ten key control
activities charter schools can implement to
protect their assets. In addition to her CPA &
MBA, Linda has two fraud-related credentials.
She is Certified in Financial Forensics (CFF)
and is a Certified Fraud Examiner (CFE).
intro by derrick j. debruyne, cpa, cfe
story by linda m. saddlemire, cpa/cff, cfe, mba
10
www.coloradoleague.org
Colorado League of Charter Schools
A
n effective
internal control
system is a charter school’s
best safeguard against fraud.
While ensuring the integrity
and reliability of the financial
records is one of the primary
objectives for designing sound
internal control; proper control
activities also reduce the risk
of innocent and unintentional
errors in accounting. This is
especially true of the element of
the segregation of duties which
stipulates that key accounting
functions should be divided
among several staff members.
A charter school with a small
number of staff members may
find it difficult to adequately
segregate duties to begin
with. In a charter school also
facing budget cuts, there may
be further staff reductions,
which could increase financial
vulnerabilities if the accounting
duties previously performed
by two or more staff members
are consolidated into one job
description.
When there are too few
employees to properly separate
accounting functions, school
leaders can compensate for the
increased fraud risk by initiating effective control activities.
For many of the cases we have
investigated, losses due to fraud
could have been prevented
entirely or detected at an early
stage if school management had
implemented any or all of the
following ten control activities:
1
INVEST IN
TRAINING
Job responsibilities and fraud
awareness: An important
facet of operations is to ensure
that employees understand
their job responsibilities. In
addition to understanding
how categories of accounting
functions fit in the entire
organization, fraud can be best
deterred if employees know
the risks associated with their
respective positions. What
potential problems should
they be looking for? What
evidence should be present to
indicate that all employees are
accomplishing their intended
functions? Internal controls
should be a system of checks
and balances—so train your
employees to know what they
should check and how their
roles balance risks. The charter
school’s auditor can help with
this training. The time and
money invested in this training
should be a minimal cost to
the school, but will improve
productivity and reduce the
risk of losses due to fraud.
2
MANDATORY JOB
ROTATION AND
VACATIONS
Cross train and require
vacations! Train employees to
know their colleagues’ jobs.
Understanding the responsibilities and techniques of
colleagues is critical when there
is an unexpected absence, a
prolonged illness, or a planned
vacation. Not only can another
employee step in to accomplish
the task, but errors can be
caught and corrected. Many
frauds are detected when
one employee fills in for an
absent employee. Don’t allow
employees to work endlessly
without taking vacation.
Require that each employee
take the allotted time off and
have another employee take
over the desk of the one who
is out. Again, errors that are
otherwise invisible might come
to light. Whether the error
is intentional or not, school
leaders need to take action to
re-train, correct or investigate
as necessary.
3
INCREASE
ANALYTICAL
ANALYSIS
Though it sounds redundant,
analytical analysis is an actual
accounting term that describes
the process of looking at
numbers to verify that they are
reasonable. Add these high level
assessments of your operations
in order to maintain an accurate
understanding of financial
operations:
ff Budget to actual
comparisons
ff Trend analysis
ff Site to site comparisons
(if applicable)
ff Comparison to similar
schools
ff Payroll review by title
ff Payroll comparison by site
with overtime separated
BANK
4ROTATE
RECONCILIATION
DUTIES
Bank statement reconciliation should be performed by
someone who does not collect
cash, make deposits, prepare
receipt summaries, or post
receipts to the general ledger.
If proper segregation of duties
cannot be achieved, rotate the
responsibility of bank statement reconciliation among two
or three employees. Randomly
intervene and perform the
reconciliation yourself. And
finally, have the bank statement
sent directly to you (or a board
member without signatory
authorization). Make sure you
receive it unopened, and review
the statement and the canceled
checks for any unexpected
transactions or irregularities.
Make a point to ask a few
questions of those who perform
accounts receivable, accounts
payable, and reconciling functions regarding transactions
in the bank statement. Sign or
initial and date the bank
continued on page 16 ...
Charter Focus | Fall 2012
11
THE CHARTER
SCHOOL BOARD:
ENSURING
ADEQUATE
RESOURCES
TO FULFILL
THE SCHOOL’S
MISSION
The governing board at the charter school plays a critical role in
financial oversight and sustainability of the school. The board is
responsible for establishing appropriate financial policies and
controls, developing and approving the annual and long term
budget, ongoing monitoring of the revenues and expenditures,
contracting with an independent audit firm annually, and raising
funds to help support strengthening the school’s programs.
by
12
www.coloradoleague.org
k e l ly
chrisman
Colorado League of Charter Schools
IS YOUR SCHOOL
FISCALLY SOUND?
Rate your school using the following checklist from the Colorado
Department of Education’s Charter
School Support Initiative Standard
11. You can download the entire
rubric at: http://www.cde.state.
co.us/cdechart/cssi.asp.
RESPONSIBILITY
(STANDARD 11: SOUND
FISCAL MANAGEMENT)
1
School leadership (board and
administration) collaboratively
develops short-term and long-term
budgets, making effective use of
sound budgeting practices.
2
School leadership uses realistic
revenue and program costs in
the budget.
3
4
The school has enough revenue
to ensure stable programming. The school has developed other
resources to augment per-pupil
revenue and can increase revenue if
a shortfall occurs.
5
School programs do not
exceed their assets. Programs
operate on a modest surplus and
the school makes adjustments to
reduce operational costs to cover
any deficit.
6
The school has access to
reserves or can raise money in
case a budget shortfall occurs or to
finance growth.
7
The governing board and
administrators hold themselves
responsible for the school’s
financial stability and integrity.
8
The governing board has
adopted policies that ensure
financial health and a strong
system for the timely, accurate
tracking and recording of all
financial data and transactions.
THE ROLE OF THE
FINANCE COMMITTEE
IN SUPPORTING THE
BOARD’S WORK
The finance committee can support
the board by digging deeper
into the finances at the school
in between board meetings and
bringing recommendations to the
board. In order to make this committee effective, the board needs to
set clear expectations around the
composition, work, and reporting
of the committee. This can be
accomplished in a board resolution
or through board policy.
Composition: The finance committee typically includes at least the
school principal, business manager,
and board treasurer. Some schools
include an additional board member
or a member of the community with
strong financial background. If you
are targeting a member of the community, make sure candidates come
with the expertise needed to serve
on the committee as well as a clear
understanding of the expectations.
Recruiting a member of the community can also be a great recruitment
tool for future board members.
Meetings: The finance committee typically meets monthly and
often more frequently during the
budget cycle.
Expectations of the
Committee: The finance committee is typically charged with
developing the annual and long
term budgets, presenting budget
recommendations to the board,
monitoring implementation of the
budget on a regular basis, recommending budget revisions, and
monitoring the implementation of
financial controls and policies.
Reporting to the board: The
finance committee typically reports
to the board on a monthly basis.
These reports may come from the
board treasurer. Reports in writing
are beneficial for capturing the
work of the committee and also for
the board to review in advance of
the meeting.
Kelly Chrisman is the Director of Member
Services at the Colorado League of Charter
Schools. (www.coloradoleague.org)
RESOURCES TO SUPPORT THE BOARD’S WORK
COLORADO DEPARTMENT OF EDUCATION’S CHARTER SCHOOL SUPPORT
INITIATIVE STANDARD 11
http://www.cde.state.co.us/cdechart/cssi.asp
COLORADO CHARTER SCHOOL FINANCIAL MANAGEMENT GUIDE
http://www.cde.state.co.us/cdechart/guidebook/fin/pdf/FinanceGuide.pdf
ONLINE BOARD TRAINING MODULE: SCHOOL FINANCE
http://www.boardtrainingmodules.org/files/Docs/27.swf
ONLINE BOARD TRAINING MODULE: FINANCIAL OVERSIGHT
http://www.boardtrainingmodules.org/files/Docs/25.swf
Charter Focus | Fall 2012
13
SERVING ON THE SCHOOL BOARD:
TRAINING OPPORTUNITIES FROM
THE LEAGUE
SOUND PRACTICES IN CHARTER SCHOOL GOVERNANCE (Typically a four hour training)
This package introduces basic roles, responsibilities and
general practices essential to creating and/or operating an effective charter school board. This training can be applied to boards
of new schools, or existing boards needing assistance with
structure and operations. This training is customized for each
school via a pre-session survey and conference call to best meet
the needs of the charter school board. This training package can
include the review of items such as: committees (work, structure
and board oversight), board recruitment, public relations and
marketing, measuring constituent satisfaction, evaluating the
board and administration, developing essential operating documents, legal roles and responsibilities of board members, running
effective meetings, school bylaws (and other foundational documents), essential policies as they relate to items such as board
meeting/operations protocol, conflict of interest, employment,
school operations, accountability, and basic contract provisions
(especially at the time of charter renewal) and waivers.
PERFORMANCE MANAGEMENT FOR CHARTER SCHOOL BOARDS (Typically a four hour training)
This training provides the foundation for understanding
the board’s role in ensuring improved student performance and
school success. The session focuses on understanding student
performance data, key questions board members should know
how to answer, and how boards can establish sound practices in
academic performance oversight and monitoring. The training is
customized through a pre-session survey and conference call to
best meet an individual school’s needs. Other topics may include
key school performance measures, state and authorizer performance expectations and measures, mechanisms for appropriate
monitoring and evaluation of school performance.
STRATEGIC PLANNING (Amount of time varies based on needs of board – most charter schools utilize at least
eight hours either in a full day facilitation or two half day facilitations)
Charter school boards are responsible for ensuring effective
organizational planning. Developing a sound strategic plan is
key to supporting effective governance and leadership. Strategic
plans range from specific goals such as facilities acquisition to
more general purposes such as guiding the school’s strategic
priorities and continuous improvement. League staff assists
charter schools with items such as strategic planning process
design and facilitation, SWOT analyses with school constituencies, and identifying key performance indicators, measures,
metrics and targets.
RATES For all of the governance training packages, the half-day (4-hour) and full-day (8-hour) rates are as follows:
Half Day: $650.00
Full Day: $1,000.00
Interested in learning more? The League offers customized board
training packages for charter schools. Contact Kelly Chrisman
14
www.coloradoleague.org
(kchrisman@coloradoleague.org | 303-989-5356, ext. 107) if you are
interested in training opportunities or if you have any questions.
Colorado League of Charter Schools
Charter Focus | Fall 2012
15
... continued from page 11
statement to document your
review for your auditor. These
added control activities can
help to ensure that monies
received by the charter school
are deposited intact.
5
INTERCEPT BANK
RECONCILIATIONS
If you are not able to receive
the bank statements directly,
occasionally and unannounced,
intercept bank statements
and review canceled checks. If
your bank provides electronic
images of canceled checks, view
the images online. Look for anything out of the ordinary, like
checks written to individuals
or vendors you don’t recognize.
Compare the bank statement
balance to the book balance
and investigate large variances
or reconciling items.
6
SURPRISE CASH
COUNTS
At irregular intervals, perform an
unannounced count of cash. This
includes what is stored in vaults
and cash registers, petty cash,
daily sales, and change funds.
Compare the amount of cash
to the amount per the financial
records and investigate major
16
www.coloradoleague.org
differences. This simple test will
often reveal shortages of cash.
PAYROLL
7SURPRISE
CUTOFFS OR
INTERCEPTIONS
In order to prevent payment to
a fictitious employee, change
the distribution of paychecks
or stubs. Require an ID to pick
up checks or stubs. Randomly
compare the documents to the
approved rate of pay. Intercept
checks or stubs and compare
payees to an employee list.
8
SURPRISE
INVENTORY
COUNTS
Compare inventory records
with a physical count.
Warehouses, cafeterias and
bookstores should all be
included. What you do not
want to find is an excess or
shortage of inventory compared
to records. Either scenario
could indicate a fraudster’s
attempt to make personal use
of charter school assets.
9SURPRISE
DISBURSEMENTS
AUDITS
Occasionally and unannounced,
intercept checks and compare
them to invoices. At the same
time, compare payee names to
the disbursement journal. Do
they all match—the checks,
the invoices, and the disbursement journal? For instance, are
there any missing checks or
checks written to payees not
included in the journal? Also,
review authorizing signatures
to ensure that no one is forging
checks.
10
to integrity—this alone can
reduce a potential fraudster’s
ability to rationalize unethical
behavior.
SMART SOLUTIONS
FRAUD HOTLINE
According to the Association
of Certified Fraud Examiners,
there is no greater fraud
detection tool than a fraud
hotline. Anonymous tips were
the method of initial detection
used for over 43 percent of
reported fraud cases in 2012.
Management review came in
second with about 15 percent.
Note, however, that the hotline
is only as good as its training.
Some schemes are obvious
even to the untrained eye.
But in other cases, training is
necessary in order to educate
employees on what they should
or should not see in various
reports. Hotline services are
typically an affordable way to
show the school’s commitment
While charter school administrators may be focused on
their primary objective to
provide innovative instruction,
financial vulnerability could
be lurking in a blind spot.
Expose potential problems
with control activities that
really work to secure assets and
require that employees comply
with policies and procedures.
These systems help the charter
school accomplish its goals and
objectives, produce reliable and
accurate accounting data, and
maintain effective and economical operations.
Linda M. Saddlemire, CPA /CFF, CFE,
MBA, is the Co-Managing partner for
Vicenti, Lloyd & Stutzman LLP in Glendora, California. She leads the VLS Fraud
Solutions Team in preventing, detecting and investigating financial fraud in
charter schools and nonprofit organizations. Contact Linda at (626) 857-7300,
ext. 256, or email her at LSaddlemire@
VLSLLP.com.
Derrick J. DeBruyne, CPA, CFE is a Senior
Manager and Co-Leader of the VLS Charter School Audit Team. Contact Derrick at
(626) 857-7300, ext. 310, or email him at
DDeBruyne@VLSLLP.com.
Colorado League of Charter Schools
COLORADO
LEAGUE OF
CHARTER
SCHOOLS’ VENDOR
MARKETPLACE
This directory is not an endorsement by the Colorado League of
Charter Schools of any particular vendor, but rather an easily accessible source of vendors who support Colorado charter schools and want
to help them succeed. We encourage you to support all of our participating
vendors as you search for products and services. In choosing any vendor, the
League recommends that schools refer to applicable policies on competitive bidding,
check references, and contact the League if additional information is needed. View the
Vendor Marketplace online at www.coloradoleague.org.
SERVICE
ORGANIZATION
EMAIL
PHONE
WEBSITE
Facilities
Assessment/Compliance/SIS
Tutoring/Math Improvement
School Communication Systems
Accounting/Management Consulting
Equipment and Furnishings
Curriculum/Textbooks/Supplementals
Accounting/Management Consulting
Marketing & Design Services
Professional Development
Copier Services
Facilities
Financial Management and Investment
Facilities
Facilities
Facilities for Sale or Lease
Facilities for Sale or Lease
Educational Travel
Marketing & Design Services
Accounting/Management Consulting
Experiential Education
Facilities
Facilities
Technology
Facilities
Technology
Professional Development
Experiential Education
Curriculum/Textbooks/Supplementals
Curriculum/Textbooks/Supplementals
Curriculum/Textbooks/Supplementals
Technology
Facilities
Professional Development
Facilities
Facilities
Equipment and Furnishings
Facilities
Curriculum/Textbooks/Supplementals
Facilities
Facilities
School Communication Systems
Facilities
Curriculum/Textbooks/Supplementals
School Communication Systems
School Communication Systems
School Communication Systems
Equipment and Furnishings
E-Rate Consultants
Accounting/Management Consulting
Professional Development
Facilities
Therapist Staffing
Professional Development
Assessment/Compliance/SIS
Facilities
2WR of Colorado, Inc.
Achieve3000
After School University
BlueTree, Inc.
Boos Financial Services
Business Interiors by STAPLES
Character First
Charter School Management Corporation (CSMC)
Clay Pot Creative
(CCU) Special Education and Alternative Licensing
Complete Business Systems (CBS)
Consilium Partners LLC
CSAFE
Design Concepts
Eagle Creek Modular Solutions, Inc.
Education Facility Solutions (EFS)
Education Site Selection
EF Educational Tours
Feist Design
G&G Consulting Group, LLC
Genesee Experiential Outdoor Center - Denver Parks and Recreation
Haynes Mechanical Systems
Hutton Architecture Studio P.C.
iHigh.com
JHL Constructors, Inc.
Jones e-Global Library
KDT Consulting
Keystone Science School
MasterTech Solutions
Math In Focus: Singapore Math
McGraw Hill School Education Group
TalentEd: Online Staff Evaluation System
Powers Products
Professional Association of Colorado Educators (PACE)
Raza Development Fund, Inc
Roche Constructors, Inc.
S&S Worldwide
Satellite Shelters
Scholastic Inc: Read 180
ServiceMaster Clean
Siemens Industry
Skybeam Colorado
SLATERPAULL Architects
SportXcel
Sprint
Synergy Telecommunications, Inc.
System Communications
Tandus Flooring (formerly Collins and Aikman)
The FundEd Consulting Group
The HR Department
The Labragirl Film Project
The Neenan Company
Therapy Source, Inc.
Thinking Maps
Wireless Generations
Ziegler
geoff@2WRinc.com
angi.egan@achieve3000.com
mfeekes@afterschooluniversity.com
tjones@bluetree.net
rick@boosfs.com
sara.carvis@staples.com
kfahrenbruck@characterfirst.com
dhering@csmci.com
kurt@claypotcreative.com
bbwhite@ccu.edu
bblackwood@cbsofcolorado.com
jbills@consiliumpartnersllc.com
bob@csafe.org
shanen@dcla.net
eaglecreekmod@gmail.com
djones@efsk12.com
marshall.savage@na.ugllimited.com
justin.kryszan@ef.com
kirk@fiestdesign.com
lgrant@gandgconsult.com
genesee.ropes@denvergov.org
sclough@haynesmechsys.com
phutton@huttonarch.com
brandon.tosti@ihigh.com
mbodah@jhlconstructors.com
dbaker@egloballibrary.com
cbarry@kdtconsulting.org
dmiller@keystone.org
andy@mastertechsolutionsinc.com
jill.weber@hmhpub.com
mary_lynn_grover@mcgraw-hill.com
nick.maggio@netchemia.com
sharat@powersproducts.com
tfarmer@coloradoteachers.org
asanchez@razafund.org
arusch@rocheconstructors.com
cmada@ssww.com
jamiec@satelliteco.com
mturner@scholastic.com
patrickp@cleanmyfacility.com
travis.fletcher@siemens.com
draburn@corp.skybeam.com
awillson@slaterpaull.com
cgreif@sportxcel.com
michelle.wright@sprint.com
kimb@synergytelecom.net
steve@systemcommunications.com
jkimble@tandus.com
john.egan@getfunded.net
cinda.daggett@comcast.net
laurie@labragirlpictures.com
don.weidinger@neenan.com
williamk@txsource.net
jherm@actmindful.com
jgansmann@wgen.net
momeara@ziegler.com
(303)228-2242
(303)905-0841
(719)659-5979
(303)407-0221
(303)722-5634
(303)373-8482
(970)776-4341
(719)429-7665
(970)495-6855
(303)963-3120
(303)467-9080
(720)201-6373
(303)296-6340
(303)664-5301
(303)987-0700
(720)897-6607
(720)971-9000
(303)214-8250
(303)250-6336
(800)593-9011
(720)865-0680
(303)779-0781
(303)861-1600
(303)596-2775
(303)741-6116
(303)784-8603
(719)339-1367
(970)455-4229
(800)592-3163
(303)946-8465
(303)399-7792
(800)490-9686
(303)718-0054
(720)895-1980
(602)417-1410
(970)356-3611
(800)243-9232
(303)288-7111
(646)438-3522
(303)761-0122
www.2WRarch.com
www.achieve3000.com
www.afterschooluniversity.com
www.multiminder.com
www.boosfs.com
www.businessinteriorsbystaples.com
www.characterfirst.com
www.csmci.com
www.claypotcreative.com/
www.ccu.edu/ccu/programs/#Licensing
www.completebusinesssystems.com
consiliumpartnersllc.com
www.csafe.org
dcla.net
www.eaglecreekmodular.com
www.efsk12.com
www.ugl-equis.com
www.eftours.com
www.fiestdesign.com
www.gandgconsult.com
www.denvergov.org
www.haynesmechsys.com
www.huttonarch.com
www.ihigh.com
www.jhlconstructors.com
www.e-globallibrary.com
www.kdtconsulting.org
www.keystonescienceschool.org
www.mastertechsolutionsinc.com
www.hmheducation.com/mi/scg-singapore-math.php
www.mcgraw-hill.com
www.netchemia.com
www.powersproducts.com
www.ColoradoTeachers.org
razafund.org
www.rocheconstructors.com
www.ssww.com
www.satelliteco.com/
read180.scholastic.com/reading-intervention-program
www.cleanmyfacility.com
www.buildingtechnologies.siemens.com/
www.skybeam.com
www.slaterpaull.com
sportxcel.org
www.Sprint.com
www.synergytelecom.net/
systemcommunications.com/
www.tandus.com
www.getfunded.net
(970)402-1075
(303)607-0977
(720)437-0316
(303)520-0086
(303)339-8536
(303)688-6191
(303)741-0051
(480)473-5785
(303)981-2341
(720)445-0427
(303)710-1833
(866)783-5301
(303)870-7078
(303)794-6045
www.labragirlfilmproject.org
www.neenan.com
www.txsource.net
www.actmindful.com
www.wirelessgeneration.com
www.ziegler.com
Charter Focus | Fall 2012
17
UNDERSTANDING THE
FISCAL YEAR FINANCIAL/
BUDGET CYCLE
O
ne of the many
indicators of a
successful charter school is a
set of solid financial procedures
that meets state statutory
requirements, as well as the
needs of the school and contractual obligations with the charter
authorizer. Districts and charter
schools have the same financial
obligations and no financial
waivers are available for charter
schools under state law (C.R.S.
22-30.5-112(7)).
While a fiscal year consists
of only twelve months, the
cycle of planning for a fiscal
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www.coloradoleague.org
Colorado League of Charter Schools
year through the final audit
acceptance can take up to 24
months. The planning process
begins in November with the
presentation of the Governor’s
Operating Budget Request to
the Joint Budget Committee of
the Colorado General Assembly,
eight months prior to the June
adoption of the next year’s
budget. During this eightmonth planning period, staff
should be reviewing all available information for financial
impacts in preparation for the
beginning of the fiscal year.
After the General Assembly
convenes in January, charter
schools and districts monitor
bills as they are introduced.
Monitoring can occur through
the League, a lobbyist, or direct
communication with state
legislators. Reviewing proposed
bills that directly affect school
finance law and school operations, and providing feedback
and input when possible is
critical. Because the School
Finance Act makes up slightly
more than 40% of the state
budget, it is often introduced
late in the legislative session.
This makes revenue projections
difficult to verify until late in the
budget process.
As budget planning proceeds, schools project student
enrollment, which is combined
with estimated per-pupil
funding to serve as the foundation for the revenue budgets.
Using all available data points,
such as estimated year-end fund
balances, state inflation rates,
current state revenue forecasts,
and changes to insurance and
PERA costs, charters and school
districts build their proposed
budget for June 30 adoption and
appropriation.
As the new fiscal year
begins on July 1, the previous fiscal year is closed and
preparation for an annual fiscal
audit begins. Beginning with
the 2011-2012 fiscal year, every
charter school must conduct
an annual independent audit
of the school’s financial
statements. This requirement
necessitates an audit opinion
and basic financial statements
for each charter school, separate from the school district
audit. Fiscal activity after
July 1 includes preparing and
reviewing financial statements,
completing the annual October
Count, and if necessary,
adopting a Revised Budget
by January 31 to incorporate
new revenue information into
the financial plan. Quarterly
state revenue forecasts should
be monitored as an indicator
of potential state funding
rescissions. An annual review
of the charter school’s contract
with its authorizer can assist
in preparing for deadlines and
requirements that must be met.
Charter schools are subject
to all of the “Budget Policies and
Procedures” found under Title
22 Article 44 of the Colorado
Revised Statutes. These include,
but are not limited to, budget
contents, appropriation, preparation of budget, notice, filing,
and on-line access to information for fiscal transparency. In
addition, the charter school
is subject to the provisions of
Article 45 “Accounting and
Reporting” that includes, but is
not limited to, the requirement
for the charter board to review
the financial condition of the
charter school at least quarterly
during the fiscal year.
The Colorado Revised
Statutes mandate critical
deadlines for schools and
districts. The list of dates for the
current fiscal year can be found
on CDE’s website in the Public
School Finance/financial reporting section. Examples of these
critical dates include when
notice of budget information
must be posted, when audits
must be finalized, and when
school districts must provide to
each charter school an itemized
accounting of all actual costs of
district services.
Coordination and communication between a charter school
and its authorizer are critical to
build a strong financial relationship. Balancing the factors
charter schools have control
over (e.g. student enrollment),
and those that are not in their
control (e.g. PERA rates), is
one of the challenges faced
during the fiscal year process.
Understanding the full budget
and financial cycle is a critical
step to maintaining ongoing
financial health.
Kari Albright is the Charter School
Liaison at the Boulder Valley School
District.
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Charter Focus | Fall 2012
19
Colorado League of Charter Schools
725 S. Broadway, Suite 7
Denver CO 80209
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