Financial Performance Framework for charters approved

A recently approved Financial Performance Framework is geared to provide additional oversight for Arizona charter schools.

The framework was approved at the Arizona State Board for Charter Schools (AZSBCS) meeting last week.

“We’ve always had a financial framework, but this was an effort to make it more robust and to make it a more meaningful look at charters’ financials and to ensure that they are a viable entity to continue to serve students,” Kathy Senseman, AZSBCS board president, said.

The Financial Performance Framework passed unanimously by the AZSBCS after Mary Ellen Lee, AZSBCS board member, made a motion to move the framework forward.  

“It was authorized by the legislature last year to allow us to make decisions about school closure on the financial framework,” Senseman said. “Previous to that, we had only had academic and operational [issues] that we could use as a reason to close a school.”

Senseman explained that parents and interest groups have expressed an interest in schools’ finances.

“One of our recommendations- and we’ll put it into rule- is that charters will have to post a link to our framework on their website, so parents can get multiple pieces of information,” Senseman said.

She said, “So, academic framework, operational framework and financial framework dashboards and information so parents can make an informed decision about whether or not that school is right for their child.”

Measures

The framework indicates the schools will be measured on:

Going Concern

Default

Unrestricted Days Liquidity

Adjusted Net Income

Lease Adjusted Debt Service Coverage Ratio

Average Daily Membership (“ADM”)

The measures listed above will be rated by ‘Meets Standard,’ ‘Approaches Standard’ and ‘Below Standard.’

Summative Performance

A charter school’s performance will be rated by ‘Good Standing,’ ‘Adequate Standing’ and ‘Intervention.’

Charter schools that receive an ‘Intervention’ Summative Performance Rating will have the opportunity to demonstrate improved financial performance.

If the ‘Intervention’ school does not demonstrate improved financial performance within the next school year, the board will act.

Staffing

The framework stated that in order to support the implementation of the Financial Performance Framework and the interventions, the State Board requests four additional Full-Time Equivalents (FTE) in the fiscal year 2020 budget.