Family & Community Alternative Learning
Massachusetts Charter Schools

Important Notice Regarding Advance Certification of Quarterly Tuition Payments to Commonwealth Charter Schools

Commonwealth charter schools typically receive their quarterly tuition payments at the end of the fiscal quarter for which educational services were rendered-on September 30, December 31, March 31, and June 30. There may be occasions, however, when a school needs access to its tuition funds prior to the receipt of an expected quarterly payment. In these instances, the charter school may decide to apply for a loan or to establish a line of credit with a financial institution in order to have access to funds more readily. In the past, the Department of Elementary and Secondary Education was able to facilitate this access to credit by issuing an advance certification of quarterly payments. As of the end of FY2005-June 30, 2005-the practice of issuing advance certifications of quarterly charter school tuition payments will be discontinued, as the original agreement guaranteeing these certifications is no longer in effect.

This memo clarifies the process by which charter schools earn and are paid tuition and what the Department is currently able to provide to facilitate cash flow financing. FY2006 is used as an illustrative year in the description below.

For FY2006, Commonwealth charter schools will receive tuition payments from the Commonwealth at the end of each fiscal quarter on September 30, 2005; December 31, 2005; March 31, 2006; and June 30, 2006¹. The first quarterly tuition payment disbursed on September 30 is based on projected tuition rates² and projected enrollment data from the pre-enrollment report³. The second and third quarterly payments (December 31 and March 31) are based on preliminary tuition rates⁴ and actual current-year enrollment as reported by schools via the October 1 Student Information Management System (SIMS)⁵ data collection. The final quarterly tuition payment (June 30) is calculated based on updated enrollment information submitted by charter schools in the spring via the Charter School Claim Form⁶ and final tuition rates⁷.

Charter schools earn tuition based on the full-time-equivalent (FTE) number of pupils that they serve in a given school year. They are paid after services are rendered, and are entitled to payment even if the school is no longer operational at the time of payment. The Commonwealth guarantees that each charter school will be paid the tuition it has earned as of a given date, although the actual final payment amount may not be determined until tuition rates and enrollment figures are finalized as described above. For example, if a charter school was to close in the middle of the third quarter on February 4, 2006, it would still be entitled to the tuition it had earned for educating students through February 4, 2006, despite the fact that it is no longer operational.

In order to facilitate cash-flow financing, the Department will continue to post good-faith estimates of upcoming tuition payments on the Department's website. Upon request, we will provide the good-faith estimate in writing to schools and lending institutions.

We will also continue to honor "irrevocable instructions" in a loan agreement which require the Commonwealth to deposit the charter school's quarterly tuition payments into a blocked account that is controlled by the lending institution. Upon receipt of an executed copy of irrevocable instructions, the Commissioner of Education and the Secretary of Administration and Finance (or their duly named designees) will sign an "Acknowledgement of Irrevocable Instructions" (which should also be provided to the Commonwealth by the charter school or lending institution) if requested.

If you have any questions about the discontinuation of advance certifications or how tuition is earned and paid to charter schools by the Commonwealth, please feel free to contact Cliff Chuang in the Charter School Office at 781-338-3228 or cchuang@doe.mass.edu.

¹ The only exception to this payment schedule is that schools opening for the first time will receive an early disbursement of the first quarterly tuition payment, on or around August 15, 2005

² Projected Tuition Rate: Calculated by the School Finance Office during the spring before the upcoming school year.

³ Pre-enrollment Report: A report issued by April 1 of each year that contains data submitted by each charter school projecting the aggregate number of students, by town of residence, that the school will enroll in the subsequent school year.

⁴ Preliminary Tuition Rates: Calculated by the School Finance Office using enrollment and budget data from school districts' End of Year Reports, subject to corrections, and SIMS enrollment data.

⁵ Student Information Management System (SIMS): A student-level data collection system that has two important components: a unique student identifier for all students receiving a publicly funded education in Massachusetts, and transmissions of data from districts to the Department for all students.

⁶ Charter School Claim Form: A student-level data collection form used to collect student information that is not collected via SIMS in order to calculate final tuition rates.

⁷ Final Tuition Rates: Calculated by the School Finance Office using final enrollment and budget data from school districts' End of Year Reports and SIMS enrollment data.