Family & Community Alternative Learning
Charter Schools

State Auditor's Report
On Establishing Standardized Accounting and Reporting Methods
for Massachusetts Charter Schools

Executive Summary

Introduction

During fiscal year 1997, the state Legislature amended the Education Reform Act (Chapter 71 of the Massachusetts General Laws) and authorized the Office of the State Auditor (OSA) to prescribe the accounting methods and the form in which charter schools should file their annual audits with the state's Department of Elementary and Secondary Education (ESE) and the OSA. As a result of this amendment, the OSA developed a standard Chart of Accounts and other pro forma financial statements that can be used by charter schools when reporting to ESE.

Audit Results

Charter Schools Need Standardized Accounting and Financial Reporting Requirements: During fiscal year 1998, the OSA began an audit of ESE's administration of charter schools. During our audit field work, ESE's Associate Commissioner for Charter Schools informed the audit staff that only six of the 25 charter schools operating within the Commonwealth during fiscal year 1997 had filed an end-of-the-year report (ESE-Schedule 19). The Associate Commissioner also stated that, in his opinion, this prescribed reporting method for non-charter public schools is not readily adaptable to charter school operations. Our review of reports submitted to ESE by charter schools during fiscal year 1997, revealed that, because the format of the financial information being provided to ESE by charter schools is inconsistent, its usefulness is limited and therefore a uniform chart of accounts should be established and implemented along with reporting standards throughout the system.

Table of Contents

Introduction

Audit Results

Appendices

1. Charter School - Recommended Chart of Accounts
2. Statement of Functional Expenses
3. Charter School Statements of Support and Revenue, Expenditures, Capital Additions, and Changes in Fund Balances
4. Statement of Revenue and Expenses