Massachusetts Charter Schools

Surplus Tuition Carryover Calculation

To:	Charter School Leaders, Business Managers and Board of Trustee Members
From:	Barry Barnett, Acting Assistant Director of Charter Schools
Date:	September 5, 2012

In accordance with M.G.L. c. 71, § 89i any cumulative tuition revenue surplus in excess of 20 percent of its operating budget and its capital costs must be returned by a Commonwealth charter school to the sending district no later than December 31st following the end of the charter school's fiscal year. The charter school must calculate the cumulative tuition revenue surplus using the prescribed format and include this schedule as a supplemental schedule to the basic financial statements. See the Charter School Audit Guide, revised July 2010, for more information: http://www.doe.mass.edu/charter/finance/auditing/ The Department of Elementary and Secondary Education (Department) conducted a review of recently submitted 20 percent Excess Carryover Calculations that reveal some common errors in completing the schedule. The Department has developed this memo in order to clarify the procedures for submission of this information.

For the surplus tuition calculation schedule, the top line "Cumulative surplus (deficit) beginning of year" is equal the Total Surplus number from the prior year (identified as (A) on the schedule template) or the Allowable Carryover (identified as (B) on template), whichever is less.
Lines 1 (Cumulative surplus) and line 2 (change in net assets) are added. Lines 3-9 should be subtracted from the sum of lines 1 and 2.
The depreciation number (line 11 on the schedule) is equal to the total depreciation of assets purchased after July 1, 2010 including all subsequent fiscal years. Depreciation of assets purchased prior to the start of fiscal year 2011 is excluded from the total recorded on line 11 of the schedule.
Line 15 (20% of budgeted expenditures from capital projects reserve fund) is applicable to 20 percent of the projected cost, as documented in the annual report, for projects, or portions of projects scheduled to be completed in the following year, fiscal year, not the total cost of the project, or 20 percent of the projected cost of the entire capital plan.

If you anticipate or experience problems with timely, accurate completion of your audit report or the surplus tuition schedule, please contact Francis Cash at 781-338-3226 or fcash@doe.mass.edu. Thank you for your cooperation and assistance in providing this very important financial data.

i M.G.L. c. 71, § 89 (hh):
(hh) If the unencumbered amount of cumulative surplus revenue from tuition held by a charter school at the end of a fiscal year, less (i) the amount of the fourth quarter tuition payment, (ii) the amount held in reserve for the purchase or renovation of an academic facility pursuant to a capital plan, and (iii) any reserve funds held as security for bank loans, exceeds 20 per cent of its operating budget and its budgeted capital costs for the succeeding fiscal year as is reported in a capital plan to be submitted in the school's most recent annual report, the amount in excess of said 20 per cent shall be returned by the charter school to the sending district or districts and the state in proportion to their share of tuition paid during the fiscal year. At the end of each fiscal year, the commissioner shall certify the amounts described above and the amount, if any, by which it exceeds 20 per cent of the school's operating budget and its budgeted capital costs for the succeeding fiscal year, and shall report such amount to the school committee of the sending district or districts and the applicable board of selectmen or city council by December 1 of each year. A charter school shall annually make any payment required by this subsection no later than December 31

Last Updated: September 7, 2012