The Charter School Act Impacts Audit Requirements

By Freed Maxick on August, 7 2013
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Freed Maxick

Freed Maxick provides accounting, auditing, tax and consulting services and serves public and private companies, not-for-profits and municipalities to enhance profitability, save taxes, improve accountability and preserve wealth.

By: Chris Piedici

New York State schools recently received $697 million under the “Race to the Top” funding through the Federal Government; this will include monies to NYS charter schools. Along with this is a $113 million grant to NYS under the Federal Charter School Program (CSP). It is the responsibility of the New York State Education Department (NYSED) to monitor the use of public funds, including CSP grants; necessitating a very high level of audit quality.

As a pass through entity, NYSED is responsible for monitoring the proper use of funds and compliance with CSP grant requirements by each school awarded funds. NYSED has decided that the most efficient and effective way of monitoring grant compliance is to allow each charter school an independent auditor, who is already reviewing records of the school, to perform additional procedures as part of the audit and then issue a separate report.

Charter School Audit Requirements

In accordance with the charter school agreement, the school shall retain an independent Certified Public Accountant (CPA), licensed in NYS, to perform the audit of the charter schools annual financial statements. The report shall include:

·         Agreed upon Procedures Report on Initial Statement of Controls

·        Opinion on Audited Financial Statements

·        Report on internal controls over Financial Reporting and on Compliance and other matters based on Audit of Financial Statements performed in accordance with Government Auditing Standards

·        Agreed upon Procedures Report on Charter School Program (CSP) grant

·        Report on compliance for each major federal program, internal control over compliance; and on the schedule of expenditures of Federal Awards required by OMB Circular A-133.

Deadlines for the Agreed upon Procedures report is due no later than 45 days after audit engagement has begun. As well, all audited financial statements must be submitted to NYSED by November 1st of each fiscal year after the conclusion of the charter school’s first year of providing instruction to the students.

A full report and explanation on the charter school guide can be found on the New York State Education Department website.

Contact Us

For more information on auditing procedures or to speak to a CPA regarding your Charter School audit needs, please contact our Rochester office at 585-271-2300 or click here to contact us.

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