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SB 1394 - Charter schools; training; information; procurement

Tracking Level: Monitor
Sponsor: Kate Brophy McGee
Last Action: 5/15/2019 - Assigned to House RULES Committee
Senate Committee: Rules
House Committee: Rules
Assigned To:
School ChoiceNext Bill

Staff Analysis of the Legislation

This bill modifies charter school procurement and accountability.

Governing Body
Requires a governing body to have at least three members.

Prohibits more than two immediate family members from serving simultaneously on the same
governing body and prohibits immediate family members from being a majority of members
on a governing body.

Requires the State Board for Charter Schools (SBCS)  to provide governing body members and key administrative personnel with a training course that provides content related to:
a) open meeting law
b) public records requirements
c) enrollment laws and regulations
d) applicable procurement rules
e) student discipline

Requires new governing body members and key administrative personnel to complete the
course within the first year of appointment to the governing body or employment at the charter

Procurement Requirements
Requires, by July 1, 2020, each charter school to adopt and comply with procurement policies
that include:
a) a requirement that a purchase of goods or services or expenditure of school monies be in
the charter school's best interests, considering the totality of the circumstances surrounding
the procurement, which may include price, quality, availability, timelines, reputation and
prior dealings
b) a description of officers or personnel authorized to procure goods or services or make
authorized expenditures on behalf of the charter school
c) accounting policies and procedures that comply with generally-accepted accounting
d) a prohibition, with an outlined exemption, on purchasing goods or services from:
i. a charter holder or governing body member
ii. an immediate family member of a charter holder or governing body member
iii. another entity in which a charter holder member, governing body member or
immediate family member of a charter holder member or governing body member
may have a substantial interest in the procurement
e) a requirement that the charter school maintain records demonstrating a purchase made on
behalf of the charter school by the charter school or charter holder is in the best interest of
the school, considering the totality of the circumstances, if the charter school reasonably
anticipates the purchase will exceed $50,000
f) a requirement that a charter school's annual audit include a compliance review of the
school's procurement policies and activities.

Exempts, from the prohibition on purchasing from specified persons, a purchase authorized by
a majority of the disinterested members of the governing body if:
a) the substantial interest is fully disclosed
b) the disclosure and description of the justification for why the purchase from the specified
persons is in the school's best interest are included in the minutes of the meeting at which
the governing body approves the purchase.

Exempts, from the $50,000 cap on purchases made without demonstrated best interest, a
management contract between a charter management organization (CMO) and a charter school
or charter holder that is disclosed on the sponsor's public website.

Prohibits a project or purchase from being divided into separate projects or
purchases to intentionally avoid the $50,000 cap on purchases made without demonstrated best

Allows a charter school sponsor to request Attorney General (AG) enforcement of procurement statute if the
sponsor determines a violation is or likely may be continuing after providing the charter school
reasonable opportunity to respond to allegations and discontinue and correct improper actions.

Allows the AG to:
a) seek relief for violations of charter school procurement statute through appropriate criminal
or civil action in superior court
b) use the AG's authority to conduct financial, program or compliance audits to enforce
procurement statute.

Prohibits a charter school employee with control over personnel actions from taking reprisal
against an employee for disclosure of information relating to a violation of charter school
procurement statute.

Allows a charter school to demonstrate a purchase is in the charter school's best interest through
research of like products or services or by receiving multiple quotes, and requires a charter
school to maintain records for review during the charter school's annual audit.

Presumes purchases made in accordance with a school's procurement and conflict of interest
policies to be in the charter school's best interest.

Specifies that federal procurement requirements apply to the receipt of certain federal monies.

Removes the requirements that:
a) the SBE adopt rules for the procurement of goods and information services using
electronic, online bidding by charter schools
b) a charter ensure the charter school is subject to outlined school district procurement rules,
and removes permission for a charter to exempt a school from those rules
c) that nonexempt charter schools, in connection with any audit conducted by a certified
accountant, contract for systematic review of purchasing practices using methodology
consistent with sampling guidelines established by the OAG, to determine consistency with
procurement law.

Removes OAG authority over nonexempt charter schools to conduct discretionary reviews for
schools not required to contract for independent audits and review and approve audit contracts
and reports.

Removes permission for a charter school to evaluate U.S. General Services Administration
contracts for materials and services and for the governing body to authorize current contract
purchases of materials or services if the governing body determines certain conditions are met.

Reporting Requirements
Requires a sponsor to annually compile information pertaining to the governance and
operations of each charter school it sponsors.

Requires a sponsor to post to a public website, for each charter school it sponsors:
a) the names of voting members of the governing body
b) the number of independent voting members of the governing body
c) the names of voting members of the charter holder
d) the number of independent voting members of the charter holder
e) the total annual state revenues and total annual revenues from other sources, including
grants, donations and investment income;
f) the total annual expenses
g) the total annual revenues minus total annual expenses
h) the total assets and liabilities
i) authorization of any related party transaction, the individuals or entities party to the
transaction, the services or goods provided and the total transaction cost
j) whether the charter school sold, exchanged, disposed of or transferred more than 25 percent
of the charter school's assets in the previous fiscal year
k) a confirmation of an adopted conflict of interest policy and a copy of the adopted conflict
of interest policy
l) if the charter school contracts with a CMO, a written statement from the charter school
identifying the CMO and describing the services provided and the amount the charter
school spends for the CMO's services
m) spending data the sponsor compiles from annual financial reports for each charter holder
for the categories of:
i. teacher salaries
ii. classroom instruction
iii. student support services
iv. other support services and operations
v. special education
vi. administration
vii. federal projects
viii. facilities expenses

Requires each charter school website to include a link to the information compiled on the
sponsor's website.

Allows a nonprofit charter holder that must annually file a Form 990 with the Internal Revenue
Service to submit the Form 990 to the school's sponsor to meet data reporting requirements. 

Prohibits a charter school from limiting admission based on ability to financially contribute to
the school or on agreement to volunteer for or at the school.

Bill Summary from the State Site - Click for the State Summary Page / Click for Current Full Text / PDF

Charter schools; training; information; procurement


Charter schools; training; information; procurement

Introduction Date:

Monday, February 4, 2019