W. Va. Code R. § 126-79-12

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 126-79-12 - Finances

12.1. Purpose.

12.1.a. W. Va. Code § 18-5G-5 outlines the funding of charter schools as well as tools to mitigate the fiscal impact on county school districts. Clearly articulating the financial rules and processes for charter schools will help applicants complete thorough applications and authorizers determine the financial viability of applications and plan for the fiscal effects on county school districts where charter schools operate.

12.2. Portion of Net Enrollment (W. Va. Code § 18-5G-5(a)).

12.2.a. In accordance with W. Va. Code § 18-5G-5(a), 90 percent of the per pupil total basic foundation allowance follows the student to the charter school. The per pupil total basic foundation allowance amount is calculated annually by the WVDE by dividing each county's total basic foundation allowance (Step 8 of the Public School Support Plan (PSSP)) by the county's adjusted net enrollment for state aid funding purposes. This amount differs by county board of education and changes annually.

12.2.b. State aid funding for county boards of education is based on the prior year enrollment. For example, funding for the 2020-2021 school year is based on student enrollment in the 2019-2020 school year.

12.2.c The state aid funding amount that WVDE calculates a county board of education owes to a charter school, inclusive of the local share amount per charter school pupil, shall be withheld from the county board of education's net state aid funding and paid by the WVDE directly to the charter school on behalf of the county board of education. Payments from the WVDE to the charter school shall be made in accordance with the expenditure schedule approved by the State Budget Office. If the total amount a county board of education owes to a charter school exceeds their total net state aid funding available and the WVDE shall be unable to withhold the full amount, any remaining balance due to the charter school shall be paid directly by the county board of education to the charter school. Payments from a county board of education to the charter school for state aid amounts owed shall be made in a manner that results in at least 25 percent of the annual amount due being paid by the end of each of the four quarters during the school year. Nothing precludes the county board of education from paying the amounts due to a charter school at an earlier date than the required quarterly payment.

12.2.d. In the initial year of existence for a charter school, the charter school will receive 90 percent of the per pupil total basic foundation allowance for each pupil based on a projected enrollment count for the initial year as determined by the primary round of charter school enrollment (see section 9).

12.2.d.1. The WVDE will distribute the initial funding withheld from the county board of education to the charter school based on projected enrollment counts starting on July 1. The payment schedule and amounts shall later be adjusted based on the charter school's certified October 1 (second month) student enrollment full-time equivalency count to provide the appropriate total funding for the school year.

12.2.d.2. The WVDE will determine the actual county of enrollment for each enrolled pupil for the prior school year and will calculate the amount each county board of education would owe to the charter school based on the student's full time enrollment (FTE) status at the charter school. If the student was not enrolled in a county school system the prior year, no county board of education received state aid funding for that pupil for the initial year of existence for the charter school. Although no state aid funds were received for the student, the county of residence for the student did receive property tax funding for the pupil and therefore would owe 90 percent of the local share amount per pupil to the charter school. In such a situation, the local share amount per pupil shall be recalculated to include the student that was not enrolled in the enrollment count utilized since the standard amount calculated by the WVDE annually is based on actual student enrollment and would result in a higher amount per pupil than what the county would have truly received per pupil after consideration of the additional student(s).

12.2.d.3. In the initial year a charter school is authorized to open, the county board of education will not receive a solid estimate of the projected enrollment until after April 15, when the initial enrollment process concludes. However, the county board of education will have information available from the charter school application including, but not limited to, enrollment capacity, grade levels, and primary recruitment area prior to receipt of the projected enrollment count in April. The county board of education shall consider that information for initial personnel and budgetary planning for the initial school year. Planning ahead will be critical given the condensed timeline of the initial year.

12.2.e. Once a student is enrolled in a charter school, that student will be included in the charter school's certified October 1 (second month) student enrollment count moving forward. However, to facilitate accurate state aid funding calculations for charter schools, all charter school students shall also be tracked by their home attendance area school based on the student's physical address. If a student moves to West Virginia from another state and wishes to attend a charter school, the student shall first enroll with the appropriate county board of education based on their home address, and that county board of education shall then transfer the student to the charter school. If charter school students have a change in their physical address, the charter school shall contact the impacted county boards of education to ensure that the enrollment records are properly updated to reflect a new home attendance area school so that state aid funding appropriately follows the charter school student in accordance with W. Va. Code § 18-5G-5(a).

12.2.e.1. Accordingly, after the initial year of operations of the charter school, the payment of the 90 percent of the per pupil total basic foundation allowance will be based on the charter school's student enrollment count included in the PSSP calculations for the particular school year. For example, if the charter school reports a student enrollment of 100 FTE in the initial year of operations, the state aid funding calculations for the second year of operations of the charter school are based on that enrollment count and the charter school will only receive funds from the state based on that 100 FTE count. The per pupil allocation paid to the charter school in the second year of operations will be based on 100 students, regardless of the charter school's actual student enrollment in the second year since that is all the funding that the county boards of education will have received on behalf of the charter school. County boards of education are not expected to provide funding to a charter school for students that were not previously enrolled with the county board of education.

12.2.e.2. After the initial year of operations of a charter school, initial enrollment activities for charter schools will conclude by February 15. This schedule will provide more time for county boards of education to make financial and personnel plans based on projected charter school enrollment. Even prior to the receipt of the projected enrollment, county boards of education will have key information available, including but not limited to, primary recruitment area, charter school capacity by grade, and enrollment preferences, to start planning as early as possible for the impact of the charter school enrollment on their budgets.

12.2.f Under the provisions of W. Va. Code § 18-9A-15, county boards of education are eligible for increased enrollment funding if they experience an increase in net student enrollment over the previous year. Eligibility for the increased enrollment funding shall also be extended to charter schools. The calculations under W. Va. Code § 18-9A-15 will be modified in a manner such that each county board of education's eligibility for the increased enrollment funding will be determined exclusive of any charter school student enrollment for their county. Each charter school shall be evaluated for eligibility based on the charter school's net student enrollment for the current year as compared to the prior year. Ninety percent of any increased enrollment funding allocation calculated for a charter school shall be paid by the WVDE directly to the charter school by no later than December 31^st annually.

12.3. Transportation Allowances (W. Va. Code § 18-5G-5(a)(1))

12.3.a. The calculation of the allowance for student transportation under W. Va. Code § 18-9A-7 is based largely on the actual student transportation expenditures incurred by the county board of education. By requiring county boards of education to provide 90 percent of the per pupil total basic foundation allowance to the charter school, which includes the allowance for student transportation, county boards of education are required to provide funds to the charter school without a corresponding reduction in their actual transportation expenses. W. Va. Code § 18-5G-5(a)(l) provides that the calculations under W. Va. Code § 18-9A-7 may be modified to account for these situations to provide additional funding to the county boards of education.

12.3.b. The calculations under the PSSP in W. Va. Code § 18-9A-7 will be modified by adding to the county board's total allowance for student transportation the equivalent of the county board's prior year transportation allowance per pupil multiplied by the charter school FTE student enrollment being utilized in the PSSP calculations for the current fiscal year, if either of the following conditions is met:

12.3.b.1. The charter school does not provide transportation to students but the county board of education must provide 90 percent of the transportation allowance to the charter school; or

12.3.b.2. The county boards of education provides the transportation on behalf of the charter school but must still provide 90 percent of the transportation allowance to the charter school.

12.3.c. In situations where the charter school provides transportation to students through means other than the county board, the calculations in W. Va. Code § 18-9A-7 will be modified to add the charter school's actual transportation expenditures to those of the county board in which the charter school is physically located in the allowance for student transportation calculation. If a charter school's primary recruitment area serves multiple county boards of education, the actual transportation costs of the charter school shall be split proportionately among the county boards of education in the recruitment area based on the student enrollment from each county board in the recruitment area to allow the funding to follow the students to the extent possible.

12.4. Current Expenses Allowances (W. Va. Code § 18-5G-5(a)(l)).

12.4.a. The calculation of the allowance for current expense under W. Va. Code § 18-9A-9(1) is based largely on the actual current expenses (operations and maintenance expenditures) incurred by the county board of education. By requiring the county board of education to provide 90 percent of the per pupil total basic foundation allowance to the charter school, which includes the allowance for current expense, county boards of education are required to provide funds to the charter school without a corresponding reduction in their actual current expenses. W. Va. Code § 18-5G-5(a)(l) provides that the calculations under W. Va. Code § 18-9A-9(1) may be modified to account for these situations to provide additional funding to the county boards of education.

12.4.b. The calculation of the allowance for current expense under the PSSP contained in W. Va. Code § 18-9A-9(1) will be modified to add the charter school's actual operations and maintenance expenditures to those of the county board of education in which the charter school is physically located and to add the square footage of the charter school to the square footage of the county board of education in which the charter school is physically located in the allowance for current expense calculation. Under the PSSP, the allowance for current expense applies a statewide average cost per square foot and statewide average square footage per pupil amount to the student enrollment count of each county board of education. The student enrollment counts for each county board of education include students enrolled in charter schools, so the additional current expense funding will follow the pupils to their home attendance area county board of education.

12.5. Public Employees Insurance Agency (PEIA) Funding.

12.5.a. W. Va. Code § 18-5G-5(e) permits the WVBE to address unforeseen circumstances in the implementation of charter schools. While the provisions of W. Va. Code § 5-16-2 were modified to allow charter schools to participate in the PEIA and the statutory language in W. Va. Code § 18-5G-3(b)(7) allows the charter school to manage employee participation in insurance plans, the Legislature has not addressed funding for PEIA insurance for charter school employees. The funding for county board of education employees to participate in PEIA is outside of the total basic foundation allowance under the PSSP and is provided directly to PEIA by the WVDE pursuant to W. Va. Code § 18-9A-24on behalf of the county boards of education, so the state aid funds calculated in subsection 12.2 do not include funding for PEIA.

12.5.b. If a charter school elects to provide health insurance coverage to employees using PEIA, the WVDE will calculate the amount of PEIA funding which is attributable to the students enrolled in the charter school and provide an allocation on behalf of the charter school directly to PEIA in the same manner in which the allocations are provided to PEIA on behalf of the county boards of education.

12.5.c. In the initial year of operation of a charter school, the WVDE will calculate the amount of PEIA funding which is attributable to the students enrolled in the charter school in the following manner:

12.5.c.1. Estimate the number of charter school students who were enrolled in each county board of education in the previous year.

12.5.c.2. Calculate the total number of professional educator positions, service personnel positions, and professional student support personnel positions that were attributed to the charter school students based on each county's population density category.

12.5.c.3. Multiply the number of total positions attributable to the charter school students by the average employer PEIA premium for each county board of education.

12.5.c.4. Multiply the subtotal from subsection 12.5.c.3 by 90 percent.

12.5.c.5. Reduce each county board of education's calculated PEIA allowance by the amounts derived in subsection 12.5.c.4.

12.5.c.6. The charter school's PEIA allowance is the total of the amount derived in subsection 12.5.c.4 for all county boards of education that had charter school students enrolled in the previous year (since state aid funding is based on the previous year).

12.5.c.7. The PEIA allowance for the charter schools is subject to the same annual reallocation process based on updated employer premium rates as the county boards of education. In addition, in the initial year of operation of the charter school, the annual reallocation process will also include an adjustment to the actual enrollment count for the initial year of charter school operations.

12.5.d. In subsequent years, the WVDE will calculate the amount of PEIA funding which is attributable to the students enrolled in the charter school in the following manner:

12.5.d.1. Determine the number of charter school students who were enrolled in each county board of education in the previous year.

12.5.d.2. Calculate the total number of professional educator positions, service personnel positions, and professional student personnel support positions that were attributed to the charter school students based on each county's population density category.

12.5.d.3. Multiply the number of total positions attributable to the charter school students by the average employer PEIA premium for each county board of education.

12.5.d.4. Multiply the subtotal from subsection 12.5.d.3 by 90 percent.

12.5.d.5. Reduce each county board of education's calculated PEIA allowance by the amount derived in subsection 12.5.d.4.

12.5.d.6. The charter school's PEIA allowance is the total amount derived in subsection 12.5.d.4 for all county boards of education that had charter school students enrolled in the previous year.

12.5.d.7. The PEIA allowance for the charter schools is subject to the same annual reallocation process based on updated employer premium rates as the county boards of education.

12.5.e. If a charter school does not elect to participate in PEIA, the unspent allocation for the charter school shall be treated by the WVDE the same as any unspent allocation for the county boards of education.

12.6. Retirement Funding.

12.6.a. W. Va. Code § 18-5G-5(e) permits the WVBE to address unforeseen circumstances in the implementation of charter schools. While the provisions of W. Va. Code § 18-7A-3 and § 18-7B-2 were modified to allow charter schools to participate in the Teachers' Retirement System (TRS) and the Teachers' Defined Contribution Retirement System (TDC) and the statutory language in W. Va. Code § 18-5G-3(b)(7) allows the charter school to manage employee participation in retirement, the Legislature has not addressed funding for retirement contributions for charter school employees. The funding for county board of education employees to participate in retirement is outside of the total basic foundation allowance under the PSSP and is provided directly to the West Virginia Consolidated Public Retirement Board (CPRB) by the WVDE pursuant to W. Va. Code § 18-9A-6a(b) on behalf of the county boards of education, so the state aid funds calculated in subsection 12.2 do not include funding for retirement.

12.6.b. If a charter school elects to participate in the TRS and TDC retirement plans provided by the CPRB, the WVDE will calculate the amount of retirement funding which is attributable to the students enrolled in the charter school and provide an allocation on behalf of the charter school directly to the CPRB in the same manner in which the allocations are provided to the CPRB on behalf of the county boards of education.

12.6.c. In the initial year of operation of a charter school, the WVDE will calculate the amount of retirement funding which is attributable to the students enrolled in the charter school in the following manner:

12.6.c.1. Determine the number of charter school students who were enrolled in each county board of education in the previous year.

12.6.c.2. Calculate the total number of professional educator positions, service personnel positions, and professional student support personnel positions that were attributed to the charter school students based on each county's population density category.

12.6.c.3. For each category of personnel, multiply the number of positions calculated in subsection 12.6.c.2 by the average state minimum salary of the county and county's average retirement contribution rate.

12.6.c.4. Add the total calculated in subsection 12.6.c.3 for each category of personnel to determine the total estimated retirement contribution attributable to charter school students for each county board of education.

12.6.c.5. Multiply the total from subsection 12.6.c.4 above by 90 percent.

12.6.c.6. Reduce each county board of education's calculated retirement allowance by the amount derived in subsection 12.6.c.5.

12.6.c.7. The charter school's retirement allowance is the total of the amounts derived in subsection 12.6.c.5 for all county boards of education that had charter school students enrolled in the previous year.

12.6.d. In subsequent years, the WVDE will calculate the amount of retirement funding which is attributable to the students enrolled in the charter school in the following manner:

12.6.d.1. Determine the number of charter school students that were enrolled in each county board of education in the previous year (since state aid funding is based on the previous year).

12.6.d.2. Calculate the total number of professional educator positions, service personnel positions, and professional student support personnel positions that were attributed to the charter school students based on each county's population density category.

12.6.d.3. For each category of personnel, multiply the number of positions calculated in subsection 12.6.d.2 by the average state minimum salary for each county board of education and each county's average retirement contribution rate.

12.6.d.4. Add the total calculated in subsection 12.6.d.3 for each category of personnel to determine the total estimated retirement contribution attributable to the charter school students for each county board of education.

12.6.d.5. Multiply the total from subsection 12.6.d.4 by 90 percent.

12.6.d.6. Reduce each county board of education's calculated retirement allowance by the amount derived in subsection 12.6.d.5.

12.6.d.7. The charter school's retirement allowance is the total amount of the amounts derived in subsection 12.6.d.5 for all county boards of education that had charter school students enrolled in the previous year.

12.6.e. If a charter school does not elect to participate in the TRS and TDC plans sponsored by the CPRB, any unspent retirement allowance calculated for the charter school shall be transferred to the CPRB to apply to the TRS unfunded retirement liability.

12.7. Federal Funds (W. Va. Code § 18-5G-5(a)(3)).

12.7.a. The WVDE will follow all federal regulations with regards to funding for charter schools. The WVDE issues grants and provides federal funds for various federal programs, and the treatment of charter schools under the federal regulations varies depending on the specific federal program. Federal regulations also change on a regular basis. Accordingly, the specific treatment of charter schools under each federal program will not be included in WVBE policy to allow the WVDE to comply promptly with any changes in federal regulations related to charter schools. As with all LEAs, the WVDE will work directly with authorized charter schools regarding the distribution of federal funds.

12.7.b. Pursuant to W. Va. Code § 18-5G-4(b)(4), the WVDE will make a good faith effort to obtain Charter School Program grant funds from the United States Department of Education.

12.8. Authorizer Costs (W. Va. Code § 18-5G-5(d)).

12.8.a. In accordance with W. Va. Code § 18-5G-6(i), each charter public school shall remit to its respective authorizer an oversight fee.

12.8.a.1. Pursuant to W. Va. Code § 18-5G-5(d), the oversight fee charged by the authorizer shall be equal to one percent of the total per pupil funding amount for all charter school students, as calculated in subsection 12.2.

12.8.a.2. The amount of the oversight fee shall be remitted by the charter school to the authorizer by no later than June 1 annually.

12.8.b. The WVDE will review the oversight fee structure annually to determine if the amount of the oversight fee is effective or if it needs adjusted by a sliding scale that considers the number of schools authorized, the number of students attending each school, etc. The annual review will continue input from authorizers and charter schools. Recommendations to change the oversight fee structure will be made to the WVBE.

12.9. Accounting and Financial Reports (W. Va. Code § 18-5G-3(c)( 10)).

12.9.a. Pursuant to W. Va. Code § 18-5G-3(c)(10), each charter school will meet the same accounting and financial requirements required of non-charter public schools, including but not limited to participation in the State Auditor's financial transparency website.

12.9.b. Pursuant to W. Va. Code § 18-5G-3(c)(10), each charter school shall annually engage an external auditor to perform an independent audit of the school's finances. The charter school shall submit the audit report to its authorizer and the State Superintendent of Schools no later than nine months following the end of the fiscal year for which the audit is performed.

12.9.c. Each charter school shall submit unaudited financial statements to its authorizer and the State Superintendent of Schools in accordance with the annual financial statement instructions and deadlines published annually by the WVDE.

W. Va. Code R. § 126-79-12