Archived Information

School Finance: Charter Schools

FY2005 Charter School Audit Requirements Reminder

As your schools work to complete the independent audit of their FY05 financial statements, please be sure that your school and your auditors adhere carefully to the requirements set forth in the July 2003 Massachusetts Charter School Recommended Audit Guide . The revised June 2005 Massachusetts Charter School Recommended Audit Guide will take affect for FY06. Both of these documents can be found at http://finance1.doe.mass.edu/charter/. Some important reminders for FY05:

Who must file

In accordance with M.G.L. c. 71, § 89, each charter school shall have an independent audit conducted of its accounts, consistent with auditing standards generally accepted in the United States of America, Government Auditing Standards and the July 2003 MA DOE Charter School Recommended Audit Guide. This requirement applies to all charter schools that received their charter prior to June 30, 2005.

When to file

This year completed FY05 audit reports must be filed (received) on or before Friday, December 30, 2005 (since January 1, 2006 falls on a Sunday). There are no extensions allowed under Massachusetts General Laws.

What to file

A completed audit report must adhere to the format described in Charter School Recommended Audit Guide. Incomplete or incorrect annual audit reports will be rejected and require resubmission. Please note the following:

• Non-reportable conditions and/or non-material instances of non-compliance noted during the audit of the charter school's internal control systems that are reported separately in a management letter must be noted in the Independent Auditor Report on Compliance and Internal Control in Accordance with Government Auditing Standards and filed with the annual audit report, under a separate cover.

• Charter schools that expended $500,000 or more of federal awards during FY04 are subject to the audit provision of the Federal Single Audit OMB Circular A-133. Schools that are required to perform an audit in conformity with this Circular must include the single audit requirements in their completed audit report.

• During a charter school's planning period-the period of time between the granting of the charter and the opening of school to enrolled students-a charter school may be able have an independent review performed, which is less in scope than an audit. If a charter school wishes to have a review performed or requests a period of review of greater than twelve months, the school must receive approval from the DOE. A letter from the school's Board of Trustees or someone designated to act on their behalf should be sent to my attention indicating that the school's Board of Trustees has voted to request a waiver from the full audit requirement.

Where to file

• Two (2) bound copies of the audit report (including management letter and single audit requirements if applicable) must be sent to the:

  Charter School Office
  Massachusetts Department of Elementary and Secondary Education
  Department of Elementary and Secondary Education
  350 Main Street
  Malden, MA 02148-5023

• One (1) bound copy of the audit report (including management letter and single audit requirements if applicable) must be sent to:

  Office of the State Auditor
  One Ashburton Place, Room 1819
  Boston, MA 02108
  Attention: Manager of Policy

• Charter schools that receive an audit performed in accordance with OMB Circular A-133 must also file the audit report with the Federal Audit Clearinghouse. Please refer to OMB Circular A-133 for the federal filing requirements (see http://harvester.census.gov/sac/)

What if an audit is not filed?

Charter schools must file an annual audit report by the stated deadline to comply with Commonwealth of Massachusetts statutory and regulatory requirements. The DOE reserves the right to sanction any charter school that does not comply with these requirements, including but not limited to withholding state funds and probation or revocation of a charter.

FY05 Audit Checklist

Please find attached a checklist that will assist your school and your auditors with ensuring that your audit meets the requirements outlined in the July 2003 Massachusetts Charter School Recommended Audit Guide for FY05.

Thank you for your attention to this important matter. Please feel free to contact me at 781-338-3228 or cchuang@doe.mass.edu if you have any questions.