Archived Information

School Finance: Charter Schools

Memorandum

This year, charter schools will be required to submit to the Department of Education pre-enrollment data for the upcoming school year by 5:00 PM on March 18, 2005. The Charter School Pre-Enrollment Report is used by the Department of Education to determine each charter school's first quarter tuition payment for fiscal year 2006. It is also used to notify sending school districts on April 1^st, as required by law, of the number of students enrolled in charter schools for the upcoming school year and represents the maximum number of students on which your tuition amount will be calculated for the fiscal year. You will be receiving more information in a few weeks regarding the specific instructions on how to file the Charter School Pre-Enrollment Report for the 2005-2006 school year via the security portal at the DOE website.

The purpose of this update is:

1. to inform you of several significant changes to the types of data that we will be collecting in this year's pre-enrollment report, as it may impact the type of information that you ask for from prospective students on your application or admissions forms or in the enrollment process. These changes are being made to ensure that each charter school-particularly new and "significantly expanding " * ones-receives the appropriate state funding and allocations for federal entitlement grants to serve their current student population,

   * According to the U.S. Department of Education, significantly expansion of enrollment is defined as a "substantial increase in the number of students attending a charter school due to a significant event that is unlikely to occur on a regular basis, such as the addition of one or more grades or educational programs in major curriculum areas "(Nonregulatory Guidance, 34 CFR Part 76, Subpart, http://www.uscharterschools.org/pdf/fr/sea_guidance_main.pdf , page 6). Minor increases in enrollment caused by normal turnover are not considered "significant expansion."

2. to inform you about the process by which the Department may verify the reported pre-enrollment numbers for accuracy, and

3. to provide information about possible enrollment restricts for 2005-2006 based on Net School Spending (NSS) caps.

1. New Pre-enrollment Data

   Federal Entitlement Funding for "New" and "Significantly Expanding" Charter Schools

   Federal entitlement grant formulas usually rely on prior year data. For new or significantly expanding charter schools, this data is often very inaccurate and does not generate a revenue stream that serves the school's current year population. The Charter School Expansion Act of 1998, Public Law No. 105-278, addressed this issue by amending section 10306 of the Elementary and Secondary Education Act of 1965, 20 U.S.C. 8061-8067, to require that the Secretary and State educational agencies (SEAs) take measures to ensure that charter schools receive the Federal-to-State formula funds (e.g., Title I, Title II, and IDEA funds, among others) for which they are eligible within five months of opening or expanding their enrollment. This is required "notwithstanding the fact that the identity and characteristics of the students enrolling at that charter school are not fully determined until that charter school actually opens" (20U.S.C. 8065a(a)).

   (http://www.uscharterschools.org/pdf/fr/sea_guidance_main.pdf ).

   In order for the Department to ensure that there are funds available to calculate accurate allocations for entitlement grants, charter schools needs to identify themselves as either new or significantly expanding. Three specific additional pieces of data need to be collected of these schools:

   • The aggregate projected number of "Limited English Proficient" students (SIMS Data element DOE025), by town of residence, who will attend your charter school in 2005-2006.

   • The aggregate projected number of Special Education students (SIMS Data element DOE034), by town of residence, who will attend your charter school in 2005-2006.

   • The aggregate projected number of students with "Low Income Status" (SIMS Data Element DOE 019), by town of residence, who will attend your charter school in 2005-2006.

   New or significantly expanding charter schools can make these projections based on data from their sending districts, or they may also choose to collect this information via enrollment forms. Please note that final allocations for these schools may be based on actual enrollment data collected in October via the SIMS system.

   State Funding for Previously Private/Parochial/Home-Schooled Students and Siblings

   MGL Chapter 71, §89 (ii) provides for the payment of tuition by the Commonwealth (as opposed to the local sending district) for the first year of cost of a student enrolled in Commonwealth charter school if the child previously attended a private or parochial school or was home-schooled. Also, MGL Chapter 71, §89 (i) states that "the Commonwealth shall incur charter school tuition payments for siblings attending commonwealth charter schools to the extent that their attendance would otherwise cause said school district's charter school tuition payments to exceed 9 per cent of said school district's net school spending." The line item in the state budget that funds both of these provisions was almost fully funded in FY05, but it is still uncertain whether it will be funded in FY06. Nonetheless, in order to project the state's possible share of the cost of educating these students, two additional piece of data need to be collected:

   • The aggregate projected number of students who previously attended a private or parochial school or were home-schooled, by town of residence and grade, who will attend your charter school in 2005-2006

   • The aggregate projected number of siblings who will attend your charter school, by town of residence and grade, in 2005-2006

2. Accuracy of Pre-enrollment Projections

   The pre-enrollment projections are the basis for the first quarter tuition payment to Commonwealth charter schools and preliminary entitlement grant calculations for new and significantly expanding schools as described above. Many charter school leaders and boards may also use these numbers to set their own school budgets for the upcoming school year. In addition, municipalities use the pre-enrollment report in order to set their local school budgets. Even though adjustments are made in subsequent quarters when actual enrollment numbers-which inevitably and understandably differ from pre-enrollment projections-are reported in the fall, it is important these pre-enrollment projections are as accurate as possible.

   Consequently, the Department anticipates auditing a small sample of the pre-enrollment data reported by charter schools. Please ensure that your charter school's enrollment process is clearly documented. Specifically, be sure that you carefully track the seats available at the time of the lottery (if applicable), applications received, admissions offers made, acceptance responses received, enrollment forms received, etc. In particular, schools that report waitlists should be able to clearly document their enrollment process.

3. 2005-2006 Possible Enrollment Restrictions

   Charter school regulations state "the Department of Education shall notify each Commonwealth charter school no later than February 15 of any limitation on the number of students from a district that may be enrolled in charter schools for the upcoming year," (603 CMR 1.06).

   The charter school statute stipulates that no school district's total charter school payments shall exceed 9% of the district's net school spending. Using projected FY06 enrollment numbers for charter schools, projected FY06 tuition rates, and required FY06 net school spending ("NSS") figures, the School Finance Unit has calculated preliminary projections of each sending district's FY06 enrollment against the 9% NSS cap, which is contained in the attached "Preliminary Projection of FY06 Sending District NSS Enrollment Caps" spreadsheet .

   The attached analysis estimates the number of "seats" open for charter school enrollment in FY06 in each school district. It is critical to understand that the FTE number, found in the last column to the right, does not represent a hard and fast number of remaining "seats" for the 2005-06 school year. Rather, this number is a ballpark figure that can inform your school's decisions about next school year's enrollment.

   The attached analysis only takes into consideration known anticipated enrollment growth as a result of grades being added at operating charter schools in the fall of 2004, including several schools opening this fall. The analysis does not reflect possible changes in enrollment at charter schools by district, allowable future growth at charter schools up to their own maximum enrollment as chartered by the state, nor does it reflect the possible chartering during the February 2005 Board of Education meeting of new schools that will open in Fall 2005

   This is important information because your school will not receive tuition for any student who exceeds the 9% cap for a district. An example of how the Department pro-rates the tuition assessment for districts over the cap follows:

   The FY06 net school spending figure for Sending School District X is $1,000,000. According to the charter school legislation, 9% of District X's net school spending ($90,000) can be transferred to Commonwealth charter schools. Based on expenditures and enrollment in the district, the Department has calculated that the charter school tuition rate for District X is $9,000 per student. Charter School A enrolls 11 students from District X. District X's unadjusted charter school tuition assessment is $99,000 (11 students * $9,000). However, the unadjusted tuition assessment exceeds the net school spending cap by $9,000 ($99,000-$90,000.) Therefore, the Department must pro-rate the charter school tuition rate received by charter schools enrolling students from District X to keep the district at its 9% NSS cap. Thus, Charter School A will receive $8,181 per student from District X for a total payment of $89,999 (11 students * $8,181) which decreases District X's total assessment to its NSS cap.

   As there are a number of charter schools that enroll students from the same communities, it is possible that the enrollment plans of one charter school may affect those of another. Please contact the Charter School Office if you are concerned about this possibility and we will facilitate the coordination of enrollment processes if necessary.

Additional Enrollment Information

As you prepare for the enrollment process for the 2005-2006 school year, you may want to refer to an Enrollment Policies memo from January 2004, posted at http://www.doe.mass.edu/charter/news/2004/0128.html that contains further details. Also, please note that by February 15, 2005, I will also send information detailing possible enrollment restrictions for FY06 based on statutory caps on charter school enrollment. Please feel free to contact me at 781-338-3228 or cchuang@doe.mass.edu with any questions or concerns regarding the information in this memorandum.