C ATHERINE P AYNE D AVID Y. I GE C HAIRPERSON G OVERNOR S TATE OF H - - PDF document

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DAVID Y. IGE GOVERNOR CATHERINE PAYNE CHAIRPERSON

STATE OF HAWAII STATE PUBLIC CHARTER SCHOOL COMMISSION (ʻAHA KULA HOʻĀMANA)

1111 Bishop Street, Suite 516, Honolulu, Hawaii 96813 Tel: (808) 586-3775 Fax: (808) 586-3776

RECCOMENDATION SUBMITTAL DATE OF SUBMITTAL: January 5, 2018 DATE OF MEETING: January 11, 2018 TO: John Kim, Chairperson FROM: Sione Thompson, Executive Director AGENDA ITEM:

• V. Presentation and Action of Charter Schools Closure Protocol
• I. DESCRIPTION

Adopting a school closure protocol to be used by the Commission in event of a school closure resulting from voluntary surrender of a charter, revocation, or nonrenewal of a charter contract.

• II. POLICY CONTEXT

School Closure Protocol: Authorizers are required to develop a school closure protocol pursuant to Section 302D-19(a), Hawaii Revised Statutes (HRS). The statute provides that, “prior to any public charter school closure decision, an authorizer shall have developed a public charter school closure protocol to ensure timely notification to parents, orderly transition of students and student records to new schools, and proper disposition of school funds, property, and assets in accordance with the requirements of this chapter. The protocol shall specify tasks, timelines, and responsible parties, including delineating the respective duties of the school and the authorizer. In the event of a public charter school closure for any reason, the authorizer shall oversee and work with the closing school to ensure a smooth and orderly closure and transition for students and parents, as guided by the closure protocol.” Charter Contract Revocation or Non-Renewal: Section 302D-18(g), HRS provides that a charter contract may be revoked at any time or not renewed if the authorizer determines

2 that the charter school: “committed a material and substantial violation of any of the terms, conditions, standards, or procedures required under this chapter or the charter contract; failed to meet or make sufficient progress toward performance expectation set forth in the contract; failed to meet generally accepted standards of fiscal management; or substantially violated any material provision of law from which the charter school is not exempted.”

• III. BACKGROUND

At the August 24, 2017 Administration and Operations Committee meeting discussed adopting a school closure protocol. The Committee requested that staff present the school’s recommended tasks related to school closure to the Commission’s Performance and Accountability Committee.

• IV. PROPOSED CLOSURE PROTOCOL

Section 302D-19, HRS requires authorizers to adopt a school closure protocol to be used in the event that a charter school should close. The closure protocol attached as Exhibit 1

• utlines the responsibilities of the authorizer and the governing board and administration of

the closing school incorporates the requirements of Section 302D-19(a), HRS and is based

• n best practices put forth by the National Association of Charter School Authorizers

(NACSA). According to NACSA, a strong closure plan includes:

• “Notification to all stakeholders, including parents, students, community members,

the press, funders, creditors, debtors, contractors, receiving schools or districts and state education agencies;

• Creation of a closure team that includes a project manager from the authorizer, and
• ne from the school, as well as individuals with expertise in law, finance, and school

administration;

• Detailed instructions regarding the treatment of student records;
• Detailed instructions regarding the treatment of corporate records;
• Financial reporting requirements;
• Detailed instructions regarding the treatment of debtors, creditors, and assets;
• Development of a post-end-of-classes plan that addresses the corporate activities

that must occur, such as closing bank accounts, terminating staff, and making final tax payments; and

• A process for protection and disposition of assets.”

3 Exhibit 1 Proposed School Closure Protocol

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School Closure Protocol: Closures resulting from voluntary surrender of charter, revocation or nonrenewal of a charter contract. Action Item Responsibility for Completing Action Completion Date Within 24 hours of the voluntary surrender of a charter or a decision by the Commission resulting in the closure of a charter school 1 Establish Transition Team and Assign Roles The Commission will create a team dedicated to ensuring a smooth transition for students and staff and an orderly closure

• f the school’s business. The team will

include:

• A member of the Commission;
• The Commission Executive Director
• r his designee;
• The Commission Chief Financial

Officer;

• Charter school board chair;
• Administrator from the charter

school;

• Lead finance person from the

charter school; and

• Designated representative from the

charter school faculty. Commission and Charter School Board Chair 2 Initial Closure Notification Letter: Parents, Faculty, Staff Provide a written letter to the faculty, staff, and parents outlining:

• Closure decision;
• Timeline for transition;
• Help Line information;
• Charter school contact information;

and

• Commission contact information.

Commission and Charter School Board Chair 3 Initial Closure Notification Letter: State & Local Agencies Notify HIDOE and complex areas, as appropriate, of the closure for purposes of preparation to enroll additional students, with notification to include:

• Notification materials distributed to

the parents, faulty, and staff; and

• Commission decision materials.

Commission and Charter School Board Chair

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4 Talking Points Create talking points for parents, faculty, community and press. Focus on communicating plans for orderly transition

• f students and staff. Distribute to transition

team. Commission and Charter School Board Chair 5 Press Release Create and distribute a press release that includes the following:

• History of school;
• Commission school closure policies;
• Reason(s) for school closure;
• Outline of support that will be

provided to students, parents, and school staff; and

• Press point person for the

Commission and the school. Commission and Charter School Board Chair 6 Secure Student Records Ensure, to the extent possible, that all student records are complete, organized, up to date, and maintained in a secure location. Charter School Administrator Lead 7 Secure Financial Records Ensure, to the extent possible, that all financial records are complete, organized, up to date, and maintained in a secure location. Charter School Financial Lead 8 Parent Contact Information Provide a copy of parent contact information to the Commission. Parent Contact List to include:

• Student name;
• Address;
• Telephone;
• Email address

Charter School Administrator Lead 9 Faculty Contact Information Provide a copy of faculty contact information to the Commission. Faculty Contact List to include:

• Name;
• Position;
• Address;
• Telephone;
• Email address

Charter School Faculty Lead

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Within 48 hours of the Commission’s vote to close the charter school 10 Assign Transition Team Action Item Responsibilities Distribute contact information to all transition team members, set calendar for meetings, and assign projected dates for completion of each charter school closure action item. Commission and Charter School Board Chair 11 Terminate Summer Instruction Program Take appropriate action to terminate any summer instruction, such as cancelling teacher contracts. Charter School Board Chair and Administrator Lead Within 72 hours of the Commission’s vote to close the charter school 12 Documented Plan for Completion of Final Report Cards and Student Records The school will provide the Commission with a written plan detailing how school staff will ensure that final report cards are completed and all student records updated and ready for transfer to the appropriate agencies. The plan should include:

• A detailed timeline;
• Identification of the specific staff

members who are responsible for these tasks; and

• Specific details on how special

education records will be updated and prepared for transfer. Charter School Administrative and Faculty Lead, Charter School Board Chair Within 7 days of the Commission’s vote to close the charter school 13 Establish Use of Reserve Funds If the school has any reserve funds, Commission staff shall work with the governing board and/or its designee(s) to identify these reserve funds so that Commission staff can determine the acceptable use of such funds to support the

• rderly closure of the school.

Commission, Charter School Board Chair, Charter School Financial Lead 14 Union Notification Pursuant to any Collective Bargaining Agreement If applicable, the school will work with Department of the Attorney General to notify unions (HSTA/HGEA/UPW) of the termination of collective bargaining agreements (CBAs) pursuant to the notice requirements set forth in any existing CBA or Charter School Board Chair

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legal notice requirements. The school should:

• Consult with AG with respect to

notice requirements for terminating the CBA and the legal implications with respect to terminating the CBA and the legal implication with respect to termination of employees connected to the CBA;

• Provide the latest copy of the CBA to

the Commission;

• Provide a copy of the notice to the

Commission;

• Keep the Commission informed of

the implications, penalties, and damages in connection with any termination of a CBA and ongoing discussion and negotiations with the union in connection with termination. 15 Plan Parent Closure Meeting Plan to convene a parent closure meeting within a week of the closure decision. If a school that has voluntarily surrendered its charter has held meetings with parents and affected families, it will be the Commission’s discretion whether an additional meeting is needed.

• Make copies of closure FAQ

document available;

• Provide overview of Commission’s

closure policy and closure decision;

• Provide calendar of important dates

for parents;

• Provide specific remaining school

vacation days and date for end of classes;

• Present timeline for transitioning

students;

• Present timeline for closing down

school operations; Provide contact and help line information. Commission, Charter School Administrator, Charter School Parent Organization Leads Within 10 days of the Commission’s vote to close the charter school 16 Parent/Guardian Closure Transition Letter Distribute letter with detailed guidance regarding transition plan. Provide the Charter School Board Chair and Charter School Administrative Lead

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Commission with a copy of the letter. Notification should include:

• Date of last day of regular

instruction;

• Cancellation of any planned summer

school;

• Notification of mandatory

enrollment under state law;

• Dates of any planned school choice

fairs;

• Listing of the contact and enrollment

for charter, parochial, public, and private schools in the area;

• Information on obtaining a copy

student records pursuant to FERPA/UIPA; and

• Contact information for

parent/guardian assistance. 17 Staff/Faculty Closure Transition Letter Distribute letter to staff/faculty that outlines transition plans and timelines for staff. Provide the Commission with a copy of the

• letter. Letter should include:
• Commitment of school’s governing

board to transition staff;

• Commitment to positive transition of

children into new educational settings;

• Any transition assistance to new

employment that the governing board anticipates providing such as job fairs;

• Timelines for compensation and

benefits;

• Timelines for outstanding

professional development issues;

• COBRA information;
• Pertinent licensure information;
• Faculty lead contact information;

and

• Transition team member contact

information Charter School Board Chair 18 Agency Notifications The school must comply with statutory and regulatory obligations to ensure smooth transitions for students are satisfied. Agency notifications shall include: Commission and Charter School Board Chair

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• State Department of Education;
• Department of Budget and Finance;
• Office of the Governor;
• State Legislature;
• State Employees Retirement System;
• Department of Accounting and

General Services; and

• Employer Union Health Benefits

Trust Fund. Within 21 days of the Commission’s vote to close the charter school 19 Notification of Management Company and Termination of Contract The school must :

• Notify management company of

termination of education program by the school’s board, providing the last day of classes and absence of summer programs;

• Provide notice of non-renewal in

accordance with management contract;

• Request final invoice and accounting

to include accounting of retained school funds;

• Provide notice that the management

company should remove any property lent to the school after the end of classes and request a receipt

• f such property.

Charter School Board Chair 20 Notification of Contractors Agreement The school must identify a list of all leases/contractors/vendors with contracts in effect. The school will provide the Commission with written evidence that it has completed the following:

• Notify contractors regarding school

dissolution and cessation of

• perations;
• Instruct contractors to make

arrangements to remove any contractor property from the school by a certain date (copying machines, Charter School Financial Lead

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water coolers, other rented property). The school will:

• Retain records of past contracts as

proof of full payment; and

• Maintain telephone, gas, electric,

water, and insurance long enough to cover the time period required for all necessary dissolution procedures to be complete. 21 Notification to Creditors The school will identify any purported creditors and solicit from each creditor a final accounting of what the creditor believes to be the school’s accrued and unpaid debt, and compare the figures provided with the school’s position on and calculation of the purported debt. Where possible, negotiate a settlement of debts consummated by a settlement agreement reflecting satisfaction and release of existing

• bligations. The school will prove the

Commission with a list of the school’s creditors, unpaid debt, and settlement agreements. Charter School Financial Lead 22 Notification to Debtors The school, working with and under advice

• f the Attorney General, shall contact any

purported debtors and demand payment. If collection efforts are unsuccessful, the school may consider turning the debt over to a commercial debt collection agency. All records regarding such collection or disputes by debtors regarding amounts owed must be

• retained. The school will provide the

Commission with a list of the school’s debts

• wed to the school, and debts collected.

Charter School Financial Lead Within 30 days of Commission’s vote to close the charter school 23 Convene Faculty/Staff Closure Meeting Plan a faculty/staff closure meeting within a month of the closure decision. Provide the Commission with all materials distributed at faculty/staff meeting. If available, representatives from involved agencies (HSTA, EUTF, ERS, etc...) will be invited to attend this meeting. Charter School Board Chair, Charter School Administrator Lead, and Charter School Faculty Lead

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Board Chair to communicate:

• Commitment to continuing coherent

school operations throughout school closure information;

• Plan to assist students and staff by

making the closing of the school as smooth as possible;

• Reason for closure;
• Timeline for transition details;
• Compensation and benefits timeline;

and

• Contact information for ongoing

questions. Within 45 days of Commission’s vote to close the charter school 24 Notification of Employees and Benefit Providers (ERS/EUTF) In consultation with the Department of the Attorney General, establish an employee termination date. Provide the Commission with the notification provided to employees. The school should:

• Notify all employees of termination
• f employment;
• Notify benefit providers (ERS/EUTF)
• f pending termination of all

employees;

• Notify employees and providers of

termination of all benefit programs;

• Terminate all programs as of the last

date of service in accordance with: health benefits, life insurance, dental plans, vision plans, and retirement plans. Charter School Board Chair and Charter School Financial Lead 25 Inventory The school will provide the Commission with the following:

• Fixed asset list segregating state and

federal dollars;

• Note source codes for funds and

price for each purchase; and

• Established fair market value, initial

and amortized, for all fixed assets. Charter School Financial Lead 26 Disposition of Inventory The school will provide a copy of the following the Commission: Charter School Financial Lead

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• A disposition plan (e.g., auction), and

establish a payment process (cash, checks, credit cards) for any remaining items. Properly dispose of property purchased with federal funds. 27 Property Purchased with Public Funds Working with the Department of the Attorney General, establish required disposition of property purchased with public funds. Generally, property purchased with public funds must first be liquidated as necessary to satisfied outstanding debts, and then may be made available other charter schools. Charter School Financial Lead 28 Disposition of Real Property (for schools using state-owned facilities) Per section 302D-19, if the closing school is using facilities owned by the state, other charter schools have the right of first refusal. If no public charter school exercises the right

• f first refusal, the facilities shall revert back

to the department and the State. Identify charter schools that may want to use the school’s facilities. Create a process to grant the school’s facilities to interested charter schools. Commission and Charter School Financial Lead 29 Payment of Funds In consultation with the Department of the Attorney General, the school, and Commission shall develop a prioritized payment strategy considering state and local

• requirements. Using any available funds and

any proceeds from sales of school assets, the school may pay the following entities:

• Retirement systems;
• Teachers and staff;
• Employment taxes and federal taxes;
• Audit preparation;
• Private creditors; and
• Others as identified by the

Commission. Commission and Charter School Financial Lead Ongoing until closure is complete

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30 Maintenance of Location and Communication Determine whether the school will maintain the current facility as its locus of operation for the duration of closing out of the school’s business, regulatory, and legal obligations. In the event the facility is sold or vacated before concluding the school’s affairs, the school’s governing board and/or its designee(s) shall work with Commission staff to relocate its business records and remaining assets to a location where a responsive and knowledgeable party is available to assist with closure operations. The school must maintain reliable communications, including operational telephone service with voice message capability, and maintain custody of business records until all business and transactions are completed and legal obligations are

• satisfied. The school’s governing board

and/or its designee(s) shall immediately inform the Commission staff if any change in location or contact information occurs. Charter School Board Chair 31 Insurance The governing board and/or its designees shall work with Commission to identify the school’s assets and any assets in the school that belong to others to protect against theft, misappropriation, and deterioration. Once the school’s assets have been identified, The school must:

• Maintain existing insurance coverage

until the disposal of such assets under the school closure action plan;

• Continue existing insurance for the

facility, vehicles, and other assets until 1) disposal or transfer of real estate or termination of lease, and 2) disposal, transfer, or sale of vehicles and other assets;

• Negotiate facility insurance with

entities that may take possession of school facility (lenders, mortgagors, bond holders, etc.); Commission, Charter School Board Chair and Charter School Financial Lead

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• Continue or obtain appropriate

security services; and

• Plan to move assets to secure

storage after closure of the school facility. 32 Continue Current Instruction Continue instruction under current education program per charter contract until end of classes as designated in Commission’s closure decision Charter School Administrator Lead 7 days after the end of class 33 Final Report Cards and Student Records Notice The school will ensure that:

• All student records and report cards,

if applicable, are complete and up to date;

• Parents/guardians are provided with

notice of where student records will be sent (with specific contact information); and

• Parents/guardians receive a notice

reminding them of the opportunity to access a copy of student records. Charter School Administrative and Faculty Lead 34 Transfer of Testing Materials The governing board and/or its designee(s) shall work with Commission staff to ensure that the school meets state requirements regarding disposition of state assessment materials stored at the school and returned as required. Charter School Administrative Lead 35 US Department of Education Filings File Federal Form 269 or 269a if the school was receiving funds directly from the US

• DOE. See 34 CFR 80.41.

Charter School Financial Lead 30 days after the end of class 36 Transfer of Student Records Commission will work with the school to ensure that all student records are transferred to students’ new schools, a state agency, or another entity. Student records to include:

• Grades and any evaluation;
• All materials associated with

Individualized Education Programs; Commission, Charter School Administrative Lead, Charter School Faculty Lead and Charter School Parent Organization Lead

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• Immunization records; and
• Parent/guardian information.

The Commission and/or the school must contact the DOE and complex areas, as appropriate, to notify them of how (and when) records—including special education records—will be transferred. In addition, the school must create a master list of all records to be transferred and state their destination(s). 37 Documenting Transfer of Records Written documentation of the transfer of records must accompany the transfer of all student materials. Submit the following to the Commission:

• The number of general education

records transferred;

• The number of special education

records transferred;

• Date of transfer;
• Signature and printed name of the

charter school representative releasing the records;

• Signature and printed name of the

recipient of the records. Charter School Board Chair, and Charter School Administrative Lead 38 Transfer of Control of School Bank Accounts to the Commission The school administration and the governing board chair will transfer control of the school’s bank accounts to the Commission. The Commission will coordinate and ensure that staff payments are completed as scheduled. Charter School Administrative Lead, Charter School Financial Lead, Commission 60 days after the end of classes 39 Disposition of Records In accordance with state records retention policies, the governing board and/or its designee(s) shall work with Commission staff to secure and transfer to the Commission all corporate records related to:

• Loans, bonds, mortgages, and other

financing;

• Contracts;
• Leases;
• Assets and asset sales;

Charter School Board Chair

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• Grants (records relating to federal

grants must be kept in accordance with 34 CFR 80.42);

• Governance (minutes, by-laws,

policies);

• Employees (background checks,

personnel files);

• Accounting/audit, taxes, and tax

status;

• Employee benefit programs and

benefits; and

• Any items provided for in the closure

action plan. 40 Itemized Financials The school must review, prepare, and make available:

• Fiscal year-end financial statements;
• Cash analysis;
• List of compiled bank statements for

the year;

• List of investments;
• List of payables (and determinations
• f when a check used to pay the

liability will clear the bank);

• List of all unused checks;
• List of petty cash; and
• List of bank accounts.

Additionally, collect and void all unused checks as well as close accounts once transactions have cleared. Charter School Financial Lead 41 Payroll Reports The school must generate and provide to the Commission a list of all payroll reports including taxes, retirement, or adjustments

• n employee contracts.

Charter School Financial Lead 120 days after the end of classes 42 Audit The school must establish a date by which to complete a final close out audit by an independent firm as provided by Section 302D-32, HRS. The school must provide the Commission with a copy of the final audit. Charter School Board Chair and Charter School Financial Lead