Charter School Facility Grant Program.

(1) Existing law requires the Controller, in consultation with the Department of Finance and the State Department of Education, to develop a plan to review and report on financial and compliance audits. Existing law requires the Controller to propose the content of an audit guide and authorizes a supplement to the audit guide to be suggested in the audit year to address issues resulting from new legislation in that year that changes the conditions of apportionment. Existing law requires the Controller to submit the proposed content of the audit guide and any supplement to the Education Audits Appeal Panel for review and possible amendment, and requires the Education Audits Appeal Panel to adopt the audit guide and any supplement pursuant to the rulemaking procedures of the Administrative Procedure Act. This bill would require the Controller to propose, and the Education Audits Appeal Panel to adopt, a charter school supplement to the audit guide in order to provide guidance to auditors regarding which sections of the school district and county office audit guide apply to charter schools and to create specific guidance related to the unique nature of charter schools. The bill also would make conforming changes. (2) The Charter Schools Act of 1992 (Charter Schools Act) allows a charter school to elect to operate as, or be operated by, a nonprofit public benefit corporation, as specified. This bill would expressly prohibit a charter school from operating as, or from being operated by, a for-profit corporation. (3) The Charter Schools Act specifies the procedures for the submission, review, and approval or denial of a petition to establish a standard or countywide charter school. The act allows the governing board of a school district to deny a charter petition only if the board makes written factual findings that support certain facts regarding the petition. The act requires a county board of education to deny a petition to establish a countywide charter school if the board makes any of several specified factual findings. This bill, in addition, would allow a governing board to deny a petition, and would require a county board of education to deny a petition for a countywide charter, if it makes a written factual finding that the petitioner has operated another charter school for at least 3 consecutive years and one of several specified events has occurred. (4) The Charter Schools Act limits the duration of charters to a period not to exceed 5 years and authorizes the chartering authority to grant one or more subsequent renewals for an additional period of 5 years. The act prescribes the requirements a charter school must comply with in order to have its charter renewed, including a requirement that a charter school that has been in operation for 4 years satisfy at least one of several specified criteria regarding academic performance. This bill would authorize a charter renewal to be for a period of 1 to 5 years. The bill would require a chartering authority to consider, as one factor in determining whether to grant a renewal, the degree to which a charter school serves pupil populations that are similar to local school district pupil populations, especially with regard to high-need pupils, as specified. The bill would delete one of the criteria for the requirement regarding charter schools in operation for 4 years. The bill would prohibit a chartering authority from granting a renewal of a charter school for longer than a 3-year period if that charter school is in program improvement or has entered into year 5 of program improvement, has not exited program improvement, and did not meet Adequate Yearly Progress in the year prior to the renewal year. (5) The Charter Schools Act requires a charter petition to include a reasonably comprehensive description of the manner in which annual, independent financial audits will be conducted. The act requires a charter school to transmit a copy of its annual, independent financial audit report for the preceding fiscal year to its chartering entity, the Controller, the county superintendent of schools of the county in which the charter school is sited, except as specified, and the department by December 15 of each year. This bill would require the Controller, by December 31 of each fiscal year, to publish a directory of certified public accountants and public accountants, licensed by the California Board of Accountancy, deemed by the Controller to be qualified to conduct audits of charter schools. The bill would require each audit of a charter school to be conducted by a certified public accountant or public accountant selected by the charter school from the directory. The bill would specify that it is unlawful for a public accounting firm to provide audit services to a charter school if the lead audit partner, or coordinating audit partner, having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for that charter school in each of the 6 previous fiscal years, except as provided.