Charter School Closure List

Ensure all student records are organized, updated, and transferred to the appropriate local education agency (LEA).

Transfer all student records to the students' school district of residence. If students will be attending another charter school or a private school entity, all student records must also be submitted to the new to the student's new school.

These records must include:

1. Grades and any evaluations;
2. All materials associated with Individual Education Programs (including documentation of any ongoing legal obligations and whether the school staff will participate in IEP staffing meetings at receiving schools for students with disabilities);
3. Immunization records; and
4. Parent/guardian information.
   

The charter school should contact relevant districts of residence for students and notify districts of how (and when) records, including special education records, will be transferred. In addition, the charter school should create a master list of all records to be transferred and state their destination(s).

Authorizer Lead and Charter School Board Chair

*PDE's Bureau of Special Education (BSE) may be involved regarding students receiving special education services.

Notification Letters

• Parents/ Guardians
• Students
• Staff
• Agencies
• Union (if applicable)
  

Provide the charter school authorizer(s) with copies of the letters.

Notification to Creditors:

Solicit from each creditor a final accounting of the school's accrued and unpaid debt. Compare the figures provided with the school's calculation of the debt and reconcile.

Where possible, negotiate a settlement of debts consummated by a settlement agreement reflecting satisfaction and release of the existing obligations.

Provide the charter school authorizer(s) with a written summary of this activity.

Notification to Debtors:

Contact all debtors and demand payment. If collection efforts are unsuccessful, 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.

Provide the charter school authorizer(s) with a written summary of this activity.

Notification of Contractors Agreement:

Formulate a list of all contractors with contracts in effect and:

• Notify them regarding school closure and cessation of operations;
• Instruct contractors to make arrangements to remove any contractor property from the school by a certain date (copying machines, water coolers, other rented property);
• Retain records of past contracts as proof of full payment;
• Maintain telephone, gas, electric, water and insurance (including Directors and Officers liability insurance) long enough to cover the time period required for all necessary closure procedures to be complete.

Provide the charter school authorizer(s) with written notice of such notification.

Notification of Employees and Benefit Providers:

Establish an employee termination date and:

• Notify all employees of termination of employment and/or contracts;
• Compose a formal notification to each educator indicating the time served at the charter school;
• Notify benefit providers of pending termination of all employees;
• Notify employees and providers of termination of all benefit programs; and
• Terminate all programs as of the last date of service in accordance with applicable law and regulations (i.e., COBRA), including:

• • Health care/health insurance;
  • Life insurance;
  • Dental plans;
  • Vision plans;
  • Cafeteria plans;
  • 401(k) retirement plans; and
  • Pension plans.

Specific rules and regulations may apply to such programs, especially teachers' retirement plans, so legal counsel should be consulted.

Provide the charter school authorizer(s) with copies of all materials.

Plan and convene a parent closure meeting.

• Provide parents overview of action items;
• Provide overview of authorizing school district's board 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; and
• Present timeline for closing of school operations.

Provide contact information and help line information.

Plan and convene a faculty/staff meeting for the Board Chair to communicate the following:

• Commitment to continuing coherent school operations throughout closure transition;
• Plan to assist students and staff by making closing as smooth as possible;
• Reasons for closure;
• Timeline for transition details;
• Compensation and benefits timeline; and
• Contact information for ongoing questions.

Provide the charter school authorizer(s) with copies of all materials distributed at the Faculty/Staff Meeting.

Create and distribute a press release that includes the following:

• History of school;
• Authorizing board closure policies;
• Reason(s) for school closure;
• Outline of support for students, parents and staff; and
• A press point person for the authorizer and the charter school.

Authorizer Lead and Charter School Board Chair

Within 24 hours of the authorizing board's vote to close the charter school

Establish use of reserve funds

If school is required to maintain closure reserve funds, identify acceptable use of such funds to support the orderly closure of the school.

Complete all required state reports

• Charter School Annual Report due August 1
• Educator Effectiveness Annual Report due February 28
• Civics Knowledge Survey (Act 35) (if LEA enrolls students in any grades 7-12) due October 2
• High School Graduation Requirements (Act 158) (if LEA enrolls students through grade 12 and closes after graduation) due December 1
• Safe School Reports
  • Bullying Policy Report due July 31
  • Bus Evacuation Report due April 10
  • Fire Drill & Security Drill Report due July 31
  • MOU with Local Police Department due June 30
  • Safe Schools Annual Report due July 31
  • Interscholastic Athletic Opportunities Plan due November 15

Maintain an identifiable location and line of communication

Establish if the school will maintain the current facility as its locus of operation for the duration of closing out the school's business, regulatory and legal obligations. In the event the facility is sold or otherwise vacated before concluding the school's affairs, the school must 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 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 must immediately inform the authorizer if any change in location or contact information occurs.

Maintain insurance coverage and asset protection

The school's assets and any assets in the school that belong to others must be protected against theft, misappropriation, and deterioration. The school should:

• 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.);
• Continue or obtain appropriate security services; and
• Plan to move assets to secure storage after closure of the school facility.

If applicable under state statute, the school should maintain existing directors' and officers' liability (D&O) insurance, if any, until final dissolution of the schools

Ongoing until closure complete

Union Notification Pursuant to any Collective Bargaining Agreement:

If applicable, the school should contact legal counsel and work with them to notify any unions of termination of collective bargaining agreements (CBAs) and the pending cessation of instruction, pursuant to the notice requirements set forth in any existing CBA or notice requirements of applicable federal, state, and local law. The school should:

• Consult with legal counsel with respect to notice requirements for terminating the CBA and the legal implications with respect to termination of CBAs and the termination of employees connected to the CBAs;
• Provide a copy of the latest CBA to the authorizer; and
• Provide a copy of the notice to the charter school's authorizer(s).

Keep the charter school authorizer(s) informed of the implications, penalties, and damages in connection with any termination of a CBA and ongoing discussions and negotiations with the union in connection with termination.

Notification of Management Company / Organization and Termination of Contract:

• Notify management company/organization 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 and grant fund status.
• Provide notice that the management company/organization should remove any property lent to the school after the end of classes and request a receipt of such property.

Provide a copy of these notifications to the charter school's authorizer(s).

Corporate Records:

In all cases, the board of the charter school shall maintain all corporate records related to:

• Loans, bonds, mortgages, and other financing
• Contracts
• Leases
• Assets and asset sales
• Grants (records relating to federal grants must be kept in accordance with 34 CFR 8042.)
• Governance (minutes, by-laws, policies)
• Employees (background checks, personnel files)
• Accounting/audit, taxes, and tax status
• Employee benefit programs and benefits
• Any items provided for in the closure action plan

U.S. Department of Education Filings:

• File Federal form 269 or 269a if the school was receiving funds directly from the United States Department of Education. See 34 CFR 80.41

IRS Status:
If the school has 501(c)(3) status, it must take steps to maintain that status including, but not limited to, the following:

• Notification to IRS regarding any address change of the School Corporation, and
• Filing required tax returns or reports (e.g., IRS form 990 and Schedule A).

If the school corporation proceeds to dissolution, notify the IRS of dissolution of the education corporation and its 501(c)(3) status, and provide a copy to the charter school authorizer(s).

Audit:
Establish a date by which to complete a final close out audit by an independent firm or state auditor as determined by statute.

Provide a copy of the final audit to the charter school authorizer(s).

Vendors:

• Create vendor list, and
• Notify vendors of closure and cancel or non-renew agreements as appropriate.

Provide the charter school authorizer(s) with a copy of all documents.

Inventory:

• Create a fixed asset list segregating state and federal dollars;
• Note source codes for funds and price for each purchase; and,
• Establish fair market value, initial and amortized for all fixed assets.

Provide the charter school authorizer(s) with a copy of all documents.

Disposition of Property:

Check with the Pennsylvania Department of Education's Division of Federal Programs and the Bureau of Special Education regarding proper procedures for the disposition of property purchased with federal funds, including those assets purchased for students with disabilities using special education funding.

Disposition of Inventory:

Establish a disposition plan (e.g., auction), and establish a payment process (e.g., cash, checks, credit cards) for any remaining items.

Provide the charter school authorizer(s) with a copy of all documents.

Property Purchased with Public Charter School Program (PCSP) Funds:

Establish under state or individual school agreements required disposition of property purchased with PCSP funds. Generally, property purchased with PCSP funds must first be offered to other charter schools within the same region in which the closing school is located, with requisite board resolutions consistent with the purpose of the PCSP. If no schools want the property, an auction must be held to dispose of the PCSP assets.

The school must:

• Ensure public notice of the auction is made widely;
• Price items at fair market value, as determined from inventory and fixed assets policy; and
• Determine with the state education department how to return funds if any remain. 

Provide the charter school authorizer(s) with board resolutions and minutes of any transfer of assets with a dollar value of zero (0) to another school.

Payment of Funds:

Work with the authorizer to prioritize payment strategy considering state and local requirements. Using available revenue and any funds from auction proceeds, pay the following entities:

• Retirement systems;
• Teachers and staff;
• Employment taxes and federal taxes;
• Audit preparation;
• Private creditors;
• Overpayments from state/district; and
• Others as identified by authorizing school district.

Provide the charter school authorizer(s) with a copy of all materials associated with this action. 

Expenditure Reporting:

Ensure that Federal Expenditure Reports (FER) and the Annual Performance Report (APR) are completed.

Provide the charter school authorizer(s) with a copy of all materials.

Itemized Financials:

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 of 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. 

Special Education Funds:

Review, prepare and make available:

• Specific accounting for special education funds, including [as applicable] federal, state, and local funding sources, accounting of how all special education funds were spent, and the disposition of materials and equipment purchased with special education dollars.
  

Payroll Reports:

Generate a list of all payroll reports including taxes, retirement, or adjustments on employee contracts.

Provide the charter school authorizer(s) with copies of all materials.

List of Creditors and Debtors:

Formulate list of creditors and debtors and any amounts accrued and unpaid with respect to such creditor or debtor. The list should include:

• Contractors to whom the school owes payment;
• Lenders;
• Mortgage holders;
• Bond holders;
• Equipment suppliers;
• Secured and unsecured creditors;
• Persons or organizations who owe the school fees or credits;
• Lessees or sub-lessees of the school; and
• Any person or organization holding property of the school.