There is no one-size-fits-all formula when it comes to public school finance, and CCAP’s Financial Health and Sustainability Framework for charter school authorizers has been revised to provide additional clarity and align even more directly with California’s funding model and prevailing fiscal standards and metrics for California charter schools.
The previous version of the Framework included a few national factors and priorities that over time became slightly out of sync with current California conditions, explained CCAP Board Treasurer Debi Deal. The revision also includes changes necessitated by COVID in projecting Average Daily Attendance (ADA), which forms the basis of how the state funds public schools.
“CCAP designed a model for the way that California works, with the factors and nuances” within the state’s funding system, said Deal. “First and foremost, it’s about cash. In the state of California if you run out of cash in a charter school you close your doors.”
Decades of experience has borne this out. As a former specialist with the Fiscal Crisis Management and Assistance Team (FCMAT), Deal has found that not understanding or paying attention to finances is the weak link in charter school survival.
The framework is hewed to California’s Local Control Funding Formula (LCFF), the pivotal 2013 legislation that overhauled the public school funding system, and the Local Control and Accountability Plan (LCAP), a three-year plan showing how district and charter school spending will achieve better outcomes for all students. CCAP Executive Director Tom Hutton explains that it is designed to provide the essential information authorizers need to monitor the financial health of charter schools while being manageable for small authorizers and schools. “It targets financial lay people like me to be user-friendly for us as well.”
The updated framework includes definitions of key terms, authorizers’ fiscal oversight responsibilities, and downloadable templates to help determine if a charter school is meeting the standards that indicate of short- and long-term financial sustainability, including cash flow projections, ADA projections, a reserve for economic uncertainty, and whether expenditures match the approved budget designed to implement the LCAP goals.
Although the framework is designed for authorizers, it’s also a useful tool for charter school leaders to use for self-evaluation to identify and address potential signs of fiscal distress before their authorizer evaluations.