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Title 701 | Chapter 008 | Regulation 020

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701 KAR 8:020.Evaluation of charter school authorizers.

RELATES TO:

KRS 158.070, 158.649, 160.1590, 160.1591, 160.1592, 160.1593, 160.1594, 160.1595, 160.1596, 160.1597, 160.1598, 160.1599, 161.141

STATUTORY AUTHORITY:

KRS 160.1596

NECESSITY, FUNCTION, AND CONFORMITY:

KRS 160.1596 requires the Kentucky Board of Education to promulgate an administrative regulation to establish the process to be used to evaluate the performance of a charter school authorizer, based upon the requirements of KRS 160.1590 to 160.1599 and 161.141, and the actions to be taken in response to failures in performance. This administrative regulation establishes requirements for the competence, performance, and evaluation process for charter school authorizers.

Section 1.

Definitions.

(1)

"Academically behind" means at risk of academic failure.

(2)

"Achievement gap" is defined by KRS 160.1590(1) and 158.649(1).

(3)

"Adult student" means a student who is eighteen (18) years or older who is still eligible for enrollment and attendance at a school program pursuant to KRS 158.030 and 158.100.

(4)

"Applicant" is defined by KRS 160.1590(2).

(5)

"Areas of exceptionality" means categories of disabilities of students with special needs.

(6)

"At risk" means at risk of academic failure.

(7)

"At risk of academic failure" means:

(a)

Attendance at a school identified pursuant to KRS 160.346(2) for targeted support and improvement;

(b)

Attendance at a school identified pursuant to KRS 160.346(3) for comprehensive support and improvement;

(c)

Current achievement two (2) or more grade levels below the student's age group;

(d)

Demonstration of poor academic skills, such as failure of two (2) or more subjects in two (2) of the past four (4) school years;

(e)

Consistent absence or tardy and absence twenty-five (25) or more unexcused student attendance days in the last two (2) school years and an overall grade average below a C;

(f)

Suspension (in-school suspension or home suspension) two (2) or more times during the past school year and an overall grade average below a C;

(g)

Family history of dropping out or lack of family support for the student in the completion of school;

(h)

Little or no participation in school cocurricular or extracurricular programs;

(i)

Below grade level in reading or math skills;

(j)

Indication of being socially isolated; or

(k)

An applicant's definition for this term in the applicant's authorizer approved charter application, pursuant to KRS 160.1594(2).

(8)

"Authorizer" or "public charter school authorizer" is defined by KRS 160.1590(15).

(9)

"Authorizer's board of directors" means:

(a)

The board of education for the local school district for an authorizer defined by KRS 160.1590(15)(a); and

(b)

The boards of education that have collaborated to set up a regional public charter school for an authorizer defined by KRS 160.1590(15)(b).

(10)

"Bilingual students" means students who are fluent in English and a foreign language, which may include American Sign Language.

(11)

"Charter" means charter contract.

(12)

"Charter application" is defined by KRS 160.1590(3).

(13)

"Charter contract" or "contract" is defined by KRS 160.1590(4).

(14)

"Charter school" means a public charter school.

(15)

"Charter school board of directors" is defined by KRS 160.1590(5).

(16)

"Cocurricular programs" means school programs that have activities that are unequivocally instructional in nature, directly related to the instructional program, and scheduled to minimize absences from classroom instruction.

(17)

"Comprehensive learning experiences" or "Expanded learning opportunities" means daily, rigorous learning experiences that build on a student's talents, challenge the student's skills and understandings, and develop the student's ability to reason, problem solve, collaborate, and communicate to prepare the student for success in postsecondary.

(18)

"Conversion public charter school" or "conversion charter school" is defined in KRS 160.1590(6).

(19)

"Days" means calendar days calculated pursuant to KRS 446.030.

(20)

"District of location" is defined by KRS 160.1590(7).

(21)

"Education service provider" is defined by KRS 160.1590(8).

(22)

"Emancipated youth" means a student under the age of eighteen (18) who is or has been married or has by court order or otherwise been freed from the care, custody, and control of the student's parents.

(23)

"Enrollment preference" means the priority of the student application from other students' applications pursuant to KRS 160.1591(5).

(24)

"Extracurricular programs" means voluntary programs that are offered by a school but are not part of the required school program.

(25)

"Fiscal year" is defined by KRS 160.450.

(26)

"Foreign entity" is defined by KRS 14A.1-070(10).

(27)

"Gifted" means a gifted and talented student as defined by KRS 157.200(1)(n).

(28)

"Governing board of the authorizer" means the authorizer's board of directors.

(29)

"Governing body of the authorizer" means the authorizer's board of directors.

(30)

"Grade" or "Grade Level" means a single elementary, middle, or high school grade of school.

(31)

"Knowingly" means that a person knew that in authorizing, ordering, or carrying out an act or omission that the act or omission constituted a violation of a statute or administrative regulation.

(32)

"Local school district" is defined by KRS 160.1590(10).

(33)

"Parent" is defined by KRS 160.1590(11).

(34)

"Persistently low-achieving public schools" or "Persistently low-achieving noncharter public schools" means noncharter schools identified for comprehensive support and improvement pursuant to KRS 160.346.

(35)

"Person with custody or charge" means any adult, pursuant to KRS 159.010, who falls within the definition for interested person or entity as defined by KRS 387.010(2) for an interested person or entity and with whom the student resides.

(36)

"Primary enrollment preference" means any enrollment preference other than a secondary enrollment preference.

(37)

"Public charter school" is defined by KRS 160.1590(14).

(38)

"School level" or "Level" or "Educational level" means the configuration of grade levels that form elementary, middle, and high schools.

(39)

"Secondary enrollment preference" means the priority of a student application for enrollment in a public charter school, after acceptance of all the student applications with primary enrollment preference, if the public charter school's capacity has not been exceeded.

(40)

"Start-up public charter school" means a public charter school that did not exist as a noncharter public school prior to becoming a public charter school.

(41)

"Student" is defined by KRS 160.1590(18) and includes any person who is entitled to enrollment and attendance at a school program as provided in KRS 158.030 and 158.100.

(42)

"Student attendance day" is defined by KRS 158.070(1)(e).

(43)

"Students with special needs" or "Special needs students" means:

(a)

Exceptional children and youth students, as defined in KRS 157.200, who are eligible pursuant to the Individuals with Disabilities Education Act, 20 U.S.C. secs. 1400 et seq. for an individual education plan, as described in KRS 157.196, or an individual education program, as described in KRS 158.281; or

(b)

Students who are eligible for services under Section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. sec. 794, to prevent substantial limitation of one (1) or more major life activities.

(44)

"Substantial hardship" means a significant, unique, and demonstrable economic, technological, legal, or other impact on a local school district that impairs the district's ability to continue to successfully meet the requirements of educational programs or services for the district's students.

(45)

"Superintendent" means the local school district employee tasked with the duties established in KRS 160.370.

(46)

"Traditionally underperforming" means at risk of academic failure.

(47)

"Unilateral imposition of conditions" means the authorizer has placed or attempted to place conditions or requirements that are not required by KRS 160.1590 to 160.1599, 161.141, or 701 KAR Chapter 8:

(a)

On the applicant in the authorizer's formal action approving the charter application; or

(b)

On the charter school in the charter contract or an amendment.

(48)

"Unilaterally imposed conditions" or "Unilateral conditions" or "Conditions unilaterally imposed" means conditions or requirements not required by KRS 160.1590 to 160.1599, 161.141, or 701 KAR Chapter 8 that the authorizer places or attempts to place:

(a)

On the applicant in the authorizer's formal action approving the charter application; or

(b)

On the charter school in the charter contract or an amendment.

(49)

"Urban academy" is defined by KRS 160.1590(19).

(50)

"Year", "academic year", or "school year" means school year as established in KRS 158.050.

Section 2.

Policies and Procedures. Pursuant to KRS 160.1594, an authorizer shall create policies and procedures governing the authorizer's performance of its duties under KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8 and shall include in its policies and procedures:

(1)

The authorizer's strategic vision for chartering, including a clear statement of any preference for a charter application that demonstrates the intent, capacity, and capability to provide comprehensive learning experiences or expanded learning opportunities to students identified in KRS 160.1594(2) or 160.1592(19);

(2)

Identification of any charter application preferences of the authorizer pursuant to KRS 160.1594(2);

(3)

Information on the authorizer's performance contracting requirements, including:

(a)

Academic, financial, and operational measures, and the performance frameworks, that the authorizer has developed for public charter school oversight and evaluation and with which the authorizer shall evaluate the charter school's performance under the charter contract, in accordance with KRS 160.1594 and 701 KAR Chapter 8; and

(b)

Requirements for executing a contract with a charter school board of directors that articulates:

1.

The rights and responsibilities of each party regarding school autonomy;

2.

Funding;

3.

Administration and oversight;

4.

Outcomes;

5.

Measures for evaluating success or failure;

6.

Performance consequences; and

7.

Other material terms;

(4)

The evidence the authorizer shall require, the evaluation the authorizer shall conduct using the performance framework, and other aspects of the authorizer's ongoing monitoring of the charter school including:

(a)

Ensuring a charter school's legally entitled autonomy;

(b)

Protecting student's civil, disability, safety, and educational rights;

(c)

Ensuring the establishment of a food program as required by KRS 160.1592(3)(r);

(d)

Informing intervention, revocation, and renewal decisions; and

(e)

Providing annual reports as required by KRS 160.1596;

(5)

The requirements for reporting to the public;

(6)

The authorizer's authority to intervene in charter schools, if necessary;

(7)

Guidelines concerning the format and content essential for an applicant to demonstrate the capacities necessary to establish and operate a public charter school, pursuant to KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8;

(8)

The timeline for submission, acceptance, review, decision, and appeal for a charter application, and a request for renewal, which includes clear deadlines. An authorizer described in KRS 160.1590(15)(c) and (d) shall consult with the superintendent of the resident local school district if planning this timeline;

(9)

A template of the assurances an authorizer shall require in a charter contract;

(10)

The following evidence sufficiency requirements for the charter application:

(a)

The charter school board of directors' ability to meet the financial solvency and sustainability demands of their proposed budget;

(b)

Competent and timely charter school start-up and operation;

(c)

Foreseen and unforeseen closure; and

(d)

All debts and obligations during each fiscal year of the charter contract and during the entire contract term;

(11)

The financial transparency requirements that shall apply to a charter school, including specific provisions regarding publication on the authorizer's website and the charter school's Web site;

(12)

The charter school closure protocol and requirements;

(13)

A description of the authorizer's organizational capacity, including its commitment of human and financial resources necessary to conduct authorizing duties effectively and efficiently;

(14)

The authorizer's requirements for solicitation and evaluation of a charter application, including its implementation of a comprehensive application process that includes use of the Kentucky Charter School Application and Addendum, and rigorous criteria, and approval of only a charter application that demonstrates a strong capacity to establish and operate a charter school;

(15)

The authorizer's charter renewal and revocation processes and rigorous criteria, including its design and implementation of a transparent and rigorous process that uses comprehensive academic, financial, and operational performance data to make merit-based renewal and revocation decisions; and

(16)

The requirements of KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8 for an applicant, a board of directors, an education service provider, a charter school, and their employees.

Section 3.

Standards of Authorizer Performance Generally.

(1)

Prior to authorizing a charter school, an authorizer as established in KRS 160.1590(15)(c) and (d) shall file the Notice of Intent with the Kentucky Board of Education.

(2)

An authorizer shall restrict the expenditure of funds received as a result of charter authorization and oversight to the purpose of fulfilling authorizing obligations pursuant to KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8.

(3)

Pursuant to KRS 160.1596(17)(e), an authorizer shall include in its report and place in a publicly accessible location on its website information on the following:

(a)

The oversight and any services provided by the authorizer to the public charter schools under the authority of the authorizer;

(b)

The authorizing functions provided by the authorizer to the public charter schools under its jurisdiction, including the operating costs and expenses of the authorizer as detailed in annual audited financial statements that conform to generally accepted accounting principles;

(c)

All use of charter authorizing revenue including expenditures, contracts, and revenues, in the format required by the commissioner of education; and

(d)

The reports that an authorizer is required to make pursuant to KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8.

(4)

 

(a)

Pursuant to KRS 160.1594 and except as specified in Section 3(4)(b) of this administrative regulation, prior to evaluating a charter application, each authorizer or member of the authorizer's board of directors or governing board shall complete six (6) hours of training, as approved by the Commissioner of Education, which shall include the following topics pertinent to authorizer responsibility and charter school formation and operation:

1.

Financial governance and transparency;

2.

Conflict of interest;

3.

Charter application;

4.

Charter school contracting;

5.

Charter school monitoring;

6.

Charter school renewal, nonrenewal, and revocation;

7.

Charter school closure;

8.

Ethics;

9.

Curriculum and instruction;

10.

Educational services provided for special needs, at risk, English learner, gifted, and other special population students; and

11.

Physical restraint and seclusion of students; and

(b)

An authorizer or member of the authorizer's board of directors or governing board that completed all training requirements pursuant to Section 3(4)(a) of this administrative regulation in the immediately preceding twelve (12) months prior to receipt of a charter school application shall be exempt from completing training pursuant to Section 3(4)(a) of this administrative regulation prior to evaluating that charter school application.

(5)

An authorizer shall submit to the department a written assurance of a charter school's compliance with the pre-operating requirements in this administrative regulation and in the charter contract before the opening of the charter school.

(6)

An authorizer shall require the sharing of best practices between the charter school and the resident local school district.

Section 4.

Standards of Authorizer Performance Concerning Charter Applications.

(1)

Pursuant to KRS 160.1591 and 160.1594(1)(e)2., and to the extent not prohibited by federal law, an authorizer shall not approve a charter application that is:

(a)

From an applicant that is or includes:

1.

A for-profit organization, or its designee;

2.

An organization, or its designee, that is organized for religious purposes, within the meaning of 501(c)(3) of the Internal Revenue Code of 1986, as amended, and qualifying for tax-exempt status pursuant to 501(c)(3) of the Internal Revenue Code of 1986, as amended; or

3.

A business entity, or its designee, that is not authorized to do business and in good standing in the Commonwealth of Kentucky, pursuant to KRS Chapter 14A; or

(b)

That has in the proposed board of directors:

1.

A for-profit organization, or its designee;

2.

An organization, or its designee, that is organized for religious purposes, within the meaning of 501(c)(3) of the Internal Revenue Code of 1986, as amended, and qualifying for tax-exempt status pursuant to 501(c)(3) of the Internal Revenue Code of 1986, as amended; or

3.

A business entity, or its designee, that is not authorized to do business and in good standing in the Commonwealth of Kentucky, pursuant to KRS Chapter 14A.

(2)

An authorizer shall require a charter application to be submitted on the Kentucky Charter School Application and Addendum and may require additional information from the applicant.

(3)

An authorizer shall publish a copy of a submitted charter application on its website within three (3) days of submission by the applicant to the authorizer.

(4)

An authorizer shall provide a copy of a submitted charter application to the resident local school district superintendents and to any other authorizer of charter schools in that local school district within three (3) days of submission by the applicant to the authorizer.

(5)

An authorizer shall allow a resident local school district superintendent to file a letter with supporting evidence objecting to the approval of the charter application on the basis of the substantial hardship that may result for the students of the resident local school district who do not attend the charter school. An authorizer shall publish a copy of the letter and supporting evidence from the resident local school district superintendent on the authorizer's website within three (3) days of submission by the superintendent to the authorizer and the authorizer shall review this evidence prior to approving a charter application.

(6)

An authorizer shall allow a resident local school district superintendent to file a letter of support for a charter application and shall publish a copy of the resident local school district superintendent letter on the authorizer's website within three (3) days of submission by the superintendent to the authorizer.

(7)

An authorizer shall require a resident local school district superintendent to provide information and evidence regarding the academic performance of the students identified in the charter application as the targeted student body or community. An authorizer shall publish a copy of this information on the authorizer's Web site within three (3) days of submission by the superintendent to the authorizer, to the extent not prohibited by confidentiality laws.

(8)

An authorizer shall comply with the following requirements in reviewing the charter application:

(a)

Request and secure a certificate of existence from the Secretary of State, pursuant to KRS 14A.2-130, for any business entity or its designee included in the application or in the proposed charter school board of directors; and

(b)

If the applicant or the board of directors includes a foreign entity, request and secure a certificate of authorization for the foreign entity from the Secretary of State, pursuant to KRS 14A.2-140.

(9)

An authorizer shall require an applicant or proposed board of directors for a charter school to include in the charter application:

(a)

Performance information, financial information, and closure information for any charter school under the applicant or board of directors;

(b)

Details and documentation of the outreach the applicant or proposed board of directors has had with the students or community that is the focus of the charter application;

(c)

Details of whether the charter application replicates or substantially replicates:

1.

A charter application that the applicant, the proposed board of directors, or another entity previously withdrew from consideration and the reasons the charter application was withdrawn;

2.

A charter application that was rejected by an authorizer and the reasons the charter application was rejected; or

3.

A charter school that was previously closed and the reasons for the closure; and

(d)

A memorandum of understanding as required by KRS160.1593(3)(f)(3).

(10)

An authorizer shall provide on the authorizer's website the names of all persons, and their roles, who are involved in the review of charter applications. Review of charter applications shall be conducted pursuant to the requirements of the Open Meetings Act, KRS 61.800 et seq.

(11)

An authorizer shall not approve a charter application that does not meet the requirements of KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8.

(12)

Within five (5) days of the authorizer's approval, the authorizer shall submit an approved charter application to the commissioner of education.

Section 5.

Standards of Authorizer Performance Concerning Charter Contracts.

(1)

Prior to negotiating a charter contract with a board of directors, an authorizer shall verify the charter school board of directors' registration as a non-profit business entity with the Kentucky Secretary of State pursuant to KRS Chapter 14A.

(2)

An authorizer shall negotiate and enter a charter contract with a charter school board of directors in compliance with KRS 160.1590(4) and (5); 160.1591(2); 160.1592(3), (7), (8), (9), (10), (11), and (20); 160.1593(3); 160.1594(1); 160.1596(1); 160.1597(1), (2), and (6); and 160.1598(1), (5), (6), and (7).

(3)

An authorizer shall include pre-opening requirements or conditions in the charter contract as follows:

(a)

An authorizer shall establish mutually agreed upon pre-opening requirements or conditions to:

1.

Monitor the start-up progress of a newly approved public charter school;

2.

Ensure that the charter school is prepared to open timely and smoothly on the date agreed; and

3.

Ensure that the charter school meets all benchmarks related to facilities, health, safety, insurance, school personnel, enrollment, curriculum and instruction, operations and fiscal management, governance, and other legal requirements for the charter school opening; and

(b)

Failure by the charter school to comply with the pre-opening requirements or conditions may result in the immediate revocation of the charter contract and:

1.

May result in the delay in the opening of the charter school by up to one (1) year if the authorizer does not determine that the charter school is more likely than not to close during the school year; or

2.

Shall result in the delay in the opening of the charter school by up to one (1) year if the authorizer does determine that the charter school is more likely than not to close during the school year.

(4)

An authorizer shall include in the charter contract with the charter school board of directors provisions for charter school financial solvency and sustainability, including:

(a)

A requirement that no member of the charter school board of directors, no education service provider, and no charter school employee shall knowingly recommend and no member of the charter school board of directors shall knowingly vote for an expenditure in excess of the charter school's income and revenue of any fiscal year, as shown by the budget adopted by the charter school board of directors and approved by the authorizer;

(b)

A requirement that a member of the charter school board of directors, an education service provider, or a charter school employee who knowingly expends or authorizes the expenditure of charter school funds or who knowingly authorizes or executes any employment, purchase, or contract, in violation of this section, shall be jointly and severally liable in person and upon any official fidelity bond given to the authorizer to the extent of any payments on the void claim; and

(c)

A requirement that, if at any time during any fiscal year of the charter school's existence, a member of the charter school board of directors, an education service provider, or a charter school employee knows or reasonably should know that the charter school has or will become unable to pay in full its projected expenses as they fall due, the charter school shall immediately so advise the department and the authorizer, and shall provide the department and the authorizer with all financial information relating to revenues and expenses of the charter school necessary for the department and the authorizer to determine the extent and cause of any potential operating deficit. If the member of the charter school board of directors, the education service provider, or the charter school employee fails to provide the notice to the department and the authorizer required by this subsection or fails to cooperate with the department and the authorizer in the production of financial information pursuant to this subsection:

1.

The authorizer shall determine if grounds exist to revoke the charter contract; and

2.

The knowingly acting member of the charter school board of directors, the education service provider, or the charter school employee may be subject to the liability established in paragraph(b) of this subsection.

(5)

An authorizer shall include in the charter contract the specific, exclusive reasons and timelines for closure initiated by the charter school board of directors and the closure protocol and policies and procedures applicable to closure of the charter school.

(6)

An authorizer shall require in the charter contract the closure requirements of KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8.

(7)

An authorizer shall require in the charter contract that the charter school shall not prohibit a student from attending and shall not unenroll or withdraw a student unless the charter school has complied with KRS 158.150.

(8)

An authorizer shall require in the charter contract that the charter school board of directors maintain separate accountings of all funds received and disbursed by each charter school under the charter school board of directors.

(9)

An authorizer shall require in the charter contract that any contract the charter school board of directors enters with an education service provider has to be approved by the authorizer prior to execution and that any contract the charter school board of directors enters with an education service provider shall comply with the following:

(a)

Clearly establish the primacy of the charter contract over the contract between the charter board of directors and the education service provider;

(b)

Clearly identify the charter school board of directors as the party ultimately responsible for the success or failure of the charter school, and clearly define the education service provider as a vendor of services;

(c)

Prohibit the education service provider from selecting, approving, employing, compensating, or serving as members of the charter school board of directors;

(d)

Require the charter school board of directors to directly select, retain, and compensate the charter school's legal counsel, finance staff, audit firm, and school leader;

(e)

Provide for payments to the charter school to be made to an account controlled by the charter school board of directors, not the education service provider;

(f)

Require all instructional materials, furnishings, and equipment purchased or developed with charter school funds be the property of the charter school, not the education service provider;

(g)

Identify and describe the roles and responsibilities of the charter school board of directors and the education service provider, including all services to be provided under the contract between the charter school board of directors and the education service provider;

(h)

Identify and describe the performance measures and consequences by which the charter school board of directors shall hold the education service provider accountable for performance, aligned with the performance measures in the charter contract;

(i)

Identify and describe with specificity all compensation to be paid to the education service provider, including all fees, bonuses, and the conditions, consideration, and restrictions on the compensation;

(j)

Identify and describe the terms of any facility agreement that may be part of the relationship between the charter school board of directors and the education service provider;

(k)

Identify and describe financial reporting requirements and provisions for the charter school board of directors' financial oversight of the education service provider and the charter school;

(l)

Identify and describe all other financial terms of the contract, including disclosure and documentation of all loans or investments by the education service provider to the charter school board of directors, and provision for the disposition of assets upon closure in accordance with KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8;

(m)

Include assurances that the charter school board of directors, at all times, shall maintain independent fiduciary oversight and authority over the charter school budget and ultimate responsibility for the charter school's performance;

(n)

Include provisions for contract termination without penalties for the charter school and without costs beyond the pro-rated value of the services provided by the education service provider;

(o)

Assure:

1.

That the charter school board of directors shall be structurally independent from the education service provider and shall set and approve charter school policies;

2.

That the terms of the contract between the charter school board of directors and the education service provider are reached through arm's-length negotiations in which the charter school board of directors is represented by legal counsel that does not also represent the education service provider; and

(p)

Identify and describe the respective responsibilities of the charter school board of directors and the education service provider in the event of school closure.

(10)

An authorizer shall prohibit a charter school board of directors, in the charter contract, from delegating the charter school board of directors' responsibilities in subsection (9) of this section to the education service provider.

Section 6.

Standards of Authorizer Performance Concerning Charter School Monitoring.

(1)

An authorizer that determines a charter school board of directors has governance over more than one (1) charter school and has failed to meet the requirements of KRS 160.1592, shall commence an investigation to determine if the charter school board of directors is in compliance with the charter contracts for every other charter school under the authorizer's jurisdiction.

(2)

An authorizer shall monitor the performance of the charter contract by a charter school board of directors, and any educational service provider. If the authorizer believes there is an issue with any aspect of performance of the charter contract, or compliance with any of the requirements of KRS 160.1590 to 160.1599, 161.141, or 701 KAR Chapter 8, the authorizer shall commence an investigation.

(3)

An authorizer that verifies an issue with any aspect of performance of the charter contract, or compliance with any of the requirements of KRS 160.1590 to 160.1599, 161.141, or 701 KAR Chapter 8, shall notify the commissioner of education and may request assistance from the commissioner of education in addressing and remedying the issue.

(4)

An authorizer that verifies an issue with any aspect of the performance of the charter contract, or compliance with any of the requirements of KRS 160.1590 to 160.1599, 161.141, or 701 KAR Chapter 8, shall notify the charter school of the issue and take necessary action, including unilateral imposition of conditions on the charter school, revocation, or nonrenewal of the charter contract, to resolve the issue and to provide notice of the issue and the resolution to the charter school's adult students, emancipated youth students, parents, persons with custody or charge, and the department.

(5)

An authorizer shall at least monthly review the financial budget reports of the charter school and take the following action:

(a)

If the budget projections indicate that the charter school's annual operating expenses may at any time during the school year cause the annual operating expenses to exceed ninety-eight (98) percent of the total projected annual operating revenues included in the school's approved budget, the charter school shall provide specific notice of this to the authorizer and the authorizer shall:

1.

Require the charter school to implement a cash management plan approved by the authorizer;

2.

Commence a more in-depth review, and an audit if necessary, of the charter school's financial budget reports, expenditures, and revenues;

3.

Request financial management assistance for the charter school from the department; and

4.

Restrict the charter school's expenditures and require the authorizer's approval prior to expenditure of charter school funds for the remainder of the school year; and

(b)

If the charter school defaults on a financial obligation or if the authorizer otherwise suspects the charter school may close prior to the end of the school year or the charter contract term, the authorizer shall:

1.

Consult with the commissioner of education;

2.

Communicate with the charter school board of directors to determine the need for charter contract revocation;

3.

Commence actions under paragraph (a) of this subsection;

4.

Review the closure protocol;

5.

Review the charter contract termination provisions;

6.

Communicate with the charter school board of directors regarding the closure protocol and contract provisions for termination; and

7.

Notify students and resident local school districts, as soon as necessary to ensure all students and resident local school districts are provided adequate time to prepare for the student transitions and to provide free and appropriate public education to any returning students.

(6)

An authorizer shall revoke the charter contract and determine the timeline for closure if the authorizer determines the charter school:

(a)

Is financially insolvent;

(b)

Is financially unsustainable for the remainder of the school year or the charter contract term; or

(c)

Has violated or threatened the health and safety of the students of the public charter school, pursuant to KRS 160.1598(7).

(7)

The department shall develop a charter contract performance framework that an authorizer may utilize in developing a charter contract performance framework. In addition to the requirements of KRS 160.1596, the authorizer's charter contract performance framework shall include academic, financial, and organizational performance frameworks, and targets in the following areas:

(a)

Student assessment and accountability;

(b)

Student graduation rates;

(c)

Student promotion rates;

(d)

Student attendance rates;

(e)

Student admission and enrollment in postsecondary institutions; and

(f)

Other outcomes.

Section 7.

Standards of Authorizer Performance Concerning Charter Approval, Revocation, Renewal, and Nonrenewal.

(1)

An authorizer shall not approve a charter application, contract with, or renew a contract with a charter school board of directors for a charter school that:

(a)

Does not operate:

1.

A breakfast program under the Child Nutrition Act of 1966, 42 U.S.C. 1773, as amended (CNA), and a lunch program under the Richard B. Russell National School Lunch Act, 42 U.S.C. 1751 et seq. (NSLA); or

2.

A breakfast and lunch program with provision of meals at no cost to students who qualify for free meals under the CNA and NSLA and with the provision of meals at a reduced cost to students who qualify for reduced price meals under the CNA and NSLA; or

(b)

Does not provide initial and continuing evidence and assurances of the charter school's financial solvency and financial sustainability, as demonstrated initially by the financial plan in the charter application, to cover the expenses of start-up or conversion, operation, and any foreseen or unforeseen closure of the charter school during the fiscal year or during the contract term.

(2)

An authorizer shall require for approval of a charter application, for contracting with a charter board of directors, for performance of a charter contract, and for renewal of a charter contract, the following:

(a)

Inclusion of at least two (2) local school district resident parents or persons with custody or charge of local school district resident students who will attend the charter school in a charter school board of directors;

(b)

Exercise by a charter school board of directors of their authority in KRS 160.1592(3)(p)4 and 5 only as allowed for a local board of education in KRS 160.540;

(c)

Participation of all members of a charter school board of directors in annual training, approved by the commissioner of education, on topics of charter school governance and operation including financial governance and transparency; conflict of interest; curriculum and instruction; educational services provided for special needs, at risk, English learner, gifted, and other special population students; physical restraint and seclusion of students; and ethics. Fulfillment of this requirement shall occur through:

1.

Twelve (12) hours of annual training for a new charter school board member or a member with zero to eight (8) years of experience as a charter school board member and eight (8) hours for a charter school board member with more than eight (8) years of experience as a charter school board member; or

2.

Competency-based annual training;

(d)

Attendance by the authorizer, or its designee for authorizing, or at least one (1) member of the authorizer's board of directors at any due process hearing conducted pursuant to KRS 158.150 to suspend or expel a charter school student. A charter school board of directors, with the consent of the parent, person with custody or charge, adult student, or emancipated youth student, and as otherwise allowed by confidentiality laws, may invite the resident local district superintendent to attend the due process hearing and to provide information to the charter school board of directors as to the educational services the resident local school district would provide the student:

1.

If the student is expelled from the charter school; and

2.

If the charter school board of directors determines, on the record and supported by clear and convincing evidence, that the charter school cannot provide or assure that educational services are provided to the student in an appropriate alternative program or setting because the expelled student posed a threat to the safety of other students or school staff and could not be placed into a state-funded agency program;

(e)

Provision, to the authorizer by the charter school board of directors and any education service provider, of information and copies of all records of use of the Individual with Disabilities Education Act dispute resolution procedures, 707 KAR 1:340, regarding a student attending a charter school or the services provided by a charter school;

(f)

Provision, to the authorizer by the charter school board of directors and any education service provider, of information and copies of all records of use of physical restraint or seclusion of charter school students;

(g)

Provision, to the authorizer by the charter school board of directors and any education service provider, of information and copies of all records of allegations received or substantiation of violation of any health, safety, civil rights, and disability rights of students, staff, or parents or persons with custody or charge;

(h)

Pursuant to KRS 160.1592(14), adherence by the charter school board of directors, and any education service provider, to the requirements of KRS 160.330 and 702 KAR 3:220 for the waiver of fees for students eligible for free or reduced price lunch;

(i)

Provision, to the authorizer and to the public by the charter school board of directors and any education service provider, updates on the charter school's performance of the charter contract, according to the charter contract and performance framework;

(j)

Restriction on expenditure of charter school resources and funds for school purposes only;

(k)

Prohibition on the expenditure of charter school resources and funds in excess of the fair market value of the product, service, or consideration received;

(l)

Prohibition on the disposal of charter school resources for less than the fair market value of the resource disposed;

(m)

Restriction on the addition or moving of any location of the charter school without the written consent of the authorizer and amendment of the charter contract; and

(n)

Provision, to the authorizer by the charter school board of directors and any education service provider, of student enrollment and attendance records and data at least monthly during the school year.

(3)

An authorizer shall revoke, effective at the end of the school year, a charter contract for any of the reasons in KRS 160.1598(6).

(4)

An authorizer shall require continuous enrollment at a charter school of at least eighty (80) percent of the charter contract minimum student enrollment requirements and shall monitor and take action as follows if that minimum is not met:

(a)

The charter school shall provide reports to the authorizer on student enrollment and attendance at least twice a month; and

(b)

Failure of the charter school to maintain this continuous, minimum student enrollment shall result in an immediate review by the authorizer of:

1.

The charter school's operations;

2.

The charter school's financial solvency;

3.

The charter school's financial sustainability through the end of the school year and the end of the charter contract term;

4.

The potential for closure;

5.

Violation of the charter contract; and

6.

The need for imposition of unilateral conditions, amendment, nonrenewal, or revocation of the charter contract, or immediate revocation of the charter contract pursuant to KRS 160.1598(7).

(5)

An authorizer shall not approve a charter application for a start-up public charter school or conversion charter school if the applicant or proposed member of the board of directors has been previously found to have knowingly violated the requirements for interscholastic athletic activity sanctioned by the Kentucky Board of Education or its designated agency, and the authorizer shall ensure compliance with this requirement as follows:

(a)

The authorizer shall consult with the Kentucky Board of Education's designated agency to ensure compliance with this requirement;

(b)

The Kentucky Board of Education's designated agency may provide copies of its relevant written reports described in 702 KAR 7:065 Section 3(17) to the authorizer; and

(c)

If the authorizer does determine a member of the applicant or the proposed board of directors has previously been found to have knowingly violated the requirements for interscholastic athletic activity sanctioned by the Kentucky Board of Education or its designated agency, the authorizer may only approve a charter application, contract with, or renew a charter for a start-up public charter school or conversion charter school that does not sponsor interscholastic athletic activities, unless the charter school's sponsorship of interscholastic athletic activities is approved by the Kentucky Board of Education.

(6)

An authorizer shall remove a member of a board of directors that has been convicted of a crime described in KRS 61.040 and remove any or all of the members of the board of directors of the public charter school in connection with ensuring a smooth and orderly closure when the member or members threaten the health, safety, civil rights, or disability rights of the students or the community pursuant to KRS 160.1598(11).

(7)

An authorizer shall revoke or nonrenew a charter school contract if the commissioner of education has determined a member of the board of directors, or an education service provider at the direction of a member of the board of directors, or an employee at the direction of a member of the board of directors, has knowingly violated 703 KAR 5:080, Administration Code for Kentucky's Assessment Program or KRS 160.1592(3)(g), for a student assessment included in:

(a)

The performance framework of the charter contract; or

(b)

The state accountability system.

(8)

For issues in a charter school's performance that do not require immediate action by the authorizer, as stated in KRS 160.1590 to 160.1599, and 701 KAR Chapter 8, or otherwise to protect the health, safety, civil rights, disability rights, and well-being of students and the community, an authorizer may utilize a progressive system of monitoring consequences including notices of deficiencies or conditions unilaterally imposed on the charter school prior to revocation or nonrenewal. An authorizer shall share publicly a notice of deficiency or a condition unilaterally imposed on the charter school as well as the underlying charter school performance issue and shall provide a copy to the commissioner of education and to the Kentucky Board of Education.

(9)

An authorizer shall comply with the following prior to approving a charter application for a charter school or renewing a charter school contract:

(a)

Holding in the resident local school district a public hearing to allow for public comment on the charter application; and

(b)

Allowing public comment to be submitted in writing prior to the hearing, or oral or written public comment at the hearing and allowing comment at the public hearing by a resident superintendent who has filed an objection to the charter application.

Section 8.

Standards of Authorizer Performance Concerning Charter Closure.

(1)

An authorizer's charter school closure protocol shall include the following:

(a)

Provision, to the authorizer by the charter school, of contact information and resident local school district information for all parents, persons with custody or charge, adult students, and emancipated youth students;

(b)

Notification to all parents, persons with custody or charge, adult students, and emancipated youth students of:

1.

The closure decision;

2.

The closure process;

3.

Information on student instruction and reassignment;

4.

Information on courses, levels, and credits completed by the student;

5.

Information on the process for obtaining a copy of the student's education records; and

6.

Contact information for additional information;

(c)

Notification to the resident local school districts and the department of:

1.

The closure decision;

2.

The closure date;

3.

The closure process;

4.

Availability and timeline for appeals and their intersection with the closure protocol;

5.

A copy of the notification provided to charter school parents, persons with custody or charge, adult students, and emancipated youth students;

6.

Information on student instruction and reassignment; and

7.

Contact information for additional information;

(d)

Budget review and revision to limit expenditures to only those in the approved budget required for fulfilling the obligations through closure;

(e)

Communication of the budget information to parents, persons with custody or charge, adult students, emancipated youth students, resident local school districts, the department, and the Kentucky Board of Education;

(f)

Meeting of the authorizer with the charter school board of directors and charter school employees to notify and coordinate:

1.

The closure;

2.

The closure process;

3.

The closure timeline and dates;

4.

Information on student instruction and reassignment;

5.

Employment, payroll, and benefits information;

6.

Transfer of federal and state funds and assets according to the federal and state requirements; and

7.

Contact information for additional information;

(g)

Additional and final notification to parents and resident local school districts, including:

1.

Information on the existence and role of any appeal of the closure;

2.

Identifying the last student attendance day;

3.

Detailing end of the year activities and transition activities for students; and

4.

Providing information and assistance for reassignment of students;

(h)

Procedures and requirements for establishment of transition teams, development of closure plan, and assignment of roles for closure;

(i)

Procedures and requirement for scheduling closure meetings with the transition team, parents, persons with custody or charge, adult students, emancipated youth students, resident local school districts, the department, and employees;

(j)

Procedures and requirements for a final report from the charter school board of directors to the authorizer and the department detailing completion of the closure plan;

(k)

Maintenance of the charter school facilities;

(l)

Identification and notification of all creditors and debtors of the board of directors and the Teachers' Retirement System and the County Employees Retirement System;

(m)

Notification of federal, state, local, and private grantors;

(n)

Termination of any contract with an education service provider;

(o)

Accounting, inventory, and protection of assets;

(p)

Notification of employee benefit providers;

(q)

Notification of all contractors and termination of all contracts;

(r)

Transfer of student and personnel records;

(s)

Notification of the IRS;

(t)

Issuance of final grades to students;

(u)

Dissolution of the charter school;

(v)

Maintenance of records; and

(w)

Completion of an independent final audit within six (6) months of the closure of the charter school that may function as the annual audit, and that includes at least:

1.

An accounting of all financial assets, including cash and accounts receivable and an inventory of property, equipment, and other items of material value;

2.

An accounting of the liabilities, including accounts payable and any reduction in apportionments as a result of audit findings or other investigations, loans or grants, and unpaid staff compensation; and

3.

An assessment of the disposition of any restricted funds received by or due to the charter school.

(2)

An authorizer's charter school closure protocol shall include the following regarding distribution of assets upon closure:

(a)

The assets of the charter school, if sufficient to satisfy all the outstanding debts of the charter school, shall be distributed in the following order:

1.

To satisfy outstanding payroll obligations for employees of the public charter school;

2.

To creditors of the charter school; and

3.

To the resident local school districts, in direct proportion to the percentage of the charter school student body that will be returning to each resident local school district after closure;

(b)

If the assets of the public charter school are insufficient to satisfy all debts of the charter school, the prioritization of the distribution of assets may be determined by a court of law; and

(c)

A charter school board of directors shall distribute its assets within six (6) months of closure of the charter school, unless granted an extension by the authorizer or ordered otherwise by a court of law.

(3)

The commissioner of education, upon request by the authorizer, may appoint an independent third-party, paid from the charter school's funds, to manage the closure with assistance from the department. The commissioner of education may remove an appointed independent third-party for cause and appoint a replacement.

(4)

The department shall develop a charter closure protocol guide that an authorizer may utilize in developing the closure protocol.

Section 9.

Investigation of an Authorizer.

(1)

The Kentucky Board of Education shall conduct a special review of an authorizer as follows:

(a)

If there is persistently unsatisfactory performance of the portfolio of the public charter schools of the authorizer;

(b)

If there is a pattern of well-founded complaints about the authorizer or its public charter schools; or

(c)

If the Kentucky Board of Education finds other objective circumstances warranting investigation.

(2)

The Kentucky Board of Education shall request investigation by the commissioner of education.

(3)

In reviewing and evaluating the performance of an authorizer, the Kentucky Board of Education shall apply nationally recognized standards for quality in charter authorizing, in addition to the standards of performance included in KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8.

(4)

If at any time the Kentucky Board of Education determines that an authorizer is not in compliance with an existing charter contract or the requirements for an authorizer, the Kentucky Board of Education shall either:

(a)

Notify the authorizer in writing of any identified problem and the authorizer shall have a reasonable opportunity to respond and remedy the problem; or

(b)

If deemed necessary, take action against the authorizer under Section 10.

Section 10.

Consequences.

(1)

The Kentucky Board of Education may, in addition to its authority over authorizers and their action on a charter application, renewal, nonrenewal, revocation, charter amendment, or unilateral imposition of conditions on a charter school pursuant to KRS 160.1595(2), place an authorizer on probation and require the following during probation of an authorizer:

(a)

Additional training for the authorizer;

(b)

Meeting with the commissioner of education to provide status reports and solicit feedback on charter school performance during a charter contract;

(c)

Written and in-person status reports to the Kentucky Board of Education on the authorizer's monitoring of charter schools and other authorizing activity;

(d)

Approval by the commissioner of education on the authorizer's monitoring activities, imposition of unilateral conditions, and revocation decisions;

(e)

Approval of the Kentucky Board of Education for any renewal, nonrenewal, revocation, charter amendment, or unilateral imposition of conditions on a charter contract; and

(f)

Any other consequences the Kentucky Board of Education deems necessary to ensure compliance with KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8.

(2)

The Kentucky Board of Education shall establish the length and extent of the probation of the authorizer's authority and reporting requirements for the authorizer to report on the progress of the charter schools authorized by the authorizer.

(3)

The Kentucky Board of Education shall state in its order probating the authority of the authorizer:

(a)

The extent of the probation of the authorizer's authority;

(b)

The length of the probation of the authorizer's authority;

(c)

The grounds under KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8 for the probation of the authorizer's authority; and

(d)

The anticipated changes that would have to occur for the Kentucky Board of Education to consider ending the probation of the authorizer's authority under KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8.

(4)

The Kentucky Board of Education may entertain a request by the authorizer for termination of the probation if the authorizer submits, at least forty-five (45) days prior to the Kentucky Board of Education's regular meeting, the following:

(a)

The authorizer's request for ending the probation; and

(b)

The authorizer's evidence of:

1.

Its efforts to correct the grounds for the probation of its authorizing authority;

2.

The changes required in the Kentucky Board of Education's order; and

3.

Its plan to ensure future compliance with the requirements of KRS 160.1590 to 160.1599, 161.141, and 701 KAR Chapter 8.

Section 11.

Incorporation by Reference.

(1)

The following material is incorporated by reference:

(a)

"Kentucky Charter School Application and Addendum", October 2022; and

(b)

"Notice of Intent", February 2018.

(2)

This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Department of Education, Office of Legal Services, 300 Sower Boulevard, 5th Floor, Frankfort, Kentucky, Monday through Friday, 8 a.m. to 4:30 p.m.
HISTORY: (44 Ky.R. 1177, 1552, 1835; eff. 3-9-2018; 47 Ky.R.180, 719; eff. 1-5-2021; TAm eff. 4-7-2021; 49 Ky.R. 1158, 1928’; eff. 7-5-2023.)
FILED WITH LRC: March 7, 2023
CONTACT PERSON: Todd G. Allen, General Counsel, Kentucky Department of Education, 300 Sower Boulevard, 5th Floor, Frankfort, Kentucky 40601, phone 502-564-4474, fax 502-564-9321, email regcomments@education.ky.gov.

7-Year Expiration: 7/5/2030

Last Updated: 7/5/2023

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