Standards for Charter Sponsorship

PURPOSE: This rule establishes the standards and indicators for charter sponsorship as required by the Missouri Department of Elementary and Secondary Education. These standards serve as the foundation for the sponsor application process as required by section 160.403, RSMo, and the evaluation process for sponsors required in section 160.400.17(1), RSMo. (1) Standard 1—Sponsor Commitment and Capacity. The sponsor believes that chartering is a means to provide children with access to quality public schools that meet identified needs. The sponsor creates organizational systems and structures to fulfill its sponsorship duties and commits human and financial resources necessary to conduct its sponsoring duties effectively and efficiently. The sponsor shall— (A) Ensure that all sponsorship staff and members of the sponsor’s decision-making body understand and are committed to supporting and advancing the purposes of Missouri’s charter school law and quality sponsorship practices; (B) Engage in the sponsorship of charter schools according to the provisions and stipulations of section 160.400.2–5, RSMo, which address the types of entities that may sponsor charter schools and under what conditions; (C) Employ, contract for, or otherwise provide personnel at a staffing level appropriate and sufficient to carry out its sponsorship duties, which require expertise that includes, but is not limited to, education leadership, curriculum, instruction, assessment, special education, federal programs, performance accountability, data analysis, law, finance, and nonprofit governance; AND SECONDARY EDUCATION (D) Provide or provide access to professional development opportunities for staff to achieve and maintain high standards of professional sponsoring practice and to promote continuous improvement; (E) Retain records showing that all individuals conducting sponsorship work, including any individual who has contact with students, complete a criminal background check and Missouri’s Family Care Safety Registry (FCSR) check as outlined in section 168.133.1, RSMo; (F) Ensure that sponsor staff and members of the sponsor’s decision-making body comply with the charter school office’s or the sponsor’s conflict of interest policy with respect to the charter schools it sponsors; (G) Regularly evaluate its work against Missouri’s charter school law and these standards, and develop and implement timely plans for improvement when it falls short; (H) Provide an annual report to the joint committee on education, as outlined in section 160.400.12, RSMo, that includes sufficient data and information to demonstrate that the sponsor is in material compliance with sections 160.400 to 160.425, RSMo, and section 167.349, RSMo; and (I) Annually submit, on the form provided by the Department of Elementary and Secondary Education (department), documentation showing that ninety percent (90%) of state funds expended during said fiscal year, are expended for sponsoring in support of the sponsor’s charter school sponsorship program or as a direct investment in the sponsored schools, in accordance with section 160.400.11, RSMo. (2) Standard 2—Application Process and Decision Making. The sponsor implements a comprehensive application process that includes clear application materials and guidance; follows fair, transparent procedures, timelines, and rigorous evaluation criteria; and approves only those charter applications that demonstrate a strong capacity to establish and operate quality charter schools. The sponsor shall— (A) Implement a thorough charter application process as outlined in section 160.400.11(2), RSMo, and according to the timeline outlined in section 160.405.2(1)–(4), RSMo, without requiring any fee from the applicant in accordance with section 160.400.6, RSMo; (B) Develop and make readily available a charter application that— 1. Includes comprehensive questions to elicit the information needed for a rigorous evaluation of the applicant’s plans and capacity in accordance with the requirements stated in section 160.405.1(1)–(17), RSMo; 2. Clearly articulates any chartering priorities the sponsor may have established, including the priority to serve high-risk students in accordance with section 160.405.2(5), RSMo; and 3. Includes clear criteria for the evaluation of charter applications; (C) Differentiate or supplement application requirements and corresponding evaluation criteria for applicants who currently oversee or manage charter schools in Missouri or other states; (D) For applicants that are existing school operators, ensure that the application requires— 1. Specific information about the existing operator’s prior academic achievement, particularly if the applicant has operated or is operating schools in Missouri, and successful management of nonacademic school functions, including financial and organizational performance, in accordance with section 160.415.7, RSMo; 2. An explanation of any never-opened, terminated, or non-renewed charter schools (including terminated or nonrenewed third-party contracts to operate charter schools) within the last five (5) years and other such requirements as outlined in section 160.415.7, RSMo; 3. A description of the existing school operator’s proposed growth plan; and 4. The operator’s most recent financial audits; (E) For applicants that intend to contract with an education service provider for substantial educational or charter school management services, ensure that the application requires— 1. A draft of the proposed management services agreement that sets forth proposed key terms, including roles and responsibilities of the charter school governing board, the charter school staff, and the service provider; the services to be provided; the measures by which the charter school governing board will evaluate the service provider; a detailed explanation of compensation to be paid to the service provider; financial controls and oversight; methods of contract oversight and enforcement; and conditions for contract renewal and termination; and 2. A disclosure and explanation of any existing or potential conflicts of interest between the charter school governing board and proposed service provider or any affiliated business entities; (F) Engage teams of qualified application evaluators with relevant educational, organizational (governance and management), financial, and legal expertise to review and evaluate the charter application according to the established evaluation criteria; (G) Provide orientation or training to application evaluators to ensure consistency in the application of the approval criteria; (H) Conduct an in-person interview with each qualified applicant to examine the applicant’s experience and capacity, and conduct due diligence to examine the applicant’s experience, capacity, and track record of performance; (I) Advise charter applicants of the meaning of local education agency (LEA) status as it concerns the operation of the charter school as outlined in section 160.415.4, RSMo; (J) Grant charters only to applicants that have demonstrated competence and capacity to succeed in all aspects of the school, with particular consideration to any available information about schools previously operated in Missouri, if applicable, and consistent with the published application evaluation criteria, in accordance with sections 160.400.11(2) and 160.405.2(2), RSMo; (K) Promptly notify applicants of approval or denial and, if the charter is denied, notify the applicant in writing explaining the factors that determined the decision in accordance with section 160.405.2(3), RSMo; and (L) Submit an electronic copy of each approved charter, accompanied by a statement finding that the application meets the statutory requirements and the monitoring plan under which the sponsor will evaluate the academic performance of the charter school, to the department for review by November 10th (or the next business day if November 10th falls on a Saturday or Sunday) of the year prior to the proposed opening date of the charter school as outlined in and in accordance with section 160.405.3, RSMo. (3) Standard 3—Charter Contract. Charter contract is defined as a document, executed by the sponsor and the school, which is separate from the charter application that clearly articulates the rights and responsibilities of each party regarding charter school autonomy, expected outcomes, measures for evaluating success or failure, performance consequences based on the annual performance report, and other material terms. In accordance with section 160.400.11(3), RSMo, the sponsor executes a charter contract with each charter school that articulates the rights and responsibilities of each party regarding: school autonomy, funding, administration and oversight, outcomes, the measures for evaluating success or failure, performance consequences, and other material terms. The sponsor shall— (A) Execute a charter contract with each approved charter school, which must be organized as a Missouri nonprofit corporation, for an initial term of five (5) years, which may be renewed, in accordance with section 160.405.1(9), RSMo. The charter contract shall define— 1. The standards for intervention, probation, renewal, non-renewal, and revocation while also establishing the consequences for not meeting those standards, in accordance with sections 160.405.8 and 160.405.9(2)–(3) RSMo; 2. A set of reasonable pre-opening requirements or conditions for a new charter school to open to ensure that it meets all health, safety, and other legal requirements prior to opening; and 3. A process that charter schools and sponsors must follow, in accordance with section 160.405.6, RSMo, to amend charter contracts and the types of material modifications that require sponsor approval. The sponsor shall submit any such approved amendments to the department within thirty (30) days of approval; (B) Include in said charter contract or incorporate by reference clearly defined performance expectations for the term of the contract, the sources of data to evaluate charter school performance against these expectations, and the targets that the charter school must meet to earn renewal in the following areas: 1. Pupil academic standards for all students and significant student subgroups within each charter school, aligned to standards adopted by the State Board of Education, as outlined in and in accordance with sections 160.405.1(7), 160.405.4(6), and 160.405.9(2)(a), RSMo; 2. Financial performance expectations, which measure both near-term and long-term financial health, including, but not limited to, those outlined in section 160.405.9(2)(b), RSMo; and 3. Organizational performance expectations, including, but not limited to, compliance with all governance-related laws, the fulfillment of all state and federal requirements regarding fair and appropriate service to students with disabilities, and the maintenance of a safe and operationally sound facility, as outlined in sections 160.405.4 and 160.405.11– 14, RSMo; (C) If a charter school is planning to contract with an education service provider for substantial educational or school management services, ensure that the charter contract clearly establishes the primacy of the charter contract over the management services contract; and (D) To the extent the sponsor, outside of the charter school office, is providing any fee-based services to its charter schools, clearly state in writing, in the charter contract or elsewhere, that such services are not, nor ever will be, a condition of sponsorship. (4) Standard 4—Ongoing Oversight and Evaluation. The sponsor conducts charter school oversight that evaluates charter school performance; monitors charter school compliance with both federal and state statutes and regulations; ensures charter school autonomy; protects student rights; informs charter school intervention, probation, revocation, and renewal decisions; and provides annual public reports on charter school performance. The sponsor shall— (A) Implement a comprehensive performance accountability and compliance monitoring system that— 1. Is defined in the charter contract; 2. Provides the sponsor with the information necessary to make thorough and evidence-based intervention, probation, renewal, non-renewal, and revocation decisions; and 3. Effectively streamlines federal, state, and local performance expectations and compliance requirements while protecting charter school autonomy and minimizing charter school administrative and reporting burdens; (B) Define and communicate this performance accountability and compliance monitoring system to charter schools, including the process, methods, and timing of gathering and reporting charter school performance and compliance data; (C) Visit each charter school as appropriate and necessary for collecting data that cannot otherwise be obtained and in accordance with the contract, while ensuring that the frequency, purposes, and methods of such visits respect charter school autonomy and avoids operational interference; (D) Communicate regularly with charter schools, as needed, including both school leaders and governing boards, and provide timely notice of contract violations, performance deficiencies, and mandated interventions, including probationary status, as outlined in section 160.405.8, RSMo; (E) In accordance with section 160.405.7, RSMo, evaluate and publish on the sponsor’s website an annual performance report for each charter school, which shall include an analysis of each charter school’s performance and progress toward meeting the expectations and targets stated in the charter contract, including subgroup performance and essential compliance requirements, and clearly communicate evaluation results to the charter school’s governing board and leadership; (F) Refrain from directing charter school decisions or choices that are appropriately within a school’s purview under the charter law or contract; (G) Monitor compliance with all state and federal requirements and guidelines regarding services to students, including, but not limited to, special education; all title programs; career and technical education; food service; and services for foster, homeless, immigrant, and English language learner students; (H) Monitor compliance with specific state public education requirements that apply to charter schools, including, but not limited to— 1. Requirements relating to student discipline as outlined in sections 160.261, 167.161, 167.164, and 167.171, RSMo; 2. Notification of criminal conduct to law enforcement authorities as outlined in sections 167.115-117, RSMo; 3. Academic assessment of pupils, including that all eligible students participate in the Missouri Assessment Program (MAP), as outlined in section 160.518, RSMo; 4. Transmittal of charter school records to a requesting school official as outlined in section 167.020, RSMo; 5. Provision of the minimum amount of school time required as outlined in section 171.031, RSMo; 6. For charter school employees and board members, timely completion of criminal history background checks and the family care safety registry checks as outlined in section 168.133, RSMo; 7. Maintenance of policies consistent with the Family Educational Rights and Privacy Act (FERPA) and the Health AND SECONDARY EDUCATION Insurance Portability and Accountability Act (HIPAA) guidelines to the extent they are applicable; 8. Certification of staff and participation in the appropriate employee retirement system as outlined in section 160.420, RSMo; and 9. Provision of education and services to students with disabilities, as outlined in sections 162.670 and 162.710, RSMo, the Individuals with Disabilities Education Act (20 U.S.C. Section 1400) and Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Section 794) or successor legislation; (I) Verify that charter schools admit students through a nondiscriminatory process that grants admission to resident and non-resident students eligible to attend through an urban voluntary transfer program or from an unaccredited school district, as outlined in sections 160.410.1 and 160.410.3, RSMo; (J) Monitor the admission process of any charter school where capacity is insufficient to enroll all students who submit a timely application, to ensure that the process complies with the terms outlined in section 160.410.2, RSMo; (K) Monitor the charter school board’s compliance with various governance-related laws, including, but not limited to— 1. Retention of necessary board records as required by the general record retention schedule and the public school record retention schedule as outlined in section 109.255, RSMo; 2. Submission of financial interest statements annually as outlined in sections 105.483, 105.485, and 105.492, RSMo; 3. Maintenance of conflict of interest policies and procedures to address prohibited conflicts as outlined in section 160.400.15, RSMo; 4. Maintenance of a policy to promptly address parent or guardian grievances, as outlined in section 160.405.1(13), RSMo; and 5. Conduct of board and committee business in a manner outlined in the Missouri Sunshine Laws, sections 610.010610.030, RSMo; and (L) Ensure that charter school board members are aware of and have access to professional development or training opportunities to perform and fulfill the duties of a charter school board member. (5) Standard 5—Fiscal Oversight. The sponsor monitors the charter school’s financial performance and compliance with fiduciary provisions in statute. The sponsor shall— (A) Collect and review annual financial audits of charter schools, conducted by a qualified independent auditor as outlined in section 160.405.4(4), and verify that the annual audit summary is published as outlined in section 165.121.5, RSMo; (B) Monitor that charter schools’ utilization of the coding procedures prescribed in the Missouri Financial Accounting Manual as outlined in section 160.405.1(10), RSMo; (C) Monitor that the charter’s governing board has adopted adequate financial controls to assure that revenues received for operation of the charter school are expended for expenses related to the operation of the charter school, including, but not limited to— 1. Procedures for the charter board to review the monthly check register, as needed, and clarify what level of expenditure necessitates board review and signature on a specific check; 2. Establishment of a bank account, in which state funds are deposited, that is under the control of the charter board; and 3. If the charter contracts with an education service provider for substantial educational or school management services, establishment of a process to ensure that payments to the service provider receive prior approval of the governing board or its designee, as outlined in section 160.415.7(6), RSMo; (D) Evaluate each charter school’s financial performance against the expectations and targets stated in the charter contract and, by October 1st of each year, identify any charter schools that are financially stressed, as outlined in section 160.417.1, RSMo, and as defined by section 160.417.2, RSMo; (E) By November 1st of each year, notify the governing board of any charter school that is identified as financially stressed, and review and approve a budget and education plan developed by the charter school, within forty-five (45) calendar days of such notification, on forms provided by the sponsor. In addition to the requirements outlined in section 160.417.3, RSMo, the budget and education plan must clearly outline the basis for such identification, the steps the charter school will take to remedy the financial stress, responsible individuals, corresponding deadlines and timeframes, the outcomes that the charter school must achieve to exit this designation, and the steps that the sponsor may take, including revocation, if the charter school does not appropriately remedy the financial stress by March 1st of the current school year. The sponsor may also place any school identified as financially stressed on probation in accordance with section 160.405.8, RSMo. The department may withhold any payment of financial aid due to the charter school until the charter school and sponsor have fully complied with this requirement, as outlined in section 160.417.5, RSMo; (F) To the extent necessary, cooperate with the department in its monitoring of charter schools’ fiscal management of federal grant programs, and consider any findings by the department with respect to said fiscal management in sponsor’s decision making; and (G) Ensure that charter schools submit the Annual Secretary of the Board Report (ASBR) and an annual independent financial audit to the department in the timeframe outlined by Missouri statute and verify that no conflict of interest exists between the financial auditor and the person or persons who prepared the ASBR as outlined in 160.417 and 162.821, RSMo. (6) Standard 6—Renewal, Replication, Expansion, Revocation, and Closure Decision Making. The sponsor implements a transparent and rigorous process that uses comprehensive academic, financial, and organizational performance data to make decisions about renewal, replication, expansion, revocation, and closure. The sponsor shall— (A) Base the renewal process and renewal decisions on thorough analyses of a comprehensive body of objective evidence defined by the charter contract consistent with section 160.405.9(2)–(3), RSMo; (B) Provide each charter school, in advance of the renewal decision, a cumulative performance report that summarizes the charter school’s performance record over the charter term in accordance with the performance expectations set forth in the charter contract, and states the sponsor’s summative findings concerning charter school performance and its prospects for renewal; (C) Grant renewal to charter schools that have achieved the performance expectations and corresponding targets stated in the charter contract, are organizationally and fiscally viable, and have been diligent to the terms of the contract and applicable law, consistent with sections 160.400.11(5) and 160.405.9(2)-(3), RSMo; (D) To the extent the charter school qualifies for an expedited renewal process, as defined by section 160.405.9(2)(d), the sponsor shall implement a streamlined renewal process, which decreases the burden on the charter school (i.e., fewer application requirements, a more targeted document request, or a shorter renewal site visit) and the amount of time between submission of the renewal application and the sponsor’s decision; (E) Promptly notify in writing each charter school of the sponsor’s renewal or non-renewal decision, including explanation of the reasons for the decision; (F) In accordance with section 160.408, RSMo, provide “highquality charter schools,” as defined by section 160.408, RSMo, with opportunities for expedited replication and expansion; (G) Base decisions to approve additional charter school sites or to expand grade levels on thorough analyses of a comprehensive body of objective evidence defined by the charter contract; (H) Revoke a charter during the charter term if there is clear evidence of underperformance or violation of law or the public trust that imperils students or public funds as outlined in section 160.405.8, RSMo; (I) In the event of a revocation, provide charter schools written notice at least sixty (60) days prior to revoking the charter, as outlined in section 160.405.8(3), RSMo, and establish clear procedures to conduct an administrative hearing regarding the potential charter revocation, as outlined in section 160.405.8(4), RSMo; and (J) Maintain and implement a clear charter school closure process, including, but not limited to, clear procedures to ensure orderly transition of student records, archival of business operation, transfer of personnel records, submission of financial reports, resolution of financial obligations, disposition of charter school assets, and a notification plan to inform parents or guardians, among other stakeholders, of the closure action within thirty (30) days of the decision to close, as outlined in section 160.405.1(15), RSMo. AUTHORITY: sections 160.400–160.425, RSMo 2016 and RSMo Supp. 2018, and section 161.092, RSMo 2016.* Original rule filed Dec. 3, 2012, effective June 30, 2013. Amended: Filed Dec. 8, 2016, effective July 30, 2017. Amended: Filed Nov. 29, 2018, effective June 30, 2019. *Original authority: 160.400, RSMo 1998, amended 2005, 2009, 2012, 2016; 160.403, RSMo 2012, amended 2016; 160.405, RSMo 1998, amended 2005, 2009, 2012, 2016; 160.408, RSMo 2016; 160.410, RSMo 1998, amended 2005, 2009, 2012, 2016, 2018; 160.415, RSMo 1998, amended 1999, 2005, 2012, 2016; 160.417, RSMo 2012, amended 2016; 160.420, RSMo 1998, amended 2001, 2005, 2012; 160.425, RSMo 2012; and 161.092, RSMo 1963, amended 1973, 2002, 2003, 2013, 2014.