827 Auditing of approved private schools and chartered schools for the education of deaf and blind children
DEPARTMENT
OF EDUCATION[ 22 PA. CODE CH. 171 ] Auditing of Approved Private Schools and Chartered Schools for the Education of Deaf and Blind Children [38 Pa.B. 2052]
[Saturday, May 3, 2008]The Secretary of Education (Secretary) proposes to amend Chapter 171 (relating to standards for approved private schools) to read as set forth in Annex A.
Statutory Authority
The Secretary acts under the authority of sections 1376(c.8) and 1376.1(f.5) of the Public School Code of 1949 (code) (24 P. S. §§ 13-1376(c.8) and 13-1376.1(f.5)), which were added by section 5 of the act of July 13, 2005 (P. L. 226, No. 46). Sections 1376(c.8) and 1376.1(f.5) of the code empower the Department of Education (Department) to promulgate standards for auditing of approved private schools and the four chartered schools for the education of the deaf and the blind (hereinafter collectively referred to as schools).
Purpose
The objective of these proposed audit standards is to ensure that revenues provided by the Commonwealth for approved students and the expenses of the schools have been presented appropriately in accordance with Generally Accepted Accounting Principles (GAAP). Interim standards were adopted on April 7, 2006. After a year under these interim standards, the Department was to prepare and propose final standards, which are the standards set forth in Annex A. The changes proposed to the interim standards are described as follows.
Section 171.202 (relating to general guidelines) is amended to limit the content of the independent auditors report to the approved private school program. This is because some approved private schools are components of larger organizations and the audits and reports governed by these standards do not encompass the entire corporate organization.
In §§ 171.206 and 171.207 (relating to administrative costs; and payments in excess of expenditures), the references to ''the PDE 4010 process'' have been replaced with the title of the form--the ''Application for Educational Assignment to Approved Private School''--to promote clarity of language. Also, subsection (a) of the interim standard has been deleted because it applies to prior fiscal years and is no longer relevant.
Fiscal Impact and Paperwork Requirements
The standards are necessary to ensure that the approved private schools and the chartered schools for deaf or blind children continue to receive predictable funding and to reform the audit structure, thereby enhancing each school's ability to focus on students and programs. The standards will neither increase costs to the schools, nor to the Commonwealth. These standards do not impose additional paperwork requirements.
Affected Parties
The standards affect the approved private schools and the chartered schools for deaf or blind children in this Commonwealth.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (act) (71 P. S. § 745.5(a)), on April 24, 2008, the Board submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House and Senate Committees on Education. A copy of this material is available to the public upon request.
Under section 5(g) of the act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Board, the General Assembly and the Governor of comments, recommendations or objections raised.
Effective Date
The proposed rulemaking will become effective upon publication of final-form rulemaking in the Pennsylvania Bulletin.
Sunset Date
The Department will review the effectiveness of Chapter 171 after 5 years. Thus, no sunset date is necessary.
Public Comments and Contact Person
Interested persons are invited to submit written comments, suggestions or objections regarding this proposal to Richard E. Brown, Director's Office, Bureau of Special Education, Department of Education, 333 Market Street, Harrisburg, PA 17126-0333, (717) 783-6906 within 30 days following publication in the Pennsylvania Bulletin.
GERALD L. ZAHORCHAK, D.Ed.,
Secretary(Editor's Note: Sections 171.203--171.205 are not proposed to be amended.)
Fiscal Note: 6-305. No fiscal impact; (8) recommends adoption.
Annex A TITLE 22. EDUCATION PART XII. BASIC EDUCATION CHAPTER 171. STANDARDS FOR APPROVED PRIVATE SCHOOLS Subchapter C. [INTERIM] AUDIT STANDARDS § 171.201. Purpose and applicability.
[(a)] The purpose of these audit standards is to ensure that revenues provided by the Commonwealth for students whose placement in the approved private school has been approved by the Department have been spent on the provision of education services, including residential services in some cases, to children who are residents of this Commonwealth and who have been approved by the Department under § 171.16 (relating to assignment).
[(b) These interim standards apply to audits conducted after July 1, 2005, and will apply until final standards are promulgated.]
§ 171.202. General guidelines.
An approved private school shall maintain an accounting and bookkeeping system in accordance with the following standards:
* * * * * (9) Reports of the independent auditors will be limited to the Approved Private School Program.
§ 171.206. Administrative costs.
* * * * * (b) Costs or expenses related to the following functions are considered as administrative and are subject to the 10% administrative cap except when and to the extent that the costs or expenditures are incurred as a result of providing educational services to children who are residents of this Commonwealth and who have been approved by the Department through [the PDE-4010 process] Application for Educational Assignment to Approved Private School. To the extent that the following costs are for educational services, they are not subject to the administrative cap and are reported in the schedule of operating expenses:
* * * * * § 171.207. Payments in excess of expenditures.
[(a) If the amount of reportable costs in 2004-05 is less than the amount of revenues received by the schools for 2004-05 from the Commonwealth for the provision of educational services to children who have been approved through the PDE-4010 process, the difference may be retained by the school for use in 2005-06.
(b) Beginning in 2005-06, if] If the amount of reportable costs in a year is less than the amount of revenues received in that year by the school from the Commonwealth for the provision of educational services to children who have been approved through [the PDE-4010 process] Application for Educational Assignment to Approved Private School, the difference will be remitted to the Commonwealth by December 1 of each year. Those funds shall be deposited in the Audit Resolution Fund for the resolution of previous audits.
[Pa.B. Doc. No. 08-827. Filed for public inspection May 2, 2008, 9:00 a.m.]
