Venturesome Capital- State Charter School Finance Systems

Generally a state education agency sea applies to the

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Unformatted text preview: rs use the funding for the planning, design and implementation of charter schools. Generally, a state education agency (SEA) applies to the federal government for the funds, which are awarded on a competitive basis. Charter school developers then apply to the state for the sub-grant. If a state application is rejected, or does not apply, charter schools apply directly to the federal government. In Arizona, for example, new and prospective charter school operators apply directly to the federal government even though Arizona has more charter schools than any other state.32 32 Under the original state legislation, Arizona created a “stimulus fund” earmarked for start-up and facility costs. The upper limit for state start-up grants was up to $100,000, but the average grant size was $21,000. The state legislature has not appropriated state start-up funds since 1997. In 1995, Arizona received a threeyear federal start-up grant. After the initial grant period, the state chose not to reapply for this federal startup grant in response to a court case brought by the Bureau of Indian Affairs (BIA) against the state. The BIA-funded schools challenged a state statute that authorizes the state to deduct federal start-up funding from the basic state aid for BIA-funded schools. The state won the case. State-authorized charter schools now apply directly to the federal government for start-up funds. Under some district contracts, however, the district applies on behalf of the charter schools, whereas in other authorizing districts individual charter schools apply separately. 56 Start-Up Assistance Federal start-up grants, which are awarded for a period of up to three years, are restricted to certain kinds of expenditures. Qualifying expenditures include refinement of the desired educational results and the methods for measuring those results; implementation costs; informing the community about the charter school; and acquiring the necessary equipment, materials, supplies and other operational needs that cannot be met from state and local revenues. By helping to cover costs charter schools would have faced without federal funding, the start-up funding also helps charter schools establish fund balances and relieves pressure on the general operations budget. Of the 24 states with charter schools open in 1997-98, 20 states obtained start-up grants. The SEA determines eligibility requirements in order to make subgrants to authorized public chartering agencies in partnership with local developers of charter schools. SEAs also establish guidelines for distributing funds and annual reporting requirements. Typically, reporting requirements consist of an annual progress report that includes budget information and progression toward goals. Participating SEAs can keep up to 5 percent of the total grant to account for administrative costs. In many states, the 5 percent holdback provides the major source funding for state charter school offices. Three main types of allocation processes have emerged from the states. In some states, P...
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This note was uploaded on 02/11/2013 for the course ECON 101 taught by Professor Smith during the Spring '09 term at Harvard.

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