Charter Schools

Forming a Public School Academy

Who may apply for a charter?

Any parent, group or entity may apply for a public school academy charter, which are governed by publicly-appointed boards.

What are the first steps in starting a PSA?

To become a public school academy, you need to be chartered by the Board of an authorizer. In Michigan, an “authorizing body” means:

• any public university,
• community college,
• K-12 local education agency,
• or intermediate school district.

However, not all potential authorizers take advantage of this opportunity. A current authorizer list is available at the highlighted link.

This does not preclude you from requesting a potential authorizer in your area to consider you as an applicant. At this time there is still a cap imposed on the number of charter schools that public universities may authorize. There is no cap imposed on any other type of authorizers.

Information regarding “Steps to Starting a Charter School” can be accessed via the United States Department of Education, Charter Schools website.

Topics covered are numerous and include:

• Developing a Mission Statement
• Accountability: Standards, Assessment & Using Data
• Budget, Finance, and Fundraising
• Educational Program Design
• Facilities
• Family-Friendly Charter Schools
• Governing Boards
• Human Resources: Staffing for Success
• Legal Issues
• Special Education Resources
• Resources for Charter-Granting Agents
• National Association of Charter Authorizers

What law governs the establishment and operation of a PSA?

In Michigan, Public Act 362 of 1993 originally added the authorization of public school academies. Sections 380.501 through 380.507 of the Revised School Code, is the statute governing public school academies.

What should be contained in a contract issued to organize and administer a PSA?

Please refer to the Contract Checklist and the suggested “Best Practices.”

How do we report immunization on the students in our academy?

If it is a new PSA, then you must report on all students. If your PSA has been open for more than a year, report on the entrants. For more information on this topic, please contact Jacquelyn Perigo at 517/335-9387.

If a student is enrolled in a PSA during a particular school year, does the student have to be part of the random selection if the PSA exceeds its enrollment number the following school year?

No, a student is automatically granted enrollment privileges for succeeding school years. Siblings of admitted students are granted enrollment priority.

Does a PSA have to use certified teachers?

Certification requirements for PSA teachers are identical to those of local school district teachers.  Special exceptions are made for a PSA that is operated by a state university or community college that may wish to use collegiate staff to teach PSA students (refer to Section 380.505).

May a PSA be religiously affiliated?

No. A PSA must maintain the separation between church and state. If a PSA is utilizing a building that has religious symbols present, they must be removed or covered.

May private schools become PSA’s?

Private schools may become PSA’s only if they are reconstituted as public entities and accept the duties and responsibilities of becoming a public school academy.

Does a PSA qualify for state and federal grant funds in the same manner as a local school district?

Yes, a PSA may access state and federal grants in the same manner as local school districts. Various factors apply to the eligibility of academies and school districts to apply for grants. The Michigan Department of Education publishes a report entitled “Report of Grants Available,” made available to PSAs and local school districts.

Must all state and federal education dollars be sent directly to the authorizing body of the PSA?

No. The law requires that payments under the State School Aid Act be sent directly to the authorizing bodies. A PSA may receive federal grant funds directly from the Michigan Department of Education by following the same procedures that local school districts are required to follow.

I have heard that there are federal charter school dollars to help start an academy. Is this true?

Yes. There are three possible grants available for new academies. Grants are awarded to the Public School Academy Program (PSAP) from the federal Public Charter Schools office. The PSAP office then makes this grant money available to those academies that are in their first 36 months as an academy. In Michigan, you must be “authorized” and contract elements received before the MDE/PSAP releases grant funds. The PSAP has set a total of $150,000 per grant.

This, of course, is contingent upon MDE receiving federal grant dollars. The federal statute that accompany the grant require strict and full adherence to the PCSP “single grant standard.” This “single grant” provision says that if you receive a grant under this “planning phase” you are eligible for up to an additional twenty-four months of continuation funding during the thirty-six (36) months of total allowable funding.

Must I compete for all three grants?

No. You only compete once. However, you do need to apply for each available grant.

I have heard there is a dissemination grant available with federal charter school dollars for public school academies. How can I qualify for that?

Yes, there are dissemination grants available. All academies that have been open and serving students for a minimum of three complete school years may apply for this competitive grant.

Therefore, if you are in your fourth year of serving students you may apply for this grant.  Please refer to the USDOE website or the MDE/PSAP website for additional information.

Is the dissemination grant a competitive grant?

Yes, the dissemination grant is a competitive grant. If you are successful competing for this grant you may only be awarded a dissemination grant once.

What are the major responsibilities of an authorizing body?

Pursuant to Section 380.502(4): “An authorizing body shall oversee, or shall contract with an  intermediate school district, community college, or state public university to oversee, each public  school academy operating under a contract issued by the authorizing body. The oversight shall be sufficient to ensure that the authorizing body can certify that the public school academy is in compliance with statute, rules, and the terms of the contract.”¹ These oversight duties include:

• Thoroughly reviewing the applicant’s educational plan. The plan must address the educational needs of the students, curriculum goals and objectives, teaching methods, and student assessment.²
• Determining if all fire, safety, and health codes are met.
• Reviewing and approving the PSA bylaws.
• Developing a description of the methods to be used to monitor the PSA’s compliance with applicable law and its performance in meeting its targeted educational objectives.
• Developing a description of the process for amending the contract during the term of the contract.
• Setting and enforcing the terms of the authorizing contract, including adopting a resolution establishing the method of selection, length of term, and number of members of the board of directors of the PSA.
• Within 10 days after issuing a PSA contract, a PSA contract must be submitted to the state superintendent.

A contract with a PSA may be revoked by the authorizing body if one or more of the following occurs: failure of the PSA to meet the education goals set forth in the contract; failure of the PSA to comply with applicable law; failure of the PSA to meet generally accepted sector accounting principles; or other grounds for revocation specified in the contract.

Additional powers granted to authorizing bodies in the Revised School Code, Section 380.507, include:

Acting as fiscal agent for the PSA—the state school aid payment for the PSA is paid to the authorizing body that is the fiscal agent for the PSA, which then forwards the payment, less 3 percent, to the PSA.

Is a PSA considered a constituent district in intermediate school districts levying area vocational education millage, and do PSA students have access to the programs and services provided with those funds?

            ¹“If the state board finds that an authorizing body is not engaging in appropriate continuing oversight of one or more public school academies operating under a contract issued by the authorizing body, the state board shall suspend the power of the authorizing body to issue new contracts to organize and operate public school academies. A contract issued by the authorizing body during the suspension is void.  A contract issued by the authorizing body before the suspension is not affected by the suspension.” [MCL 380.502(5)]

            ²The Revised School Code states that to the extent applicable, pupils shall be assessed using at least a Michigan education assessment program (MEAP) test or an assessment instrument developed under section 1279 for a state-endorsed high school diploma. [MCL 380.502(3)(e)(ii)]

Yes, just as with any other public school district located in the intermediate school district.
Services must be allocated to a PSA on the same proportional basis used for other constituent districts.

Is a PSA eligible for categorical vocational education state aid payments?

Yes. As with all other public school districts, the program must meet the guidelines and be approved by Career Development, Office of Career and Technical Preparation at 517/373-3373.

Where do I get information about vocational education program approval?

Contact Career Development, Office of Career and Technical Preparation at 517/373-3373 or at their website.

What are the common responsibilities of Public School Academies to the Michigan Department of Education as they relate to financial reporting?

Public school academies are required to follow a common fiscal year. That year begins July 1 and ends June 30 of the following calendar year (MCL 380.1133).

Public school academies are required to follow generally accepted accounting principles for governmental entities. The Michigan School Accounting Manual addresses many of these and should be used as a reference. Specific questions related to school accounting issues may be directed to public school finance staff at 517/335-0524.

Public school academies are required to follow a uniform chart of accounts. The chart of accounts is found in the Michigan School Accounting Manual Section 380.1281(c) of the Revised School Code requires the Michigan Department of Education to:

“Prescribe appropriate uniform pupil and finance accounting records for use in school districts, public school academies, and intermediate school districts and promulgate rules for their adoption.”

In addition, the Administrative Code Rules governing Financial Accounting Systems for public schools (R 340.852) states:

“The charts of accounts prescribed and published by the department of education [ Michigan School Accounting Manual] shall be used by all local and intermediate school districts….”

Public school academies are to submit an annual comprehensive financial report, “Form B,” using the chart of accounts prescribed in the Michigan School Accounting Manual. The report is submitted electronically, and is filed with MDE by November 15 of each year. The penalty for noncompliance is the withholding of state school aid payments. See Section 388.1618(3) and (5) of the State School Aid Act.

Public school academies are required to have an audit of their financial accounting records conducted at least annually by certified public accountant. The audit reports are filed with MDE no later than November 15 of each year. Guidance for the audit is given in the Michigan School Auditing Manual. The penalty for noncompliance is the withholding of state school aid payments. See Section 388.1618(2) and (5) of the State School Aid Act. For further information, contact audit staff at 517/373-4591.

All PSA financial audits are subject to Government Auditing Standards (GAS). The pamphlet describing the standards is for sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20401, stock number 020-000-00243-3.

PSA boards shall adopt a budget prior to the commencement of the fiscal year, using the minimum levels of appropriation described in the Michigan School Accounting Manual (section IV of the Michigan School Accounting Manual).

Public school academies are not to adopt or operate under a “deficit budget” (State School Aid Act, MCL 388.1702. MDE closely monitors entities that violate this statute. Public school academies should always seek competent legal counsel before entering into any binding legal or borrowing agreement.