Appendix B - Recommended Recordkeeping/Accounting Practices

Appendix B: Recommended Recordkeeping and Accounting Practices for Charter Schools

Recordkeeping:

Charter schools should retain all pertinent accounting, allocation, and enrollment/attendance records supporting reported data for a minimum of seven years following the end of each school year. Information relating to the acquisition of fixed assets, equipment, land or building improvements, and any related financing arrangements and grants must be retained as long as the facility is used by the charter school if this period exceeds seven years.

Documentation to substantiate costs will be required for completion of annual financial audits. Recommended documentation includes but is not limited to:

1.	Payroll
	Compensation costs should be based on payrolls that are approved and documented. Payroll should be supported by employee time records prepared during, not after, the time period for which the employee was paid. Employee time sheets should be signed by the employee and a supervisor, and must be completed at least monthly.
2.	Consultants
	Documentation for consultant related expenses should include, but is not limited to, the consultant's résumé, a written contract which includes the nature of the services to be provided, the charge per day, and service dates.
	Requests for proposals (RFP) or other bidding documentation should be kept on file by the school.
3.	Purchases
	All purchases should be supported with invoices listing items purchased and indicating date of purchase and date of payment, as well as canceled checks. When applicable, competitive bidding practices should be used in conformance with the School Business Management Handbook. Copies of the handbooks may be obtained by writing to the State Education Department, Education Management Services, 89 Washington Avenue, Room 876 EBA, Albany, New York 12234 or you may call (518) 474-6541.
4.	Travel
	Logs should be kept for each employee indicating dates of travel, destination, purpose, mileage, and related costs such as tolls, parking, and gasoline.
5.	Attendance Records
	Daily attendance records should be maintained indicating whether each student is present or absent and summarized monthly. In addition, individual student files should be maintained and kept current.
6.	Contractual Agreements
	All contractual agreements (e.g., leases) should be in writing signed and dated.
7.	Liabilities
	Long-term payables (e.g., mortgage and loans) should be supported with amortization schedules, the signed and dated mortgage/loan agreements and evidence of payments made. The acquired assets related to each loan should be identified as well as the program(s) utilizing each of these assets.
	Working capital loans and lines of credit borrowings should be supported with the written agreement, loan data and amounts of borrowings and repayments, applicable interest rates for each borrowing, and documentation supporting the necessity for the loan borrowed amount.
8.	Equipment and Furniture
	Inventory records, including the invoice, should be kept for all items purchased by the charter school. These records should list: the invoice number; a description of the item; the make, model, or serial number of the item; cost; date of purchase; date retired; and the location. For donated items, inventory records should identify the item as donated, listing the date of donation and the fair market value of the item at the time of donation.
9.	Vehicles
	Records should include date purchased, cost, make, model, vehicle identification number, and year of the vehicle. If vehicles were rented or leased, a copy of the agreements or leases should be retained.
	Vehicle use should be documented with individual vehicle logs that include at a minimum: the date, time of travel, to and from destinations, mileage between each, purpose of travel, and name of traveler. If the vehicle was assigned to an employee, also list the name of the employee to whom it was assigned. The annual mileage and repairs and maintenance costs for each vehicle should be summarized and maintained.
10.	Buildings
	Records for buildings and land owned by the charter school should describe the buildings and land owned. Records should include a copy of the purchase agreement, deed, any mortgages, and the amortization schedule for such mortgages. All related information should be retained as long as an approved charter school uses the facility even if this period exceeds seven years.
11.	Building Improvements
	Records should include the date work was completed, a description of the improvement, including location (i.e., floor, rooms), the cost, the program(s) that benefited, the share of costs allocable to each program and the basis for allocation. Detailed bills from the person or business doing the work are acceptable records.

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Accounting Requirements:

1.	Charter schools should maintain accounts in accordance with generally accepted accounting principles.
2.	Charter schools should maintain accounting books of original entry and shall include asset, liability and fund balance or equity accounts, as well as expenditure and revenue accounts.
3.	The financial statements, prepared in accordance with generally accepted accounting principles, must be certified by a licensed or certified public accountant independent of the school. In instances where a school retains a licensed or certified public accountant or accounting entity to certify the school's financial statements and the CPA also provides other non-audit services such as management consulting, automation consulting or bookkeeping services, the provision of these services must be fully disclosed via explanatory notes to the audited financial statements. Related party transactions must also be disclosed via explanatory notes to the annual audited financial statements.
4.	Charter schools must adhere to all applicable sections of the General Municipal Law.

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