Ariz. Admin. Code § 7-5-509

Current through Register Vol. 30, No. 50, December 13, 2024

Section R7-5-509 - Financial Intervention Submissions

A. The Board shall require a charter holder assigned a summative financial performance rating of "Intervention" under R7-5-402(F) to submit the attestation required under R7-5-402(F), quarterly financial reports and a June 30 quarterly financial report. The charter holder shall be required to submit quarterly financial reports, including the June 30 quarterly financial report, to the Board until the Board receives the charter holder's next audit conducted under R7-5-504.

B. Board staff shall provide written notice to a charter holder that is assigned a summa-tive financial performance rating of "Intervention" under R7-5-402(F). Board staff shall ensure the notice includes the following:

1. Information on how to access the charter holder's financial performance dashboard,

2. The deadline, which will be set 30 days from the date of the written notice, for submitting the attestation required under R7-5-402(F), and

3. The quarterly financial report(s), including, if applicable, the June 30 quarterly financial report, that must be submitted to the Board and the submission deadline, which will be set 30 calendar days from the date of the written notice.

a. If the written notice date is between October 1 and December 31, the charter holder must address the quarter ending September 30.

b. If the written notice date is between January 1 and March 31, the charter holder must address the quarters ending September 30 and December 31.

c. If the written notice date is between April 1 and July 15, the charter holder must address the quarters ending September 30, December 31 and March 31.

d. If the written notice date is after July 15, the charter holder must address the quarters ending September 30, December 31, March 31 and June 30.

C. If the first quarterly financial report or reports submitted in response to the written notice provided under subsection (B) supports that the charter holder has cured the default, then the charter holder shall be removed from the intervention process if the default measure was the only measure for which the charter holder received a rating of "below standard" based on the most recent audit conducted under R7-5-504.

D. Within 30 calendar days after receiving the first quarterly financial report or reports submitted in response to the written notice provided under subsection (B), Board staff shall provide the charter holder with written notice that includes the following:

1. The quarterly financial report requirements and submission deadlines;

2. Any differences identified between the calculations included by the charter holder in its quarterly financial report or reports and those completed by Board staff; and

3. If applicable, the determination made under subsection (C).

E. The submission deadlines for quarterly financial reports, including the June 30 quarterly financial report, submitted subsequent to the quarterly financial report(s) reviewed under subsection (D) are as follows:

1. October 30 for the quarter ending September 30;

2. January 30 for the quarter ending December 31;

3. April 30 for the quarter ending March 31; and

4. August 15 for the quarter ending June 30.

F. For each quarterly financial report submitted subsequent to the quarterly financial report(s) reviewed under subsection (D) and prior to the June 30 quarterly financial report and for each quarterly financial report submitted subsequent to the June 30 quarterly financial report pursuant to subsection (A), Board staff shall determine the charter holder's current performance and compare Board staff's results to the charter holder's calculation results. Within 30 calendar days of each quarterly financial report's receipt, Board staff shall notify the charter holder in writing of:

1. The submission deadline for the next quarterly financial report; and

2. Any differences identified between the calculations completed by the charter holder and those completed by Board staff.

G. For each charter holder that submitted a June 30 quarterly financial report, Board staff shall determine whether:

1. The going concern measure received a rating of "below standard" on the most recent audit conducted under R7-5-504.

2. The measure or measures rated "below standard" based on the most recent audit conducted under R7-5-504 will likely improve to at least an "approaches standard" rating or remain rated "below standard" when calculations are completed using the charter holder's next audit conducted under R7-5-504.

3. One or more of the Financial Performance Framework's other measures will likely be rated "below standard" when calculations are completed using the charter holder's next audit conducted under R7-5-504.

4. The charter holder was required to submit a corrective action plan under R7-5-504(H)(1) based on the most recent audit conducted under R7-5-504 for failure to pay taxes or contributions due to the Internal Revenue Service, Arizona Department of Revenue, Arizona Department of Economic Security or Arizona State Retirement System, failure to have sufficient cash at June 30 to cover the charter holder's unspent Classroom Site Fund balance, or failure to maintain worker's compensation insurance or liability insurance.

5. The Board has substantiated in the audited fiscal year, subsequent fiscal year or both any complaint involving late payroll checks to employees, health insurance or liability insurance cancellation due to nonpayment or failure to make required retirement plan contributions, or the Board has received in the audited fiscal year, subsequent fiscal year or both notification from the Arizona State Retirement System of delinquent retirement contributions.

6. The charter holder has been required to make at least one submission under R7-5-501(C) in the audited fiscal year, subsequent fiscal year or both.

7. Within the most recent five-year period the charter holder has been assigned three summative financial performance ratings of "Intervention."

H. Within 45 calendar days after receiving a June 30 quarterly financial report, Board staff shall notify the charter holder in writing of:

1. The determinations made by Board staff under subsection (G);

2. The submission deadline for the next quarterly financial report required under subsection (A); and

3. Any differences identified between the calculations completed by the charter holder and those completed by Board staff.

I. The charter holder's attestation required under R7-5-402(F), quarterly financial reports and June 30 quarterly financial report shall be made publicly available through the charter holder's financial performance dashboard.

J. If a charter holder fails to submit or fails to timely submit a quarterly financial report or June 30 quarterly financial report required under subsection (A), Board staff shall note the failure on the charter holder's operational performance dashboard. The charter holder may be subject to charter oversight as specified in Article 6.

K. If a charter holder fails to submit a complete quarterly financial report or June 30 quarterly financial report required under subsection (A) by the specified deadline, Board staff shall:

1. Provide written notice to the charter holder that includes the reason for the finding and identifies the one-day deadline by which a complete quarterly financial report or June 30 quarterly financial report must be received to avoid charter oversight as specified in Article 6.

2. Note the failure identified in subsection (K) on the charter holder's operational performance dashboard.

Ariz. Admin. Code § R7-5-509

New section made by final rulemaking at 23 A.A.R. 693, effective 5/6/2017. Amended by final exempt rulemaking at 25 A.A.R. 1926, effective 7/8/2019. Amended by final exempt rulemaking at 26 A.A.R. 3245, effective 11/20/2020. Amended by final exempt rulemaking at 27 A.A.R. 1423, effective 9/30/2021. Amended by final exempt rulemaking at 28 A.A.R. 3492, effective 10/17/2022.