Transparency in Charter School Spending Act

Summary: The Transparency in Charter School Spending Act requires charter schools to comply with open meetings and public records laws, disclose salaries and large contracts, and report potential conflicts of interest.

This model is based largely on Michigan House Bill 5852 (2014). A much more detailed model bill is available from the National Education Policy Center (NEPC) here, and there’s an excellent policy discussion of the subject from NEPC here.

SECTION 1. SHORT TITLE

This Act shall be called the “Transparency in Charter School Finance Act.”

SECTION 2. PURPOSE

This law is enacted to ensure that the public knows how public funds are being spent by charter schools.

SECTION 3. TRANSPARENCY

After section XXX, the following new section XXX shall be inserted:

(A) Open Meetings and Public Records – A charter school and the board of directors that governs the charter school are subject to the [Public Records Act, citation].

(B) Salaries and contracts – In addition to the requirements of [public records act citation], the charter school shall disclose for every fiscal year:

  1. Salaries and other payments made to each charter school employee;
  2. If individuals who work in the charter school are paid through a contract between the school and a third party, the salaries and other payments made to each such individual from the third party;
  3. The amounts and a description of contract payments that exceed $10,000; and
  4. The amounts of any payments received by the charter school, including grants, donations and contract payments, and an explanation of those payments.

(C) Potential conflicts of interest – If a charter school makes payments to any business entity that exceeds $1,000 in any fiscal year, the charter school shall disclose if any of its directors, officers or employees, or any member of their family, have a financial interest in such business. For purposes of this subsection:

  1. “family” means spouse, parents, siblings and children or the parents, siblings or children of a spouse; and
  2. “financial interest” means an officer, director, employee or contractor of the business, or the business owner or co-owner, except for the ownership of publicly-traded stock equaling less than ten percent (10%) of the company.

SECTION 4. EFFECTIVE DATE

This law shall become effective on July 1, 20XX.

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