Amended IN Senate April 07, 2021 Amended IN Senate March 10, 2021 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 593Introduced by Senator GlazerFebruary 18, 2021An act to add Section 47612.8 to the Education Code, relating to charter schools.LEGISLATIVE COUNSEL'S DIGESTSB 593, as amended, Glazer. Nonclassroom-based charter schools: audit requirements.The Charter Schools Act of 1992 specifies the procedures for the submission, review, and approval or denial of a petition to establish a charter school. The act requires a petition for the establishment of a charter school to contain specified information, including a reasonably comprehensive description of the manner in which annual, independent financial audits will be conducted. Existing law, by not later than May 1 of each fiscal year, requires the governing board of each local educational agency to provide for an audit of the books and accounts of the local educational agency, as specified, or make arrangements with the county superintendent of schools to provide for that auditing. Existing law establishes a governing board to establish and administer a unit known as the County Office Fiscal Crisis and Management Team. Among other duties, this unit provides fiscal management assistance, at the request of any school district, charter school, county office of education, or community college district.The bill would require the County Office Fiscal Crisis and Management Assistance Team, Team (FCMAT), on or before July 1, 2022, to begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. The for auditors of nonclassroom-based charter schools, as defined. The bill would require this training to relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents. The bill would authorize FCMAT to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing this training.The bill would prohibit an independent auditor or a member of a charter school auditing team auditor of nonclassroom-based charter schools from performing any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training. The bill would require an independent auditor of a nonclassroom-based charter school, when performing certain audits, to comply with specified requirements. take certain actions, including the sampling of certain financial documents, the identification of transfers of funds or assets exceeding prescribed amounts, the identification of transactions defined as irregular in the training provided pursuant to the bill, and the preparation of a letter to be included with the audit report, as specified.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 47612.8 is added to the Education Code, to read:47612.8. (a) (1) On or before July 1, 2022, the County Office Fiscal Crisis and Management Assistance Team (FCMAT) shall begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. for auditors of nonclassroom-based charter schools. This training shall relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents.(2) An independent auditor and a member of a charter school auditing team An auditor of nonclassroom-based charter schools shall not perform any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training in training provided pursuant to paragraph (1).(3) FCMAT shall apply to have the training provided pursuant to paragraph (1) count toward continuing education requirements for auditors, provided that overall continuing education requirements for those auditors are not increased.(4) FCMAT shall be authorized to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing training pursuant to paragraph (1).(b) An independent auditor of a nonclassroom-based charter school, when performing an audit described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605, shall do all of the following:(1) (A) Contact a random sample sample, to be selected by the auditor, of parents or guardians of pupils, emancipated pupils, or other custodians of pupils enrolled in the charter school to verify their enrollment.(2)Review a random sample(B) As part of the random sample of documents selected and reviewed by the auditor under this subdivision, the sampling of credit card statements, debit card statements, other electronic payment methods and media, and bank statements of the charter school selected by the auditor to determine whether any potential use of school funds for nonschool purposes has occurred. shall be subject to an enhanced materiality standard deemed appropriate pursuant to the process described in Section 14502.1.(3)(2) Identify in the audit report any transfers of funds or assets to other individuals or organizations that exceed one million dollars ($1,000,000) and are either (A) not supported by adequate consideration, or (B) not dedicated to the exclusive benefit of the charter school and its pupils. or 10 percent of the charter schools budget, whichever is less, together with a written explanation from the school regarding the school purpose for each such expenditure.(3) Identify any other transaction that is irregular, as defined in the training provided pursuant to paragraph (1) of subdivision (a).(4) Include a letter with the audit report discussing any concerns or findings of the auditor relating to factors arising from the auditors activities under this subdivision, or arising from the lack of those factors, together with a response by the charter school if the charter school chooses to make a response.(c) For purposes of this section, nonclassroom-based section:(1) Auditor of a nonclassroom-based school means any certified public accountant assigned to a nonclassroom-based charter school audit, as described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605.(2) Nonclassroom-based charter school means a charter school that offers nonclassroom-based instruction pursuant to paragraph (2) of subdivision (e) of Section 47612.5 for more than 20 percent of the instructional time offered by the charter school.
Amended IN Senate April 07, 2021 Amended IN Senate March 10, 2021 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 593Introduced by Senator GlazerFebruary 18, 2021An act to add Section 47612.8 to the Education Code, relating to charter schools.LEGISLATIVE COUNSEL'S DIGESTSB 593, as amended, Glazer. Nonclassroom-based charter schools: audit requirements.The Charter Schools Act of 1992 specifies the procedures for the submission, review, and approval or denial of a petition to establish a charter school. The act requires a petition for the establishment of a charter school to contain specified information, including a reasonably comprehensive description of the manner in which annual, independent financial audits will be conducted. Existing law, by not later than May 1 of each fiscal year, requires the governing board of each local educational agency to provide for an audit of the books and accounts of the local educational agency, as specified, or make arrangements with the county superintendent of schools to provide for that auditing. Existing law establishes a governing board to establish and administer a unit known as the County Office Fiscal Crisis and Management Team. Among other duties, this unit provides fiscal management assistance, at the request of any school district, charter school, county office of education, or community college district.The bill would require the County Office Fiscal Crisis and Management Assistance Team, Team (FCMAT), on or before July 1, 2022, to begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. The for auditors of nonclassroom-based charter schools, as defined. The bill would require this training to relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents. The bill would authorize FCMAT to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing this training.The bill would prohibit an independent auditor or a member of a charter school auditing team auditor of nonclassroom-based charter schools from performing any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training. The bill would require an independent auditor of a nonclassroom-based charter school, when performing certain audits, to comply with specified requirements. take certain actions, including the sampling of certain financial documents, the identification of transfers of funds or assets exceeding prescribed amounts, the identification of transactions defined as irregular in the training provided pursuant to the bill, and the preparation of a letter to be included with the audit report, as specified.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
Amended IN Senate April 07, 2021 Amended IN Senate March 10, 2021
Amended IN Senate April 07, 2021
Amended IN Senate March 10, 2021
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Senate Bill
No. 593
Introduced by Senator GlazerFebruary 18, 2021
Introduced by Senator Glazer
February 18, 2021
An act to add Section 47612.8 to the Education Code, relating to charter schools.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 593, as amended, Glazer. Nonclassroom-based charter schools: audit requirements.
The Charter Schools Act of 1992 specifies the procedures for the submission, review, and approval or denial of a petition to establish a charter school. The act requires a petition for the establishment of a charter school to contain specified information, including a reasonably comprehensive description of the manner in which annual, independent financial audits will be conducted. Existing law, by not later than May 1 of each fiscal year, requires the governing board of each local educational agency to provide for an audit of the books and accounts of the local educational agency, as specified, or make arrangements with the county superintendent of schools to provide for that auditing. Existing law establishes a governing board to establish and administer a unit known as the County Office Fiscal Crisis and Management Team. Among other duties, this unit provides fiscal management assistance, at the request of any school district, charter school, county office of education, or community college district.The bill would require the County Office Fiscal Crisis and Management Assistance Team, Team (FCMAT), on or before July 1, 2022, to begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. The for auditors of nonclassroom-based charter schools, as defined. The bill would require this training to relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents. The bill would authorize FCMAT to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing this training.The bill would prohibit an independent auditor or a member of a charter school auditing team auditor of nonclassroom-based charter schools from performing any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training. The bill would require an independent auditor of a nonclassroom-based charter school, when performing certain audits, to comply with specified requirements. take certain actions, including the sampling of certain financial documents, the identification of transfers of funds or assets exceeding prescribed amounts, the identification of transactions defined as irregular in the training provided pursuant to the bill, and the preparation of a letter to be included with the audit report, as specified.
The Charter Schools Act of 1992 specifies the procedures for the submission, review, and approval or denial of a petition to establish a charter school. The act requires a petition for the establishment of a charter school to contain specified information, including a reasonably comprehensive description of the manner in which annual, independent financial audits will be conducted. Existing law, by not later than May 1 of each fiscal year, requires the governing board of each local educational agency to provide for an audit of the books and accounts of the local educational agency, as specified, or make arrangements with the county superintendent of schools to provide for that auditing. Existing law establishes a governing board to establish and administer a unit known as the County Office Fiscal Crisis and Management Team. Among other duties, this unit provides fiscal management assistance, at the request of any school district, charter school, county office of education, or community college district.
The bill would require the County Office Fiscal Crisis and Management Assistance Team, Team (FCMAT), on or before July 1, 2022, to begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. The for auditors of nonclassroom-based charter schools, as defined. The bill would require this training to relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents. The bill would authorize FCMAT to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing this training.
The bill would prohibit an independent auditor or a member of a charter school auditing team auditor of nonclassroom-based charter schools from performing any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training. The bill would require an independent auditor of a nonclassroom-based charter school, when performing certain audits, to comply with specified requirements. take certain actions, including the sampling of certain financial documents, the identification of transfers of funds or assets exceeding prescribed amounts, the identification of transactions defined as irregular in the training provided pursuant to the bill, and the preparation of a letter to be included with the audit report, as specified.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 47612.8 is added to the Education Code, to read:47612.8. (a) (1) On or before July 1, 2022, the County Office Fiscal Crisis and Management Assistance Team (FCMAT) shall begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. for auditors of nonclassroom-based charter schools. This training shall relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents.(2) An independent auditor and a member of a charter school auditing team An auditor of nonclassroom-based charter schools shall not perform any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training in training provided pursuant to paragraph (1).(3) FCMAT shall apply to have the training provided pursuant to paragraph (1) count toward continuing education requirements for auditors, provided that overall continuing education requirements for those auditors are not increased.(4) FCMAT shall be authorized to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing training pursuant to paragraph (1).(b) An independent auditor of a nonclassroom-based charter school, when performing an audit described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605, shall do all of the following:(1) (A) Contact a random sample sample, to be selected by the auditor, of parents or guardians of pupils, emancipated pupils, or other custodians of pupils enrolled in the charter school to verify their enrollment.(2)Review a random sample(B) As part of the random sample of documents selected and reviewed by the auditor under this subdivision, the sampling of credit card statements, debit card statements, other electronic payment methods and media, and bank statements of the charter school selected by the auditor to determine whether any potential use of school funds for nonschool purposes has occurred. shall be subject to an enhanced materiality standard deemed appropriate pursuant to the process described in Section 14502.1.(3)(2) Identify in the audit report any transfers of funds or assets to other individuals or organizations that exceed one million dollars ($1,000,000) and are either (A) not supported by adequate consideration, or (B) not dedicated to the exclusive benefit of the charter school and its pupils. or 10 percent of the charter schools budget, whichever is less, together with a written explanation from the school regarding the school purpose for each such expenditure.(3) Identify any other transaction that is irregular, as defined in the training provided pursuant to paragraph (1) of subdivision (a).(4) Include a letter with the audit report discussing any concerns or findings of the auditor relating to factors arising from the auditors activities under this subdivision, or arising from the lack of those factors, together with a response by the charter school if the charter school chooses to make a response.(c) For purposes of this section, nonclassroom-based section:(1) Auditor of a nonclassroom-based school means any certified public accountant assigned to a nonclassroom-based charter school audit, as described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605.(2) Nonclassroom-based charter school means a charter school that offers nonclassroom-based instruction pursuant to paragraph (2) of subdivision (e) of Section 47612.5 for more than 20 percent of the instructional time offered by the charter school.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 47612.8 is added to the Education Code, to read:47612.8. (a) (1) On or before July 1, 2022, the County Office Fiscal Crisis and Management Assistance Team (FCMAT) shall begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. for auditors of nonclassroom-based charter schools. This training shall relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents.(2) An independent auditor and a member of a charter school auditing team An auditor of nonclassroom-based charter schools shall not perform any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training in training provided pursuant to paragraph (1).(3) FCMAT shall apply to have the training provided pursuant to paragraph (1) count toward continuing education requirements for auditors, provided that overall continuing education requirements for those auditors are not increased.(4) FCMAT shall be authorized to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing training pursuant to paragraph (1).(b) An independent auditor of a nonclassroom-based charter school, when performing an audit described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605, shall do all of the following:(1) (A) Contact a random sample sample, to be selected by the auditor, of parents or guardians of pupils, emancipated pupils, or other custodians of pupils enrolled in the charter school to verify their enrollment.(2)Review a random sample(B) As part of the random sample of documents selected and reviewed by the auditor under this subdivision, the sampling of credit card statements, debit card statements, other electronic payment methods and media, and bank statements of the charter school selected by the auditor to determine whether any potential use of school funds for nonschool purposes has occurred. shall be subject to an enhanced materiality standard deemed appropriate pursuant to the process described in Section 14502.1.(3)(2) Identify in the audit report any transfers of funds or assets to other individuals or organizations that exceed one million dollars ($1,000,000) and are either (A) not supported by adequate consideration, or (B) not dedicated to the exclusive benefit of the charter school and its pupils. or 10 percent of the charter schools budget, whichever is less, together with a written explanation from the school regarding the school purpose for each such expenditure.(3) Identify any other transaction that is irregular, as defined in the training provided pursuant to paragraph (1) of subdivision (a).(4) Include a letter with the audit report discussing any concerns or findings of the auditor relating to factors arising from the auditors activities under this subdivision, or arising from the lack of those factors, together with a response by the charter school if the charter school chooses to make a response.(c) For purposes of this section, nonclassroom-based section:(1) Auditor of a nonclassroom-based school means any certified public accountant assigned to a nonclassroom-based charter school audit, as described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605.(2) Nonclassroom-based charter school means a charter school that offers nonclassroom-based instruction pursuant to paragraph (2) of subdivision (e) of Section 47612.5 for more than 20 percent of the instructional time offered by the charter school.
SECTION 1. Section 47612.8 is added to the Education Code, to read:
### SECTION 1.
47612.8. (a) (1) On or before July 1, 2022, the County Office Fiscal Crisis and Management Assistance Team (FCMAT) shall begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. for auditors of nonclassroom-based charter schools. This training shall relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents.(2) An independent auditor and a member of a charter school auditing team An auditor of nonclassroom-based charter schools shall not perform any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training in training provided pursuant to paragraph (1).(3) FCMAT shall apply to have the training provided pursuant to paragraph (1) count toward continuing education requirements for auditors, provided that overall continuing education requirements for those auditors are not increased.(4) FCMAT shall be authorized to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing training pursuant to paragraph (1).(b) An independent auditor of a nonclassroom-based charter school, when performing an audit described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605, shall do all of the following:(1) (A) Contact a random sample sample, to be selected by the auditor, of parents or guardians of pupils, emancipated pupils, or other custodians of pupils enrolled in the charter school to verify their enrollment.(2)Review a random sample(B) As part of the random sample of documents selected and reviewed by the auditor under this subdivision, the sampling of credit card statements, debit card statements, other electronic payment methods and media, and bank statements of the charter school selected by the auditor to determine whether any potential use of school funds for nonschool purposes has occurred. shall be subject to an enhanced materiality standard deemed appropriate pursuant to the process described in Section 14502.1.(3)(2) Identify in the audit report any transfers of funds or assets to other individuals or organizations that exceed one million dollars ($1,000,000) and are either (A) not supported by adequate consideration, or (B) not dedicated to the exclusive benefit of the charter school and its pupils. or 10 percent of the charter schools budget, whichever is less, together with a written explanation from the school regarding the school purpose for each such expenditure.(3) Identify any other transaction that is irregular, as defined in the training provided pursuant to paragraph (1) of subdivision (a).(4) Include a letter with the audit report discussing any concerns or findings of the auditor relating to factors arising from the auditors activities under this subdivision, or arising from the lack of those factors, together with a response by the charter school if the charter school chooses to make a response.(c) For purposes of this section, nonclassroom-based section:(1) Auditor of a nonclassroom-based school means any certified public accountant assigned to a nonclassroom-based charter school audit, as described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605.(2) Nonclassroom-based charter school means a charter school that offers nonclassroom-based instruction pursuant to paragraph (2) of subdivision (e) of Section 47612.5 for more than 20 percent of the instructional time offered by the charter school.
47612.8. (a) (1) On or before July 1, 2022, the County Office Fiscal Crisis and Management Assistance Team (FCMAT) shall begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. for auditors of nonclassroom-based charter schools. This training shall relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents.(2) An independent auditor and a member of a charter school auditing team An auditor of nonclassroom-based charter schools shall not perform any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training in training provided pursuant to paragraph (1).(3) FCMAT shall apply to have the training provided pursuant to paragraph (1) count toward continuing education requirements for auditors, provided that overall continuing education requirements for those auditors are not increased.(4) FCMAT shall be authorized to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing training pursuant to paragraph (1).(b) An independent auditor of a nonclassroom-based charter school, when performing an audit described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605, shall do all of the following:(1) (A) Contact a random sample sample, to be selected by the auditor, of parents or guardians of pupils, emancipated pupils, or other custodians of pupils enrolled in the charter school to verify their enrollment.(2)Review a random sample(B) As part of the random sample of documents selected and reviewed by the auditor under this subdivision, the sampling of credit card statements, debit card statements, other electronic payment methods and media, and bank statements of the charter school selected by the auditor to determine whether any potential use of school funds for nonschool purposes has occurred. shall be subject to an enhanced materiality standard deemed appropriate pursuant to the process described in Section 14502.1.(3)(2) Identify in the audit report any transfers of funds or assets to other individuals or organizations that exceed one million dollars ($1,000,000) and are either (A) not supported by adequate consideration, or (B) not dedicated to the exclusive benefit of the charter school and its pupils. or 10 percent of the charter schools budget, whichever is less, together with a written explanation from the school regarding the school purpose for each such expenditure.(3) Identify any other transaction that is irregular, as defined in the training provided pursuant to paragraph (1) of subdivision (a).(4) Include a letter with the audit report discussing any concerns or findings of the auditor relating to factors arising from the auditors activities under this subdivision, or arising from the lack of those factors, together with a response by the charter school if the charter school chooses to make a response.(c) For purposes of this section, nonclassroom-based section:(1) Auditor of a nonclassroom-based school means any certified public accountant assigned to a nonclassroom-based charter school audit, as described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605.(2) Nonclassroom-based charter school means a charter school that offers nonclassroom-based instruction pursuant to paragraph (2) of subdivision (e) of Section 47612.5 for more than 20 percent of the instructional time offered by the charter school.
47612.8. (a) (1) On or before July 1, 2022, the County Office Fiscal Crisis and Management Assistance Team (FCMAT) shall begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. for auditors of nonclassroom-based charter schools. This training shall relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents.(2) An independent auditor and a member of a charter school auditing team An auditor of nonclassroom-based charter schools shall not perform any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training in training provided pursuant to paragraph (1).(3) FCMAT shall apply to have the training provided pursuant to paragraph (1) count toward continuing education requirements for auditors, provided that overall continuing education requirements for those auditors are not increased.(4) FCMAT shall be authorized to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing training pursuant to paragraph (1).(b) An independent auditor of a nonclassroom-based charter school, when performing an audit described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605, shall do all of the following:(1) (A) Contact a random sample sample, to be selected by the auditor, of parents or guardians of pupils, emancipated pupils, or other custodians of pupils enrolled in the charter school to verify their enrollment.(2)Review a random sample(B) As part of the random sample of documents selected and reviewed by the auditor under this subdivision, the sampling of credit card statements, debit card statements, other electronic payment methods and media, and bank statements of the charter school selected by the auditor to determine whether any potential use of school funds for nonschool purposes has occurred. shall be subject to an enhanced materiality standard deemed appropriate pursuant to the process described in Section 14502.1.(3)(2) Identify in the audit report any transfers of funds or assets to other individuals or organizations that exceed one million dollars ($1,000,000) and are either (A) not supported by adequate consideration, or (B) not dedicated to the exclusive benefit of the charter school and its pupils. or 10 percent of the charter schools budget, whichever is less, together with a written explanation from the school regarding the school purpose for each such expenditure.(3) Identify any other transaction that is irregular, as defined in the training provided pursuant to paragraph (1) of subdivision (a).(4) Include a letter with the audit report discussing any concerns or findings of the auditor relating to factors arising from the auditors activities under this subdivision, or arising from the lack of those factors, together with a response by the charter school if the charter school chooses to make a response.(c) For purposes of this section, nonclassroom-based section:(1) Auditor of a nonclassroom-based school means any certified public accountant assigned to a nonclassroom-based charter school audit, as described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605.(2) Nonclassroom-based charter school means a charter school that offers nonclassroom-based instruction pursuant to paragraph (2) of subdivision (e) of Section 47612.5 for more than 20 percent of the instructional time offered by the charter school.
47612.8. (a) (1) On or before July 1, 2022, the County Office Fiscal Crisis and Management Assistance Team (FCMAT) shall begin offering training, updated each fiscal year, on the review of charter school financial documents to better understand how to identify fraudulent practices and documents for independent auditors and members of a charter school auditing team. for auditors of nonclassroom-based charter schools. This training shall relate to the review of charter school financial documents for a better understanding of the process of conducting an annual, independent financial audit and how to identify irregular practices and documents.
(2) An independent auditor and a member of a charter school auditing team An auditor of nonclassroom-based charter schools shall not perform any aspect of a nonclassroom-based charter school audit for the 202223 school year or thereafter before receiving the training in training provided pursuant to paragraph (1).
(3) FCMAT shall apply to have the training provided pursuant to paragraph (1) count toward continuing education requirements for auditors, provided that overall continuing education requirements for those auditors are not increased.
(4) FCMAT shall be authorized to charge training participants fees sufficient to cover the costs to FCMAT of developing and providing training pursuant to paragraph (1).
(b) An independent auditor of a nonclassroom-based charter school, when performing an audit described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605, shall do all of the following:
(1) (A) Contact a random sample sample, to be selected by the auditor, of parents or guardians of pupils, emancipated pupils, or other custodians of pupils enrolled in the charter school to verify their enrollment.
(2)Review a random sample
(B) As part of the random sample of documents selected and reviewed by the auditor under this subdivision, the sampling of credit card statements, debit card statements, other electronic payment methods and media, and bank statements of the charter school selected by the auditor to determine whether any potential use of school funds for nonschool purposes has occurred. shall be subject to an enhanced materiality standard deemed appropriate pursuant to the process described in Section 14502.1.
(3)
(2) Identify in the audit report any transfers of funds or assets to other individuals or organizations that exceed one million dollars ($1,000,000) and are either (A) not supported by adequate consideration, or (B) not dedicated to the exclusive benefit of the charter school and its pupils. or 10 percent of the charter schools budget, whichever is less, together with a written explanation from the school regarding the school purpose for each such expenditure.
(3) Identify any other transaction that is irregular, as defined in the training provided pursuant to paragraph (1) of subdivision (a).
(4) Include a letter with the audit report discussing any concerns or findings of the auditor relating to factors arising from the auditors activities under this subdivision, or arising from the lack of those factors, together with a response by the charter school if the charter school chooses to make a response.
(c) For purposes of this section, nonclassroom-based section:
(1) Auditor of a nonclassroom-based school means any certified public accountant assigned to a nonclassroom-based charter school audit, as described in Section 41020 or subparagraph (I) of paragraph (5) of subdivision (c) of Section 47605.
(2) Nonclassroom-based charter school means a charter school that offers nonclassroom-based instruction pursuant to paragraph (2) of subdivision (e) of Section 47612.5 for more than 20 percent of the instructional time offered by the charter school.