PURPOSE: This rule establishes the standards and indicators for charter sponsorship as required by the Missouri Department of Elementary and Secondary Education. These standards serve as the foundation for the sponsor application process as required by section 160.403, RSMo, and the evaluation process for sponsors required in section 160.400.17(1), RSMo.

1. (1) Standard 1—Sponsor Commitment and Capacity. The sponsor recognizes that chartering is a means to foster excellent schools that meet identified needs, creates organizational structures to facilitate meeting these needs, and commits human and financial resources necessary to conduct its sponsoring duties effectively and efficiently. The sponsor shall implement steps to closely monitor the following:

   1. (A) Provides capacity to serve as a sponsor by employing, contracting for services, or seeking expertise in other ways to ensure capacity to carry out all sponsoring activities essential to charter school oversight (including, but not limited to, education leadership, curriculum, instruction, assessment, special education, federal programs, performance accountability, law, finance, and nonprofit governance);
   2. (B) Retains records showing that all individuals working in a sponsor’s office and/or in the capacity of sponsor who have any contact with students complete a criminal background check and Missouri’s Family Care Safety Registry (FCSR) check as outlined in section 168.133.1, RSMo;
   3. (C) Provides capacity within their organization to review all data for charter schools in the Missouri Comprehensive Data System (MCDS) as outlined in section 160.400.11(5), RSMo;
   4. (D) Ensures development of policies and procedures as outlined by section 160.400.16(1)–(6), RSMo;
   5. (E) Provides an annual report showing that ninety percent (90%) of state funds received for sponsoring are used to support charter school operations and compliance as outlined in section 160.400.11, RSMo; and
   6. (F) Maintains capacity for intervention purposes when charter sponsors have two (2) or more persistently low achieving charter schools, as verified by their Annual Performance Report (APR), before expanding their charter portfolio.

2. (2) Standard 2—Application Process and Decision Making. The sponsor shall implement steps to closely monitor the application process that includes clear application and guidance; follows fair, transparent procedures, and rigorous criteria; and grants only those charter applications that demonstrate a strong capacity to establish and operate a quality charter school. The sponsor shall implement the following:

   1. (A) Produces a thorough charter application process as outlined in section 160.400.11(2), RSMo, including the items as stated in section 160.405.1(1)–(17), RSMo;
   2. (B) Maintains consistent criteria for accepting, approving, and denying charter applications and does so in accordance with a clearly established timeline;

   3. (C) Requires the charter applicant to provide evidence of accountability regarding stable fiscal and organizational performance included in the charter application process, including:

      1. 1. Budget assumptions with balanced

budgets; and

1. 2. Positive cash flow reserve funds;
2. (D) Advises charter applicants of the meaning of local education agency (LEA) status as it concerns the operation of the charter school as permitted in section 160.415.4, RSMo;
3. (E) Includes additional contractual provisions that verify rigorous, independent contract oversight by the charter governing board and the school’s financial independence from the external provider (for any school contracting with a third-party provider for education design and operation or management);
4. (F) Meets the Missouri Department of Elementary and Secondary Education’s (department) timelines by submitting to the State Board of Education (board) any new charter applications before November 30 prior to the school year of the proposed opening date of the charter school. Renewal applications must be submitted before January 1 of the year that the charter is scheduled to be renewed; and
5. (G) Submit an electronic copy of the approved charter for department files.

1. (3) Standard 3—Board Support. The sponsor shall implement steps to offer ongoing support, including but not limited to: training, organization, ethical conduct, knowledge, commitment, compliance, leadership oversight, contract management, accountability, transparency, and the interpretation of the Missouri public charter school statutes/rules for charter school board(s). The sponsor shall—

   1. (A) Ensure charter board members have adequate training to fulfill their position;

   2. (B) Place charter schools on probation and/or revoke or non-renew a school’s charter for poor governance if the charter school board does not follow statutory requirements, correct violations of statutory requirements, or continues to repeat the same violations, including, but not limited to, the following:

      1. 1. The charter board retains status as a

Missouri non-profit corporation as outlined in section 160.400.7, RSMo;

1. 2. Charter board members submit ethics

commission paperwork annually as outlined in sections 105.483 and 105.492, RSMo;

1. 3. Charter boards have policies in place

to prevent conflict of interests with the charter school as outlined in section 160.400.15, RSMo; and

1. 4. All charter board members have crim-

inal background and FCSR checks as outlined in section 160.400.14, RSMo;

1. (C) Demonstrate oversight of charter boards in a variety of ways, including, but not limited to, reviewing board minutes, attending board meetings, and verifying reporting processes; and
2. (D) Monitor whether charter school board and committee business is conducted as outlined in the Missouri Sunshine Laws, sections 610.010–610.030, RSMo.

1. (4) Standard 4—Academic Performance. The sponsor shall take steps to closely monitor state performance standards, as defined by the department, are included in the sponsor/charter contract. The sponsor—

   1. (A) Ensures that performance contracts are aligned to the pupil academic standards adopted by the State Board of Education as outlined in section 160.405.4(6)(a), RSMo;
   2. (B) Mandates intervention based on performance deficiencies as outlined in section 160.405.8(1)(a), RSMo;
   3. (C) Establishes clear procedures and consequences for failure to meet requirements and outcomes set in the sponsor/charter contract; and
   4. (D) Does not approve additional sites or expansion of grade levels for a charter school identified as persistently low achieving, as verified by its APR.

2. (5) Standard 5—Fiscal Management. The sponsor shall implement steps to closely monitor the charter school performance management and financial actions that support a solvent fiscal status, including:

   1. (A) A charter school identified as financially stressed develops a budget and education plan as outlined in section 160.417.3, RSMo. The department may withhold any payment of financial aid due to the charter school until such time as the charter school and sponsor have fully complied as outlined in section 160.417.5, RSMo;
   2. (B) Charter schools that have been notified that expenditures for the preceding fiscal year exceed receipts, must take action to examine whether this has occurred due to recurring costs. If this is the case then the sponsor ensures that a budget and financial plan will be developed by the charter as outlined in section 160.417.3, RSMo;
   3. (C) Reviews annual financial audits of schools, conducted by a qualified independent auditor as stated in section 160.405.4(4), RSMo;

   4. (D) Ensures that adequate financial controls are in place to assure that revenue received for operation of the charter school are expended for expenses related to the operation of the charter school—

      1. 1. A requirement that a monthly check

register is reviewed and approved by the local board prior to issuing payment for amounts in excess of one thousand dollars ($1,000); and

1. 2. The bank account where state funds

are deposited must be established and under the control of the charter board. If a management company is contracted, personnel associated with the company shall not have direct access;

1. (E) Closely monitors that charter schools show fiscal management of federal grant programs in accordance with terms outlined in Fiscal Guidance for Federal Grant Programs;
2. (F) Closely monitors that charter schools have a procurement process in place as required by the Code of Federal Regulations 34 CFR 80.36;
3. (G) Closely monitors that the Annual Secretary of the Board Report (ASBR) and the annual audit are submitted to the department in the time frame outlined by Missouri statutes and that these documents are not compiled by the same auditing service. The department may withhold any payment of financial aid due to the charter school until such time as the charter school and sponsor have fully complied as outlined in section 160.415.5, RSMo;
4. (H) Closely monitors that the annual audit summary is published as outlined in section 165.121.5, RSMo; and
5. (I) Closely monitors that charter schools utilize the coding procedures prescribed in the Missouri Financial Accounting Manual as outlined in section 160.405.1(10), RSMo.

1. (6) Standard 6—Reporting. The sponsor shall implement steps to closely monitor all reports/data required by Missouri and federal law are completed and submitted in a timely manner for the department and/or legislature. The sponsor shall closely monitor the following:

   1. (A) Timely, accurate, and complete submission of all data required as outlined in section 160.400.17(1), RSMo;
   2. (B) Charter schools locally maintain student records that can be transferred electronically for state and federal program reporting requirements;
   3. (C) Charter schools retain necessary records as required by the general record retention schedule and the public school record retention schedule as authorized by section 109.255, RSMo;
   4. (D) That an annual report per charter school is submitted to the joint committee on education as outlined in section 160.400.12, RSMo;
   5. (E) Sponsor ensures charter schools adopt policies consistent with the Family Educational Rights and Privacy Act (FERPA) and the Health Insurance Portability and Accountability Act (HIPAA) guidelines to the extent they are applicable;
   6. (F) Appropriate charter personnel have access to the Missouri Student Information System (MOSIS) and core data; and
   7. (G) That approved changes to a charter throughout the term of the charter will be submitted within thirty (30) days of approval and an electronic copy will be submitted to the department reflecting approved changes.

2. (7) Standard 7—Oversight and Evaluation. The sponsor conducts oversight and evaluates performance for both federal and state compliance. The sponsor shall implement steps to closely monitor the following:

   1. (A) Non-discrimination as required by federal and state laws;
   2. (B) The charter board has a policy to promptly address parent, student, and community concerns at the local level;
   3. (C) Monitors data related to certification and background checks and has policy/intervention plans to address when schools are not in compliance;
   4. (D) The compliance with all state and federal statutes and guidelines, including, but not limited to: special education; all title programs; vocational/career education; food service; and services for foster, homeless, 5 CSR 20-100

migrant, and English language learner students;

1. (E) All eligible students participate in the Missouri MAP; and
2. (F) Charter schools enrolling eligible students under the urban voluntary transfer program (St. Louis metropolitan area) are reported accurately as outlined in section 160.410.1(2), RSMo.

1. (8) Standard 8—Intervention, Renewal, Revocation, and Closure Decision Making. The sponsor shall implement steps to closely monitor transparent and rigorous processes that use comprehensive academic, financial, and operational management data to make decisions about intervention, renewal, revocation, and closure. The sponsor shall implement the following:

   1. (A) Develops and maintains policies that have been adopted for the following areas:

      1. 1. Establishes and makes known to

schools at the outset an intervention policy stating the general conditions that may trigger intervention and the types of actions and consequences that may ensue;

1. 2. Bases the renewal process and renewal

decisions on thorough analyses of a comprehensive body of objective evidence defined by the performance framework in the charter contract. Sponsors grant renewal only to schools that have achieved the standards and targets stated in the charter contract, are organizationally and fiscally viable, and have been diligent to the terms of the contract and applicable law;

1. 3. Revokes a charter during the charter

term if there is clear evidence of extreme underperformance or violation of law or the public trust that imperils students or public funds; and

1. 4. In the event of a school closure, over-

sees and works with the school governing board and leadership in carrying out a detailed closure protocol that ensures timely notification to parents; orderly transition of students and student records to new schools; and disposition of school funds, property, and assets in accordance with law as outlined in section 160.400.17(1), RSMo.

AUTHORITY: sections 160.400–160.425 and 161.092, RSMo 2016.* Original rule filed Dec. 3, 2012, effective June 30, 2013. Amended: Filed Dec. 8, 2016, effective July 30, 2017. *Original authority: 160.400, RSMo 1998, amended 2005, 2009, 2012, 2016; 160.403, RSMo 2012, amended 2016; 160.405, RSMo 1998, amended 2005, 2009, 2012, 2016; 160.408, RSMo 2016; 160.410, RSMo 1998, amended 2005, 2009, 2012, 2016; 160.415, RSMo 1998, amended 1999, 2005, 2012, 2016; 160.417, RSMo 2012, amended 2016; 160.420, RSMo 1998, amended 2001, 2005, 2012; 160.425, RSMo 2012; and 161.092, RSMo 1963, amended 1973, 2002, 2003, 2013, 2014. SECONDARY EDUCATION