Change in cost principles applicable to charter schools

 

June 11, 2013
TO THE ADMINISTRATOR ADDRESSED:
SUBJECT:      Change in federal cost principles and federal regulations applicable to all open-enrollment charter schools 

 

On May 13, 2013, the Texas Education Agency (TEA) received clarifying guidance from the US Department of Education (USDE) regarding the federal cost principles applicable to open-enrollment charter schools.  

In that guidance, USDE clarified that to the extent that an open-enrollment charter school operated by a nonprofit organization (NPO) or an institution of higher education (IHE) was receiving funds as a local educational agency (LEA), those open-enrollment charter schools were to be governed by the same cost principles and federal regulations applicable to other LEAs, rather than the cost principles and federal regulations applicable to NPOs and IHEs. Since Texas state law considers all charter schools to be LEAs, the federal cost principles for LEAs apply. 

Open-enrollment charter schools operated by an NPO or IHE will be required to make the changes described in this letter beginning in the 2013–2014 school year and extending into future school years. TEA will be updating grant reference material and supporting documents on an ongoing basis to reflect USDE’s clarifying guidance.

Applicable Cost Principles

Beginning in the 2013–2014 school year, and extending into future school years, the cost principles applicable to all LEAs, including all open-enrollment charter schools, will be OMB Circular A-87: Cost Principles for State, Local, and Indian Tribal Governments (Title 2 of the Code of Federal Regulations [2 CFR] Part 225).

Applicable Part of Title 34 of the Code of Federal Regulations (34 CFR)

Also beginning in the 2013–2014 school year, and extending into future school years, the federal regulations applicable to all LEAs, including all open-enrollment charter schools, will be 34 CFR Part 80.

For Grants Spanning Multiple School Years

For grants that span multiple school years, such as Texas Title I Priority Schools, Cycle 2, for school years 2011–2012, 2012–2013, and 2013–2014, OMB Circular A-87: Cost Principles for State, Local, and Indian Tribal Governments (2 CFR Part 225) and 34 CFR Part 80 will become applicable beginning in the 2013–2014 school year.

For Further Information

In the near future, TEA’s Division of Federal Fiscal Monitoring will post a more detailed letter on the TEA Correspondence page directed to open-enrollment charter schools detailing how this change affects open-enrollment charter schools operated by an NPO or IHE.  
With any questions, please call the Division of Grants Administration at (512) 463-8525 or email grants@tea.state.tx.us.

 

Sincerely, 

Cory Green, Chief Grants Administrator
Division of Grants Administration