Authorizers' powers and duties; retention of funds; annual review

(A) In order to promote the quality of charter school outcomes and oversight, the Department of Education shall establish and implement policies, procedures, and practices to ensure quality authorizing, good governance and accountability that clearly define the roles and responsibilities of the authorizer consistent with state law. (B) A charter school authorizer: (1) may approve charter applications pursuant to Section 59-40-60 that meet the requirements specified in Sections 59-40-50 and 59-40-60 except that institutions of higher learning authorizers may choose to only approve those charter applications that meet the requirements of this chapter and align with the mission and strategic plan of the institution of higher learning authorizer; (2) must decline to approve charter applications according to Section 59-40-70(C) or an application submitted by a charter school whose applicant is also a member of the State Board of Education, the Education Oversight Committee, or a local school district board of trustees; (3) must negotiate and execute sound charter contracts with each approved charter school including, but not limited to, specific outcome-based expectations concerning academics, operations, governance, and finance based on the school's charter contract; (4) must monitor, in accordance with charter contract terms, the performance and legal/fiscal compliance of charter schools with charter-specific state law, Department of Education policies, procedures, and practices and policies adopted by the authorizer's governing board including, but not limited to, collecting and analyzing data to support ongoing evaluation according to the charter contract; (5) must conduct or require oversight activities that enable the authorizer to fulfill its responsibilities outlined in this chapter, including conducting appropriate inquiries and investigations, only if those activities are consistent with the intent of this chapter, adhere to the terms of the charter contract, and do not unduly inhibit the autonomy granted to public charter schools; (6) must collect, in accordance with Section 59-40-140(H), an annual report from each of its authorized charter schools and submit the report on the academic and financial performance of each of its authorized charter schools and authorizers performance to the State Board of Education in a format prescribed by the Department of Education before January thirtieth; (7) must notify the charter school in writing of noncompliance with the school's charter or contract and provide reasonable opportunity for the school to remedy the problem, unless the problem warrants revocation and revocation timeframes apply. The school shall have up to thirty calendar days to respond, in writing, describing how the issue will be remedied. If the problem warrants revocation, then the authorizer shall notify the school in writing and provide a copy to the State Superintendent of Education at the same time the school is notified and revocation timeframes apply; (8) must develop a corrective action plan and take appropriate corrective actions or exercise sanctions short of revocation in response to apparent deficiencies as documented pursuant to item (7) in charter school performance or legal compliance. If the corrective action plan or corrective actions relate to special education services, then the authorizer shall provide a copy of the letter denoting the deficiencies and the corrective action plan to the Department of Education. These actions or sanctions may include requiring the school to develop and execute the corrective action plan within a specified timeframe; (9) must determine whether each charter contract merits renewal, nonrenewal, or revocation; (10) must provide to parents and the general public information about charter schools authorized by the authorizer as an enrollment option within the district in which the charter school is located to the same extent and through the same means as the district in which the charter school is located provides and publicizes information about all public schools in the district. A charter school shall notify its authorizer of its enrollment procedures and dates of its enrollment period no less than sixty days before the first day of its enrollment period; (11) must permanently close any charter school at the conclusion of the school year after receiving the lowest performance level rating as defined by the state accountability system for three consecutive years in accordance with Section 59-40-110(H); however, the first year of a school's operation shall be excluded for purposes of this section; (12) must, within thirty days of submission or execution to the authorizer, post in a prominent location on its website all charter school applications, renewal applications, and any management organization contracts associated with the charter schools; (13) must post in a prominent location on its website their budget as an authorizer, including revenues, source of revenue, and expenditures. If the authorizer has charged fees to a charter school for services, then those fees must be listed by individual school; (14) must review and notify the charter schools of any noncompliance related to management organization contracts; (15) must be subject to the ethics and government accountability requirements for public members and public employees in Chapter 13, Title 8. For purposes of this subsection, members of the authorizer's governing boards are considered public members, and employees of the authorizer's governing board are considered public employees; (16) must be subject to Section 11-35-5340 of the South Carolina Consolidated Procurement Code or implements a procurement code which, in the written opinion of the Division of Procurement Services of the State Fiscal Accountability Authority, is substantially similar to the provisions and purposes of the South Carolina Consolidated Procurement Code; (17) must be subject to audits by the Legislative Audit Council. For the purpose of carrying out its audit duties, the Legislative Audit Council shall have access to the records and facilities of each authorizer during the authorizer's normal operating hours, and each authorizer must produce records requested by the Legislative Audit Council. The provisions contained in Chapter 15, Title 2, related to the Legislative Audit Council shall apply to audits conducted pursuant to this section; (18) must review and monitor the implementation of enrollment procedures submitted by the charter school pursuant to Section 59-40-50(B)(12) to ensure compliance with the admission requirements established pursuant to Section 59-40-50(B)(12) and (13); (19) must be subject to the South Carolina Freedom of Information Act; and (20) must not receive commissions, rebates, or financial incentives related to insurance products purchased by the charter school. (C)(1) A statewide authorizer shall only retain or contract to retain two percent of the total state allocation distributed to charter schools, as appropriated annually through the state appropriations process, for each charter school it authorizes for the purpose of carrying out its oversight and administrative responsibilities. With approval by the Department of Education, an authorizer may offer additional services related to charter school operations to charter schools it authorizes, however the charter school shall be under no obligation to purchase those services from the authorizer. A charter school may not be penalized or have its charter revoked based upon their failure to purchase offered services from the authorizer. A charter authorizer offering such services shall post a list of those services and the cost of the service in a prominent place on the authorizer's website. The amount retained by the authorizer does not include costs incurred in delivering services that a charter school may purchase at its discretion from the authorizer. The amount authorizers may claim for administration of federally funded programs or grants is subject to the terms and conditions of the federal program or grant. The authorizer shall use its funding provided pursuant to this section exclusively for the purpose of fulfilling authorizer obligations in accordance with this chapter. (2)(a) If the Department of Education determines an authorizer has violated this provision, a written notice of the alleged violation shall be provided to the authorizer. The authorizer shall have thirty calendar days from receipt of the notice to submit documentation and any other relevant evidence demonstrating the authorizer is in compliance with this provision. Upon a determination by the Department of Education that a violation has occurred, the State Superintendent of Education may: (i) order reimbursement of improperly charged amounts to the charter schools; (ii) revoke the authorizer's authority to charter or authorize schools, and all schools may apply to transfer to a different authorizer using the process established by the Department of Education pursuant to Section 59-40-55(D); or (iii) order other appropriate relief. (b) The authorizer may file an appeal with the State Board of Education within thirty days of the decision by the State Superintendent of Education to revoke an authorizer's authority to authorize schools. After an appeal is filed, the State Board of Education must hold a public hearing regarding the appeal within fourteen days. All appeals from the State Board of Education's decisions to terminate a public or independent institution of higher learning authorizer registration shall be made to the Administrative Law Court. The authorizer shall not demand or withhold any unspent appropriated funds held by or owed to a charter school that is transferring under the provisions of this section and may not charge fees associated with the school moving to another authorizer. (c) A charter school authorizer, or an entity affiliated with or owned or created by an authorizer, is prohibited from: (i) contracting with schools or otherwise selling services to schools over which the authorizer has direct oversight, such as financial services; (ii) using its authority or position as authorizer to influence, induce, or attempt to influence or induce, a charter school to contract for additional services provided by the authorizer; (iii) using authority or position as an authorizer to unfairly compete with any private entity or enterprise offering similar services to charter schools; (iv) using state funds, including any funds retained under Section 59-40-55(C)(1), to fund, market, or promote any additional contracted services offered to charter schools in exchange for a fee; (v) contracting with a charter school to provide services necessary to remedy any alleged noncompliance with the terms of the charter contract or applicable law; (vi) utilizing state funds, including any funds retained under Section 59-40-55(C)(1), for any purpose not directly related to fulfilling its obligations as an authorizer under this chapter and pursuant to any other state law or regulation; (vii) receiving direct or indirect compensation from any contract entered into by a school it authorizes and a third party; however, nothing in this section shall prohibit an authorizer from leasing a building, or providing food service or transportation, to schools it authorizes; and (viii) conditioning approval, renewal, or evaluation outcomes on the purchase of any goods or services. (d) The Department of Education shall terminate approval of any authorizer that is found by either the department or a court to have violated the requirements of this section or the requirements of Chapter 13 of Title 8. (D) The Department of Education shall conduct annual reviews aligned to the current state school district accreditation timeline, to monitor and evaluate the performance of all charter school authorizers, informed by the annual report provided for in this section. The review process must include an examination of how authorizers meet standards and practices, an evaluation of each authorizer's charter school's performance, and review of each authorizer's record of renewal, revocation, and authorization decisions. In addition, the Department of Education shall establish a process for receiving and reviewing complaints regarding charter schools and authorizers. These reports shall be considered in its annual reviews. The Department of Education shall issue notices of concern, in writing, to the authorizer that must include descriptions of all performance concerns and establish a timeline by which the authorizer must correct any issues or deficiencies. In the case of a public or independent institution of higher learning authorizer repeatedly failing to meet one or more of the requirements contained in subsection (B) over a period of three years, the Department of Education may terminate a charter school authorizer's registration. The State Board of Education shall allow a public or independent institution of higher learning authorizer the opportunity to have a hearing before registration termination. All appeals from the State Board of Education's decisions to terminate a public or independent institution of higher learning authorizer registration shall be made to the Administrative Law Court. If a public or independent institution of higher learning authorizer's registration is terminated, the Department of Education shall develop a streamlined transfer application for charter schools to apply to a new authorizer for the remainder of the charter school's contract term; however, if no new authorizer agrees to the transfer request, the charter school must close. The Department of Education shall create an authorizer closure protocol to be fully implemented within 180 days of the closure of the public or independent institution of higher learning affiliated with an authorizer, a timeline, and an application process for the transfer of any charter schools by a new authorizer. Operating charter schools shall not be required to resubmit a full application unless the new authorizer specifically identifies an area of concern. New charter schools under contract may be required to submit a full application by the new authorizer.