CDE Audit Policy Letter Informs NPS/A of Conditional Certification Status Extension for 2018 Certification Cycle

On June 28, 2017, Kristen Wright, Director, Special Education Division, California Department of Education, released a policy letter to all nonpublic schools and agencies which informed them of an extension of “Conditional” Certification for the 2018 NPS/A certification period if programs were unable to submit an “entity-wide” audit with their certification applications.   See  6/28 CDE Policy Letter

This CDE policy letter is, hopefully, an intermediary step in potential changes to the current law, Education Code § 56366.1(l)(1), which states, “…the Superintendent shall not certify or renew the certification of a nonpublic, nonsectarian school or agency  unless the entity submits an entity-wide annual audit that identifies its costs and revenues…”

CAPSES Governmental Affairs has been working on a resolution to this NPS/A audit requirement since October of 2016.  In October, CAPSES sought a legal opinion of Ed Code §56366.1(l)(1) and its applicability/inapplicability to all nonpublic schools and agencies.

Upon receiving information from legal counsel that the Ed Code requirement was applicable to all NPS/A, CAPSES began a dialogue with other California statewide organizations that represent related service providers to pupils with disabilities (California Association for Behavior Analysis,  California Speech-Hearing Association California Physical Therapy Association,  Autism Business Association Occupational Therapy Association of California). The associations were interested in forming an informal “coalition” for the purpose of working with CDE and amending §56366.1(l)(1) through the Legislative process.

Over an eight-month period, through extensive discussion, correspondence and suggested remedies by the Coalition advocates (with the assistance of multiple certified public accountants), a number of draft proposals were discussed with  CDE.  CDE, while supportive of changes to §56366.1(l)(1), needed a review of any proposed changes by the CDE Legal Office.   In addition, any statutory change would need to be approved by the Legislature.

Initially, the Coalition and CDE were hopeful that statutory changes to §56366.1(l)(1) could be made legislatively by July 1^st.   When this proved not possible, a policy letter which acknowledged the difficulties with the audit requirement and outlined a CDE transitional policy for 2018 certification became necessary.

CAPSES, its coalition partners, and CDE continue to work on changes to §56366.1(l)(1) with members of the California Legislature and their staff.   The goal is to make the necessary changes in law prior to the 2019 certification period.

Potential legislative changes will not completely remove the audit requirement.   It is hoped that a more structured approach (rather than a “one size fits all” approach) which acknowledges financial differences between individual providers, schools, and multi-agency providers will be incorporated and result in a compromise solution.

If there are any questions regarding the CDE policy letter, Ed Code §56366.1(l)(1), or on-going NPS/A certification requirements for 2018,  please do not hesitate to contact the CAPSES Office for assistance.