Editor’s Note: CSDC is offering these Coronavirus-19 updates for public viewing, to members and non-members alike, and in front of our usual member’s only “paywall” as a service to the larger charter school community. We hope nonmembers will consider joining CSDC.
SBA Issues Helpful Paycheck Protection Program Guidance
Sacramento, CA—The Small Business Administration (SBA) on Wednesday issued very helpful guidance regarding Paycheck Protection Program (PPP) loans that offers considerable comfort to charter schools.
As noted in one of our prior updates, organizations applying for these popular and forgivable loans are required to certify that “current economic uncertainty makes the loan request necessary to support the ongoing operations of the Applicant.” There was no guidance as to what this meant in practice and our prior update articulated some suggested considerations on point.
The updated guidance from SBA articulates a “safe harbor” for those organizations that are borrowing less than $2 million from the program. The guidance states that “any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”
The guidance provides a bit of context noting that “SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans.” CSDC presumes that, for smaller and mid-sized charter school organizations, this guidance provides a great deal of comfort to applicants who are applying for loans below the $2 million threshold.
It also provides a bit of comfort for larger applicants. It reiterates prior guidance suggesting that applicants for loans above the $2 million threshold are subject to review for compliance matters. If such a borrower lacked an adequate basis for its certifications, it “will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness.” “If the borrower repays the loan,” the “SBA will not pursue administrative enforcement...with respect to the certification concerning necessity of the loan request.” CSDC takes this to mean that even larger applicants, if found out-of-compliance with the necessary certification, would merely need to repay the loan, and would not face further enforcement action.
Tips for the COVID-19 Operations Written Report, Due July 1
On Monday, May 4, the California Department of Education (CDE) posted a template and instructions for completing the COVID-19 Operations Written Report, which must be adopted by Local Education Agencies’ (LEA) governing boards and submitted to the County Superintendent of Schools in conjunction with the adopted annual budget by July 1, 2020. LEAs must also post the adopted reports on the homepage of their Internet website, if a website exists. LEAs must meet the requirements of Executive Order N-56-20 but do not have to use the posted template.
Tips for drafting the COVID-19 Operations Written Report. The template prompts for LEAs to report on how they have addressed five areas of responsibility related to the COVID-19 emergency. Most of the five prompts are fairly straightforward. Since each response is limited to 300 words, it may help to organize responses with bulleted lists that succinctly capture key high-level ideas. The following list describes each prompt and offers drafting tips:
Has your charter school taken steps to survey needs and provide supervision to families in need of it, including families with parents who must physically report to work as first responders, food services staff, and so on? Initially, many LEAs did very little to fulfill this state requirement. CSDC hopes that many charter schools will be able to provide a substantive response. Responses might describe as any student or child care arrangements the school has offered directly and/or in partnership with other child care organizations in the community and/or outreach to offer use of facilities to such agencies.
While the foremost consideration should always be the actual need, charter schools may also want to consider the public relations aspect of any public-facing accountability document such as this. Even though the stakes may not be high for individual schools, collectively, charter schools lose ground when political opponents weaponize these documents. Above all, CSDC hopes that charter schools will be able to document sound programmatic responses to the authentic needs of the COVID-19 emergency.
Local indicators delayed with LCAP. LEAs are required to annually measure progress in meeting the requirements of relevant LCFF priorities, report on the results to the board at a regularly scheduled public board meeting, and post the results to the public through the California School Dashboard. Starting in 2020, LEAs are required to present their local indicator data to their governing boards for review in conjunction with the board’s LCAP approval (previously this occurred later in the school year, often after LCAP approval).
The requirement to gather local indicator data for the 2019-20 school year has not changed. However, the deadline for submitting Local Control and Accountability Plans (LCAP) has been postponed until December 15, 2020. The board reporting requirement for local indicator data also moves in tandem with the LCAP approval date so, by extension, is deferred to December 15. As a reminder, the format of the LCAP template will be modified, for this year’s submission only. As for the requirement for LEAs to upload 2019-20 local indicator to the Dashboard, resolution of this matter depends on possible future legislative or executive action regarding the 2020 Dashboard.
For more information, see the recently updated FAQs on the LCAP and COVID-19 Operations Written Report requirements on the CDE website.