Charter schools are unique not-for-profit government funded schools that are open to the public. Although charter schools are funded in a similar method to public schools, they are not subjected to some of the regulations and rules that apply to public schools. Instead, charter schools are held accountable through a performance contract that requires the schools to produce positive academic results and to adhere to the charter contract.
Consider the following:
A group of parents in your town is forming a charter school and you are responsible for choosing the accounting system. Visit the U.S. Charter Schools website (http://www.charterschoolcenter.org) to learn more about charter schools and required accounting procedures. Then, respond to the following:
What Internet resources are available that could help you establish an appropriate accounting system? Would a charter school have a different accounting system than a traditional private school or a public school?
Describe the hierarchy of general accepted accounting practices (GAAP) for state and local governments, the federal government, and nongovernmental not-for-profit organizations. Discuss the roles of the General Accounting Standards Board (GASB), the Financial Accounting Standards Board (FASB), and the American Institute of Certified Public Accountants (AICPA) in standards setting for government and non-profit organizations.
What do you think would be the most difficult part of establishing such an accounting system? What steps would you take in doing so?