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The State Charter School Board needs to polish its practices to more effectively regulate Utah's growing number of charter schools, according to a legislative audit released Thursday.

The number of charter schools in Utah has surged from 7 in 2001 to 76 this year with no increase in the charter board's support staff at the Utah State Office of Education. In fact, the six-member staff has been cut to five.

The report highlights the board's handling last year of financial struggles at Beehive Science and Technology Academy in Holladay. The board voted to revoke Beehive's charter but later reversed that decision because of its own "ambiguous standards" for charter finances, the audit states.

The report recommends the board establish and apply clear financial standards for all charter schools. The board also needs to clarify procedures for disciplinary actions and school closures.

"We agree with the legislative auditor that it is important to have clear policies for financial management and oversight in place so that all charter schools are held to consistent standards," Beehive principal Yavuz Durmus said via e-mail. "With [the charter board's] cooperation, we have decreased overhead expenses and increased our enrollment this school year, placing us in a sound financial position."

Already, the state charter board has approved a draft of financial guidelines for schools. The State Board of Education will determine whether to adopt those standards as an administrative rule.

"This is something we're actively working on," said Cory Kanth, the state's financial analyst for charter schools. "'We realize this will help schools to understand better what their responsibilities are and what constitutes financial health on their part."

Larry Shumway, state superintendent, said in a written response to the audit that the State Office of Education and State Charter School Board "appreciate and largely concur with the findings and recommendations." He also supported the need for additional state staff to handle charter oversight.

The audit also found the State Board of Education approved more loans to charter schools last year than is allowed by statute. The cap is set at $2 million, but the board awarded 21 loans totalling $3.8 million in the 2008-09 school year. The report recommends better tracking of loans and for the Legislature to clarify how loan money can be spent.

The audit also recommends that the state charter board do the following:

• Direct charter schools on best financial practices in areas such as enrollment, facility costs and budgeting. Require training for charter school board members.

• Keep records of correspondence between state staff and charter schools regarding facility contracts.

• Protect the state's liability in the event that schools default on financial obligations.

• Define how board members of charter schools should be replaced when they are removed by the state board. —

Read the audit

O Go to › http://www.le.state.ut.us/audit/newaudit.htm.