New Guidance Released for Charter School Audits — Here's What Changed and Why
After more than 20 months of PICPA advocacy, the Pennsylvania Department of Education has released revised, profession-aligned guidance for charter school engagements under Act 55 of 2024.
What happened?
The Pennsylvania Department of Education has published updated guidance replacing the original Act 55 language with a proper Agreed-Upon Procedures framework — developed in direct collaboration with PICPA. This resolves the conflicts between the law's original language and professional auditing standards.
What was the problem?
Act 55 of 2024 amended Pennsylvania's School Code to require annual audits of charter school operations. When the law took effect, its language created real problems for CPAs working with charter school clients.
- Wrong standards cited. The law referenced GASB standards instead of Government Auditing Standards, which actually govern how audits are conducted.
- Ambiguous terminology. The word "review" was used throughout in ways that conflicted with its precise professional meaning, creating confusion about the scope of work required.
- Out-of-scope requirements. Several provisions implied 100% testing of enrollment data and expense reimbursements — work that goes beyond a standard audit and belongs in a separate engagement.
The result: members faced a genuine dilemma. Complying with client expectations under the original guidance risked falling out of compliance with the professional standards CPAs are held to during peer review.
PICPA's advocacy timeline
Act 55 of 2024 amended Pennsylvania's School Code to require annual audits of charter school operations. When the law took effect, its language created real problems for CPAs working with charter school clients.
- November 2024: A member flagged the issue - the starting point for everything that followed.
- Late 2024/Early 2025: The PICPA convened a practitioner working group, reviewed the legislation, and developed formal recommendations including a proposed AUP framework
- 2025: The PICPA formally communicated concerns to the PA House and Senate, held multiple meetings with PDE senior staff, and engaged stakeholders including PASBO.
- June 2025: PDE confirmed it would revise its standards and move toward an agreed-upon procedures format.
- April 2026: The PICPA met with PDE to review a revised draft of the guidance and provided final comments.
- June 2026: PDE releases final revised guidance — an Agreed-Upon Procedures framework developed in collaboration with the PICPA.
What the AUP framework covers
The revised guidance, issued June 2026, specifies an agreed-upon procedures engagement — the right tool for this work. Engagements must be performed by an independent accountant and submitted by March 31 following the close of the fiscal year. The procedures cover six key areas:
Student enrollment verification (10% sample or 25 students minimum)
Board and administrator expense reimbursements (10% sample)
Internal controls over receipts and disbursements (samples of 40)
Federal and state tax filings, including Form 990
Charter school foundation financial statements (if applicable)
Public bidding and board policies review
