Charter School Audit Requirements - Act 55 of 2024
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.
The issue
Senate Bill 700, signed into law as Act 55 on July 11, 2024, is an omnibus measure that introduced numerous amendments to the Pennsylvania School Code. Among its provisions are new audit requirements that have raised concerns.
Our position
The PICPA reviewed the legislation and the related guidance from the Pennsylvania Department of Education. We identified several significant problems:
- The law cited Governmental Accounting Standards Board standards rather than Government Auditing Standards, which actually govern how audits are conducted.
- The term "review" was used throughout in ways that conflict with its precise professional meaning, creating ambiguity about the scope of work being required.
- Several provisions implied 100% testing of student enrollment data and expense reimbursements, work that exceeds the scope of a standard audit and would be more appropriately structured as a separate, agreed-upon procedures engagement.
For members serving charter school clients, this created a genuine ethical dilemma. Complying with client expectations under this guidance could mean falling out of compliance during peer review with the professional standards CPAs are expected to uphold.
Status: 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.
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
Reviewed August 2026
