8.01.1 No later than fifteen (15) days after the authorizer votes to non-renew or revoke the charter, or the charter otherwise dissolves, the charter school or sponsoring entity shall furnish to the Division of Elementary and Secondary Education:

8.01.1.1 A complete inventory of all personal property, real property, equipment, and fixtures owned or financed by the charter school, with documentation showing a description of each asset, serial number, tag number, location, estimated value, any encumbrance on the asset including recorded security interest or lien, and the source of funds for each purchase;

8.01.1.2 The account number and financial institution contact information for every account in which the charter school or sponsoring entity deposited any state or federal funds at any time, and complete bank statements for the twelve (12) months preceding the effective date of closure;

8.01.1.3 A complete list of all debts or obligations owed by the charter school and still outstanding as of the effective date of closure, including all outstanding checks or warrants;

8.01.1.4 A complete list of all accounts receivable owed to the charter school and still outstanding as of the effective date of closure; and

8.01.1.5 Complete contact information for every member of the charter school's board or governing entity.

8.01.2 In the event that the authorizer revokes the charter due to misuse, fraud, or theft of public funds, the division shall immediately obtain the information required in 8.01.1.

8.01.3 If the authorizer votes to non-renew or revoke the charter, or the charter otherwise dissolves, the charter school or sponsoring entity shall, on a timeline established by the Division, send written notice of closure, as approved by the Division, to:

8.01.3.1 The parents and legal guardians of all students;

8.01.3.2 All employees of the charter school;

8.01.3.3 All creditors of the charter school; and

8.01.3.4 Every school district in which any students of the charter school reside.

8.01.4 Every notice sent pursuant to Section 8.01.3 above must include:

8.01.4.1 The effective date of closure and last day of regular instruction; and

8.01.4.2 Contact information of the person employed or retained by the charter school or sponsoring entity to handle inquiries regarding the closure.

8.01.5 Parental notices sent pursuant to Section 8.01.3 must additionally include:

8.01.5.1 The student's school district of residence, and the contact information for that district's enrollment office;

8.01.5.2 A statement that parents should contact the resident school district or any charter school where the student intends to enroll and should ask that school or district to request transfer of the student's educational records from the closing charter school; and

8.01.5.3 Contact information for the individual or entity charged with storage of student records after the school's closure.

8.01.6 Employee notices sent pursuant to Section 8.01.3 must additionally include the date of termination of all employee benefits (health insurance, etc.), along with any COBRA or other documentation required by law.

8.01.6 [FN1] The deadline for any notice required by this Section may be extended by the Charter School Office for good cause.

8.02.1 Upon the dissolution, non-renewal, or revocation of an open-enrollment public charter, all net assets of the open-enrollment public charter school purchased with public funds, including any interest in real property, shall be deemed the property of the state, unless otherwise specified in the charter or by federal law.

8.02.2 Immediately upon the revocation, transfer, or assignment of an open-enrollment charter by the authorizer, the public charter school shall:

8.02.2.1 Provide to the division a detailed accounting of all accounts payable due from the state funds held by the open-enrollment public charter school and any additional information or records requested by the division concerning the disbursement of the state funds.

8.02.2.2 Provide the division with a comprehensive list of all banking information and accounts in which the open-enrollment public charter school holds state or federal funds.

8.02.2.3 Receive prior approval from the division for an expenditure over five hundred dollars ($500); and

8.02.2.4 Work in coordination with the division to draft a charter closure plan.

8.02.3 The Commissioner or his or her designee shall take all steps necessary to protect and recover any and all state assets in the possession or control of the former charter school or the sponsoring entity.

8.02.3.1 If any state or federal funds remain in any bank account(s) titled in the name of the charter school or sponsoring entity, the Commissioner or his or her designee shall notify the financial institution that the account(s) holds state or federal funds and shall direct that the account(s) be immediately frozen, subject to further direction by the Commissioner or his or her designee.

8.02.3.2 Any funds remaining in any bank account(s) titled in the name of the charter school shall be presumed to be state or federal funds until such time as the sponsoring entity furnishes documentation showing otherwise.

8.02.3.3 The Commissioner or his or her designee shall secure and arrange for the recovery and storage of all personal property, equipment, and fixtures purchased or financed in whole or in part with any state or federal funds. Any personal property or equipment contained within the charter school facility shall be presumed to have been purchased or financed in whole or in part with state or federal funds until such time as the sponsoring entity furnishes documentation showing otherwise.

8.02.3.4 At all times, the charter school, the sponsoring entity, and their officers, agents, and employees, must protect the school's assets against theft, misappropriation, and deterioration.

8.03.1 Upon the dissolution, non-renewal, or revocation of an open-enrollment public charter, the following property shall be sold, unless the Commissioner determines otherwise:

8.03.1.1 Real property or fixtures purchased or financed in whole or in part by the open-enrollment public charter school with state funds;

8.03.1.2 Real property or fixtures purchased or financed in whole or in part by the sponsoring entity with federal grant funds administered by the Division of Elementary and Secondary Education, unless federal law requires some other method of distribution;

8.03.1.3 Personal property encumbered by a recorded security interest or lien and purchased or financed by the open-enrollment public charter school in whole or in part with state funds;

8.03.1.4 Personal property purchased or financed in whole or in part with state funds by an open-enrollment public charter school that never received federal funds and never directly benefited from a federal grant administered by the Division of Elementary and Secondary Education; and

8.03.1.5 Any other personal property not distributed as provided by Sections 8.03.3 and 8.03.4 below.

8.03.2 The state has a perfected priority security interest in the net proceeds from the sale or liquidation of property sold pursuant to Section 8.03.1 above to the extent of the public funds used in the purchase. For the purpose of this section, “net proceeds” means the sale proceeds remaining after the satisfaction of all lien, security, ownership, or other interests that supersede the state's interest.

8.03.3 If the open-enrollment public charter school at any time operated an approved federal child nutrition program, all commodities and foodservice equipment purchased in whole or in part with federal funds or with nutrition program revenues shall be sold or transferred as directed by the Division of Elementary and Secondary Education, Child Nutrition Unit.

8.03.4 If the open-enrollment public charter school or its sponsoring entity received a federal grant administered by the Division of Elementary and Secondary Education, then all other personal property, including furniture, equipment and supplies, purchased with state or federal funds may be redistributed to other Arkansas public charter schools or traditional public schools as allowed by federal law.

8.03.4.1 The division shall redistribute the items listed in Section 8.03.4 by notifying all open-enrollment public charter schools of the available items.

8.03.4.2 If there is more than one (1) open-enrollment public charter school that expresses interest in an item, the division shall use a rubric to redistribute the items pursuant to priorities below, and distribute the property to the school with the highest number of points:

8.03.4.2.1 Open-enrollment public charter schools with the same educational model shall receive five (5) points;

8.03.4.2.2 Open-enrollment public charter schools in the same geographic area shall receive five (5) points;

8.03.4.2.3 Open-enrollment public charter schools with a free and reduced lunch percent greater than 70 percent shall receive four (4) points;

8.03.4.2.4 Open-enrollment public charter schools that are in the first two years of operation shall receive three (3) points;

8.03.4.2.5 Open-enrollment public charter schools that have expanded to new grade levels, new locations, or new campuses in the previous two years shall receive three (3) points; and

8.03.4.2.6 Open-enrollment public charter schools that did not receive start-up funds shall receive two (2) points.

8.04.1 Upon the dissolution, non-renewal, or revocation of an open-enrollment public charter, the Commissioner or his or her designee shall assert control over any funds deemed the property of the state under Section 8.02 above.

8.04.1.1 In the event of misuse of funds, fraud, or theft following the voluntary non-renewal of a public charter, the Commissioner or his or her designee may assert control over any funds deemed the property of the state immediately, even if the charter is still in operation until the end of the school year.

8.04.2 Immediately upon the State Board's affirmation of a revocation, assignment, or transfer, the open-enrollment public charter school shall transfer all state and federal funds held by the open-enrollment public charter school to the division.

8.04.3 The division shall hold funds received under Ark. Code Ann. § 6-23-105(e) and Section 8.04.2 of these rules in receivership in a separate fund and shall expend the funds only with prior approval of the Commissioner.

8.04.4 In order to comply with federal and state law, the Commissioner shall use such funds to satisfy the following obligations of the charter school in the order listed:

8.04.4.1 Domestic support obligations withheld from an employee's wages in compliance with a court order prior to the effective date of dissolution, non-renewal, or revocation;

8.04.4.2 Federal tax liens imposed by the Internal Revenue Code for taxes or payroll tax withholding owed;

8.04.4.3 Any state tax lien or certificate of indebtedness issued by the Arkansas Department of Finance and Administration for taxes or payroll tax withholding owed;

8.04.4.4 Any debt owed to the Division of Elementary and Secondary Education, Child Nutrition Unit for penalties or reimbursement of overpayments;

8.04.4.5 Any debt owed to the Division of Elementary or Secondary Education or other state agency for reimbursement of any other overpayment of federal funds;

8.04.4.6 Unpaid contributions to the Arkansas Teacher Retirement System accrued prior to the effective date of dissolution, non-renewal, or revocation;

8.04.4.7 Unpaid contributions to the Employee Benefits Division of the Arkansas Department of Finance & Administration accrued prior to the effective date of dissolution, non-renewal, or revocation; and

8.04.4.8 Unpaid employee wages accrued prior to the effective date of dissolution, non-renewal, or revocation in accordance with employee contracts and the school's policies in effect as of the beginning of the current school year.

8.04.5 A claimant may file a claim for disbursement from the state funds if the claimant is owed by the public charter school.

8.04.5.1 The claim must be made in writing to the Charter School Office;

8.04.5.2 The claimant must attach an invoice that describes the nature of the debt owed;

8.04.5.3 The claim must be for an allowable expense; and

8.04.5.4 The claim must be filed within one (1) calendar year from the date of revocation.

8.04.5.5 Claims received by the division under Section 8.04.5 will be paid in the order received, after all obligations under Section 8.04.4 have been satisfied, and only if adequate funds remain.

8.04.6 The determination of the division concerning the disbursement of the state funds is final and may not be appealed.

8.04.7 If funds remain in receivership for which no legitimate, documented claim has been made to the division within one (1) calendar year after the revocation, transfer, or assignment, the remaining funds shall be transferred to the:

8.04.7.1 Entity that received the public charter school under a transfer or assignment if the public charter school was transferred or assigned; or

8.04.7.2 In all other instances, the Public School Fund.

8.05.1 The charter school or sponsoring entity must promptly submit all student records to the transfer school, including:

8.05.1.1 Individualized Education Programs (IEPs) and all records regarding special education and supplemental services;

8.05.1.2 Student health / immunization records;

8.05.1.3 Attendance records;

8.05.1.4 Testing materials, including scores, test booklets, etc. required to be maintained by the School; and

8.05.1.5 All other student records.

8.05.1.6 All end-of-school-year grades and evaluations must be completed and made part of the student records, including any IEP, Committee on Special Education meetings, or progress reports.

8.05.1.7 To the extent that testing scores, etc. are scheduled to arrive after the school closure, arrangements should be made with the testing agent to forward such material to the transfer school.

8.05.2 No later than thirty (30) days after closure or dissolution of the charter, the charter school or sponsoring entity shall send each employee of the charter school:

8.05.2.1 Copies of his or her contracts, evaluations, recommendation letters, and any other proof of employment and/or termination;

8.05.2.2 Documentation of staff development hours; and

8.05.2.3 Notice that employees must keep this documentation for their records as the state will have no way of providing proof of employment after the school is closed.

8.05.3 If the charter school operated an approved federal child nutrition program, all child nutrition records shall be delivered to the Division of Elementary and Secondary Education, Child Nutrition Unit on a schedule established by the Unit.

8.05.4 Any student records remaining in the possession of the charter school or sponsoring entity, or in the possession of any other entity or individual designated by the charter school or sponsoring entity, shall be maintained in a manner sufficient to protect student privacy rights in accordance with the Family Educational Rights and Privacy Act of 1974, as amended.

8.05.5 The sponsoring entity shall maintain all relevant corporate or governance records for at least five (5) years after the effective date of closure, specifically including but not limited to:

8.05.5.1 All board minutes, policies, and bylaws of the charter school board or governing entity;

8.05.5.2 Bonds, mortgages, loan agreements, and all other financing instruments;

8.05.5.3 Lease agreements;

8.05.5.4 Accounting and bank records;

8.05.5.5 Payroll and tax records as required by federal law;

8.05.5.6 Grant records as specified by 34 C.F.R. § 80.42 or other relevant federal or state law; and

8.05.5.7 Any other document required by law to be maintained.

8.05.6 No later than thirty (30) days after closure or dissolution of the charter, the charter school or sponsoring entity shall make available all financial records requested by the division.

8.05.6.1 In the event of misuse of public funds, fraud, or theft, the charter school or sponsoring entity shall make immediately available all financial records required by the division.