Each month, LCW presents a monthly timeline of best practices for private and independent schools. The timeline runs from the fall semester through the end of summer break. LCW encourages schools to use the timeline as a guideline throughout the school year.
NOVEMBER THROUGH JANUARY
â-¡ Issue Performance Evaluations
We recommend that performance evaluations be conducted on at least an annual basis and that they are completed before the decision to renew the teacher for the following school year is made. Schools that do not conduct regular performance reviews have difficulty and often incur legal liability terminating problem employees – especially when there is a lack of notice regarding problems.
– Consider using Performance Improvement Plans but remember it is important to do the necessary follow up and follow through on any support the School has agreed to provide in the Performance Improvement Plan.
â-¡ Compensation Committee Review of Compensation before issuing employee contracts
The Board is obligated to ensure fair and reasonable compensation of the Head of School and others. The Board should appoint a compensation committee that will be tasked with providing for independent review and approval of compensation. The committee must be composed of individuals without a conflict of interest.
â-¡ Review employee health and other benefit packages, and determine whether any changes in benefit plans are needed.
â-¡ If the lease ends at the end of the school year, review lease terms in order to negotiate new terms or have adequate time to locate new space for the upcoming school year.
â-¡ Review tuition rates and fees relative to economic and demographic data for the School’s target market to determine whether to change the rates.
â-¡ Review student financial aid policies.
â-¡ Review and revise enrollment/tuition agreements.
â-¡ File all tax forms in a timely manner:
Forms 990, 990EZ
– Form 990:
⦠Tax-exempt organizations must file Form 990 if the annual gross receipts are more than $200,000, or the total assets are more than $500,000.
– Form 990-EZ
⦠Tax-exempt organizations whose annual gross receipts are less than $200,000, and total assets are less than $500,000 can file either form 990 or 990-EZ.
– A School below college level affiliated with a church or operated by a religious order is exempt from filing Form 990 series forms. (See IRS Regulations section 1.6033-2(g)(1)(vii)).
– The 990 series forms are due every year by the 15th day of the 5th month after the close of your tax year. For example, if your tax year ended on December 31, the e-Postcard is due May 15 of the following year. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.
– The School should make its IRS form 990 available in the business office for inspection.
Other required Tax Forms common to business who have employees include Forms 940, 941, 1099, W-2, 5500
â-¡ Annual review of finances (if the fiscal year ended January 1st)
The School’s financial results should be reviewed annually by the person(s) independent of the School’s financial processes (including initiating and recording transactions and physical custody of School assets). For schools not required to have an audit, this can be accomplished by a trustee with the requisite financial skills to conduct such a review.
The School should have within its financial statements a letter from the School’s independent accountants outlining the audit work performed and a summary of results.
Schools should consider following the California Nonprofit Integrity Act when conducting audits, which include the formation of an audit committee:
– Although the Act expressly exempts educational institutions from the requirement of having an audit committee, the inclusion of such a committee reflects a “best practice” that is consistent with the legal trend toward such compliance. The audit committee is responsible for recommending the retention and termination of an independent auditor and may negotiate the independent auditor’s compensation. If an organization chooses to utilize an audit committee, the committee, which must be appointed by the Board, should not include any members of the staff, including the president or chief executive officer and the treasurer or chief financial officer. If the corporation has a finance committee, it must be separate from the audit committee. Members of the finance committee may serve on the audit committee; however, the chairperson of the audit committee may not be a member of the finance committee and members of the finance committee shall constitute less than one-half of the membership of the audit committee. It is recommended that these restrictions on the makeup of the Audit Committee be expressly written into the Bylaws.
JANUARY/FEBRUARY
â-¡ Review and revise/update annual employment contracts.
â-¡ Conduct audits of current and vacant positions to determine whether positions are correctly designated as exempt/non-exempt under federal and state laws.
FEBRUARY- EARLY MARCH
â-¡ Issue enrollment/tuition agreements for the following school year.
â-¡ Review field trip forms and agreements for any spring/summer field trips.
â-¡ Tax documents must be filed if School conducts raffles:
Schools must require winners of prizes to complete a Form W-9 for all prizes $600 and above. The School must also complete Form W-2G and provide it to the recipient at the event. The School should provide the recipient of the prize copies B, C, and 2 of Form W-2G; the School retains the rest of the copies. The School must then submit Copy A of Form W2-G and Form 1096 to the IRS by February 28th of the year after the raffle prize is awarded.
