Christian Schools of Florida
Explanatory Standards

Explanatory Standard 6.4-7

Maintaining Budget, Insurance, Earned and Donated Income Within Reasonable Frameworks

1. The school’s finances are reviewed and documented annually by a licensed CPA using one of the following:
   
   
   1. a financial report
   2. a financial review
   3. a compilation report
   4. a certified audit
      
      
2. The financial documentation from the previous fiscal year is be presented to the accreditation team during the year of accreditation or re-accreditation. (Christian Schools of Florida reserves the right to require a certified audit sealed by an outside licensed CPA.)
   
   
3. The school’s fund-raising and resource development activities are documented and
   handled in a legal, ethical, and professional manner.
   
   
4. The school is covered by liability insurance.
   
   
   1. Premises and vehicular liability insurance provides $l,000,000 coverage as a
      minimum and, based on enrollment, provides a minimum amount of umbrella
      coverage as follows:
      
      1-200 = $2,000,000
      
      201-500 = $3,000,000
      
      501-up = $5,000,000
      
      
   2. Sufficient property insurance to cover the value of the school’s existing contents
      and structure(s), which may be provided through a commercial policy or through
      self-insurance. Documentation of coverage is maintained, either through a
      commercial policy or an ongoing line item in the operating budget of the school.
      
      
   3. Professional liability coverage for directors and officers is provided.
      
      
5. The school’s compensation policies (including salary schedules and other benefits)
   are available to and understood by the employees.
   
   
6. The school must participate in the Federal Social Security Program
   
   
7. The school avoids situations considered by Christian Schools of Florida to be
   violations of sound fiscal management. For example:
   
   
   1. current liabilities are in excess of current assets, or
   2. a definite plan for repayment of debt is absent, including the payment of the
      principal, as well as the interest, or
   3. a debt in such an amount that the school does not have the ability to repay, or
   4. a substantial portion of overall debt with provisions for a “balloon” repayment, or
      a debt that is payable on demand to the lender, or
   5. any significant delinquent contracted debt that is owed to a staff member, officer,
      or trustee of the school, as well as late payments of salaries to employees and/or
      payments to vendors, or
      
   6. three consecutive years of operation at a deficit (greater than 3% of budget), or
      evidenced by the end of the year financial statements without a plan to reverse
      the trend or eliminate the deficit, or
   7. any significant downtrend in enrollment without justifiable reasons.