Financial Information Reporting Requirements for BPSS Schools

Number: 
4-0900
Date Issued: 
09/25/2000
Updated: 
12/28/2022

Required Annual Financial Statements for Licensed Private Career Schools (LPCS) and English As A Second Language (ESL) Schools

Annual financial statements and statistical reports are used for the purposes of school licensure, establishing fees or assessments pursuant to the New York Education Law (Education Law) as well as to document a school's financial viability.[1]

The following table summarizes the financial statement reporting mandates listed in the Education Law and Commissioner's Regulations for LPCS and ESL schools:

Financial Statements

Type of Statement

Criteria for Determining Type of Statement

§ 126.8(e)(3)

Audited Financial Statement 

Prepared in accordance with Generally Accepted Accounting Principles (GAAP)

 

Must be used for schools which meet the following requirements:

  1. Gross tuition income (GTI) of $500,000 or more and/or
  2. Combined Federal and State student financial aid in excess of $100,000 in a school fiscal year and/or
  3. GTI less than $500,000 but the school filed a reviewed financial statement for the previous fiscal year and/or
  4. In the year that a school is due for a licensure or certification renewal determination, an audited financial statement must be provided for the prior fiscal year.

Unaudited/Reviewed Financial Statement
 

Prepared in accordance with Generally Accepted Accounting Principles (GAAP)

 

Can only be used for schools which have:

1. GTI less than $500,000 and

2. Combined Federal and State student financial aid is less than $100,000 in a school fiscal year and

3. Filed an audited financial statement for the previous fiscal year (unless the school’s license or certification is due for renewal, in which case an audited financial statement must be provided for the prior fiscal year).

If BPSS determines that an LPCS or ESL school has submitted false or inaccurate statements or that a significant, unsubstantiated decline in gross tuition has occurred, the Commissioner may require the school to file an audited financial statement even during alternate years when an unaudited reviewed financial statement would ordinarily be allowed.

Financial Reporting Deadline Date

Pursuant to § 126.8(e)(3)(iii) of the Commissioner’s regulations, a school’s financial statements must be submitted to BPSS no later than 120 days after the school’s fiscal year end date. The commissioner may extend this deadline for up to 60 days for good cause shown, as determined by the commissioner.

Some examples of reporting deadlines based on fiscal year end dates are as follows:

  • Schools with a fiscal year end date of December 31, 2022, shall submit their required annual financial statement on or before May 1, 2023 (120 days after the fiscal year end date of December 31st).
  • Schools with a fiscal year end date of March 31, 2023, shall submit their required annual financial statements on or before August 1, 2023.
  • Schools with a fiscal year end date of June 30, 2023, shall submit their required annual financial statements on or before November 1, 2023.

Schools that fail to timely and completely submit the requisite financial statements are subject to disciplinary action under Education Law § 5003. This includes civil penalties (fines) being imposed. This may be done through a formal administrative process which may include a hearing, or via a settlement document whereby the school agrees to comply with its obligation by submitting the annual financial statement and/or pay outstanding assessments, if any, within a specified time period.

Fines will be imposed as follows: Fine Amount:

1st Violation:

  • $1,000 if Gross Tuition Income (GTI) is under 1 million
  • $3,500 if GTI is over 1 million

2nd Violation, if committed within 5 years of the first violation
  • $3,500 if GTI is under 1 million
  • $7,500 if GTI is over 1 million

3rd Violation
  • $5,000 if GTI is under 1 million
  • $7,500 if GTI is over 1 million

4th Violation
  • $7,500 if GTI is under 1 million
  • $7,500 if GTI is over 1 million

Ultimately, failure to submit a financial statement as required, could result in the suspension or revocation of a school’s license or certification and could also jeopardize a school’s renewal application under Education Law § 5001(4), which makes submission of an audited financial statement a condition of license renewal. Further, a school’s failure to submit a required financial statement or pay assessments and fines owed are triggering events under the regulations which could result in a determination that the school is not financially viable. See Commissioner’s regulations at § 126.8.

Therefore, in order for a school to have complied with its financial reporting obligations, the school’s financial statement must be provided to BPSS timely, i.e., by the deadline date, and must be submitted, i.e., by uploading them to the BPSS web-based system.

Instructions for submitting the annual financial statement to the BPSS web-based system:

  1. Log-in to the BPSS system
  2. After selecting School Administrator role, click the Help link on the top green tool bar of the BPSS web-based system.
  3. From the BPSS Help Documents window, select Financial Statement Application. This document will provide step-by-step instructions for financial submissions.

Finally, to comply with the reporting requirements that this guideline has described, the documents timely submitted must be complete. This means that they must be submitted in the correct form and must contain the information they are supposed to contain as outlined in the section below.

Key Financial Statement Requirements

A complete financial statement for LPCS and ESL schools includes:

  • Preparation in accordance with Generally Accepted Accounting Principles (GAAP) in the USA. Preparing financial statements in accordance with Generally Accepted Accounting Standards (GAAS) IS NOT ACCEPTABLE.
  • An Independent Auditor’s Opinion (either audited or reviewed, depending on the type of statement required to be submitted that year)
  • A Balance Sheet
  • A Statement of Income and Retained Earnings
  • A Statement of Cash Flows
  • Notes to the Statements (either audited or reviewed, depending on the type of statement required to be submitted that year)
  • Federal Composite Score of the Parent Company
     

Annual financial statements shall include the following data disaggregated by each licensed or certified location as per §126.8(e)(3)(iv) of the Commissioner’s regulations:

  • gross tuition income for all approved occupational curricula and non-occupational courses; and
  • an itemized account of tuition refunds due and owing to past or presently enrolled students, separated out for each licensed or certified location.

If a corporate entity owns more than one LPCS or ESL school and submits a single financial statement, BPSS requires that the tuition income (gross and net) for each licensed location be clearly traceable. A supplementary schedule may be used for this purpose. Our auditor must be able to clearly ascertain the gross tuition income for each location in order to accurately calculate fees and payments.

All financial statements must be prepared by CPAs who are properly licensed and authorized to conduct business in New York State. Verify a licensed CPA here: OP License Verification
Note: this website works best utilizing Internet Explorer, not Chrome.

If a school has technical difficulty uploading documents, it must immediately document that fact in writing in an email to BPSS.

Questions and Concerns

Any questions or concerns regarding financial statements may be directed to: bpssschoolreviews@nysed.gov

Authority

Education Law § 5001(4), § 5003

Commissioner’s Regulations set forth at 8 NYCRR Part 126.8