§ 171.205. Exceptions to Generally Accepted Accounting Principles.
The schedule of expenses prepared by the school shall be presented in accordance with Generally Accepted Accounting Principles, with the exception of the following, which will not be included:
(1) Bad debts.
(2) Unsubstantiated related party costs.
(3) Cost of any individual insurance policies on the lives of officers, executives, administrators and other key staff.
(4) Expenses paid with funding from another governmental entity, other than funding from the Department for approved students.
(5) Fines, penalties, costs and damages assessed for failure to comply with Federal, State or local laws.
(6) Costs related to meal service for staff members who are not involved in direct supervision of students.
(7) Interest costs on loans from related parties at rates above the fair market rate available to the school.
(8) Lobbying efforts to influence the outcome of any Federal, State or local election, referendum, initiative or similar activity, or to promote the introduction, enactment, or modification of any current or future Federal or State legislation.
(9) Gains or losses on the sale of school assets.
(10) Rental costs in a related party transaction that are found to be above the fair market rental value of the property.
(11) Scholarships and discounts to students or their parents or other third parties.
(12) Administrative costs, as defined in § 171.206 (relating to administrative costs), in excess of 10% of total costs.
(13) Any money judgment, in excess of the deductible under an insurance policy, entered against the school or organization in administrative or court litigation and any settlement amounts, in excess of the deductible under an insurance policy, to avoid litigation.
(14) Costs associated with medical personnel that are not related to the provision of a student’s individualized education plan, except for costs related to a prudent level of oversight of students.
Cross References This section cited in 22 Pa. Code § 171.202 (relating to general guidelines).
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