§ 51.6. Financial responsibility.
(a) A school applying for a license shall include with its application evidence that it has available financial resources or forms of surety adequate to reimburse the unearned tuition whenever the licensed private academic school ceases to operate. Schools shall be exempt from this requirement when prepaid tuition is paid for a period no longer than the 30-day closure notice required in § 51.7 (relating to closure).
(b) To satisfy the requirements of subsection (a), a school shall provide evidence of its financial responsibility by submitting to the Board one of the following:
(1) Financial report. If the school chooses to satisfy subsection (a) by submitting a financial report, the following apply:
(i) An audit conducted by a certified public accountant shall be performed annually on the financial records of the school and reported on forms provided by the Board.
(ii) A letter of assurance prepared by and attested to by the certified public accountant shall be submitted to the Board with the audit required by subparagraph (i).
(iii) The Board reserves the right to require, on 30 days written notice, an interim financial report.
(2) Surety. If the school chooses to satisfy subsection (a) by securing a form of surety, the school shall obtain a surety bond given in the Commonwealth in sufficient amount to meet the requirements in this paragraph. The surety bond shall exist at the following level:
(i) For an initial private academic school license, a licensee which requires prepaid tuition shall obtain a surety bond in an amount equal to the number of students times the prepaid tuition rate, with a minimum surety level of $10,000.
(ii) For a licensee applying for the renewal of a license, the licensee shall obtain a surety bond in an amount no less than $10,000 plus an additional amount of $10,000 for every $100,000 of prepaid tuition collected during the previous licensure year. A licensee which has collected $100,000 or less in prepaid tuition during the previous licensure year is not required to obtain a surety bond in excess of $10,000. No licensee is required to obtain a surety bond in excess of $100,000.
(c) Review and approval. The financial report or level of surety established by a school is subject to the review and approval of the Board. Board approval is a condition precedent to the granting or renewal of a license. Approval of a financial report or surety does not relieve the school, its sureties or accountants of responsibilities and liabilities imposed upon them by law.
(d) Alteration by school. A school shall notify and receive approval from the Board prior to making changes in its approved level of surety. The school shall immediately notify the Board if there are changes made in its financial report.
Authority The provisions of this § 51.6 issued under the Private Academic Schools Act (24 P. S. § § 6701—6722).
Source The provisions of this § 51.6 adopted March 8, 1991, effective March 9, 1991, 21 Pa.B. 943.
Cross References This section cited in 22 Pa. Code § 51.4 (relating to license).
No part of the information on this site may be reproduced for profit or sold for profit.
This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
