8VAC40-31-160. Certification criteria for all postsecondary schools.

Section H.1 indicates that compiled  financial statements are sufficient to report financial standing to SCHEV, but section I requires that the Current (non-Title IV) Tuition Liability be indicated in an audited financial statement, not a reviewed or compiled financial statement.  Also, section I.3 requires an audited financial statement to qualify for a surety instrument waiver.

Financial audits for small businesses cost a minimum of around $10,000, which can present a significant burden to a small institution.

Please consider one or more of these alternative approaches:

• As an alternative to audited financial statements accept compiled financial statements certified as true and correct by the chief executive officer of the institution, or

• Base the required level of financial statement validation on the school’s annual gross tuition, e.g., accept compiled statements in place of reviewed or audited statements for institutions with annual gross tuition of less than $500,000, analogous to the fee levels specified in Section 8VAC40-31-260, or

• Exclude from your surety bond requirement schools that do not financially obligate students at any point in time for more than a single class not exceeding 40 contact hours.  Our students attend classes within our programs in sequence.  This program structure is common within our industry and is particularly advantageous to part-time, evening students.  We propose to collect payment only for individual classes, in sequence, with no individual class exceeding 40 contact hours (costing typically under $3,000).  For students this would limit financial risks associated with school stability and performance.