This article highlights the issues I have raised in previous posts. Harvard has $41 billion dollars in the bank. Yet it got an $8 million loan. They are getting blasted on the PR front (for good reason I think). There are also possible criminal ramifications. Here is what every loan applicant certifies: “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Whoever signed the application at Harvard should be seriously worried about going to jail. No entity with $41 billion in the bank can make that certification in good faith. Depending on the strength of their balance sheet, a charter school faces the same issue on a smaller scale.
That said, there is a consensus that charters that are actually laying off employees because the revenue to support them has vanished (employees of a before and after school program for example) stand in a different position regarding that certification.
Update: I have been informed by a prosecutor friend that colleges are exempt from the requirement to certify need. The DOE has called for a change in the law. Charter schools are not exempt, and my advice of caution in making the certification stands.