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Caroline Kennedy is the vice chairman of the Fund for Public Schools.

The state assembly’s decision to study whether the Fund for Public Schools should be exempt from a state law that asks nonprofits for detailed financial disclosure reports is something to watch. That’s because the charity group’s exemption stems from a claim that has enabled the city Department of Education to opt out of a list of other laws and protocols: the notion that the Department of Education is not legally a city agency, and therefore doesn’t have to follow city law.

The claim doesn’t come from nowhere; the city school system has been a state-authorized entity since it was created in the 1840s, and only briefly became a fully city-run entity, thanks to a power play by Boss Tweed circa 1873. But the claim is important because it’s the reason the DOE has given for exempting itself from a laundry list of other city laws and protocols over the years. So if the assembly forces the Fund to disclose its finances, that could produce a ripple effect.

Here’s a partial list of laws and protocols the DOE has avoided via this claim, compiled largely from a list Leonie Haimson of Class Size Matters put together in testimony (Word doc) to a mayoral control panel recently:

• City agencies must follow competitive bidding procedures before granting contracts to outside groups, but the Department of Education does not have to and has given out many no-bid contracts.
• The Department of Education, with Mayor Bloomberg’s blessing, refuses to abide by a law the City Council passed called the Dignity for All Students Act.
• The City Council passed a law almost unanimously allowing students to carry cell phones to school, but the Department of Education kept its ban intact, arguing the council has no authority over the DOE’s discipline code.

The whole thing is especially confusing because, at other times, the Department of Education has appeared to exempt itself from state law. An example: the fact that the DOE gives barely no notice to official parent groups when it decides to close a school in their district — even though advocates say state law requires the department to consult with the parent groups, called community education councils.

The twin exemptions collide in confusing ways. A good example: There’s confusion over who has the primary authority to audit the Department of Education, the city or the state comptroller, according to a report (PDF) by a school governance commission put together by the city’s public advocate, Betsy Gotbaum. And education advocates, including Campaign for Fiscal Equity members, told me that the city comptroller has not been able to access basic reports on how the school system spent its money since 2004.

Correction: In an earlier version of this post, I misstated who has authority to audit the Department of Education.