HBA-GUM C.S.S.B. 875 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 875 By: Shapiro Public Education 5/21/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, the school district accountability system is based entirely upon student performance data. The Texas Education Agency (TEA), the Business and Education Coalition (a business education advocacy group), and others are studying a "numbers-based" school district financial accountability system. The financial accountability system being discussed at staff level at TEA does not use the qualitative findings that local auditors find and put in districts' audited annual financial reports sent to TEA. C.S.S.B. 875 requires the commissioner of education to develop, in consultation with the comptroller of public accounts, proposals for a school district accountability rating system, to be presented to the Legislature no later than December 15, 2000. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 39, Education Code, by adding Subchapter I, as follows: SUBCHAPTER I. FINANCIAL ACCOUNTABILITY Sec. 39.201. PROPOSED FINANCIAL ACCOUNTABILITY RATING SYSTEM. Requires the commissioner of education, in consultation with the comptroller of public accounts, to develop proposals for a school district accountability rating system to be presented to the legislature no later than December 15, 2000. Provides that this section expires September 1, 2001. SECTION 2. Makes no change to Section 44.008(e), Education Code. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause. Effective date: upon passage.. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies SECTION 1 of the original (proposed Subchapter I (Financial Accountability), Chapter 39, Education Code) by amending proposed Section 39.201 and deleting proposed Section 39.202 (Annual Reports). In proposed Section 39.201 the substitute amends the title to read "Proposed Financial Accountability Rating System." The substitute redesignates proposed Section 39.201(c) to 39.201(a) and adds language to provide that the commissioner of education is required to develop, in consultation with the comptroller of public accounts, proposals for a school district accountability rating system to be presented to the legislature no later than December 15, 2000, and that this section expires September 1, 2001. Proposed Section 39.201 of the original required the commissioner of education (commissioner), by rule, to establish a financial accountability rating system (system) for school districts, to be implemented beginning in the 20012002 school year, based on the findings of a district's annual audit report, TEA's review of a district's annual audit report, and quantitative performance data relating to a district collected through the Public Education Information Management System; required the system to compare the performance of each school district on financial excellence indicators with standards established by the commissioner; and did not provide a deadline for the development and implementation of the financial accountability rating system by the commissioner under that section. Proposed Section 39.202 (Annual Reports) required the Texas Education Agency (TEA) to prepare and distribute to each school district a report that rates the district's prior year performance on the financial excellence indicators each year, starting with the 2002-2003 school year; required the report to include the recommendations of the commissioner under Section 44.008(e), and other appropriate recommendations; required the board of trustees to disseminate and publicize the report in accordance with the rules of the commissioner; and authorized the report to be combined with other reports and financial statements, including other reports under Chapter 44 (Public School System Accountability), Education Code. In SECTION 2, the substitute sets forth the unamended text of Section 44.008(e) (relating to audit reports reviewed by TEA), Education Code. SECTION 2 of the original amended that section to require the appropriate county or district attorney to thoroughly investigate the audit report if the report reflects that penal laws have been violated; require the school district, beginning with the 2000-2001 school year, to make available to TEA complete audited annual financial reports and management letters in an electronic format to be determined by the commissioner; and authorized the commissioner to waive this requirement if it will unduly burden a district. The substitute deletes SECTION 3 of the original, which amended Section 402.028 (Assistance to Prosecuting Attorneys), Government Code, by adding Subsection (d), to require the attorney general to ensure that prosecuting attorneys and the general public are aware of the availability of assistance under that section, including assistance in the investigation and prosecution of crimes involving public school funds. The substitute renumbers the subsequent SECTIONS accordingly.