SRC-ARR C.S.S.B. 875 76(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 875
76R7322 CAS-DBy: Shapiro
Education
4/30/1999
Committee Report (Substituted)


DIGEST 

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 preliminarily studying a "numbers-based" school district financial
accountability system. The financial accountability system being discussed
at a  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 would require TEA, with the assistance of an advisory
committee, to create a school district financial accountability rating
system based upon findings in districts' audited financial reports and
quantitative data collected through the Public Education Information
Management System (PEIMS). 

PURPOSE

As proposed, C.S.S.B. 875 requires financial accountability of school
districts. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the commissioner of education in SECTION
1 (Section 39.201(a), Education Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 39, Education Code, by adding Subchapter I, as
follows: 
 
SUBCHAPTER I. FINANCIAL ACCOUNTABILITY

Sec. 39.201. FINANCIAL ACCOUNTABILITY RATING SYSTEM. Requires the
commissioner of education (commissioner), by rule, to establish a financial
accountability rating system (system) for school districts, to be
implemented beginning in the 2001-2002 school year, based on certain
criteria. Requires the system to compare the performance of each school
district on financial excellence indicators with standards established by
the commissioner. Requires the commissioner, in consultation with the
comptroller, to develop and implement the financial accountability rating
system.  

Sec. 39.204. ANNUAL REPORTS. Requires the Texas Education Agency (agency),
each year, starting with the 2002-2003 school year, to prepare and
distribute to each school district a report that rates the district's prior
year performance on the financial excellence indicators. Requires the
report to include the recommendations of the commissioner under Section
44.008(e) and other appropriate recommendations. Requires the board of
trustees to disseminate and publicize the report in accordance with the
rules of the commissioner. Authorizes the report to be combined with other
reports and financial statements, including other reports under this
chapter.  

SECTION 2.  Amends Section 44.008(e), Education Code, to require the
commissioner to notify the appropriate county or district attorney, who
shall aggressively and thoroughly investigate, and the attorney general, if
the audit report reflects that penal laws have been violated. Requires the
school district, beginning with the 2000-2001 school year, to make
available to the agency complete audited annual financial reports and
management letters in an electronic format to be determined by the
commissioner. Authorizes the commissioner to waive this requirement if it
will unduly burden a district. 

SECTION 4. Amends Section 402.028, 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
this section, including assistance in the investigation and prosecution of
crimes involving public school funds. 

SECTION 5. Effective date: September 1, 1999.

SECTION 6. Emergency clause.
                      Effective date: upon passage.

SUMMARY OF COMMITTEE CHANGES

SECTION 1. 

Amends Section 39.201, Education Code, to require the commissioner, rather
than the State Board of Education (board), by rule, to establish a system
for school districts, to be implemented beginning in the 2001-2002 school
year, based on certain criteria. Requires the system to compare the
performance of each school district on financial excellence indicators with
standards established by the commissioner, rather than board. Requires the
commissioner, in consultation with the comptroller, to develop and
implement the financial accountability rating system.  

 Deletes proposed Section 39.202, Education Code, regarding the advisory
committee. 

 Deletes proposed Section 39.203, Education Code, regarding private
accounting. 

Amends Section 39.204, Education Code, to require the agency, each year,
starting with the 2002-2003 school year, to prepare and distribute to each
school district a report that rates the district's prior year performance
on the financial excellence indicators. 

SECTION 2. 

Amends Section 44.008(e), Education Code,  to require the school district,
beginning with the 2000-2001 school year, to make available to the agency
complete audited annual financial reports and management letters in an
electronic format to be determined by the commissioner. Authorizes the
commissioner to waive this requirement if it will unduly burden a district. 

SECTION 5.

Adds new SECTION to set forth the effective date. Redesignates existing
SECTION accordingly.