By: Shapiro S.B. No. 875 A BILL TO BE ENTITLED AN ACT 1-1 relating to the financial accountability of school districts. 1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-3 SECTION 1. Chapter 39, Education Code, is amended by adding 1-4 Subchapter I to read as follows: 1-5 SUBCHAPTER I. FINANCIAL ACCOUNTABILITY 1-6 Sec. 39.201. FINANCIAL ACCOUNTABILITY RATING SYSTEM. 1-7 (a) The commissioner by rule shall establish a financial 1-8 accountability rating system for school districts, to be 1-9 implemented beginning in the 2001-2002 school year, based on: 1-10 (1) the findings of a district's annual audit report 1-11 under Section 44.008; 1-12 (2) the agency's review of a district's annual audit 1-13 report under Section 44.008(e); and 1-14 (3) quantitative performance data relating to a 1-15 district collected through the Public Education Information 1-16 Management System (PEIMS) established under Section 42.006. 1-17 (b) The financial accountability rating system shall compare 1-18 the performance of each school district on financial excellence 1-19 indicators with standards established by the commissioner. 1-20 (c) The commissioner shall in consultation with the 1-21 comptroller develop and implement the financial accountability 1-22 rating system. 1-23 Sec. 39.202. ANNUAL REPORTS. (a) Each year, starting with 1-24 the 2002-2003 school year, the agency shall prepare and distribute 2-1 to each school district a report that rates the district's prior 2-2 year performance on the financial excellence indicators. The 2-3 report shall include the recommendations of the commissioner under 2-4 Section 44.008(e) and other appropriate recommendations. 2-5 (b) The board of trustees shall disseminate and publicize 2-6 the report in accordance with the rules of the commissioner. 2-7 (c) The report may be combined with other reports and 2-8 financial statements, including other reports under this chapter. 2-9 SECTION 2. Subsection (e), Section 44.008, Education Code, 2-10 is amended to read as follows: 2-11 (e) The audit reports shall be reviewed by the agency, and 2-12 the commissioner shall notify the board of trustees of objections, 2-13 violations of sound accounting practices or law and regulation 2-14 requirements, or of recommendations concerning the audit reports 2-15 that the commissioner wants to make. If the audit report reflects 2-16 that penal laws have been violated, the commissioner shall notify 2-17 the appropriate county or district attorney, who shall thoroughly 2-18 investigate, and the attorney general. The commissioner shall have 2-19 access to all vouchers, receipts, district fiscal and financial 2-20 records, and other school records as the commissioner considers 2-21 necessary and appropriate for the review, analysis, and passing on 2-22 audit reports. Beginning with the 2000-2001 school year, school 2-23 districts shall make available to the agency their complete audited 2-24 annual financial reports and management letters in an electronic 2-25 format to be determined by the commissioner. The commissioner may 2-26 waive this requirement if it will unduly burden a district. 3-1 SECTION 3. Section 402.028, Government Code, is amended by 3-2 adding Subsection (d) to read as follows: 3-3 (d) The attorney general shall ensure that prosecuting 3-4 attorneys and the general public are aware of the availability of 3-5 assistance under this section, including assistance in the 3-6 investigation and prosecution of crimes involving public school 3-7 funds. 3-8 SECTION 4. This Act takes effect September 1, 1999. 3-9 SECTION 5. The importance of this legislation and the 3-10 crowded condition of the calendars in both houses create an 3-11 emergency and an imperative public necessity that the 3-12 constitutional rule requiring bills to be read on three several 3-13 days in each house be suspended, and this rule is hereby suspended, 3-14 and that this Act take effect and be in force from and after its 3-15 passage, and it is so enacted.