By Shapiro                                             S.B. No. 875
         76R7322 CAS-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the financial accountability of school districts.
 1-4           SECTION 1.  Chapter 39, Education Code, is amended by adding
 1-5     Subchapter I to read as follows:
 1-7           Sec. 39.201.  FINANCIAL ACCOUNTABILITY RATING SYSTEM.  (a)
 1-8     The State Board of Education by rule shall establish a financial
 1-9     accountability rating system for school districts 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 board.
1-20           Sec. 39.202.  ADVISORY COMMITTEE.  To assist the board in
1-21     developing and implementing the financial accountability rating
1-22     system, the commissioner shall establish an advisory committee
1-23     composed of representatives of:
1-24                 (1)  the comptroller;
 2-1                 (2)  the state auditor;
 2-2                 (3)  Legislative Budget Board;
 2-3                 (4)  school business officials; and
 2-4                 (5)  business-oriented education advocacy groups.
 2-5           Sec. 39.203.  PRIVATE ACCOUNTING CONSULTANT.  The agency
 2-6     shall contract with a private accounting firm familiar with school
 2-7     district management and accounting practices to assist in
 2-8     developing and implementing the financial accounting system through
 2-9     systematically categorizing and analyzing school district audit
2-10     findings and through other means specified in the contract.
2-11           Sec. 39.204.  ANNUAL REPORTS.  (a)  Each year the agency
2-12     shall prepare and distribute to each school district a report that
2-13     rates the district's performance on the financial excellence
2-14     indicators.  The report shall include the recommendations of the
2-15     commissioner under Section 44.008(e) and other appropriate
2-16     recommendations.
2-17           (b)  The board of trustees shall disseminate and publicize
2-18     the report in accordance with the rules of the commissioner.
2-19           (c)  The report may be combined with other reports and
2-20     financial statements, including other reports under this chapter.
2-21           SECTION 2.  Section 44.008(e), Education Code, is amended to
2-22     read as follows:
2-23           (e)  The audit reports shall be reviewed by the agency, and
2-24     the commissioner shall notify the board of trustees of objections,
2-25     violations of sound accounting practices or law and regulation
2-26     requirements, or of recommendations concerning the audit reports
2-27     that the commissioner wants to make.  If the audit report reflects
 3-1     that penal laws have been violated, the commissioner shall notify
 3-2     the appropriate county or district attorney, who shall aggressively
 3-3     and thoroughly investigate, and the attorney general.  The
 3-4     commissioner shall have access to all vouchers, receipts, district
 3-5     fiscal and financial records, and other school records as the
 3-6     commissioner considers necessary and appropriate for the review,
 3-7     analysis, and passing on audit reports.
 3-8           SECTION 3.  Section 402.028, Government Code, is amended by
 3-9     adding Subsection (d) to read as follows:
3-10           (d)  The attorney general shall ensure that prosecuting
3-11     attorneys and the general public are aware of the availability of
3-12     assistance under this section, including assistance in the
3-13     investigation and prosecution of crimes involving public school
3-14     funds.
3-15           SECTION 4.  The importance of this legislation and the
3-16     crowded condition of the calendars in both houses create an
3-17     emergency and an imperative public necessity that the
3-18     constitutional rule requiring bills to be read on three several
3-19     days in each house be suspended, and this rule is hereby suspended,
3-20     and that this Act take effect and be in force from and after its
3-21     passage, and it is so enacted.