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. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Chapter 39, Education Code, is amended by adding 1-5 Subchapter I to read as follows: 1-6 SUBCHAPTER I. FINANCIAL ACCOUNTABILITY 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.