By Pickett                                             H.B. No. 580
         77R3184 ESH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to annual audits of school dropout records.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1. Subchapter C, Chapter 39, Education Code, is
 1-5     amended by adding Section 39.055 to read as follows:
 1-6           Sec. 39.055.  ANNUAL AUDIT OF DROPOUT RECORDS; REPORT.
 1-7     (a)  The board of trustees of each school district shall have the
 1-8     district's dropout records audited annually at district expense by
 1-9     a public accountant or certified public accountant who:
1-10                 (1)  is certified or registered, as appropriate, and
1-11     licensed under Chapter 901, Occupations Code;
1-12                 (2)  has successfully completed training provided by
1-13     the agency in auditing school dropout records; and
1-14                 (3)  is not an employee of the district.
1-15           (b)  The audit of dropout records must be completed following
1-16     the end of each school year.
1-17           (c)  The audit of dropout records must meet at least the
1-18     minimum requirements and be in the format prescribed by the
1-19     commissioner, subject to review and comment by the state auditor.
1-20           (d)  A copy of the report of the audit of dropout records,
1-21     approved by the district's board of trustees, shall be filed by the
1-22     district with the agency not later than the 120th day after the end
1-23     of the school year for which the audit was made.  If the board of
1-24     trustees declines or refuses to approve the report, the board shall
 2-1     file with the agency a copy of the report with the board's
 2-2     statement giving detailed reasons for not approving the report.
 2-3           (e)  The agency shall review reports of audits of dropout
 2-4     records.  The commissioner shall notify the board of trustees of a
 2-5     school district of any objections the commissioner has to the
 2-6     report, violations of sound accounting practices or law and rule
 2-7     requirements revealed by the report, or commissioner
 2-8     recommendations concerning the report.  If the report reflects that
 2-9     penal laws have been violated, the commissioner shall notify the
2-10     county attorney, district attorney, or criminal district attorney,
2-11     as appropriate, and the attorney general.  The commissioner is
2-12     entitled to access to all district records the commissioner
2-13     considers necessary and appropriate for the review, analysis, and
2-14     approval of the reports.
2-15           SECTION 2.  Each school district shall have its dropout
2-16     records audited as required by Section 39.055, Education Code, as
2-17     added by this Act, beginning with dropout records for the 2001-2002
2-18     school year.
2-19           SECTION 3.  Not later than February 1, 2002, the Texas
2-20     Education Agency shall:
2-21                 (1)  develop a training program for public accountants
2-22     and certified public accountants in auditing public school dropout
2-23     records under Section 39.055, Education Code, as added by this Act;
2-24     and
2-25                 (2)  make the training program readily available to
2-26     public accountants and certified public accountants throughout this
2-27     state.
 3-1           SECTION 4. This Act takes effect September 1, 2001.