1-1 AN ACT
1-2 relating to a financial accountability rating system for, and
1-3 certain audit reports of, school districts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter I, Chapter 39, Education Code, is
1-6 amended by adding Sections 39.201 through 39.204 to read as
1-7 follows:
1-8 Sec. 39.201. DEFINITIONS. In this subchapter:
1-9 (1) "Parent" includes a guardian or other person
1-10 having lawful control of a student.
1-11 (2) "System" means the financial accountability rating
1-12 system.
1-13 Sec. 39.202. DEVELOPMENT AND IMPLEMENTATION. (a) The
1-14 commissioner shall, in consultation with the comptroller, develop
1-15 and implement a financial accountability rating system for school
1-16 districts in this state.
1-17 (b) The system must include uniform indicators adopted by
1-18 the commissioner by which to measure a district's financial
1-19 management performance.
1-20 Sec. 39.203. REPORTING. (a) The commissioner shall
1-21 develop, as part of the system, a reporting procedure under which:
1-22 (1) each school district is required to prepare and
1-23 distribute an annual financial management report; and
1-24 (2) the public is provided an opportunity to comment
1-25 on the report at a hearing.
2-1 (b) The annual financial management report must include:
2-2 (1) a description of the district's financial
2-3 management performance based on a comparison, provided by the
2-4 agency, of the district's performance on the indicators adopted
2-5 under Section 39.202(b) to:
2-6 (A) state-established standards; and
2-7 (B) the district's previous performance on the
2-8 indicators; and
2-9 (2) any descriptive information required by the
2-10 commissioner.
2-11 (c) The report may include:
2-12 (1) information concerning the district's:
2-13 (A) financial allocations;
2-14 (B) tax collections;
2-15 (C) financial strength;
2-16 (D) operating cost management;
2-17 (E) personnel management;
2-18 (F) debt management;
2-19 (G) facility acquisition and construction
2-20 management;
2-21 (H) cash management;
2-22 (I) budgetary planning;
2-23 (J) overall business management;
2-24 (K) compliance with rules; and
2-25 (L) data quality; and
2-26 (2) any other information the board of trustees
3-1 determines to be necessary or useful.
3-2 (d) The board of trustees of each school district shall hold
3-3 a public hearing on the report. The board shall give notice of the
3-4 hearing to owners of real property in the district and to parents
3-5 of district students. In addition to other notice required by law,
3-6 notice of the hearing must be provided:
3-7 (1) to a newspaper of general circulation in the
3-8 district; and
3-9 (2) through electronic mail to media serving the
3-10 district.
3-11 (e) After the hearing, the report shall be disseminated in
3-12 the district in the manner prescribed by the commissioner.
3-13 Sec. 39.204. RULES. The commissioner shall adopt rules as
3-14 necessary for the implementation and administration of this
3-15 subchapter.
3-16 SECTION 2. Subsection (d), Section 44.008, Education Code,
3-17 is amended to read as follows:
3-18 (d) A copy of the annual audit report, approved by the board
3-19 of trustees, shall be filed by the district with the agency not
3-20 later than the 150th [120th] day after the end of the fiscal year
3-21 for which the audit was made. If the board of trustees declines or
3-22 refuses to approve its auditor's report, it shall nevertheless file
3-23 with the agency a copy of the audit report with its statement
3-24 detailing reasons for failure to approve the report.
3-25 SECTION 3. (a) This Act takes effect September 1, 2001.
3-26 (b) The commissioner of education shall implement a
4-1 transitional financial accountability management system not later
4-2 than September 1, 2002.
4-3 (c) The commissioner of education shall fully implement the
4-4 financial accountability rating system prescribed by Subchapter I,
4-5 Chapter 39, Education Code, as amended by this Act, not later than
4-6 September 1, 2003.
4-7 (d) Section 44.008, Education Code, as amended by this Act,
4-8 applies beginning with the annual audit of school districts for the
4-9 2001-2002 school year.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 218 passed the Senate on
April 2, 2001, by a viva-voce vote; and that the Senate concurred
in House amendments on May 24, 2001, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 218 passed the House, with
amendments, on May 16, 2001, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor