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Amend CSHB 3459 by adding the following SECTION in the 
appropriate place and renumber accordingly:
	(1)  "SECTION ____.  (a)  The comptroller of public 
accounts shall contract with a consultant for a comprehensive audit 
of regional education service centers in this state.  The audit must 
include:
(1)  a detailed analysis of all services provided by 
regional education service centers that identifies, for each 
service provided:
(A)  the percentage of school districts 
receiving the service;                
(B)  the costs to the regional education service 
centers of providing the service;
(C)  the charges imposed on school districts by 
the regional education service centers for providing the service; 
and 
(D)  the difference between the amount 
determined under Paragraph (B) of this subdivision and the amount 
determined under Paragraph (C) of this subdivision;
(2)  an evaluation of whether any services provided by 
a regional education service center could be provided at a lower 
cost by an alternative service provider, as determined based on a 
survey of potential alternative service providers;
(3)  an analysis of the governance structures of 
regional education service centers;
(4)  a review of the financial condition of regional 
education service centers and their current funding sources to 
determine the adequacy of state appropriations to regional 
education service centers and whether those appropriations should 
continue to be made;
(5)  a review of the number and geographic 
distribution of regional education service centers;
(6)  a review of the institutional structure of 
regional education service centers, with consideration of whether a 
separate system of Texas Education Agency field offices would be 
appropriate or whether any regional education service center 
functions should be transferred to Texas Education Agency 
facilities; and 
(7)  an analysis of the support functions of regional 
education service centers to determine whether support 
requirements could be decreased through business processes or 
application redesigns.
	(b)  Costs of the audit required by Subsection (a) of this 
section shall be paid using amounts appropriated for the fiscal 
biennium ending August 31, 2005, to regional education service 
centers or to the Texas Education Agency for the costs of services 
provided by regional education service centers, not to exceed a 
total amount of $750,000.
	(c)  Not later than December 1, 2004, the comptroller of 
public accounts shall submit a report to the legislature concerning 
the results of the audit required by Subsection (a) of this section.  
The report must include recommendations for a regional education 
service center funding mechanism under which at least 80 percent of 
center funds are derived from fee-for-service contracts with school 
districts."