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78R4839 ESH-D
By: Bivins S.B. No. 894
A BILL TO BE ENTITLED
AN ACT
relating to the reporting and auditing requirements relating to
school dropouts and to the use of compensatory education funds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 39.055(a) and (e), Education Code, are
amended to read as follows:
(a) The commissioner shall develop a process for auditing
school district dropout records electronically. The commissioner
shall also develop a system and standards for review of the audit or
use systems already available at the agency. The system must be
designed to identify districts that are at high risk of having
inaccurate dropout records and, as a result, require on-site
monitoring of dropout records. If the electronic audit of a
district's dropout records indicates a district is not at high risk
of having inaccurate dropout records, the district may not be
subject to on-site monitoring under this subsection. If the
risk-based system indicates that a district is at high risk of
having inaccurate dropout records, the district is entitled to an
opportunity to respond to the commissioner's determination before
on-site monitoring may be conducted. The district must respond not
later than the 30th day after the date the commissioner notifies the
district of the commissioner's determination. If the district's
response does not change the commissioner's determination that the
district is at high risk of having inaccurate dropout records or if
the district does not respond in a timely manner, the commissioner
shall order agency staff to conduct on-site monitoring of the
[board of trustees of each school district shall have the]
district's dropout records [audited annually at district expense by
a public accountant or certified public accountant who:
[(1) is certified or registered, as appropriate, and
licensed under Chapter 901, Occupations Code;
[(2) has successfully completed training provided by
the agency in auditing school dropout records; and
[(3) is not an employee of the district].
(e) [The agency shall review each report of an audit of
dropout records.] The commissioner shall notify the board of
trustees of a school district of any objection the commissioner has
to the district's dropout data [report], any violation of sound
accounting practices or of a law or rule revealed by the data
[report], or any recommendation by the commissioner concerning the
data [report]. If the data reflect [report reflects] that a penal
law has been violated, the commissioner shall notify the county
attorney, district attorney, or criminal district attorney, as
appropriate, and the attorney general. The commissioner is
entitled to access to all district records the commissioner
considers necessary or appropriate for the review, analysis, or
approval of district dropout data [a report].
SECTION 2. Sections 42.152(c) and (q), Education Code, are
amended to read as follows:
(c) Funds allocated under this section shall be used [only]
to fund supplemental programs and services designed to eliminate
any disparity in performance on assessment instruments
administered under Subchapter B, Chapter 39, or disparity in the
rates of high school completion between students at risk of
dropping out of school, as defined by Section 29.081, and all other
students. Specifically, the funds, other than an indirect cost
allotment established under State Board of Education rule, which
may not exceed 15 percent, may be used only to meet the costs of
providing a compensatory, intensive, or accelerated instruction
program under Section 29.081 or an alternative education program
established under Section 37.008 or to support a program eligible
under Title I of the Elementary and Secondary Education Act of 1965,
as provided by Pub. L. No. 103-382 and its subsequent amendments,
and by federal regulations implementing that Act, at a campus at
which at least 50 percent of the students are educationally
disadvantaged. In meeting the costs of providing a compensatory,
intensive, or accelerated instruction program under Section
29.081, a district's compensatory education allotment may be used
[only] for costs supplementary to the regular education program,
such as costs for program and student evaluation, instructional
materials and equipment and other supplies required for quality
instruction, supplemental staff expenses, salary for teachers of
at-risk students, smaller class size, and individualized
instruction. A home-rule school district or an open-enrollment
charter school must use funds allocated under Subsection (a) for a
purpose authorized in this subsection but is not otherwise subject
to Subchapter C, Chapter 29. Notwithstanding any other provisions
of this section:
(1) to ensure that a sufficient amount of the funds
allotted under this section are available to supplement
instructional programs and services, no more than 18 percent of the
funds allotted under this section may be used to fund disciplinary
alternative education programs established under Section 37.008;
[and]
(2) the commissioner may waive the limitations of
Subdivision (1) upon an annual petition, by a district's board and a
district's site-based decision making committee, presenting the
reason for the need to spend supplemental compensatory education
funds on disciplinary alternative education programs under Section
37.008, provided that:
(A) the [. The] district [shall] in its petition
reports [report] the number of students in each grade level, by
demographic subgroup, not making satisfactory progress under the
state's assessment system; and
(B) the [. The] commissioner makes the [will
make this] waiver request information available annually to the
public on the agency's website; and
(3) for purposes of this subsection, an alternative
education program specifically designed to serve students at risk
of dropping out of school, as defined by Section 29.081, is
considered to be a program supplemental to the overall educational
program, and a district may use its compensatory education
allotment for such a program.
(q) The State Board of Education, with the assistance of the
state auditor and the comptroller, shall develop and implement by
rule a reporting and auditing system for district and campus
expenditures of compensatory education funds to ensure that
compensatory education funds, other than the indirect cost
allotment, are spent [only] to supplement the regular program. The
reporting and auditing requirements shall be managed
electronically to minimize local administrative costs. A district
must submit a copy of the report required by this subsection not
later than the 150th day after the last day permissible for
resubmission of information required under Section 42.006. The
commissioner shall develop a system to identify school districts
that are at high risk of having used compensatory education funds
other than in compliance with Subsection (c) or of having
inadequately reported and audited those funds and, as a result,
require on-site monitoring under this subsection. If the
risk-based system indicates that a district is not at high risk of
having misused compensatory education funds or having inadequately
reported and audited those funds, the district may not be subject to
on-site monitoring under this subsection. If the risk-based system
indicates that a district is at high risk of having misused
compensatory education funds or having inadequately reported and
audited those funds, the district is entitled to an opportunity to
respond to the commissioner's determination before on-site
monitoring may be conducted. The district must respond not later
than the 30th day after the date the commissioner notifies the
district of the commissioner's determination. If the district's
response does not change the commissioner's determination that the
district is at high risk of having misused compensatory education
funds or having inadequately reported and audited those funds or if
the district does not respond in a timely manner, the commissioner
shall order agency staff to conduct on-site monitoring of the
district's compensatory education expenditures. The commissioner,
in the year following an audit of compensatory education
expenditures, shall withhold from a district's foundation school
fund payment an amount equal to the amount of compensatory
education funds the agency determines were not used in compliance
with Subsection (c). The commissioner shall release to a district
funds withheld under this subsection when the district provides to
the commissioner a detailed plan to spend those funds in compliance
with Subsection (c).
SECTION 3. Sections 39.055(b)-(d), Education Code, are
repealed.
SECTION 4. Section 42.152(c), Education Code, as amended by
this Act, applies to the use of compensatory education funds
allotted under Chapter 42, Education Code, for any school year,
including a school year before September 1, 2003.
SECTION 5. This Act takes effect September 1, 2003.