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By: Bivins S.B. No. 894
(In the Senate - Filed March 5, 2003; March 11, 2003, read
first time and referred to Committee on Education; April 7, 2003,
reported adversely, with favorable Committee Substitute by the
following vote: Yeas 9, Nays 0; April 7, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 894 By: Shapiro
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. Subsections (a) and (e), Section 39.055,
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 that, as a result, require on-site
monitoring of dropout records. If the electronic audit of a
district's dropout records indicates that 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. Section 42.152, Education Code, is amended by
amending Subsections (c), (q), and (r) and adding Subsections (q-1)
through (q-4) 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 40 [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 shall [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, a 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 regular education 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 systems [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 education
program as required by Subsection (c). The reporting requirements
shall be managed electronically to minimize local administrative
costs. A district shall submit 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.
(q-1) 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 compensatory education expenditures.
If a review of the report submitted under Subsection (q), using the
risk-based system, indicates that a district is not at high risk of
having misused compensatory education funds or of having
inadequately reported compensatory education expenditures, the
district may not be required to perform a local audit of
compensatory education expenditures and is not subject to on-site
monitoring under this section.
(q-2) If a review of the report submitted under Subsection
(q), using the risk-based system, indicates that a district is at
high risk of having misused compensatory education funds, the
commissioner shall notify the district of that determination. The
district must respond to the commissioner 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 if the
district does not respond in a timely manner, the commissioner
shall:
(1) require the district to conduct a local audit of
compensatory education expenditures for the current or preceding
school year;
(2) order agency staff to conduct on-site monitoring
of the district's compensatory education expenditures; or
(3) both require a local audit and order on-site
monitoring.
(q-3) If a review of the report submitted under Subsection
(q), using the risk-based system, indicates that a district is at
high risk of having inadequately reported compensatory education
expenditures, the commissioner may require agency staff to assist
the district in following the proper reporting methods or amending
a district or campus improvement plan under Subchapter F, Chapter
11. If the district does not take appropriate corrective action
before the 45th day after the date the agency staff notifies the
district of the action the district is expected to take, the
commissioner may:
(1) require the district to conduct a local audit of
the district's compensatory education expenditures; or
(2) order agency staff to conduct on-site monitoring
of the district's compensatory education expenditures.
(q-4) The commissioner, in the year following a local [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).
(r) The commissioner shall grant a one-year exemption from
the requirements of Subsections (q)-(q-4) [Subsection (g)] to a
school district in which the group of students who have failed to
perform satisfactorily in the preceding school year on an
assessment instrument required under Section 39.023(a), (c), or (l)
subsequently performs on those assessment instruments at a level
that meets or exceeds a level prescribed by commissioner rule. Each
year the commissioner, based on the most recent information
available, shall determine if a school district is entitled to an
exemption for the following school year and notify the district of
that determination.
SECTION 3. Subsections (b), (c), and (d), Section 39.055,
Education Code, are repealed.
SECTION 4. Subsection (c), Section 42.152, 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.
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