Assigned to ED FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
FACT SHEET FOR S.B. 1689
school districts; overexpenditures; ADE; notice
Purpose
Requires, if the Arizona Department of Education (ADE) determines without prior
notification from a county school superintendent that a school district has committed an
overexpenditure, ADE to notify the county school superintendent and take any required actions.
Background
A county school superintendent, on the voucher of a school district governing board, must
draw the county school superintendent's warrant on the county treasurer for all necessary expenses
against the school fund of a district. Unless ADE notifies the county school superintendent that
budget capacity exists, a warrant may not be drawn for an expenditure from the maintenance and
operation, capital outlay, adjacent ways or federal and state grant funds: 1) not included in the
school district's budget; or 2) for an expenditure that exceeds the amount budgeted and not
previously expended (A.R.S. § 15-304).
Statute requires a county school superintendent to notify ADE within two business days if,
in the county school superintendent's judgement, a school district has committed overexpenditure.
If ADE determines that a school district has failed to take appropriate action to resolve the
overexpenditure or determines that the original written notice of overexpenditure will cause the
school district's overall expenditures to exceed the school's general or unrestricted capital budget
limits by $50,000 or 0.5 percent, ADE must request that the matter be placed on a State Board of
Education (SBE) meeting agenda for action. Following a public meeting and taking testimony
from interested parties, the SBE must: 1) require ADE and the county school superintendent to
monitor the school district's expenditures; 2) direct ADE to contract with a level one fiscal crisis
team for on-site oversight and offsite monitoring for 12 months; 3) direct ADE to contract with a
level two discal crisis team for on-site oversight and offsite monitoring for 24 months; or 4) appoint
a receiver who may take any prescribed actions to address the financial mismanagement, subject
to the SBE's discretion. A school district that has been assigned a fiscal crisis team or receiver
must submit a fiscal management report to the SBE that outlines the plan to correct the
overexpenditure, including a timeline to resolve the overexpenditure and explanations of the
methods or procedures that will be implemented.
Overexpenditure means an expenditure that exceeds: 1) the general budget limit of the
school district or the amount budgeted by the school district, whichever is less; or 2) the
unrestricted capital budget limit of the school district or the amounted budgeted by the school
district, whichever is less (A.R.S. § 15-107).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation. FACT SHEET
S.B. 1689
Page 2
Provisions
1. Requires ADE, if ADE determines in its own judgement without prior notification from a
county school superintendent that a school district has committed an overexpenditure, to notify
the corresponding county school superintendent and take any required actions.
2. Makes technical and conforming changes.
3. Becomes effective on the general effective date.
Prepared by Senate Research
February 10, 2025
MH/ci