By: Hochberg H.B. No. 2481
A BILL TO BE ENTITLED
AN ACT
relating to financial accountability for school districts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter I, Chapter 39, Education Code, is
amended by adding Sections 39.2021 and 39.2022 to read as follows:
Sec. 39.2021. FINANCIAL SOLVENCY REVIEW REQUIRED. (a) The
agency shall develop a review process to anticipate the future
financial solvency of each school district. The review process
shall analyze:
(1) district revenues and expenditures for the
preceding school year; and
(2) projected district revenues and expenditures for
the current school year and the following five school years.
(b) In analyzing the information under Subsection (a), the
review process developed must consider, for the preceding school
year, the current school year, and the following five years, as
appropriate:
(1) student-to-staff ratios relative to expenditures,
including average staff salaries;
(2) the rate of depletion of the district general fund
balance;
(3) the number of students enrolled in the district;
(4) the adopted tax rate of the district;
(5) any independent audit report prepared for the
district; and
(6) actual financial data for the district for the
month of September.
(c) The agency shall consult school district financial
officers in developing the review process under this section.
(d) The agency shall develop a computer software template
for school districts to use in submitting information to the agency
for purposes of this section. Each district shall update
information to the template within the period prescribed by the
commissioner. The commissioner shall adopt rules under this
subsection to allow a district to enter estimates of critical data
into the template before the district adopts its budget. The
template must:
(1) be capable of importing, to the extent
practicable, data a district has previously submitted to the
agency;
(2) include an entry space that allows a district to
enter information explaining any irregularity in data submitted;
and
(3) provide alerts for:
(A) a student-to-staff ratio that is
significantly outside the norm;
(B) a rapid depletion of the district general
fund balance; and
(C) a significant discrepancy between actual
budget figures and projected revenues and expenditures.
(e) An alert in the template developed under Subsection (d)
must be developed to notify the agency immediately on the
occurrence of a condition described by Subsection (d)(3). After
the agency is alerted, the agency shall immediately notify the
affected school district regarding the condition triggering the
alert.
Sec. 39.2022. PROJECTED DEFICIT. (a) If the review process
under Section 39.2021 indicates a projected deficit for a school
district general fund within the following five school years, the
district shall provide the agency interim financial reports,
supplemented by staff and student count data, as needed, to
evaluate the district's current budget status.
(b) If the interim financial data provided under Subsection
(a) substantiates the projected deficit, the school district shall
develop a financial plan and submit the plan to the agency for
approval. The agency may approve the plan only if the agency
determines the plan will permit the district to avoid the projected
insolvency.
(c) The commissioner shall assign a school district an
accredited-warned status if:
(1) the district fails to submit a plan as provided by
Subsection (b);
(2) the district fails to obtain approval from the
agency for a plan as provided by Subsection (b);
(3) the district fails to comply with a plan approved
by the agency under Subsection (b); or
(4) the agency determines in a subsequent school year,
based on financial data submitted by the district, that the
approved plan for the district is no longer sufficient or is not
appropriately implemented.
SECTION 2. Section 39.203(b), Education Code, is amended to
read as follows:
(b) The annual financial management report must include:
(1) a description of the district's financial
management performance based on a comparison, provided by the
agency, of the district's performance on the indicators adopted
under Section 39.202(b) to:
(A) state-established standards; and
(B) the district's previous performance on the
indicators; [and]
(2) a description of the data submitted using the
computer software template developed under Section 39.2021; and
(3) any descriptive information required by the
commissioner.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
takes effect September 1, 2009.