By: RodrÃguez Ramos H.B. No. 5571
A BILL TO BE ENTITLED
AN ACT
relating to the review, audit, and oversight of the Texas Education
Agency's administration of open-enrollment charter schools by the
Sunset Advisory Commission.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 325, Government Code, is amended by
adding Section 325.027 to read as follows:
Sec. 325.027. REVIEW OF OPEN-ENROLLMENT CHARTER SCHOOLS.
(a) In 2026 and every third year after that year, the commission
shall conduct a comprehensive forensic and performance audit of all
institutional functions, programs, and operations of contracts,
grants, and administration at the Texas Education Agency relating
to its administration and oversight of open-enrollment charter
schools.
(b) The audit shall identify and prepare for a report:
(1) all unallowable expenses, including payments,
purchases, administrative and executive compensation, salary
transactions, and contracted services and efficiency improvements
to administration and oversight functions. The report shall
contain the total compensation of the district superintendent and
other district governance including bonuses, awards, one-time
compensation, and any other contributions.
(2) each real property owned or leased by
open-enrollment charter schools, including ownership of the
property, whether the property includes an instructional facility,
information on each lease or mortgage agreement and the aggregate
annual and prior five-year amount of any related party payment
under each lease or mortgage agreement, information about the
amount and terms of each charter school's bonds and debt service,
whether a bond is backed by a guarantee from the Permanent School
Fund, current underlying rating of each bond backed by the Bond
Guarantee Program, and the aggregate amount of charter schools'
outstanding bonds;
(3) each charter school management company that
provides management services to an open-enrollment charter school.
The report shall contain the company's name, address, names of
officers including chief financial officer, and method of
calculation and amount of annual payment by each charter school to
each management company and affiliated company;
(4) all state funds, grants, or public resources used
for marketing, advertising, or sponsorship purchases. The report
shall contain open-enrollment charter school expenditures on
digital, print, radio, television, and social media
advertisements. The report shall contain sponsorship agreements
between the charter school and any private entity, including
payments made for naming rights, endorsements, and promotional
partnerships,
(5) conflicts of interest including whether a member
of the governing body of an open-enrollment charter school has a
substantial interest in a business entity as described by Section
171.002, Local Government Code, that contracts with the school.
(c) The commission shall prepare and provide the audit
report, including all related findings, by September 1, 2026. The
report shall be provided to the Speaker of the House, Lieutenant
Governor, House Appropriations Committee, the Senate Finance
Committee, and the House Delivery of Government Efficiency
Committee.
(d) The commission shall publish the audit report on its
official website no later than the 45th day after the audit's
completion. Each summary must remain publicly accessible for at
least five years and exclude information classified as confidential
or security-sensitive under state law.
(e) If the audit conducted under this section identifies
financial mismanagement, waste, fraud, or noncompliance with state
law, the Texas Education Agency shall:
(1) Develop and implement a corrective action plan
within 90 days;
(2) Submit progress reports every six months to the
commission and Legislative Budget Board until all deficiencies are
resolved.
(f) Open-enrollment charter schools reviewed by the
commission under this section are not subject to abolition.
SECTION 2. This Act takes effect September 1, 2025.