HBA-GUM S.B. 875 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 875
By: Shapiro
Public Education
5/13/1999
Engrossed



BACKGROUND AND PURPOSE 

Currently, the school district accountability system is based entirely upon
student performance data. The Texas Education Agency (TEA), the Business
and Education Coalition (a business education advocacy group), and others
are studying a "numbers-based" school district financial accountability
system.  The financial accountability system being discussed at staff level
at TEA does not use the qualitative findings that local auditors find and
put in districts' audited annual financial reports sent to TEA.  S.B. 875
requires TEA, with the assistance of an advisory committee, to create a
school district financial accountability rating system based upon findings
in districts' audited financial reports and quantitative data collected
through the Public Education Information Management System (PEIMS). 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of education in
SECTION 1 (Section 39.201, Education Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 39, Education Code, by adding Subchapter I, as
follows: 

SUBCHAPTER I.  FINANCIAL ACCOUNTABILITY 

Sec. 39.201.  FINANCIAL ACCOUNTABILITY RATING SYSTEM.  Requires the
commissioner of education (commissioner), by rule, to establish a financial
accountability rating system (system) for school districts, to be
implemented beginning in the 2001-2002 school year, based on the findings
of a district's annual audit report, TEA's review of a district's annual
audit report, and quantitative performance data relating to a district
collected through the Public Education Information Management System.
Requires the system to compare the performance of each school district on
financial excellence indicators with standards established by the
commissioner.  Requires the commissioner, in consultation with the
comptroller of public accounts, to develop and implement the financial
accountability rating system.  

Sec. 39.202.  ANNUAL REPORTS.  Requires the Texas Education Agency (TEA) to
prepare and distribute to each school district a report that rates the
district's prior year performance on the financial excellence indicators
each year, starting with the 2002-2003 school year.  Requires the report to
include the recommendations of the commissioner under Section 44.008(e),
and other appropriate recommendations.  Requires the board of trustees to
disseminate and publicize the report in accordance with the rules of the
commissioner. Authorizes the report to be combined with other reports and
financial statements, including other reports under this chapter (Public
School System Accountability).  

SECTION 2.  Amends Section 44.008(e), Education Code, to require the
appropriate county or district attorney to thoroughly investigate the audit
report if the report reflects that penal laws have been violated.  Requires
the school district, beginning with the 2000-2001 school year, to make
available to TEA complete audited annual financial reports and management
letters in an electronic format to be determined by the commissioner.
Authorizes the commissioner to waive this  requirement if it will unduly
burden a district.  

SECTION 3.  Amends Section 402.028, Government Code, by adding Subsection
(d), to require the attorney general to ensure that prosecuting attorneys
and the general public are aware of the availability of assistance under
this section (Assistance to Prosecuting Attorneys), including assistance in
the investigation and prosecution of crimes involving public school funds.  

SECTION 4.  Effective date: September 1, 1999.

SECTION 6.  Emergency clause.
            Effective date: upon passage..