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


Office of House Bill AnalysisC.S.S.B. 875
By: Shapiro
Public Education
5/21/1999
Committee Report (Substituted)



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.  C.S.S.B.
875 requires the commissioner of education to develop, in consultation with
the comptroller of public accounts, proposals for a school district
accountability rating system, to be presented to the Legislature no later
than December 15, 2000. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency or institution. 

SECTION BY SECTION ANALYSIS

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

SUBCHAPTER I.  FINANCIAL ACCOUNTABILITY 

Sec. 39.201.  PROPOSED FINANCIAL ACCOUNTABILITY RATING SYSTEM. Requires the
commissioner of education, in consultation with the comptroller of public
accounts, to develop proposals for a school district accountability rating
system to be presented to the legislature no later than December 15, 2000.
Provides that this section expires September 1, 2001. 

SECTION 2.  Makes no change to Section 44.008(e), Education Code. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.
            Effective date: upon passage..

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies SECTION 1 of the original (proposed Subchapter I
(Financial Accountability), Chapter 39, Education Code) by amending
proposed Section 39.201 and deleting proposed Section 39.202 (Annual
Reports).  In proposed Section 39.201 the substitute amends the title to
read "Proposed Financial Accountability Rating System."  The substitute
redesignates proposed Section 39.201(c) to 39.201(a) and adds language to
provide that the commissioner of education is required to develop, in
consultation with the comptroller of public accounts, proposals for a
school district accountability rating system to be presented to the
legislature no later than December 15, 2000, and that this section expires
September 1, 2001.  Proposed Section 39.201 of the original required the
commissioner of education (commissioner), by rule, to establish a financial
accountability rating system (system) for school districts, to be
implemented beginning in the 20012002 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;
required the system to compare the performance of each school district on
financial excellence indicators with standards established by the
commissioner; and did not provide a deadline for the development and
implementation of the financial accountability rating system by the
commissioner under that section.  Proposed Section 39.202 (Annual Reports)
required 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; required the report to include the recommendations
of the commissioner under Section 44.008(e), and other appropriate
recommendations; required the board of trustees to disseminate and
publicize the report in accordance with the rules of the commissioner; and
authorized the report to be combined with other reports and financial
statements, including other reports under Chapter 44 (Public School System
Accountability), Education Code.  

In SECTION 2, the substitute sets forth the unamended text of Section
44.008(e) (relating to  audit reports reviewed by TEA), Education Code.
SECTION 2 of the original amended that section to require the appropriate
county or district attorney to thoroughly investigate the audit report if
the report reflects that penal laws have been violated; require 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; and authorized the
commissioner to waive this requirement if it will unduly burden a district.

The substitute deletes SECTION 3 of the original, which amended Section
402.028 (Assistance to Prosecuting Attorneys), 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 that section, including assistance in the investigation
and prosecution of crimes involving public school funds.  The substitute
renumbers the subsequent SECTIONS accordingly.