Source: http://www.tea.state.tx.us/index4.aspx?id=8427
Timestamp: 2013-05-20 17:04:54
Document Index: 483468333

Matched Legal Cases: ['§2001', '§2001', '§7', '§7', '§7', '§7', '§109', '§109', '§45', '§2']

Texas Education Agency - May 2010 Committee on School Finance/Permanent School Fund Item 2
May 2010 Committee on School Finance/Permanent School Fund Item 2
Adoption of Review of 19 TAC Chapter 109, Budgeting, Accounting, and AuditingMay 21, 2010 COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION STATE BOARD OF EDUCATION: ACTION SUMMARY: Texas Government Code, §2001.039, establishes a four-year rule review cycle for all state agency rules, including State Board of Education (SBOE) rules. This item presents the adoption of the review of SBOE rules in 19 TAC Chapter 109, Budgeting, Accounting, and Auditing, Subchapters A-D. The rules being reviewed provide requirements for school districts relating to budgeting, accounting, financial reporting, and auditing; Texas Education Agency (TEA) audit functions; adoption by reference of the Financial Accountability System Resource Guide; and the uniform bank bid and depository contract. STATUTORY AUTHORITY: The statutory authority for the rule review is Texas Government Code, §2001.039. The statutory authority for 19 TAC Chapter 109 is Texas Education Code (TEC), §§7.102(c)(32), 44.001, 44.002, 44.007, and 44.008, for Subchapter A; TEC, §§7.102(c)(32), 44.001, 44.008, 44.010, and 42.152, for Subchapter B; TEC, §§7.055, 7.102(c)(32), 44.001, 44.007, and 44.008, for Subchapter C; and TEC, §§7.102(c)(34), 45.206, and 45.208, for Subchapter D. PREVIOUS BOARD ACTION: The SBOE last adopted the review of 19 TAC Chapter 109, Subchapters A-D, in May 2006, finding that the reasons for initially adopting the rules continue to exist. A subsequent amendment has been made to Subchapter C to update the Financial Accountability System Resource Guide. Amendments have also been made to Subchapter D to update the bid form, the contract form, and the surety bond form, as well as add a new proposal form in rule. The review of 19 TAC Chapter 109, Subchapters A-D, was presented for discussion at the March 2010 SBOE meeting. BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: The SBOE rules in 19 TAC Chapter 109 are organized as follows: Subchapter A, Budgeting, Accounting, Financial Reporting, and Auditing for School Districts; Subchapter B, Texas Education Agency Audit Functions; Subchapter C, Adoptions by Reference; and Subchapter D, Uniform Bank Bid or Request for Proposal and Depository Contract. Following is a summary of each subchapter. Subchapter A. Budgeting, Accounting, Financial Reporting, and Auditing for School Districts The rule in this subchapter provides for a uniform system of accounting in public schools. Under current rules, school districts must use a uniform accounting system and maintain certain information for reporting to the TEA. No changes to 19 TAC Chapter 109, Subchapter A, are recommended at this time. Subchapter B. Texas Education Agency Audit FunctionsThe rules in this subchapter provide for an annual audit plan, the completion and review of independent audits, and reporting and auditing for state compensatory education funds. School districts are held accountable for the use of compensatory education allotments through desk reviews and detailed investigations as needed to assure compliance with the limitations in statute and rule. No changes to 19 TAC Chapter 109, Subchapter B, are recommended at this time. Subchapter C. Adoptions By ReferenceThe rule in this subchapter adopts by reference the Financial Accountability System Resource Guide (Resource Guide). The Resource Guide describes rules for financial accounting in modules for financial accountability and reporting, budgeting, purchasing, auditing, site-based decision making, accountability, data collection and reporting, management, state compensatory education, GASB 34, and dropout audits. The Resource Guide also includes a special supplement for nonprofit charter school chart of accounts. Public school districts use the Resource Guide to meet the accounting, auditing, budgeting, and reporting requirements as set forth in the TEC and other state statutes relating to public school finance. The Resource Guide is available on the TEA website at http://www.tea.state.tx.us/index4.aspx?id=1222. Under 19 TAC §109.41(b), Financial Accountability System Resource Guide, the commissioner of education shall amend the Resource Guide, adopting it by reference, as needed, after informing the SBOE of the intent to amend the Resource Guide and of the effect of proposed amendments. An item informing the SBOE of the intent to amend the Resource Guide was included as part of the November 2009 agenda. The adopted amendment to 19 TAC §109.41, which references the most recent version of the Resource Guide, dated January 2010, takes effect April 26, 2010. No changes to 19 TAC Chapter 109, Subchapter C, are recommended at this time. Subchapter D. Uniform Bank Bid or Request for Proposal and Depository Contract The rules in this subchapter provide uniform depository bank bid, proposal, and contract forms. School districts are required to use a uniform bank bid form to obtain bids or proposals from depository banks located in the district at least 30 days before the termination of the current depository contract. However, school districts may add to the uniform bank bid form to specify additional depository requirements. Depository contracts have traditionally been executed for a two-year period, expiring on August 31 in odd-numbered years. Depository bank contracts are legal instruments that help ensure the security of all school district funds on deposit. Additionally, depository contracts contain contractual terms and conditions describing depository bank services and fees. Updates to the bid form, the contract form, and the surety bond form, as well as a new proposal form, were adopted by the SBOE to be effective August 17, 2008. The proposal form was developed to allow school districts an alternative method to select a depository bank as a result of an amendment to the TEC, §45.206. No changes to 19 TAC Chapter 109, Subchapter D, are recommended at this time. RULE REVIEW: The TEA filed the notice of proposed review of 19 TAC Chapter 109, Subchapters A-D, with the Texas Register following the March 2010 SBOE meeting. If authorized by the SBOE, the TEA will file the notice of adopted review with the Texas Register following the May 2010 SBOE meeting. The notice of adopted review will state that the SBOE finds that the reasons for adopting 19 TAC Chapter 109, Subchapters A-D, continue to exist. Any public comments received during the review of 19 TAC Chapter 109, Subchapters A-D, will also be filed. The filing of the notice of adopted review stating that the reasons for adoption continue to exist would not preclude any amendments that may be proposed at different dates through a separate rulemaking process. FISCAL IMPACT: None. PUBLIC AND STUDENT BENEFIT: Use of a uniform accounting system allows for consistent reporting of financial data and conditions across all school districts. In addition, the public and student benefit is improving financial accountability for education programs in the Texas school system, keeping financial management practices current with changes in state law and federal rules and regulations, and protecting public funds deposited in the event of any bank closures. Additionally, the bidding process and the proposed standard forms help ensure fair and open competition for depository bank contracts. Standard forms also provide an advantage to districts in evaluating the best bid in regard to depository bank services and related fees. PROCEDURAL AND REPORTING IMPLICATIONS: None. LOCALLY MAINTAINED PAPERWORK REQUIREMENTS: None. PUBLIC COMMENTS: Following the March 2010 SBOE meeting, notice of the proposed review of 19 TAC Chapter 109, Subchapters A-D, was filed with the Texas Register, initiating the official public comment period for the review. At the time this item was prepared, no comments had been received regarding this review. Any public comments received will be provided to the SBOE during the May 2010 meeting. ALTERNATIVES: None. OTHER COMMENTS AND RELATED ISSUES: The meeting of the Committee on School Finance/Permanent School Fund held in conjunction with the May 2010 SBOE meeting will be held earlier on April 30, 2010. As a result, the public comment period on the review of 19 TAC Chapter 109, Subchapters A-D, will still be open following the April 30 meeting. Any written public comments received after April 30 will be provided to the SBOE at its general meeting on May 21, 2010. In accordance with SBOE operating rule §2.10(d)(1), no oral public testimony will be taken on this item before the SBOE at its May 21, 2010, general meeting. Oral public testimony on this item will be taken at the April 30, 2010, Committee on School Finance/Permanent School Fund meeting. COMMISSIONER'S RECOMMENDATION: I recommend that the State Board of Education: Adopt the review of 19 TAC Chapter 109, Budgeting, Accounting, and Auditing, Subchapter A, Budgeting, Accounting, Financial Reporting, and Auditing for School Districts; Subchapter B, Texas Education Agency Audit Functions; Subchapter C, Adoptions by Reference; and Subchapter D, Uniform Bank Bid or Request for Proposal and Depository Contract. Respectfully submitted, Robert Scott Commissioner of Education Staff Members Responsible:Laura Taylor, Associate Commissioner Accreditation Rita Chase, Director Financial Audits Attachments:I. Statutory CitationsII. Text of 19 TAC Chapter 109, Budgeting, Accounting, and Auditing, Subchapter A, Budgeting, Accounting, Financial Reporting, and Auditing for School Districts; Subchapter B, Texas Education Agency Audit Functions; Subchapter C, Adoptions by Reference; and Subchapter D, Uniform Bank Bid or Request for Proposal and Depository Contract Page last modified on 10/12/2010.