SENATE BILL NO. 1428

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Bill Status



S1428..........................................................by EDUCATION
SCHOOL DISTRICTS - Amends existing law relating to fiscal affairs of school
districts to revise the date on which audit reports are due; to provide for
a penalty for noncompliance; to provide for appeal to the State Board of
Education; to require school districts to respond to the State Department
of Education's inquiries regarding an audit report within a time certain;
to provide a penalty for failure to respond within the time limit
specified; and to provide for appeal to the State Board of Education.

02/11    Senate intro - 1st rdg - to printing
02/12    Rpt prt - to Educ
02/19    Rpt out - rec d/p - to 2nd rdg
02/20    2nd rdg - to 3rd rdg
02/25    3rd rdg - PASSED - 33-0-2
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Corder, Darrington, Davis, Fulcher, Geddes, Goedde, Hammond,
      Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
      Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- Coiner, Gannon
    Floor Sponsor - Goedde
    Title apvd - to House
02/26    House intro - 1st rdg - to Educ
03/05    Rpt out - rec d/p - to 2nd rdg
03/06    2nd rdg - to 3rd rdg
03/11    3rd rdg - PASSED - 63-5-2
      AYES -- Anderson, Andrus, Bayer, Bedke, Bell, Bilbao, Black, Block,
      Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez,
      Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
      Harwood, Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador,
      Lake, LeFavour, Loertscher, Mathews, McGeachin, Mortimer, Moyle,
      Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Ringo, Ruchti,
      Rusche, Sayler, Schaefer, Shepherd(02), Shepherd(08), Shirley,
      Shively, Smith(30), Smith(24), Stevenson, Thomas, Trail, Vander
      Woude, Wills, Wood(27), Wood(35), Mr. Speaker
      NAYS -- Barrett, Luker, Marriott, Nielsen, Thayn
      Absent and excused -- Roberts, Snodgrass
    Floor Sponsor - Patrick
    Title apvd - to Senate
03/12    To enrol
03/13    Rpt enrol - Pres signed - Sp signed
03/14    To Governor
03/17    Governor signed
         Session Law Chapter 160
         Effective: 07/01/08

Bill Text




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                                       IN THE SENATE

                                    SENATE BILL NO. 1428

                                   BY EDUCATION COMMITTEE

  1                                        AN ACT
  2    RELATING TO FISCAL AFFAIRS OF SCHOOL DISTRICTS; AMENDING SECTION 33-701, IDAHO
  3        CODE, TO REVISE THE DATE ON WHICH AUDIT REPORTS ARE DUE, TO PROVIDE A PEN-
  4        ALTY FOR NONCOMPLIANCE, TO PROVIDE FOR APPEAL TO THE STATE BOARD OF EDUCA-
  5        TION, TO REQUIRE SCHOOL DISTRICTS TO RESPOND TO THE  STATE  DEPARTMENT  OF
  6        EDUCATION'S  INQUIRIES REGARDING AN AUDIT REPORT WITHIN A TIME CERTAIN, TO
  7        PROVIDE A PENALTY FOR FAILURE TO RESPOND WITHIN THE TIME  LIMIT  SPECIFIED
  8        AND TO PROVIDE FOR APPEAL TO THE STATE BOARD OF EDUCATION.

  9    Be It Enacted by the Legislature of the State of Idaho:

 10        SECTION  1.  That  Section  33-701, Idaho Code, be, and the same is hereby
 11    amended to read as follows:

 12        33-701.  FISCAL YEAR -- PAYMENT AND ACCOUNTING OF FUNDS. The  fiscal  year
 13    of  each school district shall be a period of twelve (12) months commencing on
 14    the first day of July in each year.
 15        The board of trustees of each school district  shall  have  the  following
 16    powers and duties:
 17        1.  To  determine  and  order paid all lawful expenses for salaries, wages
 18    and purchases, whether or not there be money in the treasury  for  payment  of
 19    warrants  drawn  against any fund of the district. Warrants shall be signed by
 20    the treasurer of the district and countersigned by the chairman or vice-chair-
 21    man of the board of trustees.
 22        Whenever any school district has sufficient funds on deposit to do so,  it
 23    may  pay  any  allowed  claim for salaries, wages or purchases by regular bank
 24    check signed by the treasurer or assistant treasurer of the district and coun-
 25    tersigned by the chairman, or vice-chairman, of the board of trustees.
 26        The total amount of warrants or orders for warrants  drawn  on  any  fund,
 27    together with disbursements from such fund in any other manner made, shall not
 28    exceed  ninety-five  percent (95%) of the estimated income and revenue accrued
 29    or accruing to such fund for the same school year, until such income and reve-
 30    nue shall have been paid into the treasury to the credit of the district;
 31        2.  To invest all or part of any plant facilities  reserve  fund,  or  any
 32    fund  accumulated  for the payment of interest on, and the redemption of, out-
 33    standing bonds, or other obligations of the district in bonds or  certificates
 34    of  indebtedness  of  the United States of America, or in bonds or investments
 35    permitted by sections 67-1210 and 67-1210A, Idaho Code,  or  warrants  of  the
 36    state  of  Idaho,  or  in  warrants or tax anticipation notes of any county or
 37    school district of the state of Idaho, when such investments shall be due  and
 38    payable  on  or  before  the  date  any plant facilities reserve fund shall be
 39    required to be expended  or  any  bonds  or  other  obligations,  or  interest
 40    thereon, of the investing district shall become payable.
 41        Whenever  in  the  judgment  of the board of trustees, the proceeds of any
 42    bond issue should be temporarily invested pending the expenditure of such pro-
 43    ceeds for the purposes for which such bonds were issued, the proceeds  may  be

                                       2

  1    invested in the manner and form hereinabove prescribed. Any interest, or prof-
  2    its  accruing  from  such investments shall be used for the purposes for which
  3    the bonds were issued. Unless otherwise provided by law, any interest or prof-
  4    its accruing from the investment of any funds shall be credited to the general
  5    fund of the district;
  6        3.  To insure any  schoolhouse  and  other  property,  and  the  district,
  7    against  any loss by fire, casualty, or liability, and the board, its officers
  8    and employees, and to preserve its property for the benefit of  the  district.
  9    In case of loss of any insured property, any proceeds from insurance:
 10        (a)  May  be  expended in constructing a temporary or permanent structure,
 11        but no sum greater than the insurance proceeds shall be so expended except
 12        upon approval of a majority of the school district electors voting  in  an
 13        election called for that purpose; or
 14        (b)  May  be  placed  in  and  made  a part of the school plant facilities
 15        reserve fund of the district, if the district has such a fund; or
 16        (c)  May be placed in a separate account in the bond interest and  redemp-
 17        tion  fund of the district to repay any kind of obligation incurred by the
 18        district in replacing or restoring the property for  which  the  insurance
 19        proceeds  were  received, and shall not be included in the computations of
 20        bond and bond interest levies as provided in section 33-802A, Idaho Code.
 21        If the proceeds of any insurance received by a school district  by  reason
 22    of  loss  on  real property shall be less than five thousand dollars ($5,000),
 23    such proceeds may be credited to the general fund of the district;
 24        4.  To pay from the general fund of the district the expense of any member
 25    of the board incurred while traveling on the business of the board, or attend-
 26    ing any meeting called by the state board of education or by the state  super-
 27    intendent  of  public instruction, or attending any annual or special meetings
 28    of the state school trustees association, and to pay the membership fee of the
 29    board of trustees in said association. Whenever any member  of  the  board  of
 30    trustees  resides  at  such distance from the meeting place of the board as to
 31    require, in the judgment of the board,  such  member  to  incur  extraordinary
 32    expense  in  traveling from his home to and from said meeting place, the board
 33    may approve payment to such member of the extraordinary  expense  incurred  in
 34    attending any meeting of the board.
 35        For  the  purpose  of this paragraph, the term "expense" or "extraordinary
 36    expense" shall include allowance for mileage or actual travel  expense  incur-
 37    red;
 38        5.  To prepare, or cause to be prepared and published, in the manner here-
 39    inafter  prescribed, within one hundred twenty (120) days from the last day of
 40    each fiscal year, an annual statement of financial condition and report of the
 41    school district as of the end of such fiscal year in a form prescribed by  the
 42    state  superintendent  of  public  instruction.  Such  annual  statement shall
 43    include, but not be limited to, the amounts of money budgeted and received and
 44    from what sources, and the amounts budgeted  and  expended  for  salaries  and
 45    other  expenses  by  category.  Salaries may be reported in gross amount. Each
 46    school district shall  have  available  at  the  administrative  office,  upon
 47    request, a full and complete list of vendors and the amount paid to each and a
 48    list of the number of teachers paid at each of the several stated gross salary
 49    levels in effect in the district.
 50        Nothing herein provided shall be construed as limiting any school district
 51    as  to  any additional or supplementary statements and reports it may elect to
 52    make for the purpose of informing the  public  of  its  financial  operations,
 53    either  as  to form, content, method, or frequency; and if all the information
 54    required herein to be published shall have been published as  provided  herein
 55    at  regular  intervals  during the fiscal year covering successive portions of

                                       3

  1    the fiscal year, then such information may be omitted from the  annual  state-
  2    ment of financial condition and report for such portions of the fiscal year as
  3    already have been reported.
  4        The  annual statement of financial condition and report shall be published
  5    within the time above prescribed in one (1) issue of a newspaper  printed  and
  6    published  within  the  district, or, if there be none, then in a newspaper as
  7    provided in section 60-106, Idaho Code, published within the district, or,  if
  8    there be none, then in a newspaper as provided in section  60-106, Idaho Code,
  9    in  the  county  in which the school district is located, or, if more than one
 10    (1) newspaper is published in said district or county, then in  the  newspaper
 11    most  likely to give best general notice of the contents of such annual state-
 12    ment of financial condition and report to the residents of said district; pro-
 13    vided, that if no newspaper is published in the district or county, then  such
 14    statement  of financial condition and report shall be published in a newspaper
 15    as provided in section 60-106, Idaho Code, most likely to  give  best  general
 16    notice of the contents to the residents of said district.
 17        The  chairman,  clerk  and treasurer of each school district shall certify
 18    the annual statement of financial condition and report to be true and correct,
 19    and the certification shall be included in each published statement.
 20        In the event the board of trustees of any school district  shall  fail  to
 21    prepare  or  cause to be prepared or to publish the annual statement of finan-
 22    cial condition and report as herein required, the state superintendent of pub-
 23    lic instruction shall cause the same to be prepared  and  published,  and  the
 24    cost  thereof  shall  be an obligation of the school district. One (1) copy of
 25    the annual statement of financial condition and report shall  be  retained  in
 26    the  office of the clerk of the board of school trustees, where the same shall
 27    be open at all times to examination and inspection by any person;
 28        6.  To cause to be made a full and complete audit of the financial  state-
 29    ments of the district as required in section 67-450B, Idaho Code.
 30        The auditor shall be employed on written contract.
 31        One  (1) copy of the audit report shall be filed with the state department
 32    of education, after its acceptance by the board of  trustees,  but  not  later
 33    than  October 15 November 10. If the audit report is not received by the state
 34    department of education by November 10, the department may withhold all  or  a
 35    portion  of  the  district's November 15 distribution made pursuant to section
 36    33-1009, Idaho Code, for noncompliance with the audit  report  deadline.  Pro-
 37    vided  however,  a  district  may  appeal  to the state board of education for
 38    reconsideration, in which case the state board of education may  reinstate  or
 39    adjust the funds withheld.
 40        In  the  event the state department of education requests further explana-
 41    tion or additional information regarding a  school  district's  audit  report,
 42    such  school  district shall provide a full and complete response to the state
 43    department of education within thirty  (30)  days  of  receipt  of  the  state
 44    department's  request. If a school district fails to respond within the thirty
 45    (30) day time limit, the state department of education may withhold all  or  a
 46    portion  of  the district's next scheduled distribution to be made pursuant to
 47    section 33-1009, Idaho Code. Provided however, a district may  appeal  to  the
 48    state board of education for reconsideration, in which case the state board of
 49    education may reinstate or adjust the funds withheld;
 50        7.  To file annually with the state department of education such financial
 51    and statistical reports as said state superintendent of public instruction may
 52    require;
 53        8.  To order and have destroyed any canceled check or warrant, or any form
 54    of claim or voucher which has been paid, at any time after five (5) years from
 55    the date the same was canceled and paid;

                                       4

  1        9.  To review the school district budget periodically and make appropriate
  2    budget  adjustments  to reflect the availability of funds and the requirements
  3    of the school district. Any person or persons proposing  a  budget  adjustment
  4    under  this  section  shall  notify  in  writing  each  member of the board of
  5    trustees one (1) week prior to the meeting at  which  such  proposal  will  be
  6    made.  Prior  to the final vote on such a proposal, notice shall be posted and
  7    published once, as prescribed in section 33-402, Idaho Code. A budget  adjust-
  8    ment  shall not be  approved unless voted affirmatively by sixty percent (60%)
  9    of the members of the board of trustees. Such amended budgets shall be submit-
 10    ted to the state superintendent of public instruction;
 11        10. To invest any money coming into the hands of the  school  district  in
 12    investments  permitted  by  section 67-1210, Idaho Code. Unless otherwise pro-
 13    vided by law, any interest or profits accruing  from  the  investment  of  any
 14    funds shall be credited to the general fund of the district.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                            RS 17905

Currently, Idaho statute contains no penalty for local school
districts being non-responsive to audit inquiries from the
Department of Education on results of their required annual
outside audit. This bill will give the Department the ability to
withhold funds from non-responsive school districts. It inserts
an appeal process to the State Board of Education for resolution
of conflict. Also, the date required for submission of audits is
too close to fiscal year end for compliance; this change would
give districts 26 additional days to submit the required report.


                          FISCAL IMPACT

Audit followup will require some additional correspondence but
the estimated cost will be minimal since the initial work is
already being done.




Contact
Name: John Goedde 
Phone: 332-1321


STATEMENT OF PURPOSE/FISCAL NOTE                        S 1428