The Texas Education Agency (TEA) proposes an amendment to §109.41, concerning the Financial Accountability System Resource Guide. This proposed amendment replaces an earlier version that was published as proposed in the November 30, 2007, issue of the Texas Register (32 TexReg 8650), which has been withdrawn. The withdrawal and reproposal are necessary to update provisions related to recovering over-allocated charter school funds.

Section 109.41 adopts by reference the Financial Accountability System Resource Guide as the TEA's official rule. 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 module 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 Texas Education Code (TEC) and other state statutes relating to public school finance. Under §109.41(b), the commissioner of education shall amend the Resource Guide, adopting it by reference, as needed. The Resource Guide is available at http://www.tea.state.tx.us/school.finance/ on the TEA website.

The proposed amendment to §109.41 will reference the Resource Guide dated April 2008. The amendment being proposed includes updates to the state compensatory education module and the accounting and auditing modules to reflect new accounting and auditing rules and standards. Part of the update will include the addition of new account codes and the deletion of some account codes. The charter school supplement will also be updated to reflect these changes in accounting and auditing rules and standards. In addition, the charter school supplement will be updated to address provisions for recovering over-allocated funds as a result of an audit adjustment.

Adrain Johnson, Associate Commissioner for Accreditation, has determined that for the first five-year period the amendment is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the amendment.

Dr. Johnson has determined that for each year of the first five years the amendment is in effect the public benefit anticipated as a result of enforcing the amendment will be improving financial accountability for educational programs in the Texas school system and keeping financial management practices current with changes in state law and federal rules and regulations. There is no anticipated economic cost to persons who are required to comply with the amendment as proposed. In addition, there is no economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

The public comment period on the proposal begins April 18, 2008, and ends May 18, 2008. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Policy Coordination Division, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701, (512) 475-1497. Comments may also be submitted electronically to rules@tea.state.tx.us or faxed to (512) 463-0028. All requests for a public hearing on the proposed amendment submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 15 calendar days after notice of the proposal has been published in the Texas Register on April 18, 2008.

The amendment is proposed under the Texas Education Code, §§7.055, 7.102(c)(32), 44.001, 44.007, and 44.008, which authorizes the commissioner of education to establish advisory guidelines relating to fiscal management of a school district and the State Board of Education to establish a standard school fiscal accounting system in conformity with generally accepted accounting principles.

The proposed amendment implements the Texas Education Code, §§7.055, 7.102(c)(32), 44.001, 44.007, and 44.008.