The Texas Education Agency (TEA) proposes an amendment to §109.41, concerning the Financial Accountability System Resource Guide. The section 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, dated January 2010, is available on the TEA website at http://www.tea.state.tx.us/index4.aspx?id=1222.

The proposed amendment to §109.41 would update Module 4 - Auditing as a result of recent legislative and authoritative accounting changes and to remove confusing references. While the current amendment is proposed to implement immediate, necessary changes, the Financial Accountability System Resource Guide will undergo a further, comprehensive review, which may result in another amendment.

The proposed amendment would have no procedural or reporting implications. The proposed amendment would have no locally maintained paperwork requirements.

Nora Hancock, associate commissioner for grants and fiscal compliance, has determined that for the first five-year period the amendment is in effect there will be no additional costs for state or local government as a result of enforcing or administering the amendment.

Dr. Hancock 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 would 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 proposed amendment.

There is no direct adverse 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 May 11, 2012, and ends June 11, 2012. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, 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) 463-5337. A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on May 11, 2012.

The amendment is proposed under the TEC, §§7.055, 7.102(c)(32), 44.001, 44.007, and 44.008, which authorize 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 TEC, §§7.055, 7.102(c)(32), 44.001, 44.007, and 44.008.