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Texas Register Preamble


The Texas Education Agency (TEA) proposes new §§109.1001-109.1005, concerning the financial accountability rating system. The proposed new sections detail the purpose, ratings, types of ratings, criteria, reporting, and sanctions for the financial accountability rating system.

SB 875, 76th Texas Legislature, 1999, added TEC, §39.201, requiring the commissioner of education in consultation with the comptroller of public accounts to develop proposals for a school district financial accountability rating system that was to be presented to the legislature no later than December 15, 2000. TEC, §39.201, expired September 1, 2001. Subsequently, SB 218, 77th Texas Legislature, 2001, added TEC, §§39.201-39.204, requiring the commissioner to adopt rules for the implementation and administration of the financial accountability rating system prescribed by TEC, Chapter 39, Subchapter I.

The proposed new 19 TAC Chapter 109, Budgeting, Accounting, and Auditing, Subchapter AA, Commissioner's Rules Concerning Financial Accountability Rating System, includes provisions that detail the purpose, ratings, types of ratings, criteria, reporting, and sanctions for the financial accountability rating system, in accordance with SB 218, 77th Texas Legislature, 2001. The proposed new rules include the financial accountability rating form entitled "School FIRST-Rating Worksheet" that explains the indicators that the TEA will analyze to assign school district financial accountability ratings. This form specifies the minimum financial accountability rating information that a district is to report to parents and taxpayers in the district. School districts will have to prepare an annual financial management report and have a public meeting on the report.

Tom Canby, associate managing director for school financial audits, has determined that for the first five-year period the new sections are in effect there will be no significant fiscal implications for state government as a result of enforcing or administering the new sections. The fiscal impact will be to school districts that fail the financial rating system and possibly have their accreditation lowered. The amount of fiscal impact will depend on how the information is used by each school district's constituents.

Mr. Canby has determined that for each year of the first five years the new sections are in effect the public benefit anticipated as a result of enforcing the new sections will be that the financial accountability rating system will put into place a system to ensure that school districts will be held accountable for the quality of their financial management practices and achieve improved performance in the management of their financial resources. There will not be an effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the new sections as proposed.

Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Accountability Reporting and Research, 1701 North Congress Avenue, Austin, Texas 78701, (512) 463-9701. Comments may also be submitted electronically to rules@tea.state.tx.us or faxed to (512) 475-3499. All requests for a public hearing on the proposed new sections 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.

The new sections are proposed under the Texas Education Code, §§39.201-39.204, which authorizes the commissioner of education to adopt rules as necessary for the implementation and administration of a financial accountability rating system

The new sections implement the Texas Education Code, §§39.201-39.204.



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