ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature

Second Regular Session

House: ED DP 11-0-0-2

HB2106: schools; audits; financial records; budgets

Sponsor:  Representative Udall, LD 25

House Engrossed

Overview

Adds the State Board of Education (SBE) to the entities the Auditor General must report to when a school district either fails to establish and maintain the Uniform System of Financial Records (USFR) or fails to correct deficiencies in the school district system. Changes the filing requirements of school districts and charter schools regarding adopted budgets and audit reports.

History

Statute requires the Auditor General to determine the accounting systems, accounting methods and procedures that are to be utilized for accounting purposes by all school districts in the state. The Auditor General, in conjunction with the Arizona Department of Education (ADE), is also required to prescribe the USFR, or the accounting and financial reporting manual for all school districts (A.R.S. § 15-271). As part of its duties, the Auditor General must detail in writing the deficiencies of a school district system in maintaining the USFR; school districts are then given 90 days to correct the deficiencies. A school district's failure to maintain the USFR or correct deficiencies must be reported by the Auditor General to ADE.

Currently, school district governing boards are required to file the district's adopted final budget with the county school superintendent, Superintendent of Public Instruction (SPI) and ADE by July 18. If the district's final adopted budget exceeds the general budget limit or the unrestricted capital budget limit, the governing board is required by law to adjust its budget and expenditures. After adjustment, the governing board is required to file the district's adopted revised budget with the county school superintendent and SPI by December 18. In both cases, the county school superintendent is required to immediately submit the district's budget to the county board of supervisors (A.R.S. § 15-905).

Provisions

1.    Adds SBE to the entities the Auditor General must report to when a school district either fails to establish and maintain the USFR or fails to correct deficiencies in the school district system. (Sec. 1)

2.    States that the Auditor General must detail the deficiencies of the school district system in the Auditor General’s report to ADE and SBE. (Sec. 1)

3.    Eliminates the requirement that a governing board file its adopted final budget and adopted revised budget to the county school superintendent and that the county school superintendent transmit a copy of the budgets to the board of supervisors. (Sec. 2)

4.    Requires the school district or charter school to send a paper or electronic copy of any annual or biennial financial statement audit or annual financial and compliance audit of financial transactions and accounts to the county school superintendent and ADE and that ADE make the reports available on its website. (Sec. 3)

5.    Requires a school district governing board or charter school governing body to publicly accept all audits and compliance questionnaires by roll call vote. (Sec. 3)

6.    ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteMakes technical changes. (Sec. 1, 2, 3)

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