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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
schools; audits; financial records; budgets
Purpose
Modifies requirements related to reporting of school district financial records, budget transmission, and district and charter audit reports and compliance questionnaires.
Background
The Auditor General (OAG) is responsible for determining the accounting systems, methods and procedures for use by school districts. The OAG, in conjunction with the Arizona Department of Education (ADE), must prescribe a uniform system of financial records (USFR) for school districts. The OAG must report to ADE any school district that fails to establish and maintain the prescribed USFR or fails to correct deficiencies in the system within 90 days of receiving notice (A.R.S. § 15-271).
A school district governing board (governing board) and charter school governing body (governing body) must contract for at least annual financial and compliance audits of transactions and accounts. The independent certified public accountant completing the audit must submit a USFR questionnaire and copy of applicable audit reports to the county school superintendent (A.R.S. § 15-914).
Statute requires governing boards to adopt a budget that does not exceed the general budget limit or the unrestricted capital budget limit. The governing board must, by July 18 of each year, file the adopted budget with the county school superintendent who must then immediately transmit it to the board of supervisors. Further, a governing board must adjust the budget if it exceeds the general budget limit or the unrestricted capital budget limit for the current year. By December 18, the governing board must file the revised budget with the county school superintendent who immediately transmits a copy to the county board of supervisors (A.R.S. § 15-905).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires the OAG to report to the State Board of Education (SBE) on any school district that fails to maintain or correct deficiencies in the USFR.
2. Requires the OAG to detail, in writing, the deficiencies of the school district system in the OAG's report to ADE and SBE.
3. Removes the requirement that, by July 18 of each year, a governing board file the adopted budget with the county school superintendent, who must transmit a copy to the board of supervisors.
4. Removes the requirement that, by December 18 of each year, the governing board file the revised budget with the county school superintendent, who must transmit a copy to the board of supervisors.
5. Requires a school district or charter school, rather than an independent certified public accountant, to send a paper copy or electronic copy of the audit reports to the county school superintendent and ADE.
6. Requires ADE to make audit reports available on its website.
7. Requires a governing board and governing body to publicly accept all audits and compliance questionnaires by roll call vote.
8. Makes technical and conforming changes.
9. Becomes effective on the general effective date.
House Action
ED* 2/10/20 DP 11-0-0-2
3rd Read 2/25/20 60-0-0
*on reconsideration
Prepared by Senate Research
March 6, 2020
JO/JP/MB/gs