2014 -- S 2862 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO EDUCATION - SCHOOL COMMITTEES AND SUPERINTENDENTS

     Introduced By: Senators Pearson, Paiva Weed, Gallo, DiPalma, and Satchell

     Date Introduced: April 09, 2014

     Referred To: Senate Education

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 16-2-9.4 and 16-2-21 of the General Laws in Chapter 16-2 entitled

"School Committees and Superintendents [ See Title 16 Chapter 97 - The Rhode Island Board of

Education Act]" are hereby amended to read as follows:

     16-2-9.4. School district accounting compliance. -- (a) The office of auditor general

and the department of elementary and secondary education shall promulgate a uniform system of

accounting, including a chart of accounts based on the recommendations of the advisory council

on school finance, and require all accounts of the school districts, regional school districts, state

schools, and charter schools to be kept in accordance therewith; provided, that in any case in

which the uniform system of accounting is not practicable, the office of auditor general, in

conjunction with the department of elementary and secondary education, shall determine the

manner in which the accounts shall be kept. The uniform system of accounting shall also include

a standardized budget process to ensure districts can annually assess investment priorities and

incorporate long-range planning.

      (b) For the purpose of securing a uniform system of accounting and a chart of accounts

the advisory council on school finances, as defined in section §16-2-9.2 may make such surveys

of the operation of any school districts, regional school district, state school, or charter school as

they shall deem necessary.

      (c) Upon completion of the implementation of the uniform chart of accounts, all the

school districts, regional school districts, state schools, and/or charter schools, shall implement a

regents-approved budget model, that shall include a distinct line item for payments to charter

schools and use best practices established by the department of education for long range planning,

budget development, and budget administration and reporting.

      (d) If any school district, regional school district, state school, or charter school fails to

install and maintain the uniform system of accounting, including a chart of accounts and

approved budget model, or fails to keep its accounts and interdepartmental records, or refuses or

neglects to make the reports and to furnish the information in accordance with the method

prescribed by the office of auditor general and the department of education, or hinders or prevents

the examination of accounts and financial records, the auditor general and the commissioner of

education, and/or their respective designee(s), shall make a report to the superintendent of schools

of the local education agency, the school committee chairperson, the mayor or town manager, and

the president of the town council, and/or for a charter school, to the board of trustees or directors,

as applicable, in writing, specifying the nature and extent of the failure, refusal, neglect,

hindrance, or prevention, and the commissioner is hereby authorized and directed to review the

matter so reported. If the commissioner shall find that failure, refusal, neglect, hindrance, or

prevention exists and that the school district, regional school district, state school, or charter

school should properly comply in the matter so reported, the commissioner shall direct the school

district, regional school district, state school, or charter school, in writing, to so comply. If the

failure, refusal, neglect, hindrance, or prevention shall continue for a period of ten (10) days

following the written direction, the commissioner may request the board of education for

approval to withhold distribution of state aid to said school district, regional school district, state

school, or charter school. The board shall hold a hearing and provide the subject school and/or

district notice and an opportunity to be heard at said hearing. After hearing thereon, the board

may authorize the commissioner to withhold the distribution of state aid to said school district,

regional school district, state school, or charter school, if the board determines such sanction is

appropriate.

      (e) The department of elementary and secondary education, in consultation with the

division of municipal finance, shall conduct periodic reviews and analysis of school revenues and

expenses. The department shall also review and monitor compliance with the approved budget

model and best practices. The department shall identify those local education agencies considered

to be at risk of a year-end deficit or a structural deficit that could impact future years. Such

potential deficits shall be identified based on the periodic reviews, which may also include on-site

visits and reporting in accordance with the provisions of section §45-12-22.2. Potential deficits

shall be reported to the office of municipal finance, office of auditor general, superintendent,

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chairman of the school committee, mayor or town manager, and the president of the town council,

of the applicable school district, regional school district, or state school, and/or for a charter

school, to the board of trustees or directors, as applicable.

     16-2-21. Pre-budget consultation -- Annual reports -- Appropriation requests --

Budgets. -- (a) At least sixty (60) days, but not more than ninety (90) days, prior to the formal

submission of the school budget to the appropriate city or town officials by the school committee,

there shall be a joint, pre-budget meeting between the school committee and the city or town

council(s). At or before this meeting:

      (1) The highest elected official of the city or town shall submit to the school committee

an estimate, prepared in a manner approved by the department of administration, of projected

revenues for the next fiscal year. In the case of the property tax, the projections shall include only

changes in the property tax base, not property tax rates;

      (2) The school committee shall submit to the city or town council a statement for the

next ensuing fiscal year of anticipated total expenditures, projected enrollments with resultant

staff and facility requirements, estimated enrollment and payments to charter schools, and any

necessary or mandated changes in school programs or operations; and

      (3) The school committee shall prepare and submit, annually, to the department of

elementary and secondary education, on or before the first day of August, a report in the manner

and form prescribed by the state board of regents for elementary and secondary education; the

committee shall also prepare, not less than thirty (30) days before the date of the annual financial

town meeting, or the date of the meeting of the city council at which annual appropriations are

made, on forms prescribed and furnished by the department of elementary and secondary

education, the estimates and recommendations of the amounts necessary to be appropriated for

the support of public schools, including a distinct line item for estimated payments to charter

schools for the fiscal year ensuing; provided, that a copy of these estimates and recommendations

shall be sent to the department of elementary and secondary education, and until the report is

made, and if the estimates and recommendations are not presented to the department, it may

refuse to draw its orders for the money in the state treasury apportioned to the city or town;

provided, that the necessary blank for the report has been furnished by the department on or

before the first day of June, next preceding, and the necessary forms for the estimates and

recommendations shall have been furnished by the department not less than sixty (60) days before

the date of the annual appropriations meeting of the city council; tThe committee shall also

prepare and submit annually to the department of elementary and secondary education and at the

annual financial town meeting, a report to the city or town, setting forth its doings, the state, and

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condition of the schools, and plans for their improvement, which report, unless printed, shall be

read in open meeting; and if printed, at least three (3) copies shall be transmitted to the

department on or before the day of the annual financial town meeting in each year.

      (b) If the amount appropriated by the town meeting, the city or town council, or budget

referendum is either more or less than the amount recommended and requested by the school

committee, the school committee shall, within thirty (30) days after the appropriation is made,

amend its estimates and recommendations so that expenses are no greater than the total of all

revenue appropriated by the state or town or provided for public schools under the care, control,

and management of the school committee.

      (c) Only a school budget in which total expenses are less than, or equal to, appropriations

and revenues shall be considered an adopted school budget.

      (d) Notwithstanding any provision of the general or public laws to the contrary:

      (i) tThe budget adopted and presented by any school committee for the fiscal year 2008

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

excess of one hundred five and one-quarter percent (105.25%) of the total of municipal funds

appropriated by the city or town council for school purposes for fiscal year 2007;

      (ii) tThe budget adopted and presented by any school committee for the fiscal year 2009

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

excess of one hundred five percent (105%) of the total of municipal funds appropriated by the

city or town council for school purposes for fiscal year 2008;

      (iii) tThe budget adopted and presented by any school committee for the fiscal year 2010

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

excess of one hundred four and three-quarters percent (104.75%) of the total of municipal funds

appropriated by the city or town council for school purposes for fiscal year 2009;

      (iv) tThe budget adopted and presented by any school committee for the fiscal year 2011

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

excess of one hundred four and one-half percent (104.5%) of the total of municipal funds

appropriated by the city or town council for school purposes for fiscal year 2010;

      (v) tThe budget adopted and presented by any school committee for the fiscal year 2012

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

excess of one hundred four and one-quarter percent (104.25%) of the total of municipal funds

appropriated by the city or town council for school purposes for fiscal year 2011; and

      (vi) tThe budget adopted and presented by any school committee for the fiscal year 2013

and for each fiscal year thereafter shall not propose the appropriation of municipal funds

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(exclusive of state and federal aid) in excess of one hundred four percent (104%) of the total of

municipal funds appropriated by the city or town council for school purposes for the previous

fiscal year.

      (e) Notwithstanding any provision of the general or public laws to the contrary, any

judgment rendered pursuant to subsection §16-2-21.4(b) shall consider the percentage caps on

school district budgets set forth in subsection (d) of this section.

     SECTION 2. Section 16-7.2-5 of the General Laws in Chapter 16-7.2 entitled "The

Education Equity and Property Tax Relief Act" is hereby amended to read as follows:

     16-7.2-5. Charter public schools, the William M. Davies, Jr. Career and Technical

High School, and the Metropolitan Regional Career and Technical Center. -- (a) Charter

public schools defined in chapter 16-77 of this title, the William M. Davies, Jr. Career and

Technical High School (Davies) and the Metropolitan Regional Career and Technical Center (the

Met Center) shall be funded pursuant to section §16-7.2-3. If the October 1 actual enrollment data

for any charter public school shows a ten percent (10%) or greater change from the prior year

enrollment which is used as the reference year average daily membership, the third and fourth

quarter payments to the charter public school will be adjusted to reflect actual enrollment. The

state share of the permanent foundation education aid shall be paid by the state directly to the

charter public schools, Davies, and the Met Center pursuant to section §16-7.2-9 and shall be

calculated using the state share ratio of the district of residence of the student as set forth in

section §16-7.2-4. The department of elementary and secondary education shall provide the

general assembly with the calculation of the state share of permanent foundation education aid for

charter public schools delineated by school district. The department shall also provide the general

assembly a performance dashboard indicating the per-pupil expenditures of each school district

and charter school broken down by revenue sources and expenditure categories. The department

shall provide, within the same dashboard, student performance indicators for each school district

or charter school. The local share of education funding, as defined by the department of

elementary and secondary education and approved by the General Assembly, shall be paid to the

charter public school, Davies, and the Met Center by the district of residence of the student and

shall be the local per pupil cost calculated by dividing the local appropriation to education from

property taxes, net of debt service and capital projects, as defined in the uniform chart of accounts

by the average daily membership for each city and town, pursuant to section §16-7-22, for the

reference year.

      (b) Local district payments to charter public schools, Davies, and the Met Center for

each district's students enrolled in these schools shall be made on a quarterly basis in July,

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October, January and April; however, the first local district payment shall be made by August 15

instead of July. Failure of the community to make the local district payment for its student(s)

enrolled in a charter public school, Davies, and/or the Met Center may result in the withholding

of state education aid pursuant to section §16-7-31.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO EDUCATION - SCHOOL COMMITTEES AND SUPERINTENDENTS

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     This act would require school committees to adopt a board of regents approved budget

model to include a distinct line item for payments to charter schools. It would also require a

report to the general assembly prepared by the department of elementary and secondary education

which would set forth the information cited above.

     This act would take effect upon passage.

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