Part 2. TEXAS EDUCATION AGENCY
Chapter 109. BUDGETING, ACCOUNTING, AND AUDITING
Subchapter AA. COMMISSIONER'S RULES CONCERNING FINANCIAL ACCOUNTABILITY RATING SYSTEM
The Texas Education Agency (TEA) proposes an amendment to §109.1002, concerning financial accountability ratings. The proposed amendment would update the appeal process for the rating system beginning with Fiscal Year 2006-2007, in accordance with House Bill (HB) 1, 79th Texas Legislature, Third Called Session, 2006.
Senate Bill 218, 77th Texas Legislature, 2001, added the TEC, §§39.201 - 39.204, requiring the commissioner of education, in consultation with the comptroller, to adopt rules for implementation and administration of the financial accountability rating system. 19 TAC Chapter 109, Budgeting, Accounting, and Auditing, Subchapter AA, Commissioner's Rules Concerning Financial Accountability Rating System, adopted to be effective October 20, 2002, establishes provisions that detail the purpose, ratings, types of ratings, criteria, reporting, and sanctions for the financial accountability rating system, in accordance with Senate Bill 218, 77th Texas Legislature, 2001.
The specific rule that establishes indicators applicable to school district financial accountability ratings is 19 TAC §109.1002, Financial Accountability Ratings. This rule includes 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 rule also includes a process whereby a district could submit a request for the TEA to review a district's preliminary rating. In accordance with HB 1, Third Called Session, 2006, this financial accountability rating appeal process is to include review by an external review panel.
The proposed amendment to 19 TAC §109.1002, would add language in subsection (e)(2)(A) to modify the appeal process to allow for the review of a district's appeal by an external review panel. The new language would address the type of appeals that would be considered and the role of the TEA and the external review panel. As directed by HB 1, the proposal specifies that the external review panel's recommendation would be forwarded to the commissioner and that the commissioner's decision would be final and not subject to challenge. The amendment to 19 TAC §109.1002 is proposed in consultation with the comptroller.
Adrain Johnson, associate commissioner for school district services, has determined that, for the first five-year period the amendment is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the amendment.
Dr. Johnson 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 will be having in 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. The proposed amendment would provide districts an objective review process. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed amendment.
The public comment period on the proposal begins April 6, 2007, and ends May 6, 2007. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Policy Coordination Division, 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) 463-0028. All requests for a public hearing on the proposed amendment 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 amendment is proposed under the Texas Education Code (TEC), §39.202, which directs the commissioner to develop and implement a financial accountability rating system, and TEC, §39.204, which authorizes the commissioner of education to adopt rules as necessary for the implementation and administration of a financial accountability rating system. In addition, the TEC, §39.301, authorizes the commissioner by rule to provide a process for a school district or open-enrollment charter school to challenge an agency decision relating to an academic or financial accountability rating that affects the district or school. The TEC, §39.301, specifies that the commissioner rule must provide for the appointment of a committee to make recommendations on a challenge made to an agency decision relating to an academic or financial accountability rating.
The amendment implements the Texas Education Code, §§39.202, 39.204, and 39.301.
§109.1002.Financial Accountability Ratings.
(a) - (d) (No change.)
(e) The TEA will issue a preliminary financial accountability rating to a school district within 150 days of the district's complete financial data being made available to the TEA staff.
(1) (No change.)
(2) A district may submit a written request that the TEA review a preliminary rating if the preliminary rating was based on a data error solely attributable to the TEA's review of the data for any of the indicators.
(A) The TEA office responsible for financial audits must receive the request for review no later than 30 days after the TEA's release of the preliminary rating, and the request must include substantial evidence that supports the district's position.
(i) Only appeals that would result in a change of the district's preliminary rating will be considered.
(ii) The TEA staff will review information submitted by the district to validate the statements made to the extent possible. The TEA will examine all relevant data.
(iii) The TEA staff will prepare a recommendation and forward it to an external panel for review. This review panel will provide independent oversight to the appeals process.
(iv) The external review panel will examine the appeal, supporting documentation, staff research, and the staff recommendation. The review panel will determine its recommendation.
(v) The external review panel's recommendation will be forwarded to the commissioner.
(vi) The commissioner will make a final decision in accordance with the timeline specified in subparagraph (F) of this paragraph.
(B) - (H) (No change.)
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on March 26, 2007.
TRD-200701169
Cristina De La Fuente-Valadez
Director, Policy Coordination
Texas Education Agency
Earliest possible date of adoption: May 6, 2007
For further information, please call: (512) 475-1497