HOUSE BILL 98

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Jimmie C. Hall

FOR THE LEGISLATIVE EDUCATION STUDY COMMITTEE

AN ACT

RELATING TO PUBLIC SCHOOL FINANCE; REQUIRING CHARTER SCHOOL AUTHORIZERS TO MONITOR CHARTER SCHOOL AUDITS AND CORRECTIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 22-8-13.1 NMSA 1978 (being Laws 2009, Chapter 273, Section 2) is amended to read:

     "22-8-13.1. SCHOOL DISTRICT AND CHARTER SCHOOL AUDITS--SANCTIONS FOR NOT SUBMITTING TIMELY AUDIT REPORTS.--

          A. Each school district and charter school shall have an annual audit as required by the Audit Act and rules of the state auditor that shall be completed and submitted to the state auditor and the charter school authorizer, as applicable, by the date specified in rules of the state auditor. At the completion of the annual or any special audit, the school district or charter school shall submit a copy of the audit report to the department.

          B. School districts and charter schools shall comply with due dates for annual audits specified by rule of the state auditor. Failure to submit a timely audit report shall subject a school district or charter school to progressive sanctions. A school district or charter school that does not submit an annual audit report:

                (1) within ninety days from the due date, shall be required to submit monthly financial reports to the department until the department is satisfied that the school district or charter school is in compliance with all financial and audit requirements;

                (2) after ninety days but within one hundred eighty days from the due date, may be withheld temporarily in an amount up to five percent of its current-year state equalization guarantee distribution;

                (3) after one hundred eighty days but within two hundred seventy days, may be withheld temporarily in an amount up to seven percent of its current-year state equalization guarantee distribution and may be required to submit a corrective action plan to the secretary; and

                (4) after two hundred seventy days, may be withheld temporarily in an amount up to seven percent of its current-year state equalization guarantee distribution and may be subject to the secretary's suspension of the local school board or governing body acting as a board of finance.

          C. If a charter school audit shows internal control deficiencies or material weaknesses, the charter school authorizer shall monitor the charter school's accounting and internal control system and its fiscal condition until the deficiencies or material weaknesses are corrected and the next audit shows no deficiencies or weaknesses. Monitoring shall include at least one site visit to the charter school to assist the charter school in establishing an adequate accounting and internal control system. The charter school shall provide at least quarterly status reports to the authorizer on the charter school's efforts to correct deficiencies or material weaknesses; provided that the authorizer may require more frequent reports based on the severity of the audit findings. If a charter school receives a qualified opinion on its audit, the department shall work with the charter school authorizer to assist the charter school to improve its accounting and internal control system and shall require monthly status reports."

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