Bill Text: MI HB5915 | 2013-2014 | 97th Legislature | Introduced

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Bill Title: School aid; other; disclosure of operating budget; expand to include financial statements by an educational maintenance organization. Amends sec. 18 of 1979 PA 94 (MCL 388.1618). TIE BAR WITH: HB 5829'14

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced - Dead) 2014-11-12 - Printed Bill Filed 11/07/2014 [HB5915 Detail]

Download: Michigan-2013-HB5915-Introduced.html

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HOUSE BILL No. 5915

 

November 6, 2014, Introduced by Reps. Lipton, Roberts, Brunner, Nathan and Irwin and referred to the Committee on Education.

 

     A bill to amend 1979 PA 94, entitled

 

"The state school aid act of 1979,"

 

by amending section 18 (MCL 388.1618), as amended by 2014 PA 196.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 18. (1) Except as provided in another section of this

 

article, each district or other entity shall apply the money

 

received by the district or entity under this article to salaries

 

and other compensation of teachers and other employees, tuition,

 

transportation, lighting, heating, ventilation, water service, the

 

purchase of textbooks, other supplies, and any other school

 

operating expenditures defined in section 7. However, not more than

 

20% of the total amount received by a district under sections 22a

 

and 22b or received by an intermediate district under section 81

 

may be transferred by the board to either the capital projects fund

 

or to the debt retirement fund for debt service. The money shall

 

not be applied or taken for a purpose other than as provided in

 

this section. The department shall determine the reasonableness of

 

expenditures and may withhold from a recipient of funds under this

 

article the apportionment otherwise due upon a violation by the

 

recipient.

 

     (2) Within 15 days after a board adopts its annual operating

 

budget for the following school fiscal year, or after a board

 

adopts a subsequent revision to that budget, the district shall

 

make all of the following available through a link on its website

 

home page, or may make the information available through a link on

 

its intermediate district's website home page, in a form and manner

 

prescribed by the department:

 

     (a) The annual operating budget and subsequent budget

 

revisions.

 

     (b) Using data that have already been collected and submitted

 

to the department, a summary of district expenditures for the most

 

recent fiscal year for which they are available, expressed in the

 

following 2 pie charts:

 

     (i) A chart of personnel expenditures, broken into the

 

following subcategories:

 

     (A) Salaries and wages.

 

     (B) Employee benefit costs, including, but not limited to,

 

medical, dental, vision, life, disability, and long-term care

 

benefits.

 

     (C) Retirement benefit costs.

 

     (D) All other personnel costs.

 

     (ii) A chart of all district expenditures, broken into the

 

following subcategories:

 

     (A) Instruction.

 

     (B) Support services.

 

     (C) Business and administration.

 

     (D) Operations and maintenance.

 

     (c) Links to all of the following:

 

     (i) The current collective bargaining agreement for each

 

bargaining unit.

 

     (ii) Each health care benefits plan, including, but not limited

 

to, medical, dental, vision, disability, long-term care, or any

 

other type of benefits that would constitute health care services,

 

offered to any bargaining unit or employee in the district.

 

     (iii) The audit report of the audit conducted under subsection

 

(4) for the most recent fiscal year for which it is available.

 

     (iv) The bids required under section 5 of the public employee

 

health benefits act, 2007 PA 106, MCL 124.75.

 

     (d) The total salary and a description and cost of each fringe

 

benefit included in the compensation package for the superintendent

 

of the district and for each employee of the district whose salary

 

exceeds $100,000.00.

 

     (e) The annual amount spent on dues paid to associations.

 

     (f) The annual amount spent on lobbying or lobbying services.

 

As used in this subdivision, "lobbying" means that term as defined

 

in section 5 of 1978 PA 472, MCL 4.415.

 

     (g) Any deficit elimination plan or enhanced deficit

 

elimination plan the district was required to submit under this

 

article.

 

     (h) Identification of all credit cards maintained by the

 

district as district credit cards, the identity of all individuals

 

authorized to use each of those credit cards, the credit limit on

 

each credit card, and the dollar limit, if any, for each

 

individual's authorized use of the credit card.

 

     (i) Costs incurred for each instance of out-of-state travel by

 

the school administrator of the district that is fully or partially

 

paid for by the district and the details of each of those instances

 

of out-of-state travel, including at least identification of each

 

individual on the trip, destination, and purpose.

 

     (j) If applicable, audited financial statements provided by an

 

educational management organization under section 503c, 523c, 553c,

 

or 1311h of the revised school code, MCL 380.503c, 380.523c,

 

380.553c, and 380.1311h.

 

     (k) If applicable, a detailed accounting provided to the

 

district by the authorizing body of all fees, reimbursements, or

 

other charges collected or retained by, and all expenditures made

 

by, the district's authorizing body for the current fiscal year,

 

including an itemized list of use and purpose.

 

     (3) For the information required under subsection (2)(a),

 

(2)(b)(i), and (2)(c), an intermediate district shall provide the

 

same information in the same manner as required for a district

 

under subsection (2).

 

     (4) For the purposes of determining the reasonableness of

 

expenditures, whether a district or intermediate district has

 

received the proper amount of funds under this article, and whether

 

a violation of this article has occurred, all of the following

 

apply:

 

     (a) The department shall require that each district and

 

intermediate district have an audit of the district's or

 

intermediate district's financial and pupil accounting records

 

conducted at least annually, and at such other times as determined

 

by the department, at the expense of the district or intermediate

 

district, as applicable. The audits must be performed by a

 

certified public accountant or by the intermediate district

 

superintendent, as may be required by the department, or in the

 

case of a district of the first class by a certified public

 

accountant, the intermediate superintendent, or the auditor general

 

of the city. A district or intermediate district shall retain these

 

records for the current fiscal year and from at least the 3

 

immediately preceding fiscal years.

 

     (b) If a district operates in a single building with fewer

 

than 700 full-time equated pupils, if the district has stable

 

membership, and if the error rate of the immediately preceding 2

 

pupil accounting field audits of the district is less than 2%, the

 

district may have a pupil accounting field audit conducted

 

biennially but must continue to have desk audits for each pupil

 

count. The auditor must document compliance with the audit cycle in

 

the pupil auditing manual. As used in this subdivision, "stable

 

membership" means that the district's membership for the current

 

fiscal year varies from the district's membership for the

 

immediately preceding fiscal year by less than 5%.

 

     (c) A district's or intermediate district's annual financial

 

audit shall include an analysis of the financial and pupil

 

accounting data used as the basis for distribution of state school

 

aid.

 

     (d) The pupil and financial accounting records and reports,

 

audits, and management letters are subject to requirements

 

established in the auditing and accounting manuals approved and

 

published by the department.

 

     (e) All of the following shall be done not later than November

 

15, 2014 for reporting 2013-2014 data during 2014-2015, and not

 

later than October 15 for reporting the prior fiscal year data for

 

all subsequent fiscal years:

 

     (i) A district shall file the annual financial audit reports

 

with the intermediate district and the department.

 

     (ii) The intermediate district shall file the annual financial

 

audit reports for the intermediate district with the department.

 

     (iii) The intermediate district shall enter the pupil membership

 

audit reports for its constituent districts and for the

 

intermediate district, for the pupil membership count day and

 

supplemental count day, in the Michigan student data system.

 

     (f) The annual financial audit reports and pupil accounting

 

procedures reports shall be available to the public in compliance

 

with the freedom of information act, 1976 PA 442, MCL 15.231 to

 

15.246.

 

     (g) Not later than January 31 of each year, the department

 

shall notify the state budget director and the legislative

 

appropriations subcommittees responsible for review of the school

 

aid budget of districts and intermediate districts that have not

 

filed an annual financial audit and pupil accounting procedures

 

report required under this section for the school year ending in

 

the immediately preceding fiscal year.

 

     (5) By November 15, 2014 for 2014-2015 and by October 15 for

 

all subsequent fiscal years, each district and intermediate

 

district shall submit to the center, in a manner prescribed by the

 

center, annual comprehensive financial data consistent with

 

accounting manuals and charts of accounts approved and published by

 

the department. For an intermediate district, the report shall also

 

contain the website address where the department can access the

 

report required under section 620 of the revised school code, MCL

 

380.620. The department shall ensure that the prescribed Michigan

 

public school accounting manual chart of accounts includes standard

 

conventions to distinguish expenditures by allowable fund function

 

and object. The functions shall include at minimum categories for

 

instruction, pupil support, instructional staff support, general

 

administration, school administration, business administration,

 

transportation, facilities operation and maintenance, facilities

 

acquisition, and debt service; and shall include object

 

classifications of salary, benefits, including categories for

 

active employee health expenditures, purchased services, supplies,

 

capital outlay, and other. Districts shall report the required

 

level of detail consistent with the manual as part of the

 

comprehensive annual financial report.

 

     (6) By September 30 of each year, each district and

 

intermediate district shall file with the department the special

 

education actual cost report, known as "SE-4096", on a form and in

 

the manner prescribed by the department.

 

     (7) By October 7 of each year, each district and intermediate

 

district shall file with the center the transportation expenditure

 

report, known as "SE-4094", on a form and in the manner prescribed

 

by the center.

 

     (8) The department shall review its pupil accounting and pupil

 

auditing manuals at least annually and shall periodically update

 

those manuals to reflect changes in this article.

 

     (9) If a district that is a public school academy purchases

 

property using money received under this article, the public school

 

academy shall retain ownership of the property unless the public

 

school academy sells the property at fair market value.

 

     (10) If a district or intermediate district does not comply

 

with subsections (4), (5), (6), and (1) to (7), the department

 

shall withhold all state school aid due to the district or

 

intermediate district under this article, beginning with the next

 

payment due to the district or intermediate district, until the

 

district or intermediate district complies with subsections (4),

 

(5), (6), and (1) to (7). However, the department shall not

 

withhold the payment due on October 20 due to the operation of this

 

subsection. If the district or intermediate district does not

 

comply with subsections (4), (5), (6), and (1) to (7) by the end of

 

the fiscal year, the district or intermediate district forfeits the

 

amount withheld.

 

     (11) Not later than November 1, 2014, if a district or

 

intermediate district offers online learning under section 21f, the

 

district or intermediate district shall submit to the department a

 

report that details the per-pupil costs of operating the online

 

learning by vendor type. The report shall include at least all of

 

the following information concerning the operation of online

 

learning for the school fiscal year ending June 30, 2014:

 

     (a) The name of the district operating the online learning and

 

of each district that enrolled students in the online learning.

 

     (b) The total number of students enrolled in the online

 

learning and the total number of membership pupils enrolled in the

 

online learning.

 

     (c) For each pupil who is enrolled in a district other than

 

the district offering online learning, the name of that district.

 

     (d) The district in which the pupil was enrolled before

 

enrolling in the district offering online learning.

 

     (e) The number of participating students who had previously

 

dropped out of school.

 

     (f) The number of participating students who had previously

 

been expelled from school.

 

     (g) The total cost to enroll a student in the program. This

 

cost shall be reported on a per-pupil, per-course, per-semester or

 

trimester basis by vendor type. The total shall include costs

 

broken down by cost for content development, content licensing,

 

training, online instruction and instructional support, personnel,

 

hardware and software, payment to each online learning provider,

 

and other costs associated with operating online learning.

 

     (h) The name of each online education provider contracted by

 

the district and the state in which each online education provider

 

is headquartered.

 

     (12) Not later than March 31, 2015, the department shall

 

submit to the house and senate appropriations subcommittees on

 

state school aid, the state budget director, and the house and

 

senate fiscal agencies a report summarizing the per pupil costs by

 

vendor type of online courses available under section 21f.

 

     (13) As used in subsections (11) and (12), "vendor type" means

 

the following:

 

     (a) Online courses provided by the Michigan virtual

 

university.

 

     (b) Online courses provided by a school of excellence that is

 

a cyber school, as defined in section 551 of the revised school

 

code, MCL 380.551.

 

     (c) Online courses provided by third party vendors not

 

affiliated with a Michigan public school.

 

     (d) Online courses created and offered by a district or

 

intermediate district.

 

     Enacting section 1. This amendatory act does not take effect

 

unless House Bill No. 5829 of the 97th Legislature is enacted into

 

law.