February 1, 2011, Introduced by Rep. Nathan and referred to the Committee on Local, Intergovernmental, and Regional Affairs.
A bill to amend 1990 PA 72, entitled
"Local government fiscal responsibility act,"
by amending section 38 (MCL 141.1238).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 38. (1) If the superintendent of public instruction
determines under section 35 or 36 that a school district has a
financial emergency, the superintendent of public instruction,
within 30 days after that determination, shall submit to the state
board the names of nominees who shall be considered for appointment
to serve as an emergency financial manager for the school district.
From the list of nominees submitted to the state board, the state
board shall submit to the governor the names of not more than 3
nominees who shall be considered for appointment to serve as an
emergency financial manager for the school district. From the list
of nominees submitted to the governor, the governor shall appoint,
with the advice and consent of the senate, an emergency financial
manager for the school district who shall hold office for a term
fixed
by the governor education
financial emergency resolution
board created under subsection (4), but not to exceed 1 year. The
appointment shall be by written contract and may be renewed on an
annual basis for not more than 1 year. The written contract between
the education financial emergency resolution board and the
emergency financial manager shall contain specific contractual
remedies for failure of the emergency financial manager to comply
with the requirements of this article.
(2) An emergency financial manager appointed under this
article shall be chosen solely on the basis of his or her
competence in public sector fiscal matters and shall not have been
either an elected or appointed official or employee of the school
district for which he or she is appointed for not less than 5 years
before the appointment. The emergency financial manager shall not
be the superintendent of public instruction. The emergency
financial manager need not be a resident of the school district for
which he or she is appointed. For the purposes of this section, an
individual shall not be considered to be competent in public sector
fiscal matters unless the education financial emergency resolution
board finds that he or she has demonstrated previous public sector
experience, which does not have to be with a school district,
showing that he or she is qualified to do at least all of the
following:
(a) Prepare and analyze a budget of a size appropriate for a
school district the size of the affected school district.
(b) Review and create bookkeeping and accounting systems of a
type appropriate for a school district the size of the affected
school district.
(c) Create a deficit reduction plan appropriate for a school
district the size of the affected school district.
(d) Take actions in accordance with the uniform budgeting and
accounting act, 1968 PA 2, MCL 141.421 to 141.440a, and in
accordance with generally accepted accounting principles.
(e) Review and create profit and profit-loss statements,
balance sheet statements, cash flow analyses, cash receipts
journals, accounts payable, general ledgers, and other similar
financial documents.
(3) Unless the legislature provides special funding, an
emergency financial manager shall receive compensation and
reimbursement for actual and necessary expenses from the school
district
as approved by the superintendent of public instruction
education financial emergency resolution board created under
subsection (4). In addition to staff otherwise authorized by law,
with
the approval of the superintendent of public instruction,
education financial emergency resolution board created under
subsection (4), the emergency financial manager may appoint
additional staff and secure professional assistance considered
necessary to implement this article.
(4) There is created an education financial emergency
resolution board within the department of education. All of the
following apply to this board:
(a) This board shall consist of the superintendent of public
instruction or his or her designee, the state treasurer or his or
her designee, and the director of the department of technology,
management, and budget or his or her designee.
(b) The attorney general, or his or her designee, shall serve
as a nonvoting member of the education financial emergency
resolution board for the sole purpose of providing legal counsel to
the education financial emergency resolution board.
(c) For the education financial emergency resolution board's
functions related to a particular school district, the president of
the school board of that school district shall serve as a nonvoting
member of the education financial emergency resolution board.
(d) The superintendent of public instruction, or his or her
designee, shall serve as chairperson of the education financial
emergency resolution board.
(e) Except for budgeting, procurement, and related functions
of the education financial emergency resolution board that shall be
performed under the direction and supervision of the superintendent
of public instruction, the education financial emergency resolution
board shall exercise its prescribed statutory powers, duties, and
functions independently of the department of education.
(5) The education financial emergency resolution board shall
do all of the following with respect to each school district that
has an emergency financial manager appointed under this article:
(a) Directly supervise the emergency financial manager and
oversee all day-to-day operations of the emergency financial
manager.
(b) Review and approve all compensation and reimbursements
made to the emergency financial manager and all appointments made
by the emergency financial manager.
(c) Review all contracts entered into by the emergency
financial manager, the contracting practices of the emergency
financial manager, and all other decisions of and actions taken by
the emergency financial manager or his or her staff.
(d) Review all written plans and reports developed by the
emergency financial manager.
(6) The emergency financial manager's powers and duties under
sections 39 to 41a are subject to oversight by the education
financial emergency resolution board under this section.