Bill Text: MI HB5683 | 2019-2020 | 100th Legislature | Introduced
Bill Title: School aid; other; certain disclosure requirements for public schools; modify. Amends sec. 18 of 1979 PA 94 (MCL 388.1618).
Spectrum: Partisan Bill (Democrat 29-0)
Status: (Introduced - Dead) 2020-03-25 - Bill Electronically Reproduced 03/25/2020 [HB5683 Detail]
Download: Michigan-2019-HB5683-Introduced.html
HOUSE BILL NO. 5683
March 17, 2020, Introduced by Reps. Kuppa,
Elder, Tyrone Carter, Haadsma, Peterson, Cambensy, Hammoud, Kennedy,
Cynthia Johnson, Garza, Shannon, Stone, Pohutsky, Sowerby, Koleszar,
Bolden, Hoadley, Hood, Ellison, Brixie, Hertel, Sabo, Chirkun, Cherry,
Warren, Lasinski, Rabhi, Tate and Anthony 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 2019 PA 58.
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. A district or other entity shall not apply or take the money
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) A district or
intermediate district shall adopt an annual budget in a manner that complies
with the uniform budgeting and accounting act, 1968 PA 2, MCL 141.421 to
141.440a. Within 15 days after a district board adopts its annual operating
budget for the following school fiscal year, or after a district board adopts a
subsequent revision to that budget, the district shall make all of the
following available through a link on its website homepage, or may make the
information available through a link on its intermediate district's website
homepage, 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 visual displays:
(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) Each contract entered into between the
district and an educational management organization, as applicable. As used in
this subparagraph, "educational management organization" means that
term as defined in section 503c, 523c, or 553c of the revised school code, MCL
380.503c, 380.523c, or 380.553c.
(iv) (iii) The audit report of
the audit conducted under subsection (4) for the most recent fiscal year for
which it is available.
(v) (iv) The bids required
under section 5 of the public employees health benefit act, 2007 PA 106, MCL
124.75.
(vi) (v) The district's
written policy governing procurement of supplies, materials, and equipment.
(vii) (vi) The district's
written policy establishing specific categories of reimbursable expenses, as
described in section 1254(2) of the revised school code, MCL 380.1254.
(viii) (vii) Either the
district's accounts payable check register for the most recent school fiscal
year or a statement of the total amount of expenses incurred by board members
or employees of the district that were reimbursed by the district for the most
recent school fiscal year.
(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 the revised school
code.
(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.
(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
must 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 must be done not later than November 1 each
year for reporting the prior fiscal year data:
(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 must 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 1 each fiscal year, each district and
intermediate district shall submit to the center, in a manner prescribed by the
center, annual comprehensive financial data consistent with the district's or
intermediate district's audited financial statements and consistent with
accounting manuals and charts of accounts approved and published by the
department. For an intermediate district, the report must 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 must 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 must include object classifications of salary, benefits, including
categories for active employee health expenditures, purchased services,
supplies, capital outlay, and other. A district 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 center the special education actual
cost report, known as "SE-4096", on a form and in the manner
prescribed by the center. An intermediate district shall certify the audit of a
district's report.
(7) By October 7 of each year, each district and intermediate
district shall file with the center the audited transportation expenditure
report, known as "SE-4094", on a form and in the manner prescribed by
the center. An intermediate district shall certify the audit of a district's
report.
(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 retains 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), (7), and (12), or if the department determines
that the financial data required under subsection (5) are not consistent with
audited financial statements, 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), (7),
and (12). If the district or intermediate district does not comply with
subsections (4), (5), (6), (7), and (12) by the end of the fiscal year, the
district or intermediate district forfeits the amount withheld.
(11) If a district or intermediate district does not comply
with subsection (2), the department may withhold up to 10% of the total 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 subsection (2). If
the district or intermediate district does not comply with subsection (2) by
the end of the fiscal year, the district or intermediate district forfeits the
amount withheld.
(12) By November 1 of each year, if a district or
intermediate district offers virtual learning under section 21f, or for a
school of excellence that is a cyber school, as defined in section 551 of the
revised school code, MCL 380.551, the district or intermediate district shall
submit to the department a report that details the per-pupil costs of operating
the virtual learning by vendor type and virtual learning model. The report must
include information concerning the operation of virtual learning for the
immediately preceding school fiscal year, including information concerning
summer programming. Information must be collected in a form and manner determined
by the department and must be collected in the most efficient manner possible
to reduce the administrative burden on reporting entities.
(13) By March 31 of each year, 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 virtual courses available
under section 21f and virtual 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.
(14) As used in subsections (12) and (13), "vendor
type" means the following:
(a) Virtual courses provided by the Michigan Virtual
University.
(b) Virtual 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) Virtual courses provided by third party vendors not
affiliated with a Michigan public school.
(d) Virtual courses created and offered by a district or
intermediate district.
(15) An allocation to a district or another entity under this
article is contingent upon the district's or entity's compliance with this
section.
