HB 1332 — An Act amending the act of March 10, 1949 (P.L.30, No.14), known as the Public School Code of 1949, in school finances, providing for internal auditing and reporting requirements.

Bill Text

• Printer's No. 1711 View text Current pdf

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill establishes new internal auditing and reporting requirements for school entities in Pennsylvania.

• Section 618

  Internal auditing and reporting requirements.-- (a) Each school entity shall form an independent audit committee which shall review a complete certified audit of the operations of the school entity at the close of each fiscal year. The audit shall be conducted by a qualified independent certified public accountant as selected from a list of approved providers established by the department. The audit shall be conducted under generally accepted audit standards of the Governmental Accounting Standards Board (GASB) and shall include, but not be limited to, the following tests: (1) An enrollment test to verify the accuracy of student enrollment and reporting to the Commonwealth. (2) Full review of expense reimbursements for board members and administrators, including sampling of all reimbursements. (3) Review of internal controls, including review of receipts and disbursements. (4) Review of annual Federal and State tax filings, including the Internal Revenue Service Code Form 990, Return of Organization Exempt From Income Tax and all related schedules and appendices for the school entity and school entity foundation, if applicable and, including any educational management service providers of the school entity. (5) Review of the financials of a school entity foundation, including any educational management service providers of the school entity. (6) Review of all contracts over five thousand dollars ($5,000) regarding the selection and acceptance process. (7) Review of potential conflicts of interest among board members and senior level administrators with employes or educational management service providers of the school entity. (8) Review of employe files for compliance purposes but in accordance with Federal and State regulations governing confidentiality protection for employes. (9) Any other test the department deems appropriate. (b) The certified audit as required by subsection (a) is a public document and shall be made available on the department's publicly accessible Internet website and the school's publicly accessible Internet website, if applicable. (c) A school may be subject to an annual audit by the department, its local school board or the Auditor General, in addition to any other audits required by Federal law or this act. Schools located within a school district of the first class may be subject to an annual audit by the controller of the city of the first class. (d) A school shall annually provide a copy of its annual budget for the operation of the school that identifies the following: (1) The source of funding for all expenditures. (2) Where funding is provided by a school foundation, including any educational management service providers, the amount of funds and a description of the use of the funds. (3) The salaries of all administrators of the school. (e) Notwithstanding any other provisions of law, the school and an affiliated school foundation and any educational management service providers of the school shall make copies of its annual Federal and State tax filings available upon request and on the school's, school foundation's or educational management service provider's publicly accessible Internet website, including Internal Revenue Service Code Form 990, Return of Organization Exempt From Income Tax and all related schedules and appendices. The school foundation and any educational management service providers of the school shall also make copies of its annual budget available upon request and on the school foundation's or educational management service provider's publicly accessible Internet website within thirty (30) days of the close of the foundation's or educational management service provider's fiscal year. The annual budget must include the salaries of all employes of the school foundation or of the educational management service providers of the school. (f) A school entity shall not make a payment to an educational management service provider that exceeds five (5) per centum of its per pupil cost. (g) All operations of an educational management service provider for a school pursuant to a contract or agreement with the school shall be subject to public audit requirements under section 2553. In addition, funds provided by a school to an educational management service provider for a school pursuant to a contract or agreement with the school and the use of the funds by an educational management service provider shall be subject to the audit provisions of section 403 of the act of April 9, 1929 (P.L.343, No.176), known as "The Fiscal Code." (h) The school records produced, obtained or maintained by an educational management service provider for a school pursuant to a contract or agreement with the school shall be subject to disclosure under the act of February 14, 2008 (P.L.6, No.3), known as the "Right-to-Know Law." (i) As used in this section, the following words and phrases shall have the meanings given to them in this subsection unless the context clearly indicates otherwise: "Department." The Department of Education of the Commonwealth. "Educational management service provider." A for-profit education management organization, nonprofit charter management organization, school design provider, business manager or any other partner entity with which a school entity intends to contract or presently contracts to provide educational services, operational services or management services to the school entity.

  This creates new requirements for auditing, budget transparency, and public disclosure for school entities and their educational management service providers.

Action History

1. May 06, 2019

   PN 1711 Referred to EDUCATION

Sponsors

• Brandon J. Markosek · Cosponsor
• Brett R. Miller · Cosponsor
• Tina M. Davis · Cosponsor
• Jeanne McNeill · Cosponsor
• Andre D. Carroll · Cosponsor
• Tina M. Davis · Cosponsor
• Longietti · Primary
• Carol Hill-Evans · Cosponsor
• Ullman · Cosponsor
• Caltagirone · Cosponsor
• Michael H. Schlossberg · Cosponsor
• Roebuck · Cosponsor
• Robert Freeman · Cosponsor
• Dan Frankel · Cosponsor
• Donatucci · Cosponsor
• Millard · Cosponsor
• Joe Ciresi · Cosponsor
• Sturla · Cosponsor
• Goodman · Cosponsor
• Maureen E. Madden · Cosponsor
• Danielle Friel Otten · Cosponsor
• Peter Schweyer · Cosponsor

Subjects