MinutesAmend ofRSA each21-J:20 meeting shall be taken and made available to theread public.as follows:

Amendment to HB 121-FN - Page 2 - 21-J:20 Audit on Motion of Commissioner.

The commissioner may cause [an] a financial or forensic audit to be made of the accounts of any city, town, school district, or village district or precinct, [as often as once in 2 years, or] whenever conditions appear [to him] to warrant such audit.

The commissioner shall consult with the commissioner of the department of education if the conditions are related to a school district.

The accounts of all county officers shall be audited annually by a certified public accountant, and a complete report of such audit shall be made available to the public.

3 Department of Revenue Administration;

Municipal and Property Division;

Failure to Complete Audit.

RSA 21-J:20-a is repealed and reenacted to read as follows:

21-J:20-a Notification Required;

Failure to Complete Audit.

I.

Upon completion of an audit made pursuant to RSA 21-J:19 or RSA 21-J:20, each city, town, school district, village district, county, or precinct shall provide notification to the department of the completed audit and a copy of such audit shall be sent to the department.

If a required audit is not completed by the due date of such audit, the commissioner:

(a) May levy a fine of up to $500 per day for every day of noncompliance, commencing 60 days after the department has provided written notice to the municipality, political subdivision, school district, or county of the intent to levy such fine;

or (b) Shall not consider the unreserved fund balance of the municipality, political subdivision, school district, or county when setting tax rates if the department questions the validity of the financial data due to the lack of an audit.

II.

The municipality, political subdivision, or county may petition the commissioner for waiver of the fine in instances where the failure to complete a statutorily required audit by the due date of such audit was due to reasonable cause.

If a waiver is granted, the municipality, political subdivision, or county shall within 90 days of receiving the waiver from the department provide the department an executed contract binding the municipality, political subdivision, or county, to conduct the required audit with an entity licensed and certified to do so, and within a time frame approved by the commissioner.

Fines collected by the department pursuant to this section shall be deposited in the general fund.

The department shall notify the commissioner of the department of education of the completion or failure to complete the audit by the due date of such audit by each school district or waiver granted by the commissioner.

School districts failing to complete the audit shall be listed on the department of education website and the chair of the state board of education shall be notified.

CouncilThe meetingsdepartment shall beadopt openrules for the criteria to allbe parentsused in the determination of studentsgranting witha disabilities,waiver districtof staff,fines, for issuing fines, and allthe otheramount interestedof parties.the fines.

The4 councilDepartment shallof ensureRevenue thatAdministration; meetings are held in accessible locations and provide accommodations as necessary.

Municipal and Property Division;

Publication of Report of Audit.

Amend RSA 21-J:21 to read as follows:

Amendment to HB 121-FN - Page 3 - 1-J:21 Publication of Report of Audit.

A written or printed report of every completed audit shall be made to the proper local officials including [a summary of] the findings and recommendations of the auditors and a copy of such [summary] shall be published in the next annual report, a complete copy of the audit shall be posted on the governing body's website, and reviewed at the next public meeting of the governing body following the fiscal year in which the audit was completed.

If, in the opinion of the governing board of a city or the selectmen, school board, county or village district commissioners, the whole report of audit should be published, the report may be published.

If such [summary of] findings and recommendations [is] are not so published, the commissioner, at the expense of the county, city, town, or district affected thereby, may cause such [summary] to be separately published and, if available, distributed or published in a newspaper having a general circulation in said county, city, town, or district.

5 School Money;

Penalty for Failure to File a Report.

Amend RSA 198:4-f, I to read as follows:

I.

A school district, city, chartered public school, or public academy shall file the reports due under RSA 198:4-d[, III] no later than September 1 of each year.

6 New Paragraph;

School Money;

Penalty for Failure to File Report.

Amend RSA 198:4-f by inserting after paragraph III the following new paragraph:

TheA council’sschool dutiesdistrict, shallcity, include:chartered public school that is greater than 6 months late in complying with the audit requirements pursuant to RSA 21-J:19 and RSA 194-B:10 may have state aid withheld by the commissioner of the department of education for just cause.

(a)In Advisingdetermining just cause, the districtcommissioner onof mattersthe relatingdepartment education, or designee, shall reach out to the educationauditor performing the work and safetythe ofauditee studentsto withdetermine disabilities.if the auditee has caused unreasonable delays.

(b)The Meetingcommissioner atof leastthe quarterlydepartment withof districteducation administrationshall tonotify participate in the planning,governing development,body and30 evaluationdays ofprior districtto specialwithholding educationstate programs.aid.

(c)7 ProvidingNew inputSection; on district policies, procedures, and practices related to special education.

(d)The FacilitatingState communicationSchool betweenOrganization; parents, the school board, and the district administration.

(e)State ServingProbation. as a resource for parents, including providing information on state and federal rights of students with disabilities.

Amend RSA 186 by inserting after section 5 the following new section:

186:5-a Public School District Probation.

I.

After reasonable notice has been provided to all affected parties, the state board may place a public school district on probationary status for up to 6 months under the following circumstances:

(a) The school commits a material violation of any of the conditions, standards, or administrative rules.

(b) The school fails to meet generally accepted standards for fiscal management.

(c) The school significantly violates state or federal law.

(d) The school becomes insolvent or financially unstable.

(e) The school fails to comply with the reporting requirements in accordance with RSA 198:4-f.

(f) The school fails to comply with state or federal reporting requirements.

(g) The school fails to remedy the causes of its probation.

Amendment to HB 121-FN - Page 4 - II.

Notice of the placement on probation shall be provided in writing to the district’s school board members, superintendent or staff authorized to perform superintendent services, posted on the district and department’s website, the governor, commissioner of the department revenue administration, senate president, speaker of the house, and the chairs of the senate and house education funding and policy committees.

III.

The department and state board shall consult with the district school board on the development and implementation of a remedial plan to address specific areas of concern.

IV.

The state board may place a public school district on probationary status for up to 6 months to allow the implementation of a remedial plan.

TheAfter councilthe shallprobationary receiveperiod, assistanceif fromthe remedial plan is unsuccessful in addressing the administrationconcerns, andthe schooldepartment boardshall asappoint needed,or subjecthire an administrator to oversee the availabilitycorrections ofidentified staffpursuant andto resources.RSA 186:5-a, I.

The districtdepartment shallmay ensuredraw thata thewarrant council has HB 121-FN - AS INTRODUCED - Page 2 - adequate resources to fulfill its duties, including access to meeting space, administrative support, and materials necessary for effectivepayment communicationof with parents and the community.administrator.

VI.The state board may authorize the administrator, for a period of up to one year, to:

Each(1) schoolOverride districtany shall,decisions withof the cooperationschool anddistrict's participationboard ofor the DSEPAC,school holddistrict atsuperintendent, leastor oneboth, workshopconcerning annuallythe tomanagement review and answeroperation questionsof regarding the rightsschool ofdistrict, parentsand initiate and studentsmake withdecisions disabilitiesconcerning underthe statemanagement and federaloperation law.of the school district.

The(2) workshopAttend shallany includeand informationall onmeetings of the IEPschool process,district's disputeboard resolutionand options,administrative staff and resourcesprovide availableupdates toon parents.corrective actions being taken.

VII.(3) Establish and implement a strategy designed to promote family and community involvement.

The(4) DSEPACSupervise shallthe submitday-to-day anactivities annualof report to the school boarddistrict's bystaff, Julyincluding 1reassigning the duties and responsibilities of eachpersonnel yearin summarizinga itsmanner activities,that, recommendations,in andthe anydetermination concernsof raisedthe byadministrator, parentsbest duringsuits the year.needs of the school district.

This(5) reportPlace shallon beextended madeleave, publiclysuspend, availableor onterminate for cause the districtschool website.district's superintendent or business manager, or both.

2The Effectiveadministrator Date.is not authorized to provide a severance or buyout package to the school district's superintendent or business manager if the school district is placed into probation by the state board of education.

ThisA actperson shallterminated takepursuant effectto Septemberthis 1,paragraph 2025.may appeal the administrator's decision to the state board of education if an appeal is filed with the state board within 30 days of receiving notice of the termination.

LBA(6) 25-0090Authorize 10/30/24pupils HBto 121-FN-transfer FISCALfrom NOTEschools ASoperated INTRODUCEDby ANthe ACTschool establishingdistrict localto schools operated by another school district specialthat educationis parentnot advisorycurrently councils.on probation, pursuant to RSA 193:3, I(g).

FISCAL(7) IMPACT:Appoint a staff person to perform superintendent services pursuant to RSA 194- C:5, II(a).

Estimated(8) PoliticalAppoint Subdivisiona Impactchief FYfiscal 2025officer FYwho 2026shall FYpossess 2027the FYpowers 2028and Localduties Revenueof $0the $0school $0district's $0business Localmanager Expendituresand $0any Indeterminableother METHODOLOGY:duties regarding budgeting, accounting, and other financial matters that are assigned to the school district by law.

ThisAmendment billto requiresHB school121-FN administrative- unitsPage to5 establish- (9) Appoint a specialcompetent educationindependent parentpublic advisoryaccountant council.to audit the accounts of the school district if not previously done by the department of revenue administration.

There(10) mayReorganize bethe costsschool todistrict's developfinancial andaccounts, supportmanagement, councils,and butbudgetary itsystems wouldto beimprove determinedfinancial perresponsibility district and basedreduce onfinancial preexistinginefficiency resources.within the district.

The(11) costEstablish toschool holddistrict anfiscal annualguidelines workshopand ona thesystem specialof educationinternal itemscontrols, outlinedincluding ininternal theadministrative billcontrols mayand alsointernal haveaccounting acontrols, cost.with provisions for internal audits.

Ultimately,(12) thisProvide bill’smonthly impactupdates onto localthe schooldepartment districts,and ifstate any,board. will vary from district to district.

AGENCIES(13) CONTACTED:Once the administrator's corrective actions have been completed, they shall provide a verbal and written report to the department and state board outlining the actions taken, needed steps forward, and monitoring recommendations.

Department8 ofRegular EducationSchool Districts;

Auditors.

RSA 671:5 is repealed and reenacted to read as follows:

671:5 Auditors.

School districts shall hire independent auditors pursuant to RSA 21-J:19.

9 Repeal.

The following are repealed:

I.

RSA 193-H:5, relative to power of the department of education to take control of daily operations of local schools.

II.

RSA 198:4-d, VI, relative to school money;

reports required.

10 Effective Date.

This act shall take effect upon its passage.

Amendment to HB 121-FN - Page 6 - 2025-3086h AMENDED ANALYSIS This bill:

I.

Revises the audit process for towns, school districts, or village districts, including penalties for failures to comply.

II.

Repeals the election of school district auditors.

III.

Allows the state board of education to place a public school district on probationary status and to institute a remedial plan.

IV.

Requires the department of education to hire an administrator to oversee a public school district that remains on probationary status and provides duties and powers to that role.