November 8, 2012, Introduced by Senator HANSEN 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 2012 PA 201.
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 or intermediate
district under this article 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 30 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, including, but not limited to,
the total amount of expenses incurred by board members or employees
that are reimbursed by the district.
(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.
(v) The district's written policy governing procurement of
supplies, materials, and equipment.
(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.
(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.
(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 purpose of determining the reasonableness of
expenditures 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 at the expense of the district or
intermediate district, as applicable, 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.
(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 each year:
(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 of each year, 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 (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
(7). If the district or intermediate district does not comply with
subsections (4), (5), (6), and (7) by the end of the fiscal year,
the district or intermediate district forfeits the amount withheld.
(11) Not later than October 1, 2012, if a district or
intermediate district offers online learning, the district or
intermediate district shall submit to the department a report that
details the per-pupil costs of operating the online learning. The
report shall include, on a per-pupil basis, at least all of the
following costs:
(a) Textbooks, instructional materials, and supplies,
including electronic instructional material.
(b) Computer and other electronic equipment, including
internet and telephone access.
(c) Salaries and benefits for the online learning employees.
(d) Purchased courses and curricula.
(e) Fees associated with oversight and regulation.
(f) Travel costs associated with school activities and
testing.
(g) Facilities costs.
(h) Costs associated with special education.
(12) Not later than December 31, 2012, the department shall
issue a report to the legislature including the following:
(a) A review of the data submitted under subsection (11).
(b) A comparison with costs of substantially similar programs
in other states and relevant national research on the costs of
online learning.
(c) Any conclusions concerning factors or characteristics of
online learning programs that make a difference in the costs of
operating the programs.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No. 1352
of the 96th Legislature is enacted into law.