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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: ED DP 7-2-3-0 |
HB 2481: school districts; records; noncompliance; penalties
Sponsor: Representative Gress, LD 4
Caucus & COW
Overview
Establishes training and interventions requirements, bond and override election restrictions and a civil penalty for school districts that fail to correct a deficiency in the Uniform System of Financial Records (USFR) within specified timeframes.
History
The Arizona Auditor General (OAG), in conjunction with the Arizona Department of Education (ADE), establishes the USFR, which prescribes the minimum internal control policies and procedures to be used by school districts for accounting, financial reporting, budgeting, attendance reporting and other compliance requirements (USFR).
The OAG must inform a school district that fails to maintain the USFR of the school district's deficiencies and give the school district 90 days to correct the deficiencies. The OAG must report to ADE and the State Board of Education (SBE) any school district that fails to correct USFR deficiencies within 90 days after receiving notice. If SBE determines a school district is not in compliance with the USFR or has failed to correct a deficiency within 90 days after receiving notice from the OAG, SBE must direct the Superintendent of Public Instruction to withhold up to 10% of the school district's apportionment of state monies for each violation until the OAG reports the school district's compliance. During the withholding, the OAG and ADE must assist the school district to achieve compliance (A.R.S. §§ 15-271 and 15-272).
A school district governing board (governing board) must order a district additional assistance (DAA) override to adopt a budget that includes an amount for capital purposes that exceeds the DAA budget limit. If the DAA override is approved by the voters, a school district may assess secondary property taxes for capital projects (A.R.S. § 15-481).
A governing board may, or on petition of 15% of the school district's electors must, call an election to decide whether: 1) bonds should be issued and sold for prescribed capital purposes; or 2) to change the list of capital projects or the purposes authorized by a previous vote to issue bonds. If the question to issue bonds is approved by the voters, the school district may assess secondary property taxes to redeem bonds and pay interest (A.R.S. § 15-491).
Provisions
1. Instructs SBE, if a school district fails to correct a USFR deficiency within 90 days after receiving notice from the OAG, to:
a. consult with ADE to determine the amount of training and other interventions necessary or appropriate to assist the school district to achieve compliance; and
b. direct ADE to provide the training and interventions within 30 calendar days. (Sec. 1)
2. Specifies the training must be provided to the school district's superintendent, business manager, chief financial officer and any other administrator or executive identified by SBE or ADE. (Sec. 1)
3. Directs ADE to notify SBE when the training and interventions are completed. (Sec. 1)
4. Authorizes ADE to contract with a third party to provide the training and interventions and requires the school district to pay for any costs incurred by ADE to provide the training and interventions. (Sec. 1)
5. Requires SBE, if a school district fails to correct a USFR deficiency within 18 months after receiving notice from the OAG and beginning the 18th month, to impose a monthly civil penalty of $1,000 against the school district's superintendent until the OAG reports the school district's compliance with the USFR. (Sec. 1)
6. Prohibits a governing board, if the school district fails to correct a USFR deficiency within 90 days after receiving notice from the OAG, from doing the following until the school district has corrected any deficiencies:
a. ordering a DAA override election; or
b. calling an election to issue school district bonds or to change the list of capital projects or the purposes authorized by a previous vote to issue bonds. (Sec. 3, 4)
7. Specifies, for the purposes of the prohibition on ordering a DAA override or bond election, the school district is deemed to have corrected any deficiencies beginning the date that the OAG reports that the school district is in compliance with the USFR. (Sec. 3, 4)
8. Makes technical and conforming changes. (Sec. 1, 2, 3, 4)
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Initials CH HB 2481
2/11/2026 Page 0 Caucus & COW
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