H0097B1339A00789 AJB:CDM 04/18/17 #90 A00789
AMENDMENTS TO HOUSE BILL NO. 97
Sponsor: REPRESENTATIVE LONGIETTI
Printer's No. 1339
Amend Bill, page 1, line 5, by inserting after "thereto," "
in school finances, providing for internal auditing and
reporting requirements;
Amend Bill, page 1, lines 14 through 16, by striking out all
of said lines and inserting
Section 1. The act of March 10, 1949 (P.L.30, No.14), known
as the Public School Code of 1949, is amended by adding a
section to read:
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
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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
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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.
Section 1.1. Section 1525 of the act is amended to read:
Amend Bill, page 75, by inserting between lines 2 and 3
(1) The addition of section 618 of the act shall take
effect in 60 days.
Amend Bill, page 75, line 3, by striking out "(1)" and
inserting
(2)
Amend Bill, page 75, line 5, by striking out "(2)" and
inserting
(3)
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