HOUSE BILL 321
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Luciano "Lucky" Varela
AN ACT
RELATING TO PUBLIC SCHOOL FINANCE; ESTABLISHING PROGRESSIVE SANCTIONS AGAINST SCHOOL DISTRICTS AND CHARTER SCHOOLS FOR NOT SUBMITTING TIMELY AUDIT REPORTS TO THE DEPARTMENT; REQUIRING THE STATE AUDITOR TO NOTIFY THE PUBLIC EDUCATION DEPARTMENT OF FAILURE TO SUBMIT AN AUDIT; PROVIDING PENALTIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 12-6-3 NMSA 1978 (being Laws 1969, Chapter 68, Section 3, as amended) is amended to read:
"12-6-3. ANNUAL AND SPECIAL AUDITS.--
A. The financial affairs of every agency shall be thoroughly examined and audited each year by the state auditor, personnel of the state auditor's office designated by the state auditor or independent auditors approved by the state auditor. The comprehensive annual financial report for the state shall be thoroughly examined and audited each year by the state auditor, personnel of the state auditor's office designated by the state auditor or independent auditors approved by the state auditor. The audits shall be conducted in accordance with generally accepted auditing standards and rules issued by the state auditor.
B. In addition to the annual audit, the state auditor may cause the financial affairs and transactions of an agency to be audited in whole or in part.
C. Annual financial and compliance audits of agencies under the oversight of the financial control division of the department of finance and administration shall be completed and submitted by an agency and independent auditor to the state auditor no later than sixty days after the state auditor receives notification from the financial control division to the effect that an agency's books and records are ready and available for audit.
D. In order to comply with United States department of housing and urban development requirements, the financial affairs of a public housing authority that is determined to be a component unit in accordance with generally accepted accounting principles, other than a housing department of a local government or a regional housing authority, at the public housing authority's discretion, may be audited separately from the audit of its local primary government entity. If a separate audit is made, the public housing authority audit shall be included in the local primary government entity audit and need not be conducted by the same auditor who audits the financial affairs of the local primary government entity.
E. The state auditor shall notify the public education department when a school district, charter school or regional education cooperative fails to submit a required audit report within ninety days of the due date specified by the state auditor."
Section 2. A new section of the Public School Finance Act is enacted to read:
"[NEW MATERIAL] SCHOOL DISTRICT AND CHARTER SCHOOL AUDITS--SANCTIONS FOR NOT SUBMITTING TIMELY AUDIT REPORTS.--
A. Each school district and charter school shall have an annual audit as required by the Audit Act and rules of the state auditor that shall be completed and submitted to the state auditor by the date specified in rules of the state auditor. At the completion of the annual or any special audit, the school district or charter school shall submit a copy of the audit report to the department.
B. School districts and charter schools shall comply with due dates for annual audits specified by rule of the state auditor. Failure to submit a timely audit report shall subject a school district or charter school to progressive sanctions. A school district or charter school that does not submit an annual audit report:
(1) within ninety days from the due date, shall be required to submit monthly financial reports to the department until the department is satisfied that the school district or charter school is in compliance with all financial and audit requirements;
(2) after ninety days but within one hundred eighty days from the due date, may be penalized in an amount up to five percent of its current-year state equalization guarantee distribution;
(3) after one hundred eighty days but within two hundred seventy days, may be penalized in an amount up to seven percent of its current-year state equalization guarantee distribution and may be required to submit a corrective action plan to the secretary; and
(4) after two hundred seventy days, may be penalized up to seven percent of its current-year state equalization guarantee distribution and may be subject to the secretary's suspension of the local school board or governing body acting as a board of finance."
Section 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2010.
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