BILL ANALYSIS
AB 2335
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REPLACE - 06/02/2010 Technical change (Member name)
ASSEMBLY THIRD READING
AB 2335 (Brownley)
As Amended April 27, 2010
Majority vote
EDUCATION 9-0 APPROPRIATIONS 17-0
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|Ayes:|Brownley, Nestande, |Ayes:|Fuentes, Conway, Ammiano, |
| |Ammiano, Arambula, | | |
| |Carter, Eng, Miller, | |Bradford, Charles |
| |Norby, Torlakson | |Calderon, Coto, |
| | | |Davis, Monning, Ruskin, |
| | | |Harkey, |
| | | |Miller, Nielsen, Norby, |
| | | |Skinner, |
| | | |Solorio, Torlakson, |
| | | |Torrico |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires the Superintendent of Public Instruction (SPI)
to recommend modifications to the format of, and requirements on,
school district accounting in order to support school-level
financial reporting. Specifically, this bill :
1)Makes legislative findings and declarations related to
California's current education finance system, its complexity
and lack of transparency, the lack of tools that would allow
schools and districts to use resources effectively and
efficiently, and the need for a complete understanding of how
resources are allocated by districts and within schools.
2)States legislative intent to:
a) Support accountability by increasing the transparency of
state funding mechanisms and of expenditure decisions at the
local level; and,
b) Improve the reporting of financial data so that
programmatic investments can be linked to programs at school
sites that increase pupil achievement.
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3)Requires the SPI to make recommendations, on or before December
1, 2011, to the Legislature and the Governor concerning
statutory, regulatory, ministerial, and programmatic changes
that would be necessary to support the development,
implementation, and use of comprehensive school-level financial
data that would produce all of the following:
a) Simple to use, transparent, and informative school-level
financial reports showing both the source of school-level
revenue and the expenditures made by each school;
b) In-depth analyses of school-level financial data
including, but not necessarily limited to, analyses by fund
source, function, program, and object;
c) Comparisons of financial data across schools, both within
the district and outside of the district, and over time;
d) Linkages between school-level financial, demographic,
programmatic, and academic achievement data so as to
facilitate program and policy evaluation; and,
e) A comprehensive means for the education community,
policymakers, researchers, and the public to easily access
information about all aspects of the performance of each
school in the state.
4)Requires the SPI's recommendations to focus on all changes that
are necessary to support a future local educational agency
requirement for school-level financial data reporting, and to
address:
a) Modifications to the standardized account code structure
(SACS), to the California School Accounting Manual (CSAM), to
financial regulations imposed upon or other instructions
provided to school districts, county offices of education or
charter schools, and to the School Accountability Report
Card; and,
b) Changes to existing data collections (or the
implementation of new data collections), to the state's
Education Information System (especially to facilitate the
linking of school financial, demographic, and pupil program
data), to the state's hardware and software capacity or other
information technology needs that would be necessary to
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support publicly available school-level data analysis,
evaluative tools and publicly available school-level reports.
5)States legislative intent that the SPI's recommendations build
upon previous research, reports, evaluations, audits and
studies, and be developed in consultation with policymakers,
members of the education community, members of the public, and
other stakeholders.
6)Repeals these provisions on December 1, 2015.
EXISTING LAW :
1)Requires that each school district produce an annual school
accountability report card (SARC) for each school in the
district, including various specific data elements describing
the school and its condition.
2)Authorizes the California Department of Education (CDE) to
develop SACS to be used to account for revenues and expenditures
in local educational agencies, and requires the accounting
system used to record the financial affairs of any school
district to be consistent with CSAM as developed by the CDE.
3)Requires, on or before September 15, the governing board of each
school district to approve, in a format prescribed by the SPI,
an annual statement of all receipts and expenditures of the
district for the preceding fiscal year and to file the statement
with the county superintendent of schools.
4)Requires each county superintendent of schools to prepare and
file with the SPI a statement of all receipts and expenditures
of the county office of education for the preceding fiscal year
in a format or on forms prescribed by the SPI; also requires
each county superintendent of schools to prepare and file with
the SPI the financial statements of each school district in that
county.
5)Requires the financial statement format or forms prescribed by
the SPI to be adopted as regulations by the State Board of
Education, and authorizes periodic amendments to accommodate
changes in statute or government reporting standards.
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time General Fund administrative costs, of at least
$125,000, to the SPI to convene a group to develop recommendations
for a report on the use of comprehensive K-12 school level
financial data.
COMMENTS : According to the author, "California's current system
of school finance is highly state-centralized, extremely complex
and in need of fundamental reform. A simpler and more transparent
system is needed in order to support accountability for increased
student success." One step toward improving the transparency of
the current system is to implement, "school-level reports on
revenue and expenditures to facilitate easy comparisons across
schools and districts, including comparisons of school, district,
and statewide demographics and academic performance, and data on
program-level expenditures." The author's stated intent of this
bill is to build toward school-level reports and data that will
"facilitate easy comparisons across schools and districts,
including comparisons of school, district, and statewide
demographics and academic performance, and data on program-level
expenditures."
This bill requires the SPI to make recommendations for the
modification of the state's existing fiscal systems to support
more comprehensive school-level financial reporting. There are
clear benefits to school-level fiscal reporting - many related to
increased transparency and sensitivity to possible intra-district
funding and service inequities. In addition, school-level
financial data reveals the effectiveness of expenditures at the
intended point of impact - the school and classroom. There are
also numerous technical, administrative, accounting, and
information technology issues that would have to be addressed by
the SPI's recommendations before the Legislature could act on
those recommendations. Since the school district is the locus of
accounting and administration for the schools within the district,
it will require a complex system of rules and judgments to put all
schools in a uniform position for accounting and reporting
purposes; that is the charge proposed by this bill to be placed on
the SPI.
The state's SACS provides all California school districts with a
uniform and comprehensive system of accounts that districts are
required to use to categorize each revenue and expenditure. SACS,
along with guidance in CSAM and from the Governmental Accounting
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Standards Board, form the basis for school district accounting and
financial reporting in California. Within SACS, school-level data
can be added to the district's financial analyses; however,
districts currently have flexibility in the extent to and manner
in which they use the system to reflect school-level information.
Since school districts have different levels of interest and
expertise in terms of going beyond what is required in SACS and
district financial reports, there may be a loss in uniformity in
those school-level reports if compared across districts.
School-level financial information would serve a variety of
audiences, including the general public, education researchers,
school administrators, other district and school employees (e.g.,
program coordinators, classroom teachers or non-instructional
employees), local governing boards, the Legislature, and investors
and creditors (e.g., bondholders and prospective bondholders,
commercial banks, other creditors, vendors). According to a
report from the National Center for Educational Statistics, by
2001, 44 states had begun regulating the financial reporting of
school districts. Of these, 20 states had mandated some type of
school-level financial or budget reporting.
Analysis Prepared by : Gerald Shelton / ED. / (916) 319-2087
FN: 0004563