Chapter 522
AN ACT
SB 800
Relating to education districts.
Be It Enacted by the People of
the State of
SECTION 1. (1)(a) In performing an audit required under
ORS 328.465, the accountant under contract with the school district or county
shall determine whether the school district has:
(A) Followed generally
accepted accounting principles in reporting the district’s financial condition
and operations; and
(B) Substantially
complied with legal requirements in conducting the district’s financial
affairs.
(b) The determination
shall be included in the report as required by ORS 297.465.
(2) Upon receipt of the
audit report, the school district board shall determine the measures the board
considers necessary to correct any deficiencies disclosed in the audit report.
The board shall adopt a resolution setting forth any corrective measures the
board proposes and the period of time estimated to complete the measures.
(3) Within 60 days after
a school district files a copy of its audit report with the Secretary of State
or the Department of Education, a copy of the resolution prepared under
subsection (2) of this section shall also be filed. Upon receipt of the audit
report and the resolution, the Secretary of State and the Department of
Education shall either acknowledge the school district
board’s plans to correct deficiencies cited in the audit report or notify the
school district board of those deficiencies that, if not corrected, could
result in the withholding of funds under this section. At the request of the
school district board, the Secretary of State or the Department of Education
shall make suggestions for correcting those deficiencies. If the school
district board does not agree with the notification by the Secretary of State
or the Department of Education, the board shall be granted an opportunity for a
conference regarding the notification, audit determinations or corrective
measures to be taken.
(4) If the Secretary of
State or the Department of Education concurs with the determination made under
subsection (1) of this section in two successive audits of the same school
district and determines that the school district board has not taken adequate
action to correct the deficiencies cited in the notifications given under subsection
(3) of this section, the Secretary of State or the Department of Education may
certify those facts to the Superintendent of Public Instruction. The
certificate of the Secretary of State or the Department of Education shall be
issued only after notice, opportunity to be heard and hearing pursuant to the
provisions of ORS chapter 183 governing contested cases. The hearing shall be
held within the jurisdiction of the school district.
(5)(a) Upon receipt of a
certificate from the Secretary of State or the Department of Education under
subsection (4) of this section, the Superintendent of Public Instruction shall
withhold from distribution to the school district 10 percent of the payments
from the
(b) The moneys withheld
shall be disbursed to the school district after the Superintendent of Public
Instruction has received notice from the Secretary of State or the Department
of Education that the school district board:
(A) Has taken action to
ensure that the school district will follow generally accepted accounting
principles in reporting the district’s financial condition and operations; and
(B) Will ensure that the
school district substantially complies with legal requirements in conducting
the district’s financial affairs.
(6) The Secretary of
State or the Department of Education may not issue a certificate under
subsection (4) of this section for failure to follow generally accepted
accounting principles if a school district has followed accounting practices
authorized by state law.
(7) As used in this
section, “generally accepted accounting principles” means those accounting
principles sanctioned by recognized authoritative bodies such as the
Governmental Accounting Standards Board, the Financial Accounting Standards
Board or their successors.
SECTION 2. Section 1 of this 2007 Act applies to audits
for fiscal periods ending on or after the effective date of this 2007 Act.
Approved by the Governor June 20, 2007
Filed in the office of Secretary of State June 21, 2007
Effective date January 1, 2008
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