News & Press: IASBO News

ANSWERS TO HEA 1009 QUESTIONS

Wednesday, May 16, 2018  
ANSWERS TO HEA 1009 QUESTIONS
At the IASBO Annual Meeting last week, a few new questions came up regarding the implementation of HEA 1009.  I want to thank Dennis Tackitt for preparing these FAQ’s.  IASBO thanks Rob James for bringing forward the question on the pension debt neutrality resolution.  Further, we thank Matt Parkinson and Fred Van Dorp of DLGF for the quick response to our questions.  You can view all of the HEA 1009 FAQ’s on the IASBO website.  The new FAQ’s are:   

Q:  Do school buses need to be included in the Capital Assets Plan since they cost more than $10,000?
A:  No, school buses are represented by the Bus Replacement Plan and do not need to be included in the Capital Assets Plan.

Q: Does the $10,000 minimum apply to individual assets or the aggregate amount of similar assets in determining what to include in the      2019-2021 Capital Assets Plan? 
A:  The statute requires the inclusion of only individual assets that meet or exceed the $10,000 minimum.  

Q:  What are schools required to advertise in the newspapers regarding the 2019 budget?
A:  Nothing is required to be advertised in the newspapers.  Rather, the Notice of Hearing and Notice of Adoption are to be posted on DLGF’s Gateway for all taxpayers to view.  The district website should include the Capital Projects Plan, the Bus Replacement Plan and a link to DLGF’s Gateway.  

Q:  With the creation of the Operations Fund effective January 1, 2019, is it still necessary for the board of school trustees to adopt a Pension Debt Neutrality Resolution?
A:  No, a Pension Debt Neutrality Resolution is not required for the 2019 and future budgets.  DLGF will apply the neutrality to the Operations Fund. 

SPECIAL SESSION INFORMATION
The most controversial bill of the 2018 session of the General Assembly was HB 1315 which started out dealing with only school corporation fiscal indicators, but was amended to include language dealing with the Gary Community School Corporation school board and the take-over of the Muncie Community Schools by Ball State University.  HEA 1315ss was passed on Monday and signed into law. IASBO concentrated on the fiscal indicators section of HEA 1315ss during the session.  The following are segments of Section 15(IC 20-19-7) of the law entitled School Corporation Financial Condition Analysis:

“Sec. 3. (a) The fiscal and qualitative indicators committee is established.

Sec. 3. (b) The members of the committee must be employees of, and appointed by, each of the following: (1) The DUAB; (2) The department of education; (3) The budget agency; (4) The state board of accounts; (5) The department of local government finance; (6) The management performance hub.  In addition, a member of the Indiana Association of School Business Officials appointed by the Association’s board of directors is a member of the committee.

Sec. 3 (c) The member appointed by the DUAB is the chairperson of the committee.

Sec. 4 (a) Subject to review by the state budget committee under section 6 of this chapter, the fiscal and qualitative indicators committee shall determine the fiscal and qualitative indicators to be used for evaluating the financial condition of each school corporation.

Sec. 7 The fiscal and qualitative indicators committee shall before January 1, 2019, publish the fiscal and qualitative indicators for each school corporation on the DUAB’s Internet web site or the management performance hub’s Internet web site.

Sec. 10 Before June 1, 2019, the (DUAB) executive director shall prepare and submit to DUAB an initial report identifying those school corporations for which a corrective action plan may be appropriate.  The DUAB shall make a determination concerning which school corporations the executive director shall contact for purposes of conducting an assessment under section 11 of this chapter.

Sec. 11 (a) The executive director shall do the following:
(1) Contact the governing body and superintendent of each school corporation for which the distressed unit appeals board makes a determination under section 10 of this chapter.
(2) Carry out an assessment of the financial condition of each school corporation for which the DUAB makes a determination under section 10 of this chapter.
(b) A school corporation for which an assessment of financial condition is carried out under this section shall:
(1) cooperate with the executive director as the executive director carries out the assessment of the school corporation's financial condition; and (2) provide any information and documents requested by the executive director.

Sec. 12. (a) After reviewing:
      (1) the assessment of a school corporation's financial condition made by the executive director under section 11 of this chapter; and
      (2) the school corporation's fiscal and qualitative indicators; the DUAB shall make a determination of whether a corrective action plan     is necessary for the school corporation.
      (b) If the DUAB makes a determination that a corrective action plan is necessary for the school corporation, the DUAB shall notify the governing body and the superintendent of the school corporation that the school corporation must develop and submit to the DUAB a corrective action plan for the school corporation within ninety (90) days after the notice is provided.
      (c) If a school corporation does not prepare and submit a corrective action plan to the DUAB within ninety (90) days after the notice is provided under subsection (b), the DUAB shall place the school corporation on the watch list under section 17 of this chapter.

Sec. 15. The executive director shall meet at least once every ninety (90) days with the school corporation's superintendent, the president of the school corporation's governing body, and (as necessary) other administrators of the school corporation to discuss the corrective action plan and the school corporation's progress in implementing the corrective action plan.

Sec. 16. The following apply after a corrective action plan is submitted to the DUAB:
       (1) The DUAB may modify the corrective action plan at anytime if the DUAB determines that the modification is necessary.
       (2) The superintendent or the governing body of the school corporation may request the DUAB to modify the corrective action plan, and the    DUAB may make the requested modification. If the superintendent of the school corporation makes the request, the superintendent must notify the governing body of the school corporation of the requested modification.

Sec. 17. (a) The DUAB shall place the school corporation on a watch list if:
       (1) the executive director determines that the school corporation is not in compliance with the school corporation's corrective action plan;
       (2) the executive director notifies the superintendent and governing body of the school corporation that:
(A) the school corporation is not in compliance with the school corporation's corrective action plan; and
(B) the school corporation must achieve compliance with the school corporation's corrective action plan within a period specified by the executive director; and
        (3) the executive director determines that the school corporation has not achieved compliance with the school corporation's corrective action    plan within the period specified in subdivision (2).

Sec. 18. (a) Notwithstanding any other law, all reports, correspondence, and other records related to a school corporation's corrective action plan, including the initial report prepared by the executive director under section 10 of this chapter and an assessment prepared under section 11 of this chapter, and the placement of a school corporation on the watch list are excepted from public disclosure under IC 5-14-3 or any other law at the discretion of the DUAB or the school corporation unless and until the school corporation is placed on the watch list and the state budget committee has reviewed the school corporation's placement on the watch list. If the DUAB or a school corporation discloses any reports, correspondence, and other records related to a school corporation's corrective action plan, including the initial report prepared by the executive director under section 10 of this chapter and an assessment prepared under section 11 of this chapter, to other state agencies or officials prior to a school corporation's placement on the watch list and review by the state budget committee, these agencies may not disclose the reports, correspondence, and other records, or the information contained in those reports, correspondence, and other records without the permission of the DUAB.”

The link to see the full bill can be found on the Monday, May 14 email distributed to the membership.