TO:                         IASBO Members
FROM:                  Denny Costerison


House Ways and Means Committee

The committee heard SB 196, school debt service obligations, this morning.  This is the “fix” regarding the Standard & Poor’s negative credit watch for school bonds.  A technical amendment to the bill was added to assure that bonds are covered at the end of a state fiscal year.  The amendment was added to the bill by consent.  The bill passed 20-0.

The second bill heard this morning was SB 567, Gary schools and the distressed unit appeals board.  The bill was amended by a vote of 17-5 with the following provisions:

  • The Muncie Community Schools is designated as a distressed political subdivision.  Therefore, the DUAB would appoint an emergency manager to deal with the fiscal issues of the corporation.
  • The membership of the DUAB is changed by adding three nonvoting legislative members and a member appointed by the governor.
  • Allows the IEERB to petition the DUAB to consider a school corporation for designation as distressed.
  • Provides that the emergency manager employs the chief financial officer.
  • Requires that the emergency manager employ a chief academic officer.
  • Allows a school corporation to opt out of a State Board of Accounts examination and have an independent examination.

There was much discussion about adding Muncie to the designation as a distressed political subdivision.  Gary had asked for that consideration, but Muncie had not.  Committee Chair Tim Brown stated that Muncie was added because of recent State Board of Accounts findings.  The following individuals testified and asked that Muncie not be placed in this bill: Senator Tim Lanane, Representative Sue Errinngton, Representative Melanie Wright, Steve Baule, Muncie Superintendent, and Debbie Feick, Muncie Board President.  The bill as amended passed the committee by a vote of 19-3.  SB 567 will continue to be a bill that will have much debate as the session continues.


Senate Floor Action

This afternoon, HB 1009, school financial matters, was amended by Senator Kenley on second reading.  IASBO and the Indianapolis Public Schools asked that this amendment be added to HB 1009:

“IC 20-26-5-38 is added as a NEW section that is effective July 1, 2017, and reads as follows: Sec. 38. (a)Notwithstanding any other law, the governing body of a school corporation may request in writing that the state board of accounts authorize the governing body of the school corporation to opt out of examination requirements by the state board of accounts and engage a certified public accountant to conduct the examination.  (b)If the state board of accounts grants a waiver to the governing body of a school corporation under subsection (a), the governing body of the school corporation may contract with a certified public accountant for an annual financial audit of the school corporation.  The certified public accountant engaged by the governing body of the school corporation may not have a significant financial interest, as determined by the governing body, in a vendor or retailer with whom the school corporation is under contract.  (c) A school corporation that receives a waiver under subsection (a) shall provide a copy of any independent financial audit under this section to the state board of accounts.”

IASBO thanks Senator Kenley for adding this amendment to HB 1009.  The bill now goes to third reading tomorrow in the Senate.