GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 256

Short Title:  Sch. Budget Accountability.	(Public)

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Sponsors: Representatives Preston; Arnold, Baker, Barbee, Clary, Grady, Gray, Hall, McComas, McMahan, Mitchell, Morris, Nichols, Owens, Russell, Sherrill, Shubert, Smith, Warner, and Watson.

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Referred to:  Education, if favorable, Appropriations.

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February 17, 1997

A BILL TO BE ENTITLED
AN ACT TO REQUIRE THE REPORTING OF THE USE OF FUNDS FOR PUBLIC SCHOOLS AT THE UNIT AND BUILDING LEVELS; TO ALLOW THE STATE BOARD TO SUSPEND LOCAL BUDGET FLEXIBILITY IF A LOCAL BOARD FAILS OR REFUSES TO COMPLY WITH LAWS AND RULES CONCERNING THE BUDGETING, MANAGEMENT, AND EXPENDITURE OF PUBLIC SCHOOL FUNDS; TO PROHIBIT LOCAL BOARDS FROM USING STATE AND LOCAL FUNDS TO BUY OUT SUPERINTENDENTS' CONTRACTS; AND TO MAKE AN APPROPRIATION.
The General Assembly of North Carolina enacts:
Section 1.  The State Board of Education shall modify the Uniform Education Reporting System to provide clear, accurate, and standard information on the use of funds at the unit and school level.  The plan shall provide information that will enable the General Assembly to determine State, local, and federal expenditures for personnel at the unit and school level.  The plan also shall allow the tracking of expenditures for textbooks, educational supplies and equipment, capital outlay, at-risk students, and other purposes.  The revised Uniform Education Reporting System shall be implemented beginning with the 1998-99 school year.
Section 2.  G.S. 115C-451 reads as rewritten:
"§ 115C-451.  Reports to State Board of Education; failure to comply with School Budget Act.
(a)	The State Board of Education shall have authority to require local school administrative units to make such reports as it may deem advisable with respect to the financial operation of the public schools.
(b)	The State Board of Education shall be responsible for assuring that local boards of education comply with State laws and regulations regarding the budgeting, management, and expenditure of funds.  When a local board of education willfully or negligently fails or refuses to comply with these laws and regulations, the State Board of Education shall issue a warning to the local board of education and direct it to take remedial action.  In addition, the State Board may suspend the flexibility given to the local board under G.S. 115C-105.21A and may require the local board to use funds during the term of suspension only for the purposes for which they were allotted or for other purposes with the specific approval from the State Board.
(c)	If the local board of education, after warning, persists in willfully or negligently failing or refusing to comply with these laws and regulations, the State Board of Education shall by resolution assume control of the financial affairs of the local board of education and shall appoint an administrator to exercise the powers assumed.  The adoption of a resolution shall have the effect of divesting the local board of education of its powers as to the adoption of budgets, expenditure of money, and all other financial powers conferred upon the local board of education by law."
Section 3.  G.S. 115C-271 reads as rewritten:
"§ 115C-271.  Selection by local board of education, term of office.
(a)	It is the policy of the State that each local board of education has the sole discretion to elect a superintendent of schools.  However, the State Board shall adopt rules that establish the qualifications for election.  At a minimum, each superintendent shall have been a principal in a North Carolina public school or shall have equivalent experience.  In addition, the State Board may establish other minimum credentials, educational prerequisites, and experience requirements.  It is the duty of each local board to elect a superintendent who is qualified. If a local board elects a superintendent who is not qualified or who cannot qualify under this section, then the election and contract are null and void and the board shall elect a person who is qualified.
(b)	Each local board of education shall elect a superintendent under a written contract of employment for a term of no more than four years, ending on June 30 of the final months of the contract.  Each contract shall contain a clause authorizing the local board in its discretion to terminate the contract at any time and for any reason the board considers sufficient.  Contracts of employment for a period of less than one year shall be governed and limited by G.S. 115C-275.  Each local board shall file a copy of the contract with the Superintendent of Public Instruction before the individual is eligible for this office.
(c)	Each local board may, with the written consent of the current superintendent, extend or renew the term of the superintendent's contract at any time after the first 12 months of the contract.  However, a board shall not extend the current superintendent's contract for a term of greater than four years.  In addition, if new board members have been elected or appointed and are to be sworn in, a board shall not act to extend or renew the current superintendent's contract until after the new members have been sworn in.
(d)	A local board shall not use State or local funds to pay a superintendent in the event the board terminates the superintendent's contract before the contract term of employment has expired."
Section 4.  There is appropriated from the General Fund to State Aid to Local School Administrative Units the sum of one million two hundred thousand dollars ($1,200,000) for the 1997-98 fiscal year to implement Section 1 of this act.
Section 5.  This act is effective when it becomes law.  G.S. 115-271, as amended, in Section 3 of this act shall apply to contracts entered into, extended, or renewed on or after this effective date.