BUSINESS
AND OPERATIONS: STATUS AND USE [LAW]
OF
STATE FUNDS
1. Use of State Funds
Funds
received by the school on or after
A. Payment
of the School Director’s and teacher salaries and interest on money borrowed on
short time to pay those salaries that become due before school funds for the
current year become available. Loans for
the purpose of payment of teacher salaries may not be paid out of funds other than
those for the current year;
B. For
the purchase of appliances and supplies, paying insurance premiums, paying
janitors and other employees, buying school sites, buying, building, repairing,
and renting school buildings, including acquiring school buildings and sites by
leasing through annual payments with an ultimate option to purchase, and for
other purposes necessary in the conduct of the public schools determined by the
board;
Any use or application
of such funds other than those described above constitutes misuse and
misapplication of public funds and is subject to the civil and criminal laws
governing misuse or misapplication of
2. Funds Held in Trust
State
funds received by a charter holder are to be held by the charter holder in
trust for the benefit of the students of the charter school. In their use of public funds, the governing
body of a charter holder, and the governing body and officers of a charter
school, shall be held to the standard of care and fiduciary duties that a
trustee owes a beneficiary under Texas law; that is, trustees shall exercise
the judgment and care under the circumstances then prevailing that persons of
ordinary prudence, discretion, and intelligence exercise in the management of
their own affairs.
3. Depository Contract.
A. Pending their
use, state funds received by a charter holder must be deposited into a bank
with which the charter holder has entered into a depository contract. No later than November 1 of each year, the
charter holder shall file a copy of the depository contract with the Texas
Education Agency Division responsible for school financial audits.
B. State funds
received by a charter holder must be deposited into an account owned and
controlled by the charter holder pending their use. Once properly deposited, the charter holder
may immediately use the funds for any purpose described in this policy, subject
to the standard of care and fiduciary duties described herein.
C. The
depository selected under the terms of this policy shall be a bank located in
the State of
4. Exception for Certain Contracts
Notwithstanding
the above requirements, if required by a contract executed prior to September
1, 2001, state funds may be deposited into an account managed by a bond trustee
acting on behalf of a charter holder for the sole purpose of complying with
debt service obligations of the charter holder on a bond issued under Chapter
53 of the Texas Education Code.
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5. Commissioner's Audits
A. The Commissioner of Education may audit the records of a charter holder or charter school on matters directly related to the management or operation of a charter school, including financial and administrative records.
B. No more than one onsite audit may be completed during any fiscal year.
C. Additional audits may be conducted for "specific cause."
D. Such limitations do not apply to the charter holder or management company.