The Texas Education Code, §44.011, as added by Senate Bill 8, 82nd Texas Legislature, First Called Session, 2011, requires that the commissioner of education adopt minimum standards concerning school district financial conditions that must exist in order for the board of trustees of a school district to declare financial exigency.
The following rules related to financial exigency were codified into 19 Texas Administrative Code (TAC) Chapter 19, Budgeting, Accounting, and Auditing, Subchapter BB, Commissioner’s Rules Concerning Financial Exigency, §109.2001, Financial Exigency with an effective date of May 17, 2012. On that date, these final rules will supersede the emergency rules that became effective November 2011.
Financial exigency means that the financial position of a school district as a whole is such that its financial resources are insufficient to support the school district’s instructional programs or the school district is unable to finance the full compensation of staff for the current or succeeding fiscal year.
Financial exigency may be declared by a school district board of trustees under one or more of the following conditions:
- A decrease of more than 20 percent in unassigned General Fund balance per student in weighted average daily attendance over the past two years or a projected reduction of 20 percent compared to the current year.
- A decline in enrollment by more than 10 percent over the past five years.
- A reduction of more than 10 percent in total General Fund total funding per student in weighted average daily attendance over one year or a projected reduction of 10 percent compared to the current year.
- A natural disaster or casualty loss defined as damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual; and that requires expenditures for repair or remediation in excess of 15 percent of the current-year General Fund budget.
- Any of the following, or a combination of the following, that exceeds 15 percent of the current-year General Fund budget: an unanticipated major expense, including significant repair costs; litigation expenses, excluding lawsuits against the state; or tax refunds.
- Any other circumstances approved in writing by the commissioner of education.
A board may terminate a financial exigency declaration at any time if the board considers it appropriate.
Each time a school district’s board of trustees adopts a resolution or an extension declaring financial exigency, the board must notify the commissioner within 20 calendar days of the adoption. The notice must include the date the resolution was adopted and the reason(s) for the declaration of financial exigency as specified in the Requirements section above. The notice must be signed by the board president and superintendent.
The declaration of financial exigency expires at the end of the fiscal year during which the declaration is made unless the school district board of trustees adopts a resolution before the end of the fiscal year declaring continuation of the financial exigency for the following fiscal year.
Declaration of Financial Exigency (PDF, 142KB)
Board Resolution to Extend or Terminate a Declaration of Financial Exigency (PDF, 118KB)
TAC Chapter 19, Budgeting, Accounting, and Auditing, Subchapter BB, Commissioner’s Rules Concerning Financial Exigency, §109.2001, Financial Exigency
Texas Education Code, §44.011 Financial Exigency
For additional information, contact:
Robin Aldridge (512) 463-3940 firstname.lastname@example.org
Office of School Finance – Financial Accountability email@example.com
Page last modified on 2/28/2013 09:20:45 AM.