Bill > SB586

This bill requires school districts, cities, and chartered public schools to submit a financial audit report for the preceding fiscal year within six months of its close, which must include a summary of receipts and expenditures, a balance sheet, and detailed information on payroll, assets, debts, and capital investments. If an independent certified public accountant audit is not completed, a financial audit report compiled by the governing body must be submitted, containing specific financial details. The school board must then forward this report to the Department of Education, and the Commissioner of Education will review it for completeness within six months of receipt, with the possibility of granting extensions for disputed items. Crucially, the bill mandates that the Commissioner will withhold all state funding to any non-compliant entity until the audit or financial report is submitted and any questions are resolved to their satisfaction, with a provision for withholding funding for more than one year only if the district is not actively working to resolve deficiencies. This act is set to take effect on July 1, 2026.