HOUSE BILL REPORT

HB 2357

BYRepresentatives Peery, Betrozoff, G. Fisher and Holland

Allowing the superintendent of public instruction to withhold basic education moneys from school districts owing repayment of moneys to the federal government.

House Committe on Education

Majority Report:  Do pass.  (17)

      Signed by Representatives Peery, Chair; G. Fisher, Vice Chair; Betrozoff, Ranking Republican Member; Brumsickle, Cole, Dorn, Holland, Horn, Jones, P. King, Pruitt, Rasmussen, Rayburn, Schoon, Valle, Walker and K. Wilson.

House Staff:Susan Patrick (786-7111)

AS REPORTED BY COMMITTEE ON EDUCATION JANUARY 31, 1990

BACKGROUND:

Currently if the actions of a district result in a requirement of repaying federal funds spent in an unauthorized manner or the payment of interest based on the actions of a district, there is no way to recover the interest or funds for repayment from the district that is at fault.

SUMMARY:

All districts receiving federal funds are required to comply with the federal requirements.  If there is a determination by the federal government that the district's expenditure of the funds is disallowed, the Superintendent of Public Instruction may withhold money from the district's basic education allocation money to repay the principal and interest to the federal government.

No withholding may occur until the Superintendent of Public Instruction determines that withholding the money will not substantially impair the district's financial ability to provide the basic education program.

The superintendent may pay withheld funds to:  a) the district after the district repays the federal government or enters into an acceptable repayment plan; or b) the federal government for purposes of repayment.

Fiscal Note:      No Impact.

House Committee ‑ Testified For:    Perry Keithley, Superintendent of Public Instruction.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    The federal government has greatly increased the auditing of school district expenditures of federal funds.  Currently if the district has spent the money inappropriately, the Superintendent of Public Instruction pays back the money and any interest that is due.  There is no mechanism to collect these funds from the district which has caused the problem.  It is important that districts understand the importance of the restrictions placed on the expenditure of federal funds and bear the consequences of their conduct.

House Committee - Testimony Against:      None.