MISSISSIPPI LEGISLATURE

2006 Regular Session

To: Education; Appropriations

By: Senator(s) Chaney, Tollison

Senate Bill 2639

AN ACT TO AMEND SECTION 37-3-11, MISSISSIPPI CODE OF 1972, TO REQUIRE THE STATEWIDE FINANCIAL REPORT BY THE STATE DEPARTMENT OF EDUCATION TO COMPLY WITH THE STANDARD THAT AT LEAST 65% OF TOTAL CURRENT OPERATIONAL EXPENDITURES SHALL BE EXPENDED FOR DIRECT STUDENT INSTRUCTION AND TO PROVIDE THAT SAID FINANCIAL REPORT SHALL BE PREPARED ON A SCHOOL DISTRICT BASIS; TO AMEND SECTIONS 37-9-18 AND 37-61-9, MISSISSIPPI CODE OF 1972, TO REQUIRE SCHOOL DISTRICTS TO COMPLY WITH APPROPRIATE FUNCTIONAL LEVEL EXPENDITURE CODES, TO REQUIRE AN ANNUAL AUDIT OF SUCH COMPLIANCE; TO AMEND SECTION 37-61-21, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR YEAR-END FINANCIAL DATA BY SCHOOL DISTRICTS; TO AMEND SECTIONS 37-7-301, 37-37-1, 37-37-7 AND 37-61-23, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE STATE DEPARTMENT OF EDUCATION SHALL PRESCRIBE THE FINANCIAL ACCOUNTING MANUAL FOR SCHOOL DISTRICTS; TO AMEND SECTION 37-61-33, MISSISSIPPI CODE OF 1972, TO AUTHORIZE TEACHERS TO CARRY FORWARD APPROVED CLASSROOM SUPPLY EXPENDITURES INTO SUBSEQUENT FISCAL YEARS; AND FOR RELATED PURPOSES.

     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

     SECTION 1.  Section 37-3-11, Mississippi Code of 1972, is amended as follows:

     37-3-11.  (1)  Until July 1, 1984, the State Superintendent of Public Education shall have the power and it shall be his duty:

          (a)  To supervise in the manner provided by law the public free schools, agricultural high schools and junior colleges of the state and to prescribe such rules and regulations for the efficient organization and conduct of same, as he may deem necessary.

          (b)  To preside over all meetings of the State Board of Education.

          (c)  To collect data for determining the proper distribution of the state common school funds.

          (d)  To have bound and preserved in his office, as the property of the state, all such school documents from other states and governments, books and pamphlets on educational subjects, school books, apparatus, maps, charts and the like, as shall be or have been purchased or donated for the use of his office.

          (e)  To keep a complete record of all his official acts and the acts of the State Board of Education.

          (f)  To prepare, have printed and furnish all officers charged with the administration of the laws pertaining to the public schools, such blank forms and books as may be necessary to the proper discharge of their duties; all of this printing shall be paid for out of funds provided by the Legislature.

          (g)  To have printed in pamphlet form the laws pertaining to the public schools and publish therein forms for conducting school business, the rules and regulations for the government of schools that he or the board of education may recommend, and such other matters as may be deemed worthy of public interest pertaining to the public schools; all of this printing shall be paid for out of funds provided by the Legislature.

          (h)  To meet the county superintendents annually at such time and place as he shall appoint for the purpose of accumulating facts relative to schools, to review the educational progress made in the various sections of the state, to compare views, discuss problems, hear discussions and suggestions relative to examinations and qualifications of teachers, methods of instruction, textbooks, summer schools for teachers, visitation of schools, consolidation of schools, health work in the schools, vocational education and other matters pertaining to the public school system.

          (i)  To advise the county superintendents upon all matters involving the welfare of the schools, and at the request of any county superintendent to give his opinion upon a written statement of facts on all questions and controversies arising out of the interpretation and construction of the school laws, in regard to rights, powers and duties of school officers and county superintendents, and to keep a record of all such decisions.  Before giving any opinion, the superintendent may submit the statement of facts to the Attorney General for his advice thereon, and it shall be the duty of the Attorney General forthwith to examine such statement, and suggest the proper decision to be made upon such facts.

          (j)  To require annually, and as often as he may deem proper, of county superintendents, detailed reports on the educational business of the various counties.

          (k)  To make reports concerning agricultural high schools and serve on various committees and boards as provided by law.

          (l)  On or before January 10 in each year in which the Legislature meets in regular session, to prepare, and have printed a report to the Legislature showing:

              (i)  The receipts and disbursements of all school funds officially handled by him;

              (ii)  The number of school districts, school teachers employed, and pupils taught therein, and the attendance of pupils;

              (iii)  County and district levies for common schools, high schools, agricultural high schools, consolidated schools and junior colleges;

              (iv)  The conditions of vocational education in the State of Mississippi, a list of schools to which federal and state aid has been given, and a detailed statement of the expenditures of federal funds and the state funds that may be provided;

              (v)  Such general matters, information and recommendations as relate, in his opinion, to the educational interests of the state.

          (m)  To determine the number of educable children in the several school districts of the state under rules and regulations to be prescribed by the State Board of Education.

          (n)  To perform such other duties in the administration of the public schools as may be required by law.

     (2)  From and after July 1, 1984, the State Superintendent of Public Education shall perform the duties assigned to him by the State Board of Education, and he shall have the following duties:

          (a)  To serve as Secretary for the State Board of Education;

          (b)  To be the chief administrative officer of the State Department of Education;

          (c)  To recommend to the State Board of Education for its consideration rules and regulations for the supervision of the public free schools and agricultural high schools of the state and for the efficient organization and conduct of the same;

          (d)  To collect data and make it available to the State Board for determining the proper distribution of the state common school funds;

          (e)  To keep a complete record of all official acts of the State Superintendent and the acts of the State Board of Education;

          (f)  To prepare, have printed and furnish all officers charged with the administration of the laws pertaining to the public schools, such blank forms and books as may be necessary to the proper discharge of their duties, said printing to be paid for out of funds provided by the Legislature;

          (g)  To have printed in pamphlet form the laws pertaining to the public schools and publish therein forms for conducting school business, the rules and regulations for the government of schools that the State Superintendent or the Board of Education may recommend, and such other matters as may be deemed worthy of public interest pertaining to the public schools, said printing to be paid for out of funds provided by the Legislature;

          (h)  To meet all superintendents annually at such time and place as the State Superintendent shall appoint for the purpose of accumulating facts relative to schools, to review the educational progress made in the various sections of the state, to compare views, discuss problems, hear discussions and suggestions relative to examinations and qualifications of teachers, methods of instruction, textbooks, summer schools for teachers, visitation of schools, consolidation of schools, health work in the schools, vocational education and other matters pertaining to the public school system;

          (i)  To advise all superintendents upon all matters involving the welfare of the schools, and at the request of any superintendent to give an opinion upon a written statement of facts on all questions and controversies arising out of the interpretation and construction of the school laws, in regard to rights, powers and duties of school officers and superintendents, and to keep a record of all such decisions.  Before giving any opinion, the superintendent may submit the statement of facts to the Attorney General, and it shall be the duty of the Attorney General forthwith to examine such statement and suggest the proper decision to be made upon such fact;

          (j)  To require annually, and as often as the State Superintendent may deem proper, of all superintendents, detailed reports on the educational business of the various districts;

          (k)  On or before January 10 in each year to prepare under the direction of the State Board of Education and have printed the annual report of the board to the Legislature showing:

              (i)  The receipts and disbursements of all school funds handled by the board;

              (ii)  The number of school districts, school teachers employed, school administrators employed, pupils taught and the attendance record of pupils therein;

              (iii)  County and district levies for each school district and agricultural high school;

              (iv)  The condition of vocational education, a list of schools to which federal and state aid has been given, and a detailed statement of the expenditures of federal funds and the state funds that may be provided, and the ranking of subjects taught as compared with the state's needs;

              (v)  Reports of Expenditures for public schools shall be divided into the following categories and function codes, shall show the same level of detail as reports completed prior to FY2006 and Total Student Expenditures shall be at least sixty-five percent (65%) of Total Current Operational Expenditures, exclusive of Fixed Assets Expenditures in the other expenditures categories.  This sixty-five percent (65%) requirement shall not be in effect in fiscal years when a natural disaster or state of emergency has been declared by the Governor in counties in which more than one-fifth (1/5) of school districts in the State of Mississippi are located.  These reports shall be made available by district from the State Department of Education upon request.

          Total Student Expenditures

              Instruction (1000s);

              Other Student Instructional Expenditures (2100s, 2200s);

          General Administration (2300s and 2500s);

          School Administration (2400s);

          Other Expenditures (2600s, 2700s, 2800s, 3100s, 3200s);

          Non-Operational Expenditures (4000s, 5000s, 6000s).

              (vi)  Such general matters, information and recommendations as relate, in the board's opinion, to the educational interests of the state;

          (l)  To determine the number of educable children in the several school districts under rules and regulations prescribed by the State Board of Education;

          (m)  To perform such other duties as may be prescribed by the State Board of Education.

     SECTION 2.  Section 37-61-9, Mississippi Code of 1972, is amended as follows:

     37-61-9.  (1)  On or before the fifteenth day of August of each year, the local school board of each school district, with the assistance of the superintendent of schools,shall prepare and file with the levying authority for the school district, as defined in Section 37-57-1, Mississippi Code of 1972, at least two (2) copies of a budget of estimated expenditures for the support, maintenance and operation of the public schools of the school district for the fiscal year commencing on July 1 of such year.  Such budget shall be prepared on forms prescribed and provided by the State Auditor and shall contain such information as the State Auditor may require.

     (2)  In addition, on or before the fifteenth day of August of each year, the local school board of each school district, with the assistance of the superintendent of schools, shall prepare and file with the State Department of Education such budgetary information as the State Board of Education may require.  The State Board of Education shall prescribe and provide forms to each school district for this purpose.

     (3)  Prior to the adoption of a budget pursuant to this section, the school board of each school district shall hold at least one (1) public hearing to provide the general public with an opportunity to comment on the taxing and spending plan incorporated in the proposed budget.  The public hearing shall be held at least one (1) week prior to the adoption of the budget with advance notice.  After final adoption of the budget, a synopsis of such budget in a form prescribed by the State Department of Audit shall be published in a newspaper having general circulation in the school district on a date different from the date on which the county or any municipality therein may publish its budget.

     (4)  Beginning with the fiscal year 1995-1996, there shall be imposed limitations on budgeted expenditures for certain administration costs, as defined hereinafter, in an amount not greater than One Hundred Fifty Thousand Dollars ($150,000.00) plus four percent (4%) of the expenditures of all school districts each year.  For purposes of this subsection, "administration costs" shall be defined as expenditures for salaries and fringe benefits paid for central administration costs from all sources of revenue in the following expenditure functions as defined in the MISSISSIPPI PUBLIC SCHOOL DISTRICT FINANCIAL ACCOUNTING MANUAL:

     2300 =    Support Services - General Administration

          2310 =    Board of Education Services

          2320 =    Executive Administration Services

          2330 =    Special Area Administration Services

     2500 =    Business Services

          2510 =    Fiscal Services

          2520 =    Purchasing Services

          2530 =    Warehousing and Distributing Services

          2540 =    Printing, Publishing and Duplicating Services

          2590 =    Other Support Services - Business

 * * *

     Any costs classified as "administration costs" for purposes of this subsection which can be demonstrated by the local school district to be an expenditure that results in a net cost savings to the district that may otherwise require budget expenditures for functions not covered under the definition of administration costs herein may be excluded from the limitations imposed herein.  The local school board shall make a specific finding of such costs and spread such finding upon its minutes, which shall be subject to the approval of the Office of Educational Accountability of the State Department of Education.  Any school district required to make expenditure cuts, as a result of application of this subsection, shall not be required to reduce such expenditures more than twenty-five percent (25%) in any year in order to comply with this mandate.

     The State Auditor shall ensure that functions in all expenditure categories to which this administrative limitation applies shall be properly classified.

     This section shall not apply to central administration with five (5) or less full-time employees, or to those school districts which can substantiate that comparable reductions have occurred in administrative costs for the five-year period immediately prior to school year 1993-1994.  In the event the application of this section may jeopardize the fiscal integrity or operations of the school district, have an adverse impact on the ability of the district to deliver educational services, or otherwise restrict the district from achieving or maintaining a quality education program, the State Board of Education shall be authorized to exempt the application of this section to such school district pursuant to rules and regulations of the State Board of Education consistent with the intent of this section.

     SECTION 3.  Section 37-9-18, Mississippi Code of 1972, is amended as follows:

     37-9-18.  (1)  The superintendent of schools shall furnish to the school board a financial statement of receipts and disbursements, by funds, on or before the last working day of the following month covering the prior month.  The school board shall be authorized to investigate and audit all financial records of the superintendent of schools at any and all times.

     (2)  The State Auditor, in his discretion, shall audit the financial records of school districts.  The State Auditor shall give reasonable notice to school districts regarding the times during which he will perform such audits.  In any fiscal year in which the State Auditor is not scheduled to perform an audit, the school board shall cause all the financial records of the superintendent of schools to be audited by a certified public accountant licensed to practice accounting in the State of Mississippi.  If the school board so elects by resolution adopted each year, the audit shall be performed by the State Auditor.  Contracts for the audit of public school districts shall be let by the school board in the manner prescribed by the State Auditor.  The audit shall be conducted in accordance with generally accepted auditing standards and generally accepted accounting principles, and the report presented thereon shall be in accordance with generally accepted accounting principles.  If the Auditor's opinion on the general purpose financial statements is a disclaimer, as that term is defined by generally accepted auditing standards, or if the State Auditor determines the existence of serious financial conditions in the district, the State Auditor shall immediately notify the State Board of Education.  Upon receiving the notice, the State Superintendent of Public Education shall direct the school district to immediately cease all expenditures until a financial advisor is appointedby the state superintendent.  However, if the disclaimer is a result of conditions caused by Hurricane Katrina 2005 and applies to fiscal years 2005 and/or 2006, then the Superintendent of Education may appoint a financial advisor, and may direct the school district to immediately cease all expenditures until a financial advisor is appointed.  The financial advisor shall be an agent of the State Board of Education and shall be a certified public accountant or a qualified business officer.  The financial advisor shall,with the approval of the State Board of Education:

          (a)  Approve or disapprove all expenditures and all financial obligations of the district;

          (b)  Ensure compliance with any statutes and State Board of Education rules or regulations concerning expenditures by school districts;

          (c)  Review salaries and the number of all district personnel and make recommendations to the local school board of any needed adjustments.  Should such recommendations necessitate the reduction in local salary supplement, such recommended reductions shall be only to the extent which will result in the salaries being comparable to districts similarly situated, as determined by the State Board of Education.  The local school board, in considering either a reduction in personnel or a reduction in local supplements, shall not be required to comply with the time limitations prescribed in Sections 37-9-15 and 37-9-105 and, further, shall not be required to comply with Sections 37-19-11 and 37-19-7(1) in regard to reducing local supplements and the number of personnel;

          (d)  Work with the school district's business office to correct all inappropriate accounting procedures and/or uses of school district funds and to prepare the school district's budget for the next fiscal year; and

          (e)  Report frequently to the State Board of Education on the corrective actions being taken and the progress being made in the school district.  The financial advisor shall serve until such time as corrective action and progress is being made in such school district as determined by the State Board of Education with the concurrence of the State Auditor, or until such time as an interim conservator is assigned to such district by the State Board of Education under Section 37-17-6.  The school district shall be responsible for all expenses associated with the use of the financial advisor.  If the audit report reflects a failure by the school district to meet accreditation standards, the State Board of Education shall proceed under Section 37-17-6.

     (3)  When conducting an audit of a public school district, the Auditor shall test to insure that the school district is complying with the requirements of Section 37-61-33(3)(a)(iii) relating to classroom supply funds.  The audit must include a report of all classroom supply funds carried over from previous years.  Based upon the audit report, the State Auditor shall compile a report on the compliance or noncompliance by all school districts with the requirements of Section 37-61-33(3)(a)(iii), which report must be submitted to the Chairmen of the Education and Appropriations Committees of the House of Representatives and Senate.

     (4)  When conducting an audit of a public school district the State Auditor shall test to ensure correct and appropriate coding at the function level.  The audit must include a report showing correct and appropriate functional level expenditure codes in both budgeting and expenditures by school district.  Based upon the audit report, the State Auditor shall compile a report on the compliance or noncompliance by all public school districts with correct and appropriate coding at the function level, which report must be submitted to the Chairman of the Education and Appropriations Committees of the Senate and the House of Representatives.

     (5)  In the event the State Auditor does not perform the audit examination, then the audit report of the school district shall be reviewed by the State Auditor for compliance with applicable state laws before final payment is made on the audit by the school board.  All financial records, books, vouchers, cancelled checks and other financial records required by law to be kept and maintained in the case of municipalities shall be faithfully kept and maintained in the office of the superintendent of schools under the same provisions and penalties provided by law in the case of municipal officials.

     SECTION 4.  Section 37-61-21, Mississippi Code of 1972, is amended as follows:

     37-61-21.  (1)  If it should appear to the superintendent of schools or the school board of any school district that the amounts to be received from state appropriations, taxation or any other source will be more than the amount estimated in the budget filed and approved, or if it should appear that such amounts shall be less than the amount estimated, the school board of the school district, with assistance from the superintendent, may revise the budget at any time during the fiscal year by increasing or decreasing the fund budget, in proportion to the increase or decrease in the estimated amounts.  If it should appear to the superintendent of schools or the school board of a school district that some function of the budget as filed is in excess of the requirement of that function and that the entire amount budgeted for such function will not be needed for expenditures therefor during the fiscal year, the school board of the school district, with assistance from the superintendent, may transfer resources to and from functions and funds within the budget when and where needed; however, no such transfer shall be made from fund to fund or from function to function which will result in the expenditure of any money for any purpose different from that for which the money was appropriated, allotted, collected or otherwise made available or for a purpose which is not authorized by law.  No revision of any budget under the provisions hereof shall be made which will permit a fund expenditure in excess of the resources available for such purpose.  The revised portions of the budgets shall be incorporated in the minutes of the school board by spreading them on the minutes or by attaching them as an addendum.  Final budget revisions, pertinent to a fiscal year, shall be approved on or before the date set by the State Board of Education for the school district to submit its financial information for that fiscal year.

     (2)  In addition, on or before the fifteenth day of October of each year, the local school board of each school district, with the assistance of the superintendent of schools, shall prepare and file with the State Department of Education year-end financial statements and such budgetary information as the State Board of Education may require.  The State Board of Education shall prescribe and provide forms to each school district for this purpose.  No additional changes shall be made to said financial statements after October 15 of each year.

     SECTION 5.  Section 37-7-301, Mississippi Code of 1972, is amended as follows:

     37-7-301.  The school boards of all school districts shall have the following powers, authority and duties in addition to all others imposed or granted by law, to wit:

          (a)  To organize and operate the schools of the district and to make such division between the high school grades and elementary grades as, in their judgment, will serve the best interests of the school;

          (b)  To introduce public school music, art, manual training and other special subjects into either the elementary or high school grades, as the board shall deem proper;

          (c)  To be the custodians of real and personal school property and to manage, control and care for same, both during the school term and during vacation;

          (d)  To have responsibility for the erection, repairing and equipping of school facilities and the making of necessary school improvements;

          (e)  To suspend or to expel a pupil or to change the placement of a pupil to the school district's alternative school or home-bound program for misconduct in the school or on school property, as defined in Section 37-11-29, on the road to and from school, or at any school-related activity or event, or for conduct occurring on property other than school property or other than at a school-related activity or event when such conduct by a pupil, in the determination of the school superintendent or principal, renders that pupil's presence in the classroom a disruption to the educational environment of the school or a detriment to the best interest and welfare of the pupils and teacher of such class as a whole, and to delegate such authority to the appropriate officials of the school district;

          (f)  To visit schools in the district, in their discretion, in a body for the purpose of determining what can be done for the improvement of the school in a general way;

          (g)  To support, within reasonable limits, the superintendent, principal and teachers where necessary for the proper discipline of the school;

          (h)  To exclude from the schools students with what appears to be infectious or contagious diseases; provided, however, such student may be allowed to return to school upon presenting a certificate from a public health officer, duly licensed physician or nurse practitioner that the student is free from such disease;

          (i)  To require those vaccinations specified by the State Health Officer as provided in Section 41-23-37, Mississippi Code of 1972;

          (j)  To see that all necessary utilities and services are provided in the schools at all times when same are needed;

          (k)  To authorize the use of the school buildings and grounds for the holding of public meetings and gatherings of the people under such regulations as may be prescribed by said board;

          (l)  To prescribe and enforce rules and regulations not inconsistent with law or with the regulations of the State Board of Education for their own government and for the government of the schools, and to transact their business at regular and special meetings called and held in the manner provided by law;

          (m)  To maintain and operate all of the schools under their control for such length of time during the year as may be required;

          (n)  To enforce in the schools the courses of study and the use of the textbooks prescribed by the proper authorities;

          (o)  To make orders directed to the superintendent of schools for the issuance of pay certificates for lawful purposes on any available funds of the district and to have full control of the receipt, distribution, allotment and disbursement of all funds provided for the support and operation of the schools of such school district whether such funds be derived from state appropriations, local ad valorem tax collections, or otherwise.  The local school board shall be authorized and empowered to promulgate rules and regulations that specify the types of claims and set limits of the dollar amount for payment of claims by the superintendent of schools to be ratified by the board at the next regularly scheduled meeting after payment has been made;

          (p)  To select all school district personnel in the manner provided by law, and to provide for such employee fringe benefit programs, including accident reimbursement plans, as may be deemed necessary and appropriate by the board;

          (q)  To provide athletic programs and other school activities and to regulate the establishment and operation of such programs and activities;

          (r)  To join, in their discretion, any association of school boards and other public school-related organizations, and to pay from local funds other than minimum foundation funds, any membership dues;

          (s)  To expend local school activity funds, or other available school district funds, other than minimum education program funds, for the purposes prescribed under this paragraph.  "Activity funds" shall mean all funds received by school officials in all school districts paid or collected to participate in any school activity, such activity being part of the school program and partially financed with public funds or supplemented by public funds.  The term "activity funds" shall not include any funds raised and/or expended by any organization unless commingled in a bank account with existing activity funds, regardless of whether the funds were raised by school employees or received by school employees during school hours or using school facilities, and regardless of whether a school employee exercises influence over the expenditure or disposition of such funds.  Organizations shall not be required to make any payment to any school for the use of any school facility if, in the discretion of the local school governing board, the organization's function shall be deemed to be beneficial to the official or extracurricular programs of the school.  For the purposes of this provision, the term "organization" shall not include any organization subject to the control of the local school governing board.  Activity funds may only be expended for any necessary expenses or travel costs, including advances, incurred by students and their chaperons in attending any in-state or out-of-state school-related programs, conventions or seminars and/or any commodities, equipment, travel expenses, purchased services or school supplies which the local school governing board, in its discretion, shall deem beneficial to the official or extracurricular programs of the district, including items which may subsequently become the personal property of individuals, including yearbooks, athletic apparel, book covers and trophies.  Activity funds may be used to pay travel expenses of school district personnel.  The local school governing board shall be authorized and empowered to promulgate rules and regulations specifically designating for what purposes school activity funds may be expended.  The local school governing board shall provide (i) that such school activity funds shall be maintained and expended by the principal of the school generating the funds in individual bank accounts, or (ii) that such school activity funds shall be maintained and expended by the superintendent of schools in a central depository approved by the board.  The local school governing board shall provide that such school activity funds be audited as part of the annual audit required in Section 37-9-18.  The State Department of Education shall prescribe a uniform system of accounting and financial reporting for all school activity fund transactions;

          (t)  To contract, on a shared savings, lease or lease-purchase basis, for energy efficiency services and/or equipment as provided for in Section 31-7-14, not to exceed ten (10) years;

          (u)  To maintain accounts and issue pay certificates on school food service bank accounts;

          (v)  (i)  To lease a school building from an individual, partnership, nonprofit corporation or a private for-profit corporation for the use of such school district, and to expend funds therefor as may be available from any nonminimum program sources.  The school board of the school district desiring to lease a school building shall declare by resolution that a need exists for a school building and that the school district cannot provide the necessary funds to pay the cost or its proportionate share of the cost of a school building required to meet the present needs.  The resolution so adopted by the school board shall be published once each week for three (3) consecutive weeks in a newspaper having a general circulation in the school district involved, with the first publication thereof to be made not less than thirty (30) days prior to the date upon which the school board is to act on the question of leasing a school building.  If no petition requesting an election is filed prior to such meeting as hereinafter provided, then the school board may, by resolution spread upon its minutes, proceed to lease a school building.  If at any time prior to said meeting a petition signed by not less than twenty percent (20%) or fifteen hundred (1500), whichever is less, of the qualified electors of the school district involved shall be filed with the school board requesting that an election be called on the question, then the school board shall, not later than the next regular meeting, adopt a resolution calling an election to be held within such school district upon the question of authorizing the school board to lease a school building.  Such election shall be called and held, and notice thereof shall be given, in the same manner for elections upon the questions of the issuance of the bonds of school districts, and the results thereof shall be certified to the school board.  If at least three-fifths (3/5) of the qualified electors of the school district who voted in such election shall vote in favor of the leasing of a school building, then the school board shall proceed to lease a school building.  The term of the lease contract shall not exceed twenty (20) years, and the total cost of such lease shall be either the amount of the lowest and best bid accepted by the school board after advertisement for bids or an amount not to exceed the current fair market value of the lease as determined by the averaging of at least two (2) appraisals by certified general appraisers licensed by the State of Mississippi.  The term "school building" as used in this paragraph (v)(i) shall be construed to mean any building or buildings used for classroom purposes in connection with the operation of schools and shall include the site therefor, necessary support facilities, and the equipment thereof and appurtenances thereto such as heating facilities, water supply, sewage disposal, landscaping, walks, drives and playgrounds.  The term "lease" as used in this paragraph (v)(i) may include a lease/purchase contract;

              (ii)  If two (2) or more school districts propose to enter into a lease contract jointly, then joint meetings of the school boards having control may be held but no action taken shall be binding on any such school district unless the question of leasing a school building is approved in each participating school district under the procedure hereinabove set forth in paragraph (v)(i).  All of the provisions of paragraph (v)(i) regarding the term and amount of the lease contract shall apply to the school boards of school districts acting jointly.  Any lease contract executed by two (2) or more school districts as joint lessees shall set out the amount of the aggregate lease rental to be paid by each, which may be agreed upon, but there shall be no right of occupancy by any lessee unless the aggregate rental is paid as stipulated in the lease contract.  All rights of joint lessees under the lease contract shall be in proportion to the amount of lease rental paid by each;

          (w)  To employ all noninstructional and noncertificated employees and fix the duties and compensation of such personnel deemed necessary pursuant to the recommendation of the superintendent of schools;

          (x)  To employ and fix the duties and compensation of such legal counsel as deemed necessary;

          (y)  Subject to rules and regulations of the State Board of Education, to purchase, own and operate trucks, vans and other motor vehicles, which shall bear the proper identification required by law;

          (z)  To expend funds for the payment of substitute teachers and to adopt reasonable regulations for the employment and compensation of such substitute teachers;

          (aa)  To acquire in its own name by purchase all real property which shall be necessary and desirable in connection with the construction, renovation or improvement of any public school building or structure.  Whenever the purchase price for such real property is greater than Fifty Thousand Dollars ($50,000.00), the school board shall not purchase the property for an amount exceeding the fair market value of such property as determined by the average of at least two (2) independent appraisals by certified general appraisers licensed by the State of Mississippi.  If the board shall be unable to agree with the owner of any such real property in connection with any such project, the board shall have the power and authority to acquire any such real property by condemnation proceedings pursuant to Section 11-27-1 et seq., Mississippi Code of 1972, and for such purpose, the right of eminent domain is hereby conferred upon and vested in said board.  Provided further, that the local school board is authorized to grant an easement for ingress and egress over sixteenth section land or lieu land in exchange for a similar easement upon adjoining land where the exchange of easements affords substantial benefit to the sixteenth section land; provided, however, the exchange must be based upon values as determined by a competent appraiser, with any differential in value to be adjusted by cash payment.  Any easement rights granted over sixteenth section land under such authority shall terminate when the easement ceases to be used for its stated purpose.  No sixteenth section or lieu land which is subject to an existing lease shall be burdened by any such easement except by consent of the lessee or unless the school district shall acquire the unexpired leasehold interest affected by the easement;

          (bb)  To charge reasonable fees related to the educational programs of the district, in the manner prescribed in Section 37-7-335;

          (cc)  Subject to rules and regulations of the State Board of Education, to purchase relocatable classrooms for the use of such school district, in the manner prescribed in Section 37-1-13;

          (dd)  Enter into contracts or agreements with other school districts, political subdivisions or governmental entities to carry out one or more of the powers or duties of the school board, or to allow more efficient utilization of limited resources for providing services to the public;

          (ee)  To provide for in-service training for employees of the district.  Until June 30, 1994, the school boards may designate two (2) days of the minimum school term, as defined in Section 37-19-1, for employee in-service training for implementation of the new statewide testing system as developed by the State Board of Education.  Such designation shall be subject to approval by the State Board of Education pursuant to uniform rules and regulations;

          (ff)  As part of their duties to prescribe the use of textbooks, to provide that parents and legal guardians shall be responsible for the textbooks and for the compensation to the school district for any books which are not returned to the proper schools upon the withdrawal of their dependent child.  If a textbook is lost or not returned by any student who drops out of the public school district, the parent or legal guardian shall also compensate the school district for the fair market value of the textbooks;

          (gg)  To conduct fund-raising activities on behalf of the school district that the local school board, in its discretion, deems appropriate or beneficial to the official or extracurricular programs of the district; provided that:

              (i)  Any proceeds of the fund-raising activities shall be treated as "activity funds" and shall be accounted for as are other activity funds under this section; and

              (ii)  Fund-raising activities conducted or authorized by the board for the sale of school pictures, the rental of caps and gowns or the sale of graduation invitations for which the school board receives a commission, rebate or fee shall contain a disclosure statement advising that a portion of the proceeds of the sales or rentals shall be contributed to the student activity fund;

          (hh)  To allow individual lessons for music, art and other curriculum-related activities for academic credit or nonacademic credit during school hours and using school equipment and facilities, subject to uniform rules and regulations adopted by the school board;

          (ii)  To charge reasonable fees for participating in an extracurricular activity for academic or nonacademic credit for necessary and required equipment such as safety equipment, band instruments and uniforms;

          (jj)  To conduct or participate in any fund-raising activities on behalf of or in connection with a tax-exempt charitable organization;

          (kk)  To exercise such powers as may be reasonably necessary to carry out the provisions of this section;

          (ll)  To expend funds for the services of nonprofit arts organizations or other such nonprofit organizations who provide performances or other services for the students of the school district;

          (mm)  To expend federal No Child Left Behind Act funds, or any other available funds that are expressly designated and authorized for that use, to pay training, educational expenses, salary incentives and salary supplements to employees of local school districts; except that incentives shall not be considered part of the local supplement as defined in Section 37-151-5(o), nor shall incentives be considered part of the local supplement paid to an individual teacher for the purposes of Section 37-19-7(1).  Mississippi Adequate Education Program funds or any other state funds may not be used for salary incentives or salary supplements as provided in this paragraph (mm);

          (nn)  To use any available funds, not appropriated or designated for any other purpose, for reimbursement to the state-licensed employees from both in-state and out-of-state, who enter into a contract for employment in a school district, for the expense of moving when the employment necessitates the relocation of the licensed employee to a different geographical area than that in which the licensed employee resides before entering into the contract.  The reimbursement shall not exceed One Thousand Dollars ($1,000.00) for the documented actual expenses incurred in the course of relocating, including the expense of any professional moving company or persons employed to assist with the move, rented moving vehicles or equipment, mileage in the amount authorized for county and municipal employees under Section 25-3-41 if the licensed employee used his personal vehicle or vehicles for the move, meals and such other expenses associated with the relocation.  No licensed employee may be reimbursed for moving expenses under this section on more than one (1) occasion by the same school district.  Nothing in this section shall be construed to require the actual residence to which the licensed employee relocates to be within the boundaries of the school district that has executed a contract for employment in order for the licensed employee to be eligible for reimbursement for the moving expenses.  However, the licensed employee must relocate within the boundaries of the State of Mississippi.  Any individual receiving relocation assistance through the Critical Teacher Shortage Act as provided in Section 37-159-5 shall not be eligible to receive additional relocation funds as authorized in this paragraph;

          (oo)  To use any available funds, not appropriated or designated for any other purpose, to reimburse persons who interview for employment as a licensed employee with the district for the mileage and other actual expenses incurred in the course of travel to and from the interview at the rate authorized for county and municipal employees under Section 25-3-41;

          (pp)  Consistent with the report of the Task Force to Conduct a Best Financial Management Practices Review, to improve school district management and use of resources and identify cost savings as established in Section 8 of Chapter 610, Laws of 2002, local school boards are encouraged to conduct independent reviews of the management and efficiency of schools and school districts.  Such management and efficiency reviews shall provide state and local officials and the public with the following:

              (i)  An assessment of a school district's governance and organizational structure;

              (ii)  An assessment of the school district's financial and personnel management;

              (iii)  An assessment of revenue levels and sources;

              (iv)  An assessment of facilities utilization, planning and maintenance;

              (v)  An assessment of food services, transportation and safety/security systems;

              (vi)  An assessment of instructional and administrative technology;

              (vii)  A review of the instructional management and the efficiency and effectiveness of existing instructional programs; and

              (viii)  Recommended methods for increasing efficiency and effectiveness in providing educational services to the public;

          (qq)  To enter into agreements with other local school boards for the establishment of an educational service agency (ESA) to provide for the cooperative needs of the region in which the school district is located, as provided in Section 37-7-345.  This paragraph shall repeal on July 1, 2007;

          (rr)  To implement a financial literacy program for students in Grades 10 and 11.  The board may review the national programs and obtain free literature from various nationally recognized programs.  After review of the different programs, the board may certify a program that is most appropriate for the school districts' needs.  If a district implements a financial literacy program, then any student in Grade 10 or 11 may participate in the program.  The financial literacy program shall include, but is not limited to, instruction in the same areas of personal business and finance as required under Section 37-1-3(2)(b).  The school board may coordinate with volunteer teachers from local community organizations, including, but not limited to, the following:  United States Department of Agriculture Rural Development, United States Department of Housing and Urban Development, Junior Achievement, bankers and other nonprofit organizations.  Nothing in this paragraph shall be construed as to require school boards to implement a financial literacy program;

          (ss)  To collaborate with the State Board of Education, Community Action Agencies or the Department of Human Services to develop and implement a voluntary program to provide services for a full-day prekindergarten program that addresses the cognitive, social, and emotional needs of four-year-old and three-year-old children.  The school board may utilize nonstate source special funds, grants, donations or gifts to fund the voluntary program;

          (tt)  With respect to any lawful, written obligation of a school district, including, but not limited to, leases (excluding leases of sixteenth section public school trust land), bonds, notes, or other agreement, to agree in writing with the obligee that the State Tax Commission or any state agency, department or commission created under state law may:

              (i)  Withhold all or any part (as agreed by the school board) of any monies which such local school board is entitled to receive from time to time under any law and which is in the possession of the State Tax Commission, or any state agency, department or commission created under state law; and

              (ii)  Pay the same over to any financial institution, trustee or other obligee, as directed in writing by the school board, to satisfy all or part of such obligation of the school district.

     The school board may make such written agreement to withhold and transfer funds irrevocable for the term of the written obligation and may include in the written agreement any other terms and provisions acceptable to the school board.  If the school board files a copy of such written agreement with the State Tax Commission, or any state agency, department or commission created under state law then the State Tax Commission or any state agency, department or commission created under state law shall immediately make the withholdings provided in such agreement from the amounts due the local school board and shall continue to pay the same over to such financial institution, trustee or obligee for the term of the agreement.

     This paragraph (tt) shall not grant any extra authority to a school board to issue debt in any amount exceeding statutory limitations on assessed value of taxable property within such school district or the statutory limitations on debt maturities, and shall not grant any extra authority to impose, levy or collect a tax which is not otherwise expressly provided for, and shall not be construed to apply to sixteenth section public school trust land;

          (uu)  With respect to any matter or transaction that is competitively bid by a school district, to accept from any bidder as a good faith deposit or bid bond or bid surety, the same type of good faith deposit or bid bond or bid surety that may be accepted by the state or any other political subdivision on similar competitively bid matters or transactions.  This paragraph (uu) shall not be construed to apply to sixteenth section public school trust land.  The school board may authorize the investment of any school district funds in the same kind and manner of investments, including pooled investments, as any other political subdivision, including community hospitals; and

          (vv)  To utilize the alternate method for the conveyance or exchange of unused school buildings and/or land, reserving a partial or other undivided interest in the property, as specifically authorized and provided in Section 37-7-485, Mississippi Code of 1972.

     SECTION 6.  Section 37-37-1, Mississippi Code of 1972, is amended as follows:

     37-37-1.  The State Department of Education is hereby authorized and directed to prescribe and formulate for use by all school districts of this state, including municipal separate school districts, adequate accounting systems and other essential financial records which shall be uniform for all of the school districts of this state.  Such uniform system shall include a method of accounting for and keeping records of all funds received, handled and disbursed by such school district, whether derived from taxation or otherwise, including funds derived from donations, athletic events and other special activities of the school district.  The uniform system of accounts so prescribed and formulated by the State Department of Education shall be distributed and disseminated to all of the school districts of this state and it shall be mandatory that the boards of trustees of all such school districts install, utilize and follow said uniform system of accounts in keeping the financial records of the school district.

     SECTION 7.  Section 37-37-7, Mississippi Code of 1972, is amended as follows:

     37-37-7.  (1)  In making audits under the provisions of this chapter, the examiners may call the attendance rolls at the schools, make field investigations and surveys, make checks of the number of students being transported upon publicly or privately owned buses, and make other and further examinations and investigations as may be necessary to determine whether or not the students reported are actually enrolled in and attending the public schools or are actually being transported or entitled to transportation to such public schools.

     (2)  In addition to the powers and duties of examiners in subsection (1), the State Department of Education may establish policies and procedures to ensure the accuracy and reliability of student data used to determine state funding for local school districts, which may include, but are not limited to, the following:

          (a)  On-site audits;

          (b)  An auditing process that ensures the timeliness and accuracy of reports generated by school districts of this state regarding all student transactions;

          (c)  An auditing process that provides for the timeliness, process and accuracy of the electronic transmission of all student data to the Mississippi Department of Education, including, but not limited to, student enrollment, attendance, transportation, absenteeism, graduation and dropouts and other student data and administrative functions as deemed necessary;

          (d)  An audit of the accuracy and validity of all student transactions using the Mississippi Student Information  System; and

          (e)  An audit process that ensures the timeliness and accuracy of reports, other than student data, required for submission in accordance with state law and/or State Board of Education policies.

     Reviews and audits shall be conducted with advance notice, except that unannounced audits may be made upon the determination of the State Department of Education when they are necessary due to complaints or valid concerns.  Examiners shall make every effort to work with school districts in scheduling audits in consideration of instructional activities such as statewide student testing days.  The Department of Education and the school district shall cooperate fully with examiners in providing any related information requested in order to properly conduct the review or audit.

     SECTION 8.  Section 37-61-23, Mississippi Code of 1972, is amended as follows:

     37-61-23.  The superintendent of schools of each school district shall open and keep regular sets of books, as prescribed by the State Department of Education, which shall be subject to inspection during office hours by any citizen so desiring to inspect the same.  The books for each fiscal year shall be kept separately and same shall be safely preserved by the superintendent of schools.

     SECTION 9.  Section 37-61-33, Mississippi Code of 1972, is amended as follows:

     37-61-33.  (1)  There is created within the State Treasury a special fund to be designated the "Education Enhancement Fund" into which shall be deposited all the revenues collected pursuant to Sections 27-65-75(7) and (8) and 27-67-31(a) and (b).

     (2)  Of the amount deposited into the Education Enhancement Fund, Sixteen Million Dollars ($16,000,000.00) shall be appropriated each fiscal year to the State Department of Education to be distributed to all school districts.  Such money shall be distributed to all school districts in the proportion that the average daily attendance of each school district bears to the average daily attendance of all school districts within the state for the following purposes:

          (a)  Purchasing, erecting, repairing, equipping, remodeling and enlarging school buildings and related facilities, including gymnasiums, auditoriums, lunchrooms, vocational training buildings, libraries, teachers' homes, school barns, transportation vehicles (which shall include new and used transportation vehicles) and garages for transportation vehicles, and purchasing land therefor.

          (b)  Establishing and equipping school athletic fields and necessary facilities connected therewith, and purchasing land therefor.

          (c)  Providing necessary water, light, heating, air conditioning and sewerage facilities for school buildings, and purchasing land therefor.

          (d)  As a pledge to pay all or a portion of the debt service on debt issued by the school district under Sections 37-59-1 through 37-59-45, 37-59-101 through 37-59-115, 37-7-351 through 37-7-359, 37-41-89 through 37-41-99, 37-7-301, 37-7-302 and 37-41-81, or debt issued by boards of supervisors for agricultural high schools pursuant to Section 37-27-65, if such pledge is accomplished pursuant to a written contract or resolution approved and spread upon the minutes of an official meeting of the district's school board or board of supervisors.  The annual grant to such district in any subsequent year during the term of the resolution or contract shall not be reduced below an amount equal to the district's grant amount for the year in which the contract or resolution was adopted.  The intent of this provision is to allow school districts to irrevocably pledge a certain, constant stream of revenue as security for long-term obligations issued under the code sections enumerated in this paragraph or as otherwise allowed by law.  It is the intent of the Legislature that the provisions of this paragraph shall be cumulative and supplemental to any existing funding programs or other authority conferred upon school districts or school boards.  Debt of a district secured by a pledge of sales tax revenue pursuant to this paragraph shall not be subject to any debt limitation contained in the foregoing enumerated code sections.

     (3)  The remainder of the money deposited into the Education Enhancement Fund shall be appropriated as follows:

          (a)  To the State Department of Education as follows:

              (i)  Sixteen and sixty-one one-hundredths percent (16.61%) to the cost of the adequate education program determined under Section 37-151-7; of the funds generated by the percentage set forth in this section for the support of the adequate education program, one and one hundred seventy-eight one-thousandths percent (1.178%) of the funds shall be appropriated to be used by the State Department of Education for the purchase of textbooks to be loaned under Sections 37-43-1 through 37-43-59 to approved nonpublic schools, as described in Section 37-43-1.  The funds to be distributed to each nonpublic school shall be in the proportion that the average daily attendance of each nonpublic school bears to the total average daily attendance of all nonpublic schools;

              (ii)  Seven and ninety-seven one-hundredths percent (7.97%) to assist the funding of transportation operations and maintenance pursuant to Section 37-19-23; and

              (iii)  Nine and sixty-one one-hundredths percent (9.61%) for classroom supplies, instructional materials and equipment, including computers and computer software, to be distributed to all school districts in the proportion that the average daily attendance of each school district bears to the average daily attendance of all school districts within the state.  Classroom supply funds shall not be expended for administrative purposes.  Local school districts shall allocate classroom supply funds equally among all classroom teachers in the school district.  For purposes of this subparagraph, "teacher" means any employee of the school board of a school district who is required by law to obtain a teacher's license from the State Department of Education and who is assigned to an instructional area of work as defined by the department, but shall not include a federally funded teacher.  Two (2) or more teachers may agree to pool their classroom supply funds for the benefit of a school within the district.  It is the intent of the Legislature that all classroom teachers shall be involved in the development of a spending plan that addresses individual classroom needs and supports the overall goals of the school regarding supplies, instructional materials, equipment, computers or computer software under the provisions of this subparagraph, including the type, quantity and quality of such supplies, materials and equipment.  This plan shall be submitted in writing to the school principal for approval.  Classroom supply funds allocated under this subparagraph shall supplement, not replace, other local and state funds available for the same purposes.  School districts need not fully expend the funds received under this subparagraph in the year in which they are received, but such funds may be carried forward for expenditure in any succeeding school year.  Any individual teacher or group of teachers with an approved spending plan that has not been fully funded need not expend the funds allocated under this subparagraph in the year in which they are received.  Such funds may be carried forward for expenditure in any subsequent school year in which their plan is fully funded.  However, beginning July 1, 2006, any funds allocated under this subparagraph that remain unspent, unless it is reserved in an approved spending plan, by March 31 of the fiscal year in which they were allotted, shall be utilized by the school where the teacher is employed for instructional supply and equipment purposes.  The State Board of Education shall develop and promulgate rules and regulations for the administration of this subparagraph consistent with the above criteria, with particular emphasis on allowing the individual teachers to expend funds as they deem appropriate;

          (b)  Twenty-two and nine one-hundredths percent (22.09%) to the Board of Trustees of State Institutions of Higher Learning for the purpose of supporting institutions of higher learning; and

          (c)  Fourteen and forty-one one-hundredths percent (14.41%) to the State Board for Community and Junior Colleges for the purpose of providing support to community and junior colleges.

     (4)  The amount remaining in the Education Enhancement Fund after funds are distributed as provided in subsections (2) and (3) of this section shall be disbursed as follows:

          (a)  Twenty-five Million Dollars ($25,000,000.00) shall be deposited into the Working Cash-Stabilization Reserve Fund created pursuant to Section 27-103-203(1), until the balance in such fund reaches the maximum balance of seven and one-half percent (7-1/2%) of the General Fund appropriations in the appropriate fiscal year.  After the maximum balance in the Working Cash-Stabilization Reserve Fund is reached, such money shall remain in the Education Enhancement Fund to be appropriated in the manner provided for in paragraph (b) of this subsection.

          (b)  The remainder shall be appropriated for other educational needs.

     (5)  None of the funds appropriated pursuant to subsection (3)(a) of this section shall be used to reduce the state's General Fund appropriation for the categories listed in an amount below the following amounts:

          (a)  For subsection (3)(a)(ii) of this section, Thirty-six Million Seven Hundred Thousand Dollars ($36,700,000.00);

          (b)  For the aggregate of minimum program allotments in the 1997 fiscal year, formerly provided for in Chapter 19, Title 37, Mississippi Code of 1972, as amended, excluding those funds for transportation as provided for in subsection (5)(a) in this section.

     SECTION 10.  This act shall take effect and be in force from and after July 1, 2006.