Rodríguez Ramos Bill Orders Recurring Charter School Audits

The text as introduced · 583 words

By: Rodríguez Ramos
H.B. No. 5571

A BILL TO BE ENTITLED

AN ACT

relating to the review, audit, and oversight of the Texas Education

Agency's administration of open-enrollment charter schools by the

Sunset Advisory Commission.

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

SECTION 1. Chapter 325, Government Code, is amended by

adding Section 325.027 to read as follows:

Sec. 325.027. REVIEW OF OPEN-ENROLLMENT CHARTER SCHOOLS.

(a) In 2026 and every third year after that year, the commission

shall conduct a comprehensive forensic and performance audit of all

institutional functions, programs, and operations of contracts,

grants, and administration at the Texas Education Agency relating

to its administration and oversight of open-enrollment charter

schools.

(b) The audit shall identify and prepare for a report:

(1) all unallowable expenses, including payments,

purchases, administrative and executive compensation, salary

transactions, and contracted services and efficiency improvements

to administration and oversight functions. The report shall

contain the total compensation of the district superintendent and

other district governance including bonuses, awards, one-time

compensation, and any other contributions.

(2) each real property owned or leased by

open-enrollment charter schools, including ownership of the

property, whether the property includes an instructional facility,

information on each lease or mortgage agreement and the aggregate

annual and prior five-year amount of any related party payment

under each lease or mortgage agreement, information about the

amount and terms of each charter school's bonds and debt service,

whether a bond is backed by a guarantee from the Permanent School

Fund, current underlying rating of each bond backed by the Bond

Guarantee Program, and the aggregate amount of charter schools'

outstanding bonds;

(3) each charter school management company that

provides management services to an open-enrollment charter school.

The report shall contain the company's name, address, names of

officers including chief financial officer, and method of

calculation and amount of annual payment by each charter school to

each management company and affiliated company;

(4) all state funds, grants, or public resources used

for marketing, advertising, or sponsorship purchases. The report

shall contain open-enrollment charter school expenditures on

digital, print, radio, television, and social media

advertisements. The report shall contain sponsorship agreements

between the charter school and any private entity, including

payments made for naming rights, endorsements, and promotional

partnerships,

(5) conflicts of interest including whether a member

of the governing body of an open-enrollment charter school has a

substantial interest in a business entity as described by Section

171.002, Local Government Code, that contracts with the school.

(c) The commission shall prepare and provide the audit

report, including all related findings, by September 1, 2026. The

report shall be provided to the Speaker of the House, Lieutenant

Governor, House Appropriations Committee, the Senate Finance

Committee, and the House Delivery of Government Efficiency

Committee.

(d) The commission shall publish the audit report on its

official website no later than the 45th day after the audit's

completion. Each summary must remain publicly accessible for at

least five years and exclude information classified as confidential

or security-sensitive under state law.

(e) If the audit conducted under this section identifies

financial mismanagement, waste, fraud, or noncompliance with state

law, the Texas Education Agency shall:

(1) Develop and implement a corrective action plan

within 90 days;

(2) Submit progress reports every six months to the

commission and Legislative Budget Board until all deficiencies are

resolved.

(f) Open-enrollment charter schools reviewed by the

commission under this section are not subject to abolition.

SECTION 2. This Act takes effect September 1, 2025.