This bill establishes limitations on central office administrative expenses for school districts and mandates annual reporting of these expenses to the Department of Education. Specifically, it defines "central office administrative expenses" to include costs related to the management and administration of a school district, such as superintendent services, business administration, and legal services, while excluding expenses related to school-based staff and direct classroom instruction. The bill stipulates that total central office administrative expenses cannot exceed 6 percent of the total school district appropriation amounts, excluding facilities acquisition and construction. For school administrative units serving multiple districts, expenses will be allocated according to existing cost-allocation methodologies.

Additionally, the bill requires that any school district wishing to exceed the 6 percent limit must obtain a 2/3 majority vote from their legislative body for each appropriation exceeding this threshold. Each district is also required to report their central office administrative expenditures annually to the Department of Education for transparency purposes, although this reporting will not change existing accounting requirements. The act is set to take effect on July 1, 2026.

Statutes affected:
Introduced: 76:8, 198:40-a
As Amended by the House (2nd): 76:8