Present law generally requires that the funding a student generates under TISA base funding, weighted allocations, and direct allocations must be administered and allocated by the department of education to the LEA in which the student is a member for the duration of the student's membership in the LEA. This bill adds an exception so that the state share of the funding a public charter school student generates for an LEA under TISA base funding, weighted allocations, and direct allocations must not be allocated to the LEA, but must be allocated directly to the public charter school. This bill applies to public charter schools the present law requirements for LEAs to repay school funds erroneously distributed or misappropriated or illegally expended. This bill requires the commissioner of education, in consultation with the comptroller of the treasury, to develop, revise as necessary, and prescribe a standardized system of financial accounting and reporting for all public charter schools, including appropriate forms or other documentation. This system must be designed to facilitate year-to-year and agency-to-agency comparison, as well as adequately indicating the sources and uses of all funds received by each public charter school. This bill requires the commissioner to review the fiscal public school records in all public charter schools to the end that the expenditure of funds is properly accounted for and safeguarded. This bill authorizes the commissioner to require public charter schools that receive allocations of state education funding to comply with one or more of the requirements established for LEAs in present law concerning local fiscal accounting and reporting. Present law requires a local board of education shall allocate to a charter school an amount equal to: (1) The total of the state and local student-generated funds for member students in the charter school for the prior year in alignment with the TISA; (2) The average per pupil local funds received by the district in the current school year above those required by the TISA for each member student in the charter school in the prior year; (3) The per student state and local funds received by the LEA for member students in the charter school in the current school year beyond the prior year's membership; and (4) All appropriate allocations under federal law or regulation, including, but not limited to, IDEA and ESEA funds. This bill revises (1) and (2) to the following: (1) The local student-generated funds for member students in the public charter school for the prior year in alignment with the TISA; and (2) The average per pupil state and local funds received by the district in the current school year above those required by the TISA for each member student in the public charter school in the prior year. This bill requires that versions of the TISA guide published on or after the date that this bill becomes a law explain how a public charter school may dispute an alleged error in an allocation made to an LEA. ON MARCH 6, 2025, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 1019, AS AMENDED. AMENDMENT #1 makes the following revisions:  Revises the provision requiring the TISA guide to explain how a public charter school may dispute an alleged error in an allocation to its authorizer by also requiring the guide to explain the procedures the authorizer must take.  Revises the provision requiring the state share of the funding a public charter school student generates for an LEA to be allocated directly to the public charter school to, instead, (i) be allocated to the LEA and (ii) disbursed directly to the public charter school by the department of education unless the public charter school is authorized by the Tennessee public charter school commission or by the achievement school district, in which case such funds must be disbursed to the commission or achievement school district.  Adds that all funds, federal, state, and local, generated or received by an LEA must be properly accounted for in the official financial records of the LEA. Payment of funds to a public charter school by the state on behalf of an LEA must be recorded in the LEA's financial records in the appropriate revenue and expenditure categories.  Removes the provision requiring the commissioner of education, in consultation with the comptroller of the treasury, to develop, revise as necessary, and prescribe a standardized system of financial accounting and reporting for all public charter schools, including appropriate forms or other documentation.  Removes the provision requiring the commissioner of education to review the fiscal public school records in all public charter schools to the end that the expenditure of funds, whether for current operation and maintenance purposes, capital outlay purposes, and other school purposes, are properly accounted for and safeguarded.  Removes the provision authorizing the commissioner of education to require public charter schools that receive allocations of state education funding to comply with one or more of the requirements established for LEAs, as the commissioner deems appropriate or applicable.

Statutes affected:
Introduced: 49-3-103(d)(3), 49-3-103, 49-3-105, 49-3-316, 49-13-112