West Virginia Code
Because of the adoption of the "Tax Limitation Amendment," it has become necessary for the state to participate to an increasing degree in the financing of the free public schools. In the fiscal year one thousand nine hundred thirty-eight -- one thousand nine hundred thirty-nine, this participation aggregated fifty-five percent of the total expended by county boards of education for the operation of the schools of the state, and in seventeen counties state aid represented in excess of seventy percent of the total amounts spent for public education in those counties. In consequence of this state investment in local education, the state has acquired a paramount interest in the sound and stable management of the financial affairs of county school districts so that the maximum effectiveness of education may be obtained from the expenditure of the limited funds available.
With the foregoing purposes in view, this article is enacted to develop improved methods of financial administration and to bring increased financial guidance and assistance to the management of county school affairs.
The provisions of this article shall be construed to be in addition to the authority now exercised by the Tax Commissioner as chief inspector and supervisor of public offices (under article nine, chapter six of the code), for the purposes of fidelity accounting and auditing. The intent of the Legislature is that the powers granted by this article to the state board of school finance over financial management shall in administration be fully coordinated with those of the Tax Commissioner over the legality and fidelity of public expenditures.
The provisions of this article shall be liberally construed to give effect to the purposes stated.
For the purposes of this article:
"Board of finance" means the state board of school finance.
"Budget" means the annual budget of school revenues and expenditures prepared and adopted by a county board of education in accordance with this article.
"Levy estimate" means the summary statement of the total budgeted school requirements prepared and adopted by a county board of education in accordance with law, in justification of the amount levied upon taxable property within the county for the support of the local schools.
"Appropriation" means an item, or the amount of an item, budgeted by a county board of education for expenditure during the fiscal year.
"Expenditure schedule" means a schedule for the expenditure of amounts budgeted throughout the fiscal year and adopted in conjunction with the annual budget.
"County board" means a county board of education.
"Employment term" means ten months of employment as defined in section fifteen, article five of this chapter.
"Instructional term" shall be that as defined in section fifteen, article five of this chapter.
There is hereby created the "state board of school finance" which shall consist of the state superintendent of free schools, as chairman, the State Tax Commissioner, and the director of the budget as secretary. The members of the board shall serve without additional compensation. The board shall meet upon the call of the chairman or a majority of its members. It shall keep a minute record of all proceedings and a special record of general regulations and special orders. The meeting place of the board shall be at the state capital. The concurrence of a majority of the members shall be necessary for all official acts. The board shall exercise the powers and perform the duties conferred upon it by this article.
The personnel of the state departments represented upon the membership of the board shall be available to the board for performance of its powers and duties.
The board of finance, in addition to the specific powers and duties conferred upon it, shall advise and assist county boards of education and county superintendents in the planning and management of school finances to the end that the most effective program of public education be realized from the funds available for expenditure by the several counties.
In the exercise of its powers under this article, the board of finance shall not substitute its discretion and judgment for that of a county board of education with respect to the desirability or reasonability of a lawful school expenditure if the provisions of law and the orders of the board of finance are complied with by the county board. If, however, a county board fails or refuses to provide for the support of the standard school term, to adhere to the budget and the expenditure schedule, or to comply with other provisions of this article, the board of finance may require such action on the part of the county board, not in violation of law, as the board of finance may find to be best calculated to restore the financial affairs of the county board to a proper and lawful basis.
The board of finance shall formulate and prescribe a uniform system of school district budgeting for the use of all county school districts to include, at least:
(1) Itemization schedules for estimating anticipated revenues and receipts of all kinds;
(2) Itemization schedules for estimating anticipated requirements for expenditure during the fiscal year;
(3) The form, classification and itemization of budget items for appropriation purposes;
(4) Expenditure schedules for the allotment of amounts of proposed expenditures throughout the fiscal year;
(5) A budget calendar fixing the dates by or upon which schedules shall be prepared, budgets adopted, and reports made to the board of finance;
(6) Methods and procedures of budgeting to be followed in the use of the uniform system.
A county board of education shall, on or before the day fixed by the budget calendar, submit its proposed budget to the board of finance together with such supporting schedules as the board may require.
A county board shall not finally adopt its budget until after the written approval of the board of finance has been received, and the levy estimate has been approved by the Tax Commissioner as required by law. If the Tax Commissioner finds that the levy estimate, based upon the budget, does not conform to the requirements of law, the board shall authorize and require such further revision of the budget as may be necessary for the correction of the levy estimate as required by the Tax Commissioner.
A county board of education shall submit a preliminary budget upon requirement of the board of finance, which approved budget shall be considered by the Tax Commissioner when approving levy estimates.
Notwithstanding any other provisions of the code to the contrary, the county board shall not be required to submit its budget for approval by the state Board of Education as provided by section twelve-a, article eight, chapter eleven of this code and sections six and seven of article nine-b, chapter eighteen of this code, until the tenth day next following the state board's transmittal of final state aid computations following the adoption of the state budget, but no later than May 30: Provided, That, in any year in which the state budget is not adopted on or before May 1, the state board may require the county board to adopt a preliminary budget and to submit it to the state board no later than May 30, and when final computations of state aid are transmitted to the county board, the county board shall make such adjustments as are necessary prior to final adoption of the budget.
The board of finance, before giving its final approval to a proposed budget, shall require that:
(1) Estimates of revenue and receipts are reasonable and accurate;
(2) Amounts are budgeted so as to cover actual requirements of school operation; and
(3) Amounts are budgeted so as to maintain the schools of the county for the employment term and the instructional term as defined in section fifteen, article five of this chapter.
If the board of finance finds that the proposed budget for a county will not maintain the proposed educational program as well as other financial obligations of their county board of education, it may require that the budget be revised, but in no case shall permit the reduction of the instructional term pursuant to the provisions contained in section fifteen, article five of this chapter nor the employment term below two hundred days. Any required revision in the budget for this purpose may be made in the following order:
(1) Postpone expenditures for permanent improvements and capital outlays except from the permanent improvement fund;
(2) Reduce the amount budgeted for maintenance exclusive of service personnel so as to guarantee the payment of salaries for the employment term; or
(3) Adjust amounts budgeted in any other way so as to assure the required employment term of two hundred days and the required instructional term of one hundred eighty days under the applicable provisions of law.
The board of finance shall formulate the requirements of a uniform system of management accounting for the use of county school districts. The requirements shall include at least:
(1) The accrual accounting of all revenues and other receipts from whatever source;
(2) The accounting of expenditures under the several items of appropriation in accordance with the expenditure schedule;
(3) Monthly and quarterly reports of rate of expenditure, encumbrances, and free balances under the several items of appropriation;
(4) Methods of accounting practice and procedures to be followed in the use of the uniform system.
The accounting requirements so formulated shall be certified by the secretary of the board to the Tax Commissioner. The Tax Commissioner shall then incorporate the requirements into a uniform system of school district accounting and as chief inspector and supervisor of public offices, shall prescribe the use of the uniform system by all county school districts by virtue of the authority vested in him by section two, article nine, chapter six of this code.
County boards of education shall:
(1) Authorize the expenditure of funds and incur obligations only in accordance with the budget and the expenditure schedule;
(2) Make transfers between items of appropriation only with the prior written approval of the board of finance.
Acts, 2013 Reg. Sess., Ch. 56.
If as a result of epidemics or other abnormal circumstances any county suffers an abnormal reduction in attendance during any year, the board of school finance, in order to assure an equitable allocation of aid, may in its computation for such aid, make adjustments in the average daily attendance figure.
The maximum limit to such adjustment shall be the average daily attendance used as a base in computing the allocation of aid for the previous year multiplied by the ratio that the net enrollment for the adjusted years bears to the net enrollment for the base year.
The state board of school finance may formulate the requirements of adequate practices of fiscal administration to be followed by county school districts. Such requirements may include:
(1) Procedures for the receipts, control and disbursement of county school funds;
(2) Forms for requisitions, purchase orders, disbursements and other necessary documents;
(3) Regulations for the performance of the powers and duties pertaining to school finance;
(4) Regulations for the exercise of the comptroller function;
(5) Other instructions and regulations for the proper procedures and practices of fiscal administration in the county schools.
The requirements formulated by the board of finance shall be certified by the secretary of the board to the Tax Commissioner. The Tax Commissioner as chief inspector and supervisor of public offices shall incorporate the requirements so certified in his instructions with respect to fiscal administration and shall prescribe their use by all county school districts by virtue of the authority vested in him by section two, article nine, chapter six of this code.
The board of finance may, through its duly authorized representatives, make inspections and examinations of the fiscal administration of a county school district. The inspection and examination may extend to any matter or practice subject to regulation by the state board. Regular and special examinations may be made by a certified public accountant approved pursuant to section seven, article nine, chapter six of this code selected by the county board in accordance with nonemergency regulations submitted by the chief inspector, or by the chief inspector himself or herself. All examinations shall be made as provided in section seven, article nine, chapter six of this code. The board may make selective audits to determine the accuracy of statements and reports made by a county board or superintendent.
The report of the examination shall be certified to the county board, which should include the identification of procedures and practices found to not be in accordance with the requirements of the state board. The county board shall comply with the instructions forthwith.
The state board, through its duly authorized representatives, shall have full access to all books, records, papers and documents of the county board.
A county board of education may establish a special fund for county school purposes to be known as the "permanent improvement fund." The fund shall consist of:
(1) The proceeds of the levy allocated to that purpose by section six-c, article eight, chapter eleven of the code, as amended;
(2) Unexpended balances of other funds transferred to the fund, with the approval of the board of finance, at the end of the fiscal year;
(3) Any other moneys authorized by law to be used for the purposes of the fund.
The proceeds of the fund shall be used only for the support of building and permanent improvement projects. The fund may be accumulated from year to year but moneys shall not be paid into the fund so as to increase the assets of the fund to a total amount in excess of twenty-five percent of the amount of the foundation school program for that county for the same school year.
The Board of Education of any county is hereby authorized and empowered to create a special building fund and to transfer to such special fund any part or all of the unexpended balance accumulated in the "permanent improvement fund," heretofore established by section fourteen, article nine-b, chapter eighteen of the Code of West Virginia, 1931, as amended. Such boards of education are further authorized and empowered to use and expend the special funds, created under the authority of this section, to construct, erect, furnish and equip a building for educational purposes suitable for instruction in transfer, terminal, technical, and adult education courses.
A county board shall treat the permanent improvement fund as a separate fund in the annual budget for county school purposes. Expenditures shall be made from the fund only in accordance with an appropriation made pursuant to the annual budget, or made otherwise in accordance with this article. If the board of finance finds, in its examination of the budget of a county school district, that a county board has accumulated, or with proposed additions to the fund in the fiscal year will accumulate, the fund of the county to an amount in excess of twenty-five percent of the amount of the foundation school program of the county for the same fiscal year, the board of finance shall order that no moneys in excess of the limitation be appropriated for or paid into the fund. If the board of finance finds that the assets of the fund of a county exceed twenty-five percent of the amount of the foundation school program for the county for the same year, the board may require that building and permanent improvement projects included in the annual budget, be paid for out of the fund.
The board of finance shall administer this section so as to keep the accumulated assets of the fund, as near as may be, within the limitation of twenty-five percent of the amount of the foundation school program.
Acts, 2013 Reg. Sess., Ch. 56.
A county board of education and a county superintendent shall comply with the instructions of the state board of school finance and shall perform the duties required of them in accordance with the provisions of this article.
The board of finance shall enforce the requirements of and its regulations issued under this article. The board may issue orders to county boards of education requiring specific compliance with its instructions. If a county board fails or refuses to comply, the board may proceed to enforce its order by any appropriate remedy in any court of competent jurisdiction.
The board of finance may withhold payment of state aid from a county board that fails or refuses to comply with the provisions of this article or the requirements of the state board made in accordance therewith.
The state board of school finance may require, and prescribe the form of, fiscal reports to be made to the board at such times and to contain such information as the board may determine.
The board of school finance shall make an annual report to the Governor and to the Legislature pertaining to the work of the board and the finances of school districts. The board shall make such special reports as the Governor or the Legislature may request.
(a) Effective July 1, 2020, the state superintendent shall provide the State Auditor with the required data for use by the searchable budget data website: Provided, That the state superintendent shall not be required to violate the Family Educational Rights and Privacy Act in providing such data. The data shall also contain the required information for the previous three fiscal years provided such data is available.
(1) The name and principal location or residence of the entity or recipients of funds: Provided, That employee addresses shall not be made public or otherwise displayed on the budget data website;
(2) The name of the person or entity requesting the funds;
(3) The amount of funds expended;
(4) The funding or expending agency;
(5) The funding source of the revenue expended;
(6) The budget program or activity of the expenditure;
(7) A descriptive purpose for the funding action or expenditure;
(8) Any state audit or report relating to the entity or recipient of funds or the budget program or agency; and
(9) Any other relevant information specified by the Legislature.
(c) The information shall be updated for each fiscal year no later than 30 days following the end of the fiscal year. In addition, the State Auditor shall update the searchable budget database website as new data becomes available. The State Auditor shall provide guidance to the state superintendent to ensure compliance with this section.
(d) Nothing in this subsection is intended to cause a substantial modification to the West Virginia Education Information System.