SECTIONS 42122-42129 - California Statutes

EDUCATION CODE

SECTION 42122-42129

42122. Effective July 1, 1988, each budget shall show a complete
plan and itemized statement of all proposed expenditures of the
school district and of all estimated revenues for the ensuing fiscal
year, together with a comparison of revenues and expenditures for the
existing fiscal year. The budget shall also include the
appropriations limit and the total annual appropriations subject to
limitation as determined pursuant to Division 9 (commencing with
Section 7900) of Title 1 of the Government Code. The county
superintendent of schools shall from his or her own records supply to
the school district any information that the school district may
need to make the comparisons required by this section.

42123. Each budget shall be itemized to set forth the necessary
revenues and expenditures in each fund to operate the public schools
of the district as authorized by law and on forms prescribed by the
Superintendent of Public Instruction.

42124. The budget may also contain an amount to be known as the
general reserve in such sum as the governing board may deem
sufficient, for the next succeeding fiscal year, to meet the cash
requirements to which the district's credit may be legally extended
for that portion of said next succeeding fiscal year until adequate
proceeds of the taxes levied for, or apportionment of state funds
made to, the district during such succeeding fiscal year are
available to the district.

42125. The budget may contain amounts to be known as the designated
fund balance, which may be designated for any specific purpose as
determined by the governing board of the school district, and the
unappropriated fund balance. These funds shall be available for
appropriation by a majority vote of the members of the governing
board, to cover expenditures that have not been provided for or that
may have been insufficiently provided for, or for unforeseen
requirements as they may arise.

42126. Effective July 1, 1988, each budget shall be made on the
number of forms and upon the blanks or in the format prescribed by
the Superintendent of Public Instruction. It shall be the duty of the
Superintendent of Public Instruction to prepare standard forms or a
format necessary to show the budgeting items and comparisons required
by this article. The required forms or format shall be furnished to
the school districts by the county superintendent of schools.

42127. (a) On or before July 1 of each year, the governing board of
each school district shall accomplish the following:
(1) Hold a public hearing on the budget to be adopted for the
subsequent fiscal year. The budget to be adopted shall be prepared in
accordance with Section 42126. The agenda for that hearing shall be
posted at least 72 hours prior to the public hearing and shall
include the location where the budget will be available for public
inspection.
(2) Adopt a budget. Not later than five days after that adoption
or by July 1, whichever occurs first, the governing board shall file
that budget with the county superintendent of schools. That budget
and supporting data shall be maintained and made available for public
review. If the governing board of the district does not want all or
a portion of the property tax requirement levied for the purpose of
making payments for the interest and redemption charges on
indebtedness as described in paragraph (1) or (2) of subdivision (b)
of Section 1 of Article XIII A of the California Constitution, the
budget shall include a statement of the amount or portion for which a
levy shall not be made.
(b) The county superintendent of schools may accept changes in any
statement included in the budget, pursuant to subdivision (a), of
the amount or portion for which a property tax levy shall not be
made. The county superintendent or the county auditor shall compute
the actual amounts to be levied on the property tax rolls of the
district for purposes that exceed apportionments to the district
pursuant to Chapter 6 (commencing with Section 95) of Part 0.5 of
Division 1 of the Revenue and Taxation Code. Each school district
shall provide all data needed by the county superintendent or the
county auditor to compute the amounts. On or before August 15, the
county superintendent shall transmit the amounts computed to the
county auditor who shall compute the tax rates necessary to produce
the amounts. On or before September 1, the county auditor shall
submit the rate computed to the board of supervisors for adoption.
(c) The county superintendent of schools shall do all of the
following:
(1) Examine the adopted budget to determine whether it complies
with the standards and criteria adopted by the state board pursuant
to Section 33127 for application to final local educational agency
budgets. The county superintendent shall identify, if necessary, any
technical corrections that are required to be made to bring the
budget into compliance with those standards and criteria.
(2) Determine whether the adopted budget will allow the district
to meet its financial obligations during the fiscal year and is
consistent with a financial plan that will enable the district to
satisfy its multiyear financial commitments. In addition to his or
her own analysis of the budget of each school district, the county
superintendent of schools shall review and consider studies, reports,
evaluations, or audits of the school district that were commissioned
by the district, the county superintendent, the Superintendent, and
state control agencies and that contain evidence that the school
district is showing fiscal distress under the standards and criteria
adopted in Section 33127 or that contain a finding by an external
reviewer that more than three of the 15 most common predictors of a
school district needing intervention, as determined by the County
Office Fiscal Crisis and Management Assistance Team, are present. The
county superintendent of schools shall either conditionally approve
or disapprove a budget that does not provide adequate assurance that
the district will meet its current and future obligations and resolve
any problems identified in studies, reports, evaluations, or audits
described in this paragraph.
(d) On or before August 15, the county superintendent of schools
shall approve, conditionally approve, or disapprove the adopted
budget for each school district. If a school district does not submit
a budget to the county superintendent of schools, the county
superintendent of schools shall, at district expense, develop a
budget for that school district by September 15 and transmit that
budget to the governing board of the school district. The budget
prepared by the county superintendent of schools shall be deemed
adopted, unless the county superintendent of schools approves any
modifications made by the governing board of the school district. The
approved budget shall be used as a guide for the district's
priorities. The Superintendent shall review and certify the budget
approved by the county. If, pursuant to the review conducted pursuant
to subdivision (c), the county superintendent of schools determines
that the adopted budget for a school district does not satisfy
paragraph (1) or (2) of that subdivision, he or she shall
conditionally approve or disapprove the budget and, not later than
August 15, transmit to the governing board of the school district, in
writing, his or her recommendations regarding revision of the budget
and the reasons for those recommendations, including, but not
limited to, the amounts of any budget adjustments needed before he or
she can conditionally approve that budget. The county superintendent
of schools may assign a fiscal adviser to assist the district to
develop a budget in compliance with those revisions. In addition, the
county superintendent of schools may appoint a committee to examine
and comment on the superintendent's review and recommendations,
subject to the requirement that the committee report its findings to
the superintendent no later than August 20.
(e) On or before September 8, the governing board of the school
district shall revise the adopted budget to reflect changes in
projected income or expenditures subsequent to July 1, and to include
any response to the recommendations of the county superintendent of
schools, shall adopt the revised budget, and shall file the revised
budget with the county superintendent of schools. Prior to revising
the budget, the governing board shall hold a public hearing regarding
the proposed revisions, to be conducted in accordance with Section
42103. In addition, if the adopted budget is disapproved pursuant to
subdivision (d), the governing board and the county superintendent of
schools shall review the disapproval and the recommendations of the
county superintendent of schools regarding revision of the budget at
the public hearing. The revised budget and supporting data shall be
maintained and made available for public review.
(f) On or before September 22, the county superintendent of
schools shall provide a list to the Superintendent identifying all
school districts for which budgets may be disapproved.
(g) The county superintendent of schools shall examine the revised
budget to determine whether it (1) complies with the standards and
criteria adopted by the state board pursuant to Section 33127 for
application to final local educational agency budgets, (2) allows the
district to meet its financial obligations during the fiscal year,
(3) satisfies all conditions established by the county superintendent
of schools in the case of a conditionally approved budget, and (4)
is consistent with a financial plan that will enable the district to
satisfy its multiyear financial commitments, and, not later than
October 8, shall approve or disapprove the revised budget. If the
county superintendent of schools disapproves the budget, he or she
shall call for the formation of a budget review committee pursuant to
Section 42127.1, unless the governing board of the school district
and the county superintendent of schools agree to waive the
requirement that a budget review committee be formed and the
department approves the waiver after determining that a budget review
committee is not necessary. Upon the grant of a waiver, the county
superintendent immediately has the authority and responsibility
provided in Section 42127.3. Upon approving a waiver of the budget
review committee, the department shall ensure that a balanced budget
is adopted for the school district by November 30. If no budget is
adopted by November 30, the Superintendent may adopt a budget for the
school district. The Superintendent shall report to the Legislature
and the Director of Finance by December 10 if any district, including
a district that has received a waiver of the budget review committee
process, does not have an adopted budget by November 30. This report
shall include the reasons why a budget has not been adopted by the
deadline, the steps being taken to finalize budget adoption, the date
the adopted budget is anticipated, and whether the Superintendent
has or will exercise his or her authority to adopt a budget for the
school district.
(h) Not later than October 8, the county superintendent of schools
shall submit a report to the Superintendent identifying all school
districts for which budgets have been disapproved or budget review
committees waived. The report shall include a copy of the written
response transmitted to each of those districts pursuant to
subdivision (d).
(i) Notwithstanding any other provision of this section, the
budget review for a school district shall be governed by paragraphs
(1), (2), and (3) of this subdivision, rather than by subdivisions
(e) and (g), if the governing board of the school district so elects
and notifies the county superintendent in writing of that decision,
not later than October 31 of the immediately preceding calendar year.
On or before July 1, the governing board of a school district for
which the budget review is governed by this subdivision, rather than
by subdivisions (e) and (g), shall conduct a public hearing regarding
its proposed budget in accordance with Section 42103.
(1) If the adopted budget of a school district is disapproved
pursuant to subdivision (d), on or before September 8, the governing
board of the school district, in conjunction with the county
superintendent of schools, shall review the superintendent's
recommendations at a regular meeting of the governing board and
respond to those recommendations. The response shall include any
revisions to the adopted budget and other proposed actions to be
taken, if any, as a result of those recommendations.
(2) On or before September 22, the county superintendent of
schools will provide a list to the Superintendent identifying all
school districts for which a budget may be tentatively disapproved.
(3) Not later than October 8, after receiving the response
required under paragraph (1), the county superintendent of schools
shall review that response and either approve or disapprove the
budget. If the county superintendent of schools disapproves the
budget, he or she shall call for the formation of a budget review
committee pursuant to Section 42127.1, unless the governing board of
the school district and the county superintendent of schools agree to
waive the requirement that a budget review committee be formed and
the department approves the waiver after determining that a budget
review committee is not necessary. Upon the grant of a waiver, the
county superintendent has the authority and responsibility provided
to a budget review committee in Section 42127.3. Upon approving a
waiver of the budget review committee, the department shall ensure
that a balanced budget is adopted for the school district by November
30. The Superintendent shall report to the Legislature and the
Director of Finance by December 10 if any district, including a
district that has received a waiver of the budget review committee
process, does not have an adopted budget by November 30. This report
shall include the reasons why a budget has not been adopted by the
deadline, the steps being taken to finalize budget adoption, and the
date the adopted budget is anticipated.
(4) Not later than 45 days after the Governor signs the annual
Budget Act, the school district shall make available for public
review any revisions in revenues and expenditures that it has made to
its budget to reflect the funding made available by that Budget Act.
(j) Any school district for which the county board of education
serves as the governing board is not subject to subdivisions (c) to
(h), inclusive, but is governed instead by the budget procedures set
forth in Section 1622.

42127.1. (a) Pursuant to subdivision (g) or (i) of Section 42127,
upon the disapproval of a school district budget by the county
superintendent, the county superintendent shall call for the
formation of a budget review committee unless the governing board of
the school district and the county superintendent of schools agree to
waive the requirement that a budget review committee be formed, and
the department approves the waiver after determining that a budget
review committee is not necessary. Upon the grant of a waiver, the
county superintendent has the authority and responsibility provided
to a budget review committee in Section 42127.3. Upon approving a
waiver of the budget review committee, the department shall ensure
that a balanced budget is adopted for the school district by November
30. The Superintendent shall report to the Legislature and the
Director of Finance by December 10 if any district, including a
district that has received a waiver of the budget review committee
process, does not have an adopted budget by November 30. This report
shall include the reasons why a budget has not been adopted by the
deadline, the steps being taken to finalize budget adoption, and the
date the adopted budget is anticipated.
(b) The budget review committee shall be composed of three persons
selected by the governing board of the school district from a list
of candidates provided to the governing board by the Superintendent
of Public Instruction. The list of candidates shall be composed of
persons who have expertise in the management of a school district or
county office of education. Their experience shall include, but not
be limited to, the fiscal and educational aspects of local
educational agency management.
(c) Notwithstanding subdivision (b) or any other provision of this
article, with the approval of the Superintendent and the governing
board of the school district, the county superintendent of schools
may select and convene a regional review committee, consisting of
persons having the expertise described in that subdivision. The
regional review committee shall operate in place of the budget review
committee, in accordance with the provisions of this article
governing budget review committees.
(d) Members of the committee shall be reimbursed by the department
for their services and associated expenses while on official
business at rates established by the State Board of Education.

42127.2. (a) The governing board of a school district shall, no
later than five working days after the receipt of a candidate list
from the Superintendent of Public Instruction pursuant to Section
42127.1, select a budget review committee, and the Superintendent of
Public Instruction shall convene the committee no later than five
working days following that selection. If the governing board fails
to select a committee within the period of time permitted by this
subdivision, the Superintendent of Public Instruction instead shall
select and convene the budget review committee no later than 10
working days after the district's receipt of the candidate list.
(b) No later than October 31, the budget review committee shall
review the proposed budget of the district and the underlying fiscal
policies of the district and transmit to the Superintendent of Public
Instruction, the county superintendent of schools, and the governing
board of the school district either of the following:
(1) The recommendation that the school district budget be
approved.
(2) A report disapproving the school district budget and setting
forth recommendations for revisions to the school district budget
that would enable the district to meet its financial obligations both
in the current fiscal year and with regard to the district's
multiyear financial commitments.
(c) The Superintendent of Public Instruction may extend the
deadline set forth in subdivision (b) for a period of not more than
15 working days.
(d) The Superintendent of Public Instruction shall establish
criteria and procedures governing the performance by budget review
committees of their duties under this section.
(e) Upon request of the county superintendent of schools, the
Controller's office may conduct an audit or review of the fiscal
condition of the school district in order to assist a budget review
committee or regional review committee for the purposes of this
section.

42127.3. (a) If the budget review committee established pursuant to
Sections 42127.1 and 42127.2 recommends approval of the school
district budget, the county superintendent of schools shall accept
the recommendation of the budget review committee and approve the
budget.
(b) If the budget review committee established pursuant to
Sections 42127.1 and 42127.2 disapproves the school district budget,
the school district governing board, not later than five working days
after receipt of the report described in paragraph (2) of
subdivision (b) of Section 42127.2, may submit a response to the
Superintendent, including any revisions to the adopted final budget
and any other proposed actions to be taken as a result of the
recommendations of the budget review committee. Based upon the
recommendations of the budget review committee and any response to
those recommendations provided by the governing board of the school
district, the Superintendent shall either approve or disapprove the
budget. If the Superintendent disapproves the budget, he or she shall
notify the governing board of the school district in writing of the
reasons for that disapproval and, until the county superintendent
certifies the district's first interim report pursuant to Section
42131, the county superintendent of schools shall do the following as
necessary:
(1) Not later than November 30, develop and adopt, in consultation
with the Superintendent and the governing board of the school
district, a fiscal plan and budget that will govern the district and
will allow the district to meet its financial obligations, both in
the current fiscal year and with regard to the district's multiyear
financial commitments. The Superintendent may extend the date by
which the county superintendent of schools is required to develop and
adopt a fiscal plan and budget. The governing board of the school
district shall govern the operation of the district for the current
fiscal year in accordance with that adopted budget.
(2) Cancel purchase orders, prohibit the issuance of nonsalary
warrants, and otherwise stay or rescind any action that is
inconsistent with the budget adopted pursuant to paragraph (1). The
county superintendent of schools shall inform the governing board of
the school district in writing of his or her justification for any
exercise of authority under this paragraph.
(3) Monitor and review the operation of the school district.
(4) Determine the need for additional staff and may employ,
subject to approval by the Superintendent, short-term analytical
assistance or expertise to validate financial information if the
district staff does not have the expertise or staff.
(5) Require the school district to encumber all contracts and
other obligations, to prepare appropriate cashflow analyses and
monthly or quarterly budget revisions, and to appropriately record
all receivables and payables.
(6) Determine whether there are any financial problem areas and
may employ, subject to approval by the Superintendent, a certified
public accounting firm to investigate financial problem areas.
(7) Withhold compensation of the members of the governing board
and the district superintendent for failure to provide requested
financial information. A forfeiture may be appealed to the
Superintendent pursuant to subdivision (b) of Section 42127.6.
(c) If, during the selection of the budget review committee or
during the committee's review of the budget, an agreement is reached
between the governing board of the school district and the county
superintendent of schools, and the school district revises its budget
to comply with this agreement, the county superintendent of schools
shall approve the district budget and the budget review committee
selection, or its review of the budget, shall be canceled.
(d) The school district shall pay 75 percent and the county office
of education shall pay 25 percent of the actual administrative
expenses incurred pursuant to subdivision (b), or costs associated
with improving the district's financial management practices. The
Superintendent shall develop, and distribute to affected school
districts and county offices of education, advisory guidelines
regarding the appropriate amount of any fees charged pursuant to this
subdivision.
(e) This section shall not be construed to authorize the county
superintendent of schools to abrogate any provision of a collective
bargaining agreement that was entered into by a school district prior
to the date upon which the county superintendent of schools
disapproved the budget of the school district pursuant to subdivision
(b).

42127.4. Until a school district receives approval of its budget
under this article, the school district shall continue to operate on
the basis of whichever of the following budgets contains a lower
total spending authority:
(a) The last budget adopted or revised by the governing board of
the school district for the prior fiscal year.
(b) The unapproved budget for the current fiscal year, as adopted
and revised by the governing board of the school district.

42127.5. The governing board of any school district that reported a
negative unrestricted fund balance or a negative cash balance in the
annual report required by Section 42127 or in the audited annual
financial statements required by Section 41020 shall include with the
budget submitted in accordance with Section 42127 and the
certifications required by Section 35015 a statement that identifies
the reasons for the negative unrestricted fund balance or negative
cash balance and the steps that have been taken to ensure that the
negative balance will not occur at the end of the current fiscal
year.

42127.6. (a) (1) A school district shall provide the county
superintendent of schools with a copy of a study, report, evaluation,
or audit that was commissioned by the district, the county
superintendent, the Superintendent of Public Instruction, and state
control agencies and that contains evidence that the school district
is showing fiscal distress under the standards and criteria adopted
in Section 33127, or a report on the school district by the County
Office Fiscal Crisis and Management Assistance Team or any regional
team created pursuant to subdivision (i) of Section 42127.8. The
county superintendent shall review and consider studies, reports,
evaluations, or audits of the school district that contain evidence
that the school district is demonstrating fiscal distress under the
standards and criteria adopted in Section 33127 or that contain a
finding by an external reviewer that more than three of the 15 most
common predictors of a school district needing intervention, as
determined by the County Office Fiscal Crisis and Management
Assistance Team, are present. If these findings are made, the county
superintendent shall investigate the financial condition of the
school district and determine if the school district may be unable to
meet its financial obligations for the current or two subsequent
fiscal years, or should receive a qualified or negative interim
financial certification pursuant to Section 42131. If at any time
during the fiscal year the county superintendent of schools
determines that a school district may be unable to meet its financial
obligations for the current or two subsequent fiscal years or if a
school district has a qualified or negative certification pursuant to
Section 42131, he or she shall notify the governing board of the
school district and the Superintendent of Public Instruction in
writing of that determination and the basis for the determination.
The notification shall include the assumptions used in making the
determination and shall be available to the public. The county
superintendent of schools shall report to the Superintendent of
Public Instruction on the financial condition of the school district
and his or her proposed remedial actions and shall do at least one of
the following and all actions that are necessary to ensure that the
district meets its financial obligations:
(A) Assign a fiscal expert, paid for by the county superintendent,
to advise the district on its financial problems.
(B) Conduct a study of the financial and budgetary conditions of
the district that includes, but is not limited to, a review of
internal controls. If, in the course of this review, the county
superintendent determines that his or her office requires analytical
assistance or expertise that is not available through the district,
he or she may employ, on a short-term basis, with the approval of the
Superintendent of Public Instruction, staff, including certified
public accountants, to provide the assistance and expertise. The
school district shall pay 75 percent and the county office of
education shall pay 25 percent of these staff costs.
(C) Direct the school district to submit a financial projection of
all fund and cash balances of the district as of June 30 of the
current year and subsequent fiscal years as he or she requires.
(D) Require the district to encumber all contracts and other
obligations, to prepare appropriate cashflow analyses and monthly or
quarterly budget revisions, and to appropriately record all
receivables and payables.
(E) Direct the district to submit a proposal for addressing the
fiscal conditions that resulted in the determination that the
district may not be able to meet its financial obligations.
(F) Withhold compensation of the members of the governing board
and the district superintendent for failure to provide requested
financial information. This action may be appealed to the
Superintendent of Public Instruction pursuant to subdivision (b).
(G) Assign the Fiscal Crisis and Management Assistance Team to
review teacher hiring practices, teacher retention rate, percentage
of provision of highly qualified teachers, and the extent of teacher
misassignment in the school district and provide the district with
recommendations to streamline and improve the teacher hiring process,
teacher retention rate, extent of teacher misassignment, and
provision of highly qualified teachers. If a review team is assigned
to a school district, the district shall follow the recommendations
of the team, unless the district shows good cause for failure to do
so. The Fiscal Crisis and Management Assistance Team may not
recommend an action that would abrogate a contract that governs
employment.
(2) Any contract entered into by a county superintendent of
schools for the purposes of this subdivision is subject to the
approval of the Superintendent of Public Instruction.
(3) An employee of a school district who provides information
regarding improper governmental activity, as defined in Section
44112, is entitled to the protection provided pursuant to Article 5
(commencing with Section 44110) of Chapter 1 of Part 25.
(b) Within five days of the county superintendent making the
determination specified in subdivision (a), a school district may
appeal the basis of the determination and any of the proposed actions
that the county superintendent has indicated that he or she will
take to further examine the financial condition of the district. The
Superintendent of Public Instruction shall sustain or deny any or all
parts of the appeal within 10 days.
(c) If, after taking the actions identified in subdivision (a),
the county superintendent determines that a district will be unable
to meet its financial obligations for the current or subsequent
fiscal year, he or she shall notify the school district governing
board and the Superintendent of Public Instruction in writing of that
determination and the basis for that determination. The notification
shall include the assumptions used in making the determination and
shall be provided to the superintendent of the school district and
parent and teacher organization of the district.
(d) Within five days of the county superintendent making the
determination specified in subdivision (c), a school district may
appeal that determination to the Superintendent of Public
Instruction. The Superintendent shall sustain or deny the appeal
within 10 days. If the governing board of the school district appeals
the determination, the county superintendent of schools may stay any
action of the governing board that he or she determines is
inconsistent with the ability of the district to meet its financial
obligations for the current or subsequent fiscal year until
resolution of the appeal by the Superintendent of Public Instruction.
(e) If the appeal described in subdivision (d) is denied or not
filed, or if the district has a negative certification pursuant to
Section 42131, the county superintendent, in consultation with the
Superintendent of Public Instruction, shall take at least one of the
actions described in paragraphs (1) to (5), inclusive, and all
actions that are necessary to ensure that the district meets its
financial obligations and shall make a report to the Superintendent
about the financial condition of the district and remedial actions
proposed by the county superintendent.
(1) Develop and impose, in consultation with the Superintendent of
Public Instruction and the school district governing board, a budget
revision that will enable the district to meet its financial
obligations in the current fiscal year.
(2) Stay or rescind any action that is determined to be
inconsistent with the ability of the school district to meet its
obligations for the current or subsequent fiscal year. This includes
any actions up to the point that the subsequent year's budget is
approved by the county superintendent of schools. The county
superintendent of schools shall inform the school district governing
board in writing of his or her justification for any exercise of
authority under this paragraph.
(3) Assist in developing, in consultation with the governing board
of the school district, a financial plan that will enable the
district to meet its future obligations.
(4) Assist in developing, in consultation with the governing board
of the school district, a budget for the subsequent fiscal year. If
necessary, the county superintendent of schools shall continue to
work with the governing board of the school district until the budget
for the subsequent year is adopted.
(5) As necessary, appoint a fiscal adviser to perform any or all
of the duties prescribed by this section on his or her behalf.
(f) Any action taken by the county superintendent of schools
pursuant to paragraph (1) or (2) of subdivision (e) shall be
accompanied by a notification that shall include the actions to be
taken, the reasons for the actions, and the assumptions used to
support the necessity for these actions.
(g) This section does not authorize the county superintendent to
abrogate any provision of a collective bargaining agreement that was
entered into by a school district prior to the date upon which the
county superintendent of schools assumed authority pursuant to
subdivision (e).
(h) The school district shall pay 75 percent and the county office
of education shall pay 25 percent of the administrative expenses
incurred pursuant to subdivision (e) or costs associated with
improving the district's financial management practices. The
Superintendent of Public Instruction shall develop and distribute to
affected school districts and county offices of education advisory
guidelines regarding the appropriate amount of administrative
expenses charged pursuant to this subdivision.
(i) Notwithstanding Section 42647 or 42650 or any other law, a
county treasurer shall not honor any warrant if, pursuant to Sections
42127 to 42127.5, inclusive, or pursuant to this section, the county
superintendent or the Superintendent of Public Instruction, as
appropriate, has disapproved that warrant or the order on school
district funds for which a warrant was prepared.
(j) Effective upon the certification of the election results for a
newly organized school district pursuant to Section 35763, the
county superintendent of schools may exercise any of the powers and
duties of this section regarding the reorganized school district and
the other affected school districts until the reorganized school
district becomes effective for all purposes in accordance with
Article 4 (commencing with Section 35530) of Chapter 3 of Part 21.
(k) The Superintendent of Public Instruction shall monitor the
efforts of a county office of education in exercising its authority
under this section and may exercise any of that authority if he or
she finds that the actions of the county superintendent of schools
are not effective in resolving the financial problems of the school
district. Upon a decision to exercise the powers of the county
superintendent of schools, the county superintendent of schools is
relieved of those powers assumed by the Superintendent. In addition
to the actions taken by the county superintendent, the Superintendent
of Public Instruction shall take further actions to ensure the
long-term fiscal stability of the district. The county office of
education shall reimburse the Superintendent of Public Instruction
for all of his or her costs in exercising his or her authority under
this subdivision. The Superintendent of Public Instruction shall
promptly notify the county superintendent of schools, the county
board of education, the superintendent of the school district, the
governing board of the school district, the appropriate policy and
fiscal committees of each house of the Legislature, and the
Department of Finance of his or her decision to exercise the
authority of the county superintendent of schools.

42127.8. (a) The governing board provided for in subdivision (b)
shall establish a unit to be known as the County Office Fiscal Crisis
and Management Assistance Team. The team shall consist of persons
having extensive experience in school district budgeting, accounting,
data processing, telecommunications, risk management, food services,
pupil transportation, purchasing and warehousing, facilities
maintenance and operation, and personnel administration,
organization, and staffing. The Superintendent may appoint one
employee of the department to serve on the unit. The unit shall be
operated under the immediate direction of an appropriate county
office of education selected jointly, in response to an application
process, by the Superintendent and the Secretary for Education.
(b) The unit established under subdivision (a) shall be selected
and governed by a 25-member governing board consisting of one
representative chosen by the California County Superintendents
Educational Services Association from each of the 11 county service
regions designated by the association, 11 superintendents of school
districts chosen by the Association of California School
Administrators from each of the 11 county service regions, one
representative from the State Department of Education chosen by the
Superintendent of Public Instruction, the Chancellor of the
California Community Colleges or his or her designee, and one member
of a community college district governing board chosen by the
chancellor. The governing board of the County Office Fiscal Crisis
and Management Assistance Team shall select a county superintendent
of schools to chair the unit.
(c) (1) The Superintendent may request the unit to provide the
assistance described in subdivision (b) of Section 1624, Section
1630, Section 33132, subdivision (b) of Section 42127.3, subdivision
(c) of Section 42127.6, Section 42127.9, and subdivision (a) of
Section 42238.2, and to review the fiscal and administrative
condition of any county office of education, school district, or
charter school.
(2) A county superintendent of schools may request the unit to
review the fiscal or administrative condition of a school district or
charter school under his or her jurisdiction.
(3) The Board of Governors of the California Community Colleges
may request the unit to provide the assistance described in Section
84041.
(d) In addition to the functions described in subdivision (c), the
unit shall do all of the following:
(1) Provide fiscal management assistance, at the request of any
school district, charter school, or county office of education, or,
pursuant to subdivision (g) of Section 84041, at the request of any
community college district. Each school district, charter school, or
county office of education receiving that assistance shall be
required to pay the onsite personnel costs and travel costs incurred
by the unit for that purpose, pursuant to rates determined by the
governing board established under subdivision (b). The governing
board annually shall distribute rate information to each school
district, charter school, and county office of education.
(2) Facilitate training for members of the governing board of the
school district, district and county superintendents, chief financial
officers within the district, and schoolsite personnel whose primary
responsibility is to address fiscal issues. Training services shall
emphasize efforts to improve fiscal accountability and expand the
fiscal competency of local agencies. The unit shall use state
professional associations, private organizations, and public agencies
to provide guidance, support, and the delivery of any training
services.
(3) Facilitate fiscal management training through the 11 county
service regions to county office of education staff to ensure that
they develop the technical skills necessary to perform their
fiduciary duties. The governing board established pursuant to
subdivision (b) shall determine the extent of the training that is
necessary to comply with this paragraph.
(4) Produce a training calendar, to be disseminated semiannually
to each county service region, that publicizes all of the fiscal
training services that are being offered at the local, regional, and
state levels.
(e) The governing board shall reserve not less than 25 percent,
nor more than 50 percent, of its revenues each year for expenditure
for the costs of contracts and professional services as management
assistance to school districts or county superintendents of schools
in which the board determines that a fiscal emergency exists.
(f) The governing board established under subdivision (b) may levy
an annual assessment against each county office of education that
elects to participate under this section in an amount not to exceed
twenty cents ($0.20) per unit of total average daily attendance for
all school districts within the county. The revenues collected
pursuant to that assessment shall be applied to the expenses of the
unit.
(g) The governing board established under subdivision (b) may pay
to the department, from any available funds, a reasonable amount to
reimburse the department for actual administrative expenses incurred
in the review of the budgets and fiscal conditions of school
districts, charter schools, and county superintendents of schools.
(h) When employed as a fiscal adviser by the department pursuant
to Section 1630, employees of the unit established pursuant to
subdivision (a) shall be considered employees of the department for
purposes of errors and omissions liability insurance.
(i) (1) The unit shall request and review applications to
establish regional teams of education finance experts throughout the
state.
(2) To the extent that funding is provided for purposes of this
subdivision in the annual Budget Act or through another
appropriation, regional teams selected by the Superintendent, in
consultation with the unit, shall provide training and technical
expertise to school districts, charter schools, and county offices of
education facing fiscal difficulties.
(3) The regional teams shall follow the standards and guidelines
of and remain under the general supervision of the governing board
established under subdivision (b).
(4) It is the intent of the Legislature that, to the extent
possible, the regional teams be distributed geographically throughout
the various regions of the state in order to provide timely,
cost-effective expertise to school districts, charter schools, county
offices of education, and community college districts throughout the
state.

42127.9. (a) No later than five days after a school district
receives notice of any change or changes adopted by the county
superintendent of schools in the district's budget pursuant to
subdivision (b) of Section 42127.3, subdivision (e) of Section
42127.6, or subdivision (b) of Section 42131, the governing board of
the district may submit an appeal to the Superintendent of Public
Instruction, based upon the contention that the change or changes
would do one or more of the following:
(1) Exceed the financial or program changes necessary to allow the
district to meet its financial obligations in the current fiscal
year and with regard to its multiyear financial commitments. It is
the intent of the Legislature that any change or changes adopted by
the county superintendent of schools in a school district's budget
minimize, to the extent possible, any impact upon the educational
program of the district.
(2) Require reductions that are unnecessary in view of other
reductions that are proposed by the governing board of the district
and that reasonably can be expected to be realized.
(3) Make one or more changes in the district's operations that are
inconsistent with any provision of state or federal law.
(b) No later than five days after receiving that appeal, the
Superintendent of Public Instruction shall deny or uphold the appeal.
If the appeal is denied, the district shall implement the change or
changes adopted by the county superintendent of schools. If the
appeal is upheld, the Superintendent of Public Instruction may revise
the change or changes adopted by the county superintendent of
schools or issue guidelines governing the manner in which the
governing board of the district or the county superintendent of
schools shall be required to change the district budget.

42128. If the governing board of any school district neglects or
refuses to make a school district budget as prescribed by this
article, or neglects to file interim reports pursuant to Section
42130, the county superintendent of schools shall not make any
apportionment of state or county school money for the particular
school district for the current school year, and the county
superintendent shall notify the appropriate county official that he
or she shall not approve any warrants issued by the school district.

42129. School districts and county offices of education shall
transmit to the department, on a timely basis, all budget reports,
prior year expenditure reports, qualified and negative financial
status reports, program cost accounting reports, certifications, and
audit reports as prescribed by subdivision (l) of Section 1240,
subdivision (g) of Section 35035, Sections 1621, 1623, 41020, 42127,
42131, and Chapter 7.2 (commencing with Section 56836) of Part 30,
and those reports used to calculate the first, second, and annual
principal apportionments and special purpose apportionments for
school districts and county offices of education. If the reports are
not submitted to the Superintendent of Public Instruction within 14
days after the submission date prescribed in the statute or specified
by the Superintendent of Public Instruction, the Superintendent of
Public Instruction may direct the county auditor to withhold payment
of any stipend, expenses, or salaries to the district superintendent,
county superintendent, or members of the governing boards, as
appropriate. The payments shall be withheld until the delinquent
reports have been submitted to the department. If the county
superintendent performs the functions of the county auditor, the
Superintendent of Public Instruction may direct the county
superintendent to withhold the payments specified in this section.