E.__A written determination as to whether the school administrative unit has complied with applicable provisions of the School Finance Act of 1985 and the School Finance Act of 1995.

Sec. 5. 20-A MRSA §6051, sub-§6 is enacted to read:

6.__Report to commissioner.__Within 9 months after the end of the audit period, the school board shall provide the commissioner with:

A.__A copy of the audit report;

B.__Accountability of all revenues and expenditures;

C.__Written assurance that the audit has been conducted in accordance with applicable state and federal laws relating to financial and compliance audits; and

D.__Any other information that the commissioner may require.

Sec. 6. 20-A MRSA §15603, sub-§26, ¶D, as enacted by PL 1993, c. 410, Pt. F, §15, is amended to read:

D. Nonsubsidizable costs are not considered in the calculation of the total allocation. "Nonsubsidizable costs" includes the following:

(1) Community service costs;

(2) Major capital costs;

(3) Expenditures from all federal revenue sources, except for amounts received under the United States Code, Public Law 81-874;

(4) One half of salary and benefit costs for superintendents, assistant superintendents and associate superintendents;

(5) Transportation costs not associated with transporting students from home to school and back home each day; and

(6) Costs payable to the Maine State Retirement System under Title 5, section 17154, subsections 10 and 11.

SUMMARY

This bill deletes language contained in the School Finance Act of 1985 relating to superintendents' salaries and subsidy. After the enactment of the School Finance Act of 1995, this language has no longer had any impact on subsidy calculations. This change is a technical change in the School Finance Act of 1985 to reflect the change in subsidy calculations provided for in the School Finance Act of 1995.

This bill also clarifies the audit requirements and modifies the reporting requirements in the Maine Revised Statutes, Title 20-A, section 6051. Changes include: (1) correction of section 1, paragraph E to include applicable provisions of the School Finance Act of 1995; (2) clarification of the requirement that the annual financial report be reconciled with the annual audit report; and (3) modification of the reporting requirements. These clarifications will improve the quality of audits of school administrative units by ensuring appropriate use of funds and providing more flexible reporting requirements that will meet the needs of both the Department of Education and school administrative units.

This bill also improves the ability of the Department of Education to forecast the cost of school bus fleet replacement, improve the overall condition and safety of the publicly owned school bus fleet and reduce annual fleet maintenance costs. Local school administrative units would benefit by receiving subsidy for school bus lease-purchases under the same rules that govern cash and note purchases.