STATE AND FEDERAL REVENUE SOURCES: STATE

Appropriations

There shall be appropriated biennially from money in the state treasury not otherwise appropriated an amount sufficient to supplement local funds for the proper support, maintenance, operation, and improvement of those public junior colleges of Texas that meet the standards prescribed by Education Code Chapter 130. The sum shall be allocated in accordance with Education Code Chapter 130A. Education Code 130.003(a)

Certification of Compliance

To be eligible for and to receive money appropriated under Education Code 130.003(a) and 19 Administrative Code, Chapter 13,

Subchapter R, a public junior college must certify to the Coordinating Board that the college:

1. Offers a minimum of 24 semester hours of vocational and/or terminal courses;

2. Collects, from each full-time and part-time student enrolled, tuition and other fees in the amounts required by law or in the

amounts set by the governing board of the junior college district as authorized by Education Code Title 3;

3. Grants, when properly applied for, the scholarships and tuition exemptions provided for in the Education Code;

4. For a public junior college established on or after September 1, 1986, levies and collects ad valorem taxes as provided by

law for the operation and maintenance of the college; and

5. Has complied with all laws and Coordinating Board rules for the establishment and operation of a public junior college.

Education Code 130.003(b); 19 TAC 13.523(a)

A public junior college must submit an attestation via email1 certifying to compliance with Education Code 130.003(b) to the Coordinating Board by August 1 of each year. The certification must be signed by the public junior college's president, or chief executive officer, as applicable. The certification must certify the following:

1. That the public junior college is currently in compliance with each provision of Education Code 130.003; and

2. The public junior college has complied with all laws and Coordinating Board rules for the establishment and operation of a

public junior college.

If a public junior college has an unresolved or ongoing audit or compliance monitoring finding that the certifying official determines may preclude the public junior college’s certification under Section 130.003(b), the public junior college shall disclose the finding(s) and provide an explanation of the finding(s) and proposed resolution.

The commissioner shall determine whether the public junior college can demonstrate that it will be in compliance for the purpose of receiving a scheduled payment.

Any payment that the Coordinating Board makes to an institution pursuant to 19 Administrative Code, Chapter 13, Subchapter R, is subject to recovery or recoupment if the certifying official does not make the required certification for the fiscal year for which the certification was required.

19 TAC 13.523(b)-(c)

Data Reporting

A public junior college must submit data through required reporting mechanisms established by the Coordinating Board. The Coordinating Board may use information obtained through required reporting for:

1. Calculating funding disbursed under Chapter 13;

2. Providing timely data and analyses to inform management decisions by the governing body of each public junior college;

3. Administering or evaluating the effectiveness of the programs; or

4. Auditing the program.

A public junior college shall report financial and academic data in accordance with 19 Administrative Code 13.524. [See AFA and

CDA] Education Code 130A.006, .008; 19 TAC 13.524(a), .526(a)

Funding

Adjustments

Based on Data

Administrative Code Title 19, 13.525, applies only to fundable certified data that will be used to calculate a formula funding allocation in an upcoming fiscal year or that has been used to calculate a formula funding allocation within the previous seven fiscal years. It does not apply to data reported to the Coordinating Board that is not yet fundable certified data.

After the finalization of fundable certified data, the commissioner at his or her discretion or upon recommendation of the chief audit executive may direct Coordinating Board staff to review the accuracy of the data reported to the Coordinating Board by public junior colleges under Chapter 13, Subchapter R, using any of the following methods or combination thereof:

1. The chief audit executive or Coordinating Board staff may conduct periodic file reviews, desk-reviews, site visits, or audits of the accuracy of the data and information submitted for funding purposes, including regular reviews of submitted data

carried out through standard data management, supporting data, audits conducted under Chapter 13, Subchapter R, or

as a result of any other audit. Upon identifying a potential data reporting error, Coordinating Board staff shall notify the com-

missioner as soon as practicable.

2. Upon receiving a notification of a potential data reporting error from the chief audit executive, Coordinating Board staff, or the chief executive officer of a public junior college whose data may be affected, the commissioner may:

a. Direct staff to continue to gather additional information;

b. Determine that the discrepancy does not rise to the level of a data reporting error as defined in Chapter 13 due to

the materiality impact of the error; or

c. Determine that the discrepancy rises to the level of a data reporting error that requires a funding adjustment

due to the materiality impact of the error or the amount of overallocation or under-allocation.

The Coordinating Board may review and/or require correction of a data reporting error affecting data used to calculate a formula funding payment that occurred not more than seven years prior.

Upon the commissioner's determination that the discrepancy constitutes a data reporting error requiring a funding adjustment, staff will notify the public junior college within 30 business days.

The commissioner may use any method provided in 19 Administrative Code 13.528 or 13.529 to make the necessary funding adjustments to correct an over- or under-allocation.

Education Code 130A.007(a)-(b); 19 TAC 13.525

Funding

Calculations

The public junior college state finance program consists of:

1. A base tier of state and local funding determined in accordance with Education Code Chapter 130A, Subchapter B, and

19 Administrative Code 13.554 that ensures each public junior college has access to a defined level of base funding for

instruction and operations; and

2. A performance tier of state funding determined in accordance with Education Code Chapter 130A, Subchapter C, and 19

Administrative Code 13.555-13.559 that constitutes the majority of state funding and is distributed based on measurable outcomes aligned with:

a. Regional and state workforce needs; and

b. State goals aligned to the state's long-range master plan for higher education developed under Education Code 61.051.

Education Code 130A.004; 19 TAC 13.554-.559

High-Demand

Fields

Education Code 130A.101(c)(1) provides for public junior colleges to earn an additional funding weight for a credential conferred in a high-demand occupation as part of performance tier funding. To be eligible for an additional weight, a credential must be eligible for performance tier funding under 19 Administrative Code 13.555, and a public junior college must confer the credential in a field specified in 19 Administrative Code Chapter 13, Subchapter T, as defined by the discipline's federal Classification of Instructional Program (CIP) Code. 19 TAC 13.590

Overallocated

Funds

If the Coordinating Board determines , within seven years of an incorrect payment that a data reporting error or any other error resulted in an overallocation of funds to an institution, the Coordinating Board shall use any method authorized under statute or 19 Administrative Code 13.528 to make a funding adjustment necessary to correct the overallocation.

The Coordinating Board shall notify the institution not later than 30 business days after the commissioner makes a determination of a data reporting error under 19 Administrative Code 13.52513.528, including any close-out or settle-up provisions contained in 19 Administrative Code Chapter 13, Subchapter U, or otherwise identifies an error requiring a funding adjustment to recover an overallocation.

This notification must contain the amount of the overallocation and the basis for the determination.

The institution may submit a written appeal to the commissioner within 30 business days of receiving notification of an overallocation. The institution may attach any data or other written documentation that supports its appeal. The commissioner shall review the appeal and determine in his or her sole discretion whether to affirm, deny, or modify the determination of overallocation within 30 business days of receipt. The commissioner or chief audit executive shall make an annual report of overallocation determinations to the Coordinating Board.

If the institution does not appeal or the commissioner affirms the determination that an overallocation requiring a funding adjustment has occurred, the Coordinating Board shall recover an amount equal to the amount overallocated to the public junior college through one of the following methods:

1. The Coordinating Board shall:

a. Withhold an amount equivalent to the overallocation by withholding from subsequent allocations of state funds for the current fiscal year as part of any close-out or settle-up provisions contained in 19 Administrative Code Chapter 13, Subchapter U, or as otherwise authorized by law of the current fiscal year; or

b. Request and obtain a refund from the public junior college during the current fiscal year an amount equivalent to the amount of the overallocation; or

c. If the commissioner in his or her sole discretion determines that the recovery of an overallocation in the current or subsequent fiscal year will have a substantial negative impact on the operations of the institution or the education of students, the commissioner may instead recover the overallocation pursuant to item 2.

2. If the commissioner in his or her sole discretion determines that an overallocation pursuant to item 1a or 1b, above, was the result of exceptional circumstances reasonably caused by statutory changes to Education Code Chapters 130 or 130A and related reporting requirements, the Coordinating Board may recover the overallocation over a period not to exceed the subsequent five fiscal years.

In addition to the recovery of an overallocation, the commissioner may establish a corrective action plan for a public junior college

that has received an overallocation of funds. If a junior college district fails to comply with a request for a refund,

the Coordinating Board shall report to the comptroller that the amount constitutes a debt for purposes of Government Code

403.055. The Coordinating Board shall provide to the comptroller the amount of the overallocation and any other information required by the comptroller. The comptroller may certify the amount of the debt to the attorney general for collection. The junior college district's governmental immunity is waived to the extent necessary to collect the debt owed.

Education Code 130A.009; 19 TAC 13.528

Under-Allocated

Funds

If the commissioner determines within one year of the certification date of data found to have been reported in error that a data reporting error resulted in an under-allocation of funds, the Coordinating Board shall provide the funds to the institution pursuant to any close-out or settle-up provisions contained in 19 Administrative Code, Chapter 13, Subchapter U, or as otherwise authorized by law.

The Coordinating Board shall not provide additional funds to an institution in response to a data reporting error if more than one year has elapsed between the certification deadline of the data in question and the date that the error was initially communicated to the commissioner.

The Coordinating Board shall provide additional funds to an institution pursuant to any close-out or settle-up provision contained in Subchapter U if the commissioner determines that an error other than a data reporting error resulted in an under-allocation of formula funding to the institution at least 15 days prior to the close out of a fiscal year for which funding was under-allocated.

19 TAC 13.529

Records Retention

A public junior college shall retain records related to financial and educational data and information reported to the Coordinating Board under 19 Administrative Code Chapter 13 for a period of not less than seven years after the date

of the close-out payment, as set out in 19 Administrative Code Chapter 13, Subchapter U, made for the fiscal year that is two

years after the year for which the data was reported, in accordance with Education Code 130A.009(e). 19 TAC 13.527

Compliance

Monitoring and

Audits by the

Coordinating Board

The chief audit executive may conduct compliance monitoring or audits of public junior colleges' compliance with Education Code Chapter 130A, the General Appropriations Act, and other related formula funding statutes, in accordance with 19 Administrative Code 13.526. [See CDC] 19 TAC 13.526(b)

Audit

An “audit” is an engagement to audit the program conducted by the Coordinating Board's internal auditor and internal audit or compliance monitoring staff pursuant to either Education Code 130A.006(4) or 61.035. This term may include a site visit, desk review, or examination of the institution's use of funds allocated by the Coordinating Board and data reported to the Coordinating

Board. The term includes auditing undertaken to obtain evidence to sufficiently examine or verify data submitted to the Coordinating Board to be used by the Coordinating Board for funding or policymaking decisions, including data used for formula funding allocations, to ensure the data is reported accurately. 19 TAC 13.522(1)

Compliance

Monitoring

"Compliance monitoring” means a risk-based audit and compliance function conducted by the Coordinating Board pursuant to either Education Code 130A.006(4) or 61.035, for the purpose of reviewing and assessing programmatic, legal, and fiscal compliance. This function may include conducting audits, site visits, desk reviews, or other examinations to ensure that funds allocated or distributed by the Coordinating Board are allocated, distributed, and used in accordance with applicable law and Coordinating Board rule. The function includes obtaining evidence to sufficiently examine or verify data submitted to the Coordinating Board to be used by the Coordinating Board for funding or policymaking decisions, including data used for formula funding allocations, to ensure the data is reported accurately. 19 TAC 13.522(4)

Shared Services

Report

This provision applies to each public junior college district of fewer than 5,000 full-time equivalent students which receives a scale adjustment under 19 Administrative Code 13.554(b)(1)(C). Public junior colleges subject to this provision must submit a report on their participation in shared services to the Coordinating Board by November 1st of each even-numbered year. The report will include information for each fiscal year in the previous two fiscal years in which a college received a scale adjustment. Education Code 130A.054(e); 19 TAC 13.563

Expenditure of

Funds

All funds allocated under the provisions of the Education Code, with the exception of those necessary for paying the costs of audits as provided, shall be used exclusively for the purpose of paying salaries of the instructional and administrative forces of the several institutions and the purchase of supplies and materials for instructional purposes. Education Code 130.003(c)

Note: For more detail regarding appropriated funds and restrictions on the use of the funds, see the current General

Appropriations Act and related appropriations bills, 2 available at the Legislative Reference Library of Texas.

Report on Lending

and Credit Support

Programs

Not later than December 31 of each even-numbered year, the Bond Review Board shall submit to the legislature and post on its

internet website a report on all lending programs and credit support programs in this state in accordance with Government Code

1231.064. A political subdivision of this state, including a college district, shall provide to the Bond Review Board in the manner provided by board rule any information necessary for the Bond Review Board to prepare the report.

"Credit support program" means a program under which this state guarantees or provides credit enhancements for the debt of any public or private entity, including providing support for interest or principal payments, in a manner that obligates this state to pay any part of the principal or interest on that debt if the entity defaults.

"Lending program" means a program through which state money is loaned, or otherwise provided with the expectation of repayment, to a public or private entity.

Gov’t Code 1231.064

1 Certification of compliance email: ccfinance@highered.texas.gov

2 General appropriations acts and major biennial appropriations bills:

http://www.lrl.state.tx.us/legis/approBills.cfm