Warning: Bill numbers and names are based on text-to-speech transcript which may have errors due to transcription issues or ad hoc/incomplete language use by committee.
relative to school cooperative purchasing, board policies, and receivership
Likely Text to Speech Error on Bill #
HB586 1472h
Information Only00:01:50.388 - 10:00:36 AM
The chair introduces the executive session, notes the bills to be addressed, emphasizes the need to act on HB 586 due to its deadline, mentions an amendment by Representative McGuire, and outlines the plan to caucus before discussing.
HB586 1472h
Information Only00:08:58.388 - 10:07:44 AM
Representative McGuire explains amendment 1472h, which replaces RSA 198:4-d. He details changes including adding school administrative units to reporting, keeping existing Romans I-III unchanged, renumbering sections, clarifying audit options under RSA 21-J:19 or RSA 41:5, and notes a caught error in cross-references that will be fixed during caucus. The amendment accommodates hearing feedback.
HB586 1472h
Information Only00:12:18.388 - 10:11:04 AM
A committee member points out an error in the amendment: in Roman numeral 8, line 13, the reference should be to sections 6 and 7 instead of 5 and 6 due to renumbering.
HB580
Information Only00:03:16.388 - 10:02:02 AM
The chair describes HB 580 as containing policies on cooperative purchasing program (with comments from Charlie Arlinghaus noted), required policy statements for charter school trustees and school board members, and reactions to receivership issues like in Claremont. Mentions a side-by-side comparison with education rules 303.04 and 306.04 prepared by Jennifer Fore to be reviewed later.
HB580
Information Only00:13:10.388 - 10:11:56 AM
Explains the amendment details, including changes to audit requirements such as adding administrative units, clarifying accounting options under RSA 21J, correcting references in Roman 8, expanding audit contents to include itemized employee lists, benefits, pension liabilities from Senate bill and Rep. Brown's suggestion. Discusses timing: 9 months for submission matching federal audits, 3 months for department verification, 12 months for corrections, adding 'grant' before funding on line 21 per chairman's suggestion, and new section 9 for searchable format on website, approved by Senator Murphy and Mr. Campo.
HB580
Information Only00:16:38.668 - 10:15:24 AM
Praises the presentation and asks about extensions on lines 19-20 for disputed items or gathering information, questioning if 9 months or 12 months deadline, referencing Mr. Campo's input on going beyond 9 months for good audits.
HB580
Information Only00:16:38.668 - 10:15:24 AM
Clarifies deadline is March 31 (9 months from June 30 fiscal year end), reasonable per federal standards. Notes non-professional audits or adverse findings may require up to a year for corrections.
HB580
Information Only00:17:51.988 - 10:16:37 AM
Questions the 'shall withhold' language on line 21 versus 'could withhold' as explained, seeking clarification on commissioner's discretion.
HB580
Information Only00:17:51.988 - 10:16:37 AM
Explains 'shall' is from original bill; discretion is in allowing extensions for discrepancies. Withholding only for non-compliance after correction period if still deficient.
HB580
Information Only00:19:25.400 - 10:18:11 AM
Asks for definition of non-compliant, distinguishing between deficient audit findings and efforts to comply.
HB580
Information Only00:19:25.400 - 10:18:11 AM
Defines non-compliance as not attempting audit or not responding to auditors' questions, delaying completion. Extensions for good faith efforts when unable to meet timeframe.
HB580
Information Only00:21:05.900 - 10:19:51 AM
As former finance director and CPA, clarifies Roman 8 focuses on audit completion, not addressing weaknesses or adverse findings. Department reviews for completeness, 12 months to fix missing items required by law.
HB580
Information Only00:22:54.400 - 10:21:40 AM
Seeks clarification; appreciates explanation but finds bill language unclear on addressing deficiencies per lines 20-21. Asks for examples of grant funding, noting adequacy payments might be considered grants.
HB580
Information Only00:22:54.400 - 10:21:40 AM
Deficiencies refer to completing the audit per law, not adverse findings. Context is audit submission and completeness review; no mention of addressing audit findings.
HB580
Information Only00:25:01.400 - 10:23:47 AM
Supports 9 months over 6, with 3-month DOE review totaling one year. Questions adding 12 months making 21 months total, suggests tighter timeline. 'Noncompliant' needs specificity to three-part timeline, especially 9 months in district's control. Deficiencies are shortcomings in submission, not correcting historical issues detected in audit. Grant money includes adequacy aid.
HB580
Information Only00:26:16.400 - 10:25:02 AM
Agrees on deficiencies issue. Notes statute not meant for audit procedures; other statutes like RSA 21-J-19 require audit within 12 months. Audit focuses on policies/procedures for financial correctness, not just reports. Deficiencies relate to checks/balances, authorizations, accounting setup. Audit requirements scattered, apply to municipalities too; avoid contradictions.
HB580
Information Only00:28:31.400 - 10:27:17 AM
Defends line 22's 'noncompliant' as clear: noncompliant until audit/report completed, submitted, questions answered to satisfaction. Focus on getting complete report, not financial problems; enables future improvements.
HB580
Information Only00:30:53.467 - 10:29:39 AM
Suggests line 25 require DOE, districts, SAUs to post reports on their websites for accessibility. Agrees focus on audit completion, not findings. Audit includes financial materiality and internal controls for financial matters.
HB580
Information Only00:31:50.400 - 10:30:36 AM
References Mark Manganiello's 4-7 memo on SB 586 (possibly related), notes unresolved issues. Concerns DOE may lack capacity to handle this.
HB580
Information Only00:33:12.137 - 10:31:58 AM
Expressed concerns about moving the audit responsibility to the Department of Education instead of the DRA, noting that audits have always been with the DRA. Highlighted unaddressed issues raised by the Department of Ed and worries about searchable electronic formats being editable.
HB580
Information Only00:34:37.216 - 10:33:23 AM
Read the three bullets from the memo dated 4-7 from Mark Manganiello of the Bureau of School Finance, requesting a work session, discussing audit policy, need for resources per fiscal note, and noting that the bill repeals the existing DOE 25 process which is needed for tax rates and reporting. Mentioned that Representative McGuire said the DOE 25 issue was addressed but expressed concern about not working with the department and burdening it.
HB580
Information Only00:35:34.576 - 10:34:20 AM
Inquired if the primary issue is resources for the commissioner to review reports and staffing, referencing the fiscal note which includes needs for one charter school auditor and two district auditors, costing half a million dollars for FY27 and nearly that for 28 and 29.
HB580
Information Only00:36:20.536 - 10:35:06 AM
Observed the need to be mindful of the audience for the information: school board, residents, DRA, or DOE. Clarified that DOE-25 is not displaced, audits are for school board review for community benefit, and DOE's role is limited to checking filing submission, not evaluation.
HB580
Information Only00:38:30.130 - 10:37:16 AM
Reminded that this is a policy committee for an early bill, which will go to Finance Committee for staffing and resources issues. Noted that much discussion is about process, compliance, and interpretation of terms like non-compliance. Suggested that posting responsibility on the web might be better for local school district or city rather than the Department of Education.
HB580
Information Only00:39:34.610 - 10:38:20 AM
Reminded that the intent was to present the amendment and then discuss, inquired about timing for separate discussions or caucus, noting they are close to needing a caucus.
HB580
Information Only00:39:34.610 - 10:38:20 AM
Expressed discomfort with the word 'deficiencies' as unclear, sought clearer language. Echoed concern about searchable electronic formats being modifiable, favoring public access but in a safe way.
HB580
Information Only00:40:54.237 - 10:39:40 AM
Pointed out other related statutes, reading from 41:31-D about submitting audits to DRA commissioner within 10 days of acceptance or 45 days if not. Listed additional statutes: 21-J:19 (hiring accountant, submitting audit), 21-J:21 (distribution), 41:31-b (hiring CPA or elected auditors), 41:31-c (requirements, exceptions for small districts), 198:4-d (independent audit), 671:5 (elected auditors details).
SB586 1500H
Support01:43:43.574 - 11:42:29 AM
Moved that SB 586 ought to pass and offered amendment 1500H. Explained changes: corrected reference on page 2 line 13 to paragraphs VI and VII; added on line 22 'not including RSA 198:40A funding' to exclude adequacy funding from withholding; added in section IX starting line 26 that reports will be on Department of Education's website and individual reporting entities' websites.
SB586 1500H
Information Only01:45:53.420 - 11:44:39 AM
Sought clarification on page 3 regarding 'the department show makes something available on their website,' confirming it means the reporting entities' websites as well.
SB586 1500H
Information Only01:45:53.420 - 11:44:39 AM
Thanked for the change excluding adequacy funding from withholding. Raised concern about multi-districts: if one district fails to comply, all districts in it face consequences even if compliant, as they lack full control.
SB586 1500H
Information Only01:47:16.574 - 11:46:02 AM
Brought up issue with multi-district 46 including Merrimack Valley and Andover; if Merrimack Valley fails to comply, Andover, which does everything correctly, would still face consequences as part of the district.
SB586 1500H
Information Only01:50:51.574 - 11:49:37 AM
Explained the language on page 2, lines 21-23, stating that the department should withhold state grant funding from noncompliant entities including SAUs, but compliant school districts would not be affected. Emphasized that only funding to the noncompliant SAU would be withheld.
SB586 1500H
Information Only01:52:02.574 - 11:50:48 AM
Highlighted the word 'or' on line 23, suggesting that the commissioner could withhold funds only from the noncompliant SAU if district audits are compliant.
SB586 1500H
Support01:52:02.574 - 11:50:48 AM
Agreed with the interpretation that the commissioner is compelled, not discretionary, to withhold funds only from the noncompliant entity, and that 'any' and 'or' make it mandatory to distinguish between SAU and districts.
SB586 1500H
Information Only01:53:11.901 - 11:51:57 AM
Questioned how an SAU could complete its audit if one district like Merrimack Valley fails to do so, noting that in multi-district SAUs, audits include both.
SB586 1500H
Information Only01:54:29.761 - 11:53:15 AM
Clarified that a noncompliant school district does not prevent SAU compliance, as the SAU is audited only on its own transactions and records, which are independent. Stated that SAU failure would be due to its own issues.
SB586 1500H
Oppose01:55:28.541 - 11:54:14 AM
Disagreed, explaining that in multi-district SAUs, financial accounting is handled centrally by SAU staff, so failures in procedures could affect all districts, not just isolated to one entity.
SB586 1500H
Support01:56:39.801 - 11:55:25 AM
Reiterated that school district failures cannot cause SAU audit failure, and school districts control the SAU, so they bear consequences for poor SAU performance in joint arrangements.
SB586 1500H
Information Only01:57:47.181 - 11:56:33 AM
Raised a different topic on line 20 about correcting deficiencies, noting the need for a definition of 'deficiencies' in the bill language.
SB586 1500H
Information Only01:59:13.241 - 11:57:59 AM
Discussed that not all audit findings are worrisome, like depreciation of buildings, and questioned how to distinguish which deficiencies matter for correction.
SB586 1500H
Oppose01:59:13.241 - 11:57:59 AM
Argued that audits already define deficiencies and their impact upfront, so no need to define them in the bill.
SB586 1500H
Information Only01:59:13.241 - 11:57:59 AM
Clarified that deficiencies refer to process issues like timely filing, not just financial findings, and suggested rephrasing to avoid audit-specific connotations.
SB586 1500H
Support02:00:22.741 - 11:59:08 AM
Noted that context on line 18 defines deficiency as related to the completeness of the report, making it clear without further definition.
SB586 1500H
Oppose02:01:38.361 - 12:00:24 PM
Expressed concern that the amendment conflicts with existing statutes, such as the one-year audit submission requirement versus the bill's nine months, and listed other conflicts, calling it irresponsible to advance without resolution.
SB586 1500H
Information Only02:02:58.301 - 12:01:44 PM
On state grant withholding language (lines 21-22), noted that adequacy grants are excluded but asked for examples of other state grants subject to withholding, which could be significant for districts like Manchester.
SB586 1500H
Vote02:13:19.625 - 12:12:05 PM
After caucus, roll call on the amendment (OTP on amendment): All yes (Weiler, Miller, Brown, Hagan, Peoples, Damon, Ames, Christian, Weinstein, Chairman Lads), passes 7-0.
SB586 1500H
Oppose02:14:04.645 - 12:12:50 PM
On motion to OTPA SB 586 with amendment, expressed desire for a better bill by working with Department of Education and auditors to resolve conflicts with statutes.
SB580
Information Only02:15:19.926 - 12:14:05 PM
Presented a side-by-side comparison of sections 3 and 4 of SB 580 with existing Ed 306.04 rules. Noted differences: bill requires policy adoption on various topics, while rules impose substantive duties; missing elements in bill include delegation to superintendents, school building maintenance, and other subparagraphs; added in bill is training on fiduciary responsibility. Pages 4+ copy Ed 306.04 showing additional required policies not in SB 580.
SB580
Information Only02:20:05.285 - 12:18:51 PM
Acknowledged the side-by-side comparison enlightening the differences between rules and law, thanked for the policy overview, and indicated intent to take a brief further discussion.
SB580
Oppose02:20:52.306 - 12:19:38 PM
Makes a motion for ITL (Inexpedient to Legislate) on SB 580.
SB580
Oppose02:21:00.000 - 12:19:46 PM
Supports the ITL motion, noting that the bill contains three components: a duplicative school cooperative purchasing program already covered by state services through the Department of Administrative Services; missing key policy requirements like staff evaluation in the proposed policies; and an unnecessary receivership provision, as HB 1816 provides a better process for intervention and recovery plans, exemplified by Claremont's recent progress in reimbursing borrowed funds and potentially achieving a surplus.
SB580
Oppose02:23:06.366 - 12:21:52 PM
Seconds the ITL motion and agrees with the overview, describing the bill as three unrelated topics rushed forward; criticizes the receivership section as inadequate and skeletal; highlights the value of the state's cooperative purchasing program with upcoming communications to districts; emphasizes local control for policies and notes the bill's incomplete approach.
SB580
Oppose02:24:30.000 - 12:23:16 PM
Adds to the discussion on the receivership component, stating it goes beyond what is needed in the state; prefers HB 1816's intervention method and cites Claremont as an example where assistance and alerts led the school board to improve.
SB580
Information Only02:25:33.286 - 12:24:19 PM
Acknowledges the progress in Claremont with vigorous efforts and responsibility taken, though notes educational compromises were made to achieve a potential surplus; expresses delight in the recognition of these efforts.
SB580
Vote02:26:00.000 - 12:24:46 PM
Roll call on the ITL motion results in 17-0 yes votes, passing unanimously; the bill will go on consent, with Representative Ladd to write the committee report.