PRINTER'S NO. 2973
No. 2304 Session of 1996
INTRODUCED BY WALKO, GIGLIOTTI, READSHAW, SAYLOR, SHANER,
LAUGHLIN, PETTIT, FARMER, WOGAN, YOUNGBLOOD, ROBINSON,
TRELLO, DeLUCA, KAISER, STEELMAN, OLASZ AND M. COHEN,
JANUARY 19, 1996
REFERRED TO COMMITTEE ON EDUCATION, JANUARY 19, 1996
AN ACT
1 Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
2 act relating to the public school system, including certain
3 provisions applicable as well to private and parochial
4 schools; amending, revising, consolidating and changing the
5 laws relating thereto," further providing for auditing.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Section 2401 of the act of March 10, 1949
9 (P.L.30, No.14), known as the Public School Code of 1949,
10 amended or added June 18, 1959 (P.L.472, No.100), July 31, 1963
11 (P.L.389, No.206), October 21, 1965 (P.L.601, No.312), December
12 1, 1965 (P.L.980, No.361) and January 25, 1966 (1965 P.L.1565,
13 No.546), is amended to read:
14 Section 2401. By Whom Audited.--(a) The finances of every
15 school district and of every joint school board, in every
16 department thereof, together with the accounts of all school
17 treasurers, school depositories, teachers' retirement funds,
18 teachers' institute funds, directors' association funds, sinking
1 funds, and other funds belonging to or controlled by the
2 district, shall be properly audited as follows:
3 (1) In all school districts of the first class, by the
4 school controller.
5 (2) In all school districts of the second, third and fourth
6 class, except as hereinafter otherwise provided, by the
7 controller or auditors of the city, borough, incorporated town,
8 or township in which the whole or the greater or greatest
9 portion of the area of the district is located.
10 (3) When in any school district of the second class the
11 annual expenditures, exclusive of moneys received from the sale
12 of bonds, exceeds the sum of five hundred thousand dollars
13 ($500,000), such district may employ a certified public
14 accountant within sixty days from the close of the fiscal year.
15 (4) Any school district of the second, third or fourth class
16 and any joint school board may employ an independent auditor who
17 shall be a certified public accountant or competent public
18 accountant prior to the end of the fiscal year, and when so
19 employed, such independent auditor shall audit the finances of
20 such school district or such joint school board for such fiscal
21 year instead of the controller or auditors hereinbefore referred
22 to, and shall have all the powers and duties of such auditors,
23 except that the audits shall be made in accordance with
24 generally accepted auditing standards. The compensation of the
25 independent auditor shall be fixed by the employing board of
26 directors and shall be paid from the funds of the school
27 district or of the joint school board, as the case may be.
28 (5) In any school district constituted of two or more
29 municipal divisions by reason of the creation of a new city,
30 borough or township, and the fact that such new city, borough or
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1 township, or a part of the original school district remaining
2 after its separation, would constitute a fourth class school
3 district, and the creation of such fourth class school district
4 has not been approved, the auditors or the controllers of the
5 cities, boroughs, towns, or townships last created and which do
6 not form a separate school district shall meet annually with the
7 auditors of the school district and participate in the audit of
8 the school accounts, and such auditors or controllers shall have
9 the same rights and powers as are conferred by this act upon the
10 auditors of schools accounts.
11 (6) In all independent school districts, by the proper
12 auditors, herein provided for school districts of the class in
13 which they belong, and where an independent school district of
14 the fourth class is taken from two or more school districts, its
15 accounts shall be audited by the auditors of the school district
16 in which its buildings are located.
17 (7) In union or merged school districts the court of common
18 pleas of the county in which the district is located, upon
19 petition of the board of school directors of such union or
20 merged school district, shall, as soon as convenient after the
21 creation of the district, appoint three persons to audit the
22 financial accounts of the district. The auditors so appointed
23 shall, on the first day of July, at the time of organization, or
24 within five days thereafter, and within thirty days, carefully
25 audit and adjust the financial accounts of the school district
26 for the preceding school year. At the first municipal election
27 after a union or merged school district is created there shall
28 be elected three school auditors, one for a term of two years,
29 one for a term of four years, and one for a term of six years,
30 and their successors thereafter shall be elected for terms of
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1 six years each. When a vacancy occurs in the office of auditor
2 in any union or merged school district by reason of death,
3 resignation, removal from the school district, or otherwise, the
4 court of common pleas of the county in which the district is
5 located, upon petition of the board of school directors of such
6 union or merged school district, shall appoint a person to hold
7 such office for the unexpired term of the person whose place he
8 is appointed to fill. The compensation of both the appointed and
9 elected auditors shall be ten dollars ($10) per day for each day
10 necessarily spent by each auditor. The total expense of such
11 auditing, including the cost of filing the report, advertising,
12 and other necessary costs, shall be paid by the union or merged
13 school district.
14 The board of school directors of any union or merged school
15 district may employ a certified public accountant to audit the
16 finances of such school district for such fiscal year instead of
17 the auditors, hereinabove referred to, and such certified public
18 accountant shall have all the powers and duties of said auditors
19 and shall receive the compensation fixed by the board of
20 directors of the union or merged school district and shall be
21 paid by the said district.
22 (8) In county vocational school districts, by the county
23 auditors or county controller.
24 (9) The financial accounts of each annual county or district
25 teachers' institute shall be audited by three auditors, two to
26 be elected by the teachers' institute and one by the directors'
27 association for a county institute, and by the board of school
28 directors for the district institute.
29 (10) The financial accounts of the directors' association
30 shall be audited by the county auditors or county controller.
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1 (11) In all school districts established as a result of the
2 provisions of the act of August 8, 1963 (P.L.564), by a
3 certified public accountant, a firm of certified public
4 accountants, a competent independent public accountant or a firm
5 of competent independent public accountants who shall be named
6 prior to the end of the fiscal year and shall have all the
7 powers and duties of such other auditors hereinbefore provided,
8 except that the audit shall be made in accordance with generally
9 accepted auditing standards. The compensation of the accountant
10 or firm of accountants shall be fixed by the employing board of
11 school directors and shall be paid from the funds of the school
12 district.
13 The accountant or firm of accountants may be designated for a
14 term of years and, at the discretion of the board, may be
15 authorized to conduct a monthly audit of accounts.
16 (b) As used in this section, the term "properly audited"
17 shall include both fiscal and performance auditing per Generally
18 Accepted Government Auditing Standards, latest revision,
19 promulgated by the United States General Accounting Office.
20 Section 2. This act shall take effect in 60 days.
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