GeorgiaHB 11642025-2026 Regular SessionHouse

Education; require State Board of Education to appoint an audit committee

Sponsored By: Kasey Carpenter (Republican), Chris Erwin (Republican), Matthew Gambill (Republican), Matt Hatchett (Republican), Jan Jones (Republican), Will Wade (Republican)

Signed by Governor

EducationEducation and YouthGeneral Bill

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Bill Overview

Analyzed Economic Effects

10 provisions identified: 6 benefits, 2 costs, 2 mixed.

Schools get tiered financial risk oversight

By July 1, 2026, Georgia must begin financial monitoring for every local school system and state charter school. Full implementation is required by the start of the 2028–2029 school year. Four tiers range from Fiscally Sound to Fiscal Watch, Fiscal Distress, and Critical Fiscal Emergency, with increasing support and intervention. Tier 2 means moderate risk and requires a state-approved recovery plan; Tiers 3 and 4 mean high risk. Tier 3 requires a comprehensive, time-bound recovery plan; reviews check cash, debt, benefits, budgets, enrollment, compliance, and fraud risks.

Families can find school financial reports

School systems and state charter schools with websites must prominently link to the state education department’s financial information page. It includes budgets, personnel reports, five years of audits, financial warning findings, and required education sales-tax information when applicable. Moderate-risk and high-risk local school systems must publish actual financial operations by September 30 each year. Board members and the superintendent must sign the statement, which runs in the county’s official newspaper once weekly for two weeks. Copies go to the education department and local government, and remain available in the central office for at least two years.

Financially troubled schools must report spending

The state audit department must audit every local school system and state charter school labeled moderate-risk or high-risk. It must report financial irregularities, deficits, and significant warning signs to state education officials and the relevant governing body. Within 60 days of designation, school leaders must send a response and corrective plan to state education and audit offices. Until both risk labels end, leaders must give each board member expected current-month spending by budget function by the tenth business day. Members must acknowledge the report in writing, and the signed report stays in meeting minutes.

School audits must include parent input

With its director’s approval, the Office of Student Achievement may review how local education agencies use and report legal waivers. Reviews check waiver agreements, student results for the current and preceding three school years, and signs of misuse or reporting problems. On-site school performance audits must gather information from administrators, teachers, and parents before closing. The director may also approve an extra performance audit when a local school system is labeled high-risk.

School money gets stronger misconduct safeguards

Covered school officials and employees cannot hold state aid or other public funds in personal bank accounts, even briefly. This covers local systems, state charter schools, University System of Georgia institutions, and other schools receiving state aid. Beginning July 1, 2026, the state auditor may investigate any local school system or state charter school. A full investigation is required when information indicates official or employee mismanagement or misconduct in a past or present administration.

School oversight tracks overdue benefit payments

Georgia’s State Board of Education must appoint an audit committee that meets at least six times each fiscal year. State audit staff and a State Charter Schools Commission representative must attend. The committee reviews school financial controls and reports on schools at moderate or high financial risk. State health and retirement plans must report overdue payments from school systems, state charter schools, and completion special schools at least twice each fiscal year. Reports cover unpaid full obligations overdue more than 120 days during the preceding 180 days, and go to state oversight agencies.

Schools face annual financial audit checks

The state must perform or arrange yearly financial and compliance audits and issue reports. This covers local school systems, state charter schools, University System of Georgia units, and other schools receiving state aid. Covered school audits must follow government accounting and auditing standards, professional rules, and ethics. Reports must include an auditor’s opinion on the school system’s or state charter school’s finances and operating results. School governing bodies may use education funds for extra audits, which generally do not replace required audits; reports go to the state audit department within 10 days of issuance.

High-risk schools face tighter leadership limits

Local school flexibility contracts must let the State Board of Education change or end them after notice of high-risk status. Charter system agreements must provide similar authority after notice of the specified high-risk state charter school designation. While a local school system is high-risk, its superintendent’s contract cannot be extended for more than 12 months. Any longer extension is void.

Emergency-tier schools lose early state funding

Beginning July 1, 2026, Tier 4—Critical Fiscal Emergency school systems and state charter schools cannot receive state education funds early. This applies to advance distributions under the Quality Basic Education Act. An advance remains available only when the state auditor recommends it and the State Board of Education approves it.

Schools get auditor options with safeguards

Local school systems and state charter schools must arrange annual audits and submit signed certifications by December 31 each year. School leaders, finance officers, and board chairs must certify audit readiness and current health-plan, retirement-system, and Department of Labor payments; noncompliance brings a high-risk label. The state sets readiness standards and schedules audits by risk, readiness, and resources; it may delay unready audits and must report chronic failures to state leaders. Schools may hire Georgia-certified public accountants only with written state auditor approval, and those auditors must follow state requirements. Using one provider for both auditing and readiness work requires written approval limited to exceptional cost or local-provider shortages.

Sponsors & Cosponsors

Cosponsors

Billy Hickman
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 152 • No: 70

Senate vote • 3/23/2026

PASSAGE

Yes: 49 • No: 2 • Other: 4

House vote • 2/26/2026