ARC 5462C

ARC 5462C

EDUCATION DEPARTMENT[281]

Notice of Intended Action

Proposing rule making related to custodial funds

and providing an opportunity for public comment

The State Board of Education hereby proposes to amend Chapter 98, "Financial Management of Categorical Funding," Iowa Administrative Code.

Legal Authority for Rule Making

This rule making is proposed under the authority provided in Iowa Code section 256.7(5).

State or Federal Law Implemented

This rule making implements, in whole or in part, 2020 Iowa Acts, Senate File 2082.

Purpose and Summary

This proposed rule making renames a fund to align with current governmental accounting terminology and to conform to a legislative change.

Fiscal Impact

This rule making has no fiscal impact to the State of Iowa.

Jobs Impact

After analysis and review of this rule making, no impact on jobs has been found.

Waivers

This rule amendment is required by statute and is not waivable.

Public Comment

Any interested person may submit written or oral comments concerning this proposed rule making. Written or oral comments in response to this rule making must be received by the Department no later than 4:30 p.m. on March 16, 2021. Comments should be directed to:

Public Hearing

A public hearing at which persons may present their views orally or in writing will be held as follows:

Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rule making.

Any persons who intend to attend the hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee's meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

The following rule-making action is proposed:

Amend rule 281—98.101(298A) as follows:

281—98.101(298A) Agency Custodial funds. Agency Custodial funds are used to account for funds that are held in a custodial capacity by the school district for individuals, private organizations, or other governments. Agency Custodial funds may include moneys collected for another government, a grant consortium when the school district serves as fiscal agent for the other school districts but has no managerial responsibilities, or funds for a teacher or a parent-teacher organization which has its own federal identification number (FIN). In an agency a custodial fund, the school district or area education agency merely renders a service as a custodian of the assets for the organization owning the assets and the school district or area education agency is not an owner. Agency Custodial funds typically involve only the receipt, temporary investment and remittance of assets to their rightful owners.

98.101(1) Sources of receipts in agency custodial funds. Sources of receipts in the agency custodial funds include temporary receipts of cash, investment instruments, property, and interest on investments held.

98.101(2) Appropriate uses of agency custodial funds. Appropriate disbursements from an agency a custodial fund depend on the nature of the rightful owners' conditions or the responsibilities of the custodian. Typically, disbursement will involve remittance of assets to their rightful owners or to a third party on behalf and at the request of the rightful owners. The school district cannot disburse more funds at any point in time than it has received from the rightful owner.

98.101(3) Inappropriate uses of agency custodial funds. Inappropriate disbursements from agency custodial funds include any disbursement which is not consistent with the terms of the agreement, not legal to a school district, or that exceeds the amount of funds that have been received from the rightful owner or on behalf of the rightful owner.