April 2019 Committee on School Finance/Permanent School Fund Item 5

Report by the State Auditor’s Office on the Audit of the Permanent School Fund’s Financial Statements and Certification of the Bond Guarantee Program for the Fiscal Year Ending August 31, 2018

April 4, 2019

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: DISCUSSION
STATE BOARD OF EDUCATION: NO ACTION

SUMMARY:
This item provides an opportunity for representatives of the State Auditor’s Office (SAO) to make a presentation regarding the Audit of the Permanent School Fund’s Financial Statements and the certification of the Bond Guarantee Program for the Fiscal Year Ending August 31, 2018.

STATUTORY AUTHORITY: Texas Constitution, Article VII, §2 and §5, Texas Education Code (TEC), §45.053(b)

The Texas Constitution, Article VII, §2 and §5 establish the permanent school fund, the assets that comprise the permanent school fund, the bond guarantee program, the available school fund, and authorize the State Board of Education (SBOE) to manage and invest the permanent school fund in accordance with the prudent person standard.

TEC, §45.053(b) requires the State Auditor’s Office analyze the status of guaranteed bonds and certify that the amount of such bonds is within limits prescribed by law.

The full text of statutory citations can be found in the statutory authority section of this agenda.

FUTURE ACTION EXPECTED: None

BACKGROUND INFORMATION AND JUSTIFICATION:
Texas Education Code (TEC), §45.053, states that “Each year, the state auditor shall analyze the status of guaranteed bonds as compared to the cost value and market value of the permanent school fund. Based on that analysis, the state auditor shall certify whether the amount of bonds guaranteed is within the limit prescribed by this section.”

Staff Members Responsible:

Holland Timmins, Executive Administrator and Chief Investment Officer, Texas Permanent School Fund