Upon the recommendation of the Secretary of Education (“Secretary”) that a school district or charter school is in financial distress as provided in paragraph (1) of this section, the Director of the Office of Management and Budget (“Director”), with the consent of the Controller General, may appoint a Financial Recovery Team (“Team”), and the Department of Education is hereby authorized to secure technical assistance and other resources as necessary to ensure the effective operations of the Team.
(1) For the purposes of this section a local school district or charter school shall be considered in financial distress when 1 or more of the following criteria are met:
a. The district financial position report required to be submitted on May 1, pursuant to § 1507(a) of this title, projects less than 1 month's carryover; or
b. It is projected at any time during the course of the fiscal year that local payroll expenses will exceed projected local revenues; or
c. The charter school has been placed on formal review based, at least in part, on concerns regarding the charter school's finances; or
d. Whenever a school district or charter school projects that it cannot fund 1 or more scheduled payroll disbursements.
(2) During any period of time when it is determined that a school district or charter school is in financial distress, the Financial Recovery Team shall be empowered to exercise, subject to the approval of the Secretary, control over the expenditure of funds appropriated to a school district or charter school as deemed necessary by the members of the Team. Control shall include, without limiting the foregoing, the right to approve the school district's or charter school's annual budget and any subsequent material amendment thereto, the right to approve district tax rates, the right to request drawdown of state financial assistance if applicable, the right to approve financial reporting to the local board of education or charter school board, the right to approve accounting policies, procedures and reports, the right to require a Financial Responsibility Committee be established by the local school board or charter school comprised of 1 or more members of the said board and/or residents of the district or, in the case of a charter school, parents of students attending the school. The Committee shall examine and report on the financial status of the district or charter school and shall have the right to pre-approve any obligation or contract that would require the expenditure of funds by the school district or charter school. Notwithstanding any provision of either this Code or any applicable rule or regulation to the contrary, the authority extended under this section shall apply to the expenditure of all funds received by a school district or charter school.
(3) The Financial Recovery Team shall report at least monthly to the Governor, the General Assembly, Director and the Controller General regarding the district's or charter school's current and projected financial position.
(4) The district or charter school shall reimburse the State for all salary and related costs of the Financial Recovery Team.
(5) Upon the recommendation of the Secretary that a school district or charter school is no longer in financial distress as defined in this section, the Director, with the consent of the Controller General, may elect to remove the members of the Financial Recovery Team.