Illinois Compiled Statutes
105 ILCS 5/ - School Code.
Article 1B - School District Financial Oversight Panel And Emergency Financial Assistance

(105 ILCS 5/Art. 1B heading)

 
(105 ILCS 5/1B-1) (from Ch. 122, par. 1B-1)
Sec. 1B-1.
Short title.
This Article may be cited as the School
District Financial Oversight Panel and Emergency Financial Assistance Law.

(Source: P.A. 88-618, eff. 9-9-94.)
 
(105 ILCS 5/1B-2) (from Ch. 122, par. 1B-2)
Sec. 1B-2.
Findings and purpose.
(a) The General Assembly finds:
(b) It is the purpose of this Article to provide
financial oversight panels and emergency State financial assistance to
school districts and
establish a secure financial basis for their continued
existence. The intention of the General Assembly, in
enacting this legislation, is
to establish procedures, provide powers and impose
restrictions to assure the financial and educational
integrity of the public schools while leaving principal
responsibility for the educational policies of the public
schools to the boards of education within the State,
consistent with the requirements for satisfying the public
policy and purpose herein set forth.

(Source: P.A. 88-618, eff. 9-9-94.)
 
(105 ILCS 5/1B-3) (from Ch. 122, par. 1B-3)
Sec. 1B-3.
Definitions.
As used in this Article:
(a) "Financial Oversight Panel" or "Panel" means the
Financial Oversight Panel created under Section 1B-4;
(b) "Board" means a local board of education;
(c) "Budget" means the annual budget of the board
required under Section 17-1 and is subject to the authority
of the Panel as provided in this Article;
(d) "Chairman" means the chairman of the Panel
appointed pursuant to Section 1B-5 of this Article;
(e) "District" means any school district of this State
not subject to the provisions of Article 34;
(f) "Financial plan" means the financial plan of the
board required to be developed pursuant to this Article;
(g) "Fiscal year" means the fiscal year of the board;
(h) "School year" means the school year of the board;
(i) "State Board" means the Illinois State Board of
Education;
(j) "State Superintendent" means the State
Superintendent of Education.

(Source: P.A. 88-618, eff. 9-9-94.)
 
(105 ILCS 5/1B-4) (from Ch. 122, par. 1B-4)
Sec. 1B-4.

Establishment of Emergency Financial
Assistance and Financial Oversight Panel. When approved by the State Board under this
Article there is established a body both corporate and
politic to be known as the "(Name of School District)
Financial Oversight Panel" which, in such name, shall
exercise all authority vested in such Panels by this
Article.
Upon the affirmative vote of not less than a majority of its
full membership, a local board of education of a school district that
has been certified to be in financial difficulty under
Section 1A-8 may petition the State Board of Education for
emergency financial assistance and the establishment of a
Financial Oversight Panel for the district as provided under
this Article. In addition, the State Superintendent of Education may
petition the State Board of Education for the establishment of a Financial
Oversight Panel, with or without emergency financial assistance, for any
district that has failed to comply with its financial plan and has had the plan
rescinded by the State Board as provided in Section 1A-8. No petition for
emergency financial
assistance shall be approved by the State Board unless there
is also established a Financial Oversight Panel.
In determining whether to allow the petition the State
Board shall consider the following factors
among others that it deems relevant:
(a) whether the petition is in the best educational
interests of the pupils of the district;
(b) whether the petition is in the near and long term
best financial interests of the district;
(c) whether the district has sufficient pupil
enrollment and assessed valuation to provide and maintain
recognized schools;
(d) whether the petition is in the best interests of
the other schools of the area and the educational welfare of
all of the pupils therein; and
(e) whether the board of education has complied with
the requirements of Section 1A-8.
The State Board may vote to either grant or deny the
petition based upon the recommendation of the State
Superintendent of Education and any other testimony or
documentary evidence the State Board deems relevant. The
decision of the State Board whether to grant or deny the
petition shall be final. If an approved petition requests
emergency financial assistance, the
school district shall be eligible for emergency State
financial assistance, subject to the other provisions of
this Article.

(Source: P.A. 88-618, eff. 9-9-94.)
 
(105 ILCS 5/1B-5) (from Ch. 122, par. 1B-5)
Sec. 1B-5.
When a petition for emergency financial
assistance for a school district is allowed by the State
Board under Section 1B-4, the State Superintendent
shall within 10 days thereafter appoint 3 members
to serve at the State Superintendent's pleasure on a
Financial Oversight Panel for the district. The State
Superintendent shall designate one of the members of the
Panel to serve as its Chairman. In the event of vacancy or
resignation the State Superintendent shall appoint a
successor within 10 days of receiving notice thereof.
Members of the Panel shall be selected primarily on the
basis of their experience and education in financial
management, with consideration given to persons
knowledgeable in education finance. A member of the Panel
may not be a board member or employee of the district for
which the Panel is constituted, nor may a member have a
direct financial interest in that district.
Panel members shall serve without compensation, but may
be reimbursed for travel and other necessary expenses
incurred in the performance of their official duties by the
State Board. The amount reimbursed Panel
members for their expenses shall be charged to the school
district as part of any emergency financial assistance and
incorporated as a part of the terms and conditions for
repayment of such assistance or shall be deducted from the district's general
State aid or evidence-based funding as provided in Section 1B-8.
The first meeting of the Panel shall be held at the
call of the Chairman. The Panel may elect such other
officers as it deems appropriate. The Panel shall prescribe
the times and places for its meetings and the manner in
which regular and special meetings may be called, and shall
comply with the Open Meetings Act.
Two members of the Panel shall constitute a quorum, and
the affirmative vote of 2 members shall be necessary for any
decision or action to be taken by the Panel.
The Panel and the State Superintendent
shall cooperate with each other in the exercise of their
respective powers. The Panel shall report not later than
September 1 annually to the State Board and the State
Superintendent with respect to its activities and the
condition of the school district for the previous fiscal
year.
Any Financial Oversight Panel established under this
Article shall remain in existence for not less than 3 years
nor more than 10 years from the date the State Board grants
the petition under Section 1B-4. If after 3 years the
school district has repaid all of its obligations resulting
from emergency State financial assistance provided under
this Article and has improved its financial situation, the board of
education may, not more
frequently than once in any 12 month period, petition the
State Board to dissolve the Financial Oversight Panel,
terminate the oversight responsibility, and remove the
district's certification under Section 1A-8 as a district in
financial difficulty. In acting on such a petition the
State Board shall give additional weight to the
recommendations of the State Superintendent and the
Financial Oversight Panel.

(Source: P.A. 100-465, eff. 8-31-17.)
 
(105 ILCS 5/1B-6) (from Ch. 122, par. 1B-6)
Sec. 1B-6. General powers. The purpose of the Financial Oversight Panel
shall be to exercise financial control over the board of education, and, when
approved by the State Board and the State Superintendent of Education, to
furnish financial assistance so that the board can provide public education
within the board's jurisdiction while permitting the board to meet its
obligations to its creditors and the holders of its notes and bonds.
Except as expressly limited by this Article, the Panel shall have all
powers necessary to meet its responsibilities and to carry out its purposes
and the purposes of this Article, including, but not limited to, the following
powers:
(Source: P.A. 102-894, eff. 5-20-22.)
 
(105 ILCS 5/1B-7) (from Ch. 122, par. 1B-7)
Sec. 1B-7. Financial Administrator; powers and
duties. The Financial Administrator appointed by the
Financial Oversight Panel shall serve as the Panel's chief
executive officer. The Financial Administrator shall
exercise the powers and duties required by the Panel,
including but not limited to the following:
(Source: P.A. 100-465, eff. 8-31-17.)
 
(105 ILCS 5/1B-7.5)
Sec. 1B-7.5. Hiring of a district superintendent or chief executive officer.
(a) Upon expiration of the contract of the school district's superintendent who is serving at the time the Financial Oversight Panel is established, a school district under the authority of a Financial Oversight Panel, after consultation with the Financial Oversight Panel, shall have the authority to appoint a district superintendent with a type 75 certificate or a chief executive officer who has the skills of school operations and school finance and who shall have the ultimate responsibility for implementing the policies, procedures, directives, and decisions of the school board and the Financial Oversight Panel.
(b) The chief executive officer shall have the authority to determine the agenda and order of business at school board meetings, as needed in order to carry forward and implement the objectives and priorities of the school board and Financial Oversight Panel in the administration and management of the school district.
(c) The chief executive officer shall have all of the powers and duties of a school district superintendent under this Code and such other duties as may be assigned by the school board and Financial Oversight Panel, in accordance with this Code. The district shall not thereafter employ a superintendent during the period that a chief executive officer is serving the district.
(d) The Financial Oversight Panel shall have the final approval of the superintendent or chief executive officer position under this Section as well as the person, based upon his or her skills to fulfill the position.

(Source: P.A. 96-401, eff. 8-13-09.)
 
(105 ILCS 5/1B-7.10)
Sec. 1B-7.10. Hiring of a chief fiscal officer.
(a) In lieu of a Financial Oversight Panel Financial Administrator under Section 1B-7 of this Code, a school district under the authority of a Financial Oversight Panel, after consultation with the Financial Oversight Panel, may appoint a chief fiscal officer who, under the direction of the school board and Financial Oversight Panel, shall have the powers and duties of the district's chief school business official and any other duties regarding budgeting, accounting, and other financial matters that are assigned by the school board or Financial Oversight Panel in accordance with this Code. The district may not employ a chief school business official during the period that the chief fiscal officer is serving in the district. The chief fiscal officer may but is not required to hold an educator license with a chief school business official endorsement issued under Article 21B of this Code.
(b) The Financial Oversight Panel shall have the final approval of the chief fiscal officer position under this Section as well as the person, based upon his or her skills to fulfill the position.

(Source: P.A. 102-894, eff. 5-20-22.)
 
(105 ILCS 5/1B-8) (from Ch. 122, par. 1B-8)
Sec. 1B-8. There is created in the State Treasury a
special fund to be known as the School District Emergency
Financial Assistance Fund (the "Fund"). The School District Emergency
Financial Assistance Fund shall consist of appropriations, loan repayments, grants from the
federal government, and donations from any public or private source. Moneys in
the Fund
may be appropriated only to the Illinois Finance Authority and
the State Board for
those purposes authorized under this Article and Article 1H of this Code.
The appropriation may be
allocated and expended by the State Board for contractual services to provide technical assistance or consultation to school districts to assess their financial condition and to Financial Oversight Panels that petition for emergency financial assistance grants. The Illinois Finance Authority may provide

loans to school districts which are the subject of an
approved petition for emergency financial assistance under
Section 1B-4 or 1H-65 of this Code. Neither the State Board of Education nor the Illinois Finance Authority may collect any fees for providing these services.
From the amount allocated to each such school
district under this Article the State Board shall identify a sum sufficient to
cover all approved costs of the Financial Oversight Panel
established for the respective school district. If the State Board and State
Superintendent of Education have not approved emergency financial assistance in
conjunction with the appointment of a Financial Oversight Panel, the Panel's
approved costs shall be paid from deductions from the district's general State
aid or evidence-based funding.
The Financial Oversight Panel may prepare and file
with the State Superintendent a proposal for emergency
financial assistance for the school district and for its

operations budget. No expenditures from the Fund shall be
authorized by the State Superintendent until he or she has approved
the request of the Panel, either as submitted or in such
lesser amount determined by the State Superintendent.
The maximum amount of an emergency financial assistance loan
which may be allocated to any school district under this
Article, including moneys necessary for the operations of
the Panel, shall not exceed $4,000 times the number of pupils
enrolled in the school district during the school year
ending June 30 prior to the date of approval by the State
Board of the petition for emergency financial assistance, as
certified to the local board and the Panel by the State
Superintendent.
An emergency financial assistance grant shall not exceed $1,000 times the
number of such pupils. A district may receive both a loan and a grant.
The payment of an emergency State financial assistance grant or loan
shall be subject to appropriation by the General Assembly. Payment of the emergency State financial assistance loan is subject to the applicable provisions of the Illinois Finance Authority Act.
Emergency State financial assistance allocated and paid to a school
district under this Article may be applied to any fund or funds from which
the local board of education of that district is authorized to make
expenditures by law.
Any emergency financial assistance grant proposed by the
Financial Oversight Panel and approved by the State
Superintendent may be paid in its entirety during the
initial year of the Panel's existence or spread in equal or
declining amounts over a period of years not to exceed the
period of the Panel's existence. An emergency financial assistance loan proposed by the Financial Oversight Panel and approved by the Illinois Finance Authority may be paid in its entirety during the initial year of the Panel's existence or spread in equal or declining amounts over a period of years not to exceed the period of the Panel's existence. All
loans made by the Illinois Finance Authority for a
school district shall be required to be repaid, with simple interest over
the term of the loan at a rate equal to 50% of the one-year Constant Maturity
Treasury (CMT) yield as last published by the Board of Governors of the Federal
Reserve System before the date on which the district's loan is
approved
by the Illinois Finance Authority, not later than the
date the
Financial Oversight Panel ceases to exist. The Panel shall
establish and the Illinois Finance Authority shall
approve the terms and conditions, including the schedule, of
repayments. The schedule shall provide for repayments
commencing July 1 of each year or upon each fiscal year's receipt of moneys from a tax levy for emergency financial assistance. Repayment shall be incorporated into the
annual budget of the school district and may be made from any fund or funds
of the district in which there are moneys available. An emergency financial assistance loan to the Panel or district shall not be considered part of the calculation of a district's debt for purposes of the limitation specified in Section 19-1 of this Code. Default on repayment is subject to the Illinois Grant Funds Recovery Act. When moneys are repaid
as provided herein they shall not be made available to the local board for
further use as emergency financial assistance under this Article at any
time thereafter. All repayments required to be made by a school district
shall be received by the State Board and deposited in the School District
Emergency Financial Assistance Fund.
In establishing the terms and conditions for the
repayment obligation of the school district the Panel shall
annually determine whether a separate local property tax levy is
required. The board of any school district with a tax rate
for educational purposes for the prior year of less than
120% of the maximum rate for educational purposes authorized
by Section 17-2 shall provide for a separate
tax levy for emergency financial assistance repayment
purposes. Such tax levy shall not be subject to referendum approval. The
amount of the levy shall be equal to the
amount necessary to meet the annual repayment obligations of
the district as established by the Panel, or 20% of the
amount levied for educational purposes for the prior year,
whichever is less. However, no district shall be
required to levy the tax if the district's operating tax
rate as determined under Section
18-8, 18-8.05, or 18-8.15 exceeds 200% of the district's tax rate for educational
purposes for the prior year.

(Source: P.A. 102-894, eff. 5-20-22; 102-1071, eff. 6-10-22.)
 
(105 ILCS 5/1B-9) (from Ch. 122, par. 1B-9)
Sec. 1B-9.

Assistance by State agencies, units of
local government or school districts. The local board shall
render such services to, and permit the use of its
facilities and resources by, the Financial Oversight Panel
at no charge as may be requested by the Panel. Any State
agency, unit of local government, or school district may,
within its respective lawful powers and duties, render such
services to the Panel as may be requested by the Panel.
Upon request of the Panel any such agency, unit of local
government or school district is hereby authorized and
empowered to loan to the Panel such officers and employees
as the Panel may deem necessary and request in carrying out
its powers and duties. Officers and employees so
transferred shall not lose or forfeit their employment
status or rights.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-10) (from Ch. 122, par. 1B-10)
Sec. 1B-10.
Approval of Financial Plan, Budget and Contracts.
In
carrying out the purposes of this Article, the Panel shall
have the power to approve or
to reject the financial plans, budgets and contracts of the
board; provided, however, that the Panel shall have no power
to impair any existing contract or obligation of the board.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-11) (from Ch. 122, par. 1B-11)
Sec. 1B-11.
Balanced Budget.
The local board's budget
for each fiscal year shall be balanced in accordance with an
accounting system and procedure to be prescribed by the
Panel.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-12) (from Ch. 122, par. 1B-12)
Sec. 1B-12.
Financial Plans.
The local board shall
develop, adopt and submit to the Panel for approval an
initial financial plan with respect to the remaining portion
of the current fiscal year and for the 2 succeeding fiscal
years. The board shall develop and adopt subsequent
financial plans as directed by the Panel. The financial
plans shall supersede any financial plan developed pursuant
to Section 1A-8 of this Act. The Panel shall require that
each financial plan cover a period of at least 3 fiscal
years. After adoption by the board, the board shall submit
each plan to the Panel for its approval not later than the
date required by the Panel. The Panel shall approve or
reject the financial plan within 30 days of its receipt. No
financial plan shall have force or effect without approval
of the Panel. Each financial plan shall be developed,
submitted, approved and monitored in accordance with the
following procedures:
(a) The board shall determine and submit to the Panel,
at a time and in a manner prescribed by the Panel, estimates
of revenues available to the board during the period for
which the financial plan is to be in effect. The Panel
shall approve, reject or amend the revenue estimates. In
the event the board fails, for any reason, to submit to the
Panel estimates of revenue as required by this paragraph,
the Panel may prepare such estimates. The financial plan
submitted by the board shall be based upon revenue estimates
approved or prepared by the Panel. As soon as practicable
following the establishment of the Panel, the president of
the board shall, at the request of the Chairman of the
Panel, make available to the Panel copies of the audited
financial statements and of the books and records of account
of the board for the preceding 5 fiscal years of the board.
(b) Each financial plan for each fiscal year or part
thereof to which it relates, shall contain (1) a description
of revenues and expenditures, provision for debt service,
cash resources and uses, capital improvements, and a
building utilization component requiring maximum efficient
use of all classrooms and buildings, in such manner and
detail as the Panel shall prescribe, (2) a description of
the means by which the budget will be brought into balance,
and (3) such other matters that the Panel, in its
discretion, requires.
For Panels established under Section 1B-4 for a
district that had its financial plan rescinded by the State Board for
violating that plan as
provided in Section 1A-8, the financial plan required under this Section shall
also include the
staffing plan required pursuant to subsection (e) of Section 1B-22, provisions
for addressing
findings or
violations identified by the Inspector General or the school district audit,
provisions for
implementing directives of the Panel, and the plan of action to be followed by
the district to
maintain long-term financial stability, provide for
transition of the Panel's
authority, and analyze the need for additional State funding for the
district.
The initial financial plan shall also
include a description of the means by which any outstanding
short-term indebtedness shall be paid or refunded by the
board. The Panel may prescribe any reasonable time,
standards, procedures or forms for preparation and
submission of the financial plan.
(c) The Panel shall approve the initial and each
subsequent financial plan if, in its judgment, the plan is
complete, is reasonably capable of being achieved, and meets
the requirements set forth in this Article. Otherwise, the
Panel shall reject the financial plan. In the event of
rejection, the Panel may prescribe a procedure and standards
for revision of the financial plan by the board.
(d) The board shall report to the Panel, at such times
and in such manner as the Panel may direct, concerning the
board's compliance with each financial plan. The Panel may
review the board's operations, obtain budgetary data and
financial statements, require the board to produce reports,
and have access to any other information in the possession
of the board that it deems relevant. The Panel may issue
recommendations or directives within its powers to the board
to assure compliance with the financial plan. The board
shall produce such budgetary data, financial statements,
reports and other information and comply with such
directives.
(e) After approval of each financial plan, the board
shall regularly reexamine the revenue and expenditure
estimates on which it was based and revise them as
necessary. The board shall promptly notify the Panel of any
material change in the revenue or expenditure estimates in
the financial plan. The board may submit to the Panel, or
the Panel may require the board to submit, modified
financial plans based upon revised revenue or expenditure
estimates or for any other good reason. The Panel shall
approve or reject each modified financial plan.

(Source: P.A. 89-572, eff. 7-30-96.)
 
(105 ILCS 5/1B-13) (from Ch. 122, par. 1B-13)
Sec. 1B-13.
Budgets.
The board shall develop, adopt
and submit to the Panel for approval by the Panel the annual
budget for each fiscal year required by Section 17-1. After
adoption by the board, the board shall submit each budget to
the Panel for its approval not later than 30 days prior to
the commencement of the fiscal year to which the budget
relates. The Panel shall approve or reject the budget
within 30 days of its receipt from the board. No budget
shall have force or effect without approval of the Panel.
Each budget shall be developed, submitted, approved and
monitored in accordance with the following procedures:
(a) Each budget submitted by the board shall be based
upon revenue estimates approved or prepared by the Panel.
(b) Each budget shall be consistent with the budgetary
structure required by the Panel and contain such information
and detail as may be prescribed by the Panel. The Panel may
also prescribe any reasonable time, standards, procedures or
forms for preparation and submission of the budget. Any
deficit for the prior fiscal year and for any fiscal year
thereafter shall be included as a current expense item for
the succeeding fiscal year.
(c) The Panel shall approve each budget if, in its
judgment, the budget is complete, is reasonably capable of
being achieved, will meet the requirements set forth in this
Article, and will be consistent with the financial plan in
effect. Otherwise, the Panel shall reject the budget. In
the event of rejection, the Panel may prescribe a procedure
and standards for revision of the budget by the board. In
the event the local board fails to adopt a budget approved
by the Panel prior to the end of the first quarter of the
fiscal year as required by Section 17-1, the offices of all
local board members shall be deemed vacant by operation of
law.
(d) The board shall report to the Panel and the
Financial Administrator at such times and in such manner as
the Panel may direct, concerning the board's compliance with
each budget. The Panel may review the board's operations,
obtain budgetary data and financial statements, require the
board to produce reports, and have access to any other
information in the possession of the board that the Panel
deems relevant. The Panel may issue recommendations or
directives within its powers to the board to assure
compliance with the budget. The board shall produce such
budgetary data, financial statements, reports and other
information and comply with such directives.
(e) After approval of each budget, the board shall
promptly notify the Panel of any material change in the
revenue or expenditure estimates in the budget. The board
may submit to the Panel, or the Panel may require the board
to submit, an amended budget. The Panel shall approve or
reject each amended budget pursuant to this Section.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-14) (from Ch. 122, par. 1B-14)
Sec. 1B-14.
Contracts and Other Obligations.
(a) No contract or other
obligation shall be entered into by the board unless it is
consistent with the financial plan and budget in effect,
including any employment contract or collective bargaining
agreement.
(b) The Panel may identify categories and types of
contracts and other obligations that shall be subject to
approval by the Panel and the procedure for submitting
contracts for approval. Each contract or other obligation
that is entered into by the board which requires approval by
the Panel shall contain a provision stating that it shall
not become legally binding on the board unless and until it
has received such approval. No contract or other obligation
that requires the approval of the Panel shall be legally
binding on the board unless and until it has received such
approval.
(c) The board shall submit to the Panel a copy of any
contract or other obligation for which the approval of the
Panel is required, along with a cost analysis and such other
information as the Panel may require. The Panel may
prescribe any reasonable time, standards, procedures or
forms for submission of the contract or other obligation.
(d) The Panel shall approve the contract or obligation
if, in its judgment, the information required to be
submitted is complete and the contract or other obligation
is consistent with the budget and financial plan in effect.
Otherwise, the Panel shall reject the contract or other
obligation. Contracts or other obligations not rejected
within 30 days after submission to the Panel shall be
considered approved. However, the Panel shall
have an additional 30 days to approve or reject the contract
or other obligation if it so advises the board within the
initial 30 day period.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-15) (from Ch. 122, par. 1B-15)
Sec. 1B-15.
Expenditures.
The board shall meet its
debt service obligations as they become due. No other
expenditure shall be made by the board unless it is
consistent with the financial plan and budget in effect.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-16) (from Ch. 122, par. 1B-16)
Sec. 1B-16.
Cash accounts and bank accounts.
(a) The
Panel shall require the board or any officer of the board,
including the board's treasurer or any person acting as the
board's official or ex officio treasurer, to establish and
maintain separate cash accounts and separate bank accounts
in accordance with such standards and procedures as the
Panel may prescribe.
(b) The Panel shall have the power to assume exclusive
administration of the cash accounts and bank accounts of the
board, to establish and maintain whatever new cash accounts
and bank accounts it may deem appropriate, and to withdraw
funds from such accounts for the lawful expenditures of the
board.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-17) (from Ch. 122, par. 1B-17)
Sec. 1B-17.
Hearings.
To the extent feasible, the
Financial Oversight Panel shall provide for and encourage
participation by the public in the development and review of
financial policy. The Panel shall hold public hearings as
it may deem appropriate to the performance of any of its
functions. The Panel may designate one or more of its
members or the Financial Administrator to preside over any
hearing.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-18) (from Ch. 122, par. 1B-18)
Sec. 1B-18.

Limitations of actions after abolition;
indemnification. (a) Termination of the Financial
Oversight Panel shall bar any remedy available against the
Panel, its members, employees, or agents, for any right or
claim existing, or any liability incurred, prior to such
abolition unless the action or other proceeding thereon is
commenced prior to the expiration of 2 years after the date
of such termination.
(b) The Panel may indemnify any member, officer,
employee, or agent who was or is a party, or is threatened
to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that
he was a member, officer, employee or agent of the Panel,
against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best
interests of the Panel and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not,
of itself, create a presumption that the person did not act
in good faith in a manner which he reasonably believed to be
in or not opposed to the best interests of the Panel, and,
with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
To the extent that a member, officer, employee or agent
of the Panel has been successful, on the merits or
otherwise, in the defense of any such action, suit or
proceeding referred to in this subsection or in defense of
any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith. Any
such indemnification shall be made by the Panel only as
authorized in the specific case, upon a determination that
indemnification of the member, officer, employee or agent is
proper in the circumstances because he has met the
applicable standard of conduct. The determination shall be
made by the Panel by a majority vote of a quorum consisting
of members who are not parties to such action, suit or
proceeding, or if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested members so directs,
by independent legal counsel in a written opinion.
Reasonable expenses incurred in defending an action,
suit or proceeding shall be paid by the Panel in advance of
the final disposition of such action, suit or proceeding, as
authorized by the Panel in the specific case, upon receipt
of an undertaking by or on behalf of the member, officer,
employee or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be
indemnified by the Panel as authorized in this Section.
Any member, officer, employee or agent against whom any
action, suit or proceeding is brought may employ his or her
own attorney to appear on his or her behalf.
The right to indemnification accorded by this Section
shall not limit any other right to indemnification to which
the member, officer, employee or agent may be entitled. Any
rights hereunder shall inure to the benefit of the heirs,
executors and administrators of any member, officer,
employee or agent of the Panel.
The Panel may purchase and maintain insurance on behalf
of any person who is or was a member, officer, employee or
agent of the Panel against any liability asserted against
him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the Panel would have
the power to indemnify him against such liability under the
provisions of this Section.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-19) (from Ch. 122, par. 1B-19)
Sec. 1B-19.
Abolition of Panel.
The Financial
Oversight Panel shall be abolished 10 years after approval
of the petition providing for its creation, or at such
earlier date determined by the State Board.
Upon the abolition of the Panel, all of its rights and
property shall pass to and be vested in the State.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-20) (from Ch. 122, par. 1B-20)
Sec. 1B-20.
Sanctions.
(a) No member, officer,
employee, or agent of the board shall commit the board to
any contract or other obligation or incur any liability on
behalf of the board for any purpose if the amount of such
contract, obligation or liability is in excess of the amount
authorized for that purpose then available under the
financial plan and budget then in effect.
(b) No member, officer, employee or agent of the board
shall commit the board to any contract or other obligation
on behalf of the board for the payment of money for any
purpose required to be approved by the Financial Oversight
Panel unless such contract or other obligation has been
approved by the Panel.
(c) No member, officer, employee or agent of the board
shall take any action in violation of any valid order of the
Panel or shall fail or refuse to take any action required by
any such order or shall prepare, present, or certify any
information (including any projections or estimates) or
report for the Panel or any of its agents that is false or
misleading, or, upon learning that any such information is
false or misleading, shall fail promptly to advise the Panel
or its agents.
(d) In addition to any penalty or liability under any
other law, any member, officer, employee or agent of the
board who violates subsection (a), (b), or (c) of this
Section shall be subject to appropriate administrative
discipline, including, if warranted, suspension from duty
without pay, removal from office, or termination of
employment.

(Source: P.A. 86-954.)
 
(105 ILCS 5/1B-21)
Sec. 1B-21. (Repealed).


(Source: P.A. 94-1019, eff. 7-10-06. Repealed by P.A. 94-1105, eff. 6-1-07.)
 
(105 ILCS 5/1B-22)
Sec. 1B-22.
Additional Powers of the Panel.
For Panels established under
Section 1B-4 for a
district which had its financial plan rescinded by the State Board for
violating that plan as
provided in Section 1A-8, the Panel shall have the following additional powers:
(a) As necessary to carry out its purposes when district resources are not
readily available or appropriate for use by the Panel, the Panel may make and
execute contracts, leases, subleases and all other instruments or agreements
necessary or convenient for the exercise of the powers and functions granted by
this Article.
(b) As necessary to carry out its purposes when district resources are not
readily available or appropriate for use by the Panel, the Panel may purchase
personal property necessary or convenient for its purposes; mortgage, pledge
or otherwise grant security interests in such properties;
and convey to the district such of its property as, in the
judgment of the Panel, is no longer necessary for its purposes.
(c) As necessary to carry out its purposes when district resources are not
readily available or appropriate for use by the Panel, the Panel may appoint
officers, agents, and employees of the Panel, define their duties and
qualifications, and fix their compensation and employee benefits.
(d) In order to investigate allegations of or incidents of waste, fraud, or
financial mismanagement which the Board is unable or unwilling to properly
investigate as requested by the Panel, the Panel may appoint an Inspector
General who shall have the authority to conduct investigations into such
allegations or incidents.
The Inspector General shall make recommendations
to the Panel about
its investigations. The Inspector General shall be independent of the
operations of the Panel and
the Board and perform other duties requested by the Panel. The Inspector
General shall have
access to all information and personnel necessary to perform the duties of the
office. If the
Inspector General determines that a possible criminal act has been committed or
that special
expertise is required in the investigation, he shall immediately notify the
State's Attorney in the
county in which the district is located. All investigations conducted by the
Inspector General
shall be conducted in a manner that ensures the preservation of evidence for
use in criminal
prosecutions. At all times the Inspector General shall be granted access to
any building or
facility that is owned, operated, or leased by the Panel or the Board. The
Inspector General shall
have the power to subpoena witnesses and compel the production of books and
papers pertinent
to an investigation authorized by this Code. Any person who (1) fails to
appear in response to a
subpoena; (2) fails to answer any question; (3) fails to produce any books or
papers pertinent to an
investigation under this Code; or (4) knowingly gives false testimony during an
investigation
under this Code is guilty of a Class A misdemeanor. The Inspector General
shall provide to the
Panel and the State Board of Education a summary of reports and investigations
made under this
Section for the previous fiscal year no later than January 1 of each year. The
summaries shall
detail the final disposition of those recommendations. The summaries shall not
contain any
confidential or identifying information concerning the subjects of the reports
and investigations.
The summaries shall also include detailed recommended administrative actions
and matters for
consideration by the State Board of Education or the General Assembly.
(e) No hiring or appointment of any person in any position by the Board, the
superintendent, or any other officer or employee of the Board shall be made or
entered into unless it
is consistent with the Financial Plan and Budget in effect and the staffing
plan approved by the
Panel under this Section. The hiring or appointment of any person shall not be
binding on the
Board unless and until it is in compliance with this Section. The Board shall
submit to the Panel
for approval by the Panel a staffing plan for the upcoming school year at the
same time as the
submission of the Budget, except that the staffing plan for the fiscal year
ending in 1997 shall be
submitted to the Panel within 90 days after the effective date of this
amendatory Act of 1996.
The staffing plan shall be accompanied by a cost analysis and such other
information as the Panel
may require. The Panel may
prescribe standards, procedures, and forms for submission of the staffing plan.
The Panel shall approve the staffing plan if the information
required to be
submitted is complete and the staffing plan is consistent with the Budget and
Financial Plan in
effect. Otherwise, the Panel shall reject the staffing plan. In the event of
rejection, the Panel
shall prescribe a procedure and standards for revision of the staffing plan.
The Panel shall act on
the staffing plan at the same time as the approval of the Budget, except that
the staffing plan for
the fiscal year ending in 1997 shall be acted upon within 60 days of the
submission of the
staffing plan by the Board. The Board shall report to the Panel, at such times
and in such manner
as the Panel may direct, concerning the Board's compliance with each staffing
plan. The Panel
may review the Board's operations, obtaining budgetary data and financial
statements, may
require the Board to produce reports, and shall have access to any other
information in the
possession of the Board that it deems relevant. The Panel may issue directives
to the Board to
assure compliance with the staffing plan, including the issuance of reduction
in force notices,
non-renewal of employment contracts, or any other notices or actions required
by
contract or law.
The Board shall produce such budgetary data, financial statements, reports, and
other
information and shall comply with such directives. After approval of each
staffing plan, the
Board shall regularly reexamine the estimates on which it was based and revise
them as
necessary. The Board shall promptly notify the Panel of any material change in
the estimates in
the staffing plan. The Board may submit to the Panel, or the Panel may require
the Board to
submit, modifications to the staffing plan based upon revised revenue or
expenditure estimates or
for any other good reason. The Panel shall approve or reject each modified
staffing plan within
60 days of its submission in a manner similar to the provisions of this
subsection for the approval
or rejection of the initial staffing plan.
(f) The Panel shall examine the business records and audit the accounts of
the
Board or
require that the Board examine its business records and audit its accounts at
such time and in
such manner as the Panel may prescribe. The Board shall appoint a certified
public accountant
annually, approved by the Panel, to audit its financial statements. The audit
conducted pursuant
to this paragraph shall be in lieu of the audit that the Board is required to
undertake pursuant to
Section 3-7.
(g) The Panel shall initiate and direct financial management
assessments
and similar analyses of the operations of the Board as may, in the judgment of
the Panel, assure
sound and efficient financial management of the Board. Upon the completion of
these
assessments, the Panel shall give directives to the Board regarding
improvements and changes
that derive from these assessments, which the Board shall implement. In
conjunction with its
budgetary submission to the Panel for each fiscal year, the Board shall
demonstrate to the
satisfaction of the Panel that the directives of the Panel have been
implemented in whole or in
part or, in the alternative, are not capable of being implemented. In
consideration of whether to
approve or reject the budget for a fiscal year, the Panel shall adjudge whether
the Board has fully
considered and responsibly proposed implementation of the Panel's directives.
(h) The Panel shall initiate and direct a management audit of the Board at
least once
every 2 years. The audit shall review the personnel, organization, contracts,
leases, and physical
properties of the Board to determine whether the Board is managing and
utilizing its resources in
an economical and efficient manner. The audit shall determine the causes of
any inefficiencies
or uneconomical practices, including inadequacies in internal and
administrative procedures,
organizational structure, uses of resources, utilization of real property,
allocation of personnel,
purchasing policies, and equipment.
(i) In the event that the Board refuses or fails to follow a directive of
the
Panel to issue
notices of non-renewal of contracts, to issue notices of reduction in force to
employees, to issue
requests for bids or proposals, or to obtain financial or other information
that the Panel finds necessary for the implementation of
its responsibilities
under this Article, the Panel may take such action in the name of the district,
and such action shall
be binding the same as if the action had been taken by the Board. The powers
established by this
paragraph do not authorize the Panel to enter into contracts in the name of the
Board.
(j) The Panel shall meet with the Board or its designees in closed session
prior to the
Board commencing any collective bargaining negotiations to discuss the
financial issues relevant
to the bargaining and for the purpose of the Panel approving the budget
limitations for the
potential collective bargaining agreement. The Board shall not make or
consider any proposal
which does not comply with the collective bargaining budget approved by the
Panel. The Board
shall keep the Panel apprised as to the status of the bargaining. The Board
shall present any
proposed change in the approved collective bargaining budget to the Panel in
closed session for
approval. Prior to the Board taking a final vote on any tentative agreement
approved by the
employee organization, the Board shall discuss the tentative agreement with the
Panel in closed
session. Upon final approval of a collective bargaining agreement by both the
Board and the
employee organization, the Board shall submit the final collective bargaining
agreement to the
Panel for approval. At the same time that the Board submits the final
agreement to the Panel,
the Board shall notify the employee organization that the final agreement has
been submitted and
the date of the Panel meeting at which the final agreement will be considered.
The employee
organization shall be provided an opportunity to discuss the final agreement
with the Panel prior
to the Panel taking action on the agreement. No collective bargaining
agreement shall be binding
upon the district unless the Board has followed the requirements of this
paragraph and the final
agreement has been approved by the Panel.
(k) The budget of the Panel or any revisions to the budget, including any
costs
to the
Panel associated with the appointment of an Inspector General, shall be
approved by the State
Superintendent upon request of the Panel and after opportunity for response by
the Board.

(Source: P.A. 89-572, eff. 7-30-96.)
 
(105 ILCS 5/1B-25)
Sec. 1B-25. Establishment prohibited. No school district may have a Financial Oversight Panel established pursuant to this Article after Article 1H of this Code is established.

(Source: P.A. 97-429, eff. 8-16-11.)

Structure Illinois Compiled Statutes