HB 1164: Education; require State Board of Education to appoint an audit committee

Georgia currently relies on the Department of Audits and Accounts to flag local school systems that show financial irregularities or budget deficits, but the process for tracking and responding to those problems has been loosely defined. This bill requires the State Board of Education to create a standing audit committee that meets at least six times a year to review the financial health of school districts, charter schools, and completion special schools, with the state auditor and a State Charter Schools Commission representative attending. The bill also builds a new four tier fiscal monitoring system (Tier 1 Fiscally Sound through Tier 4 Critical Fiscal Emergency) run by the Department of Audits and Accounts, replacing the old approach that judged risk mainly by how many years a district had reported irregularities. Districts and charter schools must certify annually that they are audit ready and current on payments to retirement systems and the Department of Labor, or be automatically labeled high risk. High risk districts face contract limits for superintendents, mandatory monthly financial reporting, public notice requirements, and possible unilateral State Board termination of flexibility contracts and charters. The Office of Student Achievement gains expanded audit powers, including reviewing waiver use. The law takes effect July 1, 2026, and the full monitoring program must be running by the 2028-2029 school year.

• Requires the State Board of Education to appoint an audit committee of board members that meets at least six times a year to review school system finances.
• Creates a four tier fiscal risk framework (Fiscally Sound, Fiscal Watch, Fiscal Distress, Critical Fiscal Emergency) run by the Department of Audits and Accounts to replace the old irregularity-based risk labels.
• Requires local school systems and state charter schools to certify annually that they are audit ready and not delinquent on payments to retirement systems, the state health plan, or the Department of Labor, or be automatically designated high risk.
• Lets the State Board of Education unilaterally amend or terminate flexibility contracts and charters if a district or charter school is designated high risk by the Department of Audits and Accounts.
• Limits a local school superintendent's contract to 12 months if their district is designated high risk, instead of the normal one to three year term.
• Expands the Office of Student Achievement's authority to conduct performance audits, including audits of how schools and districts use waivers from state requirements.

Local school district superintendents and school board members, state charter school administrators and governing boards, the Department of Audits and Accounts, the State Board of Education, the Office of Student Achievement, the State Charter Schools Commission, and taxpayers and parents in districts flagged as financially at risk.

Districts and charter schools that fall behind on required payments or audit readiness would face closer state oversight, public financial disclosure, shorter superintendent contracts, and the possibility that the state cancels their flexibility contracts or charters. This changes how quickly and visibly financial trouble in a school system gets addressed.

• Section 1 requires the State Board of Education to appoint an audit committee that reviews fiscal condition reports for high-risk and moderate-risk districts and charter schools at least six times a year.
• Section 2 rewrites O.C.G.A. § 20-2-67 to require annual audit readiness and payment delinquency certifications, and to base high-risk or moderate-risk designation on the new tiered monitoring system rather than years of reported irregularities.
• Section 3 and Section 5 add language letting the State Board of Education unilaterally amend or terminate flexibility contracts (O.C.G.A. § 20-2-83) and charter system charters (O.C.G.A. § 20-2-2063.2) once a district or charter school is designated high risk.
• Section 4 caps a local school superintendent's contract at 12 months while their district is designated high risk under O.C.G.A. § 20-2-101.
• Section 7 expands the Office of Student Achievement's power under O.C.G.A. § 20-14-35 to run on-site performance audits, including reviews of how schools use waivers, with some reports sent to legislative committee chairs.
• Section 10 rewrites O.C.G.A. § 50-6-6 to set annual financial and compliance audit requirements for local school systems and state charter schools and new rules for using outside certified public accountants.
• Section 11 adds a new O.C.G.A. § 50-6-6.1 requiring the Department of Audits and Accounts to build a four-tier fiscal monitoring program, fully implemented by the 2028-2029 school year.
• Section 13 sets the effective date of the Act as July 1, 2026.

1. 2026-05-12Effective Date 2026-07-01
2. 2026-05-12Act 721
3. 2026-05-12House Date Signed by Governor (House)
4. 2026-04-06House Sent to Governor (House)
5. 2026-03-23Senate Passed/Adopted (Senate)
6. 2026-03-23Senate Third Read (Senate)
7. 2026-03-16Senate Read Second Time (Senate)
8. 2026-03-12Senate Committee Favorably Reported (Senate)

• Will Wade (R, HD-009)Primary sponsor
• James Hatchett (R, HD-155)
• Jan Jones (R, HD-047)
• Chris Erwin (R, HD-032)
• Matthew Gambill (R, HD-015)
• Kasey Carpenter (R, HD-004)
• Billy Hickman (R, SD-004)

1. PassedHouse voteFebruary 26, 2026

   103 yea, 68 nay (4 not voting, 2 absent)

   Passage: House Vote #572

2. PassedSenate voteMarch 23, 2026

   49 yea, 2 nay (2 not voting, 1 absent)

   Passage: Senate Vote #794

• school district finances
• education audits
• school superintendent contracts
• charter schools
• state government oversight