HB1164: HB1164 Education; require State Board of Education to appoint an audit committee

Georgia currently audits local school systems and state charter schools, but this bill builds a more structured system for catching and responding to financial trouble. It requires the State Board of Education to appoint an audit committee that meets at least six times a year to review fiscal reports and risk designations. It also requires local school systems and state charter schools to certify each December that they are audit ready and not delinquent on payments to the state health benefit plan, the Teachers Retirement System, the Public School Employees Retirement System, or the Department of Labor. The bill creates a four tier fiscal monitoring framework at the Department of Audits and Accounts, ranging from Tier 1 (fiscally sound) to Tier 4 (critical fiscal emergency), which determines whether a district is labeled moderate-risk or high-risk. High-risk districts face limits on superintendent contract extensions, potential unilateral contract or charter termination by the State Board, and public notice requirements. It also expands the Office of Student Achievement's audit powers, including reviewing waiver use. The law takes effect July 1, 2026, with the full monitoring program required to be operating by the 2028-2029 school year.

• Requires the State Board of Education to create an audit committee that meets at least six times a year to review the financial health of school districts and charter schools.
• Requires local school systems and state charter schools to certify annually by December 31 that they are audit ready and current on payments to retirement systems, the health benefit plan, and the Department of Labor.
• Creates a four tier fiscal monitoring system (Tier 1 through Tier 4) run by the Department of Audits and Accounts that determines whether a district is labeled moderate-risk or high-risk.
• Allows the State Board of Education to unilaterally amend or terminate flexibility contracts and charter system agreements for districts designated high-risk.
• Limits superintendent contract extensions to 12 months for any district designated high-risk.
• Expands the Office of Student Achievement's authority to audit schools' use of waivers and requires additional public reporting on high-risk and moderate-risk designations.

Local school district superintendents, school boards, and charter school administrators; state charter schools; the Department of Audits and Accounts and the state auditor; the Office of Student Achievement; the State Board of Education; and retirement and health benefit agencies like the Teachers Retirement System that must report delinquent payments.

Districts and charter schools with financial problems would face faster identification, mandatory corrective action plans, public notice requirements, and possible loss of contract flexibility or shorter superintendent contracts, changing how quickly the state can intervene when a school system's finances go wrong.

• Section 1 requires the State Board of Education to appoint an audit committee that meets at least six times yearly and can request financial reports from agencies and school systems.
• Section 2 requires annual certifications of audit readiness and payment compliance by December 31, and creates high-risk and moderate-risk designations based on one to two years versus three or more years of reported irregularities.
• Section 3 and Section 5 let the State Board unilaterally amend or terminate flexibility contracts and charter system agreements for high-risk districts.
• Section 4 limits superintendent contract extensions to no more than 12 months once a district is designated high-risk.
• Section 7 expands the Office of Student Achievement's power to audit schools' use of waivers and to review student performance and misuse indicators.
• Section 11 creates a new Code Section 50-6-6.1 establishing a four tier fiscal monitoring framework, fully implemented by the 2028-2029 school year.
• Section 12 authorizes the state auditor to investigate local school systems and charter schools for mismanagement or misconduct.
• Section 13 sets the effective date 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 finance oversight
• education audits
• school district accountability
• charter schools
• state board of education