BOSTON—The Joint Committee on Education today reported out favorably a bill aiming to improve the fiscal accountability of Massachusetts’ network of education collaboratives.

“The Committee has worked hard to craft a bill that addresses the problems identified in the Auditor’s reports on education collaboratives,” said Representative Alice Peisch (D-Wellesley).  “The oversight hearings proved invaluable in gathering information and involving stakeholders in the process. Education collaboratives have tremendous potential to provide high quality, cost effective services to school districts across the state, which is especially critical in this time of limited resources. Today we have reported out a very strong bill that will improve the accountability of collaboratives and ensure that they can continue to provide the cost effective, high quality services to member school districts that are the hallmark of the best collaboratives.”

“While the deficit committee in Washington is paralyzed by partisan gridlock, we've shown here in Massachusetts that our public leaders are able to come together around an issue of importance, share ideas, undertake thoughtful analysis, and produce solutions that preserve what's working well and fix what's broken,” said Senator Sonia Chang-Díaz (D-Boston). “This bill will go a long way toward restoring the public’s trust in the education collaboratives system, and I hope that it continues to move swiftly through the legislative process.”

“This bill will provide greater oversight and accountability of education collaboratives,” House Speaker Robert A. DeLeo (D-Winthrop) said. “The abuses of public funds identified in the State Auditor’s reports on certain education collaboratives are something that the House takes very seriously.  I appreciate the time and effort spent by Chairwoman Peisch and the Joint Committee on Education this Fall to put together effective legislation to prevent abuses like these in the future, and ensure that taxpayer funds are directed at services for some of our most vulnerable students. I am eager to take up this important reform legislation when we return in January.”

“Children with special needs cannot be cheated of the services they deserve and require,” Senate President Therese Murray (D-Plymouth) said. “The financial abuses recently revealed regarding some of our education collaboratives highlight serious mismanagement and a void of oversight and accountability that are a disservice to our children and to the taxpayers. Funding for collaboratives should be used specifically for direct services to our children and not for inflated salaries of board members, bonuses, travel or any other unrelated expenses. This bill represents all the efforts of the Senate, the House and the Administration to address this alarming problem and make sure nothing like this happens again.”

“I commend Education Committee Chairwomen Senator Sonia Chang-Díaz and Representative Alice Peisch for their rigorous work and their embrace of our recommendations. Their leadership should be applauded. Our special needs students, as well as our taxpayers, deserve better governance and more accountability. Education collaborative administrators will benefit as well from enhanced guidance and oversight,” said State Auditor Suzanne Bump.

Reports released this summer by the State Auditor and Inspector General documented financial mismanagement stemming from lax oversight and inappropriate relationships between some collaboratives and closely related nonprofit organizations. The most egregious examples centered around the Merrimack Special Educational Collaborative.  In response to these investigations, the Joint Committee on Education held a series of oversight hearings this fall to gain input from community stakeholders and the general public about how to create better oversight of education collaboratives.

Over the course of the three oversight hearings, Senator Chang-Díaz and Governor Deval Patrick filed collaboratives reform legislation. The committee bill reported out today draws from both bills, as well as from the feedback provided at the oversight hearings and research by Committee staff.

The bill addresses the conflicts of interest surrounding collaboratives and their related non-profits by creating clear requirements for the roles and responsibilities of collaborative board members and staff. The bill prohibits any collaborative board member, manager, or staff member from serving in any similar capacity in a related nonprofit.

The bill improves accountability and transparency by creating new reporting requirements for collaboratives and related nonprofits. It requires collaboratives to file with their member school districts and with the Department of Elementary and Secondary Education (DESE) an annual report and audited financial statement, and subjects collaboratives to periodic reviews by DESE at least once every six years—equivalent with traditional school districts. Related nonprofits must also submit annual audited financials to either the Attorney General or to DESE. And the bill makes explicit that collaboratives are subject to the same competitive bidding requirements that school districts must follow when contracting for goods and services.

Other oversight measures put in place by the bill include:

• Requiring education collaboratives to perform an annual independent financial audit, which then must be made available to the public and shared with member school districts, DESE, and the Auditor each year;
• Requiring board members to complete a training developed by DESE on the duties and responsibilities of board members;
• Requiring that collaborative boards include a voting member appointed by DESE;
• Specifying that collaborative boards of directors must be composed of two members from each member school district—one school committee member and one superintendent or special education director;
• Prohibiting member school committees from giving up their authority to approve any amendments to the collaborative agreement;
• Requiring audits to include information on “red flag” categories, which the collaborative board, member school districts, DESE, and the auditor would then review; and
• Requiring DESE to develop a model collaborative agreement consistent with new law and education collaboratives to revise their agreements to conform to the new law within 12 months of the effective date of the act.
• Mandating that each collaborative maintain a public website, which must include information such as a list of members of the board of directors, copies of the board meeting minutes, and a copy of the collaborative’s founding written agreement.

The bill also creates a commission to study the role of collaboratives relative to the state’s K-12 education system in the future and to make recommendations in such areas as the provision of services to individuals age 22 and above and the appropriate relationship, if any, between education collaboratives and related organizations.