School accountability: school financial and performance audits: chartering authorities: educational support activities: flex-based instruction.

Senator Ashby's education accountability legislation introduces comprehensive reforms to California's school financial oversight system, establishing new audit requirements and strengthening fiscal controls for local educational agencies and charter schools. The bill mandates specialized training for auditors conducting school audits, requiring 24 hours of initial instruction and 16 hours of ongoing training every two years in topics specific to educational financial reporting and compliance testing.

The legislation implements stricter audit protocols, requiring auditors to independently select document samples and verify pupil-to-teacher ratios in schools offering independent study programs. Charter school oversight receives particular attention, with chartering authorities required to review credit and debit card transactions and notify state officials if financial crimes are suspected. The bill also introduces "flex-based instruction" terminology to replace "nonclassroom-based instruction" and establishes new funding determination criteria for these programs.

Beginning July 2026, local educational agencies must follow new protocols when contracting with educational support vendors, including verification of criminal background checks, proof of insurance and qualifications, and demonstration of reasonable market value. Contracts exceeding $100,000 annually require approval in public meetings. The legislation also creates an audit framework to verify compliance with these vendor requirements and mandates separate tracking of financial data for charter schools consolidated within school districts or county offices.

The State Controller's office gains expanded authority to develop audit guidelines, incorporating materiality thresholds and procedures to evaluate relationships between educational agencies and related entities. These reforms aim to enhance transparency while maintaining educational quality through standardized oversight mechanisms.