Summary:

 Senate Bill 245 (SB 245) amends codes to require charter schools to be boards of finance. SB 245 separates charter school audits from those of their chartering authorities. 

Legislation Overview:

 Section 1 of Senate Bill 245 amends Miscellaneous Public Affairs in Auditing Costs to insert Subsection B, which provides that each charter school shall have a separate audit from its chartering authority. The section is edited throughout to delete “state-chartered”.  
Subsection B:
B. Each charter school shall have a separate audit from its chartering authority, but its audit shall be included with the chartering authority's audit. A charter school shall select its auditor, which need not be the same as the chartering authority's auditor. Each charter school shall pay the cost of its audit. 
SECTION 2 amends Public Schools under Boards of Finance to make changes in Subsection B  to insert “or local school board” for  a charter school applicant requesting a charter. This section provides that a charter school shall submit a plan detailing how its governing body will qualify for designation as a board of finance for public school funds of the charter school. “Chartering authority” is inserted throughout this subsection to replace “commission”.
Subsection C deletes “a proposed state-chartered, which is replaced with applicant to make it read:  
C. Failure of the governing body of an applicant or charter school to qualify for designation as a board of finance constitutes good and just grounds for denial, nonrenewal or revocation of its charter. 
Subsections D and E are inserted as follows:
D. Locally chartered charter schools shall qualify as boards of finance by July 1, 2026. Applicants, charter schools in their planning stage or charter schools seeking renewal shall qualify as boards of finance prior to final charter contracts being signed or charters renewed. 
E. Nothing in this section changes the statutory or contractual requirements for a chartering authority to oversee and monitor its charter schools. 
SECTION 3 amends  Charter Schools’ Rights and Responsibilities in Subsection C(1) to add that a charter school shall be responsible for qualifying and maintaining its status as a board of finance. In Subsection C(2) inserts text to provide that audits shall be separate from the audits of its chartering authority, but shall be included with the chartering authority’s audit submitted to the state auditor;
SECTION 4 amends Public Schools in Charter School Requirements in Subsection I that charter schools existing on the effective date of this 2025 act shall not be approved for operation unless its governing body has qualified to be a board of finance by July 1, 2026. 
Subsection M(4) is amended to provide a chartering authority may deny an application if the governing body of the charter school has not been designated as a board of finance or the governing body does not qualify as a board of finance. 

Current Law:

 Senate Bill 245 addresses codes in Miscellaneous Public Affairs Section 12-6-4 NMSA 1978 (being Laws 1969, Chapter 68, Section 4, as amended) which do not currently require charger school audits separate from those of their chartering  authorities.
Senate Bill 245 amends several Public Schools codes to require charter schools to be boards of finance and to separate charter school audits from their chartering authorities: 
Section 22-8-38 NMSA 1978 (being Laws 1967, Chapter 16, Section 96, as amended)
Section 22-8B-4 NMSA 1978 (being Laws 1999, Chapter 281, Section 4, as amended)
Section 22-8B-6 NMSA 1978 (being Laws 1999, Chapter 281, Section 6, as amended by Laws 2019, Chapter 174, Section 4 and by Laws 2019, Chapter 206, Section 20 and also by Laws 2019, Chapter 207, Section 20)