Alabama Trust for Boards of Education: An Overview of Governance, Risk Management, and Funding

The Alabama Trust for Boards of Education (ATBE) plays a crucial role in the state's education system. This article provides a comprehensive overview of ATBE, its functions, governance structure, risk management strategies, and funding mechanisms, along with the broader legal and regulatory context in which it operates.

Introduction: The Alabama Association of School Boards (AASB) and the Genesis of ATBE

The Alabama Association of School Boards (AASB) has been a cornerstone of support for its members since 1976, initially focusing on providing liability coverage. Over time, AASB undertook research to identify the most appropriate commercial liability insurance options for boards. This eventually led to the creation of liability funds for its members, marking the genesis of ATBE in 1986.

What is ATBE?

ATBE is a self-funded risk management trust. Alabama public boards of education elect to participate and self-insure selected risk exposures pursuant to the contractual agreement between ATBE and the participating Member board. An ATBE Certificate of Coverage is issued only as evidence of a board of education participating in one of the ATBE Funds. The Certificate is not evidence of coverage for any person, entity, activity, event, or risk exposure not otherwise covered within the applicable ATBE Coverage Agreement. Allow at least 3 business days for the Certificate to be processed and returned.

It's crucial to understand that ATBE is not an insurance company, and its coverage isn't technically insurance. This distinction is important because it allows ATBE to operate with a different cost structure than commercial insurers.

Cost Efficiency and Financial Structure

Commercial insurance companies typically allocate 25-35% of their premiums to cover administrative costs like commissions, taxes, operating expenses, and profits. In contrast, ATBE, being both tax-exempt and not-for-profit, mirrors the financial structure of its member boards. ATBE pays no commissions and maintains very low operating expenses, significantly lower than those of commercial insurance companies. This administrative cost advantage translates directly into lower coverage costs for participating boards of education.

Tailored Liability Coverage

ATBE liability coverage is specifically designed to address the unique risk exposures faced by Alabama boards of education. This tailored approach differentiates it from standard insurance policies. One example of such unique coverage is the defense of employee claims arising from on-the-job injuries. For over 35 years, AASB and ATBE have provided coverage for selected liability risk exposures for Alabama boards of education.

The School Board Governance Improvement Act of 2012

The School Board Governance Improvement Act of 2012, formally known as Section (a), plays a crucial role in enhancing the effectiveness of public education governance in Alabama. Its primary aim is to strengthen public education governance within Alabama by establishing training requirements, boardsmanship standards, and accountability measures. These are designed to promote informed deliberations and decisions, revise the qualifications for serving as a member of a local board of education, provide for a code of conduct for each member of a local board of education in order to better ensure that any decision or action of a local board of education is based on the interests of students or the system, and foster the development and implementation of organizational practices that are designed to promote broad support of the public schools.

Legislative Findings and Declarations

The Legislature finds and declares all of the following:

A local board of education is the legally constituted body that governs a local school system, promotes student learning, and prepares students to be college and career ready. A local school board, and not individual board members, is entrusted with this responsibility. To function effectively, board members, both individually and collectively, must operate with the highest degree of accountability to these responsibilities and their fiduciary duty to act in the best interests of the local school system, without self-interest.
A board member, as an individual, shall satisfy minimum qualifications to serve, shall comply with a code of conduct, and shall be required to participate in orientation and ongoing training.
To meet the goal of comprehensive board member education and proficiency, governance standards should be clearly reflected in board member training with a focus on roles and responsibilities, student and school performance standards, and the delineation of each member's role as a public official holding public trust.

Definitions

For the purposes of this section, the following terms shall have the following meanings:

BOARDSMANSHIP. The effective discharge of duties as a member of a local board of education in keeping with the highest standards of stewardship and principles of public service as provided in this section.
LOCAL BOARD OF EDUCATION. A city or county board of education whether elected or appointed.

Principles of Educational Governance

In conjunction with and as a precondition to the installation of any elected or appointed member of a local board of education, and in addition to all other requirements imposed by law, prospective members shall be required for each term of office to affirm publicly and in writing all of the following principles of educational governance:

Read also: Looking at Alabama's Schedule

That each decision, action, and vote taken or made as a member of a local board of education shall be based solely on the needs and interests of students or the system.
That no decision, action, or vote shall be taken or made to serve or promote the personal, political, or pecuniary interests of the member.
That each decision, action, and vote shall be based on the interests of the school system as a whole.
That the views of all members of the local board of education and of the local superintendent of education shall be considered before making a decision or taking an action on any measure or proposal before the local board of education.
That, except to the extent otherwise provided by law, each member of a local board of education shall take formal action upon the written recommendation of and in consultation with the local superintendent of education, and may not individually or jointly attempt to direct or corrupt the operations of the school system in a manner that is inconsistent with the discharge of the statutory functions and responsibilities of the local superintendent of education.
That each member of a local board of education shall actively promote public support for the school system and a sound statewide system of public education, and shall endorse ideas, initiatives, and programs that are designed to improve the quality of public education for all students.
That each member of a local board of education shall attend scheduled meetings and actively participate in school system functions, activities, and training programs that promote quality boardsmanship unless good cause is shown.

Duties of a Local Board of Education

In addition to those duties specifically enumerated in the Code of Alabama 1975, a local board of education shall have all of the following duties:

In concert with the local superintendent of education, to establish a vision for the school system by adopting goals that address student needs, advance student performance, and monitor implementation of policies and programs by reviewing data.
To adopt written policies and programs, upon the recommendation of the local superintendent of education, to further the educational goals of the system and respond to system needs.
To act on personnel recommendations submitted by the local superintendent of education in a timely manner, based on student needs and system finances, without regard to personal preferences or political interests.
In concert with the local superintendent of education, to consider and approve operating budgets for the system aligned with the goals and objectives of the local board of education.
To advocate for the needs, resources, and interests of public school students and refer stakeholders and constituents to the local superintendent of education so that these issues can be addressed by school system personnel.

These duties should not be construed to limit or change the duties of local boards of education as found in the Code of Alabama 1975.

Continuing Education and Training Programs

In order to further the implementation of sound principles of boardsmanship within and among the local boards of education in the state, the State Superintendent of Education shall develop continuing education and training programs for the members of the local boards of education to enhance the understanding of the role of each member in assuring the effective provision of educational services. The programs shall be developed in cooperation with the Alabama Association of School Boards pursuant to Section 16-1-6.

Sanctions for Failing to Meet Standards of Boardsmanship

Any member of a local board of education who fails to satisfy the standards of boardsmanship as provided in this section, or other statutory duty or obligation, under circumstances that constitute neglect of duty or willful misconduct, may be subject to the following sanctions:

Formal censure or reprimand upon an affirmative vote of a majority of the members of the local board of education on which he or she serves. No such action shall be taken unless the member, who is the subject of the proposed action, is provided at least 30 days' advance written notice of the proposed action by the secretary of the local board of education. The notice shall be issued only upon an affirmative vote of a majority of the members of the whole board of education, shall specify the reasons for the proposed action, and shall state that the member shall be afforded an opportunity to respond orally or in writing to the notice before the vote of the local board of education on the proposed action is taken.
Upon the referral of a written complaint by a majority vote of the applicable local board of education, or when, in the judgment of the State Superintendent of Education, sufficient cause exists to do so, and subject to the conditions hereinafter specified, the State Superintendent may investigate serious and substantial allegations of neglect of duty, misconduct, or breach of duty on the part of any member or members of a local board of education. On the basis of the investigation, the State Superintendent of Education may either decline to pursue formal sanctions or issue a written notice to the board members whose conduct is in question, which notice shall specify the proposed imposition of any sanctions that are contemplated as a result of the investigation. The notice shall also describe with reasonable particularity the neglect of duty, misconduct, or other breach of legal duty upon which any proposed sanction is based. The board member shall have at least 30 days to show cause in person or in writing why he or she should not be subject to the proposed sanction or to otherwise object to the proposed sanction. Upon request, the board member shall be granted a hearing before the State Superintendent of Education, or his or her designee, for the purpose of contesting any proposed sanction.
After the close of the investigation, review, and hearing authorized by this section, the State Superintendent of Education may recommend approval of any of the following sanctions to the State Board of Education:
- A formal censure or reprimand of the board member.
- For any board member who fails to meet mandated training and attendance requirements, the member shall be subject to disqualification from eligibility for future appointment, reappointment, or election to any local board of education in the state.
- For a board member whose conduct is found by the State Superintendent of Education to constitute neglect of duty or willful misconduct, the member shall be subject to disqualification from eligibility for future appointment, reappointment, or election to any local board of education in the state.
Nothing in this subsection shall be deemed to preclude a negotiated resolution of any action that may be proposed or initiated by the State Superintendent of Education under this section, provided that such resolution is suitably memorialized, executed, made a matter of public record, and is consistent with the purposes of this section.
No sanction shall be imposed on the basis of the exercise of personal, political, or other rights of a board member that are protected by the United States Constitution or by any state or federal statute.
No sanction by the State Superintendent of Education, other than as may be imposed by written agreement with the board member, shall be effective until it is approved by majority vote of the State Board of Education.

Code of Conduct

The State Board of Education shall adopt a model code of conduct for members of local boards of education. Before April 1, 2013, each local board of education shall adopt a code of conduct that includes, at a minimum, the model code of conduct adopted by the State Board of Education. The State Superintendent of Education shall develop and issue regulations to implement the requirements of this section, including any regulations deemed necessary and appropriate to ensure that procedures to be followed in connection with the imposition of sanctions authorized under this section conform to applicable legal standards.

Cumulative Nature of the Act

This section is cumulative and in addition to any other provision of law governing the training, performance, and accountability of local boards of education and members of local boards of education in the State of Alabama.

Education Trust Fund Proration Relief

Section 16-1-40 addresses Education Trust Fund Proration Relief.

(a) During fiscal year 2009 and any fiscal year in which proration is declared by the Governor in an amount equal to or greater than three percent, local boards of education, with the recommendation of the local superintendent, may transfer Education Trust Fund line item appropriations including the Public School Fund, except Public School Fund monies dedicated to a specific capital outlay project or debt service and except for Alabama Public School and College Authority funds which are allocated for a specific capital outlay project, between and among appropriated line item categories. No state funds shall be transferred from funds appropriated for salaries, fringe benefits, or student materials allocations.

(b) Prior to any implementation of the flexibility provisions of this section, the local board of education shall produce a plan indicating the source and amount to be transferred from each line item and show that the transfer of funds is necessary to minimize the loss of locally employed personnel providing education services, and to cover the essential operational expenses not fully funded by the Education Trust Fund Appropriations Act. The plan shall be submitted to the State Superintendent of Education for approval and must also be made available to the public and approved by the local board of education before it is submitted to the State Superintendent of Education. Failure to follow the plan once approved shall result in immediate state intervention and the subsequent withdrawal of approval. In instances where there are no layoffs due to proration or the school system is in a position of desperate financial need and sufficient other funds are not available from the Public School Fund, local funds, or other sources of revenue, the State Superintendent of Education may allow flexibility through an approved plan to pay for essential services. Before approval of the proposed plan, the state superintendent shall review all existing fund balances, the essential purposes which may only be funded through the flexibility provided as proposed, the economic factors that affect local revenues, and any loss of funding because of a drop in student enrollment. Prior to final approval of any proposed plan, the state superintendent shall assure that the first priority in use of flexibility funds shall be to prevent the loss of personnel.

The RAISE Act and Education Funding

The introduction of the RAISE Act marks a significant shift in how Alabama allocates funding to education. This new system aims to distribute resources based on student needs, recognizing that educating children in certain areas requires more financial support. While the new funding doesnât reach the estimated $1,000-per-student threshold it takes, it is a step in the right direction.

The Education Opportunity Reserve Fund (EORF) was created in 2023 to have available for us in dark times. The proposal also includes $50 million to complete the initial funding for the CHOOSE Act, which will provide scholarships to eligible students for educational expenses. The $1.25 billion Advancement and Technology Fund allocation is also intended to fund one-time expenses, including capital projects, transportation, school security and education technology.

tags: #alabama #trust #for #boards #of #education