(a) A district may apply to be a direct report to the system. The Teachers' Retirement Board may approve or may deny a district as a direct report based on the criteria in subdivisions (b) and (c).
(b) An applicant to become a direct report shall be in compliance with all of the following requirements. Failure to comply with the requirements of this subdivision shall result in the denial of the application to become a direct report.
(1) The district has submitted the applicable resolutions by the district's governing board and the county governing authority required under Section 27703, and there has been no change to the accuracy of each of the declarations therein.
(2) The district has demonstrated the ability to successfully transmit files to the system formatted pursuant to this division.
(3) If the district was previously terminated as a direct report, more than five fiscal years have elapsed since the effective date of the termination.
(4) In the 36 months preceding its application to become a direct report, the district had an audit conducted by the system that demonstrated full compliance with reporting the following consistent with the Teachers' Retirement Law:
(A) Mandatory membership.
(B) One-time or limited-term payments reported to the Defined Benefit Supplement Program.
(C) Outgrowth activities as creditable service.
(D) Information regarding the compensation to be paid to employees, including, but not limited to, employment contracts, written agreements, salary schedules, and board minutes.
(5) A review conducted by the system demonstrates sustained compliance with all of the following over the 12-month period preceding the district's application:
(A) Responding to the system's requests for adjustments within 60 days.
(B) Providing acceptable annotations to employer-approved edits in the file layouts specified in this division electronically in an encrypted format provided by the system.
(C) Reporting full-time minimum standards consistent with a written agreement with an exclusive representative.
(D) Providing the system with information regarding the compensation to be paid to employees within 30 days of a request by the system.
(c) The board may deny an application to become a direct report if it finds any of the following:
(1) The district has any outstanding or unresolved audit findings from the system at any point during the application process.
(2) There are any accounts receivable 30 or more days past due to the system attributable to the district at any point during the application process.
(3) If the district was previously rejected by the system from entry as a direct report due to an audit or review finding under these regulations, and the rejection occurred within the previous five fiscal years.
(d) The board may, at its discretion, defer consideration of an application until a future fiscal year.
Credits
Note: Authority cited: Sections 22207, 22213, 22305 and 23004, Education Code. Reference: Sections 22458 and 23004, Education Code.
