(a) As used in this section:

(1) "Accounts payable" means a debt owed by a school district on June 30 immediately prior to administrative consolidation, excluding bonded indebtedness or other long-term debt;

(2) "Act 60 school district" means a school district that was on the consolidation list under § 6-13-1602 and was involuntarily consolidated under § 6-13-1603(a)(3);

(3) "Available funding" means funds that are available to a school district for paying accounts payable or are reasonably expected to be collected and available for payment of accounts payable;

(4) "Excess accounts payable" means accounts payable of an Act 60 school district that exceed available funding; and

(5) "Improper expenditure exceptions" means an erroneous expenditure of federal or state funds that is noted as an audit exception and has been determined by the Department of Education to require an expenditure of funds by the resulting school district to be correct.

(b) If on July 1, 2004, or thereafter, the State Board of Education required an involuntary administrative consolidation under § 6-13-1603(a)(3) and the resulting district assumed excess accounts payable or improper expenditure exceptions incurred by the Act 60 school district before the July 1 administrative consolidation date that would have caused deficit spending if paid from the funds of the Act 60 school district, the department shall provide supplemental funding to the resulting district.

(c)

(1) The amount of the supplemental funding provided under subsection (b) of this section shall be equal to the amount of the excess accounts payable and improper expenditure exceptions assumed by the resulting school district.

(2)

(A) The amount of accounts payable, excess accounts payable, improper expenditure exceptions, and available funding shall be determined by the department based on information provided in a final audit and other verifiable fiscal information available to the department.

(B) The audit of an Act 60 school district required under this section shall be completed within the time under § 6-20-1801(d) for school districts in fiscal distress.

(3) No supplemental funding shall be paid under this section until after completion of a final audit by the Division of Legislative Audit or a private certified public accountant that may conduct school district audits under § 6-20-1801.

(d)

(1) Beginning on the date of the publication of the consolidation list under § 6-13-1602 each year, the department shall have authority to oversee all fiscal and accounting-related matters of all school districts on the consolidation list and shall require these school districts to have accurate records necessary to close all books within sixty (60) days of the end of the fiscal year.

(2) No contract or other debt obligation incurred by a school district for which the department has oversight authority under this section shall be valid or enforceable against a resulting district unless the contract or other debt obligation is preapproved in writing by the Commissioner of Education or his or her designee.