(2) If any deficiencies are not corrected before the beginning of the school year next following the date of the finding of deficiency and if an extension has not been granted under subsection (3) of this section, the Superintendent of Public Instruction may withhold portions of State School Fund moneys otherwise allocated to the school district for operating expenses until such deficiencies are corrected unless the withholding would create an undue hardship, as determined pursuant to rules of the State Board of Education.

(3)(a) Within 90 days of the finding of deficiency, a school district found not to be in compliance shall submit a plan, acceptable to the Superintendent of Public Instruction, for meeting standardization requirements. A team of Department of Education staff shall contact the school district and offer technical assistance. When an acceptable plan for meeting standardization requirements has been submitted, the Superintendent of Public Instruction may allow an extension of time before withholding moneys, not to exceed 12 months, if the superintendent determines that such deficiencies cannot be corrected or removed before the beginning of the next school year.

(b) Notwithstanding paragraph (a) of this subsection, the Superintendent of Public Instruction may not grant an extension of time if a school district could correct the deficiency through merger.

(c) For the period of the extension of time under this subsection, the school district shall be considered a conditionally standard school district.

(4)(a) Regardless of whether the Superintendent of Public Instruction has granted a school district an extension of time under subsection (3) of this section and except as provided in paragraph (b) of this subsection, a school district that fails to submit a plan for meeting standardization requirements within the time specified by the superintendent may not receive further State School Fund moneys until a plan acceptable to the superintendent is submitted.

(b) Pursuant to rules adopted by the State Board of Education, the Superintendent of Public Instruction may extend the time specified for submitting a plan if the superintendent determines that a human-created disaster or a natural disaster affects the ability of the school district to comply with the date requirement. [Formerly 327.032; 1989 c.491 §5; 1991 c.693 §32; 1995 c.660 §47a; 2003 c.390 §§1,3; 2009 c.184 §4]