The Indiana General Assembly has passed 308 new K-12 education laws over the last eight legislative sessions, or an average of 38.5 new laws per session. This high volume of enacted laws requires significant implementation and compliance efforts, and administrative reporting
duties. With more than 1,500 pages of state laws and regulations to comply with, this regulatory environment takes the focus away from our “Why” of elevating student achievement outcomes. ISBA wholeheartedly supports continued efforts for regulatory relief beyond HEA 1002-2025 (Public Law 214). We recommend the following statutes be modified or repealed:
A. Repeal GAAP Accounting Requirements
Make accrual (GAAP) accounting optional for the school corporations required to use this method of accounting. We believe IC 5-1-11.5-3 should be amended and made optional (change the “shall” to a “may”). Currently, this section requires school corporations with an ADM of more than 15,000 students to prepare an annual financial report using the modified accrual basis of accounting that yields no clear and tangible benefits for most entities. Based on the 2024-2025 school year enrollment data, this provision of law only applied to eight school corporations. According to school officials with Carmel Clay Schools, this requirement has resulted in an average annual cost increase of $100,000 for consultant services and consuming approximately 900 hours of additional work. Fort Wayne Community Schools has indicated a similar experience with staffing time and costs. Those who like this accounting system can continue to use it while eliminating the mandate of duplicate accounting methods and excessive costs.
B. Provide Local Control on Third-Party Options of SBOA Audits
ISBA supports giving school corporations more flexibility in contracting with third-party CPA firms or companies to seek lower cost audit options that would satisfy State Board of Accounts audit guidelines. School corporations have documented significant increases in the audit costs charged by the state, or its contracted vendor, in the past few years. Where costs can be optimized at the local level, school corporations should be granted this flexibility, rather than have to comply with a prescribed audit rate set based on federal and state regulations.
C. Expand Fund Transfer Flexibility for Certain School Districts
School corporations transferring more than 15% from the Education Fund to the Operations Fund are considered to have transferred an excessive amount and must undergo extensive state reporting and review requirements under IC 20-40-2. ISBA supports the aim to focus on student achievement outcomes, not inputs, at the school corporation level, including school board governance and oversight. ISBA proposes the consideration of the following options concerning interfund transfers of school corporation revenues:
1) Total deregulation with a repeal of the fund transfer limits established in IC 20-40-2given the existence of teacher compensation goals and requirements.
2) Full transfer flexibility for performance qualified school corporations (under IC 20-24.2-
2) or add new criteria for exempt school corporations to include all or some combination of the following components: a) “high performing” academically (A or B rated school corporation); b) Debt Service rate of less than 70 cents per $100/AV; c) meets teacher compensation requirements as set forth in statute; and d) not on the DUAB watchlist.
3) A 2-year hold harmless for Education Fund to Operations Fund transfers up to 20% through June 30, 2028, for all school corporations unless the school corporation is on the DUAB watchlist or is a D or F school corporation under the school accountability framework (these school corporations would still need to comply with all statutory requirements under IC 20-40-2-9 and IC 20-40-2-10).
4) Provide for local control of which funds are used to pay salaries, regardless of the position. These changes would help address the significant increases in transportation expenses (school bus pricing and fuel costs) and the fact that almost 80 percent of Operations Fund
dollars are spent on just the three expenses of transportation, utilities, and insurance.
D. Repeal of Laws That Restrict Use and Transfer of School Buildings
Current laws on underutilized and vacant school buildings restrict the authority of school boards to make determinations on the appropriate use and sale of school buildings and require the transfer of these buildings for just $1. The laws impose burdensome reporting requirements on school corporations that include listing all buildings owned by the school corporation, determining the designed occupancy of each building, and assessing the current use and percentage of use of each building for classroom instruction. Additionally, the laws require school corporations to follow complex procedures with specified timelines that include giving notice to multiple entities, providing estimated costs of operating the building, and allowing onsite inspection of the building before being able to sell or lease a school building. Given recent changes in the law on school funding that increase both state and local revenue to charter schools to meet facility needs, school corporations
should be relieved of these restrictions, and these laws should be repealed.
E. Add AED Compliance Flexibility
House Enrolled Act 1515-2025 (Public Law 232) requires that an operational automated external defibrillator (AED) is present at each event in which students have an increased risk of sudden cardiac arrest. This law has created a substantial unfunded mandate for schools. It has also led to some confusion as is does not define “event.” Secondary schools regularly have multiple “events” happening at any given time. Districts are reporting substantial costs associated with compliance as per unit costs are approximately $2,500. HEA 1515, which took effect on July 1, will be difficult for school corporations to comply with, creating substantial liability exposure should an incident occur. It can be argued that it’s safer to have AEDs in fixed locations at schools/buildings, so there is never a question about where the AEDs are located in case of emergencies. While well intentioned, ISBA supports a modification to the law to allow multiple events in proximaity at one location to share AEDs. Let school corporations decide how many units are needed to optimally fulfill its required venue-specific emergency action plan for sudden cardiac arrest.
F. Provide Flexibility in Contracting for School Administrators
Current laws require school boards to hire administrators by using a regular teacher contract and then provide additional rights to the administrators. This results in administrators having rights both as a teacher and as an administrator and imposes significant burdens on school boards in cases where the board wants to either reassign or terminate the administrator. School boards should be given the flexibility to determine whether an administrator should be hired using the regular teacher contract or some other type of employment agreement.

