§3134. Financial accountability in higher education; legislative intent; uniform fiscal policy; administrative reporting; early warning metrics; corrective actions

            A.(1) It is the intent of the legislature to establish and implement a comprehensive financial accountability framework for public institutions of higher education in Louisiana that provides for the systematic and ongoing evaluation of fiscal health, operational efficiency, and institutional effectiveness.

            (2) It is further the intent of the legislature that such accountability framework include the continuous monitoring and evaluation of institutional fiscal performance, including the budgeting, allocation, expenditure, and stewardship of public funds at the institutional level. The framework shall ensure that public funds are expended in a manner that demonstrates efficiency, effectiveness, and measurable return on investment, and that funding decisions are directly tied to the achievement of defined performance outcomes consistent with the role, scope, and mission of each public institution of higher education.

            B.(1) The Board of Regents shall establish a uniform fiscal policy including an institutional cash balance policy, to be adopted by each public postsecondary education management board no later than December 31, 2026.

            (2) The policy shall require each public postsecondary education institution to submit an institutional quarterly financial report to its respective public postsecondary education management board.

            (3) Each institutional quarterly financial report shall include, at a minimum:

            (a) Quarterly revenues and expenditures, including comparisons to budgeted amounts.

            (b) Fund balances, including unrestricted, restricted, athletics, and auxiliary funds.

            (c) Cash flow and liquidity metrics.

            (d) Outstanding debt obligations and material changes thereto.

            (e) Actual and quarterly projected tuition and fee revenue.

            (f) Account receivable balances.

            (g) Identification of actual or projected deficits or financial risks.

            (h) Campus action plans as needed.

            (i) Any additional information as required by the Board of Regents.

            (4) Institutional quarterly financial reports shall be submitted to the management board no later than fifteen days after the close of each fiscal quarter. Management boards shall submit compiled reports to the Board of Regents no later than thirty days after the close of each fiscal quarter.

            (5) Each management board shall review and compile its institutional quarterly financial reports and submit a system level quarterly financial report, inclusive of all institutions under its jurisdiction, to the Board of Regents. Systems shall identify institutions in financial distress and shall provide a corrective action plan and a timeline to address the fiscal challenges of the distressed institution.

            (6) Each management board shall adopt policies to ensure timely and accurate submission of reports required pursuant to this Section.

            (7) Failure to timely submit required reports shall result in a designation of noncompliance. The Board of Regents shall provide written notice of noncompliance to the commissioner of administration, the president of the Senate, the speaker of the House of Representatives, the House Committee on Appropriations, and the Senate Committee on Finance.

            C.(1) The Board of Regents shall develop and implement a fiscal early warning system to monitor the financial condition of each public postsecondary education institution.

            (2) The warning system shall utilize the quarterly financial reports submitted pursuant to this Section, together with any additional data, including system internal audit reports required by the Board of Regents, to identify conditions of financial distress, structural deficit, and risk of financial insolvency at the earliest practicable stage.

            (3) The Board of Regents shall establish uniform financial metrics and risk indicators, including but not limited to:

            (a) Structural deficits exceeding three percent of an institution's operating budget.

            (b) Declines in cash on hand below two months of operating expenses.

            (c) Negative cash flow.

            (d) Increasing debt burden or unsustainable debt service ratios.

            (e) Enrollment declines materially affecting revenue.

            (f) Increasing accounts receivable balance.

            D.(1) The Board of Regents shall require each management board to develop and implement a detailed corrective action plan in response to an institution identified as being in fiscal distress. The corrective action plan should be submitted to the Board of Regents within ninety days of the institution being deemed in distress to ensure timely and effective fiduciary and budgetary measures.

            (2) If a management board fails to take corrective action as required pursuant to this Subsection, the Board of Regents shall refer the matter to the office of inspector general for review.

            E.(1) The Board of Regents shall annually submit a written report to the House Committee on Appropriations, the Senate Committee on Finance, and the division of administration not later than sixty days prior to the beginning of the legislative session.

            (2) The report shall include information provided for in Paragraphs (B)(3) and (D)(1) of this Section.

            Acts 1993, No. 237, §1; Acts 1995, No. 459, §1; Acts 1997, No. 1360, §1, eff. Jan. 1, 1998; Acts 2026, No. 772, §1.