A school district must have a depository bank into which the Texas Education Agency (TEA) can deposit funds for the district. The district creates a depository relationship with a bank by executing a depository contract with the bank.
Related Texas Statutes and Rules
Effective September 1, 2017:
Senate Bill 754 will become effective September 1, 2017, and will amend the Texas Education Code (TEC) §45.205(b) by allowing the school district depository contract to be extended a total of three (3) two-year terms. In addition, the changes to the law will allow the depository contract to be modified for each two-year extension if both the school district and the district's depository bank mutually agree to the terms.
Texas Education Code (TEC) §45.205(b) effective date September 1, 2017.
Procedure for Depository Contract—School District
Each school district's depository contract must be renewed every two years. The next cycle is 2017-2019 for which the documentation will be due June 15, 2017. The district must choose to select a depository either by bid or by request for proposals. The school district should review the following documents before sending out forms for bids or requests for proposal to banks:
The forms for bids and requests for proposal are provided in the following links:
- Bid Form (PDF, 89KB; Word, 128KB)
- Request for Proposal (RFP) Form (PDF, 78KB; Word, 128KB)
- Attachment A (PDF, 2135KB; Excel, 252KB)
- Attachment B (PDF, 22KB; Word, 36KB)
- Sample Bid Notice (PDF, 486KB; Word, 54KB)
- Sample RFP Notice (PDF, 487KB); Word, 54KB)
All school districts that are selecting a depository must properly complete and electronically submit the following documents to the Texas Education Agency, Division of Financial Compliance:
- One completed and signed Depository Contract for Funds of Independent School Districts
- One Vendor Direct Deposit Authorization (VDDA) form, if applicable
- One completed and signed Texas Surety Bond form, if applicable
The depository contract form and surety bond form are provided in the following links:
For links to the VDDA form and instructions, see Account Information Update.
Electronic Submission of Depository Contract Files
Please review the Depository Contracts Electronic Submission Process document for instructions on submitting depository contract files to the Texas Education Agency.
Extension of Depository Contract
A school district may extend its depository contract for 2 additional two-year terms if:
- the district did not file an extension in the two previous bienniums and
- the district and the depository bank agree to extend the current depository contract with no changes to the contract other than the extension of the contract term.
To extend the term of its depository contract, the district and depository bank must execute the following form:
Depository Contract Extension Form for Districts (PDF, 390KB)
TEA will not accept this form if it references changes to the original contract other than extension of the term. For example, the TEA will not accept this form if it indicates a change to interest rates.
You will be required to go out for bids/proposals if your district has had two contract extensions. A list of ISDs that are not eligible for a contract extension is provided in the link below. If your district is not on this list and there are no changes to the contract, then you are eligible for a contract extension.
List of Districts not Eligible for a Depository Contract Extension for 2017-2019 Biennium
Account Information Update
If the school district is making changes to the direct deposit account, then the district must submit a Vendor Direct Deposit Authorization form: