Depository Contracts for School Districts

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

     

    Recent Changes

    Amended changes to Texas Education Code (TEC) §45.205(b), effective September 1, 2017

    As of September 1, 2017, Senate Bill 754 has amended 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 allows the depository contact 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:

    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 three (3) additional two-year terms if:

      • the district did not file an extension in the three previous bienniums and
      • the district and the depository bank agree to extend the current depository contract with or without changes to the contract if both the district and bank mutually agree to the existing and/or new terms. 

      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)

      You will be required to go out for bids/proposals if your district has had three 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 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: