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


    Proposed Changes

    The depository contract bank forms are currently in the process of being updated. Information on the proposed changes to the depository contract bank bid and proposal form can be found on the November 2016 Committee on School Finance Permanent School Fund Item 2 of State Board of Education. Please consult with your legal counsel for any changes you make to existing forms. 


     If approved, the proposed changes are anticipated to go into effect the Spring of 2017. However, a school district can use the existing forms for their 2017-2019 contract and still be in compliance.


    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 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: