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
- Texas Education Code, Subchapter G, School District Depositories
- 19 Texas Administrative Code, Chapter 109, Subchapter D Uniform Bank Bid or Request for Proposal and Depository Contract
- Financial Accountability System Resource Guide; Module 1, Financial Accounting and Reporting (FAR)
- Government Code 2256, Public Funds Investments
- Government Code 2257, Collateral for Public Funds
Changes to Deposit Contract Rules, Effective June 4, 2019
The Texas Education Code (TEC), §45.208(e), was amended by Senate Bill 1376. As a result, as of June 4, 2019, a school district is not required to submit to TEA its:
- Depository Contract for Funds of ISDs,
- Texas Surety Bond form, if applicable, or
- Board Resolution Extending the Depository Contract for Funds of ISDs.
All remaining depository contract rules are still in effect. If a school district makes changes to its direct deposit account, the district still must electronically submit a Direct Deposit Authorization form to TEA.
Procedure for Depository Contract—School District
Each school district's depository contract must be renewed every two years, ending in odd-numbered years and coinciding with the district's fiscal year-end date. The next cycle is 2021-2023. 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:
- Summary of School District Depository Contract Laws and Procedures (PDF, 136KB)
- School District Depository Contract Frequently Asked Questions (PDF, 130KB)
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)
- Depository Contract Data Sheet for ISDs (PDF, 400 KB) (optional, for school records only, do not submit to TEA)
The depository contract form and surety bond form are provided in the following links:
- School District Depository Contract for Funds (PDF, 706KB)
- School District Depository Surety Bond Form (PDF, 509KB) (If applicable)
For links to the VDDA form and instructions, see Account Information Update.
Electronic Submission of Depository Contract Files
Any school district that has changes to its depository account must properly complete and electronically submit a Direct Deposit Authorization (DDA) form to the Financial Compliance Division through the TEA Login (TEAL) Audit application.
Please review the Depository Contracts Electronic Submission Process document for instructions on submitting depository contract files to TEA.
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:
A list of ISDs that are eligible for a contract extension has been provided in previous years. Due to changes to the TEC, § 45.208(e), the information required to assemble the listing will no longer be submitted to TEA. A final listing of all districts eligible for a contract extension for the 2021–2023 biennium is provided below. Please note that a district which is not on the list may still be eligible if they have a District of Innovation exemption concerning their depository contract.
Account Information Update
If a school district is making changes to the direct deposit account, then the district must submit a Direct Deposit Authorization form:
- Direct Deposit Authorization Form (PDF)
- Direct Deposit Authorization Form Instructions for School Districts and ESCs (PDF, 18KB)