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   

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 2019-2021 for which the documentation will be due June 15, 2019. 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, 62KB)
• School District Depository Contract Frequently Asked Questions (PDF, 49KB)

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)

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:

• 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

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:

Board Resolution Extending Depository Contract for Funds of ISDs (PDF, 390KB)

Documents containing the changes made to depository contracts during an extension, should be attached to the extension and submitted as one file.

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 has been provided in past years; however, due to the changes to the Texas Education Code § 45.205(b) and the District of Innovation designations, all districts are eligible for a contract extension for the 2019-2021 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:

• Vendor Direct Deposit Authorization Form (PDF)
• Vendor Direct Deposit Authorization Form Instructions for School Districts and ESCs (PDF, 18KB)