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 (TEC), Subchapter G, School District Depositories
• 19 Texas Administrative Code (TAC) 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 (PDF, 2,483 KB)
• Government Code, Chapter 2256, Public Funds Investments
• Government Code, Chapter 2257, Collateral for Public Funds   

Recent Changes

Changes to Depository Contract Rules, Effective June 4, 2019

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. The next cycle is 2023-2025. 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 Laws and Procedures Pertaining to Depository Contracts for Independent School Districts (PDF, 62 KB)
• Depository Contracts Frequently Asked Questions (PDF, 49 KB)

The forms for bids and requests for proposal are provided in the following links:

• Bid Form (PDF, 89 KB; Word, 128 KB)
• Request for Proposal Form (PDF, 78 KB; Word, 128 KB)
• Attachment A (PDF, 2,135KB; Excel, 252 KB)
• Attachment B (PDF, 22 KB; Word, 36 KB)
• Sample Bid Notice (PDF, 486 KB; Word, 54 KB)
• Sample Request for Proposal Notice (PDF, 487 KB); Word, 54 KB)
• Depository Contract Data Sheet for Independent School Districts (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:

• District Depository Contract for Funds of Independent School Districts (PDF, 706 KB)
• Texas School Depository Surety Bond Form (PDF, 509 KB) (if applicable)

For links to the vendor Direct Deposit Authorization form and instructions, see Account Information Update below.

Electronic Submission of Depository Contract Files

If a school district makes changes to its direct deposit account, the district still must electronically submit a Direct Deposit Authorization form to TEA using the TEA Login (TEAL) AUDIT application.

Please review Depository Contracts Electronic Submission Process 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:

Board Resolution Extending Depository Contract for Funds of Independent School Districts (PDF, 390 KB)

A list of ISDs that were eligible for a contract extension had been provided in previous years; however, due to changes to TEC, § 45.208(e), the information required to assemble the listing is no longer submitted to TEA.  As a result, we are no longer able to generate a list of ISDs that are eligible for a contract extension.

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:

• Direct Deposit Authorization form with instructions (PDF, 743 KB)