Okla. Stat. tit. 70, § 70-5-136.1

by withholding of State Aid.

A. With respect to school districts seeking cash-flow

management during any fiscal year, any school district may issue and

deliver certificates of indebtedness bearing a stated maturity date

for the purpose of participating in a short-term cash management

program pursuant to the provisions of Section 177.2 of Title 60 of

the Oklahoma Statutes to fund the estimated costs of operations,

capital expenditures or other lawful costs of the school district

for the current fiscal year. The proceeds of certificates of

indebtedness shall be set aside in a separate account and used only

for the purpose of meeting expenditures and obligations which would

otherwise be lawfully payable from the revenue certified by the

County Excise Board. As proceeds from the certificates are used to

pay such lawful expenditures and obligations, the financial records

of the school district shall reflect the amounts of these

obligations paid with such proceeds so that a like amount of revenue

collected and available to the school district may be used to repay

the certificates of indebtedness, in whole or in part. The State

Auditor and Inspector shall adopt uniform accounting procedures for

use by the school districts to ensure that the issuance of

certificates of indebtedness and the use of the proceeds derived

from these certificates will be documented and will not result in a

district overspending its authorized budget. All certificates of

indebtedness executed pursuant to a cash management program shall be

issued, delivered and registered for payment in the specific manner

designated by the State Auditor and Inspector; provided, any such

Oklahoma Statutes - Title 70. Schools Page 301

certificates of indebtedness shall be made payable on any date

within the then current fiscal year and may be purchased for value

through the funding of uncollateralized investments or investments

authorized pursuant to Section 5-115 of this title made for the

benefit of and on behalf of the school district. Short-term cash

management programs of any school district may lawfully provide for

the investment of note or bond proceeds by the issuer of the

obligations with the benefit and use of such proceeds assured to the

school district when needed by the school district for that fiscal

year and as approved by the Oklahoma Commission on School and County

Funds Management. In no case may a school district participate in a

short-term cash management program in any given fiscal year beyond

that fiscal year. Monies received by a school district pursuant to

a short-term cash management program may be used only for those

purposes for which other monies of the school district may be

lawfully expended.

B. For school districts electing to participate in the payment

security procedure set forth in this subsection, which procedure

shall serve as additional security for the payment of any bond or

note of a participating school district, the State Board of

Education shall cure any delinquencies in payment by withholding

State Aid due the participating district as determined pursuant to

Section 18-200.1 of this title. Whenever the designated paying

agent for receipt of payments for the school district does not

receive a payment when due pursuant to the authorizing documents,

the paying agent shall be entitled to payment from the withheld

State Aid in any amount sufficient to cure the payment deficiency.

The paying agent shall notify the State Department of Education and

the superintendent of the school district of the delinquent payment

by telephone, facsimile, or other similar communication, followed by

written verification. Unless the Department determines that payment

has been made by the school district and there is no longer a

payment deficiency, the Department shall withhold from the next

distribution of State Aid for the school district an amount
and

the superintendent of the school district of the delinquent payment

by telephone, facsimile, or other similar communication, followed by

written verification. Unless the Department determines that payment

has been made by the school district and there is no longer a

payment deficiency, the Department shall withhold from the next

distribution of State Aid for the school district an amount

sufficient to cure the deficiency and remit the amount to the paying

agent. In the event that the amount of State Aid next due to be

distributed to the delinquent school district is not sufficient to

cure the delinquency, the Department shall continue to withhold

State Aid as due and remit it to the paying agent until the payment

deficiency has been cured.