(1) The board of public education has the authority to require any reports it considers necessary.

(2) The board of public education may order the superintendent of public instruction to withhold distribution of state equalization aid or order the county superintendent of schools to withhold county equalization money from a district when the district:

(a) fails to submit reports or budgets as required by statute or by these rules; or

(b) fails to maintain accredited status.

(3) The board of public education shall require the reports or budgets set forth in the following provisions to be submitted to the board in a timely manner:

(a) 20-9-213, MCA;

(b) ARM 10.55.601.

(4) The board of public education shall require the reports or budgets set forth in the following provisions to be submitted to the superintendent of public instruction in a

timely manner:

(a) 20-3-205, MCA;

(b) 20-3-209, MCA;

(c) 20-3-324,MCA;

(d) 20-4-110(3) , MCA;

(e) 20-4-402, MCA,

(f) 20-9-211, MCA;

(g) 20-9-212, MCA;

(h) 20-9-213, MCA.

(5) Prior to any proposed order by the board of public education to withhold distribution of state equalization aid or county equalization money, the district is entitled to a contested case hearing before the board of public education as provided in ARM 10.67.103.

(6) School districts shall be notified by the superintendent of public instruction of the dates upon which financial reports and budget statements must be provided to the superintendent. If the superintendent does not receive the reports within 35 days after initial notice to the district, the superintendent shall give written notice of the violation to the board. Upon receipt of a written notice of a violation, the board shall determine at a hearing held pursuant to ARM 10.67.103 whether or not a substantial reason exists to withhold funds.

(a) If the district has one report which is overdue, the board shall withhold up to 25 percent of the funds to which the district is entitled and shall give the district 90 days to cure the violation. If the violation has not been cured within 90 days, the board shall withhold up to 25 percent of the funds to which the district is entitled until the district cures the violation. At such time as the district cures the violation, the board shall release the withheld funds to the district.

(b) If the district has two reports which are overdue, the board shall withhold up to 50 percent of the funds to which the district is entitled and shall give the district 90 days to cure the violations. If the violation has not been cured within 90 days, the board shall withhold up to 50 percent of the funds to which the district is entitled until the district cures the violations. At such time as the district cures the violation, the board shall release the withheld funds to the district. Where the district has more than one pending violation, the board may release a proportionate amount of any withheld funds for each violation that is cured.

(c) If the district has three or more reports which are overdue, the board shall withhold up to 100 percent of the  funds to which the district is entitled and shall give the district 90 days to cure the violation.  If the violations have not been cured within 90 days, the board shall withhold

100 percent of the funds to which the district is entitled until the district cures the violation. At such time as the district cures the violations, the board shall release the withheld funds to the district. Where the district has more than one pending violation, the board may release a proportionate amount of any withheld funds for each violation that is cured.