1. A. Any school district with an average daily attendance (ADA) of more than one thousand five hundred (1,500) students for the preceding year which, in school year 1987-88 or any school year thereafter, expends for administrative services, less expenditures for legal services, more than six percent (6%) of the amount it expends for total expenditures, less expenditures for legal services, shall have the amount which exceeds the six percent (6%) withheld from the following year's Foundation and Salary Incentive Aid.
2. B. Any school district with an average daily attendance (ADA) of more than five hundred (500) students but not more than one thousand five hundred (1,500) students for the preceding year which, in school year 1987-88 or any school year thereafter, expends for administrative services, less expenditures for legal services, more than eight percent (8%) of the amount it expends for total expenditures, less expenditures for legal services, shall have the amount which exceeds the eight percent (8%) withheld from the following year's Foundation and Salary Incentive Aid.
3. C. Any school district with an average daily attendance (ADA) of five hundred (500) or fewer students for the preceding year which, in school year 1987-88 or any school year thereafter, expends for administrative services, less expenditures for legal services, more than ten percent (10%) of the amount it expends for total expenditures, less expenditures for legal services, shall have the amount which exceeds the ten percent (10%) withheld from the following year's Foundation and Salary Incentive Aid.
4. D. For purposes of subsections A, B and C of this section, "administrative services" means costs associated with staff for the board of education, the secretary/clerk for the board of education, and staff relations, negotiations staff, the superintendent, and staff for the superintendent.
5. E. Each school site within a school district shall take steps to ensure that the administrative costs for the school comply with the expenditure limits established for school districts in this section.
6. F. Funds withheld pursuant to the provisions of this section shall be distributed through the State Aid formula to the districts not so penalized.

Laws 1985, HB 1466, c. 329, § 26, emerg. eff. July 30, 1985. Amended by Laws 1987, HB 1110, c. 204, § 115, emerg. eff. July 1, 1987; Amended by Laws 1999, HB 1759 c. 320. § 32, emerg. eff. July 01,1999 (superseded document available).