SB 827 and AB 640: New Ethics and Fiscal Training Requirements for Local Agency Officials, Including School Officials

02.02.2026

Overview

On October 11, 2025, Governor Gavin Newsom signed Senate Bill 827 (“SB 827”) and Assembly Bill 640 (“AB 640”), which expand training requirements for local agency officials,[1] including school officials, effective January 1, 2026.

Since the adoption of AB 1234 in 2005, many local agency officials have been required to receive two hours of ethics training every two years including trustees and employees designated by the board to receive the training.

SB 827 expands the list of officials required to receive ethics training across local agencies, while AB 640 applies specifically to Local Education Agency (LEA) governing bodies, and requires that members receive training in school finance laws. Note that SB 827 also created new fiscal training requirements for certain public agencies, but specifically excludes LEAs from the list of affected agencies. As such, the new fiscal training requirements under SB 827 are not addressed in this Alert.

New SB 827 requirements

In regard to ethics training, SB 827 applies to LEAs as follows:

The definition of a “local agency official” who must receive ethics training now includes “department heads or other similar administrative officers.”[2] “Department heads or other similar administrative officers” for LEAs are specified as:
- the superintendent of a school district;
- the county superintendent of schools; or
- the chief administrator of a charter school.[3]

SB 827 also provides the following timelines and other measures for conducting trainings and maintaining training records:

The ethics training for an official who begins service after January 1, 2026 must now be completed six months after commencing service. Previously, the deadline for the initial ethics training was one year after commencing service.
Websites for local agencies must now provide clear instructions and contact information to assist the public with requesting training records.[4]
Local agencies must maintain records that indicate the date of training and the entity that provided the training for at least five years after officials receive training.

New AB 640 Requirements

AB 640 requires new training in K-12 public education school finance laws for members of the governing bodies of school districts, county offices of education, charter schools, and nonprofit entities operating charter schools.

AB 640 applies only to LEA board members. Members who serve prior to April 1, 2027 must receive the training by April 1, 2028. A member commencing service after April 1, 2027 must receive the training within one year of the first day of their term. AB 640 does not require that the training be conducted again at specific intervals. LEAs must retain records for at least five years showing the dates on which each official completed the training and the entity that provided the training.

AB 640 defines “K-12 public education school finance laws” as follows:

Laws related to the creation and approval of a LEA’s budget to support student learning and achievement.
Laws related to fiscal penalties for noncompliance.

The training will be based on a curriculum prepared by the County Office Fiscal Crisis and Management Assistance Team in consultation with the California Department of Education. AB 640 provides that the curriculum will be completed by October 1, 2026. LEAs will be able to access the curriculum on the Department of Education website.

AB 640 defines the methods by which an LEA may provide the trainings as follows:

Training courses may be offered either by LEA employees or contracted legal counsel with demonstrable experience in K-12 public education finance laws.
Training courses may be offered by an outside entity whose primary function is assisting LEAs with technical assistance and expertise which has demonstrable experience in supporting LEAs and which has trainers with demonstrable experience in K-12 public education finance laws.
Training courses may be arranged with the County Office Fiscal Crisis and Management Assistance Team.
Training courses may be offered by nonprofit statewide education associations led by LEA officials.
The LEA may offer self-study materials with tests prepared either by the LEA itself or any other entity that would be qualified to offer a training course under AB 640.

A training course may be no longer than four hours, and participants must all receive proof of participation from the provider of the course. LEAs must provide information on an annual basis to their officials about available training.

AB 640 also provides an exemption for officials who have successfully completed the California School Boards Association’s Master’s in Governance program.

Impacts to Public Agencies and Officials

In compliance with SB 827, LEAs should take the following actions:

Identify which officials are now required to receive ethics training or training in K-12 public education finance laws.
Update the LEA’s website to include clear instructions and contact information for members of the public to request training records.
Update policies and procedures to ensure that new officials that began on or after January 1, 2026 receive required ethics training within six months.

To comply with AB 640, LEAs should be prepared to do the following:

Review the training curriculum prepared by the County Office Fiscal Crisis and Management Assistance Team and the Department of Education.
Prepare a training course based on the curriculum, contract with a provider to prepare a course, or work with the County Office Fiscal Crisis and Management Assistance Team to arrange trainings.
Update policies and procedures to ensure board members are annually notified of available trainings in K-12 public education school finance laws.
Update policies and procedures to ensure that board members serving terms before April 1, 2027 receive training by April 1, 2028, and that any board members commencing terms after April 1, 2028 receive training within one year of the start of their term.

Conclusion

SB 827 reflects a growing legislative emphasis on ensuring ethical local governance while AB 640 places additional fiscal management responsibility on the governing bodies of public school entities. We will continue to monitor any changes and provide updates to this Alert. In the meantime, please feel free to contact the Authors of this Alert or your regular AALRR counsel.

[1] Specifically, SB 827 amends Government Code sections 53234, 53235.1, and 53235.2 and added Article 2.4.6 (commencing with Section 53238) to Title 5, Division 2, Part 1, Chapter 2 of the Government Code. AB 640 adds Article 6.5 (commencing with Section 35220) to Title 2, Division 3, Chapter 2, Part 21 of the Education Code.

[2] Earlier drafts of SB 827 contained different added “any managerial-level employee with responsibility over the agency’s finances” to the definition of a “local agency official.” This definition was subsequently replaced with “a department head or other similar administrative officer of a local agency” in later drafts.

[3] This added specificity as to what a “department head or other similar administrative officer” in the context of a LEA was among the final revisions to SB 827 a month before the bill’s passage.

[4] SB 827’s original language stated that a local agency must publish the most recent training records directly on their website every two years. This language was amended to its current form shortly before passage.