(1) Pursuant to the authority vested in the state board by section 1 of article IX of the state constitution to exercise general supervision over the public schools in the state, the state board shall annually accredit the school districts and the institute as provided in this article and pursuant to rules adopted by the state board in accordance with this article.

(2) The state board shall enter into an accreditation contract with each local school board and with the institute. Each accreditation contract shall have a term of one year and shall be automatically renewed each year so long as the school district or the institute remains in the accreditation category of accredited or higher. The parties to each accreditation contract may renegotiate the contract at any time during the term of the contract, based on appropriate and reasonable changes in the circumstances upon which the original contract terms were based. The state board shall promulgate rules specifying the contents and terms of the accreditation contract in accordance with the provisions of this article.

(3) Each accreditation contract shall, at a minimum, address the following elements:

(a) The school district's or institute's level of attainment on the performance indicators, as determined pursuant to section 22-11-204;

(b) The school district's or the institute's adoption and implementation of its performance, improvement, priority improvement, or turnaround plan, whichever is appropriate based on the school district's or institute's accreditation category;

(c) The school district's implementation of its system for accrediting the district public schools or the institute's implementation of its system for accrediting the institute charter schools; and

(d) The school district's or institute's substantial, good-faith compliance with the provisions of this title and other statutory and regulatory requirements applicable to school districts and the institute.

(4) (a) For purposes of monitoring a school district's or the institute's substantial and good-faith compliance with the provisions of this title and other statutory and regulatory requirements, the department shall obtain assurances from the school district or the institute that it is in compliance with:

(I) The provisions of article 44 of this title concerning budget and financial policies and procedures;

(II) The provisions of article 45 of this title concerning accounting and financial reporting; and

(III) If the accreditation contract involves a school district, the provisions of section 22-32-109.1 concerning school safety.

(b) With regard to statutory and regulatory requirements, other than those specified in paragraph (a) of this subsection (4), that are applicable to school districts, the superintendent of the school district and the local school board members shall affirm that the school district and the district public schools are in substantial, good-faith compliance with the statutory and regulatory requirements. If the department has reason to believe that the school district is not in substantial compliance with one or more of the statutory or regulatory requirements, the department shall notify the local school board that it has ninety days after the date of notice to come into compliance. If, at the end of the ninety-day period, the department finds that the school district is not substantially in compliance with the statutory or regulatory requirements, the school district may be subject to the interventions specified in this article.

(c) With regard to statutory and regulatory requirements, other than those specified in paragraph (a) of this subsection (4), that are applicable to the institute, the members of the institute board and the executive director of the institute shall affirm that the institute and the institute charter schools are in substantial, good-faith compliance with the statutory and regulatory requirements. If the department has reason to believe that the institute is not in substantial compliance with one or more of the statutory or regulatory requirements, the department shall notify the institute that it has ninety days after the date of notice to come into compliance. If, at the end of the ninety-day period, the department finds that the institute is not in substantial compliance with the statutory or regulatory requirements, the institute may be subject to the interventions specified in this article.