District receives a C on TEA financial accountability rating; administration outlines corrective steps

The district received a C rating (overall score 72) under the Texas Education Agency's Financial Integrity Rating System of Texas (FIRST) for the report covering fiscal year 2023–24, district staff told the board at the Sept. 9 meeting. "For this year, our district did receive a C rating based on these indicators," the finance presenter said.

The FIRST rating comprises 21 indicators that measure financial management and solvency. Administration reported the district passed the first four indicators required for a passing grade, including timely filing of the annual financial report and an unmodified (clean) audit opinion, timely debt and agency payments, and a positive net position. However, the district failed indicators tied to fund balance decline and days of cash on hand: the three-year change in assigned and unassigned fund balances exceeded the threshold, and the general fund had 28.35 days of cash on hand against the 90-day standard.

Administrators walked the board through indicator-level results: indicators such as ratio of long-term liabilities to total assets and administrative cost ratio met standards and earned full points; some indicators were not scored or were pass/fail and were passed. The presenter told the board that administration had already implemented strategies and an action plan to improve the FIRST rating for the coming year.

Board members and administrators discussed the retroactive nature of the report: the rating covers fiscal year 2023–24 and reflects audited figures and past decisions. A board member asked which indicators changed compared with prior years; staff identified indicator 8 (current assets to current liabilities ratio) and the decline in fund balance as the primary differences. Administration said it expects improvement within about two years if current corrective steps continue.