Audit finds control gaps in La Joya ISD procurement, recommends policy and forecasting overhaul

La Joya ISD presented the findings of a districtwide financial audit to the Board of Trustees on May 20, 2025, after a four‑month review performed January through April and covering transactions from fiscal years 2023 and 2024.

The audit, conducted by Alvarez & Marsal, found gaps in procurement and accounts‑payable controls, inconsistent documentation, and manual payroll and treasury procedures that increase the district’s exposure to error and reduce accountability. “Payments were over that amount,” auditor Brooke Hopkins said, describing instances where vendor payments exceeded original purchase orders. Hopkins told the board that the district used a payment request form “even if there was a purchase order to circumvent the accounts payable process.”

Why it matters: auditors and district leaders said the findings affect stewardship of public funds and the district’s planned exit from state intervention. The audit also identified opportunities to improve budgeting and long‑term forecasting so the district can plan and spend its reserves strategically.

Key findings and recommendations

- Procurement and accounts payable: The auditors reported payments exceeding purchase‑order amounts and weak documentation of transactions, missing independent receipts, and a breakdown of the three‑way match (purchase order, invoice, receipt). They recommended follow‑up transaction‑level analysis, tightened policies and procedures, and activation of automated controls in the district’s Concur expense system. "Concur is great. When it flags something, it’ll automatically send an email to whoever is the next step up that needs to approve that," Hopkins said.

- Employee expenses, HR and payroll: The audit found approvals for some employee expenses were not obtained before travel or meals occurred; position requests and hiring approvals were inconsistently documented; and payroll reconciliation procedures were manual, increasing risk of human error.

- Treasury and investments: Auditors said treasury protocols lacked clear escalation procedures for discrepancies but noted the district’s investment approach was conservative and well managed.

- Budgeting and forecasting: Alvarez & Marsal said the district has built significant reserves — unassigned fund balance rose from about $37 million to $109 million over recent years — but lacks a multiyear financial model to assess how revenue and expense lines will interact over time. The auditors recommended building a long‑term model, pursuing administrative and school‑based efficiencies, and exploring ways to maximize Texas funding formula allotments.

- Benchmarking and staffing: Benchmark comparisons showed La Joya ISD spends a relatively large share on instruction and has about 13 pupils per teacher — lower than many peers — driving higher per‑pupil instructional costs. Auditors flagged transportation, guidance and counseling, and below‑benchmark building maintenance as areas for further study.

- Federal funds: The review found federal‑funds management is compliant but resource‑intensive and largely manual. Auditors recommended expanding compliance knowledge districtwide, instituting dual controls for drawdowns and post‑drawdown reviews, and incorporating federal planning into districtwide strategy.

District response and next steps

Dr. Sorensen, the superintendent, told the board the audit supports district priority on financial integrity and that some changes are already in progress. "We will take each of these focus areas, and we're going to create goal progress measures for each," she said, adding the district will report GPMs (goal progress measures) to the board and public and tie them to exit criteria for state oversight.

Chief Financial Officer Miss Crespo (introduced in the meeting as the district CFO) and the finance team have begun work on procurement improvements and Concur configuration, the audit presentation said. Alvarez & Marsal recommended immediate follow‑up on the PO/payment overages, policy revisions with execution procedures, an accountability awareness campaign tied to job descriptions and KPIs, and a phased multi‑year implementation plan for the audit recommendations.

Evidence and scope

Auditors said the engagement focused on two primary scopes: financial processes and controls (procurement, accounts payable, HR/payroll, treasury) and budgeting and financial outlook (reserves, debt, forecasting, benchmarking, federal funds). The team said work occurred principally January–April 2025 and included a two‑year transactional lookback covering fiscal years 2023–2024.

What the board did

The presentation was informational; the board did not vote to adopt the audit report at that meeting. Board members asked questions about Concur setup and the dates covered by the review. The district said it will return with implementing milestones and policy updates for board review.

Ending

Board members and the auditors said the district’s reserves and low debt are fiscal strengths but that better controls, clearer procedures, and a multiyear budgeting model are required to reduce risk and align spending with long‑term strategy. Alvarez & Marsal left a detailed road map for the finance team to implement and monitor progress.