Brownsville ISD reports midyear budget shortfall; board rejects outside forensic audit

Brownsville Independent School District officials told the school board on Jan. 14 that the district shows a year-to-date general fund deficit and a nearly $4.9 million shortfall in its self-insurance fund, prompting public calls for outside review and a failed motion to hire a forensic auditor.

Chief Financial Officer Cesar Cespedes said the district's general fund had received about $208.8 million in revenues and recorded roughly $229.1 million in expenditures through Dec. 31, 2024, producing a reported deficit of about $20.2 million as of the midyear report. Cespedes told trustees that timing affects that gap because state and local receipts are uneven across the fiscal year.

The nut graf: board members and several public speakers framed the financial presentation as a reason to seek greater transparency. Union leaders and association representatives urged independent review; trustees ultimately voted against hiring an external forensic auditor but discussed a narrower, phased approach and asked staff to return with priorities for targeted audits.

CFO's report and fiscal context

Cespedes reviewed key fund balances and timing issues. He reported roughly $15.3 million in special-revenue (state and federal grant) receipts versus $27.8 million in expenditures as of Dec. 31 and explained those grants are 100% reimbursable and expected to net to zero by year end. Debt-service receipts were about $17.3 million with current outlays of $4.6 million; Cespedes warned a larger interest and principal payment is due in February. On the self-insurance fund, the district reported collections of about $24.5 million and paid claims of about $29.4 million, leaving a deficit of about $4.9 million that the CFO said staff will monitor and bring back monthly.

Public comments and union requests

Six public commentators spoke during the allotted public-comment period. Veronica Borrego, president of the Association of Brownsville Educators, said the union has repeatedly requested forensic audits and that "the taxpayers have a right to know where their funds are being allocated." B. Maldonado of Braswell Educators Stand Together and other labor representatives thanked the board for recent pay actions but asked the board to do more on workplace protections and to pursue transparency on finances.

Board debate and audit motion

Board member Erasmo Castro introduced an agenda item seeking appointment of an independent external auditor to perform a forensic audit. After extended discussion about scope and cost, and with several trustees saying they preferred to allow the district's internal auditor to finish phase-one work or to narrow the external audit into prioritized phases, the motion to appoint an independent external forensic auditor failed on a 3-4 vote.

Internal-audit status and follow-up

Internal auditor Eddie Porras (internal auditor) answered trustees' questions about prior investigations he has led, including a past phishing incident that the district reported was largely recovered through the bank's insurance. Several trustees said Porras and his office need additional resources; others said the district should first compile a prioritized list of audit targets so an outside review, if pursued, would be narrowly scoped and less costly. After the failed motion trustees discussed convening a special or committee meeting to agree on audit priorities and phases before spending on an external review.

Other board actions arising from financial concerns

Trustees approved a budget amendment (014) that CFO Cespedes described as including about $14.41 million in bilingual-state carryover and roughly $4.4 million from fund balance to cover a one-time December stipend the board had previously approved. Cespedes said the majority of the fund-balance portion was recorded under salary accounts. (Amounts presented in the meeting were described by staff as above; the board packet language contained several line items and the CFO provided the allocations during discussion.)

Ending

Trustees and district staff agreed to continue monitoring claims on the self-insurance fund and to return to the board with further information about insurance credits, claims trends and any recommended actions. Trustees also instructed staff and the audit committee to meet and propose a prioritized scope for any further external audit work so the board can consider a phased approach rather than a broad forensic contract at this time.

Votes at a glance

- Motion to appoint independent external auditor for a forensic audit: motion failed, 3 yes, 4 no (no mover/second specified in public minutes). - Motion to approve budget amendment 014 (carryovers and fund-balance allocation for December stipend): approved, 7-0 unanimous. - Motion to approve attendance/travel for trustees to the 89th Texas Legislature advocacy trip (Jan. 28-30, 2025) and use budgeted travel funds: approved, 6 yes, 1 no. - Motion to accept staff recommendation on other consent/financial items (consent agenda, construction payments, etc.): approved as recorded in meeting minutes (see board packet for itemized list and amounts).