Red Oak ISD keeps 'Superior' FIRST rating, scores 98 after timing-related cash shortfall
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Summary
Dr. Bill Johnston told the school board that Red Oak ISD earned a 98/100 'Superior' Financial Integrity Rating System of Texas score but lost 2 points because some receivables had not posted by June 30; the district reported an unmodified audit and $56 million in net assets.
Dr. Bill Johnston addressed the Red Oak ISD board during a public hearing on the state Financial Integrity Rating System of Texas (FIRST), saying the district scored 98 out of 100 and retained a 'Superior' rating despite losing two points tied to the district's days-of-cash calculation.
Johnston said the district's audit received an unmodified opinion and that Red Oak had roughly $56,000,000 in net assets and about 111 days of operating expenditures covered by fund balance. He attributed the two-point loss to timing: about $5,000,000 in receivables were not in the district's accounts on June 30, reducing the days-of-cash measure below the 90-day threshold.
"Again, last two years we were at a score of 100. This year, we're still a superior achievement, but we lost those 2 points due to not getting the cash and having it in our accounts by June," Johnston said. He added that the district's general fund revenue exceeded expenditures by 1.84 percent and that several indicators, including solvency and liquidity ratios, otherwise met or exceeded thresholds.
Johnston noted the district issued $175,000,000 in bonds in August and said that increased long-term liabilities may affect future ratios, though other measures — such as a current assets-to-liabilities ratio and a less-than-10-percent administrative cost ratio — were within guidelines. He said one indicator was not evaluated this year because of pandemic-related adjustments to state scoring.
Board members asked for clarifications about the specific indicators and the schedule for submitting the audit. Johnston said the state has adjusted timing this year and the district expects to present the full audit to the board in January or February and will upload required FIRST disclosures to the TEA via Sentinel. "We will finish the training this Friday… and upload next week," he said when describing the district's plan to meet TEA disclosure deadlines.
The public hearing provided the required annual transparency about district finances and audit findings; no action was taken during the hearing itself. The district staff said they will return with the formal audit presentation and continue to monitor the indicators that could affect future FIRST scores.