Stafford MSD officials report a C rating for 2024–25, cite cash-on-hand and coding fixes as paths to improve

Stafford Municipal School District officials told the board Dec. 15 that the district received a 74—still a C—on its 2024–25 Financial Integrity Rating, based on fiscal 2023–24 data, and laid out steps to shore up cash and correct accounting codes that affect future ratings.

CFO Mister Abkhazov, presenting the required public hearing under the Texas Administrative Code (chapter 109, subchapter AA), said TA released the ratings Nov. 6 and the district must present them within 60 days. "Last year our score was 78; this year it was 74," Abkhazov said, adding that the district passed the four critical initial indicators (timely AFR filing, unmodified audit opinion, debt payment compliance and timely payments to state and federal agencies).

The presenter noted some measurable improvements: the governmental activities net position moved from negative last year to a positive $2,900,000 this cycle, which allowed the district to pass indicator #5, and the three‑year average fund balance recovered to about a 2% positive change after a prior decline. But Abkhazov warned that the district scored low on the days‑cash‑on‑hand indicator (indicator #7) because of low cash available to cover operating expenditures; he said timing of tax‑anticipation borrowing in September reduced that metric and that accelerating cash receipts by a month could materially improve the score.

"If we get bond receipts or reduce receivables and delay noncritical payments into September, it will improve our cash position," he said, noting the district needs roughly two-and-a-half months of expenditures in cash to strengthen that indicator (he cited roughly $8 million as a reference point for multi‑month coverage).

Board members pressed staff on other problem areas. Trustees and administrators discussed administrative‑cost coding ("pick code"/PIP code) and recent position‑management work to ensure salaries paid by federal or grant funds are coded to the correct function rather than defaulting to administrative expense. Abkhazov described a recent cleanup during the budgeting process and a position‑management rollout that aligned pay codes with positions, which reduced PIMS‑to‑AFR variance and improved scores tied to those data matches.

Trustees also asked about indicator #11 (long‑term liabilities to assets). Abkhazov said the apparent $9 million decline in assets is primarily depreciation and the effect of defeasance/paydowns, and that improving that ratio is a long‑term task tied to asset use, debt levels and enrollment trends. "That indicator is a long‑term projection; you cannot change it quickly," he said.

The hearing closed with no public commenters; the district plans to circulate updated year‑end cash numbers to the board when final closeout figures are available and to continue coding cleanups and preventative cash‑management steps to pursue a B rating in future reporting cycles.

The presentation included disclosures required by statute and TA rules (superintendent contract attachment, reimbursements, gifts and business‑transaction statements); Abkhazov said no board member received gifts above the $250 disclosure threshold and that reported reimbursements for travel and related items totaled about $130,950 for 2023–24.

The board did not take any vote on the rating itself; the hearing functions as the required public presentation and Q&A.