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PSJA ISD audit shows $16.5 million drop in fund balance; auditors flag budget overspending
Summary
Auditors presented an unqualified opinion for PSJA ISD's 2025 financial statements but reported a $16.5 million decrease in governmental fund balance and a material‑weakness finding that expenditures exceeded budgeted appropriations by about $12.8 million across five functions.
The Pharr‑San Juan‑Alamo Independent School District board on Feb. 23 received and approved the district’s annual audit for the year ended Aug. 31, 2025, which included a clean (unqualified) auditor’s opinion but also identified significant budget control issues. Auditor Johnathon Hall of Carr, Riggs & Ingram told trustees the district’s governmental funds experienced a $16.5 million decrease in fund balance for the year and that unrestricted net position was negative largely because of pension, OPEB and compensated‑absence adjustments.
Hall said the audit report included a material‑weakness finding related to excess expenditures over appropriations. The audit identified approximately $12,799,000 in over‑expenditures across five functional areas — instruction, student pupil transportation, food services, general administration and facilities maintenance and operations — and noted transfers out exceeded the amended general fund budget. "In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of ... the Pharr‑San Juan‑Alamo Independent School District," Hall said during the presentation, while also walking trustees through the finding and associated footnotes.
Superintendent Dr. Alejandro Elias and board members asked auditors clarifying questions about fund balances, capital assets and the drivers of budget variances. The audit packet presented to the board showed governmental fund assets of $138,767,920 and a general fund ending fund balance of about $94.2 million; the district transferred $5.2 million to capital projects and reported $22.4 million in principal payments and roughly $7 million in interest in the debt service fund. Trustees voted to accept the audit report as presented.
Board members and administration said they will review internal budgeting and controls in response to the finding. The auditors also issued an unmodified opinion on the district’s federal grant compliance for the programs audited, and the audit materials include explanatory notes on long‑term debt, capital assets and pension/OPEB liabilities.
