TEA Releases Final 2017-2018 Financial Accountability Ratings

Created by the 77^th Texas Legislature in 2001, the School Financial Integrity Rating System of Texas (FIRST) is designed to encourage public schools to better manage their financial resources…

AUSTIN – The Texas Education Agency (TEA) last week released final financial accountability ratings for more than 1,200 school districts and charters across the state, with 99 percent of all Texas school districts and charters earning a successful final rating for 2017-2018.

Created by the 77^th Texas Legislature in 2001, the School Financial Integrity Rating System of Texas (FIRST) is designed to encourage public schools to better manage their financial resources to provide the maximum allocation possible for direct instructional purposes.

The FIRST ratings are calculated using 15 financial indicators, such as administrative cost expenditures; the accuracy of a district or charter’s financial information submitted to TEA; and any financial vulnerabilities or material weaknesses in internal controls as determined by an external auditor.

Ratings for 2017-2018 are based on annual financial reports provided to TEA by districts and charters for the 2017 fiscal year. The financial accountability system requires TEA to review the audited financial reports from all districts and charters.

A school district or open-enrollment charter is assigned one of four possible letter grades (A, B, C or F), as well as a coinciding financial management rating (Superior, Above Standard Achievement, Meets Standard or Substandard Achievement).

For 2017-2018, the final FIRST ratings are as follows:

There are five critical indicators that result in an automatic F or Substandard Achievement rating should a school district or open-enrollment charter fail in that specific category – regardless of overall score.

In addition, FIRST ratings for charter schools operated by a public institution of higher education (IHE) are being assigned for the first time. Based on seven indicators, IHEs are assigned either a Pass or Fail rating. For 2017-2018, every public institution of higher education operating a charter school (7) received a FIRST rating of Pass.

For IHEs, there are two critical indicators that result in an automatic Fail rating should an IHE fail in that specific category – regardless of the overall score.

All school districts and charters are required to report information and financial accountability ratings to parents and taxpayers. In addition, districts and charters must hold a public discussion or hearing regarding its financial report.

TEA formally notified school districts and charters of their preliminary FIRST rating in August. At that time, any district or charter that wished to appeal its rating had an opportunity to submit a written appeal with supporting evidence.

Forty-one school districts submitted a request for an appeal of their preliminary FIRST rating. After a review of the submitted information, 13 appeals were granted. Additionally, six charters submitted a request for an appeal of their preliminary FIRST rating. After a review of the submitted information, two were granted.

To review the final 2017-2018 FIRST ratings for all districts and charters (plus view final FIRST ratings from previous years), visit the TEA website at http://tea.texas.gov/index4.aspx?id=3864.