By Megan Wehring
DRIPPING SPRINGS – Dripping Springs ISD received a “C” by the Financial Integrity Rating System of Texas (FIRST).
FIRST ensures that Texas public schools are held accountable for the quality of their financial management practices and that they improve these practices, according to the Texas Education Agency. The system is designed to encourage Texas public schools to better manage their financial resources and provide the maximum allocation possible for direct instructional purposes.
The reporting was originally mandated by Senate Bill 875 of the 76th Texas Legislature in 1999.
“There have been many changes to it over the years,” said Elaine Cogburn, deputy superintendent for finance and operations, during a public hearing on Dec. 12. “House Bill 5 of the 83rd Legislature married the FIRST and the solvency indicators together to become all under the FIRST rating.”
Cogburn said that requirements consist of preparing the FIRST Financial Management Report, which includes required disclosures, advertising a public meeting and holding a public meeting to discuss the rating.
While DSISD scored 98 points out of 100 on all indicators, it received a “C” (standard achievement/meets standard) due to its failure to meet the requirements under Indicator 17, which asks: “Did the external independent auditor report that the AFR [annual financial report]was free of any instance(s) of material weaknesses in internal controls over financial reporting and compliance for local, state or federal funds?”
The district’s auditor’s report pointed out misstatements in various general ledger account balances including the failure to record retainage payable in the Capital Projects Fund. DSISD filed an appeal of the finding and rating with TEA, but it was denied on Nov. 4.
Two points were lost on Indicator 12, which asks if the debt per $100 of assessed property value ratio was sufficient to support future debt repayments. To earn the maximum 10 points, a district’s ratio of debt per $100 of assessed property value must be under 4.0, while DSISD’s ratio of debt was 4.6388.
“Regardless of the rating, the district is financially strong,” Cogburn said. “We ended the 2021-22 year with a fund balance of $47 million, which is over seven months of operating costs. The audit did not find any questioned costs or findings regarding day-to-day operations. Our current business office staff is strong and making positive changes.”
Neighboring districts Hays CISD and Austin ISD both received an “A” (superior achievement) rating this year, which is based on FY 2020-21 data.
Cogburn said the district anticipates losing some points on Indicator 18 for the upcoming 2022-23 rating. Indicator 18 asks if the external independent auditor indicated the AFR was free of any instance(s) of material noncompliance for grants, contracts and laws related to local, state or federal funds.
“The 2022-23 rating will be based on the 2021-22 financial audit. We anticipate losing all 10 points on Indicator 18, so that would start us at a 90 and then if we score eight points on the other, we are potentially looking at an 88 for next year’s rating.”
The public can view the report in the Dec. 12 board meeting agenda. The DSISD board is slated to meet again on Jan. 17 at 6:30 p.m. in the Central Office Board Room, located at 510 W. Mercer St.
