DRIPPING SPRINGS — Dripping Springs ISD earned the highest rating of “A: Superior Achievement,” and a numerical score of 98, on the Texas Financial Integrity Rating System of Texas (FIRST) report for the 2023-24 rating year.
During its Oct. 28 meeting, the DSISD Board of Trustees listened to a presentation on the report from director of finance Joseph Riggs, as well as held a public hearing on the item.
According to Riggs, the FIRST does the following: measures the quality of a school district’s financial management and reporting; holds school districts accountable for the quality of their financial management practices; and is designed to encourage Texas public schools to better manage their financial resources to provide the maximum allocation possible for direct instructional purposes. It is also a tool that creates transparency and discloses the quality of local management and decisionmaking processes that the school district uses concerning the financial resources the district receives.
It originated with Senate Bill 875 of the 76th Legislature and then, was later revised by House Bill 5 of the 83rd Legislature to include a process for anticipating future financial solvency of the district.
The district’s requirements for this include preparing the FIRST Financial Management Report and disclosing the report by advertising the public meeting, as well as holding the public meeting to discuss the rating, Riggs explained.
The current DSISD rating is based on the prior year audited financial data: “What that means for us is that the 23-24 rating is based on the 2223 financial data that we audited last fiscal year,” said Riggs. “So, we are one year behind.”
This year, there are 21 indicators that are used to determine the rating. They measure compliance with audit reporting, timely debt and employee benefit related payments, healthy fund balance levels and activity, relationship of district revenues to expenditures and accuracy of student attendance estimates and consistency of staff ratios, according to Riggs.
“Two solvency indicators returned in the 2023-2024 rating system after not being scored for multiple years. The two indicators are indicator five, which is a net position governmental accounting indicator, and number 14, [which is] student growth/ staff ratio indicator,” Riggs explained. “They added a new indicator this year, which is indicator number 21, and it’s a financial hardship indicator.”
DSISD lost two points in its overall numerical score of 98 on indicator eight, with receiving a score of eight out of 10. The indicator asks: “Was the measure of current assets to current liabilities ratio for the school district sufficient to cover shortterm debt?”
Indicator eight measures whether the school district had sufficient short-term assets at the end of the fiscal year to pay off its shortterm liabilities. According to Riggs’ presentation, points are earned based on where the district's ratio falls on a sliding scale; the district's ratio of current assets to current liabilities was 2.982, which did not exceed the minimum ratio of 3.0 to earn the full 10 points.
Trustee Tricia Quintero questioned how recapture would have affected the scoring on indicator eight.
The recapture payments are not due until after the fiscal year is over and the final calculation of the recapture payment is always in flux as the district approaches an audit, Riggs responded. Therefore, the district is using estimates to post liabilities for that and last year, DSISD paid more than $11 million in recapture, Riggs said.
“It was a healthy amount. We did make a payment in May to attempt to reduce that liability, but the full amount was not known,” he said, “So, we had that liability on the books when we closed our books at the end of the year.”
Quintero continued to ask if the district would not be able to score 10 out of 10 points on that indicator in the future.
“It’s possible. The accrued payroll that we had on our books was close to what we had in recapture. That’s just a required liability that we post at year-end because we pay payroll over 10 months and then we have to pay it out over 12,” Riggs explained. “But we are going to do our best to minimize that and try to receive full points in the future. Some of that is dependent on information we have available and some of it is dependent on stuff we don’t have control over.”
While the district did lose two points on one indicator, DSISD’s numerical score still increased by eight points from the 2022-23 rating year — the district has received the highest rating for all but one year.
The 2024-25 rating will be based on the 202324 financial audit and according to Riggs, the district is considered to be financially strong.
“We have a fund balance of over $49 million, which is about six months of operating expenditures currently,” the director of finance concluded. “There were no questioned costs or findings related to dayto- day operations on this audit and the current Financial Services staff is strong and continuing to make positive changes.”
To listen to the full presentation, visit www. dsisdtx.us/page/boardmeeting- livestream. More information about Texas Education Agency’s FIRST can be found at bit.ly/3YIIpkD.
