EDLD+Week+4+Part+1-+Understanding+FIRST

EDLD 5342 Part 1- Understanding FIRST In the lecture this week, Dr. Lu introduced us to the other district report aside from the AEIS that takes precedence in the superintendent’s responsibilities, FIRST (Financial Integrity Rating System of Texas). “Texas Education Agency (TEA or agency) is beginning the process of modifying indicators in the 2010-2011 School Financial Integrity Rating System of Texas (FIRST) that require school districts and charter schools to maintain approximately 60 days of operating expenses in their general fund account. The purpose of the financial accountability rating system (Texas Administrative Code (TAC), Title 19, § 109.1001) is to ensure that school districts and open-enrollment charter schools are held accountable for the quality of their financial management practices and achieve improved performance in the management of their financial resources. The system is designed to encourage Texas public schools to manage their financial resources better in order to provide the maximum allocation possible for direct instructional purposes. The system will also disclose the quality of local management and decision-making processes that impact the allocation of financial resources in Texas public schools.” Our group consensus indicates this report gives TEA an overview of how funds are being utilized within the district, the amount of funds in the general fund account, and the actual accountability rating given to the district based on standard indicators giving an overall picture of the district’s financial health. However, when analyzing the Socorro ISD FIRST Status Detail, the district budget director, Susan Olson, and I determined indicator 5- Was there an Unqualified Opinion in the Annual Financial Report?, indicator 6- Did the Annual Financial Report Not Disclose Any Instance(s) of Material Weaknesses in Internal Controls?, and indicator 8- Was the Three-Year Average Percent of Total Tax Collections (including delinquent) Greater than 98% were the three most important components of the FIRST Report. In the case of indicator 5, if there is an unqualified opinion in the financial report, this could throw off all of the calculations. Qualified personnel that are thoroughly vetted and experienced in school financial accounting are needed since it is a process very different from any other kind of public and private accounting practices and has such a labyrinth of regulations. For indicator 6, internal checks and balances are critical to ensuring accounting practices keep within legal mandates. Often when these are not kept in balance, districts have difficulty with ethics violation that can lead to lawsuits. Indicator 8 measuring tax collection revenue is critical to produce a working budget with verified funds coming in to cover costs. All the indicators have importance, but these three have considerable impact on whether an institution has sound financial backing to operate efficiently.