FIRST

Week Four Assignment, Part 1 – Understanding FIRST (Financial Integrity Rating System of Texas) in School Finance


 * 1) 1 __Indicators on Fund Balance__  - #1, 13, 14,19, 20, and 22 all refer to Fund Balance in some way as part of the indicators calculation. I find this important as an aspect of the FIRST system because Fund Balance is the savings account of the school district. It seems clear that the rating system is set up to protect the Fund Balance in districts and reward them for doing so with a positive rating. Fund balance is such an important aspect of fiscal management in the district. It is also evident from recent talk during the debate over funding in the legislature this year that fund balance is often viewed by non-educators as a “rainy-day fund” rather than the “checkbook balance” to keep our district checks from bouncing that it is meant to be. It is frightening that during the last legislative session, there was discussion of penalizing districts with healthy fund balances by having them use the money to offset state funding. Hopefully, this does not happen because our district has a very healthy fund balance that took years to grow.

Further, investing taxpayer money in a responsible manner that demonstrates good stewardship is paramount to earning and keep tax payer trust. One of our districts received a zero on #22 this year. Interesting note: 43% of Texas school districts received a score of 0 for this year (2009-2010) as compared to 7.5% in 2008-2009. (Did either or your districts get a 0? Annette - From Kevin - No, we actually got a “Superior Performance” and have for the past few years. Our Business manager is really good.)


 * 1) 2 __Financial Reporting__  - #3, 4, 5, 6, and 11 refer to the Reporting process or to the Audit process. I find this significant because this is the way districts are held financially responsible for the taxpayers money. Specifically, in #3, the district is rewarded or dinged if the Annual Audit Report has any disclosures. Compliance with the requirements for financial reporting is obviously very basic to the financial health of a district.


 * 1) 3 __Instruction__  - #7, 16, 17, and 18 refer to the district’s instruction or components of it. Districts can not achieve a Superior rating if their academic rating is not at least “academically acceptable.” (Indicator #7) One of the main objectives of the FIRST report is to ensure that districts’ expenditures have met the maximum allocation possible for instructional purposes. So, if a district receives a rating of “academically unacceptable”, the perception would be that funds were not allocated appropriately for instruction. However, indicator 18 is one that is consistently missed by my district and that is due to the large numbers of support staff we maintain. Should this really be a negative indicator on our financial status? (Annette) I think that would depend on what positions are held by the support staff. Are they supporting instruction daily?

Another interesting note is that a “No” in indicators 1, 2, 3, or 4, OR a “No” for indicators 5 & 6 results in a district achieving “Substandard Achievement.” The designers of the system obviously weighted these six indicators to highlight their basic importance.