Scott Wrehe, Keller ISD chief financial officer, informed board members on Dec. 11 the district earned a C rating from the Financial Integrity Rating System of Texas for the 2022-23 academic year.

The backstory

According to district documents, FIRST provides an annual financial accountability rating for all school districts in Texas. The 2022-23 rating Wrehe presented during a public hearing at the regular Dec. 11 school board meeting—as required by the Texas Education Agency—is based on fiscal year 2021-22 data.

“The state’s school financial accountability rating system ensures that Texas public schools are held accountable for the quality of their financial management practices and that they improve those practices,” Wrehe said.

The details

According to district documents, KISD passed all critical indicators and received a score of 74 out of a possible 100—or a C rating—which is considered “Meets Standard” for 2022-23. The prior year, the district scored 76 out of 100.

Wrehe said the ratings break down as follows:
  • 90-100 points: A, or Superior
  • 80-89 points: B, or Above Standard
  • 70-79 points: C, or Meets Standard
  • 0-69 points: F, or Substandard Achievement
Wrehe said all critical indicators must be passed for a district to receive a rating higher than Substandard Achievement.

The district earned a C rating due to two reasons, Wrehe said. One: the district’s fund balance remains under TEA’s recommendation, and two: it is on a decreasing trend.

Wrehe pointed out the following:
  • In FY 2020-21, KISD's fund balance was $82 million—$5.8 million lower than the TEA's recommended amount.
  • In FY 2021-22, KISD's fund balance was $69.6 million—$17.7 million lower than the TEA's recommended amount.
  • In FY 2022-23, KISD's fund balance was $47.1 million—$37.2 million lower than the TEA's recommended amount.
“As our expenditures have continued to increase due to inflation, our revenue has been flat or declining for the past few years,” Wrehe said. “Just to sustain our finances, we’ve had to dip into fund balance the last two years.”

Diving in deeper

Interim Superintendent John Allison noted he believes a lack of support from the Texas Legislature and the governor for public education is what’s causing these changes to fund balances in KISD and other districts across the state.

Allison pointed out the following reasons why he believes school districts such as KISD have been forced to use fund balances and why it isn’t sustainable:
  • No additional funding going on five years
  • A fourth special legislative session that garnered no dollars for public education
  • Over $50 million in underfunded mandates the state requires
  • Historic inflation at 17%
“The state’s failure to provide adequately for public schools is creating this scenario where school boards have no choice to use fund balance to continue to provide the kind of education that Keller parents want,” Allison said. “It’s unacceptable.”