McKinney ISD officials have received a C from the Texas Education Agency for their financial transparency due to an error when reporting federal relief funds.

The district’s board of trustees reviewed the rating with Dennis Womack, MISD’s assistant superintendent of business, operations and technology, during a Dec. 18 board meeting.

Out of a possible score of a 100, MISD received a 79. The TEA’s scoring levels include:
  • A, superior: 90-100
  • B, above standard: 80-89
  • D, meets standard: 70-79
  • F, substandard: 0-69
The overview

The Financial Integrity Rating System of Texas, also called FIRST, is issued by the TEA. It measures the quality of a district’s reporting and management of finances to hold the district accountable for its financial management.

The rating is based on a number of factors, including:
  • Audit materials being submitted on time
  • Debt being paid on time
  • The average change in fund balance
  • A district’s cash on hand
  • Administrative costs
The FIRST rating is considered lagging data as the score for the 2022-23 school year is based on financial data from the 2021-22 school year.

Looking back

MISD has received a superior rating since the 2014-15 school year, according to district data.
The specifics

Of the 20 indicators scored, McKinney ISD received passing scores in all categories except for its financial reporting and compliance. If a district fails this indicator, then the highest possible score it can receive is a 79, Womack said.

Womack went on to explain that failing this indicator was due to reporting federal emergency funds incorrectly for the 2021-22 school year. The Elementary and Secondary School Emergency Relief Fund—also known as ESSER—was distributed by the U.S. Department of Education to address costs incurred during the COVID-19 pandemic.

The receipt of revenue from ESSER funds was recorded on data for the 2021-22 school year, when it should have been on the revenue sheet for the 2022-23 school year, Womack said.

The district appealed the score, but was denied and did not receive any communication from the TEA as to why the appeal was denied, Womack said.

Going forward

The rating has no impact on the financial position of the district, including its credit and bond ratings. Additionally, the district’s eligibility for recognitions and awards has not been affected.

“I can state with a high level of confidence that we will be back up to a supreme number next year,” Womack said.