The overview
The Financial Integrity Rating System of Texas, also called FIRST, is issued by the Texas Education Agency, or TEA.
FIRST ensures “that Texas public schools are financially accountable and [use] their resources effectively to provide quality education,” according to a presentation by the district.
According to the presentation, the rating is based on a number of factors, including:
- Financial solvency through assets and liabilities
- Budgetary practices
- Debt management
- Efficiency in managing public funds
Diving in deeper
The FIRST rating utilizes 21 indicators, according to district documents. These include whether the district submitted financial documents to the TEA within the required time frame, if the district complied with debt payments by the end of the fiscal year, if cash on hand was sufficient, and whether the current assets and liabilities ratio was sufficient to cover short-term debt.
PISD failed the ceiling for Indicator 4, which measured if the district made timely payments to the Teachers Retirement System, Texas Workforce Commission, IRS and other government agencies.
PISD Superintendent Larry Berger noted the ceiling failed due to a Texas Sales and Use Tax warrant hold. Even though the issue surrounding the warrant hold was resolved and cleared within 30 days, the maximum points and highest rating that district could’ve received was 95 points.
Other indicators in which the district did not earn a 10/10 score were indicators 8 and 11.
Indicator 8 assesses if the district’s financial health is stable enough to manage its short-term debts. PISD scored a 6/10, per the presentation.
The presentation noted the district will be implementing several strategies to increase its current assets and decrease its current liabilities for fiscal year 2024-25.
Indicator 11 assesses whether the district’s financial structure is stable enough to handle its long-term obligations without jeopardizing its financial position, according to the presentation. PISD scored an 8/10.
“We did not earn full points in either one of those indicators last year or this year, but our [chief financial officer] is making sure that we are looking at those and finding ways to correct that,” Berger said at the meeting.
