Finance Week 4, Part 1

The FIRST (Financial Integrity Rating System of Texas) is a financial accountability system that measures the degree to which school districts and open-enrollment charters the quality of their financial management practices and their ability to maximize the performance of their financial resources. This system is mandated by Texas Administrative Code (TAC), Title 19, § 109.1001. From the state’s viewpoint, the school districts in Texas maximize the use of funds when they work to provide the largest allocation possible for direct instruction 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. There are several important components of the FIRST system. Our group has determined reserve funds, transparency, and consistent assessment of districts across Texas to be the most critical areas the FIRST system.
Reserve Funds: Districts with a healthy fund balance are able to use these funds when experiencing decreased funding from the state and the district can address unexpected expenditures that are likely to occur from time to time. Reserve funds are a critical component of any Texas’s school budget in this date in time. School districts are, in fact, receiving less state funding and many districts are experiencing unexpected expenditures as a result of a year-long drought. The Board of Trustees as well as school district officials are responsible for ensuring that the district makes responsible financial decisions and that the district can remain solvent, even when unexpected factors influence funding. On March 16, 2011, a "To The Administrator Addressed" letter was sent to school districts to inform them of changes to the FIRST rating system so they will not be penalized for dipping into their reserve funds during the current biennium due to the current financial situation the state is facing.
Transparency: School districts are required to explain how tax payer funds are used to fund education. Not only are districts required to manage funds appropriately, they are also responsible for showing that those funds were used to deliver services to the student body and support a high quality education. Additionally, this system of funding must have checks and balances to ensure that district expenditures are in line with district goals as well as the adopted budget. Transparency is the critical component that ensures districts are spending funds intended and that interested parties can observe this function.
Consistency: Consistency is a very broad terms but, it is one of the most important components of the FIRST system. This component determines that all school districts in Texas are held accountable for the same measures when assessing district financial integrity and that the state uses the same methodology to examine the quality of school district management decisions.
PART 1 REFLECTION
According to Dr. Lu Stephens, districts are held accountable for the Academic Excellence Indicator System (AEIS) and Financial Integrity Rating System of Texas (FIRST). I personally think it is good that FIRST is directly related to school districts and their accordance in utilizing the most of funds for instruction purposes. Our group decided that reserve funds, transparency, and consistency were the three most important components for the FIRST system. The Assistant Superintendent of Business Services in my district, Mrs. Tami Pierce, shared some more valuable input regarding FIRST. She discussed with me unqualified opinion, having controls in place to be compliant, and keeping expenditures less than resources. Basically, she stressed to me the importance of maintaining an internal control in place. Also, Mrs. Pierce elaborated on having a good qualified report. In other words, was there anything that was a problem or unqualified in the report? If so, then it is not good and districts should want to focus on correcting what is unqualified. Overall, I was able to learn some valuable things about FIRST from valuable resources, reading assignments, Dr. Lu Stephens interview, Mrs. Pierce’s interview, and collaborating with my WIKI group and having a discussion to choose the top three critical areas of FIRST.