FIRST

Jay Cantrell

The definition of the FIRST system used by the Texas Education System in its most simple terms is the financial report card of a school district or open-enrollment charter.  Every district will be assigned a financial rating of Superior Achievement, Above Standard Achievement, Standard Achievement, Substandard Achievement or Suspended – Data Quality.  The FIRST system is also expected to encourage districts and open-enrollment charters to provide maximum financial support for instructional purposes by proper management of the district’s financial resources.  The district’s financial procedures will also be scrutinized during the FIRST evaluation process.  Just as the superintendent is responsible for the district’s educational report card, he or she is also responsible for the financial report card and must be aware of areas needing improvement and make plans to address those areas.  While there are several important components of the FIRST system, our group has determined that reserve funds, transparency, and consistent assessment of districts across Texas to be the most critical components.

In 2002 FIRST was one of two accountability systems TEA developed for the purpose of monitoring and holding districts accountable for financial decisions that were made.  A  school’s FIRST Annual Financial Management Report template consists of the following items:

Superintendent's Current Employment Contract

Reimbursements received by the Superintendent and Board Members

Outside Compensation and/or Fees Received by the Superintendent for Professional Consulting and/or Other Personal Services

Gifts Received by Executive Officers and Board Members

Business Transactions Between School District and Board Members

Summary schedule of Data Submitted under the Financial Solvency Provisions of TEC 39.0822

Additional Financial Solvency Questions

A very important part of the superintendent's job is to monitor, analyze, and develop improvements through this rating system process to help improve the district’s education of students and to make sure district resources are optimized for students’ learning and safety.

Our first component that we found to be most important was accountability.  Accountability ensures that districts have a valid, objective system in place to measure financial compliance and efficiency.  This will help to insure that a district is managing resources responsibly so that allocations to instructional practices are kept as the primary focus. 

Next we chose self-monitoring due to the fact that it develops an instrument with measureable components and weighs them in order to paint an overall picture of the financial health of the district and outlines specific objectives for districts to work on to improve financial ratings.  For example, currently districts are required to have 60 days of operating expenses available for emergency situations. Districts that have accomplished this financial goal are in better position to be able to handle changes in funding and the ever-changing economic conditions.

Finally our group decided upon public disclosure for its importance in providing an accountability rating that is accessible to the public. This allows the educational community stakeholders to view financial ratings and stay aware of any financial red flags.  This rating is based on standard indicators and gives an overall picture of the district’s finances.

Trevor Edgemon

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.

The” FIRST” started in 2002 and is one of two accountability systems that was started by the Texas Education Agency for the purpose of holding school districts accountable for financial resources. The School FIRST Annual Financial Management Report template consists of Superintendent's Current Employment Contract, Reimbursements received by the Superintendent and Board Members, Outside Compensation and/or Fees Received by the Superintendent for Professional Consulting and/or Other Personal Services, Gifts Received by Executive Officers and Board Members), Business Transactions Between School District and Board Members, Summary schedule of Data Submitted under the Financial Solvency Provisions of TEC 39.0822, and Additional Financial Solvency Questions). This is a very important part of the superintendent's job to monitor, analysis, and implement improvements through this rating system process to improve education and make sure resources are maximized for students learning and safety.

1. Accountability- ensures that districts have a valid, objective system to measure financial compliance and efficiency.  Managing resources responsibly so that allocations to instructional practices are kept as focus. 
2. Self-Monitoring- it develops an instrument with measureable components and weighs them in order to paint an overall financial picture while setting out specific objectives that districts can work on to improve their ratings.  Example: Currently districts are required to have 60 days of operating expenses available. Districts that have this cushion are in better position to be able to handle changes in funding and economic conditions.
3. Public Disclosure- It’s an accountability rating that is     accessible to the public. This allows stakeholders to view financial ratings.  This rating ranges from Superior Achievement down to Suspended—Data Quality. This rating is based on standard indicators and gives an overall picture of the district’s financial health.

Shawn Clubb

The School Financial Integrity Rating System of Texas, or School FIRST, is a financial accountability system for Texas school districts. “The system is designed to encourage Texas public schools to manage their financial resources better in order to provide the maximum allocation possible for direct instructional purposes” (19 TAC Chapter 109, Subchapter AA, 109.1001. Purpose of Financial Accountability Rating System).

Under School FIRST, data is collected to monitor the financial performance of school districts. It contains 22 questions, or indicators, which are designed to assess the district’s management of financial resources.

The first six questions are the Critical Indicators. They require a “yes” or “no” answer and they focus on the fund balance and annual financial reporting. To receive a Superior Rating a school district must be able to answer “yes” to these questions plus question 7.

I think Indicator 1 is one of the most important components. It asks, “Was the total fund balance less reserved fund balance greater than zero in the general fund?” This determines if the district has money set aside for emergencies, otherwise considered “savings.” It is important that the district have funds set aside for unexpected emergencies. When developing a budget it is impossible to know of all situations that may arise in the following year. Having extra money set aside will prevent using money set aside for other purposes.

Indicator 6 is also one of the most important components. “Did the annual financial report not disclose any instance(s) of material weaknesses in internal controls?” A “no” answer would mean that there are weaknesses in which a district cannot properly account for it use of public funds. Schools must accurately keep up with where money is going.

One last component in which I thought was important was Indicator 10, “Were there no disclosures in the annual audit report of material noncompliance?” This means there is no disclosure indicating the school district failed to abide by the laws, rules and regulations for a government entity.