TEA has adopted changes to the financial accountability ratings (FIRST) rule. The rule reads largely as it did when proposed. However, based on feedback from TASBO and others, the Agency did clarify language around a number of indicators to specify sources of data, corrected some erroneous calculations, and eliminated indicator 21 related to the issuance of new capital appreciation bonds (CABs). If you would like to read a summary of public comments and agency responses, you can do so
here. If you would like to read the updated rule, you can do so
here.
The most significant changes will not come to FIRST until the ratings that will be issued in the 2020-2021 school year, based on data from the 2019-2020 school year (FY 2020). Districts will want to begin paying special attention to a number of areas that have not previously been included in FIRST analyses. Some of these include:
- Whether a comparison of budgeted to actual revenue for state and local funds shows a variance of less than 10 percent when averaged over the last three fiscal years (indicator 10). Note that because this indicator is based on three years of data, it becomes immediately relevant, even though the new system is not phased in until FY 2020.
- Whether a comparison of actual ADA to the ADA submitted by districts to the TEA through the pupil projections module prior to each legislative session is within the required range of variance (indicator 15). Since we will have a legislative session in 2019, districts will be submitting pupil projections data for the 2019-2020 and 2020-2021 school years this November.
- Whether districts discussed the impact of the state use of prior year property-values (the funding lag) at a board meeting within 120 days of adopting the budget (indicator 20).
We will post an updated template to help you understand and project FIRST ratings in the coming days.