Week+4,+Part+1+Understanding+FIRST

Understanding FIRST in School Finance Group 5: Kristy Brown, Mark Parkerson, and James Arnett

According to this weeks lecture from Dr. Jenkins and Dr. Stephens, FIRST is for the accountability of a school district's business and financial operations. It is to encourage school districts to manage their financial resources better in order to provide the maximum money possible for instructional purposes. FIRST stands for the Financial Integrity Rating System of Texas. There is an extensive amount of information about the financial accountability rating system on the TEA website and we encourage you to review the website (www.tea.state.tx.us/index4.aspx?id=3864). The purpose of the financial accountability rating system is to ensure that school districts will be held accountable for the quality of their financial management practices and achieve improved performance in the management of their financial resources. 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. 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. An evaluation of the long-term effectiveness of the system should disclose a measurable improvement in the quality of Texas public schools' financial decision-making processes. In accordance with Texas Education Code (TEC), Chapter 39, Subchapter D, each school district must be assigned a financial accountability rating by the Texas Education Agency. Beginning with fiscal year 2010-2011, the financial accountability rating of a school district is based on its overall performance on certain financial measurements, ratios, and other indicators established by the commissioner of education. There are five types of ratings school districts may receive. They are Superior Achievement, Above Standard Achievement, Standard Achievement, Substandard Achievement, and Suspended-Data Quality. The commissioner of education may apply sanctions to a district that is assigned a Substandard Achievement rating and may require other corrective actions. If serious data quality issues are disclosed by the commissioner of education, a Suspended-Data Quality rating shall be assigned to the school district. The Suspended--Data Quality rating will be assigned until the school district successfully resolves the data quality issues. The commissioner of education may apply sanctions to a school district that is assigned a Suspended--Data Quality rating and may require other corrective actions. After receiving their rating the district must report the information and financial accountability ratings to parents and taxpayers by preparing and distributing an annual financial management report and providing stakeholders an opportunity to comment on the report at a public hearing or board meeting. Each group member interviewed their business managers of their own district and came up with a list of their three most important components of FIRST. After reviewing each of our groups individual three components we collaboratively decided on three overall most important components of FIRST. Our first component was Sound Financial Management. FIRST encourages schools to practice integrity in their finances and manage their finances effectively. The second component was Public Accountability. Stakeholders are made aware of the district's financial rating just as they are the AEIS rating. Stakeholders can hold schools accountable to manage finances effectively just as they hold schools accountable for educating students effectively. A public meeting is held to discuss the district's rating. The third component was the Analysis of the District's Audit Report. The district's finances are carefully audited, and a report must be submitted as part of the rating system. The review of all the information acquired through our interviews, listening to the lecture and reading over the information on the TEA website about FIRST helped us reach our decision on what we collectively thought are the three most important components of the Financial Integrity Rating System of Texas. We now have a greater understanding of our states rating system for school finance.