Understanding FIRST (Financial Integrity Rating System of Texas) in School Finance

School FIRST, The School Financial Integrity System of Texas is an accountability system for Texas school districts.   In 2006, performance was added as a consideration for accreditation with academic performance included. The Texas Education Code requires the commissioner of education to adopt rules for the management of the FIRST system. These rules are located in the TEXAS Administrative Code, Title 19. Chapter 109, subchapater AA. In group 4, purpose or goal was viewed as one of the three important components of FIRST. FIRST is designed to provide financial management support to persuade Texas public schools to supervise their financial resources to gain the most money possible for direct instructional purposes.  FIRST collects data determined by staff and student data reported for a school year and financial reported for the corresponding fiscal year (12- month period beginning either July 1 or September 1 of each year). School districts provide information to TEA through various financial reports, audit reports and data reported through PEIMS.    The second most important component is the Financial Accountability Ratings. TEA considers a district’s School First rating when assigning an accreditation status. TEA finalizes a school FIRST rating worksheet for each district.  There are 22 indicators or questions split into critical or noncritical indicators. The noncritical indicators weigh a total of 95 points, with each separate indicator valued a maximum of five points each.                                                                                                   Districts may be assigned one of four financial accountability ratings to school districts:  Superior Achievement, Above –Standard Achievement, Standard Achievement, or Substandard Achievement.    Additionally, the third important component is the public hearing to distribute the Annual Report containing the district’s School FIRST rating.  The public hearing may be combined with a scheduled regular board meeting with the board of trustees. School district’s must be transparent and follow the School FIRST rules for the public hearing to be held in a district facility, board must give notice of the hearing to taxpayers and parents based on the financial data, the accountability rating, financial disclosures of board members and the superintendent’s financial information. The report must provide financial management information that will be beneficial to taxpayers, especially information that may have affected the district’s performance under the indicators.   Finally, School FIRST is a rating system based upon data reported by school district’s and reviewed by TEA.  The manageable worksheet tool that is completed by TEA. The disclosures are reported in the district’s public financial management report once the final rating is issued. In my action research I noticed the Financial Solvency Review Process was not mentioned in the assignment, but Texas now requires a school district to provide TEA with financial information that will allow TEA to foresee the districts future financial solvency.  Districts that are in danger of insolvency are required to submit a financial plan to TEA for approval.  If the plan is not submitted or does not comply with an approved plan an accreditation warning will be issued to the district.