Montgomery ISD Meets State Financial Assessment Expectations

Montgomery ISD received a standard achievement ranking for its performance in managing its financial resources for the 2019-2020 school year, below the audit report category.

Kris Lynn, Deputy Superintendent of Finance and Operations, presented the state-mandated annual financial assessment to MISD board members at a meeting on November 16.

The state’s program, known as the Financial Integrity Rating System of Texas or FIRST, rates districts using 20 financial metrics, ranging from pass / fail questions to numbered rankings.

Lynn explained that the district received a C rating due to the failure of question 17 on whether or not the district had an audit report free of “any material weaknesses in controls. internal ”. The results in this category gave the district a score of 79, instead of the expected 92.

The 2019-2020 audit report revealed two cases of internal control weaknesses, which were subsequently identified by new directors like Lynn who was hired in April 2020. The first case occurred in January 2020 and was related to a bond repayment transaction. ; the second was related to the funding and allocation of the vocational and technical education program.

“This year’s audit report will tell you that both of these findings have been addressed and corrected and are no longer issues,” Lynn said at the end of her presentation. “These are very good things that we are happy to report. “

He explained that the January transaction had not been properly recorded in the financial statements due to a vacancy in the CFO position at the time. And the second result was the result of the district failing to meet the 55% spending requirement on appropriate career and technical education spending.

Lynn said there was still room for improvement and “cleaning up” regarding the district’s financial situation during her presentation.

“We hired a new audit firm for this fiscal year, so we can get a fresh look and help us correct these issues faster,” Lynn said. The new audit report will be discussed at the December board meeting.

Willis ISD, which was also recently evaluated by FIRST for the year 2019-2020, also failed in the category of audit reports. Deputy Superintendent of Business and Finance Garrett Matej said a significant weakness with the new audit firm, Weaver and Tidwell, brought the score down. However, the district expects it to revert to an A rating next year.

“It is important to note that this had no impact on the financial well-being of Willis ISD and was simply a figure reported in the audit,” Matej wrote.

He pointed out that the district is otherwise in excellent financial condition and has maintained a healthy fund balance over the years.

Another category that contributed to MISD’s rating was its ability to cover short-term debt, determined by its current assets / current liabilities ratio in question 8.

The district received a 4 out of 10 in this category because its working capital ratio for that year was 1.78, and a ratio of 3.00 was needed to achieve the highest score. Lynn pointed out that this is roughly the same score he has received in years past and can be attributed to the county’s growth in recent years.

Due to the region’s growth, he said the county had had to spend additional funds to accommodate more students.

“This area of ​​Montgomery County, we have a lot of growth and as the growth comes, that means we have to expand the schools and build new ones,” he said, “and that comes with additional costs. . “

Lynn said that while FIRST is a good tool to help educate the community about district financial transactions, the rankings don’t tell the whole story.

“I want the community to understand that we are not happy, not satisfied with C, but not affected by this C rating,” he said. “The district is financially strong and we are continually reviewing our internal processes and procedures… so that we can maintain this financial strength. “

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