1. Financial Integrity Rating System of Texas (FIRST Report) 2005
Pharr-San Juan-Alamo Independent School District
September 12, 2005

2. Financial Accountability History
Financial Integrity Rating System of Texas
Senate Bill 875, 76th Legislative Session
Developed by Commissioner with the Comptroller of Public Accounts
Proposal presented to Legislature in December 2000
Senate Bill 218, 77th Legislative Session
Proposed 21 standards for evaluating district financial condition
This is the third year of reporting
Standards are proposed to change

3. Proposed Changes to First for 05-06
Financial Integrity Rating System of Texas
Will be 26 indicators – up from 21
Looks at total unreserved net asset balance
District’s academic rating must exceed academically unacceptable
Assigns points based on operating expenditures per WADA in the General and Special Revenue Funds – must be less then $4,500 or do not receive full 5 points
Assigns points based on operating expenditures per WADA in the General Fund – must be less then $4,000 or do not receive full 5 points
Assigns 5 points if the district academic rating is recognized or exemplary
Looks at three year tax collection average and raises it from 96% to 98%
Decreases variance allowed for PEIMS data quality form 4% to 3%
Debt related expenditures changes from $770 per student to $250 per student
Assigns pints based on the percent of operating expenditures expended for instruction – 5 points assigned if greater than 65% - excludes function 34 and 35 from formula
Changes ranges for ratio of total staff to student from to 5 -14
Changes investment earnings from $15 per student to $40 per student and excludes debt service and capital projects fund

4. Goals of FIRST Facilitate Effective and Efficient Use of Resources
Financial Integrity Rating System of Texas
Facilitate Effective and Efficient Use of Resources
Strengthen Fiscal Accountability
Use currently collected data being reported and available from
PEIMS
Annual Audit Report

5. Objectives of FIRST Assess the quality of Financial Management
Financial Integrity Rating System of Texas
Assess the quality of Financial Management
Publicly Report this assessment
Provide analysis tool for school officials
Increase the proportion of Resources used in Instructional Activities
Identify and Recognize Outstanding Performance
Increase Financial Well Being of Public Schools
Implement a rating system that fairly and equitably evaluates the quality of management decisions

6. Additional Objectives for FIRST
Financial Integrity Rating System of Texas
Additional Objectives for FIRST
Simple and understandable
Applicable to all districts
Based on hard data
Allows for self administrations
Provides an early warning

7. How Ratings are Assessed
Financial Integrity Rating System of Texas
How Ratings are Assessed
Based upon 21 indicators
Failing to pass 5 CRITICAL indicators will result in automatic failing grade
Default on debt payment
Deficit fund balance in general fund
Annual financial report not filed within one month after 11/27 or 1/28 deadline
Qualified opinion on audit and material weaknesses in internal controls

8. How Ratings are Determined
Financial Integrity Rating System of Texas
Rating Worksheet – with 21 Questions
Based on “NO” Answers
Superior Achievement 0-2
Above Standard Achievement
Standard Achievement 5-6
Substandard Achievement More Than 6 or NO To CRITICAL Indicators
Pharr-San Juan-Alamo received a “Superior Achievement” Rating

9. Pharr-San Juan-Alamo received a “Superior Achievement” Rating
Financial Integrity Rating System of Texas
Pharr-San Juan-Alamo received a “Superior Achievement” Rating

10. School FIRST Sanctions
Financial Integrity Rating System of Texas
School FIRST Sanctions
Substandard Achievement rating could result in assignment of financial monitor or master

11. School FIRST Categories
Financial Integrity Rating System of Texas
School FIRST Categories
Critical Indicators – 5
Fiscal Responsibility indicators - 5
Budget indicators – 4
Personnel Indicators 3
Cash Management Indicators - 4

12. Financial Integrity Rating System of Texas
Critical Indicators
Was total fund balance less reserved fund balance greater than zero in the general fund? PSJA – Yes – This assures that the district has a positive amount of fund balance cash (savings that is not designated or reserved for a specific purpose)
Were there no disclosures in the Annual Financial Report and/or other sources of information concerning default on bonded indebtedness obligations? PSJA – Yes – there were None

13. Critical Indicators Continued
Financial Integrity Rating System of Texas
Critical Indicators Continued
Was the Annual Financial Report filed within one month after November 27th or January 28th deadline depending upon the district's fiscal year end date (June 30th or August 31st)? PSJA - Yes
Was there an unqualified opinion in Annual Financial Report? PSJA - Yes
Did the Annual Financial Report not disclose any instance(s) of material weaknesses in internal controls? PSJA – Yes it did not disclose any

14. Fiscal Responsibility Indicators
Financial Integrity Rating System of Texas
Tax collections
Was the percent of total tax collections (including delinquent) greater than 96%?
Yes, PSJA’s percent of total tax collection was at 99.71%
Data Quality
Did the comparison of PEIMS data to like information in Annual Financial Report result in an aggregate variance of less than 4 % of expenditures per fund type? PSJA – Yes – our variance was %

15. Fiscal Responsibility Indicators - Continued
Financial Integrity Rating System of Texas
Debt Management
Were debt related expenditures (net of IFA and/or EDA allotment) less than $770 per student? (If student growth exceed 2% over five school years or tax collections per penny > $100,000, then answer this Indicator Yes) PSJA – Yes – our debt, net of IFA/EDA is $362
Compliance With Rules and Regulations
Was there no disclosure in the Annual Audit Report of material noncompliance? PSJA - Yes

16. Fiscal Responsibility Indicators - Continued
Financial Integrity Rating System of Texas
Overall Business Management
Did the district have full accreditation status in relation to financial management practices? PSJA - Yes

17. Budgeting Indicators Financial allocations Budgetary Planning
Financial Integrity Rating System of Texas
Financial allocations
Was the percent of operating expenditures expended for instruction more than 54%?
Yes, PSJA expended more than 54%. We were at 56.06%
Budgetary Planning
Was the aggregate of budgeted expenditures and other uses less than the aggregate of budgeted total revenues and other resources plus beginning fund balance in general fund? PSJA - Yes

18. Budgeting Indicators - Continued
Financial Integrity Rating System of Texas
Facilities Acquisition and Construction Management
If the district's aggregate fund balance in the general fund and capital projects fund was less than zero, were construction projects adequately financed? PSJA – Yes
Cash Management
Was the ratio of cash and investments to deferred revenues (excluding amount equal to net delinquent taxes receivable) in the general fund greater than or equal to 1:1? PSJA - Yes

19. Personnel Indicators Administrative Cost Management
Financial Integrity Rating System of Texas
Personnel Indicators
Administrative Cost Management
Was the administrative cost ratio less than the standard in state law? PSJA – Yes, Our Ratio was at , the acceptable ratio is – The district is meeting TEA’s and state law’s cap on the percentage spent on administration

20. Personnel Indicators - Continued
Financial Integrity Rating System of Texas
Personnel Indicators - Continued
Personnel Management
Was the ratio of students to teachers within the ranges shown on the worksheet according to district size? PSJA – Yes, Our Ratio was at , based on our size, we had to fall between 13.5 and 22
Was the ratio of students to total staff within the ranges shown on the worksheet according to district size? PSJA – Yes, Our Ratio was at , based on our size, we had to fall between 6.6 and 14.0

21. Cash Management Indicators
Financial Integrity Rating System of Texas
Cash Management Indicators
Financial Strength
Was the total fund balance in the general fund more than 50% and less than 150% of optimum according to the fund balance and cash flow calculation worksheet in the Annual Financial Report? PSJA – Yes – Another measure of “adequate” fund balance

22. Cash Management Indicators Continued
Financial Integrity Rating System of Texas
Operating Cost Management
Was the decrease in undesignated unreserved fund balance less than 20% over two fiscal years? (If 1.5 times optimum fund balance is less than total fund balance in general fund, or if total revenues exceeded operating expenditures in the general fund, then answer this Indicator Yes) PSJA – Yes – The test here is to determine are we using too much of fund balance to pay for operating expenditures.

23. Cash Management Indicators Continued
Financial Integrity Rating System of Texas
Cash Management
Was the aggregate total of cash and investments in the general fund more than $0? PSJA – Yes, $68,110,620
Were investment earnings in all funds more than $15 per student? PSJA – Yes, $45

24. 21 Indicators answered Yes
Financial Integrity Rating System of Texas
PSJA RATING
SUPERIOR ACHIEVEMENT
21 Indicators answered Yes

25. Appreciation To PSJA School Board Arturo Guajardo - Superintendent
Financial Integrity Rating System of Texas
PSJA School Board
J. Fernando Lopez – President
G. Jaime Santa Maria – Vice President
Vangie Garcia-DeLeon – Secretary-Treasurer
Raul “Roy” Navarro – Asst. Secretary-Treasurer
Pete Garcia – Member
Reymundo Gonzalez – Member
Roy Rodriguez – Member
Arturo Guajardo - Superintendent