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TITLE 19EDUCATION
PART 2TEXAS EDUCATION AGENCY
CHAPTER 109BUDGETING, ACCOUNTING, AND AUDITING
SUBCHAPTER AACOMMISSIONER'S RULES CONCERNING FINANCIAL ACCOUNTABILITY
DIVISION 1FINANCIAL ACCOUNTABILITY RATING SYSTEM
RULE §109.1002Financial Accountability Ratings

(a) In accordance with the Texas Education Code (TEC), Chapter 39, Subchapter D, each school district and open-enrollment charter school must be assigned a financial accountability rating by the Texas Education Agency (TEA). The specific procedures for determining financial accountability ratings will be established annually by the commissioner of education and communicated to all school districts and open-enrollment charter schools.

(b) For fiscal years 2002-2003, 2003-2004, 2004-2005, and 2005-2006, each 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 in the financial accountability rating form provided in this subsection, entitled "School FIRST - Rating Worksheet," effective May 2003.

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(c) For fiscal years 2006-2007 and 2007-2008, 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 in the financial accountability rating form provided in this subsection, entitled "School FIRST - Rating Worksheet Effective August 2006." On this form, Indicator 13, "Was The Percent Of Operating Expenditures Expended For Instruction More Than or Equal to 65%?, " was phased in over a three-year period, as follows.

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  (1) For fiscal year 2006-2007, the indicator was "Was The Percent Of Operating Expenditures Expended For Instruction More Than or Equal to 55%?"

  (2) For fiscal year 2007-2008, the indicator was "Was The Percent Of Operating Expenditures Expended For Instruction More Than or Equal to 60%?"

  (3) For fiscal year 2008-2009 and beyond, the indicator was repealed.

(d) For fiscal years 2008-2009 and 2009-2010, 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 in the financial accountability rating form provided in this subsection, entitled "School FIRST - Rating Worksheet Dated March 2010."

Attached Graphic

(e) For fiscal years 2008-2009 and 2009-2010, the financial accountability rating of an open-enrollment charter school is based on its overall performance on certain financial measurements, ratios, and other indicators established by the commissioner in the financial accountability rating form provided in this subsection, entitled "Charter School - School FIRST - Rating Worksheet Dated March 2010."

Attached Graphic

(f) 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 in the financial accountability rating form provided in this subsection, entitled "School FIRST - Rating Worksheet Dated October 2013."

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  (1) A school district that received a 2012 School Financial Integrity Rating System of Texas (FIRST) rating of substandard achievement, related to its 2010-2011 fiscal year financial data, based on the financial accountability rating form that was provided as a figure in this subsection as it existed October 18, 2011, may request that the TEA recalculate its 2012 School FIRST rating based on the financial accountability rating form that is currently provided as a figure in this subsection. The deadline for submitting a request is December 15, 2013, and the TEA will disregard any request received after that date.

  (2) On receiving a request, the TEA will recalculate the school district's 2012 School FIRST rating and provide the district written notice of its recalculated rating. The TEA will consider the recalculated rating as the school district's final 2012 School FIRST rating, and a school district may not appeal a recalculated rating issued under this paragraph. This paragraph and paragraph (1) of this subsection expire March 1, 2014.

(g) Beginning with fiscal year 2010-2011, the financial accountability rating of an open-enrollment charter school is based on its overall performance on certain financial measurements, ratios, and other indicators established by the commissioner in the financial accountability rating form provided in this subsection, entitled "School FIRST for Charter Schools - Rating Worksheet Dated October 2013."

Attached Graphic

  (1) An open-enrollment charter school that received a 2012 School FIRST for Charter Schools rating of substandard achievement, related to its 2010-2011 fiscal year financial data, based on the financial accountability rating form that was provided as a figure in this subsection as it existed October 18, 2011, may request that the TEA recalculate its 2012 School FIRST rating based on the financial accountability rating form that is currently provided as a figure in this subsection. The deadline for submitting a request is December 15, 2013, and the TEA will disregard any request received after that date.

  (2) On receiving a request, the TEA will recalculate the charter school's 2012 School FIRST rating and provide the charter school written notice of its recalculated rating. The TEA will consider the recalculated rating as the charter school's final 2012 School FIRST rating, and a charter school may not appeal a recalculated rating issued under this paragraph. This paragraph and paragraph (1) of this subsection expire March 1, 2014.

(h) A financial accountability rating by a voluntary association is a local option of the district or open-enrollment charter school, but it does not substitute for a financial accountability rating by the TEA.

(i) The TEA will issue a preliminary financial accountability rating to a school district or open-enrollment charter school within 150 days of its complete financial data being made available to TEA staff. The financial accountability rating for a particular year will always be based on complete and audited financial data from the previous fiscal year given the availability of the data. For example, the final 2010 School FIRST rating issued in August 2010 is based on complete and audited financial data for the 2008-2009 fiscal year and is the financial accountability rating for the 2009-2010 school year for the purposes of §97.1055 of this title (relating to Accreditation Status).

  (1) The issuance of the preliminary or final rating will not be delayed if a district or open-enrollment charter school fails to meet the statutory deadline for submitting the annual financial and compliance report. Instead, a rating of Suspended-Data Quality under §109.1003(a)(5) of this title (relating to Types of Financial Accountability Ratings) will be issued.

  (2) A district or open-enrollment charter school may submit a written appeal requesting that the TEA review a preliminary rating if the preliminary rating was based on a data error solely attributable to the TEA's review of the data for any of the indicators.

    (A) The TEA office responsible for financial accountability must receive the appeal no later than 30 days after the TEA's release of the preliminary rating, and the appeal must include substantial evidence that supports the district's or open-enrollment charter school's position.

      (i) Only appeals that would result in a change of the preliminary rating will be considered.

      (ii) TEA staff will review information submitted by the district or open-enrollment charter school to validate the statements made to the extent possible. The TEA will examine all relevant data.

      (iii) TEA staff will prepare a recommendation and forward it to an external panel for review. This review panel will provide independent oversight to the appeals process.

      (iv) The external review panel will examine the appeal, supporting documentation, staff research, and the staff recommendation. The review panel will determine its recommendation.

      (v) The external review panel's recommendation will be forwarded to the commissioner.

      (vi) The commissioner will make a final decision in accordance with the timeline specified in subparagraph (E) of this paragraph.

    (B) Appeals received 31 days or more after the TEA issues a preliminary rating will not be considered.

    (C) Errors by a district or open-enrollment charter school in recording data or submitting data through the TEA data collection and reporting system do not constitute a valid basis for appealing a preliminary rating.

    (D) A district that is the fiscal agent for a shared services arrangement (SSA) and has the staff of the SSA on its payroll may appeal the two indicators related to student-to-teacher and student-to-staff ratios if it fails these indicators because of the number of staff that are SSA staff. The district must provide the TEA with the number of staff that are employees of the district and the number of staff that are part of the SSA. This adjustment should not be a factor for an open-enrollment charter school that is a fiscal agent since the SSA reporting requirements are different from those for a school district.

    (E) If the TEA receives an appeal of a preliminary rating, the TEA will issue a final rating to the school district or open-enrollment charter school no later than 45 days after receiving the appeal.

    (F) If the TEA does not receive an appeal of a preliminary rating, the preliminary rating automatically becomes a final rating on the 31st day after issuance of the preliminary rating.

    (G) A final rating issued by the TEA pursuant to this section may not be appealed under the TEC, §7.057, or any other law or rule.


Source Note: The provisions of this §109.1002 adopted to be effective October 20, 2002, 27 TexReg 9572; amended to be effective May 7, 2003, 28 TexReg 3720; amended to be effective August 13, 2006, 31 TexReg 6215; amended to be effective July 2, 2007, 32 TexReg 3988; amended to be effective May 31, 2010, 35 TexReg 4398; amended to be effective February 3, 2011, 36 TexReg 414; amended to be effective October 18, 2011, 36 TexReg 6941; amended to be effective October 3, 2013, 38 TexReg 6589

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