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Financial Solvency Review

The Texas Education Agency (TEA) developed the financial solvency review to alert school districts and open-enrollment charter schools to circumstances that could lead to financial insolvency.  

 

Law and Rules 

See the links below for Texas laws and rules relating to financial solvency.

 

Financial Solvency Final Determination

Upon completion of a review process developed in accordance with the requirements of House Bill (HB) 3, TEA has identified the following school districts and open-enrollment charter schools as having circumstances that could lead to financial insolvency.

Excel (14KB)   PDF (46 KB)

Background

The financial solvency review process was developed in accordance with the requirements of HB 3, passed by the 81st Texas Legislature in 2009. This bill added Section 39.0822, Financial Solvency Review Required, and Section 39.0823, Projected Deficit, to the Texas Education Code.

In response to the requirements of HB 3, TEA adopted 19 Texas Administrative Code (TAC) §109.1101, Financial Solvency Review. This rule describes how TEA uses financial indicators including financial data, student counts, and staffing information to identify local education agencies (LEAs) with circumstances that could lead to financial insolvency. See the TEA’s specific methodology.

Determination Process

Some LEAs failed the financial indicators and were placed on a preliminary list. These LEAs received an opportunity to respond to TEA with interim financial data to address the failed financial indicators. TEA carefully reviewed these responses and determined that some LEAs did not have circumstances that would lead to financial insolvency. However, the LEAs on the list referred to above either did not respond to TEA or were still determined to have circumstances that could lead to financial insolvency.

Financial Plan Requirements

These listed LEAs must have submitted a financial plan to TEA for approval per Section 39.0823(b) of the Texas Education Code (TEC). The agency approved the plan only if it determined that the plan would permit the LEA to avoid the projected insolvency.

Failure to comply with all specified requirements related to the financial plan may affect an LEA’s accreditation status. TEC Section 39.0823(c) states that the commissioner shall assign an LEA an accredited-warned status if one of the following occurs:

  1. The LEA fails to submit a plan.
  2. The LEA fails to obtain approval from the agency for a plan.
  3. The LEA fails to comply with a plan approved by the agency.
  4. The agency determines in a subsequent school year, based on financial data submitted by the LEA, that the approved plan for the LEA is no longer sufficient or is not appropriately implemented.

Financial Plan Questions and Actions (62 KB)

Attachment A - Required Financial Plan Template (76 KB)

Attachment B - Certification of Financial Plan (60 KB)

Attachment C - Budget and Cash Flow for School Districts: Excel (49 KB)PDF (206 KB)

Attachment C - Budget and Cash Flow for Charter Schools: Excel (83 KB)PDF (193 KB)


 

For additional information, contact:

Robin Aldridge (512) 463-3940 robin.aldridge@tea.state.tx.us

Rita Bunton (512) 936-3712 rita.bunton@tea.state.tx.us

Michael Needham (512) 936-3751 michael.needham@tea.state.tx.us  

Yolanda Walker (512) 463-0947 yolanda.walker@tea.state.tx.us

Chanda Williams (512) 475-2012 chanda.williams@tea.state.tx.us  

 

     

Page last modified on 10/30/2012 07:00:00 AM.