TOWN STAFF REPORT RECOMMENDATIONS
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Hold a public hearing, receive and discuss the 2024 Charter FIRST rating for Westlake Academy based on School Year 2022-2023 data, and the Annual Financial Management Report (Marlene Rutledge, Academic Finance Manager)
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STAFF: Marlene Rutledge, Academic Finance Manager
BACKGROUND:
FIRST is the acronym for the Financial Integrity Rating System of Texas, as developed for Texas school districts by the Texas Education Agency (TEA) in response to Senate Bill 875 of the 76th Legislature in 1999. The primary goal of the rating system is to achieve quality performance in the management of school district financial resources. In 2009, TEA included open-enrollment charter schools in this rating system, called Charter FIRST.
DISCUSSION:
After TEA receives the Academy’s financial information, a FIRST rating worksheet is completed. The current year rating worksheet contains 21 questions, called indicators. Each indicator is designed to assess the management of financial resources. Ratings are based on staff/student and financial data for the corresponding fiscal year. Charter schools provide information to TEA through various financial and audit reports, as well as data reported through the Public Education Information Management System (PEIMS).
If the charter school answers “No”, or fails any of the critical indicators 1 through 5, the rating is automatically a “Substandard Achievement” regardless of points earned from other indicators. If the charter school fails any ceiling indicator, the rating is automatically an “Above Standard Achievement” with a final score of 89.
For the Fiscal Year 2024 based on data from Fiscal Year 23 (Sept 2022-Aug 2023), Westlake Academy received a Substandard Achievement Rating.
• Although the Academy received an unmodified opinion on the FY23 annual audit, it was presented and approved by the Board of Trustees on August 5, 2024. The Annual Financial Report (AFR) was due to the Texas Education Agency (TEA) on January 28, 2024. This was a failure of critical indicator #1.
• Per Texas Education Code (TEC) §44.008, the Academy is required to submit the AFR to TEA no later than 150 days after the close of the fiscal year. This timeframe was not met due to the impact of the Finance & Human Resources system conversion implemented near the end of the fiscal year, which subsequently created delays in the performance of the annual audit.
o TEC §44.008 does not provide for extensions to the due date for any reason.
• Per BrooksWatson & Co, PLLC, the Academy’s external auditors, “The Academy should work to meet the TEA compliance requirements and submit within the time period after year end in the future.” (AFR Management Letter, July 31, 2024).
o Effective July 1, 2023, the Academy moved to a June 30th fiscal year end (July 2023-June 2024 for 10-month transition year).
o The annual audit for fiscal year ending June 30, 2024 was completed by BrooksWatson & Co, PLLC and the AFR was approved by the Board of Trustees on November 11, 2024 (Res 24-40).
o TEA deadline for submitting the FY24 AFR: November 27, 2024.
o FY24 AFR submitted to TEA: November 15, 2024.
Within two months after receiving the final rating on November 8, 2024, the Board of Trustees is to hold a hearing for public discussion of the annual financial accountability system report. A notice was published in the Fort Worth Star-Telegram on December 18, 2024.
In addition to the Charter FIRST annual rating and in accordance with Title 19 Texas Administrative Code, Chapter 109, Budgeting, Accounting and Auditing, Subchapter AA, Commissioner’s Rules Concerning Financial Accountability Rating System, a Financial Management Report is to be submitted to the Board of Trustees, which includes the following required disclosures:
• Copy of Head of School’s (Superintendent’s) current employment contract, including any addendums,
• Reimbursements Received by the Head of School (Superintendent) and members of the Board of Trustees,
• Outside Compensation and/or fees received by the Head of School (Superintendent) for Professional Consulting and/or other personal services,
• Gifts received by the Head of School (Superintendent), Executive Officers, and members of the Board of Trustees (and First-Degree Relatives, if any), and
• Business Transactions between Westlake Academy and members of the Board of Trustees.
FISCAL IMPACT:
None
STAFF RECOMMENDATION:
Conduct a public hearing and hold discussion regarding Westlake Academy’s FIRST rating as necessary.
ATTACHMENT(S):
Westlake Academy Charter FIRST Annual Financial Management Report
TOWN COUNCIL ACTION/OPTIONS:
No action is needed