Brownsville ISD submitted its 2021-2022 budget to an independent auditor, Cascos and Associates, PC, and has received an “unmodified,” or clean, audit. Unmodified is an accounting term that indicates that the auditor found all of the financial statements and materials were presented fairly in accordance with good accounting principles. The audit covered the July 2021 to June 2022 fiscal year.
“It shows that we have good accounting principles in place and that the purchases we made were because of our due diligence,” said Dr. Nereida “Nellie” Cantu, deputy superintendent of business and operations. “As one of the largest 28 school districts in the state, it is more difficult and important to account for everything.”
School districts are funded by three sources of revenue: state funding, property tax revenues, and federal funding. State funding to Brownsville ISD for 2021-2022 amounted to $340 million. Federal funding has increased over the last few years, primarily because of the Elementary and Secondary School Emergency Relief (ESSER) grant. Revenues from property taxes have also increased as property values in the district have risen as the city grows.
“The pandemic lowered attendance by about 5%, and the state adjusted for that,” said Mary Garza, director of finance. “But this is the exciting part: our total revenues for the year were $471 million; we spent $442 million. That leaves a balance of $28.9 million to the balance fund.”
The fund balance is the district’s savings. The $28.9 million brought that balance up to $132.2 million. This is enough funds to cover operating expenses for approximately 109 days, based on the average amount spent per day over the entire year.
“The state has warned that when ESSER ends in 2024, there will be a ‘funding cliff’ where we will have to continue to operate without those funds, and have encouraged us to build our fund balance,” explained Dr. Cantu.
The audit was in preparation for School FIRST (Financial Integrity Rating System of Texas). Established in 2001, every district in the state is required to submit their financial records to the state. The state then grades the finances of the districts based on 16 to 20 different criteria. Brownsville ISD has received an “A” for the last 10 years.
The district has also received recognition for its financial reporting from two other independent agencies. In March 2022, the 2020-2021 financial report received the Certificate of Excellence in Financial Reporting from the Association of School Business Officials. In July 2022, it was also awarded the Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting.
For both of these certificates, it was the 12th time the district received the award. The reports for the 2021-2022 year have been submitted to these agencies, and the district is hoping for number 13 from each agency.
“The audit and awards show that we are spending money the way taxpayers expect us to spend their money,” said Dr. Cantu. “But we never let our guard down.”
Part of that work includes preparing for when the federal funds from the ESSER grant stop in September of 2024. Some of the ESSER funds have been used for maintaining food service during the pandemic, even with supply chain shortages making it more expensive. Other funds went towards retention stipends. Starting teacher salary in Brownsville ISD is $53,000, which is higher than most of the Valley’s districts.
“The district has been increasing salaries for the staff,” Garza said. “Some years it is not as much as teachers would like, but we are working on correcting that. We are preparing for what is to come. We are conservative, but students and teachers are our priority.”