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TEA Correspondence

A Microsoft Word version of this letter is available for download and PRINTING.



August 31, 2011





Subject:  Official Notification of the 2011 Final Charter Districts -   School FIRST  Rating                            

The purpose of this communication is to inform you of your open-enrollment charter district’s final 2011 School FIRST (Financial Integrity Rating System of Texas) rating.  In a TO THE CHARTER SUPERINTENDENT ADDRESSED letter dated June 16, 2011, the Texas Education Agency (TEA or agency) notified charter districts of the issuance of preliminary ratings under the financial accountability review system, which officially is referred to as School FIRST.  As noted in the June 16, 2011 letter, the 2011 School FIRST ratings were based upon an analysis of financial data for the 2010 fiscal year (the fiscal period ended June 30, 2010, or August 31, 2010, depending upon the ending date of the charter district fiscal year).


A primary purpose of the June 16, 2011 letter was to provide charter districts an opportunity to review the preliminary ratings and data supporting the three indicators and to submit a written appeal, as appropriate.  As documented, written appeals were due to the TEA by July 15, 2011.  Please note that TEA staff responded to all appeals in separate correspondence.  The final ratings and the data supporting the three indicators are accessible at  Please note that final Charter District - School FIRST ratings are accessible only from the TEA’s website. 


Within two months after receipt of its final  Charter District – School FIRST rating, each charter district must announce and hold a public meeting to distribute a financial management report that explains the charter district’s rating and its performance under each of the three indicators for the current and prior year.  The first of two required published newspaper notices, to inform the public of the meeting, may not be more than 30 days prior to or less than 14 days prior to the public meeting, in accordance with 19 TAC §109.1005.  The public meeting to present the Charter District - School FIRST rating may be combined with a scheduled regular meeting of the governing board.  At the public meeting, the charter district should review the disclosures that must be included in the financial management report. The charter district will be required to report on reimbursements to the superintendent and governing board members for the       2009-2010 school year, and either post on the charter district’s website or supply in the financial management report the current superintendent’s contract or terms of employment as well as salary and benefits.  This year will  be the first year that the charter district must also provide a summary schedule of the data previously submitted to TEA under the financial solvency provisions of TEC §39.0822.  Information regarding these disclosures can be found in 19 TAC §109.1005 at on TEA’s website. Additionally, the TEA has posted on its website a template that charters may use to help facilitate the compilation of this information.  The template can be found at the following web address: The charter district is encouraged to provide additional information in the report that will be beneficial to the public, especially information explaining special circumstances, if any, which may have affected the charter district’s performance under one or more of the indicators.


In December 2007, TEA adopted 19 TAC Chapter 97, Planning and Accountability, Subchapter EE, Accreditation Status, Standards, and Sanctions, in response to the requirements of House Bill (HB) 1, of the 79th Texas Legislature, Third Called Session, 2006.  This subchapter, which became effective in January 2008, defined the accreditation statuses of Accredited, Accredited-Warned, Accredited-Probation, and Not Accredited-Revoked and stated how accreditation statuses would be determined and assigned to school districts.  The rules also established accreditation standards and sanctions, including oversight appointments.  On November 23, 2008, 19 TAC §97.1037, 97.1051, 97.1053, and 97.1055 were amended to make the rules on accreditation status applicable to charter schools.  Under the authority of the Texas Education Code (TEC) and adopted rules, accreditation statuses have been assigned to school districts since 2007-2008 and to charter schools since 2008-2009.  Please note that, in accordance with these rules, including subsequent rule revisions, TEA will take into consideration a charter district’s School FIRST rating when assigning an accreditation status. 


Additionally, please note that a charter district’s final School FIRST rating may impact its special education determination status as issued by the TEA under the requirements of the Individuals with Disabilities Education Act (IDEA) and 34 Code of Federal Regulations (CFR) §300.608(a).


For upcoming fiscal years, certain changes have been made, or are proposed to be made, to the School FIRST indicators. Specifically, beginning with fiscal year 2010-2011, which will affect the ratings issued in 2012, the financial accountability rating of an open-enrollment charter district will be based on 21 indicators similar to those used for the ratings of school districts.  Additionally, beginning with fiscal year 2010-2011, the type of ratings to be assigned to charters will be expanded to include Above Standard Achievement and Superior Achievement, in addition to Standard Achievement, Substandard Achievement, and Suspended—Data Quality.  TEA also has proposed rules to be finalized this summer which change the net asset balance and cash management indicators for the FIRST rules relating to the 2010-2011 and 2011-2012 fiscal years, which will affect FIRST ratings issued in 2012 and 2013.  It is the intent of the agency to avoid penalizing charters that elect to expend portions of their net asset balance in the upcoming biennium as a result of current economic conditions and changes made by the Legislature to the state funding system.  Additional information on the changes can be        found on the TEA website at and


The TEA gratefully acknowledges the genero us assistance provided by the Texas Comptroller of Public Accounts, and charter school and education service center officials in the ongoing implementation of School FIRST.  If you have questions about your charter district’s School FIRST rating, please contact Janice Hollingsworth in the Division of Financial Audits at (512) 463-9095.





Rita Chase


Financial Audits Division




cc: Education Service Center (ESC) Executive Directors

     ESC Charter Technical Assistance Contacts

     Laura Taylor, Associate Commissioner, Department of Accreditation, TEA

     Mary Perry, Director, Charter School Administration, TEA

      Karen Johnson, Legal Services, TEA



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