Marfa school board receives favorable financial rating, clean audit report

The Marfa ISD School Board convened for their final meeting of 2023 in the district’s library to review campus updates, financials and more. Staff photo by Mary Cantrell.

MARFA — Marfa ISD trustees met this week to review the district’s 2021-2022 financial integrity rating from the state as well as the 2022-2023 school year audit, both of which detail the district’s financial compliance while shedding light on its larger funding challenges. 

Marfa ISD, along with Alpine and Fort Davis ISDs, has experienced a 90% decline in state aid over the past decade. This year, MISD will likely dip into its $3 million savings account to cover a $1-million-plus deficit budget. Its 2022-2023 school year recapture payment — money the district sends back to the state because it is considered to have excess wealth per pupil due to the combination of high property values and declining enrollment — totaled $1.7 million. 

A public hearing was held during the meeting to go over MISD’s 2021-2022 financial integrity rating from the Texas Education Agency (TEA). The district received the score of 100 out of 100 for an A, or “superior achievement,” rating. 

The financial integrity rating system has been in place since 1999 and is meant to ensure Texas’ public school districts are managing public funds correctly and efficiently. The passing score is 70, and anything lower than that will prompt the TEA to step in.

Twenty indicators make up the integrity rating, including the district’s debt payments, timely payments to the Teacher Retirement System as well as savings account and general fund balances.

Trustees also reviewed highlights and approved the district’s most recent 2022-2023 school year audit with the help of auditor Kacey Gast of Bolinger, Segars, Gilbert and Moss, a firm out of Lubbock. Overall, the district received an unmodified, or clean, audit opinion. 

Gast explained that a slight hiccup auditors came across was addressed in a “management comment letter,” included with the audit. The area of concern is the district’s bank statements, which Gast said were not done in a timely manner and were missing some information when finally received by auditors. 

The district’s Chief Financial Officer Rosela Rivera, who was hired in July 2022, works with a contracted certified public accountant who has been with the district since 2017 that prepares monthly bank reconciliations on all district bank accounts. 

Gast recommended clearer communication between Rivera and the consultant on the matter to ensure all transactions are recorded in the month the activity occurred and no internal or external fraud is occuring.    

“That is one big key control,” said Gast. “Because if you’re not reconciling those banks timely, stuff could be happening in the bank that you’re not aware of.” 

Another issue Gast raised was that of the district’s fund balance, or savings account, as well as the general fund, which have both declined over the past three years. The district’s general fund is down to $1.7 million compared to last year’s $2.8 million, she explained. One of the main drivers for that decline is due to the district waiting for the federal government to reimburse them for ESSER grant funds  — pandemic relief funds — that they have already spent, she said. 

“[The] general fund’s technically supplementing from a cash standpoint, but then that money will come back in, so that’s where you see the big dip in your cash for the current year,” said Gast.

The district’s fund balance has also decreased by $320,000 from the previous year, said Gast. The district is in danger of no longer meeting a specific indicator on the financial integrity report that requires a less than 25% decrease over three years in the fund balance account or 75 days worth of expenditures in the account, she explained.

Gast said that other districts she works with are experiencing a similar situation, and it was something to watch out for moving forward. The district currently has about 3.5 months worth of expenditures in its fund balance and the general rule of thumb, she explained, was to have around three to four.

“This is one I just want people to be aware of and watching because if you go down in that fund balance, there could be a chance that your expenditures stay up [and] you could fail this indicator,” said Gast. 

The district paid off $890,000 of debt last fiscal year, and its remaining debt totals $3.9 million. Tax collections were down, said Gast, which was negatively impacting the district’s bottom line as were declining enrollment and increased property taxes — all of which were revenue streams outside of the district’s control, creating what Gast called a perfect storm.

Ten years ago, property values for homes located in the district’s boundaries were $235 million, compared to $546 million last fiscal year, she said. “Those people buying these houses are not bringing kids in, so that’s where it hurts,” said Gast. 

Before diving into the district’s finances, board members heard from citizens during public comment as well as from Interim Superintendent Arturo Alferez on facilities updates. 

Friends of Hunter Gym President Mike Green was present to share recent updates with the board. The nonprofit is leasing the old adobe gym from the school district in order to restore it. Green said the group recently donated 70-plus desks that were languishing in the unused gym to Casa Hogar orphanage in Ojinaga, and efforts were underway to install a separate electrical meter for the facility. 

Green said the board recently met with MISD Athletic Director Linda Ojeda to glean insights on the athletic department’s needs and was working in earnest to get the gym restoration project off of the ground, obtaining funding, and making it clear the improvements were for the benefit of the district. 

“One of the things that I want to dispel is the [perception] that once we restore the building, we’re going to close it off to student activity,” said Green. “We want student activity.” 

Fourth- and fifth-grade math and science teacher Sheryl Olson-Cain also addressed the board to express her support for the four-day school week, an experimental schedule the district adopted this year. 

Cain, who was hired by the district this fall, said she is in her twentieth year teaching, and the four-day week has allowed her mental respite as well as the opportunity to work one-on-one with students on Shorthorn Success Days — flexible instructional days held twice a month on Fridays. 

“I think it’s just fabulous that I can pull in my kids who are low or who have failed the STAAR test previously, and I can get a true one-on-one with them,” said Cain. 

Alferez notified the board that he was in negotiations with the Marfa Housing Authority (MHA) to prioritize teachers and district staff for newly-available units. The three cabin-like units were recently brought in and are positioned directly across from Big Bend Sector Border Patrol. 

Marfa ISD teachers and district staff will be prioritized for new units that were recently added to the Marfa Housing Authority. Staff photo by Mary Cantrell.

Alferez said he and MHA had discussed monthly rent and settled on a price of $600 per month. Housing owned by MISD is currently full, with some residents being Marfa Police Department officers as well as teachers. 

“We do have some teachers that have expressed interest in teacher housing, so we’re working to collaborate with MHA on this, and hopefully by the start of January or mid-January they should be ready for them to move in,” said Alferez.