EISD Finance Director Maria Rockstead presented the information to the board of trustees during the Oct. 21 meeting.
Some context
According to Rockstead, FIRST assigns school districts an A, B, C or F rating based on 21 indicators that measure its financial management practices and overall financial health and sustainability.
Since FIRST's inception in 2003, EISD has received an "A," which is considered "superior achievement."
Breaking it down
The 2025 rating is based on data from the 2023-24 annual financial report, Rockstead said.
The 21 indicators include critical and ceiling indicators which address the district's overall business operations competency, and financial ratios that assess the district's overall financial health and sustainability.
- 4 are critical indicators of yes/no questions that include timely payments and financial report filings. A "no" answer results in a failing score.
- 7 are ceiling indicators that, if not met, will cap the maximum score the district can achieve.
- The remaining 10 indicators are financial ratios that award between 0 to 10 points, with the exception of two indicators that range from 0 to five points.
Something to note
The only indicator EISD did not earn full points on was indicator 8, which is the ratio of current assets to current liabilities.
According to Rockstead, this indicator is designed to ensure the district has sufficient short-term assets to cover short-term debt. However, EISD is a Chapter 49 district, or a property-wealthy district that must share local tax revenue with the state through recapture payments.
Because of this, and because EISD's fiscal year ends in June 30, this indicator is "not a good measure."
"It makes more sense for us to wait until August to make that [recapture] payment, so we hold on to that money as long as possible, but because of that it dings us on our FIRST report," Rockstead said.
Last June, EISD's total current assets was almost $227 million and its total current liabilities was almost $126 million, with $90 million of the liabilities related to recapture. This resulted in a ratio of 1.80 which translated to the four our of ten points scored on the indicator.
Comparable Chapter 49 districts are also likely losing points on indicator 8, Rockstead said.
"If we were to exclude both the liability and assets that correspond with it, we actually would have received a ratio of 3.85 on this, which would have earned us a full ten points on that indicator," Rockstead said. "... We're one of the districts that has a bigger burden as far as recapture is concerned."
