MISD receives clean financial audit

Audit highlights reflect a state-level granted property value appraisal appeal and budget expenditure reductions that significantly lowered the 2023-24 budget deficit. MISD still faces a $5.6M deficit for the 2024-25 school year.

Midlothian ISD Board of Trustees received another clean financial audit for the 2023-24 fiscal year from its external auditor, Hankins Eastup Deaton Tonn and Seay & Scarborough LLC. The firm presented the report at the October 21 school board meeting. The audit of the district's finances from last school year found no material weaknesses, findings or significant audit adjustments and showed that the district continues to be in compliance with all reporting requirements. The unmodified opinion is the highest-level outcome a district can receive from an audit report.

Last spring, the district learned the 2023-24 fiscal year was facing a $6.4 million deficit due to reductions in federal funding, enrollment growth that did not fully materialize and compounding factors related to inflationary expenditures. The financial audit shows that the district was able to significantly reduce the 2023-24 deficit down to $823,351 by appealing its property value appraisal, which the comptroller’s office recently granted, and reducing campus and department budgets during the spring. 

“Winning the appraisal appeal is significant to closing out the 2023-24 fiscal year,” said MISD Board of Trustees President Gary Vineyard. “It doesn’t solve our current year deficit, but it helped us keep our fund balance closer to where it needs to be to maintain our superior state financial rating.”

For the past 22 years, MISD has received the highest rating of “Superior” on the Financial Integrity Rating System of Texas (FIRST), which sets a fund balance target of 90 days minimum operating cash on hand or approximately 25% of the operating budget. If reserves fall below the 90-day target, a district will lose points on indicator 7 of the FIRST system. The financial rating system ensures that Texas public schools are held accountable for the quality of their financial management practices.

The district still faces a $5.6 million budget deficit for the current 2024-25 fiscal year and has worked hard to reduce expenditures while funding its budget priorities: student programming and experiences, safety and security, teacher and staff compensation, and maintaining low-class sizes. The adopted 2024-25 budget includes a 3% raise for teachers and librarians and 1% for all other positions (with a $1,000 minimum). 

In addition to the clean audit that demonstrates the district’s continued commitment to financial transparency, MISD has also been awarded the Purchasing Award of Merit (1 of only 77 districts) and the Excellence in Financial Management award (1 of only 32 districts) from TASBO, and from the Texas Comptroller the Transparency Star awards for Debt Obligation and Traditional Finances.