BRENHAM ISD BEGINNING AUDIT PROCESS

  

Brenham ISD has begun the process of a financial audit and is preparing for two other audits meant to address concerns with the district’s finances.

In an email sent Friday evening by Board of Trustees President Natalie Lange to State Senator Lois Kolkhorst and forwarded to other trustees and the local news media, Lange said the audits will give useful information to the board and the incoming superintendent, and are part of the steps that Brenham ISD is taking to “return to sound and informed fiscal decision making.”

Aside from the financial audit, Lange said the second audit will focus on the Public Education Information Management System (PEIMS), which includes public education information requested and received by the Texas Education Agency (TEA) regarding data such as student demographics, academic performance, personnel, and financial and organizational information.  The audit, Lange said, will check for proper coding and make any necessary corrections, which could immediately impact funding if there are adjustments that need to be made.  The third audit will look for efficiencies and inefficiencies with the district.

The board is proceeding with financial auditor Pattillo, Brown & Hill and is considering moving forward with Gibson Consulting Group for the other audits.  Further board discussion on Gibson Consulting Group is expected in the near future. 

Lange’s email also addressed the possibility of a Legislative Budget Board School Performance Review.  A petition has been circulating locally, asking for signatures in support of a state audit into school finances. 

Lange said the three audits that have either begun or are soon-to-begin are “beyond the scope” of a school performance review, but added that the district is “absolutely open” to having a review done if it can happen without the district being charged for it and if it can be completed before the new superintendent is expected to arrive in January.  She expressed concern, however, about the potential strain that would be put upon Brenham ISD staff in doing the review at the same time as the other audits and stated that the priority would be to go down the path that will “provide the most useful information in time for the new superintendent’s start date.”

Lange concluded by asking Kolkhorst to help provide Brenham ISD with new state funding, saying the state’s basic allotment is no longer enough to take care of the new, higher costs seen nowadays.  She said, “We will do everything it takes to make the necessary changes to regain the financial solvency that our district has historically maintained, but we desperately need the State to do its part on the funding side.”

The correspondence comes after trustees learned during September’s regular monthly board meeting that the district’s 2022-23 year-end deficit had grown to $5.8 million.  On Thursday, the district’s Chief Financial Officer, Thad Lasater, announced his resignation effective October 6^th. 

A full copy of Lange’s email to Senator Kolkhorst can be read below.

Senator Kolkhorst,

Good morning! I hope you and your family are doing well. I saw Jake with other Blinn athletes at the WCF parade earlier this month. I know you and Jim are proud of him!

Thank you, again, for taking time to attend our August meeting and then taking time to meet with me the following week. I just wanted to follow up on some of the things you offered in your letter to the Board.

First, I want to assure you that Brenham ISD is taking the necessary steps to return to sound and informed fiscal decision making. We want to have as much useful information and data as possible so that the next superintendent can hit the ground running when they start in January.  

We have started the process of a financial audit, and we are planning for two additional audits that address immediate concerns and will provide useful information for the Board and the new superintendent. The second audit will be focused on PEIMS to check for correct coding. That information could immediately impact funding if there are corrections that need to be made. The third audit will look for efficiencies and inefficiencies within the district.

For reference, the financial auditor approved by the board is Patillo, Brown & Hill. They are one of the oldest accounting firms in Texas and are an Endorsed Local Provider (ELP) trusted and vetted by Dave Ramsey. The other auditor that has come highly recommended for the additional audits is Gibson Consulting Group. Their client list includes Texas Education Agency, Texas Legislative Budget Board, Texas Comptroller of Public Accounts, in addition to over one hundred school districts. I have a meeting with Gibson next week and will report that information to the Board for discussion and next steps.

When you and I met in person last month, our conversation never turned toward the Legislative Budget Board School Performance Review, but you mentioned it in your letter to the Board. You said that several school districts in your district underwent such an audit. When I looked into it further, I only found two districts that had ever used the LBB School Performance Review, and I did take time to look through those reviews (https://www.lbb.texas.gov/School_Performance_Review.aspx). Although the LBB reviews did not get deep into the finances beyond what is already available to the public on public school district's websites, they did provide useful information and recommendations for multiple aspects of district management. All three of the audits I mentioned that are either in progress or soon-to-be in progress are beyond the scope of a LBB School Performance Review. However, we are absolutely open to a LBB School Performance Review, if that is something that you could help us obtain at no expense to the district, especially if it could be completed before January so that the new superintendent could have it on day one. 

The primary downside I can see to having the LBB Review happening simultaneously to the other audits is the strain it would put on staff, which is very much a concern. Please let me know if you can provide any information about cost and timeline as soon as possible. I think that trying to do the efficiency audit and the LBB Review at the same time would be too much, so the one that will provide the most useful information in time for the new superintendent's start date will likely be the priority. 

In your letter, you also mentioned that your staff is doing a deep dive into the finances of BISD. Please let me know if you have found anything that could help us as we move forward.

In anticipation of the special session that might be called, I respectfully ask that you please use any influence you have to properly fund public education, as required by the Texas Constitution. We will do everything it takes to make the necessary changes to regain the financial solvency that our district has historically maintained, but we desperately need the State to do its part on the funding side. As you know, the state has failed to provide an increase in the basic allotment since 2019. However, since 2019, we've experienced 19% inflation. Brenham ISD has seen a 105% increase in the cost of fuel, a 71% increase in the cost of safety and security, an 18% increase in the cost of general insurance policies, a 14% increase in the cost of utilities, and a 17% increase in the cost of employee compensation.

Please let me know if you can provide assistance with the consideration of using the Legislative Budget Board School Performance Review.

Thank you for your time and your service.

Sincerely,

Natalie Lacy Lange

Brenham ISD Board of Trustees