New FIRST Indicator: Comparing Budget to Actual Revenue

The TEA's new metric: how close were your district's budgeted revenues in the general fund to actual revenues?

Beginning with the FIRST ratings that will be issued in the 2020-2021 school year, based on data from the 2019-2020 school year (fiscal year 2020), TEA will be incorporating a new metric: How close were your district's budgeted revenues in the general fund to actual revenues? The data-source for this will be PEIMS financial data, collected during the October snapshot, and the Agency will use the most current three years of data. This means they will examine fiscal years 2018, 2019, and 2020 the first time they use this indicator. This will be indicator 10 in the new system, and to receive full points, your budget revenue must be within 10 percent of actual to receive credit.

You can look at your PEIMS data for FY 2018 and FY 2019 to see how you did in past years. You should be aware that the agency will use the revenue object codes in the general fund, and will not net recapture when making this calculation. For FY 18, Texas school districts as a whole submitted budgeted revenues that were roughly 4.6% less than actual. For FY 17, budgeted data were roughly 2.7% below actual. Based on this trend, most districts should not have trouble meeting this indicator.

Some of you have expressed concern given the significant changes being contemplated by the legislature this year. Clearly, school districts have a whole lot less certainty right now when it comes to revenue projections than they do in a typical year. There are a few things you can do to improve your performance on this indicator. First, check your district's past history to make sure you understand your performance based on the data that is already set as it relates to this indicator. You should know whether you are close to the 10 percent threshold given the two prior years data. Second, given the legislative changes at play this year, you will need to run multiple templates as the session closes and make sure you have as solid an understanding as possible of how those changes impact your district. At the same time, past history suggests it will take time for all of the administrative decisions that may impact your revenue to play out. Remember that you can do a budget amendment prior to submission of the PEIMS budget data next fall. That will allow you to continue refining estimates after the school year begins as more clarity starts to emerge with respect to school finance implementation. It will also ensure your board is apprised of any changes to your projections that emerge as a function of continuing to rework numbers as new information emerges.

As always, if we can help you in understanding your district's PEIMS financial data, or in the implementation of school finance legislation this session, we are more than happy to do so. Please do not hesitate to reach out to us!

Back to top