Harlingen school district fund balance dips to $17.5 million
Fernando Del Valle, Valley Morning Star, Harlingen, Texas
4 min read
Mar. 21—HARLINGEN — A $6 million shortfall in state funding helped spur the district's cash reserves to dip to $17.5 million, dropping the fund balance from $21.2 million.
In February, the state's funding came in at $6 million, down from its usual $12 million, Ida Ambriz, the district's assistant superintendent of business services, said.
During the month, officials also made $1.6 million in debt payments, she said.
Since September, officials have been working to rebuild the district's fund balance after school board members found out former Superintendent J.A. Gonzalez's administration used $23.2 million in cash reserves to cover operational costs including unbudgeted expenses, dropping the fund balance as low as $17.2 million.
Officials are counting on the fund balance to start rebounding by the end of the month, Ambriz said.
"We definitely do expect this fund balance to increase again by the end of March," she said.
Officials had been projecting the loss of state funding would drop the district's fund balance, board member Ricky Leal told officials during a five-hour meeting Tuesday.
"The drop in fund balance was well forecasted," he said. "We were expecting that, without the state funding. To me, that's according to plan."
In a presentation, Ambriz said the district's collected $120 million so far this year, with $80.9 million coming from state funding while local property taxes made up $35.7 million.
Meanwhile, the district's expenditures stood at $120.2 million, leading to a shortfall of $206,000, Ambriz told board members.
Within the district's general fund, total assets stood at $37.1 million, with $19.5 million in liabilities, she said.
The loss of state money spurred the fund balance's first dip since officials began working to rebuild their cash reserves about six months ago.
From 2022 to 2024, the district's fund balance dropped from $48.3 million to $17.2 million, its level when the school board passed the current $215.3 million budget last June, Noe Hinojosa, the district's financial advisor with Estrada Hinojosa, told board members in January.
At the time, he projected a period as long as three to five years to build back the budget's fund balance.
Under the district's new fiscal plan, officials have cut at least $7.2 million, aiming to rebuild their cash reserves.
As they work to develop next year's budget, officials facing the district's deepest crisis in decades are planning millions in cuts.
In late August, school board members found out Gonzalez's administration had pulled $23.2 million in cash reserves, dropping the fund balance as low as $17.2 million.
While officials argue Gonzalez's administration pulled the money without the school board's knowledge, Gonzalez claims he didn't know Ramon Mendoza, the district's former assistant superintendent of business services, was withdrawing cash reserves.
Meanwhile, Gonzalez said the school board approved "transactions" through consent agendas, which typically group routine matters into single items which board members can request be discussed.
"I can't tell you how good it feels as a board member to have restored trust in the business office," board member Dr. Nolan Perez told Ambriz during Tuesday's meeting.
In early September, Gonzalez, who had taken office a year before after serving as McAllen's superintendent since 2016, suddenly resigned with two years left on his contract, five months after board members gave him a one-year contract extension along with a $10,000 pay increase, bumping his salary to $310,000.
In November, the certified public accounting firm of Carr, Riggs and Ingram gave the district a clean audit for the 2023-2024 school year.
During Tuesday's meeting, Nellie Ledesma, the district's internal auditor, reviewed her series of audits focusing on campuses and departments which the accounting firm used to help develop the annual comprehensive financial report.
"They relied on the work performed on these audits in their assessment of the district's internal control as well as the data and financial integrity in these areas," she told board members
In a presentation, Ledesma reviewed eight internal district audits covering the period from 2023 to 2024.
"At the end of the school year, we go out to the campuses and we do an in depth audit of all the campuses and all the non-campus departments," she said.
"We're just making sure we're following the money, that it's timely, that it's accurate and all of it is being deposited," Ledesma told board members. "We test all the disbursements and all the transactions and we look at the cash receipts to make sure that they're being deposited timely — that they tie into the deposits. We also look at their bank reconciliations to make sure that they are being turned in timely and that they're being balanced."
During discussion, board member Dr. Belinda Reininger said trustees want to make sure internal controls are in place.
"It's always reassuring that you are carefully auditing and the conclusion is that effective auditing controls are in place because it's a lot of different monies moving in and out (of) accounts and should be going for the designated purposes, which is to enhance education," she told Ledesma.
