Taxpayers Should Pay Attention to Key Red Flags in EPISD’s Recent Financial Audits

The Eagle Pass Independent School District’s (EPISD) annual financial audits for fiscal years 2020, 2021, 2022, and 2024 show several financial trends that should draw public attention and raise questions about how the district is managing taxpayer dollars. While school finances can be complex, several changes stand out that may have long-term implications for classroom funding, future projects, and overall fiscal stability.

Drop in Local Tax Revenue Despite a Larger Property Base

One of the most striking details in the 2024 audit is a decline in local tax revenue even though the district’s property tax base grew. The reason, according to the audit, was a tax rate reduction of $0.1823 per $100 of assessed value. While tax cuts are often welcome news for property owners, they can significantly affect school funding if not carefully planned. With local tax revenue forming the backbone of district operations, taxpayers should question whether the board considered how the cut would impact future budgets and whether the district has a plan to replace the lost revenue in the coming years.

General Fund Balance Fell by $3.6 Million

Another concerning trend is the decline in the district’s general fund balance, which dropped by $3.6 million in 2024. This is a reversal after two consecutive years of growth. A shrinking fund balance can signal increased spending without equivalent revenue or rising costs that outpace funding. It also reduces the district’s financial cushion for emergencies or unexpected expenses. Taxpayers might reasonably ask school board members whether this drawdown was part of a strategic plan or a sign of financial strain.

Unexplained Surge in Capital Spending

The 2024 audit also shows a dramatic spike in capital outlay spending to $8.5 million, but it does not clearly explain what was built, purchased, or upgraded with that money. Transparency is crucial when millions in taxpayer funds are spent on facilities, technology, or equipment. The lack of explanation leaves the public in the dark about whether those investments were necessary, properly bid, or aligned with district priorities. This is an area where taxpayers should demand more detail and documentation.

Heavy Dependence on Federal COVID Aid, Then a Sudden Drop

The audits also highlight how heavily the district leaned on federal COVID relief funds in 2021 and 2022 to support its operations. These funds helped schools nationwide maintain staffing levels, upgrade technology, and address learning loss during the pandemic. However, the audits show a sharp decline in federal aid by 2024, raising concerns about whether EPISD prepared for the funding cliff. If the district used temporary funds for ongoing expenses, it could now face budget shortfalls or be forced to make cuts. Taxpayers should press the district on how it plans to sustain programs and staff without that federal support.

Lack of Clarity on Reserve Policy and Available Funds

Finally, the audits provide little information about the district’s reserve policy or how much of the general fund balance is unassigned and available for use. Without this information, taxpayers cannot know whether the district is maintaining adequate reserves or if the remaining fund balance is tied up in commitments that limit flexibility. Clear policies on reserves are essential for fiscal responsibility and long-term planning.

Questions Taxpayers Should Be Asking

The financial trends outlined above do not automatically mean EPISD is in trouble, but they do raise legitimate concerns that deserve public discussion. Taxpayers and parents may want to ask school board members several key questions. They should ask why the tax rate was cut in 2024 despite rising property values and how the district plans to offset the resulting revenue loss. They should ask what specifically caused the $3.6 million decline in the general fund balance and whether this was part of a larger financial plan. They should question what projects or purchases account for the $8.5 million capital spending surge and why those details were not clearly reported. They should seek clarity on how the district prepared for the end of federal COVID relief funds and what steps are being taken to avoid program cuts. And finally, they should ask how much of the district’s fund balance is unassigned and readily available and what the district’s reserve policy entails.

EPISD is entrusted with millions of dollars in public funds each year. Taxpayers deserve transparency, accountability, and clear communication about how those funds are being managed. Asking these questions now can help ensure that financial decisions made today do not compromise the district’s ability to educate students tomorrow.

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