Annual Financial and Compliance Report

Each year, a school district, charter school, or education service center (ESC) must take the following steps:

1. Prepare its annual financial statements.
2. Have its annual financial statements audited by a licensed independent certified public accountancy (CPA) firm.
3. Submit the resulting audited annual financial and compliance report (AFR) and additional data to the Texas Education Agency (TEA) for review.

When is the AFR due to TEA? 

An AFR is due by no later than 150 days after the close of a district’s fiscal year. The following table shows the due dates for different fiscal year calendars.

• The Texas Education Code (TEC), §44.008, does not provide for any extension when the date falls on a holiday or weekend. The AFR is also not required to be submitted earlier.
• A complete, board approved, and signed AFR in PDF format must be received through the AUDIT application in the TEA Login (TEAL) secure environment to meet submission requirements.
• Emailing of the required AFR files does not meet submission requirements.
• The AUDIT application in TEAL is open 24 hours a day, seven days a week to accept electronic AFR submissions.

Independent School Districts and ESCs 

This section provides procedures for districts and ESCs to prepare and submit an AFR.

How does a district or an ESC prepare its AFR? 

The district or ESC must complete the following steps:

1. Prepare its annual financial statements and have them audited by a licensed independent CPA firm.
2. Have the audited AFR approved by its board.
3. Prepare a PDF version of its board-approved, audited AFR. 
4. Ensure that the AFR PDF file includes:
   • the signed certificate of board approval and audit firm signatures,
   • the management letter (if issued), which may be submitted as a separate PDF file, and
   • (applies to districts only) Schedule L-1, Required Responses to Selected School FIRST Indicators, which may be submitted as a separate PDF file.
5. Prepare its data feed text file.
6. Ensure that the financial information in its AFR and data feed are consistent.
7. Submit the following documents through the AUDIT application in the Texas Education Agency Login (TEAL):
   • board-approved AFR PDF
   • Schedule L-1, if separate from the AFR PDF
   • management letter PDF
   • data feed text file
8.  Review the submission for consistency and completeness.
9. Finalize the data feed text file. 

How does a district or an ESC send its AFR to TEA? 

For instructions on submitting the AFR and data feed to TEA, see Electronic Submissions.

Charter Schools

This section provides procedures for charter schools to prepare and submit an AFR.

How does a charter school prepare its AFR? 

The charter school must complete the following steps:

1. Prepare its annual financial statements and have them audited by a licensed independent CPA firm.
2. Have the audited AFR approved by its board.
3. Prepare a PDF version of its board-approved, audited AFR 
4. Ensure that the AFR PDF file includes:
   • the signed certificate of board approval and audit firm signatures and
   • the management letter (if issued), which may be submitted as a separate PDF file.
5. Prepare its data feed submission.
6. Ensure that the financial information in its AFR and data feed are consistent.
7. Submit the following documents through the AUDIT application in the Texas Education Agency Login (TEAL):
   • board-approved AFR PDF
   • management letter PDF
   • data feed submission
8. Review the PDF and data feed submission for consistency and completeness.
9. Finalize the data feed submission.

How does a charter school send its AFR to TEA? 

For instructions on sending a charter school AFR to TEA, see Electronic Submissions. 

Listing of External Audit Firms

We have provided a listing of independent audit firms that have performed audits of charter schools and school districts in Texas for the most recent audit year. The firms are listed by the name under which the audit was performed and the number of audits performed in each ESC region. Please refer to the Texas State Board of Public Accountancy website at https://www.tsbpa.texas.gov/php/fpl/frmlookup.php for contact information, name changes, and the license status of each firm.

Please note that this posting is not an endorsement of any of the firms listed.  

Charter schools, ESCs, and school districts in Texas must ensure their independent auditor:

• is a CPA firm that has a current valid license issued by the Texas State Board of Public Accountancy;
• is a CPA with a current valid license issued by the Texas State Board of Public Accountancy;
• is a member of the AICPA Governmental Audit Quality Center (GAQC) (http://www.aicpa.org/interestareas/governmentalauditquality.html); and
• meets all additional rules of the TEC, §44.008, 19 Texas Administrative Code (TAC) §109.23, and all other requirements.

The following Excel spreadsheet contains three tabs listing firms that performed audits of charter schools, governmental charter schools, and school districts:

• Independent Audit Firms (Excel, 26.6 KB)
• Independent Audit Firms (PDF, 102KB)

Electronic AFR Public Viewer 

To view a prior AFR, search the Database of Prior Annual Financial and Compliance Reports.

Statutes and Rules Related to the AFR 

• TEC, §8.102, Data Reporting (applies only to ESCs)
• TEC, §39.081, Definitions (relating to School FIRST indicators)
• TEC, §39.083, Reporting (relating to AFRs)
• TEC, §44.008, Annual Audit; Report
• 19 TAC §109.23 (relating to AFRs)
• Financial Accountability System Resource Guide (FASRG),
  • Module 1: Financial Accounting and Reporting (FAR) (PDF, 2,518KB)
  • Module 2: Special Supplement—Charter Schools (PDF, 1,556KB)
• 19 TAC §109.41 (relating to the FASRG)