TEXAS EDUCATION AGENCY IN RE: § BEFORE LIZZETTE REYNOLDS § 2011-2012 ACCREDITATION STATUS OF § DEPUTY COMMISSIONER FOR § NORTH FOREST ISD § POLICY AND PROGRAMS ______________________________________________________________________________ I. Introduction ……………………………………………………………………….. 1 II. The North Forest students would benefit from annexation into a better functioning

School District …………………………………………………………………….. 2 A. North Forest has earned a Not Accredited-Revoked status under multiple

Provisions of the Accreditation System ……………………………………….. 2 1. Deficient Financial Performance ………………………………………….. 2 2. Deficient Academic and Financial Performance ………………………….. 3

a. Four Consecutive Years of either poor academic or financial performance .3 b. Three Consecutive years of both poor academic and financial performance .3

3. Deficient Special Programs ……………………………………………….. 4 B. HISD Does a Better Job of Educating Students ………………………………. 4

1. District to District Comparison ……………………………………………. 4 2. Comparison of Schools in HISD District 2 to NFISD …………………….. 5 3. Comparison of Students Residing in HISD District 2 to NFISD …………... 5 4. Comparisons of North Forest High School to Houston ISD’s Kashmere

and Wheatley High Schools ………………………………………………. 7 C. Annexation into HISD Would Provide Additional Choices to the Students

Residing in North Forest ……………………………………………………….. 8 III. The North Forest Plan is Inadequate ……………………………………………….. 8

A. History of Prior Problems ……………………………………………………… 9 B. Recurrent Personnel Problems …………………………………………………. 10 C. Inadequacy of the District’s Plan ………………………………………………. 11 D. Other Unresolved Issues ………………………………………………………... 11

IV. The Agency’s Interventions Did Not Cause the Problems in North Forest ………… 12 A. The District’s Performance Improved in all areas during the TEA Intervention ... 12

1. Financial Performance ………………………………………………………. 12 a. General Fund Balance Improved ………………………………………… 12 b. Internal Control Structure Improved …………………………………….. 13

2. The District’s Completion Rate Improved …………………………………… 13 3. The District’s Programs for Special Populations Improved …………………..14

B. North Forest’s Problems Were Not Caused by the TEA Management Team ……. 14 C. The Agency’s Management Team and TEA Personnel Discovered the True

Extent of the District’s Systemic Problems ……………………………………… 15 1. Financial Mismanagement Issues ……………………………………………. 15

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a. The District’s financial management problems existed, but were not fully identified, when the financial conservator was appointed ………… 15 i. Failures in the finance department ………………………………. 16 ii. Procurement and contracting problems …………………………. 16 iii. Deficit in the general fund ……………………………………….. 16

b. Problems identified by the first TEA Special Accreditation Investigation .. 18 2. The District had Severe Academic and Special Program Problems when the

Academic Conservator was Appointed ……………………………………… 18 D. The District’s Problems were not caused by the Board of Managers …………… 19

1. The Extent of the District’s problems precluded a complete fix by the Board of Managers …………………………………………………………… 19

2. The Board selection process did not cause the District’s problems …………. 19 3. The Board received training …………………………………………………. 20 4. The Board of Managers did not violate the Open Meetings Act …………….. 20

E. The District’s Problems were not caused by the TEA Appointed Superintendant .. 23 V. Miscellaneous Legal Issues

A. Appointment of the Board of Managers does not preclude closure of the District ..24 B. The Commissioner May Revoke a District’s Accreditation Status based on

Completion Rates ……………………………………………………………….. 24 C. The Board of Managers Must Contain a Majority of Community Members ……. 24

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TEXAS EDUCATION AGENCY’S CLOSING BRIEF

I. Introduction

The North Forest Independent School District (“North Forest” or “NFISD” or “the

district”) has a long history of poor performance. Under the accreditation system, the district has

earned a status of “Not Accredited-Revoked” under multiple provisions of Texas Education

Code §39.052 and §39.102(a) and 19 TAC §97.1055(d). The Agency assigns statuses to districts

according to their academic and financial performance, their compliance performance, including,

but not limited to, compliance with requirements related to data reporting and graduation

requirements, and the effectiveness of their programs serving special populations. North Forest

has continually demonstrated extremely poor performance in all of these areas.

North Forest argues in its written brief and during the record review that its financial,

academic, data, and special program problems are the result of TEA intervention and that the

district’s current configuration will eventually produce acceptable results. However, the record

shows that the district’s problems existed long before the Agency intervened and that, while the

TEA intervention improved the district’s performance, it also in some cases brought to light the

true extent of the district’s problems. Ultimately, the number, scope, and extent of the problems

facing the district precluded the possibility of achieving acceptable performance.

The record also demonstrates that the current administration faces the same unique

challenges that prior administrations have faced. North Forest’s poor performance history spans

multiple boards and multiple superintendents, suggesting that the underlying cause of these

problems is systemic and not specific to any one board or any one superintendent. These

systemic problems continue to exist and suggest that the district’s plans and projections to

become a school district that will serve its student’s needs are unrealistic, and that the new

administrations still faces the intractable problems that have frustrated prior administrations.

A good example of how the systemic problems facing North Forest continue to cripple

the District’s financial operations is its inability to find a competent Chief Financial Officer

(CFO). The previous CFO left the district at the end of March 2011. (Ct. Tr. v. 2 pp. 616-17,

NFISD Ex. 125, p. 3339). The position has remained vacant for almost an entire year due to a

lack of quality applicants. (Ct. Tr. v. 2 p. 631). Facing a record review and having no Chief

Financial Officer in place, the District has scrambled to obtain a proposal for accounting services

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from the Harris County Department of Education. This proposal was obtained one week before

the record review and 11 months after they lost their CFO. (NFISD Ex. 168, p. 4410).

Consequently, the District’s audit for the year ended August 31, 2011 contained a material

weakness of internal control because the District has not timely reconciled its bank statements,

asset and liability accounts, and has not inventoried its fixed assets. (NFISD Ex. 2, pp. 2250-51).

This material weakness will likely mean that the District will fail school first and earn another

accreditation status for 2012 of Not Accredited-Revoked. (Ct. Tr. v. 2, p. 625).

The students of North Forest have suffered the consequences of the district’s inability to

fulfill the student’s needs. From their perspective, an annexation into the Houston Independent

School District (HISD) would provide both immediate and long-term benefits. While HISD has

its own challenges, it is a far superior district both in terms of student opportunity and historical

performance. Therefore, it is in the best interest of the students of North Forest for the district to

be annexed into the Houston Independent School District.

II. The North Forest students would benefit from annexation into a better functioning

School District.

A. North Forest has earned a Not Accredited-Revoked status under multiple provisions of the Accreditation System.

1. Deficient Financial Performance.

North Forest has earned four consecutive years of Substandard Performance or

Suspended - Data Quality in the Financial Integrity Rating System of Texas (School FIRST).

This ratings history gives the Commissioner the authority to revoke its accreditation status. TEC

§39.102(a)(10), 19 TAC §97.1055(d)(1)(B), TEA Ex. 15, p. 1093-94.1

In 2008, the District received a financial accountability rating of Substandard

Achievement due to a negative fund balance of -$5,147,611.2

In 2009, the District received a financial accountability rating of Suspended Data Quality.

The rating of Suspended Data Quality is the equivalent of a rating of Substandard Achievement.

19 TAC §97.1055(d)(1)(B). If the district had been rated in the system, it would have received a

rating of Substandard Achievement because (1) the district had a negative fund balance of

                                                            1 The statute allows revocation at two years, but the TEA rules allow for 3 or 4 years. The TEA rules adopt a more generous standard. 2 TEA Ex. 5, pp. 204-209, 231 Ct. Tr. v. 1, pp 109-112.

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$-8,515,9953; and (2) the district had a disclaimed opinion on its independent audit4 and a

material weakness of internal control.5

In 2010, the District received a financial accountability rating of Substandard

Achievement because (1) the district had a negative fund balance of $-994,0426; and (2) the

district had both a qualified opinion7 and a material weakness of internal control.8

In 2011, the District received a financial accountability rating of Substandard

Achievement because (1) the district had a negative fund balance of $-58,0329; and (2) the

district had both a qualified opinion10 and a material weakness of internal control.11

2. Deficient Academic and Financial Performance.

a. Four Consecutive Years of either poor academic or financial performance.

For four consecutive years, North Forest has had either (1) Academically Unacceptable

Performance or (2) Substandard Performance or a Suspended Data Quality rating in the Financial

Integrity Rating System of Texas (School FIRST). This ratings history gives the Commissioner

the authority to revoke its accreditation status. TEC §39.102(a)(10), 19 TAC §97.1055(d)(1)(C),

TEA Ex. 15, p. 1093-94.

In 2008, the District earned a financial accountability rating of Substandard Achievement

as established in the previous section.

In 2009, the District earned an academic accountability rating of Academically

Unacceptable because its completion rate for the class of 2008 was 49.6%, which is below the

75% completion rate standard for acceptable performance.12

In 2010, the District earned an academic accountability rating of Academically

Unacceptable because its completion rate for the class of 2009 was 52.1%, which is below the

75% completion rate standard for acceptable performance.13

                                                            3 TEA Ex. 5, p. 319, Ct. Tr. v.1 p. 111 4 TEA Ex. 5, p. 310, Ct. Tr. v.1 p. 114 5 TEA Ex. 5, p. 359, Ct. Tr. v.1 p. 117‐18 6 TEA Ex. 5, p. 402, Ct. Tr. v.1 p. 122 7 TEA Ex. 5, p. 380, Ct. Tr. v.1 p. 121 8TEA Ex. 5, p. 444, Ct. Tr. v.1 p. 120 9TEA Ex. 5, p. 1187, Ct. Tr. v.1 p. 124 10TEA Ex. 5, p. 1227, Ct. Tr. v.1 p. 124 11TEA Ex. 5, p. 1166, Ct. Tr. v.1 p. 124-25 12TEA Ex. 4, p. 191, Ct. Tr. v. 1, p. 46 13TEA Ex. 4, p. 198, Ct. Tr. v. 1, p. 48

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In 2011, the District earned an academic accountability rating of Academically

Unacceptable because its completion rate for the class of 2010 was 59%, which is below the 75%

completion rate standard for acceptable performance.14

b. Three consecutive years of both poor academic and financial

performance.

As established in the previous sections, the district was Academically Unacceptable and

had either a substandard or suspended-data-quality rating in 2009, 2010, and 2011. This ratings

history gives the Commissioner the authority to revoke its accreditation status. TEC

§39.102(a)(10), 19 TAC §97.1055(d)(1)(D), TEA Ex. 15, p. 1093-94.

3. Deficient Special Programs.

The District’s programs for special populations and its career and technical education

program have historical performance patterns that demonstrate serious or persistent deficiencies

that require the revocation of the district’s accreditation. TEC §39.102(a), 39.054(b-1),

39.052(b)(2)(B-C), 19 TAC §97.1055(d)(2)(B), TEA Ex. 15, p. 1093-94. Serious and persistent

deficiencies in these programs have been identified in a three separate Special Accreditation

Investigations.15

B. HISD does a better job educating students.

NFISD and HISD both serve populations who are mostly minority and economically

disadvantaged. (Ct.Tr. v. 1, p. 65, TEA Ex. 20, p. 1363). The Agency introduced three sets of

data compilations comparing performance of: (1) NFISD to HISD as a whole, (2) NFISD to

HISD students attending school in HISD District 2, the area of HISD contiguous to NFISD, and

(3) NFISD to HISD students zoned to HISD District 2 regardless of where they attend school to

NFISD.

1. District to District comparisons.

In all areas of measured performance, the performance of students in HISD exceeds the

performance of the students in NFISD.

                                                            14TEA Ex. 17, p. 1340, Ct. Tr. v. 1, p. 49 15 TEA Exhibit 1, pp. 1-17, TEA Ex. 1, pp. 18-41, TEA Ex. 15, pp. 1251-90, Ct. Tr. v. 2, pp. 436-37.

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HISD has a lower annual dropout rate for all student groups. (TEA Ex. 20, p. 1377, Ct. Tr. v.1, p. 66)

HISD has a higher four-year graduation rate for all student groups. (TEA Ex. 20, p. 1378, Ct. Tr. v.1, p. 66)

HISD has a higher completion rate for all student groups. (TEA Ex. 20, p. 1378, Ct. Tr. v.1, p. 67)

HISD has a consistent four-year graduation rate and completion rate amongst the student groups, while the NFISD completion rate for Hispanic students is significantly lower that the graduation rate for the other student groups. (TEA Ex. 20, p. 1378, Ct. Tr. v.1, p. 66-67).

HISD has higher percentages of students passing the reading and math TAKS test and a higher percentage of students demonstrating commended performance for all student groups. (TEA Ex. 20, p. 1379, Ct. Tr. v.1, p. 68).

HISD has higher percentages of students passing and receiving commended performance on all TAKS tests taken. (TEA Ex. 20, p. 1380, Ct. Tr. v.1, p. 68-69).

HISD has a higher percentage of students who take the Advanced Placement or International Baccalaureate exams and a higher percentage of students who take the ACT or SAT. Of the students taking these college readiness exams, HISD has a higher percentage of students scoring above the standards for these tests. (TEA Ex. 20, p. 1381, Ct. Tr. v.1, p. 72-73).

Based on this information, Carla Stevens, the Associate Superintendent for Research and

Accountability for HISD, concluded that the performance for Houston ISD exceeded that of

North Forest ISD for all students and each of the student groups in every indicator that we are

showing, which includes dropout, graduation, completion and TAKS performance and advanced

course performance.” Ct. Tr. v.1, p. 73

2. Comparison of Schools in HISD District 2 to NFISD.

The HISD board of trustees is elected in single member districts with defined boundaries.

HISD District 2 is adjacent to NFISD. Demographically, the districts are similar in that the

majority of the students are minorities and are economically disadvantaged. The difference

between the two districts is that HISD District 2 has a higher percentage of Hispanic students and

a lower percentage of African American students when compared to NFISD. Both have student

groups that are predominantly economically disadvantaged. (TEA Ex. 20, p. 1363, Ct. Tr. v.1, p.

74.) In almost all areas of measured performance, the performance of students in HISD exceeds

the performance of the students in NFISD.

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HISD District 2 has a lower annual dropout rate for all student groups. (TEA Ex. 20, p. 1364, Ct. Tr. v.1, p. 76)

HISD District 2 has a higher four-year graduation rate for all student groups. (TEA Ex. 20, p. 1365, Ct. Tr. v.1, p. 76)

HISD District 2 has a higher completion rate for all student groups. (TEA Ex. 20, p. 1365, Ct. Tr. v.1, p. 76-77)

HISD District 2 has higher percentages of students passing the reading and math TAKS test and a higher percentage of students demonstrating commended performance for all student groups, except that the percentage of Hispanic students who passed the TAKS reading test was equal. (TEA Ex. 20, p. 1379, Ct. Tr. v.1, p. 77).

HISD District 2 has higher percentages of students passing and receiving commended performance on all TAKS tests taken. (TEA Ex. 20, p. 1367, Ct. Tr. v.1, p. 78).

HISD District 2 has a higher average score on the SAT and ACT for all students and all student groups. There was no data reported for North Forest ISD ACT average scores for Hispanic students. (TEA Ex. 20, p. 1368, Ct. Tr. v.1, p. 78-79).

HISD District 2 has a higher percentage of students who take the Advance Placement or International Baccalaureate exams and a higher percentage of students scoring above the standards for these tests. (TEA Ex. 20, p. 1369, Ct. Tr. v.1, p. 79-80).

Based on this information, Ms. Stevens concluded that with the exception of the TAKS

reading passing rate for Hispanic students which was equal the Board District Two school

outperformed the North Forest. (Ct. Tr. v. 1, pp. 80-81).

3. Comparison of students residing in HISD District 2 to NFISD.

The final set of comparisons looked solely at the students who reside in HISD District 2

to the North Forest students, regardless of where the HISD students attended school. The

students residing in this district/zone tend to be demographically similar, although the HISD

zone two students are more likely to be Hispanic rather than African American. (TEA Ex. 20, p.

1370, Ct. Tr. v.1, pp. 81-82). In all areas of measured performance, the performance of students

in HISD exceeds the performance of the students in NFISD.

HISD District 2 students have a lower annual dropout rate for all student groups.

(TEA Ex. 20, p. 1371, Ct. Tr. v.1, p. 82)

HISD District 2 students have higher percentages of students passing the reading and math TAKS test and a higher percentage of students demonstrating

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commended performance for all student groups. (TEA Ex. 20, p. 1371, Ct. Tr. v.1, p. 82-83).

HISD District 2 students have higher percentages of students passing and receiving commended performance on all TAKS tests taken. (TEA Ex. 20, p. 1373, Ct. Tr. v.1, p. 83).

HISD District 2 students have a higher average score on the SAT and ACT tests for all students and all student groups. There was no data reported for North Forest ISD ACT average scores for Hispanic students. . (TEA Ex. 20, p. 1374, Ct. Tr. v.1, p. 84).

HISD District 2 students have a higher percentage of students who take the Advance Placement or International Baccalaureate exams and a higher percentage of students scoring above the standards for these tests. (TEA Ex. 20, p. 1381, Ct. Tr. v.1, p. 85).

Based on this information, again Ms. Stevens concluded that students who reside in

District Two outperform the North Forest students. (Ct. Tr. v.1, pp. 85-86).

4. Comparisons of North Forest High School to Houston ISD’s

Kashmere and Wheatley High Schools.

North Forest provided data comparing North Forest High School’s overall performance

to HISD’s Kashmere and Wheatley High Schools. Even these data show that the Kashmere and

the Wheatley High Schools substantially outperform the North Forest students on completion

rates (Kashmere 88.3%, Wheatley 87.2%, North Forest 66%). In reading and math performance,

Kashmere and Wheatley students also outperform the North Forest students. (NFISD Ex. 169,

p. 4414).

The data presented by NFISD purporting to reflect the science and social studies results

from Kashmere are incorrect, as pointed out by Ms. Stevens. (Ct. Tr. v.1, p. 105). The district

contends that only 21% of the Kashmere students passed the science TAKS test and only 63%

passed the social studies test. However, the data results presented are actually the passing rates

for students taking the TAKS-M test in the 2010-2011 school year. The “all students” groups at

Kashmere had passing rates of 56% for the science test (not 21%) and 89% for the social studies

test (not 63%). These results are readily available on the TEA website, and the Designee may

take notice of these results.

Using the accurate results, the North Forest students did outperform both Kashmere and

Wheatly students in the science test (by five percentage points in one case and six in the other)

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and outperformed the Wheatley students in the social studies test by one percentage point.

However, because HISD has both an open transfer policy as well as a magnet school program,

the Commissioner’s decision should not lay solely on the data comparisons. The programs

offered by HISD allow students who desire a different educational program to opt out of

attending either high school and attend either another high school in HISD that has room for the

student, or a magnet program. In North Forest, the students have historically had no option but

to attend North Forest High School, which has been rated Academically Unacceptable for six

consecutive years.

C. Annexation into HISD would provide additional choices to the students

residing in North Forest.

North Forest, with an enrollment of between 6,000 and 7,000 students, is a small school

district when compared to Houston, who has an enrollment of 203,000. If a student wants to

graduate from North Forest, they must attend the district’s only high school, North Forest High

School, which has been Academically Unacceptable for six consecutive years. However,

Houston has an open transfer policy, as well as a magnet school program, both of which provide

additional choices for students not wishing to attend the school to which they are zoned. If the

district is annexed into Houston, the students residing in North Forest will be able to attend any

Houston campus that has room under the open transfer policy. They would also be eligible to

apply to any HISD magnet program, including the nearby Barbara Jordan School (focusing on

Career and Technology) or the Booker T. Washington School for Engineering.16

III. The North Forest Plan is Inadequate.

North Forest takes the position that the current Board and Superintendent can correct the

district’s noncompliance and performance concerns. However, a look at the troubled history of

North Forest indicates that while the district has been able to show improvement at times, it has a

pattern of improvement followed by regression, suggesting that there are underlying systemic

issues that have not been addressed.

                                                            16 The NFISD Board President did state that there was a battle regarding the continuation of this program. However, the school is currently operating and has not been closed.

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A. History of Prior Problems.

The District’s troubled performance history spans multiple boards and multiple

superintendents. While the extended performance history is not relevant in determining the

assignment of the accreditation status, it is clearly relevant to rebut the notion that all of the

district’s problems would be solved if they just had the right Superintendent or the right Board of

Trustees.

The Agency included a summary of investigative activity regarding the District from

1996-2008. The history reflects recurring financial problems, data integrity issues, poor

academic performance, and various other serious operating issues. (TEA Ex. 15, p. 1292-1298).

A 1988 Houston Chronicle news article shows that, at that time, the District had problems

relating to deficit budgets, excessive and undocumented travel expenditures, procurement

problems, the Board of Trustees micromanaging daily administrative decisions, and conflicts of

interest. (TEA Ex. 15, p. 1299).

The troubled history of North Forest is best reflected in the affidavits of William Jones

(former Superintendent) and Lois Edwards (current Board President). (NFISD Ex 156 and 158,

pp. 4382-4385 and 4389-92). Mr. Jones started as a substitute teacher and worked his way up to

interim superintendent from March 2007 to November of 2008. Mr. Jones describes a troubled

history of superintendents of North Forest. Mr. Jones mentions that the district digressed under

Superintendent Gloria Woods who did not work well with the Board. Dr. Walker was the next

superintendent who is mentioned, and Mr. Jones states that he had no experience with urban

districts and did not work well with the Board. He states that “Even though he was white, which

amazed many, he tried to motivate the staff. Most wondered why the Board hired him.” He also

discussed his predecessor, Dr. James Simpson, who he describes as “in over his head.” He states

that Dr. Simpson undermined the administrative staff and tried to investigate board members.

He was eventually terminated and Mr. Jones replaced him as an interim. When the Agency

assigned the Board of Managers, one of the stated reasons was that the Elected Board repeatedly

tried to rehire Dr. Simpson. (TEA Ex. 11, P. 818)

Ms. Edwards was elected to the school board in 1985. She stated that she supported the

superintendent at that time, John Sawyer, but that, in her first meeting as a trustee, the Board

voted to fire him over her objection. Soon thereafter, TEA appointed a monitor for governance

who helped the district. The Board then hired Carroll Thomas, who brought the Board together

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in his term from 1986-92, but he was hired away by Beaumont ISD, who offered him more than

what North Forest could pay. He was replaced with Gloria Woods, but “she was a disaster.”

Ms. Edwards left the Board in 1993.

B. Recurrent Personnel Issues.

One of the recurrent problems with North Forest is its inability to attract and retain

qualified personnel. This recurrent problem is described in detail in the affidavits of Lois

Edwards and William Jones (detailed in the previous section). Almost immediately after his

appointment, TEA conservator Henry Boening reported that he had concerns with the Finance

Department’s staffing and ability to perform finance duties, including the failure to timely

reconcile its bank statements. He also identified issues with the leadership in the District’s

police and maintenance departments. (TEA Ex. 11, pp. 860-61). The issue with inadequately

trained financial personnel is also noted by the Agency’s Special Accreditation Report dated

May 16, 2008. (TEA Ex. 1, p. 5).

Currently, the personnel problems continue to exist. Kay Karr, the agency-appointed

conservator, reported vacancies in certain key positions and inexperienced staff in others. (TEA

Ex. 15, p. 1091). As of the date of the record review, the District does not have a Chief Financial

Officer. This position has been vacant for almost one year, and, during that time, the District had

once again fallen behind on its bank reconciliations. The Superintendent testified that she has

not been able to fill the CFO position due to a lack of quality candidates. (Ct. Tr. v. 2, p. 631).

The District’s financial consultant, Doug Karr, acknowledged that the District has problems

attracting quality personnel and that this is a historic problem that preceded the District’s current

accreditation problem. (Ct. Tr. v. 2, pp. 529-30).

The Superintendent testified that the District had brought in the Harris County

Department of Education (HCDE) to perform some financial services. However, a review of the

documentary evidence shows an unsigned Proposal from HCDE dated February 8, 2012 (one

week before the record review commenced). This proposal reveals that HCDE recommended

that the District review and improve its business office. The proposal also states that HCDE will

assist the District in finding a full time CFO. In the interim, HCDE will provide a “project

manager” who will be on-site at least two days per week for the next 24 weeks. (NFISD Ex. 168,

pp. 4410-13).

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C. Inadequacy of the District’s Plan

The District provided its district snapshot, a report required for districts failing to meet

Adequate Yearly Progress (AYP). (NFISD Ex. 2, pp. 2001-68). The District starts by providing

projections about its completion rate. According to the District’s own projections, it will achieve

Exemplary performance in its completion rates in the 2013-2014 year (Exemplary performance

is a completion rate above 90%). The District further projects a 98% completion rate in the

2014-15 school year. (NFISD Ex. 2, pp. 2001). There is no explanation about how the district

expects to achieve this phenomenal increase in performance, but these are clearly ambitious

goals that are not based on data-driven projections.

The NFISD’s responses to the findings of the district snapshot show that the District is

still in the process of designing systems to meet identified needs. The District has responded to

the specific findings with a series of generalities and vague promises of better performance. For

example, Recommendation 6 tells the District to develop a plan for monitoring and evaluating

projects, but the District’s response is simply that the “LEA’s comprehensive focus is data-

driven consistency.” The seventh recommendation is to work cooperatively with TEA in

addressing an inconsistency in accounting for a major liability in the general fund, to which the

District responded that it adheres to the program specific requirements. In essence, the District

simply denies that there is a problem in this area. The eighth recommendation is that the District

develop a comprehensive three-year budget, to which the district responded that a multi-year

budget projection framework is in place. However, the response fails to acknowledge that the

District is without a Chief Financial Officer, has not yet resolved its competency issues in its

finance department, and is just getting around to reconciling its bank statements.17 The ninth

recommendation is to explore ways to increase the percentage of the budget for instruction to

align with state averages. The district simply responds that this is an ongoing fiscal priority.

(NFISD Ex. 2, p. 2005).

D. Other Unresolved Issues.

The District faces numerous other challenges that it has not adequately addressed,

including:

                                                            17 There is no provision in the HCDE proposal for financial services to provide a comprehensive three-year budget. See NFISD Ex. 168, pp. 4410-13.

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Their Superintendent has no previous experience as a Superintendent, but is expected to turn around a District where numerous others have failed.

The Superintendent is uncertified and is not on a reasonable track to obtain the proper certification. Further, time spent pursuing the appropriate certification will take time from the challenges described in the record.

The District’s latest audit report contains a material weakness in internal control because it is not timely reconciling its bank statements, its assets and its liabilities. Also, the District has also failed to perform a physical inventory of its capital assets. (NFISD Ex. 2, p. 2250-51)

The District will likely fail School FIRST next year (for a fifth consecutive year) due to its Qualified Opinion and Material Weakness in Internal Control, which will lead to a Not Accredited-Revoked status in 2012-2013. (NFISD Ex. 2, p. 2250, Ct. Tr. v.2, p. 625).

The District’s middle school and high school facilities are in poor shape. (Ct. Tr. v. 2, p. 423-24).

The district’s board president is generally unaware of the district’s serious performance deficiencies at North Forest (Ct. Tr. v. 2, pp. 491-92) and is specifically unaware of the serious performance deficiencies in the Career and Technology Program. (Ct. Tr. v. 2, p. 500).

The District still owes almost $8 million to its construction account, even after attempting to write off over $5 million in costs that have not been reviewed or approved by the Agency. (NFISD Ex. 2, p. 2236).

The District has overestimated its ADA for the current year by approximately 300 students. (Ct. Tr. v. 2, pp. 645-47).

IV. The Agency’s Interventions did not cause the problems at North Forest.

A. The District’s performance improved in all areas during the TEA intervention.

1. Financial Performance.

a. General Fund Balance improved

On August 31, 2007, the District’s balance in its general fund was $-5,147,611. (TEA

Ex. 5, p. 228). On August 31, 2008, the District’s balance in its general fund was $-8,515,995.

(TEA Ex. 5, p. 323). On August 31, 2009, the District’s fund balance was $-994,042. (TEA

Ex. 5, p. 402.). On August 31, 2010 the District’s balance in its general fund was $-452,660.

(TEA Ex. 10, p. 746).

Henry Boening, a financial conservator was appointed in March of 2007, because the

district had issues regarding its IFA funds and FEMA reimbursements. Over the course of his

13  

assignment, the conservator discovered that the District was also having problems with the

balance in its general fund. The cash flow concerns identified by the conservator and TEA staff,

in addition to other serious concerns, led the Commissioner to appoint a Board of Managers in

November of 200. Soon after the installation, the district reported a deficit of -$8,515,995. In a

period of two years, that deficit was almost completely eliminated.

b. Internal Control Structure Improved.

For the fiscal year ending on August 31, 2007, the District’s independent audit report had

indicated that the district’s financial reports were reliable. (TEA Ex. 5, p. 215). However, the

conservator questioned the accuracy of this report and directed the District to hire another audit

firm. The next audit report, prepared by Null-Lairson, found that the District’s financial

statements for the year ended August 31, 2008 were so unreliable that it was not able to express

an opinion about them. (TEA Ex. 5, p. 310). The independent auditor reported that it could not

rely on the accuracy of the prior year’s audit report. The independent auditor also found that the

district also had a material weakness of internal control because it had “problems with their

accounting and reconciliation activities in most significant audit areas.” (TEA Ex. 5, p 359).

By the end of the next fiscal year (August 31, 2009), the District had improved its

financial reporting to the point that the independent auditor issued a qualified opinion about the

accuracy of the District’s financial statements, stating that the district still had problems with the

balances in its capital asset and fund balance account, but that, otherwise, the financial

statements did “present fairly, in all material respects.”

2. The District’s Completion Rate Improved.

The District’s academic conservator, Barbara Wilson, was appointed in November 2007.

She immediately began making her observations at the District’s multiple Academically

Unacceptable campuses, culminating in directives regarding campus leadership. As this was

going on, North Forest’s graduating class of 2008 had a completion rate of 49.6%, which is well

below the state standards. The Board of Managers was assigned in October of 2008. (TEA

Ex. 2, pp. 52-54). North Forest’s completion rate then started to steadily improve. The class of

2009 had a 52.1% completion rate, the class of 2010 had a completion rate of 59%. (TEA Ex. 4,

p. 198, TEA Ex. 17, p. 1340). The data for the class of 2011 is not yet final. The Board of

Managers was withdrawn in November of 2011. (TEA Ex. 2, pp. 76-77).

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3. The District’s Programs for Special Populations Improved.

The Agency issued three Special Accreditation Investigations addressing the District’s

compliance with programs serving special populations. The first report was issued June 13,

2008, showed substantial non-compliance in the area of Special Education. (TEA Ex. 1, pp.

1-17). On July 9, 2010, the Agency issued a second report. (TEA Ex. 1, pp. 18-41). This report

found that some of the violations from the first report were corrected, some were continuing, and

some new violations were noted. On October 4, 2011, the Agency issued a third report which

identified substantial new problems with the District’s career and technical education program;

however, it finds that most of the previously identified Special Education program violations had

been corrected. (TEA Ex. 15, pp. 1251-90, Ct. Tr. v. 2, pp. 443-44).

B. North Forest’s problems were not caused by the TEA Management Team.

When the Commissioner informed North Forest that he intended to elevate the level of

intervention from a Management Team to a Board of Managers, he addressed the actions of the

Management Team and explained why they had not been able to correct the issues facing the

district. The action to elevate the level of intervention was the subject of a prior record review.

(TEA Ex. 2, pp. 52-3).

First, the Commissioner explained that he was compelled to increase the level of

intervention due, in part, to the district’s current “…failure to consistently work cooperatively

with the assigned Management Team...” (TEA Ex. 11, p. 817). In addition, the Commissioner

noted that the Management Team’s reports, as well as data collected by TEA staff, continued to

expose “material, systemic and pervasive weaknesses in the district’s financial, accounting, and

data reporting systems and in its systems of complying with federal and state program

requirements, reflecting a lack of proper internal controls to ensure the efficient and effective

operation of the district.” The Commissioner noted that these problems persisted despite the

diligent work of the management team. (TEA Ex. 11, p. 817).

Finally, the Commissioner noted that the District’s governance was unstable and that it

had both failed to take initiative to solve its own problems and that it had failed to support the

recommendations of its interim superintendent, the conservators, and TEA staff. Moreover, the

Board of Trustees had recently fired its superintendent, given him a $233,000 buyout, and then

made multiple attempts to rehire him. (TEA Ex. 11, p. 818).

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C. The Agency’s Management Team and TEA personnel discovered the true

extent of the District’s systemic problems.

When the Agency intervened at the end of the 2006-2007 school year and during the

2007-2008 school year, it found that the actual problems were far worse than was indicated by

the data the Agency had received from the district. When it became apparent that the issues the

district was facing were severe and systemic, the Commissioner was forced to elevate the level

of intervention to a Board of Managers. Basically, the district was severely deficient in all areas

that the Commissioner considers when making accreditation decisions: finance, academics, data

reporting, special programs, and overall compliance.

Moreover, the extent of the problems suggests that there was no simple solution. The

problems with finances would suggest that the overall expenditure of resources be reduced, while

the problems with academic performance and special program compliance would suggest that

additional resources be committed to those areas. The true extent of the problems uncovered

while the Management Team was in place is, therefore, crucial to understanding why the

district’s problems have not been fully rectified.

1. Financial Management Issues.

In the letter informing the District that the Commissioner intended to assign a Board of

Managers, the Commissioner noted that current cash flow concerns would result in a deficit in

the district’s operating fund of approximately $11.8 million at the close of the 2008 fiscal year

(August 31, 2008), and that the district would not be able to sustain itself at its current levels of

taxation. This precarious financial condition resulted in the district’s inability to meet its payroll

obligations with appropriate sources of funds and its inability to obtain short-term bridge loans.

(TEA Ex. 11, pp. 817-18).

a. The district’s financial management problems existed, but were not

fully identified, when the financial conservator was appointed.

On March 7, 2007, Henry Boening was appointed to be the financial conservator for

North Forest. At that point, the Agency was not aware of the true extent of the systemic

financial management issues. Mr. Boening was appointed because the Commissioner found that

the district had been experiencing financial management problems for the past several years,

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including failure to document expenditures from its construction fund and failure to manage its

Federal Emergency Management Agency (FEMA) reimbursements. (TEA Ex. 11, p. 827).

i. Failures in the Finance Department.

In Mr. Boening’s May 2007 report, he reported that he had concerns about the finance

department’s staffing and ability to adequately perform finance duties, including the failure to

timely reconcile the bank statements. The district’s CFO addressed this problem by assigning a

staff accountant to complete the bank reconciliations. (TEA ex. 11, p. 860-61).

ii. Procurement and Contracting Problems.

In Henry Boening’s first monthly report in April of 2007, he reported a multitude of

pressing financial issues, including issues with FEMA documentation, the I&S fund, the

Instructional Facility Allotment (IFA), costs at the Kirby Middle School, mold in Forest Brook

High School, travel policy, location of contracts, two contracts providing the same service (alarm

service), and the need to perform internal audits on the district’s maintenance, food service and

transportation departments. Mr. Boening resolved some issues (revised travel policy and

changed the location of the district’s contracts) and started work on the more intractable

problems. For example, he recommended that the board and interim superintendent perform

internal audits of the maintenance, food service, and transportation departments. (TEA Ex. 11, p.

853).

In Mr. Boening’s August 2007 report, he identified new issues regarding the district’s

failure to adhere to the $25,000 aggregate purchasing limit and problems with the warehouse

operations and recommended that the district change procedures to help identify purchases that

exceeded $25,000 annually and to move the warehouse operations function to the finance

department. He also noted that the district had amended its budget for the first time in three

years. (TEA ex. 11, p. 880-81).

iii. Deficit in the General Fund

The independent audit report for the fiscal year that ended on August 31, 2007 questioned

the district’s ability to continue operations because of a deficit of over $5 million in its general

fund and a liability to the state of approximately $7 million. (TEA Ex. 5, p. 256).

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iv. Issues with the accuracy of the audit report.

In Mr. Boening’s December 2007 report, he noted that he began meeting weekly with the

district’s external auditor, Walter Davis, and noted that he had concerns about the accuracy of

the prior year’s audit. (TEA ex. 11, p. 906-07).

In Mr. Boening’s January 2008 report, he identified concerns about the district’s budget

deficit and directed the district to develop a Request for Proposal (RFP) for audit services for the

2008-2009 fiscal year. (TEA ex. 11, pp. 911-12).

v. Investigation into procurement practices in the Special

Education Department.

In Mr. Boening’s October 2007 report, he noted that there was an investigation regarding

the special education department’s contracts with external vendors, for which subpoenas were

issued. (TEA ex. 11, p. 893-94). The investigation related to contracts between the Director of

Special Education and family members. (TEA ex. 11, pp. 1000-05).

vi. Other financial management concerns.

During his tenure as conservator, Mr. Boening identified many additional problems with

the financial management of the school district, including:

Problems with the maintenance department, including coding, unauthorized hiring, and over expenditures of the budget. (TEA ex. 11, p. 860-61).

Problems relating to the leadership of the police department. (TEA ex. 11, p. 860-61).

Problems with the district’s personnel records and staffing. (TEA ex. 11, p. 860-61).

Errors in PEIMS documentation (TEA ex. 11, p. 874-75).

Failure to complete a fixed asset inventory for at least two years. (TEA ex. 11, p. 893-94).

In three letters dated July 15, 2008, Mr. Boening issued three directives to the North

Forest Board of Trustees. In these directives, Mr. Boening noted that the interim superintendent

had recommended that the Board (1) accept a proposal from the audit firm of Null-Larison, P.C.

to provide auditing and other related services, (2) approve Charles Russell as principal of North

Forest High School, and (3) approve Victor Nash as the Principal of Hilliard Elementary School.

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The Board had rejected all three recommendations at its prior Board Meeting. Mr. Boening then

directed the Board to accept all three superintendant recommendations. (TEA ex. 11, p. 943-45).

b. Problems identified by the first TEA Special Accreditation

Investigation.

The Agency issued a Report from a Special Accreditation Investigation on May 16, 2008,

based on field work performed during the 2007-2008 school year. This is the report that

identified the $13.3 million that was “borrowed” from the Construction fund to meet payroll

costs. The District takes the position that Henry Boening was responsible for this liability.

However, their own audit report clearly identifies the source of this liability to be from the 2005-

2006 school year. (NFISD Ex. 2, p. 2236, Note E). Mr. Boening was appointed in March of

2007, well after the close of the 2005-2006 school year. He did approve a one-time use of those

funds, but these were repaid from the next allotment and are not part of the liability. This report

identified many severe systemic issues that ultimately resulted in the appointment of the Board

of Managers, including: (will summarize)

2. The district had severe academic and special program problems when the

academic conservator was appointed.

On November 1, 2007, the appointment of Barbara Wilson as an academic conservator

for North Forest created a management team. Ms. Wilson was assigned to NFISD because it had

multiple Academically Unacceptable campuses which included Oak Village Middle School (four

consecutive years), as well as four other campuses that were Academically Unacceptable for two

consecutive years. (TEA Ex. 15, p. 1104). The district also had deficiencies and required

corrective actions identified in a Performance-Based Monitoring report issued on October 30,

2007. (TEA Ex. 15, p. 1104). Ms. Wilson’s charge included data quality, improvement of TAKS

performance and special program compliance. The Agency was not yet aware of the district’s

completion rate problem, which first manifested in the graduating class of 2008.

By the time that Barbara Wilson was appointed, the 2007-08 school year was well

underway. The Board of Managers was then appointed approximately one year later. Thus, her

conservator reports are not included in the record because she did not have time to develop

significant findings relating to district operations. Henry Boening spoke for the management

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team and issued academic directives based on Ms. Wilson’s recommendations regarding the

assignment of the principals at the end of the 2007-08 school year.18

Academically, North Forest’s graduating class of 2008 had a completion rate of 49.6%

for all student groups, a result that is well below the 75% threshold to be academically

acceptable.

The academic programs and special programs had significant deficiencies found by the

Agency’s Special Accreditation Investigation issued on May 16, 2008.

D. The District’s Problems were not caused by the Board of Managers.

1. The extent of the District’s problems precluded a complete fix by the Board of Managers.

The district takes the position that the district’s deficiencies should have been fully

corrected by the Board of Managers. However, the district is not able to explain how the Board

of Managers could have accomplished this during the two years allowed by statute. As the

previous section shows, the district’s problems were extensive in each of the areas of

performance measured by the accreditation system. Because the problems start with the data, the

Agency, as well as the District lacked precise information to guide decisions that needed to be

made.

In addition, the District had poorly qualified and trained personnel. Further, the District

had poor facilities. All of these problems would suggest that more resources were necessary to

upgrade facilities, hire better qualified personnel, and train the current personnel. However, the

reality of the District’s financial situation did not allow for substantial new hires or expensive

training programs. The prior misuse of the construction fund precluded the possibility of

substantial upgrades to the facilities.

2. The Board selection process did not cause the District’s problems.

The District took the position that the Agency should have selected more qualified Board

members for the two members who resided in the district’s geographic boundaries. The District

produced a memo from Commissioner Shirley Neeley that identified a process to be used to

select Board members. Ron Rowell testified that none of the individuals on his list of monitors

and conservators resided within the boundaries of North Forest. Given that he had a                                                             18 The District takes the position that Mr. Boeing overstepped his authority. However, the assignment of a management team clearly allows for the team to speak through one of its members.

20  

geographical restriction, Mr. Rowell very logically focused his search on individuals and

institutions in that geographical area. (Ct. Tr. v. 2, p. 297). Furthermore, the District’s current

attempts to discredit both the qualifications and efforts of the appointed board are both self-

serving and offensive. The local individuals appointed to serve in this capacity met all statutory

eligibility requirements that apply to the elected board members, including the currently-elected

board, and they took on the challenge based on a commitment to the students and their

community. They were, and are, no less qualified to serve than the current members of the board

elected by the community, and a presumption by the currently-elected board that it will be

successful based on the qualifications of the current board members reflects an inaccurate grasp

of the District’s circumstances.

3. The Board received training.

The District takes the position that the Board of Managers did not receive training. The

District submitted affidavits from the two community members of the Board of Managers stating

that they only received one training, which was conducted by the Texas Association of School

Boards. (NFISD Ex 155, pp. 4380 and NFISD Ex. 167, pp. 4407). However, during questioning,

the Board’s President, George McShan, specifically identified training that the Board members

received, including policy training by the Texas Association of School Boards in June of 2009,

the Summer Leadership Institute in San Antonio in June of 2009, the TASA/TASB annual

conference in Houston in the Fall of 2009, and the National School Board Association

Conference in Chicago held in April of 2010. (Ct. Tr. v. 2, p. 413).

4. The Board of Managers did not violate the Open Meetings Act.

The District takes the position that the Board of Managers violated the Open Meetings

Act. The District submitted affidavits from the two community members of the Board of

Managers alleging that the Board of Managers would deliberate about agenda items before the

Board meetings. (NF Ex. 155, pp. 4379-81, NFISD Ex. 167, pp. 4407-09). This assertion was

specifically denied by George McShan in his credible, live testimony before the Commissioner’s

designee. (Ct. Tr. , v. 2, pp. 408-09). The District did not challenge Mr. McShan’s testimony.

The two community board members were not present to explain and defend their assertions.

The information in the community board members’ affidavits is questionable for many

reasons. As shown previously, the community board members both incorrectly state that they

21  

only received one training session, when George McShan is able to identify at least four training

sessions that occurred. Moreover, Willie Jones incorrectly claims that Dr. Johnson called him

“about one or two weeks” after he met with Gaye Lang “in the latter part of July 2008” and

stated that he had set his cabinet and it included Mr. Jones, Ms. Williams and Mr. McShan.

(NFISD Ex. 155, p. 4379). However, Mr. McShan was asked to serve by the Commissioner in

September of 2008. (Ct. Tr. v. 2, pp. 406-07).

Both Board members incorrectly state that performance did not improve during their

tenure. Mr. Jones states that he was “led to believe the district was improving.” (NFISD Ex. 155,

p. 4380). Ms. Williams states that she was “kept in the dark and led to believe that the district

was improving.” (NFISD Ex. 167, p. 4409). However, as shown previously, the district did

improve financially, academically, and with its special program compliance during the term of

the Board of Managers, suggesting that the community board members have subsequently been

pressured to make these statements. Ms. Williams shows the source of at least some of this bias

when she states, “I believe we were used as pawns as the Board of Managers. It’s ridiculous and

this is why I catch hell in the community.” (NFISD Ex. 167, p. 4409, emphasis added).

Mr. McShan explained that he met with the superintendent before board meetings to

work on the Agenda. Such a meeting is allowed by the Open Meetings Act because there was

not a quorum present. He also explained that the Board would have a meal before the meetings

and that they would ask for clarifications about the agenda items, but that the members never

discussed how they should vote. Social meetings attended by a quorum of board members is not

considered an open meeting if no formal action is taken, even if some Board business is

discussed incidental to that meeting. Texas Gov’t Code §551.001(4)(B)(iv). Mr. McShan further

explained that because the two community members were not familiar with Robert’s Rules of

Order for Parliamentary Proceedings, the Board Secretary would write the motions for the Board

members, knowing that the drafted motions easily could be adjusted to accommodate either a

motion to approve or deny an item. This is a common practice and does not state a violation of

the Open Meetings Act.

The conduct that the Board members are now complaining about occurred between 2008

and 2010, but neither Board member complained either to the Agency or to the Attorney

General’s Office, who is responsible for overseeing the open meetings act. Neither community

22  

board member explains why they waited until this accreditation proceeding to first make these

allegations.

Both community board members initially disclaim any knowledge whatsoever about

school business, yet both community board members are also willing to swear that the current

Board and superintendent are moving the district in a very positive direction.

Finally, while the affidavits are mostly written from the perspective of the individual

community board members, the key portions of the affidavits use either the exact same or

extremely similar wording, suggesting that the statements in the affidavits are not the original

work of the affiants. (Compare NFISD Ex. 155 and 167). The following four examples are

provided. Where the language is exactly the same, those words have been underlined:

Example 1:

Mr. Jones: “Unfortunately, neither the Texas Education Agency nor Dr. Johnson offered or provided the training or the tools we needed to properly direct the district. The board managers were given one workshop at TASB. The Texas Education Agency provided no training on finance, bond issues, or other matters the board members would face.”

Ms. Williams: “Unfortunately they gave us no tools to turn it around. They gave us one workshop as training by TASB. No training on finance, bond issues or how to be a trustee.”

Example 2:

Mr. Jones: “It was unfair to me and the children of North Forest for the Texas Education Agency to appoint me as a Manager.”

Ms. Williams: “I think it was unfair to put me in this position.”

Example 3:

Mr. Jones: “The current board and the superintendent, Edna Forte, are moving the district in a very positive direction. They have my full support.”

Ms. Williams: “The current board and Edna Forte are making great strides and are moving the district in a very positive direction. They have my full support.”

Example 4:

Mr. Jones: “…the four of us … would meet prior to the open board meeting, go over the agenda items, and Dr. Johnson and Mr. McShan would tell us how to vote on each agenda item prior to the open board meeting. I did not know we were participating in an

23  

illegal meeting. Merry Schneider-Vogel, counsel for the board, told us one time that we could not meet that way, however, Dr. Johnson and George McShan told Ms. Williams and me not to worry about it and that we could continue to meet that way.

Ms. Williams: “Before each board meeting the board members and Dr. Johnson would meet to go over the agenda, it was in these meetings that they would tell me and pastor Jones how to vote. I did not know that we were participating in an illegal meeting. Merri Schneider-Vogel told us one time would could not meet that way, however, George McShan said that we could and not to worry about it.”

E. The District’s Problems were not caused by the TEA-Appointed

Superintendent.

The District makes a series of allegations regarding Adrain Johnson. However, the

District’s own investigation concludes that “many of the allegations are not fully substantiated

due to inadequate or non-existent record keeping during Dr. Johnson’s time as Superintendent, or

because the investigation terminated before all relevant information could be collected.” (NFISD

Ex. 125, p. 3339). The investigation does not identify any single allegation that was actually

substantiated. (NFISD Ex. 125, pp. 3323-4286). In the voluntary separation agreement and

release, Dr. Johnson agreed not to appear in any state administrative proceeding against the

district relating to his employment as superintendent unless required by court order. (NFISD

Ex. 125, pp. 3330). Dr. Johnson further agreed to cooperate with North Forest in action against

the district arising from any event occurring during his employment at North Forest. (NFISD

Ex. 125, pp. 3328). North Forest did not produce Dr. Johnson at the record review to

substantiate any of these allegations.

The Agency does not take the position that each and every decision or action taken

during its intervention with the District was the absolute optimal decision. The timing of the

front office renovations may not have been the wisest move at the time, and turning an audit

report in late was not something the Agency would encourage (although that act had no negative

consequences for the district, who was going to fail school FIRST regardless of when the audit

was turned in). However, the objective evidence shows that the TEA interventions clearly

benefitted the students of North Forest, even though they did not bring the District fully into

compliance with the accreditation system.

24  

V. Miscellaneous Legal Issues

A. Appointment of the Board of Managers does not preclude closure of the district.

The District argues that when it fails to satisfy the accreditation criteria, the

Commissioner may either appoint a Board of Managers or close the district, but cannot do both,

relying on the meaning of the term “or” connecting the eleven actions the Commissioner may

take under TEC §39.102(a). However, the stem of TEC §39.102(a) states that the Commissioner

shall take “any of the following actions”. The term use of the term “any” modifying a plural

term “actions” clearly delimits the actions that the Commissioner may take. For instance, the

Commissioner could both order the issuance of a public notice (§39.102(a)(1)) and arrange an

on-site investigation (§39.102(a)(5)).

B. The Commissioner may revoke a District’s accreditation based on

completion rates.

The District argues that when its academically unacceptable performance is based on

completions rates, that the only remedies available to the Commissioner are contained in TEC

§39.102(a)(11). The four actions provided for in Subpart 11 can only be ordered when the

District fails to meet a standard due to completion rates. However, nothing in this statute

prohibits the Commissioner from taking the other actions provided for in this section. Starting at

the stem of §39.102(a), when the Commissioner determines that the District has failed an

academic performance standard under TEC §39.053 or §39.054, then the Commissioner can take

any of the actions listed under TEC §39.102(a). The exceptions are that the Commissioner may

not appoint a Board of Managers under §39.102(a)(9) unless the District failed the standards

while it was either Accredited-Warned or Accredited-Probation, the Commissioner may not

revoke the District’s accreditation status under TEC §39.102(a)(1) unless the poor performance

occurs in two consecutive years, and the Commissioner cannot order four interventions listed in

§39.102(a)(11) unless the District failed to satisfy the standard due to completion rates.

C. The Board of Managers must contain a majority of community members.

The District argued at the record review that Boards of Managers are referred to in two

places in TEC §39.102. In TEC §39.102(b) the Board of Managers must include a majority of

community members, but in TEC §39.102(a)(9) the statute is silent on the composition of the