Austin Independent School District (ISD) is set to face renewed scrutiny from state authorities, as Texas Comptroller Don Huffines has initiated a comprehensive investigation into the district’s financial practices, an inquiry prompted by Governor Greg Abbott.
On Monday, Huffines announced that Austin ISD, alongside Barbers Hill, El Paso, and Prosper school districts, will undergo an in-depth financial review. This investigation follows Abbott’s request in August to examine public school district expenditures to ensure that taxpayer money is being utilized for its intended purposes ahead of the upcoming legislative session. The governor emphasized the need for a focused analysis of spending habits, particularly regarding the allocation of funds toward administrative costs. However, the selection process for the districts involved in this review has not been disclosed.
This latest examination adds to the ongoing financial oversight that Texas school districts are subject to, which includes an annual requirement to submit independently audited financial statements to the state’s education agency. Since January, the Austin school district has received multiple documentation requests from the Texas Attorney General’s Office and one review from the Texas Education Agency.
During the announcement of the review, Abbott highlighted a concerning trend: Austin ISD has experienced a 14% decline in enrollment from 2015 to 2025, coupled with a staggering 75% increase in administrative spending per student. In response, Abbott proposed that school districts should be mandated to allocate at least 70% of their funds directly to classroom instruction. Acknowledging the issue, Austin ISD has indicated that administrative staffing had not aligned with the decrease in student enrollment and has taken steps to restructure its central office to curtail administrative expenses.
Huffines stated, “This review is an important step to ensure transparency, accountability, and the responsible use of public funds. Our office is committed to providing a clear assessment that helps Texans understand how their education dollars are being used.” Both Huffines and Abbott are candidates for election this year, with Abbott having appointed Huffines after his success in the March Republican primary.
The other districts included in the financial review are Barbers Hill ISD, serving approximately 8,000 students near Houston; Prosper ISD, with around 33,500 students near Dallas; and El Paso ISD, which has just over 46,000 students. In comparison, Austin ISD currently has an enrollment of about 66,000 students.
The upcoming review will scrutinize whether district spending adheres to state law and is focused on benefiting students, classrooms, and teachers rather than expanding administrative roles or bureaucratic processes. A final report outlining the findings is expected to be completed by December 31.
There has been no response from the Texas Comptroller’s Office regarding the criteria for selecting the districts or what actions may follow the review’s findings. Similarly, Austin ISD has not commented on the review as of the publication date. Last month, Superintendent Matias Segura remarked that more than 75% of the district’s general fund is allocated to classroom expenses this year, defending the district against Abbott’s criticisms.
Segura noted, “The data set that was used by the governor was over a 10-year period. Certainly, when you use that duration, things can be presented a certain way.” This year, Austin ISD’s financial health has already been scrutinized, with the Texas Education Agency downgrading the district’s financial rating due to its staff-to-student ratio.
The state assesses district spending through its Financial Integrity Rating System of Texas (FIRST), which monitors how administrative costs align with changes in student-to-staff ratios. Austin ISD’s Chief Financial Officer, Katrina Montgomery, informed trustees that for the first time in 21 years, the district’s financial rating has dropped to a B. The trustees contended that the district had increased staffing, especially in special education, to comply with recent oversight requirements from the TEA.
Trustee Fernando de Urioste expressed concern, stating, “I am pretty sure our families don’t agree with TEA as far as the decline in staffing.”
The comptroller’s investigation adds to the mounting pressure on Austin ISD from state authorities. Earlier this year, Attorney General Ken Paxton requested documentation on the district in relation to various complaints, including its adherence to laws regarding sex-segregated spaces and the display of the Ten Commandments in classrooms. Additionally, Abbott directed both Paxton’s office and the Texas Education Agency to investigate Austin ISD’s management of student-organized protests last school year concerning increased immigration enforcement.
As of now, Paxton’s office has not provided any updates regarding the status of these investigations, nor has the Texas Education Agency commented on the ongoing inquiries into student protests.
