Texas audit flags management, oversight issues at TEA

State Rep. Ana-María Rodríguez Ramos says a state audit of the Texas Education Agency (TEA), released this month, validated concerns she raised during last year’s budget debate, with findings she described as more extreme than she expected.

The audit, ordered through a budget rider approved last session, found that TEA missed the statutory mark for its management-to-staff ratio and that management costs increased substantially between 2021 and 2025. Auditors also identified gaps in required contract disclosures and online postings.

As school districts across Texas cut spending to close budget shortfalls, scrutiny of spending and staffing inside the state education agency is ratcheting up. Ramos said no school could get away with one principal for every three teachers, the management-to-staff ratio TEA uses.

Asked by WFAA-TV host Jason Whitely what she wants lawmakers to change when they return in January, Rodríguez Ramos focused on TEA’s management structure and what she described as a failure of leadership and oversight. She did not identify a specific bill, budget restriction or contracting reform she intends to pursue.

The State Auditor’s Office (SAO) rates findings according to their potential effect on an agency. Auditors gave the agency-administration findings covering management, contracting and travel a medium rating, meaning corrective action was needed. Inconsistent monitoring of state-funded grants and inadequate oversight of private prekindergarten partnerships received high-risk ratings, meaning auditors considered prompt action essential.

No finding received the State Auditor’s Office’s most serious “priority” rating, which is reserved for concerns requiring immediate action.

Contract awards upheld, but transparency gaps remain

For companies that do business with Texas government, the audit’s most relevant findings concern the records used to demonstrate that contracts were awarded fairly and disclosed to the public.

Auditors examined 28 of TEA’s 226 active contracts. The sampled contracts had a combined value of approximately $698.4 million and included competitively procured, interlocal and state-term contracts.

TEA used appropriate procurement methods for all 28 contracts tested, according to the audit. The agency had the required purchasing authority, advertised solicitations as required, and completed applicable needs assessments. Auditors also found that final evaluation scores supported the vendors selected for awards.

The weaknesses appeared in the vendor-selection and disclosure processes. Eleven of the 60 evaluators tested, or 18 percent, had not completed required nepotism disclosure forms. Those evaluators participated in three of the five sampled procurements for which the forms were required.

The missing forms are not evidence that nepotism occurred. They mean TEA could not demonstrate that every evaluator had completed the safeguard intended to identify certain family or financial relationships before an award was made. Auditors warned that incomplete forms could allow a conflict to go undetected.

TEA also failed to post six active contracts valued above $100,000 and four statements of work or purchase orders for services exceeding $50,000. Auditors reviewed 173 contracts and related documents that were required to appear on the agency’s website.

The payment testing was favorable to TEA and its vendors. Auditors examined 82 invoices totaling approximately $28.4 million and found that the expenditures were supported, properly approved and paid on time. They found no overpayments or duplicate billing in the sample.

Rodríguez Ramos rejected TEA’s characterization of the report as an “extremely clean audit,” pointing to the missing disclosures and unpublished contracts. Whitely reported that TEA also emphasized that auditors found no taxpayer dollars had been misspent.

Both descriptions require context. The audit did not find that TEA improperly selected the sampled vendors or paid them for unsupported work. It did find weaknesses in requirements intended to make the contracting process transparent to the public and protect it from conflicts of interest.

TEA agreed with the contracting recommendations. Its corrective plan calls for documented verification of nepotism disclosures before contracts are awarded, monthly checks of required website postings, and periodic quality-assurance reviews of procurement files. The agency set a target of December for those changes.

The audit provides a snapshot of TEA’s current contract portfolio but does not show whether the agency’s use of contracts has increased or decreased over time. Although auditors reviewed vendor payments from fiscal years 2021 through 2025, the report does not publish comparable annual contract counts or spending totals.

Management ranks grew faster than the rest of TEA

Texas law generally requires large state agencies to maintain at least 11 staff members for every manager unless the Legislative Budget Board approves an exception. As of Aug. 31, 2025, TEA had one manager for every 3.5 full-time-equivalent (FTE) employees. The average among large state entities was one manager for every 9.7 employees.

After auditors raised the issue, TEA filed an appeal with the Legislative Budget Board on Dec. 8, seeking approval for its lower staff-per-manager ratio. TEA said many managers also perform substantial individual-contributor duties and argued that its structure supports effective management and program outcomes. The audit does not state whether the LBB has ruled on the appeal.

TEA’s staffing has not followed a straight line. The agency lost nearly 400 full-time-equivalent employees after budget reductions in 2011, a decline of almost 36 percent between February 2011 and February 2012. Over the past decade, its workforce has ranged from roughly 800 to 1,244 FTEs, declining slightly through 2018 before beginning a sustained expansion.

Agencies with broad statewide workforces, such as the Health and Human Services Commission, the Department of Criminal Justice, and the Department of Transportation, still employ far more people. But management at TEA has grown much faster than its rank-and-file workforce.

From 2021 through 2025, management positions increased 38 percent, compared with 12 percent growth among nonmanagement employees. Management salary and wage costs rose nearly 64 percent, from approximately $27.3 million to $44.7 million. Nonmanagement salary and wage costs increased 31 percent, from $60.2 million to $78.9 million.

The audit noted that statewide salary increases contributed to the higher costs. Lawmakers authorized 5 percent raises for classified state employees in both fiscal 2023 and fiscal 2024, but auditors also attributed the increased expense to TEA adding managers more quickly than other employees.

TEA agreed to establish procedures for reviewing its management-to-staff ratio and to present an analysis to Commissioner Mike Morath and his deputy commissioners for possible staffing changes.

Higher risks in grant and prekindergarten oversight

Auditors assigned high-risk ratings to TEA’s administration of state-funded grants and its oversight of partnerships with private prekindergarten providers.

TEA disbursed $1.9 billion through 5,401 state-funded grants awarded between September 2023 and August 2025. Although auditors found that grant applications were properly processed and the money was distributed within required timelines, monitoring varied among programs because TEA had not established minimum standards.

Auditors examined 59 applicable grants totaling $571 million and found inconsistent oversight of 10, or 17 percent. Five lacked records or other information supporting performance measures in the grant guidelines. Two grants went unmonitored because staff considered them pass-through awards, although TEA monitored other pass-through grants. Three lacked evidence of monitoring activities that staff said had occurred.

Auditors also found that 11 grant approval notices carried the digital signature of an employee who had left TEA. The agency said its legacy grant system required staff to change those signatures manually and that it is developing a replacement system with stronger controls.

In its private prekindergarten partnerships, TEA provided guidance to public and charter schools but lacked a process to verify that private providers continued to meet applicable requirements. Those requirements included state childcare licensing standards, required designations and accreditations and statutory class-size limits.

Auditors warned that without continued verification, children could be served in lower-quality programs or facilities that did not meet state licensing requirements.

TEA agreed to establish minimum grant-monitoring standards, develop a designation for high-risk grantees and strengthen compliance reviews of private prekindergarten partnerships.

The report assigned a low-risk rating to TEA’s oversight of open-enrollment charter schools and made no recommendation in that area. Auditors found that the agency properly administered eight new charter applications, 45 renewals, 30 expansion applications and 14 closures included in the review.

A ‘forensic’ audit conducted as a performance audit

The review originated in a budget amendment Rodríguez Ramos offered during debate on Senate Bill 1 in April 2025. Her amendment directed the State Auditor’s Office to conduct what the legislation called a “comprehensive forensic audit” of TEA’s operations, including its contracts, grants, staffing, administrative costs and charter-school oversight.

The House adopted Amendment No. 50 on April 10, 2025, by a vote of 100-37. The requirement became Rider 88 in TEA’s portion of the 2026–27 state budget.

Rodríguez Ramos did not serve on the House Appropriations Committee last session. Her committee assignments were Criminal Jurisprudence and Delivery of Government Efficiency, and she offered the audit amendment during the House floor debate.

During that debate, Rodríguez Ramos argued that TEA and its commissioner made decisions affecting millions of children and billions of dollars without sufficient public accountability. She raised questions about agency staffing, charter-school finances, the state’s intervention in Houston ISD and Morath’s continued service under the holdover provision after the expiration of his appointed term.

The State Auditor’s Office describes the resulting review as a performance audit conducted under generally accepted government auditing standards. The report does not describe its methodology as a forensic audit, and Rider 88 did not define the term.

Like most State Auditor’s Office audits, the review used samples to test contracts, invoices and other transactions rather than examining every record. Auditors randomly selected 28 contracts from a population of 226 active contracts and also chose samples of grants, charter-expansion applications, travel costs, and purchasing-card expenditures.

The report cautions that results from targeted samples should not be projected across an entire population. Results from its random samples may be projected, but the accuracy of such a projection cannot be measured.

Auditors tested entire populations in some areas. They reviewed 1,083 state grant awards, eight new charter applications, 45 charter renewals and 14 charter closures.

Government auditing standards recognize performance audits but do not establish forensic auditing as a separate category. In general professional usage, a forensic examination is aimed more specifically at identifying fraud, misconduct or evidence that could be used in legal or disciplinary proceedings. A performance audit more broadly assesses whether an agency is operating effectively, following requirements and maintaining adequate controls.

That leaves room for disagreement over whether the SAO review fulfilled the Legislature’s expectation of a “comprehensive forensic audit.” It covered the subjects identified in Rider 88 and found weaknesses, but it did not examine every TEA contract or pursue every allegation Rodríguez Ramos has raised.

Questions beyond the audit

Since the report’s release, Rodríguez Ramos has pointed online to questions she believes remain unanswered, including charter-school performance and contracts connected to the state-developed Bluebonnet Learning curriculum. Those matters were not findings in the audit and would require separate examination.

Her original proposal, House Bill 5571, would have required a broader forensic and performance audit of TEA’s charter-school oversight every three years. It called for examination of executive compensation, real estate transactions, debt, management companies, marketing expenses, conflicts of interest and potential self-dealing.

The House Public Education Committee heard the bill in April 2025 but left it pending. Rodríguez Ramos subsequently secured the narrower audit requirement through her budget amendment.

The audit will follow TEA into the next budget cycle. The agency is scheduled for a LBB budget hearing on Sept. 29 from 10 a.m. to noon in Capitol Extension Room E2.028.

The findings could give Rodríguez Ramos and other Democratic lawmakers specific lines of inquiry when legislative budget hearings begin next year, particularly as school districts cut spending to close budget shortfalls. The remaining question is the one Whitely posed to Rodríguez Ramos: What, specifically, lawmakers intend to change when they return to Austin in January.

Story by Kimberly Reeves; photo by kaboompics.com from Pexels