TEA Adopts New IHE Charter FIRST Rating Worksheet

What Institution of Higher Education (IHE)
Charter Schools Need to Know

What's New?

As part of the July 2026 adoption of revisions to 19 TAC §109.1001, the Texas Education Agency (TEA) has adopted a new Charter FIRST Rating Worksheet specifically for Institution of Higher Education (IHE) Charter Schools. 19 TAC 109.1001(g)(2)

While much of the attention has focused on the changes impacting traditional open-enrollment charter schools, TEA also modernized the financial accountability system for IHE-operated charter schools by adopting an updated rating worksheet that aligns with current accounting standards and audit practices.

Who Does This Apply To?

This worksheet applies only to charter schools operated by a public Institution of Higher Education (IHE) under Texas Education Code §12.152.

Examples include charter schools operated by:

• Public Universities

• State Colleges

• Public Community Colleges

This worksheet does NOT apply to traditional open-enrollment charter schools authorized by the State Board of Education.

Key Changes

Updated Financial Accountability Worksheet

• TEA replaced the prior IHE Charter FIRST worksheet with an updated version that:

• Modernizes financial reporting terminology

• Aligns accountability measures with current accounting standards

• Updates audit and reporting references

• Continues to focus on financial stewardship and compliance appropriate for IHE-operated charter schools

Temporary AFR Submission Deadline Change

For the 2025–2026 Rating Year, TEA revised the Annual Financial Report (AFR) submission timeline to accommodate the delayed release of the federal Compliance Supplement.

This is a one-year transition adjustment that aligns with the changes made for school districts and traditional charter schools.

Continued Focus on Financial Compliance

The revised worksheet continues to emphasize:

• Timely submission of Annual Financial Reports

• Clean audit opinions

• Timely payments to governmental agencies

• Compliance with debt agreements (when applicable)

• Internal controls over financial reporting

• Compliance with state and federal laws

• Financial transparency requirements

Because IHE charter schools operate under the financial oversight of a public institution of higher education, the worksheet is designed to evaluate financial governance and compliance rather than organizational solvency.

What Should IHE Charter Schools Do Now?

• Review the newly adopted IHE Charter FIRST worksheet.

• Continue maintaining strong financial reporting and audit practices.

• Ensure Annual Financial Reports are submitted timely.

• Review internal controls and compliance procedures prior to audit season.

• Continue monitoring TEA guidance for future updates to the accountability system.

The Bottom Line

While the July 2026 rule changes introduce significant new accountability measures for traditional open-enrollment charter schools, IHE Charter FIRST remains focused on financial stewardship, audit quality, and regulatory compliance. The newly adopted worksheet modernizes the accountability framework while recognizing the unique financial structure and governance of charter schools operated by Texas public institutions of higher education.

Need assistance?

The inSchools Finance Team is actively reviewing the updated Charter FIRST guidance and can assist your school with:

• Charter FIRST readiness reviews

• Financial accountability assessments

• Audit preparation

• Annual Financial Report compliance

• Strategic financial planning

Questions? Contact the inSchools Finance Team for assistance with interpreting the new TEA requirements or email dclavell@theinschools.com