The State Auditor’s Office (SAO) conducted a comprehensive audit of the Texas Education Agency’s (TEA) processes for agency administration, including management structure, contracting, and expenditure processes. In addition, the Office audited the Agency’s oversight of its programs, such as State-funded grants and open-enrollment charter schools. The SAO found that the TEA could could strengthen the administration of pre-kindergarten public-private partnerships, digital signature oversight, certain contract management activities, and the oversight of State-funded grants.
Agency Administration
Management-to-staff Ratios
- Fiscal years 2021 through 2025, the Agency’s hiring practices created a management heavy structure. As of August 31st, 2025, the Agency had 1 manager for every 3.5 full-time (FTE) employees. This exceeded statutory limit of 1 manager for every 11 FTEs.
- In fiscal year 2025, the Agency spent $44.7 million on salary and wage costs for management, an increase of nearly 64 percent compared to fiscal year 2021. In contrast, non-management salary and wage costs increased by 31 percent, from $60.2 million to 78.9 million, over that same time period.
Contracting
- Planning and Procurement – The agency complied with contract planning requirements
- Vendor Selection – The agency mostly complied with vendor selection requirements such as accurately calculating evaluation committee scores
- However, the Agency did not always comply with Texas Government Code, Section 2262.004, which requires agency employees working on the contract to complete a nepotism disclosure in writing for certain financial and family relationships they have with vendor personnel before a state agency may award a major contract to the vendor.
- Formation – The Agency’s contract formation and amendment processes were compliant with applicable requirements
- Management and Oversight – The Agency had effective contract management and oversight processes in place to ensure compliance with contract terms and requirements for all nine applicable contracts tested.
Expenditures
- The Agency had processes and safeguards in place to ensure that its expenses for purchases, travel, and compensation were supported, approved, and padi in accordance with applicable criteria.
- The Agency’s travel expenditure process did not fully align with its policy.
SAO Recommendations
- Develop and implement a process to lower its management-to-staff ratio or obtain approval from the Legislature Budget Board to maintain a ratio outside of statutory requirements.
- Enforce its policy requiring all applicable employees involved in contract procurements to complete all disclosures.
- Enforce compliance with its established process for posting all contracting information on its website as required.
- Align its travel policies and practices.
- TEA responses can be found in document.
Program Administration
State Funded Grants
- The Agency had processes and related safeguards to administer its State-funded grants in accordance with applicable requirements.
- Applications for 1,083 awarded state grants tested were processed in accordance with policy and had the necessary approvals prior to the award.
- However, 11 of the grant approval notices sent to grantees included a digital signature of an employee who had left the Agency, because the grant system auto-populated the signature on the notice.
- To direct grant monitoring, the Agency issued program guidelines that provided specific information about the grants, including purpose, eligibility criteria, program description, and statutory and Agency requirements, as well as parameters or performance measures that the grantee should meet.
- However, the Agency had not established a minimum level of monitoring required for its State-funded grants. As a result, each program department within the Agency was responsible for oversight of the State-funded grants awarded under their program.
Pre-kindergarten Expansion Monitoring
- The agency provided guidance to public and open-enrollment charter schools that were expanding pre-kindergarten programs via public-private partnerships.
- However, the Agency did not have a process to verify that these schools ensured that the private pre-kindergarten providers fulfilled all applicable requirements.
Open-enrollment Charter Schools
- For new, renewal, and expansion applications, the Agency accurately administered open enrollment charter school applications for both new and renewed schools.
- For closures, the Agency closed 14 open enrollment charter schools due to mandatory terminations, non-renewals, mergers, or surrenders.
SAO Recommendations
- Retire digital signatures of an employee upon their separation.
- Strengthen its oversight of State-funded grants to monitor all State grants in accordance with program guidelines and to determine whether funds are used for intended purposes.
- Develop and implement a process to review public-private partnership agreements for public and open-enrollment charter schools and monitor for compliance with program requirements.
- TEA responses can be found in document.
