YISD tells ABC-7 it wasn’t required to post audit that warned of budget crisis

EL PASO, Texas (KVIA) — ABC-7 uncovered an internal YISD audit that found the district could become insolvent within two years. In an interview Wednesday, YISD Superintendent Xavier De La Torre answered questions about the audit. 

The audit was never shared with the public.

In a May 20 board meeting, YISD Internal Auditor Amy Sanchez gave a quarterly budget presentation to trustees. Sanchez’s presentation did not include reference to a May 7 internal audit she completed. That audit stated there is a priority risk for YISD’s budget, with a significant risk of YISD becoming insolvent within two years.

That presentation did not include the May 7 internal audit in its backup attachments. ABC-7 reached out to Sanchez to ask why and has not heard back. 

In the interview with De La Torre, ABC-7 asked him about the audit not being included in the May 20 meeting agenda. 

ABC-7 : “Typically past practice, when an audit is done, an auditor will share the findings with the public and he or she will go over the responses. And that obviously didn't happen on May 20th. So just wondering if there was a reason for that. What was the reason?”

De La Torre: “I’m not sure I agree with you. It obviously did happen, given that it's part of the board packet and that audit is contained in that board packet, and that board packet is available to anybody who wants to download it or have a send it to them.”

De La Torre went on to say, “You couldn't find it. But by law, it has to be there.”

After the interview, De La Torre went to the YISD website to check for the backup attachments and could not find them. 

YISD has a board meeting Wednesday night to present a budget plan. ABC-7 asked De La Torre what the public should know. 

ABC-7: “The board is having an important budgeting budget meeting tonight. Can you explain a little bit about what you want taxpayers to know?”

De La Torre: “I'm not sure that there's really anything that is unique about tonight's board meeting. I think we're presenting a deficit budget of $14,900,000. We've worked hard all year to get down to that. We'll continue to work during the 26-27 school year to eliminate that deficit, so that we can end the year with a balanced budget. And we've got some ideas relative to how we do that. But it is a budget that dedicates 87% of the resources we receive to people, to the employees, both certificated employees and hourly employees. It doesn't have any unusual or unexpected unanticipated investments or expenses. It's pretty straightforward.”

ABC-7:  “On what date did you first find out about the May 7 findings from that audit?”

De La Torre: “We've known that running deficit budgets isn't a best practice for 3 or 4 years. So that report, while it may seem interesting, it is a postmortem autopsy we've known since 2022, 23 that we were running a deficit budget. And so those findings, that explanation isn't very timely. The internal auditor sat in all of the meetings when these discussions were happening 3 or 4 years ago. And yet this is the first year that she's decided to file a report.”

ABC-7 asked the Superintendent to clarify his previous statement calling the internal audit a ‘postmortem autopsy,’ continuing to say the audit wasn’t timely. 

ABC-7: “Are you saying that you’ve known for several years that the school was at a risk of insolvency?”

De La Torre: “We knew for several years that running a deficit budget. That required us to go into the unassigned fund balance, the reserve which is a lot like a piggy bank, cannot be sustained. It's not sustainable.”

ABC-7 has been trying reach the internal auditor who created the May 7 audit, Amy Sanchez. We have not heard back. 

ABC-7 did receive a statement from YISD Communications Director Tracy Garcia-Ramirez Wednesday afternoon regarding the internal audit.

"Ysleta ISD strives to be open with the public by providing clear, straightforward information about our financial documents and how they can be accessed. We also take seriously our responsibility to follow the law and safeguard confidential information, while still making sure the public can review the records they have a right to see.

It is important to clarify that the General Fund Financial Observations document in question is an internal report, not a formal audit. It was generated by the Internal Audit Department (IAD) and, as such, it is called an Internal Audit Report — a report generated by the department, but it is NOT an official audit. IAD reports are not required by law to be posted online or included in board meeting materials; as such, it has not been our practice to do so. The financial audit that must be posted under the Tax Code is the annual audit prepared by our external auditor, which is available on our District Transparency webpage. Final reports by the IAD are provided when requested through the Open Records Request (ORR) process, but even then, these reports are subject to review and redaction to protect sensitive or confidential information.

The General Fund Financial Observations report in question was a formal communication from IAD to the Board of Trustees, notifying them of a significant risk that was identified. During the course of the Risk Management Audit, IAD identified a potential deficit in the health plan fund.  That deficit — in combination with the then-recently announced $11-million loss due to reduced hold harmless funding as well as multiple fiscal years of general fund deficits — caused IAD to review fund balance and financial indicators. IAD identified a significant risk and had a responsibility to communicate it to the school board.

Ysleta ISD values the trust our community places in us, and we remain committed to handling public information in a way that is transparent, responsible, and easy for families and taxpayers to understand."