Severe lack of oversight, unheeded warnings of potential financial woes and incompetence were to blame for the $52.8 million El Paso Independent School District budget shortfall, an audit found.
The report presented to the EPISD Board of Trustees by Chief Internal Auditor Mayra G. Martinez presented a scathing picture on Tuesday, June 23. According to findings from Fiscal Year 2022-26, millions in additional expenditures were allowed without budget amendments; warnings from EPISD staff about budgets in the red went unheard; and spending continued amid declining enrollment and impending school closures.
The budget developed between April and June 2025 for FY2026 was approved amid the district’s parting ways with former superintendent Diana Sayavedra in June 2025.
“The budget is like guardrails for what the district can spend,” Martinez said. “As an employee, you’re always asked to follow the chain of command. In this instance (budgetary) concerns were being reported to their superiors. There needs to be awareness of if you see something, say something.”
The audit underscored that 2022 was the last time the district had revenue exceeding $523 million and expenditures of $514 million. By 2026, EPISD had only $528 million in revenue, compared with $581 million in expenditures.
Adding to the financial issues, the same 2022-26 time frame saw enrollment fall from 50,769 to 46,244 in 2026. The general balance fund also took an exponential dive from $166.7 million in 2022 to $69.6 million in 2026.
“This report is vital to understanding how we’re going to proceed in our governance role and to make sure this never happens again,” EPISD Board of Trustees Vice President Jack Loveridge said. “This has impacted hundreds of lives and careers. We want to make that commitment to the public (that) we take this very seriously.”
Among the main issues outlined by the audit leading to the continuous dipping into the general balance fund to cover shortfalls were:
By 2025, the district was dealing with $6.31 million in lapsed salaries, $1.58 million in added special education costs, $1.41 million in costs for multi-age classrooms and $1.01 million in teacher certification reviews. In total, that meant an added impact of $10.3 million for EPISD.
Martinez noted during the audit, she did not contact previous board members or the previous superintendent.
Worse still were the expenditures the audit found outside the approved budget that were not accounted for, totaling $11.1 million. That included $3 million in additional budget requests, $2.98 million in Health Savings Account contributions, $2.35 million in special education staffing, $1.03 million in teacher retention allotment, $627,000 in late application fees, $672,000 in early retirement incentives, and $495,000 in leadership transition costs.
“Our job as a board is to provide oversight of the administration and to be the voice of the taxpayers,” District 4 trustee Mindy Sutton said. “We trust the expertise of the superintendent and financial staff. This report shows there was severe incompetence before by more than one person. We’re grateful to now have an experienced superintendent.”
EPISD transparency and oversight measures
While the report illustrated how years of lack of oversight impacted the district, EPISD Board of Trustees President Leah Hanany discussed details on the implementation of a financial stability action plan.
“This is a draft that has been created using the findings from the audit,” Hanany said. “This is a governance control tool, and we should use the time between now and August to review it and offer any recommended changes to have a final draft for a board meeting that month.”
Hanany noted that monthly budget reports would become mandatory, that a public financial dashboard would be approved and updated regularly, and that a financial impact statement would be required for any applicable financial requests.
Such changes for the board would take effect by August.
“All agenda items requiring authorization, creation or modification of a financial obligation should include a financial impact statement that identifies the funding source, short and long term financial impact and if a budget amendment is required under the Texas Education Code,” Hanany said.
Kristian Jaime is the Top Story Reporter for the El Paso Times and is reachable at Kjaime@elpasotimes.com.
This article originally appeared on El Paso Times: Lack of oversight blamed for EPISD $52.8 million budget, audit finds
Reporting by Kristian Jaime, El Paso Times / El Paso Times
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By Kristian Jaime, El Paso Times | USA TODAY Network
