September 14, 2022 — Regular Meeting
Conroe ISD Board Meeting — 2022-09-14
Regular Meeting — Unofficial Notes
Based on auto-generated transcript. Not an official record.
Generated 2026-03-28 14:44 UTC
Unofficial Meeting Notes
Conroe Independent School District – Audit and Investment Committee Meeting
September 14, 2022 | Regular Meeting
These are unofficial notes based on an auto-generated transcript and may contain errors or omissions.
Call to Order
Chairman Sanders called the meeting to order, noting a quorum was present. No members of the public registered for public comment.
Item 2: Approval of Minutes
Minutes from the May 11, 2022 Audit Committee meeting and the September 7, 2021 Investment Committee meeting were presented for approval.
Vote: Motion to approve carried unanimously by show of hands.
Item 3: Internal Audit Plan Updates (2021-2022 and 2022-2023)
Internal Auditor Brian Hayden presented the report, noting his three-year anniversary with the district. He thanked the audit committee, Dr. Knoll, and district staff for their support and collaboration.
Band and Orchestra Instrument Inventory
- High school instrument counts were conducted in May. Controls have improved significantly since the initial count in September 2020, when approximately 400 instruments were unaccounted for. The current number of missing instruments stands at 22.
- Committee members asked whether the 22 missing instruments came from one campus or multiple. Dr. Horton (Fine Arts) confirmed it was a mixture of campuses and attributed some of the issues to staff turnover and inherited accountability gaps.
- Dr. Horton noted the missing instruments are believed to be primarily an accountability/paperwork issue (between directors, students, and parents) rather than theft. The number also includes instruments that may have been destroyed, broken, or stolen from students.
- Key improvements cited by Dr. Horton:
- For the first time in three years, all high school band and orchestra programs are operating in the correct school year with instruments in inventory.
- Four new high school band directors came on board; two new directors at The Woodlands High School cleaned up unfinished inventory business from the previous directors in one day.
- The district held off on critical needs purchases for programs with unresolved inventory issues (in some cases for up to two months), creating a natural accountability incentive.
- Directors are now proactively asking about inventory requirements rather than waiting to be asked.
- Junior high and intermediate school instrument inventories are scheduled for November — a first at these levels. Dr. Horton has been meeting with intermediate and junior high directors to explain the process and expectations.
- Discussion also touched on the need for clearer guidance on when to remove instruments from inventory (e.g., when repair costs exceed replacement value).
Activity Funds Audit (2021-2022)
- Completed; reported as going smoothly with no notable issues.
Facility Rentals Audit
- Separated from the larger maintenance audit for manageability.
- Finding: The facility is well-run, but rental rates have not been raised since 2017. The recommendation is to reassemble a team to evaluate current costs (energy, salaries for police/custodial/AV staff, administrator on duty) and determine whether current rates cover actual costs.
- It was clarified that facility rentals are not a revenue-generating enterprise — the goal is to ensure taxpayers are not subsidizing rentals.
- Outdoor unfenced facilities are open to general public use; reserved/scheduled use requires a rental agreement.
Teacher Training Center Construction Audit
- No findings or observations. Mr. Hayden praised Mr. Foster (Easy) and his department for outstanding controls. Weaver (external audit firm) also assisted on this audit.
2022-2023 Internal Audit Plan
Ongoing:
- Maintenance Audit — Field work began the prior week. Covers approximately 40,000 work orders over a seven-month audit period. Weaver is assisting. Areas of focus include preventive maintenance (ensuring required maintenance is happening on time, not evaluating the maintenance schedules themselves), contractor costs, and related controls.
Upcoming Audits:
| Timeframe | Audit |
|---|---|
| November | Intermediate & Junior High Band/Orchestra Instruments |
| TBD | Child Nutrition (cash controls, inventory controls, regulatory compliance) |
| TBD | IT Audit – CISD Cybersecurity Plan (new audit + major follow-up on prior year findings; described as consuming most of the Weaver budget) |
| TBD | Caney Creek High School Remodel (construction audit) |
| Summer | Follow-up audits: Police, annual PEEMs, band instruments status |
Notable Discussion — Bond Fund Audit:
- A committee member asked whether remaining bond funds should be audited to ensure proper use. Mr. Hayden noted this was not part of the current plan. District staff explained that individual construction projects are audited during construction, and monthly bond meeting schedules track original vs. actual spending by campus. It was suggested this could be a potential audit for next year — even if just a retrospective summary of how bond funds were allocated vs. spent. Staff noted early bond projects came in under budget, and those savings were applied to later projects that came in over budget.
Investment Committee Discussion
Current Investment Strategy (Presented by Ms. Garza)
Strategy Overview:
- Current operating funds are invested in three state investment pools, Woodforest National Bank, commercial paper, and short-term government securities (maturity ≤ 1 year).
- $50 million of the general fund unassigned balance is managed by TCG Investment Advisors in a 36-month investment ladder.
General Fund Portfolio (as of 8/31/22): ~$201 million
| Category | Amount |
|---|---|
| Treasury Securities | $47.1M |
| Agencies | $4.2M |
| Money Market (Woodforest) | $23.8M |
| Municipal Bonds | $17.1M |
| State Pools (largest category) | $108M |
| Total General Fund | ~$201M |
Key Developments:
- TCG has shifted reinvestment strategy toward treasury securities and agencies due to bond market volatility and economic instability.
- The district began using the IntraFi Network (formerly CDARS) through Woodforest, which distributes deposits across a network of banks in increments below the $250,000 FDIC insurance limit. This removes deposits from Woodforest's balance sheet, giving the district flexibility to deposit unlimited amounts at the negotiated rate (90-day T-bill + 25 basis points). The program manages over $21 billion nationally.
- This will be especially beneficial as tax collections increase toward year-end.
Interest Revenue:
- FY 2021-2022 general fund interest revenue: ~$1.5 million
- FY 2022-2023 interest revenue budget was increased by $2.5 million in anticipation of continued rate increases.
Combined Portfolio (All Funds) as of 8/31/22: $622.8 million
- Weighted Average Maturity (WAM): 47 days
- Portfolio Yield: 2.05%
- Benchmark (90-day T-bill): 2.80%
Benchmark Discussion:
- Committee members noted the portfolio yield trails the benchmark, which is expected during a rising rate environment as pools and instruments reprice upward with a 60-90 day lag.
- With the Fed projecting two more rate hikes totaling ~1.5% (targeting 3.75-4.00% fed funds rate by year-end), the district expects yields to continue rising through the end of 2022 and into early 2023.
- A member asked whether TCG could be given more investment flexibility. Staff clarified the $50 million allocation was based on the amount the district doesn't expect to need to access, and investment options are constrained by the Public Funds Investment Act (PFIA).
Item: Approval of Local Investment Policy
Ms. Garza requested the committee's approval of the local investment policy for recommendation to the full board at the next regular board meeting. No changes were recommended to the policy, designated investment officers, list of qualified brokers, or approved training sources. All items will be on consent for the full board meeting.
Vote: Motion to approve carried unanimously by show of hands.
Item: Proposed Audit and Investment Committee Meeting Dates for 2022-2023
The committee discussed quarterly meeting dates (Wednesday mornings):
| Date | Status |
|---|---|
| Wednesday, November 2, 2022 at 7:30 AM | Confirmed (moved from originally proposed Nov. 9) |
| Wednesday, January 11, 2023 | Tentative |
| Wednesday, March 8, 2023 | Tentative |
| Wednesday, May 10, 2023 | Tentative |
Note: Dr. Knoll pointed out that the November 2 meeting would be the last with the current committee composition, as potential membership changes could occur after that. January and subsequent dates were left tentative pending further discussion with any new committee members.
Adjournment
With no further business, the meeting was adjourned.