Auditing The Auditors

Gov. Greg Abbott has made administrative spending in Texas school districts a central focus of his latest education proposals, arguing that districts should direct more taxpayer dollars toward classroom instruction.

Standing in Northeast El Paso on August 19, the governor announced he was sending the state's new comptroller after up to four Texas school districts to hunt for "administrative bloat." He also wants a law that would require districts to spend at least 70 percent of every dollar "in the classroom, not on administrative expense, staff or bureaucracy." He singled out two districts by name: Austin ISD and El Paso ISD. Austin's enrollment fell 14 percent between 2015 and 2025, he said, while administrative spending per student climbed 75 percent. El Paso's enrollment dropped roughly 20 percent over the same stretch, while its administrative spending per student doubled.

"Simply put, too many tax dollars for schools are funding things that do not improve student outcomes," Abbott said. 

Two days before Abbott made his remarks, the State Auditor's Office released a forensic audit of the Texas Education Agency the state agency Abbott's own appointee runs, the one that oversees every district he's now considering for investigation. And what that audit found was not a rounding error. It was a full-blown bureaucratic sprawl, sitting inside the very institution positioning itself as the classroom-spending watchdog.

What the audit actually found

As of August 31, 2025, TEA (The Texas Education Agency) employed one manager for every 3.5 full-time staffers. State law caps that ratio at one manager for every 11 employees for agencies of TEA's size, meaning TEA was running roughly three times as management-heavy as the law allows. For context, auditors noted the statewide average for large state agencies sat closer to one manager per 9.7 employees.

That imbalance came with a price tag. Between fiscal years 2021 and 2025, TEA's management headcount grew 38 percent, while its non-management staff grew just 12 percent. Salary and wage spending for managers rose nearly 64 percent over that period, landing at roughly $44.7 million in fiscal year 2025. Meanwhile, non-management salary costs the people doing the actual work of processing grants, monitoring charter schools, and supporting the state's 1,000-plus districts grew at a fraction of that rate.

State Rep. Ana-Maria Rodriguez Ramos, the Dallas-area lawmaker who authored the legislation mandating the audit, had guessed a year earlier that TEA's staffing bloat might be as bad as 50 percent. "It turns out, it was much, much worse than we imagined," she said in a statement after the report dropped, adding that a ratio like TEA's would be the equivalent of a school system employing one principal for every three teachers.

The audit didn't stop at staffing. It found TEA had failed to consistently post required contracts, including one $67 million agreement with a Florida-based vendor that went unposted for an entire year. Roughly a fifth of the contract evaluators auditors reviewed hadn't filed the nepotism disclosures Texas law requires before a major contract can be awarded. And the agency's oversight of state-funded grants was flagged as high-risk, a designation the auditor's office does not hand out casually.

After auditors determined that TEA exceeded the statutory management ratio, the agency sought a waiver from the Legislative Budget Board rather than bringing its staffing structure into compliance. It appealed. In a waiver request filed with the Legislative Budget Board in December, TEA argued it needed a lower management-to-staff ratio than the law allows because so many of its managers also carry "individual contributor duties" in other words, that its managers are doing regular work in addition to managing, so the ratio looks worse than it supposedly is. A TEA spokesperson later told reporters that auditors had simply "identified opportunities for the agency to improve," and pointed out that TEA has a smaller staff-to-enrolled-student ratio than any other state's education department. Commissioner Mike Morath, who has run the agency since Abbott appointed him in January 2016, has not offered a public accounting of how a management structure three times over the legal limit happened on his watch, or why it took a legislatively mandated forensic audit to surface it.

The case against Austin and El Paso

The audit findings are separate from the concerns Abbott has raised about the two districts he named: Austin ISD and El Paso ISD. In Austin ISD, the governor's office says enrollment fell 14 percent from 2015 to 2025 while administrative spending per student rose 75 percent alongside a 74 percent increase in campus leadership costs and a 47 percent increase in instructional costs over the same period.

In El Paso ISD, Abbott's numbers show an enrollment decline of roughly 20 percent alongside a 104 percent jump in administrative costs and a 31 percent rise in campus leadership spending. He also referenced recent internal audits in both districts that he said uncovered tens of millions of dollars in "financial inefficiencies" tied to underestimated expenses and shaky budget assumptions. El Paso ISD, in particular, declared financial exigency in June after an internal audit exposed years of budgeting problems, forcing the district to lay off dozens of employees. 

Abbott held up two other districts, Red Oak ISD and Dickinson ISD, as a model to follow. Red Oak's enrollment grew about 20 percent while its administrative costs rose only 7 percent, he said. Dickinson's administrative spending grew roughly in step with its own 20 percent enrollment increase. Abbott's comparison places particular emphasis on whether administrative spending has kept pace with changes in enrollment. 

El Paso ISD's own leadership has acknowledged budgeting failures serious enough to trigger layoffs and a declared financial exigency.

The term “administrative bloat” also encompasses a range of expenses that may have very different causes. A district's administrative spending can include senior leadership positions, but it can also include staff responsible for complying with state and federal requirements involving special education, school safety, Title IX and accountability. Those obligations can create administrative costs even when enrollment is declining. The question, then, is whether a rise in administrative spending reflects unnecessary staffing or the costs of meeting requirements imposed on districts. Abbott's proposal, as outlined in El Paso, does not appear to distinguish between those categories.

TEA itself grades districts on exactly this kind of spending, using a tool that assigns letter scores for how well districts direct resources toward instruction. In the most recent scoring, 98 percent of the state's roughly 1,018 districts earned a C or higher, and more than a third scored perfectly. Austin ISD got a B. El Paso ISD got an A. The same agency now under fire for triple the legal ratio of managers to staff has, by its own metric, rated El Paso's spending discipline higher than its own.

Abbott handed this assignment auditing school districts to Don Huffines, the newly appointed comptroller he installed just weeks before the El Paso announcement. Huffines' office has said it will name the targeted districts "in the coming weeks," and confirmed that districts already under state-appointed boards Houston ISD and Fort Worth ISD won't make the list. Those two districts have been under direct state control for years, meaning any administrative decisions made there in that time were made under the state's own supervision, not local school boards'. Carving them out of a review about administrative accountability means the districts most directly shaped by state intervention are the ones exempted from having that intervention examined.

Whose bureaucracy gets the microscope

None of this means Austin or El Paso should get a pass. But it does mean the comparison Abbott is inviting trust the state to tell districts how to spend, while the state's own oversight arm quietly built a management structure three times over its legal limit deserves to be said out loud, not buried under a press conference about local waste.

The proposal comes during Abbott's reelection campaign and alongside several other priorities he has outlined for 2026, including limits on student screen time in schools, “student success academies” and a proposal to eliminate school property taxes on homesteads, with the state making up the lost revenue. 

Former State Rep. Glenn Rogers was among those who publicly raised eyebrows at the findings this past week, joining a chorus that cuts across party lines questioning why an agency that regulates instructional spending down to the letter grade apparently exempted itself from the same discipline. Texas AFT, the state's teachers' union, also called on Morath to "take heed" of the audit's criticisms ahead of a Legislative Budget Board hearing scheduled for September 29 a hearing where TEA is expected to make its case for more positions, even as auditors were still writing up findings on the positions it already has too many of.

Who gets to decide what counts as waste

The findings raise a broader question about how Texas evaluates administrative spending across its public education system: what standards should apply when assessing whether administrative growth is justified, and who should be responsible for reviewing it? 

Right now, in Texas, the answer depends entirely on who you are. School districts face state ratings, comptroller audits, and now a governor threatening legislation with a hard 70 percent floor. The state agency that oversees those districts operated for years above its own legal cap, got caught by a mandate it didn't ask for, and responded by filing a waiver instead of a correction. One of those institutions is being told to prove every dollar. The other is asking permission to keep doing what it's already doing.

If Abbott's 70 percent classroom-spending rule becomes law, it will apply to school boards in Austin, El Paso, and every other district in Texas. The agency writing the rules for everyone else does not have to clear the same bar.