Risk Level Assessment for 2025-26

Risk Level Assessment for 2025-26

September 2, 2025 | Grants Management

Low is usually good when you step on the scale, but you know what else you want to be low? Your risk level with TEA! Federal regulations require TEA to annually evaluate each grant recipient’s risk of noncompliance with the federal statutes, rules, terms, and conditions of their award. To comply with this requirement, TEA conducts a risk assessment of each recipient, including charter schools, and assigns each entity a fiscal risk rating level of low, medium, or high. On September 3, 2025, the TEA Department of Grant Compliance and Administration released the 2025-26 risk assessment designations. How did you do? Read on to locate your report and learn about the point system TEA uses to determine risk ratings.

At CSS, we work closely with our partner schools to ensure the most favorable rating is awarded, and that is just the beginning!  We do this by providing you with a series of 1-on-1 meetings, webinars, and ongoing guidance and expert support as you navigate the world of federal grant management.

How Does My Charter’s Fiscal Risk Designation Affect Us?

The implications that come with each rating do not have to do with whether or not your charter is actually in compliance or not, but rather with the level of stringency your charter should expect in the application and negotiation processes for receiving federal grants and in determining the likeliness of your charter to be selected for closer fiscal monitoring.

An organization’s risk level will be used by TEA in the following ways:

  • Differentiated Grant Negotiation: TEA uses a differentiated grant negotiation process for federal grant applications. Organizations with a medium or high risk level are subject to a more stringent grant negotiation review than those with a low risk level.
  • Subrecipient Monitoring: Each year, TEA selects subrecipients for fiscal monitoring according to their risk levels. The higher your organization’s risk level, the more likely you are to be selected for monitoring; however, TEA monitors subrecipients from each risk level.
  • For High Risk designations: TEA will require more documentation such as general ledgers, payroll journals, and other documentation before approving draw down reimbursement payments.

How Are Fiscal Risk Rating Levels Determined?

The system was revamped in 2023-24 to allow for a more evenly distributed point system. For the school year 2024-25, there were 20 indicators to make sure no area counted more than 6%. The number of indicators has increased to 25 for the 2025-26 ratings. Here’s what is new:

  • Ind #21: An LEA had a large percent of federal expenditures compared to their total operating costs (if federal is more than 20% of total operating).
  • Ind #22: An LEA has not drawn down federal grant funds by Jan 31, 2025 for IDEA, Perkins, or Title I.
  • Ind #23: An LEA did not submit their Texas Education for Homeless Children and Youth (TEHCY) end of year grant report by the required due date for FY24.
  • Ind #24: An LEA TEHCY subrecipient had an OSP McKinney Vento Result Driven Accountability (RDA) Designation Level of 3 or 4 for FY24.
  • Ind #25: An LEA TECHY Subrecipient has identified zero homeless students in FY 24.

For a full overview of all Risk Level indicators, please review the TEA Risk Assessment Presentation.

Note: The data for superintendent and CFO turnover comes from contacts in AskTED. If no name is entered, it will incur the same negative points as having a turnover. CSS AskTED Tip

How Can I Access My Charter’s Risk Designation Report?

The reports are found in the Smartsheet Workapps system that is the same system used for ESSER reporting, Title IV reporting, and random validation submissions.

  1. Access the TEA Smartsheet WorkApp site.
  2. Select Risk Assessment WorkApp.
  3. Select LEA Name and CDN when the 2025-26 GCA Risk Assessment page displays.
  4. Click on the Attachments link and click on the LEA RA Report.pdf title.
  5. The report will download to your computer’s download folder.
  6. Click on the downloaded report to view your 2025-26 LEA Risk Assessment Status Designation Report.
  7. Each LEA report includes points assigned by indicator, total risk assessment score, and risk status designation for 2025-26.

Coming in 2026-27 proposed new indicators (get ready now):

  • An LEA had late or no submissions of their single-audit to the Federal Award Clearinghouse. Because most charters do not receive $1,000,000 in combined federal funding, they automatically incur higher risk on this rating (more points). A charter can voluntarily do a single audit.
  •  An LEA has carried over excessive amounts of funds for grants awarded in the SPED Consolidated Grant or ESSA Consolidated Grant. “Excessive” is generally regarded as more than 25% carry over.
  • An LEA had a high percentage of unexpended TEHCY funds (if applicable)

The bottom line is that if you get grant funds, spend them! Do draw downs every month, and don’t be late for deadlines. Be aware of programmatic requirements and stay in compliance.

Need help?

Please contact Charter School Success:

Dr. Sheila K. Sherman ssherman@charterschoolsuccess.com

Have questions?

Ask questions, get answers, and discuss this topic on the Charter School Community Roundtable now.