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Austin ISD will be the subject of state scrutiny once again, with a new investigation into the district’s finances led by the state comptroller and spurred on by Gov. Greg Abbott.

Texas Comptroller Don Huffines announced Monday that Austin, as well as the Barbers Hill, El Paso, and Prosper school districts, would undergo a detailed financial review.

Abbott, in August, requested the comptroller investigate Texas public school district spending to determine whether public funds were being used “for their lawful, intended purposes” ahead of Texas’ upcoming legislative session to inform possible changes. Abbott asked for a targeted review of spending patterns, with a focus on how much district spending was dedicated to administrative costs, and asked Huffines’ office to select up to four independent school districts of varying size and geographic location, but it was not immediately clear what process or criteria would be used to select those districts. The move adds a new layer to the financial scrutiny Texas school districts typically face under a state requirement to submit independently audited financial statements annually to the state’s education agency.

The review announced this week follows three calls for documentation from the Texas Attorney General’s Office and one review from the Texas Education Agency of the Austin school district since January.

During an August news conference requesting the review, Abbott singled out Austin ISD’s 14% enrollment decline from 2015 to 2025, and its 75% increase in administrative spending per student.

At the time, Abbott proposed that districts be required to spend at least 70% of their funds in the classroom. Austin ISD has acknowledged that administrative staffing had not kept pace with student loss and restructured its central office in June 2025 to reduce administrative costs, making additional reductions this summer.

“This review is an important step to ensure transparency, accountability, and the responsible use of public funds,” Huffines said in a statement Monday. “Our office is committed to providing a clear assessment that helps Texans understand how their education dollars are being used.”

Both Huffines and Abbott are up for election this year. Abbott appointed Huffines to his post after Huffines won the March Republican primary.

The other three districts selected for state financial review are Barbers Hill ISD, an 8,000-student district near Houston; Prosper ISD near Dallas, which is home to 33,500 students; and El Paso ISD, which has just over 46,000 students enrolled. Austin’s most recent enrollment numbers show the district has about 66,000 students.

According to the state comptroller’s announcement, the upcoming review will examine district spending to determine whether it “complies with state law and is directed toward students, classrooms, and teachers — rather than toward administrative expansion or non‑instructional bureaucracy.” A final report detailing its findings will be completed by Dec. 31.

The Texas Comptroller’s Office did not reply to calls and emails regarding what criteria was used to select the districts and what actionable steps could be taken with the review’s findings.

Austin ISD did not respond to a request for comment on the review at the time of publication. Last month, Superintendent Matias Segura said the district did not have a direct response to Abbott’s criticism but noted that more than 75% of Austin ISD’s general fund is directed to classroom-level spending this year.

“The data set that was used by the governor was over a 10-year period,” Segura said in August. “Certainly, when you use that duration, things can be presented a certain way.”

Austin ISD’s financial health has already been the subject of state scrutiny this year: Citing the district’s staff-to-student ratio, the Texas Education Agency lowered Austin’s financial rating this summer.

The state evaluates district spending through its Financial Integrity Rating System of Texas, or FIRST, which includes tracking how administrative costs have kept up with changes in student-to-staff ratios. Austin ISD Chief Financial Officer Katrina Montogmery told trustees in August that Austin ISD’s 2026 financial rating had fallen to a B for the first time after 21 consecutive years of recognized “superior achievement.”

At the time, trustees argued the district had increased staffing, particularly in special education, to meet requirements imposed during TEA’s recent oversight of the district’s special education services. Additionally, because the rating relied on 2024-25 data, it doesn’t reflect the hundreds of positions Austin ISD eliminated through administrative changes, school consolidations and budget cuts.

“I am pretty sure our families don’t agree with TEA as far as the decline in staffing,” Trustee Fernando de Urioste said at an August board meeting. “I understand that is what TEA is scoring us on for our rating.”

The comptroller’s office is the latest to undertake an investigation into the Austin school district under mounting pressure from the state. Earlier this year, Attorney General Ken Paxton announced he was requesting documentation from Austin ISD regarding complaints about the district’s compliance with certain state laws, including one that governs sex-segregated spaces in public schools and a state law requiring the display of the Ten Commandments in classrooms. In addition, Abbott directed Paxton’s office and the Texas Education Agency to look into Austin ISD’s role in and handling of student-organized walkouts last school year over increased immigration enforcement.

Paxton’s office did not immediately respond to a request for comment on the status of the investigations. The Texas Education Agency did not immediately respond to a request for comment on the status of the investigations into student protests.