The Texas Education Agency last month informed the Tuloso-Midway Independent School District that it was closing its investigation into the district's financial record keeping issues, according to a letter sent by the state.

Interim Superintendent Sue Nelson said she received the letter last month, which was sent about two months after the district received a report from an independent auditor revealing 'significant deficiencies' in the district's financial record keeping of state and federal funds.

"They just let us know that we're heading in the right direction and they'll continue to monitor us," she said. "I think we're OK."

After the auditor's report was presented in June to the TMISD Board of Trustees, the information was sent to the TEA. Before that meeting, the district also terminated its business manager, Carol Sue Hipp, as a result of the auditor's findings. She has since had a grievance appealing her termination and a proposed settlement turned down by school board members.

The district is also in the process of implementing about $120,000 in corrective measures to prevent similar financial record mistakes from occurring in the future, and a new business manager has been hired, as well.

"It appears that the district is taking appropriate action to correct the findings," Michael Richmond, director of investigations, wrote in the Aug. 13 letter.

"At the issuance of this letter, this complaint will be closed," he added. "However, this division will continue monitoring the district and request that the district keep TEA apprised of any additional steps taken to strengthen the district's internal controls and financial monitoring processes."

The district was also warned by Richmond about its hiring of financial consultant Ricardo Rodriguez earlier this year without publicly the position in order to gather bid proposals. Nelson said she sent an Aug. 16 letter to the TEA informing them that the district was in an urgent situation and hired Rodriguez and, later, a group of consultants to begin correcting the auditor's findings.

The situation was a last resort, Nelson added, after the district tried unsuccessfully to gain assistance from the Region 2 Education Service Center and a retired business manager who used to work for the district.

"They (TEA) basically said not to do it again…and we won't," she said.