2025 Annual Financial and Compliance Report

Officers

• Jackie Stephens, Chairman
• Shawn Wells, Vice Chairman
• Vanna Dains, Secretary

Members and Terms

• Doug Crawley, Ranger, Texas – 2026
• Bobby Murry, Ranger, Texas – 2026
• Jo Ann Greenwood, Ranger, Texas – 2026
• Gay Ann Wolford, Ranger, Texas – 2026
• Shawn Wells, Ranger, Texas – 2028
• Sandi Herod, Ranger, Texas – 2028
• Jackie Stephens, Ranger, Texas – 2028
• Della Carey, Ranger, Texas – 2030
• Vanna Dains, Ranger, Texas – 2030

• Dr. Derrick Worrels, President
• Mrs. Gaylyn Mendoza, Senior Vice President of Business Services/CFO
• Mr. Dixon Bailey, Executive Vice President of Workforce Development
• Dr. Dayna Prochaska, Senior Vice President of Instruction and Brown County Campus
• Dr. Lindy Matthews, Vice President of Institutional Advancement
• Mr. Ahmy Arca, Vice President of Student Services
• Mrs. Debbie Karl, Vice President of Institutional Effectiveness and Accreditation
• Mr. Luis Ramirez, Vice President of Dual Enrollment and Erath County Campus
• Mr. Robert Culverhouse, Associate Vice President of Information Technology
• Mrs. Stephanie Worrels, Associate Vice President of Advising and Recruitment
• Dr. Babette Cuadrado, Associate Vice President of Ranger Reach

To the Board of Regents

Ranger College District

Report on the Audit of the Financial Statements

Opinions

We have audited the accompanying financial statements of the business-type activities and the discretely presented component unit of Ranger College District (the College) as of and for the years ended August 31, 2025 and 2024, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the discretely presented component unit of the College as of August 31, 2025 and 2024, and the respective changes in financial position, and cash flows, where applicable, thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America. 

Basis for Opinions

We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the College and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the College’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government

Auditing Standards, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the College’s ability to continue as a going concern for a reasonable period of time. 

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal controlrelated matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of the College’s proportionate share of net pension liability, the schedule of the College’s contributions for pensions, the schedule of the College’s proportionate share of net OPEB liability, the schedule of the College’s contributions for OPEB, and the related notes on pages 6 - 14 and 58 - 62, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audits were conducted for the purpose of forming opinions on the financial statements that collectively comprise the College’s basic financial statements. The accompanying supplemental schedules and schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and schedule of expenditures of state awards, as required by the Texas Grant Management Standards (Schedules A – F), are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental information and the schedules of expenditures of federal and state awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information

Management is responsible for the other information included in the annual report. The other information comprises the organizational data but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 18, 2025, on our consideration of the College’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the College’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College’s internal control over financial reporting and compliance.

Snow Garrett Williams

December 18, 2025

August 31, 2025 and 2024

This section of the Ranger College District’s annual financial report presents management’s discussion and analysis of the College’s financial activity during the fiscal years ended August 31, 2025 and 2024. Since this management’s discussion and analysis is designed to focus on current activities, resulting change, and currently known facts, please read it in conjunction with the College’s financial statements and the footnotes. Responsibility for the completeness and fairness of this information rests with the College.

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Using This Annual Report

The financial statements focus on the College as a whole. The statements are designed to emulate corporate presentation models whereby all College activities are consolidated into one total. The focus of the statement of net position is designed to be similar to bottom line results for the College.

The statement of revenues, expenses, and changes in net position focuses on both the gross costs and the net costs of the College’s activities which are supported mainly by tuition and fees and by federal, state, and other revenues. This approach is intended to summarize and simplify the user’s analysis of the costs of various College services to students and the public.

The final required financial statement, the statement of cash flows, reports cash receipts, cash payments, and net changes in cash resulting from operating, investing, and financing activities.

The notes to the basic financial statements provide additional information that is essential to a full understanding of the data provided in the financial statements. The notes to the financial statements can be found beginning on page 23 of this report.

The Ranger College Foundation, Inc. is a discretely presented component unit of the College and is reported as separate financial statements.

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Financial Highlights

The College’s net position increased from August 31, 2024 to August 31, 2025 by $5,244,115 and increased from August 31, 2023, to August 31, 2024, by $43,624,634. As of August 31, 2025 and 2024, the College’s net position was $50,542,318 and $45,298,203, which includes $11,648,849 and $10,286,097 in net investment in capital assets, $315,762 and $305,074 in restricted net position, and $38,577,707 and $34,707,032 in unrestricted net position, respectively.

Operating expenses for fiscal years 2025 and 2024 were $18,882,211 and $17,429,919, of which $5,020,972 and $4,973,727 were expended for instruction, $3,060,747 and $2,974,230 were expended for institutional support, and $3,093,070 and $2,814,748 were expended for auxiliary enterprises, respectively. In fiscal years 2025 and 2024, depreciation and amortization expense was $1,623,605 and $1,540,545, respectively.

Operating revenues for fiscal years 2025 and 2024 were $8,133,876 and $7,963,305, which includes $3,733,343 and $4,215,337 in tuition and fees (net of discounts), $1,356,235 and $1,505,834 in auxiliary revenue (net of discounts), $1,217,690 and $1,321,041 in federal grants and contracts, and $1,248,145 and $611,847 in state grants and contracts, respectively.

Net non-operating revenues for fiscal years 2025 and 2024 were $15,992,450 and $11,499,748, which includes $9,053,694 and $8,178,732 in state appropriations, $3,208,040 and $2,630,577 in federal grants, and $574,595 and $600,977 in ad-valorem taxes, respectively.

Net non-operating revenues were $15,992,450 and $11,499,748, including:

• $9,053,694 and $8,178,732 in state appropriations
• $3,208,040 and $2,630,577 in federal grants
• $574,595 and $600,977 in ad-valorem taxes

For the years ended August 31, 2025 and 2024, the College implemented Governmental Accounting Standards Board Statements No. 101, Compensated Absences, and No. 102, Certain Risk Disclosures. See Note 2 to the financial statements for more information regarding implementation. 

 

Statement of Net Position

The statement of net position presents current assets (non-restricted assets expected to provide support within a year), non-current assets (restricted assets expected to provide long-term benefit), deferred outflows of resources, current liabilities (obligations which must be met within the current year), non-current liabilities (obligations which are not settled in the current year), and deferred inflows of resources.

All assets, deferred outflows of resources, liabilities, and deferred inflows of resources are presented using the accrual basis of accounting, which is similar to the accounting used by most private-sector institutions.

Net position, the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources, is one way to measure the financial position of the College.

As of August 31, 2025, net position was $50,542,318. This was an increase of $5,244,115 from the period ended August 31, 2024.

As of August 31, 2024, net position was $45,298,203. This was an increase of $43,624,634 from the period ended August 31, 2023.

Statement of Revenues, Expenses, and Changes in Net Position

The statement of revenues, expenses, and changes in net position presents the operating results of the College, as well as the non-operating revenue and expenses.

Operating revenues are primarily those that result directly from instruction, the operation of the College’s auxiliary services (cafeteria, dormitories, bookstore, etc.) and Federal and State grants.

State appropriations and property tax receipts, while budgeted for operations, are considered non-operating revenues and depreciation and amortization are shown in operating expenses according to accounting principles generally accepted in the United States of America.

Operating Results for the Years Ended August 31

Operating Results for the Years Ended August 31

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Ranger College District (the College) was established in 1926, in accordance with the laws of the State of Texas, to serve the educational needs of Ranger and the surrounding communities.

The College is considered a special-purpose, primary government according to U.S. Generally Accepted Accounting Principles (GAAP) as promulgated by the Governmental Accounting Standards Board (GASB).

While the College receives funding from local, state, and federal sources, and must comply with the spending, reporting, and recordkeeping requirements of these entities, it is not a component unit of any other governmental entity.

This section provides a summary of the College’s significant accounting activities and other topics related to the College’s financial reporting.

Reporting Guidelines

The significant accounting policies followed by the College in preparing these financial statements are in accordance with the Texas Higher Education Coordinating Board's Annual Financial Reporting Requirements for Texas Public Community Colleges. The College applies all applicable GASB pronouncements. The College is reported as a special-purpose government engaged in business-type activities (BTA).

Tuition Discounting

Texas Public Education Grants (TPEG)

Certain tuition amounts are required to be set aside for use as scholarships by qualifying students. This set-aside, called the TPEG, is shown with tuition and fee revenue amounts as a separate set aside amount (Texas Education Code §56.033). When the award is used by the student for tuition and fees, the College records the amount as a tuition discount. If the amount is dispersed directly to the student, the amount is recorded as a scholarship expense.

Title IV, Higher Education Act (HEA) Program Funds

Certain Title IV HEA Program funds are received by the College to pass through to the student. These funds are initially received by the College and recorded as revenue. When the award is used by the student for tuition and fees, the amount is recorded as a tuition discount. If the amount is disbursed directly to the student, the amount is recorded as a scholarship expense.

Other Tuition Discounts

The College awards tuition and fee scholarships from institutional funds to students who qualify. When these amounts are used for tuition and fees, the College records the amount as a tuition discount. If the amount is disbursed directly to the student, the amount is recorded as a scholarship expense.

Basis of Accounting and Measurement Focus

The financial statements of the College have been presented using the economic resources measurement focus and full accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned, and expenses are recognized when a legal or contractual obligation is incurred.

Cash and Cash Equivalents

The College considers cash and cash equivalents as cash on-hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

Investments

The College reports investments at fair value. Fair values are based on published market rates. Short-term investments have an original maturity greater than three months but less than one year at time of purchase. Long-term investments have an original maturity of greater than one year at the time of purchase.

Prepaid Items

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. The cost of prepaid items is recorded as expenses when consumed rather than when purchased.

Capital Assets

The College records capital assets at historical cost at the date of acquisition or acquisition value at the date of donation. Right-to-use assets are initially measured at the initial amount of the related liability, which is based on the present value of payments expected to be paid during the term of the applicable arrangement. For equipment, the College’s capitalization policy includes all items with a unit cost of $5,000 or more and an estimated useful life in excess of one year. The College capitalizes renovations of $5,000 or more to buildings, infrastructure, and land improvements that significantly increase the value or extend the useful life of the structure. The College charges costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives to operating expense in the year in which the expense is incurred.

Land and construction in progress are not depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 50 years for buildings, 20 years for land improvements, 15 years for library books, 10 years for furniture, machinery, vehicles, and other equipment, and 5 years for telecommunications and peripheral equipment. Intangible assets follow the same capitalization policies as tangible assets and are reported with tangible assets in the appropriate capital asset class. Right-to-use assets are amortized over the term of the applicable arrangement.

Compensable Absences

The College recognizes a liability for compensable absences for leave time that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used as time off or settled during or upon separation from employment. See additional information in Note 12.

Pensions

The College participates in the Teacher Retirement System of Texas (TRS) pension plan, a cost-sharing multiple-employer defined benefit pension that has a special funding situation. The fiduciary net position of TRS has been determined using the flow of economic resources measurement focus and full accrual basis of accounting. This includes, for purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, pension expense, and information about assets, liabilities, and additions to/deductions from TRS’s fiduciary net position. Benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Other Post-Employment Benefits (OPEB)

The fiduciary net position of the Employees Retirement System of Texas (ERS) State Retiree Health Plan (SRHP) has been determined using the flow of economic resources measurement focus and full accrual basis of accounting. This includes, for purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to other post-employment benefits; OPEB expense; and information about assets, liabilities, and additions to/deductions from SRHP’s fiduciary net position. Benefit payments are recognized when due and are payable in accordance with the benefit terms. Investments are reported at fair value.

Unearned Revenues

Revenues, primarily consisting of tuition, fees, meal charges, and resident hall charges, related to academic terms in the next fiscal year are recorded on the Statement of Net Position as unearned revenue in the current fiscal year. Tuition and fees of $4,882,338 and $4,846,979 and federal and state grants of $541,397 and $703,008 have been reported as unearned revenue at August 31, 2025 and 2024, respectively.

Bonds Payable

Bonds payable are reported net of applicable bond premium, which is deferred and amortized using the effective interest method.

Deferred Outflows and Inflows

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. The College has deferred outflows related to its pension plan and for other post-employment benefits (OPEB). See additional information in Note 11 and Note 14, respectively.

In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so is not recognized as an inflow of resources (revenue) until that time. The College has deferred inflows related to its pension plan, and other post-employment benefits (OPEB). See additional information in Note 11 and Note 14, respectively.

Net Position

Assets and deferred outflows of resources less liabilities and deferred inflows of resources is called net position. Net position is comprised of three components: net investment in capital assets, restricted, and unrestricted.

Net investment in capital assets consists of capital assets, net of accumulated depreciation/amortization and reduced by outstanding balances of bonds, notes, and other debt that are attributable to the acquisition, construction, or improvement of those assets.

Restricted net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Assets are reported as restricted when constraints are placed on asset use either by external parties or by law through constitutional provision or enabling legislation.

Unrestricted net position is the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that does not meet the definition of the two preceding categories.

Sometimes the College will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the College’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.

Non-Current Cash and Investments

Non-current cash and cash equivalents are set aside and classified as restricted assets on the Statement of Net Position because they are maintained in separate bank accounts and their use is limited to obligations, such as scholarships, grant requirements, revenue bonds, and construction.

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, the College is aware that actual results could differ from those estimates.

Operating and Non-Operating Revenue and Expense Policy

The College distinguishes operating revenues and expenses from non-operating items. The College reports as a BTA and as a single, proprietary fund. Operating revenues and expenses generally result from providing services in connection with the College’s principal ongoing operations. The principal operating revenues are tuition and related fees. The major non-operating revenues are state appropriations and property tax collections. Operating expenses include the cost of sales and services, administrative expenses, and depreciation/amortization on capital assets. The operations of the bookstore and food service are not performed by the College.

Reclassifications

Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements.

New Accounting Pronouncements

For the years ended August 31, 2025 and 2024, the College implemented the following new accounting pronouncements:

Governmental Accounting Standards Board Statement No. 101, Compensated Absences. This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means.

Governmental Accounting Standards Board Statement No. 102, Certain Risk Disclosures. This statement requires governments to disclose information about certain risks that could significantly affect their ability to continue to provide services or meet obligations as they come due. The College evaluated its potential exposures in accordance with the requirements of this statement and determined that no additional disclosures were necessary.

These statements were adopted by the College as of September 1, 2024. There was no impact on fiscal year 2025 results or fiscal year 2024 amounts as previously reported.

The College is authorized to invest in obligations and instruments as defined in the Public Funds Investment Act (Sec. 2256.001, Texas Government Code).

Such investments include:

• Obligations of the United States or its agencies
• Direct obligations of the State of Texas or its agencies
• Obligations of political subdivisions rated not less than “A” by a national investment rating firm
• Certificates of deposit
• Other instruments and obligations authorized by statute

The College’s deposits and investments are invested pursuant to the Investment Policy, which is approved annually by the College’s Board. The Investment Policy includes a list of authorized investment instruments. These include, with certain restrictions:

• Certificates of deposit
• U.S. Treasury Bills and Notes
• Investment pools

No other investments shall be made without approval of a majority of the Board of Regents.

Cash and Deposits

Cash and Cash Equivalents reported on Exhibit 1, Statements of Net Position, consist of the items reported below:

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The College’s investments measured and reported at fair value are classified according to the following hierarchy:

• Level 1 – Investments reflect prices quoted in active markets for identical assets or liabilities that the government can access at the measurement date.
• Level 2 – Investments reflect prices that are based on similar observable asset or liability either directly or indirectly, which may include inputs in markets that are not considered to be active.
• Level 3 – Investments reflect prices based upon unobservable sources for the asset or liability.

The categorization of investments within the hierarchy is based upon the pricing transparency of the instrument and should not be perceived as the particular investment’s risk. All investments were categorized in Level 2 at September 31, 2025 and 2024. The fair value of the investment in real estate is determined based on third-party appraisals, adjusted as necessary for changes in market conditions.

6. CAPITAL ASSETS
Capital assets activity for the year ended August 31, 2025 was as follows:

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6. CAPITAL ASSETS (Continued)
Capital assets activity for the year ended August 31, 2024 was as follows:

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Non-current liability activity for the years ended August 31, 2025 and 2024 was as follows:

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Revenue Bonds

• Combined Fee Revenue Bond, Series 2013
  • Issued May 15, 2013
  • Purpose: To purchase and renovate a building in Stephenville for instructional use
  • Original balance: $3,000,000
  • Repayment terms: Thirty semi-annual installments ranging from $160,000 to $243,000, including interest at 2.95%
  • Final installment due: June 1, 2028
  • Source of revenue for debt service: Tuition and fees
  • Outstanding principal balance:
    • $709,000 as of August 31, 2025
    • $932,000 as of August 31, 2024
• Combined Fee Revenue Bond, Series 2014
  • Issued July 1, 2014
  • Purpose: To purchase and renovate a building in Stephenville for instructional use
  • Original balance: $3,000,000
  • Repayment terms: Forty semi-annual installments ranging from $88,000 to $215,000, including interest at 4.1%
  • Final installment due: August 15, 2034
  • Source of revenue for debt service: Tuition and fees
  • Outstanding principal balance:
    • $1,655,000 as of August 31, 2025
    • $1,805,000 as of August 31, 2024

Limited Tax Bonds

• Limited Tax Bond, Series 2017
  • Issued March 1, 2017
  • Purpose: To renovate, construct, and equip school buildings and to pay the costs of issuing the bonds
  • Original balance: $9,745,000
  • Repayment terms: Fifty-seven semi-annual installments ranging from $65,000 to $560,000, including interest rates from 2% to 4%
  • Final installment due: February 15, 2046
  • Source of revenue for debt service: Assessment of property taxes
  • Issued at a premium of $254,885
  • Unamortized premium:
    • $145,062 as of August 31, 2025
    • $157,112 as of August 31, 2024
  • Outstanding principal balance:
    • $8,100,000 as of August 31, 2025
    • $8,350,000 as of August 31, 2024

Notes Payable from Direct Borrowings

• State Energy Conservation Office (SECO)
  • Original loan date: December 8, 2016
  • Purpose: To fund energy conservation measures
  • Total available drawdown: $1,968,046
  • Drawdown period: Fiscal years ending August 31, 2017 and 2018
  • Repayment terms: Quarterly installments of $44,975 beginning August 31, 2018 and continuing through February 28, 2031, in accordance with the Loan Payment Schedule
  • Interest rate: 2% from the date of borrowing
  • Source of revenue for debt service: Unrestricted revenue
  • Outstanding principal balance:
    • $882,328 as of August 31, 2025
    • $1,041,535 as of August 31, 2024
  • Default provision: In the event of default, outstanding amounts may become immediately due if the College is unable to make payment. If the loan is not repaid within 90 days after a declaration of default, SECO may recommend that the Legislative Budget Board reduce state appropriations by the total outstanding amount due under the agreement.
• First Financial Bank
  • Original loan date: December 15, 2023
  • Purpose: To fund an energy conservation project
  • Original balance: $292,120
  • Repayment terms: Thirty-two quarterly installments of $12,373, including interest at 7.25%
  • Source of revenue for debt service: Property taxes
  • Outstanding principal balance:
    • $262,330 as of August 31, 2025
    • $291,471 as of August 31, 2024

The principal and interest expense requirements for the next five years and beyond are summarized below for the debt issued.

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General information related to leases payable is summarized below: INSERT CHART

There were no variable payments, residual value guarantees, or penalties not included in the
measurement of the leases. The College did not have any commitments under leases not yet
commenced at year-end, components of losses associated with asset impairments, or sublease
transactions for fiscal year 2025. 

The College participates in a cost-sharing multiple-employer defined benefit pension plan that has a special funding situation. The plan is administered by the Teacher Retirement System of Texas (TRS). It is a defined benefit pension plan established and administered in accordance with the Texas Constitution, Article XVI, Section 67, and Texas Government Code, Title 8, Subtitle C. The pension trust fund is a qualified pension trust under Section 401(a) of the Internal Revenue Code. The Texas Legislature establishes benefits and contribution rates within the guidelines of the Texas Constitution. The pension’s Board of Trustees does not have the authority to establish or amend benefit terms.

Plan Eligibility

All employees of public, state-supported educational institutions in Texas who are employed for one-half or more of the standard workload and who are not exempted from membership under Texas Government Code, Title 8, Section 822.002 are covered by the system.

Pension Plan Fiduciary Net Position

Detailed information about the Teacher Retirement System's fiduciary net position is available in a separately issued Annual Comprehensive Financial Report (ACFR) that includes financial statements and required supplementary information. That report may be obtained on the Internet at https://www.trs.texas.gov/learning-resources/publications; by writing to TRS at attention Finance Division, PO BOX 149676, Austin, TX, 78714-0185, or by calling 1-800-223-8778.

Benefits Provided

TRS provides service and disability retirement, as well as death and survivor benefits, to eligible employees (and their beneficiaries) of public and higher education in Texas. The pension formula is calculated using 2.3% (multiplier) times the average of the five highest annual creditable salaries times years of credited service to arrive at the annual standard annuity except for members who are grandfathered, the three highest annual salaries are used. The normal service retirement is at age 65 with 5 years of credited service or when the sum of the member's age and years of credited service equals 80 or more years. Early retirement is at age 55 with 5 years of service credit or earlier than 55 with 30 years of service credit. There are additional provisions for early retirement if the sum of the member's age and years of service credit total at least 80, but the member is less than age 60 or 62 depending on date of employment, or if the member was grandfathered in under a previous rule. There are no automatic post-employment benefit changes; including automatic cost of living adjustments (COLAs). Ad hoc post-employment benefit changes, including ad hoc COLAs can be granted by the Texas Legislature as noted in the Plan description above. Accordingly, the 2023 Texas Legislature passed Senate Bill (SB) 10 and House Joint Resolution (HJR) 2 to provide eligible retirees with a one-time stipend and an ad hoc COLA.

One-Time Stipends

Stipends, regardless of annuity amount, were paid in September 2023 to annuitants who met the qualifying age requirement on or before August 31, 2023:

• A one-time $7,500 stipend to eligible annuitants who are 75 years of age and older.
• A one-time $2,400 stipend to eligible annuitants age 70 to 74.

Cost-of-Living Adjustment

A COLA was dependent on Texas voters approving a constitutional amendment (Proposition 9) to authorize the COLA. Voters approved the amendment in the November 2023 election and the following COLA was applied to eligible annuitants' payments beginning with their January 2024 payment:

• 2% COLA for eligible retirees who retired between September 1, 2013 through August 31, 2020.
• 4% COLA for eligible retirees who retired between September 1, 2001 through August 31, 2013.
• 6% COLA for eligible retirees who retired on or before August 31, 2001.

Texas Government Code section 821.006 prohibits benefit improvements, if, as a result of the particular action, the time required to amortize TRS’ unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by such action. Actuarial implications of the funding provided in this manner are determined by the TRS’ actuary.

Contributions

Contribution requirements are established or amended pursuant to Article 16, Section 67 of the Texas Constitution which requires the Texas legislature to establish a member contribution rate of not less than 6% of the member's annual compensation and a state contribution rate of not less than 6% and not more than 10% of the aggregate annual compensation paid to members of the System during the fiscal year.

Employee contribution rates are set in state statute, Texas Government Code 825.402. The TRS Pension Reform Bill (Senate Bill 12) of the 86th Texas Legislature amended Texas Government Code 825.402 for member contributions and increased employee and employer contribution rates for fiscal years 2019 through 2025.

Contribution Rates

• 2025: Member 8.25%, Non-Employer Contributing Entity (State) 8.25%, Employers 8.25%
• 2024: Member 8.00%, Non-Employer Contributing Entity (State) 8.00%, Employers 8.00%

Fiscal Year Contributions

• College Contributions: $284,391
• Member Contributions: $483,291
• State of Texas (NECE) On-behalf Contributions: $171,374

Additional Contribution Requirements

Contributors to the plan include active members, employers, and the State of Texas as the only non-employer contributing entity. The State is the employer for senior colleges and universities, medical schools and state entities including TRS. In each respective role, the State contributes to the plan in accordance with state statutes and the General Appropriations Act (GAA).

Employers are required to pay the employer contribution rate in specific instances, including:

• On the portion of the member's salary that exceeds the statutory minimum for members entitled to the statutory minimum under Section 21.402 of the Texas Education Code.
• During a new member’s first 90 days of employment.
• When any or all of an employee’s salary is paid by federal funding sources, a privately sponsored source, from non-educational and general, or local funds.
• When the employing district is a public junior college or junior college district, the employer shall contribute to the retirement system as required by law.

Employers are also subject to an additional surcharge when employing a retiree of the Teacher Retirement System.

Valuation Date August 31, 2023 rolled forward to
August 31, 2024
Actuarial Cost Method Individual Entry Age Normal
Asset Valuation Method Fair Value
Single Discount Rate 7.00%
Long-term expected Rate 7.00%
Municipal Bond Rate as of August 2024 3.87% *
Last year ending August 31 in Projection
Period (100 years)
2123
Inflation 2.30%
Salary Increases including inflation 2.95% to 8.95%
Ad hoc post-employment benefit changes None
* The source for the rate is the Bond Buyers 20 Index which represents the estimated yield of
a portfolio of 20 general obligation bonds maturing in 20 years based on a survey of municipal
bond traders

The actuarial methods and assumptions used in the determination of the total pension liability are
the same assumptions used in the actuarial valuation as of August 31, 2023. For a full description
of these assumptions please see the actuarial valuation report dated November 21, 2023.
Discount Rate
A single discount rate of 7.00% was used to measure the total pension liability. The single discount
rate was based on the expected rate of return on plan investments of 7.00%. The projection of
cash flows used to determine this single discount rate assumed that contributions from active
members, employers and the non-employer contributing entity will be made at the rates set by the
legislature during the 2019 session. It is assumed that future employer and state contributions will
be 9.54% of payroll in fiscal year 2025 and thereafter. This includes all employer and state
contributions for active and rehired retirees
Based on those assumptions, the pension plan’s fiduciary net position was projected to be
available to make all future benefit payments of current plan members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
The long-term rate of return on pension plan investments is 7.00%. The long-term expected rate
of return on pension plan investments was determined using a building-block method in which
best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real
rates of return by the target asset allocation percentage and by adding expected inflation. 

Best estimates of geometric real rates of return for each major asset class included in the system’s
target asset allocation as of August 31, 2024 are summarized below:

Target
Allocation %**
Long-Term
Expected
Geometric Real
Rate of
Return***
Expected
Contribution to
Long-Term
Portfolio Returns
Global Equity
18.0% 4.4% 1.00%
13.0% 4.2% 0.80%
9.0% 5.2% 0.70%
USA
Non-U.S. Developed
Emerging Markets
Private Equity 14.0% 6.7% 1.20%
Stable Value
Government Bonds 16.0% 1.9% 0.40%
Stable Value Hedge Funds 5.0% 3.0% 0.20%
Absolute Return * 0.0% 4.0% 0.00%
Real Return
Real Estate 15.0% 6.6% 1.20%
Energy, Natural Resources, & Infrastructure 6.0% 5.6% 0.40%

Energy, Natural Resources, & Infrastructure 6.0% 5.6% 0.40%
Commodities 0.0% 2.5% 0.00%
Risk Parity 8.0% 4.0% 0.40%
Asset Allocation Leverage
Cash 2.0% 1.0% 0.00%
Asset Allocation Leverage -6.0% 1.3% -0.10%
Inflation Expectation 2.40%
Volatility Drag**** -0.70%
Expected Return 100.00% 7.90%
* Absolute Return includes Credit Sensitive Investments.
Asset Class
** Target allocations are based on the FY 2024 policy model

*** Capital Market Assumptions (CMA) come from 2024 SAA Study CMA Survey (as of 12/31/2023).

**** The volatility drag results from the conversion between arithmetic and geometric mean returns.

11. EMPLOYEES’ RETIREMENT PLANS (Continued)
Discount Rate Sensitivity Analysis
The following schedule shows the impact of the net pension liability if the discount rate used was
1 percentage point lower than and 1 percentage point higher than the discount rate that was used
(7.00%) in measuring the net pension liability.
Fiscal Year 2025 INSERT CHART

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At the fiscal year ended August 31, 2025, the College reported a liability of $2,761,726 for its
proportionate share of the TRS net pension liability. This liability reflects a reduction for State
pension support provided to the College. The amount recognized by the College as its
proportionate share of the net pension liability, the related State support, and the total portion of
the net pension liability that was associated with the College were as follows: 

INSERT CHART

The net pension liability was measured as of August 31, 2023 and rolled forward to August 31,
2024 and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of that date. The College’s proportion of the net pension liability was based
on the College’s contributions to the pension plan relative to the contributions of all employers to
the plan for the period September 1, 2023 through August 31, 2024. 

At the measurement date of August 31, 2024, the College’s proportion of the collective net pension
liability was 0.0045212%, which was an increase of 0.0002% from its proportion measured as of
August 31, 2023.
Changes Since the Prior Actuarial Valuation
The actuarial assumptions and methods are the same as used in the determination of the prior
year’s net pension liability.
The 2023 Texas Legislature passed Senate Bill 10 (SB 10), which provided a stipend payment to
certain retirees and variable ad hoc cost-of-living adjustments (COLA) to certain retirees in early
fiscal year 2024. Due to its timing, the legislation and payments were not reflected in the August
31, 2023 actuarial valuation. Under the roll forward method, an adjustment was made to reflect
the legislation in the rolled forward liabilities for the current measurement year, August 31, 2024.
SB 10 and House Joint Resolution 2 (HJR 2) of the 88th Regular Legislative Session appropriated
payments of $1.645 billion for one-time stipends and $3.355 billion for COLAs. This appropriation
is treated as a supplemental contribution and included in other additions. Since the Legislature
appropriated funds for this one-time stipend and COLA, there was no impact on the Net Pension
Liability of TRS.
For the fiscal year ended August 31, 2025, the College recognized pension expense of $222,014
and revenue of $171,374 for support provided by the State.
At August 31, 2025, the College reported its proportionate share of the TRS deferred outflows of
resources and deferred inflows of resources related to pensions from the following sources

INSERT CHART

The College recognized $284,392 as deferred outflows of resources related to pension resulting
from College contributions subsequent to the measurement date, which will be recognized as a
reduction of the net pension liability in the fiscal year ending August 31, 2026. 

At August 31, 2024, the College reported its proportionate share of the TRS deferred outflows of
resources and deferred inflows of resources related to pensions from the following sources:

INSERT CHART

The net amounts of the employer’s balances of deferred outflows and inflows of resources related
to pensions will be recognized in pension expense as follows: 

INSERT CHART

Optional Retirement Plan - Defined Contribution Plan
Plan Description
Participation in the Optional Retirement Program is in lieu of participation in the TRS. The optional
retirement program provides for the purchase of annuity contracts and operates under the
provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas Government Code, Title 8,
Subtitle C. 

Funding Policy
Contribution requirements are not actuarially determined but are established and amended by the
Texas legislature. The percentages of participant salaries currently contributed by the
State/College and each participant are 6.6% and 6.65%, respectively. Benefits fully vest after one
year plus one day of employment. Because these are individual annuity contracts, the State has
no additional or unfunded liability for this program. Senate Bill 1812, 83rd Texas Legislature,
Regular Session, effective September 1, 2013, limits the amount of the State’s contribution to 50
percent of eligible employees in the reporting district.
The retirement expense to the State for the College was $39,974 and $36,922 for the fiscal years
ended August 31, 2025 and 2024, respectively. This amount represents the portion of expended
appropriations made by the Legislature on behalf of the College.
The total payroll for all College employees was $7,793,572 and $7,045,131 for fiscal years 2025
and 2024, respectively. The total payroll of employees covered by the TRS was $5,858,072 and
$5,146,816 and the total payroll of employees covered by the Optional Retirement Program was
$1,211,340 and $1,118,851 for fiscal years 2025 and 2024, respectively

Full-time employees earn annual leave at a rate of 4.6 hours per month from September through June. Twelve-month employees become eligible for vacation after six months of service. The College’s policy is that an employee may carry their accrued leave forward from one fiscal year to another fiscal year with a maximum of twenty days (160 hours). Employees who fail to work for six months forfeit vacation benefits. Employees who have worked a minimum of six months and terminate their employment with a minimum of a two-week notice are entitled to payment for all accumulated annual leave up to the maximum allowed. Sick leave is earned at a rate of eight hours per month and can be accumulated up to a maximum of 480 hours. The College has estimated the amount of sick leave that is more likely than not to be used as time off in the future. The College recognized a liability for accrued compensable absences in the amount of $186,625 and $167,440 as of August 31, 2025 and 2024, respectively.

Plan Description
The College participates in a cost-sharing, multiple-employer, defined-benefit other postemployment benefit (OPEB) plan with a special funding situation. The Texas Employees Group
Benefits Program (GBP) is administered by the Employees Retirement System of Texas (ERS).
The GBP provides certain post-employment health care, life, and dental insurance benefits to
retired employees of participating universities, community colleges, and State agencies in
accordance with Chapter 1551, Texas Insurance Code. Almost all employees may become eligible
for those benefits if they reach normal retirement age while working for the State and retire with at
least 10 years of service to eligible entities. Surviving spouses and dependents of these retirees
are also covered. Benefit and contribution provisions of the GBP are authorized by State law and
may be amended by the Texas Legislature.

OPEB Plan Fiduciary Net Position
Detailed information about the GBP’s fiduciary net position is available in the separately issued
ERS Annual Comprehensive Financial Report (ACFR) that includes financial statements, notes to
the financial statements, and required supplementary information. That report may be obtained
by visiting https://ers.texas.gov; or by writing to ERS at: 200 East 18th Street, Austin, TX 78701; or
by calling (877) 275-4377.
Benefits Provided
Retiree health benefits offered through the GBP are available to most State of Texas retirees and
their eligible dependents. Participants need at least ten years of service credit with an agency or
institution that participates in the GBP to be eligible for GBP retiree insurance. The GBP provides
self-funded group health (medical and prescription drug) benefits for eligible retirees under
HealthSelect. The GBP also provides a fully insured medical benefit option for Medicare-primary
participants under the HealthSelect Medicare Advantage Plan and life insurance benefits to eligible
retirees via a minimum premium funding arrangement. The authority under which the obligations
of the plan members and employers are established and/or may be amended is Chapter 1551,
Texas Insurance Code.

Contributions
Section 1551.055 of Chapter 1551, Texas Insurance Code, provides that contribution
requirements of the plan members and the participating employers are established and may be
amended by the ERS Board of Trustees. The employer and member contribution rates are
determined annually by the ERS Board of Trustees based on the recommendations of ERS staff
and its consulting actuary. The contribution rates are determined based on (i) the benefit and
administrative costs expected to be incurred, (ii) the funds appropriated, and (iii) the funding policy
established by the Texas Legislature in connection with benefits provided through the GBP. The
Trustees revise benefits when necessary to match expected benefit and administrative costs with
the revenue expected to be generated by the appropriated funds. There are no long-term
contracts for contributions to the plan.

The following table summarizes the maximum monthly employer contribution toward eligible
retirees’ health and basic life premium, which is based on a blended rate. Retirees pay any
premium over and above the employer contribution. The employer does not contribute toward
dental or optional life insurance. Surviving spouses and their dependents do not receive any
employer contribution. As the non-employer contributing entity (NECE), the State of Texas pays
part of the premiums for the junior and community colleges.

INSERT CHART

Contributions of premiums to the GBP plan for the current and prior fiscal year by source is
summarized in the following table. 

INSERT CHART

Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of August 31, 2024, using the
following actuarial assumptions, applied to all periods included in the measurement, unless
otherwise specified:
Valuation Date August 31, 2024
Actuarial Cost Method Entry age
Amortization Method Level percent of payroll, open
Amortization Period 30 years
Asset Valuation Method Not applicable, because the plan operates on a pay-asyou-go basis
Inflation Assumption Rate 2.30%
Healthcare Cost Trend Rates HealthSelect – 5.60% for FY2026, 5.60% for FY2027,
5.25% for FY2028, 5.00% for FY2029, 4.75% for
FY2030, 4.50% for FY2031 decreasing 10 basis points
per year to an ultimate rate of 4.30% for FY2033 and
later years
HealthSelect Medicare Advantage – 36.00% for
FY2026, 8.00% for FY2027, 5.25% for FY2028, 5.00%
for FY2029, 4.75% for FY2030, 4.50% for FY2031
decreasing 10 basis points per year to an ultimate rate
of 4.30% for FY2033 and later years
Pharmacy – 11.50% for FY2026, 11.00% for FY2027,
10.00% for FY2028, 8.50% for FY2029, 7.00% for
FY2030 decreasing 100 basis points per year to 5.00%
for FY2032 and 4.30% for FY2033 and later years
Salary Increases 2.30% to 8.95%, including inflation
Discount Rate 3.87%
Mortality Assumptions:
 Service Retirees, Survivors, and
 Other Inactive Members
Tables based on TRS exper

Tables based on TRS experience with Ultimate MP
Projection Scale from the year 2021.
 Disability Retirees Tables based on TRS experience with Ultimate MP
Projection Scale from the year 2021 using a 3-year set
forward and minimum mortality rates of four per 100
male members and two per 100 female members.
 Active Members Sex Distinct Pub-2010 Amount-Weighted-BelowMedian Income Teacher Mortality with a 2-year set
forward for males with Ultimate MP-2021 Projection
Scale from year 2010. 

Many of the actuarial assumptions used in this valuation were based on the results of actuarial
experience studies performed by the ERS retirement actuary as of August 31, 2023 and the TRS
retirement plan actuary as of August 31, 2021.
Investment Policy
The State Retiree Health Plan is a pay-as-you-go plan and does not accumulate funds in advance
of retirement. The System’s Board of Trustees adopted the amendment to the investment policy
in August 2022 to require that all funds in the plan be invested in cash and equivalent securities.
Discount Rate
Because the GBP does not accumulate funds in advance of retirement, the discount rate that was
used to measure the total OPEB liability is the municipal bonds rate. The discount rate used to
determine the total OPEB liability as of the beginning of the measurement year was 3.81%. The
discount rate used to measure the total OPEB liability as of the end of the measurement year was
3.87%, which amounted to an increase of 0.06%. The source of the municipal bond rate was the
Bond Buyer Index of general obligation bonds with 20 years to maturity and mixed credit quality.
The bonds’ average credit quality is roughly equivalent to Moody’s Investors Service’s Aa2 rating
and Standard & Poor’s Corp’s AA rating. Projected cash flows into the plan are equal to projected
benefit payments out of the plan. Because the plan operates on a pay-as-you-go basis and is not
intended to accumulate assets, there is no long-term expected rate of return on plan assets, and,
therefore, the years of projected benefit payments to which the long-term expected rate of return
is applicable is zero years.

Discount Rate Sensitivity Analysis
The following schedule shows the impact on the College’s proportionate share of the collective net
OPEB liability if the discount rate used was 1% less than and 1% greater than the discount rate
that was used (3.87%) in measuring the net OPEB Liability.

INSERT CHART

Healthcare Trend Rate Sensitivity Analysis
The following schedule shows the impact on the College’s proportionate share of the collective net
OPEB liability if the healthcare cost trend rate used was 1% less than and 1% greater than the
healthcare cost trend rate that was used in measuring the net OPEB liability. See actuarial
assumptions section above for specific rates.

INSERT CHART

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to OPEB
At August 31, 2025, the College reported a liability of $6,870,811 for its proportionate share of the
ERS’s net OPEB liability. The liability reflects a reduction for State support provided to the College
for OPEB. The amount recognized by the College as its proportionate share of the net OPEB
liability, the related State support, and the total portion of the net OPEB liability that was associated
with the College were as follows: 

INSERT CHART

The net OPEB liability was measured as of August 31, 2024, and the total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as of that date. The
employer’s proportion of the net OPEB liability was based on the employer’s contributions to the
OPEB plan relative to the contributions of all employers to the plan for the period September 1,
2023 through August 31, 2024.
At the measurement date of August 31, 2024, the employer’s proportion of the collective net
OPEB liability was 0.02344539%, which was an increase of 0.0022999% from the proportion
measured as of August 31, 2023. 

For the fiscal year ended August 31, 2025, the College recognized OPEB expense of $990 and
revenue of $990 for support provided by the State.
Changes Since the Prior Actuarial Valuation
Changes to the actuarial assumptions or other inputs that affected measurement of the total OPEB
liability since the prior measurement period were as follows:
 The percentage of current retirees and their spouses not yet eligible to participate in the
HealthSelect Medicare Advantage Plan and future retirees and retiree spouses who will
elect to participate in the plan at the earliest date at which coverage can commence.
 The proportion of future retirees assumed to be married and electing coverage for their
spouse.
 The proportion of future retirees assumed to elect health coverage at retirement and
proportion of future retirees expected to receive the Opt-Out Credit at retirement.
 The Patient-Centered Outcomes Research Institute fee payable under the Affordable Care
Act and the rate of future increases in the fee have been updated to reflect recent plan
experience and expected trends.
 Assumed Per Capita Health Benefit Costs and Health Benefit Cost and Retiree
Contribution trends have been updated to reflect recent health plan experience and its
effects on short-term expectations.
 The discount rate was changed from 3.81%, as of August 31, 2023, to 3.87%, as of August
31, 2024, as a result of requirements by GASB No. 75 to utilize the yield or index rate for
20-year, tax exempt general obligation municipal bonds rated AA/Aa (or equivalent) or
higher in effect on the measurement date.

At August 31, 2025, the College reported its proportionate share of the ERS plan’s collective
deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:

INSERT CHART

At August 31, 2024, the College reported its proportionate share of the ERS plan’s collective
deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:

INSERT CHART

Contributions made subsequent to the measurement date of $97,987 are reported as deferred
outflows of resources related to OPEB and will be recognized as a change in the net OPEB liability
for the fiscal year ending August 31, 2026. Other amounts reported as deferred outflows and
inflows of resources related to OPEB will be recognized in OPEB expense as follows: 

INSERT CHART

INSERT CHART

Contract and grant awards are accounted for in accordance with the requirements of the American Institute of Certified Public Accountants (AICPA) audit and accounting guide, State and Local Governments, 8.99. For Federal Contract and Grant Awards, funds expended but not collected are reported as Accounts Receivable (net) on Exhibit 1. Contract and grant awards that are not yet funded, and for which the College has not yet performed services, are not included in the financial statements. Contract and grant awards funds already committed, e.g., multi-year awards or funds awarded during fiscal years 2025 and 2024 for which monies have not been received nor funds expended totaled $1,991,735 and $1,513,780, respectively. Of these amounts, $599,463 and $465,791 were from Federal Contract and Grant Awards and $1,392,272 and $1,047,989 were from State Contract and Grant Awards for fiscal years ended 2025 and 2024, respectively.

INSERT CHART

Ranger College Foundation, Inc. - Discretely Presented Component Unit

The Ranger College Foundation, Inc. (the Foundation) was established as a separate nonprofit organization with the sole purpose of supporting the educational and other activities of the College. The Foundation solicits donations and acts as coordinator of gifts made by other parties.

The Foundation remitted $698,208 and $196,087 for other contributions to the College during the years ended August 31, 2025 and 2024, respectively. Also, at August 31, 2025 and 2024, the College reported a receivable from the Foundation of $57,661 and $0, respectively. There were no payables to the Foundation at August 31, 2025 and 2024. Under GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, an organization should report as a discretely presented component unit those organizations that raise and hold economic resources for the direct benefit of a government unit. Accordingly, the Foundation’s financial statements are included in the College’s annual report as a discretely presented component unit (see table of contents).

The College has the responsibility for making and carrying out decisions that will minimize the adverse effects of accidental losses that involve the College’s assets. Accordingly, commercial insurance coverages are obtained to include general liability, property and casualty, employee and automobile liability, fidelity, public official’s liability, and certain other risks. The amounts of settlements during each of the past three fiscal years have not exceeded insurance coverage.

During the year ended August 31, 2025, the College entered into a contract with an outside party
to renovate a dormitory building, which is anticipated to be completed during the year ending
August 31, 2026. Future minimum payments under this contract are $539,568, including retainage
of $78,677.
Additionally, the College has contracts with outside parties to provide the following services:
 Broadband internet access on four of the College’s campuses; beginning on February 27,
2025 and expiring on February 26, 2030.
 Broadband internet access on one of the College’s campuses; beginning on November 15,
2024 and expiring on November 15, 2027.
Future minimum payments under these contracts are as follows: 

INSERT CHART

On August 31, 2025, certain lawsuits and claims involving the College were pending. While the ultimate liability with respect to litigation and other claims asserted against the College cannot be reasonably estimated at this time, this liability, to the extent not provided for by insurance or otherwise, is not likely to have a material effect on the College.

Related party transactions for the years ended August 31, 2025 and 2024 are provided solely to comply with the Financial Responsibility, Administrative Capability, Certification Procedures, Ability To Benefit regulation promulgated by the U.S. Department of Education. The College made purchases of $1,363 and $4,987 in the normal course of business from a company owned by a member of the Board of Trustees during the years ended August 31, 2025 and 2024, respectively.

During the year ended August 31, 2024, the College received a donation comprised of five distinct parcels of land, collectively spanning approximately 7,282 acres across Taylor, Wise, Eastland, and Palo Pinto Counties, from an estate. The land was valued at $41,591,500 on the date of donation and is reported as Special Item – Capital Contribution in the statements of revenues, expenses, and changes in net position. The College holds this land for investment purposes, and it is reported as investments in real estate in the statements of net position.

The College evaluated subsequent events through December 18, 2025, the date the financial statements were available to be issued, and noted nothing requiring disclosure.

Last Ten Measurement Years

*The amounts presented above are as of the measurement date of the collective net pension liability for the respective fiscal year.

Last Ten Fiscal Years

*The amounts presented above are as of the College's respective fiscal year-end.

Employee Retirement System of Texas
State Retiree Health Plan
Last Ten Measurement Years**

*The amounts presented above are as of the measurement date of the collective net OPEB liability.
**Schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

Employee Retirement System of Texas
State Retiree Health Plan
Last Ten Fiscal Years**

*The amounts presented above are as of the College's most recent fiscal year-end.
**Schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

Defined Benefit Pension and OPEB Plans

Change of benefit terms

There were no changes of benefit terms that affected the measurement of the net pension liability during the measurement period.

Changes of benefit terms that affected the measurement of the net OPEB liability during the measurement period are described in the notes to the financial statements (Note 14).

Changes of assumptions

Changes of assumptions that affected the measurement of the net pension liability during the measurement period are described in the notes to the financial statements (Note 11).

Changes of assumptions that affected the measurement of the net OPEB liability during the measurement period are described in the notes to the financial statements (Note 14). 

For the Year Ended August 31, 2025
(With Memorandum Totals for the Year Ended August 31, 2024)

In accordance with Education Code 56.033, $105,687 and $125,021 for years August 31, 2025 and 2024, respectively, of tuition was set aside for Texas Public Education Grants (TPEG).

For the Year Ended August 31, 2025
(With Memorandum Totals for the Year Ended August 31, 2024)

For the Year Ended August 31, 2025

To the Board of Regents

Ranger College District

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the business-type activities and the discretely presented component unit of Ranger College District (the College) as of and for the year ended August 31, 2025, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements, and have issued our report thereon dated December 18, 2025.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the College’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control. Accordingly, we do not express an opinion on the effectiveness of the College’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the College’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

We have performed tests designed to verify the College’s compliance with the requirements of the Public Funds Investment Act. During the year ended August 31, 2025, no instances of noncompliance were noted.

Purpose of This Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Snow Garrett Williams

December 18, 2025 

Section I - Summary of Auditor’s Results

Financial Statements

Type of auditor’s report issued: unmodified

Internal control over financial reporting:
Material weakness(es) identified? no
Significant deficiencies identified that are not considered to be material weaknesses? none reported

Noncompliance material to financial statements noted? no

Federal and State Awards

Internal control over major programs:
Material weakness(es) identified? no
Significant deficiencies identified that are not considered to be material weaknesses? none reported

Type of auditor’s report issued on compliance for major programs: unmodified

Any audit findings disclosed that are required to be reported in accordance with 2 CFR section 200.516(a)? no

Identification of Major Programs:

Federal Awards
U.S. Department of Education:
Student Financial Assistance Cluster of Programs:
ALN 84.007 Federal Supplemental Education Opportunity Grant
ALN 84.033 Federal College Workstudy Program
ALN 84.063 Federal Pell Grant Program
ALN 84.268 Federal Direct Student Loans

State Awards
Skills Development Fund Grant

Dollar threshold used to distinguish between Type A and Type B programs:
$ 750,000

Auditee qualified as a low-risk auditee? yes

Section II – Financial Statement Findings

None Noted

 Section III – Federal and State Award Findings and Questioned Costs

None Noted

To the Board of Regents
Ranger College District

Report on Compliance for Each Major Federal and State Program Opinion on Each Major Federal and State Program

We have audited Ranger College District’s (the College) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement and the Texas Grant Management Standards that could have a direct and material effect on each of the College’s major federal and state programs for the year ended August 31, 2025. The College’s major federal and state programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the College complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal and state programs for the year ended August 31, 2025.

Basis for Opinion on Each Major Federal and State Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); and the Texas Grant Management Standards (TxGMS). Our responsibilities under those standards and the Uniform Guidance and TxGMS are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the College and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal and state program. Our audit does not provide a legal determination of the College’s compliance with the compliance requirements referred to above.

Responsibilities Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the College’s federal and state programs.

Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the College’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, the Uniform Guidance, and TxGMS will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the College’s compliance with the requirements of each major federal and state program as a whole.

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, the Uniform Guidance, and TxGMS, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the College’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of the College’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance and TxGMS, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal or state program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance and TxGMS. Accordingly, this report is not suitable for any other purpose.

Snow Garrett Williams

December 18, 2025

For the Year Ended August 31, 2025

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Notes to Schedule

Note 1: Federal Assistance Reconciliation

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Note 2: Significant Accounting Policies used in Preparing the Schedule.

The expenditures included in the schedule are reported for the College's fiscal year. Expenditure reports to funding agencies are prepared on the award period basis. The expenditures reported above represent funds which have been expended by the College for the purposes of the award. The expenditures reported above may not have been reimbursed by the funding agencies as of the end of the fiscal year. Some amounts reported in the schedule may differ from amounts used in the preparation of the basic financial statements. Separate accounts are maintained for the different awards to aid in the observance of limitations and restrictions imposed by the funding agencies. The College has followed all applicable guidelines issued by various entities in the preparation of the schedule. The College has elected to use the 10% de minimis cost rate as permitted in the Uniform Guidance, section 200.414.

Note 3: Student Loans Processed and Administrative Costs Recovered

 

Schedule of Expenditures of State Awards
For the Year Ended August 31, 2025

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Notes to Schedule

Note 1: State Assistance Reconciliation

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Note 2: Significant Accounting Policies Used in Preparing the Schedule

The accompanying schedule is presented using the accrual basis of accounting. See Note 2 to the financial statements for the College's significant accounting policies. These expenditures are reported on the College's fiscal year. Expenditure reports to funding agencies are prepared on the award period basis.