The U.S. Justice Department last week approved the Texas Education Agency’s decision to install a new superintendent and board of managers to run the financially distressed North Forest Independent School District.

The previous week the Third Court of Appeals issued a stay of the state’s plan in order to allow the district to “present any relevant information it wishes the agency to consider before issuing a final decision.” The attorney representing the North Forest board presented no information on the district’s behalf, according to the TEA.

In August, Texas Commissioner of Education Robert Scott said the decision was due to “the district’s extensive history of deficiencies, its recent significant problems, and its current failure to consistently work cooperatively with the assigned management team.”

Two TEA staff members and two conservators have been working with the district the past few months and have been able to narrow a $17 million budget deficit to about $11 million.

In February, Standard & Poor’s lowered the underlying credit of the district two notches to BB from BBB-minus due to “severe fiscal distress.” The downgrade to speculative grade applies to about $68 million of outstanding debt.

Analysts also placed the district northeast of Houston on negative watch, citing “significant financial deterioration and the potential for [the district] to cease operations.”

North Forest operates seven elementary schools, three middle schools, two intermediate schools, and two high schools. Total enrollment is about 8,200.

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