HomeMy WebLinkAboutRes 15-01 WA Westlake Academy Fiscal Audit 2013-2014WESTLAKE ACADEMY
RESOLUTION NO. 15 -01
A RESOLUTION OF THE WESTLAKE ACADEMY BOARD OF TRUSTEES
APPROVING THE FISCAL YEAR 2013 -2014 ANNUAL AUDIT REPORT FROM
WEAVER AND TIDWELL, L.L.P.
WHEREAS, Section 7.3.6 of the Data Collection & Reporting section of the Financial
Accountability System Resource Guide Update 11.0 requires that the annual financial and
compliance report be audited by an independent auditor, and
WHEREAS, Section 7.3.6 of the Data Collection & Reporting section of the Financial
Accountability System Resource Guide Update 11.0 requires the audit report be submitted to the
Division of School Financial Audits of TEA no later than 150 days after the close of the fiscal
year, and
WHEREAS, the audit report must be approved by the Board of Trustees.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF
WESTLAKE ACADEMY:
SECTION 1: The above findings are hereby found to be true and correct and are
incorporated herein in its entirety.
SECTION 2: That the Board of Trustees of Westlake Academy hereby approves the
fiscal year 2013 -2014 annual audit report from Weaver and Tidwell, L.L.P. attached as Exhibit
"A ",
SECTION 3: If any portion of this resolution shall, for any reason, be declared invalid
by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions
hereof and the Board hereby determines that it would have adopted this Resolution without the
invalid provision.
Resolution 15 -01
Page 1 of 2
SECTION 4: That this resolution shall become effective from and after its date of
passage.
PASSED AND APPROVED BY THE BOARD OF TRUSTEES OF WESTLAKE
ACADEMY, A CHARTER SCHOOL OF THE STATE OF TEXAS, ON THE 12th DAY
OF JANUARY, 2015.
ATTEST:
Kelly ' dward;` oard Secretary
APPROVED AS TO FORM:
J /.d 1/.1
_A,- Janet '41 Bubert or
Scho 1 Attorney
Stanton Lowry,
Laura Wheat, President
Resolution 15 -01
Page 2 of 2
Exhibit A
Electronic file in Laserfiche
Res WA 15 -01
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31, 2014
Exhibit Page
Certificate of Board 1
Independent Auditor's Report 2
Management's Discussion and Analysis 5
Basic Financial Statements
Government Wide Statements:
A-1 Statement of Net Position 12
B-1 Statement of Activities 13
Governmental Fund Financial Statements:
C-1 Balance Sheet 14
C-2 Statement of Revenues, Expenditures, and Changes in Fund Balance 15
D-1 Statement of Fiduciary Net Position 16
Notes to the Basic Financial Statements 17
Required Supplementary Information
E-1 Budgetary Comparison Schedule - General Fund 29
Notes to the Required Supplementary Information 30
Combining Statements
Nonmajor Governmental Funds:
F-1 Combining Balance Sheet 31
F-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 33
Internal Control Report
Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 35
TABLE OF CONTENTS
FINANCIAL SECTION
AN INDEPENDENT MEMBER OF BAKER TILLY INTERNATIONAL WEAVER AND TIDWELL, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS 12221 MERIT DRIVE, SUITE 1400, DALLAS, TX 75251 P: 972.490.1970 F: 972.702.8321
INDEPENDENT AUDITOR'S REPORT
Board of Trustees
Westlake Academy
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund
information of Westlake Academy (the Academy), a component unit of the Town of Westlake, as
of and for the year ended August 31, 2014, and the related notes to the financial statements,
which collectively comprise the Academy's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes 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.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit 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. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors'
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements 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
entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Westlake Academy
Page 3
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the discretely presented
component unit, each major fund, and the aggregate remaining fund information of Westlake
Academy, as of August 31, 2014, and the respective changes in financial position for the year
then ended in accordance with accounting principles generally accepted in the United States of
America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and budgetary comparison information on pages 5
through 11 and 29 be presented to supplement the basic financial statements. Such information,
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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Academy's basic financial statements. The nonmajor governmental
funds combining statements are presented for the purposes of additional analysis and are not a
required part of the basic financial statements. The nonmajor governmental funds combining
statements are the responsibility of management and were derived from and relate directly to
the underlying accounting and other records used to prepare the basic financial statements.
Such 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.
Westlake Academy
Page 4
In our opinion, the nonmajor governmental funds combining and individual statements are fairly
stated in all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
January 7, 2015, on our consideration of the Academy'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 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 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 Academy's internal control over financial reporting and
compliance.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
January 7, 2015
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2014
5
This section of Westlake Academy's (the Academy) annual financial report presents our discussion
and analysis of the Academy's financial performance during the fiscal year ended August 31, 2014.
Please read it in conjunction with the Academy's financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
• On the government-wide financial statements, the assets of the Academy exceeded liabilities by
$940,049 (Net Position). This is a decrease of $52,932 for the year ended August 31, 2014.
• The Academy had $7,752,701 in expenses related to governmental activities, of which $2,833,105 of
these expenses were offset by program-specific charges for services or grants and contributions.
This is a total expense increase of $1,990,049 from the prior year.
• The General Fund reported a fund balance this year of $1,024,517, an increase of $65,277 from the
prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts: management’s discussion and analysis (this section), basic
financial statements, and required supplementary information. The basic financial statements present
different views of Academy:
• The first two statements are government-wide financial statements that provide both long-
term and short-term information about the Academy's overall financial status.
• The remaining statements are fund financial statements that focus on individual parts of the
government, reporting the Academy’s operations in more detail than the government-wide
statements.
• The governmental funds statements tell how general government services were financed in
the short term as well as what remains for future spending.
• Fiduciary fund statements provid e information about the financial relationships in which the
District acts solely as a trustee or agent for the benefit of others, to whom the resources in
question belong.
The financial statements also include notes (starting on page 17) that explain some of the information in
the financial statements and provide more detailed data. The statements are followed by a section of
required supplementary information that further explains and supports the information in the financial
statements.
The combining statements for nonmajor funds contain even more information about the Academy's
individual funds.
Figure A-1 summarizes the major features of the Academy's financial statements, including the
portion of the Academy government they cover and the types of information they contain. The
remainder of this overview section of managem ent's discussion and analysis explains the structure
and contents of each of the statements.
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2014
6
Government-wide Statements
The government-wide statements beginning on page 12, report information about the Academy as a
whole using accounting m ethods similar to those used by private-sector companies. Its primary
objecti ve is to show whether the Academy is better or worse off as a result of the year's activities.
The statement of net position includes all of the Academy's assets and liabilities. All of the current
year's revenues and expenses are accounted for in the statement of activities regardless of when
cash is received or paid.
The Academy's revenue is divided into those provided by outside parties who share the costs of
some programs, such as payments received from extracurri cular activities and grants provided by
the U.S. Department of Education to assist children with disabilities (program revenue), and general
revenue provided by donations from the public or by Texas Education Agency (TEA) in equalization
funding processes (general revenue). All the Academy's assets are reported whether they serve the
current year or future years. Liabilities are considered regardless of whether they must be paid in the
current or future years.
Scope
Entire
government(except
fiduciary funds) and the
academy's component
units
Activities of the Academy
that are not proprietary or
fiduciary
Activities of the Academy that
operate similar to private business
(i.e. self-insurance). The Academy
has no proprietary funds.
Instances in which the
Academy is the trustee or
agent for someone else's
resources
Required
Financial
Statements
Statement of Net
Position, Statement of
Activities
Balance Sheet, Statement
of Revenues,
Expenditures and Changes
in Fund Balances
Statement of Net Position,
Statement of Revenues, Expenses
and Changes in the Fund Net
Position, Statement of Cash Flows
Statement of Fiduciary
Net Position, Statement of
Changes in Fiduciary Net
Position
Accounting basis
and measurement
focus
Accrual accounting and
economic resources
focus
Modified accrual
accounting and current
financial resources focus
Accrual accounting and economic
resources focus
Accrual accounting and
economic resources focus
Types of
accountability
information
All assets and liabilities
both financial and
capital, short-term and
long-term
Only assets expected to be
used up and liabilities that
become due during the
year or soon thereafter.
No capital assets included.
All assets and liabilities both
financial and capital and short-
term and long-term
All assets and liabilities
both short-term and long-
term; the Academy's funds
do not currently include
capital assets, although
they can.
Types of
Inflow/outflow
Information
All revenues and
expenses during year,
regardless of when cash
is received or paid
Revenue for which cash is
received during or soon
after the end of the year,
expenditures when goods
or services have been
received and payment is
due during the year or
soon thereafter.
All revenues and expenses during
year, regardless of when cash is
received or paid.
All revenues and expenses
during year, regardless of
when cash is received or
paid.
Type of Statement Government-wide Governmental Funds Proprietary Funds Fiduciary Funds
Figure A-1
Major features of the Academy's Government-wide and Fund Financial Statements
The t wo government-wide statements report the Academy's net position and how it has changed. Net
position-the difference between the Academy's assets and liabilities-is one way to measure the
Academy’s financial health or position.
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2014
7
• Over time, increases or decreases in the Academy's net position are an indicator of whether its
financial health is improving or deteriorating, respectively.
• To assess the overall health of the Academy, you need to consider additional non-financial factors
such as changes in the Academy’s average daily attendance and the condition of the Academy’s
facilities.
The government-wide financial statements of the Academy include the Governmental activities. Most of
the Academy's basic services are included here, such as instruction, curriculum and staff development,
extracurricular activities, maintenance, health services and general administration. State funds, donations
and grants finance most of these activities.
Component Unit
The government-wide financial statements also present the activity of Westlake Academy Foundation, a
discretely presented component unit. The Foundation was organized exclusively for charitable and
educational purposes and provides funds to help support the Academy. During 2014, the Foundation
contributed $975,991 to the Academy to enhance educational opportunities.
Fund Financial Statements
The fund financial statements begin on page 14 and provide more detailed information about the
Academy's most significant funds, not the Academy as a whole. Funds are accounting devices that the
Academy uses to keep track of specific sources of funding and spending for particular purposes.
• Some funds are required by State law and by bond covenants.
• The Board of Trustees establishes other funds to control and manage money for particular
purposes or to show that it is properly using certain taxes and grants.
Below are the three types of funds. The Academy had only "Governmental Funds" and "Fiduciary Funds"
for the year ended August 31, 2014.
• Governmental funds-Most of the Academy's basic services are included in governmental funds,
which focus on (1) how cash and other financial assets that can readily be converted to cash flow
in and out and (2) the balances left at year-end that are available for spending. Consequently, the
governmental fund statements provide a detailed short-term view that helps you determine
whether there are more or fewer financial resources that can be spent in the near future to finance
the Academy's programs. Because this information does not encompass the additional long-term
focus of the government-wide statements, we provide additional information at the bottom of the
governmental funds statement, or on the subsequent page, that explain the relationship (or
differences) between them.
• Fiduciary fund-Some schools are the trustee, or fiduciary, for certain funds. It is also responsible
for other assets that-because of a trust arrangement-can be used only for the trust beneficiaries.
These schools are responsible for ensuring that the assets reported in these funds are used for
their intended purposes. All of these fiduciary activities are reported in a separate statement of
fiduciary net position and a statement of changes in fiduciary net position on page 16. These
activities are excluded from the school’s government-wide financial statements because they
cannot use these assets to finance their operations.
• Proprietary funds-(None at August 31, 2014). Services for which the Academy would charge
customers a fee are generally reported in proprietary funds. Proprietary funds, like the
government- wide statements, provide both long and short-term financial information.
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2014
8
Government-wide Financial Analysis
The following analysis focuses on the net position (Table A- 1), sources of revenue (Figure A-2), and
changes in net position (Table A-2) of the Academy's governmental activities. The Academy's net position
was $940,049 at August 31, 2014.
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. Net position of the Academy's governmental activities decreased from $992,981 to $940,049.
The net position was all considered unrestricted and can be used to finance day-to-day operations without
constraints established by debt covenants, enabling legislation, or other legal requirements.
This decrease in governmental net position was the net result of the following factors: (1) increase in
general revenues of $448,108 due to additional Westlake Academy Foundation donations of $82,750,
increased state funding of $448,252 because of the increase in students, and a contribution from the Town
of $282,000 for additional personnel costs and building maintenance; (2) additional local grants increased
operating grants and contributions by $672,687; and (3) increase in charges for services totaling $35,510.
Total expenses increased by $1,990,049 with the largest portion being attributed to an increase in
instruction and instructional related services because of increased staffing and supplies for the additional
students and classrooms in FY 2013-2014 and in preparation of additional staff and students, supplies,
iPads, etc. needed to prepare the three additional buildings and classrooms for FY 2014-2015.
Additionally, facilities maintenance and operations had an increase because of the extra services and
utilities needed during the summer months due to the construction. Instructional leadership also had an
increase due to the addition of an Executive Principal on March 1, 2014 and salary adjustments to other
leadership positions during the current fiscal year.
Table A-1
Westlake Academy’s Net Position
2014 2013 2014 2013
Current assets 1,273,842$ 1,135,976$ 1,595,428$ 1,397,787$
Other assets - - - -
Total Assets 1,273,842 1,135,976 1,595,428 1,397,787
Current liabilities 96,415 142,995 18,252 19,328
Non-Current liabilities 237,378 - - -
Total Liabilities 333,793 142,995 18,252 19,328
Net position:
Restricted - - 65,256 60,340
Unrestricted 940,049 992,981 1,511,920 1,318,119
Total net position 940,049$ 992,981$ 1,577,176$ 1,378,459$
Governmental Activities Component Unit
Figure A-2
Westlake Academy
Sources of Revenue for Fiscal Year 2014
2.8%
26.1%
0.0%
63.2%
7.9%Charges for Service
Operating Grants &
Contributions
Investment Earnings
State Funding
Capital Grants &
Contributions
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2014
9
Table A-2
Westlake Academy’s Change in Net Position
2014 2013 2014 2013
Revenues
Program revenues:
Charges for services 217,730$ 182,220$ -$ -$
Operating grants and
contributions 2,008,454 1,335,767 1,289,995 1,095,850
Capital grants and
contributions 606,921 - - -
General revenues:
State aid and
formula grants 4,865,214 4,416,962 - -
Investment earnings 1,450 1,594 160,453 98,550
Miscellaneous - - - -
Total revenues 7,699,769 5,936,543 1,450,448 1,194,400
Expenses
Instruction and Instructional
related 4,847,718 3,646,342 - -
Instructional leadership/
school leadership 773,664 435,003 - -
Guidance, social work,
health, transportation 355,903 303,108 - -
Food services 36,796 - - -
Extracurricular activities 181,075 125,139 - -
General administration 398,944 363,548 - -
Facilities maintenance and
operations 847,606 614,042 - -
Data processing services 193,142 160,695 - -
Community services 115,751 86,845 - -
Program/support srvices 1,251,731 1,077,457
Capital outlay - 27,930 - -
Debt service 2,102 - - -
Total expenses 7,752,701 5,762,652 1,251,731 1,077,457
Change in net position (52,932) 173,891 198,717 116,943
Beginning net position 992,981 819,090 1,378,459 1,261,516
Ending Net position 940,049$ 992,981$ 1,577,176$ 1,378,459$
Governmental Activities Component Unit Activities
Table A-3 (below) presents the cost of each of the Academy's largest functions as well as each function's
net cost (total cost less fees generated by the activities and intergovernmental aid). The net cost reflects
what was funded by state revenues as well as local tax dollars.
• The cost of governmental activities this year was $7,752,701.
• Some of the cost was paid by those who directly benefited from the programs, $217,730 and some
of the cost was paid through grants and contributions $2,615,375.
Table A-3
Total %Total %
Change Change
2014 2013 2013-14 2014 2013 2013-14
Instruction 4,618,418$ 3,458,116$ 34%3,025,701$ 3,067,224$ -1%
School leadership 608,548 341,039 78%361,707 314,131 15%
Guidance, counseling
and evaluation services 285,173 244,900 16%216,296 231,191 -6%
General administration 398,944 363,548 10%298,381 351,193 -15%
Facilities Maintenance
and operations 847,606 614,042 38%588,684 609,646 -3%
Data processing services 193,142 160,695 20%133,479 152,723 -13%
Total Cost of Services Net Cost of Services
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2014
10
General Fund Budgetary Highlights
Over the course of the year, the Academy revised its budget by increasing revenues by $423,416 and
increasing expenditures by $470,904. The increase in revenues was due primarily to an increase in State
funding of $231,000 as well as an increase in revenues received from Westlake Academy Foundation of
approximately $192,000.
The expenditure increase of $470,904 is primarily attributable to $152,000 additional personnel costs for
increased staffing levels, i.e. additional special education aids, increase in salaries, as well as employment
of an Executive Principal for six months, $40,000 cost related to the Executive Principal search and an
additional $256,000 expenditure related to the one-to-one device initiative (lease purchase offset in other
financing sources).
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
General Fund revenues are budgeted to increase approximately 13% over FY 2013-2014 actual revenues.
The $885,756 rise is primarily due to the addition of approximately 100 students bringing the Academy
closer to its full capacity at 855 students.
Amounts available for appropriation in the General Fund budget are $7,554,617, an increase of 12% over
the final FY 2013-2014 expenditures of $6,733,873. The major portion of this total $820,744 increase is
attributed to the following service-level adjustments:
Salary Related Expenditures Approximately: $500,000
Desired Outcome: High Student Achievement
In FY 2014/15 we will have 91.8 full-time equivalent employees (FTE’s), an increase of 14.62 FTE’s.
The increase in expenditures is the result of a combination of adding new positions, the years of
experience of our new teachers, an increase in unemployment insurance and other employer
contributions, as well as the increased cost associated with staffing. With the addition of approximately
100 new students, staffing increases were necessary. Approximately $149,743 is related to the 2%
salary increase.
Professional & Contracted Services Approximately: $120,000
Desired Outcome: High Student Achievement
Professional and contracted services rendered to the Academy by firms, individuals, and other
organizations. The major portion of this increase is related to the three additional buildings that were
put into service for FY 2014-2015.
Supplies & Materials Approximately: $50,000
Desired Outcomes: Effective Educators & Staff – High Student Achievement
Supplies and materials costs are associated with consumables that are used in the classroom,
maintenance of the campus, books, iPads, testing materials, furniture, and classroom supplies. The
major increase is related to additional building supplies and students.
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2014
11
Other Operating Costs Approximately: $73,000
Desired Outcome: Effective Educators & Staff – High Student Achievement
Other operating costs are associated with insurance, professional development, travel, membership
fees and dues, graduations expenses, and miscellaneous costs. Staff development and Facility and
Maintenance make up the majority of this increase.
Debt Service Costs Approximately: 78,000
Desired Outcome: Effective Educators & Staff – High Student Achievement
Represents the iPad Lease Payments
If the FY 2014-15 budget estimates are realized, the Academy’s General Fund’s budgetary fund balance
is expected to decrease by $108,720 by the close of FY 2015.
CONTACTING THE ACADEMY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors
with a general overview of the Academy's finances and to demonstrate the Academy's accountability for
the money it receives. If you have questions about this report or need additional financial information,
contact the Academy/Town Finance Director, Debbie Piper, at 817-490-5712, or by writing to 3 Village
Circle, Suite 202, Westlake, Texas 76262.
BASIC FINANCIAL STATEMENTS
EXHIBIT A-1
WESTLAKE ACADEMY
STATEMENT OF NET POSITION
AUGUST 31, 2014
The Notes to Financial Statements are
an integral part of this statement.
12
Data
Control
Codes 1 4
Governmental Component
Activities Unit
ASSETS
1110 Cash and cash equivalents 866,150$ 298,480$
1120 Current investments 100 1,265,114
1240 Due from other governments 312,185 -
1290 Other receivables 18,107 28,267
1410 Prepaid expenses 77,300 3,567
1000 Total assets 1,273,842 1,595,428
LIABILITIES
2110 Accounts payable 70,544 18,252
2150 Payroll deductions and withholdings 2,675 -
2160 Accrued wages payable 10,422 -
2180 Due to other governments 12,540 -
2200 Other accrued expenses 234 -
Noncurrent liabilities:
2501 Due within one year 83,031 -
2502 Due in more than one year 154,347 -
2000 Total liabilities 333,793 18,252
NET POSITION
3890 Restricted for other purposes - 65,256
3900 Unrestricted 940,049 1,511,920
3000 Total net position 940,049$ 1,577,176$
EXHIBIT B-1
WESTLAKE ACADEMY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED AUGUST 31, 2014
The Notes to Financial Statements are
an integral part of this statement.
13
1 3 4 5 6 9
Primary
Data Operating Capital Government
Control Charges for Grants and Grants and Governmental Component
Codes Expenses Services Contributions Contributions Activities Unit
PRIMARY GOVERNMENT:
Governmental Activities:
11 Instruction 4,618,418$ 51,283$ 1,187,680$ 353,754$ (3,025,701)$
12 Instructional resources and media services 80,944 1,638 14,046 23,060 (42,200)
13 Curriculum and staff development 148,356 2,909 134,038 - (11,409)
21 Instructional leadership 165,116 895 39,229 - (124,992)
23 School leadership 608,548 2,994 232,374 11,473 (361,707)
31 Guidance, counseling, and evaluation services 285,173 1,531 64,507 2,839 (216,296)
33 Health services 70,730 335 15,253 8,840 (46,302)
35 Food service 36,796 3,000 - 36,796 3,000
36 Extracurricular activities 181,075 137,035 23,993 28,814 8,767
41 General administration 398,944 10,595 80,697 9,271 (298,381)
51 Facilities maintenance and operations 847,606 3,977 140,706 114,239 (588,684)
53 Data processing services 193,142 960 42,624 16,079 (133,479)
61 Community services 115,751 578 33,307 1,756 (80,110)
71 Debt service - interest 2,102 - - - (2,102)
[TP] Total primary government:7,752,701$ 217,730$ 2,008,454$ 606,921$ (4,919,596) -
COMPONENT UNIT
IC Westlake Academy Foundation 1,251,731$ -$ 1,289,995$ -$ - 38,264
Data
Control
Codes General Revenues:
SF State aid-formula grants 4,865,214 -
IE Investment earnings 1,450 160,453
TR Total general revenues 4,866,664 160,453
CN Change in net position (52,932) 198,717
NB Net position, beginning 992,981 1,378,459
NE Net position, ending 940,049$ 1,577,176$
Net (Expense) Revenue and
Changes in Net PositionProgram Revenues
EXHIBIT C-1
WESTLAKE ACADEMY
BALANCE SHEET
GOVERNMENTAL FUNDS
AUGUST 31, 2014
The Notes to Financial Statements are
an integral part of this statement.
14
10 98
Data HF-Leadership State Nonmajor Total
Control HF-Curriculum and Textbook Governmental Governmental
Codes General Director Development Fund Funds Funds
ASSETS
1110 Cash and cash equivalents 712,366$ -$ 100,376$ -$ 53,408$ 866,150$
1120 Current investments 100 - - - - 100
1240 Due from other governments 263,330 - - 48,855 - 312,185
1260 Due from other funds 48,855 - - - - 48,855
1290 Other receivables 18,107 - - - - 18,107
1410 Prepaid expenditures 70,050 - 7,250 - - 77,300
1000 Total assets 1,112,808$ -$ 107,626$ 48,855$ 53,408$ 1,322,697$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
LIABILITIES:
2110 Accounts payable 62,714$ -$ 7,420$ -$ 410$ 70,544$
2150 Payroll deductions and withholdings 2,675 - - - - 2,675
2160 Accrued wages payable 10,134 - - - 288 10,422
2170 Due to other funds - - - 48,855 - 48,855
2180 Due to other governments 12,540 - - - - 12,540
2200 Accrued expenditures 228 - - - 6 234
2000 Total liabilities 88,291 - 7,420 48,855 704 145,270
DEFERRED INFLOWS OF RESOURCES:
2601 Unavailable grant funds - - 100,206 - 5,923 106,129
2600 Total deferred inflows of resources - - 100,206 - 5,923 106,129
FUND BALANCES (DEFICITS):
3430 Nonspendable - prepaid items 70,050 - 7,250 - - 77,300
3545 Committed - other - - - 46,781 46,781
3600 Unassigned 954,467 - (7,250) - - 947,217
3000 Total fund balances (deficits)1,024,517 - - - 46,781 1,071,298
4000 Total liabilities, deferred inflows
of resources and fund balances 1,112,808$ -$ 107,626$ 48,855$ 53,408$ 1,322,697$
Total fund balances governmental funds 1,071,298$
Amounts reported for governmental activities in the statement of net position are different because:
Amounts reported as deferred inflows of resources in the governmental funds financial statements are recognized
as revenue in the government-wide financial statements under the accrual basis of accounting.106,129
Capital leases payable are not due and payable in the current period and therefore
are not reported in the governmental funds financial statements.(237,378)
Net position of governmental activities 940,049$
EXHIBIT C-2
WESTLAKE ACADEMY
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31, 2014
The Notes to Financial Statements are
an integral part of this statement.
15
10 98
Data HF-Leadership State Nonmajor Total
Control HF-Curriculum and Textbook Governmental Governmental
Codes General Director Development Fund Funds Funds
REVENUES
5700 Local and intermediate sources 1,369,833$ 68,748$ 24,794$ -$ 173,600$ 1,636,975$
5800 State program revenues 5,190,308 2,728 - 76,605 - 5,269,641
5900 Federal program revenues - - - - 80,103 80,103
5020 Total revenues 6,560,141 71,476 24,794 76,605 253,703 6,986,719
EXPENDITURES
0011 Instruction 4,017,952 - 1,730 76,605 168,377 4,264,664
0012 Instructional resources and media services 56,552 - - - 1,332 57,884
0013 Curriculum and staff development 75,493 38,760 11,345 - 22,758 148,356
0021 Instructional leadership 165,116 - - - - 165,116
0023 School leadership 552,170 32,716 11,719 - 470 597,075
0031 Guidance, counseling, and evaluation services 282,334 - - - - 282,334
0033 Health services 61,890 - - - - 61,890
0036 Extracurricular activities 121,840 - - - 30,421 152,261
0041 General administration 379,868 - - - 9,805 389,673
0051 Facilities maintenance and operations 733,367 - - - - 733,367
0053 Data processing services 177,063 - - - - 177,063
0061 Community services 106,495 - - - 7,500 113,995
0072 Debt service 3,733 - - - - 3,733
6030 Total expenditures 6,733,873 71,476 24,794 76,605 240,663 7,147,411
1100 EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (173,732) - - - 13,040 (160,692)
OTHER FINANCING SOURCES (USES)
7913 Capital lease proceeds 239,009 - - - - 239,009
Total other financing sources 239,009 - - - - 239,009
1200 NET CHANGE IN FUND BALANCES 65,277 - - - 13,040 78,317
0100 FUND BALANCES, BEGINNING 959,240 - - - 33,741 992,981
3000 FUND BALANCES (DEFICITS), ENDING 1,024,517$ -$ -$ -$ 46,781$ 1,071,298$
Net change in fund balances 78,317$
Amounts reported for governmental activities in the Statement of Activities are different because:
Current year capital lease proceeds are other financing sources in the governmental funds
financial statements, but are shown as an increase in liabilities in the government-wide
financial statements. (239,009)
Receipts that are considered deferred inflows of resources in the governmental funds financial statements
are recognized as revenue in the government-wide financial statements under the accrual basis of accounting.106,129
Current year principal payments on capital leases consume current resources, however,
these payments reduce liabilities in the government-wide financial statements.1,631
Change in net position of governmental activities (52,932)$
EXHIBIT D-1
WESTLAKE ACADEMY
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
AUGUST 31, 2014
The Notes to Financial Statements are
an integral part of this statement.
16
Agency
Fund
ASSETS
Cash and cash equivalents 63,578$
Prepaid expenses 1,150
Total assets 64,728$
LIABILITIES
Accounts payable 165$
Due to student groups 64,563
Total liabilities 64,728$
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
17
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
Westlake Academy (the Academy), a blended component unit of the Town of Westlake (the
Town), is a Texas nonprofit Corporation under Chapter 12, Subchapter D of the Education Code
to provide education. The Board of Trustees (the Board) consists of six trustees and is appointed
by the Town's governing body. Currently, all members of the Board are members of the Town's
governing body. The Academy prepares its basic financial statements in conformity with generally
accepted accounting principles promulgated by the Governmental Accounting Standards Board
(the GASB) and other authoritative sources identified in Statement on Auditing Standards No. 69
of the American Institute of Certified Public Accountants; and it complies with the requirements of
the appropriate version of Texas Education Agency's Financial Accountability System Resource
Guide (the Resource Guide) and the requirements of contracts and grants of agencies from which
it receives funds.
The Board is appointed by the governing Council of the Town and it has the authority to make
decisions, appoint administrators and managers, and significantly influence operations. It also
has the primary accountability for fiscal matters. Therefore, the Academy is a financial reporting
entity as defined by the GASB in its Statement No.14, "The Financial Reporting Entity" as
modified by GASB Statement No. 61.
The Academy's basic financial statements include a separate entity that is controlled by or
dependent on the Academy. The determination to include separate entities is based on the
criteria of GASB Statement No. 14, 'The Financial Reporting Entity" as amended by GASB
Statement No. 39, "Determining Whether Certain Organizations Are Component Units" and
GASB Statement No. 61, "The Financial Reporting Entity Omnibus." GASB defines the reporting
entity as the primary government and those component units for which the primary government is
financially accountable. To be financially accountable, a voting majority of the component unit's
ruling body must be appointed by the primary government, and either (a) the primary government
must be able to impose its will, or (b) the primary government may potentially benefit financially or
be financially responsible for the component unit.
The Westlake Academy Foundation (the Foundation) is a 501(c)(3) nonprofit organization which
was established exclusively for the purpose of supporting the Academy. This includes fundraising
for and contributing raised funds to the Academy. The Foundation has been discretely presented
in the accompanying financial statements and reported in a separate column to emphasize that it
is legally separate from the Academy. See Note 4 for additional information relating to the
Foundation. Separate audited financial statements of the Foundation are available from the
Academy/Town Finance Director's office, 3 Village Circle, Suite 202, Westlake, Texas 76262.
Government-wide and Fund Financial Statements
The Statement of Net Position and the Statement of Activities are government-wide financial
statements. They report information on all of the Academy's nonfiduciary activities with most of
the interfund activities removed. Governmental activities include programs supported primarily by
state and federal grants, the Foundation, and the Town. The Academy has no business-type
activities that rely to a significant extent, on fees and charges for support.
Neither fiduciary funds nor component units that are fiduciary in nature are included.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
18
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Government-wide and Fund Financial Statements – Continued
The Statement of Activities demonstrates how other people or entities that participate in programs
the Academy operates have shared in the payment of the direct costs. Direct expenses are those
that are clearly identifiable with a specific function or segment. The "charges for services" column
includes payments made by parties that purchase, use, or directly benefit from goods or services
provided by a given function or segment of the Academy. The primary example is school lunch
charges. The "grants and contributions" column includes amounts paid by organizations outside
the Academy to help meet the operational or capital requirements of a given function. Examples
include grants under the Elementary and Secondary Education Act. If revenue is not program
revenue, it is general revenue used to support all of the Academy's functions.
Interfund activities between governmental funds appear as due to/ due from on the Governmental
Fund Balance Sheet and as other resources and other uses on the Governmental Fund
Statement of Revenues, Expenditures and Changes in Fund Balance. All interfund transactions
between governmental funds are eliminated on the government-wide statements.
The fund financial statements provide reports on the financial condition and results of operations
for three fund categories: governmental, proprietary, and fiduciary. Since the resources in the
fiduciary funds cannot be used for Academy operations, they are not included in the government-
wide statements. The Academy considers some governmental funds major and reports their
financial condition and results of operations in a separate column.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenue is recorded when earned and
expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements use the current financial resources measurement focus
and the modified accrual basis of accounting. With this measurement focus, only current assets,
current liabilities and fund balances are included on the balance sheet. Operating statements of
these funds present net increases and decreases in current assets (i.e. revenues and other
financing sources and expenditures and other financing uses).
The modified accrual basis of accounting recognizes revenues in the accounting period in which
they become both measurable and available and it recognizes expenditures in the accounting
period in which the fund liability is incurred, if measurable. The expenditures related to certain
compensated absences and claims and judgments are recognized when the obligations are
expected to be liquidated with expendable available financial resources. The Academy considers
all revenues available if they are collectible within 60 days after year-end.
Miscellaneous revenues are recorded as revenue when received in cash because they are
generally not measurable until actually received. Investment earnings are recorded as earned,
since they are both measurable and available.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
19
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Measurement Focus, Basis of Accounting and Financial Statement Presentation – Continued
Grant funds are considered to be earned to the extent of expenditures made under the provisions
of the grant. Accordingly, when such funds are received, they are recorded as deferred inflows
until related and authorized expenditures have been made. If balances have not been expended
by the end of the project period, grantors sometimes require the Academy to refund all or part of
the unused amount.
The proprietary fund types and fiduciary funds are accounted for on a flow of economic resources
measurement focus and utilize the accrual basis of accounting. This basis of accounting
recognizes revenues in the accounting period in which they are earned and become measurable
and expenses in the accounting period in which they are incurred and become measurable. The
Academy applies all GASB pronouncements. With this measurement focus, all assets and all
liabilities associated with the operation of these funds are included on the Fund Statement of Net
Position. The net position is segregated into restricted net position, and unrestricted net position.
Fund Accounting
The Academy reports the following major governmental funds:
The General Fund is the Academy's primary operating fund. It accounts for all financial
resources except those required to be accounted for in another fund.
The HF-Curriculum Director Fund is a special revenue grant from the M.R. and Evelyn
Hudson Foundation that provides for the role of a Director of Curriculum and Instruction
primarily for the 2014-15 school year. This grant's success will be defined as a measurable
positive impact on students, teachers, and the culture at Westlake Academy.
The HF-Leadership and Development Fund is a special revenue grant received from the
Hudson Foundation in the amount of $125,000 to be utilized to support the overall
programming for the Westlake Academy students in an effort to maximize personal potential
of every student. The funds will support a portion of the Middle Years Program (MYP)
Principal’s salary, Strengthfinders training for leadership and staff of Westlake Academy and
training for Executive Principal/Director of Education. Remaining funds will be used at the
discretion of the MYP Principal.
The State Textbook Fund is used to account, on a project basis, for funds awarded to
school districts under the textbook allotment.
Additionally, the Academy reports the following fund types:
Nonmajor Governmental Funds:
These nonmajor Special Revenue Funds account for resources restricted to, or designated
for, specific purposes by the Academy or a grantor in a Special Revenue Fund. Most federal
and some state financial assistance is accounted for in a Special Revenue Fund and
sometimes unused balances must be returned to the grantor at the close of specified project
period.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
20
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Fund Accounting – Continued
Fiduciary Funds:
Agency Funds account for resources held for others in a custodial capacity. Fiduciary funds
are reported in the fiduciary fund financial statements. However, because these assets are
not available to support Academy programs, these funds are not included in the government-
wide statements. The Academy's Agency Fund is a Student Activity Fund.
Other Accounting Policies
1. The State of Texas (the State) has created a state minimum personal leave program
consisting of five days per year personal leave with no limit on accumulation and
transferability among districts shall be provided for school district employees. Each District's
local Board is required to establish a personal leave plan. It is the Academy's policy to permit
some employees to accumulate earned but unused state and local personal leave pay
benefits. There is no liability for unpaid accumulated personal leave since the Academy does
not have a policy to pay any amounts when employees separate from service with the
government.
2. The Data Control Codes refer to the account code structure prescribed by the Texas
Education Agency (TEA) in the Financial Accountability System Resource Guide. TEA
requires the Academy to display these codes in the financial statements filed with the Agency
in order to insure accuracy in building a statewide database for policy development and
funding plan.
3. When an expenditure is incurred for purposes for which both restricted or unrestricted fund
balance is available, the Academy considers restricted funds to have been spent first. When
an expenditure is incurred for which committed, assigned, or unassigned fund balances are
available, the Academy considers amounts to have been spent first out of committed funds,
then assigned funds, and finally unassigned funds.
4. For purposes of the statement of cash flows for proprietary and similar fund types, the
Academy considers highly liquid investments to be cash equivalents if they have a maturity of
three months or less when purchased.
5. The governmental fund financial statements present fund balances based on classifications
that comprise a hierarchy that is based primarily on the extent to which the Academy is
bound to honor constraints on the specific purposes for which amounts in the respective
governmental funds can be spent. The classifications used in the governmental fund financial
statements are as follows:
• Nonspendable: This classification includes amounts that cannot be spent because they
are either (a) not in spendable form or (b) are legally or contractually required to be
maintained intact.
• Restricted: This classification includes amounts for which constraints have been placed
on the use of the resources either (a) externally imposed by creditors, grantors,
contributors, or laws or regulations of other governments, or (b) imposed by law through
constitutional provisions or enabling legislation.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
21
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Other Accounting Policies – Continued
• Committed: This classification includes amounts that can be used only for specific
purposes pursuant to constraints imposed by board resolution of the School Board, the
Academy's highest level of decision making authority. These amounts cannot be used for
any other purpose unless the School Board removes or changes the specified use by
taking the same type of action that was employed when the funds were initially
committed. This classification also includes contractual obligations to the extent that
existing resources have been specifically committed for use in satisfying those
contractual requirements.
• Assigned: This classification includes amounts that are constrained bv the Academy's
intent to be used for a specific purpose but are neither restricted nor committed. This
intent can be expressed by the School Board.
• Unassigned: This classification includes the residual fund balance for the General Fund.
The unassigned classification also includes negative residual fund balance of any other
governmental fund that cannot be eliminated by offsetting of assigned fund balance
amounts.
6. Net position represents the difference between assets and liabilities. Net position is reported
as restricted when there are limitations imposed on its use either though the enabling
legislations adopted by the Academy or through external restrictions imposed by creditors,
grantors of laws or regulations of other governments.
7. The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
8. Sometimes the Academy will fund outlays for a particular purpose from both restricted (e.g.
grant proceeds) and unrestricted resources. In order to calculate the amounts to report as
restricted net position and unrestricted net position in the government-wide financial
statements, a flow assumption must be made about the order in which the resources are
considered to be applied. It is the Academy's policy to consider restricted net position to have
been depleted before unrestricted net position is applied.
NOTE 2. DETAILED NOTES ON ALL FUNDS
Cash and Investments
The funds of the Academy must be deposited and invested under the terms of a contract,
contents of which are set out in the Depository Contract Law. The depository bank places
approved pledged securities for safekeeping and trust with the Academy's agent bank in an
amount sufficient to protect Academy funds on a day-to-day basis during the period of the
contract. The pledge of approved securities is waived only to the extent of the depository bank's
dollar amount of Federal Deposit Insurance Corporation (FDIC) insurance.
At August 31, 2014, the carrying amount of the Academy's deposits (cash, certificates of deposit,
and interest-bearing savings accounts included in temporary investments), including $63,578
recorded in the Agency fund, was $929,728 and the bank balance was $1,006,949. The carrying
amount of the Foundation’s deposits was $298,480 as of August 31, 2014 and the bank balance
was $306,060. The District cash deposits at August 31, 2014 and during the year then ended was
entirely covered by FDIC insurance or by pledged collateral held by the Academy’s agent bank in
the Academy’s name.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
22
NOTE 2. DETAILED NOTES ON ALL FUNDS – CONTINUED
Cash and Investments – Continued
The following is disclosed regarding the combined balances on the date of highest deposit:
a. Depository: First Financial Bank
b. The Market value of securities pledged as of the date of the highest combined balance on
deposit was $25,691,589.
c. The highest combined balances of cash, savings, and time deposit accounts amounted to
$594,732 on November 22, 2013.
d. Total amount of FDIC coverage at the time of the highest combined balance was $250,000.
The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions
in the areas of investment practices, management reports and establishment of appropriate
policies. Among other things, it requires the Academy to adopt, implement, and publicize an
investment policy. That policy must address the following areas: (1) safety of principal and
liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5)
expected rates of return, (6) maximum allowable stated maturity of portfolio investments, (7)
maximum average dollar-weighted maturity allowed based on the stated maturity date for the
portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for
certificates of deposit. Statutes authorize the Academy to invest in (1) obligations of the U. S.
Treasury, certain U. S. agencies, and the State of Texas; (2) certificates of deposit, (3) certain
municipal securities, (4) money market savings accounts, (5) repurchase agreements, (6)
bankers acceptances, (7) mutual funds, (8) investment pools, (9) guaranteed investment
contracts, and (10) common trust funds. The Act also requires the Academy to have independent
auditors perform test procedures related to investment practices as provided by the Act. The
Academy is in substantial compliance with the requirements of the Act and with local policies.
The carrying value of the Academy’s investments at August 31, 2014, was $100, which were
deposited in TexPool (a Texas Local Government Investment Pool). Local government
investment pools operate in a manner consistent with the SEC's Rule 2a7 of the Investment
Company Act of 1940. Local government investment pools use amortized cost rather than market
value to report net assets to compute share prices. Accordingly, the fair value of the position of
these pools is the same as the value of the shares in each pool.
TexPool is organized in conformity with the Interlocal Cooperation Act, Chapter 791 of the Texas
Government Code, and the Public Funds Investment Act. Chapter 2256 of the Texas Government
Code. The Texas Comptroller of Public Accounts is the sole officer, director and shareholder of
the Texas Treasury Safekeeping Trust Company, which is authorized to operate TexPool. In
addition, the TexPool Advisory Board advises on TexPool’s Investment Policy. This Board is
composed equally of participants in TexPool and other persons who do not have a business
relationship with TexPool who are qualified to advise TexPool. TexPool is subject to annual
review by an independent auditor consistent with the Public Funds Investment Act. In addition,
TexPool is subject to review by the State Auditor's office and by the Internal Auditor of the
Comptroller's office.
The Foundation’s entire investment balance as of August 31, 2014 consisted of marketable equity
securities with a cost of $1,228,145 and a fair value of $1,265,114.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
23
NOTE 2. DETAILED NOTES ON ALL FUNDS – CONTINUED
Cash and Investments – Continued
In compliance with the Public Funds Investment Act. the Academy has adopted a deposit and
investment policy. That policy does address the following risks:
1 Custodial Credit Risk-Deposits: This is the risk that in the event of bank failure, the
Academy's deposits may not be returned to it. As of August 31, 2014, the Academy’s
deposits with financial institutions in excess of federal depository insurance were fully
collateralized.
2. Custodial Credit Risk-Investments: This is the risk that, in the event of the failure of the
counterparty, the Academy will not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party. Investments are subject to custodial
credit risk only if they are evidenced by securities that exist in physical or book entry form.
Thus positions in external investment pools are not subject to custodial credit risk because
they are not evidenced by securities that exist in physical or book entry form.
3. Other Credit Risk: There is the risk that an issuer or other counterparty to an investment will
not fulfill its obligations. To minimize credit risk, TexPool invests only in investments
authorized under the Public Funds Investment Act. As of August 31, 2014, TexPool’s
investments credit quality rating was AAAm (Standard & Poor's).
Due from Other Governments
The Academy participates in a variety of state and local programs from which it receives grants to
partially or fully finance certain activities. Amounts due from federal and local governments as of
August 31, 2014, are summarized below.
State
Fund Entitlements Local Total
General 261,045$ 2,285$ 263,330$
State Textbook 48,855 - 48,855
Total 309,900$ 2,285$ 312,185$
Donated Use of Facilities
The Academy currently operates in facilities that are capital assets of the Town. The Academy is
not required by the Town to pay rent for the use of those facilities; however, the Academy
recognizes the value of the use received, $606,921, in the government-wide statement of
activities as capital grants and contributions and as expense allocated to the various functions.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
24
NOTE 2. DETAILED NOTES ON ALL FUNDS – CONTINUED
Interfund Balances and Activities
Interfund balances at August 31, 2014, consisted of the following individual fund balances:
Due to Fund Due from Fund Amount Purpose
General fund State Textbook 48,855$ Reimburse program disbursements
Total 48,855$
The Academy had no interfund transfers for the year ending August 31, 2014.
Deferred Inflows of Resources
During 2014, the Academy implemented GASB Statement No. 65, “Items Previously Reported as
Assets and Liabilities.” As a result, the Academy has reported certain items as deferred inflows of
resources that consist primarily of grants received to be used in the subsequent fiscal year.
Revenue from Local and Intermediate Sources
During the current year, revenues from local and intermediate sources as reported on Exhibit C-2
of the fund statements consisted of the following:
HF-Leadership
HF-Curriculum and Non-major
General Fund Director Development Funds Total
Gifts and bequests 1,235,971$ 68,748$ 24,794$ 130,139$ 1,459,652$
Interest 1,450 - - - 1,450
Food sales 3,000 - - - 3,000
Campus activities - - - 43,461 43,461
Parking/transportation 36,890 - - - 36,890
Athletics 56,023 - - - 56,023
Miscellaneous 36,499 - - - 36,499
Total 1,369,833$ 68,748$ 24,794$ 173,600$ 1,636,975$
Defined Benefit Pension Plan
Plan Description
Westlake Academy contributes to the Teacher Retirement System of Texas (TRS), a cost-
sharing multiple employer defined benefit pension plan. TRS administers retirement and
disability annuities, and death and survivor benefits to employees and beneficiaries of
employees of the public school systems of Texas. It operates primarily under the provisions
of the Texas Constitution, Article XVI, Sec. 67. and Texas Government Code, Title 8, Subtitle
C. TRS also administers proportional retirement benefits and service credit transfer under
Texas Government Code, Title 8, Chapters 803 and 805, respectively.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
25
NOTE 2. DETAILED NOTES ON ALL FUNDS – CONTINUED
Defined Benefit Pension Plan – Continued
Plan Description – Continued
The Texas state legislature has the authority to establish and amend benefit provisions of the
pension plan and may, under certain circumstances, grant special authority to the TRS Board
of Trustees. TRS issues a publicly available financial report that includes financial statements
and required supplementary information for the defined benefit pension plan. That report may
be obtained by downloading the report from the TRS Internet website. www.trs.state.tx.us,
under the TRS Publications heading, by calling the TRS Communications Department at
1-800-223-8778, or by writing to the TRS Communications Department, 1000 Red River
Street. Austin. Texas 78701.
Funding Policy
Contribution requirements are not actuarially determined but are established and amended
pursuant to the following state funding policy: (1) The state constitution requires the
legislature to establish a member contribution rate of not less than 6.0% of the member's
annual compensation and a state contribution rate of not less than 6.0% and not more than
10% of the aggregate annual compensation of all members of the system; (2) state statute
prohibits benefit improvements or contribution reductions, if as result of a 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.
Contribution rates and contributions for fiscal years 2012 – 2014 are shown in the table
below. These rates are set by the General Appropriations Act. In certain instances, the
reporting district is required to make all or a portion of the state's and/or member's
contribution and on the portion of the employees' salaries that exceeded the statutory
minimum.
Year Rate Amount Rate Amount
2014 6.40%278,784$ 6.8%285,794$
2013 6.40%234,574$ 6.4%220,728$
2012 6.40%224,616$ 6.0%188,014$
Member State
Contribution Rates and Contribution Amounts
Health Care Coverage
During the period ended August 31, 2014, employees of the Academy were covered by a state-
wide health care plan, TRS Active Care. The Academy's participation in this plan is renewable
annually. The Academy paid into the Plan $325 per month per employee and $250 per month
when the employee works less than 30 hours per week if eligible to enroll in TRS Active Care.
Employees, at their option, pay premiums for any coverage above these amounts as well as for
dependent coverage.
The Teacher Retirement System (TRS) manages TRS Active Care. The medical plan is
administered by Blue Cross and Blue Shield of Texas. FIRSTCARE, and Scott and White HMO.
Medco Health administers the prescription drug plan. The latest financial information on the state-
wide plan may be obtained by writing to the TRS Communications Department, 1000 Red River
Street, Austin, Texas 78701, by calling the TRS Communications Department at 1-800-223-8778,
or by downloading the report from the TRS Internet website, www.trs.state.tx.us, under the TRS
Publications heading.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
26
NOTE 2. DETAILED NOTES ON ALL FUNDS – CONTINUED
Retiree Health Plan
Plan Description
Westlake Academy contributes to the Texas Public School Retired Employees Group
Insurance Program (TRS-Care), a cost-sharing multiple-employer defined benefit
postemployment health care plan administered by the Teacher Retirement System of Texas.
TRS-Care provides health care coverage for certain persons (and their dependents) who
retired under the Teacher Retirement System of Texas. The statutory authority for the
program is Texas Insurance Code, Chapter 1575. Section 1575.052 grants the TRS Board of
Trustees the authority to establish and amend basic and optional group insurance coverage
for participants. The Teacher Retirement System of Texas issues a publicly available
financial report that includes financial statements and required supplementary information for
TRS-Care. That report may be obtained by visiting the TRS Web site at www.trs.state.tx.us
under the TRS Publications heading, by calling the TRS Communications Department at
1-800-223-8778, or by writing to the Communications Department of the Teacher Retirement
System of Texas, 1000 Red River Street, Austin, Texas 78701.
Funding Policy
Contribution requirements are not actuarially determined but are legally established each
biennium by the Texas Legislature. Texas Insurance Code, Sections 1575.202, 203, and 204
establish state, active employee, and public school contributions, respectively. Funding for
free basic coverage is provided by the program based upon public school district payroll. Per
Texas Insurance Code, Chapter 1575, the public school contribution may not be less than
0.25% or greater than 0.75% of the salary of each active employee of the public school.
Funding for optional coverage is provided by those participants selecting the optional
coverage. Contribution rates and amounts are shown in the table below for fiscal years 2012
– 2014.
Year Rate Amount Rate Amount Rate Amount
2014 0.65%28,314$ 1.00%42,028$ 0.55%23,958$
2013 0.65%23,824$ 1.00%36,652$ 0.55%20,159$
2012 0.65%22,822$ 1.00%35,111$ 0.55%19,311$
Active Member State School District
Contribution Rates
Medicare, Part D - On-behalf Payments
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which was
effective January 1, 2006, established prescription drug coverage for Medicare beneficiaries
known as Medicare Part D. One of the provisions of Medicare, Part D allows for the Texas
Public School Retired Employee Group Insurance Program (TRS-Care) to receive retiree
drug subsidy payments from the federal government to offset certain prescription drug
expenditures for eligible TRS-Care participants. These on-behalf payments of $11,605,
$9,085, and $8,203 were recognized for the years ended August 31, 2014, 2013 and 2012,
respectively, as equal revenues and expenditures.
Risk Management
The Academy is exposed to various risk of loss related to torts, theft of, damage to and
destruction of assets; errors and omissions; injuries to employees; and natural disasters for which
the Academy carries commercial insurance. There were no settlements exceeding insurance
coverage in the current fiscal year.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
27
NOTE 3. CAPITAL LEASE
The Academy has entered into a lease agreement as lessee for financing the acquisition of computer
equipment and software. The lease agreement qualifies as a capital lease for accounting purposes,
and therefore, has been recorded at the present value of its future minimum lease payments as of the
inception date.
Equipment and software with a historical cost of $239,009 was under capital lease at August 31,
2014. Because the cost of the individual item s was below the Academy’s capitalization threshold, the
entire cost was recorded as expense during the year ended August 31, 2014.
The following schedule shows the future minimum lease payments under the capitalized lease
together with the present value of the net minimum lease payments as of August 31, 2014:
Annual
Lease Payments
84,186$
84,186
84,186
Total minimum lease payments 252,558
Less: Amounts representing interest (15,180)
Present value of net minimum lease payments 237,378$
Year Ending
August 31,
2015
2016
2017
NOTE 4. WESTLAKE ACADEMY FOUNDATION
The Westlake Academy Foundation contributed $975,991 to the Academy during the fiscal year
August 31, 2014.
NOTE 5. BUDGETARY COMPLIANCE
General Fund expenditures exceeded appropriations by approximately $122,000 for the fiscal year
ended August 31, 2014. This deficiency was caused by a clerical error which inadvertently deleted
approximately $257,000 of appropriations for TRS On-Behalf payments that were included in the
original budget. No unbudgeted cash disbursements were made as a result of this issue.
NOTE 6. EVALUATION OF SUBSEQUENT EVENTS
The Academy has evaluated subsequent events through January 7, 2015, the date which the
financial statements were available to be issued.
WESTLAKE ACADEMY
NOTES TO THE FINANCI AL STATEMENTS
28
NOTE 7. NEW ACCOUNTING PRONOUNCEMENTS
The GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions, which will be
effective for periods beginning after June 14, 2014. The objective of this Statement is to improve
accounting and financial reporting of state and local governmental pension plans. This Statement
applies to all state and governmental entities and replaces Statements 27 and 50. The Academy will
evaluate the impact of the standard on its financial statements and will take necessary steps to
implement it.
The GASB issued Statement No. 69, Governmental Combinations and Disposals of Government
Operations, which will be effective for periods beginning after December 15, 2013. The objective of
this Statement is to establish accounting and financial reporting standards related to government
combinations and disposals of government operations. T he Academy will evaluate the impact of the
standard on its financial statements and will take the necessary steps to implement it.
REQUIRED SUPPLEMENTARY INFORMATION
WESTLAKE ACADEMY EXHIBIT E-1
BUDGETARY COMPARISON SCHEDULE – GENERAL FUND
FOR THE YEAR ENDED AUGUST 31, 2014
29
Actual Variance With
Data Amounts Final Budget
Control GAAP BASIS Positive or
Codes Original Final (Negative)
REVENUES
5700 Local and intermediate sources $1,409,450 $1,601,450 $1,369,833 $(231,617)
5800 State program revenues 4,802,607 5,034,023 5,190,308 156,285
5020 Total revenues 6,212,057 6,635,473 6,560,141 (75,332)
EXPENDITURES
CURRENT:
0011 Instruction 3,513,062 3,854,828 4,017,952 (163,124)
0012 Instructional resources and media services 60,785 64,839 56,552 8,287
0013 Curriculum and staff development 75,170 69,500 75,493 (5,993)
0021 Instructional leadershp 185,339 202,478 165,116 37,362
0023 School leadership 456,515 552,220 552,170 50
0031 Guidance, counseling, and evaluation services 238,786 280,679 282,334 (1,655)
0033 Health services 58,620 63,634 61,890 1,744
0035 Food services 15,116 - - -
0036 Extracurricular activities 161,087 134,399 121,840 12,559
0041 General administration 362,289 379,275 379,868 (593)
0051 Facilities maintenance and operations 674,110 725,907 733,367 (7,460)
0053 Data processing services 247,721 177,767 177,063 704
0061 Community services 92,089 99,662 106,495 (6,833)
0072 Debt service - 6,405 3,733 2,672
6030 Total expenditures 6,140,689 6,611,593 6,733,873 (122,280)
1100 Excess (deficiency) of revenues over
(under) expenditures 71,368 23,880 (173,732) (197,612)
OTHER FINANCING SOURCES
7913 Capital lease proceeds - 256,266 239,009 (17,257)
Total other financing sources - 256,266 239,009 (17,257)
1200 Net change in fund balances 71,368 280,146 65,277 (214,869)
0100 Fund balances--beginning 959,240 959,240 959,240 -
3000 Fund balances--ending $1,030,608 $1,239,386 $1,024,517 $(214,869)
Budgeted Amounts
WESTLAKE ACADEMY
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED AUGUST 31, 2014
30
Budgetary Information
The Board of Trustees adopts an “appropriated budget” on a GAAP basis for the General Fund.
The Academy is required to present the adopted and final amended budgeted revenues and
expenditures for this fund. The General Fund budget appears in Exhibit E-1.
The following procedures are followed in establishing the budgetary data:
1. Prior to August 25 of the preceding fiscal year, the Academy prepares a budget for the next
succeeding fiscal year beginning September 1. The operating budget includes proposed
expenditures and the means of financing them.
2. A m eeting of the Board of Trustees is then called for the purpose of adopting the proposed
budget.
3. Prior to September 1, the budget is legally enacted through resolution by the Board. Once a
budget is approved, it can only be amended at the object, function and fund level by approval of
a majority of the mem bers of the Board. Amendments are presented to the Board at its regular
meetings. Each amendment made before the fact, is reflected in the official minutes of the
Board, and is not made after fiscal year end.
4. Budgeted amounts are amended by the Board. All budget appropriations lapse at year end.
5. For the year ending August 31, 2014, expenditures exceeded appropriations in the following
functions: Instruction; Curriculum and Staff Development; Guidance, Counseling and
Evaluation Services; General Administration; Facilities Maintenance and Operations; and
Community Services.
COMBINING STATEMENTS
WESTLAKE ACADEMY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
AUGUST 31, 2014
31
224 397 461 481
Data
Control
Codes
IDEA - Part B
Formula
Advanced
Placement
Incentives
Campus
Activity
Funds
HF - Staff
Development
ASSETS
1110 Cash and cash equivalents -$ -$ 47,091$ 3,774$
1000 Total assets -$ -$ 47,091$ 3,774$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
2110 Accounts payable -$ -$ 310$ 20$
2160 Accrued wages payable - - - 288
2210 Accrued expenditures - - - 6
Total liabilities - - 310 314
Deferred inflows of resources:
2601 Unavailable grant funds - - - 3,460
2600 Total deferred inflows of resources - - - 3,460
Fund balances:
3545 Other committed fund balance - - 46,781 -
3000 Total fund balances - - 46,781 -
Total liabilities, deferred inflows
4000 of resources and fund balances -$ -$ 47,091$ 3,774$
EXHIBIT F-1
32
483 484 486 487 497
International
Student
Leadership
Symposium Local Grants
WAF- Math
Teacher
Support
Recruit and
Retain
Legacy
Teachers
Financial
Assistance
Grant
Total
Nonmajor
Governmental
Funds
-$ 2,543$ -$ -$ -$ 53,408$
-$ 2,543$ -$ -$ -$ 53,408$
-$ 80$ -$ -$ -$ 410$
- - - - - 288
- - - - - 6
- 80 - - - 704
- 2,463 - - - 5,923
- 2,463 - - - 5,923
- - - - - 46,781
- - - - - 46,781
-$ 2,543$ -$ -$ -$ 53,408$
WESTLAKE ACADEMY
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31, 2014
33
224 397 461 481
Data
Control
Codes
IDEA - Part B
Formula
Advanced
Placement
Incentives
Campus
Activity
Funds
HF - Staff
Development
REVENUES
5700 Local and intermediate sources -$ -$ 43,461$ 32,540$
5900 Federal program revenues 80,008 95 - -
5020 Total revenues 80,008 95 43,461 32,540
EXPENDITURES
Current:
0011 Instruction 80,008 95 - 6,534
0012 Instructional resources and media - - - -
0013 Curriculum and instructional
staff development - - - 17,266
0023 School leadership - - - 470
0036 Extracurricular activities - - 30,421 -
0041 General Administration - - - 770
0061 Community services - - - 7,500
6030 Total expenditures 80,008 95 30,421 32,540
1200 NET CHANGE IN FUND BALANCES - - 13,040 -
0100 FUND BALANCES, BEGINNING - - 33,741 -
3000 FUND BALANCES, ENDING -$ -$ 46,781$ -$
EXHIBIT F-2
34
483 484 486 487 497
International
Student
Leadership
Symposium Local Grants
WAF- Math
Teacher
Support
Recruit and
Retain
Legacy
Teachers
Financial
Assistance
Grant
Total
Nonmajor
Governmental
Funds
3,492$ 41,857$ 25,000$ 25,500$ 1,750$ 173,600$
- - - - - 80,103
3,492 41,857 25,000 25,500 1,750 253,703
- 29,490 25,000 25,500 1,750 168,377
- 1,332 - - - 1,332
2,992 2,500 - - - 22,758
- - - - - 470
- - - - - 30,421
500 8,535 - - - 9,805
- - - - - 7,500
3,492 41,857 25,000 25,500 1,750 240,663
- - - - - 13,040
- - - - - 33,741
-$ -$ -$ -$ -$ 46,781$
INTERNAL CONTROL REPORT
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
AN INDEPENDENT MEMBER OF BAKER TILLY INTERNATIONAL WEAVER AND TIDWELL, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS 12221 MERIT DRIVE, SUITE 1400, DALLAS, TX 75251 P: 972.490.1970 F: 972.702.8321
35
To the Board of Trustees
Westlake Academy
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 governmental activities, the discretely presented component unit, each major
fund, and the aggregate remaining fund information of Westlake Academy (the Academy) as of
and for the year ended August 31, 2014, and the related notes to the financial statements,
which collectively comprise the Academy's basic financial statements and have issued our
report thereon dated January 7, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Academy's
internal control over financial reporting (internal control) to determine the 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
Academy's internal control. Accordingly, we do not express an opinion on the effectiveness of
the Academy'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 may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Academy's financial statements
are free of 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 determination of financial statement amounts.
Westlake Academy
Page 2
36
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.
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.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
January 7, 2015