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Home My WebLink AboutWestlake Academy Audit Fiscal Year 16-17 presentationWestlake Academy Board Meeting December 4, 2017 Overview •Introduction •Audit Process •Required Communications •Audit Results •Financial Highlights •New Accounting Pronouncements •Questions 2 3 Introductions 4 Presenting Today John DeBurro, CPA Partner, Assurance Services Engagement partner for the audit 20 years of experience Member of the Government Financial Officers Association (GFOA) Special Review Committee Practice emphasis in auditing and consulting for municipalities, school districts, and nonprofit agencies Remember: Weaver is your auditor all year. We are always available to answer your questions. The Firm of Texas Weaver is the largest independent accounting firm based in Texas and the Southwest. We’ve served Texas public sector entities for 66 years. REGIONAL AND NATIONAL RANKINGS Largest Firm based in the Southwest Region of the U.S. | Accounting Today (2016) #4 National Leaders in Tax (firms under $100M)| Accounting Today (2016) Top 40 Firms | INSIDE Public Accounting (2015) Top 50 Firms | Accounting Today (2016) 2015 BEST of the BEST Firm to Watch | INSIDE Public Accounting #9 Largest Houston-Area Accounting Firms: Global Revenue | Houston Business Journal (2016) #8 Largest North Texas Accounting Firms | Dallas Business Journal (2016) #3 Largest Tarrant County Accounting Firms | Fort Worth Business Press (2015) #7 Largest San Antonio Accounting Firms | San Antonio Business Journal (2016) Best and Brightest Companies to Work For®| Dallas/Fort Worth (2016) and Houston (2015) 6 Engagement Leadership John DeBurro Engagement Partner, Assurance Services Jerry Gaither Partner, Assurance Services 7 Engagement Team Westlake Academy John DeBurro, CPA Engagement Partner Jacqueline Diaz Senior Associate I Tom Winson, CPA Advisory Services -ACL Data Specialist Consulting Jerry Gaither, CPA Public Sector Leader Audit 8 Audit Process Engagement Timeline 9 Initial Audit Planning Interim Fieldwork Aug 21-25 Final Fieldwork Oct 16 –27 Release Audit Opinion Nov 28 Board Meeting Dec 4 Discuss Developments/ Issues Continuous Communication Audit Process •The audit was performed in accordance with Generally Accepted Auditing Standards (GAAS) and Generally Accepted Government Auditing Standards (GAGAS) •The audit process was a risk-based approach in which we identified potential areas of risk that could lead to material misstatement of the financial statements. We tailored our audit programs and resources to specifically address the following areas of risk: •State Foundation School Program revenue •State and local grant revenues •Payroll and payroll related liabilities •Cash disbursements and related payables 10 Audit Process •Walkthrough of accounting controls over significant transaction cycles: •Budget •Purchasing and Accounts Payable •Payroll •Revenue •Test of internal controls: •Cash disbursements •Payroll •Test of compliance •PFIA (Public Funds Investment Act) •State Compliance Requirements 11 Interim fieldwork and risk assessment were performed in August 2017. Procedures included: Audit Process •Testing of significant account balances using a combination of vouching of material transactions, sampling transactions and applying analytical procedures •Assisting with the preparation of the financial statements 12 Final fieldwork-performed in October 2017 Procedures included: 13 Auditor Communications for the year ended August 31. 2017 14 Required Communications to Those in Charge of Governance Communication Results Auditor’s responsibility under generally accepted auditing standards (GAAS) The financial statements are the responsibility of the Academy. Our audit was designed in accordance with GAAS in the U.S. and provide for reasonable rather than absolute assurance that the financial statements are free of material misstatement. Our responsibility is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented , in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. The audit of the fiscal year 2017 financial statements has been completed and we have issued an unmodified opinion. 15 Required Communications to Those in Charge of Governance Communication Results Auditor’s Responsibility under Government Auditing Standards In addition to the GAAS responsibilities, we are required to issue a written report on our consideration of internal controls and identify significant deficiencies, including material weaknesses, if any. Our reports do not provide assurance on internal controls. We design our audit to provide reasonable assurance of detecting material misstatements resulting from noncompliance with provisions of contracts or grant agreements that have a direct or material effect on the financial statements. We issue a written report on the results of these procedures; however, our report does not express an opinion on compliance. No findings noted. 16 Required Communications to Those in Charge of Governance Communication Results Unusual transactions and the adoption of new accounting principles The significant accounting policies used by the Academy are described in Note 1 to the basic financial statements. There were no new GASB pronouncements required to be implemented in 2017 that had any significant impact on the Academy’s financial statements. We noted no transactions entered into by the Academy during the year for which there is a lack of authoritative guidance or consensus. 17 Required Communications to Those in Charge of Governance Communication Results Fraud and illegal acts No fraud, irregularities, or illegal acts were noted. Material weakness in internal control No material weaknesses noted. Other information contained in documents containing audited financial statements We performed limited procedures on the MD&A and RSI. We did not provide any assurance on this information. Management judgments and accounting estimates Management’s estimates of state foundation revenue and net pension liability were evaluated and determined to be reasonable in relation to the financial statements as a whole. Management representations We have requested certain representations from management that were included in the management representation letter. 18 Required Communications to Those in Charge of Governance Communication Results Difficulties encountered No significant difficulties were encountered during our audit. Management consultations We are not aware of management consulting with other accountants for a second opinion. Auditor independence No independence issues noted. Disagreements with Management There were no disagreements with management during the current year. 19 Required Communications to Those in Charge of Governance Communication Results Audit adjustments All known and likely misstatements identified during the audit, other than those that are trivial, have been communicated to management. Management has deemed the following adjustment immaterial individually and in the aggregate and therefore it has not been reflected in the Academy’s financial statements: $162,005 to reduce prepaid items and increase debt service expenditures related to a lease payment that was made in advance of its due date. No material adjustments have been posted as a result of our audit. Other material written communications between Weaver and Tidwell, L.L.P., and the Academy Nothing to note. 20 Auditor Results Auditor Results •We have issued the Independent Auditor’s Report on the financial statements –Unmodified opinion •We have issued the 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 –No findings noted. 21 22 Financial Highlights 23 Financial Highlights Comparison of Governmental Funds Expenditures by Fund (in millions of dollars) $8.4 $0.4 FY 2017 General Fund Other Funds Governmental Funds Expenditures for FY 2017 totaled $8.8 million, a $0.5 million or 5% decrease •Instruction costs decreased $726K over FY16. •Extracurricular activities increased by $159K over the previous year. •Debt service costs increased by $164K. $8.8 $0.5 FY 2016 General Fund Other Funds 24 Financial Highlights Comparison of Governmental Fund Expenditures $5.2 $1.2 $0.6 $0.3 $1.1 $0.1 $0.2 $6.0 $1.0 $0.5 $0.4 $1.2 $0.1 $0.1 $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 Instruction, Curriculum, and Media Services Instructional and School Leadership Student Support, Food Svs, and ExtraCurricular Activities General Administration Facilities Maintenance and Data Processing Community Services Debt service 2017 2016 25 Financial Highlights Comparison of Governmental Revenues by Source Governmental Revenues for FY 2017 totaled $8.64 million, a $378K or 5% increase. Increase is primarily attributable to a current year increase in local grants/contributions and state funding. 22.0% 76.4% 1.6% FY 2017 Revenues Local and intermediate sources State program revenues Federal program revenues 19.5% 79.3% 1.1% FY 2016 Revenues Local and intermediate sources State program revenues Federal program revenues 26 Financial Highlights Comparison of Governmental Revenues by Source (2 -year comparison –current year and prior year –in millions) $1.9 $6.6 $0.1 $1.6 $6.5 $0.1 $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 Local and intermediate sources State program revenues Federal program revenues 2017 2016 27 Financial Highlights Fund Balances Governmental Funds’ Fund Balances As of August 31, 2017, the Academy’s governmental funds reported a combined ending fund balance of $965K as follows: •General Fund $939,271 •Other Funds 25,977 $965,248 General Fund fund balance decreased by $131,765 during the year ended August 31, 2017. The ending balance, $939,271, represents 11% of fiscal year 2017 General Fund expenditures. 28 Financial Highlights Budgetary Highlights –General Fund The District had a unfavorable budget variance of $56K net change in fund balance: •Actual revenues were $9K less than budgeted (less than1% variance). •Actual expenditures were below budget by $27K (less than 1.0% variance). •Transfers in were below budget by $20K 29 Standards Required to be Implemented in FY2018 Effective for the year ended August 31, 2018 GASB 75 –Accounting and Financial Reporting for Postemployment Benefits Other than Pensions (OPEB) The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for OPEB. It also improves information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. Effective for periods beginning after 6/15/2017 30 We appreciate the opportunity to work with Westlake Academy and look forward to our continued relationship. Questions? Jerry Gaither, CPA, CGFM | Partner 972.448.6918| jerry.gaither@weaver.com John DeBurro, CPA | Engagement Partner 972.448.6970 | john.deburro@weaver.com