HomeMy WebLinkAboutRes 17-16 WA Approving Annual Financial Audit Report Fiscal Year 16-17 WESTLAKE ACADEMY
RESOLUTION NO. 17-16
A RESOLUTION OF THE WESTLAKE ACADEMY BOARD OF TRUSTEES
APPROVING THE FISCAL YEAR 2016-2017 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 2016-2017 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 17-16
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 4th DAY
OF DECEMBER,2017.
ATTEST: Laura Wheat, President
Kelly'Edwar s, Board Secretary Thomas E. Brymer, uperintendent
APPROV AS F
/1 P�-
-- -7
a . Bu er" . St on Lowry,
School Attorney
Resolution 17-16
Page 2 of 2
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31, 2017
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
Fiduciary Funds:
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 36
Notes to Budgetary Comparison Schedule 37
E-2 Schedule of Academy's Proportionate Share of Net Pension Liability -
Teacher Retirement System 38
E-3 Schedule of Contributions - Teacher Retirement System 39
Combining Statements
Nonmajor Governmental Funds:
F-1 Combining Balance Sheet 40
F-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 42
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 44
TABLE OF CONTENTS
WESTLAKE ACADEMY
Name of School
CERTIFICATE OF BOARD
TARRANT
County
220-810
Co .-District Number
We , the undersigned, certify that 'e attached annual financial reports of the above-named school were
reviewed and (check one) V approved __ disapproved for the year ended August 31 ,
2017 at a meeting of the Board of Trustees of such school on the _4 _day of December. 2017 .
If the Board of Trustees disapproved of the auditors' report , the reason(s) for disapproving it is( are):
(attach list as necessary)
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, 2017, 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 auditor’s
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, 2017, 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, budgetary comparison information, and TRS pension
schedules on pages 5 through 11, 36 and 37, 38 and 39, respectively, 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. In our opinion, the nonmajor governmental funds combining statements are fairly
stated in all material respects in relation to the basic financial statements as a whole.
Westlake Academy
Page 4
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
November 28, 2017, 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
November 28, 2017
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2017
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, 2017. 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 $205,030 (Net Position). This is a decrease of $84,867 for the year ended August 31, 2017.
The Academy had $9,573,171 in expenses related to governmental activities, of which
$3,286,503 of these expenses were offset by program-specific charges for services or grants
and contributions. This is a total expense decrease of $702,190 from the prior year.
The General Fund reported a fund balance this year of $939,271, a decrease of $131,765
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 provide 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.
Government-wide Statements
The government-wide statements beginning on page 12, report information about the Academy as a
whole using accounting methods similar to those used by private-sector companies. Its primary
objective 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. The facilities used in
the Academy’s operations are included in the Town of Westlake’s financial statements.
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.
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2017
6
The Academy's revenue is divided into those provided by outside parties who share the costs of
some programs, such as payments received from extracurricular 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
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 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
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 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.
Type of Statement Government-wide Governmental Funds Fiduciary Funds
Figure A-1
Major features of the Academy's Government-wide and Fund Financial Statements
The two government-wide statements report the Academy's net position and how it has changed. Net
position-the difference between the Academy's assets, deferred outflows of resources, and
liabilities and deferred inflows of resources-is one way to measure the Academy’s financial health or
position.
Over time, increases or decreases in the Academy's net position are an indicator of whether its
financial health is improving or deteriorating, respectivel y.
To assess the overall health of the Academy, one should 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 2017, the Foundation
contributed $1,146,465 to the Academy to enhance educational opportunities. These contributions are
recorded as operating grants and contributions in the Statement of Activities.
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2017
7
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, 2017.
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 – the Academy maintains a fiduciary fund to account for resources held for student
activities in a custodial capacity. 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 - 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. The Academy presently has no proprietary funds.
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 $205,030 at August 31, 2017.
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 $289,897 to $205,030.
$196,491 of net position was considered unrestricted and can be used to finance day-to-day operations
without constraints established by debt covenants, enabling legislation, or other legal requirements.
The governmental activities’ net position decreased by 29 percent ($84,867). The decrease was primarily
due to net effect of the following factors:
(1) General Revenues increase of $188,491, consisting primarily of the additional state funding received
due to an increase in student enrollment as well as additional funds for career technology educational
students/courses.
(2) Program Revenues of $3,286,503 representing a total increase of $90,867 mainly due to an increase
in Operating Grants and Contributions related to the Blacksmith program contributions of roughly
$120,000 which was offset by a reduction in state funding for the material allotment funds which is a
bi-annual grant with the majority of the reimbursement of expenditures being made in the prior year.
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2017
8
(3) Total expenses decreased by $702,190 which is attributed to the following decreases:
Reduction in supplies due to the accounting entries made in the prior year to recognize a capital
lease in the amount of $475K (offset with lease proceeds) which was not capitalized.
Additional technology being purchased in the prior year with designated fund balance.
Reduction in Curriculum and staff development in direct correlation with the local grant funds
received specifically for training.
Decrease in marketing efforts because a video and website services were provided in the prior
year.
Table A-1
Westlake Academy’s Net Position
2017 2016 2017 2016
Current assets 934,452$ 1,386,808$ 1,955,950$ 1,695,889$
Total assets 934,452 1,386,808 1,955,950 1,695,889
Deferred outflows of resources 672,957 869,371 - -
Current liabilities 127,386 228,046 275 10,404
Non-current liabilities 1,213,351 1,656,910 - -
Total liabilities 1,340,737 1,884,956 275 10,404
Deferred inflows of resources 61,642 81,326 - -
Net position:
Restricted 8,539 24,017 271,809 86,740
Unrestricted 196,491 265,880 1,683,866 1,598,745
Total net position 205,030$ 289,897$ 1,955,675$ 1,685,485$
Governmental Activities Component Unit
Figure A-2
Westlake Academy
Sources of Revenue for Fiscal Year 2017
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2017
9
Table A-2
Westlake Academy’s Change in Net Position
2017 2016 2017 2016
Revenues
Program revenues:
Charges for services 267,412$ 271,788$ -$ -$
Operating grants and
contributions 2,261,830 2,164,774 1,715,833 1,390,413
Capital grants and
contributions 757,261 759,074 - -
General revenues:
State aid and
formula grants 6,196,430 6,010,184 - -
Investment earnings 5,371 3,126 46,433 51,584
Total revenues 9,488,304 9,208,946 1,762,266 1,441,997
Expenses
Instruction and Instructional
related 5,937,557 6,816,094 - -
Instructional leadership/
school leadership 1,219,354 1,169,690 - -
Guidance, social work,
health, transportation 360,777 338,683 - -
Food services 51,674 51,834 - -
Extracurricular activities 380,613 221,400 - -
General administration 318,566 385,100 - -
Facilities maintenance and
operations 967,303 976,963 - -
Data processing services 189,764 183,320 - -
Community services 133,626 126,813 - -
Program/support services 1,492,076 1,337,969
Debt service - interest 13,937 5,464
Total expenses 9,573,171 10,275,361 1,492,076 1,337,969
Change in net position (84,867) (1,066,415) 270,190 104,028
Beginning net position 289,897 1,356,312 1,685,485 1,581,457
Ending net position 205,030$ 289,897$ 1,955,675$ 1,685,485$
Governmental Activities Component Unit Activities
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2017
10
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 $9,573,171
• Some of the cost was paid by those who directly benefited from the programs, $267,412 and some
of the cost was paid through grants and contributions $3,019,091
Table A-3
Total % Total %
Change Change
2017 2016 2016-17 2017 2016 2016-17
Instruction 5,692,052$ 6,517,509$ -13% 3,688,789$ 4,593,281$ -20%
School leadership 944,381 948,246 0% 679,592 718,472 -5%
Instructional leadership 274,973 221,444 24% 205,561 167,832 22%
Guidance, counseling
and evaluation services 277,877 260,596 7% 208,829 203,543 3%
General administration 318,566 385,100 -17% 247,740 313,647 -21%
Facilities Maintenance
and operations 967,303 976,963 -1% 716,142 753,759 -5%
Data processing services 189,764 183,320 4% 135,545 133,844 1%
Total Cost of Services Net Cost of Services
General Fund Budgetary Highlights
The General Fund year-end fund balance was $939,271 which was a $131,765 decrease from the
prior year
Over the course of the year, the Academy revised its budget by decreasing revenues by $171,210
due to the anticipated student enrollment being smaller than originally budgeted. The final
budgeted expenditures were decreased also in the amount of $37,274.
Economic Factors and Next Year’s Budget
General Fund revenues are budgeted to increase approximately 7% over FY 2016-2017 actual revenues.
This increase is primarily due to the anticipated addition of 26 students and the increase of Career and
Technology (CTE) courses and students. This additional program was implemented in the prior year.
Amounts available for appropriation in the General Fund budget are $8,322,199, a decrease of 1%
($65,073) from the final FY 2016-2017 expenditures of $8,387,272.
Due to changes in administration and the realignment of faculty positions maximizing current
available efficiencies, there is an overall decrease of $11K in salaries and related expenditures,
reducing the FY 17/18 FTEs by 1.96. Faculty and staff received a 2% increase, which keeps the
salary scale within 2.5% of surrounding school districts and remains consistent with previous
years.
Professional services category includes expenditures related to professional and contracted
services rendered to the Academy by firms, individuals and other organizations. The increase
of $18K is mainly due to the increase in the cost for services to maintain the facilities, as well as
increased costs required to change the Strings Program from in-house instruction to contract.
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUGUST 31, 2017
11
Other operating costs are associated with insurance, professional development, travel,
membership fees and dues, graduation expenses, and miscellaneous costs. Cost savings in this
category were due to a determined effort to reduce costs.
Debt service costs are associated with the 3-year lease for iPads to support the one-to-one
device initiative. The reduction from the prior year includes the payoff for the original iPad
lease, creating a decreased expenditure for FY 17/18.
If the FY 2017-18 budget estimates are realized the Academy’s General Fund’s budgetary fund balance
is expected to increase an estimated $337,319 by the close of FY 2018.
CONTACTING THE ACADEMY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors
with a general overview of the Academy's finances and to demonstrate the Academy's accountability for
the money it receives. If you have questions about this report or need additional financial information,
contact the Academy/Town Finance Director, Debbie Piper, at 817-490-5712, or by writing to 1500
Solana Blvd, Building 7, Suite 7200, Westlake, Texas 76262.
BASIC FINANCIAL STATEMENTS
EXHIBIT A-1
WESTLAKE ACADEMY
STATEMENT OF NET POSITION
AUGUST 31, 2017
The Notes to Financial Statements are
an integral part of this statement.
12
Data
Control
Codes 1 4
Governmental Component
Activities Unit
ASSETS
1110 Cash and cash equivalents 410,704$ 340,662$
1120 Current investments 100 1,610,288
1240 Due from other governments 440,841 -
1290 Other receivables 5,450 -
1410 Prepaid expenses 77,357 5,000
1000 Total assets 934,452 1,955,950
DEFERRED OUTFLOWS OF RESOURCES
1705 Deferred outflows of resources - pensions 672,957 -
1700 Total deferred outflows of resources 672,957 -
LIABILITIES
2110 Accounts payable 34,376 275
2150 Payroll deductions and withholdings 46,653 -
2160 Accrued wages payable 44,928 -
2200 Other accrued expenses 899 -
2300 Unearned revenue 530 -
Noncurrent liabilities:
2502 Due in more than one year 162,005 -
2540 Net pension liability 1,051,346 -
2000 Total liabilities 1,340,737 275
DEFERRED INFLOWS OF RESOURCES
2605 Deferred inflows of resources - pensions 61,642 -
2600 Total deferred inflows of resources 61,642 -
NET POSITION
3890 Restricted for donor stipulations 8,539 271,809
3900 Unrestricted 196,491 1,683,866
3000 Total net position 205,030$ 1,955,675$
EXHIBIT B-1
WESTLAKE ACADEMY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED AUGUST 31, 2017
The Notes to Financial Statements are
an integral part of this statement.
13
13 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 5,692,052$ 49,435$ 1,455,149$ 498,679$ (3,688,789)$
12 Instructional resources and media services 116,788 845 19,872 33,076 (62,995)
13 Curriculum and staff development 128,717 899 58,803 - (69,015)
21 Instructional leadership 274,973 2,769 66,643 - (205,561)
23 School leadership 944,381 9,110 239,620 16,059 (679,592)
31 Guidance, counseling, and evaluation services 277,877 2,776 62,201 4,071 (208,829)
33 Health services 82,900 702 16,766 12,704 (52,728)
35 Food service 51,674 7,000 - 51,674 7,000
36 Extracurricular activities 380,613 178,388 48,102 39,453 (114,670)
41 General administration 318,566 3,183 57,352 10,291 (247,740)
51 Facilities maintenance and operations 967,303 9,185 165,244 76,732 (716,142)
53 Data processing services 189,764 1,802 40,428 11,989 (135,545)
61 Community services 133,626 1,318 31,650 2,533 (98,125)
71 Debt service - interest 13,937 - - - (13,937)
[TP] Total primary government:9,573,171$ 267,412$ 2,261,830$ 757,261$ (6,286,668) -
COMPONENT UNIT
IC Westlake Academy Foundation 1,492,076$ -$ 1,715,833$ -$ - 223,757
Data
Control
Codes General Revenues:
SF State aid-formula grants 6,196,430 -
IE Investment earnings 5,371 46,433
TR Total general revenues 6,201,801 46,433
CN Change in net position (84,867) 270,190
NB Net position, beginning 289,897 1,685,485
NE Net position, ending 205,030$ 1,955,675$
Net (Expense) Revenue and
Changes in Net PositionProgram Revenues
EXHIBIT C-1
WESTLAKE ACADEMY
BALANCE SHEET
GOVERNMENTAL FUNDS
AUGUST 31, 2017
The Notes to Financial Statements are
an integral part of this statement.
14
10 98
Data Nonmajor Total
Control Governmental Governmental
Codes General Funds Funds
ASSETS
1110 Cash and cash equivalents 393,860$ 16,844$ 410,704$
1120 Current investments 100 - 100
1240 Due from other governments 437,489 3,352 440,841
1260 Due from other funds 3,352 - 3,352
1290 Other receivables - 5,450 5,450
1410 Prepaid expenditures 231,399 4,140 235,539
1000 Total assets 1,066,200$ 29,786$ 1,095,986$
LIABILITIES AND FUND BALANCES
LIABILITIES:
2110 Accounts payable 33,919$ 457$ 34,376$
2150 Payroll deductions and withholdings 46,653 - 46,653
2160 Accrued wages payable 44,928 - 44,928
2170 Due to other funds - 3,352 3,352
2200 Accrued expenditures 899 - 899
2300 Unearned revenue 530 - 530
2000 Total liabilities 126,929 3,809 130,738
FUND BALANCES:
3430 Nonspendable - prepaid items 231,399 4,140 235,539
3490 Restricted for donor stipulations - 8,539 8,539
3545 Committed for campus activities - 13,298 13,298
3600 Unassigned 707,872 - 707,872
3000 Total fund balances 939,271 25,977 965,248
4000 Total liabilities and fund balances 1,066,200$ 29,786$ 1,095,986$
Total fund balances - governmental funds 965,248$
Amounts reported for governmental activities in the statement of net position are different because:
Capital leases payable are not due and payable in the current period and, therefore,
are not reported in the governmental funds financial statements. (162,005)
Prepayment of long-term liabilities reduces the liability and therefore is not recorded
as a prepaid item in the government-wide financial statements. (158,182)
Included in the items related to debt is the Academy's proportionate share of the TRS
net pension liability ($1,051,346), a deferred resource inflow ($61,642) and a deferred
resource outflow of $672,957. The net effect is a decrease in net position. (440,031)
Net position of governmental activities 205,030$
EXHIBIT C-2
WESTLAKE ACADEMY
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31, 2017
The Notes to Financial Statements are
an integral part of this statement.
15
10 98
Data Nonmajor Total
Control Governmental Governmental
Codes General Funds Funds
REVENUES
5700 Local and intermediate sources 1,626,401$ 269,700$ 1,896,101$
5800 State program revenues 6,592,016 11,342 6,603,358
5900 Federal program revenues - 140,152 140,152
5020 Total revenues 8,218,417 421,194 8,639,611
EXPENDITURES
0011 Instruction 4,749,555 284,546 5,034,101
0012 Instructional resources and media services 81,227 - 81,227
0013 Curriculum and staff development 86,871 41,846 128,717
0021 Instructional leadership 266,090 - 266,090
0023 School leadership 875,439 23,204 898,643
0031 Guidance, counseling, and evaluation services 267,033 - 267,033
0033 Health services 67,489 - 67,489
0036 Extracurricular activities 242,560 96,257 338,817
0041 General administration 307,304 - 307,304
0051 Facilities maintenance and operations 886,943 - 886,943
0053 Data processing services 173,352 - 173,352
0061 Community services 126,614 - 126,614
0071 Debt service - principal on long-term debt 242,844 - 242,844
0072 Debt service - interest on long-term debt 13,951 - 13,951
6030 Total expenditures 8,387,272 445,853 8,833,125
1100 DEFICIENCY OF REVENUES
UNDER EXPENDITURES (168,855) (24,659) (193,514)
OTHER FINANCING SOURCES
7915 Transfers in 37,090 - 37,090
8911 Transfers out - (37,090) (37,090)
Total other financing sources 37,090 (37,090) -
1200 NET CHANGE IN FUND BALANCES (131,765) (61,749) (193,514)
0100 FUND BALANCES, BEGINNING 1,071,036 87,726 1,158,762
3000 FUND BALANCES, ENDING 939,271$ 25,977$ 965,248$
Net change in fund balances (193,514)$
Amounts reported for governmental activities in the Statement of Activities are different because:
Current year principal payments on capital leases consume current resources, however,
these payments reduce liabilities in the government-wide financial statements. 242,858
Implementation of GASB 68 required certain expenditures be de-expended and recorded as
deferred resource inflows. Contributions made after the measurement date caused the change
in net position to increase by $84,783. Contributions before the measurement date also caused
a decrease in the change in net position of $88,399. The net share of the Academy's amount
of deferred inflows and outflows of resources decreased the net position by $130,595. This
amount is the net effect.(134,211)
Change in net position of governmental activities (84,867)$
EXHIBIT D-1
WESTLAKE ACADEMY
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
AUGUST 31, 2017
The Notes to Financial Statements are
an integral part of this statement.
16
Agency
Fund
ASSETS
Cash and cash equivalents 50,475$
Total assets 50,475$
LIABILITIES
Due to student groups 50,475$
Total liabilities 50,475$
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL 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 Statements No. 39 and 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 12 for additional information relating to the
Foundation. Separate audited financial statements of the Foundation are available from the
Academy/Town Finance Director's office, 1500 Solana Blvd, Building 7, Suite 7200, 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 FINANCIAL 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 FINANCIAL 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 fiduciary funds utilize the accrual basis of accounting for purposes of asset and liability
recognition.
With this basis of accounting, all assets and all liabilities associated with the operation of these
funds are included on the Statement of Fiduciary 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.
Additionally, the Academy reports the following fund types:
Nonmajor Governmental Funds:
These nonmajor Special Revenue Funds account for resources restricted to, or committed
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.
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 is provided for employees in accordance with 19 TAC
§153.1021(d)(8). Each District's local Board is required to establish a personal leave plan. It
is the Academy's policy to permit employees to accumulate earned but unused state and
local personal leave. 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 Academy.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
20
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Other Accounting Policies – Continued
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. 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.
• 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 by the Academy's
intent to be used for a specific purpose but are neither restricted nor committed. This
intent can be expressed by the Finance Director and Superintendent.
• 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.
5. Net position represents the difference between assets and deferred outflows of resources
and liabilities and deferred inflows of resources. 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.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
21
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Other Accounting Policies – Continued
6. 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.
7. 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. 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, 2017, the carrying amount of the Academy's deposits (cash, certificates of deposit, and
interest-bearing savings accounts included in temporary investments), including $50,475 recorded in
the Agency fund, was $461,179 and the bank balance was $540,871. The carrying amount of the
Foundation’s deposits was $340,662 as of August 31, 2017 and the bank balance was $340,878. The
Academy cash deposits at August 31, 2017 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 Town of Westlake’s
name.
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 to the Town (inclusive of the Academy) as of the date
of the highest combined balance on deposit was $28,907,405.
c. The highest combined balances of cash, savings, and time deposit accounts amounted to
$28,174,574 ($1,705,806 of which belonged to the Academy) on January 25, 2017.
d. Total amount of FDIC coverage at the time of the highest combined balance was $250,000.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
22
NOTE 2. CASH AND INVESTMENTS – CONTINUED
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 Academy categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and
Application provides a framework for measuring fair value which establishes a three-level fair value
hierarchy that describes the inputs that are used to measure assets and liabilities.
• Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active
markets that a government can access at the measurement date.
• Level 2 inputs are inputs—other than quoted prices included within Level 1—that are
observable for an asset or liability, either directly or indirectly.
• Level 3 inputs are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3
inputs. If a price for an identical asset or liability is not observable, a government should measure fair
value using another valuation technique that maximizes the use of relevant observable inputs and
minimizes the use of unobservable inputs. If the fair value of an asset or a liability is measured using
inputs from more than one level of the fair value hierarchy, the measurement is considered to be
based on the lowest priority level input that is significant to the entire measurement.
The Academy presently has no recurring fair value measurements.
Investment Pools are measured at amortized cost and are exempt for fair value reporting.
The carrying value of the Academy’s investments at August 31, 2017, was $100, which was
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.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
23
NOTE 2. 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, 2017, the Academy’s deposits with
financial institutions in excess of federal depository insurance were fully collateralized by FDIC
insurance and pledged collateral held by the Academy’s agent bank in the Town of Westlake’s
name.
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, 2017, TexPool’s investments credit
quality rating was AAAm (Standard & Poor's).
Foundation – Investments
The Foundation’s investments in marketable securities are valued at their estimated fair values in
the statement of financial position. Unrealized gains and losses are included in the statement of
activities. All other investments are carried at cost.
Investments at the end of the year consist of the following:
Investment Type Cost Basis Market Value
Marketable equity securities:
Common stock 1,568,358$ 1,610,288$
August 31, 2017
FASB ASC 820, Fair Value Measurements and Disclosures, establishes a framework for
measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three
levels of the fair value hierarchy under FASB ASC 820 are described as follows:
Level 1 inputs: Inputs to the valuation methodology are unadjusted quoted prices for identical
assets or liabilities in active markets that the Foundation has the ability to access.
Level 2 inputs: Inputs to the valuation methodology include:
• Quoted market prices for similar assets or liabilities in active markets;
• Quoted prices for identical assets or liabilities in inactive markets;
• Inputs other than quoted prices that are observable for the asset or liability; and
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
24
NOTE 2. CASH AND INVESTMENTS – CONTINUED
Foundation – Investments – Continued
• Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for
substantially the full-term of the asset or liability.
Level 3 inputs: Inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
The asset or liability's fair value measurement level within the fair value hierarchy is based on the
lowest level of any input that is significant to the fair value measurement. Valuation techniques
used need to maximize the use of observable inputs and minimize the use of unobservable
inputs.
The following is a description of the valuation methodologies used for assets measured at fair
value.
Marketable Equity Securities
Marketable equity securities reported as level 1 are determined by reference to quoted market
prices for investments listed on an exchange or over-the-counter market.
The following table sets forth by level, within the fair value hierarchy, the Foundation's assets at
fair value as of August 31, 2017.
Level 1 Level 2 Level 3 Total
Marketable equity securities:
Common stock 1,610,288$ -$ -$ 1,610,288$
Assets at Fair Value as of
August 31, 2017
NOTE 3. 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, 2017, are summarized below.
State
Fund Entitlements Local Total
General 434,026$ 3,463$ 437,489$
Nonmajor funds 3,352 - 3,352
Total 437,378$ 3,463$ 440,841$
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
25
NOTE 4. 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, $757,261, in the government-wide statement of activities as capital grants
and contributions and as expense allocated to the various functions.
NOTE 5. INTERFUND BALANCES AND ACTIVITIES
Interfund balances at August 31, 2017, consisted of the following individual fund balances:
Due to Fund Due from Fund Amount Purpose
General fund Nonmajor governmental 3,352$ Reimburse program disbursements
Total 3,352$
The Academy had interfund transfers of $37,090 from the nonmajor governmental funds into the
general fund for reimbursement of campus activity expenditures for the year ending August 31, 2017.
NOTE 6. REVENUE FROM LOCAL AND INTERMEDIATE SOURCES
During the current year, revenues from local and intermediate sources as reported on Exhibit C-2
of the fund statements consisted of the following:
Non-major
General Fund Funds Total
Gifts and bequests 1,435,669$ 187,649$ 1,623,318$
Interest 5,371 - 5,371
Food sales 7,000 - 7,000
Campus activities - 82,051 82,051
Parking/transportation 17,097 - 17,097
Athletics 76,726 - 76,726
Miscellaneous 84,538 - 84,538
Total 1,626,401$ 269,700$ 1,896,101$
NOTE 7. DEFINED BENEFIT PENSION PLAN
Plan Description
The Academy participates in a cost-sharing multiple-employer defined benefit pension that has a
special funding situation. The plan is administered by the Teacher Retirement System of Texas
(TRS). TRS’s defined benefit pension plan is established and administered in accordance with
the Texas Constitution, Article XVI, Section 67 and Texas Government Code, Title 8, Subtitle C.
The pension trust fund is a qualified pension trust under Section 401(a) of the Internal Revenue
Code. The Texas Legislature establishes benefits and contribution rates within the guidelines of
the Texas Constitution. The pension’s Board of Trustees does not have the authority to establish
or amend benefit terms.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
26
NOTE 7. DEFINED BENEFIT PENSION PLAN – CONTINUED
Plan Description – Continued
All employees of public, state-supported educational institutions in Texas who are employed for
one-half or more of the standard work load and who are not exempted from membership under
Texas Government Code, Title 8, Section 822.002 are covered by the system.
Pension Plan Fiduciary Net Position
Detailed information about the Teacher Retirement System’s fiduciary net position is available in
a separately-issued Comprehensive Annual Financial Report that includes financial statements
and required supplementary information. That report may be obtained on the Internet at
http://www.trs.state.tx.us/about/documents/cafr.pdf#CAFR; by writing to TRS at 1000 Red River
Street, Austin, TX, 78701-2698; or by calling (512) 542-6592.
Benefits Provided
TRS provides service and disability retirement, as well as death and survivor benefits, to eligible
employees (and their beneficiaries) of public and higher education in Texas. The pension formula
is calculated using 2.3 percent (multiplier) times the average of the five highest annual creditable
salaries times years of credited service to arrive at the annual standard annuity except for
members who are grandfathered, the three highest annual salaries are used. The normal service
retirement is at age 65 with 5 years of credited service or when the sum of the member’s age and
years of credited service equals 80 or more years.
Early retirement is at age 55 with 5 years of service credit or earlier than 55 with 30 years of
service credit. There are additional provisions for early retirement if the sum of the member’s age
and years of service credit total at least 80, but the member is less than age 60 or 62 depending
on date of employment, or if the member was grandfathered in under a previous rule. There are
no automatic post-employment benefit changes; including automatic COLAs. Ad hoc post-
employment benefit changes, including ad hoc COLAs can be granted by the Texas Legislature
as noted in the Plan description in (A) above.
Contributions
Contribution requirements are established or amended pursuant to Article 16, section 67 of the
Texas Constitution which requires the Texas legislature to establish a member contribution rate of
not less than 6% of the member’s annual compensation and a state contribution rate of not less
than 6% and not more than 10% of the aggregate annual compensation paid to members of the
system during the fiscal year. Texas Government Code section 821.006 prohibits benefit
improvements, if as a result of the particular action, the time required to amortize TRS’ unfunded
actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization
period already exceeds 31 years, the period would be increased by such action.
Employee contribution rates are set in state statute, Texas Government Code 825.402. Senate
Bill 1458 of the 83rd Texas Legislature amended Texas Government Code 825.402 for member
contributions and established employee contribution rates for fiscal years 2014 thru 2017. The
83rd Texas Legislature, General Appropriations Act (GAA) established the employer contribution
rates for fiscal years 2016 and 2017.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
27
NOTE 7. DEFINED BENEFIT PENSION PLAN – CONTINUED
Contributions – Continued
The 84th Texas Legislature, General Appropriations Act (GAA) established the employer
contribution rates for fiscal years 2016 and 2017.
Contribution Rates
2016 2017
Member 7.2% 7.2%
Non-Employer Contributing Entity (State) 6.8% 6.8%
Employers 6.8% 6.8%
2017 Employer Contributions $ 84,783
2017 Member Contributions $ 382,298
2017 NECE On-behalf Contributions $ 340,001
Contributors to the plan include members, employers and the State of Texas as the only non-
employer contributing entity. The State is the employer for senior colleges, medical schools and
state agencies including TRS. In each respective role, the State contributes to the plan in
accordance with state statutes and the General Appropriations Act (GAA).
As the non-employer contributing entity for public education and junior colleges, the State of
Texas contributes to the retirement system an amount equal to the current employer contribution
rate times the aggregate annual compensation of all participating members of the pension trust
fund during that fiscal year reduced by the amounts described below which are paid by the
employers. Employers (public school, junior college, other entities or the State of Texas as the
employer for senior universities and medical schools) are required to pay the employer
contribution rate in the following instances:
On the portion of the member's salary that exceeds the statutory minimum for members
entitled to the statutory minimum under Section 21.402 of the Texas Education Code.
During a new member’s first 90 days of employment.
When any part or all of an employee’s salary is paid by federal funding sources, a
privately sponsored source, from non-educational and general, or local funds.
When the employing district is a public junior college or junior college district, the
employer shall contribute to the retirement system an amount equal to 50% of the state
contribution rate for certain instructional or administrative employees; and 100% of the
state contribution rate for all other employees.
In addition to the employer contributions listed above, there are two additional surcharges an
employer is subject to:
When employing a retiree of the Teacher Retirement System the employer shall pay both
the member contribution and the state contribution as an employment after retirement
surcharge.
When a school district or charter school does not contribute to the Federal Old-Age,
Survivors and Disability Insurance (OASDI) Program for certain employees, they must
contribute 1.5% of the state contribution rate for certain instructional or administrative
employees; and 100% of the state contribution rate for all other employees.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
28
NOTE 7. DEFINED BENEFIT PENSION PLAN – CONTINUED
Actuarial Assumptions
The total pension liability in the August 31, 2016 actuarial valuation was determined using the
following actuarial assumptions:
Valuation Date August 31, 2016
Actuarial Cost Method Individual Entry Age Normal
Asset Valuation Method Market Value
Single Discount Rate 8.00%
Long-term expected Investment Rate of Return* 8.00%
Inflation 2.50%
Salary Increases including inflation 3.50% to 9.50%
Payroll Growth Rate 2.50%
Benefit Changes during the year None
Ad hoc post-employment benefit changes None
The actuarial methods and assumptions are primarily based on a study of actual experience for
the four year period ending August 31, 2014 and adopted on September 24, 2015.
Discount Rate
The discount rate used to measure the total pension liability was 8.0%. There was no change in
the discount rate since the previous year. The projection of cash flows used to determine the
discount rate assumed that contributions from plan members and those of the contributing
employers and the non-employer contributing entity are made at the statutorily required rates.
Based on those assumptions, the pension plan’s fiduciary net position was projected to be
available to make all future benefit payments of current plan members.
Therefore, the long-term expected rate of return on pension plan investments was applied to all
periods of projected benefit payments to determine the total pension liability. The long-term rate
of return on pension plan investments is 8%. The long-term expected rate of return on pension
plan investments was determined using a building-block method in which best-estimates ranges
of expected future real rates of return (expected returns, net of pension plan investment expense
and inflation) are developed for each major asset class. These ranges are combined to produce
the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
29
NOTE 7. DEFINED BENEFIT PENSION PLAN – CONTINUED
Discount Rate – Continued
Best estimates of geometric real rates of return for each major asset class included in the
Systems target asset allocation as of August 31, 2016 are summarized below:
Long-term
Expected
Portfolio
Target Real Return Real Rate of
Asset Class Allocation Geometric Basis Return*
Global Equity
U.S. 18% 4.6% 1.0%
Non-U.S. Developed 13% 5.1% 0.8%
Emerging Markets 9% 5.9% 0.7%
Directional Hedge Funds 4% 3.2% 0.1%
Private Equity 13% 7.0% 1.1%
Stable Value
U.S. Treasuries 11% 0.7% 0.1%
Absolute Return 0% 1.8% 0.0%
Stable Value Hedge Funds 4% 3.0% 0.1%
Cash 1% -0.2% 0.0%
Real Return
Global Inflation Linked Bonds 3% 0.9% 0.0%
Real Assets 16% 5.1% 1.1%
Energy and Natural Resources 3% 6.6% 0.2%
Commodities 0% 1.2% 0.0%
Risk Parity
Risk Parity 5% 6.7% 0.3%
Inflation Expectation 2.2%
Alpha 1.0%
Total 100.0% 8.7%
* The Expected Contribution to Returns incorporates the volatility drag
resulting from the conversion between Arithmetic and Geometric
mean returns.
Discount Rate Sensitivity Analysis
The following schedule shows the impact of the Net Pension Liability if the discount rate used
was 1% less than and 1% greater than the discount rate that was used (8%) in measuring the
2016 Net Pension Liability.
1% Decrease in
Discount Rate
(7.0%)
Discount Rate (8.0%) 1% Increase in
Discount Rate
(9.0%)
Academy’s
proportionate share of
the net pension
liability
$1,627,129
$1,051,346
$562,965
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
30
NOTE 7. DEFINED BENEFIT PENSION PLAN – CONTINUED
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At August 31, 2017, the Academy reported a liability of $1,051,346 for its proportionate share of
the TRS’s net pension liability. This liability reflects a reduction for State pension support
provided to the Academy. The amount recognized by the Academy as its proportionate share of
the net pension liability, the related State support, and the total portion of the net pension liability
that was associated with the Academy were as follows:
Academy’s Proportionate share of the collective net pension liability $ 1,051,346
State’s proportionate share that is associated with Academy 4,035,754
Total $ 5,087,100
The net pension liability was measured as of August 31, 2016 and the total pension liability used
to calculate the net pension liability was determined by an actuarial valuation as of that date. The
employer’s proportion of the net pension liability was based on the employer’s contributions to the
pension plan relative to the contributions of all employers to the plan for the period September 1,
2015 thru August 31, 2016.
At August 31, 2016 the employer’s proportion of the collective net pension liability was
0.0027822% which was a decrease of 0.0003123% from its proportion measured as of
August 31, 2015.
Changes Since the Prior Actuarial Valuation
There were no changes of benefit terms that affected measurement of the total pension liability
during the measurement period.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
For the year ended August 31, 2017, the Academy recognized pension expense of $418,815 and
revenue of $418,815 for support provided by the State.
At August 31, 2017, the Academy reported its proportionate share of the TRS’s deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual economic experience $ 16,485 $ 31,393
Changes in actuarial assumptions $ 32,043 $ 29,142
Difference between projected and actual investment earnings $ 89,026 $ -
Changes in proportion and difference between the employer’s
contributions and the proportionate share of contributions
$ 450,620 $ 1,107
Contributions paid to TRS subsequent to the measurement date
$ 84,783
$ -
Total $ 672,957 $ 61,642
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
31
NOTE 7. DEFINED BENEFIT PENSION PLAN – CONTINUED
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions – Continued
The net amounts of the employer’s balances of deferred outflows and inflows of resources related to
pensions will be recognized in pension expense as follows:
NOTE 8. HEALTH CARE COVERAGE
During the period ended August 31, 2017, employees of the Academy who met minimum eligibility
requirements were covered by a state-wide health care plan, TRS Active Care. The Academy's
participation in this plan is renewed annually. The Academy paid into the Plan $341 per month per
employee and $266 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 Caremark 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.
NOTE 9. 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.
Year ended August 31:
Pension Expense
(Income) Amount
2018 $ 99,970
2019 99,970
2020 156,755
2021 95,606
2022 73,187
Thereafter 1,044
Total $ 526,532
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
32
NOTE 9. RETIREE HEALTH PLAN – CONTINUED
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 2015 – 2017.
Year Rate Amount Rate Amount Rate Amount
2017 0.65% 32,279$ 1.00% 49,659$ 0.55% 27,313$
2016 0.65% 33,115$ 1.00% 50,946$ 0.55% 28,020$
2015 0.65% 31,100$ 1.00% 43,124$ 0.55% 26,314$
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 $15,365, $18,453, and $18,231 were
recognized for the years ended August 31, 2017, 2016 and 2015, respectively, as equal revenues
and expenditures.
NOTE 10. 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.
Litigation and Contingencies
The Academy is a party to various legal actions none of which is believed by administration to
have a material effect on the financial condition of the Academy. Accordingly, no provision for
losses has been recorded in the accompanying combined financial statements for such
contingencies.
The Academy participates in state and federal grant programs which are governed by various
rules and regulations of the grantor agencies. Costs charged to the respective grant programs are
subject to audit and adjustment by the grantor agencies; therefore, to the extent that the
Academy has not complied with the rules and regulations governing the grants, if any, refunds of
any money received may be required and the collectability of any related receivable at August 31,
2017 may be impaired. In the opinion of the Academy, there are no significant contingent
liabilities relating to compliance with the rules and regulations governing the respective grants;
therefore, no provision has been recorded in the accompanying combined financial statements for
such contingencies.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
33
NOTE 11. CAPITAL LEASES
The Academy has entered into lease agreements as lessee for financing the acquisition of computer
equipment and software. The lease agreements qualify as capital leases for accounting purposes,
and therefore, have been recorded at the present value of the future minimum lease payments as of
the inception date.
Equipment and software with a historical cost of $491,040 was under capital lease at August 31,
2017. Because the cost of the individual items was below the Academy’s capitalization threshold, the
entire cost was recorded as expense.
The following schedule shows the future minimum lease payments under the capitalized lease
together with the present value of the net minimum lease payments as of August 31, 2017:
Annual
Lease Payments
166,039$
Total minimum lease payments 166,039
Less: Amounts representing interest (4,034)
Present value of net minimum lease payments 162,005$
Year Ending
August 31,
2019
NOTE 12. RELATED PARTY TRANSACTIONS
The Westlake Academy Foundation contributed $1,146,465 to the Academy during the fiscal year
ended August 31, 2017. In addition to the use of facilities discussed in Note 4, the Town of Westlake
contributed $315,000 to the Academy during the year.
NOTE 13. EVALUATION OF SUBSEQUENT EVENTS
The Academy has evaluated subsequent events through November 28, 2017, the date which the
financial statements were available to be issued.
NOTE 14. NEW ACCOUNTING PRONOUNCEMENTS
The GASB issued Statement No. 81, Irrevocable Split-Interest Agreements, which will be effective for
periods beginning after December 15, 2016. The objective of this Statement is to improve accounting
and financial reporting for irrevocable split-interest agreements by providing recognition and
measurement guidance for situations in which a government is a beneficiary of the agreement. This
Statement applies to all state and governmental entities. This standard becomes effective for the
Academy in fiscal year 2018. The Academy will evaluate the impact of this statement and take the
necessary steps to implement it.
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
34
NOTE 14. NEW ACCOUNTING PRONOUNCEMENTS – CONTINUED
The GASB issued Statement No. 82, Pension Issues- an amendment of GASB Statements No. 67,
No. 68, and No. 73, which will be effective for periods beginning after June 15, 2017. The objective of
this Statement is to address certain issues that have been raised with respect to Statements No. 67,
Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and
No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the
Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and
68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll-related
measures in required supplementary information, (2) the selection of assumptions and the treatment
of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes,
and (3) the classification of payments made by employers to satisfy employee (plan member)
contribution requirements. This Statement applies to all state and governmental entities. This
standard becomes effective for the Academy in fiscal year 2018. The Academy will evaluate the
impact of this statement and take the necessary steps to implement it.
The GASB issued Statement No. 86, Omnibus 2017, which will be effective for periods beginning
after June 15, 2017. The primary objective of this Statement is to improve consistency in accounting
and financial reporting for in-substance defeasance of debt by providing guidance for transactions in
which cash and other monetary assets acquired with only existing resources—resources other than
the proceeds of refunding debt—are placed in an irrevocable trust for the sole purpose of
extinguishing debt. This Statement applies to all state and governmental entities. This standard
becomes effective for the Academy in fiscal year 2018. The Academy will evaluate the impact of this
statement and take the necessary steps to implement it.
NOTE 15. EXPENDITURES IN EXCESS OF APPROPRIATIONS
For the year ending August 31, 2017, expenditures exceeded appropriations in the following
functions: Curriculum and Staff Development ($248); School Leadership ($21,504); Guidance,
Counseling and Evaluation Services ($38,083); General Administration ($178); and Community
Services ($4,594). In addition, expenditures exceeded appropriations for the general fund as a whole
by $26,801. These over-expenditures will be addressed through future appropriations.
REQUIRED SUPPLEMENTARY INFORMATION
WESTLAKE ACADEMY EXHIBIT E-1
BUDGETARY COMPARISON SCHEDULE – GENERAL FUND
FOR THE YEAR ENDED AUGUST 31, 2017
36
Actual Variance With
Data Amounts Final Budget
Control GAAP BASIS Positive or
Codes Original Final (Negative)
REVENUES
5700 Local and intermediate sources 1,677,862$ 1,644,592$ 1,626,401$ (18,191)$
5800 State program revenues 6,721,311 6,583,371 6,592,016 8,645
5020 Total revenues 8,399,173 8,227,963 8,218,417 (9,546)
EXPENDITURES
CURRENT:
0011 Instruction 4,788,354 4,759,616 4,749,555 10,061
0012 Instructional resources and media services 84,089 82,639 81,227 1,412
0013 Curriculum and staff development 127,802 86,623 86,871 (248)
0021 Instructional leadershp 276,548 278,148 266,090 12,058
0023 School leadership 851,510 853,935 875,439 (21,504)
0031 Guidance, counseling, and evaluation services 236,600 228,950 267,033 (38,083)
0033 Health services 68,024 68,024 67,489 535
0036 Extracurricular activities 175,826 246,013 242,560 3,453
0041 General administration 276,495 307,126 307,304 (178)
0051 Facilities maintenance and operations 940,838 893,738 886,943 6,795
0053 Data processing services 192,401 176,401 173,352 3,049
0061 Community services 122,020 122,020 126,614 (4,594)
0072 Debt service 257,238 257,238 256,795 443
6030 Total expenditures 8,397,745 8,360,471 8,387,272 (26,801)
1100 Excess (deficiency) of revenues over
(under) expenditures 1,428 (132,508) (168,855) (36,347)
OTHER FINANCING SOURCES
7913 Transfers in - 57,090 37,090 (20,000)
Total other financing sources - 57,090 37,090 (20,000)
1200 Net change in fund balances 1,428 (75,418) (131,765) (56,347)
0100 Fund balances--beginning 1,071,036 1,071,036 1,071,036 -
3000 Fund balances--ending 1,072,464$ 995,618$ 939,271$ (56,347)$
Budgeted Amounts
WESTLAKE ACADEMY
NOTES TO BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED AUGUST 31, 2017
37
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 meeting 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 members 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.
WESTLAKE ACADEMY EXHIBIT E-2
SCHEDULE OF ACADEMY’S PROPORTIONATE SHARE OF NET PENSION LIABILITY –
TEACHER RETIREMENT SYSTEM
FOR THE LAST TEN PLAN YEARS
38
2016 2015 2014
Academy's proportion of the net pension liability 0.0027822% 0.0030945% 0.0007190%
Academy's proportionate share of net pension liability 1,051,346$ 1,093,865$ 192,056$
State's proportionate share of net pension liability
associated with the Westlake Academy 4,035,754 3,667,893 2,965,583
Total 5,087,100$ 4,761,758$ 3,157,639$
Academy's covered payroll 5,094,571$ 4,784,695$ 4,300,931$
Academy's proportionate share of net pension liability
as a percentage of its covered payroll 20.64% 22.86% 4.47%
Plan fiduciary net position as a
percentage of total pension liability 78.00% 78.43% 83.25%
Note: Only three years of data is presented in accordance with GASB #68, paragraph 138. "The
information for all periods for the 10-year schedules that are required to be presented as required
supplementary information may not be available initially. In these cases, during the transition period, that
information should be presented for as many years as are available. The schedules should not include
information that is not measured in accordance with the requirements of this Statement."
WESTLAKE ACADEMY EXHIBIT E-3
SCHEDULE OF CONTRIBUTIONS – TEACHER RETIREMENT SYSTEM
FOR THE LAST TEN FISCAL YEARS
39
2017 2016 2015
Statutorially required contributions 131,436$ 88,399$ 92,325$
Actual contributions in relation to
statutorially required contributions 131,436 88,399 92,325
Contribution deficiency (excess) -$ -$ -$
Academy's covered payroll 4,965,944$ 5,094,571$ 4,784,694$
Contributions as a percentage
of Academy's covered payroll 2.65% 1.74% 1.93%
Note: GASB 68, Paragraph 81.2.b requires that the data in this schedule be presented as of the
Academy's current fiscal year as opposed to the time period covered by the measurement date.
Note: Only three years of data is presented in accordance with GASB #68, paragraph 138. "The
information for all periods for the 10-year schedules that are required to be presented as required
supplementary information may not be available initially. In these cases, during the transition period, that
information should be presented for as many years as are available. The schedules should not include
information that is not measured in accordance with the requirements of this Statement."
COMBINING STATEMENTS
WESTLAKE ACADEMY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
AUGUST 31, 2017
40
224 315 410 461
Data
Control
Codes
IDEA Part B
Formula
SSA IDEA
Part B
Discretionary
State
Textbook
Fund
Campus
Activity
Funds
ASSETS
1110 Cash and cash equivalents -$ -$ -$ 7,848$
1240 Due from other governments - - 3,352 -
1290 Other receivables - - - 5,450
1410 Prepaid expenditures - - - -
1000 Total assets -$ -$ 3,352$ 13,298$
LIABILITIES AND FUND BALANCES
Liabilities:
2110 Accounts payable -$ -$ -$ -$
2170 Due to other funds - - 3,352 -
Total liabilities - - 3,352 -
Fund balances:
Nonspendable for:
3430 Prepaid items - - - -
Restricted for:
3490 Donor stipulations - - - -
Committed for:
3545 Campus activities - - - 13,298
3000 Total fund balances - - - 13,298
4000 Total liabilities and fund balances -$ -$ 3,352$ 13,298$
EXHIBIT F-1 – CONCLUDED
41
480 482 484 496 497 498
Hudson -
Mentor
Discretionary
WAF Fund
100 Grant
Foundation-
Local Grants
Hudson-
Support
Overall
Programming
Foundation-
Student
Scholarships
International
Mindedness
Education
Symposium
Total
Nonmajor
Governmental
Funds
-$ 3,894$ 1,146$ -$ -$ 3,956$ 16,844$
- - - - - - 3,352
- - - - - - 5,450
- - 4,140 - - - 4,140
-$ 3,894$ 5,286$ -$ -$ 3,956$ 29,786$
-$ 457$ -$ -$ -$ -$ 457$
- - - - - - 3,352
- 457 - - - - 3,809
- - 4,140 - - - 4,140
- 3,437 1,146 - - 3,956 8,539
- - - - - - 13,298
- 3,437 5,286 - - 3,956 25,977
-$ 3,894$ 5,286$ -$ -$ 3,956$ 29,786$
WESTLAKE ACADEMY
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31, 2017
42
224 315 410 461
Data
Control
Codes
IDEA Part B
Formula
SSA IDEA
Part B
Discretionary
State
Textbook
Fund
Campus
Activity
Funds
REVENUES
5700 Local and intermediate sources -$ -$ -$ 82,051$
5800 State program revenues - - 8,223 885
5900 Federal program revenues 104,937 35,215 - -
5020 Total revenues 104,937 35,215 8,223 82,936
EXPENDITURES
Current:
0011 Instruction 104,937 35,215 8,223 -
0013 Curriculum and instructional
staff development - - - -
0023 School leadership - - - -
0036 Extracurricular activities - - - 96,257
6030 Total expenditures 104,937 35,215 8,223 96,257
1100 EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - - - (13,321)
OTHER FINANCING SOURCES
8911 Transfers out - - - (37,090)
1200 NET CHANGE IN FUND BALANCES - - - (50,411)
0100 FUND BALANCES, BEGINNING - - - 63,709
3000 FUND BALANCES, ENDING -$ -$ -$ 13,298$
EXHIBIT F-2 - CONCLUDED
43
480 482 484 496 497 498
Hudson -
Mentor
Discretionary
WAF Fund
100 Grant
Foundation-
Local Grants
Hudson-
Support
Overall
Programming
Foundation-
Student
Scholarships
International
Mindedness
Education
Symposium
Total
Nonmajor
Governmental
Funds
-$ 92,118$ 91,474$ -$ 2,500$ 1,557$ 269,700$
54 767 1,413 - - - 11,342
- - - - - - 140,152
54 92,885 92,887 - 2,500 1,557 421,194
1,133 50,646 65,805 16,087 2,500 - 284,546
- 20,000 21,846 - - - 41,846
2,325 18,802 - 879 - 1,198 23,204
- - - - - - 96,257
3,458 89,448 87,651 16,966 2,500 1,198 445,853
(3,404) 3,437 5,236 (16,966) - 359 (24,659)
- - - - - - (37,090)
(3,404) 3,437 5,236 (16,966) - 359 (61,749)
3,404 - 50 16,966 - 3,597 87,726
-$ 3,437$ 5,286$ -$ -$ 3,956$ 25,977$
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
44
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
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, 2017, and the related notes to the financial statements,
which collectively comprise the Academy's basic financial statements and have issued our
report thereon dated November 28, 2017.
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
45
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
November 28, 2017