HomeMy WebLinkAboutAudit FY 17-18 PresentationWestlake
Academy
Board Meeting
December 3, 2018
Overview
•Introduction
•Audit Process
•Required Communications
•Audit Results
•Financial Highlights
•New Accounting Pronouncements
•Questions
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3
Introductions
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Presenting Today
John DeBurro, CPA
Partner, Assurance Services
Engagement partner for the audit
20 years of experience
Member of the Government Financial
Officers Association (GFOA) Special
Review Committee
Practice emphasis in auditing and
consulting for municipalities, school
districts, and nonprofit agencies
Remember: Weaver is your auditor all year. We are always
available to answer your questions.
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Engagement Leadership
John DeBurro
Engagement Partner,
Assurance Services
Ben Cohen
Manager,
Assurance Services
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Engagement Team
Westlake Academy
Ben Cohen, CPA
Manager
Jacqueline Diaz
Senior Associate II
Elisa Gilbertson, CPA
Data Analytics
Consulting
John DeBurro, CPA
Engagement Partner
Audit
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Audit Process
Engagement Timeline
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Initial Audit
Planning
Interim Fieldwork
Aug 27-31
Final Fieldwork
Oct 15 –30
Release Audit
Opinion
Nov 26
Board Meeting
Dec 3
Discuss
Developments/
Issues
Continuous
Communication
Audit Process
•The audit was performed in accordance with
Generally Accepted Auditing Standards
(GAAS) and Generally Accepted Government
Auditing Standards (GAGAS)
•The audit process was a risk-based approach
in which we identified potential areas of risk
that could lead to material misstatement of
the financial statements. We tailored our audit
programs and resources to specifically
address the following areas of risk:
•State Foundation School Program revenue
•State and local grant revenues
•Payroll and payroll related liabilities
•Cash disbursements and related payables
•Net pension and OPEB liabilities
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Audit Process
•Walkthrough of accounting controls over significant
transaction cycles:
•Budget
•Purchasing and Accounts Payable
•Payroll
•Revenue
•Test of internal controls:
•Cash disbursements
•Payroll
•Test of compliance
•PFIA (Public Funds Investment Act)
•State Compliance Requirements
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Interim fieldwork and risk assessment were performed
in August 2018. Procedures included:
Audit Process
•Testing of significant account balances using a combination
of vouching of material transactions, sampling transactions
and applying analytical procedures
•Assisting with the preparation of the financial statements
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Final fieldwork-performed in October 2018
Procedures included:
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Auditor Communications
for the year ended August 31. 2018
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Required Communications to
Those in Charge of Governance
Communication Results
Auditor’s responsibility under
generally accepted auditing
standards (GAAS)
The financial statements are the responsibility
of the Academy. Our audit was designed in
accordance with GAAS in the U.S. and
provide for reasonable rather than absolute
assurance that the financial statements are
free of material misstatement. Our
responsibility is to express an opinion about
whether the financial statements prepared
by management with your oversight are fairly
presented , in all material respects, in
conformity with U.S. generally accepted
accounting principles. Our audit of the
financial statements does not relieve you or
management of your responsibilities.
The audit of the fiscal year 2018 financial
statements has been completed and we
have issued an unmodified opinion.
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Required Communications to
Those in Charge of Governance
Communication Results
Auditor’s Responsibility under
Government Auditing
Standards
In addition to the GAAS responsibilities, we
are required to issue a written report on our
consideration of internal controls and identify
significant deficiencies, including material
weaknesses, if any. Our reports do not
provide assurance on internal controls. We
design our audit to provide reasonable
assurance of detecting material
misstatements resulting from noncompliance
with provisions of contracts or grant
agreements that have a direct or material
effect on the financial statements. We issue
a written report on the results of these
procedures; however, our report does not
express an opinion on compliance.
No findings noted.
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Required Communications to
Those in Charge of Governance
Communication Results
Unusual transactions and the
adoption of new accounting
principles
The significant accounting policies used by the
Academy are described in Note 1 to the basic
financial statements.
The Academy implemented GASB Statement No.
75, “Accounting and Financial Reporting for
Post-Employment Benefits Other Than Pensions”
during 2018. As a result, the Academy’s
governmental activities’ beginning net position
was reduced by $4,480,552, the cumulative
effect of implementation of this statement.
We noted no transactions entered into by the
Academy during the year for which there is a
lack of authoritative guidance or consensus.
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Required Communications to
Those in Charge of Governance
Communication Results
Fraud and illegal acts No fraud, irregularities, or illegal acts were
noted.
Material weakness in internal
control
No material weaknesses noted.
Other information contained in
documents containing audited
financial statements
We performed limited procedures on the
MD&A and RSI. We did not provide any
assurance on this information.
Management judgments and
accounting estimates
Management’s estimates of state foundation
revenue and the net pension and OPEB
liabilities were evaluated and determined to
be reasonable in relation to the financial
statements as a whole.
Management representations We have requested certain representations
from management that were included in the
management representation letter.
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Required Communications to
Those in Charge of Governance
Communication Results
Difficulties encountered No significant difficulties were encountered during
our audit.
Management consultations We are not aware of management consulting with
other accountants for a second opinion.
Auditor independence No independence issues noted.
Disagreements with
Management
There were no disagreements with management
during the current year.
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Required Communications to
Those in Charge of Governance
Communication Results
Audit adjustments All known and likely misstatements identified during the audit,
other than those that are trivial, have been communicated to
management.
Management has deemed the following adjustment
immaterial individually and in the aggregate and therefore it
has not been reflected in the Academy’s financial statements:
$158,182 to reduce lease interest/debt service expense and
increase beginning fund balance for the payment that was
made in advance in prior year.
No material adjustments have been posted as a result of our
audit.
Other material written
communications
between Weaver and
Tidwell, L.L.P., and the
Academy
Nothing to note.
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Auditor Results
Auditor Results
•We have issued the Independent Auditor’s Report on the financial
statements
–Unmodified opinion
•We have issued the Independent Auditor’s Report on Internal
Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
–No findings noted.
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Financial Highlights
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Financial Highlights
Comparison of Governmental Funds Expenditures by Fund
(in millions of dollars)
$8.5
$0.5
FY 2018
General Fund
Other Funds
Governmental Funds Expenditures for FY 2018 totaled $9.0 million, a $188K or 2.1% increase
•Instruction costs increased by $277K over FY17.
•Instructional leadership costs decreased by $113K over the previous year.
•Debt service costs decreased by $89K.
$8.4
$0.4
FY 2017
General Fund
Other Funds
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Financial Highlights
Comparison of Governmental Fund Expenditures
$5.5
$1.1
$0.7
$0.3
$1.1
$0.1 $0.2
$5.2
$1.2
$0.6 $0.3
$1.1
$0.1 $0.2
$-
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
Instruction,
Curriculum,
and Media
Services
Instructional
and School
Leadership
Student
Support, Food
Svs, and
ExtraCurricular
Activities
General
Administration
Facilities
Maintenance
and Data
Processing
Community
Services
Debt service
2018
2017
(2 -year comparison –current year and prior year –in millions)
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Financial Highlights
Comparison of Governmental Revenues by Source
Governmental Revenues for FY 2018 totaled $9.2 million, a $538K or 6.2%
increase. Increase is primarily attributable to a $614K increase in state
program revenues.
19.8%
79.0%
1.2%
FY 2018 Revenues
Local and intermediate
sources
State program revenues
Federal program
revenues
22.0%
76.4%
1.6%
FY 2017 Revenues
Local and intermediate
sources
State program
revenues
Federal program
revenues
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Financial Highlights
Comparison of Governmental Revenues by Source
(2 -year comparison –current year and prior year –in millions)
$1.8
$7.2
$0.1
$1.9
$6.6
$0.1 $-
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
Local and
intermediate sources
State program
revenues
Federal program
revenues
2018
2017
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Financial Highlights
Fund Balances
Governmental Funds’ Fund Balances
As of August 31, 2018, the Academy’s governmental funds reported a
combined ending fund balance of $1.1million as follows:
•General Fund $1,105,605
•Local Grant Fund 4,215
•Other Funds 11,378
$1,121,198
General Fund fund balance increased by $166,334 during the year ended
August 31, 2018. The ending balance, $1,121,198, represents 13% of fiscal
year 2018 General Fund expenditures.
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Financial Highlights
Budgetary Highlights –General Fund
The District had an overall favorable budgetary variance of $143,760
(net change in fund balance):
•Actual revenues were $170,557K more than budgeted
(approximately 2% variance).
•Actual expenditures were over budget by $27K (less than 1%
variance).
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Standards Required to be
Implemented in FY2020
Effective for the year ended August 31, 2020
GASB 84 –Fiduciary Activities
The primary objective of this Statement is to improve guidance regarding the
identification of fiduciary activities for accounting and financial reporting purposes
and how those activities should be reported.
This Statement establishes criteria for identifying fiduciary activities of all state and
local governments. The focus of the criteria generally is on (1) whether a government
is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a
fiduciary relationship exists. Separate criteria are included to identify fiduciary
component units and postemployment benefit arrangements that are fiduciary
activities.
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Standards Required to be
Implemented in FY2021
Effective for the year ended August 31, 2021
GASB 87 –Leases
The objective of this Statement is to better meet the information needs of financial
statement users by improving accounting and financial reporting for leases by
governments.
This Statement increases the usefulness of governments’ financial statements by
requiring recognition of certain lease assets and liabilities for leases that previously
were classified as operating leases and recognized as inflows of resources or outflows
of resources based on the payment provisions of the contract.
It establishes a single model for lease accounting based on the foundational principle
that leases are financings of the right to use an underlying asset.
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We appreciate the
opportunity to work with
Westlake Academy
and look forward to our
continued relationship.
Questions?
John DeBurro, CPA | Engagement Partner
972.448.6970 | john.deburro@weaver.com