HomeMy WebLinkAboutRes 14-01 WA Approving Annual Audit Report FY 12-13 WESTLAKE ACADEMY
SOLITTION NO. 14-01
A RESOLUTION OF THE WESTLAKE ACADEMY BOARD OF TRUSTEES
APPROVING THE FISCAL YEAR 2012-2013 ANNUAL AUDIT REPORT FROM
PATTILL , BROWN & BILL, LLP.
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, DE IT RESOLVED BY THE BOARD F TRUSTEES OF
WESTLAKE ACADEMY:
SECTION l: 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 2012-2013 annual audit report from Pattillo, Brown & Hill, LLP. attached as Exhibit
"A 99
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 Council hereby determines that it would have adopted this Resolution without the
invalid provision.
Resolution 14-01
Page 1 of 2
SEC'T'ION 4: That this resolution shall become effective from and after its date of
passage.
PASSER AND APPROVED BY THE BOARD OF TRUSTEES OF WES'TLAKE
ACADEMY, A CHARTER SCHOOL OF THE ST'A'TE OF 'TEXAS, ON THE 13th DAY
OF JANUARY, 2014.
f
ATTEST: Laura Wheat, President
Kell Edwa , Board Secretary homa r, S erin ndent
APPROVF S TO,1 MM:
Ja Bube o,vQ_Stanton Lowry,
School Attorney
Resolution 14-01
Page 2 of 2
WESTLAKE ACADE' MY
International w r a Charter
ANNUAL II \A\ CIAI
REPORT FOR R I I I I : YEAR
ENDED DI :D •fit Tt . S. I , 31 , 2(1) I3
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to f?lp,
Vision,
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PA 'I' TILLC?, B ]R Off' N 8z HILL, r..L_n.
CERTIFIED PUBLIC ACCOUNTANTS ■ gU51NE55 CONSULTANTS
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31,2013
TABLE OF CONTENTS
Exhibit Pate
Certificate of Board 1
Independent Auditor's Report 2-4
Management's Discussion and Analysis 5- 12
Basic Financial Statements
Government-wide Statements:
A-1 Statement of Net Assets 13
B-1 Statement of Activities 14
Governmental Fund Financial Statements:
C-1 Balance Sheet 15
C-3 Statement of Revenues,Expenditures, and Changes in Fund Balance 16
D-1 Statement of Fiduciary Net Assets 17
Notes to the Financial Statements 18-26
Required Supplementary Information
E-1 Statement of Revenues,Expenditures,and Changes in Fund Balance
Budget and Actual—General Fund 27
Notes to Required Supplementary Information 28
Combining Statements
Nonmajor Governmental Funds:
F-I Combining Balance Sheet 29-30
F-2 Combining Statement of Revenues,Expenditures,and Changes in Fund Balances 31 -32
Internal Control Report
Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 33 -34
i
it
�.r
CERTIFICATE OF BOARD
Westlake Academy Tarrant 220-810
Name of School County Co.-Dist.Number
We,the undersi ed,certify that the attached annual financial reports of the above-named school district were reviewed and
(check one) approved disapproved for the year ended August 31,2013,at a meeting of the Board of Trustees of
such school district on the 13t`day of January 20I4.
r ""/elelt
Signa of Board Secretary Signature of Board President
If the Board of Trustees d' _. Proy d pf the auditors'r poz the f sons #cax dzsapprcav ng it s(are}a
(attach list as necessary)
1
P111fkm-
PATTILLO, BROWN & HILL,, i..l..r'.
CERTIFIEQ PUBLIC ACCQVNTANT5■BV5INE55 CQN5VLTANT5
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") as of and for the year ended August 31, 2013, and the related notes
to the financial statements, which collectively comprise the Academy's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors'Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors' judgment,
including the assessment of the risks of material misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the financial statements in order to design audit procedures
2
115 SOUTH CHURCH STREET■P.O.BOX 475■HILLSBORO,TX 76645■(254)582-2583■FAX:(254)582-5731 ■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■WACO,TX(254)772-4901
TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904
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.
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,
2013, and the respective changes in financial position for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and budgetary comparison information on pages 5 through 12
and 27 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 Westlake Academy's basic financial statements. The combining and individual
nonmajor fund financial statements are presented for the purposes of additional analysis and are not a
required part of the basic financial statements.
The combining and individual nonmajor fund financial 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.
3
In our opinion, the combining and individual nonmajor fund financial statements are fairly stated
in all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
November 26, 2013, on our consideration of Westlake 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 Westlake
Academy's internal control over financial reporting and compliance.
J of
November 26, 2013
I
4
WESTLAKE ACADEMY
(A COMPONENT UNIT OF TOWN OF WESTLAKE)
MANAGEMENT'S DISCUSSION AND ANALYSIS
AUGUST 31,2013
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, 2013. 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
$992,981 (Net Position). This is an increase of$173,891 for the year ended August 31,2013.
• The Academy had$5,762,652 in expenses related to governmental activities of which$651,305 of these
expenses were offset by program-specific charges for services or grants and contributions. This is a total
expense decrease of$30,908 from the prior year.
• The General Fund reported a fund balance this year of$959,240, an increase of$144,753 from the prior
year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts—management's discussion and analysis (this section), the basic financial
statements, and required supplementary information. The basic financial statements include two kinds of statements that
present different views of the Academy:
Figure A-1,Required Components of the
• The first two statements are government-wide financial Academy's Annual Financial Report
statements that provide both long-term and short-term
information about the Academy's overall financial
status. Xaaa�eHSecst a Basic Required
7jC aw(;ow Financial Supplementary
• The remaining statements are fund financial statements
Statements Information
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. r
• Fiduciary fund statements provide information about Government-Wide n
ry J l� f ti bt Financial Financial �
the financial relationships in which the District acts Statements Statements
'�istactcla2
solely as a trustee or agent for the benefit of others, to
whom the resources in question belong.
Summary Detail
The financial statements also include notes (starting on page 18) 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. Figure A-1 shows how the required parts of
this annual report are arranged and related to one another.
5
The combining statements for non-major funds contain even more information about the Academy's individual funds.
Figure A-2 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 management's
discussion and analysis explains the structure and contents of each of the statements.
Government-wide Statements
The government-wide statements beginning on page 13, 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 government's assets and
liabilities. All of the current year's revenues and expenses are accounted for in the statement of activities regardless of when
cash is received or paid.
The Academy's revenue is divided into those provided by outside parties who share the costs of some programs, such as
payments received from 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 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.
Figure A-2
Major features of the Academ 's Government-wide and Fund Financial Statements
Type of Statement Government-wide Governmental Funds Proprietary Funds Fiduciary Funds
Entire government The activities of the Activities the Academy Instances in which the
(except fiduciary funds) Academy that are not operates similar to private Academy is the trustee or
Scope and the Academy's proprietary or fiduciary businesses i.e.self- agent for someone else's
component units insurance resources
Statement of Net Balance Sheet, Statement Statement of Net Statement of Fiduciary
Position, Statement of of Revenues, Position,Statement of Net Position,Statement
Required Financial Activities Expenditures and Fund Revenues,Expenses and of Changes in Fiduciary
Statements Balances Changes in Fund Net Net Position
Position,Statement of
Cash Flows
Accrual accounting and Modified accrual Accrual accounting and Accrual accounting and
Accounting basis and economic resources accounting and current economic resources focus economic resources focus
measurement focus focus. financial resources focus
All assets and liabilities, Only assets expected to All assets and liabilities, All assets and liabilities
both financial and capital, be used up and liabilities both financial and capital,both short-term and long-
Types of accountability short-term and long-term that become due during and short-term and long- term;the Academy's
information the year or soon term. funds do not currently
thereafter. No capital include capital assets,
assets included. although they can.
All revenues and Revenue for which cash All revenues and All revenues and
expenses during year, is received during or soon expenses during year, expenses during year,
regardless of when cash is after the end of the year, regardless of when cash is regardless of when cash is
Types of Inflow/ouflow received or paid. expenditures when goods received or paid. received or paid.
Information or services have been
received and payment is
due during the year or
soon thereafter.
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 and liabilities—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,respectively.
6
• To assess the overall health of the Academy,you need to consider additional non-financial factors such as changes in
the Academy's average daily attendance and the condition of the Academy's facilities.
The government-wide financial statements of the Academy include the Governmental activities. Most of the Academy's
basic services are included here, such as instruction, curriculum and staff development, extracurricular activities,
maintenance,health services and general administration. State funds, donations and grants finance most of these activities.
Component Unit
The government-wide financial statements also present the activity of Westlake Academy Foundation, a discretely presented
component unit. The Foundation was organized exclusively for charitable and educational purposes and provides funds to
help support the Academy. During 2013, the Foundation contributed $886,820 to the Academy to enhance educational
opportunities.
Fund Financial Statements
The fund financial statements begin on page 15 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 31,2013.
• 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 funds—Some schools are the trustee, or fiduciary, for certain funds. It is also responsible
for other assets that—because of a trust arrangement—can be used only for the trust beneficiaries.
These schools are responsible for ensuring that the assets reported in these funds are used for their
intended purposes. All of these fiduciary activities are reported in a separate statement of fiduciary net
position and a statement of changes in fiduciary net position on page 17. These activities are excluded
from the school's government-wide financial statements because they cannot use these assets to
finance their operations.
• Proprietary funds—(None at August 31, 2013). 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.
• Internal Service funds report activities that provide supplies and services for the Academy's other
programs and activities—such as a School's Self Insurance Fund or Print Shop.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS
The following analysis focuses on the net position(Table A-1),sources of revenue(Table A-2), and changes in net position(Table
A-3)of the Academy's governmental activities. The Academy's combined net position was$2,371,440 at August 31,2013.
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. Net position of the
District's governmental activities increased from$819,090 to$992,981. Unrestricted net position—the part of net position that can
be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal
requirements—was$931,094 and$758,127 at August 31,2013 and 2012,respectively.
This increase in governmental net position was the net result of several factors. The primary reason for the increase in the
governmental activities was an increase in unrestricted grants and contributions($287,877) and miscellaneous revenue($181,724).
Total expenses decrease by$30,908 due to decreased instructional leadership and general administration. This decrease was offset
by an increase in instruction resulting in the small net change in total expenses.
Table A-1
Westlake Academy's Net Position
Governmental Activities Component Unit Activities Totals
2013 2012 2013 2012 2013 2012
Current assets $ 1,135,976 $ 963,265 $ 1,397,787 $ 1,366,114 $ 2,533,763 $ 2,329,379
Other assets - - - - - -
Total assets 1,135,976 963,265 1,397,787 1,366,114 2,533,763 2,329,379
Current liabilities 142,995 144,175 19,328 104,598 162,323 248,773
Total liabilities 142,995 144,175 19,328 104,598 162,323 248,773
Net position:
Restricted 61,887 60,963 1,265,493 1,003,789 1,327,380 1,064,752
Unrestricted 931,094 758,127 112,966 257,727 1,044,060 1,015,854
Total net assets $ 992,981 $ 819,090 $ 1,378,459 $ 1,261,516 $ 2,371,440 $ 2,080,606
Figure A-2
Westlake Academy
Sources of Revenue for Fiscal Year 2013
3%
15%
warges for Services
Gifts, Bequests&INfisrellaueous
8°•a
■Operating Grants&Co=ibutions
■Mate Fun ding
74%
8
Table A-3
Westlake Academy's Changes in Net Position
Governmental Activities Component Unit Activities Totals
2013 2012 2013 2012 2013 2012
Revenues
Program revenues:
Charges for services $ 182,220 $ 195,059 $ - $ - $ 182,220 $ 195,059
Operating grants and
contributions 469,085 740,756 1,102,172 1,486,329 1,571,257 2,227,085
General revenues:
Grants and contributions
non restricted 4,416,962 4,129,085 - - 4,416,962 4,129,085
Investment earnings 1,594 2,417 92,228 27,258 93,822 29,675
Miscellaneous 866,682 684,958 - - 866,682 684,958
Total revenues 5,936,543 5,752,275 1,194,400 1,513,587 7,130,943 7,265,862
Expenses
Instruction and instructional
related 3,646,342 3,334,157 - - 3,646,342 3,334,157
Instructional leadership/
school leadership 435,003 483,476 - - 435,003 483,476
Guidance,social work,
health,transportation 303,108 293,336 - - 303,108 293,336
Food services - 11,517 - - - 11,517
Extracurricular activities 125,139 131,971 - - 125,139 131,971
General administration 363,548 675,764 - - 363,548 675,764
Facilities maintenance and
operations 614,042 596,913 - - 614,042 596,913
Data processing services 160,695 173,586 - - 160,695 173,586
Community services 86,845 76,880 - - 86,845 76,880
Program/support services - - 1,077,457 1,255,411 1,077,457 1,255,411
Capital Outlay 27,930 15,960 - - 27,930 15,960
Total expenses 5,762,652 5,793,560 1,077,457 1,255,411 6,840,109 7,048,971
Increase in net assets 173,891 ( 41,285) 116,943 258,176 290,834 216,891
before Transfers
Special items - 67,760 - - - 67,760
Extrodinary items - ( 124,346) - - - ( 124,346)
Increase in net position 173,891 ( 97,871) 116,943 258,176 290,834 160,305
Beginning net position 819,090 916,961 1,261,516 1,003,340 2,080,606 1,920,301
Ending net position $ 992,981 $ 819,090 $ 1,378,459 $ 1,261,516 $ 2,371,440 $ 2,080,606
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Table A-4(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$5,762,652.
• Some of the cost was paid by those who directly benefited from the programs,$182,220.
• By grants and contributions$469,085.
Table A-4
Westlake Academy's Net Cost of Selected Functions
Total% Total%
Total Cost of Services Change Net Cost of Services Change
2013 2012 2012-2013 2013 2012 2012-2013
Instruction $ 3,458,116 $ 3,170,373 9% $ 3,067,224 $ 2,606,387 18%
School leadership 341,039 347,515 -2% 314,131 322,495 -3%
Guidance,counceling
and evaluation services 244,900 232,419 5% 231,191 218,179 6%
General administration 363,548 675,764 -46% 351,193 646,971 -46%
Facilities maintenance
and operations 614,042 596,913 3% 609,646 581,969 5%
Data processing services 160,695 173,586 -7% 152,723 153,697 -1%
General Fund Budgetary Highlights
Over the course of the year,the Academy revised its budget by decreasing revenues by$110,051 and increasing expenditures by
$5,039. The increase in revenues was primarily a reduction in Westlake Academy Foundation's contribution to the Academy
offset by increased state funding.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
• General Fund revenues are budgeted to increase 10% over 2012-13 actual revenues. This $571,123 rise is in part
attributable to increased state funding based on the increase in classes in the PYP Programme grade one and three, an
increase in estimated Westlake Academy Foundation's Blacksmith Program contributions and a contribution from the
Town of Westlake for various building and maintenance costs.
• Amounts available for appropriation in the General Fund budget are $6,140,689, an increase of 11% over the final 2013
expenditures of$5,496,181. The major portion of this total $644,508 increase is attributed to the following service-level
adjustments:
Salary Related Expenditures Total: $318,665
Desired Outcome:High Student Achievement
In FY 2013/14 we will have 76.18 full-time equivalent employees (FTE's), an increase of 3.11 FTE's. The increase in
expenditures is the result of a combination of adding new positions, the years of experience our new teachers, an increase in
unemployment insurance and other employer contributions,as well as the increased cost associated with teacher classifications
and international teacher stipends.
• Asst.to Secondary Principal(.50) • Secondary Science(.16)
• PYP Grade 3(1.0) • Secondary Foreign Language(1.0)
• PYP Grade 1 (1.0) • SPED Instructional Aide(.20)
• PYP Grade 6(4.0) • Salary Adjustments($86,400)
• Secondary Humanities(.25)
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Professional&Contracted Services Total: $60,470
Desired Outcome:High Student Achievement
Professional and contracted services rendered to the Academy by firms, individuals, and other organizations. These represent
the approximate services that are rendered for the Academy.
• Facility Maintenance($3,000) • ISA&DP Exams($9,000)
• TxEIS and ESC 11 ($18,000) • Athletics($18,000)
• Data and Phone($3,000) • Legal Fees($10,000)
• Water($4,500) • Miscellaneous($-5,030)
Supplies&Materials Total:$95,904
Desired Outcomes:Effective Educators&Staff—High Student Achievement
Supplies and materials costs are associated with consumables that are used in the classroom, maintenance of the campus,
books,testing materials,furniture,and classroom supplies.
• Furniture($15,000)
• Classroom supplies,SPED supplies,Shipping(IB Exams)etc.($67,000)
• Exams(ISA&IB)($9,362)
• Facilities Maintenance($5,800)
• Textbooks($4,500)
• Reading Materials($2,200)
• Miscellaneous($1,042)
Other Operating Costs Total: $33,387
Desired Outcome:Effective Educators&Staff—High Student Achievement
Other operating costs are associated with insurance,professional development,travel,membership fees and dues, graduations
expenses,and miscellaneous costs.
• Professional Development($-7,000)
• Travel($-500)
• Insurance($19,750
• Fees&Dues($8,153)
• Miscellaneous($12,984)
If the FY 2013-14 budget estimates are realized, the Academy's General Fund's budgetary fund balance is expected to increase
by$87,231 by the close of FY 2014.
ACHIEVEMENTS DURING FISCAL YEAR 2012-2013
Academy Accomplishments:
• Westlake Academy was ranked#20 out of approximately 1,900 public high schools in the United States in the
Washington Post Challenge Index
• Westlake Academy was ranked#52 in the United States by Newsweek
• Westlake Academy was ranked#6 in the State of Texas,#11 against all Charter Schools in the United States,and
#41 out of approximately 22,000 public high schools in the United States by U.S.News&World Report
• In 2013,Westlake Academy students achieved the IB Diploma well above the world rate with 80%of the students
earning the diploma.
• Westlake Academy received the Distinguished Budget Presentation Award from the Government Finance Officers
Association.
• The Academy received the Meritorious Budget Award from the Association of School Business Officials
International(ASBO).
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Staff Accomplishments:
• Several faculty members continue to represent the International Baccalaureate as Workshop Leaders, Site Visitors
and Consultants.
• Gail James has been honored as the Volunteer of the Year by the GRACE organization. She has been a volunteer
with this organization for 17 years.
• Amy Henderson was accepted into the Scottish Rite program for Dyslexia
• April Harrell received the 2013 Coca-Cola Educator of Distinction Award
Student Accomplishments:
• 29 Academy graduates from the Class of 2013 received the prestigious IB Diploma.
• The Academy had eight AP Scholars,two AP Scholars with Honor,and one AP Scholar with Distinction.
• The graduating class or 2013 received$3.3 million in scholarship and grant offers. All students were accepted into
respected colleges/universities across the State and the U.S.
CONTACTING THE ACADEMY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general
overview of the Academy's finances and to demonstrate the Academy's accountability for the money it receives. If you have
questions about this report or need additional financial information, contact the Academy/Town Finance Director,Debbie Piper,
at 817-490-5712,or by writing to 3 Village Circle, Suite 202,Westlake,Texas 76262.
12
BASIC FINANCIAL STATEMENTS
EXHIBIT A-1
WESTLAKE ACADEMY
STATEMENT OF NET POSITION
AUGUST 31,2013
1 4
Data
Control Governmental Component
Codes Activities Unit
ASSETS
1110 Cash and cash equivalents $ 844,975 $ 296,990
1120 Current investments 100 1,098,552
1240 Due from other governments 229,014 -
1410 Deferred expenses 61,887 2,245
1000 Total assets 1,135,976 1,397,787
LIABILITIES
2110 Accounts payable 58,676 1,828
2150 Payroll deductions and withholdings 1,711 -
2180 Due to other governments 12,960 -
2300 Deferred revenue 69,648 17,500
2000 Total liabilities 142,995 19,328
NET POSITION
3890 Restricted for other purposes 61,887 1,265,493
3900 Unrestricted 931,094 112,966
3000 Total net position $ 992,981 $ 1,378,459
The accompanying notes are an integral part of this financial statement.
13
EXHIBIT B-1
WESTLAKE ACADEMY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED AUGUST 31,2013
Net(Expense)Revenue and
Program Revenues Changes in Net Position
1 3 4 6 9
Data Operating Primary Government
Control Charges Grants and Governmental Component
Codes Functions/Programs Expenses for Services Contributions Activities Units
Primary government:
Governmental activities:
11 Instruction $ 3,458,116 $ 46,884 $ 344,008 $( 3,067,224) $
12 Instructional resources and media services 57,784 - 3,295 ( 54,489)
13 Curriculum and staff development 130,442 41,358 ( 89,084)
21 Instructional leadership 93,964 5,110 ( 88,854)
23 School leadership 341,039 26,908 ( 314,131)
31 Guidance,counseling,and evaluation services 244,900 13,709 ( 231,191)
33 Health services 58,208 - 1,903 ( 56,305)
35 Food service - 3,150 - 3,150
36 Extracurricular activities 125,139 132,186 3,549 10,596
41 General administration 363,548 - 12,355 ( 351,193)
51 Facilities maintenance and operations 614,042 4,396 ( 609,646)
53 Data processing services 160,695 7,972 ( 152,723)
61 Community services 86,845 4,522 ( 82,323)
81 Capital outlay 27,930 ( 27,930)
[TP]Total primary government $ 5,762,652 $ 182,220 $ 469,085 ( 5,111,347)
Component units:
IC Westlake Academy 1,077,457 - 1,102,172 24,715
TC Total component units $ 1,077,457 $ - $ 1,102,172 24,715
Data
Control General Revenues:
Codes
GC Grants and contributions not restricted 4,416,962 -
IE Investment earnings 1,594 92,228
MI Miscellaneous local and intermediate 866,682 -
E1 Extraordinary item-resource 40,959
E2 Extraordinary item-use ( 40,959) -
TR Total general revenues and transfers 5,285,238 92,228
CN Change in net position 173,891 116,943
NB Net position,beginning 819,090 1,261,516
NE Net position,ending $ 992,981 $ 1,378,459
The accompanying notes are an integral part of this financial statement.
14
EXHIBIT C-1
WESTLAKE ACADEMY
BALANCESHEET
GOVERNMENTAL FUNDS
AUGUST 31,2013
10 98
Data Hudson Grant Total
Control Curriculum Other Governmental
Codes General Director Governmental Funds
ASSETS
1110 Cash and cash equivalents $ 741,586 $ 68,748 $ 34,641 $ 844,975
1120 Current investments 100 - - 100
1240 Due from other governments 215,933 - 13,081 229,014
1260 Due from other funds 13,081 - - 13,081
1410 Deferred expenditures 61,887 - - 61,887
1000 Total assets $ 1,032,587 $ 68,748 $ 47,722 $ 1,149,057
LIABILITIES AND FUND BALANCES
Liabilities:
2110 Accounts payable $ 58,676 $ - $ - $ 58,676
2150 Payroll deductions and withholdings 1,711 - 1,711
2170 Due to other funds - - 13,081 13,081
2180 Due to other governments 12,960 - - 12,960
2300 Deferred revenue - 68,748 900 69,648
2000 Total liabilities 73,347 68,748 13,981 156,076
Fund balances:
3430 Nonspendable-prepaid items 61,887 - - 61,887
3545 Committed-other - - 33,741 33,741
3600 Unassigned 897,353 - - 897,353
3000 Total fund balances 959,240 - 33,741 992,981
4000 Total liabilities and fund balances $ 1,032,587 $ 68,748 $ 47,722 $ 1,149,057
The accompanying notes are an integral part of this financial statement.
15
EXHIBIT C-3
WESTLAKE ACADEMY
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31,2013
10 98
Data Hudson Grant Total
Control Curriculum Other Governmental
Codes General Director Governmental Funds
REVENUES
5700 Local and intermediate sources $ 992,285 $ 5,237 $ 160,523 $ 1,158,045
5800 State program revenues 4,648,649 - 47,891 4,696,540
5900 Federal program revenues - - 81,958 81,958
5020 Total revenues 5,640,934 5,237 290,372 5,936,543
EXPENDITURES
0011 Instruction 3,278,767 - 179,349 3,458,116
0012 Instructional resources and media services 57,784 - - 57,784
0013 Curriculum and staff development 89,084 - 41,358 130,442
0021 Instructional leadership 93,964 - - 93,964
0023 School leadership 332,694 - 8,345 341,039
0031 Guidance,counseling,and evaluation services 241,791 - 3,109 244,900
0033 Health services 58,208 - - 58,208
0036 Extracurricular activities 96,066 - 29,073 125,139
0041 General administration 358,311 5,237 - 363,548
0051 Facilities maintenance and operations 614,042 - - 614,042
0053 Data processing services 160,695 - - 160,695
0061 Community services 86,845 - - 86,845
0081 Capital outlay 27,930 - - 27,930
6030 Total expenditures 5,496,181 5,237 261,234 5,762,652
1100 EXCESS(DEFICIENCY)OF REVENUES
OVER(UNDER)EXPENDITURES 144,753 - 29,138 173,891
SPECIAL AND EXTRAORDINARY ITEMS
7919 Extraordinary items(resource) 40,959 - - 40,959
8913 Extraordinary items(use) ( 40,959) - - ( 40,959)
1200 NET CHANGE IN FUND BALANCES 144,753 - 29,138 173,891
0100 FUND BALANCES,BEGINNING 814,487 - 4,603 819,090
3000 FUND BALANCES,ENDING $ 959,240 $ - $ 33,741 $ 992,981
The accompanying notes are an integral part of this financial statement.
16
EXHIBIT D-1
WESTLAKE ACADEMY
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
AUGUST 31,2013
Agency
Fund
ASSETS
Cash and cash equivalents $ 64,840
Total assets $ 64,840
LIABILITIES
Accounts payable $ 330
Due to student groups 64,510
Total liabilities $ 64,840
The accompanying notes are an integral part of this financial statement.
17
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31,2013
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
Westlake Academy (the "Academy"), a blended component unit of the Town of Westlake (the "Town"), is a
Texas nonprofit Corporation under Chapter 12, Subchapter D of the Education Code to provide education. The
Board of Trustees (the "Board") consists of six trustees and is appointed by the Town's governing body.
Currently, all members of the Board are members of the Town's governing body. The Academy prepares its
basic financial statements in conformity with generally accepted accounting principles promulgated by the
Governmental Accounting Standards Board (the "GASB") and other authoritative sources identified in
Statement on Auditing Standards No. 69 of the American Institute of Certified Public Accountants; and it
complies with the requirements of the appropriate version of Texas Education Agency's Financial
Accountability System Resource Guide(the"Resource Guide")and the requirements of contracts and grants of
agencies from which it receives funds.
The Board is appointed by the governing Council of the Town and it has the authority to make decisions,
appoint administrators and managers, and significantly influence operations. It also has the primary
accountability for fiscal matters. Therefore,the Academy is a financial reporting entity as defined by the GASB
in its Statement No. 14,"The Financial Reporting Entity"as modified by GASB Statement No.61.
The Academy's basic financial statements include a separate entity that is controlled by or dependent on the
Academy. The determination to include separate entities is based on the criteria of GASB Statement No. 14,
"The Financial Reporting Entity" as amended by GASB Statement No. 39, "Determining Whether Certain
Organizations Are Component Units" and GASB Statement No. 61, "The Financial Reporting Entity —
Omnibus." GASB defines the reporting entity as the primary government and those component units for which
the primary government is financially accountable. To be financially accountable, a voting majority of the
component unit's ruling body must be appointed by the primary government, and either (a) the primary
government must be able to impose its will, or(b)the primary government may potentially benefit financially
or be financially responsible for the component unit.
The Westlake Academy Foundation (the "Foundation") is a 501(c)3 nonprofit organization which was
established exclusively for the purpose of supporting the Academy. This includes fundraising for and
contributing raised funds to the Academy. The Foundation has been discretely presented in the accompanying
financial statements and reported in a separate column to emphasize that it is legally separate from the
Academy. See Note II E for additional information relating to the Foundation. Separate audited financial
statements of the Foundation are available from the Academy/Town Finance Director's office, #3 Village
Circle,Suite 202,Westlake,Texas 76262.
B. 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.
18
t
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. Interfund activities between governmental funds and fiduciary
funds remain as internal balances on the government-wide Statement of Activities.
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.
C. Measurement Focus,Basis of AccountinjZ 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.
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 revenues until related and authorized
expenditures have been made. If balances have not been expended by the end of the project period, grantors
sometimes require the Academy to refund all or part of the unused amount.
The proprietary fund types and fiduciary funds are accounted for on a flow of economic resources measurement
focus and utilize the accrual basis of accounting. This basis of accounting recognizes revenues in the
accounting period in which they are earned and become measurable and expenses in the accounting period in
which they are incurred and become measurable. The Academy applies all GASB pronouncements as well as
the Financial Accounting Standards Board pronouncements issued on or before November 30, 1989, unless
these pronouncements conflict or contradict GASB pronouncements. With this measurement focus, all assets
and all liabilities associated with the operation of these funds are included on the fund Statement of Net
Position. The fund equity is segregated into restricted net position, and unrestricted net position.
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D. Fund Accounting
The Academy reports the following major governmental funds:
The General Fund is the Academy's primary operating fund. It accounts for all financial
resources except those required to be accounted for in another fund.
The Hudson Grant Curriculum Director Fund is a special revenue grant from the M.R. and
Evelyn Hudson Foundation that provides for the role of a Director of Curriculum and Instruction
for the 2013-2014 school year. This grant's success will be defined as a measurable positive
impact on students,teachers,and the culture at Westlake Academy.
Additionally,the Academy reports the following fund types:
The Special Revenue Funds account for resources restricted to, or designated for, specific
purposes by the Academy or a grantor in a Special Revenue Fund. Most federal and some state
financial assistance is accounted for in a Special Revenue Fund and sometimes unused balances
must be returned to the grantor at the close of specified project period.
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.
E. Other Accounting Policies
1. The State of Texas(the"State")has created a state minimum personal leave program consisting of five
days per year personal leave with no limit on accumulation and transferability among districts shall be
provided for school district employees. Each District's local Board is required to establish a personal
leave plan. It is the Academy's policy to permit some employees to accumulate earned but unused
state and local personal leave pay benefits. There is no liability for unpaid accumulated personal leave
since the Academy does not have a policy to pay any amounts when employees separate from service
with the government. All vacation pay is accrued when incurred in the government-wide financial
statements. A liability for these amounts is reported in governmental funds only if they have matured,
for example,as a result of employee resignations and retirements.
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 District
considers amounts to have been spent first out of committed funds, then assigned funds, and finally
unassigned funds.
4. For purposes of the statement of cash flows for proprietary and similar fund types, the Academy
considers highly liquid investments to be cash equivalents if they have a maturity of three months or
less when purchased.
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5. The governmental fund financial statements present fund balances based on classifications that
comprise a hierarchy that is based primarily on the extent to which the District 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. Nonspendable items are not expected to be converted to cash or are
not expected to be converted to cash within the next year.
• 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
District'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 District's
intent to be used for a specific purpose but are neither restricted nor committed. This
intent can be expressed by the School Board.
• Unassigned: This classification includes the residual fund balance for the General Fund.
The unassigned classification also includes negative residual fund balance of any other
governmental fund that cannot be eliminated by offsetting of assigned fund balance
amounts.
6. Net position represents the difference between assets and liabilities. Net position is reported as restricted
when there are limitations imposed on its use either though the enabling legislations adopted by the
Academy or through external restrictions imposed by creditors, grantors or laws or regulations of other
governments.
7. The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect
certain reported amounts and disclosures.Accordingly, actual results could differ from those estimates.
8. Sometimes the District will fund outlays for a particular purpose fi-om both restricted (e.g., restricted
bond or 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 a 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.
II. DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments
The funds of the Academy must be deposited and invested under the term s o f 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, 2013, the carrying amount of the Academy's deposits (cash, certificates of deposit, and interest-
bearing savings accounts included in temporary investments) was $909,815 and the bank balance was
$1,047,732.
21
The Public Funds Investment Act(Government Code Chapter 2256) contains specific provisions in the areas of
investment practices, management reports and establishment of appropriate policies. Among other things, it
requires the Academy to adopt, implement, and publicize an investment policy. That policy must address the
following areas: (1)safety of principal and liquidity,(2)portfolio diversification,(3)allowable investments,(4)
acceptable risk levels, (5) expected rates of return, (6) maximum allowable stated maturity of portfolio
investments, (7)maximum average dollar-weighted maturity allowed based on the stated maturity date for the
portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for certificates of
deposit. Statutes authorize the Academy to invest in (1) obligations of the U. S. Treasury, certain U. S.
agencies, and the State of Texas; (2) certificates of deposit, (3) certain municipal securities, (4) money market
savings accounts, (5)repurchase agreements, (6) bankers acceptances, (7) mutual funds, (8) investment pools,
(9)guaranteed investment contracts, and(10)common trust funds. The Act also requires the Academy to have
independent auditors perform test procedures related to investment practices as provided by the Act. The
Academy is in substantial compliance with the requirements of the Act and with local policies.
The carrying value of investments at August 31, 2013, was $100 (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.
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, 2013, the bank balance was
$1,047,732. This amount was collateralized with securities held by the pledging financial
institution and covered by FDIC insurance. In addition, the highest deposit balance occurred
in March, 2013, and was entirely covered by FDIC insurance or by securities held by the
pledging financial institution.
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, 2013, TexPool's
investments credit quality rating was AAAm(Standard&Poor's).
I
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B. Due from Other Governments
The Academy participates in a variety of federal and state programs from which it receives grants to partially or
fully finance certain activities. Amounts due from federal and state governments as of August 31, 2013, are
summarized below. All federal grants shown below are passed through the TEA and are reported on the
financial statements as Due from Other Governments.
State Federal
Fund Entitlements Grants Local Total
General $ 214,666 $ - $ 1,267 $ 215,933
Non-major funds - 13,081 - 13,081
Total $ 214,666 $ 13,081 $ 1,267 $ 229,014
C. 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
D. Interfund Balances and Activities
Interfund balances at August 31,2013,consisted of the following individual fund balances:
Due to Fund Due from Fund Amount Purpose
General Fund Non-major Funds $ 13,081 To cover expenditures
Total $ 13,081
The Academy had no interfund transfers for the year ending August 31,2013.
E. Component Unit Activity
Major classes of assets, liabilities, net assets, revenues and expenses for the Foundation are reported below for
the fiscal year ended August 31,2013.
Condensed Statement of Net Assets
Assets
Cash and cash equivalents $ 296,990
Investments 1,098,552
Other assets,net 2,245
Total assets 1,397,787
Liabilities 19,328
Net assets
Permanently restricted 1,007,428
Temporarily restricted 258,065
Unrestricted 112,966
Total net assets $ 1,378,459
23
Statement of Activities
Revenues Expenses Total
Gallery night $ 165,883 $ 56,606 $ 109,277
Blacksmith annual fund 740,543 740,612 ( 69)
Endowment 1,000 2,000 ( 1,000)
Westlake Baja 185,604 49,165 136,439
Fund 100 - 141,608 ( 141,608)
Miscellaneous donations 2,820 2,820 -
Investment income 14,268 - 14,268
Net unrealized gains on investments 46,871 - 46,871
Net realized gains on investments 37,411 - 37,411
Management and general - 84,646 ( 84,646)
Totals $ 1,194,400 $ 1,077,457 116,943
Beginning net assets 1,261,516
Ending net assets $ 1,378,459
The Foundation contributed$886,820 to the Academy during the fiscal year ended August 31,2013.
F. Revenue from Local and Intermediate Sources
During the current year, revenues from local and intermediate sources as reported on Exhibit C-3 of the fund
statements consisted of the following:
WAF Whole
School
Professional Non-major
General Fund Development Funds Total
Gifts and bequests $ 866,682 $ 5,237 $ 102,312 $ 974,231
Interest 1,594 - - 1,594
Food sales 3,150 - - 3,150
Campus activities - - 58,211 58,211
Parking/transportation 36,011 - - 36,011
Athletics 56,301 - - 56,301
Miscellaneous 28,547 - - 28,547
Total $ 992,285 $ 5,237 $ 160,523 $ 1,158,045
G. Defined Benefit Pension Plan
Plan Description. Westlake Academy contributes to the Teacher Retirement System of Texas (TRS), a cost-
sharing multiple employer defined benefit pension plan. TRS administers retirement and disability annuities,
and death and survivor benefits to employees and beneficiaries of employees of the public school systems of
Texas. It operates primarily under the provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas
Government Code, Title 8, Subtitle C. TRS also administers proportional retirement benefits and service credit
transfer under Texas Government Code,Title 8,Chapters 803 and 805,respectively. The Texas state legislature
has the authority to establish and amend benefit provisions of the pension plan and may, under certain
circumstances, grant special authority to the TRS Board of Trustees. TRS issues a publicly available financial
report that includes financial statements and required supplementary information for the defined benefit pension
plan. That report may be obtained by downloading the report from the TRS Internet website,
www.trs.state.tx.us,under the TRS Publications heading,by calling the TRS Communications Department at 1-
800-223-8778, or by writing to the TRS Communications Department, 1000 Red River Street, Austin, Texas
78701.
24
i
Funding Policy. Contribution requirements are not actuarially determined but are established and amended
pursuant to the following state funding policy: (1) The state constitution requires the legislature to establish a
member contribution rate of not less than 6.0% of the member's annual compensation and a state contribution
rate of not less than 6.0% and not more than 10% of the aggregate annual compensation of all members of the
system during the fiscal year; (2)state statute prohibits benefit improvements, if as result of a particular action,
the time required to amortize TRS' unfunded actuarial liabilities would be increased to a period that exceeds 31
years,or,if the amortization period already exceeds 31 years,the period would be increased by such action.
Contribution rates and contributions for fiscal years 2013-2011 are shown
in the table below. These rates are set by the General Appropriations Act. In
certain instances,the reporting district is required to make all or a portion of
the state's and/or member's contribution and on the portion of the
employees' salaries that exceeded the statutory minimum.
Contribution Rates and Contribution Amounts
Member State
Year Rate Amount Rate Amount
2013 6.4% $ 234,574 6.400% $ 220,728
2012 6.4% $ 224,616 6.644% $ 188,014
2011 6.4% $ 174,332 6.644% $ 177,176
H. Health Care Coverage
During the period ended August 31,2013, employees of the Academy were covered by a state-wide health care
plan, TRS Active Care. The Academy's participation in this plan is renewable annually. The Academy paid into
the Plan$225 per month per employee. Employees,at their option,pay premiums for any coverage above these
amounts as well as for dependent coverage.
The Teachers Retirement System (TRS) manages TRS Active Care. The medical plan is administered by Blue
Cross and Blue Shield of Texas, FIRSTCARE, and Scott and White HMO. Medco Health administers the
prescription drug plan. The latest financial information on the state-wide plan may be obtained by writing to the
TRS Communications Department, 1000 Red River Street, Austin, Texas 78701, by calling the TRS
Communications Department at 1-800-223-8778, or by downloading the report from the TRS Internet website,
www.trs.state.tx.us,under the TRS Publications heading.
I. 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 at 1000 Red River Street,Austin,Texas 78701.
25
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 2013-2011.
Contribution Rates
Active Member State School District
Year Rate Amount Rate Amount Rate Amount
2013 0.65% $ 23,824 0.5% $ 18,326 0.55% $ 20,159
2012 0.65% $ 22,822 1.0% $ 35,111 0.55% $ 19,311
2011 0.65% $ 19,145 1.0% $ 29,454 0.55% $ 16,200
J. Retiree Health Plan
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$13,046, $8,203, and $6,430 were recognized for the years ended August 31,
2013,2012 and 2011,respectively,as equal revenues and expenditures.
K. 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.
26
REQUIRED SUPPLEMENTARY INFORMATION
EXHIBIT E-1
WESTLAKE ACADEMY
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL-GENERAL FUND
FOR THE YEAR ENDED AUGUST 31,2013
Actual Variance with
Data Amounts Final Budget
Control Budgeted Amounts (Budgetary Positive
Codes Original Final Basis) (Negative)
REVENUES
5700 Local and intermediate sources $ 1,180,294 $ 991,516 $ 992,285 $ 769
5800 State program revenues 4,505,199 4,583,926 4,648,649 64,723
5020 Total revenues 5,685,493 5,575,442 5,640,934 65,492
EXPENDITURES
Current:
0011 Instruction 3,262,468 3,383,491 3,278,767 104,724
0012 Instructional resources and media services 140,756 67,543 57,784 9,759
0013 Curriculum and staff development 80,600 85,513 89,084 ( 3,571)
0021 Instructional leadership 127,812 94,652 93,964 688
0023 School leadership 353,684 364,544 332,694 31,850
0031 Guidance,counseling,and evaluation services 234,011 235,956 241,791 ( 5,835)
0033 Health services 58,324 58,999 58,208 791
0035 Food service 9,544 13,554 - 13,554
0036 Extracurricular activities 156,036 93,910 96,066 ( 2,156)
0041 General administration 314,263 333,902 358,311 ( 24,409)
0051 Facilities maintenance and operations 607,211 610,595 614,042 ( 3,447)
0053 Data processing services 166,686 166,686 160,695 5,991
0061 Community services 91,890 94,989 86,845 8,144
Capital outlay:
0081 Capital outlay 23,940 27,930 27,930 -
6030 Total expenditures 5,627,225 5,632,264 5,496,181 136,083
1100 EXCESS(DEFICIENCY)OF
REVENUES OVER EXPENDITURES 58,268 ( 56,822) 144,753 201,575
OTHER FINANCING SOURCES(USES)
7915 Transfers In 44,823 28,178 - ( 28,178)
8911 Transfers Out (57,663) (28,178) 28,178
7080 Total other financing sources(uses) ( 12,840) - - -
7917 SPECIAL ITEMS
7919 Extraordinary items(resource) - 40,959 40,959
8913 Extraordinary items(use) - (40,959) (40,959) -
1200 NET CHANGE IN FUND BALANCES 45,428 (56,822) 144,753 201,575
0100 FUND BALANCES,BEGINNING 814,487 814,487 814,487 -
3000 FUND BALANCES,ENDING $ 859,915 $ 757,665 $ 959,240 $ 201,575
27
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
AUGUST 31,2013
Budtetary Information
The Board 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 reflected in the basic financial statements:
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 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.
5. For the year ending August 31,2013,expenditures exceeded appropriations in the following functions:
Curriculum and Staff Development, Guidance, Counseling and Evaluation Services, Extracurricular
Activities, General Administration and Facilities Maintenance and Operations. The functions that
exceeded appropriations were funded by other various functions that were under budget.
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COMBINING STATEMENTS
WESTLAKE ACADEMY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
AUGUST 31,2013
224 410 461 482
Data State Campus WAF
Control IDEA-Part B Instructional Activity Fund 100
Codes Formula Materials Funds Grant
ASSETS
1110 Cash and cash equivalents $ - $ - $ 33,741 $ -
1240 Due from other governments 13,081 - - -
1000 Total assets $ 13,081 $ - $ 33,741 $ -
LIABILITIES AND FUND BALANCES
Liabilities:
2170 Due to other funds $ 13,081 $ - $ - $ -
2300 Deferred revenues - - -Total liabilities 13,081 - - -
Fund balances:
3545 Other committed fund balance - - 33,741 -
3000 Total fund balances - - 33,741 -
4000 Total liabilities and fund balances $ 13,081 $ - $ 33,741 $ -
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EXHIBIT F-I
490 491 492 493 496 497
WAF Student WAF WAF Financial Total
Whole School Shoulder to Recruitment I.B. HOC Assistance Nonmajor
Prof.Dev. Shoulder Phase II Learns iStation Grant Governmental
$ - $ 900 $ - $ - $ - $ - $ 34,641
13,081
$ - $ 900 $ - $ - $ - $ - $ 47,722
$ - $ - $ - $ - $ - $ - $ 13,081
900 - - - - 900
900 - - - - 13,981
33,741
- - 33,741
$ - $ 900 $ - $ - $ - $ - $ 47,722
30
WESTLAKE ACADEMY
COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN
FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31,2013
224 410 461 482
Data State Campus WAF
Control IDEA-Part B Instructional Activity Fund 100
Codes Formula Materials Funds Grant
REVENUES
5700 Local and intermediate sources $ - $ - $ 58,211 $ 1,469
5800 State program revenues - 47,891 - -
5900 Federal program revenues 81,958 - - -
5020 Total revenues 81,958 47,891 58,211 1,469
EXPENDITURES
Current:
0011 Instruction 81,958 47,891 - -
0013 Curriculum and instructional
staff development - - - 809
0023 School leadership - - - -
0031 Guidance,counseling and evaluation services - - - 660
0036 Extracurricular activities - - 29,073 -
6030 Total expenditures 81,958 47,891 29,073 1,469
1200 NET CHANGE IN FUND BALANCE - - 29,138 -
0100 FUND BALANCE,SEPTEMBER 1,
BEGINNING - - 4,603 -
3000 FUND BALANCE,AUGUST 31,ENDING $ - $ - $ 33,741 $ -
31
EXHIBIT F-2
490 491 492 493 496 497
WAF Student WAF WAF Financial Total
Whole School Shoulder to Recruitment I.B. HOC Assistance Nonmajor
Prof.Dev. Shoulder Phase II Learns iStation Grant Governmental
-
$ 23,523 $ 7,500 $ 36,000 $ 27,820 $ 4,000 $ 2,000 $ 160,523
- - - - - - 47,891
- - - - - - 81,958
23,523 7,500 36,000 27,820 4,000 2,000 290,372
- 7,500 36,000 - 4,000 2,000 179,349
12,729 - - 27,820 - - 41,358
8,345 - - - - - 8,345
2,449 - - - - - 3,109
- - - - - - 29,073
23,523 7,500 36,000 27,820 4,000 2,000 261,234
- - - - - - 29,138
4,603
$ - $ - $ - $ - $ - $ - $ 33,741
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INTERNAL CONTROL REPORT
PATTILLO, BROWN & HILT.,
CERTIFIED PVOLIC ACCOVNTANT5■9V5INE55 CONSVCTANT5
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 A UDITING STANDARDS
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 as of and for the year ended August 31, 2013, and the
related notes to the financial statements, which collectively comprise Westlake Academy's basic
financial statements and have issued our report thereon dated November 26, 2013.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Westlake
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 Westlake Academy's
internal control. Accordingly, we do not express an opinion on the effectiveness of Westlake 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.
33
115 SOUTH CHURCH STREET■HILLSBORO,TX 76645■(254)582-2583■FAX:(254)582-5731 ■www.pbhcpa.com
AFFILIATE OFFICES:WACO,TX(254)772-4901 ■BROWNSVILLE,TX(956)544-7778
TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904
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 Westlake 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. 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.
Pak tow�,J � W
November 26, 2013
34
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