HomeMy WebLinkAboutWA Resolution 23-03 Annual Audit Report WA BrooksWatson & Co., PLLCWESTLAKE ACADEMY
RESOLUTION NO.23-03
A RESOLUTION OF THE WESTLAKE ACADEMY BOARD OF TRUSTEES
APPROVING THE FISCAL YEAR 2021-2022 ANNUAL AUDIT REPORT FROM
BROOKSWATSON & CO., PLLC, CERTIFIED PUBLIC ACCOUNTANTS.
WHEREAS, Under Title 19 Chapter 109.23(d) of the Texas Administrative Code, the
district must hire at its own expense an independent auditor to conduct an independent audit of its
financial statements and provide an opinion on its Annual Financial Report, and
WHEREAS, Under Section 44.008(d) of the Texas Education Code, the annual financial
audit is due no later than the 1501h day after the end of the fiscal year (January 28 for the August
31 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: That all matters stated in the Recitals hereinabove are found to be true and
correct and are incorporated herein by reference as if copied in their entirety.
SECTION 2: That the Board of Trustees of Westlake Academy does hereby approve the
Fiscal Year 2021-2022 annual audit report from BrooksWatson & Co., PLLC, Certified Public
Accountants attached hereto 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 of Trustees hereby determines that it would have adopted this Resolution
without the invalid provision.
SECTION 4: That this resolution shall become effective from and after its date of
passage.
PASSED AND APPROVED ON THIS 151h DAY OF FEBRUARY 2023.
Sean Kilbride, President
Resolution WA 23-3
Page 1 of 2
ATTEST:
Amy M. Piuk oard Secretary
APPROVED AS TO FORM:
Ja e S. Bube or . Stanton Lowry,
S ool Atto
n Wil on, Superintendent
Include any Exhibits along with your Resolutions or
Ordinances in a separate file.
Resolution WA 23-3
Page 2 of 2
Westlake Academy
(A Component Unit of the Town of Westlake)
Annual Financial Report
For the Year Ended August 31, 2022
Table of Contents
INTRODUCTORY SECTION Page Exhibit
Certificate of Board u
FINANCIAL SECTION
Independent Auditor's Report 1
Management's Discussion and Analysis 5
Basic Financial Statements:
Government -wide Financial Statements
Statement of Net Position 18 A-1
Statement of Activities 20 B-1
Fund Financial Statements:
Balance Sheet 22 C-1
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 25 C-2
Statement of Revenues, Expenditures, and Changes in Fund Balance 26 C-3
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of Governmental Funds to the Statement of Activities 29 C-4
Fiduciary Funds:
Statement of Fiduciary Net Position 30 D-1
Statement of Changes in Fiduciary Net Position 31 D-2
Notes to the Financial Statements 33
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund
64
E-1
Notes to the Budgetary Comparison Schedule
66
Schedule of Academy's Proportionate Share of
Net Pension Liability - Teacher Retirement System
68
E-2
Schedule of Pension Contributions - Teacher Retirement System
70
E-3
Schedule of Academy's Proportionate Share of
Net OPEB Liability - Teacher Retirement System TRS Care Plan
72
Schedule of OPEB Contributions - Teacher Retirement System TRS Care Plan
74
E-4
E-5
Combining Statements:
Combining Balance Sheet - Nonmajor Governmental Funds
78
H-1
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental Funds
80
H-2
Required TEA Schedules
Use of Funds Report
82
J-4
i
Certificate of Board
WESTLAKE ACADEMY TARRANT 220-810
Name of School County Co -District Number
We, the undersigned, certify that the attached annual financial reports of the above -named school were
reviewed and (check one) -Zapproved disapproved for the year ended August 31, 2022 at a meeting
of the Board of Trustees of such school on the 231d day of January, 2023.
- Board S retarry Signature of Board President
If the Board of Trustees disapproved of the auditors' report, the reason(s) for disapproving it is (are):
(Attach list as necessary)
FINANCIAL SECTION
LOD I "Z�,
.................
INDEPENDENT AUDITOR'S REPORT
To the Board of Trustees
Westlake Academy:
Report on the Audit of the Financial Statements
Opinions
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 the
Westlake Academy (the "Academy") as of and for the year ended August 31, 2022, and the related notes
to the financial statements, which collectively comprise the Academy's basic financial statements as listed
in the table of contents.
In our opinion, the accompanying financial statements 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 the Westlake Academy, as of August
31, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS). Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are required to be
independent of Westlake Academy and to meet our other ethical responsibilities, in accordance with the
relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
The Academy's management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the United States of America,
and for 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.
14950 Heathrow Forest Pkwy I Suite 530 1 Houston, TX 77032 1 Tel: 281.907,8788 1 Fax: 888.875.0587 1 www.BrooksWatsonCPA.com
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Academy's ability to
continue as a going concern for one year after the date that the financial statements are issued.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a
material misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control. Misstatements are considered material
if there is a substantial likelihood that, individually or in the aggregate, they would influence the
judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
• Obtain an understanding of internal control relevant to the audit 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 Academy's internal control. Accordingly, no such opinion is
expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Academy's ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control —related
matters that we identified during the audit.
Emphasis of Matter
As discussed in Note 5.14 to the financial statements, during 2022, the Academy adopted new accounting
guidance Governmental Accounting Standard Board "GASB" Statement No. 87, Leases. As such, the
Academy restated beginning net position for governmental activities due to the implementation of this
new accounting pronouncement. Our opinion is not modified with respect to this matter.
2
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, schedules of the Academy's proportionate
share of the net pension liability and the net OPEB liability, and schedules of Academy pension and
OPEB contributions as listed in the table of contents, be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
GASB 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.
'• • 6
BrooksWatson & Co.
Certified Public Accountants
Houston, Texas
January 26, 2023
K,
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS
August 31, 2022
This section of the Westlake Academy (the "Academy") annual financial report presents our
discussion and analysis of the Academy's financial performance during the fiscal year ended
August 31, 2022. Please read it in conjunction with the Academy's financial statements. In
reviewing this report, readers should be mindful that it is often necessary for management to make
and use estimates in the preparation of financial statements. Examples of the use of such estimates
may be found in amounts reported for depreciation, receivable allowances, and net pension/OPEB
liability.
Financial Highlights
• The liabilities and deferred inflows of the Academy exceeded its assets and deferred outflows
(net position) at August 31, 2022 by $3,071,158.
• The Academy's total net position decreased by $248,823.
• The Academy reported $11,727,363 in expenses related to governmental activities, of which
$3,774,210 of these expenses were offset by program -specific charges for services or grants and
contributions.
• At the end of the fiscal year, the general fund reported a fund balance of $1,718,580, a decrease
of $360,253
Overview of the Financial Statements
The discussion and analysis provided here are intended to serve as an introduction to the Academy's
basic financial statements. The Academy's basic financial statements consist of three components: 1)
government -wide financial statements, 2) fund financial. statements, and 3) the notes to financial
statements. This report also includes supplementary information intended to furnish additional detail
to support the basic financial statements themselves.
Government -Wide Statements
The government -wide statements 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, deferred inflows and outflows of resources. 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.
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
5
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
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.
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, respectively.
• 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.
The government -wide financial statements can be found on pages 18-21 of this report.
FUND FINANCIAL STATEMENTS
The fund financial statements begin on page 22 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. All of
the funds of the Academy can be divided into two categories: governmental funds and fiduciary funds.
• 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.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide financial
statements, governmental fund financial statements focus on near -term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in assessing a government's near -term financing requiremexlts.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
R
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long-term impact of the government's near -term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The Academy maintains ten individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures,
and changes in. fund balances for the general fund and the ESSER fund, which. are considered to be
major funds. Data from the other governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these nonmajor governmental funds is provided in a
separate section of the report.
The Board of Trustees adopts a budget for the general fund. A budgetary comparison statement has
been provided for the general fund to demonstrate compliance with their respective budget.
The basic governmental fund financial statements can be found on pages 22-29 of this report.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside of the
government. Fiduciary funds are not reported in the government -wide financial statements because the
resources of those funds are not available to support the Academy's own programs. The accounting
used for fiduciary funds is much like that used for proprietary funds.
The Academy maintains one fiduciary fund, the Student Activity Fund. The custodial fund accounts for
resources held for others in a custodial capacity.
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 2022, the Foundation
contributed $1,654,044 to the Academy to enhance educational opportunities. These contributions are
recorded as operating grants and contributions in the Statement of Activities.
7
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
Notes to Financial Statements
The notes provide additional information that is necessary to acquire a full understanding of the data
provided in the government -wide and fund financial statements.
The notes to the financial statements can be found on pages 33-62 of this report.
Other Information
In addition to the basic financial statements, MD&A, and accompanying notes, this report also presents
certain Required Supplementary Information (RSI). The required RSI includes a budgetary comparison
schedule for the general fund, schedule of changes in the net pension/OPEB liability and related ratios
and schedule of employer contributions for the Teacher Retirement System of Texas. RSI can be found
after the basic financial statements.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted previously, net position may serve over time as a useful indicator of the Academy's financial
position. For the Westlake Academy, liabilities exceeded assets by $3,071,158 as of August 31, 2022, in
the primary government.
A portion of the Academy's net position, $55,866 reflects its investments in capital assets (e.g. right to
use assets), less any debt used to acquire those assets that are still outstanding. The Academy uses these
capital assets to provide services to its teachers and students; consequently, these assets are not
available for future spending. Although the Academy's investment in its capital assets is reported net
of related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the assets themselves cannot be used to liquidate these liabilities.
An additional portion of the Westlake Academy's .net position of $1,818 represents resources that are
subject to external restrictions on how they may be used.
At the end of the current fiscal year, the Westlake Academy reported negative balances for unrestricted
net position for the primary government. The same situation held true for the prior fiscal year.
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
Statement of Net Position:
The following table reflects the condensed Statement of Net Position:
Governmental Activities
2022
2021
$ Change
% Change
Current and
other assets $
2,237,052 $
2,401,202 $
(164,150)
-7%
Capital assets, net
549,398
259,053
290,345
112%
Total Assets
2,786,450
2,660,255
126,195
5%
Deferred Outflows of
Resources
2,168,645
2,517,090
(348,445)
-14%
Current liabilities
707,565
396,807
310,758
78%
Long-term liabilities
4,027,728
5,511,068
(1,483,340)
-27%
Total Liabilities
4,735,293
5,907,875
(1,172,582)
-20%
Deferred Inflows of
Resources
3,290,960
2,091,805
1,199,155
57%
Net Position:
Net investment in
capital assets
55,866
-
55,866
100%
Restricted
1,818
2,099
(281)
-13%
Unrestricted
(3,128,842)
(2,824,434)
(304,408)
11%
Total Net Position $
(3,071,158) $
(2,822,335) $
(248,823) $
9%
0
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
Statement of Activities:
The following table provides a summary of the Academy's changes in net position:
Governmental Activities
2022
2021
$ Change
% Change
Revenues
Program revenues:
Charges for services $
72,495
$ 138,009
$ (65,514)
$ -47%
Operating grants
and contributions
2,860,710
1,933,947
926,763
48%
Capital grants
and contributions
841,005
841,005
-
0%
General revenues:
State aid & formula grants
7,698,507
7,989,443
(290,936)
-4%
Investment earnings (losses)
5,823
2,422
3,401
140%
Total Revenues
11,478,540
10,904,826
573,714
5%
Expenses
Instruction
6,243,385
6,125,687
117,698
2%
Instruction resources and
media services
197,026
102,806
94,220
92%
Curriculum and staff
development
152,125
30,932
121,193
392%
Instructional leadership
244,399
188,305
56,094
30%
School leadership
1,401,081
1,227,711
173,370
14%
Guidance, counseling
and evaluations
567,216
642,883
(75,667)
-12%
Health services
137,527
108,715
28,812
27%
Food service
51,779
51,844
(65)
0%
Extracurricular activities
608,292
423,933
184,359
43%
General administration
286,262
276,870
9,392
3%
Facilities maint. and oper.
1,320,609
1,272,656
47,953
4%
Security and monitoring
6,231
15,542
(9,311)
-60%
Data processing services
336,010
246,439
89,571
36%
Community services
152,200
149,600
2,600
2%
Debt service - interest
23,221
12,814
10,407
81%
Total Expenses
11,727,363
10,876,737
850,626
8%
Change in Net Position
(248,823)
28,089
(276,912)
Beginning Net Position
(2,822,335)
(2,850,424)
28,089
-1%
Ending Net Position $
(3,071,158) $
(2,822,335) $
(248,823) $
9%
10
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
Graphic presentations of selected data from the summary tables are displayed below to assist in the
analysis of the Academy's activities.
Governmental Activities — Revenues
■ Charges for
services
1%
State
67%
nts and
dbutions
32%
For the year ended August 31, 2022, revenues from governmental activities totaled $11,478,540. Overall
revenue increased $573,714 or 5% from the prior year.
11
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
This graph shows the governmental function expenses of the Academy:
Governmental Activities — Expenses
■ Dataprocessing
■ Facilities maintenance services
and operations, 3% � Community sen ices
o
■ General administration_ 11 a �O
3%
■ Extracurricular a(
5%
■ Food ser
1%
■ Health sE
1%
u Guidance, couns
evaluations
5%
School leac
12%
■ Instructional leadersiup �--- - - T�
2% aCurricultunand stafi Instruct. resources/niedia
development 2%
1%
■ Instruction
53%
For the year ended August 31, 2022, expenses for governmental activities totaled $11,727,363. This
represents an increase of $850,626 or 8% from the prior year.
• The Academy's largest expense category is instruction, which totaled $6,243,385 at year-end.
• Instruction resources and media services expenses increased $94,220, or 92%, primarily due to
the increase in higher personnel costs as a result of nonrecurring retention stipend paid to
faculty and staff during the year.
• Curriculum and staff development increased by $121,193 due to grant -funded travel for faculty
to attend the 2022 IB Global Conference.
• Instructional leadership expenses increased by $56,094 or 30%, which was the result of higher
personnel costs bolstered by the retention stipend paid out during the year.
• School leadership expenses increased by $173,370 or 14%, due to retention stipend during the
year. In addition to the retirement of the Executive Director, a new head of school administrator
served as a consultant until filling the position in June of 2022 with full salary/benefits.
• Guidance/counseling and evaluations expenses decreased by $75,667 or 12%, due to additional
counseling software and student evaluation and assessment need in the previous year that were
no longer needed in fiscal year ending August 31, 2022. More assessments and evaluations were
needed to provide accelerated learning and tutoring due to possible instructional deficiencies
from the school closure and remote learning caused by the COVID pandemic.
• Health services increased $28,812 or 27% due to additional costs for Covid-mitigation and
vaccination clinics paid through School Health Support Grant, in addition to costs related to
having an EMT on campus.
12
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
• Extracurricular activities increased by $184,359 or 43%, primarily due to returning to full sports
competitions post-Covid, after many tournaments being canceled in the previous year.
• Data processing services increased by $89,571 or 36%. The change was the result of increased
costs in iPad software applications, in addition to costs related to consultants providing
assistance for PowerSchool implementation of new Student Information System.
All other expenses were relatively consistent with the previous year.
FINANCIAL ANALYSIS OF THE ACADEMY'S FUNDS
As noted earlier, fund accounting is used to demonstrate and ensure compliance with finance -related
legal requirements.
Governmental Funds - The focus of the Academy's governmental funds is to provide information of
near -term inflows, outflows and balances of spendable resources. Such information is useful in
assessing the Academy's financing requirements. In particular, unassigned fund balance may serve as a
useful measure of the Academy's net resources available for spending at the end of the year.
At August 31, 2022, the Academy's governmental funds reported combined fund balances of
$1,611,186, a decrease of $443,192 in comparison with the prior year. Approximately 88% of this
amount, $1,425,775, constitutes unassigned fund balance, which is available for spending at the
government's discretion. The remainder of the fund balance is either nonspendable, restricted or
committed to indicate that it is 1) not in spendable form $77,138 or 2) committed for particular purposes
$106,455.
As of the end of the year the general fund reflected a total fund balance of $1,718,580. General fund
balance decreased by $360,253 during the current year. The decrease is primarily due to greater than
expected expenditures over the course of the year.
The ESSER fund had an ending fund deficit of $148,436 at August 31, 2022. The fund balance did not
change compared to the prior year. State program revenues equaled current year expenditures for the
year ended August 31, 2022.
GENERAL FUND BUDGETARY HIGHLIGHTS
Total budgeted revenues of $9,409,550 were less than actual revenues of $9,564,419, resulting in a
positive revenue variance of $154,869. The positive variance was primarily the result of greater than
expected state program revenues. Total budgeted expenditures of $10,054,614 were less than actual
expenditures of $10,506,388, resulting in a negative expenditure variance of $451,774. The variance in
total expenditures was primarily due to negative variances within the school leadership, and facilities
maintenance/operations.
13
Westlake Academy
MANAGEMENT'S DISCUSSIONAND ANALYSIS, Continued
August 31, 2022
CAPITAL ASSETS
As of the end of the year, the Academy's governmental activities had invested $549,398 in right to use
assets. This investment in assets includes a lease financing agreement for Apple TV equipment, Apple
Macbooks, iPads, and Pro iOS software licenses. During the current year, the Academy entered into a
new lease financing agreement with CSI Leasing. The present value of the future monthly lease
payments over the term of the lease amounted to $581,716. Current year depreciation amounted to
$291,371.
More detailed information about the Academy's capital assets is presented in note 4.E to the financial
statements.
LONG-TERM DEBT
The Academy's outstanding lease payable balance at the end of the current year was $549,343. During
the current year, the Academy entered into a new lease financing agreement with CSI Leasing. The
present value of the future monthly lease payments over the term of the lease amounted to $581,716.
During the year, principal payments totaling $291,426 were made on the outstanding lease obligations.
More detailed information about the Academy's long-term liabilities is presented in note 4.E to the
financial statements.
CURRENT CONDITIONS AND FUTURE CONSIDERATIONS
The Town of Westlake and Westlake Academy are committed to the education, safety, and wellbeing of
our students, staff, and their families. As we continue to be mindful of the COVID-19 public health
crisis, that began for us in March of 2020, our campus has been structured to enhance educational
opportunities so that children will continue to learn and thrive. We continue to deploy a variety of
safety measures that support a healthy campus as we continue to educate our students in a face-to-face
learning environment.
Westlake Population Growth: Over the past several years, our community has grown through the
addition of new residential subdivisions and the construction of new homes within our existing
neighborhoods. We are also within the heart of the Forth Worth -Dallas Metroplex, which has also
experienced tremendous growth in residential units. This type of growth within our own community
results in potentially greater enrollment of primary boundary students (those who live in the Westlake
community). The regional growth will ultimately affect the extended boundary lottery wait list as more
families seek admittance through the lottery.
Public Education Funding: Funding of public education continues to remain a topic of discussion
across the state and will be discussed in the 2023 Legislative Session. As we receive the majority of our
funding from the State of Texas, we will continue to work with Westlake Academy administrators and
our elected officials to identify key revenue and expenditure drivers for the Academy while assessing
historical financial trends and their impact upon our financial stability.
14
Westlake Academy
MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued
August 31, 2022
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
The Fiscal Year 2022-2023 budget was prepared with conservative revenue projections and
expenditures that are targeted to create an exceptional learning environment designed for student
success and a supportive culture for all Westlake Academy students and staff members to continuously
develop their knowledge and skills. Student enrollment projections for budgeting purposes remains at
the 2021-2022 level of 875 students.
General Fund revenues are budgeted to increase by 3% over the actual revenues realized in FY22 due
to the following increases and additions:
• Increase in interest income and food service activity,
• Increase in participation and donations through the Blacksmith Annual Campaign,
• Increase in municipal contributions for Westlake Academy Foundation salaries and benefits,
• Addition of municipal contributions for Westlake Academy operations.
Total appropriations within the General Fund budget are estimated to reach $9,888,739, which is a
cumulative decrease of 6% ($617,008) over actual expenditures in FY22. This change is primarily due to
the addition of the new 3-year One -to -One Student iPad lease beginning July 2022 and the close-out
costs of the prior lease. Additional changes in the Fiscal Year 2022-2023 adopted budget include:
Payroll
• An average of 6% earnings increase for all teachers, counselors, librarians, nurses,
diagnosticians, and administrative and support staff,
• An increase in Full -Time Equivalents by 3% to 106.26 positions,
• Increase in athletic stipends,
• Adding or reclassifying the following positions:
0 504 Coordinator (previously Special Education Teacher),
o Secondary Math Specialist (part-time),
o Dyslexia Specialist (part-time),
o Bus driver (part-time).
Professional & Contracted Services
• An average 8% decrease in expenditures related to services rendered to the Academy by firms,
individuals, and other organizations. Changes include:
o Decrease in the annual contract with ESC Region 11 due to the implementation of
PowerSchool for the student information system,
o Discontinuation of executive search consultant contracts,
o Changes in student support contracts for autism intervention, audiological, and physical
therapy due to the changing needs in Special Education and 504 assessments.
15
Westlake Academy
MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued
August 31, 2022
Materials & Supplies
• An average 18% decrease in expenditures associated with consumables used in the classroom
and in the general operations of the campus, including:
o Decreases in program -specific instructional supplies,
o Decreases in technology -related supplies.
• Decreases in supplies are primarily due to changes in purchasing requirements and the
availability of instructional grants provided by the Westlake Academy Foundation.
Miscellaneous Operating Costs
• Less than a 1% change is associated with insurance, professional development travel,
membership fees and dues, and other miscellaneous costs, including:
o Travel and related professional development training, which was limited during FY21,
has steadily increased throughout FY22 to in -person travel, while continuing to offer
virtual professional development as a cost saving alternative,
o Decreases in professional and organizational fees and dues,
o One-time moving and living expense reimbursements provided to the Head of School
Administrator,
o Reduction in printing costs.
Debt Service
• Costs related to the new three-year lease for One -to -One student iPads will increase by
approximately 1% with no anticipated change beyond FY 2022-2023,
o The close-out costs of the prior lease and implementation/programming costs were
recognized expenditures in FY22,
• iPad maintenance and repair costs are self -funded through a $99 annual technology use fee paid
by each student at the beginning of the school year.
If the FY 2022-2023 budget estimates are realized, the Academy's General Fund's budgetary fund
balance is expected to increase by $4,839, for a total of 54 operating days, by August 31, 2023.
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 Director of Finance at (817) 490-5712 or the Academic Finance
Manager at (817) 490-5737, or by writing to 1500 Solana Blvd, Building 7, Suite 7200, Westlake, Texas
76262.
16
BASIC FINANCIAL STATEMENTS
17
Westlake Academy
STATEMENT OF NET POSITION (Page 1 of 2)
August 31, 2022
Exhibit A-1
Data Control
Codes
Assets
Current assets:
1110
Cash and cash equivalents
1120
Current investments
1240
Due from other governments
1290
Other receivables, net
1410
Prepaids
Total Current Assets
Noncurrent assets:
Capital assets:
Net depreciable capital assets
Total Noncurrent Assets
1000 Total Assets
1 4
Primary
Government
Governmental Component
Activities Unit
$ 1,415,306 $
585,129
-
2,159,631
715,151
-
29,457
-
77,138
4,141
2,237,052
2,748,901
549,398
549,398
2,786,450 2,748,901
Deferred Outflows of Resources
1705 Pension outflows 1,660,333 -
1705 OPEB outflows 508,312 -
1700 Total Deferred Outflows of Resources 2,168,645 -
18
Westlake Academy
STATEMENT OF NET POSITION (Page 2 of 2)
August 31, 2022
1
4
Primary
Government
Data Control
Governmental
Component
Codes
Activities
Unit
Liabilities
Current liabilities:
2110
Accounts payable
$ 192,039
$ 6,895
2160
Accrued wages payable
130,640
-
2180
Due to other governments
113,804
-
2200
Accrued expenditures
11,502
-
2300
Unearned revenue
74,497
-
2501
Long-term debt due within one year
185,083
-
Total Current Liabilities
707,565
6,895
Noncurrent liabilities:
2502
Long-term debt due in more than one year
364,260
-
2540
Net pension liability
1,319,306
-
2545
OPEB liability
2,344,162
-
Total Noncurrent Liabilities
4,027,728
-
2000
Total Liabilities
4,735,293
6,895
Deferred Inflows of Resources
2605
Pension inflows
1,654,042
-
2605
OPEB inflows
1,636,918
-
2600
Total Deferred Inflows of Resources
3,290,960
-
Net Position
3200
Net investment in capital assets
55,866
-
Restricted for:
3890
Donor stipulations
1,818
297,999
3900
Unrestricted
(3,128,842)
2,444,007
3000
Total Net Position
$ (3,071,158)
$ 2,742,006
See Notes to Financial Statements.
19
Westlake Academy
STATEMENT OF ACTIVITIES
For the Year Ended August 31, 2022
Exhibit B-1
Program
Revenues
1
3
Data Control
Charges for
Codes
Functions/Programs
Expenses
Services
Primary Government
Governmental Activities
11
Instruction
$ 6,243,385
$ 1,637
12
Instructional resources and media
197,026
15,525
13
Curriculum and staff development
152,125
-
21
Instructional leadership
244,399
-
23
School leadership
1,401,081
-
31
Guidance, counseling, evaluations
567,216
-
33
Health services
137,527
-
35
Food service
51,779
5,823
36
Extracurricular activities
608,292
23,580
41
General administration
286,262
25,930
51
Facilities maintenance and operations
1,320,609
-
52
Security and monitoring services
6,231
-
53
Data processing services
336,010
-
61
Community services
152,200
-
71
Debt service - interest
23,221
-
Total Primary Government
$ 11,727,363
$ 72,495
Component Unit
IC
Westlake Academy Foundation
2M5,943
-
Total Component Units
$ 2,845,943
$ -
See Notes to Financial Statements.
Data Control
Codes
SF
IE
TR
CN
NB
NE
20
Net (Expense) Revenue and Changes
Program Revenues
in Net Position
4
5
6 9
Primary
Operating
Capital
Government
Grants and
Grants and
Governmental Component
Contributions
Contributions
Activities Unit
$ 1,933,598
$ 504,483
$ (3,803,668) $ -
15,630
33,161
(132,710) -
383,320
-
231,195 -
12,333
-
(232,066) -
81,378
16,090
(1,303,613) -
35,224
4,082
(527,910) -
53,677
12,737
(71,113) -
21,367
51,779
27,190
196,290
44,042
(344,380) -
68,940
10,239
(181,153) -
37,639
150,120
(1,132,850) -
13,258
-
7,027 -
8,059
11,732
(316,219) -
-
2,540
(149,660) -
-
-
(23,221) -
$ 2,860,710
$ 841,005
$ (7,953,153) $ -
2,351,466 -
$ 2,351,466 $ -
General Revenues:
(494,477)
(494,477)
State aid -formula grants
7,698,507 -
Investment income
5,823 -
Total General Revenues
7,704,330 _
Change in Net Position
(248,823) (494,477)
Beginning Net Position
(2,822,335) 3,236,483
Ending Net Position $
(3,071,158) $ 2,742,006
21
Exhibit C-1
Westlake Academy
BALANCE SHEET
GOVERNMENTAL FUNDS
August 31, 2022
10 283
Nonmaj or
Data Control
ESSER
Governmental
Codes
General
Fund
Funds
Assets
1100
Cash and cash equivalents $
1,307,033
$
-
$ 108,273
1240
Due from other governments
578,410
70,193
66,548
1260
Due from other funds
245,425
-
-
1290
Other receivables, net
29,457
-
-
1410
Prepaids
61,564
-
15,574
Total Assets $
2,221,889
$
70,193
$ 190,395
Liabilities
2110
Accounts payable $
173,931
$
15,101
$ 3,007
2160
Accrued wages payable
129,682
958
-
2170
Due to other funds
-
132,270
113,155
2180
Due to other governments (Town of Westlake)
113,804
-
-
2200
Accrued expenditures
11,395
107
-
2300
Unearned revenue -
74,497
-
-
Total Liabilities
503,309
148,436
116,162
Deferred Inflows of Resources
Unavailable revenue - due from state
-
70,193
33,191
Total Deferred Inflows of Resources
-
70,193
33,191
Fund Balances
Nonspendable:
3430
Prepaid items
61,564
-
15,574
Restricted for:
3490
Donor stipulations
-
-
1,818
Committed for:
3545
Campus activities
-
-
106,455
3600
Unassigned
1,657,016
(148,436)
(82,805)
3000
Total Fund Balances
1,718,580
(148,436)
41,042
Total Liabilities. Deferred Inflows, and
4000
Fund Balances $
2,221,889
$
70,193
$ 190,395
See Notes to Financial Statements.
22
98
Total
Governmental
Funds
$ 1,415,306
715,151
245,425
29,457
77,138
$ 2,482,477
$ 192,039
130,640
245,425
113,804
11,502
74,497
767,907
103,384
103,384
77,138
1,818
106,455
1,425,775
1,611,186
$ 2,482,477
23
24
Westlake Academy
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION
GOVERNMENTAL FUNDS
August 31, 2022
Exhibit C-2
Fund Balances - Total Governmental Funds
Adjustments for the Statement of Net Position:
Capital assets used in governmental activities are not current financial
resources and, therefore, not reported in the governmental funds.
Capital assets - net depreciable
Other long-term assets are not available to pay for current -period
expenditures and, therefore, are deferred in the governmental funds
Deferred inflows of resources, represents an acquisition of net position that applies
to a future period(s) and so will not be recognized as an inflow of resources
(revenues) until that time
Pension inflows
OPEB inflows
Deferred outflows of resources, represent a consumption of net position that applies
to a future period(s) and is not recognized as an outflow of resources (expense/
expenditures) until then
Pension outflows
OPEB outflows
Some liabilities, including bonds payable and deferred charges, are not reported as
liabilities in the governmental funds.
Net pension liability
OPEB liability
Leases payable, current
Leases payable, noncurrent
$ 1,611,186
Net Position of Governmental Activities $
549,398
103,384
(1,654,042)
(1,636,918)
1,660,333
508,312
(1,319,306)
(2,344,162)
(185,083)
(364,260)
(3,071,158)
25
Westlake Academy
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For the Year Ended August 31, 2022
Exhibit C-3
10
283
Nonmajor
Control
ESSER
Governmental
Codes
General
Fund
Funds
Revenues
5700
Local and intermediate sources
$ 1,438,576
$ -
$ 698,020
5800
State program revenues
8,125,843
4,708
5900
Federal program revenues
-
78,242
188,762
5020
Total Revenues
9,564,419
78,242
891,490
Expenditures
Current:
0011
Instruction
5,602,228
77,643
403,454
0012
Instructional resources and media
150,924
-
14,288
0013
Curriculum and staff development
83,414
-
68,711
0021
Instructional leadership
243,020
-
3,961
0023
School leadership
1,377,222
-
29,559
0031
Guidance, counseling, evaluations
555,561
2,500
10,701
0033
Health services
73,468
45,872
5,513
0036
Extracurricular activities
248,241
-
317,184
0041
General administration
270,313
-
5,710
0051
Facilities maintenance and operations
1,110,044
22,420
38,775
0052
Security and monitoring services
5,793
-
438
0053
Data processing services
320,052
-
5,942
0061
Community services
151,461
-
-
Debt Service:
0071
Principal
291,426
-
_
0072
Interest and fiscal charges
23,221
-
-
Total Expenditures
10,506,388
148,435
904,236
1100
Excess of Revenues
Over (Under) Expenditures
(941,969)
(70,193)
(12,746)
Other Financing Sources (Uses)
7913
Leases (as lessee)
581,716
-
-
Total Other Financing Sources (Uses)
581,716
1200
Net Change in Fund Balances
(360,253)
(70,193)
(12,746)
0100
Beginning fund balances
2,078,833
(78,243)
53,788
3000
(Deficit) Ending Fund Balances
$ 1,718,580
$ (148,436)
$ 41,042
See Notes to Financial Statements
we
98
Total
Governmental
Funds
$ 2,136,596
8,130,551
267,004
10,534,151
6,083,325
165,212
152,125
246,981
1,406,781
568,762
124,853
565,425
276,023
1,171,239
6,231
325,994
151,461
291,426
23,221
11,559,059
(1,024,908)
581,716
581,716
(443,192)
2,054,378
$ 1,611,186
27
m
Westlake Academy
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Year Ended August 31, 2022
Exhibit C-4
Amounts reported for governmental activities in the statement of activities are
different because:
Net changes in fund balances - total governmental funds $ (443,192)
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense.
Capital outlay - right to use assets 581,716
Depreciation expense (291,371)
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds. 103,384
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds.
Pension expense (28,787)
OPEB expense 119,717
The issuance of long-term debt (e.g., bonds, leases, certificates of obligation)
provides current financial resources to governmental funds, while the repayment of
the principal of long-term debt consumes the current financial resources of
governmental funds. Neither transaction, however, has any effect on net position.
Also, governmental funds report the effect of premiums, discounts, and similar
items when they are first issued; whereas, these amounts are deferred and amortized
in the statement of activities. This amount is the net effect of these differences in the
treatment of long-term debt and related items.
Principal payments on leases 291,426
Leases issued (581,716)
Change in Net Position of Governmental Activities $ (248,823)
See Notes to Financial Statements.
29
Westlake Academy
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
August 31, 2022
Exhibit D-1
Assets
Cash and cash equivalents
Prepaids
Liabilities
Accounts payable
Unearned revenue
Net Position
Held for student activities
Custodial
Fund
Student
Activity Fund
$ 28,127
3,300
Total Assets 31,427
1,566
7,516
Total Liabilities 9,082
Total Net Position
The notes to the financial statements are an integral part of this statement.
22,345
$ 22,345
30
Westlake Academy
STATEMENT OF CHANGES INFIDUCIARYNET POSITION
Exhibit D-2
Additions
Local and intermediate sources
Deductions
Extracurricular activities
Beginning net position
FIDUCIARY FUNDS
August 31, 2022
Total Additions
Total Deductions
Change in Fiduciary Net Position
Custodial
Fund
Student
Activity Fund
$ 20,253
20,253
22,566
22,566
(2,313)
24,658
Ending Net Position $ 22,345
The notes to the financial statements are an integral part of this statement.
31
32
Westlake Academy
NOTES TO FINANCIAL STATEMENTS
August 31, 2022
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 Town Council consists of six members and serves as the governing
body for the Academy. 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 Town Council has the authority to set policy direction, appoint the Superintendent, and
evaluate the success of the academic service delivery efforts. 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 more significant accounting policies of the Academy are described below.
A. Description of Government -Wide Financial Statements
The government -wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the nonfiduciary activities of the primary government and
its component units. All fiduciary activities are reported only in the fund financial statements.
Governmental activities, which normally are supported by taxes, intergovernmental revenues, and
other nonexchange transactions, are reported separately from business -type activities, which rely to
a significant extent on fees and charges to external customers for support. Likewise, the primary
government is reported separately from certain legally separate component units for which the
primary government is financially accountable.
B. Financial Reporting Entity
The accompanying financial statements present the government and its component units, entities
for which the government is considered financially accountable. Blended component units,
although legally separate entities, are, in substance, part of the government's operations.
Discretely presented component units are reported in separate columns in the government -wide
financial statements to emphasize that they are legally separate from the government.
As required by accounting principles generally accepted in the United States of America, these
financial statements include the primary government and organizations for which the primary
33
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
government is financially accountable and other organizations for which the nature and
significance of their relationship with the primary government are such that exclusion would
cause the reporting entity's financial statements to be misleading or incomplete.
The definition of the reporting entity is based primarily on the notion of financial accountability.
A primary government is financially accountable for the organizations that make up its legal
entity. It is also financially accountable for legally separate organizations if its officials appoint a
voting majority of an organization's governing body and either it is able to impose its will on that
organization or there is a potential for the organization to provide specific financial benefits to, or
to impose specific financial burdens on, the primary government. A primary government may
also be financially accountable for governmental organizations that are fiscally dependent on it.
A primary government has the ability to impose its will on an organization if it can significantly
influence the programs, projects, or activities of, or the level of services performed or provided
by, the organization. A financial benefit or burden relationship exists if the primary government
(a) is entitled to the organization's resources; (b) is legally obligated or has otherwise assumed the
obligation to finance the deficits of, or provide financial support to, the organization; or (c) is
obligated in some manner for the debt of the organization.
Some organizations are included as component units because of their fiscal dependency on the
primary government. An organization is fiscally dependent on the primary government if it is
unable to adopt its budget, collect grants, set rates or charges, or issue bonded debt without
approval by the primary government.
Discretely Presented Component Units
Westlake Academv Foundation
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. 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.
C. Basis of Presentation - 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
34
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
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.
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 charges for athletic registration fees. 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 and 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.
D. 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, deferred inflows of resources, 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
35
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
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 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.
Governmental Funds
Governmental funds are those funds through which most governmental functions are typically
financed. The government reports the following major governmental funds:
General Fund
The General Fund is the main operating fund of the Academy. This fund is used to
account for all financial resources not accounted for in other funds.
ESSER Fund
The ESSER Fund accounts for federal stimulus ESSER III -Supplemental funds granted to
the LEAS through the CRSSA Act to support the LEA's ability to operate, instruct its
students, address learning loss, prepare schools for reopening, test, repair, and upgrade
projects to improve air quality in school buildings during the coronavirus pandemic.
36
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
Additionally, the Academy reports for the following nonmajor governmental funds:
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
Custodial 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 Custodial Fund is a Student Activity Fund.
These activities are excluded from the school's government -wide financial statements
because they cannot use these assets to finance their operations.
D. 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.
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
ensure 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
37
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
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.
E. Assets, Liabilities, Deferred Outflows/Inflows, and Fund Equity or Net Position
1. 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.
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
At August 31, 2022, the carrying amount of the Academy's deposits (cash, certificates of deposit,
and interest -bearing savings accounts included in temporary investments), including $28,127
recorded in the Custodial fund, was $1,443,433 and the bank balance was $1,504,072. The carrying
amount of the Foundation's deposits was $585,129 as of August 31, 2022 and the bank balance
was $655,786. The Academy cash deposits at August 31, 2022 and during the year then ended
was entirely covered by FDIC insurance or the 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 on $48,037,325.
c. The highest combined balances of cash, savings, and time deposit accounts amounted to
$42,975,717 ($1,534,611 of which belonged to the Academy) on July 31, 2022.
d. Total amount of FDIC coverage at the time of the highest combined balance was $250,000.
The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions
in the areas of investment practices, management reports and establishment of appropriate
policies. Among other things, it requires the Academy to adopt, implement, and publicize an
investment policy. That policy must address the following areas: (1) safety of principal and
liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5)
expected rates of return, (6) maximum allowable stated maturity of portfolio investments, (7)
maximum average dollar -weighted maturity allowed based on the stated maturity date for the
portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for
certificates of deposit. Statutes authorize the Academy to invest in (1) obligations of the U. S.
Treasury, certain U. S. agencies, and the State of Texas; (2) certificates of deposit, (3) certain
municipal securities, (4) money market savings accounts, (5) repurchase agreements, (6) bankers
acceptances, (7) mutual funds, (8) investment pools, (9) guaranteed investment contracts, and (10)
common trust funds. The Act also requires the Academy to have independent auditors perform
test procedures related to investment practices as provided by the Act. The Academy is in
substantial compliance with the requirements of the Act and with local policies.
2. Fair Value
The Academy has applied Governmental Accounting Standards Board (GASB) Statement No. 72,
Fair Value Measurement and Application. GASB Statement No. 72 provides guidance for
determining a fair value measurement for reporting purposes and applying fair value to certain
investments and disclosures related to all fair value measurements.
was
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
3. Receivables and Interfund Transactions
Transactions between funds that are representative of lendingiborrowing arrangements
outstanding at the end of the year are referred to as either "interfund receivables/payables" (i.e.,
the current portion of interfund loans) or "advances to/from other funds" (i.e., the non -current
portion of interfund loans). All other outstanding balances between funds are reported as "due
to/from other funds" in the fund financial statements. If the transactions are between the primary
government and its component unit, these receivables and payables are classified as "due to/from
component unit/primary government." Any residual balances outstanding between the
governmental activities and business -type activities are reported in the government -wide
financial statements as "internal balances."
4. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods (prepaid
expenditures) are recognized as expenditures when utilized.
5. Capital Assets
As the Academy constructs or acquires capital assets each period, including infrastructure assets,
they are capitalized and reported at historical cost (except for intangible right -to -use lease assets,
the measurement of which is discussed in note E.7. below). The reported value excludes normal
maintenance and repairs, which are amounts spent in relation to capital assets that do not
increase the asset's capacity or efficiency or increase its estimated useful life. Donated capital
assets are recorded at acquisition value at the date of donation. Acquisition value is the price that
would be paid to acquire an asset with equivalent service potential on the date of the donation.
Intangible assets follow the same capitalization policies as tangible capital assets and are reported
with tangible assets in the appropriate capital asset class.
6. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section
for deferred outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period(s) and so will
not be recognized as an outflow of resources (expense/ expenditure) until then.
In addition to liabilities, the statement of financial position will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred inflows
of resources, represents an acquisition of net position that applies to a future period(s) and so will
not be recognized as an inflow of resources (revenue) until that time. The government has only
one type of item, which arises only under a modified accrual basis of accounting that qualifies for
reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the
Ut
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
governmental funds balance sheet. The governmental funds may report unavailable revenues
from grant revenues. These amounts are deferred and recognized as an inflow of resources in the
period that the amounts become available. Deferred inflows of resources can also occur at the
government wide level due to differences between investment gains and losses realized on
pension investments compared to assumption used within the pension actuarial valuation model.
7. Leases
The Academy is a lessee for a noncancellable lease of office equipment. The Academy recognizes
a lease liability and an intangible right -to -use lease asset (lease asset) in the government -wide
financial statements. The Academy recognizes lease liabilities with an individual value of $10,000
or more.
At the commencement of a lease, the Academy initially measures the lease liability at the present
value of payments expected to be made during the lease term. Subsequently, the lease liability is
reduced by the principal portion of lease payments made. The lease asset is initially measured as
the initial amount of the lease liability, adjusted for lease payments made at or before the lease
commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized
on a straight-line basis over its useful life.
Key estimates and judgments related to leases include how the Academy determines (1) the
discount rate it uses to discount the expected lease payments to present value, (2) lease term, and
(3) lease payments.
• The Academy uses the interest rate charged by the lessor as the discount rate. When
the interest rate charged by the lessor is not provided, the Academy generally uses its
estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the noncancellable period of the lease. Lease payments
included in the measurement of the lease liability are composed of fixed payments
and purchase option price that the Academy is reasonably certain to exercise.
The Academy monitors changes in circumstances that would require a remeasurement of its lease
and will remeasure the lease asset and liability if certain changes occur that are expected to
significantly affect the amount of the lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported with long-term
debt on the statement of net position.
8. Pensions and OPEB ("Other Post -Employment Benefits")
The fiduciary net position of the Teacher Retirement System of Texas (TRS) has been determined
using the flow of economic resources measurement focus and full accrual basis of accounting.
41
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
This includes for purposes of measuring the net pension liability, OPEB liability, deferred
outflows of resources and deferred inflows of resources related to pensions/OPEB, pension/OPEB
expense, and information about assets, liabilities and additions to/deductions from TRS fiduciary
net position. Benefit payments (including refunds of employee contributions) are recognized
when due and payable in accordance with the benefit terms. Investments are reported at fair
value.
9. Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from 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 and
proprietary fund financial statements, a flow assumption must be made about the order in which
the resources are considered to be applied. It is the government's policy to consider restricted —
net position to have been depleted before unrestricted — net position is applied.
10. Estimates
The preparation of financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenditures/expenses during
the reporting period. Actual results could differ from those estimates.
F. Revenues and Expenditures/Expenses
Amounts reported as program revenues include 1) charges to services or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function
or segment and 2) grants and contributions that are restricted to meeting the operational or
capital requirements of a particular function or segment. All grants, including those dedicated for
specific purposes, and other internally dedicated resources are reported as general revenues
rather than as program revenues.
NOTE 2. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
A. Explanation of certain differences between the governmental fund balance sheet and the
government -wide statement of net position.
The governmental fund balance sheet includes reconciliation between fund balance -total
governmental funds and net position -governmental activities as reported in the government -wide
statement of net position. One element of that reconciliation explains that long-term liabilities,
42
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
including bonds, are not due and payable in the current period and, therefore, are not reported in
the funds.
B. Explanation of certain differences between the governmental fund statement of revenues,
expenditures, and changes in fund balances and the government -wide statement of activities.
The governmental fund statement of revenues, expenditures, and changes in fund balances
includes a reconciliation between net changes in fund balances - total governmental funds and
changes in net position of governmental states that, "the issuance of long-term debt (e.g., bonds)
provides current financial resources to governmental funds, while the repayment of the
principal of long-term debt consumes the current financial resources of governmental funds.
Also, governmental funds report the effect of premiums, discounts, and similar items when debt
is first issued, whereas these amounts are deferred and amortized in the statement of activities."
NOTE 3. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
The Board of Trustees adopts an "appropriated budget" on a Generally Accepted Accounting
Principles (GAAP) basis for the general fund. The general fund budget appears in Exhibit E-1.
Prior to August 25 of the preceding fiscal year, the Academy prepares a budget for the next
succeeding fiscal year beginning September 1. 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 level by the staff. The function and fund level must be amended by approval of a majority
of the members of the Board. Westlake Academy employees can amend the budget within each
function as long as the total function expenditure remains the same as of the adopted budget. If
the total budgeted function expenditure is amended and different from the adopted budget, the
Board must approve that amendment. Appropriations lapse at the end of the year. During the
fiscal year ended August 31, 2022, several supplemental budget appropriations were made.
As of August 31, 2022, expenditures exceeded appropriations at the legal level of control (fund
level) for the General fund in the amount of $451,774.
43
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
A. Restricted Net Position
The Academy records restricted net position on amounts with externally imposed restrictions
(e.g., through donor stipulations) or restrictions imposed by law through constitutional
provisions or enabling legislation. Total restricted net position for the primary government was
$1,818.
B. Deficit Fund Equity
At August 31, 2022, the ESSER fund, IMA fund, and Local Grants fund had a deficit fund
balances of $148,436, $35,812, and $32,013, respectively. The deficit balances will be eliminated in
the future by decreasing expenditures and receiving additional grant funding.
NOTE 4. DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments
As of August 31, 2022, the Academy had the following investments:
Weighted
Carrying Average Maturity
Investment Type Value (Years)
External investment pools $ 105 0.07
Total fair value $ 105
Portfolio weighted average maturity 0.07
Credit risk: The Academy's investment policy limits investments to obligations of the United
States, State of Texas, or their agencies and instrumentalities with an investment quality rating of
not less than "A" or its equivalent, by a nationally recognized investment rating firm. Other
obligations must be unconditionally guaranteed (either express or implied) by the full faith and
credit of the United States Government or the issuing U.S. agency and investment pools with an
investment quality not less than AAA or AAAm, or equivalent, by at least one nationally
recognized rating service. As of August 31, 2022, TexPool's investments credit quality rating was
AAAm (Standard & Poor's)
Custodial credit risk — deposits: In the case of deposits, this is the risk that in the event of a bank
failure, the Academy's deposits may not be returned to it. As of August 31, 2022, the Academy's
deposits with financial institutions in excess of federal depository insurance were fully
collateralized by the FDIC insurance and pledged collateral held by the Academy's agent bank in
the Town of Westlake's name.
44
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
Custodial credit risk — investments: For an investment, 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. The Academy's investment
policy requires that it will seek to safeguard securities at financial institutions, avoiding physical
possession. Further, all trades, where applicable, are executed by delivery versus payment to
ensure that securities are deposited in the Academy's safeguard account prior to the release of
funds.
TexPool
TexPool was established as a trust company with the Treasurer of the State of Texas as trustee,
segregated from all other trustees, investments, and activities of the trust company. The State
Comptroller of Public Accounts exercises oversight responsibility over TexPool. Oversight
includes the ability to significantly influence operations, designation of management, and
accountability for fiscal matters. Additionally, the State Comptroller has established an advisory
board composed of both participants in TexPool and other persons who do not have a business
relationship with TexPool. The advisory board members review the investment policy and
management fee structure. Finally, Standard & Poor's rate TexPool AAAm. As a requirement to
maintain the rating, weekly portfolio information must be submitted to Standard & Poor's, as
well as to the office of the Comptroller of Public Accounts for review. At August 31, 2022, the fair
value of the position in TexPool approximates fair value of the shares. There were no limitations
or restrictions on withdrawals.
B. Fair Value Measurements
The Foundation categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. The hierarchy is based on the valuation
inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active
markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs
are significant unobservable inputs.
Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical
assets or liabilities in active markets that the plan has the ability to access.
Level 2 Inputs to the valuation methodology include
• quoted prices for similar assets or liabilities in active markets;
• quoted prices for identical or similar assets or liabilities in inactive markets;
• inputs other than quoted prices that are observable for the asset or liability; and
• inputs that are derived principally from our corroborated by observable market
data by correlation or other means.
45
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
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 to the valuation methodology are unobservable and significant to the fair
value measurement.
The asset's 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. There have been no changes in the methodologies used at August 31, 2022.
Marketable Equity Securities: Valued at the last reported daily price
The preceding methods described may produce a fair value calculation that may not be
indicative of net realizable value or reflective of future fair values. Furthermore, although the
plan believes its valuation methods are appropriate and consistent with other market
participants, the use of different methodologies or assumption to determine the fair value of
certain financial instruments could result in a different fair value measurement at the
reporting date.
The following table sets forth by level, within the fair value hierarchy, the Foundation's fair
value measurements at August 31, 2022.
Investment Type
Marketable equity securities:
Equity
Fixed income
Total assets measured at fair value
Level Level Level Total
$ 1,293,132 $ - $ - $ 1,293,132
866,499 - - 866,499
$ 2,159,631 $ - $ - $ 2,159,631
46
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
C. Receivables
The following comprise receivable balances of the primary government at year end:
Nonmajor
General ESSER Govt. Total
Due to other governments
State entitlements $ 578,410 $ 70,193 $ 33,191 681,794
Federal agencies - - 33,357 33,357
Other 29,457 - - 29,457
Total $ 607,867 $ 70,193 $ 66,548 744,608
D. Capital Assets
Capital asset activity for the year ended August 31, 2022, was as follows:
Beginning
Disposals /
Ending
Balances
Increases
Reclassifications
Balances
Capital assets, being depreciated:
Right to use leased equipment
259,053
581,716
-
840,769
Total capital assets being depreciated
259,053
581,716
-
840,769
Less accumulated depreciation
Right to use leased equipment
-
291,371
-
291,371
Total accumulated depreciation
-
291,371
-
291,371
Net capital assets being depreciated
259,053
290,345
-
549,398
Total Capital Assets
$ 259,053
$ 290,345
$ - $
549,398
Depreciation
was charged to governmental functions as follows:
0011
Instruction
$ 291,371
Total Governmental Activities Depreciation Expense
$ 291,371
E. Long-term Debt — Lease Payable
The Academy had a beginning lease liability balance of $259,053, which was paid in full during
the year ending August 31, 2022. In addition, the Academy entered into a three-year lease
agreement on July 1, 2022, as lessee for the acquisition and use of various Apple products and
software licenses. The total initial lease liability for the agreement was recorded in the amount
of $581,716. As of August 31, 2022, the value of the lease liability was $549,343. The Academy is
required to make monthly principal/interest payments of $17,362. The lease has an interest rate
of 5%. In addition, the office equipment has a three-year estimated useful life. The value of the
47
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
right -to -use assets as of the end of the current fiscal year was $840,769 and had accumulated
amortization of $235,560.
The following summarizes the changes in lease payable during the year.
Amounts
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:
Leases $ 259,053 $ 581,716 $ (291,426) $ 549,343 $ 185,083
Total Governmental Activities $ 259,053 $ 581,716 $ (291,426) $ 549,343 $ 185,083
Long-term Liabilities Due in More than One Year $ 364,260
The annual requirements to amortize lease obligations as of August 31, 2022, are as follows:
Governmental Activities
Year Ending
Leases
August 31,
Principal
Interest
2023
$ 185,083 $
23,264
2024
194,552
13,795
2025
169,708
3,913
Total
$ 549,343 $
40,972 $
Total
Requirements
$ 208,347
208,347
173,621
590,315
F. Interfund Transactions
The composition of interfund balances as of the year ended August 31, 2022 were as follows:
Due to:
Nonmajor
Due from: ESSER Govt. Total
General fund $ 132,270 $ 113,155 $ 245,425
Total $ 132,270 $ 113,155 $ 245,425
Interfund balances resulted from the timing difference between the dates that (1) interfund
goods and services are provided or reimbursable expenditures occur, (2) transactions are
recorded in the accounting system, and (3) payments between funds are made. All balances are
expected to be paid in the subsequent year.
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
NOTE 5. OTHER INFORMATION
A. 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.
B. 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, 2022 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.
C. Defined Benefit Pension Plan
Plan Description
The Westlake 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). It is a defined benefit pension plan 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.
49
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
All employees of public, state -supported educational institutions in Texas who are employed for
one-half or more of the standard workload 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
Detail information about the Teacher Retirement System's fiduciary net position is available in a
separately issued Annual Comprehensive Financial Report (ACFR) that includes financial
statements and required supplementary information. That report may be obtained on the
Internet at https://www.trs.texas.gov/Pages/about publ.ications.aspx ; 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.
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. Actuarial implications of the funding
provided in the manner are determined by the System's actuary.
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 percent of the member's annual compensation and a state contribution rate of
not less than 6 percent and not more than 10 percent of the aggregate annual compensation paid
to members of the system during the fiscal year.
50
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
Employee contribution rates are set in state statute, Texas Government Code 825.402. The TRS
Pension Reform Bill (Senate Bill 12) of the 86th Texas Legislature amended Texas Government
Code 825.402 for member contributions and increased employee and employer contribution
rates for fiscal years 2020 thru 2025.
Schedule of Contribution Rates
Contribution Rates
2021
(Rate)
2022
(Rate)
Member
7.7%
8.0%
Non -employer contributing entity (State)
7.5%
7.75%
Employers
7.5%
7.75%
The employer and member contributions for the Academy's fiscal year 2022 amounted to
$272,001 $497,049, respectively. The State's contributions for plan year 2021 (measurement year)
amounted to $334,493.
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 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 percent of the
state contribution rate for certain instructional or administrative employees; and 100
percent of the state contribution rate for all other employees
In addition to the employer contributions listed above, there is an additional surcharge an
employer is subject to.
51
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
• All public schools, charter schools, and regional educational service centers must
contribute 1.6 percent of the member's salary beginning in fiscal year 2021, gradually
increasing to 2 percent in fiscal year 2025.
• 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.
Actuarial Assumptions
The Total Pension Liability in the August 31, 2021 actuarial valuation was determined using the
following actuarial assumptions:
Valuation Date
Actuarial Cost Method
Asset Valuation Method
Single Discount Rate
Investment Rate of Return
Municipal Bond Rate as of August 2020
Inflation
Overall payroll growth
Active mortality rates
August 31, 2021 rolled forward to August 31,
2022
Individual entry age normal
Market value
7.25%
7.25%
2.33% as reported in Fidelity Index's 20-year
Municipal GO
2.30% per year
3.05% to 9.05%, including inflation
Based on 90% of the RP 2014 Employing
Mortality Tables for males and females with
full generational mortality. The post -
retirement mortality rates for healthy lives
were based on the 2018 TRS of Texas Health
Pensioner Mortality Tables with full
generational projection using the ultimate
improvement rates from the most recently
published projective scale U-MP.
The actuarial methods and assumptions are used in the determination of the total pension
liability are the same assumptions used in the actuarial valuation as of August 31, 2020. For a full
description of these assumptions please see the actuarial valuation report dated November 9,
2020.
Discount Rate
A single discount rate of 7.25 percent was used to measure the total pension liability. The single
discount rate was based on the expected rate of return on plan investments of 7.25 percent. The
projection of cash flows used to determine this single discount rate assumed that contributions
52
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
from active members, employers and the non -employer contributing entity will be made at the
rates set by the legislature during the 2019 session. It is assumed that future employer and state
contributions will be 8.50 percent of payroll in fiscal year 2020 gradually increasing to 9.55
percent of payroll over the next several years. This includes all employer and state contributions
for active and rehired retirees.
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 7.25 percent. 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. Best estimates of geometric real rates of return for each major asset class as of August
31, 2021 are summarized in the following table:
Asset Class
Target Allocation
Long -Term Expected
Real Rate of Return
(Geometric)
Expected
Contribution to
Long -Term
Portfolio
Returns
Global Equity
54.0%
18.9%
3.87%
Stable Value
21.0%
3.10%
0.13%
Real Return
21.0%
15.60%
1.63%
Risk Parity
8.0%
2.80%
0.28%
Asset Allocation
Leverage
(4.0) %
(1.20) %
2.22%
Inflation
2.20%
Volatility Drag
(0.95) %
Total
100.0%
Discount Rate Sensitivity Analysis
The following table presents the Net Pension Liability of the plan using the discount rate of
7.25%, and what the net pension liability would be if it were calculated using a discount rate that
is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current
rate.
53
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
1% Decrease
6.25%
Discount Rate 1% Increase
7.25% 8.25%
Academy's proportionate
share of the net pension $ 2,882,892 $ 1,319,306 $ 50,762
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions:
At August 31, 2022, the Academy reported a liability of $1,319,306 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 $1,319,306
State's proportionate share that is associated with Academy 1,996,109
Total 3 315 415
The net pension liability was measured as of August 31, 2021 and the total pension liability used
to calculate the net pension liability was determined by an actuarial valuation as August 31, 2020
rolled forward to August 31, 2021. The Academy's proportion of the net pension liability was
based on the Academy's contributions to the pension plan relative to the contributions of all
employers to the plan for the period September 1, 2020 thru August 31, 2021.
At August 31, 2021, the employer's proportion of the collective net pension liability was
0.0051806% which was a decrease of 0.000397% from its proportion measured as of August 31,
2020.
Changes since the Prior Measurement Date
There were no changes in assumptions or benefit terms that affected measurement of the total
pension liability since the prior measurement date.
For the year ended August 31, 2022, the Academy recognized pension expense of $308,768 and
revenue of $7,980 for support provided by the State.
At August 31, 2022, the Academy reported deferred outflows and inflows of resources related to
pensions from the following sources:
54
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
Differences between expected and actual economic
experience
Changes in actuarial assumptions
Difference between projected and actual investment
earnings
employer's
contributions and proportionate share of contributions
Contributions subsequent to the measurement date
Total
Deferred Deferred
Outflows Inflows
of Resources of Resources
$ 2,208 $ 92,880
466,349 203,288
81,946 1,188,166
837,829 169,708
272,001 -
$ 1,660,333 $ 1,654,042
Deferred outflows of resources related to pensions resulting from contributions subsequent to the
measurement date of $272,001 will be recognized as a reduction of the net pension liability for the
year ending August 31, 2023.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ended August 31:
2023
$ 1,275
2024
(4,490)
2025
(96,237)
2026
(171,682)
2027
17,031
Thereafter
(11,607)
$ (265,710)
D. Health Care Coverage
During the period ended August 31, 2021, 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
$397 per month per employee and $322 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 Aetna, and Caremark Health administers the prescription drug plan. The
55
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
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.
E. Defined Other Post Employment Benefit Plan
Plan Description
The Academy participates in the Texas Public School Retired Employees Group Insurance
Program (TRS-Care). It is a multiple -employer, cost -sharing defined Other Post -Employment
Benefit (OPEB) plan that has a special funding situation. The plan is administered through a
trust by the Teacher Retirement System of Texas (TRS) Board of Trustees. It is established
and administered in accordance with the Texas Insurance Code, Chapter 1575.
OPEB Plan Fiduciary Net Position
Detail information about the TRS-Care's fiduciary net position is available in the separately -
issued TRS 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.u.s/abou.t/docu.ments/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-Care provides a basic health insurance coverage (TRS-Care 1), at no cost to all retirees
from public schools, charter schools, regional education service centers and other
educational academies who are members of the TRS pension plan. Optional dependent
coverage is available for an additional fee.
Eligible retirees and their dependents not enrolled in Medicare may pay premiums to
participate in one of two optional insurance plans with more comprehensive benefits (TRS-
Care 2 and TRS-Care 3). Eligible retirees and dependents enrolled in Medicare may elect to
participate in one of the two Medicare health plans for an additional fee. To qualify for TRS-
Care coverage, a retiree must have at least 10 years of service credit in the TRS pension
system. The Board of Trustees is granted the authority to establish basic and optional group
insurance coverage for participants as well as to amend benefit terms as needed under
Chapter 1575.052. There are no automatic post -employment benefit changes; including
automatic COLAs.
56
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
The premium rates for the optional health insurance are based on years of service of the
member. The schedule below shows the monthly rates for a retiree with and without
Medicare coverage.
TRS-Care Monthly Premium Rates
Medicare Non -Medicare
Retiree or Suviving Spouse $
Retiree and Spouse
Retiree or Suviving Spouse
and Children
Retiree and Family
Contributions
135 $
200
529
689
468
408
1,020
999
Contribution rates for the TRS-Care plan are established in state statute by the Texas
Legislature, and there is no continuing obligation to provide benefits beyond each fiscal
year. The TRS-Care plan is currently funded on a pay-as-you-go basis and is subject to
change based on available funding. Funding for TRS-Care is provided by retiree premium
contributions and contributions from the state, active employees, and schools based upon
school payroll. The TRS Board of trustees does not have the authority to set or amend
contribution rates.
Texas Insurance Code, section 1575.202 establishes the state's contribution rate which is
1.25% of the employee's salary. Section 1575.203 establishes the active employee's rate which
is .65% of pay. Section 1575.204 establishes an employer contribution rate of not less than
0.25% or not more than 0.75% of the salary of each active employee of the public. The actual
employer contribution rate is prescribed by the Legislature in the General Appropriations
Act. The following table shows contributions to the TRS-Care plan by type of contributor.
Schedule of Contribution Rates
Contribution Rates
2021
(Rate)
2022
(Rate)
Active employee
0.65%
0.65%
Non -employer contributing entity (State)
1.25%
1.25%
Employers
0.75%
0.75%
Federal/Private Funding
1.25%
1.25%
The employer and member contributions for the Academy's fiscal year 2022 amounted to
$54,054 and $40,386, respectively. The State's contributions for plan year 2021 (measurement
year) amounted to $63,606.
57
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
In addition to the employer contributions listed above, there is an additional surcharge all
TRS employers are subject to (regardless of whether or not they participate in the TRS Care
OPEB program). When employers hire a TRS retiree, they are required to pay to TRS Care, a
monthly surcharge of $535 per retiree.
TRS-Care received supplemental appropriations from the State of Texas as the Non -
Employer Contributing Entity in the amount of $5,520,343 in fiscal year 2021 for consumer
protections against medical and health care billing by certain out -of -network providers.
Actuarial assumptions:
The actuarial valuation of the total OPEB liability was performed as of August 31, 2020.
Update procedures were used to roll forward the total OPEB liability to August 31, 2021. The
actuarial valuation of the OPEB plan offered through TRS-Care is similar to the actuarial
valuation performed for the pension plan, except that the OPEB valuation is more complex.
The following assumptions used for the valuation of the TRS-Care OPEB liability are
identical to the assumptions employed in the August 31, 2021 TRS annual pension actuarial
valuation (dated August 31, 2020, rolled forward to August 31, 2021):
The active mortality rates were based on 90 percent of the RP-2014 Employee Mortality
Tables for males and females. The post -retirement mortality rates for healthy lives were
based on the 2018 TRS of Texas Healthy Pensioner Mortality Tables, with full generational
projection using the ultimate improvement rates from the mortality projection scale MP-
2018.
Actuarial cost method
Inflation
Discount rate
Election rates
Healthcare trend rates
Administrative expenses
Individual entry age normal
2.3% per year
1.95%, as reported in Fidelity Index's 20-year
Municipal GO AA Index as of August 31,
2021
Normal Retirement; 65% participation prior
to age 65 and 40% after age 65. 25% of pre-65
retirees are assumed to discontinue coverage
at age 65.
9% for Medicare retirees and 7.30% for non -
Medicare retirees
Third -party administrative expenses related
to the delivery of health care benefits are
included in the age -adjusted claims costs.
01
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
Discount Rate:
A single discount rate of 1.95% was used to measure the total OPEB liability at August 31,
2021. This was a decrease of 0.38% in the discount rate since the previous measurement date.
Because the plan is essentially a "pay-as-you-go" plan, the single discount rate is equal Page
1 4 to the prevailing municipal bond rate. The projection of cash flows used to determine the
discount rate assumed that contributions from active members and those of the contributing
employers and the nonemployer contributing entity are made at the statutorily required
rates. Based on those assumptions, the OPEB plan's fiduciary net position was projected to
not be able to make all future benefit payments of current plan members. Therefore, the
municipal bond rate was used for the long-term rate of return and was applied to all periods
of projected benefit payments to determine the total OPEB liability.
The source of the municipal bond rate is the Fidelity "20-year Municipal GO AA Index" as of
August 31, 2021 using the Fixed Income Market Data/Yield Curve/ Data Municipal bonds
with 20 years to maturity that include only federally tax-exempt municipal bonds.
Discount Rate Sensitivity Analysis
The following presents the total OPEB liability of the Academy, calculated using the
discount rate of 1.95%, as well as what the Academy's total OPEB liability (asset) would be if
it were calculated using a discount rate that is 1-percentage-point lower (0.95%) or 1-
percentage-point higher (2.95%) than the current rate:
1% Decrease Discount Rate 1% Increase
0.95% 1.95% 2.95%
Academy's proportionate share
of the net OPEB liability $ 2,827,599
Healthcare Cost Trend Rates Sensitivity Analysis
2,344,162
$ 1,963,681
The following presents the net OPEB liability of the plan using the assumed healthcare cost
trend rate, as well as what the net OPEB liability would be if it were calculated using a trend
rate that is one -percentage point lower or one -percentage point higher than the assumed
healthcare cost trend rate.
1% Decrease 1% Increase
in Trend Rate Trend Rate
in Trend Rate
Academy's proportionate share
of the net OPEB liability $ 1,898,694 $ 2,344,162 $ 2,941,870
59
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEBs
At August 31, 2022, the Academy reported a liability of $2,344,162 for its proportionate share
of the TRS's Net OPEB Liability. This liability reflects a reduction for State OPEB support
provided to the Academy. The amount recognized by the Academy as its proportionate
share of the net OPEB liability, the related State support, and the total portion of the net
OPEB liability that was associated with the Academy were as follows:
Academy's proportionate share of the collective net OPEB liability $2,344,162
State's proportionate share that is associated with Academy 3,140,655
Total 5.484,817
The Net OPEB Liability was measured as of August 31, 2021 and the Total OPEB Liability
used to calculate the Net OPEB Liability was determined by an actuarial valuation as of
August 31, 2020 rolled forward to August 31, 2021. The employer's proportion of the Net
OPEB Liability was based on the employer's contributions to the OPEB plan relative to the
contributions of all employers to the plan for the period September 1, 2020 thru August 31,
2021.
At August 31, 2021 the employer's proportion of the collective Net OPEB Liability was
.0060770% which was a decrease of .00001167% the same proportion measured as of August
31, 2020.
Changes Since the Prior Actuarial Valuation
The following were changes to the actuarial assumptions or other inputs that affected
measurement of the Total OPEB liability since the prior measurement period.
• The discount rate decreased from 2.33% as of August 31, 2020 to 1.95% as of August
31, 2021. This change increased the total OPEB liability.
Changes of Benefit Terms Since the Prior Measurement Date — There were no changes in
benefit terms since the prior measurement date.
For the year ended August 31, 2021, the Academy recognized OPEB expense of ($181,577)
and revenue of ($115,914) for support provided by the State.
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
At August 31, 2022, the Academy reported deferred outflows of resources and deferred
inflows of resources related to the OPEB liability from the following sources:
Differences between expected and actual economic
experience
Changes in actuarial assumptions
Difference between projected and actual investment
earnings
employer's
contributions and proportionate share of contributions
Contributions subsequent to the measurement date
Total
Deferred Deferred
Outflows Inflows
of Resources of Resources
$ 100,927 $ 1,134,738
259,643 495,747
2,576 31
91,112 6,402
54,054 -
$ 508,312 $ 1,636,918
The Academy reported $54,054 as deferred outflows of resources related to OPEB resulting
from contributions subsequent to the measurement date that will be recognized as a
reduction of the net OPEB liability for the year ending August 31, 2023.
Other amounts reported as deferred outflows of resources related to OPEB will be
recognized in OPEB expense as follows:
Year ended August 31:
2023
$ (233,896)
2024
(233,955)
2025
(233,940)
2026
(172,234)
2027
(88,696)
Thereafter
(219,939)
$ (1,182,660)
F. Related Party Transactions
The Westlake Academy Foundation contributed $1,654,044 to the Academy during the fiscal
year ended August 31, 2022.
61
Westlake Academy
NOTES TO FINANCIAL STATEMENTS, Continued
August 31, 2022
G. 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, $841,005, in the government -wide
statement of activities as capital grants and contributions and as expense allocated to the
various functions.
H. Restatement
Due to the implementation of GASB Statement No. 87, Leases, the Academy restated
beginning net position for governmental activities. The restatement of net position is as
follows:
Governmental
Activities
Prior year ending net position, as reported $ (3,025,239)
Adoption of GASB 87 - lease payable (56,149)
Adoption of GASB 87 - right to use assets 259,053
Restated beginning net position $ (2,822,335)
I. Subsequent Events
There were no material subsequent events through January 26, 2023, the date the financial
statements were issued.
62
REQUIRED SUPPLEMENTARY INFORMATION
63
Westlake Academy
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
For the Year Ended August 31, 2022
Exhibit E-1
Data Control
Codes
Revenues
5700 Local and intermediate sources
5800 State program revenues
5020 Total Revenues
0011
0012
0013
0021
0023
0031
0033
0036
0041
0051
0052
0053
0061
0071
0072
Expenditures
Current:
Instruction
Instructional resources and media
Curriculum and staff development
Instructional leadership
School leadership
Guidance, counseling, evaluations
Health services
Extracurricular activities
General administration
Facilities maintenance and operations
Security and monitoring services
Data processing services
Community services
Debt service:
Principal
Interest
Total Expenditures 9,432,983
Original
Budget
$ 1,262,371 $
8,109,375
9,371,746
Revenues Over (Under)
1100 Expenditures
Other Financing Sources (Uses)
7913 Leases (as lessee)
Total Other Financing Sources
1200 Net Change in Fund Balance
0100 Beginning fund balance
3000 Ending Fund Balance
4,884,668
135,797
55,795
225,326
1,258,754
618,426
81257
228:089
241,964
967,763
26,800
356,879
143,543
207,922
Final Budget Actual
1,378,581
$ 1,438,576
8,030,969
8,125,843
9,409,550
9,564,419
5,558,889
5,602,228
184,754
150,924
93,417
83,414
222,822
243,020
1,265,782
1,377,222
535,792
555,561
73,989
73,468
226,485
248,241
246,764
270,313
960,227
1,110,044
26,000
5,793
299,756
320,052
137,715
151,461
199,001
291,426
23,221
23,221
10,054, 614
10,506,388
(61,237) (645,064) (941,969)
581,716 581,716
581,716 581,716
$ (61,237) $ (63,348) (360,253)
2,078,833
$ 1,718,580
Notes to Required Supplementary Information
1. Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP).
* Expenditures exceeded appropriations at the legal level on control.
64
Variance with
Final Budget
Positive
(Negative)
$ 59,995
94,874
154,869
(43,339)
33,830
10,003
(20,198)
(111,440)
(19,769)
521
(21,756)
(23,549)
(149,817)
20,207
(20,296)
(13,746)
(92,425)
(451,774)
(296,905)
$ (296,905)
65
Westlake Academy
NOTES TO THE BUDGETARY COMPARISON SCHEDULE
For the Year Ended August 31, 2022
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:
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 by the staff, function and fund level must be amended 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. Westlake Academy employees can amend the budget within each function as long as the total function
expenditure remains the same as adopted budget. If the total budgeted function expenditure is amended
and different from adopted budget, the Board must approve the amendment. All budget appropriations
lapse at year end.
67
Westlake Academy
SCHEDULE OF ACADEMY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY
TEACHER RETIREMENT SYSTEM OF TEXAS
Years Ended:
Exhibit E-2
Academy's proportion of the net pension liability
Academy's proportionate share of net pension liability
State's proportionate share of net pension liability
associated with Westlake Academy
8/31/2021 8/31/2020 8/31/2019
0.0051806% 0.0055779% 0.0028912%
$ 1,319,306 $ 2,987,427 $ 1,502,914
1,996,109 4,112,478 5,272,547
Total $ 3,315,415 $ 7,099,905 $ 6,775,461
Covered payroll
Academy's proportionate share of net pension liability
as a percentage of covered payroll
Plan fiduciary net position as a percentage of total
pension liability
$ 6,119,043 $ 5,984,542 $ 5,534,431
21.56% 49.92% 27.16%
88.79% 75.54% 75.24%
Notes to schedule:
1) Only eight 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.
RM]
8/31/2018
8/31/2017
8/31/2016
8/31/2015
8/31/2014 1
0.0027061%
0.0028012%
0.0027822%
0.0030945%
0.0007190%
$ 1,489,525
$ 895,663
$ 1,051,346
$ 1,093,865
$ 192,056
5,571,598
3,480,057
4,035,754
3,667,893
2,965,583
$ 7,061,123
$ 4,375,720
$ 5,087,100
$ 4,761,758
$ 3,157,639
$ 5,289,916
$ 5,391,515
$ 5,094,571
$ 4,784,695
$ 4,300,931
28.16%
16.61%
20.64%
22.86%
4.47%
73.74% 82.17% 78.00% 78.43% 83.25%
Westlake Academy
SCHEDULE OF EMPLOYER CONTRIBUTIONS TO PENSION PLAN
TEACHER RETIREMENT SYSTEM OF TEXAS
Years Ended:
Exhibit E-3
Statutorily required contributions
Actual contributions in relation to statutorily required
contributions
Contribution deficiency (excess)
Academy's covered payroll
Contributions as a percentage of Academy's covered
payroll
8/31/2022 8/31/2021 8/31/2020
$ 272,001 $ 222,306 $ 230,148
$ 272,001 $ 222,306 $ 230,148
$ 6,248,867 $ 6,119,043 $ 5,984,542
4.35% 3.63% 3.85%
1) Only eight 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.
2) 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.
70
8/31/2019
8/31/2018
8/31/2017
8/31/2016
8/31/2015 1
$ 100,311
$
91,593
$
131,436
$
88,399
$
92,325
$ 100,311
$
91,593
$
131,436
$
88,399
$
92,325
$ 5,534,431
$
5,289,515
$
5,391,515
$
5,094,571
$
4,784,695
1.81%
1.73%
2.44%
1.74%
1.93%
71
Westlake Academy
SCHEDULE OF ACADEMY'S PROPORTIONATE SHARE OF
NET OPEB LIABILITY
TEACHER RETIREMENT SYSTEM CARE PLAN
Years Ended:
Exhibit E-4
Academy's proportion of the net OPEB liability
Academy's proportionate share of net OPEB liability
State's proportionate share of net OPEB liability
associated with Westlake Academy
8/31/2021 8/31/2020
0.0060770% 0.0060887%
$ 2,344,162 $ 2,314,571
3,140,655 3,110,229
Total $
Covered payroll $
Academy's proportionate share of net OPEB liability as a percentage
of covered payroll
Plan fiduciary net position as a percentage of total OPEB liability
5,484,817 $ 5,424,800
5,264,791 $ 5,984,542
44.53% 38.68%
4.99% 4.99%
Notes to schedule:
1 Only five years of data is presented in accordance with GASB #75. "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."
72
8/31/2019
0.0059857%
$ 2,830,719 $
8/31/2018 8/31/2017 1
0.0059093% 0.0058830%
2,950,588 $ 2,558,314
3,761,390 4,695,104
$ 6,592,109 $ 7,645,692 $
$ 5,534,431 $ 5,289,916 $
51.15%
2.66%
55.78%
1.57%
4,406,333
6,964,647
5,391,515
47.45%
0.91 %
73
Westlake Academy
SCHEDULE OF EMPLOYER CONTRIBUTIONS TO PENSION PLAN
TEACHER RETIREMENT SYSTEM OF TEXAS
Years Ended:
Exhibit E-5
Statutorily required contributions
Actual contributions in relation to statutorily required
contributions
Contribution deficiency (excess)
Academy's covered payroll
Contributions as a percentage of Academy's covered
payroll
8/31/2022 8/31/2021 8/31/2020
$ 54,054 $ 46,994 $ 46,278
$ 54,054 $ 46,994 $ 46,278
$ 6,248,867 $ 6,102,222 $ 5,984,542
0.87% 0.77% 0.77%
1) Only five years of data is presented in accordance with GASB #75. "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."
2) GASB 75 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.
74
8/31/2019 8/31/2018
46,703 $ 46,204
$ 46,703 $ 46,204
5,534,431 $ 5,289,916
0.84% 0.87%
75
76
OTHER SUPPLEMENTARY INFORMATION
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
77
Westlake Academy
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
August 31, 2022
Exhibit H-3
224 284 289
Data Control IDEA Part B IDEA B COVID Health
Codes Formula Formula ARP Support
Assets
1100 Cash and cash equivalents $ -
1240 Due from other governments -
1410 Prepaids -
1000 Total Assets $ - $
33,357 -
33,357 $ -
Liabilities
2110 Accounts payable $ - $ - $ -
2170 Due to other funds - 33,357 -
2000 Total Liabilities - 33,357 -
Deferred Inflows of Resources
Unavailable revenue - due from state -
Total Deferred Inflows of Resources -
Fund Balances
Nonspendable:
3430 Prepaids -
Restricted for:
3490 Donor stipulations -
Committed for:
3545 Campus activities -
3600 Unassigned -
3000 Total Fund Balances -
Total Liabilities, Deferred Inflows,
4000 and Fund Balances $ - $
See notes to the financial statements
33,357 $ -
0.
397
410
461
484 497
Advanced
Campus
Placement
Activity
Local WAF
Initiatives
IMA
Funds
Grants Endowment
Total
$ 1,818 $
-
$ 106,455
$ - $ - $
108,273
-
33,191
-
- -
66,548
-
14,980
594
- -
15,574
$ 1,818 $
48,171
$ 107,049
$ - $ - $
190,395
$ - $
1,610
$ -
$ 1,397 $ - $
3,007
-
49,182
-
30,616 -
113,155
-
50,792
-
32,013 -
116,162
-
33,191
-
- -
33,191
-
33,191
-
- -
33,191
- 14,980 594 - - 15,574
1,818 - - - - 1,818
- - 106,455 - - 106,455
- (50,792) - (32,013) - (82,805)
1,818 (35,812) 107,049 (32,013) - 41,042
$ 1,818 $ 48,171 $ 107,049 $ - $ - $ 190,395
WX
Westlake Academy
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended August 31, 2022
Exhibit H-4
224 284
289
Data Control
IDEA Part B IDEA B
COVID Health
Codes
Formula Formula ARP
Support
Revenues
5700
Local and intermediate sources
$ - $ -
$ _
5800
State program revenues
- _
_
5900
Federal program revenues
122,042 33,357
33,363
Total Revenues
122,042 33,357
33,363
Expenditures
Current:
0011
Instruction
122,042 33,357
-
0012
Instructional resources and media
- -
_
0013
Curriculum and staff development
- -
_
0021
Instructional leadership
_ _
-
0023
School leadership
- -
3,111
0031
Guidance, counseling & evaluation
- -
_
0033
Health services
- -
3,532
0036
Extracurricular activities
_ _
_
0041
General administration
- _
_
0051
Facilities maintenance and operations
- -
26,282
0052
Security and monitoring services
- -
438
0053
Data processing services
- _
-
Total Expenditures
122,042 33,357
33,363
Excess (Deficiency) of Revenues Over
1100
(Under) Expenditures
- _
_
1200
Net Change in Fund Balances
- _
_
0100
Beginning fund balances
_ _
_
3000
Ending Fund Balances
$ - $ _
$ _
See notes to the financial statements
:1
397 410
Advanced
Placement
Initiatives IMA
1,818 2,890
1,818 2,890
461
484
497
Campus
Activity
Local
WAF
Funds
Grants
Endowment
Total
314,693
$ 378,553
$ 4,774
$ 698,020
-
-
-
4,708
-
-
-
188,762
314,693
378,553
4,774
891,490
38,702 - 204,579
- - 14,288
- - 68,711
- - 3,961
- - 26,448
- - 10,701
- - 1,981
- 256,924 60,260
- 2,409 3,301
- 12,493
- - 5,942
38,702 259,333 412,665
4,774 403,454
- 14,288
- 68,711
- 3,961
- 29,559
- 10,701
- 5,513
- 317,184
- 5,710
- 38,775
- 438
- 5,942
(12,746)
1,818 (35,812) 55,360 (34,112) - (12,746)
- - 51,689 2,099 - 53,788
$ 1,818 $ (35,812) $ 107,049 $ (32,013) $ - $ 41,042
81
Exhibit J-4
Data Control
Codes
API
AP2
Westlake Academy
USE OF FUNDS REPORT
August 31, 2022
Column 1
Section A: Compensatory Education Programs Responses
Did your LEA expend any state compensatory education
program state allotment funds during the district's fiscal
year? Yes
Does the LEA have written policies and procedures for its
state compensatory education program?
List the total state allotment funds received for state
compensatory education programs during the district's
AP3 fiscal year $
List the actual direct program expenditures for state
compensatory education programs during the LEA's fiscal
AN year. (PICs 24, 26, 28, 29, 30, 34) $
Section B : Bilingual Education Programs
Did your LEA expend any bilingual education program
AP5 state allotment funds during the LEA's fiscal year?
Does the LEA have written policies and procedures for its
AP6 bilingual education program?
List the total state allotment funds received for bilingual
AP7 education programs during the LEA's fiscal year. $
List the actual direct program expenditures for bilingual
education programs during the LEA's fiscal year. (PICs 25,
AP8 35) $
Yes
32,956
25,175
Yes
Yes
10,739
6,506
FM
C ERTIFIED I'll BLIC A I'AN"I S
January 23, 2023
To the Members of the Board of Trustees
and Management of Westlake Academy,
We have audited the financial statements of the Westlake Academy (the "Academy'), for the year
ended August 31, 2022, and have issued our report thereon dated January 23, 2023. Professional
standards require that we advise you of the following matters relating to our audit.
Our Responsibility under Government Auditing Standards
As communicated in our engagement letter dated July 5, 2022, our responsibility, as described by
professional standards, is to plan and perform our audit to form and express an opinion about
whether the financial statements that have been prepared by management with your oversight are
presented fairly, in all material respects, in conformity with accounting principles generally accepted
in the United States of America. Our audit of the financial statements does not relieve you or
management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to
obtain reasonable, rather than absolute, assurance about whether the financial statements are free of
material misstatement. An audit of financial statements includes consideration of internal control
over financial reporting as a basis for designing 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 over financial reporting. Accordingly, as part of our audit, we considered the
internal control of Westlake Academy solely for the purpose of determining our audit procedures
and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our
professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures for the purpose of identifying other matters to
communicate to you.
We have provided our findings regarding significant control deficiencies over financial reporting and
material weaknesses, and other matters noted during our audit in a separate letter to you dated
January 23, 2023.
14950 Heathrow Forest Pkwv I Suite 530 1 Houston, TX 77032 1 Tel: 281.907.8788 1 Fax: 888.875.0587 1 www.BrooksWatsonCPA.com
1
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated
to you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, our firm, and our network firms have
complied with all relevant ethical requirements regarding independence.
In relation to the nonattest services provided, such as preparation of the financial statements and
supporting schedules, the Academy has assigned an individual with adequate skills, knowledge, and
experience to oversee this service.
Qualitative Aspects of the Entity's Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the
significant accounting policies adopted by Westlake Academy is included in Note I to the financial
statements. The Academy implementaiton of GASB 87, the accounting of leases, was effective in the
current year. There have been no other initial selection of accounting policies and no changes in
significant accounting policies or their application during the year ended August 31, 2022. No matters
have come to our attention that would require us, under professional standards, to inform you about
(1) the methods used to account for significant unusual transactions and (2) the effect of significant
accounting policies in controversial or emerging areas for which there is a lack of authoritative
guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and
are based on management's current judgments. Those judgments are normally based on knowledge
and experience about past and current events and assumptions about future events. Certain
accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ markedly from
management's current judgments.
The most sensitive accounting estimates affecting the financial statements are the estimates inherent
within the projection of the future pension obligation used to calculate the net pension liability.
Management's estimates inherent within the projection of future pension obligation are based on
experience studies and observations by the actuaries hired by TRS. We evaluated the key factors and
assumptions used to develop these estimates and determined they appeared reasonable in relation to
the basic financial statements taken as a whole and in relation to the applicable opinion units.
2
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive
because of their significance to financial statement users. The most sensitive disclosures affecting
Westlake Academy's financial statements relate to capital assets and long-term debt.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance
of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and
likely misstatements identified during the audit, other than those that we believe are trivial, and
communicate them to the appropriate level of management. Further, professional standards require us
to also communicate the effect of uncorrected misstatements related to prior periods on the relevant
classes of transactions, account balances or disclosures, and the financial statements as a whole and
each applicable opinion unit. There were no uncorrected misstatements.
In addition, professional standards require us to communicate to you all material, corrected
misstatements that were brought to the attention of management as a result of our audit procedures.
The following material misstatements that we identified as a result of our audit procedures were
brought to the attention of, and corrected by, management: see Exhibit 1.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or
auditing matter, which could be significant to Westlake Academy's financial statements or the
auditor's report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the
attached letter dated January 23, 2023.
Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters. Management informed us that, and to our knowledge, there were no consultations
with other accountants regarding auditing and accounting matters.
3
Modification of the Auditor's Report
Our audit opinion includes an emphasis -of -a -matter paragraph. As discussed in Note 5.H to the
financial statements, there was a restatement of beginning net position within governmental type
activities to properly reflect the implementation of GASB-87 and changes to right to use assets in the
prior year.
Other Significant Findings or Issues
In the normal course of our professional association with the Westlake Academy, we generally discuss
a variety of matters, including the application of accounting principles and auditing standards,
operating and regulatory conditions affecting the entity, and operational plans and strategies that may
affect the risks of material misstatement. None of the matters discussed resulted in a condition to our
retention as the Westlake Academy's auditors.
Other Information in Documents Containing Audited Financial Statements (if applicable)
Pursuant to professional standards, our responsibility as auditors for other information in documents
containing the Westlake Academy's audited financial statements does not extend beyond the financial
information identified in the audit report, and we are not required to perform any procedures to
corroborate such other information.
Our responsibility also includes communicating to you any information which we believe is a material
misstatement of fact. Nothing came to our attention that caused us to believe that such information, or
its manner of presentation, is materially inconsistent with the information, or manner of its
presentation, appearing in the financial statements.
This report is intended solely for the information and use of the governing body and management of
the Westlake Academy and is not intended to be and should not be used by anyone other than these
specified parties.
Very truly yours,
BrooksWatson & Co., PLLC
4
Exhibit 1
Audit Tournal Entries
The following entries were proposed from the result of audit procedures and accepted by management.
Reclassifying Journal Entries JE # 9000
To defer revenue for receivables. (Recorded by Academy as JE 250123)
283005929 ESSER SUPPLEMENTAL 70,192.97
283002310 DEFERRED REVENUE 70,192.97
Total 70,192.97 70,192.97
Reclassification Entries
The following entries are reclassifying entries recorded for reporting purposes and are not required entries to be
recorded by the Academy.
Reclassifying Journal Entries JE # 1000
To reclass lease payments for reporting.
196716523 CAPITAL LEASE INTEREST
196716512 1-TO-1 IPAD INITIATIVE PRINCIP
Total
Reclassifying Journal Entries JE # 1001
To reclass fund balance difference for reporting.
199003600 UNRESTRICTED NET ASSETS
199416499 MISC OPERATING COSTS
Total
Reclassifying Journal Entries JE # 1002
To reflect new lease for computer equipment for reporting purposes.
196116659 cpa Right to Use equipment
196007913 cpa Lease proceeds
Total
23, 221.47
23, 221.47
23,221.47 23,221.47
52.00
52.00
52.00 52.00
581, 716.00
581,716.00
581,716.00 581,716.00
5
Client Prepared Entries
The following entries were prepared by the Academy and provided to the auditor's after the trial balance was
provided.
Client Prepared Journal Entries JE # 9001
To reverse portion of receivables and defer remaining amount uncollected after 60 days from year end. (JE 250124)
199116399
GENERAL SUPPLIES
410002171
DUE TO GENERAL FUND
410005829
IMA ALLOTMENT SY21/22_SY22/23
199001262
DUE FROM SPECIAL REVENUE FUND
410001241
DUE FROM STATE
410001241
DUE FROM STATE
410002310
DEFERRED REVENUE
Total
Client Prepared Journal Entries JE # 9002
To reclass expense from function 23 to 11.
199116499 SPED MISC OPERATING
199236499 MISC OPERATING COSTS
Total
5,533.37
5,533.37
35, 812.39
5,533.37
5,533.37
2,621.34
33,191.05
46,879.13 46,879.13
595.00
.7.70.uu uvo.uv
BROOKSWAT SO & (110.
C ERTIEIF.D 1'I_IE31 IC ACC'O11NTANIl
January 23, 2023
To the Board of Trustees and Management
of Westlake Academy
In planning and performing our audit of the financial statements of the Westlake Academy (the "Academy"),
as of and for the year ended August 31, 2022, in accordance with auditing standards generally accepted in the
United States of America, we considered the Academy's internal control over financial reporting (internal
control) as a basis for designing our auditing procedures for the purpose of expressing our opinion 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 over financial reporting.
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 over financial reporting, 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
reasonable possibility exists when the likelihood of an event occurring is either reasonably possible or
probable as defined as follows:
• Reasonably possible. The chance of the future event or events occurring is more than remote but less than
likely.
• Probable. The future event or events are likely to occur.
Our consideration of internal control was for the limited purpose described in the first paragraph and was not
designed to identify all deficiencies in internal control that might be material weaknesses. Given these
limitations, during our audit we did not identify any deficiencies in internal control over financial reporting
that we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
This communication is intended solely for the information and use of the Board of Trustees and management,
and others within the Academy, and is not intended to be and should not be used by anyone other than these
specified parties.
Very truly yours,
BrooksWatson & Co., PLLC
50 Heathrow Forest Pkwy I Suite 530 1 Houston, TX 77032 1 Tel: 281,907.8788 1 Fax: 888.875,0587 1 www.BrooksWatsonCPA.com
1