HomeMy WebLinkAboutRES 20-15 Approving WA FY 19 20 AuditWESTLAKE ACADEMY
RESOLUTION NO.20-15
A RESOLUTION OF THE WESTLAKE ACADEMY BOARD OF TRUSTEES
APPROVING THE FISCAL YEAR 2019-2020 ANNUAL AUDIT REPORT FROM
WEAVER AND TIDWELL, L.L.P.
WHEREAS, Section 7.3.6 of the Data Collection & Reporting section of the Financial
Accountability System Resource Guide Update 11.0 requires that the annual financial and
compliance report be audited by an independent auditor, and
WHEREAS, Section 7.3.6 of the Data Collection & Reporting section of the Financial
Accountability System Resource Guide Update 11.0 requires the audit report be submitted to the
Division of School Financial Audits of TEA no later than 150 days after the close of the fiscal
year, and
WHEREAS, the audit report must be approved by the Board of Trustees.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF
WESTLAKE ACADEMY:
SECTION 1: The above findings are hereby found to be true and correct and are
incorporated herein in its entirety.
SECTION 2: That the Board of Trustees of Westlake Academy hereby approves the
fiscal year 2019-2020 annual audit report from Weaver and Tidwell, L.L.P. attached as Exhibit
A ",
SECTION 3: If any portion of this resolution shall, for any reason, be declared invalid
by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions
hereof and the Board hereby determines that it would have adopted this Resolution without the
invalid provision.
WA Resolution 20-15
Page 1 of 2
SECTION 4: That this resolution shall become effective from and after its date of
passage.
PASSED AND APPROVED ON THIS 7TH DAY OF DECEMBER 2020.
ATTEST:
1'zwle
TodWood, To n Secretary APPROVED
AS TO FORM: iu
k' it Janet
1. Bubertor L. Stanton Lowry, School Attorney
Laura Wheat,
President zg 44e)
gz Amanda DeGan,
Superintendent WA Resolution
20-15 Page 2of2
WESTLAKE ACADEMY
Name of School
Certificate of Board
TARRANT
County
220-810
Co. -District Number
We, the undersigned, certify that the attached annual financial reports of the above -named school were
reviewed and (check one) ,£approved 0 disapproved for the year ended August 31, 2020 at a
meeting of the Board of Trustees of such school on the jf4 day of Qeeembee., 2o2o
a 44 e-
Bo rd Secretary 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)
This Page Intentionally Left Blank
Westlake Academy
(A Component Unit of the Town of Westlake)
Annual Financial Report
For the Year Ended August 31, 2020
Table of Contents
i
Page Exhibit
Introductory Section
Certificate of Board ................................................................................................................................ ii
Financial Section
.............................................................................................................. 3
............................................................................................. 5
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position .................................................................................................................. 14 A-1
Statement of Activities ....................................................................................................................... 15 B-1
Fund Financial Statements
Balance Sheet ..................................................................................................................................... 16 C-1
Statement of Revenues, Expenditures, and
Changes in Fund Balance ............................................................................................................... 17 C-2
Fiduciary Funds
Statement of Fiduciary Net Position ................................................................................................ 18 D-1
Notes to the Financial Statements ..................................................................................................... 19
Required Supplementary Information
Budgetary Comparison Schedule General Fund ........................................................................ 42 E-1
Notes to the Budgetary Comparison Schedule .............................................................................. 43
Net Pension Liability Teacher Retirement System ...................................................................... 44 E-2
Schedule of Pension Contributions Teacher Retirement System .............................................. 45 E-3
Net OPEB Liability Teacher Retirement System TRS Care Plan ................................................. 46 E-4
Schedule of OPEB Contributions Teacher Retirement System TRS Care Plan ........................ 47 E-5
Combining Statements
Nonmajor Governmental Funds
Combining Balance Sheet ................................................................................................................ 50 F-1
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balance ............................................................................................................... 51 F-2
Internal Control Report
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards ................................................................. 55
ii
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) approved disapproved for the year ended August 31, 2020 at a
meeting of the Board of Trustees of such school on the ___ day of _________________________.
Assistant to Board Secretary 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)
1
Financial Section
2
This Page Intentionally Left Blank
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 | Dallas, Texas 75201
Main: 972.490.1970
CPAs AND ADVISORS | WEAVER.COM
Independent Auditor's Report
To the Board of Trustees
Westlake Academy
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the discretely
presented component unit, each major fund, and the aggregate remaining fund information of Westlake
Academy (the Academy), a component unit of the Town of Westlake, as of and for the year ended
August 31, 2020, and the related notes to the financial statements, which collectively comprise the
Academy's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards,issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the discretely presented component unit,
each major fund, and the aggregate remaining fund information of Westlake Academy, as of
August 31, 2020, 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.
The Board of Trustees
Westlake Academy
4
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
proportionate share of the net pension liability and the net OPEB liability, and schedules of Academy
pension and OPEB contributions on pages 5 through 12, and 42 through 47, be presented to supplement
the basic financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Academy's basic financial statements. The nonmajor governmental funds combining
statements are presented for the purposes of additional analysis and are not a required part of the basic
financial statements. The nonmajor governmental funds combining statements are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the nonmajor governmental funds combining statements are fairly stated in all material respects in
relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards , we have also issued our report dated
December 2, 2020, on our consideration of the Academy's internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements
and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the Academy's internal
control over financial reporting and compliance.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
December 2, 2020
Westlake Academy
(A Component Unit of the Town of Westlake)
August 31, 2020
5
This section of Westlake Academy's (the Academy) annual financial report presents our discussion and
analysis of the Academy's financial performance during the fiscal year ended August 31, 2020. Please
read it in conjunction with the Academy's financial statements, which follow this section.
Financial Highlights
On the government-wide financial statements, the liabilities of the Academy exceeded assets by
$3,109,451 (Net Position). This is a decrease of $203,400 for the year ended August 31, 2020.
The Academy reported $11,377,681 in expenses related to governmental activities, of which
$3,616,554 of these expenses were offset by program-specific charges for services or grants and
contributions. This is a total expense increase of $1,071,448 from the prior year.
The General Fund reported a fund balance this year of $1,751,177, an increase of $377,340 from
the prior year.
Overview of the Financial Statements
This annual report consists of
financial statements, and required supplementary information. The basic financial statements present
different views of Academy:
The first two statements are government-wide financial statements that provide both
long-term and short-term information about the Academy's overall financial status.
The remaining statements are fund financial statements that focus on individual parts of the
government, reporting the detail than the government-wide
statements.
The governmental funds statements tell how general government services were financed in the
short term as well as what remains for future spending.
Fiduciary fund statements provide information about the financial relationships in which the
District acts solely as a trustee or agent for the benefit of others, to whom the resources in question
belong.
The financial statements also include notes (starting on page 19) that explain some of the information in
the financial statements and provide more detailed data. The statements are followed by a section of
required supplementary information that further explains and supports the information in the financial
statements. The combining statements for nonmajor funds contain even more information about the
ual nonmajor funds.
Figure A-1 summarizes the major features of the Academy's financial statements, including the
portion of the Academy government they cover and the types of information they contain. The
remainder of this overview section of managem ent's discussion and analysis explains the structure
and contents of each of the statements.
Westlake Academy
(A Component Unit of the Town of Westlake)
August 31, 2020
6
Government-Wide Statements
The government-wide statements beginning on page 14, 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
All of the current year's revenues and expenses are accounted for in the statement of activities regardless
of when cash is received or paid.
The Academy's revenue is divided into those provided by outside parties who share the costs of some
programs, such as payments received from extracurricular activities and grants provided by the U.S.
Department of Education to assist children with disabilities (program revenue), and general revenue
provided by donations from the public or by Texas Education Agency (TEA) in equalization funding
processes (general revenue). All the Academy's assets are reported whether they serve the current year
or future years. Liabilities are considered regardless of whether they must be paid in the current or future
years.
Scope
Entire
government(except
fiduciary funds) and
the Academy's
component units
Activities of the
Academy that are not
proprietary or fiduciary
Instances in which the
Academy is the trustee
or agent for someone
else's resources
Required
Financial
St at ement s
Statement of Net
Position, Statement of
Activities
Balance Sheet,
Statement of Revenues,
Expenditures and
Changes in Fund
Balances
Statement of Fiduciary
Net Position, Statement
of Changes in Fiduciary
Net Position
Account ing basis
and
measurement
focus
Accrual accounting
and economic
resources focus
Modified accrual
accounting and current
financial resources focus
Accrual accounting and
economic resources
focus
Types of
account abilit y
informat ion
All assets and liabilities
both financial and
capital, short-term
and long-term
Only assets expected to
be used up and liabilities
that become due during
the year or soon
thereafter. No capital
assets included.
All assets and liabilities
both short-term and long-
term; the Academy's
funds do not currently
include capital assets,
although they can.
Types of
Inflow/out flow
Informat ion
All revenues and
expenses during year,
regardless of when
cash is received or
paid
Revenue for which cash
is received during or
soon after the end of
the year, expenditures
when goods or services
have been received
and payment is due
during the year or soon
thereafter.
All revenues and
expenses during year,
regardless of when cash
is received or paid.
Type of Statement Government-wide Governmental Funds Fiduciary Funds
Figure A-1
Major features of the Academy's Government-Wide and Fund Financial Statements
Westlake Academy
(A Component Unit of the Town of Westlake)
August 31, 2020
7
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-r position.
Over time, increases or decreases in the Academy's net position are an indicator of whether its
financial health is improving or deteriorating, respective l y.
To assess the overall health of the Academy, one should consider additional non-financial factors
The government-wide financial statements of the Academy include the Governmental activities. Most of
the Academy's basic services are included here, such as instruction, curriculum and staff development,
extracurricular activities, maintenance, health services and general administration. State funds, donations
and grants finance most of these activities.
Component Unit
The government-wide financial statements also present the activity of Westlake Academy Foundation, a
discretely presented component unit. The Foundation was organized exclusively for charitable and
educational purposes and provides funds to help support the Academy. During 2020, the Foundation
contributed $1,212,197 to the Academy to enhance educational opportunities. These contributions are
recorded as operating grants and contributions in the Statement of Activities.
Fund Financial Statements
The fund financial statements begin on page 16 and provide more detailed information about the
Academy's most significant funds, not the Academy as a whole. Funds are accounting devices that the
Academy uses to keep track of specific sources of funding and spending for particular purposes.
Some funds are required by State law and by bond covenants.
The Board of Trustees establishes other funds to control and manage money for particular
purposes or to show that it is properly using certain taxes and grants.
Below are the three types of funds. The Academy had only "Governmental Funds" and "Fiduciary Funds"
for the year ended August 31, 2020.
Governmental funds Most of the Academy's basic services are included in governmental funds,
which focus on (1) how cash and other financial assets that can readily be converted to cash
flow in and out and (2) the balances left at year-end that are available for spending.
Consequently, the governmental fund statements provide a detailed short-term view that helps
you determine whether there are more or fewer financial resources that can be spent in the near
future to finance the Academy's programs. Because this information does not encompass the
additional long-term focus of the government-wide statements, we provide additional
information at the bottom of the governmental funds statement that explain the relationship (or
differences) between them.
Fiduciary fund the Academy maintains a fiduciary fund to account for resources held for student
activities in a custodial capacity. These fiduciary activities are reported in a separate statement
of fiduciary net position and a statement of changes in fiduciary net position on page 18. These
-wide financial statements because they
cannot use these assets to finance their operations.
Westlake Academy
(A Component Unit of the Town of Westlake)
August 31, 2020
8
Proprietary funds Services for which the Academy would charge customers a fee are generally reported
in proprietary funds. Proprietary funds, like the government-wide statements, provide both long and short-
term financial information. The Academy presently has no proprietary funds.
Government-Wide Financial Analysis
The following analysis focuses on the net position (Table A-1), sources of revenue (Figure A-2), and
changes in net position (Table A-2) of the Academy's governmental activities. The Academy reports a
deficit net position of ($3,109,451) at August 31, 2020.
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. The Academy's governmental activities during the fiscal year caused the deficit in net position
to increase from $2,906,051 in 2018 to $3,109,451 in 2019.
7 percent ($203,400). The decrease was primarily
due to the net effect of the following:
(1) An approximately $1.0 million increase in expenses primarily due to a $797,725 increase in
instruction expenses (which included $585,623 of capital lease-related expenses as well as the cost
of additional staffing and budgeted pay raises).
(2) Additional state funding for salaries and retirement were received due to the mandates of the
State aid and formula grants increased
by $683,314.
(3) A $223,618 decrease in charges for services due to a reduction seen across the board as a result
of the COVID-19 pandemic. The major decrease of $138,105 was seen in extracurricular activities
which includes the after-school programs.
Fund Financial Analysis
Fund balance in the General Fund increased by $377,340, primarily due to the net effect of the $683,314
increase in state aid noted above and a $361,582 increase in expenditures (net of the $585,623 of capital
lease-related expenditures).
Westlake Academy
(A Component Unit of the Town of Westlake)
August 31, 2020
9
Table A-1
Westlake Ac
2020 2019 2020 2019
Current assets 1,864,770$ 2,496,339$ 2,677,971$ 2,380,643$
Total assets 1,864,770 2,496,339 2,677,971 2,380,643
Deferred outflows of resources 1,352,708 1,185,191 - -
Current liabilities 101,706 1,103,477 8,410 -
Non-current liabilities 4,731,645 4,440,113 - -
Total liabilities 4,833,351 5,543,590 8,410 -
Deferred inflows of resources 1,493,578 1,043,991 - -
Net position:
Restricted 163 2,760 298,302 284,163
Unrestricted (3,109,614) (2,908,811) 2,371,259 2,096,480
Total net position (3,109,451)$ (2,906,051)$ 2,669,561$ 2,380,643$
Governmental Activities Component Unit
Figure A-2
Westlake Academy
Sources of Revenue for Fiscal Year 2020
0.8%
24.3%
0.2%
67.5%
7.3%Charges for Service
Operating Grants &
Contributions
Investment Earnings
State Funding
Capital Grants &
Contributions
Westlake Academy
(A Component Unit of the Town of Westlake)
August 31, 2020
10
Table A-2
Westlake Academy
(A Component Unit of the Town of Westlake)
August 31, 2020
11
Table A-3 (below) presents the cost of each of the Academy's largest functions as well as each function's
net cost (total cost less fees generated by the activities and intergovernmental aid). The net cost reflects
what was funded by state revenues as well as local tax dollars.
The cost of governmental activities this year was $11,377,681
Some of the cost was paid by those who directly benefited from the programs, $90,123 and some
of the cost was paid through grants and contributions $3,526,431
Table A-3
Total % Total %
Change Change
2020 2019 2019-20 2020 2019 2019-20
Instruction 6,775,228$ 5,977,502$ 13% 4,617,129$ 4,095,998$ 13%
School leadership 1,097,465 1,040,519 5% 798,238 778,292 3%
Instructional leadership 166,215 169,080 -2% 123,834 126,737 -2%
Guidance, counseling
and evaluation services 664,300 517,379 28% 502,042 391,315 28%
Extracurricular activities 441,532 442,632 0% 185,666 99,040 87%
General administration 274,546 227,699 21% 207,426 170,894 21%
Facilities maintenance
and operations 1,109,880 1,118,657 -1% 768,410 790,740 -3%
Data processing services 253,577 240,331 6% 218,087 170,589 28%
Total Cost of Services Net Cost of Services
General Fund Budgetary Highlights
Year-end fund balance is $1,751,177 which increased $377,340 over the prior year. The increase is
attributable to the addition of 20 students (869 in 2019 to 889 in 2020), and a substantial decrease
in operating expenditures due to the effects of COVID-
2020 through August 24, 2020.
Local revenue budget decreased by 5% ($83,480) due to the reduction of projected equipment
sale proceeds from the prior iPad lease. The proceeds were received at the end of FY 2018-2019.
State program revenue budget decreased slightly, $18,515 or .22%, due to the fluctuations in
Career & Technology Education participation and changes to the average daily attendance
The expenditure budget was increased by $443,540 (5%) primarily due to the addition of a new
capital lease to maintain the one-to-one iPad initiative, which was offset by capital lease
proceeds.
General Fund revenues are budgeted to increase less than ¼ of 1% over the actual revenues
realized in FY 2019-2020. This is due to the COVID-19 public health crisis, which has presented
unique challenges to our academic budget and for the upcoming school year. In addition, a
slight decrease in enrollment by four (4) students for 2020-2021 is anticipated.
Appropriations within the General Fund budget are estimated to reach $9,393,877, which is a
cumulative decrease of 2% ($196,335) over actual expenditures in FY 2019-2020.
Westlake Academy
(A Component Unit of the Town of Westlake)
August 31, 2020
12
Payroll & related expenditures: For FY 2020-2021, expected payroll expenditures will increase
$261,475, approximately 4%, over the actual expenditures in FY 2019-2020. This includes a step
increase for Teachers, Librarians, Counselors, Diagnosticians, and Nurses, averaging 2%, and a 1%
from the restructuring of the secondary program principal and coordinator positions.
Professional & contracted services: This category includes expenditures related to services
rendered to the Academy by firms, individuals, and other organizations. There will be an estimated
decrease of 7% ($68,171) in FY 2020-2021 over the actual expenditures in FY 2019-2020. Following
the Academy closing beginning March 16, 2020 due to COVID-19, actual expenditures for
janitorial services increased due to additional disinfecting and deep cleaning protocols required
throughout the campus. HVAC and landscaping expenditures also increased in FY 2019-2020 with
maintenance of older AC units and changes in contractors, respectively.
Materials & supplies: This category includes expenditures associated with consumables used in the
classroom and in the general operations of the campus. For 2020-2021, there will be an estimated
decrease of 57% ($474,879) over actual FY 2019-2020 expenditures due to the new three-year
capital lease for the one-to-one iPad initiative initiated in FY 2019-2020.
Miscellaneous operating costs: These costs are associated with insurance, professional
development travel, membership fees and dues, and other miscellaneous costs. There will be an
estimated increase of $47,143, approximately 11% over FY 2019-2020 actuals. With the school
closure due to COVID-19, all faculty and administrator travel for professional development was
cancelled through the end of 2020, which decreased actual expenditures as refunds were
received for prepaid training and conference registrations and accommodations.
Debt Service: These costs are associated with the three-year lease for iPads supporting the one-
to-one device initiative. There is no anticipated change in expenditures during FY 2020-2021,
which is the second year of the three-year lease. iPad maintenance and repair costs are self-
funded through the $55 annual technology use fee paid by each student at the beginning of the
school year.
If the FY 2020-
balance is expected to increase by $38,101 by August 31, 2021.
Contacting the Academy's Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors
for the money it receives. If you have questions about this report or need additional financial information,
contact the Director of Administrative Services, Ginger Awtry, at (817) 490-5712 or the Academic Business
Manager, Marlene Rutledge, at (817) 490-5737, or by writing to 1500 Solana Blvd, Building 7, Suite 7200,
Westlake, Texas 76262.
13
Basic Financial Statements
Westlake Academy Exhibit A-1
(A Component Unit of the Town of Westlake)
Statement of Net Position
August 31, 2020
The Notes to the Financial Statements are an integral part of this statement.
14
Data 1 4
Control Governmental Component
Codes Activities Unit
ASSETS
1110 Cash and cash equivalents 1,351,234$ 744,789$
1120 Current investments 105 1,927,540
1240 Due from other governments 430,161 142
1290 Other receivables 7,099 5,500
1410 Prepaid expenses 76,171 -
1000 Total assets 1,864,770 2,677,971
DEFERRED OUTFLOWS OF RESOURCES
1705 Deferred outflows of resources - pensions 955,246 -
1705 Deferred outflows of resources - OPEB 397,462 -
1700 Total deferred outflows of resource 1,352,708 -
LIABILITIES
2110 Accounts payable 37,385 8,410
2160 Accrued wages payable 20,233 -
2180 Due to other governments 41,821 -
2200 Other accrued expenses 2,267 -
Noncurrent liabilities:
2501 Due within one year 195,108 -
2502 Due in more than one year 202,904 -
2540 Net pension liability 1,502,914 -
2545 Net OPEB liability 2,830,719
2000 Total liabilities 4,833,351 8,410
DEFERRED INFLOWS OF RESOURCES
2605 Deferred inflows of resources - pensions 268,967 -
2605 Deferred inflows of resources - OPEB 1,224,611 -
2600 Total deferred inflows of resources 1,493,578 -
NET POSITION
3890 Restricted for donor stipulations 163 298,302
3900 Unrestricted (3,109,614) 2,371,259
3000 Total net position (3,109,451)$ 2,669,561$
Westlake Academy Exhibit B-1
(A Component Unit of the Town of Westlake)
Statement of Activities
For the Year Ended August 31, 2020
The Notes to the Financial Statements are an integral part of this statement.
15
1 3 4 5 6 9
Primary
Data Operating Capital Government
Control Charges for Grants and Grants and Governmental Component
Codes Expenses Services Contributions Contributions Activities Unit
PRIMARY GOVERNMENT:
Governmental activities:
11 Instruction 6,775,228$ 18,216$ 1,638,872$ 501,011$ (4,617,129)$ -$
12 Instructional resources and media services 129,085 288 23,974 32,980 (71,843) -
13 Curriculum and staff development 59,763 184 13,163 - (46,416) -
21 Instructional leadership 166,215 501 41,880 - (123,834) -
23 School leadership 1,097,465 3,447 279,556 16,224 (798,238) -
31 Guidance, counseling, and evaluation services 664,300 1,851 156,347 4,060 (502,042) -
33 Health services 133,519 252 20,870 12,654 (99,743) -
35 Food service 52,113 7,000 - 52,113 7,000 -
36 Extracurricular activities 441,532 53,225 158,944 43,697 (185,666) -
41 General administration 274,546 842 54,414 11,864 (207,426) -
51 Facilities maintenance and operations 1,109,880 3,122 220,853 117,495 (768,410) -
52 Security and monitoring services 45,150 444 27,969 - (16,737)
53 Data processing services 253,577 65 17,565 17,860 (218,087) -
61 Community services 154,997 686 59,548 2,518 (92,245) -
71 Debt service - interest 20,311 - - - (20,311) -
[TP] Total primary government:11,377,681$ 90,123$ 2,713,955$ 812,476$ (7,761,127) -
COMPONENT UNIT
IC Westlake Academy Foundation 1,522,521$ -$ 1,657,246$ -$ - 134,725
Data
Control
Codes
General revenues:
SF State aid-formula grants 7,540,434 -
IE Investment earnings 17,293 154,193
TR Total general revenues 7,557,727 154,193
CN Change in net position (203,400) 288,918
NB Net position, beginning (2,906,051) 2,380,643
NE Net position, ending (3,109,451)$ 2,669,561$
Net (Expense) Revenue and
Changes in Net PositionProgram Revenues
Westlake Academy Exhibit C-1
(A Component Unit of the Town of Westlake)
Balance Sheet
Governmental Funds
August 31, 2020
The Notes to the Financial Statements are an integral part of this statement.
16
10 410 429 491 98
Data State Safety & Nonmajor Total
Control Textbook Security CARES Governmental Governmental
Codes General Fund Grant Fund Act Funds Funds
1110 Cash and cash equivalents 1,340,559$ -$ -$ -$ 10,675$ 1,351,234$
1120 Current investments 105 - - - - 105
1240 Due from other governments 363,480 17,441 25,000 24,240 - 430,161
1260 Due from other funds 41,858 - - - - 41,858
1290 Other receivables 6,560 - - - 539 7,099
1410 Prepaid expenditures 76,171 - - - - 76,171
1000 Total assets 1,828,733$ 17,441$ 25,000$ 24,240$ 11,214$ 1,906,628$
LIABILITIES:
2110 Accounts payable 36,458$ -$ -$ 199 728$ 37,385$
2160 Accrued wages payable 20,233 - - - - 20,233
2170 Due to other funds - 17,441 - 24,041 376 41,858
2180 Due to other governments 16,821 - 25,000 - - 41,821
2200 Accrued expenditures 2,267 - - - - 2,267
2000 Total liabilities 75,779 17,441 25,000 24,240 1,104 143,564
DEFERRED INFLOWS OF RESOURCES:
2601 Unavailable contributions 1,777 - - - - 1,777
2600 Total deferred inflows of resources 1,777 - - - - 1,777
FUND BALANCES:
3430 Nonspendable - prepaid items 76,171 - - - - 76,171
3490 Restricted for donor stipulations - - - - 163 163
3545 Committed for campus activities - - - - 9,947 9,947
3600 Unassigned 1,675,006 - - - - 1,675,006
3000 Total fund balances 1,751,177 - - - 10,110 1,761,287
4000 Total liabilities and fund balances 1,828,733$ 17,441$ 25,000$ 24,240$ 11,214$ 1,906,628$
Total fund balances - governmental funds 1,761,287$
Amounts reported for governmental activities in the statement of net position are different because:
Amounts reported as deferred inflows of resources in the governmental funds financial statements are recognized
as revenue in the government-wide financial statements under the accrual basis of accounting. 1,777
Included in the items related to noncurrent liabilities are the Academy's proportionate share of the
TRS Care net OPEB liability ($2,830,719), a deferred resource inflow ($1,224,611) and a deferred
resource outflow of $397,462. The net effect is a decrease in net position. (3,657,868)
Included in the items related to noncurrent liabilities are the Academy's proportionate share
of the TRS net pension liability ($1,502,914), a deferred resource inflow ($268,967) and a deferred
resource outflow of $955,246. The net effect is a decrease in net position. (816,635)
Net position of governmental activities (3,109,451)$
LIABILITIES AND FUND BALANCES
ASSETS
Westlake Academy Exhibit C-2
(A Component Unit of the Town of Westlake)
Statement of Revenues, Expenditures, and
Changes in Fund Balance
Governmental Funds
For the Year Ended August 31, 2020
The Notes to the Financial Statements are an integral part of this statement.
17
10 410 429 491 98
Data State Safety & Nonmajor Total
Control Textbook Security CARES Governmental Governmental
Codes General Fund Grant Fund Act Funds Funds
REVENUES
5700 Local and intermediate sources 1,462,051$ -$ -$ -$ 230,559$ 1,692,610$
5800 State program revenues 7,957,979 26,613 25,000 - 1,469 8,011,061
5900 Federal program revenues - - - 24,240 113,670 137,910
5020 Total revenues 9,420,030 26,613 25,000 24,240 345,698 9,841,581
EXPENDITURES
0011 Instruction 5,566,302 26,613 - 2,593 205,076 5,800,584
0012 Instructional resources and media services 88,513 - - - - 88,513
0013 Curriculum and staff development 57,790 - - - 1,600 59,390
0021 Instructional leadership 154,252 - - - - 154,252
0023 School leadership 1,060,501 - - 138 - 1,060,639
0031 Guidance, counseling, and evaluation services 569,417 - - 118 4,935 574,470
0033 Health serv ices 77,264 - - 105 - 77,369
0036 Extracurricular activities 253,652 - - 150 136,855 390,657
0041 General administration 244,889 - - - 975 245,864
0051 Facilities maintenance and operations 976,930 - - 12,907 - 989,837
0052 Security and monitoring serv ices 20,150 - 25,000 - 45,150
0053 Data processing services 213,941 - - 8,229 - 222,170
0061 Community services 136,790 - - - - 136,790
0071 Debt serv ice - principal on long-term debt 187,611 - - - 187,611
0072 Debt serv ice - interest on long-term debt 20,311 - - - - 20,311
6030 Total expenditures 9,628,313 26,613 25,000 24,240 349,441 10,053,607
1100 EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (208,283) - - - (3,743) (212,026)
OTHER FINANCING SOURCES
7913 Proceeds from capital leases 585,623 - - - - 585,623
Total other financing sources 585,623 - - - - 585,623
1200 NET CHANGE IN FUND BALANCES 377,340 - - - (3,743) 373,597
0100 FUND BALANCES, BEGINNING 1,373,837 - - - 13,853 1,387,690
3000 FUND BALANCES, ENDING 1,751,177$ -$ -$ -$ 10,110$ 1,761,287$
Net change in fund balances 373,597$
Amounts reported for governmental activ ities in the Statement of Activities are different because:
Receipts that are considered deferred inflows of resources in the gov ernmental funds financial statements
are recognized as rev enue in the government-w ide financial statements under the accrual basis of accounting.
This amount represents the change in deferred inflows between the prior year and current year.(3,395)
Capital leases that are considered other financing sources in the governmental fund financial statements
are recognized as an increase in short-term and long-term laibilities in the government-w ide financial statements.(585,623)
Current year principal payments on capital leases consume current resources, howev er,
these payments reduce expenses and long-term liabilities in the government-w ide financial statements. 187,611
Implementation of GASB 75 required certain expenditures be de-expended and recorded as
deferred resource inflows. Contributions made after the measurement date caused the change
in net position to increase by $46,278. Contributions before the measurement date also caused
a decrease in the change in net position of $46,703. The net share of the Academy's amount
of deferred inflows and outflow s of resources decreased the net position by $41,176. This
amount is the net effect.(41,601)
Implementation of GASB 68 required certain expenditures be de-expended and recorded as
deferred resource inflows. Contributions made after the measurement date caused the change
in net position to increase by $230,148. Contributions before the measurement date also caused
a decrease in the change in net position of $100,311. The net share of the Academy's amount
of deferred inflows and outflow s of resources decreased the net position by $263,826. This
amount is the net effect.(133,989)
Change in net position of governmental activities (203,400)$
Westlake Academy Exhibit D-1
(A Component Unit of the Town of Westlake)
Statement of Fiduciary Net Position
Fiduciary Funds
August 31, 2020
The Notes to the Financial Statements are an integral part of this statement.
18
Agency
Fund
ASSETS
Cash and cash equivalents 94,044$
Prepaids 1,269
Total assets 95,313$
LIABILITIES
Accounts payable 18,392$
Due to student groups 76,921
Total liabilities 95,313$
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
19
Note 1. Summary of Significant Accounting Policies
Reporting Entity
Westlake Academy (the Academy), a blended component unit of the Town of Westlake (the Town), is a
Texas nonprofit corporation under Chapter 12, Subchapter D of the Education Code to provide
education. The Board of Trustees (the Board) consists of six trustees and is appointed by the Town's
governing body. Currently, all members of the Board are members of the Town's governing body. The
Academy prepares its basic financial statements in conformity with generally accepted accounting
principles promulgated by the Governmental Accounting Standards Board (the GASB) and other
authoritative sources identified in Statement on Auditing Standards No. 69 of the American Institute of
Certified Public Accountants; and it complies with the requirements of the appropriate version of Texas
Education Agency's Financial Accountability System Resource Guide (the Resource Guide) and the
requirements of contracts and grants of agencies from which it receives funds.
The Board is appointed by the governing Council of the Town and it has the authority to make decisions,
appoint administrators and managers, and significantly influence operations. It also has the primary
accountability for fiscal matters. Therefore, the Academy is a financial reporting entity as defined by the
GASB in its Statement No.14, "The Financial Reporting Entity", as modified by GASB Statements No. 39 and
61.
The Academy's basic financial statements include a separate entity that is controlled by or dependent
on the Academy. The determination to include separate entities is based on the criteria of GASB
Statement No. 14, 'The Financial Reporting Entity" as amended by GASB Statement No. 39, "Determining
Whether Certain Organizations Are Component Units" and GASB Statement No. 61, "The Financial
Reporting Entity Omnibus." GASB defines the reporting entity as the primary government and those
component units for which the primary government is financially accountable. To be financially
accountable, a voting majority of the component unit's ruling body must be appointed by the primary
government, and either (a) the primary government must be able to impose its will, or (b) the primary
government may potentially benefit financially or be financially responsible for the component unit.
The Westlake Academy Foundation (the Foundation) is a 501(c)(3) nonprofit organization which was
established exclusively for the purpose of supporting the Academy. This includes fundraising for and
contributing raised funds to the Academy. The Foundation has been discretely presented in the
accompanying financial statements and reported in a separate column to emphasize that it is legally
separate from the Academy. See Note 12 for additional information relating to the Foundation. Separate
audited financial statements of the Foundation are available from the Academy/Town Finance Director's
office, 1500 Solana Blvd, Building 7, Suite 7200, Westlake, Texas 76262.
Government-wide and Fund Financial Statements
The Statement of Net Position and the Statement of Activities are government-wide financial statements.
They report information on all of the Academy's nonfiduciary activities with most of the interfund activities
removed. Governmental activities include programs supported primarily by state and federal grants, the
Foundation, and the Town. The Academy has no business-type activities that rely to a significant extent,
on fees and charges for support.
Neither fiduciary funds nor component units that are fiduciary in nature are included.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
20
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/ due from on the Governmental Fund
Balance Sheet and as other resources and other uses on the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balance. All interfund transactions between governmental funds are
eliminated on the government-wide statements.
The fund financial statements provide reports on the financial condition and results of operations for three
fund categories: governmental, proprietary, and fiduciary. Since the resources in the fiduciary funds
cannot be used for Academy operations, they are not included in the government-wide statements. The
Academy considers some governmental funds major and reports their financial condition and results of
operations in a separate column.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenue is recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements use the current financial resources measurement focus and the
modified accrual basis of accounting. With this measurement focus, only current assets, current liabilities,
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 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.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
21
The fiduciary funds utilize the accrual basis of accounting for purposes of asset and liability recognition.
With this basis of accounting, all assets and all liabilities associated with the operation of these funds are
included on the Statement of Fiduciary Net Position.
Fund Accounting
The Academy reports the following major governmental funds:
The General Fund is the Academy's primary operating fund. It accounts for all financial resources except
those required to be accounted for in another fund.
The State Textbook Fund accounts for the instructional materials allotment funded by the State of Texas
to purchase textbooks and other instructional materials.
The Safety & Security Grant Fund accounts for the proceeds of a grant awarded by Texas Education
Agency for the purchase of security cameras and perimeter fencing.
The CARES Act Fund accounts for Coronavirus Relief Fund assistance passed through the Texas Division of
Emergency Management and the Town of Westlake.
Additionally, the Academy reports the following fund types:
Nonmajor Governmental Funds:
These nonmajor Special Revenue Funds account for resources restricted to, or committed for, specific
purposes by the Academy or a grantor in a Special Revenue Fund. Most federal and some state financial
assistance is accounted for in a Special Revenue Fund and sometimes unused balances must be returned
to the grantor at the close of specified project period.
Fiduciary Funds:
Agency Funds account for resources held for others in a custodial capacity. Fiduciary funds are reported
in the fiduciary fund financial statements. However, because these assets are not available to support
Academy programs, these funds are not included in the government-wide statements. The Academy's
Agency Fund is a Student Activity Fund.
Other Accounting Policies
1. The State of Texas (the State) has created a state minimum personal leave program consisting of
five days per year personal leave with no limit on accumulation and transferability among districts
is provided for employees in accordance with 19 TAC §153.1021(d)(8). Each district's local board
is required to establish a personal leave plan. It is the Academy's policy to permit employees to
accumulate earned but unused state and local personal leave. There is no liability for unpaid
accumulated personal leave since the Academy does not have a policy to pay any amounts
when employees separate from service with the Academy.
2. The Data Control Codes refer to the account code structure prescribed by the Texas Education
Agency (TEA) in the Financial Accountability System Resource Guide. TEA requires the Academy
to display these codes in the financial statements filed with the Agency in order to insure accuracy
in building a statewide database for policy development and funding plan.
3. When an expenditure is incurred for purposes for which both restricted or unrestricted fund
balance is available, the Academy considers restricted funds to have been spent first. When an
expenditure is incurred for which committed, assigned, or unassigned fund balances are
available, the Academy considers amounts to have been spent first out of committed funds, then
assigned funds, and finally, unassigned funds.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
22
4. The governmental fund financial statements present fund balances based on classifications that
comprise a hierarchy that is based primarily on the extent to which the Academy is bound to
honor constraints on the specific purposes for which amounts in the respective governmental
funds can be spent. The classifications used in the governmental fund financial statements are as
follows:
Nonspendable: This classification includes amounts that cannot be spent because
they are either (a) not in spendable form or (b) are legally or contractually required to
be maintained intact.
Restricted: This classification includes amounts for which constraints have been placed
on the use of the resources either (a) externally imposed by creditors, grantors,
contributors, or laws or regulations of other governments, or (b) imposed by law
through constitutional provisions or enabling legislation.
Committed: This classification includes amounts that can be used only for specific
purposes pursuant to constraints imposed by board resolution of the School Board, the
Academy's highest level of decision making authority. These amounts cannot be used
for any other purpose unless the School Board removes or changes the specified use
by taking the same type of action that was employed when the funds were initially
committed. This classification also includes contractual obligations to the extent that
existing resources have been specifically committed for use in satisfying those
contractual requirements.
Assigned: This classification includes amounts that are constrained by the Academy's
intent to be used for a specific purpose but are neither restricted nor committed. This
intent can be expressed by the Finance Director and Superintendent.
Unassigned: This classification includes the residual fund balance for the General Fund.
The unassigned classification also includes negative residual fund balance of any other
governmental fund that cannot be eliminated by offsetting of assigned fund balance
amounts.
5. Net position represents the difference between assets and deferred outflows of resources and
liabilities and deferred inflows of resources. Net position is reported as restricted when there are
limitations imposed on its use either through the enabling legislations adopted by the Academy
or through external restrictions imposed by creditors, grantors of laws or regulations of other
governments.
6. The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
7. Sometimes the Academy will fund outlays for a particular purpose from both restricted (e.g. grant
proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net
position and unrestricted net position in the government-wide financial statements, a flow
assumption must be made about the order in which the resources are considered to be applied.
It is the Academy's policy to consider restricted net position to have been depleted before
unrestricted net position is applied.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
23
Note 2. Cash and Investments
The funds of the Academy must be deposited and invested under the terms of a contract, contents of
which are set out in the Depository Contract Law. The depository bank places approved pledged
securities for safekeeping and trust with the Academy's agent bank in an amount sufficient to protect
Academy funds on a day-to-day basis during the period of the contract. The pledge of approved
securities is waived only to the extent of the depository bank's dollar amount of Federal Deposit Insurance
Corporation (FDIC) insurance.
At August 31, 2020, the carrying amount of the Academy's deposits (cash, certificates of deposit, and
interest-bearing savings accounts included in temporary investments), including $94,044 recorded in the
Agency fund, was $1,445,278 and the bank balance was $1,663,280. The carrying amount of the
Academy cash deposits at August 31, 2020 and during the year then ended was entirely covered by FDIC
The following is disclosed regarding the combined balances on the date of highest deposit:
a. Depository: First Financial Bank
b. The market value of securities pledged to the Town (inclusive of the Academy) as of the date of
the highest combined balance on deposit was $31,953,166.
c. The highest combined balances of cash, savings, and time deposit accounts amounted to
$26,500,109 ($2,119,482 of which belonged to the Academy) on September 3, 2019.
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.
The Academy categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and
Application provides a framework for measuring fair value which establishes a three-level fair value
hierarchy that describes the inputs that are used to measure assets and liabilities.
Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that
a government can access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable
for an asset or liability, either directly or indirectly.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
24
Level 3 inputs are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.
If a price for an identical asset or liability is not observable, a government should measure fair value using
another valuation technique that maximizes the use of relevant observable inputs and minimizes the use
of unobservable inputs. If the fair value of an asset or a liability is measured using inputs from more than
one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority
level input that is significant to the entire measurement.
The Academy presently has no recurring fair value measurements.
Investment pools are measured at amortized cost and are exempt for fair value reporting.
05 which was deposited in
TexPool (a Texas Local Government Investment Pool). Local government investment pools operate in a
manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. Local government
investment pools use amortized cost rather than market value to report net assets to compute share
prices. Accordingly, the fair value of the position of these pools is the same as the value of the shares in
each pool.
TexPool is organized in conformity with the Interlocal Cooperation Act, Chapter 791 of the Texas
Government Code, and the Public Funds Investment Act. Chapter 2256 of the Texas Government Code.
The Texas Comptroller of Public Accounts is the sole officer, director and shareholder of the Texas Treasury
Safekeeping Trust Company, which is authorized to operate TexPool. In addition, the TexPool Advisory
This Board is composed equally of participants in TexPool
and other persons who do not have a business relationship with TexPool who are qualified to advise
TexPool. TexPool is subject to annual review by an independent auditor consistent with the Public Funds
Investment Act. In addition, TexPool is subject to review by the State Auditor's office and by the Internal
Auditor of the Comptroller's office.
In compliance with the Public Funds Investment Act, the Academy has adopted a deposit and
investment policy. That policy does address the following risks:
1 Custodial Credit Risk-Deposits: This is the risk that in the event of bank failure, the Academy's
institutions in excess of federal depository insurance were fully collateralized by FDIC insurance
2. Custodial Credit Risk-Investments: This is the risk that, in the event of the failure of the counterparty,
the Academy will not be able to recover the value of its investments or collateral securities that
are in the possession of an outside party. Investments are subject to custodial credit risk only if they
are evidenced by securities that exist in physical or book entry form. Thus positions in external
investment pools are not subject to custodial credit risk because they are not evidenced by
securities that exist in physical or book entry form.
3. Other Credit Risk: There is the risk that an issuer or other counterparty to an investment will not fulfill
its obligations. To minimize credit risk, TexPool invests only in investments authorized under the
AAAm (Standard & Poor's).
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
25
Foundation Investments
statement of financial position. Unrealized gains and losses are included in the statement of activities. All
other investments are carried at cost.
Investments at the end of the year consist of the following:
Investment Type Cost Basis Fair Value
Marketable equity securities:
Common stock 1,708,468$ 1,927,540$
August 31, 2020
FASB ASC 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value.
That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs
(Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820 are described as
follows:
Level 1 inputs: Inputs to the valuation methodology are unadjusted quoted prices for identical
assets or liabilities in active markets that the Foundation has the ability to access.
Level 2 inputs: Inputs to the valuation methodology include:
Quoted market prices for similar assets or liabilities in active markets;
Quoted prices for identical assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability; and
Inputs that are derived principally from or corroborated by observable market
data by correlation or other means.
If the asset or liability has a specified (contractual) term, the Level 2 input must be
observable for substantially the full-term of the asset or liability.
Level 3 inputs: Inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement. Valuation techniques used need to
maximize the use of observable inputs and minimize the use of unobservable inputs.
The following is a description of the valuation methodologies used for assets measured at fair value.
Marketable Equity Securities
Marketable equity securities reported as level 1 are determined by reference to quoted market prices for
investments listed on an exchange or over-the-counter market.
The following table sets forth by level, within the fair value hierarchy, the Foundation's assets at fair value
as of August 31, 2020.
Level 1 Level 2 Level 3 Total
Marketable equity securities:
Common stock 1,927,540$ -$ -$ 1,927,540$
Assets at Fair Value as of August 31, 2020
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
26
Note 3. Due from Other Governments
The Academy participates in a variety of state and local programs from which it receives grants to
partially or fully finance certain activities. Amounts due from federal and local governments as of
August 31, 2020, are summarized below.
Federal State
Fund Grants Entitlements Local Total
General fund -$ 351,962$ 11,518$ 363,480$
State Textbook fund - 17,441 - 17,441
Safety & Security Grant Fund 25,000 - - 25,000
CARES Act fund 24,240 - - 24,240
Total 49,240$ 369,403$ 11,518$ 430,161$
Note 4. Donated Use of Facilities
The Academy currently operates in facilities that are capital assets of the Town. The Academy is not
required by the Town to pay rent for the use of those facilities; however, the Academy recognizes the
value of the use received, $812,476, in the government-wide statement of activities as capital grants and
contributions and as expense allocated to the various functions.
Note 5. Interfund Balances and Activities
Interfund balances at August 31, 2020, consisted of the following individual fund balances:
Due to Fund Due from Fund Amount Purpose
General fund Nonmajor governmental 376$ Reimburse program disbursements
General fund State Textbook fund 17,441 Reimburse program disbursements
General fund CARES Act fund 24,041 Reimburse program disbursements
Total 41,858$
The Academy had no interfund transfers during the year ending August 31, 2020.
Note 6. Revenue from Local and Intermediate Sources
During the current year, revenues from local and intermediate sources as reported on Exhibit C-2 of the
fund statements consisted of the following:
Non-major
General Fund Funds Total
Gifts and bequests 1,330,861$ 187,968$ 1,518,829$
Interest 17,293 - 17,293
Food sales 7,000 - 7,000
Campus activities - 42,591 42,591
Parking/transportation 1,820 - 1,820
Athletics 73,728 - 73,728
Miscellaneous 31,349 - 31,349
Total 1,462,051$ 230,559$ 1,692,610$
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
27
Note 7. Defined Benefit Pension Plan
Plan Description
The Academy participates in a cost-sharing multiple-employer defined benefit pension that has a special
benefit pension plan is established and administered in accordance with the Texas Constitution, Article
XVI, Section 67 and Texas Government Code, Title 8, Subtitle C. The pension trust fund is a qualified pension
trust under Section 401(a) of the Internal Revenue Code. The Texas Legislature establishes benefits and
have the authority to establish or amend benefit terms.
All employees of public, state-supported educational institutions in Texas who are employed for one-half
or more of the standard work load and who are not exempted from membership under Texas
Government Code, Title 8, Section 822.002 are covered by the system.
Pension Plan Fiduciary Net Position
separately-issued Comprehensive Annual Financial Report that includes financial statements and
required supplementary information. That report may be obtained on the Internet at
http://www.trs.texas.gov/Pages/about_archive_cafr.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
years.
Early retirement is at age 55 with five 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 th
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 above.
Contributions
Contribution requirements are established or amended pursuant to Article 16, section 67 of the Texas
Constitution which requires the Texas legislature to establish a member contribution rate of not less than
than 10% of the aggregate annual compensation paid to members of the system during the fiscal year.
Employee contribution rates are set in state statute, Texas Government Code 825.402. The Texas Pension
Reform Bill (Senate Bill12) of the 86th Texas Legislature amended Texas Government Code 825.402 for
member contributions and increased both employee and employer contribution rates for plan years 2020
through 2025.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
28
Rates for such plan fiscal years are as follows:
2019 2020
Member 7.7% 7.7%
Non-employer contributing
entity (State) 6.8% 7.5%
Employers (District) 6.8% 7.5%
Employers (District - Non-OASDI)* 1.5% 1.5%
Contribution rates
*SB12 requires an increase in employer contributions by public school
districts, charter schools and regional education service centers. Prior to
SB12, only those employers not participating in social security were
required to pay a 1.5% contribution (Non-OASDI surcharge). Beginning
September 1, 2019, all employers are required to pay the Public Education
Employer contribution irrespective of participation in social security.
The contribution amounts for th
2019 Employer contributions 230,148$
2019 Member contributions 462,758$
2019 NECE on-behalf
contributions (state) 354,995$
Contributors to the plan include members, employers and the State of Texas as the only non-employer
contributing entity. 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.
sponsored source, from non-educational and general, or local funds.
On 1.5% of covered payroll. This contribution, known as the Public Education Employer
Contribution, replaced the non-OASDI surcharge that was in effect until 2019.
In addition to the employer contributions listed above, there are two additional surcharges an employer
is subject to:
When employing a retiree of the Teacher Retirement System the employer shall pay both the
member contribution and the state contribution as an employment after retirement surcharge.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
29
When a school district or charter school does not contribute to the Federal Old-Age, Survivors and
Disability Insurance (OASDI) Program for certain employees, they must contribute 1.5% of the state
contribution rate for certain instructional or administrative employees; and 100% of the state
contribution rate for all other employees.
Actuarial Assumptions
The total pension liability in the August 31, 2019 actuarial valuation was determined using the following
actuarial assumptions:
Valuation date
Actuarial cost method Individual entry age normal
Asset valuation method Market value
Single discount rate 7.250%
Long-term expected investment rate
of return 7.25%
Municipal bond rate as of August 2019
Inflation 2.30%
Salary increases including inflation 3.05% to 9.05% includes inflation
Ad-hoc employment benefit changes None
Active mortality rates
2.63%. Source for the rate is the Fixed Income
Market Data/Yield Curve/DataMunicipal Bonds
with 20 Years to maturity that include only federally
tax-exempt Municipal bonds as reported In Fidelity
August 31, 2018, rolled forward to August 2019
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 primarily based on a study of actual experience for the four-
year period ending August 31, 2017 and adopted on September 24, 2018.
Discount Rate
The single discount rate used to measure the total pension liability was 7.25%. The single discount rate was
based on the expected rate of return on pension plan investments of 7.25% and a municipal bond rate
of 2.63%. The projection of cash flows used to determine the discount rate assumed that contributions
from plan members and those of the contributing employers and the non-employer contributing entity
et
position was sufficient to finance the benefit payments until the year 2069. As a result, the long-term
expected rate of return on pension plan investments was applied to projected benefit payments through
the year 2069, and the municipal bond rate was applied to all benefit payments after that date.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
30
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 included in the Systems target
asset allocation as of August 31, 2019 are summarized below:
Long-term
Expected
Geometric
2019 PY Target New Target Real Rate of
Asset Class Allocation* Allocation** Return***
Global Equity
U.S. 18% 18.0% 6.4%
Non-U.S. Developed 13% 13.0% 6.3%
Emerging Markets 9% 9.0% 7.3%
Directional Hedge Funds 4% 0.0% 0.0%
Private Equity 13% 14.0% 8.4%
Stable Value
U.S. Treasuries 11% 16.0% 3.1%
Absolute Return 4% 5.0% 4.5%
Stable Value Hedge Funds 0% 0.0% 0.0%
Cash
Real Return 3% 0.0% 0.0%
Global Inflation Linked Bonds 14% 15.0% 8.5%
Real Assets 5% 6.0% 7.3%
Energy and Natural Resources 0% 0.0% 0.0%
Commodities
Risk Parity
Risk Parity 5% 8.0% 5.8%/6.5%****
Asset Allocation Leverage 2.5%
Cash 1% 2.0%
Asset Allocation Leverage 0% -6.0% 2.7%
Total 100.0% 7.2%
**** New Target Allocation groups Government Bonds within the stable value allocation. This includes
global sovereign nominal and inflation-linked bonds
* FY 2019 Target Alloation based on the Strategic Asset Allocation dated 10/1/2018
** New target allocation based on the Strategic Asset Allocation dated 10/1/2019
*** 10-Year annualized geometric nominal returns include the real rate of retun and inflation of 2.1%
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
31
Discount Rate Sensitivity Analysis
The following schedule shows the impact of the Net Pension Liability if the discount rate used was 1% less
than and 1% greater than the discount rate that was used (7.25%) in measuring the 2019 Net Pension
Liability.
1% Decrease in Discount 1% Increase in
Discount Rate Rate Discount Rate
(6.25%) (7.25%) (8.25%)
Academy's proportionate share of the
net pension liability 2,310,197$ 1,502,914$ 848,859$
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
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 1,502,914$
State's proportionate share that is associated with Academy 5,272,547
Total 6,775,461$
The net pension liability was measured as of August 31, 2018 and rolled forward to August 31, 2019 and
the total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as August 31, 2018 rolled forward to August 3
contributions of all employers to the plan for the period September 1, 2018 thru August 31, 2019.
At August 31, 201
was a decrease of 0.00001851% from its proportion measured as of August 31, 2018.
Changes since the Prior Actuarial Valuation
The following were changes to the actuarial assumptions or other inputs that affected measurement of
the total pension liability since the prior measurement period.
The single discount rate as of August 31, 2018 was a blended rate of 6.907% and that has changed
to the long-term rate of return of 7.25% as of August 31, 2019.
With the enactment of Senate Bill 3 by the 2019 Texas Legislature, an assumption has been made
about how this would impact future salaries. It is assumed that eligible active members will each
receive a $2,700 increase in plan year 2020.
For the year ended August 31, 2019, the Academy recognized pension expense of $1,192,380 and
revenue and expense of $828,243 for support provided by the State.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
32
At August 31, 2020, the Academy reported its proportionate share of the
resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience 6,314$ 52,184$
Changes in actuarial assumptions 466,278 192,688
Difference between projected and actual investment earnings 15,091 -
contributions and the proportionate share of contributions 237,415 24,095
Contributions paid to TRS subsequent to the measurement date 230,148 -
Total 955,246$ 268,967$
The $230,148 reported as a deferred outflow of resources resulting from Academy contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the
year ending August 31, 2021.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
Pension
Expense
Year Ended (Income)
August 31, Amount
2021 143,456$
2022 120,512
2023 86,421
2024 83,164
2025 32,429
Thereafter (9,851)
Total 456,131$
Note 8. Health Care Coverage
During the period ended August 31, 2020, 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 $367 per month per
employee and $292 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 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.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
33
Note 9. 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--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.us/about/documents/cafr.pdf#CAFR; by writing to TRS at 1000 Red River Street,
Austin, TX, 78701-2698; or by calling (512) 542-6592.
Benefits Provided
TRS-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 Academys 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.
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.
Medicare Non-medicare
Retiree* 135$ 200$
Retiree and spouse 529 689
Retiree* and children 468 408
Retiree and family 1,020 999
* or surviving spouse
Effective September 1, 2019 - December 31, 2019
TRS-Care Plan Premium Rates
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
34
Contributions
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.
1575.204 establishes an employer contribution rate of not less than 0.25 percent or not more than 0.75
percent 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.
2020 2019
Active Employee 0.65% 0.65%
Non-employer contributing
entity (State) 1.25% 1.25%
Employers/District 0.75% 0.75%
Federal/private funding* 1.25% 1.25%
Contribution rates
*Contributions paid from federal funds and private grants are
remitted by the employer (District) and paid at the State rate.
Federal/private funding
The contribution amounts for the are as follows:
2019 Employer contributions 46,278$
2019 Member contributions 39,064$
2019 NECE on-behalf
contributions (state) 56,446$
In addition, the State of Texas contributed $27,410, $20,423 and $16,866 in 2020, 2019 and 2018,
respectively, for on-behalf payments for Medicare Part D.
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 $73.6 million in fiscal year 2019.
Actuarial Assumptions
The actuarial valuation of the total OPEB liability was performed as of August 31, 2018. Update procedures
were used to roll forward the total OPEB liability to August 31, 2019. 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.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
35
The following assumptions used for the valuation of the TRS-Care OPEB liability are identical to the
assumptions employed in the August 31, 2019 TRS annual pension actuarial valuation:
Demographic Assumptions Economic Assumptions
Rates of mortality General inflation
Rates of retirement Wage inflation
Rates of termination Salary increases
Rates of disability
The demographic assumptions were developed in the experience study performed for TRS for the period
ending August 31, 2017.
The initial medical trend rates were 10.25% for Medicare retirees and 7.50% for non-Medicare retirees.
There was an initial prescription drug trend rate of 10.25% for all retirees. The initial trend rates decrease to
an ultimate trend rate of 4.50 % over a period of 13 years.
Valuation date
Actuarial cost method
Inflation 2.30%
Discount Rate
Aging factors
Election rates
Expenses
Healthcare trend rates
Ad-hoc employment benefit changes None
August 31, 2018, rolled forward to August 31, 2019
Individual entry age normal
2.63%. Source from fixed income municipal bonds
with 20 years to maturity that include only federal
tax-exempt municipal bonds as reported in
as of August 31, 2019
Based on plan specific experience
Normal Retirement; 65% participation prior to age
65 and 50% after age 65.
Third-party administrative expenses related to the
delivery of health care benefits are included in
the age- adjusted claims costs.
Initial medical trend rates were 10.25% for
Medicare retirees and 7.50% for non-Medicare
retirees. There was an initial prescription drug
trend rate of 10.25% for all retirees. The initial trend
rates decrease to an ultimate trend rate of 4.50%
over a period of 13 years
In this valuation, the impact of the Cadillac Tax has been calculated as a portion of the trend assumption.
Assumptions and methods used to determine the impact of the Cadillac Tax include:
2018 thresholds of $850/$2,292 were indexed annually by 2.30%.
Premium data submitted was not adjusted for permissible exclusions to the Cadillac Tax.
There were no special adjustments to the dollar limit other than those permissible for
non-Medicare retirees over 55.
Results indicate that the value of the excise tax would be reasonably represented by a 25 basis point
addition to the long-term trend rate assumption.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
36
Discount Rate
A single discount rate of 2.63% was used to measure the total OPEB liability at August 31, 2019. This was a
decrease of 1.06% in the discount rate since the August 31, 2018 measurement date. The plan is essentially
-as-you- statutorily
future
benefit payments to current members and therefore, the single discount rate is equal to the prevailing
municipal bond rate. The source for the rate is the Fixed Income Market Data / Yield Curve / Data
Municipal Bonds with 20 years to maturity that include only federally tax-exempt municipal bonds as
-
Discount Rate Sensitivity Analysis. The following schedule shows the impact of the Net OPEB Liability if the
discount rate used was 1% less than and 1% greater than the discount rate that was used (2.63%) in
measuring the Net OPEB Liability.
1% Decrease in Discount 1% Increase in
Discount Rate Rate Discount Rate
(1.63%) (2.63%) (3.63%)
Academy's proportionate share of the
net OPEB liability 3,417,584$ 2,830,719$ 2,371,611$
Healthcare Cost Trend Rates Sensitivity Analysis. 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 in Trend 1% Increase in
Trend Rate Rate Trend Rate
Academy's proportionate share of the
net OPEB liability 2,309,200$ 2,830,719$ 3,529,311$
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEBs
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 2,830,719$
State's proportionate share that is associated with Academy 3,761,390
Total 6,592,109$
The Net OPEB Liability was measured as of August 31, 2018 and rolled forward to August 31, 2019 and the
Total OPEB Liability used to calculate the Net OPEB Liability was determined by an actuarial valuation as
contributions to the OPEB plan relative to the contributions of all employers to the plan for the period
September 1, 2018 thru August 31, 2019.
B Liability was .0059857139% which
was an increase of .0000763739% the same proportion measured as of August 31, 2018.
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
37
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 changed from 3.69% as of August 31, 2018 to 2.63% as of August 31, 2019. This
change increased the total OPEB liability.
The participation rate for pre-65 retirees was lowered from 70% to 65%. The participation rate for
post-65 retirees was lowered from 75% to 50%. 25% of pre-65 retirees are assumed to discontinue
their coverage at age 65. There was no lapse assumption in the prior valuation. These changes
decreased the total OPEB liability.
increased the total OPEB liability.
The percentage of retirees who are assumed to have two-person coverage was lowered from
20% to 15%. In addition, the participation assumption for the surviving spouses of employees that
die while actively employed was lowered from 20% to 10%. These changes decreased the total
OPEB liability.
For the year ended August 31, 2020, the Academy recognized OPEB expense of $187,014 and revenue
of $99,135 for support provided by the State.
resources and deferred inflows of resources related to other post-employment benefits from the following
sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience 138,871$ 463,217$
Changes in actuarial assumptions 157,224 761,394
Difference betw een projected and actual investment earnings 305 -
contributions and the proportionate share of contributions 54,784 -
Contributions paid to TRS subsequent to the measurement date 46,278 -
Total 397,462$ 1,224,611$
The $46,278 deferred outflow of resources resulting from Academy contributions subsequent to the
measurement date will be recognized as a reduction of the net OPEB liability in the year ended
August 31, 2021.
The net amounts of the remaining balances of deferred outflows and inflows of resources related to OPEB
will be recognized in OPEB expense as follows:
OPEB
Expense
Year Ended (Income)
August 31, Amount
2021 (149,145)$
2022 (149,145)
2023 (149,244)
2024 (149,303)
2025 (149,287)
Thereafter (127,303)
Total (873,427)$
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
38
Note 10. Risk Management
The Academy is exposed to various risk of loss related to torts, theft of, damage to and destruction of
assets; errors and omissions; injuries to employees; and natural disasters for which the Academy carries
commercial insurance. There were no settlements exceeding insurance coverage in the current fiscal
year.
Litigation and Contingencies
The Academy is a party to various legal actions none of which is believed by administration to have a
material effect on the financial condition of the Academy. Accordingly, no provision for losses has been
recorded in the accompanying combined financial statements for such contingencies.
The Academy participates in state and federal grant programs which are governed by various rules and
regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit
and adjustment by the grantor agencies; therefore, to the extent that the Academy has not complied
with the rules and regulations governing the grants, if any, refunds of any money received may be
required and the collectability of any related receivable at August 31, 2020 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.
Note 11. Capital Leases
The Academy has entered into lease agreements as lessee for financing the acquisition of computer
equipment and software. The lease agreements qualify as capital leases for accounting purposes, and
therefore, have been recorded at the present value of the future minimum lease payments as of the
inception date.
Equipment and software with a historical cost of $585,623 was under capital lease at August 31, 2020.
ntire
cost was recorded as expense.
The following schedule shows the future minimum lease payments under the capitalized lease together
with the present value of the net minimum lease payments as of August 31, 2020:
Principal Interest Total
195,108$ 12,814$ 207,922$
202,904 5,017 207,921
398,012$ 17,831$ 415,843$
Year Ending
August 31,
2021
2022
Total
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Financial Statements
39
Note 12. Related Party Transactions
The Westlake Academy Foundation contributed $1,212,197 to the Academy during the fiscal year ended
August 31, 2020. In addition to the use of facilities discussed in Note 4, the Town of Westlake contributed
$291,181 to the Academy during the year.
Note 13. Evaluation of Subsequent Events
In March 2020, the World Health Organization declared the novel coronavirus (COVID-19) a global
pandemic and recommended containment and mitigation measures worldwide. This contagious disease
outbreak, which has continued to spread, and any related adverse public health developments, has
adversely affected public education, workforces, economies, and financial markets globally, potentially
leading to an economic downturn. It has also disrupted the normal operations of many businesses and
organizations. It is not possible for management to predict the duration or magnitude of the adverse
time.
Note 14. New Accounting Pronouncements
In June 2018 the GASB released GASB statement No. 87, Leases. This statement was issued to increase the
and liabilities that were previously accounted for as operating leases. It establishes a single model for
lease accounting based on the principle that leases are a financing of the right to use an underlying
asset. Under this statement a lessee is required to recognize a lease liability and an intangible right-to-use
asset and a lessor is required to recognize a lease receivable and a deferred inflow of resources. This
statement is effective for the Academy for the year ended August 31, 2022 and the Academy is currently
evaluating the impact of this standard on its financial statements.
In January 2017 the GASB released GASB statement No. 84, Fiduciary Activities. This statement was issued
to improve guidance regarding the identification of fiduciary activities for accounting and financial
reporting purposes and how fiduciary activities should be reported. The requirements of this statement will
enhance consistency and comparability by (1) establishing specific criteria for identifying activities that
should be reported as fiduciary activities and (2) clarifying whether and how business-type activities
should report their fiduciary activities. Greater consistency and comparability enhances the value
provided by the information reported in financial statements for assessing government accountability
and stewardship. This statement is effective for the Academy for the year ended August 31, 2021 and the
Academy is currently evaluating the impact of this standard on its financial statements.
Note 15. Expenditures in Excess of Appropriations
For the year ending August 31, 2020, expenditures exceeded appropriations in the following functions:
School Leadership ($29,665); Guidance, counseling, and evaluation services ($2,463), and facilities
maintenance and operations ($6,849).
40
This Page Intentionally Left Blank
41
Required Supplementary Information
Westlake Academy Exhibit E-1
(A Component Unit of the Town of Westlake)
Budgetary Comparison Schedule General Fund
For the Year Ended August 31, 2020
The Notes to the Budgetary Comparison Schedule are an integral part of this statement.
42
Variance with
Data Actual Final Budget
Control Amounts Positive or
Codes Original Final GAAP Basis (Negative)
REVENUES
5700 Local and intermediate sources 1,590,561$ 1,507,081$ 1,462,051$ (45,030)$
5800 State program revenues 8,127,372 8,108,857 7,957,979 (150,878)
5020 Total revenues 9,717,933 9,615,938 9,420,030 (195,908)
EXPENDITURES
CURRENT:
0011 Instruction 5,273,570 5,842,824 5,566,302 276,522
0012 Instructional resources and media services 96,371 96,371 88,513 7,858
0013 Curriculum and staff development 83,545 83,545 57,790 25,755
0021 Instructional leadership 182,919 182,919 154,252 28,667
0023 School leadership 1,030,836 1,030,836 1,060,501 (29,665)
0031 Guidance, counseling, and evaluation services 568,295 566,954 569,417 (2,463)
0033 Health services 75,686 79,686 77,264 2,422
0036 Extracurricular activities 279,323 293,033 253,652 39,381
0041 General administration 253,649 253,649 244,889 8,760
0051 Facilities maintenance and operations 970,081 970,081 976,930 (6,849)
0052 Security and monitoring services 37,000 37,000 20,150 16,850
0053 Data processing services 228,360 228,360 213,941 14,419
0061 Community services 142,862 142,862 136,790 6,072
DEBT SERVICE:
0071 Debt service - principal on long-term debt 329,694 187,611 187,611 -
0072 Debt service - interest on long-term debt 20,311 20,311 20,311 -
6030 Total expenditures 9,572,502 10,016,042 9,628,313 387,729
1100 Excess (deficiency) of revenues over
(under) expenditures 145,431 (400,104) (208,283) 191,821
OTHER FINANCING SOURCES
7913 Capital lease proceeds - 585,623 585,623 -
Total other financing sources - 585,623 585,623 -
1200 Net change in fund balance 145,431 185,519 377,340 191,821
0100 Fund balances--beginning 1,373,837 1,373,837 1,373,837 -
3000 Fund balances - ending 1,519,268$ 1,559,356$ 1,751,177$ 191,821$
Budgeted Amounts
Westlake Academy
(A Component Unit of the Town of Westlake)
Notes to the Budgetary Comparison Schedule
For the Year Ended August 31, 2020
43
Budgetary Information
Academy is required to present the adopted and final amended budgeted revenues and expenditures
for this fund. The General Fund budget appears in Exhibit E-1.
The following procedures are followed in establishing the budgetary data:
1. Prior to August 25 of the preceding fiscal year, the Academy prepares a budget for the next
succeeding fiscal year beginning September 1. The operating budget includes proposed
expenditures and the means of financing them.
2. A meeting of the Board of Trustees is then called for the purpose of adopting the proposed budget.
3. Prior to September 1, the budget is legally enacted through resolution by the Board. Once a budget
is approved, it can only be amended at the object 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.
Westlake Academy Exhibit E-2
(A Component Unit of the Town of Westlake)
Schedule o of Net Pension Liability
Teacher Retirement System
For the Last Six Plan Years
44
2019 2018 2017 2016 2015 2014
Academy's proportion of the net pension liability 0.0028912% 0.0027061% 0.0028012% 0.0027822% 0.0030945% 0.0007190%
Academy's proportionate share of net pension liability 1,502,914$ 1,489,525$ 895,663$ 1,051,346$ 1,093,865$ 192,056$
State's proportionate share of net pension liability
associated with Westlake Academy 5,272,547 5,571,598 3,480,057 4,035,754 3,667,893 2,965,583
Total 6,775,461$ 7,061,123$ 4,375,720$ 5,087,100$ 4,761,758$ 3,157,639$
Academy's covered payroll 5,534,431$ 5,289,916$ 5,391,515$ 5,094,571$ 4,784,695$ 4,300,931$
Academy's proportionate share of net pension liability
as a percentage of its covered payroll 27.16% 28.16% 16.61% 20.64% 22.86% 4.47%
Plan fiduciary net position as a
percentage of total pension liability 75.24% 73.74% 82.17% 78.00% 78.43% 83.25%
Note: Only six years of data is presented in accordance with GASB #68, paragraph 138. "The information for all periods for the 10-
year schedules that are required to be presented as required supplementary information may not be available initially. In these
cases, during the transition period, that information should be presented for as many years as are available. The schedules should
not include information that is not measured in accordance with the requirements of this Statement."
Westlake Academy Exhibit E-3
Schedule of Pension Contributions Teacher Retirement System
For the Last Six Fiscal Years
45
2020 2019 2018 2017 2016 2015
Statutorily required contributions 230,148$ 100,311$ 91,593$ 131,436$ 88,399$ 92,325$
Actual contributions in relation to
statutorily required contributions 230,148 100,311 91,593 131,436 88,399 92,325
Contribution deficiency (excess)-$ -$ -$ -$ -$ -$
Academy's covered payroll 5,984,542$ 5,534,431$ 5,289,916$ 5,391,515$ 5,094,571$ 4,784,695$
Contributions as a percentage
of Academy's covered payroll 3.85% 1.81% 1.73% 2.44% 1.74% 1.93%
Note: GASB 68, Paragraph 81.2.b requires that the data in this schedule be presented as of the Academy's current fiscal year as
opposed to the time period covered by the measurement date.
Note: Only six years of data is presented in accordance with GASB #68, paragraph 138. "The information for all periods for the 10-
year schedules that are required to be presented as required supplementary information may not be available initially. In these
cases, during the transition period, that information should be presented for as many years as are available. The schedules should
not include information that is not measured in accordance with the requirements of this Statement.
Westlake Academy Exhibit E-4
(A Component Unit of the Town of Westlake)
Schedule o of Net OPEB Liability
Teacher Retirement System TRS Care Plan
For the Last Three Plan Years
46
2019 2018 2017
Academy's proportion of the net OPEB liability 0.0059857139% 0.005909340% 0.0058830418%
Academy's proportionate share of net OPEB liability 2,830,719$ 2,950,588$ 2,558,314$
State's proportionate share of net OPEB liability
associated with Westlake Academy 3,761,390 4,695,104 4,406,333
Total 6,592,109$ 7,645,692$ 6,964,647$
Academy's covered payroll 5,534,431$ 5,289,916$ 5,391,515$
Academy's proportionate share of net OPEB liability
as a percentage of its covered payroll 51.15% 55.78% 47.45%
Plan fiduciary net position as a
percentage of total OPEB liability 2.66% 1.57% 0.91%
Note: Only three 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."
Westlake Academy Exhibit E-5
Schedule of OPEB Contributions Teacher Retirement System TRS Care Plan
For the Last Three Fiscal Years
47
2020 2019 2018
Statutorily required contributions 46,278$ 46,703$ 46,204$
Actual contributions in relation to
statutorily required contributions 46,278 46,703 46,204
Contribution deficiency (excess)-$ -$ -$
Academy's covered payroll 5,984,542$ 5,534,431$ 5,289,916$
Contributions as a percentage
of Academy's covered payroll 0.77% 0.84% 0.87%
Note: 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.
Note: Only three 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
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49
Combining Statements
Westlake Academy Exhibit F-1
(A Component Unit of the Town of Westlake)
Combining Balance Sheet
Nonmajor Governmental Funds
August 31, 2020
50
224 397 461 484 497
Data
Control
Codes
IDEA Part B
Formula
Advanced
Placement
Initiatives
Campus
Activity Funds Local Grant
Foundation-
Student
Scholarships
Total Nonmajor
Governmental
Funds
1110 Cash and cash equivalents -$ -$ 10,675$ -$ -$ 10,675$
1290 Other receivables - - - 539 - 539
1000 Total assets -$ -$ 10,675$ 539$ -$ 11,214$
LIABILITIES:
2110 Accounts payable -$ -$ 728$ -$ -$ 728$
2170 Due to other funds - - - 376 - 376
Total liabilities - - 728 376 - 1,104
FUND BALANCES:
Restricted for:
3490 Donor stipulations - - - 163 - 163
Committed for:
3545 Campus activities - - 9,947 - - 9,947
3000 Total fund balances - - 9,947 163 - 10,110
4000 Total liabilities and fund balances -$ -$ 10,675$ 539$ -$ 11,214$
LIABILITIES AND FUND BALANCES
ASSETS
Westlake Academy Exhibit F-2
(A Component Unit of the Town of Westlake)
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances Nonmajor Governmental Funds
For the Year Ended August 31, 2020
51
224 397 461 484 497
Data
Control
Codes
IDEA Part B
Formula
Advanced
Placement
Initiatives
Campus
Activity Funds Local Grant
Foundation-
Student
Scholarships
Total Nonmajor
Governmental
Funds
REVENUES
5700 Local and intermediate sources -$ -$ 42,097$ 185,962$ 2,500$ 230,559$
5800 State program revenues - 1,469 - - - 1,469
5900 Federal program revenues 113,670 - - - - 113,670
5020 Total revenues 113,670 1,469 42,097 185,962 2,500 345,698
EXPENDITURES
Current:
0011 Instruction 113,670 1,469 - 87,437 2,500 205,076
0013 Curriculum and instructional
staff development - - - 1,600 - 1,600
0031 Guidance, counseling
and evaluation services - - - 4,935 - 4,935
0036 Extracurricular activities - - 42,268 94,587 - 136,855
0041 General administration - - 975 - - 975
6030 Total expenditures 113,670 1,469 43,243 188,559 2,500 349,441
1100 EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - - (1,146) (2,597) - (3,743)
1200 NET CHANGE IN FUND BALANCES - - (1,146) (2,597) - (3,743)
0100 FUND BALANCES, BEGINNING - - 11,093 2,760 - 13,853
3000 FUND BALANCES, ENDING -$ -$ 9,947$ 163$ -$ 10,110$
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53
Internal Control Report
54
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Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 | Dallas, Texas 75201
Main: 972.490.1970
CPAs AND ADVISORS | WEAVER.COM
55
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed
In Accordance with Government Auditing Standards
To the Board of Trustees
Westlake Academy
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the discretely presented component unit, each major fund, and the aggregate remaining fund
information of Westlake Academy (the Academy) as of and for the year ended August 31, 2020, and the
related notes to the financial statements, which collectively comprise the Academy's basic financial
statements and have issued our report thereon dated December 2, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Academy's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the Academy's internal control. Accordingly,
we do not express an opinion on the effectiveness of the Academy's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Academy's financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect
on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
The Board of Trustees
Westlake Academy
56
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
December 2, 2020