HomeMy WebLinkAboutRes 12-02 WA Approving Annual Audit Report FY 10-11 WESTLAKE ACADEMY
RESOLUTION NO. 12-02
RESOLUTION OF THE WESTLAKE ACADEMY BOARD OF TRUSTEES
APPROVING THE FISCAL YEAR 2010-2011 ANNUAL AUDIT REPORT FROM
PATTILLO, BROWN &HILL, LLP.
WHEREAS, Section 7.3.6 of the Data Collection & Reporting section of the Financial
Accountability System Resource Guide Update 11.0 requires that the annual financial and
compliance report be audited by an independent auditor, and
WHEREAS, Section 7.3.6 of the Data Collection & Reporting section of the Financial
Accountability System Resource Guide Update 11.0 requires the audit report be submitted to the
Division of School Financial Audits of TEA no later than 150 days after the close of the fiscal
year, and
WHEREAS, the audit report must be approved by the Board of Trustees.
NOW, THEREFORE, 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 2010-2011 annual audit report from Pattillo, Brown & Hill, LLP. 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 Council hereby determines that it would have adopted this Resolution without the
invalid provision.
Resolution 12-02
Page 1 of 2
SECTION 4: That this resolution shall become effective from and after its date of
passage.
PASSED AND APPROVED BY THE BOARD OF TRUSTEES OF WESTLAKE
ACADEMY, A CHARTER SCHOOL OF THE STATE OF TEXAS, ON THE 9th DAY
OF JANUARY, 2012.
ATTEST: Laura eat, President
Kelly EdwaVds, Board Secretary homas E. e ; Superintendent
APPROVED AS TO FORM:
Qk��-4- ?
E" �2�q
Jan t S. Bubert or L. Stanton Lowry,
School Attorney
Resolution 12-02
Page 2 of 2
IV4`i
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
To the Board of Trustees
Westlake Academy
We have audited the financial statements of the governmental activities, each major fund, and the aggregate
remaining fund information of Westlake Academy for the year ended August 31, 2011, and have issued our report thereon
dated January 6, 2012. Professional standards require that we provide you with the following information related to our
audit.
Our Responsibilities under U. S. Generally Accepted Auditing Standards and
Government Auditing Standards
As stated in our engagement letter dated August 1,2011, our responsibility, as described by professional standards,
is to express opinions about whether the financial statements prepared by management with your oversight are fairly
presented, in all material respects, in conformity with U. S. generally accepted accounting principles. Our audit of the
financial statements does not relieve you or management of your responsibilities.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting
policies used by Westlake Academy are described in Note I to the financial statements. As described in the notes to the
financial statements, the Academy changed accounting policies related to fund balance by implementing Governmental
Accounting Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, for the
fiscal year ended August 31,2011. We noted no transactions entered into by the governmental unit during the year for which
there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial
statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about future events. Certain
accounting estimates are particularly sensitive because of their significance to the financial statements and because of the
possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate
affecting the financial statements was:
The amount of state foundation revenue a school district earns for a year can and does vary until the time when
final values for each of the factors in the formula become available. Availability can be as late as midway into
the next fiscal year. We have evaluated the key factors and assumptions used to develop the estimate of state
foundation revenue determining it is reasonable in relation to the financial statements as a whole.
115 SOUTH CHURCH STREET■HILLSBORO,TX 76645■(254)582-2583■FAX:(254)582-5731 ■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■TEMPLE,TX(254)791-3460
WACO,TX(254)7724901 ■ALBUQUERQUE,NM(505)266-5904
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,other
than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all
such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by
management were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a
whole.
Disagreements with Management
For purposes of this letter,professional standards define a disagreement with management as a financial accounting,
reporting, or auditing matter,whether or not resolved to our satisfaction, that could be significant to the financial statements
or the auditors'report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation
letter dated January 6,2012.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a"second opinion"on certain situations. If a consultation involves application of an accounting principle
to the governmental unit's financial statements or a determination of the type of auditors' opinion that may be expressed on
those statements, our professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge,there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards,
with management each year prior to retention as the governmental unit's auditors. However, these discussions occurred in
the normal course of our professional relationship and our responses were not a condition to our retention.
This information is intended solely for the use of the Board of Trustees and management of Westlake Academy and
is not intended to be and should not be used by anyone other than these specified parties.
Pad
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January 6,2012
2
Adjusting Entries By Entry Number
FY 2011
Westlake Academy 11612012
Adjustment Adjusting Entries Must
be Approved by District.
Account Number Debit Credit APPROVED BY:
Adjusting Entry Number: 1
461 -00-5749 -00 -000 -1 -00 -000 443.11
461 -00-3610 -00 -000 -1 -00 -000 (443.11)
443.11 (443.11)
Remarks: WP REF 2921.01
Client proposed entry to record fund balance correctly
Adjusting Entry Number: 2
197 -00-2590 -00 -000 -1 -00 -000 (3,432.00)
197 -00-1290 -00 -000 -1 -00 -000 3,432.00
3,432.00 (3,432.00)
Remarks: WP REF 2921.02
Client proposed entry to correct total liability to Town for parking lot
Adeul sting Entry Number: 3
199 -00-1241 -00 -000 -1 -00 -000 14,876.61
199 -00-2181 -00 -000 -1 -00 -000 (18,638.00)
199 -00-5812 -01 -000 -1 -00 -000 (19,395.00)
199 -00-5812 -00 -000 -1 -00 -000 23,156.39
38,033.00 (38,033.00)
Remarks: WP REF 2921.03
Client proposed entry to correct state foundation revenue and due to/from state to proper balances
Adjusting Entry Number: 4
199 -00-5831 -99 -000 -1 -00 -000 946.00
199 -41 -6144 -99 -750 -1 -99 -000 (7,376.00)
199 - 11 -6144 -00 -000 -1 -00 -000 _ 6,430.00
7,376.00 (7,376.00)
Remarks: WP REF 2921.04
Client proposed entry to record Medicare Part D correctly
Adjusting Entry Number: 5
411 -00-2181 -00 -000 -1 -00 -000 345.00
411 - 00-5829 -00 -000 -1 -00 -000 (345.00)
411 -00-1110 -00 -000 -1 -00 -000 (345.00)
411 - 11 -6399 -00 -001 -1 -11 -000 345.00
199 - 11 -6399 -00 -001 -1 -11 -000 (345.00)
199 -00-1110 -00 -000 -1 -00 -000 345.00
1,035.00 (1,035.00)
Remarks: WP REF 2921.05
Client proposed entry to clear out due to state in fund 411
Adjusting Entry Number: 6
199 -00-2161 -00 -000 -1 -00 -000 131,332.63
199 -00-2210 -11 -000 -1 -00 -000 188.86
199 -00-2210 -14 -000 -1 -00 -000 1,293.45
199 -00-2210 -15 -000 -1 -00 -000 446.91
199 -00-2210 -19 -000 -1 -00 -000 446.91
1
Adjusting Entries By Entry Number
FY 2011
Westlake Academy 11612012
Adjustment Adjusting Entries Must
be Approved by District.
Account Number Debit Credit APPROVED BY:
199 -00-2211 -14 -000 -1 -00 -000 654.39
199 -00-2211 -15 -000 -1 -00 -000 265.19
199 -00-2211 -16 -000 -1 -00 -000 (34.33)
199 -00-2211 -19 -000 -1 -00 -000 265.73
199 - 11 -6119 -00 -001 -1 -11 -000 (131,332.63)
199 - 11 -6141 -00 -001 -1 -11 -000 (1,947.84)
199 - 11 -6142 -00 -001 -1 -11 -000 34.33
199 - 11 -6145 -00 -001 -1 -11 -000 (712.10)
199 - 11 -6146 -00 -001 -1 -11 -000 (901.50)
224 -00-2211 -11 -000 -1 -00 -000 97.16
224 -00-2211 -12 -000 -1 -00 -000 14.62
224 -00-2211 -14 -000 -1 -00 -000 20.64
224 -00-2211 -15 -000 -1 -00 -000 8.04
224 -00-2211 -16 -000 -1 -00 -000 35.71
224 -00-2211 -19 -000 -1 -00 -000 (176.17)
224 - 11 -6141 -00 -001 -1 -23 -000 (20.64)
224 - 11 -6142 -00 -001 -1 -23 -000 (35.71)
224 - 11 -6145 -00 -001 -1 -23 -000 (8.04)
224 - 11 -6146 -00 -001 -1 -23 -000 64.39
224 -00-2161 -00 -000 -2 -00 -000 1,462.39
224 -00-2211 -19 -000 -2 -00 -000 184.21
224 - 11 -6119 -00 -001 -2 -23 -000 (1,462.39)
224 - 11 -6146 -00 -001 -2 -23 -000 (184.21)
266 -00-2161 -00 -000 -1 -00 -000 1,466.60
266 -00-2211 -11 -000 -1 -00 -000 97.45
266 -00-2211 -12 -000 -1 -00 -000 14.67
266 -00-2211 -14 -000 -1 -00 -000 21.26
266 -00-2211 -15 -000 -1 -00 -000 8.06
266 -00-2211 -16 -000 -1 -00 -000 (.30)
266 -00-2211 -19 -000 -1 -00 -000 8.06
266 - 11 -6119 -00 -001 -1 -24 -000 (1,466.60)
266 - 11 -6141 -00 -001 -1 -24 -000 (21.26)
266 - 11 -6142 -00 -001 -1 -24 -000 .30
266 - 11 -6145 -00 -001 -1 -24 -000 (8.06)
266 - 11 -6146 -00 -001 -1 -24 -000 (120.18)
138,431.96 (138,431.96)
Remarks: WP REF 4210.03
To clear PY payroll accrual, which was never reversed (entry from Service Center)
Adiusting Entry Number: 7
199 -00-2161 -00 -000 -1 -00 -000 (87,059.07)
199 - 11 -6119 -00 -001 -1 -11 -000 64,585.66
199 - 11 -6119 -00 -001 -1 -23 -000 2,143.02
199 - 11 -6119 -00 -001 -1 -24 -000 2,221.22
199 - 11 -6129 -00 -001 -1 -11 -000 1,497.33
199 - 12-6119 -00 -001 -1 -11 -000 2,089.46
199 -21 -6119 -00 -001 -1 -11 -000 2,980.76
199 -21 -6119 -00 -001 -1 -99 -000 1,261.43
199 -31 -6119 -00 -001 -1 -11 -000 2,143.03
199 -31 -6119 -00 -001 -1 -99 -000 2,014.42
199 -53-6119 -00 -001 -1 -99 -000 3,014.46
2
Adjusting Entries By Entry Number
FY 2011
Westlake Academy 11612012
Adjusting Entries Must
Adjustment be Approved by District.
Account Number Debit Credit APPROVED BY:
199 -61 -6129 -00 -999 -1 -99 -000 3,108.28
224 -00-2161 -00 -000 -2 -00 -000 (2,014.42)
224 - 11 -6119 -00 -001 -2 -23 -000 2,014.42
89,073.49 (89,073.49)
Remarks: WP REF 4210.01
To accrue August payroll(from Service Center)
Adjusting Entry Number: 8
224 -00-5929 -00 -000 -2 -00 -000 (367.82)
224 -00-1241 -00 -000 -2 -00 -000 367.82
266 -00-2171 -00 -000 -1 -00 -000 (1,615.80)
266 - 11 -6119 -00 -001 -1 -24 -000 1,615.80
199 -00-1262 -00 -000 -1 -00 -000 1,615.80
199 - 11 -6119 -00 -001 -1 -23 -000 (1,615.80)
3,599.42 (3,599.42)
Remarks: WP REF 2921.06
Client proposed entry to correct SRF after accruals were posted
Adjusting Entry Number: 9
197 -00-2590 -00 -000 -1 -00 -000 3,432.00
197 -00-1290 -00 -000 -1 -00 -000 (3,432.00)
197 -00-2183 -00 -000 -1 -00 -000 12,840.00
197 -00-2590 -00 -000 -1 -00 -000 55,967.40
197 -00-1290 -00 -000 -1 -00 -000 (68,807.40)
197 -00-8940 -00 -001 -1 -00 -000 (4,192.60)
197 -36-6269 -00 -001 -1 -00 -000 4,192.60
76,432.00 (76,432.00)
Remarks: WP REF 2921.07
Client proposed entry to clear parking lot liabilities and receivables
Adjusting Entry Number: 10
199 -81 -6619 -00 -001 -1 -99 -000 (32,804.47)
199 -81 -6299 -00 -001 -1 -99 -000 32,804.47
485 -81 -6619 -00 -001 -1 -99 -000 (200.00)
485 -81 -6299 -00 -001 -1 -99 -000 200.00
33,004.47 (33,004.47)
Remarks: WP REF 2921.08
Client proposed entry to reclassify 6600 object codes
Adjusting Entry Number: 11
199 -41 -6249 -00 -750 -1 -99 -000 (143.77)
199 -41 -6299 -00 -750 -1 -00 -000 (3,000.00)
199 -41 -6399 -00 -750 -1 -99 -000 (3,060.13)
199 -41 -6499 -00 -750 -1 -99 -000 (6,179.84)
199 - 11 -6399 -00 -001 -1 -11 -000 4,584.73
199 - 11 -6499 -00 -001 -1 -11 -000 143.77
199 - 13-6299 -00 -001 -1 -99 -000 3,000.00
199 - 13-6411 -00 -001 -1 -99 -000 500.00
199 - 13-6499 -00 -001 -1 -99 -000 4,155.24
3
Adjusting Entries By Entry Number
FY 2011
Westlake Academy 11612012
Adjusting Entries Must
Adjustment be Approved by District.
Account Number Debit Credit APPROVED BY:
199 -53-6399 -00 -001 -1 -99 -000 (7,068.69)
199 - 11 -6399 -00 -001 -1 -11 -000 7,068.69
199 -53-6219 -00 -001 -1 -99 -000 (2,480.44)
199 - 11 -6219 -00 -001 -1 -99 -000 2,480.44
199 -53-6219 -00 -001 -1 -99 -000 (3,550.00)
199 -00-8913 -00 -000 -1 -00 -000 3,550.00
199 -53-6119 -00 -001 -1 -99 -000 (1,811.14)
199 - 11 -6119 -00 -001 -1 -99 -000 1,811.14
199 -53-6119 -00 -001 -1 -99 -000 (6,275.87)
199 - 11 -6119 -00 -001 -1 -11 -000 6,275.87
199 -31 -6146 -00 -001 -1 -99 -000 (4,696.85)
199 - 11 -6119 -00 -001 -1 -11 -000 4,696.85
199 -33-6119 -00 -001 -1 -99 -000 (4,641.23)
199 - 11 -6119 -00 -001 -1 -11 -000 4,641.23
199 -31 -6411 -00 -001 -1 -99 -000 (155.00)
199 -33-6411 -00 -001 -1 -99 -000 155.00
199 -31 -6411 -00 -001 -1 -99 -000 (422.84)
199 -33-6411 -00 -001 -1 -99 -000 422.84
199 -61 -6129 -00 -999 -1 -99 -000 (2,704.81)
199 - 11 -6119 -00 -001 -1 -99 -000 2,704.81
199 -41 -6499 -00 -750 -1 -99 -000 (2,498.62)
199 - 13-6499 -00 -001 -1 -99 -000 1,844.60
199 -23-6499 -00 -001 -1 -99 -000 654.02
199 -41 -6399 -00 -750 -1 -99 -000 (188.86)
199 - 13-6399 -00 -001 -1 -99 -000 188.86
48,878.09 (48,878.09)
Remarks: WP REF 2921.09
Client proposed entry to reclassify various items to proper functions
Adiusting Entry Number: 12
990 -00-1101 -00 -000 -1 -00 -000 955,288.00
990 -00-1280 -00 -000 -1 -00 -000 12,758.00
990 -00-1290 -00 -000 -1 -00 -000 44,085.00
990 -00-2110 -00 -000 -1 -00 -000 (8,791.00)
990 -00-3600 -00 -000 -1 -00 -000 (789,303.00)
990 -00-5742 -00 -000 -1 -00 -000 (1,841.00)
990 -00-5744 -00 -000 -1 -00 -000 (1,085,568.00)
990 -00-6400 -00 -000 -1 -00 -000 873,372.00
1,885,503.00 (11885,503.00)
Remarks: To add Westlake Academy Foundation
4
.l s
. WESTLAKE ACADEMY
International Baccalaureate Charter School
ANNUAL FINANCIAL REPORT '
FORTHEYEARENDED
AUGUST31, 2011
Excellence
in the
Face of
Change "
■
PATTI ]LIL0, W
m I
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31,2011
TABLE OF CONTENTS
Exhibit Page
Certificate of Board 1
Independent Auditor's Report 2-3
Management's Discussion and Analysis 4- 11
Basic Financial Statements
Government-wide Statements:
A-1 Statement of Net Assets 12
B-1 Statement of Activities 13 - 14
Governmental Fund Financial Statements:
C-1 Balance Sheet 15
C-3 Statement of Revenues,Expenditures,and Changes in Fund Balance 16
D-1 Statement of Fiduciary Net Assets 17
Notes to the Financial Statements 18-27
Required Supplementary Information
E-1 Statement of Revenues,Expenditures,and Changes in Fund Balance
Budget and Actual—General Fund 28
Notes to Required Supplementary Information 29
Combining Statements
Nonmajor Governmental Funds:
F-1 Combining Balance Sheet 30-32
F-2 Combining Statement of Revenues,Expenditures,and Changes in Fund Balances 33 -35
Internal Control Report
Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 36-37
CERTIFICATE OF BOARD
Westlake Academy Tarrant 220-810
Name of School County Co.-Dist.Number
We,the undersigned, certify that the attached annual financial reports of the above-named school district were reviewed and
(check one) approved disapproved for the year ended August 31,2011,at a meeting of the Board of Trustees of
such school district on the 9th day of January 2012.
Signature of 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
M�11
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
Board of Trustees
Westlake Academy
Members of the Board:
We have audited the accompanying financial statements of the governmental activities, the discretely presented
component unit, each major fund, and the aggregate remaining fund information of Westlake Academy (the "Academy") as
of and for the year ended August 31, 2011,which collectively comprise the Academy's basic financial statements as listed in
the table of contents. These financial statements are the responsibility of Westlake Academy's management. 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 of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
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 31,2011,and the respective changes in financial position for
the year then ended in conformity with accounting principles generally accepted in the United States of America.
As described in the notes to the financial statements, the Academy adopted the provisions of GASB Statement No.
54,Fund Balance Reporting and Governmental Fund Type Definitions, in 2011.
In accordance with Government Auditing Standards, we have also issued our report dated January 6, 2012, 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 the internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our
audit.
2
115 SOUTH CHURCH STREET■HILLSBORO,TX 76645■(254)582-2583■FAX:(254)582-5731 ■www.pbhepa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■TEMPLE,TX(254)791-3460
WACO,TX(254)7724901 ■ALBUQUERQUE,NM(505)266-5904
Accounting principles generally accepted in the United States of America require that the management's discussion
and analysis and budgetary comparison information on pages 4 through 11 and page 28 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.
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively
comprise Westlake Academy's basic financial statements as a whole. The combining nonmajor fund financial statements are
presented for purposes of additional analysis and are not a required part of the financial statements. The combining nonmajor
fund financial statements are the responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the financial statements. The information has been subjected to the auditing
procedures applied in the audit of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the financial statements
or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion,the information is fairly stated in all material respects in relation to
the financial statements as a whole.
fak, f � )0) f f
January 6,2012
3
WESTLAKE ACADEMY
(A COMPONENT UNIT OF TOWN OF WESTLAKE)
MANAGEMENT'S DISCUSSION AND ANALYSIS
AUGUST 31,2011
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, 2011. Please read it in conjunction with the
Academy's financial statements,which follow this section.
FINANCIAL HIGHLIGHTS
• On the government-wide financial statements, the assets of the Academy exceeded liabilities by
$916,961 (Net Assets). This is an increase of$149,028 for the year ended August 31,2011.
• The Academy had$4,884,985 in expenses related to governmental activities of which$647,817 of these
expenses were offset by program-specific charges for services or grants and contributions. This is a total
expense increase of$743,317 over the prior year.
• The General Fund reported a fund balance this year of$914,660, an increase of$147,170 from the prior
year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts—management's discussion and analysis (this section), the basic financial
statements, and required supplementary information. The basic financial statements include two kinds of statements that
present different views of the Academy:
• The first two statements are government-wide financial Figure A-1,Required Components of the
statements that provide both long-term and short-term Academy's Annual Financial Report
information about the Academy's overall financial
status.
W ~,a d Basic Required
• The remaining statements are fund financial statements D " Financial Supplementary
that focus on individual parts of the government,
aad Statements Information
reporting the Academy's operations in more detail than
the government-wide statements.
• The governmental funds statements tell how
general government services were financed in the
short term as well as what remains for future ,--------------------
spending.
• Fiduciary fund statements provide information about Government-Wide Fund
Financial Financial �
the financial relationships in which the District acts Statements Statements
solely as a trustee or agent for the benefit of others, to
whom the resources in question belong.
Summary Detail
4
The financial statements also include notes that explain some of the information in the financial statements and provide more
detailed data. The statements are followed by a section of required supplementary information that further explains and
supports the information in the financial statements. Figure A-1 shows how the required parts of this annual report are
arranged and related to one another.
Figure A-2 summarizes the major features of the Academy's financial statements, including the portion of the Academy
government they cover and the types of information they contain. The remainder of this overview section of management's
discussion and analysis explains the structure and contents of each of the statements.
Government-wide Statements
The government-wide statements report information about the Academy as a whole using accounting methods similar to
those used by private-sector companies. The statement of net assets includes all of the government's assets and liabilities.
All of the current year's revenues and expenses are accounted for in the statement of activities regardless of when cash is
received or paid.
The two government-wide statements report the Academy's net assets and how they have changed. Net assets—the
difference between the Academy's assets and liabilities—is one way to measure the Academy's financial health or position.
• Over time, increases or decreases in the Academy's net assets are an indicator of whether its financial
health is improving or deteriorating,respectively.
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, extracurricular activities, curriculum and staff development, health
services,and general administration. State funds,donations and grants finance most of these activities.
Figure A-2
Major features of the Academ 's Government-wide and Fund Financial Statements
Type of Statement Government-wide Governmental Funds Proprietary Funds Fiduciary Funds
Entire government The activities of the Activities the Academy Instances in which the
(except fiduciary funds) Academy that are not operates similar to private Academy is the trustee or
Scope and the Academy's proprietary or fiduciary businesses i.e.self- agent for someone else's
component units insurance resources
Statement of Net Assets, Balance Sheet,Statement Statement of Net Assets, Statement of Fiduciary
Statement of Activities of Revenues, Statement of Revenues, Net Assets,Statement of
Required Financial Expenditures and Fund Expenses and Changes in Changes in Fiduciary Net
Statements Balances Fund Net Assets, Assets
Statement of Cash Flows
Accrual accounting and Modified accrual Accrual accounting and Accrual accounting and
Accounting basis and economic resources focus. accounting and current economic resources focus economic resources focus
measurement focus financial resources focus
All assets and liabilities, Only assets expected to All assets and liabilities, All assets and liabilities
both financial and capital, be used up and liabilities both financial and capital, both short-term and long-
Types of accountability short-term and long-term that become due during and short-term and long- term;the Academy's
information the year or soon term. funds do not currently
thereafter. No capital include capital assets,
assets included. although they can.
All revenues and Revenue for which cash is All revenues and All revenues and
expenses during year, received during or soon expenses during year, expenses during year,
regardless of when cash is after the end of the year, regardless of when cash is regardless of when cash is
Types oflnjlow/outflow received or paid. expenditures when goods received or paid. received or paid.
Information or services have been
received and payment is
due during the year or
soon thereafter.
5
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 2011, the Foundation contributed $588,775 to the Academy to enhance educational
opportunities.
Fund Financial Statements
The fund financial statements 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 31,2011.
• Governmental funds—Most of the Academy's basic services are included in governmental funds,
which focus on (1) how cash and other financial assets that can readily be converted to cash flow in
and out and (2) the balances left at year-end that are available for spending. Consequently, the
governmental fund statements provide a detailed short-term view that helps you determine whether
there are more or fewer financial resources that can be spent in the near future to finance the
Academy's programs. Because this information does not encompass the additional long-term focus of
the government-wide statements, we provide additional information at the bottom of the governmental
funds statement, or on the subsequent page,that explain the relationship(or differences)between them.
• Fiduciary funds—Some schools are the trustee, or fiduciary, for certain funds. It is also responsible
for other assets that—because of a trust arrangement—can be used only for the trust beneficiaries.
These schools are responsible for ensuring that the assets reported in these funds are used for their
intended purposes. All of these fiduciary activities are reported in a separate statement of fiduciary net
assets and a statement of changes in fiduciary net assets. These activities are excluded from the
school's government-wide financial statements because they cannot use these assets to finance their
operations.
• Proprietary funds—(None at August 31, 2011). Services for which the Academy would charge
customers a fee are generally reported in proprietary funds. Proprietary funds, like the government-
wide statements,provide both long and short-term financial information.
• Internal Service funds report activities that provide supplies and services for the Academy's other
programs and activities—such as a School's Self Insurance Fund or Print Shop.
6
FINANCIAL ANALYSIS OF THE ACADEMY AS A WHOLE
Net assets. The Academy's combined net assets were$1,920,301 at August 31,2011. (See Table A-1).
Table A-1
Westlake Academy's Net Assets
Governmental Activities Component Unit Activities Totals
2011 2010 2011 2010 2011 2010
Current assets $ 1,244,168 $ 1,101,602 $ 955,288 $ 695,944 $ 2,199,456 $ 1,797,546
Other assets - - 56,843 144,789 56,843 144,789
Total assets 1,244,168 1,101,602 1,012,131 840,733 2,256,299 1,942,335
Current liabilities 327,207 333,669 8,791 51,430 335,998 385,099
Total liabilities 327,207 333,669 8,791 51,430 335,998 385,099
Net assets:
Restricted 31,596 21,587 597,171 653,373 628,767 674,960
Unrestricted 885,365 746,346 406,169 135,930 1,291,534 882,276
Total net assets $ 916,961 $ 767,933 $ 1,003,340 $ 789,303 $ 1,920,301 $ 1,557,236
Figure A-2
Westlake Academy
Sources of Revenue for Fiscal Year 2011
Gifts,Bequests&
Charges for Services Miscellaneous
12/o
2% Interest
0%
Operating Grants&
Contributions
11%
State Funding
75%
7
Changes in net assets. The Academy's total revenues were $4,977,309. A significant portion, 75%, of the Academy's
revenue came from state funding. (See Figure A-2). 11% of total revenues were from operating grants and contributions,
12%from gifts,bequests and miscellaneous,less than I%from interest and 2%from charges for services.
The total cost of all programs and services was $4,884,985;60%of these costs are for instructional and instructional related
costs.
Table A-3
Westlake Academy's Changes in Net Assets
Governmental Activities Component Unit Activities Totals
2011 2010 2011 2010 2011 2010
Revenues
Program revenues:
Charges for services $ 99,638 $ 102,406 $ - $ - $ 99,638 $ 102,406
Operating grants and
contributions 548,179 403,001 1,085,568 1,205,207 1,633,747 1,608,208
General revenues:
Grants and contributions
non restricted 3,744,757 3,484,141 - - 3,744,757 3,484,141
Investment earnings 2,295 908 1,841 750 4,136 1,658
Miscellaneous 582,440 553,195 - - 582,440 553,195
Total revenues 4,977,309 4,543,651 1,087,409 1,205,957 6,064,718 5,749,608
Expenses
Instruction and instructional
related 2,949,351 2,617,582 - - 2,949,351 2,617,582
Instructional leadership/
school administration 420,197 383,930 - - 420,197 383,930
Guidance,social work,
health,transportation 218,758 216,813 - - 218,758 216,813
Food services 7,275 8,134 - - 7,275 8,134
Extracurricular activities 105,472 110,308 - - 105,472 110,308
General administration 301,672 318,624 - - 301,672 318,624
Plant maintenance and
security 525,273 265,969 - - 525,273 265,969
Data processing services 154,962 157,923 - - 154,962 157,923
Community services 69,739 59,592 - - 69,739 59,592
Program/support services - - 873,372 1,936,838 873,372 1,936,838
Debt Service - 2,793 - - - 2,793
Capital Outlay 132,286 - - - 132,286 -
Total expenses 4,884,985 4,141,668 873,372 1,936,838 5,758,357 6,078,506
Increase in net assets 92,324 401,983 214,037 ( 730,881) 306,361 ( 328,898)
before Transfers
Extrodinary items 56,704 - - - 56,704 -
Transfers - ( 100,000) - - - ( 100,000)
Increase in net assets 149,028 301,983 214,037 ( 730,881) 363,065 ( 428,898)
Beginning net assets 767,933 465,950 789,303 1,520,184 1,557,236 1,986,134
Ending net assets $ 916,961 $ 767,933 $ 1,003,340 $ 789,303 $ 1,920,301 $ 1,557,236
8
Table A-4(below)presents the cost of each of the Academy's largest functions as well as each function's net cost(total cost
less fees generated by the activities and intergovernmental aid). The net cost reflects what was funded by state revenues as
well as local tax dollars.
• The cost of governmental activities this year was$4,884,985.
• Some of the cost was paid by those who directly benefited from the programs,$99,638.
• By grants and contributions$548,179.
Table A-4
Westlake Academy's Net Cost of Selected Functions
Total% Total%
Total Cost of Services Change Net Cost of Services Change
2011 2010 2010-2011 2011 2010 2010-2011
Instruction $ 2,764,021 $ 2,434,684 14% $ 2,291,988 $ 1,989,539 15%
School leadership 294,931 286,307 3% 283,305 273,224 4%
Guidance,counceling
and evaluation services 165,245 159,850 3% 157,403 151,619 4%
General administration 301,672 318,624 -5% 275,978 312,081 -12%
Plant maintenance
and operations 525,273 265,969 97% 524,027 265,350 97%
Data processing services 154,962 157,923 -2% 146,822 151,186 -3%
FINANCIAL ANALYSIS
The following analysis focuses on the net assets (Table A-1) and changes in net assets (Table A-3) of the Academy's
governmental activities.
Net assets of the Academy's governmental activities increased from$767,933 to$916,961. Unrestricted net assets—the part
of net assets that can be used to finance day-to-day operations without constraints established by debt covenants, enabling
legislation,or other legal requirements—was$885,365 and$746,346 at August 31,2011 and 2010,respectively.
This increase in governmental net assets was the net result of several factors. The primary reason for the increase in the
governmental activities is an increase in unrestricted grants and contributions of$260,616 from the prior year. Operating
grants and contributions also increased $145,178 to offset an increase of$331,769 in instruction and instructional related
expenses.
General Fund Budgetary Highlights
Over the course of the year,the Academy revised its budget by increasing revenues by$60,091 and increasing expenditures
by$185,008. This increase was due to preparation work to the site and the set-up of three portable buildings to be used in
the next school year. At year-end,actual expenditures were$91,955 below the amended budget.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
• General Fund revenues are budgeted to increase 13% over 2010-11 actual revenues. This $635,495 rise is
primarily attributable to the increase in student population and faculty increases.
• Increase in the Academy population by 97 students due to the Board's decision to expand class sizes and
increased sections in the secondary program to provide more student options and in an effort to offset decreases
in State funding.
9
• Amounts available for appropriation in the General Fund budget are $5,334,446, an increase of 15% over the
final 2011 expenditures of$4,518,107. This$816,339 increase is attributed to the following:
• Payroll and Related -$410K
Desired Outcome—High Student Achievement
■ Increase is due to an increase of 8.4 full-time equivalent employees (FTE's). These additions
are tied directly to the increased number of students being served in the Secondary Program.
• In-Direct Operating Costs(formerly changed to the Town)-$304K
Desired Outcome—Financial Stewardship and Responsibility
■ In FY 2011-2012 the Academy will begin to pay the entire operating costs for administrative
services shared with the Town of Westlake. This includes the Superintendent,Finance Director,
Human Resources Director,Facilities Director and support personnel. This has been paid by the
Town of Westlake from the inception of the school in 2003. This amount represents $325,000
less the 25% portion of the IT Tech and the Maintenance Engineer for time allocated to the
Town.
• Facilities Maintenance and Operations -$45K
Desired Outcome—Financial Stewardship and Responsibility
■ Increased utilization of the Academy campus will require additional resources for cleaning,
maintaining and operating. In FY 11/12, the Academy will begin to renovate existing
classrooms to maintain the current high quality learning environment. In addition,there will be
increased utility consumption and daily operating costs.
• Classroom/Instructional Supplies -$35K
Desired Outcome—High Student Achievement-Effective Educators and Staff
■ With an approximate 20%increase in student enrollment at Westlake Academy, a proportionate
increase in consumable classroom/instructional supplies are needed to maintain the current
levels of service in each classroom.
• Employee Compensation and Benefits -$25K
Desired Outcome—Effective Educators&Staff-High Student Achievement
■ With over 70% of the Academy's expenditures being directly related to employee pay and
benefits, it is important that we offer competitive salaries, wages, and benefits to attract and
retain a strong faculty base, even in a difficult economy. Teacher's pay scale has been
maintained at the prior fiscal year's level with all faculty and staff receiving a step increase.
• If the FY 2011-12 budget estimates are realized, the Academy's General Fund's budgetary fund balance is
expected to decrease by$105,714 by the close of FY 2012.
ACHIEVEMENTS DURING FISCAL YEAR 2010-2011:
Academy Accomplishments:
➢ Westlake Academy was ranked# 19 in the United States in the Washington Post Challenge Index
➢ In 2011,WA students achieved the IB Diploma well above the world rate with 86%of the students earning the
diploma.
➢ Westlake Academy's TAKS (Texas Assessment of Knowledge and Skill) scores are notably higher than the
average state scores.
➢ Westlake Academy earned an Exemplary rating, the highest category recognized by the state's accountability
system.
➢ Westlake Academy received the Distinguished Budget Presentation Award from the Government Finance
Officers Association.
➢ The Academy received the Meritorious Budget Award from the Association of School Business Officials
International(ASBO).
➢ For the past two years,WA students have consistently had a higher overall AP pass rate when compared to both
Texas and the World.
➢ In 2011,over a third of the students who took AP exams earned the distinction of being an AP Scholar,AP
Scholar with Honors, or AP Scholar with Distinction.
10
Staff Accomplishments:
➢ Several faculty members continue to represent the International Baccalaureate as Workshop Leaders, Site
Visitors and Consultants.
➢ One faculty member continues to serve as an IB Diploma Assistant Examiner for HL Biology
Student Accomplishments:
➢ Twenty-five WA graduates from the Class of 2011 received the prestigious IB Diploma. In addition, these
students scored above the world average.
➢ The entire Senior class of 32 students received $4.2 million in scholarship and grant offers. All 32 were
accepted into respected colleges/universities across the State and the U.S. including an invitation into the U.S.
Air Force Academy.
➢ Nine WA students received the distinguished honor of AP Scholar for scoring 3 or higher on three or more AP
exams.
➢ A Westlake Academy graduating Senior was awarded the Congressional Award — Bronze Medal by U.S.
Congressman Michael Burgess, M.D. in recognition for her commitment to public service and personal
development.
Athletic Achievements:
➢ VARSITY CROSS COUNTRY
Women's Team- State Champions ➢ VARSITY MEN'S BASKETBALL
Women's Team- 1"Place 0 Round State Tournament
Men's Team-Runner Up
➢ JUNIOR VARSITY MEN'S BASKETBALL
➢ VARSITY VOLLEYBALL Regional Champions
ls`Round State Tournament
➢ VARSITY BASEBALL
➢ VARSITY CO-ED SOCCER 2nd Place State Tournament
State Tournament-Final Four District Champions
➢ JUNIOR HIGH CO-ED SOCCER ➢ VARSITY SOFTBALL
District Champions State Tournament-Final Four
I`Place Regional Tournament 2nd Place District
➢ VARSITY WOMEN'S BASKETBALL ➢ TENNIS
State Tournament-Final Four Men's State Champion
District Champions
CONTACTING THE ACADEMY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general
overview of the Academy's finances and to demonstrate the Academy's accountability for the money it receives. If you have
questions about this report or need additional financial information, contact the Academy/Town Finance Director, Debbie
Piper,at 817-490-5712,or by writing to 3Village Circle, Suite 202,Westlake,Texas 76262.
11
BASIC FINANCIAL STATEMENTS
EXHIBIT A-I
WESTLAKE ACADEMY
STATEMENT OF NET ASSETS
AUGUST 31,2011
1 4
Primary
Government Component Unit
Data
Control Governmental Component
Codes Activities Unit
ASSETS
1110 Cash and Cash Equivalents $ 802,159 $ 955,288
1120 Current Investments 122 -
1240 Due from Other Governments 183,659 -
1290 Other Receivables,net 226,632 56,843
1410 Deferred Expenses 31,596 -
1000 Total Assets 1,244,168 1,012,131
LIABILITIES
2110 Accounts Payable 120,723 8,791
2160 Accrued Wages Payable 89,073 -
2180 Due to Other Governments 40,708 -
2300 Deferred Revenues 76,703 -
2000 Total Liabilities 327,207 8,791
NET ASSETS
3890 Restricted for Other Purposes 31,596 597,171
3900 Unrestricted Net Assets 885,365 406,169
3000 Total Net Assets $ 916,961 $ 1,003,340
The notes to the financial statements are an integral part of this statement.
12
WESTLAKE ACADEMY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED AUGUST 31,2011
Program Revenues
Data t 3 4
Control Operating
Charges for Grants and
Codes Expenses Services Contributions
Primary Government:
GOVERNMENTAL ACTIVITIES:
11 Instruction $ 2,764,021 $ 77,024 $ 395,009
12 Instructional Resources and Media Services 73,398 - 3,522
13 Curriculum and Staff Development 111,932 - 62,581
21 Instructional Leadership 125,266 - 10,575
23 School Leadership 294,931 - 11,626
31 Guidance,Counseling and Evaluation Services 165,245 - 7,842
33 Health Services 53,513 - 3,331
35 Food Services 7,275 2,000 351
36 Extracurricular Activities 105,472 20,614 13,729
41 General Administration 301,672 - 25,694
51 Facilities Maintenance and Operations 525,273 - 1,246
53 Data Processing Services 154,962 - 8,140
61 Community Services 69,739 - 4,333
81 Capital Outlay 132,286 - 200
[TP] TOTAL PRIMARY GOVERNMENT: $ 4,884,985 $ 99,638 $ 548,179
Component Unit:
1C Nonmajor Component Unit $ 873,372 $ - $ 1,085,568
[TC] TOTAL COMPONENT UNIT: $ 873,372 $ - $ 1,085,568
Data
Control General Revenues:
Codes Taxes:
GC Grants and Contributions not Restricted
IE Investment Earnings
Ml Miscellaneous Local and Intermediate Revenue
E1 Extraordinary Item -resource
E2 Extraordinary Item-(Use)
TR Total General Revenues and Extraodinary Items
CN Change in Net Assets
NB Net Assets--Beginning
NE Net Assets--Ending
The notes to the financial statements are an integral part of this statement.
13
EXHIBIT B-1
Net(Expense)Revenue and
Changes in Net Assets
6 9
Primary Government Component Unit
Governmental Component
Activities Unit
$ (2,291,988) $ -
(69,876) -
(49,351) -
(114,691) -
(283,305) -
(157,403) -
(50,182) -
(4,924) -
(71,129) -
(275,978) -
(524,027) -
(146,822) -
(65,406) -
(132,086) -
(4,237,168) -
212,196
- 212,196
3,744,757 -
2,295 1,841
582,440 -
625,195 -
(568,491) -
4,386,196 1,841
149,028 214,037
767,933 789,303
$ 916,961 $ 1,003,340
14
EXHIBIT C-1
WESTLAKE ACADEMY
BALANCE SHEET
GOVERNMENTAL FUNDS
AUGUST 31,2011
Data 10 Total
Control General Foundation Other Governmental
Codes Fund Grant Funds Funds
ASSETS
1110 Cash and Cash Equivalents $ 723,155 $ - $ 79,004 $ 802,159
1120 Investments-Current 122 - - 122
1240 Receivables from Other Governments 159,489 - 24,170 183,659
1260 Due from Other Funds 56,355 - - 56,355
1290 Other Receivables 186,197 40,435 - 226,632
1410 Deferred Expenditures 31,596 - - 31,596
1000 Total Assets $ 1,156,914 $ 40,435 $ 103,174 $ 1,300,523
LIABILITIES AND FUND BALANCES
Liabilities:
2110 Accounts Payable $ 114,488 $ 6,235 $ - $ 120,723
2160 Accrued Wages Payable 87,058 - 2,015 89,073
2170 Due to Other Funds - 34,200 22,155 56,355
2180 Due to Other Governments 40,708 - - 40,708
2300 Deferred Revenues - - 76,703 76,703
2000 Total Liabilities 242,254 40,435 100,873 383,562
Fund Balances:
Nonspendable Fund Balance:
3430 Prepaid Items 31,596 - - 31,596
Committed Fund Balance:
3545 Other Committed Fund Balance - - 2,301 2,301
Assigned Fund Balance:
3590 Other Assigned Fund Balance 172,514 - - 172,514
3600 Unassigned Fund Balance 710,550 - - 710,550
3000 Total Fund Balances 914,660 - 2,301 916,961
4000 Total Liabilities and Fund Balances $ 1,156,914 $ 40,435 $ 103,174 $ 1,300,523
The notes to the financial statements are an integral part of this statement.
15
EXHIBIT C-3
WESTLAKE ACADEMY
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31,2011
Data 10 Total
Control General Foundation Other Governmental
Codes Fund Grant Funds Funds
REVENUES:
5700 Total Local and Intermediate Sources $ 682,515 $ 75,724 $ 115,967 $ 874,206
5800 State Program Revenues 3,926,058 - 19,600 3,945,658
5900 Federal Program Revenues - - 157,445 157,445
5020 Total Revenues 4,608,573 75,724 293,012 4,977,309
EXPENDITURES:
Current:
0011 Instruction 2,493,252 75,724 195,045 2,764,021
0012 Instructional Resources and Media Services 73,398 - - 73,398
0013 Curriculum and Instructional Staff Development 49,351 - 62,581 111,932
0021 Instructional Leadership 121,795 - 3,471 125,266
0023 School Leadership 294,326 - 605 294,931
0031 Guidance,Counseling and Evaluation Services 165,245 - - 165,245
0033 Health Services 53,513 - - 53,513
0035 Food Services 7,275 - - 7,275
0036 Extracurricular Activities 94,713 - 10,759 105,472
0041 General Administration 283,179 - 18,493 301,672
0051 Facilities Maintenance and Operations 525,273 - - 525,273
0053 Data Processing Services 154,962 - - 154,962
0061 Community Services 69,739 - - 69,739
Capital Outlay:
0081 Facilities Acquisition and Construction 132,086 - 200 132,286
6030 Total Expenditures 4,518,107 75,724 291,154 4,884,985
1100 Excess(Deficiency)of Revenues Over(Under) 90,466 - 1,858 92,324
Expenditures
OTHER FINANCING SOURCES(USES):
7915 Transfers In 34,509 - - 34,509
8911 Transfers Out(Use) (34,509) - - (34,509)
7080 Total Other Financing Sources(Uses) - - -
EXTRAORDINARY ITEMS:
7919 Extraordinary Item-Resource 625,195 - 625,195
8913 Extraordinary Item-(Use) (568,491) - - (568,491)
1200 Net Change in Fund Balances 147,170 - 1,858 149,028
0100 Fund Balance-September 1 (Beginning) 767,490 - 443 767,933
3000 Fund Balance-August 31 (Ending) $ 914,660 $ - $ 2,301 $ 916,961
The notes to the financial statements are an integral part of this statement.
16
EXHIBIT D-1
WESTLAKE ACADEMY
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
AUGUST 31,2011
Agency
Fund
ASSETS
Cash and Cash Equivalents $ 45,951
Total Assets $ 45,951
LIABILITIES
Due to Student Groups $ 45,951
Total Liabilities $ 45,951
The notes to the financial statements are an integral part of this statement.
17
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31,2011
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
Westlake Academy (the "Academy"), a blended component unit of the Town of Westlake (the "Town"), is a
Texas nonprofit Corporation under Chapter 12, Subchapter D of the Education Code to provide education. The
Board of Trustees (the "Board") consists of six trustees and is appointed by the Town's governing body.
Currently, all members of the Board are members of the Town's governing body. The Academy prepares its
basic financial statements in conformity with generally accepted accounting principles promulgated by the
Governmental Accounting Standards Board (the "GASB") and other authoritative sources identified in
Statement on Auditing Standards No. 69 of the American Institute of Certified Public Accountants; and it
complies with the requirements of the appropriate version of Texas Education Agency's Financial
Accountability System Resource Guide (the"Resource Guide") and the requirements of contracts and grants of
agencies from which it receives funds.
The Board is appointed by the governing Council of the Town and it has the authority to make decisions,
appoint administrators and managers, and significantly influence operations. It also has the primary
accountability for fiscal matters. Therefore,the Academy is a financial reporting entity as defined by the GASB
in its Statement No. 14,"The Financial Reporting Entity."
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." 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 purposes 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 11 E for additional information relating to the Foundation. Separate audited financial
statements of the Foundation are available from the Academy/Town Finance Director's office, #3 Village
Circle, Suite 202,Westlake,Texas 76262.
B. Government-wide and Fund Financial Statements
The Statement of Net Assets 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.
(continued)
18
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
B. Government-wide and Fund Financial Statements (Continued)
Neither fiduciary funds nor component units that are fiduciary in nature are included.
The Statement of Activities demonstrates how other people or entities that participate in programs the Academy
operates have shared in the payment of the direct costs. Direct expenses are those that are clearly identifiable
with a specific function or segment. The"charges for services"column includes payments made by parties that
purchase, use, or directly benefit from goods or services provided by a given function or segment of the
Academy. The primary example is school lunch charges. The "grants and contributions" column includes
amounts paid by organizations outside the Academy to help meet the operational or capital requirements of a
given function. Examples include grants under the Elementary and Secondary Education Act. If revenue is not
program revenue,it is general revenue used to support all of the Academy's functions.
Interfund activities between governmental funds appear as due to/due from on the Governmental Fund Balance
Sheet and as other resources and other uses on the Governmental Fund Statement of Revenues, Expenditures
and Changes in Fund Balance. All interfund transactions between governmental funds are eliminated on the
government-wide statements. Interfund activities between governmental funds and fiduciary funds remain as
due to/due from on the government-wide Statement of Activities.
The fund financial statements provide reports on the financial condition and results of operations for three fund
categories—governmental, proprietary, and fiduciary. Since the resources in the fiduciary funds cannot be used
for Academy operations,they are not included in the government-wide statements. The Academy considers some
governmental funds major and reports their financial condition and results of operations in a separate column.
C. Measurement Focus,Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting. Revenue is recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as
soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements use the current financial resources measurement focus and the
modified accrual basis of accounting. With this measurement focus, only current assets, current liabilities and
fund balances are included on the balance sheet. Operating statements of these funds present net increases and
decreases in current assets (i.e. revenues and other financing sources and expenditures and other financing
uses).
The modified accrual basis of accounting recognizes revenues in the accounting period in which they become
both measurable and available and it recognizes expenditures in the accounting period in which the fund
liability is incurred, if measurable. The expenditures related to certain compensated absences and claims and
judgments are recognized when the obligations are expected to be liquidated with expendable available
financial resources. The Academy considers all revenues available if they are collectible within 60 days after
year-end.
Miscellaneous revenues are recorded as revenue when received in cash because they are generally not
measurable until actually received. Investment earnings are recorded as earned, since they are both measurable
and available.
Grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant.
Accordingly, when such funds are received,they are recorded as deferred revenues until related and authorized
expenditures have been made. If balances have not been expended by the end of the project period, grantors
sometimes require the Academy to refund all or part of the unused amount.
(continued)
19
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
C. Measurement Focus,Basis of Accounting and Financial Statement Presentation (Continued)
The proprietary fund types and fiduciary funds are accounted for on a flow of economic resources measurement
focus and utilize the accrual basis of accounting. This basis of accounting recognizes revenues in the
accounting period in which they are earned and become measurable and expenses in the accounting period in
which they are incurred and become measurable. The Academy applies all GASB pronouncements as well as
the Financial Accounting Standards Board pronouncements issued on or before November 30, 1989, unless
these pronouncements conflict or contradict GASB pronouncements. With this measurement focus, all assets
and all liabilities associated with the operation of these funds are included on the fund Statement of Net Assets.
The fund equity is segregated into restricted net assets,and unrestricted net assets.
D. Fund Accounting
The Academy reports the following major governmental fund:
The General Fund is the Academy's primary operating fund. It accounts for all financial
resources except those required to be accounted for in another fund.
Additionally,the Academy reports the following fund types:
The Special Revenue Funds account for resources restricted to, or designated for, specific
purposes by the Academy or a grantor in a Special Revenue Fund. Most federal and some state
financial assistance is accounted for in a Special Revenue Fund and sometimes unused balances
must be returned to the grantor at the close of specified project period.
Agency Funds account for resources held for others in a custodial capacity. Fiduciary funds are
reported in the fiduciary fund financial statements. However, because these assets are not
available to support Academy programs, these funds are not included in the government-wide
statements. The Academy's Agency Fund is a Student Activity Fund.
E. Other Accounting Policies
1. The State of Texas (the "State")has created a minimum sick leave program consisting of five days of
sick leave per year with no limit on accumulation and transferability among districts for every person
regularly employed in Texas Public Schools. Each District's local Board is required to establish a sick
leave plan. It is the Academy's policy to permit some employees to accumulate earned but unused
vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since the
Academy does not have a policy to pay any amounts when employees separate from service with the
government. All vacation pay is accrued when incurred in the government-wide financial statements.
A liability for these amounts is reported in governmental funds only if they have matured, for example,
as a result of employee resignations and retirements.
2. The Data Control Codes refer to the account code structure prescribed by the Texas Education Agency
(TEA) in the Financial Accountability System Resource Guide. TEA requires the Academy to display
these codes in the financial statements filed with the Agency in order to insure accuracy in building a
statewide database for policy development and funding plan.
3. When an expenditure is incurred for purposes for which both restricted or unrestricted fund balance is
available, the Academy considers restricted funds to have been spent first. When an expenditure is
incurred for which committed, assigned, or unassigned fund balances are available, the District
considers amounts to have been spent first out of committed funds, then assigned funds, and finally
unassigned funds.
(continued)
20
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Other Accounting Policies(Continued)
4. For purposes of the statement of cash flows for proprietary and similar fund types, the Academy
considers highly liquid investments to be cash equivalents if they have a maturity of three months or
less when purchased.
5. The governmental fund financial statements present fund balances based on classifications that
comprise a hierarchy that is based primarily on the extent to which the District is bound to honor
constraints on the specific purposes for which amounts in the respective governmental funds can be
spent. The classifications used in the governmental fund financial statements are as follows:
• Nonspendable: This classification includes amounts that cannot be spent because they
are either (a) not in spendable form or (b) are legally or contractually required to be
maintained intact. Nonspendable items are not expected to be converted to cash or are
not expected to be converted to cash within the next year.
• Restricted: This classification includes amounts for which constraints have been placed
on the use of the resources either (a) externally imposed by creditors, grantors,
contributors, or laws or regulations of other governments, or(b) imposed by law through
constitutional provisions or enabling legislation.
• Committed: This classification includes amounts that can be used only for specific
purposes pursuant to constraints imposed by board resolution of the School Board, the
District's highest level of decision making authority. These amounts cannot be used for
any other purpose unless the School Board removes or changes the specified use by
taking the same type of action that was employed when the funds were initially
committed. This classification also includes contractual obligations to the extent that
existing resources have been specifically committed for use in satisfying those
contractual requirements.
• Assigned: This classification includes amounts that are constrained by the District's
intent to be used for a specific purpose but are neither restricted nor committed. This
intent can be expressed by the School Board.
• Unassigned: This classification includes the residual fund balance for the General Fund.
The unassigned classification also includes negative residual fund balance of any other
governmental fund that cannot be eliminated by offsetting of assigned fund balance
amounts.
6. Net assets represent the difference between assets and liabilities. Net assets are reported as restricted
when there are limitations imposed on their use either though the enabling legislations adopted by the
Academy or through external restrictions imposed by creditors, grantors or laws or regulations of other
governments.
7. The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect
certain reported amounts and disclosures.Accordingly,actual results could differ from those estimates.
The amount of state foundation revenue a school district earns for a year can and does vary until the
time when final values for each of the factors in the formula become available. Availability can be as
late as midway into the next fiscal year. It is at least reasonably possible that the foundation revenue
estimates as of August 31,2011, will change.
(continued)
21
II. DETAILED NOTES ON ALL FUNDS
A. Deposits 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, 2011, the carrying amount of the Academy's deposits (cash, certificates of deposit, and interest-
bearing savings accounts included in temporary investments)was$848,110 and the bank balance was$907,478.
The Public Funds Investment Act(Government Code Chapter 2256)contains specific provisions in the areas of
investment practices, management reports and establishment of appropriate policies. Among other things, it
requires the Academy to adopt, implement, and publicize an investment policy. That policy must address the
following areas: (1)safety of principal and liquidity,(2)portfolio diversification,(3)allowable investments,(4)
acceptable risk levels, (5) expected rates of return, (6) maximum allowable stated maturity of portfolio
investments, (7)maximum average dollar-weighted maturity allowed based on the stated maturity date for the
portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for certificates of
deposit. Statutes authorize the Academy to invest in (1) obligations of the U. S. Treasury, certain U. S.
agencies, and the State of Texas; (2) certificates of deposit, (3) certain municipal securities, (4) money market
savings accounts, (5) repurchase agreements, (6) bankers acceptances, (7) mutual funds, (8) investment pools,
(9)guaranteed investment contracts, and(10)common trust funds. The Act also requires the Academy to have
independent auditors perform test procedures related to investment practices as provided by the Act. The
Academy is in substantial compliance with the requirements of the Act and with local policies.
The carrying value of investments at August 31, 2011, was $122 (Texas Local Government Investment Pool).
Local government investment pools operate in a manner consistent with the SEC's Rule 2a7 of the Investment
Company Act of 1940. Local government investment pools use amortized cost rather than market value to
report net assets to compute share prices. Accordingly,the fair value of the position of these pools is the same
as the value of the shares in each pool.
TexPool is organized in conformity with the Interlocal Cooperation Act, Chapter 791 of the Texas Government
Code, and the Public Funds Investment Act, Chapter 2256 of the Texas Government Code. The Texas
Comptroller of Public Accounts is the sole officer, director and shareholder of the Texas Treasury Safekeeping
Trust Company, which is authorized to operate TexPool. In addition, the TexPool Advisory Board advises on
TexPool's Investment Policy. This Board is composed equally of participants in TexPool and other persons
who do not have a business relationship with TexPool who are qualified to advise TexPool. TexPool is subject
to annual review by an independent auditor consistent with the Public Funds Investment Act. In addition,
TexPool is subject to review by the State Auditor's office and by the Internal Auditor of the Comptroller's
office.
In compliance with the Public Funds Investment Act, the Academy has adopted a deposit and investment
policy. That policy does address the following risks:
1. Custodial Credit Risk — Deposits: This is the risk that in the event of bank failure, the
Academy's deposits may not be returned to it. The Academy was not exposed to custodial
credit risk since its deposits at year-end and during the year ended August 31, 2011, were
covered by depository insurance or by pledged collateral held by the Academy's agent bank
in the Academy's name.
2. Custodial Credit Risk— Investments: This is the risk that, in the event of the failure of the
counterparty, the Academy will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. Investments are subject to
custodial credit risk only if they are evidenced by securities that exist in physical or book
entry form. Thus positions in external investment pools are not subject to custodial credit risk
because they are not evidenced by securities that exist in physical or book entry form.
(continued)
22
II. DETAILED NOTES ON ALL FUNDS(Continued)
A. Deposits and Investments(Continued)
3. Other Credit Risk: There is the risk that an issuer or other counterparty to an investment will
not fulfill its obligations. To minimize credit risk, TexPool invests only in investments
authorized under the Public Funds Investment Act. As of August 31, 2011, TexPool's
investments credit quality rating was AAAm(Standard&Poor's).
B. Due from Other Governments
The Academy participates in a variety of federal and state programs from which it receives grants to partially or
fully finance certain activities. Amounts due from federal and state governments as of August 31, 2011, are
summarized below. All federal grants shown below are passed through the TEA and are reported on the
financial statements as Due from Other Governments.
State Federal
Fund Entitlements Grants Total
General $ 159,489 $ - $ 159,489
Special revenue - 24,170 24,170
Total $ 159,489 $ 24,170 $ 183,659
C. Donated Use of Facilities
The Academy currently operates in facilities that are capital assets of the Town. The Academy is not required
by the Town to pay rent for the use of those facilities.
D. Interfund Balances and Activities
Interfund balances at August 31,2011,consisted of the following individual fund balances:
Due to Fund Due from Fund Amount Purpose
General Fund Non-major Funds $ 22,155 To cover expenditures
General Fund Foundation Grant 34,200 To cover expenditures
Total $ 56,355
Interfund transfers at August 31,2011,consisted of the following individual fund balances:
Transfer From Transfer To Amount Reason
To separate athletics
General Fund General Fund-Athletics $ 34,509 revenue and expenditures
Total $ 34,509
(continued)
23
II. DETAILED NOTES ON ALL FUNDS (Continued)
E. Component Unit Activity
Major classes of assets, liabilities, net assets, revenues and expenses for the Foundation are reported below for
the fiscal year ended August 31,2011.
Condensed Statement of Net Assets
Assets
Cash and cash equivalents $ 955,288
Other assets,net 56,843
Total assets 1,012,131
Liabilities 8,791
Net assets
Permanently restricted 500,000
Temporarily restricted 97,171
Unrestricted 406,169
Total net assets $ 1,003,340
Statement of Activities
Revenues Expenses Total
Gallery night $ 210,762 $ 35,912 $ 174,850
Blacksmith annual fund 525,283 524,038 1,245
Capital campaign 8,354 78,833 ( 70,479)
Endowment 250,000 - 250,000
Vaquero Baja 89,620 54,111 35,509
Fund-an-item 300 41,174 ( 40,874)
Fund 100 - 42,123 ( 42,123)
Miscellaneous 1,249 1,694 ( 445)
Interest 1,841 - 1,841
Management and general - 95,487 ( 95,487)
Totals $ 1,087,409 $ 873,372 214,037
Beginning net assets 789,303
Ending net assets $ 1,003,340
The Foundation contributed$588,775 to the Academy during the fiscal year ended August 31,2011.
(continued)
24
II. DETAILED NOTES ON ALL FUNDS(Continued)
F. Revenue from Local and Intermediate Sources
During the current year, revenues from local and intermediate sources as reported on Exhibit C-3 of the fund
statements consisted of the following:
Non-major
General Fund Fund 100 Funds Total
Gifts and bequests $ 593,201 $ 75,724 $ 103,350 $ 772,275
Interest 2,295 - - 2,295
Food sales 2,000 - - 2,000
Campus activities 7,996 - 12,617 20,613
Miscellaneous 77,023 - - 77,023
Total $ 682,515 $ 75,724 $ 115,967 $ 874,206
G. Defined Benefit Pension Plan
Plan Description. Westlake Academy contributes to the Teacher Retirement System of Texas (TRS), a cost-
sharing multiple employer defined benefit pension plan. TRS administers retirement and disability annuities,
and death and survivor benefits to employees and beneficiaries of employees of the public school systems of
Texas. .It operates primarily under the provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas
Government Code, Title 8, Subtitle C. TRS also administers proportional retirement benefits and service credit
transfer under Texas Government Code,Title 8,Chapters 803 and 805,respectively. The Texas state legislature
has the authority to establish and amend benefit provisions of the pension plan and may, under certain
circumstances, grant special authority to the TRS Board of Trustees. TRS issues a publicly available financial
report that includes financial statements and required supplementary information for the defined benefit pension
plan. That report may be obtained by downloading the report from the TRS Internet website,
www.trs.state.tx.us,under the TRS Publications heading,by calling the TRS Communications Department at I-
800-223-8778, or by writing to the TRS Communications Department, 1000 Red River Street, Austin, Texas
78701.
Funding Policy. Contribution requirements are not actuarially determined but are established and amended by
the Texas state legislature. The state funding policy is as follows: (1) The state constitution requires the
legislature to establish a member contribution rate of not less than 6.0% of the member's annual compensation
and a state contribution rate of not less than 6.0%and not more than 10%of the aggregate annual compensation
of all members of the system; (2)A state statute prohibits benefit improvements or contribution reductions if, as
a result of a particular action, the time required to amortize TRS' unfunded actuarial liabilities would be
increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period
would be increased by such action. State law provides for a member contribution rate of 6.4% for fiscal years
2009-2011, and a state contribution rate of 6.644%for fiscal years 2010-2011, and 6.58%for fiscal year 2009.
In certain instances the reporting district is required to make all or a portion of the state's 6.644%contribution,
limited to 6.4%for the period of September through December 2009 and increased to 6.644%for the period of
January through August 2011. State contributions to TRS made on behalf of Westlake Academy's employees
for the years ended August 31,2011,2010 and 2009 were$181,301,$185,222, and$162,063,respectively.
(continued)
25
II. DETAILED NOTES ON ALL FUNDS(Continued)
H. Health Care Coverage
During the year ended August 31, 2011, employees of the Academy were covered by a health insurance plan
"TRS-Active-Care"(the Plan). The Academy paid premiums of$300 per month per employee working over 30
hours per week to the Plan. Employees, at their option, authorize payroll withholdings to pay premiums for
dependents. All premiums were paid to a licensed insurer. The Plan was authorized by Article 3.51-2, Texas
Insurance Code and was documented by contractual agreement. The academy pays $225 per month (the state
minimum)for Active-Care eligible employees who work more than 20 hours per week,but less than 30.
The Academy meets its obligations for workers' compensation insurance through Utica National Insurance
Group.
I. Retiree Health Plan
Plan Description. Westlake Academy contributes to the Texas Public School Retired Employees Group
Insurance Program (TRS-Care), a cost-sharing multiple-employer defined benefit postemployment health care
plan administered by the Teacher Retirement System of Texas. TRS-Care provides health care coverage for
certain persons (and their dependents) who retired under the Teacher Retirement System of Texas. The
statutory authority for the program is Texas Insurance Code, Chapter 1575. Section 1575.052 grants the TRS
Board of Trustees the authority to establish and amend basic and optional group insurance coverage for
participants. The Teacher Retirement System of Texas issues a publicly available financial report that includes
financial statements and required supplementary information for TRS-Care. That report may be obtained by
visiting the TRS Web site at www.trs.state.tx.us under the TRS Publications heading, by calling the TRS
Communications Department at 1-800-223-8778, or by writing to the Communications Department of the
Teacher Retirement System of Texas at 1000 Red River Street, Austin,Texas 78701.
Funding Policy. Contribution requirements are not actuarially determined but are legally established each
biennium by the Texas Legislature. Texas Insurance Code, Sections 1575.202, 203, and 204 establish state,
active employee, and public school contributions, respectively. The State of Texas and active public school
employee contribution rates were 1.0% and 0.65% of public school payroll, respectively, with school districts
contributing a percentage of payroll set at 0.55% for fiscal years 2009-2011. Per Texas Insurance Code,
Chapter 1575, the public school contribution may not be less than 0.25%or greater than 0.75%of the salary of
each active employee of the public school. For the years ended August 31, 2011, 2010, and 2009, the State's
contributions to TRS-Care were $29,454, $25,914, and $23,040, respectively, the active member contributions
were $19,145, $16,844, and $14,976, respectively, and the school district's contributions were $16,200,
$14,253,and$12,672,respectively,which equaled the required contributions each year.
J. Retiree Health Plan
Medicare Part D— On-behalf Payments. The Medicare Prescription Drug, Improvement, and Modernization
Act of 2003, which was effective January 1, 2006, established prescription drug coverage for Medicare
beneficiaries known as Medicare Part D. One of the provisions of Medicare Part D allows for the Texas Public
School Retired Employee Group Insurance Program(TRS-Care)to receive retiree drug subsidy payments from
the federal government to offset certain prescription drug expenditures for eligible TRS-Care participants.
These on-behalf payments of$6,430 and $6,112 were recognized for the years ended August 31, 2011 and
2010,respectively,as equal revenues and expenditures.
K. Risk Management
The Academy is exposed to various risk of loss related to torts, theft of, damage to and destruction of assets;
errors and omissions; injuries to employees; and natural disasters for which the Academy carries commercial
insurance. There were no settlements exceeding insurance coverage in the current fiscal year.
(continued)
26
II. DETAILED NOTES ON ALL FUNDS(Continued)
L. Litigation
The Town and Academy are currently involved in a lawsuit for wrongful termination brought by the former
head of school and his wife, a former teacher. A settlement was reached in November 2011 and is being
handled by the Academy's insurance carrier.No additional liability to the Academy is anticipated.
27
REQUIRED SUPPLEMENTARY INFORMATION
EXHIBIT E-1
WESTLAKE ACADEMY
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL-GENERAL FUND
FOR THE YEAR ENDED AUGUST 31,2011
Data Actual Amounts Variance With
Control Budgeted Amounts (GAAP BASIS) Final Budget
Codes Positive or
Original Final (Negative)
REVENUES:
5700 Total Local and Intermediate Sources $ 585,381 $ 669,967 $ 682,515 $ 12,548
5800 State Program Revenues 3,944,632 3,920,137 3,926,058 5,921
5020 Total Revenues 4,530,013 4,590,104 4,608,573 18,469
EXPENDITURES:
Current:
0011 Instruction 2,438,264 2,547,372 2,493,252 54,120
0012 Instructional Resources and Media Services 93,256 83,950 73,398 10,552
0013 Curriculum and Instructional Staff Development 68,500 68,090 49,351 18,739
0021 Instructional Leadership 133,415 134,891 121,795 13,096
0023 School Leadership 298,877 298,639 294,326 4,313
0031 Guidance,Counseling and Evaluation Services 164,757 167,001 165,245 1,756
0033 Health Services 54,529 57,691 53,513 4,178
0035 Food Services 9,700 9,894 7,275 2,619
0036 Extracurricular Activities 114,096 97,330 94,713 2,617
0041 General Administration 279,300 283,540 283,179 361
0051 Facilities Maintenance and Operations 546,560 526,571 525,273 1,298
0053 Data Processing Services 158,851 152,621 154,962 (2,341)
0061 Community Services 64,949 70,477 69,739 738
Capital Outlay:
0081 Facilities Acquisition and Construction - 111,995 132,086 (20,091)
6030 Total Expenditures 4,425,054 4,610,062 4,518,107 91,955
1100 Excess(Deficiency)of Revenues Over(Under) 104,959 (19,958) 90,466 110,424
Expenditures
OTHER FINANCING SOURCES(USES):
7915 Transfers In 86,432 104,042 34,509 (69,533)
8911 Transfers Out(Use) (99,272) (91,354) (34,509) 56,845
7080 Total Other Financing Sources(Uses) (12,840) 12,688 - (12,688)
EXTRAORDINARY ITEMS:
7919 Extraordinary Item-Resource - 550,000 625,195 75,195
8913 Extraordinary Item-(Use) - (550,000) (568,491) (18,491)
1200 Net Change in Fund Balances 92,119 (7,270) 147,170 154,440
0100 Fund Balance-September 1 (Beginning) 767,490 767,490 767,490 -
3000 Fund Balance-August 31 (Ending) $ 859,609 $ 760,220 $ 914,660 $ 154,440
28
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
AUGUST 31,2011
Budgetary Information
The Board adopts an"appropriated budget"on a GAAP basis for the General Fund. The Academy is required to present
the adopted and final amended budgeted revenues and expenditures for this fund. The General Fund budget appears in
Exhibit E-1.
The following procedures are followed in establishing the budgetary data reflected in the basic financial statements:
1. Prior to August 25 of the preceding fiscal year,the Academy prepares a budget for the next succeeding
fiscal year beginning September 1. The operating budget includes proposed expenditures and the
means of financing them.
2. A meeting of the Board is then called for the purpose of adopting the proposed budget.
3. Prior to September 1, the budget is legally enacted through resolution by the Board. Once a budget is
approved, it can only be amended at the object function and fund level by approval of a majority of the
members of the Board. Amendments are presented to the Board at its regular meetings. Each
amendment made before the fact, is reflected in the official minutes of the Board, and is not made after
fiscal year-end.
4. Budgeted amounts are amended by the Board. All budget appropriations lapse at year-end.
5. For the year ending August 31,2011,expenditures exceeded appropriations in the following functions:
Data Processing Services and Facilities Acquisition and Construction. The functions that exceeded
appropriations were funded by other various functions that were under budget.
29
COMBINING STATEMENTS
WESTLAKE ACADEMY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
AUGUST 31,2011
224 225 266
Data
Title XIV
Control IDEA-Part B IDEA-Part B ARRA State
Codes Formula Preschool Stabilization
ASSETS
1110 Cash and Cash Equivalents $ - $ - $ -
1240 Receivables from Other Governments 16,788 - 7,382
1000 Total Assets $ 16,788 $ - $ 7,382
LIABILITIES AND FUND BALANCES
Liabilities:
2160 Accrued Wages Payable $ 2,015 $ - $ -
2170 Due to Other Funds 14,773 - 7,382
2300 Deferred Revenues _ - _
2000 Total Liabilities 16,788 - 7,382
Fund Balances:
Committed Fund Balance:
3545 Other Committed Fund Balance - - -
3000 Total Fund Balances
4000 Total Liabilities and Fund Balances $ 16,788 $ - $ 7,382
30
EXHIBIT F-1 (Cont'd)
397 411 461 481 482 483 484 485
Advanced Campus Hudson
Placement Technology Activity Hudson Fund 100 Hudson Hudson Teacher
Incentives Allotment Funds Fund Grant Technology Internship Creativity
$ - $ - $ 2,301 $ 3,473 $ - $ - $ 35,000 $ 9,800
$ 2,301 $ 3,473 $ - $ - $ 35,000 $ 9,800
3,473 - - 35,000 9,800
- 3,473 - - 35,000 9,800
2,301 - - - - -
2,301 - - - - -
2,301 $ 3,473 $ - $ - $ 35,000 $ 9,800
31
EXHIBIT F-1
WESTLAKE ACADEMY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
AUGUST 31,2011
486 Total
Data Hudson Nonmajor
Control
Teacher Governmental
Codes Effectiveness Funds
ASSETS
1110 Cash and Cash Equivalents $ 28,430 $ 79,004
1240 Receivables from Other Governments - 24,170
1000 Total Assets $ 28,430 $ 103,174
LIABILITIES AND FUND BALANCES
Liabilities:
2160 Accrued Wages Payable $ - $ 2,015
2170 Due to Other Funds - 22,155
2300 Deferred Revenues 28,430 76,703
2000 Total Liabilities 28,430 100,873
Fund Balances:
Committed Fund Balance:
3545 Other Committed Fund Balance - 2,301
3000 Total Fund Balances - 2,301
4000 Total Liabilities and Fund Balances $ 28,430 $ 103,174
32
WESTLAKE ACADEMY
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31,2011
224 225 266
Data
Title XIV
Control IDEA-Part B IDEA-Part B ARRA State
Codes Formula Preschool Stabilization
REVENUES:
5700 Total Local and Intermediate Sources $ - $ - $ -
5800 State Program Revenues - - -
5900 Federal Program Revenues 85,134 175 72,136
5020 Total Revenues 85,134 175 72,136
EXPENDITURES:
Current:
0011 Instruction 85,134 175 72,136
0013 Curriculum and Instructional Staff Development - - -
0021 Instructional Leadership - - -
0023 School Leadership - - -
0036 Extracurricular Activities - - -
0041 General Administration - - -
Capital Outlay:
0081 Facilities Acquisition and Construction - - -
6030 Total Expenditures 85,134 175 72,136
1200 Net Change in Fund Balance - - -
0100 Fund Balance-September 1 (Beginning) - - -
3000 Fund Balance-August 31 (Ending) $ - $ - $ -
33
EXHIBIT F-2(Cont'd)
397 411 461 481 482 483 484 485
Advanced Campus Hudson
Placement Technology Activity Hudson Fund 100 Hudson Hudson Teacher
Incentives Allotment Funds Fund Grant Technology Internship Creativity
$ - $ - $ 12,617 $ 58,527 $ 22,123 $ 22,500 $ - $ 200
4,500 15,100 - - - - - -
4,500 15,100 12,617 58,527 22,123 22,500 - 200
- 15,100 - - - 22,500 - -
4,500 - - 38,692 19,389 - - -
- - - 737 2,734 - - -
- - 605 - - - -
- 10,759 - - - - -
- 18,493 - - - -
- - - - - - - 200
4,500 15,100 10,759 58,527 22,123 22,500 - 200
1,858 - - - - -
443 - - - - -
2,301 $ - $ - $ - $ - $ -
34
EXHIBIT F-2
WESTLAKE ACADEMY
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31,2011
486 Total
Data Hudson Nonmajor
Control Teacher Governmental
Codes Effectiveness Funds
REVENUES:
5700 Total Local and Intermediate Sources $ - $ 115,967
5800 State Program Revenues - 19,600
5900 Federal Program Revenues - 157,445
5020 Total Revenues - 293,012
EXPENDITURES:
Current:
0011 Instruction - 195,045
0013 Curriculum and Instructional Staff Development - 62,581
0021 Instructional Leadership - 3,471
0023 School Leadership - 605
0036 Extracurricular Activities - 10,759
0041 General Administration - 18,493
Capital Outlay:
0081 Facilities Acquisition and Construction - 200
6030 Total Expenditures - 291,154
1200 Net Change in Fund Balance - 1,858
0100 Fund Balance-September 1 (Beginning) - 443
3000 Fund Balance-August 31 (Ending) $ - $ 2,301
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INTERNAL CONTROL REPORT
lvk�Ml
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT A UDITING STANDARDS
Board of Trustees
Westlake Academy
Members of the Board:
We have audited the accompanying financial statements of the governmental activities, the discretely presented
component unit, each major fund, and the aggregate remaining fund information of Westlake Academy (the"Academy") as
of and for the year ended August 31, 2011, which collectively comprise the Academy's basic financial statements and have
issued our report thereon dated January 6, 2012. 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.
Internal Control Over Financial Renortin2
In planning and performing our audit, we considered the Academy's internal control over financial reporting as a
basis for designing our auditing procedures 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 over financial reporting.
Accordingly,we do not express an opinion on the effectiveness of the Academy's internal control over financial reporting.
A control deficiency 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 misstatements on a timely basis. A significant
deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Academy's ability to
initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting
principles such that there is more than a remote likelihood that a misstatement of the Academy's financial statements that is
more than inconsequential will not be prevented or detected by the Academy's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than
a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the
Academy's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant
deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we
consider to be material weaknesses,as defined above.
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115 SOUTH CHURCH STREET■HILLSBORO,TX 76645■(254)582-2583■FAX:(254)582-5731 ■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■TEMPLE,TX(254)791-3460
WACO,TX(254)772-4901 ■ALBUQUERQUE,NM(505)266-5904
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Westlake Academy's financial statements are free of
material misstatement,we performed tests of its compliance with certain provisions of laws,regulations,contracts, and grant
agreements, noncompliance with which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of management,the Board of Trustees, and others within
the entity and is not intended to be used and should not be used by anyone other than these specified parties.
P4- —J px�
J
January 6,2012
37