HomeMy WebLinkAboutRes 09-22 WA Approving 2008-2009 Annual Audit Report WESTLAKE ACADEMY
RESOLUTION NO.09-22
APPROVING THE FISCAL YEAR 2008-2009 ANNUAL AUDIT REPORT FROM PATTILLO,
BROWN&HILL,LLP.
BE IT RESOLVED BY THE BOARD OF TRUSTEES WESTLAKE ACADEMY:
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 THE
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
2008/2009 annual audit report from Pattillo, Brown&Hill, LLP., attached as Exhibit "A",
SECTION 3: That this Resolution shall take effective immediately upon passage and signing.
PASSED AND APPROVED ON THIS 7ch DAY OF DECEMBER 2009.
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ATTEST: Lauf a Wheat, President
KclYEdwarQ Board Secretary Thomas E. O
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ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
AUGUST 31, 2009
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PATT11. 1_, O, BROWN 8r
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31,2009
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-2 Reconciliation for C-1 16
C-3 Statement of Revenues,Expenditures,and Changes in Fund Balance 17
C-4 Reconciliation for C-3 18
D-1 Statement of Fiduciary Net Assets 19
Notes to the Financial Statements 20-28
Required Supplementary Information
E-1 Statement of Revenues,Expenditures,and Changes in Fund Balance
Budget and Actual—General Fund 29
Notes to Required Supplementary Information 30
Combining Statements
Nonmajor Governmental Funds:
F-1 Combining Balance Sheet 31 -32
F-2 Combining Statement of Revenues,Expenditures,and Changes in Fund Balances 33 -34
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 35 -36
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 31,2009,at a meeting of the Board of Trustees of
such school district on the 7`h day of December 2009.
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)
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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 31,2009,which collectively comprise the Academy's basic financial statements as listed in
the table of contents. These financial statements are the responsibility of the 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the discretely presented component unit, each major fund and the aggregate
remaining fund information of the Westlake Academy as of August 31,2009, 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.
In accordance with Government Auditing Standards, we have also issued our report dated November 30, 2009, 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.
The Management's Discussion and Analysis and budgetary comparison information on pages 4 through 11 and 29,
are not a required part of the basic financial statements,but are supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited procedures,which consisted principally
of inquiries of management regarding the methods of measurement and presentation of the required supplementary
information. However,we did not audit the information and express no opinion on it.
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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
WHITNEY,TX(254)694-46000 ALBUQUERQUE,NM(505)266-5904
Our audit was conducted for the purpose of forming opinions on the basic financial statements that collectively
comprise the Westlake Academy's basic financial statements. The combining fund statements are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The combining fund financial statements
have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial statements taken as a whole.
November 30,2009
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WESTLAKE ACADEMY
(A COMPONENT UNIT OF TOWN OF WESTLAKE)
MANAGEMENT'S DISCUSSION AND ANALYSIS
AUGUST 31,2009
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, 2009. 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
$465,950(Net Assets). This is a decrease of$168,504 for the year ended August 31,2009.
• The Academy had$3,726,759 in expenses related to governmental activities of which$314,148 of these
expenses were offset by program-specific charges for services or grants and contributions. This is a total
expense increase of$421,539 over the prior year.
• The General Fund reported a fund balance this year of$504,653, a decrease of$129,801 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
Academy's Annual Financial Report
statements that provide both long-term and short-term
information about the Academy's overall financial r -�
status.
7&4oa9cote4'¢ Basic Required
'Dwaeatoa Financial Supplementary
•
The remaining statements are fund financial statements Statements Information
that focus on individual parts of the government, ""d
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.
Government-Wide Fundoted
Financial Financial
Statements Statements
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StitteateaPa
Summary Detail
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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-tern and long-term that become due during and short-term and long- term;the Academy's
information the year or soon tenn. 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 of Inflow/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.
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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 2009, the Foundation contributed $437,289 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 31,2009.
• 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, 2009). 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 to report activities that provide supplies and services for the Academy's
other programs and activities–such as a School's Self Insurance Fund or Print Shop.
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FINANCIAL ANALYSIS OF THE ACADEMY AS A WHOLE
Net assets. The Academy's combined net assets were$2,024,837 at August 31,2009. (See Table A-1).
Table A-1
Westlake Academy's Net Assets
Governmental Activities Component Unit Activities Totals
2009 2008 2009 2008 2009 2008
Current assets $ 630,935 $ 786,170 $ 1,270,631 $ 758,188 $ 1,901,566 $ 1,544,358
Other assets - - 281,798 410,011 281,798 410,011
Total assets 630,935 786,170 1,552,429 1,168,199 2,183,364 1,954,369
Current liabilities 164,985 151,716 32,245 30,844 197,230 182,560
Due to Academy - - - - - -
Totalliabilities 164,985 151,716 32,245 30,844 197,230 182,560
Net assets:
Restricted 22,636 41,486 1,494,982 1,069,587 1,517,618 1,111,073
Unrestricted 443,314 592,968 25,202 67,768 468,516 660,736
Total net assets $ 465,950 $ 634,454 $ 1,520,184 $ 1,137,355 $ 1,986,134 $ 1,771,809
Figure A-2
Westlake Academy
Sources of Revenue for Fiscal Year 2009
Gifts, Bequests&
Charges for Services Miscellaneous
1% 13/0
Interest
0%
..........
- _ Operating Grants&
Contributions
7%
State Funding
79%
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Changes in net assets. The Academy's total revenues were $3,758,255. A significant portion, 79%, of the Academy's
revenue came from state funding. (See Figure A-2). 7%of total revenues were from operating grants and contributions, 13%
from gifts,bequests and miscellaneous,less than I%from interest and I%from charges for services.
The total cost of all programs and services was $3,726,759; 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
2009 2008 2009 2008 2009 2008
Revenues
Program revenues:
Charges for services $ 55,475 $ 42,839 $ - $ - $ 55,475 $ 42,839
Operating grants and
contributions 258,673 228,056 957,944 1,192,307 1,216,617 1,420,363
General revenues:
Grants and contributions
non restricted 2,960,590 2,500,817 - - 2,960,590 2,500,817
Investment earnings 4,617 22,335 10,358 13,184 14,975 35,519
Miscellaneous 478,900 453,887 - - 478,900 453,887
Total revenues 3,758,255 3,247,934 968,302 1,205,491 4,726,557 4,453,425
Expenses
Instruction and instructional
related 2,219,858 2,017,334 - - 2,219,858 2,017,334
Instructional leadership/
school administration 191,214 154,123 - - 191,214 154,123
Guidance,social work,
health,transportation 222,420 137,283 - - 222,420 137,283
Food services 15,448 31,516 - - 15,448 31,516
Extracurricular activities 111,738 49,484 - - 111,738 49,484
General administration 527,000 510,966 - - 527,000 510,966
Plant maintenance and
security 279,485 235,381 - - 279,485 235,381
Data processing services 88,720 103,498 - - 88,720 103,498
Community services 66,822 65,635 - - 66,822 65,635
Program/support services - - 585,473 619,221 585,473 619,221
Debt Service 4,054 - - - 4,054 -
Total expenses 3,726,759 3,305,220 585,473 619,221 4,312,232 3,924,441
Increase in net assets 31,496 ( 57,286) 382,829 586,270 414,325 528,984
before Transfers
Transfers ( 200,000) - - - - -
Increase in net assets ( 168,504) ( 57,286) 382,829 586,270 414,325 528,984
Beginning net assets 634,454 691,740 1,137,355 551,085 1,771,809 1,242,825
Ending net assets $ 465,950 $ 634,454 $ 1,520,184 $ 1,137,355 $ 2,186,134 $ 1,771,809
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Table A-4 (below)presents the cost of each of the Academy's largest functions as well as each function's net cost(total cost
less fees generated by the activities and intergovernmental aid). The net cost reflects what was funded by state revenues as
well as local tax dollars.
• The cost of governmental activities this year was$3,726,759.
• Some of the cost was paid by those who directly benefited from the programs,$55,475.
• By grants and contributions$258,673.
Table A-4
Westlake Academy's Net Cost of Selected Functions
Total% Total%
Total Cost of Services Change Net Cost of Services Change
2009 2008 2008-2009 2009 2008 2008-2009
Instruction $ 2,120,372 $ 1,922,927 10.% $ 1,916,037 $ 1,734,173 10.%
School leadership 179,554 141,828 27.% 168,556 134,333 25.%
Guidance,counseling
and evaluation services 163,575 112,350 46.% 159,345 108,451 47.%
General administration 527,000 510,966 3.% 510,168 496,714 3.%
Plant maintenance
and operations 279,485 235,381 19.% 279,485 235,381 19.%
Data processing services 88,720 103,498 ( 14.%) 84,483 100,182 ( 16.%)
FINANCIAL ANALYSIS
Revenues from governmental fund types totaled $3,758,255 with total governmental fund type expenditures totaling
$3,805,696.
General Fund Budgetary Highlights
Over the course of the year, the Academy revised its budget by increasing revenues by$48,080 and increasing expenditures
by$263,382. At year-end, actual expenditures were$50,037 below the amended budget. The increase included the set up of
the capital lease,one additional lease payment,additional software,and two additional aides.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
• General Fund revenues are budgeted to increase 13% over 2009-2010 actual revenues. This rise is
primarily attributable to the increase in student population.
• Increase in the Academy population by adding grade twelve for FY 2009-2010. This completes our
expansion and makes the Academy a K-12 charter school. With this expansion,the student population
is estimated to increase by 56 to 473.
• Amounts available for appropriation in the General Fund budget are $3,864,132, an increase of 4%
over the final 2009 amended budget of$3,723,169. This total $140,963 increase is attributed to the
following variances:
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Expenditure $Variance $Variance
Payroll and Related $ 233,756 9%
Contracted Services (70,149) -13%
Supplies&Materials (7,388) -4%
Other Operating 25,735 -18%
Debt Service (40,991) -49%
$ 140,963 4%
• Payroll and Related
Increase is due to an anticipated increase of 5.5 positions for FY 09-10 as well as a 2.4%
increase to our salary scale.
• Contracted Services
The major portion of the decrease is due to the reduction of legal fees and IT consultants.
• Supplies&Materials
Additional supplies were purchased in FY 08-09 for the opening of the new Arts and
Sciences Center which decreased Instructional supplies while Maintenance and Operations
expenditures will be increase due to the building's opening.
• Other Operating
The major portion of this increase is due to graduation expenditures and anticipated IB
training for approximately 30 teachers.
• Debt Service
Two lease payments were made during FY 08-09.
• General Fund operation spending per student decreased in the 2010 budget from $8,894 to $8,283.
This 6%decrease can be attributed to several factors:
• Additional 56 students for FY 2009-2010
• Academy's core staff was already in place and only a few additional staff members were
necessary. None of these positions are supported by additional student funds and the
additional employees do not bring an increase in student numbers.
1.00 Primary-Strings/Special Ed Aide
3.00 Secondary—Classroom Teachers
1.00 Information Technology Coordinator
0.50 Office Staff
• ARRA Title XIV SFSF funds are being used for 1.5 positions for FY 09-10.
• Head of School position was eliminated.
• Less contracted services anticipated for FY 09-10.
• Only one debt service payment scheduled for FY 09-10.
• If the FY 2009-2010 budget estimates are realized, the Academy's General Fund's budgetary fund
balance is expected to increase by$154,836 by the close of FY 2010.
ACHIEVEMENTS DURING FISCAL YEAR 2008-2009:
• Offered the Diploma Programme (DP) for the first year making the Academy the only school in Texas to serve
students in all three sections of the IB: Primary Years Program (PYP), Middle Years Programme (MYP) and
Diploma Programme
• Offered two areas of concentration for the DP Students: Arts&Sciences
• Hosted Grade 5 students visiting from Monterrey,Mexico
• Increased the number of sports teams during FY 2008-09 introducing baseball for the first time
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• The "Black Cow" was again named one of the top school newspapers and won 55 awards a the annual UIL
Journalism competition
• Offered a Math&Science team and Word Masters teams
• Continued residential trips for students which included a trip to Puerto Rico for students in G10
• Offered many service projects throughout the school including a project to help students in Sierra Leone
• Held the first "Think Pink Westlake" to promote breast cancer awareness and support for the Susan G. Komen
Foundation
• A faculty member was selected to be a leader in the People to People program and travelled abroad with a group of
teenagers
• IBO Candidate school continued to visit the Academy to use a model for their own schools
• Joined the Texas Charter School Association
• Westlake Academy is in the top 7%of Texas Charter Schools
• Students continue to score very high with many scoring at the post High School level on the Stanford Achievement
Tests
• Twenty-nine students who co-authored a book won a national award for the Education/Academy category of the
Next Generation Indie Book Awards
• MYP Students competed in the GEMUN(Global Elementary United Nations)competition
• Two students received awards for their entries in the TSCA Human Rights Art Contest
• One student won a trip to Washington DC sponsored by the Odd Fellows Organization
• One student accepted into Stanford's summer program
• Several students received recognition for their high scores on the SAT
• Offered the Princeton Review for upper level students
• Offered A/P Exams for upper level students
• Several Academy athletes won district level awards
• A student was featured nationally and will have a feature in a national fashion magazine for her design work and
personal blog
• A G11 student won an award for his community service benefiting the American Cancer Society
• Began compilation of Board of Trustee's Policy Manual and pursued board governance training
• Broke ground and completed the Sam and Margaret Lee Arts&Sciences Center
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.
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EXHIBIT A-1
WESTLAKE ACADEMY
STATEMENT OF NET ASSETS
AUGUST 31,2009
1 4
Primary
Government Component Unit
Data
Control Governmental WA
Codes Activities Foundation
ASSETS
1110 Cash and Cash Equivalents $ 339,437 $ 1,270,631
1120 Current Investments 159,289 -
1240 Due from Other Governments 106,188 -
1290 Other Receivables,net 3,385 281,798
1410 Deferred Expenses 22,636 -
1000 Total Assets 630,935 1,552,429
LIABILITIES
2110 Accounts Payable 43,393 26,344
2150 Payroll Deductions&Withholdings 1,759 -
2160 Accrued Wages Payable 70,021 -
2200 Accrued Expenses 1,950 -
2300 Deferred Revenues 9,159 5,901
Noncurrent Liabilities
2501 Due Within One Year 38,703 -
2000 Total Liabilities 164,985 32,245
NET ASSETS
3890 Restricted for Other Purposes 22,636 1,494,982
3900 Unrestricted Net Assets 443,314 25,202
3000 Total Net Assets $ 465,950 $ 1,520,184
The notes to the financial statements are an integral part of this statement.
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WESTLAKE ACADEMY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED AUGUST 31,2009
Program Revenues
Data 1 3 4
Control Operating
Charges for Grants and
Codes Expenses Services Contributions
Primary Government:
GOVERNMENTAL ACTIVITIES:
11 Instruction $ 2,120,372 $ - $ 204,335
12 Instructional Resources and Media Services 62,513 - 2,777
13 Curriculum and Instructional Staff Development 36,973 - 4,350
21 Instructional Leadership 11,660 - 457
23 School Leadership 179,554 - 10,998
31 Guidance,Counseling and Evaluation Services 163,575 - 4,230
33 Health Services 58,845 - 2,771
35 Food Services 15,448 6,339 766
36 Extracurricular Activities 111,738 - 2,606
41 General Administration 527,000 - 16,832
51 Plant Maintenance and Operations 279,485 - -
53 Data Processing Services 88,720 - 4,282
61 Community Services 66,822 49,136 4,269
72 Debt Service-Interest on Long Term Debt 4,054 - -
[TP] TOTAL PRIMARY GOVERNMENT: $ 3,726,759 $ 55,475 $ 258,673
Component Unit:
1C Nonmajor Component Unit $ 585,473 $ - $ 957,944
[TC] TOTAL COMPONENT UNIT: $ 585,473 $ - $ 957,944
Data ----- - --
Control General Revenues:
Codes Taxes:
GC Grants and Contributions not Restricted
IE Investment Earnings
M1 Miscellaneous Local and Intermediate Revenue
FR Transfers In(Out):
TR Total General Revenues and Transfers
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.
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EXHIBIT B-1
Net(Expense)Revenue and
Changes in Net Assets
6 9
Primary Government Component Unit
Governmental WA
Activities Foundation
$ (1,916,037) $ -
(59,736) -
(32,623) -
(11,203) -
(168,556) -
(159,345) -
(56,074) -
(8,343) -
(109,132) -
(510,168) -
(279,485) -
(84,438) -
(13,417) -
(4,054) -
(3,412,611) -
372,471
- 372,471
2,960,590 -
4,617 10,358
478,900 -
(200,000) -
3,244,107 10,358
(168,504) 382,829
634,454 1,137,355
$ 465,950 $ 1,520,184
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EXHIBIT C-1
WESTLAKE ACADEMY
BALANCESHEET
GOVERNMENTAL FUNDS
AUGUST 31,2009
Data
Control 10 Total
Codes General Other Govenunental
Fund Funds Funds
ASSETS
1110 Cash and Cash Equivalents $ 339,274 $ 163 $ 339,437
1120 Investments-Current 159,289 - 159,289
1240 Due from Other Governments 99,168 7,020 106,188
1260 Due from Other Funds 7,020 - 7,020
1290 Other Receivables 3,385 - 3,385
1410 Deferred Expenditures 22,636 - 22,636
1000 Total Assets $ 630,772 $ 7,183 $ 637,955
LIABILITIES AND FUND BALANCES
Liabilities:
2110 Accounts Payable $ 43,230 $ 163 $ 43,393
2150 Payroll Deductions and Withholdings Payable 1,759 - 1,759
2160 Accrued Wages Payable 70,021 - 70,021
2170 Due to Other Funds - 7,020 7,020
2200 Accrued Expenditures 1,950 - 1,950
2300 Deferred Revenues 9,159 - 9,159
2000 Total Liabilities 126,119 7,183 133,302
Fund Balances:
Reserved For:
3430 Prepaid Items 22,636 - 22,636
Unreserved and Undesignated:
3600 Reported in the General Fund 482,017 - 482,017
3000 Total Fund Balances 504,653 - 504,653
4000 Total Liabilities and Fund Balances $ 630,772 $ 7,183 $ 637,955
The notes to the financial statements are an integral part of this statement.
15
EXHIBIT C-2
WESTLAKE ACADEMY
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETS
AUGUST 31,2009
Total Fund Balances-Governmental Funds $ 504,653
1 Long-term debt principal payments are expenditures in the fund financial statements, (38,703)
but they should be shown as reductions in long-term debt in the government-wide
financial statements. The net effect of including the 2009 debt principal payments is to
decrease net assets.
19 Net Assets of Governmental Activities $ 465,950
t
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w
The notes to the financial statements are an integral part of this statement. s
16
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C
EXHIBIT C-3
WESTLAKE ACADEMY
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE
GOVERNMENTALFUNDS
FOR THE YEAR ENDED AUGUST 31,2009
Data 10 Total
Control General Other Goverrunental
Codes Fund Funds Funds
REVENUES:
5700 Total Local and Intermediate Sources $ 538,992 $ - $ 538,992
5800 State Program Revenues 3,122,653 40,476 3,163,129
5900 Federal Program Revenues - 56,134 56,134
5020 Total Revenues 3,661,645 96,610 3,758,255
EXPENDITURES:
Current:
0011 Instruction 2,028,112 92,260 2,120,372
0012 Instructional Resources and Media Services 62,513 - 62,513
0013 Curriculum and Instructional Staff Development 32,623 4,350 36,973
0021 Instructional Leadership 11,660 - 11,660
0023 School Leadership 179,554 - 179,554
0031 Guidance,Counseling and Evaluation Services 163,575 - 163,575
0033 Health Services 58,845 - 58,845
0035 Food Services 15,448 - 15,448
0036 Extracurricular Activities 111,738 - 111,738
0041 General Administration 527,000 - 527,000
0051 Facilities Maintenance and Operations 279,485 - 279,485
0053 Data Processing Services 88,720 - 88,720
0061 Community Services 66,822 - 66,822
Debt Service:
0071 Debt Service-Principal on Long Term Debt 78,937 - 78,937
0072 Debt Service-Interest on Long Term Debt 4,054 - 4,054
6030 Total Expenditures 3,709,086 96,610 3,805,696
1100 Excess(Deficiency)of Revenues Over(Under) (47,441) - (47,441)
Expenditures
OTHER FINANCING SOURCES(USES):
7913 Capital Leases 117,640 - 117,640
8949 Other(Uses) (200,000) - (200,000)
7080 Total Other Financing Sources(Uses) (82,360) - (82,360)
1200 Net Change in Fund Balances (129,801) - (129,801)
0100 Fund Balance-September 1 (Beginning) 634,454 - 634,454
3000 Fund Balance-August 31 (Ending) $ 504,653 $ - $ 504,653
The notes to the financial statements are an integral part of this statement.
17
EXHIBIT C-4
WESTLAKE ACADEMY
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED AUGUST 31,2009
Total Net Change in Fund Balances- Governmental Funds $ (129,801)
Long-term debt principal payments are expenditures in the fund financial statements, (38,703)
but they should be shown as reductions in long-term debt in the government-wide
financial statements. The net effect of removing the 2009 debt principal payments is to
decrease net assets.
Change in Net Assets of Governmental Activities $ (168,504)
The notes to the financial statements are an integral part of this statement.
18
EXHIBIT D-1
WESTLAKE ACADEMY
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
AUGUST 31,2009
Agency
Fund
ASSETS
Cash and Cash Equivalents $ 37,983
Other Receivables 42
Total Assets 38,025
LIABILITIES
Accounts Payable $ 146
Due to Student Groups 37,879
Total Liabilities 38,025
The notes to the financial statements are an integral part of this statement.
19
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31,2009
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 five 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 governmental entity that is controlled by or
dependent on the Academy. The determination to include separate governmental 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 II F 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)
20
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 are reported using 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)
21
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
C. Measurement Focus,Basis of Accountinu 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.
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.
D. Other Accounting Policies
1. 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.
2. 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.
3. The Academy provides health insurance for its employees through TRS-Active-Care. The
Academy meets its obligations for workers' compensation insurance through Utica National
Insurance Group.
4. In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for
use for a specific purpose. Designations of fund balance represent tentative management
plans that are subject to change.
5. When the Academy incurs an expense for which it may use either restricted or unrestricted
assets, it uses the restricted assets first unless unrestricted assets will have to be returned
because they were not used.
(continued)
22
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
D. Other Accounting Policies(Continued)
6. 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.
During fiscal year 2009, the Academy purchased commercial insurance to cover general
liabilities. There were no settlements exceeding insurance coverage in the current fiscal year.
7. During the year ended August 31,2009,employees of the Academy were covered by a health
insurance plan(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.
8. The Data Control Codes refer to the account code structure prescribed by TEA in the
Financial Accountability System Resource Guide. Texas Education Agency 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 plans.
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 31,2009,the carrying amount of the Academy's deposits (cash, certificates of deposit, and interest-
bearing savings accounts included in temporary investments)was$377,420 and the bank balance was$416,767.
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, 2009, was $159,289 (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.
(continued)
23
II. DETAILED NOTES ON ALL FUNDS (Continued)
A. Deposits and Investments (Continued)
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, 2009, 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.
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, 2009, 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, 2009, 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 $ 99,168 $ - $ 99,168
Special revenue 7,020 - 7,020
Total $ 106,188 $ - $ 106,188
(continued)
24
II. DETAILED NOTES ON ALL FUNDS (Continued)
C. Revenue from Local and Intermediate Sources
During the current year, revenues from local and intermediate sources as reported on Exhibit C-2 of the fund
statements consisted of the following:
General Fund
Gifts and bequests $ 478,899
Food sales 6,339
Interest 4,617
Miscellaneous 49,137
Total $ 538,992
D. 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.
E. Debt Service Requirements—Capital Leases
Date of Issue- Description& Interest Current Year Current Year Lease Balance
Maturity Lawful Authority Rate Principal Paid Interest Paid End of Year
09/08 -07/10 Apple Computers 7.22% $ 78,937 $ 4,054 $ 38,703
$ 78,937 $ 4,054 $ 38,703
Future requirements for capital leases are as follows:
August 31, Principal Interest Requirements
2010 $ 38,703 $ 2,793 $ 41,496
Total $ 38,703 $ 2,793 $ 41,496
(continued)
25
II. DETAILED NOTES ON ALL FUNDS (Continued)
F. 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 31,2009.
Condensed Statement of Net Assets
Assets
Cash and cash equivalents $ 1,270,631
Other assets,net 281,798
Total assets 1,552,429
Liabilities 32,245
Net assets
Temporarily restricted 1,494,982
Unrestricted 25,202
Total net assets $ 1,520,184
Statement of Activities
Revenues Expenses Total
Gallery night $ 111,067 $ 22,232 $ 88,835
Apprentice sponsors 429,306 437,289 ( 7,983)
Capital campaign 403,646 51,585 352,061
Endowment 300 - 300
Golf tournament 12,500 246 12,254
Miscellaneous 1,125 - 1,125
Interest 10,358 - 10,358
Management and general - 74,121 ( 74,121)
Totals $ 968,302 $ 585,473 382,829
Beginning net assets 1,137,355
Ending net assets $ 1,520,184
The Foundation contributed$437,289 to the Academy during the fiscal year ended August 31,2009.
(continued)
26
II. DETAILED NOTES ON ALL FUNDS(Continued)
F. Defined Benefit Pension Plan
Plan Description. The 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 writing to the TRS Communications Department, 1000
Red River Street,Austin,Texas 78701,by calling the TRS Communications Department at 1-800-223-8778,or
by downloading the report from the TRS Internet website, www.trs.state.tx.us, under the TRS Publications
heading.
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, 2008 and 2007,and a state contribution rate of 6.58%for fiscal years 2009 and 2008 and 6.0%for fiscal
year 2007. In certain instances the reporting district is required to make all or a portion of the state's 6.58%
contribution for fiscal years 2009 and 2008 and 6.00%for fiscal year 2007. State contributions to TRS made on
behalf of the Westlake Academy's employees for the years ended August 31, 2009, 2008 and 2007 were
$162,063,$149,090,and$108,131,respectively.
G. Retiree Health Plan
Plan Description. The Westlake Academy contributes to the Texas Public School Retired Employees Group
Insurance Program (TRS-Care), a cost-sharing multiple-employer defined benefit post-employment health care
plan administered by the Teacher Retirement System of Texas. TRS-Care Retired Plan 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 TRS 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,by writing to the Communications Department of the Teacher Retirement System of Texas
at 1000 Red River Street,Austin,Texas 78701,or by calling 1-800-223-8778.
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, 2008, and 2007. 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 31,2009,2008, and 2007,the
State's contributions to TRS-Care were $42,261, $42,360, and $40,870, respectively, the active member
contributions were $27,470, $27,534, and $26,566, respectively, and the school district's contributions were
$23,244,$23,298,and$22,479,respectively,which equaled the required contributions each year.
(continued)
27
II. DETAILED NOTES ON ALL FUNDS (Continued)
H. 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$7,494 and $6,633 were recognized for the years ended August 31, 2009 and
2008,respectively,as equal revenues and expenditures.
I. Estimates
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,
2009,will change.
J. 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. The Town and Academy deny liability. The lawsuit is being
handled by the Academy's insurance carrier and no additional liability to the Academy is anticipated.
28
EXHIBIT E-1
WESTLAKE ACADEMY
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL-GENERAL FUND
FOR THE YEAR ENDED AUGUST 31,2009
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 $ 540,212 $ 581,355 $ 538,992 $ (42,363)
5800 State Program Revenues 3,083,016 3,089,953 3,122,653 32,700
5020 Total Revenues 3,623,228 3,671,308 3,661,645 (9,663)
EXPENDITURES:
Current:
0011 Instruction 1,904,004 2,038,876 2,028,112 10,764
0012 Instructional Resources and Media Services 71,106 62,984 62,513 471
0013 Curriculum and Instructional Staff Development 29,870 50,250 32,623 17,627
0021 Instructional Leadership 6,548 7,851 11,660 (3,809)
0023 School Leadership 211,426 185,115 179,554 5,561
0031 Guidance,Counseling and Evaluation Services 150,804 166,437 163,575 2,862
0033 Health Services 57,448 60,191 58,845 1,346
0035 Food Services 22,821 15,864 15,448 416
0036 Extracurricular Activities 84,990 120,155 111,738 8,417
0041 General Administration 484,560 535,743 527,000 8,743
0051 Facilities Maintenance and Operations 272,135 278,345 279,485 (1,140)
0053 Data Processing Services 90,967 89,185 88,720 465
0061 Community Services 67,062 65,136 66,822 (1,686)
Debt Service:
0071 Debt Service-Principal on Long Term Debt 42,000 78,413 78,937 (524)
0072 Debt Service-Interest on Long Term Debt - 4,578 4,054 524
6030 Total Expenditures 3,495,741 3,759,123 3,709,086 50,037
1100 Excess(Deficiency)of Revenues Over 127,487 (87,815) (47,441) 40,374
Expenditures
OTHER FINANCING SOURCES(USES):
7913 Capital Leases - 124,487 117,640 (6,847)
8949 Other(Uses) - (212,500) (200,000) 12,500
7080 Total Other Financing Sources(Uses) - (88,013) (82,360) 5,653
1200 Net Change in Fund Balances 127,487 (175,828) (129,801) 46,027
0100 Fund Balance-September 1 (Beginning) 558,236 634,454 634,454 -
3000 Fund Balance-August 31 (Ending) $ 685,723 $ 458,626 $ 504,653 $ 46,027
29
WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
AUGUST 31,2009
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 31,2009,expenditures exceeded appropriations in the following functions:
Instructional Leadership, Facilities Maintenance and Operations and Community Services. The
functions that exceeded appropriations were funded by other various functions that were under
budgeted.
30
WESTLAKE ACADEMY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
AUGUST 31,2009
224 225 397 411
Data Advanced
Control IDEA-Part B IDEA-Part B Placement Technology
Codes Formula Preschool Incentives Allotment
ASSETS
1110 Cash and Cash Equivalents $ - $ - $ - $ 163
1240 Due from Other Governments - - - -
1000 Total Assets $ - $ - $ - $ 163
LIABILITIES AND FUND BALANCES
Liabilities:
2110 Accounts Payable $ - $ - $ - $ 163
2170 Due to Other Funds - - - -
2000 Total Liabilities - - - 163
4000 Total Liabilities and Fund Balances $ _ $ _ $ - $ 163
31
EXHIBIT F-1
428 429 Total
Nonmajor
High School Read to Governmental
Allotment Succeed Funds
$ - $ - $ 163
7,020 - 7,020
$ 7,020 $ - $ 7,183
163
7,020 - 7,020
7,020 - 7,183
$ 7,020 $ - $ 7,183
32
WESTLAKE ACADEMY
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31,2009
224 225 397 411
Data Advanced
Control IDEA-Part B IDEA-Part B Placement Technology
Codes Formula Preschool Incentives Allotment
REVENUES:
5800 State Program Revenues $ - $ - $ 4,350 $ 11,332
5900 Federal Program Revenues 55,952 182 - -
5020 Total Revenues 55,952 182 4,350 11,332
EXPENDITURES:
Current:
0011 Instruction 55,952 182 - 11,332
0013 Curriculum and Instructional Staff Development - - 4,350
6030 Total Expenditures 55,952 182 4,350 11,332
1200 Net Change in Fund Balance - - -
0100 Fund Balance- September 1 (Beginning) - - -
3000 Fund Balance-August 31 (Ending) $
33
EXHIBIT F-2
428 429 Total
Nonmajor
High School Read to Governmental
Allotment Succeed Funds
$ 24,750 $ 44 $ 40,476
- - 56,134
24,750 44 96,610
24,750 44 92,260
- - 4,350
24,750 44 96,610
34
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, 2009, which collectively comprise the Academy's basic financial statements and have
issued our report thereon dated November 30,2009. 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 Reporting
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.
35
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
WHITNEY,TX(254)694-46000 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.
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November 30,2009
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