HomeMy WebLinkAboutRes 07-12 WA Approving FY 2006-2007 Audit from Stovall, Gradey and Allen LLP WESTLAKE ACADEMY
RESOLUTION NO. 07-12
A RESOLUTION OF THE BOARD OF TRUSTEES OF THE WESTLAKE
ACADEMY TO APPROVE THE FISCAL YEAR 2006/2007 ANNUAL AUDIT
REPORT FROM STOVALL, GRANDEY & ALLEN, 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
THE WESTLAKE ACADEMY:
SECTION 1: That the Board of Trustees of Westlake Academy does hereby
approve the fiscal year 2006/2007 annual audit report from Stovall, Grandey & AlIen,
LLP.
SECTION 2: That this Resolution shall become effective upon the date of its
passage.
PASSED AND APPROVED ON THIS 10th DAY OF DECEMBER, 2007.
Scott Bradley, President
ATTEST:
K Sut er, TRMC, Secretary /Barbara Brizue a, Head of School
APPROVED AS TO FORM:
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L. Stanton Lowry, School Attorney
November 13,2007
CMA
S101-all Grad!.}• :I!!ru a-r. To the Board of Trustees
Westlake Academy
iOO\k'' ''s« We have audited the financial statements of Westlake Academy (the "Academy') for the
silk,,900 year ended August 31, 2007, and have issued our report thereon dated October 25, 2007.
Professional standards require that we provide you with the following information related to
our audit.
Vholw
Fax r[- s ra Our Responsibilitv Under U.S.Generally Accepted Auditing Standards
"`"ga—cf"".t"m As stated in our engagement letter dated June 15, 2007, our responsibility, as described by
professional standards, is to plan and perform our audit to obtain reasonable, but not
absolute, assurance that the financial statements are free of material misstatement and are
fairly presented in accordance with accounting principles generally accepted in the United
States of America. Because an audit is designed to provide reasonable, but not absolute
assurance and because we did not perform a detailed examination of all transactions,there is
a risk that material misstatements may exist and not be detected by us.
As part of our audit, we considered the internal control of the Academy. Such
considerations were solely for the purpose of determining our audit procedures and not to
provide any assurance concerning such internal control.
Si ificant Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. In
accordance with the terms of our engagement letter, we will advise management about the
appropriateness of accounting policies and their application. The significant accounting
policies used by the Academy are described in Note I to the financial statements. No new
accounting policies were adopted and the application of existing policies was not changed
during 2006-2007. We noted no transactions entered into by Westlake Academy during the
year that were both significant and unusual, and of which, under professional standards, we
are required to inform you, or transactions for which there is a lack of authoritative guidance
or consensus.
Accounting_Estimates
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. No significant estimates were noted during the current year.
Audit Adjustments
For purposes of this letter,professional standards define an audit adjustment as a proposed
correction of the financial statements that, in our judgment, may not have been detected
except through our auditing procedures. An audit adjustment may or may not indicate
matters that could have a significant effect on the Academy's financial reporting process
(that is, cause future financial statements to be materially misstated). See attached schedule
for a complete listing of all adjusting journal entries. The Academy has approved all
proposed audit adjustments. There were no proposed audit adjustments that were not
recorded by the Academy.
Westlake Academy
November 13, 2007
Page 2
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or
not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be
significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements
arose during the course of our audit.
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 auditor's 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.
Issues Discussed Prior to Retention of Independent Auditors
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 Academy's auditors. However, these discussions occurred in
the normal course of our professional relationship and our responses were not a condition to our retention.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing our audit. This information is
intended solely for the use of the Board of Trustees and management of the Academy and is not intended to be and
should not be used by anyone other than these specified parties.
Very truly yours,
ALP
STOVALL, GRANDEY&ALLEN, LLP
Fort Worth, Texas
Adjusting Entries By Entry Number
FY 2407
Westlake Academy 121412007
Adjusting Entries Must
Adjustment be Approved by District.
Account Number Debit Credit APPROVED BY:
Adlusting Entry. Number: 1 T�
199 -41 -6211 -00 -701 -7 -99 -000 1,031.25
199 -41 -6499 -00 -701 -7 -99 -000 148.00
199 -41 -6399 -00 -701 -7 -99 -000 209.06
199 -51 -6319 -00 -001 -7 -99 -000 69.90
199 -51 -6319 -00 -001 -7 -99 -000 39.17
199 -51 -6319 -00 -001 -7 -99 -000 245.82
199 -51 -6256 -00 -001 -7 -99 -000 6,926.00
199 -51 -6256 -00 -001 -7 -99 -000 7,751.88
199 -51 -6257 -00 -001 -7 -99 -000 737.50
199 -51 -6249 -00 -001 -7 -99 -000 360.00
199 -00-2123 -00 -000 -7 -00 -000 (17,518,58)
17,518.58 (17,518.58)
Remarks: Accrued A1P given to us by the client upon arrival.
Adiustin Ent Nurnber: 2 L
199 -00-1411 -00 -000 -7 -00 -000 1,224.97
199 - 11 -6143 -00 -001 -7 -11 -000 (1,224.97)
1,224.97 (1,224.97)
Remarks: Proposed AJE from client to clear prepaids.
kdiusting Entu Number: 3
199 -00-1290 -00 -000 -7 -00 -000 1,352.00
199 -00-5744 -01 -000 -7 -00 -000 (1,352.00)
1,352.00 (1,352.00)
Remarks: Journal Entry received from client to book additional receivable from the Blacksmith Apprentice
Program,
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Adjustments to Worksheet by Adjustment Number
FY 2007
Westlake academy 121412007
Adjustments Must be
Control Adjustment approved by District.
Code Control Description Debit Credit APPROVED BY:
Adjustment Number: 7 Column: Reclassifications
3600 Unreserved Fund Balance-General Fund 674,524.00
3900 Unrestricted Net Assets (674,524.00)
3430 Prepaid Items 17,216.00
3870 Restricted for Prepaid Expenses (17,216.00)
691,740.00 (691,740.00)
Remarks: To reclass fund balance
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WESTLAKE ACADEMY
(A COMPONENT UNIT OF
THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
AUGUST 31;2007
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WA Resolution 07-12
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WESTLAKE ACADEMY
(A COMPONENT UNIT OF THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31,2007
Page
Certificateof Board........................................................................................................ i
Independent Auditor's Report.........................................................................................
Management's Discussion and Analysis.......................................................................... iv
Basic Financial Statements
Government Wide Statements:
A-1 Statement of Net Assets.................................................................................................. 1
B-1 Statement of Activities.................................................................................................... 2
Governmental Fund Financial Statements:
C-1 Balance Sheet.........................
4
C-2 Statement of Revenues,Expenditures, and Changes in Fund Balance............................... 5
D-1 Statement of Fiduciary Net Assets .................................................................................. 6
Notes to the Basic Financial Statements.......................................................................... 7
Required Su lenient Information
G-1 Schedule of Revenues,Expenditures and Changes in Fund Balance
Budget and Actual—General Fund........................................................................... 15
Notes to the Required Supplementary Information.......................................................... 16
Combining Statements
H-1 Combining Balance Sheet............................................................................................... 17
H-2 Combining Statement of Revenues,Expenditures and Changes in
Fund Balance—Non Major Governmental Funds..................................................... 19
Overall Compliance and Internal Controls Section
j 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.................................................... 21
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CERTIFICATE OF BOARD
WESTLAKE ACADEMY TARRANT 220-810
Name of School County Co.-Dist.Number
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We, the undersigned, certify that the attached annual financial reports of the above-named school were reviewed and
(check one) '� approved disapproved for the year ended August 31,2007 at a meeting of the
Board of Trustees of such school on the '' day of __12007,
{
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!/iat.ure of oard Secretary Signature of B and President
P
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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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FINANCIAL SECTION
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INDEPENDENT AUDITOR'S REPORT
' Voi,all Grandell,c.-lllrrr af,
j To the Board of Trustees of
Westlake Academy
2650 7.T. Ottinger Road
j 5111 W'°'S`r" Westlake,Texas 76262
' Side•9utl
n 1 o 1_j-(J? Members of the Board:
iNlmi„ 'U-4,32-25011 We have audited the accompanying financial statements of the governmental activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund
----- information of the Westlake Academy(the"Academy") as of and for the year ended August
31, 2007 which collectively comprise the Academy's basic financial statements as listed in
the table of contents. These financial statements are the responsibility of the Academy's
management. Our responsibility is to express an opinion on these basic financial statements
j 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 basic financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the
basic financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall basic
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 government activities, the discretely
presented component unit,each major fund, and the aggregate remaining fund information of
the Academy as of August 31, 2007, and the respective changes in financial position and,
where applicable, cash flows thereof, 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
October 25, 2007 on our consideration of the Academy's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations,
contracts, and grants 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 (on pages iv through x) and the Budgetary
Comparison Schedule-General Fund (on page 15) 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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i_EACH t'fr•.[l 1'LWLk,: ACC(ouN'L'AN I'S ICI-JSJN17SS M)VISAIRs
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the Academy's basic financial statements. The combining fiord financial 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.
�. , LLB
STOVALL, GRANDEY&ALLEN, LLP
Fort Worth,Texas
October 25,2007
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WESTLAKE ACADEMY
MANAGEMENT'S DISCUSSION AND ANALYSIS
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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, 2007. Please read it in conjunction
with the Academy's financial statements,which follow this section.
FINANCIAL HIGHLIGHTS
e On the government-wide financial statements, the assets of the Academy exceeded liabilities by$691,740
(Net Assets). This is an increase of$264,020 for the year ended August 31, 2007.
e The Academy had $2,672,698 in expenses related to governmental activities of which $250,665 of these
expenses were offset by program-specific charges for services or grants and contributions. This is a total
expense increase of$422,700 over the prior year.
• The General Fund reported a fund balance this year of$691,740, an increase of$264,020 from the prior
year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts management's discussion and analysis(this section), the basic financial
statements,and required supplementary information. The basic financial statements include two kinds of statements
that present different views of the Academy;
Figure A-1.Required Components of
e The first two statements are government-wide financial the Academy's Annual Financial
statements that provide both long-term and short-term Report
information about the Academy's overall financial status. -----------------
, A
• The remaining statements are fund financial statements that
focus on individual arts of the government, reporting the 79"""�e°cw'a Basic Required
p g p g arcaaa:otw Financial Supplementary
Academy's operations in more detail than the government- Statements Information
wide statements.
The governmental fiords statements tell how general
government services were financed in the short-term
as well as what remains for future spending.
-------------------
The financial statements also include notes that explain some of the r
information in the financial statements and provide more detailed data.
The statements are followed by a section of required supplementary Gouernmen nand �tk
FinanCtal Financial tµtk
information that further explains and supports the information in the statements Statements 71i12nuae
financial statements. Figure A-1 shows how the required parts of this stRtrtt
annual report are arranged and related to one another.
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Summary r' Detail
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Government-wide Statements,continued
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 2007,the Foundation contributed approximately$399,000 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 31,2007.
• Governmental funds Most of the Academy's basic services are included in govermmental 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 explains the relationship(or differences)between them.
• Proprietary funds–(None at August 31, 2007) 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.
• 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.
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Table A-3
Changes in Westlake Academy's Net Assets
(in thousands of dollars)
Governmental Activities Component Unit Activities Combined Totals
2007 2006 2007 2006 2007 2006
Revenues:
Program revenues:
Charges for services $ 86 $ 98 $ - $ - $ 86 $ 98
Operating grants and
contributions 165 132 1,108 536 1,273 668
General revenues:
Grants and contributions
not restricted 2,259 1,822 - 2,259 1,822
Miscellaneous revenue 426 394 11 64 437 458
Total revenues 2,936 2,446 1,119 600 4,055 3,046
Expenses:
Instruction&instructional
Related 1,743 1,484 - - 1,743 1,484
Instructional
leadership/school
administration 226 276 - - 226 276
Guidance,social work,
health,transportation 68 67 - - 68 67
Food services 84 83 - - 84 83
Extracurricular activities 53 44 - - 53 44
General administration 219 85 - - 219 85
Plant maintenance&
security 195 167 - - 195 167
Data processing services 68 42 - - 68 42
Community services 16 2 - - 16 2
Program/support services - - 742 473 742 473
Total expenses 2,672 2,250 742 473 3,414 2,723
Increase in net assets 264 196 377 127 641 323
Beginning net assets 428 232 174 47 602 279
Ending net assets $ 692 $ 428 $ 551 $ 174 $ 1,243 $ 602
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 all governmental activities this year was$2,672,698.
• Some of the cost was paid by those who directly benefited from the programs,$85,925.
• By grants and contributions$164,740.
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ACHIEVEMENTS DURING FISCAL YEAR 2006-2007:
• The Middle Year Program (MYP) received IBO Authorization, making the Academy the only school in
Texas to have both PYP and MW programs.
• The Diploma Program application was approved and the authorization visit is scheduled during the fall of
2007.
• Maintained TEA Recognized rating.
• Gold Medalist School in 7 out of 8 possible categories: Reading, Writing, Math, Science, Social studies,
Improvement in Reading and Attendance.
• Held second student exchange visit with Greengates School in Mexico, doubling the number of Westlake
Academy students participating.
• Increased the number of sports teams during FY 2006-2007.
• Organized WAAC—Westlake Academy Athletic Club.
• The"Black Cow"was again named one of the top school newspapers and won 28 awards at the annual UIL
conference.
• A G8 student was awarded one of the few Honorable Mentions in the National DuPont Science Essay
Competition.
• Increased the number of residential field trips and made one of them a service project.
• Increased the number and scope of student initiated service projects.
• One of the Academy's teachers was selected to become an D30 Workshop Leader and Site Visitor. She was
also asked to become one of only 3 Online Curriculum Faculty members to answer questions from
practitioners around the world on theory and practice.
• A faculty member was selected to be a faculty member of People to People and traveled to New Zealand
and Australia with a group of teenagers.
• IBO/PYP Candidate schools are being sent to visit Westlake Academy as a model.
• Twenty-two teachers have attended advanced IBO workshops during the last 12 months.
• Five municipalities have visited the school, interested in copying our model.
• Westlake Academy is among the 14 highest performing Texas Charter Schools.
• On the Standard Achievement Tests,Westlake Academy students, on an average (i.e., including the lowest
performing students)scored 2.8-4.8 grade levels above that in which they tested.
• Westlake Academy was named to the TBEC (Texas Business and Education Coalition) Honor Roll of top
performing schools.
• MYP Students competed in and won awards at the MUN(Model United Nations)competition.
• Honored by the Junior Historians of Texas.
• The waiting list continues to grow, 1,100 students to date.
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 ##3 Village Circle, Suite 202,
Westlake,TX 76262.
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BASIC FINANCIAL STATEMENTS
WESTLAKE ACADEMY EXHIBIT A-1
STATEMENT OF NET ASSETS
AUGUST 31, 2007
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Primary
Data Government Component Unit
Control
Codes
Governmental WA
Activities Foundation
ASSETS
1110 Cash and Cash Equivalents $ 184,229 $ 225,338
1120 Current Investments 485,943
1240 Due from Other Governments 75,743
1270 Due from Component Unit 12,441
1280 Other Receivable 246
1290 Pledges Receivables,net - 338,605
1410 Prepaid Expenditures 17,216
1000 Total Assets 775,572 564,184
LIABILITIES
2120 Accounts Payable 60,482
2160 Accrued Wages Payable 22,716
2180 Due to Academy - 12,441
2200 Accrued Expenses 634 663
2000 Total Liabilities 83,832 13,104
NET ASSETS
Restricted for;
3870 Restricted for Prepaid Expenditures 17,216
3890 Restricted for Other Purposes - 523,612
3900 Unrestricted Net Assets 674,524 27,473
3000 Total Net Assets $ 691,740 $ 551,085
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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 31,2007
Program Revenues
Data 1 3 4
Control Operating
Codes Charges for Grants and
Expenses Services Contributions
Primary Government:
GOVERNMENTAL ACTIVITIES:
11 Instruction $ 1,652.345 $ 904 $ 135,611
12 Instructional Resources and Media Services 59,039 - 3,114
13 Curriculum and Instructional Staff Development 32.136 - 2,285
21 Instructional Leadership 9,190 - 546
23 School Leadership 216.472 - 11.632
31 Guidance,Counseling and Evaluation Services 41,988 - 1,563
33 Health Services 25.512 - 1,106
35 Food Services 84,484 67,166 621
36 Cocurricular/Extracurricular Activities 53,463 2,052 704
41 General Administration 218.670 _ 6,073
51 Plant Maintenance and Operations 195,264 -
53 Data Processing Services 68,177 - 1,333
61 Community Services 15.958 15,803 155
[TP] TOTAL PRIMARY GOVERNMENT: $ 2,672,698 $ 85,925 S 164,740
Component Unit:
IC Major Component Unit $ 741,930 $ - $ 17119,013
[TC] TOTAL COMPONENT UNIT: $ 7419930 $ $ 1,119,013
Data
Control General Revenues:
Codes
Taxes:
SF State Aid-Fonnula Grants
lE Investment Earnings
Ml Miscellaneous Local and Intennediate Revenue
TR Total General Revenues
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
Nei(Expense)Revenue and
Changes in Net Assets
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Primary Government Component Unit
Governmental WA
Activities Foundation
$ (1,515,830) $
(55.925)
(29,851) -
(8,644)
(204.840)
(40,425)
(24,406)
(16.697)
(50,707)
(212,598)
(195.264)
(66,844) _
(27422,033)
377,083
377,083
2,259,643 _
23,644 _
402,766 _
2,686,053
264,020 377,083
427.720 174,002
$ 691,740 $ 551,085
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WESTLAKE ACADEMY EXHIBIT C-1
BALANCESHEET
GOVERNMENTAL FUNDS
AUGUST 31,2007
Data
Control 10 Special Total
Codes General Revenue Governmental
Fund Funds Funds
ASSETS
1110 Cash and Cash Equivalents $ 180,599 $ 3,630 $ 184,229
1120 Investments 485,943 - 485,943
1240 Due from Other Governments 75,178 565 75,743
1270 Due from Component Unit 12,441 - 12,441
1410 Prepaid Expenditures 17,216 - 17,216
1000 Total Assets $ 771,377 $ 4,195 $ 775,572
LIABILITIES AND FUND BALANCES
Liabilities:
2120 Accounts Payable $ 56,678 $ 3,804 $ 60,482
2160 Accrued Wages Payable 22,328 388 22,716
2200 Accrued Expenditures 631 3 634
2000 Total Liabilities $ 79,637 $ 4,195 $ 83,832
Fund Balances:
Reserved For:
3430 Prepaid Expenditures $ 17,216 $ - $ 17,216
Unreserved and Undesignated:
3600 Reported in the General Fund 674,524 - 674,524
3000 Total Fund Balances $ 691,740 $ - $ 691,740
4000 Total Liabilities and Fund Balances $ 771,377 $ 4,195 $ 775,572
The notes to the financial statements are an integral part of this statement.
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WESTLAKE ACADEMY EXHIBIT C-2
STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED AUGUST 31,2007
Data
10 Special Total
Control General Revenue Governmental
Codes Fund Funds Funds
REVENUES:
5700 Total Local and Intermediate Sources $ 512,335 $ - $ 512.335
5800 State Program Revenues 2.367,196 20,537 2,387,733
5900 Federal Program Revenues 36,650 36,650
5020 Total Revenues 2,879,53 I 57,187 2,936,718
EXPENDITURES:
Current:
0011 Instruction 1,597,408 54,937 L652.345
0012 Instructional Resources and Media Services 59,039 - 59.039
0013 Curriculum and Instructional Staff Development 29.886 2,250 32,136
0021 Instructional Leadership 9.190 - 9,190
0023 School Leadership 216,472 - 216,472
0031 Guidance,Counseling and Evaluation Services 41,988 - 41,988
0033 Health Services 25,512 - 25,512
0035 Food Services 84,484 - 84,484
0036 Cocurricular/ExtracurricuJar Activities 53,463 - 53,463
0041 General Administration 218,670 - 218,670
0051 Facilities Maintenance and Operations 195264 - 195.264
0053 Data Processing Services 68,177 - 68,177
0061 Community Services 15,958 - 15,958
6030 Total Expenditures 2,615,511 57,187 2,672,698
1200 Net Change in Fund Balances 264,020 - 264,020
0100 Fund Balance- September I (Beginning) 427,720 427,720
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3000 Fund Balance-August 31 (Ending) $ 691,740 $ - $ 691,740
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The notes to the financial statements are an integral part of this statement.
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WESTLAKE ACADEMY EXHIBIT D-1
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
AUGUST 31,2007
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Agency
Fund
ASSETS
Cash and Cash Equivalents $ 36,580
Total Assets
$ 36,580
LIABILITIES
Accounts Payable $ 2,340
Due to Student Groups 34,240
Total Liabilities $ 36,580
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The notes to the financial statements are an integral part of this statement.
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WESTLAKE ACADEMY
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31,2007
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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 non-profit 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 the members of the Board are members of the Town's g o overnin body, The
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j 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 board 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,TX 76262.
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B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
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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.
Neither fiduciary funds nor component units that are fiduciary in nature are included.
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WESTLAKE ACADEMY
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31,2007
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,continued
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION,continued
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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.
i Grant funds are considered to be earned to the extent of expenditures made under the provisions of the
grant. Accordingly,when such fiends are received,they are recorded as deferred revenues until related and
authorized expenditures have been made. If balances have not been expended by the end of the project
period,grantors sometimes require the Academy to refund all or part of the unused amount.
The Proprietary Fund Types and Fiduciary Funds are accounted for on a flow of economic resources
measurement focus and utilize the accrual basis of accounting. This basis of accounting recognizes
revenues in the accounting period in which they are earned and become measurable and expenses in the
accounting period in which they are incurred and become measurable. The Academy applies all GASB
pronouncements as well as the Financial Accounting Standards Board pronouncements issued on or before
November 30, 1989,unless these pronouncements conflict or contradict GASB pronouncements. With this
measurement focus,all assets and all liabilities associated with the operation of these funds are included on
the fund Statement of Net Assets. The fund equity is segregated into restricted net assets, and unrestricted
net assets.
D. FUND ACCOUNTING
The Academy reports the following major governmental funds:
• The General 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:
• Special Revenue Funds—The Academy accounts 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 – The Academy accounts for resources held for others in a custodial capacity in
agency funds. 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. 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
i or less when purchased.
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WESTLAKE ACADEMY
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31,2007
H. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS
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, 2007, the carrying amount of the Academy's deposits (cash, certificates of deposit, and
interest-bearing savings accounts included in temporary investments)was $184,229 and the bank balance
was$207,275.
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, (9) and 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, (10)and 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, 2007 was $485,943 (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. KPMG Peat Marwick, 111 Congress Avenue, Suite 1100, Austin, Texas 78701
performs the annual audit. In addition, TexPool is subject to review by the State Auditor's Office and by
the Internal Auditor of the Comptroller's Office.
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WESTLAKE ACADEMY
NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31,2007
II. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS,continued
C. DEFINED BENEFIT PENSION PLAN
Plan Description. The Academy contributes to the Teacher's 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.
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 8701, by calling the TRS
Communications Department at 1-800-2238778, or by downloading the report from the TRS Internet
website,www.trs.state.tx.us,under the TRS Publications heading.
Funding Policy. State law provides for fiscal years 2007 and 2006 a state contribution rate of 6.0% and a
member contribution rate of 6.4%. In certain instances the reporting academy is required to make all or a
portion of the state's 6.0% contribution. Contribution requirements are not actuarially determined but are
legally established each biennium pursuant to the following state funding policy: (1)The state constitution
requires the legislature to establish a member contribution rate of not less than 6.0% of the member's
annual compensation and a state contribution rate of not less than 6.0% and not more than 10.0% of the
aggregate annual compensation of all members of the system during that fiscal year; (2) A state statute
prohibits benefit improvements or contribution reductions il; as a result of a the particular action, the time
required to amortize IRS's unfunded actuarial liabilities would be increased to a period that exceeds 31
t years, or,if the amortization period already exceeds 31 years,the period would be increased by such action.
State contributions to TRS made on behalf of the Academy's employees for the year ended August 31,
2007 and 2006 were$108,131 and$94,194,respectively.
D. 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
j Gift and bequests $ 421,525
Food sales 67,166
Interest 23,644
Total $ 512,335
E. 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.
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REQUIRED SUPPLEMENTARY INFORMATION
EXHIBIT G-1
WESTLAKE ACADEMY
SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL-GENERAL FUND
FOR THE YEAR ENDED AUGUST 31,2007
Data Actual Amounts Variance With
Control Budgeted Amounts (GAAP BASIS) Final Budget
Positive or
Codes Original Final (Negative)
REVENUES:
5700 Total Local and Intennediate Sources $ 503,751 $ 503.288 $ 512.335 $ 9.047
I 5800 State Program Revenues 2,238,504 2.227,831 2,367,196 139365
5020 Total Revenues 2,742,255 2,731,119 2,879,531 148.412
EXPENDITURES:
Current:
0011 Instruction 1,752.586 1.623,929 1,597,408 26,521
0012 Instructional Resources and Media Services 66,331 66,165 59,039 7,126
0013 Curriculum and Instructional Staff Development 30,109 31,150 29,886 1,264
0021 Instructional Leadership 8,787 9,837 9,190 647
0023 School Leadership 205,750 223,723 216,472 7,251
0031 Guidance,Counseling and Evaluation Services 48,357 46,240 41,988 4.252
0033 Health Services 26302 26.053 25.512 541
0035 Food Services 80,362 87,601 84,484 1117
0036 Cocurricul ar/Extracurricu tar Activities 58.461 54,427 53,463 964
0041 General Administration 197,092 223,981 218,670 5,311
0051 Facilities Maintenance and Operations 221,794 213.356 195,264 18.092
0053 Data Processing Services 50,435 76,942 68,177 8,765
0061 Community Services 3,152 16,258 15,958 300
6030 Total Expenditures 2,749,518 2,699,662 2,615,511 84,151
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1200 Net Change in Fund Balances (7,263) 31,457 264,020 232,563
0100 Fund Balance-September I (Beginning) 427,720 427,720 427,720 -
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3000 Fund Balance-August 31 (Ending) $ 420,457 $ 459,177 $ 691,740 $ 232,563
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WESTLAKE ACADEMY
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
AUGUST 31,2007
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 G-1.
j The following procedures are followed in establishing the budgetary data:
1. Prior to August 25 of the preceding fiscal year, the Academy prepares a budget for the next succeeding
fiscal year beginning September 1. The operating budget includes proposed expenditures and the means of
financing them.
2. A meeting of the Board 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.
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COMBINING STATEMENTS
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EXHIBIT H-1
428 Total
High Nonmajor
School Governmental
Allotment Funds
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$ 3,804 $ 3,630
- 565
$ 3,804 $ 4,195
$ 3,804 $ 3,804
- 388
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3,804 4,195
$ 3,804 $ 4,195
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EXHIBIT H-2
428 Total
High Nonmajor
School Governmental
Allotment Funds
$ 8,821 $ 20,537
36,650
8.821 57.187
8.821 54,937
- 2,250
8,821 57,187
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OVERALL COMPLIANCE AND
INTERNAL CONTROLS SECTION
f
S GwA REPORT ON INTERNAL CONTROL OVER
� FINANCIAL REPORTING AND COMPLIANCE AND OTHER MATTERS BASED
5'rora(I G'rrnrrA r -.Wen za, ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GO VERNMENT A UDITING STANDARDS
500 W—"Sireri
Sui:E 4p{I
Fort t,rtr re-; Board of Trustees
Westlake Academy
2650 J.T. Ottinger Road
i Phnne 81'632-2;00 Westlake,Texas 76262
Fa, 817-632-2;98
We have audited the accompanying financial statements of the governmental activities, the
discretely presented component unit, each major fund, and aggregate remaining fund
information of Westlake Academy(the"Academy") as of and for the year ended August 31,
2007, which collectively comprise the Academy's basic financial statement and have issued
our report thereon dated October 25, 2007. 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
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Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the District's internal control over
j 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 County's internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the District'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 District'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 District's financial statements that is more than inconsequential will
not be prevented or detected by the District'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 District's internal control.
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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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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and
grants 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 Board of Trustees, Administration, Texas Education Agency and federal
awarding agencies and pass through entities and is not intended to be and should not be used by anyone other
F than these specified parties.
LLP
STOVALL, GRANDEY&ALLEN, LLP
Fort Worth,Texas
October 25,2007
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