HomeMy WebLinkAboutRes 05-09 WA Approving the 2005-2006 Annual Audit WESTLAKE ACADEMY
RESOLUTION NO. 05-09
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WESTLAKE ACADEMY
TO APPROVE THE 2004/2005 ANNUAL AUDIT REPORT FROM WEAVER &
TIDWELL,LLP.
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF 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 Directors.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
WESTLAKE ACADEMY:
SECTION 1: That the Board of Directors of Westlake Academy does hereby approve the
2004/2005 annual audit report from Weaver and Tidwell, LLP.
SECTION 2: That this Resolution shall become effective upon the date of its passage.
PASSED AND APPROVED ON THIS 14th DAY OF NOVEMBER, 2005.
ATTEST: Scott Bradley, President
'IL4--X�
a
ean Dwinnell, Secretary Trent O. Petty, Qtd
APPROVE S TO FORM:
L. Stanton orney
WESTLAKE ACADEMY
(A COMPONENT UNIT OF
THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31, 2045
WA Resolution 05-09
TABLE OF CONTENTS
Exhibit Pape
Certificate of Board 1
Independent Auditor's Report 2
Management's Discussion and Analysis 4
Basic Financial Statements
Government Wide Statements:
A-1 Statement of Net Assets 12
B-1 Statement of Activities 13
Governmental Fund Financial Statements:
C-1 Balance Sheet 14
C-2 Statement of Revenues, Expenditures, and Changes in Fund Balance 15
Notes to the Basic Financial Statements 16
Required Supplementary Information
D-1 Budgetary Comparison Schedule—General Fund 22
Notes to the Required Supplementary Information 23
Overall Compliance and Internal Controls Section
Report on Compliance and on Internal Control Over Financial Reporting Based
on an audit of Financial Statements Performed in Accordance with
Government Auditing Standards 24
CERTIFICATE OF BOARD
WESTLAKE ACADEMY TARRANT 220-810
Name of School County Co.-District Number
We, the undersigned, certify that the attached annual financial reports of the above-named school were
reviewed and (check one) approved disapproved for the year ended August 31,
2005 at a meeting of the Board of Trustees of such school on the day of, 2005.
Signature of Board Secretary Signature of Board President
If the Board of Trustees disapproved of the auditors' report, the reason(s)for disapproving it is(are):
(attach list as necessary)
1
FINANCIAL SECTION
i
G :I
r
i
WEAVER
TIDWELL INDEPENDENT AUDITOR'S REPORT
LLP.
CERTIFIED PUBLIC
ACCou NTANTS Board of Trustees
AND CONSULTANTS WESTLAKE ACADEMY
2650 J.T. Ottinger Road
Westlake, Texas 76262
We have audited the accompanying financial statements of the governmental activities,
the discretely presented component unit, and each major fund of the WESTLAKE
ACADEMY (the Academy) as of and for the year ended August 31, 2005 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
administration. Our responsibility is to express an opinion on these basic 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 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 opinion.
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, and each major fund of the Academy as of August 31, 2005,
and the respective changes in financial position and the cash flows, where applicable,
thereof, for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
DALLAS The accompanying management's discussion and analysis (on pages 4 through 11) and
the budgetary comparison schedule-general fund (on page 22) are not a required part of
the basic financial statements but are supplementary information required by the
1,00 Governmental Accounting Standards Board. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of
P � P Y G g 9 9
measurement and presentation of the required supplementary information. However, we
did not audit the information and express no opinion on it.
FORT WORTH
J600 IV,n 4r,,"or,.S'!rrrl
.100
lni II:or1/a 7�ac,r; ;'6f0.?-'W0
F '1 .-i_'9.5J_
V11AW w•EAVERANOTIOWELL,CUM
2
AN INDEPENDENT MEMBER OF
BAKER TILLY
INTERNATIONAL
WESTLAKE ACADEMY
Page Two
In accordance with Government Auditing Standards, we have also issued our report
dated October 13, 2005 on our consideration of Westlake 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.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
October 13, 2005
3
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of Westlake Academy's annual financial report presents our discussion and analysis of the
Academy's financial performance during the fiscal year ended August 31, 2000. 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
$232,091 (Net Assets). This is an increase of$219,700 during the year ended August 31, 2005.
• The Academy had $1,877,398 in expenses related to governmental activities of which $374,900 of
these expenses were offset by program-specific charges for services or grants and contributions. This
is a total expense increase of$509,285 over the prior year.
• The general fund reported a fund balance this year of $232,091, an increase of$219,700 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 statements that Figure A-1. Required Components of
the Academy's Annual Financial
provide both long-term and short-term information about the Academy's Report
overall financial status. -----------
--port--�
• The remaining statements are fund financial statements that focus on
individual parts of the government, reporting the Academy's operations 'a Basic Required
in more detail than the government-wide statements. V aar. Financial Supplementary
Statements Information
• The governmental funds 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 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.
Gwerrtment-Wide Fund
Figure A-2 below summarizes the major features of school district/charter Financial Financial 7
Statements Statements
school financial statements, including the portion of the Academy government `°`�""e�
they cover, as well as the types of information they contain. The remainder of Stategre`tm
this overview section of management's discussion and analysis explains the
structure and contents of each of the statements. The Academy did not have
any"Proprietary" nor"Fiduciary'funds at August 31, 2005.
Summary Detail
4
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 and grants finance most of these
activities.
Figure A-2. Major Features of the District's Government-wide and Fund Financial Statements
Type of Statements Government-wide Governmental Funds Proprietary Funds Fiduciary Funds
The Academy has no The Academy has no
Proprietary Funds for Fiduciary Funds for the
the year ended 8-31- year ended 8-31-05.
05.
Entire Academy's The activities of the Activities of the Instances in which the
government Academy that are not Academy operates Academy is the trustee
Scope (except fiduciary proprietary or fiduciary similar to private or agent for someone
funds)and the business, i.e.self- else's resources
Academy's insurance
component units
*Statement of net *Balance Sheet *Statement of net *Statement of fiduciary
Required financial assets *Statement of revenues, assets net assets
statements *Statement of expenditures&changes *Statement of *Statement of changes
activities in fund balances revenues,expenses in fiduciary net assets
and changes in fund
net assets
*Statement of cash
flows
Accrual accounting Modified accrual Accrual accounting Accrual accounting and
and economic accounting and current and economic economic resources
Accounting basis and resources focus financial resources focus resources focus focus
measurement focus
All assets and Only assets expected to All assets and All assets and liabilities,
liabilities,both be used up and liabilities liabilities both both short-lean and
Type of assettliability financial and that come due during the financial and capital, long-term.
information capital,short-term year or soon thereafter, and short-term and
and long-term no capital assets long-term.
included
All revenues and Revenues for which All revenues and All revenues and
Type of inflow/outflow expenses during cash is received during expenses during expenses during year,
year, regardless of or soon after the end of year, regardless of regardless of when cash
information when cash is the year, expenditures when cash is is received or paid
received or paid. when goods or services received or paid
have been received and
payment is due during
the year or soon
thereafter
5
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" for the year ended August 31,
2005.
• 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 explains the relationship (or differences) between them.
• Proprietary funds—('None at August 31, 2005) 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—(None at August 31, 2005) 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.
6
FINANCIAL ANALYSIS OF THE ACADEMY AS A WHOLE
Net assets. The Academy's combined net assets were $232,091 at August 31, 2005. (See Table A-1).
Table A-1
Westlake Academy's Net Assets
(in thousands of dollars)
Governmental Total%
Activities Change
2004 2005 2004-2005
Current and Other Assets $ 103 $ 316
Total Assets 103 316 207%
Current Liabilities 91 84
Total Liabilities 91 84 -8%
Net Assets
Unrestricted 12 232
Total Net Assets $ 12 $ 232 1833%
Figure A-3
Westlake Academy Changes in net assets. The Academy's total
Sources of Revenue for Fiscal Year 2005 revenues were $2.0 million. A significant
portion, 76%, of the Academy's revenue came
0 State Funding _._ _ ■Federal Grants from state funding. (See Figure A-3.) 12%
76% 12'A percent came from federal grants, 10% came
from gifts and bequests, and 2% from revenue
related to charges for services.
L7 Gifts&
Bequests- ❑Chargefor
ill% - services The total cost of all programs and services was
2% $1.88 million; 63% of these costs are for
instructional and instructional related costs.
7
Table A-2
Changes in Westlake Academy's Net Assets
(in thousands of dollars)
Governmental Total %
Activities Change
2004 2005 2004-2005
Revenues
Program Revenues
Charges for Services $ 39 $ 39 0%
Operating Grants and Contributions 349 335 -4%
General Revenues
Grants & Contributions not restricted 937 1,520 62%
Miscellaneous Local & Intermediate Revenues 68 203 199%
Total Revenues 1,393 2,097 51%
Expenses
Instruction and instructional related 909 1,237 36%
Instructional leadership/school administration 203 258 27%
Guidance, social work, health,transportation 8 64 700%
Food services 41 14 -66%
Extracurricular activities 5 45 800%
General administration 98 84 -14%
Plant maintenance and security 68 129 90%
Data processing services 36 44 22%
Community services - 2 100%
Total Expenses 1,368 1,877 37%
Increase in Net Assets 25 220 780%p
Beginning Net Assets -46 12 -126%
Prior Period Adjustment 33 -100%
Ending Net Assets $ 12 $ 232 1833%
Table A-3 (next page) 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 $1,877,398.
• Some of the cost was paid by those who directly benefited from the programs, $39,430, or
by grants and contributions $335,470.
8
Table A-3
Net Cost of Selected Westlake Academy Functions
(in thousands of dollars)
Total Cost Total % Net Cost Total %
of Services Change of Services Change
2004-
2004 2005 2004-2005 2004 2005 2005
Instruction $ 879 $ 1,190 35% $ 645 $ 930 44%
School Leadership 203 258 27% 148 209 41%
General Administration 98 84 -14% 77 66 -14%
Plant Maintenance and
Operations 68 130 91% 55 117 113%
Data Processing Services 36 45 25% 24 34 42%
FINANCIAL ANALYSIS OF THE ACADEMY'S FUNDS
Revenues from governmental fund types totaled $2,097,098 with total governmental fund type expenditures
totaling $1,877,398.
General Fund Budgetary Highlights
Over the course of the year, the Academy revised its budget by increasing revenues by $175,114 and only
increasing expenditures by $6,622, netting an increase of $168,492 to the budget. At year-end, actual
expenditures were $28,604 below the amended budget.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
• General fund revenues are budgeted to increase 24% over 2004-2005 actual revenues. This rise is
primarily attributable to the increase in student population as well as anticipated Blacksmith Apprentice
program donations which correspond to the number of students enrolled.
• Increase in the Academy population by adding an eighth grade for FY 2005-2006. Each year the Academ
will expand one grade level until the Academy reaches K-12. With this expansion, increase to the 7th and 8
grades as well as new Westlake student's being admitted, the student population is estimated to increase by
55.
• The Academy's 2006 refined average daily attendance is expected to be 316.49 up by 57.03 from FY
2005's 259.46. This is an increase of approximately 22%.
• Amounts available for appropriation in the general fund budget are $2.28 million, an increase of 41% over
the final 2005 budget of $1.6 million. This increase includes the addition of staff, teacher salary
adjustments, and additional technology and supplies for the 8th grade classes. It should also be noted that
16% of this increase is a result of the reallocation of the $250,000 expenditures spent previously through the
Charter School Start-up Grant(which is no longer available)to the General Fund.
• General Fund operation spending per student increased in the 2006 budget from $6,061 to $7,076. This
16% increase is associated with the above referenced explanation of the additional budgeted expenditures.
The addition to staff for FY 2005-2006 includes a total of 5.4 teachers. Full time additions include the
English/Drama MYP teacher, PE teacher and additional Grade 3 and Grade 4 teachers. Other personnel
increases are a result of expanding the total number of days worked for the following positions: math
teacher, MYP science teacher, Spanish teacher, and the special education aide.
9
• If the FY 2005-2006 budget estimates are realized, the Academy's general fund's budgetary fund balance is
expected to increase approximately$10K by the close of FY 2006.
ACHIEVEMENTS DURING FISCAL YEAR 2004-2005:
• Trained all teachers (PYP and MYP) in IBO workshops
• Secured two IB experienced foreign staff for 200412005.
• Application, Part B was submitted and PYP Authorization is scheduled to take place in March 2006.
• Enrolled MYP in 1130 implementation process and submitted Application, Part A one year ahead of
schedule.
• Conducted staff development in PYP planners, MYP Areas of Interaction, differentiation, concept-based
learning and portfolios.
• Sent teachers to 15 different conferences and courses including: IBO workshops; ASCD world
conferences; Council of International Schools Science Conference in Quito, Ecuador; Alabama Institute
of the Arts; Project Zero Teacher Workshop at Harvard; and classroom management.
• The Foundation implemented the "Blacksmith Apprentice" Program, raising approximately $250,000
with an average donation of$902 per apprentice/student to be donated to the Academy.
• An international student exchange program with an IBO school in Mexico was set up with our first
visitors to arrive in October, 2005.
• Achieved TEA Recognized status for 2005 as a school.
• TEA ranked the Academy as a Gold Medalist in 5 categories for 2005: Math; Reading; Science; Writing;
and Attendance
• TAK scores: a high percentage reached Commended — meeting and exceeding most of our local
schools and far exceeding the state average: 57% reached Commended in Reading; 44% reached
Commended in Math; 52% reached Commended in Writing; and 32% reached Commended in
Science
• Eight out of 10 Academy Odyssey of the Mind teams were First or Second Place winners; six teams
moved on to State competitions.
• Doubled the number of titles in the library through budgeted investments, HOC donations, book fairs
and student-led drives for used books.
• Students sponsor 3 local charities (Women's Haven, Metroport. Meals on Wheels, and GRACE) and
donated funds and goods. With a school population of 269, students raised over $3,650, including
matching funds towards Tsunami Relief.
• Began Interschool sports program with teams competing in volleyball, basketball, soccer and softball.
• Accepted as full member of the Council of International Schools, after an inspection visit.
• Secured scholarships for teachers from Westlake Academy Foundation, allowing us to send teachers to
international science course, Harvard's Project Zero and the Alabama Institute for the Arts.
• Secured grants for library subscriptions (Pfizer) and classroom teacher supplies (Region 20).
• Started the Westlake Academy School of Music and adult Spanish classes for the community.
10
• Three teams from the Academy competed in the Winston Science Fair, winning prizes or mentions in
each category.
• Five MYP G7 teams participated in MUN (Model United Nations). Out of 240 participants from as far
away as Russia, Westlake Academy students won 5 out of the 15 awards.
• Increased an after-school program that offers everything from Chess to Science to Fencing, Golf,
Gardening and more traditional games.
• Offered summer programs in 2005: a 9 week sports camp and a week-long volleyball camp.
CONTACTING THE ACADEMY'S FINANCIAL. MANAGEMENT
This financial report is designed to provide our citizens, 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.
11
Basic Financial Statements
EXHIBIT A-1
WESTLAKE ACADEMY
STATEMENT OF NET ASSETS
August 31, 2005
Control
Codes Component Unit
Governmental Westlake Academy
Activities Foundation
ASSETS
1110 Cash and cash equivalents $ 207,641 $ 47,142
1240 Due from other governments 102,560 -
1410 Deferred expenditures or expenses 5,489 -
1420 Capital bond&other debt issuance costs - -
1000 Total Assets 315,690 47,142
LIABILITIES
2110 Accounts payable 33,863 -
2160 Accrued wages payable 39,327 -
2180 Due to other governments 9,293 -
2200 Accrued expenditures or expenses 1,116 -
2000 Total Liabilities 83,599 -
NET ASSETS
3900 Unrestricted net assets 232,091 47,142
3000 Total net assets $ 232,091 $ 47,142
The accompanying notes are an integral part of this statement.
12
EXHIBIT B-1
WESTLAKE ACADEMY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED AUGUST 31, 2005
Net(Expense)
Revenue and
Changes!n Net
Program Revenues Assets
1 3 4 6
Data Operating Component Unit
Control Charges for Grants and Governmental Westlake Academy
Codes Expenses. Services Contributions Activities Foundation
GOVERNMENTAL ACTIVITIES:
11 Instruction $ 1,189,593 $ 28,229 $ 231,601 $ (929,763) $
12 Instructional resources and media services 32,759 - (32,759)
13 Curriculum and staff development 14,379 2,043 (12,336)
23 School leadership 257,750 48,551 (209,299)
31 Guidance,counseling,and evaluation services 45,154 1,216 (43,936)
33 Health services 18,914 - (18,914)
35 Food Service 14,100 6,447 10,304 2,651
36 Extracurricular activities 44,636 4,754 1,180 (38,702)
41 General administration 83,994 - 18,228 (65,766)
51 Plant maintenance and operations 129,437 12,103 (117,334)
63 Data processing services 44,702 10,187 (34,515)
61 Community services 1,9801 57 (1,923)
[TIP]TOTAL PRIMARY GOVERNMENT: $ 1,877,396 $ 39,430 $ 335,470 $ (1,502;498) $
COMPONENT UNIT
Westlake Academy Foundation $ 288,3D7 $ $ $ $ (288,307)
$ 268,307 $ $ $ $ (268,307)
Data
Control
Codes General Revenues:
GC Grants&Contributions not Restricted $ 1,722,198 $ 335,449
TR Total general revenues 1,722,198 335,449
CN Change in net assets 219,700 47,142
NB Net assets-beginning 12,391 -
NE Net assets-ending $ 232,081 $ 47,142
The accompanying notes are an integral part of this statement.
13
EXHIBIT C-1
WESTLAKE ACADEMY
BALANCE SHEET
GOVERNMENTAL FUNDS
AUGUST 31, 2005
Data
Control Total
Codes General Special Governmental
Fund Revenue Fund Funds
ASSETS
1110 Cash and cash equivalents $ 206,901 $ 740 $ 207,641
1240 Receivables from other governments 75,858 26,702 102,560
1410 Deferred expenditures 5,489 5,489
1000 Total assets 288,248 27,442 315,690
LIABILITIES AND FUND BALANCES
LIABILITIES:
2110 Accounts payable $ 6,421 $ 27,442 $ 33,863
2160 Accrued wages payable 39,327 - 39,327
2180 Due to other governments 9,293 9,293
2300 Accrued Expenditures 1,116 1,116
2000 Total liabilities 56,157 27,442 83,599
Fund balances:
UNRESERVED AND UNDESIGNATED
3600 Reported in general fund 232,091 - 232,091
3000 Total fund balances $ 232,091 $ - $ 232,091
4000 Total liabilities and fund balances $ 288,248 $ 27,442 $ 315,690
The accompanying notes are an integral part of this statement.
14
EXHIBIT C-2
WESTLAKE ACADEMY
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED, AUGUST 31, 2005
Data Total
Control General Special Governmental
Codes Fund Revenue Fund Funds
REVENUES
5700 Local and intermediate sources $ 242,050 $ - $ 242,050
5800 State program revenues 1,589,848 7,514 1,597,362
5900 Federal program revenues 257,686 257,686
5020 Total revenues 1,831,898 265,200 2,097,098
EXPENDITURES
CURRENT:
0011 Instruction 1,095,569 94,024 1,189,593
0012 Instructional resources and media services 16,345 16,414 32,759
0013 Curriculum and staff development 14,379 - 14,379
0023 School leadership 235,643 22,107 257,750
0031 Guidance,counseling,and evaluation services 16,000 29,154 45,154
0033 Health services 4,830 14,084 18,914
0035 Food Service 7,008 7,092 14,100
0036 Extracurricular activities 44,636 - 44,636
0041 General administration 52,477 31,517 83,994
0051 Plant maintenance and operations 78,629 50,608 129,437
0053 Data processing services 44,702 - 44,702
0061 Community services 1,980 1,980
6030 Total expenditures 1,612,198 265,200 1,877,398
1200 Net change in fund balances 219,700 219,700
0100 Fund balances-beginning 12,391 12,391
3000 Fund balances--ending $ 232,091 $ $ 232,091
The accompanying notes are an integral part of this statement.
15
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Westlake Academy, a blended component unit of the Town of Westlake, is a Texas non-profit
Corporation under Chapter 12, Subchapter D of the Education Code to provide education services
and acquire, finance and operate educational facilities. The Board consists of six trustees and is
appointed by the Town's governing body. Currently all the members of the Board of Trustees 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 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.
GASB Statement No. 34 established a new financial reporting model for state and local governments
that included the addition of management's discussion and analysis, government-wide financial
statements and required supplementary information to the already required fund financial statements
and notes.
Reporting Entity
The Board of Trustees (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 Governmental Accounting Standards Board ("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 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 Westlake Academy Foundation has been
discretely presented in the accompanying financial statements. Separate financial statements of
the Westlake Academy Foundation are not available.
Government-Wide and Fund Financial Statements
The government wide financial statements (i.e., the statement of net assets and the statement of
changes in net assets) report information on all of the non-fiduciary activities of the primary
government. For the most part, the effect of interfund activity has been removed from these
statements. The governmental activities are supported by state and federal grants and the Town
of Westlake. The Academy has no business-type activities that rely, to a significant extent, on
fees and charges for support.
16
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued
The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function. Program revenues include 1) charges to customers or applicants who
purchase, use or directly benefit from goods, services, or privileges provided by a given function
and 2) grants and contributions that are restricted to meeting operational or capital requirements
of a particular function. Other items not properly included among program revenues are reported
instead as general revenues.
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.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements use the economic resources measurement focus and
the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of the related cash flows. Grants and
similar items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
Governmental fund financial statements use the current financial resources measurement focus
and the modified accrual basis of accounting, With this measurement focus, only current assets,
current liabilities and fund balances are included on the balance sheet. Operating statements of
these funds present net increases and decreases in current assets (i.e., revenues and other
financing sources and expenditures and other financing uses).
The modified accrual basis of accounting recognizes revenues in the accounting period in which
they become both measurable and available and it recognizes expenditures in the accounting
period in which the fund liability is incurred, if measurable. The expenditures related to certain
compensated absences and claims and judgments are recognized when the obligations are
expected to be liquidated with expendable available financial resources. The Academy considers
all revenues available if they are collectible within 60 days after year end.
Miscellaneous revenues are recorded as revenue when received in cash because they are
generally not measurable until actually received.
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.
Fund Accounting
The Academy reports the following major governmental funds:
1. 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.
17
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued
2. Special Revenue Fund — 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
periods.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Academy considers highly liquid
investments to be cash equivalents if they have a maturity within one year or less.
Supplies and Materials
Supplies and materials are recorded as expenditures when they are consumed.
Restricted Assets
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.
Risk Management
The Academy is exposed to various risk of loss related to torts theft of, damage to and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
During fiscal 2005, the Academy purchased commercial insurance to cover general liabilities.
There were no settlements exceeding insurance coverage in the current fiscal year.
During the year ended August 31, 2005, employees of Westlake Academy were covered by a
health insurance plan (the Plan). The Academy paid premiums of $330 per month per
employee to the Plan. Employees, at their option, authorized payroll withholdings to pay
premiums for dependents. All premiums were paid to a licensed insurer. The Plan was
authorized by Article 3.51-2, Texas Insurance Code and was documented by contractual
agreement.
The contract between the Academy and the licensed insurer is renewable September 1,
2005, and terms of coverage and premium costs are included in the contractual provisions.
Account Code Reporting
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.
18
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. CASH AND INVESTMENTS
The funds of the Academy must be deposited and invested under the terms of a contract, contents of
which are set out in the Depository Contract Law. The depository bank places approved pledged
securities for safekeeping and trust with the Academy's agent bank in an amount sufficient to protect
Academy funds on a day-to-day basis during the period of the contract. The pledge of approved
securities is waived only to the extent of the depository bank's dollar amount of Federal Deposit
Insurance Corporation ("FDIC') insurance.
At August 31, 2005, the carrying amount of the Academy's deposits was $207,641 and the bank
balance was $215,781. The Academy's cash deposits at August 31, 2005 and during the year ended
August 31, 2005 were entirely covered by FDIC insurance or by pledged collateral held by the
Academy's agent bank in the Academy's name.
In addition, the following is disclosed regarding coverage of combined balances on the date of highest
deposit:
a. Depository: Bank One
b. The Town of Westlake's highest combined balances of cash, savings, and time
deposit accounts amounted to $1,217,274 and occurred during the month of May
2005. Out of the total of$1,217,274, only $263,448 is the Academy's portion.
c. The Town of Westlake's market value of securities pledged as of the date of the
highest combined balance on deposit was $2,158,453
d. Total amount of FDIC coverage at the time of the highest combined balance was
$100,000.
Investments
Statutes authorize the Academy to invest in obligations of the U.S. Government, its agencies and
instrumentalities not to exceed two years to stated maturity, and excluding mortgage backed
securities. Fully insured or collateralized certificates of deposit from a bank doing business in the
state of Texas and under the terms of a written depository agreement with that bank, not to exceed
one year to stated maturity. No-load, SEC registered money market mutual funds. Constant dollar,
AAA rated Texas Local Government Investment Pools as defined by the Public Funds Investment
Act.
19
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. CASH AND INVESTMENTS - continued
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 district is in compliance with the requirements of the Act and with local policies.
NOTE 3. DUE FROM STATE AGENCIES
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, 2005, are summarized below. All federal grants shown below are passed through the
TEA and are reported on the combined financial statements as Due from State Agencies.
Fund Due from State
General $ 75,858
Special Revenue 26,702
Total 102 5
NOTE 4. DEFINED BENEFIT PENSION PLAN
Plan Description. Westlake 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 1-800-223-
8778, or by downloading the report from the TRS Internet website, www.trs.state.tx.us, under the
TRS Publications heading.
20
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4. DEFINED BENEFIT PENSION PLAN - continued
Funding Policy. State law provides for fiscal years 2005 and 2004 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 if, as a
result of a the particular action, the time required to amortize TRS's 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 contributions to TRS made on behalf
of Westlake Academy's employees for the year ended August 31, 2005 and 2004 were $70,270 and
$52,538, respectively.
NOTE 5. REVENUE FROM LOCAL AND INTERMEDIATE SOURCES
During the current year, revenues from local and intermediate sources in the fund level financial
statements consisted of the following:
General
Fund
Gift& Bequests $202,620
Food Sales 6,447
Other 32,983
Total 242
NOTE 6. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended August 31, 2005, functions related to data control codes, 0031, 0033, 0035, 0036,
0041, 0053 and 0061 had expenditures in excess of appropriations of $1,190, $1,880, $383, $789,
$2,907, $1,519 and $126, respectively.
NOTE T. 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.
21
REQUIRED SUPPLEMENTARY SCHEDULES
WESTLAKE ACADEMY EXHIBIT D-1
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND
FOR THE YEAR ENDED AUGUST 31, 2005
Actual Variance With
Data Amounts Final Budget
Control Budgeted Amounts GAAP BASIS Positive or
Codes Original Final - (Negative)
REVENUES
5700 Local and intermediate sources $ 282,300 $ 240,758 $ 242,050 $ 1,292
5800 State program revenues 9,353,576 1,570,232 1,589,848 19,616
5020 Total revenues 1,635,876 1,810,990 1,831,898 20,908
EXPENDITURES
CURRENT:
0011 Instruction 1,087,061 1,118,168 1,095,569 22,599
0012 Instructional resources and media services 22,500 24,995 16,345 8,650
0013 Curriculum and staff development 18,350 14,630 14,379 251
0023 School leadership 235,959 239,015 235,643 3,372
0031 Guidance, counseling,and evaluation services - 14,810 16,000 (1,190)
0033 Health services 1,000 2,950 4,830 (1,880)
0035 Food Services 47,613 6,625 7,008 (383)
0036 Extracurricular activities 27,872 43,847 44,636 (789)
0041 General administration 43,800 49,570 52,477 (2,907)
0051 Plant maintenance and operations 118,025 81,155 78,629 2,526
0053 Data processing services 30,000 43,183 44,702 (1,519)
0061 Community services 2,000 1,854 1,980 (1 2L
6030 Total expenditures 1,634,180 1,640,802 1,612,198 28,604
1200 Net change in fund balances 1,696 170,188 219,700 49,512
0100 Fund balances--beginning 12,391 12,391 12,391 -
3000 Fund balances--ending $ 14,087 $ 182,579 $ 232,091 $ 49,512
22
WESTLAKE ACADEMY
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
AUGUST 31, 2005
Budgetary Information
The Board of Trustees adopts an "appropriated budget" on a GAAP basis for the General Fund.
The Academy is required to present the adopted and final amended budgeted revenues and
expenditures for this fund. The General Fund budget appears in Exhibit D-1
The following procedures are followed in establishing the budgetary data:
1. Prior to August 25 of the preceding fiscal year, the Academy prepares a budget for the next
succeeding fiscal year beginning September 1. The operating budget includes proposed
expenditures and the means of financing them.
2. A meeting of the Board of Trustees is then called for the purpose of adopting the proposed
budget.
3. Prior to September 1, the budget is legally enacted through resolution by the Board. Once a
budget is approved, it can only be amended at the object, 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 are not made after fiscal year end.
4. Budgeted amounts are amended by the Board. All budget appropriations lapse at year end.
23
Overall Compliance
and
Internal Controls Section
REPORT ON COMPLIANCE AND ON INTERNAL
CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
WEAVER AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
TIDWELL
1.1.P Board of Trustees
WESTLAKE ACADEMY
CERT PUBLIC
ACCOUNTANTS g
2650 `l" Ottin er Road
AND CONSULTANTS Westlake, Texas 76262
We have audited the financial statements of WESTLAKE ACADEMY as of and for the
year ended August 31, 2005, and have issued our report thereon dated October 13,
2005. 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 WESTLAKE ACADEMY'S internal
control over financial reporting in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and not to provide
assurance on the internal control over financial reporting. Our consideration of the
internal control over financial reporting would not necessarily disclose all matters in the
internal control over financial reporting that might be material weaknesses. A material
weakness is a reportable condition in which the design or operation of one or more of
the internal control components does not reduce to a relatively low level risk that
misstatements caused by error or fraud in amounts that would be material in relation to
the financial statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned functions. We
noted no matters involving the internal control over financial reporting and its operation
that we consider to be material weaknesses.
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 grants,
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
°A""� 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.
1222 Akri; n,.;,.,.
Sro"- 1-i00
n,:u<<.. Te ,i;->>;;-»,r This report is intended soley for the information and use of management and is not
9--?.;yo „-o intended to be and sho d not be used by anyone other than these specified parties.
FORT WORTH Airr"'--
WEAVER AND TIDWELL, L.L.P.
1600 Mc-,;Srrrr;rh,tilnty
Dallas Texas
October 13, 2005
81 -, ,;;r
WIA1W WFAVERANDTIDWELL Cpftl
AN INDEPENDENT I19EI13BER OF
BAKER TILLY
INTERNATIONAL 24