HomeMy WebLinkAboutRes 04-15 WA Approve 2003-2004 Audit WESTLAKE ACADEMY
RESOLUTION NO. 04-15
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WESTLAKE
ACADEMY APPROVING THE 2003/2004 ANNUAL AUDIT REPORT FROM
WEAVER & TIDWELL,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 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 2003/2004 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 13th DAY OF DECEMBER,2004.
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ATTEST: Scott Bradl y, President
4CGingrosswy, Secretaiq Trent O. Petty, CEO
APPROVED AS TO FORM:
L. Stanton ow orney
W ESTLAKE ACADEMY
(A COMPONENT UNIT OF
THE TOWN OF WESTLAKE)
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31, 2004
WA Resolution 04-15
WESTLAKE ACADEMY
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED AUGUST 31, 2004
TABLE OF CONTENTS
Exhibit page
CERTIFICATE OF BOARD 1
Independent Auditor's Report 2
Management's Discussion and Analysis 3
Basic Financial Statements
Government Wide Statements:
A-1 Statement of Net Assets 9
B-1 Statement of Activities 10
Governmental Fund Financial Statements:
C-1 Balance Sheet 11
C-2 Statement of Revenues, Expenditures, and Changes in Fund Balance 12
Notes to the Financial Statements 13
Required Supplementary Information
D-1 Statement of Revenues, Expenditures, and Changes in Fund Balance
- General Fund 19
Notes to Required Supplementary Information 20
Overall Compliance and Internal Controls Section
Report Internal Control Over Financial Reporting and on Compliance on Based
on an audit of Financial Statements Performed in Accordance with
Government Auditing Standards 21
Certificate of Board
WESTLAKE ACADEMY Tarrant 220-810
Name of School District County Co.-Dist. Number
We, the undersigned, certify that the attached annual financial reports of the above-named academy
were reviewed and (check one) approved disapproved for the year ended August 31,
2004 at a meeting of the Hoard of Trustees of such academy on the day of
2004.
Signature of Board Secretary Signature of Board President
If the Board of Trustees disapproved of the auditor's report, the reason(s)for disapproving it is(are):
NIA
1
Financial Section
s INDEPENDENT AUDITOR'S REPORT
Board of Trustees
WEAVER WESTLAKE ACADEMY
TI DWELL 2650 J.T. Ottinger Road
Westlake,Texas 76262
L.L.P.
CERTIFIED PUBLIC
ACCOUNTANTS SLT N We have audited the accompanying financial statements of the governmental activities, each
AND CONSULTANTS g
major fund, and the aggregate remaining fund information of Westlake Academy as of and for the
year ended August 31,2004,which collectively comprise the Academy's basic financial statements
as listed in the table of contents. These financial statements are the responsibility of Westlake
Academy's management. Our responsibility is to express opinions on these financial statements
based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financials audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion,the financial statements referred to above present fairly, in all material respects, the
financial position of the governmental activities, each major fund, and the aggregate remaining
fund information of Westlake Academy as of August 31, 2004, and the respective changes in
financial position,thereof for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
The accompanying management's discussion and analysis and budgetary comparison information
on pages 3 through 8 and page 20 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.
In accordance with Govemment Auditing Standards,we have also issued our report dated October
11, 2004 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
DALLAS
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.
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WEAVER AND TIDWELL, L.L.P.
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Dallas Texas
October 11, 2004
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2
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, 2004. Because this fiscal year
was the Academy's initial year, there are no comparisons to previous years. Please read it in conjunction
with the Academy's financial statements,which follow this section.
FINANCIAL HIGHLIGHTS
• The Academy's total combined net assets were $12,391 at August 31, 2004.
• During the year,the Academy's expenses were $1,368,113..
• The general fund reported a fund balance this year of$12,391.
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
• 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.
• The remaining statements are fund financial statements that
?&*1PHe4,a Basic Required
focus on individual parts of the government, reporting the vamm a« Financial Supplementary
Academy's operations in more detail than the government- statements Information
wide statements.
• The governmental funds statements tell how general _
government services were financed in the short term as
well as what remains for future spending.
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 Govemment-Wide Fund
information in the financial statements. Figure A-1 shows how the Financial Financial
Statements Statements
required parts of this annual report are arranged and related to one
another
Summary iDetsif
3
Figure A-2 below summarizes the major features of school district financial statements, including the
portion of the Academy government they cover and the types of information they contain. The remainder
of this overview section of management's discussion and analysis explains the structure and contents of
each of the statements. The Academy did not have any "Proprietary" nor "Fiduciary" funds at August
31,2004.
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
Proprietary Funds Fiduciary Funds
Type of Statements Government-wide Governmental Funds The Academy has no The Academy has no
Proprietary Funds for the Fiduciary Funds for the
year ended 8-31-04. year ended 8-31-04.
Entire Agency's The activities of the Activities of the Academy Instances in which the
government(except Academy that are not operates similar to private Academy is the trustee or
Scope fiduciary funds)and proprietary or fiduciary business,i.e.self-insurance agent for someone else's
the Agency's resources
component units
*Statement of net *Balance Sheet *Statement of net assets *Statement of fiduciary net
Required financial assets *Statement of revenues, *Statement of revenues, assets
statements *Statement of expenditures&changes expenses and changes in *Statement of changes in
activities in fund balances fund net assets fiduciary net assets
*Statement of cash flows
Accrual accounting Modified accrual Accrual accounting and Accrual accounting and
and economic accounting and current economic resources focus economic resources focus
Accounting basis and resources focus financial resources
measurement focus focus
All assets and Only assets expected to All assets and liabilities All assets and liabilities,
liabilities,both be used up and both financial and capital, both snort-term and long-
Type of asset/liability financial and capital, liabilities that come due and short-term and long- term,the Agency's funds
information short-term and long- during the year or soon term. do not currently contain
term thereafter,no capital capital assets,although
assets included they can.
All revenues and Revenues for which All revenues and expenses All revenues and expenses
expenses during year, cash is received during during year, regardless of during year, regardless of
Type of inflow/outflow regardless of when or soon after the end of when cash is received or when cash is received or
information cash is received or the year, expenditures paid paid
paid. when goods or services
have been received and
payment is due during
the year or soon
thereafter
4
Fund Financial Statements
The fund financial statements provide more detailed information about the Academy's most si
funds—not the Academy as a whole. Funds are accounting devices that the Academy uses to keep tr track
Of specific sources of funding and spending for particular purposes. track
• Some funds are required by State law and by bond covenants.
• The Board of Trustees establishes other funds to control and manage money for articular
Purposes or to show that it is properly using certain taxes and grants. p
The Academy had only"Governmental funds"for the year ended August 31, 2004.
•
Governmental Ands—Most 1Vlost of the Academy's basic services are included in governmental funds,
which focus on ) 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, th
governmental fund statements provide a detailed short-term view that helps e
Whether there are more or fewer financial resources that can be spent in the near future to finance
the Academy's programs, p you determine
y p grams. Because this information does not encompass the additional long-term
focus of the government-wide statements, we provide additional information that explains th
relationship(or differences)between them on the subsequent page, if any differences exist. e
FINANCIAL ANALYSIS OF THE ACADEMY AS A WHOLE
Net assets. The Academy's combined net assets were$12,391 at August 31,2004. (See Table A-
1)
Table A-1
The Academy's Net Assets
(in thousand's of dollars)
Governmental
Activities
Current and Other Assets 2404
Total Assets 103
103
Current Liabilities
Total Liabilities 91
91
Net Assets
Unrestricted
Total Net Assets 12
12
(1) The Academy opened in August,2003
5
Changes in net assets The Academy's total revenues were $1.39 million. A significant portion, 68%,
of the Academy's revenue came from state funding..(See Figure A-2.) 20% percent came from
a federal
start-up grant, 5% came from gifts
i Figure A-2 Westlake Academy and bequests, 3% from revenue
Sources of Revenue for Fiscal Year 2004 related to charges for services and
Gifts and Chars for the remaining 4% is related to TRS-
13NUests - Services on-behalf
5% 3% The total cost of all programs and
services was $1.37 million; 66% of
these costs are for instructional and
1 Federal Start-up student services.
Grant
20%
State Funding TRS on-behalf
68% 4%
Table A-3
Changes in the Academy's Net Assets
(in thousands ofdollars)
1
Governmental
Activities
Revenues 2004
Program�Revenues
Charges for Services
Operating Grants and Contributions 39
General Revenues 349
Grants&Contributions not restricted
j Miscellaneous Local& Intermediate Revenue 937
I Total Revenues 68
1,393
Expenses
Instruction and instructional related
Instructional leadership/school administration 909
Guidance.social work, health,transportation 203
Food services S
Extracurricular activities 41
General Administration 5
Plant maintenance and security 98
Data processing services 68
Community services 36
Total Expenses -
1,365
Increase in Net Assets
Beginning Net Assets 25
Prior Period Adjustment (46)
Ending Net Assets 33
12
6
Changes in net assets The Academy's total revenues were $1.39 million. A significant portion, 68%,
P of the Academy's revenue came from state funding. (See Figure A-2.) 20% percent came from a federal
start-up grant, 5% came from gifts
Figure A-2 Westlake Academy and bequests, 3% from revenue
I related to charges for services and
Sources ofRewnue for Fiscal Year 2004
the remaining 4% is related to TRS-
Gifts and Charges for on-behalf
Bequests - Services The total cost of all programs and
5% 3% services was $1.37 million; 66% of
these costs are for instructional and
Federal Start-up student services.
- Grant
A%
{
State Funding TRS on-behalf
I 68% 4%
I
Table A-3
Changes in the Academy's Net Assets
(in thousands of dollars)
Governmental
Activities.
2004
Revenues
Program Revenues
Charges for Services $ 39
Operating Grants and Contributions 349
General Revenues
Grants&Contributions not restricted 937
Miscellaneous Local&Intermediate Revenue 68
I
Total Revenues 1,393
Expenses
Instruction and instructional related 909
Instructional leadership/school administration 203
Guidance,social work,health,transportation 8
Food services 41
Extracurricular activities 5
General Administration 98
Plant maintenance and security 68
Data processing services 36
Community services -
Total Expenses 1,368
Increase in Net Assets 25
Beginning Net Assets (46)
Prior Period Adjustment 33
Ending Net Assets $ 12
6
Table A-4 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.
• The cost of all governmental activities this year was $1,368,113.
• Some of the cost was paid by those who directly benefited from the programs ($38,947), or
• By grants and contributions($349,836)
Table A-4
Net Cost of Selected Academy Functions
(in thousands of dollars)
Total Cost of Net Cost of
Services Services
2004 2004
Instruction $ 879 $ 645
School Leadership 203 148
General Administration 98 77
Plant Maintenance&Operations 68 55
(1) The Academy opened in August,2003.
FINANCIAL ANALYSIS OF THE ACADEMY'S FUNDS
Revenues from governmental fund types totaled $1,393,864 with total governmental fund type
expenditures totaling$1,368,113.
General Fund Budgetary Highlights
Over the course of the year, the Academy revised its budget. Even with these adjustments, actual
expenditures were $16,456 under final budget amounts.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
• Increased the Academy population by adding a Kindergarten and a 7t`grade
• General Fund operating fund spending per student increases in the 2005 budget from $5,423 to
$6,120. This is a 13% increase mostly due to the staff and supplies required for the new classrooms
and the additional 70 students.
• Federal grant decreased from $275,000 to $250,000 for the FY 2005. This will be final year for the
Charter School Start-up Grants.
• The Academy's 2005 refined average daily attendance is expected to be 251.750 up by 60.31 from
FY 2004 191.431. This is an increase of approximately 31%.
These indicators were taken into account when adopting the general fund budget for 2005.
• Amounts available for appropriation in the general fund budget are $1.63 million, an increase of
50% over the final 2004 budget of$1.08 million.
The largest increments are increased staffing and teacher salary schedule adjustments. We have also
added the music program and after-school program for FY 2005.
If these estimates are realized, the Academy's budgetary general fund fund balance is not expected to
change by a significant amount by the close of FY 2005.
7
ACHIEVEMENTS DURING ACADEMY'S FIRST YEAR OF OPERATION
• Opened Academy with full enrollment, facilities complete and all staff positions covered
• Created the House system to facilitate vertical cohesion among students and enhance school spirit
• Trained all teachers (PYP and MYP) in IBO workshops
• Secured one PYP experienced foreign teacher for 2003/2004 and two IBO experienced foreign
staff for 2004/05
• Submitted PYP/IBO Application,Part A and requested consultancy visit for 2004/2005
• Enrolled MYP in IBO implementation process
• Conducted staff development in PYP planners, differentiation,concept-based learning
• Sent teachers to IBO workshop in Internationalism, Technology, and the international conference
at Reggio Emilia on early childhood education
• TAK scores: a high percentage reached Commended
0 62% reached Commended(average) in Reading
0 47% reached Commended(average) in Math
• Obtained the State Accountability Rating "Exemplary" for it's first year putting the Academy in
the top 3% of charter schools and the top 6.6% of all Texas school campuses
• Three out of 5 WLA Odyssey of the Mind teams made it to State finals
• Students won recognition and awards for work:
• The International Student Award from CIS (Council of International Schools) for
exemplary service to the community awarded to a WLA 5t' grade student
• First Prize: North Texas Stick to Writing given to 3`d grade WLA Grand Prize winner
from internal writing contest
• Third Prize: North Texas Stick to Writing given to I"grade WLA student
• Two of WLA Chess Club members won Chess championship
• Students sponsored 3 local charities and donated funds and goods
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.
8
Basic Financial Statements
EXHIBIT A-1
WESTLAKE ACADEMY
STATEMENT OF NET ASSETS
AUGUST 31,2004
Primary Government
Data
Control
Governmental
Codes
Activities
ASSETS
1110 Cash and Cash Equivalents $ 4,911
1240 Due from Other Governments 75,072
1410 Deferred Expenses 22,897
1000 Total Assets 102,880
LIABILITIES
2120 Other Liabilities Payable 28,440
2160 Accrued Wages Payable 22,425
2180 Due to Other Governments 37,366
2200 Accrued Expenses 2,258
2000 Total Liabilities 90,489
NET ASSETS
3900 Unrestricted Net Assets 12,391
3000 Total Net Assets $ 12,391
The accompanying notes are an integral part of this statement.
9
WESTLAKEE ACADEMY EXHIBIT B-1
STATEMENT OF ACTIVITIES Net(Expense)
FOR THE YEAR ENDED AUGUST 31,2004 Revenue and
Changes in Net
Program Revenues Assets
Data 1 3 4 6
Control Operating Primary Gov.
Codes Charges for Grants and Governmental
Expenses Services Contributions Activities
Primary Government:
GOVERNMENTAL ACTIVITIES:
1l Instruction $ 879,256 $ 1,670 $ 232,560 $ (645,026)
12 Instructional Resources&Media Services 11,034 - _ (11,034)
13 Curriculum and Staff Development 18,472 2,307 (16,165)
23 School Leadership 202,647 54,817 (147,830)
31 Guidance,Counseling&Evaluation Services 5,796 - 1,373 (4,423)
33 Health Services 2,362 - - (2,362)
35 Food Services 40,933 32,848 11,634 3,549
36 Cocurricular/Extracurricular Activities 5,427 4,429 1,333 335
41 General Administration 97,844 - 20,581 (77,263)
51 Plant Maintenance and Operations 68,337 - 13,665 (54,672)
53 Data Processing Services 35,805 - 11,502 (24,303)
61 Community Services 200 - 64 (136)
[TP] TOTAL PRIMARY GOVERNMENT: $ 1,368,113 $ 38,947 $ 349,836 (979,330)
Data
Control General Revenues:
Codes Taxes:
GC Grants&Contributions not Restricted 937,187
MI Miscellaneous Local and Intermediate Revenue 67,894
TR Total General Revenues 1,005,081
CN Change in Net Assets 25,751
NB Net Assets--Beginning (46,188)
PA Prior Period Adjustment 32,828
NE Net Assets--Ending $ 12,391
The accompanying notes are an integral part of this statement.
10
EXHIBIT C-1
WESTLAKE ACADEMY
BALANCE SHEET
i
GOVERNMENTAL FUNDS
AUGUST 31, 2004
Data
Control Special Total
Codes General Revenue Governmental
Fund Fund Funds
ASSETS
1110 Cash and Cash Equivalents $ 4,911 $ - $ 4,911
1240 Due from Other Governments 58,505 16,567 75,072
1260 Due from Other Funds 26,224 1,398 27,622
1410 Deferred Expenditures 10,230 12,667 22,897
1000 Total Assets $ 99,870 $ 30,632 $ 130,502
LIABILITIES AND FUND BALANCES
Liabilities: -
2120 Accounts Payable $ 25,484 $ 2,956 $ 28,440
2160 Accrued Wages Payable 21,063 1,362 22,425
2170 Due to Other Funds 1,398 26,224 27,622
2180 Due to Other Governments 37,366 - 37,366
2200 Accrued Expenditures 2,168 90 2,258
2000 Total Liabilities $ 87,479 $ 30,632 $ 118,111
Fund Balances:
Unreserved and Undesignated:
3600 Reported in the General Fund $ 12,391 $ - $ 12,391
3000 Total Fund Balances $ 12,391 $ - $ 12,391
i 4000 Total Liabilities and Fund Balances $ 99,870 $ 30,632 $ 130,502
I
1
The accompanying notes are an integral part of this statement.
11
EXHIBIT C-2
WESTLAKE ACADEMY
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE
GOVERNMENTALFUNDS
FOR THE YEAR ENDED AUGUST 31,2004
Data Special Total
Control General Revenue Governmental
Codes Fund Fund Funds
REVENUES:
5700 Total Local and Intermediate Sources $ 106,841 $ - $ 106,841
5800 State Program Revenues 987,767 8,017 995,784
5900 Federal Program Revenues - 29I,239 291,239
5020 Total Revenues 1,094,608 299,256 1,393,864
EXPENDITURES:
Current:
0011 Instruction 703,784 175,472 879,256
0012 Instructional Resources&Media Services - 11,034 11,034
0013 Curriculum&Instructional Staff Development 7,181 11,291 18,472
0023 School Leadership 170,642 32,005 202,647
0031 Guidance, Counseling&Evaluation Services 4,275 1,521 5,796
0033 Health Services - 2,362 2,362
0035 Food Services 36,213 4,720 40,933
0036 Cocurrricular/Extracurricular Activities 4,151 1,276 5,427
0041 General Administration 64,067 33,777 97,844
0051 Plant Maintenance and Operations 42,539 25,798 68,337
0053 Data Processing Services 35,805 - 35,805
0061 Community Services 200 200
6030 Total Expenditures 1,068,857 299,256 1,368,113
1200 Net Change in Fund Balances 25,751 - 25,751
0100 Fund Balance- September 1 (Beginning) (46,188) - (46,188)
1300 Prior Period Adjustment 32,828 - 32,828
3000 Fund Balance_August 31 (Ending) $ 12,391 $ - $ 12,391
The accompanying notes are an integral part of this statement,
12
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
directors and is appointed by the Town's governing body. Currently all the members of the
Board of Directors 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, required supplementary information and the elimination
of the effects of internal service activities and the use of account groups to the already
required fund financial statements and notes.
REPORTING ENTITY
The Board of Directors (the "Board") is appointed by the governing body 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." There are no component units included within the reporting entity.
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.
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.
13
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -continued
The fund financial statements provide reports on the financial condition and results of
operations for governmental fund. Since the Academy considers some governmental
funds major and reports their financial condition and results of operations in a separate
column.
MEASUREMENT FOCUS, BASIS OF ACCOUNTING,AND FINANCIAL STATEMENT
PRESENTATION
The government-wide financial statements 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 fund:
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.
14
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
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 the 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 2004, 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, 2004, employees of Westlake Academy were covered
by a health insurance plan (the Plan). The Academy paid premiums of $250 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,
2004, 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.
15
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. 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 Town's agent bank in an
amount sufficient to protect the Academy's 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, 2004, the carrying amount of the Academy's deposits (cash, certificates of
deposit, and interest-bearing savings accounts included in temporary investments) was
$4,911 and the bank balance was $1,955. The Academy's cash deposits at August 31, 2004
and during the year ended August 31, 2004 were entirely covered by FDIC insurance or by
pledged collateral held by the Town's agent bank in the Town'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 $1,971,358 and occurred during the
month of April 2004. Out of the total of $1,971,358, only $22,822 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 $2,035,512.
d. Total amount of FDIC coverage at the time of the highest combined balance
was $100,000.
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, 2004, 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 $58,505
Special Revenue 16.587
Total $75072
16
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4. INTERFUND RECEIVABLES AND PAYABLES
Interfund balances at August 31, 2004 consisted of the following individual fund balances:
Due From Due To
Other Funds Other Funds
General Fund $26,224 $1,398
Special Revenue Fund 1.398 26,224
TOTAL 27 22 27 622
NOTE 5. DEFINED BENEFIT PENSION PLAN
Plan Description. Westlake Academy contributes to the Teacher Retirement System of
Texas (TRS), a cost-sharing multiple employer defined benefit pension plan. TRS administers
retirement and disability annuities, and death and survivor benefits to employees and
beneficiaries of employees of the public school systems of Texas. It operates primarily under
the provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas Government Code,
Title 8, Subtitle C. TRS also administers proportional retirement benefits and service credit
transfer under Texas Government Code, Title 8, Chapters 803 and 805, respectively. 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.
Funding Policy. State law provides for fiscal years 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 T RS`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, 2004 were $52,538.
17
WESTLAKE ACADEMY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6. 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 $ 67,894
Food Sales 32,847
Other _ 6,100
Total 110a 841
NOTE 7. PRIOR PERIOD ADJUSTMENT
In the year ended August 31, 2003, expenditures were recorded on the books of the
Academy that were expenditures of the Town. A prior period adjustment has been recorded
for$32,898 to correct this error.
NOTE 8. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended August 31, 2003, functions related to data control codes, 0013, 0031, and
0036 had expenditures in excess of appropriations of$496, $425, and $1,224, respectively.
NOTE 9. 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.
18
Required Supplementary Information
EXHIBIT D-1
WESTLAKE ACADEMY
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL-GENERAL FUND
FOR THE YEAR ENDED AUGUST 31,2004
Data Actual Amounts Variance With
(GAAP BASIS) Final Budget
Control Budgeted Amounts Positive or
Codes
Original Final (Negative)
REVENUES:
570o Total Local and Intermediate Sources $ 46,350 $ 107,000 $ 106,841 $ (159)
5800 State Program Revenues 934,610 978,614 987,767 9,153
5020 Total Revenues 980,960 1,085,614 1,094,608 8,994
EXPENDITURES:
Current:
0011 Instruction 686,171 714,069 703,784 10,285
0013 Curriculum&Instructional Staff Development 7,000 6,685 7,181 (496)
0023 School Leadership 143,229 173,377 170,642 2,735
0031 Guidance,Counseling&Evaluation Services - 3,850 4,275 (425)
0035 Food Services 39,375 36,924 36,213 711
0036 Cocurrricular/Extracurricular Activities - 2,927 4,151 (1,224)
0041 General Administration 24,176 67,874 64,067 3,807
0051 Plant Maintenance and Operations 40,446 42,687 42,539 148
0053 Data Processing Services 36,720 36,720 35,805 915
0061 Community Services - 200 200 -
6030 Total Expenditures 977,I17 1,085,313 1,068,857 16,456
1200 Net Change in Fund Balances 3,843 301 25,751 25,450
0100 Fund Balance-September 1 (Beginning) (46,188) (46,188) (46,188) -
1300 Prior Period Adjustment 32,828 32,828 32,828 -
3000 Fund Balance-August 31 (Ending) $ (9,517) $ (13,059) $ 12,391 $ 25,450
19
vv F-0 a LJANC UCIVI r
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED AUGUST 31, 2004
BUDGETARY DATA
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 Academy compares the final amended budget to actual revenues and expenditures. The
General Fund budget appears in Exhibit D-1.
The following procedures are followed in establishing the budgetary data:
1. Prior to August 25 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 are not made
after fiscal year end.
4. Budgeted amounts are amended by the Board. All budget appropriations lapse at year end.
20
Overall Compliance
and
Internal Controls Section
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
�t
WEAVER
TIDWELL Board of Trustees
r 1 WESTLAKE ACADEMY
2650 J.T. Ottinger Road
CERTIFIED PUBLID Westlake, Texas 76262.
ACCOUNTANTS
AND CONSULTANTS
We have audited the financial statements of Westlake Academy as of and for the year
ended August 31, 2004, and have issued our report thereon dated October 11, 2004. 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
GovernmenfAuditing Standards, issued by the Comptroller General of the United States.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Westlake Academy financial
statements are free of material misstatement, we performed tests of Westlake Academy's
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 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.
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 that
i might be material weaknesses. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce to a
i relatively low level the risk that misstatements caused 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
DALLAS reporting and its operation that we consider to be material weaknesses.
1
05rre Fr„-r,f n1,f This report is intended solely for the information and use of management and is not
1721 ; ,i" 2222''` intended to be and should not be used b anyone other than theses specified parties.
Su* e 1400 Y Y p p
9.-2.-r 90.19_0
- FORT WORTH
1600 I,Vew,Seiv nrh Siren WEAVER AND TIDWELL, L.L.P.
tirrtti• 0n
Dallas, Texas
F 51 29 7936 October 11, 2004
WW W_WFAVERANDTIDW ELL.COM
AN INDEPENDENT NIENIBER OF
BAKCR TILLY
INTERNATIONAL 7
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