Belton Independent School District Belton, Texas

Transcription

1 Belton Independent School District Belton, Texas Annual Financial Management Report 2010 Schools FIRST Rating (Audit data reported for the fiscal year ending August 31, 2009) 6 Page 1

2 TABLE OF CONTENTS Description Page Introduction 3 Other Financial Information 4 Rating Indicators Descriptive 11 Rating Indicators Texas Education Agency 15 Statewide Summary Results Texas Education Agency 21 Disclosures 23 Glossary 35 7 Page 2

3 Introduction The Belton Independent School District has two measures of its financial performance published annually. First, the District engages an independent accounting firm to audit the District s financial statements at the close of each fiscal year. This annual report presents financial information in two different formats to comply with the procedures from GASB Statement No. 34 for school district audits. The government-wide financial statements in the audit reflect the flow of total economic resources in a manner similar to the financial reports of a business enterprise. These statements present a longer-term view of the District s property and debt obligations and other financial matters. The fund financial statements in the audit report the information in a similar manner to what has been presented in the past, reflecting the detail of the fund accounting system used by Texas public schools. These statements reflect the flow of current resources, tell how services were financed in the short term, and show what resources remain for future spending. This annual financial audit is used by the school district Board of Trustees, the Texas Education Agency, and others as a measure of the District s financial performance and as a record of financial and other supplementary information. The Texas Education Agency developed a new financial report card to gauge school district financial performance, similar in some ways to the Academic Excellence Indicator System (AEIS) rating system used to report student performance. The 2003 Schools FIRST (Financial Accountability Rating System of Texas) rating was the first published for this evaluation of Texas school districts financial health. The rating was based upon the District s staff, student, and financial data for the prior school year as reported through the State s PEIMS system. The Schools FIRST financial accountability system for Texas school districts, was developed in response to Senate Bill 875 of the 76 th Texas Legislature. The primary goal of Schools FIRST is to achieve quality performance in the management of school districts financial resources. A goal made more significant due to the complexity of the accounting associated with the Texas school finance system. The Schools FIRST accountability rating system assigns one of four financial accountability ratings to Texas school districts, with the highest being Superior Achievement, followed by Above-Standard Achievement, Standard Achievement, and Substandard Achievement. The Belton Independent School District has received the highest fiscal accountability rating of Superior Achievement for its 2010 School FIRST rating. The District has received this rating the past six years. The rating is based on the District s results on the twenty-two indicators developed by the Texas Education Agency and detailed as part of this report. 8 Page 3

4 To receive a rating of Superior Achievement a district must have a score of 72 to 80 points and a yes to indicator number seven. However, if a district has a result of no for indicators one, two, three, or four or for both indicators five and six, it would receive a rating of Substandard Achievement. Districts that receive a Substandard Achievement or Suspended Data Quality rating must file a corrective action plan with the Texas Education Agency. An indicator by indicator explanation of the District s results follows which includes the data used for each indicator, if applicable. A state-wide summary of district results is included. Also included in this annual financial management report are the required disclosures for the 2010 school year. Other Financial Information District Background The Belton Independent School District encompasses an area of 197 square miles in Bell County. The District is located in the central region of the State of Texas. Cities located within the District include the City of Belton, the City of Morgan s Point Resort, and the west side of the City of Temple. Belton, the largest city totally within the District, is located 45 miles south of Waco and 60 miles north of Austin. The District has twelve educational campuses, eight are situated within the city of Belton, and four within the city limits of Temple. The facilities include eight elementary schools (grades K through 5), two middle schools (grades 6, 7, & 8), and two high schools (grades 9 through 12). Enrollment on the October snapshot date was The District has a separate administration building, support facility, special education office, transportation facility, and various athletic facilities all located in Belton. Belton ISD is a RECOGNIZED district. Belton students, teachers, and staff have capped a tremendous year of learning with an acknowledgement by the State of their successes. Belton has five campuses rated as exemplary, four campuses rated as recognized and three campuses rated as acceptable. Belton ISD has implemented several strategic planning initiatives designed to improve student achievement. Specifically, the District has developed vertically aligned, TEKSbased scope and sequence documents for the core curriculum areas K-12. The BISD Scope and Sequence Curriculum Guidelines are now housed in the Eduphoria curriculum management system and are updated annually. American Reinvestment and Recovery Act dollars, commonly called stimulus funds, provided resources for personnel and professional development which bolstered the District s efforts to improve curriculum and instruction. Intensive, sustained professional development in Effective Literacy Teaching and Effective Math Teaching has produced significant change in instructional methods in the classroom. 9 Page 4

5 Curriculum personnel also used stimulus funds to implement a Response to Intervention system to provide extra time and support for students who are struggling academically. Those same funds allowed for the expansion of the Safe and Civil Schools initiative. Other curriculum-related activities include dual credit classes for BISD students from TC, including the Texas Bioscience Institute, UMHB, and TSTC-Waco. The District also offers Advanced Placement courses, the AVID program, intensive tutoring in preparation for TAKS, summer school, and G/T summer enrichment programs. The District has been recognized for its governance activities. The Education Service Center Region 12 Board of the Year and Superintendent of the Year honors have gone to Belton ISD in recent years. As representatives of the region each was selected as a State finalist. Governance The Belton Independent School District is an independent public educational agency operating under applicable laws and regulations of the State of Texas. A seven member Board of Trustees elected to staggered three-year terms by the District s residents autonomously governs the District. The Texas Education Agency provides the District s K-12 education accreditation. The District prepares its basic financial statements in conformity with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board. 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. Fund Accounting The funds and accounts of the District have been established under the rules prescribed in the Financial Accounting & Reporting Module of the Texas Education Agency Resource Guide. A major purpose of the accounting code structure is to establish the standard school district fiscal accounting system required by law. Although certain codes within the overview may be used at local option, the sequence of the codes within the structure, and the funds and chart of accounts, are to be uniformly used by all school districts in accordance with Generally Accepted Accounting Principles (GAAP). Budgets for all funds are prepared using the same method of accounting as for financial reports (modified accrual), except for the Capital Projects Fund budget. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available, except for principal and interest on general long-term debt, which is recognized when due. Legal Requirements of Budgeting Sections through of the Texas Education Code establish the legal basis for budget development in school districts. The following items summarize the legal requirements from the code: 10 Page 5

6 The superintendent is the budget officer for the district and prepares or causes the budget to be prepared. The district budget must be prepared by a date set be the State Board of Education, currently August 20. The President of the Board of Trustees must call a public meeting of the Board of Trustees, giving ten days public notice in a newspaper, for the adoption of the district budget. Any taxpayer in the District may be present and participate in the meeting. No funds may be expended in any manner other than as provided in the adopted budget. The Board does have the authority to amend the budget or adopt a supplementary emergency budget to cover unforeseen expenditures. The budget must be prepared in accordance with GAAP (generally accepted accounting principles) and State guidelines. The budget must be legally adopted before the adoption of the tax rate. Annual budgets must be prepared for the following funds: The General Fund, Debt Service Fund, and Child Nutrition Special Revenue Fund. Minutes from the Board meetings are used to record the adoption and amendments to the budget. The budget must be amended before exceeding a functional expenditure category. Budget development is scheduled through the formal budget calendar. Budget planning is part of the strategic planning process of the district. Resources are budgeted to meet the goals of the District and those of each campus and program of the District. The budget priorities are: Improving instruction Improving student achievement, especially as measured by TAKS Maintaining instructional priorities and programs Maintaining competitive salaries Implementing and monitoring well defined processes Maintaining effective and efficient operations Legislative Issues A special legislative session was called in 2006 to address the State tax system and public school funding. The session was in response to a court order that threatened to halt funding to Texas schools. The special legislative session resulted in significant changes to the State tax system. The manner in which the District s total Maintenance & Operating funding was calculated for the and following school-years also changed. The same weighted funding system is used to distribute State education funds, but the guaranteed yield and basic allotment have been increased. This was done to increase the State s share of the District s funding and to replace the local tax revenue lost through the reduction in the property tax rate (tax rate compression). 11 Page 6

7 School Year Maintenance Tax Rate $ $ $1.04 The formulas include State funds for the new mandated programs (High School Allotment) and salary increases ($2,000 per teacher, counselor and librarian). However, the State did not include increases to existing allotments for programs such as transportation, special education, or career and technology. The funding formulas allow the District to receive sufficient funds to maintain its revenue per student in Weighted Average Daily Attendance (WADA). The Hold harmless provision is roughly equal to our 2007 revenue under the pre-hb1 school finance law. No consideration was made for increases in other salaries or other major cost drivers districts are experiencing. New discretionary funds were only available with the new super pennies of equalized funding. The first four pennies have been utilized by the District since the 2007 school year and do not require voter approval. For the 2009 school year the Board approved a Maintenance and Operating tax rate of $1.17 to access the remaining available 13 pennies of equalized enrichment funding provided by the State. The subsequent Tax Ratification Election was successful. The Maintenance and Operating tax rate of $1.17 continues in the current year. School funding formulas were modified in the most recent legislative session to provide an additional $120 per student in Weighted Average Daily Attendance to schools. This was provided in part to pay for the mandated pay raise for teachers. Property Taxes Property taxes are levied by October 1st on the assessed value listed as of the prior January 1 for all real and business personal property located in the District in conformity with Subtitle E, Texas Property Tax Code. Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1 st of the year following the year in which imposed. The Bell County Tax Appraisal District provides for the collection of current and delinquent taxes. The District and the City of Belton share a position on the appraisal district board to represent their interests. Tax receipts are transferred by the appraisal district directly to the District s TexPool investment account to eliminate the need for the delivery and deposit of physical checks. Personnel Costs Personnel costs account for approximately 81% of the General Fund budget. The newyear personnel cost estimates will rely on enrollment projections at the elementary level and master schedules that are built at the other campuses, as well as other personnel needs. Recommendations are made each year and approved by the Board for salary increases as well as for new positions to support the District s goals and enrollments. 12 Page 7

8 The remaining budget appropriations are allocated each year for services, supplies, travel, debt service, capital outlay, and other operating costs. Expenditures, Control, and Approvals When fixed costs such as salaries, benefits, and utilities are set aside, the remainder of the funds available for discretionary expenditures is a small in comparison. Expenditures for services, supplies, travel, training, and other costs to support the goals of the district are approximately 16% of the General Fund budget. These discretionary expenditure appropriations are allocated between approximately 30 organizations or cost centers (campuses, departments, etc.). Each organization s leader is the budget manager. The budget manager is accountable for their organization s portion of the budget. Each budget manager is authorized to approve the expenditure of funds within their respective organization, provided that funds are expended in accordance with District purchasing procedures and legal requirements. The District s latest Administrative Cost Ratio, of 9.6%, has been less than the standard, of 12.5%, set on administrative expenditures by the Texas Education Agency each year. This ratio compares the cost for administration to the costs for instructional and counseling services. Cash Management The Districts cash management goals are as follows: Ensure proper collateralization of deposits. Ensure adequate balances to cover cash disbursement needs. Maximize interest earnings. Minimize bank charges. The District uses its local school depository bank and its local government investment pools to meet its investment goals and cash flow needs. Cash Balances are monitored daily by the District through online banking. The District minimizes lower interest earning bank balances by only transferring the funds necessary to cover the dollar amount for outstanding checks, plus a small reserve. The remainder of the Districts available balances are invested in higher interest earning investment pool accounts. These accounts are very liquid and are available on a daily basis. Investment Policies The Board of Trustees has adopted a written investment policy as defined in the Public Funds Investment Act of This policy authorizes the District to invest in obligations of the U.S. Treasury, the State of Texas, and certain U.S. Agencies. The District may also invest in certificates of deposit, repurchase agreements, commercial paper, no-load money market and no-load mutual funds, and banker s acceptances as permitted by Chapter 2256, Texas Government Code. Public funds investment pools are also permitted by Chapter 2256, Texas Government Code. 13 Page 8

9 The main goal of the investment program is to ensure its safety, as well as to maximize financial returns within current market conditions in accordance with the District s investment policy. Monitoring is performed monthly as investment reports are submitted to the Board of Trustees for review. In addition, the District investment officer annually presents a comprehensive report on the investment program and investment activity. The District s investment officers also regularly communicate with industry professionals and financial advisors. The financial press is also an important monitoring tool for investments. Reserve Policies General Fund The District strives to maintain a general fund balance equal to approximately 20 to 25% of General Fund expenditures sufficient to maintain fiscal independence in the event of a financial need or crisis. Debt Service Fund The district maintains a debt service fund balance. If the fund balance exceeds 1/12 th of the previous year s required principal and interest payments for all the outstanding bonds, the excess is considered a reserve and is subject to rebate under arbitrage regulations. This fund balance may be used to reduce the District s outstanding debt service. Child Nutrition Fund Fund balances for food service should not exceed three months of average food service operations expenditures. Financial Strength One measure of a district s financial strength is its ability to pay for its ongoing current year accounts payable and payroll obligations without having to borrow funds. The District uses its General Fund, fund balance, to help meet these cash flow needs. School districts carry these balances to pay obligations due when the State delays revenue payments, when scheduled State revenue payments don t meet cash flow needs, and until tax collections are realized each year. Fund balances may also be used for emergency expenditures due to unexpected events and for planned one-time expenditures. Fund balances can be a significant source of General Fund interest revenue. Facilities Acquisition and Construction Belton ISD utilizes industry professionals and local committees to plan for the growth that is occurring in the area. Since 2002 the District has completed an outside district-wide facilities study and two thorough demographic studies of growth in the District. A third study is in the planning stages. The District continues to monitor growth and student populations with its Transfinder system. This system is used to set the District s attendance boundaries and it is the primary tool for the efficient routing of buses for student transportation needs. Through the subsequent long range facilities planning committee meetings the District has recommended three bond issues in recent years that have been passed by voters. Major improvements and classroom additions to the high school, two middle schools, and two elementary schools were included in the first bond issue in As the result of the second bond issue in 2006, an eighth elementary school campus opened its doors at the beginning of the current 2008 school year. In addition, this bond has provided for a new 14 Page 9

10 swim center, the Tyler Elementary kitchen renovation, the Sparta Elementary core expansion, and several civil projects. The most recent 2010 bond issue will provide for a South Belton Middle School. Debt Administration Debt service is a major area of cost due to the District s building program, which is primarily financed by the sale of general obligation bonds. Revenue for the debt service fund is received from the local Interest and Sinking property tax and from the State under the Instructional Facilities Allotment (IFA) program and the Existing Debt Allotment (EDA) program. EDA and IFA funding combined now account for or pay approximately 37% of the eligible debt service. The State contribution does decrease as the District s tax base increases each year. All principal and interest payments made by the District are due February 15 th and August 15 th of each year. The District s bonds presently carry a favorable rating with Moody s Investment Service and with Standard and Poor s Investor Service. Loans and Leases The District accounts for short-term debts through the appropriate funds. Short-term debts include notes and leases made in accordance with the provisions of the Texas Education Code. The proceeds from loans and leases are shown in the financial statements as Other Resources. Proceeds have been used in the past to purchase portable buildings, computer hardware, and school buses. Risk Management The District s risk management program encompasses various means of protecting the District against loss. The District has insurable risks in various areas, including property, casualty, automobile, comprehensive liability and worker s compensation. Property, casualty, automobile, and comprehensive liability insurance is provided by participation in a public entity risk pool administered by the Texas Association of School Boards and worker s compensation insurance coverage is provided by participation in a public entity risk pool administered by the Texas Association of School Boards. Independent Audit and Financial Reporting In accordance with Section , Texas Education Code, public school districts in Texas have their accounts audited annually. The audit is made on an organization-wide basis, and involves all fund types and accounts groups of the school district. The audit is also designed to meet the requirements of the Federal Single Audit Act of 1984 and the related provisions of OMB Circular A-133 Audits of State, Local Governments, and Non-Profit Organizations. The audit is submitted to the Texas Education Agency for review. This financial information is then submitted to the Texas Education Agency electronically through the annual mid-year PEIMS submission. These submissions are designed to meet the specific monitoring needs of the Texas Education Agency. The District is also required to publish one audit schedule each year in a local newspaper. 15 Page 10

11 Belton Independent School District 2009 Schools FIRST Indicators Was The Total Fund Balance Less Reserved Fund Balance Greater Than Zero In The General Fund? School districts must legally have a fund balance to ensure adequate funding for operations. The District had a positive amount of fund balance cash (savings). The unreserved fund balance was $13,717, Was the Total Unrestricted Net Asset Balance (Net of Accretion of Interest on Capital Appreciation Bonds) In the Governmental Activities Column in the Statement of Net Assets Greater than Zero? (Or if the District's 5 Year % Change in Students was 10% or more then passed) This indicator simply asks, Did the district s total assets exceed the total amount of liabilities (according to the very first financial statement in the annual audit report)? This indicator recognizes that high-growth districts incur large amounts of debt to fund construction, and that total debt may exceed the total amount of assets under certain circumstances. The district s net asset balance was $15,246, Were There No Disclosures In The Annual Financial Report And/Or Other Sources Of Information Concerning Default On Bonded Indebtedness Obligations? This indicator seeks to make certain that the District has paid its obligations on bonds issued to pay for school construction, etc. There were no such disclosures. 4. Was The Annual Financial Report Filed Within One Month After November 27th or January 28th Deadline Depending Upon The District's Fiscal Year End Date (June 30th or August 31st)? The paper and electronic copy of the annual audit were submitted within the deadline. 5. Was There An Unqualified Opinion in Annual Financial Report? The district received an unqualified opinion. This represents a clean audit. A qualification on the financial audit means that something needs to be corrected in the District s reporting or financial controls. 6. Did The Annual Financial Report Not Disclose Any Instance(s) Of Material Weaknesses In Internal Controls? No material weaknesses in internal controls were disclosed. An internal weakness in internal controls would create a risk of the District not being able to properly account for its use of public funds. 16 Page 11

12 7. Did the Districts Academic Rating Exceed Academically Unacceptable? The district s rating exceeded the requirement. This indicator asks whether the district s accreditation status is in good standing. 8. Was The Three-Year Average Percent Of Total Tax Collections (Including Delinquent) Greater Than 98%? This indicator measures your district s success in collecting the taxes, including delinquent taxes, owed to you by your community s businesses and homeowners, placing a 98 percent minimum collections standard. A district earns up to five points under this indicator based upon its relative performance. The district s three year average total tax collections (including delinquent) was 99.06%. 9. Did The Comparisons Of PEIMS Data To Like Information In Annual Financial Report Result In An Aggregate Variance Of Less Than 3 Percent Of Expenditures Per Fund Type (Data Quality Measure)? The variance of the District s data reported through the PEIMS system to the actual audit was less than three percent. This indicator measures the quality a data reported to PEIMS. 10. Were Debt Related Expenditures (Net Of Instructional Facilities Allotment And/Or Existing Debt Allotment) < $ Per Student? (If The District's Five-Year Percent Change In Students = Or > 7%, Or If Property Taxes Collected Per Penny Of Tax Effort > $200,000, Then the district receives five points. The District s calculated five-year percent change in students of 19.29% passed the indicator. The Districts debt related expenditures (Net Of IFA And/Or EDA Allotment) per pupil were $ A district earns up to five points under this indicator based upon its relative performance. 11. Was There No Disclosure In The Annual Audit Report Of Material Noncompliance? There were no disclosures of material noncompliance. The District did not fail to comply with the laws, rules and regulations for a government entity. A district earns five points under this indicator. 12. Did The District Have Full Accreditation Status In Relation To Financial Management Practices? (e.g. No Conservator Or Monitor Assigned) No Conservator or Monitor was assigned to the District by the Texas Education Agency due to financial issues. A district earns five points under this indicator. 13. Was The Aggregate Of Budgeted Expenditures And Other Uses Less Than The Aggregate Of Total Revenues, Other Resources and Fund Balance In General Fund? The district s expenditures and other uses for the fiscal year were less than the total funds available. A district earns five points under this indicator. This indicator is also considered passed since the District adopted a balanced budget. 17 Page 12

13 14. If The District's Aggregate Fund Balance In The General Fund And Capital Projects Fund Was Less Than Zero, Were Construction Projects Adequately Financed? (To Avoid Creating Or Adding To The Fund Balance Deficit Situation) Major construction projects were financed with general obligation bonds, the proceeds of which are accounted for and reported in the Capital Projects fund. A district earns five points under this indicator. 15. Was The Ratio Of Cash And Investments To Deferred Revenues (Excluding Amount Equal To Net Delinquent Taxes Receivables) In The General Fund = Or > 1:1? (If Deferred Revenues are Less Than Net Delinquent Taxes Receivable) The ratio of cash and investments to deferred revenues was 129:1 indicating that the district has sufficient fund balances and does not rely on funds that represent resources of future periods. The ratio was high since the amount of deferred revenue used for the calculation is $99,147 compared to the cash in the General Fund of $12,862,409. A district earns five points under this indicator. 16. Was The Administrative Cost Ratio Less Than The Threshold Ratio. The Texas Education Agency sets a cap of 12.5% on the percentage of budget Texas school districts can spend on administrative costs for a district our size. The District s administrative cost ratio was 9.63%. A district earns five points under this indicator. 17. Was The Ratio Of Students To Teachers Within the Ranges According To District Size? According to the Academic Excellence Indicator System (AEIS), the District s student to teacher ratio was 14.77, within the range of 13 to 22. A district earns five points under this indicator based upon its relative performance. 18. Was The Ratio Of Students To Total Staff Within the Ranges According To District Size? According to the AEIS, the District s student to total staff ratio was 6.765, slightly outside of the range of 6.8 to 14 for four out of five available points. 19. Was The Total Fund Balance In The General Fund More Than 50% And Less Than 150% Of Optimum According To The Fund Balance And Cash Flow Calculation Worksheet In The Annual Financial Report? The total fund balance in the General Fund was $13,757,847 which is 136.7% of the optimum fund balance of $10,058,947 on August 31, 2009, as reported in our annual financial audit. A district earns five points under this indicator. 20. Was The Decrease In Undesignated Unreserved Fund Balance Less Than 20% Over Two Fiscal Years?(If 1.5 Times Optimum Fund Balance Is Less Than Total Fund Balance In General Fund Or If Total Revenues Is 18 Page 13

14 Greater Than Operating Expenditures In The General Fund, Then The District Receives 5 Points) The undesignated unreserved fund balance increased in the 2009 school year as reported in our annual financial audit. A district earns five points under this indicator based upon its relative performance. 21. Was The Aggregate Total Of Cash And Investments In The General Fund More Than $0? The District s General Fund audited cash investments balance at 2009 fiscal year-end was $12,852, Were Investment Earnings In All Funds (Excluding Debt Service Fund and Capital Projects Fund) More Than $20 Per Student? Investment earnings for all funds were $184,226 or $21.63 per student. A district earns five points under this indicator based upon its relative performance. 19 Page 14

15 Financial Integrity Rating System of Texas (FIRST) Report # Indicator Description Was the total fund balance less reserved fund balance greater than zero in the general fund? Yes Yes 2 Was the total unrestricted net asset balance (net of accretion of interest on capital appreciation bonds) in the governmental activities column in the statement of net assets greater than zero (if the district s 5 year % change in students was 10% more)? Yes Yes 3 4 Were there no disclosures in the annual financial report and/or other sources of information concerning default on bonded indebtedness obligations? Was the annual financial report filed within one month after November 27 th or January 28 th deadline depending upon the district s fiscal year end date (June 30 th or August 31 st )? 5 Was there an unqualified opinion in the Annual Financial Report? Yes Yes 6 Did the annual financial report not disclose any instance(s) of material weaknesses in internal controls? 7 Did the district s academic rating exceed academically unacceptable? Was the 3-year average percent of total tax collections (including delinquent) greater than 98%? Did the comparison of PEIMS data to like information in annual financial report result in an aggregate variance of less than 3 percent of expenditures per fund type (data quality measure)? Were debt related expenditures (net of IFA and/or EDA allotment) < $350 per student? (if the district s five-year percent change in students = or > 7%, or if property taxes collected per penny of tax effort > $200,000 per student) Yes Yes Yes Yes Yes Yes Was there no disclosure in the annual audit report of material noncompliance? /12 - /13 - /14 13/15 14/16 15/17 Did the district have full accreditation status in relation to financial management practices (e.g. no conservator or monitor assigned)? Was the percent of operating expenditures (functions 11, 36, 93, 95) expended for instruction more than 65%? Was the percent of operating expenditures (functions 11, 12, 31, 33, 36, 93, 95) expended for instruction more than 65%? Was the aggregate of budgeted expenditures and other uses less than the aggregate of total revenues, other resources and fund balance in general fund? If the district s aggregate fund balance in the general fund and capital projects funds was less than zero, were construction projects adequately financed (to avoid creating or adding to the fund balance deficit situation)? Was the ratio of cash and investments to deferred revenues (excluding amount equal to net delinquent taxes receivable) in the general fund greater than or equal to 1:1? (if deferred revenues are less than net delinquent taxes receivable) 5 5 NA 1 NA /18 Was the administrative cost ratio less than the threshold ratio? /19 Was the ratio of students to teachers within the ranges shown below according to district size? /20 Was the ratio of students to total staff within the ranges shown below according to district size? /21 20/22 Was the total fund balance in the general fund more than 50% and less than 150% of optimum according to the fund balance and cash flow calculation worksheet in the annual financial report? Was the decrease in undesignated unreserved fund balance < 20% over two fiscal years? (if 1.5 times optimum fund balance < total fund balance in general fund or it total revenues > operating expenditures in the general fund, then district receives 5 points).? /23 Was the aggregate total of cash and investments in the general fund more than $0? /24 Were investment earnings in all funds more than $20 per student? (Maximum in 2009 was 4 points) 5 4 TOTAL Superior Achievement Page 15

16 Financial Integrity Rating System of Texas DISTRICT STATUS DETAIL Name: BELTON ISD(014903) Publication Level 1: 6/11/ :03:10 PM Status: Passed Publication Level 2: None Rating: Superior Achievement Last Updated: 6/11/ :03:10 PM District Score: 79 Passing Score: 56 # Indicator Description Updated Score 1 Was The Total Fund Balance Less Reserved Fund Balance Greater Than Zero In The General Fund? 3/30/2010 1:32:00 PM Yes 2 Was the Total Unrestricted Net Asset Balance (Net of Accretion of Interest on Capital Appreciation Bonds) In the Governmental Activities Column in the Statement of Net Assets Greater than Zero? (If the District's 5 Year % Change in Students was 10% more) 3/30/2010 1:32:00 PM Yes 3 Were There No Disclosures In The Annual Financial Report And/Or Other Sources Of Information Concerning Default On Bonded Indebtedness Obligations? 3/30/2010 1:32:00 PM Yes 4 Was The Annual Financial Report Filed Within One Month After November 27th or January 28th Deadline Depending Upon The District's Fiscal Year End Date (June 30th or August 31st)? 3/30/2010 1:32:00 PM Yes 5 Was There An Unqualified Opinion in Annual Financial Report? 3/30/2010 1:32:01 PM Yes 6 Did The Annual Financial Report Not Disclose Any Instance(s) Of Material Weaknesses In Internal 3/30/2010 1:32:01 PM Yes 21 Page 16

17 Controls? 1 Multiplier Sum 7 Did the Districts Academic Rating Exceed Academically Unacceptable? 3/30/2010 1:32:01 PM 5 8 Was The Three-Year Average Percent Of Total Tax Collections (Including Delinquent) Greater Than 98%? 3/30/2010 1:32:01 PM 5 9 Did The Comparison Of PEIMS Data To Like Information In Annual Financial Report Result In An Aggregate Variance Of Less Than 3 Percent Of Expenditures Per Fund Type (Data Quality Measure)? 3/30/2010 1:32:02 PM 5 10 Were Debt Related Expenditures (Net Of IFA And/Or EDA Allotment) < $ Per Student? (If The District's Five-Year Percent Change In Students = Or > 7%, Or If Property Taxes Collected Per Penny Of Tax Effort > $200,000 Per Student) 3/30/2010 1:32:02 PM 5 11 Was There No Disclosure In The Annual Audit Report Of Material Noncompliance? 3/30/2010 1:32:02 PM 5 12 Did The District Have Full Accreditation Status In Relation To Financial Management Practices? (e.g. No Conservator Or Monitor Assigned) 3/30/2010 1:32:02 PM 5 13 Was The Aggregate Of Budgeted Expenditures And Other Uses Less Than The Aggregate Of Total Revenues, Other Resources and Fund Balance In General Fund? 3/30/2010 1:32:02 PM 5 22 Page 17

18 14 If The District's Aggregate Fund Balance In The General Fund And Capital Projects Fund Was Less Than Zero, Were Construction Projects Adequately Financed? (To Avoid Creating Or Adding To The Fund Balance Deficit Situation) 3/30/2010 1:32:03 PM 5 15 Was The Ratio Of Cash And Investments To Deferred Revenues (Excluding Amount Equal To Net Delinquent Taxes Receivable) In The General Fund Greater Than Or Equal To 1:1? (If Deferred Revenues Are Less Than Net Delinquent Taxes Receivable) 3/30/2010 1:32:03 PM 5 16 Was The Administrative Cost Ratio Less Than The Threshold Ratio? 3/30/2010 1:32:03 PM 5 17 Was The Ratio Of Students To Teachers Within the Ranges Shown Below According To District Size? 3/30/2010 1:32:03 PM 5 18 Was The Ratio Of Students To Total Staff Within the Ranges Shown Below According To District Size? 3/30/2010 1:32:04 PM 4 19 Was The Total Fund Balance In The General Fund More Than 50% And Less Than 150% Of Optimum According To The Fund Balance And Cash Flow Calculation Worksheet In The Annual Financial Report? 3/30/2010 1:32:04 PM 5 20 Was The Decrease In Undesignated Unreserved Fund Balance < 20% Over Two Fiscal Years?(If 1.5 Times Optimum Fund Balance < Total Fund Balance In General Fund Or If Total Revenues > Operating Expenditures In The General Fund,Then District Receives 5 Points) 3/30/2010 1:32:04 PM 5 21 Was The Aggregate Total Of Cash And Investments 3/30/ Page 18

19 In The General Fund More Than $0? 1:32:05 PM 22 Were Investment Earnings In All Funds (Excluding Debt Service Fund and Capital Projects Fund) More Than $20 Per Student? 3/30/2010 1:32:05 PM 5 79 Weighted Sum 1 Multiplier Sum 79 Score DETERMINATION OF RATING A. Did The District Answer 'No' To Indicators 1, 2, 3 Or 4? OR Did The District Answer 'No' To Both 5 and 6? If So, The District s Rating Is Substandard Achievement. B. Determine Rating By Applicable Range For summation of the indicator scores (Indicators 7-22) Superior Achievement and Yes to indicator 7 Above Standard Achievement or >= 72 and No to indicator 7 Standard Achievement Substandard Achievement <56 or No to one default indicator INDICATOR 17 & 18 RATIOS Indicator 17 Ranges for Indicator 18 Ranges for Ratios Ratios District Size - Number of Low High District Size - Number of Low High 24 Page 19

20 Students Between Students Between < < => => Page 20

21 OVERALL STATISTICS STATUS COUNTS Status Count % Total Enrollment % Total Enrollment Passed 1, % 4,540, % Failed % 21, % Total 1, % 4,561, % RATING COUNTS Ratings Count % Total Enrollment % Total Enrollment Superior Achievement % 3,894, % Above Standard Achievement % 618, % Standard Achievement % 27, % Substandard Achievement % 21, % Total 1, % 4,561, % ANSWERS BY INDICATOR Indicator Yes No Total x x x x x x x x x x x x x x x x x x x x x x x x x Page 21

22 x x x x x x x x x x x x x x 984 x x x x x x x x x 1013 x x x x x x x x 999 x x x x x x 1027 x x x x x x 1018 x x x x x x 1026 x x x x x x x x x x x 985 x x x x x x x x x x x x x x x 1030 x x x x x x x Last Updated: Friday, September 10, :03:41 PM 27 Page 22

23 Annual Disclosures School Year Reimbursements for District Officers Officer Title Lodging Meals Transportation Fuel Registration Other Dr. Vivian Baker Superintendent $ 2, $ $ 1, $ - $ 3, $ Randy Pittenger Board Member $ $ $ $ - $ $ - Royce Boren Board Member $ 1, $ $ $ - $ $ Penny Digby Board Member $ $ $ $ - $ $ Connie Demerson Board Member $ 1, $ $ $ - $ $ Jeannette Kelley Board Member $ 1, $ $ $ - $ $ Tim Stephens Board Member $ $ $ $ - $ $ Mike Cowan Board Member $ $ $ $ - $ $ Compensation From Other Schools or Entities - Superintendent None Gifts to Officers of $250 or More in Aggregate None Board Member Business Transactions with the District None Superintendent's Contract Attached 28 Page 23

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35 Academic Excellence Indicator System (AEIS): The Texas Education Agency pulls together a wide range of information on the performance of students in each school and district in Texas every year. This information is put into the annual AEIS reports, which are available each year in November. The performance indicators include: TAKS passing rate by grade, by subject, student subpopulation, and by all grades tested; SDAA performance Attendance rate for the full year; Dropout rate (by year); Completion and dropout rates (4- year longitudinal); Percent of high school students completing an advanced course; Percent of graduates completing the Recommended High School Program; AP and IB examination results; TAAS / TASP equivalency rate; and SAT and ACT examination -- participation and results. Accountability Rating: The rating assigned by the Academic Rating System to a school district or campus. The four indicators used to determine the accountability rating for a campus or district are their performance on (1) TAKS, (2) SDAA, (3) Completion rate and (4) Annual dropout rate. Based on these indicators every campus and district is assigned one of the following: District and Campus Ratings: Exemplary, Recognized, Academically Acceptable, Academically Unacceptable, Not Rated: Alternative Education, Not Rated: Other, and Not Rated: Data Integrity Issues. Although registered alternative education campuses and charters will not be rated in 2004 based on academic performance, the commissioner of education has the authority to assign an Academically Unacceptable rating to address problems identified through Accountability System Safeguards, Performance-Based Monitoring, or other monitoring and compliance investigations. Accounting: A standard school fiscal accounting system must be adopted and installed by the board of trustees of each school district. The accounting system must conform to generally accepted accounting principles. This accounting system must also meet at least the minimum requirements prescribed by the state board of education, subject to review and comment by the state auditor. Ad Valorem Property Tax: Literally the term means "according to value." Ad valorem taxes are based on a fixed proportion of the value of the property with respect to which the tax is assessed. They require an appraisal of the taxable subject matter's worth. General property taxes are almost invariably of this type. Ad valorem property taxes are based on ownership of the property, and are payable regardless of whether the property is used or not and whether it generates income for the owner (although these factors may affect the assessed value). Adopted Tax Rate: The tax rate set by the school district to meet its legally adopted budget for a specific calendar year. All Funds: A school district's accounting system is organized and operated on a fund basis where each fund is a separate fiscal entity in the school district much the same as various corporate subsidiaries are fiscally separate in private enterprise. All Funds refers to the combined total of all the funds listed below: The General Fund Special Revenue Funds (Federal Programs, Federally Funded Shared Services, State Programs, Shared State/Local Services, Local Programs) Debt Service Funds Capital Projects Funds Enterprise Funds for the National School Breakfast and Lunch Program Assessed Valuation: A valuation set upon real estate or other property by a government as a basis for levying taxes. Auditing: Accounting documents and records must be audited annually by an independent auditor. Texas Education Agency (TEA) is charged with review of the independent audit of the local education agencies. Beginning Fund Balance: The General Fund balance on the first day of a new school year Page 35

36 For most school districts this is equivalent to the fund balance at the end of the previous school year. Budget: The projected financial data for the current school year. Budget data are collected for the general fund, food service fund, and debt service fund. Budgeting: Not later than August 20 of each year, the superintendent (or designee) must prepare a budget for the school district if the fiscal year begins on September 1. (For those districts with fiscal years beginning July 1, this date would be June 20.) The legal requirements for funds to be budgeted are included in the Budgeting module of the TEA Resource Guide. The budget must be adopted before expenditures can be made, and this adoption must be prior to the setting of the tax rate for the budget year. The budget must be itemized in detail according to classification and purpose of expenditure, and must be prepared according to the rules and regulations established by the state board of education. The adopted budget, as necessarily amended, shall be filed with TEA through the Public Education Information Management System (PEIMS) as of the date prescribed by TEA. Capital Outlay: This term is used as both a Function and an Object. Expenditures for land, buildings, and equipment are covered under Object The amount spent on acquisitions, construction, or major renovation of school district facilities are reported under Function 80. Capital Project Funds: Fund type used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds.) Cash: The term, as used in connection with cash flows reporting, includes not only currency on hand, but also demand deposits with banks or other financial institutions. Cash also includes deposits in other kinds of accounts or cash management pools that have the general characteristics of demand deposit accounts in that the governmental enterprise may deposit additional cash at any time and also effectively may withdraw cash at any time without prior notice or penalty. Chapter 41: A key "equity" chapter in the Texas Education Code (TEC) is Chapter 41. This chapter is devoted to wealth equalization through the mechanism of recapture, the recovery of financial resources from districts defined by the state as high property wealth. Resources are recovered for the purpose of sharing them with low-wealth districts. Districts that are subject to the provisions of Chapter 41 must make a choice among several options in order to reduce their property wealth and share financial resources. Comptroller Certified Property Value: The district's total taxable property value as certified by the Comptroller's Property Tax Division (Comptroller Valuation). Debt Service Fund: Governmental fund type used to account for the accumulation of resources for, and the payment of, general longterm debt principal and interest. Debt Services: Two function areas (70 and 71) and one Object (6500) are identified using this terminology "debt services." Function 70 is a major functional area that is used for expenditures that are used for the payment of debt principal and interest including Function 71. Expenditures that are for the retirement of recurring bond, capital lease principal, and other debt, related debt service fees, and for all debt interest fall under Function 71. Object 6500 covers all expenditures for debt service. Deferred Revenue: Resource inflows that do not yet meet the criteria for revenue recognition. Unearned amounts are always reported as deferred revenue. In governmental funds, earned amounts also are reported as deferred revenue until they are available to liquidate liabilities of the current period. Designated Fund Balance: The designated fund balance represents tentative plans for the future use of financial resources. Designations require Board action to earmark fund balance for bona fide purposes that will be fulfilled within a reasonable period of time. Effective Tax Rate: Provides the unit with approximately the same amount of revenue it had the year before on properties taxes in both years. A comparison of the effective tax rate to 41 6 Page 36