WeaverViews. Duncanville Independent School District

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1 WeaverViews Duncanville Independent School District Board Meeting November 27,

2 Overview Introduction Audit Process and Results Financial Highlights Questions 2

3 Introductions 3

4 The Firm of Texas Largest independent CPA firm based in the Southwest 7 Texas Locations 600 Employees Fort Worth Dallas 90+ Partners Midland - Auditor of more Public School Districts in the state than any other Public Accounting Firm. - Auditor of three of the five largest Districts in the state. - Auditor of over 50 Texas Public Schools and Charter Schools. Austin San Antonio Conroe Houston 4

5 Audit Process and Results 5

6 Engagement Timeline Discuss Developments/ Issues Initial Audit Planning Board Meeting November 27 Continuous Communication Interim Fieldwork June Exit Meeting November 8 Final Fieldwork September 24 October 13 Weekly meetings were held through out the process with District staff to discuss status of items requested and work performed. 6

7 Audit Process The audit was performed in accordance with Generally Accepted Auditing Standards (GAAS), Generally Accepted Government Auditing Standards (GAGAS), and the Single Audit Act and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The audit process was a risk-based approach in which we identified potential areas of risk that could lead to material misstatement of the financial statements. We tailored our audit programs and resources to specifically address the following areas of risk: Foundation Aid Fictitious Vendors Fictitious Payroll Expenditures Journal Entries 7

8 Audit Results: Financial Statements Type of report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? Significant deficiencies that are not material weaknesses? Noncompliance material to financial statements noted? No No No 8

9 Audit Results: Federal Awards Type of report issued on compliance for major programs: Type of auditee: Internal control over major programs: Material weakness(es) identified? Significant deficiencies that are not material weaknesses? Any audit findings required to be reported under 2 CFR (a)? Unmodified High risk No No No Major Programs: Child Nutrition Cluster (10.553, and ) 9

10 Financial Highlights Financial Highlights 10

11 Financial Highlights Comparison of Revenues by Source Governmental Funds $14,836,180 10% FY 2017 Revenues $61,859,412 42% Total Local and Intermediate Sources $13,969,189 10% FY 2016 Revenues $56,395,891 40% Total Local and Intermediate Sources State Program Revenues State Program Revenues $69,152,852 48% Federal Program Revenues $69,629,974 50% Federal Program Revenues 11

12 Financial Highlights Comparison of Revenues by Source Governmental Funds Fiscal year 2017 revenues totaled $145.8 million, an increase of $5.8 million or 4.2% compared to Changes are as follows: Local and intermediate sources increased $5.5 million primarily due to increasing property values in the area. State programs decreased $477 thousand primarily due to the decrease in District s portion of the EDA Allotment. Federal programs increased $867 thousand primarily due to the District s E-Rate filing reimbursement received in FY2017 ($1.3 million), and a decrease in the District s federal funding of Title I, Part A (a decrease of $499 thousand). 12

13 Financial Highlights Comparison of Expenditures Governmental Funds FY 2017 Expenditures FY 2016 Expenditures 12.9% 0.2% 12.1% 0.3% 43.1% Instruction, Curriculum, and Media Services Instructional and School Leadership Student Support, Food Services, and Co-Curricular 23.3% 0.2% 34.6% Instruction, Curriculum, and Media Services Instructional and School Leadership Student Support, Food Services, and Co-Curricular 9.5% General Administration 9.2% 0.2% General Administration 3.2% 12.6% 6.2% Facilities Maintenance, Security, and Data Processing Community Services Debt Service 16.0% 1.9% 10.2% 4.4% Facilities Maintenance, Security, and Data Processing Community Services Debt Service Facilities Acquisition and Construction Facilities Acquisition and Construction Intergovernmental Charges Intergovernmental Charges 13

14 Financial Highlights Comparison of Expenditures-Governmental Funds Fiscal year 2017 expenditures totaled $158.7 million, a decrease of $43.2 million or 21.4% compared to Largest changes are as follows: Facilities Maintenance, Security, and Data Processing decreased $17 million due to completion of the bond program in FY2016. This is made up of Data Processing (decrease of $12 million) as well as Facilities Maintenance capital expenditures (decrease of $3 million). Facilities Acquisition and Construction decreased $26.6 million due to decreased activity in construction projects in FY2017 as the bond program wrapped up. 14

15 Financial Highlights Governmental Funds Fund Balance Fund Balance $ Change % Change General Fund $ 44,617,522 $ 40,478,545 $ 4,138,977 10% Debt Service Fund 12,994,572 11,396,221 1,598,351 14% Capital Projects Fund 16,591,284 35,448,074 (18,856,790) -53% Nonmajor Funds 1,019, , ,125 20% $ 75,223,089 $ 88,171,426 $ (12,948,337) -15% Governmental funds fund balances decreased by approximately $12.9 million. This decrease is due primarily to a $18.9 million decrease in the Capital Projects Fund related to the wrap up of the bond program. There was also a $4.1 million increase in the General Fund, related to the increase in taxable property values in the area, as well as reduction in expenditures (namely Facilities Maintenance). In addition, there was a $1.5 million increase in the Debt Service Fund, related to the increase in taxable property (which was also offset by a I&S tax rate decrease). 15

16 Financial Highlights General Fund- Fund Balance General Fund Unassigned Fund balance $ 44,387,675 $ 39,330,048 Expenditures $ 104,185,359 $ 108,049,722 43% 36% Expenditures/Month $ 8,682,113 $ 9,004,144 Months in Fund Balance It is essential that Districts maintain adequate levels of fund balance to mitigate current and future risks (e.g., revenue shortfalls and unanticipated expenditures) and to ensure stable tax rates. TEA recommends a minimum unassigned fund balance of about two-and-a-half months of operating expenditures plus enough to cover anticipated cash flow deficits. 16

17 We appreciate the opportunity to work with Duncanville Independent School District and look forward to our continued relationship. 17

18 Discussion Contact Us Sara Dempsey, CPA, Engagement Partner Claire Wootton, CPA Audit Manager