WILLIAMSON COUNTY AND CITIES HEALTH DISTRICT BASIC FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORTS, WITH OTHER SUPPLEMENTAL INFORMATION

Transcription

1 WILLIAMSON COUNTY AND CITIES HEALTH DISTRICT BASIC FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORTS, WITH OTHER SUPPLEMENTAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2013

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3 TABLE OF CONTENTS Introductory Section Letter of Transmittal 1-6 Listing of Officials 7 Financial Section Independent Auditors Report 8-10 Management s Discussion and Analysis Government-Wide Basic Financial Statements Statement of Position 19 Statement of Activities 20 Fund Basic Financial Statements Balance Sheet - Governmental Funds 21 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 22 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds 23 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds To the Statement of Activities 24 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 25 Notes to Basic Financial Statements Notes to Required Supplemental Information 37 Single Audit Section Independent Auditors 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 Independent Auditors Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by OMB Circular A Schedule of Findings and Questioned Costs Schedule of Prior Audit Findings 44 Schedule of Expenditures of Federal Awards 45 Notes to Schedule of Expenditures of Federal Awards 46

4 INTRODUCTORY SECTION

5 WCCHD Board of Health: Wayne Cavalier, Chair, Williamson County Katherine M. Galloway, Cedar Park Rob Hardy, Georgetown Vacant, Liberty Hill/Hutto Dr. Luis Egelsee, Leander Selicia Sanchez, Round Rock Pamela Sanford, Taylor Larry Madsen, Williamson County W. S. Riggins Jr., MD, MPH, WCCHD Executive Director/Health Authority September 4, 2014 To the Board of Health of the Williamson County and Cities Health District: Presented herein is the Comprehensive Annual Financial Report for Williamson County and Cities Health District (the District) for the fiscal year ending December 31, This report provides the Board of Health, Williamson County, the member city governments of Cedar Park, Georgetown, Round Rock, Taylor, Liberty Hill, Hutto and Leander, consumers, and those interested in the operations of the District with detailed information concerning the financial condition and services provided by the public health agency. The District's management staff is responsible for the accuracy of the presented data and the completeness and fairness of the presentation. The District's management staff has established an internal control framework to protect the assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the financial statements in conformity with Generally Accepted Accounting Principles (GAAP). This internal control framework is designed to ensure that the financial statements of the District are free of material misstatement. To the best of the knowledge of District's management, the enclosed data is accurate in all material respects and fairly represents the financial position and results of the operations of the District. All disclosures necessary to ensure an accurate depiction of the District's financial affairs have been included. This report is comprised of two parts: This transmittal letter A report of the District's financial operations including a Management Discussion and Analysis (MD&A), basic financial statements, and supplementary information. In addition to the independent auditor's report on the District's basic financial statements, the MD&A presents an overview and analysis to complement and explain the financial statements which have been prepared in accordance with the generally accepted accounting principles for governments as prescribed by the Governmental Accounting Standards Board (GASB). The District's financial statements have been audited by John F. Lewis, P.C., a licensed certified public accounting firm. This is the tenth year of a ten year engagement with John F. Lewis, P.C. for the annual independent audit. Administrative Services 100 West Third Street, Georgetown, TX Fax: Visit your public health department online at -1-

6 The purpose of the independent audit is to provide reasonable assurance that the financial statements of the District for the year ending December 31, 2013, are free of material misstatement. The independent audit has examined, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The audit assessed the accounting procedures utilized by District management and the overall presentation of the financial statements. The independent auditor concluded, based upon the audit, that there was reasonable basis for rendering an unqualified opinion that the financial statements of the District for the year ending December 31, 2013 have been fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of this report. The independent audit of the financial statements of the District is part of a broad, federal and state mandated "single audit" designed to meet the special needs of grantor agencies. The standards governing single audit engagements require the independent auditor to report not only on the fair presentation to the financial statements, but also on the internal controls and compliance with legal requirements, with special emphasis on internal controls and legal control requirements involving the administration of federal and state awards. Business Profile History The District has been providing public health services since 1943, but was officially established as a public health district in 1989 through a Cooperative Agreement with Williamson County and the original member cities of Cedar Park, Georgetown, Round Rock, and Taylor. The Cooperative Agreement was amended and restated in 2007 at which time the cities of Liberty Hill and Hutto joined the District. The City of Leander became a member in2013. The District is a separate governmental entity governed by a Board of Health comprised of eight directors who serve staggered 3-year terms. The member cities each appoint one director and the Commissioners' Court appoints two directors. Cities with a population less than 15,000 (presently Liberty Hill who is partnered with Hutto) together select one director to represent them. The District Executive Director is a non-voting member. The Board of Health is required to meet at least quarterly. Currently, the Board meets every other month. Meetings are open to the public and the agenda is posted on the District's website, and on the Williamson County Public Meetings website, Office Locations The administrative offices of the District are located at 312 Main Street in Georgetown, Texas. The District has Public Health Centers located in Cedar Park, Georgetown, Round Rock, and Taylor with an outreach clinic for selected services in Bartlett and Liberty Hill. Vision and Mission Statements Vision Statement: Healthy people thriving in healthy communities in Williamson County. Mission Statement: The Williamson County and Cities Health District, in partnership with communities, protects and promotes the health of the people of Williamson County. Administrative Services 100WestThird Street, Georgetown, TX Fax: Visit your public health department online at -2-

7 Planning/Transition Because of the great progress of the Health District and community support, it was possible to retire our last WCCHD Strategic Plan early and begin work on the Strategic Plan. Several major accomplishments made the early revision possible. Staff made progress in incorporating the essential services of public health across all programs and activities. Organizing for success included adopting a matrix organizational structure that balanced our programmatic expertise with newly energized workgroup structures. Through re-alignment, prioritization, and other efficiencies, the Executive Leadership Team has freed resources that could be invested in epidemiology, health education, coalition support services, and administrative support functions such as information technology, communications, and marketing. Maturation of the WilCo Wellness Alliance has occurred at a staggering rate and the participation in Community Groups as well as Working Groups features many recognized best practices. The Steering Committee oversaw completion of the Community Health Assessment and the development of our first Community Health Improvement Plan. Formation of the WilCo branch of the Regional Integrated Care Collaborative positioned us to respond to the opportunity afforded by the Texas Medicaid 1115 Waiver in truly transformative ways. It focuses on projects between health care entities to improve effectiveness of and access to the health care system. A joint meeting of the Commissioners Court and the Board of Health was held in September City officals were also present for dialogue that included history of the Health District, scope of services, Strategic Plan, Community Health Improvement Plan, Cooperative Agreement, and the future of public health services in one of the fastest growing counties in the nation. The 2013 County Health Rankings listed Williamson County as the healthiest place to live among 232 Texas counties. The counties were ranked using a variety of data including health outcomes, in which Williamson County ranked number one, and health factors, in which the county ranked number three. These rankings are produced by the University of Wisconsin and the Robert Wood Johnson Foundation and cover health outcomes, mortality, and morbidity as well as factors influencing health such as smoking, exercise, and access to quality care. The report results highlight the efforts of our community health improvement coalition, the WilCo Wellness Alliance. It also reflects the importance of health data and a collaborative process to access and proactively improve health outcomes. Budget Process The Executive Director and Administration Staff in consultation with members of the District Leadership Team prepare a proposed budget for the fiscal year. The proposed expenditure and revenue estimates comprising the District budget are submitted to the Board of Health for consideration and adoption. During the course of the year, the Board of Health reviews financial reports to assist them in actively governing the District. When the budget requires revision to accurately reflect the Administrative Services 100 West Third Street, Georgetown, TX Fax: Visit your public health department online at -3-

8 business of the District, an amended budget is submitted to the Board for consideration and approval. Senior Management The Executive Leadership Team consists of the Executive Director/Health Authority, Deputy Director of Administration and Finance, and Deputy Director of Community Health Services. In addition, the District also has a District Leadership Team made up of program directors and committee chairs. With Board approval, this group of senior management staff actively participates in determining the operating policies, procedures, staffing, and service planning, from which the budget is derived. The basic financial statements of the District include all organizational activities and functions for which the District is financially accountable as defined bygasb. Economic Outlook and Financial Condition The District's finances are dependent on the health of the local, state, and national economy as approximately eighty-nine percent of the gross revenues financing District operations are derived from federal, state and local funding. In addition, the District's finances are dependent upon the ability to strategically, timely, and efficiently shift resources to address the needs of contracting agencies and the needs of the communities served. National trends in health care and human services move increasingly toward models of care that emphasize greater efficiency and cost containment, particularly in public funding. In fiscal year 2013, the District worked diligently to continue to reduce non-essential expenses, increase staff productivity and service effectiveness, and reduce unit costs of services in order to strengthen business viability and financial reserves. This action was deemed necessary, and found to be on target, in view of forecasted changes in funding and concerns with the local, state, and national economies. Services Williamson County and Cities Health District impacts everyone, everywhere, every day in Williamson County. How? With services and collaborations that benefit the entire community and region. Health District Services Public Health begins with data collection, analysis and dissemination. WCCHD promotes public health activities based on objective data reflecting need and thorough use of evidence-based strategies. For example, behavioral risk factor data confirms that the lack of exercise and physical activity are serious issues in our county. We know that chronic diseases, such as diabetes, take years of life and productivity from too many of us at a high cost to individuals, employers, and governments. Through its educational classes, WCCHD informs restaurant employees how to keep food safe, empowers families to start and continue breastfeeding (the healthiest choice for babies), teaches health management skills to pregnant women and diabetics, and the importance of healthy eating and physical activity. Timely support to medical providers and patients helps to ensure optimal Administrative Services 100 West Third Street, Georgetown, TX Fax: Visit your public health department online at -4-

9 care and chances for prevention. WCCHD provides public information primarily through press releases and a website, that gives timely information about health topics in non-emergency and emergency situations. WCCHD leverages health fairs and other community events that offer an opportunity for education. Sustained partnerships with community groups and agencies allow WCCHD to leverage the resources needed to address public health issues. WCCHD representatives participate in groups at the city, county, regional, state and national levels to promote a preventive public health agenda. Various staff participate on the County's Mental Health Task Force, the Regional and County Indigent Care Collaboration, the Board of Directors for the Crisis Center and Head Start, National Environmental Health Association, Statewide Public Health Preparedness Coordinating Council, Statewide Public Health Policy and Funding Committee, and Capital Area Council of Governments. The WilCo Wellness Alliance has active groups in each of the four quadrants of the county and continues to gain momentum and membership. Additional information on the many services provided by your public health department can be found on our website, District Organizational Structure Board of Health is the administrative authority for the Health District. Executive Director/Health Authority, W S. Riggins Jr., MD, MPH Community Health Services, Cynthia Guerrero, MEd, Deputy Director Linking, empowering and educating the community through the following services: Women, Infants and Children (WIC) program provides nutrition education and healthy foods for pregnant women, new mothers, infants and young children. Clinical Preventive Services o Immunizations for children and adults, sexually transmitted disease (STD) screening and treatment, HIV testing and counseling, tuberculosis (TB) prevention and treatment o Social Services o Data Reporting and Information Management Health Education on diabetes, cardiovascular disease, children's weight management, health literacy and community gardening and healthy cooking classes Environmental Health Services, Deborah Marlow, R.S., Assistant Deputy Director o Preventing illnesses due to environmentally related disease and injury o Retail Food Establishment Permitting and Inspections o On-Site Sewage Facility Permitting and Inspections o Subdivision Review o Public Health Nuisance Investigations o Integrated Mosquito Management Administrative Services 100 West Third Street, Georgetown, TX Fax: Visit your public health department online at -5-

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11 LISTING OF OFFICIALS AND EXECUTIVE STAFF DECEMBER 31, 2013 Board of Health Kerry Russell, Chair Williamson County* Wayne Cavalier, Chair Williamson County** Katherine M. Galloway Cedar Park Rob Hardy Georgetown Dr. Luis Egelesee Leander Florence Winkler Liberty Hill / Hutto Pamela Sanford Taylor Selicia Sanchez-Adame Round Rock W. S. Riggins Jr., MD, MPH WCCHD, Non-voting Member * Resigned from Board of Health following November 14, 2013 meeting. WilCo Board position remained vacant until May 6, 2014, at which time Larry Madsen was appointed by Commissioners Court to serve in that capacity. ** Selected as Board of Health Chair at January 2, 2014 meeting. Executive Staff W. S. Riggins Jr., MD, MPH Executive Director/Health Authority Anita Martinez Deputy Director Cynthia Guerrero, M Ed Deputy Director of Community Health Services -7-

12 FINANCIAL SECTION

13 JOHN F. LEWIS, P.C. CERTIFIED PUBLIC ACCOUNTANTS 3613 WILLIAMS DRIVE, SUITE 501 LOCAL (512) GEORGETOWN, TX AUSTIN METRO (512) FAX (512) To the Board of Health Williamson County and Cities Health District Georgetown, Texas Report on the Financial Statements Independent Auditors Report We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Williamson County and Cities Health District, as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the District s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility 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 financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions

14 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Williamson County and Cities Health District, as of December 31, 2013, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis and budgetary comparison information on pages and 25 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Williamson County and Cities Health District basic financial statements. The introductory section, combining and individual non-major fund financial statements, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements. The combining and individual non-major fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual non-major fund financial statements and the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them

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16 Management s Discussion and Analysis For the Year Ended December 31, 2013 As management of the Williamson County and Cities Health District (the District ), we offer readers of the District s financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended December 31, We encourage readers to consider the information presented here in conjunction with our transmittal letter and additional information that we have furnished in our financial statements. Financial Highlights The assets of the District exceeded its liabilities at the close of the most recent fiscal year by $3,905,302 (net position). The District s total net position (government-wide) increased by $1,418,324. As of the close of the current fiscal year, the District s governmental fund reported an ending fund balance of $3,986,262, an increase of $1,518,199 from the prior year. At the end of the current fiscal year, unassigned fund balance for the General Fund was $3,986,262 or 53% of General Fund expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the District s basic financial statements which have three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. In addition to these basic financial statements this report also contains other supplementary information. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the District s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the District s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or declining. The statement of activities presents information showing how the District s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, the accrual basis of accounting is used, which is similar to the accounting used by most private-sector companies. Some revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. One such example is earned but unused vacation leave, which is expensed at the time it is accrued, but the cash flow occurs at the time the leave is taken. -11-

17 Management s Discussion and Analysis For the Year Ended December 31, 2013 In the Statement of Net Position, we present the District as one type of fund: Governmental The District s branch services are reported as Health Services, Environmental Services, WIC and Community Nutrition, Health Education and Operations, and Administration and Special Operations. The government-wide financial statements are on pages of this report. Fund financial statements. The fund financial statements begin on page 21 and provide detailed information about the most significant fund not the District as a whole. A fund is a grouping of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which requires the recognition of revenue when earned, only so long as the funds are collectible within the period or soon enough afterwards to be used to pay liabilities of the current period. The governmental fund financial statements provide a detailed short-term view of the District s general government operations and the basic services it provides. Governmental fund information helps you determine the amount of financial resources that can be spent in the near future to finance District operations. We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in the reconciliation on pages 22 and 24. The District maintains one individual governmental fund. Information on the General Fund is presented in the governmental fund Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances. The District adopts an annual budget for its General Fund. A budgetary comparison schedule has been provided for the General Fund on page 25 to demonstrate compliance with the budget. Notes to the financial statements. The notes provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages of this report. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents required supplemental information consisting of a budget to actual comparison schedule for the Statement of Revenues, Expenditures, and Changes in Fund Balances (see page 25) as well as the additional reports and schedules required under the single audit and certain supplementary information for additional analysis (see pages 38-46). -12-

18 WILLIAMSON COUNTY AND CITIES HEALTH DISTRICT Management s Discussion and Analysis For the Year Ended December 31, 2013 Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government s financial position. The District uses fund accountingg to ensure and demonstrate compliance with finance-related legal requirements. A portion of the District s net position (7%) represents its investment in capital assets (e.g., building improvements, furniture and equipment, computers, vehicles and other capitalized costs). The remaining balance of the District s net position (93%) representss the unrestricted financial resources available for future operations. Williamson County and Citiess Health District Net Position at December 31, 2013 Net investment in capital assets Unrestricted 7% 93% Williamson County and Cities Health District Summary Statement of Net Position Assets: Current and Other Assets Capital Assets Total Assets $ ,519, ,259 4,776, $ 2,643, ,033 2,980,012 Liabilities: Current and Other Liabilities Total Liabilities 870, , , ,034 Net Position: Net Investment in Capital Assets Unrestricted Total Net Position $ 256,259 3,649,043 3,905, ,033 2,150,945 $ 2,486,

19 Management s Discussion and Analysis For the Year Ended December 31, 2013 Williamson County and Cities Health District Summary Statement of Activities Program Revenues: Charges for Services $ 971,488 $ 914,342 Operating Grants and Contributions 8,026,654 5,581,110 Total Program Revenues 8,998,142 6,495,452 General Revenues: Unrestricted Investment Earnings 4,615 4,538 Local and Other Income 37,007 20,022 Total General Revenues 41,622 24,560 Total Revenues 9,039,764 6,520,012 Expenses: Administration and Special Operations 2,237,054 1,597,447 Environmental Services 878, ,817 Health Services 1,793,269 1,176,943 Community Health Education and Operations 1,388,375 1,729,580 WIC and Community Nutrition 1,324,681 1,439,643 Total Expenses 7,621,440 6,797,430 CHANGE IN NET POSITION 1,418,324 (277,417) NET POSITION, beginning of the year 2,486,978 2,764,395 NET POSITION, end of the year $ 3,905,302 $ 2,486,

20 WILLIAMSON COUNTY AND CITIES HEALTH DISTRICT Management s Discussion and Analysis For the Year Ended December 31, 2013 Financial Analysis of the District s Governmental Fund As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental fund. The focus of the District s governmental fund is to provide information on near-term inflows, outflows, and balances of resources available for spending. Such information is useful in assessing the District s financing requirements. In particular, unreserved fund balance may serve as a useful measuree of the District s net resources available for spending at the end of the fiscal year. The General Fund is the operating fund of the District. At the end of the current fiscal year, unassigned fund balance of the General Fund was $ $3,986,262. Revenues for the District s governmental funds were $9, 039,764 while total expenditures were $7,521,565. The total ending fund balance of governmental funds show a increase of $1,518,199 which is the deficiency of revenues over expenditures. As a measure of the General Fund s liquidity, it may be useful to compare unassigned fund balance to total fund expenditures. Unassigned fund balance represents 53% percent of total General Fund expenditures. The District s sources of revenues for the year ended December 31, 2013 are as follows: Williamson County and Citiess Health District 2013 Revenue by Source Federal, state, and local revenue Feee revenue Medicaid/Medicare Other revenue An Analysis of Significant Balances: Federal, state, and local revenues increased by $2,445,544 due in large part to an increase in some federal and state grants. Salaries and benefits increased by $431,591 as a result of an increase in staff to support new programs and moderate salary increases. -15-

21 WILLIAMSON COUNTY AND CITIES HEALTH DISTRICT Management s Discussion and Analysis For the Year Ended December 31, 2013 An Analysis of Significant Balances (continued): The District s expenditures by service branch for thee year endedd December 31, 2013 are as follows: Williamson County and Citiess Health District 2013 Expenditures by Service Branch Administration and Special Operations Environmental Services Health Services Health Education and Operations WIC and Community Nutrition Capital outlay Budgetary Highlights The budgets reflect the same pattern as seen in the revenue and expenditures of the District. To enhancee the process of developing a budget, the District utilizes goals and objectives defined by the District s senior management and based on the requirements of grantors, Williamson County and member cities. The General Fund is the only major budgetary fund. The following table examines the summary budget performance of the General Fund for the fiscal year ending December 31, Detail budget performance is examined through the budgetary comparison schedulee on page 25. Williamson County and Citiess Health District Summary Fund Expenditure Budget Performance Final Amended Budget Actual Amountss GAAP Basis Variance General Fund $ 6,934,681 $ 9,039,764 $ 2,105,

22 Management s Discussion and Analysis For the Year Ended December 31, 2013 An Analysis of Significant Budget Variations: The District increased contract amounts for various programs summing a total increase of approximately $2.3 million during fiscal year 2013 which increased operating revenues and costs. Fee revenue is largely based on the economic climate in regard to collecting fees for clinical and environmental services so the Health District is cautious when projecting fee revenue. New program positions were added to support programs which began in fiscal year 2013 that impacted salary and fringe expenditures. Operating costs also increased due to the addition of these program activities. Capital Assets and Debt Administration Capital Assets. The District s investment in capital assets for its governmental activities as of December 31, 2013 is $256,259 (net of accumulated depreciation). This investment in capital assets includes building improvements, furniture and equipment, computer equipment and vehicles. The total net decrease in the District s investment in capital assets for the current fiscal year was $79,774 due to depreciation expense exceeding the total amount of assets acquired in Capital Assets (Net of depreciation) Building Renovations and Furniture and Equipment $ 914,970 $ 877,984 Vehicles 139, ,195 Less: Accumulated Depreciation (798,324) (678,146) Total Capital Assets, Net $ 256,259 $ 336,033 Long-term Debt. The District does not have any long-term indebtedness. -17-

23 Economic Factors WILLIAMSON COUNTY AND CITIES HEALTH DISTRICT Management s Discussion and Analysis For the Year Ended December 31, 2013 The District s senior management team considers many economic factors when proposing the budget to the Board of Health for adoption as well as any subsequent budget amendments. The following are significant economic factors taken into account during the budgeting process: Population in the District s member government communities continues to increase, yielding an increase in revenue. Williamson County revenue increased due to retirement rate increase, medical premium increase and a nominal increase for salary increases in an effort to compete to recruit and maintain the finest public health and medical professionals. Supplemental Information The Health District aggressively pursues other grants that bring additional private, state and federal dollars to benefit the Williamson County community. For example, the Medicaid 1115 Waiver or Transformation and Quality Improvement Program funding of $1,967,876 resulted in the implementation of multiple projects that address gaps or enhance the provision of public health services. Projects include Expanded Capacity for Access to Care; Health Promotion and Wellness; Patient Navigation; Data Collection; and Community Para-medicine. Board of Health member Kerry Russell, Williamson County Commissioner s Court, resigned his position. Larry Madsen was appointed in May 2014 as the new Williamson County representative. The City of Leander joined the Health District in October 2013, and Dr. Luis Egelsee was appointed as their representative on the Board of Health Request for Information This financial report is designed to provide a general overview of District s finances and accountability of the money it receives. If you have questions or comments about this report or need additional financial information, please contact the Chief Financial Officer at 312 Main Street, Georgetown, Texas or

24 STATEMENT OF NET POSITION DECEMBER 31, 2013 ASSETS Governmental Activites Current Assets Cash and cash equivalents $ 2,087,231 Investments 1,101,710 Grants and contracts receivable 1,294,728 Prepaid expenses 36,261 Total Current Assets 4,519,930 Noncurrent Assets Capital assets, net of accumulated depreciation 256,259 Total Noncurrent Assets 256,259 TOTAL ASSETS $ 4,776,189 LIABILITIES Current Liabilities Accounts payable $ 108,271 Accrued payroll 162,897 Accrued compensated absences 337,219 Total Current Liabilities 608,387 TOTAL LIABILITIES 608,387 DEFERRED INFLOW OF RESOURCES Deferred contractual revenues 262,500 Total Deferred Inflow of Resources 262,500 NET POSITION Invested in capital assets 256,259 Unrestricted 3,649,043 TOTAL NET POSITION $ 3,905,302 See independent auditors' report and notes to financial statements -19-

25 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2013 Net (Expense) Revenue Program Revenue Operating Grants, Charges for Contributions and Governmental Functions/Programs Expenses Service Reimbursements Activites Governmental activities: Administration and Special Operation$ 2,237,054 $ - $ 5,087,726 $ 2,850,672 Environmental Services 878, ,839 - (5,222) Health Services 1,793,269 11, ,489 (782,468) Community Health Education and Operations 1,388,375 86, ,757 (738,981) WIC and Community Nutrition 1,324, ,376,682 52,701 Total governmental activities $ 7,621,440 $ 971,488 $ 8,026,654 1,376,702 General revenues: Interest 4,615 Miscellaneous 37,007 Total general revenues 41,622 Change in net position 1,418,324 NET POSITION, beginning of year 2,486,978 NET POSITION, end of year $ 3,905,302 See independent auditors' report and notes to financial statements -20-

26 BALANCE SHEET - GOVERNMENTAL FUNDS DECEMBER 31, 2013 General Fund ASSETS Cash and cash equivalents $ 2,087,231 Investments 1,101,710 Grants and contracts receivable 1,294,728 Prepaid expenses 36,261 TOTAL ASSETS $ 4,519,930 LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable $ 108,271 Accrued payroll 162,897 Deferred revenues 262,500 TOTAL LIABILITIES 533,668 FUND BALANCE Unreserved: Undesignated 3,986,262 TOTAL FUND BALANCE 3,986,262 TOTAL LIABILITIES AND FUND BALANCE $ 4,519,930 See independent auditors' report and notes to financial statements -21-

27 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF POSITION DECEMBER 31, 2013 Total Governmental Fund Balance $ 3,986,262 Amounts reported for governmental activities in the statement of net position are different because: Long-term liabilities, including compensated absences, are not considered due and payable in the current period and, therefore are not reported in the funds. (337,219) Capital assets of $1,054,583 net of accumulated depreciation of ($798,324), are not current financial resources and, therefore are not reported in the funds. See Note G in the notes to basic financial statements for additional detail. 256,259 Net Assets of Governmental Activities $ 3,905,302 See independent auditors' report and notes to financial statements -22-

28 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2013 General Fund Revenues Federal, state, and local revenue $ 8,026,654 Fee revenue 947,838 Medicaid/Medicare 23,650 Other revenue 41,622 Total revenues 9,039,764 Expenditures Administration and Special Operations 2,137,179 Environmental Services 878,061 Health Services 1,793,269 Health Education and Operations 1,388,375 WIC and Community Nutrition 1,324,681 Total expenditures 7,521,565 Deficiency of revenues over expenditures 1,518,199 FUND BALANCE, beginning of year 2,468,063 FUND BALANCE, end of year $ 3,986,262 See independent auditors' report and notes to financial statements -23-

29 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2013 Net Change in Fund Balance $ 1,518,199 Amounts reported for governmental activities in the statement of activities are different because: Some expenses reported in the Statement of Activites do not require the use of current financial resources and, therefore are not reported as expenditures in the governmental funds. (20,172) Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets are allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation of $133,477 exceeded capital outlay of $40,404 in the current period. (79,703) Change in Net Assets of Governmental Activities $ 1,418,324 See independent auditors' report and notes to financial statements -24-

30 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2013 Variance with Budgeted Amounts Final Budget Favorable Original Final Actual (Unfavorable) Revenues Federal, state, and local revenue $ 5,544,490 $ 5,663,061 $ 8,026,654 $ 2,363,593 Fee revenue 725, , , ,233 Medicaid/Medicare - 493,951 23,650 (470,301) Other revenue 52,064 52,064 41,622 (10,442) Total revenues 6,322,159 6,934,681 9,039,764 2,105,083 Expenditures Salaries 4,169,604 4,169,604 4,389,561 (219,957) Benefits 1,653,368 1,653,368 1,686,030 (32,662) Operating Costs 499,187 1,111,709 1,445,974 (334,265) Total expenditures 6,322,159 6,934,681 7,521,565 (586,884) Deficiency of revenues over expenditures - - 1,518,199 $ 1,518,199 FUND BALANCE, beginning of the year 2,468,063 2,468,063 2,468,063 FUND BALANCE, end of the year $ 2,468,063 $ 2,468,063 $ 3,986,262 See independent auditors' report and notes to financial statements -25-

31 NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2013 NOTE A - REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Reporting Entity Williamson County and Cities Health District (the District ) has provided public health services to Williamson County since The District was known as the Williamson County Health Department until 1989, when it was reorganized as a public health district. The District was formed through a Cooperative Agreement among Williamson County, the City of Cedar Park, the City of Georgetown, the City of Round Rock, and the City of Taylor. The Cities of Liberty Hill and Hutto joined the District in The seven governmental entities that form the District appoint citizen representatives to the Williamson County Board of Health, which has administrative authority and oversees the operation of the District. Each city appoints one director and Williamson County appoints two directors to staggered 3-year terms. Cities with a population less than 15,000 (presently Liberty Hill and Hutto) together select one board member to represent them. The District s funding is derived from contributions from member governments, grants from the State of Texas and the Federal government, client service fees, and other grants, contracts, and contributions. In addition to these funds, Williamson County contributes facilities, utilities, janitorial and maintenance services, telephone, payroll processing, administration of the employee benefits program, workers compensation insurance, vehicle insurance, and computer network support. Basic Financial Statements The District s basic financial statements consist of government-wide financial statements, fund financial statements and related notes. The government-wide financial statements include a Statement of Net Position and a Statement of Activities, and the fund financial statements include financial information for the governmental fund type. Reconciliations between the governmental fund statements and the government-wide statements are also included. Government-wide Financial Statements The government-wide financial statements include the Statement of Net Position and the Statement of Activities. These statements report financial information for the District as a whole. Governmental activities generally are financed through intergovernmental and nonexchange revenues. 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. -26-

32 NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2013 NOTE A - REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-wide Financial Statements (Continued) The Statement of Activities reports the degree to which the direct expenses of a given function or program are offset by program revenue. Direct expenses are those that are clearly identifiable with a specific function or program. Program revenue includes 1) charges to clients or customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or program. Other sources of revenue not included among program revenue are reported instead as general revenue. Fund Financial Statements Fund financial statements of a reporting entity are organized on a basis of funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues and expenditures/expenses. The District reports one major governmental fund: General Fund - The General Fund is the general operating fund of the District. It is used to account for all financial resources. Measurement Focus and Basis of Accounting The government-wide financial statements are reported using 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, contributions, and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The District allocates indirect expenses primarily comprised of central governmental services to operating functions and programs benefiting from those services. Central services include District management, accounting, financial reporting, payroll, procurement contracting and oversight, cash management, personnel services, and other administrative services. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or within sixty days after year-end. -27-