ANNUAL FINANCIAL ACCOUNTABILITY MANAGEMENT REPORT

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1 ZAPATA COUNTY INDEPENDENT SCHOOL DISTRICT FISCAL YEAR ENDED AUGUST 31, 2010 Public Hearing October 18, 2011

2 FISCAL YEAR Table of Contents Notice of Public Hearing 3 Mission, Vision, and Superintendent s Goals 4 Introduction to School FIRST 5 FIRST Worksheet 6 Rating Worksheet Overview 10 Disclosure A Superintendent s Contract 14 Disclosure B Reimbursements to Superintendent and Board 29 Disclosure C Reportable Superintendent s Compensation 30 Disclosure D Reportable Gifts 31 Disclosure E Business Transactions with District 32 Disclosure F Financial Solvency 33

3 FISCAL YEAR ENDED AUGUST 31, 2010 Page 3 NOTICE OF PUBLIC MEETING TO DISCUSS ZAPATA COUNTY INDEPENDENT SCHOOL DISTRICT S State Financial Accountability Rating Zapata County Independent School District will hold a public meeting at 6:30 pm, October 18, 2011, in the PDC, 600 W. 17th Ave & Carla Street, Zapata, TX The purpose of this meeting is to discuss the Zapata County Independent School District s rating on the state s financial accountability system

Page 4 BOARD OF TRUSTEES Jose M Ramirez, III President Diego Gonzalez Trustee Norberto Lopez Trustee Vision Statement

Zapata County Independent School ensures that all students acquire the essential knowledge and develop the necessary

Zapata High School graduates will possess the necessary knowledge and skills to succeed in life after graduation, be

They will be able to think critically, synthesize, information accurately, solve problems creatively and will choose

Other characteristics of Zapata High School graduates will include being proactive and resilient with interpersonal

In addition, graduates will be self-confident, have respect for self and others and accept differences in people.

research-based holistic curriculum and instruction program enhanced by technology integration, college readiness, and

Goal 3: Human resources and Learning Environment - Highly qualified personnel will be recruited, trained, and

Goal 4: School Partnerships - Parents, business, and community representatives will be full partners with the schools

All students will be reading on level upon completing the 3rd grade and thereafter. II.

4 Page 4 BOARD OF TRUSTEES Jose M Ramirez, III President Diego Gonzalez Trustee Norberto Lopez Trustee Vision Statement The graduates of Zapata County Independent School District shall possess the following fundamental characteristics: Zapata County Independent School ensures that all students acquire the essential knowledge and develop the necessary skills to graduate from high school, become financially self-supporting and positive contributors to society. Zapata High School graduates will possess the necessary knowledge and skills to succeed in life after graduation, be competent to pursue career goals, and become life -long learners. The graduates will be technology literate. They will be able to think critically, synthesize, information accurately, solve problems creatively and will choose to remain drug and violence free. Other characteristics of Zapata High School graduates will include being proactive and resilient with interpersonal and conflict resolution skills which will contribute to being a positive role model. In addition, graduates will be self-confident, have respect for self and others and accept differences in people. Finally, Zapata High School graduates will have the ability to work independently and interdependently and be successful at the workplace. Our Mission The Zapata County Independent School District will provide an educational opportunity for the academic success of all students. District Goals Goal 1: Student Performance - All students will demonstrate exemplary performance supported with a research-based holistic curriculum and instruction program enhanced by technology integration, college readiness, and health wellness. Goal 2: Finance - All schools will operate with a fiscally sound budget. Goal 3: Human resources and Learning Environment - Highly qualified personnel will be recruited, trained, and retained to ensure high student achievement and effective management and operations. Goal 4: School Partnerships - Parents, business, and community representatives will be full partners with the schools in the education of their children. Superintendent s Priority Goals I. All students will be reading on level upon completing the 3rd grade and thereafter. II. All students will successfully complete their class/course of study. III. All students will graduate from school to either be gainfully employed or enroll in post secondary education. IV. All students will attend school that are safe and free from drugs. V. All schools will be operated by a fiscally sound budget that is developed in collaboration with and supported by the school community. VI. The district/schools will expand current partnerships with parents, business, and community. Veronica P Gonzalez Vice-President Dora O Martinez Secretary Ricardo X Ramirez Trustee Anselmo Trevino Jr Trustee

FISCAL YEAR ENDED AUGUST 31, 2010 Page 5 Introduction Senate Bill (SB) 218 of the 77th Legislature (2001) authorized the implementation of a financial accountability rating system, which is

5 FISCAL YEAR ENDED AUGUST 31, 2010 Page 5 Introduction Senate Bill (SB) 218 of the 77th Legislature (2001) authorized the implementation of a financial accountability rating system, which is officially referred to as School FIRST. The primary goal of School FIRST is to improve the management of school districts' financial resources. School FIRST was developed in consultation with the Comptroller of Public Accounts, and its development also benefited from the many comments that were received from school district and regional education service center personnel. The school district s School FIRST rating is based upon an analysis of staff and student data reported for the school year, and budgetary and actual financial data for the 2010 fiscal year (for Zapata County Independent School District, the fiscal period ended August 31, 2010). Senate Bill 218 also requires each school district to prepare an Annual Financial Accountability Management Report. Many business-related issues are covered in this report, however, it focuses on the Schools FIRST rating worksheet. This worksheet was developed by representatives of the Texas Education Agency (TEA), the Texas Business & Educational Council (TBEC) and the Texas Association of School Business Officials (TASBO). The worksheet is used to rate the District according to twenty-one defined indicators, each weighted equally, except for the first five critical indicators. A negative response to any of the first three critical indicators or a negative response to both the fourth and fifth critical indicators results in the district receiving a rating of Substandard Achievement. Zapata County ISD s rating under Schools FIRST for the year ended August 31, 2010, was Superior Achievement. This report briefly describes data used to calculate the rating and what each indicator means. Other information affecting the District s financial accountability is also included. ZCISD Receives Superior Achievement Rating Purpose of the Financial Accountability Rating System The Financial Accountability Rating System ensures that school districts will be: Held accountable for the quality of their financial management practices and Achieve improved performance in the management of their financial resources It discloses the quality of local management and decision-making processes that impact the allocation of financial resources in Texas public schools. This rating system was designed to encourage Texas public schools to manage their financial resources better in order to provide the maximum allocation possible for direct instructional purposes.

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10 Page Was 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. This indicator is designed to ensure that your district has a positive amount of fund balance cash (savings) that is not designated or reserved for a specific purpose. In other words, Does our district have funds set aside for a rainy day? Zapata County ISD s fund balance in the General Fund after reduction for reserves at August 31, 2010, was $16,597,021. The previous year s fund balance was$16,802,299. A District that answers No to indicators 1, 2, 3 or 4, the District automatically receives a rating of Substandard Achievement 2. Was the Total Unrestricted Net Asset Balance (Net of Accretion of Interest in 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) This indicator measures the amount of reserve the district has to cover expenditures. If the district is showing growth in students, the unrestricted net asset balance must be greater than zero. 3. 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 bills/ obligations on bonds issued to pay for school construction, etc. Zapata County ISD had no instances of default on bonded indebtedness obligations. If both indicators 5 and 6 are answered No, the District automatically receives a rating of Substandard Achievement 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)? Our Annual Financial Report for the fiscal year ended August 31, 2010 was filed with the Texas Education Agency on January 25, 2011 within the one month deadline of January Was There an Unqualified Opinion in Annual Financial Report? The Opinion expressed by our independent auditors on the August 31, 2010 Annual Financial Report was unqualified. A qualification on our financial reports would have meant that corrections were needed in some of our reporting or financial controls. A district s goal, therefore, is to receive an unqualified opinion on its Annual Financial Report. 6. Did the Annual Financial Report Not Disclose Any Instance(s) of Material Weaknesses In Internal Controls? Material weaknesses in internal controls were reported in our audit. Internal control weaknesses create a risk that a district would not be able to properly account for its use of public funds, and should be immediately addressed. Steps have been taken to address this problem and ensure that the district had adequate internal controls.

11 FISCAL YEAR ENDED AUGUST 31, 2010 Page Did the Districts Academic Rating Exceed Academically Unacceptable? This indicator measures how a district is utilizing funding to accomplish academic goals. A fiscally sound district should be supporting the instructional program in meeting the highest academic ratings set by the state, Zapata County ISD had a Recognized rating. 8. Was the Three-Year Average Percent of Total Tax Collections (Including Delinquent) Greater than 98 percent? This indicator shows the District s success in collecting the taxes owed by the community s business and homeowners, placing a 98 percent average over a three-year period. Zapata County ISD s three-year average percentage was 98 percent. 9. Did the Comparison of PEIMS Data to Like Information in Annual Financial Report Result in and Aggregate Variance of Less Than 3 Percent of Expenditures Per Fund Type (Data Quality Measure)? This indicator measures the quality of data reported to PEIMS and in the Annual Financial Report to make certain that the data reported in each case matches up. If the difference in numbers reported in any fund type in more than 3 percent, the district fails this measure. Zapata County ISD s data quality measure was less than 3 percent. 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) This indicator shows the Legislature s intent for school districts to spend money on education, rather than fancy buildings, by limiting the amount of money district s can spend on debt to $250 per student. Fortunately, the Legislature did allow for fast-growth schools to exceed this cap. For Zapata County ISD had fast growing schools that equaled 7% over a 5-year period. 11. Was There No Disclosure In the Annual Audit Report of Material Noncompliance? The Annual Audit Report for the year ended August 31, 2010 did not include disclosures indicating that the school district failed to comply with laws, rules and regulations for a government entity.

12 Page Did the District Have Full Accreditation Status in Relation to Financial Management Practices? (e.g. No Conservator or Monitor Assigned) Zapata County ISD had full accreditation status. 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? A district will not receive the total allotted points on this indicator if its total expenditures and other uses for the fiscal year exceeded its total funds available. A score of 0 would indicate that the District had overspent its budget. Zapata County ISD s aggregate budgeted total revenues, other resources and fund balance exceeded expenditures and other uses by $16,597,021 in the General Fund for the year ended August 31, If the District s Aggregate Fund Balance in the General Fund and Capital Projects Fund was Less the Zero, were Construction Projects Adequately Financed? (To avoid Creating or Adding to the Fund Balance Deficit Situations.) This indicator measures the District s ability to construct facilities without damaging our Fund Balance. At August 31, 2010 the fund balance in the General Fund was $16,597,021 indicating that construction projects were adequately financed. 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) This indicator measures whether or not the District has sufficient cash and investments to balance Fund Balance monies such as TEA overpayments (deferred revenues). In other words, the District should have fund balance monies of its own that at least equal to those dollars that are there due to overpayments from TEA, and should not be spending nest year s monies this year. For the year ended August 31, 2010, cash and investments in the General Fund were $20,237, Was the Administrative Cost Ratio Less than The Threshold Ratio? TEA and state law sets a cap on the percentage of their budget that Texas school districts can spend on administration based on district size. For districts in Zapata County ISD s category, the administrative cost ratio should fall below percent. Our District s ratio for the school year was which was below the state cap.

13 FISCAL YEAR ENDED AUGUST 31, 2010 Page Was the Ratio of Students to Teachers Within the Ranges According to District Size? This indicator measures our pupil-teacher ratio to ensure that it is within TEA recommended ranges for a district of our student population range. A district like Zapata County ISD with a student population between 1,000-4,999 should have no more than 22 students per teacher and no fewer than 11.5 students per teacher. For the school year, Zapata County ISD had students per teacher. 18. Was the Ratio of Students to Total Staff Within the Ranges According to District Size? This indicator measures pupil-staff ratio to ensure that it is within TEA-recommended ranges for district s of our student population range. A district like Zapata County ISD with student population between 1,000-4,999 should have no more that 14 students per staff member and no fewer that 6.3 students per district employee. For the school year Zapata County ISD had 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 Calculations Worksheet in the Annual Financial Report? The optimum fund balance for the district was $18,177,860. The district should have no less than one-half and no more than one and one-half times this amount in the Fund Balance, counting both reserved and unreserved fund balances. At August 31, 2010, the District s Fund Balance was $16,597,021 which is more than one-half and more than one and one half times the calculated optimum fund balance. 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 This indicator attempts to identify districts that are utilizing fund balance to pay for salaries or other district operating expenses. This indicator notes rapid decreases in a district s undesignated Fund Balance (those dollars not designated as a land fund or construction fund ) or emergency fund, which could indicate a district is borrowing to pay for recurring costs that will continue to deplete the district s reserves, 21. Was the Aggregate Total of Cash and Investments in the General Fund More than $0? This indicator simply verifies that the District have cash in the bank and/or investments. At August 31, 2010, the District has General Fund cash and investments totaling $20,237, Were Investment Earnings in All Funds (Excluding Debt Service Fund and Capital Projects Fund) more than $20 per Student? Verifying that investment earnings were more than $20 per student indicates that the District is investing its funds wisely, For the school year ending August 31, 2010, Zapata County ISD s investment earnings per student were $29.88.

14 FISCAL YEAR ENDED AUGUST 31, 2010 Page 14 Texas Administrative Code Chapter 109 Disclosures Disclosure A Copy of the Superintendent s Current Employment Contract

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29 FISCAL YEAR ENDED AUGUST 31, 2010 Page 29 Texas Administrative Code Chapter 109 Disclosures Disclosure B Reimbursements Received by Superintendent and Board Members For the Year Ended August 31, 2010 Summary schedule for the fiscal year (12-month period) of total reimbursements received by the Superintendent and each board member. The summary schedule reports reimbursements for meals, lodging, transportation, motor fuel, and other items separately. It does not include reimbursements for supplies and materials that were purchased for the operation of the school district). Registration Name Meals Lodging Transportation Motor Fuel & Other Total SUPERINTENDENT Dr. Norma G. Garcia $ $ $ $0.00 $ $1, BOARD MEMBERS Diego Gonzalez, Jr. $ $ $ $0.00 $ $1, Veronica P. Gonzalez $75.00 $ $ $0.00 $ $ Norberto Lopez $ $ $ $0.00 $ $ Dora S. Martinez $ $ $ $0.00 $ $1, Jose M. Ramirez, III $75.00 $ $ $0.00 $ $ Ricardo X. Ramirez $75.00 $ $ $0.00 $ $ Anselmo Trevino, Jr. $75.00 $ $ $0.00 $ $ TOTAL ALL TRAVELERS $ $3, $2, $0.00 $1, $8, Note - The spirit of the rule is to capture all "reimbursements" for the fiscal year , regardless of the manner of payments, including direct pay, cash and purchase order. Reimbursements to be reported per category include: Meals - Meals consumed outside of the school district's premises. Lodging - Hotel/Motel charges. Transportation - Airfare, car rental (can include food on rental), taxi, shuttle, mileage reimbursement, leased cars, parking and tolls. Motor Fuel - Gasoline. Other - Registration Fees, telephone/cell phone, internet services, fax machine and other reimbursements to the Superintendent and board members not defined above.

30 Page 30 Texas Administrative Code Chapter 109 Disclosures Disclosure C Reportable Superintendent s Compensation Summary schedule for the fiscal year of the dollar amount of compensation and/or fees received by the superintendent from another school district or any other outside entity in exchange for professional consulting and/or other personal services. The schedule shall separately report the amount received from each entity. No Amounts Reported

31 FISCAL YEAR ENDED AUGUST 31, 2010 Page 31 Texas Administrative Code Chapter 109 Disclosures Disclosure D Reportable Gifts A summary schedule for the fiscal year of the dollar amount of gifts that had an economic value of $250 or more in the aggregate in the fiscal year. This reporting requirement only applies to gifts received by the executive officers and board members (and their immediate family as described by Government Code, Chapter 573, Subchapter B, as a person related to another person within the first degree by consanguinity or affinity) from an outside entity that received payments from the school district in the prior fiscal year, and gifts from competing vendors that were not awarded contracts in the prior fiscal year. This reporting requirement does not apply to reimbursement of travel -related expenses by an outside entity when the purpose of the travel is to investigate or explore matters directly related to the duties of an executive officer or board member, or matters related to attendance at education-related conferences and seminars whose primary purpose is to provide continuing education (this exclusion does not apply to trips for entertainment related purposes or pleasure trips). This reporting requirement excludes an individual gift or a series of gifts from a single outside entity that had an aggregate economic value of less than $250 per executive officer or board member. No Amounts Reported

32 Page 32 Texas Administrative Code Chapter 109 Disclosures Disclosure E Business Transactions with District A summary schedule for the fiscal year of the dollar amount received by board members for the aggregate amount of business transactions with the school district. This reporting requirement is not to duplicate the items disclosed in the summary schedule of reimbursements received by board members. No Amounts Reported

33 Page 33 Texas Administrative Code Chapter Disclosure Disclosure F ZCISD Financial Solvency A summary schedule of the data submitted to the Texas Education Agency for the financial solvency provisions of Texas Education Code, Sec

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35 ZAPATA COUNTY INDEPENDENT SCHOOL Zapata County ISD Business Office 17th and Carla St. Zapata, TX (956) Committed to Excellence! For additional information, please contact: Suzette M. Barrera Ana Garza Chief Interim Financial Officer Senior Accountant Phone: Phone: Felipe Jimenez Staff Accountant Phone:

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