DELL CITY INDEPENDENT SCHOOL DISTRICT ANNUAL …dellcity.schoolwires.com/cms/lib6/TX01000663/Centricity/Domain/31/2013-2014 Final Audit...DELL CITY INDEPENDENT SCHOOL DISTRICT ANNUAL

DELL CITY INDEPENDENT SCHOOL DISTRICT

ANNUAL FINANCIAL AND COMPLIANCE REPORTS

FOR THE YEAR ENDED AUGUST 31, 2014


ANNUAL FINANCIAL AND COMPLIANCE REPORTS


TABLE OF CONTENTSPage Exhibit

Certificate of Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

FINANCIAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Basic Financial Statements: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Government-Wide Financial Statements:

Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 A-1Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 B-1

Governmental Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Balance Sheet Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 C-1Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 C-2Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 C-3Reconciliation of the Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 C-4

Fiduciary Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Statement of Fiduciary Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 E-1Statement of Changes in Fiduciary Fund Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 E-2

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Required Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 G-1

Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Nonmajor Governmental FundsCombining Balance Sheet - Nonmajor Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 H-1Combining Statement of Revenues, Expenditures, and Changes in Fund Balances . . . . . . . . . . 54 H-2Statement of Changes in Assets and Liabilities - Agency Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 57 H-3Combining Statement of Net Position - Private Purpose Trust Funds . . . . . . . . . . . . . . . . . . . . . 58 H-4Combining Statement of Revenues, Expenses, and Changes in Fund Net Position . . . . . . . . . . . 60 H-5


TABLE OF CONTENTS(Continued)

Page Exhibit

Other Information - Required TEA Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Schedule of Delinquent Taxes Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 J-1Budgetary Comparison Schedule - Child Nutrition Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 J-2

Compliance Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Independent Auditor’s 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 . . . . . . . . . . . . . . . . . . . . . . . 69Schedule of Findings and Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71Schedule of Status of Prior Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75Corrective Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

This page is left blank intentionally.

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FINANCIAL SECTION

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Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respectivefinancial position of the governmental activities, each major fund, and the aggregate remaining fundinformation of the District, as of August 31, 2014, and the respective changes in financial position for the yearthen 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’sdiscussion and analysis and budgetary comparison information on pages 9 through 16 and 50 be presentedto supplement the basic financial statements. Such information, although not a part of the basic financialstatements, is required by the Governmental Accounting Standards Board, who considers it to be an essentialpart 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 informationin accordance with auditing standards generally accepted in the United States of America, which consistedof inquiries of management about the methods of preparing the information and comparing the informationfor consistency with management’s responses to our inquiries, the basic financial statements, and otherknowledge we obtained during our audit of the basic financial statements. We do not express an opinion orprovide any assurance on the information because the limited procedures do not provide us with sufficientevidence to express an opinion or provide any assurance.

Supplementary and Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectivelycomprise the Dell City Independent School District’s basic financial statements. The accompanyingcombining and individual nonmajor fund financial statements and the required TEA schedules are presentedfor purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements are the responsibility of management andwere derived from and relate directly to the underlying accounting and other records used to prepare the basicfinancial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare the basic financialstatements or to the basic financial statements themselves, and other additional procedures in accordance withauditing standards generally accepted in the United States of America. In our opinion, the combining andindividual nonmajor fund financial statements are fairly stated in all material respects in relation the basicfinancial statements as a whole.

The required TEA schedules have not been subjected to the auditing procedures applied in the audit of thebasic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

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Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 22,2014, on our consideration of the Dell City Independent School District’s internal control over financialreporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grantagreements and other matters. The purpose of that report is to describe the scope of our testing of internalcontrol over financial reporting and compliance and the results of that testing, and not provide an opinion onthe internal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering the District’s internal controlover financial reporting and compliance.

Gibson, Ruddock, Patterson LLCEl Paso, TexasDecember 22, 2014

F:\DATA\Dell City ISD\08-31-14 FS.wpd

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MANAGEMENT’S DISCUSSION & ANALYSIS

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Management’s Discussion and Analysis

In this section of the Annual Financial and Compliance Report, we, the managers of Dell City Independent School District, discuss and analyze the District’s financial performance for the fiscal year ended August 31, 2014. Please read it in conjunction with our Independent Auditor’s Report on page 5 and the District’s Basic Financial Statements, which begin on page 17.

Financial Highlights

The District’s net position increased by $30,146 as a result of this year’s operations. Our District does not have any business-type activities; so all changes are attributable to our governmental activities. (Exhibit B-1).

During the year, the District had expenditures that were $7,627 less than the $1,751,296 generated in tax and other revenues for governmental program. This compares to last year when revenues were more than expenditures by $11,021. (Exhibit C-3)

Total cost of all of the District’s programs increased by $6,655 or .38% from $1,732,484 to $1,739,139 from 2013 to 2014, respectively. (Exhibit B-1)

The General Fund ended the year with a fund balance of $939,386

The resources available for appropriation were $124,674 more than budgeted for the General Fund. Overall, the expenditures budget increased by $17,764 throughout the year. The District received $18,195 more in State Foundation Revenue than budgeted. Also, the District received $27,886 more in taxes and related penalties than budgeted.

Using This Annual Report

This annual report consists of a series of financial statements. The government-wide financial statements include the Statement of Net Position and the Statement of Activities (on pages 18 and 19). These provide information about the activities of the District as a whole and present a long term view of the District’s property and other financial matters. They reflect the flow of total economic resources in a manner similar to the financial reports of a business enterprise.

Fund financial statements (starting on page 21) report the District’s operation in more detail than the government-wide statements by providing information about the District’s most significant funds. For governmental activities, these statement tell how services were financed in the short term as well as what resources remain for future spending. They reflect the flow of current financial resources, and supply the basis for tax levies and the appropriations budget. The remaining statements, fiduciary statements, provide financial information about activities for which the district acts solely as a trustee or agent for the benefit of those outside of the District.

The notes to the financial statements (starting on page 30) provide narrative explanations or additional data needed for full disclosure in the government-wide statements or the fund financial statements.

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The combining statement for non-major funds contain even more information about the District’s individual funds. These are not required by TEA. The sections labeled TEA Required Schedules and Federal Awards Section contain data used by monitoring or regulatory agencies for assurance that the District is using funds supplied in compliance with the terms of grants.

Reporting the District as a Whole

The Statement of Net Assets and the Statement of Activities

The analysis of the District’s overall financial condition and operations begins on page 9. Its primary purpose is to show whether the District is better off or worse off as a result of the year’s activities. The Statement of Net Position (page 18) includes all the District’s assets and liabilities at the end of the year while the Statement of Activities (page 19) includes all the revenues and expenses generated by the District’s operations during the year. These apply the accrual basis of accounting, which is the basis used by private sector companies.

All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. The District’s revenues are divided into those provided by outside parties who share the costs of some programs, such as tuition received from students from outside the District and grants provided by the U.S. Department of Education to assist children with disabilities or from disadvantaged backgrounds (program revenues). All the District’s assets are reported whether they serve the current year or future years. Liabilities are considered regardless of whether they must be paid in the current or future years.

These two statements report the District’s net assets and changes in them. The District’s net assets (the difference between assets and liabilities) provide one measure of the District’s financial health, or financial position. Over time, increases and decreases in the District’s net assets are one indicator of whether its financial health is improving or deteriorating. To fully assess the overall health of the District, however, you should consider non-financial factors as well, such as changes in the District’s average daily attendance or its property tax base and the condition of the District’s facilities.

In the Statement of Net Assets and the Statement of Activities we present only the following activity:

Governmental Activities: Most of the District’s basic services are reported here, including the instruction, counseling, co-curricular activities, food services, transportation, maintenance, community services, and general administration. Property taxes, tuition, fees and state and federal grants finance most of these activities.

Reporting the District’s Most Significant Funds

Fund Financial Statements

The fund financial statements begin on page 21 and provide detailed information about the most significant funds. The District’s administration established many other funds to help it control and manage money for particular purposes (like campus activities). The District’s governmental funds use the accounting approach as follows:

Most of the District’s basic services are reported in governmental funds. These use modified accrual accounting (a method that measures the receipt and disbursement of cash and all other financial assets that

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can be readily converted to cash) and report balances that are available for future spending. The governmental fund statements provide a detailed short-term view of the District’s general operations and the basic services it provides. We describe the differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds in reconciliation schedules following each of the fund financial statements.

The District as a Trustee

Reporting the District’s Fiduciary Responsibilities

The District is a trustee, or fiduciary, for money raised by student activities and alumni scholarship programs. All of the District’s fiduciary activities are reported in separate Statement of Fiduciary Net Position and changes in Fiduciary Net Position on pages 28 and 29. We exclude these resources from the District’s other financial statement because the District cannot use these assets to finance its operations. The District is only responsible for ensuring that the assets reported in these funds are used for their intended purposes.

Government-Wide Financial Analysis

Net assets of the District’s governmental activities increased from $2,424,439 to $2,454,585. Unrestricted net position- the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements- were $1,005,865 at August 31, 2014.

The District’s governmental fund type revenues increased by $30,453 or 1.8% from $1,720,843 in 2013 (Exhibit C-3).

The cost of all the governmental activities this year was $1,739,139 compared to $1,732,484 last year. However, as shown in the Statement of Activities on page 19, some of the costs were paid by those who directly benefited from the programs ($48,746) or by other governments and organizations that subsidized certain programs with grants and contributions ($164,155).

The District’s Funds

As the District completed the year, its governmental funds (as presented in the balance sheet on page 22) reported a combined fund balance of $941,248 which above last year’s total of $913,097.

Over the course of the year, the Board of Trustees revised the District’s budget several times. The main category involved amendments to move funds from programs that did not need all the resources originally appropriated to programs with resource needs.

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Table I Dell City Independent School District

NET POSITION

Governmental Activities 2014 2013

Current and Other Assets $ 1,448,720 $ 1,032,522 Capital Assets 1,130,649 1,444,190

Total Assets $ 2,579,369 $ 2,478,725

Long-term Liabilities - - Other Liabilities $ 124,784 $ 55,273

Total Liabilities $ 124,784 $ 55,273

Net Assets Invested in Capital Assets, Net of Related Debt $ 1,448,720 $ 1,444,191 Restricted - 208,670 Unrestricted 1,005,865 771,579

Total Net Position $ 2,454,585 $ 2,424,440

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Table II Dell City Independent School District

CHANGES IN NET POSITION

Governmental Activities

2014 2013 Revenues: Program Revenues: Charges for Services $ 48,746 $ 57,398 Operating Grants and Contributions 164,155 337,864 General Revenues: Maintenance and Operations Taxes 575,247 542,865 Grants & Contributions Not Restricted 837,323 741,883 Investment Earnings 1,722 2,019 Miscellaneous 121,568 43,222

Total Revenue $ 1,748,761 $ 1,725,251

Expenses: Instruction, Curriculum & Media Services $ 875,024 $ 1,033,244 Instructional and School Leadership 68,178 50,924 Student Support Services 63,537 72,012 Child Nutrition 59,407 69,855 Co-curricular Activities 43,666 69,443 General Administration 426,287 254,992 Plant, Maintenance, Security & Data Processing 190,660 164,618 Debt Services - - Other Intergovernmental Charges 12,380 17,396

Total Expenses $ 1,739,139 $ 1,732,484

Increase in Net Position before Transfers and Special Items $ 9,622 $ (7,233)

Prior Period Adjustments $ 20,524 $ - Special Items - -

Net Position- September 1 $ 2,424,439 $ 2,431,672

Net Position- August 31 $ 2,454,585 $ 2,424,439

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Capital Assets and Debt Administration

Capital Assets

At the end of 2014, the District had $1,428,720 invested in a broad range of capital assets, including facilities and equipment for instruction, transportation, athletics, administration, and maintenance. The District constructed a well and remodeled teacher housing for $70,999 during the year. The District had no dispositions of capital assets for the year ended August 31, 2014.

Debt

The District had no capital leases or other long-term debt at August 31, 2014.

Economic factors and Next Year’s Budgets and Rates

The District’s elected and appointed officials considered many factors when setting the 2014-2015 fiscal year budget and tax rates. Among the factors considered is the economy, the District’s population decline during the past few years, unemployment, property values, decisions before the Texas Legislature concerning State funding, and available grants from various foundations.

These indicators were taken into account when adopting the Governmental Activities 2014-2015 budget. Amounts available for appropriation in the Governmental Activities budget are $1,434,641 a decrease of 2.5% over the original 2013-2014 budget of $1,471,092. The District will use its revenues to finance programs we currently offer. Budgeted expenditures are expected to decrease 3.6% from the original 2013-2014 budget. The District has added no major new programs or initiatives to the 2014-2015 budget.

Contacting the District’s Financial Management

This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the District’s finances and to show the District’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the District’s business office at Dell City Independent School District, Post Office Box 37, Dell City, Texas, 79837.

BASIC FINANCIAL STATEMENTS

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EXHIBIT A-1DELL CITY INDEPENDENT SCHOOL DISTRICT

STATEMENT OF NET POSITIONAUGUST 31, 2014

Control

Data

CodesGovernmental

Activities

Primary Government

ASSETS966,132 Cash and Cash Equivalents $1110

807,718 Property Taxes Receivable (Delinquent)1220

(743,101)Allowance for Uncollectible Taxes1230

96,019 Due from Other Governments1240

1,989 Due from Fiduciary Funds1267

1,155 Other Receivables, net1290

737 Prepayments1410

Capital Assets:263,052 Land1510

957,328 Buildings, Net1520

228,340 Furniture and Equipment, Net1530

Total Assets1000 2,579,369

LIABILITIES84,145 Accounts Payable2110

256 Payroll Deductions & Withholdings2150

28,506 Accrued Wages Payable2160

41 Due to Fiduciary Funds2177

9,551 Due to Other Governments2180

91 Due to Student Groups2190

2,194 Accrued Expenses2200

Total Liabilities2000 124,784

NET POSITION1,448,720 Net Investment in Capital Assets3200

1,005,865 Unrestricted3900

Total Net Position3000 2,454,585 $

18The notes to the financial statements are an integral part of this statement.

EXHIBIT B-1DELL CITY INDEPENDENT SCHOOL DISTRICT

STATEMENT OF ACTIVITIESFOR THE YEAR ENDED AUGUST 31, 2014 Net (Expense)

Revenue and

Changes in Net

PositionProgram RevenuesData

Control

Codes

1 3 4 6

Operating

Grants and

Contributions

Charges for

ServicesExpenses

Governmental

Activities

Primary Gov.

Primary Government:

GOVERNMENTAL ACTIVITIES:22,352 875,024 101,698 (750,974)Instruction $ $ $ $11

- 5,433 139 (5,294)Instructional Resources and Media Services12

- 21,282 848 (20,434)Curriculum and Staff Development13

- 41,463 10,210 (31,253)School Leadership23

- 23,874 628 (23,246)Guidance, Counseling and Evaluation Services31

- 9,971 446 (9,525)Health Services33

- 29,692 475 (29,217)Student (Pupil) Transportation34

2,637 59,407 39,843 (16,927)Food Services35

4,683 43,666 510 (38,473)Extracurricular Activities36

6,494 426,287 4,697 (415,096)General Administration41

12,580 178,141 4,661 (160,900)Facilities Maintenance and Operations51

- 12,519 - (12,519)Data Processing Services53

- 12,380 - (12,380)Other Intergovernmental Charges99

[TP] TOTAL PRIMARY GOVERNMENT: 1,739,139 48,746 164,155 (1,526,238)$ $ $

DataControlCodes General Revenues:

Taxes:575,247 Property Taxes, Levied for General PurposesMT

837,323 State Aid - Formula GrantsSF

1,722 Investment EarningsIE

121,568 Miscellaneous Local and Intermediate RevenueMI

1,535,860 Total General RevenuesTR

Net Position - Beginning

Change in Net Position

Net Position - Ending

Prior Period Adjustment

CN

NB

NE

PA

9,622

2,424,439 20,524

2,454,585 $

19The notes to the financial statements are an integral part of this statement.


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GOVERNMENTAL FUND FINANCIAL STATEMENTS

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EXHIBIT C-1DELL CITY INDEPENDENT SCHOOL DISTRICT

BALANCE SHEET

GOVERNMENTAL FUNDS

AUGUST 31, 2014

Control

Data

Codes

General

Fund Funds

Other

Funds

Governmental

Total

ASSETS1,650 964,482 966,132 Cash and Cash Equivalents $ $ $1110

- 807,718 807,718 Property Taxes - Delinquent1220

- (743,101) (743,101)Allowance for Uncollectible Taxes (Credit)1230

12,573 83,446 96,019 Receivables from Other Governments1240

9,886 198,240 208,126 Due from Other Funds1260

- 1,155 1,155 Other Receivables1290

- 737 737 Prepayments1410

Total Assets1000 1,312,677 24,109 1,336,786 $ $ $

LIABILITIES8,457 75,688 84,145 Accounts Payable $ $ $2110

- 256 256 Payroll Deductions and Withholdings Payable2150

139 28,367 28,506 Accrued Wages Payable2160

3,963 202,215 206,178 Due to Other Funds2170

9,551 - 9,551 Due to Other Governments2180

- 91 91 Due to Student Groups2190

137 2,057 2,194 Accrued Expenditures2200

Total Liabilities2000 308,674 22,247 330,921

DEFERRED INFLOWS OF RESOURCES - 64,617 64,617 Unavailable Revenue - Property Taxes2601

Total Deferred Inflows of Resources2600 64,617 - 64,617

FUND BALANCESCommitted Fund Balance:

- 200,000 200,000 Other Committed Fund Balance3545

Assigned Fund Balance:1,862 - 1,862 Other Assigned Fund Balance3590

- 739,386 739,386 Unassigned Fund Balance3600

Total Fund Balances3000 939,386 1,862 941,248

Total Liabilities, Deferred Inflows & Fund Balances4000 1,312,677 24,109 1,336,786 $ $ $

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The notes to the financial statements are an integral part of this statement.


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THESTATEMENT OF NET POSITION

AUGUST 31, 2014

941,248 $Total Fund Balances - Governmental Funds

1,444,190 1 Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds. At the beginning of the year, the cost of these assets was $2,869,729 and the accumulated depreciation was $1,405,537. The net effect of including the beginning balances for capital assets (net of depreciation) in the governmental activities is to increase net position.

70,999 2 Current year capital outlays are expenditures in the fund financial statements,but they should be shown as increases in capital assets in the government-wide financial statements. The net effect of including the 2014 capital outlays is to increase net position.

(66,469)3 The 2014 depreciation expense increases accumulated depreciation. The net effect of the current year's depreciation is to decrease net position.

64,617 4 Various other reclassifications and eliminations are necessary to convert from the modified accrual basis of accounting to accrual basis of accounting. These include recognizing unavailable revenue from property taxes as revenue and eliminating interfund transactions. The net effect of these reclassifications and recognitions is to increase net position.

2,454,585 $19 Net Position of Governmental Activities

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STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

GOVERNMENTAL FUNDS


Control

Data

Codes

General

Fund Funds

Other

Funds

Governmental

Total

REVENUES:2,609 747,566 750,175 Total Local and Intermediate Sources $ $ $5700

3,461 893,836 897,297 State Program Revenues5800

64,262 39,562 103,824 Federal Program Revenues5900

Total Revenues5020 1,680,964 70,332 1,751,296

EXPENDITURES:Current:

59,506 767,584 827,090 Instruction0011

- 5,280 5,280 Instructional Resources and Media Services0012

- 20,392 20,392 Curriculum and Instructional Staff Development0013

8,217 30,938 39,155 School Leadership0023

- 23,216 23,216 Guidance, Counseling and Evaluation Services0031

- 9,390 9,390 Health Services0033

- 29,230 29,230 Student (Pupil) Transportation0034

- 57,507 57,507 Food Services0035

5,319 38,181 43,500 Extracurricular Activities0036

- 418,463 418,463 General Administration0041

- 174,548 174,548 Facilities Maintenance and Operations0051

- 12,519 12,519 Data Processing Services0053

Capital Outlay: - 70,999 70,999 Facilities Acquisition and Construction0081

Intergovernmental: - 12,380 12,380 Other Intergovernmental Charges0099

Total Expenditures6030 1,670,627 73,042 1,743,669

1200 Net Change in Fund Balances 10,337 (2,710) 7,627

0100 Fund Balance - September 1 (Beginning) 908,525 4,572 913,097

1300 Increase (Decrease) in Fund Balance 20,524 - 20,524

3000 Fund Balance - August 31 (Ending) $ 939,386 $ 1,862 $ 941,248

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RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES


7,627 $Total Net Change in Fund Balances - Governmental Funds

70,999 Current year capital outlays are expenditures in the fund financial statements, but they should be shown as increases in capital assets in the government-wide financial statements. The net effect of removing the 2014 capital outlays is to increase net position.

(66,469)Depreciation is not recognized as an expense in governmental funds since it does not require the use of current financial resources. The net effect of the current year's depreciation is to decrease net position.

(2,535)Various other reclassifications and eliminations are necessary to convert from the modified accrual basis of accounting to accrual basis of accounting. These include recognizing unavailable revenue from property taxes as revenue, adjusting current year revenue to show the revenue earned from the current year's tax levy, and eliminating interfund transactions. The net effect of these reclassifications and recognitions is to decrease net position.

9,622 $ Change in Net Position of Governmental Activities

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FIDUCIARY FUND FINANCIAL STATEMENTS

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EXHIBIT E-1DELL CITY INDEPENDENT SCHOOL DISTRICTSTATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDSAUGUST 31, 2014

Private

Purpose

Trust Funds Fund

Agency

ASSETS

20,903 13,643 Cash and Cash Equivalents $ $

- 41 Due from Other Funds

Total Assets 13,684 20,903 $

LIABILITIES

1,989 - Due to Other Funds $

18,914 - Due to Student Groups

Total Liabilities - 20,903 $

NET POSITION

13,684 Restricted for Scholarships

Total Net Position 13,684 $

28


EXHIBIT E-2DELL CITY INDEPENDENT SCHOOL DISTRICT

STATEMENT OF CHANGES IN FIDUCIARY FUND NET POSITIONFIDUCIARY FUNDS


Private

Purpose

Trust Funds

ADDITIONS:

17,646 Local and Intermediate Sources $

Total Additions 17,646

DEDUCTIONS:

24,795 Other Operating Costs

Total Deductions 24,795

Change in Net Position

Total Net Position - September 1 (Beginning)

Total Net Position - August 31 (Ending)

(7,149)

20,833

$ 13,684

29



NOTES TO THE FINANCIAL STATEMENTS

AUGUST 31, 2014

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Dell City Independent School District (the "District") is a public educational agency operating underthe applicable laws and regulations of the State of Texas. It is governed by a seven member Board ofTrustees (the "Board") elected by registered voters of the District. The District prepares its basicfinancial statements in conformity with generally accepted accounting principles promulgated by theGovernmental Accounting Standards Board and it complies with the requirements of the appropriateversion of Texas Education Agency’s Financial Accountability System Resource Guide (the "ResourceGuide") and the requirements of contracts and grants of agencies from which it receives funds.

A. Reporting Entity

Because the Board of Trustees (the "Board") is elected by the public; has the authority to makedecisions, appoint administrators and managers, and significantly influence operations; and has theprimary accountability for fiscal matters; the District is not included in any other governmental"reporting entity" as defined by the Governmental Accounting Standards Board ("GASB"). There areno component units included within the reporting entity.

B. Government-Wide and Fund Financial Statements

The Statement of Net Position and the Statement of Activities are government-wide financialstatements. They report information on all of the District’s nonfiduciary activities with most of theinterfund activities removed. Governmental activities include programs supported primarily by taxes,charges to school districts for services, state funds, grants and other intergovernmental revenues.

In addition to assets, the Statement of Net Position reports a separate section for deferred outflows ofresources. This separate financial statement category represents a consumption of net position thatapplies to a future period(s) and so will not be recognized as an outflow of resources(expense/expenditure) until that time.

In addition to liabilities, the Statement of Net Position reports a separate section for deferred inflowsof resources. This separate financial statement category represents an acquisition of net position thatapplies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until thattime.

The Statement of Activities demonstrates how other people or entities that participate in programs theDistrict operates have shared in the payment of the direct costs. The “charges for services” columnincludes payments made by parties that purchase, use, or directly benefit from goods or servicesprovided by a given function or segment of the District. Examples include tuition paid by students notresiding in the district, school lunch charges, etc. The “grants and contributions” column includesamounts paid by organizations outside the District to help meet the operational or capital requirementsof a given function. Examples include grants under the Elementary and Secondary Education Act. Ifa revenue is not a program revenue, it is a general revenue used to support all of the District’s functions.

(Continued)

30



AUGUST 31, 2014

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interfund activities between governmental funds appear as due to/due from on the Governmental FundBalance Sheet and as other resources and other uses on the Governmental Fund Statement of Revenues,Expenditures and Changes in Fund Balance. All interfund transactions between governmental funds areeliminated on the government-wide statements. Interfund activities between governmental funds andfiduciary funds remain as due to or due from on the government-wide Statement of Net Position. The fund financial statements provide reports on the financial condition and results of operations forthree fund categories - governmental and fiduciary. Since the resources in the fiduciary funds cannotbe used for District operations, they are not included in the government-wide statements. The Districtconsiders some governmental funds as major and reports their financial condition and results ofoperations in a separate column.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements use the economic resources measurement focus and theaccrual basis of accounting, as do the fiduciary fund financial statements. Revenues are recorded whenearned and expenses are recorded when a liability is incurred, regardless of the timing of the relatedcash flows. Property Taxes are recognized as revenues in the year for which they are levied. Grants andsimilar items are recognized as revenue as soon as all eligibility requirements imposed by the providerhave been met.

Governmental fund financial statements use the current financial resources measurement focus and themodified accrual basis of accounting. With this measurement focus, only current assets, currentliabilities and fund balances are included on the balance sheet. Operating statements of these fundspresent net increases and decreases in current assets (i.e., revenues and other financing sources andexpenditures and other financing uses).

The modified accrual basis of accounting recognizes revenues in the accounting period in which theybecome both measurable and available, and it recognizes expenditures in the accounting period in whichthe fund liability is incurred, if measurable. The District considers all revenues, except for property taxrevenue, available if they are collectible within one year after year end.

Revenues from local sources consist primarily of property taxes, services provided to districts, andrental income. Revenues received from the State are recognized under the susceptible -to- accrualconcept, that is, when they are both measurable and available. The District considers property taxrevenue available if they will be collected within 60 days of the end of the fiscal year. Miscellaneousrevenues are recorded as revenue when received in cash because they are generally not measurable untilactually received. Investment earnings are recorded as earned, since they are both measurable andavailable.

Unavailable revenue from property taxes arises only under the modified accrual basis of accounting.The governmental funds report this unavailable revenue as a deferred inflow of resources and recognizerevenue in the period that the amounts become available.

(Continued)

31



AUGUST 31, 2014


Grant funds are considered to be earned to the extent of expenditures made under the provisions of thegrant. Accordingly, when such funds are received, they are recorded as deferred revenues until relatedand authorized expenditures have been made. If balances have not been expended by the end of theproject period, grantors some times require the District to refund all or part of the unused amount.

The Fiduciary Funds are accounted for on a flow of economic resources measurement focus and utilizethe accrual basis of accounting. This basis of accounting recognizes revenues in the accounting periodin which they are earned and become measurable and expenses in the accounting period in which theyare incurred and become measurable. Within this measurement focus, all assets and all liabilitiesassociated with the operation of these funds are included on the fund Statement of Net Position. Thefund equity is segregated into invested in capital assets, restricted, and unrestricted.

The District has implemented GASB Statement No. 65, Items Previously Reported as Assets andLiabilities (“GASB 65"), which establishes accounting and financial reporting standards that reclassifyand recognize certain items that were previously reported as assets and liabilities as deferred outflowsof resources and deferred inflows of resources. The District’s financial statements as of August 31, 2014are presented in accordance with the guidance provided by this Statement.

D. Fund Accounting

The District reports the following major governmental funds:

1. The General Fund - The general fund is the District’s primary operating fund. It accounts forall financial resources except those required to be accounted for in another fund.

Additionally, the District reports the following fund types:

Governmental Funds:

1. Special Revenue Funds - The District accounts for resources restricted to, or designated for,specific purposes by the District or a grantor in a special revenue fund. Most Federal and Statefinancial assistance is accounted for in a Special Revenue Fund, and sometimes unused balancesmust be returned to the grantor at the close of specified project periods.

2. Debt Service Funds- The District has no Debt Service Funds.

3. Capital Projects Funds - The District has no Capital Projects Funds.

4. Permanent Funds - The District has no Permanent Funds.

Proprietary Funds:

5. Enterprise Funds - The District has no Enterprise Funds.

6. Internal Service Funds - The District has no Internal Service Funds.

(Continued)

32



AUGUST 31, 2014


Fiduciary Funds:

7. Private Purpose Trust Funds - The District accounts for donations for which the donor hasstipulated that both the principal and the income may be used for purposes that benefit partiesoutside the District. The District’s private purpose trust funds are the Lutrick Library Trust, theKarr Scholarship, the Adams Memorial Scholarship, the Nelson Puett Scholarship, the EmeraldScholarship, the Garcia Scholarship, the Chacon Scholarship, and the Oran Jones Scholarship.

8. Pension (and Other Employee Benefit) Trust Funds - The District has no Pension Trust Funds.

9. Investment Trust Fund - The District has no Investment Trust Funds.

10. Agency Funds - The District accounts for resources held for others in a custodial capacity inagency funds. Assets equal liabilities, and this fund does not include measurements or results ofoperations. The District’s Agency Fund is the Student Activity Fund.

E. Other Accounting Policies

1. Investments with an original maturity greater than one year from date of purchase are stated atfair value based on quoted market prices as of year end, except for nonparticipating interest-earning investment contracts which are reported at cost. Investments with an original maturityof less than one year are reported at amortized cost.

2. The funds of the District must be deposited and invested under the terms of a contract, contentsof which are set out in the Depository Contract Law. The depository bank places approvedpledged securities for safekeeping and trust with the District’s agent bank in an amount sufficientto protect District funds on a day-to-day basis during the period of the contract. The pledge ofapproved securities is waived only to the extent of the depository bank’s dollar amount of FederalDeposit Insurance Corporation (“FDIC”) insurance.

3. The Public Funds Investment Act (Government Code Chapter 2256) contains specificprovisions in the areas of investment practices, management reports and establishment ofappropriate policies. Among other things, it requires the District to adopt, implement, andpublicize an investment policy. That policy must address the following areas: (1) safety ofprincipal and liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risklevels, (5) expected rates of return, (6) maximum allowable stated maturity of portfolioinvestments, (7) maximum average dollar-weighted maturity allowed based on the stated maturitydate for the portfolio, (8) investment staff quality and capabilities, (9) and bid solicitationpreferences for certificates of deposit. Statutes authorize the District to invest in (1) obligationsof the U.S. Treasury, certain U.S. agencies, and the State of Texas; (2) certificates of deposit, (3)certain municipal securities, (4) money market savings accounts, (5) repurchase agreements, (6)bankers’ acceptances, (7) mutual funds, (8) investment pools, (9) guaranteed investment contracts,(10) and common trust funds. The Act also requires the District to have independent auditorsperform test procedures related to investment practices as provided by the Act. The District is notin substantial compliance with the requirements of the Act and with local policies.

(Continued)

33



AUGUST 31, 2014


4. Additional policies and contractual provisions governing deposits and investments for the Districtare specified below:

Credit Risk:

Deposits - The District is not exposed to credit risk.

Temporary Investments - To limit the risk that an issuer or other counterparty to an investmentwill not fulfill its obligations, the District limits investments in public funds investment pools tothose that have received top ratings issued by nationally recognized statistical rating organizations(NRSROs). As of August 31, 2014, the District’s investments in LoneStar Investment Pool wasrated AAAm by Standard & Poors.

Custodial Credit Risk:

Deposits - State law requires governmental entities to contract with financial institutions in whichfunds will be deposited to secure those deposits with insurance or pledged securities with a fairvalue equaling or exceeding the amount on deposit at the end of each business day. Since theDistrict complies with this law, it has minimal custodial credit risk for deposits.

Temporary Investments - To limit the risk that, in the event of the failure of the counterparty toa transaction, a government will not be able to recover the value of investment or collateralsecurities that are in possession of an outside party, the District requires counterparties to registerthe securities in the name of the District and hand them over to the District or its designated agent. This includes securities in securities lending transactions. Investment pools are not exposed tocustodial credit risk because their existence is not evidenced by securities that exist in physicalor book-entry form.

Concentration of Credit Risk:

Deposits - The District is not exposed to concentration of credit risk.

Temporary Investments - To limit the risk of loss attributed to the magnitude of a government’sinvestment in a single issuer, the District’s policy states that the portfolio must be diversified. Concentration of Credit Risk is not applicable to investment pools since the purpose of thesepools is to diversify the District’s investment portfolio.

Interest Rate Risk:

Deposits - The District is not exposed to interest rate risk.

(Continued)

34



AUGUST 31, 2014


Temporary Investments - To limit the risk that changes in interest rates will adversely affect thefair value of the investments, the District requires its investment portfolio to have maturities ofless than one year on a weighted average maturity (WAM) basis. All of the District’s investmentpools qualify as a 2a7-like pools and are excluded from the interest rate risk disclosure. See NoteIV for further details.

Foreign Currency Risk:

Deposits - The District attempts to limit the risk that changes in exchange rates will adverselyaffect a deposit by avoiding deposits denominated in a foreign currency.

Temporary and Long-term Investments - The District attempts to limit the risk that changes inexchange rates will adversely affect the fair value of an investment by avoiding investment poolsor securities which are denominated in a foreign currency.

5. Inventories of supplies on the balance sheet are reported at weighted average cost or at cost andthey include consumable maintenance, instructional, office, athletic, and transportation items. Supplies are recorded as expenditures when they are consumed. Inventories of food commoditiesare recorded at market values supplied by the Texas Department of Human Services. Althoughcommodities are received at no cost, their fair market value is supplied by the Texas Departmentof Human Services and recorded as inventory and deferred revenue when received. Whenrequisitioned, inventory and deferred revenue are relieved, expenditures are charged, and revenueis recognized for an equal amount.

6. It is the District’s policy to permit some employees to accumulate earned but unused vacation andsick pay benefits. The District currently has a policy to pay any amounts related to unpaidaccumulated sick leave when employees separate from service with the government.

7. Capital assets, which include land, buildings, furniture and equipment and are reported in theapplicable governmental activities columns in the government-wide financial statements. Capitalassets are defined by the District as assets with an initial, individual cost of more than $5,000 andan estimated useful life in excess of one year. Such assets are recorded at historical cost orestimated historical cost if purchased or constructed. Donated capital assets are recorded atestimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materiallyextend assets lives are not capitalized. Major outlays for capital assets and improvements arecapitalized as projects are constructed.

Buildings, furniture and equipment of the District are depreciated using the straight line methodover the following estimated useful lives:

(Continued)

35



AUGUST 31, 2014


Assets Years

Buildings 20-75Building Improvements 15Vehicles 5-10Office Equipment 8-10Computer Equipment 3-5

8. The District reports the following fund balance categories which describe the nature and relativestrength of the spending constraints:

• Non-spendable - Represents amounts that are not in spendable form or are legally orcontractually required to be maintained intact, such as inventories.

• Restricted Fund Balance - Represents amounts that are restricted to specific purposes, withconstraints placed on the use of resources by (a) external creditors, grantors, contributors,or laws or regulations of other governments; or (b) imposed by law through constitutionalprovisions orenabling legislation.

• Committed Fund Balance - Represents amounts that are restricted for purposes which theBoard of Trustees, the District’s highest level of decision-making authority, has designatedtheir use. These amounts are committed through a formal resolution, requiring funds to beused only for specific purposes. These amounts can only be re-allocated by the same formalaction that was taken to originally commit those amounts. The Board of Trustees shall takeaction to commit funds for a specific purpose prior to the end of the fiscal year.

• Assigned Fund Balance – Represents amounts that are constrained by the government’sintent to be used for specific purposes, but are neither restricted nor committed.

• Unassigned Fund Balance – Represents amounts that are available for any purpose andhave not been restricted, committed, or assigned for specific purposes. Positive amountsare reported only in the general fund.

The Board of Trustees establishes (and modifies or rescinds) fund balance commitments bypassage of a formal resolution. Assigned fund balance is established by the Superintendent ordesignated managers through adoption or amendment of the budget as intended for specificpurpose.

(Continued)

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AUGUST 31, 2014


When an expenditure is incurred for purposes for which both restricted and unrestricted(committed, assigned, or unassigned) fund balance is available, the District considers restrictedfunds to have been spent first. When an expenditure is incurred for which committed, assigned,or unassigned fund balances are available, the District considers amounts to have been spent firstout of committed amounts, followed by assigned amounts, and then unassigned amounts whenexpenditures are incurred for purposes of which amounts in any of those unrestricted fund balanceclassifications could be used, unless the Board of Trustees or designee’s have provided otherwisein its commitment or assignment actions.

9. The Data Control Codes refer to the account code structure prescribed by TEA in the FinancialAccountability System Resource Guide. Texas Education Agency requires school districts todisplay these codes in the financial statements filed with the Agency in order to insure accuracyin building a Statewide data base for policy development and funding plans.

10. The District receives substantial amounts of funding from special revenue sources. The majorityof this money is cost reimbursement to the District by the federal government or Texas EducationAgency. Indirect cost is not charged.

11. In accordance with the Resource Guide, the District has adopted and installed an accountingsystem which meets as least the minimum requirements prescribed by the Texas State Board ofEducation and approved by the State Auditor. Specifically, the District’s accounting system usescodes and the code structure presented in the Resource Guide. Mandatory codes are recorded inthe order provided in the Resource Guide.

12. Property taxes are levied by October 1 on the assessed value listed as of the prior January 1 forall real and business personal property located in the District in conformity with Subtitle E, TexasProperty Tax Code. Taxes are due on receipt of the tax bill and are delinquent if not paid beforeFebruary 1 of the year following the year in which imposed. On January 31 of each year, a taxlien attaches to the property to secure the payment of all taxes, penalties, and interest ultimatelyimposed. Property tax revenues are considered available (1) when they become due or past dueand receivable within the current period and (2) when they are expected to be collected during a60-day period after the close of the school fiscal year.

13. Allowance for uncollectible tax receivable within the General Fund is based on historicalexperience in collecting property taxes. Uncollectible personal property taxes are periodicallyreviewed and written off, but the District is prohibited from writing off real property taxes withoutspecific statutory authority from the Texas Legislature.

14. Preparation of these financial statements in conformity with generally accepted accountingprinciples requires the use of management’s estimates and assumptions that affect the reportedamounts of assets and liabilities at the date of the financial statements and the reported amountsof revenues and expenses during the reporting period. Actual results could differ from thoseestimates.

(Continued)

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AUGUST 31, 2014


15. Net Position on the Statement of Net Position includes the following:

Net investment in capital assets - this component of net position consists of capital assets,net accumulated depreciation, reduced by the outstanding balances of bonds, mortgages,notes or other borrowings that are attributable to the acquisition, construction orimprovement of those assets. Deferred outflows of resources and deferred inflows ofresources that are attributable to the acquisition, construction, or improvement of thoseassets or related debt will be included in this component of net position.

Unrestricted net position - this component of net position is the net amount of assets,deferred outflows of resources, liabilities, and deferred inflows of resources that are notincluded in the determination of net investment in capital assets or the restricted componentsof net position.

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and theGovernment-Wide Statement of Net Position

Exhibit C-2 provides the reconciliation between the fund balance for total governmental funds on thegovernmental fund balance sheet and the Net Position for governmental activities as reported in thegovernment-wide statement of Net Position. One element of that reconciliation explains that capitalassets are not financial resources and are therefore not reported in governmental funds. In addition,long-term liabilities, including bonds payable, are not due and payable in the current period and arenot reported as liabilities in the funds. The District has no long-term liabilities.

B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues,Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activities

Exhibit C-4 provides a reconciliation between the net changes in fund balance as shown on thegovernmental fund statement of revenues, expenditures, and changes in fund balances and the changesin Net Position of governmental activities as reported on the government-wide statement of activities. One element of that reconciliation explains that current year capital outlays and debt principal paymentsare expenditures in the fund financial statements, but should be shown as increases in capital assets anddecreases in long-term debt in the government-wide statements. This adjustment affects both net assetbalance and the change in Net Position. The District has no long-term debt.

Another element of the reconciliation on Exhibit C-4 is described as various other reclassifications andeliminations necessary to convert from the modified accrual basis of accounting to accrual basis ofaccounting. This adjustment is the result of several items.

(Continued)

38



AUGUST 31, 2014

III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Data

The Board adopts an "appropriated budget" for the General Fund and the Food Service Fund (whichis included in the General Fund). The District is required to present the adopted and final amendedbudgeted revenues and expenditures for each of these funds. The District compares the final amendedbudget to actual revenues and expenditures. The General Fund Budget report appears in Exhibit G-1and the other report is in Exhibit J-2. The Board does not adopt a budget for special revenue fundssince the budgets are designated by the grantor.

The following procedures are followed in establishing the budgetary data reflected in the financialstatements:

1. Prior to August 20 the District prepares a budget for the next succeeding fiscal year beginningSeptember 1. The operating budget includes proposed expenditures and the means of financingthem.

2. A meeting of the Board is then called for the purpose of adopting the proposed budget. At leastten days' public notice of the meeting must be given.

3. On August 29, 2013, the 2013-2014 budget was legally adopted by the Board. Once a budget isapproved, it can only be amended at the function and fund level by approval of a majority of themembers of the Board. Amendments are presented at board meetings. Each amendment musthave Board approval. As required by law, such amendments are made before the fact, arereflected in the official minutes of the Board, and are not made after fiscal year end. Severalamendments were necessary during the year.

4. Each budget is controlled by the budget coordinator at the revenue and expenditurefunction/object level. Budgeted amounts are as amended by the Board. All budget appropriationslapse at year end.

(Continued)

39



AUGUST 31, 2014

IV. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS

A. Deposits and Investments

At August 31, 2014 the carrying amount of the District’s deposits (cash including fiduciary funds cash)was $36,196 and the bank balance was $55,752. The Districts’ cash deposits at August 31, 2014 wereentirely covered by FDIC insurance or by pledged collateral held by the District’s agent bank in theDistrict’s name.

In addition, the following is disclosed regarding coverage of combined balances on the date of highestdeposit:

a. Depository: Sierra Blanca Bank

b. The market value of bonds and securities pledged as of the date of the highest combined balanceon deposit was $ 763,315.

c. The highest combined balances of cash, savings, and time deposit accounts amounted to$ 376,230 and occurred during the month of February 2014.

d. Total amount of FDIC coverage at the time of the largest combined balance was $250,000. Theshortage of $126,230 was covered by Sierra Blanca securities in the name of the District.

Due to the immediate availability of the funds, the District’s temporary investments are presented ascash as of August 31, 2014 and, include the following:

Amortized Cost Fair Value WAM (In Days)

Lone Star Investment Pool $ 964,482 $ 964,482 49

Total $ 964,482 $ 964,482

The Lone Star Investment Pool is a member owned, member-governed public funds investment pool. It is managed by an eleven member Board of Trustees and the Board is authorized to adopt and maintainbylaws. There is also an Advisory Board composed of participants that gathers and exchangesinformation from participants relating to the operation of the Pool. Each fund within the Pool hasreceived the highest rating, that of AAAm, from Standard & Poor’s as required by the Public Fund’sInvestment Act.

(Continued)

40

IV. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)



AUGUST 31, 2014

B. Interfund Receivables and Payables

Interfund balances are the result of normal operations and are cleared out periodically. Managementintends to pay out these balances within one year. Interfund balances at August 31, 2014 consisted ofthe following individual fund balances:

Due fromOther Funds

Due toOther Funds

General Fund:Non-Major Governmental Funds $ 196,251 $ 202,174 Agency Funds 1,989 41

Total General Fund 198,240 202,215

Non Major Special Revenue Funds:General Fund 9,886 3,963

Agency Fund:General Fund - 1,989

Trust Funds:General Fund 41 -

Total $ 208,167 $ 208,167

C. Capital Asset Activity

Capital asset activity for the District for the year ended August 31, 2014, was as follows:

Primary Governments

Beginning Balance AdditionsDeletion

and Reclassification Ending Balance

Governmental activities:Buildings and improvements $ 1,798,953 $ 70,999 $ - $ 1,869,952 Furniture and equipment 140,052 - - 140,052 Vehicles 417,232 - - 417,232

Non-depreciable AssetsLand 263,052 - - 263,052Buildings and improvements 112,235 - - 112,235Vehicles 118,205 - - 118,205

Totals at historic cost 2,849,729 70,999 - 2,920,728

(Continued)

41




AUGUST 31, 2014

Primary Governments

Beginning Balance AdditionsDeletion

and Reclassification Ending Balance

Less accumulated depreciation for: Buildings and improvements 989,014 35,846 - 1,024,860 Furniture and equipment 104,852 10,902 - 115,754 Vehicles 311,673 19,721 - 331,394

Total accumulated depreciation 1,405,539 66,469 - 1,472,008

Governmental activities capital assets, net $ 1,444,190 $ 4,530 $ - $ 1,448,720

Depreciation expense was charged to governmental functions as follows:

Instruction $ 47,934 Instructional resources and media services 153 Curriculum and instructional staff development 890 School leadership 2,308 Guidance, counseling and evaluation services 658 Health services 581 Student (pupil) transportation 462 Food services 1,900 Cocurricular/extracurricular activities 166 General administration 7,824 Plant maintenance and operations 3,593

Total depreciation expense $ 66,469

D. Pension Plan

Plan Description: Dell City Independent School District contributes to the Teacher Retirement Systemof Texas (TRS), a cost-sharing multiple employer defined benefit pension plan. TRS administersretirement and disability annuities, and death and survivor benefits to employees and beneficiaries ofemployees of the public school systems of Texas. It operates primarily under the provisions of theTexas Constitution, Article XVI, Sec. 67, and Texas Government Code, Title 8, Subtitle C. TRS alsoadministers proportional retirement benefits and service credit transfer under Texas Government Code,Title 8, Chapters 803 and 805, respectively. The Texas state legislature has the authority to establishand amend benefit provisions of the pension plan and may, under certain circumstances, grant specialauthority to the TRS Board of Trustees. TRS issues a publicly available financial report that includesfinancial statements and required supplementary information for the defined benefit pension plan. Thatreport may be obtained by downloading the report from the TRS Internet website, www.trs.state.tx.us,under the TRS Publication heading, by calling the TRS Communications Department at 1-800-223-8778, or by writing to the TRS Communications Department, 1000 Red River Street, Austin, Texas78701.

(Continued)

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AUGUST 31, 2014

Funding Policy: Contribution requirements are not actuarially determined but are established andamended pursuant to the following state funding policy: (1) The state constitution requires thelegislature to establish a member contribution rate of not less than 6.0% of the member’s annualcompensation and a state contribution rate not less than 6.0% and not more than 10.0% of the aggregateannual compensation of all members of the system during that fiscal year; (2) state statute prohibitsbenefit improvements, if as a result of the particular action, the time required to amortize TRS’sunfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if theamortization period already exceeds 31 years, the period would be increased by such action.

Contribution rates and amounts are equal to the required contributions for each year and are shown inthe table below for fiscal years 2012 to 2014. These rates are set by the General Appropriations Act. In certain instances, the reporting district is required to make all or a portion of the state’s and/ormember’s contribution and on the portion of the employee’s salaries that exceeded the statutoryminimum.

Contribution Rates and Contribution Amounts

Member State

Federal, StatutoryMinimum,

New Members,Surcharge(District)

Year Rate Amount Rate Amount Amount

2014 6.4% $ 57,206 6.800% $ 44,490 $ 16,292

2013 6.4% $ 56,682 6.400% $ 51,369 $ 5,267

2012 6.4% $ 57,118 6.000% $ 51,086 $ 8,331

E. Retiree Health Plan

Plan Description: The Dell City Independent School District contributes to the Texas Public SchoolRetired Employees Group Insurance Program (TRS-Care), a cost-sharing multiple-employer definedbenefit postemployment health care plan administered by the Teacher Retirement System of Texas. TRS-Care provides health care coverage for certain persons (and their dependents) who retired underthe Teacher Retirement System of Texas. The statutory authority for the program is Texas InsuranceCode, Chapter 1575. Section 1575.052 grants the TRS Board of Trustees the authority to establish andamend basic and optional group insurance coverage for participants. The Teacher Retirement Systemof Texas issues a publicly available financial report that includes financial statements and requiredsupplementary information for TRS-Care. That report may be obtained by or visiting the TRS Web siteat www.trs.state.tx.us under the TRS Publications heading, by calling the TRS CommunicationsDepartment at 1-800-223-8778, or by writing to the Communications Department of the TeacherRetirement System of Texas at 1000 Red River Street, Austin, Texas 78701.

(Continued)

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AUGUST 31, 2014

Funding Policy. Contribution requirements are not actuarially determined but are legally establishedeach biennium by the Texas Legislature. Texas Insurance Code, Sections 1575.202, 203, and 204establish state, active employee and public school contributions, respectively. Funding for free basiccoverage is provided by the program based upon public school district payroll. Per Texas InsuranceCode, Chapter 1575, the public school contribution may not be less than 0.25% or greater then 0.75%of the salary of each active employee of the public school. Funding for optional coverage is providedby those participants selecting the optional coverage. Contribution rates and amounts are equal to therequired contributions for each year and are shown in the table below for fiscal years 2012 to 2014.

Contribution Rates

Period/Year Ended Member State School District

Rate Amount Rate Amount Rate Amount

2014 .65% $ 5,810 1.0% $ 8,474 .55% $ 4,988

2013 .65% 5,747 .5% 4,421 .55% 4,863

2012 .65% 5,835 1.0% 8,977 .55% 4,938

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which was effectiveJanuary 1, 2006, established prescription drug coverage for Medicare beneficiaries known as MedicarePart D. One of the provisions of Medicare Part D allows for the Texas Public School Retired EmployeeGroup Insurance Program (TRS-Care) to receive retiree drug subsidy payments from the federalgovernment to offset certain prescription drug expenditures for eligible TRS-Care participants.

Medicare Part D contributions made on behalf of the District’s employees for the years endedAugust 31, 2014, 2013 and 2012 were $2,501, $2,457, and $2,642, respectively. These amounts arerecorded as equal revenues and expenditures in the governmental fund financial statements of theDistrict.

F. Unemployment Compensation Pool

During the year ended August 31, 2014, Dell City ISD provided unemployment compensationcoverage to its employees through participation in the TASB Risk Management Fund (the Fund). TheFund was created and is operated under the provisions of the Interlocal Cooperation Act, Chapter 791ofthe Texas Government Code. The Fund’s Unemployment Compensation Program is authorized bySection 22.005 of the Texas Education Code and Chapter 172 of the Texas Local Government Code. All members participating in the Fund execute Interlocal Agreements that define the responsibilitiesof the parties.

The Fund meets its quarterly obligations to the Texas Workforce Commission. Expenses are accruedeach month until the quarterly payment has been made. Expenses can be reasonably estimated;therefore, there is no need for specific or aggregate stop loss coverage for UnemploymentCompensation pool members.

(Continued)

44




AUGUST 31, 2014

The Fund engages the services of an independent auditor to conduct a financial audit after the close ofeach plan year on August 31. The audit is approved by the Fund’s Board of Trustees in February ofthe following year. The Fund’s audited financial statements as of August 31, 2013, are available onthe TASB Risk Management Fund website and have been filed with the Texas Department of Insurancein Austin.

G. Commitments under Leases

Operating LeasesAs of August 31, 2014 the District had entered into an operating lease agreement for two copiers havingan initial or remaining noncancellable lease term in excess of one year.

Commitments under operating (non-capitalized) lease agreements provide for minimum future rentalpayments estimated by management as of August 31, 2014, as follows:

Year Ending June 30,

2015 $ 8,485 2016 8,485 2017 8,485 2018 8,485 2019 702

Total Minimum Rentals $ 34,642

Rental Expenditures in Fiscal year 2014 amounted to $10,447.

H. Accumulated Unpaid Vacation and Sick Leave

The District does not accrue unused sick leave or unpaid vacation in its financial statements. TheDistrict maintains a policy that those employees eligible for paid vacation may not carryover anyunused vacation at the end of the fiscal year. Vacations are to be taken within the same year they areearned, and any unused days at the end of the year are forfeited. Therefore, no liability has been accruedin the accompanying financial statements.

Employees of the District are entitled to sick leave based on category or class of employment. Sickleave is allowed to be accumulated but does not vest. Therefore, a liability for unused sick leave hasnot been recorded in the accompanying financial statements.

(Continued)

45




AUGUST 31, 2014

I. Receivables from Other Governments

The District participates in a variety of federal and state programs from which it receives grants topartially or fully finance certain activities. In addition, the District receives entitlements from the Statethrough the School Foundation and Per Capita Programs. A majority of the federal grants are passedthrough the TEA. Amounts due from federal and state governments as of August 31, 2014, aresummarized below.

GeneralFund

Non-MajorGovernmental

Funds Total

Federal Grants $ 1,250 $ 12,514 $ 13,764 State Entitlements 82,196 - 82,196 State Grants - 59 59

Total $ 83,446 $ 12,573 $ 96,019

J. Revenue from Local and Intermediate Sources

During the year, revenues from local and intermediate sources consisted of the following:

General Fund


FundsTotal

Governmental

Property Taxes $ 577,782 $ - $ 577,782Penalties and Interest on Taxes 55,019 - 55,019Payment in Lieu of Taxes 50,964 - 50,964Food Service Activity 2,637 - 2,637Investment income 1,651 71 1,722Athletic Activities 2,502 - 2,502Rent Income 12,580 - 12,580Insurance Recovery 15,586 - 15,586Other Revenues from Local Sources 28,845 2,538 31,383

Total $ 747,566 $ 2,609 $ 750,175

(Continued)

46




AUGUST 31, 2014

K. Fund Balance

As of August 31, 2014, fund balances are composed of the following:

General Fund


Funds

TotalGovernmental

Funds

Committed: Construction $ 200,000 $ - $ 200,000Assigned 1,862 1,862Unassigned 739,386 - 739,386

Total fund balances $ 939,386 $ 1,862 $ 941,248

L. Encumbrances

There were no significant or material encumbrances.

M. Litigation

As of August 31, 2014, management is not aware of any claim which would have a material adverseeffect on the financial statements.

N. Other Significant Commitments and Contingencies

Federal and State Funding - Dell City Independent School District participates in numerous state andfederal programs that are subject to audit by the Texas Education Agency and various Federal and/orState audit agencies. These programs have complex compliance requirements, and should State orFederal auditors discover areas of material noncompliance, those District funds may be subject torefund if so determined by administrative audit review.

In the opinion of administration, there are no significant contingent liabilities relating to compliancewith the rules and regulations governing the respective grants; therefore, no provision has been recordedin the accompanying combined financial statements for such contingencies.

O. Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors and omissions; injuries to employees; and natural disasters. The Board maintainsinsurance policies acquired from independent insurance carriers covering all property, crime, generalliability, inland marine, automobile, educators legal liability and workers’ compensation. There havebeen no significant reductions to insurance coverage from prior years and settlements have not exceededinsurance coverage.

(Continued)

47




AUGUST 31, 2014

For the year ended August 31, 2014, Dell City Independent School District carried insurance forbuilding and property in the amount of $6,693,000 and $1,182,700 respectively, with deductiblesranging from $10,000 to $1,000,000 per occurrence.

P. Related Party Transactions

From time to time, the District may enter into transactions with related parties through the normalcourse of business. If a Board member has a conflict of interest, proper documentation is completedand he/she is required to abstain from any discussion or voting regarding the matter. Management isnot aware of any material related party transactions that occurred during the 2013-2014 fiscal year.

Q. Budget Overages

The general fund experienced budget overages in function 41, function 51 and function 81 in theamounts of $53,877, $30,691 and $47,499, respectively. These budget overages were a resultexpenditures that were not properly coded and were subsequently reclassified to the proper function.

R. Deficit Fund Balance

As of August 31, 2014, the Child Nutrition Program that is reported in the general fund had a deficitfund balance of $13,824. Management believes this will not have an impact on the operations of thisfund as it is their intention to cover any shortfalls with general fund assets.

S. Prior Period Adjustment

A prior period adjustment in the amount of $20,524 was recorded in the General Fund to correct theFoundation School Program revenue related to the fiscal year end 2013 that was recorded in 2014. Thisadjustment resulted in an increase in beginning fund balance.

T. New Accounting Pronouncements

The District has not completed the process of evaluating the impact on its financial position that willresult from adopting Governmental Accounting Standards Board Statements No. 68, Accounting andFinancial Reporting for Pensions- and amendment of GASB Statements No. 27, effective for fiscalyears beginning after June 15, 2014, and No. 71, Pension Transition for Contributions Made Subsequentto the Measurement Date- an amendment of GASB Statement No. 68, to be applied simultaneously withGASB Statement No. 68. The Statements require that the net present value of pension liabilities bereported in the financial statements and that any contributions between the measurement date of thereported net pension liabilities and the end of the reporting period be recognized as a deferred outflowof resources.

48

REQUIRED SUPPLEMENTARY INFORMATION

49

EXHIBIT G-1DELL CITY INDEPENDENT SCHOOL DISTRICT

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL - GENERAL FUND


Control

Data

CodesOriginal Final

(GAAP BASIS)

(Negative)

Positive or

Final BudgetVariance WithActual Amounts

Budgeted Amounts

REVENUES:729,500 704,215 747,566 18,066 Total Local and Intermediate Sources $ $ $ $5700

780,700 842,932 893,836 113,136 State Program Revenues5800

46,090 46,090 39,562 (6,528)Federal Program Revenues5900

Total Revenues5020 1,593,237 1,556,290 1,680,964 124,674

EXPENDITURES:

Current:761,461 773,261 767,584 (6,123)Instruction0011

19,516 19,516 5,280 14,236 Instructional Resources and Media Services0012

29,575 29,575 20,392 9,183 Curriculum and Instructional Staff Development0013

29,570 35,070 30,938 (1,368)School Leadership0023

22,675 19,175 23,216 (541)Guidance, Counseling and Evaluation Services0031

9,005 2,305 9,390 (385)Health Services0033

28,662 120,862 29,230 (568)Student (Pupil) Transportation0034

51,278 69,800 57,507 (6,229)Food Services0035

41,511 72,511 38,181 3,330 Extracurricular Activities0036

364,586 205,100 418,463 (53,877)General Administration0041

143,857 129,357 174,548 (30,691)Facilities Maintenance and Operations0051

13,757 6,657 12,519 1,238 Data Processing Services0053

Capital Outlay:23,500 38,000 70,999 (47,499)Facilities Acquisition and Construction0081

Intergovernmental:19,000 19,000 12,380 6,620 Other Intergovernmental Charges0099

Total Expenditures6030 1,540,189 1,557,953 1,670,627 (112,674)

1200 Net Change in Fund Balances 53,048 (1,663) 10,337 12,000

0100 Fund Balance - September 1 (Beginning) 908,525 908,525 908,525 -

1300 Increase (Decrease) in Fund Balance - - 20,524 20,524

3000 Fund Balance - August 31 (Ending) $ 961,573 $ 906,862 $ 939,386 $ 32,524

50

SUPPLEMENTARY INFORMATION

51


COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS

AUGUST 31, 2014

Control

Data

CodesESEA Title I

Part A Migrant

Part C

ESEA Title I

Formula

IDEA - Part B

Recruiting

Training and

ESEA II, A

211 212 224 255

ASSETS

- - - - $ $ $ $1110 Cash and Cash Equivalents

3,461 9,001 - 52 1240 Receivables from Other Governments

- - 123 - 1260 Due from Other Funds

Total Assets1000 9,001 3,461 123 52 $ $ $ $

LIABILITIES

- 8,457 - - $ $ $ $2110 Accounts Payable

- 139 - - 2160 Accrued Wages Payable

3,461 391 - 52 2170 Due to Other Funds

- - - - 2180 Due to Other Governments

- 14 123 - 2200 Accrued Expenditures

Total Liabilities2000 9,001 3,461 123 52

FUND BALANCES

Assigned Fund Balance:

- - - - 3590 Other Assigned Fund Balance

Total Fund Balances3000 - - - -

4000 Total Liabilities and Fund Balances 9,001 3,461 123 52 $ $ $ $

52

EXHIBIT H-1

Workforce

Investment

Initiative

Success

Student

Funds

Activity

Campus

Funds

Governmental

Nonmajor

271 404 461 Total

Act

1,650 - - 1,650 $ $ $ $

12,573 - 59 -

9,886 9,551 - 212

9,551 59 1,862 24,109 $ $ $ $

8,457 - - - $ $ $ $

139 - - -

3,963 - 59 -

9,551 9,551 - -

137 - - -

9,551 59 - 22,247

1,862 - - 1,862

- - 1,862 1,862

9,551 59 1,862 24,109 $ $ $ $

53


COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES INFUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS


Control

Data

CodesESEA Title I

Part A Migrant

Part C

ESEA Title I

Formula

IDEA - Part B

Recruiting

Training and

ESEA II, A

211 212 224 255

REVENUES: - - - - Total Local and Intermediate Sources5700 $ $ $ $

3,461 - - - State Program Revenues5800 - 32,302 21,127 9,792 Federal Program Revenues5900

Total Revenues5020 32,302 3,461 21,127 9,792

EXPENDITURES:

Current:3,461 32,302 21,127 1,575 Instruction0011

- - - 8,217 School Leadership0023 - - - - Extracurricular Activities0036

Total Expenditures6030 32,302 3,461 21,127 9,792

1200 Net Change in Fund Balance - - - -

0100 Fund Balance - September 1 (Beginning) - - - -

3000 Fund Balance - August 31 (Ending) $ - $ - $ - $ -

54

EXHIBIT H-2

Workforce

Investment

Act Initiative

Success

Student

FundsActivity

Campus

Funds

Governmental

Nonmajor

271 404 461 Total

- - 2,609 2,609 $ $ $ $ - - - 3,461 - 1,041 - 64,262

1,041 - 2,609 70,332

- 1,041 - 59,506 - - - 8,217 - - 5,319 5,319

1,041 - 5,319 73,042

- - (2,710) (2,710)

- - 4,572 4,572

$ - $ - $ 1,862 $ 1,862

55


56

EXHIBIT H-3


STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND


BALANCE

SEPTEMBER 1

2013 ADDITIONS

DEDUCTIONS

2014

AUGUST 31

BALANCE

STUDENT ACTIVITY ACCOUNTAssets:

39,891 20,739 39,727 Cash and Temporary Investments 20,903 $ $ $ $ - 91 91 Due From Other Funds -

Total Assets 20,830 39,891 39,818 20,903 $ $ $ $

STUDENT ACTIVITY ACCOUNTLiabilities:

1,989 2,525 2,525 Due to Other Funds 1,989 $ $ $ $37,902 18,305 37,293 Due to Student Groups 18,914

Total Liabilities 20,830 39,891 39,818 20,903 $ $ $ $

TOTAL AGENCY FUNDSAssets:

39,891 20,739 39,727 Cash and Temporary Investments 20,903 $ $ $ $ - 91 91 Due From Other Funds -

Total Assets 20,830 39,891 39,818 20,903 $ $ $ $

Liabilities:1,989 2,525 2,525 Due to Other Funds 1,989 $ $ $ $

37,902 18,305 37,293 Due to Student Groups 18,914

Total Liabilities 20,830 39,891 39,818 20,903 $ $ $ $

57

DELL CITY INDEPENDENT SCHOOL DISTRICTCOMBINING STATEMENT OF NET POSITION

PRIVATE PURPOSE TRUST FUNDSAUGUST 31, 2014

Lutrick

Library

Trust

Scholarship

Karr

Scholarship

Memorial

Adams

Scholarship

Puett

Nelson

818 819816 817

ASSETS1,440 4,365 5,126 2,000 Cash and Cash Equivalents $ $ $ $

40 - - - Due from Other Funds

Total Assets 4,365 1,480 5,126 2,000

NET POSITION1,480 4,365 5,126 2,000 Restricted for Scholarships

Total Net Position 4,365 1,480 5,126 2,000 $ $ $ $

58

EXHIBIT H-4

Emerald

Scholarship Scholarship

Garcia

Scholarship

Jones

Oran

Scholarship

Chacon Private

Purpose

Trust Funds

820 821 822 823 Total

13,643 - 675 - 37 $ $ $ $ $41 - - - 1

675 - 38 - 13,684

13,684 - 675 - 38

675 - 38 - 13,684 $ $ $ $ $

59


COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITIONPRIVATE PURPOSE TRUST FUNDS


Lutrick

Library

Trust

Scholarship

Karr

Scholarship

Memorial

Adams

Scholarship

Puett

Nelson

816 817 818 819

ADDITIONS:

1,020 - - 16,000 Local and Intermediate Sources $ $ $ $

Total Additions - 1,020 - 16,000

DEDUCTIONS:

1,000 969 500 14,000 Other Operating Costs

Total Deductions 969 1,000 500 14,000

Change in Net Position (969)

5,334

20 (500) 2,000

1,460 5,626 - Total Net Position - September 1 (Beginning)

Total Net Position - August 31 (Ending) $ 4,365 $ 1,480 $ 5,126 $ 2,000

60

EXHIBIT H-5

Scholarship Scholarship

Garcia

Scholarship

Jones

Oran

Scholarship

Chacon Private

Purpose

Trust Funds

820 821 822 823 Total

Emerald

91 - 60 475 17,646 $ $ $ $ $

- 91 60 475 17,646

2,074 2,675 300 3,277 24,795

2,675 2,074 300 3,277 24,795

(2,675) (1,983) (240) (2,802) (7,149)

3,350 1,983 278 2,802 20,833

$ 675 $ - $ 38 $ - $ 13,684

61


62

OTHER INFORMATION - REQUIRED TEA SCHEDULES

63


SCHEDULE OF DELINQUENT TAXES RECEIVABLE

FISCAL YEAR ENDED AUGUST 31, 2014

Last 10 Years Ended

August 31

Tax Rates

Debt ServiceMaintenance Tax Purposes

Value for School

Assessed/Appraised

(1) (2) (3)

VariousVariousand prior years2005 $ Various

0.0000001.480000 41,678,851 2006

0.0000001.480000 44,296,387 2007

0.0000001.352300 47,407,501 2008

0.0000001.267000 52,790,889 2009

0.0000001.026700 54,909,880 2010

0.0000001.026700 55,776,613 2011

0.0000001.026700 57,908,681 2012

0.0000001.026700 57,850,630 2013

0.0000001.040100 58,080,147 (School year under audit)2014

1000 TOTALS

64

EXHIBIT J-1

9/1/2013

Balance

Beginning

Total Levy

Year's

Current

(20)(10) (50)

Ending

Balance

8/31/2014

(40)

Entire

Year's

Adjustments

(31)

Maintenance

Collections

(32)

Debt Service

Collections

- 341,791 16,099 (48,498)$ $ $ $ $ 277,194 $ -

- 40,487 1,758 (906) 37,822 -

- 50,568 1,481 (1,233) 47,854 -

- 46,352 1,700 (801) 43,851 -

- 54,460 1,966 (837) 51,658 -

- 62,528 2,567 (725) 59,237 -

- 70,254 3,679 (552) 66,023 -

- 75,851 6,200 (535) 69,116 -

- 97,103 21,514 (448) 75,140 -

610,383 - 530,560 - 79,823 -

$ 807,718 $ (54,535)$ 587,524 $ 610,383 $ 839,394 $ -

65

EXHIBIT J-2DELL CITY INDEPENDENT SCHOOL DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL - CHILD NUTRITION PROGRAM


Control

Data

CodesOriginal Final

(GAAP BASIS)

(Negative)

Positive or

Final BudgetVariance WithActual Amounts

Budgeted Amounts

REVENUES:3,000 3,000 2,637 (363)Total Local and Intermediate Sources $ $ $ $5700

2,188 2,188 2,170 (18)State Program Revenues5800

46,090 46,090 39,562 (6,528)Federal Program Revenues5900

Total Revenues5020 51,278 51,278 44,369 (6,909)

EXPENDITURES:

Current:51,278 69,800 59,395 (8,117)Food Services0035

- - 2,895 (2,895)Facilities Maintenance and Operations0051

Total Expenditures6030 69,800 51,278 62,290 (11,012)

1100 Excess (Deficiency) of Revenues Over (Under) Expenditures

(18,522) - (17,921) (17,921)

OTHER FINANCING SOURCES (USES): - 18,522 - - Transfers In7915

1200 Net Change in Fund Balances - - (17,921) (17,921)

0100 Fund Balance - September 1 (Beginning) 4,097 4,097 4,097 -

3000 Fund Balance - August 31 (Ending) $ 4,097 $ 4,097 $ (13,824) $ (17,921)

66

COMPLIANCE SECTION

67


68

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Dell City Independent School District’s financialstatements are free from material misstatement, we performed tests of its compliance with certain provisionsof laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct andmaterial effect on the determination of financial statement amounts. However, providing an opinion oncompliance with those provisions was not an objective of our audit, and accordingly, we do not express suchan opinion. The results of our tests disclosed instances on noncompliance or other matters that are requiredto be reported under Government Auditing Standards and which are described in the accompanying scheduleof findings and responses as items (2014-004).

Dell City Independent School District’s response to the findings identified in our audit is described in theaccompanying schedule of findings and questioned costs. Dell City Independent School District’s responsewas not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly,we express no opinion on it.

Dell City Independent School Districts’ Response to Findings

Dell City Independent School District’s response to the findings identified in our audit is described in theaccompanying schedule of findings and responses. Dell City Independent School District’s response was notsubjected to the auditing procedures applied in the audit of the financial statements and, accordingly, weexpress no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance andthe results of that testing, and not to provide an opinion on the effectiveness of the District’s internal controlor on compliance. This report is an integral part of an audit performed in accordance with GovernmentAuditing Standards in considering the entity’s internal control and compliance. Accordingly, thiscommunication is not suitable for any other purpose.

Gibson, Ruddock, Patterson LLCEl Paso, TexasDecember 22, 2014

70


SCHEDULE OF FINDINGS AND RESPONSES


SUMMARY OF AUDITOR’S RESULTS

FINANCIAL STATEMENTS

Internal control over financial reporting:

Material weaknesses identified? No

Significant deficiencies identified that are not considered to bematerial weaknesses?

Yes

Noncompliance material to the financial statements:

Yes

(Continued)

71




FINANCIAL STATEMENT FINDINGS

2014-001 - Internal Controls Over Financial Reporting and Inadequate Documentation

Criteria: The District is required to maintain internal controls over financial reporting to provide a highlevel of assurance that the financial records are recorded properly, and that related financial reports arepresented properly.

Condition Found: Payroll documentation to evidence approval of the positions could not be located andwas subsequently recreated upon our review. In addition, service records were not updated to properlyreflect the years of service. Also, there was no documentation to support how payroll charges wereallocated to different programs.

Effect: The lack of maintaining adequate documentation and lack of internal controls increases the riskof misappropriation of assets and potential misreporting of financial statement amounts due to error orfraud.

Cause: The District does not have an adequate filing system in place. There has also been significantturnover in key personnel and limited oversight over payroll. It appears the District did not haveprocedures in place that required the review of the overall internal control structure on a continuing basis.

Recommendation: We recommend Management review personnel files and ensure service records areproperly updated. In addition, management should maintain adequate documentation to support allapproval of payroll transactions.

2014-002 - Internal Controls Over Financial Reporting - Capital Assets

Criteria: The District is required to maintain internal controls over financial reporting to provide a highlevel of assurance that the financial records are recorded properly, and that related financial reports arepresented properly.

Condition Found: 1) A physical inventory of capital assets has not been conducted. 2) A listing of currentyear additions was not maintained during the year and as a result capital assets were not properly recorded.3) A building that has not been used in over 10 years was still being depreciated. The amount incorrectlydepreciated was immaterial to the financial statements as a whole.

Cause: Procedures over capital assets, including procedures related to the financial closing and reportingprocess, are not documented.

Effect: Although the District does not have many capital assets, the lack of defined procedures over capitalassets could potentially result in material misstatement in future financial statements as well asmisappropriation of assets.

Recommendation: We recommend Management conduct a complete inventory of capital assets and updatethe capital asset listing on a regular basis to ensure that the data is correct and properly reported.

Management Response: See Corrective Action Plan

(Continued)

72




FINANCIAL STATEMENT FINDINGS - (Continued)

2014-003 - Internal Controls over Financial Reporting - Coding

Criteria: The District is required to code expenditures in accordance with the guidelines prescribed bythe Financial Accountability System Resource Guide (FASRG).

Condition Found: There were numerous instances in which expenditures were not coded to the properfunction, object code and program intent code. These expenditures were subsequently reclassified tothe appropriate accounts.

Cause: The District relied on outside consultants to review and code expenditures in accordance withthe FASRG. It appears that the consultants did not fully understand the guidance.

Effect: This resulted in budget overages after expenditures were reclassified to the proper function. Improper coding could also lead to incorrect data being submitted in PEIMS.

Recommendation: It is the Districts responsibility to ensure compliance with all state requirements. Although outside consultants can be used to review and code transactions, we recommend members ofmanagement obtain coding training in order to ensure transactions are properly recorded.


2014-004 - Public Funds Investment Act

Criteria: The District is required to comply with the Public Funds Investment Act, Government Code2256

Condition Found: The Board of Trustee did not designate by rule, order, ordinance or resolution aninvestment officer. In addition, qualified brokers were not properly approved nor did theyacknowledge receipt of the District investment policies. Also, quarterly investment reports were notpresented to the Board of Trustees.

Cause: The District has experienced turnover in key positions. It appears the District was not aware ofthe extensive requirements of the Public Funds Investment Act.

Effect: The District is not in compliance with the Public Funds Investment Act.

Recommendation: We recommend the District designate an individual as investment officer andprovide training in order to ensure compliance with the Public Funds Investment Act.


(Continued)

73




FINANCIAL STATEMENT FINDINGS - (Continued)

2014-005 - Internal Control over Financial Reporting

Criteria: Government Auditing Standards requires that a significant deficiency in internal controls bereported when an entity does not have the ability to prepare its own annual report in accordance withGAAP be reported.

Condition Found: Like other entities with limited resources in the Business Office, the District relieson the external auditor to prepare the annual financial report.

Cause: The minimize the cost to the taxpayers, the District has elected to keep administrative costs aslow as is feasible for normal operations.

Effect: The Government Auditing Standards Board believes that this situation could result in a strongerpossibility that misstatements in the financial statements may not be prevented or detected in a timelymanner.

Recommendation: None


74


SCHEDULE OF STATUS OF PRIOR FINDINGS



There were no prior year findings.

75


CORRECTIVE ACTION PLAN



2013-001 - Financial Reporting - Internal Controls over Financial Reporting and Inadequate Documentation

Corrective Action Plan: We will develop an adequate filing system to ensure compliance with allrequirements. In addition, we are in the process of reviewing all personnel files to ensure employees are paidthe correct number of years of service and will document how payroll charges are allocated between thedifferent programs.

Responsible Party: Superintendent

Anticipated Completion Date: Immediately and on going

2013-002 - Financial Reporting - Internal Controls over Financial Reporting - Capital Assets

Corrective Action Plan: We will conduct an inventory of all capital assets and maintain a listing of allcurrent year additions so that the depreciation schedule is current and accurate.


Anticipated Completion Date: Immediately

2013-003 - Financial Reporting - Coding

Corrective Action Plan: We will attend specific training on coding to ensure transactions are properlycoded. We will also review transactions closely to ensure coding is appropriate.



76


CORRECTIVE ACTION PLAN


FINANCIAL STATEMENT FINDINGS (Continued)

2013-004 - Public Funds Investment Act

Corrective Action Plan: We will attend investment training so that we have a complete understanding ofthe requirements. We will ask the Board do designate an investment office who will be responsible forensuring compliance with the requirements.



2013-005 - Internal Controls Over Financial Reporting

Corrective Action Plan: The District will continue to monitor the needs of the District and determine ifadditional staff is needed.


Anticipated Completion Date: Immediately and ongoing

77

SCHOOLS FIRST QUESTIONNAIRE

Dell City Independent School Distrcit Fiscal Year 2014

Were there any disclosures in the Annual Financial Report and/or other sources of information concerning default on bonded indebtedness obligations?

NoSF2

Did the district receive a clean audit? - Was there an unqualified opinion in the Annual Financial Report?

YesSF4

Did the Annual Financial Report disclose any instances of material weaknesses in internal controls?

NoSF5

Was there any disclosure in the Annual Financial Report of material noncompliance? YesSF9

Total accumulated accretion on capital appreciation bonds included in government-wide financial statements at fiscal year end.

0SF10

Documents

DELL CITY INDEPENDENT SCHOOL DISTRICT ANNUAL …dellcity.schoolwires.com/cms/lib6/TX01000663/Centricity/Domain/31/2013-2014 Final Audit...DELL CITY INDEPENDENT SCHOOL DISTRICT ANNUAL