Weslaco Independent School Districtsmall_file).pdf · Weslaco Independent School District . August...

Weslaco Independent School District

August 31, 2014

Board of Trustees

David L. Fuentes President Erasmo López Vice-President Óscar Caballero Secretary

Adrián González Trustee Andrew González Trustee Isidoro Nieto Trustee Dr. Richard Rivera Trustee

Administration

Dr. Rubén Alejandro Superintendent

WESLACO INDEPENDENT SCHOOL DISTRICT

ANNUAL FINANCIAL REPORT FOR THE

YEAR ENDED AUGUST 31, 2014

EXHIBIT Page

CERTIFICATE OF BOARD 1Independent Auditors' Report 2,3Management's Discussion and Analysis 4-10

BASIC FINANCIAL STATEMENTS

Government Wide Statements:A-1 Statement of Net Position 11B-1 Statement of Activities 12

Government Fund Financial Statements:C-1 Balance Sheet 13C-2 Reconciliation for C-1 14C-3 Statement of Revenues, Expenditures, and Changes in Fund Balance 15C-4 Reconciliation for C-3 16C-5 Budgetary Comparison Schedule - General Fund 17

Proprietary Fund Financial Statements:D-1 Statement of Net Position 18D-2 Statement of Revenues, Expenses, and Changes in Fund Net Position 19D-3 Statement of Cash Flows 20

Fiduciary Fund Financial Statements:E-1 Statement of Fiduciary Net Position 21

Notes to Financial Statements 22-43

Combining Schedules

Nonmajor Governmental Funds:H-1 Combining Balance Sheet 44-49H-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 50-54

WESLACO INDEPENDENT SCHOOL DISTRICTANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED AUGUST 31, 2014

TABLE OF CONTENTS

TABLE OF CONTENTS (CONTINUED)

EXHIBIT Page

Required TEA Schedules

J-1 Schedule of Delinquent Taxes 55-56J-2 Budgetary Comparison Schedule - Child Nutrition Fund 57J-3 Budgetary Comparison Schedule - Debt Service Fund 58

Federal Awards Section

Report on Compliance and Internal Control Over Financial Reporting Based on an auditof Financial Statements Performed in Accordance with Government Auditing Standards 59,60

Report on Compliance with Requirements Applicable to Each Major Program and InternalControl over Compliance in Accordance with OMB Circular A-133 61,62

Schedule of Findings and Questioned Costs 63,64

Schedule of Status of Prior Findings 65

K-1 Schedule of Expenditures of Federal Awards 66,67

K-2 Schedule of Required Responses to Selected School First Indicators 68

Notes of Schedule of Expenditures of Federal Awards 69

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CERTIFICATE OF BOARD

Weslaco Independent School District Hidalgo 108-913

Name of School District County Co-District Number We, the undersigned, certify that the attached annual financial reports of the above-named school district were reviewed and (check one) ____ approved ____ disapproved for the year ended August 31, 2014, at a meeting of the Board of Trustees of such school district on the 8th day of December, 2014. ____________________________ ____________________________ Signature of Board Secretary Signature of Board President If the Board of Trustees disapproved of the auditors’ report, the reason(s) for disapproving it is (are): (attach list as necessary)

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MANAGEMENT’S DISCUSSION AND ANALYSIS

In this section of the Annual Financial and Compliance Report, we, the managers of Weslaco ISD, discuss and analyze the District’s financial performance for the fiscal year ended August 31, 2014. Please read it in conjunction with the Independent Auditor’s Report on page 2, and the District’s Basic Financial Statements which begin on page 11.

FINANCIAL HIGHLIGHTS

The District’s net position at August 31, 2014 was $ 116,614,509, an decrease of $ 93,078 as a result of this year’s operations.

During the year, the District had expenditures that were $ 2,600,987 more than the $ 174,646,259 generated in taxes, state funds, and other revenues for governmental programs. This compares to last year when revenues exceeded expenditures by $ 3,446,724.

Total cost of all of the District’s programs increased by $ 9.3 million, due to an increase in construction costs and salaries.

The General Fund ended the year with a fund balance of $ 34,308,222, representing an increase of $2,966,611 from last year.

The resources available for appropriation were $ 500,092 more than budgeted for the General Fund and $10,760,190 more than actual expenditures for the year.

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 11 and 12. These provide information about the activities of the District as a whole and present a longer-term view of the District's property and debt obligations 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 13, report the District's operations in more detail than the government-wide statements by providing information about the District's most significant funds. For governmental activities, these statements 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. For proprietary activities, fund financial statements tell how goods or services of the District were sold to departments within the District or to external customers and how the sales revenues covered the expenses of the goods or services. 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 22 provide narrative explanations or additional data needed for full disclosure in the government-wide statements or the fund financial statements.

The combining statements 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.

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Reporting the District as a Whole

The Statement of Net Position and the Statement of Activities

The analysis of the District's overall financial condition and operations begins on page 11. 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 includes all the District's assets and liabilities at the end of the year while the Statement of Activities 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), and revenues provided by the taxpayers or by TEA in equalization funding processes (general 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 or decreases in the District’s net position 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 Position and the Statement of Activities, the District reports one kind of activity:

Governmental activities-Most of the District's basic services are reported here, including instruction, staff development, instructional leadership, school leadership, counseling, co-curricular activities, food services, transportation, maintenance, debt service, 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 13 and provide detailed information about the most significant funds-not the District as a whole. Laws and contracts require the District to establish some funds, such as grants received under the No Child Left Behind Act from the U.S. Department of Education. The District's administration establishes many other funds to help it control and manage money for particular purposes (like campus activities). The District's two kinds of funds-governmental and proprietary-use different accounting approaches.

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WESLACO INDEPENDENT SCHOOL DISTRICT NET POSITION

TABLE I Government Government Activities Activities 2014 2013 Current and Other Assets $ 79,429,824 $ 67,445,663 Capital Assets 136,946,030 137,767,281 TOTAL ASSETS $ 216,375,854 $ 205,212,944 Deferred charge on Refunding $ 724,368 $ 790,219

TOTAL DEFERRED OUTFLOWS OF RESOURCES $ 724,368 $ 790,219 Long Term Liabilities

80,043,076

71,575,848

Other Liabilities 20,442,636 18,858,003

TOTAL LIABILITIES $ 100,485,713 $ 90,433,851 Net Position: Invested in capital assets $ 57,955,030 $ 67,109,281 net of related debt Restricted 17,964,766 9,567,330 Unrestricted 40,694,713 38,892,701 TOTAL NET POSITION $ 116,614,509 $ 115,569,312

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WESLACO INDEPENDENT SCHOOL DISTRICT CHANGES IN NET POSITION

TABLE II Governmental Governmental Activities Activities 2014 2013 REVENUES: Program Revenues: Charges for Services $ 3,744,671 $ 3,952,717 Operating grants and 36,330,426 38,414,155 contributions General Revenues: Maintenance and Operating Taxes 21,618,492 21,932,794 Debt Service Taxes 34,993 59,893 State-aid Formula grants & Other 114,534,319 109,184,686 Grants and Contributions Investment Earnings 70,414 96,168 Miscellaneous 20,741 21,897

TOTAL REVENUES $ 176,354,055 $ 173,662,310 EXPENSES: Instruction, Curriculum, and Media Services $ 95,728,414 $ 91,949,897 Instruction, & School Leadership 6,637,961 6,615,588 Student Support Services 13,174,914 13,197,665 Child Nutrition 11,065,882 11,100,321 Co-Curricular Activities 7,063,184 6,975,634 General Administration 17,115,853 16,482,896 Plant Maintenance, Security & Data Processing 19,662,681 19,342,249 Community Services 2,181,705 2,099,332 Debt Services 3,377,883 3,399,527 Other Activities 438,658 393,567

TOTAL EXPENSES $ 176,447,134 $ 171,556,677 Increase in Net Position before ( 93,078) 2,105,633 transfers and special items Beginning Net Position 115,569,312 114,228,902 Prior Period Adjustments 1,138,275 ( 765,223) Ending Net Position $ 116,614,509 $ 115,569,312

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Governmental funds-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 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 Position and the Statement of Activities) and governmental funds in reconciliation schedules following each of the Fund Financial statements. The District adopted Government Accounting Standards Board Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions which establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Those fund balance classifications are described below.

Nonspendable – Amounts that cannot be spent because they are either not in a spendable form or are legally or contractually required to be maintained intact. Restricted – Amounts that can be spent only for specific purposes because of constraints imposed by external providers, or imposed by constitutional provisions or enabling legislation. Committed – Amounts that can be only be used for specific purposes pursuant to approval by formal action by the Board. Assigned - For the General Fund, amounts that are appropriated by the Board or a Board designee that are to be used for specific purposes. For all other governmental funds, any remaining positive amounts not previously classified as nonspendable, restricted or committed. Unassigned – Amounts that are available for any purpose; these amounts can be reported only in the District’s General Fund.

Proprietary funds-The District reports the activities for which it charges users (whether outside customers or other units of the District) in proprietary funds using the same accounting methods employed in the Statement of Net Position and the Statement of Activities. In fact, the District's enterprise funds (one category of proprietary funds) are the business-type activities reported in the government-wide statements but containing more detail and additional information, such as cash flows. The internal service funds (the other category of proprietary funds) report activities that provide supplies and services for the District's other programs and activities-such as the District's self-insurance programs, the print shop, and transportation. The District as Trustee Reporting the District's Fiduciary Responsibilities The District is the trustee, or fiduciary, for monies held on behalf of third parties. All of the District's fiduciary activities are reported in separate Statements of Fiduciary Net Position on page 21. We exclude these resources from the District's other financial statements 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.

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GOVERNMENT-WIDE FINANCIAL ANALYSIS The District has implemented GASB Statement #34. Our analysis focuses on the net position (Table I) and changes in net position Table II) of the District's governmental and business-type activities. Net position of the District's governmental activities increased from $ 115,569,312 to $ 116,614,509. 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 was $40,694,713. In 2014, fund balance of our government-type activities increased by $ 10,131,754 or 28.5 percent. This increase is mostly due to the Public Property Note, Series 2014. The District's total revenues increased by 1.9 percent or $3.2 million. The total cost of all programs and services was higher than last year ($9.3 million) due to increases in construction costs and salaries. The cost of all governmental activities this year was $ 176.4 million compared to $ 171.6 million last year. However, as shown in the Statement of Activities on page 12, the amount that our taxpayers ultimately financed for these activities through District taxes was only $ 21.6 million because some of the costs were paid by those who directly benefited from the programs or by other governments and organizations that subsidized certain programs with grants and contributions or by State equalization funding.

THE DISTRICT'S FUNDS As the District completed the year, its governmental funds as presented in the balance sheet on page 13 reported a combined fund balance of $ 46.8 million, which last year's was total of $ 36.6 million. Included in this year's total change in fund balance was an increase of $ 3.0 million in the District's General Fund. Capital expenditures reduce available fund balances; however, they create new assets for the District as reported in the Statement of Net Position and as discussed in the notes to the financial statements. Over the course of the year, the Board of Trustees revised the District's budget several times. These budget amendments fall into two categories. The first category involved amendments moving funds from programs that did not need all the resources originally appropriated to them to programs with resource needs. The second category involves budgeting for additional state foundation revenues. The District's General Fund balance of $ 34.3 million reported on page 15 differs from the General Fund's budgetary fund balance of $ 23.7 million reported in the budgetary comparison schedule on page 17. This is principally due to cost savings by the District during the year. CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

At the end of 2014, the District had $ 270.5 million invested in a broad range of capital assets, including facilities and equipment for instruction, transportation, athletics, administration, and maintenance. This amount represents an increase of just over $ 7.2 million, or 2.7 percent, from last year.

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This year's major additions include: Furniture and Equipment $ 677,255 Energy Conservation Project-District Wide 5,686,106 Roofing-Weslaco High, Warehouse, Margo, and Roosevelt 1,168,777 TOTAL $ 7,532,138

More detailed information about the District's capital assets is presented in Notes to the Financial Statements, Note F, Capital Asset Activity. See page 35 and page 36. DEBT

At year-end, the District had $ 79.0 million in bonds and notes outstanding versus $ 70.7 million last year an increase of 11.8 percent. The District's general obligation bond rating has been the highest possible in 2014, according to national rating agencies.

Other obligations include accrued vacation pay and sick leave. More detailed information about the District's long-term liabilities is presented in Notes to the Financial Statements, Note G, Bonds Payable and Contractual Obligations.

NEXT YEAR'S BUDGETS AND RATES The District's elected and appointed officials considered many factors when setting the fiscal year 2015 budget and tax rates. These indicators were taken into account when adopting the General Fund budget for 2015. Amounts available for appropriation in the General Fund budget are $ 159.5 million, with an increase of 1.7% over the final 2014 budget of $ 156.8 million. State per capita payments and Food Service revenues account for all of the revenue increase. The District will use its revenues to finance programs we currently offer. Budgeted expenditures are expected to rise nearly 2.2 percent to $ 156.1 million from $ 152.8 million original budget in 2014. Additional teachers, pay increases, food service cost, utilities, maintenance and operations, and TRS On Behalf expenditures cover most of the increases. The District has added no new major programs or initiatives to the 2015 budget. If these estimates are realized, the District's budgetary General Fund fund balance is expected to decrease by 5.2 million by the close of 2015. 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 WESLACO ISD, 312 West Fifth Street, Weslaco, Texas.

EXHIBIT A-1

Primary Government

Data

Control Governmental

Codes Activities

ASSETS

1110 Cash and Cash Equivalents 66,269,463$

1220 Property Taxes Receivable (Delinquent) 4,704,222

1230 Allowance for Uncollectible Taxes (359,672)

1240 Due from Other Governments 5,497,320

1290 Other Receivables 422,597

1300 Inventories - supplies and materials 1,077,448

1410 Prepayments 1,760,386

1420 Capital Bond & Other Debt Issuance Costs 58,061

1510 Land and Land Improvements, net 10,527,132

1520 Buildings, net 115,734,696

1530 Furniture and Equipment, net 2,912,890

1580 Construction in Progress 7,771,312

1000 TOTAL ASSETS 216,375,854$

DEFERRED OUTFLOWS OF RESOURCES

1997 Deferred charge on Refunding 724,368

1500 TOTAL DEFERRED OUTFLOWS OF RESOURCES 724,368$

LIABILITIES

2110 Accounts Payable 6,160,150

2140 Interest Payable 270,019

2150 Payroll Deductions & Withholdings 1,053,205

2160 Accrued Wages Payable 4,280,625

2180 Due to Other Governments 4,328,937

2300 Unearned Revenues 4,349,699

2501 Current Bonds Payable 5,415,000

2502 Long Term Bonds Payable 73,576,000

2516 Premium & Discount on Issuance of Bonds 317,746

2530 Other Long Term Debt Payable 734,330

2000 TOTAL LIABILITIES 100,485,713$

NET POSITION

3200 Invested in capital assets, net of related debt 57,955,030

Restricted for:

3820 Federal and state programs 5,472,688

3850 Debt service 1,544,846

3860 Capital projects 10,691,736

3870 Campus activities 245,912

3880 Scholarships 9,584

3900 Unrestricted 40,694,713

3000 TOTAL NET POSITION 116,614,509$

The accompanying notes are an integral part of this statement


STATEMENT OF NET POSITION

AUGUST 31, 2014

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EXHIBIT B-1

Net (Expenses)

Revenue &

Changes in Net

Assets

1 3 4 6

Data Operating

Control Charges for Grants and Governmental

Codes Expenses Services Contributions Activities

GOVERNMENTAL ACTIVITIES:

11 Instruction 86,818,655$ 209,036$ 13,435,283$ (73,174,335)$

12 Instruction Resources & Media Services 3,138,683 3,375 1,199,479 (1,935,830)

13 Curriculum & Staff Development 5,771,075 288 2,811,240 (2,959,547)

21 Instructional Leadership 1,741,556 - 716,671 (1,024,885)

23 School Leadership 4,896,405 - 337,264 (4,559,140)

31 Guidance, Counseling & Evaluation Services 5,873,335 - 1,718,481 (4,154,854)

32 Social Work Services 1,590,345 - 883,454 (706,891)

33 Health Services 1,833,597 - 787,941 (1,045,656)

34 Student (Pupil) Transportation 3,877,637 20 875,794 (3,001,823)

35 Food Services 11,065,882 697,330 10,680,279 311,727

36 Co-curricular/Extracurricular Activities 7,063,184 677,440 149,969 (6,235,776)

41 General Administration 17,115,853 1,891,137 512,582 (14,712,134)

51 Plant Maintenance & Operations 15,587,518 93,702 1,030,353 (14,463,463)

52 Security & Monitoring Services 2,058,835 - 89,280 (1,969,555)

53 Data Processing Services 2,016,328 - 71,493 (1,944,836)

61 Community Services 2,181,705 172,343 1,030,863 (978,499)

72 Debt Service - Interest on Long Term Debt 3,118,302 - - (3,118,302)

73 Debt Service - Bond Issuance Cost & Fees 259,581 - - (259,581)

95 Payments to Juvenile Justice Alternative Ed. Prog. 242,000 - - (242,000)

99 Other Intergovernmental Charges 196,658 - - (196,658)

[TG] Total Government Activities: 176,447,134$ 3,744,671$ 36,330,426$ (136,372,037)$

[TP] TOTAL PRIMARY GOVERNMENT: 176,447,134$ 3,744,671$ 36,330,426$ (136,372,037)$

Data

Control General Revenues

Codes Taxes

MT Property Taxes Levied for General Purposes 21,618,492$

DT Property Taxes Levied for Debt Service 34,993

GC Grants & Contributions not Restricted 114,534,319

IE Investment Earnings 70,414

MI Miscellaneous Local and Intermediate Revenue 20,741

TR Total General Revenues 136,278,958$

CN Change in Net Position (93,078)$

NB Net Position - Beginning 115,569,312

PA Prior Period Adjustment 1,138,275

NE Net Position - Ending 116,614,509$

The accompanying notes are an integral part of this statement.

Program Revenues


STATEMENT OF ACTIVITIES


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EXHIBIT C-1

Data 10

Control Debt 2014 Energy Total

Codes General Service Conservation Other Governmental

Fund Fund Fund Funds Funds

ASSETS

1110 Cash and Cash Equivalents $ 36,432,593 $ 5,743,912 $ 10,398,117 $ 5,245,452 $ 57,820,075

1220 Property Taxes - Delinquent 4,487,621 216,601 - - 4,704,222

1230 Allowance for Uncollectible Taxes (Credit) (343,013) (16,659) - - (359,672)

1240 Due from Other Governments 4,179,874 1,420 - 1,316,025 5,497,320

1260 Due from Other Funds 965,655 - - - 965,655

1290 Other Receivables 369,283 - - 325 369,608

1300 Inventories 1,077,448 - - - 1,077,448

1410 Deferred Expenditures 1,760,386 - - - 1,760,386

1000 Total Assets $ 48,929,847 $ 5,945,273 $ 10,398,117 $ 6,561,803 $ 71,835,041

LIABILITIES

Liabilities:

2110 Accounts Payable $ 2,048,252 $ - $ 3,218,144 $ 637,150 $ 5,903,546

2150 Payroll Deductions & Withholdings Payable 1,053,205 - - - 1,053,205

2160 Accrued Wages Payable 3,945,642 - - 334,983 4,280,625

2170 Due to Other Funds - - - 965,655 965,655

2180 Due to Other Governments 7,662 4,245,611 - 75,664 4,328,937

2300 Unearned Revenues 3,422,256 - - 770,425 4,192,680

2000 Total Liabilities 10,477,017 4,245,611 3,218,144 2,783,877 20,724,649

DEFERRED INFLOWS OF RESOURCES

2601 Unavailable Revenue - Property Taxes 4,144,608 199,942 - - 4,344,550

2500 Total Deferred Inflows of Resources 4,144,608 199,942 - - 4,344,550

Fund Balances:

3410 Nonspendable Inventories $ 938,278 $ - $ - $ - $ 938,278

3430 Nonspendable Prepaid Items 1,760,386 - - - 1,760,386

3450 Restricted for Grant Restrictions 4,494,889 - - 10,668 4,505,557

3470 Restricted for Capital Acquisitions - - 7,179,974 3,511,762 10,691,736

3480 Restricted for Retirement of Debt - 1,499,721 - - 1,499,721

3490 Other Restrictions of Fund Balance - - - - -

3545 Other Committed Fund Balances - - - 245,912 245,912

3590 Other Assigned Fund Balance 11,114,670 - - 9,584 11,124,254

3600 Undesignated/Unassigned Fund Balance 16,000,000 - - - 16,000,000

Total Fund Equity $ 34,308,222 $ 1,499,721 $ 7,179,974 3,777,926 46,765,842

4000 Total Liabilities, Deferred Inflows

& Fund Balances $ 48,929,847 $ 5,945,273 $ 10,398,117 6,561,803 $ 71,835,041



BALANCE SHEET

GOVERNMENTAL FUNDS

AUGUST 31, 2014

13

EXHIBIT C-2

Total Fund Balance - Governmental Funds 46,765,842$

8,146,815

self-insurance and printing, to appropriate functions in other funds. The assets and

liabilities of the internal service funds are included in governmental activities in the statement

of position. The net effect of this consolidation is to increase (decrease) net position.

Capital Assets used in governmental activities are not financial resources and therefore are 67,109,281

not reported in governmental funds. At the beginning of the year, the cost of these assets

was $ 263,314,369 and the accumulated depreciation was $125,527,088. In addition, long-term

liabilities, including bonds payable, are not due and payable in the current period, and therefore

are not reported as liabilities in the funds. The net effect of including the beginning balances for

capital assets (net of depreciation) and long-term debt in the governmental activities is to increase

(decrease) net position.

Current year capital outlays and long-term debt principal payments are expenditures in the fund 12,230,182

financial statement, but they should be shown as increases in capital assets and reductions in

long-term debt in the government-wide financial statements. The net effect of including the 2014

capital outlays and debt principal payments is to increase (decrease) net position.

The 2014 depreciation expense increases accumulated depreciation. The net effect of the current (8,672,433)

year's depreciation is to decrease net position.

Various other reclassifications and eliminations are necessary to convert from the modified accrual (8,965,178)

basis of accounting to accrual basis of accounting. These include recognizing deferred revenue as

revenue, eliminating interfund transactions, reclassifying the proceeds of bond sales as an increase

in bonds payable, and recognizing the liabilities associated with maturing long-term debt and

interest. The net effect of these reclassifications and recognitions is to increase (decrease)

net position.

Net Position of Governmental Activities 116,614,509$


The District uses internal service funds to charge the costs of certain activities, such as


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE



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EXHIBIT C-3

Data 10 Debt 2014 Energy Total

Control General Service Conservation Other Governmental

Codes Fund Fund Fund Funds Funds

REVENUES:

5700 Local and Intermediate Sources 23,315,439$ 94,979$ 3,760$ 379,616$ 23,793,794$

5800 State Program Revenues 121,222,647 90,976 - 1,015,243 122,328,866

5900 Federal Program Revenues 12,793,058 - - 15,730,541 28,523,599

157,331,144$ 185,955$ 3,760$ 17,125,400$ 174,646,259$

EXPENDITURES:

Current

0011 Instruction 79,497,381$ -$ -$ 8,568,199$ 88,065,580$

0012 Instruction Resources & Media Services 2,222,174 - - 1,061,718 3,283,892

0013 Curriculum & Staff Development 3,241,229 - - 2,558,531 5,799,760

0021 Instructional Leadership 1,201,771 - - 635,377 1,837,148

0023 School Leadership 4,956,858 - - 112,646 5,069,504

0031 Guidance, Counseling & Evaluation Services 4,632,063 - - 1,429,712 6,061,775

0032 Social Work Services 846,948 - - 812,242 1,659,190

0033 Health Services 1,211,498 - - 699,446 1,910,944

0034 Student (Pupil) Transportation 3,867,999 - - 42,792 3,910,791

0035 Food Services 11,379,208 - - - 11,379,208

0036 Co-curricular/Extracurricular Activities 5,845,385 - - 256,676 6,102,061

0041 General Administration 4,059,382 - - - 4,059,382

0051 Plant Maintenance & Operations 16,273,065 - - 45,911 16,318,976

0052 Security & Monitoring Services 2,214,949 - - 6,209 2,221,159

0053 Data Processing Services 2,027,859 - - - 2,027,859

0061 Community Services 1,185,921 - - 974,966 2,160,887

Debt Service:

0071 Debt Service - Principal on Long Term Debt 1,064,000 3,315,000 - - 4,379,000

0072 Debt Service - Interest on Long Term Debt 212,214 2,981,603 - - 3,193,816

0073 Debt Service - Bond Issuance Cost & Fees 192,392 1,338 - - 193,729

Capital Outlay

0081 Facilities Acquisitions and Construction - - 5,686,106 1,487,820 7,173,927

Intergovernmental:

0095 Payments to Juvenile Justice Alternative Ed. Prog. 242,000 - - - 242,000

0099 Other Intergovernmental Charges 196,658 - - - 196,658

6030 146,570,954$ 6,297,940$ 5,686,106$ 18,692,246$ 177,247,245$

1100 Excess (Deficiency) of Revenues Over (Under) 10,760,190$ (6,111,985)$ (5,682,346)$ (1,566,845)$ (2,600,987)$

Expenditures

OTHER FINANCING SOURCES (USES)

7912 Sale of Real and Personal Property 20,741 - - - 20,741

7914 Loan Proceeds-Governmental Fund 12,712,000 - - - 12,712,000

7915 Transfers In - 6,200,000 12,862,320 1,464,000 20,526,320

8911 Transfers Out (Uses) (20,526,320) - - - (20,526,320)

7080 (7,793,579)$ 6,200,000$ 12,862,320$ 1,464,000$ 12,732,741$

1200 Net Change in Fund Balances 2,966,611$ 88,015$ 7,179,974$ (102,845)$ 10,131,754$

0100 Fund Balance - September 1 (Beginning) 31,341,611 273,431 - 3,880,771 35,495,813

1300 Prior Period Adjustment - 1,138,275 - - 1,138,275

3000 Fund Balance - August 31 (Ending) 34,308,222$ 1,499,721$ 7,179,974$ 3,777,926$ 46,765,842$



Total Other Financing Sources (Uses)

Total Expenditures

Total Revenues

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

GOVERNMENTAL FUNDS


15

EXHIBIT C-4

Total Net Change in Fund Balance - Governmental Funds 10,131,754$

The District uses internal service funds to charge the costs of certain activities, such (565,160)

self-insurance and printing, to appropriate functions in other funds. The net income

(loss) of internal service funds are reported with governmental activities. The net

effect of this consolidation is to increase (decrease) net position.

Current year capital outlays and long-term principal payments are expenditures in 12,230,182

the fund financial statements, but they should be shown as increases in capital

assets and reductions in long-term debt in the government-wide financial statements.

The net effect of removing the 2014 capital outlays and debt principal payments is to

increase (decrease) net position.

Depreciation is not recognized as an expense in governmental funds since it does not (8,672,433)

require the use of current financial resources. The net effect of the current year's

depreciation is to decrease net position.

Various other reclassifications and eliminations are necessary to convert from the (13,217,421)

modified accrual basis of accounting to accrual basis of accounting. These include

recognizing unavailable revenue from taxes as revenue, adjusting current year revenue to

show the revenue earned from the current year's tax levy, eliminating interfund transactions,

reclassifying the proceeds of bond sales, and recognizing the liabilities associated with

maturing long-term debt and interest. The net effect of these reclassifications and

recognitions is to increase (decrease) net position.

Change in Net Position of Governmental Activities (93,078)$



RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES


16

EXHIBIT C-5

Variance With

Data Final Budget

Control Actual Amounts Positive or

Codes Original Final (Negative)

REVENUES:

5700 Local and Intermediate Sources 22,290,977$ 22,886,827$ 23,315,439$ 428,612$

5800 State Program Revenues 120,095,634 121,195,634 121,222,647 27,013

5900 Federal Program Revenues 12,493,591 12,748,591 12,793,058 44,467

154,880,202 156,831,052 157,331,144 500,092

EXPENDITURES:

Current

0011 Instruction 82,453,564 83,388,182 79,497,381 3,890,801

0012 Instruction Resources & Media Services 2,243,812 2,323,584 2,222,174 101,410

0013 Curriculum & Instructional Staff Development 3,097,638 3,303,559 3,241,229 62,330

0021 Instructional Leadership 1,325,135 1,435,464 1,201,771 233,693

0023 School Leadership 5,063,560 5,131,670 4,956,858 174,812

0031 Guidance, Counseling & Evaluation Services 4,824,472 4,938,328 4,632,063 306,265

0032 Social Work Services 856,270 894,894 846,948 47,946

0033 Health Services 1,283,730 1,346,715 1,211,498 135,217

0034 Student (Pupil) Transportation 3,876,354 4,212,649 3,867,999 344,650

0035 Food Services 11,491,324 12,581,474 11,379,208 1,202,266

0036 Co-curricular/Extracurricular Activities 5,764,908 6,337,546 5,845,385 492,161

0041 General Administration 4,658,829 4,708,829 4,059,382 649,447

0051 Plant Maintenance & Operations 18,805,859 17,980,689 16,273,065 1,707,624

0052 Security & Monitoring Services 2,449,997 2,535,825 2,214,949 320,876

0053 Data Processing Services 2,008,765 2,223,767 2,027,859 195,908

0061 Community Services 855,852 1,269,717 1,185,921 83,796

0071 Debt Service - Principal on Long Term Debt 1,064,000 1,064,000 1,064,000 -

0072 Debt Service - Interest on Long Term Debt 212,214 212,214 212,214 -

0073 Debt Service - Bond Issuance Cost & Fees 5,000 195,680 192,392 3,289

0081 Construction & Acquisitions - 30,000 - 30,000

0095 Payments to Juvenile Justice Alternative Ed. Prog. 220,000 264,000 242,000 22,000

0099 Other Intergovernmental Charges 226,271 241,271 196,658 44,613

6030 152,787,554 156,620,057 146,570,954 10,049,103

1100 Excess (Deficiency) of Revenues Over (Under) 2,092,648 210,995 10,760,190 10,549,195

Expenditures

OTHER FINANCING SOURCES (USES)

7912 Sale of Real and Personal Property - - 20,741 20,741

7914 Loan Proceeds-Governmental Fund - 12,712,000 12,712,000 -

7915 Transfers In - - - -

8911 Transfers Out (Uses) (6,200,000) (20,526,320) (20,526,320) -

7080 (6,200,000) (7,814,320) (7,793,579) 20,741

1200 Net Change in Fund Balances (4,107,352) (7,603,325) 2,966,611 10,569,936

0100 Fund Balance - September 1 (Beginning) 31,341,611 31,341,611 31,341,611 -

3000 Fund Balance - August 31 (Ending) 27,234,259$ 23,738,286$ 34,308,222$ 10,569,936$


Total Other Financing Sources (Uses)

Total Revenues


BUDGETARY COMPARISON SCHEDULE

GENERAL FUND


Total Expenditures

17

EXHIBIT D-1

Total

Self Insurance Workers Comp Unemployment Internal

Fund Fund Fund Service Funds

ASSETS

Current Assets:

Cash and Cash Equivalents 4,681,082$ 3,610,515$ 157,791$ 8,449,388$

Other Receivables 52,989 - - 52,989

Prepayments - 58,061 - 58,061

Total Assets 4,734,072$ 3,668,576$ 157,791$ 8,560,438$

LIABILITIES

Current Liabilities:

Account Payables 198,543$ 58,061$ -$ 256,604$

Unearned Revenues 1,015,413 - - 1,015,413

Total Liabilities 1,213,956$ 58,061$ -$ 1,272,017$

NET POSITION

Unrestricted 3,520,115$ 3,610,515$ 157,791$ 7,288,421$

Total Net Position 3,520,115$ 3,610,515$ 157,791$ 7,288,421$




PROPRIETARY FUNDS

AUGUST 31, 2014

18

EXHIBIT D-2

Total

Self Insurance Workers Comp Unemployment Internal


OPERATING REVENUES:

Charges for Services 12,265,589$ 324,498$ 98,892$ 12,688,979$

Total Operating Revenues 12,265,589 324,498 98,892 12,688,979

Operating Income 12,265,589 324,498 98,892 12,688,979

Fees 2,280,142 263,546 29,283 2,572,971

Insurance Claims and Expenses 10,067,829 621,350 - 10,689,180

Total Operating Expenses 12,347,972 884,896 29,283 13,262,151

Operating Income (Loss) (82,383) (560,398) 69,609 (573,172)

Interest and Investment Revenue 5,715 5,521 - 11,236

Total Non-Operating Revenue (Expenses) 5,715 5,521 - 11,236

(Income (Loss) before Contributions

and Transfers (76,668) (554,877) 69,609 (561,936)

Transfers In - - - -

Change in Net Position (76,668) (554,877) 69,609 (561,936)

Total Net Position-September 1, (Beginning) 3,596,783 4,165,392 88,181 7,850,357

Total Net Position - August 31, (Ending) 3,520,115$ 3,610,515$ 157,791$ 7,288,421$


NON-OPERATING REVENUES (EXPENSES):

OPERATING EXPENSES:


STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS


19

mailto:-@sum('[General%20Ledger-all%20account%2008312013.xls]Sheet1'!$H$9427:$H$9434



20

EXHIBIT D-3

TotalSelf Insurance Workers Comp Unemployment Internal


CASH FLOWS FROM OPERATING ACTIVITIESReceipts from interfund services provided 10,534,560$ 324,498$ 98,892$ 10,957,951$ Receipts from employees 1,874,307 - - 1,874,307 Receipts from other participants 10,516 - - 10,516 Receipts from reimbursements and refunds 196,193 6,656 - 202,849 Payments for benefit claims (10,067,829) (628,006) - (10,695,836) Payments for administration (2,545,488) (263,546) (29,283) (2,838,317)

Net cash provided in operating activities 2,259 (560,398) 69,609 (488,530)

CASH FLOWS FROM INVESTING ACTIVITIESInterest received 5,715 5,521 - 11,236

Net cash provided from investing activities 5,715 5,521 - 11,236

Net increase in cash and cash equivalents 7,974 (554,877) 69,609 (477,294) Cash and Cash equivalents-beginning 4,673,108 4,165,392 88,181 8,926,682

Cash and Cash equivalents-ending 4,681,082$ 3,610,515$ 157,791$ 8,449,388$

Reconciliation of operating income to net cash provided by operating activities

Operating income/(loss) (82,383)$ (560,398)$ 69,609 (573,172)

Adjustments to reconcile operating loss to net cash provided:(Increase) decrease in miscellaneous receivables (52,989) - - (52,989) (Increase) decrease in other current assets - 12,025 - 12,025 Increase (Decrease) in account payables (16,164) (12,025) - (28,189) Increase (Decrease) in deferred revenues 153,795 - - 153,795

Total adjustments 84,642 - - 84,642

Net cash provided by operating activities 2,259$ (560,398)$ 69,609$ (488,530)$


WESLACO INDEPENDENT SCHOOL DISTRICTSTATEMENT OF CASH FLOWS

PROPRIETARY FUNDSFOR THE YEAR ENDED AUGUST 31, 2014

EXHIBIT E-1

Agency

Funds

ASSETS

Cash and Cash Equivalents 542,458$

Total Assets 542,458$

LIABILITIES

Due to Student Groups 542,458$

Total Liabilities 542,458$



STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

AUGUST 31, 2014

21

22


NOTES TO THE FINANCIAL STATEMENTS


I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Weslaco Independent School District (the "District") is a public educational agency operating under the applicable laws and regulations of the State of Texas. It is governed by a seven member Board of Trustees (the "Board") elected by registered voters of the District. The District prepares its basic financial statements in conformity with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board and other authoritative sources identified in Statement on Auditing Standards No. 69 of the American Institute of Certified Public Accountants; and it complies with the requirements of the appropriate version of Texas Education Agency's Financial Accountability System Resource Guide (the "Resource Guide") and the requirements of contracts and grants of agencies from which it receives funds.

A. REPORTING ENTITY The Board of Trustees (the "Board") is elected by the public and it has the authority to make decisions, appoint administrators and managers, and significantly influence operations. It also has the primary accountability for fiscal matters. Therefore, the District is a financial reporting entity as defined by the Governmental Accounting Standards Board ("GASB") in its Statement No. 14, "The Financial Reporting Entity." There are no 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 financial statements. They report information on all of the Weslaco Independent School District non-fiduciary activities with most of the inter-fund activities removed. Governmental activities include programs supported primarily by taxes, State foundation funds, grants and other intergovernmental revenues. The Statement of Activities demonstrates how other people or entities that participate in programs the District operates have shared in the payment of the direct costs. The "charges for services" column includes payments made by parties that purchase, use, or directly benefit from goods or services provided by a given function or segment of the District. Examples include tuition paid by students not residing in the district, school lunch charges, etc. The "grants and contributions" column includes amounts paid by organizations outside the District to help meet the operational or capital requirements of a given function. Examples include grants under the Elementary and Secondary Education Act. If revenue is not a program revenue, it is a general revenue used to support all of the District's functions. Taxes are always general revenues. Inter-fund activities between governmental funds appear as due to/due from on the Governmental Fund Balance Sheet and as other resources and other uses on the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance. All inter-fund transactions between governmental funds are eliminated on the government-wide statements. Inter-fund activities between governmental funds remain on the government-wide statements and appear on the government-wide Statement of Net Position as internal balances and on the Statement of Activities as inter-fund transfers. Inter-fund activities between governmental funds and fiduciary funds remain as due to/due from on the government-wide Statement of Activities. The fund financial statements provide reports on the financial conditions and results of operations for two fund categories – governmental and fiduciary. Since the resources in the fiduciary funds cannot be used for District Operations, they are not included in the government-wide statements. The District considers some governmental funds major and reports their financial conditions and results of operations in a separate column.

23




C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION

The government-wide financial statements use the economic resources measurement focus and the accrual basis of accounting, and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements use the current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets, current liabilities and fund balances are included on the balance sheet. Operating statements of these funds present net increases and decreases in current assets (i.e., revenues and other financing sources and expenditures and other financing uses). The modified accrual basis of accounting recognizes revenues in the accounting period in which they become both measurable and available and it recognizes expenditures in the accounting period in which the fund liability is incurred, if measurable, except for un-matured interest and principal on long-term debt, which is recognized when due. The expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. The District considers all revenues available if they are collectible within 60 days after year end. Revenues from local sources consist primarily of property taxes. Property tax revenues and revenues received from the State are recognized under the susceptible to accrual concept. Miscellaneous revenues are recorded as revenue when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned, since they are both measurable and available. Grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant. Accordingly, when such funds are received, they are recorded as deferred revenues until related and authorized expenditures have been made. If balances have not been expended by the end of the project period, grantors sometimes require the District to refund all or part of the unused amount. The Proprietary Fund Types and Fiduciary Funds are accounted for on a flow of economic resources measurement focus and utilize the accrual basis of accounting. This basis of accounting recognizes revenues in the accounting period in which they are earned and become measurable and expenses in the accounting period in which they are incurred and become measurable. The District applies all GASB pronouncements as well as the Financial Accounting Standards Board pronouncements issued on or before November 30, 1989, unless these pronouncements conflict or contradict GASB pronouncements. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the fund Statement of Net Assets. The fund equity is segregated into invested in capital assets net of related debt, restricted net assets, and unrestricted net assets.

24




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 for all financial resources except those required to be accounted for in another fund.

2. Debt Service Funds – The District accounts for resources accumulated and payments made for

principal and interest on long-term general obligation debt of governmental funds in a debt service fund.

3. The Capital Projects Fund - The proceeds from long-term debt financing and revenues and

expenditures related to authorized construction and other capital assets acquisitions are accounted for in a capital project fund.

Additionally, the District reports the following fund type(s): 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 some State financial assistance is accounted for in a Special Revenue Funds and sometimes unused balances must be returned to the grantor at the close of specified project periods.

2. The Capital Projects Fund - The proceeds from long-term debt financing and revenues and

expenditures related to authorized construction and other capital assets acquisitions are accounted for in a capital project fund.

Proprietary Funds:

3. Internal Service Funds – Revenues and expenses related to services provided to organizations inside

the District on a cost reimbursement basis are accounted for in an internal service fund. Fiduciary Funds:

4. Agency Funds – The District accounts for resources held for others in a custodial capacity in agency

funds. The District's Agency Funds are.

Textbooks Funds Campus Activity Funds Faculty Funds

25




E. OTHER ACCOUNTING POLICIES

1. For purposes of the statement of cash flows for proprietary and similar fund-types, the District

considers highly liquid investments to be cash equivalents if they have a maturity of three months or less when purchased.

2. The District reports inventories of supplies at cost including consumable maintenance, instructional,

office, athletic, and transportation items. Supplies are recorded as expenditures when they are consumed. Inventories of food commodities are recorded at market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair market value is supplied by the Texas Department of Human Services and recorded as inventory and deferred revenue when received. When requisitioned, inventory and deferred revenue are relieved, expenditures are charged, and revenue is recognized for an equal amount.

3. In the government-wide financial statements in the fund financial statements, long-term debt and other

long-term obligations are reported as liabilities in the applicable governmental activities. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

In the fund financial statements, governmental fund types recognized bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

. 4. It is the District's policy to permit employees to accumulate state sick leave and local leave shall be

non-cumulative. There is a liability for unpaid accumulated state sick leave. The District has a policy to pay professional $ 60 per day and Paraprofessional $ 40 per day when employees retire from service with the District. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

5. Capital assets, which include land, buildings, furniture and equipment, are reported in the applicable

governmental columns in the government-wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated 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 materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

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

26




Assets Years Buildings 30 Building Improvements 30 Buses 10 Vehicles 5 Office Equipment 5 Computer Equipment 5 Land Improvements 12

6. The District has a central receiving warehouse where all equipment and supplies are received. All

assets received are tagged and labeled before they are delivered. The equipment is posted and confirmed with the purchase order. The items are labeled for delivery to make sure they reach their destination. Transfer forms are used when the assets are moved from one location to another.

7. The District adopted GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources,

Deferred Inflows of Resources, and Net position, which provides guidance for reporting the financial statement elements of deferred outflows of resources, which represent the consumption of the District’s

net position that is applicable to a future reporting period, and deferred inflows of resources, which represent the District’s acquisition of net position applicable to a future reporting period.

The District adopted GASB Statement No. 65, Items Previously Reported as Assets and Liabilities,

which establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities. See Note U for the prior period adjustment related to the adoption of GASB Statement No. 65.

8. In June 2012, the GASB issued GASB Statement No. 68, Accounting and Financial Reporting for

Pensions – an Amendment to BASB Statement No. 27, effective for fiscal years beginning after June 15, 2014. The objective of GASB Statement No. 68 is to improve accounting and financial reporting for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through certain trusts. GASB Statement No. 68 establishes standards for measuring and recognizing liabilities, deferred outflows of resources and deferred inflows of resources, and expense/expenditures. GASB Statement No. 68 also identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. In addition, GASB Statement No. 68 addresses the recognition and disclosure requirements for employers with liabilities (payables) to a defined benefit pension plan and for employers whose employees are provided with defined contribution pensions. Management is evaluating the effects that the full implementation of GASB Statement No. 68 will have on its financial statements for the year ended August 31, 2015.

9. The District insurances programs are self-funded insured plans. The workmen’s compensation, health,

and dental are self-funded programs. The health insurance program met the minimum state requirement of per employee. The health insurance low plan is a 70/30 plan and the health insurance high plan is an 80/20 plan. The District cost per employee $380.00.

27



YEAR ENDED AUGUST 31, 2014 10. In the fund financial statements, certain resources of the governmental funds are set aside for the

repayment or use of specific programs and are recorded to four categories of designations:

Nonspendable – Amounts that cannot be spent because they are either not in a spendable form or are legally or contractually required to be maintained intact.

Restricted – Amounts that can be spent only for specific purposes because of constraints imposed by external providers, or imposed by constitutional provisions or enabling legislation.

Committed – Amounts that can only be used for specific purposes pursuant to approval by formal action by the Board.

Assigned - For the General Fund, amounts that are appropriated by the Board or a Board designee that are to be used for specific purposes. For all other governmental funds, any remaining positive amounts not previously classified as nonspendable, restricted or committed. Unassigned fund balances are amounts that are available for any purpose; these amounts can be reported only in the District’s General Fund. The District’s unassigned fund balance will be maintained to provide the District with sufficient working capital and a margin of safety to address local and regional emergencies without borrowing. The unassigned General Fund fund balance may only be appropriated by resolution of the Board of Trustees. Amendments or modifications of the committed fund balance must also be approved by formal action of the Board of Trustees. When it is appropriate for fund balance to be assigned, the Board of Trustees has delegated authority by resolution to the Superintendent or Chief Financial Officer. In circumstances where expenditures are to be made for a purpose for which amounts are available in multiple fund balance classifications, the order in which resources will be expended is as follows: restricted, committed, assigned, and unassigned. The purpose of the Debt Service Fund is to account for funds used to pay the long and short term debt obligations used to fund the District’s capital projects. The District’s governmental fund balance designations can be identified as follows: General Fund Nonspendable Inventories $ 938,278 Prepaid Items 1,760,386 Restricted Food Service $ 1,972,637 State Comp. 557,517 State Vocational 1,635,434 High School Allotment 302,199

28



YEAR ENDED AUGUST 31, 2014 State Bilingual 27,102 Other Assigned 11,114,670 Total Nonspendable, Restricted, Assigned- General Fund $ 18,308,222 Debt Service Fund Restricted Retirement of Long Term Debt $ 1,499,721 Total Nonspendable, Restricted- Debt Service Fund $ 1,499,721 2014 Energy Conservation Fund

Restricted Restricted for Capital Acquisitions $ 7,179,974 Total Nonspendable, Restricted- 2014 Energy Conservation Fund $ 7,179,974 Nonmajor Funds Restricted Tex. Successful Schools Award $ 10,668

Restricted Restricted for Capital Acquisitions $ 3,511,762

Committed

Campus Activity Funds $ 245,912 Assigned Scholarship Fund $ 9,584 Total Restricted, Committed, Assigned – Nonmajor Funds $ 3,777,926 Total Nonspendable, Restricted, Committed, Assigned Governmental Fund Balances $ 30,765,842

11. When the District incurs an expense for which it may use either restricted or unrestricted assets, it uses

the restricted assets first unless unrestricted assets will have to be returned because they were not used.

29



YEAR ENDED AUGUST 31, 2014 12. The Data Control Codes refer to the account code structure prescribed by TEA in the Financial

Accountability System Resource Guide. Texas Education Agency requires school districts to display these codes in the financial statements filed with the Agency in order to insure accuracy in building a statewide data base for policy development and funding plans.

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND

BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS Exhibit C-2 provides the reconciliation between the fund balance for total governmental funds on the governmental fund balance sheet and the net assets for governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that capital assets 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 are not reported as liabilities in the funds. The details of capital assets and long-term debt at the beginning of the year were as follows:

Capital Assets at the Beginning of the year

Historic Cost

Accumulated Depreciation

Net Value at the Beginning of the

Year

Change in Net

Assets

Depreciable Land Improvements $ 15,425,874 $ ( 4,432,753) $ 10,993,121 Buildings 226,160,280 (103,686,877) 122,473,403 Furniture & Equipment 21,018,016 ( 17,427,458) 3,590,557 Construction in Progress 710,200 - 710,200 Change in Net Assets $ 137,767,281

Long-term Liabilities at the Beginning of the year

Payable at the Beginning of the

Year

Bonds Payable 80,994,991 65,205,000 CAPS Payable 23,167,000 5,453,000 (70,658,000)

Net Adjustment to Net Assets

$ 67,109,281

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 reconciliation between the net changes in fund balance as shown on the governmental fund statement of revenues, expenditures, and changes in fund balances and the changes in net assets 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 payments are expenditures in the fund financial statements, but should be shown as increases in capital assets and decreases in long-term debt in the government-wide statements. This adjustment affects both the net asset balance and the change in net assets. The details of this adjustment are as follows:

30




Amount

Adjustments to Changes in Net Assets

Adjustments to Net Assets

Current Year Capital Outlay

Land $ 41,638 - $ 41,638 Buildings &Improvements 71,177 - 71,177 Furniture & Equipment 677,255 - 677,255 Construction in Progress 7,061,112 - 7,061,112

Total Capital Outlay $ 7,851,182 - $ 7,851,182

Debt Principal Payments

Bond Principal 3,315,000 CAPS Principal 1,064,000

Total Principal Payments 4,379,000

Total Adjustment to Net Assets $ 12,230,182 Another element of the reconciliation on Exhibit C-4 is described as various other reclassifications and eliminations necessary to convert from the modified accrual basis of accounting to accrual basis of accounting. This adjustment is the result of several items. The details for this element are as follows:

Amount

Adjustments to Change in

Net Assets

Adjustments to

Net Assets Adjustments to Revenue and Deferred Revenue

Taxes Collected from Prior Year Levies $ 1,236,036 $ ( 1,236,036) $ - Uncollected taxes(assumed collectible) from Current

Year Levy 1,278,368

1,278,368

1,278,368

Uncollected Taxes (assumed collectible) from Prior Year Levy

3,066,181

( 251,336)

3,066,181

Reclassify Proceeds of Bonds, Loans & Capital Leases

Discount (Premium) on Issuance of Bonds $ ( 317,746) $ 171,852 $( 317,746) Loss on Refunding 724,368 ( 65,852) 724,368 Current Year Loan Proceeds 12,712,000 ( 12,712,000) (12,712,000) Interest Payable ( 270,019) ( 96,338) ( 270,019)

Reclassify liabilities incurred but not liquidated this year

Unused Vacation Pay and/or unused sick leave (734,330) ( 306,080) ( 734,330)

Total

$ (13,217,421)

$ ( 8,965,178)

31



YEAR ENDED AUGUST 31, 2014 III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. BUDGETARY DATA The Board of Trustees adopts an "appropriated budget" for the General Fund, Debt Service Fund and the Food Service Fund which is included in the General Fund. The District is required to present the adopted and final amended budgeted revenues and expenditures for each of these funds. The District compares the final amended budget to actual revenues and expenditures. The General Fund Budget report appears in Exhibit C-5 and the other two reports are in Exhibit J2 and J3. The following procedures are followed in establishing the budgetary data reflected in the general-purpose financial statements:

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

2. A meeting of the Board is then called for the purpose of adopting the proposed budget. At least

ten days public notice of the meeting must be given. 3. Prior to September 1, the budget is legally enacted through passage of a resolution by the Board.

Once a budget is approved, it can only be amended at the function and fund level by approval of a majority of the members of the Board. Amendments are presented to the Board at its regular meetings. Each amendment must have Board approval. As required by law, such amendments are made before the fact, are reflected in the official minutes of the Board, and are not made after fiscal year end. Because the District has a policy of careful budgetary control, several amendments were necessary during the year.

4. Each budget is controlled by the budget coordinator at the revenue and expenditure function/object

levels. Budgeted amounts are as amended by the Board. All budget appropriations lapse at year end. Reconciliation of fund balances for both appropriated budget and non-appropriated budget special revenue funds are as follows:

August 31, 2014 Fund Balance

Non-appropriated Budget Funds $ 266,164 All Special Revenue Funds $ 266,164

IV. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS

A. DEPOSITS AND INVESTMENTS The funds of the District must be deposited and invested under the terms of a contract, contents of which are set out in the Depository Contract Law. The depository bank places approved pledged securities for safekeeping and trust with the District's agent bank in an amount sufficient to protect District funds on a day-to-day basis during the period of the contract. At August 31, 2014 the carrying amount of the District's deposits (cash, certificates of deposit, and interest-bearing savings accounts included in temporary investments) was $325,953 and the bank balance was $2,907,283. The District's cash deposits at August 31, 2014 and during the year ended August 31, 2014 were entirely covered by FDIC insurance and by pledged collateral held by the District's agent bank in the District's name.

32



YEAR ENDED AUGUST 31, 2014 In addition, the following is disclosed regarding coverage of combined balances on the date of highest deposit:

a. Depository: Lone Star National Bank b. The market value of securities pledged as of the date of the highest combined balance on

deposit was $ 20,701,780. c. The highest combined balances of cash, savings, and time deposit accounts amounted to

$20,227,841 and occurred during the month of January 2014. d. Total amount of FDIC coverage at the time of the highest combined balance was $ 250,000.

District Policies and Legal and Contractual Provisions Governing Deposits Custodial Credit Risk for Deposits State law requires governmental entities to contract with financial institutions in which funds will be deposited to secure those deposits with insurance or pledged securities with a fair value equaling or exceeding the amount on deposit at the end of each business day. The pledged securities must be in the name of the governmental entity and held by the entity or its agent. Since the district complies with this law, it has no custodial credit risk for deposits. Foreign Currency Risk The District limits the risk that changes in exchange rates will adversely affect the fair value of an investment or a deposit by (state an appropriate policy, such as, limiting all deposits denominated in a foreign currency to less than 5% of all deposits.)

The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions in the areas of investment practices, management reports and establishment of appropriate policies. Among other things, it requires the District to adopt, implement, and publicize an investment policy. That policy must address the following areas: (1) safety of principal and liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5) expected rates of return, (6) maximum allowable stated maturity of portfolio investments, (7) maximum average dollar-weighted maturity allowed based on the stated maturity date for the portfolio, (8) investment staff quality and capabilities, (9) and bid solicitation preferences for certificates of deposit. Statutes authorize the District to invest in (1) obligations of 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 auditors perform test procedures related to investment practices as provided by the Act. The district is in substantial compliance with the requirements of the Act and with local policies.

As of August 31, 2014, Weslaco Independent School District had the following investments: Investment Maturities (in years) Investment Type

Fair Value

Less than 1

1-5

6-10

More Than 10

First Public Investment Pool

42,978,783

42,978,783

Texas Term 17,725,423 17,725,423 Texpool 5,774,094 5,774,094 Total

66,478,300

66,478,300

Additional policies and contractual provisions governing deposits and investments for Weslaco Independent School District are specified below: Credit Risk In accordance with state law and the District’s investment policy, investments in mutual funds and investment pools must be rated at least AAA or have an equivalent rating, commercial paper must be rated at least A-1, P-1 or have equivalent rating, and obligations of states, agencies, counties, and cities must be at least A or its equivalent. As of August 31, 2014 the district's investments in First Public Investment Pool were rated AAA, by

33



YEAR ENDED AUGUST 31, 2014 Standard & Poor's (S&P), Texas Term was rated AAAf by Standard and Poor’s (S&P) and Texpool was rated AAAm by Standard and Poor’s (S&P). Custodial Credit Risk for Investments For an investment, this is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All of the investments held by third parties were fully collateralized and held in the District’s name. Concentration of Credit Risk The investment portfolio is diversified in terms of investment instruments, maturity scheduling, and financial institutions to reduce risk of loss resulting from over-concentration of assets in a specific class of investments, specific maturity, or specific single issuer. As of August 31, 2014, the District had 65% of its investments in First Public Investment Pools rated AAA as noted above, 27% of its investments in Texas Term rated AAAf, and 8% in Texpool rated AAAm. Interest Rate Risk In accordance with state law and District’s investment policy, the District does not purchase any investments greater than one (1) year for its operating funds Foreign Currency Risk for Investments The District limits the risk that changes in exchange rates will adversely affect the fair value of an investment. At year-end, the District was not exposed to foreign currency risk.

B. PROPERTY TAXES Property taxes are levied by October 1 on the assessed value listed as of the prior January 1 for all real and business personal property located in the District in conformity with Subtitle E, Texas Property Tax Code. The District property taxes are levied on $ 1.1397 per $ 100 property tax valuation. Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1of the year following the year in which imposed. On January 31 of each year, a tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed. Property tax revenues are considered available (1) when they become due or past due and receivable within the current period and (2) when they are expected to be collected during a 60-day period after the close of the school fiscal year. C. DELINQUENT TAXES RECEIVABLE Delinquent taxes are prorated between maintenance and debt service based on rates adopted for the year of the levy Allowances for uncollectible tax receivables within the General and Debt Service Funds are based on historical experience in collecting property taxes. Uncollectible personal property taxes are periodically reviewed and written off, but the District is prohibited from writing off real property taxes without specific statutory authority from the Texas Legislature.

34



YEAR ENDED AUGUST 31, 2014 D. DISAGGREGATION OF RECEIVABLES AND PAYABLES

Receivables at August 31, 2014 were as follows:

Property

Other

Due From

Total

Taxes

Governments

Other Funds

Other

Receivables

Governmental Activities: General Fund $ 4,487,621

$ 4,179,874

$ 965,655

$ 369,283

$ 10,002,433

Special Revenue Funds -

1,316,025

-

325

1,316,351 Debt Service Fund 216,601

1,420

-

-

218,021

Capital Projects Fund -

-

-

-

- Total - Governmental Activities 4,704,222

5,497,320

956,655

369,608

11,536,805

Less: Allowance for Uncollectible $ (359,672)

$ -

$ -

$ -

$ (359,672)

Net Total Receivable $ 4,344,550

$ 5,497,320

$ 965,655

$ 369,608

$11,177,133

Payables at August 31, 2014 were as follows:

Salaries

Due to

Due to

Accounts

And

Other

Other

Total

Payable

Benefits

Funds

Governments

Other Payables

Governmental Activities:

General Fund $ 2,048,252

$ 3,945,642

$ -

$ 7,662

$ 1,053,205 $ 7,054,761

Special Revenue Funds

436,604

334,983

965,655

75,664

-

1,812,907 Debt Service Fund -

-

-

4,245,611

- 4,245,611

Capital Projects Fund

3,418,689

-

-

-

-

3,418,689 Internal Service Funds 256,604

-

-

-

- 256,604

Trust & Agency Fund -

-

-

-

542,458

542,458

Total - Governmental Activities $ 6,160,150

$ 4,280,625

$ 965,655

$4,328,937

$ 1,595,663

$ 17,331,030

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YEAR ENDED AUGUST 31, 2014 E. INTERFUND RECEIVABLES AND PAYABLES Inter-fund balances at August 31, 2014 consisted of the following individual fund balances: Due From

Other Funds

Due To Other Funds

General Fund: Special Revenue Fund $ 965,655 $

Special Revenue Funds: General Fund 965,655

TOTAL $ 965,655 $ 965,655

F. CAPITAL ASSET ACTIVITY Capital asset activity for the District for the year ended August 31, 2014 was as follows: Primary Government

Beginning Balance

Additions

Retire.

Re- Classification

Ending Balance

Governmental Activities: Land $ 15,425,874 $ 41,638 $ -0- $ -0- $ 15,467,512 Buildings and Improve. 226,160,280 71,177 -0- 226,231,457 Furniture and Equip. 21,018,016 677,255 ( 679,386) -0- 21,015,885 Construction in progress 710,200 7,061,112 -0- 7,771,312

Totals at Historic Cost

$ 263,314,370

$ 7,851,182

$ ( 679,386)

-0-

$ 270,486,165

Less Accumulated Deprec. for:

Land Improvement Deprec. $ (4,432,753) $ (507,627) $ -0- $ -0- $ (4,940,380) Buildings and Improve. (103,686,877) (6,809,884) -0- (110,496,761) Furniture and Equipment (17,427,458) ( 1,354,922) 679,386 (18,102,995) Total Accumulated Deprec.

$ (125,547,088)

$(8,672,433)

$ 679,386

$ -0-

$ (133,540,135)

Governmental Activities Capital Assets, Net

$ 137,767,282

$( 821,251)

$ -0-

$ -0-

$ 136,946,030

36




Depreciation expense was charged to governmental functions as follows: Instruction $ 4,649,150 Instructional Resources and Media Services 150,656 Curriculum Development and Instructional Staff Development 212,814 Instructional Leadership 19,627 School Leadership 261,057 Guidance, Counseling and Evaluation Services 192,473 Social Work Services 33,316 Health Services 94,895 Student (Pupil) Transportation 357,922 Food Services 607,416 Co-curricular/Extracurricular Activities 1,100,082 General Administration 8,563 Plant Maintenance and Operations 428,436 Security and Monitoring Service 91,076 Data Processing Services 204,283 Community Services 260,666

Total Depreciation Expense $ 8,672,433

G. BONDS PAYABLE AND CONTRACTUAL OBLIGATIONS Bonded indebtedness of the District is reflected in the General Long-Term Debt Account Group. Current requirements for principal and interest expenditures are accounted for in the Debt Service Fund and General Fund. A summary of changes in general long-term debt for the year ended August 31, 2014 is as follows:

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DESCRIPTION

Interest

Rate Payable

Amounts Original

Issue

Interest Current

Year

Payable Amounts

Outstanding 9/1/13

Issued

Retired

Outstanding 8/31/14

Refunding Schoolhouse bonds- Series 2005

3.50% 5.00%

$ 31,994,999

$ 959,150

$21,070,000

$ -0-

$ 2,245,000

$ 18,825,000

Unlimited Tax School Building Series 2006

4.125% 5.25%

$ 24,000,000

$ 974,090

$20,875,000

$ -0-

$ 535,000

$ 20,340,000

Maintenance Tax Notes Series 2008A

3.75% 4.50%

$ 4,840,000

$ 108,219

$ 2,730,000

$ -0-

$ 465,000

$ 2,265,000

Unlimited Tax School Building Series 2008

2.300% 5.080%

$ 24,999,992

$ 1,048,363

$23,260,000

$ -0-

$ 535,000

$ 22,725,000

Public Property Finance Contractual Obligations Series 2006

4.20%

$ 1,030,000

$ 8,337

$ 263,000

$ -0-

$ 129,000

$ 134,000



3.65% 4.10%

2.29% 5.12%

$ 2,650,000 $ 1,935,000

$ 43,104 $ 52,554

$ 1,210,000

$ 1,250,000

$ -0- $ -0-

$ 285,000 $ 185,000

$ 925,000 $ 1,065,000

Public Property Note Contractual Obligations Series 2014

4.57%

$ 12,712,000

$ -0-

$ -0-

$ 12,712,000

$ -0-

$ 12,712,000

TOTAL

$ 3,193,816

$70,658,000

$12,712,000

$ 4,379,000

$78,991,000

In addition to the outstanding bonds and contractual obligations in the amount of $78,991,000 at year end, the District also reported unamortized premiums and discounts on issuance of bonds of $317,746 and a long term liability for sick leave benefits in the amount of $734,330 ( refer to Note I ). These amounts, in aggregate, represent total long term liabilities in the amount of $ 80,043,076, as reflected in the Statement of Net Position. Debt service requirements are as follows: General Obligations

Year Ended August 31,

Principal

Interest

Total Requirements

2015 5,415,000 3,018,148 8,433,148 2016 5,552,000 2,806,589 8,358,589 2017 5,774,000 2,582,846 8,356,846 2018 5,681,000 2,353,230 8,034,230 2019 3,452,000 2,178,203 5,630,203 2020-2024 17,817,000 9,129,505 26,946,505 2025-2029 14,950,000 6,249,936 21,199,936 2030-2034 11,740,000 3,716,710 15,456,710 2035-2039 8,610,000 744,756 9,354,756 Total 78,991,000 32,779,922 111,770,922

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YEAR ENDED AUGUST 31, 2014 There are a number of limitations and restrictions contained in the general obligation bond indenture. Management has indicated that the District is in compliance with all significant limitations and restrictions at August 31, 2014.

H. COMMITMENTS UNDER LEASES Commitments under operating (non-capitalized) lease agreements for facilities and equipment provide for minimum future rental payments as of August 31, 2014 as follows:

Year Ending August 31, 2015 $ 300,703 2016 219,461 2017 67,670 Total $ 587,834 Rental Expenditures in Fiscal Year 2014 $ 348,270

I. ACCUMULATED UNPAID VACATION AND SICK LEAVE BENEFITS Upon retirement or death of certain employees, the District pays any accrued sick leave and vacation leave in a lump cash payment to such employee or his/her estate. Individuals employed after October 1, 1985, are not eligible to receive the lump sum payments. A summary of changes in the accumulated sick leave and vacation leave liability follows:

Sick Leave Vacation Leave Balance September 1, 2013 $ 428,250 $ -0- Additions – New Entrants and Salary Increments 378,830 -0- Deductions – Payments to Participants (72,750) -0- Balance August 31, 2014 $ 734,330 $ -0-

J. RETIREE HEALTH PLAN Plan Description-Weslaco Independent School District contributes to the Texas Public School Retired Employees Group Insurance Program (TRS-Care), a cost-sharing multiple-employer defined benefit postemployment health care plan administered by the Teacher Retirement System of Texas. TRS-Care Retired Plan provides health care coverage for certain persons (and their dependents) who retired under the Teacher Retirement System of Texas. The statutory authority for the program is Texas Insurance Code, Chapter 1575. Section 1575.052 grants the TRS Board of Trustees the authority to establish and amend basic and optional group insurance coverage for participants. The TRS issues a publicly available financial report that includes financial statements and required supplementary information for TRS-Care. That report may be obtained by writing to the TRS Communications Department, 1000 Red River Street, Austin, Texas 8701, by calling the TRS Communications Department at 1-800-223-8778, or by downloading the report from the TRS Internet website, www.trs.state.tx.us, under the TRS Publications heading.

39



YEAR ENDED AUGUST 31, 2014 Funding Policy – Contribution requirements are not actuarially determined but are legally established each biennium by the Texas Legislature. Texas Insurance Code, Sections 1575.202, 203, and 204 establish state, active employee, and public school contributions, respectively. The state of Texas and active public school employee contribution rates were 1.0% and 0.65% of public school payroll, respectively, with school districts contributing a percentage of payroll set at .55% for fiscal years, 2013, 2012, and 2011. Per Texas Insurance Code, Chapter 1575, the public school contribution may not be less than 0.25% or greater than 0.75% of the salary of each active employee of the public school. For the years ended August 31, 2014, 2013, and 2012, the State’s contributions to TRS-Care were $283,688, $245,288, and $259,378, respectively, the active member contributions were $673,708, $660,569, and $644,441 , respectively, and the school district’s contributions were $570,065 , $558,949, and $545,293, respectively, which equaled the required contributions each year. The contributions made by the State on behalf of the District have been recorded in the government-wide financial statements and in the fund financial statements of the General Fund as both state revenues and payroll expenditures.

K. RETIREE MEDICARE PART D COVERAGE The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, established prescription drug coverage for Medicare beneficiaries known as Medicare Part D. One of the provisions of Medicare Part D allows for the Texas Public School Retired Employee Group Insurance Program (TRS-Care) to receive retiree drug subsidy payments from the federal government to offset certain prescription drug expenditures for eligible TRS-Care participants. For the fiscal year ended August 31, 2014, 2013, and 2012, these on-behalf payments were estimated to be $283,688, $245,288, and $259,378, respectively, and were recognized by the District as revenues and expenditures.

L. DEFINED BENEFIT PENSION PLAN Weslaco Independent School District contributes to the Teacher Retirement System of Texas (TRS), a cost-sharing multiple employer defined benefit pension plan. TRS administers retirement and disability annuities, and death and survivor benefits to employees and beneficiaries of employees of the public school systems of Texas. It operates primarily under the provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas Government Code, Title 8, Subtitle C. TRS also administers proportional retirement benefits and service credit transfer under Texas Government Code, Title 8, Chapters 803 and 805, respectively. TRS issues a publicly available financial report that includes financial statements and required supplementary information for the defined benefit pension plan. That report may be obtained by writing to the TRS Communications Department, 1000 Red River Street, Austin, Texas 8701, by calling the TRS Communications Department at 1-800-223-8778, or by downloading the report from the TRS Internet website, www.trs.state.tx.us, under the TRS Publications heading. Funding Policy - State law provides for fiscal years 2008 a state contribution rate of 7.58% and a member contribution rate of 7.05%. In certain instances the reporting district (I.S.D., college, university, or state agency) is required to make all or a portion of the state's 6.58% contribution. Contribution requirements are not actuarially determined but are legally established each biennium pursuant to the following state funding policy: (1) The state constitution requires the legislature to establish a member contribution rate of not less than 6.0% of the member's annual compensation and a state contribution rate of not less than 6.0% and not more than 10.0% of the aggregate annual compensation of all members of the system during that fiscal year; (2) A state statute prohibits benefit improvements or contribution reductions if, as a result of a the particular action, the time required to amortize TRS's unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by such action. State contributions to TRS made on behalf of Weslaco independent School District's employees for the years ended August 31, 2012, 2013 and 2014 were $ 5,024,455, $ 5,153,304, and $ 5,744,138 respectively. Weslaco Independent School District paid additional state contributions for the years ended August 31, 2012, 2013, and 2014 in the amount of $ 780,972, $ 764,587 and $953,819 respectively, on the portion of the employees' salaries that exceeded the statutory minimum.

40




M. HEALTH CARE COVERAGE The District sponsors a Self-funded Health Insurance Plan to provide health care benefits to staff members and their dependents. The District pays $ 380.00/monthly per employee on Health Insurance for a total of $10,204,140.

N. CHANGES IN LONG-TERM LIABILITIES Long-term activity for the year ended August 31, 2014 was as follows: Beginning

Balance

Additions

Reductions Ending Balance

Due Within One Year

Governmental Activities: Bonds and Notes Payable: General Obligation Bonds And Maintenance Tax Notes

$ 70,658,000 $ 12,712,000 $ 4,379,000 $ 78,991,000 $ 5,415,000

Unamortized Prem./Discounts 489,598 0 171,852 317,746 177,272 Total Bonds and Notes Payable

$ 71,147,598 $ 12,712,000 $ 4,550,852 $ 79,308,746 $ 5,592,272

Other Liabilities: Sick Leave Benefits 428,250 378,830 72,750 734,330 0 Total Other Liabilities 428,250 378,830 72.750 734,330 0

Total Governmental Activities

Long-term Liabilities

$ 71,575,848

$ 13,090,830

$ 4,623,602

$ 80,043,076

$ 5,592,272

O. UNEARNED REVENUE Unearned revenue at year end consisted of the following:

General Fund Special Revenue Fund Total State Foundation Overpayment $ 3,238,884 $ 0 $3,238,884 Athletic Receipts 44,202 0 44,202 Food Service Commodities 139,170 0 139,170 Summer LEP 0 76,500 76,500 Loss Control Grant 0 2,000 2,000 AP Incentive Grant 0 30 30 AP/IB Campus Award 0 53,242 53,242 Masters Reading & Math 0 4 4 GR-AP Teacher Grant 0 24,733 24,733 Bill Gates Foundation Grant 0 456 456 Healthy Kids Initiative 0 44 44 B. Bush Fund Toshiba Grant I.M.A. Funds

0 0 0

34 415 309,917

34 415 309,917

Discover Brighter Futures 0 20 20 Medicaid Adm. Fund 0 303,029 303,029

Total Unearned Revenue $ 3,422,256 $ 770,425 $ 4,192,680

41




P. DUE FROM STATE AGENCIES The District participates in a variety of federal and state programs from which it receives grants to partially or fully finance certain activities. In addition, the District receives entitlements from the State through the School Foundation and Per Capita Programs. Amounts due from federal and state governments as of August 31, 2014 are summarized below. All federal grants shown below are passed through the TEA and are reported on the combined financial statements as Due from State Agencies except for the Gear-Up program which is received from Region One and Career and Technology which is received from South Texas College. The amount reported in Due from other Governments is $5,497,320, and includes non-entitlement receivables of $ 740,172. The receivable balance, $ 4,757,147 is as follows:

Fund State Entitlement Federal Grants Total General $ 3,086,765 $ 354,357 $ 3,441,122 Special Revenue -0- 1,316,025 1,316,025

Total $ 3,086,765 $ 1,670,382 $ 4,757,147

Q. REVENUE FROM LOCAL AND INTERMEDIATE SOURCES

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

General

Fund

Special Revenue

Fund

Debt Service Fund

Capital Projects

Fund

Sub-Total

Self-

Insurance

Total Property Taxes $ 20,960,188 $ 0 $ 41,913 $ 0 $ 21,002,100 $ 0 $ 21,002,100 Penalties, Int. and Other Tax-related Income

827,105

0

33,283

0

860,388

0

860,388

Investment Income 30,247 0 19,783 9,148 59,178 11,236 70,414 Food Sales 740,492 0 0 0 740,492 0 740,492 Co-curricular Student Activities

339,903 362,248

0 0 702,151 0 702,151

Other 417,504 11,980 0 0 429,484 12.688,979 13,118,463 Total $ 23,315,439 $ 374,228 $ 94,979 $ 9,148 $ 23,793,794 $12,700,215 $ 36,494,009

R. LITIGATION The District is a defendant in a number of lawsuits arising out of the normal course of operations. In the opinion of the administration, the outcome of these lawsuits will not have a material adverse effect on the accompanying combined financial statements and accordingly, no provision for potential losses has been recorded.

42




S. CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS AND CONTINGENCIES Project

Architect/Engineer

Location

Project Starting Date

Project Completion Date

Estimated Project Cost

Margo Elem. N. & S. Wings Roofing

PBK Architects, Inc.

1701 S. Bridge Weslaco, Tx 78596

Aug. 1, 2013 Dec., 2014 $734,862

Weslaco High I Wing Roofing

PBL Architects, Inc.

1005 W. Pike Blvd. Weslaco, Tx 78596

Aug. 1, 2013

Dec. , 2014

$452,012

Energy Conservation Project-District Wide

Ro Engineering, PLLC.

Weslaco, Tx 78596

Aug. 1, 2014 May 2015 $13,054,676

T. MAINTENANCE OF EFFORT The District Health Insurance Plan is a self-funded plan. The following is the total amount paid by the district for its employees.

Total District Employers Premium paid for health care 2013– 2014

$ 10,204,140

Subtract any non-medical expenditures

Life Insurance $ 53,722 Dental Insurance 276,978 Cobra -0- $ (330,700)

c) 2013 -2014 Maintenance of Effort $ 9,873,440

U. PRIOR PERIOD ADJUSTMENT The District recognized a prior period adjustment in the Financial Statements totaling $1,138,275. The adjustment resulted from $968,436 additional EDA revenues and $169,839 additional IFA revenues for the 2011/2012 fiscal year due to the District’s excess tax collections as per TEA. Fund Balance Net Position Restricted for Debt August 31, 2013 $ 115,569,312 $ 273,431 Effect of Adjustments 1,138,275 1,138,275

August 31, 2013 as restated $ 116,707,587 $1,411,706

43



YEAR ENDED AUGUST 31, 2014 V. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES Governmental funds report deferred inflows in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the government-wide financial statements, deferred outflows include deferred charges on refunding of the bonds. As of August 31, 2014 the various components of deferred outflows and inflows of resources are as follows: At the fund level financial statements, the District has the following Deferred Inflows of Resources:

General Fund Debt Service Fund Total

Property Tax, unavailable $4,144,608 $199,942 $4,344,550 At the government-wide financial statements (Exhibit A-1), the District reports deferred charges on refunding as Deferred Outflows of Resources in the amount of $ 724,368 which is net of amortization of $65,852. Beginning

Balance Additions Reductions Ending Balance

Deferred Loss on refunding 2005 790,219 - 65,852 724,368 W. SUBSEQUENT EVENTS The District has considered all subsequent events through December 2, 2014.

211 212 222 224Data ESEA I, A ESEA Title I Learn and IDEAControl Improving Part C Serve Part - BCodes Basic Program Migrant America Formula

ASSETS1110 Cash and Cash Equivalents -$ -$ 55$ -$ 1220 Property Taxes - Delinquent - - - - 1230 Allowance for Uncollectible Taxes (credit) - - - - 1240 Due from Other Governments 776,415 209,873 - 149,757 1290 Other Receivables 185 140 - -

1000 Total Assets 776,600$ 210,013$ 55$ 149,757$

LIABILITIES2110 Accounts Payable 7,059$ 1,916$ -$ 472$ 2160 Accrued Wages Payable 164,762 17,085 - 90,140 2170 Due to Other Funds 604,779 191,012 - 59,145 2180 Due to Other Governments - - 55 - 2300 Unearned Revenues - - - -

2000 Total Liabilities 776,600$ 210,013$ 55$ 149,757$

DEFERRED INFLOWS OF RESOURCES2601 Unavailable Revenue - Property Taxes2500 Total Deferred Inflows of Resources - - - -

Fund Balances:3450 Restricted for Grant Restrictions -$ -$ -$ -$ 3470 Restricted for Capital Acquisitions - - - - 3480 Restricted for Retirement of Debt - - - - 3545 Other Committed Fund Balances - - - - 3590 Other Assigned Fund Balance - - - -

Total Fund Equity-$ -$ -$ -$

4000 Total Liabilities, Deferred Inflows & Fund Balances 776,600$ 210,013$ 55$ 149,757$

44

WESLACO INDEPENDENT SCHOOL DISTRICTCOMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDSAUGUST 31, 2014

EXHIBIT H-1

225 233 244 255 263 272 274 289IDEA JPTA Vocational Ed. ESEA II, A English Medicaid OtherPart B Title II C Basic Training & Language Adm. Claiming Federal

Preschool Job Training Grant Recruiting Acquisition Program Gear - Up Grants

-$ 1,270$ -$ 86,148$ -$ 303,029$ -$ 76,500$ - - - - - - - - - - - - - - - -

1,726 - 54,420 38,488 22,784 - 62,563 - - - - - - - - -

1,726$ 1,270$ 54,420$ 124,636$ 22,784$ 303,029$ 62,563$ 76,500$

-$ -$ 5,110$ 12,689$ -$ -$ 276$ -$ 1,403 - 3,847 37,607 20,139 - - -

323 - 45,463 - 2,646 - 62,287 - - 1,270 - 74,340 - - - - - - - - - 303,029 - 76,500

1,726$ 1,270$ 54,420$ 124,636$ 22,784$ 303,029$ 62,563$ 76,500$

- - - - - - - -

-$ -$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

-$ -$ -$ -$ -$ -$ -$ -$

1,726$ 1,270$ 54,420$ 124,636$ 22,784$ 303,029$ 62,563$ 76,500$

45

393 397 410 414Data Texas Advanced State TexasControl Successful Placement Textbook ReadingCodes Schools Prog. Incentives Fund Initiative

ASSETS1110 Cash and Cash Equivalents 10,668$ 53,242$ 691,700$ 4$ 1220 Property Taxes - Delinquent - - - - 1230 Allowance for Uncollectible Taxes (credit) - - - - 1240 Due from Other Governments - - - - 1290 Other Receivables - - - -

1000 Total Assets 10,668$ 53,242$ 691,700$ 4$

LIABILITIES2110 Accounts Payable -$ -$ 381,783$ -$ 2160 Accrued Wages Payable - - - - 2170 Due to Other Funds - - - - 2180 Due to Other Governments - - - - 2300 Unearned Revenues - 53,242 309,917 4

2000 Total Liabilities -$ 53,242$ 691,700$ 4$


Fund Balances:3450 Restricted for Grant Restrictions 10,668$ -$ -$ -$ 3470 Restricted for Capital Acquisitions - - - - 3480 Restricted for Retirement of Debt - - - - 3545 Other Committed Fund Balances - - - - 3590 Other Assigned Fund Balance - - - -

Total Fund Equity10,668$ -$ -$ -$

4000 Total Liabilities, Deferred Inflows & Fund Balances 10,668$ 53,242$ 691,700$ 4$

46

AUGUST 31, 2014


NONMAJOR GOVERNMENTAL FUNDS

429 461 481 482 483 484 485Misc. Campus Healthy Loss

State Spec. Activity B. Bush Gates Kids Toshiba ControlRevenues Fund Texas Fund Foundation Initiative Grant Grant

24,733$ 273,212$ 34$ 456$ 44$ 30$ 2,000$ - - - - - - - - - - - - - - - - - - - - - - - - - - - -

24,733$ 273,212$ 34$ 456$ 44$ 30$ 2,000$

-$ 27,300$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - - -

24,733 - 34 456 44 30 2,000

24,733$ 27,300$ 34$ 456$ 44$ 30$ 2,000$

- - - - - - -

-$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - 245,912 - - - - - - - - - - - -

-$ 245,912$ -$ -$ -$ -$ -$

24,733$ 273,212$ 34$ 456$ 44$ 30$ 2,000$

47

EXHIBIT H-1 (Cont'd)

486 487 499 TotalData Toshiba Discover Other Local NonmajorControl America Brighter Special SpecialCodes Foundation Futures Revenue Funds Revenue Funds

ASSETS1110 Cash and Cash Equivalents 416$ 20$ 9,584$ 1,533,145$ 1220 Property Taxes - Delinquent - - - - 1230 Allowance for Uncollectible Taxes (credit) - - - - 1240 Due from Other Governments - - - 1,316,025 1290 Other Receivables - - - 325

1000 Total Assets 416$ 20$ 9,584$ 2,849,495$

LIABILITIES2110 Accounts Payable -$ -$ -$ 436,604$ 2160 Accrued Wages Payable - - - 334,983 2170 Due to Other Funds - - - 965,655 2180 Due to Other Governments - - - 75,664 2300 Unearned Revenues 416 20 - 770,425

2000 Total Liabilities 416$ 20$ -$ 2,583,331$


Fund Balances:3450 Restricted for Grant Restrictions -$ -$ -$ 10,668 3470 Restricted for Capital Acquisitions - - - - 3480 Restricted for Retirement of Debt - - - - 3545 Other Committed Fund Balances - - - 245,912 3590 Other Assigned Fund Balance - - 9,584 9,584

Total Fund Equity-$ -$ 9,584$ 266,164$

4000 Total Liabilities, Deferred Inflows & Fund Balances 416$ 20$ 9,584$ 2,849,495$

48

AUGUST 31, 2014


NONMAJOR GOVERNMENTAL FUNDS

610 616 628 Total TotalNew 2008 Nonmajor Nonmajor

Construction Construction Bonds Capital GovernmentalFund Fund Fund Project Funds Funds

3,712,268$ -$ 39$ 3,712,308$ 5,245,452$ - - - - - - - - - - - - - - 1,316,025 - - - - 325

3,712,268$ -$ 39$ 3,712,308$ 6,561,803$

200,546$ -$ -$ 200,546$ 637,150$ - - - - 334,983 - - - - 965,655 - - - - 75,664 - - - - 770,425

200,546$ -$ -$ 200,546$ 2,783,877$

- - - - -

-$ -$ -$ -$ 10,668$ 3,511,723 - 39 3,511,762 3,511,762

- - - - - - - - - 245,912 - - - - 9,584

3,511,723$ -$ 39$ 3,511,762$ 3,777,926$

3,712,268$ -$ 39$ 3,712,308$ 6,561,803$

49

EXHIBIT H-1 (Cont'd)

211 212 222 224Data ESEA I, A ESEA Title I Learn and IDEAControl Improving Part C Serve Part BCodes Basic Program Migrant America Formula

REVENUES:5700 Total Local & Intermediate Sources -$ -$ -$ -$ 5800 State Program Revenues - - - - 5900 Federal Program Revenues 9,260,099 1,949,151 - 2,534,103 5020 Total Revenues 9,260,099$ 1,949,151$ -$ 2,534,103$

EXPENDITURES:Current

0011 Instruction 3,216,145$ 520,499$ -$ 2,096,636$ 0012 Instruction Resources & Media Services 1,060,673 1,045 - - 0013 Curriculum & Staff Development 2,275,392 168,282 - 4,479 0021 Instructional Leadership 399,185 147,184 - 83,964 0023 School Leadership 101,900 7,471 - - 0031 Guidance, Counseling & Evaluation Services 601,745 265,961 - 300,424 0032 Social Work Services 3,783 808,458 - - 0033 Health Services 678,194 1,018 - 20,234 0034 Student (Pupil) Transportation - 16,293 - 26,499 0035 Food Services - - - - 0036 Co-curricular/Extracurricular Activities 1,925 - - - 0041 General Administration - - - - 0051 Plant Maintenance & Operations - 868 - - 0052 Security & Monitoring Services - 6,209 - - 0053 Data Processing Services - - - - 0061 Community Services 921,158 5,863 - 1,867

Debt Service:0071 Debt Service - Principal on Long Term Debt - - - - 0072 Debt Service - Interest on Long Term Debt - - - - 0073 Debt Service - Bond Issuance Cost & Fees - - - -

Capital Outlay0081 Facilities Acquisition and Construction - - - - 6030 Total Expenditures 9,260,099$ 1,949,151$ -$ 2,534,103$

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

OTHER FINANCING SOURCES (USES)7912 Sale of Real and Personal Property -$ -$ -$ -$ 7914 Loan Proceeds-Governmental Fund - - - - 7915 Transfer in - - - - 8911 Operating Transfer Out - - - -

7080 Total Other Financing Sources (Uses) -$ -$ -$ -$

1200 Net Change in Fund Balance -$ -$ -$ -$

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

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

50

WESLACO INDEPENDENT SCHOOL DISTRICTCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN

FUND BALANCE-NONMAJOR GOVERNMENTAL FUNDSFOR THE YEAR ENDED AUGUST 31, 2014

EXHIBIT H-2

225 233 244 255 263 272 274 289IDEA JPTA Vocational ESEA II English Medicaid OtherPart B Title II C Basic Training & Language Adm. Claiming Federal

Preschool Job Training Grant Recruiting Acquisition Program Gear - Up Grants

-$ -$ -$ -$ -$ -$ -$ -$ - - - - - - - -

62,198 - 321,149 964,225 448,741 - 129,899 60,976 62,198$ -$ 321,149$ 964,225$ 448,741$ -$ 129,899$ 60,976$

62,198$ -$ 146,817$ 877,235$ 441,303$ -$ 15,576$ 43,396$ - - - - - - - - - - 12,187 80,524 - - 87 17,580 - - 58 - 4,986 - - - - - - 3,275 - - - - - - 142,764 3,150 2,117 - 113,552 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 19,323 41 336 - 684 -

- - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - - 62,198$ -$ 321,149$ 964,225$ 448,741$ -$ 129,899$ 60,976$

-$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - - - - - -

-$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$

- - - - - - - -

-$ -$ -$ -$ -$ -$ -$ -$

51

393 397 410 414 429Data Texas Advanced State Texas OtherControl Successful Placement Textbook Reading StateCodes Schools Prog. Incentives Fund Academies Special Rev.

REVENUES:5700 Total Local & Intermediate Sources -$ -$ -$ -$ -$ 5800 State Program Revenues - - 1,015,243 - - 5900 Federal Program Revenues - - - - - 5020 Total Revenues -$ -$ 1,015,243$ -$ -$


0011 Instruction -$ -$ 1,015,243$ -$ -$ 0012 Instruction Resources & Media Services - - - - - 0013 Curriculum & Staff Development - - - - - 0021 Instructional Leadership - - - - - 0023 School Leadership - - - - - 0031 Guidance, Counseling & Evaluation Services - - - - - 0032 Social Work Services - - - - - 0033 Health Services - - - - - 0034 Student (Pupil) Transportation - - - - - 0035 Food Services - - - - - 0036 Co-curricular/Extracurricular Activities - - - - - 0041 General Administration - - - - - 0051 Plant Maintenance & Operations - - - - - 0052 Security & Monitoring Services - - - - - 0053 Data Processing Services - - - - - 0061 Community Services - - - - -

Debt Service:0071 Debt Service - Principal on Long Term Debt - - - - - 0072 Debt Service - Interest on Long Term Debt - - - - - 0073 Debt Service - Bond Issuance Cost & Fees - - - - -

Capital Outlay0081 Facilities Acquisition and Construction - - - - - 6030 Total Expenditures -$ -$ 1,015,243$ -$ -$

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

OTHER FINANCING SOURCES (USES)7912 Sale of Real and Personal Property -$ -$ -$ -$ -$ 7914 Loan Proceeds-Governmental Fund - - - - - 7915 Transfer in - - - - - 8911 Operating Transfer Out - - - - -

7080 Total Other Financing Sources (Uses) -$ -$ -$ -$ -$

1200 Net Change in Fund Balance -$ -$ -$ -$ -$

0100 Fund Balance - September 1 (Beginning) 10,668 - - - -

3000 Fund Balance - August 31, (Ending)10,668$ -$ -$ -$ -$


52

FUND BALANCE-NONMAJOR GOVERNMENTAL FUNDSCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN


461 481 482 483 484 485 486 487Campus Healthy AP Loss Toshiba DiscoverActivity B. Bush Gates Kids Incentive Control America Brighter

Fund Texas Fund Foundation Initiative Grant Grant Foundation Futures

362,248$ -$ -$ -$ -$ -$ -$ 11,980$ - - - - - - - - - - - - - - - -

362,248$ -$ -$ -$ -$ -$ -$ 11,980$

121,173$ -$ -$ -$ -$ -$ -$ 11,980$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

254,752 - - - - - - - - - - - - - - -

1,218 - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - - 377,142$ -$ -$ -$ -$ -$ -$ 11,980$

(14,894)$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - - - - - -

-$ -$ -$ -$ -$ -$ -$ -$

(14,894)$ -$ -$ -$ -$ -$ -$ -$

260,805 - - - - - - -

245,912$ -$ -$ -$ -$ -$ -$ -$

53

EXHIBIT H-2 Cont's

EXHIBIT H-2 Cont's

499 Total 610 628 Total TotalData Other Local Nonmajor New 2008 Nonmajor NonmajorControl Special Special Construction Bonds Capital GovernmentalCodes Revenue Funds Rev. Funds Fund Fund Project Funds Funds

REVENUES:5700 Total Local & Intermediate Sources -$ 374,228$ 5,349$ 39$ 5,388$ 379,616$ 5800 State Program Revenues - 1,015,243 - - - 1,015,243 5900 Federal Program Revenues - 15,730,541 - - - 15,730,541 5020 Total Revenues -$ 17,120,012$ 5,349$ 39$ 5,388$ 17,125,400$


0011 Instruction -$ 8,568,199$ -$ -$ -$ 8,568,199$ 0012 Instruction Resources & Media Services - 1,061,718 - - - 1,061,718 0013 Curriculum & Staff Development - 2,558,531 - - - 2,558,531 0021 Instructional Leadership - 635,377 - - - 635,377 0023 School Leadership - 112,646 - - - 112,646 0031 Guidance, Counseling & Evaluation Services - 1,429,712 - - - 1,429,712 0032 Social Work Services - 812,242 - - - 812,242 0033 Health Services - 699,446 - - - 699,446 0034 Student (Pupil) Transportation - 42,792 - - - 42,792 0035 Food Services - - - - - - 0036 Co-curricular/Extracurricular Activities - 256,676 - - - 256,676 0041 General Administration - - - - - - 0051 Plant Maintenance & Operations - 2,086 43,826 - 43,826 45,911 0052 Security & Monitoring Services - 6,209 - - - 6,209 0053 Data Processing Services - - - - - - 0061 Community Services 25,694 974,966 - - - 974,966

Debt Service:0071 Debt Service - Principal on Long Term Debt - - - - - - 0072 Debt Service - Interest on Long Term Debt - - - - - - 0073 Debt Service - Bond Issuance Cost & Fees - - - - - -

Capital Outlay0081 Facilities Acquisition and Construction - - 1,487,820 - 1,487,820 1,487,820 6030 Total Expenditures 25,694$ 17,160,600$ 1,531,646$ -$ 1,531,646$ 18,692,246$

1100 Excess (Deficiency) of Revenues Over (Under) (25,694)$ (40,588)$ (1,526,297)$ 39$ (1,526,258)$ (1,566,845)$ Expenditures

OTHER FINANCING SOURCES (USES)7912 Sale of Real and Personal Property -$ -$ -$ -$ -$ -$ 7914 Loan Proceeds-Governmental Fund - - - - - - 7915 Transfer in - - 1,464,000 - 1,464,000 1,464,000 8911 Operating Transfer Out - - - - - -

7080 Total Other Financing Sources (Uses) -$ -$ 1,464,000$ -$ 1,464,000$ 1,464,000$

1200 Net Change in Fund Balance (25,694)$ (40,588)$ (62,297)$ 39$ (62,258)$ (102,845)$

0100 Fund Balance - September 1 (Beginning) 35,278 306,752 3,574,020 - 3,574,020 3,880,771

3000 Fund Balance - August 31, (Ending) 9,584$ 266,164$ 3,511,723$ 39$ 3,511,762$ 3,777,926$

54

WESLACO INDEPENDENT SCHOOL DISTRICTCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN

FUND BALANCE-NONMAJOR GOVERNMENTAL FUNDSFOR THE YEAR ENDED AUGUST 31, 2014

(1) (2) (3)Assessed/Appraised

Last 10 Years Ended Value for SchoolAugust 31, Maintenance Debt Service Tax Purpose

2005 & Prior Various Various Various

2006 1.3960 0.0340 1,125,983,497

2007 1.2778 0.0640 1,200,588,005

2008 1.0107 0.0940 1,332,845,991

2009 1.0107 0.1290 1,738,022,041

2010 1.0307 0.1090 1,782,246,195

2011 1.0307 0.1090 1,802,628,745

2012 1.1397 - 1,828,879,472

2013 1.1397 - 1,860,366,711

2014 (School Year under Audit) 1.1397 - 1,891,048,258

1000 TOTALS

55

WESLACO INDEPENDENT SCHOOL DISTRICTSCHEDULE OF DELINQUENT TAXES RECEIVABLE

FISCAL YEAR ENDED AUGUST 31, 2014

Tax Rates

EXHIBIT J-1

(10) (20) (31) (32) (40) (50)Beginning Current Maintenance Interest & Sinking Entire Ending

Balance Year's Total Total Year's Balance9/1/2013 Levy Collection Collection Adjustments 8/31/2014

810,426$ -$ 65,671$ 6,828$ (24,147)$ 713,781$

178,570 - 21,746 530 (10,510) 145,784

221,216 - 29,018 1,453 (10,680) 180,065

232,499 - 31,161 2,898 (10,208) 188,232

365,063 - 64,439 8,225 (9,906) 282,493

447,553 - 86,504 9,148 (23,894) 328,007

553,201 - 133,844 12,831 (6,621) 399,904

709,541 - 206,474 - (7,327) 495,741

1,289,154 - 555,266 - (68,131) 665,758

21,200,328 19,766,065 - (129,806) 1,304,458

4,807,224$ 21,200,328$ 20,960,188$ 41,913$ (301,229)$ 4,704,222$

56

EXHIBIT J - 2

Actual Variance WithData Amount Final BudgetControl GAAP Positive orCodes Original Final Basis (Negative)

REVENUES:5700 Total Local and Intermediate Sources 757,465$ 758,465$ 742,680$ (15,785)$ 5800 State Program Revenues 60,000 60,000 62,991 2,991 5900 Federal Program Revenues 11,498,591 11,753,591 11,239,008 (514,583) 5020 Total Revenues 12,316,056 12,572,056 12,044,679 (527,377)

EXPENDITURES:0035 Food Services 11,474,984 12,505,134 11,368,789 1,136,345 0051 Plant Maintenance and Operations 841,072 868,522 703,462 165,060 6030 Total Expenditures 12,316,056 13,373,656 12,072,250 1,301,406

1100 Excess (Deficiency) of Revenues Over (Under) - (801,600) (27,571) 774,029 Expenditures OTHER FINANCING SOURCES (USES)

7912 Sale of Real and Personal Property - - - - 7080 Total Other Financing Sources (Uses) - - - -

1200 Net Change in Fund Balance - (801,600) (27,571) 774,029 0100 Fund Balance - September 1 (Beginning) 2,159,950 2,159,950 2,159,950 -

3000 Fund Balance - August 31 (Ending) 2,159,950$ 1,358,350$ 2,132,379$ 774,029$

Budgeted Amount

WESLACO INDEPENDENT SCHOOL DISTRICTBUDGETARY COMPARISON SCHEDULE

CHILD NUTRITION PROGRAMAUGUST 31, 2014

57

EXHIBIT J-3

Actual Variance WithData Amount Final BudgetControl GAAP Positive orCodes Original Final Basis (Negative)

REVENUES:5700 Total Local and Intermediate Sources 79,776$ 79,776$ 94,979$ 15,203$ 5800 State Program Revenues 98,297 98,297 90,976 (7,321) 5020 Total Revenues 178,073 178,073 185,955 7,882

EXPENDITURES:0071 Debt Service - Principal and Long-Term Debt 3,315,000 3,315,000 3,315,000 - 0072 Debt Service - Interest on Long-Term Debt 2,981,603 2,981,603 2,981,603 - 0073 Debt Service - Bond Issuance Cost and Fees 5,000 5,000 1,338 3,663 6030 Total Expenditures 6,301,603 6,301,603 6,297,940 3,663

1100 Excess (Deficiency) of Revenues Over (Under) (6,123,530) (6,123,530) (6,111,985) 11,544 Expenditures OTHER FINANCING SOURCES (USES)

7915 Operating Transfer In 6,200,000 6,200,000 6,200,000 -

7080 Total Other Financing Sources (Uses) 6,200,000 6,200,000 6,200,000 -

1200 Net Change in Fund Balances 76,470 76,470 88,015 11,544 0100 Fund Balance - September 1 (Beginning) 273,431 273,431 273,431 - 1300 Prior Period Adjustment - - 1,138,275 -

3000 Fund Balance - August 31 (Ending) 349,901$ 349,901$ 1,499,721$ 11,544$

Budgeted Amount

WESLACO INDEPENDENT SCHOOL DISTRICTBUDGETARY COMPARISON SCHEDULE

DEBT SERVICE FUNDAUGUST 31, 2014

58

63

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


I. Summary of the Auditor's Results:

A. The type of report issued: Unmodified opinion.

B. Internal control over financial statements:

Material Weakness(es) indentified? No

Significant Deficiency(ies) identified which

were not considered material weaknesses? No

C. Noncompliance material to the financial statements noted? No

D. Federal Awards: Type of Report on Compliance with

major programs. Unmodified opinion

E. Internal control over Major Programs:

Material Weakness(es) identified? No

Significant Deficiency(ies) identified which

were not considered material weaknesses? No

F. Findings & Questioned Costs for Federal Awards as

defined under Section ___.510(a). OMB Circular 133 No

F. Dollar threshold used to distinguish between Type A

and Type B programs. $809,086

G. Auditee qualified as a low-risk auditee? Yes

H. Major Federal Program(s) ESEA, Title I, Part A - Improving Basic

Programs

II. Findings Relating to the Financial Statements Which Are Required To Be Reported in Accordance with

Generally Accepted Government Auditing Standards.

None

III. Findings and Questioned Costs for Federal Awards Including Audit Findings as Described in I.E. Above

None

65

WESLACO INDEPENDENT SCHOOL DISTRICT SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS


2013-01 Required Documentation Condition: Compliance testing revealed that the District does not retain the I-9 documentation in

accordance with federal guidelines and requirements. Status: Corrected

EXHIBIT K-1

(1) (2) (3) (4)

FEDERAL GRANTOR/ FEDERAL PASS-THROUGHPASS-THROUGH GRANTOR/ CFDA ENTITY IDENTIFYING FEDERALPROGRAM OR CLUSTER TITLE NUMBER NUMBER EXPENDITURES

US DEPARTMENT OF EDUCATION Passed Through Region One Service Center Gear-Up 84.334A P-334A110180 129,899$ Total Passed Through Region One Service Center 129,899$

Passed Through South Texas College Career and Technical Education-Basic Grants 84.048 14420206 21,539$ Total Passed Through South Texas College 21,539$

Passed Through State Department of Education ESEA Title I Part A - Improving Basic Programs 84.010A 15610101108913 718,135$ ESEA Title I Part A - Improving Basic Programs 84.010A 14610101108913 8,487,977$ ESEA Title I Part D, Subpart 2-Del 84.010A 14610103108913 41,078$ ESEA Title I 1003 (A), Priority and Focus School Grant 84.010A 14610112108913006 12,909$ Total CFDA Number 84.010A 9,260,099$

ESEA Title I Part C - Migratory Children 84.011 15615001108913 156,640$ ESEA Title I Part C - Migratory Children 84.011 14615001108913 1,792,511$ Total CFDA Number 84.011 1,949,151$

IDEA - Part B, Formula 84.027 156600011089136000 130,461$ IDEA - Part B, Formula 84.027 146600011089136000 2,403,642$ Total CFDA Number 84.027 2,534,103$

Vocational Education - Basic Grant 84.048 15420006108913 32,129$ Vocational Education - Basic Grant 84.048 14420006108913 267,481$ Total CFDA Number 84.048 299,610$

IDEA - Part B, Preschool 84.173 156610011089136610 1,403$ IDEA - Part B, Preschool 84.173 146610011089136610 60,795$ Total CFDA Number 84.173 62,198$

WESLACO INDEPENDENT SCHOOL DISTRICTSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


66

EXHIBIT K-1

(1) (2) (3) (4)

FEDERAL GRANTOR/ FEDERAL PASS-THROUGHPASS-THROUGH GRANTOR/ CFDA ENTITY IDENTIFYING FEDERALPROGRAM OR CLUSTER TITLE NUMBER NUMBER EXPENDITURES

ESEA Title II, Part A 84.367A 15694501108913 37,607$ ESEA Title II, Part A 84.367A 14694501108913 926,617$ Total CFDA Number 84.367A 964,225$

English Lang. Acquisitions and Lang. Enhancement 84.365A 14671001108913 20,139$ English Lang. Acquisitions and Lang. Enhancement 84.365A 13671001108913 428,603$ Total CFDA Number 84.365A 448,741$

Summer School LEP 84.369A 69551202 60,976$ Total CFDA Number 84.369A 60,976$

Total Passed Through State Department of Education 15,579,103$ TOTAL DEPARTMENT OF EDUCATION 15,730,541$

US DEPARTMENT OF AGRICULTURE Passed Through State Department of Education *National School Breakfast & Lunch Program 10.553 10,761,460$ Food Distribution 10.550 477,548$ Total Passed Through State Department of Education 11,239,008$

TOTAL DEPARTMENT OF AGRICULTURE 11,239,008$

TOTAL EXPENDITURES OF FEDERAL AWARDS 26,969,549$

* NOTE: Clustered Programs

WESLACO INDEPENDENT SCHOOL DISTRICTSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


67

EXHIBIT K-2

DataControlCodes Responses

SF2 Were there any disclosures in the Annual Financial Report and/orother sources of information concerning default on bondedindebtedness obligations? No

SF4 Did the District receive a clean audit? - Was there an unqualifiedopinion in the Annual Financial Report? Yes

SF5 Did the Annual Financial Report disclose any instances of materialweaknesses in Internal Control? No

SF9 Was there any disclosure in the Annual Financial Report of materialnoncompliance? No

SF10 What was the total accumulated accretion on capital appreciationbonds included in the government-wide financial statements atfiscal year-end? None

WESLACO INDEPENDENT SCHOOL DISTRICTSCHEDULE OF REQUIRED RESPONSES TO SELECTED SCHOOL FIRST INDICATORS

AS OF AUGUST 31, 2014

68

1.

2.

3.

Compliance Statement - Provisional 6/97.

WESLACO INDEPENDENT SCHOOL DISTRICTNOTES ON ACCOUNTING POLICIES FOR FEDERAL AWARDS


susceptible to accrual, i.e., both measurable and available, and expenditures in the accounting period in which

Governmental Fund Type. With this measurement focus, only current assets and current liabilities and

For all Federal programs, the District used the fund types specified in Texas Education Agency's Financial

the fund liability is incurred, if measurable, except for unmatured interest on General Long-Term Debt, which is

Accountability System Resource Guide. Special revenue funds are used to account for resources restricted to, or designated for, specific purposes by a grantor. Federal and state financial assistance generally is accounted for in a Special Revenue Fund Fund.

and Agency Funds. This basis of accounting recognizes revenues in the accounting period in which they become The modified accrual basis of accounting is used for the Governmental Fund Types, the Expendable Trust Funds,

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental Fund Types and Expendable Trust Funds are accounted for using a current financial resources measurement focus. All Federal grant funds were accounted for in a Special Revenue Fund which is a

before the ending date of the federal project period extended 30 days beyond the federal project period ending date, in accordance with provisions in Section H, Period of Availability of Federal Funds, Part3, OMB Circular A-133

the fund balance are included on the balance sheet. Operating statements of these funds present increases and decrease in net current assets.

The period of availability for federal grant funds for the purpose of liquidation of outstanding obligations made on or

recognized when due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources.

Federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and accordingly, when such funds are received, they are recorded as deferred revenues until earned.

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