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[3. Call Meeting to Order]
TO WELCOME EVERYONE AGAIN.TODAY'S DATE IS JANUARY THE 19TH, 2023.
THIS IS A CALL MEETING BEING HELD AT 6:00 PM AT THE LANCASTER IS D A ADMINISTRATION BOARDROOM, BOARD AUDITORIUM AT 4 22 SOUTH CENTER AVENUE, LANCASTER, TEXAS, 75,146.
THIS MEETING IS BEING, THIS MEETING HAS BEEN POSTED IN ACCORDANCE WITH THE TEXAS OPENING MEETING ACT.
I WILL NOW CALL ROLL TO SARAH QUO.
MS. MORRIS, PRESENT MR. SMITH HERE, MYSELF PRESENT A QUORUM.
HEY, AS WE MOVE ON TO OUR AGENDA, DR.
PERRA, WERE THERE ANY CITIZENS COMMUNICATIONS? NO, MA'AM.
[6. Discussion and possible approval of the 2021- 2022 Financial Audit - CDA(LEGAL) and CAA(LOCAL) - (G2) Presenters: David Garrison, Dana Mosley, and Whitley Penn Certified Public Accountants]
DISCUSSION AND POSSIBLE APPROVAL OF THE 20 21, 20 22 FINANCIAL AUDIT.UM, I'LL CALL FORWARD, UM, OUR WILLY PEN REPRESENTATIVES AND, UH, MS. DANA MOSLEY.
GOOD EVENING, BOARD OF TRUSTEES, UM, BOARD PRESIDENT AND DR.
WE HAVE SELENA WITH US HERE TODAY TO PRESENT OUR ANNUAL FINANCIAL REPORT FROM WHITLEY PEN.
PRESIDENT HAMILTON, MEMBERS OF THE BOARD, AND DR.
UM, YOU ALL CAN HEAR ME? OKAY.
I HAVE A PREPARED PRESENTATION.
I CAN GO THROUGH THAT OR ADDRESS ANY OF THE QUESTIONS.
I KNOW, UH, MR. STEVENSON, YOU, YOU, YOU'LL GO GET THERE.
WE ARE HERE TO PRE, I AM HERE TO PRESENT THE RESULTS OF THE FINANCIAL STATEMENT AND SINGLE AUDITS, UH, FOR FISCAL YEAR 2022.
AND THE FIRST NOTE I WANNA MAKE, IF YOU COMPARE, UH, IF YOU COMPARE, UH, LAST YEAR'S, UH, OPINION TO THIS YEAR, YOU'LL NOTICE THAT OUR OPINION IS, IS LISTED ON THE FIRST PARAGRAPH.
THAT WAS A CHANGE IN AUDITING STANDARDS.
AND YOU'LL SEE THAT LISTED VERSUS IT BEING LISTED IN THE SECOND OR THIRD PAGE.
AND AS A REMINDER, THE AUDIT IS NOT, DOES NOT PROVIDE AN ASSESSMENT OF A DISTRICT OR AN ENTITY'S WELLBEING, BUT IT DOES TELL YOU, OKAY, THOSE, THE FINANCIAL STATEMENTS, THE BASIC FINANCIAL STATEMENTS CAN BE USED FOR THE RATING AGENCIES, ET CETERA.
WE PROVIDE REASONABLE ASSURANCE.
AND THEN OUR GOAL IS TO, NOT GOAL, BUT OUR WHOLE PURPOSE IS TO ENSURE THAT THE FINANCIAL STATEMENTS ARE MATERIALLY STATED, UH, FOR THE USERS OF THE FINANCIAL STATEMENTS.
WE STARTED OUR AUDIT WITH THE PLANNING PROCESS THAT STARTED IN THE SUMMER.
WE W MOVED ON INTO IDENTIFYING, UH, THE KEY CONTROLS AND TESTING THOSE CONTROLS IN VARIOUS AREAS.
AND WE'LL SEE THAT HERE IN A BIT.
WE TESTED THOSE CONTROLS, NOT ONLY CONTROLS, BUT ALSO COMPLIANCE, UH, OVER STATE REQUIREMENTS, AS WELL AS FEDERAL REQUIREMENTS FOR THE FEDERAL PROGRAMS. WE SELECTED, UH, AS MAJOR AFTER THE DISTRICT CLOSED ITS BOOKS AS OF AUGUST 31ST, 2022.
WE CAME BACK IN THE FALL, OCTOBER, NOVEMBER TIMEFRAME AND PERF PERFORMED OUR SUBSTANTIVE TESTING, WHICH IS LOOKING AT ALL OF THE TRANSACTIONS USING TEAMMATE ANALYTICS, WHICH IS OUR DATA ANALYTICS TOOL, CORROBORATING INFORMATION.
AND THE MOST IMPORTANT IS CONFIRMING WITH THIRD PARTIES, WHETHER WE SENT OUT CONFIRMATIONS OR USING THET PAYMENT REPORT.
AND THAT'S THE BEAUTY OF A SCHOOL DISTRICT, IS THAT WE HAVE THE TE AUDIT REPORT AT OUR DISPOSAL TO VERIFY WHAT HAS BEEN RECORDED IN YOUR BOOKS.
THE AND, AND THE WHOLE PURPOSE OF THIS IS TO ISSUE AN OPINION, UM, ON YOUR FINANCIAL STATEMENTS AND ON YOUR FEDERAL COMPLIANCE.
ANY ENTITY CAN RECEIVE THREE OPINIONS.
YOU CAN EITHER EARN AN UNMODIFIED QUALIFIED OR DISCLAIMER, AND THEY WORSEN AS YOU MOVE FROM RIGHT TO LEFT.
SO EVERYONE, EVERY ENTITY WANTS TO EARN AN UNMODIFIED OPINION.
AND I WILL SAY THAT I USE THE WORD EARN SERIOUSLY, BECAUSE EVEN THOUGH YOU'VE MAY HAVE RECEIVED UNMODIFIED OR CLEAN OPINIONS FROM EITHER OUR FIRM OR PREVIOUS FIRMS, IT IS A PROCESS TO GET HERE.
SO IT DOES TAKE A LOT OF WORK ON BEHALF OF YOUR MANAGEMENT TEAM TO GET TO THIS POINT.
UM, SO KUDOS AGAIN TO YOUR TEAM FOR EARNING AN UNMODIFIED OPINION BECAUSE YOU DO SPEND MORE THAN $750,000 IN FEDERAL FUNDS.
IN FACT, YOU SPENT 20 MILLION WE'RE REQUIRED TO ADD AN ADDITIONAL LAYER OF AUDITING STANDARDS CALLED THE GOVERNMENT AUDITING STANDARDS.
UH, IN ADDITION TO THE REGULAR GENERALLY ACCEPTED STANDARDS THAT WE FOLLOW AS PART OF GOVERNMENT AUDITING STANDARDS, WE HAVE TO ISSUE A SEPARATE REPORT, WHICH IS IN THE BACK OF YOUR REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING.
AND IF YOU HAD ANY MATERIAL WEAKNESSES OR SIGNIFICANT DEFICIENCIES, THOSE WOULD REPORT BE REPORTED.
BUT I'M PLEASED TO REPORT THERE ARE NONE.
IN ADDITION TO THE INTERNAL CONTROLS OR FINANCIAL REPORTING, WE'RE ALSO LOOKING AT STATE COMPLIANCE ITEMS, WHICH COULD BE THE PUBLIC FUND'S INVESTMENT ACT PROCUREMENT.
UM, AND EVEN WITH YOUR BILINGUAL ED STATE COMPED SPENDING,
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YOU'LL SEE THIS YEAR THERE'S A NEW SCHEDULE CALLED THE J FOUR, WHERE TE WANTS TO KNOW, WHAT WAS YOUR ALLOTMENT? THEY HAVE THAT INFORMATION, RIGHT, BUT IT'S, THEY WANT IT PLACED IN THE REPORT.DID YOU SPEND THE REQUIRED PERCENTAGE? UM, AND THAT WAY THEY CAN DO THEIR EVALUATION, UH, FOR THAT PROGRAM.
AND, AND THE CRUX OF IT IS, DO YOU HAVE POLICIES AND PROCEDURES FOR BILINGUAL ED STUDENTS THAT QUALIFY FOR BILINGUAL ED AND ALSO WHO ARE AT RISK UNDER THE STATE COMPED PROGRAM? AS I INDICATED EARLIER, YOU DID SPEND 20 MILLION IN FEDERAL FUNDING.
THIS YEAR, WE SELECTED FOUR MAJOR PROGRAMS, AND EVERY YEAR THEY ROTATE.
BUT WHAT WE DON'T HAVE A CHOICE FOR ARE THE BIG PROGRAMS. SO THE BIG PROGRAMS WILL ALWAYS BE TITLE ONE, YOUR SPECIAL EDUCATION CLUSTER, IDEA B, UH, AND CHILD NUTRITION.
THIS YEAR, TITLE ONE, PART A WAS SELECTED, UM, SR TWO AND SR THREE, UH, SPECIAL EDUCATION CHILD NUTRITION WERE PREVIOUSLY AUDITED.
SO EVERY THIRD YEAR, THE BIG ONES HAVE TO BE PICKED UP.
SR TWO AND SR THREE, BECAUSE OF THE SIZE FOR ALL ENTITIES ACROSS THE US AND THE OFFICE OF MANAGEMENT AND BUDGET HAS INDICATED THAT THE, THIS, UM, PROGRAM IS CONSIDERED HIGH RISK AND WE DON'T HAVE A CHOICE BUT TO AUDIT IT.
THE SECOND ONE THAT HAS BEEN, UM, REQUIRED FOR US TO AUDIT IS THE EMERGENCY CONNECTIVITY FUND, WHICH IS FOR TECHNOLOGY.
AND THAT COMES FROM, UM, THE FEDERAL COMMUNICATIONS COMMISSION AND THE FCC.
AND SO THAT ONE IS ALSO REQUIRED TO BE AUDITED.
THE FOURTH ONE IS THE SCHOOL HEALTH SUPPORT GRANT.
AND THAT WAS NEW IN THE, UH, TOWARDS THE END OF 2022, UH, T AND THE, THE DEPARTMENT, TEXAS DEPARTMENT OF HEALTH AND HUMAN SERVICES RELEASED A NEW GRANT, WHICH, UM, ASSISTED DISTRICTS WITH KEEPING, UH, CHILDREN CLEAN THEIR, THEIR ENVIRONMENT CLEAN AS WELL, WHICH WAS A SMALLER, UH, GRANT COMPARED TO THE ESSER.
BUT NONETHELESS, IT WAS ALSO A COVID RELATED, UM, GRANT, PART OF THE INTERNAL CONTROLS I MENTIONED.
SO WE'RE LOOKING AT HUMAN RESOURCES, PAYROLL, PURCHASING, AND ACCOUNTS PAYABLE, NOT JUST FOR YOUR NORMAL FINANCIAL STATEMENTS, BUT ALSO FOR YOUR FEDERAL PROGRAMS. WE ALSO EVALUATE IN INFORMATION TECHNOLOGY, WE LOOK AT ACCESS RIGHTS, AND WE WE'RE AWARE AND COGNIZANT THAT INFORMATION TECHNOLOGY FEEDS ALL OF THESE LARGE AREAS, BUT WE DO SPEND A LOT OF TIME IN THOSE BIG FOUR AREAS THAT ARE LISTED HERE.
WE ALSO LOOK AT PMS WITH AN ATTENDANCE FOCUS.
SO WE'RE LOOKING AT CHANGES IN ATTENDANCE TO SEE IF THERE'S ANY PATTERNS WHERE CHILDREN ARE CHANGED FROM ABSENT TO PRESENT FOR THE ATTENDANCE PERIOD, KNOWING THAT YOU GET YOUR FUNDING BASED ON AVERAGE DAILY ATTENDANCE.
THAT TEST WILL ALSO HELP DISTRICTS BECAUSE PERHAPS THERE'S A BREAKDOWN IN CONTROLS WHERE YOU MIGHT SAY, WELL, MAYBE WE'RE, WE'RE SHORTING THE DISTRICT AND MAYBE INTERNAL CONTROLS WOULD HELP US INCREASE AVERAGE DAILY ATTENDANCE.
BUT THAT, THAT TEST, UH, ASSIST US AND YOU ALL AS WELL TO MAKE SURE THAT AVERAGE DAILY ATTENDANCE, UM, IS PROPERLY STATED, UH, AT LEAST THE PROCESS.
FINALLY, ON, ON ATTENDANCE, WE DO CONFIRM WHAT TE UM, THROUGH TE FOR, FOR THE FOUNDATION SCHOOL PROGRAM.
AND THEN FINALLY, WE LOOK AT THE FEDERAL PROGRAMS. THE OFFICE OF MANAGEMENT AND BUDGET GIVES US SIX REQUIREMENTS THAT WE HAVE TO TEST, AND THOSE CHANGE EVERY YEAR.
UM, BUT FOR SURE WE'RE GONNA LOOK AT IF THERE IS A SIGNIFICANT AMOUNT OF, OF PAYROLL, WE'RE GOING TO TEST PAYROLL, AS WELL AS THOSE PAYMENTS BEING MADE TO YOUR VENDORS.
THESE ARE, UH, THIS IS JUST A SUMMARY OF WHAT WE PERFORMED.
SO WE DO A GENERAL PAYROLL AND NON-PAY TEST.
SO ANY FUNDING THAT GOES OUT OF THE DISTRICT, WE ARE GOING TO TEST THAT.
AND AGAIN, WE USE TEAMMATE ANALYTICS.
WE, WE, UM, INCLUDE THE A HUNDRED PERCENT OF THE POPULATION AND IT IDENTIFIES RISKY TRANSACTIONS.
IT DOES THAT ALSO FOR THE FEDERAL SIDE AS WELL.
AND THEN WE SELECT RANDOM SAMPLES AS WELL.
ON THE PROCUREMENT SIDE, WE'RE LOOKING AT BOTH STATE AND FEDERAL REQUIREMENTS.
AND THEN THE NEW TESTS THAT WE PERFORMED, AS I MENTIONED EARLIER, IS LOOKING AT THE POLICIES AND PROCEDURES OVER YOUR BILINGUAL ED AND COMPED PROGRAMS. AND WE ALWAYS LOOK AT YOUR CAMPUS IMPROVEMENT FUNDS AND THEN YOUR SPENDING, YOUR STATE ALLOTMENT SPENDING GOING BACK TO YOUR FEDERAL AWARDS.
YOU ARE RECEIVING AN UNMODIFIED OPINION OVER THOSE FOUR FEDERAL PROGRAMS WITH NO INTERNAL CONTROL FINDINGS, UM, OR COMPLIANCE ISSUES.
ANY QUESTIONS BEFORE WE MOVE INTO THE FINANCIALS? OKAY.
SO IN YOUR, IN YOUR BOOKLETS, AND I, I KNOW THE PDF YOU HAD THE, THE PDF AS WELL.
UH, BUT THE ONES IN FRONT OF YOU, THERE'S TWO SETS OF FINANCIAL STATEMENTS, THE GOVERNMENT-WIDE FINANCIAL STATEMENTS, AND THEN THE FUND FINANCIAL STATEMENTS.
THE FIRST SET, WHICH IS A ONE AND B ONE, MIMIC THAT OF A CORPORATION.
SO IT, IT SHOWS EVERYTHING THAT THE DISTRICT OWNS AND EVERYTHING
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THAT THE DISTRICT OWES.AND THEN IT PROVIDES A NET WORTH OF THE DISTRICT.
YOU'LL NOTICE ITEMS LIKE YOUR BONDS OR LONG-TERM LIABILITIES, AS WELL AS CAPITAL ASSETS, WHICH YOU DON'T SEE IN YOUR GENERAL FUND.
SO IF YOU LOOK AT WHEN YOU PASS YOUR BUDGET FOR THE GENERAL FUND, YOU'RE MAYBE LOOKING AT CAPITAL OUTLAY, BUT YOU'RE NOT NECESSARILY LOOKING AT DEPRECIATION EXPENSE OR EVEN LOOKING AT, UH, BONDS PAYABLE IN THE GENERAL FUND.
AND THE REASON FOR THAT IS THAT THE FOCUS OF THE GOVERNMENT-WIDE FINANCIAL STATEMENTS IS, IS AN ECONOMICS, UH, RESOURCES FOCUS, MEANING IT'S LONG-TERM.
THE GENERAL FUND IS WHAT CURRENT RESOURCES DO YOU HAVE TO PAY THOSE CURRENT LIABILITIES.
SO OVERALL, YOUR NET POSITION IS 6 MILLION LAST YEAR.
UH, THAT NET POSITION WAS A NEGATIVE, UH, 5 MILLION OR A DEFICIT.
AND WE'LL GO THROUGH, WE'LL GO THROUGH THAT HERE IN A BIT.
THE MAIN REASON IS BECAUSE YOUR NET PENSION LIABILITY WENT DOWN BY MORE THAN HALF.
UM, AND THAT'S ACROSS THE STATE.
THE PENSION LIABILITY AT THE STATE LEVEL DECREASED, AND THEN YOUR PROPORTIONATE SHARE BASED ON YOUR CONTRIBUTIONS.
UM, ALSO DECRE, UH, CRE CAUSED THAT TO DECREASE, UM, ON YOUR FINANCIAL STATEMENTS.
THIS IS A BREAKDOWN OF YOUR ASSETS AND LIABILITIES, AND YOU'LL SEE YOUR CURRENT AND OTHER ASSETS DECREASED SLIGHTLY BY A MILLION DOLLARS.
AND YOUR CAPITAL ASSETS DUE TO DEPRECIATION ALSO DECREASED.
AND THEN YOU HAVE YOUR DEFERRED OUTFLOWS AND THEN INFLOWS.
THEY'RE QUASI AND LIABILITIES, BUT THOSE HAVE TO DO WITH YOUR, UH, PENSION AND OPEB, UH, ITEMS ON YOUR FINANCIAL STATEMENTS.
AND THEN FINALLY, YOU HAVE YOUR LONG-TERM LIABILITIES, WHICH MAKE UP THE BULK OF YOUR LIABILITIES AT 218 MILLION, A DECREASE FROM 239 MILLION.
AND THEN HERE AGAIN, YOU SEE THE $6 MILLION POSITIVE IN THE BLACK NET POSITION VERSUS THE DEFICIT.
AGAIN, YOU DON'T HAVE ANY CONTROL OVER THE NET PENSION LIABILITY OR THE NET OPEB LIABILITY.
SO I INCLUDED THIS SLIDE JUST AS A REMINDER, BECAUSE THERE ARE CLIENTS THAT GET A LITTLE BIT NERVOUS THINKING THAT THEY HAVE TO ISSUE A CHECK FOR THIS LIABILITY.
AND ON, ON YOUR, UM, THIS YEAR, YOUR PENSION LIABILITY WAS 9 MILLION.
THE OPEB LIABILITY, WHICH IS YOUR OTHER POST-EMPLOYMENT BENEFITS, THAT YOUR HEALTHCARE COSTS FOR RETIREES WAS 21 MILLION, AND THAT, UH, WENT DOWN TO $19 MILLION.
SO THE 9 MILLION AND THE $19 MILLION DO NOT REPRESENT A LIABILITY SIMILAR TO ACCOUNTS PAYABLE OR TO A BONDS PAYABLE.
AGAIN, YOUR PROPORTIONATE SHARE IS DETERMINED BASED ON YOUR CONTRIBUTIONS IN RELATION TO ALL THE CONTRIBUTIONS OF THE PARTICIPANTS IN TRS.
SO ALL 1000, YOU KNOW, 30 SCHOOL DISTRICTS AND CHARTER SCHOOLS, PLUS UNIVERSITIES, PLUS, UH, COMMUNITY COLLEGES.
AND THEN YOUR SHARE IS DETERMINED.
IF TS WERE TO FILL, THEN EVERYONE WOULD BE IN THE SAME BOAT, BUT TS IS IS WELL FUNDED.
WHAT YOU DO HAVE CONTROL OVER AS FAR AS BUDGET-WISE IS TO PAY INTO TS AT THE STATUTORILY DETERMINED RATES.
SO TS HAS A WAY TO LOWER THESE LIABILITIES.
THEY CAN EITHER INCREASE THE RATE TO THE DISTRICTS, TO THE EMPLOYERS, THE EMPLOYEES, EXCUSE ME, BOTH OR CHANGE THE BENEFITS.
SO I JUST WANTED TO MAKE SURE THAT THAT WAS CLEAR WHEN YOU SEE THESE LARGE, UH, LIABILITIES TO THE TUNE OF ALMOST 30 MILLION, THAT THAT DOES NOT REPRESENT A CASH LIABILITY ON YOUR GENERAL FUND REVENUES.
SO NOW WE'RE GOING INTO THE CURRENT, UH, RESOURCES FOCUS WHERE THIS IS BASED ON CASH COLLECTIONS AND ANYTHING THAT WAS RECEIVED 60 DAYS AFTER, UH, YEAR END, AUGUST 31ST.
AND THE, THE PRIMARY ONE BEING PROPERTY TAXES.
PROPERTY TAXES MAKES UP 51% OF, OF YOUR TOTAL 72 MILLION, UM, AT 37 MILLION STATE AID, WHICH INCLUDES PER CAPITA AND YOUR FOUNDATION SCHOOL PROGRAM.
AGAIN, ALL A PRODUCT OF AVERAGE DAILY ATTENDANCE.
REMEMBER, THERE'S ALWAYS AN INVERSE RELATIONSHIP BETWEEN PROPERTY TAXES AND STATE AID.
UH, AND, AND SO IT'S, IT'S ALWAYS IMPORTANT TO, TO NOTE THAT 28 MILLION WAS THE TOTAL FOR, FOR STATE AID.
TS ON BEHALF TOTALED 3 MILLION.
THAT REC, THAT YOU RECEIPT TS ON BEHALF IS JUST THAT THE STATE IS SAYING WE HAVE CONTRIBUTED 3 MILLION ON BEHALF OF THE EMPLOYEES OF THE DISTRICT, AND THE DISTRICT HAS TO RECOGNIZE THAT THERE'S AN OFFSETTING EXPENDITURE OF 3 MILLION AS WELL ON THE NEXT SLIDE INCLUDED IN THERE.
AND IT'S DISTRIBUTED BY FUNCTION IN TOTAL THAT, THAT TS ON BEHALF REVENUE AND EXPENDITURE NET TO ZERO.
BUT AGAIN, WE HAVE TO REPORT IT BECAUSE IT IS INCLUDED IN YOUR TOTAL REVENUES IN THE GENERAL FUND.
FINALLY, YOU HAVE YOUR FEDERAL REVENUES AT A MILLION DOLLARS, AND THEN YOU HAVE OTHER LOCAL AND STATE REVENUE INCLUDED AT 3 MILLION
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AS WELL.ON THE EXPENDITURE SIDE, YOU'LL SEE THAT 53% OR $37 MILLION MAKES UP, UM, IS MADE UP OF INSTRUCTION AND RELATED SERVICES.
AND THEN YOU HAVE FACILITIES MAINTENANCE AND OPERATIONS AT 10 MILLION.
AND THEN INSTRUCTIONAL SCHOOL LEADERSHIP AT 5 MILLION.
SO 14% IS THE YELLOW, UH, PIECE OF THE PIE.
AND THEN THE PURPLE AT 7% FOR INSTRUCTIONAL AND SCHOOL LEADERSHIP GENERAL ADMINISTRATION IS AT, UH, 5 MILLION OR UH, 7%.
UM, AGAIN, T E A LOOKS AT IT IN THE AGGREGATE.
THEY LOOK AT FUNCTION 21 AS WELL, AND THEY MAKE SURE THAT IT'S BELOW THE 8%, SO YOU'RE STILL BELOW THE 8%, UM, AS WELL.
AND THEN YOU HAVE YOUR STUDENT SUPPORT SERVICES, WHICH INCLUDES TRANSPORTATION, ET CETERA, AT $9 MILLION.
YOUR EXPENDITURES BY OBJECT ARE ALSO IMPORTANT.
UM, I THINK IT'S GREAT TO SEE THAT ALMOST 80% OF YOUR EXPENDITURES OF THE 70 MILLION GOES TOWARDS PAYROLL OR 55 MILLION.
AND THEN YOU HAVE YOUR CONTRACTED SERVICES AT 7 MILLION OR 10%.
AND THEN YOU CAN SEE THE, THE REMAINING, UM, TRANCHES OF, OF OBJECT CODES HERE, BUT THE BULK OF IT, 80% AND THEN CONTRACTED SERVICES.
UM, IT, UH, MAKES UP THE, THE BULK OF YOUR EXPENDITURES.
IF WE LOOK AT THE GENERAL FUND BUDGET TO ACTUAL, YOUR ACTUAL REVENUES OF 72 MILLION, UH, CAME UNDER BUDGET BY 2 MILLION, BUT YOUR EXPENDITURES OF 70 MILLION CAME UNDER BUDGET BY $7 MILLION.
SO THAT'S ALWAYS GOOD, UH, TO COME UNDER BUDGET, UH, FOR STATE COMPLIANCE PURPOSES.
AND, AND, AND FOR YOUR, YOUR FIDUCIARY DUTIES AS WELL.
YOUR FUND BALANCE INCREASED BY $300,000 AFTER THE TRANSFER OF $1.8 MILLION.
SO REALLY IT INCREASED BY 2.1, BUT YOU TRANSFERRED 1.8 INTO YOUR CAPITAL PROJECTS FUND, AND THAT WAS INTENTIONAL.
YOUR FUND BALANCE AS OF AUGUST 31ST, 22 WAS 37 MILLION.
AND THEN WE LIKE TO BREAK UP THE COMPONENTS OF FUND BALANCE BECAUSE T LOOKS AT THE UNASSIGNED FUND BALANCE TO CAL FOR FIRST PUR, UH, FIRST RATING PURPOSES, YOUR NONS SPENDABLE AS JUST THAT IT'S FOR INVENTORIES AND PREPAIDS.
YOU CAN'T, IT CAN'T BE CONVERTED TO CASH, THEREFORE IT CAN'T BE SPENT.
AND THEN YOU HAVE YOUR RESTRICTED FUND BALANCE AS WELL.
THE BULK OF THAT IS THE QS A, YOU HAVE A BOND WHERE YOU'RE BUILDING UP THOSE RESERVES AND YOU'RE GOING TO PAY THAT AT A LATER DATE.
THAT IS A SEPARATE ESCROW ACCOUNT THAT YOU HAVE ON YOUR BOOKS, A LITTLE OVER $3 MILLION.
SO THEN YOU'RE LEFT WITH UNASSIGNED FUND BALANCE, WHICH TOTALED 33 MILLION, AND THAT IS EVALUATED, UM, IN COMPARISON OR COMPARED TO EXPENDITURES IN THE GENERAL FUND.
SO IF WE KNOW THAT YOU SPENT 70 MILLION IN FISCAL YEAR 2022, AND IF YOU CONTINUE TO SPEND AT THAT RATE GOING FORWARD 2023, AND AFTER THAT FUND BALANCE REPRESENTS 47% OF THOSE EXPENDITURES, OR 172 DAYS, I ALSO LIKE TO SEE IT AS IF ALL REVENUES WERE TO CEASE, HOW LONG WOULD THAT FUND BALANCE THE 33 MILLION LAST? AND THAT WOULD EQUATE TO 172 UH, DAYS.
BUT I ALSO LIKE TO LOOK AT WHAT IS THE DANGER ZONE.
SO 30 DAYS WOULD EQUATE TO 5.8 MILLION FOR THE DISTRICT.
THE OPTIMAL AMOUNT IS 90 DAYS.
AT 17.3 MILLION, YOU HAVE 172 DAYS.
BUT I JUST, I, I JUST FINISHED ANOTHER BOARD MEETING YESTERDAY WHERE THEY SAID, YOU KNOW, WE REALLY NEED 120 DAYS BECAUSE OF THAT LAG.
IN PROPERTY TAXES, YOU HAVE A WHOLE SEPTEMBER THROUGH MAYBE DECEMBER, WHERE YOU DON'T HAVE PROPERTY TAXES COMING IN, AND IT'S NOT UNTIL JANUARY THAT YOU START COLLECTING THE BULK OF IT.
SO YOU NEED THOSE RESERVES TO MAKE PAYROLL, ET CETERA.
AND REMEMBER THAT YOUR GRANTS ARE ON A REIMBURSEMENT BASIS, MEANING YOU HAVE TO PAY FOR IT FIRST, THEN THE STATE WILL REIMBURSE YOU OR THE FEDERAL, UH, GOVERNMENT.
I, I ALSO PRESENT THE, THE CHILD NUTRITION AND DEBT SERVICE FUNDS BECAUSE YOU DO, UH, ADOPT A BUDGET ON AN ANNUAL BASIS.
THIS YEAR, YOUR CHILD NUTRITION BROUGHT IN 6 MILLION AND YOU, UM, EXCEEDED YOUR BUDGET BY $200,000 ON THE EXPENDITURE SIDE.
THOSE CAME, UH, IN AT $4 MILLION AND THEY WERE UNDER BUDGET BY A MILLION.
YOUR FUND BALANCE INCREASED BY $2 MILLION, AND YOU HAVE AN ENDING FUND BALANCE OF $3 MILLION.
YOU'LL HAVE TO SUBMIT A SPENDING PLAN IF YOU HAVEN'T ALREADY TO THE TEXAS DEPARTMENT OF AGRICULTURE.
WHEREAS WE ARE LOOKING AT THE GENERAL FUND WHERE YOU HAVE TO HAVE AT LEAST 90 DAYS ON THE TEXAS DEPARTMENT OF AGRICULTURE.
THEY SAY NO MORE THAN 90 DAYS.
AND IF YOU DO HAVE THAT, THEY'RE NOT GONNA TAKE IT FROM YOU.
THEY JUST WANT YOU TO SAY, HOW ARE YOU GOING TO REINVEST IT INTO THE CHILD NUTRITION PROGRAM? AND IT'S A FINE BALANCE, NOT JUST TO BREAK EVEN.
SO YOU ALL HAD A, A GOOD YEAR, AND THAT ALLOWS YOU TO REINVEST INTO YOUR PROGRAM AS YOU DEEM NECESSARY.
ON THE DEBT SERVICE SIDE, YOU ALSO LEVY
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AN INTEREST IN SINKING FUND RATE, UH, FOR YOUR DEBT AND, AND IN, FOR YOUR PRINCIPLE AND INTEREST ON YOUR DEBT, TOTAL REVENUE TOTALED $16 MILLION, AND THOSE WERE UNDER BUDGET BY A HUNDRED THOUSAND DOLLARS.AND THEN YOUR EXPENDITURES ALSO TOTALED 16 MILLION, AND THOSE WERE RIGHT UNDER BUDGET, UH, BY $50,000.
AND THAT'S, THAT'S A SIMPLER ONE TO BUDGET FOR BECAUSE YOU HAVE THOSE AMORTIZATION SCHEDULES.
YOU KNOW WHAT YOUR PRINCIPLE AND INTEREST IS GOING TO BE IN THE COMING YEARS.
OVERALL, YOUR FUND BALANCE DECREASE BY $300,000, AND YOU HAVE AN ENDING FUND BALANCE OF 6 MILLION.
AND SO THAT IS A, THAT IS A HEALTHY FUND BALANCE AS WELL.
YOU SHOULD HAVE AT LEAST 25%, WHICH YOU DO.
ANY QUESTIONS FOR ME? I HAVE A QUESTION.
UM, THE, JUST FOR CLARIFICATION, YOU STATED THAT THE COVID GRANT, THERE WAS A COVID GRANT FOR THE CLEANING OF THE SCHOOLS.
CAN YOU CLARIFY THAT FOR ME? YES.
THERE WAS A NEW GRANT, AND IT'S IN A PD PEDOLOGY LABORATORY GRANT THAT CAME FROM THE TEXAS DEPARTMENT OF HEALTH AND HUMAN SERVICES.
THEY PAIRED WITH T AND SO THAT ALLOWED YOU FOR ADDITIONAL SANITATION.
IT WAS A VERY SMALL AMOUNT, BUT THAT ONE, THAT GRANT CAME RAPIDLY AND TE IN SOME CASES FUNDED IT UPFRONT.
UM, AND THEN YOU HAD TO SCRAMBLE TO FIND HOW TO SPEND IT.
UM, BUT, BUT YES, THAT WAS A NEW GRANT AND IT WAS SMALL, AND THE AMOUNT OF THAT ONE WAS $245,000.
SO IF YOU COMPARE THAT TO YOUR ESSER AT ALMOST $10 MILLION, IT'S VERY SMALL.
AND YOU STATED THAT THE, UM, OH, NO, MY QUESTION WOULD BE THE, THIS AUDIT REPORT, IF THERE IS ANY QUESTIONS OR CONCERNS AFTER CONTINUING REVIEW OF THIS AUDIT AUDIT REPORT, WHO WOULD BE THE POINT OF CONTACT? I, DR.
PERRERA CAN FIELD THOSE, AND THEN SHE CAN GET WITH MANAGEMENT, AND THEN THEY'LL FILTER IT TO ME.
AND THE INFORMATION THAT WAS USED TO, UM, COMPLETE THIS AUDIT, WAS THAT INFORMATION THAT WAS SUBMITTED FROM THE DISTRICT TO YOU? OR WHERE, WHERE SHALL I ASK? HOW DID YOU GO ABOUT RETRIEVING ALL THE INFORMATION THAT IS USED AND WHO WAS IT SHARED WITH? SO THE, THE INFORMATION COMES FROM YOUR MANAGEMENT TEAM FROM MS. DANA AND ALSO, UH, TODD.
UH, THEN FROM THERE, SO WE JUST CAN'T TAKE IT AND PRODUCE THESE FINANCIAL STATEMENTS.
SO AS FAR AS SHARING IT, THEY SHARED IT WITH US, AND THEN IT STOPS THERE.
THIS, OUR AUDIT REPORT AND THAT INFORMATION DOES NOT GO ANYWHERE UNLESS, YOU KNOW, THERE'S, THERE'S A, A REVIEW FROM THE TA.
IS THAT YOUR QUESTION? LIKE WHAT DO WE DO WITH THE INFORMATION? YEAH.
AND THEN IF YOU HAVE ANY QUESTIONS OR, OR CONCERNS, WE, WE TAKE IT FROM THERE, BUT IT DOESN'T GO ANYWHERE UNTIL YOU APPROVE IT.
SO ONCE IT'S APPROVED, THEN IT GOES WHERE? IT GOES TO T.
SO THERE'S ACTUALLY TWO SUBMISSIONS.
UM, THERE IS A SUBMISSION THAT'S REQUIRED BY JANUARY 28TH TO MEET THAT 150, UH, DAY DEADLINE, AND IT'S UPLOADED.
UH, THEN THE SECOND ONE, IT GOES TO THE FEDERAL AUDIT CLEARING HOUSE FOR THE DATA COLLECTION FORM.
AND THE FEDERAL AUDIT CLEARING HOUSE NEEDS IT FOR THE FEDERAL PROGRAM BECAUSE EVERY FEDERAL AGENCY LIKES TO SEE WHAT THE DISTRICT SPENT, UM, THE AMOUNT, AND THEN THEY COMPARE IT TO THEIR INTERNAL RECORDS.
SO THOSE ARE TWO BIG SUBMISSIONS.
AND THEN THE TEXAS HEALTH AND HUMAN SERVICES, THERE'S A THIRD ONE THAT THEY'LL ASK YOU TO SUBMIT TO THEIR PORTAL.
SO THERE'S THREE SEPARATE SUBMISSIONS AND THEN ANYWHERE ELSE THAT MAY NEED IT, UM, YOU CAN SEND A PDF TO VARIOUS, UH, GRANTERS, AND THEN OF COURSE, YOU PUT IT ON YOUR WEBSITE ONCE YOU ALL APPROVE IT AND, AND BLESS IT.
SO I GUESS THIS QUESTION WOULD BE FOR THE SUPERINTENDENT.
UM, THERE WAS 1.8 MILLION TRANSFER, TRANSFER TO CAPITAL PROJECT FUNDS.
CAN YOU ELABORATE ON THAT, ON WHAT THAT TRANSFER WAS AND WHY? YES.
UM, IF YOU RECALL BACK IN THE FALL, UH, THE BOARD DID APPROVE THAT, UM, TRANSFER FOR CAPITAL PROJECTS, SUCH AS SOME OF THE THINGS THAT ROGER WILL BE HIGHLIGHTING OR HAS HIGHLIGHTED AT EACH MEETING.
UM, LIKE FOR EXAMPLE, THE ROOFING, UH, AT SEVERAL OF OUR BUILDINGS, UM, AND SEVERAL OTHER CAPITAL PROJECTS.
UH, SO THAT'S WHAT THAT WAS FOR.
UM, THAT TRANSFER IS FOR, TO TAKE CARE OF SOME OF THE CAPITAL PROJECTS.
AND I KNOW THAT, UM, ROGER'S HERE CAN GIVE YOU SOME MORE DETAILS, HOWEVER, THAT'S THE BASIS OF, OF THE TRANSFER AND WHAT IS REQUIRED.
IS IT, UH, POSSIBLE TO GET A BREAKDOWN OF THAT 1.8 MILLION? YES.
THAT, THAT, THAT PRESENTATION WAS GIVEN TO YOU AT THAT TIME? BUT I, I CAN DEFINITELY GET, UH, ANOTHER COPY OF THAT AND, AND ADD THAT
[00:25:01]
IN TO, UH, EMAIL TO THE BOARD.SO IT HAD EXACTLY WHAT IT WAS AND WHAT, UM, HOW MUCH IT COST.
I'LL GO AHEAD AND I'M GOING TO JUST OFFICIALLY GO AHEAD.
YOU SAW IT IN A BUDGET COMMITTEE MEETING MM-HMM.
SO WHAT I'M GOING TO, UM, I I DID LOOK FOR IT.
I DID, UM, I DO, UM, JUST FOR THE RECORD, I DID LOOK FOR IT.
I DID NOT, UM, I DID SEE THE LIST OF PROJECTS, BUT I DIDN'T, BUT IT DID NOT STATE SPECIFICALLY WHAT THE PROJECT, THE COST FOR THAT PARTICULAR PROJECT.
SO AT THIS END, I SENT AN EMAIL REQUESTING THAT.
SO WHAT I'M GONNA DO IS AT THIS TIME IS SEND ANOTHER EMAIL REQUEST AND A BREAKDOWN, UM, OF THAT.
I'M JUST LETTING THAT BE KNOWN.
AND AS FAR AS, UM, I GUESS THAT'S MY QUESTION.
DO YOU MIND GOING BACK TO THE FIRST SLIDE ON YES, MA, HOW THE DISTRICT RECEIVED FUNDS AND THE TYPE OF FUNDS THAT WE RECEIVED.
AND SO I WANTED YOU TO GO BACK TO THAT.
SO, UH, FOR THE AUDIENCE TO KNOW, THIS IS HOW THE DISTRICT RECEIVE FUNDS THROUGH TAX DOLLARS, CORRECT? WE RECEIVE STATE AND FEDERAL DOLLARS.
THEN I WOULD LIKE FOR YOU TO MOVE TO THE NEXT SCREEN BECAUSE I, I, I JUST WANTED TO ITERATE THAT BECAUSE EVEN NOW I WAS HEARING QUESTIONS ON HOW THE DOLLARS ARE UTILIZED, HOW THEY'RE BROKEN DOWN, AND I WANT TO THANK YOU FOR EXPLAINING THAT IN DETAIL.
BECAUSE YOU DID EXPRESS JUST NOW TO US, AND THIS RIGHT HERE IS ALL OF OUR ANSWERS.
AND SO THANK YOU FOR PUTTING THIS BOOK TOGETHER.
UH, AND SO ACTUALLY YOU DON'T HAVE TO DO THAT.
THIS IS VERY EXP EXPLAN EXPLANATORY, AND THANK YOU SO VERY MUCH.
ANY OTHER QUESTIONS FROM BOARD MEMBERS? OKAY.
THANK YOU SO MUCH FOR YOUR PRESENTATION.
THIS, UM, THIS IS, THIS, UM, TIMEFRAME IS FOR THE PHYSICAL YEAR 21, 22, JUST TO CONFIRM.
21, 22, UM, DURING THIS CURRENT ADMINISTRATIVE, IS THAT CORRECT? ADMINISTRATION OR, YES, THAT'S CORRECT.
UM, AND, AND I BELIEVE MR. GARRISON JOINED IN THE MIDDLE, UM, OF THE, OF THAT FISCAL YEAR.
BUT YES, IT'S THE SAME ADMINISTRATION.
BOARD, THIS IS AN ACTION ITEM.
ANY DISCUSSION FROM THE BOARD? OKAY.
IS THERE A MOTION, MADAM PRESIDENT, I MOVE THAT WE ACCEPT THE AUDIT REPORT, UM, DISCUSS THE APPROVAL OF THE 20 21, 20 22 AUDIT, FINANCIAL AUDIT REPORT AS PRESENTED.
WE HAVE A MOTION BY MS. MORRIS.
IS THERE A SECOND? I CAN SECOND THAT.
THIS TIME WE HAVE A MOTION BY MS. MORRIS TO APPROVE THE 20 21 20 22 FINANCIAL AUDIT.
AT THIS TIME, I'LL CALL FOR THE VOTE.
WAS THERE A NEED FOR CLOSED SESSION SIGNATURE FROM WE GET THAT CLOSED SESSION? OH YEAH, SURE.
[7. Recess to Closed Session]
THE BOARD IS GOING TO GO INTO CLOSED SESSION AS AUTHORIZED BY THE TEXAS OPEN MEETINGS ACT, TEXAS GOVERNMENT CODE CHAPTER 5 51, TEXAS GOVERNMENT CODE FIVE 5001.071.LEGAL ADVICE WITH THE SCHOOL ATTORNEY, 5 51 0.072 DELIBERATION REGARDING REAL PROPERTY 5 5 1 0.0 74 PERSONNEL MATTERS AND 5 51 0.0 76 DELIBERATION.
REGARDING SECURITY DEVICES ARE SECURITY AUDITS.
TIME IS 6:30 PM AND FOR THE RECORD, I WILL SAY THAT, UH, MS. WOODFIELD ARRIVED AT 6:03 PM AND MR. JONES ARRIVED AT SIX 11.
[00:30:01]
THIS TIME, THE BOARD'S GONNA COME BACK IN CLOSE SESSION.THE TIME IS 7:03 PM EXCUSE ME, BACK IN THE OPEN.
AT THIS TIME, THE NEXT ITEM ON THE A AGENDA IS ADJOURNMENT.
IS THERE A MOTION TO ADJOURN? SO MOVE.
ALL IN FAVOR OF ADJOURNMENT, SAY AYE, PLEASE.