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WE CAN'T[*This meeting was joined in progress*]
CLAIM IT AS REVENUE IF THERE'S DOUBT THAT IT'LL BE[6. Discussion of the 2022-23 Lancaster ISD Financial Audit - CFC(LEGAL) - (G2, G4) - Whitley Penn, LLP/Dr. Faith-Ann Cheek, Presenters ]
PAID.AND SO WE HAD TO NOT REPORT IT, UM, ON, ON THE FA AS AS REVENUE BECAUSE AS OF TODAY, AND EVEN WHEN WE COMPLETED THE AUDIT, WE COULDN'T, WE COULDN'T, UH, SAY THAT IT HAD BEEN RECEIVED IN CASH.
AND SO THAT'S WHY THAT REVENUE, UM, IS SO LOW AS FAR AS YOUR DEBT SERVICE FUND IS CONCERNED.
YOU KNOW, YOU, YOU LEVY TAXES AS WELL TO MAKE YOUR PRINCIPAL AND INTEREST ON YOUR BONDS.
UM, THAT TOTALED YOUR, YOUR EXPENDITURES TOTALED $9.1 MILLION.
YOU BROUGHT IN $19.9 MILLION IN REVENUES WITH, WITH, AGAIN, THE LOCAL REVENUE BEING THE BULK, YOUR PROPERTY TAXES.
AND THEN YOU HAVE A LITTLE BIT OF EXISTING DEBT ALLOTMENT STATE AID THAT COMES IN FROM THE TEXAS EDUCATION AGENCY.
SO YOU INCREASED, UH, YOUR DEBT SERVICE FUND BY $800,000, UH, TOTALING $7.3 MILLION FOR THE YEAR.
AND WHEN I CALCULATED IT, THAT WAS ABOUT 38% OF EXPENDITURES, WHICH IS WELL ABOVE THE 25% OR 90 DAYS.
UH, THAT IS, THAT IS RECOMMENDED, UH, FOR THAT BECAUSE IF YOU RECALL THE WAY THE PROPERTY TAX CYCLE WORKS, YOU DON'T LEVY TILL OCTOBER AND THEN YOU DON'T START COLLECTING TILL DECEMBER.
SO YOU HAVE FOUR MONTHS THERE WHERE YOU HAVE TO FUND IT YOURSELF WITH YOUR FUND BALANCE, ANY PRINCIPAL OR INTEREST PAYMENTS THAT, THAT COME DUE REQUIRED COMMUNICATIONS.
THESE ARE THE LAST TWO SLIDES.
OUR ENGAGEMENT LETTER WAS BROUGHT BEFORE YOU ON MARCH 22ND, 2023.
IN THE MIDDLE OF THE AUDIT WHEN WE WERE OUT HERE, WE ISSUED, UM, THERE WAS DATED, UH, SEPTEMBER, UH, LETTING YOU KNOW THAT, OKAY, THE FISCAL YEAR IS OVER.
UM, AND WE IDENTIFIED TWO RISK MANAGEMENT OVERRIDE AND REVENUE RECOGNITION, WHICH DOESN'T JUST APPLY TO THIS DISTRICT, IT APPLIES TO ALL AUDITED ENTITIES, RIGHT? WE ALWAYS HAVE TO DESIGN PROCEDURES FOR MANAGEMENT OVERRIDE AND ANY OVERSTATEMENT OF REVENUE TO WHERE WE HAVE TO MAKE SURE THAT THE REVENUE EXISTS.
AND THE MAIN EXAMPLE FOR THAT IS, UM, LOOKING AT, FOR EXAMPLE, THE CHILD NUTRITION, UH, REVENUE, STATE AID, ET CETERA.
WE ALSO LOOK AT YOUR ACCOUNTING POLICIES AND METHODS THIS YEAR, GASB NUMBER 96, WHICH IS THE SUBSCRIPTION BASED INFORMATION TECHNOLOGY ARRANGEMENTS WAS APPLICABLE THIS YEAR.
BUT IN WORKING WITH YOUR MANAGEMENT TEAM, IT WAS NOT, THERE WAS NO AGREEMENT THAT MET THE REQUIREMENTS.
IT DOESN'T MEAN THAT IN THE FUTURE THERE WON'T BE AGREEMENTS.
BUT AS OF AUGUST 31ST, 2023, UM, NONE MET THE, THOSE, THOSE REQUIREMENTS.
AND WHAT THAT STANDARD REQUIRES IS THAT YOU NOW HAVE A RIGHT TO USE, UH, RIGHT TO USE, UM, INTANGIBLE ASSET OFFSET BY A LIABILITY, WHERE IN THE PAST WE HAD A COMMITMENT FOR TWO OR THREE YEARS, UM, AND WE WOULD ONLY DISCLOSE IT OR NOTHING WAS DONE FOR SUBSCRIPTION SOFTWARE.
IT IS THE SISTER, UH, PRONOUNCEMENT TO LEASES THAT WAS IMPLEMENTED LAST YEAR.
BUT AGAIN, IN CASE YOU'RE, YOU'RE INVOLVED WITH OTHER GOVERNMENTS AND YOU HEAR ABOUT THAT, THIS IS THE REASON WHY YOU DON'T SEE THAT IN THESE FINANCIAL STATEMENTS.
THERE WERE NO DISAGREEMENTS OR DIFFICULTIES, UM, WITH YOUR MANAGEMENT TEAM.
AND WE ASSERT THAT WE'RE INDEPENDENT OF THE DISTRICT.
WE HAVE TO BE IN ORDER TO ISSUE, UH, AN OPINION.
I WOULD JUST LIKE TO, UM, TAKE AN OPPORTUNITY AT THIS TIME TO RECOGNIZE THE BUSINESS TEAM AND THE HARD WORK, UM, THAT THEY DO WITH THE GENERAL LEDGER AND WITH OUR ACCOUNTING POLICIES, UM, IN MAKING SURE THAT WE MEET ALL STANDARDS.
SO THANK YOU VERY MUCH TO MS. UH, SHAW PETERS, UH, AND ALSO ELEANOR IN PROCUREMENT, UM, TO MAKE SURE THAT, THAT WE ARE ABOVE BOARD IN ALL OF OUR PRACTICES.
AND THE LAST PIECE OF AUDIT EVIDENCE THAT WE'LL RECEIVE HERE, UH, PROBABLY TOMORROW, WE'VE SENT OUR MANAGEMENT REPRESENTATION LETTER THAT THE DISTRICT HASN'T WITHHELD ANY INFORMATION FROM US TO DO OUR AUDIT.
UM, AND THEY'VE GIVEN US EVERYTHING.
WE'VE ALSO SENT OUT LEGAL REPRESENTATION, LETTERS TO ATTORNEYS, UH, TO SEE IF THERE'S ANY MATTERS WE HAVE TO REPORT AND THERE WERE NONE, UH, TO REPORT, TO DISCLOSE OR TO REPORT A LIABILITY.
UH, THIS NEXT ONE DOESN'T MEAN THAT YOU CAN'T SPEAK TO OTHER AUDIT FIRMS. IT JUST MEANS THAT IF WE'RE IN A DISAGREEMENT ABOUT OUR OPINION OR APPLICATION OF, UH, FINANCIAL REPORTING MATTERS, THEN WE'D BE REQUIRED TO REPORT THAT TO YOU TONIGHT.
I'M NOT AWARE THAT THAT WAS EVEN NEEDED.
ANY ISSUES THAT WE DISCUSS WITH YOUR MANAGEMENT TEAM FROM TIME TO TIME, THERE MAY BE TECHNICAL ADVICE, THERE'S NEW STANDARDS, THERE HAVE BEEN NEW STANDARDS, ESSER HAS BEEN IN THE MIX.
UM, YOUR OUR RESPONSE TO THOSE QUESTIONS IS NOT A CONDITION AS, UM, TO OUR RETENTION AS YOUR AUDITORS.
IF THE ANSWER'S NO, THE ANSWER'S NO, THE ANSWER'S YES, THEN THE ANSWER'S YES.
AND WE'LL PROVIDE THE SUPPORTING DOCUMENTATION FROM TEA OR THE FEDERAL GOVERNMENT.
AND I APPRECIATE YOUR MANAGEMENT TEAM.
UM, I SEE, UH, MISS DANA ALL THE TIME IN SBO
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CLASSES TO, UM, ATTENDING THOSE.FINALLY, THE ESTIMATES THAT ARE INCLUDED IN THE FINANCIAL STATEMENTS.
THE REASON WE BRING THIS UP, BECAUSE IT'S NOT SOMETHING WE CAN VOUCH, RIGHT? WE HAVE TO DEPEND ON THE CALCULATIONS OF OTHERS, AND WE'VE DISCUSSED THAT AVERAGE DAILY ATTENDANCE FEEDS INTO STATE AID AS WELL AS PROPERTY TAXES.
THE OPPE AND PENSION LIABILITIES ARE ALSO AN ESTIMATE BECAUSE OF THE ACTUARIAL DETERMINATIONS.
AND THEN FINALLY, THE ALLOWANCE FOR DOUBTFUL ACCOUNTS AS IT RELATES TO YOUR PROPERTY TAXES IS BASED ON HISTORICAL COLLECTIONS, AND THAT IS REVIEWED AND ASSESSED AND, UM, ADJUSTED ANNUALLY.
AND THAT IS ALL THAT I HAVE FOR YOU.
ANY QUESTIONS FOR ME? THANK YOU, MADAM PRESIDENT.
UM, I JUST WANTED TO SHARE JUST A FEW COMMENTS, UM, ABOUT THE AUDIT AS WELL AS OUR REGULATIONS AND, AND, UM, WHAT WE RECEIVE FROM, UM, FROM, UH, TEA THROUGH FIRST RATING.
UM, THERE HAS BEEN ONGOING, UM, ACCUSATIONS OR COMMENTS ABOUT US UTILIZING SOME, UH, UNFOUNDED PRACTICES OR MIS UTILIZING TAXPAYER DOLLARS.
AND I HAVE TO SAY, UH, FROM THE DIOCESE THAT THIS TEAM HAS BEEN STELLAR.
UM, THERE'S BEEN, WE'RE NOT PERFECT BY ANY MEANS, BUT WHAT I CAN SAY TO YOU ALL IS THAT THIS TEAM HAS WORKED HARD, UM, TO ENSURE THAT OUR, OUR POLICIES, UH, THAT WE ARE ADHERING TO THE POLICIES AND THE METHODS THAT ARE PRESCRIBED.
AGAIN, WE ARE NOT PERFECT, BUT THEY DO NOT DESERVE THE ONGOING ACCUSATIONS THAT ARE BEING MADE ABOUT THE DISTRICT AND OUR MONEY AND OUR FINANCIALS.
YOU CANNOT RECEIVE AN, A RATING SUPERIOR FROM TA FOR FIRST RATING AND AN AUDIT SUCH AS THIS IF THERE WERE IMPROPER PRACTICES HAPPENING.
SO I REALLY WISH THAT WE WOULD, UH, MOVE FORWARD WITH THE FACT KNOWING THAT WE ARE BEING GOOD STEWARDS OF TAXPAYER DOLLARS THE BEST WE CAN.
UM, AND THIS TEAM I LEAN ON A LOT AND THEY'VE BEEN DOING A, I THINK, AN AMAZING JOB.
UM, I KNOW I DON'T TELL THEM VERY OFTEN, BUT I FELT IT WAS IMPORTANT FOR ME TO SAY THAT FROM THE DIOCESE TODAY.
UM, AND THEY ARE DOING THEIR WORK AND WHAT THEY NEED TO DO, AND FAITH ANN HAS COME IN WITH, YOU KNOW, ROSE UP OUR SLEEVES AND HAVE RUN WITH IT AS WELL.
BUT THESE THREE LADIES HERE THAT ARE ALSO WITH US TODAY HAVE ALSO WORKED HARD.
THEY DO NOT DESERVE THE ONGOING COMMENTS.
I WANT US TO THANK YOU FOR THE REPORT.
I THINK YOU POINTED OUT WHAT WE NEEDED TO HEAR.
UH, WE ARE IN HEALTH, WE ARE IN GOOD HEALTH, OUR FINANCES.
AND I WANNA ECHO WHAT OUR SUPERINTENDENT THAT, UH, I TOO HAVE HEARD THE COMMENTS.
UM, IT AMAZED ME HOW WE AS A BOARD HAVE A FIDUCIARY DUTY AND WITH THAT FIDUCIARY DUTY, WE HAVE TO MAKE SOUND DECISIONS AND GOOD DECISIONS.
AND THOSE DECISIONS COME FROM OUR SUPERINTENDENT, IN TURN COME FROM OUR FINANCE DEPARTMENT AND EVERY, ALL OF THE STAFF MEMBERS THAT ARE THERE THAT ARE WORKING HARD TO FURNISH OUR SUPERINTENDENT THE GOOD INFORMATION TO GIVE US.
I AM AS A BOARD MEMBER, ARE TIRED OF HEARING OUR SUPERINTENDENT, UH, AND OUR DISTRICT AND, UH, OUR OTHER DEPARTMENTS NOT UTILIZING FUNDS.
BUT TODAY YOU TELL US THE TRUTH, WE CAN'T DO ANYTHING BUT APPRECIATE THAT.
UH, EVEN THOUGH WE HAVE BOARD MEMBERS THAT SEEK MONEY FROM THE DISTRICT AND OTHER MEANS AND UTILIZE THE RESOURCES THAT OUR TAX DOLLARS BRING IN FOR THEIR OWN PERSONAL USE, I JUST WANT TO MAKE IT KNOWN FROM THIS SEAT DISTRICT SIX.
I TRY HARD TO ACKNOWLEDGE MY FIDUCIARY DUTIES.
ANY OTHER QUESTIONS, COMMENTS FROM DICE? OKAY, I DON'T HEAR ANY.
WELL, I WILL FORGIVE MY 2 CENTS.
THANK YOU ALL FINANCE TEAM FOR WHAT YOU DO.
I KNOW IT'S A VERY CUMBERSOME JOB, VERY ATTENTION TO DETAIL, SO I THANK YOU ALL FOR WHAT YOU ALL DO.
UM, I'M HOPING THAT WE DON'T HEAR THE DEROGATORY STATEMENTS THAT WE'VE HEARD FROM THE SAD POET IS THAT IT'S COMING FROM OUR BOARD THAT SHOULD BE MORE KNOWLEDGEABLE AND WE GET THE FACTS.
WE KNOW ABOUT THE FIRST REPORT, WE SEE THE AUDIT EVERY YEAR, IT COMES BACK UNMODIFIED.
SO IT LETS US KNOW THAT OUR INTERNAL CONTROLS ARE BEING FOLLOWED AND THAT THIS DISTRICT IS DOING WHAT THEY'RE SUPPOSED TO DO FINANCIALLY FOR OUR STUDENTS, STAFF, AND COMMUNITY.
OKAY, NEXT ITEM IS CLOSED SESSION.
I DON'T BELIEVE WE HAVE A NEED FOR CLOSED SESSION.
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ANYTHING.I DON'T HAVE ANYTHING PRESENT, HAMILTON.
SO AT THIS TIME, NEXT ITEM ON OUR AGENDA IS ADJOURN.
THE TIME IS 6:05 PM WE'RE ADJOURNED.
SEE YOU ALL ON THURSDAY NIGHT FOR THE REGULAR BOARD MEETING.
YEAH, MONDAY FOR THE RECORD, I DIDN'T STATE THAT MS. MORRIS CAME IN AT 5 39 AND MR. SMITH CAME IN AT 5 56.