1. FinaNcial LEAdership LISD February 21, 2019

2. Financial Services Who we are and what we do Guiding Documents
Annual Financial Audit
Financial Reporting

3. Financial Services Department
Accounting –
Business Operating Guidelines
Treasury Management
Cash Flow
Investments
Federal Funds
Online store
Campus and Student Activity Funds
Timekeeping
Revenue Projection & State Aid
Financial reporting (federal, state, and local)
Annual external audit

4. Financial Services Department
Payroll
process bi-weekly and monthly payrolls for approx. 5,000 District employees
Accounts Payable
process vendor invoices
employee reimbursements
student travel requests
various refunds

5. Financial Services Who we are and what we do Guiding Documents
Annual Financial Audit
Financial Reporting

6. Guiding Documents
In general, there are several law or rule documents that specifically apply to Texas school districts. These are:
• The Texas Education Code
• Title 19, Texas Administrative Code, Education
• Texas Education Agency Financial Accountability System Resource Guide

7. TEA Financial Accountability System Resource Guide

8. TEA Financial Accountability System Resource Guide

9. Financial Services Who we are and what we do Guiding Documents
Annual Financial Audit
Financial Reporting

10. TEA Requirements Sec. 44.008. ANNUAL AUDIT; REPORT
The board of school trustees of each school district shall have its school district fiscal accounts audited following the close of each fiscal year at district expense by a certified or public accountant holding a permit from the Texas State Board of Public Accountancy.
The independent audit must meet at least the minimum requirements prescribed by the State Board of Education, subject to review and comment by the state auditor and include an audit of the accuracy of the fiscal information provided by the district through the Public Education Information Management System (PEIMS).

11. TEA Requirements Sec. 44.008. ANNUAL AUDIT; REPORT
Each treasurer receiving or having control of any school fund of any school district shall keep a full and separate itemized account with each of the different classes of its school funds coming into the treasurer's hands. The treasurer's records of the district's itemized accounts and records shall be made available to audit.
A copy of the annual audit report, approved by the board of trustees, shall be filed by the district with the agency not later than the 150th day after the end of the fiscal year.
November 27 for June 30 fiscal year
January 28 for August 31 fiscal year
If the board of trustees declines or refuses to approve its auditor's report, it shall nevertheless file with the agency a copy of the audit report with its statement detailing reasons for failure to approve the report.

12. TEA Requirements Sec. 44.008. ANNUAL AUDIT; REPORT
Texas Education Agency (TEA) is charged with review of the independent audit of the local education agencies, and the commissioner shall notify the board of trustees of objections, violations of sound accounting practices or law and regulation requirements, or of recommendations concerning the audit reports that the commissioner wants to make. If the audit report reflects that penal laws have been violated, the commissioner shall notify the appropriate county or district attorney and the attorney general. The commissioner shall have access to all vouchers, receipts, district fiscal and financial records, and other school records as the commissioner considers necessary and appropriate for the review, analysis, and passing on audit reports.

13. District Timeline Fiscal year: September 1 – August 31 February March
District issues Request for Proposal (RFP) for audit services OR
Board approves contract for renewal of audit services for current fiscal year
March
If RFP year, Board approves contract for audit services for current fiscal year
May/June
Planning meeting between LISD staff and audit firm to outline audit schedule
July/August - Audit firm staff is onsite for preliminary testing
Internal controls testing
Payroll Sampling
Accounts Payable sampling
Determination of Federal Fund programs to be tested for Single Audit

14. District Timeline October December January
Audit firm is onsite for approx. 3 weeks to complete testing through end of fiscal year
December
Preliminary draft of Comprehensive Annual Financial report (CAFR) issued to LISD to review
January
Board workshop meeting- CAFR presented to Board of Trustees for review and discussion
Board Regular meeting – CAFR approved to meet TEA filing deadline
Submission of CAFR /GASB Data Feed to TEA
Submission of PEIMS mid-year data aligning with CAFR
Submission of GFOA/ASBO applications
Submission of municipal filings for S&P, TX MAC,

15. Purpose of the Audit – The Opinion on the Report
Unmodified Opinion - The financial statements are fairly stated in all material respects.
Modified Opinion - The financial statements are fairly stated in all material respects, except for…
Disclaimer – The auditor cannot express an opinion on the financial statements.

16. Purpose of the Audit – The Opinion on the Report
Substantive Procedures
Test of Controls
Identification of Key Controls
Planning and Risk Assessment

17. Objectives of Financial Reporting
GASB Concept Statement No. 1
Framework for accounting and reporting standards for both fund and government-wide financials
Stresses the following three objectives of financial reporting
Accountability
Evaluating Operating Results
Assessing Level of Services and Ability to Meet Obligations

18. Objectives of Financial Reporting
1) Accountability:
Paramount objective of financial reporting by state and local governments
Determine whether current-year revenues were sufficient to pay for current-year services
Demonstrate whether resources were obtained and used in accordance with the entity’s legally adopted budget and/or and compliance with other finance related legal or contractual requirements.
Enables users in assessing the service efforts, costs, and accomplishments of the governmental entity along with information from other sources, helps users assess the economy, efficiency, and effectiveness of government and may help form a basis for voting or funding decisions.

19. Users of School District Financial Statements
The primary users include:
Citizens of the school district (taxpayers/voters/service recipients, media, advocate groups, and public finance researchers)
Direct representatives of the citizens such as legislatures and oversight bodies (state legislatures, school boards)
Investors and creditors (individual and institutional investors, bond rating agencies, intergovernmental grantors)

20. Objectives of Financial Reporting
2) Assist users in evaluating operating results for the year:
Information about sources and uses of financial resources
account for outflows by function and purpose
account for inflows by source and type
extent to which inflows met outflows.
identify material nonrecurring financial transactions.
Information on how the governmental entity financed its activities and met its cash requirements
Whether the entity’s financial position improved or deteriorated as a result of the year’s operations

21. Objectives of Financial Reporting
3) Assessing Level of Services and Ability to Meet Obligations
Financial reporting should assist users in assessing the level of services that can be provided by the governmental entity and its ability to meet its obligations as they become due
information about the financial position and condition of a governmental entity. Financial reporting should provide information about resources and obligations, both actual and contingent, current and noncurrent. The major financial resources of most governmental entities are derived from the ability to tax and issue debt. As a result, financial reporting should provide information about tax sources, tax limitation, tax burdens and debt limitations.
provide information about physical and other nonfinancial resources having useful lives that extend beyond the current year, including information that can be used to assess the service potential of those resources to assess long- and short-term capital needs.
Disclose legal or contractual restrictions on resources and risks of potential loss of resources.

22. Types of School District Audit Reports
Reports required to be submitted to TEA:
Annual Financial and Compliance Report, or modified CAFR
Report to management from the school district’s independent auditor issued during the annual financial audit
Public Education Information Management System (PEIMS) and other reports as required by individual TEA divisions
GASB Data Feed

23. Types of School District Audit Reports
Annual Financial Report (AFR)
Minimum required report for TEA
Comprehensive Annual Financial Report (CAFR)
Added level of transparency – statistical tables
Submitted for as to accuracy and completeness
Government Finance Officers Association (GFOA)
Association of School Business Officials (ASBO)

24. Questions?