Annual Financial Audit

The Deputy Superintendent for Finance was not physically able to meet me for an interview.  I submitted the questions via email.  The responses below are as received.

How is the external auditor selected?

The District employs a full time Internal Auditor, whose reporting responsibility is directly to the Board of Trustees.

The District maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated (official) budget as adopted by the Board of Trustees. Activities in the General Fund, Child Nutrition Special Revenue Fund, and Debt Service Fund are included in the official budget. The level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is at the fund-function level as required by the Texas Education Agency. In addition, lower level organizational units' expenditures are controlled through the District's automated financial computer systems at varying combinations of the account code structure. The system also provides controls limiting accessibility to budgetary account codes. Oversight control of all District expenditures is maintained by the Financial Services staff.

State law and District policy require an annual audit by independent certified public accountants. The Board of Trustees selected the accounting firm of Hankins, Eastup, Deaton, Tonn & Seay, P.C. during 2006-2007 based on the recommendation of the financial management staff. Hankins, Eastup, Deaton, Tonn & Seay, P.C. is the fourth accounting firm to audit the District since the 1950s.  The quality of services provided by the firm has led to the current long-standing relationship.

In addition to meeting the requirements set forth in state statutes, the audit was designed to meet the requirements of the federal Single Audit Act of 1996 and related OMB Circular A-133.

How does the auditor conduct the audit?

The auditor audits the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the District as of and for the year ended on  June 30 of each year.  These collectively comprise the District's basic financial statements and issue their report thereon dated on or before November 1 of each year. The audit is conducted in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement, tests are performed of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts.  The results of said tests are meant to disclose instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

What does the audit conclude about district financial procedures and actions?

The audit is designed to determine if the District complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the most recent year ended June 30th.

The auditors concluded that, “The proposed budget represents a realistic plan to address the unique circumstances and challenges ahead. While the District continues to face difficult financial decisions in the coming years, the District has developed continuous improvement efforts maintaining a balanced budget with a comprehensive multiyear financial plan. This plan also involves the continued participation of engaged stakeholder groups and regular interaction with key administrators and the Board of Trustees throughout the year. This multiyear financial plan will allow the District time to approach decisions in an open and thoughtful manner that focuses on maximizing resources available to achieve academic success for all students.”

How are the results communicated?

The Annual Financial Audit Reported to the Board of Trustees for approval during the public Board Meeting immediately subsequent to November 1^st of the year.  Once approved by the board of Trustees, then the report is posted to the District website for review / access by the stakeholders of the District.