Comprehensive Annual Financial Report
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Comprehensive Annual Financial Report Braswell High School Opening Fall 2016 Bell Elementary Opening Fall 2016 Fiscal Year Ended June 30, 2016 1307 N. LOCUST STREET | DENTON, TEXAS 76201 COMPREHENSIVE ANNUAL FINANCIAL REPORT of the DENTON INDEPENDENT SCHOOL DISTRICT for the Fiscal Year Ended June 30, 2016 Prepared by: Division of Administrative Services Deborah Monschke Assistant Superintendent of Administrative Services 1307 N. Locust Street · Denton, Texas 76201 DENTON INDEPENDENT SCHOOL DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS INTRODUCTORY SECTION Letter ofTransmittal. I ASBO Certificate ofExcellence 8 GFOA Certificate ofAchievement 9 Organizational Chart 10 Elected Officials 11 Appointed Officials 12 Consultants and Advisors 13 FINANCIAL SECTION Independent Auditors' Report 15 Management's Discussion and Analysis 17 Basic Financial Statements: Government-wide Financial Statements: Statement ofNet Position 27 Statement ofActivities , 28 Fund Financial Statements: Balance Sheet - Governmental Funds 30 Reconciliation ofthe Governmental Funds Balance Sheet to the Statement ofNet Position 33 Statement ofRevenues, Expenditures and Changes in Fund Balances - Governmental Funds 34 Reconciliation ofthe Governmental Funds Statement ofRevenues, Expenditures, and Changes in Fund Balances to the Statement ofActivities 36 Statement ofNet Position - Proprietary Funds 38 Statement ofRevenues, Expenses, and Changes in Fund Net Position - Proprietary Funds , 39 Statement ofCash Flows - Proprietary Funds 40 Statement ofFiduciary Assets and Liabilities 42 Notes to the Financial Statements 43 Required Supplementary Information: Budgetary Comparison Schedule - General Fund 79 Schedule ofthe District's Proportionate Share ofthe Net Pension Liability - Teachers Retirement System 80 Schedule ofthe District Contributions - Teachers Retirement System 81 Notes to the Required Supplementary Information 82 Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental Funds 86 Combining Statement ofRevenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 92 Combining Statement ofNet Position - Nonmajor Enterprise Funds 98 Combining Statement ofRevenues, Expenses, and Changes in Fund Net Position - Nonmajor Enterprise Funds 99 Combining Statement ofCash Flows - Nonmajor Enterprise Funds 100 Combining Statement ofNet Position - Internal Service Funds 101 Combining Statement ofRevenues, Expenses, and Changes in Fund Net Position - Internal Service Funds 102 TABLE OF CONTENTS (CONTINUED) Combining and Individual Fund Statements and Schedules (Continued): Combining Statement ofCash Flows - Internal Service Funds 103 Budgetary Comparison Schedule - Debt Service Fund 104 Budgetary Comparison Schedule - Child Nutrition Fund 105 Statement ofChanges in Assets and Liabilities - Agency Funds 106 STATISTICAL SECTION (Unaudited) Statistical Contents 107 Net Position by Component 108 Changes in Net Position 110 Fund Balances ofGovernmental Funds 114 Changes in Fund Balances ofGovernmental Funds 116 Assessed Value - Real and Personal Property 118 Property Tax Rates Direct and Overlapping Governments 119 Principal Property Taxpayers 120 Property Tax Levies and Collections 122 Ratio ofBonded Debt to Assessed Value and Bonded Debt per Capita 124 Direct and Overlapping Governmental Activities Debt... 127 Legal Debt Margin Information 128 Demographic and Economic Statistics 130 Capital Asset Information 131 Principal Employers 132 Operating Statistics 134 StaffInformation 136 Teacher Salary Data 138 Enrollment and Attendance Data 139 Miscellaneous Statistical Data 140 SINGLE AUDIT SECTION Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit ofFinancial Statements Performed in Accordance with Government Auditing Standards 141 Independent Auditors' Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 143 Schedule of Findings and Questioned Costs 145 Status ofPrior Year Findings 146 Schedule ofExpenditures ofFederal Awards 147 Notes to Schedule ofExpenditures ofFederal Awards 149 INTRODUCTORY SECTION DENTON INDEPENDENT SCHOOL DISTRICT Office of the Assistant Superintendent Administrative Services P.O. Box 2387 Denton, Texas 76202 December 16, 2016 To the Board of Trustees and the Citizens of the Denton Independent School District: The Comprehensive Annual Financial Report (CAFR) of the Denton Independent School District (“DISD” or the “District”) for the year ended June 30, 2016, is hereby submitted. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the District. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the DISD. All disclosures necessary to enable the reader to gain an understanding of the District’s financial activities have been included. The DISD is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 as amended in 1996 and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). Information relating to this single audit, including the schedule of expenditures of federal awards, findings and recommendations and independent auditors’ reports on internal controls and compliance with applicable laws and regulations, is included in the single audit section. This report includes all funds of the Denton Independent School District. The DISD maintains a fully accredited early childhood through grade twelve program and is accredited by both the Texas Education Agency and AdvancED. The District provides a full range of services. These services include general education for grades pre-kindergarten through twelve, special education for students from birth through twenty-one years of age, accelerated education for students requiring remediation, a variety of technical courses and a number of elective and advanced placement courses for those students who wish additional experiences or challenges. Generally Accepted Accounting Principles (GAAP) requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The District’s MD&A can be found immediately following the report of the independent auditors. 1 GOVERNING BODY The seven members of the Board of Trustees serve - without compensation - a three-year term of office. On a rotating basis, two or three places are filled during annual elections held in May. Vacancies may be filled by appointment until the next election. Candidates must be qualified voters of the District. Regular meetings are typically scheduled the second and fourth Tuesdays of the month and are held in the District’s administration building. Special meetings and study sessions are scheduled as needed and announced in compliance with public notice requirements. The Board has final control over local school matters limited only by the state legislature, by the courts and by the will of the people as expressed in school Board elections. Board decisions are based on a majority vote of the quorum present. Generally, the Board adopts policies, sets direction for curriculum, employs the Superintendent and oversees the operations of the District and its schools. Besides general Board business, Trustees are charged with numerous statutory regulations including appointing the tax assessor/collector, calling trustee and other school elections and canvassing the results, organizing the Board and electing its officers. The Board is also responsible for setting the tax rate, setting salary schedules and acting as a board of appeals in personnel and student matters, confirming recommendations for textbook adoptions and adopting and amending the annual budget. ECONOMIC CONDITION AND OUTLOOK The Denton Independent School District is located in the city of Denton, in Denton County of North Central Texas and encompasses approximately 180 square miles. While the major portion of the District boundaries includes the 97.411 square miles of the City of Denton, all or part of the following additional cities, communities or major developments in Denton County comprise the 180 square miles: Argyle, Bartonville, Copper Canyon, Corinth, Cross Roads, Cross Oaks Ranch, Double Oak, Lantana, Lincoln Park, Oak Point, Prosper, Providence, Paloma Creek, Robson Ranch, Savannah and Shady Shores. According to the U.S. Census Bureau and the City of Denton, Denton County’s population increased 3.42 percent from 2014 to 2015 census estimate, which resulted in a population of 780,612 in 2015 compared to 754,792 in 2014. The city of Denton reported a growth rate of 2.21 percent for the same period of time with a population of 131,044, compared to 128,205 in 2014. Denton has a diverse labor pool of both skilled and professional workers. At June 30, 2016, the Texas Workforce Commission reported an available workforce in the City of Denton of 71,213 with an unemployment rate