For the Fiscal Year Ended June 30, 2011
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For the Fiscal Year Ended June 30, 2011 For the Fiscal Year Ended June 30, 2011 Dr. Ralph H. Draper Superintendent of Schools Christine A. Porter, CPA, RTSBA Associate Superintendent, Financial Services Division Ann Westbrooks, CPA, RTSBA Executive Director of Finance, Finance Department Mary Welch Director of Accounting, Finance Department SPRING INDEPENDENT SCHOOL DISTRICT PRINCIPAL OFFICIALS & ADVISORS BOARD OF TRUSTEES Justine Durant, President Regional Director, Cigna Healthcare of Texas, Inc. Jana Anders, Vice-President Vice President, Investex Credit Union Jeffrey Mitchell, Secretary Independent Consultant Calvin Tang, Assistant Secretary Chief Financial Officer, NACE International Ron Crier, Member Consultant, HouData Mel Smith, ESQ., Member Attorney, Espey & Associates, P.C. Dr. Deborah Jensen, Member Co-Director of Programming & Implementation – Southeast Regional T-STEM Center ADMINISTRATION Dr. Ralph H. Draper, Superintendent Dr. Dalane Bouillon, Associate Superintendent for Curriculum & Instructional Services Christine A. Porter, Associate Superintendent for Financial Services Renee Coleman, Associate Superintendent for Human Resources Regina Curry, Associate Superintendent for Public Relations and Technology Ruthie Foreman, Area Superintendent Ann Sandoval, Area Superintendent CONSULTANTS AND ADVISORS Null-Lairson, Auditors Thompson & Horton, L.L.P., Legal Counsel Bracewell & Giuliani L.L.P., Legal Counsel Rogers, Morris & Grover, L.L.P., Legal Counsel Perdue, Brandon, Fielder, Collins & Mott, L.L.P., Tax Attorneys Vinson & Elkins L.L.P., Bond Counsel RBC Capital Markets, Financial Advisors i SPRING INDEPENDENT SCHOOL DISTRICT TABLE OF CONTENTS Page Number Exhibit I. INTRODUCTORY SECTION Principal Officials and Advisors i Table of Contents ii Letter of Transmittal 1 Organizational Chart 15 GFOA Certificate of Achievement 17 ASBO Certificate of Excellence 19 II. FINANCIAL SECTION Independent Auditors' Report 21 Management's Discussion and Analysis (Unaudited) 23 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Assets 35 A-1 Statement of Activities 36 A-2 Fund Financial Statements: Balance Sheet - Governmental Funds 37 B-1 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 38 B-2 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 39 B-3 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 40 B-4 Statement of Net Assets - Proprietary Funds 41 B-5 Statement of Revenues, Expenses and Changes in Net Assets - Proprietary Funds 42 B-6 Statement of Cash Flows - Proprietary Funds 43 B-7 Statement of Fiduciary Assets and Liabilities - Fiduciary Fund 44 B-8 Notes to Basic Financial Statements 45 B-9 (Continued) ii SPRING INDEPENDENT SCHOOL DISTRICT TABLE OF CONTENTS (Continued) Page Number Exhibit REQUIRED SUPPLEMENTARY INFORMATION (Unaudited) Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 75 C-1 Notes to Required Supplementary Information 76 C-2 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Major Governmental Funds: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Debt Service Fund 77 D-1 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Capital Projects Fund 78 D-2 Non-Major Governmental Funds: Combining Balance Sheet - Non-Major Governmental Funds - Special Revenue Funds 80 E-1 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non-Major Governmental Funds - Special Revenue Funds 86 E-2 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Child Nutrition Fund 92 E-3 Internal Service Funds: Combining Statement of Net Assets - Internal Service Funds 93 F-1 Combining Statement of Revenues, Expenses and Changes in Net Assets - Internal Service Funds 94 F-2 Combining Statement of Cash Flows - Internal Service Funds 95 F-3 Agency Funds: Statement of Changes in Assets and Liabilities - Fiduciary Funds 97 G-1 OTHER SUPPLEMENTARY INFORMATION Compliance Schedules: Schedule of Delinquent Taxes Receivable 100 H-1 Indirect Cost Computation Schedule 102 H-2 (Continued) iii SPRING INDEPENDENT SCHOOL DISTRICT TABLE OF CONTENTS (Concluded) Page Number Table III. STATISTICAL SECTION (Unaudited) Financial Trends: Net Assets by Component - Last Nine Fiscal Years 104 I Changes in Net Assets - Last Nine Fiscal Years 106 II Fund Balances, Governmental Funds - Last Ten Fiscal Years 108 III Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years 110 IV Revenue Capacity: Assessed Value and Actual Value of Taxable Property - Last Ten Fiscal Years 113 V Property Tax Rates - Direct and Overlapping Governments (Per $100 of Assessed Valuation) - Last Ten Fiscal Years 114 VI Principal Taxpayers - Current Fiscal Year and Nine Years Ago 116 VII Property Tax Levies & Collections - Last Ten Fiscal Years 117 VIII Debt Capacity: Outstanding Debt by Type - Last Ten Fiscal Years 118 IX Ratios of Net General Obligation Bonded Debt Outstanding Last Ten Fiscal Years 119 X Computation of Estimated Direct and Overlapping Debt 120 XI Demographic and Economic Information Demographic and Economic Information - Last Ten Fiscal Years 122 XII Principal Employers - Current and Four Years Ago 123 XIII Operating Information Full-Time Equivalent District Employees by Type - Last Eight Fiscal Years 124 XIV Operating Statistics - Last Ten Fiscal Years 125 XV Teacher Base Salaries - Last Ten Fiscal Years 126 XVI School Building Information - Last Ten Fiscal Years 127 XVII Spring ISD Map and Facility Locations 130 XVIII iv Spring Independent School District www.springisd.org 16717 Ella Blvd. Houston, Texas 77090 Tel. 281.891-6075 Fax 281.891.6066 November 8, 2011 The Honorable Board of Trustees Spring Independent School District 16717 Ella Blvd. Houston, Texas 77090 Dear Board Members: The Comprehensive Annual Financial Report of the Spring Independent School District (the “District”, “Spring ISD” or “SISD”), Houston, Texas, for the fiscal year ended June 30, 2011, is submitted herewith. The Comprehensive Annual Financial Report is management’s report of financial operations to the Board of Trustees (the “Board”), taxpayers, grantor agencies, employees, the Texas Education Agency (“TEA”), and other interested parties. The government-wide financial statements in this report provide an overview of the District’s governmental activities, while detailed fund financial statements describe specific activities of each fund group used in accounting for the District’s financial transactions. This report was prepared by the District’s Finance Department in accordance with generally accepted accounting principles (“GAAP”) and reporting standards as promulgated by the Governmental Accounting Standards Board (“GASB”). Responsibility for the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the District. We believe that the data, as presented, is accurate in all material respects; that information is presented in a manner designed to set forth fairly the financial position and results of operations of the District as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain the maximum understanding of the District’s financial activities have been included. In order to provide a reasonable basis for making these representations of responsibility, management of the District has established a comprehensive internal control framework that is designed to protect the District’s assets from loss, theft or misuse. Additionally, the internal control framework is designed to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the District’s comprehensive framework of internal controls has been designed to provide reasonable assurance rather than absolute assurance that the financial statements will be free from material misstatement. To the best of our knowledge and belief, this financial report is complete and reliable in all material respects. 1 The financial statements of the District have been audited by Null-Lairson, a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the District for the fiscal year ended June 30, 2011, are free of material misstatement. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the District’s financial statements for the fiscal year ended June 30, 2011, are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. The independent audit of the financial statements is part of a broader, federally mandated “Single Audit” designed to meet the special need of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report