Comprehensive Annual Financial Report
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Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 SPRING BRANCH INDEPENDENT SCHOOL DISTRICT 955 Campbell Road, Houston, Texas 77024 Prepared By The Department of Financial Services: Karen Wilson Associate Superintendent for Finance SPRING BRANCH INDEPENDENT SCHOOL DISTRICT TABLE OF CONTENTS Exhibit/ Page Table Introductory Section Principal Officials and Advisors i Certificate of Board ii Transmittal Letter iii GFOA Certificate of Achievement viii Organizational Chart x Financial Section Report of Independent Auditors 1 Management’s Discussion and Analysis (Required Supplementary Information) 5 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position 17 A-1 Statement of Activities 18 B-1 Governmental Fund Financial Statements: Balance Sheet 20 C-1 Reconciliation of Balance Sheet for Governmental Funds to Statement of Net Position 23 C-2 Statement of Revenues, Expenditures, and Changes in Fund Balance 24 C-3 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of Governmental Funds to the Statement of Activities 26 C-4 Proprietary Fund Financial Statements: Statement of Net Position 27 D-1 Statement of Revenues, Expenses and Changes in Net Position 28 D-2 Statement of Cash Flows 29 D-3 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position 30 E-1 Statement of Changes in Fiduciary Net Position 31 E-2 Notes to the Financial Statements 33 F-1 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances - Original Budget, Amended Final (GAAP Basis) and Actual - General Fund 80 G-1 Notes to Required Supplementary Information 81 G-2 Schedule of the District’s Proportionate Share of the Net Pension Liability 82 G-3 Notes to Required Supplementary Information - Pension 83 G-4 Schedule of District Contributions 84 G-5 Schedule of the District’s Proportionate Share of the Net OBEP Liability 85 G-6 Schedule of District Contributions - OPEB 86 G-7 SPRING BRANCH INDEPENDENT SCHOOL DISTRICT TABLE OF CONTENTS (CONTINUED) Exhibit/ Page Table Financial Section (continued) Other Supplementary Information: Individual Fund Statements and Budget Comparisons: Schedule of Revenues, Expenditures and Changes in Fund Balance - Original Budget, Amended Final and Actual - Debt Service Fund 88 H-1 Schedule of Revenues, Expenditures and Changes in Program Balances - Original Budget, Amended Final and Actual - Food Service Program 90 H-2 Statement of Changes in Assets and Liabilities - Agency Funds 94 H-3 Required TEA Schedules Schedule of Delinquent Taxes Receivable 96 J-1 Statistical Section Net Position by Component, Last Ten Fiscal Years 102 1 Changes in Net Position, Last Ten Fiscal Years 104 2 Fund Balances of Governmental Funds 108 3 Changes in Fund Balances of Governmental Funds 110 4 Assessed Value and Actual Value of Taxable Property 115 5 Property Tax Rates - Direct and Overlapping Governments 116 6 Principal Taxpayers 118 7 Property Tax Levies and Collections 119 8 Ratios of Outstanding Debt by Type 120 9 Ratios of Net General Obligation Bonded Debt Outstanding 121 10 Computation of Estimated Direct and Overlapping Debt 122 11 Demographic and Economic Statistics 123 12 Principal Employers 125 13 Full-Time Equivalent District Employees by Position 126 14 Operating Statistics 128 15 Teacher Base Salaries 131 16 School Building Information 132 17 SPRING BRANCH INDEPENDENT SCHOOL DISTRICT PRINCIPAL OFFICIALS AND ADVISORS BOARD OF TRUSTEES Pam Goodson, President Community Volunteer/Former Educator Chris Gonzalez, Vice President Marketing and Education Consultant Minda Caesar, Secretary Community Volunteer/Parent J. Carter Breed, Trustee Owner/Realtor J. Carter Breed Properties Reverend Josef D. Klam, Trustee Executive Pastor Chapelwood United Methodist Church Karen Peck, Trustee Of Counsel/Attorney Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing, P.C Chris Vierra, Trustee Communications Consultant/Parent ADMINISTRATION Jennifer Blaine, Ed. D., Superintendent of Schools Karen Wilson, CPA, Associate Superintendent for Finance CONSULTANTS AND ADVISORS Whitley Penn, L.L.P. Houston, Texas - Independent Auditors Hunton Andrews Kurth, L.L.P. Houston, Texas - Bond Counsel Post Oak Municipal Advisors LLC Houston, Texas – Co-Financial Advisor Masterson Advisors LLC Houston, Texas – Co-Financial Advisor i Spring Branch ISD 2019 CAFR November 18, 2019 To the Board of Trustees and Taxpayers of the Spring Branch Independent School District: The Texas Education Code requires that all school districts file a complete set of financial statements with the Texas Education Agency (TEA) within 150 days of the close of each fiscal year. The financial statements must be presented in conformity with generally accepted accounting principles (GAAP) and audited by a firm of licensed certified public accountants in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller General of the United States. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report of the Spring Branch Independent School District (the “District”) for the fiscal year ended June 30, 2019. This report consists of management’s representations concerning the finances of the District. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the District has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and 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 rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The District’s financial statements have been audited by Whitley Penn L.L.P., CPAs, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the District for the fiscal year ended June 30, 2019, are free of material misstatement. The independent audit involved 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 auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion and that the District’s financial statements for the period ended June 30, 2019, 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 of the District was part of a broader, federally-mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the District’s separately issued Single Audit Report. iii Spring Branch ISD 2019 CAFR 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. Profile of the District Spring Branch Independent School District (SBISD) encompasses about 44 square miles of wooded suburbs and vibrant business and retail districts located west of downtown Houston in Harris County along Interstate 10, also known as the Katy Freeway. About 200,000 district residents live in this region of west Houston and in the incorporated villages of Bunker Hill, Hedwig, Hilshire, Hunters Creek, Piney Point and Spring Valley. Many families have lived in the Memorial/Spring Branch area all their lives, while others are new to the area or are relocating for career reasons. Others choose to return to this school district because they rank high quality education as a top priority for their children. In addition, Spring Branch offers taxpayers every tax exemption allowed by Texas law, which results in lower school taxes for homeowners. The school district follows a small neighborhood school concept where attendance areas have been established for each individual school. As an established community, attendance zones rarely change in the school district. SBISD educates children from all over the world, and its student body reflects the increasing diversity of Texas and the nation. The district had a 2018-19 enrollment of 34,681 students.