TEXAS DEPARTMENT OF INFORMATION RESOURCES ANNUAL FINANCIAL REPORT For the Year Ending August 31, 2019 Amanda Crawford Executive Director Nick Villalpando Chief Financial Officer Contents Pages(s) # LETTER OF TRANSMITTAL GENERAL PURPOSE FINANCIAL STATEMENTS Exhibit I-Combined Balance Sheet/Statement of Net Assets - Governmental Funds 1 Exhibit II-Combined Statement of Revenues, Expenditures, and Changes in Fund 2 Balances/Statement of Activities - Governmental Funds Exhibit VI-Combined Statement of Net Assets – Agency Funds 3 COMBINING FINANCIAL STATEMENTS Exhibit J-1: Combining Statement of Changes in Assets and Liabilities – Agency Fund 4 NOTES TO THE FINANCIAL STATEMENTS (APPLICABLE NOTES ONLY) 1 Summary of Significant Accounting Policies 5-9 2 Capital Assets 10 5 Long-Term Liabilities 11 8 Leases 12 12 Interfund Activity and Transactions 13 13 Continuance Subject to Review 14 17 Risk Management 15 ADDENDUM Addendum 1: Cooperative Contracts Customer List 16-54 UNAUDITED Combined Financial Statements DEPARTMENT OF INFORMATION RESOURCES (#313) EXHIBIT I - COMBINED BALANCE SHEET/STATEMENT OF NET ASSETS - GOVERNMENTAL FUNDS ALL FUND TYPES AND ACCOUNT GROUPS August 31, 2019 Governmental Fund Types GOVERNMENTAL GENERAL FUNDS FUNDS TOTAL GENERAL GENERAL (0001) (0001) ASSETS Current Assets: Cash and Cash Equivalents: Legislative Appropriations 35,835,157.63 35,835,157.63 Receivables From: Accounts Receivable 66,636,074.80 66,636,074.80 Interfund Receivable 555,328.61 555,328.61 Consumables Inventory 9,301.96 9,301.96 Merchandise Inventory 362,484.42 362,484.42 Total Current Assets 103,398,347.42 103,398,347.42 Non-Current Assets: Total Non-Current Assets - - TOTAL ASSETS 103,398,347.42 103,398,347.42 LIABILITIES AND FUND BALANCES LIABILITIES Current Liabilities: Payables From: Vouchers Payable 3,854,851.72 3,854,851.72 Accounts Payable 73,340,497.63 73,340,497.63 Payroll Payable 1,792,953.11 1,792,953.11 Interfund Payables 555,328.61 555,328.61 Total Current Liabilities 79,543,631.07 79,543,631.07 Non-Current Liabilities: Total Non-Current Liabilities - - TOTAL LIABILITIES 79,543,631.07 79,543,631.07 Fund Financial Statement FUND BALANCES Reserved For: Nonspendable 371,786.38 371,786.38 Unassigned 23,482,929.97 23,482,929.97 23,854,716.35 23,854,716.35 TOTAL FUND BALANCES 23,854,716.35 23,854,716.35 TOTAL LIABILITIES AND FUND BALANCES 103,398,347.42 103,398,347.42 The accompanying Notes to the Financial Statements are an integral part of this financial statement. 1 UNAUDITED DEPARTMENT OF INFORMATION RESOURCES (#313) EXHIBIT II - COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES/STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS For the Fiscal Year Ended August 31, 2019 Governmental Fund Types GOVERNMENTAL GENERAL FUNDS FUNDS TOTAL REVENUES Original Legislative Appropriation $ 1,700,000.00 $ 1,700,000.00 Additional Appropriations 2,726,224.65 2,726,224.65 Federal Pass-Through Revenue 166,887.13 166,887.13 Licenses, Fees, and Permits 291,752,483.74 291,752,483.74 Sales of Goods and Services 128,984,274.19 128,984,274.19 TOTAL REVENUES $ 425,329,869.71 $ 425,329,869.71 EXPENDITURES Salaries and Wages 16,792,375.44 16,792,375.44 Payroll Related Costs 4,598,891.40 4,598,891.40 Professional Fees and Services 280,743,014.08 280,743,014.08 Travel 178,541.04 178,541.04 Materials and Supplies 1,765,323.02 1,765,323.02 Communication and Utilities 101,989,232.26 101,989,232.26 Repairs and Maintenance 3,037,625.28 3,037,625.28 Rentals and Leases 1,412,361.48 1,412,361.48 Printing and Reproduction 14,098.11 14,098.11 Other Expenditures 571,225.87 571,225.87 Capital Outlay 732,064.34 732,064.34 TOTAL EXPENDITURES$ 411,834,752.32 $ 411,834,752.32 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 13,495,117.39 13,495,117.39 OTHER FINANCING SOURCES (USES) Appropriations Lapsed (200,000.00 ) (200,000.00) TOTAL OTHER FINANCING SOURCES (USES) (200,000.00) (200,000.00) NET CHANGES IN FUND BALANCE/NET ASSETS 13,295,117.39 13,295,117.39 FUND FINANCIAL STATEMENT-FUND BALANCES Fund Balances - Beginning 10,559,598.96 10,559,598.96 FUND BALANCES, AUGUST 31, 2019 $ 23,854,716.35 $ 23,854,716.35 The accompanying Notes to the Financial Statements are an integral part of this financial statement. 2 UNAUDITED Department of Information Resources (313) Exhibit VI - Combined Statement of Net Assets - Agency Funds August 31, 2019 Agency Funds (Exhibit J-1) Totals ASSETS Cash and Cash Equivalents: Cash in State Treasury$ 9,344,643.65 $ 9,344,643.65 Accounts Receivable - Unbilled (1,042,717.76) (1,042,717.76) Total Current Assets 8,301,925.89 8,301,925.89 Total Assets$ 8,301,925.89 $ 8,301,925.89 LIABILITIES Funds Held for Others$ 8,301,925.89 8,301,925.89 Total Current Liabilities 8,301,925.89 8,301,925.89 Total Liabilities$ 8,301,925.89 $ 8,301,925.89 The accompanying notes to the financials statements are an integral part of this statement. 3 UNAUDITED Department of Information Resources (313) Exhibit J-1 - Combining Statement of Changes in Assets and Liabilities - Agency Funds August 31, 2019 Beginning Ending Balance Balance September 1, 2018 Additions Deductions August 31, 2019 Texas.Gov (0001) ASSETS Cash in State Treasury - 103,016,054.00 93,675,214.35 9,340,839.65 Accounts Receivable, Net 197,442.64 1,240,160.40 (1,042,717.76) Total Assets$ - $ 103,213,496.64 $ 94,915,374.75 $ 8,298,121.89 LIABILITIES Accounts Payable 26,075,544.52 26,075,544.52 - Funds Held for Others - 103,223,496.64 94,925,374.75 8,298,121.89 Total Liabilities$ - $ 129,299,041.16 $ 121,000,919.27 $ 8,298,121.89 Child Support Deductions (0807) ASSETS Cash in State Treasury 5,888.00 68,339.07 70,423.07 3,804.00 Total Assets$ 5,888.00 $ 68,339.07 $ 70,423.07 $ 3,804.00 LIABILITIES Accounts Payable 64,535.07 64,535.07 0.00 Funds Held for Others 5,888.00 68,339.07 70,423.07 3,804.00 Total Liabilities$ 5,888.00 $ 132,874.14 $ 134,958.14 $ 3,804.00 Suspense Fund (0900) ASSETS Cash in State Treasury - 47,462.14 47,462.14 - Total Assets$ - $ 47,462.14 $ 47,462.14 $ - LIABILITIES Funds Held for Others - 47,462.14 47,462.14 - Total Liabilities$ - $ 47,462.14 $ 47,462.14 $ - Totals-All Agency Funds ASSETS Cash in State Treasury 5,888.00 103,131,855.21 93,793,099.56 9,344,643.65 Accounts Receivable, Net - 197,442.64 1,240,160.40 (1,042,717.76) Total Assets$ 5,888.00 $ 103,329,297.85 $ 95,033,259.96 $ 8,301,925.89 LIABILITIES Accounts Payable 0.00 26,140,079.59 26,140,079.59 - Funds Held for Others 5,888.00 103,339,297.85 95,043,259.96 8,301,925.89 Total Liabilities$ 5,888.00 $ 103,339,297.85 $ 95,043,259.96 $ 8,301,925.89 The accompanying notes to the financials statements are an integral part of this statement. 4 UNAUDITED Texas Department of Information Resources (313) Notes to the Financial Statements NOTE 1: Summary of Significant Accounting Policies Entity In 1989, the 71st Legislature established the Department of Information Resources (DIR) through the Information Resources Management Act [TEX. GOV’T. CODE, Chapter 2054]. DIR is an agency of the State of Texas and its financial records comply with state statutes and regulations. This includes compliance with the Texas Comptroller of Public Accounts’ Reporting Requirements for state agencies. DIR is an executive agency governed by a seven member voting board appointed by the Governor with the advice and consent of the Senate. Two groups each composed of three ex-officio members serve on the board on a rotating basis. The Legislature charged the DIR with the mission to provide leadership in and coordination of information resources management within the state government. Toward this goal, DIR is committed to developing and implementing innovative management strategies for the efficient, effective and accountable use of information technology in state government. The department, in alliance with representatives from government and industry, identifies major information resources issues facing the state, performs analytical research, and establishes policies for the statewide implementation of technology. The following financial statements have been prepared to conform with Generally Accepted Accounting Principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). Due to the statewide requirements embedded in Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments, the Comptroller of Public Accounts does not require the accompanying annual financial report to comply with all the requirements in this statement. The financial report will be considered for audit by the State Auditor as part of the audit of the State of Texas Comprehensive Annual Financial Report; therefore, an opinion has not been expressed on the financial statements and related information contained in this report. Blended Component Units: No component units have been identified which should have been blended into an appropriated fund. Fund Structure The accompanying financial statements are presented on the basis of funds, each of which is considered a separate accounting entity. 5 UNAUDITED Texas Department of Information Resources (313) Governmental Fund Types & Government-wide Adjustment Fund Types General Fund: The general fund is the principal operating fund used to account for most of the state’s general activities.