2017 School FIRST Report

Port Aransas Independent School District

Port Aransas, Texas

Status: PASSED Rating: A = Superior District Score: 100

A Financial Management Report

For the Year Ending August 31, 2016

Sharon McKinney, Superintendent of Schools Carol Sue Hipp, Executive Director of Business & Operations

December 8, 2017 The Honorable Board of Trustees and Taxpayers of Port Aransas ISD: The 2017 Schools FIRST Rating is being presented for your information. This is the 15th year of School FIRST (Financial Integrity Rating System of Texas), a financial accountability system for Texas school districts developed by the Texas Education Agency in response to Legislation Actions. The 2017 rating was based upon analysis of financial reporting and compliance for the 2015-2016 school year. Port Aransas ISD received an “A” for “Superior” rating for 2016, reaching a score of 100 out of 100 possible points. The primary goal of School FIRST is to achieve quality performance in the management of school districts’ financial resources, a goal made more significant due to the complexity of accounting associated with Texas’ school finance system. The information provided by the Schools FIRST system will guide us in our continued efforts to make the most of each taxpayer dollar. Most Respectfully Submitted,

Carol Sue Hipp, CPA Executive Director of Business and Operations

Port Aransas Independent School District

Annual FIRST Report for 2015-2016 Fiscal Year

Table of Contents

Page

Introduction 1 Section I - A. Financial Accountable Rating Worksheet 2015-2016 2-3 B. Overview of Worksheet 4 Section II - Superintendent’s Current Employment Contract 5-11 Section III - Reimbursements received by the Superintendent and Board Members 12 Section IV- Outside Compensation and/or Fees Received by the

Superintendent for Professional Consulting and/or other Professional Services 13

Section V- Gifts Received by Executive Officers and Board Members 13 Section VI- Business Transactions between the District and Board

Members 13 Summary 14

Introduction

During the 77th regular session of the Texas Legislature (2001), Senate Bill 218 was passed which requires each school district to prepare an annual financial accountability report. The School Financial Rating System of Texas (FIRST) is designed to encourage public schools to better manage their financial resources in order to provide the maximum allocation possible for direct instructional purposes.

Many business-related issues are covered in this report. The primary reporting tool, however, is the Financial Accountability Ratings Worksheet (Section I of this report). This worksheet was developed by representatives of the Texas Education Agency (TEA), the Texas Business & Education Council (TBEC) and the Texas Association of School Business Officials (TASBO). It is administered by TEA and calculated using information submitted to the Agency via our PEIMS submission each year and other documentation procured by TEA. The accuracy of PEIMS data has always been critical on the student side of the submission, and this reporting requirement adds a high degree of importance to our financial submission each year.

This year, the FIRST ratings are based on fifteen financial indicators, such as

administrative cost expenditures; the accuracy of the district’s financial information submitted to TEA; and any financial variables or material weaknesses in internal controls as determined by an external auditor. Based on the submitted information, the district is rated according to point received and the rating is then assigned.

Currently, Port Aransas ISD enjoys the highest rating of “Superior”, scoring 100 out of a possible 100 points and answering “Yes” to all critical indicators.

Section I ‐ Financial Accountable Rating Worksheet 2015‐2016 DATA

Score Information

1Was the complete annual financial report (AFR) and data submitted to TEA within 30 days of the January 28 deadline?

YesYes                         

Submitted Jan. 18, 2017

2PAISD must pass 2.A to pass this indicator.  PAISD fails indicator number 2 if it responds "no" to indicator 2.A. or to both indicators 2.A and 2.B.

2.AWas there an unmodified opinion in the AFR on the financial statements as a whole?  

YesYes                         

Unmodified Opinion issued October 28, 2016

2.BDid the external independent auditor report that the AFR was free of any instances of material weaknesses in internal controls over financial reporting and compliance for local, state, or federal funds?

Yes No Material Weaknesses

3Was PAISD in compliance with the payment terms of all debt agreements at fiscal year end?

Yes Yes    

4Did PAISD make timely payment to Teachers Retirement System, Texas Workforce Commission, Internal Revenue Service, and other government agencies

Yes Yes

5Was the total unrestricted net asset balance in the governmental activities column in the 'Statement of Net Assets' greater than zero?

YesYes                         

Unrestricted Net Assets = $4,932,548

6Was the number of days of cash on hand and current investments in the general fund for PAISD sufficient to cover operating expenditures?               >=90 = 10 points

10

Cash + Current Investments = 5,857,856 / Total Expenses 22,146,215 x 365 days = 

96.5455

7Was the measure of current assets to current liabilities ratio for PAISD sufficient to cover short‐term debt? >=3 = 10 Points

10Current Assets 8,382,312 / 

Current Liabilities 1,537,966 = 5.4503

8Was the ratio of long‐term liabilities to total assets for PAISD sufficient to support long‐term solvency? <=0.60 = 10 points

10

(Long Term Liabilities 6,274,413 ‐ Net Pension Liability 1,244,344) / Total Assets 19,045,288 = .27

9Did the PAISD's general fund revenues equal or exceed expenditures?   >= 0% = 10 points

10Total Revenue 23,065,149  

Total Expenditures 22,146,215 = Yes

2015‐2016

Status: Passed

PORT ARANSAS ISD(178908)

2016‐2017 District Status Detail

Financial Integrity Rating System of Texas

Rating: A=Superior Passing Score: 60District Score: 100

10Was the debt service coverage ratio sufficient to meet the required debt service?

10 Yes

11Was the PAISD's administrative cost ratio equal to or less than the threshold ratio?

10PAISD Admin Cost Ratio = .1949 which is < .2404

12Did PAISD have a 15% decline in student to staff ratio over 3 years?    >0 = 10 points

102015‐16 Enrollment (545) ‐ 

2013‐14 Enrollment (522)     > 0

13Did the comparison of Public Education Information Management System (PEIMS) data to like information in PAISD's AFR result in a total variance of less than 3 percent of all expenditures by function?   <3.00% = 10 points

10Less than .03% 

23/22,146,220= .000001%

14Did the external Independent auditor indicate the AFR was free of any instances of material noncompliance for grants, contract, and laws related to local, state, or federal funds?

10 No Material Weaknesses

15Did PAISD not receive an adjusted repayment schedule for more than one fiscal year for an over allocation of Foundation School Program funds as a result of a financial hardship?

10No Adjustment Schedule 

Received

Score 100

A = Superior 70‐100 PointsB = Above Standard 50‐69 PointsC = Meets Standards 34‐49 PointsF = Substandard Achievement <31 Points

Overview of the Worksheet

Critical Indicators— Indicators #1 through #5 are the critical indicators. Any “No “response in

this category is a signal indicator of fiscal distress. These five criteria revolve around the audit report, fund balance and the auditor’s findings. If General Fund Balance is greater than zero and the auditors issue a “clean” opinion, a District will pass the critical indicators. For the 2015-2016 fiscal year, Port Aransas ISD had unrestricted net assets of $4.9 million and passed all other critical indicator criteria.

Fiscal Responsibility— Criteria #6 through #15 concern fiscal responsibility. Cash on hand, current assets to current liabilities, administrative cost ratio,

debt service ratio and internal controls are a few of the financial ratios and tests that are just in rating the points in this section. See the previous worksheet for detail calculations and points accumulated.

For the Twelve‐Month PeriodEnded August 31, 2017

Section III - Reimbursements received by the Superintendent and Board Members

Sharon McKinney Alfredo Gonzalez Lisa Shelton Rick AdamsSuperintendent Board Member 1 Board Member 2 Board Member 3

Meals 268.73                                138.72                            138.72                           13.44                         Lodging 2,435.76                            590.47                            590.47Transportation 97.63                                 Motor Fuel 200.00                               Other 2,847.70                           325.00                          325.00                         Total 5,849.82$                         1,054.19$                      1,054.19$                      13.44$                      

Michele Lorette Kelly F. Owens Marnie Pate Deana ErdnerBoard Member 4 Board Member 5 Board Member 6 Board Member 7

Meals 118.71                                30.71                              118.71                           30.71                         Lodging 590.48                                590.48                          TransportationMotor FuelOther 600.00                               709.85                         Total 1,309.19$                         30.71$                           1,419.04$                      30.71$                      

Marc HofhiensBoard Member 8

Meals 30.71                                 LodgingTransportationMotor FuelOtherTotal 30.71$                              

All “reimbursements” expenses, regardless of the manner of payment, including direct pay, credit card, cash, and purchase order are to be reported.  Items to be reported per category include:

Meals – Meals consumed Lodging ‐ Hotel charges.Transportation ‐ Airfare, car rental (can include fuel on rental, taxis, mileage reimbursements, leased cars,               parking and tolls).Motor fuel – Gasoline.Other: ‐ Registration fees, association dues, club dues, internet service, fax machine, and other reimbursements             (or on‐behalf of) to the superintendent and board member not defined above.

Description of Reimbursements

Description of Reimbursements

Description of Reimbursements

PORT ARANSAS ISD (178908)Financial Integrity Rating System of Texas

For the Twelve-Month PeriodEnded August 31, 2017

Amount ReceivedSharon McKinney $ -0-

Superintendent Sharon McKinney $ -0-

Board Member 1 Alfredo Gonzalez $ -0-

Board Member 2 Lisa Shelton $ -0-

Board Member 3 Rick Adams $ -0-

Board Member 4 Michele Lorette $ -0-

Board Member 5 Kelly F. Owens $ -0-

Board Member 6 Deana Erdner $ -0-

Board Member 7 Marnie Pate $ -0-

Board Member 8 Marc Hofhiens $ -0-Note – An executive officer is defined as the superintendent, unless the board of trustees or the district administration names additional staff under this classification for local officials.

For the twelve-month period ended August 31, 2017:

Superintendent Sharon McKinney $ -0-

Board Member 1 Alfredo Gonzalez $ -0-

Board Member 2 Lisa Shelton $ -0-

Board Member 3 Rick Adams $ -0-

Board Member 4 Michele Lorette $ -0-

Board Member 5 Kelly F. Owens $ -0-

Board Member 6 Deana Erdner $ -0-

Board Member 7 Marnie Pate $ -0-

Board Member 8 Marc Hofhiens $ -0-Note - The summary amounts reported under this disclosure are not to duplicate the items disclosed in the summary schedule of reimbursements received by board members.

PORT ARANSAS ISD(178908)

Compensation does not include business revenues generated from a family business (farming, ranching, etc.) that has no relation to school district business.

Section VI - Business Transactions Between School District and Board Members

Section IV - Outside compensation and/or fees received by the Superintendent for professional consulting and/or other personal services.

Section V - Gifts received by Executive Officers and Board Members (and first degree relatives, if any)

For the twelve-month period ended August 31, 2017 gifts that had an economic value of $250 or more in the aggregate in the fiscal year.

Financial Integrity Rating System of Texas

Summary— The finance department will continually seek improvement in our practices

and procedures. The Port Aransas ISD School Board, administration and the community have worked very hard to improve and maintain the financial position of the District. This report should demonstrate the District’s commitment to all concerned parties. We will adapt to the constantly changing circumstances which surround the school finance landscape, and strive to overcome obstacles in pursuit of the District’s mission –

PORT ARANSAS ISD - MISSION STATEMENT THE MISSION of the Port Aransas Independent School

District is to inspire all students to reach their potential through the highest quality education by creating life-long learners through comprehensive academic, athletic, cultural and extra-curricular opportunities.

Each student will have the opportunity to participate in a wide variety of educational and community programs that inspire pride, life skills, and civic-mindedness, with a focus on the whole child, to ensure each student is empowered today to succeed tomorrow.

GOALS 1. Maximize technology and human resources available on all

campuses. 2. Provide and promote programs for students in all interest areas that

reflect the diversity of our community and encourage civic-mindedness.

3. Keep our students safe in today’s growing challenges. 4. Make fiscally sound decisions that address current and future needs. 5. Maintain high expectations and consistent communications for

education of the “whole” child.