Schools FIRSTDeSoto ISD’s Report on

Texas Education Agency’sFinancial Integrity Rating System of

TexasFor the Year Ended

August 31, 2011

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Determination of Ratings• If a district answers NO to Indicators 1, 2,

3 or 4 – Or to BOTH 5 & 6 – It is an automatic Substandard Achievement.

• Indicators 7-22 are awarded a point value based on performance.• 64-70 = Superior Achievement• 58-63 = Above Standard Achievement• 52-57 = Standard Achievement• <52 or No to 1 default = Substandard

Achievement2

1 of 20 INDICATORS

1.Was the Total Fund Balance less Nonspendable and Restricted Fund Balance > 0 in the General Fund?“Does the DeSoto ISD have funds set aside for a rainy day?” YES - $6,005,876 - $329,663 = $5,676,213 > 0

General Fund Balance

Restricted Fund

Balance

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2 of 20 INDICATORS

2.Was the Total Unrestricted Net Asset Balance In the Governmental Activities Column in the Statement of Net Assets Greater than Zero?

“Do total assets exceed total liabilities?”

YES – $62,912,689 > 04

3 of 20 INDICATORS3. Were there No Disclosures in the Annual Financial Report and/or Other Sources of information concerning Default on Bond Obligations?

“Does the DeSoto ISD make Bond Payments on time?”

YES – Never Late On Bond Payments

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4 of 20 INDICATORS

4. Was the Annual Financial Report filed within One Month of the January 28th Deadline?

“Was the audit filed on time?”

YES – January 11, 2011

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5 of 20 INDICATORS

5. Was there an Unqualified Opinion in the Annual Financial Report?

A “qualified opinion” means that the district needs to correct something in its reporting or financial controls.

YES – Unqualified Opinion

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6 of 20 INDICATORS

6. Did the Annual Financial Report NOT Disclose any instance(s) of Material Weaknesses in Internal Controls?

“Did the DeSoto ISD have a clean audit?”

YES – No Material Weaknesses

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7 of 20 INDICATORS

7. Was the Three-Year Average Percent of Total Tax Collections (Including Delinquent) Greater than 98%?

“Is DeSoto ISD keeping up with tax collections?”

Yes - 100.008%>98%

8 of 20 INDICATORS8.Did the comparison of PEIMS data to like information in Annual Financial Report result in an aggregate variance of less than 3 percent?

“Does the district PEIMS submitted information match the Audit Report?”

YES – There was ZERO variance – 5 Points

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9 of 20 INDICATORS

9.Were debt related expenditures (Net of EDA Allotment) < $350 per student? (If the district’s 5 year % change in students ≥7%, or, if Property Taxes Collected Per Penny > $200,000)

“Is DeSoto ISD spending money on education or fancy buildings?”

Continued Next Page 11

9 of 20 INDICATORS continued

9. (cont.)

NO - Debt related expenditures = $968.26 not < $350.00

NO - Five year percent change in students 6.16% not > 7%

YES - Property taxes per penny of tax effort $210,029.68 > $200,000

5 - Points12

10 of 20 INDICATORS10.Was there NO disclosure in the Annual Financial Report of Material Noncompliance?

“Did the district comply with the laws, rules, and regulations for a government entity?”

Yes – No Material Noncompliance - 5 points

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11 of 20 INDICATORS continued

11.Did the district have Full Accreditation Status in relation to financial management practices?

“TEA did not take control of the district due to financial issues such as fraud or a negative fund balance.”

YES – Full Financial Accreditation – 5 Points14

12 of 20 INDICATORS

12.Was the Aggregate of Budgeted Expenditures < Aggregate of Total Revenues, and Fund Balance?

“Did the district not budget more than it could afford to spend?”

$64,199,061 + $5,823,231 - $67,061,811YES - $2,960,481 > 0 – 5 Points

Budgeted Revenue Fund Balance

Budgeted Appropriations

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13 of 20 INDICATORS13.Were construction projects adequately financed? (To avoid creating or adding to the fund balance deficit.)

“Can the DeSoto ISD build new facilities without damaging the fund balance?”

$6,005,876 + $14,964,759 = $20,970,635YES - $20,970,635 > 0 – 5 Points

General Fund Balance

Construction Fund Balance

Aggregate Fund Balance

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14 of 20 INDICATORS

14.Was the ratio of Cash and Investments to Deferred Revenues (Excluding Net of Delinquent Taxes Receivable) in the General Fund = or > 1:1? (If Deferred Revenues Are Less Than Net Delinquent Taxes Receivable)

“Does the district have sufficient cash and investments to balance fund balance monies such as TEA overpayments (deferred revenue)? Continued Next Page 17

14 of 20 INDICATORS continued

14. (cont.)

$1,695,917 - $1,674,121 = $21,796 > 0

YES - $5,647,502 ÷ $21,796 = 259.11 ≥ 1

5 Points

Deferred Revenue

Property Tax Receivable

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Cash in General Fund

15 of 20 INDICATORS

15.Was the Administrative Cost Ratio < the Threshold Ratio?

“Did the DeSoto ISD stay under the cap of 12.5% as prescribed for a district of its size?”

YES – 8.88% < 12.5% - 5 Points

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16 of 20 INDICATORS16.Was the Ratio of Students to Teachers within the ranges shown below?

*Range for ratio for districts with student population 5000-9999. Low 13 High 22.

9,165 ÷ 637.63 = 14.3735YES – 13 ≤ 14.3735 ≤ 22 – 5 Points

StudentsFTE

Teachers

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17 of 20 INDICATORS

17.Was the Ratio of Student to Total Staff within the ranges shown below?

*Range for ratio for districts with student population 5000-9999. Low 6.8 High 14.

9,165 ÷ 1,151.8497 = 7.9568YES – 6.8 ≤ 7.9568 ≤ 14 - 5 Points

Students FTE Total Staff

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18 of 20 INDICATORS18.Was the decrease in Undesignated Fund Balance < 20% Over 2 fiscal years or if Total Revenue > Operating Expenditures in the General Fund. AMENDED INDICATOR

Is the district not “feeding off its fund balance” for things like salaries and operating costs?

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18. (cont.)

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18 of 20 INDICATORS continued

General Fund Balance 2 Years Ago

General Fund August 31, 2009

Two Year Percentage Change

$9,664,698 - $5,676,213 = 41.27%NO – 47.27% ≥20%

Total Revenues Expenditures in DifferenceGeneral Fund General Fund

$59,098,716 - $58,992,195 = $106,521YES - $106,521 ≥ 0 - 5 Points

19 of 20 INDICATORS

19.Was the Aggregate Total of Cash and Investments in the General Fund > $0?

“Does DeSoto ISD have money in the bank or investments?”

YES - $5,647,502 > 0 – 5 Points

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20 OF 20 INDICATORS

20.Were Investment Earnings in All Funds (Excluding Debt Service and Capital Projects) Meet or Exceed the 3-month Treasury Bill Rate? AMENDED INDICATOR“Is DeSoto ISD optimizing its cash and reserve funds?”

YES – 0.3584% 0.095% 0.3584% ≥ 0.095%5 Points

Interest Earnings

3-Month T-bill

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DESOTO ISD

SUPERIOR ACHIEVEMENT

70 POINTS

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QUESTIONS• Questions about 20 Indicators• Questions about additional disclosure

information in packet• Questions about narrative

information in packet• Questions about any other

information related to FIRST rating or System

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