3-AnnualComprehensiveFinancialReport2024.pdf

ANNUAL

COMPREHENSIVE

FINANCIAL

REPORT

For the Fiscal Year Ended

June 30, 2024

Tomball, TX

TOMBALL

INDEPENDENT SCHOOL DISTRICT

Prepared by the Finance Department

Zack Boles, Chief Financial Officer

Becky Parker-Felder, Director of Finance

ANNUAL

COMPREHENSIVE

FINANCIAL

REPORT

TOMBALL INDEPENDENT

SCHOOL DISTRICT

310 S. Cherry St - Tomball, TX 77375

For the Fiscal Year Ended

June 30, 2024

Page

Letter of Transmittal...........................................................................................................................……………………………….1

Certificate of Achievement for Excellence in Financial Reporting.........................................................................................................................…………………………………….6

Certificate of Excellence in Financial Reporting.........................................................................................................................………………………7

Leadership Organizational Chart..............................................................................................................................................................................................…………………………….8

Principal Officials and Advisors.........................................................................................................................…………………………………………9

FINANCIAL SECTION

Independent Auditor's Report................................................................................................................................................................................…………..10

Management's Discussion and Analysis................................................................................................................................................................................…………..13

Exhibit

Government-Wide Financial Statements:

A-1 Statement of Net Position …………………………………………………………………………………………….………………..20

B-1 Statement of Activities ………………………………………………………………………………………………………………

Fund Financial Statements:

C-1 Balance Sheet - Governmental Funds ………………………………………………………………………………………...23

C-1R Reconciliation of the Governmental Funds Balance Sheet to the

Statement of Net Position ………………………………………………………………………………………………

C-2 Statement of Revenues, Expenditures and Changes in Fund Balances -

Governmental Funds ………………………………………………………………………………………………………

C-3 Reconciliation of the Statement of Revenues, Expenditures and Changes in

Fund Balances of Governmental Funds to the Statement of Activities ……………………………………. 28

D-1 Statement of Net Position - Proprietary Funds ………………………………………………………………………………..29

D-2 Statement of Revenues, Expenses and Changes in Net Position -

Proprietary Funds ……………………………………………………………………………………………………………………

D-3 Statement of Cash Flows - Proprietary Funds ………………………………………………………………………………..31

E-1 Statement of Fiduciary Net Position - Fiduciary Funds …………………………………………………………………..32

E-2 Statement of Changes in Fiduciary Net Position - Fiduciary Fund ……………………………………………….. 33

Notes to the Financial Statements ………………………………………………………………………………………… 34

TOMBALL INDEPENDENT SCHOOL DISTRICT

ANNUAL COMPREHENSIVE FINANCIAL REPORT

For the Year Ended June 30, 2024

TABLE OF CONTENTS

INTRODUCTORY SECTION

BASIC FINANCIAL STATEMENTS

TOMBALL INDEPENDENT SCHOOL DISTRICT

ANNUAL COMPREHENSIVE FINANCIAL REPORT

For the Year Ended June 30, 2024

TABLE OF CONTENTS

Exhibit Page

F-1 Schedule of Revenues, Expenditures and Changes in Fund Balance -

Budget and Actual - General Fund ……………………………………………………………………………………

F-2 Schedule of the District's Proportionate Share of the Net Pension

Liability of a Cost-Sharing Multiple-Employer Pension Plan

Teacher Retirement System of Texas ……………………………………………………………………………………

F-3 Schedule of the District's Contributions to the Teacher Retirement System of Texas Pension Plan …. 69

F-4 Schedule of the District's Proportionate Share of the Net OPEB

Liability of a Cost-Sharing Multiple-Employer OPEB Plan

Teacher Retirement System of Texas ……………………………………………………………………………………

F-5 Schedule of the District's Contributions to the Teacher Retirement System of Texas OPEB Plan ……. 71

Notes to the Required Supplementary Information …………………………………………………………………………………72

Major Governmental Fund:

G-1 Schedule of Revenues, Expenditures and Changes in Fund Balance -

Budget and Actual - Debt Service Fund …………….……………………………………………………………

Nonmajor Governmental Funds:

H-1 Combining Balance Sheet - Nonmajor Governmental Funds -

Special Revenue Funds………………………………………………………………………………………………………

H-2 Combining Statement of Revenues, Expenditures and Changes in

Fund Balances - Nonmajor Governmental Funds - Special Revenue Funds …………………………….. 82

I-1 Schedule of Revenues, Expenditures and Changes in Fund Balance -

Budget and Actual - National School Breakfast and Lunch Program ……………………………………

Nonmajor Proprietary Funds:

J-1 Combining Statement of Net Position - Nonmajor Proprietary Funds - Internal Service Funds ……... 89

J-2 Combining Statement of Revenues, Exepenses, and Changes in Net Position -

Nonmajor Proprietary Funds - Internal Service Funds …

J-3 Combining Statement of Cash Flows - Nonmajor Proprietary Funds - Internal Service Funds …

Custodial Fund:

K-1 Combining Statement of Fiduciary Net Position

Fiduciary Fund………………………………………………………..…………………………………………………………

K-2 Combining Statement of Changes in Fiduciary Net Position

Fiduciary Fund………………………………………………………..…………………………………………………………

Compliance Schedule:

L-1 Schedule of Delinquent Taxes Receivable ………………………………………………………………………………..94

(Continued)

REQUIRED SUPPLEMENTARY INFORMATION

SUPPLEMENTARY INFORMATION

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

ANNUAL COMPREHENSIVE FINANCIAL REPORT

For the Year Ended June 30, 2024

TABLE OF CONTENTS

Table Page

Financial Trends Information:

1 Net Position by Component - Last Ten Fiscal Years

2 Changes in Net Position - Last Ten Fiscal Years

3 Fund Balances - Governmental Funds - Last Ten Fiscal Years

4 Changes in Fund Balances - Governmental Funds

- Last Ten Fiscal Years

Revenue Capacity Information:

5 Assessed Value and Actual Value of Taxable Property

- Last Ten Fiscal Years

6 Property Tax Rates - Direct and Overlapping Governments

(Per $100 of Actual Value) - Last Ten Fiscal Years

7 Principal Taxpayers - Current Year and Nine Years Ago

8 Property Tax Levies & Collections - Last Ten Fiscal Years

Debt Capacity Information:

9 Outstanding Debt by Type - Last Ten Fiscal Years

10 Ratios of Net General Obligation Bonded Debt Outstanding

- Last Ten Fiscal Years

11 Direct and Overlapping Governmental Activities Debt

June 30, 2024

Demographic and Economic Information:

12 Demographic and Economic Statistics - Last Ten Fiscal Years

13 Principal Employers - Current Year and Nine Years Ago

Operating Information:

14 Full-time Equivalent District Employees by Position

- Last Ten Fiscal Years

15 Operating Statistics - Last Ten Fiscal Years

16 Teacher Base Salaries - Last Ten Fiscal Years

17 School Building Information - Last Ten Fiscal Years

STATISTICAL SECTION (UNAUDITED)

(Continued)

Introductory

Section

ANNUAL

COMPREHENSIVE

FINANCIAL

REPORT

December 12, 2024

Board of Trustees and Citizens Tomball Independent School District 310 S. Cherry Street Tomball, Texas 77375

Dear Board of Trustees:

State law requires that each school district have its fiscal accounts audited annually. A copy of the annual financial report, approved by the Board of Trustees, must be filed with the Texas Education Agency (TEA) by the 150th day after the end of the fiscal year. The independent audit of the financial statements was submitted as prescribed by law. This Annual Comprehensive Financial Report of the Tomball Independent School District (Tomball ISD or the District) is published to provide additional information for the fiscal year ended June 30, 2024.

The independent audit of the financial statements is 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.

The Annual Comprehensive Financial Report consists of management’s representations concerning the finances of the District. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the District’s administration. To provide a reasonable basis for making these representations, 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 and to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with generally accepted accounting principles (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.

Weaver & Tidwell LLP, a firm of licensed certified public accountants, has issued an unmodified opinion based upon the audit of the District’s financial statements for the fiscal year ended June 30, 2024. The independent auditor’s report is presented as the first component of the financial section of this report.

Management’s Discussion and Analysis (MD&A) immediately follows the report of the independent auditors and provides a narrative introduction, overview, and analysis to accompany the basic financial statements.

MD&A complements this letter of transmittal and should be read in conjunction with it.

PROFILE OF THE DISTRICT

In 1937 a petition was presented to the Harris County School Board requesting Tomball be allowed to form its own school district. That petition was granted and all related funds and debts were transferred to the Tomball Independent School District. Tomball ISD is legally recognized as a political subdivision of the State of Texas. The District is not included in any other governmental reporting entity and there are no component units. A seven-member Board of Trustees (the Board) governs the District and has governance responsibilities over all activities related to public elementary and secondary education. Each member is elected to an at-large position for four years in a nonpartisan election. An election is held in November of even-numbered years for either three or four positions. Based on legislative authority codified in the Texas Education Code, the Board (1) has exclusive power to manage and govern the District; (2) can acquire and hold real and personal property; (3) shall have power to levy and collect taxes and to issue bonds; (4) can contract for appointed officers, teachers, and other personnel as well as for goods and services; and (5) has the right of eminent domain to acquire real property.

Serving the city of Tomball and the communities of Lakewood, Canyon Gate, Village Creek, Creekside Park (a section of The Woodlands), Huffsmith, Decker Prairie and Rosehill, Tomball ISD is primarily located in northwestern Harris County with a small portion in southwestern Montgomery County. The District is comprised of 1 early education center serving pre-kindergarten, 9 elementary schools serving kindergarten to fourth grades, 3 elementary schools serving kindergarten to fifth grades, 3 intermediate schools serving fifth and sixth grades, 3 junior high schools serving seventh and eighth grades, 1 junior high school serving sixth to eight grades, 2 high schools serving ninth to twelfth grades, 1 early college high school, and 1 alternative placement school. The ages of the schools range from one year to fifty years old.

Tomball ISD provides a well-rounded program of public education for children from pre-kindergarten through grade twelve. In addition to basic instructional programs, the District offers special education, gifted and talented, bilingual/ESL, remedial, and career and technology programs, along with co-curricular/extracurricular activities. High school students have the opportunity to earn college credits through College Board Advanced Placement courses, early college attendance, and dual credit programs.

The District is fully accredited by the Texas Education Agency (TEA).

The Board determines the District’s vision, mission and goals. The District vision is “Tomball ISD students will lead in creating the future”. The mission of the District is “Tomball ISD educates students to become responsible, productive citizens by providing innovative, individually rigorous and personally valuable educational experiences”.

On or before June 19th of each year, the District must prepare a budget for the next succeeding fiscal year.

The annual budget serves as the foundation for the District’s financial planning and control. The budget process begins in December with the preparation of the budget calendar, updated enrollment and revenue projections, and tentative expenditure projections. Based on this information, budget development parameters for the next year’s budget are established. All the District’s budget managers are required to submit requests for appropriations based on those parameters. A preliminary budget is compiled and then presented and discussed with the Board at multiple budget workshops. After review, evaluation and revision in budget workshops, a meeting of the Board is called for the purpose of adopting the final proposed budget. A public hearing is held for taxpayer input after ten days’ public notice of the meeting. Following the public hearing the Board adopts an appropriated budget for the general fund, debt service fund and the National School Breakfast and Lunch Program special revenue fund on a basis consistent with GAAP. The operating budget of proposed expenditures, and the means of financing them, must be approved and adopted by the Board prior to July 1st. The appropriated budget is prepared by fund and function. Transfers of appropriations between campuses/departments require the approval of the District’s Superintendent.

Increasing any one of the functional spending categories or revenue object accounts and other resources require the approval of the Board.

LOCAL ECONOMY

Tomball Independent School District encompasses 83 square miles in northwestern Harris County (90%) and southwestern Montgomery County (10%) located approximately 30 miles from downtown Houston, Texas. Harris County is the most populous of the 254 counties in Texas.

The District’s proximity to the City of Houston provides the area with access to the nation’s largest seaport in foreign waterborne commerce and second largest in total tonnage, one of the nation’s leading centers for medical education and research, many colleges and universities, a dynamic cultural arts community, excellent recreational opportunities and a national center of corporate management, commerce and world trade.

The Port of Houston has helped fuel the Houston area's development as a center of international business and trade. Companies that do business internationally find the Houston area attractive because of its well-developed financial infrastructure, skilled work force and diverse population. Ample space and favorable conditions for industrial development, as well as for cargo handling, make the Houston area a choice location for industry. This is a major factor contributing to the Houston area's, as well as Tomball's, positive economic outlook for the future.

The number one taxpayer is HCA Houston Healthcare Tomball. The local hospital has been serving Tomball and the surrounding community for over 45 years. This location is one of 13 greater Houston-area hospitals making up the HCA system. Together the system serves more than a million patients a year through their wide variety of services. With expected industrial and commercial growth and the effect of its proximity to the City of Houston, the District anticipates a continuous, steady increase in its tax base.

The District’s total tax base has increased on average 8.4% annually over the past ten years. The taxable value of property increased 4% from fiscal year 2022-2023 to 2023-2024 with a total taxable value of $15,650,938,885. This taxable base is 79% residential and 21% business or other property. The average taxable value of residences is $369,382. The District considers build-out space remaining at over 25% of usable space.

Completion of the Grand Parkway, the final loop around Houston, and expansion of the Tomball Tollway have made areas within the District more accessible for development. Located within the District are numerous multi-use developments which include retail shopping centers, low to mid-rise office buildings, hotels, industrial parks, financial institutions, restaurants and high-density residential projects. Larger residential developments are located in the west side of the District, with smaller projects located throughout all areas of the District. With the planned addition of over 2,500 homes in these development projects the District expects steady and sustained economic growth well into the future.

LONG-TERM FINANCIAL PLANNING

Tomball ISD has a student enrollment of 22,882 that is larger than 94% of the public school districts in Texas. Tomball ISD student enrollment has increased an average of 5.34% annually over a ten-year period. District enrollment increased 2.67% in 2023-2024 and has risen by 3.91% during the 2024-2025 school year. This enrollment growth was anticipated and voters passed a $494.4 million bond referendum in November 2021. Proceeds of the referendum are being used to build new instructional and support facilities, purchase school buses, renovate and expand the capacity of existing instructional facilities, as well as provide technology to accommodate new students and staff, replace aging technology and increase student access to technology. The District recently completed a state of the art early education center for the youngest learners, an elementary campus and a FFA facility. A new high school, intermediate school, and an intermediate school addition are being built using these proceeds.

The District’s approach to coping with the current overall funding environment for Texas public school districts, combined with the addition of new school facilities and rapid growth, has been to ensure the budget process remains instructionally driven and guided by the goals of the District. One of those goals is for the

District to be fiscally responsible. In line with these goals and objectives, Tomball ISD leadership took steps over a six-year period to set aside reserves for future contingencies and on-going financial stability.

These funds remain available for use in day-to-day operations.

The District has fund balance reserves available to fund 31.4% of the 2024-2025 operating budget; well above the existing board policy of maintaining 25% of the current year’s operating budget. The total tax rate has not been increased in ten consecutive years. Considering both operating cost increases and funding reductions, the District believes it is well-positioned financially through the 2024-2025 fiscal year.

RELEVANT FINANCIAL POLICIES

Budget planning is an integral part of overall program planning. Budget planning effectively supports the District’s activities, and resources are provided to implement desired programs. In the budget planning process, general educational goals, specific program goals, and alternatives for achieving program goals are considered, as well as input from the community, and District and campus-level planning and decision-making committees. Budget planning and evaluation are continuous processes and are a part of each month’s activities.

Evidence of the District’s commitment to budget planning and implementation is the selection of Tomball ISD by TXSmartSchools.org as a model 5 star district in the 2020 study. This study was built on the foundational work of the Financial Allocation Study for Texas (FAST), which was commissioned by the State of Texas. TXSmartSchools uses academic, financial, and demographic data to identify school districts and campuses that produce high academic progress while maintaining cost-effective operations.

Tomball ISD was recognized as having very high academic achievement with low per pupil costs.

MAJOR INITIATIVES

Tomball ISD aims to foster skillful, active, reflective, self-disciplined, and honorable community members through engaging learning in a safe environment. In the 2023-2024 school year, the focus remained on student achievement and character development. Efforts included raising academic performance, closing achievement gaps, gathering quality feedback, promoting parent and community involvement, developing positive character traits, recruiting and retaining quality staff, and building productive relationships.

Tomball ISD ensures all students have access to a challenging curriculum that prepares them for college, careers, and life. Our standards-based curriculum combines content with essential 21st-century skills, demanding high cognitive effort and addressing the needs of all learners.

The District continues to meet or surpass state standards in student achievement in mathematics, science, language arts and social studies. By reviewing individual student test data and gauging the effectiveness of instructional programs, the District has strengthened and expanded its curriculum beyond the requirements of the state-mandated Texas Essential Knowledge and Skills (TEKS) in order to provide Tomball ISD students with an education that is more enriched and broader in scope.

Advance offerings are being expanded as more students express a desire to participate. Tomball ISD students continue to excel in obtaining a well-rounded education as evidenced by the near 100% of seniors who earned the necessary credits to graduate in May 2024 and passed the state exit exams.

AWARDS AND ACKNOWLEDGEMENTS

Tomball ISD received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report, whose contents conform to program standards. Such an Annual Comprehensive Financial Report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe our current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Program requirements, and we are submitting it to the GFOA for review to determine its eligibility for another certificate.

The District also received the Association of School Business Official’s (ASBO) Certificate of Excellence in Financial Reporting for the fiscal year ended June 30, 2023. This award certifies that the Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023, substantially conforms to the principles and standards of financial reporting as recommended and adopted by the ASBO. We believe our current report will conform to the Certificate of Excellence Program requirements, and we are submitting it to the ASBO for their review.

We would like to express our appreciation to the Board of Trustees for their concern in providing fiscal accountability to the patrons of our District and for their expertise in financial decisions. Special appreciation goes to the District’s finance department and the independent auditor’s staff. The preparation of this report could not have been accomplished without their efficient and dedicated service.

Respectfully submitted, Dr. Martha Salazar-Zamora Zachery Boles Superintendent Chief Financial Officer

Rebecca Parker-Felder Director of Finance

Government Finance Officers Association

Certificate of Achievement for Excellence in Financial Reporting

Presented to

Tomball Independent School District Texas

For its Annual Comprehensive Financial Report

For the Fiscal Year Ended

June 30, 2023

Executive Director/CEO e

~P-~

The Certificate of Excellence in Financial Reporting is presented to

Tomball Independent School District for its Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2023.

The district report meets the criteria established for ASBO International’s Certificate of Excellence in Financial Reporting.

Ryan S. Stechschulte James M. Rowan, CAE, SFO President CEO/Executive Director

ASSOCIATION OF

SCHOOL BUSINESS OFFICIALS

INTERNATIONAL

■ d~~ CERTlcfFICATE

■ \0 EXCELLENCE

■ ■ ■ IN FINANOAL REPORTING

Board of Trustees

Superintendent

Chief of Staff & School Leadership

Accountability

Human Talent

Information Services

School Leadership

Technology Services

Chief Financial Officer

District Development

Employee Benefits

Finance

Maintenance

Risk Management & Treasury

Federal Programs

Tax Office

Chief Operating Officer

Administrative & Support Services

Athletics & Event Center (TEC)

Child Nutrition

District Support

Environmental Services

Fine Arts

Health Services

Safety Services

Transportation

Chief Academic Officer

Career & Technical Education

Counseling & SEL

Curriculum & Instruction

Professional Learning

Special Services

Strategic Innovation

Student Advancement

CommunicationsLegal Counsel

TOMBALL 15D

DE:STINATION E:XCE:LLENCE

PRINCIPAL OFFICIALS AND ADVISORS

BOARD OF TRUSTEES

John E. McStravick Lee McLeod President Justin Unser Vice President Mark Lewandowski Secretary Michael Pratt Assistant Secretary Lee McLeod Trustee Matt Schiel Trustee Tina Salem Trustee

ADMINISTRATION

Dr. Martha Salazar-Zamora Superintendent Dr. Amy Schindewolf Chief of Staff & School Leadership Dr. Steven Gutierrez Chief Operating Officer Mr. Zachery Boles Chief Financial Officer Dr. Michael Webb Chief Academic Officer Mrs. Holly Sherman General Counsel

CONSULTANTS AND ADVISORS

Bracewell & Giuliani, LLP Rogers, Morris & Grover, LLP Thompson

& Horton, LLP

Houston, Texas – General Counsel

Weaver and Tidwell, LLP The Woodlands, Texas – Independent

Auditors

Orrick, Herrington & Sutcliffe LLP Houston, Texas – Bond Counsel

BOK Financial Securities, Inc.

Houston, Texas – Financial Advisor

Financial

Section

ANNUAL

COMPREHENSIVE

FINANCIAL

Weaver and Tidwell, L.L.P.

1800 Hughes Landing Blvd, Suite 400 | The Woodlands, Texas 77380

Main: 713.800.1060

CPAs AND ADVISORS | WEAVER.COM

Independent Auditor’s Report

To the Board of Trustees of Tomball Independent School District Tomball, Texas

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Tomball Independent School District (the District), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the District, as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

The Board of Trustees of Tomball Independent School District

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and the Required Supplementary Information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

The Board of Trustees of

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The Supplementary Information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements.

The Supplementary Information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information Included in the Annual Comprehensive Financial Report (ACFR)

Management is responsible for the other information included in the ACFR. The other information comprises the Introductory Section and the Statistical Section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated [insert date of report] on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

WEAVER AND TIDWELL, L.L.P.

The Woodlands, Texas October 30, 2024

Management's Discussion and Analysis

As management of the Tomball Independent School District (the District), we offer readers of the accompanying report this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30, 2024.

Financial Highlights

Assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources at year-end by $56,202,313 (net position).

The District’s total net position increased by $18,719,771 from current operations.

As of the close of the year, the District’s governmental funds had combined ending fund balances of $385,639,399, a decrease of $113,723,898 as compared to the preceding year.

At the end of the year, unassigned fund balance of the general fund was $68,761,758 or

32 percent of the year’s total general fund expenditures.

The District’s total bonded debt decreased by $40,017,127 (4 percent) during the year.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements. The District’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report contains required supplementary information and supplementary and other information in addition to the basic financial statements.

Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector enterprise.

The Statement of Net Position (Exhibit A-1) presents information on all the District’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as an indicator of how the financial position of the District is changing.

The Statement of Activities (Exhibit B-1) presents information showing how the District’s net position changed during the year. Changes in net position are reported upon occurrence of the underlying event giving rise to the change, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some transactions that will not result in cash flows until future fiscal periods (e.g., uncollected taxes and incurred but unpaid workers’ compensation benefits).

The government-wide financial operations (governmental activities) of the District are principally supported by taxes and intergovernmental revenues. The governmental activities of the District include Instruction, Instructional Resources and Media Services, Curriculum and Instructional Staff Development, Instructional Leadership, School Leadership, Guidance, Counseling, and Evaluation Services, Social Work Services, Health Services, Student Transportation, Food Services, Extracurricular Activities, General Administration, Plant Maintenance and Operations, Security and Monitoring Services, Data Processing Services, Community Services, Interest on Long-term Debt, Issuance Costs and Fees, Facilities Repair and Maintenance, Payments to Juvenile Justice Alternative Education Programs, and Other Intergovernmental Charges.

The business-type activities include enterprise services related to the District stadium and internal service fund services related to workers’ compensation and self-funded property insurance.

The government-wide financial statements can be found as noted in the table of contents of this report.

Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, as do other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All the funds of the District can be divided into three categories:

governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of cash resources, as well as on balances of cash resources available at the end of the fiscal year. Such information may be useful in evaluating near-term financing requirements.

Because the focus of governmental funds financial statements is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements.

By doing so, readers may better understand the long-term effect of the District's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintained twenty-seven individual governmental funds during the year. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, debt service fund, and capital projects funds, which are considered to be major funds. Data from the other twenty-four governmental funds are combined into a single, aggregated presentation titled total nonmajor funds.

The District adopts an annual revenue and appropriations budget for its general fund, debt service fund and national school breakfast and lunch program special revenue fund. All other governmental funds adopt project length budgets. Subsequent to adoption, amendments approved by the governing body are reflected in a revised budget column. A budgetary comparison statement has been provided for the general fund, debt service fund, and national school breakfast and lunch program special revenue fund to demonstrate compliance with its budget.

The basic governmental fund financial statements are noted in the table of contents of this report.

Proprietary Fund. The District maintains two types of proprietary funds. An internal service fund is a type of proprietary fund that uses an accounting process which accumulates and allocates costs internally among the District’s various funds and functions. The District uses the internal service funds to account for its self-funded workers’ compensation program and its property self-insurance fund. Because this service predominantly benefits governmental operations, their financial activities have been included within governmental activities in the government-wide financial statements. The Enterprise fund is used to report activities for which fees are charged to external users for goods or services (business-type activities). The function of the District’s enterprise fund is for activities of the District stadium. A fee is charged for these services.

Proprietary funds provide essentially the same type of information as the government-wide financial statements, only in more detail. The internal service fund financial statements are provided with the basic financial statements and provide information for the self-funded workers’ compensation and property programs.

The basic proprietary fund financial statements are noted in the table of contents of this report.

Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of students and student organizations. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the District’s own programs and activities. A statement of fiduciary net position and a statement of changes in fiduciary net position are presented for fiduciary funds, as noted in the table of contents of this report.

Notes to the Basic Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements are noted in the table of contents of this report.

Other Information. In addition to the basic financial statements and accompanying notes, this report presents required supplementary information and supplementary information, including schedules required by the Texas Education Agency. Such information is noted in the table of contents of this report.

Government-wide Financial Analysis

As mentioned earlier, net position may, over time, serve as an indicator of a District's changing financial position. At the close of the District’s most recent fiscal year, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $56,202,313.

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Current and other assets 443,769,510$ 540,255,874$ 250,535$ 255,015$ 444,020,045$ 540,510,889$ Capital assets, net of depreciation/amortization 721,931,912 618,228,351 - - 721,931,912 618,228,351

Total assets 1,165,701,422 1,158,484,225 250,535 255,015 1,165,951,957 1,158,739,240

Total deferred outflows of resources 57,669,881 60,291,574 - - 57,669,881 60,291,574

Long-term liabilit ies outstanding 1,060,997,710 1,081,320,777 - - 1,060,997,710 1,081,320,777 Other liabilities 54,391,042 40,075,151 98,745 125,965 54,489,787 40,201,116

Total liabilit ies 1,115,388,752 1,121,395,928 98,745 125,965 1,115,487,497 1,121,521,893

Total deferred inflows of resources 51,932,028 60,026,379 - - 51,932,028 60,026,379

Net position:

Net investment in capital assets (deficit) 17,144,399 (13,749,685) - - 17,144,399 (13,749,685) Restricted 25,097,787 23,840,124 - - 25,097,787 23,840,124 Unrestricted 13,808,337 27,263,053 151,790 129,050 13,960,127 27,392,103

Total net position 56,050,523$ 37,353,492$ 151,790$ 129,050$ 56,202,313$ 37,482,542$

Tomball Independent School District's Net Position/(Deficit)

Governmental Activ ities Business-type Activ it ies Total

Net investment in capital assets (e.g., land and improvements, buildings and improvements, furniture and equipment, right-to-use lease assets, and construction in progress), less any outstanding related debt used to acquire those assets. The District uses these capital assets to provide services to students;

consequently, these assets are not available for future spending. The related debt is adjusted for capital project funds that were expended, but not capitalized. Although the District’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. At the end of the current fiscal year, the District reports a negative balance in net investment in capital assets, which is attributed to expenditure of bond proceeds not meeting the criteria for capitalization.

Net position of $25,097,787 is restricted for future debt service, grant expenses, and state mandated programs.

The remaining balance of net position, unrestricted $13,960,127, may be used to meet the District’s ongoing obligations to students and creditors.

Governmental Activities. Governmental activities increased the District’s net position by $18,719,771 from current operations. Key elements of this change are as follows:

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Rev enues

Program rev enues:

Charges for serv ices 12,649,992$ $ 11,935,316 651,672$ 446,266$ 13,301,664$ 12,381,582$ Operating grants and contributions 38,026,988 22,130,319 - - 38,026,988 22,130,319

General rev enues:

Property taxes, lev ied for general purposes 103,208,212 127,104,264 - - 103,208,212 127,104,264 Property taxes, lev ied for debt serv ice 61,414,689 56,334,602 - - 61,414,689 56,334,602 Grants and contributions not restricted to specific programs 85,319,483 54,108,519 - - 85,319,483 54,108,519 Inv estment earnings 25,495,249 16,024,357 924 959 25,496,173 16,025,316 Gain on sale of capital asset - 7,247,975 - - - 7,247,975 Miscellaneous 898,326 1,517,714 - - 898,326 1,517,714

Total rev enues 327,012,939 296,403,066 652,596 447,225 327,665,535 296,850,291

Expenses Instruction 163,898,093 143,633,134 - - 163,898,093 143,633,134 Instructional resources and media serv ices 2,459,492 2,443,446 - - 2,459,492 2,443,446 Curriculum and instructional staff dev elopment 1,601,133 1,497,615 - - 1,601,133 1,497,615 Instructional leadership 4,730,535 4,253,129 - - 4,730,535 4,253,129 School leadership 13,016,008 11,405,467 - - 13,016,008 11,405,467 Guidance, counseling, and ev aluation serv ices 9,147,616 7,670,800 - - 9,147,616 7,670,800 Social work serv ices 74,019 68,497 - - 74,019 68,497 Health serv ices 2,375,706 2,139,379 - - 2,375,706 2,139,379 Student transportation 10,698,058 9,703,759 - - 10,698,058 9,703,759 Food serv ices 10,104,961 8,784,422 - - 10,104,961 8,784,422 Extracurricular activ ities 9,544,128 7,491,771 - - 9,544,128 7,491,771 General administration 8,093,265 6,425,434 - - 8,093,265 6,425,434 Plant maintenance and operations 22,587,263 18,586,778 - - 22,587,263 18,586,778 Security and monitoring serv ices 4,032,906 1,710,877 - - 4,032,906 1,710,877 Data processing serv ices 3,531,835 3,033,226 - - 3,531,835 3,033,226 Community serv ices 162,327 92,037 - - 162,327 92,037 Interest on long-term debt 39,680,666 28,155,631 - - 39,680,666 28,155,631 Issuance costs and fees 415,715 2,220,361 - - 415,715…