2023 Annual Comprehensive Financial Report

Annual Comprehensive Financial Report FOR THE YEAR ENDED AUGUST 31, 2023

PROSPER INDEPENDENT SCHOOL DISTRICT Prosper, TX

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Annual Comprehensive Financial Report Prosper Independent School District 605 East Seventh Street Prosper, TX 75078

Fiscal Year Ended August 31, 2024

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Table of Contents INTRODUCTORY SECTION (Unaudited) Certificate of the Board ........................................................................................................................... 13 Letter of Transmittal ............................................................................................................................... 15 Principal Officers and Advisors .............................................................................................................. 25 Organizational Chart ............................................................................................................................... 28 FINANCIAL SECTION Independent Auditors’ Report ................................................................................................................. 33 Management’s Discussion and Analysis ............................................................................................... 42 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements A-1 Statement of Net Position .............................................................................................. 54 B-1 Statement of Activities ................................................................................................... 56 Governmental Funds Financial Statements C-1 Balance Sheet .................................................................................................................. 58 C-1R Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net

Position ............................................................................................................................ 59 C-2 Statement of Revenues, Expenditures and Changes in Fund Balances ...................... 60 C-2R Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities .................................... 61 Proprietary Fund Financial Statements D-1 Statement of Net Position - Proprietary Funds ............................................................. 65 D-2 Statement of Revenues, Expenditures and Changes in Net Position - Proprietary

Funds ............................................................................................................................... 66 D-3 Statement of Cash Flows - Proprietary Funds .............................................................. 67 Fiduciary Fund Financial Statements E-1 Statement of Fiduciary Net Position .............................................................................. 70 E-2 Statement of Changes in Fiduciary Net Position .......................................................... 71 Notes to the Basic Financial Statements .............................................................................................. 74 REQUIRED SUPPLEMENTARY INFORMATION (Unaudited) F-1 Budgetary Comparison Schedule - General Fund ....................................................... 115 G-1 Schedule of the District’s Proportionate Share of the Net Pension Liability (TRS) .. 116 G-2 Schedule of District’s Contributions for Pensions (TRS) ............................................ 118 G-3 Schedule of the District’s Proportionate Share of the Net OPEB Liability (TRS) ....... 120 G-4 Schedule of District’s Contributions for Other Post-Employment Benefits (OPEB) (TRS) .................................................................................................. 122 Notes to Required Supplementary Information ................................................................................. 127 OTHER SUPPLEMENTARY INFORMATION Combining and Individual Fund Statements and Schedules H-1 Combining Balance Sheet - Nonmajor Governmental Funds ..................................... 132 H-2 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds ................................................................................... 136 H-3 Combining Statement of Net Position - Internal Service Funds ................................. 140 H-4 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds .................................................................................................. 141 H-5 Combining Statement of Cash Flows - Internal Service Funds .................................. 142

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Table of Contents cont.

Required TEA Schedules J-1 Schedule of Delinquent Taxes Receivable ................................................................... 144 J-2 Budgetary Comparison Schedule - Child Nutrition Fund ............................................ 146 J-3 Budgetary Comparison Schedule - Debt Service Fund ............................................... 147 J-4 Use of Funds Report - Select State Allotment Programs ........................................... 148 STATISTICAL SECTION (Unaudited) Financial Trends S-1 Net Position by Component ......................................................................................... 150

S-2 Changes in Net Position ............................................................................................... 152

S-3 Changes in Net Position (FINAL).................................................................................. 154 S-4 Fund Balances of Governmental Funds ...................................................................... 156 S-5 Changes in Fund Balances of Governmental Funds ................................................... 158 S-6 Assessed Value - Real and Personal Property ............................................................ 160 S-7 Property Tax Rates - Direct and Overlapping Governments ....................................... 161 S-8 Principal Property Taxpayers ....................................................................................... 162 S-9 Property Tax Levies and Collections ............................................................................ 163 S-10 Ratio of Bonded Debt to Assessed Value and Bonded Debt per Capita ................... 164 S-11 Direct and Overlapping Governmental Activities Debt ............................................... 166 S-12 Legal Debt Margin Information .................................................................................... 168 S-13 Demographic and Economic Statistics ....................................................................... 169 S-14 Principal Employers ...................................................................................................... 170 S-15 Salary Data .................................................................................................................... 171 S-16 Employee Information .................................................................................................. 172 S-17 Enrollment and Attendance Data ................................................................................. 173

S-18 Operating Statistics ...................................................................................................... 175 S-19 Capital Asset Information ............................................................................................. 176

S-20 Miscellaneous Statistical Data ..................................................................................... 186 FEDERAL AWARDS SECTION Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance ................................................ 189 Schedule of Findings and Questioned Costs .......................................................................... 196 Status of Prior Year Findings .................................................................................................... 197 K-1 Schedule of Expenditures of Federal Awards ............................................................. 198 Notes to Schedule of Expenditures of Federal Awards ..................................................................... 202

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Introductory Section (Unaudited)

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CERTIFICATE OF BOARD PROSPER INDEPENDENT SCHOOL DISTRICT NAME OF SCHOOL DISTRICT

COLLIN COUNTY

043-912 CO. - DIST. NUMBER

We, the undersigned, certify that the attached annual financial reports of the above-named school district were review and (check one) _________ approved _________ disapproved for the year ended August 31, 2023, at a meeting of the Board of Trustees of such school 22nd district on the _________ day of January, 2024.

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PROSPER ISD

Grounded by Tradition, Soaring to New Beginnings

January 3, 2024 To Prosper Independent School District Stakeholders: The Annual Comprehensive Financial Report (ACFR) of the Prosper Independent School District (“PISD” or “the District”) for the fiscal year ended August 31, 2023, is hereby submitted. This document provides insights and analyses pertinent to the financial position of Prosper Independent School District. The diligent efforts of various stakeholders, including educators, administrators, community members, and relevant experts, have contributed to the compilation of this document. This report contains extensive research, data analysis, and collaborative discussions intended to address the multifaceted challenges and opportunities faced by the District. Its contents are structured to offer a comprehensive view of the current state of affairs, along with actionable strategies to further enhance our students’ educational experiences and outcomes.

Responsibility for the data’s accuracy and the presentation’s completeness and fairness, including all disclosures, rests with the District. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to fairly present the financial position and results of operations of the various funds of PISD. All disclosures necessary to enable the reader to understand the District’s financial activities have been included. The District’s financial position is discussed in greater detail in the Management’s Discussion and Analysis (MD&A) in the Financial Section of this report. State law and District policy require an annual audit by independent certified public accountants. The financial statements for the fiscal year ended August 31, 2023, have been audited by Hankins, Eastop, Deaton, Tonn, Seay & Scarborough, LLC, a licensed certified public accounting firm; their report is presented as the first component of the Financial Section of this report. The independent audit of the financial statements is part of a broader, federally mandated single audit designed to meet the particular needs of federal grantor agencies.

Information related to the single audit, including the Schedule of Expenditures of Federal Awards, findings and recommendations, and the independent auditor’s reports on internal control, compliance, and other matters, are included in the Federal Awards Section of this report. Furthermore, this report incorporates a statistical segment encompassing financial trends, revenue and debt capacity, economic and demographic data, operational insights, and miscellaneous District information. This section offers contextual understanding regarding the District’s financial statements, note disclosures, and required supplementary information.

DISTRICT PROFILE Prosper ISD is an independent public education agency recognized by the State of Texas to provide appropriate educational services to pre-kindergarten through twelfth-grade students. Prosper ISD has a 66-year history grounded in the humble roots of a farming community, now soaring to the fastest-growing school district in the State of Texas, due in no small part to the pursuit of excellence in the arts, academics, and athletics. Our students are routinely recognized on the local, state, and national level for outstanding achievements, and our teachers are highly qualified experts who bring out the best in every student. Located north of Dallas in Collin and Denton Counties, the District spans approximately 58 square miles and comprises the Cities of McKinney, Frisco, Celina, Aubrey, Collin County, and Denton County, and currently serves over 28,000 students in three high schools, five 6-8 middle schools, seventeen elementary schools, one early childhood center, and one alternative school. Over the past year, the student population has grown by over 3,500 students. We currently

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employ approximately 3,100 full-time and part-time employees, including over 1,850 teachers. We opened our third high school, fifth middle school, one elementary, and our first early childhood center to start the 20232024 school year. At build-out, Prosper ISD will have approximately 50,000 students and will be served by 20-25 elementary schools, 11-13 middle schools, and 6 high schools. For many years, Prosper was considered a small rural town on Preston Road in North Texas about 6 miles north of Frisco, but in recent years – true to its name – it has prospered. Prosper has maintained a spacious country feel while developing into an upscale suburb with rolling terrain, many trees, and large single-family-home lots. Prosper is growing rapidly regarding new home building (single-family houses in the $420,000 to $3,000,000 + range). The District student ethnic base during the fall 2022-2023 enrollment data collection was 9% African American, 13% Hispanic, 48% White, 22% Asian, and 8% two or more races. Eight percent of the District’s students are considered Economically Disadvantaged, 7% are English Language Learners, and 21% are considered at risk of academic failure.

At Prosper ISD...

We BELIEVE

Students are first in all decisions • In valuing all students and their success and well-being • In innovation in curriculum and technology • In being intentional in creating opportunities that will propel students forward • In recruiting, hiring, and retaining employees with the Prosper heart • In the importance of a supportive and demanding community • In our commitment to our Graduate Profile • In protecting our small-town feel • In providing a safe and nurturing environment for students and staff • Our success is grounded in tradition

Our VISION

Grounded by Tradition, Soaring to New Beginnings.

Our MISSION

The mission of PISD is to develop and graduate motivated, academically prepared individuals with the strength of character to contribute to a rapidly changing society through an educational system that maintains high expectations, provides quality instruction, and establishes a safe, orderly learning environment in the community that lives its name.

Governance and oversight of the District is provided by a non-compensated, seven-member Board of Trustees.

Members of the Board are elected to office for three-year terms on a rotating basis, with two or three places being filled through a general election held annually on the first Saturday in May. Should a vacancy occur on the Board, the position may be filled by appointment or left vacant until the next scheduled election. In addition to general oversight and governance, Trustees are charged with calling trustee and other school elections, adopting and amending the annual operating budget, setting the tax rate, setting salary schedules, acting as a board of appeals for student and personnel matters, and employing the Superintendent of Schools. The Board must adhere to all state regulations and other legal restrictions in performing these duties. Since the Board is elected by the community, the decisions of the Board provide administrative guidance to the District in meeting community standards.

EDUCATION AND STUDENT SUCCESS Embracing excellence every day, in every way, highlights our dedication to promoting a culture of excellence that encompasses education, character development, and active community involvement. This message remains at the forefront of our educational mission, reflected in our academic pursuits and extracurricular 16 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

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ambitions, which we consistently share with our Community. Our academic accomplishments have soared to new heights as students have exceeded their personal expectations and shown eagerness to learn.

Participation in extracurricular activities has significantly increased, and our programs have expanded. Our students’ remarkable growth in character and leadership is a source of inspiration and motivation as they seize every chance to learn and grow, guided and encouraged by our dedicated educators, who continue to pour into our students every day. Our families support our teachers and staff as they partner with us to create memorable experiences for every child.

Since the passage of the Every Student Succeeds Act (ESSA) in 2015 and a stated emphasis on a well-rounded education, many school districts have re-committed to music and arts education programs. During the pandemic, music and arts programs were vital to keeping students engaged in school. Even before ESSA was passed, Prosper ISD has maintained a focus and commitment to a quality Fine Arts and Music educational program. As a result, the District has more than 3,500 students enrolled in Band, Choir, and Orchestra alone, and 82% of secondary students are enrolled in a fine arts program.

Prosper ISD offers a broad range of programs, enabling students to pursue a comprehensive education and maximize their capabilities. Please see examples of student participation below: • Athletics - 66% of middle school students and 33% of high school students • Career and Technical Education (CTE) - 79% of high school students • UIL Academics - 850 students • Advanced Academics - 5,122 AP courses taken and 794 dual credit courses The Texas Accountability System evaluates the academic performance of Texas public schools as measured through standardized assessments such as STAAR and is just one measure of how students are learning and succeeding in Prosper ISD. In the past year alone, Prosper ISD was recognized internationally, nationally, and on the state level for its exceptional instructional programs and student achievements, both in and out of the classroom.

The District is happy to report that based on the 2021-2022 Texas Academic Performance Report, Prosper ISD received a 2022-23 Accountability Rating of an A. As a district, Prosper ISD received an “A” rating from the Texas Education Agency for student performance in three areas: student achievement, student progress, and how well the school is closing its learning gaps. Districts are receiving these ratings for the first time since the pandemic began. Student achievement and progress weigh the most, and STAAR results are how the agency measures progress. Students are tested on different subjects: reading, math, science, and social studies.

Prosper ISD students continue to make tremendous progress due to the dedication of our teachers and administrators in partnership with our supportive parents. While we are pleased with our district’s “A” rating from the state accountability system, we believe that a student, school, and district should be measured on more than how students perform on one exam (STAAR) given on one day during the school year.

Prosper ISD is proud to be one of more than 50 school districts in the Texas Public Accountability Consortium.

We aim to create a truer accountability framework to assess the District’s progress and measure its success.

Our District staff meets regularly with leaders from other districts to identify and establish the components of a true accountability system that go beyond STAAR test scores to measure how districts prepare students for futures beyond what they can imagine.

The seven pillars of the Community Based Accountability System include: • student learning and progress • professional learning and quality staff • student readiness • fiscal and operational systems • engaged and well-rounded students • the safety and well-being of our students • community engagement and partnerships 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 17

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Prosper ISD students continue to demonstrate strong academic performance, with increases in most of the State of Texas Assessment of Academic Readiness (STAAR) tested subjects relative to the state average and a modified learning environment created by the COVID-19 pandemic. Our students in grades 3-8 performed best in reading with an average passing rate of 90%, social studies 83%, math 86%, and science 85%. EOC percentages were English I at 87%, English II at 88%, Biology at 96%, US History at 97%, and Algebra I at 88%. The content areas showed progress over scores from 2021-22. Prosper Independent School District’s graduation rate is 99%, far exceeding the region and state percentages.

Student success is a driving force in all that we do. During the 22-23 school year Prosper ISD students received multiple recognitions and awards. A select few are highlighted below: • National Merit and College Board Recognized 193 • National Merit Commended 36 • National Merit Semi-Finalist 5 • National Merit Finalist 5 • All-District Academic Athletes 471 • All-State Academic Athletes 112 • TMEA All-State Musicians 6 Please refer to the miscellaneous statistical section of this report for numerous accolades and accomplishments earned by our students.

DISTRICT PROCESSES AND INITIATIVES Prosper ISD stakeholders began the strategic planning process in May of 2018. Through the work of the Strategic Planning Committee, strategies were determined by all stakeholders that will guide Prosper Independent School District’s work for the next six years. The six overarching strategic objectives are Innovative Learning, Social and Emotional Health, Human Resources, Facilities, Funding & Finance, and Communications & Community Partnerships. The strategic objectives are further broken down into strategies and action plans that encompass the District’s long-term goals.

Attracting and Retaining Highly Qualified Professionals Prosper Independent School District is committed to recruiting and hiring the best educators available because instruction provided in the classroom directly correlates to educational professionals’ quality. Prosper ISD intentionally provides a high level of support to staff members by providing childcare services on staff development days, incentive programs, and direct contact with the Superintendent of Schools.

Prosper ISD provides all teachers with an aligned curriculum to guarantee that all educators in the District have a cohesive plan to ensure all students have access to the required state standards and teachers can build assured learning experiences. The strategic planning initiatives tied to innovative learning seek to build a culture of risk-taking and productive struggle for students and educators. The curriculum and instruction team supports teachers in professional development through job-embedded professional learning opportunities specific to the content area or instructional strategy.

Professional Learning Communities for the 2022-2023 school year were implemented to support student learning and build teacher capacity. Staff members participate in professional learning communities (PLC) to focus on continuous improvement and job-embedded learning, providing teachers with intensive reflection on strengthening instructional practices and desired student outcomes. Through the PLC process, opportunities for collaboration and communication are realized among educators, which is a tenet of the 2019-2025 Strategic Plan.

Prosper ISD strives to recruit, select, support, and retain the most highly qualified and student-focused individuals committed to maximizing all students’ potential. The District has grown by over 700 employees for 18 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

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the 2022-2023 school year to accommodate the rapidly increasing student population. The District partners with area and state universities to provide future teachers with student observation and teaching opportunities.

Prosper High School and Rock Hill High School also offer the Ready, Set, Teach program, pairing students with District teachers for observations and hands-on experiences and offering future teachers a chance to return to the District. Furthermore, District administrators participate in regional job fairs and visit state and regional universities known for their educator preparation programs to attract future student teachers and potential teachers.

The District Site-Based Team (SBDM), composed of District-wide, elected professional staff, parents, community members, and business representatives, advises the Board or its designee to establish and review its educational goals, objectives, and major District-wide classroom instructional programs. Prosper ISD has been named a Google for Education Reference District. Google says, “Google for Education Reference Districts are districts that demonstrate thoughtful leadership through innovative technology, including G Suite for Education and Chromebooks, to drive impactful and positive learning outcomes.” Fewer than 100 districts in the United States have been recognized with this honor.

The District curriculum is written with a high level of rigor designed to engage students in inquiry-based experiences, focusing on applying strategies and content area knowledge in meaningful contexts. Student data is gathered in an ongoing manner to inform classroom instruction and inform improvements to the curriculum. Teachers in Prosper ISD are encouraged to collaborate and communicate with other professionals to ensure students are learning at high levels, and the social and emotional needs of every child are being met.

Professional learning communities allow teachers and staff to collaborate on expert instructional delivery to maximize and strengthen instructional time. Teachers and staff apply research-based instructional strategies that are both vertically and horizontally aligned. Site-based decision-making committees provide campuses with the resources to envision, develop, articulate, and implement programs that support the curriculum and instruction.

Prosper ISD provides ongoing professional development using instructional strategies, curriculum content, and technology to support learning objectives. Prosper ISD has over 400 teachers and administrators certified as Google Educators. Prosper ISD offers a competitive salary and benefits program for all employees. Benefits include generous health insurance and a comprehensive health program, 403(b) retirement savings, on-site professional development, stipends for advanced degrees and high-needs areas, and life insurance. The District has also developed an outstanding New Teacher Induction Program to educate, support, and develop first-year teachers, pairing them with trained and experienced mentors within their team or department. The Prosper Education Foundation awards teachers monthly with a Star Polisher Award to recognize exceptional efforts performed by highly skilled teachers.

Cooperation and Collaboration to Benefit Student Learning Prosper Independent School District is committed to creating a culture and climate that is safe, caring, and collaborative so that all students reach their maximum potential. The District’s Strategic Plan reinforces this commitment with specific action plans to foster students’ social and emotional health and positive connectedness to the school and District. Prosper ISD will continue to find innovative ways to promote feedback while fostering a growth mindset through a safe environment that recognizes struggles and encourages individual growth.

The Student Code of Conduct is a platform for student expectations and discipline. School safety is paramount to the efficacy of the District. Prosper ISD partners with our local community and law enforcement agencies to ensure campus safety. In addition, having our own Prosper ISD Police Department has served as a positive connection for our students regarding safety and security. Prosper ISD is and has historically been committed to providing a safe and secure environment for students, staff, and visitors. PISD Police Department has 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 19

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maintained an officer on each campus and two at the high schools since 2019. To accomplish this goal, the District’s Police Department has implemented a comprehensive safety and security program after conducting safety and security audits throughout the District. Together, the department has over 500+ years of law enforcement experience. PISD Police also commit to over 500 positive interactions before a student graduates.

All campuses offer various before and after-school activities, clubs, and UIL events promoting student connectedness and enhancing a positive school environment. Prosper ISD fosters family and community involvement by promoting service events such as the Senior Citizen Luncheon, Relay for Life, Prosper Homecoming Parade, Hope Walk sponsored by the Hope Squad program, a peer-to-peer suicide prevention program, Prosper Education Foundation Golf Tournament, Stuff the Bus, and Convocation. These are some examples of collaboration and means of connectedness between all stakeholders. These events promote generosity and contributions to the community and are in line with the District’s REACH (Respect, Encourage, Appreciate, Communicate, and Honor) initiative. Prosper ISD is fortunate to have the support of the families it serves and the community at large, as these events are hosted throughout the school year and are supported by our parents and the PTO. Prosper ISD engages all stakeholders by maintaining District and campus websites for all campuses. Parents can access their child(ren)’s grades, assessment data, and attendance records through Skyward Family Access and the Parent Portal in Edugence. PISD campuses utilize the Connect Ed messaging service, which allows the District to reach parents and the community in minutes—whether it is a time-sensitive situation, event outreach, or attendance notification—keeping our community more informed and involved.

ECONOMIC CONDITION AND OUTLOOK Despite many challenges, the DFW area, Texas, and national economies remain resilient. Inflationary concerns are at the forefront. The national unemployment rate hovers around 3.6%, while the Texas unemployment rate is at 4.1%, and the DFW rate comes in at 3.9%. The DFW area continues to create jobs as employers try to fill vacancies in a competitive labor market. After five consecutive quarters of declining new home starts, builders posted a positive start across DFW as of the 3rd Quarter. Collin and Denton counties continue to be a hub for new home growth, accounting for nearly 50% of all annual starts in North Texas.

Over the past decade, commercial and residential economic development throughout the Town of Prosper and neighboring areas has driven new families into Prosper ISD. As major corporations continue to relocate their headquarters into the Dallas/Fort Worth Area, strong academics and outstanding opportunities for students continue to make Prosper ISD a destination school district. With the expansion of the Dallas North Tollway, Prosper expects to see significant increases in new businesses and commercial property values.

Prosper’s housing market has remained strong, and property values continue to rise as a result. The District has approximately 2,400 multi-family units under construction across the District. Prosper ISD has over 9,900 future multi-family units in the planning stages. There are approximately 30 actively building subdivisions in Prosper ISD. Prosper ISD’s growth has been exponential, new home starts in 2023 are on pace to exceed 2022 totals, and new home closings are expected to reach 2022 levels as well. Prosper ISD is number three on the DFW New Home Ranking Report behind Northwest ISD and Denton ISD. According to that report there are 18,257 future closings expected. The influx of businesses and homeowners has continued to drive up the taxable values of properties within PISD, which have increased 705% over the past decade. Taxable values increased by approximately 28% from the fiscal year 2022 to fiscal year 2023.

The District anticipates continued property value growth for the next decade, we anticipate growth at a slower rate beginning in 25-26 until buildout, which is projected to be 2033-2034. The strong tax base and mix of residential and commercial values benefit PISD. The District’s largest taxpayer comprises only .76 % of the

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total taxable value of the District, and the total assessed value for all of the top ten taxpayers comprises only 4.09% of the District’s taxable value. As such, the loss of a single taxpayer would not significantly affect the District’s ability to provide educational services or impact our ability to meet future financial obligations.

CAPITAL PROJECTS In 2019, the PISD community supported and passed a bond authorization package of $1.37 billion to meet the capital needs associated with the District’s enrollment growth. With rising costs and demand challenges and continued student growth through the Pandemic, this fell short of the expected duration. Originally meant to last 7-10 years, it became evident that a new 2023 Bond Authorization plan was necessary. After numerous meetings and extensive hours of deliberation, the Long Range Planning Committee presented a detailed report to the Board of Trustees. The report outlined their proposals, encompassing various measures to effectively manage the surge in student enrollment. These recommendations included establishing new schools, renovating existing campuses, providing supplementary district support facilities, funding additional safety and security measures, and fulfilling technology infrastructure requirements and devices for students and staff.

The Prosper ISD community overwhelmingly approved a $2.7 billion investment designed to fund new schools, safety and security, and a performing arts center on November 7, 2023.

LONG-RANGE FINANCIAL PLANNING Prosper ISD uses several financial management strategies, including multi-year financial planning, periodic peer district comparative financial data analysis, and regular discussion regarding budgetary decisions with the PISD Instructional Support Team and Board of Trustees throughout the year. Stakeholder input is also sought through various forms of community engagement. Long-range planning has effectively managed growth within budget constraints while maintaining educational quality. However, enrollment projections and the State’s school funding system pose challenges. Prosper ISD, one of the fastest-growing school districts in Texas, enrolls approximately 2,500 new students annually. From a mere 1,000 students and three campuses in 2002, the District has grown exponentially to over 28,000 students across 25 campuses in 2023. With District management and external demographers predicting enrollment growth of 2,500-3,000 students per year for the foreseeable future, the State educational funding formula presents some significant challenges. The basic student allotment is not indexed to inflation, and the last time that allotment was updated was in 2019. An estimated $14 billion is needed to provide schools in Texas with the same buying power in 2023 that we had in 2019.

To cope with rising costs and competitive wages, Texas school districts, including Prosper ISD, have faced budget-balancing difficulties. Federal stimulus funding provided through the Elementary and Secondary School Emergency Relief (ESSER) Fund enabled the District to recover from the pandemic without utilizing fund balance. Still, most of those funds expired at the end of the 2023 fiscal year. The Texas Legislature failed to address funding for public education during their 88th legislative session in 2023, which leaves Prosper ISD and many other districts across the state in a deficit budget situation for the 2024 fiscal year. Prosper ISD has been fortunate to be able to absorb the 23-24 budget deficit due to significant student growth. Funding such as the Fast Growth Allotment is not guaranteed, therefore the District makes every effort to avoid overreliance on these types of uncertain funding sources for ongoing expenses.

INTERNAL CONTROL PISD’s Board and Administration are responsible for establishing and preserving an internal control framework.

This framework is devised to safeguard the District’s assets against loss, theft, or misuse and to ensure the compilation of adequate accounting data to prepare financial statements following US Generally Accepted Accounting Principles (GAAP). While designed to reasonably ensure meeting these objectives, the internal control structure doesn’t provide absolute assurance. It acknowledges that control costs should not outweigh 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 21

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likely benefits and that assessing costs and benefits involves management’s estimates and judgments. District management continually evaluates the effectiveness of the internal control system and makes necessary adjustments.

BUDGETARY CONTROLS PISD has implemented and maintains a system of budgetary controls to ensure adherence to the legal provisions specified in the Board of Trustees’ annually appropriated (official) budget. The responsibility for budget development lies with District management within the established control system, which is then presented to the Board for final approval. This official budget delineates resource allocation in the General Fund, Child Nutrition Fund, and Debt Service Fund. Budgetary control operates at the fund-function level, as mandated by the Texas Education Agency, with lower organizational unit expenditures governed by various combinations of account code structures. Oversight of all PISD expenditures is managed by the District’s Business Services staff. The District employs an encumbrance accounting system to maintain budgetary control throughout a transaction’s lifecycle. At fiscal year-end, outstanding encumbrances are reviewed, approved, and carried forward into the subsequent fiscal period, with corresponding budget amendments.

The District deems these control methods as providing optimal oversight and flexibility to fulfill its budgetary requirements.

FINANCIAL ACCOUNTABILITY & TRANSPARENCY The security of a district’s long-term ability to provide a quality education is rooted in the stability of its funding and finances. By ensuring that our staff and community members have a clear understanding of funding and finance concerning public education, we will be able to continue to provide a high-quality education for all students in PISD while holding onto the traditions and pride that is PISD. To align with this goal, the District has applied for the Award of Excellence and Award of Merit for 22-23 through TASBO for the first time in Prosper ISD history. The District has also completed the first Annual Comprehensive Financial Report that will be presented to the Government Finance Officers Association (GFOA) and the Association of School Business Officials International (ASBO) for financial transparency awards. The GFOA award is considered the highest form of recognition in the area of governmental accounting and financial reporting. The ASBO award is granted only after an intensive review of financial reports by an expert panel of certified public accountants and practicing school business officials. Both certificates are valid for a period of one year only. The ACFR is judged by an impartial panel to determine if it meets the high standards of the program, demonstrating a constructive “spirit of full disclosure”, to clearly communicate the District’s financial story and confirm the District’s commitment to financial accountability and transparency. The District also plans to produce a Popular Annual Financial Report (PAFR) for 22-23. The PAFR Awards Program encourages state and local governments to extract information from their annual comprehensive financial report to produce high-quality quality popular annual financial reports specifically designed to be readily accessible and easily understandable to the general public and other interested parties without a background in public finance and then recognizes individual governments that are successful in achieving that goal. These publications serve as more than mere accolades; they inspire improvement and offer credibility within the community.

The State of Texas initiated the Financial Integrity Rating System of Texas (FIRST) program in 1999. This legislation aimed to develop an accountability system similar to the academic accountability system, by which school districts could be rated on their financial management practices. The system is designed to encourage public schools to better manage their finances to provide the maximum allocation possible for direct instructional purposes. Prosper ISD has received the highest possible rating for its financial practices, management, and monitoring of FIRST for 22-23 (based on 21-22 data).

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ACKNOWLEDGMENTS At Prosper ISD, we are committed that all students have the opportunity to excel in the classroom and discover their passions, whether in leadership, athletics, the arts, or service. Prosper ISD prepares our students to soar to their highest personal growth and achievement levels. This document was created to cultivate a supportive learning atmosphere that fosters each student’s intellectual, emotional, and social development. Furthermore, the recommendations outlined in this report are intended to harmonize with Prosper ISD’s overarching mission, values, and objectives. Noteworthy aspects of this document encompass a comprehensive analysis of academic performance metrics, pioneering teaching methodologies, resource allocation tactics, community engagement endeavors, and suggestions for continuous enhancement. We hope these insights will promote an informed decision-making process that will positively influence our district’s educational landscape.

The cooperative spirit and shared vision for academic excellence continue to motivate and guide our joint endeavors toward achieving educational milestones.

The Prosper ISD School Board, Prosper Promise, and Prosper Education Foundation remain dedicated to their commitment to assisting our District by providing support, resources, and necessary tools to cultivate distinct opportunities for our students, educators, and staff. These resources and opportunities pave the way for educational encounters that enhance our students’ lives throughout their academic journey. I extend my heartfelt appreciation to the Board of Trustees, District leadership, educators, staff, parents, and students, whose unwavering dedication and commitment have played a pivotal role in shaping strategic initiatives and policies to elevate educational standards within Prosper ISD. Prosper ISD unwaveringly upholds its commitment to excellence every day in every way, despite the challenges confronting public education today. The consistent support from parents, citizens, business owners, and corporate and non-profit partners enables us to maintain our standing and commitment to excellence. We remain devoted to upholding transparent financial procedures and cultivating fiscal responsibility within the District. Thank you for your commitment to excellence and for valuing the high-quality public education that our students receive in Prosper ISD. I would like to acknowledge and express my appreciation to the PISD Communications Department and the Business Services Department, their contributions are invaluable to this publication and our accomplishments as a District.

With these acknowledgments, this report is respectfully submitted for your review and consideration.

Michele Seese, MBA, RTSBA Chief Financial Officer

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INTRODUCTORY SECTION

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INTRODUCTORY SECTION

Principal Officers and Advisors

PROSPER ISD BOARD OF TRUSTEES Name

Term Expires

Length of Service

Occupation

Bill Beavers

2024

6 years

Director of Sales, NRG Business

Dena Dixon

2026

4 years

Insurance Agent

Jorden Dial

2025

2 years

Director, Joeris General Contractors

Kelly Cavender

2025

5 years

Executive VP, InterBank

Garrett Linker

2025

3 years

Small Business Owner

Tommy Van Wolfe

2026

1 year

Restaurant Industry

Jim Bridges

2024

13 1/2 years

CEO

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INTRODUCTORY SECTION

APPOINTED OFFICIALS Length of Education Service

Length of Service with District

Superintendent

25 years

16 years

Dr. Greg Bradley

Deputy Superintendent

22 years

11 years

Jeff Crownover

Deputy Superintendent Academics & School Leadership

9 years

3 years

Dr. Kyle Penn

Deputy Superintendent District & Employee Services

15 years

2 years

Theresa Biggs

Chief Academic Officer

27 years

4 years

Rachel Trotter

Chief Communications Officer

24 years

1 year

Todd Shirley

Chief of Construction & Design

15 years

15 years

Michele Seese

Chief Financial Officer

19 years

3 years

Charis Hunt

Chief Human Resources Officer

24 years

1 year

Bill McLaughlin

Chief of Leadership & Innovation

30 years

1 year

Dr. Blair Hickey

Chief of Specialized Programs

27 years

9 years

Name

Position

Dr. Holly Ferguson

CONSULTANTS AND ADVISORS Bond Counsel McCall, Parkhurst & Horton, L.L.P., Dallas, Texas

Financial Advisor SAMCO Capital Markets, Inc., Plano, Texas

Certified Public Accountants Hankins, Eastup, Deaton, Tonn & Seay, Denton, Texas

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INTRODUCTORY SECTION

Business Staff Michele Seese, CFO

Chief Financial Officer

Keri Beth Croy

Director of Payroll

William Poage

Director of Accounting

Karla Stastny

Budget Director

Kellee Stemac

Director of Purchasing

Lauri Slicker

Director of Federal Programs

Garrett Baker

Capital Projects Manager

Ashley Lopez

Payroll Manager

Barbara Leigh

Accountant

Patti Reilly

Bond Projects Buyer

Scott Hoernke

Buyer

Joshlin Burfitt

Campus Training Liaison & Administrative Assistant

Janell Taylor

Lead Payroll Specialist

Jennifer Malone

P-Card & Travel Specialist

Marci McGuire

Accounts Payable Specialist

Julie Ramirez

Finance Specialist

Kim Roper

Accounts Payable Specialist

Brittany Sanchez

Payroll Specialist

Robert Schotanus

Payroll Specialist

Katie Ulch

Payroll Specialist

Brenda Bledsoe

Receptionist

Cyndi Coker

Construction Specialist

Diana Wooley

Accounts Receivable Specialist

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INTRODUCTORY SECTION | ORGANIZATIONAL CHART

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ORGANIZATIONAL CHART | INTRODUCTORY SECTION

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FINANCIAL SECTION

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FINANCIAL SECTION

Financial Section

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FINANCIAL SECTION

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INDEPENDENT AUDITOR’S REPORT | FINANCIAL SECTION

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FINANCIAL SECTION | INDEPENDENT AUDITOR’S REPORT

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INDEPENDENT AUDITOR’S REPORT | FINANCIAL SECTION

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FINANCIAL SECTION | INDEPENDENT AUDITOR’S REPORT

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INDEPENDENT AUDITOR’S REPORT | FINANCIAL SECTION

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FINANCIAL SECTION | INDEPENDENT AUDITOR’S REPORT

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INDEPENDENT AUDITOR’S REPORT | FINANCIAL SECTION

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FINANCIAL SECTION | MANAGEMENT’S DISCUSSION AND ANALYSIS

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FINANCIAL SECTION

Management’s Discussion and Analysis

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FINANCIAL SECTION | MANAGEMENT’S DISCUSSION AND ANALYSIS

As management of Prosper Independent School District, we offer readers of the District’s financial statement this narrative overview and analysis of the financial activities of the District for the year ended August 31, 2023.

Please read this narrative in conjunction with the independent auditors’ report on page 33, and the District’s Basic Financial Statements that begin on page 54.

FINANCIAL HIGHLIGHTS • • • •

The assets and deferred outflows of resources of Prosper Independent School District exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by $39,772,295.

The District’s total net position increased by $10,772,267 during the fiscal year as the result of current year operations, and $1,268,359 as the result of prior period adjustments.

As of the close of the current fiscal period, the District’s governmental funds reported combined ending fund balances of $414,139,211. Over 18% of this total amount ($75,000,648) is unassigned and available for use within the District’s commitments and policies.

At the end of the current fiscal period, committed, unassigned and assigned fund balance of the general fund of $150,854,769 was 60.62% of the total general fund expenditures.

OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are 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 financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. The government-wide financial statements include the Statement of Net Position and the Statement of Activities (on pages 54 and 56). These provide information about the activities of the District as a whole and present a longer-term view of the District’s property and debt obligations and other financial matters. They reflect the flow of total economic resources in a manner similar to the financial reports of a business enterprise.

Fund financial statements (starting on page 58) report the District’s operations in more detail than the government-wide statements by providing information about the District’s most significant funds. For governmental activities, these statements tell how services were financed in the short term as well as what resources remain for future spending. They reflect the flow of current financial resources, and supply the basis for tax levies and the appropriations budget. For proprietary activities, fund financial statements tell how goods or services of the District were sold to departments within the District or to external customers and how the sales revenues covered the expenses of the goods or services. The remaining statements, fiduciary statements, provide financial information about activities for which the District acts solely as a trustee or agent for the benefit of those outside of the District. The District has no component units for which it is financially accountable.

The notes to the basic financial statements (starting on page 74) provide narrative explanations or additional data needed for full disclosure in the government-wide statements or the fund financial statements.

The combining statements for nonmajor funds contain even more information about the District’s individual funds. The section labeled Federal Awards Section contains data used by monitoring or regulatory agencies for assurance that the District is using funds supplied in compliance with the terms of grants.

Reporting the District as a Whole

The Statement of Net Position and the Statement of Activities The analysis of the District’s overall financial condition and operations begins on page 54. Its primary purpose is to show whether the financial position of the District is improving or deteriorating as a result of the year’s activities. The Statement of Net Position includes all the District’s assets, deferred outflows of resources, liabilities and deferred inflows of resources at the end of the year while the Statement of Activities includes all

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revenues and expenses generated by the District’s operations during the year. These apply the accrual basis of accounting (the basis used by private sector companies).

All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. The District’s revenues are divided into those provided by outside parties who share the costs of some programs, such as tuition received from students from outside the district and grants provided by the U.S. Department of Education to assist children with disabilities or from disadvantaged backgrounds (program revenues), and revenues provided by the taxpayers or by TEA in equalization funding processes (general revenues). All the District’s assets are reported whether they serve the current year or future years. Liabilities are considered regardless of whether they must be paid in the current or future years.

These two statements report the District’s net position and changes in them. The District’s net position provides one measure of the District’s financial health, or financial position. Over time, increases or decreases in the District’s net position are one indicator of whether its financial health is improving or deteriorating. To fully assess the overall health of the District, however, you should consider nonfinancial factors as well, such as changes in the District’s average daily attendance or its property tax base and the condition of the District’s facilities.

In the Statement of Net Position and the Statement of Activities, information is divided into two kinds of activities: •

Governmental activities–Most of the District’s basic services are reported here, including the instruction, counseling, co-curricular activities, food services, transportation, maintenance, community services, and general administration. Property taxes, tuition, fees, and state and federal grants finance most of these activities.

•

Business-type activities–Activities in which the District charges a fee to “customers” to help cover the cost of services it provides are reported as business-type activities. The District had no business-type activities at August 31, 2023.

Reporting the District’s Most Significant Funds 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 fund financial statements begin on page 58 and provide detailed information about the most significant funds–not the District as a whole. Laws and contracts require the District to establish some funds, such as grants received under the No Child Left Behind Act from the U.S. Department of Education. The District’s administration establishes many other funds to help it control and manage money for particular purposes (like campus activities).

All of 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 spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds 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

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FINANCIAL SECTION | MANAGEMENT’S DISCUSSION AND ANALYSIS

doing so, readers may better understand the long-term impact of the government’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 maintains twenty-five governmental funds.

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 fund, each of which are considered to be major funds. Data from the other twenty-two governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The District adopts an annual appropriated budget for its general fund, debt service fund and food service fund. A budgetary comparison schedule has been provided to demonstrate compliance with these budgets. The basic governmental fund financial statements can be found on pages 58 through 62 of this report.

•

Proprietary funds. The District reports the activities for which it charges users (whether outside customers or other units of the District) in proprietary funds using the same accounting methods employed in the Statement of Net Position and the Statement of Activities. The internal service funds (one category of proprietary funds) report activities that provide supplies and services for the District’s other programs and activities–such as the District’s workers compensation insurance program.

•

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. 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. The District is the trustee, or fiduciary, for these funds and is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the District’s fiduciary activities are reported in a separate statement of fiduciary net position and statement of changes in fiduciary net position on pages 70 and 71.

These activities are excluded from the District’s government-wide financial statements because the District cannot use these assets to finance its operations.

GOVERNMENT-WIDE FINANCIAL ANALYSIS The following analysis presents both current and prior year data and discuss significant changes in the accounts. Our analysis focuses on the net position (Table I) and changes in net position (Table II) of the District’s governmental activities.

Governmental Activities Net Position. The net position of the District’s governmental activities at August 31, 2023 was $39,772,295.

Investment in capital assets (e.g. land, building, furniture, vehicles and equipment) less any related debt used to acquire those assets that is still outstanding was a $51,923,802 deficit at August 31, 2023. The District uses these capital assets to provide services to students; consequently, these assets are not available for future spending. Although the District’s investment in its capital assets are 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. An additional portion of the District’s governmental activities net position ($24,075,113) represents resources that are subject to external restrictions on how they may be used.

Net position of the District’s governmental activities increased from $27,731,669 at August 31, 2022 to $39,772,295 at August 31, 2023. Unrestricted net position – the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements – was $67,620,984 at August 31, 2023. The current year operating increase was the result of several factors. First, the District’s revenues exceeded expenditures by $37,375,428 (as adjusted for the effects of capital outlay and debt service principal payments.) However, the District recorded depreciation

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MANAGEMENT’S DISCUSSION AND ANALYSIS | FINANCIAL SECTION

expense, which is a non-cash expense that reduces the carrying value of District assets, in the amount of $37,742,114. Also, various adjustments totaling $16,525,319 were posted to revenues and expenses to account for prepaid expenses, interest accruals and tax revenues earned during the period under the full accrual method of accounting. Changes in the net pension and OPEB activity decreased net position by $5,386,366, while a prior period adjustment related to the implementation of GASB 96 increased net position by $1,268,359.

Changes in Net Position. The District’s total revenues of its governmental activities were $408,233,739. A significant portion, approximately 59.1%, of the revenue comes from property taxes. Another 21.0% comes from state aid - formula grants while 4.3% relates to charges for services. This reflects a $76.2 million increase in revenues from 2021-2022, primarily from increases in property taxes and investment earnings. The total revenues were used to fund the cost of all programs and services in the amount of $397,461,472, and to pay down the District’s debt. This reflects a $73.4 million increase in expenses from 2021-2022.

Governmental Activities. The District’s total net position of its governmental activities increased $12,040,626.

The total cost of all government activities for the fiscal year ended August 31, 2023 was $397,461,472.

Funding for these governmental activities is by specific program revenue or through general revenues such as property taxes, state aid and investment earnings. Program revenues directly attributable to specific activities funded some of the governmental activities costs. These program revenues amounted to $54,091,324 (grant revenues, tuition and facility leasing, for example). The remaining cost of governmental activities not directly funded by program revenues was $343,370,148, which were primarily funded by property taxes in the amount of $241,376,528 and state revenue of $85,562,757.

Table I NET POSITION

Current and other assets Capital assets Total assets Deferred outflows of resources Total assets and deferred outflows of resources

Governmental Activities 2023 2022 $ 494,715,205 $ 516,459,129 1,396,873,278 1,099,818,774 1,891,588,483 1,616,277,903 126,375,591 88,621,385

Current and other liabilities Long-term liabilities Net pension liability (District's share) Net OPEB liability (District's share) Total liabilities Deferred inflows of resources Total liabilities and deferred inflows of resources Net Position (Deficit): Net investments in capital assets Restricted Unrestricted Total Net Position (Deficit)

$

$

Change (21,743,924) 297,054,504 275,310,580 37,754,206

2,017,964,074

1,704,899,288

313,064,786

76,250,144 1,728,324,370 64,868,973 33,710,364 1,903,153,851 75,037,928

44,427,029 1,503,612,875 23,074,392 46,996,905 1,618,111,201 59,056,418

31,823,115 224,711,495 41,794,581 (13,286,541) 285,042,650 15,981,510

1,978,191,779

1,677,167,619

301,024,160

(51,923,802) 24,075,113 67,620,984 39,772,295

(46,912,117) 19,547,343 55,096,443 27,731,669

(5,011,685) 4,527,770 12,524,541 12,040,626

$

$

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FINANCIAL SECTION | MANAGEMENT’S DISCUSSION AND ANALYSIS

Table II CHANGES IN NET POSITION

The cost of all governmental activities for the current fiscal period was $397,461,472. However, as shown in the Statement of Activities on page 56, the amount that our taxpayers ultimately financed for these activities through District taxes was only $241,376,528 because some of the costs were paid by those who directly benefited from the programs ($17,367,778) or by State equalization funding ($85,562,757).

THE DISTRICT’S FUNDS As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements, bond covenants, and segregation for particular purposes.

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MANAGEMENT’S DISCUSSION AND ANALYSIS | FINANCIAL SECTION

As of the end of the current fiscal year, the District’s governmental funds reported combined ending fund balances of $414,139,211 a decrease of $58,503,253. Approximately 39% of this total amount ($161,680,450) constitutes committed, assigned and unassigned fund balance, which is available for spending at the District’s discretion. The remainder of fund balance is nonspendable or restricted to indicate that it is not available for new spending because it is already restricted for debt service ($19,270,534), capital projects ($222,918,351), Federal grants ($1,925,195), or other purposes ($3,195,706), or already spent on prepaid items ($5,148,975).

The general fund is the primary operating fund of the District. At the end of the current fiscal year, unassigned fund balance of the general fund was $75,058,630, while the total fund balance was $152,297,542. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to the total fund expenditures. Unassigned fund balance represents 30.16% of the total general fund expenditures, while the total fund balance represents 61.20% of that same amount.

The fund balance of the District’s general fund increased by $23,507,866 during the current fiscal year, compared to a $20,109,768 increase in the previous year. Key factors related to this change are as follows: •

A $33,182,145 increase in property tax and other local revenues along with a $6,510,370 increase in investment earnings contributed to a $36,489,245 or 15.4% overall increase in total revenues. Expenditures increased $39,897,870 or 19.1% with the majority of the increase in the areas of instructional and facilities costs.

The debt service fund has a total fund balance of $19,270,534, all of which is reserved for the payment of debt service. The net increase in fund balance during the period from current year operations was $3,194,146, compared to a $1,163,799 increase in the previous year. Tax revenues were $18,718,388 higher than the previous year, while debt service expenditures net of a remarketing were $20,599,301 higher.

Other changes in fund balances should also be noted. The fund balance in the capital projects fund decreased by $86,413,370 due primarily to $250,000,000 proceeds from bond sales offset by $349,580,693 spent on construction-related costs. Although these and other capital expenditures reduce available fund balances, they create new assets for the District as reported in the Statement of Net Position and discussed in Note 4 to the financial statements.

Over the course of the year, the Board of Trustees revised the District’s budget several times. These budget amendments fall into three categories. The first category includes amendments and supplemental appropriations that were approved shortly after the beginning of the year and reflect the actual beginning balances (versus the amounts we estimated in August, 2022). The second category includes changes that the Board made during the year to reflect new information regarding revenue sources and expenditure needs. The principal amendment in this case was an increase in the anticipated amount of State funding to be received.

The third category involves amendments moving funds from programs that did not need all the resources originally appropriated to them to programs with resource needs.

The District’s General Fund balance of $152,297,542 reported on page 58 differs from the General Fund’s budgetary fund balance of $129,043,853 reported in the budgetary comparison schedule on page 85. For the year ended August 31, 2023, actual general fund expenditures on a budgetary basis were $248,854,617, below the original budget expenditures of $259,084,000 and the revised final budget of $259,083,999. The majority of the actual variance of $10,229,382 consists of savings achieved in payroll costs in several areas.

Actual revenue on a budgetary basis was $273,913,943 compared to the original budget of $250,479,000 and a revised budget of $261,838,174. The majority of the actual variance of $12,075,769 consists of additional property tax revenue.

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FINANCIAL SECTION | MANAGEMENT’S DISCUSSION AND ANALYSIS

CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At August 31, 2023, the District had $1,396,873,278 (net of accumulated depreciation) invested in a broad range of capital assets, including facilities and equipment for instruction, transportation, athletics, administration, and maintenance. This amount represents a net increase of $294,254,577, or 26.7%, above last year.

This fiscal year’s major additions include: Continuing construction costs on a new high school, paid for with proceeds of general obligation bonds.

$ 90,424,006

Initial construction costs on a new high school, paid for with proceeds of general obligation bonds

20,317,806

Continuing construction costs on two new elementary schools, paid for with proceeds of general obligation bonds.

60,761,606

Initial construction costs on two new elementary schools, paid for with proceeds of general obligation bonds.

6,195,971

Continuing construction costs on an early childhood center, paid for with proceeds of general obligation bonds.

32,831,601

Continuing construction costs on a new middle school, paid for with proceeds of general obligation bonds.

54,501,922

Initial construction costs on a new middle school, paid for with proceeds of general obligation bonds.

7,990,761

155.37 acres land purchase

40,134,304

13.308 acres land purchase

2,020,607

Land donation for middle school site

4,530,240

Bus and vehicle purchases

3,393,552

Totaling

$323,102,376

More detailed information about the District’s capital assets is presented in Note 4 to the financial statements.

Debt Administration At year-end, the District had $1,593,259,524 in bonds outstanding (including accreted interest on bonds) versus $1,373,427,534 last year–an increase of 16.0%. New debt incurred during the fiscal period consists of one building bond series, the remarketing of one bond series and several right-to-use leases and subscriptions.

The District’s underlying rating for unlimited tax bonds is “Aa3” by Moody’s, and “AA-” by Fitch but is considered AAA as a result of guarantees of the Texas Permanent School Fund.

More detailed information about the District’s long-term liabilities is presented in Note 5 to the financial statements.

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MANAGEMENT’S DISCUSSION AND ANALYSIS | FINANCIAL SECTION

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The District’s elected and appointed officials considered many factors when setting the fiscal year 2024 budget and tax rates. Those factors included the economy, the District’s population growth and funding levels by the State of Texas. The District has adopted a surplus budget for its debt service fund and a balanced budget for its child nutrition fund for fiscal year 2024, and adopted a general fund budget with a projected deficit of $9,796,139. For fiscal year 2024 the District has adopted a maintenance and operations tax rate of $0.7575 per $100 valuation, which is lower than the fiscal year 2023 rate of $0.9429. The District’s interest and sinking tax rate has remained at $0.50 per $100 valuation for fiscal year 2024. Significant growth in student enrollment is expected to continue in fiscal year 2024. As a result, the coming year will see significant construction activity taking place in the District, in order to provide additional needed facilities.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for funds the District receives. If you have questions about this report or need additional financial information, contact the District’s business office, at Prosper Independent School District, 605 E. 7th St., Prosper, Texas 75078.

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BASIC FINANCIAL STATEMENTS

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BASIC FINANCIAL STATEMENTS

Basic Financial Statements

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BASIC FINANCIAL STATEMENTS

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BASIC FINANCIAL STATEMENTS

Government-wide Financial Statements

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BASIC FINANCIAL STATEMENTS | GOVERNMENT-WIDE FINANCIAL STATEMENTS

EXHIBIT

A-1 PROSPER INDEPENDENT SCHOOL DISTRICT STATEMENT OF NET POSITION AUGUST 31, 2023 Primary Government

Governmental Activities ASSETS

Cash and Cash Equivalents Current Investments Property Taxes - Delinquent Allowance for Uncollectible Taxes Due from Other Governments Due from Fiduciary Funds Other Receivables, Net Prepayments Capital Assets: Land Buildings, Net Furniture and Equipment, Net Other Capital Assets, Net Right-to-Use Leased Assets, Net SBITA Assets, Net Construction in Progress Total Assets

$

75,495,366 384,760,768 3,122,288 (16,955) 26,195,360 7,243 2,160 5,148,975 170,335,440 754,196,765 36,951,564 7,875,622 2,331,223 2,113,411 423,069,253 1,891,588,483

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge for Refunding Deferred Outflow Related to TRS Pension Deferred Outflow Related to TRS OPEB

23,331,005 60,366,358 42,678,228

Total Deferred Outflows of Resources

126,375,591

The notes to the financial statements are an integral part of this statement.

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GOVERNMENT-WIDE FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

A-1

EXHIBIT

CONTINUED

PROSPER INDEPENDENT SCHOOL DISTRICT STATEMENT OF NET POSITION AUGUST 31, 2023 Primary Government

Governmental Activities LIABILITIES

Accounts Payable Short Term Right-to-Use Leases Payable Interest Payable Payroll Deductions and Withholdings Accrued Wages Payable Due to Other Governments Due to Student Groups Unearned Revenue Noncurrent Liabilities: Due Within One Year: Loans, Note, Leases, etc.

Due in More than One Year: Bonds, Notes, Loans, Leases, etc.

Net Pension Liability (District's Share) Net OPEB Liability (District's Share)

52,395,543 34,107 2,792,783 1,858,232 16,682,877 524,788 1,025,086 936,728 39,047,520 1,689,276,850 64,868,973 33,710,364

Total Liabilities

1,903,153,851

DEFERRED INFLOWS OF RESOURCES

Deferred Inflow Related to TRS Pension Deferred Inflow Related to TRS OPEB

23,533,849 51,504,079

Total Deferred Inflows of Resources

75,037,928

NET POSITION

Net Investment in Capital Assets and Right-to-Use Lease Assets Restricted: Restricted for Federal and State Programs Restricted for Debt Service Restricted for Campus Activities Restricted for Other Purposes Unrestricted

(51,923,802) 1,925,195 19,270,534 2,437,543 441,841 67,620,984

Total Net Position

$

39,772,295

The notes to the financial statements are an integral part of this statement.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 55

BASIC FINANCIAL STATEMENTS | GOVERNMENT-WIDE FINANCIAL STATEMENTS

EXHIBIT

B-1 PROSPER INDEPENDENT SCHOOL DISTRICT STATEMENT OF ACTIVITIES FOR THE YEAR ENDED AUGUST 31, 2023

Net (Expense) Revenue and Changes in Net Position

Program Revenues

Charges for Services

Expenses

Primary Gov.

Operating Grants and Contributions

Governmental Activities

Primary Government: GOVERNMENTAL ACTIVITIES: Instruction Instructional Resources and Media Services Curriculum and Instructional Staff Development Instructional Leadership School Leadership Guidance, Counseling, and Evaluation Services Health Services Student (Pupil) Transportation Food Services Extracurricular Activities General Administration Facilities Maintenance and Operations Security and Monitoring Services Data Processing Services Community Services Debt Service - Interest on Long-Term Debt Debt Service - Bond Issuance Cost and Fees Non-Capital Facilities Costs Contracted Instructional Services Between Schools Payments Related to Shared Services Arrangements Payments to Juvenile Justice Alternative Ed. Prg. Other Intergovernmental Charges [TP] TOTAL PRIMARY GOVERNMENT:

$

187,990,517 3,599,449 7,932,714 1,867,659 15,418,872 10,741,778 2,812,185 11,228,152 10,693,248 13,705,865 9,277,468 24,961,744 4,153,125 8,318,773 8,612 54,270,411 2,172,740 26,395,381 233,023 201,184 1,415 1,477,157

$

2,665,330 $ 1,212,073 9,778,859 829,244 1,539,671 1,342,601 -

17,506,844 $ 164,937 2,700,435 137,985 826,795 3,312,127 422,048 1,798,851 1,693,793 4,762,773 414,850 1,212,664 306,904 196,089 6,317 1,260,134 -

(167,818,343) (3,434,512) (5,232,279) (1,729,674) (14,592,077) (7,429,651) (1,178,064) (9,429,301) 779,404 (8,113,848) (7,322,947) (22,406,479) (3,846,221) (8,122,684) (2,295) (53,010,277) (2,172,740) (26,395,381) (233,023) (201,184) (1,415) (1,477,157)

$

397,461,472 $

17,367,778 $

36,723,546

(343,370,148)

General Revenues: Taxes: Property Taxes, Levied for General Purposes Property Taxes, Levied for Debt Service State Aid - Formula Grants Land Contribution Investment Earnings Miscellaneous Local and Intermediate Revenue Gain on Sale of Capital Asset

157,849,987 83,526,541 85,562,757 4,530,240 22,139,702 381,463 151,725

Total General Revenues & Extraordinary Items

354,142,415

Change in Net Position Net Position - Beginning Prior Period Adjustment Net Position - Ending

The notes to the financial statements are an integral part of this statement.

56 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

10,772,267 27,731,669 1,268,359 $

39,772,295

BASIC FINANCIAL STATEMENTS

Governmental Funds Financial Statements

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 57

BASIC FINANCIAL STATEMENTS | GOVERNMENTAL FUNDS FINANCIAL STATEMENTS

C-1

EXHIBIT

PROSPER INDEPENDENT SCHOOL DISTRICT

PROSPER INDEPENDENT SCHOOL DISTRICT SHEET BALANCE BALANCE SHEET GOVERNMENTAL FUNDS GOVERNMENTAL FUNDS AUGUST 31, 2023 AUGUST 31, 2023 General Fund

ASSETS ASSETS Cash and CashCash Equivalents and Cash Equivalents Investments - Current Investments Property Taxes - Delinquent - Current Taxes - Delinquent Allowance for Property Uncollectible Taxes for Uncollectible Taxes Due from OtherAllowance Governments Due from OtherDue Funds from Other Governments Other Receivables Due from Other Funds Prepayments Other Receivables Total Assets

Prepayments

$

61,317,840 $ 86,677,353 2,078,808 (12,209) 22,444,708 3,484,497 1,442,773

$

177,433,770 $

LIABILITIES Total Assets Accounts Payable $ 2,764,915 $ LIABILITIES Right-to-Use Lease Liability Payable - Current 34,107 Payroll Deductions and Withholdings 1,858,232 Accounts Payable Payable Accrued WagesRight-to-Use Payable Lease Liability Payable - Current 16,682,877 Due to Other Funds 1,365,517 Payroll Deductions and Withholdings Payable Due to Other Governments 233,023 Due to StudentAccrued Groups Wages Payable Due to Other Funds Unearned Revenue 130,958

Due to Other Governments Due to Student Groups DEFERRED INFLOWS OF RESOURCES Unearned Revenue

Debt ServiceGeneral Fund

Fund

$

177,433,770 $

291,765

Unavailable Revenue - Property Taxes

2,066,599

1,038,734

Construction Total Liabilities, Deferred Inflows & Fund Balances Assigned Fund Balance: Projected 2023-24 Budget Deficit Unassigned Fund Balance

$

233,023 49,151,583 130,958

23,069,629 1,038,734

2,066,599

Total Fund Balances Committed Fund Balance:

20,601,033 $ 286,601,817

- $ 49,140,550 $ - 2,764,915 $ $ 34,107 1,858,232 11,033 291,765 16,682,877 - 1,365,517 -

23,069,629

DEFERRED INFLOWS OF RESOURCES FUND BALANCES Nonspendable Unavailable Fund Balance:Revenue - Property Taxes Prepaid Items 1,442,773 Total Deferred Inflows of Resources Restricted Fund Balance: Federal FUND or State Funds Grant Restriction BALANCES Capital Acquisition and Contractural Obligation Nonspendable Fund Balance: Retirement of Long-Term Debt Prepaid Items Other Restricted Fund Balance Restricted Committed Fund Balance: Fund Balance: Construction Federal or State Funds Grant Restriction 66,000,000 Assigned Fund Balance: Capital Acquisition and Contractural Obligation Projected 2023-24 Budget Deficit 9,796,139 Retirement of Long-Term Debt Unassigned FundOther Balance 75,058,630 Restricted Fund Balance

-

-

291,765

-

2,066,599

1,038,734

2,066,599

1,038,734

3,648,220

222,918,351 19,270,534 - 1,442,773 -

-

177,433,770 $

20,601,033 $ 286,601,817 $

9,796,139 75,058,630

The notes to the financial statements are an integral part of this statement.

The notes to the financial statements are an integral part of this statement.

58 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT The notes to the financial statements are an integral part of this statement.

-

3,105,333

49,151,583 3,105,333 -

57,982

5,148,975

1,925,195 3,195,706

1,925,195 222,918,351 19,270,534 3,648,220 3,195,706

-

76,883,663 222,918,351 9,796,139 - 19,270,534 (57,982) 75,000,648 -

237,450,234

66,000,000

$

-

-

78,291,483

10,883,663

19,270,534

Total Fund Balances

481,429 $ 52,386,894 34,107 1,858,232 - $- 49,140,550 16,682,877 3,466,221 4,842,771 524,788 1,025,086 1,025,086 -805,770 11,033 936,728

291,765 5,778,506 -

152,297,542

Total Liabilities, Deferred Inflows & Fund Balances

Capital Governmental Projects Funds

$ 6,824,165 $ 21,652 6,711,141 74,874,798 $ 21,652 61,317,840 $ $ $ 6,824,165 19,520,561 276,062,518 382,260,432 86,677,353 19,520,561 276,062,518 1,043,480 3,122,288 2,078,808 (4,746) - 1,043,480 (16,955) (4,746) 20,086 (12,209) 3,730,566 26,195,360 66,914 22,444,708 20,086 397,558 3,948,969 - 3,484,497 2,160 - 2,160 66,914 5,148,975 -3,648,220 - 57,982 $ 286,601,817 $ 20,601,033 10,899,407 $ 3,648,220 495,536,027 1,442,773 -

Total Liabilities

Liabilities Total DeferredTotal Inflows of Resources

Total

Capital Debt Service Other Projects Fund Funds

5,120,901

-

414,139,211

10,883,663

10,899,407 $

-

495,536,027

-

152,297,542

19,270,534

177,433,770 $

20,601,033 $ 286,601,817

237,450,234

GOVERNMENTAL FUNDS FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

EXHIBIT

C-1R PROSPER INDEPENDENT SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION AUGUST 31, 2023

Total Fund Balances - Governmental Funds

$

414,139,211

Assets and liabilities of the internal service funds are not included in the fund financial statements.

3,460,197

Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the fund financial statements.

1,642,431,908

Accumulated depreciation is not reported in the fund financial statements.

(245,558,630)

Bonds payable, leases, and subscriptions payable are not reported in the fund financial statements.

(1,589,255,908)

Bond premiums and discounts are not recognized in the fund financial statements.

(131,206,074)

Interest is accrued on outstanding debt in the government-wide financial statements, whereas in the fund financial statements interest expenditures are reported when due.

(2,792,783)

Property tax revenue reported as deferred revenue in the fund financial statements was recognized as revenue in the government-wide financial statements.

3,105,333

Included in the items related to debt is the recognition of the District's proportionate share of the net pension liability required by GASB 68 in the amount of $64,868,973, a Deferred Resource Inflow related to TRS in the amount of $23,533,849, and a Deferred Resource Outflow related to TRS in the amount of $60,366,358. This amounted to a decrease in Net Position in the amount of $28,036,464.

(28,036,464)

Included in the items related to debt is the recognition of the District's proportionate share of the net Other Post-Employment Benefit (OPEB) liability required by GASB 75 in the amount of $33,710,364, a Deferred Resource Inflow related to TRS OPEB in the amount of $51,504,079, and a Deferred Resource Outflow related to TRS OPEB in the amount of $42,678,228. This amounted to a decrease in Net Position in the amount of $42,536,215.

(42,536,215)

Deferred charge on bond refundings is not recognized in the fund financial statements.

23,331,005

Accreted interest on capital appreciation bonds has not been recorded in the fund financial statements.

(7,309,285)

Net Position of Governmental Activities

$

39,772,295

The notes to the financial statements are an integral part of this statement.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 59

BASIC FINANCIAL STATEMENTS | GOVERNMENTAL FUNDS FINANCIAL STATEMENTS

EXHIBIT

C-2

PROSPER SCHOOL INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT DISTRICT OF REVENUES, EXPENDITURES, CHANGES IN FUND BALANCES STATEMENT OFSTATEMENT REVENUES, EXPENDITURES, AND CHANGESAND IN FUND BALANCES GOVERNMENTAL FUNDS GOVERNMENTAL FUNDS THEAUGUST YEAR ENDED FOR THE YEAR FOR ENDED 31,2023AUGUST 31,2023 General Debt Service Fund Fund

General Fund

REVENUES: REVENUES: Total Local and Intermediate Sources Total Local and Intermediate Sources $ State Program Revenues State Program Revenues Federal Program Revenues Federal Program Revenues Total Revenues Total Revenues EXPENDITURES: EXPENDITURES: Current: Current: Instruction Instruction Instructional Resources and Media Services Instructional Resources and Media Services Curriculum and Instructional Staff Development Curriculum and Instructional Staff Development Instructional Leadership Instructional Leadership School Leadership School Leadership Guidance, Counseling, and Evaluation Services Guidance, Counseling, and Evaluation Health Services Services Health Services Student (Pupil) Transportation Student (Pupil) Transportation Food Services Food Services Extracurricular Activities Extracurricular Activities General Administration General Administration Facilities Maintenance and Operations Facilities Maintenance and Operations Security and Monitoring Services Security and Monitoring DataServices Processing Services Data Processing Services Community Services Community Services Debt Service: Debt Service: Principal on Long-Term Liabilities Principal on Long-Term Liabilities Interest on Long-Term Liabilities Interest on Long-Term Liabilities Bond Issuance Cost and Fees Bond Issuance Cost and Fees Capital Outlay: Capital Outlay: Facilities Acquisition and Construction Facilities Acquisition and Construction Intergovernmental: Intergovernmental: Contracted Instructional Services Between Schools Contracted Instructional Services Between Schools Payments to Fiscal Agent/Member Districts of SSA Payments to Fiscal Agent/Member Districts of SSA Payments to Juvenile Justice Alternative Ed. Prg. Payments to JuvenileOther Justice Alternative Ed. Prg. Intergovernmental Charges Other Intergovernmental Charges Total Expenditures Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): OTHER FINANCING Capital SOURCES (USES): Related Debt Issued of Real and Personal Property Capital Related DebtSale Issued Proceeds of Right-to-Use Leases and Subscriptions Sale of Real and Personal Property Premium or Discount on Issuance of Bonds Proceeds of Right-to-Use Leases and Subscriptions Outof (Use) Premium or DiscountTransfers on Issuance Bonds Transfers Out (Use) Total Other Financing Sources (Uses)

Total Other Financing Sources (Uses) Net Change in Fund Balances Net Change in Fund Balances Fund Balance - September 1 (Beginning) Fund Balance - September 1 (Beginning)

170,016,516 $$ 98,780,060 5,117,367 273,913,943

170,021,996 85,119,970 $$ 98,780,060 1,259,714 5,111,887 273,913,943 86,379,684

150,929,739 3,019,544 4,460,814 1,567,198 12,755,771 6,325,081 2,074,269 10,649,233 160,121 8,279,664 7,986,629 24,798,821 3,581,802 8,081,908 2,295

150,929,739 3,019,544 4,460,814 1,567,198 12,755,771 6,325,081 2,074,269 10,649,233 160,121 8,279,664 7,986,629 24,798,821 3,581,802 8,081,908 2,295 -

833,230 72,380 -

833,230 76,168,898 72,380 59,846,515 955,503

1,363,339

85,119,970 12,951,373 $$ 1,259,714 86,379,684 12,951,373

283,016,778 101,490,371 16,110,656 400,617,805

76,168,898 59,846,515 955,503 1,217,237

-1,217,237 -

77,002,128 59,918,895 2,172,740

1,363,339 -

349,580,693

349,580,693 -

350,944,032

25,059,326

233,023 201,184 1,415 1,477,157 248,854,617 136,970,916 25,059,326 (50,591,232)

---136,970,916 350,797,930 (50,591,232) (337,846,557)

---350,797,930 26,164,700 (337,846,557) 1,208,105

12,982 935,558 (2,500,000)

12,982 52,160,413 935,558 (2,500,000) 1,624,965 (1,551,460)

52,160,413 244,869,587 215,950 1,624,965 6,347,650 53,785,378

23,507,866

53,785,378 23,507,866 3,194,146 128,789,676

128,789,676

16,076,388

251,433,187 3,194,146 (86,413,370) 16,076,388 323,863,604

244,869,587 215,950 -6,347,650 -251,433,187 (86,413,370) 1,208,105 323,863,604

233,023 201,184 1,415 1,477,157 248,854,617

$ 152,297,542 $

The notes to the financial statements are an integral part of this statement.

The notes to theto financial statements are an integral this statement.

The notes the financial statements arepart anofintegral part of this statement.

60 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

------------

12,951,373 $ 14,928,919 1,450,597 10,993,289 12,951,373 27,372,805

Total Governmental Funds

156,896,356 3,025,620 6,580,816 1,602,155 12,822,832 8,723,762 2,304,823 10,676,944 10,727,487 12,511,195 8,056,152 25,039,990 3,778,937 8,081,908 8,612

(1,551,460)

$

Capital Other Projects Funds

5,966,617 6,076 2,120,002 34,957 67,061 2,398,681 230,554 27,711 10,567,366 4,231,531 69,523 241,169 197,135 -6,317

Fund Balance - August 31 (Ending)

Fund Balance - August 31 (Ending)

DebtCapital Service Fund Projects

152,297,542 $

19,270,534

$

19,270,534

3,912,796

$

237,450,234 $

233,023 201,184 1,415 1,477,157 762,788,163 (362,170,358) 297,030,000 228,932 935,558 7,972,615 (2,500,000) 303,667,105 (58,503,253) 472,642,464

237,450,234

5,120,901 $

414,139,211

GOVERNMENTAL FUNDS FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

EXHIBIT

C-2R

PROSPER INDEPENDENT SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED AUGUST 31, 2023

Total Net Change in Fund Balances - Governmental Funds

$

(58,503,253)

Current year capital asset additions are expenditures in the fund financial statements, but they are shown as increases in capital assets in the government-wide financial statements. The net effect of reclassifying the current year capital asset additions is to increase net position.

332,073,898

Depreciation is not recognized as an expense in governmental funds since it does not require the use of current financial resources. The net effect of the current year's depreciation is to decrease net position in the government-wide financial statements.

(37,742,114)

Interest is accrued on outstanding debt in the government-wide financial statements, whereas in the fund financial statements interest expenditures are reported when due.

688,241

Revenues from property taxes are deferred in the fund financial statements until they are considered available to finance current expenditures, but such revenues are recognized when assessed, net of an allowance for uncollectable amounts, in the government-wide financial statements.

813,883

Current year amortization of the premium/discount on bonds payable is not recorded in the fund financial statements, but is shown as a change in long-term debt in the government-wide financial statements.

5,280,109

Current year interest accretion on capital appreciation bonds is not recognized in the fund financial statements, but is shown as a change in long-term debt in the government-wide financial statements.

1,029,112

The net profit (loss) of internal service funds is not included in the fund financial statements but is reported with governmental activities in the government-wide financial statements.

2,880,987

Current year principal payments on bonds payable, leases, and subscriptions payable are expenditures in the fund financial statements, but are shown as reductions in long-term debt in the government-wide financial statements.

77,002,128

The implementation of GASB 68 required that certain expenditures be de-expended and recorded as deferred resource outflows. These contributions made after the measurement date of 8/31/2022 caused the ending net position to increase in the amount of $6,270,752. These contributions were replaced with the District's pension expense for the year of $11,997,373, which caused a decrease in the change in net position. The impact of all of these is to decrease net position by $5,726,621.

(5,726,621)

The implementation of GASB 75 required that certain expenditures be de-expended and recorded as deferred resource outflows. TRS OPEB contributions made during the current fiscal year caused the ending net position to increase in the amount of $1,330,153. These contributions were replaced with the District's OPEB expense for the year, which was $989,898 and caused a decrease in net position.

The impact of both of these is to increase net position by $340,255.

340,255

The notes to the bond financial statements are anasintegral part of thisinstatement.

Proceeds from sales are recorded other resources the fund financial statements but are

(297,030,000)

shown as an increase in long-term debt in the government-wide financial statements.

Premium received on bond sales are recorded as other resources in the fund financial statements but (7,972,615) 2023 ANNUAL FINANCIAL REPORT | 61 are shown as an increase in long-term debt in the government-wide financial COMPREHENSIVE statements.

government-wide financial statements.

BASIC FINANCIAL STATEMENTS | GOVERNMENTAL FUNDS FINANCIAL STATEMENTS

The implementation of GASB 68 required that certain expenditures be de-expended and recorded as deferred resource outflows. These contributions made after the measurement date of 8/31/2022 caused the ending net position to increase in the amount of $6,270,752. These contributions were EXHIBIT replaced with the District's pension expense for the year of $11,997,373, which caused a decrease in CONTINUED the change in net position. The impact of all of these is to decrease net position by $5,726,621.

(5,726,621)

C-2R

The implementation of GASB 75 required that INDEPENDENT certain expenditures be de-expended PROSPER SCHOOL DISTRICT and recorded as 340,255 THE GOVERNMENTAL FUNDS STATEMENT REVENUES, EXPENDITURES, deferred RECONCILIATION resource outflows. OF TRS OPEB contributions made during the currentOF fiscal year caused the CHANGES IN FUND THEcontributions STATEMENTwere OF ACTIVITIES ending net position toAND increase in the amount of BALANCES $1,330,153. TO These replaced with FOR THE was YEAR ENDEDand AUGUST 2023 the District's OPEB expense for the year, which $989,898 caused31, a decrease in net position.

The impact of both of these is to increase net position by $340,255.

PROSPER INDEPENDENT SCHOOL DISTRICT

Proceeds from sales are recorded as other resources in the fund financial statements but are (297,030,000) ProceedsRECONCILIATION from bond right-to-use leases subscriptions are recorded as other resources in the fund (935,558) OF THEand GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, shown as an increase in long-term debt in the government-wide financial statements. financial statements but areCHANGES shown as an in long-term the government-wide financial AND INincrease FUND BALANCES TOdebt THEinSTATEMENT OF ACTIVITIES statements.

FOR THE YEAR ENDED AUGUST 31, 2023 Premium received on bond sales are recorded as other resources in the fund financial statements but (7,972,615) are shown as an increase in long-term debt in the government-wide financial statements.

Current year amortization of deferred charge on bond refunding is not recorded in the fund financial (1,348,978) statements, but is shown as a reduction of the deferred loss in the government-wide financial Proceeds from right-to-use leases and subscriptions are recorded as other resources in the fund (935,558) statements.

The notes tostatements the financialbut statements are an as integral part of this financial are shown an increase instatement. long-term debt in the government-wide financial statements.

The basis of capital assets sold is not recorded in the fund financial statements but is shown as a (77,207) reduction in capital assets in the government-wide financial statements.

Current year amortization of deferred charge on bond refunding is not recorded in the fund financial (1,348,978) statements, but is shown as a reduction of the deferred loss in the government-wide financial Change in Net Position of Governmental Activities $ 10,772,267 statements.

The basis of capital assets sold is not recorded in the fund financial statements but is shown as a reduction in capital assets in the government-wide financial statements.

Change in Net Position of Governmental Activities

The notes to the financial statements are an integral part of this statement.

62 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

(77,207) $

10,772,267

BASIC FINANCIAL STATEMENTS

Proprietary Fund Financial Statements

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 63

BASIC FINANCIAL STATEMENTS

64 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

PROPRIETARY FUND FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

EXHIBIT

D-1 PROSPER INDEPENDENT SCHOOL DISTRICT STATEMENT OF NET POSITION PROPRIETARY FUNDS AUGUST 31, 2023 Governmental Activities -

Total Internal Service Funds

ASSETS Current Assets: Cash and Cash Equivalents Investments - Current Due from Other Funds

$

620,568 2,500,336 901,045 4,021,949

Total Assets LIABILITIES Current Liabilities: Accounts Payable Claims Payable Total Current Liabilities

8,649 250,000 258,649

Noncurrent Liabilities: Claims Payable Total Noncurrent Liabilities

303,103 303,103 561,752

Total Liabilities NET POSITION Unrestricted Net Position

3,460,197 $

Total Net Position

3,460,197

The notes to the financial statements are an integral part of this statement.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 65 The notes to the financial statements are an integral part of this statement.

BASIC FINANCIAL STATEMENTS | PROPRIETARY FUND FINANCIAL STATEMENTS

EXHIBIT

D-2 PROSPER INDEPENDENT SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED AUGUST 31, 2023 Governmental Activities -

Total Internal Service Funds

OPERATING REVENUES: Local and Intermediate Sources

$

Total Operating Revenues

414,736 414,736

OPERATING EXPENSES: Other Operating Costs

34,085

Total Operating Expenses

34,085

Operating Income

380,651

NONOPERATING REVENUES (EXPENSES): Earnings from Temporary Deposits & Investments

336

Total Nonoperating Revenues (Expenses)

336

Income Before Transfers

380,987

Transfers In

2,500,000

Change in Net Position

2,880,987

Total Net Position - September 1 (Beginning)

579,210

Total Net Position - August 31 (Ending)

The notes to the financial statements are an integral part of this statement.

66 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

The notes to the financial statements are an integral part of this statement.

$

3,460,197

PROPRIETARY FUND FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

EXHIBIT

D-3 PROSPER INDEPENDENT SCHOOL DISTRICT STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED AUGUST 31, 2023 Governmental Activities -

Total Internal Service Funds

Cash Flows from Operating Activities: Cash Received from District Cash Payments for Claims

$

Net Cash Provided by Operating Activities

392,269 (295,120) 97,149

Cash Flows from Capital & Related Financing Activities: Transfers In

2,500,000

Cash Flows from Investing Activities: Purchase of Investment Securities Interest and Dividends on Investments

(2,500,336) 22,803

Net Cash Provided by (Used for) Investing Activities

(2,477,533)

Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year

119,616 500,952

Cash and Cash Equivalents at End of Year

$

620,568

Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating Income:

$

380,651

Effect of Increases and Decreases in Current Assets and Liabilities: Increase (decrease) in Accounts Payable Increase (decrease) in Claims Payable

8,649 (292,151)

Net Cash Provided by Operating Activities

$

97,149

The notes to the financial statements are an integral part of this statement.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 67

BASIC FINANCIAL STATEMENTS

68 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

BASIC FINANCIAL STATEMENTS

Fiduciary Fund Financial Statements

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 69

BASIC FINANCIAL STATEMENTS | FIDUCIARY FUND FINANCIAL STATEMENTS

EXHIBIT

E-1 PROSPER INDEPENDENT SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS AUGUST 31, 2023

Custodial Fund

ASSETS Cash and Cash Equivalents

$

Total Assets

196,617 196,617

LIABILITIES Accounts Payable Due to Other Funds

11,962 7,243

Total Liabilities

19,205

NET POSITION Unrestricted Net Position Total Net Position

The notes to the financial statements are an integral part of this statement.

70 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT The notes to the financial statements are an integral part of this statement.

177,412 $

177,412

FIDUCIARY FUND FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

EXHIBIT

E-2 PROSPER INDEPENDENT SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED AUGUST 31, 2023

Custodial Fund

ADDITIONS: Cocurricular Services or Activities

$

Total Additions

310,712 310,712

DEDUCTIONS: Student Groups

336,938

Total Deductions

336,938

Change in Fiduciary Net Position

(26,226)

Total Net Position - September 1 (Beginning)

203,638

Total Net Position - August 31 (Ending)

$

177,412

The notes to the financial statements are an integral part of this statement.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 71

The notes to the financial statements are an integral part of this statement.

BASIC FINANCIAL STATEMENTS

72 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

BASIC FINANCIAL STATEMENTS

Notes to the Basic Financial Statements

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 73

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPERINDEPENDENT INDEPENDENTSCHOOL SCHOOL DISTRICT DISTRICT PROSPER NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Prosper Independent School District (the "District") is a public educational agency operating under the applicable rules and regulations of the State of Texas. The District’s combined financial statements have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units in conjunction with the Texas Education Agency's Financial Accountability System Resource Guide (FAR). The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting and financial reporting principles. The more significant accounting E. establishing ENCUMBRANCE ACCOUNTING policies of the District are described below.

The District employs encumbrance accounting, whereby encumbrances for goods or purchased A. services REPORTING ENTITY by purchase orders and contracts. An encumbrance represents a are documented commitment of Board appropriation related to unperformed contracts for goods and services. The The Board Trustees,order a seven groupofelected by registered of the District, fiscal issuance of aofpurchase or member the signing a contract creates voters an encumbrance buthas does not accountability over all activities related to public elementary and secondary education within the represent an expenditure for the period, only a commitment to expend resources. Appropriations of trustees are elected theeither public.

The trustees as a body jurisdiction of 31 the and District.

The boardoutstanding lapse at August encumbrances at that timebyare canceled or appropriately corporate have the exclusive power and duty to govern and oversee the management of the public provided for in the subsequent year’s budget. schools of the district. All powers and duties not specifically delegated by statute to the Texas Education Agency (Agency) or to the State Board of Education are reserved for the trustees, and the F. PREPAID ITEMS Agency may not substitute its judgment for the lawful exercise of those powers and duties by the trustees. The District is not included in any other governmental "reporting entity" as defined in Prepaid balances are for payments made by the District in theFinancial current Reporting fiscal yearStandards. to provide services Section 2100, Codification of Governmental Accounting and occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable to statements signify that a portion of fundof balance is operations. not available other The District’sfund basicbalance financial include the accounts all District Thefor criteria expenditures. subsequent for including organizations as component units within the District’s reporting entity, as set forth in Section 2100 of GASB’s Codification of Governmental Accounting and Financial Reporting G. INVENTORIES Standards, include whether:

B.

The consumption ●method is used to accountseparate for inventories of food products, supplies and the organization is legally (can sue and be sued in their school own name) ● theUnder District holds the corporate powersare of the organization athletic equipment. this method, these items carried in an inventory account of the District a voting majority of the organization’s respective fund at● the cost, usingappoints the first-in, first-out method of accountingboard and are subsequently ● the District is able to impose itsGeneral will on the organization charged to expenditures when consumed.

In the Fund, reported inventories are offset by a ● the organization has are the unavailable potential toasimpose financial benefit/burden on the currenta expendable financial resources. fund balance reserve indicating that they District ● there is fiscal dependency organization on the District Inventories of food commodities are recordedbyatthe market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair value is supplied by the Based on the aforementioned Prosper School District no component units.and Texas Department of Humancriteria, Services and Independent initially recorded as an has expense.

Inventory expenditures are adjusted periodically subsequent to inventory counts.

BASIS OF PRESENTATION

H. RECEIVABLE AND PAYABLES The government-wide financial statements (the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the District. The effect of areand shown at face activities value. The property tax receivable Allinterfund trade and property taxthereceivables activity, within governmental business-type columns, has been removed allowance is shown at various rates based upon historical trends of outstanding property and from these statements. Governmental activities, which normally are supported by taxes taxes receivable as of August 31, 2023. intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

I. INTERFUND RECEIVABLES AND PAYABLES The statement of activities demonstrates the degree to which the direct expenses of a given program Short-term owed between funds are classified “Due to/from other funds”. are offset amounts by program revenues.

Direct expenses are thoseas that are clearly identifiable with a Interfund specific loans are classified “Advances to/from other funds” and are by awho fundpurchase, balanceuse, reserve program.

Programasrevenues include 1) charges to customers or offset applicants or activitiesand and account. residual balances outstanding betweenprovided the governmental benefit from goods, services, or privileges by a given program 2) business-type operating or directlyAny capital grants and contributions that are restricted to meetingstatements the operational or capital balances” requirements activities are reported in the governmental-wide financial as “internal and of a particular program. Taxes and other items not properly included among program revenues are “internal advances”. reported instead as general revenues.

J. CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 74 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE INDEPENDENT BASIC FINANCIAL STATEMENTS PROSPER SCHOOL DISTRICT FOR THE YEAR ENDED AUGUST 2023 NOTES TO THE BASIC FINANCIAL31, STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023

Fund Financial Statements: The District segregates transactions related to certain functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Separate statements are presented for governmental and proprietary activities. These statements present each major fund as a separate column on the fund financial statements; all non-major funds are aggregated and presented in a single column.

E. ENCUMBRANCE ACCOUNTING Governmental funds are those funds through which most governmental functions typically are The District employs encumbrance accounting,funds whereby for goods or purchased financed.

The measurement focus of governmental is onencumbrances the sources, uses and balance of services are documented by purchase orders and contracts.

An encumbrance represents a current financial resources. The District has presented the following major governmental funds: commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase the issigning of a contract creates encumbrance but does 1. General Fund - order This or fund established to account for an resources financing the not Appropriations represent an expenditure for the period, only a commitment to expend resources. fundamental operations of the District, in partnership with the community, in enabling lapse at 31 and encumbrances at that time either and canceled or appropriately All are revenues expenditures not andAugust motivating students to reach outstanding their full potential. provided for in the subsequent year’s budget. required to be accounted for in other funds are included here. This is a budgeted fund F.

and any fund balances are considered resources available for current operations. Fund PREPAIDbalances ITEMS may be appropriated by the Board of Trustees to implement its responsibilities.

Prepaid balances areFund for payments madeisby the District the current fiscal year provideand services 2. Debt Service - This fund established to inaccount for payment of to principal occurring in the subsequent fiscal year, and the amount of prepayments has been recognized interest on long-term general obligation debt and other long-term debts for which a tax as nonspendable balanceThis to signify that a portion of fund balance is not has beenfund dedicated. is a budgeted fund. Any unused sinking fundavailable balancesfor areother expenditures. subsequent transferred to the General Fund after all of the related debt obligations have been met.

G. INVENTORIES 3. Capital Projects Fund - This fund is established to account for proceeds, from the sale of bonds and other resources to be used for Board authorized acquisition, construction, or The consumption to account forequipping inventoriesofofmajor food capital products, school supplies renovation, method as well isas,used furnishings and facilities.

Upon and athleticcompletion equipment.

Under this method, these items are carried in an inventory account of a project, any unused bond proceeds are transferred to the Debt Serviceof the respective fund at cost, tousing first-in, method of accounting and are subsequently Fund and are used retirethe related bondfirst-out principal. charged to expenditures when consumed. In the General Fund, reported inventories are offset by a as current expendable financial resources. fund balance reservereports indicating that they are unavailable Additionally, the District the following fund types: Inventories of Revenue food commodities are recorded at market valuestosupplied Texas Department 1. Special Funds - These funds are established account by forthe federally financed of HumanorServices.

Although commodities are received at no cost, their fair value is supplied expenditures legally restricted for specified purposes. In many special revenue funds,by the Texas any Department of Human Servicesto and initiallyat recorded an expense. unused balances are returned the grantor the close as of specified projectInventory periods. and expenditures are adjusted periodically subsequent to inventory counts.

For funds in this fund type, project accounting is employed to maintain integrity for the

various sources of funds.

H. RECEIVABLE AND PAYABLES

2. Internal Service Fund - The District utilizes Internal Service Funds to account for are shown at face value.inside Thethe property All trade and and property tax related receivables revenues expenses to services provided to parties District tax on areceivable cost allowance is shown at various rates based upon historical trends of outstanding property reimbursement basis. These funds facilitate distribution of support costs to the users oftaxes receivable as ofservices.

August 31, 2023. support The District has internal service fund for its workers compensation

I.

self-insurance plan.

INTERFUND RECEIVABLES AND PAYABLES

3. Fiduciary Funds - The District reports Custodial Funds as Fiduciary Funds. Custodial Short-term owedinbetween funds are classified as “Due to/from other funds”.groups.

Interfund Fundsamounts are custodial nature and account for activities of student and employee loans Custodial are classified as “Advances to/from other funds” and are offset by a fund balance reserve Funds exist with the explicit approval of, and are subject to revocation by, the activities and business-type account.

Any residual balances outstanding between the governmental Board. The District’s Custodial Fund is the Student Activity Fund. activities are reported in the governmental-wide financial statements as “internal balances” and advances”.

The “internal internal service fund is a proprietary fund type. Proprietary funds distinguish operating

revenues and expenses from non-operating items. Operating revenues and expenses generally result J. from CAPITAL ASSETS providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. Operating expenses for the proprietary funds include the cost of Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 75

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 personal and contractual services, supplies and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

C.

MEASUREMENT FOCUS/BASIS OF ACCOUNTING

Measurement focus refers to what is being measured; basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of E. ENCUMBRANCE ACCOUNTING accounting relates to the timing of the measurement made, regardless of the measurement focus applied.

The District employs encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase andstatements contracts.for An encumbrance represents The government-wide statements and fundorders financial proprietary funds are reported a commitment of Board appropriation related to unperformed contracts for goods and services.

The using the economic resources measurement focus and the accrual basis of accounting. The issuance of a purchase order or the signing of a contract creates an encumbrance but does not economic resources measurement focus means all assets and liabilities (whether current or Appropriations represent an expenditure for the period, only a commitment to expend resources. non-current) are included on the statement of net position and the operating statements present lapse at August 31 and outstanding at that are either canceled or appropriately in net totaltime position.

Under the accrual basis of increases (revenues) and encumbrances decreases (expenses) provided for in the subsequent year’s budget. accounting, revenues are recognized when earned and expenses are recognized at the time the F.

liability is incurred.

PREPAID ITEMS

Governmental fund financial statements are reported using the current financial resources Prepaid balances made by thethe District in the current fiscal year to provide services measurement focusare andforarepayments accounted for using modified accrual basis of accounting.

Under the occurring in the subsequent fiscal year, and the amount of prepayments has been recognized modified accrual basis of accounting, revenues are recognized when susceptible to accrual; i.e.,as nonspendable fund balance to signifyand thatavailable. a portion of fund balancemeans is notthe available they become both measurable “Measurable” amountfor of other the when expenditures. subsequent transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The District considers property G. INVENTORIES taxes as available if they are collected within 60 days after year-end. A 90 day availability period is used for recognition of all other Governmental Fund revenues. Expenditures are recorded when the The consumption is used to account inventories of foodasproducts, school supplies and related fund liabilitymethod is incurred.

However, debt for service expenditures, well as expenditures related athletic equipment.

Under this method, these items are carried in an inventory account of the to compensated absences are recorded only when payment is due. respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures consumed.

In the General Fund, reported inventories offset by a The fiduciary net positionwhen of the Teacher Retirement System of Texas (TRS) has beenare determined as current expendable financial resources. fund balance reserve indicating that they are unavailable using the flow of economic resources measurement focus and full accrual basis of accounting. This includes for purposes of measuring the net pension liability, deferred outflows of resources and Inventories of food commodities are to recorded at market values supplied the Texas Department inflows of resources related pensions, pension expense, and by information about assets,of deferred Human Services.

Although commodities are received at no cost, their fair value is supplied by the liabilities and additions to/deductions from TRS’s fiduciary net position. Benefit payments Texas Department Humancontributions) Services andareinitially recorded expense.

Inventory and (including refunds of of employee recognized when as dueanand payable in accordance expenditures are adjusted periodically subsequent to inventory counts. with the benefit terms. Investments are reported at fair value.

H. RECEIVABLE PAYABLES The fiduciaryAND net position of the Teacher Retirement System of Texas (TRS) TRS-Care Plan has been determined using the flow of economic resources measurement focus and full accrual basis of shown the at face value. liability, The property receivable All trade and accounting.

Thisproperty includestax for receivables purposes ofare measuring net OPEB deferredtax outflows of allowance is shown at various rates based upon historical trends of outstanding property taxes resources and deferred inflows of resources related to other post-employment benefits, OPEB receivable as of August 31,about 2023. assets, liabilities and additions to/deductions from TRS-Care’s expense, and information fiduciary net position. Benefit payments are recognized when due and payable in accordance with I. INTERFUND RECEIVABLES AND PAYABLES There are no investments as this is a pay-as-you-go plan and all cash is held in a the benefit terms. cash account.

Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances other taxes, funds”charges and arefor offset by a interest fund balance reserve The revenue susceptible to accrual to/from are property services, income and activities and business-type account.

Any residual balances outstanding between the governmental intergovernmental revenues. All other Governmental Fund Type revenues are recognized when activities are reported in the governmental-wide financial statements as “internal balances” and received. “internal advances”.

J.

Revenues from state and federal grants are recognized as earned when the related program CAPITAL ASSETS expenditures are incurred. Funds received but unearned are reflected as unearned revenues, and funds expended but not yet received are shown as receivables.

Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

76 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES NOTES TO THE BASIC FINANCIAL STATEMENTS TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 Revenue from investments, including governmental external investment pool, is based upon fair value. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Most investments are reported at amortized cost when the investments have remaining maturities of one year or less at time of purchase. External investment pools are permitted to report short-term debt investments at amortized cost, provided that the fair value of those investments is not significantly affected by the impairment of the credit standing of the issuer, or other factors. For that purpose, a pool’s short-term E. ENCUMBRANCE investments are ACCOUNTING those with remaining maturities of up to ninety days.

The District employs accounting, whereby for goods system or purchased In accordance with theencumbrance FAR, the District has adopted andencumbrances installed an accounting which services areminimum documented by purchase ordersby and contracts. encumbrance represents exceeds the requirements prescribed the State Board ofAn Education and approved by thea commitment appropriation relatedaccounting to unperformed contracts for goods and code services.

The structure State Auditor.of Board Specifically, the District's system uses codes and the issuance of a purchase order or the signing of a contract creates an encumbrance but does not presented in the Accounting Code Section of the FAR. represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately D. BUDGETARY CONTROL provided for in the subsequent year’s budget.

Formal budgetary accounting is employed for all required Governmental Fund Types, as outlined in F. PREPAID TEA's ITEMS FAR module, and is presented on the modified accrual basis of accounting consistent with generally accepted accounting principles. The budget is prepared and controlled at the function level Prepaid balances are for to payments made by the for District in the current fiscal year to provide services within each organization which responsibility controlling operations is assigned. occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund budget balanceis to signifyfor that a portion fund balance is not Fund available other The official school prepared adoption for of required Governmental Typesforprior to expenditures. subsequent August 20 of the preceding fiscal year for the subsequent fiscal year beginning July 1. The budget is formally adopted by the Board of Trustees at a public meeting held at least ten days after public G. INVENTORIES notice has been given. The budget is prepared by fund, function, object, and organization. The budget is controlled at the organizational level by the appropriate department head or campus The consumption methodallocations. is used to account for inventories of food supplies and principal within Board Therefore, organizations mayproducts, transferschool appropriations as athletic equipment.

Under this method, these items are carried in an inventory account of the necessary without the approval of the board unless the intent is to cross fund, function or increase respective at allocations. cost, using the first-in, first-out method and are issubsequently the overall fund budget Control of appropriations by of theaccounting Board of Trustees maintained charged to expenditures when consumed.

In the General Fund, reported inventories are offset by a within Fund Groups at the function code level and revenue object code level. fund balance reserve indicating that they are unavailable as current expendable financial resources.

Annual budgets are adopted on a basis consistent with generally accepted accounting principles for Inventories foodthe commodities areFund recorded supplied thespecial Texas Department of the General of Fund, Debt Service and at themarket Child values Nutrition Fund.byThe revenue funds Human Although are received at nowhich cost, do their value is supplied by the and the Services.

Capital Projects Fundcommodities adopt project-length budgets notfair correspond to the District's Texas year.

Department of Human andoninitially recorded as an expense.

Inventory fiscal Each annual budgetServices is presented the modified accrual basis of accounting whichand is expenditures are adjusted periodically subsequent to inventory counts. consistent with generally accepted accounting principles. The budget is amended throughout the year by the Board of Trustees. Such amendments are reflected in the official minutes of the Board.

H. RECEIVABLE AND PAYABLES A reconciliation of fund balances for both appropriated budget and nonappropriated budget special All tradefunds and isproperty tax receivables are shown at face value. The property tax receivable revenue as follows: allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

August31, 31,2023 2023 August Fund Balance Fund Balance I. INTERFUND RECEIVABLES AND PAYABLES Appropriated Budget Funds $1,925,195 Appropriated Budget Funds $1,925,195 Short-term amounts owed classified as “Due to/from other funds”.

Interfund Nonappropriated Budgetbetween Funds funds are 3,195,706 loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve Nonappropriated Budget Funds 3,195,706 All Special Revenue Funds $5,120,901 activities and business-type account.

Any residual balances outstanding between the governmental All Special Revenue Funds $5,120,901 activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 77

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 E. ENCUMBRANCE ACCOUNTING The District employs encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase order or the signing of a contract creates an encumbrance but does not represent an expenditure for the period, only a commitment to expend resources. Appropriations E. ENCUMBRANCE lapse at AugustACCOUNTING 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

The District employs encumbrance accounting, whereby encumbrances for goods or purchased servicesITEMS are documented by purchase orders and contracts. An encumbrance represents a F. PREPAID commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase or the signing a contract encumbrance but does not Prepaid balances are for order payments made by theofDistrict in thecreates currentan fiscal year to provide services Appropriations represent an expenditure for the period, only a commitment to expend resources. occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as lapse at Augustfund 31 and encumbrances at that eitheriscanceled or appropriately nonspendable balance to signify outstanding that a portion of time fund are balance not available for other provided for in the subsequent year’s budget. subsequent expenditures.

F. ITEMS G. PREPAID INVENTORIES Prepaid balances are for payments made by the in theofcurrent fiscal yearschool to provide services The consumption method is used to account forDistrict inventories food products, supplies and occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as athletic equipment. Under this method, these items are carried in an inventory account of the nonspendable fund balance to signify that a portion of fund balance is not available for other respective fund at cost, using the first-in, first-out method of accounting and are subsequently expenditures.when consumed. In the General Fund, reported inventories are offset by a subsequent charged to expenditures fund balance reserve indicating that they are unavailable as current expendable financial resources.

G. INVENTORIES Inventories of food commodities are recorded at market values supplied by the Texas Department of The consumption used to account for inventories of food school supplies Human Services. method Althoughis commodities are received at no cost, theirproducts, fair value is supplied byand the athletic equipment.

Under this method, these items are carried in an inventory account the Texas Department of Human Services and initially recorded as an expense. Inventoryof and respective fund at cost, using the first-in, first-out method of accounting and are subsequently expenditures are adjusted periodically subsequent to inventory counts. charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balanceAND reserve indicating that they are unavailable as current expendable financial resources.

H. RECEIVABLE PAYABLES Inventories of food commodities are recorded at market suppliedThe by the Texas tax Department of are shown at values face value. property receivable All trade and property tax receivables Human Services.

Although commodities are upon received at no cost, their value is supplied the allowance is shown at various rates based historical trends of fair outstanding property by taxes Texas Department of 31, Human receivable as of August 2023.Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

I. INTERFUND RECEIVABLES AND PAYABLES H. RECEIVABLE AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund shown at face value. tax receivable All and property tax receivables loanstrade are classified as “Advances to/fromareother funds” and are offsetThe by property a fund balance reserve allowance is shown at various rates based upon historical trends of outstanding property taxes account. Any residual balances outstanding between the governmental activities and business-type receivableare as ofreported August in 31,the 2023. activities governmental-wide financial statements as “internal balances” and “internal advances”.

I. INTERFUND RECEIVABLES AND PAYABLES J. CAPITAL ASSETS Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans classified “Advances to/from other funds” and offset by a assets, fund balance reserve Capitalare assets, whichasincludes property, plant, equipment, andare infrastructure are reported in activities and business-type account.

Any residual balances outstanding between the governmental the applicable governmental or business-type activities columns in the government-wide financial activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

78 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 statements and in the fund financial statements for proprietary funds. All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated assets are valued at acquisition value on the date donated. Repairs and maintenance are recorded as expenditures. Renewals and betterments are capitalized. Interest has not been capitalized during the construction period on property, plant and equipment.

E. ENCUMBRANCE ACCOUNTING Assets capitalized have an original cost of $5,000 or more and over one-year of useful life.

Depreciation has been calculated on each class of depreciable property using the straight-line The District employs encumbrance whereby encumbrances for goods or purchased method.

Estimated useful lives are as accounting, follows: services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related to unperformed contracts for goods and services. The Asset Classification Useful Life issuance of a purchase order or the signing of a contract creates an encumbrance but does not Buildings 15-50 Years represent an expenditure for the period, only a commitment 15-50 to expend Building Improvements Yearsresources. Appropriations lapse at August 31 and encumbrances outstanding at that time 5-10 are either Vehicles & Buses Years canceled or appropriately provided for in the subsequent year’s budget.

Equipment 5-7 Years F.

PREPAID ITEMS The District has no restriction on any capital asset.

Prepaid balances are for payments made by the District in the current fiscal year to provide services COMPENSATED ABSENCES occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable balance to the signify portion of fundand balance is notdays available for of other Vacations are tofund be taken within samethat yeara they are earned, any unused at the end the expenditures. subsequent year are forfeited.

Therefore, no liability has been accrued in the accompanying basic financial statements. Employees of the District are entitled to sick leave based on category/class of G. INVENTORIES employment. Sick leave is allowed to be accumulated but does not vest. Therefore, no liability exists for unused sick leave.

The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the L. CASH EQUIVALENTS respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when of consumed. theproprietary General Fund, reported inventories are offsettobybea For purposes of the statement cash flowsInfor funds, investments are considered as current financial resources. fund equivalents balance reserve indicating thatliquid they are cash if they are highly withunavailable maturity within threeexpendable months or less.

K.

Inventories of food commodities are recorded at market values supplied by the Texas Department of NET POSITION Human Services. Although commodities are received at no cost, their fair value is supplied by the Texasposition Department of Human Servicesbetween and initially an expense.

Net represents the difference assets,recorded deferred asinflows, deferredInventory outflows and expenditures are periodically subsequent inventory liabilities.

Netadjusted investment in capital assets to consists of counts. capital assets, net of accumulated depreciations, reduced by the outstanding balances of any borrowing used for the acquisition, H. RECEIVABLE PAYABLES of those assets, and adding back unspent proceeds. Net position is constructionAND or improvements reported as restricted when there are limitations imposed on their use either through the enabling are shown face value.

The property tax grantors receivable All trade and property taxDistrict receivables legislations adopted by the or through externalatrestrictions imposed by creditors, or allowance is shownof at various rates based upon historical trends of outstanding property taxes laws or regulations other governments. receivable as of August 31, 2023.

N. LONG-TERM OBLIGATIONS I. INTERFUND RECEIVABLES AND PAYABLES In the government-wide financial statements, and proprietary fund types in the fund financial Short-term fundslong-term are classified as “Dueareto/from otherasfunds”.

Interfund statements, amounts long-termowed debtbetween and other obligations reported liabilities in the loans are classified as “Advances to/from other activities, funds” and offset by a fund fund type balance statementreserve of net applicable governmental activities, business-type or are proprietary and account. Any balances outstanding position.

Bondresidual premiums and discounts are between deferred the and governmental amortized overactivities the life of thebusiness-type bonds using activities are interest reportedmethod. in the governmental-wide statements as “internal balances” the effective Bonds payable are financial reported net of the applicable bond premiumand or “internal discount. advances”.

Bond issuance costs are expensed in the year incurred.

M.

J.

CAPITAL ASSETS In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported Capital which includes property,received plant, equipment, and infrastructure assets, are reported in as otherassets, financing sources.

Premiums on debt issuances are reported as other financing the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 79

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS THEYEAR BASIC FINANCIAL STATEMENTS BASIC FINANCIAL STATEMENTS | NOTES FORTO THE ENDED AUGUST 31, 2023 PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TOonTHE sources while discounts debt BASIC issuancesFINANCIAL are reported asSTATEMENTS other financing uses. Issuance costs, NOTES TO THE BASIC FINANCIAL STATEMENTS whether or not withheld from the actual debt AUGUST proceeds received, are reported as debt service FOR THE YEAR ENDED 31, 2023 expenditures.

FOR THE YEAR ENDED AUGUST 31, 2023 sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

O.

DEFERRED OUTFLOWS/INFLOWS OF RESOURCES

Deferred outflows and inflows of resources are reported in the statement of financial position as E. ENCUMBRANCE ACCOUNTING described below: The DistrictOUTFLOWS/INFLOWS employs encumbrance accounting, whereby encumbrances for goods or purchased DEFERRED OF RESOURCES A deferredareoutflow of resources is a consumption of a contracts. government’sAn netencumbrance assets (a decrease in assetsa services documented by purchase orders and represents in excess of any related decrease in liabilities or an increase in liabilities in excess of any related commitment of Board related to for goods and services.

Deferred outflows and appropriation inflows of resources areunperformed reported in contracts the statement of financial positionThe as increase in assets) by the government that is applicable to a future reporting period.

The District issuance a purchase order or the signing of a contract creates an encumbrance but does has not describedof below: qualify forfor reporting in thisonly category: three itemsanthat represent expenditure the period, a commitment to expend resources. Appropriations lapse at August 31 of andresources encumbrances outstandingofatathat time are either canceled or appropriately A deferred outflow is a consumption government’s net assets (a decrease in assets Deferred outflows of resources for budget. refunding - Reported in the government-wide statement of net provided therelated subsequent year’s in excessfor of in any decrease in liabilities or an increase in liabilities in excess of any related position, the deferred charge on bond refundings results from the difference in the carrying value of increase in assets) by the government that is applicable to a future reporting period. The District has refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of F. PREPAID ITEMS that qualify for reporting in this category: three items the life of the refunded or refunding debt. The amount of deferred outflows reported in the on bond refundings at year August 31, 2023 was governmental activities for the deferred Prepaid balances areoffor payments made bycharge the District in the current fiscal to provide services Deferred outflows resources for refunding - Reported in the government-wide statement of net $23,331,005. occurring in deferred the subsequent fiscal and theresults amount of prepayments been recognized as position, the charge on bondyear, refundings from the differencehas in the carrying value of nonspendable funditsbalance to signify a portion of deferred fund balance is not available for other refunded debt and reacquisition price.that This amount is and amortized over the shorter of Deferred outflows of resources for pension - Reported in the government-wide financial statement subsequent the life of expenditures. the refunded or refunding debt. The amount of deferred outflows reported in the of net position, this deferred outflow results from pension plan contributions made after the governmental activities for the deferred charge on bond refundings at August 31, 2023 was measurement date of the net pension liability and the results of differences between expected and G. INVENTORIES $23,331,005. actual actuarial experiences. The deferred outflows of resources related to pensions resulting from subsequent totothe measurement date will be recognized a reduction of and the District contributions The consumption is usedfor account inventories food products,asschool supplies Deferred outflowsmethod of resources pension -for Reported in theofgovernment-wide financial statement net pension liability in the next fiscal year.

The other pension related deferred outflows will be athletic equipment. thisoutflow method,results these from items pension are carried an inventory made account of the of net position, this Under deferred planincontributions after amortized over the expected remaining service lives of all employees (active and inactive respective fund cost, the first-in, first-out accounting between and are expected subsequently measurement dateat of the using net pension liability and themethod results of of differences and employees) that are provided with pensions through Fund, the pension plan whichareis offset currently charged to expenditures whenThe consumed. the General inventories by a actual actuarial experiences. deferred In outflows of resourcesreported related to pensions resulting from approximately 5.7052indicating years. that they are unavailable as current expendable financial resources. fund balance reserve subsequent to the measurement date will be recognized as a reduction of the District contributions net pension liability in the next fiscal year. The other pension related deferred outflows will be plan by the A deferred outflow for pension expense resultsatfrom payments made to the pension Inventories of food are recorded market supplied

by TRS the(active Texas Department of amortized over thecommodities expected remaining service livesvalues of all employees and inactive District after the plan’s measurement date.

The amount of deferred outflows reported in Human Services.

Although commodities are received at nothe cost, their fair value is supplied by the the employees) that are provided with pensions through pension plan which is currently statement of net position for deferred pension August 31, was $60,366,358.

Texas Department Human Services andexpenses initiallyatrecorded as2023 an expense.

Inventory and approximately 5.7052ofyears. expenditures are adjusted periodically subsequent to inventory counts.

Deferred outflows of resources for OPEB- Reported in the government-wide financial statement A deferred outflow for pension expense results from payments made to the TRS pension plan by the of net position, PAYABLES this deferred outflow results from OPEB plan contributions made after the H. RECEIVABLE District afterAND the plan’s measurement date. The amount of deferred outflows reported in the measurement date of the net OPEB liability and the results of differences between expected and statement of net position for deferred pension expenses at August 31, 2023 was $60,366,358. actual investment earnings changes inare proportionate share.value.

The deferred outflows resources shown at face The property taxofreceivable All trade and property taxand receivables related to OPEB resulting from District contributions subsequent to the measurement date will be allowance outflows is shownofatresources various rates based upon historical of outstanding property taxes Deferred for OPEBReported in the trends government-wide financial statement recognized as a reduction of the net OPEB liability in the next fiscal year.

The other OPEB related receivable as of August 31, 2023.outflow results from OPEB plan contributions made after the of net position, this deferred deferred outflows will be amortized over the expected remaining service lives of all employees measurement date of the net OPEB liability and the results of differences between expected and (active andRECEIVABLES inactive employees) that are provided with OPEB through the OPEB plan which is I. INTERFUND AND PAYABLES actual investment earnings and changes in proportionate share. The deferred outflows of resources currently approximately 9.2179 years. The amount of deferred outflows reported in the statement of related to OPEB resulting from District contributions subsequent to the measurement date will be net position amounts for deferred OPEB expense at August 31, 2023aswas $42,678,228.

Short-term owed classified “Due to/from funds”.

Interfund recognized as a reduction ofbetween the net funds OPEB are liability in the next fiscal year. other The other OPEB related loans areoutflows classifiedwill as “Advances to/from funds” and are offset by alives fundofbalance reserve deferred be amortized over other the expected remaining service all employees A deferredAny inflow of resources an acquisition of a government’s net assets (an increase in assets in activities and plan business-type account. residual balancesisoutstanding between the governmental which is (active and inactive employees) that are provided with OPEB through the OPEB excess of any related increase in liabilities or a decrease in liabilities in excess of any related activities are reported in9.2179 the governmental-wide statements as “internal balances” currently approximately years. The amountfinancial of deferred outflows reported in the statementand of “internal advances”. net position for deferred OPEB expense at August 31, 2023 was $42,678,228.

O.

J.

CAPITAL ASSETS A deferred inflow of resources is an acquisition of a government’s net assets (an increase in assets in excess of any related increase in liabilities or a decrease in liabilities in excess of any related Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

80 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 decrease in assets) by the government that is applicable to a future reporting period. The District has three items that qualify for reporting in this category: Deferred inflows of resources for unavailable revenues - Reported only in the governmental funds balance sheet, unavailable revenues from property taxes arise under the modified accrual basis of accounting. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The District reported property taxes that are unavailable as deferred E. ENCUMBRANCE ACCOUNTING in the fund financial statements. The amount of deferred inflows of resources inflows of resources reported in the governmental funds at August 31, 2023 was $3,105,333.

The District employs encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related -toReported unperformed for goods financial and services.

The Deferred inflows of resources for pension in thecontracts government-wide statement issuance of a purchase orderinflows or the result signing of a contract creates anbetween encumbrance butand does not of net position, these deferred primarily from differences projected actual Appropriations represent an pension expenditure the period, These only aamounts commitment to expend resources. earnings on plan for investments. will be amortized over a closed five year lapse at August and2023, encumbrances outstanding at that time are either canceled appropriately the District reported deferred inflows of resources fororpensions in the period.

In fiscal31year provided for in the subsequent budget. statement of net position in the year’s amount of $23,533,849.

F.

PREPAID ITEMS Deferred inflows of resources for OPEB - Reported in the government-wide financial statement of net position, these deferred inflows result primarily from differences between expected and actual Prepaid balances are for payments made by the District in the current fiscal year toover provide experience and from changes in assumptions.

These amounts will be amortized the services average occurring remaining in the subsequent fiscal year, and themembers amount (9.2179 of prepayments as years forhas the been 2022 recognized measurement expected service life (AERSL) of all nonspendable fund balance a portion of fund balance is not available for inother year). In fiscal year 2023, to thesignify Districtthat reported deferred inflows of resources for OPEB the subsequent statement ofexpenditures. net position in the amount of $51,504,079.

G. INVENTORIES P. RISK MANAGEMENT The District consumption method is used risks to account inventories food school supplies and is exposed to various of lossfor related to tortsoftheft of,products, damage to and destruction of athletic errors equipment.

Under this method, these itemsand arenatural carrieddisasters. in an inventory account of the assets; and omissions; injuries to employees; During fiscal 2023, respective fund at commercial cost, using insurance the first-in,to first-out methodliabilities. of accounting are no subsequently Thereand were significant district purchased cover general charged to in expenditures when In theand General reported inventories are offset by a reductions coverage in the consumed. past fiscal year, there Fund, were no settlements exceeding insurance fund balance reserve indicating thatfiscal they years. are unavailable as current expendable financial resources. coverage for each of the past three Inventories of food commodities are recorded at market values supplied by the Texas Department of ESTIMATES Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Servicesin and initiallywith recorded as accepted an expense.

Inventory and The preparation of financial statements conformity generally accounting principles expenditures are adjusted periodically subsequent to inventory requires management to make estimates and assumptions thatcounts. affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

H. RECEIVABLE AND PAYABLES R. GRANT FUND ACCOUNTING All trade and property tax receivables are shown at face value. The property tax receivable allowance shown atFund various rates programs based upon trendsonofa outstanding taxes The Specialis Revenue includes thathistorical are financed project grantproperty basis. These receivable as of August 31, 2023. projects have grant periods that can range from less than twelve months to in excess of three years.

Grants are recorded as revenues when earned, which the District considers to be earned to the extent I. INTERFUND RECEIVABLES AND PAYABLES expenditures have been incurred, the District has met all eligibility requirements, and funds are available.

Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans BALANCE are classifiedAND as “Advances to/from other funds” and are offset by a fund balance reserve NOTE 2. FUND NET POSITION account. Any residual balances outstanding between the governmental activities and business-type activities reported in theStatement governmental-wide financial statements as “internal balances” and on the are government-wide of Net Position includes the following: Net position “internal advances”.

Net Investment in Capital Assets reports the difference between capital assets, net of accumulated J. CAPITALand ASSETS depreciation, the outstanding balance of debt, excluding unspent bond proceeds that is directly attributable to the acquisition, construction or improvement of those capital assets.

Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial Q.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 81

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 Restricted for Federal and State Grant Programs is the component of net position restricted to be spent for specific purposes prescribed by federal and state granting agencies.

Restricted for Debt Service is the component of net position that is restricted for payment of debt service by constraints established by the bond covenants.

Restricted for Campus Activities is the component of net position that is restricted for campus activities.

E. ENCUMBRANCE ACCOUNTING Unrestricted Net Position is the residual difference between assets, deferred outflows, liabilities and deferred Theis District employs encumbrance accounting, wherebypurposes. encumbrances for goods or purchased in capital assets or restricted for specific inflows that not invested services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase order or the signing of a contract creates an encumbrance but does not Appropriations represent an expenditure for the period,No. only54,a “Fund commitment to Reporting expend resources.

The District has implemented GASB Statement Balance and Governmental Fund lapse at August 31 and encumbrances outstanding that time are either canceled or appropriately Type Definitions” which provides more clearly defined fund at balance categories to make the nature and extent providedplaced for in the year’s budget. of the constraints on asubsequent government’s fund balances more transparent.

F. PREPAID ITEMS Fund Balance Classification: The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the District is bound to Prepaid balances are for payments by the Districtininthe therespective current fiscal year to provide honor constraints on the specific purposes made for which amounts governmental fundsservices can be occurring in theused subsequent fiscal year, fund and the amount of prepayments has been recognized as spent. The classifications in the governmental financial statements are as follows: nonspendable fund balance to signify that a portion of fund balance is not available for other expenditures. ● subsequent Nonspendable: This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. The District G. INVENTORIES has classified prepaid items as being nonspendable as these items are not expected to be converted to cash.

The consumption method is used to account for inventories of food products, school supplies and equipment.

Under this method, items carried in an inventory of the the ● athletic Restricted: This classification includesthese amounts forare which constraints have beenaccount placed on respective fund at cost, using the first-in, first-out method of accounting and are subsequently use of the resources either (a) externally imposed by creditors, grantors, contributors, or laws or chargedoftoother expenditures when consumed.

In the Fund,constitutional reported inventories areoroffset by a regulations governments, or (b) imposed

by General law through provisions enabling current expendable financial resources. fund balance they unavailable are to be are used for future as servicing of the District's bonded debt and legislation.

Debt reserve service indicating resources that are restricted through debt covenants. Capital projects fund resources are to be used for future Inventories food commodities areare recorded at market byconstitutional the Texas Department of construction andof renovation projects and restricted throughvalues bond supplied orders and law.

Human Services. Although commodities are received at no cost, their fair value is supplied by the Department Human Services andamounts initiallythat recorded an only expense.

Inventory and ● Texas Committed: Thisof classification includes can be as used for specific purposes expenditures are adjusted periodically subsequent to inventory counts. pursuant to constraints imposed by formal action of the District's Board of Trustees. The Board of Trustees establishes (and modifies or rescinds) fund balance commitments by passage of a resolution.

H. RECEIVABLE This can also be AND done PAYABLES through adoption and amendment of the budget. These amounts cannot be used for any other purpose unless the Board removes or changes the specified use by taking the same type of are initially shown atcommitted. face value. property tax Allthat trade propertywhen tax receivables action wasand employed the funds were ThisThe classification alsoreceivable includes allowance is shown ratesexisting based resources upon historical trends of outstanding property taxes committed for use in contractual obligations to at thevarious extent that have been specifically receivable of August requirements.

31, 2023. satisfying thoseascontractual The Board of Trustees have committed resources as of August 31, 2023 for future construction needs.

I. INTERFUND RECEIVABLES AND PAYABLES

J.

● Assigned: This classification includes amounts that are constrained by the District’s intent to be amounts owed between funds are classified as “DueThis to/from funds”.

Interfund usedShort-term for a specific purpose but are neither restricted nor committed. intentother can be expressed by the loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve in Board of Trustees or through the Board of Trustees delegating this responsibility to other individuals and business-type account. Under Any residual balances outstanding the District. the District's adopted policy, between the Boardtheofgovernmental Trustees may activities assign amounts for specific activities reported in the governmental-wide financial statements as Superintendent “internal balances” purposes but are it has also delegated authority to assign fund balance to the and and the “internal advances”. of Administrative Services. This classification also includes the remaining Assistant Superintendent positive fund balance for all governmental funds except for the General Fund. The District has assigned CAPITAL fund balanceASSETS of the General Fund as of August 31, 2023 for a projected 2023-24 budget deficit.

Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

82 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 ● Unassigned: This classification includes all amounts not included in other spendable classifications, including the residual fund balance for the General Fund.

When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the District considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the District considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless E. ENCUMBRANCE the Board of Trustees hasACCOUNTING provided otherwise in its commitment or assignment actions.

TheofDistrict encumbrance accounting, encumbrances or purchased The Board Trusteesemploys has adopted a fund balance policywhereby that expresses an intentforto goods maintain a level of are documented by purchase ordersfund and equal contracts.

An encumbrance represents assigned services and unassigned fund balance in the general to 25 percent of the fund's operatinga commitment of Board appropriation related to unperformed contracts for goods and services. The expenditures. issuance of a purchase order or the signing of a contract creates an encumbrance but does not Appropriations represent expenditure for included the period, only a commitment to expend resources.

The details of the an fund balances are in the Governmental Funds Balance Sheet (pages 22 and 23) lapse at August and are described below: 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

General Fund

F. PREPAID ITEMS The General Fund has unassigned fund balance of $75,058,630 at August 31, 2023. Deferred expenditures are for by the District the current fiscal yearoftofund provide services (prepaid Prepaid items) ofbalances $1,442,773 arepayments consideredmade nonspendable fund in balance. $66,000,000 balance has occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as been committed for future construction needs. $9,796,139 of fund balance has been assigned for a projected nonspendable fund balance to signify that a portion of fund balance is not available for other 2023-24 budget deficit. subsequent expenditures.

Other Major Funds G. INVENTORIES

The DebtThe Service Fund has restricted funds of $19,270,534 at August 31, products, 2023 consisting primarilyand of consumption method is used to account for inventories of food school supplies tax collections that are restricted for debt service payments on bonded debt.

The Capital Projects property athletic equipment. Under this method, these items are carried in an inventory account of the Fund hasrespective restrictedfund fundsat of $222,918,351 at August 31, 2023 consisting of unspent bond funds and cost, using the first-in, first-out method of accounting and are subsequently $10,883,663 of non-bond funds assigned for future capital replacement projects.

Deferred expenditures charged to expenditures when consumed. In the General Fund, reported inventories are offset by a (prepaid items) of $3,648,220 are considered nonspendable fund balance. as current expendable financial resources. fund balance reserve indicating that they are unavailable

Other Funds Inventories of food commodities are recorded at market values supplied by the Texas Department of

Human Services. Although commodities are received at no cost, their fair value is supplied by the In the Food Service Fund, theofFood Service Fund fund $1,925,195 as restricted for food Texas Department Human Services and balance initiallyofrecorded as is anshown expense.

Inventory and service operations. balance of $2,437,543 of thetoCampus Activity Fund (a special revenue fund) is expendituresThe arefund adjusted periodically subsequent inventory counts. shown as committed due to Board policy restricting those funds to campus activities. The fund balances of the HealthAND andPAYABLES Prosper Education Foundation funds (special revenue funds) consist of funds H. Children’s RECEIVABLE donated for specific purposes that are restricted to those purposes.

All trade and property tax receivables are shown at face value. The property tax receivable NOTE 3. DEPOSITS INVESTMENTS allowance AND is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

The District’s funds are required to be deposited and invested under the terms of a depository contract. The depository bank deposits for safekeeping trust with the District’s agent bank approved pledged securities I. INTERFUND RECEIVABLES ANDand PAYABLES in an amount sufficient to protect District funds on a day-to-day basis during the period of the contract. The pledge ofShort-term approved securities is waived only funds to the are extent of the depository bank’s dollar amount ofInterfund Federal amounts owed between classified as “Due to/from other funds”.

Deposit Insurance Corporation (“FDIC”) insurance. loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type 1.

Cash Deposits: activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

At August 31, 2023, the carrying amount of the District’s deposits in cash, checking accounts, certificates of deposit and interest-bearing savings accounts was $75,639,673 and the bank balance J. CAPITAL ASSETS was $81,438,962. The District’s cash deposits at August 31, 2023 and at all times during the year Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 83

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 then ended were entirely covered by FDIC insurance or by pledged collateral or letters of credit held by the District’s agent bank in the District’s name.

Depository information required to be reported to the Texas Education Agency is as follows: a. Depository: Farmers Bank & Trust, Prosper, Texas E. ENCUMBRANCE b. The highest ACCOUNTING combined balance of cash, savings, and time deposit accounts amounted to $31,301,348, and occurred during the month of August, 2023.

The District employs encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase An combined encumbrance represents c. The amount of letters of credit pledged orders as of theand datecontracts. of the highest balance on deposita commitment of Board appropriation related to unperformed contracts for goods and services. The was $38,000,000. issuance of a purchase order or the signing of a contract creates an encumbrance but does not Appropriations represent an expenditure for the period, onlyofathe commitment to expend resources. of FDIC coverage at the time highest combined balance was $273,793. d. Total amount lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

F. 2.

PREPAID ITEMS Investments:

Prepaid balances for payments made by the District in the current fiscal year to provide services The Public Fundsare Investment Act (Government Code Chapter 2256) contains specific provisions in occurring in investment the subsequent fiscal management year, and thereports amount prepayments has been recognized as the areas of practices, andof establishment of appropriate policies. nonspendable fund balance to the signify thattoaadopt, portion of fund balance is notanavailable forpolicy. other Among other things, it requires District implement, and publicize investment subsequent That policyexpenditures. must address the following areas: (1) safety of principal and liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5) expected rates of return, G. INVENTORIES (6) maximum allowable stated maturity of portfolio investments, (7) maximum average dollar-weighted maturity allowed based on the stated maturity date for the portfolio, (8) investment The method is used to account for inventories of food products, school supplies and staff consumption quality and capabilities, (9) and bid solicitation preferences for certificates of deposit.

Statutes athletic equipment. this method, these items are carried in certain an inventory accountand of the of the U.S. Treasury, U.S. agencies, authorize the District Under to invest in (1) obligations respective fund (2) at cost, using theof first-in, method of accounting and(4)aremoney subsequently State of Texas; certificates deposit,first-out (3) certain municipal securities, market charged expenditures when consumed.

In the (6) General Fund,acceptances, reported inventories are Funds, offset by(8)a savings to accounts, (5) repurchase agreements, bankers (7) Mutual as current expendable resources. fund balancepools, reserve thatinvestment they are unavailable Investment (9)indicating guaranteed contracts, (10) and common trustfinancial funds. The Act also requires the District to have independent auditors perform test procedures related to investment Inventories food commodities recorded values supplied by the Department of The Districtatismarket in substantial compliance withTexas the requirements practices as of provided by the Act. are Human Services.

Although commodities are received at no cost, their fair value is supplied by the the Act and with local policies.

Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures arewith adjusted subsequent to inventory In compliance the periodically Public Funds Investment Act, the counts.

District has adopted a deposit and investment policy. That policy addresses the following risks: H. RECEIVABLE AND PAYABLES a. Custodial Credit Risk – Deposits: In the case of deposits, this is the risk that, in the event of a bank shown at face property receivable All trade property tax receivables failure, theand District’s deposits may not be are returned to it.

As ofvalue.

AugustThe 31, 2023, the tax District’s cash allowancetotaled is shown at variousThis rates based uponwas historical trends of property taxes $81,438,962. entire amount either secured by outstanding a letter of credit held by the balances receivablefinancial as of August 31, 2023.

District’s institution’s agent in the District’s name or covered by FDIC insurance. Thus, the District’s deposits are not exposed to custodial credit risk.

I. INTERFUND RECEIVABLES AND PAYABLES b. Custodial Credit Risk - Investments: For an investment, this is the risk that, in the event of the Short-term amounts owed between funds classified to/from otherof funds”.

Interfund failure of the counterparty, the District willarenot be able as to “Due recover the value its investments or loans are securities classified that as “Advances to/from other and are offset by a 31, fund2023, balance reserve are in the possession of anfunds” outside party.

At August the District collateral activities account. residual balances outstanding between the governmental held all ofAny its investments in four public funds investment pools (TexPool, Lone and Star,business-type Texas Term, activities in theingovernmental-wide “internal as balances” and and Texasare Fit).reported Investments external investmentfinancial pools arestatements considered as unclassified to custodial “internal credit riskadvances”. because they are not evidenced by securities that exist in physical or book entry form.

J.

CAPITAL ASSETS c.

Credit Risk - This is the risk that an issuer or other counterparty to an investment will be unable to fulfill its obligations. The rating of securities by nationally recognized rating agencies is designed to Capital which includes plant, equipment, andTexPool, infrastructure assets,and are Texas reported give an assets, indication of credit risk.property, The credit quality rating for Texas Term, Fit in at the applicable governmental or business-type activities columns in the government-wide financial

84 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 year-end was AAAm (Standard & Poor’s), and the credit quality rating for Lone Star was AAAf (Standard & Poor’s). d.

Interest Rate Risk - This is the risk that changes in interest rates will adversely affect the fair value of an investment. The District manages its exposure to declines in fair values by limiting the weighted average maturity of its investment portfolio to less than one year from the time of purchase. The weighted average maturity for the TexPool, Texas Term, Texas Fit and Lone Star E. ENCUMBRANCE ACCOUNTING investments is less than 60 days. e. f.

The District employs accounting, whereby for goods or value purchased that exchange rates encumbrances will adversely affect the fair of an Foreign Currency Risk encumbrance - This is the risk services areAtdocumented by purchase orders andexposed contracts.

An currency encumbrance investment.

August 31, 2023, the District was not to foreign risk. represents a commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a of purchase the issigning contract creates an encumbrance does not Concentration Credit order Risk -orThis the riskofofaloss attributed to the magnitude of but the District’s Appropriations represent an expenditure for the period, only a commitment to expend resources. investment in a single issuer (i.e., lack of diversification). Concentration risk is defined as positions lapse at August 31 and encumbrances at thatInvestment time are either or appropriately of 5 percent or more in the securities ofoutstanding a single issuer. poolscanceled are excluded from the 5 provided for in therequirement. subsequent year’s budget. percent disclosure

F. PREPAID ITEMS Public funds investment pools in Texas (“Pools”) are established under the authority of the Interiocal Prepaid forthe payments made by theCode, District thesubject currenttofiscal year to provide Cooperation Act,balances Chapter are 79 of Texas Government andinare the provisions of theservices Public occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as Funds Investment Act (the “Act”), Chapter 2256 of the Texas Government Code. In addition to other nonspendable fund balance to signify that a portion of fund balance is not available for other provisions of the Act designed to promote liquidity and safety of principal, the Act requires Pools to: 1) have expenditures. subsequent an advisory board composed of participants in the pool and other persons who do not have a business relationship with the pool and are qualified to advise the pool; 2) maintain a continuous rating of no lower G. than INVENTORIES AAA or AAA-m or an equivalent rating by at least one nationally recognized rating service; and 3) maintain the market value of its underlying investment portfolio within one half of one percent of the value of its shares.The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund atincost, using the first-in, of accounting persubsequently share of the The District’s investments Pools are reported at anfirst-out amount method determined by the fair and valueare charged to expenditures when consumed.

In the General Fund, reported inventories are offset pool’s underlying portfolio, unless the pool is 2a7-like, in which case they are reported at share value.byAa as current expendable financial resources. fund balance reserve indicating that they are unavailable 2a7-like pool is one which is not registered with the Securities and Exchange Commission (“SEC”) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with food commodities are recorded at market values supplied by the Texas Department of the SEC’sInventories Rule 2a7 ofofthe Investment Company Act of 1940.

Human Services. Although commodities are received at no cost, their fair value is supplied by the Texasinvestments Department of Human Services and initially The District’s at August 31, 2023, are shown below: recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

Carrying Fair

Carrying Fair H. RECEIVABLE Amount Value Name NameAND PAYABLES Amount Value TexPool $ 75,163,586 $ TexPool 75,163,586 are shown$ at75,163,586 face value. The property tax receivable All trade and property tax$ receivables 75,163,586 Lone 268,631,743 268,631,743 allowance rates based upon historical trends of outstanding property taxes LoneStar Star is shown at various 268,631,743 268,631,743 Texas Fit 28,555,554 28,555,554 receivable Texas Fit as of August 31, 2023.

28,555,554 28,555,554 Texas 11,434,200 11,434,200 TexasTerm Term 11,434,200 11,434,200 US Bill 975,685 I. INTERFUND RECEIVABLES AND975,685 PAYABLES USTreasury Treasury Bill 975,685 975,685 Total $384,760,768 $384,760,768 Short-term funds”. Interfund Total amounts owed between funds are classified as “Due to/from other$384,760,768 loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve $384,760,768 account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and Fair Value Measurements “internal advances”.

The District categorizes its fair value measurements with the fair value hierarchy established by generally J. CAPITAL ASSETS accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are Capital which includes property, equipment,unobservable and infrastructure are reported in significant other assets, observable inputs; Level 3 inputsplant, are significant inputs.assets, Investments that are the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 85

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The District’s assessment of the significance of particular inputs to these fair value BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS measurements requires judgement and considers factors specific to each asset or liability.

PROSPER INDEPENDENT DISTRICT The District’s investment in Texpool, Texas Term, TexasSCHOOL Fit and Lone Star (statewide 2a7-like external INDEPENDENT SCHOOL DISTRICT TOtoTHE BASICat FINANCIAL investment pools) areNOTES notPROSPER required be measured fair value but areSTATEMENTS measured at amortized cost.

NOTES THE BASIC FINANCIAL STATEMENTS FORTO THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023

measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not classified in the fair value hierarchy below.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The District’s assessment of the significance of particular inputs to these fair value measurements requires judgement and considers factors specific to each asset or liability.

E. ENCUMBRANCE ACCOUNTING in Texpool, Texas Term, TexasSCHOOL Fit and Lone Star (statewide 2a7-like external The District’s investment PROSPER INDEPENDENT DISTRICT The District employs encumbrance accounting, whereby encumbrances for goods or purchased investment pools) are not required to be measured at fair value but are measured at amortized cost.

NOTES TO THE BASICorders FINANCIAL STATEMENTS NOTE 4. CAPITAL ASSETS services are documented by purchase and contracts.

An encumbrance represents a FOR appropriation THE YEARrelated ENDED AUGUSTcontracts 31, 2023 commitment of Board to unperformed for goods and services. The Capital asset activity the year ended 2023,ofwas as follows: issuance of for a purchase order August or the 31, signing a contract creates an encumbrance but does not represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

F.

PREPAID ITEMS

Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund balance to signify that a portion of fund balance is not available for other subsequent expenditures.

NOTE 4. CAPITAL ASSETS G. INVENTORIES Capital asset activity for the year ended August 31, 2023, was as follows: The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balance reserve indicating that they are unavailable as current expendable financial resources.

Inventories of food commodities are recorded at market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

H. RECEIVABLE AND PAYABLES All trade and property tax receivables are shown at face value. The property tax receivable allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

Construction in progress includes the following primary construction contracts in progress as of August 31, 2023: I. INTERFUND RECEIVABLES AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

86 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 Construction in progress includes the following primary construction contracts in progress as of August 31, 2023:

E. ENCUMBRANCE ACCOUNTING The District employs encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase order or the signing of a contract creates an encumbrance but does not represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

F.

PREPAID ITEMS Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund balance to signify that a portion of fund balance is not available for other subsequent expenditures.

G. INVENTORIES Depreciation expense was charged as direct expense to programs of the District as follows: Governmental activities: The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a Instruction $26,493,062 as current expendable financial resources. fund balance reserve indicating that they are unavailable Instructional Resources & Media Services 489,565 Curriculum & Instructional Staff Development 1,044,019 Inventories of food commodities the Texas Department of Instructional Leadership are recorded at market values supplied by 210,854 Human Services.

Although commodities are received at no cost, their fair value is supplied by the School Leadership 2,193,053 Texas Department of Human Services and initially recorded as an expense. Inventory and Guidance, Counseling & Evaluation Services 1,533,495 expenditures are adjusted periodically subsequent to inventory counts.

Health Services 405,787 Student (Pupil) Transportation 1,431,248 H. RECEIVABLE AND PAYABLES Cocurricular/Extracurricular Activities 1,011,569 General Administration 1,093,371 All trade and property tax receivables are shown at face value. The property tax receivable Maintenance and Operations 607,258 allowancePlant is shown at various rates based upon historical trends of outstanding property taxes Security and Monitoring Services 490,600 receivable as of August 31, 2023.

Data Processing Services 738,233 Total depreciation expense-Governmental $37,742,114 I. INTERFUND RECEIVABLES AND PAYABLES activities Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 87

Guidance, Counseling & Evaluation Services 1,533,495 Health Services 405,787 | NOTES TOTransportation THE BASIC FINANCIAL STATEMENTS BASIC FINANCIAL STATEMENTS Student (Pupil) 1,431,248 Cocurricular/Extracurricular Activities 1,011,569 General Administration 1,093,371 SCHOOL PlantPROSPER Maintenance INDEPENDENT and Operations 607,258 DISTRICT ServicesFINANCIAL 490,600 Security and TO Monitoring NOTES THE BASIC STATEMENTS Data Processing Services 738,233 FOR THE YEAR ENDED AUGUST 31, 2023 Total depreciation expense-Governmental activities$37,742,114 NOTE 5. LONG-TERM DEBT Long-term debt includes par bonds, capital appreciation (deep discount) serial bonds, and capital leases payable. All long-term debt represents transactions in the District’s governmental activities.

The District has entered into a continuing disclosure undertaking to provide Annual Reports and Material Event Notices to the State Information Depository of Texas (SID), which is the Municipal Advisory Council.

E. ACCOUNTING ThisENCUMBRANCE information is required under SEC Rule 15c2-12 to enable investors to analyze the financial condition and operations of the District.

The District employs encumbrance accounting, whereby encumbrances for goods or purchased The following is aare summary of the changes in the orders District's forencumbrance the year endedrepresents August 31,a services documented by purchase andLong-term contracts.DebtAn 2023: commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase order or the signing of a contract creates an encumbrance but does not represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

F.

PREPAID ITEMS Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund balance to signify that a portion of fund balance is not available for other subsequent expenditures.

G. INVENTORIES The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balance reserve indicating that they are unavailable as current expendable financial resources.

Inventories of food commodities are recorded at market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

H. RECEIVABLE AND PAYABLES All trade and property tax receivables are shown at face value. The property tax receivable allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

I.

INTERFUND RECEIVABLES AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

88 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 The 2002 bond series include outstanding capital appreciation bonds in the principal amount of $150,239.

The bonds mature variously beginning in 2024 through 2028. Interest accrues on these bonds each February 15 and August 15, even though the interest is not paid until maturity.

General Obligation Bonds are direct obligations issued on a pledge of the general taxing power for the payment of the debt obligations of the District. General Obligation Bonds require the District to compute, at the time taxes are levied, the rate of tax required to provide (in each year bonds are outstanding) a fund to pay E. ENCUMBRANCE ACCOUNTING interest and principal at maturity.

The District is in compliance with this requirement.

Thea District encumbrance accounting, whereby for goods or purchased There are number employs of limitations and restrictions contained in encumbrances the various general obligation bonds services are documented by purchase orders and contracts.

An encumbrance indentures.

The District is in compliance with all significant limitations and restrictions at Augustrepresents 31, 2023. a commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase order or the- BONDS signing of a contract creates an encumbrance but does not NOTE 6. DEBT SERVICE REQUIREMENTS represent an expenditure for the period, only a commitment to expend resources. Appropriations lapserequirements at August 31 and encumbrances outstanding at that time are either canceled or appropriately Debt service to maturity are as follows: provided for in the subsequent year’s budget.

Year Total YearEnded Ended Total August 31 Principal Interest Requirements F. PREPAID AugustITEMS 31 Principal Interest Requirements 2024 $ 31,252,272 $ 64,692,602 $ 95,944,874 2024 $ 31,252,272 $ 64,692,602 $ 95,944,874 2025 31,096,541 63,246,498 94,343,039 Prepaid balances are for payments made by the District in the current fiscal year to provide services 2025 31,096,541 63,246,498 94,343,039 2026 31,366,690 62,338,734 93,705,424 occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as 2026 31,366,690 62,338,734 93,705,424 2027 32,787,520 60,916,558 93,704,078 nonspendable fund balance to signify that a portion of fund balance is not available for other 2027 32,787,520 60,916,558 93,704,078 2028 33,172,216 60,530,732 93,702,948 expenditures. subsequent 2028 33,172,216 60,530,732 93,702,948 2029-2033 203,500,000 265,030,478 468,530,478 2029-2033 203,500,000 265,030,478 468,530,478 2034-2038 247,640,000 220,888,030 468,528,030 G. INVENTORIES 2034-2038 247,640,000 220,888,030 468,528,030 2039-2043 303,980,000 164,541,942 468,521,942 2039-2043 303,980,000 164,541,942 468,521,942 The consumption 362,685,000 method is used to account for inventories of food 457,843,294 products, school supplies and 2044-2048 362,685,000 95,158,294 2044-2048 95,158,294 457,843,294 athletic equipment.

Under this method, these items are carried in an inventory account of the 2049-2053 308,470,000 26,937,113 26,937,113 2049-2053 308,470,000 335,407,113 335,407,113 respective fund at cost, using the first-in, first-out method of accounting and are subsequently

$1,585,950,239 $2,670,231,220 $1,084,280,981 $1,084,280,981 $2,670,231,220 $1,585,950,239 charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balance reserveOUTSTANDING indicating that they are unavailable as current expendable financial resources.

NOTE 7. DEFEASED BONDS Inventories of foodissued commodities are bonds recorded at marketcertain valuesoutstanding supplied bybonds the Texas Department of In prior years, the District refunding to defease for the purpose of Human Although commodities noplaced cost, their fair valuefrom is supplied by the consolidation andServices. to achieve debt service savings. are Thereceived Districtathas the proceeds the refunding Department Humanwith Services recorded expense. and issues in Texas irrevocable escrow of accounts a trust and agentinitially to ensure paymentasofan debt service onInventory the refunded expenditures are adjusted periodically subsequent to inventory counts. bonds.

H. RECEIVABLE PAYABLES Accordingly, the trustAND account assets and liabilities for the defeased bonds are not included in the District’s financial statements. Although defeased, the refunded debt from those earlier issues will not be actually shownifatthey facearevalue.

The property tax August receivable All the trade property tax receivables retired until calland dates have come due or untilare maturity not callable issues. On 31, allowance ofis bonds shownoutstanding at variousare rates based upon historical trends of outstanding property taxes 2023, $65,280,000 considered defeased. receivable as of August 31, 2023.

NOTE 8. LEASES I. INTERFUND RECEIVABLES AND PAYABLES For the year ended 8/31/2023, the financial statements include the adoption of GASB Statement No. 87, Short-term between funds areenhance classified “Due to/from other funds”.

Interfund is to the as relevance and consistency of information Leases. The primaryamounts objectiveowed of this statement loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve about governments' leasing activities. This statement establishes a single model for lease accounting based on activities and business-type account.

Any residual balances outstanding between the governmental the principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is are areported in the and governmental-wide financial statements “internal required activities to recognize lease liability an intangible right-to-use lease asset,asand a lessorbalances” is requiredand to recognize“internal a lease advances”. receivable and a deferred inflow of resources. For additional information, refer to the disclosures below.

J. CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 89

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS PROSPER INDEPENDENT SCHOOL DISTRICT FOR THE YEAR ENDED AUGUST 31, 2023 NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 On 09/01/2021, the District entered into a 120 month lease as Lessee for the use of Zayo Group 1. An initial lease liability was recorded in the amount of $438,682. As of 08/31/2023, the value of the lease liability is $362,282. The District is required to make monthly fixed payments of $4,241. The lease has an interest rate of 3.1827%. The Infrastructure estimated useful life was 0 months as of the contract commencement. The value of the right to use asset as of 08/31/2023 of $438,6812 with accumulated amortization of $87,014 is included with Infrastructure on the Lease Class activities table found below.

E. ENCUMBRANCE ACCOUNTING On 09/01/2021, the District entered into a 120 month lease as Lessee for the use of Zayo Group 4. An initial lease liability was recorded in the amount of $116,173. As of 08/31/2023, the value of the lease liability is accounting, wherebyofencumbrances for has goods or purchased $95,744. The The District isemploys requiredencumbrance to make monthly fixed payments $1,131. The lease an interest rate of are documented byuseful purchase orders and contracts.

An encumbrance represents 3.1827%.services The Infrastructure estimated life was 0 months as of the contract commencement.

The valuea commitment of asBoard appropriation related towith unperformed contracts for goods and services.

The of 08/31/2023 of $116,173 accumulated amortization of $23,203 is included of the right to use asset issuance of a purchase order or the signing of a contract creates an encumbrance but does not with Infrastructure on the Lease Class activities table found below. represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse atthe August 31 entered and encumbrances outstanding at Lessee that time or appropriately On 09/01/2021, District into a 120 month lease as forare theeither use ofcanceled Zayo Group 6. An initial provided in the subsequent year’sofbudget. lease liability wasfor recorded in the amount $38,724. As of 08/31/2023, the value of the lease liability is $31,915. The District is required to make monthly fixed payments of $377. The lease has an interest rate of F. PREPAID ITEMS The Infrastructure estimated useful life was 0 months as of the contract commencement. The value 3.1827%. of the right to use asset as of 08/31/2023 of $38,724 with accumulated amortization of $7,734 is included Prepaid balances are forClass payments made by found the District with Infrastructure on the Lease activities table below.in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund entered balanceinto to asignify that lease a portion of fund balance not available for initial other On 08/17/2022, the District 60 month as Lessee for the use ofisZayo Group 7. An expenditures. subsequent lease liability was recorded in the amount of $21,061. As of 08/31/2023, the value of the lease liability is $16,967. The District is required to make monthly fixed payments of $377. The lease has an interest rate of G. INVENTORIES 2.1860%.

The Infrastructure estimated useful life was 0 months as of the contract commencement. The value of the right to use asset as of 08/31/2023 of $21,061 with accumulated amortization of $4,365 is included The consumption method is activities used to account for inventories of food products, school supplies and with Infrastructure on the Lease Class table found below. athletic equipment. Under this method, these items are carried in an inventory account of the respective at entered cost, using first-in, of the accounting andGroup are subsequently use of Zayo 9. An initial On 06/13/2023, the fund District into the a 120 monthfirst-out lease as method Lessee for charged to expenditures when consumed.

In the General Fund, reported inventories are offset by isa lease liability was recorded in the amount of $80,138. As of 08/31/2023, the value of the lease liability as of current resources. indicating that they arefixed unavailable $78,996. fund The balance District reserve is required to make monthly payments $754.expendable The lease financial has an interest rate of 2.2900%. The Infrastructure estimated useful life was 0 months as of the contract commencement. The value Inventories of food commodities market values supplied by theof Texas Department of of the right to use asset as of 08/31/2023are of recorded $80,138 at with accumulated amortization $1,715 is included Human Services.

Although received at no cost, their fair value is supplied by the on the Lease Class commodities activities tablearefound below. with Infrastructure Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted subsequent counts.

On 07/01/2023, the District enteredperiodically into a 24 month lease to asinventory Lessee for the use of Canon Copiers. An initial lease liability was recorded in the amount of $222,171. As of 08/31/2023, the value of the lease liability is H. RECEIVABLE AND PAYABLES $212,676.

The District is required to make monthly fixed payments of $9,841. The lease has an interest rate of 1.8680%. The Equipment estimated useful life was 0 months as of the contract commencement. The value are with shown at face value.

The property tax isreceivable All totrade and as property tax receivables of the right use asset of 08/31/2023 of $222,171 accumulated amortization of $18,216 included allowance is shown at various rates based upon historical trends of outstanding property taxes with Equipment on the Lease Class activities table found below. receivable as of August 31, 2023.

On 09/01/2021, the District entered into a 23 month lease as Lessee for the use of Synovia Equipments for I. INTERFUND PAYABLES Vehicles.

An initial RECEIVABLES lease liability wasAND recorded in the amount of $35,928. As of 08/31/2023, the value of the lease liability is $0. The District is required to make annual fixed payments of $18,000. The lease has an amounts The owedEquipment between funds are classified as “Due otherasfunds”. interest Short-term rate of 0.1980%. estimated useful life was to/from 0 months of the Interfund contract loans are classified other funds” andofare by a fund balance reserve commencement.

The value ofas the“Advances right to useto/from asset as of 08/31/2023 $0 offset with accumulated amortization of account. residualonbalances outstanding between governmental $0 is included withAny Equipment the Lease Class activities tablethefound below. activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internalthe advances”.

On 07/01/2022, District entered into a 61 month lease as Lessee for the use of District Copy Machines.

An initial lease liability was recorded in the amount of $1,345,677. As of 08/31/2023, the value of the lease J. CAPITAL ASSETS liability is $1,071,984.

The District is required to make monthly fixed payments of $24,289. The lease has an interest rate of 3.1827%. The Equipment estimated useful life was 0 months as of the contract Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 90 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 commencement. The value of the right to use asset as of 08/31/2023 of $1,345,677 with accumulated amortization of $308,132 is included with Equipment on the Lease Class activities table found below.

On 06/18/2022, the District entered into a 60 month lease as Lessee for the use of Prosper Town Center Office. An initial lease liability was recorded in the amount of $298,721. As of 08/31/2023, the value of the lease liability is $229,953. The District is required to make monthly fixed payments of $5,317. The lease has an interest rate of 3.1827%. The Buildings estimated useful life was 0 months as of the contract E. ENCUMBRANCE ACCOUNTING commencement.

The value of the right to use asset as of 08/31/2023 of $298,721 with accumulated amortization of $71,184 is included with Buildings on the Lease Class activities table found below.

The District employs encumbrance accounting, whereby encumbrances for goods or purchased servicestheare documented by apurchase contracts.

Anof encumbrance represents On 07/01/2023, District entered into 60 monthorders lease asand Lessee for the use Quadient Postage Machine.a commitment of Board appropriation related to unperformed contracts for goods and services.

The An initial lease liability was recorded in the amount of $37,452. As of 08/31/2023, the value of the lease issuance of a purchase order or the signing of a contract creates an encumbrance but does an liability is $36,242. The District is required to make monthly fixed payments of $666. The lease has not an expenditure the period, only a commitment to expend resources. interest represent rate of 2.6560%.

The for Equipment estimated useful life was 0 months as ofAppropriations the contract lapse at August 31 and outstanding time are either canceled or appropriately commencement.

The value of encumbrances the right to use asset as atofthat 08/31/2023 of $37,452 with accumulated provided for inisthe subsequent budget. amortization of $1,228 included with year’s Equipment on the Lease Class activities table found below.

F. PREPAID ITEMS On 09/01/2021, the District entered into a 120 month lease as Lessee for the use of Zayo Group 2. An initial lease liability was recorded in the amount of $122,547. As of 08/31/2023, the value of the lease liability is balances are for payments made byfixed the District in the year to services $101,205.Prepaid The District is required to make monthly payments of current $1,185.fiscal The lease hasprovide an interest rate occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as of 3.1827%. The Infrastructure estimated useful life was 0 months as of the contract commencement. The nonspendable fund balance to signify that a portion of fund balance is not available for other value of the right to use asset as of 08/31/2023 of $122,547 with accumulated amortization of $24,288 is expenditures. included subsequent with Infrastructure on the Lease Class activities table found below.

G. 09/01/2021, INVENTORIES On the District entered into a 120 month lease as Lessee for the use of Zayo Group 3. An initial lease liability was recorded in the amount of $41,380. As of 08/31/2023, the value of the lease liability is methodto ismake usedmonthly to account forpayments inventories of foodThe products, school supplies $34,174. The The consumption District is required fixed of $400. lease has an interest rateand of athletic equipment.

Under this method, these items are carried in an inventory account the 3.1827%. The Infrastructure estimated useful life was 0 months as of the contract commencement. Theof value respective fund as at of cost, using theoffirst-in, method of amortization accounting and are subsequently $41,380first-out with accumulated of $8,199 is included of the right to use asset 08/31/2023 charged to expenditures when consumed.

In the General Fund, reported inventories are offset by a with Infrastructure on the Lease Class activities table found below. fund balance reserve indicating that they are unavailable as current expendable financial resources.

On 09/01/2021, the District entered into a 120 month lease as Lessee for the use of Zayo Group 5. An initial Inventories of food commodities market values supplied by the Department lease liability was recorded in the amountareofrecorded $58,497.atAs of 08/31/2023, the value ofTexas the lease liability of is Services.

Although commodities received at no value by the $48,309. Human The District is required to make monthly are fixed payments of cost, $566.their Thefair lease has is ansupplied interest rate of Department estimated of Humanuseful Services and0 months initiallyasrecorded as an commencement. expense. Inventory and life was of the contract The value 3.1827%.Texas The Infrastructure expenditures are adjusted periodically subsequent to inventory counts. of the right to use asset as of 08/31/2023 of $58,497 with accumulated amortization of $11,594 is included with Infrastructure on the Lease Class activities table found below.

H. RECEIVABLE AND PAYABLES On 05/11/2023, the District entered into a 120 month lease as Lessee for the use of Zayo Group 8. An initial are shown face value. tax receivable All trade and property receivables lease liability was recorded in thetax amount of $40,064.

As of at 08/31/2023, the The valueproperty of the lease liability is is isshown at various based upon historical trendsThe of outstanding taxes $39,196. allowance The District required to makerates monthly fixed payments of $377. lease has an property interest rate of as of August 31, 2023.

2.2900%.receivable The Infrastructure estimated useful life was 0 months as of the contract commencement. The value of the right to use asset as of 08/31/2023 of $40,064 with accumulated amortization of $1,213 is included I. RECEIVABLES PAYABLES withINTERFUND Infrastructure on the Lease Class AND activities table found below.

Short-term amountsentered owed into between classified as for “Due otherGroup funds”.

Interfund 10. An initial On 03/31/2023, the District a 120funds monthare lease as Lessee theto/from use of Zayo loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve lease liability was recorded in the amount of $39,674. As of 08/31/2023, the value of the lease liability is business-type Anyisresidual between the governmental $38,210. account.

The District requiredbalances to makeoutstanding monthly fixed payments of $377. The activities lease has and an interest rate of are reported in the useful governmental-wide financial statements “internal balances” and 2.6731%.activities The Infrastructure estimated life was 0 months as of the contract as commencement.

The value “internal of the right to useadvances”. asset as of 08/31/2023 of $39,674 with accumulated amortization of $1,653 is included with Infrastructure on the Lease Class activities table found below.

J. CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 91

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023

E. ENCUMBRANCE ACCOUNTING The District employs encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase order or the signing of a contract creates an encumbrance but does not represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

F.

PREPAID ITEMS Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund balance to signify that a portion of fund balance is not available for other subsequent expenditures.

G. INVENTORIES The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balance reserve indicating that they are unavailable as current expendable financial resources.

Inventories of food commodities are recorded at market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

H. RECEIVABLE AND PAYABLES All trade and property tax receivables are shown at face value. The property tax receivable allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

I.

INTERFUND RECEIVABLES AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

92 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS PROSPER FOR THEINDEPENDENT YEAR ENDED SCHOOL AUGUST DISTRICT 31, 2023 NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023

E. ENCUMBRANCE ACCOUNTING The District employs encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase order or the signing of a contract creates an encumbrance but does not represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

F.

PREPAID ITEMS Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund balance to signify that a portion of fund balance is not available for other subsequent expenditures.

G. INVENTORIES The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balance reserve indicating that they are unavailable as current expendable financial resources.

Inventories of food commodities are recorded at market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

H. RECEIVABLE AND PAYABLES All trade and property tax receivables are shown at face value. The property tax receivable allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

I.

INTERFUND RECEIVABLES AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 93

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS PROSPER INDEPENDENT SCHOOL DISTRICT FOR THE YEAR ENDED AUGUST 31, 2023 NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023

NOTE 9. SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS Subscriptions Payable For the year ended 8/31/2023, the financial statements include the adoption of GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The primary objective of this statement is to enhance the relevance and consistency of information about governments' subscription activities. This statement establishes a single model for subscription accounting based on the principle that subscriptions are E. ENCUMBRANCE ACCOUNTING use an underlying asset. Under this Statement, an organization is required to financings of the right to recognize a subscription liability and an intangible right-to-use subscription asset. For additional information, The District employs refer to the disclosures below. encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related subscription to unperformed contracts goods On 03/14/2022, the District entered into a 48 month for the use of for Texas Go and Mathservices.

Package.The An issuance of a purchase order or the signing of a contract creates an encumbrance but does initial subscription liability was recorded in the amount of $119,606. As of 08/31/2023, the value of not the represent an expenditure the period, only atocommitment expend resources.

District is required make annualto fixed payments of Appropriations $120,960. The subscription liability is $0. The for lapsehasat an August 31rate andof encumbrances at right that time either canceled or appropriately subscription interest 2.1120%. Theoutstanding value of the to useare asset as of 08/31/2023 is $119,606 provided for in the subsequent year’s budget. with accumulated amortization of $44,852.

F. PREPAID ITEMS On 09/01/2022, the District entered into a 13 month subscription for the use of Seesaw for Schools. An initial subscription liability was recorded in the amount of $46,962. As of 08/31/2023, the value of the subscription Prepaid balances payments madeannual by thefixed District in the current fiscal The yearsubscription to provide services required to make payments of $46,962. has an liability is $0. The Districtareis for occurring in the subsequent fiscal year, and the amount of prepayments has been as interest rate of 1.5803%. The value of the right to use asset as of 08/31/2023 is $46,962 withrecognized accumulated nonspendable fund balance to signify that a portion of fund balance is not available for other amortization of $43,350. subsequent expenditures.

On 02/10/2022, the District entered into a 24 month subscription for the use of Texas ScienceFusion Package.

G. INVENTORIES An initial subscription liability was recorded in the amount of $68,164. As of 08/31/2023, the value of the subscription liability is $0. The District is required to make annual fixed payments of $68,640. The The has consumption is used toThe account products, school supplies and subscription an interest method rate of 1.5803%. valuefor of inventories the right to of usefood asset as of 08/31/2023 is $68,164 athletic equipment.

Under this method, these items are carried in an inventory account of the with accumulated amortization of $53,963. respective fund at cost, using the first-in, first-out method of accounting and are subsequently chargedthe to expenditures when the Generalfor Fund, inventories are Protection. offset by a On 10/12/2022, District entered intoconsumed. a 41 monthInsubscription the reported use of Fortinet - Threat as current expendable financial resources. fund balance reserve indicating that they are unavailable An initial subscription liability was recorded in the amount of $3,936. As of 08/31/2023, the value of the subscription liability is $0. The District is required to make annual fixed payments of $3,936. The Inventories of food rate commodities are The recorded values supplied Texas Department of subscription has an interest of 3.1213%. valueatofmarket the right to use asset by as the of 08/31/2023 is $3,936 Human Services.

Although commodities are received at no cost, their fair value is supplied by the with accumulated amortization of $1,021.

Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

On 10/25/2021, the District entered into a 37 month subscription for the use of SkillSets Online. An initial

subscription liability was recorded in the amount of $8,856. As of 08/31/2023, the value of the subscription H. RECEIVABLE AND PAYABLES liability is $0. The District is required to make annual fixed payments of $8,883. The subscription has an interest rate of 2.0377%. The value of the right to use asset as of 08/31/2023 is $8,856 with accumulated All of trade and property tax receivables are shown at face value. The property tax receivable amortization $5,505. allowance is shown at various rates based upon historical trends of outstanding property taxes receivable of August 31, 2023.

On 07/14/2023, the as District entered into a 36 month subscription for the use of Google Workspace Edu. An

initial subscription liability was recorded in the amount of $314,839. As of 08/31/2023, the value of the I. INTERFUND PAYABLES subscription liabilityRECEIVABLES is $207,815. TheAND District is required to make annual fixed payments of $107,950. The subscription has an interest rate of 2.5827%. The value of the right to use asset as of 08/31/2023 is $314,839 Short-termamortization amounts owed between funds are classified as “Due to/from with accumulated of $13,701.

The District had a termination periodother of 2funds”. months Interfund as of the loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve subscription commencement. account. Any residual balances outstanding between the governmental activities and business-type activities areDistrict reported in theinto governmental-wide financial statements balances” and On 04/23/2020, the entered a 96 month subscription for the useasof“internal Into Literature Digital “internal advances”.

Package. An initial subscription liability was recorded in the amount of $668,932. As of 08/31/2023, the

value of the subscription liability is $0. The District is required to make annual fixed payments of $678,940.

J. The CAPITAL subscriptionASSETS has an interest rate of 2.3217%. The value of the right to use asset as of 08/31/2023 is $668,932 with accumulated amortization of $285,689.

Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 94 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS PROSPER FOR THEINDEPENDENT YEAR ENDED SCHOOL AUGUST DISTRICT 31, 2023 NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023

On 05/24/2023, the District entered into a 60 month subscription for the use of Literature Digital Learning Package. An initial subscription liability was recorded in the amount of $73,278. As of 08/31/2023, the value of the subscription liability is $0. The District is required to make annual fixed payments of $73,278. The subscription has an interest rate of 2.2300%. The value of the right to use asset as of 08/31/2023 is $73,278 with accumulated amortization of $3,949.

On 03/08/2023, the District entered into a 24 month subscription for the use of Destiny Cloud Subscription.

E. initial ENCUMBRANCE ACCOUNTING An subscription liability was recorded in the amount of $74,506. As of 08/31/2023, the value of the subscription liability is $28,803. The District is required to make annual fixed payments of $45,702. The The has District employs accounting, encumbrances for08/31/2023 goods or is purchased subscription an interest rate encumbrance of 2.6470%. The value of whereby the right to use asset as of $74,506 services amortization are documented by purchase orders and contracts. An encumbrance represents a with accumulated of $17,902. commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of District a purchase order signingsubscription of a contract encumbrance but Software does not On 09/01/2022, the entered intoora the 84 month for creates the use an of Skyward Qmlativ Appropriations expenditure for the only to expendAs resources.

An initial an subscription liability wasperiod, recorded in athecommitment amount of $761,195. of 08/31/2023, the value License. represent lapse at August 31isand encumbrances outstanding at that eitherfixed canceled or appropriately of the subscription liability $671,199.

The District is required to time makeare annual payments of $89,996. provided has for in subsequent budget.

The subscription anthe interest rate ofyear’s 2.4473%.

The value of the right to use asset as of 08/31/2023 is $1,352,518 with accumulated amortization of $191,771. The District had a termination period of 4 months as F. PREPAID ITEMS of the subscription commencement.

Prepaidthe balances for payments bysubscription the District in year to provide services Districtareentered into a 15made month forthe thecurrent use of fiscal Gale In Context Subscription.

On 03/16/2023, occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as An initial subscription liability was recorded in the amount of $49,500. As of 08/31/2023, the value of the nonspendable to signify that a to portion fund balance is not available for other subscription liability isfund $0. balance The District is required makeofannual fixed payments of $49,500.

The expenditures. subsequent subscription has an interest rate of 2.8443%. The value of the right to use asset as of 08/31/2023 is $49,500 with accumulated amortization of $18,150.

G. INVENTORIES On 4/22/2020, the District entered into a 60 month subscription for the use of HMD Go Math Package. An The consumption is used in to account for inventories food school initial subscription liabilitymethod was recorded the amount of $26,474.ofAs of products, 08/31/2023, the supplies value of and the athletic equipment.

Under this method, these items are carried in an inventory account the subscription liability is $0. The District is required to make annual fixed payments of $26,820.of The respective fund at rate cost,ofusing the first-in, first-out of accounting and are subsequently subscription has an interest 2.0377%.

The value of the method right to use asset as of 08/31/2023 os $26,474 charged to expenditures consumed. In the General Fund, reported inventories are offset by a with accumulated amortization of when $18,091. fund balance reserve indicating that they are unavailable as current expendable financial resources.

On 08/01/2021, the District entered into a 36 month subscription for the use of Mind Missions Digital of food commodities arerecorded recordedinat the market values supplied As by the Texas Department of License. Inventories An initial subscription liability was amount of $12,385. of 08/31/2023, the value Human Services. commodities are received at noannual cost, their value isofsupplied byThe the of the subscription liabilityAlthough is $0. The District is required to make fixedfair payments $12,600.

Texas of of Human Services and of initially recorded as anasexpense.

Inventory and subscription hasDepartment an interest rate 1.8937%.

The value the right to use asset of 08/31/2023 is $12,385 expenditures are adjusted periodically subsequent to inventory counts. with accumulated amortization of $8,601.

H. RECEIVABLE AND PAYABLES All trade and property tax receivables are shown at face value. The property tax receivable allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

I.

INTERFUND RECEIVABLES AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 95

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023

E. ENCUMBRANCE ACCOUNTING The District employs encumbrance accounting, whereby encumbrances for goods or purchased services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a purchase order or the signing of a contract creates an encumbrance but does not represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

F.

PREPAID ITEMS Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund balance to signify that a portion of fund balance is not available for other subsequent expenditures.

G. INVENTORIES The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balance reserve indicating that they are unavailable as current expendable financial resources.

Inventories of food commodities are recorded at market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

H. RECEIVABLE AND PAYABLES All trade and property tax receivables are shown at face value. The property tax receivable allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

I.

INTERFUND RECEIVABLES AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

96 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS PROSPER INDEPENDENT SCHOOL DISTRICT FOR THE YEAR ENDED AUGUST 31, 2023 NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 NOTE 10. DEFERRED CHARGE ON BOND REFUNDINGS The District’s deferred charge on bond refundings is as follows: Balance – August 31, 2022

$24,679,983

Current year amortization (1,348,978) E. ENCUMBRANCE ACCOUNTING Balance – August 31, 2023 $23,331,005 The District employs encumbrance accounting, whereby encumbrances for goods or purchased services areTAXES documented by purchase orders and contracts. An encumbrance represents a NOTE 11. PROPERTY commitment of Board appropriation related to unperformed contracts for goods and services. The issuance of a in purchase order or the signing of Property a contract an encumbrance does not The Texas Legislature 1979 adopted a comprehensive Taxcreates Code which establishedbut an appraisal Appropriations represent an expenditure for the period, only a commitment to expend resources. district and an appraisal review board in each county in the State of Texas. Denton Central Appraisal District lapse at August 31 and encumbrances outstanding that timeofare either canceled or appropriately for theatappraisal property for all taxing units in the and Collin Central Appraisal District are responsible for interms the subsequent year’sfor budget.

District. provided Under the of a contract appraisal services, the District paid the appraisal districts $1,477,157 in fiscal year 2023 for appraising property.

F. PREPAID ITEMS Property taxes are considered available when collected within the current period or expected to be collected Prepaid balances made by of thethe District in the currentThe fiscal year to provide services soon enough thereafter to are be for usedpayments to pay liabilities current period.

District levies its taxes on occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as October 1 on the assessed (appraised) value listed as of the prior January 1 for all real and business personal nonspendable fund balance to signify that a portion of fund balance is not available for other property located in the District in conformity with Subtitle E, Texas Property Tax Code. Taxes are due upon receipt ofsubsequent the tax billexpenditures. and are past due and subject to interest if not paid by February 1 of the year following the October 1 levy date. The assessed value of the property tax roll upon which the levy for the 2022-23 G. fiscalINVENTORIES year was based was $16,334,798,392. Taxes are delinquent if not paid by June 30. Delinquent taxes are subject to both penalty and interest charges plus 15 % delinquent collection fees for attorney costs.

The consumption method is used to account for inventories of food products, school supplies and equipment. method, items toarefinance carriedGeneral in an inventory accountand of the the The tax athletic rates assessed for theUnder year this ended Augustthese 31, 2023, Fund operations respective fund at cost, using the first-in, first-out method of accounting and are subsequently payment of principal and interest on general obligation long-term debt were $0.9429 and $0.50 per $100 to expenditures consumed.

In the General Fund, reported inventories are offset by a valuation,charged respectively, for a total when of $1.4429 per $ 100 valuation. fund balance reserve indicating that they are unavailable as current expendable financial resources.

Current tax collections for the year ended August 31, 2023 were 99.77% of the year-end adjusted tax levy.

Inventories food commodities are recorded market values supplied by the Texas for Department of Delinquent taxes areofprorated between maintenance andat debt service based on rates adopted the year of Services. commodities are received at noand cost,Debt theirService fair value is supplied by the the levy.Human Allowances for Although uncollectible taxes within the General Funds are based on Department of Human and personal initially property recordedtaxes as an and historicalTexas experience in collecting taxes. Services Uncollectible are expense. periodicallyInventory reviewed and expenditures are adjusted periodically subsequent to inventory counts. written off, but the District is prohibited from writing off real property taxes without specific statutory authority from the Texas Legislature. As of August 31, 2023, property taxes receivable, net of estimated H. RECEIVABLE AND $2,066,599 PAYABLESand $1,038,734 for the General and Debt Service Funds, respectively. uncollectible taxes, totaled are inflows shown of at resources face value.

The property and property tax receivables Property All taxestrade are recorded as receivables and deferred at the time the taxestax arereceivable assessed. is shown variousadrates based upon of outstanding property taxes Revenuesallowance are recognized as theat related valorem taxes arehistorical collected.trends Additional amounts estimated to be receivable as be ofPROSPER August 31, 2023.

INDEPENDENT SCHOOL incurredDISTRICT during the fiscal year and therefore collectible in time to a resource for payment of obligations susceptible to accrualNOTES in accordance with Generally Accounting Principles have been recognized as TO THE BASIC Accepted FINANCIAL STATEMENTS I. INTERFUND RECEIVABLES AND PAYABLES revenue.

FOR THE YEAR ENDED AUGUST 31, 2023 Short-termBENEFIT amounts owed between funds are classified as “Due to/from other funds”. Interfund NOTE 12. DEFINED PENSION PLAN loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve Plan Description.

Prosper Independent School District participates in a cost-sharing activities multiple-employer and business-type account. Any residual balances outstanding between the governmental defined benefit pension that has a special funding situation.

The plan is administered the Teacher activities are reported in the governmental-wide financial statements as “internalbybalances” and Retirement System of Texas (TRS).

TRS's defined benefit pension plan is established and administered in “internal advances”. accordance with the Texas Constitution, Article XVI, Section 67 and Texas Government Code, Title 8, Subtitle C. The ASSETS pension trust fund is a qualified pension trust under Section 401(a) of the Internal Revenue J. CAPITAL Code. The Texas Legislature establishes benefits and contribution rates within the guidelines of the Texas Constitution. pension's of Trustees have the and authority to establish or are amend benefit CapitalThe assets, whichBoard includes property, does plant,not equipment, infrastructure assets, reported in terms. the applicable governmental or business-type activities columns in the government-wide financial All employees of public, state-supported educational institutions in Texas who are employed for one-half or 2023 ANNUAL COMPREHENSIVE FINANCIALCode, REPORT | 97 more of the standard work load and who are not exempted from membership under Texas Government Title 8, Section 822.002 are covered by the system.

Plan Description. Prosper Independent School District participates in a cost-sharing multiple-employer

| NOTES TO THE BASIC FINANCIAL STATEMENTS BASIC FINANCIAL definedSTATEMENTS benefit pension that has a special funding situation.

The plan is administered by the Teacher

Retirement System of Texas (TRS). TRS's defined benefit pension plan is established and administered in accordance with the Texas Constitution, Article XVI, Section 67 and Texas Government Code, Title 8, under Section 401(a) of the Internal Revenue Subtitle C. The pensionPROSPER trust fund is INDEPENDENT a qualified pension trust SCHOOL DISTRICT Code. The Texas Legislature benefits and contribution STATEMENTS rates within the guidelines of the Texas NOTES establishes TO THE BASIC FINANCIAL Constitution. The pension's Board of Trustees does not have the authority to establish or amend benefit FOR THE YEAR ENDED AUGUST 31, 2023 terms.

All employees of public, state-supported educational institutions in Texas who are employed for one-half or more of the standard work load and who are not exempted from membership under Texas Government Code, Title 8, Section 822.002 are covered by the system.

Pension Plan Fiduciary Net Position. Detailed information about the Teacher Retirement System's fiduciary net position is available in a separately-issued Annual Comprehensive Financial Report (ACFR) that includes financial statements and required supplementary information. That report may be obtained on the Internet at E. ENCUMBRANCE ACCOUNTING https://trs.texas.gov/pages/aboutpublications.aspx, by writing to TRS at 1000 Red River Street, Austin, TX, 78701-2698, or by calling (512)542-6592.

The District employs encumbrance accounting, whereby encumbrances for goods or purchased documented by purchase ordersretirement, and contracts.

Andeath encumbrance Benefits services Provided.areTRS provides service and disability as well as and survivorrepresents benefits, toa commitment of Board appropriation related to unperformed contracts for goods and services.

The eligible employees (and their beneficiaries) of public and higher education in Texas. The pension formula is issuance of a purchase order or the signing of a contract creates an encumbrance but does not calculated using 2.3 percent (multiplier) times the average of the five highest annual creditable salaries times representservice an expenditure forthe theannual period,standard only a annuity commitment expend resources. years of credited to arrive at excepttofor members who areAppropriations grandfathered, at annual Augustsalaries 31 and are encumbrances outstanding at retirement that time are canceled or appropriately the three lapse highest used. The normal service is ateither age 65 with 5 years of credited for sum in theofsubsequent year’s service orprovided when the the member's agebudget. and years of credited service equals 80 or more years. Early retirement is at age 55 with 5 years of service credit or earlier than 55 with 30 years of service credit. There F. PREPAIDprovisions ITEMS for early retirement if the sum of the member's age and years of service credit total are additional at least 80, but the member is less than age 60 or 62 depending on date of employment, or if the member was Prepaid are for payments made Districtpost-employment in the current fiscal year changes; to provideincluding services grandfathered in balances under a previous rule. There areby nothe automatic benefit occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as automatic COLAs. Ad hoc post-employment benefit changes, including ad hoc COLAs can be granted by the nonspendable fund balance to signify that a portion of fund balance is not available for other Texas Legislature as noted in the Plan description above. subsequent expenditures.

Texas Government Code section 821.006 prohibits benefit improvements, if, as a result of the particular G. INVENTORIES action, the time required to amortize TRS’ unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by The consumption method isofused to account for inventories of food school supplies and such action.

Actuarial implications the funding provided in this manner areproducts, determined by the System’s athletic equipment.

Under this method, these items are carried in an inventory account of the actuary. respective fund at cost, using the first-in, first-out method of accounting and are subsequently chargedContribution to expenditures when consumed.

In the General Fund,pursuant reportedtoinventories offset67 byofa or amended Article 16,are section Contributions. requirements are established as current expendable financial resources. balance reserve theylegislature are unavailable the Texasfund Constitution which indicating requires thethat Texas to establish a member contribution rate of not less than 6% of the member's annual compensation and a state contribution rate of not less than 6% and not more of food commodities are recorded at market of values supplied by the of than 10%Inventories of the aggregate annual compensation paid to members the system during theTexas fiscalDepartment year.

Human Services. Although commodities are received at no cost, their fair value is supplied by the Department Services and initially recordedCode as an expense.TheInventory and EmployeeTexas contribution rates of are Human set in state statute, Texas Government 825.402.

TRS Pension th expenditures are adjusted periodically subsequent to inventory counts.

Reform Bill (Senate Bill 12) of the 86 Texas Legislature amended Texas Government Code 825.402 for member contributions and increased employee and employer contribution rates for fiscal years 2020 thru H. RECEIVABLE AND PAYABLES 2025. are shown All trade and property tax receivables Contribution Rates at face value. The property tax receivable allowance is shown at various rates based upon historical property taxes 2022 trends of outstanding 2023 receivable as of August 31, 2023.

Member 8.0% 2022 8.0% 2023 Member Non-Employer Contributing Entity (State) 7.75 8.0% 8.0% 8.0% I. Non-Employer INTERFUNDContributing RECEIVABLES EntityAND (State)PAYABLES % 7.75% 8.0% Employers 7.75% 8.0% Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

98 | 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS Employers 7.75 31, 2023 8.0% FOR THE YEAR ENDED AUGUST %

Prosper ISD FY2023 Employer Contributions Prosper ISD FY2023 Member Contributions Prosper ISD FY2023 NECE On-Behalf Contributions

$ 6,270,752 $13,226,374 $ 7,665,611

Contributors to the plan include members, employers and the State of Texas as the only non-employer contributing entity. The State is the employer for senior colleges, medical schools and state agencies including the TRS. In each respective role, the State contributes to the plan in accordance with state statutes E. ENCUMBRANCE ACCOUNTING and the General Appropriations Act (GAA).

The District employs encumbrance accounting, whereby encumbrances for goods or purchased As the non-employer contributing entity for public education, the State of Texas contributes to the retirement services are documented by purchase orders and contracts. An encumbrance represents a system an amount equal to the current employer contribution rate times the aggregate annual compensation of commitment of Board appropriation related to unperformed contracts for goods and services. The all participating members of the pension trust fund during that fiscal year reduced by the amounts described issuance of a purchase order or the signing of a contract creates an encumbrance but does not below which are paid by the employers. Employers including public schools are required to pay the represent an expenditure for the period, only a commitment to expend resources. Appropriations employer contribution rate in the following instances: lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget. ● On the portion of the member's salary that exceeds the statutory minimum for members entitled to the statutory minimum under Section 21.402 of the Texas Education Code.

F. PREPAID ITEMS ● During a new member's first 90 days of employment.

Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as ● When any part or all of an employee's salary is paid by federal funding source or a privately nonspendable fund balance to signify that a portion of fund balance is not available for other sponsored source, from non-educational and general, or local funds. subsequent expenditures. ● All public schools must contribute 1.7 percent of the member’s salary beginning in fiscal year G. INVENTORIES 2022, gradually increasing to 2 percent in fiscal year 2025.

The consumption method is used to account for inventories of food products, school supplies and In addition to the employer contributions listed above, there are additional surcharges an employer is subject athletic equipment. Under this method, these items are carried in an inventory account of the to. respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a ● When employing a retiree of the Teacher Retirement System the employer shall pay both the fund balance reserve indicating that they are unavailable as current expendable financial resources. member contribution and the state contribution as an employment after retirement surcharge.

Inventories of food commodities are recorded at market values supplied by the Texas Department of Actuarial Assumptions. The total pension liability in the August 31, 2022 actuarial valuation was determined Human Services. Although commodities are received at no cost, their fair value is supplied by the using the following actuarial assumptions: Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

Valuation Date August 31, 2021 rolled forward to August 31, 2022 H. RECEIVABLE AND PAYABLES Actuarial Cost Method Individual Entry Age Normal Asset Valuation Method Fair Value All trade and property tax receivables are shown at face value. The property tax receivable Single Discount Rate 7.00% allowance is shown at various rates based upon historical trends of outstanding property taxes Long-term expected Investment Rate of Return 7.00% receivable as of August 31, 2023.

Municipal Bond Rate as of August 2022 3.91% Inflation 2.30% I. INTERFUND RECEIVABLES AND PAYABLES Salary Increases Including Inflation 2.95% to 8.95% Benefit Changes During the Year None Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund Ad hoc Post Employment Benefit Changes None loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type The actuarial methods and assumptions are used in the determination of the total pension liability are the activities are reported in the governmental-wide financial statements as “internal balances” and same assumptions used in the actuarial valuation as of August 31, 2021. For a full description of these “internal advances”. assumptions please see the actuarial valuation report dated November 12, 2021.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 99

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED AUGUST 31, 2023 PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS Discount Rate. A singleFOR discount rate of 7.00ENDED percent AUGUST was used to 31, measure THE YEAR 2023the total pension liability. The

single discount rate was based on the expected rate of return on plan investments of 7.00 percent. The projection of cash flows used to determine this single discount rate assumed that contributions from active members, employers anddiscount the non-employer be madethe at total the rates set by the legislature Discount Rate.

A single rate of 7.00contributing percent wasentity used will to measure pension liability.

The during the 2019 session.

It is assumed that future employer and state contributions will be 8.50 percent single discount rate was based on the expected rate of return on plan investments of 7.00 percent.

The of to 9.55 percent of payroll over the next several years. payroll in fiscal year 2020 gradually increasing projection of cash flows used to determine this single discount rate assumed that contributions from activeThis includes all employerand andthe state contributions for active and rehired members, employers non-employer contributing entity will beretirees. made at the rates set by the legislature E. ENCUMBRANCE ACCOUNTING during the 2019 session. It is assumed that future employer and state contributions will be 8.50 percent of Based on those year assumptions, the pension plan’s net of position be available to make payroll in fiscal 2020 gradually increasing to fiduciary 9.55 percent payrollwas overprojected the next to several years. This The District employs current encumbrance accounting, whereby encumbrances for goods all future payments planformembers. the long-term expected rateorofpurchased return on includes allbenefit employer and stateofcontributions active and Therefore, rehired retirees. services are documented by to purchase orders and contracts.

An encumbrance represents pension plan investments was applied all periods of projected benefit payments to determine the totala commitment of Board appropriation related to unperformed contracts for goods and services.

The pension Based onliability. those assumptions, the pension plan’s fiduciary net position was projected to be available to make issuance of a purchase order or the signing of a contract creates an encumbrance but does not all future benefit payments of current plan members. Therefore, the long-term expected rate of return on Appropriations represent expenditure for to the only aiscommitment expend resources.

The long-term rate an of return onapplied pension plan investments 7.00%.benefittopayments was allperiod, periods of projected to determine the total pension plan investments lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately pension liability. provided for in the budget.

The long-term expected ratesubsequent of return year’s on pension plan investments was determined using a building-block method in which rangesplan of expected future real rates of return (expected returns, net of pension The long-term rate best-estimates of return on pension investments is 7.00%.

F. plan PREPAID investmentITEMS expense and inflation) are developed for each major asset class. These ranges are combined The long-term of return planweighting investments determined a building-block real rates of return by the to produce theexpected long-termrate expected rateonofpension return by the was expected future using balances are for payments madefuture by the District the current fiscal tonet provide services method inPrepaid which best-estimates ranges ofbyexpected real rates ofinreturn (expected returns, of real pension target asset allocation percentage and adding expected inflation.

Best estimates ofyear geometric rates of occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as These ranges are combined plan investment expense and inflation) are developed for each major asset class. return for each major asset class included in the Systems target asset allocation as of August 31, 2022 are

nonspendable fund balance to signify that a portion of fund balance is not available for other to produce thebelow: long-term expected rate of return by weighting the expected future real rates of return by the summarized Long-Term

subsequent target asset allocationexpenditures. percentage and by adding expected inflation.

Best estimates of geometric real rates of

Expected Expected Contribution Long-Term return for each major asset class included in the Systems target asset allocation as ofToAugust 31, 2022 are

Target Arithmetic Real Long-Term Assetbelow: Class Allocation Rate ofExpected Return Portfolio Returns G. INVENTORIES Expected summarized Target Contribution Arithmetic Global Equity 1 Asset Class Allocation To1.12% Long-Term Real of food products, Long-Term U.S. The consumption 18% to account 4.6% method is used for inventories school supplies and Portfolio Returns Ratecarried of Expected Non-U.S. Developed 13%method, these items Expected 4.9% 0.90% athletic equipment. Under this are in an inventory account of the Target Contribution Arithmetic Return2 of accounting Emerging Markets 5.4% 0.75% respective fund at cost, using9% the first-in, first-out method and are subsequently Allocation1 To Long-Term Real GlobalEquity Equity Asset Class Private 7.7% 1.55% charged to expenditures when14% consumed. In the General Fund, reported inventories are offset by a Portfolio Returns Rate of 4.6% U.S. 18% 1.12% 2 Stable Value as current expendable financial resources. fund balance reserve indicating that they are unavailable Return 4.9% Non-U.S. Developed 13% 0.90% Government 16% 1.0%5.4% 0.22% Global EquityBonds Emerging Markets 9% 0.75% 4 Absolute Return 0%are recorded Inventories values supplied by the 0.00% Texas Department of U.S. 18% 4.6% 1.12% Private Equityof food commodities 14%at market3.7% 7.7% 1.55% Stable Value Hedge Funds 5% 3.4% 0.18% Non-U.S. Developed 13% 4.9% 0.90% Human Services.

Although commodities are received at no cost, their fair value is supplied by the Stable Value Emerging Markets 5.4% 0.75% Real Return Texas Department of Human Services 9% and as an expense.

Inventory and Government Bonds 16% initially recorded 0.22% Private Equity are adjusted periodically 14% 7.7% 1.55% 1.0% Real Estate 15% 4.1% 0.94% expenditures subsequent to inventory counts.

4 Stable Value Absolute Return 0% 0.00% Energy, Natural Resources 6% 5.1%3.7% 0.37% Government Bonds 16%5% SCHOOL DISTRICT 0.22% PROSPER INDEPENDENT Stable Value Hedge 3.4% 0.18% 3.6% 0.00% H. Commodities RECEIVABLE ANDFunds PAYABLES 0% 1.0% NOTES TO THE BASIC FINANCIAL STATEMENTS Real Return Risk Parity Absolute Return4 0% 3.7% 0.00% Real Estate 15% AUGUST 0.94% FOR THE 31,value.

2023 The property Risk Parity 8% ENDED 0.43% are shown at4.6% face All trade Hedge and property tax YEAR receivables Stable Value Funds 5% 3.4% 0.18% tax receivable 4.1% Realallowance Return Leverage is Resources shown at various rates based6%upon historical5.1% trends of outstanding property taxes Energy, Natural 0.37% Real Estate as of August 31, 2023.

15% 0.94% Cash 2% 3.0%3.6% 0.01% receivable Commodities 0% 0.00% 4.1% 3 Asset Allocation -6% 3.6% -0.05% Volatility -0.93% Risk ParityDrag Leverage Energy, Natural Resources 6%5.1% 0.37% Expectation 2.70% I. Inflation INTERFUND RECEIVABLES AND- PAYABLES Risk Parity 8% 4.6% 0.43% Commodities 0% 3.6% 0.00% 3 Total 8.19% Leverage

-0.93% Volatility Drag Risk Parity 100%are Cash 3.0% 0.01% Interfund Total Risk 100% funds

8.19% Short-term amounts owed between “Due to/from other funds”.

Parity 8%2% classified as 4.6% 0.43% Asset Allocation Leverage -0.05% loans are classified as “Advances to/from-6% other funds” and3.6% are offset by a fund balance reserve Leverage DiscountCash Rate Sensitivity Analysis.

The following table the3.0% Net Pension Liability of and the plan using Inflation Expectation -presentsthe 2.70% 2% between 0.01% activities business-type account.

Any residual balances outstanding governmental the discount rate of 7.00 percent, and what the net pension liability would be if it were calculated using Asset Allocation Leverage -6% 3.6% -0.05% activities are reported in the governmental-wide financial statements as “internal balances”a and discountInflation rate thatExpectation is one percentage point lower (6.00 percent) or one percentage point higher (8.00 percent) 2.70% “internal advances”.

1 Target allocations than the current rate. are based on the FY22 policy model.

2 Capital Market Assumptions come from Aon Hewitt (as of 08/31/2022).

CAPITAL ASSETS 1J. allocations areresults based on thethe FY22 policy model.

3Target The volatility drag from conversion between arithmetic and geometric 1% mean returns.

1% Decrease in Discount Rate Increase in 24 Rate(as of 08/31/2022).

(7.00%) Discount Rate Capital Market Assumptions comesensitive from Discount Aon Hewitt Absolute Return includes credit investments.

Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in (6.00%) 3 The volatility drag results from the conversion between arithmetic and geometric mean (8.00%) returns. the applicable governmental or business-type 4 ProsperReturn ISD’s proportionate share Absolute includes credit sensitive investments. activities columns in the government-wide financial of the net pension liability:

$100,911,530

100| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

$64,868,973

$35,654,789

100%

Volatility Drag3

-0.93%

-FINANCIAL Discount Rate Sensitivity Analysis.

The table presents the Net Pension Liability the plan using NOTES TOfollowing THE BASIC STATEMENTS | BASICof FINANCIAL STATEMENTS Total 8.19% the discount rate of 7.00 percent, and what the net pension liability would be if it were calculated using a 100%percent) or one percentage point higher (8.00 percent) discount rate that is one percentage point lower (6.00 than the current rate.

PROSPER INDEPENDENT SCHOOL DISTRICT Discount Rate Sensitivity Analysis. The following table presents the Net Pension Liability of the plan using NOTES TOand THE BASIC STATEMENTS the discount rate of 7.00 percent, what the netFINANCIAL pension liability would calculated 1% Decrease in Discount Rate be if it were 1% Increase in using a FOR THE YEAR ENDED AUGUST 31, 2023 discount rate that is one percentage point lower (6.00 percent) or one percentage point higher (8.00 Discount Rate (7.00%) Discount Rate percent) than the current rate.

(6.00%) (8.00%) Prosper ISD’s proportionate share of the net pension liability: Prosper ISD’s proportionate share of the net pension liability:

$100,911,530 1% Decrease in Discount Rate (6.00%)

$64,868,973 Discount Rate (7.00%)

$35,654,789 1% Increase in Discount Rate (8.00%)

$100,911,530

$64,868,973

$35,654,789

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of E. ENCUMBRANCE ACCOUNTING Resources Related to Pensions. At August 31, 2023, Prosper Independent School District reported a liability of $64,868,973 for its proportionate share of the TRS's net whereby pension liability.

This liability reflects reduction The District employs encumbrance accounting, encumbrances for goods or apurchased for Stateservices pension are support providedby to purchase Prosper Independent District. amount recognized documented orders and School contracts.

An The encumbrance represents bya Pension Liabilities, School Pension Expense, and Deferred Outflows of contracts Resources Deferred Inflows of Prosper Independent District as its proportionate share of the net pension liability, theservices. related State commitment of Board appropriation related to unperformed forand goods and The Resources Related to Pensions.

At August 31, 2023, Prosper Independent School District reported a liability support, and the total of the net pension liability of thata was associated with Independent School issuance of aportion purchase order or the signing contract creates an Prosper encumbrance but does not of $64,868,973 its expenditure proportionate of the TRS's pension liability.

This liability reflects a reduction District were as for follows: Appropriations represent an forshare the period, only net a commitment to expend resources. for Statelapse pension support31provided to Prosperoutstanding Independent School The amountorrecognized by at August and encumbrances atliability that timeDistrict. are either canceled appropriately District's Proportionate share of the collective net pension $ 64,868,973 District's Proportionate share of the collective net pension liability $ 64,868,973 Prosper Independent School District as its proportionate share of the net pension liability, the related State provided for in the subsequent year’s budget.

State's proportionate share that is associated withwith the District 97,526,529 State's share is associated thewas District 97,526,529 support, and theproportionate total portion of the that net pension liability that associated with Prosper Independent School Total $162,395,502 Totalas follows: $162,395,502 District were F. PREPAID ITEMS The net pension was measured August 31, andliability rolled forward August 31, 2022 and the District'sliability Proportionate share of as theofcollective net2021 pension $ to 64,868,973 total pension liability used to calculate the net pension liability was determined by an valuation as of Prepaid balances are for payments made by the District in the current fiscal year to provide services State's proportionate share that is associated with the District 97,526,529 actuarial that date.occurring The employer's proportion of the net pension liability was based on the employer's contributions to in the subsequent fiscal year, and the amount of prepayments has been recognized as Total $162,395,502 the pension plan relative to the contributions of all planbalance for the is period Septemberfor 1, other 2021 nonspendable fund balance to signify thatemployers a portiontoofthefund not available The August net pension liability was measured as of August 31, 2021 and rolled forward to August 31, 2022 and the thru 31, 2022. expenditures. subsequent total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The employer's proportionproportion of the net of pension liability net waspension based on the employer's contributions an to At August 31, 2022 the employer's the collective liability was 0.1092669416%, G. INVENTORIES the pension plan relative to proportionate the contributions employers to the plan for31, the2021. period September 1, 2021 increase of 20.59% from its shareofofall 0.0906068907% at August thru August 2022.

The31, consumption method is used to account for inventories of food products, school supplies and Changesathletic Since the Prior Actuarial – The actuarial methods haveaccount been modified equipment.

Under Valuation this method, these itemsassumptions are carried and in an inventory of the At August 31, 2022fund the of employer's proportion ofPension the first-out collective net These pension liability was 0.1092669416%, since therespective determination prior year’s Liability. assumptions were adopted an in atthe cost, using the Net first-in, method of new accounting and are subsequently increase of 20.59% its proportionate share of The 0.0906068907% at August 31, 2021. conjunction with toanfrom actuarial experience study. primary assumption change was the lowering ofby thea charged expenditures when consumed.

In the General Fund, reported inventories are offset single discount rate from 7.25 indicating percent to that 7.00they percent. fund balance reserve are unavailable as current expendable financial resources.

Changes Since the Prior Actuarial Valuation – The actuarial assumptions and methods have been modified since theyear determination of the prior Pension These new assumptions were adopted of in 31, 2023,year’s Prosper Independent School District recognized pension expense For the ended August Inventories of food commodities areNet recorded at Liability. market values supplied by the Texas Department conjunction with an actuarial experience study.

The primary assumption change was the lowering of the $9,322,431 and revenue of $9,322,431 for support provided by the State.

Human Services. Although commodities are received at no cost, their fair value is supplied by the single discount fromPROSPER 7.25of percent to 7.00 percent.

Texas rate Department Human Services and initially recorded as an expense. Inventory and INDEPENDENT SCHOOL DISTRICT At August 31, 2023,NOTES Prosper Independent School District reported its proportionate share of the TRS's expenditures are adjusted periodically subsequent to inventory counts.

THE BASIC FINANCIAL 31,TO 2023, Prosper Independent School STATEMENTS District recognized of For the year endedofAugust deferred outflows resources and deferred inflows of resources related to pensions pension from theexpense following FOR THE YEAR ENDED AUGUST 31, 2023 $9,322,431 and revenue of $9,322,431 for support provided by the State. sources (The amounts shown below will be the cumulative layers from the current and prior years H. RECEIVABLE AND PAYABLES combined.): At August 2023, SchoolareDistrict proportionate sharetax of receivable the TRS's shownreported at face its value.

The property All 31, trade andProsper propertyIndependent tax receivables deferred allowance outflows ofis resources and deferred inflows of resources related to pensions from the following Deferred Deferred shown at various rates based upon historical trends of outstanding property taxes sources receivable (The amounts shown below will be the cumulative layers from the current and prior years Outflows of Inflows of as of August 31, 2023.

Resources Resources combined.): between expected and actual economic experience I.Differences INTERFUND RECEIVABLES AND PAYABLES

$ 940,595 $ 1,414,266 Changes in actuarial assumptions 12,087,201 3,012,468 Difference between projected actualbetween investment earnings 25,204,200 18,795,353 Short-term amountsandowed funds are classified as “Due to/from other funds”. Interfund Changesloans in proportion and difference between theto/from employer's are classified as “Advances other funds” and are offset by a fund balance reserve 15,863,610 activities311,762 contributions and the proportionate share of contributions and business-type account.

Any residual balances outstanding between the governmental Contributions paid to TRS subsequent to the measurement date 6,270,752 as “internal balances” activities are reported in the governmental-wide financial statements and Total“internal advances”. $60,366,358 $23,533,849

J. The CAPITAL net amountsASSETS of the District’s balances of deferred outflows and inflows of resources (not including the deferred contribution paid subsequent to the measurement date) related to pensions will be recognized in Capital as assets, which includes property, plant, equipment, and infrastructure assets, are reported in pension expense follows: the applicable governmental or business-type activities columns in the government-wide financial Year ended August 31: 2024 2025 2026

Pension Expense Amount $ 8,423,844 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 101 6,130,595 3,614,068

Outflows of Inflows of Resources Resources Differences between expected and actual economic experience $ 940,595 $ 1,414,266 BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS Changes in actuarial assumptions 12,087,201 3,012,468 Difference between projected and actual investment earnings 25,204,200 18,795,353 Changes in proportion andPROSPER difference between the employer's SCHOOL DISTRICT INDEPENDENT 15,863,610 311,762 contributions and the proportionate share of contributions NOTES TO THE BASIC FINANCIAL STATEMENTS Contributions paid to TRS subsequent to the measurement date 6,270,752 FOR THE YEAR ENDED AUGUST 31, 2023 $23,533,849 Total $60,366,358

The net amounts of the District’s balances of deferred outflows and inflows of resources (not including the deferred contribution paid subsequent to the measurement date) related to pensions will be recognized in pension expense as follows: Year ended August 31: 2024 2025

Pension Expense Amount $ 8,423,844 6,130,595

E.2026 ENCUMBRANCE ACCOUNTING

3,614,068 2027 10,018,706 The District employs encumbrance accounting, whereby encumbrances for goods or purchased 2028 services are documented by purchase orders 2,374,544 and contracts. An encumbrance represents a Thereafter commitment of Board appropriation related to unperformed contracts for goods and services. The

issuance of a purchase order or the signing of a contract creates an encumbrance but does not represent an expenditure for the period, onlyBENEFIT a commitment to expend resources. Appropriations NOTE 13. DEFINED OTHER POST-EMPLOYMENT PLANS lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in District the subsequent year’sinbudget.

Plan Description.

The participates the Texas Public School Retired Employees Group Insurance Program (TRS- Care). It is a multiple-employer, cost-sharing defined Other Post-Employment Benefit F. PREPAID ITEMS (OPEB) plan with a special funding situation. The TRS-Care program was established in 1986 by the Texas Legislature.

Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent year, andprogram the amount of related prepayments been recognized as with Texas The TRS Board of Trustees administersfiscal the TRS-Care and the fund inhas accordance nonspendable fund balance to signify that a portion of fund balance is not available for other Insurance Code Chapter 1575. The Board of Trustees is granted the authority to establish basic and optional expenditures. subsequent group insurance coverage for participants as well as to amend benefit terms as needed under Chapter 1575.052. The Board may adopt rules, plans, procedures, and orders reasonably necessary to administer the G. INVENTORIES program, including minimum benefits and financing standards.

The consumption is used to account for inventories food products, schoolnetsupplies positionand is OPEB Plan Fiduciary Netmethod Position.

Detail information about the ofTRS-Care’s fiduciary athletic equipment.

Under this method, these items are carried in an inventory account of the available in the separately-issued TRS Annual Comprehensive Financial Report that includes financial respective fund atsupplementary cost, using the first-in, first-out methodmay of accounting andonarethesubsequently statements and required information.

That report be obtained Internet at charged to expenditures when consumed.

In the General Fund, reported inventories are offset by a http://www.trs.texas.gov/pages/aboutpublications.aspx; by writing to TRS at 1000 Red River Street, Austin, as current expendable financial resources. fund balance reserve indicating that they are unavailable TX, 78701-2698; or by calling (512) 542-6592. food commodities are recorded at market values suppliedfrom by the Texasschools, Department of charter Benefits Inventories Provided. of TRS-Care provides health insurance coverage to retirees public commodities are received at nodistricts cost, their fairarevalue is supplied the schools, Human regionalServices. educationAlthough service centers and other educational who members of thebyTRS TexasOptional Department of Human andforinitially recorded pension plan. dependent coverageServices is available an additional fee. as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

Eligible non-Medicare retirees and their dependents may enroll in TRS-Care Standard, a high-deductible PROSPER DISTRICT H. RECEIVABLE PAYABLES health plan. Eligible AND Medicare retireesINDEPENDENT and their dependentsSCHOOL may enroll in the TRS-Care Medicare Advantage THE BASIC FINANCIAL drug plan.STATEMENTS To qualify for TRS-Care coverage, a medical plan and theNOTES TRS-CareTO Medicare Rx prescription are inshown at face value.

The There property All have trade atand property taxofreceivables retiree must least 10 years service credit theAUGUST TRS pension aretax no receivable automatic FOR THE YEAR ENDED 31,system.

2023 allowance is shown at various rates based upon historical trends of outstanding property taxes post-employment benefit changes; including automatic COLAs. receivable as of August 31, 2023.

The premium rates for retirees are reflected the following table: I. INTERFUND RECEIVABLES AND in PAYABLES TRS-Care Monthly for Retirees Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve Medicare Non-Medica activities and business-type account. Any residual balances outstanding between the governmental re activities are reported in the governmental-wide$ financial statements Retiree* 135 $ 200as “internal balances” and “internal advances”.

Retiree and Spouse 529 689 Retiree* and Children 468 408 J. CAPITAL ASSETS Retiree and Family 1,020 999 Capital assets,*which includes property, plant, equipment, and infrastructure assets, are reported in or surviving spouse the applicable governmental or business-type activities columns in the government-wide financial Contributions. Contribution rates for the TRS-Care plan are established in state statute by the Texas Legislature, and there is no continuing obligation 102| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORTto provide benefits beyond each fiscal year. The TRS-Care plan is currently funded on a pay-as-you-go basis and is subject to change based on available funding.

Funding for TRS-Care is provided by retiree premium contributions and contributions from the state, active

Contributions. Contribution rates for the TRS-Care established in state statute by the Texas TRS-Care Monthlyplan for are Retirees Legislature, and there is no continuing obligation to provide benefits beyond each fiscal year. The TRS-Care Medicare Non-Medica plan is currently funded on a NOTES pay-as-you-go basis and is subject to change based on available funding.

TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS re Funding for TRS-Care is provided by retiree premium contributions and contributions from the state, active Retiree* $ 135 $ 200 employees, and school districts based upon public school district payroll. The TRS Board of trustees does not Spouse rates.

529 689 have the authority to set orRetiree amend and contribution PROSPER SCHOOL DISTRICT Retiree* andINDEPENDENT Children 468 408 NOTES TO BASIC FINANCIAL STATEMENTS Texas Insurance Code, section 1575.202 establishes the 1,020 state’s contribution rate which is 1.25% of the Retiree andTHE Family 999 FOR THE YEAR ENDED AUGUST 31, 2023 employee’s salary. Section 1575.203 establishes the active employee’s rate which is .65% of pay. Section * or surviving spouse 1575.204 establishes an employer contribution rate of not less than 0.25 percent or not more than 0.75 percent active employee of the school.plan The are actual employer in contribution rateby is prescribed of the salary of each Contributions.

Contribution rates for thepublic TRS-Care established state statute the Texas by the Legislature in the General Appropriations Act. The following table shows contributions to the Legislature, and there is no continuing obligation to provide benefits beyond each fiscal year. The TRS-Care TRS-Care plan by type of contributor. plan is currently funded on a pay-as-you-go basis and is subject to change based on available funding.

Funding for TRS-Care is provided by retiree premium contributions and contributions from the state, active Contribution payroll.Rates The TRS Board of trustees does not employees, and school districts based upon public school district 2022 2023 have the authority to set or amend contribution rates.

Active Employee 0.65% 0.65 E. ENCUMBRANCE Texas Insurance Code, ACCOUNTING section 1575.202 establishes the state’s contribution rate which is 1.25%%of the employee’s salary. Section 1575.203 establishes the active employee’s rate which is .65% of pay. Section Non-Employer Contributing Entity (State) 1.25% 1.25 Districtanemploys whereby encumbrances goods purchased 1575.204The establishes employerencumbrance contribution accounting, rate of not less than 0.25 percent or notformore thanor0.75 percent % services areactive documented purchase orders The andactual contracts.

Ancontribution encumbrance public school. employer rate represents is prescribeda of the salary of each employee by of the Employers 0.75% 0.75 commitmentinofthe Board appropriation related Act. to unperformed contracts goodscontributions and services.to The by the Legislature General Appropriations The following table for shows the % purchase order or the signing of a contract creates an encumbrance but does not TRS-Careissuance plan by of typea of contributor. remitted Employers to expend resources.

1.25% 1.25 Appropriations represent anFederal/private expenditure forFunding the period, only abycommitment % Contribution Rates lapse at August 31 and encumbrances outstanding at that timeRates are either canceled or appropriately Contribution provided for in the subsequent year’s budget.

2022 2022 2023 2023 Prosper ISD FY23 Employer Contributions Active Employee Active Employee 0.65% 0.65% 0.65% 0.65 F. PREPAID ITEMS Non-Employer Contributing 1.25% 1.25% % $1,330,153Entity (State) Non-Employer Contributing Entity (State) 1.25% 1.25 Employers 0.75% 0.75% Prepaid balances are for payments made by the District in the current fiscal year to provide services Prosper ISD FY23 Member Contributions % occurring in the subsequent fiscal year, and the amount of prepayments has been recognized Federal/private Funding remitted by Employers 1.25% 1.25% as Employers 0.75% 0.75other nonspendable fund balance to signify that a portion of fund balance is not available for Prospersubsequent ISD FY23$1,074,309 Employer Contributions $1,330,153 % expenditures.

ISD Funding FY23 remitted NECE byOn-behalf Prosper ISD FY23Prosper Member Contributions Federal/private Employers Contributions 1.25% $1,074,309 1.25 % G.Prosper INVENTORIES ISD FY23 NECE On-behalf Contributions $1,410,568 $1,410,568 PROSPER INDEPENDENT SCHOOL DISTRICT The consumption is used to account for inventories ofContributions food products, school supplies and ProspermethodISD FY23 Employer NOTES TO THE BASIC FINANCIAL STATEMENTS athletic Under this listed method, these items carried surcharge in an inventory of are the In addition to theequipment. employer contributions above, there is anare additional all TRSaccount employers FOR THE YEAR ENDED AUGUST 31, 2023 respective fund at cost, using the first-in, first-out method of accounting and are subsequently subject to, regardless of whether or not they participate in the TRS Care OPEB program.

When hiring a TRS $1,330,153 charged toare expenditures when the General Fund,ofreported are offset by a retiree, employers required to pay to consumed.

TRS Care, aInmonthly surcharge $535 perinventories retiree.

Prosper ISD FY23 Member Contributions fund balance reserve indicating that they are unavailable as current expendable financial resources.

TRS-Care received supplemental appropriations from the State of Texas as the Non-Employer Contributing $1,074,309commodities are recorded at market values supplied by the Texas Department of Entity inInventories the amountofoffood $83 million in fiscal year 2022 from the Federal Rescue Plan Act (ARPA) to help Prosper ISD FY23 On-behalf Contributions Human Services.

Although commodities are year received their fair value is supplied by the defray Covid-19-related health care costs during NECE fiscal 2022.at no cost, Texas Department of Human Services and initially recorded as an expense. Inventory and are The adjusted periodically subsequent to inventory counts. 31, 2021. Update procedures $1,410,568 Actuarialexpenditures Assumptions. actuarial valuation was performed as of August were used to roll forward the Total OPEB Liability to August 31, 2022.

H. RECEIVABLE AND PAYABLES In addition to the employer contributions listed above, there is an additional surcharge all TRS employers are subject to, regardless of whether or not plan they offered participate in the TRS Care is OPEB program. hiring a TRS The actuarial valuation of the OPEB through similar toproperty the When actuarial valuation are shownTRS-Care at face value.

The tax receivable All trade andrequired property tax toreceivables retiree, employers are to pay TRS Care, a monthly surcharge of $535 per retiree. performed for the is pension exceptrates that based the OPEB moreof complex.

Theproperty demographic allowance shownplan, at various upon valuation historical is trends outstanding taxes assumptions were developed in the experience study performed for TRS for the period ending August 31, receivable as of August 31, 2023.

2017.

I. INTERFUND RECEIVABLES AND PAYABLES The following assumptions and other inputs used for members of TRS-Care are based on an established amounts owed between funds are classified as August “Due to/from other pattern ofShort-term practice and are identical to the assumptions used in the 31, 2021 TRSfunds”. pension Interfund actuarial are rolled classified as “Advances to/from valuationloans that was forward to August 31, 2022: other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements General as “internal balances” and Rates of Mortality Inflation “internal Retirement Wage Inflation Rates ofadvances”.

J.

Rates of Termination CAPITAL ASSETS

Rates of Disability

Capital assets, which plant, equipment, and infrastructure in The active mortality rates were includes based onproperty, 90 percent of the RP-2014 Employee Mortalityassets, Tablesare forreported males and the applicable governmental or business-type activities columns in the government-wide financial females, with full generational mortality using Scale BB. The post-retirement mortality rates for healthy lives were based on the 2018 TRS of Texas Healthy Pensioner Mortality Tables, with full generational projection ANNUAL FINANCIAL REPORT | 103 using the ultimate improvement rates from the mortality2023 projection scaleCOMPREHENSIVE MP-2018.

females, with full generational mortality using Scale BB. The post-retirement mortality rates for healthy lives The following assumptions and other inputs used for members of TRS-Care are based on an established were based on the 2018 TRS of Texas Healthy Pensioner Mortality Tables, with full generational projection patternSTATEMENTS of practice and| NOTES are identical to the assumptions usedSTATEMENTS in the August 31, 2021 TRS pension actuarial TO THE BASIC FINANCIAL BASIC FINANCIAL using the ultimate from the valuation that was improvement rolled forwardrates to August 31,mortality 2022: projection scale MP-2018.

Rates of Mortality General Inflation PROSPER INDEPENDENT SCHOOL DISTRICT Rates of Retirement Wage Inflation NOTES TO THE BASIC FINANCIAL STATEMENTS Rates of Termination FOR THE YEAR ENDED AUGUST 31, 2023Rates of Disability The active mortality rates were based on 90 percent of the RP-2014 Employee Mortality Tables for males and females, with full generational mortality using Scale BB. The post-retirement mortality rates for healthy lives were based on the 2018 TRS of Texas Healthy Pensioner Mortality Tables, with full generational projection using the ultimate improvement rates from the mortality projection scale MP-2018.

Additional Actuarial Methods and Assumptions: Valuation DateACCOUNTING E. ENCUMBRANCE

F.

August 31, 2021 rolled forward to August 31, 2022 The District employs forAge goods or purchased Actuarial Cost Methodencumbrance accounting, whereby encumbrances Individual Entry Normal services are documented by purchase orders and contracts.

An encumbrance represents a Inflation 2.30% commitment of Board appropriation related to unperformed contracts for goods and services. The Single Discount Rate order or the signing of a contract creates an 3.91% issuance of a purchase encumbrance but does not Aging Factors Based specific plan experience Appropriations represent an expenditure for the period, only a commitment to on expend resources.

Expenses Third-party administrative expensesorrelated to the lapse at August 31 and encumbrances outstanding at that time are either canceled appropriately provided for in PROSPER the subsequent year’s budget.

INDEPENDENT SCHOOL DISTRICT delivery of health care benefits are included in the NOTES TO THE BASIC FINANCIAL STATEMENTS age-adjusted claim costs Additional Actuarial Methods and Assumptions: PREPAID ITEMS FOR THE YEAR ENDED AUGUST 31, 2023 Projected 3.05% to 9.05%, including inflation Valuation Salary Date Increases August 31, 2021 rolled forward Normal Retirement: 65% services Election Rates August 2022 Prepaid balances are for payments made by the District in the current to fiscal year31, to provide participation prior to age 65 Actuarial in Cost Entryhas Age Normal occurring theMethod subsequent fiscal year, and the amount ofIndividual prepayments been recognized as and 40% participation after age 65 nonspendable fund balance to signify that a portion of fund balance is not available for other Inflation 2.30% Ad hocDiscount post-employment benefit changes None expenditures. subsequent Single Rate 3.91%

Aging Factors Based on specific plan experience G. INVENTORIES Discount Rate. A single discount rate of 3.91% was used to measure the total OPEB liability. There was an Expenses Third-party administrative expenses related to the increase of 1.96 percent in the discount rate since the previous year. Because the plan is essentially a delivery of health careproducts, benefits included in the The consumption method is used to account for inventories of municipal food school supplies and “pay-as-you-go” plan, the single discount rate is equal to the prevailing bondare rate.

The projection athletic equipment.

Under this method, these items are carried in an inventory account of the age-adjusted claim costs of cash flows used to determine the discount rate assumed that contributions from active members and those respective fund at cost, using the first-in, first-out method of accounting and are subsequently and the non-employer contributing entity the statutorily required of the contributing Projected employers Salary Increases 3.05%are to made 9.05%,atincluding inflation charged toRates expenditures when In the General reported inventories bytoa rates. Based on those assumptions, theconsumed.

OPEB plan’s fiduciary netFund, position was projected to are not be able Normal Retirement: 65%offset Election as current expendablebond financial resources. balance indicating that plan they are unavailable make all fund future benefitreserve payments of current members.

Therefore, the municipal rate was used for participation prior to age 65 the long-term rate of return and was applied to all periods of projected benefit payments to determine the total Inventories of food commodities are recorded at market values supplied by the Texas Department of OPEB liability.

Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department Human and “20-year initially Municipal recorded GO as an rate isServices the Fidelity AAexpense.

Index” as Inventory of August and 31, The source of the municipal of bond expenditures are adjusted periodically subsequent to inventory counts.

2021 using the fixed-income market data/yield curve/data municipal bonds with 20 years to maturity that include only federally tax-exempt municipal bonds.

H. RECEIVABLE AND PAYABLES Discount Rate Sensitivity Analysis. The following schedule shows the impact of the Net OPEB Liability if shown at the facediscount value. rate Thethat property tax receivable All trade and was property tax than receivables the discount rate used 1% less and 1%are greater than was used 3.91%) in allowance is shown at various rates based upon historical trends of outstanding property taxes measuring the Net OPEB Liability. receivable as of August 31, 2023.

Current Single 1% Increase in Discount Discount Rate (2.91%) Rate (3.91%) (4.91%) Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund District’s proportionate loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve share of the Net OPEB account. Any residual balances outstanding between the governmental activities and business-type Liability: $39,747,198 $33,710,364 $28,819,759 activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

Healthcare Cost Trend Rates Sensitivity Analysis - The following schedule shows the impact of the net J. CAPITAL OPEB liability ifASSETS a healthcare trend rate that is one-percentage less than or one-percentage point greater than the health trend rates is assumed.

Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or the government-wide 1%business-type Decrease in activities columns CurrentinSingle 1%financial Increase in Healthcare Trend Rate Healthcare Healthcare Trend Rate Trend Rate 104| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT District’s proportionate share of the Net OPEB I.

1% Decrease in INTERFUND RECEIVABLES AND PAYABLES Discount Rate

measuring the Net OPEB Liability.

NOTES 1% TO Decrease THE BASIC STATEMENTS in FINANCIAL STATEMENTS Current Single | BASIC FINANCIAL 1% Increase in

Discount Rate (2.91%)

Discount Rate (3.91%)

PROSPER INDEPENDENT SCHOOL DISTRICT District’s proportionate NOTES TO THE BASIC FINANCIAL STATEMENTS share of the Net OPEB Liability: $39,747,198 $33,710,364 FOR THE YEAR ENDED AUGUST 31, 2023

Discount Rate (4.91%) $28,819,759

Healthcare Cost Trend Rates Sensitivity Analysis - The following schedule shows the impact of the net OPEB liability if a healthcare trend rate that is one-percentage less than or one-percentage point greater than the health trend rates is assumed.

1% Decrease in Healthcare Trend Rate

Current Single Healthcare Trend Rate

1% Increase in Healthcare Trend Rate

E. District’s ENCUMBRANCE proportionateACCOUNTING share of the Net OPEB The District employs encumbrance accounting, whereby encumbrances purchased Liability: $27,777,496 $33,710,364 for goods or $41,401,566 services are documented by purchase orders and contracts. An encumbrance represents a commitment of Board appropriation related to unperformed contracts for goods and services. The OPEB Liabilities, Expenses, andtheDeferred Outflows of Resources and Deferredbut Inflows of issuance ofOPEB a purchase order or signing of a contract creates an encumbrance does not Resources Relatedanto expenditure OPEBs. AtforAugust 31, 2023, District reported a liability of $33,710,364 for its Appropriations represent the period, only the a commitment to expend resources.

INDEPENDENT SCHOOL proportionate of PROSPER the Net OPEB Liability.

This liability reflects a reduction State OPEB lapse share at August 31TRS’s and encumbrances outstanding at that timeDISTRICT are either canceled for or appropriately NOTES TO THE BASIC FINANCIAL STATEMENTS support provided to the District. provided for in the subsequent year’s budget.

FOR THE YEAR ENDED AUGUST 31, 2023

The PREPAID amount recognized F. ITEMS by the District as its proportionate share of the net OPEB liability, the related State support, and the total portion of the net OPEB liability that was associated with the District were as follows: Prepaid are for payments made by the District in the current fiscal year to provide services State’s balances proportionate share that is associated with the District District’s in Proportionate sharefiscal of theyear, collective Netamount OPEB Liability occurring the subsequent and the of prepayments has been recognized as District’s Proportionate share of the collective Net OPEB Liability $33,710,364 nonspendable fund balance to signify that a portion of fund balance is not available for other 41,121,348 State’s proportionate share that is associated with the District 41,121,348 $33,710,364 expenditures. subsequent Total $74,831,712 Total $74,831,712 G. INVENTORIES The Net The OPEB Liability was measured as of and rolled to August 31, 2022 andand the consumption method is used to August account31, for2021 inventories of forward food products, school supplies Total OPEB Liability used to calculate the Net OPEB Liability was determined by an actuarial valuation as of athletic equipment. Under this method, these items are carried in an inventory account of the that date.respective The employer’s proportion of the Net OPEB Liability was based on the employer’s contributions to fund at cost, using the first-in, first-out method of accounting and are subsequently the OPEBcharged plan relative to the contributions of all employers to the plan for the period September 1, 2021 thru to expenditures when consumed. In the General Fund, reported inventories are offset by a August 31, 2022. fund balance reserve indicating that they are unavailable as current expendable financial resources.

At August 31, 2022 of thefood employer’s proportion of the collective OPEB Liability wasTexas 0.1407883260%, Inventories commodities are recorded at marketNet values supplied by the Department an of the August 31, 2021 proportionate share of 0.1218342250%. increase of 15.56% compared to Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Services and initially recorded as an expense. Inventory and Changesexpenditures Since the Prior Actuarial Valuationsubsequent – The following were changes are adjusted periodically to inventory counts. to the actuarial assumptions or other inputs that affected measurement of the Total OPEB liability since the prior measurement period: H. RECEIVABLE AND PAYABLES ● The discount rate changed from 1.95 percent as of August 31, 2021 to 3.91 percent as of August 2022. This decreased TotalatOPEB are the shown face Liability. value. The property tax receivable All trade and31,property taxchange receivables allowance is shown at various rates based upon historical trends of outstanding property taxes Changesreceivable of BenefitasTerms Since Prior Measurement Date – There were no changes in benefit terms of August 31,the 2023. since the prior measurement date.

I. INTERFUND RECEIVABLES AND PAYABLES The amount of OPEB expense recognized by the District in the reporting period was $(5,835,451).

Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund At August 31, 2023, the District reported itsto/from proportionate share ofand the are TRS’s deferred outflows of resources loans are classified as “Advances other funds” offset by a fund balance reserve and deferred inflows of resources related tooutstanding other post-employment benefits from the following activities and sources: business-type account.

Any residual balances between the governmental activities are reported in the governmental-wide financial statements as “internal balances” and Deferred Deferred “internal advances”.

Outflows of Inflows of Resources Resources Differences between expected and actual economic experience $ 1,874,177 $28,083,759 ChangesCapital in actuarial assumptions 23,419,956 assets, which includes property, plant, equipment, and5,134,756 infrastructure assets, are reported in Difference projected and actual investment earnings activities columns 100,778 - financial thebetween applicable governmental or business-type in the government-wide Changes in proportion and difference between the employer's contributions and the proportionate share of contributions 34,238,364 364 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 105 Contributions paid to TRS subsequent to the measurement date 1,330,153 Total $42,678,228 $51,504,079

J.

CAPITAL ASSETS

August 31,measurement 2022. This change theliability Total OPEB other inputs that affected of thedecreased Total OPEB sinceLiability. the prior measurement period: Changes of Benefit Terms Since the Measurement Date – There changes in percent benefit terms rateTOchanged from 1.95 percent as of Augustwere 31, no 2021 to 3.91 as of ● The discount | NOTES THEPrior BASIC FINANCIAL STATEMENTS BASIC FINANCIAL STATEMENTS since the prior August measurement date.This change decreased the Total OPEB Liability.

31, 2022.

The amount OPEBTerms expense recognized by the District in SCHOOL the reporting period Changes of of Benefit Since theINDEPENDENT Prior Measurement Date – There werewas no $(5,835,451). changes in benefit terms PROSPER DISTRICT since the prior measurement date.

NOTES TO THE BASIC FINANCIAL STATEMENTS At August 31, 2023, the District reported its proportionate share of the TRS’s deferred outflows of resources FOR THE ENDED AUGUST 31, 2023 and deferred inflows resources relatedYEAR tobyother post-employment benefits from the$(5,835,451). following sources: The amount of OPEBofexpense recognized the District in the reporting period was At August 31, 2023, the District reported its proportionate share of theDeferred TRS’s deferred Deferred outflows of resources Outflows of Inflows of and deferred inflows of resources related to other post-employment benefits from the following sources:

Resources Resources Differences between expected and actual economic experience $ 1,874,177 $28,083,759 Deferred Deferred Changes in actuarial assumptions 5,134,756 23,419,956 Outflows of Inflows of Difference between projected and actual investment earnings 100,778 Resources Resources Differences between expected and actual economic experience $ 1,874,177 $28,083,759 Changes in proportion and difference between the employer's contributions and theassumptions proportionate share of contributions 34,238,364 364 in actuarial 5,134,756 23,419,956 E.Changes ENCUMBRANCE ACCOUNTING Contributions paid to TRS subsequent to the measurement date 1,330,153 -Difference between projected and actual investment earnings 100,778 Total $42,678,228 $51,504,079 District and employs encumbrance accounting, whereby encumbrances for goods or purchased ChangesThe in proportion difference between the employer's services areproportionate documented purchase orders and contracts.

An encumbrance364represents a contributions and the shareby of contributions 34,238,364 commitment ofemployer’s Board appropriation to unperformed goods and The Contributions paidof to the TRS subsequent to the measurement date 1,330,153offor The net amounts balances ofrelated deferred outflows and contracts inflows resources (notservices. including the issuance of a purchase order or the signing of a contract creates an encumbrance but does not deferred contribution paid subsequent to the measurement date) related to OPEB will be recognized in OPEB Total $42,678,228 $51,504,079

represent expense as follows:an expenditure for the period, only a commitment to expend resources. Appropriations lapse at of August 31 and encumbrances outstanding at thatand time are either canceled(not or appropriately The net amounts the employer’s balances of deferred outflows inflows of resources including the provided for in the subsequent year’s budget. deferred contribution paid subsequent to the measurement date) related to OPEB will be recognized in OPEB PROSPER INDEPENDENT SCHOOL DISTRICT expense as follows: PROSPER INDEPENDENT SCHOOL DISTRICT F. PREPAID ITEMS NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT TO THE BASIC FINANCIAL STATEMENTS Year ended August 31:NOTES OPEB Expense Amount PROSPER INDEPENDENT SCHOOL DISTRICT FOR THE YEAR ENDED AUGUST 31, 2023 NOTES TO THE BASIC STATEMENTS FOR THE YEAR AUGUST 31, 2023 are for payments made byFINANCIAL the District in the current fiscal year to provide services 2024 Prepaid balances $ENDED (2,836,396) NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 occurring in the subsequent fiscal year, and the amount of prepayments been recognized as 2025 (2,836,032) FOR THEtoYEAR ENDED AUGUST 31, 2023 is has nonspendable fund balance signify that a portion of fund balance not available for other Year OPEB Expense Amount 2026 ended August 31: (1,406,480) 2028 (636,750) expenditures. subsequent 2028 (636,750) 2024 $ (2,836,396) 2027 528,876 Thereafter (2,969,222) 2028 (636,750) Thereafter (2,969,222) 2025 (2,836,032) 2028 (636,750) G. INVENTORIES Thereafter (2,969,222) 2026 (1,406,480) Thereafter (2,969,222) NOTE 14. MEDICARE PART D NOTE 14. MEDICARE PARTmethod D 2027 528,876 The consumption is used to account for inventories of food products, school supplies and

NOTE 14. MEDICARE PART DUnder this method, these items are carried in an inventory account of the athletic equipment.

NOTE MEDICARE PARTDrug, D Improvement, and Modernization Act of 2003, which was effective January The14.

Medicare Prescription The Medicare Prescription Improvement, and Modernization Act of 2003, which was are effective January respective fund atDrug, cost,drug using the first-in, first-out beneficiaries method accounting and subsequently 1, 2006, established prescription coverage for Medicare known as Medicare Part D. One 1, 2006, established prescription drug coverage for Medicare beneficiaries known as Medicare Part D. One The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which was effective January charged to expenditures when consumed.

In the General Fund, reported inventories are offset by a of the provisions of Medicare D allows for the Texas Public School Retired Employee Group Insurance The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which was effective January of the provisions of Medicare D allows for the Texas Public School Retired Employee Group Insurance 1, 2006, established prescription drug coverage for Medicare beneficiaries known as Medicare Part D. One as current expendable financial resources. fund balance reserve indicating that they are unavailable Program (TRS-Care)prescription to receive retiree drug subsidy paymentsbeneficiaries from the federal government to offset certain 1, 2006, established drug coverage for Medicare known as Medicare Part D. One Program (TRS-Care) receive retiree drug subsidy payments the Retired federal government toare offset certain of the provisions of to Medicare D eligible allows for the Texas Publicfrom School Employee Group Insurance TRS-Care participants.

These on-behalf payments recognized prescription drug expenditures of the provisions of Medicarefor D allows for the Texas Public School Retired Employee Group Insurance prescription drug expenditures for eligible TRS-Care participants.

These on-behalf recognized Program (TRS-Care) receive retiree drug subsidy payments from the federal government offset certain oftofood commodities are recorded at market values by payments theAugust Texastoare Department of as equal Inventories revenues and by the District.

For thesupplied year ended 2023, the Program (TRS-Care) to expenditures/expenses receive retiree drug subsidy payments from the federal government to31, offset certain the District.

For the year ended August 31, 2023, the as equal revenues and expenditures/expenses by for eligible TRS-Care participants.

These on-behalf payments are recognized prescription drug expenditures Human Services.

Although commodities are received at no cost, their fair value is supplied by contribution drug madeexpenditures on behalf of the $890,774. for District eligible was TRS-Care participants. These on-behalf payments are recognized prescription contribution made on behalf ofofthe DistrictServices was $890,774. as equal Texas revenues and expenditures/expenses by the For the year ended August Inventory 31, 2023, and the Department Human and District. initially recorded as an expense. as equal revenues and expenditures/expenses by the District. For the year ended August 31, 2023, the contribution made on behalf of the District was $890,774. expenditures are adjusted periodically subsequent to inventory counts.

NOTE 15. INTERFUND BALANCES AND TRANSFERS contribution made on behalf of the District was $890,774.

NOTE 15. INTERFUND BALANCES AND TRANSFERS IH. nterfund balances at August 31, 2023, as follows: NOTE 15.

INTERFUND BALANCES ANDwere TRANSFERS RECEIVABLE AND PAYABLES NOTE 15. INTERFUND BALANCES AND Interfund balances at August 31, 2023, wereTRANSFERS as follows:

Interfund balances at August 31, 2023, were as follows:

Atax dvances to Advances are shown from at face value. The property tax receivable trade atand property receivables InterfundAll balances August 31, 2023, were as follows: Fund at August 31, 2023, Other Funds Other to FundsAdvances from Advances Interfundallowance balances were as follows: is shown at various rates based upon to historical trendsfrom of outstanding property taxes Advances General Fund: Fund Other Funds Advances Other Funds receivable as of August 31, 2023.

Fund Other Funds Other Funds Advances to Advances from Special Revenue Fund $3,466,221 $ 397,558 General Fund: Advances to Advances from General Fund: Fund Other Other Funds Capital Projects F und Fund $3,466,221 11,033 66,914 Special Revenue $ Funds 397,558 Fund Other Funds Other Funds I. INTERFUND RECEIVABLES AND PAYABLES Special Revenue Fund $3,466,221 $ 397,558 General Fund: Fiduciary F und 7,243 Capital Projects Fund 11,033 66,914 General Fund: Capital 11,033 --66,914 $ 901,045 Special Revenue Fund 7,243 $3,466,221 397,558 InternalFiduciary ServiceProjects FFund und Fund Special Revenue Fund $3,466,221 $ classified 397,558 as “Due to/from other funds”. Interfund amounts owed11,033 between66,914 funds are Fiduciary Fund 7,243 Capital Projects Fund Special RShort-term evenue F und : Internal Service Fund 901,045 11,033 66,914 Capital Projects loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve Fiduciary Fund 7,243 Internal Service Fund - 397,558-901,045 General Fund 3,466,221 Special Revenue Fund: Fiduciary Fund 7,243 outstanding account.

Any residual balances between the governmental activities and business-type Internal Service Fund 901,045 Revenue Fund: Capital PSpecial rojects F und : General Fund 397,558 Internal Service Fundin 3,466,221 -the66,914 901,045 activities are reported governmental-wide financial statements as “internal balances” and General Fund 11,033 Special Revenue Fund: General Fund 397,558 3,466,221 Capital Projects Fund: Special Revenue Fund: advances”.

Fiduciary“internal Fund : Projects General Fund 397,558 3,466,221 Capital Fund: General Fund 66,914 397,558 11,033 3,466,221 General Fund 7,243 Capital Projects General FundFund: 66,914 11,033 Fiduciary Fund: Capital Projects Fund: CAPITAL ASSETS IJ.nternal S ervice F und : GeneralFund: Fund 66,914 11,033 Fiduciary 7,243 General Fund 66,914 11,033 General Fund Fund: 901,045 General FundFund: 7,243 Fiduciary Internal Service Fiduciary Fund: Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in TOTAL $7,167,839 $7,167,839 Internal Service General FundFund: - 901,045 7,243 General Fund 7,243 the applicable governmental or business-type-- activities columns in the government-wide financial General Fund 901,045 Internal Service Fund: TOTAL $7,167,839 $7,167,839 Internal Service Fund: TOTAL Fund $7,167,839 $7,167,839 General 901,045 General Fund 901,045 TOTAL $7,167,839 $7,167,839 106| 2023 ANNUAL FINANCIAL REPORT InterfundsCOMPREHENSIVE transfers year ended August 31, 2023 consisted of the following individual amounts: TOTALfor the $7,167,839 $7,167,839 Interfunds transfers for the year ended August 31, 2023 consisted of the following individual amounts: Interfunds transfers for the year ended August 31, 2023 consisted of the following individual amounts:

Fiduciary Fund 7,243 Capital Projects Fund: Internal Fund -11,033 901,045 General Service Fund 66,914 Special Revenue Fiduciary Fund: Fund:NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS General 3,466,221 General Fund Fund 397,558 7,243 Capital Projects Fund: Internal Service Fund: General 11,033 General Fund Fund 66,914 901,045 PROSPER INDEPENDENT SCHOOL DISTRICT Fiduciary TOTALFund: $7,167,839 $7,167,839 NOTES TO THE BASIC FINANCIAL STATEMENTS General Fund 7,243 Internal Service FOR THEAugust YEAR AUGUST 31, 2023individual amounts: Interfunds transfers for theFund: year ended 31,ENDED 2023 consisted of the following General Fund 901,045 TOTALfor the $7,167,839 Transfers to of the Transfers fromindividual amounts: Interfunds transfers year ended August$7,167,839 31, 2023 consisted following

Fund Other Funds Other Funds Interfunds transfers for the year ended August 31, 2023 consisted of the following individual amounts: General Fund: Internal Service Fund Transfers to Transfers from $2,500,000 $ Fund Other Funds Transfers to Transfers from Internal Service Fund:Other Funds Fund Other Funds Other Funds General Fund: General Fund 2,500,000 General Fund: Internal Service Fund $2,500,000 $2,500,000 $2,500,000 $ TOTAL $ Internal Service Fund $2,500,000 Internal Service Fund: E. ENCUMBRANCE ACCOUNTING Internal Service Fund: - to transfer 2,500,000 The General purpose Fund of the $2,500,000 transfer was local funds from the general fund to the property General Fund fund to$2,500,000 2,500,000 TOTAL $2,500,000 insurance internal service set them aside for future The District employs encumbrance accounting,insurance whereby deductibles. encumbrances for goods or purchased TOTAL $2,500,000INDEPENDENT $2,500,000 PROSPER DISTRICT services are documented by purchase orders SCHOOL and contracts.

An encumbrance represents a commitmentNOTES of Board TO appropriation related to unperformed contracts for goods and services. The THE BASIC FINANCIAL STATEMENTS The purpose of the $2,500,000 transfer was to transfer local funds from the general fund to the property issuance of a purchase order or the signing of a contract creates an FORto THE YEAR ENDED AUGUST 31, 2023encumbrance but does not insurance internal service fund set them aside for future insurance deductibles. represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately NOTE 16. DISAGGREGATION OF RECEIVABLES provided for in the subsequent year’s budget.AND PAYABLES Receivables at August 31, 2023, were as follows: F.

PREPAID ITEMS

NOTE 16. DISAGGREGATION OF RECEIVABLES AND PAYABLES Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund balance to signify that a portion of fund balance is not available for other subsequent expenditures.

G. INVENTORIES The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balance reserve indicating that they are unavailable as current expendable financial resources.

Payables Inventories at August 31, were as follows: of 2023, food commodities are recorded at market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

H. RECEIVABLE AND PAYABLES All trade and property tax receivables are shown at face value. The property tax receivable allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

I.

INTERFUND RECEIVABLES AND PAYABLES

Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and NOTE 17. INSURANCE COVERAGE “internal advances”.

Health Care Coverage J. CAPITAL ASSETS The District offers all employees health property, care coverage the TRS Care insurance plan, which isina Capital assets, which includes plant,under equipment, andActive infrastructure assets, are reported th Texas Legislature. statewidethe health coverage program for public education employees established by the 77 applicable governmental or business-type activities columns in the government-wide financial The District contributed $351 per month per enrolled employee to the Plan, and employees, at their option, authorized payroll withholdings to pay the additional cost of premiums for themselves and dependents.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 107 Workers’ Compensation

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023 NOTE 17. INSURANCE COVERAGE Health Care Coverage The District offers all employees health care coverage under the TRS Active Care insurance plan, which is a statewide health coverage program for public education employees established by the 77th Texas Legislature.

The District contributed $351 per month per enrolled employee to the Plan, and employees, at their option, E. ENCUMBRANCE ACCOUNTING authorized payroll withholdings to pay the additional cost of premiums for themselves and dependents.

District employs encumbrance accounting, whereby encumbrances for goods or purchased Workers’The Compensation services are documented by purchase orders and contracts. An encumbrance represents a commitment Board 31, appropriation related to met unperformed contracts for compensation goods and services.

The year endedofAugust 2023, Prosper ISD its statutory workers’ obligations During the issuance of a purchase order or the signing of a contract creates an encumbrance but does not through participation in the TASB Risk Management Fund (the Fund). The Fund was created and is operated PROSPER SCHOOL DISTRICT Appropriations an of expenditure forINDEPENDENT the period, only commitment to the expend under therepresent provisions the Interlocal Cooperation Act,a Chapter 791 of Texasresources.

Government Code. The PROSPER INDEPENDENT SCHOOL DISTRICT lapse at August 31 andTO encumbrances outstanding at that time are either canceled Fund’s Workers’ Compensation Program authorized

by Chapter 504, Texas Labor Code.or appropriately All members NOTES THE is BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS provided in theexecute subsequent year’s budget. the responsibilities of the parties. The participating in theforFund Interlocal Agreements that define FOR THE YEAR ENDED AUGUST 31, 2023 FOR THE YEAR ENDED 31,injured 2023 employees. Transactions Fund provides statutory workers’ compensation benefits toAUGUST its members’ F. PREPAID ITEMSCompensation Program are accounted for in an internal service fund of the District. related to the Workers' The FundPrepaid and itsbalances members higher than expected claims fiscal cost through the purchase of areare forprotected paymentsagainst made by the District in the current year to provide services The and its members are protected against higher than expected claims of cost the purchase of stop Fund loss occurring coverage for any subsequent claim in excess ofyear, the Fund’s self-insured retention $2through million.

The Fund uses in the fiscal and the amount of prepayments has been recognized as stop loss coverage for any claim in excess of the Fund’s self-insured retention of $2 million.

The Fund uses the services of an independent actuarytotosignify determine reserve adequacy andbalance fully funds those reserves.

As of nonspendable fund balance that a portion of fund is not available for other the services of an independent actuary to determine reserve adequacy andforfully funds those reserves.

As of August 31, 2022, the fund carries a discounted reserve of $50,647,775 future development on reported expenditures. subsequent Augustand 31, 2022, that the fund been carries a discounted of $50,647,775 for future development on reported claims claims have incurred but not reserve yet reported. claims and claims that have been incurred but not yet reported.

G. INVENTORIES The Fund engages the services of an independent auditor to conduct a financial audit after the close of each The engages services an independent auditorBoard to conduct a financial audit after close of year. each year Fund on August 31.the The audit isofaccepted by the Fund’s of Trustees in February ofschool thethe following The consumption method is used by to the account forBoard inventories of food products,of suppliesyear. and year on August 31.

The audit is accepted Fund’s of Trustees in February the following The Fund’s audited financial statements asmethod, of August 31, 2022, are available on an the inventory TASB Riskaccount Management athletic equipment.

Under this these items are carried in of the The audited financial statements of August 31, 2022, are available on the TASB Risk Management FundFund’s website and have been filed with theas Texas Department ofmethod Insurance inaccounting Austin. respective fund at cost, using the first-in, first-out of and are subsequently Fund website and have been filed with the Texas Department of Insurance in Austin. charged to expenditures when consumed. In the General Fund, reported inventories are offset by a Changes fund in the workers’ compensation claims liability amounts fiscal 2022 and financial 2023 are resources. represented as in current balance reserve indicating that they liability are unavailable fiscalexpendable 2022 andServices 2023 are Changes in the workers’ compensation claims andrepresented Workers’ below. They include estimated unpaid claims provided amounts

by Claimsin Administrative below. They Solutions include estimated unpaid claims provided by Claims Administrative Services and Workers’ Compensation from participation in their workers compensation plans in prior years.

Inventories of food recorded at market values supplied the years.

Texas Department of Compensation Solutions fromcommodities participationare in their workers compensation plans inby prior Human Services. Although commodities are received at no cost, their fair value is supplied by the Year Ended as Year 31,Year 2022recorded August 31,Ended 2023 Inventory and Texas Department of Human ServicesAugust and initially an Year expense.

Ended August 31, 2022 AugustEnded 31, 2023 expenditures are adjusted periodically subsequent to inventory counts.

August 31, 2022 August 31, 2023 Unpaid claims, beginning of year $740,548 $822,787 Unpaid claims,PAYABLES beginning of year $740,548 $822,787 H. Incurred RECEIVABLE AND claims (including IBNR’S) 417,714 25,436 Unpaid claims, beginning of year $740,548 $822,787 Incurred claims (including IBNR’S) 417,714 25,436 Claim payments (335,475) (295,120) Incurred claims (including IBNR’S) 417,714 25,436 Claim payments (335,475) (295,120) The property tax receivable All Claim trade and property tax receivables are shown at face value.(335,475) payments (295,120) Unpaid claims, end of fiscal year $822,787 $553,103 allowance is shown at various rates based upon historical trends of outstanding property taxes Unpaid claims, end of fiscal year $822,787 $553,103 receivable of August 2023.year Unpaidasclaims, end 31, of fiscal $822,787 $553,103 Unemployment Compensation Pool I. INTERFUND RECEIVABLES Unemployment Compensation Pool AND PAYABLES During the year ended August 31, 2023, Prosper ISD provided unemployment compensation coverage to its Short-term amounts between funds areprovided classified as “Due to/from other funds”.

Interfund During the year ended Augustowed 31, 2023, Prosper ISD unemployment compensation coverage toand its employees through participation in the TASB Risk Management Fund (the Fund).

The Fund was created loans are classified as “Advances to/from other funds”Fund and (the are Fund). offset by a Fund fund was balance reserve employees through participation in the TASB Risk Management The created and is operated under the of the Interlocal Cooperation Act, Chapter 791activities of the Texas Government and business-type account.

Anyprovisions residual balances outstanding between the governmental is operated under the provisions of the Interlocal Cooperation Act, Chapter 791 of the22.005 Texas Government Code.

The Fund’s Unemployment Compensation Program is authorized by Section of the Texas activities areUnemployment reported in theCompensation governmental-wide financial statements as “internal balances” and Code.

The Fund’s Program is authorized by Section 22.005 of the Texas Education“internal Code and Chapter 172 of the Texas Local Government Code.

All members participating in the advances”.

Texasthe Local GovernmentofCode.

All members participating in the Education Code and Chapter 172 ofthat thedefine Fund execute Interlocal Agreements responsibilities the parties.

Fund execute Interlocal Agreements that define the responsibilities of the parties.

J. CAPITAL ASSETS The Fund meets its quarterly obligation to the Texas Workforce Commission. Expenses are accrued monthly The meets itspayment quarterly to the Texas Workforce Commission.

Expenses are accrued until Fund the Capital quarterly hasobligation been made.

Expenses canequipment, be reasonably estimated; therefore, there is monthly no need assets, which includes property, plant, and estimated; infrastructure assets,there are reported in until the quarterly payment has been made.

Expenses can be reasonably therefore, is noended need for specific or aggregate stop loss coverage for the Unemployment Compensation pool.

For the year the applicable governmental or business-type activities columns in the government-wide financial for specific aggregate stopanticipates loss coverage the Unemployment Compensation pool.

For the the contractual year ended August 31, or 2023, the Fund that for Prosper ISD has no additional liability beyond August 31, 2023, the Fund anticipates that Prosper ISD has no additional liability beyond the contractual obligation for payment of contributions. obligationCOMPREHENSIVE for payment of contributions.

108| 2023 ANNUAL FINANCIAL REPORT The Fund engages the services of an independent auditor to conduct a financial audit after the close of each The Fund engages the services of an independent auditor to conduct a financial audit after the close of each

Unemployment Compensation Pool

NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC FINANCIAL STATEMENTS

During the year ended August 31, 2023, Prosper ISD provided unemployment compensation coverage to its employees through participation in the TASB Risk Management Fund (the Fund). The Fund was created and is operated under the provisions of the Interlocal Cooperation Act, Chapter 791 of the Texas Government PROSPER INDEPENDENT SCHOOL DISTRICT Code. The Fund’s Unemployment Compensation Program is authorized

by Section 22.005 of the Texas NOTES TO THE BASIC FINANCIAL STATEMENTS Education Code and Chapter 172 of the Texas Local Government Code. All members participating in the FOR THE YEAR ENDED AUGUST 31, 2023 Fund execute Interlocal Agreements that define the responsibilities of the parties.

The Fund meets its quarterly obligation to the Texas Workforce Commission. Expenses are accrued monthly until the quarterly payment has been made. Expenses can be reasonably estimated; therefore, there is no need for specific or aggregate stop loss coverage for the Unemployment Compensation pool. For the year ended August 31, 2023, the Fund anticipates that Prosper ISD has no additional liability beyond the contractual obligation for payment of contributions.

The Fund engages the services of an independent auditor to conduct a financial audit after the close of each E. year on August 31. ACCOUNTING The audit is accepted by the Fund’s Board of Trustees in February of the following plan ENCUMBRANCE year. The Fund’s audited financial statements as of August 31, 2022, are available on the TASB Risk The Fund District employs encumbrance whereby encumbrances for ingoods or purchased Management website and have been filed accounting, with the Texas Department of Insurance Austin. services are documented by purchase orders and contracts. An encumbrance represents a commitment of BoardPrograms appropriation related to unperformed contracts for goods and services. The Auto, Liability and Property issuance of a purchase order or the signing of a contract creates an encumbrance but does not represent an expenditure the the period, onlyparticipated a commitment expend resources.

During the year ended August 31,for 2023, District in thetofollowing TASB RiskAppropriations Management lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately Fund programs: provided for in PROSPER the subsequent year’s budget.

INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT Auto Liability NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS F. ITEMS AutoPREPAID Physical Damage FOR THE YEAR ENDED AUGUST 31, 2023 Privacy & Information Security FOR THE YEAR ENDED AUGUST 31, 2023 Property Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as School Liability nonspendable fund balance to signify that a portion of fund balance is not available for other The Fundsubsequent was created and is operated under the provision of the Interlocal Cooperation Act, Chapter 791 of expenditures.

The Fund was created and is operated under the provision of Cooperation Act,Agreements Chapter 791that of the Texas Government Code.

All members participating in the the Interlocal Fund execute Interlocal the Texas Government Code.

All members participating in the Fund execute Interlocal Agreements that define the responsibilities of the parties.

G. INVENTORIES define the responsibilities of the parties.

The FundThe purchases stop-loss coverage for to protection catastrophic and products, larger than anticipated claims consumption method is used account against for inventories of food school supplies and The Fund purchases stop-loss coverage formethod, protection against and larger than anticipated claims for its Auto, Liability and Property Thethese terms andcatastrophic limits of the program vary by athletic equipment.

Under programs. this items are carried instop-loss an inventory account of line the for its Auto, Liability andatthe Property programs.

The first-out terms andmethod limits of stop-loss program vary by line coverage.

The Fundfund uses services ofthe an independent actuary to determine the adequacy of reserves.

For respective cost, using first-in, of the accounting and are subsequently The Fund uses services of an anticipates independent actuary toFund, determine the adequacy ofare reserves.

For coverage. ended August 31,the2023, the Fund ISD has reported no additional liability beyond thea the year charged to expenditures when consumed.

In theProsper General inventories offset by the year ended August 31, 2023, the Fund anticipates Prosper ISD has no additional liability beyond contractual obligations for payment of contributions. fund balance reserve indicating that they are unavailable as current expendable financial resources.the contractual obligations for payment of contributions.

The FundInventories engages the of an independent auditor to conduct a financial theDepartment close of each of services food commodities are recorded at market values supplied audit by theafter Texas of The engages the services of an independent auditor to conduct a financial audit after the close ofbyeach plan Fund yearHuman on August 31.

The audit is accepted by the Fund’s Board of Trustees in February of the following Services. Although commodities are received at no cost, their fair value is supplied the plan onFund’s August 31. The is statements accepted byasthe Board of Trustees in expense.

February the following year. year The audited financial ofFund’s August 31, 2022, are available on of the TASB Risk Texas Department ofaudit Human Services and initially recorded as an Inventory and The Fund’s audited financial statements as of August 31, 2022, are available on the TASB Risk year.

Management Fund website and have been filed subsequent with the Texas Department of Insurance in Austin. expenditures are adjusted periodically to inventory counts.

Management Fund website and GOVERNMENTS have been filed with the Texas Department of Insurance in Austin.

NOTE 18. DUE FROM OTHER NOTE 18.

DUE FROM OTHER GOVERNMENTS H. RECEIVABLE AND PAYABLES

The District participates in a variety of federal and state programs from which it receives grants to partially or The District in a variety federal and state programs which receives grants tothrough partially or fully finance certain In addition, the District receives entitlements fromproperty the State the are shown at from face value. it The tax receivable All participates trade andactivities. property taxof receivables fully finance certain activities.

In addition, the District receives entitlements from the State through the School Foundation and Per Capita Programs.

Amounts due from federal and state governments as of August allowance is shown at various rates based upon historical trends of outstanding property taxes School Foundation andofPer Capita Amounts from federal state through governments as ofand August below.

All federal grants due shown below areand passed the TEA are 31, 2023, are summarized receivable as August 31,Programs.

2023.

31, 2023, are summarized below.

All federal grants shown below are passed through the TEA and are reported on the combined financial statements as Due from Other Governments.

Due from Other Governments. reported on the combined financial statements as I. INTERFUND RECEIVABLES AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS

Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in NOTE 19. CONTINGENT LIABILITIES the applicable governmental NOTE 19. CONTINGENT LIABILITIESor business-type activities columns in the government-wide financial The Tax Reform Act of 1986 imposed regulations on tax-exempt bond issues. Governmental bonds issued The Reform Act of imposed on 2023 tax-exempt issues. bondsapplies issued ANNUAL COMPREHENSIVE FINANCIAL REPORT | 109 after Tax August 31, 1986 are1986 subject to the regulations rebate provisions of the Taxbond Reform Act Governmental of 1986. The rebate after August 31, 1986 are subject to the rebate provisions of the Tax Reform Act of 1986.

The rebate applies to earnings from bond issue proceeds investments which exceed bond issue stated interest rates. The exact to earnings from bond issue proceeds investments which exceed bond issue stated interest rates. The exact

BASIC FINANCIAL STATEMENTS | NOTES TO THE BASIC FINANCIAL STATEMENTS

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2023

NOTE 19. CONTINGENT LIABILITIES NOTE NOTE 19.

19. CONTINGENT CONTINGENT LIABILITIES LIABILITIES NOTE 19.

CONTINGENT The Tax Reform Act ofLIABILITIES 1986 imposed regulations on tax-exempt bond issues. Governmental bonds issued The Reform Act imposed on issues. bonds issued The Tax Tax Reform Act of of 1986 imposed regulations on tax-exempt tax-exempt bond issues.

Governmental bondsapplies issued after August 31, 1986 are1986 subject to the regulations rebate provisions of the Taxbond Reform Act Governmental of 1986. The rebate rebate applies after August 31, 1986 are subject to the rebate provisions of the Tax Reform Act of 1986.

The The Tax Reform Act of 1986 imposed regulations on tax-exempt bond issues.

Governmental bonds issued after Augustfrom 31, 1986 subject to the rebate provisions of the Tax Reform of 1986. rebate to earnings bond are issue proceeds investments which exceed bond issue Act stated interestThe rates.

Theapplies exact to earnings from bond issue proceeds investments which exceed bond issue stated interest rates.

The exact rebate applies after August 31, 1986 are subject to the rebate provisions of the Tax Reform Act of 1986.

The to earnings from bond issueis proceeds investments which exceed bond interest rates.

TheAugust exact amount of liability, if any, not known until as long as five years fromissue the stated bond issuance date. At amount of liability, if any, is not known until as long as five years from the bond issuance date.

At August to earnings from bond issue proceeds investments which exceed bond issue stated interest rates.

The exact amount liability, if any, is not known as long bond as five years from 31, 2023,ofthe estimated rebate liability onuntil outstanding series was $-0-.the bond issuance date. At August 31, 2023, the estimated rebate liability on outstanding bond series was $-0-. amount of liability, if any, is not known until as long as five years from the bond issuance date.

At August 31, 2023, the estimated rebate liability on outstanding bond series was $-0-.

31, 20.

2023, the estimated AND rebateCONTINGENCIES liability on outstanding bond series was $-0-.

NOTE LITIGATION NOTE 20.

LITIGATION AND AND CONTINGENCIES E. 20.

ENCUMBRANCE ACCOUNTING NOTE LITIGATION CONTINGENCIES NOTE LITIGATION AND CONTINGENCIES The20.

District is a party to various legal actions none of which is believed by administration to have a material The District is a party to various legal actions accounting, none of which which is believed believed byforadministration administration to have have material District employs whereby encumbrances or purchased The a party condition to variousencumbrance actions none of is by to aa material effectDistrict onThe the isfinancial oflegal the District.

Accordingly, no provision losses for has goods been recorded in the condition of the District.

Accordingly, no provision for losses has been recorded in effect on the financial The District is a party to various legal actions none of which is believed by administration to have a material services are documented by purchase orders and contracts.

An encumbrance represents effect on the financial condition ofstatements the District. no provision for losses has been recorded in the thea accompanying combined financial forAccordingly, such contingencies. accompanying combined financial statements for such contingencies. condition of the District.

Accordingly, no provision for losses has been recorded in the effect on the financial commitment of Board appropriation related to unperformed contracts for goods and services.

The accompanying combined financial statements for such contingencies. accompanying combined financial statements such contingencies.

PROSPER INDEPENDENT DISTRICT of a funding purchase order orfrom thefor signing of SCHOOL ais contract creates an encumbrance does not Minimumissuance foundation received the Agency based primarily upon informationbut concerning PROSPER INDEPENDENT SCHOOL DISTRICT Minimum foundation funding received from the Agency is based primarily upon information concerning PROSPER INDEPENDENT SCHOOL DISTRICT Appropriations represent an expenditure for the period, only a commitment to expend resources.

Minimum foundation funding received from the Agency primarily information concerning average daily attendance at the District's schools which is based compiled by theupon District and supplied to the NOTES TO THE BASIC FINANCIAL STATEMENTS NOTES TO THEfrom BASIC FINANCIAL STATEMENTS average attendance at the District's schools which isnutrition compiled by the District and supplied to the the Minimum foundation funding received the Agency primarily upon information concerning lapse at August 31 and encumbrances outstanding atbased that time are 2023 either canceled orsupplied appropriately schools which is compiled by the District and to average daily daily attendance atfor the District's upon Agency.

Federal funding Food Services under childAUGUST programs is based primarily NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31, Agency.

Federal funding for Food Services under child nutrition programs is based primarily upon the FOR THE YEAR ENDED AUGUST 31, 2023 average daily attendance at the District's schools which is compiled by the District and supplied to provided in theFOR subsequent year’s Agency. and Federal funding for Food under child nutrition is based the number type for of meals served andServices on userbudget. charges as reported to programs the Federalprimarily and stateupon funding THE YEAR ENDED AUGUST 31,USDA. 2023 type meals served and on as to the Federal and funding number and Agency.

Federal funding for grant Food Services under child nutrition is based primarily upon the number and type of of meals served andprograms on user user charges charges as reported reported to programs the USDA. USDA. Federal and state state funding received related to various are based upon periodic reports detailing reimbursable received related to various grant programs are based upon periodic reports detailing reimbursable and type of meals served and on user charges as reported to the USDA. Federal and state funding number F. PREPAID ITEMS received related to various grant are basedto the upon periodic reports detailing reimbursable expenditures made in compliance withprograms program guidelines grantor agencies.

The programs are governed by grant various statutoryguidelines rules and regulations of agencies. the grantors.

Amounts reimbursable received and expenditures made in with program to grantor received related to various are based upon periodic reports detailing expenditures made in compliance compliance withprograms program to the the grantor The programs are governed by various statutoryguidelines rules and regulations of agencies. the grantors.

Amounts received and receivable under these various funding programs are subject to periodic audit and adjustment byreceived the funding The programs are governed by various statutory rules and regulations of the grantors.

Amounts and expenditures made in compliance with program guidelines to the grantor agencies.

Prepaid balances are for payments made by the District in the current fiscal year to provide receivable under these various funding programs are subject to periodic audit and adjustment by the services funding agencies.

To thethese extent, ifsubsequent any, that the District has not complied with all the rules and regulations with receivable under various funding programs are subject to periodic audit and adjustment by the funding occurring in the fiscal year, and the amount of prepayments has been recognized as agencies. To the extent, if any, that the District has not complied with all the rules and regulations with respect tononspendable performance, financial or otherwise, adjustment tocomplied or return of funding monies may be required.

In agencies.

To the extent, if any, that the District has not with all the rules and regulations with fund balance to signify that a portion of fund balance is not available for other respect to performance, financial or otherwise, adjustment to or return of funding monies may be required. In the opinion of the District’s administration, there are no significant contingent liabilities relating to matters of respect to performance, financial or otherwise, adjustment to or return of funding monies may be required.

In expenditures. subsequent the opinion of the District’s administration, there are no significant contingent liabilities relating to matters of compliance and, accordingly, no provision has been made in the accompanying financialrelating statements for such the opinion of the District’s administration, there are no significant contingent liabilities to matters of compliance and, accordingly, no provision has been made in the accompanying financial statements for such contingencies. compliance and, accordingly, no provision has been made in the accompanying financial statements for such G. INVENTORIES contingencies. contingencies.

The Denton Appraisal District and Appraisal are defendants in various The Central consumption method is used to Collin accountCentral for inventories of District food products, school supplies and The Denton Central Appraisal District and Collin Central Appraisal District are defendants in various lawsuits involving the Appraisal propertyUnder values assigned to property located within theinDistrict’s boundaries onvarious which The Denton Central District and Collin Central Appraisal District are defendants in athletic equipment. this method, these items are carried an inventory account of the lawsuits involving the property values assigned to property located within the District’s boundaries on which the District assessesthe property taxes.

The District could be located required to of refund propertyand taxes paid on values lawsuits involving property values assigned to property within the District’s boundaries on which respective fund at cost, using the first-in, first-out method accounting are subsequently the District assesses property taxes. The District could be required to refund property taxes paid on values which were greater than the ultimate final assessed assigned by theproperty court.

Such paid lawsuits could the District assesses property taxes.

The District could required to refund taxes on values charged to expenditures when consumed.

Invaluation thebeGeneral Fund, reported inventories are offset by a which were greater than the ultimate final assessed valuation assigned by the court.

Such lawsuits could continue several years into the future. which were greater than the ultimate final assessed valuation assigned by the court.

Such lawsuits could balance continue fund several years reserve into theindicating future. that they are unavailable as current expendable financial resources. continue several years into the future.

NOTE 21. REVENUES FROM LOCAL AND Inventories of food commodities areINTERMEDIATE recorded at market SOURCES values supplied by the Texas Department of NOTE 21. REVENUES FROM LOCAL AND INTERMEDIATE SOURCES NOTE 21. REVENUES FROM LOCAL AND INTERMEDIATE Human Services. Although commodities are received atSOURCES no cost, their fair value is supplied by the During the current year, revenues from local and intermediate sources consisted of the following: Texas Department of Human Services and initially recorded as an expense.

Inventory and During the current year, revenues from local and intermediate sources consisted of the following: During the current year, local andsubsequent intermediate sources consisted expenditures arerevenues adjustedfrom periodically to inventory counts. of the following: General General

Special Debt Capital Special Debt Capital Special DebtFund Capital Revenue Fund Service Projects Fund Total Revenue Fund Service Fund Projects Fund Total Fund Revenue Fund Fund Projects Fund Total Property taxes $ 156,718,910 $ $Service 82,951,579 $ $ 239,670,489 Property taxes $ 156,718,910 $ $ 82,951,579 $ $ 239,670,489 shown face value. $The property receivable trade and property tax receivables Property All taxes $ 156,718,910 $ are $at 82,951,579 - tax $ 239,670,489 Investment income 7,296,316 140,307 1,891,677 12,951,373 22,279,673 Investment income 7,296,316 140,307 1,891,677 12,951,373 22,279,673 rates based upon historical trends taxes Investment income is shown at various 7,296,316 140,307 1,891,677 12,951,373- property 22,279,673 Food salesallowance 9,778,859 - of outstanding 9,778,859 Food salesreceivable as of August 31, 2023. 9,778,859 9,778,859 Food salesinterest and other 9,778,859 9,778,859 Penalties, Penalties, interest and other Penalties, interest and other tax related income 615,442 276,714 892,156 tax related income RECEIVABLES615,442 276,714 892,156 I.Co-curricular INTERFUND AND PAYABLES tax related student income activities 615,442 276,714 892,156 829,244 4,206,309 5,035,553 Co-curricular student activities 829,244 4,206,309 5,035,553 Co-curricular student activities 829,244 4,206,309 5,035,553 Tuition and fees 2,665,330 2,665,330 Tuition and fees 2,665,330 Short-term amounts owed2,665,330 between funds are classified as “Due- to/from other funds”.

Interfund Tuition and fees 2,665,3302,665,330 Gifts and bequests 792,256792,256 are classified as “Advances other funds” and are -offset by a fund reserve Gifts and loans bequests - to/from 792,256 - balance 792,256 Gifts and account. bequests Any residual balances 792,256 792,256 Facilities rentals 1,265,975 1,265,975 activities -and business-type outstanding between the governmental Facilities rentals 1,265,975 1,265,975 Facilities rentals 1,265,975 Insurance recovery are reported in 1,265,975 76,626 - balances” 76,626 the governmental-wide-- financial statements as “internal and Insuranceactivities recovery 76,626 76,626 Insuranceadvertising recovery 76,626 76,626 Stadium 172,690 172,690 “internal advances”.

Stadium advertising 172,690 172,690 Stadium 172,690 172,690 125 Planadvertising forfeitures 197,131 197,131 125 Plan forfeitures 197,131 197,131 125 Plan forfeitures 197,131 197,131 178,852 11,188190,040 J.Other CAPITAL ASSETS Other 178,852 11,188 190,040 OtherTotal 178,852 11,188 190,040 $ 170,016,516 $ 14,928,919 $ 85,119,970 $ 12,951,373 $ 283,016,778 Total 170,016,516 $ 14,928,919 $ 85,119,970 $ 12,951,373 $ 283,016,778 Capital assets, which $$includes property, plant, equipment, and infrastructure assets, are reported in Total 170,016,516 $ 14,928,919 $ 85,119,970 $ 12,951,373 $ 283,016,778 General Fund H. RECEIVABLE AND PAYABLES Fund

the applicable governmental or business-type activities columns in the government-wide financial NOTE 22. UNEARNED REVENUE NOTE 22. UNEARNED REVENUE NOTE 22. UNEARNED REVENUE 110| 2023 ANNUAL UnearnedCOMPREHENSIVE revenue at year-end FINANCIAL consisted of REPORT the following: Unearned revenue at year-end consisted of the following: Unearned revenue at year-end consisted of the following:

Tuition and fees Gifts and bequests Facilities rentals Insurance recovery Stadium advertising 125 Plan forfeitures Other Total

2,665,330 2,665,330 792,256 792,256 NOTES TO THE BASIC FINANCIAL STATEMENTS | BASIC STATEMENTS 1,265,975 - FINANCIAL 1,265,975 76,626 76,626 172,690 172,690 PROSPER INDEPENDENT PROSPER197,131 INDEPENDENT -SCHOOL SCHOOL DISTRICT DISTRICT 197,131 NOTES THE STATEMENTS NOTES TO TO 178,852 THE BASIC BASIC FINANCIAL FINANCIAL STATEMENTS 11,188 190,040

FOR THE AUGUST 31, FOR$ 170,016,516 THE YEAR YEAR$ ENDED ENDED 31, 2023 2023 14,928,919AUGUST $ 85,119,970 $ 12,951,373

$ 283,016,778

NOTE 22. UNEARNED REVENUE Unearned revenue at year-end consisted of the following:

General Fund

Special Revenue Fund

Total

E. ENCUMBRANCE ACCOUNTING

Athletic Seaon Tickets $ 130,958 $ $ 130,958 The District employs encumbrance accounting, whereby encumbrances for goods or purchased Lunchroom Receipts 736,656 736,656 services are documented by purchase orders and contracts. An encumbrance represents a Non-Edcommitment Communityof Support 87 Board appropriation related-to unperformed contracts for goods 87 and services. The issuance of a purchase order or the signing of a contract creates an encumbrance 69,027 69,027 but does not State Instructional Materials represent an expenditure for the period, only a commitment to expend resources. Appropriations

Total $ 130,958 805,770 $ canceled 936,728or appropriately lapse at August 31 and encumbrances outstanding$ at that time are either

provided for in the subsequent year’s budget.

NOTE 23. GENERAL FUND FEDERAL SOURCE REVENUES F. PREPAID ITEMS

ALN Total Grant ALN Total Grant Program or Source Number Amount or Entitlement Prepaid balances are for payments made by the District in the current fiscal year to provide services Program or Source Number Amount or Entitlement General Fund: occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as General Fund:

Impact Aid 84.041 $ 420 $ 420 nonspendable fund a portion available for other Impact Aidbalance to signify that 84.041 $ of fund 420 balance $ is not420

Emergency Connectivity Fund 32.009 1,299,150 1,299,150 expenditures. subsequentEmergency Connectivity Fund 32.009 1,299,150 1,299,150 Excise Tax Reimbursement N/A 248,357 248,357 Excise Tax Reimbursement N/A 248,357 248,357 Medicaid Reimbursement N/A 1,212,073 1,212,073 G. INVENTORIES Medicaid Reimbursement N/A 1,212,073 1,212,073 E-rate 812,216 812,216 E-rateReimbursement Reimbursement N/A N/A812,216 812,216 Indirect Costs N/A 1,539,671 1,539,671 The consumption method is used to account for inventories of food products, school supplies and Indirect Costs N/A 1,539,671 1,539,671

Total General $5,111,887 $5,111,887 athletic equipment.

Under thisFund method, these items are carried in $5,111,887 an inventory account of the Totalfor for General Fund $5,111,887 respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to when consumed.

In the General Fund,BY reported inventories are offset by a FUNCTION NOTE 24. EXCESS OFexpenditures EXPENDITURES OVER APPROPRIATIONS fund balance reserve indicating that they are unavailable as current expendable financial resources.

The Texas Education Agency requires the budgets for the Governmental fund types to be filed with the Texas of food commodities values supplied byunder the Texas of EducationInventories Agency. The budget should notare berecorded exceededatinmarket any functional category TEADepartment requirements.

Human Services.

Although commodities are categories received atfor nothe cost, fairAugust value is Expenditures exceeded appropriations in no functional yeartheir ended 31,supplied 2023. by the Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

NOTE 25. SHARED SERVICE ARRANGEMENTS H. AND The RECEIVABLE District participates in aPAYABLES shared services arrangement which provides a regional day school for the deaf to several member districts. Although the District contributes to the shared services arrangement based on its are shown at face value.

The property taxnot receivable All trade and property receivables participation, the District does not tax account for revenues or expenditures in this program and does disclose is shown at variousThe rates basedneither upon historical trends of outstanding property taxes them in allowance these financial statements.

District has a joint ownership interest in fixed assets as ofagent, August 31,does 2023. purchasedreceivable by the fiscal nor the District have a net equity interest in the fiscal agent. The fiscal agent is neither accumulating significant resources nor fiscal exigencies that would give rise to a future I. INTERFUND RECEIVABLES ANDISD. PAYABLES additional benefit or burden to Prosper The fiscal agent manager is responsible for all financial activities of the shared services arrangement. During the year ended August 31, 2023, the District incurred amounts owed are classified as “Due to/from other funds”. Interfund $201,184Short-term in costs in the regional day between school forfunds the deaf. loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual NOTE 26. SUBSEQUENT EVENTbalances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

Management has reviewed events subsequent to August 31, 2023 through January 2, 2024, which is the date the financial statements were available to be issued. No subsequent events were identified that were required J. to beCAPITAL recorded orASSETS disclosed in the financial statements.

CapitalPERIOD assets, which includes property, plant, equipment, and infrastructure assets, are reported in NOTE 27. PRIOR ADJUSTMENTS the applicable governmental or business-type activities columns in the government-wide financial 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 111

additional benefit or burden to Prosper ISD. The fiscal agent manager is responsible for all financial activities of the shared services arrangement. During the year ended August 31, 2023, the District incurred | NOTES BASIC FINANCIAL STATEMENTS BASIC FINANCIAL STATEMENTS $201,184 in costs in the regionalTO dayTHE school for the deaf.

NOTE 26. SUBSEQUENT EVENT

PROSPER INDEPENDENT SCHOOL DISTRICT

Management has reviewed events to August 31, 2023 through January 2, 2024, which is the date NOTES TOsubsequent THE BASIC FINANCIAL STATEMENTS the financial statements were available to be issued.

No subsequent events identified that were required FOR THE YEAR ENDED AUGUST 31,were 2023 to be recorded or disclosed in the financial statements.

NOTE 27. PRIOR PERIOD ADJUSTMENTS During the fiscal year ended August 31, 2023, the District implemented a new GASB Statement (No. 96) relating to subscription-based information technology arrangements (SBITAs).

As part of the implementation, the District recorded a prior period adjustment for $1,238,934 increasing the beginning net position of Governmental Activities. The net prior period adjustment was the result of an increase in capital assets for the right-to-use asset of $2,047,091 offset by an increase in long-term debt for the subscription liability of $808,157. See Note 9.

E. ENCUMBRANCE ACCOUNTING the employs fiscal year ended August 31, 2023, whereby the District recorded a prior for In addition, Theduring District encumbrance accounting, encumbrances for period goods adjustment or purchased additionalservices right-to-use leases identified the orders current and fiscalcontracts. year that should have been recorded in thea are documented by during purchase An encumbrance represents prior fiscal year whenof GASB No. 87 was implemented. adjustment increased the beginning commitment BoardStatement appropriation related to unperformedThe contracts for goods and services.

The net position of Governmental Activities issuance of a purchase order by or $29,425. the signing of a contract creates an encumbrance but does not represent an expenditure for the period, only a commitment to expend resources. Appropriations lapse at August 31 and encumbrances outstanding at that time are either canceled or appropriately provided for in the subsequent year’s budget.

F.

PREPAID ITEMS Prepaid balances are for payments made by the District in the current fiscal year to provide services occurring in the subsequent fiscal year, and the amount of prepayments has been recognized as nonspendable fund balance to signify that a portion of fund balance is not available for other subsequent expenditures.

G. INVENTORIES The consumption method is used to account for inventories of food products, school supplies and athletic equipment. Under this method, these items are carried in an inventory account of the respective fund at cost, using the first-in, first-out method of accounting and are subsequently charged to expenditures when consumed. In the General Fund, reported inventories are offset by a fund balance reserve indicating that they are unavailable as current expendable financial resources.

Inventories of food commodities are recorded at market values supplied by the Texas Department of Human Services. Although commodities are received at no cost, their fair value is supplied by the Texas Department of Human Services and initially recorded as an expense. Inventory and expenditures are adjusted periodically subsequent to inventory counts.

H. RECEIVABLE AND PAYABLES All trade and property tax receivables are shown at face value. The property tax receivable allowance is shown at various rates based upon historical trends of outstanding property taxes receivable as of August 31, 2023.

I.

INTERFUND RECEIVABLES AND PAYABLES Short-term amounts owed between funds are classified as “Due to/from other funds”. Interfund loans are classified as “Advances to/from other funds” and are offset by a fund balance reserve account. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as “internal balances” and “internal advances”.

J.

CAPITAL ASSETS Capital assets, which includes property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial

112| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

REQUIRED SUPPLEMENTARY INFORMATION

Required Supplementary Information (Unaudited)

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 113

REQUIRED SUPPLEMENTARY INFORMATION

114| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

REQUIRED SUPPLEMENTARY INFORMATION

EXHIBIT

F-1 PROSPER INDEPENDENT SCHOOL DISTRICT BUDGETARY COMPARISON SCHEDULE - GENERAL FUND FOR THE YEAR ENDED AUGUST 31, 2023 Actual Amounts (GAAP BASIS)

Budgeted Amounts Original

REVENUES:

Total Local and Intermediate Sources State Program Revenues Federal Program Revenues

$

Total Revenues EXPENDITURES: Current:

Instruction Instructional Resources and Media Services Curriculum and Instructional Staff Development Instructional Leadership School Leadership Guidance, Counseling, and Evaluation Services Health Services Student (Pupil) Transportation Food Services Extracurricular Activities General Administration Facilities Maintenance and Operations Security and Monitoring Services Data Processing Services Community Services

Debt Service:

Principal on Long-Term Liabilities Interest on Long-Term Liabilities

Capital Outlay:

Facilities Acquisition and Construction

Intergovernmental:

Contracted Instructional Services Between Schools Payments to Fiscal Agent/Member Districts of SSA Payments to Juvenile Justice Alternative Ed. Prg. Other Intergovernmental Charges

Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures

170,016,516 98,780,060 5,117,367

250,479,000

261,838,174

273,913,943

12,075,769

163,526,000 3,160,000 6,463,000 1,777,000 12,648,000 4,282,000 2,229,000 10,092,000 70,000 8,137,000 8,377,000 23,670,000 2,828,000 8,700,000 7,000

151,978,491 3,342,571 5,183,854 2,145,515 13,094,073 6,483,222 2,448,111 11,360,505 236,981 8,653,134 8,561,472 25,765,972 4,102,119 10,583,920 21,759

150,929,739 3,019,544 4,460,814 1,567,198 12,755,771 6,325,081 2,074,269 10,649,233 160,121 8,279,664 7,986,629 24,798,821 3,581,802 8,081,908 2,295

1,048,752 323,027 723,040 578,317 338,302 158,141 373,842 711,272 76,860 373,470 574,843 967,151 520,317 2,502,012 19,464

623,000 50,000

1,350,620 72,380

833,230 72,380

517,390 -

735,000

1,533,036

1,363,339

169,697

25,000 185,000 1,500,000

390,040 216,184 40,040 1,520,000

233,023 201,184 1,415 1,477,157

157,017 15,000 38,625 42,843

259,084,000

259,083,999

248,854,617

10,229,382

(8,605,000)

2,754,175

25,059,326

22,305,151

-

(2,500,000)

12,982 935,558 (2,500,000)

12,982 935,558 -

-

(2,500,000)

(1,551,460)

948,540 23,253,691

Total Other Financing Sources (Uses)

$

(Negative)

163,574,238 $ 95,013,936 3,250,000

Sale of Real and Personal Property Proceeds of Right-to-Use Leases and Subscriptions Transfers Out (Use)

Fund Balance - August 31 (Ending)

Final

161,578,000 $ 88,001,000 900,000

OTHER FINANCING SOURCES (USES):

Net Change in Fund Balances Fund Balance - September 1 (Beginning)

Variance With Final Budget Positive or

(8,605,000)

254,175

23,507,866

128,789,676

128,789,676

128,789,676

120,184,676 $

129,043,851

$

152,297,542

$

6,442,278 3,766,124 1,867,367

$

23,253,691

The notes to the financial statements are an integral part of this statement.

The notes to the financial statements are an integral part of this statement.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 115

REQUIRED SUPPLEMENTARY INFORMATION

EXHIBIT

G-1 PROSPER INDEPENDENT SCHOOL DISTRICT SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHER RETIREMENT SYSTEM OF TEXAS FOR THE YEAR ENDED AUGUST 31, 2023

District's Proportion of the Net Pension Liability (Asset)

FY 2022 Plan Year 2021

FY 2021 Plan Year 2020

0.10926694%

0.09060689%

0.073769385%

64,868,973 $

23,074,932 $

39,509,378

97,526,529

41,282,567

73,782,583

$

162,395,502 $

64,357,499 $

113,291,961

$

143,084,915 $

123,382,454 $

100,773,762

District's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll

45.34%

18.70%

39.21%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability

75.62%

88.79%

75.54%

District's Proportionate Share of Net Pension Liability (Asset)

$

FY 2023 Plan Year 2022

State's Proportionate Share of the Net Pension Liability (Asset) Associated with the District Total

District's Covered Payroll

Note: GASB Codification, Vol. 2, P20.183 requires that the information on this schedule be data from the period corresponding with the periods covered as of the measurement dates of August 31, 2022 for year 2023, August 31, 2021 for year 2022, August 31, 2020 for year 2021, August 31, 2019 for year 2020, August 31, 2018 for year 2019, August 31, 2017 for year 2018, August 31, 2016 for year 2017, August 31, 2015 for year 2016 and August 31, 2014 for year 2015.

This schedule shows only the years for which this information is available. Additional information will be added until 10 years of data are available and reported.

116| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

REQUIRED SUPPLEMENTARY INFORMATION

EXHIBIT

CONTINUED

G-1 EXHIBIT

FY 2020 Plan Year 2019

FY 2019 Plan Year 2018

FY 2018 Plan Year 2017

FY 2017 Plan Year 2016

FY 2016 Plan Year 2015

FY 2015 Plan Year 2014

0.0751381%

0.0528038%

0.0482534%

0.0416989%

0.0392781%

0.0250495%

39,059,118 $

29,064,502 $

15,428,829 $

15,757,399 $

13,884,286 $

6,691,068

58,373,725

51,087,882

27,192,871

27,928,117

23,590,050

18,462,762

$

97,432,843 $

80,152,384 $

42,621,700 $

43,685,516 $

37,474,336 $

25,153,830

$

84,452,678 $

62,082,957 $

54,445,299 $

45,549,126 $

39,171,792 $

34,639,153

46.25%

46.81%

28.34%

34.59%

35.44%

19.32%

75.24%

73.74%

82.17%

78.00%

78.43%

83.25%

$

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 117

REQUIRED SUPPLEMENTARY INFORMATION

EXHIBIT

G-2 PROSPER INDEPENDENT SCHOOL DISTRICT SCHEDULE OF DISTRICT'S CONTRIBUTIONS FOR PENSIONS TEACHER RETIREMENT SYSTEM OF TEXAS FOR FISCAL YEAR 2023 2023

Contractually Required Contribution

$

Contribution in Relation to the Contractually Required Contribution Contribution Deficiency (Excess) District's Covered Payroll Contributions as a Percentage of Covered Payroll

2022

2021

6,270,752 $

5,022,938 $

3,858,804

(6,270,752)

(5,022,938)

(3,858,804)

$

- $

- $

-

$

165,339,758 $

143,084,915 $

123,382,454

3.79%

3.51%

Note: GASB Codification, Vol. 2, P20.183 requires that the data in this schedule be presented as of the District's respective fiscal years as opposed to the time periods covered by the measurement dates ending August 31 of the preceding year.

This schedule shows only the years for which this information is available. Additional information will be added until 10 years of data are available and reported.

118| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

78

3.12%

REQUIRED SUPPLEMENTARY INFORMATION

G-2

EXHIBIT

CONTINUED

EXHIBIT G-2

2020 $

2019

2018

2017

2016

2015

3,039,134 $

2,629,915 $

1,778,827 $

1,882,781 $

1,577,437 $

1,379,578

(3,039,134)

(2,629,915)

(1,778,827)

(1,882,781)

(1,577,437)

(1,379,578)

$

- $

- $

- $

- $

- $

-

$

100,773,762 $

84,452,678 $

62,082,957 $

54,445,299 $

45,549,126 $

39,171,792

3.11%

2.87%

3.46%

3.46%

3.02%

79

3.52%

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 119

REQUIRED SUPPLEMENTARY INFORMATION

EXHIBIT

G-3 PROSPER INDEPENDENT SCHOOL DISTRICT SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THE NET OPEB LIABILITY TEACHER RETIREMENT SYSTEM OF TEXAS FOR THE YEAR ENDED AUGUST 31, 2023 FY 2023 Plan Year 2022

FY 2022 Plan Year 2021

FY 2021 Plan Year 2020

0.14078832%

0.12183422%

0.10239334%

District's Proportion of the Net Liability (Asset) for Other Postemployment Benefits District's Proportionate Share of Net OPEB Liability (Asset)

$

33,710,364 $

46,996,905 $

38,924,336

41,121,348

62,965,379

52,304,977

$

74,831,712 $

109,962,284 $

91,229,313

$

143,084,915 $

123,382,454 $

100,773,762

District's Proportionate Share of the Net OPEB Liability (Asset) as a Percentage of its Covered Payroll

23.56%

38.09%

38.63%

Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability

11.52%

6.18%

4.99%

State's Proportionate Share of the Net OPEB Liability (Asset) Associated with the District Total

District's Covered Payroll

Note: GASB Codification, Vol. 2, P50.238 states that the information on this schedule should be determined as of the measurement date.

The amounts for FY 2023 are for the measurement date of August 31, 2022. The amounts reported for FY 2022 are for measurement date August 31, 2021. The amounts reported for FY 2021 are for the measurement date of August 31, 2020. The amounts for FY 2020 are for the measurement date August 31, 2019. The amounts for FY 2019 are for the measurement date August 31, 2018. The amounts for FY 2018 are based on the August 31, 2017 measurement date.

This schedule shows only the years for which this information is available. Additional information will be added until 10 years of data are available and reported.

120| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

REQUIRED SUPPLEMENTARY INFORMATION

EXHIBIT

G-3

FY 2020 Plan Year 2019

FY 2019 Plan Year 2018

FY 2018 Plan Year 2017

0.0901456%

0.0690394%

0.0604263%

42,630,943 $

34,471,991

56,646,988

56,248,818

45,136,147

$

99,277,931 $

90,720,809 $

71,413,277

$

84,452,678 $

62,082,957

54,445,299

CONTINUED

$

$

$

26,277,130

50.48%

55.53%

48.26%

2.66%

1.57%

0.91%

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 121

REQUIRED SUPPLEMENTARY INFORMATION

EXHIBIT

G-4 PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT

SCHEDULESCHEDULE OF DISTRICT'S CONTRIBUTIONS FOR OTHER POSTEMPLOYMENT BENEFITS (OPEB) OF DISTRICT'S CONTRIBUTIONS FOR OTHER POSTEMPLOYMENT BENEFITS (OPEB) TEACHER RETIREMENT SYSTEM OF TEXAS TEACHER RETIREMENT SYSTEM OF TEXAS FOR FISCAL YEAR 2023 YEAR 2023 FOR FISCAL 2023

ontractuallyContractually Required Contribution Required Contribution

$

ontributionContribution in Relation tointhe Contractually Required Contribution Relation to the Contractually Required Contribution ContributionContribution Deficiency (Excess) Deficiency (Excess)

istrict's Covered Payroll District's Covered Payroll

$ $

ontributionsContributions as a Percentage Covered Payroll as aofPercentage of Covered Payroll

2023

2022

2022

2021

2021

1,330,153 $1,330,1531,142,343 $1,142,343 950,230 $ $ $

950,230

(1,330,153) (1,330,153) (1,142,343) (1,142,343)(950,230)

(950,230)

$

- $

- $

- $

- $

-

123,382,454 123,382,454 165,339,758 $ 143,084,915 $ $ 165,339,758 $ 143,084,915 $ 0.80%

0.80%

0.80%

0.80%

0.77%

Note: GASBNote: Codification, Vol. 2, P50.238 that requires the data that in this be presented as presented of the District's respective years asfiscal years as GASB Codification, Vol.requires 2, P50.238 theschedule data in this schedule be as of the District'sfiscal respective pposed to the time periods covered by the measurement dates ending dates August 31 ofAugust the preceding year. opposed to the time periods covered by the measurement ending 31 of the preceding year.

nformation in this schedule should be provided for the years where available. years of data should presented.

Information in this schedule should only be provided only for the data yearsiswhere data Eventually is available.10Eventually 10 years ofbe data should be presented.

122| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

-

0.77%

REQUIRED SUPPLEMENTARY INFORMATION

EXHIBIT

CONTINUED

G-4 EXHIBIT G-4

2020 $

2019

2018

778,318 $

639,784 $

476,273

(778,318)

(639,784)

(476,273)

$

- $

- $

-

$

100,773,762 $

84,452,678 $

62,082,957

0.77%

0.76%

0.77%

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 123

REQUIRED SUPPLEMENTARY INFORMATION

124| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

REQUIRED SUPPLEMENTARY INFORMATION

Notes to Required Supplementary Information

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 125

REQUIRED SUPPLEMENTARY INFORMATION

126| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION | REQUIRED SUPPLEMENTARY INFORMATION

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED AUGUST 31, 2023 PENSION LIABILITY: Changes of benefit terms: There were no changes of benefit terms that affected measurement of the total pension liability during the measurement period.

Changes of assumptions: The following were changes to the actuarial assumptions or other inputs that affected measurement of the total pension liability since the prior measurement period: •

The discount rate changed from 7.25 percent as of August 31, 2021 to 7.00 percent as of August 31, 2022. This change increased the total pension liability.

OPEB LIABILITY: Changes of benefit terms: There were no changes in benefit terms since the prior measurement date.

Changes of assumptions: The following were changes to the actuarial assumptions or other inputs that affected measurement of the Total OPEB liability since the prior measurement period: •

The discount rate changed from 1.95 percent as of August 31, 2021 to 3.91 percent as of August 31, 2022. This change decreased the Total OPEB Liability.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 127 84

OTHER SUPPLEMENTARY INFORMATION

128| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OTHER SUPPLEMENTARY INFORMATION

Other Supplementary Information

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 129

OTHER SUPPLEMENTARY INFORMATION

130| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OTHER SUPPLEMENTARY INFORMATION

Combining and Individual Fund Statements and Schedules

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 131

OTHER SUPPLEMENTARY INFORMATION | COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

EXHIBIT

H-1 PROSPER INDEPENDENT SCHOOL DISTRICT COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS AUGUST 31, 2023 ESEA I, A Improving Basic Program

ASSETS Cash and Cash Equivalents Due from Other Governments Due from Other Funds Other Receivables Prepayments Total Assets LIABILITIES Accounts Payable Due to Other Funds Due to Student Groups Unearned Revenue Total Liabilities

132| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

IDEA - Part B Preschool

National Breakfast and Lunch Program

$

- $ 4,038 -

- $ 457,139 -

-

$

3,351,966 72,228 280,891 2,160 -

$

4,038 $

457,139 $

-

$

3,707,245

$

- $ 4,038 -

- $ 457,139 -

-

$

10,382 9,926 1,025,086 736,656

4,038

457,139

-

FUND BALANCES Nonspendable Fund Balance: Prepaid Items Restricted Fund Balance: Federal or State Funds Grant Restriction Other Restricted Fund Balance Unassigned Fund Balance Total Fund Balances Total Liabilities and Fund Balances

IDEA - Part B Formula

$

1,782,050

-

-

-

-

-

-

-

1,925,195 -

-

-

-

1,925,195

4,038 $

457,139 $

-

$

3,707,245

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES | OTHER SUPPLEMENTARY INFORMATION

H-1

EXHIBIT

CONTINUED

Career and Technical Basic Grant

ESEA II,A Training and Recruiting

Title III, A English Lang.

Acquisition

ESSER III TCLAS ARP Act

ESSER II CRRSA Act Supplemental

ESSER III ARP Act

ESSER-SUPP

IDEA B Formula ARP Act

$

- $ 3,952 -

- $ 47,494 -

- $ 21,366 12,050

- $ 12,958 -

-

$

- $ 90,512 -

- $ 2,366,633 -

50,318 -

$

3,952 $

47,494 $

33,416 $

12,958 $

-

$

90,512 $

2,366,633 $

50,318

$

- $ 3,952 -

920 $ 46,574 -

- $ 33,416 -

- $ 12,958 -

-

$

1,113 $ 89,399 -

- $ 2,366,633 -

50,318 -

3,952

47,494

33,416

12,958

-

90,512

2,366,633

50,318

-

-

12,050

-

-

-

-

-

-

-

(12,050)

-

-

-

-

-

-

-

-

-

-

-

-

-

3,952 $

47,494 $

33,416 $

12,958 $

-

90,512 $

2,366,633 $

50,318

$

$

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 133

OTHER SUPPLEMENTARY INFORMATION | COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

EXHIBIT

CONTINUED

H-1 PROSPER INDEPENDENT SCHOOL DISTRICT COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS AUGUST 31, 2023 IDEA B Preschool ARP Act

ASSETS Cash and Cash Equivalents Due from Other Governments Due from Other Funds Other Receivables Prepayments Total Assets LIABILITIES Accounts Payable Due to Other Funds Due to Student Groups Unearned Revenue

ESEA Title IV Part A

Visually Impaired SSVI

$

- $ 2,398 -

2,695 $ -

- $ 3,571 -

172 -

$

2,398 $

2,695 $

3,571 $

172

$

- $ 2,398 -

- $ 2,695 -

- $ 3,571 -

172 -

2,398

2,695

3,571

172

-

-

-

-

-

-

-

-

-

-

-

-

2,398 $

2,695 $

3,571 $

172

Total Liabilities FUND BALANCES Nonspendable Fund Balance: Prepaid Items Restricted Fund Balance: Federal or State Funds Grant Restriction Other Restricted Fund Balance Unassigned Fund Balance Total Fund Balances Total Liabilities and Fund Balances

Summer School LEP

$

134| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES | OTHER SUPPLEMENTARY INFORMATION

EXHIBIT

CONTINUED

H-1

Non-Ed. Community Based Support

State Instructional Materials

Other State Special Revenue Funds

Campus Activity Funds

Childrens Health

Prosper Education Foundation

Total Nonmajor Governmental Funds

$

87 $ -

26,822 $ 374,631 45,932

- $ 223,328 -

2,561,730 $ 116,667 -

501,188 $ -

266,481 $ -

$

87 $

447,385 $

223,328 $

2,678,397 $

501,188 $

266,481 $ 10,899,407

$

- $ 87

378,358 $ 69,027

11,000 $ 212,328 -

70,353 $ 170,501 -

-

87

447,385

223,328

240,854

-

45,932

-

-

(45,932)

-

2,437,543 -

501,188 -

256,975 -

1,925,195 3,195,706 (57,982)

-

-

-

2,437,543

501,188

256,975

5,120,901

447,385 $

223,328 $

2,678,397 $

501,188 $

266,481 $ 10,899,407

$

87 $

-

$

6,711,141 3,730,566 397,558 2,160 57,982

9,131 $ 375 -

481,429 3,466,221 1,025,086 805,770

-

9,506

5,778,506

-

-

57,982

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 135

OTHER SUPPLEMENTARY INFORMATION | COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

EXHIBIT

H-2 PROSPER INDEPENDENT SCHOOL DISTRICT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED AUGUST 31, 2023 ESEA I, A Improving Basic Program

REVENUES: Total Local and Intermediate Sources State Program Revenues Federal Program Revenues

$

Total Revenues EXPENDITURES: Current: Instruction Instructional Resources and Media Services Curriculum and Instructional Staff Development Instructional Leadership School Leadership Guidance, Counseling, and Evaluation Services Health Services Student (Pupil) Transportation Food Services Extracurricular Activities General Administration Facilities Maintenance and Operations Security and Monitoring Services Community Services Total Expenditures

IDEA - Part B Formula

IDEA - Part B Preschool

National Breakfast and Lunch Program

- $ 76,117

- $ 2,755,944

- $ 10,000

9,919,166 16,183 1,524,327

76,117

2,755,944

10,000

11,459,676

66,380 6,741 2,996 -

83,901 653,328 2,018,715 -

10,000 -

10,564,671 -

76,117

2,755,944

10,000

10,564,671

Net Change in Fund Balance

-

-

-

895,005

Fund Balance - September 1 (Beginning)

-

-

-

1,030,190

Fund Balance - August 31 (Ending)

136| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

$

-

$

-

$

-

$

1,925,195

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES | OTHER SUPPLEMENTARY INFORMATION

H-2

EXHIBIT

CONTINUED

EXHIBIT H-2 (Cont'd)

Career and Technical Basic Grant $

$

ESEA II,A Training and Recruiting

Title III, A

ESSER III TCLAS ARP Act

English Lang.

Acquisition

ESSER II CRRSA Act Supplemental

IDEA B Formula ARP Act

- $ 49,952 49,952

- $ 146,756 146,756

- $ 30,604 30,604

26,974 26,974

41,160 8,792 49,952

30,450 116,306 146,756

30,604 30,604

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

$

-

$

-

$

-

$

ESSER-SUPP

- $ 26,974 26,974

-

-

ESSER III ARP Act

8 8

8

8

$

-

$

- $ 241,857 241,857

- $ 5,893,943 5,893,943

195,783 195,783

241,857 241,857

4,055,751 3,980 1,120,505 57,801 184,183 230,554 241,169 5,893,943

195,783 195,783

-

$

-

$

-

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 137

OTHER SUPPLEMENTARY INFORMATION | COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

EXHIBIT

CONTINUED

H-2 PROSPER INDEPENDENT SCHOOL DISTRICT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED AUGUST 31, 2023 IDEA B Preschool ARP Act

REVENUES: Total Local and Intermediate Sources State Program Revenues Federal Program Revenues

$

Summer School LEP

ESEA Title IV Part A

Visually Impaired SSVI

- $ 2,398

- $ 35,055

- $ 3,571

4,110 -

2,398

35,055

3,571

4,110

605 669 1,124 -

4,649 27,711 2,695 -

3,571 -

2,575 1,535 -

2,398

35,055

3,571

4,110

Net Change in Fund Balance

-

-

-

-

Fund Balance - September 1 (Beginning)

-

-

-

-

Total Revenues EXPENDITURES: Current: Instruction Instructional Resources and Media Services Curriculum and Instructional Staff Development Instructional Leadership School Leadership Guidance, Counseling, and Evaluation Services Health Services Student (Pupil) Transportation Food Services Extracurricular Activities General Administration Facilities Maintenance and Operations Security and Monitoring Services Community Services Total Expenditures

Fund Balance - August 31 (Ending)

138| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

$

-

$

-

$

-

$

-

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES | OTHER SUPPLEMENTARY INFORMATION

H-2

EXHIBIT

CONTINUED

Non-Ed. Community Based Support $

$

-

State Instructional Materials $

Other State Special Revenue Funds

Campus Activity Funds

Childrens Health

Prosper Education Foundation

Total Nonmajor Governmental Funds

- $ 1,205,226 -

- $ 225,078 -

4,216,309 $ -

251,188 $ -

542,256 $ -

14,928,919 1,450,597 10,993,289

-

1,205,226

225,078

4,216,309

251,188

542,256

27,372,805

-

1,205,226 -

16,943 11,000 197,135 -

4,219,531 -

-

180,138 2,096 166,951 33,833 6,264 12,000 69,523 6,317

5,966,617 6,076 2,120,002 34,957 67,061 2,398,681 230,554 27,711 10,567,366 4,231,531 69,523 241,169 197,135 6,317

-

1,205,226

225,078

4,219,531

-

477,122

26,164,700

-

-

-

(3,222)

251,188

65,134

1,208,105

-

-

-

2,440,765

250,000

191,841

3,912,796

2,437,543 $

501,188 $

256,975 $

5,120,901

-

$

-

$

-

$

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 139

OTHER SUPPLEMENTARY INFORMATION | COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

EXHIBIT

H-3 PROSPER INDEPENDENT SCHOOL DISTRICT PROSPER INDEPENDENT SCHOOL DISTRICT COMBINING STATEMENT OF NET POSITION COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDSFUNDS INTERNAL SERVICE AUGUST 31, 202331, 2023 AUGUST

ASSETSASSETS Current Assets: Current Assets: Cash andCash Cashand Equivalents Cash Equivalents Investments Current Investments - Current Due fromDue Other Funds from Other Funds

Workers Workers Property Property Total Total Compensation InsuranceInsurance Internal Internal Compensation InsuranceInsurance Service Funds Service Funds

$

620,568 $ $ - 620,568 $ 620,568 $ $ 620,568 2,500,336 2,500,3362,500,3362,500,336 901,045 901,045 - 901,045 901,045 1,521,6131,521,613 2,500,3362,500,3364,021,9494,021,949

Total Assets Total Assets LIABILITIES LIABILITIES Current Liabilities: Current Liabilities: AccountsAccounts Payable Payable Claims Payable Claims Payable

8,649 8,649 250,000 250,000

-

-

8,649 8,649 250,000 250,000

Total Current Total Liabilities Current Liabilities NonCurrent Liabilities: NonCurrent Liabilities: Claims Payable Claims Payable

258,649 258,649

-

-

258,649 258,649

303,103 303,103

-

-

303,103 303,103

Total Noncurrent Liabilities Total Noncurrent Liabilities

303,103 303,103

-

-

303,103 303,103

Total Liabilities Total Liabilities

561,752 561,752

-

-

561,752 561,752

NET POSITION NET POSITION Unrestricted Net Position Unrestricted Net Position

959,861 959,861 2,500,3362,500,3363,460,1973,460,197

Total NetTotal Position Net Position

140| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

$

959,861 $ 2,500,336 $ 3,460,197 $ 959,861 $ 2,500,336 $ 3,460,197

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES | OTHER SUPPLEMENTARY INFORMATION

EXHIBIT

H-4 PROSPER INDEPENDENT SCHOOL DISTRICT COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED AUGUST 31, 2023 Workers Compensation Insurance

Property Insurance

Total Internal Service Funds

OPERATING REVENUES: Local and Intermediate Sources

$

Total Operating Revenues

414,736

$

-

$

414,736

414,736

-

414,736

34,085

-

34,085

Total Operating Expenses

34,085

-

34,085

Operating Income

380,651

-

380,651

OPERATING EXPENSES: Other Operating Costs

NONOPERATING REVENUES (EXPENSES): Earnings from Temporary Deposits & Investments

-

336

336

Total Nonoperating Revenues (Expenses)

-

336

336

380,651

336

380,987

-

2,500,000

2,500,000

380,651

2,500,336

2,880,987

Income Before Transfers Transfers In Change in Net Position Total Net Position -

September 1 (Beginning)

Total Net Position - August 31 (Ending)

579,210 $

959,861

$

2,500,336

579,210 $

3,460,197

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 141

OTHER SUPPLEMENTARY INFORMATION | COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

EXHIBIT

H-5 PROSPER INDEPENDENT SCHOOL DISTRICT COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED AUGUST 31, 2023 Workers

Property

Total

Compensation

Insurance

Internal

Insurance

Cash Flows from Operating Activities: Cash Received from District Cash Payments for Claims

$

Net Cash Provided by Operating Activities

Service Funds

392,269 (295,120)

$

97,149

Cash Flows from Capital & Related Financing Activities: Transfers In

-

$

-

392,269 (295,120) 97,149

-

2,500,000

2,500,000

Cash Flows from Investing Activities: Purchase of Investment Securities Interest and Dividends on Investments

22,467

(2,500,336) 336

(2,500,336) 22,803

Net Cash Provided by (Used for) Investing Activities

22,467

(2,500,000)

(2,477,533)

Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year

119,616 500,952

-

119,616 500,952

Cash and Cash Equivalents at End of Year

$

620,568

$

-

$

620,568

Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating Income:

$

380,651

$

-

$

380,651

Effect of Increases and Decreases in Current Assets and Liabilities: Increase (decrease) in Accounts Payable Increase (decrease) in Claims Payable Net Cash Provided by Operating Activities

8,649 (292,151) $

142| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

97,149

$

-

8,649 (292,151) $

97,149

OTHER SUPPLEMENTARY INFORMATION

Required TEA Schedules

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 143

OTHER SUPPLEMENTARY INFORMATION | REQUIRED TEA SCHEDULES

EXHIBIT

J-1 PROSPER INDEPENDENT SCHOOL DISTRICT SCHEDULE OF DELINQUENT TAXES RECEIVABLE FISCAL YEAR ENDED AUGUST 31, 2023

(1) Last 10 Years Ended August 31

(2) Tax Rates

(3) Assessed/Appraised Value for School Tax Purposes

Maintenance

Debt Service

2014 and prior years

Various

Various

2015

1.170000

0.500000

3,024,461,700

2016

1.170000

0.500000

3,847,037,610

2017

1.170000

0.500000

4,912,503,782

2018

1.170000

0.500000

6,483,353,632

2019

1.170000

0.500000

8,198,742,196

2020

1.068350

0.500000

9,694,457,179

2021

0.992700

0.500000

10,886,243,512

2022

0.960300

0.500000

12,778,844,278

2023 (School year under audit)

0.942900

0.500000

16,334,798,392

1000 8000

TOTALS Total Taxes Refunded Under Section 26.115, Tax Code

144| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

$

Various

REQUIRED TEA SCHEDULES | OTHER SUPPLEMENTARY INFORMATION

J-1

EXHIBIT

CONTINUED

(10) Beginning Balance 9/1/2022

$

$

(20) Current Year's Total Levy

20,426 $

-

2,724

$

(31)

(32)

Maintenance Collections

Debt Service Collections

(40) Entire Year's Adjustments

(50) Ending Balance 8/31/2023

(18,656) $

(7,973) $

(34,312) $

12,743

-

38

16

(182)

2,488

(35,274)

-

5,902

2,522

1,639

(42,059)

19,954

-

192

82

(737)

18,943

143,302

-

83,033

35,484

(1,316)

23,469

501,601

-

532,874

227,724

362,476

103,479

537,167

-

998,969

467,529

1,593,592

664,261

506,187

-

874,784

440,609

1,714,665

905,459

603,766

-

580,337

302,164

1,162,293

883,558

81,483,422

-

549,947

82,951,579 $

4,798,118 $

3,122,288

-

235,694,806

153,661,437

2,299,853 $

235,694,806 $

156,718,910

$

102,982 0.00

$

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 145

OTHER SUPPLEMENTARY INFORMATION | REQUIRED TEA SCHEDULES

EXHIBIT

J-2 PROSPER INDEPENDENT SCHOOL DISTRICT BUDGETARY COMPARISON SCHEDULE - CHILD NUTRITION PROGRAM FOR THE YEAR ENDED AUGUST 31, 2023 Actual Amounts (GAAP BASIS)

Budgeted Amounts Original

REVENUES: Total Local and Intermediate Sources State Program Revenues Federal Program Revenues

$

Variance With Final Budget Positive or

Final

(Negative)

7,912,000 $ 10,000 933,000

9,908,000 $ 10,000 1,137,000

9,919,166 16,183 1,524,327

8,855,000

11,055,000

11,459,676

404,676

8,753,000

10,953,000

10,564,671

388,329

Total Expenditures

8,753,000

10,953,000

10,564,671

388,329

Net Change in Fund Balances

102,000

102,000

895,005

793,005

1,030,190

1,030,190

1,030,190

-

1,132,190 $

1,132,190 $

1,925,195

Total Revenues EXPENDITURES: Current: Food Services

Fund Balance - September 1 (Beginning) Fund Balance - August 31 (Ending)

$

146| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

$

$

11,166 6,183 387,327

793,005

REQUIRED TEA SCHEDULES | OTHER SUPPLEMENTARY INFORMATION

EXHIBIT

J-3 PROSPER INDEPENDENT SCHOOL DISTRICT BUDGETARY COMPARISON SCHEDULE - DEBT SERVICE FUND FOR THE YEAR ENDED AUGUST 31, 2023

Budgeted Amounts

Actual Amounts (GAAP BASIS)

Variance With Final Budget Positive or

Original

Final

83,093,000 $ -

83,893,000 $ 1,700,000

85,119,970 1,259,714

Total Revenues EXPENDITURES: Debt Service: Principal on Long-Term Liabilities Interest on Long-Term Liabilities Bond Issuance Cost and Fees

83,093,000

85,593,000

86,379,684

786,684

32,840,000 50,253,000 -

76,168,898 59,846,515 1,875,603

76,168,898 59,846,515 955,503

920,100

Total Expenditures

83,093,000

137,891,016

136,970,916

920,100

REVENUES: Total Local and Intermediate Sources State Program Revenues

$

(Negative)

$

1,226,970 (440,286)

Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Capital Related Debt Issued Premium or Discount on Issuance of Bonds

-

(52,298,016)

(50,591,232)

1,706,784

-

49,320,000 978,016

52,160,413 1,624,965

2,840,413 646,949

Total Other Financing Sources (Uses)

-

50,298,016

53,785,378

3,487,362

-

(2,000,000)

3,194,146

5,194,146

16,076,388

16,076,388

16,076,388

16,076,388 $

14,076,388 $

19,270,534

Net Change in Fund Balances Fund Balance - September 1 (Beginning) Fund Balance - August 31 (Ending)

$

-

$

5,194,146

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 147

OTHER SUPPLEMENTARY INFORMATION | REQUIRED TEA SCHEDULES

EXHIBIT

J-4

USE OF FUNDS REPORT - SELECT STATE ALLOTMENT PROGRAMS EXHIBIT

PROSPER INDEPENDENT SCHOOL DISTRICT STATE COMPENSATORY EDUCATION AND BILINGUAL EDUCATION PROGRAM EXPENDITURES FOR THE YEAR ENDED AUGUST 31, 2023 Section A: Compensatory Education Programs AP1

Did your LEA expend any state compensatory education program state allotment funds during the district's fiscal year?

Yes

AP2

Does the LEA have written policies and procedures for its state compensatory education program?

Yes

AP3

List the total state allotment funds received for state compensatory education programs during the district's fiscal year.

$2,371,600

AP4

List the actual direct program expenditures for state compensatory education programs during the LEA's fiscal year.

$421,677

Section B: Bilingual Education Programs AP5

Did your LEA expend any bilingual education program state allotment funds during the LEA's fiscal year?

AP6

Does the LEA have written policies and procedures for its bilingual education program?

AP7

List the total state allotment funds received for bilingual education programs during the LEA's fiscal year.

$1,400,938

AP8

List the actual direct program expenditures for bilingual education programs during the LEA's fiscal year.

$5,412,272

148| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

Yes

Yes

STATISTICAL SECTION

Statistical Section (Unaudited)

2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT ||149 149

STATISTICAL SECTION | FINANCIAL TRENDS

EXHIBIT

S-1 PROSPER INDEPENDENT SCHOOL DISTRICT NET POSITION BY COMPONENT LAST TEN FISCAL YEARS

Fiscal Year Governmental Activities: Net Investment in Capital Assets Restricted for Federal and State Programs Restricted for Debt Service Restricted for Campus Activities Other Restricted Funds Unrestricted Net Position Total Primary Government Activities Net Position

2014

2015

2016

2017

$ (63,247,687) 364,443 472,214 367,398 44,650,903 $ (17,392,729)

$ (68,483,755) 245,907 717,544 415,268 36,168,337 $ (30,936,699)

$ (69,150,665) 225,276 3,912,174 541,028 40,999,005 $ (23,473,182)

$ (66,373,810) 566,610 7,106,100 841,418 52,254,593 $ (5,605,089)

150| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

FINANCIAL TRENDS | STATISTICAL SECTION

EXHIBIT

CONTINUED

S-1 PROSPER INDEPENDENT SCHOOL DISTRICT NET POSITION BY COMPONENT LAST TEN FISCAL YEARS 2018

2019

2020

2021

2022

2023

$ (57,770,343) 522,044 10,886,040 981,963 28,675,073 $ (16,705,223)

$ (54,349,232) 768,300 14,486,986 1,121,462 34,919,432 $ (3,053,052)

$ (53,159,555) 55,851 15,134,298 1,657,593 34,101,587 $ (2,210,226)

$ (50,073,521) 732,199 15,524,348 2,240,587 25,313,923 $ (6,262,464)

$ (46,912,117) 1,030,190 16,076,388 2,440,765 55,096,443 $ 27,731,669

$ (51,923,802) 1,925,195 19,270,534 2,437,543 441,841 67,620,984 $ 39,772,295

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 151

STATISTICAL SECTION | FINANCIAL TRENDS

EXHIBIT

S-2 PROSPER INDEPENDENT SCHOOL DISTRICT CHANGES IN NET POSITION (CONTINUED) LAST TEN FISCAL YEARS

Fiscal Year Expenses Governmental Activities: Instruction Instructional Resources & Media Services Curriculum & Staff Development Instructional Leadership School Leadership Guidance, Counseling & Evaluation Services Health Services Student (Pupil) Transportation Food Services Extracurricular Activities General Administration Plant Maintenance & Operations Security Monitoring Services Data Processing Services Community Services Debt Service - Interest and Fees Non-Capital Facilities Costs Conracted Instructional Services Between Schools Payments Related to Shared Service Arrangements Other Intergovernmental Charges Total Governmental Activities Expenses Program Revenues Governmental Activities: Charges for Services Instruction Instructional Leadership School Leadership Health Services Extracurricular Activiites Food Services General Administration Plant Maintenance & Operations Community Services Operating Grants and Contributions Capital Grants and Contributions Total Governmental Activities Program Revenues

Total Governmental Activities Net (Expense) Revenue

2014

2015

2016

2017

$ 36,848,639 785,709 1,925,823 331,395 3,291,664 1,221,642 507,186 3,811,059 2,435,644 2,528,486 1,551,570 5,799,591 298,725 1,298,797 2,663 17,229,841 9,804 250,957 80,129,195

$ 40,213,839 1,014,744 2,163,380 459,094 3,429,852 1,253,760 506,800 4,453,451 2,852,388 2,884,247 1,794,912 6,449,845 394,695 1,594,700 5,418 29,583,063 303,732 99,357,920

$ 50,006,285 1,067,150 2,572,289 616,107 3,980,586 1,509,162 649,557 4,799,101 3,957,020 3,380,066 2,165,367 7,786,941 445,260 2,431,527 3,559 16,393,146 386,807 102,149,930

$ 59,434,729 1,331,932 2,987,978 864,650 4,996,964 1,780,346 823,658 6,143,664 4,112,116 3,735,454 2,382,620 8,855,035 1,061,698 2,337,144 1,559 16,043,694 428,140

474,080 1,037,081 1,772,016 15,659 201,252 3,973,097 7,473,185

320,237 1,192,785 2,259,568 2,042 780,089 3,846,336 8,401,057

465,051 1,403,880 2,910,896 325,586 6,204,810 11,310,223

559,231 1,712,878 3,648,187 537,087 5,480,591 11,937,974

$ (72,656,010)

$ (90,956,863)

$ (90,839,707)

$ (105,875,212)

152| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

491,805 117,813,186

FINANCIAL TRENDS | STATISTICAL SECTION

S-2

EXHIBIT

CONTINUED

PROSPER INDEPENDENT INDEPENDENT SCHOOL SCHOOL DISTRICT DISTRICT PROSPER CHANGES IN NET POSITION (CONTINUED) CHANGES IN NET POSITION (CONTINUED) LAST TEN TEN FISCAL FISCAL YEARS YEARS LAST 2018 2018

2019 2019

2020 2020

2021 2021

2022 2022

2023 2023

$ 51,592,464 $ 51,592,464 1,197,582 1,197,582 3,047,758 3,047,758 792,351 792,351 3,855,548 3,855,548 1,477,905 1,477,905 572,098 572,098 5,400,070 5,400,070 4,743,916 4,743,916 4,160,927 4,160,927 2,110,110 2,110,110 8,095,333 8,095,333 833,415 833,415 2,290,416 2,290,416 2,161 2,161 24,211,523 24,211,523 1,071,686 1,071,686 640,764 640,764 116,096,027 116,096,027

$ 94,367,090 $ 94,367,090 1,925,777 1,925,777 4,783,060 4,783,060 1,427,962 1,427,962 6,848,085 6,848,085 2,573,072 2,573,072 1,123,735 1,123,735 8,020,710 8,020,710 5,562,831 5,562,831 5,913,613 5,913,613 3,468,066 3,468,066 11,286,673 11,286,673 1,740,470 1,740,470 4,024,898 4,024,898 10,035 10,035 32,122,409 32,122,409 2,032,667 2,032,667 855,436 855,436 188,086,589 188,086,589

$ 121,697,224 $ 121,697,224 2,434,592 2,434,592 5,570,716 5,570,716 1,543,079 1,543,079 9,580,531 9,580,531 3,302,307 3,302,307 1,592,929 1,592,929 9,231,292 9,231,292 5,712,885 5,712,885 6,938,051 6,938,051 4,945,478 4,945,478 13,799,015 13,799,015 2,476,814 2,476,814 5,139,735 5,139,735 3,906 3,906 37,333,563 37,333,563 999,841 999,841 232,301,958 232,301,958

$ 140,096,259 $ 140,096,259 2,624,453 2,624,453 4,019,996 4,019,996 1,837,323 1,837,323 11,103,686 11,103,686 3,661,266 3,661,266 1,926,743 1,926,743 9,267,679 9,267,679 5,747,589 5,747,589 9,117,800 9,117,800 6,178,776 6,178,776 16,517,761 16,517,761 2,371,193 2,371,193 7,197,416 7,197,416 24,962 24,962 46,624,099 46,624,099 6,144 6,144 1,035,580 1,035,580 269,358,725 269,358,725

$ 167,724,251 $ 167,724,251 3,220,398 3,220,398 7,164,669 7,164,669 1,211,993 1,211,993 12,769,694 12,769,694 5,185,136 5,185,136 2,398,390 2,398,390 8,983,409 8,983,409 9,019,279 9,019,279 11,604,519 11,604,519 7,237,482 7,237,482 19,507,912 19,507,912 3,312,042 3,312,042 7,437,013 7,437,013 30,670 30,670 49,987,203 49,987,203 5,803,960 5,803,960 12,694 12,694 170,132 170,132 1,223,924 1,223,924 324,004,770 324,004,770

$ 187,990,517 $ 187,990,517 3,599,449 3,599,449 7,932,714 7,932,714 1,867,659 1,867,659 15,418,872 15,418,872 10,741,778 10,741,778 2,812,185 2,812,185 11,228,152 11,228,152 10,693,248 10,693,248 13,705,865 13,705,865 9,277,468 9,277,468 24,961,744 24,961,744 4,153,125 4,153,125 8,318,773 8,318,773 8,612 8,612 56,443,151 56,443,151 26,395,381 26,395,381 233,023 233,023 201,184 201,184 1,478,572 1,478,572 397,461,472 397,461,472

585,598 585,598 2,206,251 2,206,251 3,845,911 710,462 (10,400,747) (3,052,525)

1,859,148 1,859,148 2,768,970 2,768,970 4,795,015 885,242

2,327,021 2,327,021 2,563,560 2,563,560 5,060,176

10,906,738 21,215,113

2,491,548 2,491,548 2,910,032 2,910,032 3,884,125 733,164 15,252,208 25,271,077

700,893 13,427,836 24,079,486

1,727,826 1,727,826 1,094,294 1,094,294 771,073 771,073 8,337,936 1,248,412 1,478,967 30,384,185 45,042,693

2,665,330 2,665,330 1,212,073 1,212,073 829,244 829,244 9,778,859 1,539,671 1,342,601 36,723,546 54,091,324

$ (119,148,552)

$ (166,871,476)

$ (207,030,881)

$ (245,279,239)

$ (278,962,077)

$ (343,370,148)

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 153

STATISTICAL SECTION | FINANCIAL TRENDS

EXHIBIT

S-3 PROSPER INDEPENDENT SCHOOL DISTRICT CHANGES IN NET POSITION (FINAL) LAST TEN FISCAL YEARS

Fiscal Year General Revenues and Other Changes in Net Position Governmental Activities: Taxes: Property Taxes - General Purposes Property Taxes - Debt Service State Aid-Formula Grants Unrestricted Grants and Contributions Investment Earnings Land Contribution Gain on Sale of Capital Assets Miscellaneous Transfers In (Out) Total Governmental Activities General Revenues and Other Changes in Net Position Governmental Activities Change in Net Position

2014

2015

2016

2017

$ 28,643,491 12,240,738 26,200,433 49,090 220,142 5,001,627 -

$ 35,386,262 15,122,248 25,849,000 14,814 215,566 7,695,695 -

$ 45,010,417 19,235,111 27,056,468 366,575 442,160 6,192,493 -

$ 57,476,392 24,562,421 30,823,707 888,210 1,244,394 8,748,181 -

72,355,521

84,283,585

98,303,224

123,743,305

7,463,517

$ 17,868,093

$

(300,489)

154| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

$

(6,673,278)

$

FINANCIAL TRENDS | STATISTICAL SECTION

EXHIBIT

CONTINUED

S-3 PROSPER INDEPENDENT SCHOOL DISTRICT CHANGES IN NET POSITION (FINAL) LAST TEN FISCAL YEARS 2018

2019

2020

2021

2022

2023

$ 75,855,367 32,416,639 38,131,856 885,125 3,752,389 3,083,831 -

$ 95,925,447 40,993,548 31,920,912 2,218,205 6,179,823 3,285,712 -

$ 103,571,705 48,471,314 44,158,278 4,222,465 2,814,594 4,635,351 -

$ 108,061,806 54,437,151 67,533,484 3,374,804 219,966 7,599,790 -

$ 124,448,398 64,679,019 92,394,752 502,024 2,240,879 2,670,794 -

$ 157,849,987 83,526,541 85,562,757 22,139,702 4,530,240 151,725 381,463 -

154,125,207

180,523,647

207,873,707

241,227,001

286,935,866

354,142,415

$ 34,976,655

$ 13,652,171

7,973,789

$ 10,772,267

$

842,826

$

(4,052,238)

$

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 155

STATISTICAL SECTION | FINANCIAL TRENDS

EXHIBIT

S-4 PROSPER INDEPENDENT SCHOOL DISTRICT FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS

Fiscal Year

2014

2015

2016

2017

General Fund Nonspendable Committed Assigned Unassigned

$ $ 19,500,000 10,072,038

$ $ 30,000,000 12,432,534

$ $ 19,895,000 26,415,569

$ $ 29,820,000 29,857,306

Total General Fund

$ 29,572,038

$ 42,432,534

$ 46,310,569

$ 59,677,306

$

$

$

$

All Other Governmental Funds Nonspendable Restricted Committed Assigned Unassigned

20,816,964 14,284,086 -

2,217,496 9,582,428 -

40,834,055 12,907,792 -

108,412,016 14,270,002 -

Total All Other Governmental Funds

$ 35,101,050

$ 11,799,924

$ 53,741,847

$ 122,682,018

Total General and Other Governmental

$ 64,673,088

$ 54,232,458

$ 100,052,416

$ 182,359,324

156| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

FINANCIAL TRENDS | STATISTICAL SECTION

EXHIBIT

CONTINUED

S-4 PROSPER INDEPENDENT SCHOOL DISTRICT FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS 2018

2019

2020

2021

2022

2023

$ $ 58,735,000 25,965,359

$ $ 64,135,000 35,327,230

$ $ 65,525,000 48,716,638

$ $ 66,000,000 42,679,908

$ 514,676 $ 66,000,000 8,605,000 53,670,000

$ 1,442,773 $ 66,000,000 9,796,139 75,058,630

$ 84,700,359

$ 99,462,230

$ 114,241,638

$ 108,679,908

$ 128,789,676

$ 152,297,542

$

$

$

$

$

$

180,592,792 4,655,707 -

119,630,727 1,486,998 -

73,606,453 1,171,389 -

38,180,129 7,538,595 -

3,246,719 326,586,309 14,019,760 -

3,706,202 247,309,786 10,883,663 (57,982)

$ 185,248,499

$ 121,117,725

$ 74,777,842

$ 45,718,724

$ 343,852,788

$ 261,841,669

$ 269,948,858

$ 220,579,955

$ 189,019,480

$ 154,398,632

$ 472,642,464

$ 414,139,211

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 157

STATISTICAL SECTION | FINANCIAL TRENDS

EXHIBIT

S-5 PROSPER INDEPENDENT SCHOOL DISTRICT CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS

Fiscal Year REVENUES: Total Local and Intermediate Sources State Program Revenues Federal Program Revenues Total Revenues EXPENDITURES: Current: Instruction Instructional Resources & Media Services Curriculum & Instructional Staff Development Instructional Leadership School Leadership Guidance, Counseling & Evaluation Services Health Services Student (Pupil) Transportation Food Services Extracurricular Activities General Administration Plant Maintenance and Operations Security and Monitoring Services Data Processing Services Community Services Debt Service: Debt Service - Principal on long-term debt Debt Service - Interest on long-term debt Debt Service - Bond Issuance Cost and Fees Capital Outlay: Facilities Acquisition and Construction Intergovernmental: Contracted Instructional Services Between Schools Payments to Fiscal Agent/Member Districts of SSA Other Intergovernmental Charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Operating Transfers In Operating Transfers Out Bonds Issued Non-Current Loans Premium on Issuance of Bonds Sale of Real/Personal Property Right-to-Use Lease and Subscription Proceeds Payments to Bond Refunding Escrow Agent Extraordinary Items Total Other Financing Sources (Uses) Net Change in Fund Balances

2014

2015

2016

2017

$ 49,616,756 29,028,647 1,193,973 79,839,376

$ 62,342,840 28,504,724 1,205,426 92,052,990

$ 76,277,072 30,874,975 1,789,303 108,941,350

$ 98,742,216 34,657,429 2,415,513 135,815,158

32,145,111 565,745 1,688,935 252,432 2,896,851 1,063,717 428,223 2,501,306 2,163,750 2,212,635 1,314,682 5,097,447 298,725 1,140,872 2,663

38,081,060 803,910 1,951,098 383,841 3,076,127 1,109,956 434,671 2,922,208 2,591,367 2,613,589 1,572,356 5,685,632 315,942 1,879,589 5,418

45,290,198 950,706 2,250,257 508,345 3,428,078 1,289,897 543,019 2,969,213 3,610,178 3,019,130 1,835,322 6,373,516 437,509 2,265,410 3,559

54,810,263 1,202,999 2,632,467 746,120 4,382,391 1,543,367 705,128 4,053,408 3,704,823 3,306,563 2,038,791 7,503,740 972,818 2,369,849 1,559

2,300,097 13,612,985 793,779

1,419,311 17,594,946 1,404,235

3,323,516 17,117,204 669,710

3,537,050 21,204,303 516,508

13,659,254

27,251,251

44,086,794

63,235,258

9,804 250,957 84,399,970

303,732 111,400,239

386,807 140,358,368

428,140 491,805 179,387,350

(4,560,594)

(19,347,249)

(31,417,018)

(43,572,192)

3,504,556 (3,504,556) 76,013,185 9,722,715 3,941,078 151,751 (56,966,331) (23,720) 32,838,678 $ 28,278,084

1,323,020 (1,323,020) 159,124,425 15,005,238 6,944,991 (172,168,034) 8,906,620 $ (10,440,629)

11,378,976 (11,378,976) 68,723,689 8,513,377 77,237,066 $ 45,820,048

10,397,191 (10,397,191) 129,614,101 13,286,085 (17,021,085) 125,879,101 $ 82,306,909

22.52%

23.26%

21.60%

21.76%

Debt Service as a % of NonCapital Expenditures

158| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

FINANCIAL TRENDS | STATISTICAL SECTION

EXHIBIT

CONTINUED

S-5 PROSPER INDEPENDENT SCHOOL DISTRICT CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS 2018

2019

2020

2021

2022

2023

$ 121,919,104 42,776,157 2,307,444 167,002,705

$ 155,665,719 38,710,512 3,121,916 197,498,147

$ 169,930,724 54,160,742 3,806,654 227,898,120

$ 179,767,315 77,558,714 4,706,788 262,032,817

$ 210,058,331 105,476,799 13,384,681 328,919,811

$ 283,022,258 101,490,371 16,105,176 400,617,805

63,633,828 1,321,425 3,268,564 918,436 4,722,826 1,727,835 698,183 4,344,539 4,331,322 4,191,649 2,240,307 8,043,480 960,055 2,571,338 2,161

81,490,629 1,719,282 4,168,457 1,221,467 5,955,741 2,159,689 916,844 5,673,860 5,101,514 5,231,506 2,908,488 9,770,282 1,547,828 4,288,301 10,035

99,606,152 2,049,705 4,661,670 1,192,104 7,678,049 2,599,115 1,241,954 6,382,949 5,134,625 5,824,389 4,037,671 12,222,303 2,091,927 4,207,561 3,906

119,133,978 2,283,122 3,365,496 1,510,826 9,394,393 3,006,766 1,608,158 6,822,504 4,989,491 7,930,503 5,250,600 14,901,415 2,072,509 6,676,998 24,962

139,774,416 2,701,180 5,855,110 1,160,767 10,573,508 4,235,542 1,969,273 7,827,020 9,017,199 10,629,734 6,259,847 19,405,579 2,899,149 6,941,471 29,526

156,896,356 3,025,620 6,580,816 1,602,155 12,822,832 8,723,762 2,304,823 10,676,944 10,727,487 12,511,195 8,056,152 25,039,990 3,778,937 8,081,908 8,612

7,419,639 23,808,267 1,528,173

8,045,365 31,944,298 1,621,705

11,485,552 39,685,197 1,066,831

21,773,228 39,931,409 994,537

17,742,432 46,551,893 3,364,951

77,002,128 59,918,895 2,172,740

144,036,301

272,707,549

204,187,022

95,487,108

167,798,853

350,944,032

1,071,686 640,764 281,480,778 (114,478,073)

2,032,667 855,436 449,370,943 (251,872,796)

999,841 416,358,523 (188,460,403)

6,144 1,035,580 348,199,727 (86,166,910)

12,694 170,132 1,223,924 466,144,200 (137,224,389)

233,023 201,184 1,478,572 762,788,163 (362,170,358)

177,559,815 24,507,792 202,067,607 $ 87,589,534

5,635,109 (5,635,109) 183,741,979 26,873,571 (8,111,657) 202,503,893 $ (49,368,903)

6,693,899 (6,693,899) 139,921,187 16,978,741 156,899,928 $ (31,560,475)

12,251,589 (12,251,589) 134,244,542 3,014,736 (85,713,216) 51,546,062 $ (34,620,848)

10,000,000 (10,007,448) 426,425,000 26,932,430 476,422 1,641,817 455,468,221 $ 318,243,832

(2,500,000) 297,030,000 7,972,615 228,932 935,558 303,667,105 $ (58,503,253)

23.06%

22.81%

24.30%

24.56%

21.35%

32.29%

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 159

STATISTICAL SECTION | REVENUE CAPACITY

EXHIBIT

S-6 PROSPER INDEPENDENT SCHOOL DISTRICT ASSESSED VALUE - REAL AND PERSONAL PROPERTY LAST TEN FISCAL YEARS

Fiscal Year

Real Property Assessed Value

Personal Property Assessed Value

2023

$ 21,130,463,764

2022

14,662,086,324

949,256,604

2021

12,681,979,347

924,789,946

2020

11,061,116,671

2019

$

1,123,689,016

Minerals Assessed Value $

Less: Exemptions -

Total Taxable Value

Total Direct Rate

$ 5,484,176,697

16,769,976,083

2,561,319,672

13,050,023,256

1.4603

14,920

2,518,688,771

11,088,095,442

1.4927

1,052,907,897

14,920

2,261,824,496

9,852,214,992

1.56835

9,471,630,535

1,079,244,519

14,920

2,201,831,990

8,349,057,984

1.6700

2018

7,997,744,139

792,148,828

-

2,179,937,299

6,609,955,668

1.6700

2017

6,417,995,439

516,110,620

-

1,915,114,438

5,018,991,621

1.6700

2016

5,174,552,717

382,934,750

-

1,732,941,377

3,824,546,090

1.6700

2015

4,217,034,594

314,298,857

-

1,504,977,501

3,026,355,950

1.6700

2014

3,463,324,796

252,818,548

-

1,292,701,415

2,423,441,929

1.6700

Note: Property is assessed at market value. Properties are assessed every year. Tax rates are per $100 of assessed value.

Source of information: Comptroller of Public Accounts - Property Tax Division, Denton Central Appraisal District and

Collin County Appraisal District.

160| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

$

1.4429

REVENUE CAPACITY | STATISTICAL SECTION

EXHIBIT

S-7 PROSPER INDEPENDENT SCHOOL DISTRICT PROPERTY TAX RATES-DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS (UNAUDITED) TAX RATES (PER $100) (1)

Fiscal Year

Prosper ISD Direct Rates Maintenance and Debt Operations Service Total

City of Celina

Collin County

Overlapping Rates Collin Collin County County CCD MUD #1

Denton County

Elm Ridge WC & ID

City of Frisco

City of Town of McKinney Prosper

2014

1.17

0.50

1.67

0.6450

0.2375

0.0820

1.0500

0.2722

1.0000

0.46191

0.5855

0.5200

2015

1.17

0.50

1.67

0.6450

0.2350

0.0820

1.0500

0.2620

1.0000

0.4600

0.5830

0.5200

2016

1.17

0.50

1.67

0.6450

0.2250

0.0812

1.0500

0.2484

1.0000

0.4600

0.5830

0.5200

2017

1.17

0.50

1.67

0.6450

0.2084

0.0798

1.0500

0.2378

0.9700

0.4500

0.5730

0.5200

2018

1.17

0.50

1.67

0.6450

0.1922

0.0812

1.0500

0.2256

0.9650

0.4466

0.5402

0.5200

2019

1.17

0.50

1.67

0.6450

0.1808

0.0812

1.0500

0.2253

0.9650

0.4466

0.52517

0.5200

2020

1.06835

0.50

1.56835

0.6450

0.1750

0.0812

1.0500

0.2250

0.9650

0.4466

0.5156

0.5200

2021

0.9927

0.50

1.4927

0.6450

0.1725

0.0812

1.0500

0.2331

0.9650

0.4466

0.50865

0.5200

2022

.09603

0.50

1.4603

0.6450

0.1681

0.0812

1.0015

0.2175

0.9280

0.4466

0.49766

0.5200

2023

0.9429

0.50

1.4429

0.6348

0.1524

0.0812

0.9482

0.1895

0.8870

0.4466

0.04575

0.5200

Note: Above rates include rate for operating and debt service costs.

Source of information: Collin County website, and Denton and Collin Appraisal Districts.

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 161

STATISTICAL SECTION | REVENUE CAPACITY

S-8

EXHIBIT

PROSPER INDEPENDENT SCHOOL DISTRICT PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2023

% of Total Taxable Assessed Value

Description

Taxable Assessed Value

Rank

380 & 289 LP

Shopping Center/Mall

$ 126,808,737

1

0.76%

First Texas Homes Inc

Home Builder

80,344,344

2

0.48%

WMCI Dallas VI LLC

Apartments

76,814,894

3

0.46%

GOP #2 LLC

Commercial

67,790,369

4

0.40%

DD Bluestem LLC

Apartments

65,000,000

5

0.39%

Orion Prosper Lakes LLC

Apartments

59,406,378

6

0.35%

DD Preston Road LLC

Apartments

56,062,588

7

0.33%

Frisco Rockhill Apartments LP Apartments

54,363,384

8

0.32%

Star Business Park LLC

Distribution Center

52,263,425

9

0.31%

Oncor Electric Delivery Co

Electric Utility

48,665,892

10

0.29%

Western Rim Investors

2014

% of Total Taxable Assessed Value

Taxable Assessed Value

Rank

9,553,408

7

0.39%

18,513,670

3

0.76%

Investments

44,617,791

1

1.84%

Chapman Construction Co

Construction

20,024,136

2

0.83%

Wal-Mart RE Business Trust

Retail/Trust

17,740,013

4

0.73%

Horton D.R. - Texas Ltd

Home Builder

17,287,383

5

0.71%

Lennar Homes - Texas Ltd

Home Builder

10,678,291

6

0.44%

Uptown Custer Partners LP

Commercial

8,127,257

8

0.34%

SLC McKinney Partners LP

Investments

7,905,210

9

0.33%

Wal-Mart Stores Texas LLC

Retail

7,798,875

10

0.32%

Taxpayer

TOTAL

$ 687,520,011

Source of information: Collin County Tax Office and Collin County Appraisal District.

162| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

4.09%

$162,246,034

6.69%

REVENUE CAPACITY | STATISTICAL SECTION

EXHIBIT

S-9 PROSPER INDEPENDENT SCHOOL DISTRICT PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (amounts expressed in thousands) (UNAUDITED)

Taxes Levied for the Fiscal Year (1)

Levy Year 2013

Collected within the Fiscal Year of The Levy Current Percent Tax of Levy Collections Collected

$

40,884,229

$

40,511,933

99.09%

Collections In Subsequent Years and Cumulative Adjustments (2) $

352,148

Total Collections to Date Amount $

Percentage of Levy

40,864,081

99.95%

2014

50,508,510

49,976,939

98.95%

531,293

50,508,232

100.00%

2015

64,245,528

63,861,657

99.40%

81,147

64,242,804

99.99%

2016

82,038,813

81,822,283

99.74%

251,804

82,074,087

100.04%

2017

108,272,006

108,014,081

99.76%

237,971

108,248,537

99.98%

2018

136,918,995

136,299,663

99.55%

476,030

136,815,516

99.98%

2019

152,043,019

151,414,542

99.59%

126,876

151,378,758

99.67%

2020

162,498,957

162,038,769

99.72%

(76,979)

161,593,498

99.67%

2021

186,609,463

186,005,697

99.68%

97,579

185,725,905

99.73%

2022

235,694,806

235,144,859

99.80%

235,144,859

99.80%

(1) Current year original tax levy net of supplements and adjustments in current tax year.

(2) Collections in subsequent years are net of supplements and adjustments in subsequent years.

Source of information: Collin County Appraisal District

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 163

STATISTICAL SECTION | DEBT CAPACITY

S-10

EXHIBIT

PROSPER INDEPENDENT SCHOOL DISTRICT DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AUGUST 31, 2023 (UNAUDITED)

Taxing Body

Gross Bonded Debt

City of Celina Collin County Collin County CCD Collin County MUD #1 Denton County Elm Ridge WC & ID City of Frisco City of McKinney Town of Prosper

$ 131,826,143 543,645,000 498,565,000 125,240,000 559,930,000 126,930,000 509,393,178 335,895,000 150,080,159

Estimated % Overlapping 46.13% 6.55% 6.55% 87.74% 1.53% 35.13% 3.49% 9.80% 95.07%

Amount Overlapping $

Total Overlapping Debt Prosper ISD

60,811,400 35,608,748 32,656,008 109,885,575 8,566,929 44,590,509 17,777,822 32,917,710 142,681,207 485,495,907

1,585,950,239

Total Overlapping and Direct Debt

100.00%

1,585,950,239 $

Total Direct and Overlapping Debt to Taxable Assessed Valuation Total Direct and Overlapping Debt per Capita

164| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

2,071,446,146 12.35%

$

20,125

STATISTICAL SECTION

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 165

STATISTICAL SECTION | DEBT CAPACITY

EXHIBIT

S-11 PROSPER INDEPENDENT SCHOOL DISTRICT RATIO OF BONDED DEBT TO ASSESSED VALUE AND BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS

Gross Bonded Debt

Fiscal Year 2014

$

Estimated Population

Gross Bonded Debt Per Capita

Personal Income (thousands of dollars)

Gross Bonded Debt as % of Personal Income

$

9,030

$ 1,811,514

16.50%

298,974,210

33,110

2015

310,019,722

36,808

8,423

2,080,314

14.90%

2016

382,743,571

41,337

9,259

2,531,395

15.12%

2017

499,489,330

48,037

10,398

3,202,578

15.60%

2018

692,797,432

56,847

12,187

3,882,195

17.85%

2019

885,694,243

66,124

13,394

4,644,219

19.07%

2020

1,028,032,541

72,826

14,116

5,480,374

18.76%

2021

1,068,660,032

82,057

13,023

5,790,680

18.45%

2022

1,501,941,102

90,742

16,552

7,190,033

20.89%

2023

1,724,465,598

102,930

16,754

8,971,337

19.22%

Note: Net bonded debt consists of general obligation bonds, accreted interest, and premiums on bond issuance, less the debt service fund balance.

Source of information: Municipal Advisory Council of Texas and U.S Census Bureau

166| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

DEBT CAPACITY | STATISTICAL SECTION

S-11

EXHIBIT

CONTINUED

PROSPER INDEPENDENT SCHOOL DISTRICT RATIO OF BONDED DEBT TO ASSESSED VALUE AND BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Assessed Value - Real and Personal Property (thousands of dollars) $

Gross Debt as % of Assessed Value

3,716,143

8.05%

4,531,333

6.84%

5,557,488

$

Net Bonded Debt

Net Net Bonded Debt Bonded Debt as % of Per Capita Personal Income

Net Debt as % of Assessed Value

298,501,996

$

9,015

16.48%

8.03%

309,837,493

8,418

14.89%

6.84%

6.89%

379,202,019

9,173

14.98%

6.82%

6,934,106

7.20%

492,571,953

10,254

15.38%

7.10%

8,789,893

7.88%

682,098,046

11,999

17.57%

7.76%

10,550,875

8.39%

871,585,590

13,181

18.77%

8.26%

12,114,025

8.49%

1,013,114,274

13,911

18.49%

8.36%

13,606,769

7.85%

1,053,747,443

12,842

18.20%

7.74%

15,611,342

9.62%

1,485,864,714

16,375

20.67%

9.52%

22,254,152

7.75%

1,705,195,064

16,567

19.01%

7.66%

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 167

STATISTICAL SECTION | DEBT CAPACITY

EXHIBIT

S-12 PROSPER INDEPENDENT SCHOOL DISTRICT LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS

Fiscal Year Total Assessed Value

2014

2015

2016

2017

2018

$ 3,716,143,344

$ 4,531,333,451

$ 5,557,487,467

$ 6,934,106,059

$ 8,789,892,967

$

$

$

$

Debt Applicable to Limit: General Obligation Bonds $ Less Net Position in Debt Service Fund Total Amount of Debt Applicable to Debt Limit

267,875,581 472,214 267,403,367

Ratio of Net Bonded Debt to Assessed Value

7.20%

Fiscal Year Total Assessed Value

335,887,630 3,941,552 331,946,078

5.96%

446,148,641 6,917,377 439,231,264

5.97%

616,329,002 10,699,386 605,629,616

6.33%

6.89%

2019

2020

2021

2022

2023

$ 10,550,889,974

$ 12,114,039,488

$ 13,606,784,213

$ 15,611,342,928

$22,254,152,780

$

$

955,880,163 14,912,589 940,967,574

$ 1,365,089,137 16,076,388 1,349,012,749

$ 1,585,950,239 19,270,534 1,566,679,705

6.92%

8.64%

7.04%

Debt Applicable to Limit: General Obligation Bonds $ Less Net Position in Debt Service Fund Total Amount of Debt Applicable to Debt Limit Ratio of Net Bonded Debt to Assessed Value

270,181,147 182,229 269,998,918

784,243,637 14,108,653 770,134,984 7.30%

168| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

913,122,985 14,918,267 898,204,718 7.41%

DEMOGRAPHIC INFORMATION | STATISTICAL SECTION

EXHIBIT

S-13 PROSPER INDEPENDENT SCHOOL DISTRICT DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED)

Fiscal Year

Estimated Population

Personal Income (dollars)

Per Capita Personal Income (dollars)

Unemployment Rate

2023

102,930

8,971,337,628

87,160

2.80%

2022

90,742

7,190,033,112

79,236

3.10%

2021

82,057

5,790,680,433

70,569

5.10%

2020

72,826

5,480,374,978

75,253

2.80%

2019

66,124

4,644,219,140

70,235

3.10%

2018

56,847

3,882,195,324

68,292

3.00%

2017

48,037

3,202,578,753

66,669

3.40%

2016

41,337

2,531,395,206

61,238

3.20%

2015

36,808

2,080,314,544

56,518

5.00%

2014

33,110

1,811,514,320

54,712

4.40%

Source of Information: Based on demographers household information (closings * HH size) 2020 census information

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 169

STATISTICAL SECTION | DEMOGRAPHIC INFORMATION

EXHIBIT

S-14 PROSPER INDEPENDENT SCHOOL DISTRICT PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO

2023 Employer

Description

Prosper ISD

Education

Kroger

Employees

Rank

2,751

1

Grocery Store

500

2

Wal Mart

Retail

250

3

Town of Prosper

Local Government

200

4

Lowe's

Retail

100

5

Dick's Field and Stream

Retail

85

6

Gentle Creek

Golf Course

85

7

Longo Toyota

Car Dealership

75

8

Texas Health Resources

Medical Facility

70

9

Go Crete

Concrete Company

70

10

Mahard Egg Farms Inc

Percentage of Total Employment (1)

2014 Employees

Rank

762

1

78

3

Cage Laid Egg Production

120

2

Hope Lumber

Lumber Retail

40

4

Lattimore Materials

Concrete Company

36

5

Pioneer Concrete Co

Concrete Company

20

6

Gutherie Lumber

Lumber Wholesale

6

7

TOTAL

4,186

(1) Based on Collin County total employment Source of Information: Collin County and bond Official Statements

170| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

0.67%

1,062

Percentage of Total Employment (1)

0.24%

OPERATING INFORMATION | STATISTICAL SECTION

EXHIBIT

S-15 PROSPER INDEPENDENT SCHOOL DISTRICT SALARY DATA AUGUST 31, 2023

Years of Experience

187-Day Teacher

Nurse

ESL Teacher

Librarian

207-Day Teacher

226-Day Teacher

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

$56,400 56,700 57,000 57,300 57,600 58,100 58,600 59,100 59,600 60,100 60,600 61,100 61,600 62,100 62,600 63,100 63,775 64,525 65,275 66,275 67,275

$57,305 57,610 57,914 58,219 58,524 59,032 59,540 60,048 60,556 61,064 61,572 62,080 62,588 63,096 63,604 64,112 64,798 65,560 66,322 67,338 68,354

$57,908 58,216 58,524 58,832 59,140 59,653 60,167 60,680 61,194 61,707 62,220 62,734 63,247 63,760 64,274 64,787 65,480 66,250 67,020 68,047 69,074

$59,416 59,732 60,048 60,364 60,680 61,207 61,734 62,260 62,787 63,314 63,841 64,367 64,894 65,421 65,948 66,474 67,185 67,976 68,766 69,819 70,873

$62,432 62,764 63,096 63,428 63,760 64,314 64,867 65,421 65,974 66,528 67,081 67,635 68,188 68,742 69,295 69,849 70,596 71,426 72,256 73,363 74,470

$68,163 68,525 68,888 69,250 69,613 70,217 70,821 71,426 72,030 72,634 73,239 73,843 74,447 75,051 75,656 76,260 77,076 77,982 78,889 80,097 81,306

Source of Information: District PEIMS report

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 171

STATISTICAL SECTION | OPERATING INFORMATION

EXHIBIT

S-16 PROSPER INDEPENDENT SCHOOL DISTRICT EMPLOYEE INFORMATION LAST TEN FISCAL YEARS 2023

2022

2021

2020

2019

Administration Campus

65.7

59.8

55.0

43.0

36.0

Administration Central

23.0

20.0

20.0

16.0

11.0

Auxiliary Staff

345.1

412.5

352.9

319.1

272.6

Educational Aides

293.1

231.7

184.2

137.4

105.6

Professional Support

332.1

290.2

245.3

202.5

157.7

1,579.3

1,429.9

1,273.4

1,064.6

905.4

Teachers

2018

2017

2016

2015

2014

Administration Campus

30.7

28.7

25.1

22.0

21.0

Administration Central

9.0

9.0

8.4

8.0

7.0

Auxiliary Staff

233.0

26.3

220.2

204.0

174.4

Educational Aides

90.9

80.6

70.9

61.3

53.6

Professional Support

125.8

107.8

88.7

71.1

65.9

Teachers

746.5

647.5

548.1

466.1

421.1

Source of Information: District PEIMS report

172| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OPERATING INFORMATION | STATISTICAL SECTION

EXHIBIT

S-17 PROSPER INDEPENDENT SCHOOL DISTRICT ENROLLMENT AND ATTENDANCE DATA LAST TEN FISCAL YEARS (UNAUDITED) Enrollment

Average Daily Attendance

Amount

Percent Increase

Amount

Percent Increase

Percent of Enrollment

2013/14

6,395

16.36%

6,067

15.89%

94.87%

2014/15

7,060

10.40%

6,823

12.46%

96.64%

2015/16

8,254

16.91%

8,013

17.44%

97.08%

2016/17

9,970

20.79%

9,703

21.09%

97.32%

2017/18

12,081

21.17%

11,656

20.13%

96.48%

2018/19

14,287

18.26%

13,795

18.35%

96.56%

2019/20

16,857

17.99%

16,201

17.44%

96.11%

2020/21

19,138

13.53%

19,100

17.89%

99.80%

2021/22

21,780

13.80%

20,875

9.29%

95.84%

2022/23

24,994

14.76%

23,645

13.27%

94.60%

Source of information: Texas Education Agency and District PEIMS reports

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 173

STATISTICAL SECTION

174| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OPERATING INFORMATION | STATISTICAL SECTION

EXHIBIT

S-18 PROSPER INDEPENDENT SCHOOL DISTRICT OPERATING STATISTICS LAST TEN FISCAL YEARS

Fiscal Year

Cost Per Pupil

Percentage Change

Teaching Staff

Pupil/ Teacher Ratio

8,387

-2.28%

421.1

15.19

Enrollment

Operating Expenditures

2013-2014

6,395

$ 53,633,825

2014-2015

7,060

60,892,450

8,625

2.84%

466.1

15.15

2015-2016

8,254

72,611,947

8,797

1.99%

548.1

15.06

2016-2017

9,970

86,844,952

8,711

-0.98%

647.5

15.40

2017-2018

12,081

101,220,308

8,378

-3.82%

746.5

16.18

2018-2019

14,287

130,428,042

9,129

8.96%

905.4

15.78

2019-2020

16,857

158,156,155

9,382

2.77%

1,064.6

15.83

2020-2021

19,138

187,460,357

9,795

4.40%

1,273.4

15.03

2021-2022

21,780

229,279,321

10,527

7.47%

1,429.9

15.23

2022-2023

24,994

270,837,589

10,836

2.94%

1,597.3

15.65

$

Source of Information: District PEIMS report

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 175

STATISTICAL SECTION | OPERATING INFORMATION

EXHIBIT

S-19 PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

ELEMENTARY Facility Opened Baker

Capacity

Cockrell

750

750

750

750

95,265

95,265

95,265

95,265

949

920

820

Capacity

750

750

750

750

750

2018 93,000

93,000

93,000

93,000

93,000

Enrollment

762

857

785

914

828

Capacity

750

750

-

-

-

Square Footage

95,904

95,904

Enrollment

1,021

707

-

-

-

Capacity

750

750

750

750

750

93,683

93,683

93,683

93,683

93,683

Enrollment

759

690

707

923

785

Capacity

750

750

750

750

750

94,772

94,772

94,772

94,772

94,772

Enrollment

713

712

730

801

782

Capacity

750

750

750

750

-

2021

2012

2004

2019 94,850

94,850

94,850

94,850

-

Enrollment

880

812

815

782

-

Capacity

750

-

-

-

-

96,113

-

-

-

-

Enrollment

755

-

-

-

-

Capacity

750

750

750

750

750

93,000

93,000

93,000

93,000

93,000

819

751

765

755

865

2022 Square Footage

Hughes

750

594

Square Footage Hall

2019

95,265

Square Footage Furr

2020

650

Square Footage Folsom

2021

Enrollment

Square Footage Bryant

2022

2007 Square Footage

Boyer

2023

2016 Square Footage Enrollment

176| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OPERATING INFORMATION | STATISTICAL SECTION

S-19

EXHIBIT

CONTINUED

PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

ELEMENTARY Facility Opened Baker

Capacity

Cockrell

750

750

750

750

95,265

95,265

95,265

711

690

693

Capacity

-

-

-

-

-

Square Footage Enrollment

-

-

-

-

-

Capacity

-

-

-

-

-

Square Footage Enrollment

-

-

-

-

-

Capacity

750

750

750

750

750

93,683

93,683

93,683

93,683

93,683

987

849

635

776

824

2018

2021

2012

2004 Capacity Enrollment

750

750

750

750

750

94,772

94,772

94,772

94,772

94,772

804

791

646

717

618

-

-

-

-

-

2019 Capacity

Hughes

750

95,265

Square Footage

Hall

2014

688

Enrollment

Furr

2015

95,265

Square Footage Folsom

2016

748

Enrollment

Bryant

2017

2007 Square Footage

Boyer

2018

Square Footage

-

-

-

-

-

Enrollment

-

-

-

-

-

Capacity

-

-

-

-

-

Square Footage

-

-

-

-

-

Enrollment

-

-

-

-

-

750

750

-

-

-

93,000

93,000

-

-

-

968

688

-

-

-

2022

2016 Capacity Square Footage

Enrollment

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 177

STATISTICAL SECTION | OPERATING INFORMATION

EXHIBIT

CONTINUED

S-19 PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

ELEMENTARY Facility Opened Johnson

2023 750

750

750

-

-

93,803

93,803

-

-

Enrollment

1,028

842

690

-

-

Capacity

750

750

750

750

750

2015 93,000

93,000

93,000

93,000

93,000

Enrollment

940

941

844

791

831

Capacity

750

750

-

-

-

93,803

93,803

-

-

-

Enrollment

850

699

-

-

-

Capacity

700

700

700

700

700

85,000

85,000

85,000

85,000

85,000

688

693

706

676

705

2021

1995 Square Footage Enrollment

Spradley

2018 Capacity

Stuber

750

750

750

750

750

Square Footage

93,000

93,000

93,000

93,000

93,000

Enrollment

1,090

899

811

669

823

Capacity

750

750

750

750

-

2019 Square Footage

Windsong

2019

93,803

Square Footage Rucker

2020

Square Footage

Square Footage Reeves

2021

2020 Capacity

Light Farms

2022

94,914

94,914

94,914

94,914

-

Enrollment

832

950

1011

787

-

Capacity

750

750

750

750

750

93,000

93,000

93,000

93,000

93,000

888

803

993

775

1094

2016 Square Footage Enrollment

178| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OPERATING INFORMATION | STATISTICAL SECTION

EXHIBIT

CONTINUED

S-19 PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

ELEMENTARY Facility Opened Johnson

Light Farms

2018 -

-

-

-

-

-

-

-

-

-

Enrollment

-

-

-

-

-

750

750

750

-

-

93,000

93,000

93,000

-

-

968

850

795

-

-

Capacity

-

-

-

-

-

Square Footage

-

-

-

-

-

Enrollment

-

-

-

-

700

700

700

700

700

85,000

85,000

85,000

85,000

85,000

837

695

711

779

673

2015

2021

1995 Capacity Square Footage Enrollment

Stuber

Windsong

2014

Capacity

Enrollment

Spradley

2015

Square Footage

Square Footage

Rucker

2016

2020

Capacity

Reeves

2017

2018 Capacity

-

-

-

-

-

Square Footage

-

-

-

-

-

Enrollment

-

-

-

-

-

Capacity

-

-

-

-

-

Square Footage

-

-

-

-

-

Enrollment

-

-

-

-

-

750

750

-

-

-

93,000

93,000

-

-

-

968

520

-

-

-

2019

2016 Capacity Square Footage Enrollment

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 179

STATISTICAL SECTION | OPERATING INFORMATION

EXHIBIT

CONTINUED

S-19 PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

MIDDLE SCHOOL Facility Opened Hays

2023

2021

2020

2019

2019 Capacity

1,200

1,200

1,200

1,200

-

173,689

173,689

173,689

173,689

-

Enrollment

1,699

1483

1381

1255

-

Capacity

1,250

1,250

1,250

1,250

1,250

Square Footage Reynolds

2022

1999/2002 Square Footage

142,000

142,000

142,000

142,000

142,000

Enrollment

1,072

1,000

903

1,537

1,679

Square Footage

72,000

72,000

72,000

72,000

72,000

Capacity

1,200

1,200

1,200

1,200

1,200

Reynolds MPF 2002 Rogers

2008 Square Footage

Rushing

135,000

135,000

135,000

135,000

135,000

Enrollment

1,430

1,348

1,259

1,178

1,627

Capacity

1,200

1,200

1,200

-

-

173,689

173,689

173,689

-

-

1,507

1200

967

-

-

2020 Square Footage Enrollment

180| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OPERATING INFORMATION | STATISTICAL SECTION

EXHIBIT

CONTINUED

S-19 PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

MIDDLE SCHOOL Facility Opened Hays

Reynolds

2018

2017

2016

2015

2014

2019 Capacity

-

-

-

-

-

Square Footage

-

-

-

-

-

Enrollment

-

-

-

-

-

1,250

1,250

1,250

1,250

1,250

1999/2002 Capacity Square Footage

142,000

142,000

142,000

142,000

142,000

Enrollment

1,409

1,129

1,284

1,048

946

Square Footage

72,000

72,000

72,000

72,000

72,000

Capacity

1,200

1,200

1,200

1,200

1,200

135,000

135,000

135,000

135,000

135,000

1,420

1,245

1,366

1,184

1,013

Capacity

-

-

-

-

-

Square Footage

-

-

-

-

-

Enrollment

-

-

-

-

-

Reynolds MPF 2002 Rogers

2008 Square Footage Enrollment

Rushing

2020

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 181

STATISTICAL SECTION | OPERATING INFORMATION

EXHIBIT

CONTINUED

S-19 PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

HIGH SCHOOL Facility Opened PHS

2023 Capacity

RHHS

2020

2019

2,800

2,800

2,800

2,800

2,800

476,791

476,791

476,791

476,791

476,791

Enrollment

3,769

3,297

2,805

4,094

3,448

Square Footage

81,805

81,805

81,805

81,805

81,805

2009 2021 Capacity

2,800

2,800

2,800

-

-

511,021

511,021

511,021

-

-

Enrollment

2,832

2,498

2,017

-

-

Square Footage

75,450

75,450

75,450

-

-

Square Footage RHHS MPF

2021

2009 Square Footage

PHS MPF

2022

2021

182| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OPERATING INFORMATION | STATISTICAL SECTION

EXHIBIT

CONTINUED

S-19 PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

HIGH SCHOOL Facility Opened PHS

2018 Capacity

RHHS

RHHS MPF

2016

2015

2014

2009 2,800

2,800

2,800

2,800

2,800

476,791

476,791

476,791

476,791

476,791

Enrollment

2,971

2,515

2,106

1,866

1,628

Square Footage

81,805

81,805

81,805

81,805

81,805

Square Footage PHS MPF

2017

2009 2021 Capacity

-

-

-

-

-

Square Footage

-

-

-

-

-

Enrollment

-

-

-

-

-

Square Footage

-

-

-

-

-

2021

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 183

STATISTICAL SECTION | OPERATING INFORMATION

S-19

EXHIBIT

CONTINUED

PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

OTHER Facility

Opened

Admin Building

2023

2022

2021

2020

2019

Square Footage

131,300

131,300

131,300

131,300

131,300

Square Footage

22,900

22,900

22,900

22,900

22,900

Square Footage

14,000

14,000

14,000

-

-

Square Footage

26,925

26,925

26,925

26,925

26,925

84,824

-

-

-

-

2023

2022

2021

2020

2019

Square Footage

56,058

56,058

56,058

56,058

56,058

Square Footage

33,290

33,290

33,290

33,290

33,290

1963

AG Barn

2008

Mahard

2021

Support Services

2011

Portables

(59 throughout district)

Square Footage

ATHLETICS Facility Opened Children’s Health Stadium

2019

Natatorium

2019

BUILDINGS Number of Buildings

Square Footage

ES BLDGS

15

1,403,107

MS

5

696,378

HS

4

1,145,067

OTHER

6

284,473

Portables

59

84,824 3,613,849

184| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

OPERATING INFORMATION | STATISTICAL SECTION

EXHIBIT

CONTINUED

S-19 PROSPER INDEPENDENT SCHOOL DISTRICT CAPITAL ASSET INFORMATION LAST TEN FISCAL YEARS (UNAUDITED)

OTHER Facility Admin Building AG Barn Mahard Support Services Portables

Opened

2018

2017

2016

2015

2014

Square Footage

131,300

131,300

131,300

131,300

131,300

Square Footage

22,900

22,900

22,900

22,900

22,900

Square Footage

-

-

-

-

Square Footage

26,925

26,925

26,925

26,925

26,925

-

-

-

-

-

2018

2017

2016

2015

2014

Square Footage

-

-

-

-

-

Square Footage

-

-

-

-

-

1963

2008 2021 2011

(59 throughout district)

Square Footage

ATHLETICS Facility Opened Children’s Health Stadium Natatorium

2019

2019

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 185

STATISTICAL SECTION

EXHIBIT

S-20 PROSPER INDEPENDENT SCHOOL DISTRICT MISCELLANEOUS STATISTICAL DATA AUGUST 31, 2023 (UNAUDITED)

Date of Organizaton:

1956

Forms of Government:

Independent School District

Number of Employees: Administration Campus Administration Central Auxiliary Staff Education Aides Professional Support Teachers

Total

65.7 23.0 345.1 293.1 332.1 1,597.3 2,656.3

2023 Additions 17 7 72 56 49 254 455

Prosper Independent School District Facilities and Services: Education services provided to early childhood through grade twelve; all grade levels fully accredited by both the Texas Education Agency.

Facility Data:

Number of Buildings

Square Footage

15 5 5 6 59 90

1,403,107 696,378 1,145,067 284,473 84,824 3,613,849

Elementary Schools Middle Schools High Schools & MPFs Other Portable Buildings Total

186| 186| 2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT

FEDERAL AWARDS SECTION

Federal Awards Section

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 187

FEDERAL AWARDS SECTION | INDEPENDENT AUDITOR’S REPORT

188| 188| 2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT

INDEPENDENT AUDITOR’S REPORT | FEDERAL AWARDS SECTION

2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT ||189 189

FEDERAL AWARDS SECTION | INDEPENDENT AUDITOR’S REPORT

190| 190| 2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT

INDEPENDENT AUDITOR’S REPORT | FEDERAL AWARDS SECTION

2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT ||191 191

FEDERAL AWARDS SECTION | INDEPENDENT AUDITOR’S REPORT

192| 192| 2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT

INDEPENDENT AUDITOR’S REPORT | FEDERAL AWARDS SECTION

2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT ||193 193

FEDERAL AWARDS SECTION | INDEPENDENT AUDITOR’S REPORT

194| 194| 2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT

INDEPENDENT AUDITOR’S REPORT | FEDERAL AWARDS SECTION

2023 2023 ANNUAL ANNUAL COMPREHENSIVE COMPREHENSIVE FINANCIAL FINANCIAL REPORT REPORT ||195 195

FEDERAL AWARDS SECTION

PROSPER INDEPENDENT SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED AUGUST 31, 2023 I.

II.

Summary of Auditor’s Results 1.

Type of auditor’s report issued on the financial statements: Unmodified.

2.

Internal control over financial reporting: Material weakness(es) identified: None Significant deficiency(ies) identified that are not considered to be material weaknesses: None reported

3.

Noncompliance which is material to the financial statements: None

4.

Internal controls over major federal programs: Material weakness(es) identified: None Significant deficiency(ies) identified that are not considered to be material weaknesses: None reported

5.

Type of auditor’s report on compliance for major federal programs: Unmodified.

6.

Did the audit disclose findings which are required to be reported in accordance with 2 CFR 200.516(a)?: No

7.

Major programs include: 84.425D 84.425U 84.425U 84.425U

ESSER Relief Fund II ESSER Relief Fund III ESSER Relief Fund III TCLAS ARP ESSER Supplemental

32.009

Emergency Connectivity Fund

8.

Dollar threshold used to distinguish between Type A and Type B programs: $750,000.

9.

Low risk auditee: Yes

Findings Related to the Financial Statements None

III.

Other Findings None

109

196| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

FEDERAL AWARDS SECTION

PROSPER INDEPENDENT SCHOOL DISTRICT STATUS OF PRIOR YEAR FINDINGS FOR THE YEAR ENDED AUGUST 31, 2023 None

110

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 197

FEDERAL AWARDS SECTION

EXHIBIT

K-1 PROSPER INDEPENDENT SCHOOL DISTRICT

EXHIBIT (Cont'd)

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED AUGUST 31, 2023

(1) FEDERAL GRANTOR/ PASS-THROUGH GRANTOR/ PROGRAM or CLUSTER TITLE US DEPARTMENT OF HOMELAND S ECURITY Passed Through Texas Division of Emergency M gmt FEM A Public Assist Grant - Texas Severe Winter Storms Total Passed Through Texas Division of Emergency M gmt

(2) Federal Assistance Listing No.

97.036

(3) Pass-Through Entity Identifying Number

4586DRTXP0000001

32.009

ECF222119978

TOTAL FEDERAL COMMUNICATIONS COMMIS S ION U.S . DEPARTMENT OF EDUCATION Direct Programs Impact Aid - P.L. 81.874 (Note A) Total Direct Programs Passed Through Texas Education Agency ESEA, Title I, Part A - Improving Basic Programs

Federal Expenditures

$

5,480 5,480 5,480

TOTAL US DEPARTMENT OF HOMELAND S ECURITY FEDERAL COMMUNICATIONS COMMIS S ION Direct Programs Emergency Connectivity Fund (ECF) Total Direct Programs

(4)

1,299,150 1,299,150 1,299,150

84.041

420 420

84.010 A

23610101057950

*IDEA - Part B, Formula *IDEA - Part B, Formula *COVID 19 - IDEA, Part B, Formula - (ARP) Total Assistance Listing Number 84.027

84.027 84.027 84.027 X

236600010439126600 246600010439126600 235350010439125350

2,823,154 50,018 204,072 3,077,244

*IDEA - Part B, Preschool *COVID 19 - IDEA, Part B, Preschool- (ARP)

84.173 84.173 X

236610010439126610 235360010439125360

10,425 2,500 12,925

Career and Technical - Basic Grant Title III, Part A - English Language Acquisition ESEA, Title II, Part A, Teacher Principal Training

84.048 84.365 A 84.367 A

23420006043912 23681001057950 23694501057950

27,954 153,336 51,862

Summer School LEP Summer School LEP Total Assistance Listing Number 84.369

84.369 A 84.369 A

69552102 69552202

15,826 19,229 35,055

ESSA, Title IV, Part A

84.424 A

23680101057950

3,721

COVID 19 - ESSER II - School Emergency Relief COVID 19 - ESSER III - School Emergency Relief COVID 19 - Learning Supports - (TCLAS) ESSER III COVID 19 - Supplemental ESSER Fund Total Assistance Listing Number 84.425

84.425 D 84.425 D 84.425 U 84.425 U

21521001057950 21528001057950 21528042043912 21528043043912

8 300,682 34,173 7,213,384 7,548,247

Total Assistance Listing Number 84.173 Total Special Education Cluster (IDEA)

79,236

3,090,169

Total Passed Through Texas Education Agency

10,989,580

TOTAL U.S . DEPARTMENT OF EDUCATION

10,990,000

198| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

FEDERAL AWARDS SECTION

EXHIBIT

CONTINUED

K-1

EXHIBIT

PROSPER INDEPENDENT SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED AUGUST 31, 2023

(1) (2) DISTRICT (3) PROSPER INDEPENDENT SCHOOL Federal FEDERAL GRANTOR/ Pass-Through SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Assistance PASS-THROUGH GRANTOR/ FOR THE YEAR ENDED AUGUST 31, 2023Entity Identifying Listing No. Number PROGRAM or CLUSTER TITLE (1) (2) (3) U.S .

DEPARTMENT OF AGRICULTURE FEDERAL GRANTOR/ Federal Pass-Through Passed Through the Texas Department of Agriculture PASS-THROUGH GRANTOR/ Assistance Entity Identifying *School Breakfast Program 10.553 No. 71402301 Listing PROGRAM or CLUSTER TITLE Number *National School Lunch Program - Cash Assistance U.S*National . DEPARTMENT OF AGRICULTURE School Lunch Prog. - Non-Cash Assistance Passed Through the Texas Department of Agriculture *Supply Chain Assistance *School Breakfast Program Total Assistance Listing Number 10.555 *National School Lunch Program - Cash Assistance Total Child Nutrition *National School Lunch Prog. Cluster - Non-Cash Assistance *Supply Chain Assistance Total Passed Through the Texas Department of Agriculture Total Assistance Listing Number 10.555 TOTAL U.S . DEPARTMENT OF AGRICULTURE Total Child Nutrition Cluster

10.555 10.555 10.555 10.553 10.555 10.555 10.555

Total Passed Through the Texas Department of Agriculture TOTAL EXPENDITURES OF FEDERAL AWARDS TOTAL U.S . DEPARTMENT OF AGRICULTURE *Clustered Programs TOTAL EXPENDITURES OF FEDERAL AWARDS

71302301 71302301 71302301 71402301 71302301 71302301 71302301

EXHIBIT

(4)

Federal Expenditures (4) Federal 93,038 Expenditures

963,267 174,602 312,473 93,038 1,450,342 963,267 1,543,380 174,602 312,473 1,543,380 1,450,342 1,543,380 1,543,380

$

1,543,380 13,838,010 1,543,380

$

13,838,010

*Clustered Programs

See Accompanying Notes to the Schedule of Expenditures of Federal Awards

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 199

See Accompanying Notes to the Schedule of Expenditures of Federal Awards

FEDERAL AWARDS SECTION

200| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

FEDERAL AWARDS SECTION

Notes to Schedule of Expenditures of Federal

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 201

FEDERAL AWARDS SECTION

PROSPER INDEPENDENT SCHOOL DISTRICT NOTES ON ACCOUNTING POLICIES FOR FEDERAL AWARDS YEAR ENDED AUGUST 31, 2023 

For all Federal programs, the District uses the fund types specified in Texas Education Agency’s Financial Accountability System Resource Guide.



General Fund – is used to account for among other things, resources related to the United States Department of Defense ROTC program and the United States Department of Education’s Impact Aid.



Special Revenue Funds – are used to account for resources restricted to, or designated for, specific purposes by a grantor. Federal and state financial assistance generally is accounted for in a Special Revenue Fund. Generally, unused balances are returned to the grantor at the close of specified project periods.



The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. The Governmental Fund types are accounted for using a current financial resources measurement focus. All Federal grant funds were accounted for in a Special Revenue Fund or, in some instances, in the General Fund which are Governmental Fund type funds.

With this measurement focus, only current assets and current liabilities and the fund balance are included on the balance sheet. Operating statements of these funds present increases and decreases in net current assets. The modified accrual basis of accounting is used in the Governmental Fund types. This basis of accounting recognizes revenues in the accounting period in which they become susceptible to accrual, i.e., both measurable and available, and expenditures in the accounting period in which the fund liability is Incurred, if measurable, except for unmatured interest on General Long-Term Debt, which is recognized when due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned. 

The period of performance for federal grant funds for the purpose of liquidation of outstanding obligations made on or before the ending date of the federal project period extended 90 days beyond the federal project period ending date, in accordance with provisions in Section H, Period of Performance of Federal Funds, 3 CFR Section 200.343 (b).



Assistance listing numbers for commodity assistance are the assistance listing numbers of the programs under which USDA donated the commodities.



Indirect cost reimbursement for federal programs for this fiscal year was received in the amount of $1,539,671.



Reconciliation Information: Amount reported on the Schedule of Expenditures of Federal awards SHARS Revenue reported in the General Fund Federal Excise Tax Reimbursements Federal E-Rate Reimbursements Tax Credit Revenue reported in the Debt Service Fund Plus Revenue Received for Prior Year COVID Expenditures

$13,838,010 1,212,073 248,357 812,216 -

Total Federal Program Revenue

$16,110,656

202| 2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT

FEDERAL AWARDS SECTION

2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT | 203

Prosper Independent School District 605 East Seventh Street, Prosper, TX 75078 www.prosper-isd.net