SIERRA JOINT COMMUNITY COLLEGE DISTRICT COUNTY OF

Transcription

SIERRA JOINT COMMUNITY COLLEGE DISTRICT
COUNTY OF PLACER
ROCKLIN, CALIFORNIA
FINANCIAL STATEMENTS
WITH SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED June 30, 2011
AND
INDEPENDENT AUDITORS' REPORT
ORGANIZATION
June 30, 2011
The District is comprised of areas in Placer, Nevada, El Dorado and Sacramento
Counties. The District operates a central campus located on a 299-acre site in the city of
Rocklin, in southwestern Placer County, California, and two small satellite campuses located in
Grass Valley and Truckee in Nevada County. Classes are also taught at Roseville and other
sites throughout the 3,200-square-mile territory of the District. The District currently serves
approximately 22,000 students who are enrolled in both day and evening classes, has a full
time faculty of approximately 206, and a part time faculty of approximately 966. Many areas of
study are offered as well as vocational and technical education and many courses of instruction
are transferable to accredited four-year colleges and universities.
The District is governed by a seven-member Board of Trustees, each member of which
is elected to a four-year term. Elections for positions to the Board are held every two years,
alternating between three and four available positions. The management and policies of the
District are administered by a Superintendent appointed by the Board who is responsible for
day-to-day District operations as well as the supervision of the District's other key personnel.
The Board of Trustees and District Administration for the fiscal year ended
June 30, 2011, were composed of the following members:
BOARD OF TRUSTEES
Members
Mr. Aaron Klein
Mr. Scott Leslie
Mr. E. Howard Rudd
Ms. Nancy Palmer
Ms. Cari Dawson Bartley
Mr. David Ferrari
Office
Term Expires
President
Vice President/Clerk
Trustee
Trustee
Trustee
Trustee
December 2012
December 2012
December 2014
December 2014
December 2014
December 2014
Note: Trustee Area 4 was vacant as of June 30, 2011, due to the resignation of Ms. Elaine
Rowen Reynoso. Mr. Bill Halldin was appointed July 12, 2011, to fill that seat for the
remainder of the term, expiring December 2012.
BOARD AUDIT COMMITTEE MEMBERS
Mr. David Ferrari (Chair)
Mr. E. Howard Rudd
Mr. Aaron Klein
DISTRICT ADMINISTRATION
Dr. Leo E. Chavez
Superintendent/President
Ms. Kerri Hester
Director of Finance
Note: Mr. William H. Duncan, IV, became the Superintendent/President of the District effective
July 1, 2011, following the retirement of Dr Leo E. Chavez effective June 30, 2011.
For the Year Ended June 30, 2011
TABLE OF CONTENTS
Page
Independent Auditors' Report
Management's Discussion and Analysis
1-2
3-13
Basic Financial Statements:
Statement of Net Assets
14
Discretely Presented Component Unit - Sierra College
Foundation - Statement of Net Assets
15
Statement of Revenues, Expenses and Change in Net Assets
16
Foundation - Statement of Revenues, Expenses and
Change in Net Assets
17
Statement of Cash Flows
18-19
Foundation - Statement of Cash Flows
20
Statement of Fiduciary Net Assets
21
Statement of Change in Fiduciary Net Assets
22
Notes to Financial Statements
23-52
Required Supplementary Information:
Schedule of Other Postemployment Benefits (OPEB) Funding Progress
53
Supplementary Information:
Independent Auditors' Report on Supplementary Information
54-55
Combining Statement of Net Assets by Fund
56-57
Combining Statement of Revenues, Expenses and Change in
Net Assets by Fund
58-59
Schedule of Expenditures of Federal Awards
60-61
Schedule of State Financial Awards
62
TABLE OF CONTENTS
(Continued)
Page
Supplementary Information: (Continued)
Schedule of Workload Measures for State General Apportionment
63
Reconciliation of Annual Financial and Budget Report (CCFS-311)
with Audited Financial Statements
64
Notes to Supplementary Information
65
Independent Auditors' Report on State Compliance Requirements
66-67
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
68-69
Independent Auditors' Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major
Program and on Internal Control over Compliance in Accordance
with OMB Circular A-133
70-71
Findings and Recommendations:
Schedule of Audit Findings and Questioned Costs
Summary Schedule of Prior Audit Findings
72-79
80
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
INTRODUCTION
This section of Sierra Joint Community College District’s financial statements presents our discussion and
analysis of the District’s financial performance during the fiscal year ended June 30, 2011. The discussion
has been prepared by management and should be read in conjunction with the financial statements and
notes which follow this section.
The Sierra Joint Community College District was established in 1936, covers over 3,200 square miles and
serves Placer, Nevada and parts of El Dorado and Sacramento counties. The District includes one
comprehensive community college and two centers. Students may choose from 82 associate degree majors
and 53 certificate programs, complete courses toward the first two years of a bachelor’s degree program or
pursue courses for professional or other purposes.
The District attained fiscal independence from Placer County Office of Education in 2008-2009. The
application process required an extensive evaluation of our accounting controls to ensure they met the
standards required by the Board of Governors. The District passed this evaluation and was granted fiscal
independence by the Board of Governors effective July 1, 2009.
ATTENDANCE AND FINANCIAL HIGHLIGHTS

The District’s primary funding source is based upon the apportionment formula from the State of
California. The primary basis of this apportionment is the calculation of Full-Time Equivalent
Students (FTES). During the fiscal year 2010-2011, funded FTES for credit and noncredit courses
totaled 15,560.43 compared to 15,181.24 for 2009-2010. FTES increased 370.24 for credit and
increased 8.95 FTES for non-credit courses. This represents a 2.5% increase.
3
JUNE 30, 2011

The 2010-2011 Budget Act provided no cost-of-living adjustments (COLA) for the third year in a
row; however it did provide growth/restoration funds. The District received $1.7 million of
growth funding.

General Fund revenues for the year were $92.3 million, an increase of 0.8% from prior year’s
revenue of $91.6 million.

Revenues for various categorical programs were reduced by $1.4 million or 12.7%.

The District ended the fiscal year 2010-2011 with a net decrease in fund balance in the unassigned
General Fund leaving the ending fund reserve at $12.0 million, 13.59% of general fund expenses.
The Board of Trustees has set a goal to maintain at between eight and twelve percent reserve for
the unrestricted General Fund.

Medical benefits for both employees and retirees increased $1 million or 6.4% over the prior year.
For employees hired before July 1, 1994, the District pays medical premiums upon retirement.
The District has accounted for retiree benefits on a “pay-as-you-go basis.” The actuarial accrued
liability at a 4½% discount rate for the District as of June 30, 2011, is $77 million.

The District paid down $2.8 million in long-term debt.

The District is required to allocate 50 percent of unrestricted general fund expenses to faculty
compensation (50 percent law). The District is in compliance and again has exceeded this
requirement. In 2010-2011 the District allocated 50.49% to faculty compensation.
OVERVIEW OF THE FINANCIAL STATEMENTS
The Sierra Joint Community College District’s financial statements are presented in accordance with
Governmental Accounting Standards Board (GASB) Statements No. 34, Basic Financial Statements - and
Management’s Discussion and Analysis - for State and Local Governments and No. 35, Basic Financial
Statements – and Management Discussion and Analysis - for Public College and Universities. These
statements allow for the presentation of financial activity and results of operations which focuses on the
District as a whole. The entity wide financial statements present the overall results of operations whereby
all of the District’s activities are consolidated into one total versus the traditional presentation by fund type.
The focus of the Statement of Net Assets is designed to be similar to the bottom line results of the District.
This statement combines and consolidates current financial resources with capital assets and long-term
obligations. The Statement of Revenues, Expenses, and Change in Net Assets focuses on the costs of the
District’s operational activities with revenues and expenses categorized as operating and nonoperating, and
expenses are reported by natural classification. The Statement of Cash Flows provides an analysis of the
sources and uses of cash within the operations of the District.
The California Community Colleges Chancellor’s Office has recommended that all State community
colleges follow the Business-Type Activity (BTA) model for financial statement reporting purposes.
This annual report consists of three parts: management’s discussion and analysis (this section), three basic
financial statements that provide information on the District’s activities as a whole (the Statement of Net
Assets; the Statement of Revenues, Expenses, and Change in Net Assets; and the Statement of Cash
Flows),and Supplementary Information.
4
JUNE 30, 2011
FINANCIAL ANALYSIS OF THE DISTRICT
Condensed financial information is as follows:
Statement of Net Assets
The Statement of Net Assets presents the assets, liabilities and net assets of the District as of the end of the
fiscal year and is prepared using the accrual basis of accounting, which is similar to the accounting basis
used by most private sector organizations.
The difference between total assets and total liabilities is one indicator of the current financial condition of
the District; the change in net assets is an indicator of whether the overall financial condition has improved
or worsened during the year. Assets and liabilities are generally measures using current values. One
notable exception is capital assets, which are stated at historical cost less accumulated depreciation.
The Net Assets are divided into three major categories. The first category, invested in capital assets,
provides the equity amount in property, plant and equipment owned by the District. The second category is
expendable restricted net assets. These net assets are available for expenditure by the District, but must be
spent for purposes as determined by external entities and/or donors that have placed time or purpose
restricted on the use of the assets. The final category is unrestricted net assets that are available to the
District for any lawful purpose of the District.
5
JUNE 30, 2011
A summary of the Statement of Net Assets as of June 30, 2011 and June 30, 2010 is shown below:
2010-2011
Increase
(Decrease)
2009-2010
Percent
Change
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable and other assets, net
Total Current Assets
Noncurrent assets
Restricted cash and cash equivalents
Deferred charges and other
Capital assets (net of depreciation)
Total Noncurrent Assets
TOTAL ASSETS
$
21,092,718
6,642,510
27,735,228
$
18,705,010
5,332,880
24,037,890
$
2,387,708
1,309,630
3,697,338
12.8%
24.6%
15.4%
$
15,583,465
1,798,247
145,823,737
163,205,449
$
24,473,354
1,436,207
143,010,925
168,920,486
$
(8,889,889)
362,040
2,812,812
(5,715,037)
-36.3%
25.2%
2.0%
-3.4%
$ 190,940,677
$ 192,958,376
$
(2,017,699)
-1.0%
$
3,800,669
5,561,349
3,673,788
13,035,806
$
6,167,415
5,238,775
3,818,680
15,224,870
$
(2,366,746)
322,574
(144,892)
(2,189,064)
-38.4%
6.2%
-3.8%
-14.4%
$
87,339,350
5,064,628
92,403,978
$
89,343,252
3,611,407
92,954,659
$
(2,003,902)
1,453,221
(550,681)
-2.2%
40.2%
-0.6%
(2,739,745)
-2.5%
(2,619,521)
-4.4%
1,007
4,378,708
(4,282,661)
3,244,513
722,046
6.1%
75.4%
-99.9%
21.8%
0.9%
(2,017,699)
-1.0%
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities
Deferred Revenue
Current portion of long-term obligations
Total Current Liabilties
Noncurrent liabilities
Current portion of long-term obligations
Other long-term obligations
Total Noncurrent Liabilties
TOTAL LIABILITIES
105,439,784
108,179,529
NET ASSETS
Invested in Capital Assets, Net of Related Debt
Restricted for:
Scholarships and Loans
Capital Projects
Debt Service
Unrestricted
TOTAL NET ASSETS
TOTAL LIABILITIES AND NET ASSETS
$
57,139,310
$
59,758,831
17,396
10,189,293
5,973
18,148,921
85,500,893
16,389
5,810,585
4,288,634
14,904,408
84,778,847
$ 190,940,677
$ 192,958,376
$
$
This schedule has been prepared from the District’s Statement of Net Assets which is presented on an
accrual basis of accounting whereby assets are capitalized and depreciated.
6
JUNE 30, 2011

Approximately 98% of the cash balance is cash deposited in the Placer County Treasury Pool and
approximately 2% is cash deposited in local financial institutions. The Statement of Cash Flows
contained within these financial statements provides greater detail regarding the sources and uses
of cash and the net increase or decrease of cash during the fiscal year.

The majority of the accounts receivable balance is from state apportionment, student enrollment
fees, federal and state grant programs and federal and state entitlement programs.

There was a 36.3% decrease in Restricted Cash and Cash Equivalents. This decrease was mainly
driven by the cash reduction in the General Obligation Bond Construction Fund (School Facilities
Improvement District No. 2) for the expansion and remodel of the Nevada County Campus
Center.

Accounts payable are amounts due as of the fiscal year-end for goods and services received. Total
accounts payable are $3.8 million at year end, representing a 38.4% decrease from fiscal year
2009-2010.

The District holds funds for scholarship, loans, and debt service reserves as required by various
federal and state regulations. Net assets held for these purposes totaled $10.2 million.

Compensated absences (accrued vacation not used at June 30), reflected as liability, totaled $1.1
million.

At year-end, the District had $96 million in General Obligation Bonds, Certificates of
Participation (COPs) and other long-term debt outstanding. The District continued to pay down its
debt, retiring $2.8 million of the COPs, capital leases, and bonds.

The General Obligation Bonds—School Facilities Improvement District—was upgraded to an
AA- rating from Standard and Poor’s in 2011 based on the District’s fiscal stability, and overall
creditworthiness.
7
JUNE 30, 2011
8
JUNE 30, 2011
Statement of Revenues, Expenses, and Change in Net Assets
The change in total net assets presented on the Statement of Net Assets based on the activity presented in
the Statement of Revenues, Expense and Change in Net Assets. The purpose of this statement is to present
the operating and non-operating revenues earned (whether received or not) by the District, the operating
and non-operating expenses incurred (whether paid or not) by the District, and any other revenues,
expenses, gains and/or losses earned or incurred by the District.
Operating activities are those in which a direct payment or exchange is made for the receipt of specified
goods or services. As an example, tuition fees paid by the student are considered an exchange for
instructional services. This activity is considered an operating activity. The receipt of state apportionments
and property taxes do not include this exchange relationship between payment and receipt of goods or
services. These revenues and related expenses are classified as non-operating activities.
A summary of the Statement of Revenues, Expenses, and Changes in Net Assets for the year ended
June 30, 2011 and June 30, 2010 is shown below.
2010-2011
2009-2010
Increase
Percent
(Decrease)
Change
OPERATING REVENUES
Net Tuition & Fees
$
Grants & Contracts
11,746,243
$
8,894,929
11,262,148
$
10,722,480
484,095
4.3%
(1,827,551)
-17.0%
Auxiliary
667,861
566,375
101,486
17.9%
Interest
451,587
1,048,156
(596,569)
-56.9%
21,760,620
23,599,159
(1,838,539)
-7.8%
-2.9%
TOTAL OPERATING REVENUES
OPERATING EXPENSES
Salaries
52,517,379
54,070,386
(1,553,007)
Employee Benefits
16,726,826
15,718,012
1,008,814
6.4%
Supplies, Material & Other
16,200,257
19,297,594
(3,097,337)
-16.1%
Student Aid
24,371,562
19,873,747
4,497,815
22.6%
Utilities
2,183,143
1,894,468
288,675
15.2%
Depreciation
4,797,210
4,299,253
497,957
11.6%
116,796,377
115,153,460
1,642,917
1.4%
TOTAL OPERATING EXPENSES
NON-OPERATING ACTIVITY
State Revenues
2,716,411
2,674,766
41,645
1.6%
Local Property Taxes & Apportionments
74,220,508
72,002,269
2,218,239
3.1%
Pell Grants
22,497,883
17,864,789
4,633,094
25.9%
369,527
391,918
(22,391)
-5.7%
(4,588,303)
(3,977,461)
(610,842)
15.4%
(99,123)
-15.5%
Interest Income
Interest Expense
Other Non-Operating Revenue
TOTAL NON-OPERATING ACTIVITY
541,777
640,900
95,757,803
89,597,181
6,160,622
6.9%
(1,957,120)
2,679,166
-136.9%
86,735,967
(1,957,120)
-2.3%
722,046
0.9%
INCREASE (DECREASE) IN NET ASSETS
722,046
BEGINNING NET ASSETS
ENDING NET ASSETS
84,778,847
$
85,500,893
$
84,778,847
$
This schedule has been prepared from the District’s Statement Revenues, Expenses, and Change in Net
Assets.
The primary operating receipts are student tuition and fees. The primary operating expense of the District
is the payment of salaries and benefits to instructional and classified support staff.
9
JUNE 30, 2011

The primary components of tuition and fees are the $26 per unit enrollment fee that is charged to
all students registering for classes and the additional $190 per unit fee that is charged to all nonresident students. Enrollment fees received, increased by 4.3% due to the 2.5% increase in Fulltime Equivalent Students (FTES).

Property tax revenue and State general apportionments received increased by 3%. The District’s
apportionment included 0% for COLA, a 2.21% growth cap and was subject to a .5% deficit.

The interest income is primarily the result of earnings on cash held at the Placer County Treasury.

Personnel costs account for 59% of Operating expenses in fiscal year 2011 compared to 61% in
2010.

During the 2010-2011 fiscal year, the District instituted District-wide expense reductions in the
discretionary areas of supplies, materials and other operating expenses. These reductions resulted
in a 16.1% decrease in supplies, material and other operating expenses from prior year.

Due to more students qualifying for financial aid, student aid expense increased by $4.5 million.
This represents a 22.6% increase.

Four Nevada County Campus buildings were put in service in 2010-2011. This drove an 11.6%
increase in depreciation expense from $4.3 million in 2009-2010 to $4.8 million in 2010-2011.

Expenses for employee salaries and statutory benefits were increased for step, column and
longevity, but attrition, reductions in overtime and reduced use of temporary and student
employees decreased salary costs. Benefit expenses increased driven by an increase in retiree
benefit costs and an increase in employer-paid pension contributions. The combined expense was
a decrease of $544,193.

The District adopted Governmental Accounting Standards Board Statement 45, Accounting and
Financial Reporting by Employers for Postemployment Benefits Other Than Pensions in 20082009. GASB Cod. Sec. P50. 108-109 requires employers to recognize postemployment healthcare
expense systematically over periods approximating employees’ years of service. The District
engaged an actuarial service to calculate the liability and accompanying annual required
contribution (ARC). The ARC for the District for 2010-2011 is $5.4 million based on a 30 year
amortization period. This amount is netted against the pay as you go benefit expenses of $3.2
million, resulting in a $2.2 million additional expense booked in 2010-2011 to recognize our
annual amortized requirement.
10
JUNE 30, 2011
11
JUNE 30, 2011
Statement of Cash Flows
The Statement of Cash Flows provides information about cash receipts and cash payments during the fiscal
year. The statement also helps users assess the District’s ability to generate positive cash flows, meet
obligations as they come due and the need for external financing.
The Statement of Cash Flows is divided into five parts. The first part reflects operating cash flows and
shows the net cash used by the operating activities of the District. The second part details cash received for
non-operating, non-investing, and non-capital financing purposes. The third part shows cash flows from
capital and related financing activities. This part deals with the cash used for the acquisition and
construction of capital and related items. The fourth part provides information from investing activities and
the amount of interest received. The last section reconciles the net cash used by operating activities to the
operating loss reflected on the Statement of Revenues, Expenses and Change in Net Assets.
A summary of the Statement of Cash Flows as of June 30, 2011 and June 30, 2010 is shown below.
2010-2011
2009-2010
Increase
(Decrease)
$ (93,698,214)
$ (86,034,667)
$ (7,663,547)
Percent
Change
CASH PROVIDED BY (USED IN)
Operating Activities
Non-capital financing activities
Capital and related financing activites
98,605,373
90,036,332
8,569,041
(12,122,848)
(13,386,324)
1,263,476
713,508
Investing activities
1,294,539
(581,031)
8.9%
9.5%
-9.4%
-44.9%
NET INCREASE (DECREASE) IN CASH AND CASH EQUIV.
(6,502,181)
(8,090,120)
1,587,939
-19.6%
CASH BALANCE, BEGINNING OF YEAR
43,178,364
51,268,484
(8,090,120)
-15.8%
(6,502,181)
-15.1%
CASH BALANCE, END OF YEAR
$
36,676,183
$
43,178,364
$

Cash receipts from operating activities are from student tuition and from federal state and local
grants. Uses of cash from operating activities consists of payments to employees, vendors and
students. The 8.9% increase in cash used for operating activities is mainly driven by increased
student aid payments due to more students qualifying for financial aid.

Cash received from state apportionment, based on the workload measures generated by the
District, accounts for 21.0% and 15.4% of non-capital financial for fiscal years 2011 and 2010,
respectively. Cash received from property taxes account for 55.8% in 2011 and 67.5% for 2010.
State apportionment increased by $9.6 million or 86.1%, whereas property tax receipts decreased
by $5.7 million or 9.4% from 2010 to 2011.

Capital and related financing activities include cash provided from local property taxes collected
for debt service, state apportionment for capital purposes and interest on capital investments. Cash
outflows relate to purchases of capital assets and principal and interest on capital debt. Changes in
cash inflows were comprised of a decrease in state apportionment for capital purposes and local
property taxes of $1.6 million. Changes in cash outflows were comprised of a decrease in capital
purchase spending of $3.2 million.

Cash received from investing activities declined due to a decrease in interest earned on cash and
cash equivalents from $1 million in 2010 to $451,587 in 2011, a 56.9% decrease.
12
JUNE 30, 2011
ECONOMIC FACTORS THAT MAY AFFECT THE FUTURE

Although 2.21% growth funding is being distributed by the state in 2010-2011, the increase does
not offset the drastic reductions made in 2009-10, nor does it offset the 2011-2012 reductions in
state funding. The 2009-2010 cuts included a 3.39% workload reduction and a nearly 50%
reduction to many categorical programs, some of whose expenses are federally mandated. The
2011-2012 state funding cuts include a budgeted 6.2% reduction, up to an 8.7% reduction based
on state revenues received by December 15, 2011. Additionally, the 2011-2012 year is the fourth
year that the state budget does not include a Cost of Living adjustment. Per UCLA’s Anderson
Forecast, the State’s economic climate won’t see any improvement until the end of 2012.

Compounding the problem of reduced State funding has been the annual increases in the District’s
operational costs. These costs include increases in utilities, insurance, salary and benefits, and
other contractual costs. The District has control over discretionary costs and some contractual
costs. However, the District has no control over certain cost increases such as utility rates,
insurance rates, employer-paid portion of pension costs, and employer paid state unemployment
insurance.

The District has been able to absorb the cost reductions without a negative impact to the general
fund reserves through 2010-2011. In 2011-2012, the District will use one-time and ongoing
revenues to continue to serve our students. The 2011-2012 adopted budget included a planned
$5.3 million change in fund balance deficit. The Board policy requires General Fund reserves to
be maintained between eight and twelve percent. The 2011-2012 General Fund reserves are
targeted to be within the Board policy.

In budgeting for 2011-2012, the District proactively assumed that the full 8.7% reduction in State
funding would be realized. Given the State’s unstable economic climate , the District used
conservative revenue projections in the budget it adopted on September 13, 2011, specifically to
protect itself from the potential revenue losses.

The District is formulating a plan to reduce expenses with a goal to balance the budget in 20122013.
13
STATEMENT OF NET ASSETS
June 30, 2011
ASSETS
Current assets:
Cash and cash equivalents (Note 2)
Accounts receivable, net (Note 3)
Note receivable - current portion (Note 4)
Inventory
Prepaid expenses
$
Total current assets
21,092,718
5,864,390
110,000
50,597
617,523
27,735,228
Noncurrent assets:
Restricted cash, cash equivalents and investments (Note 2)
Note receivable (Note 4)
Capitalized debt issuance costs, net (Note 8)
Capital assets, net (Note 5)
15,583,465
440,000
1,358,247
145,823,737
Total noncurrent assets
163,205,449
Total assets
$
190,940,677
$
1,994,693
5,561,349
955,108
1,077,124
16,664
2,580,000
850,868
LIABILITIES
Current liabilities:
Accounts payable
Deferred revenue (Note 6)
Accrued payroll
Compensated absences payable (Note 8)
Capitalized leases - current portion (Note 8)
Long-term debt - current portion (Note 8)
Accrued interest on debt
Total current liabilities
13,035,806
Noncurrent liabilities:
Capitalized leases - noncurrent portion (Note 8)
Accreted interest on bonds (Note 8)
Long-term debt - noncurrent portion (Note 8)
19,404
5,045,224
87,339,350
Total noncurrent liabilities
92,403,978
Total liabilities
105,439,784
Commitments and contingencies (Notes 7, 12 and 17)
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Scholarships and loans
Capital projects
Debt services
Unrestricted
57,139,310
17,396
10,189,293
5,973
18,148,921
Total net assets
85,500,893
Total liabilities and net assets
$
The accompanying notes are an integral
part of these financial statements.
14
190,940,677
DISCRETELY PRESENTED COMPONENT UNIT SIERRA COLLEGE FOUNDATION
(A Nonprofit Organization)
STATEMENT OF NET ASSETS
June 30, 2011
ASSETS
Current assets:
Receivable from District (Note 3)
Other receivables (Note 3)
$
904,991
2,564
212,471
1,120,026
Investments (Note 2)
4,487,488
Total assets
$
5,607,514
$
81,579
LIABILITIES
Accounts payable and accrued expenses
NET ASSETS
Unrestricted
Temporarily restricted
Permanently restricted for endowments (Note 16)
1,833,858
1,294,198
2,397,879
Total net assets
5,525,935
$
15
5,607,514
STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS
Operating revenues:
Tuition and fees
Less: scholarship discounts and allowances
$
Net tuition and fees
16,995,302
(5,249,059)
11,746,243
Grants and contracts, non-capital:
Federal
State
Local
Auxiliary enterprise sales and charges
Interest
1,852,870
5,787,010
1,255,050
667,861
451,586
Total operating revenues
21,760,620
Operating expenses (Note 14):
Salaries
Employee benefits (Notes 10 and 11)
Supplies, materials, and other operating expenses
and services (Note 15)
Student financial aid and scholarships
Utilities
Depreciation (Note 5)
52,517,379
16,726,826
16,200,257
24,371,562
2,183,143
4,797,210
Total operating expenses
116,796,377
Loss from operations
(95,035,757)
Non-operating revenues (expenses):
State apportionment, non-capital
Local property taxes (Note 9)
State taxes and other revenues
Federal grants - Pell
Investment income, noncapital
Investment income, capital
Interest expense on capital asset-related debt, net
Other non-operating revenues
15,311,557
55,047,708
2,716,411
22,497,883
261,921
107,606
(4,588,303)
431,069
Total non-operating revenues (expenses)
91,785,852
Loss before capital revenues
(3,249,905)
Capital revenues:
Grants and gifts, capital
Local property taxes and revenues (Note 9)
110,708
3,861,243
Total capital revenues
3,971,951
Change in net assets
722,046
Net assets, July 1, 2010
84,778,847
Net assets, June 30, 2011
$
16
85,500,893
DISCRETELY PRESENTED COMPONENT SIERRA COLLEGE FOUNDATION
STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS
Temporarily
Restricted
Unrestricted
Revenues, gains and other support:
Contributions and grants
Investment income
Net change in the fair value of
investments
Special events and other revenues
$
21,194
27,123
$
250,469
55,890
Permanently
Restricted
$
488,531
144,509
309,713
216,491
94,943
Total revenues, gains and other support
before assets released from restrictions
and other transfers
502,539
617,793
488,531
Net assets released from restrictions and
other transfers
579,443
(676,639)
97,196
1,081,982
(58,846)
585,727
Total revenues, gains and other
support
Total
$
760,194
83,013
361,000
404,656
1,608,863
1,608,863
District support and Foundation expenses:
Scholarships
Academic program support
Grants
Administration
Fundraising
183,153
37,574
205,467
267,155
127,281
183,153
37,574
205,467
267,155
127,281
Total District support and Foundation
expenses
820,630
820,630
261,352
(58,846)
1,572,506
$
1,833,858
1,353,044
$
1,294,198
17
$
585,727
788,233
1,812,152
4,737,702
2,397,879
$
5,525,935
STATEMENT OF CASH FLOWS
Cash flows from operating activities:
Tuition and fees
Federal, state and local grants and contracts
Payments to suppliers
Payment to employees
Payment to students
Collection of note receivable
Auxiliary enterprises sales and charges
$
Net cash used in operating activities
12,068,817
7,235,358
(20,959,734)
(68,448,954)
(24,371,562)
110,000
667,861
(93,698,214)
Cash flows from noncapital financing activities:
State appropriations
Pell grants
Local property taxes
Gifts and grants for other than capital purposes
20,726,046
22,497,883
55,047,708
333,736
Net cash provided by noncapital financing activities
98,605,373
Cash flows from capital and related financing activities:
Local property taxes and other revenues for capital purposes
Purchase of capital assets
Capital grants and gifts received
Proceeds from capital debt
Principal paid on capital debt
Interest paid on capital debt, net
Interest on capital investments
1,163,165
(7,612,510)
110,708
79,730
(2,827,175)
(3,144,372)
107,606
Net cash used in capital and related financing activities
(12,122,848)
Cash flows from investing activities:
Interest income on cash and cash equivalents
Interest income on investments
451,585
261,923
Net cash provided by investing activities
713,508
Net decrease in cash and cash equivalents
(6,502,181)
Cash and cash equivalents, beginning of year
43,178,364
Cash and cash equivalents, end of year
$
(Continued)
18
36,676,183
(Continued)
Reconciliation of loss from operations to net cash used in
operating activities:
Loss from operations
Adjustments to reconcile loss from operations to net cash
used in operating activities:
Depreciation expense
Changes in assets and liabilities:
Receivables, net
Inventory
Prepaid expenses
Accounts payable and accrued payroll
Deferred revenue
Compensated absences
Interest on cash and cash equivalents
Net cash used in operating activities
$ (95,035,757)
4,797,210
(876,347)
12,045
(212,103)
(2,338,486)
322,574
84,235
(451,585)
$ (93,698,214)
Supplementary disclosure of non-cash transactions:
Amortization of premiums on debt
$
19
97,130
DISCRETELY PRESENTED COMPONENT UNIT SIERRA COLLEGE FOUNDATION
Cash flows from operating activities:
Donations received from contributions and other revenues
Payments to suppliers for goods and services
Payments to/on behalf of employees
Payments to/on behalf of students
Other receipts and payments
$
Net cash provided by operating activities
963,697
(491,246)
(100,951)
(183,153)
113,077
301,424
Cash flows from investing activities:
Purchase of investments
Investment management fees
Proceeds from sales of investments
Proceeds from gain distributions
(1,821,643)
(35,087)
27,622
1,810
Net cash used in investing activities
(1,827,298)
Net decrease in cash and cash equivalents
(1,525,874)
Cash and cash equivalents - beginning of year
2,430,865
Cash and cash equivalents - end of year
Reconciliation of change in net assets to net cash
provided by operating activities:
Realized loss on sales of investments
Investment management fees
Unrealized gain on investments
Changes in assets and liabilities:
Receivable from District and Sierra Auto Fair
Prepaid expenses
Accounts payable and accrued expenses
Deferred revenue
Net cash provided by operating activities
20
$
904,991
$
788,233
(5,023)
35,087
(361,000)
(199,438)
4,000
45,280
(5,715)
$
301,424
STATEMENT OF FIDUCIARY NET ASSETS
June 30, 2011
Agency
Funds
Associated
Students
Fund
Trust
Fund
OPEB
Trust
ASSETS
Investments (Note 2)
Accounts receivable
$
385,163
$
8,040,186
4,344
Total assets
389,507
8,040,186
LIABILITIES
Accounts payable
Deferred revenue
Amounts held for others
480
31,036
357,991
Total liabilities
389,507
NET ASSETS
Total net assets
$
21
-
$
8,040,186
STATEMENT OF CHANGE IN FIDUCIARY NET ASSETS
June 30, 2011
OPEB
Trust
Revenues:
Interest income
Unrealized gain on investment
Other local sources
$
Total revenues
922,646
232,305
151,276
1,306,227
Expenditures:
Contract services and operating expenditures
74,633
Excess of revenues over expenditures
1,231,594
6,808,592
$
22
8,040,186
NOTES TO BASIC FINANCIAL STATEMENTS
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
Sierra Joint Community College District (the "District") is a political subdivision of the
State of California and provides educational services to the local residents of the
surrounding area. While the District is a political subdivision of the State, it is not a
component unit of the State in accordance with the provisions of Governmental
Accounting Standards Board (GASB) Codification Section (Cod. Sec) 2100.101. The
District is classified as a state instrumentality under Internal Revenue Code Section 115.
The decision to include potential component units in the reporting entity was made by
applying the criteria set forth in generally accepted accounting principles (GAAP) and
GASB Cod. Sec. 2100.101 as amended by GASB Cod. Sec. 2100.138. The three
criteria for requiring a legally separate, tax-exempt organization to be presented as a
component unit are the "direct benefit" criterion, the "entitlement/ability to access"
criterion, and the "significance" criterion. The District identified the Sierra Community
College Financing Corporation (the "Financing Corporation") and the Sierra College
Foundation (the "Foundation") as its potential component units.
The Financing Corporation is an organization whose activities to date have been limited
to the issuance of Certificates of Participation and entering into lease arrangements with
the District as discussed in Note 8. The District and the Financing Corporation have
financial and operational relationships which met the reporting entity definition of GASB
Cod. Sec. 2100.101 for inclusion of the Financing Corporation as a component unit of
the District. Accordingly, the financial activities of the Financing Corporation have been
blended with the financial statements of the District.
The Foundation is a nonprofit, tax-exempt organization dedicated to providing financial
benefits generated from fundraising efforts and investments earnings to the District.
The funds contributed by the Foundation to the District are significant to the District's
financial statements. The District applied the criteria for identifying component units in
accordance with GASB Cod. Sec. 2100.138 and therefore, the District has classified the
Foundation as a component unit that will be discretely presented in the District's
financial statements.
Financial Presentation
For financial presentation purposes, the Financing Corporation financial activity has
been blended, or combined, with the financial data of the District.
Basis of Accounting
For financial reporting purposes, the District is considered a special-purpose
government engaged only in business-type activities as defined by GASB. Under this
model, the District's financial statements provide a comprehensive entity-wide
perspective of the District's financial position and activities. Accordingly, the District's
financial statements have been presented using the economic resources measurement
focus and the accrual basis of accounting. Under the accrual basis, revenues are
recognized when earned and expenses are recorded when the obligation has been
incurred. All significant intra-agency transactions have been eliminated.
23
(Continued)
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basis of Accounting (Continued)
The Foundation's financial statements are prepared on the accrual basis of accounting.
Recognition of contributions is dependent upon whether the contribution is restricted or
unrestricted. Net assets are classified on the Statement of Net Assets as unrestricted,
temporarily restricted or permanently restricted net assets based on the absence or
existence of donor-imposed restrictions.
The District has the option to apply all Financial Accounting Standards Board (FASB)
pronouncements issued after November 30, 1989, unless FASB conflicts with GASB.
The District has elected to not apply FASB pronouncements issued after that date.
Cash and Cash Equivalents
For the purposes of the financial statements, cash equivalents are defined as financial
instruments with an original maturity of three months or less. Funds invested in the
Placer County Treasury are considered cash equivalents.
Restricted Cash, Cash Equivalents and Investments
Cash that is externally restricted to make debt service payments, maintain sinking or
reserve funds, or to purchase or construct capital or other noncurrent assets, is
classified as non current assets in the statement of net assets.
Fair Value of Investments
The District records its investment in Placer County Treasury at fair value. Changes in
fair value are reported as revenue in the Statement of Revenues, Expenses and
Change in Net Assets. The fair value of investments, including the Placer County
Treasury external investment pool, at June 30, 2011 approximated their carrying value.
Foundation investments in debt and equity securities are carried at market value.
Realized gains and losses and unrealized appreciation (depreciation) of those
investments are reflected in the Statement of Revenues, Expenses and Change in net
assets. Fair values of investments in county and State investment pools are determined
by the pool sponsor.
Accounts Receivable
Accounts receivable consist of tuition and fee charges to students and auxiliary
enterprise services provided to students, faculty and staff, the majority of each residing
in the State of California. Accounts receivable also include amounts due from the
Federal Government, State and Local Governments, or private sources, in connection
with reimbursements of allowable expenditures made pursuant to the District's grants
and contracts.
Inventory
Inventories are determined on the first-in, first-out (FIFO) method and are stated at the
lower of cost or market.
24
(Continued)
1.
Capital Assets
Capital assets are recorded at cost at the date of acquisition or, if donated, at fair
market value at the date of donation. For equipment, the District's capitalization policy
included all items with a unit cost of $5,000 or more, and estimated useful life of greater
than one year. Renovations to buildings, infrastructure, and land improvements that
significantly increase the value or extend the useful life of the structure are capitalized.
Routine repairs and maintenance are charged to operating expense in the year in which
the expense was incurred.
Depreciation is computed using the straight-line method over the estimated useful lives
of the assets, generally 50 years for buildings, 25 years for portable buildings, 20 years
for site and building improvements, 5-20 years for equipment and vehicles, and 5 years
for technology equipment (such as computers).
The District evaluates capital assets for financial impairment as events or changes in
circumstances indicate that the carrying amounts of such assets may not be fully
recoverable.
Accumulated Sick Leave
Sick leave benefits are not recognized as liabilities of the District. The District's policy is
to record sick leave as an operating expenditure or expense in the period taken since
such benefits do not vest nor is payment probable.
Deferred Revenue
Revenue from Federal, State and local special projects and programs is recognized
when qualified expenditures have been incurred. Tuition, fees and other support
received but not earned are recorded as deferred revenue until earned.
Net Assets
The District's net assets are classified as follows:
Invested in capital assets, net of related debt: This represents the District's total
investment in capital assets, net of associated outstanding debt obligations related to
those capital assets. To the extent debt has been incurred but not yet expended for
capital assets, such amounts are not included as a component of invested in capital
assets, net of related debt.
Restricted net assets: Restricted expendable net assets include resources in which the
District is legally or contractually obligated to spend in accordance with restrictions
imposed by external third parties. Nonexpendable restricted net assets consist of
endowment and similar type funds in which donors or other outside sources have
stipulated, as a condition of the gift instrument, that the principal is to be maintained
inviolate and in perpetuity, and invested for the purpose of producing present and future
income, which may either be expended or added to principal.
25
(Continued)
1.
Net Assets (Continued)
Unrestricted net assets: Unrestricted net assets represent resources derived from
student tuition and fees, State apportionments, and sales and services of educational
departments and auxiliary enterprises. These resources are used for transactions
relating to the educational and general operations of the District, and may be used at the
discretion of the governing board to meet current expenses for any purpose.
Unrestricted net assets at June 30, 2011 includes $6,570,238 designated for bargaining
unit settlements under the District compensation formula. In addition, the District
designates net assets for stores inventory, prepaid expenditures and the revolving
account which totaled $693,670 at June 30, 2011.
When an expense is incurred that can be paid using either restricted or unrestricted
resources, the District typically first applies the expense toward restricted resources,
then to unrestricted resources. This practice ensures fully utilizing restricted funding
each fiscal year.
The Foundation's net assets are classified as follows:



Unrestricted net assets - Net assets not subject to donor-imposed stipulations.
Temporarily restricted net assets - Net assets subject to donor-imposed
stipulations that will be met either by actions of the Foundation and/or the
passage of time.
Permanently restricted net assets - Net assets subject to donor-imposed
stipulations require that they be maintained permanently by the Foundation.
Generally, the donors of these assets permit the Foundation to use all or part of
the income earned on related investments for general or specific purposes.
The Foundation's endowment currently consists of 21 individual funds established for
the purpose of supporting education at the District. The endowment includes both
donor-restricted endowment funds and funds designated by the Board of Directors to
function as endowments. Net assets associated with endowment funds, including funds
designated by the Board of Directors to function as endowments, are classified and
reported based on the existence or absence of donor-imposed restrictions.
26
(Continued)
1.
Net Assets (Continued)
The Board of Directors of the Foundation has interpreted the Uniform Prudent
Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the
fair value of the original gift as of the gift date of the donor-restricted endowment funds
absent explicit donor stipulations to the contrary. As a result of this interpretation, the
Foundation classifies as permanently restricted net assets (a) the original value of the
gifts donated to the permanent endowment, (b) the original value of subsequent gifts to
the permanent endowment, and (c) accumulations to the permanent endowment made
in accordance with the direction of the applicable donor gift instrument at the time the
accumulation is added to the fund. The remaining portion of the donor-restricted
endowment fund that is not classified in permanently restricted net assets is classified
as temporarily restricted net assets until those amounts are appropriated for expenditure
by the organization in a manner consistent with the standard prudence prescribed by
UPMIFA.
The Foundation follows its adopted investment and spending policies for endowment
assets that attempt to provide a predictable stream of funding to programs supported by
its endowments while seeking to maintain purchasing power of the endowment assets.
Endowment assets include those assets of donor-restricted funds that the Foundation
must hold in perpetuity or for a donor-specific period(s) as well as board-designated
funds.
The investment objective is to optimize earnings on all invested funds, while maintaining
the preservation of capital. Risk will be minimized by investing in high quality fixed
income instruments. To the extent that corporate obligations are purchased, those
purchases will be diversified in terms of issuer and industry sector.
State Apportionments
Certain current year apportionments from the State are based on various financial and
statistical information of the previous year. Any prior year corrections due to a
recalculation will be recorded in the year computed by the State.
On-Behalf Payments
GASB Cod. Sec. 2300.120 requires that direct on-behalf payments for benefits and
salaries made by one entity to a third party recipient for the employees of another,
legally separate entity be recognized as revenue and expenditures by the employer
government. The State of California makes direct on-behalf payments for retirement
benefits to the State Teachers and Public Employees Retirement Systems on behalf of
all Community Colleges in California. However, a fiscal advisory issued by the California
Department of Education instructed districts not to record revenue and expenditures for
these on-behalf payments. These payments consist of state general fund contributions
to CalSTRS in the amount of $555,530 (2.017% of salaries subject to CalSTRS).
27
(Continued)
1.
Classification of Revenue
The District has classified its revenues as either operating or nonoperating revenues.
Certain significant revenue streams relied upon for operations are recorded as
nonoperating revenues, as defined by GASB Cod. Sec. C05.101 including State
appropriations, local property taxes, and investment income. Nearly all the District's
expenses are from exchange transactions. Revenues and expenses are classified
according to the following criteria:
Operating revenues: Operating revenues include activities that have the characteristics
of exchange transactions, such as (1) student tuition and fees, net of scholarship
discounts and allowances, (2) sales and services of auxiliary enterprises, and (3) most
Federal, State and local grants and contracts and Federal appropriations.
Nonoperating revenues: Nonoperating revenues include activities that have the
characteristics of nonexchange transactions, such as Pell grants, gifts and contributions,
and other revenue sources described in GASB Cod. Sec. C05.101, such as State
appropriations and investment income.
Contributions
Contributions are recognized as revenues in the period received. Unconditional
promises to give (pledges) are recognized as revenue when the commitment is
communicated to the Foundation. Conditional promises to give are not recognized until
they become unconditional, that is, when the conditions on which they depend are
substantially met. Contributions of assets other than cash are recorded at their
estimated fair value at the date of donation. Contributions are considered available for
unrestricted use unless specifically restricted by the donor. Event revenues received in
advance are deferred and recognized in the period as the events occur.
Scholarship Discounts and Allowances
Student tuition and fee revenue are reported net of scholarship discounts and
allowances in the statement of revenues, expenses and change in net assets.
Scholarship discounts and allowances represent the difference between stated charges
for goods and services provided by the District and the amount that is paid by students
and/or third parties making payments on the students' behalf. Certain governmental
grants, and other federal, state and nongovernmental programs, are recorded as
operating revenues, while Federal Pell Grants are classified as non-operating revenues
in the District's financial statements. To the extent that revenues from such programs
are used to satisfy tuition and fees and other student charges, the District has recorded
a scholarship discount and allowance.
28
(Continued)
1.
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenditures
during the reporting period. Accordingly, actual results may differ from those estimates.
2.
CASH, CASH EQUIVALENTS AND INVESTMENTS
Cash, cash equivalents and investments at June 30, 2011, consisted of the following:
District
Pooled Funds:
Cash in County Treasury
Deposits:
Cash on hand and in banks
Funds invested by Fiscal Agents
Investments
$
$
$
36,676,183
Less: restricted cash, cash
equivalents and investments
Trust
Fund
385,163
904,991
4,487,488
Total cash, cash equivalents
and investments
Net cash, cash equivalents
and investments
30,231,646
827,332
5,617,205
Agency
Funds
Foundation
$
5,392,479
385,163
8,040,186
8,040,186
15,583,465
$
21,092,718
$
5,392,479
$
385,163
$
8,040,186
Deposits - Custodial Credit Risk
Under Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act,
interest-bearing cash balances held in banks are insured up to $250,000 and noninterest bearing cash balances held in banks are fully insured by the Federal Deposit
Insurance Corporation (FDIC) and are collateralized by the respective financial
institution. Cash balances held in banks are insured up to $250,000 by the Federal
Depository Insurance Corporation (FDIC). At June 30, 2011, the carrying amount of the
District's cash on hand and in banks for the primary governmental entity (including
certificates of deposit) was $827,332 and the bank balance was $814,974. The bank
balance amount insured by the FDIC was $250,137.
At June 30, 2011, the carrying amount of the Foundation's cash on hand and in banks
and cash equivalents was $904,991 and the bank balance was $925,798. The bank
balance amount insured by the FDIC was $498,960. The bank balance amount insured
by the SIPC was $426,838.
29
(Continued)
2.
CASH, CASH EQUIVALENTS AND INVESTMENTS (Continued)
Credit Risk
As provided for by in Education Code, Section 41001, a significant portion of the
District's cash balances is deposited with the County Treasurer for the purpose of
increasing interest earnings through County investment activities. Interest earned on
such pooled cash balances is allocated proportionately to all funds in the pool.
In accordance with applicable State laws, the Placer County Treasurer may invest in
derivative securities. However, at June 30, 2011, the Placer County Treasurer has
indicated that the Treasurer's pooled investment fund contained no derivatives or other
investments with similar risk profiles.
The California Government Code requires California banks and savings and loan
associations to secure the District's deposits by pledging government securities as
collateral. The market value of pledged securities must equal 110 percent of an
agency's deposits. California law also allows financial institutions to secure an agency's
deposits by pledging first trust deed mortgage notes having a value of 150 percent of an
agency's total deposits and collateral is considered to be held in the name of the District.
All cash held by the financial institutions is entirely insured or collateralized.
The table below identifies the investment types authorized for the District by the
California Government Code Section 53601. This table also identifies certain provisions
of the California Government Code that address interest rate risk, credit risk, and
concentrations of credit risk.
Authorized Investment Type
Local Agency Bonds or Notes
U.S. Treasury Obligations
U.S. Agency Securities
Bankers Acceptance
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements
Reverse Repurchase Agreements
Medium-Term Notes
Mutual Funds
Mortgage Pass through Securities
Joint Power Authority Pools
County Pooled Investment Funds
Local Agency Investment Funds (LAIF)
Maximum
Maximum
Maturity
Maximum
Percentage
of Portfolio
Investment in
One Issuer
5 years
5 years
5 years
180 days
270 days
5 years
1 year
92 days
5 years
N/A
5 years
N/A
N/A
N/A
None
None
None
40%
25%
30%
None
20%
30%
20%
20%
None
None
None
None
None
None
30%
10%
None
None
None
None
10%
None
None
None
None
During the fiscal year ended June 30, 2011, the District earned $785,651 in investment
income from its cash in the Placer County Treasury.
30
(Continued)
2.
Cash and Investments with Fiscal Agents
Cash and investments with Fiscal Agents totaling $15,583,465 represents cash and
investments held by third party custodians relating to capital projects and related debt
service.
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees are governed by provisions of the
debt agreements, rather than the general provisions of the California Government Code
or the District's investment policy. The table below identifies the investment types that
are authorized for investments held by bond trustees. The table also identifies certain
provisions of these debt agreements that address interest rate risk, credit risk, and
concentration of credit risk.
Maximum
Maturity
Placer County Investment Pool
Five years
Fidelity Institutional Money Market
Treasury Fund, III
N/A
Dreyfus Treasury Fund Premier Shares
N/A
Wells Fargo Treasury Plus Money Market
N/A
Maximum
Percentage
of Portfolio
Maximum
Investment in
One Issuer
None
None
None
None
None
None
None
None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates. As of year
end, the maximum average maturity of the investments contained in the County
investment pool is five years.
Information about the sensitivity of the fair values of the District's investments to market
interest rate fluctuations is provided by the following table that shows the maturity date
of each investment:
Weighted
Average
Maturity
(in Years)
Investment Type
Placer County Investment Pool
Treasury Fund, III
Dreyfus Treasury Fund Premier Shares
Wells Fargo Treasury Plus Money Market
31
4.11
0.0027
0.0027
0.0027
(Continued)
2.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation
to the holder of the investment. This is measured by the assignment of a rating by a
nationally recognized statistical rating organization. Presented below is the minimum
rating required by (where applicable) the California Government Code, the Placer
County Treasury Investment Policy based on California Government Code Section
53635, the District's investment policy, or debt agreements, and the actual rating as of
year end for each investment type. For these investments held by a broker who is a
member of the Securities Investor Protection Corporation, investments are insured up to
$500,000 in the event the brokerage firm goes out of business.
Minimum
Legal
Rating
Ratings as of
End of Year
19,328
620,726
A
A
AAAm
AAAm
551,630
A
AAAm
Amount
Treasury Fund, III
$
Dreyfus Treasury Fund Premier Shares $
Wells Fargo Treasury Plus Money
Market
$
Concentration of Credit Risk
The District's investment policy places limits on the amount it may invest in any one
issuer. At June 30, 2011, the District had no concentration of credit risk.
Foundation Investments
At June 30, 2011, the Foundation's investments consisted of the following:
Fixed income
Equity securities
Mutual funds
$
29,558
159,670
4,298,260
$
4,487,488
Fair Value Measurements
The following presents information about the Foundation's assets and liabilities
measured at fair value on a recurring basis as of June 30, 2011, and indicates the fair
value hierarchy of the valuation techniques utilized by the Foundation to determine such
fair value based on the hierarchy:
Level 1 - Quoted market prices for identical instruments traded in active exchange
markets.
32
(Continued)
2.
Foundation Investments (Continued)
Fair Value Measurements (Continued)
Level 2 - Significant other observable inputs such as quoted prices for identical or
similar instruments in markets that are not active, and model-based valuation
techniques for which all significant assumptions are observable or can be corroborated
by observable market data.
Level 3 - Significant unobservable inputs that reflect a reporting entity's own
assumptions about the methods that market participants would use in pricing an asset
or liability.
The Foundation is required or permitted to record the following assets at fair value on a
recurring basis:
Description
Investment securities:
Mutual funds
Equity securities
Fixed income
Total investment
securities
Fair Value
Level 1
Level 2
$ 4,298,260 $ 4,298,260
159,670
37,628
29,558
29,558
$ 4,487,488 $ 4,365,446 $
-
Level 3
$
122,042
$
122,042
Certain equity investments were classified as Level 3 as they are closely-held and not
actively traded on an open-market. There were no changes in the valuation techniques
used during the year ended June 30, 2011.
The Foundation had no non-recurring assets and no liabilities at June 30, 2011, which
were required to be disclosed using the fair value hierarchy.
3.
ACCOUNTS RECEIVABLE
Accounts receivable at June 30, 2011 are summarized as follows:
District
Federal
State
Local and other
$
Less allowance for doubtful accounts
Foundation
527,249
4,892,603
744,538 $
215,035
6,164,390
215,035
(300,000)
$
33
5,864,390 $
215,035
(Continued)
4.
NOTE RECEIVABLE
The District received a promissory note in the amount of $1,100,000 from the Truckee
Donner Land Trust for the purchase and sale of a Conservation Easement on the
Tahoe-Truckee Campus site. The note accrues interest by formula tied to prime rate of
interest with principal and interest installments due annually on March 1st. Principal
payments of $110,000 are due annually with the final installment due on March 1, 2016.
The balance on the promissory note at June 30, 2011 was $550,000.
5.
CAPITAL ASSETS
Capital asset activity consists of the following:
Balance
July 1,
2010
Non-depreciable:
Land
Construction in progress
Depreciable:
Building improvements
Buildings
Machinery and equipment
Total
Less accumulated depreciation:
Building improvements
Buildings
Machinery and equipment
Total
Capital assets, net
6.
$
8,495,012
39,375,030
Additions
Deductions
Balance
June 30,
2011
Transfers
$
$
6,247,317
32,978,766
88,536,810
10,276,504
663,009
35,465
666,719
179,662,122
$ (44,805,234)
79,899
43,040,327
123,968,980
10,863,324
7,612,510
89,876
187,184,756
(12,914,857)
(17,610,765)
(6,125,575)
(1,859,229)
(2,088,633)
(849,348)
(3,491)
(83,897)
(14,770,595)
(19,699,398)
(6,891,026)
(36,651,197)
(4,797,210)
(87,388)
(41,361,019)
$ 143,010,925
$
2,815,300
$
$
9,977
2,488
9,408,529
35,396,705
8,495,012
817,113
$
-
$ 145,823,737
DEFERRED REVENUE AND DEFERRED SUPPORT
Deferred revenue for the District consisted of the following:
District
Deferred Federal and State revenue
Deferred local revenue
Deferred tuition and other student fees
Total deferred revenue
34
$
1,111,722
1,299,957
3,149,670
$
5,561,349
(Continued)
7.
TAX REVENUE ANTICIPATION NOTES (TRANS)
Tax Revenue Anticipation Notes (TRANs) are short-term debt instruments. They are
issued to eliminate cash flow deficiencies that result from fluctuations in revenue
receipts and expenditure disbursements. A summary of the District's TRANs activity for
the year ended June 30, 2011 is as follows:
Series 2010 - 2.00% Tax
Revenue Anticipation Note
$
Outstanding
July 1,
2010
Additions
Deletions
-
$ 12,435,000
$ 12,435,000
Outstanding
June 30,
2011
$
-
Subsequent to June 30, 2011, the District entered into a new TRANs agreement for
$7,200,000 payable on October 4, 2012.
8.
LONG-TERM LIABILITIES
General Obligation Bonds
On April 21, 2005, the District issued $20,000,000 of General Obligation Bonds Series A
of the School Facilities Improvement District (SFID) No. 1. The Bonds were issued to
finance the construction of a campus in the Tahoe-Truckee area. The Bonds mature
through 2030 and bear interest at rates ranging from 3.20% to 5.00%.
Bond issuance costs of $266,537 (net of accumulated amortization) were capitalized
and are amortized on a straight-line basis over the term of the Bond.
The following is a schedule of future payments for the Series A SFID No. 1 General
Obligation Bonds:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
Subtotal
Principal
$
105,000
160,000
225,000
290,000
360,000
3,205,000
6,410,000
8,400,000
19,155,000
Plus: Unamortized premium
Interest
$
951,810
946,690
939,031
927,742
910,275
4,117,631
2,844,664
718,750
12,356,593
668,527
$ 19,823,527
35
Total
$
1,056,810
1,106,690
1,164,031
1,217,742
1,270,275
7,322,631
9,254,664
9,118,750
31,511,593
668,527
$ 12,356,593
$ 32,180,120
(Continued)
8.
LONG-TERM LIABILITIES (Continued)
General Obligation Bonds (Continued)
On June 21, 2007, the District issued Measure H, Series B bonds to fund the
acquisition, construction and development of a new campus. Serial Bonds of
$10,460,000 bear interest at rates of 4.00% to 5.00%, maturing August 1, 2026.
Interest payments are due semiannually on February 1 and August 1 of each year,
commencing February 1, 2008. Capital Appreciation Bonds of $4,535,972 bear interest
at rates ranging from 4.96% to 5.01%. Bonds maturing August 1, 2027 to August 1,
2031 are payable only at maturity on August 1 of each year, and interest on such
Capital Appreciation Bonds is compounded semiannually on February 1 and August 1 of
each year, commencing June 21, 2007. The Capital Appreciation Bonds mature June 1,
2032 and interest on such Capital Appreciation Bonds is compounded semiannually on
June 1 and December 1 of each year commencing June 21, 2007.
and will be amortized on a straight-line basis over the term of the Bond. Accreted
interest on the capital appreciation bonds was $903,626 at June 30, 2011.
The following is a schedule of the future payments for the Series B SFID No. 1 General
Obligation Bonds:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032
Subtotal
Principal
$
180,000
225,000
265,000
310,000
365,000
2,730,000
4,830,000
3,890,344
1,950,629
14,745,973
Interest
$
471,455
462,605
452,138
439,888
425,472
1,819,767
881,125
7,051,723
2,567,742
14,571,915
246,003
$ 14,991,976
36
Total
$
651,455
687,605
717,138
749,888
790,472
4,549,767
5,711,125
10,942,067
4,518,371
29,317,888
246,003
$ 14,571,915
$ 29,563,891
(Continued)
8.
On April 21, 2005, the District issued $18,000,000 of General Obligation Bonds Series A
of the SFID No. 2. The Bonds were issued to finance improvements to the District's
Grass Valley campus. The Bonds mature through 2030 and bear interest at rates
ranging from 3.20% to 5.00%.
and are amortized on a straight-line basis over the term of the loan.
The following is a schedule of the future payments for the Series A SFID No. 2 General
Obligation Bonds:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
Subtotal
Principal
$
80,000
125,000
175,000
230,000
285,000
2,540,000
5,075,000
6,725,000
Interest
$
15,235,000
757,276
753,281
747,323
738,379
724,550
3,279,388
2,271,058
578,271
9,849,526
579,698
$ 15,814,698
37
Total
$
837,276
878,281
922,323
968,379
1,009,550
5,819,388
7,346,058
7,303,271
25,084,526
579,698
$
9,849,526
$ 25,664,224
(Continued)
8.
On June 21, 2007, the District issued Measure G, Series B bonds to fund the
acquisition, construction and development of a new campus. Serial Bonds of
$4,260,000 bear interest at a rate of 4.00%, maturing August 1, 2012. Interest
payments are due semiannually on February 1 and August 1 of each year, commencing
February 1, 2008. Capital Appreciation Bonds of $22,136,517 bear interest at rates
ranging from 4.15% to 6.32%. Bonds maturing August 1, 2013 to August 1, 2031 are
payable only at maturity on August 1 of each year, and interest on such Capital
Appreciation Bonds is compounded semiannually on February 1 and August 1 of each
year, commencing June 21, 2007. The Capital Appreciation Bonds mature June 1,
2032 and interest on such Capital Appreciation Bonds is compounded semiannually on
June 1 and December 1 of each year commencing June 21, 2007.
and will be amortized on a straight-line basis over the term of the Bond. Accreted
interest on the capital appreciation bonds was $4,141,598 at June 30, 2011.
The following is a schedule of the future payments for the Series B SFID No. 2 General
Obligation Bonds:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032
Subtotal
Principal
$
1,155,000
1,265,000
1,073,654
1,072,985
1,073,834
5,285,079
5,148,319
5,676,299
2,806,347
24,556,517
Interest
$
54,450
285,034
366,543
439,986
518,440
3,970,458
6,637,092
12,502,082
4,723,064
29,497,149
393,985
$ 24,950,502
38
Total
$
1,209,450
1,550,034
1,440,197
1,512,971
1,592,274
9,255,537
11,785,411
18,178,381
7,529,411
54,053,666
393,985
$ 29,497,149
$ 54,447,651
(Continued)
8.
Certificates of Participation
During 1998, the Financing Corporation issued $6,005,000 of Certificates of
Participation (COPs) with an average interest rate of 4.68%. Proceeds were used to
advance refund $2,390,000 of outstanding 1991 COPs to fund the residence hall
renovation project. The net proceeds related to the advance refunding issuance were
deposited in an irrevocable trust with an escrow agent to provide for all future debt
service payments and the 1991 COPs were considered legally defeased.
The following is a schedule of the future payments for the 1998 Certificates of
Participation:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2018
Principal
Interest
Total
$
185,000
190,000
200,000
210,000
220,000
475,000
$
72,452
63,540
54,233
44,375
33,833
34,021
$
257,452
253,540
254,233
254,375
253,833
509,021
$
1,480,000
$
302,454
$
1,782,454
39
(Continued)
8.
Certificates of Participation (Continued)
During 2004, the Financing Corporation issued $7,400,000 of COPs with an average
interest rate of 3.93%. The net proceeds of $7,205,553 were used to finance
gymnasium improvements, purchase chemistry fume hoods, finance swimming pool
upgrades, athletic fields, finance water heating system repairs and purchase relocatable
educational facilities.
Debt issuance costs of $123,246 (net of accumulated amortization) were capitalized and
are amortized on a straight-line basis over the term of the debt. Amortization expense
was $8,804 for the year ended June 30, 2011.
Participation:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
Principal
$
Subtotal
320,000
330,000
340,000
350,000
360,000
2,030,000
1,940,000
Interest
$
5,670,000
Less: Unamortized discount
215,028
204,788
193,901
182,051
169,268
620,257
161,462
Total
$
1,746,755
7,416,755
(12,865)
$
40
5,657,135
535,028
534,788
533,901
532,051
529,268
2,650,257
2,101,462
(12,865)
$
1,746,755
$
7,403,890
(Continued)
8.
Certificates of Participation (Continued)
During 2007, the Financing Corporation issued $7,785,000 of COPs with an average
interest rate of 4.00%. The net proceeds of $7,607,610 were used to finance the
Sunguard Higher Education Banner System and required computer equipment as well
as an upgrade to the telephone switching station.
Debt issuance costs of $118,734 (net of accumulated amortization) were capitalized and
are amortized on a straight-line basis over the term of the debt. Amortization expense
was $11,874 for the year ended June 30, 2011.
Participation:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
Principal
$
Subtotal
530,000
550,000
575,000
595,000
620,000
3,485,000
Interest
$
6,355,000
Less: Unamortized discount
257,236
235,902
213,871
191,538
168,192
436,930
Total
$
1,503,669
7,858,669
(17,717)
$
41
6,337,283
787,236
785,902
788,871
786,538
788,192
3,921,930
(17,717)
$
1,503,669
$
7,840,952
(Continued)
8.
Dormitory Bonds
Dormitory bonds were issued pursuant to the State of California Junior College Revenue
Bond Act of 1961 and via a resolution adopted by the Board of Trustees on
September 13, 1966, for Series A and B Bonds and on June 10, 1969 for Series C
Bonds. The original issue was in the aggregate principal amount of $1,409,000 and was
acquired in total by the United States Department of Housing and Urban Development.
These Bonds are secured by the net revenues derived by the District from the housing
and dining system. A Bond Interest and Redemption Fund has been established in
accordance with the provisions of the bond agreement.
The following is a schedule of the future payments for the Dormitory Series C Bonds:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2018
Principal
Interest
Total
$
25,000
25,000
25,000
25,000
30,000
61,000
$
5,730
4,980
4,230
3,480
2,730
2,760
$
30,730
29,980
29,230
28,480
32,730
63,760
$
191,000
$
23,910
$
214,910
Capital Lease Obligations
The District leases vehicles under long-term lease purchase agreements.
minimum lease payments as of June 30, 2011 are as follows:
Year Ending
June 30,
2012
2013
Principal
Interest
Future
Total
$
16,664
19,404
$
2,248
893
$
18,912
20,297
$
36,068
$
3,141
$
39,209
42
(Continued)
8.
Changes in Long-Term Debt
A schedule of changes in long-term debt for the year ended June 30, 2011 is as follows:
Balance
July 1,
2010
General Obligation Bonds
Certificates of Participation
Dormitory Bonds
California Energy Commission Loan
Capitalized leases
Compensated absences
OPEB (Asset) / Liability
Accreted interest
$
$
Additions
76,980,525
14,751,727
216,000
Deductions
$
177,808
80,437 $
992,889
(1,565,523)
3,573,953
1,544
84,235
5,476,545
1,471,271
95,207,816
7,033,595
$
Balance
June 30,
2011
1,399,822
1,277,309
25,000
$
177,808
45,913
6,163,645
$
36,068
1,077,124
673,229
5,045,224
3,237,793
$
75,580,703
13,474,418
191,000
Amounts
Due Within
One Year
$
96,077,766
1,520,000
1,035,000
25,000
16,664
1,077,124
$
3,673,788
Payments on the General Obligation Bonds are made from the Bond Interest and
Redemption Fund. Payments on the Certificates of Participation are made from the
Building Fund. Payments on the capitalized leases are made from the General Fund
and Capital Facilities Fund.
Payments on the compensated absences and
postemployment benefits are made from the fund for which the related employee
worked.
9.
PROPERTY TAXES
Secured property taxes attach as an enforceable lien on property as of March 1, and are
payable in two installments on December 10 and April 10. Unsecured property taxes
are payable in one installment on or before August 31. The Placer, Nevada,
Sacramento, Yuba and El Dorado Counties each bill and collect taxes for the District.
Tax revenues are recognized by the District when received. The District is considered
an "excess tax school entity" pursuant to Revenue and Tax Code 95.1 and, accordingly,
has deferred recognition of the Education Revenue Augmentation Fund tax payments
received in excess of the District's estimated allocation until a final allocation is
determined by the County.
10.
EMPLOYEE RETIREMENT SYSTEMS
Qualified employees are covered under multiple-employer defined benefit pension plans
maintained by agencies of the State of California. Certificated employees are members
of the State Teachers' Retirement System, and classified employees are members of
the Public Employees' Retirement System.
43
(Continued)
10.
EMPLOYEE RETIREMENT SYSTEMS (Continued)
State Teachers' Retirement System (STRS)
Plan Description
All certificated employees and those employees meeting minimum standards adopted
by the Board of Governors of the California Community Colleges and employed 50
percent or more of a full-time equivalent position participate in the Defined Benefit Plan
(DB Plan). Part-time educators hired under a contract of less than 50 percent or on an
hourly or daily basis without contract may elect membership in the Cash Balance Benefit
Program (CB Benefit Program). The State Teachers' Retirement Law (Part 13 of the
California Education Code, Section 22000 et seq.) established benefit provisions for
STRS. Copies of the STRS annual financial report may be obtained from the STRS
Executive Office, 100 Waterfront Place, West Sacramento, California 95605.
Funding Policy
Active members of the DB Plan are required to contribute 8% of their salary while the
District is required to contribute an actuarially determined rate. The actuarial methods
and assumptions used for determining the rate are those adopted by the STRS
Teachers' Retirement Board. The required employer contribution rate for fiscal year
2010-2011 was 8.25% of annual payroll. The contribution requirements of the plan
members are established by State statute. The CB Benefit Program is an alternative
STRS contribution plan for instructors. Instructors who choose not to sign up for the DB
Plan or FICA may participate in the CB Benefit Program. The District contribution rate
for the CB Benefit Program is always a minimum of 4% with the sum of the District and
employee contribution always being equal or greater than 8%.
Annual Pension Cost
The District's total contributions to STRS for the fiscal years ended June 30, 2011, 2010,
and 2009 were $2,620,501, $2,514,475 and $2,498,895, respectively, and equals 100%
of the required contributions for each year. The State of California may make additional
direct payments for retirement benefits to the STRS on behalf of all community colleges
in the State. The revenue and expenditures associated with these payments, if any,
have not been included in these financial statements.
44
(Continued)
10.
EMPLOYEE RETIREMENT SYSTEMS (Continued)
California Public Employees' Retirement System (CalPERS)
Plan Descriptions
The District contributes to the School Employer Pool under the California Public
Employees' Retirement System (CalPERS), a cost-sharing multiple-employer public
employee retirement system defined benefit pension plan administered by CalPERS.
The plan provides retirement and disability benefits, annual cost-of-living adjustments,
and death benefits to plan members and beneficiaries. Benefit provisions are
established by state statutes, as legislatively amended, within the Public Employees'
Retirement Law. CalPERS issues a separate comprehensive annual financial report
that includes financial statements and required supplementary information. Copies of
the CalPERS annual financial report may be obtained from the CalPERS Executive
Office, 400 Q Street, Sacramento, California 95811.
Funding Policy
Active plan members are required to contribute 7% of their salary and the District is
required to contribute an actuarially determined rate.
The required employer
contribution rate for fiscal year 2010-2011 was 10.923% of annual payroll.
Annual Pension Cost
The District's contributions to CalPERS for the fiscal years ending June 30, 2011, 2010,
2009 were $1,923,485, $1,827,706 and $1,745,830, respectively, and equaled 100
percent of the required contributions for each year.
Social Security
As established by Federal law, all public sector employees who are not members of their
employer's existing retirement system (CalSTRS or CalPERS) must be covered by
Social Security or an alternative plan. The District has elected to use Social Security as
its plan for employees not covered by a retirement system, as well as the CalSTRS
Cash Balance Benefit Program (an alternative plan) for part-time faculty. Members of
CalPERS participate in Social Security with the employee and District both contributing.
Contributions made by the District and employees to the CalSTRS Cash Balance
Benefit Program vest immediately. The District contributes 6.20 percent of an
employee's gross earnings for Social Security and the employee is also required to
contribute 6.20 percent. Recent economic stimulus actions by the Federal Government
have temporarily lowered the employee contributions to Social Security. The District
contributes four percent for CalSTRS Cash Benefit Program participants.
45
(Continued)
11.
OTHER POSTEMPLOYMENT BENEFITS
In addition to the pension benefits described in Note 10, the District provides lifetime
post-retirement health care benefits to eligible employees who retire from the District.
The benefits provide retired employees with health insurance coverage. After the retiree
is eligible for Medicare, the District provides insurance coverage supplemental to
Medicare. Eligible requirements and benefits vary according to hire date as follows:
Academic Employees




Employees hired before November 27, 1984 receive 100% paid benefits upon
retirement from the District.
Employees hired after November 27, 1984, but before July 2, 1986, must have
completed five years of service to receive 100% paid benefits.
Employees hired after July 1, 1986, but before July 2, 1994, must have
completed twelve years of service to receive 100% paid benefits.
Employees hired after July 1, 1994 may purchase benefits at their own expense.
Classified Employees




Employees hired before December 10, 1985 receive 100% paid benefits upon
retirement from the District.
Employees hired after December 10, 1985, but before July 2, 1986, must have
completed five years of service to receive 100% paid benefits.
Employees hired after July 1, 1986, but before July 2, 1994, must have
completed 15 years of service to receive 100% paid benefits.
Employees hired after July 1, 1994 may purchase benefits at their own expense.
46
(Continued)
11.
OTHER POSTEMPLOYMENT BENEFITS (Continued)
The District's annual other postemployment benefit (OPEB) cost (expense) is calculated
based on the annual required contribution of the employer (ARC), an amount actuarially
determined in accordance with the parameters of GASB Cod. Sec. P50.108-.109. The
ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover
normal cost each year and amortize any unfunded actuarial liabilities (or funding excess)
over a period not to exceed thirty years. The following table shows the components of
the District's annual OPEB cost for the year, the amount actually contributed, and
changes in the District's net OPEB obligation:
Annual required contribution
$
5,476,545
Interest on net OPEB obligation
-
Adjustment to annual required contribution
-
Annual OPEB cost (expense)
5,476,545
Contributions made
(3,237,793)
Increase in net OPEB obligation
2,238,752
Net OPEB asset - beginning of year
(1,565,523)
Net OPEB obligation - end of year
$
673,229
The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2011 and the preceding two years were as
follows:
Fiscal Year
Ended
June 30, 2009
June 30, 2010
June 30, 2011
Annual
OPEB Cost
$
$
$
5,212,371
5,163,093
5,476,545
Percentage
of Annual
OPEB Cost
Contributed
Net OPEB
(Asset)
Obligation
52.9%
61.8%
59.1%
$ (3,538,566)
$ (1,565,523)
$
673,229
As of July 1, 2010, the most recent actuarial valuation date, the plan was unfunded.
The actuarial accrued liability for benefits was $77,063,512, and the actuarial value of
assets was $6,813,723, resulting in an unfunded actuarial accrued liability (UAAL) of
$70,249,789. The covered payroll (annual payroll of active employees covered by the
Plan) was $7,274,861, and the ratio of the UAAL to the covered payroll was 966
percent.
47
(Continued)
11.
OTHER POSTEMPLOYMENT BENEFITS (Continued)
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and the
healthcare cost trend. Amounts determined regarding the funded status of the plan and
the annual required contributions of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about
the future. The schedule of funding progress, shown above, presents multiyear trend
information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for benefits.
Projections of benefits for financial reporting purposes are based on the substantive
plan (the plan as understood by the employer and the plan members) and include the
types of benefits provided at the time of each valuation and the historical pattern of
sharing of benefit costs between the employer and plan members to that point. The
actuarial methods and assumptions used include techniques that are designed to
reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial
value of assets, consistent with the long-term perspective of the calculations.
In the July 1, 2010, actuarial valuation, the entry age actuarial cost method was used.
The actuarial assumptions included a 4.5 percent investment rate (net of administrative
expenses), which is a blended rate of the expected long-term investment returns on plan
assets and on the employer's own investments calculated based on the funded level of
the plan on the valuation date, and an annual healthcare cost trend rate of 8 percent.
The actuarial value of assets was determined using techniques that spread the effects
of short-term volatility in the market value of investments over a five-year period. The
UAAL is being amortized as a level percentage of projected payroll on an open basis.
The remaining amortization period at June 30, 2011, was 27 years.
12.
COMMITMENTS AND CONTINGENCIES
Contingent Liabilities
The District is subject to legal proceedings and claims which arise in the ordinary course
of business. In the opinion of management, the amount of ultimate liability with respect
to these actions will not materially affect the financial position or results of operations of
the District.
The District has received Federal and State funds for specific purposes that are subject
to review or audit by the grantor agencies. Although such audits could results in
expenditure disallowances under terms of the grants, it is management's opinion that
any required reimbursements or future revenue offsets subsequently determined will not
have a material effect on the District's financial position.
48
(Continued)
12.
COMMITMENTS AND CONTINGENCIES (Continued)
Operating Leases
Future minimum rental payments under all noncancelable operating leases with initial or
remaining lease terms in excess of one year as of June 30, 2011, are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
13.
$
1,661,252
1,719,224
1,768,370
1,818,374
8,717
$
6,975,937
JOINT POWERS AGREEMENTS
Sierra Joint Community College District participates in Joint Power Agreements (JPAs),
with Alliance of Schools for Cooperative Insurance Programs (ASCIP) for property,
liability and workers' compensation insurance, and Schools Excess Liability Fund (SELF)
for excess liability insurance for the operation of common risk management and
insurance programs. The relationship between Sierra Joint Community College District
and the JPAs is such that they are not component units of Sierra Joint Community
College District for financial reporting purposes.
The JPAs are governed by boards consisting of a representative from each member
district. The boards control the operations of the JPAs, including the selection of
management and approval of operating budgets, independent of any influence by the
member district beyond their representation on the governing board. Sierra Joint
Community College District pays a premium commensurate with the level of coverage
requested.
Member districts share surpluses and deficits proportionate to their participation in the
JPAs. The JPAs are independently accountable for their fiscal matters and maintain
their own accounting records. Budgets are not subject to any approval other than that
of the governing board.
Condensed financial information of the JPAs for the most recent year available is as
follows:
ASCIP
June 30, 2010
Total assets
Total liabilities
Net assets
Total revenues
Total expenses
Change in net asset
$
$
$
$
$
$
49
242,839,611
136,884,803
105,954,808
177,534,227
162,916,342
14,617,885
SELF
June 30, 2011
$
$
$
$
$
$
209,217,000
161,555,000
47,662,000
26,645,000
27,707,000
(1,062,000)
(Continued)
14.
OPERATING EXPENSES
The following schedule details the functional classifications of the operating expenses reported in the statement of revenues, expenses and
changes in net assets for the year ended June 30, 2011.
Functional Classifications
Instruction
Academic Support
Student Services
Operations and Maintenance
of Plant
Institution Support
Community Services & Economic
Development
Auxiliary Operations
Student Aid
Long-Term Debt and Other Financing
Physical Property and Related
Acquisitions
Employee
Benefits
Salaries
$
28,765,587
4,392,537
7,142,675
Supplies
Materials
and Other
Operating
Expenses
and Services
$
7,660,285
1,202,325
1,915,243
$
1,283,514
2,952,460
805,634
2,388,989
7,777,405
831,333
4,523,183
890,304
5,076,423
723,706
1,286,848
212,579
369,898
1,931,920
2,073,950
Student
Aid
Utilities
Depreciation
$
$
218,831
$
2,183,143
$
52,517,379
11,980
$
16,726,826
2,868,205
3,738,946
24,144,481
119,508
8,250
24,144,481
1,066,544
$
50
16,200,257
$
24,371,562
37,709,386
8,547,322
10,082,383
6,293,769
17,377,011
119,508
39,632
Total
$
2,183,143
$
4,797,210
5,915,366
$
4,797,210
$ 116,796,377
(Continued)
15.
DONATED SERVICES AND FACILITIES
Donated services and facilities to the Sierra College Foundation totaling $217,949 for
the year ended June 30, 2011 consisted of accounting and management support,
comprehensive insurance, office space, and other miscellaneous internal services as
provided by the District. Donated revenues and expenses are included in contributions
and grants, and administration expenses, respectively, on the Foundation's statement of
revenues, expenses and change in net assets.
The valuation of such services and facilities is determined based upon various factors
including employee salaries and benefits, office rent, and certain other operating
expenses.
16.
ENDOWMENT NET ASSETS - FOUNDATION
Changes in endowment net assets for the fiscal year ended June 30, 2011, consisted of
the following:
Temporarily
Restricted
Unrestricted
Endowment net assets,
beginning of year
$
Change in fair value of
investments
Contributions
961,154
$
166,310
135,626
131,393
70
4,750
Permanently
Restricted
$
Endowment net assets,
end of year
$
488,531
493,351
97,196
97,196
(94,062)
$
1,096,850
$
208,391
2,939,616
267,019
Other transfers
Appropriation of endowment
assets for expenditure
1,812,152
Total
(94,062)
$
2,397,879
$
3,703,120
Endowment net asset composition by type of fund for the fiscal year ended
June 30, 2011, consisted of the following:
Temporarily
Restricted
Unrestricted
Donor-restricted endowment
funds
$
Board-designated endowment
funds
Total
(1,394) $
208,391
Permanently
Restricted
$
2,397,879
Total
$
1,098,244
$
1,096,850
51
2,604,876
1,098,244
$
208,391
$
2,397,879
$
3,703,120
(Continued)
16.
ENDOWMENT NET ASSETS - FOUNDATION (Continued)
From time to time, the fair value of assets associated with individual donor-restricted
endowment funds may fall below the level that the donor or UPMIFA requires the
Foundation to retain as a fund of perpetual duration. There were no individual
endowment funds with such deficiencies as of June 30, 2011.
17.
CONSTRUCTION COMMITMENTS
As of June 30, 2011, the District has approximately $126,128 in outstanding
commitments on construction contracts.
18.
SUBSEQUENT EVENTS
The District evaluated all events or transactions that occurred from June 30, 2011 to
October 31, 2011, the date the financial statements were issued.
52
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF OTHER POSTEMPLOYMENT BENEFITS (OPEB)
FUNDING PROGRESS
Fiscal
Year
Ended
Actuarial
Valuation
Date
6/30/2009 July 1, 2008
6/30/2010 July 1, 2008
6/30/2011 July 1, 2010
Actuarial
Value of
Assets
$ 5,749,000
$ 5,749,000
$ 6,813,723
Schedule of Funding Progress
Unfunded
Actuarial
Actuarial
Accrued
Accrued
Liability
Liability
(AAL)
(UAAL)
$ 59,925,000
$ 59,925,000
$ 77,063,512
$ 54,176,000
$ 54,176,000
$ 70,249,789
53
Funded
Ratio
9.60%
9.60%
8.84%
Covered
Payroll
$ 10,174,000
$ 9,172,150
$ 7,244,861
UAAL as a
Percentage
of
Covered
Payroll
532%
591%
966%
SUPPLEMENTARY INFORMATION
COMBINING STATEMENT OF NET ASSETS BY FUND
June 30, 2011
SFID #1
Bond
Interest &
Redemption
Bond
Interest &
Redemption
General
SFID #2
Bond
Interest &
Redemption
SFID #1
Construction
Funds
SFID #2
Construction
Funds
Assets
Current assets:
Accounts receivable, net
Note receivable
Inventory
Prepaid expenses
$
$
2,672
$
3,301
$
50,597
546,901
Noncurrent assets:
Restricted cash, cash equivalents
and investments
Note receivable
Capitalized debt issuance costs
Capital assets, net
Total assets
20,738,724
5,668,940
636
110,000
$
4,271
20,312
20,310
27,005,162
2,672
3,301
130,948
24,581
21
2,003,480
2,447,630
447,085
440,000
3,070,713
21
2,003,480
2,447,630
887,085
3,070,713
$
27,005,183
$
1,445,531
5,419,076
955,108
$
-
$
2,006,152
$
2,450,931
$
1,018,033
$
3,095,294
$
6,033
$
202,132
Liabilities
Accounts payable
Deferred revenue
Accrued payroll
Compensated absences payable
Capitalized leases - current portion
Long-term debt - current portion
7,819,715
6,033
202,132
7,819,715
6,033
202,132
174
18
1,011,826
2,893,144
1,012,000
2,893,162
Capitalized leases - noncurrent portion
Accreted interest on bonds
Long-term debt - noncurrent portion
Total liabilities
Net Assets
Invested in capital assets, net of
related debt
Restricted for:
Capital projects
Debt service
Undesignated
$
$
2,447,630
2,672
3,301
2,006,152
2,450,931
19,185,468
Total net assets
2,003,480
19,185,468
$
27,005,183
$
-
$
(Continued)
56
2,006,152
$
2,450,931
$
1,018,033
$
3,095,294
COMBINING STATEMENT OF NET ASSETS BY FUND
(Continued)
June 30, 2011
Capital
Projects
Financial
Aid
Dormitory
Totals
Reconciling
Adjustments/
Eliminations
Statement of
Net Assets
Assets
Current assets:
Accounts receivable, net
Note receivable
Inventory
Prepaid expenses
$
$
353,994
8,950
76,225
129,395
362,944
7,585,350
29,186
$
$
30,000
Noncurrent assets:
Restricted cash, cash equivalents
and investments
Note receivable
Capitalized debt issuance costs
Capital assets, net
21,092,718
5,864,390
110,000
50,597
617,523
$
7,585,350
29,186
21,092,718
5,864,390
110,000
50,597
617,523
27,735,228
27,735,228
15,583,465
440,000
1,358,247
145,823,737
15,583,465
440,000
1,358,247
145,823,737
16,023,465
147,181,984
163,205,449
$ 147,181,984
$ 190,940,677
$
Total assets
129,395
46,225
$
7,661,575
$
158,581
$
362,944
$
43,758,693
$
151,261
34,307
$
134,517
6,668
$
55,219
101,298
$
1,994,693
5,561,349
955,108
Liabilities
Accounts payable
Deferred revenue
Accrued payroll
Compensated absences payable
Capitalized leases - current portion
Long-term debt - current portion
$
1,077,124
16,664
2,580,000
850,868
1,994,693
5,561,349
955,108
1,077,124
16,664
2,580,000
850,868
4,524,656
13,035,806
19,404
5,045,224
87,339,350
19,404
5,045,224
87,339,350
92,403,978
92,403,978
8,511,150
96,928,634
105,439,784
5,642,986
51,496,324
57,139,310
206,427
17,396
10,189,293
5,973
19,391,895
(1,242,974)
17,396
10,189,293
5,973
18,148,921
206,427
35,247,543
50,253,350
85,500,893
43,758,693
$ 147,181,984
$ 190,940,677
$
185,568
141,185
156,517
8,511,150
Capitalized leases - noncurrent portion
Accreted interest on bonds
Long-term debt - noncurrent portion
Total liabilities
185,568
141,185
156,517
Net Assets
Invested in capital assets, net of
related debt
Restricted for:
Capital projects
Debt service
Undesignated
1,191,684
17,396
6,284,323
Total net assets
7,476,007
$
7,661,575
17,396
$
158,581
$
362,944
$
See accompanying notes to supplemental information.
57
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS BY FUND
Year Ended June 30, 2011
General
Operating revenues:
Tuition and fees
Less: Scholarship discounts and
allowance
$
SFID #2
Bond
Interest &
Redemption
SFID #1
Construction
Funds
SFID #2
Construction
Funds
10,619,962
10,619,962
Federal
State
Local
Interest
1,442,976
4,920,043
483,571
667,861
607,567
$
$
3
18,741,980
Operating expenses:
Salaries
Employee benefits
Supplies, materials and other
operating expenses and services
Utilities
Depreciation
$
3
23,553
$
23,553
134,974
17,902
27,703
17,902
162,677
$
Operating (loss) income
5,152
1,005
16,793,808
308,581
112,394
7,229,122
85,252,238
112,394
7,235,279
50,283
(7,199,505)
50,283
(7,199,505)
(66,510,258)
Pell grants
Investment income - non-capital
Investment income - capital
Interest expense on capital asset
related debt
(expenses)
Debt reduction
Interfund transfers out
Interfund transfers in
3
23,553
15,311,557
55,037,821
2,714,554
333,736
(222,175)
(2,559,686)
27,393
Income (loss) before capital revenues
Capital revenues:
Local property taxes and other
revenues, capital
$
17,902
9,887
1,857
1,857
(228,895)
Total non-operating revenues
(expenses)
35,774
35,774
52,169,647
15,980,202
SFID #1
Bond
Interest &
Redemption
Bond
Interest &
Redemption
(6,480)
(1,436,945)
(878,422)
(25,000)
(200,000)
(1,100,000)
30,869
70,414,305
(611)
(1,625,201)
(1,978,422)
3,904,047
(608)
(1,601,648)
(1,960,520)
130,018
1,684,171
2,047,054
130,018
1,684,171
2,047,054
82,523
86,534
50,283
(7,199,505)
1,923,629
2,364,397
961,717
10,092,667
4,034,065
(608)
15,151,403
608
19,185,468
$
-
$
(Continued)
58
2,006,152
$
2,450,931
$
1,012,000
$
2,893,162
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS BY FUND
(Continued)
Capital
Projects
Operating revenues:
Tuition and fees
Less: Scholarship discounts and
allowance
$
Financial
Aid
145,460
Dormitory
$
980,821
Totals
$
11,746,243
$
5,249,059
$
(5,249,059)
145,460
Federal
State
Local
Interest
Operating expenses:
Salaries
Employee benefits
Supplies, materials and other
operating expenses and services
Utilities
Depreciation
11,746,243
421,531
409,894
866,967
197,821
17,153
102,862
1,007
4,744
1,852,870
5,787,010
1,255,050
667,861
821,115
(369,529)
1,852,870
5,787,010
1,255,050
667,861
451,586
669,853
1,475,689
1,002,718
22,130,149
(369,529)
21,760,620
223,865
61,419
52,433,144
16,053,601
84,235
673,225
52,517,379
16,726,826
420,566
25,917,950
24,371,562
1,362,060
24,062,981
1,407,515
Operating (loss) income
(737,662)
Pell grants
Investment income - non-capital
Investment income - capital
Interest expense on capital asset
related debt
(expenses)
Debt reduction
Interfund transfers out
Interfund transfers in
(5,249,059)
11,746,243
34,480
10,975
(9,717,693)
2,183,143
4,797,210
16,200,257
24,371,562
2,183,143
4,797,210
24,062,981
705,850
118,776,257
(1,979,880)
116,796,377
(22,587,292)
296,868
(96,646,108)
1,610,351
(95,035,757)
22,497,883
15,311,557
55,047,708
2,716,411
22,497,883
1,857
15,311,557
55,047,708
2,716,411
22,497,883
261,921
107,606
261,921
107,606
Total non-operating revenues
(expenses)
Income (loss) before capital revenues
(591,860)
(3,142,602)
(1,445,701)
110,708
(1,280,000)
(27,393)
2,717,657
444,444
(2,827,175)
(2,866,335)
2,866,335
(13,375)
2,827,175
2,866,335
(2,866,335)
(279,256)
90,048,226
1,737,626
91,785,852
17,612
(6,597,882)
3,347,977
(3,249,905)
(279,256)
90,416
929,112
22,588,299
191,450
1,007
Capital revenues:
Local property taxes and other
revenues, capital
(4,588,303)
431,069
110,708
110,708
3,861,243
3,861,243
3,861,243
$
16,995,302
980,821
$
Reconciling
Adjustments/
Eliminations
Statement of
Revenues,
Expenses and
Change in
Net Assets
110,708
3,971,951
191,450
1,007
17,612
(2,736,639)
3,458,685
722,046
7,284,557
16,389
188,815
37,984,182
46,794,665
84,778,847
7,476,007
$
17,396
$
206,427
$
See accompanying notes to supplemental information.
59
35,247,543
$
50,253,350
$
85,500,893
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Federal Grantor/
Pass-Through Grantor/
Program or Cluster Title
Federal
CFDA
Number
Contract
Entity Identifying
Number
84.033
84.063
84.007
84.375
P033A100600
P063P101180
P007A070600
P375A20071180
Federal
Expenditures
U.S. Department of Education
Direct Programs:
Student Financial Aid Cluster:
College Work Study Program
Pell Grant Program
SEOG
Academic Competitiveness Grant
Subtotal Student Financial Aid Cluster
$
239,317
22,497,883
271,249
172,791
23,181,240
TRIO
Passed through California Community College
Chancellor's Office:
VTEA Cluster:
Title I - Part C - Basic Grant VTEA
Title II - Tech Prep VTEA
84.042
P042A100546
167,463
84.048
84.048
10-C01-058
10-139-270
576,830
69,519
Subtotal VTEA Cluster
646,349
Title I: ARRA
84.389
-
Total U.S. Department of Education
37,179
24,032,231
U.S. Department of Agriculture
Direct Programs:
Veterans Reserve Funds
Passed through El Dorado and Nevada Counties:
Forest Reserve
Flood Control Act
10.665
-
4,767
10.665
10.923
-
71,917
490
Total U.S. Department of Agriculture
77,174
U.S. Small Business Administration
Direct Programs:
SBA Mechatronics
59.000
SBAHQ-08-I-0175
16,316
47.082
47.082
1003259
1003709
56,830
177
National Science Foundation
Passed through California Community College
Chancellor's Office:
Advanced Technological Education
West Virginia University Ignite
Total National Science Foundation
57,007
(Continued)
60
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
(Continued)
Federal Grantor/
Pass-Through Grantor/
Program or Cluster Title
Federal
CFDA
Number
Contract
Entity Identifying
Number
93.658
1262100
93.558
-
Federal
Expenditures
U.S. Department of Health and Human Services
Passed through California Department of
Education:
Foster Parent Training
Passed through California Community
College Chancellor's Office:
TANF
$
127,745
40,280
Total U.S. Department of Health and
Human Services
168,025
Total Federal Programs
$
See accompanying notes to
supplemental information.
61
24,350,753
SCHEDULE OF STATE FINANCIAL AWARDS
Program Entitlements
Prior Year
Carryforward
DSPS
TANF
CDC Works
Child Development Training Consort.
Basic Skills Ongoing
$
CalWorks
Matriculation (credit)
Staff Diversity
Staff Development
Part Time Faculty
Part Time Faculty Office hours
CARE
EOPS
TTIP - Telecomm Infrastr. IT
Articulation
CTE Pathways (140-271)
CTE Innovation Partnerships (141-271)
Responsive Training Fund
Early Assessment Programs
CACT
NOCCC CACT Collaborative
State Preschool
State Preschool - Reserve
Family Child Care Homes
Family Child Care Homes - Reserve
BFAP - Administrative Allowances
Cal Grant B
Cal Grant C
Total State Programs
$
Current
Entitlement
$
376,422
53,125
14,344
2,308
752,994
40,280
41,260
10,500
154,453
269,425
479,116
7,631
Total
Entitlement
$
320,018
17,229
100,129
470,283
26,898
870
1,932
293,594
71,190
158,083
400,000
130,000
3,000
205,000
75,000
469,168
65,094
192,521
21
488,178
833,681
33,286
1,107
1,064,967
$
5,493,173
$
Program Revenues
Deferred
Revenue/
Accounts
Accounts
Receivable
Payable
Cash
Received
752,994
40,280
41,260
10,500
530,875
269,425
532,241
21,975
2,308
320,018
17,229
127,027
470,283
870
1,932
693,594
201,190
158,083
3,000
205,000
75,000
469,168
65,094
192,521
1,128
488,178
833,681
33,286
$
6,558,140
$
752,994
40,280
37,691
10,500
530,875
269,425
532,241
21,975
2,308
320,018
17,229
127,027
470,283
870
1,932
693,594
201,190
158,083
3,000
205,000
290,707
752,994
40,280
41,260
10,500
240,168
269,425
532,241
$
752,994
40,280
41,260
10,500
240,168
269,425
532,241
21,975
152
451,087
162,624
22,419
48,013
23,909
8,056
2,308
320,018
17,229
127,027
470,283
870
1,780
242,507
38,566
158,083
3,000
205,000
22,419
470,404
41,186
192,434
2,308
320,018
17,229
127,027
470,283
870
1,780
242,507
38,566
158,083
3,000
205,000
22,419
470,404
41,186
192,434
488,178
833,681
33,286
488,178
833,681
33,286
1,128
$
See accompany notes to supplemental information.
62
3,569
$
422,391
65,095
184,378
1,128
488,178
833,681
33,286
6,424,652
Total
$
$
Program
Expenditures
82,057
$
951,582
$
5,555,127
$
5,555,127
SCHEDULE OF WORKLOAD MEASURES FOR
STATE GENERAL APPORTIONMENT
Annual Attendance as of June 30, 2011
Reported
Data
Categories
A.
Noncredit
Credit
26
823
401
401
11,192
195
11,192
195
380
1,098
380
1,098
1,424
69
1,424
69
Noncredit
Credit
Primary Terms (Exclusive of Summer Intersession)
1.
2.
Census Procedure Courses
a.
Weekly Census Contact Hours
b.
Daily Census Contact Hours
Actual Hours of Attendance Procedure
Courses
a.
b.
3.
Noncredit
Credit
Independent Study/Work Experience
a.
b.
c.
D.
26
823
Summer Intersession (Summer 2011 - Prior to
July 1, 2011)
1.
2.
C.
Revised
Data
Summer Intersession (Summer 2010 only)
1.
2.
B.
Audit
Adjustments
Weekly Census Contact Hours
Daily Census Contact Hours
Noncredit Independent Study/
Distance Education Courses
-
Total FTES
15,608
-
15,608
Supplementary Information:
E.
In-Service Training Courses (FTES)
H.
Basic Skills Courses and Immigrant
Education
a.
b.
Noncredit
Credit
82
82
362
801
362
801
CCFS 320 Addendum
CDCP
-
-
Centers FTES
a.
b.
Noncredit
Credit
24
2,210
63
24
2,210
RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET REPORT
(CCFS-311) WITH AUDITED FINANCIAL STATEMENTS
There were no adjustments proposed to any funds of the District.
64
NOTES TO SUPPLEMENTARY INFORMATION
1.
PURPOSE OF SCHEDULES
A
-
Combining Statement of Net Assets by Fund and Statement of Revenues,
Expenses and Change in Net Assets by Fund
These statements report the financial position and operational results of the
individual funds of the District and the reconciling adjusting entries under GASB
Cod. Sec. C05.101.
B
-
Schedule of Expenditures of Federal Awards
The accompanying Schedule of Expenditures of Federal Awards includes the
Federal grant activity of the District and is presented on the modified accrual
basis of accounting. The information in this schedule is presented in
accordance with the requirements of the United States Office of Management
and Budget Circular A-133.
C
-
Schedule of State Financial Awards
The accompanying Schedule of State Financial Awards includes State grant
activity of the District and is presented on the modified accrual basis of
accounting. The information in this schedule is presented to comply with
reporting requirements of the California State System's Office.
D
-
Schedule of Workload Measures for State General Apportionment
Full-time equivalent students is a measurement of the number of students
attending classes of the District. The purpose of attendance accounting from a
fiscal standpoint is to provide the basis on which apportionments of State funds
are made to community college districts. This schedule provides information
regarding the attendance of students based on various methods of
accumulating attendance data.
E
-
Reconciliation of Annual Financial and Budget Report (CCFS-311) with Audited
Financial Statements
This schedule provides the information necessary to reconcile the fund balance
of all funds reported on the CCFS-311 to the audited financial statements.
65
FINDINGS AND RECOMMENDATIONS
SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS
Type of auditor's report issued:
Unqualified
Internal control over financial reporting:
Material weakness(es) identified?
Significant deficiency(ies) identified not considered
to be material weakness(es)?
Noncompliance material to financial statements
noted?
Yes
X
No
Yes
X
None reported
Yes
X
No
Yes
X
No
Yes
X
None reported
X
No
FEDERAL AWARDS
Internal control over major programs:
to be material weakness(es)?
Type of auditor's report issued on compliance for
major programs:
Unqualified
Any audit findings disclosed that are required to be
reported in accordance with Circular A-133,
Section .510(a)?
Yes
Identification of major programs:
CFDA Number(s)
84.033, 84.063, 84.007, 84.375
84.048
Name of Federal Program or Cluster
Student Financial Assistance Cluster
VTEA Cluster
Dollar threshold used to distinguish between Type A
and Type B programs:
Auditee qualified as low-risk auditee?
$
730,523
X
Yes
No
STATE AWARDS
Internal control over state programs:
to be material weaknesses?
Type of auditor's report issued on compliance for
state programs:
Yes
X
No
Yes
X
None reported
Unqualified
72
SECTION II - FINANCIAL STATEMENT FINDINGS
1.
INTERNAL CONTROL - REVENUE AND ACCOUNTS RECEIVABLE - ATHLETIC
EVENTS GATE RECEIPTS
Criteria
Best practices for internal controls and District policies and procedures.
Condition
The following issues were noted over the cash receipts transaction cycle:



There is no evidence cash boxes are returned in a timely manner.
Receipt/ticket stubs are not maintained and reconciled back to the cash count
form to ensure money from all items sold was actually collected.
There is no evidence cash is counted in dual custody when submitted to the
Bursar's office.
Effect
Misappropriation of assets may occur.
Cause
The District did not have formal review procedures in place to ensure cash is counted in
dual custody and to ensure receipts or ticket stubs were maintained and cash boxes
were returned in a timely manner.
Fiscal Impact
Not applicable. The items documented are recommended enhancements of internal
control procedures for the revenue and accounts receivable transaction cycle.
Recommendation
We recommend the following:



Documentation that cash boxes are returned to the Cashier on a weekly basis
should be maintained.
Copies of receipts/ticket stubs should be attached to the cash count form to
ensure all cash is accounted for.
Cash should be counted in dual custody when submitted to the Cashier's office.
73
(Continued)
1.
INTERNAL CONTROL - REVENUE AND ACCOUNTS RECEIVABLE - ATHLETIC
EVENTS GATE RECEIPTS (Continued)
Corrective Action Plan
The following processes and procedures have subsequently been implemented:



2.
Bursar Office prepares an event package in advance of each athletic event,
based on the calendar provided by the Athletic Office. The event package
includes a cash box, reconciliation report and two sets of pre-numbered tickets.
The day before the athletic event, the Game Manager picks up the event
package and signs-out cash.
The day after the athletic event, the Game Manager returns the cash, any unsold
tickets and the completed reconciliation report. The Game Manager and the
student assistant (who sold the tickets) sign the reconciliation report. The
cashiers then review the reconciliation report, count the cash in dual custody and
note any discrepancies.
INTERNAL CONTROLS - FIXED ASSETS
Criteria
Best practices for internal controls and District policies.
Condition
The following issues were noted over the fixed asset transaction cycle:



A significant number of assets required reclassification due to incorrect coding
during the purchasing process.
$9.9 million of asset depreciation was reclassified to correct coding errors.
Depreciation activity and the audit footnotes were not completed timely.
Effect
End of fiscal year cash transfers at the Placer County Treasury.
Cause
The District's fixed asset process to record assets is executed at the end of the fiscal
year. The items documented are recommended enhancements of internal control
procedures for the fixed asset transaction cycle.
74
(Continued)
2.
INTERNAL CONTROLS - FIXED ASSETS (Continued)
Fiscal Impact
Not applicable.
Recommendation
We recommend implementing the following:


Quarterly asset processing.
Monthly review of purchase order coding.
The District implemented a process to record assets on a quarterly basis. The District
will develop a formal process to review purchase order coding monthly.
75
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
76
SECTION IV - STATE AWARD FINDINGS AND QUESTIONED COSTS
3.
STATE COMPLIANCE - ADMISSIONS AND RECORDS - RESIDENCY
Criteria
Contracted District Audit Manual, Section 425 states: "Each district must act to ensure
that only the attendance of California residents is claimed for State support of credit
classes."
Condition
When Student applications were downloaded into Banner from CCCApply, any student
with a previous resident status in the system was coded resident (5) even if they
indicated on their application that they were a non-resident (6).
The District detected this issue in 2010-2011, with the assistance of the Information
Technology Department.
Effect
Non-resident students were paying tuition and fees based on resident status. The
District reported non-resident students as residents within the 320 apportionment report.
Cause
When the District converted to the Banner operating system, there was an interface that
was not properly implemented.
Fiscal Impact
Loss of revenue in the amount of $672,962.
Recommendation
The District should perform a test run of data for any major upgrade or software
changes to ensure data is accurately processed and stored.
Since discovering the coding error, the District has modified the Banner program that
provides the interface between CCCApply and Banner.
The District has individually reviewed the supporting documentation submitted by
affected students dating back to 2009-10. The appropriate residency determination was
made and entered into Banner; corrected 320 apportionment reports for 2009-10 and
2010-11 were submitted to the Chancellor's Office.
77
(Continued)
3.
STATE COMPLIANCE - ADMISSIONS AND RECORDS - RESIDENCY (Continued)
Corrective Action Plan (Continued)
Scenarios have been added to the testing scripts to ensure that every student type is
tested with variables of resident and non-resident scenarios when implementing
software upgrades and patches.
4.
STATE COMPLIANCE - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS)
Criteria
Title 5 Section 56022 states: "An up-to-date SEC (Student Educational Contract) for the
current year, signed by the student and the DSPS professional staff person, should be
available in the file of each student receiving services paid through the DSPS office.
Also, students in noncredit special classes should have included in their SEC a detailed
description of the criteria used to evaluate the student’s measurable progress."
Condition
Based on our sample of 25 students that received DSPS support and services, we noted
the following:


One of the DSPS student selections did not have a Student Education Contract
(SEC) that was signed by the student.
One of the DSPS student selections did not have a Student Education Contract
(SEC) for the current year.
Effect
Inaccurate reporting of the number of students served by DSPS.
Cause
Adequate internal control procedures may not have been implemented and enforced.
Fiscal Impact
Not determinable.
Recommendation
We recommend management ensure all students claimed under the DSPS program
have up-to-date Student Education Contracts as well as any other required forms
maintained in the student files.
78
(Continued)
4.
STATE COMPLIANCE - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS)
(Continued)
The District will commit to undertake a complete review of all DSPS files during the
2011-12 year to ensure 100 percent compliance.
79
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Finding/Recommendation
1. Internal Controls - Revenue and
Accounts Receivable
Current Status
Implemented.
The following issues were noted over the
cash receipt transaction cycle:

There is no evidence of review of the
parking meter cash receipt deposit
report prepared by the Bursar's Office.

There is no evidence that cash
received from the parking meters is
counted in dual custody.
We recommend the District perform cash
counts in dual custody and evidence both
the dual count and other review
procedures via signatures/initials and the
date of performance by the individuals
responsible.
2. Information Systems - Concurrent
Enrollment System Reports
Implemented.
The Admissions and Records department
was unable to generate satisfactory
reports that would allow sufficient testing
of concurrent enrollment. The reports
generated included full-time students that
were previously considered concurrently
enrolled.
The District should review the module
used to generate the list of concurrently
enrolled students to ensure the reports
generated are accurate and complete.
80
District Explanation
If Not Fully
Implemented

SIERRA JOINT COMMUNITY COLLEGE DISTRICT COUNTY OF

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