Southeast Kentucky Community and Technical College Online Compliance Certification
Judgment of Compliance |
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Compliance |
Partial Compliance |
Non-Compliance |
NARRATIVE/JUSTIFICATION FOR JUDGMENT OF COMPLIANCE
Following the approval of consolidation with Cumberland Valley Technical College (CVTC)(December, 2001), Southeast Kentucky Community and Technical College [SKCTC] (then Southeast Community College) can document a history of fiscal stability as well as a position of increasing financial strength. In January of 2002, the budgets of the two Institutions were combined [1], and a single, consolidated operating budget has been developed each year since [2]. Documents provided will demonstrate—through trend analysis—the sound financial health of the Institution.
The Financial Statements for 2000-01 through 2004-05 budget years consist of the Schedule of Assets, Liabilities, and Net Assets, (Balance Sheet), and a Schedule of Revenues, Expenses, and Changes in Net Assets, (Income Statement). [3] (For trend analysis purposes, the budgets for CVTC and SKCTC are combined for 2000-01.) There are several trends that have emerged. In FY 2000-01, for example, tuition and fees represented 16.5 percent of total budget revenues. In FY 2005-06, tuition and fees accounted for 21.6 of total budget revenues. The increases in tuition and fees reflect reductions in the College’s state allocation, due primarily to budget cuts from the Commonwealth of Kentucky. During this same five-year period, enrollment grew by 58.8 percent, and tuition rates increased by 77 percent. The growth in federal and state grants [4] is a reflection of both an increase in financial assistance because of enrollment increases as well as the Institution’s assuming responsibility for adult education functions in two eastern Kentucky counties, with the latter being integrated into academic skills and GED programming at the College. Moreover, SKCTC has received some $3.2 million in Title II C (Perkins) funding during the last five years. The Institution has also taken steps to strengthen its financial position by outsourcing its bookstore. In 2004-05, the bookstore’s net assets were converted to cash, providing $327,000 in additional one-time resources for SKCTC. The bookstore contract also calls for the College to receive 11 percent of gross sales annually. In 2004-05, this amount was just over $112,000. This amount is expected to increase over the five years of the contract.
In the 2004-05 budget year, mandatory transfers (debt service) were not budgeted by any college in the Kentucky Community and Technical College System (KCTCS) because the Commonwealth of Kentucky consolidated and refinanced the state’s public higher education Institutions’ outstanding bonds. All of SKCTC’s related debt was refinanced and assumed by the State, which is now paying the debt service directly on the bond issues rather than including it in the College’s budget and transferring funds to the Institution as a pass through.
Statements of Net Assets and Schedules of Revenue, Expenses and Changes in Net Assets for 2001-02 through 2005-06 [5] are provided as documentation for financial history. The external audit for 2001-02 reflects the implementation of GASB Statement #35, Basic Financial Statements, and Management’s Discussion and Analysis for Public Colleges and Universities. The first audit where a consolidated operational budget is reflected is the 2001-02 Financial Report. (For purposes of analysis, the CVTC and SKCTC financial statements have been consolidated.) The consolidated statements are clearly identified in the supporting documents. The Kentucky Community and Technical College System requires a mandatory budget reserve in the event of a state budget cut or an enrollment decline. A budget reserve has been required since 2001-02 and has been increased each year since. For 2004-05, SKCTC’s budget reserve was 3 percent of its public funds base (tuition and fees + state allocation).
With the implementation of GASB #35, it was requested that the College be officially referenced in KCTCS’ external audit management letter. Prior to 2003-04, there was no official specific reference to denote a specific college within KCTCS in the management letter. Since this change, SKCTC has not received any recommendation within the external management letter.
The College has a growing endowment. The Endowment Stewardship Report as of June 30, 2005, reveals the specific of existing endowments [6]. SKCTC is now in the implementation phase of a major gifts campaign, called Fulfilling the Promise. To date, some $3.3 million in gifts and pledges have been raised toward a $4 million goal.
The above noted items substantiate the colleges compliance with having a history of financial stability and health.
Supporting Documents |
Links to Supporting Documents |
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You must be connected to the World Wide Web to access the following links. (Click on the link to access the document.) |
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1 |
Consolidated Budget SECC and CVTC, 2001-1002 |
http://www.secc.kctcs.edu/sacs/supportingdocuments/combined budget |
2 |
Analysis of the Consolidated Budget for SECC and CVTC FY2001 through FY2006 for comparison purposes only |
http://www.secc.kctcs.edu/sacs/supportingdocuments/3.10.1 Analysis budget 2001-2006.htm |
3 |
Audited Financial Statements for SEC 2000-2001, CVTC 2000-2001; SEC 2001-2002, CVTC 2001-2002; SKCTC 2002-2003, 2003-2004, 2004-2005 Correspondence from KCTCS System Office regarding Annual Financial Reports FY 2003-04 |
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4 |
Grant Support |
http://www.secc.kctcs.edu/sacs/supportingdocuments/3.10.1 grant support.pdf |
5 |
Analysis of Net Assets for SKCTC FY2002 through FY2005 for comparison purposes only |
http://www.secc.kctcs.edu/sacs/supportingdocuments/3.10.1 analysis net assets 2002-2005.pdf |
6 |
Endowment Stewardship Report |
http://www.secc.kctcs.edu/sacs/supportingdocuments/3.10.1 Endowment report.htm |
