to download free version.Section III: Comprehensive Standards (Resources: Financial and Physical Resources)
3.10.1. The institution’s recent financial history demonstrates financial stability.
JUDGMENT OF COMPLIANCE
Compliance.
NARRATIVE/JUSTIFICATION FOR JUDGMENT OF COMPLIANCE
Northeast Alabama Community College shows compliance in demonstrating financial stability in its recent financial history.
This stability is demonstrated through steady or increasing totals on unrestricted assets, investments, and cash balances; steady or increasing annual revenues; appropriate Educational and General Expenditures per FTE student; and consistent, appropriate funding to all programs and services of the college.
As shown in Table 1, investments have increased from $162,000 in 1996 to $1.7 million in 2003. Total unrestricted assets have increased from $951,472 in 1996 to $2.8 million in 2003, and cash balances remain stable. Annual revenues have shown a steady increase over 1998-1999 through 2002-2003 (Table 2).
Table 1
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Northeast Alabama Community College |
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Selected Balance Sheet Figures of Audit Years 1996 – 2003: All Unrestricted, Investments, Cash |
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All Unrestricted |
Investments |
Cash |
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30-Sep-96 |
$951,472 |
$162,000 |
$262,891 |
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30-Sep-97 |
$1,077,525 |
$171,153 |
$495,835 |
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30-Sep-98 |
$1,081,121 |
$185,755 |
$450,083 |
|
30-Sep-99 |
$945,259 |
$195,707 |
$332,773 |
|
30-Sep-00 |
$1,020,493 |
$206,250 |
$396,495 |
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30-Sep-01 |
$1,413,135 |
$100,000 |
$910,840 |
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30-Sep-02 |
$2,571,368 |
$1,004,980 |
$1,031,785 |
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30-Sep-03 |
$2,895,995 |
$1,724,643 |
$992,294 |
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Source: Auditor’s Reports of 1996 – 2002 and balance sheet at September 30, 2003 (Business Office; 2003 Auditor’s report not completed at this time) |
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Table 2
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Northeast Alabama Community College |
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Revenue by Year, 1998-1999 through 2002-2003 |
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Year |
Total Revenue |
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1998-1999 |
$7,890,389 |
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1999-2000 |
$8,535,477 |
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2000-2001 |
$8,646,649 |
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2001-2002 |
$9,878,203 |
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2002-2003 |
$9,956,404 |
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Source: Financial Statements of respective years: for FY 1999, 2000, and 2001 “Statement of Revenues, Expenditures, and Other Changes--Current Funds": combined total unrestricted, restricted, and auxiliary revenues; for FY 2002 and 2003 "Statement of Revenues, Expenses, and Changes in Net Assets": combined total of Operating, Nonoperating, and Other Revenues (referencing differences due to change in reporting format effective 2002). |
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Table 3
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Northeast Alabama Community College |
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E & G Expenditures per Full-time Student 1998-1999 through 2002-2003 |
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Year |
E & G Expenditures |
FTE |
E & G Expenditures per FTE |
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1998-1999 |
8,218,503 |
2,532 |
$3,246 |
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1999-2000 |
8,425,968 |
2,579 |
$3,267 |
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2000-2001 |
7,976,828 |
2,646 |
$3,015 |
|
2001-2002 |
8,182,212 |
2,938 |
$2,785 |
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2002-2003 |
9,075,692 |
3,048 |
$2,978 |
| Source: Financial Statements of respective years: 1999, 2000, and 2001, "Statement of Revenues, Expenditures, and Other Changes--Current funds, Expenditures: Total of Unrestricted, Auxiliary, and Restricted Expenditures; 2002 and 2003, "Statement of Revenues, Expenditures, and Changes in Net Assets: Total Operating Expenses" (referencing differences due to change in reporting format effective 2002). | |||
Table 3 shows Educational and General (E & G) expenditures per full-time equivalent student (FTE). Several factors have contributed to the lower expenditures per FTE after 1999-2000: (1) proration was declared late spring, 2001; (2) cost-containing measures were put into place effective during the 2001-2002 year, such as temporarily not replacing a number of retiring personnel and reorganizing assignments to allow maximization of existing personnel; (3) addition of classes and increase in overall enrollment increased the effectiveness of the instructional systems in place. The resulting stronger financial position of the college is reflected in the somewhat higher expenditure per FTE shown in 2002-2003.
Tables 4, 5, and 6 show overall funding to all aspects and services of the college over the past three fiscal years.
Table 4
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Northeast Alabama Community College |
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Educational and General Expenditures by Organizational Classification, 2000-2001 |
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Category |
Amount |
Percent |
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Instruction |
$2,848,117 |
35.7% |
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Training for Business/Industry |
$14,545 |
0.2% |
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Academic Support |
$699,470 |
8.8% |
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Student Services |
$504,462 |
6.3% |
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Institutional Support |
$888,825 |
11.1% |
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Operation and Maintenance of Plant |
$781,188 |
9.8% |
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Scholarships |
$2,149,543 |
27.0% |
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Auxiliary Enterprises |
$90,678 |
1.1% |
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Total |
$7,976,828 |
100.0% |
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Source: Financial Statement for FY 2001, “Statement of Revenues, Expenditures, and Other Changes—Current Funds”: total of unrestricted and restricted E & G Expenditures and total Auxiliary. |
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Table 5
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Northeast Alabama Community College |
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Educational and General Expenditures by Organizational Classification, 2001-2002 |
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Category |
Amount |
Percent |
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Instruction |
$3,043,222 |
37.2% |
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Training for Business/Industry |
$56,826 |
0.7% |
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Academic Support |
$796,908 |
9.7% |
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Student Services |
$479,176 |
5.9% |
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Institutional Support |
$927,828 |
11.3% |
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Operation and Maintenance of Plant |
$865,275 |
10.6% |
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Student Aid (Scholarships) |
$1,595,475 |
19.5% |
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Auxiliary Enterprises |
$132,001 |
1.6% |
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Depreciation* |
$285,501 |
3.5% |
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Total |
$8,182,212 |
100.0% |
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*Depreciation included in E & G effective FY 2002. |
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Source: Financial Statement for FY 2001, “Statement of Revenues, Expenses, and Changes in Net Assets": Operating Expenses |
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Table 6
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Northeast Alabama Community College |
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Educational and General Expenditures by Organizational Classification, 2002-2003 |
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Category |
Amount |
Percent |
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Instruction |
$3,572,487 |
39.4% |
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Training for Business/Industry |
$152,585 |
1.7% |
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Academic Support |
$931,488 |
10.3% |
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Student Services |
$597,380 |
6.6% |
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Institutional Support |
$1,099,485 |
12.1% |
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Operation and Maintenance of Plant |
$946,348 |
10.4% |
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Student Aid (Scholarships) |
$1,299,232 |
14.3% |
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Auxiliary Enterprises |
$166,334 |
1.8% |
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Depreciation |
$310,353 |
3.4% |
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Total |
$9,075,692 |
100.0% |
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Source: Financial Statement for FY 2002, “Statement of Revenues, Expenses, and Changes in Net Assets": Operating Expenses |
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Two other factors that contribute to financial stability are (1) the institution’s lack of long-term indebtedness, which allows full utilization of all annual revenues for operations, and (2) the maintenance of an operating surplus to hedge against fluctuations in funding. The Alabama Department of Postsecondary Education recommends that colleges within the system maintain a two-month operating surplus. NACC ended the 2002-2003 fiscal year with an unrestricted fund balance operating surplus of 1.6 million, which represents a greater than two-month operating surplus.
In the accompanying documentation, Northeast provides financial statements and auditor’s reports for the last six fiscal years. As the “Summary of Examiner’s Results” presented in these reports consistently indicates, Northeast’s financial statements were found to be excellent. The examiner’s opinion was issued as “unqualified,” with no material weaknesses identified concerning internal controls, no reportable conditions found, and no material noncompliance found. For federal awards, the opinion was also “unqualified,” with no internal control weaknesses identified and no reportable weaknesses.
Northeast has no endowment monies at present. The college is currently in the process of organizing a foundation. The status of the foundation is explained in Comprehensive Standard 3.2.12.
SUPPORT DOCUMENTATION
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Source |
URL/Special Instructions |
| Auditor's Report, 2002-2003 | |
| Auditor's Report, 2001-2002 | www.nacc.edu/sacspage/sacs/audit2002.pdf |
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Auditor's Report 2000-2001 |
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Auditor's Report 1999-2000 |
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Auditor's Report 1998-1999 |
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| Auditor's Report 1997-1998 | www.nacc.edu/sacspage/sacs/Audit1998.pdf |
| Auditor's Report 1996-1997 | www.nacc.edu/sacspage/sacs/Audit1997.pdf |
| Budget, 2003-2004 | www.nacc.edu/sacspage/sacs/budget2004.pdf |
| Budget, 2002-2003 | www.nacc.edu/sacspage/sacs/budget2003.pdf |
| Budget, 2001-2002 | www.nacc.edu/sacspage/sacs/budget2002.pdf |
| Budget, 2000-2001 | www.nacc.edu/sacspage/sacs/budget2001.pdf |
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Financial Statement of September 30, 2003 |
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