LCC 6-30-08 Audit (FINAL)

Rehmann Robson

Description

REPORT ON FINANCIAL STATEMENTS (with additional information) FOR THE YEARS ENDED JUNE 30, 2008 AND 2007 LANSING COMMUNITY COLLEGE TABLE OF CONTENTS Page Management’s Discussion and Analysis 1-10 Independent Auditors’ Report 11-12 Audited Financial Statements for the Years Ended June 30, 2008 and 2007 Balance Sheets 13 Statements of Revenues, Expenses and Changes in Net Assets 14 Statements of Cash Flows 15-16 Notes to Financial Statements 17-33 Additional Information for the Year Ended June 30, 2008 Combining Balance Sheet 34 Combining Statement of Revenues, Expenses, Transfers and Changes in Net Assets 35 * * * * * LANSING COMMUNITY COLLEGE MANAGEMENT’S DISCUSSION AND ANALYSIS YEARS ENDED JUNE 30, 2008 AND 2007 The discussion and analysis of Lansing Community College’s financial statements provides an overview of the College’s financial activities for the years ended June 30, 2008 and 2007. Management has prepared the financial statements and the related footnote disclosures along with the discussion and analysis. Responsibility for the accuracy and completeness of this information rests with the College’s management. Using this Report The College's financial statements have been prepared in accordance with the following standards. In June 1999, the Governmental Accounting Standards Board (“GASB”) released Statement No. 34, Basic Financial ...

Informations

• Publié par: Cheyr
• Nombre de lectures: 13
• Langue: English

Extrait

             

       

  REPORT ON FINANCIAL STATEMENTS (with additional information)     FOR THE YEARS ENDED JUNE 30, 2008 AND 2007

   

LANSING COMMUNITY COLLEGE

TABLE OF CONTENTS              Management’s Discussion and Analysis      Independent Auditors’ Report       Audited Financial Statements for the Years Ended June 30, 2008 and 2007    Balance Sheets     Statements of Revenues, Expenses and Changes in Net Assets    Statements of Cash Flows    Notes to Financial Statements     Additional Information for the Year Ended June 30, 2008    Combining Balance Sheet    Combining Statement of Revenues, Expenses, Transfers  and Changes in Net Assets       * * * * *         

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LANSING COMMUNITY COLLEGE MANAGEMENT’S DISCUSSION AND ANALYSIS YEARS ENDED JUNE 30, 2008 AND 2007     The discussion and analysis of Lansing Community College’s financial statements provides an overview of the College’s financial activities for the years ended June 30, 2008 and 2007. Management has prepared the financial statements and the related footnote disclosures along with the discussion and analysis. Responsibility for the accuracy and completeness of this information rests with the College’s management.   Using this Report   The College's financial statements have been prepared in accordance with the following standards.   In June 1999, the Governmental Accounting Standards Board (“GASB”) released Statement No. 34, Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments. Changes in Statement No. 34 require a comprehensive one-line look at the entity as a whole including capitalization and depreciation of assets. In November 1999, GASB issued Statement No. 35,Basic Financial Statements and Management’s Discussion and Analysis for Public Colleges and Universities, which applies these standards to public colleges and universities. The State of Michigan has adopted these standards and therefore, has revised and issued theManual for Uniform Financial Reporting for Michigan Public Community Colleges, 2001. Subsequent GASB statements, when applicable, have been implemented as well.     Component Unit   In May 2002, GASB released Statement No. 39,Determining Whether Certain Organizations are Component Unitsseparate legal entities associated with a primary government that meet certain. Statement No. 39 requires that criteria are included with the financial statements of the Primary Reporting Unit.   In compliance with this statement, the Lansing Community College Foundation is reported as a component unit of the College and its financial activities are presented separately from the rest of the College’s activities in the Balance Sheets and Statements of Revenues, Expenses and Changes in Net Assets, in separate columns headed “Component Unit”.   This annual financial report includes the report of independent auditors, management’s discussion and analysis, the basic financial statements in the above referred to format, notes to financial statements, and additional information.  

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  Financial Highlights   The College’s financial position improved significantly during the fiscal year ended June 30, 2008 with a $14.2 million increase in total net assets. The three major categories of net assets changed somewhat, as shown in the graph below. Unrestricted net assets as shown here increased by approximately $8.0 million, from $13.5 to $21.5 million as a result of net increase in net assets. Also, the amount invested in capital assets, net of related debt increased as a result of the final phases of the Banner ERP implementation. 

Total Net Assets

$110 $100 $90 $80 $70 $60 FY 2008 $ $5 0 0 FY 2007 4 $30  lions )(in mil $20 $10 $ - Invested in capital Unrestricted Restricted     Balance Sheets and the Statement of Revenues, Expenses, and Changes in Net Assets   One of the most important questions to ask about the College’s finances is, “Is Lansing Community College as a whole better off or worse off as a result of the year’s activities?” The balance sheet and the statement of revenues, expenses, and changes in net assets report information on the College as a whole and on its activities in a way that helps answer this question.   These two statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector institutions. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These statements report Lansing Community College’s net assets and changes in them. When revenues and other support exceed expenses, the result is an increase in net assets. When the reverse occurs, the result is a decrease in net assets. The relationship between revenues and expenses may be thought of as Lansing Community College’s operating results.   You can think of LCC’s net assets - the difference between assets and liabilities - as one way to measure the College’s financial health or financial position. Over time, increases or decreases in the College’s net assets are one indicator of whether its financial health is improving or deteriorating. To assess the overall health of the College, you will need to consider many other non-financial factors, such as the trend in College enrollment, student retention, condition of the buildings, and strength of the faculty.

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  Below is an analysis of the major components of the net assets of the College as of June 30, 2008 and 2007, with prior year information shown to the right. The College significantly increased its cash and receivables from the increase in net assets and the liquidation of some short term investments (part of current assets). Construction was completed on the University Center Building and the fit out of the Health and Human Services Building third floor. The College also continued into the final phase of the implementation of a Banner ERP. In turn, the College’s capital assets, net of depreciation, increased slightly.   Net Assets as of June 30, 2008 and 2007(in millions)   2008 2007

Current assets Non-current assets Capital assets, net of depreciati on Other

Tot al assets

Current liabiliti es Long-term liabiliti es

Tot al li abilit ies

Net assets Invest ed in capital assets Restricted Unrestricted

Tot al net assets

Tot al li abilit ies and net assets

$ 33.2

 170.1  10.0

$ 213.3

$ 18.2  66.3

 84.5

 107.1  0.2  21.5

 128.8

$ 213.3

$ 23.2

 166.6  13.9

$ 203.7

$ 18.3  70.8

 89.1

 100.9  0.2  13.5

 114.6

$ 203.7

  A comparison of fiscal year 2008 and 2007 operating results is provided on the following page.

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  Operating Results for the Years Ended June 30, 2008 and 2007(in millions)   

Oper ating revenues:

Tuition and fees (net of scholarship allo wances)

Federal grants and contracts

State grants an d contr acts

Local grants and contracts

Sales and services of educational activities Sales and services of auxiliary activities

Miscellaneous

Total operating revenues

Oper ating expenses:

Instruction

Info rmation techno logy

Public services

Instructional sup port

Stu den t services

Institutional administr ation

Operation and maintenance of plant Depreciation expense

Total operating expenses

Op erating loss

Nonop erating revenues (expenses): State appro priation s Property tax levy Pell Gran t revenue Other nonoperating expenses - net  

Net nonoperating r evenues Other revenues: State capital appropr iations Capital gifts

Total other revenues

Net increase in net assets

Net assets - beginning of year

Net assets - end o f year

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200 8

200 7

$ 30 .3 $ 26 .2  4 .1 4 .7  1 .2 1 .9  2 .1 1 .5  1 .9 2 .4  2 .9 2 .6  0 .4 0 .3

 42 .9 39 .6

 39 .5 39 .9

 7 .3 5 .8  1 .9 1 .8  19 .6 19 .2  16 .6 16 .8  8 .4 8 .0  16 .3 14 .1

 7 .7 8 .7

 117 .3 114 .3

 (74 .4) (74 .7)

 31 .8 25 .0

 41 .7 39 .4  13 .4 11 .8  (1 .9) (1 .9)

 85 .0 74 .3

 2 .5 1 .6  1 .1 -

 3 .6 1 .6

 14 .2 1 .2

 114 .6 113 .4 $ 128 .8 $ 114 .6  

  Operating Revenues   Operating revenues include all transactions that result from the sales and/or receipts of goods and services such as tuition and fees. In addition, certain federal, state, and private grants are considered operating revenues if they are considered a contract for services and are not for capital purposes.   Operating revenue changes were the result of the following factors:  to increases in tuition and fee rates along with aTuition and fee revenue increased significantly due slight increase in enrollment.  contracts decreased $577 thousand as a result of reductions in several grantsFederal grants and including Energy and Efficiency and Alternative Energy, TANF/Work First, and Improving Teacher Quality grants.  $685 thousand as a result of reductions in several EDJT grantsState grants and contracts decreased including General Motors training.  services of educational activities decreased as a result of reduced General MotorsSales and training.   The following is a graphic illustration of operating revenues by source for 2008 and 2007:  

 

Tuition and fees, 71%

Tuiti on and fees, 66%

2008 Operating Revenues by Source

Auxiliary activities, 7%

Federal grants, 9%

Sales of educational  activities, 4%

Misc, 1% Local grants, 5%

State grants, 3%

2007 Operating Revenues by Source

Auxi liary activities, 7%

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Federal grants, 12%

Misc, 1%

Sal es of educational activities, 6%

Local grants, 4%

State grants, 4%

 

 

  Operating Expenses   Operating expenses are all the costs necessary to perform and conduct the programs and primary purposes of the College. Total operating expenses are up by approximately $3.0 million. Factors that influence this increase are:  Instructional costs decreased by $0.4 million due to more efficient delivery of sections.  million due to a redeployment of resources to theStudent services costs decreased by $0.2 implementation of the new ERP system by these student services staff.  The College’s depreciation expense decreased by $1.0 million. The legacy ERP system was fully depreciated at the end of last year.  Operation and maintenance of plant increased by $2.2 million due to repairs and upgrades to the photography building as well as increased operating costs from additional space occupied during the   o transition issues from the legacy to the

last few years, including new and recently acquired buildings.  Information technology costs increased by $1.5 million due t new ERP system.   The following is a graphic illustration of operating expenses by category:

s upport, 17%

Public services, 2%

2008 Operating Expenses

Information technolog y, 6%

Instructional  support, 16%

Public services, 2%

Information technology, 5%

Student services , 14%

Instruction, 34%

2007 Operating Expenses

Institutional administration, 7%

Institutional  Student services,  administra 15% 7%  tion,

Instruction, 35%

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Operations and maintenance of plant, 14%

Depreci ati on, 6%

Operations and maintenance of plant, 12%

Depreciation, 8%

 

 

  Nonoperating Revenues   Nonoperating revenues are all revenue sources that are mainly non-exchange in nature. They consist primarily of state appropriations, property tax revenue, investment income (including realized and unrealized gains and losses), and Pell Grant revenue.   Changes in nonoperating revenues were the result of the following factors:    $6.8 million. A significant portion of thisAn increase of 27.2% in state appropriations representing increase is a result of the appropriation of the delayed payment from fiscal year 2007 along with the one time reduction in fiscal year 2007 from the pension fund credit.  An increase of over 5.9% in property taxes representing $2.3 million.  An increase in investment income due to improved cash flow from increased net assets.   The graphs that follow illustrate the distribution of nonoperating revenues by source for 2008 and 2007:  

 

2008 Nonoperating Revenue

Proper ty tax levy 48%

State appropriations 36%

Investment incom e 1%

2007 Nonoperating Revenue

P roperty tax levy, 45%

State appropriati ons, 38%

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P ell Grant revenue 15%

Pel l Grant revenue, 15%

Investm ent income, 2%

 

 

 

  Statement of Cash Flows   Another way to assess the financial health of a college is to look at the statement of cash flows. Its primary purpose is to provide relevant information about the cash receipts and cash payments of an entity during a designated period. The statement of cash flows also helps users assess the College's:    Ability to generate future net cash flows  Ability to meet its obligations as they come due  Needs for external financing     Cash flows for the years ended June 30, 2008 and 2007(in millions):   

Cash provided (used) by: Operating activities Noncapital finan cing activities Capital and r elated financin g activities Investing activities

Net in crease (decr ease) in cash

Cash, beginn ing of year

2008

$ ( 65.1)  84.5  ( 12.4)  5.5

 12.5

 0.2

2007

$ (69.9)  79.9  (17.9)  1.0

 (6.9)

 7.1

Cash, end of year $ 12.7 $ 0.2     The College’s cash and cash equivalents increased by $12.5 million during 2008 primarily due to the increase in net assets.    

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  Capital Assets and Debt Administration   Capital Assets   As of June 30, 2008, the College had $170.1 million invested in capital assets, net of accumulated depreciation of $80.8 million. Depreciation expense totaled $7.7 million for the current fiscal year. Details of these assets at net book value for 2008 and 2007 are shown below:   20 08 20 07

Land $ 10 .8 $ 10.8 Buildings and imp rovements 141 .0 1 28.9 Eq uipment 11 .6 9.5 Infrastru cture 2 .0 2.2 Construction in p rogress 4 .7 15.2  Total $ 170 .1 $ 1 66.6     Major capital assets placed in service during the year were (in millions):    Furniture and equipment $6.0 million  Buildings and improvements $15.7 million   Planned capital expenditures for the fiscal year ended June 30, 2008 included final payments for the Banner ERP system installation.   Debt   At year end, the College had $70.7 million in outstanding debt including five outstanding bond issues. The 2002 bond issue will be paid off in May of 2012, the 2003 bond issue will be paid off in May of 2022, the 2005 bond issue will be paid off in May of 2022, the 2006 bond issue will be paid off in May of 2026 and the 2007 bond issue will be paid off in May of 2026. The table below summarizes these amounts.   2008 2007 2002 building & site bonds $ 11.7 $ 14.2 2003 building & site bonds 15.1 16.6 2005 building & site bonds 22.8 22.9 2006 building & site bonds 9.9 9.9 2007 building & site bonds 9.5 9.5 National City note payable 1.7 1.9 $ 70.7 $ 75.0      

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