Comprehensive Annual Financial Report for the fiscal year ended August 31, 2005 Austin Community College District Texas
Austin Community College District Austin, Texas
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED AUGUST 31, 2005
Prepared by Business Services Austin Community College District
THIS PAGE LEFT BLANK INTENTIONALLY.
Introductory Section
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT Years Ended August 31, 2005 and 2004 TABLE OF CONTENTS
PAGE
EXHIBIT
INTRODUCTORY SECTION Table of Contents
i-iii
Board of Trustees and Key Officers
v
Organizational Chart
vi
Letter of Transmittal
vii-xiii
Certificate of Achievement for Excellence in Financial Reporting
xiv
FINANCIAL SECTION Independent Auditors’ Report ………………………………………………..
1-2
Management’s Discussion and Analysis (Unaudited) .............................
3-16
Basic Financial Statements Statements of Net Assets.....................................................................
17
1
Statements of Financial Position – ACC Foundation ............................
18
1A
Statements of Revenues, Expenses and Changes in Net Assets ........
19
2
Statements of Activities – ACC Foundation
20
2A
Statements of Cash Flows ...................................................................
21-22
3
Notes to the Basic Financial Statements .............................................
23-54 SCHEDULES
Schedules Required by the Texas Higher Education Coordinating Board Schedule of Operating Revenues.........................................................
55
A
Schedule of Operating Expenses by Object .........................................
56
B
Schedule of Non-Operating Revenues and Expenses..........................
57
C
i
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT Years Ended August 31, 2005 and 2004 TABLE OF CONTENTS
Schedule of Net Assets by Source and Availability ..............................
PAGE
SCHEDULES
58
D
STATISTICAL SECTION District Expenditures by Function – Last Ten Fiscal Years ………………
59-60
District Revenues by Source – Last Ten Fiscal Years …………………...
61-62
Property Tax Levies and Collections – Last Ten Fiscal Years …………..
63-64
Assessed and Net Assessed Value of Property – Last Ten Fiscal Years
65
Property Tax Rates – Direct and Overlapping – Last Ten Fiscal Years ..
66-67
Principal Taxpayers – August 31, 2005 ……………………………………
68
Computation of Legal Debt Margin – August 31, 2005 ……………………
69
Ad Valorem Tax Rates Authorized and Assessed – Last Ten Fiscal Years
70
Ratio of Bonded General Obligation Debt to Assessed Value and Bonded Debt per Capita ……………………………………………………
71
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to General Expenditures..………………………………….
72
Direct and Overlapping Bonded Debt – August 31, 2005 ………………..
73
Revenue Bond Coverage – Last Ten Fiscal Years ……………………….
74-75
Student Enrollment – Last Ten Fiscal Years ………………………………
76
Student Enrollment Demographics – Last Ten Fiscal Years …………….
77-78
Tuition and Fee Schedule – Last Ten Fiscal Years ………………………
79
2005 Faculty Statistics ………………………………………………………
80
Demographic Statistics – Last Ten Fiscal Years …………………………
81
Miscellaneous Statistics – August 31, 2005 ………………………………
82
ii
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas COMPREHENSIVE ANNUAL FINANCIAL REPORT Years Ended August 31, 2005 and 2004 TABLE OF CONTENTS
PAGE
SCHEDULES
FEDERAL AWARDS SECTION Independent Auditors’ Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed and In Accordance With Government Auditing Standards…
83-84
Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance With OMB Circular A-133 ..........................
85-86
Schedule of Expenditures of Federal Awards..........................................
87
Notes to the Schedule of Expenditures of Federal Awards......................
88-89
Schedule of Federal Findings and Questioned Costs..............................
90-92
Schedule of Federal Prior Year Audit Findings........................................
93
E
STATE AWARD SECTION Independent Auditors Report on Compliance with Requirements Applicable to Each Major State Program and on Internal Control over Compliance in Accordance with State of Texas Single Audit Circular
94-95
Schedule of Expenditures of State Awards .............................................
96
Notes to the Schedule of Expenditures of State Awards .........................
97-98
Schedule of State Findings and Questioned Costs .................................
99-100
Schedule of State Prior Year Audit Findings ...........................................
101
iii
F
THIS PAGE LEFT BLANK INTENTIONALLY.
iv
AUSTIN COMMUNITY COLLEGE DISTRICT BOARD OF TRUSTEES AND KEY OFFICERS Years Ended August 31, 2005 and 2004
BOARD OF TRUSTEES Term Expires May 31
Officer Dr. Barbara Mink, Chair John Hernandez, Vice Chair Jeffrey Richard, Secretary Rafael Quintanilla Dr. Lillian Davis Veronica Rivera Nan McRaven Dr. John Worley Allen Kaplan
2006 2008 2010 2010 2008 2010 2008 2006 2006
KEY OFFICERS Dr. Stephen B. Kinslow, President Ben Ferrell, CPA, Vice President Business Services Gerry Tucker, Associate Vice President, Human Resources
v
AUSTIN COMMUNITY COLLEGE DISTRICT ORGANIZATIONAL CHART
vi
December 19, 2005 Honorable Chairman, Board of Trustees, and President The Citizens of the Austin Community College District Dear Board Members and President: The following comprehensive annual financial report of the Austin Community College District (the College) for the fiscal year ended August 31, 2005, is hereby submitted. Responsibility for the preparation and integrity of the financial information, and the completeness and fairness of the presentation, including all disclosures, rests with the College. The financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) as established by the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) and comply with Annual Financial Reporting Requirements for Texas Public Community and Junior Colleges as set forth by the Texas Higher Education Coordinating Board (THECB). The Notes to the Financial Statements are provided in the financial section and are considered essential to fair presentation and adequate disclosure for this financial report. The notes include the Summary of Significant Accounting Policies for the College and other necessary disclosures of important matters relating to the financial position of the College. The notes are treated as an integral part of the financial statements and should be read in conjunction with them. The College is reporting as a special purpose government engaged solely in business type activity (BTA). In accordance with GASB Statements 34 and 35, this presentation of financial reporting combines all fund groups into a single column and resembles the format of the corporate presentation, thus facilitating comparison. To the best of our knowledge, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the College. All disclosures necessary to enable the reader to gain an understanding of the District’s financial activities have been included. The comprehensive annual financial report (CAFR) is presented in five sections: introductory, financial, federal single audit, state single audit, and statistical section. The introductory section, which is unaudited, includes this transmittal letter, the College’s organizational chart, and a list of the College’s principal elected and appointed officials. The financial section includes the report of the independent public accountants on the basic financial statements and schedules, the management discussion and analysis, the basic financial statements, and notes to the basic financial statements. The statistical section includes selected unaudited financial and demographic information presented on a multi-year basis. The federal and state single audit report sections contain the schedules and reports required by statute. The College is required to undergo an annual federal single audit in conformity with the provisions of the Single Audit Act Amendments of 1996, and U.S. Office of Management
vii
and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and an annual state single audit in conformity with the Texas Governor’s Office of Budget and Planning Uniform Grant Management Standards Single Audit Circular. Information related to these single Audits, including the schedule of federal expenditures of awards, schedule of state expenditures of awards, and auditor’s reports on compliance and on internal controls is included in the federal and state single audit sections of this report. Governmental Structure The Austin Community College District was established as a public community college by voters of the Austin Independent School District in an election held in Travis County, Texas, in December 1972. The College operates as a community college district under the Constitution of the State of Texas and the Texas Education Code. The College is governed by an elected nine-member, Board of Trustees (hereinafter called the “Board”). At each election, three Trustees are elected to serve in a six-year, at-large position. The Board holds regularly scheduled meetings on the first Monday of each month, and a work session on the third Monday of each month, unless otherwise announced. Board meetings are held in the Boardroom at the College’s administrative office building (Highland Business Center) unless otherwise provided in the notice of a meeting. The Board has the final authority to determine and interpret the policies that govern the College and has oversight responsibility of the College’s activities limited only by the state legislature, the courts, and the will of the people as expressed in Board of Trustee elections. Official Board action is taken only in meetings that comply with the Open Meetings Act and are based on a majority vote of a quorum (five members) of the Board. In general, the Board provides policy direction and sets goals for the College consistent with the College’s role and mission. Besides general Board business, trustees are charged with numerous statutory regulations, including appointing the tax assessor/collector, ordering elections, and issuing bonds. The Board is also responsible for appointing the President, setting the tax rate, and adopting the budget for the ensuing fiscal year. Mission and Values Austin Community College District, a comprehensive two-year institution established in 1972, is dedicated to providing quality education that exceeds the expectations of its service area as defined by Texas Education Code 130.166. This service area spans across eight counties, and includes all of Bastrop, Hays, Gillespie, Caldwell, and Blanco counties, most of Travis county, and part of Williamson and Gonzales counties. Accordingly, the vision statement is as follows: “As a team, we will provide access to educational excellence and serve our students and community with passion and commitment.” Furthermore, Austin Community College is committed to: • •
Communication – belief in an environment that promotes an open and responsible exchange of ideas; Access – belief in providing educational opportunities for all members of the community;
viii
• • •
Responsiveness – belief in targeting actions to address service area and internal needs within available resources; Excellence – belief in a commitment to integrity and exemplary standards in educational programs and services to students, faculty, and staff; and Stewardship – belief in personal and professional ownership that generates accountability.
Economic Condition and Outlook Travis and Williamson Counties, portions of which are included in the College’s taxing district, are located in Central Texas, 150 miles inland from the Gulf of Mexico. According to the Bureau of Economic Analysis, the population of Travis County, the primary county in the district, was 854,407 as of 2003, an increase of almost 47% from 1990 to 2003, and is expected to continue to grow in the future. Austin is the state capital, and consequently 16% of its workforce is employed with state and local government agencies. The remainder of the county’s economic base consists of manufacturing, computer technology, and trade and service industries. Travis County and the surrounding region are recovering well from an economic downturn which adversely impacted local employment in the high tech sector. According to the Texas Workforce Commission, the regional civilian workforce had increased nearly 3% from 504,154 in 2004 to 517,487 in 2005. The unemployment rate continued to improve during 2005 and reportedly was 4.1%, which is slightly lower than the statewide unemployment rate of 5%. According to the 2000 census, residents of Travis County are typically well educated, with 40.6% of the workforce population over 25 possessing a bachelor’s degree or higher. As the high tech industries continue to rebound, there should once again prove to be a valuable resource of skilled professionals. The College is optimistic that Travis County and the surrounding areas will continue to prosper. During the past three years, the College experienced significant budget challenges due to rescissions and reductions in state appropriations as a result of the lagging state economy. For the FY06-07 biennium the Texas State Legislature provided some relief by partially restoring state appropriations to the College by 3.8% over the FY04-05 biennium. The state reductions were mitigated by District voters approving a referendum in May 2003 to increase the College’s ad-valorem tax cap from .05 per $100 of valuation to .09 by 2006, and approved $99 million in General Obligation bonds. The College anticipates budget challenges in the future due to a growing demand for higher education, and costs increasing at rates greater than increases in state support. Major Initiatives The College has devoted significant time and effort in planning for the future. During FY 2005 the College continued major construction and renovation projects as defined in its current facilities master plan in order to provide space for ten thousand additional students by 2010 to meet the state’s “Closing the Gaps” initiative of increasing participation in higher education. In 2005 the College clearly emerged as the regional leader in the Closing the Gaps effort to promote economic development through an educated workforce. Unique and innovative programs such as the College Connection,
ix
which automatically admits area graduating high school seniors to the College, helped increase enrollment, particularly among traditionally under-represented students. College Connection has received national recognition and is being emulated by other community colleges in Texas and other states. Other major initiatives that highlighted FY 2005 include: •
• • •
•
• •
A successful annexation effort to extend the College’s Taxing District out to the city limits of Austin provided an additional $9 billion in appraised value, while providing more affordable access to higher education for all residents within the city of Austin; Formation of a local steering committee in the San Marcos ISD area to pursue annexation into the College’s taxing district; A district-wide administrative reorganization which focuses resources on student success and saves administrative expense; Opening of the Round Rock Higher Education Center in partnership with Texas State University – San Marcos, providing daytime college classes in Round Rock, Texas for the first time and strengthening the relationship with a key partner. Austin Community College and Texas State University-San Marcos also entered into a new, more comprehensive articulation agreement; A focus on process and quality that achieved a Level II Progress Award for performance excellence in information technology from the University of Texas Center for Performance Excellence – a recognition program based on the Malcolm Baldridge National Quality Award criteria; Selection of a nationally recognized Facilities Master Planning firm to update the College’s master plan based on a region-wide focus; and, Increased initiatives by the Austin Community College Foundation to enhance giving to the District for scholarships, endowments, and capital improvements.
While state funding reductions have transferred substantially more of the cost burden to students and local taxpayers, these constituencies have responded favorably to keep the College in a position to meet the future educational needs of the region. The College is moving ahead with significant plans for expansion thanks to its community support, and expects to maintain its role as a major source of post-secondary education and economic development in the Central Texas region. For FY 2006, the College plans to further develop its strategic academic and facilities planning for the region, which will include vigorously pursuing expansion of its taxing district through annexation. Financial Information Internal Controls: College management is responsible for establishing and maintaining internal controls designed to ensure that the assets of the College are protected from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statement in conformity with generally accepted accounting principles. The internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely
x
to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Single Audit: As a recipient of federal, state, and local financial assistance, the College also is responsible for ensuring that adequate internal control is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control is subject to periodic evaluation by management and the independent auditors of the College. As a part of the College’s single audits, described earlier, tests are made to determine the adequacy of the internal control, including that portion related to federal and state awards programs, as well as to determine that the College has complied with applicable laws and regulations. The results of the College’s single audits for the fiscal year ended August 31, 2005, provided no instances of material weaknesses in internal control. Budgeting Controls: The College continues to apply budgetary controls and accounting on a fund basis. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the College’s Board of Trustees. Activities of the unrestricted current fund, auxiliary enterprises fund, and retirement of indebtedness fund are included in the annual appropriated budget. The College also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts roll over into the next year and are generally re-appropriated as part of the next year’s budget. As demonstrated by the statements and schedules included in the financial section of this report, the College continues to meet its responsibility for sound financial management. Please refer to the Management’s Discussion and Analysis for more information on the College’s financial activity and position. Cash Management During the year, the College hired an investment management firm to provide professional investment management of the College’s funds. Historically, the College’s funds were invested internally in demand deposits and TexPool (a state sponsored public funds investment pool). Beginning in June 2005, the College began to diversify its portfolio under the guidance of the investment management firm. As a result, on August 31, 2005 the College’s portfolio was comprised of 20% US Treasuries, 44% Federal Agencies, and 36% TexPool. Also, the College has changed its yield benchmark from the 90-day US Treasury Bill to the Merrill Lynch 0-6 Month Treasury Bill Index. Since the College started using the advisement services of PFM in June through August 31, 2005, the College’s annualized return was 3.96% compared to the benchmark of 3.27%. During that same period TexPool yielded 3.44%, so the College has noticeably improved its returns by diversifying from 100% in TexPool. The College earned interest revenue of $2,713,479 net of investment expenses on all investments for the year ended August 31, 2005. The College’s investment policy, which is reviewed and updated annually, is designed to minimize credit and market risks while maintaining a competitive yield on the portfolio. Accordingly, bank deposits were either insured by federal depository insurance or collateralized throughout the year. Note 3 to the Financial Statements provides details of the College’s investment portfolio and more fully describes the credit risk.
xi
Risk Management Risk Management is the ongoing process by which financial loss and exposure to risk is assessed and action is taken to minimize risk, to transfer risk, and to finance risk through various devices, including insurance. All areas of the College are reviewed for possible risk management and loss-control activities. The Vice President for Business Services is responsible for recommending to the President and the Board the amounts of insurance the College should carry and the amount of risk the College should assume through coinsurance and deductibles. Insurance coverage includes: Property; General Liability; Educators Liability; Employee Dishonesty Coverage; Police Liability; Automobile Liability; Student Travel and Medical Professional Liability; Accident Insurance for Children at Daycare Centers; Unemployment Compensation, and Workers’ Compensation. Additionally, all eligible employees are provided with paid, medical, dental, life, and accidental and dismemberment insurance. Dependent coverage is available at group rates. For unemployment compensation, the College elects to participate in a program administered by the Texas Association of School Boards (TASB) rather than being a taxing employer with rates set by the Texas Employment Commission. Rates are factored according to the experience and size of the College. The program is a form of self-insurance with stop-loss coverage. The College participates in a workers’ compensation insurance program that is administered by Texas Political Subdivisions (TPS). The College pays a premium for the fixed cost and loss fund maximum. The fixed costs cover claims administration and loss control and are not recoverable. Loss costs are only paid if the College experiences losses. Independent Audit State statutes require an annual audit by independent certified public accountants. The College’s Board of Trustees selected the accounting firm of McConnell & Jones. In addition to meeting the requirements set forth in state statutes, their audit also was designed to meet the requirements of the Federal Single Audit Act Amendments of 1996 and related OMB Circular A-133 and the state single audit related to the Uniform Grant Management Standards Single Audit Circular. The auditor’s reports related specifically to the Single Audits are included in the Single Audit Sections. Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Austin Community College District for its comprehensive annual financial report for the fiscal year ended August 31, 2004. This was the second consecutive year that the College has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized
xii
comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgements We are grateful to the Board of Trustees for its interest in planning and oversight of the financial operations of the College. We especially want to acknowledge the staff of Business Services for their hard work and dedicated service, for we could not have accomplished the preparation of this report without their diligent efforts. We would also like to thank the accounting firm of McConnell & Jones for their assistance with the audit.
xiii
xiv
Financial Section
INDEPENDENT AUDITORS’ REPORT
To the Board of Trustees Austin Community College District Austin, Texas We have audited the accompanying basic financial statements of the Austin Community College District (the “College”), as of and for the year ended August 31, 2005, as listed in the table of contents. These basic financial statements are the responsibility of the College’s management. Our responsibility is to express an opinion on these basic financial statements based on our audit. The financial statements of the College as of August 31, 2004, were audited by other auditors whose report dated November 24, 2004, expressed an unqualified opinion on those statements. We did not audit the financial statements of ACC Foundation, Inc. (a component unit of the College). Those financial statements were audited by other auditors, whose reports have been furnished to us; and our opinion on the basic financial statements insofar as it relates to the amounts included for ACC Foundation, Inc. is based on the report of other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the College as of August 31, 2005, and the results of its operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 25 to the financial statements, library books were previously categorized as non-depreciable assets as required by the Texas Higher Education Coordinating Board. This resulted in an understatement of previously reported depreciation expense and accumulated depreciation and an overstatement of capital assets as of August 31, 2004. Accordingly, the 2004 financial statements have been restated and an adjustment has been made to net assets as of September 1, 2003 to correct the error. As further discussed in Note 25, the financial statements for the year ended August 31, 2004 were restated for various reasons described in this paragraph. State appropriations were reclassified from operating to non-operating revenues. Cash and accrued liabilities have been adjusted to exclude outstanding checks held by various vendors. Additionally, net assets and deferred charges at August 31, 2004 were restated to properly account for revenues and expenses that were incorrectly reported.
In accordance with Government Auditing Standards, we have also issued our report dated November 11, 2005, on our consideration of the College's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules on pages 55 through 58, 87 and 96 are presented for purposes of additional analysis as required by the Texas Higher Education Coordinating Board, U.S. Office of Management and Budget Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations" and the State of Texas Single Audit Circular, respectively. These schedules are not required as part of the basic financial statements. The information in these schedules has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The Management’s Discussion and Analysis on pages 3 through 16 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. The statistical section on pages 59 through 82 have been furnished to us and were not subjected to the audit procedures applied in the audit of the financial statements. Accordingly, we do not express an opinion on the statistical sections.
Houston, Texas November 11, 2005
2
MANAGEMENT’S DISCUSSION AND ANALYSIS
THIS PAGE LEFT BLANK INTENTIONALLY.
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Financial Statement Analysis and Overview
The following discussion and analysis of Austin Community College District’s (the College) annual financial statements provides an overview of the College’s financial activities for the years ended August 31, 2005 (Fiscal Year 2005), 2004 (Fiscal Year 2004), and 2003 (Fiscal Year 2003), and identifies changes in its financial position for these years. In conformity with Government Accounting Standards Board (GASB) 34, the discussion focuses on currently known facts, decisions, and conditions that have an impact on the financial activities of the College and is intended to assist the reader in the interpretation of the financial statements. The financial statements should be read in conjunction with the notes to the basic financial statements. The financial statements are prepared in accordance with the GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments and Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for Public Colleges and Universities. Three primary statements are required: the Statement of Net Assets; the Statement of Revenues, Expenses, and Changes in Net Assets; and the Statement of Cash Flows. Financial statements for the College’s component unit, Austin Community College Foundation (Foundation); are issued independent of the College. The Foundation’s financial information for fiscal years 2005 and 2004 is shown on separate pages behind the College’s basic financial statements. Refer to Notes 1 and 24 in the Notes to Financial Statements for more detail on the Foundation. The following summary and management discussion and analysis of the results is intended to provide readers with an overview of the basic financial statements. Some of the financial highlights of FY 2005 are as follows: •
Assets of the College exceeded liabilities at the close of the fiscal year ending on August 31, 2005 by $58.9 million. Of this amount $4.1 million (unrestricted net assets) may be used to meet the College’s ongoing obligations.
•
At the end of the current Fiscal Year, total college revenues exceeded total expenses by $2.1 million, primarily as a result of improving interest rates.
•
Reliance on local tax revenue to fund College operations increased as the State of Texas’ reduction of State appropriations for the 2004-05 biennium for community colleges continued to have an impact.
Statement of Net Assets The Statement of Net Assets presents all of the College’s assets and liabilities, and change in net assets as of the end of the fiscal year. The statement is prepared under the accrual basis of accounting, in which revenues and assets are recognized when earned, and expenses and liabilities are recognized when incurred regardless of when cash is received or paid. The
3
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) difference between total assets and total liabilities – net assets – is one indicator of whether the overall financial condition has improved or deteriorated during the year when considered with other factors such as enrollment, contact hours of instruction, student retention and other nonfinancial information. Finally, the Statement of Net Assets is useful in determining the assets available to continue operations as well as how much the College owes to vendors, bondholders, and other entities at the end of the year. The Statement of Net Assets includes assets and liabilities, both current and non-current, and net assets. Current assets are those assets that are available to satisfy current liabilities, or liabilities that are due within one year. Non-current assets include capital assets, long-term investments, and other assets not classified as current. Non-current liabilities include bonds payable and other long-term commitments. Net Assets are divided into three major categories. The first category, “Invested in Capital Assets Net of Related Debt,” represents the College’s equity in property, plant and equipment owned by the institution. The next category is “Restricted Net Assets” which is further divided into two categories: Nonexpendable and Expendable. Expendable restricted net assets are available for expenditures but must be spent in accordance with the restrictions of donors and other external entities. The final category, “Unrestricted Net Assets,” are assets available to the institution for any lawful purpose of the College. Further detail regarding assets, liabilities, and net assets is presented in the Statement of Net Assets and notes to the financial statements. CONDENSED FINANCIAL INFORMATION Condensed Statement of Net Assets (millions) 2005 Assets Current assets Capital assets net of accumulated depreciation Other noncurrent assets Total assets
$
Current liabilities Noncurrent liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted: Expendable Unrestricted Total net assets
$
33.1 132.9
August 31 2004 $
2003
33.7 123.7
$
29.5 106.6
Increase/Decrease 2004 to 2005 $
(0.6) 9.2
Increase/Decrease 2003 to 2004 $
4.2 17.1
84.6 250.6
90.3 247.7
89.3 225.4
(5.7) 2.9
1.0 22.3
34.4 157.2 191.6
33.1 157.7 190.8
33.1 135.0 168.1
1.3 (0.5) 0.8
-022.7 22.7
49.9 4.9 4.1 58.9
48.2 4.9 3.7 56.8
48.1 4.8 4.4 57.3
1.7 -00.4 2.1
0.1 0.1 (0.7) (0.3)
$
$
$
$
Total Assets increased by $2.9 million. The majority of the increase was due to the addition of capital assets in the amount of $9.2 million, which consisted of the completion of phase II construction of the Health Science expansion project as well as the ongoing construction of the South Austin and Cypress Creek campuses. The capital assets were offset by a reduction in bond monies used for the aforementioned construction. Since 2003, the College has increased its overall total assets before considering liabilities by $25.2 million – which represents the
4
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) amount paid for construction since the College issued general obligation bonds in the amount of $99 million: $24 million in 2004 and $75 million in 2003. Total liabilities increased by $0.8 million. The major change in liabilities was a result of accounts payable increasing by $1.9 million at year end which is attributable to timing differences relative to invoice receipts in addition to decreases in other current liabilities of $0.5 million and a $0.6 million decrease in noncurrent liabilities in the noncurrent portion of notes and bonds payable. In FY 2004, accounts payable declined by $0.3 million to $3.3 million from $3.6 million in FY 2003. Deferred revenues increased by $0.4 million in the current year, and by $1.7 million, from $18 million to $19.7 million for fiscal years 2004 and 2003 respectively. The increases are attributable to Fall 2005 tuition increases. The College’s net assets (assets less liabilities) increased by $2.1 million from the previous year. Specifically, net assets were $58.9 million in 2005, $56.8 million in 2004 and $57.3 million in 2003. The increase in net assets is a result of revenues earned exceeding expenses incurred. We attribute the increase to the fact that investment income performed better than anticipated resulting in a $1.6 million increase in addition to a $.5 million increase in other nonoperating revenues. Compared to the two previous years, the College performed better in 2005. In 2004 net assets decreased by $0.4 million and by $5.9 million in 2003. A more detailed discussion follows the Statement of Revenues, Expenses, and Changes in Net Assets. Net assets for fiscal years 2004 and 2003 were restated primarily as a result of the College’s adoption in 2005 of GASB’s requirement to depreciate library books. Specifically, net assets in 2004 were restated from $58.6 million to $56.9 million, a decrease of $1.7 million which represents the cumulative depreciation amount for the library books as well as other minor adjustments for timing differences of scholarship payments. See Note 25 in the basic financial statements for additional information. Statement of Revenues, Expenses, and Changes in Net Assets The Statement of Revenues, Expenses and Changes in Net Assets presents the College’s overall results of operations. The statement is divided into Operating Revenues and Expenses and Non-Operating Revenues and Expenses. The College is primarily dependent upon three sources of revenue: state appropriations; tuition and fees; and property taxes. Since state appropriations and property taxes are classified as Non-operating Revenues (per the GASB requirement), Texas community colleges will generally display an operating deficit before taking into account other support. Therefore, total revenues and total expenses should be considered in assessing the change in the College’s financial position. Prior to fiscal year 2005, state appropriations had been classified as operating revenues in accordance with the Texas Higher Education Coordinating Board (THECB) requirements but THECB changed the classification requirement in FY 2005 to be compliant with GASB standard No. 35. Accordingly, state appropriations in fiscal years 2004 and 2003 have been restated as Non-operating Revenues for comparative purposes. Further detail is presented in the Statement of Revenues, Expenses, and Changes in Net assets and in the notes to the financial statements.
5
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Condensed Statement of Revenues, Expenses and Changes in Net Assets (millions)
2005 Operating revenues (see detail below) Tuition and Fees Grants and Contracts Auxiliary Enterprises Other Operating Revenues Total Operating Revenues
$ 38.0 22.1 1.5 3.1 64.7
Operating Expenses (see detail below) Operating Loss Non-Operating Revenues (expenses): State Appropriations Ad valorem Taxes Investment Income Interest on Capital-Related Debt Non-Operating Expense Total Non-Operating Revenues/(Expense)
$
Income before Other Revenues, (Expenses), Gains or Losses Other Revenues, Gifts Increase (Decrease) in Net Assets Net Assets Net assets, beginning of year (2) Net assets, end of year (3)
$
Fiscal Year 2004
Increase/Decrease 2004 to 2005
Increase/Decrease 2003 to 2004
$
$
35.9 19.9 1.2 2.4 59.4
$ 32.8 17.8 1.2 2.8 54.6
146.0
134.4
127.8
11.6
6.6
(81.3)
(75.0)
(73.2)
(6.3)
(1.8)
43.9 44.1 2.7 (7.2) (0.3) 83.2
$
2003
$
43.5 37.1 1.1 (6.5) (0.7) 74.5
$
45.4 24.8 0.6 (3.2) (0.4) 67.2
$
2.1 2.2 0.3 0.6 5.2
3.1 2.1 -0(0.4) 4.8
0.4 7.0 1.6 (0.7) 0.4 8.7
(1.9) 12.3 0.5 (3.3) (0.3) 7.3
1.9
(0.5)
(6.0)
2.4
5.5
0.2
0.1
0.1
0.1
- 0-
2.1
(0.4)
(5.9)
2.5
5.5
(0.4) 2.1
(5.9) (0.5)
56.8 58.9
$
57.3 56.8
$
63.2 57.3
$
Key Factors impacting total revenues: •
State appropriations increased slightly to $43.9 million in fiscal year 2005 from $43.5 million in 2004 partially as a result of a reallocation of employee insurance. State appropriations had decreased in fiscal year 2004 to $43.5 million from $45.4 million in 2003 as a result of the state funding reduction for educational and general expenses that began in mid 2003 with a 7% cut that resulted in a $2.1 million decrease in 2003 from the 2002 funding levels. State appropriations accounted for 28.2% of total revenue in FY 2005, compared to 30.8% of total revenue in FY 2004, and 36.1% in FY 2003.
•
Tuition and fees were up $2.1 million primarily as a result of tuition increases of $5.00 per hour for in-district students, and an $8.00 per hour increase for both out-of-district and out-of-state students. Enrollment increased by 1.2% in FY 2005 which also impacted the increase realized in tuition and fees. In addition, a building fee of $13 per credit hour was in effect for FY 2005 as it was for FY 2004. Prior to 2004, the building fee was $12 per credit hour but subsequently had been increased by $1.00 in part to cover debt service. Tuition and Fees accounted for 24.4% of total revenue in the current year, compared to 25.4% in FY 2004 and 26.1% in 2003.
6
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) •
Grants and Contracts revenue increased primarily as a result of increased funding for Pell and other federal programs.
•
Other Operating Revenue, which includes miscellaneous fees, property rental, unit revenue, testing fees, and continuing education programs, totaled $3.0 million in 2005, $2.4 million in 2004, and $2.8 million in 2003. The increase in 2005 was a result of an increase in continuing education program revenue of $0.6 million. In 2004, revenues in this category decreased by $0.4 million as a result of reclassifying parking fees to the Tuition and Fee category. Previous years decline in other operating revenues included $0.4 million for a school district distant learning program, which was accounted for as a locally restricted program in FY 2003 rather than as an externally designated program (or other operating revenue) in previous years.
•
Property taxes, which are categorized as non-operating revenues, increased by $ 7.0 million in 2005 compared with a $ 12.3 million increase in 2004 from 2003. Specifically, the College recognized $ 44.1 million of property tax revenue in 2005, $ 37.1 million in 2004, and $ 24.8 million in FY 2003. Property taxes were increased in FY 2005 as a consequence of the May 2003 special election in which the voters approved a resolution to increase the tax cap from $0.05 to $0.09 cents per one hundred dollars valuation of taxable property by FY 2006. Property taxes in FY 2005 were 28.3% of total revenues compared to 26.3% of total revenues in FY 2004 and 19.8% of total revenues in FY 2003 respectively. See graphical illustration below.
7
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Total Revenue by Source (in millions)
2.9 1.2
1.5
160.0
1.2 22.1
140.0
3.1
0.7
2.4 1.2
19.9 120.0
17.8
38.0
32.8
In Millions
2.8
Auxiliary Enterprises Other Operating Rev
35.9
100.0
Investment Income
Grants & Contracts
80.0 44.1
Net Tution & Fees
37.1
24.8
60.0
Ad Valorem Taxes 40.0 43.9
43.5
45.4
FY 2005
FY 2004
FY 2003
State Appropriations
20.0
0.0
Recap of Revenue Sources from Condensed Statement of Revenues, Expenses, and Changes in Net Assets Fiscal Year Revenue Source
2005
State Appropriations Ad Valorem Taxes Net Tuition & Fees Grants & Contracts Other Operating Revenues Auxiliary Enterprises Investment & Other Income Total Revenue
$
2004
43.9 44.1 38.0 22.1 3.1 1.5 2.9 $ 155.6
$
43.5 37.1 35.9 19.9 2.4 1.2 1.2 $ 141.2
8
2003 $
45.4 24.8 32.8 17.8 2.8 1.2 0.7 $ 125.5
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Operating expenses can be displayed either by natural or functional classification (see Schedule -B for detail on the relationship between the two classifications): Operating Expenses Natural Classification (in millions) Fiscal Year 2005 Salaries Benefits Scholarships Supplies and services Depreciation Total operating expenses
$
$
92.1 13.8 11.3 22.5 6.4 146.1
2004 $
$
2003
85.0 12.8 9.5 20.5 6.6 134.4
$
80.0 12.6 8.2 19.3 7.7 $ 127.8
Increase/Decrease
Increase/Decrease
2004 to 2005
2003 to 2004
$
$
$
7.1 1.0 1.8 2.0 (0.2) 11.7
$
5.0 0.2 1.3 1.2 (1.1) 6.6
160.00 6.40 140.00 120.00 100.00 In Millions
6.60
22.50
20.50 11.30
7.70 19.30
9.50
13.80
12.80
8.20
Depreciation
12.60
Supplies & Services Scholarships
80.00
Benefits Salaries
60.00 92.10
85.00
40.00
80.00
20.00 0.00 FY 2005
FY 2004
9
FY 2003
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Factors impacting operating expenses by natural classification include the following: •
Fiscal restraints were relaxed in fiscal years 2005 and 2004 compared to FY 2003 wherein budget reductions had been implemented due to mid-year state appropriation reductions.
•
Salary expense in FY 2005 increased by $7.1 million, an 8.3% increase over 2004. The increase was a result of employee salary increases of approximately $5 million as well as $1.5 million filling new or vacant employee positions, and $.6 million in faculty overloads and adjunct salaries due to a 1% growth in course offerings. Of the newly created positions, 16 were added to staff the College’s new Health Science Center Phase II, while 20 positions were added college-wide mostly to fill vacant facility and maintenance positions. In 2004 salaries had increased by $5.0 million, $3.9 million due to employee salary increases in addition to filling more than 40 vacant positions costing approximately $1.1 million pursuant to the lifting of a two-year hiring freeze. In FY2003 the College continued a hiring freeze which began in FY 2002 and resulted in a 9.6% position vacancy rate.
•
Utility costs increased by $0.3 million or 10.6% over the previous year due to the addition of the Health Science Center Phase II which became operational summer 2005 as well as general increases in energy costs. In 2004, the Health Science Center I building was opened for the entire fiscal year which also resulted in an increase. In FY 2003, the College had realized savings from retrofitting energy equipment per a contractual agreement with Honeywell. Although the College will continue to save energy costs as a result of the retrofitting project, utility costs are expected to rise as buildings are added.
•
Other operating expenses increased by $1.8 million in FY 2005 compared to an increase of $0.7 million in FY 2004 over FY 2003 levels as positions were added and fiscal restraints were relaxed from previous year expense levels.
•
Depreciation expense decreased by $0.2 million from $6.6 million in FY 2004 to $6.4 million in FY 2005. The decrease in 2005 compared to FY 2004 and FY 2003 is primarily a result of depreciation expense being restated for the years ending 2004 and 2003 as discussed above in the Net Asset section. As the College continues to add buildings and equipment, associated depreciation expense is expected to increase.
•
Scholarship costs were increased in FY 2005 due to an increase in Pell grant awards of $0.9 million. Pell grant awards had increased by $1.4 million in FY 2004 over FY 2003. Total scholarship costs for FY 2005 were $11.3 million compared to $9.5 million in FY 2004 and $8.2 million in FY 2003. The College restated its scholarship costs in FY 2004 resulting in a decrease of $0.4 million. The restatement was due to timing differences between recording costs vs. incurring costs in the fiscal year. Scholarship allowances and discounts remained relatively stable in FY 2005 and only increased by slightly less than $0.7 million over FY 2004. In FY 2004 allowances and discounts had increased by $0.5 million over FY 2003. The largest increase was evident in FY 2003 when allowances and discounts increased by $2.2 million to $7.3 million.
10
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Operating Expenses Functional Classification (in millions) Fiscal Year
Increase/Decrease
Increase/Decrease
2004 to 2005
2003 to 2004
2005
2004
2003
$ 66.2 3.1 12.1 13.3 21.1
$ 62.8 3.2 9.2 12.1 20.1
$ 59.0 2.8 9.7 11.4 18.6
$3.4 (0.1) 2.9 1.2 1.0
3.8 0.4 (0.5) 0.7 1.5
11.1 11.3 138.2
9.6 9.5 126.5
9.3 8.2 119.0
1.5 1.8 11.7
0.3 1.3 7.5
Auxiliary enterprises
1.5
1.3
1.1
0.2
0.2
Depreciation Expense
6.4
6.6
7.7
(0.2)
(1.1)
$146.1
$134.4
$127.8
Educational and General Instruction Public service Academic support Student services Institutional support Physical Plant Operation and Maintenance Scholarships Total educational and general
Total Operating Expenses
$11.7
6.6
Operating Expenses – Functional Classification (in millions) 70.0
66.2 62.8
60.0
59.0
FY 2005
FY 2004
FY 2003
50.0
40.0
30.0
21.1
20.1 18.6
20.0 13.3
12.1
12.1 11.4
11.1
9.2 9.7
10.0
9.6
9.3
11.3
7.7
9.5 8.2 6.4
3.1 3.2
2.8
6.6
1.5 1.3 1.1
Instruction
Public Services
Academic Support
Student Services
Instit ut ional Support
11
Physical Plant
Scholarships
Auxiliary
Depreciation
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Factors impacting operating expenses by functional classification include the following: •
Academic Support, Physical Plant Operation and Maintenance, Scholarships and Fellowship, and Auxiliary expenses all experienced significant increases in FY 2005 as compared to FY 2004 and FY 2003. Specifically, the largest percentage increase occurred in Academic Support which increased 32.1% in FY 2005 over FY 2004. The increase is attributable to learning and testing lab expenses being accounted for as a support function in FY 2005 vs. an instructional expense as was the practice in FY 2004 and FY 2003 respectively. Almost $1.8 million additional expense was charged to Academic Support in FY 2005. If the College had not made this classification change, expenses for Academic Support would have increased approximately 12.4% in FY 2005 over FY 2004.
•
Operation and Maintenance spending increased by 15.4% due to the addition of 16 new positions. Auxiliary expenses increased by 11.1% also due to the addition of new positions. Of the total expenses for all functional categories, salary increases accounted for nearly 68% of the $11.7 million increase vs. 59% of the total expenses in FY 2004. As mentioned earlier, a two year hiring freeze was lifted in FY 2004 resulting in approximately 40+ vacant positions being filled. In FY 2004 Operation and Maintenance increased by 3.5% and Auxiliary increased by 23.4% over FY 2003 totals.
•
Instruction increased by 5.4% in FY 2005 over FY 2004 totals. As mentioned above, learning and testing lab expenses were classified as Academic Support in FY 2005 vs. Instruction expenses. In FY 2004, Instruction increased by 6.4% over FY 2003 totals.
•
Scholarships: see Operating Expenses by Natural Classification for a detailed explanation of the variances.
CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The College had $132.9 million, $123.7 million, and $106.6 million invested in capital assets at August 31, 2005, 2004, and 2003 net of accumulated depreciation of $45.0 million, $44.3 million and $44.3 million for fiscal years 2005, 2004, and 2003 respectively. Depreciation charges totaled $6.4 million, $6.6 million and $7.7 for fiscal years 2005, 2004, and 2003. Details of these assets for fiscal years 2005, 2004, and 2003 are shown below.
12
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
1.2 1.1
140.0 13.1
1.1
11.4
120.0
3.9
13.1
100.0
80.0
94.4
87.6 Library Materials
60.0
Furniture & Equipment
71.3
Leasehold Improvements 40.0
Buildings/Works in Progress Land & Improvements
20.0
24.2
23.5
17.2
0.0 FY 2005
FY 2004
FY 2003
Capital Assets, Net, at Year End (in millions) August 31 Land and Improvements Buildings and work in progress
2005
2004
2003
$ 24.2
$ 23.5
$ 17.2
94.4
87.6
71.3
Increase/Decrease
Increase/Decrease
2004 to 2005
2003 to 2004
$
$
0.7 6.8
6.3 16.3
Leasehold Improvements
-
-
3.9
-
(3.9)
Furniture and Equipment
13.1
11.4
13.1
1.7
(1.7)
Library materials Total capital assets
1.2
1.1
1.1
$ 132.9
$ 123.6
$ 106.6
$
0.1
-
9.3
$ 17.0
Capital Asset and Debt Administration Changes in net capital assets are the result of acquisitions, improvements, deletions, and changes in accumulated depreciation. Effective FY 2005, the College in accordance with generally accepted accounting principles restated its net assets to reflect depreciation of its library books. The effect of this change and recording accumulated depreciation resulted in a decrease in FY 2004 of $2.1 million in net capital assets. See Notes 2 and 25 of the basic financial statements for further detail.
13
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Major capital additions completed and/or in progress during FY 2005 included (in millions): • • • • • • • •
$ $ $ $ $ $ $ $
Health Science Phase I Health Science Phase II South Austin Campus Eastview Parking Cypress Expansion Northridge Parking District wide renovations Rio Grande Renovation
0.2 1.9 4.0 1.2 1.6 0.5 0.3 0.2
These projects were funded by general obligation bonds issued in 2004 and 2003 with the exception of the Health Science Phase I building which was funded by revenue bonds. As of August 31, 2005 the College had in process the construction of its new South Austin campus ($5.7 million), the expansion project at its Cypress Creek campus ($1.6 million), Rio Grande renovations ($0.3 million), and other district wide renovation projects ($.2 million). During FY 2005 the College completed its Health Science Center Phase II for a total of $14.0 million, $1.9 million of which was spent in FY 2005. Additionally, the College completed the expansion of its Eastview campus parking lot, and renovation of its Northridge parking lot. The general obligation bonds funded phase II of the Health Science building the construction of which was begun in FY 2004 and was completed during the summer of this fiscal year. Additionally, the bonds will fund the construction of the South Austin campus, expansion of Cypress Creek, and various other projects/improvements as determined by College Administration and the Board of Trustees. In accordance with GASB Statements No. 34 and 35, the College does not record the cost of its capital assets as an expense at the time of acquisition/completion of the asset, but rather shows the expense systematically over the expected life of the asset as depreciation expense. The amount shown in the accounting records for the value of the asset will decrease each year until the asset is fully depreciated or removed from service. As a result, the amount of capital assets shown in the Statement of Net Assets may decrease from one year to another even though new assets have been acquired during the year. Capital assets subject to depreciation include improvements to land (such as parking lots and signage), buildings, furniture and other equipment, and library books. Land is not depreciated. Debt At August 31, 2005 the College had approximately $154.8 million in outstanding debt, resulting in a decrease of $1.6 million from the previous year. In FY 2004 the College had $156.4 million in outstanding debt – an increase of $21.9 million over FY 2003. Debt outstanding at fiscal year end FY 2003 was $134.5 million. The table below summarizes these amounts by type of debt instrument.
14
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) Outstanding Debt at Year End (in millions) August 31 Revenue Bonds General Obligation Bonds Capital Leases Notes Payable Total Outstanding Debt
Increase/Decrease
2004
2004
2003
$ 52.0 98.4 0.6 3.7 $ 154.7
$ 52.3 98.9 1.3 3.9 $ 156.4
$ 53.8 75.0 1.5 4.2 $ 134.5
Increase/Decrease
2004 to 2005
2003 to 2004
$ (0 .3) (0.5) (0.7) (0.2) $ (1.7)
$ (1.5) 23.9 (0.2) (0.3) $ 21.9
The College’s revenue bonds are special obligations of the College that are payable solely from and will be equally and ratably secured by an irrevocable first lien on pledged revenues. The pledged revenues include, but are not limited to: general fee; pledged tuition, and investment income derived from any and all funds of the College. Capital lease obligations are paid from operating funds of the departments for which the equipment is provided. Notes payable will be paid from operating funds and will be offset by energy savings. In April, 2005 the College issued revenue bonds in the amount of $25.2 million which effectively defeased $24.9 million of older debt. In July 2004, and July 2003, the College issued $23.9 million and $75.0 million in general obligation bonds respectively. The bonds are direct obligations payable from ad valorem taxes levied, within the limitations prescribed by law, against all property located within the district. The bonds were issued to fund the construction, renovation and equipment of college buildings district-wide. The decrease in total debt of $1.7 million is the result of : 1) debt repayments of $2.0 million, 2) issuance of $25.2 million of revenue bonds less refunded bonds of $24.9 million, for a net increase of $0.3 million. The College’s bond ratings assigned by Moody’s Investors Service and Standard and Poor’s Rating Services are “Aaa” and “AAA” respectively. More detailed information about the College’s long-term liabilities is presented in Notes 7, 8, and 9 of the basic financial statements. Economic Factors That Will Affect the Future The economic position of the College is influenced in part by the economic position of the State of Texas, and Travis and Williamson counties. Educational and general state appropriations are expected to be $37.1 million for fiscal year FY 2006, in accordance with the funding awarded in FY 2005. This is an increase from FY 2004 of $1.3 million or 3.8%. In May 2003, the voters of the College’s district approved a tax referendum to increase the ad valorem tax rate for maintenance and operations from $0.05 to $0.09 per one hundred dollars valuation of taxable property by FY 2006, and authorized the issuance of $99 million in general obligation tax bonds. As a result of the referendum, the tax rate was increased in FY 2005 to $.09 from $.0771 in FY 2004. In FY 2005 eight cents ($0.08) was used for maintenance and operations, while one cent ($0.01) was levied for the purpose of debt service on the general obligation bonds issued in 2003 and 2004. In FY 2004, the college increased the tax rate to $0.0771 from $0.05 in FY 2003. Seven cents ($0.07) of the increase was levied for operations and maintenance of the College, and $0.0071 was levied for debt service. Tax revenues in FY 2006 are projected to increase by $9.4 million or 21.3% to $53.5 million from $44.1 million in FY 2005, $37.1 million in
15
AUSTIN COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FY 2004, and $24.8 million in FY 2003. The increase in FY 2006 property tax revenues is due to an increase in the M&O tax rate from $0.08 to $0.09 ($5.2 million), the May 2004 passage of the Del Valle Independent School District annexation ($2.0 million), and taxable valuation growth of 5.5% ($2.2 million). Furthermore, in May 2005, the voters of the College’s district approved the annexation of the portions of the City of Austin not already in the district. Property tax revenues associated with the annexation will be collected beginning January 2007, and are expected to increase tax revenues by approximately $7.0 million. Tuition and fee revenue for FY 2006 is projected to increase to approximately $39 million or by 2.5% more than was realized in FY 2005. Although the College expects enrollment to slightly increase in FY 2006, the projected increase is due in part to the fact that the College increased both its out of district and out of state tuition rates by $5 per credit hour. The out of district and out of state rates were increased to $102 and $189 per credit hour respectively. The projected increases in revenue will be necessary to fund new or increased expenses in instructional and support functions, and employee benefits which were formerly funded by the state. The College will face a growing challenge in the future to fund anticipated increases in benefits if more state reductions are realized.
16
BASIC FINANCIAL STATEMENTS
THIS PAGE LEFT BLANK INTENTIONALLY
Exhibit 1 AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Statements of Net Assets August 31, 2005 and 2004 ASSETS Current Assets: Cash and Cash Equivalents Accounts Receivable (Net) (See Note 15) Deferred Charges Notes Receivable Total Current Assets
Restated 2004
2005 $
Noncurrent Assets: Restricted Cash and Cash Equivalents Restricted Short-Term Investments Restricted Long Term Investments Other Assets Notes Receivable Deferred Charges Capital Assets (Net) (See Note 6) Total Noncurrent Assets Total Assets LIABILITIES Current Liabilities: Bank Overdraft Accounts Payable Accrued Liabilities Accrued Compensable Absences - Current Portion Funds Held for Others Unearned Revenues Other Liabilities - Current Portion Long-Term Debt - Current Portion Bonds Payable - Current Portion Total Current Liabilities Noncurrent Liabilities: Accrued Compensable Absences Other Liabilities Long-Term Debt Bonds Payable Total Noncurrent Liabilities Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for: Expendable Scholarships Departmental Activities Loans Debt Service Unrestricted Total Net Assets (Schedule D)
$
22,646,971 9,867,801 536,622 5,979 33,057,373
$
39,761,916 29,459,929 10,212,072 1,358,016 51,211 3,713,215 132,945,138 217,501,497
87,058,629 1,235,412 48,716 1,942,197 123,657,297 213,942,251
250,558,870
247,638,766
5,195,307 4,114,665 2,055,558 400,595 20,128,464 281,435 683,436 1,560,000 34,419,460
1,551,631 3,339,002 4,088,039 1,839,484 326,851 19,730,799 184,021 916,173 1,105,000 33,081,000
889,580 3,744,751 3,644,581 148,889,516 157,168,428
892,284 2,406,155 4,328,017 150,074,516 157,700,972
191,587,888
190,781,972
49,901,716
48,198,739
212,702 158,369 75,918 4,500,000 4,122,277 58,970,982
282,184 147,927 70,778 4,500,000 3,657,167 56,856,794
$
The accompanying notes are an integral part of the financial statements.
17
25,188,431 8,154,560 343,989 9,535 33,696,515
Exhibit 1A AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Statements of Financial Position of ACC Foundation (A Component Unit of Austin Community College District) May 31, 2005 and 2004
2005 ASSETS Cash and Cash Equivalents Investments (Note 4) Interest and Dividends Receivable Promise to Give Receivable Total Assets
2004
$
233,388 822,389 1,815 70,815
$
85,462 752,081 1,379 4,600
$
1,128,407
$
843,522
LIABILITIES AND NET ASSETS Liabilities
$
Net assets Unrestricted Temporarily Restricted Permanently Restricted Total Net Assets
-
$
62,293 163,668 902,446 1,128,407
Total Liabilities and Net Assets
$
1,128,407
31,481 176,516 635,525 843,522 $
The accompanying notes are an integral part of the financial statements.
18
-
843,522
Exhibit 2 AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Statements of Revenues, Expenses and Changes in Net Assets Years Ended August 31, 2005 and August 31, 2004 OPERATING REVENUES
Restated 2004
2005
Tuition and Fees (Net of Discounts of $8,470,563 and $7,782,737, Respectively) Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Non-Governmental Grants and Contracts Sales and Services of Educational Activities Auxiliary Enterprises (Net of Discounts) General Operating Revenues Total Operating Revenues (Schedule A)
$
38,038,633
$
35,902,537
17,782,704 2,106,340 1,190,914 1,013,672 1,357,879 1,534,532 1,660,669 64,685,343
15,725,085 1,436,864 1,592,272 1,157,771 747,264 1,237,605 1,658,770 59,458,168
66,172,824 3,103,172 12,117,936 13,294,407 21,047,616 11,115,342 11,326,872 1,501,800 6,374,654 146,054,623
62,765,078 3,203,128 9,175,791 12,109,713 20,091,214 9,629,279 9,509,617 1,351,379 6,622,976 134,458,175
(81,369,280)
(75,000,007)
NON-OPERATING REVENUES (EXPENSES) State Appropriations Maintenance Ad Valorem Taxes Gifts Investment Income Interest on Capital Related Debt Loss on Disposal of Fixed Assets Other Non-Operating Revenues Other Non-Operating Expenses
43,938,157 44,093,830 191,608 2,713,479 (7,176,212) (278,526) 1,132 -
43,523,089 37,138,260 76,364 1,099,650 (6,537,884) (688,874) (29,423)
Net Non-Operating Revenues (Schedule C)
83,483,468
74,581,182
OPERATING EXPENSES Instruction Public Service Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships Auxiliary Enterprises Depreciation Total Operating Expenses (Schedule B) Operating Loss
Increase (Decrease) in Net Assets
2,114,188
NET ASSETS Net Assets, Beginning of Year Net Assets, End of Year
$
56,856,794 58,970,982
(418,825)
$
The accompanying notes are an integral part of the financial statements.
19
57,275,619 56,856,794
Exhibit 2A AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Statements of Activities of ACC Foundation (A Component Unit of Austin Community College District) Years Ended May 31, 2005 and 2004
2005 Changes in Unrestricted Net Assets: Revenues: Contributions Interest and Dividend Income Realized and Unrealized Gains
$
27,375 5,617 4,891
2004
$
34,222 4,906 16,721
37,883
55,849
259,428
337,031
297,311
392,880
260,429 6,070
337,876 6,521
Total Expenses
266,499
344,397
Increase in Unrestricted Net Assets
30,812
48,483
206,583 21,389 18,608 (259,428)
189,330 18,391 11,609 (91,243) (337,031)
(12,848)
(208,944)
266,921
12,027
266,921
12,027
284,885
(148,434)
Total Unrestricted Revenues Net Assets Released from Restrictions Total Unrestricted Revenues Expenses: Program Services General and Administrative
Changes in Temporarily Restricted Net Assets: Contributions Interest and Dividend Income Realized and Unrealized Gains Bad Debt Net Assets Released from Restrictions Decrease in Temporarily Restricted Net Assets Changes in Permanently Restricted Net Assets: Contributions Increase in Permanently Restricted Net Assets Change in Net Assets Net Assets, Beginning of Year Net Assets, End of Year
$
843,522 1,128,407
The accompanying notes are an integral part of the financial statements.
20
$
991,956 843,522
Exhibit 3 AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Statements of Cash Flows Years Ended August 31, 2005 and 2004 Restated 2004
2005 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from Students and Other Customers Receipts from Grants and Contracts Collection of Loans to Students Other Receipts Payments to or on Behalf of Employees Payments to Suppliers for Goods and Services Payments for Scholarships and Fellowships Net Cash Used in Operating Activities
$
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: Receipts from Ad Valorem Taxes Receipts from State Appropriations (Payments of) Receipts from Bank Overdraft Receipts from Student Organizations and Other Agency Transactions Net Cash Provided by Noncapital Financing Activities
38,318,739 20,569,401 1,061 4,480,779 (96,755,668) (20,641,948) (11,471,397) (65,499,033)
$
36,305,324 20,335,327 (30,697) 4,084,070 (90,608,097) (20,788,099) (11,441,141) (62,143,313)
43,993,079 35,710,369 (1,551,631)
36,997,019 35,736,170 1,551,631
69,192 78,221,009
173,446 74,458,266
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Proceeds on Issuance of Capital Debt Other Financing Source - Refunding Bonds Proceeds from the Sale of Capital Assets Payments to Refund Bond Escrow Agent Other Payments Associated with Issuance of Capital Debt Purchases of Capital Assets Payments on Capital Debt and Leases - Principal Payments on Capital Debt - Interest Net cash Used in Capital and Related Financing Activities
25,255,000 103,806 (24,880,000) (261,072) (16,189,986) (2,335,645) (7,106,704) (25,414,601)
23,910,000 31,124 (112,675) (20,902,019) (2,556,037) (6,537,884) (6,167,491)
CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from Sales and Maturities of Investments Interest on Investments Purchase of Investments Net cash Provided by Investing Activities
2,488,149 (39,633,697) (37,145,548)
1,099,650 1,099,650
(Decrease) Increase in Cash and Cash Equivalents
(49,838,173)
7,247,112
Cash and Cash Equivalents, Beginning of Year
112,247,060
Cash and Cash Equivalents, End of Year
$
62,408,887
104,999,948 $
The accompanying notes are an integral part of the financial statements.
21
112,247,060
Exhibit 3 AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Statements of Cash Flows Years Ended August 31, 2005 and 2004 (continued) Restated 2004
2005 RECONCILIATION OF NET OPERATING LOSS TO NET CASH USED IN OPERATING ACTIVITIES: Operating Loss Adjustments to reconcile net loss to net cash used in operating activities: State On-behalf Payments Depreciation Expense Other Non-cash Adjustments Changes in Assets and Liabilities: Receivables (Net) Other Assets Deferred Charges Accounts Payable Accrued Liabilities Compensated Absences Loans to Students Unearned Revenue
$
Net Cash Used in Operating Activities
$
(81,369,280)
$
8,227,788 6,374,654 76,842
7,786,918 6,622,976 60,012
(1,425,464) (122,604) (192,633) 1,858,379 556,188 213,371 1,061 302,665
(14,953) (74,792) (343,989) (339,762) (2,678,044) 214,107 (1,275) 1,625,496
(65,499,033)
$
The accompanying notes are an integral part of the financial statements.
22
(75,000,007)
(62,143,313)
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
1.
REPORTING ENTITY
The Austin Community College (the “College”) was established in 1973, in accordance with the laws of the State of Texas, to serve the educational needs of Austin and the surrounding communities. The College is considered to be a special purpose, primary government according to the definition in Governmental Accounting Standards Board (GASB) Statement 14, The Financial Reporting Entity. While the College receives funding from local, state, and federal sources, and must comply with the spending, reporting, and record keeping requirements of these entities, it is not a component unit of any other governmental entity. The College is a comprehensive, public, two-year institution offering academic, general, occupational, developmental, and continuing adult education programs through a network of campuses. The College is governed by a nine-member Board of Trustees (the “Board”), which has governance responsibilities over all activities related to the College. GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, an amendment of GASB Statement No. 14, provides additional guidance in determining whether certain organizations for which the College is not financially accountable should be reported as component units based on the nature and significance of their relationship with the primary government. It requires reporting as a component unit if the organization raises and holds economic resources for the direct benefit of the governmental unit and the component unit is significant compared to the primary government. GASB Statement No. 39 has been applied as required in the preparation of these financial statements and the component unit discussed in Note 24 is included with the College because of the significance of its operational and financial relationships with the College.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Guidelines The significant accounting policies followed by the College in preparing these financial statements are in accordance with accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board (GASB). Additionally, the College complies with Texas Higher Education Coordinating Board’s Annual Financial Reporting Requirements for Texas Public Community and Junior Colleges. The College applies all applicable GASB pronouncements and all applicable Financial Accounting Standard Board (FASB) statements and interpretations issued on or before November 30, 1989, unless they conflict or contradict GASB pronouncements. The College has elected not to apply FASB guidance issued subsequent to November 30, 1989, unless specifically adopted by the GASB. The College is reported as a special-purpose government engaged in business-type activities.
23
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Tuition Discounting Texas Public Education Grants: Certain tuition amounts are required to be set aside for use as scholarships by qualifying students. This set aside, called the Texas Public Education Grant (TPEG), is shown with tuition and fee revenue amounts as a separate set aside amount (Texas Education Code § 56.033). When the award is used by the student for tuition and fees, the amount is recorded as tuition discount. If the amount is disbursed directly to the student, the amount is recorded as a scholarship expense. Title IV, Higher Education Act Program Funds: Certain Title IV HEA Program funds are received by the College to pass through to the student. These funds are initially received by the College and recorded as revenue. When the award is used by the student for tuition and fees, the amount is recorded as tuition discount. If the amount is disbursed directly to the student, the amount is recorded as a scholarship expense. Other Tuition Discounts: The College awards tuition and fee scholarships from institutional funds to students who qualify. When these amounts are used for tuition and fees, the amount is recorded as a tuition discount. If the amount is disbursed directly to the student, the amount is recorded as a scholarship expense. Basis of Accounting The financial statements of the College have been prepared on the accrual basis whereby all revenues are recorded when earned and all expenses are recorded when they have been reduced to a legal or contractual obligation to pay. Budgetary Data Each community college in Texas is required by law to prepare an annual operating budget of anticipated revenues and expenditures for the fiscal year beginning September 1. The College’s Board of Trustees adopts the budget, which is prepared on the accrual basis of accounting. A copy of the approved budget and subsequent amendment must be filed with the Texas Higher Education Coordinating Board, Legislative Budget Board, Legislative Reference Library, and Governor’s Office of Budget and Planning by December 1. Cash and Cash Equivalents The College’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with maturities of three months or less from the fiscal year end. Cash and cash equivalents that are externally restricted as to their use are classified as noncurrent assets in the Statement of Net Assets. Board policy requires the College to maintain a minimum unrestricted, unallocated cash level of 8% of budgeted total annual expenses plus
24
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 total accounts payable. The College was in compliance with this policy as of August 31, 2005 and 2004. Investments In accordance with GASB 31, Accounting and Financial Reporting for Certain Investments and External Investment Pools, investments are reported at fair value. Fair values are based on published market rates. Short-term investments have an original maturity date greater than three months but less than one year at time of purchase. Long-term investments have an original maturity of greater than one year at the time of purchase. Capital Assets Capital assets are recorded at cost at the date of acquisition, or fair value at the date of donation. Equipment with an estimated useful life less than one year are not capitalized. Renovations to buildings and infrastructure and land improvements that significantly increase the value or extend the useful life of the structure are capitalized. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the useful life of the asset are charged to operating expense in the year in which the expense is incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The following represents the capitalization threshold and useful lives for the capital asset types:
Capital Asset Type Buildings Facility and Land Improvements Library Books Furniture, Machinery, Vehicles and Other Equipement Telecommunciations and Peripheral Equipment Leasehold Improvements
Capitalization Threshold $ 100,000 100,000 N/A 500 500 100,000
Estimated Useful Life 50 Years 20 Years 15 Years 10 Years 5 Years Lease Tenure
Collections The College has no collections that meet the requirements for capitalization. The College has no other collections for which the College applies policies to (a) maintain them for public exhibition, education, or research; (b) protect, keep unencumbered, care for, and preserve them; and (c) require proceeds from their sale to be used to acquire other collection items are applied. Generally accepted accounting principles permit collections maintained in this manner to be charged to operations at time of purchase rather than capitalized.
25
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Net Assets The College’s net assets are classified as follows: Invested in Capital Assets, Net of Related Debt: This category represents the College’s total investment in capital assets, net of related outstanding debt and accumulated depreciation. Restricted Net Assets, Nonexpendable: Net Assets, such as endowment and similar type funds, which are subject to externally imposed stipulations requiring that the funds be maintained permanently by the College. Restricted Net Assets, Expendable: Net Assets for which the College is legally or contractually obligated to spend in accordance with external restrictions. Unrestricted Net Assets: Unrestricted Net Assets are resources that are not subject to any external restrictions and may be used at the discretion of the governing board for any lawful purpose of the College. When an expense is incurred that can be paid using either restricted or unrestricted resources, the College’s policy is to first apply the expense towards restricted resources, and then towards unrestricted resources. Unearned Revenues Tuition, fees, and other revenues received and related to period after August 31, 2005 or 2004, respectively, have been deferred to the subsequent fiscal year. Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Operating and Non-Operating Revenue and Expense Policy The College distinguishes operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the College’s principal ongoing operations. The principal operating revenues are tuition and related fees and Federal grants and contracts. The major non-operating revenue sources are State appropriations and property tax collections. Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets.
26
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 New Accounting Pronouncement In March 2003, the GASB issued Statement No. 40, “Deposit and Investment Risk Disclosures.” This statement is an amendment to GASB No. 3, “Deposits with Financial Institutions, Investments (Including Repurchase Agreements), and Reverse Repurchase Agreements,” establishing modified disclosure requirements related to deposit and investment risk. This Statement was implemented in the College’s financial statements for the current fiscal year to meet GASB implementation requirements. In November 2003, the GASB issued Statement No. 42, “Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries.” This statement will, among other things, establish accounting and financial reporting standards for the impairment of capital assets. Under this standard, a capital asset is considered impaired when its service utility has declined significantly and unexpectedly. The College has not determined the impact, if any, upon its financial position, results of operations or cash flows upon adoption, which is required on or before the College’s fiscal year ending August 31, 2006. In May 2004, the GASB issued Statement No. 43, “Financial Reporting for Other Postemployment Benefit Plans Other Than Pension Plans”, and in June 2004, the GASB issued Statement No. 45, “Accounting and Financial Reporting by Employers for Post-employment Benefit Other Than Pension Plans.” Statement No. 43 establishes accounting and financial reporting standards for healthcare and other nonpension benefits provided to employees as part of their compensation for services. The statement will be implemented in the District’s fiscal year ending August 31, 2006 to meet GASB requirements. Statement No. 45 establishes standards for the measurement, recognition, and display of other post-employment benefits expenses and related liabilities and assets, and other related disclosure requirements. This statement will be implemented on or before the fiscal year ending August 31, 2007 to meet GASB requirements. The College has not determined the impact, if any, upon its financial position, results of operations or cash flows upon adoption of these two Statements. Reclassification Certain amounts have been reclassified for the prior year’s financial statements to conform to current year presentations. Contributions – The Foundation The Foundation records contributions using the guidance of SFAS No. 116, Accounting for Contributions Received and Contributions Made. Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor restrictions. As donor or time restrictions are satisfied, net assets are reclassified to unrestricted net assets. The Foundation’s policy is to report restricted support that is satisfied in the year of receipt as restricted and then released in the same year. Unconditional promises to give are recorded as revenues and receivables.
27
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
3.
AUTHORIZED INVESTMENTS
The College is authorized to invest in obligations and instruments as defined in the Public Funds Investment Act (“PFIA”) (Sec. 2256.001 Texas Government Code). The Board of Trustees has adopted a written investment policy regarding the investment of its funds as defined in the PFIA. Such investments include (1) obligations of the United States or its agencies, (2) direct obligations of the State of Texas or its agencies, (3) obligations of political subdivisions rated not less than “A” by a national investment rating firm, (4) certificates of deposit, and (5) other instruments and obligations authorized by statute. During the year ended August 31, 2005 the College was in compliance with the Public Funds Investment Act.
4.
DEPOSITS AND INVESTMENTS
At August 31, 2005 and 2004, the College had demand deposits with the carrying amount of $1,700,697 and $81,021, respectively, and total bank balances equaled $2,812,926 and $3,620,993, respectively. As of August 31, 2005 and 2004 bank balances of $177,413 and $89,767, respectively, were covered by federal depository insurance, the remaining portions were covered by collateral held by the depository’s agent in the College’s name. Bank balances were fully collateralized or insured at August 31, 2005 and 2004. Cash and cash equivalents included on Exhibit 1, Statements of Net Assets, consist of the items reported below: Cash and Deposits Bank Deposits
2005
Demand Deposits
$
2004
1,700,697
$
81,021
Cash and Cash Equivalents Petty Cash on Hand
7,550
7,450
Short Term Securities
60,700,640
112,158,589
Total Cash and Cash Equivalents
62,408,887
112,247,060
(39,761,916)
(87,058,629)
Restricted Cash Total Cash and Deposits
$
28
22,646,971
$
25,188,431
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Total investments at August 31, 2005 and 2004, are as follows: Reconciliation of Deposits and Investments to Statement of Net Assets Type of Security U.S. Instrumentality Securities
Market Value August 31, 2005
Market Value August 31, 2004
$
$
Cash and Deposits
60,700,640
112,158,589
1,708,247
88,471
Total
62,408,887
112,247,060
Investments
39,672,001
-
Total Deposits and Investments
$
102,080,888
$
112,247,060
Cash and Temporary Investments (Exhibit 1)
$
62,408,887
$
112,247,060
Investments (Exhibit 1)
39,672,001
Total Deposits and Investments
$
102,080,888
$
112,247,060
As of August 31, 2005 the College had the following investments and maturities:
Investment Type
Fair Value
U.S. Treasuries U.S. Agency Securities Total Fair Value
$ $
Portfolio Weighted Average Maturity
16,346,077 23,325,924 39,672,001
Weight Average Maturity (Years) 0.88 0.86 0.87
Interest Rate Risk - In accordance with state law and College’s policy, the College does not purchase any investments with maturities greater than five years. The College manages its exposure to declines in fair value by limiting the weighted average maturity of its investment portfolio to a maximum of one and half years. Credit Risk and Concentration of Credit Risk - In accordance with state law and the College’s investment policy, investments in mutual funds and investment pools must be rated at least “AAA” or “AAA-m”, commercial paper must be rated at least “A-1” or “P-1”, and investments in obligations from other states, municipalities, counties, etc. must be rated at least “A”. The College does not limit the amount it may invest in any one issuer.
29
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
The credit quality (ratings) of securities and concentration of credit exposure as a percentage of total investments as of August 31, 2005 is as follows: Name of Security
Credit Rating
Credit Exposure
FHLB (Federal Home Loan Bank)
AAA
15%
FNMA (Federal National Mortgage Association)
AAA
44%
The State Comptroller of Public Accounts exercises oversight responsibility over TexPool, the Texas Local Government Investment Pool. Oversight includes the ability to significantly influence operations, designation of management and accountability for fiscal matters. Additionally, the State Comptroller has established an advisory board composed of both participants in TexPool and other persons who do not have a business relationship with TexPool. The Advisory Board members review the investment policy and management fee structure. TexPool invests in securities that meet the requirements of Texas Public Funds Investment Act. Finally, Standard & Poor rates TexPool AAA-m. As a requirement to maintain the rating, weekly portfolio information must be submitted to Standard & Poor, as well as the Office of Comptroller of Public Accounts for review. As of August 31, 2005 and 2004 the College has an investment of $43,507,908 and $112,158,589, respectively, in TexPool, the Texas Local Government Investment Pool. TexPool operates in a manner consistent with the SEC’s Rule 2a7 of the Investment Act of 1940. TexPool uses amortized cost rather than market value to report net assets to compute share prices. Accordingly, the fair value of the position in TexPool is the same as the value of TexPool shares. The College reports investments in TexPool as cash and cash equivalents. The Foundation At May 31, 2005 and 2004 the Foundation had demand deposits with the carrying amounts of $233,388 and $85,462 respectively, with various financial institutions. As of May 31, 2005 and 2004 bank balances covered by federal deposit insurance were $13,862 and $50,082, respective. The Foundation records investments using the guidance of SFAS No. 124, Accounting for Certain Investments Held by Nonprofit Organizations. Investments are stated at their readily determinable fair values in the statement of financial position. Unrealized gains and losses are included in the change in net assets.
30
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Total deposits and investments included in the statement of financial position at May 31, 2005 and 2004, consisted of the following: Type of Security Cash and Deposits with Banks
Market Value August 31, 2005
Market Value August 31, 2004
$
$
13,862
Cash and Deposits with Brokers Total Cash and Deposits Investments Total Deposits and Investments
$
50,082
219,526
35,380
233,388
85,462
822,389
752,081
1,055,777
$
837,543
As of May 31, 2005 the Foundation had the following investments and maturities:
Fair Value
Investment Type $
U.S. Agency Securities Corporate Bonds Mutual Funds Equity Securities Total Fair Value
$
Portfolio Weighted Average Maturity
Weight Average Maturity (Years)
369,967
7.5
41,782
1.2
379,730
Untenured
30,910
Untenured
822,389 6.6
Investments held by the Foundation’s brokerage firms are insured by the Securities Investor protection Corporation (SPIC) for loss, theft, destruction of securities while in the brokerage firm’s custody. In the even of a brokerage firm’s failure, coverage is provided for up to $500,000. The Foundation’s brokerage firms provide excess SIPC protection for all its customers’ securities up to the net equity securities balance. This coverage does not protect against market risks and fluctuations associated with normal market investments.
31
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 The credit quality (ratings) of securities and concentration of credit risk exposure as a percentage of total investments at fair value as of May 31, 2005 was as follows: Name of Security
Credit Rating
Credit Exposure
FHLMB (Federal Home Loan Mortgage Bank)
AAA
21%
FNMA (Federal National Mortgage Association)
AAA
24%
A+
5%
Corporate Bonds
5.
DERIVATIVES
Derivatives are investment products that may be a security or contract that derives its value from another security, currency, commodity, or index, regardless of the source of funds used. The College did not invest in derivatives and held no derivative instruments at August 31, 2005 or 2004.
32
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
6.
CAPITAL ASSETS
Capital assets activity for the year ended August 31, 2005 was as follows: Balance September 1, 2004
Additions
Retirements
Balance August 31, 2005
Transfers
Not Depreciated: Land Construction in Progress Subtotal
$
17,324,702
$
-
$
-
$
-
$ 17,324,702
13,173,272
9,870,397
(73,282)
(14,664,990)
8,305,397
30,497,974
9,870,397
(73,282)
(14,664,990)
25,630,099
87,040,952
100,341
-
13,325,014
100,466,307
Buildings and Other Capital Assets: Buildings Infrastructure
2,913,746
-
Land Improvements
7,994,297
66,530
Leasehold Improvements Library Books
-
(219,217)
-
3,100,033
1,339,976
-
214,544
(399,343)
2,913,746 9,181,586
-
-
-
2,915,234
Equipment
33,936,109
5,866,297
(5,399,952)
958,322
35,360,776
Subtotal
134,985,137
6,247,712
(6,018,512)
15,623,312
150,837,649
12,592,994
1,750,519
-
-
776,999
97,125
-
-
874,124
3,954,805
484,328
-
4,316,678
-
-
Accumulated Depreciation: Buildings Infrastructure Land Improvements Leasehold Improvements Library Books
-
(122,455)
-
-
1,988,739
134,654
(399,343)
Equipment
24,163,300
3,615,232
(5,114,382)
416,516
23,080,666
Subtotal
43,476,837
6,081,858
(5,636,180)
416,516
44,339,031
91,508,300
165,854
(382,332)
15,206,796
106,498,618
Net Buildings and Other Capital Assets Assets Under Capital Lease: Equipment Accumulated Depreciation Equipment Net Assets Under Capital Lease Net Capital Assets
2,437,795
-
786,772
292,796
1,651,023 $ 123,657,297
(292,796) $ 9,743,455
33
-
14,343,513
-
(958,322)
1,479,473
-
(416,516)
663,052
(541,806)
816,421
$
1,724,050
(455,614)
$
-
$ 132,945,138
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Capital assets activity for the year ended August 31, 2004 was as follows: Balance September 1, 2003
Additions
Retirements
Balance August 31, 2004
Transfers
Not Depreciated: Land Construction in Progress Subtotal
$
11,250,761
$
4,750,000
$
(404)
$
1,324,345
$
17,324,702
16,785,600
12,459,191
(150,315)
(15,921,204)
13,173,272
28,036,361
17,209,191
(150,719)
(14,596,859)
30,497,974
65,468,886
2,714,965
18,857,101
87,040,952
Buildings and Other Capital Assets: Buildings Infrastructure
2,913,746
Land Improvements
7,382,067
-
-
-
832,428 -
-
2,913,746
-
(220,198)
-
(7,769,256)
7,994,297
Leasehold Improvements
7,769,256
Library Books
2,962,077
229,816
(91,860)
Equipment
32,942,930
2,540,701
(3,115,110)
1,567,588
33,936,109
Subtotal
119,438,962
6,317,910
(3,206,970)
12,435,235
134,985,137
10,976,955
1,643,223
-
(27,184)
679,874
97,125
-
-
Land Improvements
3,617,820
351,023
-
(14,038)
Leasehold Improvements
3,886,554
133,491
-
(4,020,045)
Library Books (Restated)
1,858,144
130,595
-
Equipment
22,135,274
3,816,312
(2,637,677)
Subtotal
43,154,621
6,171,769
(2,637,677)
76,284,341
146,141
(569,293)
3,505,939
831,899
1,185,359
-
3,100,033
Accumulated Depreciation: Buildings Infrastructure
Net Buildings and Other Capital Assets Assets Under Capital Lease: Equipment Accumulated Depreciation: Equipment Net Assets Under Capital Lease Net Capital Assets
12,592,994 776,999 3,954,805 -
-
1,988,739
849,391
24,163,300
(3,211,876)
43,476,837
15,647,111
91,508,300
-
(1,900,043)
2,437,795
451,204
-
(849,791)
786,772
2,320,580
380,695
-
(1,050,252)
1,651,023
$ 106,641,282
$ 17,736,027
34
$
(720,012)
$
-
$ 123,657,297
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
7.
LONG-TERM LIABILITIES
Long-term liability activity for the year ended August 31, 2005 was as follows: Balance September 1, 2004
Additions
Reductions
Balance August 31, 2005
Current Portion
$
$
Leases, Bonds, and Notes Capital Leases
$
1,297,394
Revenue Bonds
52,269,516
General Obligation Bonds
98,910,000 3,946,796
Notes Payable Total Leases, Bonds, and Notes
$
25,255,000
$
(699,378)
598,016
454,868
(25,485,000)
52,039,516
1,060,000
-
(500,000)
98,410,000
500,000
-
(216,795)
3,730,001
228,567
154,777,533
2,243,435
156,423,706
25,255,000
(26,901,173)
Compensated Absences
2,731,768
2,055,558
(1,842,188)
2,945,138
2,055,558
Deferred Revenue
1,369,583
(95,000)
1,274,583
95,000
Other Long-Term Liabilities
-
Accreted Bond Interest Payable
611,822
287,302
Bond Premium
608,771
1,377,821
(134,113)
1,852,479
186,435
5,321,944
3,720,681
(2,071,301)
6,971,324
2,336,993
28,975,681
$ (28,972,474)
$ 161,748,857
Total Other Long-Term Liabilities Total Long-Term Liabilities
$ 161,745,650
$
35
-
899,124
-
$
4,580,428
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 For comparison purposes, the following table summarizes changes in long-term liabilities for the year ended August 31, 2004: Balance September 1, 2003
Additions
Balance August 31, 2004
Reductions
Current Portion
Leases, Bonds, and Notes Capital Leases
$
1,561,567
Revenue Bonds
53,759,516
General Obligation Bonds
75,000,000
Notes Payable Total Leases, Bonds, and Notes
$
831,897
$
-
(1,490,000)
23,910,000
4,152,425
(1,096,070)
-
-
$
1,297,394
$
699,378
52,269,516
605,000
98,910,000
500,000
(205,629)
3,946,796
216,795
134,473,508
24,741,897
(2,791,699)
156,423,706
2,021,173
Compensated Absences
2,517,661
1,839,484
(1,625,377)
2,731,768
1,839,484
Deferred Revenue
1,464,583
(95,000)
1,369,583
95,000
Other Long-Term Liabilities
Accreted Bond Interest Payable
339,582
272,240
-
611,822
-
Bond Premium
591,234
102,524
(84,987)
608,771
89,021
4,913,060
2,214,248
(1,805,364)
5,321,944
2,023,505
$ 139,386,568
$ 26,956,145
(4,597,063)
$ 161,745,650
Total Other Long-Term Liabilities Total Long-Term Liabilities
8.
-
$
$
4,044,678
DEBT AND LEASE OBLIGATIONS
General Obligation Bonds For the year ended August 31, 2004, the College issued $23,910,000 of General Obligation Bonds. The General Obligation Bonds are direct obligations payable from ad valorem taxes levied, within the limitation prescribed by law, against all property located within the College’s taxing district. Payment of the bonds will be derived from taxes levied and collected on an annual basis in an amount sufficient to pay the principal and interest when due, full allowance being made for delinquencies and collection costs. General Obligation Bonds are due and payable in annual installments varying from $250,000 to $1,665,000, with interest rates varying from 3.0% to 5.50% and the final installment due in 2034. For the year ended August 31, 2003, the College issued $75,000,000 of General Obligation Bonds. The General Obligation Bonds are also direct obligations payable from ad valorem taxes levied, within the limitations prescribed by law, against all property located within the College’s taxing district. General Obligation Bonds are due and payable in annual installments varying from $500,000 to $5,130,000, with interest rates varying from 2.0% to 5.00% and the final installment due in 2033.
36
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Revenue Bonds Repayment of the revenue bond indebtedness is collateralized by a first lien on a pledge of certain tuition and fees as described below. The bond indentures for all outstanding bonds require that the College deposit into an interest and sinking fund amounts equivalent to $15 per regular semester and $7.50 per summer term for all tuition paying students. In addition, a fee of $9 per semester credit hour is to be collected from all nonexempt students for each semester and summer term. Such pledged tuition and fees, a portion of which is restricted for repayment of indebtedness, amounted to $6,462,679 and $6,297,599 for the years ended August 31, 2005 and 2004, respectively. Revenue bonds payable are due in annual installments varying from $70,000 to $2,810,000, with interest rates from 3.0% to 5.75% and the final installment due in 2023. The College has complied with all significant bonded indebtedness covenants for the years ended August 31, 2005 and 2004. The principal and interest expense requirement at August 31, 2005 and for the next five years and beyond is summarized below: General Obligation Bonds For the Year Ended August 31, 2006 2007 2008 2009 2010 2011-2015 2016-2020 2021-2025 2026-2030 2031-2035 Total
Principal $
500,000 250,000 500,000 750,000 750,000 8,905,000 17,385,000 21,610,000 26,850,000 20,910,000
$ 98,410,000
Revenue Bonds
Interest $
4,404,090 4,394,090 4,388,465 4,374,715 4,352,965 21,129,225 18,167,100 13,940,946 8,699,969 2,178,713
$ 86,030,278
37
Principal $
1,060,000 1,920,000 2,445,000 2,810,000 2,910,000 16,530,000 17,721,756 6,642,760 -
$ 52,039,516
Interest $
2,238,476 2,179,039 2,085,314 1,968,943 1,841,741 7,095,599 5,873,749 5,177,065 -
$ 28,459,926
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 For comparison purposes, debt service requirements related to bonds as of August 31, 2004 were as follows: General Obligation Bonds For the Year Ended August 31, 2005 2006 2007 2008 2009 2010-2014 2015-2019 2020-2024 2025-2029 2030-2034 Total
Principal $
500,000 500,000 250,000 500,000 750,000 7,260,000 15,980,000 20,710,000 25,695,000 26,765,000 $ 98,910,000
Revenue Bonds
Interest $
4,614,403 4,404,090 4,394,090 4,388,465 4,374,715 21,403,400 18,937,450 14,838,068 9,855,944 3,434,056 $ 90,644,681
Principal $
605,000 890,000 2,400,000 2,545,000 2,690,000 15,350,000 17,320,119 10,469,397 $ 52,269,516
Interest $
2,450,895 2,416,869 2,335,994 2,215,919 2,092,178 8,336,475 6,293,509 6,075,028 $ 32,216,867
General information related to general obligation and revenue bonds payable is summarized below: •
Limited tax Bonds, Series 2004. To construct, renovate and equip college buildings District-wide, including phase 2 of the Health careers Building, construction of the South Austin campus, parking and other such improvements as determined by the College. Issued June 30, 2004. Total Authorized $99,000,000 - $23,910,000 Issued. Source of revenue for debt service – ad valorem taxes. Outstanding balance as of August 31, 2005 and 2004 respectively - $23,910,000 and $23,910,000.
•
Limited tax Bonds, Series 2003. To construct, renovate and equip college buildings District-wide, including student parking and other such improvements as determined by the College. Issued July 10, 2003. Total Authorized $99,000,000 - $75,000,000 Issued. Source of Revenue for debt service – ad valorem taxes. Outstanding balance as of August 31, 2005 and 2004 respectively - $74,500,000 and $75,000,000.
38
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 •
Combined Fee Revenue Refunding Bonds, Series 2005. To refund a portion of Series 2000 bonds, and the remaining 1995 Series bonds. Issued March 15, 2005. Total Authorized $25,255,000; all authorized bonds have been issued. Source of revenue for debt service – Tuition and general fees. Outstanding as of August 31, 2005 and 2004 respectively - $25,255,000 and $0.
•
Combined Fee Revenue Refunding Bonds, Series 2002. To purchase, acquire, renovate, construct and equip certain district facilities, and to refund the remaining 1992 Series bonds. Issued March 4, 2002. Total Authorized $10,389,516 - $5,805,000 Current Interest Bonds and $4,584,516 capital Appreciation Bonds, all authorized bonds have been issued. Source of revenue for debt service – Tuition and general fees. Outstanding as of August 31, 2005 and 2004 respectively - $9,974,516 and $10,184,516.
•
Combined Fee Revenue Refunding Bonds, Series 2000. To purchase, acquire, renovate, enlarge, construct and equip certain facilities of the College; to refund a portion of the College’s currently outstanding Series 1995 Bonds. Issued October 1, 2000. Total authorized of $31,365,000; all authorized bonds have been issued. Source of revenue for debt service – Tuition and general fees. Outstanding as of August 31, 2005 and 2004 respectively - $8,060,000 and $30,520,000.
•
Combined Fee Revenue Refunding Bonds, Series 1998. To refund a portion of Series 1995 bonds. Issued April 1, 1998. Total authorized of $9,160,000; all authorized bonds have been issued. Source of revenue for debt service – Tuition fees and general fees. Outstanding as of August 31, 2005 and 2004 respectively - $8,750,000 and $8,815,000.
•
Combined Fee Revenue Building and Refunding Bonds, Series 1995. To acquire, construct, improve, enlarge, equip and maintain property, buildings, and facilities of the College; to refund a portion of the College’s currently outstanding Series 1986, Series 1990, and Series 1991 Bonds. Issued August 15, 1995. Total authorized of $21,970,000; all authorized bonds have been issued. Source of revenue for debt service – Tuition fees and general fees. Outstanding balance at August 31, 2005 and 2004 respectively - $0 and $2,750,000.
39
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Capital Leases From 1997 through 2004 the College entered into several capital leases to finance the purchase of various classes of property. Such property is capitalized at the present value of future minimum lease payments. The original capitalized cost of all such property under lease purchase agreements is as follows:
Equipment
2005
2004
$ 1,479,473
$ 2,437,795
Less: Accumulated Depreciation
(663,052) $
Net Equipment Under Captial Lease
816,421
(786,772) $ 1,651,023
As of August 31, 2005 and 2004 the College made lease payments for leased property of $1,168,756 and $1,175,225, respectively. The following is a schedule of the future minimum lease payments for leased property and the present value of the net minimum lease payments at August 31, 2005 and 2004: For the Year Ended August 31,
2005
2005 2006 2007 Total Minimum Lease Payments Less: Amount Representing Interest Costs Present Value of Mimimum Lease Payments
$
$
469,149 145,001 614,150 (16,151) 597,999
2004 $
737,662 469,149 145,001 1,351,812 (54,418) $ 1,297,394
Long-Term Debt On November 30, 2001 the College entered into an agreement with a third party for the purchase, construction, and improvement of certain College facilities at an interest rate of 5.43%. Principal payments began in fiscal year 2003 and go through fiscal year 2017. At August 31, 2005 and 2004, the College has an outstanding balance of $3,730,000 and $3,946,795, respectively. The College made scheduled principal payments of $216,795 and $205,629 for the years ending August 31, 2005 and 2004, respectively.
40
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Principal and interest requirements at August 31, 2005 and for the next five years and beyond are summarized below: For the Year Ended August 31, 2006 2007 2008 2009 2010 2011-2015 2016-2017 Total
Principal $
Interest
228,567 240,978 254,063 267,859 282,404 1,659,383 796,746
$ 3,730,000
$
202,539 190,128 177,043 163,247 148,702 496,147 65,467
$ 1,443,273
Total $
431,106 431,106 431,106 431,106 431,106 2,155,530 862,213
$ 5,173,273
For comparison purposes, the following table summarizes changes in notes payable obligations for the year ended August 31, 2004: For the Year Ended August 31, 2005 2006 2007 2008 2009 2010-2014 2015-2017 Total
Principal $
Interest
216,795 228,567 240,978 254,063 267,859 1,573,920 1,164,613
$ 3,946,795
41
$
214,311 202,539 190,128 177,043 163,247 581,611 128,705
$ 1,657,584
Total $
431,106 431,106 431,106 431,106 431,106 2,155,531 1,293,318
$ 5,604,379
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
9.
DEFEASED BONDS OUTSTANDING
The liability for the bonds below does not appear on the College’s financial statements as these bonds are considered legally defeased as of August 31, 2005 and 2004:
Bond Issued
2005 Par Value Outstanding
Year Refunded
Combined Fee Revenue and Refunding Bonds, Series 2000 Combined Fee Revenue Refunding Bonds, Series 1995 Combined Fee Revenue Building and Refunding Bonds, Series 1992 Combine Fee Revenue Building and Refunding Bonds, Series 1995 Combined Fee Revenue Building and Refunding Bonds, Series 1995
2005
$
22,165,000
2004 Par Value Outstanding $
30,520,000
2005
2,715,000
2,750,000
2002
1,330,000
2,840,000
2001
770,000
1,450,000
1998
8,345,000
8,345,000
Combined Fee Revenue Bonds, Series 1991
1995
2,100,000
2,100,000
Combined Fee Revenue Bonds, Series 1991
1992
Total
$
37,425,000
265,000 $
48,270,000
For the year ended August 31, 2005, the College issued Combined Fee Revenue Refunding Bonds, Series 2005, to refund a portion of Series 2000 bonds, and the remaining 1995 Series bonds. The par value of the refunding bonds was $25,255,000. The refund of the portion of Series 2000 and the remaining 1995 Series bonds was effected on April 21, 2005. The present value of the net refunding gain as of April 21, 2005 was $874,896. The total cash flows required to service the refunded bonds and cash flows required to service the refunding bonds as of the effective date of the refunding were $39,574,638 and $38,613,810, respectively.
10.
OPERATING LEASE COMMITMENTS AND RENTAL AGREEMENTS
The College leases various classrooms, offices, and parking lots under Rental Agreements. These agreements have clauses, which allow the College to terminate the agreement if funding becomes unavailable or the Board of Trustees does not approve funding. Rental payments during the fiscal year ended August 31, 2005 and 2004 were $476,814 and $386,232, respectively.
42
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Future minimum rental payments are as follows: Year Ending August 31
2005
2005 2006 2007 2008 2009 2010 Total Future Minimum Lease Payments
$
$
393,910 87,240 88,102 70,000 70,000 709,252
2004 $
$
382,009 86,419 87,240 88,102 70,000 713,770
The College entered into a non-cancelable operating lease for the lease of a single vehicle. Total rental payments on leased vehicles during the fiscal year ended August 31, 2005 and 2004 were $5,503 and $5,503, respectively. The following is a schedule of future noncancelable lease payments due on the operating leases: Year Ending August 31 2005 2006 Total Future Minimum Lease Payments
11.
2005 $ $
3,669 3,669
$ $
2004 5,503 4,127 9,630
EMPLOYEES’ RETIREMENT PLANS
Defined Benefit Plan The State of Texas (the State) has joint contributory retirement plans for almost all its employees. One of the primary plans in which the College participates is administered by the Teacher Retirement System of Texas (TRS), a multiple-employer public employee retirement system (PERS). It is a cost-sharing PERS with one exception: all risks and costs are not shared by the employer but are the liability of the State of Texas. The Teacher Retirement System of Texas administers retirement and disability annuities, and death and survivor benefits to employees and beneficiaries of employees covered under the plan. It operates primarily under the provisions of Texas Constitution, Article XVI § 67 and Texas Government Code, Title 8, Subtitle C. The Retirement System of Texas also administers proportional retirement benefits and service credit transfer under Texas Government Code, Title 8, Chapter 803 and Chapter 805, respectively. Structure, benefits and contributions are established by state statute. State law provides for fiscal years 2005, 2004 and 2003 a state contribution rate of 6.0% and a member contribution rate of 6.4%. No contribution is required by the College. Contribution
43
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 requirements are not actuarially determined but are legally established each biennium pursuant to the following state funding policy: (1)
The state constitution requires legislature to establish a member contribution rate of not less than 6% of the member’s annual compensation and a state contribution rate of not less than 6% and not more than 10% of the aggregate annual compensation of all members of the system during that fiscal year.
(2)
A state statute prohibits benefit improvements or contribution reductions if, as a result of the particular action, the time required to amortize TRS’s unfounded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by such action.
All College employees, except those employed less than one-half the standard workload and those exempted by law, are required to participate in the Teachers Retirement System. For the year ended August 31, 2003, participants were eligible to retire and receive a standard service retirement annuity if the member (1) is at least 65 years old and has at least five years of service credit in the System; (2) if the sum of the member’s age and years of credited service equaled or exceeded 80 years with at least five years of credited service; (3) at age 50 years old and has a least 30 years of service credit in the System; or (4) any combination of age plus years of service which equals 80. If a member is 55 years old and has at least five years of service credit in the System, or is any age below 50 years old and has at least 30 years of service credit in the System, the member is eligible to retire and receive a service retirement annuity reduced from the standard service annuity. Members are fully vested after five years of creditable service and are entitled to any benefit for which eligibility requirements have been met. Effective September 1, 2003, the State retiree insurance program eligibility criteria changed per SB1370, 78th Texas Legislature, 2003 Regular Session. The retiree must have a minimum of 10 years of creditable TRS/ORP service and be at least age 65 or have at least 10 years of creditable TRS/ORP service at any age where the age added to TRS/ORP years of service equals at least 80. Also, effective September 1, 2003, the name of the state employee insurance program changed from the ERS Uniform Group Insurance Program to ERS Group Benefits Program (GBP). For the years ended August 31, 2005 and 2004, total contributions to the Teacher Retirement System amounted to $5,635,857 and $5,130,378, respectively, of which $2,909,034 and $2,648,117, respectively, was made by employees, and $2,499,747 and $2,272,084, respectively, was made by the State of Texas. Total payroll for employees covered by the System for the years ended August 31, 2005 and 2004 was $45,453,663 and $41,379,729, respectively.
44
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 In accordance with the provisions of GASB Statement No. 27, three year trend information for the State’s and the participants’ combined contributions to TRS is as follows:
Fiscal Year
District Annual Required Contributions (ARC)
Percentage of ARC Contributed
2004 2003 2002
5,130,378 4,881,883 4,800,237
100% 100% 100%
TRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the TRS Communications Department, 1000 Red River Road, Austin, Texas 78701, by calling 1-800-223-8778, or by downloading the report from the TRS internet website, www.trs.state.tx.us, under the TRS Publications heading. Defined Contribution Retirement Plans The State has also established an Optional Retirement Program (ORP) for institutions of higher education that is subject to amendment by the Texas Legislature. Participation in the ORP is in lieu of participation in the TRS. The ORP provides for the purchase of annuity contracts as individual retirement accounts and is a defined contribution plan. Under the Optional Retirement plan, employees contribute 6.65% and the State of Texas contributes 6.00%. The College contributes 2.50% of each participant’s salary for those employees hired prior to September 1, 1995 and 0.00% for those employees hired subsequent to August 31, 1995. In addition, the College has established a defined contribution Money Purchase Plan for parttime employees, call the Part-Time Employees Retirement System (PTERS). To be eligible for participation in the PTERS, an employee must complete one year of service in a service period. Participation in this plan is in lieu of participation in the TRS or the ORP. Under the PTERS, the College is required to withhold from an employee’s compensation 6% and match an amount equal to 1.5% of the employee’s total compensation for a combined contribution of 7.5% of the employee’s total annual compensation. The College has contracted with Ohio National Life Insurance Company to administer the PTERS. The College maintains the authority to amend plan provisions and contributions of the PTERS. Total combined contributions for the fiscal years ended August 31, 2005 and 2004, are $3,502,961 and $3,284,630, respectively, for the ORP and $1,544,911 and $1,421,216, respectively, for the PTERS. Total payroll of employees participating in plans for the fiscal years ended August 31, 2005 and 2004 are $24,069,093 and $21,500,315, respectively, for ORP and $20,598,819 and $18,949,546, respectively, for the PTERS. Neither the State nor the College has additional or unfunded liabilities for these plans.
45
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
12.
ON-BEHALF PAYMENTS
The retirement and insurance expense to the State for the College for the fiscal years ended August 31, 2005 and 2004 was $8,227,788 and $7,786,918, respectively. This amount represents the portion of expended appropriations made by the State Legislature on behalf of the College. For the fiscal years ended August 31, 2005 and 2004 the State made other onbehalf payments for salaries and benefits totaling $3,928,897 and $3,617,673, respectively. For the fiscal years ended August 31, 2005 and 2004 the College recorded the State’s total onbehalf contributions of $4,298,891 and $4,169,245, respectively, as revenues and expenses in the accompanying basic financial statements.
13.
COMPENSATED ABSENCES
Full-time employees earn annual leave from 10 to 13.34 hours per month depending on the number of years employed with the College. The College’s policy is that classified, professional, technical or administrative employees may accrue up to 240 hours of annual leave. Sick leave, which is limited to a maximum of 1,200 hours, is earned at the rate of eight (8) hours per month. The maximum sick leave that may be paid to an employee when he retires is onehalf of the employee’s accumulated entitlement in excess of 960 hours, or 120 hours, whichever is less. The College’s policy is to recognize the cost of sick leave when earned, which provides for the College’s maximum vested liability. For the fiscal years ended August 31, 2005 and 2004 the College recognized $2,945,138 and $2,731,768 respectively, as an accrued liability for the unpaid annual and sick leave. The College’s reporting of accrued liabilities for compensated absences is in accordance with Governmental Accounting Standards Board (GASB) Statement No. 16, Accounting for Compensated Absences. The total amount accrued at August 31, 2005 of $2,945,138 is allocated $673,654 to sick leave and $2,271,484 to annual leave. The total amount accrued at August 31, 2004 of $2,731,768 is allocated $609,710 to sick leave and $2,122,058 to annual leave.
14.
PENDING LAWSUITS AND CLAIMS
On August 31, 2005 and 2004, various lawsuits and claims involving the College were pending. While the ultimate liability with respect to litigation and other claims asserted against the College cannot be reasonably estimated at this time, this liability, to the extent not provided for by insurance or otherwise, is not likely to have a material effect on the College. The College receives federal, state and local grants that are subject to review and audit by the grantor agencies. Such audits could lead to requests for reimbursement to the grantor agency
46
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 for expenditures disallowed under terms of the grant. The College’s management believes such disallowances, if any, will not have a material effect on the basic financial statements.
15.
DISAGGREGATION OF RECEIVABLES AND PAYABLES BALANCES
Receivables Accounts Receivable at August 31, 2005 and 2004 were as follows: 2005
2004
Tuition and Fees Receivable (net of allowance for doubtful accounts of $594,177 and $414,255) Taxes Receivable Contracts and Grants Receivable Investment Income Receivable Other Receivable
$ 5,542,934 1,280,066 2,695,411 187,026 162,364
$
4,963,478 1,179,315 1,824,676 187,091
Total Receivables
$ 9,867,801
$
8,154,560
Payables Payable balances at August 31, 2005 and 2004 were as follows: 2005 Payable to Vendors Salaries & Benefits Payable Payable to Students Accrued Interest Payable Workers Compensation Estimated Claims Construction Retainage Total Payables
16.
$ 5,195,307 2,212,526 1,021,711 555,233 134,862 190,333 $ 9,309,972
2004 $
$
3,339,002 1,543,024 1,144,575 798,781 124,369 477,290 7,427,041
UNEARNED REVENUES
Revenues, primarily consisting of tuition and fees, related to academic terms in the next fiscal year are recorded on the Statement of Net Assets as unearned revenue in the current fiscal year.
47
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
17.
DEFERRED LEASE – CITY OF AUSTIN
In 1997, the Austin Community College (the “College”) and the City of Austin (the “City”) desired to jointly develop a “One Stop Career Center” to more efficiently coordinate the training and employment of individuals needing specialized vocational job training and educational opportunities. In order to accomplish and develop the Center, the College and the City executed several lease agreements on June 27, 1997 that allow the City to provide money to the College for the construction of the One Stop Career Center as part of the College’s development of its East Austin Community College Campus. The College entered into a long-term lease for twenty years with the City for the lease of a portion of the facilities. Immediately following execution of this lease, the College and the City entered into a sublease agreement in connection with the lease-back of the premises to the College. The sublease is effective the date of the prime lease, and is subject to the condition that the College will enter into a second sublease with the Capital Area Workforce Development Board for the ultimate purpose of providing work space for the One Stop Career Center. The City funded this lease with funds received from the United States Department of Housing and Urban Development, and discounted the cost of the rent payment under the Sublease Agreement with the College as a grant to enable the College to reduce the cost of its sublease to the Development Board for the Career Center project. The College and the City agreed that the City would begin paying an annual base rent of $95,000 once the building was completed, or by May 31, 2000. As a result of the prime lease, the City prepaid the entire twenty year annual base rent of $1,900,000 to the College. For the years ended August 31, 2005 and 2004, the College has recognized $95,000 each year as lease payments. The remaining liability is recorded as a long term liability for the fiscal years ended August 31, 2005 and 2004 in the amounts of $1,274,583 and $1,369,583, respectively. The acquisition cost of the building was $2,172,234 and the book value is $1,911,669. Depreciation expense for the current year was $39,048.
18.
FUNDS HELD FOR OTHERS
The College holds funds for certain students and student organizations. These amounts are reflected in the basic financial statements as funds held for other in the amount of $400,595 and $326,851 for the fiscal years ended August 31, 2005 and 2004, respectively.
48
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004
19.
CONTRACT AND GRANT AWARDS
Contract and grant awards are accounted for in accordance with the requirements of the AICPA Industry Audit Guide, Audits of Colleges and Universities. Revenues are recognized on Exhibit 2 and Schedule A. Contract and grant awards for which funds are expended but not yet collected are included in Accounts Receivable in the Statement of Net Assets (See Contracts and Grants Receivable, Note 15). Contract and grant awards that are not yet funded and for which the College has not yet performed services are not included in the financial statements. Contract and grant awards funds already committed, e.g., multi-year awards, or funds awarded during fiscal years ended August 31, 2005 and 2004 for which monies have not been received totaled $5,578,740 and $5,042,675, respectively. These amounts were comprised by the following: 2005 Federal Contracts and Grant Awards State Contracts and Grant Awards Local Contracts and Grant Awards Private Contracts and Grant Awards Total
20.
$ 3,542,925 810,675 1,141,523 83,617 $ 5,578,740
2004 $
$
2,446,744 1,436,444 703,370 456,117 5,042,675
SELF-INSURED PLANS
As of December 31, 1999, the College ended its Self-Insurance program (which had been in effect since 1992) and became fully insured for workers compensation. All claims incurred from fiscal year 1992 through December 31, 1999 are covered under the College’s Self-Insurance program and all claims incurred subsequent to that date will be covered under the new workers compensation policy. Due to the types of risk self-insured, the ultimate amount to be paid out may be more or less than the amount accrued at August 31, 2005. The College has a contingent liability in the event the insurer is unable to fulfill its responsibility under the contract. At August 31, 2005 and for the prior three years, there were no claims exceeding the College’s retention limits.
49
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Changes in claims liability amount for the years ended August 31, 2005 and 2004 are as follows: 2005 Balance of Liability at Beginning of Fiscal Year Changes in Estimates Refund of Previous Payments Claim Payments Balance of Liability at End of Fiscal Year
$
$
124,369 1,756 25,491 (16,754) 134,862
2004 $
$
149,645 (25,276) 124,369
The end of year liability includes claims incurred and reported and estimated claims incurred but not reported. The Worker’s Compensation claims liability is stated at net present value with no discount factor.
21.
POST-RETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
In addition to providing pension benefits, the State provides certain health care and life insurance benefits for retired employees. Almost all of the employees may become eligible for those benefits if they reach normal retirement age while working for the State. Those, and similar benefits for active employees, are provided through an insurance company whose premiums are based on benefits paid during the previous year. The State recognizes the cost of providing these benefits by expending the annual insurance premiums. The cost of providing those benefits for retirees is not separable from the cost of providing benefits for the active employees.
22.
PROPERTY TAXES
The College’s ad valorem property tax is levied each October on the assessed value listed as of the prior January 1 for all real and business personal property located in the College. At August 31, Assessed Valuation
2005
2004
$ 53,865,245,581
$ 52,270,532,903
Less: Exemptions Net Assessed Valuation
(4,593,157,293) $ 49,272,088,288
50
(3,865,040,772) $ 48,405,492,131
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Fiscal Year 2005: Current Operations Tax Rate per $100 Valuation Authorized Tax Rate per $100 Valuation Assessed
Debt Service
Total
$
0.0800
$
0.0100
$
0.0900
$
0.0800
$
0.0100
$
0.0900
Fiscal Year 2004: Current Operations Tax Rate per $100 Valuation Authorized Tax Rate per $100 Valuation Assessed
Debt Service
Total
$
0.0700
$
0.0071
$
0.0771
$
0.0700
$
0.0071
$
0.0771
Taxes levied for the year ended August 31, 2005 and 2004 are $43,896,105 and $37,320,634, respectively (which includes any penalty and interest assessed, if applicable). Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1st of the year following the year in which imposed. On January 1, of each year a tax lien attaches to property to secure payment of all taxes, penalties, and interest. Fiscal Year 2005: Taxes Collected
Current Operations
Current Taxes Collected Delinquent Taxes Collected Penalties and Interest Collected
$ 38,722,510 186,294 309,632
$
4,839,769 13,762 21,863
$ 43,562,279 200,056 331,495
Total
$ 39,218,436
$
4,875,394
$ 44,093,830
51
Debt Service
Total
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 Fiscal Year 2004: Taxes Collected
Current Operations
Debt Service
Current Taxes Collected Delinquent Taxes Collected Penalties and Interest Collected
$ 33,446,760 82,959 204,644
$
3,392,936 10,961
$ 36,839,696 82,959 215,605
Total
$ 33,734,363
$
3,403,897
$ 37,138,260
Total
Tax collections for the year ended August 31, 2005 and 2004 were 99.43% and 99.51%, respectively, of the current tax levy. The College does not record an allowance for uncollectibles against property taxes since the allowance would not be material to the basic financial statements. The use of tax proceeds is restricted to maintenance and operations and debt service.
23.
INCOME TAXES
The College is exempt from income taxes under Internal Revenue Code Section 115, Income of States, Municipalities, Etc., although unrelated business income may be subject to income taxes under Internal Revenue Code Section 511(a)(2)(B), Imposition of Tax on Unrelated Business Income of Charitable, etc. Organizations. During the fiscal year ended August 31, 2005 and 2004 the College had $592 and $0, respectively, of unrelated business income tax expense, with no tax liability as of August 31, 2005 and 2004.
24.
DISCRETE COMPONENT UNIT – AUSTIN COMMUNITY COLLEGE FOUNDATION
Austin Community College Foundation (the “Foundation”) is a Texas nonprofit corporation chartered in 1991 to provide supplemental financial resources to advance the institutional goals and expand the educational services of the College. It is the intention of the Foundation to support educational initiatives which will enhance the quality of facilities and instruction, increase and diversify educational services, and improve accessibility to educational opportunities for students, faculty, staff, and residents of the geographic areas served by the College. The Foundation is accounted for separately in the Basic Financial Statements of the College and has a May 31 fiscal year end. Complete financial statements of Austin Community College Foundation can be obtained from the administrative office of the Austin Community College.
52
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 College/Foundation Transactions The purpose of the Foundation is to support funding initiatives of the College, including remitting proceeds of funding initiatives of the College. For the years ended May 31, 2005 and 2004, the Foundation remitted $260,429 and $286,532, respectively, to the College for scholarships and programs. At May 31, 2005 and 2004, the Foundation had accounts payable balances of $0 and $0, respectively, due to the College for restricted funds received during the years then ended which had not been remitted as of May 31, 2005 and 2004, respectively. The Foundation’s operation and fundraising expenses are paid for by the College. No accruals have been made in the Foundation’s financial statements to provide for these revenues and expenses for the year ended May 31, 2005 and 2004. Income Tax Status The Foundation, a nonprofit corporation operating under 501(c)(3) of the Internal Revenue Code, is generally exempt from federal income taxes and, accordingly, no provision for income taxes is included in the financial statements.
25.
RESTATEMENTS
For the year ended August 31, 2004 and prior years, the College did not depreciate library books. This presentation was in accordance with the Texas Higher Education Coordinating Board’s reporting requirements. Accounting principles generally accepted in the United States of America require library books to be depreciated over their useful life. As a result, depreciation expense for fiscal year 2004 was understated by $130,595 and capital assets were overstated and accumulated depreciation was understated by $1,988,739. The net assets as of September 1, 2003 have been adjusted to reflect the effects of the restatement on prior years’ resulting from the depreciation of library books, to conform to accounting principles generally accepted in the United States of America. The adjustments to the net assets as of September 1, 2003 to account for foregoing previous accounting errors are as follows: Beginning Net Assets at September 1, 2003 as presented in the fiscal year 2004 Financial Statements Adjustments: Unrecorded Cumulative Depreciation for Library Books Restated Beginning Net Assets - September 1, 2003
53
$ 59,133,763 (1,858,144) $ 57,275,619
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Years Ended August 31, 2005 and 2004 For the fiscal year ended August 31, 2004, scholarship awards of $343,989 for the subsequent fiscal year were expensed, repair and maintenance expenses of $141,594 were capitalized as buildings, and revenues of $55,447 were unrecorded. These errors resulted in a net understatement of net assets by $257,842, understatement of deferred charges by $343,989, and overstatement of capital assets by $141,594 at August 31, 2004. The fiscal year 2004 financial statements have been restated to reflect the effect of these corrections. Additionally, for the year ended August 31, 2004, state appropriations were reported as operating revenues in the Statement of Revenues, Expenses and Changes in Net Assets. This presentation was in accordance with the Texas Higher Education Coordinating Board’s reporting requirements. Accounting principles generally accepted in the United States of America require state appropriations to be reported as non-operating revenues. As a result, operating revenues and cash used in operating activities were overstated and non-operating revenues and cash provided by non-capital financing activities were understated by $43,523,089 for the year ended August 31, 2004. The 2004 financial statement has been restated accordingly to correct the classification. The restatement has no effect on the net assets of the College as of August 31, 2004. Further, in the fiscal year ended August 31, 2004, outstanding checks amounting to $3,570,665 held by various vendors were reported as accrued liabilities. As a result, accrued liabilities and cash and cash equivalents were overstated by $3,570,665 at August 31, 2004. The 2004 financial statement has been restated accordingly to correct the classification. The restatement has no effect on the net assets of the College as of August 31, 2004.
26.
JOINTLY GOVERNED ORGANIZATION
The College entered into a telecommunications network interlocal agreement with the Austin Independent School District, Travis County, the State of Texas, the University of Texas System, and the City of Austin (the “Participants”) to provide a governmental communications network linking each of the Participants’ facilities. The Participants formed the Greater Austin Area Telecommunications Network Interlocal Agency to manage the network. No compensation is paid to any entity for use of the network, instead, the cost of the construction of the network and use of the network is allocated among the owners on the basis of their respective interests in the network.
27.
CONSTRUCTION COMMITMENT
The College has entered into construction commitments for various projects including the renovation of facilities and the construction of buildings. At August 31, 2005 and 2004, the outstanding commitment under construction contracts for facilities and other projects are approximately $12,073,560 and $3,465,846, respectively.
54
Schedules Required By The Texas Higher Education Coordinating Board
THIS PAGE LEFT BLANK INTENTIONALLY.
Schedule A
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF OPERATING REVENUES Year Ended August 31, 2005 (with Memorandum Totals for the Year Ended August 31, 2004)
Unrestricted Tuition: State Funded Credit Courses In District Resident Tuition Out of District Resident Tuition Non Resident Tuition TPEG - Credit (set aside)* State Funded Continuing Education TPEG - Non-Credit (set aside)* Non-state Funded Educational Programs
$
15,469,002 13,345,355 3,849,682 1,737,273 2,042,409 130,367
Total Educational Activities
Restricted
$
-
$
15,469,002 13,345,355 3,849,682 1,737,273 2,042,409 130,367
Auxiliary Enterprises
$
-
FY 2005 Total
$
15,469,002 13,345,355 3,849,682 1,737,273 2,042,409 130,367
FY 2004 Total
$
12,823,602 13,096,554 3,941,415 1,550,158 2,091,275 133,507
749,292
-
749,292
-
749,292
843,731
37,323,380
-
37,323,380
-
37,323,380
34,480,242
7,618,711 673,166
-
7,618,711 673,166
-
7,618,711 673,166
7,546,954 725,306
131,186 133,450 121,000 68,534 439,769
-
131,186 133,450 121,000 68,534 439,769
-
131,186 133,450 121,000 68,534 439,769
157,433 152,234 116,780 67,862 438,463
9,185,816
-
9,185,816
-
9,185,816
9,205,032
(2,522,252) (135,221) (5,478,996) (186,831) (147,263)
-
(2,522,252) (135,221) (5,478,996) (186,831) (147,263)
-
(2,522,252) (135,221) (5,478,996) (186,831) (147,263)
(2,170,500) (197,270) (4,980,109) (4,879) (178,509) (251,470)
Total Scholarship Allowances
(8,470,563)
-
(8,470,563)
-
(8,470,563)
(7,782,737)
Total Net Tuition and Fees
38,038,633
-
38,038,633
-
38,038,633
35,902,537
Total Tuition Fees: Building Fees Student Service Fee Laboratory Fee Out of District Fees (continuing education) Student Accident Insurance Application Fees Other Fees Parking Fees Total Fees Scholarship Allowances and Discounts: Remissions and Exemptions-state Remissions and Exemptions-local Title IV Federal Grants Other Federal Grants TPEG Awards Other State Grants
Additional Operating Revenues: Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Non-governmental Grants and Contracts Sales and Services of Educational Activities General Operating Revenues
17,782,704 2,106,340 1,190,914
17,782,704 2,106,340 1,190,914
-
17,782,704 2,106,340 1,190,914
15,725,085 1,436,864 1,592,272
-
1,013,672
1,013,672
-
1,013,672
1,157,771
1,357,879 1,660,669
-
1,357,879 1,660,669
747,264 1,658,770
25,112,178
-
25,112,178
22,318,026
351,338 116,782 480,362 586,050 1,534,532
358,955 114,382 505,253 259,015 1,237,605
1,357,879 1,660,669
Total Additional Operating Revenues
-
3,018,548
Auxiliary Enterprises: Bookstore Food Service MISC AUX Student Programs Total Net Auxiliary Enterprises Total Operating Revenues
-
22,093,630
$
41,057,181
$
22,093,630
$
63,150,811
351,338 116,782 480,362 586,050 1,534,532 $
1,534,532
$
64,685,343 (Exhibit 2)
* In accordance with Education Code 56.033, $1,867,640 and $1,683,665 for years August 31, 2005 and 2004, respectively, of tuition was set aside for Texas Public Education Grants (TPEG)
55
$
59,458,167 (Exhibit 2)
Schedule B
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF OPERATING EXPENSES BY OBJECT Year Ended August 31, 2005 (with Memorandum Totals for the Year Ended August 31, 2004) Operating Expenses Salaries
Other
FY 2005
FY 2004
Local
Expenses
Total
Total
$ 55,250,835
Benefits
and Wages
State
Unrestricted - educational activities Instruction
-
$ 1,357,728
$ 3,411,886
$ 57,878,264
778,649
-
26,167
442,903
1,247,718
1,036,939
9,722,443
-
260,214
1,072,728
11,055,385
8,425,127
Student services
10,497,511
-
264,695
1,133,413
11,895,619
10,833,508
Institutional support Operation and maintenance of plant
10,199,618
-
3,131,508
6,015,028
19,346,154
18,421,907
3,734,932
-
103,548
6,934,554
10,773,034
9,313,452
(8,470,563)
(8,470,563)
(7,782,736)
Public service Academic support
Scholarships and fellowships Total unrestricted educational activities
$ 53,108,650
88,041,804
$
-
-
-
5,143,860
10,539,949
103,725,613
95,499,032
Restricted - educational activities Instruction
1,700,075
4,941,524
202,067
1,450,893
8,294,560
7,514,243
559,981
120,690
80,348
1,094,435
1,855,453
2,166,189
36,705
879,879
683
145,284
1,062,551
750,664
Student services
202,419
964,700
38,732
192,937
1,398,788
1,276,205
Institutional support Operation and maintenance of plant
717,207
984,255
-
1,701,462
1,669,307
336,739
-
5,568
342,308
315,827
-
19,797,435
19,797,435
17,292,353
Public service Academic support
Scholarships and fellowships
-
-
-
Total restricted educational activities
3,216,387
8,227,788
321,830
22,686,553
34,452,557
30,984,788
Total educational activities
91,258,191
8,227,788
5,465,690
33,226,501
138,178,169
126,483,820
130,613
555,929
1,501,800
1,351,379
Auxiliary enterprises
815,258
-
Depreciation expense - buildings & other real estate improvements
-
-
-
2,466,625
2,466,625
2,355,457
Depreciation expense - equipment and furniture
-
-
-
3,908,028
3,908,029
4,267,519
$ 40,157,083
$ 146,054,623
$ 134,458,175
(Exhibit 2)
(Exhibit 2)
Total operating expenses
$ 92,073,449
$ 8,227,788
56
$ 5,596,302
Schedule C
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF NON-OPERATING REVENUES AND EXPENSES Year Ended August 31, 2005 (with Memorandum Totals for the Year Ended August 31, 2004)
2005 Total
2004 Total
-
$ 43,938,157 44,093,830 191,608 2,713,479 1,132
$ 43,523,089 37,138,260 76,364 1,099,650 -
15,371,405
-
90,938,206
81,837,363
2,794,238 278,526 -
4,381,974 -
-
7,176,212 278,526 -
6,537,885 688,874 29,422
3,072,764
4,381,974
-
7,454,738
7,256,181
$ 72,494,037
$ 10,989,431
-
$ 83,483,468
$ 74,581,182
(Exhibit 2)
(Exhibit 2)
Unrestricted
Restricted
$ 35,710,369 39,085,530 191,608 578,162 1,132
$ 8,227,788 5,008,300 2,135,317 -
75,566,801
Auxiliary Enterprises
NON-OPERATING REVENUES: State appropriations Maintenance ad valorem taxes Gifts Investment income Other non-operating revenue Total non-operating revenues
$
NON-OPERATING EXPENSES: Interest on capital related debt Loss on disposal of capital assets Other non-operating expense Total non-operating expenses Net non-operating revenues
57
$
Schedule D
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF NET ASSETS BY SOURCE AND AVAILABILITY Year Ended August 31, 2005 (with Memorandum Totals for the Year Ended August 31, 2004)
Current: Unrestricted Board Designated Restricted Auxiliary enterprises Loan Endowment: Quasi: Unrestricted Restricted Endowment Term (per instructions at maturity) Life income contracts Annuities Plant: Unexpended Renewals Debt service Investment in plant
Unrestricted
Detail by Source Capital Assets Net of Restricted NonDepeciation & Expendable Expendable Related Debt
$ 3,826,827
$
295,450
$
-
$
-
-
-
-
-
-
-
-
-
4,122,277
Total net assets, end of year
371,071 75,918
Available for Current Operations
Total
$ 3,826,827 371,071 295,450 75,918 -
4,500,000 -
-
49,901,716
4,500,000 49,901,716
4,946,989
-
49,901,716
58,970,982
Yes
$
No
3,826,827 371,071 295,450 75,918
4,500,000 49,901,716 4,122,277
54,848,705
3,712,613
53,144,181
409,664
$ 1,704,524
(Exhibit 1)
Total net assets, beginning of year, as restated
3,712,613
4,945,442
-
48,198,739
56,856,794 (Exhibit 1)
Net increase in net assets
$
409,664
$
1,547
$
-
$
1,702,977
$ 2,114,188 (Exhibit 2)
58
$
Statistical Section
THIS PAGE LEFT BLANK INTENTIONALLY.
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas District Expenditures by Function Last Ten Fiscal Years (Unaudited)
Fiscal Year
Instruction
Public Service
Academic Support
Student Services
Institutional Support
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03
$ 36,618,517 38,171,114 36,926,447 40,128,096 46,847,188 51,216,974 59,506,218 58,995,684 62,765,078 66,172,824
$ 2,536,101 2,078,189 1,452,162 1,815,523 2,085,477 3,689,151 3,076,583 2,784,493 3,203,128 3,103,172
$ 7,454,378 8,925,318 10,125,927 10,821,705 9,653,793 8,463,409 9,622,278 9,727,018 9,175,791 12,117,936
$ 7,751,722 7,450,797 7,406,619 6,612,442 7,172,222 10,284,139 11,144,351 11,362,565 12,109,713 13,294,407
$ 15,114,606 14,671,903 15,266,564 18,554,827 22,073,081 26,731,607 18,932,858 18,614,388 20,091,214 21,047,616
2003-04 2004-05
(1) Prior to 2000-01, depreciation was not reported.
59
Operation & Maintenance of Plant
Scholarships & Fellowships
Auxiliary Enterprises
Depreciation (1)
$ 6,671,911 5,672,023 7,591,769 8,164,236 7,041,228 7,290,986 9,178,109 9,306,817 9,629,279 11,115,342
$ 5,859,861 6,518,298 6,447,743 6,784,934 8,375,897 8,918,401 6,211,867 8,244,039 9,509,617 11,326,872
$
$
837,307 815,784 863,491 1,087,020 1,237,656 1,298,329 1,054,475 1,092,980 1,351,379 1,501,800
5,885,263 7,702,013 6,622,976 6,374,654
60
Totals $ 82,844,403 84,303,426 86,080,722 93,968,783 104,486,542 117,892,996 124,612,002 127,829,997 134,458,175 146,054,623
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas District Revenues by Source (1) Last Ten Fiscal Years (Unaudited)
Local Funds
Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
State Appropriations $
34,442,383 34,219,754 39,407,630 41,678,680 41,661,283 44,375,340 47,456,842 45,355,060 43,523,089 43,938,157
Tuition & Fees (2) $
23,470,701 27,139,662 30,156,697 30,891,003 32,022,102 34,895,000 36,831,363 40,069,472 43,685,273 46,509,196
Taxes for Current Operations $
11,225,519 12,530,510 13,971,450 15,255,032 17,558,001 20,314,271 23,239,364 24,848,931 37,138,260 44,093,830
Grants & Contracts $
8,477,251 7,998,414 8,693,246 8,927,856 11,415,413 11,283,881 14,396,659 17,793,820 19,911,992 22,093,630
(1) Includes current funds: unrestricted, auxiliary, and restricted; excludes interfund transfers. (2) For consistency and comparability purposes, Tuition & Fees are reported at the gross amounts.
61
Investment Income $
1,387,161 1,623,201 1,908,965 1,470,717 1,528,238 2,519,365 998,805 605,934 1,099,650 2,713,479
Auxiliary Enterprises $
581,452 456,844 118,861 669,891 749,765 808,838 856,724 1,243,731 1,237,605 1,534,532
Miscellaneous Revenue $
1,278,808 1,452,388 2,647,918 2,092,876 2,858,883 4,617,462 3,495,573 2,927,863 2,482,399 3,211,288
62
Totals $
80,863,275 85,420,773 96,904,767 100,986,055 107,793,685 118,814,157 127,275,330 132,844,811 149,078,268 164,094,112
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Property Tax Levies and Collections Last Ten Fiscal Years (Unaudited)
Fiscal Year
Total Tax Levy
Current Tax Collections
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03
$ 11,195,638 12,563,735 14,024,231 15,344,999 17,851,744 20,570,618 23,323,424 24,862,927 37,320,634 44,344,879
$ 11,034,888 12,367,852 13,811,403 15,052,022 17,290,021 20,053,829 22,881,139 24,492,541 36,839,696 43,562,279
2003-04 2004-05
Percent of Current Tax Levy Collected 98.56 98.44 98.48 98.09 96.85 97.49 98.10 98.51 98.71 98.24
%
Delinquent Tax Collections $
Source: Tax Assessors/Collectors for Travis and Williamson Counties.
63
190,631 162,658 160,047 203,011 257,240 246,396 247,301 356,390 298,564 531,551
Total Tax Collections $ 11,225,519 12,530,510 13,971,450 15,255,033 17,547,261 20,300,225 23,128,440 24,848,931 37,138,260 44,093,830
Percent of Total Tax Collections to Tax Levy 100.27 99.74 99.62 99.41 98.29 98.69 99.16 99.94 99.51 99.43
%
Outstanding Delinquent Taxes $
628,532 613,272 692,904 851,837 758,577 827,489 938,299 1,037,338 1,179,315 1,280,066
Percent of Delinquent Taxes to Tax Levy 5.61 4.88 4.94 5.55 4.25 4.02 4.02 4.17 3.16 2.89
64
%
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Assessed and Net Assessed Value of Property Last Ten Fiscal Years (Unaudited)
Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04* 2004-05*
Assessed Valuation of Property $ 26,092,106,060 28,846,711,453 30,372,110,983 33,343,007,655 38,032,496,959 45,105,977,543 52,283,006,948 55,100,463,369 52,270,532,903 53,865,245,581
Less Exemptions $
2,587,408,765 2,795,814,581 2,314,606,796 2,636,781,604 2,954,045,350 4,233,519,671 5,685,074,171 5,472,322,855 3,865,040,772 4,593,157,293
Net Assessed Valuation
Ratio of Net Assessed Value to Assessed Value
$ 23,504,697,295 26,050,896,872 28,057,504,187 30,706,226,051 35,078,451,609 40,872,457,872 46,597,932,777 49,628,140,514 48,405,492,131 49,272,088,288
90.08 90.31 92.38 92.09 92.23 90.61 89.13 90.07 92.61 91.47
Source:
Texas State Comptroller for all years except 2003-04 and 2004-05.
* Source:
Travis and Williamson County Appraisal Districts for 2003-04.
65
%
THIS PAGE LEFT BLANK INTENTIONALLY.
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Property Tax Rates - Direct and Overlapping (Per $100 of Assessed Value) Last Ten Fiscal Years (Unaudited)
Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04* 2004-05*
Austin Community College District 0.050000 0.050000 0.050000 0.050000 0.050000 0.050000 0.050000 0.050000 0.077100 0.090000
Counties (Average) 0.403850 0.408100 0.419900 0.430150 0.423200 0.431000 0.420645 0.462150 0.470015 0.483026
Cities (Average) 0.447556 0.459083 0.472261 0.493613 0.486792 0.501500 0.534126 0.562778 0.530824 0.516319
Source: Texas State Comptroller for all years except 2003-04, 2004-05. * Source: Travis and Williamson County Appraisal Districts.
66
School Districts (Average) 1.336600 1.383000 1.475500 1.529450 1.623443 1.548890 1.631333 1.677500 1.724267 1.746400
Municipal Utility Districts (Average)
Emergency Services District (Average)
Water Control & Improvement Districts (Average)
0.653371 0.718811 0.749444 0.743778 0.700833 0.686514 0.692036 0.639236 0.629064 0.622727
0.084000 0.089280 0.095420 0.098980 0.100000 0.094167 0.092633 0.094667 0.094983 0.099817
0.182600 0.128200 0.361300 0.331400 0.323500 0.395080 0.560200 0.553120 0.540840 0.689550
67
Road Districts (Average) 0.354100 0.350000 0.270000 0.250000 0.224800 0.160000 0.164600 0.212500 0.220500 0.227500
Totals 3.512077 3.586474 3.893825 3.927371 3.932568 3.867151 4.145573 4.251951 4.287593 4.475339
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Principal Taxpayers August 31, 2005 (Unaudited)
Taxpayer
Type of Business
Motorola
Manufacturing
Applied Materials, Inc.
2004 Net (Taxable) Assessed Value 369,900,365
0.75
Manufacturing
362,318,471
0.74
Freescale Semiconductor
Manufacturing
283,805,080
0.58
Samsung Austin
Manufacturing
223,152,981
0.45
Telephone Utility
203,139,990
0.41
IBM Corporation *
Manufacturing
163,209,270
0.33
IBM Corporation *
Manufacturing
114,230,000
0.23
National Instruments Corporation
Manufacturing
101,732,172
0.21
Cable Communications
93,494,370
0.19
Manufacturing
78,944,960
0.16 4.05
Southwestern Bell Telephone
Time Warner Entertainment Minnesota Mining & Manufacturing
$
Percentage of Total Net Assessed Value
Totals
$
1,993,927,659
Total Net Assessed Value
$
49,272,088,288
Source: Travis County Appraisal District * Note: IBM is listed as the taxpayer on two separate accounts on the appraisal district's records and may be separate corporations.
68
%
%
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Computation of Legal Debt Margin August 31, 2005 (Unaudited)
The amount of the District's bond debt is limited by state statute to the extent that annual bond taxes shall never exceed 50 cents on the $100 valuation of taxable property in the District. The District's interest amd sinking fund tax rate for the fiscal year ending August 31, 2005, was established at $0.0100 per $100 valuation of property in the District.
69
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Ad Valorem Tax Rates Authorized and Assessed Last Ten Fiscal Years (Unaudited)
Annual ad valorem taxes are levied on each $100 valuation of taxable property
Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Rate for Current Operations
Authorized Rate for Debt Service
Total Rate Authorized
0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0700 0.0800
0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0071 0.0100
0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0771 0.0900
70
Rate for Current Operations
Assessed Rate for Debt Service
Total Rate Assessed
0.0476 0.0482 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0700 0.0800
0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0071 0.0100
0.0476 0.0482 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0771 0.0900
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Ratio of Bonded General Obligation Debt to Assessed Value, and Bonded Debt per Capita (Unaudited)
Fiscal Year
Population (1)
Net Assessed Value (2)
Bonded Tax Debt
2002-03 2003-04 2004-05
1,339,528 1,395,260 1,426,251
$49,628,140,514 48,405,492,131 49,272,088,288
$ 75,000,000 98,910,000 98,410,000
Ratio of Bonded Debt to Assessed Value 0.15 0.20 0.20
%
NOTE 1:
FY 2003 is the first year with information available because ACC did not have any general obligation bonds in the seven prior fiscal years.
NOTE 2:
The population figure is for the ACC service area covering all or part of 8 counties.
(1) Source:
Municipal Advisory Council of Texas, Texas Municipal Report June 28, 2004 ACC Fact Book, 2003-2004 and 2004-2005.
(2) Source:
Travis and Williamson County Appraisal Districts.
71
Bonded Debt Per Capita $
55.99 70.89 69.00
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to General Expenditures (Unaudited)
Fiscal Year 2003-04 2004-05
Principal $
500,000
Interest
Total General Obligation Debt Service
Total General Expenditures
$ 3,427,759 4,387,979
$ 3,427,759 4,887,979
$134,316,581 146,054,623
Ratio of Debt Service to Total General Expenditures 2.55 3.35
%
NOTE:
FY 2003 is the first year within the past 10 fiscal years that ACC had general obligation debt. The debt was incurred in FY 2003 and there was no payments, interest or principal, due in FY 2003. The first payments on these general obligation bonds were due in FY 2004.
Source:
Final Official Statement, June 16, 2003, Austin Community College District, Limited Tax Bonds, Series 2003.
72
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Direct and Overlapping Bonded Debt August 31, 2005 (Unaudited)
Jurisdiction District: Austin Community College District (2)
Net Bonded Debt Outstanding
Amount Applicable to District
$
$
Overlapping: Travis & Williamson Counties Cities in ACC District School Districts in ACC District Municipal Utility Districts Emergency Services Districts Water Control & Improvement Districts Road Districts
98,410,000
98,410,000
875,508,773 1,062,294,419
375,026,321 1,011,532,976
924,526,489 123,346,941 9,580,000 52,519,994 16,195,000
924,526,489 111,413,095 1,340,633 51,944,189 5,358,252 2,481,141,955
Total Direct and Overlapping Debt
$
2,579,551,955
NOTE:
If the net bonded debt outstanding was not available, the gross bonded debt outstanding was used.
Source:
Texas Bond Review Board Database.
73
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Revenue Bond Coverage Last Ten Fiscal Years (Unaudited)
Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Tuition Pledge Revenue (1)
Building Fee Revenue (2)
$
$ 3,112,517 3,541,282 3,934,567 3,907,355 4,048,353 4,048,886 4,628,996 5,139,771 5,224,814 5,274,492
905,610 963,795 953,385 996,555 1,027,403 1,024,950 1,065,285 1,110,300 1,072,785 1,188,187
Interest Earned on Investments
Total Revenue Available for Debt Service
$
$
877,364 152,901 50,404 208,176 65,710 112,864
(1) $15.00 per semester headcount, $7.50 per summer semester (2) $9.00 per credit hour
74
4,895,491 4,657,978 4,938,356 4,903,910 5,075,756 5,073,836 5,694,281 6,458,247 6,363,309 6,575,543
Principal
Interest
Total
$ 1,185,000 1,730,000 1,835,000 1,985,000 2,110,000 1,905,000 1,975,000 1,460,000 1,490,000 605,000
$ 1,842,633 1,732,999 1,537,994 1,473,971 1,355,342 2,464,450 2,641,228 2,569,981 2,499,211 2,096,113
$ 3,027,633 3,462,999 3,372,994 3,458,971 3,465,342 4,369,450 4,616,228 4,029,981 3,989,211 2,701,113
Coverage 1.62 1.35 1.46 1.42 1.46 1.16 1.23 1.60 1.60 2.43
75
%
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Student Enrollment (Unduplicated) Last Ten Fiscal Years (Unaudited)
Fiscal Year
Unduplicated Headcounts (Academic Only)
State Allocations per FTSE (Academic and Vocational Technical)
Contact Hours (Academic and Vocational Technical)
1995-96
45,914
1,763
9,798,503
1996-97
46,663
1,727
9,859,391
1997-98
46,530
2,028
9,861,815
1998-99
46,966
2,083
9,905,448
1999-00
47,582
2,069
9,818,666
2000-01
49,140
2,055
10,212,520
2001-02
52,296
2,034
11,054,906
2002-03
53,403
1,828
11,314,647
2003-04
52,687
1,795
11,624,566
2004-05
53,228
1,786
11,621,183
Source: ACC's Office of Institutional Effectiveness
76
THIS PAGE LEFT BLANK INTENTIONALLY
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Student Enrollment Demographics Last Ten Fiscal Years (Unaudited)
Residency Status Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Average Student Age
In-State
27 26 26 26 26 26 25 25 25.5 25.6
96.38 % 96.31 95.97 95.73 95.16 95.59 94.68 94.74 94.38 93.99
Out-of-State 1.28 1.40 1.50 1.67 2.14 1.43 2.03 1.96 2.04 2.26
%
Gender
Foreign
Female
Male
2.34 % 2.29 2.52 2.59 2.70 2.98 3.29 3.30 3.58 3.75
54.53 % 54.16 54.45 54.38 54.93 55.24 55.57 56.17 56.93 57.45
45.47 % 45.84 45.55 45.62 45.07 44.76 44.43 43.83 43.07 42.55
(1) Source: Texas State Auditor, Community College Data Base for all years prior to 2002-03. (2) Source: ACC's Office of Institutional Effectiveness for all year from 2002-03 forward.
77
Ethinicity African American 6.10 5.95 6.04 5.81 6.41 6.48 6.66 6.76 7.19 7.27
%
Caucasian 67.97 67.49 66.45 66.46 65.11 63.13 61.55 60.56 60.54 60.39
%
Hispanic
Other
17.26 % 17.85 18.42 18.62 18.82 19.13 19.69 20.02 20.79 21.75
8.67 % 8.72 9.10 9.12 9.66 11.27 12.10 12.66 11.48 10.59
78
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Tuition and Fee Schedule Last Ten Fiscal Years (Unaudited)
Fees per Semester
Fees per Credit Hour Increase from Prior Year
Registration (1) & Student Activity Fees (2)
In-District Tuition
Building Fees & Tech Fees (1)
Student Activity Fees (2)
Cost for 12 Credit Hours
$
18.00
$ 20.00
$
$
-
$ 354.00
0.00
1996-97
28.00
23.00
10.00
-
424.00
19.77
1997-98
28.00
24.00
14.00
-
484.00
14.15
1998-99
28.00
24.00
14.00
-
484.00
0.00
1999-00
28.00
24.00
14.00
-
484.00
0.00
2000-01
3.00
33.00
11.00
-
531.00
9.71
2001-02
3.00
32.00
11.00
-
519.00
-2.26
2002-03
3.00
32.00
12.00
-
531.00
2.31
2003-04
3.00
34.00
13.00
-
567.00
6.78
2004-05
-
39.00
13.00
1.00
636.00
12.17
Fiscal Year 1995-96
NOTE:
8.00
This table reflects the rates from the Fall semester of each fiscal year. This was done for comparability and consistency.
(1) For fiscal years subsequent to 1999-00, the registration and tech fees are included in the tuition rate. (2) Starting in the 2004 Fall semester, student activity fees are charged at a rate per credit hour rather than a set fee per semester. In addition to the above, various fees from $8 to $160 may be required.
79
%
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas 2005 Faculty Statistics (1) August 31, 2005 (Unaudited)
Number of Full Time Faculty (includes Counselors & Librarians) Number of Part Time Faculty Total Faculty
448 1,040 1,488
Full Time Faculty
Part Time Faculty
Gender: Female Male
52.68 47.32
%
45.29 54.71
%
47.51 52.49
%
Age: 35 and Under 36 to 50 51 to 64 65 and Over
7.14 33.48 56.92 2.46
%
14.33 36.92 39.62 9.13
%
12.16 35.89 44.83 7.12
%
29.02 57.37 13.17 0.45
%
18.85 58.56 20.67 1.92
%
21.91 58.20 18.41 1.48
%
Highest Degree Earned (2): Doctorate Master's Bachelor's/Associate's No Degree
(1) Source: ACC's Office of Institutional Effectiveness (2) Source: ACC's Human Resources
80
Percentage of Total Faculty
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Demographic Statistics Last Ten Fiscal Years (Unaudited)
Fiscal Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Population (Travis County) (1) 696,278 717,194 736,587 761,335 788,500 820,123 845,955 850,813 857,204 869,868
Per Capita Personal Income (Travis County) (2) $
23,844 24,864 27,072 30,783 33,183 35,351 35,267 35,492 34,439 *Unavailable
Travis County Unemployment Rate (3) 3.3 3.5 3.4 3.0 2.4 2.2 4.7 6.4 4.9 4.3
National Unemployment Rate (3)
%
(1) Source: U.S. Census Bureau, U.S. Department of Commerce (2) Source: Bureau of Economic Analysis, U.S. Department of Commerce (3) Source: Texas Labor Market Information, Texas Workforce Commission
81
5.9 5.6 5.0 4.7 4.5 4.2 4.7 5.9 6.3 5.7
%
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas Miscellaneous Statistics August 31, 2005 (Unaudited)
Date of Formation Form of Government
1973 A political subdivision of the State of Texas governed by a nine-member Board of Trustees.
Area of District
786 Square Miles
Most Recent Bond Ratings Moody's Investors Service (1)
Aaa
Standard & Poor's Corporation (1)
AAA
Fitch Ratings, Inc. (2)
AAA
The District has no authorized but unissued bonds. Accredited by:
Commission on Colleges of the Southern Association of Colleges and Schools.
(1) Source: Final Official Statement, March 2005, Combined Fee Revenue Refunding Bonds, Series 2005. (2) Source: Fitch Ratings web site, U.S. Public Finance, Issuer: Austin Community College District (TX), Combined Fee Revune Refunding Bonds, Series 2005.
82
THIS PAGE LEFT BLANK INTENTIONALLY.
Federal Single Audit Section
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED AND IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Trustees Austin Community College District
We have audited the financial statements of Austin Community College District (the “College”) as of and for the year ended August 31, 2005, and have issued our report thereon dated November 11, 2005. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered College’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether College’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including compliance with the State of Texas Public Funds Investment Act, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. However, we noted other matters that we reported to management of the College, in a separate letter dated November 11, 2005.
This report is intended solely for the information and use of the Board of Trustees, the College’s management, and Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Houston, Texas November 11, 2005
84
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
To the Board of Trustees Austin Community College District Compliance We have audited the compliance of Austin Community College District (the “College”) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended August 31, 2005 . The College’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the College’s management. Our responsibility is to express an opinion on the College’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the College’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the College’s compliance with those requirements. In our opinion, Austin Community College District complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended August 31, 2005. Internal Control Over Compliance The management of the College is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered the College’s internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the Board of Trustees, the College’s management, and Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Houston, Texas November 11, 2005
86
Schedule E
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended August 31, 2005 Federal CFDA Number
Federal Grantor/Pass Through Grantor/ Program Title U.S. Department of Education Direct Programs: SEOG Federal College Workstudy Program Federal Pell Grant North American Mobility in Higher Education Business without Borders Educate Tomorrows IBL Cool Program Pass-Through From: Texas Education Agency: Adult Basic Education Texas Higher Education Coordinating Board Carl Perkins Vocational Education - Basic Carl Perkins Vocational Education - Leadership Total for Carl Perkins Vocational Education Leveraging Educational Assistance Partnerships Carl Perkins Tech Prep Program Pass-Through From: University of Arkansas at Little Rock Interpreter Education
Pass-Through Grantor's Number
Expenditures and Pass Through Disbursements
84.007 84.033 84.063 84.116 84.153 84.153A 84.350B
P116N000006
84.002
54100017110009
861,207
84.048 84.048
54205 51406
787,897 78,385 866,282
84.069A 84.243
51704
84.160
H160A50023
P007A043960
$
P033A043960 P063P043500 P153A020056 P153A040035 U350B040015
598,393 515,488 13,664,695 111,819 51,828 63,269 76,858
18,067 425,525
N/A
1,000
Total Department of Education
17,254,431
U.S. Department of Labor Education and Human Resources
17.260
186,435
N/A
Total Department of Labor
186,435
National Science Foundation Direct Programs: Education and Human Resources Pass Through From: Texas Tech University Alliance for Innovative Nursing Education
47.076
N/A
47.076
N/A
260,850
14,788
Total National Science Foundation
275,638
Department of Health and Human Services Pass Through From: Texas Education Agency Temporary Assistance for Needy Families
93.558
66,200
53625017110008
Total U.S. Department of Health and Human Services
66,200
Total Federal Financial Assistance
$
17,782,704
The Notes to the Schedule of Expenditures of Federal Awards are an Integral part of this statement.
87
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended August 31, 2005
Note 1:
Federal Assistance Reconciliation
Federal Grants and Contracts revenue - per Schedule A
$
17,782,704
Total Federal Revenues per Schedule of Expenditures of Federal Awards
$
17,782,704
Note 2:
Significant Accounting Policies used in Preparing the Schedule
The expenditures included in the schedule are reported for the college's fiscal year. Expenditure reports to funding agencies are prepared on the award period basis. The expenditures reported above represent funds that have been expended by the college for the purposes of the award. The expenditures reported above may not have been reimbursed by the funding agencies as of the end of the fiscal year. Some amounts reported in the schedule may differ from amounts used in the preparation of the basic financial statements. Separate accounts are maintained for the different awards to aid in the observance of limitations and restrictions imposed by the funding agencies. The college has followed all applicable guidelines issued by various entities in the preparation of the schedule.
Note 3:
Expenditures not Subject to Federal Single Audit
None
Note 4:
Student Loans Processed and Administrative Costs Recovered - not included in schedule
Federal Grantor CFDA Number /Program Name
New Loans Processed
Administrative Cost Recovered
Total Loans Processed & Admin. Cost Recovered
U.S. Department of Education 84.032 Federal Family Education Loan Program
$ 14,582,751
$
-
$
14,582,751
Total Department of Education
$ 14,582,751
$
-
$
14,582,751
88
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended August 31, 2005
Note 5: Amounts passed through by the College The following amounts were passed-through to the listed subrecipients by the college. These amounts were from the Tech-Prep education program CFDA #84.243 from U S Department of Education, through the Texas Higher Education Coordinating Board. Austin Independent School District Bastrop Independent School District Burnet Independent School District Del Valle Independent School District Eanes Independent School District Elgin Independent School District Florence Independent School District Georgetown Independent School District Hays Independent School District Hutto Independent School District Jerrell Independent School District Lago Vista Independent School District Leander Independent School District Liberty Hill Independent School District Manor Independent School District Pflugerville Independent School District Round Rock Independent School District Thrall Independent School District Total amount passed-through
89
$
44,437 7,452 3,367 4,143 4,125 3,717 3,598 11,488 7,355 1,643 3,322 3,434 9,404 3,602 3,527 11,883 21,129 3,073
$
150,699
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS For The Year Ended August 31, 2005
SECTION 1: SUMMARY OF AUDITORS’ RESULTS Financial Statements:
Type of auditors’ report issued:
Unqualified
Internal control over financial reporting: a) Material weakness identified? b) Reportable conditions identified that are not considered to be material weaknesses? c) Noncompliance material to financial statements noted?
No None Reported No
Federal Awards: Internal control over major programs: a) Material weakness identified? b) Reportable condition identified that are not considered to be material weakness?
No
Type of auditors’ report issued on compliance for major programs:
Unqualified
Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133?
No
No
Identification of Major Programs: Federal - CFDA Number
Name of Federal Program or Cluster
84.007 84.032 84.033 84.063
Federal Supplemental Educational Opportunity Grants Federal Family Education Loan Program Federal Work Study Program Federal Pell Grant Program
90
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS For The Year Ended August 31, 2005 Identification of Major Programs (contd.): Federal - CFDA Number
Name of Federal Program or Cluster
84.048 84.243
Carl Perkins Vocational Education – Basic Carl Perkins Tech Prep Program
Dollar threshold used to distinguish between type A and type B programs:
$682,000
Auditee qualified as low-risk auditee under OMB Circular A-133, Section 530?
Yes
91
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF FEDERAL FINDINGS AND QUESTIONED COSTS For The Year Ended August 31, 2005
SECTION 2: FINDINGS-FINANCIAL STATEMENT AUDIT None reported. SECTION 3: FINDINGS AND QUESTIONED COSTS-MAJOR FEDERAL AWARD PROGRAMS None reported
92
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF FEDERAL PRIOR YEAR AUDIT FINDINGS For The Year Ended August 31, 2005
Prior Year Findings: There were no audit findings included in the August 31, 2004 Schedule of Findings and Questioned Costs relative to Federal Awards.
93
THIS PAGE LEFT BLANK INTENTIONALLY.
State Single Audit Section
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR STATE PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE STATE OF TEXAS SINGLE AUDIT CIRCULAR
To the Board of Trustees Austin Community College District Compliance We have audited the compliance of Austin Community College District (the “College”) with the types of compliance requirements described in the “State of Texas Single Audit circular” that are applicable to each of its major federal programs for the year ended August 31, 2005. The College’s major state programs are identified in the summary of auditor’s results section of the accompanying Schedule of State findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the College’s management. Our responsibility is to express an opinion on the College’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the “State of Texas Single Audit Circular”. Those standards and Circular require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major state program occurred. An audit includes examining, on a test basis, evidence about the College’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the College’s compliance with those requirements. In our opinion, Austin Community College District complied, in all material respects, with the requirements referred to above that are applicable to each of its major state programs for the year ended August 31, 2005. Internal Control Over Compliance The management of the College is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to state programs. In planning and performing our audit, we considered the College’s internal control over compliance with requirements that could have a direct and material effect on a major state program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with the Circular.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that would be material in relation to a major state program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the Board of Trustees, the College’s management, and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Houston, Texas November 11, 2005
95
SCHEDULE F
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF EXPENDITURES OF STATE AWARDS Year Ended August 31, 2005
Grantor Agency/Program Title
Grant Contract Number
Texas Higher Education Coordinating Board Virtural College of Texas 04 (MLAB) Virtural College of Texas Collaborative Texas Grant Fund Texas Grant I PSIG Texas College Work Study Nursing Pride Category C ADN Biology Modules Category B Go Center Be On Time Loan Professional Nursing Scholarship Vocational Nursing Scholarhsip Total of Texas Higher Education Coordinating Board Texas Education Agency Adult Education Temporary Assistance for Needy Families/Sate Total of Texas Education Agency
CCS3 BCS9
-
050100017110009 050110017110008
Texas LEOSE Law Enforcement Ed Texas Workforce Commission Assembler Training (Skills Development Fund) Automotive Total Texas Workforce Commission
-
1404SDF001 1405SSF000
WorkSource SMART: GED to Employment
-
TOTAL EXPENDITURES OF STATE AWARDS
Expenditures
PassThrough To
Total Expenditures
$
$
$
179,027 36,513 436,801 105,184 17,336 47,973 142,294 14,841 9,987 1,232 4,300 924 996,412
400,212
579,239 36,513 436,801 105,184 17,336 47,973 142,294 14,841 9,987 1,232 4,300 924 1,396,624
132,379 33,936 166,315
-
132,379 33,936 166,315
5,568
-
5,568
163,832 162,971 326,803
195,550 195,550
15,480 $ 1,510,578
96
400,212 -
$
595,762
359,382 162,971 522,353
15,480 $ 2,106,340
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE SCHEDULE OF EXPENDITURES OF STATE AWARDS Year Ended August 31, 2005
Note 1:
Note 2:
State Assistance Reconciliation State Expenditures Per the Schedule of Expenditures of State Awards (Schedule F) Reconciling Items
$ 2,106,340 -
Total State Revenues - per Schedule A
$ 2,106,340
Significant Accounting Policies Used in Preparing the Schedule
The accompanying schedule is presented using the accrual basis of accounting. See Note 2 to the financial statements for the Austin Community College's significant accounting policies. These expenditures are reported on Austin Community College's fiscal year. Expenditure reports to funding agencies are prepared on the award period basis.
Note 3:
Amount Passed-Through by the College
The following amounts for the Assembler Training - Business Grant, received from the Texas Workforce Commission were passed-through by the College to the following sub-recipients: Southwest Research Institute Teamsource Technical Services
$
169,400 26,150
Total
$
195,550
97
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas NOTES TO THE SCHEDULE OF EXPENDITURES OF STATE AWARDS Year Ended August 31, 2005
The following amounts for the Virtual College of Texas – Business Grants, received from the Texas Higher Education Coordinating Board were passed-through by the College to the following sub-recipients: Brazosport College Dallas County Community College District Eastfield College Lonestar Learning & Research Network Medical Laboratory Medical Laboratory Technology McLennan Community College North Harris Montgomery College North Lake College Northeast Texas Community College Panola College Texas State Technical College Tyler Junor College VCT - Oracle
$
42,894 6,223 72,147 20,000 1,970 35,115 24,540 68,112 21,704 7,418 42,500 37,000 18,730 1,860
Total
$
400,212
98
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF STATE FINDINGS AND QUESTIONED COSTS For The Year Ended August 31, 2005
SECTION 1: SUMMARY OF AUDITORS’ RESULTS Financial Statements:
Type of auditors’ report issued:
Unqualified
Internal control over financial reporting: a. Material weakness identified? b. Reportable conditions identified that are not considered to be material weaknesses? c. Noncompliance material to financial statements noted?
No None Reported No
State Awards: Internal control over major programs: a. Material weakness identified? b. Reportable condition identified that are not considered to be material weakness?
No
Type of auditors’ report issued on compliance for major programs:
Unqualified
Any audit findings disclosed that are required to be reported in accordance with section 510(a) of the State of Texas Single Audit Circular?
No
No
Identification of Major Programs: Grant Number
Name of State Program
None
The Texas Grant Fund
Dollar threshold used to distinguish between type A and type B programs:
$300,000
Auditee qualified as low-risk auditee under State of Texas Audit Circular?
Yes
99
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF STATE FINDINGS AND QUESTIONED COSTS For The Year Ended August 31, 2005
SECTION 2: FINDINGS-FINANCIAL STATEMENT AUDIT None reported. SECTION 3: STATE AWARDS FINDINGS AND QUESTIONED COSTS None reported
100
AUSTIN COMMUNITY COLLEGE DISTRICT Austin, Texas SCHEDULE OF STATE PRIOR YEAR AUDIT FINDINGS For The Year Ended August 31, 2005
Prior Year Findings: There were no audit findings included in the August 31, 2004 Findings and Questioned Costs relative to State of Texas Awards.
101
Austin Community College District Business Services 5930 Middle Fiskville Road Austin, Texas 78752
