CORE REQUIREMENT CR 11:

The institution demonstrates that it has a sound financial base and financial stability, and adequate physical resources to support the mission of the institution and the scope of its programs and services. The institution provides the following financial statements: (a) an institutional audit (as distinct from a system wide or statewide audit) and management letter for the most recent fiscal year prepared by an independent certified public accountant or an appropriate auditing agency employing the appropriate audit guide; (b) an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board; and (c) a schedule of changes in unrestricted net assets, excluding plant and plant related-debt (short and long-term debt attached to physical assets).

Collin County Community College District (CCCCD) adheres to sound financial planning and practices to ensure financial stability. The District’s headcount has increased rapidly since its inception in 1985, with enrollment for Fall 2003 increasing 4.9% over Fall of 2002. The expectation is for similar growth over the next 2-3 years.

Finances

The CCCCD Board of Trustees policy requires, as a minimum fund balance, 25% of the current year budgeted Unrestricted Total Educational and General Expenditures, excluding Auxiliary, Grants and Contracts, Non-mandatory Transfers, Contingency, Renewal and Replacement, and Stabilization of Maintenance and Operations, be held in reserve (Reference 1). Reflecting the investment community’s increasing confidence in the financial status of CCCCD, Standard and Poors Corporation and Moody’s Investors Service, Inc., upgraded CCCCD to the AAA/Aaa rating respectively on $20 million Limited Tax Improvement Bonds, Series 2002. This rating is the highest available, and only 15 such rated political subdivisions exist among all of the counties, cities, school districts, and community colleges in the state of Texas.

Financial Reports

The Collin County Community College District (CCCCD) issues a Comprehensive Annual Financial Report (CAFR) at the end of each fiscal year, which is audited by an external audit firm, currently KPMG LLP (References 2, 3, 4). The external audit firm issues a management letter as part of the annual audit (References 5, 6, 7). In addition to the Independent Auditors’ Report and Management’s Discussion and Analysis, the CAFR also includes the Basic Financial Statements (Statement of Net Assets, Statement of Revenues, Expenses and Changes in Net Assets, and Statement of Cash Flows, and Notes to Financial Statements), the Texas Higher Education Coordinating Board (THECB) Supplemental Schedules (Schedule of Detailed Operating Revenues, Schedule of Operating Expenses and Capital Outlay by Function & Natural Classifications, and Schedule of Discounted Tuition, Fees, and Other Student Charges).

For the past six years CCCCD has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada for achievement of the highest standards in government accounting and financial reporting.

In addition to the District’s Comprehensive Annual Financial Report (CAFR) the following schedules (for the three fiscal years, 2001, 2002 and 2003) substantiate the District’s sound financial base and financial stability.

• Statement of Net Assets (Reference 8)
• Schedule of Fund Assets and Liabilities (Unrestricted and Auxiliary Funds) – unaudited (Reference 9)
• Schedule of Current Funds Revenue, Expenditures and other changes – unaudited (Reference 10)
• Statement of Net Assets (Restricted and Unrestricted Net Assets) – unaudited (Reference 11)
• Statement of Net Assets for Unrestricted and Auxiliary – unaudited (Reference 12)

Resources

The District has adequate physical resources, as evidenced by three campuses and The Center for Professional and Economic Development, totaling approximately 995,000 square feet and 332 acres. Classroom and laboratory requirements are reviewed and expanded as necessary to meet enrollment growth. The District is currently involved in major expansion programs at the Preston Ridge and Spring Creek Campuses.

Budget Development

The CCCCD budget development process is outlined in the Budget Development Manual for 2003-2004 (Reference 13). Budget Development training workshops are held during the year, and department heads are required to attend prior to the development of the budget. The Institutional Effectiveness and the Strategic Goals of CCCCD were the foundation emphasis for the budget preparation process for 2003 – 2004.

The budget development process begins with each cost center manager receiving a base allocation. The original allocations are developed to support the District’s mission and strategic goals. The Technology Planning Equipment Replacement Plan provides the schedule for the replacement of instructional personal computers and related equipment (Reference 14). Funds are also set aside for the renewal and replacement of facilities and equipment in accordance with the Facilities Renewal and Replacement Schedule (Reference 15). Budget Hearings are held in June of each fiscal year, and all budget items are reviewed and justified with each department head (References 16, 17, 18, 19). The Board of Trustees Budget Committee reviews the budget, and a recommendation is then made to the CCCCD Board for approval. Upon approval from the Board of Trustees, the approved Budget is distributed to the cost center managers (References 20, 21, 22).

Additional budget training is required of staff during the budget year, including Budgeting Adjustment Training. The responsible Dean or Department Head must approve all budget modifications. The system also checks for availability of funds prior to transfer, reallocation, or decreases in budgeted accounts. A midyear budget is established and approved by the Board of Trustees allowing revisions to be made to the original budget. Budget variances are investigated and corrected monthly by the cost center managers and the Business Office.

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