Council of County Colleges

Transcription

1 Report of Audit on the Financial Statements of the New Jersey Council of County Colleges for the Year Ended June 30, 2016

2 NEW JERSEY COUNCIL OF COUNTY COLLEGES INDEX PAGE NUMBER FINANCIAL SECTION Independent Auditor's Report 1-2 EXHIBITS "A" - Statement of Financial Position as of June 30, 2016 "B" - Statement of Activities for the Year Ended June 30, 2016 "C" - Statement of Cash Flows for the Year Ended June 30, 2016 Notes to Financial Statements - June 30, SCHEDULES "1" - Schedule of Financial Position for the Year Ended June 30, "2" - Schedule of Activities for the Year Ended June 30, SINGLE AUDIT SECTION Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report on Compliance with Requirements Applicable to Each Major and State Federal Assistance Programs and Internal Control Over Compliance in Accordance with OMB Uniform Guidance and New Jersey OMB Circular SCHEDULES "3" - Schedule of Expenditures of Federal Awards for the Year Ended June 30, 2016 "4" - Schedule of Expenditures of State Awards for the Year Ended June 30,

3 NEW JERSEY COUNCIL OF COUNTY COLLEGES IN DEX PAGE NUMBER Notes to the Schedules of Expenditures of Federal Awards and State Financial Assistance for the Year Ended June 30, Schedule of Findings and Questioned Costs for the Year Ended June 30, 2016 Schedule of Prior Audit Findings for the Year Ended June 30,

4 SuPLEE, CLOONEY & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 308 East Broad Street, Westfield, New Jersey Telephone Fax E mail info@scnco.com INDEPENDENT AUDITOR'S REPORT Council Members New Jersey Council of County Colleges 330 West State Street Trenton, New Jersey Report on the Financial Statements We have audited the accompanying financial statements of the of the New Jersey Council of County Colleges as of and for the year ended June 30, 2016 and the related notes to the financial statements, which collectively comprise the New Jersey Council of County Colleges basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. 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 and the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and State of New Jersey OMB Circular "Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid." Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 1

5 SuPLEE, CLoONEY & COMPANY We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the New Jersey Council of County Colleges as of June 30, 2016 and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 10, 2017 on our consideration of the New Jersey Council of Couhty Colleges internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the New Jersey Council of County Colleges internal control over financial reporting and compliance. Other Matters Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the New Jersey Council of County College's basic financial statements. The accompanying supplementary information schedules and the Schedules of Expenditures of Federal Awards and State Financial Assistance, as listed in the table of contents, as required by the Uniform Guidance, and New Jersey's OMB Circular 15-08, "Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid,", are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying supplementary information schedules and the Schedules of Expenditures of Federal Awards and State Financial Assistance, as listed in the table of contents, as required by the Uniform Guidance, and New Jersey's OMB Circular 15-08, "Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid," is the responsibility of management and was derived from and relates directly to the underlying accounti~g and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. February 10,

6 EXHIBIT"A" NEW JERSEY COUNCIL OF COUNTY COLLEGES STATEMENT OF FINANCIAL POSITION JUNE ASSETS Current Assets: Cash Investments Grants and Other Receivables Prepaid Expenses Other Best Pratice Conference $ ,084,665 1,700,009 2,027,795 46,908 23,671 4,883,049 Property and Equipment, Net TOTAL ASSETS New Jersey Council of County Colleges-Operations $ 218,574 5,101,623 LIABILITIES AND NET ASSETS Liabilities: Accounts Payable Accrued Expenses Leases Payable Deferred Revenue Total Liabilities $ 250,332 1,595,905 1, ,953 2,480, 105 Net Assets: Unrestricted Temporarily Restricted Total Net Assets 2,602,085 19,433 2,621,518 TOTAL LIABILITIES AND NET ASSETS $ 5,101,623 The accompanying Notes to Financial Statements are an integral part of this statement. 3

7 EXHIBIT "B" NEW JERSEY COUNCIL OF COUNTY COLLEGES STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, Temporarily Unrestricted Restricted Total Support and Revenues: Membership Assessments $ 1,173,000 $ 1,173,000 Grant Income 6,593,887 6,593,887 Consortium Income (JPC and NJVCCC) 187, , 187 Investment Income 38,254 38,254 Contributions 36,764 1,370 38, 134 Best Pratices Conference 27,410 27,410 Release From Restriction 600 (600) Total Support and Revenues 8,057, ,057,872 Expenses: New Jersey Council of County Colleges-Operations 1,766,929 1,766,929 County College Joint Purchasing Consortium 78,238 78,238 New Jersey Virtual Community College Consortium 117, ,256 New Jersey Community College Consortium for Workforce and Economic Development 6,229,040 6,229,040 Total Expenses 8, 191,463 8,191,463 Change In Net Assets (134,361) 770 (133,591) Net Assets, Beginning of Year 2,736,446 18,663 2,755,109 Net Assets, End of Year $ 2,602,085 $ 19,433 $ 2,621,518 The accompanying Notes to Financial Statements are an integral part of this statement. 4

8 EXHIBIT"C" NEW JERSEY COUNCIL OF COUNTY COLLEGES STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2016 Cash Flows from Operating Activities: Change in net assets Cash flows from operating activities: Depreciation Realized and Unrealized Loss/ (Gain) Increase (decrease) in cash from: Grants and other receivables Prepaid Expenses Other Accounts payable and accrued expenses Deferred Revenue Leases Payable Net Cash Used By Operating Activities New Jersey Council of County Colleges-Operations Cash Flows from Investing Activities: Purchase of Investments Purchases of property and equipment Net Cash Used By Investing Activities $ (133,591) 21,399 (9,392) (674,557) 28,763 (23,671) 387,591 (205,020) (3,976) (612,454) (19,995) (10,394) (30,389) Net Decrease in Cash Cash, beginning of year Cash, end of year $ (642,843) 1,727,508 1,084,665 The accompanying Notes to Financial Statements are an integral part of this statement. 5

9 NEW JERSEY COUNCIL OF COUNTY COLLEGES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities The New Jersey Council of County Colleges (the "Council"), located in Trenton, New Jersey, was established by State Statute 18A:64A-26 on August 3, 1989, and is the successor to The County Community College President's Association of New Jersey. The Council was established for the purpose of advancing the Community Colleges of New Jersey. The Council's support is derived primarily from the nineteen community colleges within the State of New Jersey. The mission of the Workforce Consortium, which is organized under the auspices of the Council, is to maximize New Jersey community college development and delivery of customized training programs funded by the Department of Labor and private clients. Basis of Accounting The Council prepares its financial statements in accordance with generally accepted accounting principles, which involves the application of accrual accounting; consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. Financial Statement Presentation Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor imposed restrictions. Accordingly, net assets of the Council and changes therein are classified and reported as follows: Unrestricted Net Assets - Net assets that are not subject to donor-imposed stipulations. Included in unrestricted net assets are Land, Building and Equipment. Temporarily Restricted Net Assets - Net assets subject to donor-imposed stipulations that may or will be met either by actions of the Council and/or the passage of time. Permanently Restricted Net Assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Council. Generally the donors of these assets permit the Council to use all or part of the income earned on related investments for general or specific purposes. 6

10 NEW JERSEY COUNCIL OF COUNTY COLLEGES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Cash Equivalents For purposes of the statement of cash flows, the Council considers all monies in bank and highly liquid investments with maturity dates of less than three months to be cash equivalents. Accounts. Grants and Contracts Receivable The Council considers all accounts, grants and contracts receivable to be fully collectible; no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made. Investments Investments in marketable securities and debt securities in the statement of financial position are valued at their fair values based on quoted market prices or prices which are provided by investment managers that are obtained from independent sources they believe to be reliable. Realized and unrealized gains and losses are included in the statement of activities. The primary objective of the Council's investments is capital appreciation and investment return without undue exposure to risk. Investment funds are selected to support longterm goals, and provide growth of assets at a rate that will provide available funds for Council expenses as well as growth to assets. Revenue and Support Substantially all of the Council's grant revenue is from Federal and State agencies. The Council recognizes contract revenue, up to the contract ceiling, from its contracts to the extent of expenses incurred. Any of the funding sources may, at their discretion, request reimbursement for expenses or return of funds, or both, as a result of non-compliance by the Council with the terms of the grants/contracts. If these grants/contracts were terminated, there would be a material effect on the financial position and results of activities of the Council. Contributions are recognized when the donor makes a promise to give to the Council that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. 7

11 NEW JERSEY COUNCIL OF COUNTY COLLEGES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Advertising Costs It is the policy of the Council to expense advertising and marketing costs as incurred. Income Taxes The Council is a Not-For-Profit Corporation that is exempt from income taxes under Section 501 (c)(3) of the Internal Revenue Code. The most significant tax position of the Council is its assertion that it is exempt from income taxes. Other significant tax positions include its determination of whether any amounts are subject to unrelated business tax (UBIT). Management has determined the Council had no activities subject to UBIT in the years ended June 30, All significant tax positions have been considered by management and it has determined that it is more likely than not that all tax positions would be sustained upon examination by taxing authorities. The Council is required to file Form 990 (Return of Council Exempt from Income Tax} which is subject to examination by the Internal Revenue Service (IRS) up to three years from the extended due date of the tax return. The Forms 990 for 2013 through 2015 are open to examination by the IRS as of June 30, Property and Equipment Land, Buildings, Leasehold Improvements, and Equipment are stated at cost. Depreciation is based on the estimated useful life of the acquired asset, applied on a straight line basis. The estimated useful life for Building and Building Improvements is 39 years and 3-7 years for Furniture and Equipment. Deferred Revenue The Council recognizes grant and contract revenue in the period in which the related service is performed. Accordingly, deferred revenue results from grant and contract revenue received for the next fiscal period. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles includes the use of estimates that affect the financial statements. Accordingly, actual results could differ from those estimates. 8

12 NEW JERSEY COUNCIL OF COUNTY COLLEGES NOTES TO FINANCIAL STATEMENTS JUNE AND 2015 (2) CASH AND CASH EQUIVALENTS Cash and cash equivalents as of June 30, 2016 consist of: Checking Accounts Money Market Accounts $ 315, ,528 $ The Council maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. Balances on deposit are insured by the Federal Deposit Insurance Corporation in the amount of $250,000 in each bank depository. The Council has not experienced any losses in such accounts and, as such, believes it is not exposed to any significant credit risk on its cash and cash equivalents. (3) INVESTMENTS Investments are recorded at fair value. Investments at cost and fair value at June 30, 2016 are summarized as follows: Certificate of Deposit U.S. Treasury Obligations U.S. Government Agencies Equity Mutual Funds Fixed Income Mutual Funds June 30, 2016 Fair Value $ 68, , , ,410 90,502 Cost $68, , , ,533 90,230 $ $ Investments are stated at fair value and are measured as level 1 investments. The fair value of all debt and equity securities with a readily determinable fair value are based on quotations obtained from national securities exchanges (Level 1 measurements). 9

13 NEW JERSEY COUNCIL OF COUNTY COLLEGES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 (4) PROPERTY, LEASEHOLD IMPROVEMENTS AND EQUIPMENT Property, Leasehold Improvements and Equipment as of June 30, 2016 is summarized as follows: Land Building Building Improvements Furniture and Equipment Total Fixed Assets at Cost Less: Accumulated Depreciation Net Fixed Assets $ 37, , , , , ,005 $ (5) NET ASSETS RELEASED FROM RESTRICTIONS Net assets were released from donor restrictions by incurring expenses satisfying the restricted purposes or by occurrence of other events specified by donors during the year ending June 30, Restricted purpose accomplished from the following sources: Wellbrock Scholarship 2016 (6) TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets at June 30, 2016 consist of the following: 2016 Scholarships $

14 NEW JERSEY COUNCIL OF COUNTY COLLEGES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 (7) WORKFORCE CONSORTIUM BOARD DESIGNATED UNRESTRICTED NET ASSETS There were unrestricted net assets of $400,000 at June 30, 2016 that the board of the Workforce Consortium has designated for development. (8) RETIREMENT PLAN The Council sponsors a defined contribution pension plan through the Teacher's Insurance and Annuity Association - College Retirement Equities Fund. The Council contributes approximately 8% of employees' annual salaries into the fund. A supplemental annuity plan in which employees participate is also provided by the Council. The Council contributes approximately 10.5% of the Executive Director's salary plus $9,000 to the supplemental retirement plan, as well as $5,000 for the Vice President. The Executive Director of the Workforce Consortium also receives a contribution of 5% of his compensation to the supplemental plan. The total expense for the above plans amounted to $110,338 for the year ended June 30, This amount is included in the Statement of Activities in Salaries and Benefits. (9) OPERATING LEASES The Council has operating leases for office equipment which expire in Rental expense for the year ending June 30, 2016 was $3,976. Minimum future lease payments are as follows: Total $4,566 3,941 $8.507 (10) SUBSEQUENT EVENTS The Council has evaluated subsequent events occurring after the financial statement date through February 10, 2017, which is the date the financial statements were available to be issued. Based on this evaluation, the Council has determined that no subsequent events have occurred which require disclosure in the financial statements. 11

15 NEW JERSEY COUNCIL OF COUNTY COLLEGES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 (11) CONTINGENT LIABILITIES - GRANTS The Council participates in federal and state financial assistance grant programs. Entitlement to the funds is generally conditional upon compliance with terms and conditions of the grant agreements and applicable regulations, including the expenditure of funds for eligible purposes. The federal and state. grants received and expended were subject to the requirements of the Federal Uniform Grant Guidance and the requirements of the State of New Jersey OMS Circular 15-08, which mandates that grant revenues and expenditures be audited in conjunction with the Council annual audit. Findings and questioned costs, if any, relative to expenditures of federal awards and state financial assistance programs will be discussed in detail in the Schedule of Findings and Questioned Costs if applicable. In addition, these programs are also subject to compliance and financial audits by the granters or their representatives. (12) LITIGATION, CLAIMS AND CONTINGENT LIABILITIES In the ordinary conduct of its business, the Council may be a party to litigation. At June 30, 2016, in the opinion of management based upon consultation with legal counsel, there were no matters pending or threatened, which would have a material adverse effect on the financial position of the Council. 12

16 SCHEDULE "1" NEW JERSEY COUNCIL OF COUNTY COLLEGES SCHEDULE OF FINANCIAL POSITION FOR THE YEAR ENDED JUNE ASSETS New Jersey New Jersey County Virtual Council of College Joint Community County Purchasing College Colle11es Consortium Consortium New Jersey Community College Consortium For Workforce and Economic Development Eliminations Total Current Assets: Cash Investments Due From Consortium Grants and Other Receivables Prepaid Expenses Other Total Current Assets $ 958,581 $ 39,755 $ 9,055 15,295 70,685 3,756 13, 148 1,061,465 39,755 9,055 $ 77,274 1,684,714 2,024,039 33,760 23,671 3,843,459 $ 1,084,665 1,700,009 (70,685) 2,027,795 46,908 23,671 (70,685) 4,883, w Property and Equipment, Net TOTAL ASSETS 209,732 $ 1,271, 197 $ 39,755 $ 9,055 8,842 $ 3,852, ,574 $ (70,685) $ 5,101,623 LIABILITIES AND NET ASSETS Liabilities: Accounts Payable Accrued Expenses Due To NJCCC Leases Payable Deferred Revenue Total liabilities $ 84,478 $ 1,982 10,496 1, ,953 $ 727,964 _j_j_, $ $ 163,872 1,585,409 70, $ 1,820,844 $ 250,332 1,595,905 $ (70,685) 1, ,953 $ (70,685) $ 2,480,105 Net Assets: Unrestricted Temporarily Restricted 523,800 37,773 9,055 19,433 2,031,457 2,602,085 19,433 Total Net Assets 543,233 37,773 9,055 2,031,457-2,621,518 TOTAL LIABILITIES AND NET ASSETS $ 1,271, 197 $ 39,755 $ 9,055 $ 3,852,301 $ (70,685) $ 5,101,623 The accompanying Notes to Financial Statements are an integral part of this statement.

17 SCHEDULE "2" NEW JERSEY COUNCIL OF COUNTY COLLEGES SCHEDULE OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2016 _,, New Jersey New Jersey Community New Jersey County Virtual College Council of College Joint Community Consortium County Purchasing College For Workforce and Colleges Consortium Consortium Economic Development Eliminations Total Support and Revenues: Membership Assessments $ 1, 158,000 15,000 $ 1, 173,000 Grant Income 489,208 $ 6, 104,679 6,593,887 Consortium Income (JPC and NJVCCC) 70, , ,187 Investment Income 2,982 35,272 38,254 Contributions 56,134 (18,000) 38, 134 Best Practices Conference 27,410 27,410 Total Support and Revenues $ 1,733,734 $ 85,541 $ 116,646 $ 6, 139,951 (18,000) $ 8,057,872 Expenses:.;.. Salaries and Benefits $ 790,694 $ 1,492 $ 450,013 $ 1,242, 199 Grant Cost 489, ,492, ,981,660 Board Approved Disbursement 624, ,991 Contracted Services 136, , , ,632 Consortium Expense 70, , , 187 Advertising and Promotion 66, , ,577 Student Success Program 76,469 76,469 Contributions 37,234 37,234 Meetings and Conferences 53,842 1, ,274 70,986 Office Expense 25,034 9,042 34,076 Office Occupancy 25,455 35,540 {18,000) 42,995 Telephone 7,920 4,936 12,856 Travel 15,931 11,930 27,861 Dues and Subscriptions 3,720 3,720 Depreciation 18,812 2,587 21,399 Contingency 7,656 7,656 Miscellaneous 12, 146 2,915 21,904 36,965 Total Expenses $ 1,766,929 $ 78,238 $ 117,256 $ 6,247,040 $ (18,000) $ 8, 191,463 lncrease{decrease) in Net Assets (33,195) 7,303 (610) (107,089) (133,591) Net Assets Beginning of Year 576,428 30,470 9,665 2,138,546 2,755,109 Net Assets End of Year $ 543,233 $ 37,773 $ 9,055 $ 2,031,457 $ $ 2,621,518 The accompanying Notes to Financial Statements are an integral part of this statement.

18 SINGLE AUDIT SECTION

19 SuPLEE, CLoONEY & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 308 East Broad Street, Westfield, New Jersey Telephone Fax INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE,WITH GOVERNMENT AUDITING STANDARDS Council Members New Jersey Council of County Colleges 330 West State Street Trenton, New Jersey We have audited, in accordance with the 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, the financial statements of New Jersey Council of County Colleges as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Council's financial statements, and have issued our report thereon dated February 10, Internal Control Over Financial Reporting In planning and performing our audit, we considered the New Jersey Council of County Colleges internal control over financial reporting as a basis for designing our audit procedures for the purpose of expressing our opinion on the financial statements but not for the purpose of expressing an opinion on the effectiveness of the New Jersey Council of County Colleges internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the New Jersey Council of County Colleges internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Council's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 15

20 SUPLEE, CLOONEY & COMPANY Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether New Jersey Council of County Colleges financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, 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. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the New Jersey Council of County Colleges internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the New Jersey Council of County Colleges internal control and compliance. Accordingly, this communication is not suitable for any other purpose. February 10,

21 SuPLEE, CLoONEY & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 308 East Broad Street, Westfield, New,Jersey Telephone Fax INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL AND STATE FINANCIAL ASSISTANCE PROGRAMS AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH UNIFORM GUIDANCE AND NEW JERSEY OMB CIRCULAR Council Members New Jersey Council of County Colleges 330 West State Street Trenton, New Jersey Report on Compliance for Each Major Federal and State Program We have audited the New Jersey Council of County Colleges compliance with the types of compliance requirements described in the OMB Compliance Supplement and the New Jersey OMB State Grant Compliance Supplement that could have a direct and material effect on each of the New Jersey Council of County Colleges major federal and state programs for the year ended June 30, The New Jersey Council of County Colleges major federal and state programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal and state programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the New Jersey Council of County Colleges major federal and state programs based on our audit of the types of compliance requirements referred to above. 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 requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and New Jersey OMB Those standards, the Uniform Guidance and New Jersey OMB 15-08, 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 and state programs occurred. An audit includes examining, on a test basis, evidence about the New Jersey Council of County Colleges compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 17

22 SUPLEE, CLOONEY & COMPANY Opinion on Each Major Federal Program In our opinion, the New Jersey Council of County Colleges complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal and state programs for the year ended June Report on Internal Control Over Compliance Management of the New Jersey Council of County Colleges is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered New Jersey Council of County Colleges internal control over compliance with the types of requirements that could have a direct and material effect on each major federal and state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal and state programs and to test and report on internal control over compliance in accordance with the Uniform Grant Guidance and New Jersey OMB Circular15-08,, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the New Jersey Council of County Colleges internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal and state program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Grant Guidance and New Jersey OMB Circular Accordingly, this report is not suitable for any other purpose. February 10,

23 SCHEDULE "3" NEW JERSEY COUNCIL OF COUNTY COLLEGES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2016 Federal Grantor/ Pass-through Grantor/ Program Title FEDERAL CFDA NUMBER GRANT OR NUMBER GRANT PERIOD ~ IQ AWARD AMOUNT CASH RECEIPTS 2016 EXPENDITURES LOANS DISBURSED SUBRECIPIENT EXPENDITURES U.S. Department of Education: Passed Through State of New Jersey Office of the Secretary of Higher Education: College Readiness Now A 6/ /1/ ,814 U.S. Department of Labor H1-B Ready to Work Partnership Grants / / ,000,000 1,965,000 1,983,708 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 2,262,814 $ 2,281,522 $ $ _.. co

24 SCHEDULE "4" NEW JERSEY COUNCIL OF COUNTY COLLEGES SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED JUNE State Granter/ Program Title STATE ACCOUNT NUMBER GRANT PERIOD FROM TO AWARD AMOUNT CUMULATIVE CASH 2016 EXPENDITURES RECEIPTS EXPENDITURES 6/30/2016 State of NJ Department of Labor: Literacy Grant (NJBIA) 7/1/2015 6/30/2016 $ 1,273,000 $ 1,081,410 $ 1,081,410 $ 1,081,410 Literacy Grant (NJBIA) Skills4Jersey 1/30/2015 1/30/ /21/2015 1/17/ ,000 1,199,700 46,720 46, , , , ,933 State of NJ Division of Workforce Development Partnership Program (WOP): Ready to Work Partnership 711/ / , , , ,615. TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE $ 1,426, 162 $ 1,510,678 $ 2,263,958 N 0

25 NEW JERSEY COUNCIL OF COUNTY COLLEGES NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED JUNE 30, 2016 (1) GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal and state awards programs of New Jersey Council of County Colleges (the "Council"). The Council is defined in the Notes to the Council's basic financial statements. All federal and state awards received directly from federal and state agencies, as well as federal awards passed through state and local agencies, is included on the schedules of expenditures of federal awards and state financial assistance. (2) BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. (3) RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Amounts reported in the accompanying schedules agree with amounts reported in the Council's basic financial statements. (4) RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS Amounts reported in the accompanying schedules agree with the amounts reported in the related federal and state financial reports. (5) OTHER Matching contributions expended by the Council in accordance with terms of the various grants are not reported in the accompanying schedules. 21

26 NEW JERSEY COUNCIL OF COUNTY COLLEGES SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2016 Section I - Summary of Auditor's Results Financial Statements (1) Type of Auditor's Report Issued: Unmodified (2) Internal Control Over Financial Reporting: (a) Material weakness identified? (b) Significant deficiencies identified that are not considered to be material weaknesses? No No (3) Noncompliance material to the basic financial statements noted? No Federal Program(s) (1) Internal Control Over Major Federal Programs: (a) Material weakness identified? (b) Significant deficiencies identified that are not considered to be material weaknesses? (2) Type of Auditor's Report issued on compliance for major Federal program(s)? (3) Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance? No No Unmodified No (4) Identification of Major Federal Program(s): Grant Program H 1-B Ready to Work Partnership Grant CFDA No (5) Program Threshold Determination: Type A Federal Program Threshold 2! $750, Type B Federal Program Threshold< $750, (6) Auditee qualified as a low-risk auditee under Uniform Guidance? No 22

27 NEW JERSEY COUNCIL OF COUNTY COLLEGES SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2016 State Program(s) (1) Internal Control Over Major State Programs: (a) Material weakness identified? (b) Significant deficiencies identified that are not considered to be material weaknesses? (2) Type of Auditor's Report issued on compliance for major state program(s)? (3) Any audit findings disclosed that are required to be reported in accordance with N.J. OMB Circular 15-08? No No Unmodified No (4) Identification of Major State Program(s): Program Identification Number Literacy Grant (NJBIA) (5) Program Threshold Determination: Type A State Program Threshold~ $750, Type B State Program Threshold< $750, (6) Auditee qualified as a low-risk auditee under N.J. OMB Circular 15-08? No 23

28 NEW JERSEY COUNCIL OF COUNTY COLLEGES SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2016 Section II Financial Statement Audit Reported Findings Under Government Auditing Standards Internal Control Findings None Reported Compliance Findings None Reported Section Ill Findings and Questioned Costs Relative to Major Federal and State Programs Federal Programs None Reported State Programs None Reported 24

29 NEW JERSEY COUNCIL OF COUNTY COLLEGES SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2016 Status of Prior Audit Findings Federal and State Programs The Single Audit Report and Data Collection Form for the year ending June 30, 2015 were not filed within nine months of the fiscal year end as required. This Audit Finding has been resolved. 25