COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2015

Transcription

1 COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2015 Leslie A. Jamison, CPA Dean of Finance 5100 Black Horse Pike Mays Landing, New Jersey

2 COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2015 TABLE OF CONTENTS Introductory Section Page(s) President s Letter 1 Transmittal Letter 2-6 Principal Officials 7 Organization Chart 8 Financial Section Independent Auditors Report 9-11 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 Required Supplementary Information Part I: Management s Discussion and Analysis (Unaudited) Basic Financial Statements: Statement of Net Position 24 Statement of Revenues, Expenses, and Changes in Net Position 25 Statement of Cash Flows Notes to Financial Statements Required Supplementary Information Part II: RSI-1 Schedule of the College s Proportionate Share of the RSI-2 Net Pension Liability Public Employees Retirement System 63 Schedule of College s Contributions Public Employees Retirement System 64 RSI-3 Notes to Required Supplementary Information Part II 65 Supplemental Financial Information: Balance Sheets Statement of Changes in Fund Balances 68 Statement of Current Fund Revenues, Expenditures and Other Changes 69 Budget Comparison to Actual 70 Salary Expenditures 71 Single Audit Section: Report on Compliance for Each Major Program and Report On Internal Control Over Compliance Required By OMB Circular A-133 and State of New Jersey Circular OMB Schedule of Expenditures of Federal Awards Schedule of Expenditures of State Financial Assistance 76 Notes to the Schedules of Expenditures of Financial Awards 77 Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings 82 Statistical Section (Unaudited) Net Position 83 Capital Assets 84 Revenues by Source Current Unrestricted Fund Revenues by Source Expenditures by Natural Classification Current Unrestricted Fund Expenditures by Function Enrollment Data Demographic and Economic Statistics 98 Principal Employers 99 College Staffing 100

3 INTRODUCTORY SECTION

4 President s Letter Members of the Atlantic Cape Board of Trustees: I am pleased to provide you and the college community with the Comprehensive Annual Financial Report (CAFR) for Fiscal Year The 2015 Fiscal Year represents my tenth year as President of Atlantic Cape and it was a year of substantial accomplishments for the institution. A review of the data in this report suggests that the College s financial picture continues to be sound. I would like to recognize the efforts of the Finance Department, led by Dean Leslie Jamison, for their work to ensure the rigorous standards of the CAFR have been met and our fiscal position remains strong. The current economic climate in our service area represents a significant challenge for virtually all public institutions and private entities. To help meet that challenge, Atlantic Cape will continue to provide proven leadership in meeting the academic and workforce training needs in our two-county service area. That role, in my view, is the college s most important contribution to the economic prosperity of our residents. Fiscal Year 2015 was an exciting period at Atlantic Cape Community College. Reflecting the priorities in the strategic plan, the College maintained its commitment to a comprehensive Student Success Initiative. Atlantic Cape is proud to be an Achieving the Dream institution. During Fiscal Year 2015, the College focused on seven core student success initiatives, including accelerated learning in English and Math, the early alert retention initiative, career development, honors program, math boot camp, and prior learning assessment. We also continued utilizing strategies under the Board-endorsed Strategic Finance model, designed to ensure that the institution is able to efficiently maximize resources. In doing so, Atlantic Cape continues to fulfill its published mission of creating opportunity by providing access to superior, affordable associate degree programs and continuing education to residents of our service area. Furthermore, the construction of the Science, Technology, Engineering, and Math building at the Mays Landing Campus and the Caesars Entertainment Wing for Hospitality and Gaming Studies at the Worthington Atlantic City Campus were completed in Fiscal Year 2015, with the openings of the buildings held in the Spring 2015 and Fall 2014, respectively. We also successfully obtained funding and, with Board approval of a revised Blueprint 2020: Facilities Master Plan, began renovations for student success and career planning centers at the Cape May and Atlantic City campuses, renovations to existing academic space at the Mays Landing campus and the programming phase for the student success and career planning center at the Mays Landing campus. We are extremely appreciative of the leadership and advocacy provided by the Board of Trustees. Your dedication and vision are essential for the future success of this institution. Working together, the Board of Trustees, the college community, and our external stakeholders enable Atlantic Cape to continue to fulfill its legacy of truly serving as the community s college. Sincerely, Peter L. Mora Sr. President Page 1

5 February 11, 2016 The Board of Trustees Atlantic Cape Community College Mays Landing, New Jersey We are pleased to provide you with the Comprehensive Annual Financial Report of Atlantic Cape Community College (the College) for the Fiscal Year ended June 30, The purpose of this report is to provide the Board of Trustees, college staff, citizens, and other interested parties with useful information concerning the College s operations and financial position. The College s Finance Office prepared this report. The responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the management of the College. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the College as of June 30, 2015, and for the Fiscal Year then ended. All disclosures necessary to enable the reader to gain an understanding of the College s financial activities in relation to its mission have been included. The Comprehensive Annual Financial Report is organized in three sections, as follows: 1. The Introductory Section contains the President s letter, this letter of transmittal with an overview of the College that includes factors affecting the financial condition and required supplementary information, a listing of principal officials, and the organizational chart. 2. The Financial Section includes Management s Discussion and Analysis (MD&A), the basic financial statements and accompanying notes, required supplementary information, supplemental financial and management information, and single audit section, as well as the independent auditors report. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The College s MD&A can be found immediately following the independent auditors report. 3. The Statistical Section includes selected unaudited financial and demographic information, generally presented on a multi-year basis. The organization, form and contents of this report were prepared in accordance with the standards prescribed by the Governmental Accounting Standards Board (GASB), the Government Finance Officers Association of the United States and Canada (GFOA), and the American Institute of Certified Public Accountants. College Information Atlantic Cape Community College is a two-year publicly supported community college operating under the provisions of N.J.S.A. 18A:64 A1, et seq. In December 1963, the State of New Jersey Department of Education granted approval for the establishment of the College, which became the second community college to be organized by the State on April 14, The College offers a wide range of programs to meet the needs of the surrounding community. Financial support is received from county and state governments. Page 2

6 The Board of Trustees of the College voted on August 28, 1998 to approve a resolution authorizing Atlantic Community College to enter into a joint venture college with Cape May County. Officials from the College, Atlantic County and Cape May County signed a contract outlining the terms of the agreement. The New Jersey Legislature approved changes to the New Jersey Community College funding formula. The jointure agreement became effective January 1, 1999, and the College was renamed Atlantic Cape Community College in February The Counties of Atlantic and Cape May provide support to the College based upon the funding formula specified in the jointure agreement. Atlantic County has nine voting members on the Board of Trustees of the College, including the Atlantic County Superintendent of Schools. Cape May County has five voting members on the Board of Trustees of the College, including the Cape May County Superintendent of Schools. One voting alumnus member from Atlantic or Cape May County is elected for a one-year term by each year s graduating class. The College serves Atlantic and Cape May counties in southern New Jersey from three campuses. The College s main campus in Mays Landing is situated on 541 acres in the picturesque New Jersey Pinelands, 15 miles west of Atlantic City's boardwalk and 45 miles from Philadelphia. The Charles D. Worthington Campus (WACC) in Atlantic City provides a broad range of educational and related services to students, especially those who live and/or work in the Atlantic City area. The College s Cape May County campus in Cape May Court House enhances the Cape May County student experience. For the Fiscal Year ended June 30, 2015, the College enrolled 9,551 credit students, compared to 9,911 the prior year. The Fall 2014 unduplicated credit student headcount was 6,845. Of these, 90.6% of the students are from either Atlantic or Cape May County. Atlantic Cape Community College accounts for approximately 4% of the 19 New Jersey community college student credit hour enrollments. College Mission The mission of Atlantic Cape Community College is to: Create opportunity by providing access to superior educational programs The College offers more than forty transfer and career degree programs. Students may choose from an Associate in Arts, Associate in Applied Science, Associate in Science, industry certifications and continuing education professional development and training services. Nationally recognized programs are the College s Casino Career Institute and the Academy of Culinary Arts. The College is accredited by The Commission on Higher Education of the Middle States Association of Colleges and Schools, a regional accrediting institution recognized by the U.S. Department of Education. The Commission is located at 3624 Market Street, 2 nd Floor West, Philadelphia, PA Telephone: (267) Professional associations have also accredited those professionaltechnical programs that require approval. Long Term Strategic Financial and Operational Planning The College engages in an annual strategic and operational planning cycle that involves all levels of the organization. This planning process provides a framework to advance the College s mission and goals in order to meet the needs of the students and the community. Page 3

7 Financial Information The College maintains its accounts and prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) as set forth by the Governmental and Financial Accounting Standards Boards (GASB and FASB) and the National Association of College and University Business Officers (NACUBO). The College follows GASB Statement No. 35 Basic Financial Statements and Management Discussion and Analysis for Public Colleges and Universities. The financial records are maintained on the accrual basis of accounting whereby all revenues are recorded when earned and all expenses are recorded when a legal obligation to pay exists. The notes to the financial statements expand upon the accounting principles applied. State statutes require an annual audit by an independent certified public accounting firm. The College s Board of Trustees selected the independent public accountants, Bowman & Company LLP, to audit the College s financial statements. Their report is included as part of the financial presentation. In accordance with GASB pronouncements, the College s financial statements include all funds and departments of the College (the primary government) and the Atlantic Cape Community College Foundation, Inc., its component unit. The foundation is included in the College s reporting entity because of the significance of their operational and financial relationship with the College. Notes 2 and 26 to the financial statements give further information about the foundation included in the financial statements. Internal Controls Management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the College are protected from loss, theft, or misuse and to ensure adequate accounting information is available for the preparation of the financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and that the valuation of costs and benefits requires estimates and judgments by management. Budgetary Controls The College maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual budget approved by the College s Board of Trustees. The budget is prepared on an annual basis as part of the College s strategic planning process, and the recommended budget parameters are presented to the Budget, Audit and Finance Committee of the Board of Trustees for review. After these parameters are established, the annual budget request is developed and approved by the College Board of Trustees. The Atlantic Cape Community College Board of School Estimate approves the Atlantic and Cape May Counties appropriations. Financial Reporting An automated financial record system captures all financial transactions and provides data for the preparation of this CAFR, including the audited financial statements. The CAFR is distributed to the College s Board of Trustees and executive management, federal and state agencies, and financial institutions as well as others throughout the general public. The Budget, Audit and Finance Committee of the Board of Trustees routinely monitors and reports on revenue collections compared to budget and actual expenses compared to budget, carefully reviewing variances. Internal management reports, customized to meet the information and decision-making needs at all levels of the organization, aid in the management of financial resources. Page 4

8 Cash Management The College is governed by New Jersey statute when depositing funds or investing excess funds. The Board of Trustees approves all depositories and investment policies. All excess funds are invested in a prudent, conservative and secure manner with the intent to maximize investment income. Risk Management Comprehensive business insurance is purchased through a cooperative pool. The pool provides its members with property, liability, motor vehicle, and other miscellaneous insurance. The pool is a risk sharing public entity that is both an insured and self-administered group established for the purpose of providing low cost insurance coverage to its members. In addition the College participates in a selfinsurance pool for workers compensation. Economic Condition and Outlook After a decade of population growth rates that exceeded those of the state, population has leveled off in the service area with continued small declines in Cape May County. With the closing of four casino hotel properties in 2014, the region has one of the highest residential home foreclosure rates. While actual employment has continued its decline from a 2007 peak, the unemployment rate has improved from 13.5% in 2012 to 10.8% in 2014 as the employment force has contracted. The College plays a key role in providing the necessary workforce development and job training offerings to meet the current employment market needs. According to the New Jersey Department of Labor and Workforce Development, as the economy grows out of the national recession New Jersey can expect a 7.5% increase in employment opportunities by This rate is expected to be substantially lower in Atlantic (2.4%) and in Cape May (3.1%) counties. Many of the jobs with the greatest projected growth rates in this period are within the health and construction industries. Estimates of projected New Jersey employment by education and training requirements indicate that the occupations with a minimum requirement of an Associate Degree will increase by 14.3% by The College's financial outlook for the future is positive, but with challenges influenced by the economic climate of the State and Counties. Although College enrollments reached their highest levels in the spring semester of 2010, with over 7,600 credit students taking courses, enrollment has begun to decline, following a predicted decline in anticipated high school graduates which began in Fall semester 2014 saw a 7% decrease in overall enrollment compared to the same period in In addition to student enrollment, the State of New Jersey and Counties of Atlantic and Cape May support the College. The counties have steadily supported the College with operating and capital appropriations. Although the State of New Jersey continues to experience economic constraints, it has maintained the same level of funding to the sector. The College has kept pace with or exceeded the average increases for the sector and has maintained its 4% share of that overall appropriation. In Fiscal Year 2015 students paid 60.0% toward the cost of education, with the counties funding 21.2% and the State 15.6%. The balance of revenue is provided by investment income and other sources. Operating costs in the areas of health benefits and renewal and replacement of aging facilities continue to escalate. The College is maintaining its program of cost containment, cost avoidance and revenue enhancement efforts, while continuing to operate within its resources. Page 5

9 As increases in the population base and student enrollments moderate, tuition and fee revenue will grow more slowly. The college is challenged to provide exemplary services and continue its fiduciary responsibility of maintaining facilities with shrinking resources. Major initiatives by the College include addressing deferred maintenance on college campuses. A capital improvement plan supported by Chapter 12 and the Building Our Futures Act (state and county support) is ongoing. Two major construction projects, the STEM (Science, Technology, Engineering and Math) building on the Mays Landing campus and a hospitality wing on our Worthington Atlantic City campus opened during Fiscal Year 2015, with completion dates of Spring, 2015 and Fall, 2014, respectively. Our ability to service students will be enhanced through our partnership with Rutgers University, who completed construction on a facility on our Mays Landing campus which opened for classes in September, College administration recognizes the challenges involved in providing the access that our students and community need. It will continue to maintain the balance between affordable tuition and fees while delivering quality services. Acknowledgments The timely preparation of the College s comprehensive annual financial report was made possible by the dedicated service of the entire staff of the Finance Office. Each member of the department has our sincere appreciation for the contributions made in the preparation of this report. Respectfully submitted, Leslie A. Jamison Dean of Finance Page 6

10 BOARD OF TRUSTEES Maria Ivette Torres, Chairperson Dave Coskey, Vice Chairperson Maria K. Mento, Treasurer Ellen Byrne, Esq. Christina Clemans David A. Evans Briar Gibbons, Alumni Representative James B Kennedy, Esq. Brian G. Lefke Mary B. Long Thomas E. Milhous Margaret J. Nicolosi, Interim Executive Regional Superintendent of Schools (Atlantic) Donald J. Parker Dr. Richard Stepura, Executive County Superintendant of Schools (Cape May) Helen W. Walsh Louis J. Greco, Esquire, Board Attorney Jean McAlister, Board Secretary OFFICERS OF THE COLLEGE Maria Ivette Torres, Chairperson Dave Coskey, Vice Chairperson Maria K. Mento, Treasurer ATLANTIC COUNTY EXECUTIVE Dennis Levinson ATLANTIC COUNTY ADMINISTRATOR Gerald Del Rosso ATLANTIC COUNTY BOARD OF CHOSEN FREEHOLDERS Frank D. Formica, Chairman James A Bertino, Vice Chairman Colin G. Bell John L. Carman Ernest D. Coursey Richard R. Dase Alexander C. Marino Will Pauls John Risley ACTING CAPE MAY COUNTY DIRECTOR of OPERATIONS Michael Laffey CAPE MAY COUNTY BOARD OF CHOSEN FREEHOLDERS Gerald M. Thornton, Director Leonard C. Desiderio, Vice Director Kristine Gabor E. Marie Hayes Will Morey Page 7

11 Board of Trustees College President Resource Development & President/Board of Trustees Operations Office of President/Board of Trustee Services Resource/Alumni Development Enrollment Management & College Relations College Relations Admissions & Recruitment Testing Financial Aid Finance Accounting/ Budgets Bursar s Office Information Technology Services Administrative Computing PC Services & Telephony Planning, Research, Facilities & Executive Support Institutional Research, Planning & Assessment Facilities & Capital Projects Administration And Business Services Business Services Purchasing Perishable Storeroom Human Resources, Public Safety and Compliance Human Resources Public Safety Health Services & Compliance Student Affairs & Branch Campus Management Counseling and Support Services Student Development CMCC Student Services & Campus Management Academic Affairs Liberal Studies Career Education & STEM Programs Continuing Education Academic Support Services WACC Student Services & Campus Management Academy of Culinary Arts Enrollment Services Page 8

12 FINANCIAL SECTION

13 INDEPENDENT AUDITORS' REPORT Board of Trustees Atlantic Cape Community College Mays Landing, New Jersey Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities of Atlantic Cape Community College (the College ), a component unit of the County of Atlantic, State of New Jersey, and its discretely presented component unit (Atlantic Cape Community College Foundation), as of and for the fiscal year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the College's 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. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of the College s discretely presented component unit. Those financial statements were audited by other auditors, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the discretely presented component unit, are based on the report of the 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. The financial statements of the College s discretely presented component unit were audited in accordance with auditing standards generally accepted in the United States of America, but were not audited in accordance with Government Auditing Standards. 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 auditors' 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 College 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 College 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities of Atlantic Cape Community College and the College s discretely presented component unit, as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Page 9

14 28900 Emphasis of Matter Adoption of New Accounting Principles As discussed in note 24 to the financial statements, during the fiscal year ended June 30, 2015, the College adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68. Our opinion is not modified with respect to this matter. Prior Period Restatement Because of the implementation of GASB Statements No. 68 and No. 71, net position as of June 30, 2014, on the statement of revenues, expenses and changes in net position, has been restated, see note 25 to the financial statements. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis, schedule of the College s proportionate share of the net pension liability and schedule of College contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the College's basic financial statements. The Schedules of Expenditures of Federal Awards and State Financial Assistance, as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and State of New Jersey Circular OMB, 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 introductory section, supplemental financial information, and statistical section, are presented for purposes of additional analysis and are also not a required part of the basic financial statements. The Schedules of Expenditures of Federal Awards and State Financial Assistance, and supplemental financial information are the responsibility of management and were derived from and relates directly to the underlying accounting 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 and other 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 Schedules of Expenditures of Federal Awards and State Financial Assistance, and supplemental financial information are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Page 10

15 28900 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 11, 2016, on our consideration of Atlantic Cape Community College s internal control over financial reporting and 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 the 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 College's internal control over financial reporting and compliance. Respectfully submitted, Woodbury, New Jersey February 11, 2016 BOWMAN & COMPANY LLP Certified Public Accountants & Consultants Page 11

16 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 AUDITORS REPORT Board of Trustees Atlantic Cape Community College Mays Landing, 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 statement audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the business-type activities of Atlantic Cape Community College (the College ), a component unit of the County of Atlantic, State of New Jersey, and its discretely presented component unit (Atlantic Cape Community College Foundation), as of and for the fiscal year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the College s basic financial statements, and have issued our report thereon dated February 11, Our report on the financial statements included an emphasis of matter paragraph describing the restatement of the prior period financial statements resulting from the adoption of new accounting principles. Our report also includes a reference to other auditors who audited the financial statements of the College s discretely presented component unit (Atlantic Cape Community College Foundation), as described in our report on the College s financial statements. The financial statements of the College s discretely presented component unit were audited in accordance with auditing standards generally accepted in the United States of America, but were not audited in accordance with Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Atlantic Cape Community College s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 College s internal control. Accordingly, we do not express an opinion on the effectiveness of Atlantic Cape Community College s internal control. 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the College 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. 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. Page 12

17 28900 Compliance and Other Matters As part of obtaining reasonable assurance about whether Atlantic Cape Community College s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, 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 College s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Respectfully submitted, BOWMAN & COMPANY LLP Certified Public Accountants & Consultants Woodbury, New Jersey February 11, 2016 Page 13

18 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) Management s discussion and analysis of the College s financial performance during the Fiscal Years ended June 30, 2015 and 2014 is presented in this section of the annual financial report. Management prepared this discussion along with the financial statements and the related footnote disclosures, and this discussion should be read in conjunction with and is qualified in its entirety by the financial statements and footnotes. The financial statements, footnotes and this discussion are the responsibility of management. Using This Annual Report These basic financial statements focus on the College as a whole and are designed to emulate corporate presentation models whereby all College activities are consolidated into one total. The financial statements are prepared using the accrual basis of accounting which recognizes revenues when earned and expenses when incurred. This annual report consists of a series of financial statements prepared in accordance with GASB Statement 35, Basic Financial Statements-and Management s Discussion and Analysis for Public Colleges and Universities, of the Governmental Accounting Standards Board. The College implemented this reporting standard for the Fiscal Year ended June 30, The Statement of Net Position presents all of the College s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference reported as net position. The assets and liabilities are reported in order of relative liquidity while net position is categorized as Net Investment in Capital Assets, Restricted, or Unrestricted. Over time, increases or decreases in net position are an indicator of the improvement or erosion of the College s financial health. The Statement of Revenues, Expenses, and Changes in Net Position focuses on the gross and net costs of College activities occurring during the year, and how these activities are supported. Revenues and expenses are reported as either operating or non-operating. State and county appropriations, as well as investment activities, are reported as non-operating and denote the dependency the College has on their support. Another way to assess the financial health of an institution is to look at the Statement of Cash Flows. Its primary purpose is to provide relevant information about the cash receipts and cash payments of an entity during a period. The Statement of Cash Flows also helps users assess: An entity s ability to generate future net cash flows Its ability to meet its obligations as they come due and Its needs for external financing The Comprehensive Annual Financial Report (CAFR) is presented in three sections: introductory, financial and statistical. The introductory section includes the President s letter, the transmittal letter, the College s principal officers, and an organizational chart. The financial section includes the report of the independent auditors, management s discussion and analysis, the basic financial statements, notes to the financial statements, required supplementary information, supplemental financial and management information and the single audit section. The statistical section includes unaudited financial information. Page 14

19 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) Financial Highlights Fiscal Year 2015 Compared to 2014 Cash balances increased by $2,831,071 during the Fiscal Year ended June 30, 2015, compared to a decrease of $1,864,088 during the year ended June 30, There was a 7.9% decrease in tuition and fee revenues, partially mitigated by a 4.6% average increase in rates, as student credit hour enrollments continue a decline which began four years ago. College-wide, salaries and benefits increased by $46,439. A decrease in construction in progress and corresponding increase in buildings and improvements reflects the openings of two major construction projects during the year ended June 30, The STEM building on the Mays Landing campus and the hospitality wing on the Worthington Atlantic City campus opened in Spring, 2015 and Fall, 2014, respectively. These projects were supported by federal, CRDA, State of New Jersey Chapter 12 funding and college appropriated fund balance, matched by Atlantic County funds. The following summary of cash flows for the years ended June 30, 2015 and 2014 was prepared from the College s Statement of Cash Flows: FY2015 FY2014 Change FY Cash provided (used) by: Operating activities $ (13,778,789) $ (13,344,923) $ (433,866) Non-capital financing activities 15,155,611 15,141,037 14,574 Capital and related financing activities 1,376,525 (3,728,370) 5,104,895 Investing activities 77,724 68,168 9,556 Net decrease in cash 2,831,071 (1,864,088) 4,695,159 Cash, beginning of year 14,473,729 16,337,817 (1,864,088) Cash, end of year $ 17,304,800 $ 14,473,729 $ 2,831,071 In Fiscal Year 2015, the College adopted and implemented GASB Statement No. 68 Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27, and GASB Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68. The College s Fiscal Year 2014 net position has been restated due to this implementation. Notes 16 and 24 provide a thorough discussion of the implementation of these GASB statements and Note 25 presents the restatement of net position as of June 30, The College s net position at June 30, 2015 increased $5,784,698. The major factor contributing to the increase in Fiscal Year 2015 is additions to net investment in capital assets. The College s financial position, as a whole, is healthy. Net position increased by 13.4% from the level at the previous year-end (as restated). A decrease of 9.3% in expendable restricted net position is primarily attributable to the change in capital projects. Non-expendable net position increased by 1.2% as the College s endowments increased by $9,681. An increase in capital assets is due to capital additions in excess of depreciation expense and retirements. Unrestricted net position increased by 1.8%, which reflects management s efforts to reduce operational expenditures in the face of declining enrollments. Page 15

20 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) The summary schedule below is prepared from the College s Statement of Net Position. The schedule displays the change in net position from 2014 to FY2015 FY2014 Change FY % Change Assets Current assets $ 18,539,624 $ 19,883,788 $ (1,344,164) (6.8)% Noncurrent assets 71,494,519 65,726,295 5,768, % Total assets 90,034,143 85,610,083 4,424, % Deferred Outflows of Resources 2,170,090 2,170, % Liabilities Current liabilities 8,765,397 9,887,448 (1,122,051) (11.3)% Noncurrent liabilities 31,006,438 2,188,812 28,817, % Total liabilities 39,771,835 12,076,260 27,695, % Deferred Inflows of Resources 3,557,355 3,557, % Net Position Unrestricted (Deficit) (22,816,930) 7,212,590 (30,029,520) (416.3)% Restricted 4,497,483 4,864,484 (367,001) ( 7.5)% Net investment in capital assets 67,194,490 61,456,749 5,737, % 48,875,043 73,533,823 (24,658,780) (33.5)% Restatement of: Net pension liability and pension related deferred outflows of resources per GASB 68 (30,443,478) (30,443,478) (100.0)% Total net position $ 48,875,043 $43,090,345 $5,784, % Enrollment College enrollment is comprised of credit and non-credit full-time equated students (FTEs). A full time equated student represents a student or combination of students taking thirty (30) credits. FY2015 FY2014 Change % FY Change Credit FTEs 4,903 5,244 ( 341) ( 6.5)% Non Credit FTEs % Leased/High School Curriculum % Total FTEs 5,197 5,528 Page 16

21 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) Revenue The College received its revenue from three main sources: tuition and fees, state aid and county support. Federal grants and contracts include $14.7 million in student financial aid received by the College for participating in the Pell Grant Program. The balance of revenue was received from miscellaneous sources that included grants, investment income, and other income. Tuition Rates The College charged $ per in-county general education student credit hour (SCH) for an average of $1,695 per term. In Fiscal Year 2014 the tuition charged was $108.00, per incounty student credit hour. General Fee The College charged $20.60 per student credit hour for an average of $ per term during Fiscal Year The general fee that was charged during Fiscal Year 2014 was $ In Fiscal Year 2015, the information services fee, previously charged separately, was incorporated into the general fee. The following chart illustrates sources of revenue for the year ended June 30, 2015: FY2015 Revenues by Source Other operating Nongovernmental revenues $798,593 grants/contracts $54,304 Capital appropriations $8,502,101 State and local grants/contracts $2,818,259 Gifts $350,384 Investment income $77,724 Other revenues $77,315 Tuition and fees $12,730,171 County appropriations $8,409,196 State appropriations $6,194,910 Total Revenue $57,609,018 Tuition and fees 22% Federal grants/contracts 31% State appropriations 11% County appropriations 15% Federal grants/contracts $17,596,061 State and local grants/contracts 5% Nongovernmental grants/contracts <1% Capital appropriations 15% Other operating revenues 1% Gifts <1% Investment income <1% Other revenues <1% Page 17

22 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) Fiscal Year 2015 Compared to 2014 From 2014 to 2015, there was a 13.7% decrease in the College s total revenue from $66.7 million to $57.6 million. Operating revenue decreased by 5.3% or $1.9 million from the level achieved during the previous year. Of that total, tuition and fee revenue decreased 7.9% or $1.1 million, mainly attributable to a 6.5% decrease in student credit hour enrollments. Revenues from federal, state and local grants and contracts total $20.4 million, which include student assistance funding such as PELL and TAG. Authorized awards for the federal PELL program decreased by 3.7%. Federal student financial aid (excluding loans) decreased by 2.8% or $430 thousand. State student financial aid (excluding loans) decreased by 8.8% or $235 thousand. Other state and local grants and contracts decreased by 26.4% or $238 thousand, primarily due to New Jersey Department of Labor and Workforce Development Customized Training grants ending during Fiscal Year Net non-operating revenues decreased by 1.5%, or $231 thousand. The Atlantic and Cape May Counties appropriation to the College decreased by 1.9%, or $166 thousand. The State of New Jersey appropriation for operating costs decreased by less than.1% or $2 thousand. Charitable contributions decreased 3.4%, or $12 thousand. Investment revenue increased 14%, or $10 thousand. Capital appropriations decreased by $7.0 million as two major construction projects, the STEM building on the Mays Landing campus and the hospitality wing on the Worthington Atlantic City campus, were substantially completed in Fiscal Year Capital appropriations reflects the support by federal, state and county agencies for the College s master facilities plan. Expenses The following chart illustrates the relative size of operating expenses for the year ended June 30, 2015: FY2015 Operating Expenses By Functional Classification Student Aid $6,210,634 Depreciation Amortization $3,946,402 Student Activities $148,573 Instructional $14,176,364 Operation of Plant $7,074,592 Public Service $754,111 Institutional Support $9,548,580 Total Operating Expenses $51,727,500 Student Services $5,086,851 Academic Support $4,781,393 Instructional 27% Public Service 1% Academic Support 9% Student Services 10% Institutional Support 18% Operation of Plant 14% Student Aid 12% Depreciation/Amortization 8% Student Activities <1% Page 18

23 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) The College engages in an annual strategic and operational planning cycle that involves all levels of the organization. This planning process provides a framework to advance the College s mission and goals in order to meet the needs of the students and the community. The schedule below lists the College s strategic goals for the five years ending June 2016, and the current unrestricted fund budgeted and expended amounts for the Fiscal Year ended June 30, 2015: FY15 Revised FY15 Expended Strategic Goals Budget Amount Amount Goal 1 $25,596,875 $24,328,735 Maximize student success Goal 2 1,226,338 1,157,762 Strengthen community partnerships Goal 3 14,402,266 13,504,215 Demonstrate effectiveness, continuous improvement and efficient use of resources $41,225,479 $38,990,712 The following chart illustrates the relative size of current unrestricted fund operating expenses for the year ended June 30, 2015 by strategic goal: Current Unrestricted Fund % Expenditures by Strategic Goal Fiscal Year July 1, 2014 to June 30, 2015 Goal 3-35% Goal 1-62% Goal 2-3% Page 19

24 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) Fiscal Year 2015 Compared to 2014 Operating expenses decreased by.9% or $467 thousand from the prior year. Overall, salaries of $24.4 million increased by.1% or $29 thousand, and fringe benefits of $9.2 million also increased slightly, with an increase of.2%, or $18 thousand. The College s cost for medical benefits is offset by employee contributions which began on July 1, A comparison of operating expenses for the years ended June 30, 2015 and 2014 is illustrated in the following graph: Operating Results The following summary of operating results displays the change from 2014 to 2015 activity and was prepared from the College s Statement of Revenues, Expenses, and Changes in Net Position: Change FY2015 FY2014 FY Total Operating Revenue $ 33,997,388 $ 35,888,228 $ (1,890,840) Total Operating Expenses 51,727,500 52,194,555 (467,055) Operating Loss (17,730,112) (16,306,327) 1,134,190 Net Non-operating Revenue 15,003,055 15,234,545 (231,490) Income (Loss) Before Net Other Revenues (2,727,057) (1,071,782) (1,655,275) Capital Appropriation 8,502,101 15,476,336 (6,974,235) Additions to Permanent Endowments 9,654 15,499 (5,845) Increase (Decrease) in Net Position 5,784,698 14,420,053 $ (8,635,355) Net Position, Beginning of Year 43,090,345 59,113,770 Restatement for GASB 68 (30,443,478) Net Position, End of Year $ 48,875,043 $ 43,090,345 Page 20

25 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) Fiscal Year 2015 Budget to Actual Comparison Comparing the total budget to actual activity for the current unrestricted fund, the College earned 97.28% of budgeted revenues and expended 94.79% of budgeted expenditures. Encumbrances at June 30, 2015, subject to automatic re-appropriation in FY2016, totaled $87 thousand. The summary schedule below is prepared from the College s Supplemental Financial Information, Budget Comparison to Actual for the Fiscal Year ended June 30, Original Adjusted Actual Variance from Budget Revised Budget Activity Original Budget over (under) Total Education and General Income $ 40,249,889 $ 40,249,889 $ 39,031,158 $ (1,218,731) ABP Reimbursement 500, , , ,914 Adjusted Education and General Income 40,749,889 40,749,889 39,642,072 (1,107,817) Total Education and General Expenditures 41,185,000 41,225,479 38,990,712 (2,194,288) Education and General Operating Margin $ (435,111) $ (475,590) $ 651,360 $ 1,086,471 The variance in revenues was $(1,107,817). This negative variance resulted primarily from less credit tuition and student fees realized than budgeted due to the decline in enrollment and from a shortfall of continuing education revenues. These budget shortfalls were partially offset by higher than budgeted ABP reimbursements and indirect costs recovered. The original revenue budget was based on a decrease of 3% from the prior year projected student credit hour enrollments. Actual enrollments of 147,078 student credit hours (excluding dual enrollment) were 6.5% less than the prior year, and under budget projections by 3.3%. Savings in actual salaries and benefits expenditures from budgeted total $1.6 million are reflected in the total education and general expenditures original budget variance of $ (2.2) million. The savings are primarily an outcome of cost containment strategies used by management and lower adjunct and overload costs resulting from the decline in enrollment. Of the $651 thousand operating margin, $87 thousand was appropriated for encumbrances carried forward to Fiscal Year Student activities resulted net funds used of $3 thousand. The adjusted net operating margin was $648,923. Facilities Expansion Plans Two major construction projects, the STEM (Science, Technology, Engineering and Math) building on the Mays Landing campus and a hospitality wing on our Worthington Atlantic City campus were completed in Fiscal Year The hospitality wing opened in Fall, 2014, and the STEM Building is opened for the Spring 2015 semester. These projects were funded by federal US EDA, State of New Jersey Chapter 12, CRDA, and College funds, with matching funds from Atlantic County. The State of New Jersey authorized a 2007 allocation totaling $6,244,000 of Chapter 12 funds (Public Law 1971) to renovate facilities at the college s Worthington Atlantic City and Mays Landing campuses. Atlantic County issued bonds to fund the construction, and the State shared the debt service equally with the County. With the completion of the WACC campus Page 21

26 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) renovations, the remainder of this Chapter 12 allocation ($581,724) is dedicated to renovations primarily on the college s Mays Landing campus. A 2008 allocation of $9,009,000 is designated for deferred maintenance and capital improvements and new construction based on master plan priorities. A 2010 allocation of $2,352,750 bonded by Atlantic County in November, 2011 is designated for the STEM building. A 2012 allocation of $8,500,000 and 2013 allocation of $1,500,000 will support campus renovations, including repurposing Building A, academic classrooms. A 2014 allocation of $4,200,000 will support the construction of a Student Success/ Career and Planning Center. In Fiscal Year 2014, the State of New Jersey, Secretary of Higher Education awarded the College four Building Our Future Bond Act grants totaling $6,841,115, with Atlantic and Cape May Counties providing 25% in matching funds for each county s share, providing an additional amount of $2,280,372. The Building Our Future Bond Act provides funds for the construction of higher education buildings, the expansion of additional facilities, and the acquisition and installation of additional and upgraded equipment for the purpose of increasing academic capacity. The College will use the funds for renovations of existing academic buildings, the construction of a Student Success/ Career and Planning Center on the Mays Landing campus, and the renovation of space to create Student Success/ Career and Planning Centers at the Worthington Atlantic City and Cape May County campuses. In Fiscal Year 2014, the College was awarded a $567,000 grant through the New Jersey Educational Facilities Authority, for the State of New Jersey s Higher Education Technology Infrastructure Fund for the purpose of developing technology infrastructure, with Atlantic and Cape May counties providing matching funds in an amount equal to the grant amount. In Fiscal Year 2014, the College also entered into a $803,542 lease agreement with the New Jersey Educational Facilities Authority for the State of New Jersey s Higher Education Equipment Leasing Fund Program for the purpose of providing educational equipment. The lease agreement requires that the College pay 25% of the debt service of which Atlantic and Cape May counties will provide the funds proportionately. Capital asset activity for the Fiscal Year ended June 30, 2015 was as follows: Beginning Ending Balance Additions Retirements Balance Land $2,360,035 $ 10,062 $ - $2,370,097 Construction in Progress 18,923,210 1,618,228 (18,923,210) 1,618,228 Land Improvements 2,383, ,383,401 Infrastructure 203,915 20, ,847 Buildings and Improvements 65,916,193 24,031,656-89,947,849 Furniture and Equipment 9,587,593 2,899,494 (397,777) 12,089,310 Library Collection 1,322,367 17,664-1,340,031 Other Improvements 9, ,600 Leasehold Improvements 121, ,295 Other Assets 3,100,111 9,317 (55,200) 3,054,228 Total 103,927,720 28,607,353 (19,376,187) 113,158,886 Less Accumulated Depreciation and Amortization (42,470,971) (3,946,402) 452,977 (45,964,396) Capital Assets, Net $61,456,749 $24,660,951 $(18,923,210) $67,194,490 Page 22

27 MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (UNAUDITED) Economic Factors That Affect the Future Although the College s financial position is currently sound, the economic position of the College is closely tied to that of the State of New Jersey and the Counties of Atlantic and Cape May. The College s state and county appropriations and many state and local grants and contracts are influenced by the economic climate of the state and counties. Other factors that affect college tuition and fee revenues include population growth rate, unemployment rate, and the number of high school graduates in Atlantic and Cape May counties. The state of the regional economy, especially Atlantic County, has deteriorated substantially with the closing of casino hotels due to competition from neighboring states. As the main economic driver in the South Jersey region, the loss of over half of employees in the casino industry since the recession of 2007 began has now spread employment and income losses to the overall economy. In fact, total employment in Atlantic County remains nearly 20% below the peak reached in 2006, a loss of 28,000 jobs. Cape May County, largely dependent on the summer tourism season, has fared somewhat better but has also not yet recovered the jobs lost since the peak in These trends in the college s service area indicate that enrollment pressures will be negative for the near future as the lack of job growth causes an aging of the population. Salaries and benefits account for 65.0% of the College s operating expenses. The College s four bargaining agreements were renegotiated in Fiscal Year 2015 for the period July 1, 2014 to June 30, This report reflects the negotiated 2% increase for Fiscal Year Health benefit costs continue to rise. Beginning in Fiscal Year 2011, all covered full-time employee salaries began to contribute to health benefits costs. Their contributions totaled $876 thousand in Utilities and telephone expenses increased by $72 thousand to $1.63 million, or 3% of operating expenses. As new buildings in the master plan are completed, facilities costs will increase. This increase will be partially offset by expected savings on electricity costs from the solar projects on the Mays Landing and Cape May campuses. The cost of technology continues to accelerate and, in order to offer exemplary programs, the College must continue to provide instruction, support, and maintenance at a cost of $2.8 million annually. This includes costs to support the College s Colleague management information system on which implementation was completed in In Fall 2012, the mid-atlantic region was hit by Hurricane Sandy. The effects of Hurricane Sandy were severe in the state and the region. The college was fortunate that the minimal damage that was incurred was primarily covered by FEMA funds and insurance proceeds. Planning for the maintenance of aging facilities and identifying the funding sources required continues to be a challenge. The College currently relies heavily on Chapter 12 funding supported by the counties and state. Most of the College s equipment needs are currently funded through grants from various agencies and equipment leasing fund programs made available through the State. Funds from the college s facilities fee, which is charged on a per student credit hour basis, are dedicated to deferred maintenance. It should be noted that the Board of Trustees has recognized $21.8 million needed for capital projects identified in the College s facilities master plan. Contacting the College s Financial Management This financial report is designed to provide readers with a general overview of Atlantic Cape Community College s finances and to demonstrate the College s accountability for the resources it receives. Questions concerning this report or requests for additional financial information should be directed to Leslie A. Jamison, Dean of Finance, 5100 Black Horse Pike, Mays Landing, N.J Page 23

28 STATEMENT OF NET POSITION AS OF JUNE 30, 2015 College Foundation ASSETS Current assets: Cash and cash equivalents $ 13,004,771 $ 125,158 Security deposits 1,809 Investments 1,181,079 Accounts receivable: Students, net of allowance of $1,115, ,909 Federal, state, county, local 3,766,192 Other 39,123 Pledges receivable 96, ,309 Inventories 83,210 Prepaid expenses 569,127 Other 9,000 Total current assets 18,539,624 1,427,546 Noncurrent assets: Restricted cash and cash equivalents 4,300,029 Restricted investments 2,748,119 Capital assets, non-depreciable (Note 18) 3,988,325 Capital assets, net of accumulated depreciation of $45,964,396 (Note 18) 63,206,165 Total noncurrent assets 71,494,519 2,748,119 Total assets 90,034,143 4,175,665 DEFERRED OUTFLOWS OF RESOURCES Related to pensions (Note 16) 2,170,090 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 6,158, ,968 Unearned revenue 2,435,583 13,380 Current portion: Deposits 9,267 Compensated absences 136,730 Equipment leasing fund 25,003 Total current liabilities 8,765, ,348 Noncurrent liabilities: Deposits 175,452 Compensated absences 1,708,833 Equipment leasing fund 174,990 Net pension liability (Note 16) 28,947,163 Total noncurrent liabilities 31,006,438 - Total liabilities 39,771, ,348 DEFERRED INFLOWS OF RESOURCES Related to pensions (Note 16) 3,557,355 NET POSITION Net Investment in capital assets 67,194,490 Restricted for: Nonexpendable: Scholarships and fellowships 817,160 2,837,014 Expendable 3,680, ,060 Unrestricted (22,816,930) 313,243 Total net position $ 48,875,043 $ 3,749,317 The accompanying notes are an integral part of the financial statements Page 24

29 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30, 2015 College Foundation REVENUES Operating Revenues: Student tuition and fees (including chargebacks and net of allowances of $12,905,396) $ 12,730,171 Gifts and contributions $ 383,922 Federal grants and contracts 17,596,061 State and local grants and contracts 2,818,259 Nongovernmental grants and contracts 54,304 Sales and services of educational departments 82,304 Other operating revenues 567, Auxillary enterprises - student activities 148,771 Total operating revenues 33,997, ,162 EXPENSES Operating Expenses: Instructional 14,176,364 Public service 754,111 Academic support 4,781,393 Student services 5,086,851 Institutional support 9,548, ,900 Operations and maintenance of plant 7,074,592 Scholarship and student aid 6,210, ,806 Depreciation and amortization 3,946,402 Auxillary enterprises - student activities 148,573 Total operating expenses 51,727, ,706 Total operating income (loss) (17,730,112) (146,544) NONOPERATING REVENUES (EXPENSES) State appropriations 5,583,996 State appropriations - alternate benefit program 610,914 County appropriations 8,409,196 Gifts 350,384 Investment income 77,724 10,841 Insurance proceeds 5,135 Repairs funded by capital appropriations and and insurance proceeds (106,474) Gain on equipment disposals 16,980 Other nonoperating revenue 55,200 Net nonoperating revenues 15,003,055 10,841 Income (loss) before net other revenues (2,727,057) (135,703) OTHER REVENUES Capital appropriations 8,502,101 Additions to permanent endowments 9, ,909 Total other revenues 8,511, ,909 Changes in net position 5,784,698 97,206 NET POSITION Net position - beginning of year, as restated (Note 25) 43,090,345 3,652,111 Net position - end of year $ 48,875,043 $ 3,749,317 The accompanying notes are an integral part of the financial statements Page 25

30 STATEMENT OF CASH FLOWS (COLLEGE ONLY) FOR THE FISCAL YEAR ENDED JUNE 30, 2015 CASH FLOWS FROM OPERATING ACTIVITIES Tuition and fees (including chargebacks) $ 12,296,228 Grants and contracts 14,823,855 Payments to suppliers (17,426,747) Payments to employees (24,606,740) Other receipts 1,134,615 Net cash used in operating activities (13,778,789) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State appropriations 6,077,569 County appropriations 8,409,013 Gifts and grants received for other than capital purposes 670,180 Principal paid on Perkins loan fund (193) Interest paid on Perkins loan fund (958) Net cash provided by noncapital financing activities 15,155,611 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital appropriations 11,080,173 Proceeds from sale of capital assets 16,980 Insurance proceeds 5,135 Payments to suppliers (106,474) Purchase of capital assets (8,065,915) Construction in progress (1,618,228) Other receipts 55,200 Private gifts for endowment purposes 9,654 Net cash provided by capital and related financing activities 1,376,525 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 77,724 Net cash provided by investing activities 77,724 Net increase in cash 2,831,071 Cash - beginning of year 14,473,729 Cash - end of year $ 17,304,800 RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE COMPARATIVE STATEMENT OF NET POSITION: Unrestricted Current $ 13,004,771 Restricted Noncurrent 4,300,029 $ 17,304,800 The accompanying notes are an integral part of the financial statements Page 26

31 STATEMENT OF CASH FLOWS (COLLEGE ONLY) FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (CONTINUED) RECONCILIATION OF NET OPERATING REVENUES (EXPENSES) TO NET CASH USED IN OPERATING ACTIVITIES: Operating loss $ (17,730,112) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation expense 3,946,402 Pension expense 1,150,786 Noncash Student awards -textbook scholarships 17,000 Change in assets and liabilities Student accounts receivable (70,660) Federal, state, county and local receivables 2,646 Other accounts receivable 37,712 Inventories 31,273 Prepaid expenses (131,284) Other assets (6,522) Accounts payable and accrued liabilities (135,456) Deposits 28,159 Deferred revenue 344,737 Deferred outflow of resources - related to pensions: Contributions made after the measurement date (1,259,836) Compensated absences (1,956) Other liabilities (1,678) Net cash used in operating activities $ (13,778,789) NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Donated textbook vouchers $ 25,000 The accompanying notes are an integral part of the financial statements Page 27

32 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 1: ORGANIZATION Atlantic Cape Community College (the College) is a two-year publicly supported community college operating under the provisions of N.J.S.A. 18A:64 A1, et seq. The College, which is located in Atlantic and Cape May Counties, New Jersey, offers a wide range of programs to meet the needs of the surrounding community. Financial support is received from county and state governments. The Board of Trustees of the College voted on August 28, 1998 to approve a resolution authorizing Atlantic Community College to enter into a joint venture college with Cape May County. Officials from the College, Atlantic County and Cape May County signed a contract outlining the terms of the agreement. The New Jersey Legislature approved changes to the New Jersey Community College funding formula. The jointure agreement became effective January 1, The Counties of Atlantic and Cape May provide support to the College based upon the funding formula specified in the jointure agreement. Atlantic County has nine voting members on the Board of Trustees of the College, including the Atlantic County Superintendent of Schools. Cape May County has five voting members on the Board of Trustees of the College, including the Cape May County Superintendent of Schools. One voting alumnus member from Atlantic or Cape May County is elected for a one-year term by each year s graduating class. Atlantic Cape Community College is a component unit of the County of Atlantic as described in Governmental Accounting Standards Board Statement No. 14 The Financial Reporting Entity. These financial statements would be either blended or discretely presented as part of the County s financial statements if the County prepared its financial statements in accordance with GASB Statement No. 34 Basic Financial Statements and Management s Discussion and Analysis for State and Local Governments. The County of Atlantic currently follows a basis of accounting and reporting model prescribed by the State of New Jersey, Department of Community Affairs, Division of Local Government Services. Therefore, the financial statements of the College are not presented with the County of Atlantic. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Component Units The financial statements of the College present the College and its component unit, Atlantic Cape Community College Foundation, Inc. (the Foundation). Because the restricted resources held by the Foundation can only be used by, or for the benefit of, the College, the Foundation is considered a component unit of the College. The Foundation is a discretely presented component unit and is reported in a separate column in the basic financial statements. The Foundation is a legally separate, tax-exempt entity, and acts primarily as a fund-raising organization to provide funding and support to Atlantic Cape Community College, its students and educational endeavors, through special event fund-raising and community philanthropy. Although the College does not control the timing or amount of receipts from the Foundation, the majority of resources, or income thereon, which the Foundation holds and invests, is restricted to the activities of the College by the donors. During the year ended June 30, 2015, the College received payments of $652,531 from the Foundation for scholarships, other contributions and capital asset donations. Complete financial statements for the Foundation can be obtained from the Foundation Office at 5100 Black Horse Pike, Mays Landing, NJ Page 28

33 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting The College prepares its financial statements in conformity with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB), including GASB Statement No. 34, Basic Financial Statements and Management s Discussion and Analysis for State and Local Governments, and GASB Statement No. 35, Basic Financial Statements and Management s Discussion and Analysis for Public Colleges and Universities, and the National Association of College and University Business Officers (NACUBO). The College follows the business-type activities reporting requirements of GASB Statement Nos. 34 and 35 for financial reporting purposes. Such financial statements are prepared on the accrual basis. The Foundation reports as a not-for-profit organization under Financial Accounting Standards Board (FASB) standards. As a result, certain revenue recognition criteria and presentation features are different from GASB revenue recognition and presentation features. Fund Accounting In order to ensure observance of limitations and restrictions placed on the use of resources available to the College, the accounts of the College are maintained in accordance with the principles of fund accounting. The procedure of fund accounting is one by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund. However, in the accompanying financial statements, all funds are combined for an entity-wide presentation to meet the financial reporting requirements under accounting principles generally accepted in the United States of America as promulgated by GASB. Contributions Contributions, including unconditional promises to give, are recognized as revenues in the period received. Conditional promises to give are not recognized until they become unconditional, that is, when the conditions on which they depend are substantially met. Contributions of assets other than cash are recorded at their estimated fair value. Contributions to be received after one year are discounted at an appropriate discount rate commensurate with the risks involved. Amortization of discount is recorded as additional contribution revenue in accordance with donor-imposed restrictions, if any, on the contributions. An allowance for uncollectible contributions receivable is provided based upon management s judgment including such factors as prior collection history, type of contribution and nature of fund-raising activity. Use of Estimates The preparation of 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. Page 29

34 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Cash Equivalents Cash and cash equivalents includes petty cash, amounts in deposits, and short-term investments with original maturities of three months or less. Certificates of deposit that have original maturity dates of more than three months but less than twelve months from the date of purchase are classified as investments. Cash in excess of daily requirements is invested in short-term marketable securities consisting of commercial paper, certificates of deposit and U.S. Treasury obligations. Such investments with maturities of three months or less are deemed to be cash equivalents for the purpose of the College s financial statement presentation. Cash is categorized as restricted in compliance with purpose restrictions, such as endowment provisions, Board of Trustee funds designations, or federal, state, or other external agency requirements. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. GASB 40 requires that disclosure be made as to the credit rating of all fixed income securities except obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government. The cash management fund is unrated. New Jersey statutes require that county colleges deposit public funds in public depositories located in New Jersey that are insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or by any other agency of the United States that insures deposits made in public depositories. County colleges are also permitted to deposit public funds in the State of New Jersey Cash Management Fund. New Jersey statutes require public depositories to maintain collateral for deposits of public funds that exceed depository insurance limits as follows: The market value of the collateral must be equal to at least 5% of the average daily balance of collected public funds on deposit. In addition to the above collateral requirements, if the public funds deposited exceed 75% of the capital funds of the depository, the depository must provide collateral having a market value at least equal to 100% of the amount exceeding 75%. All collateral must be deposited with the Federal Reserve Bank of New York, the Federal Reserve Bank of Philadelphia, the Federal Home Loan Bank of New York, or a banking institution that is a member of the Federal Reserve System and has capital funds of not less than $25,000,000. Page 30

35 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Accounts Receivable Accounts receivable consists of tuition and fees charged to students and various other receivables. Accounts receivable are recorded net of estimated uncollectible amounts. Revenues are charged and an allowance is credited with a provision for uncollectible accounts based on experience and on any unusual circumstances that may affect the ability of students or student sponsors to meet their obligations. It is the College policy to write off uncollectible accounts after two years of delinquency. Accounts deemed uncollectible are charged against this allowance. Accounts receivable are reported net of an accumulated allowance of $1,115,191 as of June 30, Tuition Each year the Board of Trustees sets tuition and fee rates based on a per credit hour rate. Rates vary based upon residence within Atlantic and Cape May Counties, out of county, out of state and international students. Inventory Inventory is valued at cost, with cost being determined on a first-in, first-out basis. Prepaid Expenses Prepaid expenses represent payments made to vendors for services that will benefit periods beyond June 30, Capital Assets Capital assets include land, building and improvements, equipment and infrastructure assets, such as sewer. Capital assets are defined by the College as assets with an initial unit cost of $2,500 or more, or, an aggregate purchase greater than $15,000. The costs of normal maintenance and repairs that do not add value to the asset are not capitalized. Major outlays for capital assets are capitalized as projects are constructed. Such assets are recorded at historical cost and net of accumulated depreciation and amortization of $45,964,396 for the year ended June 30, On-Behalf Payments for Pension Contributions In fiscal year 1997, the College adopted the requirements of Governmental Accounting Standards Board (GASB) Statement No. 24 Accounting and Financial Reporting for Certain Grants and Other Financial Assistance. GASB Statement No. 24 recommends that revenue and expenditures be recorded in the financial statements for the State of New Jersey Pension payments for the Alternate Benefit Program (ABP). Page 31

36 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Depreciation and Amortization Depreciation has been applied using the straight-line method, with the half-year convention, over the following useful lives: Buildings and improvements Infrastructure Improvements (acquired after June 30, 2005) Other improvements (acquired after June 30, 2006) Small building Equipment and furnishings Vehicles Library books and audiovisual equipment Computer equipment (acquired after June 30, 2001) 40 years 40 years 15 years 25 years 20 years 10 years 7 years 7 years 5 years Amortization has been applied over the term of the applicable lease as follows: Leasehold improvements Other assets 2.5 to 5 years 5 to 20 years Depreciation and amortization expense amounted to $3,946,402 for the year ended June 30, Classification of Revenue The College has classified its revenues as either operating or non-operating revenues in accordance with GASB Statement No. 33 Accounting and Financial Reporting for non-exchange Transactions. Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship discounts and allowances, (2) sales and services of auxiliary enterprises, net of scholarship discounts and allowances and (3) most federal and state grants and contracts as well as federal appropriations. Non-operating revenues include activities that have the characteristics of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as non-operating revenues by GASB Statement No. 9 Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting and GASB No. 35, such as state appropriations and investment income. Unearned Revenue Unearned revenue represents tuition revenue that has been received on or before June 30, 2015 for classes that are scheduled in Summer 2015 and Fall It may also include cash which has been received for grants but not yet earned. Enrollment from an academic term (for example, summer session) which is conducted over a fiscal year end, is reported totally within the fiscal year in which the term is predominantly conducted. The first Summer 2015 session began May 26, Page 32

37 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Scholarship Discounts and Allowances Student tuition and fee revenues are reported net of scholarship discount and allowances in the statement of revenues, expenses and changes in net position. Scholarship discount and allowances are the difference between the stated charge for goods and services provided by the College, and the amount that is paid by students and/or third parties making payments on the students behalf. Certain government grants, such as Pell grants, as well as other federal grants and state grants are recorded as either operating or non-operating revenue in the College s financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees, the College has recorded a scholarship discount and allowance. The amount of scholarship discount and allowances for the fiscal year ended June 30, 2015 was $12,905,396. Federal Financial Assistance Programs The College participates in the following federally funded financial assistance programs: Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study Grants and the Federal Direct Loan Program. Federal programs are audited in accordance with the Single Audit Act Amendments of 1996, the U.S. Office of Management and Budget Revised Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and the OMB A-133 Compliance Supplement. Income Taxes The College is a political subdivision of the State of New Jersey and is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended. Deferred Outflows and Deferred Inflows of Resources The statement of net position reports separate sections for deferred outflows of resources and deferred inflows of resources. Deferred outflows of resources, reported after total assets, represents a reduction of net position that applies to a future period(s) and will be recognized as an outflow of resources (expense) at that time. Deferred inflows of resources, reported after total liabilities, represents an acquisition of net position that applies to a future period(s) and will be recognized as an inflow of resources (revenue) at that time. Transactions are classified as deferred outflows of resources and deferred inflows of resources only when specifically prescribed by the Governmental Accounting Standards Board (GASB) standards. The College is required to report the following as deferred outflows of resources and deferred inflows of resources: Defined Benefit Pension Plans - The difference between expected (actuarial) and actual experience, changes in actuarial assumptions, net difference between projected (actuarial) and actual earnings on pension plan investments, changes in the College s proportion of expenses and liabilities to the pension as a whole, differences between the College s pension contribution and its proportionate share of contributions, and the College s pension contributions subsequent to the pension valuation measurement date. Page 33

38 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Public Employees' Retirement System ( PERS ) and additions to/deductions from PERS s fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Net Position The College s net position is classified as follows: Net Investment in Capital Assets represents the College s total investment in capital assets, net of accumulated depreciation. Restricted for Non-expendable Net Position include resources in which the College is prohibited from expending the principal portion of the funds and is legally or contractually obligated to spend the interest earnings in accordance with restrictions imposed by external third parties. Restricted for Expendable Net Position include resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties. Unrestricted Net Position represent resources derived from student tuition and fees, state and county appropriations and sales and services of educational departments or auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the College and may be used at the discretion of the Board to meet current expenses for any purposes. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current year financial statements. NOTE 3: SUPPORT OF THE COLLEGE State Aid The New Jersey Department of Treasury, Office of Management and Budget (OMB) allocates the annual appropriation for community college operating aid according to credit hour enrollments as prescribed by N.J.S.A. 18A:64A-22. County Aid Support is provided by the Counties of Atlantic and Cape May and from in-county, out-of-county, and out-of-state students who pay tuition and fees up to approximately $2,076, $2,901 and $3,681, respectively, per full-time student for each of the two academic semesters. Page 34

39 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 3: SUPPORT OF THE COLLEGE (CONTINUED) County Aid (Continued) The Board of School Estimate of Atlantic Cape Community College (consisting of four members of the Boards of Chosen Freeholders (two from each county) and two members of the College s Board of Trustees) adopts a budget for each fiscal year ending June 30 and levies the amount necessary to be raised during that fiscal period on the Atlantic County and Cape May County Boards of Chosen Freeholders. The County operates on a calendar year fiscal period and generates the necessary revenue through a levy on a local property in the form of taxation. NOTE 4: ECONOMIC DEPENDENCY The College receives a substantial amount of its support from federal, state and county governments. A significant reduction in the level of support, if this were to occur, may have an effect on the College s programs and activities. NOTE 5: CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of the following as of June 30, 2015: Cash and cash equivalents: Cash on hand $ 1,900 Cash (bank accounts) 14,269,309 New Jersey Cash Management Fund 3,033,591 $ 17,304,800 Bank balances of cash amounted to $14,974,528 as of June 30, 2015, of which $250,000 was FDIC insured. Bank balances in excess of insured amounts are collateralized in accordance with the provisions of the Governmental Unit Deposit Protection Act (GUDPA). New Jersey Cash Management Fund During the year, the College participated in the New Jersey Cash Management Fund. The Fund is governed by regulations of the State investment Council, who prescribe standards designed to insure the quality of the investments in order to minimize risk to the Fund s participants. Deposits with the New Jersey Cash Management Fund are not subject to FDIC or GUDPA categorizations. At June 30, 2015, the College had $3,033,591 invested in the Fund. NOTE 6: ENDOWMENTS Donor restricted endowments totaled $817,160 for the year ended June 30, Investments, if any, are stated at fair value at the date of the financial statements. NOTE 7: PROMISE TO GIVE Unconditional promises to give at June 30, 2015 are as follows: Pledges Receivable $ 96,483 Page 35

40 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 8: INVENTORIES Inventory for the college at June 30, 2015 consisted of the following: Supplies $ 60,659 Perishable Stores 22,551 $ 83,210 NOTE 9: NON-CURRENT LIABILITIES Non-current liability activity for the year ended June 30, 2015 was as follows: June 30, 2014 Additions Reductions June 30, 2015 Current Portion Deposits $ 156,560 $ 28,159 $ - $ 184,719 $ 9,267 Compensated Absences 1,847, ,919 (136,875) 1,845, ,730 Equipment Leasing Fund 224,978 (24,985) 199,993 25,003 Net Pension Liability 31,718,058 (2,770,895) 28,947,163 - $ 33,947,115 $ 163,078 $ (2,932,755) $ 31,177,438 $ 171,000 NOTE 10: LOAN FUND In fiscal year ended June 30, 2014, the College s remaining Federal Perkins loan principal was assigned to and accepted by the United States Department of Education. As a result, the College has no loans receivable or payable as of June 30, In fiscal year ended June 30, 2015, the College received official notification from the United States Department of Education that the liquidation of its Federal Perkins Loan Fund portfolio is complete. NOTE 11: COMPENSATED ABSENCES College employees may accrue annual vacation and sick leave based on length of service but subject to certain limitations regarding the amount that will be paid in the event of retirement or termination. Personal time earned but unused at June 30 is rolled into sick leave and accounted for in compensated absences. The estimated costs of compensated absences, including the college s FICA match, for which employees are vested is estimated at $1,845,563 for the year ended June 30, Page 36

41 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 12: NET POSITION The following is a summary of Net Position balances of the College for the fiscal year ended June 30, 2015: Net Investment in Capital Assets Gross $ 67,194,490 Related Debt Total Net Invested In Capital Assets 67,194,490 Restricted Net Position Nonexpendable Scholarships and fellowships 817,160 Expendable Grants, scholarships and fellowships 221,473 Consent Decree 300,000 State Unemployment Fund 775,000 Capital Projects 1,212,678 Renewal and Replacement Reserve (JEC Bond Act) 971,300 Student Government 112,776 Appropriated for Encumbrances 87,096 Subtotal Expendable 3,680,323 Total Restricted Net Position 4,497,483 Unrestricted Net Position (Deficit) Assignment to FY16 budget 835,120 Pension Related Items (30,334,428) Undesignated before Pension Related Items 6,682,378 Total Unrestricted Net Position (22,816,930) TOTAL NET POSITION $ 48,875,043 NOTE 13: NONCASH DONATIONS During the year ended June 30, 2015, the college received the following non-cash donations that have been reflected in the financial statements: Student textbook vouchers $ 25,000 Page 37

42 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 14: EXPENDITURES Operating expenditures by natural classification for the year ended June 30, 2015 were: Compensation: Salaries $ 24,392,423 Staff Benefits 9,238,260 Total Compensation 33,630,683 Other Expenditures: Supplies and other 5,002,350 Utilities and telephone 1,633,998 Insurance 704,949 Repairs and Maintenance 222,468 Rent 7,083 Depreciation and amortization 3,946,402 Scholarship and student aid 6,210,634 Travel 220,360 Total other expenses before auxiliary 17,948,244 enterprises Auxiliary Enterprises Student Activities expenses 148,573 Total Expenditures $ 51,727,500 NOTE 15: DEFERRED COMPENSATION SALARY ACCOUNT The College offers its employees a Deferred Compensation Plan in accordance with Internal Revenue Service Code 457. The Plan, available to full time employees at their option, permits employees to defer a portion of their salary to future years. The deferred compensation is not available to participants until termination, retirement, death or unforeseeable emergency. Amounts deferred under Section 457 plans must be held in trust for the exclusive benefit of participating employees and not be accessible by the College or its creditors. The Plan is administered by the College through TIAA-CREF. Page 38

43 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 16: PENSION PLANS A substantial number of the College's employees participate in one of the two pension plans administered and/or regulated by the New Jersey Division of Pensions and Benefits: (1) the Public Employees' Retirement System; or (2) the New Jersey Alternate Benefit Program. Each plan has a Board of Trustees that is primarily responsible for its administration. The Division issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: State of New Jersey Division of Pensions and Benefits P.O. Box 295 Trenton, New Jersey In addition, several College employees participate in the Defined Contribution Retirement Program, which is a defined contribution pension plan. This plan is administered by Prudential Financial for the New Jersey Division of Pensions and Benefits. General Information About the Pension Plans Plan Descriptions Public Employees' Retirement System - The Public Employees' Retirement System ( PERS ) is a costsharing multiple-employer defined benefit pension plan which was established as of January 1, Full-time employees of the College, provided the employee is not required to be a member of another state-administered retirement system or other state pension fund or local jurisdiction s pension fund, are covered under PERS. Alternate Benefit Program - The New Jersey Alternate Benefit Program (ABP) is a tax-sheltered, defined contribution retirement program for certain higher education faculty, instructors and administrators which was established pursuant to P.L.1969, c. 242 (N.J.S.A. 52:18A-107 et seq., specifically, 18A:66-192). Defined Contribution Retirement Program - The Defined Contribution Retirement Program ( DCRP ) is a multiple-employer defined contribution pension fund which was established on July 1, 2007, under the provisions of Chapter 92, P.L and Chapter 103, P.L (N.J.S.A. 43:15C-1 et. seq.), and expanded under the provisions of Chapter 89, P.L and Chapter 1, P.L Individuals covered under DCRP are employees enrolled in PERS on or after July 1, 2007, who earn salary in excess of established maximum compensation limits; employees otherwise eligible to enroll in PERS on or after November 2, 2008, who do not earn the minimum annual salary for a certain enrollment tier but who earn salary of at least $5, annually; and employees otherwise eligible to enroll in PERS after May 21, 2010 who do not work the minimum number of hours per week required for certain enrollment tiers, but who earn salary of at least $5, annually. Page 39

44 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 16: PENSION PLANS (CONTINUED) General Information About the Pension Plans (Continued) Vesting and Benefits Provisions Public Employees Retirement System - The vesting and benefit provisions are set by N.J.S.A. 43:15A. PERS provides retirement, death and disability benefits. All benefits vest after ten years of service, except for medical benefits, which vest after 25 years of service or under the disability provisions of PERS. The following represents the membership tiers for PERS: Tier Definition 1 Members who were enrolled prior to July 1, Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, Members who were eligible to enroll on or after November 2, 2008 and prior to May 22, Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, Members who were eligible to enroll on or after June 28, 2011 Service retirement benefits of 1/55th of final average salary for each year of service credit is available to tiers 1 and 2 members upon reaching age 60 and to tier 3 members upon reaching age 62. Service retirement benefits of 1/60th of final average salary for each year of service credit is available to tier 4 members upon reaching age 62 and tier 5 members upon reaching age 65. Early retirement benefits are available to tiers 1 and 2 members before reaching age 60, tiers 3 and 4 before age 62 with 25 or more years of service credit and tier 5 with 30 or more years of service credit before age 65. Benefits are reduced by a fraction of a percent for each month that a member retires prior to the age at which a member can receive full early retirement benefits in accordance with their respective tier. Tier 1 members can receive an unreduced benefit from age 55 to age 60 if they have at least 25 years of service. Deferred retirement is available to members who have at least 10 years of service credit and have not reached the service retirement age for the respective tier. Alternate Benefit Program - ABP provides retirement benefits, life insurance and disability coverage to qualified members. Defined Contribution Retirement Program - Eligible members are provided with a defined contribution retirement plan intended to qualify for favorable Federal income tax treatment under IRC Section 401(a), a noncontributory group life insurance plan and a noncontributory group disability benefit plan. A participant's interest in that portion of his or her defined contribution retirement plan account attributable to employee contributions shall immediately become and shall at all times remain fully vested and nonforfeitable. A participant's interest in that portion of his or her defined contribution retirement plan account attributable to employer contributions shall be vested and nonforfeitable on the date the participant commences the second year of employment or upon his or her attainment of age 65, while employed by an employer, whichever occurs first. Page 40

45 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 16: PENSION PLANS (CONTINUED) General Information About the Pension Plans (Continued) Contributions Public Employees Retirement System - The contribution policy is set by N.J.S.A. 43:15A and requires contributions by active members and contributing employers. Members contribute at a uniform rate. Pursuant to the provisions of Chapter 78, P.L. 2011, the active member contribution rate increased from 5.5% of annual compensation to 6.5% plus an additional 1% phased-in over 7 years beginning in July The member contribution rate was 6.78% in State fiscal year The phase-in of the additional incremental member contribution rate takes place in July of each subsequent State fiscal year. The rate for members who are eligible for the Prosecutors Part of PERS (Chapter 366, P.L. 2001) increased from 8.5% of base salary to 10%. Employers' contribution amounts are based on an actuarially determined rate. The College s contribution amounts are based on an actuarially determined rate which included the normal cost and unfunded accrued liability. The College s contractually required contribution rate for the fiscal year ended June 30, 2015 was 12.83% of the College s covered-employee payroll, actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions to the pension plan from the College were $1,259,836 for the fiscal year ended June 30, Employee contributions were $687,471 for the fiscal year ended June 30, Alternate Benefit Program - The contributions requirements of plan members are determined by State statute. In accordance with N.J.S.A. 18A:66-173, required contributions, calculated on the employee s base pay, are 5% for plan members, and 8% for employers. Plan members may make additional voluntary contributions subject to section 403(b) of the internal revenue code. Under N.J.S.A 18A:66-174, most employer contributions are made by the State of New Jersey onbehalf of the College. The College is responsible for the employer contributions for non-academic employees. Plan members direct the investment of contributions to insurance companies and mutual fund companies selected by the New Jersey Division of Pensions' Pension Provider Selector Board. These companies administer plan funds based on alternate benefit contracts with the New Jersey Division of Pensions. Amounts deferred under the plan are not available to employees until termination, retirement, death or unforeseeable emergency. The plan carriers are as follows: AXA Financial (Equitable) MassMutual (formerly The Hartford) MetLife (formerly Travelers/Citistreet) Prudential Retirement services Teachers Insurance and Annuity Association/ College Retirement Equities Fund (TIAA/CREF) The Variable Annuity Life Insurance Company (VALIC) VOYA Financial Services During the fiscal year end June 30, 2015, employee contributions to the plan were $469,953 and the State of New Jersey made on-behalf payments for the College contributions of $610,914 Page 41

46 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 16: PENSION PLANS (CONTINUED) General Information About the Pension Plans (Continued) Contributions (Continued) Defined Contribution Retirement Program - State and local government employers contribute 3% of the employees' base salary. Active members contribute 5.5% of base salary. For the fiscal year ended June 30, 2015, employee contributions totaled $9,879, and the College recognized pension expense of $6,960. There were no forfeitures during the fiscal year. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions The following information relates to the Public Employees' Retirement System ( PERS ), which is a cost-sharing multiple-employer defined benefit pension plan. At June 30, 2015, the College reported a liability of $28,947,163 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, The total pension liability was calculated through the use of updated procedures to roll forward from the actuarial valuation date to the measurement date of June 30, The College s proportion of the net pension liability was based on a projection of the College s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2014, the College s proportion was %, which was a decrease of % from its proportion measured as of June 30, For the fiscal year ended June 30, 2015, the College recognized $1,193,010, in its financial statements for pension expense for PERS. At June 30, 2015, the College reported deferred outflows of resources and deferred inflows of resources related to PERS from the following sources: Deferred Outflow of Resources Deferred Inflow of Resources Difference Between Expected $ - $ - and Actual Experience Changes of Assumptions 910,254 - Net Difference Between Projected and Actual Earnings on Pension Plan Investments - 1,725,094 Changes in Proportion and Differences Between College Contributions and Proportionate Share of Contributions - 1,832,261 College Contributions Subsequent to to Measurement Date 1,259,836 - $ 2,170,090 $ 3,557,355 Page 42

47 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 16: PENSION PLANS (CONTINUED) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Fiscal Year Ending June 30, 2015 $ (857,463) 2016 (857,463) 2017 (857,463) 2018 (857,463) ,578 Thereafter $ 239,174 (2,647,100) Actuarial Assumptions The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, The total pension liability was calculated through the use of updated procedures to roll forward from the actuarial valuation date to the measurement date of June 30, This actuarial valuation used the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.01% Salary Increases: % % Based on Age Thereafter 3.15% % Based on Age Investment Rate of Return 7.90% Mortality Rate Table RP-2000 Period of Actuarial Experience Study upon which Actuarial Assumptions were Based July 1, June 30, 2011 Mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (setback 1 year for females) with adjustments for mortality improvements from the base year of 2012 based on Projection Scale AA. Page 43

48 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 16: PENSION PLANS (CONTINUED) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Actuarial Assumptions (Continued) In accordance with State statute, the long-term expected rate of return on plan investments is determined by the State Treasurer, after consultation with the Directors of the Division of Investments and Division of Pension and Benefits, the board of trustees and the actuaries. Best estimates of arithmetic real rates of returns for each major asset class included in PERS s target asset allocation as of June 30, 2014 are summarized in the following table: Long-Term Target Expected Real Asset Class Allocation Rate of Return Cash 6.00% 0.80% Core Bonds 1.00% 2.49% Intermediate-Term Bonds 11.20% 2.26% Mortgages 2.50% 2.17% High Yield Bonds 5.50% 4.82% Inflation-Indexed Bonds 2.50% 3.51% Broad US Equities 25.90% 8.22% Developed Foreign Equities 12.70% 8.12% Emerging Market Equities 6.50% 9.91% Private Equity 8.25% 13.02% Hedge Funds / Absolute Return 12.25% 4.92% Real Estate (Property) 3.20% 5.80% Commodities 2.50% 5.35% % Discount Rate The discount rate used to measure the total pension liability was 5.39% and 5.55% as of June 30, 2014 and 2013, respectively. These single blended discount rates were based on the long-term expected rate of return on pension plan investments of 7.9%, and a municipal bond rate of 4.29% and 4.63% as of June 30, 2014 and 2013, respectively, based on the Bond Buyer Go 20-Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/ Aa or higher. The projection of cash flows used to determine the discount rates assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made based on the average of the last five years. Based on those assumptions, the plan's fiduciary net position was projected to be available to make projected future benefit payments of current plan members through Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2033 and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability. Page 44

49 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 16: PENSION PLANS (CONTINUED) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Sensitivity of College s Proportionate Share of Net Pension Liability to Changes in the Discount Rate The following presents the College s proportionate share of the net pension liability at June 30, 2014 calculated using a discount rate of 5.39%, as well as what the College s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rates used: 1% Current 1% Decrease Discount Rate Increase (4.39%) (5.39%) (6.39%) College's Proportionate Share of the Net Pension Liability $ 36,416,517 $ 28,947,163 $ 22,674,807 Pension Plan Fiduciary Net Position Detailed information about each pension plan s fiduciary net position is available in the separately issued New Jersey Division of Pension and Benefits financial report. Information on where to obtain the report is indicated at the beginning of this note. NOTE 17: CAPITAL IMPROVEMENT PROGRAM At June 30, 2015, the status of bond related capital improvement projects was: Budget Expended FY14 Chapter 12 Atlantic County $ 4,200,000 $ 184,884 FY13 Chapter 12 Atlantic County 1,500, ,939 FY12 Chapter 12 Atlantic County 8,500,000 2,413,270 FY10 Chapter 12 Atlantic County 2,352,750 2,067,442 FY08 Chapter 12 Atlantic County 9,009,000 7,861,243 FY07 Chapter 12 Atlantic County 6,244,000 5,662,276 The bond related capital improvement project expenditures have been reflected in the accompanying financial statements. Reimbursements from the County and the State occur as capital expenditures are incurred and are recorded by the College in accordance with the terms of the agreements. Page 45

50 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 18: CAPITAL ASSET ACTIVITY The fiscal year 2015 and 2014 activity in capital assets and accumulated depreciation was as follows: June 30, 2014 June 30, 2015 Balance Additions Retirements Balance Non-depreciable assets: Land $2,360,035 $ 10,062 $ - $2,370,097 Construction in Progress 18,923,210 1,618,228 (18,923,210) 1,618,228 21,283,245 1,628,290 (18,923,210) 3,988,325 Depreciable assets: Land Improvements 2,383, ,383,401 Infrastructure 203,915 20, ,847 Buildings and Improvements 65,916,193 24,031,656-89,947,849 Furniture and Equipment 9,587,593 2,899,494 (397,777) 12,089,310 Library Collection 1,322,367 17,664-1,340,031 Other Improvements 9, ,600 Leasehold Improvements 121, ,295 Other Assets 3,100,111 9,317 (55,200) 3,054,228 82,644,475 26,979,063 (452,977) 109,170,561 Less accumulated depreciation and amortization Land Improvements 996, ,893-1,155,302 Infrastructure 17,976 5,360-23,336 Buildings and Improvements 32,277,325 2,732,172-35,009,497 Furniture and Equipment 6,830, ,320 (397,777) 7,197,864 Library Collection 1,177,021 53,670-1,230,691 Other Improvements 2, ,264 Leasehold Improvements 121, ,295 Other Assets 1,047, ,603 (55,200) 1,223,147 42,470,971 3,946,402 (452,977) 45,964,396 Net Depreciable Assets 40,173,504 23,032,661-63,206,165 Net Capital Assets $61,456,749 $24,660,951 $ (18,923,210) $67,194,490 Depreciation expense for the year ended June 30, 2015 was $3,946,402. Projects were completed during the year resulting in $18,923,210 being reclassified from Construction in Progress. Page 46

51 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 19: COMMITMENTS AND CONTINGENCIES Operating Leases The College leases copiers, and facilities under long-term operating leases. Rental expenditures in fiscal year 2015 under these leases amounted to $58,243. Aggregate approximate future minimum rental payments under non-cancelable operating leases are as follows: Year Ending Rental June 30 Payment Capital Leases 2016 $ 46, , , ,727 There are no future minimum lease payments under capital leases. Lease Purchase The College has entered into a lease agreement with the New Jersey Educational Facilities Authority for the lease-purchase of equipment approved by the State Board of Higher Education. The total approved project amount is $803,542. The College will pay to the Authority 25% of the principal and interest on the bonds to be issued to finance equipment purchases. Lease payments to the Authority for the fiscal year ended June 30, 2015 totaled $24,985. The title to the equipment will pass to the College upon final payment of the lease obligation. Approximate future minimum lease payments are: Year Ending June 30 Lease Payment 2016 $ 25, , , , ,999 Solar Site Lease and Power Purchase Agreement The College entered into a solar site lease agreement and power purchase agreement with Energenic, LLC, on February 26, The College has no capital investment, but will be assured of a predictable cost of energy over the 15 year term of the lease. Solar arrays were substantially complete in October, 2013 on the Mays Landing and Cape May County campuses. Page 47

52 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 19: COMMITMENTS AND CONTINGENCIES (CONTINUED) Rutgers University Ground Lease The College has entered into a 50 year ground lease with Rutgers University. Rutgers completed construction of an academic building on the College s Mays Landing campus which opened for classes in September, The tenant shall pay the college an annual student use fee, adjusted annually. The student use fees for the year ended June 30, 2015 were $26,885. Encumbrances The College has encumbrances representing outstanding purchase orders and other commitments with various vendors for materials and services not received as of June 30, 2015 as follows: Current unrestricted $ 87,096 Not included in the above schedule are commitments of $7,270 for June 30, 2015 to be offset with current restricted funds, and capital projects commitments of $6,670,061 to be offset with state Chapter 12 and local CRDA and county match funds. Except as reported as allocated fund balances on the balance sheet, these commitments are not reflected on the accompanying financial statements. Assignment To FY16 Current Operating Budget The Board of Trustees of the College has assigned a $835,120 fund balance transfer into its FY16 Current Operating Budget - Education and General Revenues. Restricted Maintenance Reserve The Jobs Education and Competitiveness Grant (JEC) which provided funding for the Cape May County Campus requires the college to retain a maintenance reserve of $971,300. Grantor Agencies The College receives financial assistance from the State of New Jersey and the U.S. Government in the form of grants. Entitlement to the funds is generally conditional upon compliance with terms and conditions of the grant agreements and applicable regulations, including the expenditure of the funds for eligible purposes. The State and Federal grants received and expended during the fiscal year ended June 30, 2015 were subject to Federal OMB Circular A-133 and New Jersey OMB Circular which mandates that grant revenues and expenditures be audited in conjunction with the College s annual audit. In addition to the aforementioned annual audit, all grants and cost reimbursements are subject to financial and compliance audits by the State and Federal grantor agencies. Page 48

53 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 20: RISK MANAGEMENT The College is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The College is self-insured for unemployment benefits compensation and participates in a self-insurance pool for workers compensation. Property and Liability Insurance Comprehensive commercial business insurance is purchased through a cooperative pool. Liability coverage limits are as follows: Property $113,330,674 General Liability 1,000,000 Automobile Liability 1,000,000 Crime / Employee Bond 1,000,000 Board of Ed Liability 5,000,000 Board of Ed Excess Liability/ Products 15,000,000 Umbrella, Auto and General 15,000,000 Workers Compensation Statutory Environmental 1,000,000/3,000,000 Flood & Earthquake 10,000,000 Boiler & Machinery 50,000,000 Data Security 1,000,000 Owned UAV and Non-owned Aircraft 2,000,000 Builder s Risk 26,809,962 New Jersey Unemployment Compensation Insurance The College has elected to fund its New Jersey Unemployment Compensation Insurance under the "Benefit Reimbursement Method". Under this plan, the College is required to reimburse the New Jersey Unemployment Trust fund for benefits paid to its former employees and charged to its account with the State. The College is billed quarterly for amounts due to the State. The following is a summary of College contributions, reimbursements to the State for benefits paid and the ending balance of the College's restricted net assets for the current and previous four fiscal years: Fiscal Year College Employee Amount Ending Ended June 30, Contributions Contributions Reimbursed Balance 2015 $67,925 $46,970 ($114,895) $775, ,303 45,398 (102,701) 775, ,376 46,743 (189,119) 750, ,145 49,509 (190,907) 750, ,835 48,992 (125,711) 489,253 Page 49

54 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 20: RISK MANAGEMENT (CONTINUED) Workers Compensation Insurance Pool The College is a member of the New Jersey Community College Insurance Pool, a non-profit selfinsurance pool created pursuant to the provisions of the New Jersey State Government Regulations Act, Chapter 204, P.L. 1985, to provide workers compensation insurance to its members. Membership in the insurance pool is limited to New Jersey community colleges. As of June 30, 2015, fourteen colleges participated in the insurance pool. Contributions to the Pool are payable in an annual premium and are based on actuarial assumptions determined by the Pool's actuary. Contributions to the Pool for the fiscal year ended June 30, 2015 were $304,777. NOTE 21: LITIGATION The College is involved in several claims and lawsuits incidental to its operations. In the opinion of the administration and legal counsel, the ultimate resolution of these matters will not have a material adverse effect on the financial position of the College. NOTE 22: NJ COMMUNITY COLLEGE CONSORTIUM FOR WORKFORCE AND ECONOMIC DEVELOPMENT AGREEMENT The College paid a $100,000 fee during fiscal year 2004 to participate in the New Jersey County College Workforce Consortium. The participation agreement allows the College to share in royalties and training revenues as a subcontractor. The effective date of participation begins July 1, 2004, and extended through September 30, The participation fee was amortized over this period. Royalties earned for the year ended June 30, 2015 were $40,353. There is no future amortization expense related to this cost. NOTE 23: STATE OF NJ POST-RETIREMENT MEDICAL BENEFITS P.L. 1987, c.384 of P.L. 1990, c.6 required Teachers Pensions and Annuity Fund ( TPAF ) and the Public Employees Retirement System ( PERS ), respectively, to fund post-retirement medical benefits for those State employees who retire after accumulating 25 years of credited service or on a disability retirement. P.L. 2007, c.103 amended the law to eliminate the funding of postemployment medical benefits through the TPAF and PERS. It created separate funds outside of the pension plans for the funding and payment of postemployment medical benefits for retired State employees and retired educational employees. As of June 30, 2014, there were 103,432 retirees eligible for postemployment medical benefits, and the State contributed $1.04 billion on their behalf. The cost of these benefits is funded through contributions by the State in accordance with P.L. 1994, c.62. Funding of postretirement medical premiums changed from a pre-funding basis to a pay-as-you-go basis beginning in Fiscal Year The State is also responsible for the cost attributable to P.L c.126, which provides free health benefits to members of PERS and the Alternate Benefit Program who retire from a board of education or county college with 25 years of service. The State paid $165.8 million toward Chapter 126 benefits for 18,122 eligible retired members in fiscal year Page 50

55 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 24: IMPACT OF RECENTLY ISSUED ACCOUNTING PRINCIPLES Recently Issued and Adopted Accounting Pronouncements For the fiscal year ended June 30, 2015, the College adopted GASB 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27, and GASB 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68. As a result of adopting such Statements, the College was required to measure and recognize liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures related to their defined benefit pensions. The cumulative effect of adopting GASB Statements No. 68 and No. 71 totaled $30,443,478, and was recognized as a restatement of the College s June 30, 2014 net position on the statement of revenues, expenses and changes in net position (see Note 25). Recently Issued Accounting Pronouncements The GASB has issued the following Statements which will become effective in future fiscal years as shown below: Statement No. 72, Fair Value Measurement and Application. This Statement addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This Statement provides guidance for determining a fair value measurement for financial reporting purposes. This Statement also provides guidance for applying fair value to certain investments and disclosures related to all fair value measurements. The Statement will become effective for the College in fiscal year Management has not yet determined the impact of this Statement on the financial statements. Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. The objective of this Statement is to improve the usefulness of information about pensions included in the general purpose external financial reports of state and local governments for making decisions and assessing accountability. The Statement will become effective for the College in fiscal year Management does not expect this Statement will have an impact on the financial statements. Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. The objective of this Statement is to improve the usefulness of information about postemployment benefits other than pensions (other postemployment benefits or OPEB) included in the general purpose external financial reports of state and local governmental OPEB plans for making decisions and assessing accountability. The Statement will become effective for the College in fiscal year Management does not expect this Statement will have an impact on the financial statements. Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). It also improves information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. The Statement will become effective for the College in fiscal year Management has not yet determined the impact of this Statement on the financial statements. Page 51

56 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 24: IMPACT OF RECENTLY ISSUED ACCOUNTING PRINCIPLES (CONTINUED) Recently Issued Accounting Pronouncements (Continued) Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The objective of this Statement is to identify, in the context of the current governmental financial reporting environment, the hierarchy of generally accepted accounting principles (GAAP). The GAAP hierarchy consists of the sources of accounting principles used to prepare financial statements of state and local governmental entities in conformity with GAAP and the framework for selecting those principles. This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and nonauthoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP. The Statement will become effective for the College in fiscal year Management does not expect this Statement will have an impact on the financial statements. Statement No. 77, Tax Abatement Disclosures. This Statement requires governments that enter into tax abatement agreements to disclose certain information about the agreements. The Statement will become effective for the College in fiscal year Management does not expect this Statement will have an impact on the notes to the financial statements. NOTE 25: RESTATEMENT OF PRIOR PERIOD NET POSITION As indicated in note 24 to the financial statements, the College adopted GASB Statement 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68, for the fiscal year ended June 30, As a result of implementing these two Statements, a restatement of unrestricted net position on the statement of revenues, expenses and changes in net position was required to record the College s proportionate share of its net pension liability. The cumulative effect on the financial statements as reported for June 30, 2014 is as follows: Net Position As Previously GASB 68 Implementation Net Position Reported Net Pension Deferred As Restated June 30, 2014 Liability (1) Outflows (2) June 30, 2014 Net Investment in Capital Assets $ 61,456,749 $ 61,456,749 Restricted for: Non-expendable: Scholarships and fellowships 807, ,479 Expendable 4,057,005 4,057,005 Unrestricted 7,212,590 $ (31,718,058) $ 1,274,580 (23,230,888) Total Net Position $ 73,533,823 $ (31,718,058) $ 1,274,580 $ 43,090,345 (1) Represents the College's proportionate share of the Public Employees' Retirement System June 30, 2013 Net Pension liability. (2) Represents the College's beginning deferred outflow of resources for contributions subsequent to the measurement date, fiscal year pension contribution paid. Page 52

57 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Atlantic Cape Community College Foundation, Inc. was formed in 1978 as an independent nonprofit organization for the purpose of promoting and furthering higher education among the citizens of Atlantic and Cape May Counties, New Jersey and to provide physical facilities and services at Atlantic Cape Community College. The Foundation is considered a component unit of Atlantic Cape Community College for financial reporting purposes. Accordingly, the Foundation s financial statements are included in the College s basic financial statements. Financial Statement Presentation These financial statements have been prepared to focus on the Foundation as a whole and to present balances and transactions according to the existence or absence of donor-imposed restrictions. Net assets and changes therein are classified as follows: Unrestricted net assets- Net assets that are not subject to donor-imposed restrictions. Temporarily restricted net assets-net assets subject to donor-imposed stipulations that may or will be met by actions of the Foundation and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Permanently restricted net assets- Permanently restricted net assets represent the principal amount of gifts and bequests accepted with the donor stipulation that the principal be maintained intact in perpetuity until the occurrence of a specified event, or for a specified period, with only the income to be utilized. Donated Services A substantial number of unpaid volunteers have made significant contributions of their time to operating the various Foundation programs as well as to fundraising activities. No amounts have been recognized in the accompanying statement of activities because the criteria for recognition of such volunteer effort under generally accepted accounting principles has not been satisfied. Under this criterion, services are recognized if the services received create or enhance nonfinancial assets or they require specialized skills, they are provided by individuals possessing those skills, and they would typically need to be purchased if not provided by donation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Page 53

58 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Cash Equivalents For purposes of the statement of cash flows, the Foundation considers all short-term debt securities purchased with an original maturity of three months or less to be cash equivalents. Certain money market accounts intended for non-operating purposes are classified as investments. The Foundation maintains cash balances with a local bank, which at times throughout the year may exceed the FDIC insured limit. At June 30, 2015, all balances were insured. Accounts and Pledges Receivable Accounts receivable represent amounts due for event participation fees, event sponsorships and other support that is collectible in a single installment. Pledges receivable represent contributions recognized when a donor makes an unconditional promise to give to the Foundation over multiple years. The Foundation does not accrue interest on unpaid accounts or pledges receivable. Multiple year pledges are recorded at the discounted present value of the future payments. Accounts and pledges receivable are stated at the amount management expects to collect from outstanding balances based on experience and on any unusual circumstances that may affect collectability. Management provides for probable uncollectible amounts through a valuation allowance and a charge to bad debt expense based on its assessment of the current status of individual accounts. At June 30, 2015, the allowance for uncollectible accounts was $5,000. Balances that are still outstanding after management has used reasonable collection efforts are written off against the valuation allowance. Investments Investments consist primarily of mutual funds, and are measured at fair value at the date of the financial statements. No alternative investments are included in the Foundation s portfolio. Investment income or loss (including both realized and unrealized gains and losses, interest and dividends) is included in change in net assets. Investment accounts are maintained with stock brokerage firms, all of which are members of the Securities Investor Protection Corporation. The Foundation has adopted a total return investment policy in accordance with State law. The primary investment objective is to maximize long-term return through a combination of income and capital appreciation achieved in a prudent manner. The investment policy of the Foundation provides for certain allocation of assets between equity and fixed income instruments as well as cash and cash equivalents. The allocations are set to provide the highest probability of meeting or exceeding the return objectives at the lowest possible risk. The Foundation s goal is to preserve the purchasing power of the endowed assets. At times, permanently restricted endowment funds of the Foundation may erode in value due to market conditions and fall below the original endowed amount. The Foundation s Board s policy is to restore these funds to the original endowed amount by enduring any market losses in their operating fund thus enabling the endowment to remain whole. Page 54

59 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Investments (Continued) The Foundation has adopted an investment spend policy. Unless otherwise directed by the donor at the time of the donation and agreed to by the Foundation, 80% of annual audited net interest (interest earned less fees paid) shall be distributed from the endowed funds as per donor designation or Foundation Board direction. The remaining 20% shall be reinvested to preserve the purchasing power of the corpus over time. Contributions from Trade Donations Caesars Entertainment donated labor, set up and decor worth $29,500; Townsquare Media and Longport Media donated ad flight and on-air promotion worth $10,200 and $10,000, respectively; Fedway Associates donated ice carving show and liquor worth $7,205; 34 local restaurants donated food worth $17,000; various other vendors and individuals donated their services and products worth $39,653 in exchange for advertising and/or tickets for the Restaurant Gala, Golf and Alumni events. The computation of the value of the contribution of these services and products represent the difference between market value of these services or products and the market value of the services given in exchange. For the year ended June 30, 2015, the information is summarized as follows: Value of services received $ 113,558 Value of tickets provided (15,075) Net contribution to the Foundation $ 98,483 Functional Allocation of Expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Income Taxes Atlantic Cape Community College Foundation, Inc. has been granted exemption from income taxation by the Internal Revenue Service under Section 501(c)(3) of the Internal Revenue Code and, therefore has made no provision for federal and state income taxes in the accompanying financial statements. In addition, the Foundation has been determined by the Internal Revenue Service not to be a private foundation within the meaning of Section 509(a) of the Internal Revenue Code, and qualifies for the charitable contribution deduction under section 170(b)(1)(a). There was no unrelated business income for the year ended June 30, Page 55

60 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes (Continued) Management has evaluated uncertain tax positions taken by the Foundation. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the Internal Revenue Service or other taxing authority. The Foundation has recognized no interest or penalties related to uncertain tax positions. The Foundation is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. Management believes it is no longer subject to income tax examinations for years prior to Advertising The Foundation expenses advertising production costs as they are incurred and advertising communication costs the first time the advertising takes place. Advertising expense for the year ended June 30, 2015 was $26,268. Date of Management s Review of Subsequent Events Management has evaluated subsequent events through October 28, 2015, the date which the financial statements were available to be issued. NOTE B - PLEDGES RECEIVABLE Pledges receivable at June 30, 2015 were as follows: Pledges receivable, net of allowance for doubtful accounts of $5,000 Due within one year $ 71,200 Due in one to five years 54,507 Total pledges receivable 125,707 Less: unamortized discount 4,398 Net pledges receivable $ 121,309 Capital campaign pledges have been discounted to present value utilizing a 3.25% prime interest rate for the year ended June 30, Page 56

61 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE C - FAIR VALUES OF FINANCIAL INSTRUMENTS The fair value measurement accounting literature establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels. Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority. Level 2 inputs consist of observable inputs other than quoted prices for identical assets. Level 3 inputs are unobservable and have the lowest priority. The Foundation uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. When available, the Foundation measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. Level 1 inputs at June 30, 2015 consist of mutual funds and money funds. In the absence of Level 1 inputs, Level 2 inputs are used when available to the Plan. Level 3 inputs were only used when Level 1 or Level 2 inputs were not available. The Company's policy is to recognize transfers in and transfers out as of the actual date of the event or change in circumstance that caused the transfer. NOTE D - INVESTMENTS Investments at June 30, 2015 consist of the following: Fair Value Using Quoted Market Prices for Identical Assets Cost (Level 1) Fixed Income Mutual Funds $ 1,584,162 $ 1,561,190 Domestic Equities Mutual Funds 1,536,286 1,741,985 International Equities Mutual Funds 504, ,623 Money Funds 90,400 90,400 $ 3,715,151 $ 3,929,198 Page 57

62 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE D INVESTMENTS (CONTINUED) Investment income/(loss) for the year ended June 30, 2015 consists of the following: Restricted Unrestricted Temporarily Permanently Interest and dividend income $ 54,786 $ 104,535 $ 14,796 Investment fees (9,690) (23,151) (3,742) Net interest and dividend income 45,096 81,384 11,054 Net realized gains on investments 10, ,658 12,942 Unrealized (losses) on investments (67,988) (169,912) (25,123) Net realized and unrealized gains/(losses) (57,385) (58,254) (12,181) $ (12,289) $ 23,130 $ (1,127) NOTE E - ENDOWMENTS The State of New Jersey recently adopted the Uniform Prudent Management of Institutional Funds Act (UPMIFA), replacing the 1975 Uniform Management of Institutional Funds Act (UMIFA). Management has interpreted the law as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations. As a result, the Foundation classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts made to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of theapplicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Foundation in a manner consistent with the law. Page 58

63 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE E ENDOWMENTS (CONTINUED) The Foundation s endowment had the following activity for the year ended June 30, 2015: Temporarily Permanently Unrestricted Restricted Restricted Endowment net assets - June 30, 2014 $ - $ 271,640 $ 2,518,329 Contributions 230,917 Transfers (20,404) Investment return: Interest and dividends 104,535 14,796 Investment fees (23,151) (3,742) Net losses on investments (58,254) (12,181) Endowment net assets - June 30, 2015 $ - $ 274,366 $ 2,748,119 From time-to-time, the fair value of assets associated with an individual donor restricted endowment fund may fall below the level that the donor or State law required the Foundation to retain as a fund of perpetual duration. The Foundation s Board s policy is to restore these funds to the original endowed amount by enduring any market losses in their unrestricted funds thus enabling the endowment to remain whole. NOTE F - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets include monies raised by the Restaurant Gala, golf events, other fundraisers, and amounts specifically designated by donors which generally have been restricted for distributions to Atlantic Cape Community College for scholarships. Restaurant Gala monies are awarded to Culinary School students, and Golf Classic monies are awarded on a preferential basis first to Liberal Arts students and then to other college majors. Also included in temporarily restricted net assets is 90% of the income from one endowment to be used for healthcare scholarships and 100% income from other endowments to be awarded for various scholarships. As of June 30, 2015, temporarily restricted net assets consisted of the following: Restaurant Gala/Raffle scholarships $ 109,308 Golf Event scholarships 59,587 General scholarships 430,165 $ 599,060 Page 59

64 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE F TEMPORARILY RESTRICTED NET ASSETS (CONTINUED) The Foundation s net assets released from restrictions were for the following purposes: Scholarships $ 303,211 Scholarship ceremony 595 $ 303,806 NOTE G - PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets consist of investments to be held in perpetuity. One endowment requires that 10% of the income be added to principal and the remainder be used to fund scholarships. According to the new investment policy, 20% of the income earned on endowment funds received after the effective date of May 1, 2010 is added to principal. All other endowments require that all income be used for scholarships. NOTE H - ATLANTIC CAPE COMMUNITY COLLEGE On October 28, 2010, the Atlantic Cape Community College Foundation pledged a minimum of $350,000 for equipment and furnishings in the College's planned Science Technology Engineering and Math (STEM) building on the Mays Landing Campus. The proposed construction of the STEM building is one of the projects in the College s Blueprint 2020 Master Plan. This formal pledge allowed the College to seek dollar-for-dollar matching funds from the County of Atlantic government, NJ, through its Chapter 12 bonding capacity. The Foundation is actively raising funds for both endowed scholarships for the Foundation's endowment and to support this $350,000 pledge. The resulting major gifts campaign marks a major expansion of support to Atlantic Cape Community College for the Foundation. The Foundation received fundraising and administrative support from the College from services provided by College employees, shown below, which have not been included in the accompanying financial statements. Page 60

65 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE H ATLANTIC CAPE COMMUNITY COLLEGE (CONTINUED) The following summarizes the Foundation s transactions with Atlantic Cape Community College in 2015: Due at New Due at 6/30/2014 Support Payments 6/30/2015 New Support Promised Scholarships $ 474,797 $ 303,211 $ (393,832) $ 384,176 STEM building support 350,000 (350,000) - Program gifts to college 3,182 (3,182) - In Kind Services Fundraising support 141,521 (141,521) Administrative support 83,549 (83,549) Reimbursements of administrative expenses (434) 3,145 (2,000) 711 $ 827,545 $ 531,426 $ (974,084) $ 384,887 The Foundation is located on the campus of the Atlantic Cape Community College. College personnel and facilities are used at varying times during the years for which the College is nominally reimbursed. The value of these services and facilities are unable to be estimated at this time and are not included in the accompanying financial statements. Page 61

66 NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 NOTE 26: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) NOTE I - FUNDRAISING Fundraising proceeds for the year ended June 30, 2015 consisted of the following: Restaurant Gala Golf Other Gala Raffle Event Events Total Gross receipts $ 262,523 $ 21,400 $ 32,200 $ 9,097 $ 325,220 Expenses: Catering and meals 24,175 2,962 27,137 Wine and liquor 15, ,094 Entertainment 7,000 6,510 13,510 Room rental and setup 66,462 66,462 Décor 14,770 14,770 Donor recognition 6,734 6,734 Gifts and souvenirs 943 4,308 5,251 Plates 2,065 2,065 Raffle prizes 12,255 12,255 Scholarship 1,310 1,310 Licenses and fees 442 4, ,982 Supplies ,474 Direct expenses 132,272 12,255 12,254 15, ,044 Advertising 22, ,500 26,268 Printing and reproduction 5, ,822 Postage and delivery Miscellaneous Total expenses 162,360 12,255 13,470 18, ,942 Net proceeds $ 100,163 $ 9,145 $ 18,730 $ (9,760) $ 118,278 NOTE 27: SUBSEQUENT EVENTS Management has reviewed and evaluated all events and transactions that occurred between June 30, 2015 and February 11, 2016, the date that the financial statements were issued for possible disclosure and recognition in the financial statements, and no items have come to the attention of the college that would require disclosure. Page 62

67 REQUIRED SUPPLEMENTARY INFORMATION PART II

68 Atlantic Cape Community College Required Supplementary Information Schedule of the College's Proportionate Share of the Net Pension Liability Public Employees' Retirement System (PERS) Last Two Fiscal Years RSI-1 Measurement Date Ending June 30, College's Proportion of the Net Pension Liability % % College's Proportionate Share of the Net Pension Liability $ 28,947,163 $ 31,718,058 College's Covered-Employee Payroll $ 10,102,683 $ 10,994,314 College's Proportionate Share of the Net Pension Liability as a Percentage of it's Covered-Employee Payroll % % Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 52.08% 48.72% Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, this presentation will only include information for those years for which information is available. Page 63

69 Atlantic Cape Community College Required Supplementary Information Schedule of the College's Contributions Public Employees' Retirement System (PERS) Last Two Fiscal Years RSI-2 Fiscal Year Ended June 30, Contractually Required Contribution $ 1,259,836 $ 1,274,580 Contributions in Relation to the Contractually Required Contribution (1,259,836) (1,274,580) Contribution Deficiency (Excess) $ - $ - College's Covered-Employee Payroll $ 9,823,077 $ 10,102,683 Contributions as a Percentage of College's Covered-Employee Payroll 12.83% 12.62% Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, this presentation will only include information for those years for which information is available. Page 64

70 Atlantic Cape Community College Notes to Required Supplementary Information - Part II For the Fiscal Year Ended June 30, 2015 RSI-3 Public Employees' Retirement System (PERS) Changes in Benefit Terms - None Changes in Assumptions - The discount rate changed from 5.55% as of June 30, 2013, to 5.39% as of June 30, 2014, in accordance with Paragraph 44 of GASB Statement No. 67. Page 65

71 June 30, 2015 Supplemental Financial Information

72 SUPPLEMENTAL FINANCIAL INFORMATION BALANCE SHEETS JUNE 30, 2015 ASSETS LIABILITIES AND FUND BALANCES Current funds: Unrestricted: Current funds: Unrestricted: Cash and cash equivalents $ 13,004,771 Accounts payable and other accruals $ 4,309,473 Security deposit 1,309 Compensated absences 1,845,563 Restricted cash 4,300,029 Deferred revenue 2,302,880 Interfund balances - Interfund balances 838,013 Accounts receivable: Student deposits and other liabilities 184,719 Students, less allowance for 9,480,648 uncollectible accounts of $1,115, ,909 Federal, state, county and local 307,629 Fund balances: Other 39,123 Allocated for student activities 112,776 Inventories, at cost 83,210 Allocated for JEC reserve 971,300 Prepaid expenses 538,338 Allocated for SUI reserve 775,000 Allocated for consent decree 300,000 Allocated for encumbrances 87,096 Unallocated 7,517,498 9,763,670 Total unrestricted 19,244,318 Total unrestricted 19,244,318 Restricted: Restricted: Accounts receivable Accounts payable and other accruals 975,737 Federal, state, county and local 1,548,868 Deferred revenue 132,703 Pledges receivable 96,483 Interfund balances 355,227 Other assets 9,000 1,463,667 Prepaid expenses 30,789 Fund balance 221,473 Total restricted 1,685,140 Total restricted 1,685,140 Total current funds $ 20,929,458 Total current funds $ 20,929,458 (CONTINUED) Page 66

73 SUPPLEMENTAL FINANCIAL INFORMATION BALANCE SHEETS JUNE 30, 2015 ASSETS LIABILITIES AND FUND BALANCES Endowment fund: Endowment fund: Cash $ - Fund balance - true endowment $ 817,160 Interfund balances 817,160 Total endowment fund $ 817,160 Total endowment fund $ 817,160 Plant funds: Unexpended: Plant funds: Unexpended: Cash $ - Accounts payable $ 873,604 Security deposits 500 Current portion of long term debt 25,003 Accounts receivable Long term debt 174,990 Federal, state, county and local 1,909,695 Interfund balances - Interfund balances 376,080 Fund balances: Restricted expendable 1,212,678 1,212,678 Total unexpended plant funds 2,286,275 Total unexpended plant funds 2,286,275 Investment in plant: Investment in plant: Land 2,370,097 Fund balance 67,194,490 Construction in progress 1,618,229 Land improvements 1,228,099 Infrastructure 201,511 Buildings and improvements 54,938,352 Other improvements 6,336 Furniture and equipment 4,891,446 Library books and audio equipment 109,339 Other assets 1,831,081 Total investment in plant 67,194,490 Total investment in plant 67,194,490 Total plant funds $ 69,480,765 Total plant funds $ 69,480,765 Page 67

74 Revenues and other additions: ATLANTIC CAPE COMMUNITY COLLEGE SUPPLEMENTAL FINANCIAL INFORMATION STATEMENT OF CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2015 Current Funds Endowment Fund Investment Unrestricted Restricted Unexpended in Plant Educational and general revenues $ 38,955,654 $ 419,093 Plant Funds Sales and services auxiliary enterprises 148,771 Federal, state and county grants and contracts - restricted $ 20,251,345 Private gifts, grants and contracts - restricted 350,384 $ 9,654 Chargeback minor capital 2,025 State pension contribution 610,914 Insurance proceeds 5,135 Investment and other income 75,505 2,219 Restricted appropriations 8,315,995 Funds for plant facilities $ 24,062,650 Capital funded by operations 2,926,474 Other nonoperating revenue 55,200 Proceeds - sale of assets 16,980 Total revenues and other additions 39,790,844 20,603,948 9,654 8,797,448 27,006,104 Expenditures and other deductions: Educational and general expenditures 38,901,439 20,066,352 Auxiliary enterprises expenditures 148,573 Depreciation and amortization expense 3,946,402 Expansion of plant facilities 92,073 1,932,184 25,445,327 Total expenditures and other deductions 39,142,085 21,998,536-25,445,327 3,946,402 Transfers among funds: Non-mandatory: Endowment fund (27) 27 Restricted fund 164 (164) Other transfers Interfund transfers 16,980 (16,980) Construction in progress 1,059,855 16,245,126 (17,304,981) Net transfers 164 1,059, ,262,106 (17,321,961) Net increase (decrease) 648,923 (334,924) 9,681 (385,773) 5,737,741 Fund balance, beginning of year $ 9,114,747 $ 556,397 $ 807,479 $ 1,598,451 $ 61,456,749 Fund balance, end of year $ 9,763,670 $ 221,473 $ 817,160 $ 1,212,678 $ 67,194,490 Page 68

75 SUPPLEMENTAL FINANCIAL INFORMATION STATEMENT OF CURRENT FUND REVENUES, EXPENDITURES AND OTHER CHANGES FOR THE YEAR ENDED JUNE 30, 2015 Revenues: Unrestricted Restricted Total Tuition and fees $ 24,197,765 $ 24,197,765 Appropriations: State 6,194,910 6,194,910 Local 8,407,171 8,407,171 Chargebacks 121, ,428 Grants and contracts: Federal, state and local 404,422 $ 19,713,749 20,118,171 Private gifts, grants and contracts 350, ,384 Sales and services of educational departments 82,304 82,304 Sales and services auxiliary enterprises 148, ,771 Other sources 643,023 2, ,242 Total current revenues 40,199,794 20,066,352 60,266,146 Expenditures: Educational and general: Instruction 13,587, ,343 14,176,364 Public service 79, , ,111 Academic support 4,327, ,856 4,781,393 Student services 4,575, ,010 5,086,851 Institutional support 9,657,630-9,657,630 Operation and maintenance of plant 6,673,413 28,229 6,701,642 Scholarship and other student aid 408,950 17,809,800 18,218,750 Total education and general expenditures 39,310,389 20,066,352 59,376,741 Auxiliary enterprises 148, ,573 Total expenditures 39,458,962 20,066,352 59,525,314 Transfers among funds and other additions: Non-mandatory: Endowment fund (27) (27) Restricted fund 164 (164) Expansion of plant facilities (92,073) (872,329) (964,402) Other Excess of restricted revenues over expenditures and transfers 537, ,596 Net transfers (91,909) (334,924) (426,833) Net increase (decrease) in fund balances $ 648,923 $ (334,924) $ 313,999 Page 69

76 SUPPLEMENTAL FINANCIAL INFORMATION BUDGET COMPARISON TO ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Original Adjusted Actual Variance from Budget Revised Budget Activity Original Budget Current Unrestricted Income General Education: Credit Tuition $ 18,544,483 $ 18,544,483 $ 17,351,828 $ (1,192,655) Continuing Education 1,430,000 1,430,000 1,093,266 (336,734) Student Fees 5,578,090 5,578,090 5,343,721 (234,369) Government Appropriations: Atlantic County 6,762,723 6,762,723 6,762,723 - Cape May County 1,644,448 1,644,448 1,644,448 - State of New Jersey 5,550,000 5,550,000 5,583,996 33,996 Chargeback 116, , ,428 5,283 Other Source (includes Investment Income, Bookstore and Vending Commissions, Rents, Conferencing, 624, ,000 1,129, ,748 Total Education and General Income 40,249,889 40,249,889 39,031,158 (1,218,731) ABP Reimbursement 500, , , ,914 Adjusted Education and General Income 40,749,889 40,749,889 39,642,072 (1,107,817) Current Unrestricted Expenses Instructional 14,348,635 14,156,423 13,590,591 (758,044) Public Service 209, ,727 79,997 (129,938) Academic Support 4,626,709 4,723,079 4,370,483 (256,226) Student Services 4,657,867 4,826,263 4,580,976 (76,891) Institutional Support 10,396,607 10,336,198 9,683,970 (712,637) Plant Operations and Maintenance 6,945,247 7,054,789 6,684,695 (260,552) Total Education and General Expenditures 41,185,000 41,225,479 38,990,712 (2,194,288) Education and General Operating Margin $ (435,111) $ (475,590) 651,360 $ 1,086,471 ** Non-Mandatory Transfers From Current Restricted funds for Beacons professor 164 Auxiliary Enterprises (2,601) Adjusted Operating Margin $ 648,923 **Note: Mandatory and non-mandatory transfers requiring use of funds from the current unrestricted fund balance are recorded as additions or deductions from the current year operations in the above schedule. Page 70

77 SUPPLEMENTAL FINANCIAL INFORMATION SALARY EXPENDITURES FOR THE YEAR ENDED JUNE 30, 2015 Current unrestricted fund: Educational and general: Instruction $9,923,815 Public service 45,137 Academic support 2,796,330 Student services 2,709,573 Institutional support 4,814,907 Operations and maintenance of plant 2,734,938 Total educational and general expenditures 23,024,700 Auxiliary enterprises - Total unrestricted salary expenditures 23,024,700 Restricted funds salary expenditures 1,470,070 Capital projects salary expenditures 121,441 Subtotal 24,616,211 College Work Study Program included in Restricted funds salary expenditures (223,788) Total salary expenditures $24,392,423 * This schedule presents wages only. Fringe benefits are not included. Page 71

78 SINGLE AUDIT SECTION

79 June 30, 2015 The following single audit financial information is provided in accordance with OMB Circular A-133 and New Jersey OMB Circular 15-08

80 REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 AND STATE OF NEW JERSEY CIRCULAR OMB INDEPENDENT AUDITORS REPORT Board of Trustees Atlantic Cape Community College Mays Landing, New Jersey Report on Compliance for Each Major Federal and State Program We have audited Atlantic Cape Community College s (the College ) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement and the New Jersey State Grant Compliance Supplement that could have a direct and material effect on each of the College s major federal and state programs for the fiscal year ended June 30, The College's 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 College's 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; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and State of New Jersey Circular OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Those standards, OMB Circular A-133, and State of New Jersey Circular OMB, 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 or state program occurred. An audit includes examining, on a test basis, evidence about Atlantic Cape Community 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 on compliance for each major federal and state program. However, our audit does not provide a legal determination of the College's compliance. Page 72

81 28900 Opinion on Each Major Federal and State Program In our opinion, Atlantic Cape Community College 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 fiscal year ended June 30, Report on Internal Control Over Compliance Management of the Atlantic Cape Community College 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 the College's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal or 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 or state program and to test and report on internal control over compliance in accordance with OMB Circular A-133 and State of New Jersey Circular OMB, 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 College s 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 or state 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 or 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 OMB Circular A-133 and State of New Jersey Circular OMB. Accordingly, this report is not suitable for any other purpose. Respectfully submitted, BOWMAN & COMPANY LLP Certified Public Accountants & Consultants Woodbury, New Jersey February 11, 2016 Page 73

82 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 BALANCE JUNE 30, 2015 AWARD FY15 AMOUNT FY15 FY15 CUMULATIVE DUE TO CFDA GRANT ID GRANT AUTHOR- CASH RECEIVED RETURN TO GRANT GRANT ACCOUNTS DEFERRED GRANTOR AT NUMBER NUMBER PERIOD IZATIONS RECEIVED TO DATE GRANTOR EXPENDITURES EXPENDITURES RECEIVABLE REVENUE 6/30/2015 U.S. DEPARTMENT OF EDUCATION: (DIRECT FUNDING) Student Financial Aid Cluster: Federal Pell Grant Program- FY15 Authorization P063P /1/14-8/31/15 $ 14,705,816 $ 14,168,965 $ 14,168,965 $ (90,276) $ 14,705,816 $ 14,705,816 $ 627,127 Federal Pell Grant Program- FY14 Authorization P063P /1/13-8/31/14 15,264, ,040 15,340,708 (76,013) 4,146 15,264,695 Federal Pell Grant Program- FY13 Authorization P063P /1/12-8/31/13 15,193, ,193,853 (748) ,193,105 14,772,120 44,703,526 (167,037) 14,710,077 45,163, ,127 Federal Supplemental Educational Opportunity Grants - FY P007A /1/14-8/31/15 244, , , , ,639 20,239 Federal Supplemental Educational Opportunity Grants - FY P007A /1/13-8/31/14 166,170 15, , , , , , ,809 20,239 Federal Work-Study Program - FY P033A /1/14-6/30/15 219, , , , ,788 1,054 Federal Work-Study Program - FY P033A /1/13-6/30/14 164,052 12, , , , , , ,840 1,054 Federal Direct Student Loans - Subsidized N/A 7/1/14-8/31/15 3,644,287 3,644,287 3,644,287 3,644,287 3,644,287 Federal Direct Student Loans - Unsubsidized N/A 7/1/14-8/31/15 3,172,199 3,172,199 3,172,199 3,172,199 3,172,199 Federal Direct Student Loans - PLUS N/A 7/1/14-8/31/15 252, , , , ,687 7,069,173 7,069,173 7,069,173 7,069,173 Total Student Financial Aid Cluster 22,311,677 52,546,055 (167,037) 22,243,677 53,027, ,420 Student Support Services - FY P042A /1/14-8/31/15 292, , , , ,859 7,997 Student Support Services - FY P042A /1/13-8/31/14 277,051 87, ,229 58, , , , , ,088 7,997 (PASS THROUGH NEW JERSEY DEPARTMENT OF EDUCATION) Vocation Education - Basic Grants to States - FY PSFS /1/14-6/30/15 671, , , , , ,262 Vocation Education - Basic Grants to States - FY PSFS /1/13-6/30/14 619, , ,256 (29,342) 451, , ,623 (29,342) 598,629 1,050, ,262 NJ Gear Up State Project Grant Program - FY YR /26/14-9/25/15 284, , , , ,230 $ 123,260 NJ Gear Up State Project Grant Program - FY YR /26/13-9/25/14 284,200 59, ,148 92, ,148 College Bound/NJ GEAR UP State Project Capacity YR /7/2014-5/31/15 11,482 11,482 11,482 (5,927) 5,555 5,555 College Bound/NJ GEAR UP State Project Academic YR /1/2013-6/30/14 3,089 3,089 (1,253) 1, , ,209 (7,180) 242, , ,260 1,000,906 1,365,832 (36,522) 840,788 1,462, , ,260 (PASS THROUGH NEW JERSEY COUNCIL OF COMMUNITY COLLEGES) College Readiness Now II A N/A 6/1/15-8/31/16 22,566 1,770 1,770 1,770 College Readiness Now A N/A 2/20/14-8/8/14 26,977 2,817 24,399 11,430 24,399 2,817 24,399 13,200 26,169 1,770 (PASS THROUGH NJ DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT) Adult Basic Education Programmatic - FY ABS-FY /1/14-6/30/15 599, , , , , ,294 Adult Basic Education Programmatic - FY ABS-FY1401 7/1/13-6/30/14 934, , , , ,061 1,269, ,078 1,380, ,294 Total U.S. Department of Education 24,260,628 55,726,767 (203,559) 23,976,060 56,425,691 1,025, ,260 (CONTINUED) Page 74

83 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 BALANCE JUNE 30, 2015 AWARD FY15 AMOUNT FY15 FY15 CUMULATIVE DUE TO CFDA GRANT ID GRANT AUTHOR- CASH RECEIVED RETURN TO GRANT GRANT ACCOUNTS DEFERRED GRANTOR AT NUMBER NUMBER PERIOD IZATIONS RECEIVED TO DATE GRANTOR EXPENDITURES EXPENDITURES RECEIVABLE REVENUE 6/30/2015 U.S. DEPARTMENT OF COMMERCE: (DIRECT FUNDING) Economic Development Assistance Program /23/13-9/19/14 $ 1,350,000 $ 1,245,961 $ 1,245,961 $ 186,106 $ 1,245,961 Total U.S. Department of Commerce 1,245,961 1,245, ,106 1,245,961 U.S. DEPARTMENT OF LABOR: (DIRECT FUNDING) Trade Adj. Assistance Community College & Career Training TC A34 10/1/2013-9/30/17 1,027, , , , ,982 $ 63, , , , ,982 63,432 (PASS THROUGH NJ DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT) WIA Dislocated Worker Formula Grants Atlantic City Re-employment Project (Literacy) N/A 12/15/14-12/14/16 891,000 23,500 23, , , ,100 Atlantic City Re-employment Project (ACRE) N/A 12/15/14-12/14/15 200,000 56,300 56, , ,600 53,300 79,800 79, , , ,400 (PASS THROUGH ATLANTIC CAPE MAY WORKFORCE INVESTMENT BOARD) WIA Youth Activities Atlantic County In School Youth - FY K A 11/1/14-8/31/15 187,401 11,115 11,115 35,746 35,746 24,631 Atlantic County In School Youth - FY N/A 11/1/13-8/31/14 187,621 89,635 95,626 60,978 95,626 Atlantic/ Cape May County Out of School Youth - FY N/A 11/1/13-8/31/14 118,320 10,326 20,414 4,893 20, , , , ,786 24,631 Total Cluster 190, , , , ,031 Total U.S. Department of Labor 338, , , , ,463 NATIONAL AERONAUTICS AND SPACE ADMINISTRATON (NASA): (PASS THROUGH RUTGERS UNIVERSITY) K-12 STEM Outreach in Atlantic County, NJ /15/15-8/12/16 10,000 3,108 3,108 3,108 Total NASA 3,108 3,108 3,108 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES: (PASS THROUGH NEW JERSEY DEPARTMENT OF CHILDREN AND FAMILIES) Super Storm Sandy Displaced Homemaker Contract SSBG Sandy NJS0S2 5/1/14-6/30/15 145,714 95,119 95,119 24,067 24,067 $ 71,052 Total U.S. Department of Health and Human Services 95,119 95,119 24,067 24,067 71,052 Total Federal Aid $ 25,939,841 $ 57,433,352 $ (203,559) $ 24,842,204 $ 58,426,795 $ 1,391,314 $ 123,260 $ 71,052 The accompanying Notes to the Financial Statements and Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance are an integral part of this schedule. Page 75

84 SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED JUNE 30, 2015 STUDENT FINANCIAL AID CLUSTER: AWARD FY15 AMOUNT FY15 FY15 CUMULATIVE DUE TO GRANT AUTHORIZ- CASH RECEIVED RETURN TO GRANT GRANT ACCOUNTS DEFERRED GRANTOR AT GRANT ID NUMBER PERIOD ATIONS RECEIVED TO DATE GRANTOR EXPENDITURES EXPENDITURES RECEIVABLE REVENUE 6/30/2015 NEW JERSEY OFFICE OF THE SECRETARY OF HIGHER EDUCATION: Educational Opportunity Fund (EOF) Article III - FY /1/14-6/30/15 $ 212,104 $ 245,543 $ 245,543 $ (92,235) $ 151,864 $ 151,864 $ 1,444 Educational Opportunity Fund (EOF) Article III - FY /1/13-6/30/14 209, ,266 (34,519) 175,747 Educational Opportunity Fund (EOF) Article III - Summer /1/14-6/30/15 29,080 29,080 29,080 29,080 29,080 NEW JERSEY HIGHER EDUCATION STUDENT ASSISTANCE AUTHORITY: Tuition Aid Grant (TAG) - FY /1/14-6/30/15 1,911,920 2,125,915 2,125,915 (201,398) 1,911,920 1,911,920 12,597 Tuition Aid Grant (TAG) - FY /1/13-6/30/14 2,209,545 2,255,954 (161,505) 2,094,449 Governor's Urban Scholarship /1/14-6/30/15 1,000 1,000 1,000 1,000 1,000 NJ Stars Program - FY /1/14-6/30/15 325, , ,582 (7,187) 325, ,215 $ 1,820 NJ Stars Program - FY /1/13-6/30/14 351,172 3, , ,172 New Jersey Class Loans - FY15 N/A 7/1/14-6/30/15 74,674 79,034 79,034 (4,360) 74,674 74,674 New Jersey Class Loans - FY14 N/A 7/1/13-6/30/14 166, ,488 (3,880) 166,608 Total Student Financial Aid Cluster 2,814,228 5,799,034 (505,084) 2,493,753 5,281,729 1,820 14,041 NEW JERSEY OFFICE OF THE SECRETARY OF HIGHER EDUCATION: Educational Opportunity Fund (EOF) Article IV - FY /1/14-6/30/15 192, , , , ,984 Educational Opportunity Fund (EOF) Article IV - FY /1/13-6/30/14 183, , , ,340 College Bound - FY /26/14-6/30/15 50,000 50,000 50,000 46,978 46,978 3,022 College Bound - FY /26/13-6/30/14 50,000 50,000 38,238 11,762 Building our Future Bond Act /1/14-2,676,394 63,130 63,130 93,008 93,008 29,878 Building our Future Bond Act /1/14-2,984,039 61,184 61, , , ,110 Building our Future Bond Act /1/14-680,062 15,132 15,132 63,293 63,293 48,161 Building our Future Bond Act /1/14-500,620 11,418 11,418 62,566 62,566 51, , , ,123 1,174, ,297 14,784 NEW JERSEY DEPARTMENT OF TREASURY HIGHER EDUCATION ADMINISTRATION: Operational Costs - County Colleges /1/14-6/30/15 5,583,996 5,583,996 5,583,996 5,583,996 5,583,996 Employer Contributions - Alternate Benefits Program /1/14-6/30/15 610, , , , , ,742 Employer Contributions - Alternate Benefits Program /1/13-6/30/14 622, , , ,104 P.L. 1971, Chapter 12 Debt Service /1/14-6/30/15 1,407,048 1,407,048 1,407,048 6,183,312 6,639,272 7,601,958 8,224, ,742 NEW JERSEY EDUCATIONAL FACILITIES AUTHORITY: Higher Education Technology Infrastructure /1/14-567, , , , ,000 4, , , , ,000 4,896 NEW JERSEY DEPARTMENT OF EDUCATION (PASS THROUGH RUTGERS UNIVERSITY) Race to the Top, NJ - Early Learning Training Academy H B4 7/18/14-12/31/15 123,853 7,622 7,622 10,503 10,503 2,882 7,622 7,622 10,503 10,503 2,882 NEW JERSEY DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT: Customized Training-Gas Industry S4J /30/15-1/30/16 54,400 9,227 9,227 9,600 $ 373 Customized Training-AtlantiCare S4J /30/15-1/30/16 108,800 3,351 3,351 4,800 1,449 Customized Training-Financial Services S4J /1/14-12/31/14 104,254 61,332 61,332 87,040 97,552 36,220 Customized Training-Healthcare S4J /1/13-7/1/14 299,295 94, , ,390 Customized Training-Casino S4J /1/13-6/1/14 284,702 22, , , , , , ,845 50,620 1,822 (PASS THROUGH ATLANTIC CAPE MAY WORKFORCE INVESTMENT BOARD) English as a Second Language Program K /1/ /30/15 23,287 11,484 11,484 11,484 11,484 11,484 11,484 DEPARTMENT OF COMMUNITY AFFAIRS: Code Official Tution Remission /1/14-6/30/15 10,000 5,000 5,000 9,340 9,340 4,340 5,000 5,000 9,340 9,340 4,340 BALANCE JUNE 30, 2015 Total State Financial Assistance $ 10,282,704 $ 14,233,267 $ (505,084) $ 11,576,423 $ 15,920,664 $ 816,081 $ 1,822 $ 28,825 The accompanying Notes to the Financial Statements and Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance are an integral part of this schedule. Page 76

85 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Note 1: GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal awards and state financial assistance programs of Atlantic Cape Community College. The College is defined in Note 1 to the College's basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies, are included on the schedules of expenditures of federal awards and state financial assistance. Note 2: BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented using the accrual basis of accounting. The accrual basis of accounting is described in Note 2 to the financial statements. Note 3: RELATIONSHIP TO FINANCIAL STATEMENTS Amounts reported in the accompanying schedules agree with amounts reported in the financial statements. Note 4: STUDENT LOAN PROGRAMS The College is responsible only for the performance of certain administrative duties with respect to the Federal Family Educational Loan Program (FFEL), Federal Direct Loan Program (FDL), and NJ Class Loans; accordingly, these loans balances are not included in the College s basic financial statements. It is not practical to determine the balance of loans outstanding to students of the College under these programs as of June 30, Note 5: SUBRECIPIENTS Of the expenditures presented in the schedule of expenditures of federal awards, the College provided the following amounts to subrecipients during the year ended June 30, 2015: CFDA Program Number Amount Adult Basic Education $322,098 Note 6: MAJOR PROGRAMS Major programs are identified in the Summary of Auditor's Results section of the Schedule of Findings and Questioned Costs. Page 77

86 Schedule of Findings and Questioned Costs For the Year Ended June 30, 2015 Section 1- Summary of Auditor's Results Financial Statements Type of auditor's report issued Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Type of auditor's report issued on compliance for major programs Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133? yes X no Identification of major programs: CFDA Numbers Name of Federal Program or Cluster Student Financial Aid Cluster: Federal PELL Grant Program Federal Supplemental Educational Opportunities Grants Federal Work-Study Program Federal Direct Student Loans Dollar threshold used to determine Type A programs $ 745,266 Auditee qualified as low-risk auditee? X yes no Page 78

87 Schedule of Findings and Questioned Costs For the Year Ended June 30, 2015 Section 1- Summary of Auditor's Results (Cont'd) State Financial Assistance Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X none reported Type of auditor's report issued on compliance for major programs Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133 or New Jersey Circular OMB? yes X no Identification of major programs: GMIS Numbers Name of State Program Unknown Student Financial Aid Cluster: Educational Opportunities Fund (EOF) - Article III Tuition Aid Grant New Jersey Stars Program Governor's Urban Scholarship New Jersey Class Loans Operational Costs - County Colleges Educational Opportunities Fund (EOF) - Article IV Employer Contributions - Alternate Benefit Program Unknown Building our Future Bond Act Higher Education Technology Infrastructure Dollar threshold used to determine Type A programs $ 347,293 Auditee qualified as low-risk auditee? X yes no Page 79

88 Schedule of Findings and Questioned Costs For the Year Ended June 30, 2015 Section 2- Schedule of Financial Statement Findings This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance related to the financial statements that are required to be reported in accordance with Government Auditing Standards. No Current Year Findings. Page 80

89 Schedule of Findings and Questioned Costs For the Year Ended June 30, 2015 Section 3- Schedule of Federal Award Findings and Questioned Costs This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including questioned costs, related to the audit of major Federal programs, as required by OMB Circular A-133. No Current Year Findings. Section 4- Schedule of State Financial Assistance Findings and Questioned Costs This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including questioned costs, related to the audit of major State programs, as required by OMB Circular A-133 and State of New Jersey Circular OMB. No Current Year Findings. Page 81

90 Summary Schedule of Prior Year Audit Findings And Questioned Costs as Prepared by Management This section identifies the status of prior year findings related to the financial statements and Federal Awards and State Financial Assistance that are required to be reported in accordance with Government Auditing Standards, OMB Circular A-133 and State of New Jersey Circular OMB. FINANCIAL STATEMENT FINDINGS No Prior Year Findings. FEDERAL AWARDS No Prior Year Findings. STATE FINANCIAL ASSISTANCE PROGRAMS Finding No Information on the State Programs Tuition Aid Grant (TAG) Grant ID Number Condition TAG awards were not always adjusted for students who officially withdrew from a course or for students who per attendance records had never attended a course they had enrolled in. Current Status This condition has been resolved. Page 82

91 STATISTICAL SECTION (UNAUDITED)

92 Financial Trends Information Financial trends information is intended to assist the user in understanding and assessing how the College s financial position has changed over time. Please refer to the following schedules for a historical view of the College s financial performance.

93 NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (UNAUDITED) For the Year Ended June 30, Investment in Capital Assets $ 67,194,490 $ 61,456,749 $ 47,644,622 $ 47,296,098 $ 48,252,911 $ 47,149,289 $ 46,140,245 $ 44,186,457 $ 42,414,112 $ 40,574,690 Restricted - expendable 3,680,323 4,057,005 5,182,967 5,874,091 5,754,594 5,288,263 6,898,483 5,439,365 3,768,740 4,168,388 Restricted - nonexpendable 817, , , , , , , , , ,771 Unrestricted (22,816,930) 7,212,590 5,494,227 4,635,171 4,351,237 5,426,741 3,561,662 7,082,888 6,588,538 4,691,288 Total Net Position $ 48,875,043 $ 73,533,823 $ 59,113,770 $ 58,596,064 $ 59,137,441 $ 58,626,898 $ 57,347,608 $ 57,438,983 $ 53,477,768 $ 50,124,137 Note: GASB Statement No. 68 was implemented for June 30, 2015 year end. Source: College records Page 83

94 CAPITAL ASSET INFORMATION LAST NINE FISCAL YEARS (UNAUDITED) For the Year Ended June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30, Academic Space Net assignable square feet (in thousands) 167, , , , , , , , ,448 Mays Landing 93,879 65,964 65,964 65,964 65,964 65,964 65,964 65,964 65,964 Worthington Atlantic City 53,182 30,682 30,682 30,682 30,682 30,682 30,682 30,682 26,916 Cape May County 20,568 20,568 20,568 20,568 20,568 20,568 20,568 20,568 20,568 Libraries Number of volumes (in thousands) 75,927 75,574 74,999 74,657 79,516 80,538 80,538 80,237 80,320 Mays Landing 63,856 63,570 63,152 63,614 69,067 70,089 70,089 71,575 72,122 Worthington Atlantic City 4,130 4,090 4,012 3,378 2,878 2,878 2,878 1,646 1,266 Cape May County 7,941 7,914 7,835 7,665 7,571 7,571 7,571 7,016 6,932 Administrative and support buildings Net assignable square feet (in thousands) 181, , , , , , , , ,427 Mays Landing 134, , , , , , , , ,846 Worthington Atlantic City 22,662 22,662 22,662 22,662 22,662 22,662 22,662 22,662 21,130 Cape May County 24,451 24,451 24,451 24,451 24,451 24,451 24,451 24,451 24,451 Athletic facilities Practice and intramural fields Gymnasiums Transportation Vehicles Parking capacity 1,882 1,892 1,897 1,897 1,897 1,897 1,897 1,897 1,874 Mays Landing 1,308 1,318 1,358 1,358 1,358 1,358 1,358 1,358 1,358 Worthington Atlantic City Cape May County Source: College records Page 84

95 Millions ATLANTIC CAPE COMMUNITY COLLEGE REVENUES BY SOURCE LAST TEN FISCAL YEARS (UNAUDITED) $70 $60 Auxillary enterprises: Student activities Other revenues Capital gifts and grants Capital appropriations $50 Other nonoperating revenues Investment income $40 Gifts County appropriations $30 $20 State appropriations Federal appropriations Other operating revenues Sales and services of educational departments Nongovernmental grants and contracts $10 State and local grants and contracts $0 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 Federal grants and contracts Student Tuition and Fees Page 85

96 REVENUES BY SOURCE LAST TEN FISCAL YEARS (UNAUDITED) FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Student Tuition and Fees $ 25,635,567 $ 26,239,396 $ 25,869,285 $ 25,819,320 $ 26,559,492 $ 26,510,080 $ 22,338,957 $ 20,840,756 $ 19,758,547 $ 17,113,738 Allowances (12,905,396) (12,415,667) (12,043,355) (11,518,502) (12,476,637) (11,815,125) (8,735,556) (10,842,990) (9,634,460) (9,388,832) Student tuition and fees, net 12,730,171 13,823,729 13,825,930 14,300,818 14,082,855 14,694,955 13,603,401 9,997,766 10,124,087 7,724,906 Federal grants and contracts 17,596,061 17,477,807 17,295,837 17,539,247 18,520,866 16,776,653 10,575,236 9,152,202 8,045,104 8,461,456 State and local grants and contracts 2,818,259 3,703,562 3,293,112 3,334,461 3,948,980 5,302,411 4,842,530 3,696,579 4,420,029 3,207,141 Nongovernmental grants and contracts 54,304 74,410 75,248 76,902 82,825 25,379 10, , , ,074 Sales and services of educational departments 82, , , , , , , , , ,228 Other operating revenues 567, , , , , , ,451 1,034, , ,964 Operating Revenues 33,848,617 35,735,320 35,293,849 36,153,949 37,502,556 37,748,545 29,979,019 24,532,844 23,747,359 20,373,769 Federal appropriations , State appropriations 6,194,910 6,208,042 6,240,332 6,376,982 6,240,731 6,393,479 6,930,883 7,505,206 7,242,909 7,313,229 County appropriations 8,409,196 8,574,993 8,559,082 8,872,749 8,699,273 8,752,743 8,347,762 8,348,413 7,786,701 7,786,778 Gifts 350, , , , , , , , ,469 61,876 Investment income 77,724 68,168 74, , , , , , , ,187 Other nonoperating revenues 55, , ,547 67, Nonoperating revenues 15,087,414 15,347,236 15,347,549 15,718,585 15,451,688 16,016,669 15,956,341 16,885,393 16,123,609 15,703,070 Capital appropriations 8,502,101 15,476,336 2,686,732 1,457,962 2,045,672 1,956,866 1,695,202 3,222,746 3,009,368 3,789,192 Capital gifts and grants , ,340 49,667 24,351 Other revenues 22,115 25, ,830 53,931 3, Auxillary enterprises: Student activities 148, , , , , , , , , ,001 $ 57,609,018 $ 66,737,625 $ 53,693,831 $ 53,535,632 $ 55,495,275 $ 55,927,266 $ 47,750,370 $ 44,778,488 $ 43,041,053 $ 39,999,383 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Student Tuition and Fees 44.50% 39.32% 48.18% 48.23% 47.86% 47.40% 46.78% 46.54% 45.91% 42.79% Allowances % % % % % % % % % % Student tuition and fees, net 22.10% 20.71% 25.75% 26.71% 25.38% 26.28% 28.49% 22.33% 23.52% 19.31% Federal grants and contracts 30.54% 26.19% 32.21% 32.76% 33.37% 30.00% 22.15% 20.44% 18.69% 21.15% State and local grants and contracts 4.89% 5.55% 6.13% 6.23% 7.12% 9.48% 10.14% 8.26% 10.27% 8.02% Nongovernmental grants and contracts 0.09% 0.11% 0.14% 0.14% 0.15% 0.05% 0.02% 1.13% 0.31% 0.59% Sales and services of educational departments 0.14% 0.17% 0.23% 0.21% 0.24% 0.24% 0.28% 0.33% 0.32% 0.32% Other operating revenues 0.99% 0.81% 1.27% 1.48% 1.33% 1.46% 1.70% 2.31% 2.06% 1.54% Operating Revenues 58.76% 53.55% 65.73% 67.53% 67.58% 67.50% 62.78% 54.79% 55.17% 50.94% Federal appropriations 0.00% 0.00% 0.00% 0.00% 0.00% 0.59% 0.00% 0.00% 0.00% 0.00% State appropriations 10.75% 9.30% 11.62% 11.91% 11.25% 11.43% 14.51% 16.76% 16.83% 18.28% County appropriations 14.60% 12.85% 15.94% 16.57% 15.68% 15.65% 17.48% 18.64% 18.09% 19.47% Gifts 0.61% 0.54% 0.88% 0.67% 0.54% 0.54% 0.68% 0.64% 0.75% 0.15% Investment income 0.13% 0.10% 0.14% 0.19% 0.26% 0.43% 0.74% 1.66% 1.79% 1.35% Other nonoperating revenues 0.10% 0.20% 0.00% 0.01% 0.12% 0.00% 0.00% 0.00% 0.00% 0.00% Nonoperating revenues 26.19% 23.00% 28.58% 29.36% 27.84% 28.64% 33.42% 37.71% 37.46% 39.26% Capital appropriations 14.76% 23.19% 5.00% 2.72% 3.69% 3.50% 3.55% 7.20% 6.99% 9.47% Capital gifts and grants 0.00% 0.00% 0.00% 0.00% 0.63% 0.00% 0.00% 0.05% 0.12% 0.06% Other revenues 0.04% 0.04% 0.39% 0.10% 0.00% 0.01% 0.00% 0.00% 0.00% 0.00% Auxillary enterprises: Student activities 0.26% 0.23% 0.29% 0.28% 0.26% 0.36% 0.25% 0.26% 0.26% 0.27% (Excludes Additions to Permanent Endowments) Source: Statement of Revenues, Expenses, and Changes in Net Position by Year % % % % % % % % % % Page 86

97 Millions ATLANTIC CAPE COMMUNITY COLLEGE REVENUES BY SOURCE CURRENT UNRESTRICTED OPERATING FUND LAST TEN FISCAL YEARS (UNAUDITED) $45 $40 $35 $30 $25 $20 Federal Support Other sources Investment Income Chargebacks County Support State Support Tuition and Fees $15 $10 $5 $0 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 Page 87

98 REVENUES BY SOURCE CURRENT UNRESTRICTED OPERATING FUND LAST TEN FISCAL YEARS (UNAUDITED) FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Source: Credit Tuition and fees $ 22,695,549 $ 23,806,989 $ 23,655,952 $ 23,583,454 $ 24,094,514 $ 24,114,811 $ 20,552,466 $ 18,882,710 $ 17,673,888 $ 15,105,792 Non-Credit Programs 1,093, , ,167 1,425,012 1,396,913 1,730,355 1,282,048 1,556,349 1,648,160 1,633,238 Tuition and Fees 23,788,815 24,718,559 24,637,119 25,008,466 25,491,427 25,845,166 21,834,514 20,439,059 19,322,048 16,739,030 Federal Support 327,435 State Support 6,194,910 6,208,042 6,240,332 6,376,982 6,240,731 6,386,507 6,923,600 7,495,903 7,242,909 7,313,229 County Support 8,407,171 8,572,942 8,556,807 8,869,741 8,695,901 8,749,715 8,344,984 8,344,985 7,782,983 7,782,983 Chargebacks 121, , , , , , , , , ,231 Investment Income 75,505 65,979 71,941 99, , , , , , ,432 Other sources 1,054, , ,336 1,076,101 1,087,969 1,173,380 1,194,459 1,443,870 1,557,367 1,023,712 TOTAL $ 39,642,072 $ 40,605,546 $ 40,583,696 $ 41,599,356 $ 41,828,893 $ 42,884,232 $ 38,791,288 $ 38,613,763 $ 36,804,465 $ 33,549,617 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Source: Tuition and Fees 60.01% 60.87% 60.71% 60.12% 60.94% 60.27% 56.29% 52.93% 52.50% 49.89% Federal Support 0.76% State Support 15.63% 15.29% 15.38% 15.33% 14.92% 14.89% 17.85% 19.41% 19.68% 21.80% County Support 21.21% 21.11% 21.08% 21.32% 20.79% 20.40% 21.51% 21.61% 21.15% 23.20% Chargebacks 0.31% 0.29% 0.31% 0.41% 0.42% 0.38% 0.40% 0.52% 0.58% 0.67% Investment Income 0.19% 0.16% 0.18% 0.24% 0.32% 0.56% 0.87% 1.78% 1.86% 1.38% Other sources 2.66% 2.27% 2.34% 2.59% 2.60% 2.74% 3.08% 3.74% 4.23% 3.05% TOTAL % % % % % % % % % % Source: Schedules of Budget Comparison To Actual Page 88

99 Millions ATLANTIC CAPE COMMUNITY COLLEGE EXPENDITURES BY NATURAL CLASSIFICATION LAST TEN FISCAL YEARS (UNAUDITED) $60 $50 $40 $30 $20 Student activities Scholarship and student aid Travel Depreciation and amortization Rent Repairs and Maintenance Insurance Utilities and telephone Supplies and other Fringe Benefits Salaries and Wages $10 $ FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 Page 89

100 EXPENDITURES BY NATURAL CLASSIFICATION LAST TEN FISCAL YEARS (UNAUDITED) FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Compensation Salaries and Wages $ 24,392,423 $ 24,363,547 $ 25,182,142 $ 25,932,657 $ 26,042,735 $ 25,748,467 $ 24,043,673 $ 22,546,608 $ 21,931,607 $ 21,386,299 Fringe Benefits 9,238,260 9,220,697 9,396,685 9,444,598 9,251,407 9,185,974 8,178,840 7,415,550 7,231,177 6,639,520 Total Compensation 33,630,683 33,584,244 34,578,827 35,377,255 35,294,142 34,934,441 32,222,513 29,962,158 29,162,784 28,025,819 Other Expenditures Supplies and other 5,002,350 5,259,621 4,727,285 4,551,334 5,260,160 5,812,193 5,082,017 4,929,781 4,773,432 4,675,957 Utilities and telephone 1,633,998 1,562,308 1,512,753 1,631,160 1,715,466 1,562,032 1,652,343 1,687,197 1,668,754 1,436,261 Insurance 704, , , , , , , , , ,260 Repairs and Maintenance 222,468 83, , , , , , , , ,730 Rent 7,083 7,617 5,969 1,400 3, ,971 0 Depreciation and amortization 3,946,402 3,401,444 3,344,763 3,230,751 3,100,293 2,969,975 2,682,852 2,524,332 2,420,424 2,060,756 Travel 220, , , , , , , , , ,776 11,737,610 11,173,207 10,571,301 10,585,204 11,201,492 11,605,139 10,822,394 10,214,314 9,837,729 9,189,740 45,368,293 44,757,451 45,150,128 45,962,459 46,495,634 46,539,580 43,044,907 40,176,472 39,000,513 37,215,559 Scholarship and student aid 6,210,634 7,290,880 7,578,634 8,257,089 8,405,427 8,049,883 4,732,931 4,104, , ,562 Auxilliary enterprises Student activities 148, , , , , , , , , ,269 $ 51,727,500 $ 52,194,555 $ 52,891,237 $ 54,354,518 $ 55,030,060 $ 54,710,532 $ 47,899,838 $ 44,399,131 $ 39,604,413 $ 37,560,390 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Expenditures by Natural Classification Compensation Salaries and Wages 53.8% 54.4% 55.8% 56.4% 56.0% 55.3% 55.9% 56.1% 56.2% 57.5% Fringe Benefits 20.4% 20.6% 20.8% 20.5% 19.9% 19.7% 19.0% 18.5% 18.5% 17.8% Total Compensation 74.1% 75.0% 76.6% 77.0% 75.9% 75.1% 74.9% 74.6% 74.8% 75.3% Other Expenditures Supplies and other 11.0% 11.8% 10.5% 9.9% 11.3% 12.5% 11.8% 12.3% 12.2% 12.6% Utilities and telephone 3.6% 3.5% 3.4% 3.5% 3.7% 3.4% 3.8% 4.2% 4.3% 3.9% Insurance 1.6% 1.5% 1.4% 1.1% 1.0% 1.0% 0.9% 1.0% 1.0% 1.0% Repairs and Maintenance 0.5% 0.2% 0.4% 1.1% 1.1% 1.3% 1.8% 1.1% 0.8% 1.1% Rent 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.0% Depreciation and amortization 8.7% 7.6% 7.4% 7.0% 6.7% 6.4% 6.2% 6.3% 6.2% 5.5% Travel 0.5% 0.4% 0.4% 0.3% 0.4% 0.4% 0.5% 0.5% 0.5% 0.6% 25.9% 25.0% 23.4% 23.0% 24.1% 24.9% 25.1% 25.4% 25.2% 24.7% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: Statement of Revenues, Expenses, and Changes in Net Position by Year Page 90

101 Millions ATLANTIC CAPE COMMUNITY COLLEGE EXPENDITURES BY FUNCTION CURRENT UNRESTRICTED OPERATING FUND LAST TEN FISCAL YEARS $45 $40 $35 $30 $25 $20 $15 Transfers out to other funds Public Service Operation and maintenance of plant Institutional support Student services Academic support Instruction $10 $5 $0 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 Page 91

102 EXPENDITURES BY FUNCTION CURRENT UNRESTRICTED OPERATING FUND LAST TEN FISCAL YEARS (UNAUDITED) FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Functional category: Educational and general: Instruction Credit instruction $ 12,948,059 $ 13,469,850 $ 14,274,635 $ 14,203,892 $ 14,200,961 $ 14,222,376 $ 13,043,496 $ 12,694,084 $ 12,417,439 $ 11,791,544 Non-credit instruction 642, , , , , , , , , ,451 Total Instruction 13,590,591 13,940,882 14,819,295 15,051,483 15,088,157 15,176,641 13,824,767 13,459,769 13,206,771 12,592,995 Academic support 4,370,483 4,132,992 3,769,718 3,915,288 4,299,880 3,818,955 3,723,954 2,997,543 2,652,147 2,754,886 Student services 4,580,976 4,555,309 4,857,323 5,128,037 5,045,442 4,775,742 3,449,210 3,061,723 3,249,065 3,101,211 Institutional support 9,683,970 9,391,470 9,661,161 9,933,648 9,732,736 9,784,216 10,299,263 10,016,854 9,437,039 9,357,198 Operation and maintenance of plant 6,684,695 6,474,015 6,552,666 6,805,272 6,761,158 6,646,731 5,954,054 5,670,631 5,754,451 5,117,767 Public Service 79, ,853 53,523 49,552 45,521 34, , , ,948 92,143 Transfers out to other funds 0 235,235 12, ,308 1,685, ,071 3,550,044 2,589, ,915 5,882 TOTAL $ 38,990,712 $ 38,925,756 $ 39,726,595 $ 41,037,588 $ 42,658,289 $ 40,755,678 $ 40,955,391 $ 37,948,068 $ 34,897,336 $ 33,022,082 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Functional category: Educational and general: Instruction Credit instruction 33.21% 34.60% 35.93% 34.61% 33.29% 34.90% 31.85% 33.45% 35.58% 35.71% Non-credit instruction 1.65% 1.21% 1.37% 2.07% 2.08% 2.34% 1.91% 2.02% 2.26% 2.43% Total Instruction 34.86% 35.81% 37.30% 36.68% 35.37% 37.24% 33.76% 35.47% 37.84% 38.14% Academic support 11.21% 10.62% 9.49% 9.54% 10.08% 9.37% 9.09% 7.90% 7.60% 8.34% Student services 11.75% 11.70% 12.23% 12.50% 11.83% 11.72% 8.42% 8.07% 9.31% 9.39% Institutional support 24.84% 24.13% 24.32% 24.21% 22.82% 24.01% 25.15% 26.40% 27.04% 28.34% Operation and maintenance of plant 17.14% 16.63% 16.49% 16.58% 15.85% 16.31% 14.54% 14.94% 16.49% 15.50% Public Service 0.21% 0.50% 0.13% 0.12% 0.11% 0.08% 0.38% 0.40% 0.37% 0.28% Transfers out to other funds 0.00% 0.60% 0.03% 0.38% 3.95% 1.27% 8.67% 6.82% 1.34% 0.02% TOTAL 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Source: Schedules of Budget Comparison To Actual Page 92

103 Revenue Capacity Information Revenue capacity information is intended to assist users in understanding and assessing the factors affecting the College s ability to generate revenues. Please refer to the following schedules for a historical view of student credit hour enrollments which are the College's most significant revenue source.

104 Student Credit Hours 180, ,000 ATLANTIC CAPE COMMUNITY COLLEGE CREDIT HOUR ENROLLMENTS BY TUITION TYPE LAST TEN FISCAL YEARS (UNAUDITED) On line Leased Curr General Dual Enrollment Culinary 140, , ,000 80,000 60,000 40,000 20,000 0 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 Fiscal Year Page 93

105 CREDIT HOUR ENROLLMENTS BY COUNTY OF ORIGIN LAST TEN FISCAL YEARS (UNAUDITED) Student Credit Hours 180, ,000 International Leased Curriculum Other Cape May Atlantic 140, , ,000 80,000 60,000 40,000 20,000 - FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 Fiscal Year Page 94

106 ENROLLMENT DATA LAST TEN FISCAL YEARS (UNAUDITED) CREDIT HOUR ENROLLMENT BY SEMESTER Fiscal Year Ended Summer Fall Spring Total 6/30/ ,547 68,932 65, ,753 6/30/ ,365 74,309 69, ,914 6/30/ ,782 75,838 72, ,875 6/30/ ,662 77,357 72, ,657 6/30/ ,582 78,597 76, ,851 6/30/ ,347 77,636 78, ,428 6/30/ ,462 70,833 70, ,941 6/30/ ,246 69,245 65, ,445 6/30/ ,072 67,159 63, ,519 6/30/ ,812 65,555 62, ,729 *Total student credit-hours not including non-credit equivalent credit hours Source: Annual Enrollment Reports Page 95

107 ENROLLMENT DATA LAST TEN FISCAL YEARS (UNAUDITED) CREDIT HOUR ENROLLMENT COMPARISON BY COUNTY OF ORIGIN Atlantic Cape May Other Dual Enroll/ International Total FY15 General 89,829 20,869 3, ,776 Culinary 1, ,706 3,087 On-line 20,291 7,365 2,559 30,215 Dual Enrollment Total 111,168 28,567 7, ,753 FY14 General 97,309 22,726 3, ,396 Culinary 1, ,314 4,256 On-line 20,115 7,009 2,541 29,665 Dual Enrollment Total 118,928 30,173 8, ,914 FY13 General 100,697 23,652 2, ,228 Culinary 1, ,507 4,927 On-line 20,465 7,093 2,686 30,244 Dual Enrollment Total 122,978 31,349 8, ,875 FY12 General 103,021 24,263 2, ,600 Culinary 2, ,682 5,367 On-line 20,859 7,035 2,406 30,300 Dual Enrollment Total 125,985 31,878 7, ,657 FY11 General 104,821 27,112 2, ,556 Culinary 2, ,847 5,651 On-line 21,549 7,575 2,110 31,234 Dual Enrollment Total 128,637 35,224 7, ,851 FY10 General 104,017 28,267 2, ,154 Culinary 2, ,006 5,975 On-line 21,651 7,883 2,408 31,942 Dual Enrollment Total 127,979 36,808 8, ,428 FY09 General 92,442 26,731 2, ,894 Culinary 1, ,423 4,754 On-line 20,236 7,054 2,487 29,777 Dual Enrollment Total 114,460 34,334 7, ,941 FY08 General 90,888 23,790 3, ,050 Culinary 1, ,783 4,989 On-line 18,188 5,731 2,696 26,615 Dual Enrollment Leased Curr Total 110,668 30,135 8, ,445 FY07 General 88,546 21,925 2, ,344 Culinary 1, ,327 5,506 On-line 16,553 5,218 3,350 25,121 Dual Enrollment Leased Curr 1,336 1,336 Total 106,779 27,642 9,550 1, ,519 FY06 General 85,962 21,743 2, ,701 Culinary 1, ,341 5,719 On-line 15,567 4,940 4,051 24,558 Dual Enrollment Leased Curr 1,612 1,612 Total 103,311 27,279 10,388 1, ,729 Source: County and Fiscal Year totals agree to audited Full-Time Equivalent Enrollment reports Page 96

108 ENROLLMENT DATA LAST TEN FISCAL YEARS (UNAUDITED) % CREDIT HOUR ENROLLMENT COMPARISON BY COUNTY OF ORIGIN Atlantic Cape May Other Dual Enroll/ International % of Total FY15 General 80.80% 73.05% 41.92% 77.00% Culinary 0.94% 1.17% 23.23% 2.09% On-line 18.25% 25.78% 34.85% 20.45% Dual Enrollment % 0.46% Total % % % % % FY14 General 81.82% 75.32% 40.91% 78.14% Culinary 1.26% 1.45% 28.16% 2.70% On-line 16.91% 23.23% 30.93% 18.79% Dual Enrollment % 0.38% Total % % % % % FY13 General 81.88% 75.45% 35.67% 78.11% Culinary 1.48% 1.93% 31.06% 3.03% On-line 16.64% 22.63% 33.28% 18.57% Dual Enrollment % 0.29% Total % % % % % FY12 General 81.77% 76.11% 31.28% 78.23% Culinary 1.67% 1.82% 36.22% 3.24% On-line 16.56% 22.07% 32.50% 18.29% Dual Enrollment % 0.24% Total % % % % % FY11 General 81.49% 76.97% 34.60% 78.30% Culinary 1.76% 1.52% 37.56% 3.29% On-line 16.75% 21.51% 27.84% 18.18% Dual Enrollment % 0.24% Total % % % % % FY10 General 81.28% 76.80% 34.65% 77.93% Culinary 1.81% 1.79% 36.29% 3.45% On-line 16.92% 21.42% 29.07% 18.42% Dual Enrollment % 0.21% Total % % % % % FY09 General 80.76% 77.86% 35.66% 77.67% Culinary 1.56% 1.60% 31.75% 3.03% On-line 17.68% 20.55% 32.59% 18.97% Dual Enrollment % 0.33% Total % % % % % FY08 General 82.13% 78.94% 38.10% 78.47% Culinary 1.44% 2.04% 31.44% 3.32% On-line 16.43% 19.02% 30.46% 17.69% Dual Enrollment 36.28% 0.19% Leased Curr 63.72% 0.34% Total % % % % % FY07 General 82.92% 79.32% 30.08% 77.89% Culinary 1.57% 1.81% 34.84% 3.78% On-line 15.50% 18.88% 35.08% 17.26% Dual Enrollment 13.70% 0.15% Leased Curr 86.30% 0.92% Total % % % % % FY06 General 83.21% 79.71% 28.84% 77.56% Culinary 1.72% 2.18% 32.16% 4.01% On-line 15.07% 18.11% 39.00% 17.21% Dual Enrollment 7.94% 0.10% Leased Curr 92.06% 1.13% Total % % % 7.94% % Source: County and Fiscal Year totals agree to audited Full-Time Equivalent Enrollment reports Page 97

109 Demographic and Economic Information Demographic and economic information is intended (1) to assist users in understanding the socioeconomic environment within which the College operates and (2) to provide information that facilitates comparisons of financial statement information over time and among Colleges. Please refer to the following exhibits for a historical view of the demographic and economic statistics and factors prevalent in the location in which the College operates.

110 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS (UNAUDITED) SERVICE AREA SERVICE AREA SERVICE AREA SERVICE AREA SERVICE AREA SECONDARY AND ELEMENTARY SERVICE AREA YEAR POPULATION PERSONAL INCOME ($ths) PER CAPITA INCOME UNEMPLOYMENT % ENROLLMENT HIGH SCHOOL GRADUATES ,553 $16,866,555 $45, ,132 4, ,016 $16,270,022 $43, ,062 4, ,726 $16,629,499 $44, ,361 4, ,939 $15,749,407 $42, ,655 4, ,916 $15,242,347 $40, ,385 4, ,803 $14,834,268 $40, ,047 4, ,519 $15,308,814 $41, ,702 4, ,298 $14,776,390 $40, ,498 4, ,867 $14,158,842 $38, ,868 4, ,677 $13,583,146 $37, ,255 3,824 Note: The College's service area is comprised on Atlantic and Cape May Counties, New Jersey Note: Secondary & Elementry Enrollments & High School Graduates are based on fiscal year, i.e., 2014 (07/01/ /30/2014) Source: College records Page 98

111 PRINCIPAL EMPLOYERS, 2011 Service Area: Atlantic and Cape May Counties, New Jersey (UNAUDITED) LARGEST EMPLOYERS COUNTY EMPLOYER NUMBER OF EMPLOYEES TYPE CAPE MAY Woodbine Developmental Center 1400 PUBLIC CAPE MAY Cape Regional Medical Center 1050 PRIVATE CAPE MAY Acme Markets 1022 PRIVATE CAPE MAY Wawa 649 PRIVATE CAPE MAY Cold Spring Fish and Supply Co. 500 PRIVATE CAPE MAY Walmart 277 PRIVATE CAPE MAY Cape Counseling Services 253 PRIVATE CAPE MAY Shop Rite 248 PRIVATE CAPE MAY Shores at Wesley Manor 230 PRIVATE CAPE MAY Home Depot 130 PRIVATE CAPE MAY Verizon 125 PRIVATE ATLANTIC AtlantiCare Health System 4992 PRIVATE ATLANTIC Shore Medical Center 1587 PRIVATE ATLANTIC Shop Rite 1076 PRIVATE ATLANTIC Atlantic City Electric 1000 PRIVATE ATLANTIC Wawa 915 PRIVATE ATLANTIC Walmart 716 PRIVATE ATLANTIC Acme Markets 597 PRIVATE ATLANTIC Bacharach Institute of Rehabilitation 525 PRIVATE ATLANTIC Atlantic City Linen 500 PRIVATE ATLANTIC South Jersey Industries Inc. 455 PRIVATE ATLANTIC Caring Inc. 372 PRIVATE ATLANTIC Atlantic Medical Imaging 350 PRIVATE ATLANTIC Home Depot 330 PRIVATE ATLANTIC Bayada Nurses 305 PRIVATE ATLANTIC Seaview-Richard Stockton College 300 PRIVATE Source: College records Page 99

112 FULL-TIME COLLEGE STAFFING LAST TEN FISCAL YEARS (UNAUDITED) CREDIT HOUR ENROLLMENT AND FULL TIME COLLEGE STAFFING Fiscal Credit Hour TOTAL Year Ended Enrollment FTE % Change Faculty Staff FULL-TIME % Change (AUDITED)* 6/30/ ,753 4, % % 6/30/ ,914 5, % % 6/30/ ,875 5, % % 6/30/ ,657 5, % % 6/30/ ,851 5, % % 6/30/ ,428 5, % % 6/30/ ,941 5, % % 6/30/ ,445 5, % % 6/30/ ,519 4, % % 6/30/ ,729 4, % % # of Full-time Employees Staff Faculty Fiscal Year Ended Source: College records Page 100