LINCOLN LAND COMMUNITY COLLEGE COMMUNITY COLLEGE DISTRICT #526 SPRINGFIELD, ILLINOIS

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1 SPRINGFIELD, ILLINOIS COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Years Ended June 30, 2016 and 2015 Prepared By: Administrative Services Office Todd McDonald Vice President Administrative Services

2 June 30, 2016 CONTENTS INTRODUCTORY SECTION Letter of Transmittal... i-vii ASBO Certificate of Excellence in Financial Reporting... viii Organizational Chart... ix Principal Officials... x FINANCIAL SECTION Independent Auditor s Report Management s Discussion and Analysis... MD&A Basic Financial Statements: Statements of Net Position... 4 Statements of Revenues, Expenses and Changes in Net Position... 5 Statements of Cash Flows Lincoln Land Community College Foundation: Statements of Financial Position... 8 Statements of Activities Notes to Financial Statements Required Supplementary Information (Unaudited) Schedule of College s Proportionate Share of Net Pension Liability Schedule of College s Contributions Notes to Required Supplementary Information STATISTICAL SECTION (UNAUDITED) Net Position by Component Changes in Net Position Assessed Value and Estimated Actual Value of Taxable Property Property Tax Rates Direct and Overlapping Governments Principal Taxpayers Property Tax Rates, Extensions, and Collections Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Legal Debt Margin Computation of Direct and Overlapping Bonded Debt, General Obligation Bonds Demographic and Economic Statistics Major Employers Operating Information and Employees Operating Statistics Capital Asset Statistics Student Enrollment Demographic Statistics... 69

3 June 30, 2016 CONTENTS SPECIAL REPORTS SECTION SUPPLEMENTARY INFORMATION (Unaudited) Combining Schedules of Net Position Accounts, by Subfund Combining Schedules of Revenues, Expenses and Changes in Net Position, by Subfund Notes to Supplementary Information UNIFORM FINANCIAL STATEMENTS: Uniform Financial Statement No. 1 All Funds Summary Uniform Financial Statement No. 2 Summary of Capital Assets and Long Term Debt Uniform Financial Statement No. 3 Operating Funds Revenues and Expenditures Uniform Financial Statement No. 4 Restricted Purposes Fund Revenues and Expenditures Uniform Financial Statement No. 5 Current Fund - Expenditures by Activity CERTIFICATION OF CHARGEBACK REIMBURSEMENT Certification of Chargeback Reimbursement For Fiscal Year 2017 (Unaudited) ILLINOIS COMMUNITY COLLEGE BOARD STATE GRANTS FINANCIAL COMPLIANCE SECTION: Independent Auditor s Report Independent Auditor s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Grant Program Financial Statements Performed in Accordance with Government Auditing Standards State Adult Education Grant Program Balance Sheet Statement of Revenues, Expenses and Changes in Net Position ICCB Compliance Statement Notes to Financial Statements State Grant Programs ENROLLMENT DATA Independent Accountant s Report on the Schedule of Enrollment Data and Other Bases Upon Which Claims are Filed Schedule of Enrollment Data and Other Bases Upon Which Claims Are Filed Reconciliation of Total Semester Credit Hours Documentation of Residence Verification Steps (Unaudited) Summary of Assessed Valuation (Unaudited)... 98

4 INTRODUCTORY SECTION

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6 Community-based programs and services. It was through the following institutional goals for fiscal year 2016 that the District carried out its mission: Goal I Student Access and Success The District is committed to promoting academic access and success as well as personal development for all students. Goal II Financial Strength The District is committed to fiscal responsibility and stewardship. Goal III Economic Responsiveness The District is committed to providing leadership in meeting the economic needs of the community. Goal IV Community Engagement The District is committed to providing leadership in meeting the learning, cultural, social and recreational needs of the community. Goal V Diversity and Cultural Competency The District is committed to strengthening cultural competency relative to a diverse and global society among faculty, staff and students. Goal VI Operational Strength The District is committed to developing a work environment that promotes growth, development and open communication. The District is committed to ensuring educational excellence, recognizing diversity and multiculturalism, providing excellent facilities, using financial resources prudently and building partnerships to extend services to the District. Lincoln Land Community College serves approximately 15,000 students per year with an average age of 28. The students are comprised of 80.57% White Non-Hispanic, 12.76% African- American, 3.76% Hispanic, and the remaining 2.91% Asian and other. These statistics are based on end-of-year credit enrollment data. The District maintains its accounts and prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The accounting policies also conform to the Fiscal Management Manual published by the Illinois Community College Board. The ICCB requires accounting by funds in order that limitations and restrictions on resources can be easily monitored. The financial records of the District are maintained on the accrual basis of accounting, whereby all revenues are recorded when earned, and all expenses are recorded when they have been reduced to a legal obligation to pay. ii

7 ECONOMIC CONDITION AND OUTLOOK The District serves an area of approximately 4,115 square miles, which includes all or parts of the following counties Bond, Cass, Christian, DeWitt, Fayette, Greene, Logan, Macon, Macoupin, Mason, Menard, Montgomery, Morgan, Sangamon and Scott. The District draws students from communities large and small, from farms and urban areas, and from a broad range of ages, occupations, interests and needs. The District s tax base within Sangamon County is estimated to be: 69.24% residential, 6.11% farm,.44% industrial,.07% mineral, and 24.11% commercial. The total tax base amounts to $6,004,643,451 and has increased by 2.07% since last year. MAJOR INIATIVES FOR THE YEAR: Sexual Assault and Violence Education (SAVE) Task Force created An active new task force on campus this year provided educational resources, inspired collective responsibility, and increased awareness of resources for survivors of gender-based violence. The Sexual Assault & Violence Education (SAVE) Task Force was established in 2015 to provide programming and education on the topic of gender-based violence with the goal of informing the LLCC community about issues such as consent, dating violence, domestic violence, stalking, and sexual assault. The SAVE Task Force provides a platform where students, staff, and faculty can learn about safe bystander intervention strategies, recognize and explore the aspects of our society that perpetuate gender-based violence, learn to recognize the warning signs of unhealthy relationships, and become informed about what to do in the event of a gender-based crime. The SAVE Task Force distributes information on resources for victims and survivors of gender-based violence to LLCC community members, including Help On Campus cards, created to provide students with information on what to do in the case of a sexual assault, how to reduce the risk of sexual assault and avoiding unhealthy relationships. Also, the task force participates in community events such as the annual Take Back the Night march and the Walk a Mile in Her Shoes event benefiting the local Prairie Center Against Sexual Assault. In observance of Sexual Assault Awareness Month, students, faculty and staff were encouraged to heighten awareness of this issue and show their solidarity and support by wearing a teal ribbon. The task force also sponsored a Day of Action Runway Show, challenging faculty, staff and students to walk down a red carpet runway in women s high heels. TRIO Student Support Services established LLCC was awarded a $1.1 million grant to initiate intensive student success services for students who may have barriers to degree completion. Dr. Deanna Blackwell was hired to direct the new LLCC TRIO Student Support Services, a federally-funded program providing targeted academic support for firstgeneration college students. The TRIO office opened in November and offers an array of resources, with staff who work one-on-one with participating students. The program aims to guide and encourage students to persevere along their academic path, maintain good or excellent academic standing, graduate from LLCC and transfer to a fouryear college or university to earn a bachelor s degree. TRIO provides intensive assistance such as iii

8 personalized advising, support with time management and study skills, and guidance with other issues that may impede success. To participate in the program, students must be a U.S. citizen or permanent resident, enrolled in an associate of arts or associate of science degree program at the main campus, plan to transfer to a four-year college or university, and be a low-income, first generation college student or disabled student. One hundred-forty students who are either the first in their families to attend college, are low income and/or have special accessibility needs will be identified and invited to participate each year. AQIP Action Projects Implemented A student employment process developed through AQIP has been designed and implemented in order to create an efficient, accessible, and consistent student employment process for the college. A consistent process will allow the institution to assess the need for student employees, create job descriptions, standardize pay rates among student employees, allow for a complete use of federal work study funds, and reduce budget expenditures. Addressing this challenge will allow both the institution and its students to receive maximum benefit from the FWS financial aid that has been awarded. Further, it will simplify the process by which college employees post, and students apply for, open student employee positions on campus. By employing students on campus, they will be more engaged with the college which promotes student success and completion. Another AQIP action project team worked to develop a more comprehensive process that all academic programs can follow to ensure program assessment occurs and is available for the fiveyear program review, incorporating program assessment within the program review process. Recommendations presented by the action project team have been accepted and implementation of the new assessment process that was developed has begun with a pilot group of faculty. The pilot began September 2016 and is expected to be completed in spring FOR THE FUTURE: $850,000 Gift Allows Aviation Program to Expand The LLCC Board of Trustees officially approved of naming the new aviation classroom building the Levi, Ray and Shoup, Inc. Aviation Center at Lincoln Land Community College following a donation of $850,000 by Dick Levi, of Levi, Ray and Shoup, Inc. of Springfield for construction of a new classroom facility adjacent to the current LLCC aviation center at the airport. Expansion of the aviation facility is expected to directly impact workforce development, job creation and business retention in the community. The addition of needed classroom space at the hangar will allow LLCC to provide space for the aviation program to expand, which provides training for good paying careers in aviation mechanics and maintenance. Ground was broken in July, and the Springfield Airport Authority will own and oversee construction of the new facility. LLCC anticipates utilizing the new classroom facility in spring Grant from Greater Springfield Chamber of Commerce creates Open Door Program Beginning in fall 2016, a three-year grant from the Greater Springfield Chamber of Commerce Q5 initiative is providing funding for a new mentoring program at LLCC for men of color. The initial target group in the Open Door program will be men of color who are currently enrolled in business-related majors at LLCC. Participants in the program will be provided with targeted academic support services through LLCC staff, faculty and mentors in the Springfield business community. iv

9 The program will serve an annual cohort of students and aims to increase the completion and transfer rate for men of color, a group traditionally underrepresented in higher education. A mentoring program will be developed between program participants and leaders in the local business community, leading to future employment opportunities. $10,000 Award for Sustainability and Workforce Efforts Leads to New Green Initiatives LLCC is one of nine community colleges across the nation to receive the 2016 Green Genome Award from the American Association of Community Colleges (AACC) and its Sustainability Education and Economic Development Center (SEED). The $10,000 prize, made possible through the Kresge Foundation, will be used to further support the college s high tunnel local foods initiative, and to restore Lake Macoupin on the LLCC-Springfield campus with native plantings. The college is in its 10 th year of being formally committed to sustainable operations and emerging as a leader to advance green economy industry job growth and healthy sustainable regions. LLCC organized a Sustainability Team in 2007 to create a culture of sustainability throughout the college. Recommendations from the Sustainability Team offer financial and resource conservation benefits to the campus and community, such as adopting the use of green cleaning products, switching all vending machines to energy star compliant models, and installing occupancy sensors in classrooms. LLCC established native prairie landscapes on campus that replaced high maintenance grass, creating habitats for native wildlife and saving the college money, time and an estimated 200 gallons of gas annually. Descriptive signage indicates the various blooming prairie flowers and grasses for those walking nearby. The different native plant species added to the grounds have provided additional teaching opportunities for biology and environmental students. In addition, the bird banding project at the college has documented an increase in the types of birds found on campus. Energy efficient upgrades to campus facilities totaling $1.2 million have included replacing aged boilers and chillers with high efficiency units, replacing constant volume air handlers with variable air volume handlers, installing energy efficient T8 lighting, replacing windows with energy efficient models, and installing energy management systems. FINANCIAL INFORMATION Internal Controls. Management of the District is responsible for establishing and maintaining internal controls designed to ensure that the assets of the District are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. The internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management. Tests are made by the District s independent auditors to determine the adequacy of the internal controls, including that portion related to federal financial assistance programs, as well as to v

10 determine that the District has complied with applicable laws and regulations. No findings were presented in the Comprehensive Annual Financial Report. Budgetary Controls. In addition, the District maintains budgetary controls. The objective of the budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the District s Board of Trustees. Activities of the funds are included in the annual appropriated budget. The level of budgetary control (that is the level at which expenditures cannot legally exceed the appropriated amount) is established within each individual fund. The District also maintains an encumbrance accounting system as a technique of accomplishing budgetary control. The actual revenues compared to budget for the Operating Funds were less than budget by $2,400,861. The actual expenditures compared to budget for the General Fund were less than budget by $3,792,499. These numbers do not reflect transfers to other funds. Debt Administration. During fiscal year 2009 the District sold $35,200,000 in debt certificates which were paid in full February 1, 2009 with the proceeds from $34,970,000 General Obligation Bond Series 2008A issue. During FY2016, the District refinanced a portion of these bonds resulting in a lower interest rate and an approximate savings of $2,822,992. The District is responsible for making semi-annual payments of interest which are due June 15 and December 15 and principal payments which are due annually each December 15. The remaining principal payments will vary starting at $1,225,000 in 2017 and ending with $3,580,000 in The interest rate for the two bonds also varies from 2.00% in 2009 and ends at 5.00% in During fiscal year 2001 the District entered into a lease agreement with the Lincoln Land Community College Foundation. The Foundation sold $3,150,000 of Economic Development Revenue Bonds and the District is responsible for making semi-annual payments to the Foundation, which are due each September 1 and March 1. The bond was refinanced as well during FY16 for a savings of approximately $106,000. The remaining payments will vary starting at $237,941 in 2017 and ending at $127,818 in 2020 with a new interest fixed at During fiscal year 2013 the District entered into a 7-year note for Energy Conservation Projects. The District is responsible for quarterly principal payments of $42,857 at a rate of 1.85% interest. Cash Management. For the purpose of overall investment of excess funds, the District is governed by the Illinois Public College Act, and the statutes governing investment of public funds of the Illinois Revised Statutes (Chapter et. Seq.) The fiduciary responsibility for said investments is entrusted to the District s Board of Trustees, who have delegated that function to the Treasurer of the District. In keeping with existing Board policy, all investments of excess funds are made in a prudent conservative and secure manner and in accordance with the guidelines detailed in the District Investment Policy No 6.8. The investment income for all funds totaled $257,731 in fiscal year The average rate of return was.04% to.75% depending on the depository account for fiscal year As of June 30, 2016, investments were at United Community Bank and the Illinois Funds. RISK MANAGEMENT The District participates in the Illinois Community College Risk Management Consortium (Consortium), which was established in 1981 by several Chicago area community colleges as a means of reducing the cost of general liability insurance. The Consortium is a public entity risk pool currently operating as a common risk management and insurance program for the member vi

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12 The Certificate of Excellence in Financial Reporting Award is presented to Lincoln Land Community College for its Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2015 The CAFR has been reviewed and met or exceeded ASBO International s Certificate of Excellence standards Brenda R. Burkett, CPA, CSBA, SFO President John D. Musso, CAE, RSBA Executive Director

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14 Principal Officials Year Ended June 30, 2016 Board of Trustees Position Term Expires Craig Findley Chair 2017 Jerry Wesley Vice Chair 2017 Dennis Shackelford Secretary 2019 Kent Gray Trustee 2017 Wayne Rosenthal Trustee 2019 Jeff Fulgenzi Trustee 2017 Justin Reichert Trustee 2019 Brandon Lewis Student Trustee 2017 Officers of the College Charlotte J. Warren Todd McDonald Eileen Tepatti Lesley Frederick Judy Jozaitis Esteban Cruz Lynn Whalen President Vice President, Administrative Services Vice President, Academic Services Vice President, Student Services Vice President, Workforce Development Chief Information Officer Executive Director, College Relations/Marketing Official Issuing Report Todd McDonald Karie Longhta Vice President, Administrative Services Associate Vice President of Finance Division Issuing Report Administrative Services x

15 FINANCIAL SECTION

16 Independent Auditor s Report The Board of Trustees Lincoln Land Community College Community College District #526 Springfield, Illinois Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities and the discretely presented component unit of Lincoln Land Community College Community College District #526 (the College), as of and for the year ended June 30, 2016, 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. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Lincoln Land Community College Foundation (the Foundation), which represents the entire discretely presented component unit. Those 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, is based solely 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of the Lincoln Land Community College Foundation were not audited in accordance with Government Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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 opinions. 1.

17 Opinions 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 and the discretely presented component unit of the College, as of June 30, 2016, and the respective changes in its financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Prior Period Financial Statements Audited by a Predecessor Auditor The basic financial statements of the College as of and for the year ended June 30, 2015 were audited by other auditors. Their report dated October 9, 2015 expressed unmodified opinions on the respective financial statements of the business-type activities and the discretely presented component unit and included an emphasis of matter paragraph for the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management s Discussion and Analysis and other Required Supplementary Information, 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 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. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the College s basic financial statements. The Introductory Section, Statistical Section, Uniform Financial Statements, Certification of Chargeback Reimbursement, and Supplementary Information as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The uniform financial statements section information is required by the Illinois Community College Board and is presented on the modified accrual basis of accounting. The Uniform Financial Statements are the responsibility of management and were derived from and relate 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 Uniform Financial Statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The Introductory Section, Statistical Section, Certification of Chargeback Reimbursement, and Supplementary Information 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. 2.

18 Report on Other Legal and Regulatory Requirements In accordance with Government Auditing Standards, we have also issued our report dated October 10, 2016 on our consideration of the College s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College s internal control over financial reporting and compliance. October 10, 2016 Springfield, Illinois Crowe Horwath LLP 3.

19 Management s Discussion and Analysis This section of Lincoln Land Community District s Comprehensive Annual Financial Report presents management s discussion and analysis of the District s financial activity during the fiscal year ended June 30, 2016, 2015 and Since this management s discussion and analysis is designed to focus on current activities, resulting change and currently known facts, please read it in conjunction with the transmittal letter (pages i-vii), the District s basic financial statements (pages 4-10) and the footnotes (pages 11-34). Responsibility for the completeness and fairness of this information rests with the District. Using This Annual Report The financial statement focuses on the District as a whole. The Management, Discussion and Analysis letter is presented in comparison form. The District financial basic statements (see pages 4-34) are designed to emulate corporate presentation models whereby all District activities are consolidated into one total. The focus of the Statements of Net Position is designed to be similar to bottom line results for the District. This statement combines and consolidates current financial resources (short-term spendable resources) with capital assets. The Statements of Revenues, Expenses, and Changes in Net Position focus on both the gross costs and the net costs of District activities, which are supported by property taxes, student tuition and fees and state revenues. This approach is intended to summarize and simplify the user s analysis of cost of various District services to students and the public. Financial Highlights As of June 30, 2016, 2015 and 2014, the District s net positions were $75,688,164, $71,892,697 and $68,200,985 of which 45.2%, 47.7% and 48.1% respectively, represents the net investment in capital assets. Unrestricted resources were 22.3%, 21.1% and 19.1%, of total net position. The restricted resources were 32.5%, 31.2% and 32.8% in 2016, 2015 and 2014 respectively. The Districts current assets totaled $67,345,387, $63,367,126 and $60,683,247. Cash and cash equivalents represent 56.9%, 56.4% and 52.7% of the total current assets. Total liabilities and deferred inflows of resources are $58,163,946, $58,985,883 and $59,565,269 for 2016, 2015 and 2014 respectively; 50.8%, 47.3% and 43.9% current liabilities and deferred inflows of resources and 49.2%, 52.7% and 56.1% are non-current liabilities. Total operating expenses at June 30, 2016, 2015 and 2014 were $71,347,621, $74,723,310 and $73,169,289. Instruction represents 36.5%, 33.7% and 33.9% of the total expenses. Academic Support and Student Services represented 20.4%, 21.9% and 22.2% of the total costs. Institutional support represented the next largest cost category at 16.7%, 18.1% and 18.9% of the total operating expenses. Fiscal year 2016, 2015 and 2014 depreciation was $3,704,801, $3,440,925 and $3,295,514; 5.2%, 4.6% and 4.5% of the total costs. Total operating revenues at June 30, 2016, 2015 and 2014 were $14,614,609, $15,037,457 and $15,015,498. Student tuition and fees represent 62.4%, 61.3% and 62.5%; while auxiliary enterprise revenue represents 31.8%, 35.3% and 33.5% of the total operating revenues. MD&A - 1 -

20 Net non operating revenue totaled $60,528,479, $63,022,290 and $59,846,909 respectively. Property taxes represent 50.1%, 45.8% and 47.6%, while state and federal grant and contracts represents 51.9%, 56.1% and 55.0% of the total non-operating revenue. The District has continually monitored their revenue stream and expenses and due to the consolidated effort of the District s administration, the District continues to maintain a healthy financial position. Financial Analysis of the District as a whole: Net Position as of June 30, (in millions) Current and Other Assets $67.3 $63.3 $60.7 Capital Assets $66.0 $67.5 $67.0 Total Assets $133.3 $130.8 $127.7 Deferred Outflows of resources $0.5 $0.0 $0.0 Current Liabilities $14.4 $14.0 $13.3 Long-Term Liabilities $28.6 $31.0 $32.5 Deferred Inflows of Resources $15.2 $14.0 $13.7 Total Liabilities and Deferred Inflows of Resources $58.2 $59.0 $59.5 Net Position Net Investment in Capital Assets $34.2 $34.2 $32.8 Restricted $24.5 $22.3 $22.3 Unrestricted $16.9 $15.3 $13.1 Total Net Position $75.6 $71.8 $68.2 This schedule is prepared from the District s Statement of Net Position (page 4) which is presented on an accrual basis of accounting; whereby, assets are capitalized and depreciated. There were no major changes between the three fiscal years presented. Due to the Districts constant monitoring of revenues and expense, the District has seen a healthy increase is its cash and cash equivalents and the District is currently reducing their long term debt without taking on any additional liabilities. The changes between Current and Other Assets and Capital Assets are minor between the three years. MD&A - 2 -

21 The following is a graphic illustration of Net Position: Net Position 17% 24% 34% Investment in Capital Assets Restricted Unrestricted Operating Results for the year Ended June 30, (in millions) Operating Revenue Tuition and Fees $9.1 $9.2 $9.5 Auxiliary $4.6 $5.3 $5.0 Other $0.9 $0.5 $0.6 Total $14.6 $15.0 $15.1 Less Operating Expenses $71.3 $74.7 $73.2 Net Operating Expenses ($56.7) ($59.7) ($58.1) Non-operating Revenue Property Taxes $30.3 $28.9 $28.3 State Grants and Contracts $16.2 $17.9 $16.1 Federal and Local Grants & Contracts $15.2 $17.4 $16.9 Investment Income $0.3 $0.2 $0.2 Interest Expense ($1.5) ($1.4) ($1.7) Total $60.5 $63.0 $59.8 MD&A - 3 -

22 Operating Results for the year Ended June 30, (in millions) Continued Increase Before Contributions $3.8 $3.3 $1.7 Contributions $0.0 $0.4 $0.0 Increase in Net Position $3.8 $3.7 $1.7 Net Position, Beginning of Year $71.9 $68.2 $66.5 Prior Period Adjustment $ Net Position, Beginning of Year, Restated $71.9 $68.2 $66.0 Net Position, End of Year $75.7 $71.9 $68.2 The District received contributions from the State Universities Retirement System of $10,644,621 year ending June 30, The District implemented GASB Statement No 68 for the fiscal year ended June 30, As a result, the District recognized revenue and pension expense of $14,261,228 and $12,321,570 for the fiscal year ended June 30, 2016 and 2015, respectively. The following is a graphic illustration of Revenues by Source: Revenue by Source 20% 1% 12% 6% 0% Tuition and Fees Auxiliary Other 21% 40% Property Taxes State Grants and Contracts Federal and Local Grants & Contracts Investment Income MD&A - 4 -

23 Operating Expenses for the Year Ended June 30, (in millions) Operating Expense Instruction $26.1 $25.3 $24.8 Academic Support $5.5 $5.9 $5.9 Student Services $9.1 $10.5 $10.5 Public Service $1.9 $2.3 $2.3 Auxiliary services $1.1 $1.2 $1.1 Institutional Support $12.0 $13.5 $13.8 Operations & Maintenance Plant $6.4 $5.2 $5.3 Tuition Chargeback $0.0 $0.8 $0.1 Auxiliary enterprises $5.5 $6.6 $6.1 Depreciation $3.7 $3.4 $3.3 Total $71.3 $74.7 $73.2 Due to the lack of state funding during FY16, the District implemented a cost reduction plan. Only items that were absolutely needed were purchased during the last quarter of the fiscal year. Included in the Institutional Support cost was the FY16, FY15 and FY14 write off of Illinois Veteran grants, Illinois National Guard grants and MIA-POW grants. The following is a graphic illustration of Operating Expenses: Operating Expenses 0% 8% 5% 9% 36.% Instruction Academic Support Student Services Public Service 17% Auxiliary services Institutional Support 1% 3% 13% 8% Operations & Maintenance Plant Tuition Chargeback Auxiliary enterprises Depreciation MD&A - 5 -

24 Capital Assets, Net June 30, Capital Assets Land and Improvements $16.6 $15.7 $13.9 Building $84.0 $83.0 $80.4 Technology $2.2 $2.2 $2.2 Equipment $8.7 $8.5 $8.3 Total $111.5 $109.4 $104.8 Less Accumulated Depreciation $46.0 $42.6 $39.3 Net Capital Assets $65.5 $66.8 $65.5 Construction in Progress $0.5 $0.7 $1.5 Current year additions net of depreciation amounted to ($1,310,079), $1,282,635 and ($406,891) for years ending June 30, 2016, 2015, and All large construction projects relating to the FY08 Bond issue have now been capitalized and removed from Construction in Progress. For further detail see footnote 5 on Capital Assets page 21. General Long-term Debt June 30, Leases Payable $1.7 $2.1 $2.4 Notes Payable $0.6 $0.8 $1.0 Bonds Payable $29.6 $30.4 $31.4 Bond discount ($0.1) ($0.3) ($0.3) Bond premium $0.2 $0.0 $0.0 Compensated Absences $1.2 $1.2 $1.2 Total $33.2 $34.2 $37.1 The current portion of the general long-term debt due within the next twelve months is $4,646,802, for further details see Footnote 4 - Long-Term Debt pages The District refinanced its FY08 Bonds payable which created an interest savings of about $2,822,992. MD&A - 6 -

25 Requests for Information This financial report has been prepared in full disclosure to provide the reader with an overview of the District s financial operations. If the reader has questions or would like additional information about the District, please direct the request to the Associate Vice President of Finance, 5250 Shepherd Road, P.O. Box 19256, Springfield, IL MD&A - 7 -

26 BASIC FINANCIAL STATEMENTS

27 Statements of Net Position June 30, 2016 and ASSETS AND DEFERRED OUTFLOWS Assets Current assets: Cash, cash equivalents and investments $ 38,352,378 $ 35,738,205 Restricted cash 248, ,661 Accounts receivable: Property taxes 19,992,154 18,706,733 Government claims 1,592,230 1,531,524 Student tuition and fees 5,977,081 5,760,787 Other receivables, net 667, ,566 Prepaid expenses 8,957 7,940 Inventories 505, ,710 Total current assets 67,345,387 63,367,126 Non-current assets: Land 514, ,354 Construction-in-progress 490, ,221 Depreciable capital assets, net of accumulated depreciation 64,958,590 66,287,363 Total non-current assets 65,963,789 67,469,938 Total assets 133,309, ,837,064 Deferred outflows of resources Deferred pension expense 52,498 41,516 Deferred loss on refunding 490,436 - Total deferred outflows of resources 542,934 41,516 LIABILITIES, DEFERRED INFLOWS AND NET POSITION Liabilities Current liabilities: Accounts payable 989,423 1,684,774 Accrued expenses 1,741,106 1,651,661 Claims payable 200, ,000 Other liabilities 197, ,229 Interest payable 63,709 94,139 Unearned student tuition and fees 6,562,423 6,868,216 Unearned revenue 2,555 22,251 Bonds, contracts and leases payable 3,823,784 2,293,134 Compensated absences 823, ,005 Total current liabilities 14,403,167 13,889,409 Non-current liabilities: Bonds, contracts and leases payable 28,232,888 30,724,127 Compensated absences 345, ,577 Total non-current liabilities 28,578,558 31,046,704 Deferred inflows of resources Deferred property taxes 15,182,221 14,049,770 Net position Net investment in capital assets 34,221,597 34,452,677 Restricted for capital projects 5,442,193 5,291,689 Restricted for debt service 1,367, ,232 Restricted for grant purposes 826, ,754 Restricted for audit purposes 90,744 88,702 Restricted for liability insurance 4,247,658 3,102,156 Restricted for pension contribution 52,498 41,516 Restricted for working cash 12,500,000 12,500,000 Unrestricted 16,939,126 15,119,971 Total net position $ 75,688,164 $ 71,892,697 See accompanying notes to financial statements. 4.

28 Statements of Revenues, Expenses and Changes in Net Position For the Years Ended June 30, 2016 and OPERATING REVENUES Student tuition and fees $ 17,061,918 $ 17,148,130 Less scholarship allowances (7,943,744) (7,917,049) Net student tuition and fees 9,118,174 9,231,081 Auxiliary enterprise revenue 4,641,674 5,309,500 Facilities revenue 37,910 32,407 Other operating revenue 816, ,469 Total operating revenues 14,614,609 15,037,457 OPERATING EXPENSES Instruction 26,076,866 25,232,974 Academic support 5,488,741 5,831,264 Student services 9,118,470 10,505,968 Public services 1,918,769 2,232,163 Auxiliary services 1,123,937 1,234,116 Institutional support 11,918,894 13,525,404 Operation and maintenance of plant 6,428,174 5,280,904 Tuition chargebacks 38, ,561 Auxiliary enterprise 5,530,814 6,637,031 Depreciation 3,704,801 3,440,925 Total operating expenses 71,347,621 74,723,310 OPERATING INCOME (LOSS) (56,733,012) (59,685,853) NON-OPERATING REVENUES (EXPENSES) Property taxes and corporate personal property replacement taxes 30,320,012 28,872,512 State grants and contracts 16,248,091 17,970,234 Federal grants and contracts 15,155,953 17,430,965 Investment earnings 270, ,161 Interest expense (1,447,676) (1,499,451) Loss on disposal of assets (18,694) (4,131) Total non-operating revenues 60,528,479 63,022,290 Income before capital contributions 3,795,467 3,336,437 Capital contributions - 355,275 CHANGE IN NET POSITION 3,795,467 3,691,712 NET POSITION - BEGINNING OF YEAR 71,892,697 68,200,985 NET POSITION - END OF YEAR $ 75,688,164 $ 71,892,697 See accompanying notes to financial statements 5.

29 Statements of Cash Flows For the Years Ended June 30, 2016 and CASH FLOWS FROM OPERATING ACTIVITIES Tuition and fees $ 7,851,829 $ 9,398,992 Payments to employees (25,867,006) (28,516,081) Payments to suppliers (26,875,061) (30,054,376) Auxiliary enterprise charges 4,641,674 5,309,500 Other receipts 1,000, ,460 Net cash from operating activities (39,247,905) (43,371,505) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES State grants and contracts 1,855,818 5,981,708 Federal grants and contracts 14,882,248 17,939,996 Property taxes and corporate personal property replacement taxes 30,167,042 28,973,179 Net cash from non-capital financing activities 46,905,108 52,894,883 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets (2,345,695) (3,348,363) Principal paid on bonds, contracts and leases (1,665,754) (1,542,575) Interest paid on bonds, contracts and leases (1,263,377) (1,514,639) Net cash from capital and related financing activities (5,274,826) (6,405,577) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 270, ,161 Net cash from investing activities 270, ,161 NET INCREASE IN CASH AND CASH EQUIVALENTS 2,653,170 3,369,962 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 35,947,866 32,577,904 CASH AND CASH EQUIVALENTS - END OF YEAR $ 38,601,036 $ 35,947,866 See accompanying notes to financial statements. 6.

30 Statements of Cash Flows For the Years Ended June 30, 2016 and RECONCILIATION OF OPERATING LOSS TO NET CASH FROM OPERATING ACTIVITIES Operating loss $ (56,733,012) $ (59,685,853) Adjustments to reconcile operating loss to net cash from operating activities: Depreciation 3,704,801 3,440,925 On-behalf SURS expensed by State 14,261,227 12,321,570 Changes in assets and liabilities: (Increase) decrease in receivables (50,700) (22,963) (Increase) decrease in inventories 72,753 (2,003) (Increase) decrease in prepaids (1,017) 93,327 Increase (decrease) in accounts payable (567,002) 546,699 Increase (decrease) in accrued expenditures 89,445 96,935 Increase (decrease) in other liabilities (18,080) (358,960) Increase (decrease) in unearned revenue (325,489) 184,458 Increase (decrease) in compensated absences (13,894) 14,360 NET CASH FROM OPERATING ACTIVITIES $ (39,580,968) $ (43,371,505) Schedule of non-cash items: Contributed capital assets $ - $ 355,275 On-behalf SURS expensed by State 14,261,227 12,321,570 Bond refunding through an escrow 9,661,069 - Refinanced capital lease/loan 1,101,510 - See accompanying notes to financial statements. 7.

31 FOUNDATION Statements of Financial Position June 30, 2016 and CURRENT ASSETS Cash and cash equivalents $ 123,608 $ 318,058 Accrued interest 1,654 - Receivables: Contributions 221, ,571 Other 8,889 29,700 Investments 6,962,233 6,496,415 Net investment in capital lease 1,101,510 1,294,655 Equipment, net 14,001 - Land held for investment 2,604,680 2,800,730 TOTAL ASSETS $ 11,038,085 $ 11,237,129 LIABILITIES AND NET ASSETS Liabilities: Grants payable $ 37,493 $ 34,512 Scholarships payable 187, ,544 Accounts payable 179, ,445 Interest payable 4,559 26,210 Long-term debt 1,101,510 1,294,655 Total liabilities 1,510,524 1,741,366 Net assets: Unrestricted Land held for investment 2,473,177 2,659,330 Other (802,365) (694,835) Total unrestricted 1,670,812 1,964,495 Temporarily restricted 2,048,061 1,992,656 Permanently restricted 5,808,688 5,538,612 Total net assets 9,527,561 9,495,763 TOTAL LIABILITIES AND NET ASSETS $ 11,038,085 $ 11,237,129 See accompanying notes to financial statements. 8.

32 FOUNDATION Statement of Activities For the Year Ended June 30, 2016 Temporarily Permanently Unrestricted Restricted Restricted Total REVENUES AND GAINS Contributions, net of allowance $ 24,564 $ 1,350,040 $ 257,076 $ 1,631,680 In-kind contributions 281,264 28, ,516 Interest from capital lease 66, ,941 Investment income 2, , ,123 Special event 102, ,841 Grant - 45,000 45,000 Loss on investment land (186,153) (9,897) - (196,050) Rent 43, ,141 Other revenues and gains 5, ,956 Total revenues and gains 341,362 1,531, ,076 2,130,148 Net assets reclassified - (13,000) 13,000 - Net assets released from restrictions 1,463,305 (1,463,305) - - 1,804,667 55, ,076 2,130,148 EXPENSES Program services Scholarships and other assistance 1,557, ,557,280 Supporting activities Management and general 296, ,028 Fundraising 245, ,042 Total expenses 2,098, ,098,350 CHANGE IN NET ASSETS (293,683) 55, ,076 31,798 NET ASSETS - BEGINNING OF YEAR 1,964,495 1,992,656 5,538,612 9,495,763 NET ASSETS - END OF YEAR $ 1,670,812 $ 2,048,061 $ 5,808,688 $ 9,527,561 See accompanying notes to financial statements. 9.

33 FOUNDATION Statement of Activities For the Year Ended June 30, 2015 Temporarily Permanently Unrestricted Restricted Restricted Total REVENUES AND GAINS Contributions, net of allowance $ 31,959 $ 503,479 $ 2,165,125 $ 2,700,563 In-kind contributions 274,564 71, ,290 Interest from capital lease 84, ,400 Investment income 27, , ,508 Special event 95,402-9, ,202 Gain on land held for investment 26,330 1,400-27,730 Rent 43, ,140 Other revenues and gains 3, ,169 Total revenues and gains 586, ,524 2,174,925 3,477,002 Net assets reclassified - (97,682) 97,682 - Net assets released from restrictions 529,672 (529,672) - - 1,116,225 88,170 2,272,607 3,477,002 EXPENSES Program services Scholarships and other assistance 590, ,819 Supporting activities Management and general 297, ,266 Fundraising 281, ,877 Total expenses 1,169, ,169,962 CHANGE IN NET ASSETS (53,737) 88,170 2,272,607 2,307,040 NET ASSETS - BEGINNING OF YEAR 2,018,232 1,904,486 3,266,005 7,188,723 NET ASSETS - END OF YEAR $ 1,964,495 $ 1,992,656 $ 5,538,612 $ 9,495,763 See accompanying notes to financial statements 10.

34 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Lincoln Land Community College Community College District #526 (the College) have been prepared in conformity with accounting principles accepted in the United States of America, as applied to government units (hereinafter referred to as generally accepted accounting principles (GAAP)). The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting principles. In addition, the College presents its financial statements in accordance with accounting practices prescribed or permitted by the Illinois Community College Board (ICCB). The following is a summary of the more significant policies of the College. Organization: The College is an Illinois community college operating under the mandates and guidelines of the Illinois Board of Higher Education and the Illinois Community College Board (ICCB). The College includes all or portions of 15 counties in central Illinois, including: Bond, Cass, Christian, DeWitt, Fayette, Greene, Logan, Macon, Macoupin, Mason, Menard, Montgomery, Morgan, Sangamon and Scott. The College provides academic classes to students in the area as well as community education classes in some outlaying communities. Reporting Entity: The College is governed by an elected seven member Board of Trustees and a student representative. The College is fiscally independent and is considered a primary government pursuant to GASB Statement No. 61. For financial reporting purposes, the College has included all funds, organizations, agencies, boards, commissions, and authorities for which the College is financially accountable. Under the criteria specified in Statement No. 39, Determining Whether Certain Organizations are Component Units, the College has included the Lincoln Land Community College Foundation (Foundation) as a discretely presented component unit. The primary criterion for including a potential component unit within the reporting entity under GASB Statement No. 39 is the financial accountability that the elected officials of the primary government have for the component unit. The criteria used in assessing financial accountability consist of (1) the primary government is financially accountable if it appoints a voting majority of the organization s governing body, and (a) it is able to impose its will on that organization, or (b) there is a potential for the organization to provide specific financial benefits or impose specific financial burdens on the primary government; and (2) the primary government may be financially accountable if the organization is fiscally dependent. The Foundation is a legally separate, tax-exempt organization that exists for the principal purpose of aiding and assisting the College in achieving its educational research and service goals and responsibilities. The 15-member board of the Foundation is self-perpetuating and consists of graduates and friends of the College. Although the College does not control the timing or amount of receipts from the Foundation, the majority of resources, or income thereon, the Foundation holds and invests are restricted to the activities of the College by the donors. Because these 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 also reported on in separate financial statements because of the difference in its reporting model, as further described below. (Continued) 11.

35 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Foundation is a private not-for-profit organization that reports under Financial Accounting Standards Board (FASB) standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. No modifications have been made to the Foundation s financial information in the accompanying financial statements for these differences; however, significant footnote disclosures related to the Foundation s financial statements have been incorporated into the footnotes to the College s financial statements. Complete financial statements may be obtained by contacting the Foundation office. Measurement Focus and Basis of Accounting: For financial reporting purposes, the College is considered a special purpose government engaged only in business-type activities. Accordingly, the College s financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All intra-agency transactions have been eliminated. Non-exchange transactions, in which the College receives value without directly giving equal value in return, includes property taxes; federal, state, and local grants; state appropriations; and other contributions. On an accrual basis, revenue from property taxes is recognized in the period for which the levy is intended to finance. Revenue from grants, state appropriations, and other contributions is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted, matching requirements, in which the College must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the College on a reimbursement basis when qualifying expenses are incurred. The College reports unearned revenue on its statement of net position. Unearned revenues arise when potential revenue does not meet both the measurable and earned criteria for recognition in the current period. Unearned revenues also arise when resources are received by the College before it has a legal claim to them, as when grant monies are received prior to meeting all eligibility requirements. In subsequent periods, when both revenue recognition criteria are met, or when the College has met all eligibility requirements, the liability for unearned revenue is removed from the statement of net position and revenue is recognized. Tuition and fee revenues received and related to courses held after June 30, 2016 are unearned. Cash and Cash Equivalents: For purposes of reporting cash flows, the College considers all highly liquid investments purchased with a maturity of three months or less and Illinois Funds to be cash equivalents. The Illinois Funds is an external investment pool administered by the Illinois State Treasurer. The fair value of the College s investment in the fund is the same as the value of the pool shares. Restricted Assets: Restricted cash include cash restricted for specific purposes and unspent bond proceeds that can only be used for capital purposes. Investments: Investments consist of Illinois Funds, a pooled money market, and are carried at cost, which approximates fair value. Prepaid Expenses: Prepaid expenses represent payments for goods or services that benefit future periods. (Continued) 12.

36 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Inventories: Inventories are accounted for using the consumption method. Under the consumption method, inventories are recorded as expenses when removed from inventory. At year-end a formal count is completed to verify the ending balance. Inventories are reported at the lower of cost or market determined on the FIFO (first-in, first-out) basis. Allowance for Doubtful Accounts: Management has reviewed the collectability of its ordinary receivables and has deemed that all are collectible. However, the College has set up an allowance for doubtful accounts relative to the student tuition receivable accounts. Capital Assets: Capital assets, which include property, plant, equipment, and infrastructure assets (i.e., roads, bridges, curbs, gutters, sidewalks, and similar items), are reported at historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of assets or materially extend asset lives are not capitalized. Interest costs are capitalized while in development. The College incurred interest cost of $1,447,676 and $1,499,451 during fiscal year 2016 and 2015, respectively. Of the total interest expense $0 was capitalized during fiscal years 2016 and Capital assets are defined by the College as assets with estimated useful lives in excess of two years and initial individual costs in excess of $5,000. Depreciation is computed using the straight-line method over the following estimated useful lives: Years Buildings Building improvements Land improvements 20 Equipment 3-15 Technology 3-10 The College does not capitalize or depreciate its collection of library books. The collection is unencumbered, held for public education, protected, and preserved. Any proceeds from sale of library books is insignificant. Long-Term Obligations: Bond discounts and premiums are amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond discount and premium. Bond issuance costs are expensed as incurred. Net Position: Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources. Net Investment in Capital Assets This represents the College s total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to acquisition, construction, or improvement of those capital assets. Restricted Net Position Restricted net position includes resources that the College is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties. When both restricted and unrestricted resources are available for use, it is the College s policy to use restricted resources first, and then unrestricted resources when they are needed. None of the College s restricted net position is restricted as a result of the College s enabling legislation. (Continued) 13.

37 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Unrestricted Net Position Unrestricted net position represents resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and 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 governing board to meet current expenses for any purpose. Classification of Revenues and Expenses: Operating Revenue includes activities that have the characteristics of exchange transactions such as (1) student tuition and fees, and (2) sales and services of auxiliary enterprises, net of scholarship discounts and allowances. Non-operating revenue includes activities that have the characteristics of non-exchange transactions, such as (1) local property taxes, (2) state appropriations, (3) most federal, state and local grants and contracts, and federal appropriations, and (4) gifts and contributions. The College classifies all expenses as operating in the statement of revenues, expenses, and changes in net position, except for interest expense, which is classified as non-operating. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and deferred outflows of resources and liabilities and deferred inflows of resources at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Claims and Judgments: Liability resulting from claims and judgments, if any, is recorded as the liability is incurred. Accumulated Compensated Absences: The College calculates its employee benefit obligation at year end based on both a legal commitment and internal policy. Classified staff members, professional staff members and administrators are credited with 15 days of sick leave at the beginning of each fiscal year. Faculty members are credited with 13 sick leave days and the potential for two more days if they work during the summer. During the first year of employment, sick leave is prorated based on the time worked during the year. Accumulated leave is subject to a maximum of 360 days and can be taken in the event of illness or doctors appointments. Upon employee termination, the College has no commitment for accumulated sick leave; therefore, no liability is recorded. Certain employees who retire are given credit for unused sick leave toward years of service in the State Universities Retirement System. Classified staff members, professional staff members, administrators, and faculty members are credited with two personal days at the beginning of each fiscal year. Employees may accrue up to five personal days, but the College has made no commitment for payment at the time of departure. Classified staff members are entitled to ten vacation days per year until reaching five years of service at which point they earn one additional day per year to a maximum of 20 days annually. Professional staff members are entitled to 15 vacation days per year until reaching five years of service at which point they earn one additional day per year to a maximum of 20 days annually. Administrators are allowed to accumulate a maximum of 40 days. Faculty members are not entitled to vacation days. The estimated liabilities recorded include required salary or related payments as earned. (Continued) 14.

38 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 1 - 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 plan net position of the State Universities Retirement System (SURS or the System) and additions to or deductions from SURS plan net position has been determined on the same basis as they are reported by SURS. 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. For the purposes of financial reporting, the State of Illinois and participating employers are considered to be under a special funding situation. A special funding situation is defined as a circumstance in which a nonemployer entity is legally responsible for making contributions directly to a pension plan that is used to provide pensions to the employees of another entity or entities and either (1) the amount of the contributions for which the non-employer entity is legally responsible is not dependent upon one or more events unrelated to pensions or (2) the non-employer is the only entity with a legal obligation to make contributions directly to a pension plan. The State of Illinois is considered a non-employer contributing entity. Participating employers are considered employer contributing entities. Termination Benefits: In addition to any retirement benefits provided by the College described in Note 8, the College provides voluntary retirement benefits, considered early retirement incentives, to eligible faculty members. Faculty may select from two options. Option one is 1% times the years of College service times final base annual salary and 20% of final per diem rate times the number of unused sick days not to exceed 100. Option two is one, two, three or four year earnings program where the faculty are paid 104% of the previous year s annual base salary in equal installments over the course of the earnings program year. Deferred Outflows/Inflows of Resources: In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. NOTE 2 CASH, CASH EQUIVALENTS AND INVESTMENTS The following is a summary of the College s cash, cash equivalents and investments (including restricted cash and investments): Cash The carrying amount of cash was $35,521,330 at June 30, 2016, while the bank balances were $35,920,318. All account balances at banks were either insured by the Federal Deposit Insurance Corporation (FDIC) for $250,000 or collateralized with securities of the U.S. government. The carrying amount of cash was $35,154,087 at June 30, 2015, while the bank balances were $35,914,562. Investments The Illinois Funds is an external investment pool regulated by state statutes; the pool values participant s shares on a fair value basis. (Continued) 15.

39 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 2 - CASH, CASH EQUIVALENTS AND INVESTMENTS (Continued) The following schedule reports the values and maturities (using the segmented time distribution method) for the College s investments at June 30, Investment Maturities Less Than Investment Type Value One Year State Treasurer Illinois Funds $ 3,079,706 $ 3,079,706 Total $ 3,079,706 $ 3,079,706 The following schedule reports the values and maturities (using the segmented time distribution method) for the College s investments at June 30, Investment Maturities Less Than Investment Type Value One Year State Treasurer Illinois Funds $ 793,779 $ 793,779 Total $ 793,779 $ 793,779 Interest Rate Risk As a means of limiting its exposure to fair value losses arising from rising interest rates, the College s investment policy requires Board approval for any investment with a maturity over 30 days. Credit Risk The College does not specifically address credit risk but limits its exposure to credit risk, the risk that the issuer of a debt security will not pay its par value upon maturity, by requiring investments in United States Treasury Notes, the Illinois Funds, or the School District Liquid Asset Fund Plus. Credit ratings for the College s investments in debt securities as described by Standard & Poor s at June 30, 2016 and 2015 are as follows: Investment Type State Treasurer - Illinois Funds Credit Ratings AAAm (Continued) 16.

40 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 2 - CASH, CASH EQUIVALENTS AND INVESTMENTS (Continued) Concentration of Credit Risk Concentration of credit risk is the risk of loss resulting from the concentration of assets in a specific maturity, a specific issuer, or a specific class of securities. The College s investment policy does not specifically address concentration of credit risk. However, the College uses the prudent-person rule. Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserved capital and, in general, avoid speculative investments. The College does not invest in futures or options. Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to the investment, the College will not be able to recover the value of its investments that are in possession of an outside party. The College s investment policy does not specifically address custodial credit risk for investments. Illinois Funds are not subject to custodial credit risk. Illinois Funds totaling $3,079,706 are reported as cash and cash equivalents in the statements of net position for June 30, At June 30, 2015, this amount was $793,779. Reconciliation to Statements June 30, 2016 Cash and Investment Note Basic Financial Statements Carrying Amounts of Statement 1 - Cash and College s Cash $ 35,521,330 Cash Equivalents $ 38,352,378 College Investments 3,079,706 Statement 1 Restricted Cash 248,658 Total Cash and Investment per Note $ 38,601,036 $ 38,601,036 June 30, 2015 Cash and Investment Note Basic Financial Statements Carrying Amounts of Statement 1 - Cash and College s Cash $ 35,154,087 Cash Equivalents $ 35,738,205 College Investments 793,779 Statement 1 Restricted Cash 209,661 Total Cash and Investment per Note $ 35,947,866 $ 35,947,866 NOTE 3 PROPERTY TAXES The College s property taxes are levied each calendar year on all taxable real property located in the College s district. Taxes must be levied by the last Tuesday in December for the following levy year. The levy becomes an enforceable lien against the property as of the preceding January 1. These taxes become due and collectible in the following calendar year and are collected by the county collectors in the district who, in turn, remit to the College its respective share. Collection dates vary according to the schedules of the individual counties with disbursements to the College normally made within 30 days of collection. (Continued) 17.

41 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 3 PROPERTY TAXES (Continued) Property taxes are recognized as revenue in the year intended to finance, regardless of when collected. The second half of the 2015 tax levy is intended to finance the 2017 fiscal year and accordingly, is reported as deferred property taxes. The 2016 property taxes receivable represent the uncollected portion of the 2015 levy as of the fiscal year ended June 30, The 2016 tax levy has not been recorded as a receivable at June 30, 2016, as the tax attached as a lien on property as of January 1, 2016; however the tax will not be levied until December 2016 and, accordingly, is not measurable at June 30, The 2015 property tax receivable represents the uncollected portion of the 2014 levy as of the fiscal year ended June 30, An allowance, if necessary, is provided for uncollectible property taxes; however, no allowance was provided as of June 30, 2016, as the College s management believes that all property taxes receivable will be collected. Property taxes that are not intended for current year operations are shown as deferred property taxes. The amounts accrued from year to year will vary based upon the tax collections of the respective counties. The following are the tax rates permitted and the actual rates levied per $100 of assessed valuation. Maximum Levy Year Rate Education Building Tort Immunity Audit Bond and Interest Social Security Health and Safety NOTE 4 - LONG-TERM DEBT A summary of changes in long-term liabilities for the years ended June 30, 2016 and 2015 are as follows: Balance Balance Current July 1, 2015 Issuances Retirements June 30, 2016 Portion Capital lease payable $ 2,081,208 $ 1,101,510 $ 1,479,696 $ 1,703,022 $ 430,927 Notes payable 814, , , ,857 Bonds payable 30,395,000 9,710,000 10,445,000 29,660,000 2,750,000 Bond discount (273,233) - (94,866) (178,367) - Bond premium - 238,533 9, ,160 - Compensated absences 1,182,582 1,168,688 1,182,582 1,168, ,018 Total debt $ 34,199,843 $ 12,218,731 $ 13,193,214 $ 33,225,360 $ 4,646,802 (Continued) 18.

42 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 4 - LONG-TERM DEBT (Continued) Balance Balance Current July 1, 2014 Issuances Retirements June 30, 2015 Portion Capital lease payable $ 2,450,971 $ - $ 369,763 $ 2,081,208 $ 389,342 Notes payable 992, , , ,286 Bonds payable 31,390, ,000 30,395,000 1,105,000 Bond discount (288,091) - (14,858) (273,233) - Compensated absences 1,168,222 1,182,582 1,168,222 1,182, ,005 Total debt $ 35,713,201 $ 1,182,582 $ 2,695,940 $ 34,199,843 $ 3,168,633 Capital Leases Payable: Capital lease obligations represent various buildings with equal monthly payments and fixed interest rates ranging from 2.37% to 6.34%. Final maturity date is September 1, The obligations are secured by the buildings leased. The buildings are recorded as an asset of $5,483,808 and the total accumulated depreciation is $1,806,095, leaving a net book value of $3,677,713. Depreciation of the capitalized leases is recorded annually in depreciation expense. The capital leases will mature as follows: Year Ending Total Debt June 30 Principal Interest Service 2017 $ 430,927 $ 43,616 $ 474, ,426 34, , ,743 20, , ,108 7, , ,818 1, ,363 Total $ 1,703,022 $ 106,901 $ 1,809,923 Notes Payable: On January 24, 2013, the College entered into a note agreement to finance the Energy Conservation Project for $1,200,000. The note is due on demand, but if no demand is made, principal payments of $42,857 and interest payments at a rate of 1.85% are due quarterly. The final maturity date is January 24, General Obligation Bonds, Series 2008A: Original issue of $34,970,000 dated November 19, 2008, with increasing annual payments from $550,000 to $3,580,000 due December 15 of each year from 2009 through Interest rates range from 3.0% to 5.0%; interest paid semi-annually each June 15 th and December 15 th. The proceeds from the issuance were used to pay for improvement to the College s education facilities. This bond was partially refunded on February 16, 2016 with the issuance of the Series 2016 Bonds. Annual payments from $1,225,000 to $2,230,000 are due December 15 of each year from 2016 through Principal balance of these bonds at June 30, 2016 and 2015 is $19,950,000 and $30,395,000 respectively. Interest rates range from 4.0% to 5.0%; interest paid semi-annually each June 15 th and December 15 th. (Continued) 19.

43 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 4 - LONG-TERM DEBT (Continued) The 2008A issue will mature as follows: Year Ending Total Debt June 30 Principal Interest Service 2017 $ 1,225,000 $ 922,650 $ 2,147, ,350, ,150 2,221, ,485, ,737 2,295, ,635, ,538 2,375, ,800, ,250 2,463, ,575,000 2,255,125 8,830, ,880, ,500 6,347,500 Total $ 19,950,000 $ 6,730,950 $ 26,680,950 General Obligation Refunding Bonds, Series 2016: Original issue of $9,710,000 dated February 16, 2016, with annual payments from $1,525,000 to $430,000 due December 15 of each year from 2016 through Interest rates range from 2.0% to 3.0%; interest paid semi-annually each June 15 th and December 15 th.the proceeds from the issuance were used to refund a portion of the Series 2008A Bonds. The principal balance of the 2016 bonds at June 30, 2016 is $9,710,000. Net proceeds of $9,771,238 were deposited into an irrevocable trust with an escrow agent to provide for debt service payments on the 2008A bonds then outstanding are considered to be defeased and the related liability has been removed from the statement of net position. This reduced debt service payments by $2,822,992 and resulted in an economic gain (Difference between the present values of the debt service payments on the old and new debt) of $1,874,895. The defeased debt has a balance of $9,340,000 as of June 30, The difference between the reacquisition price and the net carrying amount of the bonds refunded by the 2016 series of $510,496 was deferred and is being amortized over the life of the 2016 bond. The deferred amount ending balance for the year ended June 30, 2016 was $490,436. Amortization of the deferred amount was $20,060 for the year ended June 30, (Continued) 20.

44 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 4 - LONG-TERM DEBT (Continued) The 2016 issue will mature as follows: Year Ending Total Debt June 30 Principal Interest Service 2017 $ 1,525,000 $ 201,000 $ 1,726, ,445, ,300 1,616, , , , , , , , , , ,340, ,625 4,871, ,760,000 70,050 1,830,050 Total $ 9,710,000 $ 1,422,025 $ 11,132,025 NOTE 5 - CAPITAL ASSETS A summary of changes in capital assets for the years ended June 30, 2016 and June 30, 2015 is as follows: Balance Balance July 1, 2015 Additions Deductions June 30, 2016 Capital assets not being depreciated: Land $ 514,354 $ - $ - $ 514,354 Construction in progress 668,221 1,943,424 2,120, ,845 Total capital assets not being depreciated 1,182,575 1,943,424 2,120,800 1,005,199 Capital assets being depreciated: Buildings 61,168, ,168,767 Building improvements 21,765,681 1,160,627-22,926,308 Land improvements 15,181, ,559-16,113,626 Technology 2,230, ,230,181 Equipment 8,562, , ,482 8,601,015 Total capital assets being depreciated 108,908,657 2,394, , ,039,897 Less accumulated depreciation: Buildings 18,200,980 1,227,872-19,428,852 Building improvements 6,442,255 1,183,595-7,625,850 Land improvements 10,396, ,979-10,834,338 Technology 1,778,912 69,746-1,848,658 Equipment 5,802, , ,788 6,343,609 Total accumulated depreciation 42,621,294 3,704, ,788 46,081,307 Total capital assets being depreciated, net 66,287,363 (1,310,079) 18,694 64,958,590 Total capital assets, net $ 67,469,938 $ 633,345 $ 2,139,494 $ 65,963,789 (Continued) 21.

45 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 5 - CAPITAL ASSETS (Continued) Balance Balance July 1, 2014 Additions Deductions June 30, 2015 Capital assets not being depreciated: Land $ 514,354 $ - $ - $ 514,354 Construction in progress 1,559,794 3,448,250 4,339, ,221 Total capital assets not being depreciated 2,074,148 3,448,250 4,339,823 1,182,575 Capital assets being depreciated: Buildings 61,172,767-4,000 61,168,767 Building improvements 19,183,749 2,581,932-21,765,681 Land improvements 13,423,176 1,757,891-15,181,067 Technology 2,230, ,230,181 Equipment 8,319, , ,725 8,562,961 Total capital assets being depreciated 104,329,822 4,723, , ,908,657 Less accumulated depreciation: Buildings 16,973,108 1,227,872-18,200,980 Building improvements 5,447, ,458-6,442,255 Land improvements 10,018, ,731-10,396,359 Technology 1,709,166 69,746-1,778,912 Equipment 5,172, , ,594 5,802,788 Total accumulated depreciation 39,320,963 3,440, ,594 42,621,294 Total capital assets being depreciated, net 65,008,859 1,282,635 4,131 66,287,363 Total capital assets, net $ 67,083,007 $ 4,730,885 $ 4,343,954 $ 67,469,938 NOTE 7 - RISK MANAGEMENT Illinois Community College Risk Management Consortium: The College is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; natural disasters and workers compensation claims. Settled claims from these risks have not exceeded commercial insurance coverage for the past three fiscal years. Effective 1995, the College entered into a contractual agreement with the Illinois Community College Risk Management Consortium (the Consortium), which through its risk-sharing provisions, provides the College with its insurance coverage for liability, property damage, and worker s compensation insurance. As a selfinsurance administrator, the Consortium enables risk sharing with other community colleges. The Consortium has 12 member community colleges, all located in the state of Illinois. The main purpose of the Consortium is to jointly self-insure certain risks up to an agreed upon retention limit and to obtain excess catastrophe coverage and aggregate stop-loss reinsurance over the selected retention limit. Coverage includes all property, $30 million for liability, and workers compensation. Premiums are recognized as revenue over the terms of the policies on an annual basis. The Board of Directors, at its discretion, may authorize a credit to members for future premium payments to the Consortium in the form of dividends. Losses and loss adjustment expenses incurred equal net losses and loss adjustment expenses paid during the year plus (minus) the increase (decrease) in the liability for unpaid losses and loss adjustment expenses. (Continued) 22.

46 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 7 - RISK MANAGEMENT (Continued) The liability for unpaid losses and loss adjustment expenses represents an estimate of the ultimate net cost of all losses and loss adjustment expenses incurred but not yet paid as of the fiscal year ended. This includes estimates of losses, which have occurred but have not yet been reported to the Consortium. These estimates are based upon the historical experience of the Consortium as well as industry data and experience and the effects of inflation and other societal and economic factors. The methods used in making estimates and establishing the liability for unpaid losses and loss adjustment expenses are continually reviewed and updated. The Consortium requests initial payments to substantially cover any losses to be incurred for that policy year; any losses in excess of premiums are the liability of the Consortium. However, the College anticipates no future liabilities for incurred losses. The College s level of coverage has not changed for the past year. The College continues to carry commercial insurance for directors and officers liability and for sports accidents. During fiscal year 1991, the College established the Employee Benefit Fund (Fund), an internal service fund, to account for and finance its uninsured risks of loss related to employee healthcare costs. Under this program, the Fund provides coverage of the College s employee health and accident insurance to $90,000 per occurrence of eligible expenses covered. Additionally, the College purchases commercial insurance for claims in excess of coverage provided by the Fund. As of June 30, 2016 and 2015, claims have not exceeded the commercial insurance coverage limit for the past three fiscal plan years. The claims liability reported in the Fund at June 30, 2016 and 2015 is based on the requirements of Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonable estimated. Claims liability includes all known claims and an amount for estimated claims that have been incurred but not reported (IBNR). Changes in the claims liability as of June 30, 2016 and 2015 were as follows: Fiscal Year 2016 Fiscal Year 2015 Fiscal Year 2014 Claims payable, beginning of year $ 175,000 $ 275,000 $ 400,000 Claims incurred 2,744,138 2,864,714 3,290,729 Claim payments (2,719,138) (2,964,714) (3,415,729) Claims payable, end of year $ 200,000 $ 175,000 $ 275,000 NOTE 8 COMMITMENTS Federal and State Grants: The College has received a number of federal and state grants for specific purposes, which are subject to review and audit by grantor agencies. Such audits may result in requests for reimbursement to granting agencies for expenditures disallowed under the terms of the grants. Based on prior experience, College management believes that such disallowances, if any, will not be material. (Continued) 23.

47 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 8 COMMITMENTS (Continued) Construction Commitments: The College has several construction contract commitments in progress at June 30, 2016 as follows: AHU Motor Replacements $ 19,763 Arc Flash Study 4,113 CDC Septic System Replacement 4,157 Chiller Replacement at Sangamon Hall 500,580 HVAC Replacement Litchfield Resource Center 337,570 Upgrade Colling & UPS System in IT Data Room 11,000 Main Campus Parking Lot Resurface /Restriping 287,569 Trucker Driver Lot Rehabilitation 19,650 NOTE 9 DEFINED BENEFIT PENSION PLAN General Information about the Pension Plan Plan Description: The College contributes to the State Universities Retirement System of Illinois (SURS), a cost sharing multiple-employer defined benefit pension plan with a special funding situation whereby the State of Illinois (the State) makes substantially all actuarially determined required contributions on behalf of the participating employers. SURS was established July 21, 1941 to provide retirement annuities and other benefits for staff members and employees of the state universities, certain affiliated organizations, and certain other state educational and scientific agencies and for survivors, dependents, and other beneficiaries of such employees. SURS is considered a component unit of the State of Illinois financial reporting entity and is included in the state s financial reports as a pension trust fund. SURS is governed by Section 5/15, Chapter 40, of the Illinois Compiled Statutes. SURS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by accessing the website at Benefits Provided: A traditional benefit plan was established in Public Act enacted effective January 1, 1998, established an alternative defined benefit program known as the portable benefit package. The traditional and portable plan Tier 1 refers to members who began participation prior to January 1, Public Act revised the traditional and portable benefit plans for members who begin participation on or after January 1, 2011, and who do not have other eligible Illinois reciprocal system services. The revised plan is referred to as Tier 2. New employees are allowed six months after their date of hire to make an irrevocable election. A summary of the benefit provisions can be found in the System s comprehensive annual financial report (CAFR) notes to the financial statements. (Continued) 24.

48 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 9 DEFINED BENEFIT PENSION PLAN (Continued) Contributions: The State of Illinois is primarily responsible for funding the System on behalf of the individual employers at an actuarially determined amount. Public Act provides a Statutory Funding Plan consisting of two parts: (i) a ramp-up period from 1996 to 2010 and (ii) a period of contributions equal to a level percentage of the payroll of active members of the System to reach 90% of the total actuarial accrued liability by the end of fiscal year Employer contributions from trust, federal, and other funds are provided under Section (b) of the Illinois Pension Code and require employers to pay contributions which are sufficient to cover the accruing normal costs on behalf of applicable employees. The employer normal cost for fiscal year 2016 and 2015, respectively, was 12.69% and 11.71% of employee payroll. The normal cost is equal to the value of current year s pension benefit and does not include any allocation for the past unfunded liability or interest on the unfunded liability. Plan members are required to contribute 8.00% of their annual covered salary. The contribution requirements of plan members and employers are established and may be amended by the Illinois General Assembly. Participating employers make contributions toward separately financed specific liabilities under Section (e) of the Illinois Pension Code (relating to contributions payable due to the employment of affected annuitants or specific return to work annuitants) and Section (g) (relating to contributions payable due to earning increases exceeding 6% during the final rate of earnings period). Pension Liabilities, Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Net Pension Liability: SURS reported a net pension liability (NPL) of $23,756,361,087 and $21,790,983,139 at June 30, 2015 and 2014, respectively. The net pension liability was based on an actuarial valuation as of June 30, 2014 and 2013, respectively. Employer Proportionate Share of Net Pension Liability: The amount of the proportionate share of the net pension liability to be recognized for the College is $0 at June 30, 2016 and The proportionate share of the State s net pension liability associated with the College is $169,857,137 or.7150% and $162,693,393 or % at June 30, 2016 and 2015, respectively. This amount is not recognized in the financial statement due to the special funding situation. The June 30, 2016 net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined based on the June 30, 2014 actuarial valuation rolled forward. The basis of allocation used in the proportionate share of fiscal year 2016 net pension liability is the actual reported pensionable earning made to SURS during fiscal year The June 30, 2015 net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined based on the June 30, 2013 actuarial valuation rolled forward. The basis of allocation used in the proportionate share of fiscal year 2015 net pension liability is the actual reported pensionable earning made to SURS during fiscal year Pension Expense: At June 30, 2015 SURS reported a collective net pension expense of $1,994,587,170. At June 30, 2014 SURS reported a collective net pension expense of $1,650,338,263. (Continued) 25.

49 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 9 DEFINED BENEFIT PENSION PLAN (Continued) Employer Proportionate Share of Pension Expense: The College s proportionate share of collective net pension expense is recognized as on-behalf payments as both revenue and matching expense in the 2016 and 2015 financial statements. The basis of allocation used in the proportionate share of collective pension expense is the actual reported pensionable contributions made to SURS during fiscal year 2015 and As a result, the College recognized revenue and pension expense of $14,261,228 and $12,321,570 for the fiscal years ended June 30, 2016 and 2015, respectively. Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions: Deferred outflows of resources are the consumption of net position by the College that is applicable to future reporting periods. The College paid $52,498 and $41,516 in federal, trust or grant contributions for the fiscal years ended June 30, 2016 and 2015, respectively. These contributions were made subsequent to the pension liability measurement dates of June 30, 2015 and June 30, 2014 and are recognized as deferred outflows of resources as of June 30, 2016 and Assumptions and Other Inputs Actuarial Assumptions: The actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period June 30, The actuarial assumption used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period June 30, and an economic study completed June The total pension liabilities in the June 30, 2014 and 2013 actuarial valuations were determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.75% Salary increases 3.75% to 12.00%, including inflation Investment rate of return 7.25% beginning with the actuarial valuation as of June 30, 2013 Mortality rates were based on the RP2000 Combined Mortality Table, projected with Scale AA to 2017, sexdistinct, with rates multiplied by 0.80 for males and 0.85 for females. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return were adopted by the plan s trustees after considering input from the plan s investment consultant(s) and actuary(s). (Continued) 26.

50 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 9 DEFINED BENEFIT PENSION PLAN (Continued) For each major asset class that is included in the pension plan s target asset allocation as of June 30, 2015 and 2014, these best estimates are summarized in the following table: June 30, 2015 June 30, 2014 Long-Term Long-Term Expected Expected Target Real Rate of Target Real Rate of Asset Class Allocation Return Allocation Return U.S. Equity 23% 5.77% 31% 7.65% Private Equity 6% 9.23% 6% 8.65% Non-U.S. Equity 19% 6.69% 21% 7.85% Global Equity 8% 6.51% 8% 7.90% Fixed Income 19% 1.12% 19% 2.50% Treasury-Inflation Protected Securities 4% 1.22% 4% 2.30% Emerging Market Debt 3% 5% 0% 0% Real Estate REITS 4% 5.85% 4% 6.20% Direct Real Estate 6% 4.37% 6% 6.20% Commodities 2% 4% 0% 0% Hedged Strategies 5% 4% 0% 0% Opportunity Fund 1% 6.80% 1% 2.50% Total 100% 5.02% 100% 5.00% Inflation 3.00% 2.75% Expected Geometrical Normal Return 8.02% 7.75% Discount Rate: A single discount rate of 7.120%, which is an increase of 0.030% from the prior year rate of 7.090% was used to measure the total pension liability at June 30, 2016 and 2015, respectively. For fiscal year 2016, this single discount rate was based on an expected rate of return on pension plan investments of 7.250% and a municipal bond rate of 3.80% (based on the weekly rate closest to but not later than the measurement date of the 20-Year Bond Buyer Index as published by the Federal Reserve). For fiscal year 2015, this single discount rate was based on an expected rate of return on pension plan investments of 7.250% and a municipal bond rate of 4.290%. The projection of cash flows used to determine this single discount rate were the amounts of contributions attributable to current plan members and assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the statutory contribution rates under the System s funding policy. Based on these assumptions, the pension plan s fiduciary net position and future contributions were sufficient to finance the benefit payments through the year 2072 and 2065 at June 30, 2015 and 2014, respectively. As a result, the long-term expected rate of return on pension plan investments was applied to projected benefit payments through the year 2072 and 2065 at June 30, 2015 and 2014, respectively, and the municipal bond rate was applied to all benefit payments after that date. Sensitivity of the System s Net Pension Liability to Changes in the Discount Rate: Regarding the sensitivity of the net pension liability to changes in the single discount rate, the following presents the plan s net pension liability, calculated using a single discount rate of 7.12% for June 30, 2015 and 7.09% at June 30, 2014, as well as what the plan s net pension liability would be if it were calculated using a single discount rate that is 1% lower or higher: (Continued) 27.

51 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 9 DEFINED BENEFIT PENSION PLAN (Continued) Current Single Discount 1% Decrease Rate Assumption 1% Increase 6.12% 7.12% 8.12% June 30, 2016 $ 28,929,333,917 $ 23,756,361,087 $ 19,470,982, % 7.09% 8.09% June 30, 2015 $ 26,583,701,134 $ 21,790,983,139 $ 17,796,570,836 Additional information regarding the SURS basic financial statements including the plan net position can be found in the SURS comprehensive annual financial report by accessing the website at NOTE 10 RETIREE HEALTH PLAN Plan Description: In addition to the pension plan described previously, the College contributes to the State of Illinois Community College Health Insurance Security Fund (CHIP), a cost-sharing multiple-employer defined benefit postemployment healthcare plan administered by the State of Illinois. CHIP provides health, vision and dental benefits to retired staff and dependent beneficiaries of participating community colleges. The benefits, employer, employee, retiree and state contributions are dictated by Illinois Compiled Statutes (ILCS) through the State Group Insurance Act of 1971 (Act) and can only be changed by the Illinois General Assembly. Separate financial statements, including supplementary information, may be obtained from the Department of Healthcare and Family Services, 201 South Grand Avenue East, Springfield, Illinois Funding Policy: The Act requires every active contributor (employee) of SURS to contribute.5% of covered payroll and every community college district to contribute.5% of covered payroll. Retirees pay a premium for coverage that is also determined by ILCS. The State Pension Funds Continuing Appropriation Act (40/ILCA 15/1.4) requires the State of Illinois to make an annual appropriation to the CHIP to cover any expected expenditures in excess of the contributions by active employees, employers and retirees. The result is a pay as you go financing of the plan. The State contribution to the CHIP plan is reported as an on-behalf payment in accordance with GASB Statement No. 24, Accounting and Financial Reporting for Certain Grants and Other Financial Assistance. Employer contributions for the current year and preceding three years are as follows: College's Contribution as a Years Percentage of Ended Required June 30, Contribution College State % $ 135,993 $ 134, % 139, , % 135, , % 137, ,760 (Continued) 28.

52 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 11 COMPONENT UNIT SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies applicable to Lincoln Land Community College Foundation, a discretely presented component unit, are as follows: Basis of Accounting: The financial statements of the Foundation have been prepared on the accrual basis of accounting. Revenues are recognized when earned; support, when an unconditional promise to give is received; and expenses, when incurred. Basis of Financial Statement Presentation: The Foundation reports net assets and support following accounting principles generally accepted in the United States of America (U.S. GAAP) for not-for-profit organizations, which require classification based on the existence or absence of donor-imposed restrictions as follow: Unrestricted net assets are not subject to donor-imposed stipulations. These include internally designated funds, since such designations may be reserved at any time. Temporarily restricted net assets are subject to donor-imposed stipulations that may or will be met either by occurrence of an event or passage of time. Permanently restricted net assets are subject to donor-imposed stipulations that they be maintained in perpetuity and that income earned on any related investments may be used for general or specific purposes, based on donor stipulations. Cash and Cash Equivalents: For purposes of the statement of cash flows, the Foundation considers cash on hand and on demand deposit accounts to be cash. Cash and cash equivalents in brokerage accounts are reported as components of investments. As of June 30, 2016 and 2015, the carrying amount of the Foundation s deposits totaled $123,608 and $318,058, respectively. Actual bank balances were covered by federal depository insurance. Contributions and Promises to Give: Contributions and unconditional promises to give (contributions receivable) are reported as support when received. Conditional promises to give are reported as support when the conditions for recognition are substantially met. Restricted contributions, whose restrictions are met in the year received, are reported as unrestricted support. Contributions that are receivable in less than one year are reported at their realizable amount, net of an estimate of uncollectible amounts. Contributions receivable in subsequent years are reported at the realizable amount, discounted to present value using the Wall Street Journal prime rate. Investments: Investments are carried at fair value. Realized and unrealized gains and losses are included in the statement of activities. The Foundation follows the practice of widely diversifying its investments to mitigate concentrations of credit risk with respect to investments held in brokerage accounts. Fair Value of Financial Instruments: Accounting principles generally accepted in the United States of America define fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Management determines fair value based on assumptions market participants would use, including consideration of non-performance risk. Realized and unrealized gains and losses are reported in the statement of activities. (Continued) 29.

53 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 11 COMPONENT UNIT SIGNIFICANT ACCOUNTING POLICIES (Continued) The Foundation reports fair value of financial instruments using a three-level hierarchy, based on the extent to which inputs used in measuring fair value are observable in the market on the measurement date, as follows: Level 1 Inputs are unadjusted quoted prices for identical assets in active markets. Level 2 Inputs are observable quoted prices for similar assets in active markets. Level 3 Inputs are unobservable and reflect management s best estimate of what market participants would use as fair value. Fair value of the Foundation s investments, determined using in puts as described above were as follows at June 30: 2016 Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 474,565 $ 474,565 $ - $ - Certificates of deposit 702, , Fixed income securities 1,764,059 1,764, Domestic equities 2,831,755 2,831, International equities 713, , Hard assets 475, ,196 - Total in brokerage accounts 6,962,233 6,487, ,196 - Investment land 2,604, ,604,680 Total $ 9,566,913 $ 6,487,037 $ 475,196 $ 2,604, Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,299,996 $ 1,299,996 $ - $ - Fixed income securities 1,584,342 1,584, Domestic equities 2,720,001 2,720, International equities 637, , Hard assets 254, ,271 - Total in brokerage accounts 6,496,415 6,242, ,271 - Investment land 2,800, ,800,730 Total $ 9,297,145 $ 6,242,144 $ 254,271 $ 2,800,730 (Continued) 30.

54 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 11 COMPONENT UNIT SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets: The Foundation capitalizes assets with individual costs of $1,000 or more and useful lives of more than one year. Capital assets consist of equipment and software, which are reported at cost, or fair value if contributed, less depreciation and amortization on a straight line basis over the useful lives of the assets, which range from three to seven years. The Foundation entered into a lease agreement with the College for the Montgomery Hall Building, charging rent equal to the payments on the long-term debt described in Note G of the Foundation Notes to the Financial Statements. Ownership of the Building will be transferred to the College at the end of lease. This agreement is reflected herein with a Net Investment in Capital Lease asset, reported at net present value of lease payments receivable. Lease payments receivable were as follows at June 30, 2016: Pricipal Interest Total 2017 $ 237,942 $ 20,784 $ 258, ,434 19, , ,209 13, , ,107 7, , ,818 1, ,363 $ 1,101,510 $ 62,757 $ 1,164,267 Long-Term Obligations: Bonds and mortgages payable are reported net of the applicable bond discount and premium. Bond issuance costs are expensed as incurred. On September 15, 2000, the Foundation issued $3,150,000 of Sangamon County, Illinois Economic Development Revenue Bonds for the construction of Montgomery Hall which is subject to a lease agreement with the College described in Capital Assets section above. Interest on the bonds was 6.14% through September 2015, and 6.34% thereafter. In April 2016, the bonds were retired with the proceeds of a mortgage loan in the principal amount of $1,101,510 and a fixed interest rate of 2.365%, with semi-annual payments due in March and September through Interest expense on this long-term debt totaled $66,941 and $84,400 for the years ended June 30, 2016 and 2015, respectively. Aggregate principal maturities of the long-term debt at June 30, 2016 were as follows: Principal 2017 $ 237, , , , ,818 $ 1,101,510 (Continued) 31.

55 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 11 COMPONENT UNIT SIGNIFICANT ACCOUNTING POLICIES (Continued) Endowment Funds: The Foundation interprets laws pertaining to donor-restricted endowment gifts received as creating permanently restricted net assets to be held in perpetuity. The income is expendable for student scholarships or grants to college departments or teachers at various College campuses, as stipulated by the donor or for other needs if no stipulation is made. The Foundation policies prescribe the following for ensuring proper appropriation and expenditure of endowment funds. A permanently restricted account is maintained for each endowment gift with a unique donor stipulated purpose. A temporarily restricted account is maintained that corresponds to each endowment to accumulate investment earnings, realized gains and losses, and amounts expended. The Foundation Executive Director approves all expenditures charged to endowment fund temporarily restricted accounts, to ensure amounts are expended as stipulated. The Foundation s investment policies include objectives to achieve a maximum total return and provide for current income requirements while assuming a prudent degree of risk exposure. Specific investment guidelines are determined by the finance committee and reviewed and approved by the board. No specific return objectives are set; however, guidelines for percentages of assets to be invested in several classes of investments are established, and changes in investment allocations are made only after consultation with the Foundation s professional investment advisor and approval by the finance committee. These investment policies are intended to help attain the goals of the Foundation to provide scholarships and grants at levels consistent with prior years, increasing the growth of the college, but subject to the Foundation s ability to maintain adequate reserves. Use of Estimates: Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from these estimates. Income Taxes: The Foundation is organized as a not-for-profit organization and is exempt from Federal Income taxes under section 501(a) of the Internal Revenue Code, as an organization described in section 501(c)(3), and has been determined not to be a private foundation. The Foundation follows accounting principles generally accepted in the United States of America related to the accounting for uncertainty in income taxes, which sets a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management evaluated tax positions for the open tax years at June 30, 2016 and determined no provision for uncertain tax positions was required. Contributed Services: Contributed services are recognized if they (a) create or enhance nonfinancial assets or (b) require specialized skills, are provided by individuals with those skills, and would typically need to be purchased if not donated. Expense Allocation: The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among those programs and supporting services benefited. (Continued) 32.

56 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 11 COMPONENT UNIT SIGNIFICANT ACCOUNTING POLICIES (Continued) Land Held for Investment: In 1976 land consisting of five parcels totaling acres near the College s main campus was contributed to the Foundation without restriction. In 1997, land consisting of two parcels totaling acres near Petersburg, Illinois was contributed to the Foundation with the stipulation that it be held for use by the College for a satellite campus. Both properties are reported herein as land held for investment, with the Petersburg land also included as a component of temporarily restricted net assets. Land held for investment and gains for fair value changes are reflected in the accompanying financial statements as follows: Temporarily Unrestricted Restricted Total Fair value at June 30, 2014 $ 2,633,000 $ 140,000 $ 2,773,000 Gains reported for ,330 1,400 27,730 Fair value at June 30, ,659, ,400 2,800,730 Losses reported for 2016 (186,153) (9,897) (196,050) Fair value at June 30, 2016 $ 2,473,177 $ 131,503 $ 2,604,680 NOTE 12 NEW ACCOUNTING PRONOUNCEMENTS In June 2015, the GASB issued Statement 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. Statement 74 addresses the financial reports of defined benefit OPEB plans that are administered through trusts that meet specified criteria. The Statement follows the framework for financial reporting of defined benefit OPEB plans in Statement 45 by requiring a statement of fiduciary net position and a statement of changes in fiduciary net position. The Statement requires more extensive note disclosures and RSI related to the measurement of the OPEB liabilities for which assets have been accumulated, including information about the annual money-weighted rates of return on plan investments. Statement 74 also sets forth note disclosure requirements for defined contribution OPEB plans. This Statement is effective for the College s fiscal year ended June 30, Management has not determined what impact, if any, this statement will have on its financial statements. In June 2015, the GASB issued Statement 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. This Statement replaces the requirements of Statement 45 and requires governments to report a liability on the face of the financial statements for the OPEB that they provide. Statement 75 requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about their OPEB liabilities. Among the new note disclosures is a description of the effect on the reported OPEB liability of using a discount rate and a healthcare cost trend rate that are one percentage point higher and one percentage point lower than assumed by the government. The new RSI includes a schedule showing the causes of increases and decreases in the OPEB liability and a schedule comparing a government s actual OPEB contributions to its contribution requirements. This Statement is effective for the College s fiscal year ended June 30, Management has not determined what impact, if any, this statement will have on its financial statements. (Continued) 33.

57 NOTES TO FINANCIAL STATEMENTS June 30, 2016 and 2015 NOTE 12 NEW ACCOUNTING PRONOUNCEMENTS (Continued) In August 2015, the GASB issued Statement 77, Tax Abatement Disclosures. This Statement is intended to improve financial reporting by requiring disclosure of tax abatement information about a reporting government s own tax abatement agreements and those that are entered into by other governments and that reduce the reporting government s tax revenues. This Statement is effective for the College s fiscal year ended June 30, Management has not determined what impact, if any, this statement will have on its financial statements. In December 2015, the GASB issued Statement 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans. This Statement amends the scope and applicability of Statement 68 to exclude pensions provided to employees of state or local governmental employers through a cost-sharing multiple-employer defined benefit pension plan that is not a state or local governmental pension plan, is used to provide defined benefit pensions both to employees of state or local governmental employers and to employees of employers that are not state or local governmental employers, and has no predominant state or local governmental employer. This Statement is effective for the College s fiscal year ended June 30, Management has not determined what impact, if any, this statement will have on its financial statements. In January 2016, the GASB issued Statement 80, Blending Requirements for Certain Component Units An Amendment of GASB Statement No. 14. This Statement amends the blending requirements for the financial statement presentation of component units of all state and local governments. This Statement is effective for the College s fiscal year ended June 30, Management has not determined what impact, if any, this statement will have on its financial statements. In March 2016, the GASB issued Statement 81, Irrevocable Split-Interest Agreements. The objective of this Statement is to improve accounting and financial reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. This Statement requires that a government that receives resources pursuant to an irrevocable split interest agreement recognize assets, liabilities, and deferred inflows of resources at the inception of the agreement. Furthermore, this Statement requires that a government recognize assets representing its beneficial interests in irrevocable split-interest agreements that are administered by a third party, if the government controls the present service capacity of the beneficial interests. This Statement requires that a government recognize revenue when the resources become applicable to the reporting period. This Statement is effective for the College s fiscal year ended June 30, Management has not determined what impact, if any, this statement will have on its financial statements. In March 2016, the GASB issued Statement 82, Pension Issues An Amendment of GASB Statements No. 67, No. 68, and No. 73. The objective of this Statement is to address certain issues that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and 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. Specifically, this Statement addresses issues regarding (1) the presentation of payrollrelated measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. This Statement is effective for the College s fiscal year ended June 30, Management has not determined what impact, if any, this statement will have on its financial statements. 34.

58 REQUIRED SUPPLEMENTARY INFORMATION

59 Lincoln Land Community College Community College District #526 Required Supplementary Information Year Ended June 30, a. Proportion percentage of the collective net pension liability 0.00% 0.00% b. Proportion amount of the collective net pension liability $ - $ - c. Portion of nonemployer contributing entities' total proportion of collective net pension liability associated with employer $ 169,857,137 $ 162,693,393 Total b + c $ 169,857,137 $ 162,693,393 Employer covered-employee payroll $ 30,357,466 $ 31,640,174 Proportion of collective net pension liability associated with employer as a percentage of covered-employee payroll % % SURS plan net position as a percentage of total pension liability % Federal, trust, grant and other contribution $ 52,498 $ 41,516 Contribution in relation to required contribution $ 52,498 $ 41,516 Contribution deficiency (excess) $ - $ - Employer covered-employee payroll $ 30,357,466 $ 31,640,174 Contributions as a percentage of covered-employee payroll 0.17% 0.13% Note: The System implemented GASB No. 68 in fiscal year The information above is presented for as many years as available. The Schedule is intended to show information for 10 years, when available. The amounts presented for each fiscal year were determined as of the year end that occurred one year prior. See accompanying Independent Auditor's Report. 35.

60 Lincoln Land Community College Community College District #526 Note to Required Supplementary Information Year Ended June 30, 2016 Changes of benefit terms: There were no benefit changes recognized in the Total Pension Liability as of June 30, Changes of assumptions: In accordance with Illinois Compiled Statutes, an actuarial review is to be performed at least once every three years to determine the reasonableness of actuarial assumptions regarding the retirement, disability, mortality, turnover, interest and salary of the members and benefit recipients of SURS. An experience review for the years June 30, 2010 to June 30, 2014 was performed in February 2015, resulting in the adoption of new assumptions as of June 30, Mortality rates: Change from the RP 2000 Mortality table projected to 2017, sex distinct, to the RP-2014 mortality tables with projected generational mortality improvement. Change to a separate mortality assumption for disabled participants Salary increase: Change assumption to service-based rates, ranging from 3.75 percent to percent based on years of service, with underlying wage inflation of 3.75 percent. Normal retirement rates: Change to retirement rates at ages younger than 60, age 66, and ages to reflect observed experiences. Early retirement rates: Change to a slight increase to the rates at ages 55 and 56. Turnover rates: Change to produce lower expected turnover for members with less than 10 years of service and higher turnover for members with more than 10 years of service than the currently assumed rates. Disability rates: Decrease rates and have separate rates for males and females to reflect observed experience. Dependent assumption: Main the current assumption on marital status that varies by age and sex and the assumption that males are three years older than their spouses. - Discount rate: Increase 0.030% from 7.090% to 7.120%. See accompanying Independent Auditor's Report. 36.

61 STATISTICAL SECTION

62 STATISTICAL SECTION This part of the College s comprehensive annual financial report presents the detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information displays about the College s overall financial health. Financial Trends These schedules contain trend information to help the reader understand how the College s financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the College s most significant local revenue source, property taxes. Debt Capacity These schedules present information to help the reader assess the affordability of the College s current levels of outstanding debt and the College s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the College s financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the College s financial report relates to the services the College provides and the activities it performs.

63 SPRINGFIELD, ILLINOIS NET POSITION BY COMPONENT Last Ten Fiscal Years Business-Type Activities Net investment in capital assets $ 34,221,597 $ 34,452,677 $ 32,837,561 $ 33,652,593 $ 35,314,982 $ 38,354,463 $ 19,358,379 $ 17,677,146 $ 26,127,093 $ 24,397,904 Restricted 24,527,441 22,320,049 22,335,072 19,906,870 17,843,399 14,053,395 2,978,016 2,169,810 1,749,624 1,311,176 Unrestricted 16,939,126 15,119,971 13,028,352 12,410,098 10,447,509 9,540,651 39,296,523 36,226,748 23,449,159 20,836,567 Total Business-Type Activities net position $ 75,688,164 $ 71,892,697 $ 68,200,985 $ 65,969,561 $ 63,605,890 $ 61,948,509 $ 61,632,918 $ 56,073,704 $ 51,325,876 $ 46,545,647 Note: Beginning in 2011, the District began reporting restricted net position which is primarily related to unspent property taxes Data Source: Audited Financial Statements 37.

64 SPRINGFIELD, ILLINOIS CHANGES IN NET POSITION Last Ten Fiscal Years Fiscal Year OPERATING REVENUES Student tuition and fees, net of allowances $ 9,118,174 $ 9,231,081 $ 9,384,917 $ 9,749,571 $ 8,946,818 Auxiliary enterprises revenue 4,641,674 5,309,500 5,030,536 5,288,624 5,214,154 Facilities revenue 37,910 32,407 31,276 19,547 15,131 Other operating revenue 816, , , , ,761 SURS contribution provided by state Total operating revenues 14,614,609 15,037,457 15,015,498 15,952,827 14,543,864 OPERATING EXPENSES Instruction 26,076,866 25,232,974 24,804,252 24,394,445 22,586,520 Academic support 5,488,741 5,831,264 5,668,024 5,857,675 5,385,852 Student services 9,118,470 10,505,968 10,634,392 10,468,298 11,669,788 Public services 1,918,769 2,232,163 2,305,251 2,224,523 1,890,808 Auxiliary services 1,123,937 1,234,116 1,067, , ,576 Institutional support 11,918,894 13,525,404 13,850,639 13,865,194 12,608,295 Operation and maintenance of plant 6,428,174 5,280,904 5,360,388 5,165,514 6,380,416 Tuition chargebacks 38, ,561 68,428 43,700 41,811 Auxiliary enterprises 5,530,814 6,637,031 6,115,386 6,268,041 6,030,131 Depreciation 3,704,801 3,440,925 3,295,514 3,187,886 2,506,335 SURS contribution paid by state Claims paid for external parties Total operating expenses 71,347,621 74,723,310 73,169,289 72,424,546 69,702,532 OPERATING INCOME (LOSS) (56,733,012) (59,685,853) (58,153,791) (56,471,719) (55,158,668) NONOPERATING REVENUES (EXPENSES) Property taxes 28,666,211 27,703,222 27,363,595 26,293,665 26,719,056 Corporate personal replacement taxes 1,653,801 1,169,290 1,117,136 1,065,939 State grants and contracts 16,248,091 17,970,234 16,032,161 15,749,962 13,456,496 Federal grants and contracts 15,155,953 17,430,965 16,851,503 16,647,270 17,293,599 Investment income 270, , , , ,239 Interest expense and fiscal charges (1,447,676) (1,499,451) (1,697,660) (1,649,756) (518,525) Other nonoperating revenues (expenses) - - (14,248) 656,943 (17,360) Gain/(loss) on disposal of capital assets (18,694) (4,131) (29,464) (20,329) (177,762) Contributions from Lincoln Land Community College Foundation Total nonoperating revenues (expenses) 60,528,479 63,022,290 59,846,909 58,918,116 56,918,743 INCOME (LOSS) BEFORE CONTRIBUTIONS 3,795,467 3,336,437 1,693,118 2,446,397 1,760,075 CAPITAL CONTRIBUTIONS - 355, CHANGE IN NET POSITION $ 3,795,467 $ 3,691,712 $ 1,693,118 $ 2,446,397 $ 1,760,075 Notes: (1) Increase in operating expenses and state grants and contracts for fiscal year 2004 is due to a one-time increase in State Universities Retirement System on-behalf payments of $9,500,000. (2) During fiscal year 2011, SURS contribution revenue was reported with state grants and contracts and SURS contribution expenses were allocated to the various expense functions Data Source: Audited Financial Statements 38.

65 $ 9,085,308 $ 12,915,166 $ 11,185,020 $ 10,539,307 $ 7,014,515 5,031,523 7,058,133 7,126,672 6,741,709 6,869,911 24,953 24,506 24,920 31,088 30, , , , , ,278-4,889,000 2,912,853 2,187,202 1,594,669 14,491,321 25,211,947 21,594,327 19,657,320 15,938,229 21,214,269 17,120,018 16,064,334 15,391,641 14,653,209 5,228,964 4,547,498 4,420,716 4,133,415 3,824,746 10,633,386 9,304,585 6,739,255 6,271,050 3,464,633 1,395, , ,353 1,677, , , , , , ,880 12,266,224 10,482,648 9,699,427 9,016,750 8,675,597 5,690,473 4,283,108 5,490,944 5,051,639 4,774,412 43,207 72,117 66,480 51,148 58,417 6,009,121 6,485,871 6,700,134 6,402,209 6,002,545 1,978,762 1,732,301 1,669,538 1,423,348 1,329,181-4,889,000 2,912,853 2,187,202 1,594, ,976,337 60,381,035 54,967,277 52,192,202 45,633,110 (50,485,016) (35,169,088) (33,372,950) (32,534,882) (29,694,881) 26,282,140 25,531,064 24,978,844 24,257,708 22,981,159 10,927,260 5,369,820 5,328,119 6,806,689 5,186,630 16,888,815 9,903,393 6,290,730 5,680,243 5,011, , , , , ,544 (1,132,849) (731,905) (1,600,292) (143,767) (203,267) (16,647) (58,282) (12,191) ,146,643 40,728,302 35,940,594 37,315,111 33,959,115 2,661,627 5,559,214 2,567,644 4,780,229 4,264, ,430 $ 2,661,627 $ 5,559,214 $ 2,567,644 $ 4,780,229 $ 4,279,

66 SPRINGFIELD, ILLINOIS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Tax Levy Years Tax Fiscal Year Total Taxable Total Direct Estimated Assessed Value Levy Ended Assessed Tax Actual as a Percentage Year June 30 Value Rate Value of Actual Value $ 6,004,643, $ 18,195,889, % ,882,581, ,826,005, % ,780,057, ,515,326, % ,702,604, ,280,620, % ,608,452, ,995,311, % ,508,692, ,693,006, % ,382,669, ,311,119, % ,176,172, ,685,371, % ,021,169, ,215,666, % ,775,876, ,472,352, % Data Source: College Records and Various Counties *2015 Total taxable Assessed Value Allocation Residential 4,157,751,546 Farm 366,584,638 Commercial 1,449,556,551 Industrial 26,586,305 Mineral 4,164,411 6,004,643,

67 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Sangamon County Ashland-Chandlerville CUSD # Athens CUSD # Auburn CUSD # Chatham CUSD # Divernon CUSD # Divernon CUSD #13 Bonds Edinburg CUSD # Illiopolis CUSD # Mt Pulaski CUSD # New Berlin CUSD # North Mac CUSD # Pawnee CUSD # Pleasant Plains CUSD # Porta CUSD # Riverton CUSD # Rochester CUSD #3A Sangamon Valley CUSD # Springfield CUSD # Tri-City CUSD # Virden CUSD # Waverly CUSD # Williamsville CUSD # Auburn Corporation Berlin Corporation Buffalo Corporation Cantrall Corporation Chatham Corporation Clear Lake Corporation Dawson Corporation Divernon Corporation Grandview Corporation Illiopolis Corporation Jerome Corporation Leland Grove Corporation Loami Corporation Mechanicsburg Corporation New Berlin Corporation Pawnee Corporation Pleasant Plains Corporation Riverton Corporation Rochester Corporation Sherman Corporation Southern View Corporation

68 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Spaulding Corporation Springfield Corporation Thayer Corporation Virden Corporation Williamsville Corporation Auburn Township Ball Township Buffalo Hart Township Capital Township Cartwright Township Chatham Township Clear Lake Township Cooper Township Cotton Hill Township Curran Township Divernon Township Fancy Creek Township Gardner Township Illiopolis Township Island Grove Township Lanesville Township Loami Township Maxwell Township Mechanicsburg Township New Berlin Township Pawnee Township Rochester Township Springfield Township Talkington Township Williams Township Woodside Township Auburn R & B Ball R & B Buffalo Hart R & B Cartwright R & B Chatham R & B Clear Lake R & B Cooper R & B Cotton Hill R & B Curran R & B Divernon R & B Fancy Creek R & B Gardner R & B Illiopolis R & B Island Grove R & B

69 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Lanesville R & B Loami R & B Maxwell R & B Mechanicsburg R & B New Berlin R & B Pawnee R & B Rochester R & B Springfield R & B Talkington R & B Williams R & B Woodside R & B Spfld Airport Authority Loami Township Spec. FPD Athens-Fancy Prairie FPD Auburn FPD Buffalo FPD Chatham FPD Curran FPD Dawson Area FPD Divernon FPD Eastside FPD Elkhart FPD Illiopolis FPD Island Grove FPD Lake Springfield FPD Loami FPD Mechanicsburg FPD New Berlin FPD Northside FPD Pawnee FPD Pleasant Plains FPD Riverton FPD Rochester FPD Sherman FPD South Oak Knolls FPD Southlawn FPD Southside FPD Virden FPD Western FPD Williamsville FPD Woodside FPD Spfld MEAA Springfield Mass Transit Iles Junction SSA Laketown SSA

70 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Legacy Pointe SSA Leland Grove SSA # Springfield Sanitary District Virden Sanitary District Cooper-Cotton Hill MTA Illiopolis-Lanesville MTA Loami-Maxwell-Talkington MTA Mechanicsburg-Buffalo Hart MTA New Berlin-Island Grove MTA Springfield Park District Springfield Park District- Recreation Dept Ashland Public Library Chatham Area Library Chatham Library Bond Chatham Library Bond # Grand Prairie Library Illiopolis-Niantic Public Library Mt Pulaski Public Library Prairie Skies Library Rochester Library Sherman Library Tri-City Library West Sangamon Library Sangamon County Montgomery County Auburn CUSD # Bond County CUSD # Girard CUSD #03A Highland CUSD #05A Hillsboro CUSD # Litchfield CUSD # Morrisonville CUSD # Mt. Olive CUSD # Nokomis CUSD # North Mac CUSD # Pana CUSD # Panhandle CUSD # Pawnee CUSD # Ramsey CUSD # Vandalia CUSD # Virden CUSD # Hillsboro SB Dist U Divernon Bond Only

71 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Pana Bond Butler Corporation Coalton Corporation Coffeen Corporation Donnellson Corporation Farmersville Corporation Fillmore Corporation Harvel Corporation Hillsboro Corporation Irving Corporation Litchfield Corporation Nokomis Corporation Ohlman Corporation Panama Corporation Raymond Corporation Schram City Corporation Taylor Spring Corporation Waggoner Corporation Walshville Corporation Witt Corporation Audubon Township Bois Darc Township Butler Grove Township East Fork Township Fillmore Township Grisham Township Harvel Township Hillsboro Township Irving Township Nokomis Township North Litchfield Township Pitman Township Raymond Township Rountree Township South Fillmore Township South Litchfield Township Walshville Township Witt Township Zanesville Township Audubon Road District Bois Darc Road District Butler Grove Road District East Fork Road District Fillmore Road District Grisham Road District

72 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Harvel Road District Hillsboro Road District Irving Road District Nokomis Road District North Litchfield Road District Pitman Road District Raymond Road District Rountree Road District South Litchfield Road District Walshville Road District Witt Road District Zanesville Road District Litchfield Airport Farms-Wagg AMB Hillsboro AMB Litchfield AMB Nokomis-Witt AMB Raymond-Harv AMB Coffeen FPD Divernon FPD Farms-Wagg FPD Fillmore FPD Morr-Palmer FPD Mt. Olive FPD New Douglas FPD Nokomis FPD Pawnee FPD Raymond FPD Shoal Creek FPD Virden FPD CES Extension Serv MTA Audubon-Nokomis MTA But-Irv-Roun MTA Fil-S. Fil-Witt MTA Grish-Walsh MTA Harv-Pit-Zanes Pitman Township Park Litchfield Park Nokomis Park Raymond Park Nokomis Township Library Witt Township Library Doyle Library Dist Farms-Wagg Library Gr Prairie W. Library

73 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Hillsboro Library Litchfield Library County tax Menard County Ashland-Chandlerville CUSD # Athens CUSD # Greenview CUSD # Mt. Pulaski CUSD # Pleasant Plains CUSD # Porta CUSD # Williamsville CUSD # Lincoln Comm High School New Holland-Middleton Elem # Athens Corporation Greenview Corporation Oakford Corporation Petersburg Corporation Tallula Corporation Road District Road District Road District Road District Road District Road District Road District Road District Road District Road District Road District Road District Road District Road District Menard County Rescue District Athens - Fancy Prairie FPD Greenview FPD Mason City FPD Middletown FPD Oakford FPD Petersburg FPD Pleasant Plains FPD Tallula FPD Chautauqua Sanitation Water Authority

74 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Prairie Skies Library County Tax County Cemetery Tallula Cemetery Christian County Morrisonville CUSD # Raymond CUSD # Taylorville CUSD # Edinburg CUSD # Pawnee CUSD # South Fork CUSD # Nokomis CUSD # Rochester CUSD #3A Sangamon Valley CUSD # Pana-Tower Hill CUSD # Meridian CUSD # Central A&M CUSD # Pana School Bonds Taylorville City Assumption City Pana City Assumption Township Bear Creek Township Buckhart Township Greenwood Township Johnson Township King Township Locust Township May Township Mosquito Township Mt. Auburn Township Pana Township Prairieton Township Ricks Township Rosamond Township South Fork Township Stonington Township Taylorville Township Bulpitt Village Edinburg Village Harvel Village Jeisyville Village Kincaid Village

75 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Morrisonville Village Mt. Auburn Village Owaneco Village Palmer Village Stonington Village Moweaqua Village Tovey Village Assumption Township R & B Bear Creek Township R & B Buckhart Township R & B Greenwood Township R & B Johnson Township R & B King Township R & B Locust Township R & B May Township R & B Mosquito Township R & B Mt. Auburn Township R & B Pana Township R & B Prairieton Township R & B Ricks Township R & B Rosamond Township R & B Stonington Township R & B South Fork Township R & B Taylorville Township R & B Morrisonville-Palmer AMB Raymond-Harvel AMB Assumption FPD Blue Mound FPD Edinburg FPD Midland FPD Morrisonville-Palmer FPD Moweaqua FPD Mt. Auburn FPD Niantic FPD Nokomis Area FPD Owaneco FPD Pawnee FPD Raymond FPD Rochester FPD Stonington FPD Taylorville FPD Taylorville Sanitary District MAD #1 Mt. Auburn MAD #2 Stonington MAD #3 Bear Creek

76 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies MAD #4 Greenwood Edinburg Park District Taylorville Park District Prairieton Park District Stonington Park District City Library of Taylorville Rochester Public Library Assumption Public Library Blue Mound Library District Pana City Library Doyle Public Library District Moweaqua Public Library District Ricks Township Library Stonington Township Library County Morgan County A-C Central CUSD # Franklin CUSD # Greenfield CUSD # Jacksonville CUSD # Meredosia-Chambersburg CUSD # New Berlin CUSD # Pleasant Plains CUSD # Scott-Morgan CUSD # Scott-Morgan CUSD # Triopia CUSD # Virginia CUSD # Waverly CUSD # Marnico Village SSA City of Jacksonville City of Waverly Village of Chapin Village of Concord Village of Franklin Village of Lynnville Village of Meredosia Village of Murrayville Village of South Jacksonville Village of Woodson Road District # Road District # Road District # Road District #

77 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Road District # Road District # Road District # Road District # Road District # Road District # Road District # Road District # Airport Authority Meredosia Bluffs Rescue Squad Alexander FPD Franklin FPD Island Grove FPD Meredosia FPD Murrayville FPD New Berlin FPD North Scott FPD Woodson FPD M-C River Valley Public Library Prairie Skies Public Library West Sangamon Library Morgan County Macoupin County Bunker Hill CUSD # Carlinville CUSD # Franklin CUSD # Gillespie CUSD # Girard CUSD # Greenfield CUSD # Litchfield CUSD # Mt. Olive CUSD # North Mac CUSD # Northwestern CUSD # Panhandle CUSD # Southwestern CUSD # Staunton CUSD # Virden CUSD # Waverly CUSD # Benld Corporation Brighton Corporation Bunker Hill Corporation Carlinville Corporation Chesterfield Corporation

78 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Dorchester Corporation E. Gillespie Corporation Eagerville Corporation Gillespie Corporation Girard Corporation Hettick Corporation Lake Kaho Corporation Medora Corporation Modesto Corporation Mt. Clare Corporation Mt. Olive Corporation Nilwood Corporation Palmyra Corporation Royal Lakes Corporation Sawyerville Corporation Scottville Corporation Shipman Corporation Standard City Corporation Staunton Corporation Virden Corporation White City Corporation Wilsonville Corporation Barr Township Bird Township Brighton Township Brushy Mound Township Bunker Hill Township Cahokia Township Carlinville Township Chesterfield Township Dorchester Township Gillespie Township Girard Township Hilyard Township Honey Point Township Mt. Olive Township N. Otter Township N. Palmyra Township Nilwood Township Polk Township S. Otter Township S. Palmyra Township Scottville Township Shaws Point Township Shipman Township

79 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies Staunton Township Virden Township Western Mound Township Barr Township R & B Bird R & B Brighton R & B Brushy Mound R & B Bunker Hill R & B Cahokia R & B Carlinville R & B Chesterfield R & B Dorchester R & B Gillespie R & B Girard R & B Hilyard R & B Honey Point R & B Mt. Olive R & B N. Otter R & B N. Palmyra R & B Nilwood R & B Polk R & B S. Otter R & B S. Palmyra R & B Scottville R & B Shaws Pt. R & B Shipman R & B Staunton R & B Virden R & B Western Mound R & B Betsey-Ann FPD Bunker Hill FPD Farm-Wagg FPD Girard FPD Greenfield FPD Medora Comm FPD Mt Olive FPD New Douglas FPD Raymond FPD Sco-Modesto FPD Staunton FPD Unit 7 FPD Virden FPD Special Service # Special Service # Veterans Adv Comm

80 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Tax Levy Years Taxing Bodies U of I Coop Ext. Ed Virden Sanitary Multi-Township Assessor Multi-Township Assessor Multi-Township Assessor Multi-Township Assessor Multi-Township Assessor Carlinville Park Benld Library Brighton Library Bunker Hill Library Carlinville Library Farm-Wagg Library Gillespie Library Girard Township Library Grand Prairie Library Litchfield Library Mt. Olive Library Staunton Library County Tax Total Overlapping Rate Lincoln Land Community College Total Rate Note: Tax rates for property within the district are expressed in dollars per hundred dollars of equalized assessed value. Data Source: County Clerk's Offices Maximum Rates: Education Fund Building Audit Health and Safety

81 SPRINGFIELD, ILLINOIS PRINCIPAL TAXPAYERS Current Year and Nine Years Ago Sangamon County FY2016 FY2007 Percentage of Percentage of Type of *Assessed Total *Assessed Total Taxpayer Business Value Assessed Value Value Assessed Value White Oaks Mall Ltd Retail 8,153, % 8,983, % Horace Mann Service Insurance 5,200, % 4,749, % Memorial Health Systems Medical 4,897, % - - Wells Fargo Home Mtg Inc. Commercial 4,815, % 4,391, % Memorial Health Systems Medical 4,797, % White Oaks Plaza LLC Retail 4,526, % - - Springfield Clinic Medical 4,459, % - - Wal-Mart Business Trust Retail 4,345, % - - Springfield Clinic Medical 4,168, % - - Memorial Health Systems Medical 3,994, % - - Morgan County Reynolds Foil Industrial 8,240, % - - Ameren Energy Industrial 6,260, % 5,786, % Walmart Stores Inc. Retail 3,240, % - - Lincoln Square Partnership Commercial 2,685, % - - Memorial Health System Medical 2,515, % - - Bartlett Grain Company Industrial 2,221, % - - MYND Corporation Commercial 1,769, % 1,530, % EPOG Inc. Industrial 1,767, % - - SNG Realty, LLC Commercial 1,600, % - - Celanese Ltd Industrial 1,597, % - - Menard County Grigsby Family Partnership Farming 1,981, % % M. Kincaid Farming 966, % 662, % Memorial Health Systems Commercial 911, % 929, % Lincoln Land FS Commercial 908, % - - Culver Fancy Prairie Co-Op Farming 841, % 662, % J. Lozier Farming 651, % 399, % Menard Electric Commercial 625, % 375, % Lincoln Land F S Inc Commercial 580, % % Farmers Grain & Co. Commercial 532, % 498, % T. James Farming 451, % % 55.

82 SPRINGFIELD, ILLINOIS PRINCIPAL TAXPAYERS Current Year and Nine Years Ago Montgomery County FY2016 FY2007 Percentage of Percentage of Type of *Assessed Total *Assessed Total Taxpayer Business Value Assessed Value Value Assessed Value Dynergy Inc. Industrial 3,997, % - - Wal-Mart Stores Retail 367, % - - Colt LLC Industrial 187, % - - Hillsboro Energy LLC Industrial 180, % National Bank Banking 174, % IEC Montgomery LLC Industrial 156, % - - Sierra International Industrial 100, % - - Pioneer Hi Bred Commercial 131, % - - Litchfield IL TX LLC Commercial 94, % - - Fisher & Ludlow Commercial 88, % - - Christian County Kincaid Generation LLC Industrial 6,388, % - - Taylorville Memorial Hospital Medical 3,023, % - - WalMart Stores Division Store Retail 2,634, % - - Kincaid Generation LLC Industrial 1,771, % - - Princeton Capital Development Commercial 1,760, % - - GSI Group Inc Industrial 1,626, % - - Archer Daniels Midlan Industrial 1,330, % - - Ahlstrom Filtration Inc Industrial 1,272, % - - Waste Management of Illinois Inc Industrial 1,263, % - - Fast Food Merchandisers Inc Commercial 1,241, % - - Macoupin County County is unable to provide this information Notes: (1) Information is presented for the years the information was available. (2) Sangamon County taxpayers listed twice have multiple parcels. Data Source: County Clerk's Offices 56.

83 COMMUNITY COLLEGE DISTRICT #529 SPRINGFIELD, ILLINOIS PROPERTY TAX RATES, EXTENSIONS AND COLLECTIONS Last Ten Tax Levy Years Tax Levy Year Fiscal Year Assessed valuation $ 6,004,643,451 $ 5,882,581,871 $ 5,780,057,817 $ 5,702,604,674 $ 5,608,452,684 $ 5,508,692,008 $ 5,382,669,545 $ 5,176,172,574 $ 5,021,169,917 $ 4,775,876,303 Tax rates (per $100 of assessed valuation): Education Fund Building Tort Immunity Audit Fund Bond and Interest Social Security Health and Safety Tax extensions Education Fund $ 16,212,537 $ 15,882,971 $ 15,606,156 $ 15,397,033 $ 15,142,822 $ 14,873,468 $ 14,533,208 $ 13,975,666 $ 13,557,159 $ 12,894,866 Building 4,203,250 4,117,807 4,046,040 3,991,823 3,925,917 3,856,084 3,767,869 3,623,321 3,514,819 3,343,113 Tort Immunity 3,897,014 3,441,310 3,196,372 3,324,619 2,641,581 2,682,733 2,637,508 2,122,231 1,998,426 1,833,937 Audit Fund 72,056 64,708 69,361 68,431 61,693 71,613 69,975 67,290 55,233 42,983 Bond and Interest 3,879,000 2,558,923 2,485,425 2,412,202 2,344,333 2,275,090 2,206,895 2,148,112 1,350,695 1,418,435 Social Security 504, , , , , , , , , ,846 Health and Safety 1,381,068 1,282,403 1,202, ,554 1,317,986 1,173,351 1,001,177 1,501,090 2,485,479 2,101,386 Total tax extensions 30,149,315 27,859,907 27,131,591 26,517,112 25,905,442 25,362,017 24,647,246 23,862,156 23,363,505 22,021,566 Tax collections: Current fiscal year (10,372,287) (28,099,540) (27,366,466) (26,604,418) (25,959,954) (25,522,735) (24,779,724) (24,193,680) (23,540,346) (22,947,280) Prior fiscal years - (948) (824) (739) (1,051) (4,083) (3,272) (41,698) (341,663) (203) Total collected (10,372,287) (28,100,488) (27,367,290) (26,605,158) (25,961,005) (25,526,818) (24,782,996) (24,235,378) (23,882,009) (22,947,483) Total uncollected 19,777,028 (240,581) (235,699) (88,046) (55,563) (164,801) (135,750) (373,222) (518,504) (925,917) Tax collections as a percent of total tax extensions 34.40% % % % % % % % % % Data Source: District's Business Office and County Clerk's Offices 57.

84 SPRINGFIELD, ILLINOIS RATIO OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years Percentage of District Total Outstanding Total Net Estimated Debt to Estimated Outstanding Fiscal General Total Actual Taxable Actual Taxable Debt Year Obligation Capital Lease Notes Outstanding Property Property Population Per Ended Bonds (1) Obligations Payable Debt Value Value (Estimated) Capita 2016 $ 29,660,000 $ 1,703,022 $ 642,857 $ 32,005,879 $ 18,195,889, % 352, ,121,767 2,081, ,286 33,017,262 17,826,005, % 341, ,101,909 2,450, ,099 34,544,979 17,515,326, % 339, ,982,661 2,804,298 1,188,747 35,975,706 17,280,620, % 339, ,768,998 3,141,988 56,236 35,967,222 16,995,311, % 339, ,465,896 3,459,589-36,925,485 16,693,006, % 339, ,078,332 3,762, ,061 37,945,186 16,311,119, % 338, ,616,284 4,142, ,532 38,930,240 15,685,371, % 338, ,285,000 4,486, ,937 6,040,381 15,215,666, % 338, ,585,000 4,810, ,136 7,573,213 14,472,352, % 338, Notes: (1) Balances include current and noncurrent portions of bond principal outstanding less bond discount. (2) Details of the District's outstanding debt can be found in the notes to financial statements Data Sources: District records and County Clerks Offices 58.

85 SPRINGFIELD, ILLINOIS RATIO OF NET GENERAL BONDED DEBT OUTSTANDING Last Ten Fiscal Years Percentage of Net General Bonded Fiscal-Year General Less: Amount for Net Estimated Debt to Estimated Net General Ended Obligation Debt Service General Obligation Actual Taxable Actual Taxable Bonded Debt June 30, Bonds (1) Fund Bond Debt Property Value Property Value Population Per Capita 2016 $ 29,660,000 $ 1,367,590 $ 28,292,410 $ 18,195,889, % 352, ,121, ,232 29,618,535 17,826,005, % 341, ,101, ,874 30,667,035 17,515,326, % 339, ,982, ,853 31,609,808 17,280,620, % 339, ,768, ,418 32,448,580 16,995,311, % 339, ,465, ,326 33,212,570 16,693,006, % 339, ,078, ,851 33,881,481 16,311,119, % 338, ,616, ,641 34,489,643 15,685,371, % 338, ,285, , ,857 15,215,666, % 338, ,585, ,704 2,076,296 14,472,352, % 338, Notes: (1) Balances include current and noncurrent portions of bond principal outstanding (2) Details of the District's outstanding debt can be found in the notes to financial statements Data Sources: District records and County Assessor's Offices 59.

86 SPRINGFIELD, ILLINOIS LEGAL DEBT MARGIN Last Ten Fiscal Years Legal Debt Margin Calculation for Fiscal Year 2016 Assessed value levy $ 6,004,643,451 Debt limit (2.875% of assessed valuation) $ 172,633,499 Debt applicable to limit: Long-Term Debt 29,660,000 Less: amount set aside for repayment of general obligation debt (1,367,590) Total net debt applicable to limit 28,292,410 Legal debt margin $ 144,341,089 Fiscal Year Debt limit $ 172,633,499 $ 169,124,229 $ 166,176,662 $ 163,949,884 $ 161,243,015 $ 158,374,895 $ 154,751,749 $ 148,814,962 $ 144,358,635 $ 137,306,444 Total net debt applicable to limit 28,292,410 29,618,535 30,667,035 31,609,808 32,448,580 33,212,570 33,881,481 34,489, ,857 2,076,296 Legal debt margin $ 144,341,089 $ 139,505,694 $ 135,509,627 $ 132,340,076 $ 128,478,433 $ 125,162,325 $ 120,870,268 $ 114,325,319 $ 143,577,778 $ 135,230,148 Total net debt applicable to the limit as a percentage of debt limit 16.39% 17.51% 18.45% 19.28% 20.12% 20.97% 21.89% 23.18% 0.54% 1.51% Data Source: District's Business Office 60.

87 SPRINGFIELD, ILLINOIS COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT - GENERAL OBLIGATION BONDS June 30, 2016 Bonds ISSUER (**Overlapping) Outstanding Percent Amount Sangamon County Athens CUSD #213 $ 1,000, % $ 1,000,000 A-C Central CUSD #262 3,262, % 3,262,000 Auburn Township - 100% - Auburn/Divernon CUSD #13 1,060, % 1,060,000 Auburn CUSD #10 8,517, % 8,517,297 Chatham Area Library 5,355, % 5,355,000 Chatham Corporation 3,376, % 3,376,000 Chatham CUSD #5 83,280, % 83,280,000 City of Springfield 61,865, % 61,865,000 Edinburg CUSD #4C 415, % 415,000 Illiopolis Township 115,000 6% 6,624 Isles Junction 416, % 416,158 Legacy Pointe SSA 15,000, % 15,000,000 Mt. Pulaski CUSD #23 495, % 495,000 New Berlin Corporation - 100% - New Berlin CUSD #16 9,820, % 9,820,000 North Mac CUSD #34 3,130, % 3,130,000 Pawnee CUSD #11 380, % 380,000 Pleasant Plains CUSD #8 10,020, % 10,020,000 Porta CUSD #202 12,720, % 12,720,000 Riverton Corporation 1,270, % 1,270,000 Riverton CUSD #14 9,775, % 9,775,000 Rochester FPD 560, % 560,000 Rochester CUSD #3A 57,025, % 57,025,000 Sangamon Valley CUSD #9 765, % 765,000 Sherman Corp - 100% - Sherman SSA - 100% - SMEAA 905, % 905,000 Springfield Airport Authority 1,313, % 1,313,040 Springfield CUSD # ,005, % 125,005,000 Springfield Park District 12,215, % 12,215,000 Springfield Sanitary District 79,505, % 79,505,000 Tri-City Unit #1 6,595, % 6,595,000 Village of Chatham 3,376, % 3,376,000 Village of Mechanicsburg 1,920, % 1,920,000 Village of Rochester 1,520, % 1,520,000 Waverly CUSD #6 3,500, % 3,500,000 Williamsville Corp 156, % 156,000 Williamsville CUSD #15 2,945, % 2,945,

88 SPRINGFIELD, ILLINOIS COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT - GENERAL OBLIGATION BONDS June 30, 2016 Bonds ISSUER (**Overlapping) Outstanding Percent Amount Montgomery County Auburn/Divernon CUSD #13 $ 1,060, % $ 1,060,000 Auburn CUSD #10 8,517, % 8,517,297 City of Hillsboro - 100% - Hillsboro CUSD #3 9,040, % 9,040,000 Litchfield Airport 300, % 300,000 Litchfield CUSD #12 3,000, % 3,000,000 Litchfield Park District 122, % 122,000 Morrisonville CUSD #1 2,085, % 2,085,000 Nokomis CUSD #22 5,340, % 5,340,000 North Mac CUSD #34 3,130, % 3,130,000 Pawnee CUSD #11 380, % 380,000 Raymond/Panhandle CUSD #2 3,240, % 3,240,000 Village of Farmersville - 100% - Menard County A-C Central CUSD #262 3,262, % 3,262,000 Athens CUSD #213 1,000, % 1,000,000 City of Athens - 100% - Mt. Pulaski CUSD #23 495, % 495,000 Pleasant Plains CUSD #8 10,020, % 10,020,000 Porta CUSD #202 12,720, % 12,720,000 Williamsville CUSD #15 2,945, % 2,945,008 Macoupin County Carlinville CUSD #1 1,365,000 * City of Carlinville 475,000 * City of Gillespie 375,000 * City of Girard 645,000 * Gillespie CUSD #7 10,610,000 * Litchfield CUSD #12 3,000,000 * North Mac CUSD #34 3,130,000 * Northwestern CUSD #2 875,000 * Raymond/Panhandle CUSD #2 3,240,000 * Waverly CUSD #6 3,500,000 * Morgan County A-C Central CUSD #262 3,262,000 * New Berlin CUSD #16 9,940,000 * Pleasant Plains CUSD #8 10,020,000 * Waverly CUSD #6 3,500,000 * 62.

89 SPRINGFIELD, ILLINOIS COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT - GENERAL OBLIGATION BONDS June 30, 2016 Bonds ISSUER (**Overlapping) Outstanding Percent Amount Christian County County $ 1,029, % $ 1,029,916 Edinburg CUSD #4C 415, % 415,000 Morrisonville CUSD #1 2,085, % 2,085,000 Nokomis CUSD #22 5,340, % 5,340,000 Raymond/Panhandle CUSD #2 3,240, % 3,240,000 Pawnee CUSD #11 380, % 380,000 Rochester CUSD #3A 57,025, % 57,025,000 South Fork CUSD #14 1,890, % 1,890,000 Taylorville City 18,415, % 18,415,000 Taylorville CUSD #3 16,145, % 16,145,000 Taylorville Park District 1,196, % 1,196,000 Total Overlapping Debt 702,285,347 Total Direct Debt of the College 29,660,000 Total Direct and Overlapping Debt $ 731,945,347 Notes: * County is unable to determine the percentage of overlap for Lincoln Land Community College District #526 ** Information as of June 30, 2016 *** The overlapping rate was determined by the County. Data Source: County Clerk's Offices 63.

90 SPRINGFIELD, ILLINOIS DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Calendar Years Median Unemployment Year Population Assessed Value Per Capita Household Income Rate ,651 $ 6,004,643,451 $ 17, , % ,105 5,882,581,871 17, , % ,605 5,780,057,817 17, , % ,605 5,702,604,674 16, , % ,605 5,608,452,684 16, , % ,605 5,508,692,008 16, , % ,996 5,382,669,545 15, , % ,996 5,176,172,574 15, , % ,996 5,021,169,917 14, , % ,996 4,775,876,303 14, , % Note: The Unemployment Rate is based on the yearly average for Sangamon County only. Data Sources: District's Planning & Institutional Improvement Department US Census American Community Survey US Bureau of Labor Statistics 64.

91 SPRINGFIELD, ILLINOIS MAJOR EMPLOYERS Current Year and Five Years Ago 2016 % of 2011 Employer Employees Total Employment Product/Service Employer Employees Product/Service State of Illinois 17,500 18% Government State of Illinois 17,000 Government Memorial Health System 5,854 6% Health Care Memorial Health System 3,400 Health Care St. Johns Hospital 3,096 3% Health Care St. Johns Hospital 2,839 Health Care Springfield Public Schools #186 2,095 2% Education Illinois National Guard 2,700 Government Springfield Clinic, LLP 2,039 2% Health Care Springfield Public Schools #186 2,019 Education SIU School of Medicine 1,511 2% Health Care/Education City of Springfield 1,789 Government City of Springfield 1,467 2% Government Horace Mann Insurance company 1,280 Insurance Blue Cross / Blue Shield 1,316 1% Insurance SIU School of Medicine 1,200 Health Care/Education Horace Mann Companies % Insurance Springfield Clinic, LLP 900 Health Care University of Illinois at Springfield 926 1% Education SBC 900 Telecommunications Notes: The information has been presented for the years the information was available. Data Source: City of Springfield Comprehensive Annual Financial Report US Bureau of Labor Statistics Total employed as of December 2015 was 99,

92 SPRINGFIELD, ILLINOIS OPERATING INFORMATION AND EMPLOYEES Last Ten Fiscal Years Enrollment - full-time equivalent (10th day) 3,987 4,323 4,453 4,555 4,630 4,880 4,740 4,156 4,012 3,960 Degrees awarded Associate in Arts (AA) Associate in Science (AS) Associate in Fine Arts (AFA) Associate in Engineering Studies (AES) Associate in Applied Science (AAS) Associate in General Studies (AGS) Associate of Arts in Teaching (AAT) 0 1 1,063 1,048 1, Faculty* Full-time Part-time *As of October 1 Payroll Average annual faculty salary 80,891 78,632 77,252 75,697 74,588 72,225 71,548 68,726 66,557 65,036 Staff (excluding faculty)* Full-time Part-time *As of October 1 Payroll Students per faculty/staff Students per faculty Students per staff (excluding faculty) Data Sources: District's Office of Planning and Evaluation and Research; District's Payroll Office 66.

93 SPRINGFIELD, ILLINOIS OPERATING STATISTICS Last Ten Fiscal Years Percentage Cost Change Student/ Fiscal Instructional Per Cost Per Faculty Year Expenses Enrollment Student Student Faculty Ratio 2016 $ 26,076,866 3,987 6, % ,232,974 4,323 5, % ,804,252 4,453 5, % ,394,445 4,555 5, % ,586,520 4,630 4, % ,214,269 4,880 4, % ,120,018 4,740 3, % ,064,334 4,156 3, % ,495,275 4,012 3, % ,653,209 3,960 3, % Note: Instructional expenses starting in fiscal year 2011 includes the proportional share of the SURS contribution made by the State Data Sources: College departments 67.

94 DISTRICT #526 SPRINGFIELD ILLINOIS OPERATING INFORMATION CAPITAL ASSET STATISTICS Last Ten Fiscal Years Function/Program Main Campus Size of campus in acres Number of buildings Gross square footage 652, , , , , , , , , ,934 Number of parking lots Number of parking spaces 2,247 2,247 2,247 2,247 2,247 2,194 2,194 2,194 2,194 2,194 Note: Above information includes the main campus located in Springfield Illinois and all of the Educational Service Area buildings both owned and leased. Data Source: District records 68.

95 SPRINGFIELD, ILLINOIS STUDENT ENROLLMENT DEMOGRAPHIC STATISTICS (FALL TERM) Last Ten Fiscal Years FISCAL FALL GENDER ATTENDANCE ACADEMIC ENROLLMENT STATUS IN DISTRICT AVERAGE YEAR *H/C FTE M F FT PT FRESH OTHER FIRST** READMIT OTHER RESIDENCY AGE ,447 3,987 41% 59% 42% 58% 53% 47% 21% 15% 64% 95% ,006 4,323 42% 58% 42% 58% 55% 45% 21% 13% 66% 94% ,020 4,453 42% 58% 43% 57% 55% 45% 23% 11% 66% 96% ,193 4,555 42% 58% 42% 58% 55% 45% 23% 15% 62% 96% ,337 4,630 42% 58% 43% 57% 57% 43% 18% 19% 61% 96% ,602 4,880 42% 58% 45% 55% 58% 42% 19% 16% 65% 95% ,677 4,740 41% 59% 43% 57% 44% 56% 26% 15% 59% 96% ,659 4,156 41% 59% 44% 56% 47% 53% 20% 19% 61% 96% ,655 4,012 41% 59% 41% 59% 49% 51% 20% 17% 63% 97% ,532 3,960 41% 59% 41% 59% 50% 50% 20% 23% 57% 97% 27 Note: *H/C = Headcount ** First time college level at LLCC Data Source: District records 69.

96 SPECIAL REPORTS SECTION

97 SUPPLEMENTARY INFORMATION

98 Combining Schedules of Net Position Accounts, by Subfund June 30, 2016 Operations Liability, and Restricted Protection and Bond and Education Maintenance Purposes Audit Settlement Interest Auxiliary ASSETS Current Assets Cash, cash equivalents and investments $ 21,646,813 $ 261,615 $ - $ 4,606 $ 52,277 $ - $ 3,200 Restricted cash 248, Receivables: Property taxes 10,758,842 2,790,317-47,220 2,912,896 2,569,252 - Government claims 1,470, Student tuition and fees 5,977, Other receivables, net 377, ,614 Prepaid expenses 8, Due from other funds - 36,976 6,971,331 74,913 3,495,924 1,038,719 5,132,410 Inventories ,957 Total Current Assets 40,487,851 3,088,908 6,971, ,739 6,461,097 3,607,971 5,821,181 Noncurrent Assets Land Construction-in-progress Depreciable capital assets, net of accumulated depreciation Total Noncurrent Assets TOTAL ASSETS 40,487,851 3,088,908 6,971, ,739 6,461,097 3,607,971 5,821,181 DEFERRED OUTFLOWS OF RESOURCES Deferred pension expense Deferred loss on refunding TOTAL DEFERRED OUTFLOWS OF RESOURCES TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 40,487,851 3,088,908 6,971, ,739 6,461,097 3,607,971 5,821,181 LIABILITIES Current Liabilities Accounts payable 869, Accrued expenditures 1,628, Due to other funds 21,854,210-11, ,503 - Claims payable Other liabilities 3, Interest payable Unearned student tuition and fees 6,330, , ,347 Unearned revenue - - 2, Bonds, contracts and leases payable Compensated absences Total Current Liabilities 30,687, ,102 14, ,503 77,940 Noncurrent Liabilities Bonds, contracts and leases payable Compensated absences Total Noncurrent Liabilities TOTAL LIABILITIES 30,687, ,102 14, ,503 77,940 DEFERRED INFLOWS OF RESOURCES Deferred property taxes 8,168,358 2,118,216-35,995 2,213,439 1,951,878 - TOTAL DEFERRED INFLOWS OF RESOURCES 8,168,358 2,118,216-35,995 2,213,439 1,951,878 - NET POSITION Net investment in capital assets Restricted for: Capital projects Debt service ,367,590 - Grant purposes , Audit purposes , Liability insurance ,247, Pension contribution Working cash Unrestricted 1,632, ,590 6,133, ,743,241 TOTAL NET POSITION $ 1,632,419 $ 816,590 $ 6,956,886 $ 90,744 $ 4,247,658 $ 1,367,590 $ 5,743,

99 Operations and Student Maintenance Employee Financial Working Long-Term Capital Restricted Benefit Aid Cash Agency Obligations Assets Eliminations Total $ - $ 1,985,106 $ 1,182 $ 14,387,453 $ 10,126 $ - $ - $ - $ 38,352, , , ,992, , ,592, ,977, ,647 1, , ,957 5,222, , (22,154,683) ,957 6,136,528 2,094, ,623 14,387, , (22,154,683) 67,345, , , , , ,958,590-64,958, ,963,789-65,963,789 6,136,528 2,094, ,623 14,387, ,635-65,963,789 (22,154,683) 133,309, , , , , , ,934 6,136,528 2,094, ,623 14,387, , ,934 65,963,789 (22,154,683) 133,852, , , , ,741, (22,154,683) , , , , , , , ,562, , ,823, ,823, , , , , ,635 4,822,758 - (22,154,683) 14,403, ,232, ,232, , , ,578, ,578, , , ,635 33,401,316 - (22,154,683) 42,981, , ,182, , ,182, (31,742,192) 65,963,789-34,221,597 5,442, ,442, ,367, , , , ,247, , , ,500, ,500,000-1,894,753-1,887,453 - (1,168,688) ,939,126 $ 5,442,193 $ 1,894,753 $ 3,230 $ 14,387,453 $ - $ (32,858,382) $ 65,963,789 $ - $ 75,688,

100 Combining Schedules of Net Position Accounts, by Subfund June 30, 2015 Operations Liability, and Restricted Protection and Bond and Education Maintenance Purposes Audit Settlement Interest Auxiliary ASSETS Current Assets Cash, cash equivalents and investments $ 19,735,848 $ 260,006 $ - $ 4,598 $ 52,196 $ - $ 3,200 Restricted cash 209, Receivables: Property taxes 10,672,559 2,767,670-44,184 2,648,057 1,715,854 - Government claims 1,462, Student tuition and fees 5,760, Other receivables, net 429, ,595 Prepaid expenses 2, Due from other funds - 29,707 6,257,685 72,936 2,392, ,700 4,749,449 Inventories ,710 Total Current Assets 38,273,279 3,057,383 6,257, ,718 5,092,559 2,009,554 5,460,954 Noncurrent Assets Land Construction-in-progress Depreciable capital assets, net of accumulated depreciation Total Noncurrent Assets TOTAL ASSETS 38,273,279 3,057,383 6,257, ,718 5,092,559 2,009,554 5,460,954 DEFERRED OUTFLOWS OF RESOURCES Deferred pension expense TOTAL DEFERRED OUTFLOWS OF RESOURCES TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 38,273,279 3,057,383 6,257, ,718 5,092,559 2,009,554 5,460,954 LIABILITIES Current Liabilities Accounts payable 1,614, Accrued expenditures 1,538, Due to other funds 18,863,721-15, ,020 - Claims payable Other liabilities 7, Interest payable Unearned student tuition and fees 6,615, , ,044 Unearned revenue , Bonds, contracts and leases payable Compensated absences Total Current Liabilities 28,639, ,787 37, ,020 84,177 Noncurrent Liabilities Bonds, contracts and leases payable Compensated absences Total Noncurrent Liabilities TOTAL LIABILITIES 28,639, ,787 37, ,020 84,177 DEFERRED INFLOWS OF RESOURCES Deferred property taxes 8,013,642 2,078,043-33,016 1,990,403 1,289,302 - TOTAL DEFERRED INFLOWS OF RESOURCES 8,013,642 2,078,043-33,016 1,990,403 1,289,302 - NET POSITION Net investment in capital assets Restricted for: Capital projects Debt service ,232 - Grant purposes , Audit purposes , Liability insurance ,102, Pension contribution Working cash Unrestricted 1,620, ,553 5,430, ,376,777 TOTAL NET POSITION $ 1,620,562 $ 810,553 $ 6,220,222 $ 88,702 $ 3,102,156 $ 503,232 $ 5,376,

101 Operations and Student Maintenance Employee Financial Working Long-Term Capital Restricted Benefit Aid Cash Agency Obligations Assets Eliminations Total $ - $ 1,391,183 $ 1,065 $ 14,279,999 $ 10,110 $ - $ - $ - $ 35,738, , , ,706, , ,531, ,760, ,476 1, ,566-5, ,940 5,078, , (19,095,953) ,710 5,937,053 1,669,993 71,266 14,279, , (19,095,953) 63,367, , , , , ,287,363-66,287, ,469,938-67,469,938 5,937,053 1,669,993 71,266 14,279, ,636-67,469,938 (19,095,953) 130,837, , , , ,516 5,937,053 1,669,993 71,266 14,279, ,636 41,516 67,469,938 (19,095,953) 130,878,580-3,688 66, ,684, , ,651, (19,095,953) , , , , , , , ,868, , ,293, ,293, , , ,688 68, ,636 3,360,363 - (19,095,953) 13,889, ,724, ,724, , , ,046, ,046, ,688 68, ,636 34,407,067 - (19,095,953) 44,936, , ,049, , ,049, (33,017,261) 67,469,938-34,452,677 5,291, ,291, , , , , ,102, , , ,500, ,500,000-1,491,305-1,779,999 - (1,389,806) ,119,971 $ 5,291,689 $ 1,491,305 $ 3,113 $ 14,279,999 $ - $ (34,365,551) $ 67,469,938 $ - $ 71,892,

102 Combining Schedule of Revenues, Expenses and Changes in Net Position, by Subfund For the Year Ended June 30, 2016 Operations Liability, and Restricted Protection and Bond and Education Maintenance Purposes Audit Settlement Interest OPERATING REVENUES Student tuition and fees, tuition chargebacks, net of scholarship allowances $ 16,633,151 $ 428,767 $ - $ - $ - $ - Auxiliary enterprise revenue Facilities revenue - 37, Other operating revenue 294,366 26, ,860-29,256 - Total operating revenues 16,927, , ,860-29,256 - OPERATING EXPENSES Instruction 25,646, , Academic support 5,249, , Student services 3,424, , Public services 947,328-1,054, Auxiliary services 1,109,396-58, Institutional support 8,735,815-45,225 67,000 3,089,267 - Operation and maintenance of plant 2,477,649 4,243, Tuition chargebacks 782, Auxiliary enterprise Depreciation Total operating expenses 48,374,365 4,243,619 2,405,082 67,000 3,089,267 - Operating income (loss) (31,446,848) (3,750,060) (2,183,222) (67,000) (3,060,011) - Non-operating revenues (expenses) Property taxes 16,188,654 4,197,983-69,035 4,205,431 3,242,209 Corporate personal property replacement taxes 926, , State grants and contracts 15,111, , , Federal grants and contracts 24,972-1,204, Investment earnings 148,579 1, Debt service Principal - (85,136) (1,105,000) Interest - (30,767) (1,362,682) Bond proceeds ,861,069 Payment to escrow (9,771,238) Other non-operating revenues (expenses) Loss on disposal of assets Transfers in 81, , Transfers out (1,023,679) (673,767) (75,615) Total non-operating revenues (expenses) 31,458,705 3,756,097 2,919,886 69,042 4,205, ,358 Income (loss) before capital contributions 11,857 6, ,664 2,042 1,145, ,358 Capital contributions CHANGE IN NET POSITION 11,857 6, ,664 2,042 1,145, ,358 NET POSITION (DEFICIT) - BEGINNING OF YEAR 1,620, ,553 6,220,222 88,702 3,102, ,232 NET POSITION (DEFICIT) - END OF YEAR $ 1,632,419 $ 816,590 $ 6,956,886 $ 90,744 $ 4,247,658 $ 1,367,

103 Operations and Student Maintenance Employee Financial Working Long-Term Capital Auxiliary Restricted Benefit Aid Cash Agency Obligations Assets Eliminations Total $ - $ - $ - $ - $ - $ - $ - $ - $ (7,943,744) $ 9,118,174 6,132, (1,490,885) 4,641, , , (19,262) 816,851 6,132, , (9,453,891) 14,614, (150,828) , ,076, (47,650) (19,262) 5,488, (32,705) 13,926, (8,666,000) 9,118, (82,614) ,918, (20,548) (23,898) 1,123, (18,413) ,918,894 20,286 1,941,710 (37,744) (2,217,346) - 6,428, (744,731) 38,155 5,530, ,530, ,704,801-3,704,801 5,551,100 1,941,710 (390,502) 13,926, ,087 1,487,455 (9,453,891) 71,347, ,459 (1,677,961) 390,502 (13,926,329) - - (106,087) (1,487,455) - (56,733,012) - 1,340, ,243, ,076, ,248, ,926, ,155, , , ,793 (304,189) (171,429) ,665, (77,463) (14,097) (52,498) - 89,831 (1,447,676) (9,861,069) ,771, (18,694) - (18,694) 231,081 1,385, (2,548,771) - (64,424) (711,286) ,548,771 - (214,995) 1,828,465 12,946 13,926, ,454-1,613,256 (18,694) - 60,528, , , , ,454-1,507,169 (1,506,149) - 3,795, , , , ,454-1,507,169 (1,506,149) - 3,795,467 5,376,777 5,291,689 1,491,305 3,113 14,279,999 - (34,365,551) 67,469,938-71,892,697 $ 5,743,241 $ 5,442,193 $ 1,894,753 $ 3,230 $ 14,387,453 $ - $ (32,858,382) $ 65,963,789 $ - $ 75,688,

104 Combining Schedule of Revenues, Expenses and Changes in Net Position, by Subfund For the Year Ended June 30, 2015 Operations Liability, and Restricted Protection and Bond and Education Maintenance Purposes Audit Settlement Interest OPERATING REVENUES Student tuition and fees, tuition chargebacks, net of scholarship allowances $ 16,682,455 $ 465,675 $ - $ - $ - $ - Auxiliary enterprise revenue Facilities revenue - 32, Other operating revenue 246,379 10, ,359-7,374 - Total operating revenues 16,928, , ,359-7,374 - OPERATING EXPENSES Instruction 24,646, , Academic support 5,555, , Student services 3,161, , Public services 986,420-1,272, Auxiliary services 1,201,492-56, Institutional support 10,278,753-8,555 60,900 3,296,564 - Operation and maintenance of plant 964,612 4,696, Tuition chargebacks 802, Auxiliary enterprise Depreciation Total operating expenses 47,596,275 4,696,215 3,110,755 60,900 3,296,564 - Operating income (loss) (30,667,441) (4,187,526) (2,899,396) (60,900) (3,289,190) - Non-operating revenues (expenses) Property taxes 15,876,075 4,116,449-67,669 3,860,298 2,535,114 Corporate personal property replacement taxes 1,065, , State grants and contracts 15,124,530 1,005,453 1,840, Federal grants and contracts 28,159-1,086, Investment earnings 136, Debt service Principal - (88,939) (995,000) Interest - (33,772) (1,471,756) Loan proceeds Other non-operating revenues (expenses) Loss on disposal of assets Transfers in 4,532-1,261, Transfers out (1,556,869) (908,727) (9,758) Total non-operating revenues (expenses) 30,679,145 4,194,735 4,177,536 67,670 3,860,312 68,358 Income (loss) before capital contributions 11,704 7,209 1,278,140 6, ,122 68,358 Capital contributions CHANGE IN NET POSITION 11,704 7,209 1,278,140 6, ,122 68,358 NET POSITION (DEFICIT) - BEGINNING OF YEAR 1,608, ,344 4,942,082 81,932 2,531, ,874 NET POSITION (DEFICIT) - END OF YEAR $ 1,620,562 $ 810,553 $ 6,220,222 $ 88,702 $ 3,102,156 $ 503,232 See Independent Auditor's Report. 76.

105 Operations and Student Maintenance Employee Financial Working Long-Term Capital Auxiliary Restricted Benefit Aid Cash Agency Obligations Assets Eliminations Total $ - $ - $ - $ - $ - $ - $ - $ - $ (7,917,049) $ 9,231,081 7,135, (1,826,176) 5,309, , (11,250) 464,469 7,135, (9,754,475) 15,037, (160,514) , ,232, (52,110) (4,275) - (11,250) 5,831, (33,902) 16,316, (2,599) - (9,724,136) 10,505, (24,062) (2,211) - - 2,232, (22,054) (1,460) - - 1,234, (93,174) (7,105) - (19,089) 13,525,404 20,735 3,118,171 (39,975) (2,142) (3,476,712) - 5,280, ,561 6,637, ,637, ,440,925-3,440,925 6,657,766 3,118,171 (425,791) 16,316, ,928 (35,787) (9,754,475) 74,723, ,910 (3,118,171) 425,791 (16,316,789) - - (85,928) 35,787 - (59,685,853) - 1,247, ,703, ,169, ,970, ,316, ,430, , , ,161 (287,208) (171,429) ,542, (93,337) (17,262) , (1,499,451) (4,131) - (4,131) 301,068 2,074, (3,641,263) - - (1,165,909) ,641,263 - (79,477) 1,967,654 10,093 16,316, ,344-1,659,252 (4,131) - 63,022, ,433 (1,150,517) 435, ,344-1,573,324 31,656-3,336, , , ,433 (1,150,517) 435, ,344-1,573, ,931-3,691,712 4,978,344 6,442,206 1,055,421 3,103 14,175,655 - (35,938,875) 67,083,007-68,200,985 $ 5,376,777 $ 5,291,689 $ 1,491,305 $ 3,113 $ 14,279,999 $ - $ (34,365,551) $ 67,469,938 $ - $ 71,892,697 See Independent Auditor's Report. 77.

106 NOTE TO SUPPLEMENTARY INFORMATION June 30, 2016 and 2015 NOTE 1 FUND ACCOUNTING The College accounts for all operating activity in the Education sub-fund. All accruals are recorded in the Education sub-fund and an interfund receivable or payable is recorded to reflect the amount due from or to the sub-fund to which the transaction relates. For financial reporting purposes, the College is reported as a single enterprise fund at the basic financial statement level. All interfund activity between the various subfunds is eliminated at the combining sub-fund level. Therefore, the total columns on the combining schedules included in the supplementary information are correct in relation to the basic financial statements. 78.

107 Uniform Financial Statement No. 1 - All Funds Summary Year Ended June 30, 2016 Operations Operations and Liability, and Maintenance Bond and Restricted Working Protection and Education Maintenance Restricted Interest Auxiliary Purposes Cash Audit Settlement Total FUND BALANCES, JUNE 30, 2015 $ 1,620,562 $ 810,553 $ 5,291,689 $ 503,232 $ 5,376,777 $ 6,223,335 $ 14,279,999 $ 88,702 $ 3,102,156 $ 37,297,005 REVENUES Local tax revenue 17,115,389 4,347,724 1,340,224 3,242, ,035 4,205,431 30,320,012 ICCB grants 850, , , ,208,430 All other state revenue , ,434 Federal revenue 24, ,511 15,130, ,184,464 Student tuition and fees 16,633, , , ,082,641 All other revenue 442,945 66, ,749 9,861,069 6,083, , , ,338 17,076,264 Total revenues 35,066,885 5,039,326 1,603,973 13,103,278 6,132,559 16,292, ,454 69,042 4,234,769 81,650,245 EXPENDITURES BY PROGRAM Instruction 18,216, , ,807 19,179,999 Academic support 3,811, , ,117,344 Student services 2,445, ,392, ,837,417 Public services/continuing education 229, ,311,270 1,054, ,595,280 Auxiliary services 636, ,621,482 58, ,316,620 Operations and maintenance - 4,359,522 2,127, ,540 7,441,298 Institutional support 7,990, ,238,920-45,225-67,000 1,646,920 21,988,402 Scholarships, grants, waivers 782, ,886 Total expenditures 34,113,138 4,359,522 2,127,236 12,238,920 5,932,752 16,331,411-67,000 3,089,267 78,259,246 Net transfers (941,890) (673,767) 673, , , FUND BALANCES, JUNE 30, 2016 $ 1,632,419 $ 816,590 $ 5,442,193 $ 1,367,590 $ 5,743,241 $ 6,960,116 $ 14,387,453 $ 90,744 $ 4,247,658 $ 40,688,004 See accompanying independent auditor's report. 79.

108 Uniform Financial Statement No. 2 - Summary of Capital Assets and Long Term Debt Year Ended June 30, 2016 Balance Balance June 30, 2015 Additions Deletions June 30, 2016 CAPITAL ASSETS Land $ 514,354 $ - $ - $ 514,354 Land improvements 15,181, ,560-16,113,627 Buildings 61,168, ,168,767 Building improvements 21,765,681 1,160,627-22,926,308 Equipment 8,562, ,535 (263,482) 8,601,014 Technology 2,230, ,230,181 Construction in progress 668,221 1,943,424 (2,120,800) 490,845 Total 110,091,232 4,338,146 (2,384,282) 112,045,096 Less accumulated depreciation (42,621,294) (3,704,800) 244,788 (46,081,306) NET CAPITAL ASSETS $ 67,469,938 $ 633,346 $ (2,139,494) $ 65,963,790 LONG TERM DEBT Capital leases payable $ 2,081,208 $ 1,101,510 $ (1,479,697) $ 1,703,021 Notes payable 814,286 - (171,429) 642,857 Bonds payable 30,395,000 9,710,000 (10,445,000) 29,660,000 Compensated absences 1,182,582 1,168,688 (1,182,582) 1,168,688 TOTAL LONG TERM DEBT $ 34,473,076 $ 11,980,198 $ (13,278,708) $ 33,174,566 The College had no tax anticipation warrants or notes outstanding at June 30, 2016 See accompanying independent auditor's report. 80.

109 Uniform Financial Statement No. 3 - Operating Funds Revenues and Expenditures Year Ended June 30, 2016 OPERATING REVENUES BY SOURCE Local government revenue Local taxes 16,188,654 Operations and Total Education Maintenance Operating Fund Fund Funds $ $ 4,197,983 $ 20,386,637 Tuition chargeback revenue Corporate personal property replacement tax 926, ,741 1,076,476 Total local government 17,115,389 4,347,724 21,463,113 State government ICCB credit hour grants 800, , ,863 ICCB equalization grant 50,000-50,000 ICCB CTE allocation Total state government 850, ,435 1,046,863 Federal government Other 24,972-24,972 Total federal government 24,972-24,972 Student tuition and fees Tuition 15,507,920-15,507,920 Fees 1,125, ,767 1,553,998 Total student tuition and fees 16,633, ,767 17,061,918 Other sources Facilities revenue - 37,910 37,910 Investment revenue 148,579 1, ,187 Other 294,366 26, ,248 Total other sources 442,945 66, ,345 Total revenue 35,066,885 5,039,326 40,106,211 Less non-operating items Tuition chargeback revenue ADJUSTED REVENUE $ 35,066,885 $ 5,039,326 $ 40,106,211 (Continued) 81.

110 Uniform Financial Statement No. 3 - Operating Funds Revenues and Expenditures Year Ended June 30, 2016 OPERATING EXPENDITURES Operations and Total Education Maintenance Operating Fund Fund Funds By program Instruction $ 18,216,918 $ - $ 18,216,918 Academic support 3,811,673-3,811,673 Student services 2,445,218-2,445,218 Public services 229, ,955 Auxiliary services 636, ,151 Tuition chargeback 782, ,886 Institutional support 7,990,337-7,990,337 Operations and maintenance - 4,359,522 4,359,522 Total expenditures 34,113,138 4,359,522 38,472,660 Less non-operating items: Tuition chargeback (782,886) - (782,886) Adjusted expenditures $ 33,330,252 $ 4,359,522 $ 37,689,774 By object Salaries $ 25,727,009 $ 1,658,537 $ 27,385,546 Employee benefits 3,235, ,154 3,647,941 Contractual services 1,135, ,138 1,253,076 General materials and supplies 1,416, ,259 1,608,815 Conference and meeting expenses 404,282 2, ,425 Fixed charges 128, , ,926 Utilities - 1,564,508 1,564,508 Capital outlay 234,542 34, ,558 Other 1,830,715 1,150 1,831,865 Total expenditures 34,113,138 4,359,522 38,472,660 Less non-operating items: Tuition chargeback (782,886) - (782,886) Adjusted expenditures $ 33,330,252 $ 4,359,522 $ 37,689,774 See accompanying independent auditor's report. 82.

111 Uniform Financial Statement No. 4 - Restricted Purposes Fund Revenues and Expenditures Year Ended June 30, 2016 REVENUES BY SOURCE State government ICCB - Adult education and family literacy $ 161,567 Illinois Student Assistance Commission 333,063 Illinois State Board of Education 52,119 Other 393,252 Total state government 940,001 Federal government U.S. Department of Education 14,594,358 U.S. Department of Health and Human Services - Other 536,623 Total federal government 15,130,981 Other sources Investment income 117 Other 221,860 Total other sources 221,977 TOTAL RESTRICTED PURPOSES FUND REVENUES $ 16,292,959 EXPENDITURES BY PROGRAM Instruction $ 475,274 Academic support 305,671 Student services 14,392,199 Public service/continuing education 1,054,055 Auxiliary services 58,987 Operations and maintenance - Institutional support 45,225 TOTAL EXPENDITURES BY PROGRAM $ 16,331,411 EXPENDITURES BY OBJECT Salaries 1,082,057 Employee benefits 190,496 Contractual services 145,193 Student financial aid 14,259,392 General materials and supplies 219,024 Travel and conference/meeting expenses 12,927 Fixed charges 30,278 Utilities 3,003 Capital outlay 61,862 Other 327,179 TOTAL EXPENDITURES BY OBJECT $ 16,331,411 See accompanying independent auditor's report. 83.

112 Uniform Financial Statement No. 5 - Current Funds - Expenditures by Activity Year Ended June 30, 2016 INSTRUCTION $ 19,179,999 ACADEMIC SUPPORT Library center 979,884 Educational media services 527,191 Academic administration and planning 1,588,126 Other 1,022,143 Total academic support 4,117,344 STUDENT SERVICES SUPPORT Admissions and records 627,100 Counseling and career services 1,291,174 Financial aid administration 14,689,831 Social and cultural development 90,082 Other 139,230 Total student services support 16,837,417 PUBLIC SERVICE/CONTINUING EDUCATION Community education 507,974 Customized training (instructional) 2,707,221 Community services 221,603 Other 158,482 Total public service/continuing education 3,595,280 AUXILIARY SERVICES 4,316,620 OPERATIONS AND MAINTENANCE OF PLANT Maintenance 656,982 Custodial services 1,006,071 Grounds 389,528 Campus security 937,289 Utilities 1,564,508 Administration 365,154 Other 394,530 Total operations and maintenance of plant 5,314,062 INSTITUTIONAL SUPPORT Executive management 1,442,451 Fiscal operations 1,727,709 Community relations 1,405,791 Administrative support services 695,875 Board of Trustees 34,261 General institution 2,169,310 Administrative data processing 2,320,000 Other (45,915) Total institutional support 9,749,482 SCHOLARSHIPS, STUDENTS GRANTS, AND WAIVERS 782,886 TOTAL CURRENT FUNDS EXPENDITURES $ 63,893,090 NOTE: Current funds include the Education, Operations and Maintenance, Auxiliary Enterprise, Restricted Purposes, Audit, and Liability Protection and Settlement funds. See accompanying independent auditor's report. 84.

113 Certification of Chargeback Reimbursement For Fiscal Year 2017 ALL FISCAL YEAR 2016 NONCAPITAL AUDITED OPERATING EXPENDITURES FROM THE FOLLOWING FUND: 1 Education Fund $ 33,878,596 2 Operations and Maintenance Fund 4,240,370 3 Restricted Operation and Maintenance Fund 215,490 4 Bond and Interest Fund 1,362,682 5 Public Building Commission Rental Fund - 6 Restricted Purposes Fund 10,217,215 7 Audit Fund 67,000 8 Liability, Protection and Settlement Fund 3,056,862 9 Auxiliary Enterprises Fund (subsidy only) 211, TOTAL NONCAPITAL EXPENDITURES $ 53,249, Depreciation on capital outlay expenditures (equipment, buildings, fixed equipment paid) from sources other than state and federal funds 3,704, TOTAL COSTS INCLUDED 56,954, Total certified semester credit hours for FY , PER CAPITA COST All FY2015 state and federal operating grants for noncapital expenditures, except ICCB grants - * 16 FY2016 state and federal grants per semester credit hour * - 17 District's averate ICCB grant rate (excluding equalization grants) for FY2016 * - 18 District's student tuition and fee rate per semester credit hour for FY2017 * - 19 Chargeback reimbursement per semester credit hour $ - * - Awaiting final amounts from ICCB 85.

114 Independent Auditor s Report To the Board of Trustees Lincoln Land Community College- Community College District #526 Springfield, Illinois Report on the Financial Statements We have audited the accompanying balance sheets of the Lincoln Land Community College Community College District #526 (the College) State Adult Education (State Basic and Performance) Grants (Grant Programs), as of June 30, 2016 and the related statements of revenues, expenses, and changes in net position for the year then ended, and the related notes to the financial statements, which collectively comprise the Grant Programs financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the guidelines of the Illinois Community College Board Fiscal Management Manual. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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 opinions. 86.

115 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the College s State Adult Education (State Basic and Performance) Grants as of June 30, 2016, and the respective revenues, expenses, and changes in net position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the financial statements present only the College s State Adult Education (State Basic and Performance) and do not purport to, and do not, present fairly the financial position of Lincoln Land Community College Community College District #526, as of June 30, 2016, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. Other Matters Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Grant Programs financial statements. The supplementary information included on page 92 and the background information are presented for purposes of additional analysis and are not a required part of the financial statements. The supplementary information included on page 92 is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information included on page 92 is fairly stated, in all material respects, in relation to the financial statements as a whole. The background information has not been subjected to the auditing procedures applied in the audit of the financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Report on Other Legal and Regulatory Requirements In accordance with Government Auditing Standards, we have also issued our report dated October 10, 2016 on our consideration of the Grant Programs internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Grant Programs internal control over financial reporting and compliance. Crowe Horwath LLP Springfield, Illinois October 10,

116 Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Grant Program Financial Statements Performed in Accordance With Government Auditing Standards To the Board of Trustees Lincoln Land Community College- Community College District #526 Springfield, Illinois We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States and the guidelines of the Illinois Community College Board Fiscal Management Manual, the financial statements of the Lincoln Land Community College Community College District #526 (the College) State Adult Education (State Basic and Performance) Grants (Grant Programs) as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Grant Programs financial statements, and have issued our report thereon dated October 10, The financial statements present only the College s Grant Programs and do not purport to, and do not, present fairly the financial position of the College, as of June 30, 2016, and the changes in its financial position for the year then ended. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the College s internal control over financial reporting (internal control) of the Grant Programs to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the College s internal control of the Grant Programs. Accordingly, we do not express an opinion on the effectiveness of the College s internal control of the Grant Programs. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Grant Programs 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. 88.