COUNTY OF SAN JOAQUIN STOCKTON, CALIFORNIA FINANCIAL STATEMENTS WITH SUPPLEMENTAL INFORMATION FOR THE YEAR ENDED JUNE 30, 2010 AND INDEPENDENT AUDITOR'S REPORT
FINANCIAL STATEMENTS WITH SUPPLEMENTAL INFORMATION For the Year Ended June 30, 2010 TABLE OF CONTENTS Page Independent Auditor's Report 1-2 Management's Discussion and Analysis 3-7 Basic Financial Statements: Statement of Net Assets 8 Discretely Presented Component Unit - Delta College Foundation - Statement of Net Assets 9 Statement of Revenues, Expenses and Change in Net Assets 10 Discretely Presented Component Unit - Delta College Foundation - Statement of Revenues, Expenses and Change in Net Assets 11 Statement of Cash Flows 12-13 Discretely Presented Component Unit - Delta College Foundation - Statement of Cash Flows 14 Notes to Financial Statements 15-38 Required Supplementary Information: Schedule of Other Postemployment Benefits (OPEB) Funding Progress 39 Supplemental Information: Independent Auditor's Report on Supplemental Information 40 Organization 41 Schedule of Expenditures of Federal Awards 42-43 Schedule of State Financial Awards 44-45 Schedule of Workload Measures for State General Apportionment 46 Reconciliation of Annual Financial and Budget Report (CCFS-311) with Audited Financial Statements 47 Notes to Supplemental Information 48
FINANCIAL STATEMENTS WITH SUPPLEMENTAL INFORMATION For the Year Ended June 30, 2010 TABLE OF CONTENTS Page Independent Auditor's Report on State Compliance Requirements 49-50 Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 51-52 Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 53-54 Findings and Recommendations: Schedule of Audit Findings and Questioned Costs 55 Summary of Findings and Recommendations 56-60 Summary Schedule of Prior Audit Findings 61-66
San Joaquin Delta Community College District Management's Discussion and Analysis Fiscal Year Ending June 30, 2010 This section of San Joaquin Delta Community College District's (the "District") annual financial report presents District management s discussion and analysis of the District's financial performance during the fiscal year ended June 30, 2010. This is prepared in compliance with reporting standards required for public colleges and universities. Responsibility for the completeness and accuracy of this information rests with the District's management. In June 1999, the Governmental Accounting Standards Board (GASB) Codification Section (Cod. Sec.) 2200.101, which established a new reporting format for annual financial statements of governmental entities. In November 1999, GASB issued Cod. Sec. C05.101, which applies these reporting standards to public colleges and universities such as San Joaquin Delta Community College District. The California Community Colleges Chancellor's Office has recommended that all State community colleges follow the Business-Type Activity (BTA) model for financial statement reporting purposes. USING THIS REPORT As required by generally accepted accounting principles, the annual report consists of three basic financial statements that provide information on the District's activities as a whole: the Statement of Net Assets, the Statement of Revenues, Expenses, and Change in Net Assets, and the Statement of Cash Flows. The focus of the Statement of Net Assets is designed to be similar to bottom line results for the District. This statement combines and consolidates current financial resources (net short-term spendable resources) with capital assets and long-term obligations. The Statement of Revenues, Expenses, and Change in Net Assets focuses on the costs of our operational activities (which are supported mainly by the Program-Based Funding described below). This approach is intended to summarize and simplify the user's analysis of the cost of various services to students and to the public. The Statement of Cash Flows provides an analysis of the sources and uses of cash within the operations of the District. The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. The following discussion and analysis provides an overview of the District's financial activity. FINANCIAL HIGHLIGHTS The District's primary funding source is from the State of California pursuant to the funding provisions of SB 361 as incorporated in the interim regulations of Title 5 of the California Code of Regulations, Sections 58770 ff, and provisions of Item 6870-101-0001 of the Budget Act of 2006. SB 361 funding is comprised of State apportionment, local property taxes, and student enrollment fees. The primary basis of this apportionment is the calculation of Full- Time Equivalent Students (FTES). The Actual Credit FTES were 16,458 and Non-Credit FTES were 451 totaling Actual FTES of 16,909 as reported on the annual attendance report. The 2009-10 Budget Act revision Assembly Bill X4 1, included a provision authorizing the Chancellor to adjust district s base workload measures commensurate with reductions in general apportionment revenues. This workload adjustment aligns FTES workload with the reduced revenues provided to districts by the State in the 2009-10 fiscal year. These adjustments translated to a proportional 3.39% reduction for each district in the system. The District s beginning based FTES was 16,567, reduced by -664 to arrive at a revised base of 15,903. The District served an additional 1,006 unfunded FTES to arrive at the annual amount of 16,909 FTES for 2009-10. The District s apportionment revenue was reduced by approximately $2.2 million as a result of the lower FTES funding. In response to this mid-year budget reduction by the State, the District took a series of corrective actions. A Supplemental Executive Retirement Plan (SERP) was offered which generated a budget savings of approximately $4 million. Further, other vacancies were temporarily frozen with some ultimately eliminated. The District reduced other operational expenditures, and immediately began planning for the impact upon the 2010-11 budget. As a result of these and other District actions the 2009-10 budget year produced a surplus and the 2010-2011 adopted budget reflected a balanced budget. 3
The District ended the year with a General Fund balance of $10,623,023, an increase of $2,647,457 from the previous year. The increase in Fund Balance was a result from internal budget savings. The California Community Colleges Chancellor's Office requires reserve levels of five percent of expenditures be set aside for economic uncertainties. The District Board policy maintains this requirement and strives to improve the reserve level past the five percent minimum whenever possible. The primary expenditures for all funds of the District are for the salaries and benefits of Academic, Classified, and Administrative employees. These costs decreased over the 2008-09 fiscal year by $8,861,206. This decrease reflects an overall reduction in force due to State revenue reduction. The District provides student financial aid to qualifying students of the District. During the fiscal year, approximately $31 million in direct grants was provided to our students. Additionally, enrollment fee waivers and other discounts granted to students totaled $6,912,798. Measure L General Obligation bond program completed its sixth year with cumulative expenditures of $148,590,266. Projects completed on the main Stockton campus include the new student services structure, major renovation to the library and new athletics facilities. Close to completion are a state of the art data center and central plant upgrade. A major project beginning in the fiscal year was a new math and science complex. In addition, off site efforts at Manteca are underway and the South Campus at Mountain House was opened to serve students this year. 4
FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE Condensed financial information is as follows: NET ASSETS AS OF JUNE 30, 2010 (in thousands) ASSETS 2010 2009 Change % Change Current Assets Cash, investments and short-term receivables $ 47,525 $ 51,049 $ (3,524) -6.9% Inventory and other assets 2,228 1,718 510 29.7% Total Current Assets 49,753 52,767 (3,014) -5.7% Noncurrent Assets Other noncurrent assets 82,611 104,966 (22,355) -21.3% Capital assets (net of depreciation) 193,319 163,906 29,413 17.9% Total Noncurrent Assets 275,930 268,872 7,058 2.6% Total Assets $ 325,683 $ 321,639 $ 4,044 1.3% LIABILITIES Current Liabilities Accounts payable and accrued liabilities $ 14,111 $ 20,472 $ (6,361) -31.1% Deferred revenue 3,642 2,937 705 24.0% Amounts held in trust for others 8,378 3,878 4,500 116.0% Current portion of long-term obligations 14,906 14,615 291 2.0% Total Current Liabilities 41,037 41,902 (865) -2.1% Long-term obligations 186,757 186,100 657 0.4% Total Liabilities 227,794 228,002 (208) -0.1% NET ASSETS Invested in capital assets 104,678 82,813 21,865 26.4% Restricted for capital projects and debt service 1,303 17,328 (16,025) -92.5% Restricted for other special purposes 1,566 1,987 (421) -21.2% Unrestricted (9,658) (8,491) (1,167) 13.7% Total Net Assets 97,889 93,637 4,252 4.5% Total Liabilities and Net Assets $ 325,683 $ 321,639 $ 4,044 1.3% This schedule has been prepared from the District's Statement of Net Assets (page 8), which is presented on an accrual basis of accounting whereby assets are capitalized and depreciated. Cash investments and short-term receivables consist primarily of funds held at various financial institutions and in the San Joaquin County Treasury. The changes in the cash position are explained in the Statement of Cash Flows (pages 12-13). Long-term obligations consist of the General Obligation Bonds, Series 2005A, Series 2005B and the 2006 General Obligation Refunding Bonds. Capital assets are the historical value (original costs) of land, buildings, construction in progress, and equipment, less accumulated depreciation. Total additions, net of depreciation, amounted to $30,478,404. Many of the unrestricted net assets have been designated by the Board or by contracts for such purposes as Federal and State grants, outstanding commitments on contracts, and general reserves for the ongoing financial health of the District. 5
OPERATING RESULTS FOR THE YEAR ENDED JUNE 30, 2010 (in thousands) 2010 2009 Change % Change Operating Revenues Tuition and fees $ 5,861 $ 5,190 $ 671 12.9% Grants and contracts 49,114 42,572 6,542 15.4% Auxiliary enterprise sales and charges 7,694 9,380 (1,686) -18.0% Total Operating Revenues 62,669 57,142 5,527 9.7% Operating expenses Salaries and benefits 82,517 91,379 (8,862) -9.7% Supplies and maintenance 53,348 50,754 2,594 5.1% Depreciation 4,796 4,090 706 17.3% Total Operating Expenses 140,661 146,223 (5,562) -3.8% Loss on Operations (77,992) (89,081) 11,089-12.4% Non-operating Revenues and (Expenses) State apportionments 49,009 49,277 (268) -0.5% Property taxes 25,038 26,880 (1,842) -6.9% State revenues 2,865 2,641 224 8.5% Interest income 905 3,201 (2,296) -71.7% Interest expense (10,790) (10,199) (591) 5.8% Other non-operating revenue 2,879 6,873 (3,994) -58.1% Total Non-operating Revenue 69,906 78,673 (8,767) -11.1% Other Revenues State, capital income 439 742 (303) -40.8% Local revenues, capital 11,899 11,582 317 2.7% Total Other Revenues 12,338 12,324 14 0.1% Net Increase (Decrease) in Net Assets $ 4,252 $ 1,916 $ 2,336 121.9% This schedule has been prepared from the Statement of Revenues, Expenses and Change in Net Assets presented on page 10. Grant and contract revenues relate to student financial aid, as well as specific Federal and State grants received for programs serving the students of the District. These grant and program revenues are restricted as to the allowable expenses related to the programs. A reduction in State capital income was due to the State not allocating funds for Scheduled Maintenance or Instructional Capital Outlay block grants in 2009-10. The interest income is primarily the result of cash held with the San Joaquin County Treasurer. The interest expense relates to interest on debt and notes payable. The District is recording the depreciation expense related to capital assets. The detail of the changes in capital assets for the year is included in the notes to the financial statements as Note 4. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2010 (in thousands) Cash Provided by (Used in) 2010 2009 Change % Change Operating activities $(69,667) $(78,932) $ 9,265-11.7% Noncapital financing activities 83,239 75,287 7,952 10.6% Capital financing activities (40,059) 39,520 (79,579) -201.4% Investing activities 824 2952 (2,128) -72.1% Net Increase (Decrease) in Cash (25,663) 38,827 (64,490) -166.1% Cash, Beginning of Year 133,270 94,443 38,827 41.1% Cash, End of Year $107,607 $133,270 $(25,663) -19.3% The Statement of Cash Flows provides information about cash receipts and payments during the year. This statement also assists users in assessing the District's ability to meet its obligations as they come due and its need for external financing. 6
The primary operating receipts are student tuition and fees, Federal and State grants, and contracts. The primary operating expense of the District is the payment of salaries and benefits to instructional and classified support staff. While State apportionment and property taxes are the primary source of noncapital related revenue, GASB accounting standards require that this source of revenue is shown as non-operating revenue as it comes from the general resources of the State and not from the primary users of the colleges' programs and services (students). The District depends upon this funding as the primary source of funds to continue the current level of operations. The significant change in Capital financing activities is due to the cash provided by the General Obligation Bond, Series B Issuance in prior year 2008-09 of 95,228,609 that netted with capital uses to produce a positive cash flow as compared to the general capital financing uses in the current year 2009-10. GENERAL FUND BUDGETARY HIGHLIGHTS Over the course of the year, the District revised the annual operating budget as it addressed unexpected changes in revenues and expenditures. While the District's final budget for the General Fund anticipated that expenditures would exceed revenues by $2,520,604 and the general reserve would be required to cover the deficit, the actual results for the year generated a savings of $2,647,457 in net operating results. District-wide student enrollment demand continues to increase however due to the reduced FTES funding from the state the District has cut back on the number of sections offered. Not all of the FTES generated in the 2009-10 fiscal year was funded through the State apportionment funding process. The District has built a schedule of classes for 2010-11 to match the level of funding. The District was able to maintain a reserve level in the General Unrestricted Fund well within the guidelines set by the California Community Colleges Chancellor's Office and the minimum reserve level set by the San Joaquin Delta Community College District Board of Trustees. ECONOMIC FACTORS AFFECTING THE FUTURE OF SAN JOAQUIN DELTA COMMUNITY COLLEGE DISTRICT The District's 2010-11 General Fund Budget is based upon the following assumptions: There will be no FTES growth funding from the state for 2010-11. There will be a negative state COLA of.38%. There will not be a state-wide deficit factor on apportionments in the 2010-11 fiscal year. Any state-wide apportionment deficit factor that may yet be applied to the 2009-10 fiscal year will be restored in the 2010-11 funding base. Funding reductions to categorical programs will result in reduced expenditures in those programs serving 16,672 FTES which includes zero percent growth. CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, students, investors, and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have questions about this report or need any additional financial information, contact the District Fiscal Services Office at: San Joaquin Delta Community College District at 5151 Pacific Avenue, Stockton, California 95207-6370. 7
STATEMENT OF NET ASSETS June 30, 2010 ASSETS Current assets: Cash and cash equivalents (Note 2) $ 29,105,619 Accounts receivable, net (Note 3) 18,419,826 Prepaid expenses 403,681 Stores inventory 1,823,828 Total current assets 49,752,954 Noncurrent assets: Restricted cash, cash equivalents and investments (Note 2) 78,501,254 Restricted investments held in trust (Note 2) 15,000 Prepaid expenses 4,095,470 Capital assets, net (Note 4) 193,318,650 Total noncurrent assets 275,930,374 Total assets $ 325,683,328 LIABILITIES Current liabilities: Accounts payable $ 11,062,087 Deferred revenue (Note 5) 3,642,183 Claims liability (Note 9) 2,778,000 Due to the Foundation 270,561 Amounts held in Trust (Note 2) 8,377,454 Compensated absences payable - current portion (Note 7) 2,189,198 Premium on general obligation bonds - current portion (Note 7) 1,822,196 Long-term debt - current portion (Note 7) 10,895,000 Total current liabilities 41,036,679 Noncurrent liabilities: Premium on general obligation bonds (Note 7) 15,382,712 Long-term debt - noncurrent portion (Note 7) 171,374,719 Total noncurrent liabilities 186,757,431 Total liabilities 227,794,110 Commitments and contingencies (Note 12) NET ASSETS Invested in capital assets, net of related debt 104,678,263 Restricted for capital projects and debt service 1,302,824 Restricted for other special purposes 1,566,109 Unrestricted (9,657,978) Total net assets 97,889,218 Total liabilities and net assets $ 325,683,328 The accompanying notes are an integral part of these financial statements. 8
DISCRETELY PRESENTED COMPONENT UNIT - DELTA COLLEGE FOUNDATION (A Nonprofit Organization) STATEMENT OF NET ASSETS June 30, 2010 ASSETS Cash and cash equivalents (Note 2) $ 708,631 Investments (Note 2) 1,444,881 Investments related to split interest agreements (Note 2) 52,164 Accounts receivable 11,822 Due from the District 270,561 Total assets $ 2,488,059 LIABILITIES Accounts payable and accrued expenses $ 9,000 Liability under split interest agreement 32,960 Total liabilities 41,960 NET ASSETS Net assets: Unrestricted (172,150) Temporarily restricted 2,618,249 Total net assets 2,446,099 Total liabilities and net assets $ 2,488,059 The accompanying notes are an integral part of these financial statements. 9
STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS June 30, 2010 Operating revenues: Tuition and fees $ 12,774,432 Less: Scholarship discounts and allowances (6,912,798) Net tuition and fees 5,861,634 Grants and contracts, non-capital: Federal 32,938,683 State 16,174,912 Auxiliary enterprise sales and charges 7,694,188 Total operating revenues 62,669,417 Operating expenses (Note 14): Salaries and benefits (Notes 10 and 11) 82,517,293 Supplies, materials, and other operating expenses and services (Note 14) 52,302,086 Equipment, maintenance and repairs (Note 14) 1,046,172 Depreciation (Notes 4 and 14) 4,796,464 Total operating expenses 140,662,015 Loss from operations (77,992,598) Non-operating revenues (expenses): State apportionment, non-capital 49,008,791 Local property taxes (Note 8) 25,038,180 State taxes and other revenues 2,865,283 Investment income, noncapital 822,550 Investment income, capital 82,107 Interest expense on capital asset-related debt, net (10,790,149) Other non-operating revenues 2,879,303 Total non-operating revenues (expenses) 69,906,065 Loss before capital revenues (8,086,533) Capital revenues: Grants and gifts, capital 439,579 Local property taxes and revenues (Note 8) 11,898,659 Total capital revenues 12,338,238 Increase in net assets 4,251,705 Net assets, July 1, 2009 93,637,513 Net assets, June 30, 2010 $ 97,889,218 The accompanying notes are an integral part of these financial statements. 10
DISCRETELY PRESENTED COMPONENT - DELTA COLLEGE FOUNDATION (A Nonprofit Organization) STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS For the Year Ended June 30, 2010 Temporarily Permanently Unrestricted Restricted Restricted Total Revenues: Contributions $ 28,027 $ 46,043 $ 74,070 Special events 2,188 105,492 107,680 Interest and dividend income 6,574 35,146 41,720 Realized and unrealized gains on investments 112,154 112,154 Other income 598 598 Net assets released from restrictions by payments 156,349 (156,349) Total revenues 193,736 142,486 336,222 Expenses: Grants and related activities 86,947 86,947 Fundraising expenses 72,826 72,826 Operating expenses 29,486 29,486 Total expenses 189,259 189,259 Increase in net assets 4,477 142,486 146,963 Net assets, July 1, 2009, as previously reported (176,627) 1,464,169 $ 1,011,594 2,299,136 Restatement (Note 15) 1,011,594 (1,011,594) Net assets, July 1, 2009, as restated (176,627) 2,475,763 2,299,136 Net assets, June 30, 2010 $ (172,150) $ 2,618,249 $ - $ 2,446,099 The accompanying notes are an integral part of these financial statements. 11
STATEMENT OF CASH FLOWS For the Year Ended June 30, 2010 Cash flows from operating activities: Tuition and fees $ 7,558,706 Federal grants and contracts 33,032,852 State grants and contracts 16,049,960 Payments to employees (79,003,518) Payments to suppliers and vendors (24,664,438) Payments to students (30,335,023) Auxiliary enterprises sales and charges 7,694,188 Net cash used in operating activities (69,667,273) Cash flows from noncapital financing activities: State appropriations 46,511,285 Local property taxes 25,038,180 State taxes and other revenues 4,109,394 Student organization agency receipts 4,499,489 Other non-operating revenues 3,080,225 Net cash provided by noncapital financing activities 83,238,573 Cash flows from capital and related financing activities: Local revenue for capital purposes 11,898,659 State apportionments for capital purposes 439,579 Net premium and bond issuance costs on debt (1,542,825) Purchase of capital assets (35,274,868) Proceeds from sale of capital assets 1,066,058 Principal paid on capital debt (9,494,146) Interest paid on capital debt, net (2,089,516) Interest on capital investments 82,107 Short term loans (5,144,281) Net cash used in capital and related financing activities (40,059,233) Cash flows from investing activities: Interest income 822,550 Purchase of investments 1,925 Net cash provided by investing activities 824,475 Net decrease in cash and cash equivalents (25,663,458) Cash balance, beginning of year 133,270,331 Cash balance, end of year $ 107,606,873 12
STATEMENT OF CASH FLOWS For the Year Ended June 30, 2010 Reconciliation of loss from operations to net cash used in operating activities: Loss from operations $ (77,992,598) Adjustments to reconcile loss from operations to net cash used in operating activities: Depreciation expense 4,796,464 Changes in assets and liabilities: Receivables, net 920,164 Prepaid expenses (75,544) Inventories (433,922) Accounts payable (1,971,265) Deferred revenue 769,822 Claims liability 754,845 Compensated absences (323,362) Other liabilities 3,888,123 Net cash used in operating activities $ (69,667,273) The accompanying notes are an integral part of these financial statements. 13
DISCRETELY PRESENTED COMPONENT UNIT - DELTA COLLEGE FOUNDATION (A Nonprofit Organization) STATEMENT OF CASH FLOWS For the Year Ended June 30, 2010 Cash flows from operating activities: Increase in net assets $ 146,963 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Change in fair value of investments (112,154) Decrease in due from San Joaquin Delta Community College 144,281 Decrease in accounts receivable 2,544 Decrease in accounts payable and accrued liabilities (136,768) Decrease in liability under split-interest agreement (6,875) Net cash provided by operating activities 37,991 Cash flows provided by investing activities: Increase in investment securities 5,817 Net increase in cash and cash equivalents 43,808 Cash and cash equivalents - beginning of year 664,823 Cash and cash equivalents - end of year $ 708,631 Noncash capital and related financing activities: Accretion of interest $ 8,700,633 The accompanying notes are an integral part of these financial statements. 14
NOTES TO BASIC FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity San Joaquin Delta Community College District (the "District") is a political subdivision of the State of California and provides educational services to the local residents of the surrounding area. While the District is a political subdivision of the State, it is not a component unit of the State in accordance with the provisions of Governmental Accounting Standards Board (GASB) Codification Section (Cod. Sec) 2100.101. The District is classified as a state instrumentality under Internal Revenue Code Section 115. The decision to include potential component units in the reporting entity was made by applying the criteria set forth in generally accepted accounting principles (GAAP) and GASB Cod. Sec. 2100.101 as amended by GASB Cod. Sec. 2100.138. The three criteria for requiring a legally separate, tax-exempt organization to be presented as a component unit are the "direct benefit" criterion, the "entitlement/ability to access" criterion, and the "significance" criterion. The District identified Delta College Foundation (the "Foundation") as its potential component units. The Foundation is a nonprofit, tax-exempt organization dedicated to providing financial benefits generated from fundraising efforts and investments earnings to the District. The funds contributed by the Foundation to the District are significant to the District's financial statements. The District applied the criteria for identifying component units in accordance with GASB Cod. Sec. 2100.138 and therefore, the District has classified the Foundation as a component unit that will be discretely presented in the District's financial statements. Basis of Presentation GASB released Cod. Sec. 2200.101 in June 1999, which established a new reporting format for annual financial statements. In November 1999, GASB released Cod. Sec. C05.101 which applies the new reporting standards of GASB Cod. Sec. 2200.190-.191 to public colleges and universities. The GASB then amended those statements in June 2001 with updates to GASB Cod. Sec. 2200 and 2300. The District adopted and applied these new standards beginning in 2001-02 as required. In May 2002, the GASB released Cod. Sec. 2100.142, which amends GASB Cod. Sec. 2100.119-.140, to provide guidance for determining and reporting whether certain organizations are component units. The District adopted and applied this standard for the 2003-04 fiscal year as required. The District now follows the financial statement presentation required by the aforementioned provisions. This presentation provides a comprehensive, entitywide perspective of the District's assets, cash flows, and replaces the fund-group perspective previously required. 15
NOTES TO BASIC FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting For financial reporting purposes, the District is considered a special-purpose government engaged only in business-type activities. Under this model, the District's financial statements provide a comprehensive one-line look at its financial activities. Accordingly, the District's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. All significant intraagency transactions have been eliminated. The Foundation's financial statements are prepared on the accrual basis of accounting. Recognition of contributions is dependent upon whether the contribution is restricted or unrestricted. Net assets are classified on the Statement of Net Assets as unrestricted or temporarily restricted net assets based on the absence or existence of donor-imposed restrictions. The District records revenues when earned and expenses when a liability is incurred regardless of the timing of the related cash flow. The budgetary and financial accounts of the District are recorded and maintained in accordance with the Chancellor's Office's Budget and Accounting Manual. The District has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The District has elected to not apply FASB pronouncements issued after that date. Cash and Cash Equivalents For the purposes of the financial statements, cash equivalents are defined as financial instruments with an original maturity of three months or less. Funds invested in the San Joaquin County Treasury are considered cash equivalents. Restricted Cash, Cash Equivalents and Investments Cash that is externally restricted to make debt service payments, maintain sinking or reserve funds, or to purchase or construct capital or other noncurrent assets, is classified as non current assets in the statement of net assets. Fair Value of Investments The District records its investment in San Joaquin County Treasury at fair value. Changes in fair value are reported as revenue in the Statement of Revenues, Expenses and Changes in Net Assets. The fair value of investments, including the San Joaquin County Treasury external investment pool, at June 30, 2010 approximated their carrying value. The Foundation's investments are valued at fair market value based upon quoted market prices, when available, or estimates of fair value in the Statement of Net Assets and unrealized and realized gains and losses are included in the Statement of Revenues, Expenses and Change in Net Assets. 16
NOTES TO BASIC FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounts Receivable Accounts receivable consist of tuition and fee charges to students and auxiliary enterprise services provided to students, faculty and staff. Accounts receivable also include amounts due from the federal government, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the District's grants and contracts. The District provides for an allowance for uncollectible accounts as an estimation of amounts that may not be received. The allowance is based upon management's estimates and analysis. The allowance was estimated at $70,110 for the year ended June 30, 2010. Inventory Inventory consists of stores supplies, cafeteria food, textbooks and educational supplies. Except for bookstore inventories, which are valued using the retail method, inventories are stated at the lower of cost (first-in, first-out method) or market. Capital Assets Capital assets are recorded at cost at the date of acquisition or, if donated, at fair market value at the date of donation. For equipment, the District's capitalization policy included all items with a unit cost of $5,000 or more, and estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets ranging from 3 50 years depending on asset type. The District evaluates capital assets for financial impairment as events or changes in circumstances indicate that the carrying amounts of such assets may not be fully recoverable. Compensated Absences Compensated absence costs are accrued when earned by employees. Accumulated unpaid employee vacation benefits are recognized at year end as liabilities of the District. Accumulated Sick Leave Sick leave benefits are not recognized as liabilities of the District. The District's policy is to record sick leave as an operating expenditure or expense in the period taken since such benefits do not vest nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits for certain STRS and PERS employees, when the employee retires. 17
NOTES TO BASIC FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Deferred Revenue Revenues from Federal, State and local special projects and programs is recognized when qualified expenditures have been incurred. Tuition, fees and other support received but not earned are recorded as deferred revenue until earned. Net Assets The District's net assets are classified as follows: Invested in capital assets, net of related debt: This represents the District's total investment in capital assets, net of associated outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component invested in capital assets, net of related debt. Restricted net assets - expendable: Restricted expendable net assets include resources in which the District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties. Unrestricted net assets: Unrestricted net assets represent resources derived from student tuition and fees, State apportionments, 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 District, and may be used at the discretion of the governing board to meet current expenses for any purpose. When an expense is incurred that can be paid using either restricted or unrestricted resources, the District typically first applies the expense toward restricted resources, then to unrestricted resources. The Foundation's net assets are classified as follows: Unrestricted: Unrestricted net assets consist of all resources of the Foundation, which have not been specifically restricted by a donor. Temporarily restricted: Temporarily restricted net assets consist of cash and other assets received with donor stipulations that limit the use of the donated assets. When a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Revenues, Support, Expenses, and Change in Net Assets as net assets released from restriction. 18
NOTES TO BASIC FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Risk Management As more fully described in Note 9, the District is partially self-insured with regard to liability and workers' compensation claims. The amount of the outstanding liability at June 30, 2010 for liability and workers' compensation claims includes estimates of future claim payments for known cases as well as provisions for incurred but not reported claims and adverse development on known cases which occurred through that date. Outstanding claims which are expected to become due and payable within the subsequent fiscal year are reflected as an accounts and claims payable liability and the balance of the estimated liability is reflected as a current liability. State Apportionments Certain current year apportionments from the state are based on various financial and statistical information of the previous year. Prior year corrections due to the recalculation in February 2010 will be recorded in the year completed by the state. On-Behalf Payments GASB Cod. Sec. 2200.190-.191 requires that direct on-behalf payments for benefits and salaries made by one entity to a third party recipient for the employees of another, legally separate entity be recognized as revenue and expenditures by the employer government. The State of California makes direct on-behalf payments for retirement benefits to the State Teachers and Public Employees Retirement Systems on behalf of all Community Colleges in California. However, a fiscal advisory issued by the California Department of Education instructed districts not to record revenue and expenditures for these on-behalf payments. Classification of Revenue The District has classified its revenues as either operating or nonoperating revenues. Certain significant revenue streams relied upon for operations are recorded as nonoperating revenues, as defined by GASB Cod. Sec. Co5.101 including State appropriations, local property taxes, and investment income. Nearly all the District's expenses are from exchange transactions. Revenues and expenses are classified according to the following criteria: Operating revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship discounts and allowances, (2) sales and services of auxiliary enterprises, and (3) most Federal, State and local grants and contracts and Federal appropriations. Nonoperating revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources described in GASB Cod. Sec. Co5.101, such as State appropriations and investment income. 19
NOTES TO BASIC FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Scholarship Discounts and Allowances Student tuition and fee revenue are reported net of scholarship discounts and allowances in the statement of revenues, expenses and changes in net assets. Scholarship discounts and allowances represent the difference between stated charges for goods and services provided by the District and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants and other federal, state and nongovernmental programs, are recorded as operating revenues in the District's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the District has recorded a scholarship discount and allowance. 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. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Accordingly, actual results may differ from those estimates. New Financial Accounting Pronouncements The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments In March 2009, the GASB issued Governmental Accounting Standards Board Codification Section (GASB Cod. Sec.) 1000, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments (GASB Cod. Sec. 1000). This Statement is intended to incorporate the hierarchy of generally accepted accounting principles (GAAP) for state and local governments into the Governmental Accounting Standard's Board (GASB) authoritative literature. The "GAAP hierarchy" consists of the sources of accounting principles used in the preparation of financial statements of state and local governmental entities that are presented in conformity with GAAP, and the framework for selecting those principles. The adoption of this update did not have a material impact on the District's net assets, change in net assets and cash flows. 20
NOTES TO BASIC FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES New Financial Accounting Pronouncements Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards In March 2009, the GASB issued GASB Cod. Sec. 2250, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards (GASB Cod. Sec. 2250). The objective of this Statement is to incorporate into the GASB authoritative literature certain accounting and financial reporting guidance presented in the American Institute of Certified Public Accountants' Statement on Auditing Standards. This Statement addresses three issues not included in the authoritative literature that establishes accounting principles related party transactions, going concern considerations, and subsequent events. The presentation of principles used in the preparation of financial statements is more appropriately included in accounting and financial reporting standards rather than in the auditing literature. This Statement does not establish new accounting standards but rather incorporates the existing guidance (to the extent appropriate in a governmental environment) in the GASB standards. The adoption of this Statement did not have a material impact on the District's net assets, change in net assets and cash flows. 2. CASH, CASH EQUIVALENTS AND INVESTMENTS District cash, cash equivalents and investments at June 30, 2010, consisted of the following: Pooled Funds: Cash in County Treasury $ 34,584,874 Local Agency Investment Fund 49,234 Deposits: Cash on hand and in banks 670,394 Cash in revolving account 2,163,571 Cash held by Fiscal Agent 70,138,800 Total cash and cash equivalents 107,606,873 Less: restricted cash and cash equivalents: Cash held by Fiscal Agent 70,138,800 Cash held in trust 8,362,454 Total restricted cash and cash equivalents 78,501,254 Net cash and cash equivalents $ 29,105,619 Investments held in trust $ 15,000 21
NOTES TO BASIC FINANCIAL STATEMENTS 2. CASH, CASH EQUIVALENTS AND INVESTMENTS Cash in County Treasury In accordance with Education Code Section 41001, the District maintains substantially all of its cash in the San Joaquin County Treasury. The County pools and invests the cash. Those pooled funds are carried at fair value, which approximates cost. Because the District's deposits are maintained in a recognized pooled investment fund under the care of a third party and the District's share of the pool does not consist of specific, identifiable investment securities owned by the District, no disclosure of the individual deposits and investments or related custodial risk classifications is required. The District's deposits in the fund are considered to be highly liquid. Interest earned is deposited quarterly into participating funds. Any investment losses are proportionately shared by all funds in the pool. The San Joaquin County Treasurer has indicated that there are no derivatives in the pool as of June 30, 2010. Foundation cash and cash equivalents at June 30, 2010 consisted of the following: Cash in banks - restricted $ 385,762 Cash in County Treasury 322,869 Total cash and cash equivalents $ 708,631 Foundation investments at June 30, 2010 consisted of the following: Corporate bonds $ 158,052 Equity securities 900,593 Mutual funds 88,840 Municipal securities 52,029 U.S. Government obligations 245,367 Total investments $ 1,444,881 Pooled Funds - Local Agency Investment Fund The District places certain funds with the State of California's Local Agency Investment Fund (LAIF). The District is a voluntary participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California and the Pooled Money Investment Board. The State Treasurer's Office pools these funds with those of other governmental agencies in the state and invests the cash. The fair value of the District's investment in the pool is reported in the accompanying financial statements based upon the District's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The monies held in the pooled investments funds are not subject to categorization by risk category. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 22
NOTES TO BASIC FINANCIAL STATEMENTS 2. CASH, CASH EQUIVALENTS AND INVESTMENTS Pooled Funds - Local Agency Investment Fund Funds are accessible and transferable to the master account within twenty-four hours notice. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, and floating rate securities issued by Federal agencies, government-sponsored enterprises and corporations. LAIF is administered by the State Treasurer. This fund currently yields approximately 0.56% interest annually. LAIF investments are audited annually by the Pooled Money Investment Board and the State Controller's Office. Copies of this audit may be obtained from the State Treasurer's Office: 915 Capitol Mall; Sacramento, California 95814. The Pooled Money Investment Board has established policies, goals, and objectives to make certain that their goal of safety, liquidity and yield is not jeopardized. Cash with Fiscal Agent Cash with Fiscal Agent of $70,138,800 is held by a trustee for the improvement of campus facilities and debt service. Cash and Investments Held in Trust Cash and investments held in trust of $8,377,454 relates to agency funds held by the District on behalf of others. Custodial Credit Risk The California Government Code requires California banks and savings and loan associations to secure the District's deposits by pledging government securities as collateral. The market value of pledged securities must equal 110 percent of an agency's deposits. California law also allows financial institutions to secure an agency's deposits by pledging first trust deed mortgage notes having a value of 150 percent of an agency's total deposits and collateral is considered to be held in the name of the District. All cash held by financial institutions is entirely insured or collateralized. Cash balances held in banks are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). At June 30, 2010, the carrying amount of the District's cash on hand and in banks was $2,833,965 and the bank balance was $2,685,775. The bank balance amount insured by the FDIC was $500,000. The Foundation maintains substantially all of its cash in banks and are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). At June 30, 2010, the carrying amount and bank balance of the Foundation's cash in banks was $385,762. The bank balance amount insured by the FDIC was $265,681. 23
NOTES TO BASIC FINANCIAL STATEMENTS 2. CASH, CASH EQUIVALENTS AND INVESTMENTS Credit Risk Under provision of the District and Foundation's policies and in accordance with Sections 53601 and 53602 of the California Government code, the District and Foundation may invest in the following types of investments: Local agency bonds, notes or warrants within the state Securities of the U.S. Government or its agencies Certificates of Deposit with commercial banks Commercial paper Repurchase Agreements Interest Rate Risk The District and Foundation's investment policies do not limit cash and investment maturities as a means of managing their exposure to fair value losses arising from increasing interest rates. At June 30, 2010, the District and Foundation had no significant interest rate risk related to cash and investments held. Concentration of Credit Risk The District and Foundation do not place limits on the amount they may invest in any one issuer. At June 30, 2010, the District and Foundation had no concentration of credit risk. Foundation Investments The following presents information about the Foundation's assets and liabilities measured at fair value on a recurring basis as of June 30, 2010, and indicates the fair value hierarchy of the valuation techniques utilized by the Foundation to determine such fair value based on the hierarchy: Level 1 - Quoted market prices or identical instruments traded in active exchange markets. Level 2 - Significant other observable inputs such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable or can be corroborated by observable market data. Level 3 - Significant unobservable inputs that reflect a reporting entity's own assumptions about the methods that market participants would use in pricing an asset or liability. 24
NOTES TO BASIC FINANCIAL STATEMENTS 2. CASH, CASH EQUIVALENTS AND INVESTMENTS Foundation Investments The Foundation is required or permitted to record the following assets at fair value on a recurring basis: Description Fair Value Level 1 Level 2 Level 3 Investment securities $ 1,444,881 $ 1,081,010 $ 363,871 $ - Certain investments were classified as Level 2 as comparable investment securities were used to determine fair value. There were no changes in the valuation techniques used during the year ended June 30, 2010. The Foundation had no non recurring assets and no liabilities at June 30, 2010, which were required to be disclosed using the fair value hierarchy. 3. ACCOUNTS RECEIVABLE Accounts receivable at June 30, 2010 are summarized as follows: Federal $ 1,211,786 State 14,960,067 Local and other 2,318,083 18,489,936 Less allowance for doubtful accounts (70,110) 4. CAPITAL ASSETS Capital asset activity consists of the following: $ 18,419,826 Balance Balance July 1, June 30, 2009 Additions Deductions Transfers 2010 Non-depreciable: Land $ 8,926,574 $ 8,926,574 Construction in progress 101,908,763 $ 34,298,014 $ (1,015,718) $ (30,035,296) 105,155,763 Depreciable: Building improvements 109,433,569 22,262,529 131,696,098 Machinery and equipment 14,666,799 976,854 (671,880) 14,971,773 Works of art 6,000 6,000 Infrastructure 7,772,767 7,772,767 Total 234,941,705 35,274,868 (1,687,598) 268,528,975 Less accumulated depreciation: Building improvements (59,905,392) (3,558,047) (63,463,439) Machinery and equipment (11,130,009) (1,238,417) 621,540 (11,746,886) Total (71,035,401) (4,796,464) 621,540 (75,210,325) Capital assets, net $ 163,906,304 $ 30,478,404 $ (1,066,058) $ - $ 193,318,650 25
5. DEFERRED REVENUE SAN JOAQUIN DELTA COMMUNITY COLLEGE DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS Deferred revenue for the District consisted of the following: Deferred Federal and State revenue $ 1,865,029 Deferred tuition and student fees 1,580,119 Deferred local grant revenue and other 197,035 Total deferred revenue $ 3,642,183 6. TAX REVENUE ANTICIPATION NOTES (TRANS) Tax Revenue Anticipation Notes (TRANs) are short-term debt instruments. They are issued to eliminate cash flow deficiencies that result from fluctuations in revenue receipts and expenditure disbursements. A summary of the District's TRANs activity for the year ended June 30, 2010 is as follows: Outstanding Outstanding July 1, June 30, 2009 Additions Deletions 2010 Series 2009-2.0% Tax Revenue Anticipation Note $ - $ 13,155,000 $ 13,155,000 $ - 7. LONG-TERM LIABILITIES General Obligation Bonds During February 2005, the District issued the 2004 General Obligation Bonds in the amount of $90,000,000. The bonds mature beginning on August 1, 2007 through August 1, 2029, with interest yields ranging from 2.25 to 4.13 percent. At June 30, 2010, the principal outstanding was $23,725,000 and unamortized premium and issuance costs were $4,100,374 and $1,432,881, respectively. Premium and issuance costs are amortized over the life of the bonds as a component of interest expense on the bonds. The bonds are being used to finance the acquisition, construction and modernization of certain District property and facilities and to advance refund the 1995 and 2003 certificates of participation and to prepay the outstanding principal on the energy service contract lease agreement. $9,552,077 was placed in an irrevocable escrow account for the future redemption of the certificate of participation bonds. As the advance refunding has met the requirements of an in-substance defeasance, debt obligations outstanding of $9,245,000 for the bonds have been removed as long-term obligations of the District. The 1995 and 2003 certificates of participation have been paid in full. 26
7. LONG-TERM LIABILITIES NOTES TO BASIC FINANCIAL STATEMENTS General Obligation Bonds The annual payments required to amortize the 2004 General Obligation Bonds outstanding as of June 30, 2010, are as follows: Year Ending June 30, Principal Interest Total 2011 $ 2,700,000 $ 922,888 $ 3,622,888 2012 2,760,000 823,701 3,583,701 2013 2,850,000 723,663 3,573,663 2014 2,945,000 613,013 3,558,013 2015 3,040,000 494,913 3,534,913 2016-2020 4,550,000 1,435,738 5,985,738 2021-2025 2,130,000 928,013 3,058,013 2026-2030 2,750,000 346,294 3,096,294 $ 23,725,000 $ 6,288,223 $ 30,013,223 During June 2006, the District issued the 2006 General Obligation Refunding Bonds in the amount of $57,922,710. The bonds were issued as capital appreciation bonds, with the value of the capital appreciation bonds accreting $41,027,290, and an aggregate principal debt service balance of $98,950,000. The bonds mature beginning on August 1, 2006 through August 1, 2017, with interest yields ranging from 3.68 to 4.58 percent. At June 30, 2010, the principal outstanding was $38,374,624 and the reoffering premium of $10,568,900. The unamortized issuance costs at June 30, 2010 amounted to $737,142. The bonds are being used to advance refund a portion of the 2004 General Obligation Bonds. $57,952,165 was placed in an irrevocable escrow account for the future redemption of $55,265,000 of the $90,000,000 2004 General Obligation Bonds. As the advance refunding has met the requirements of an in-substance defeasance, debt obligations of $55,265,000 for the bonds have been removed as long-term obligations of the District. The aggregate difference in debt service between the refunded portion of debt and the debt associated with the 2006 General Obligation Refunding Bonds, reflect savings to the District of $3,359,663. As of June 30, 2010, the balance remaining in the escrow account was $48,943,527. 27
7. LONG-TERM LIABILITIES NOTES TO BASIC FINANCIAL STATEMENTS General Obligation Bonds The annual payments required to amortize the 2006 General Obligation Refunding Bonds outstanding as of June 30, 2010, are as follows: Year Ending June 30, Principal Interest Total 2011 $ 6,274,591 $ 1,110,409 $ 7,385,000 2012 6,353,958 1,446,042 7,800,000 2013 4,540,232 3,879,768 8,420,000 2014 4,218,534 4,436,466 8,655,000 2015 3,914,464 4,970,536 8,885,000 2016-2018 13,072,845 23,577,155 36,650,000 $ 38,374,624 $ 39,420,376 $ 77,795,000 During July 2008, the District issued the 2004 General Obligation Bonds, Series 2008 B, in the amount of $92,000,582. The bonds were issued as current interest bonds, with a value of $5,455,000, and capital appreciation bonds, with the value of the capital appreciation bonds accreting $137,189,418, and an aggregate principal debt service balance of $223,735,000. The bonds mature beginning on August 1, 2011 through August 1, 2032, with interest yields ranging from 3.00 to 8.70% percent. At June 30, 2010, the principal outstanding was $91,225,582 and unamortized premium and issuance costs were $2,535,634 and $2,204,819, respectively. Premium and issuance costs are amortized over the life of the bonds as a component of interest expense on the bonds. The bonds are being used to finance the acquisition, construction and modernization of certain District property and facilities. The annual payments required to amortize the 2004 General Obligation Bonds, Series 2008 B outstanding as of June 30, 2010, are as follows: Year Ending June 30, Principal Interest Total 2011 $ 810,000 $ 170,250 $ 980,250 2012 800,000 142,075 942,075 2013 415,000 120,813 535,813 2014 540,000 104,100 644,100 2015 725,000 76,525 801,525 2016-2020 14,797,444 13,401,156 28,198,600 2021-2025 34,146,219 38,378,781 72,525,000 2026-2030 26,668,737 51,131,263 77,800,000 2031-2033 12,323,182 34,361,818 46,685,000 $ 91,225,582 $ 137,886,781 $ 229,112,363 28
7. LONG-TERM LIABILITIES NOTES TO BASIC FINANCIAL STATEMENTS General Obligation Bonds Total Long-Term Debt Year Ending June 30, Principal Interest Total 2011 $ 9,784,591 $ 2,203,547 $ 11,988,138 2012 9,913,958 2,411,818 12,325,776 2013 7,805,232 4,724,244 12,529,476 2014 7,703,534 5,153,579 12,857,113 2015 7,679,464 5,541,974 13,221,438 2016-2020 32,420,289 38,414,049 70,834,338 2021-2025 36,276,219 39,306,794 75,583,013 2026-2030 29,418,737 51,477,557 80,896,294 2031-2033 12,323,182 34,361,818 46,685,000 Changes in Long-Term Debt $ 153,325,206 $ 183,595,380 $ 336,920,586 A schedule of changes in long-term debt for the year ended June 30, 2010 is as follows: Balance Balance Amounts July 1, June 30, Due Within 2009 Additions Deductions 2010 One Year General Obligation Bonds $ 162,819,352 $ (9,494,146) $ 153,325,206 $ 9,784,591 Premium on General Obligation Bonds 19,027,104 (1,822,196) 17,204,908 1,822,196 Compensated absences 2,512,560 (323,362) 2,189,198 2,189,198 Net OPEB (Note 11) 3,567,081 $ 7,115,314 (3,227,191) 7,455,204 Accreted interest 12,788,676 9,486,487 (785,854) 21,489,309 1,110,409 $ 200,714,773 $ 16,601,801 $ (15,652,749) $ 201,663,825 $ 14,906,394 8. PROPERTY TAXES All property taxes are levied and collected by the Tax Assessors of the following Counties: San Joaquin, Alameda, Sacramento, Calaveras, and Solano, and are paid upon collection to the various taxing entities including the District. Secured taxes are levied on July 1 and are due in two installments on November 1 and February 1, and become delinquent on December 10 and April 10, respectively. The lien date for secured and unsecured property taxes is March 1 of the preceding fiscal year. 29
9. RISK MANAGEMENT SAN JOAQUIN DELTA COMMUNITY COLLEGE DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The District is self-insured for its general liability and auto liability. The District has chosen to establish a risk financing internal service fund where assets are set aside for claim settlements associated with the above risks of loss up to certain limits. Excess coverage is provided by the Statewide Association of Community Colleges (SWACC). SWACC is a joint powers authority created to provide services and other items necessary and appropriate for the establishment, operation, and maintenance of a self-funded excess liability fund for public educational agencies which are parties thereto. Should excess liability claims exceed amounts funded to SWACC by all participants, the District may be required to provide additional funding. Amounts of additional funding cannot be determined although District management does not expect such amounts, if any, to be material in relation to the financial statements. The District is self-insured for workers' compensation losses. The District has received a Certificate to Self-Insure from the State of California. The District is responsible for claims less than $150,000 and greater than $25,000,000. Claims in excess of the selfinsurance limits are funded through SELF. Premiums of $183,602 were made to the fund during the year ended June 30, 2010. The District contracted with third party administrators, JT2 Integrated Resources and Keenan & Associates, to manage claims. The claims liability activity for the liability and workers' compensation programs for the years ended June 30, 2010 and 2009 is as follows: 2010 2009 Liability balance, beginning of year $ 2,023,155 $ 1,640,399 Claims and changes in estimates 1,074,831 846,892 Claims payments (319,986) (464,136) Liability balance, end of year $ 2,778,000 $ 2,023,155 10. EMPLOYEE RETIREMENT SYSTEMS Qualified employees are covered under multiple-employer defined benefit pension plans maintained by agencies of the State of California. Certificated employees are members of the State Teachers' Retirement System, and classified employees are members of the Public Employees' Retirement System. 30
NOTES TO BASIC FINANCIAL STATEMENTS 10. EMPLOYEE RETIREMENT SYSTEMS State Teachers' Retirement System (STRS) Plan Description All certificated employees and those employees meeting minimum standards adopted by the Board of Governors of the California Community Colleges and employed 50 percent or more of a full-time equivalent position participate in the Defined Benefit Plan (DB Plan). Part-time educators hired under a contract of less than 50 percent or on an hourly or daily basis without contract may elect membership in the Cash Balance Benefit Program (CB Benefit Program). The State Teachers' Retirement Law (Part 13 of the California Education Code, Section 22000 et seq.) established benefit provisions for STRS. Copies of the STRS annual financial report may be obtained from the STRS Executive Office, 100 Waterfront Place, West Sacramento, CA 95605. The State Teachers' Retirement Plan (STRP), a defined benefit pension plan, provides retirement, disability, and death benefits, and depending on which component of the STRP the employee is in, postretirement cost-of-living adjustments may also be offered. Employees in the DB Plan attaining the age of 60 with five years of credited California service (service) are eligible for "normal" retirement and are entitled to a monthly benefit of two percent of their final compensation for each year of service. Final compensation is generally defined as the average salary earnable for the highest three consecutive years of service. The plan permits early retirement options at age 55 or as early as age 50 with at least 30 years of service. Disability benefits of up to 90 percent of final compensation to members with five years of service. After five years of credited service, members become 100 percent vested in retirement benefits earned to date. If a member's employment is terminated, the accumulated member contributions are refundable. The features of the CB Benefit Program include immediate vesting, variable contribution rates that can be bargained, guaranteed interest rates, and flexible retirement options. Participation in the CB benefit plan is optional; however, if the employee selects the CB benefit plan and their basis of employment changes to half time or more, the member will automatically become a member of the DB Plan. Funding Policy Active members of the DB Plan are required to contribute 8.0% of their salary while the district is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the STRS Teachers' Retirement Board. The required employer contribution rate for fiscal year 2009-2010 was 8.25% of annual payroll. The contribution requirements of the plan members are established by State statute. The CB Benefit Program is an alternative STRS contribution plan for instructors. Instructors who choose not to sign up for the DB Plan or FICA may participate in the CB Benefit Program. The District contribution rate for the CB Benefit Program is always a minimum of 4% with the sum of the district and employee contribution always being equal or greater than 8%. 31
NOTES TO BASIC FINANCIAL STATEMENTS 10. EMPLOYEE RETIREMENT SYSTEMS State Teachers' Retirement System (STRS) Annual Pension Cost The District's total contributions to STRS for the fiscal years ended June 30, 2010, 2009, and 2008 were $2,499,825, $2,771,991 and $2,464,670, respectively, and equals 100% of the required contributions for each year. The State of California may make additional direct payments for retirement benefits to the STRS on behalf of all community colleges in the State. The revenue and expenditures associated with these payments, if any, have not been included in these financial statements. In their most recent actuarial valuation of the DB Plan as of June 30, 2008, the independent actuaries for STRS determined that, at June 30, 2008, the actuarial value of the DB program's actuarial accrued liabilities exceeded the program's actuarial value of assets by $22.5 billion. Based on this valuation, the current statutory contributions are sufficient to fund normal cost and amortize the actuarial unfunded obligation of $22.5 billion by 2030. However, future estimates of the actuarial unfunded obligation may change due to market performance, legislative actions and other membership related factors. In their most recent actuarial valuation of the CB Plan as of June 30, 2008, the independent actuaries for STRS determined that, at June 30, 2008, the actuarial value of the CB program's actuarial value of assets exceeded the program's accrued liabilities by $861,000. The STRS management is continually evaluating the impact of market fluctuations on the assets of the CB program. However, future estimates of the actuarial unfunded obligation may change due to market performance, legislative actions and other membership related factors. California Public Employees' Retirement System (CalPERS) Plan Descriptions All full-time classified employees participate in CalPERS, a multiple employer contributory public employee retirement system that acts as a common investment and administrative agent for participating public entities within the State of California. Employees are eligible for retirement as early as age 50 with five years of service. At age 55, the employee is entitled to a monthly benefit of 2.0 percent of final compensation for each year of service credit. Retirement compensation is less if the plan is coordinated with Social Security. Retirement after age 55 increases the monthly benefit percentage rate to a maximum of 2.5 percent at age 63. The plan also provides death and disability benefits. Retirement benefits fully vest after five years of credited service. Upon separation from the Fund, members' accumulated contributions are refundable with interest credited through the date of separation. The Public Employees' Retirement Law (Part 3 of the California Government Code, Section 20000 et seq.) establishes benefit provisions for CalPERS. CalPERS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, California 95814. 32
NOTES TO BASIC FINANCIAL STATEMENTS 10. EMPLOYEE RETIREMENT SYSTEMS California Public Employees' Retirement System (CalPERS) Funding Policy Active plan members are required to contribute 7.0% of their salary and the district is required to contribute an actuarially determined rate. The District's contribution rate to CalPERS for fiscal year 2002-03 was 2.894% beginning with the first pay period ending July 2002; CalPERS then lowered the rate to 2.771% beginning with the first pay period ending in February 2003. On May 16, 2003, CalPERS approved a school employer contribution rate of 10.42% beginning with the first pay period that ended in July 2003. The required employer contribution rate for fiscal year 2009-2010 was 9.709% of annual payroll. Annual Pension Cost The District's contributions to CalPERS for the fiscal years ending June 30, 2010, 2009, 2008 were $2,114,628, $2,225,323 and $2,137,945, respectively, and equaled 100 percent of the required contributions for each year. The actuarial assumptions used as part of the June 30, 2001, actuarial valuation (the most recent actuarial information available) included (a) an 8.25% investment rate of return (net of administrative expense); (b) an overall growth in payroll of 3.75% annually; and (c) an inflation component of 3.5% compounded annually that is a component of assumed wage growth, and assumed future post-retirement cost of living increases. The actuarial value of pension fund assets was determined by using a technique to smooth the effect of short-term volatility in the market value of investments. 11. OTHER POSTEMPLOYMENT BENEFITS In addition to the pension benefits described in Note 10, the District provides lifetime post-retirement health care benefits to employees hired prior to June 30, 2007 and who retire from the District and meet the specific eligibility requirements set forth in their prospective employment contracts. During the fiscal year, the District recognized expenditures for these postemployment health benefits on a pay-as-you-go basis as retirees report claims/premiums are paid. The District pays medical insurance premiums to maintain the level of coverage enjoyed by the retiree immediately preceding retirement up until the age of 70 or death of the retiree. Expenditures for post-retirement health care benefits are recognized as the premiums are paid. 33
NOTES TO BASIC FINANCIAL STATEMENTS 11. OTHER POSTEMPLOYMENT BENEFITS The District's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Cod. Sec. P50.108-.109. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the District's annual OPEB cost for the year, the amount actually contributed, and changes in the District's net OPEB obligation: Annual required contribution $ 6,936,960 Interest on net OPEB obligation 178,354 Adjustment to annual required contribution - Annual OPEB cost (expense) 7,115,314 Contributions made 3,227,191 Increase in net OPEB obligation 3,888,123 Net OPEB obligation - beginning of year 3,567,081 Net OPEB obligation - end of year $ 7,455,204 The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010 and the preceding year was as follows: Percentage of Annual Fiscal Year Annual OPEB Cost Net OPEB Ended OPEB Cost Contributed Obligation June 30, 2009 $ 6,936,960 51.42% $ 3,567,081 June 30, 2010 $ 7,115,314 45.36% $ 7,455,204 As of October 1, 2008, the most recent actuarial valuation date, the plan was unfunded. The unfunded actuarial accrued liability for benefits was $107.4 million and the covered payroll (annual payroll of active employees covered by the Plan) was $52,746,321 resulting in a ratio of the unfunded actuarial accrued liability to the covered payroll of 204 percent. 34
NOTES TO BASIC FINANCIAL STATEMENTS 11. OTHER POSTEMPLOYMENT BENEFITS Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, shown above, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the October 1, 2008, actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 5.0 percent investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan on the valuation date, and an annual healthcare cost trend rate of 4.0 percent. Both rates include a 3.0 percent salary increase assumption. The actuarial value of assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a fifteen-year period. The UAAL is being amortized as a level percentage of projected payroll on an closed basis. The remaining amortization period at June 30, 2010, was 28 years. 12. COMMITMENTS AND CONTINGENCIES Contingent Liabilities The District is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the financial position or results of operations of the District. The District has received Federal and State funds for specific purposes that are subject to review or audit by the grantor agencies. Although such audits could results in expenditure disallowances under terms of the grants, it is management's opinion that any required reimbursements or future revenue offsets subsequently determined will not have a material effect on the District's financial position. 35
NOTES TO BASIC FINANCIAL STATEMENTS 12. COMMITMENTS AND CONTINGENCIES Contingent Liabilities The District leases office facilities from an unrelated third party under a non-cancellable operating lease that expires December 2011. The future minimum lease payments associated with this lease are as follows: Year Ending June 30, Lease Payment 2011 $ 171,329 2012 88,234 Total future obligations $ 259,563 Construction Commitments As of June 30, 2010, the District has approximately $42.7 million in outstanding commitments on construction contracts. 13. JOINT POWERS AGREEMENTS San Joaquin Delta Community College District participates in Joint Power Agreements (JPAs), with Schools Excess Liability Fund (SELF) and Statewide Association of Community Colleges (SWACC). The relationship between San Joaquin Delta Community College District and the JPAs is such that the JPAs are not component units of San Joaquin Delta Community College District for financial reporting purposes. The JPAs are governed by boards consisting of a representative from each member district. The boards control the operations of the JPAs, including the selection of management and approval of operating budgets, independent of any influence by the member district beyond their representation on the governing board. SELF and SWACC provide workers' compensation and property and liability insurance for its members. San Joaquin Delta Community College District pays a premium commensurate with the level of coverage requested. Member districts share surpluses and deficits proportionate to their participation in the JPAs. The JPAs are independently accountable for their fiscal matters and maintain their own accounting records. Budgets are not subject to any approval other than that of the governing board. 36
NOTES TO BASIC FINANCIAL STATEMENTS 13. JOINT POWERS AGREEMENTS Condensed financial information of the JPAs for the most recent year available is as follows: SELF SWACC June 30, 2010 June 30, 2010 Total assets $ 195,379,000 $ 46,019,292 Total liabilities $ 160,463,000 $ 21,417,925 Net assets $ 34,916,000 $ 24,601,367 Total revenues $ 19,340,000 $ 11,118,079 Total expenses $ 30,377,000 $ 12,547,315 Change in net asset $ (11,037,000) $ (1,429,236) 14. OPERATING EXPENSES The following schedule details the functional classifications of the operating expenses reported in the statement of revenues, expenses and changes in net assets for the year ended June 30, 2010. Supplies, Materials and Other Equipment, Salaries Operating Maintenance Functional and Expenses and Classifications Benefits and Services Repairs Depreciation Total Instruction $ 38,359,497 $ 2,194,552 $ 1,535,374 $ 42,089,423 Academic Support 6,544,978 669,215 213,130 7,427,323 Student Services 12,178,236 1,824,244 58,434 14,060,914 Operations and Maintenance of Plant 4,463,368 3,272,886 13,243 7,749,497 Institution Support 14,733,828 6,072,204 164,049 20,970,081 Community Support 3,682,265 509,531 50,627 4,242,423 Ancillary Services 2,512,268 6,114,485 77,357 8,704,110 Student Aid 42,853 30,780,820 30,823,673 Physical Property 864,149 (1,066,042) (201,893) Depreciation $ 4,796,464 4,796,464 $ 82,517,293 $ 52,302,086 $ 1,046,172 $ 4,796,464 $ 140,662,015 15. RESTATEMENT During 2010, management determined that the Bernerd Scholarship Trust Endowment, initially classified as permanently restricted, should have been reported as temporarily restricted. The restatement in the amount of $1,011,594 reclassified the net assets from permanently restricted to temporarily restricted. The cost of the investment approximated the fair value at June 30, 2010. 37
16. SUBSEQUENT EVENTS SAN JOAQUIN DELTA COMMUNITY COLLEGE DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS On August 11, 2010, the District issued $14,860,000 of TRANs maturing on June 30, 2011, with interest at 2.0% to provide for cash flow deficits during the fiscal year. The notes are a general obligation of the District and are payable solely from revenues and cash receipts generated by the District during the fiscal year ending June 30, 2011. The District and Foundation have reviewed all events occurring from June 30, 2010 through January 28, 2011, the date the financial statements were issued. No subsequent events occurred requiring accrual or disclosure. 38
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF OTHER POSTEMPLOYMENT BENEFITS (OPEB) FUNDING PROGRESS For the Year Ended June 30, 2010 Schedule of Funding Progress Unfunded UAAL as a Actuarial Actuarial Percentage Fiscal Actuarial Actuarial Accrued Accrued of Year Valuation Value of Liability Liability Funded Covered Covered Ended Date Assets (AAL) (UAAL) Ratio Payroll Payroll 6/30/2009 October 1, 2008 $ - $ 107,368,125 $ 107,368,125 0% $ 42,456,917 246% 6/30/2010 October 1, 2008 $ - $ 107,368,125 $ 107,368,125 0% $ 52,746,321 204% The accompanyin notes are an integral part of these financial statements. 39
SUPPLEMENTAL INFORMATION
ORGANIZATION June 30, 2010 San Joaquin Delta Community College District was established on July 1, 1963, and encompasses an approximately 2,300 square mile area, primarily in San Joaquin County. The District serves local communities in Stockton, Lodi, Tracy, Manteca and adjacent unincorporated areas. The District currently operates San Joaquin Delta College, which provides collegiate level instruction to over 21,000 students across a wide spectrum of subjects. The District is accredited by the Western Association of Schools and Colleges (WASC), which is one of six regional associations that accredit public and private schools, colleges, and universities in the United States. The District's one college is accredited by the Western Association of Schools and Junior Colleges. The Governing Board and District Administration for the fiscal year ended June 30, 2010 were composed of the following members: BOARD OF TRUSTEES Members Office Term Expires Steve Castellanos President 2012 Janet Rivera Vice President 2010 Teresa R. Brown Clerk 2012 Ted Simas Member 2010 Jennet Stebbins Member 2012 Mary Ann Cox Member 2012 Taj M. Khan Member 2010 DISTRICT ADMINISTRATION Dr. Susan Cota Interim Superintendent/President Dr. Kathleen Hart Assistant Superintendent, Vice President, Instruction Vacant Vice President of Business Services Ms. Trudy Walton Vice President of Student Services Mr. Vince Brown Vice President, Human Resources and Employee Relations Mr. Lee Belarmino Vice President, Information Technology 41
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2010 U.S. Department of Education Federal Grantor/ Federal Pass-Through Grantor/ CFDA Federal Program or Cluster Title Number Expenditures Direct Programs: Student Financial Aid Cluster: Federal Supplemental Educational Opportunity Program (FSEOG) 84.007 $ 513,471 FSEOG Administrative 84.007 25,674 College Work-Study Program 84.033 485,223 Federal Pell Grants (PELL) 84.063 27,001,034 Federal Pell Administrative 84.063 44,085 Academic Competitiveness Grant 84.375 119,661 Subtotal Financial Aid Cluster 28,189,148 Passed through California Community College Chancellor's Office: Career and Technical Education - Basic Grants to States 84.048 1,003,442 VTEA Title II - Tech Prep 84.243 64,906 Direct Programs: Higher Education Institutional Aid (CCRAA) 84.031C 1,025,709 Higher Education Institutional Aid:Title V - Developing Hispanic - Serving Institution Program 84.031S 513,110 TRIO - Student Support Services 84.042A 215,961 Childcare Access Means Parent in School (CAMPIS) 84.335A 38,822 Fund for the Improvement of Postsecondary Education 84.116W 100,993 Rehabilitation Services- Vocational Rehabilitation Grants to States, Recovery Act 84.390A 1,260 State Fiscal Stabilization Fund (SFSF)- Education State Grants, Recovery Act 84.394 526,050 Total U.S. Department of Education 31,679,401 Small Business Administration Passed through California State University, Chico: Small Business Development Centers 59.037 91,624 U.S. Department of Transportation Passed through California Community College Chancellor's Office: Highway Planning and Construction: Statewide Strategic Initial Hubs - California Construction Contracting Program (CCCP) 20.205 520,000 Highway Planning and Construction: Small Business Development Centers - Economic Development (CCCP) 20.205 19,112 Total U.S. Department of Transportation 539,112 42
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2010 Federal Grantor/ Federal Pass-Through Grantor/ CFDA Federal Program or Cluster Title Number Expenditures Corporation for National and Community Service Direct Program: AmeriCorps - Recovery 94.006 $ 45,030 U.S. Department of Agriculture Passed through California Department of Education: Child and Adult Care Food Program 10.558 98,912 Schools and Roads- Grants to States (Forest Reserve) 10.665 823 Total U.S. Department of Agriculture 99,735 U.S. Department of Health and Human Services Passed through California Community College Chancellor's Office: Temporary Assistant to Needy Families (TANF) Work Study and Job Development 93.558 91,675 Temporary Assistant to Needy Families (TANF) 93.558 161,536 Direct Programs: Child Care and Development Block Grant 93.575 1,669 Foster Care - Title IV-E 93.658 22,448 Total U.S. Department of Health and Human Services 277,328 U.S. Department of Labor Passed through California Community College Chancellor's Office: Workforce Investment Act - Education Initiative for Associate Degree Nursing 17.258 203,614 U.S. Department of Veterans Affairs Direct Program: Veterans Ed 64.027 2,839 Total Federal Programs $ 32,938,683 See accompanying notes to supplemental information. 43
SCHEDULE OF STATE FINANCIAL AWARDS For the Year Ended June 30, 2010 Program Entitlements Program Revenues Deferred Prior Year Revenue/ Program Carry- Current Total Cash Accounts Accounts Expendforward Entitlement Entitlement Received Receivable Payable Total itures Basic Skills One-Time Funds $ 628,082 $ 224,091 $ 852,173 $ 856,920 $ 512,663 $ 344,257 $ 344,257 BFAP - SFAA 20,585 689,979 710,564 710,564 56,400 654,164 654,164 Block Grant 887,481 887,481 887,481 447,902 439,579 439,579 Cal Grants 2,012,319 2,012,319 2,012,319 2,012,319 2,012,319 CalWORKs 550,664 550,664 531,292 34,727 496,565 496,565 CalWORKs Assessment 135,107 263,621 398,728 351,318 95,564 255,754 255,754 CalWORKs Regional Effort 10,000 10,000 10,000 1,393 8,607 8,607 California State Preschool Program 782,387 782,387 622,245 17,131 605,114 605,114 CARE 5,777 215,786 221,563 221,563 44,933 176,630 176,630 Career Tech Education Equipment for Nursing 82,923 82,923 82,923 60,204 22,719 22,719 Career Tech Education - Enrollment Growth 48,474 429,194 477,668 416,843 84,028 332,815 332,815 Child Care Food Program 5,238 5,238 5,238 5,238 5,238 Child Development Training 1,978 1,978 1,978 1,978 1,978 CTE Collaborative Grant 69,735 69,735 69,781 2,085 67,696 67,696 CTE II (Energy & Utilities) Reg. Collab. 80,000 80,000 80,000 80,000 80,000 CTE Reg. Collab. Workforce Innovative Project 10,000 10,000 10,000 10,000 10,000 DHH Allowance 3,658 219,566 223,224 223,224 52 223,172 223,172 DSPS Handicapped Allowance 23,132 863,987 887,119 887,119 9,075 878,044 878,044 E/Fee Admin (2%) 96,300 96,300 96,300 96,300 96,300 Entrep. Career Pathway Projects 172-024 35,000 35,000 35,000 35,000 35,000 Entrep. Career Pathway Projects 172-036 90,000 90,000 90,000 60,958 29,042 29,042 Extended Opportunity Program and Services (EOPS) 25,016 1,069,654 1,094,670 1,094,670 182,518 912,152 912,152 Entrepreneurship Pathways 50,000 50,000 50,000 3,171 46,829 46,829 Faculty and Staff Diversity 56,503 8,161 64,664 64,664 64,664 Faculty and Staff Professional Development 17,022 17,022 17,022 16,222 800 800 Foster Care - San Joaquin County 17,000 17,000 17,000 17,000 17,000 Foster Care Education 194,449 194,449 145,377 $ 49,072 194,449 194,449 Fund for Student Success - MESA 18,130 50,568 68,698 56,056 7,594 63,650 63,650 44
SCHEDULE OF STATE FINANCIAL AWARDS For the Year Ended June 30, 2010 Program Entitlements Program Revenues Deferred Prior Year Revenue/ Program Carry- Current Total Cash Accounts Accounts Expendforward Entitlement Entitlement Received Receivable Payable Total itures Fund for Student Success - Middle College $ 14,923 $ 84,604 $ 99,527 $ 48,765 $ 45,909 $ 94,674 $ 94,674 General Child Care Dev Programs 671,557 671,557 505,064 $ 27,264 477,800 477,800 General Child Care Materials 3,506 3,506 445 1,247 1,692 1,692 Math & Science Teacher Incentive 5,000 5,000 4,631 4,631 4,631 Matriculation 113,893 491,592 605,485 605,485 175,284 430,201 430,201 Noncredit Matriculation 61,786 61,786 61,786 38,887 22,899 22,899 Part-Time Faculty Allocation 358,255 358,255 358,255 358,255 358,225 Small Business Development Center - Econ Dev 101,538 74,393 175,931 164,028 11,903 175,931 175,931 Statewide Strategic Initiative Hub 158,452 198,083 356,535 339,872 65,920 273,952 273,952 Strategy Priority Leadership, Coordination & Tech 27,110 85,552 112,662 98,974 9,815 108,789 108,789 Student Financial Assistance Programs (03 & 04) 181,838 181,838 94,538 17,779 112,317 112,317 Tech Prep Pipeline 46,926 186,207 233,133 136,926 74,637 211,563 211,563 Walter Johnson Foundation Grant 26,000 26,000 26,000 20,333 5,667 5,667 Total State Programs $ 2,466,710 $ 10,416,072 $ 12,882,782 $ 12,087,035 $ 222,587 $ 2,021,378 $ 10,288,244 $ 10,288,214 See accompany notes to supplemental information. 45
SCHEDULE OF WORKLOAD MEASURES FOR STATE GENERAL APPORTIONMENT Annual Attendance as of June 30, 2010 Reported Audit Revised Categories Data Adjustments Data A. Summer Intersession (Summer 2009 only) 1. Noncredit 72 72 2. Credit 2,152 2,152 B. Summer Intersession (Summer 2009 - Prior to July 1, 2010) 1. Noncredit - - 2. Credit - - C. Primary Terms (Exclusive of Summer Intersession) 1. Census Procedure Courses a. Weekly Census Contact Hours 10,218 10,218 b. Daily Census Contact Hours 715 715 2. Actual Hours of Attendance Procedure Courses a. Noncredit 341 341 b. Credit 1,258 1,258 3. Independent Study/Work Experience a. Weekly Census Contact Hours 1,723 1,723 b. Daily Census Contact Hours 430 430 c. Noncredit Independent Study/ Distance Education Courses - - D. Total FTES 16,909-16,909 Supplemental Information: E. In-Service Training Courses (FTES) - - H. Basic Skills Courses and Immigrant Education a. Noncredit 242 242 b. Credit 1,110 1,110 CCFS 320 Addendum CDCP - - Centers FTES a. Noncredit - - b. Credit - - See accompanying notes to supplemental information. 46
RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET REPORT (CCFS-311) WITH AUDITED FINANCIAL STATEMENTS For the Year Ended June 30, 2010 Self-Insurance Fund June 30, 2010 Annual Financial and Budget Report (CCFS-311) Fund Balance $ 699,585 Adjustment to record claims liability based on actuarial estimates (754,845) June 30, 2010 Audited Fund Balance $ (55,260) There were no adjustments proposed to any other funds of the District. See accompanying notes to supplemental information. 47
NOTES TO SUPPLEMENTAL INFORMATION 1. PURPOSE OF SCHEDULES A - Schedule of Expenditures of Federal Awards The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of the District and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of the United States Office of Management and Budget Circular A-133. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. B - Schedule of State Financial Awards The accompanying Schedule of State Financial Awards includes State grant activity of the District and is presented on the modified accrual basis of accounting. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. The information in this schedule is presented to comply with reporting requirements of the California State System's Office. C - Schedule of Workload Measures for State General Apportionment Full-time equivalent students is a measurement of the number of students attending classes of the District. The purpose of attendance accounting from a fiscal standpoint is to provide the basis on which apportionments of State funds are made to community college districts. This schedule provides information regarding the attendance of students based on various methods of accumulating attendance data. D - Reconciliation of Annual Financial and Budget Report (CCFS-311) with Audited Financial Statements This schedule provides the information necessary to reconcile the fund balance of all funds reported on the CCFS-311 to the audited financial statements. 48