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Compliance Certification Section 2.11

Resources

The institution has a sound financial base and demonstrated financial stability, and adequate physical resources to support the mission of the institution and the scope of its programs and services.

The member institution provides the following financial statements: (a) an institutional audit (or Standard Review Report issued in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA for those institutions audited as part of a systemwide or statewide audit) and written institutional management letter for the most recent fiscal year prepared by an independent certified public accountant and/or an appropriate governmental auditing agency employing the appropriate audit (or Standard Review Report) guide; (b) a statement of financial position of unrestricted net assets, exclusive of plant assets and plant-related debt, which represents the change in unrestricted net assets attributable to operations for the most recent year; and, (c) an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board.

Audit requirements for applicant institutions may be found in the Commission policy entitled "Accreditation Procedures for Applicant Institutions."

Coker College is in compliance.

The 2002-3 fiscal year was the College's sixth consecutive year with a balanced budget. The history of financial stability of the College is demonstrated in Section 3.10.1, which uses four criteria for stability:

• the financial position of the College, which has improved in the past ten years through the removal of deficits;
• the College's revenue stream, seen in an increase of revenue between 1999 and 2003;
• the College's expense allocations, demonstrated in the ability of the College to support its programs at the same percentage of revenue level between 1999 and 2003;
• the College's debt-to-equity ratio, which has improved each year.

This stability in recent times is due in part to the process of setting the annual budget through the Budget Steering Committee. Since 1998, the College has been assessing and refining its ability to predict enrollment and financial aid budgets, which has helped to reduce volatility in both revenue and expense actual-to-budget amounts at year's end. To see how the budget process is integrated with institutional effectiveness, refer to Section 2.5.

The College has sufficient physical resources to accomplish its mission. A description can be found in Section 3.10.7. The Library and other learning/information resources are discussed in more detail in Section 3.8.1.

(a) Institutional audit

The financial statements of the College are audited on an annual basis by the independent certified public accounting firm of Derrick, Stubbs, and Stith. They issue the following reports annually:

• Financial and Compliance Report
  • (2001) [1561]
  • (2002) [329]
  • (2003) [784]
• Management Letter
  • (2001) [1562]
  • (2002) [328]
  • (2003) [785]

Note that these documents are also included in the printed reference materials accompanying this report.

(b) Annual budget

Using data from external consultants and the Institutional Research Office, the Enrollment and Financial Aid Subcommittee of the Budget Steering Committee, the Vice President for Business Operations, and the Controller build the revenue plan using well-established and sound budget procedures. Their plan is then presented to the full committee for review and approval. The President chairs the committee and has final authority for all budget issues. The revenue plan is then submitted to the Board of Trustees through the Budget and Finance Committee at the spring meeting to obtain final approval (see meeting minutes exerpt in [333]).

Note that this compliance report will be submitted before the the spring 2004 board meeting.

To compile the expense plan for the budget, the Budget Steering Committee receives reports from the subcommittees that are requesting new funds. Any departmental budgets that are not included in a subcommittee are presented to the full committee by the administrative officer who is responsible for that department. After all departments are presented, the full committee establishes an expense plan. A budget package is prepared containing the previously approved revenue plan and an expense plan. This is presented to the Budget and Finance Committee of the Board of Trustees for approval at a special meeting prior to July 1st (for example see minutes [334] and [335]). The budget package is distributed to members of the Board of Trustees at the beginning of the new fiscal year. The board delegates final approval authority to the Executive Committee upon recommendation by the Budget and Finance Committee.

Two examples of the budget packages presented to the board are: 2002-3 [332] and 2003-4 [1475].

(c) Changes in net assets.

A schedule of unrestricted net assets is included in the Financial and Compliance Report in the Statements of Financial Position. In the net asset section of the report, the College separates the unrestricted net assets into three categories:

1. Investment in Property and Equipment,
2. Board Designated, and
3. Undesignated.

The net assets classified as Investment in Property and Equipment include all plant and plant-related debt activity, which are segregated from the other unrestricted net asset categories.

Reference Documents Cited

ID	Type	Source	Title	Description
328	HTML PDF	Office: Business	Management Letter, 06-30-02	Management letter for fiscal year ending 06-30-02
329	HTML PDF	Office: Business	Financial Statements, 06-30-02	Financial statements for fiscal year ending 06-30-02
332	HTML PDF	Committee: Budget Steering	2002-03 Operating Budget Package	Operating budget package for 2002-03
333	HTML DOC PDF	Board of Trustees	Board of Trustees Meeting, 03-12-02, Minutes Excerpt	Excerpt from Meeting Minutes: approval of 2002-03 revenue premise
334	HTML DOC PDF	Committee: Budget Steering	Budget & Finance Committee Meeting, 06-26-02	Meeting Minutes: approval of the 2002-03 budget
335	HTML DOC PDF	Board of Trustees	Executive Committee Meeting, 08-08-02, Minutes Excerpt	Excerpt from Meeting Minutes: giving final approval of the 2002-03 budget
784	HTML PDF	Office: Business	Financial and Compliance Report for 2002-3	Annual audit of college finances and compliance.
785	PDF	Office: Business	Management Letter for 2002-03	Evaluation of internal controls of finances at the college.
1561	PDF	Office: Business	2001 Audit of Major Programs	Annual external audit of Coker College, June 30, 2001
1562	PDF	Office: Business	2001 Management Letter	Management letter from external auditors, August 23, 2001

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