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Comprehensive Standards 3.10.1

The institution’s recent financial history demonstrates financial stability. (Financial and Physical Resources)

compliance

Summary

Cape Fear Community College (CFCC) demonstrates compliance with this comprehensive standard. CFCC’s financial history demonstrates financial stability. The college’s audit history reflects clean audits for the past eleven years and financial support continues to grow annually to support its operation. The value of the assets continues to grow at a faster pace than its liabilities and the College receives sufficient revenues to cover expenses.

Narrative

The North Carolina Office of the State Auditor (OSA) audits Cape Fear Community College annually. The OSA’s objectives include expressing an opinion on the College’s financial statements, determine significant deficiencies if any, and identify those deficiencies that would adversely affect the College’s ability to administer federal programs. The College’s audits have been free of audit exceptions for the past eleven years (Management Letter for Fiscal Year 2004).

CFCC’s recent financial history demonstrates financial stability. Documents incorporated in the College’s annual audit reports support this statement. The documents are Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Net Assets, and Statement of Cash Flows (Financial Statement Audit Report, June 30, 2004 pg 15) (Financial Statement Audit Report, June 30, 2003 pg 13). Detailed ratios indicating financial stability are in Core Requirement 2.11 (Core Requirement 2.11).

As stated in Core Requirement 2.11, the majority of the College’s funding is distributed by the North Carolina Community College System’s State Board of Community Colleges and is based on FTE (full-time equivalency). From 1999-00 until 2005-06, state budget FTE has grown by 56.51% and funding to CFCC from the state budget has grown by 68.47%. The other major source of CFCC funding is from New Hanover County and for the same time period, the funding from New Hanover County has grown by 92%. CFCC also has other sources of funding that are handled in institutional funds. These funds are available to supplement the state and county appropriations.

The College’s net assets are one indicator of its financial stability. The Statement of Net Assets includes all assets and liabilities and the net increase indicates the improvement of the College’s financial condition. In comparing fiscal year 2004 to 2003, the total assets increased by $12.2 million or 16.4%, total liabilities decreased by $439 thousand or (10.4%), and total net assets increased by $12.6 million or 18%. In comparing fiscal year 2003 to 2002, total assets increased by $1.3 million or 2%, total liabilities increased by $553 thousand or 16%, and net assets increased by $728 thousand or by 1%.

The Statement of Revenues, Expenses, and Changes in Net Assets provides comparative data for fiscal years 2004 to 2003. The statement reflects operating revenues increased by 8.4% and nonoperating revenues increased by 41%, while operating expenses increased by only 1%. Comparing fiscal years 2003 to 2002 show operating revenues increased by 27.5%, nonoperating revenues decreased by 25%, and operating expenses increased by 27%. The decrease in nonoperating revenues during 2003 is due to the decrease in county appropriations. In 2001-02, New Hanover County sold $14.3 million in construction bonds for the College but sold no funds during 2002-03. The bond funds sold in 2001-02 financed construction costs that occurred in 2002-03.

The College’s financial stability is demonstrated by the following documents. Additional archived audit reports, management letters, and budget resolutions are available in the Business Office.

Budget Resolution 2005-06
Budget Resolution 2004-05
Budget Resolution 2003-04
Budget Resolution 2002-03
Budget Resolution 2001-02
Budget Resolution 2000-01
Financial Statement Audit Report as of June 30, 2004 pg 15
Financial Statement Audit Report as of June 30, 2003 pg 13
Financial Statement Audit Report as of June 30, 2002 pg 13
Financial Statement Audit Report as of June 30, 2001 pg 8
Management Letter for Fiscal Year 2004
Management Letter for Fiscal Year 2003
Management Letter for Fiscal Year 2002
Management Letter for Fiscal Year 2001

Documentation

Source Location

Management Letter for Fiscal Year 2004,
Office of the State Auditor

managementltrfy2004.pdf

Financial Statement Audit Report
as of June 30, 2004 (pg 15),

Office of the State Auditor

FIN-2004-6810.pdf

Financial Statement Audit Report
as of June 30, 2003 (pg 13),

Office of the State Auditor

FIN-2003-6810.pdf
Core Requirement 2.11,
CFCC SACS Compliance Documentation
Core Requirement 2.11

Budget Resolution, Fiscal Year 2005-06,
CFCC Business Office

05-06budgetresolution.pdf

Budget Resolution, Fiscal Year 2004-05,
CFCC Business Office
04-05budgetresolution.pdf
Budget Resolution, Fiscal Year 2003-04,
CFCC Business Office
03-04budgetresolution.pdf
Budget Resolution, Fiscal Year 2002-03,
CFCC Business Office
02-03budgetresolution.pdf
Budget Resolution, Fiscal Year 2001-02,
CFCC Business Office
01-02budgetresolution.pdf
Budget Resolution, Fiscal Year 2000-01,
CFCC Business Office
00-01budgetresolution.pdf

Financial Statement Audit Report
as of June 30, 2004 (pg 15),

Office of the State Auditor

FIN-2004-6810.pdf
Financial Statement Audit Report
as of June 30, 2003 (pg 13),

Office of the State Auditor
FIN-2003-6810.pdf
Financial Statement Audit Report
as of June 30, 2002 (pg 13),

Office of the State Auditor
FIN-2002-6810.pdf
Financial Statement Audit Report
as of June 30, 2001 (pg 8),

Office of the State Auditor
FIN-2001-6810.pdf
Management Letter for Fiscal Year 2003-04,
Office of the State Auditor
managementltrfy2004.pdf
Management Letter for Fiscal Year 2002-03,
Office of the State Auditor
managementltrfy2003.pdf
Management Letter for Fiscal Year 2001-02,
Office of the State Auditor
managementltrfy2002.pdf
Management Letter for Fiscal Year 2000-01,
Office of the State Auditor
managementltrfy2001.pdf

 

 

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