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Big Sandy Community and Technical College (BSCTC) has a sound financial base and has demonstrated financial stability to
support the mission [1]
of the institution and the scope of its programs and services. The operations of BSCTC are funded through such sources as
state appropriation, tuition and fees, gifts, federal and state grants and contracts, and sales and services. The following
narratives regarding the audited financial statements and the budget demonstrate financial stability and a sound financial
base.
2.11a Audit
Big Sandy Community and Technical College (BSCTC) is a part of the Kentucky Community and Technical College System (KCTCS).
Crowe Chizek and Company LLC conducts an annual financial audit of KCTCS, which includes all its colleges. The audit is
conducted in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller of the United
States. The audit material produced annually by the audit firm includes the audited financial report, the A-133 audit
(the audit of federally-funded programs including federal financial aid), and the audit management letter.
The A-133 audit contains the auditors' management comments concerning federally-funded programs. The management comments
(related to the financial audit or the A-133 audit) for Big Sandy Community and Technical College are specified in the
letter. The complete file of audit information for 2005-06 for Big Sandy Community and Technical College is
attached [2],
and includes the KCTCS financial report with schedules specific for BSCTC, the
A-133 report [3],
the Management Letter [4],
and all other auditor's correspondence (including footnotes). The audited
financial statements for 2004-05 [5]
and 2003-04 [6]
are included as well.
The audited financial report of KCTCS includes a supplemental Statement of Net Assets and Statement of Revenues, Expenses and
Changes in Net Assets for Big Sandy Community and Technical College as well as the report of the individual auditors on these
statements from Crowe Chizek and Company LLC. KCTCS considered the cost/benefit of having prepared a separate supplemental
statement of cash flow for each KCTCS college. But given the fact that other colleges in KCTCS have obtained SACS
reaffirmation based on the same audited financial information presented herein, it was concluded that it was not necessary
for the auditors to prepare that statement.
2.11b Statement of Unrestricted Net Assets, Exclusive of Plant Assets and Plant-Related Debt
The financial statements for KCTCS include supplemental information for
BSCTC [7]
which consists of a Statement of Net Assets (Statement of Unrestricted Net Assets, Exclusive of Plant Assets and Plant-Related
Debt) and a Statement of Revenues, Expenses, and Changes in Net Assets. These statements are prepared in accordance with
Governmental Accounting Standards Board (GASB) Statement No. 35. The Statement of Net Assets for BSCTC for years ending
June 30, 2006, June 30, 2005, and June 30, 2004 are attached. The Statements present a sound financial base and demonstrated
financial stability for BSCTC.
- The Total Net Assets (total assets less total liabilities) for each respective year are as follows:
$40.7 million in FY06, $41.5 million in FY05, and $43.2 million in FY04. Of these totals, investment in capital assets
(net of related debt) represent 93% of the Total Net Assets for FY06 and FY05, and 91% for FY04.
-
The cash and cash equivalents increased from $2 million in FY04 and FY05 to $2.6 million in FY06.
- Total current assets increased from $2.9 million in FY04 to $3.1 million in FY06, reflecting a 3.3% increase.
- Total current liabilities increased from $1.15 million in FY04 to $1.24 million in FY06. The increase
was primarily attributed to an increase in deferred revenue and in employee withholding and deposits.
- Current assets consistently exceeded current liabilities by $1.8 million during FY04, FY05 and FY06.
The Statement of Revenue, Expenses, and Changes in Net Assets (Statement of Unrestricted Net Assets, Exclusive of Plant
Assets and Plant-Related Debt) are attached for BSCTC for years ending June 30, 2006, June 30, 2005, and
June 30, 2004 [7].
Total operating revenues consist of student tuition and fees less scholarship allowances (tuition discounts), federal grants
and contracts, state and local grants and contracts, indirect cost recoveries, sales and services, and other.
- The total operating revenue was $11.57 million as of June 30, 2006 and reflected a decrease from the $13.6
million in FY04 primarily resulting from the system sale of the College Bookstore operation and a reduction in federal
grants and contracts.
- The net tuition and fees increased by 26% from FY04 - FY06.
- Total operating expenses were $24.7 million in FY04, $23 million in FY05, and $22.6 million in FY06.
Therefore, total operating expenses decreased by 9.6% during the three year period, primarily because of the sale of the
Bookstore.
- Instruction expenses increased from $8.1 million in FY04 to $8.3 million in FY 06.
- The state appropriation allocation was $9.8 million in FY06, $8.9 million in FY05, and $9.3 million in FY04.
- Gifts increased from $101,000 in FY05 to $331,000 in FY06 primarily because of the fund raising efforts of the
"Fulfilling the Promise" campaign.
2.11c Budget
BSCTC follows the KCTCS budget processes outlined in the
KCTCS Budget Manual [8]
and Policies [9].
The college's annual operating budget is developed within the flow chart and timeframe outlined by
KCTCS [10].
BSCTC's budget is developed using sound planning practices. The Strategic Needs Analysis (SNA), a biennially prepared
document, identifies the college's needs and includes the college's capital plan. All areas of the college are
involved in the SNA process to ensure that all needs are identified in accordance with BSCTC's
Strategic Plan [11].
Attached is a summary of the items included in the SNA, which was
submitted to KCTCS in January 07 [12].
The annual budget for Big Sandy Community and Technical College is approved by the KCTCS Board of Regents.
The 2006-2007 budget is attached [13]
and reflects $1.2 million budgeted in reserves, which strengthens BSCTC's financial position. BSCTC's
05-06 and 06-07 budgets are detailed on pages C-3 and C-4, respectively. A signed copy of the Board of Regents minutes
showing approval of the budget is included in
Attachment [14].
Budget development at BSCTC is an important part of the planning and assessment process. The attached Planning, Assessment
and Budgeting Calendar for 2005 -06 is indicative of the
related processes [15].
Each specific program/area within the college works, involving all levels, to develop a budget request which allows them to
meet the particular program/area goals and objectives. A recurring and non-recurring budget request is required to be
submitted by each budget manager/supervisor as part of BSCTC's budget development process. A sample request is
attached [16].
The requests are used to develop the budget each year. The BSCTC Board of Directors is required to approve the operating
budget each year. Attached are the Board Minutes for
May 06 [17] and
May 05 [18]
documenting approval by the BSCTC Board of Directors. To complete the process, a budget survey is submitted to BSCTC
employees each year to assess the
budgeting process [19].
The survey results are incorporated in the BSCTC Business Affairs Institutional Effectiveness Plan and Outcomes Assessment
Report for the current year, and are subsequently used as a planning tool for the upcoming year if changes need to
be made [20].
All funding requests are compiled by KCTCS and submitted to the Council of Postsecondary Education (CPE). Upon the review of
the requests, the CPE submits a recommendation to the state legislature to appropriate funding. The state legislature
appropriates funding to the CPE, the CPE appropriates funding to KCTCS, and KCTCS appropriates funding to each college
using the KCTCS Public
Funds Allocation Model [21].
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