Big Sandy Community and Technical College (BSCTC) has a history of financial stability necessary to support the mission [1 of the institution and the scope of its programs and services. To ensure financial stability and accurate reporting of the institution's financial position, KCTCS employs Crowe Chizek and Company LLC to conduct 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 2005-06 and 2004-05 audits were conducted by Crowe Chizek and Company LLC. The 2003-04 audit was conducted by Deloitte and Touché LLP and are referenced as follows:

• KCTCS 2005-06 Annual Financial Report with Supplemental Information on BSCTC [2]
• KCTCS 2004-05 Annual Financial Report with Supplemental Information on BSCTC [3]
• KCTCS 2003-04 Annual Financial Report with Supplemental Information on BSCTC [4]

The following tables of Key Indicators were derived from the Supplemental Information on BSCTC from the above referenced KCTCS Annual Financial Reports

Analysis of the above data is as follows:

• As of June 30, 2006, total assets totaled $41,969. Of this amount, investment in capital (net of depreciation) was $37,808, or 91% of total assets.
• Cash and Cash Equivalents for FY06 totaled $2,678, which represented 6.3% of total assets.
• Cash and Cash Equivalents increased 33.23% from FY04 - FY06
• Total Assets decreased 5% from FY04 - FY06
• Current Assets exceed Current Liabilities for all three years. The current ratio (current assets / current liabilities) was 2.49 for FY06, 2.70 for FY05, and 2.60 for FY04. The current ratio provides evidence that BCTCS has more than enough current assets to offset current liabilities if necessary.

Based on the above data, BSCTC is financially stable.

• Tuition and Fees increased by 13% from FY04 - FY06 (decreasing slightly from FY05 - FY06). Tuition and Fees net of scholarship allowances increase 26%. The tuition assessment for FY05 as compared to FY06 was higher; however, the scholarship allowances were higher by a greater margin. The tuition rate has increased from $79 in FY04 - $109 in FY06
• Revenue and Expenses from Auxiliary Enterprises decreased with the outsourcing of the Bookstore Operations in FY04 to Barnes and Noble.
• Total Operating Revenue and Total Operating Expenses decreased as well, largely because of the outsourcing of the Bookstore Operations.
• State Appropriation allocations increased by 5.36% from FY04 - FY06.
• Gifts and Investment Income increased 14% and 12% respectively, primarily because of the efforts of the "Fulfilling the Promise" Capital Campaign.
• Instruction Expenses increased 1.87% reflecting the continual emphasis on instruction. Expense information is listed for instruction because it is the larges expense component. Expense information for other areas is included in the linked Statements [8]. [9]. [10].
• Federal Grants decreased but State and Local Grants increased
• Sales and Service increased, primarily because of the Bookstore sales commission received from Barnes and Noble.
• Depreciation has remained relatively constant, with an increase in depreciation of 4.2% over the three year period. According to the Notes to the Financial Statements [2] , depreciation for KCTCS (including BSCTC) capital assets is computed on a straight-line basis over the estimated useful lives of the respective assets.

Unrestricted Net Assets net of plant and debt remained fairly constant during the three year period with an overall decrease of 3% from FY04 - FY06.

BSCTC's financial stability is further demonstrated in Core Requirement 2.11.1.

The full-time enrollment at BSCTC has decreased 16% from FY04 to FY06, while the total enrollment has increased 3%.

BSCTC has budgeted expense reserves to address any tuition shortfall issues resulting from declining enrollment, and to offset state mandated budget cuts (as occurred in FY02 through FY04) and referenced in the FY06 notes of the KCTCS Audited Financial Report [2]. These reserve balances are reviewed monthly by the Administration of BSCTC [14] and are included in the totals reported quarterly to the BSCTC Board of Directors in an updated budget report [15]. Despite declining enrollment, the net tuition and fees revenue has increased 26% (as stated above) because of increased tuition costs. The increased tuition revenue and the budgeted reserves serve as further evidence of BSCTC's stable financial position. Additional information regarding KCTCS and BSCTC budget processes is found in Core Requirement 2.11.1.

Fund raising efforts are an important component of BSCTC's mission [1]. BSCTC is currently engaged in the "Fulfilling the Promise" capital campaign. The Big Sandy College Educational Foundation, Inc. (Foundation) is an independent foundation which serves as the primary fund-raising arm for BSCTC. A total of $1,199,099 in pledges and gifts has been raised to date through the "Fulfilling the Promise" campaign. In accordance with KCTCS Administrative Policy 7.6.6.4 [16], BSCTC has several endowment accounts as evidenced by the endowment reports. The endowment reports reflect a principle endowment balance of $727,796 for FY04 [17], $751,373 for FY05 [18], and $914,983 for FY06 [19]. The increase is a result of the campaign efforts. The endowment reports also reflect projected interest income of $69,875 for FY05 [17], $73,126 for FY06 [18] and $86,569 for FY07 [19]. This income generated primarily represents the spending rate on the endowments as a large portion of the interest income is awarded to students in the form of scholarships. The endowment income is invested by KCTCS. According to the notes of the FY06 audited financial statements [2], "KCTCS uses a long term endowment investment strategy to maximize total returns, at an appropriate level of risk. Inclusive of the investment strategy is a spending rate policy to insulate programs funded by the endowment from temporary market volatility". The College and Foundation fund-raising efforts are explained further in Comprehensive Standard 3.2.2.4.

Source

Location/Special Instructions

1

BSCTS Mission Statement

http://www.bigsandy.kctcs.edu/administration/mission.html

2

KCTCS Audited Financial Report 2005-06 with supplemental information for BSCTC

3.10.1.2_Ann_Fin_Rep_2005_2006.pdf

3

KCTCS Audited Financial Report 2004-05 with supplemental information for BSCTC

3.10.1.3_Ann_Fin_Rep_2004_2005.pdf

4

KCTCS Audited Financial Report 2003-04 with supplemental information for BSCTC

3.10.1.4_Ann_Fin_Rep_2003_2004.pdf

5

BSCTC Statement of Net Assets - FY06

3.10.1.5_Net_Assets_FY06.pdf

6

BSCTC Statement of Net Assets - FY05

3.10.1.6_Net_Assets_FY05.pdf

7

BSCTC Statement of Net Assets - FY04

3.10.1.7_Net_Assets_FY04.pdf

8

BSCTC Statement of Revenue, Expense and Changes in Net Assets - FY06

3.10.1.8_Statement_of_Rev_Exp_Changes_FY06.pdf

9

BSCTC Statement of Revenue, Expense and Changes in Net Assets - FY05

3.10.1.9_Statement_of_Rev_Exp_Changes_FY05.pdf

10

BSCTC Statement of Revenue, Expense and Changes in Net Assets - FY04

3.10.1.10_Statement_of_Rev_Exp_Changes_FY04.pdf

11

BSCTC Statement of Unrestricted Net Assets, Exclusive of Plant Assets and Plant-Related Debt - FY06

3.10.1.11_Unrestricted_Net_FY06.pdf

12

BSCTC Statement of Unrestricted Net Assets, Exclusive of Plant Assets and Plant-Related Debt - FY05

3.10.1.12_Unrestricted_Net_FY05.pdf

13

BSCTC Statement of Unrestricted Net Assets, Exclusive of Plant Assets and Plant-Related Debt - FY04

3.10.1.13_Unrestricted_Net_FY04.pdf

14

BSCTC FY06 Expense Budget Report for review by college administration

3.10.1.14_FY_06_Budget_as_of_5_2_06_build_for_FY07_SACS.pdf

15

BSCTC Budget Update Report for Board of Directors - FY06

3.10.1.15_fy_06_budget_report_for_board_5_2_06.pdf

16

KCTCS Administrative Policy 7.6.6.4 - Endowments

http://www.kctcs.edu/employee/policies/volumeII/volII7-6.pdf

17

BSCTC Endowment Report - FY04

3.10.1.17_End_Update_Report_December_31_2004.pdf

18

BSCTC Endowment Report - FY05

3.10.3.18_DEVELOPMENT_STEWARDSHIP_FY05.pdf

19

BSCTC Endowment Report - FY06

3.10.3.19_Endowment_Update_December_2006.pdf

Additional Documentation

20

KCTCS 2005-06 Management Letter from Independent Auditor

3.10.1_Management_Letter_FY06.pdf

21

KCTCS 2004-05 Management Letter from Independent Auditor

3.10.1_Management_Letter_FY05.pdf

22

KCTCS 2003-04 Management Letter from Independent Auditor

3.10.1_Management_Letter_FY04.pdf

23

KCTCS Annual Budget (BSCTC included on page C-3 (FY06) and C-4 (FY07)

http://www.kctcs.edu/budget/FY07_budgetbook.pdf

24

KCTCS Administrative Policy 5.4.5 - Treasure Management Policies

http://www.kctcs.edu/employee/policies/volumeII/volII5-4-5.pdf