{Northwestern Michigan College} Board of Trustees End of Audit - - PowerPoint PPT Presentation

{Northwestern Michigan College}

Board of Trustees End of Audit Presentation October 22, 2018

Northwestern Michigan College

Presentation to Board of Trustees

• Summary of Presentation to Board of Trustees:

 Audited Financial Statements and Schedule of Expenditures of Federal Awards

• Audits required for accreditation by the Higher Learning Commission

and to receive federal grants and aid for students

• Clean, unmodified opinion – highest level of assurance
• Implemented GASB 75 Accounting and Financial Reporting for

Postemployment Benefits Other than Pensions

• Emphasis of matter paragraph added to opinion letter
• Restatement of beginning net position
• Federal awards tested this year – Student Financial Aid Cluster
• One federal award finding identified:
• Late/missed reporting of individual student status change to

national loan database

• Corrective action plan has been completed
• No other significant deficiencies or material weaknesses in internal

controls were identified 2

• GASB Statement No. 75, Accounting for Postemployment

Benefits Other Than Pensions (OPEB)

• Adopted in 2018
• Applicable to all governments (not just Michigan)
• Postemployment benefits for retiree healthcare
• Recording the unfunded OPEB obligation as a liability on College’s

Statement of Position

• College’s proportionate share of MPSERS liability
• Very similar to GASB No. 68 (pension) except applicable to OPEB
• Reduced beginning unrestricted net position in 2018 by $16.7 million

Northwestern Michigan College

2018 Impact of GASB 75

PLANTE MORAN

3

Northwestern Michigan College

Presentation to Board of Trustees

• Other Required Communications

 Our Responsibility Under Generally Accepted Auditing Standards  Qualitative Aspects of Accounting  Significant Estimates  Allowance for uncollectible accounts  Proportionate share of the Michigan Public School Employees Retirement System (MPSERS) net pension and net OPEB liabilities  No material adjustments required  Upcoming Accounting Standards  Government Auditing Standards Board (GASB) Statement No. 87, Leases  Government Auditing Standards Board (GASB) Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period

4

5

Revenues were $59.3, $59.4, and $61.6 million for 2016, 2017, and 2018, respectively.

Northwestern Michigan College

Revenues (all funds)

19.4 20.4 20.6 9.8 11.4 12.4 12.8 13.1 13.2 7.8 6 6.1 4.4 4.1 4.6 0.7 0.1 0.1 2.5 2.8 3.2 1.9 1.5 1.4 5 10 15 20 25 2016 2017 2018

Millions Year

Tuition and Fees State Appropriations Property Taxes Grants Auxiliary Investment Income Support from Foundation All Other

Northwestern Michigan College

Expenditures (all funds)

6

Expenditures were $61.2, $60.1, and $60.3 million for 2016, 2017, and 2018, respectively.

18.7 18.5 18 2.7 2.8 2.9 7.4 7.4 7.4 12.4 10.9 11.1 6.3 6.5 7.2 5.2 5.1 5.1 4.8 4.6 4.6 3.1 3.7 3.2 0.6 0.6 0.8 2 4 6 8 10 12 14 16 18 20 2016 2017 2018

Millions Year

Instruction Public Services Instructional Support Student Services Institutional Administration Plant Operations Depreciation Information technology Interest expense

Northwestern Michigan College

Assets (All Funds)

7

2018

Assets = $105,108,421 Deferred Outflow of Resources related to Net Pension Liability = $11,688,356

Cash and cash equivalents 5% Investments 21% Receivables 4% Other Assets 1% Property and equipment 59% Deferred Outflow 10%

Northwestern Michigan College

Liabilities and Net Position (All Funds)

8

2018

Liabilities = $100,863,026 Deferred Inflows of Resources = $5,688,433 Net Position = $10,245,318

Current liabilities 9% Long term debt

• bligations

22% Net pension liability 41% Net OPEB liability 14% Deferred inflows 5% Net position 9%

{Thank you}

We appreciate the opportunity to serve Northwestern Michigan College.

Katie Thornton, Partner Becky Donovan, Manager