S terling College Required Communication Unqualified opinion - - PowerPoint PPT Presentation

PRES ENTATION OF JUNE 30, 2015 AUDITED FINANCIAL S TATEMENTS October 16, 2015

S terling College

Required Communication

• Unqualified opinion
• GAAS

and GAS – reasonable but not absolute assurance

• S

ignificant accounting policies

• Management j udgments and accounting estimates
• Allowance for bad debts
• Depreciation
• Audit adj ustments – 12
• Eight of these entries were proposed by Deb during the course of the audit.

One entry proposed by audit team was material.

• Disagreements with management – None
• No difficulties encountered when performing the audit
• Good initial meetings and weekly communications

helped streamline the audit process

Highlights and Comments

• S

tatement of Financial Position

• Decrease in cash of roughly $507K primarily due to

purchases if fixed assets and fact that a large portion

• f current contributions were in receivables.
• Increase in pledges receivable by $1.2M (primarily due

to AG pledge)

• Prepaid expenses increase of $24K mainly due to

Labrador and S ierra NV GFS Courses

• Construction in progress decreased $62K due to

completion of the wireless proj ect and less work on the barn proj ect.

• Investments increased $100K due to earnings.

Highlights and Comments

• S

tatement of Financial Position

• Property and equipment increased by $1.7M net of

accumulated depreciation due to real estate acquisition, equipment and renovations place in service.

• Accrued expenses decreased by $90K included $40K

decrease in student accounts payable with much of the remaining decrease due to reduced payroll tax and retirement plan accruals in 2015 versus 2014.

• Unearned tuition increased by about $76K due to an

increase in enrollment for that period of 37 students.

• Long-term debt increased $408K due to spending on

capital proj ects.

Highlights and Comments

• S

tatement of Activities

• $1.31M in net income primarily due to increases

in student tuition and fees, auxiliary enterprises (24%

• f tuition in 2015 and 27%
• f tuition in

2014), and in contributions (up $1.2M)

• Expenses increased $937K mostly due to

increased student aid (due to increase in students) and program services.

Discussion Items

• Current Y

ear

• Increase board involvement
• No significant deficiencies in current year
• Be diligent about enforcing good policy i.e.

segregation of duties

Balance S heet Ratios

• Ratios

2011 2012 2013 2014 2015 Days cash on hand 18 18 3 32 2 Days revenue in receivables – excluding bequest 10 6 8 16 23 Current ratio – excluding bequest 0.98 0.38 0.33 1.12 .41 Quick ratio – excluding bequest 0.89 1.10 0.24 1.05 .36 Debt to net assets 20% 18% 21% 20% 21%

Income S tatement Ratios

• Ratios

2011 2012 2013 2014 2015 Program expense % 84% 86% 84% 84% 84% Management expense % 15% 12% 13% 13% 13% Fundraising expense % 1% 2% 3% 3% 3% Fundraising efficiency 89% 90% 79% 88% 93%

Analysis

$4,693,781 $5,243,339 $4,869,902 $7,094,149 $8,661,954

$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 2011 2012 2013 2014 2015

Total Support and Revenue

Total S upport and Revenue

Analysis

$86,223 $319,366

• $520,950

$681,241 $1,311,994

• $1,000,000
• $500,000

$0 $500,000 $1,000,000 $1,500,000 2011 2012 2013 2014 2015

Change in Net Assets

Change in Net Assets

Analysis

$3,858,318 $4,236,958 $4,552,131 $5,399,081 $6,195,966

$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 2011 2012 2013 2014 2015

Program Service Fees

Program S ervice Fees

Analysis

$1,737,159 $1,858,901 $1,981,868 $2,228,829 $2,351,752

$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 2011 2012 2013 2014 2015

Personnel Expenses

Personnel Expenses

Analysis

37.0% 35.5% 40.7% 34.8% 27.0%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 2011 2012 2013 2014 2015

Personnel as %

• f Total Support

Personnel as %

• f Total

S upport