AUDIT AND ENTERPRISE RISK MANAGEMENT COMMITTEE - PRESENTATION OF - PDF document

AUDIT AND ENTERPRISE RISK MANAGEMENT COMMITTEE - PRESENTATION OF AUDIT RESULTS December 21, 2017

Auditor’s Communication with Those Charged with Governance Section 1 Executive Summary 1 The Auditor’s Communication With Those Charged With 2 - 4 Governance 5 Key Financial Indicators Trend and Benchmark Analysis 6 – 10 Financial Dashboard 11 Section 2 Draft Financial Statements

Key Financial Indicators Unrestricted Fund Balance (Reconciliation of SUNY Annual Report to Audited Financial Statements) (Millions) Variance 2017 2016 $ % Unrestricted Fund Balance - Beginning of 5.6 -8% $ $ 6.1 $ (0.5) Year Add: Unrestricted Operating Revenues 45.4 43.8 4% 1.6 Less: Unrestricted Operating Expenses (44.6) 0% (44.4) (0.2) Increase/(Decrease) in Unrestricted Fund 260% 0.8 (0.5) 1.3 Balance Unrestricted Fund Balance - End of Year 6.4 14% 5.6 $ 0.8 2.2 Impact of GASB 68 1.7 Unrestricted Fund Balance - End of Year 7.8 $ 8.1 $ (per Audited Financial Statements) Note: Unrestricted operating expenses for the years ended August 31, 2017 and 2016 include approximately $352,000 and $326,000, respectively, of costs incurred in connection with the College’s 2014-2018 Strategic Plan. 5

Trends and Benchmark Analysis Unrestricted Fund Balance 2013-2017 (per SUNY Annual Report) (Millions) Unrestricted Revenue and Expenses 2013-2017 (per SUNY Annual Report) (Millions) 6

Trends and Benchmark Analysis FLCC – Funding Formula Composition of Revenues by Source Finger Lakes Community College Average % of % of C.C. SUNY 2016-17 Total 2015-16 Total 2015-16* FORMULA Student Share $ 18,321,050 42.4% $ 18,564,245 44.5% 42.2% 33.3% State Share 12,964,382 30.0% 12,826,591 30.8% 27.1% 40.0% Local Share: Sponsor 3,704,228 3,704,228 Chargebacks 27.6% 24.7% 30.7% 26.7% and other 8,222,909 6,608,772 $ 43,212,569 100.0% $ 41,703,836 100.0% 100.0% 100.0% 7

Trends and Benchmark Analysis Current Unrestricted Expenditures Per Full Time Equivalent Students (FTEs) Net Operating Net Total Funded Costs per Operating Costs FTEs Funded FTEs (per annual report) 2016-17 Finger Lakes $ 42,381,421 4,573 $ 9,268 2015-16 Hudson Valley $ 89,923,009 8,989 $ 10,004 2015-16 Broome $ 49,484,170 5,114 $ 9,676 2015-16 Corning $ 26,525,863 2,936 $ 9,035 2015-16 Finger Lakes $ 42,276,940 4,691 $ 9,012 2015-16 Niagara $ 43,020,553 4,774 $ 9,011 2015-16 Genesee $ 37,753,784 4,303 $ 8,774 2015-16 Erie $ 100,572,104 11,874 $ 8,470 2015-16 Monroe $ 113,809,370 13,532 $ 8,410 2015-16 Herkimer $ 20,644,733 2,536 $ 8,141 2015-16 Onondaga $ 68,865,192 8,483 $ 8,118 2015-16 Mohawk Valley $ 43,286,352 5,452 $ 7,940 2015-16 Schenectady $ 27,134,041 3,680 $ 7,373 Average of all NYS 2015-16 Community Colleges N/A N/A $ 11,314 8

Trends and Benchmark Analysis Fund Balance as a Percent of Current Unrestricted Expenditures Fund Net Balance Operating Costs Fund Balance Percentage (per annual report) (per annual report) 2016-17 Finger Lakes $ 42,381,421 $ 6,391,571 15.1% 2015-16 Herkimer $ 20,644,733 $ 7,028,151 34.0% 2015-16 Niagara $ 43,020,553 $ 13,710,382 31.9% 2015-16 Genesee $ 37,753,784 $ 7,834,525 20.8% 2015-16 Corning $ 26,525,863 $ 5,324,483 20.1% 2015-16 Schenectady $ 27,134,041 $ 4,092,655 15.1% 2015-16 Erie $ 100,572,104 $ 14,492,438 14.4% 2015-16 Finger Lakes $ 42,276,940 $ 5,560,421 13.2% 2015-16 Mohawk Valley $ 43,286,352 $ 5,650,521 13.1% 2015-16 Monroe $ 113,809,370 $ 11,428,533 10.0% 2015-16 Onondaga $ 68,865,192 $ 5,552,017 8.1% 2015-16 Broome $ 49,484,170 $ 3,466,639 7.0% 2015-16 Hudson Valley $ 89,923,009 $ 5,536,924 6.2% 2015-16 Average of all NYS Community Colleges N/A N/A 13.6% Note: Fund balance consists of the following at August 31, 2017: Undesignated $ 5,320,739 Designated 1,070,832 $ 6,391,571 9

Trends and Benchmark Analysis Distribution of Expenses Public Academic Student Institutional Operation and Instruction Service Support Services Support Maintenance 2016-17 Finger Lakes 47.9% 0.1% 7.1% 9.5% 20.7% 14.7% 2015-16 Corning 52.2% 0.0% 9.0% 5.7% 22.6% 10.5% 2015-16 Hudson Valley 49.7% 0.0% 5.4% 4.6% 27.8% 12.5% 2015-16 Finger Lakes 49.5% 0.1% 7.1% 9.4% 20.3% 13.7% 2015-16 Broome 50.0% 0.0% 11.5% 6.0% 21.2% 11.3% 2015-16 Niagara 47.3% 0.4% 7.9% 12.3% 17.3% 14.8% 2015-16 Onondaga 47.9% 0.0% 4.3% 8.9% 20.7% 18.2% 2015-16 Mohawk Valley 46.7% 1.6% 9.7% 9.1% 19.3% 13.6% 2015-16 Erie 45.7% 0.0% 6.7% 12.3% 21.4% 13.9% 2015-16 Monroe 40.1% 0.3% 11.8% 11.6% 19.1% 17.1% 2015-16 Schenectady 40.8% 1.3% 15.8% 9.3% 14.2% 18.6% 2015-16 Genesee 35.4% 0.1% 13.2% 16.7% 22.3% 12.3% 2015-16 Herkimer 34.9% 0.0% 13.7% 10.2% 28.7% 12.5% Average of all NYS 2015-16 Community Colleges 46.4% 0.2% 9.0% 9.7% 20.3% 14.4% 10

FINGER LAKES COMMUNITY COLLEGE FINANCIAL DASHBOARD FOR THE YEARS ENDED AUGUST 31, 2015 THROUGH 2017 2017-2016 2016-2015 2017 2016 % Change 2015 % Change I. Operations: Total State-aidable FTEs 4,147 4,475 -7.3% 4,692 -4.6% Net tuition and fees $ 11,509,966 $ 10,242,936 12.4% $ 9,482,931 8.0% Other operating revenue $ 6,427,362 $ 6,895,917 -6.8% $ 7,951,304 -13.3% Nonoperating revenue, net $ 32,039,454 $ 31,928,838 0.3% $ 32,905,070 -3.0% Capital appropriations $ 2,245,922 $ 7,248,148 -69.0% $ 10,916,357 -33.6% Personnel costs $ 33,442,119 $ 33,926,252 -1.4% $ 34,303,608 -1.1% Non-personnel costs 19,464,383 18,408,296 5.7% 18,297,648 0.6% Total operating expenses $ 52,906,502 $ 52,334,548 1.1% $ 52,601,256 -0.5% Inc (dec) in unrestricted net position $ 831,151 $ (572,084) $ 189,952 II. Financial Position Total assets $ 102,249,147 $ 103,326,242 -1.0% $ 99,365,137 4.0% Total liabilities and deferred inflows $ 7,820,754 $ 8,214,051 -4.8% $ 8,234,238 -0.2% Net position: Undesignated $ 5,320,739 $ 5,162,411 3.1% $ 5,415,945 -4.7% Board designated $ 1,070,832 $ 398,009 169.0% $ 716,559 -44.5% Net investment in capital assets $ 88,036,822 $ 89,551,771 -1.7% $ 84,998,395 5.4% III. Key Ratios Primary reserve ratio (a) 0.101 0.099 0.103 Net income ratio (b) 0.156 (0.106) 0.036 Return on revenue ratio (c) 1.663% -1.166% 0.377% Current ratio (d) 2.148 2.011 2.230 Note: Excludes the impact of GASB Statements No. 68 & 71. (a) The Primary Reserve Ratio measures the financial strength of the College by comparing expendable undesignated net position to total expenses. Undesignated net position represent those assets that the College can access relatively quickly and use to satisfy its obligations. This ratio provides a snapshot of financial strength and flexibility by indicating how long the institution could function using its expendable reserves without relying on additional net assets generated by operations. Trend analysis indicates whether an institution has increased its net worth in proportion to its growth. (b) The Net Income Ratio measures total economic return. This ratio is calculated by dividing the College's increase in unrestricted fund balance by the prior year total unrestricted net position. This ratio provides a broad measure of the change in the College's unrestricted net position over a single year. Thus, the ratio provides the most comprehensive measure of the growth or decline in total net position of the College over a specific period of time. (c) The Return on Revenue (ROR) is a tool for measuring the profitability performance of the College from year to year. This ratio compares the change in net position as a percentage of revenues. (d) The Current Ratio reflects the College's ability to satisfy its short-term liabilities (payables and accrued expenses) with its short-term assets (cash and receivables). The current ratio is calculated by dividing current assets by current liabilities. The higher the current ratio, the more capable the College is of paying its current obligations. A ratio less than 1.00 suggests that the College would be unable to satisfy its current obligations without additional financing or revenue streams. 11