{Northwestern Michigan College} Board of Trustees End of Audit Presentation October 22, 2018
Northwestern Michigan College Presentation to Board of Trustees 2 • 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
Northwestern Michigan College 2018 Impact of GASB 75 3 • 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 PLANTE MORAN
Northwestern Michigan College Presentation to Board of Trustees 4 • 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
Northwestern Michigan College Revenues (all funds) 5 25 20.6 20.4 19.4 20 15 13.2 13.1 Millions 12.8 12.4 11.4 9.8 10 7.8 6.1 6 4.6 4.4 4.1 5 3.2 2.8 2.5 1.9 1.5 1.4 0.7 0.1 0.1 0 2016 2017 2018 Year Tuition and Fees State Appropriations Property Taxes Grants Auxiliary Investment Income Support from Foundation All Other Revenues were $59.3, $59.4, and $61.6 million for 2016, 2017, and 2018, respectively.
Northwestern Michigan College Expenditures (all funds) 6 20 18.7 18.5 18 18 16 14 12.4 11.1 12 10.9 Millions 10 7.4 7.4 7.4 7.2 8 6.5 6.3 5.2 5.1 5.1 6 4.8 4.6 4.6 3.7 3.2 3.1 4 2.9 2.8 2.7 2 0.8 0.6 0.6 0 2016 2017 2018 Year Instruction Public Services Instructional Support Student Services Institutional Administration Plant Operations Depreciation Information technology Interest expense Expenditures were $61.2, $60.1, and $60.3 million for 2016, 2017, and 2018, respectively.
Northwestern Michigan College Assets (All Funds) 7 2018 Cash and cash Deferred Outflow equivalents 10% 5% Investments 21% Receivables 4% Other Assets 1% Property and equipment 59% Assets = $105,108,421 Deferred Outflow of Resources related to Net Pension Liability = $11,688,356
Northwestern Michigan College Liabilities and Net Position (All Funds) 8 2018 Net position Current liabilities 9% 9% Deferred inflows 5% Long term debt Net OPEB liability obligations 14% 22% Net pension liability 41% Liabilities = $100,863,026 Deferred Inflows of Resources = $5,688,433 Net Position = $10,245,318
{Thank you} We appreciate the opportunity to serve Northwestern Michigan College. Katie Thornton, Partner Becky Donovan, Manager
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