COMMUNITY COLLEGE CAPITAL IMPROVEMENT ...COMMUNITY COLLEGE CAPITAL IMPROVEMENT REVENUE BONDS CUSIP Numbers Maturity Date Series 2006A Dated 11/01/2006 Series 2008A Dated 7/15/2008

COMMUNITY COLLEGE CAPITAL IMPROVEMENT REVENUE BONDS

CUSIP Numbers

Maturity DateSeries 2006A

Dated 11/01/2006Series 2008A

Dated 7/15/2008Series 2010A

Dated 6/17/2010

7/01/16 34161CAJ6 34161CBF3 34161CBZ9

7/01/17 34161CAK3 34161CBG1 34161CCA3

7/01/18 34161CAL1 34161CBH9 34161CCB1

7/01/19 34161CAM9 34161CBJ5 34161CCC9

7/01/20 34161CAN7 34161CBK2 34161CCD7

7/01/21 34161CAP2 34161CBL0 34161CCE5

7/01/22 - 34161CBM8 34161CCF2

7/01/23 34161CAQ0 34161CBN6 34161CCG0

7/01/24 - 34161CBP1 34161CCH8

7/01/25 34161CAR8 34161CBQ9 34161CCJ4

7/01/26 - 34161CBR7 34161CCK1

7/01/27 34161CAS6 34161CBS5 34161CCL9

7/01/28 - 34161CBT3 34161CCM7

7/01/29 - - 34161CCN5

7/01/30 - - 34161CCP0

7/01/31 - - -

7/01/32 - - -

Legshare\SEC\2015ContinuingDisclosureReporting\CCCI_115.wpd

FLORIDA COLLEGE SYSTEM CAPITAL IMPROVEMENT REVENUE BONDS

Maturity DateSeries 2012A

Dated 3/15/2012

7/01/16 34161CCT2

7/01/17 34161CCU9

7/01/18 34161CCV7

7/01/19 34161CCW5

7/01/20 34161CCX3

7/01/21 34161CCY1

7/01/22 34161CCZ8

7/01/23 34161CDA2

7/01/24 34161CDB0

7/01/25 34161CDC8

7/01/26 34161CDD6

7/01/27 34161CDE4

7/01/28 34161CDF1

7/01/29 34161CDG9

7/01/30 34161CDH7

7/01/31 34161CDJ3

7/01/32 34161CDK0


ANNUAL FINANCIAL INFORMATIONAND OPERATING DATA

SUBMITTED PURSUANT TO RULE 15c2-12OF THE SECURITIES AND EXCHANGE COMMISSION

FOR THE

STATE OF FLORIDADEPARTMENT OF EDUCATION

COMMUNITY COLLEGE CAPITAL IMPROVEMENTREVENUE BONDS,

SERIES 2006ASERIES 2008ASERIES 2010A

STATE OF FLORIDADEPARTMENT OF EDUCATION

FLORIDA COLLEGE SYSTEM CAPITAL IMPROVEMENTREVENUE BONDS,

SERIES 2012A

For Fiscal Year Ending June 30, 2015


TABLE OF CONTENTS

PageI. Historical Capital Improvement Fees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1II. Florida College System Historical Summary of Revenue Sources.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1III. Historical Material Participant Student Enrollment in Capital Improvement Fee-Generating Programs. . . . 2IV. Historical Material Participant Resident vs. Out-of-State FTE Student Enrollment in

Fee-Generating Programs.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2V. Resident Material Participant Student Tuition and Capital Improvement Fees. . . . . . . . . . . . . . . . . . . . . . . 3VI. Out-of-State Material Participant Student Tuition and Capital Improvement Fees. . . . . . . . . . . . . . . . . . . . 3VII. Material Participant Current Year Operating Budget Revenues by Source. . . . . . . . . . . . . . . . . . . . . . . . . . 4VIII. Historical Debt Service Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Draft Statement of Net Position for Fiscal Year ended June 30, 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . ATTACHEDDraft Statement of Revenues, Expenses and Changes in Net Position for Fiscal Year ended June 30, 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ATTACHEDBroward College Audited Financial Statements for Fiscal Year 2014-15Florida SouthWestern State College (formerly Edison State College) Audited Financial Statements for Fiscal Year 2014-15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ATTACHEDGulf Coast State College Audited Financial Statements for Fiscal Year 2014-15. . . . . . . . . . . . . . . . . . . ATTACHEDPalm Beach State College Audited Financial Statements for Fiscal Year 2014-15. . . . . . . . . . . . . . . . . . ATTACHEDSanta Fe College Audited Financial Statements for Fiscal Year 2014-15. . . . . . . . . . . . . . . . . . . . . . . . . ATTACHEDSeminole State College Audited Financial Statements for Fiscal Year 2014-15. . . . . . . . . . . . . . . . . . . . ATTACHEDSt. Petersburg College Audited Financial Statements for Fiscal Year 2014-15. . . . . . . . . . . . . . . . . . . . . ATTACHEDTallahassee Community College Audited Financial Statements for Fiscal Year 2014-15. . . . . . . . . . . . . ATTACHED


I. Historical Capital Improvement Fees.

Historical Capital Improvement Fees1

Fiscal Year Capital Improvement Fees2Percentage

Increase3

2010-11 $25,775,528 15.0%

2011-12 $28,330,937 9.9%

2012-13 $31,097,169 9.8%

2013-14 $34,674,391 11.5%

2014-15 $36,172,794 16.3%

__________________1 Source: Florida Department of Education, Division of Florida Colleges. 2 Collected pursuant to Section 1009.23(11), Florida Statutes.3 Increases in annual revenues collected were primarily due to increases in annual fee rates.

II. Florida College System Historical Summary of Revenue Sources.

Florida College SystemHistorical Summary of Revenue Sources

(dollars in millions)Fiscal Year Ended June 30,

Fund Source 2011 2012 2013 2014 2015General Revenue $889.6 $893.1 $871.0 $895.4 $877.5Lottery Revenue 126.7 130.4 180.8 204.9 255.0Federal Stabilization Funds 83.0 _____-_ - - -Total State & Federal Funds $1,099.3 $1,023.5 $1,051.8 $1,100.3 $1,132.4Student Tuition and Fees 836.6 893.2 873.3 852.0 825.6Other Revenue 41.4 44.6 31.3 38.1 30.4Total Operating Budget1 $1,977.3 $1,961.3 $1,956.4 $1,990.4 $1,988.4 % State Funded 55.6% 52.2% 53.8% 55.3% 57.0%

Capital Outlay Funding $216.7 $26.7 $74.5 $83.2 $121.7Facility Enhancement Challenge Grant Program - - - - -

Source: Division of Florida Colleges.1 Total operating budget prior to 2011-12 does not include certain specific funding received from the Legislature which is notavailable for the general operation of the colleges. Beginning in 2011-12, all appropriated funds are included for reporting purposes.

1Legshare\SEC\2015ContinuingDisclosureReporting\CCCI_115.wpd

III. Historical Material Participant Student Enrollment in Capital Improvement Fee-Generating Programs.

Historical Material Participant Student Enrollment in Capital Improvement Fee-Generating ProgramsParticipating Florida College System Institutions (“PFCSI”) and Florida College System

Headcount and FTE1 Enrollment for Academic Years 2010-11 through 2014-15

Broward Florida SouthWestern3 Gulf Coast Palm Beach St. Petersburg Santa Fe Seminole Tallahassee PFCSI Total System Total5

Year Headcount FTE6 Headcount FTE6 Headcount FTE6 Headcount FTE6 Headcount FTE6 Headcount FTE6 Headcount FTE6 Headcount FTE6 Headcount FTE6 Headcount FTE6

2010-112 59,630 30,026 24,220 12,199 10,601 4,584 41,302 19,227 44,717 22,211 21,257 12,086 26,253 13,786 20,810 11,399 248,790 125,518 679,381 349,801

2011-124 62,415 30,666 23,799 11,820 10,270 4,617 41,388 19,657 45,558 22,308 21,298 12,008 26,895 13,754 21,627 11,816 253,250 126,646 685,332 349,374

2012-13 61,729 29,630 21,659 10,503 9,550 4,314 40,838 18,700 44,163 21,127 20,436 11,410 27,176 13,590 19,838 10,545 245,389 119,819 664,073 330,193

2013-14 62,498 30,032 21,041 10,129 9,041 4,090 40,849 18,594 43,415 20,530 19,940 10,955 25,865 12,479 18,449 9,819 241,098 116,629 650,272 320,575

2014-15 63,465 29,608 20,354 9,931 8,874 3,849 42,161 18,396 40,673 20,604 20,786 10,583 28,212 11,768 18,571 9,413 243,096 114,151 675,714 313,778

Source: Division of Florida Colleges.1 One FTE is equal to 30 credit hours.2 Beginning 2010-11, includes upper-division and excludes continuing workforce education.3 Formerly Edison State College.4 FY 2011-12 reflects St. Petersburg College’s mid-year increase in tuition and fees for the 2012 Spring term.5 These numbers represent the weighted mean for the System. Total tuition and capital improvement fee collections for the System were divided by the total number of students in the System to obtain the weighted mean.6 Other required fees include Student Financial Aid Fee, Student Activity Fee, and Technology Fee.

IV. Historical Material Participant Resident vs. Out-of-State FTE Student Enrollment in Fee-Generating Programs.

Historical Resident vs. Out-of-StateFTE1 Student Enrollment in Pledged Capital Improvement Fee-Generating Programs

Participating Florida College System InstitutionsAcademic Years 2010-11 through 2014-15

Broward Florida SouthWestern3 Gulf Coast Palm Beach St. Petersburg Santa Fe Seminole Tallahassee

Year Resident Out-of-State Resident Out-of-State Resident Out-of-State Resident Out-of-State Resident Out-of-State Resident Out-of-State Resident Out-of-State Resident Out-of-State

2010-112 29,090 936 11,953 246 4,443 141 18,506 721 21,479 732 11,543 543 13,425 361 10,875 524

2011-12 29,756 910 11,567 253 4,476 141 18,934 723 21,606 702 11,473 535 13,417 337 11,348 468

2012-13 28,815 815 10,271 232 4,164 150 18,043 657 20,571 556 10,878 532 13,260 330 10,154 391

2013-14 29,250 782 9,900 229 3,953 137 17,908 686 20,008 522 10,441 514 12,168 311 9,466 353

2014-15 28,828 780 9,736 195 3,718 131 17,802 594 20,111 493 10,054 529 11,493 275 9,049 364

Source: Division of Florida Colleges.1 One FTE is equal to 30 credit hours.2 Beginning 2010-11, includes upper-division and excludes continuing workforce education.3 Formerly Edison State College.


V. Resident Material Participant Student Tuition and Capital Improvement Fees.

Resident Student Tuition, Capital Improvement Fees (“CIF”), and Other Required FeesAcademic Yeas 2011-12 through-2015-16

Broward Florida SouthWestern4 Gulf Coast Palm Beach St. Petersburg Santa Fe Seminole Tallahassee System Average1

Year Tuition CIF

Other

Fees2 Tuition CIF

Other

Fees2 Tuition CIF

Other

Fees2 Tuition CIF

Other

Fees2 Tuition CIF

Other

Fees2 Tuition CIF

Other

Fees2 Tuition CIF

Other

Fees2 Tuition CIF

Other

Fees2 Tuition CIF

Other

Fees2

2011-123 75.40 7.50 15.00 78.84 7.88 15.76 72.92 7.29 14.59 76.92 7.62 11.46 77.45 7.10 15.04 76.65 7.66 14.05 78.84 7.88 15.76 76.80 7.00 13.03 77.39 7.57 14.59

2012-13 75.40 9.50 15.00 78.84 7.88 15.76 72.92 7.29 14.59 76.92 8.62 12.71 80.94 9.10 15.71 76.65 7.66 14.05 78.84 7.88 15.76 76.80 9.00 13.03 79.34 8.72 14.98

2013-14 75.40 11.50 15.00 81.21 9.88 16.27 72.29 7.29 14.59 76.92 8.62 12.71 80.94 11.10 15.71 76.65 9.66 15.16 79.78 7.88 14.82 76.80 9.00 13.03 79.59 9.50 15.03

2014-15 75.40 11.50 15.00 81.21 11.88 16.27 72.92 7.29 14.59 76.92 8.62 12.71 80.94 13.10 15.71 77.98 8.66 15.13 79.78 7.88 14.82 76.80 11.00 13.03 80.00 10.22 15.00

2015-16 80.00 13.50 16.00 81.21 13.88 16.27 72.92 7.29 14.59 76.92 10.62 13.46 80.94 15.10 15.71 77.98 8.66 15.13 79.78 7.88 14.82 76.80 11.00 13.03 80.52 11.11 15.11

Source: Division of Florida Colleges.1 These numbers represent the weighted mean for the System. Total tuition and capital improvement fee collections for the System were divided by the total number of students in the System to obtain the weighted mean.2 Other required fees include Student Financial Aid Fee, Student Activity Fee, and Technology Fee.3 Fiscal Year 2011-12 reflects St. Petersburg College’s mid-year increase in tuition and fees for the 2012 Spring term.4 Formerly Edison State College.

VI. Out-of-State Material Participant Student Tuition and Capital Improvement Fees.

Out-of-State Student Tuition, Capital Improvement Fees (“CIF”), and Other Required FeesAcademic Years 2011-12 through 2015-16


Year

Tuition &Out

of State Fee CIF

Other

Fees1

Tuition & Out

of State Fee CIF

Other

Fees1

Tuition & Out

of State Fee CIF

Other

Fees1

Tuition & Out

of State Fee CIF

Other

Fees1

Tuition & Out

of State Fee CIF

Other

Fees1

Tuition & Out

of State Fee CIF

Other

Fees1

Tuition & Out

of State Fee CIF

Other

Fees1

Tuition & Out

of State Fee CIF

Other

Fees1

2011-122 301.80 13.60 37.60 315.53 31.55 39.44 294.34 24.69 36.73 303.18 17.35 28.47 309.96 14.96 38.30 306.77 30.67 35.97 315.53 25.00 39.44 307.20 30.72 36.07

2012-13 301.80 15.60 37.60 315.53 31.55 39.44 294.34 24.69 36.73 303.18 21.35 33.47 323.91 16.96 40.03 306.77 30.67 35.97 315.53 25.00 39.44 307.20 32.72 36.07

2013-14 301.80 17.60 37.60 325.00 65.00 40.63 294.34 24.69 36.73 303.18 21.35 33.47 323.91 18.96 40.03 306.77 32.67 38.16 316.47 25.00 38.50 307.20 32.72 36.07

2014-15 301.80 17.60 37.60 325.00 67.00 40.63 294.34 24.69 36.73 303.18 21.35 33.47 323.91 20.96 40.03 309.10 31.67 37.13 316.47 25.00 38.50 307.20 33.00 36.07

2015-16 306.40 19.60 38.60 325.00 65.00 40.63 294.34 24.69 36.73 303.57 23.35 36.08 323.91 22.96 40.03 309.10 31.67 37.13 316.47 25.00 38.50 307.20 33.00 36.07

Source: Division of Florida Colleges.1 Other required fees include Student Financial Aid Fee, Student Activity Fee, and Technology Fee.2 Fiscal Year 2011-12 reflect St. Petersburg College’s mid-year increase in tuition and fees for the 2012 Spring term.3 Formerly Edison State College.


VII. Material Participant Current Year Operating Budget Revenues by Source.

Participating Florida College System InstitutionsFiscal Year 2014-15 Operating Budget Revenues by Source - Final


General Revenue $66,517,926 $24,245,513 $16,779,858 $44,064,312 $53,482,092 $27,727,122 $29,951,477 $24,544,546

Lottery Revenue $19,328,947 $ 7,045,323 $ 4,875,934 $12,804,319 $15,540,962 $ 8,057,017 $ 8,703,376 $ 7,132,216

Total State Resources $85,846,873 $31,290,836 $21,655,792 $56,868,631 $69,023,054 $35,784,139 $38,654,853 $31,676,762

Tuition and Fees $73,160,644 $24,269,407 $ 8,569,878 $48,640,973 $53,892,863 $28,995,819 $31,277,647 $24,970,196

Other Revenues $ 2,963,248 $ 1,156,893 $ 272,040 $ 2,283,612 $ 2,815,162 $ 1,948,641 $ 640,869 $392,544

Total $161,970,765 $56,717,136 $30,497,710 $107,793,216 $125,731,079 $66,728,599 $70,573,369 $57,039,503

Unallocated Year End Fund Balance3 $23,507,377 $6,168,177 $2,034,760 $20,637,522 $15,054,022 $34,590,616 $4,321,151 $10,093,473

Source: Division of Florida Colleges.1 Formerly Edison State College.

Participating Florida College System InstitutionsFiscal Year 2015-16 Operating Budget Revenues by Source


General Revenue $67,042,695 $23,842,918 $16,548,921 $43,931,556 $53,833,569 $28,107,147 $34,087,106 $24,555,816

Lottery Revenue $18,563,942 $ 6,765,992 $ 4,682,066 $12,297,220 $14,934,524 $ 7,737,107 $ 8,357,450 $ 6,851,244

Total State Resources $85,606,637 $30,608,910 $21,230,987 $56,228,776 $68,768,093 $35,844,254 $42,444,556 $31,407,060

Tuition and Fees2 $77,177,135 $24,269,407 $ 8,569,878 $49,033,433 $53,892,863 $28,995,819 $31,277,647 $24,970,196

Other Revenues3 $ 4,154,465 $ 1,068,894 $ 241,220 $ 2,655,000 $ 2,757,832 $ 2,090,721 $ 679,000 $ 164,592

Total4 $166,938,237 $55,947,211 $30,042,085 $107,917,209 $125,418,788 $66,930,794 $74,401,203 $56,541,848

Unallocated Year End Fund Balance3 $33,759,091 $4,346,684 $2,675,402 $13,750,000 $16,290,588 $13,869,658 $4,253,394 $3,693,550

1 Formerly Edison State College.2 Total operating budget includes all appropriated funds.3 Estimate based on most recently available enrollment data.4 Estimated based on most recently available operating budgets.


VIII. Historical Debt Service Coverage.

Fiscal Year

Participating Community Colleges

Capital Improvement Fees* Debt Service Coverage Ratio 2010-11 $25,775,528 $8,590,315 3.00x

2011-12 $28,330,937 $8,664,393 3.27x

2012-13 $31,097,169 $9,254,735 3.36x

2013-14 $34,674,391 $9,265,835 3.74x

2014-15 $36,172,794 $9,255,448 3.91x

* Includes the Capital Improvement Fees of only the Participating Community Colleges who had bonds outstanding in each Fiscal Year.


2014-15 DRAFT SNP

FS Section Name LineName BROWARD COLLEGE

FLORIDA SOUTHWESTERN STATE COLLEGE

GULF COAST STATE COLLEGE

PALM BEACH STATE COLLEGE SANTA FE COLLEGE

SEMINOLE STATE COLLEGE

OF FLORIDA ST PETERSBURG

COLLEGE

TALLAHASSEE COMMUNITY

COLLEGE

TOTAL PARTICIPATING

COLLEGES

Current Assets Cash and Cash Equivalents 6,770,006 7,286,004 23,786,258 27,787,533 36,141,821 15,122,056 19,517,479 22,992,622 159,403,779

Current Assets Restricted Cash and Cash Equivalents 4,019,098 2,786,009 - 102,739 70,202,885 2,277,496 14,119,410 4,009,771 97,517,408

Current Assets Investments 50,112 7,223,214 - 11,991,092 998,985 - 32,212,747 3,447,480 55,923,630

Current Assets Restricted Investments - 4,581,810 - - 3,424,196 - - - 8,006,006

Current Assets Accounts Receivable, Net 4,165,845 3,621,318 1,499,563 3,151,366 4,113,659 3,945,464 2,009,489 2,376,405 24,883,109

Current Assets Notes Receivable, Net 747,838 170,474 62,229 - 4,436 13,665 - 12,862 1,011,504

Current Assets Due from Other Governmental Agencies 13,041,563 10,176,902 5,323,793 8,912,022 10,465,499 3,350,192 10,785,021 6,788,438 68,843,430

Current Assets Due from Component Unit/College 824,959 - 109,115 26,947 79,156 202,902 97,568 - 1,340,647

Current Assets Inventories 23,854 - 1,369,928 19,592 96,634 - 162,014 10,486 1,682,508

Current Assets Prepaid Expenses 40,060 1,337,169 339,729 1,504,838 62,341 163,503 156,080 11,863 3,615,583

Current Assets Deposits 472,820 - - - 5,000 19,856 - - 497,676

Current Assets Other Assets - 5,071,900 50,838 44,667 - 4,389 1,182 - 5,172,976 Total Current Assets 30,156,155 42,254,800 32,541,453 53,540,796 125,594,612 25,099,523 79,060,990 39,649,927 427,898,256

Noncurrent Assets Restricted Cash and Cash Equivalents 1,260,300 15,466,316 32,022,898 30,431,151 13,658,457 17,480,405 6,841,223 7,536,667 124,697,417

Noncurrent Assets Investments 124,189,968 8,305,630 - 19,554,167 7,807,456 932,385 6,596,706 69,843 167,456,155

Noncurrent Assets Restricted Investments 25,802,711 43,277,363 465,859 54,254 42,550,065 14,591,886 34,535,620 9,929,989 171,207,747

Noncurrent Assets Loans and Notes Receivable, Net - - - - - - 1,075,187 - 1,075,187

Noncurrent Assets Depreciable Capital Assets, Net 188,364,330 144,533,676 88,759,831 219,748,702 84,685,733 144,226,933 251,579,774 112,060,612 1,233,959,591

Noncurrent Assets Nondepreciable Capital Assets 33,971,699 6,396,981 4,037,152 12,355,309 13,668,524 34,238,095 26,918,353 15,272,227 146,858,340

Noncurrent Assets Other Assets - 4,172,238 - - 4,709,257 1,947,706 54,250 838,360 11,721,811 Total Noncurrent Assets 373,589,008 222,152,204 125,285,740 282,143,583 167,079,492 213,417,410 327,601,113 145,707,698 1,856,976,248

Total Assets 403,745,163 264,407,004 157,827,193 335,684,379 292,674,104 238,516,933 406,662,103 185,357,625 2,284,874,504 Deferred Outflow Related to Service Concession Arrangement - - - - - - - - - Deferred Outflows of Resources - Pension FRS 10,270,423 3,199,254 2,064,499 7,140,418 4,992,868 4,782,498 9,086,340 3,755,158 45,291,458 Deferred Outflows of Resources - Pension HIS 2,335,065 885,223 450,101 1,528,882 795,569 877,123 1,874,960 892,219 9,639,142 Accumulated Decrease in Fair Value of Securities - 1,228,135 - - - - - - 1,228,135

Total Deferred Outflow of Resources 12,605,488 5,312,612 2,514,600 8,669,300 5,788,437 5,659,621 10,961,300 4,647,377 56,158,735

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 403,745,163 269,719,616 157,827,193 335,684,379 292,674,104 238,516,933 406,662,103 185,357,625 2,341,033,239

Current Liabilitites Accounts Payable 3,567,639 2,905,242 439,359 635,891 1,716,089 1,184,375 2,399,035 2,002,312 14,849,942

Current Liabilitites Accrued Interest Payable - 27,937 - - - - - - 27,937

Current Liabilitites Salary and Payroll Taxes Payable 1,407,838 1,520,394 578,216 2,699,879 4,433,549 1,562,489 1,106,641 424,429 13,733,435

Current Liabilitites Retainage Payable 1,314,581 17,995 25,429 66,524 136,496 125,044 497,705 46,461 2,230,235

Current Liabilitites Due to Other Governmental Agencies 782,652 3,589 - - 470 2,622 - - 789,333

Current Liabilitites Due to Component Unit/College - 319,598 - - 3,033 202,902 - - 525,533

Current Liabilitites Deferred Revenue 2,116,703 406,605 - 8,251 5,221,785 39,148 961,494 143,413 8,897,399

Current Liabilitites Estimated Insurance Claims Payable 6,238,843 - - - - - 1,502,227 - 7,741,070

Current Liabilitites Deposits Held for Others 2,983,106 158,380 - 1,355,732 67,559,546 375,416 6,779,949 841,634 80,053,763

Current Liabilitites Bonds Payable 1,336,000 1,404,936 239,000 1,195,000 725,000 394,000 1,585,000 876,000 7,754,936

Current Liabilitites Notes and Loans Payable 2,142,857 1,100,000 264,723 1,285,536 - - 187,770 449,664 5,430,550

Current Liabilitites Installment Purchases Payable - - - - - - - - -

Current Liabilitites Capital Leases Payable - - - - - 170,913 1,184,464 364,793 1,720,170

Current Liabilitites Special Termination Benefits Payable - 57,712 - - - - - 381,542 439,254

Current Liabilitites Compensated Absences Payable 1,727,237 160,650 56,533 591,922 877,709 150,287 1,152,485 767,839 5,484,662

Current Liabilitites FRS Net Pension Liability - - - - - - - - -

Current Liabilitites HIS Net Pension Liability 1,026,581 - 182,130 - 418,766 433,590 890,595 404,805 3,356,467

Current Liabilitites Other Long-Term Liabilities 66,667 - - 506,450 - 100,000 - - 673,117 Total Current Liabilities 24,710,704 8,083,038 1,785,390 8,345,185 81,092,443 4,740,786 18,247,365 6,702,892 153,707,803

Noncurrent Liabilities Bonds Payable 14,623,000 37,689,172 5,125,000 16,487,000 9,666,000 4,241,000 23,105,000 11,960,000 122,896,172

Noncurrent Liabilities Notes and Loans Payable 12,857,143 - 1,756,787 2,289,231 - 514,078 5,454,309 22,871,548

Noncurrent Liabilities Installment Purchases Payable - - - - - - - - -

Noncurrent Liabilities Capital Leases Payable - - - - - - 1,433,225 721,287 2,154,512

Noncurrent Liabilities Special Termination Benefits Payable - 107,300 - 1,084,540 - - - 577,227 1,769,067

Noncurrent Liabilities Compensated Absences Payable 14,024,629 3,796,570 2,433,732 9,311,430 7,754,443 5,530,542 10,372,362 5,254,968 58,478,676

Noncurrent Liabilities FRS Net Pension Liability 12,341,886 4,263,638 2,655,540 8,590,523 6,155,532 6,174,870 10,822,992 6,622,032 57,627,013

Noncurrent Liabilities HIS Net Pension Liability 22,194,324 9,483,528 5,243,189 17,291,913 10,029,414 11,401,124 20,588,923 11,653,625 107,886,040

Noncurrent Liabilities Other Postemployment Benefits Payable 4,353,151 214,460 307,755 572,703 519,573 784,313 4,491,568 2,768,993 14,012,516

Noncurrent Liabilities Other Long-Term Liabilities 1,805,557 4,037,376 - - 20,199,644 500,000 - - 26,542,577 Total Noncurrent Liabilities 82,199,690 59,592,044 17,522,003 55,627,340 54,324,606 28,631,849 71,328,148 45,012,441 414,238,121

Total Liabilities 106,910,394 67,675,082 19,307,393 63,972,525 135,417,049 33,372,635 89,575,513 51,715,333 567,945,924 DEFERRED INFLOWS OF RESOURCES

Deferred Inflow Related to Service Concession Arrangement 800,000 - - - - - - - 800,000

Deferred Inflows of Resources - Pension FRS 21,352,067 7,376,303 4,594,215 14,862,025 10,649,373 10,682,827 18,724,306 11,456,440 99,697,556 Deferred Inflows of Resources - Pension HIS - - - - (60,492) 102,931 - 1,133,331 1,175,770

Accumulated Increase in Fair Value of Securities - - - - - - - - -

TOTAL DEFERRED INFLOWS OF RESOURCES 22,152,067 7,376,303 4,594,215 14,862,025 10,588,881 10,785,758 18,724,306 12,589,771 101,673,326

Net Position Invested in Capital Assets, Net of Related Debt 206,377,029 115,707,599 87,135,290 210,847,244 87,763,257 173,067,010 250,488,589 108,010,785 1,239,396,803

Net Position Restricted for Endowment-Nonexpendable 37,724,565 19,549,048 14,643,791 18,198,492 24,562,076 6,258,985 27,430,633 4,919,475 153,287,065

Net Position Restricted for Endowment-Expendable - 27,871,457 - - - - - - 27,871,457

Net Position Grants and Loans 6,425,856 1,700,102 1,030,097 1,641,592 2,515,945 1,200,089 29,707,017 2,730,567 46,951,265

Net Position Scholarships 28,539,417 1,181,195 14,630,358 12,904,189 1,287,201 11,155,622 9,992,007 8,435,568 88,125,557

Net Position Capital Projects 20,446,352 26,390,139 17,363,001 37,731,926 23,194,184 19,107,673 18,915,456 14,856,683 178,005,414

Net Position Restricted for Debt Service 48,911 1,810,588 7,076 56,430 4,056,293 27,253 337,198 846,904 7,190,653

Net Position Other 751,377 - 1,723,531 - - - - - 2,474,908

Net Position Unrestricted (13,025,317) 458,103 (92,959) (15,860,744) 9,077,655 (10,798,471) (27,547,317) (14,100,084) (71,889,134) Total Net Position 287,288,190 194,668,231 136,440,185 265,519,129 152,456,611 200,018,161 309,323,583 125,699,898 1,671,413,988

Total Liabilities, Deferred Inflows, and Net Position 416,350,651 269,719,616 160,341,793 344,353,679 298,462,541 244,176,554 417,623,402 190,005,002 2,341,033,238

Participating Florida College System InstitutionsDraft Statement of Net Position

June 30, 2015

2014-15 DRAFT SRECNP

FSSectionName LineName BROWARD

COLLEGE

FLORIDA SOUTHWESTER

N STATE COLLEGE


PALM BEACH STATE COLLEGE

SANTA FE COLLEGE

SEMINOLE STATE COLLEGE

OF FLORIDA ST PETERSBURG

COLLEGE

TALLAHASSEE COMMUNITY

COLLEGE

TOTAL PARTICIPATING

COLLEGES

Operating Revenues Student Tuition and Fees 40,258,878 18,551,715 4,749,343 41,524,086 25,864,032 23,789,638 42,194,636 16,869,593 213,801,921

Operating Revenues Federal Grants and Contracts 8,869,445 1,379,952 2,198,562 4,691,339 2,762,874 2,618,793 517,317 16,429,992 39,468,274

Operating Revenues State and Local Grants and Contracts 2,267,737 - 729,696 1,116,358 647,764 1,216,271 1,746,981 7,087,851 14,812,658

Operating Revenues Nongovernmental Grants and Contracts 8,514,150 6,778,498 1,241,179 6,383,015 835,469 1,460,527 1,000,593 1,097,119 27,310,550

Operating Revenues Sales and Services of Educational Departments - 586,341 831,557 580,903 1,424,813 47,082 3,070,554 - 6,541,250

Operating Revenues Auxiliary Enterprises 6,866,555 4,085,159 1,474,567 1,262,130 1,100,652 2,359,114 3,434,449 5,116,009 25,698,635

Operating Revenues Other Operating Revenues 8,345,567 (107,541) 271,283 3,961,540 1,116,896 2,992,483 3,721,212 2,078,862 22,380,302

Total Operating Revenues 75,122,332 31,274,124 11,496,187 59,519,371 33,752,500 34,483,908 55,685,742 48,679,426 350,013,590

Operating Expenses Personnel Services 147,771,307 55,649,263 25,495,557 96,362,918 59,095,669 62,648,071 125,970,610 56,922,707 629,916,102

Operating Expenses Scholarships and Waivers 60,031,524 17,405,983 5,189,336 30,344,433 19,070,316 22,294,860 38,065,889 17,895,580 210,297,921

Operating Expenses Utilities and Communications 5,608,693 2,790,480 1,985,038 3,169,808 2,398,453 2,718,414 6,536,432 2,283,069 27,490,387

Operating Expenses Contractual Services 19,428,322 9,022,444 3,518,014 11,774,699 6,494,968 3,443,642 12,658,008 15,498,499 81,838,596

Operating Expenses Other Services and Expenses 22,857,151 6,399,502 2,635,191 9,096,320 4,913,965 8,349,205 10,869,084 5,859,154 70,979,572

Operating Expenses Materials and Supplies 26,053,758 4,249,388 6,156,347 8,293,498 7,848,294 8,607,295 15,891,213 7,805,572 84,905,365

Operating Expenses Depreciation 10,089,713 6,155,539 4,379,583 11,330,507 6,236,277 6,462,775 10,651,353 5,240,888 60,546,635

Total Operating Expenses 291,840,468 101,672,599 49,359,066 170,372,183 106,057,942 114,524,262 220,642,589 111,505,469 1,165,974,578

Total Operating Loss (216,718,136) (70,398,475) (37,862,879) (110,852,812) (72,305,442) (80,040,354) (164,956,847) (62,826,043) (815,960,988)

Nonoperating Revenues (Expenses) State Noncapital Appropriations 86,831,353 35,609,665 21,630,792 57,051,399 36,078,418 39,001,370 69,507,154 31,676,762 377,386,913

Nonoperating Revenues (Expenses) Federal and State Student Financial Aid 103,558,199 27,039,769 11,390,525 47,260,644 25,652,848 33,602,208 61,228,292 29,216,207 338,948,692

Nonoperating Revenues (Expenses) Gifts and Grants 2,314,625 5,829,944 1,010,237 1,403,182 1,920,419 537,299 15,414,786 182,037 28,612,529

Nonoperating Revenues (Expenses) Investment Income 2,865,009 2,507,428 1,351,091 1,945,158 2,807,092 420,863 3,699,048 173,912 15,769,601

Nonoperating Revenues (Expenses) Net Gain (Loss) on Investments - (91,756) - - - (58,089) - - (149,845)

Nonoperating Revenues (Expenses) Other Nonoperating Revenues 457,378 160,475 - - - 21,241 29,603 19,074 687,771

Nonoperating Revenues (Expenses) Loss on Disposal of Capital Assets 104,711 (422,725) 8,449,514 110,085 14,788 - 34,001 - 8,290,374

Nonoperating Revenues (Expenses) Interest on Capital Asset-Related Debt (763,650) (1,820,503) (249,128) (688,537) (515,225) (239,976) (1,250,670) (1,029,152) (6,556,841)

Nonoperating Revenues (Expenses) Other Nonoperating Expenses (3,717,078) (492,706) (1,304,174) - (1,154) - - (844,556) (6,359,668)

Net Nonoperating Revenues (Expenses) 191,650,547 68,319,591 42,278,857 107,081,931 65,957,186 73,284,916 148,662,214 59,394,284 756,629,526

Loss Before Other Revenues, Expenditures, Gains or Losses (25,067,589) (2,078,884) 4,415,978 (3,770,881) (6,348,256) (6,755,438) (16,294,633) (3,431,759) (59,331,462)

Other Revenues, Expenses, Gains, or Losses State Capital Appropriations 5,040,495 7,536,811 5,183,140 7,404,045 9,095,598 6,705,205 4,433,484 939,843 46,338,621

Other Revenues, Expenses, Gains, or Losses Capital Grants, Contracts, Gifts, and Fees 9,974,499 3,677,679 1,200,230 5,081,853 4,411,364 3,343,237 7,764,186 4,812,488 40,265,536

Other Revenues, Expenses, Gains, or Losses Additions to Endowments 24,519 605,317 - - 598,730 - 330,180 - 1,558,746

Other Revenues, Expenses, Gains, or Losses Other Reveues - 549,382 - - - - - - 549,382

Total Other Revenues 15,039,513 12,369,189 6,383,370 12,485,898 14,105,692 10,048,442 12,527,850 5,752,331 88,712,285

Total Increase (Decrease) in Net Assets (10,028,076) 10,290,305 10,799,348 8,715,017 7,757,436 3,293,004 (3,766,783) 2,320,572 29,380,823

Beginning Net Assets Net Assets, Beginning of Year 297,316,266 184,377,926 125,640,837 256,804,114 144,699,175 196,725,157 313,090,367 123,379,326 1,642,033,168

Ending Net Assets 287,288,190 194,668,231 136,440,185 265,519,131 152,456,611 200,018,161 309,323,584 125,699,898 1,671,413,991

Participating Florida College System InstitutionsDraft Statement of Revenues, Expenses, and Changes in Net Position

June 30, 2015

Sherrill F. Norman, CPA

Auditor General

Report No. 2016-171

March 2016

BROWARD COLLEGE

For the Fiscal Year Ended

June 30, 2015

Financial Audit

Board of Trustees and President

During the 2014-15 fiscal year, J. David Armstrong Jr., served as President and the following

individuals served as Members of the Board of Trustees:

John A. Benz, Vice Chair to 8-11-14, Chair from 8-12-14 Pamela Stephany, Vice Chair from 8-12-14 Sean C. Guerin, Chair to 8-11-14 Gloria M. Fernandez David R. Maymon from 6-12-15 Elizabeth A. Tonkin to 6-11-15

The Auditor General conducts audits of governmental entities to provide the Legislature, Florida’s citizens, public entity

management, and other stakeholders unbiased, timely, and relevant information for use in promoting government

accountability and stewardship and improving government operations.

The team leader was Jenna L. Veidt and the audit was supervised by Diana G. Garza, CPA.

Please address inquiries regarding this report to Jaime N. Hoelscher, CPA, Audit Supervisor, by e-mail at

[email protected] or by telephone at (850) 412-2868.

This report and other reports prepared by the Auditor General are available at:

www.myflorida.com/audgen

Printed copies of our reports may be requested by contacting us at:

State of Florida Auditor General

Claude Pepper Building, Suite G74 ∙ 111 West Madison Street ∙ Tallahassee, FL 32399-1450 ∙ (850) 412-2722

BROWARD COLLEGE

TABLE OF CONTENTS

Page No.

SUMMARY ........................................................................................................................................... i

INDEPENDENT AUDITOR’S REPORT ................................................................................................ 1

Report on the Financial Statements ................................................................................................. 1

Other Reporting Required by Government Auditing Standards ....................................................... 3

MANAGEMENT’S DISCUSSION AND ANALYSIS .............................................................................. 4

BASIC FINANCIAL STATEMENTS

Statement of Net Position ................................................................................................................ 16

Statement of Revenues, Expenses, and Changes in Net Position .................................................. 18

Statement of Cash Flows ................................................................................................................. 20

Notes to Financial Statements ......................................................................................................... 22

OTHER REQUIRED SUPPLEMENTARY INFORMATION

Schedule of Funding Progress – Other Postemployment Benefits Plan .......................................... 46

Schedule of the College’s Proportionate Share of the Net Pension Liability – Florida Retirement System Pension Plan ................................................................................................... 46

Schedule of College Contributions – Florida Retirement System Pension Plan .............................. 46

Schedule of the College’s Proportionate Share of the Net Pension Liability – Health Insurance Subsidy Pension Plan.... ................................................................................................ 47

Schedule of College Contributions – Health Insurance Subsidy Pension Plan ................................ 47

Notes to Required Supplementary Information ................................................................................ 47

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ................................................ 49

Internal Control Over Financial Reporting ........................................................................................ 49

Compliance and Other Matters ........................................................................................................ 50

Purpose of this Report ..................................................................................................................... 50

Report No. 2016-171 March 2016 Page i

SUMMARY

SUMMARY OF REPORT ON FINANCIAL STATEMENTS

Our audit disclosed that the basic financial statements of Broward College (a component unit of the State

of Florida) were presented fairly, in all material respects, in accordance with prescribed financial reporting

standards.

SUMMARY OF REPORT ON INTERNAL CONTROL AND COMPLIANCE

Our audit did not identify any deficiencies in internal control over financial reporting that we consider to

be material weaknesses.

The results of our tests disclosed no instances of noncompliance or other matters that are required to be

reported under Government Auditing Standards issued by the Comptroller General of the United States.

AUDIT OBJECTIVES AND SCOPE

Our audit objectives were to determine whether Broward College and its officers with administrative and

stewardship responsibilities for College operations had:

Presented the College’s basic financial statements in accordance with generally accepted accounting principles;

Established and implemented internal control over financial reporting and compliance with requirements that could have a direct and material effect on the financial statements; and

Complied with the various provisions of laws, rules, regulations, contracts, and grant agreements that are material to the financial statements.

The scope of this audit included an examination of the College’s basic financial statements as of and for

the fiscal year ended June 30, 2015. We obtained an understanding of the College’s environment,

including its internal control, and assessed the risk of material misstatement necessary to plan the audit

of the basic financial statements. We also examined various transactions to determine whether they

were executed, in both manner and substance, in accordance with governing provisions of laws, rules,

regulations, contracts, and grant agreements.

An examination of Federal awards administered by the College is included within the scope of our

Statewide audit of Federal awards administered by the State of Florida.

AUDIT METHODOLOGY

The methodology used to develop the findings in this report included the examination of pertinent College

records in connection with the application of procedures required by auditing standards generally

accepted in the United States of America and applicable standards contained in Government Auditing

Standards, issued by the Comptroller General of the United States.

Report No. 2016-171 March 2016 Page 1

Phone: (850) 412-2722 Fax: (850) 488-6975

Sherrill F. Norman, CPA Auditor General

AUDITOR GENERAL STATE OF FLORIDA Claude Denson Pepper Building, Suite G74

111 West Madison Street Tallahassee, Florida 32399-1450

The President of the Senate, the Speaker of the House of Representatives, and the Legislative Auditing Committee

INDEPENDENT AUDITOR’S REPORT

Report on the Financial Statements

We have audited the accompanying financial statements of Broward College, a component unit of the

State of Florida, and its discretely presented component unit as of and for the fiscal year ended

June 30, 2015, and the related notes to the financial statements, which collectively comprise the

College’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with accounting principles generally accepted in the United States of America; this includes

the design, implementation, and maintenance of internal control relevant to the preparation and fair

presentation of financial statements that are free from material misstatement, whether due to fraud or

error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not

audit the financial statements of the discretely presented component unit, which represent 100 percent

of the transactions and account balances of the discretely presented component unit’s columns. Those

statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar

as it relates to the amounts included for the discretely presented component unit, is based solely on the

report of the other auditors. We conducted our audit 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 General of the United States. Those

standards require that we plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the financial statements. The procedures selected depend on the auditor’s judgment, including the

Report No. 2016-171 Page 2 March 2016

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s

preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness

of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of significant

accounting estimates made by management, as well as evaluating the overall presentation of the

financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our audit opinions.

Opinions

In our opinion, based on our audit and the report of the other auditors, the financial statements referred

to above present fairly, in all material respects, the respective financial position of Broward College and

of its discretely presented component unit as of June 30, 2015, and the respective changes in financial

position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with

accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Notes 2 and 3 to the financial statements, the College implemented Governmental

Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for

Pensions, an amendment of GASB Statement No. 27, which is a change in accounting principle that

requires an employer participating in a cost-sharing multiple-employer defined benefit pension plan to

report the employer’s proportionate share of the net pension liability of the defined benefit pension plan.

This affects the comparability of amounts reported in the 2014-15 fiscal year with the amounts reported

for the 2013-14 fiscal year. Our opinion is not modified with respect to this matter.

Other Matter

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that MANAGEMENT’S

DISCUSSION AND ANALYSIS, Schedule of Funding Progress – Other Postemployment Benefits

Plan, Schedule of the College’s Proportionate Share of the Net Pension Liability – Florida

Retirement System Pension Plan, Schedule of College Contributions – Florida Retirement System

Pension Plan, Schedule of the College’s Proportionate Share of the Net Pension Liability – Health

Insurance Subsidy Pension Plan, Schedule of College Contributions – Health Insurance Subsidy

Pension Plan, and Notes to Required Supplementary Information, as listed in the table of contents,

be presented to supplement the basic financial statements. Such information, although not a part of the

basic financial statements, is required by the Governmental Accounting Standards Board who considers

it to be an essential part of financial reporting for placing the basic financial statements in an appropriate

operational, economic, or historical context. We have applied certain limited procedures to the required

supplementary information in accordance with auditing standards generally accepted in the United States

of America, which consisted of inquiries of management about the methods of preparing the information

and comparing the information for consistency with management’s responses to our inquiries, the basic


financial statements, and other knowledge we obtained during our audit of the basic financial statements.

We do not express an opinion or provide any assurance on the information because the limited

procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued a report on our consideration

of Broward College’s internal control over financial reporting and on our tests of its compliance with

certain provisions of laws, rules, regulations, contracts, and grant agreements and other matters included

under the heading INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT

OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING

STANDARDS. The purpose of that report is to describe the scope of our testing of internal control over

financial reporting and compliance and the results of that testing, and not to provide an opinion on the

internal control over financial reporting or on compliance. That report is an integral part of an audit

performed in accordance with Government Auditing Standards in considering the Broward College’s

internal control over financial reporting and compliance.

Respectfully submitted,

Sherrill F. Norman, CPA Tallahassee, Florida March 28, 2016


MANAGEMENT’S DISCUSSION AND ANALYSIS

The management’s discussion and analysis (MD&A) provides an overview of the financial position and

activities of the College for the fiscal year ended June 30, 2015, and should be read in conjunction with

the financial statements and notes thereto. The MD&A, and financial statements and notes thereto, are

the responsibility of College management. The MD&A contains financial activity of the College for the

fiscal years ended June 30, 2015, and June 30, 2014, and its component unit, the Broward College

Foundation, Inc., for the fiscal years ended December 31, 2014, and December 31, 2013.

FINANCIAL HIGHLIGHTS

The College’s assets totaled $326.9 million at June 30, 2015. This balance reflects a $1.5 million, or

0.5 percent, decrease as compared to the 2013-14 fiscal year. While assets decreased, liabilities

increased by $47.9 million, or 81.6 percent, totaling $106.6 million at June 30, 2015, compared to

$58.7 million at June 30, 2014. As a result, the College’s net position decreased by $58.2 million,

resulting in a year-end balance of $211.6 million.

The College’s operating revenues totaled $69.7 million for the 2014-15 fiscal year, representing a

1.6 percent decrease compared to the 2013-14 fiscal year. Operating expenses totaled $284.7 million

for the 2014-15 fiscal year, representing an increase of 2.4 percent as compared to the 2013-14 fiscal

year.

Net position represents the residual interest in the College’s assets and deferred outflows of resources

after deducting liabilities and deferred inflows of resources. The College’s comparative total net position

by category for the fiscal years ended June 30, 2015, and June 30, 2014, is shown in the following graph:

Net Position: College

(In Thousands)

The following chart provides a graphical presentation of College revenues by category for the

2014-15 fiscal year:

‐$50,000

$50,000

$150,000

$250,000

Net Investment inCapital Assets

Restricted Unrestricted

$206,377

$30,083

($24,854)

$186,422

$52,488$30,873

2015 2014


Total Revenues: College

OVERVIEW OF FINANCIAL STATEMENTS

Pursuant to GASB Statement No. 35, the College’s financial report consists of three basic financial

statements: the statement of net position; the statement of revenues, expenses, and changes in net

position; and the statement of cash flows. The financial statements, and notes thereto, provide

information on the College as a whole, present a long-term view of the College’s finances, and include

activities for the following entities:

Broward College (Primary Institution) – Most of the programs and services generally associated with a college fall into this category, including instruction, public service, and support services.

Broward College Foundation, Inc. (Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida.

The Statement of Net Position

The statement of net position reflects the assets, deferred outflows of resources, liabilities, and deferred

inflows of resources of the College, using the accrual basis of accounting, and presents the financial

position of the College at a specified time. Assets, plus deferred outflows of resources, less liabilities,

less deferred inflows of resources, equals net position, which is one indicator of the College’s current

financial condition. The changes in net position that occur over time indicate improvement or deterioration

in the College’s financial condition.

A condensed statement of assets, deferred outflows of resources, liabilities, deferred inflows of

resources, and net position of the College and its component unit for the respective years ended is shown

in the following table:

Operating Revenues25%

Nonoperating Revenues

70%

Other Revenues5%


Condensed Statement of Net Position at

(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

AssetsCurrent Assets 28,358$ 54,929$ 1,748$ 1,436$ Capital Assets, Net 222,336 203,430 - - Other Noncurrent Assets 76,231 70,103 75,072 73,940

Total Assets 326,925 328,462 76,820 75,376

Deferred Outflows of Resources 12,605 - - -

LiabilitiesCurrent Liabilities 23,525 22,367 1,138 760 Noncurrent Liabilities 83,047 36,312 - -

Total Liabilities 106,572 58,679 1,138 760

Deferred Inflows of Resources 21,352 - - -

Net PositionNet Investment in Capital Assets 206,377 186,422 - - Restricted 30,083 52,488 63,854 64,176 Unrestricted (24,854) 30,873 11,828 10,440

Total Net Position 211,606$ 269,783$ 75,682$ 74,616$

College Component Unit

Significant changes were the result of the following factors:

The decrease in current assets of $26.6 million resulted primarily from the purchase of a $25 million noncurrent investment.

The increase in other noncurrent assets of $6.1 million resulted primarily from the purchase of the $25 million investment offset by an increase in capital outlay expenditures of $18.1 million.

The increase in net capital assets of $18.9 million resulted primarily from capitalized expenditures totaling $28.2 million offset by depreciation of $10.1 million.

The addition of deferred outflows of resources and deferred inflows of resources for fiscal year 2014-15 resulted from the implementation of GASB Statement No. 68 which requires employers participating in multiple-employer cost-sharing defined benefit pension plans to report the employers’ deferred outflows and deferred inflows of resources related to the plans.

The increase in current and noncurrent liabilities of $1.2 million and $46.7 million, respectively, resulted primarily from the addition of a $15 million note payable and the addition of net pension liability of $35.6 million in accordance with the implementation of GASB Statement No. 68.

The decrease in restricted net position of $22.4 million was caused primarily by an increase in the expenditure of capital outlay funds totaling $18.1 million.

The decrease in unrestricted net position of $55.7 million was caused primarily by an adjustment to beginning net position of $47.1 million resulting from the implementation of GASB Statement No. 68 and an increase in operating expenses of $6.6 million. The negative unrestricted net position at June 30, 2015, is further explained in the notes to financial statements.


The Statement of Revenues, Expenses, and Changes in Net Position

The statement of revenues, expenses, and changes in net position presents the College’s revenue and

expense activity, categorized as operating and nonoperating. Revenues and expenses are recognized

when earned or incurred, regardless of when cash is received or paid.

The following summarizes the activities of the College and its component unit for the respective fiscal

years ended:

Condensed Statement of Revenues, Expenses, and Changes in Net Position For the Fiscal Years Ended

(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

Operating Revenues 69,657$ 70,761$ 5,465$ 4,214$ Less, Operating Expenses 284,710 278,142 7,130 6,666

Operating Loss (215,053) (207,381) (1,665) (2,452) Net Nonoperating Revenues 188,920 192,420 2,731 9,366

Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (26,133) (14,961) 1,066 6,914 Other Revenues, Expenses, Gains, or Losses 15,039 13,480 - -

Net Increase (Decrease) In Net Position (11,094) (1,481) 1,066 6,914

Net Position, Beginning of Year 269,783 271,264 74,616 67,702 Adjustments to Beginning Net Position (1) (47,083) - - -

Net Position, Beginning of Year, as Restated 222,700 271,264 74,616 67,702

Net Position, End of Year 211,606$ 269,783$ 75,682$ 74,616$


Note: (1) Adjustment to beginning net position due to the implementation of GASB Statement No. 68, which is a change in accounting principle that requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers' proportionate share of the net pension liability of the defined benefit pension plans.

Operating Revenues

GASB Statement No. 35 categorizes revenues as either operating or nonoperating. Operating revenues

generally result from exchange transactions where each of the parties to the transaction either gives or

receives something of equal or similar value.

The following summarizes the operating revenues for the College and its component unit by source that

were used to fund operating activities for the respective fiscal years ended:


Operating Revenues For the Fiscal Years Ended

(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

Student Tuition and Fees, Net 40,259$ 36,987$ -$ -$ Grants and Contracts 19,651 17,321 - - Auxiliary Enterprises 6,867 13,898 - - Other 2,880 2,555 5,465 4,214

Total Operating Revenues 69,657$ 70,761$ 5,465$ 4,214$


The following chart presents the College’s operating revenues for the 2014-15 and 2013-14 fiscal years:

Operating Revenues: College

(In Thousands)

College operating revenue changes were primarily the result of the following factors: (1) an increase of

$3.3 million in Federal grants and contracts; (2) an increase in student tuition and fees of $3.3 million

primarily due to a decrease in scholarship allowances; and (3) offset by a decrease of $7 million in

auxiliary revenues due to outsourcing bookstore operations to a private vendor.

Operating Expenses

Expenses are categorized as operating or nonoperating. The majority of the College’s expenses are

operating expenses as defined by GASB Statement No. 35. GASB gives financial reporting entities the

choice of reporting operating expenses in the functional or natural classifications. The College has

chosen to report the expenses in their natural classification on the statement of revenues, expenses, and

changes in net position and has displayed the functional classification in the notes to financial statements.

$0 $25,000 $50,000

Other

Auxiliary Enterprises

Grants and Contracts

Student Tuition and Fees, Net

$2,555

$13,898

$17,321

$36,987

$2,880

$6,867

$19,651

$40,259

2014‐15 2013‐14


The following summarizes operating expenses by natural classification for the College and its component

unit for the respective fiscal years ended:

Operating Expenses For the Fiscal Years Ended

(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

Personnel Services 147,771$ 142,405$ -$ -$ Scholarships and Waivers 60,031 47,165 - - Utilities and Communications 5,609 4,794 - - Contractual Services 19,428 21,748 - - Other Services and Expenses 15,727 12,236 7,130 6,666 Materials and Supplies 26,054 40,581 - - Depreciation 10,090 9,213 - -

Total Operating Expenses 284,710$ 278,142$ 7,130$ 6,666$


The following chart presents the College’s operating expenses for the 2014-15 and 2013-14 fiscal years:

Operating Expenses: College

(In Thousands)

College operating expenses increased by $6.6 million, or 2.4 percent, compared to the prior fiscal year.

Significant changes were the result of the following factors:

Personnel services expenses increased $5.4 million, or 3.8 percent, mainly due to the effect of a one-time fiscal year 2013-14 beginning balance adjustment of $5.1 million which decreased the obligation for other postemployment benefits as of July 1, 2013.

$0 $100,000 $200,000

Depreciation

Materials and Supplies

Other Services and Expenses

Contractual Services

Utilities and Communications

Scholarships and Waivers

Personnel Services

$9,213

$40,581

$12,236

$21,748

$4,794

$47,165

$142,405

$10,090

$26,054

$15,727

$19,428

$5,609

$60,031

$147,771

2014‐15 2013‐14


Scholarships and waivers expenses increased $12.9 million, or 27.3 percent due to a change in scholarship allowances related to the outsourcing of the College’s bookstores.

Contractual services expenses decreased by $2.3 million, or 10.7 percent, and other services and expenses increased by $3.5 million, or 28.5 percent, mainly due to reclassification of custodial services from contractual services to other services and expenses.

Material and supplies expenses decreased by $14.5 million, or 35.8 percent primarily due to outsourcing bookstore operations to a private vendor.

Nonoperating Revenues and Expenses

Certain revenue sources that the College relies on to provide funding for operations, including State

noncapital appropriations, Federal and State student financial aid, gifts and grants, and investment

income are defined by GASB as nonoperating. Nonoperating expenses include capital financing costs

and other costs related to capital assets. The following summarizes the College’s nonoperating revenues

and expenses for the 2014-15 and 2013-14 fiscal years:

Nonoperating Revenues (Expenses): College

(In Thousands)

2014-15 2013-14

State Noncapital Appropriations 86,831$ 82,335$ Federal and State Student Financial Aid 103,558 105,939 Gifts and Grants 2,315 2,012 Investment Income 135 2,849 Other Nonoperating Revenues 457 118 Gain on Disposal of Capital Assets 105 Interest on Capital Asset-Related Debt (764) (833) Other Nonoperating Expenses (3,717)

Net Nonoperating Revenues 188,920$ 192,420$

Net nonoperating revenues decreased by $3.5 million, or 1.8 percent, mainly due to the following:

State noncapital appropriations increased by $4.5 million, or 5.5 percent, due to an increase in Lottery revenues.

Federal and State student financial aid decreased by $2.4 million, or 2.2 percent, mainly due to a decrease in Pell Grant revenues.

Other nonoperating expenses increased by $3.7 million mainly due to adjustments of bookstore inventory.

Other Revenues

This category is mainly composed of State capital appropriations and capital grants, contracts, gifts, and

fees. The following summarizes the College’s other revenues for the 2014-15 and 2013-14 fiscal years:


Other Revenues: College

(In Thousands)

2014-15 2013-14

State Capital Appropriations 5,040$ 3,237$ Capital Grants, Contracts, Gifts, and Fees 9,974 10,224 Additions to Permanent Endowments 25 19

Total 15,039$ 13,480$

Other Revenues increased by $1.6 million, or 11.6 percent. Significant changes were the result of State

capital appropriations increasing primarily due to Public Education Capital Outlay allocations for

construction of College facilities.

The Statement of Cash Flows

The statement of cash flows provides information about the College’s financial results by reporting the

major sources and uses of cash and cash equivalents. This statement will assist in evaluating the

College’s ability to generate net cash flows, its ability to meet its financial obligations as they come due,

and its need for external financing. Cash flows from operating activities show the net cash used by the

operating activities of the College. Cash flows from capital financing activities include all plant funds and

related long-term debt activities. Cash flows from investing activities show the net source and use of

cash related to purchasing or selling investments, and earning income on those investments. Cash flows

from noncapital financing activities include those activities not covered in other sections.

The following summarizes the College’s cash flows for the 2014-15 and 2013-14 fiscal years:

Condensed Statement of Cash Flows: College

(In Thousands)

2014-15 2013-14

Cash Provided (Used) by:Operating Activities (206,435)$ (199,700)$ Noncapital Financing Activities 192,601 190,535 Capital and Related Financing Activities (1,978) 7,012 Investing Activities (24,445) 325

Net Decrease in Cash and Cash Equivalents (40,257) (1,828) Cash and Cash Equivalents, Beginning of Year 51,195 53,023

Cash and Cash Equivalents, End of Year 10,938$ 51,195$

Major sources of funds came from Federal and State student financial aid ($104.6 million); net student

tuition and fees ($42.1 million); State noncapital appropriations ($86.8 million); Federal Direct Loan

program receipts ($24.8 million); grants and contracts ($18.3 million); proceeds from sales and maturities

of investments ($15.4 million) and proceeds from capital debt ($15 million). Major uses of funds were for

payments to employees and for employee benefits ($152.7 million); payments to providers of goods and

services ($64.4 million); payments for scholarships ($60 million); purchase of investments ($41.7 million);


purchases of capital assets ($28.1 million); and disbursements to students for Federal Direct Loans

($24.8 million).

The College’s overall cash and cash equivalents decreased by $40.3 million, or 78.6 percent, as

compared to the prior fiscal year. Changes in cash and cash equivalents were the result of the following

factors:

Cash used for operating activities increased by $6.7 million, or 3.4 percent, primarily due to increases in scholarships ($12.9 million) and payments for employee salaries and benefits ($9.1 million) offset by a decrease in payments to suppliers of $14 million.

Cash provided by capital and related financing activities decreased by $9 million, or 128.2 percent, primarily due to an increase in cash used for the purchase of capital assets of $11.8 million and a decrease in State capital appropriations of $9.9 million offset by the receipt of a $15 million loan.

Cash used for investing activities increased by $24.8 million as a result of the College’s purchasing a $25 million investment in the current fiscal year.

CAPITAL ASSETS, CAPITAL EXPENSES AND COMMITMENTS, AND DEBT ADMINISTRATION

Capital Assets

At June 30, 2015, the College had $397.6 million in capital assets, less accumulated depreciation of

$175.3 million, for net capital assets of $222.3 million. Depreciation charges for the current fiscal year

totaled $10.1 million. The following table summarizes the College’s capital assets, net of accumulated

depreciation, at June 30:

Capital Assets, Net at June 30: College

(In Thousands)

Capital Assets 2015 2014

Land 17,630$ 17,630$ Construction in Progress 15,721 10,991 Software in Progress 621 4,044 Buildings 179,334 165,820 Other Structures and Improvements 947 455 Furniture, Machinery, and Equipment 4,075 4,490 Leasehold Improvements 368 - Software 3,640 -

Capital Assets, Net 222,336$ 203,430$

Additional information about the College’s capital assets is presented in the notes to financial statements.

Capital Expenses and Commitments

Major capital expenses through June 30, 2015, were incurred on the following projects: construction of

a science building and chiller plant on South Campus. The College’s major construction commitments

at June 30, 2015, are as follows:


Amount

Total Committed 20,642$ Completed to Date (15,721)

Balance Committed 4,921$

(In Thousands)

Additional information about the College’s construction commitments is presented in the notes to financial

statements.

Debt Administration

As of June 30, 2015, the College had $31 million in capital related long-term debt and notes payable

representing an increase of $13.6 million, or 78 percent, from the prior fiscal year. The following table

summarizes the outstanding long-term debt by type for the fiscal years ended June 30, 2015, and

June 30, 2014:

Long-Term Debt, at June 30: College

(In Thousands)

2015 2014 (1)

SBE Capital Outlay Bonds 1,749$ 2,370$ Capital Improvement Revenue Bonds 14,210 15,020 Notes Payable 15,000 -

Total 30,959$ 17,390$

Note: (1) Unearned lease revenue, included in the prior year as long-term debt, has been reassessed for the current year and is not considered long-term debt.

During the 2014-15 fiscal year, the SBE issued $129,880,000 of the SBE Capital Outlay Bonds, Series

2014B. The proceeds from the College’s portion of the bonds, $1,749,000, were used to refund

$1,885,000 of outstanding SBE Capital Outlay Bonds, Series 2005B. Also during the 2014-15 fiscal year,

the College borrowed $15 million to finance capital improvement projects on South Campus.

Additional information about the College’s long term debt is presented in the notes to financial statements.

ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE

The College’s economic condition is closely tied to that of the State of Florida. Because of limited

economic growth and increased demand for State resources, only a modest increase in State funding is

anticipated in the 2015-16 fiscal year. In response, the Board of Trustees increased the tuition rate

4 percent to take effect beginning with the Fall 2016-1 term. The College’s current financial and capital

plans indicate that the infusion of additional financial resources from an increase in tuition rates will be

necessary to maintain its present level of services.


REQUESTS FOR INFORMATION

Questions concerning information provided in the MD&A or other required supplementary information,

and financial statements and notes thereto, or requests for additional financial information should be

addressed to Jayson Iroff, CFO, Broward College, 6400 NW 6th Way, Fort Lauderdale, Florida 33309.


THIS PAGE INTENTIONALLY LEFT BLANK



Broward College A Component Unit of the State of Florida

Statement of Net Position

June 30, 2015 Component

College Unit

ASSETSCurrent Assets:

Cash and Cash Equivalents 5,659,096$ 1,110,910$ Restricted Cash and Cash Equivalents 4,019,098 - Accounts Receivable, Net 3,541,612 624,233 Notes Receivable, Net 747,838 - Due from Other Governmental Agencies 13,041,563 - Due from Component Unit 824,959 - Inventories 23,854 - Deposits 472,820 - Prepaid Expenses 26,888 13,172

Total Current Assets 28,357,728 1,748,315

Noncurrent Assets:Restricted Cash and Cash Equivalents 1,260,300 - Investments 49,118,376 75,071,592 Restricted Investments 25,852,823 - Depreciable Capital Assets, Net 188,364,330 - Nondepreciable Capital Assets 33,971,699 -

Total Noncurrent Assets 298,567,528 75,071,592

TOTAL ASSETS 326,925,256 76,819,907

DEFERRED OUTFLOWS OF RESOURCESDeferred Amounts Related to Pensions 12,605,488 -

LIABILITIESCurrent Liabilities:

Accounts Payable 2,429,501 1,138,138 Salary and Payroll Taxes Payable 1,407,838 - Retainage Payable 1,314,581 - Due to Other Governmental Agencies 782,652 - Unearned Revenue 2,116,703 - Estimated Insurance Claims Payable 6,238,843 - Deposits Held for Others 2,983,106 - Long-Term Liabilities - Current Portion:

Bonds Payable 1,336,000 - Notes Payable 2,142,857 - Unearned Lease Revenue 66,667 - Unearned Revenue 200,000 - Compensated Absences Payable 1,727,237 - Net Pension Liability 779,533 -

Total Current Liabilities 23,525,518 1,138,138



Statement of Net Position (Continued)


College Unit

LIABILITIES (Continued)Noncurrent Liabilities:

Bonds Payable 14,623,000 - Notes Payable 12,857,143 - Unearned Lease Revenue 1,805,557 - Unearned Revenue 600,000 - Compensated Absences Payable 14,024,629 - Other Postemployment Benefits Payable 4,353,151 - Net Pension Liability 34,783,258 -

Total Noncurrent Liabilities 83,046,738 -

TOTAL LIABILITIES 106,572,256 1,138,138

DEFERRED INFLOWS OF RESOURCESDeferred Amounts Related to Pensions 21,352,067 -

NET POSITIONNet Investment in Capital Assets 206,377,029 - Restricted:

Nonexpendable:Endowment 1,055,437 36,669,129

Expendable:Grants and Loans 6,425,856 - Scholarships 1,355,101 27,184,316 Capital Projects 20,446,352 - Debt Service 48,911 - Other 751,377 -

Unrestricted (24,853,642) 11,828,324

TOTAL NET POSITION 211,606,421$ 75,681,769$

The accompanying notes to financial statements are an integral part of this statement.


Broward College A Component Unit of the State Of Florida

Statement of Revenues, Expenses, and Changes in Net Position

For the Fiscal Year Ended June 30, 2015 Component

College Unit

REVENUESOperating Revenues:

Student Tuition and Fees, Net of Scholarship Allowances of $53,278,913 40,258,878$ -$ Federal Grants and Contracts 8,869,445 - State and Local Grants and Contracts 2,267,737 - Nongovernmental Grants and Contracts 8,514,150 - Auxiliary Enterprises 6,866,555 Other Operating Revenues 2,880,389 5,465,178

Total Operating Revenues 69,657,154 5,465,178

EXPENSESOperating Expenses:

Personnel Services 147,771,307 - Scholarships and Waivers 60,031,524 - Utilities and Communications 5,608,693 - Contractual Services 19,428,322 - Other Services and Expenses 15,726,770 7,130,381 Materials and Supplies 26,053,758 - Depreciation 10,089,713 -

Total Operating Expenses 284,710,087 7,130,381

Operating Loss (215,052,933) (1,665,203)

NONOPERATING REVENUES (EXPENSES)State Noncapital Appropriations 86,831,353 - Federal and State Student Financial Aid 103,558,199 - Gifts and Grants Received for Other Than Capital or Endowment Purposes 2,314,625 - Investment Income 134,577 2,730,432 Other Nonoperating Revenues 457,378 - Gain on Disposal of Capital Assets 104,711 - Interest on Capital Asset-Related Debt (763,650) - Other Nonoperating Expenses (3,717,078) -

Net Nonoperating Revenues 188,920,115 2,730,432

Income (Loss) Before Other Revenues (26,132,818) 1,065,229

State Capital Appropriations 5,040,495 - Capital Grants, Contracts, Gifts, and Fees

($9,866,680 Pledged for Note Payable) 9,974,499 - Other Revenues 24,519 -

Total Other Revenues 15,039,513 -

Increase (Decrease) in Net Position (11,093,305) 1,065,229

Net Position, Beginning of Year 269,782,584 74,616,540 Adjustment to Beginning Net Position (47,082,858) -

Net Position, Beginning of Year, as Restated 222,699,726 74,616,540

Net Position, End of Year 211,606,421$ 75,681,769$






Statement of Cash Flows

For the Fiscal Year Ended June 30, 2015 College

CASH FLOWS FROM OPERATING ACTIVITIESStudent Tuition and Fees, Net 42,088,988$ Grants and Contracts 18,252,555 Payments to Suppliers (58,749,541) Payments for Utilities and Communications (5,608,693) Payments to Employees (118,588,338) Payments for Employee Benefits (34,143,554) Payments for Scholarships (60,031,524) Loans Issued to Students (3,745,573) Collection on Loans to Students 3,401,407 Auxiliary Enterprises 8,344,730 Other Receipts 2,345,089

Net Cash Used by Operating Activities (206,434,454)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESState Noncapital Appropriations 86,831,353 Federal and State Student Financial Aid 104,614,608 Federal Direct Loan Program Receipts 24,774,579 Federal Direct Loan Program Disbursements (24,774,579) Gifts and Grants Received for Other Than Capital or Endowment Purposes 2,314,625 Private Gifts for Endowment Purposes 24,519 Other Nonoperating Disbursements (1,184,243)

Net Cash Provided by Noncapital Financing Activities 192,600,862

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESProceeds From Capital Debt 15,000,000 State Capital Appropriations 3,259,751 Capital Grants and Gifts 9,974,499 Proceeds from Sale of Capital Assets 104,711 Purchases of Capital Assets (28,122,398) Principal Paid on Capital Debt and Leases (1,431,000) Interest Paid on Capital Debt and Leases (763,650)

Net Cash Used by Capital and Related Financing Activities (1,978,087)

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from Sales and Maturities of Investments 15,368,082 Purchases of Investments (41,667,521) Investment Income 1,854,043

Net Cash Used by Investing Activities (24,445,396)

Net Decrease in Cash and Cash Equivalents (40,257,075) Cash and Cash Equivalents, Beginning of Year 51,195,569

Cash and Cash Equivalents, End of Year 10,938,494$



Statement of Cash Flows (Continued)


RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIESOperating Loss (215,052,933)$ Adjustments to Reconcile Operating Loss to Net Cash Used by Operating Activities:

Depreciation Expense 10,089,713 Changes in Assets, Liabilities, Deferred Outflows of Resources, and Deferred Inflows of Resources:

Receivables, Net 1,411,994 Due from Other Governmental Agencies (284,276) Inventories 1,352,052 Prepaid Expenses 58,673 Other Assets 134,000 Accounts Payable (2,873,383) Salaries and Payroll Taxes Payable (1,404,947) Unearned Revenue 721,655 Deposits Held for Others 671,182 Compensated Absences Payable 190,944 Unearned Lease Revenue (66,665) Unearned Revenue (Long-Term) 800,000 Net Pension Liability (16,801,544) Other Postemployment Benefits Payable 591,025 Deferred Outflows of Resources Related to Pensions (7,324,011) Deferred Inflows of Resources Related to Pensions 21,352,067

NET CASH USED BY OPERATING ACTIVITIES (206,434,454)$

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND CAPITAL FINANCING ACTIVITIES

(3,013,559)$

(1,547,901)$

136,000$

Unrealized losses on investments were recognized as a reduction to investmentincome on the statement of revenues, expenses, and changes in net position, butare not cash transactions for the statement of cash flows.

Losses from the disposal of inventory were recognized on the statement of revenues, expenses, and changes in net position, but are not cash transactions for the statement of cash flows.

The State Board of Education (SBE) issued $1,749,000 in SBE Capital OutlayBonds, Series 2014A, to refund $1,885,000 SBE Capital Outlay Bonds Series2005B. The new debt and the refunded old debt were recorded as an increaseand a decrease, respectively, to bonds payable on the statement of net position;however, because the proceeds were used to refund the old debt, the transactiondid not affect cash and cash equivalents.



NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Reporting Entity. The governing body of Broward College, a component unit of the State of Florida, is

the District Board of Trustees. The Board of Trustees constitutes a corporation and is composed of five

members appointed by the Governor and confirmed by the Senate. The District Board of Trustees is

under the general direction and control of the Florida Department of Education, Division of Florida

Colleges, and is governed by law and State Board of Education rules. However, the District Board of

Trustees is directly responsible for the day-to-day operations and control of the College within the

framework of applicable State laws and State Board of Education rules. Geographic boundaries of the

District correspond with those of Broward County.

Criteria for defining the reporting entity are identified and described in the Governmental Accounting

Standards Board’s (GASB) Codification of Governmental Accounting and Financial Reporting Standards,

Sections 2100 and 2600. These criteria were used to evaluate potential component units for which the

Board of Trustees is financially accountable and other organizations for which the nature and significance

of their relationship with the District Board of Trustees are such that exclusion would cause the College’s

financial statements to be misleading. Based on the application of these criteria, the College is a

component unit of the State of Florida, and its financial balances and activities are reported in the State’s

Comprehensive Annual Financial Report by discrete presentation.

Discretely Presented Component Unit. Based on the application of the criteria for determining

component units, the Broward College Foundation, Inc. (Foundation), a legally separate entity, is included

within the College’s reporting entity as a discretely presented component unit and is governed by a

separate board.

The Foundation is also a direct-support organization, as defined in Section 1004.70, Florida Statutes,

and although legally separate from the College, is financially accountable to the College. The Foundation

is managed independently, outside of the College’s budgeting process, and its powers generally are

vested in a governing board pursuant to various State statutes. The Foundation receives, holds, invests,

and administers property, and makes expenses to or for the benefit of the College.

The Foundation is audited by other auditors pursuant to Section 1004.70(6), Florida Statutes. The

Foundation’s audited financial statements are available to the public at the College. The financial data

reported on the accompanying financial statements was derived from the Foundation’s audited financial

statements for the fiscal year ended December 31, 2014.

Basis of Presentation. The College’s accounting policies conform with accounting principles generally

accepted in the United States of America applicable to public colleges and universities as prescribed by

GASB. The National Association of College and University Business Officers (NACUBO) also provides

the College with recommendations prescribed in accordance with generally accepted accounting

principles promulgated by GASB and the Financial Accounting Standards Board (FASB). GASB allows

public colleges various reporting options. The College has elected to report as an entity engaged in only

business-type activities. This election requires the adoption of the accrual basis of accounting and

entitywide reporting including the following components:


Management’s Discussion and Analysis

Basic Financial Statements:

o Statement of Net Position

o Statement of Revenues, Expenses, and Changes in Net Position

o Statement of Cash Flows

o Notes to Financial Statements

Other Required Supplementary Information

Basis of Accounting. Basis of accounting refers to when revenues, expenses, assets, deferred outflows

of resources, liabilities, and deferred inflows of resources are recognized in the accounts and reported in

the financial statements. Specifically, it relates to the timing of the measurements made, regardless of

the measurement focus applied. The College’s financial statements are presented using the economic

resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses,

assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from

exchange and exchange-like transactions are recognized when the exchange takes place. Revenues,

expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of

resources resulting from nonexchange activities are generally recognized when all applicable eligibility

requirements, including time requirements, are met. The College follows GASB standards of accounting

and financial reporting.

The College’s component unit uses the economic resources measurement focus and accrual basis of

accounting whereby revenues are recognized when earned and expenses are recognized when incurred,

and follows FASB standards of accounting and financial reporting for not-for-profit organizations.

Significant interdepartmental sales between auxiliary service departments and other institutional

departments have been accounted for as reductions of expenses and not revenues of those departments.

The College’s principal operating activity is instruction. Operating revenues and expenses generally

include all fiscal transactions directly related to instruction as well as administration, academic support,

student services, physical plant operations, and depreciation of capital assets. Nonoperating revenues

include State noncapital appropriations, Federal and State student financial aid, investment income

(net of unrealized gains or losses on investments), and revenues for capital construction projects.

Interest on capital asset-related debt is a nonoperating expense.

The statement of net position is presented in a classified format to distinguish between current and

noncurrent assets and liabilities. When both restricted and unrestricted resources are available to fund

certain programs, it is the College’s policy to first apply the restricted resources to such programs followed

by the use of the unrestricted resources.

The statement of revenues, expenses, and changes in net position is presented by major sources and is

reported net of tuition scholarship allowances. Tuition scholarship allowances are the difference between

the stated charge for goods and services provided by the College and the amount that is actually paid by

the student or the third party making payment on behalf of the student. The College calculated its tuition

scholarship allowance by determining the amount of “coverage” applied from financial aid and other funds

determined to be subject to tuition scholarship allowance as prescribed by NACUBO Advisory Report


2000-05. Under this method, the College determined amounts by identifying those student transactions

where the student’s classes were paid by an applicable financial aid source. The College maintains a

detailed record of this activity in the Credit and Collection activity file at the financial aid and student level.

The statement of cash flows is presented using the direct method in compliance with GASB Statement

No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities

That Use Proprietary Fund Accounting.

Cash and Cash Equivalents. The amount reported as cash and cash equivalents consists of cash on

hand, cash in demand accounts, and cash with the State Board of Administration (SBA) Florida PRIME

investment pool. For reporting cash flows, the College considers all highly liquid investments with original

maturities of 3 months or less to be cash equivalents. Under this definition, the College considers

amounts invested in the SBA Florida PRIME investment pool to be cash equivalents. College cash

deposits are held in banks qualified as public depositories under Florida law. All such deposits are

insured by Federal depository insurance, up to specified limits, or collateralized with securities held in

Florida’s multiple financial institution collateral pool required by Chapter 280, Florida Statutes. Cash and

cash equivalents that are externally restricted to make debt service payments, maintain sinking or reserve

funds, or to purchase or construct capital or other restricted assets are classified as restricted.

At June 30, 2015, the College reported as cash equivalents $15,820 in the Florida PRIME investment

pool administered by the SBA pursuant to Section 218.405, Florida Statutes. The College’s investments

in the Florida PRIME investment pool, which the SBA indicates is a Securities and Exchange Commission

Rule 2a7-like external investment pool, as of June 30, 2015, are similar to money market funds in which

shares are owned in the fund rather than the underlying investments. The Florida PRIME investment

pool carried a credit rating of AAA by Standard & Poor’s and had a weighted-average days to maturity

(WAM) of 34 days as of June 30, 2015. A portfolio’s WAM reflects the average maturity in days based

on final maturity or reset date, in the case of floating-rate instruments. WAM measures the sensitivity of

the Florida PRIME investment pool to interest rate changes. The investments in the Florida PRIME

investment pool are reported at fair value, which is amortized cost.

Capital Assets. College capital assets consist of land; construction and software in progress; buildings;

other structures and improvements; furniture, machinery, and equipment; leasehold improvements; and

software. These assets are capitalized and recorded at cost at the date of acquisition or at estimated fair

value at the date received in the case of gifts and purchases of State surplus property. Additions,

improvements, and other outlays that significantly extend the useful life of an asset are capitalized. Other

costs incurred for repairs and maintenance are expensed as incurred. The College has a capitalization

threshold of $5,000 for tangible personal property and $25,000 for buildings and other structures and

improvements. Depreciation is computed on the straight-line basis over the following estimated useful

lives:

Buildings – 40 years

Leasehold Improvements – 20 years

Other Structures and Improvements – 10 years

Software – 10 years

Furniture, Machinery, and Equipment:


o Computer Equipment – 3 years

o Vehicles, Office Machines, and Educational Equipment – 5 years

o Furniture – 7 years

Noncurrent Liabilities. Noncurrent liabilities include bonds payable, notes payable, compensated

absences payable, other postemployment benefits payable, and net pension liability that are not

scheduled to be paid within the next fiscal year, as well as unearned lease revenue which will be

amortized over 30 years and unearned revenue which will be amortized over 5 years.

Pensions. For purposes of measuring the net pension liability, deferred outflows of resources and

deferred inflows of resources related to pensions, and pension expense, information about the fiduciary

net position of the Florida Retirement System (FRS) defined benefit plan and the Health Insurance

Subsidy (HIS) defined benefit plan and additions to/deductions from the FRS’s and the HIS’s fiduciary

net position have been determined on the same basis as they are reported by the FRS and the HIS plans.

For this purpose, benefit payments (including refunds of employee contributions) are recognized when

due and payable in accordance with benefit terms. Investments are reported at fair value.

2. Reporting Change

The College implemented Governmental Accounting Standards Board (GASB) Statement No. 68,

Accounting and Financial Reporting for Pensions, which requires employers participating in cost-sharing

multiple-employer defined benefit pension plans to report the employers’ proportionate share of the net

pension liabilities of the defined benefit pension plans. The College participates in the FRS defined

benefit pension plan and the HIS defined benefit plan administered by the Florida Department of

Management Services, Division of Retirement. The effects of implementing this Statement are discussed

in a subsequent note.

The requirements of this Statement are being implemented prospectively, with the College reporting its

proportionate share of the actuarially determined liabilities of $35,562,791 at June 30, 2015.

3. Adjustments to Beginning Net Position

The beginning net position of the College was decreased by $47,082,858 due to the adoption of a new

GASB Pronouncement, Statement No. 68, Accounting and Financial Reporting for Pensions. GASB

Statement No. 68 requires the College to recognize its proportionate share of the net pension liabilities

and related pension amounts of the cost-sharing multiple-employer FRS and HIS defined benefit plans.

4. Deficit Net Position in Individual Funds

The College reported an unrestricted net position, which included a deficit in the current

funds – unrestricted as shown below. This deficit can be attributed to the full recognition of long-term

liabilities (i.e., compensated absences payable, other postemployment benefits payable, and net pension

liabilities) and includes the effect of deferred outlflows and deferred inflows related to the pension plans

in the current unrestricted funds.


Fund Net Position

Current Funds - Unrestricted (25,129,522)$ Auxiliary Funds 275,880

Total (24,853,642)$

Amount

Total Unrestricted Net Position Before Recognition of Long-Term Liabilities, Deferred Outflows of Resources, and Deferred Inflows of Resources 39,560,745$ Amount Expected to be Financed in Future Years:

Compensated Absences 15,751,866$ Other Post Employment Benefits Payable 4,353,151 Net Pension Liability and Related Deferred Outflows of Resources and Deferred Inflows of Resources 44,309,370

Total Amount Expected to be Financed in Future Years (64,414,387)

Total Unrestricted Net Position (24,853,642)$

5. Investments

The Board of Trustees has adopted a written investment policy providing that surplus funds of the College

shall be invested in those institutions and instruments permitted under the provisions of Florida Statutes.

Section 218.415(16), Florida Statutes, authorizes the College to invest in the Florida PRIME investment

pool administered by the State Board of Administration (SBA); Securities and Exchange Commission

registered money market funds with the highest credit quality rating from a nationally recognized rating

agency; interest-bearing time deposits and savings accounts in qualified public depositories, as defined

by Section 280.02, Florida Statutes; direct obligations of the United States Treasury; obligations of

Federal agencies and instrumentalities; securities of, or interests in, certain open-end or closed-end

management type investment companies; and other investments approved by the Board of Trustees as

authorized by law. State Board of Education (SBE) Rule 6A-14.0765(3), Florida Administrative Code,

provides that College loan, endowment, annuity, and life income funds may also be invested pursuant to

Section 215.47, Florida Statutes. Investments authorized by Section 215.47, Florida Statutes, include

bonds, notes, commercial paper, and various other types of investments.

Investments set aside to make debt service payments, maintain sinking or reserve funds, or to purchase

or construct capital assets are classified as restricted.

The College’s investments at June 30, 2015, are reported at fair value, as follows:

Investment Type Amount

SBA Debt Service Accounts 50,112$ Mutual Funds 74,921,087

Total College Investments 74,971,199$


State Board of Administration Debt Service Accounts

The College reported investments totaling $50,112 at June 30, 2015, in the SBA Debt Service Accounts.

These investments are used to make debt service payments on bonds issued by the SBE for the benefit

of the College. The College’s investments consist of United States Treasury securities, with maturity

dates of 6 months or less, and are reported at fair value. The College relies on policies developed by the

SBA for managing interest rate risk and credit risk for this account. Disclosures for the Debt Service

Accounts are included in the notes to financial statements of the State’s Comprehensive Annual Financial

Report.

Mutual Funds

The College’s investments in mutual funds totaled $74,921,087 at June 30, 2015.

The College’s Investment Policy Statement provides for a short-term investment pool, an

intermediate-term investment pool, and a long-term investment pool. The primary objective of the

short-term investment pool (funds needed for expenditures in one year or less) is to provide for

preservation of capital and liquidity. The primary objectives for the intermediate-term investment pool

are the preservation of capital and maximization of income without undue risk within the specific

parameters specified in the investment policy. The primary objectives of the long-term investment pool

(funds not expected to be needed as working capital and are not intermediate-term) are to provide for

long-term growth of principal and income without undue exposure to risk.

The following risks apply to these investments:

Interest Rate Risk: Interest rate risk is the risk that changes in interest rates will adversely affect the fair

value of an investment. The College’s investments in mutual funds have portfolios with average durations

ranging of 0.34 to 3.95 years.

Credit Risk: Credit risk is the risk that an issuer or other counterparty will not fulfill its obligations. The

College’s investments in mutual funds at June 30, 2015, had portfolios having an average credit quality

of between AAA and BB.

Custodial Credit Risk: Custodial credit risk is the risk that, in the event of the failure of the counterparty

to a transaction, the College will not be able to recover that value of investments or collateral securities

that are in the possession of an outside party. The College’s investment policy provides that securities

will be designated as an asset of the college and held in safekeeping by a third-party custodial bank, or

other third-party custodial institution. The College’s $74,921,087 investments in mutual funds are held

by the safekeeping agent in the name of the College.

Component Unit Investments

Investments held by the College’s component unit at December 31, 2014, are reported at fair value as

follows:



Marketable Securities Equities: Foreign 18,394,633$ Domestic 20,576,855 Other: Alternative Investments 25,058,375 Fixed Income 9,804,194 Money Market Funds 1,237,535

Total Component Unit Investments 75,071,592$

6. Accounts Receivable

Accounts receivable represent amounts for student fee deferments, various student services provided by

the College, uncollected commissions for food service and vending machine sales, unused credit memos,

and contract and grant reimbursements due from third parties. These receivables are reported net of a

$1,017,981 allowance for doubtful accounts.

7. Notes Receivable

Notes receivable represent student loans made under the short-term loan program, financial aid

overpayments, and fee deficiencies. Notes receivable are reported net of a $4,842,753 allowance for

doubtful notes.

8. Due From Other Governmental Agencies

The amount due from other governmental agencies consists of $9,001,974 due from State funding

sources, including $6,684,809 of Public Education Capital Outlay allocations due for construction of

College facilities, and $4,039,589 from other agencies, primarily $3,287,222 due from the Federal

government for Pell Grant and other federal financial aid and grant programs.

9. Due From and To Component Unit/College

The College reported a due from component unit of $824,959 which represents expenditures made by

the College that will be reimbursed by the component unit. The College’s financial statements are

reported for the fiscal year ended June 30, 2015. The College’s component unit’s financial statements

are reported for the fiscal year ended December 31, 2014. Accordingly, amounts reported by the College

as due from component on the statement of net position do not agree with the amounts reported by the

component unit as due to the College.

10. Inventories

Inventories consist of educational supplies maintained in the central warehouse and are valued using the

weighted average cost of inventory valuation.

Effective July 1, 2014, the College contracted with a private vendor to operate the College’s bookstores

for a period of 5 years. In accordance with the terms of the contract, the vendor agreed to purchase

some of the inventory from the College. The remaining inventory was put for sale at a public auction.

The resulting unsold inventory totaling $3,013,559 is included in the amount reported as Other

Nonoperating Expenses.


11. Capital Assets

Capital assets activity for the fiscal year ended June 30, 2015, is shown in the following table:

Beginning Reclassification EndingDescription Balance Note (1) Additions Reductions Balance

Nondepreciable Capital Assets:Land 17,629,705$ -$ -$ -$ 17,629,705$ Construction in Progress 10,991,128 - 26,088,986 21,358,759 15,721,355 Software in Progress 4,044,366 - 620,639 4,044,366 620,639

Total Nondepreciable Capital Assets 32,665,199$ -$ 26,709,625$ 25,403,125$ 33,971,699$

Depreciable Capital Assets:Buildings 283,157,440$ -$ 20,643,388$ -$ 303,800,828$ Other Structures and Improvements 14,499,592 - 715,371 - 15,214,963 Furniture, Machinery, and Equipment 26,047,105 12,975,539 1,931,388 712,112 40,241,920 Leasehold Improvements - - 380,595 - 380,595 Software - - 4,044,366 - 4,044,366 Assets Under Capital Lease 12,975,539 (12,975,539) - - -

Total Depreciable Capital Assets 336,679,676 - 27,715,108 712,112 363,682,672

Less, Accumulated Depreciation:Buildings 117,337,899 - 7,129,414 - 124,467,313 Other Structures and Improvements 14,044,292 - 223,304 - 14,267,596 Furniture, Machinery, and Equipment 21,557,211 12,975,539 2,319,872 686,312 36,166,310 Leasehold Improvements - - 12,686 - 12,686 Software - - 404,437 - 404,437 Assets Under Capital Lease 12,975,539 (12,975,539) - - -

Total Accumulated Depreciation 165,914,941 - 10,089,713 686,312 175,318,342

Total Depreciable Capital Assets, Net 170,764,735$ -$ 17,625,395$ 25,800$ 188,364,330$

Note: (1) The class of property and related accumulated depreciation, previously reported as assets under capital lease has been reclassified as equipment under Furniture, Machinery, and Equipment.

12. Museum Artifacts

On March 28, 2005, the United States Bankruptcy Court named Broward College recipient of the Graves

Museum of Archaeology and Natural History Collection. Subsequent to receiving the Graves Collection,

the College received an additional donated collection, the Nyman Collection. Out of 32 major collections

and 71 small collections of donated assets, approximately 74 percent have been fully catalogued.

College staff indicated it will take several more years to fully catalog these collections. While the

collections are undoubtedly quite valuable and irreplaceable, the College has not placed a dollar valuation

on these items and, accordingly, the financial statements do not include these assets.

13. Unearned Revenue

Unearned revenue at June 30, 2015, primarily includes student tuition and fees received prior to fiscal

year-end related to subsequent accounting periods, assessments for the Higher Education Technology

Group for the 2015-16 fiscal year, and grant revenues received in advance. As of June 30, 2015, the

College reported the following amounts as unearned revenue:


Description Amount

Student Tuition and Fees 474,774$ Higher Education Technology Group 711,163 Grant Revenues 844,369 Other 86,397

Total Unearned Revenue 2,116,703$

14. Long-Term Liabilities

Long term liabilities of the College at June 30, 2015, include bonds payable, notes payable, unearned

lease revenue, compensated absences payable, other postemployment benefits payable, and net

pension liability. Long-term liabilities activity for the fiscal year ended June 30, 2015, is shown below:

Beginning Ending CurrentDescription Balance Additions Reductions Balance Portion

Bonds Payable 17,390,000$ 1,749,000$ 3,180,000$ 15,959,000$ 1,336,000$ Notes Payable 15,000,000 - 15,000,000 2,142,857 Unearned Lease Revenue 1,938,889 - 66,665 1,872,224 66,667 Unearned Revenue - 1,000,000 200,000 800,000 200,000 Compensated Absences Payable 15,560,922 2,230,308 2,039,364 15,751,866 1,727,237 Other Postemployment Benefits Payable 3,762,126 688,517 97,492 4,353,151 - Net Pension Liability (1) 52,364,336 3,415,335 20,216,880 35,562,791 779,533

Total Long-Term Liabilities 91,016,273$ 24,083,160$ 25,800,401$ 89,299,032$ 6,252,294$

Note: (1) The beginning balance resulted from the implementation of GASB Statement No. 68.

Bonds Payable. Various bonds were issued to finance capital outlay projects of the College. The

following is a description of the bonded debt issues:

SBE Capital Outlay Bonds. The SBE issues capital outlay bonds on behalf of the College. These bonds mature serially and are secured by a pledge of the College’s portion of the State-assessed motor vehicle license tax and by the State’s full faith and credit. The SBE and the SBA administer the principal and interest payments, investment of debt service resources, and compliance with reserve requirements.

Capital Improvement Revenue Bonds, Series 2008A. These bonds are authorized by Article VII, Section 11(d) of the Florida Constitution; Sections 215.57 through 215.83 and Section 1009.23, Florida Statutes; and other applicable provisions of law. Principal and interest on these bonds are secured by and payable solely from a first lien pledge of the capital improvement fees collected pursuant to Section 1009.23(11), Florida Statutes, by the Series 2008A participating colleges on a parity with any additional bonds issued subsequent to the issuance of the Series 2008A bonds. The Series 2008A bonds constitute the first series of bonds to be issued pursuant to a Master Authorizing Resolution. Upon the issuance of additional bonds, all bonds will share a parity first lien on the pledged revenues of all colleges participating in any series of bonds then outstanding. The Series 2008A bonds will share the lien of such additional bonds on the Series 2008A pledged revenues and on the revenues pledged by the colleges participating in such additional bonds. The bonds were issued for the construction of a multi-level parking garage at the College’s Central Campus.


Interest AnnualAmount Rates Maturity

Bond Type Outstanding (Percent) To

SBE Capital Outlay Bonds:2014 Series B Refunding 1,749,000$ 2.0 - 5.0 2020

Florida Department of Education Capital Improvement Revenue Bonds:

Series 2008A 14,210,000 4.0 - 5.0 2028

Total 15,959,000$

Annual requirements to amortize all bonded debt outstanding as of June 30, 2015, are as follows:

Fiscal YearEnding June 30 Principal Interest Total

2016 1,336,000$ 726,723$ 2,062,723$ 2017 1,415,000 653,044 2,068,044 2018 1,486,000 591,044 2,077,044 2019 1,017,000 525,894 1,542,894 2020 1,055,000 484,544 1,539,544 2021-2025 5,625,000 1,727,356 7,352,356 2026-2028 4,025,000 383,363 4,408,363

Total 15,959,000$ 5,091,968$ 21,050,968$

SBE Capital Outlay Bonds andCapital Improvement Revenue Bonds

On December 2, 2014, the SBE issued $129,880,000 of the SBE Capital Outlay Bonds, Series 2014B.

The College’s portion of the bonds, $1,749,000, was used to call $1,885,000 of outstanding SBE Capital

Outlay Bonds, Series 2005B. The SBE Capital Outlay Bonds Series 2005B were called on

January 1, 2015. As a result of the refunding, the College had a debt service savings of $215,896 and

obtained an economic gain of $211,147.

In prior years, portions of the SBE Capital Outlay Bonds, Series 1998A and 2000A were refunded and

considered defeased in substance by placing a portion of the proceeds of the new bonds in an irrevocable

trust to provide for future debt service payments on the old bonds. Accordingly, the trust account assets

and the liabilities for the defeased bonds are not included in the College’s statement of net position. As

of June 30, 2015, $1,325,000 of SBE Capital Outlay Bonds, Series 1998A, and $660,000 of SBE Capital

Outlay Bonds, Series 2000A, are considered defeased in-substance.

Notes Payable. On March 30, 2015, the College entered into a Credit Facility Debt Agreement for

$15 million, at a stated interest rate of 1.91 percent, to finance capital improvement projects on South

Campus. The debt matures on December 1, 2021, and principal and interest payments are made

annually and semi-annually, respectively. The College’s capital improvement fees collected pursuant to

Sections 1009.22 and 1009.23, Florida Statutes, are pledged as security for the debt. Annual

requirements to amortize the outstanding debt as of June 30, 2015, are as follows:



2016 2,142,857$ 266,036$ 2,408,893$ 2017 2,142,857 225,107 2,367,964 2018 2,142,857 184,179 2,327,036 2019 2,142,857 143,250 2,286,107 2020 2,142,857 102,321 2,245,178 2021-2022 4,285,715 81,857 4,367,572

Total 15,000,000$ 1,002,750$ 16,002,750$

Unearned Lease Revenue. The College leased land in Miramar, Florida, to a third party pursuant to a

ground lease agreement dated August 9, 2013, with terms extending 30 years. The lease was prepaid

in August 2013 by the third party to the College for the sum of $2,000,000, which is being amortized over

the life of the agreement. The unearned lease revenue amount held by the College totaled $1,872,224 at

June 30, 2015, of which $66,667 was reported as current.

Unearned Revenue The College contracted with a private vendor to operate the College’s bookstores

for a period of 5 years. In accordance with the terms of the contract, the vendor provided a one-time

signing bonus for the sum of $1,000,000, which is being amortized over the life of the agreement. The

unearned revenue amount held by the College totaled $800,000 at June 30, 2015, of which $200,000 was

reported as current.

Compensated Absences Payable. College employees may accrue annual and sick leave based on

length of service, subject to certain limitations regarding the amount that will be paid upon termination.

The College reports a liability for the accrued leave; however, State noncapital appropriations fund only

the portion of accrued leave that is used or paid in the current fiscal year. Although the College expects

the liability to be funded primarily from future appropriations, generally accepted accounting principles do

not permit the recording of a receivable in anticipation of future appropriations. At June 30, 2015, the

estimated liability for compensated absences, which includes the College’s share of the Florida

Retirement System and FICA contributions, totaled $15,751,866. The current portion of the compensated

absences liability, $1,727,237, is the amount expected to be paid in the coming fiscal year, and represents

a historical percentage of leave used applied to total accrued leave liability.

Other Postemployment Benefits Payable. The College follows GASB Statement No. 45, Accounting

and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, for other

postemployment benefits administered by the College.

Plan Description. The Other Postemployment Benefits Plan (Plan) is a single-employer defined benefit

plan administered by the College. Pursuant to the provisions of Section 112.0801, Florida Statutes,

former employees who retire from the College are eligible to participate in the College’s health and

hospitalization plan for medical and prescription drug coverage. The College subsidizes the premium

rates paid by retirees by allowing them to participate in the Plan at reduced or blended group

(implicitly subsidized) premium rates for both active and retired employees. These rates provide an

implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected

to result in higher costs to the Plan on average than those of active employees. The College does not


offer any explicit subsidies for retiree coverage. Retirees are required to enroll in the Federal Medicare

program for their primary coverage as soon as they are eligible. The College does not issue a

stand-alone report and the Plan is not included in the annual report of a public employee retirement

system or another entity.

Funding Policy. Plan benefits are pursuant to the provisions of Section 112.0801, Florida Statutes, and

the Board of Trustees has established and can amend plan benefits and contribution rates. The College

has not advance-funded or established a funding methodology for the annual other postemployment

benefit (OPEB) costs or the net OPEB obligation, and the Plan is financed on a pay-as-you-go basis. For

the 2014-15 fiscal year, 101 retirees received other postemployment benefits. The College provided

required contributions of $97,492 toward the annual OPEB cost, composed of benefit payments made

on behalf of retirees for claims expenses (net of reinsurance), administrative expenses, and reinsurance

premiums. Retiree contributions totaled $781,504, which represents 1.2 percent of covered payroll.

Annual OPEB Cost and Net OPEB Obligation. The College’s annual OPEB cost (expense) is calculated

based on the annual required contribution (ARC), an amount actuarially determined in accordance with

the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an

ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities

over a period not to exceed 30 years. The following table shows the College’s annual OPEB cost for the

fiscal year, the amount actually contributed to the Plan, and changes in the College’s net OPEB

obligation:

Description Amount

Normal Cost (Service Cost for One Year) 410,485$ Amortization of Unfunded Actuarial Accrued Liability 252,951

Annual Required Contribution 663,436 Interest on Net OPEB Obligation 150,485 Adjustment to Annual Required Contribution (125,404)

Annual OPEB Cost (Expense) 688,517 Contribution Toward the OPEB Cost (97,492)

Increase in Net OPEB Obligation 591,025 Net OPEB Obligation, Beginning of Year 3,762,126

Net OPEB Obligation, End of Year 4,353,151$

The College’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the

net OPEB obligation as of June 30, 2015, and for the 2 preceding fiscal years were as follows:


Percentage ofAnnual

Annual OPEB Cost Net OPEBFiscal Year OPEB Cost Contributed Obligation

2012-13 (1) 2,159,059$ 10.8% 3,353,781$ 2013-14 655,190 37.7% 3,762,126 2014-15 688,517 14.2% 4,353,151

Note: (1) The net OPEB obligation as of June 2013 was decreased by $5,105,776 due to changes made in actuarial assumptions used to develop the net OPEB obligation.

Funded Status and Funding Progress. As of July 1, 2013, the most recent valuation date, the actuarial

accrued liability for benefits was $7,144,058, and the actuarial value of assets was $0, resulting in an

unfunded actuarial accrued liability of $7,144,058, and a funded ratio of 0 percent. The covered payroll

(annual payroll of active participating employees) was $66,741,785 for the 2014-15 fiscal year, and the

ratio of the unfunded actuarial accrued liability to the covered payroll was 10.7 percent.

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and

assumptions about the probability of occurrence of events far into the future. Examples include

assumptions about future employment and termination, mortality, and healthcare cost trends. Amounts

determined regarding the funded status of the plan and the annual required contributions of the employer

are subject to continual revision as actual results are compared with past expectations and new estimates

are made about the future. The Schedule of Funding Progress, presented as required supplementary

information following the notes to financial statements, presents multiyear trend information that shows

whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial

accrued liabilities for benefits.

Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based

on the substantive Plan provisions, as understood by the employer and participating members, and

include the types of benefits provided at the time of each valuation and the historical pattern of sharing

of benefit costs between the employer and participating members. The actuarial methods and

assumptions used include techniques that are designed to reduce the effects of short-term volatility in

actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of

the calculations.

The College’s OPEB actuarial valuation as of July 1, 2013, used the entry age normal actuarial cost

method to estimate the actuarial accrued liability as of June 30, 2015, and the College’s 2014-15 fiscal

year ARC. This method was selected because it produced the lowest OPEB liability and annual cost.

Because the OPEB liability is currently unfunded, the actuarial assumptions included a 4 percent rate of

return on invested assets, which is the College’s expectation of investment returns under its investment

policy. The actuarial assumptions also included a payroll growth rate of 4 percent per year, an inflation

rate of 3 percent, and an annual healthcare cost trend rate of 7.5 percent pre-Medicare and 6 percent

Medicare for the 2014-15 fiscal year, reduced by decrements to an ultimate rate of 5 percent after 5 years

for each. The unfunded actuarial accrued liability is being amortized as a level percentage of projected

payroll amortized over 30 years on an open basis. The remaining amortization period at

June 30, 2015 was 22 years.


15. Retirement Plans – Defined Benefit Pension Plans

General Information about the Florida Retirement System (FRS)

The FRS was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for

participating public employees. The FRS was amended in 1998 to add the Deferred Retirement Option

Program under the defined benefit plan and amended in 2000 to provide a defined contribution plan

alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined

contribution pension plan is the FRS Investment Plan. Chapter 112, Florida Statutes, established the

Retiree Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit

pension plan to assist retired members of any State-administered retirement system in paying the costs

of health insurance. Chapter 121, Florida Statutes, also provides for nonintegrated, optional retirement

programs in lieu of the FRS to certain members of the Senior Management Service Class (SMSC)

employed by the State and faculty and specified employees of State colleges.

Essentially all regular employees of the College are eligible to enroll as members of the

State-administered FRS. Provisions relating to the FRS are established by Chapters 121 and 122,

Florida Statutes; Chapter 112, Part IV, Florida Statutes; Chapter 238, Florida Statutes; and Florida

Retirement System Rules, Chapter 60S, Florida Administrative Code; wherein eligibility, contributions,

and benefits are defined and described in detail. Such provisions may be amended at any time by further

action from the Florida Legislature. The FRS is a single retirement system administered by the Florida

Department of Management Services, Division of Retirement, and consists of two cost-sharing

multiple-employer defined benefit plans and other nonintegrated programs. A comprehensive annual

financial report of the FRS, which includes its financial statements, required supplementary information,

actuarial report, and other relevant information, is available from the Florida Department of Management

Services’ Web site (www.dms.myflorida.com).

The College’s FRS and HIS pension expense totaled $3,415,335 for the 2014-15 fiscal year.

FRS Pension Plan

Plan Description. The FRS Pension Plan (Plan) is a cost-sharing multiple-employer defined benefit

pension plan, with a Deferred Retirement Option Program (DROP) for eligible employees. The general

classes of membership are as follows:

Regular Class – Members of the FRS who do not qualify for membership in the other classes.

Senior Management Service Class (SMSC) – Members in senior management level positions.

Employees enrolled in the Plan prior to July 1, 2011, vest at 6 years of creditable service and employees

enrolled in the Plan on or after July 1, 2011, vest at 8 years of creditable service. All vested members,

enrolled prior to July 1, 2011, are eligible for normal retirement benefits at age 62 or at any age after

30 years of service. All members enrolled in the Plan on or after July 1, 2011, once vested, are eligible

for normal retirement benefits at age 65 or any time after 33 years of creditable service. Members of

both Plans may include up to 4 years of credit for military service toward creditable service. The Plan

also includes an early retirement provision; however, there is a benefit reduction for each year a member

retires before his or her normal retirement date. The Plan provides retirement, disability, death benefits,

and annual cost-of-living adjustments to eligible participants.


DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal

retirement under the Plan to defer receipt of monthly benefit payments while continuing employment with

an FRS-participating employer. An employee may participate in DROP for a period not to exceed

60 months after electing to participate. During the period of DROP participation, deferred monthly

benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not include

amounts for DROP participants, as these members are considered retired and are not accruing additional

pension benefits.

Benefits Provided. Benefits under the Plan are computed on the basis of age and/or years of service,

average final compensation, and service credit. Credit for each year of service is expressed as a

percentage of the average final compensation. For members initially enrolled before July 1, 2011, the

average final compensation is the average of the 5 highest fiscal years’ earnings; for members initially

enrolled on or after July 1, 2011, the average final compensation is the average of the 8 highest fiscal

years’ earnings. The total percentage value of the benefit received is determined by calculating the total

value of all service, which is based on retirement plan and/or the class to which the member belonged

when the service credit was earned. Members are eligible for in-line-of-duty or regular disability and

survivors’ benefits. The following chart shows the percentage value for each year of service credit

earned:

Class, Initial Enrollment, and Retirement Age/Years of Service % Value

Regular Class members initially enrolled before July 1, 2011 Retirement up to age 62 or up to 30 years of service 1.60 Retirement at age 63 or with 31 years of service 1.63 Retirement at age 64 or with 32 years of service 1.65 Retirement at age 65 or with 33 or more years of service 1.68

Regular Class members initially enrolled on or after July 1, 2011 Retirement up to age 65 or up to 33 years of service 1.60 Retirement at age 66 or with 34 years of service 1.63 Retirement at age 67 or with 35 years of service 1.65 Retirement at age 68 or with 36 or more years of service 1.68

Senior Management Service Class 2.00

As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before

July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment

is 3 percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or

after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living

adjustment is a proportion of 3 percent determined by dividing the sum of the pre-July 2011 service credit

by the total service credit at retirement multiplied by 3 percent. Plan members initially enrolled on or after

July 1, 2011, will not have a cost-of-living adjustment after retirement.

Contributions. The Florida Legislature establishes contribution rates for participating employers and

employees. Contribution rates during the 2014-15 fiscal year were as follows:


Percent of Gross SalaryClass Employee Employer (1)

FRS, Regular 3.00 7.37FRS, Senior Management Service 3.00 21.14Deferred Retirement Option Program - Applicable to Members from All of the Above Classes 0.00 12.28FRS, Reemployed Retiree (2) (2)

Notes: (1) Employer rates include 1.26 percent for the postemployment health insurance subsidy. Also, employer rates, other than for DROP participants, include 0.04 percent for administrative costs of the Investment Plan.

(2) Contribution rates are dependent upon retirement class in which reemployed.

The College’s contributions to the defined benefit pension plan totaled $5,162,242 for the fiscal year

ended June 30, 2015.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of

Resources Related to Pensions. At June 30, 2015, the College reported a liability of $12,341,886 for its

proportionate share of the net pension liability. The net pension liability was measured as of

June 30, 2014, and the total pension liability used to calculate the net pension liability was determined

by an actuarial valuation as of July 1, 2014. The College’s proportionate share of the net pension liability

was based on the College’s 2013-14 fiscal year contributions relative to the total 2013-14 fiscal year

contributions of all participating members. At June 30, 2014, the College’s proportionate share was

0.202277239 percent, which was an increase of 0.020513551 from its proportionate share measured as

of June 30, 2013.

For the fiscal year ended June 30, 2015, the College recognized pension expense of $1,726,882. In

addition, the College reported deferred outflows of resources and deferred inflows of resources related

to pensions from the following sources:

Deferred Outflows Deferred InflowsDescription of Resources of Resources

Differences between expected and actual experience -$ 763,752$ Change of assumptions 2,137,409 - Net difference between projected and actual earnings on FRS pension plan investments 20,588,315 Changes in proportion and differences between College FRS contributions and proportionate share of contributions 2,970,772 - College FRS contributions subsequent to the measurement date 5,162,242 -

Total 10,270,423$ 21,352,067$

The deferred outflows of resources related to pensions totaling $5,162,242 resulting from College

contributions subsequent to the measurement date, will be recognized as a reduction of the net pension

liability in the fiscal year ended June 30, 2016. Other amounts reported as deferred outflows of resources

and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


Fiscal Year Ending June 30 Amount

2016 (4,327,375)$ 2017 (4,327,375) 2018 (4,327,375) 2019 (4,327,376) 2020 819,704 Thereafter 245,911

Total (16,243,886)$

Actuarial Assumptions. The total pension liability in the July 1, 2014, actuarial valuation was determined

using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.60 percentSalary Increases 3.25 percent, average, including inflationInvestment rate of return 7.65 percent, net of pension plan investment

expense, including inflation

Mortality rates were based on the Generational RP-2000 with Projection Scale BB.

The actuarial assumptions used in the July 1, 2014, valuation were based on the results of an actuarial

experience study for the period July 1, 2008, through June 30, 2013.

The long-term expected rate of return on pension plan investments was not based on historical returns,

but instead is based on a forward-looking capital market economic model. The allocation policy’s

description of each asset class was used to map the target allocation to the asset classes shown below.

Each asset class assumption is based on a consistent set of underlying assumptions, and includes an

adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and

geometric real rates of return for each major asset class are summarized in the following table:

CompoundAnnual Annual

Target Arithmetic (Geometric) StandardAsset Class Allocation (1) Return Return Deviation

Cash 1.00% 3.11% 3.10% 1.65%Intermediate-Term Bonds 18.00% 4.18% 4.05% 5.15%High Yield Bonds 3.00% 6.79% 6.25% 10.95%Broad US Equities 26.50% 8.51% 6.95% 18.90%Developed Foreign Equities 21.20% 8.66% 6.85% 20.40%Emerging Market Equities 5.30% 11.58% 7.60% 31.15%Private Equity 6.00% 11.80% 8.11% 30.00%Hedge Funds / Absolute Return 7.00% 5.81% 5.35% 10.00%Real estate (Property) 12.00% 7.11% 6.35% 13.00%

Total 100.00%

Assumed inflation - Mean 2.60% 2.00%

Note: (1) As outlined in the Plan's investment policy.

Discount Rate. The discount rate used to measure the total pension liability was 7.65 percent. The plan’s

fiduciary net position was projected to be available to make all projected future benefit payments of


current active and inactive employees. Therefore, the discount rate for calculating the total pension

liability is equal to the long-term expected rate of return.

Sensitivity of the College’s Proportionate Share of the Net Pension Liability to Changes in the Discount

Rate. The following presents the College’s proportionate share of the net pension liability calculated

using the discount rate of 7.65 percent, as well as what the College’s proportionate share of the net

pension liability would be if it were calculated using a discount rate that is 1 percentage point lower

(6.65 percent) or 1 percentage point higher (8.65 percent) than the current rate:

1% Current 1%Decrease Discount Rate Increase

(6.65%) (7.65%) (8.65%)

College's proportionate share of the net pension liability 52,787,887$ 12,341,886$ (21,301,469)$

Pension Plan Fiduciary Net Position. Detailed information about pension plan’s fiduciary net position is

available in the separately issued FRS Pension Plan and Other State Administered Systems

Comprehensive Annual Financial Report.

Payables to the Pension Plan. At June 30, 2015, the College reported a payable of $651,059 for the

outstanding amount of contributions to the pension plan required for the fiscal year ended June 30, 2015.

HIS Pension Plan

Plan Description. The HIS Pension Plan (HIS Plan) is a cost-sharing multiple-employer defined benefit

pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida

Legislature at any time. The benefit is a monthly payment to assist retirees of State-administered

retirement systems in paying their health insurance costs and is administered by the Florida Department

of Management Services, Division of Retirement.

Benefits Provided. For the fiscal year ended June 30, 2015, eligible retirees and beneficiaries received

a monthly HIS payment equal to the number of years of creditable service completed at the time of

retirement multiplied by $5. The payments are at least $30 but not more than $150 per month, pursuant

to Section 112.363, Florida Statutes. To be eligible to receive a HIS benefit, a retiree under a

State-administered retirement system must provide proof of health insurance coverage, which can

include Medicare.

Contributions. The HIS Plan is funded by required contributions from FRS participating employers as set

by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active

FRS members. For the fiscal year ended June 30, 2015, the contribution rate was 1.26 percent of payroll

pursuant to section 112.363, Florida Statutes. The College contributed 100 percent of its statutorily

required contributions for the current and preceding 3 years. HIS Plan contributions are deposited in a

separate trust fund from which HIS payments are authorized. HIS Plan benefits are not guaranteed and

are subject to annual legislative appropriation. In the event the legislative appropriation or available funds

fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled.

The College’s contributions to the HIS Plan totaled $1,026,581 for the fiscal year ended June 30, 2015.


Pension Liabilities, Pension Expense, and Deferred Outflows of Resources Related to Pensions. At June

30, 2015, the College reported a net pension liability of $23,220,905 for its proportionate share of the net

pension liability. The current portion of the net pension liability is the College’s proportionate share of

benefit payments expected to be paid within one year, net of the College’s proportionate share of the

pension plan’s fiduciary net position available to pay that amount. The net pension liability was measured

as of June 30, 2014, and the total pension liability used to calculate the net pension liability was

determined by an actuarial valuation as of July 1, 2014. The College’s proportionate share of the net

pension liability was based on the College’s 2013-14 fiscal year contributions relative to the total

2013-14 fiscal year contributions of all participating members. At June 30, 2014, the College’s

proportionate share was 0.248345447 percent, which was an increase of 0.006283034 from its

proportionate share measured as of June 30, 2013.


addition, the College reported deferred outflows of resources related to pensions from the following

sources:

Deferred OutflowsDescription of Resources

Change of assumptions 826,292$ Net difference between projected and actual earnings on HIS pension plan investments 11,147 Changes in proportion and differences between College HIS contributions and proportionate share of HIS contributions 471,045 College contributions subsequent to the measurement date 1,026,581

Total 2,335,065$

The deferred outflows of resources totaling $1,026,581 was related to pensions resulting from College

contributions subsequent to the measurement date and will be recognized as a reduction of the net

pension liability in the fiscal year ended June 30, 2016. Other amounts reported as deferred outflows of

resources related to pensions will be recognized in pension expense as follows:


2016 212,035$ 2017 212,035 2018 212,035 2019 212,034 2020 209,248 Thereafter 251,097

Total 1,308,484$




Inflation 2.60 percentSalary Increases 3.25 percent, average, including inflationMunicipal Bond Rate 4.29 percent

Mortality rates were based on the Generational RP-2000 with Projected Scale BB.

While an experience study had not been completed for the plan, the Florida Retirement System Actuarial

Assumptions Conference reviewed the actual assumptions for the plan.

Discount Rate. The discount rate used to measure the total pension liability was 4.29 percent. In general,

the discount rate for calculating the total pension liability is equal to the single rate equivalent to

discounting at the long-term expected rate of return for benefit payments prior to the projected depletion

date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is

considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate

selected by the plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was

adopted as the applicable municipal bond index.







(3.29%) (4.29%) (5.29%)

College's proportionate share of the net pension liability 26,411,899$ 23,220,905$ 20,557,338$






16. Retirement Plans – Defined Contribution Pension Plans

FRS Investment Plan. The State Board of Administration (SBA) administers the defined contribution

plan officially titled the FRS Investment Plan (Investment Plan). The Investment Plan is reported in the

SBA’s annual financial statements and in the State of Florida Comprehensive Annual Financial Report.

As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the

Investment Plan in lieu of the FRS defined benefit plan. College employees already participating in the

State College System Optional Retirement Program or DROP are not eligible to participate in the

Investment Plan. Employer and employee contributions are defined by law, but the ultimate benefit

depends in part on the performance of investment funds. Service retirement benefits are based upon

the value of the member’s account upon retirement. Benefit terms, including contribution requirements,


are established and may be amended by the Florida Legislature. The Investment Plan is funded with the

same employer and employee contributions rates, that are based on salary and membership class

(Regular Class, Senior Management Service Class, etc.), as the FRS defined benefit plan. Contributions

are directed to individual member accounts, and the individual members allocate contributions and

account balances among various approved investment choices. Costs of administering the Investment

Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of

0.04 percent of payroll and by forfeited benefits of plan members. Allocations to the Investment Plan

member accounts during the 2014-15 fiscal year were as follows:

Percent ofGross

Class CompensationFRS, Regular 6.30FRS, Senior Management Service 7.67

For all membership classes, employees are immediately vested in their own contributions and are vested

after 1 year of service for employer contributions and investment earnings regardless of membership

class. If an accumulated benefit obligation for service credit originally earned under the FRS Pension

Plan is transferred to the Investment Plan, the member must have the years of service required for FRS

Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for

these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense

account for up to 5 years. If the employee returns to FRS-covered employment within the 5-year period,

the employee will regain control over their account. If the employee does not return within the 5-year

period, the employee will forfeit the accumulated account balance. For the fiscal year ended

June 30, 2015, the information for the amount of forfeitures was unavailable from the SBA; however,

management believes that these amounts, if any, would be immaterial to the College.

After termination and applying to receive benefits, the member may rollover vested funds to another

qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution,

leave the funds invested for future distribution, or any combination of these options. Disability coverage

is provided in which the member may either transfer the account balance to the FRS Pension Plan when

approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension

Plan, or remain in the Investment Plan and rely upon that account balance for retirement income.

The College’s Investment Plan pension expense totaled $1,130,210 for the fiscal year ended

June 30, 2015.

State College System Optional Retirement Program. Section 1012.875, Florida Statutes, provides

for an Optional Retirement Program (Program) for eligible college instructors and administrators. The

Program is designed to aid colleges in recruiting employees by offering more portability to employees not

expected to remain in the FRS for 8 or more years.

The Program is a defined contribution plan, which provides full and immediate vesting of all contributions

submitted to the participating companies on behalf of the participant. Employees in eligible positions can

make an irrevocable election to participate in the Program, rather than the FRS, and purchase retirement

and death benefits through contracts provided by certain insurance carriers. The employing college


contributes 5.14 percent of the participant’s salary to the participant’s account, 2.54 percent to cover the

unfunded actuarial liability of the FRS pension plan, and 0.01 percent to cover the administrative costs,

for a total of 7.69 percent, and employees contribute 3 percent of the employee’s salary. Additionally,

the employee may contribute, by payroll deduction, an amount not to exceed the percentage contributed

by the college to the participant’s annuity account. The contributions are invested in the company or

companies selected by the participant to create a fund for the purchase of annuities at retirement.

The College’s contributions to the Program totaled $1,059,110 and employee contributions totaled

$413,177 for the 2014-15 fiscal year.

17. Construction Commitments

The College’s construction commitments at June 30, 2015, are as follows:

Total Completed BalanceProject Description Commitment to Date Committed

South Campus:Science Building 19,602,468$ 14,810,129$ 4,792,339$ North Parking Lot Improvements 1,039,738 911,226 128,512

Total 20,642,206$ 15,721,355$ 4,920,851$

18. Operating Lease Commitments

The College leased building space under 2 operating leases, which will expire in 2018 and 2034. These

leased assets and the related commitments are not reported on the College’s statement of net position.

Operating lease payments are recorded as expenses when paid or incurred. Outstanding commitments

resulting from these lease agreements are contingent upon future appropriations. Future minimum lease

commitments for these noncancelable operating leases are as follows:


2016 1,110,526$ 2017 1,155,029 2018 975,111 2019 931,921 2020 959,879 2021-2025 5,465,012 2026-2030 7,266,219 2031-2034 6,637,794

Total Minimum Payments Required 24,501,491$

19. Risk Management Programs

The College is exposed to various risks of loss related to torts; theft of, damage to, and destruction of

assets; errors and omissions; injuries to employees; and natural disasters. The College provided

coverage for these risks primarily through the Florida College System Risk Management Consortium

(Consortium), which was created under authority of Section 1001.64(27), Florida Statutes, by the boards

of trustees of the Florida public colleges for the purpose of joining a cooperative effort to develop,


implement, and participate in a coordinated Statewide College risk management program. The

Consortium is self-sustaining through member assessments (premiums) and purchases excess

insurance through commercial companies for claims in excess of specified amounts. Excess insurance

from commercial companies provided coverage of up to $150 million to February 28, 2015, and up to

$200 million from March 1, 2015, for property insurance. Insurance coverage obtained through the

Consortium included fire and extended property, general and automobile liability, workers’ compensation,

and other liability coverage. Settled claims resulting from these risks have not exceeded commercial

coverage in any of the past 3 fiscal years.

Life, dental, and long-term disability coverage are provided through purchased commercial insurance.

Self-Insured Program. The Board has established an individual self-insured program to provide group

health insurance for its employees, retirees, former employees, and their dependents. The College’s

liability was limited by excess reinsurance to $275,000 per insured person to December 31, 2014, and

$300,000 per insured person from January 1, 2015. The plan is provided by an insurance company

licensed by the Florida Department of Financial Services, Office of Insurance Regulation. The College

contributes employee premiums as a fringe benefit. Employee dependent coverage is by payroll

deduction and coverage for retirees, former employees, and their dependents is by prepaid premium.

The College reports a liability when it is probable that a loss has occurred and the amount of that loss

can be reasonably estimated. The liability includes an amount for claims that have been incurred, but

not reported, and an amount for claims administration expense. Because the actual claims liability

depends on such complex factors as inflation, change in legal doctrines, and damage awards, the

process used in computing the claims liability does not necessarily result in an exact amount. The

College reevaluates the claims liability periodically and the claims liability totaled $6,238,843 as of

June 30, 2015. Amounts held by the College in excess of the estimated insurance claims liability at

June 30, 2015, totaled $5,036,644 and are classified as insurance claim deposits. The College will use

these amounts to pay claims incurred in future fiscal years.

The following schedule represents the changes in claims liability for the current and prior years for the

College’s self-insured program:

Beginning Claims and End ofFiscal of Fiscal Changes in Claim FiscalYear Year Estimates Payments Year

2013-14 7,759,850$ 15,298,790$ 15,079,922$ 7,978,718$ 2014-15 7,978,718 14,394,694 16,134,569 6,238,843

20. Functional Distribution of Operating Expenses

The functional classification of an operating expense (instruction, academic support, etc.) is assigned to

a department based on the nature of the activity, which represents the material portion of the activity

attributable to the department. For example, activities of an academic department for which the primary

departmental function is instruction may include some activities other than direct instruction such as

public service. However, when the primary mission of the department consists of instructional program

elements, all expenses of the department are reported under the instruction classification. The operating

expenses on the statement of revenues, expenses, and changes in net position are presented by natural


classifications. The following are those same expenses presented in functional classifications as

recommended by NACUBO:

Functional Classification Amount

Instruction 97,426,906$ Public Services 1,492,289 Academic Support 15,361,666 Student Services 24,624,661 Institutional Support 41,889,466 Operation and Maintenance of Plant 32,889,309 Scholarships and Waivers 57,186,941 Depreciation 10,089,713 Auxiliary Enterprises 3,749,136

Total Operating Expenses 284,710,087$

21. Fiscal Agent for the Higher Education Technology Group

Effective July 1, 2002, the College was elected fiscal agent for the Higher Education Technology Group

(HETGroup). As fiscal agent, the College is responsible for receiving, disbursing, and administering all

moneys due or payable from HETGroup and for certain personnel functions. For the 2014-15 fiscal year,

HETGroup revenues and expenditures totaled $2,398,743 and $2,524,632 respectively, and are reported

as operating nongovernmental grants and contracts and operating expenses, respectively, on the

statement of revenues, expenses, and changes in net position. At June 30, 2015, net assets of

HETGroup totaling $2,972,295 are held in the College’s Current Restricted Fund.

22. Subsequent Events

Sale of Automotive/Marine Center Property. At its August 11, 2015 meeting, the Board of Trustees

authorized the sale of the College’s automotive/marine center property (“Property”) to a private party for

the amount of $10 million. The terms of the agreement are as follows:

The buyer will pay a nonrefundable first installment payment in the amount of $2,350,000.

The balance of the purchase price will be paid at the time of closing which will be no later than June 30, 2016.

The College shall operate the Property as currently operated and shall preserve intact the Property until closing.

Subsequent to the closing date, the College has the option to lease approximately 50,000 square feet of the Property for a term of 2 consecutive 6-month periods at fair market rental value.

Student Financial Aid Program. The United States Department of Education, Office of Federal Student

Aid (USDOE), conducted an on-site review from March 9, 2015, through March 13, 2015, of the College’s

administration of its Federal student financial aid program. The USDOE issued a Program Review

Report, dated May 27, 2015, that included several findings. The College responded to the findings on

July 31, 2015. The USDOE Final Program Review Report has not been completed and required

repayments to the Federal government, if any, have not been determined.



Schedule of Funding Progress – Other Postemployment Benefits Plan

Actuarial UAAL as aActuarial Accrued Unfunded Percentage

Actuarial Value of Liability (AAL) AAL Funded Covered of CoveredValuation Assets (1) (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

7/1/2009 -$ 18,692,337$ 18,692,337$ 0% 63,329,742$ 29.5%7/1/2011 - 20,619,034 20,619,034 0% 69,895,770 29.5%7/1/2013 - 7,144,058 7,144,058 0% 65,112,705 11.0%

Note: (1) The College’s OPEB actuarial valuation used the entry age normal actuarial cost method to estimate the actuarial accrued liability.

Schedule of the College’s Proportionate Share of the Net Pension Liability –

Florida Retirement System Pension Plan

2014 (1) 2013 (1)College's proportion of the FRS net pension liability (asset) 0.202277239% 0.181763688%

College's proportionate share of the FRS net pension liability (asset) 12,341,886$ 31,289,620$

College's covered-employee payroll (2) 73,259,441$ 68,797,117$

College's proportionate share of the FRS net pension liability (asset) as a percentage of its covered-employee payroll 16.85% 45.48%

FRS Plan fiduciary net position as a percentage of the total pension liability 96.09% 88.54%

Notes: (1) The amounts presented were determined as of June 30.

(2) Covered-employee payroll includes defined benefit plan actives, investment plan members,and members in DROP because total employer contributions are determined on a uniform basis (blended rate) as required by Part III of Chapter 121, Florida Statutes.

Schedule of College Contributions – Florida Retirement System Pension Plan

2015 (1) 2014 (1)Contractually required FRS contribution $ 5,162,242 $ 4,430,730

FRS contributions in relation to the contractually required contribution (5,162,242) (4,430,730)

FRS contribution deficiency (excess) -$ -$


FRS contributions as a percentage of covered-employee payroll 6.36% 6.05%


(2) Covered-employee payroll includes defined benefit plan actives, investment plan members, and members in DROP because total employer contributions are determined on a uniform basis (blended rate) as required by Part III of Chapter 121, Florida Statutes.



Health Insurance Subsidy Pension Plan

2014 (1) 2013 (1)College's proportion of the HIS net pension liability (asset) 0.248345447% 0.242062413%

College's proportionate share of the HIS net pension liability (asset) 23,220,905$ 21,074,716$


College's proportionate share of the HIS net pension liability (asset) as a percentage of its covered-employee payroll 31.70% 30.63%

HIS Plan fiduciary net position as a percentage of the total pension liability 0.99% 1.78%


(2) Covered-employee payroll includes defined benefit plan actives, investment plan members, and members in DROP.

Schedule of College Contributions – Health Insurance Subsidy Pension Plan

2015 (1) 2014 (1)

Contractually required HIS contribution $ 1,026,581 $ 850,748

HIS contributions in relation to the contractually required HIS contribution (1,026,581) (850,748)

HIS contribution deficiency (excess) -$ -$


HIS contributions as a percentage of covered-employee payroll 1.26% 1.16%



NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

1. Schedule of Funding Progress – Other Postemployment Benefit Plan

The July 1, 2013, unfunded actuarial accrued liability of $7,144,058 was significantly lower than the

July 1, 2011, liability of $20,619,034 as a result of the following:

The demographic assumptions (e.g., rates of termination, mortality, disability, and retirement) of the most recent actuarial valuation of the Florida Retirement System were reviewed and revisions made, as appropriate (e.g., generational projection of post-decrement mortality).

The assumed conditions for retirement eligibility and rates of retirement were supplemented to accommodate those active employees hired on or after July 1, 2011.

The assumed rates of participation in the Plan and assumptions on healthcare claims were adjusted to reflect current experience.

The assumed per capita costs of healthcare were updated, including assumptions related to healthcare costs between ages.


The assumed rates of healthcare inflation used to project the per capita healthcare costs were revised.

The calculation of the unfunded actuarial accrued liability was changed to an open basis.

2. Schedule of Net Pension Liability and Schedule of Contributions – Florida Retirement System Pension Plan

Changes of Assumptions. As of June 30, 2014, the inflation rate assumption was decreased from

3 percent to 2.6 percent, the real payroll growth assumption was decreased from 1 percent to

0.65 percent, and the overall payroll growth rate assumption was decreased from 4 percent to

3.25 percent. The long-term expected rate of return decreased from 7.75 percent to 7.65 percent.

3. Schedule of Net Pension Liability and Schedule of Contributions – Health Insurance Subsidy Pension Plan

Changes of Assumptions. The municipal rate used to determine total pension liability decreased from

4.63 percent to 4.29 percent.


Phone: (850) 412-2722 Fax: (850) 488-6975





INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

We have audited, in accordance with the 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 General of the United States, the financial statements of Broward College, a

component unit of the State of Florida, and its discretely presented component unit as of and for the fiscal

year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise

the College’s basic financial statements, and have issued our report thereon dated March 28, 2016,

included under the heading INDEPENDENT AUDITOR’S REPORT. Our report includes a reference to

other auditors who audited the financial statements of the discretely presented component unit, as

described in our report on the College’s financial statements. This report does not include the results of

the other auditors’ testing of internal control over financial reporting or compliance and other matters that

are reported on separately by those auditors.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the College’s internal

control over financial reporting (internal control) to determine audit procedures that are appropriate in the

circumstances for the purpose of expressing our opinions on the financial statements, but not for the

purpose of expressing an opinion on the effectiveness of the College’s internal control. Accordingly, we

do not express an opinion on the effectiveness of the College’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow

management or employees, in the normal course of performing their assigned functions, to prevent, or

detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a

combination of deficiencies, in internal control such that there is a reasonable possibility that a material

misstatement of the College’s financial statements will not be prevented, or detected and corrected on a

timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control


that is less severe than a material weakness, yet important enough to merit attention by those charged

with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this

section and was not designed to identify all deficiencies in internal control that might be material

weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any

deficiencies in internal control that we consider to be material weaknesses. However, material

weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the College’s financial statements are free from

material misstatement, we performed tests of its compliance with certain provisions of laws, rules,

regulations, contracts, and grant agreements, noncompliance with which could have a direct and material

effect on the determination of financial statement amounts. However, providing an opinion on compliance

with those provisions was not an objective of our audit and, accordingly, we do not express such an

opinion. The results of our tests disclosed no instances of noncompliance or other matters that are

required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of the INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER



STANDARDS is solely to describe the scope of our testing of internal control and compliance and the

results of that testing, and not to provide an opinion on the effectiveness of the College’s internal control

or on compliance. This report is an integral part of an audit performed in accordance with Government

Auditing Standards in considering the College’s internal control and compliance. Accordingly, this report

is not suitable for any other purpose.




Auditor General

Report No. 2016-149

March 2016



June 30, 2015

Financial Audit


During the 2014-15 fiscal year, Dr. Jeffery S. Allbritten served as President and the following


County Sankey “Eddie” Webb, III, Chair Charlotte Brian G. Chapman, Jr., Vice Chair Lee Tristan Chapman Hendry Byron Donalds Collier Eric Loche Charlotte Julia G. Perry Glades Braxton C. Rhone Lee Marjorie Starnes-Bilotti, J.D. Lee Christopher T. Vernon, J.D. Collier




The team leader was Cesar A. Mayorga and the audit was supervised by Deirdre F. Waigand, CPA.









TABLE OF CONTENTS

Page No.

SUMMARY ........................................................................................................................................... i






















SUMMARY


Our audit disclosed that the basic financial statements of Florida SouthWestern State College (a

component unit of the State of Florida) were presented fairly, in all material respects, in accordance with

prescribed financial reporting standards.







Our audit objectives were to determine whether Florida SouthWestern State College and its officers with

administrative and stewardship responsibilities for College operations had:

Presented the College’s basic financial statements in accordance with generally acceptedaccounting principles;

Established and implemented internal control over financial reporting and compliance withrequirements that could have a direct and material effect on the financial statements; and

Complied with the various provisions of laws, rules, regulations, contracts, and grant agreementsthat are material to the financial statements.









AUDIT METHODOLOGY






Phone: (850) 412-2722 Fax: (850) 488-6975







We have audited the accompanying financial statements of Florida SouthWestern State College, a



the College’s basic financial statements as listed in the table of contents.






error.



audit the financial statements of Florida SouthWestern State College Financing Corporation, a blended

component unit, which represent 14.7 percent, 41.3 percent, 4.1 percent, and 3 percent, respectively, of

the assets, liabilities, net position, and revenues reported for Florida SouthWestern State College. In

addition, we did not audit the financial statements of the discretely presented component unit, which

represent 100 percent of the transactions and account balances of the discretely presented component

unit’s columns. Those statements were audited by other auditors whose reports have been furnished to

us, and our opinions, insofar as they relate to the amounts included for the blended and discretely

presented component units, are based solely on the reports of the other auditors. We conducted our

audit 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 General of the United States. Those standards require that we plan and perform the audit


to obtain reasonable assurance about whether the financial statements are free from material

misstatement.












our audit opinions.

Opinions

In our opinion, based on our audit and the reports of the other auditors, the financial statements referred

to above present fairly, in all material respects, the respective financial position of Florida SouthWestern

State College and of its discretely presented component unit as of June 30, 2015, and the respective

changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended in

accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter








Other Matter






















of the Florida SouthWestern State College’s internal control over financial reporting and on our tests of

its compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements and

other matters included under the heading INDEPENDENT AUDITOR’S REPORT ON INTERNAL

CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED

ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS. The purpose of that report is to describe the scope of our

testing of internal control over financial reporting and compliance and the results of that testing, and not

to provide an opinion on the internal control over financial reporting or on compliance. That report is an

integral part of an audit performed in accordance with Government Auditing Standards in considering the

Florida SouthWestern State College’s internal control over financial reporting and compliance









fiscal years ended June 30, 2015, and June 30, 2014, its blended component unit Florida SouthWestern

State College Financing Corporation for fiscal years ended March 31, 2015, and March 31, 2014, and its

discretely presented component unit Florida SouthWestern State College Foundation, Inc., for the fiscal

years ended March 31, 2015, and March 31, 2014.

The College’s Board of Trustees approved the name change from Edison State College to Florida

SouthWestern State College effective July 1, 2014, pursuant to Section 1001.60(2)(b), Florida Statutes.


The College’s assets and deferred outflows of resources totaled $215.2 million at June 30, 2015. This

balance reflects a $6.4 million, or 3.1 percent, increase as compared to the 2013-14 fiscal year, resulting

mainly from an increase in the current assets and deferred outflows of resources. Liabilities and deferred

inflows of resources increased by $19.3 million, or 37.7 percent, totaling $70.7 million at June 30, 2015,

compared to $51.3 million at June 30, 2014. The increase is the result of the initial recording of the

pension liability, in conjunction with the implementation of Governmental Accounting Standards Board

(GASB) Statement No. 68. Additionally, the College reported deferred outflows of resources totaling

$4.1 million and deferred inflows of resources totaling $7.4 million related to the net pension liability at

June 30, 2015. See the notes to the financial statements for a comprehensive discussion of the impact

of recording this liability. As a result, the College’s net position decreased by $12.9 million, resulting in a

year-end balance of $144.5 million.


25.5 percent increase compared to the 2013-14 fiscal year due mainly to an increase in net student tuition

and fees and sales and services of auxiliary enterprises, primarily due to the change in methodology for

calculating the allowance for doubtful accounts. Operating expenses totaled $97.8 million for the

2014-15 fiscal year, representing an increase of 8.4 percent as compared to the 2013-14 fiscal year due

mainly to an increase in scholarships and waivers.


after deducting liabilities and deferred inflows of resources. As a result of the implementation of GASB

Statement No. 68, the 2014-15 fiscal year beginning net position of the College was adjusted by

$18.1 million, representing the net amount of the beginning net pension liability and the deferred outflows

of resources. The implementation of GASB Statement No. 68 was the primary reason why the

unrestricted net position declined by $16.5 million. The College’s comparative total net position by

category for the fiscal years ended June 30, 2015, and June 30, 2014, is shown in the following graph:



(In Thousands)







position; and the statement of cash flows. These financial statements, and notes thereto, provide



‐$10,000

$30,000

$70,000

$110,000

$150,000



$115,708

$32,077

‐$3,240

$117,966

$26,268

$13,228

2015 2014



65%

Other Revenues11%


Florida SouthWestern State College (Primary Institution) – Most of the programs and services generally associated with a college fall into this category, including instruction, public service, and support services. In addition, the College operates two collegiate high schools whose activities are also reflected herein.

Florida SouthWestern State College Financing Corporation (Blended Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida. Based on the application of the criteria for determining component units, the Financing Corporation is included within the College’s reporting entity as a blended component unit. The Financing Corporation’s fiscal year is April 1st through March 31st. As a result, the Financing Corporation’s financial activities included in the MD&A and accompanying financial statements are for the fiscal years ended March 31, 2015, and 2014, respectively.

Florida SouthWestern State College Foundation, Inc. (Discretely Presented Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida. The Foundation’s fiscal year is April 1st through March 31st. As a result, the Foundation’s financial activities presented in the MD&A and accompanying financial statements are for the fiscal years ended March 31, 2015, and 2014, respectively.









resources, and net position of the College and its discretely presented component unit for the respective

fiscal years ended is shown in the following table:



(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14

AssetsCurrent Assets 35,627$ 32,058$ 6,308$ 1,231$ Capital Assets, Net 150,931 154,481 - - Other Noncurrent Assets 23,357 20,742 47,864 47,722

Total Assets 209,915 207,281 54,172 48,953

Deferred Outflows of Resources 5,312 1,517 - -

LiabilitiesCurrent Liabilities 6,802 6,410 4,049 3,145 Noncurrent Liabilities 56,504 44,926 - 1,100

Total Liabilities 63,306 51,336 4,049 4,245





The significant increases in the College’s deferred outflows and inflows of resources and noncurrent

liabilities and the significant decrease in the College’s net position resulted mainly from the

implementation of GASB Statement No. 68. Further information on the implementation of this reporting

change can be found in Notes 2 and 3 of the notes to the financial statements.





The following summarizes the activities of the College and its discretely presented component unit for

the respective fiscal years ended:



(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14


Operating Income (Loss) (72,305) (69,910) 2,944 (2,364) Net Nonoperating Revenues 65,701 63,649 1,866 4,413

Income (Loss) Before Other Revenues (6,604) (6,261) 4,810 2,049 Other Revenues 11,764 8,670 605 237

Net Increase In Net Position 5,160 2,409 5,415 2,286

Net Position, Beginning of Year 157,462 155,350 44,708 42,422 Adjustments to Beginning Net Position (1) (18,077) (297) - -




Note: (1) For the 2014-15 fiscal year, the adjustment to beginning net position was due to the implementation of GASB Statement No. 68, which is a change in accounting principle that requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers' proportionate share of the net pension liability of the defined benefit pension plans. For the 2013-14 fiscal year, the adjustment to beginning net position was due to the adoption of GASB Statement No. 65, which is a change in accounting principle that requires debt issuance costs, which were previously deferred and amortized, to be expensed when incurred.

Operating Revenues




The following summarizes the operating revenues for the College and its discretely presented component

unit by source that were used to fund operating activities for the respective fiscal years:


(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14

Student Tuition and Fees, Net 18,552$ 13,552$ -$ -$ Grants and Contracts 2,265 2,589 5,760 1,098 Sales and Services of Educational Departments 586 572 - - Auxiliary Enterprises 4,085 3,284 - - Other Operating Revenue - 320 26 26






(In Thousands)

College operating revenue increased by $5.2 million primarily due as a result of increases in net student

tuition and fees and sales and services of auxiliary enterprises. The significant decrease in scholarship

allowance is due to the College changing its method of calculation of the allowance.

Operating Expenses






The following summarizes operating expenses by natural classification for the College and its discretely

presented component unit for the respective fiscal years ended:

$0 $11,000 $22,000

Other Operating Revenues


Sales and Services ofEducational Departments



$320

$3,284

$572

$2,589

$13,552

$‐

$4,085

$586

$2,265

$18,552

2014‐15 2013‐14



(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14

Personnel Services 54,612$ 53,747$ -$ -$ Scholarships and Waivers 16,104 7,374 1,302 1,476 Utilities and Communications 2,790 2,840 - - Contractual Services 8,347 7,638 774 717 Other Services and Expenses 5,535 6,408 766 1,295 Materials and Supplies 4,249 5,106 - - Depreciation 6,156 7,114 - -





(In Thousands)

The operating expenses for the 2014-15 fiscal year were $97.8 million, an increase of $7.6 million

compared to the 2013-14 fiscal year. Significant changes to operating expenses were the result of the

following factors:

Personnel services (compensation and employee benefits) increased by $0.9 million, which is attributed to a one percent salary increase, and increases in employee benefit rates.

$0 $30,000 $60,000

Depreciation


Other Services andExpenses


Utilities andCommunications


Personnel Services

$7,114

$5,106

$6,408

$7,638

$2,840

$7,374

$53,747

$6,156

$4,249

$5,535

$8,347

$2,790

$16,104

$54,612

2014‐15 2013‐14


Scholarships and waivers increased by $8.7 million due to a decrease of $6.2 million, or 28 percent in student tuition and fees scholarship allowance which was caused by a decrease in enrollment and student loan borrowing.



noncapital appropriations, Federal and State student financial aid, certain gifts and grants, and

investment income, are defined by GASB as nonoperating. Nonoperating expenses include capital

financing costs and other costs related to capital assets. The following summarizes the College’s

nonoperating revenues and expenses for the 2014-15 and 2013-14 fiscal years:


(In Thousands)

2014-15 2013-14

State Noncapital Appropriations 35,610$ 34,345$ Federal and State Student Financial Aid 27,040 26,962 Gifts and Grants 5,830 3,535 Investment Income 550 529 Other Nonoperating Revenues 160 21 Interest on Capital Asset-Related Debt (1,536) (1,608) Other Nonoperating Expenses (1,953) (135)


Changes in nonoperating revenues were primarily due to an increase in State noncapital appropriations

of $1.3 million, or 3.7 percent. Gifts and grants increased $2.3 million, or 64.9 percent, as a result of an

increase in the number of Quick Response Training (QRT) grants run through the College. Other

nonoperating expenses increased $1.8 million, or 134.7 percent due to the payments for the QRTs.

Other Revenues


fees. The following summarizes the College’s other revenues, expenses, gains, or losses for the

2014-15 and 2013-14 fiscal years:


(In Thousands)

2014-15 2013-14

State Capital Appropriations 7,537$ 4,864$ Capital Grants, Contracts, Gifts, and Fees 3,678 3,231 Other Revenues 549 575

Total 11,764$ 8,670$

State capital appropriations increased by $2.7 million primarily due to an increase in the State’s Public

Education Capital Outlay funding and is restricted to approved construction projects, such as the

Leonhardt Hall renovation.













(In Thousands)

2014-15 2013-14

Cash Provided (Used) by:Operating Activities (66,067)$ (62,516)$ Noncapital Financing Activities 68,194 65,378 Capital and Related Financing Activities 817 (1,238) Investing Activities (5) 578

Net Increase in Cash and Cash Equivalents 2,939 2,202 Cash and Cash Equivalents, Beginning of Year 22,366 20,164


Major sources of funds came from State noncapital appropriations ($35.6 million), Federal and State

student financial aid ($27.6 million), net student tuition and fees ($19.9 million), and Federal Direct

Student Loan program receipts ($14.8 million). Major uses of funds were for payments to employees

($44.2 million), payments to suppliers of goods and services ($18.2 million), payments for scholarships

($16.1 million), and disbursements to students for Federal Direct Student Loans ($14.8 million).

The overall increase in cash was $2.9 million, or 13.1 percent over the previous fiscal year.


Capital Assets


$83 million, for net capital assets of $150.9 million. Depreciation charges for the current fiscal year totaled

$6.2 million. The following table summarizes the College’s capital assets, net of accumulated




(In Thousands)


Land 3,080$ 3,491$ Art Collections 503 503 Construction in Progress 2,814 1,865 Buildings 204,065 203,441 Other Structures and Improvements 13,613 13,687 Furniture, Machinery, and Equipment 9,866 9,193

Total Capital Assets 233,941 232,180 Less, Accumulated Depreciation (83,010) (77,699)


Additional information about the College’s capital assets is presented in the notes to the financial

statements.


Construction commitments through June 30, 2015, included the following projects: Lee Campus Student

Activity Center for $6 million, Lee Campus building G HVAC and roof for $876 thousand, Lee Campus

building H renovation and remodeling for $4.6 million, Lee Campus building K roof, window, and lighting

project for $585 thousand, and minor projects on the Lee Campus for $215 thousand. The College’s

construction commitments at June 30, 2015, are as follows:

Amount



(In Thousands)


statements.

Debt Administration

As of June 30, 2015, the College had $39.1 million in outstanding bonds payable composed of Florida

Department of Education Capital Improvement Revenue Bonds (Revenue Bonds) issued on behalf of the

College with outstanding balances totaling $12.9 million and Student Housing Qualified Bonds issued by

the Florida SouthWestern State College Financing Corporation with outstanding balance of $24.6 million.

The Revenue Bonds mature serially and are secured by the College’s capital improvement fees.

The College also holds State Board of Education Capital Outlay Bonds with outstanding balances of

$1.6 million issued on behalf of the College. These bonds mature serially and are secured by the

College’s portion of the State assessed motor vehicle license tax. Proceeds from these bonds are to be

used to construct and renovate College facilities. More detailed information about the College’s long-term

liabilities is presented in the notes to financial statements.





anticipated in the 2015-16 fiscal year. In addition, future funding will be tied to performance requirements,

and it is anticipated that overall enrollment will be flat.


Questions concerning information provided in the MD&A and financial statements and notes thereto, or

requests for additional financial information should be addressed to the Dr. Gina Doeble, CPA,

Vice President of Administrative Services, Florida SouthWestern State College, 8099 College Parkway,

Fort Myers, Florida 33919.





Florida SouthWestern State College A Component Unit of the State of Florida



College Unit


Cash and Cash Equivalents 7,059,790$ 226,215$ Restricted Cash and Cash Equivalents 2,779,387 6,622 Investments 6,225,190 998,024 Restricted Investments 4,581,810 - Accounts Receivable, Net 3,180,458 5,071,900 Notes Receivable, Net 170,474 - Due from Other Governmental Agencies 10,298,164 - Prepaid Expenses 1,331,964 5,205


Noncurrent Assets:Restricted Cash and Cash Equivalents 15,466,315 - Investments 5,988,142 2,317,488 Restricted Investments 1,902,539 41,374,824 Depreciable Capital Assets, Net 144,533,676 - Nondepreciable Capital Assets 6,396,981 - Other Assets - 4,172,238


TOTAL ASSETS 209,914,890 54,172,516

DEFERRED OUTFLOWS OF RESOURCESDeferred Amounts Related to Pensions 4,084,477 - Accumulated Decrease in Fair Value of Hedging

Derivatives 1,228,135 -

TOTAL DEFERRED OUTFLOWS OF RESOURCES 5,312,612 -


Accounts Payable 2,725,404 179,838 Accrued Interest Payable 27,937 - Salary and Payroll Taxes Payable 1,497,319 - Retainage Payable 17,995 - Due to Other Governmental Agencies 3,589 - Unearned Revenue 406,605 2,769,161 Deposits Held for Others 158,380 - Long-Term Liabilities - Current Portion:

Bonds Payable 1,404,936 - Notes Payable - 1,100,000 Special Termination Benefits Payable 81,249 - Compensated Absences Payable 160,650 - Net Pension Liability 318,365 -

Total Current Liabilities 6,802,429 4,048,999





College Unit


Bonds Payable 37,689,172 - Derivative Instrument Liability 1,268,215 - Special Termination Benefits Payable 106,838 - Compensated Absences Payable 3,796,570 - Other Postemployment Benefits Payable 214,460 - Net Pension Liability 13,428,801 -





Nonexpendable:Endowment 731,365 18,817,683

Expendable:Grants and Loans 2,177,445 - Scholarships 1,181,195 27,871,457 Capital Projects 26,176,088 - Debt Service 1,810,588 -

Unrestricted (3,239,566) 3,434,377







College Unit


Student Tuition and Fees, Net of Scholarship Allowances of $15,844,105 18,551,715$ -$ Federal Grants and Contracts 1,379,952 - Nongovernmental Grants and Contracts 884,451 5,760,506 Sales and Services of Educational Departments 586,341 - Auxiliary Enterprises 4,085,159 - Other Operating Revenues - 26,000



Personnel Services 54,611,789 - Scholarships and Waivers 16,104,077 1,301,906 Utilities and Communications 2,790,480 - Contractual Services 8,347,041 773,900 Other Services and Expenses 5,534,645 766,360 Materials and Supplies 4,249,388 - Depreciation 6,155,539 -


Operating Income (Loss) (72,305,341) 2,944,340

NONOPERATING REVENUES (EXPENSES)State Noncapital Appropriations 35,609,665 - Federal and State Student Financial Aid 27,039,769 - Gifts and Grants 5,829,944 - Investment Income 549,971 1,865,701 Other Nonoperating Revenues 160,475 - Interest on Capital Asset-Related Debt (1,535,903) - Other Nonoperating Expenses (1,952,905) -



State Capital Appropriations 7,536,811 - Capital Grants, Contracts, Gifts, and Fees 3,677,679 - Other Revenues 549,380 - Increases in Permanent Endowment - 605,317

Total Other Revenues 11,763,870 605,317

Increase in Net Position 5,159,545 5,415,358











CASH FLOWS FROM OPERATING ACTIVITIESStudent Tuition and Fees, Net 19,850,419$ Grants and Contracts 2,238,774 Payments to Suppliers (18,237,764) Payments for Utilities and Communications (2,790,480) Payments to Employees (44,195,637) Payments for Employee Benefits (11,178,966) Payments for Scholarships (16,104,077) Loans Issued to Students (129,896) Collection on Loans to Students 120,012 Auxiliary Enterprises 3,779,285 Sales and Service of Educational Departments 586,341 Other Payments (5,208)


CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESState Noncapital Appropriations 35,609,665 Federal and State Student Financial Aid 27,588,955 Federal Direct Loan Program Receipts 14,770,385 Federal Direct Loan Program Disbursements (14,770,385) Gifts and Grants Received for Other Than Capital or Endowment Purposes 5,834,061 Other Nonoperating Disbursements (839,127)


CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESState Capital Appropriations 3,504,312 Capital Grants and Gifts 3,355,947 Proceeds from Sale of Capital Assets 1,061,551 Purchases of Capital Assets (4,209,138) Principal Paid on Capital Debt (1,347,600) Interest Paid on Capital Debt (1,547,349)

Net Cash Provided by Capital and Related Financing Activities 817,723

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from Sales and Maturities of Investments 6,931,700 Purchases of Investments (7,520,664) Investment Income 583,759

Net Cash Used by Investing Activities (5,205)

Net Increase in Cash and Cash Equivalents 2,938,875 Cash and Cash Equivalents, Beginning of Year 22,366,617

Cash and Cash Equivalents, End of Year 25,305,492







Accounts Receivable, Net 1,344,620 Notes Receivable, Net 11,410 Due from Other Governmental Agencies (55,428) Prepaid Expenses (187,661) Salary and Payroll Taxes Payable 264,364 Accounts Payable (42,002) Unearned Revenue (156,649) Deposits Held for Others (225) Special Termination Benefits Payable (91,408) Compensated Absences Payable (2,164) Other Postemployment Benefits Payable 35,220 Net Pension Liability (6,207,394) Deferred Outflows of Resources Related to Pensions (2,206,381) Deferred Inflows of Resources Related to Pensions 7,376,303



(33,788)$

(422,725)$

7,000$

28,000$

Unrealized losses on investments were recognized as a reduction to investment incomeon the statement of revenues, expenses, and changes in net position, but are not cashtransactions for the statement of cash flows.

Losses from the disposal of capital assets were recognized as a decrease to othernonoperating revenues on the statement of revenues, expenses, and changes in netposition, but are not cash transactions for the statement of cash flows.

The State Board of Education (SBE) issued $267,000 in SBE Capital Outlay Bonds,Series 2014A, to refund $90,000 SBE Capital Outlay Bonds, Series 2004A and $205,000in SBE 2005A, Refunding Bonds. The new debt and defeased old debt were recorded asan increase and decrease, respectively, to bonds payable on the statement of netposition; however, because the proceeds of the new debt were immediately place into anirrevocable trust for defesance of debt of the old debt, the transactions, including the debtservice saving of $7,000 are not cash transactions for the statement of cash flows.

The State Board of Education (SBE) issued $148,000 in SBE Capital Outlay Bonds,Series 2014B to refund $125,000 and $30,000 in SBE Capital Outlay Bonds, Series2005A and 2005B, respectively. The new debt and the refunded debt were recorded asan increase and decresae, respectively, to bonds payable on the statement of netpostion; however, the transactions, including the debt service saving of $28,000, are notcash transactions for the statement of cash flows.





Reporting Entity. The governing body of Florida SouthWestern State College,1 a component unit of the

State of Florida, is the College Board of Trustees. The Board of Trustees constitutes a corporation and

is composed of nine members appointed by the Governor and confirmed by the Senate. The Board of

Trustees is under the general direction and control of the Florida Department of Education, Division of

Florida Colleges, and is governed by law and State Board of Education rules. However, the Board of



College correspond with those of Charlotte, Collier, Glades, Hendry, and Lee Counties.





of their relationship with the Board of Trustees are such that exclusion would cause the College’s financial

statements to be misleading. Based on the application of these criteria, the College is a component unit

of the State of Florida, and its financial balances and activities are reported in the State’s Comprehensive

Annual Financial Report by discrete presentation.

Blended Component Unit. Based on the application of the criteria for determining component units, the

Florida SouthWestern State College Financing Corporation (Financing Corporation), a legally separate

entity, is included within the College’s reporting entity as a blended component unit. The Financing

Corporation is a not-for-profit Florida corporation under the provisions of Chapter 617, Florida Statutes,

and is also a direct-support organization, as defined in Section 1004.70, Florid Statutes. The Financing

Corporation is managed independently, outside the College’s budgeting process, and its powers

generally are vested in a governing board pursuant to various State Statutes. The Financing Corporation

was established to finance and/or operate parking, student housing, and other capital projects for the

exclusive benefit of the College and its students. Due to the substantial economic relationship between

the Financing Corporation and the College, the financial activities of the Financing Corporation are

included in the College’s financial statements. The financial data reported on the accompanying financial

statements was derived from the Financing Corporation’s audited financial statements for the fiscal year

ended March 31, 2015.

The Financing Corporation is audited by other auditors, pursuant to Section 1004.70(6), Florida Statutes.

The Financing Corporation’s audited financial statements are available to the public at the College’s

administrative offices. Additionally, condensed financially statements for the Financing Corporation are

shown in a subsequent note.


component units, the Florida SouthWestern State College Foundation, Inc. (Foundation), a legally

1 The College’s Board of Trustees approved the name change from Edison State College to Florida SouthWestern State College on July 1, 2014, pursuant to Section 1001.60(2)(b), Florida Statutes.


separate entity, is included within the College’s reporting entity as a discretely presented component unit

and is governed by a separate board.



is managed independently, outside the College’s budgeting process, and its powers generally are vested

in a governing board pursuant to various State statutes. The Foundation receives, holds, invests, and

administers property, and makes expenses to or for the benefit of the College.


Foundation’s audited financial statements are available to the public at the College’s administrative

offices. The financial data reported on the accompanying financial statements was derived from the

Foundation’s audited financial statements for the fiscal year ended March 31, 2015.




























The College’s component units use the economic resources measurement focus and accrual basis of


and follows GASB standards of accounting and financial reporting.






include State noncapital appropriations, Federal and State student financial aid, investment income

(net of unrealized gains or losses on investments), and revenues for capital construction projects.









the student or the third party making payment on behalf of the student. The College applied “The

Alternate Method” as prescribed in NACUBO Advisory Report 2000-05 to determine the reported net

tuition scholarship allowances. Under this method, the College computes these amounts by allocating

the cash payments to students, excluding payments for services, on a ratio of total aid to the aid not

considered third-party aid.





hand, cash in demand accounts, cash invested overnight in a money market mutual fund, and cash

placed with the State Treasury Special Purpose Investment Account (SPIA) and State Board of

Administration (SBA) Florida PRIME investment pools. For reporting cash flows, the College considers

all highly liquid investments with original maturities of 3 months or less to be cash equivalents. Under

this definition, the College considers amounts invested in the State Treasury SPIA and SBA Florida

PRIME investment pools to be cash equivalents. College cash deposits are held in banks qualified as

public depositories under Florida law. All such deposits are insured by Federal depository insurance, up

to specified limits, or collateralized with securities held in Florida’s multiple financial institution collateral

pool required by Chapter 280, Florida Statutes. Cash and cash equivalents that are externally restricted

to make debt service payments, maintain sinking or reserve funds, or to purchase or construct capital or

other restricted assets are classified as restricted.

At June 30, 2015, the College reported as cash equivalents at fair value $43,029 in the State Treasury

SPIA investment pool representing ownership of a share of the pool, not the underlying securities. The


SPIA carried a credit rating of A+f by Standard & Poor’s, had an effective duration of 2.67 years and fair

value factor of 1.0013 at June 30, 2015. The College relies on policies developed by the State Treasury

for managing interest rate risk or credit risk for this investment pool. Disclosures for the State Treasury

SPIA investment pool are included in the notes to financial statements of the State’s Comprehensive

Annual Financial Report.




Rule 2a7-like external investment pool, are similar to money market funds in which shares are owned in

the fund rather than the underlying investments. The Florida PRIME investment pool carried a credit

rating of AAAm by Standard & Poor’s and had a weighted-average days to maturity (WAM) of 34 days

as of June 30, 2015. A portfolio’s WAM reflects the average maturity in days based on final maturity or

reset date, in the case of floating-rate instruments. WAM measures the sensitivity of the Florida PRIME

investment pool to interest rate changes. The investments in the Florida PRIME investment pool are

reported at fair value, which is amortized cost.

Capital Assets. College capital assets consist of land; art collections; construction in progress; buildings;

other structures and improvements; and furniture, machinery, and equipment. These assets are

capitalized and recorded at cost at the date of acquisition or at estimated fair value at the date received

in the case of gifts and purchases of State surplus property. Additions, improvements, and other outlays

that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and

maintenance are expensed as incurred. The College has a capitalization threshold of $5,000 for tangible

personal property and $25,000 for buildings and other structures and improvements. Depreciation is

computed on the straight-line basis over the following estimated useful lives:







Noncurrent Liabilities. Noncurrent liabilities include bonds payable, derivative instrument liability,

special termination benefits payable, compensated absences payable, other postemployment benefits

payable, and net pension liability that are not scheduled to be paid within the next fiscal year.









2. Reporting Change








3. Adjustment to Beginning Net Position

The beginning net position of the College, was decreased by $18,076,464 due to the adoption of a new

GASB Pronouncement, Statement No. 68, Accounting and Financial Reporting for Pensions.

GASB Statement No. 68 requires the College to recognize its proportionate share of the net pension

liabilities and related pension amounts of the cost-sharing multiple-employer FRS and HIS defined benefit

plans.



funds unrestricted net position as shown below. This deficit can be attributed to the full recognition of

long-term liabilities (i.e., compensated absences payable, other postemployment benefits payable, and

net pension liabilities) in the current unrestricted funds.

Net PositionCollege: Current Funds - Unrestricted (9,033,501)$ Auxiliary Funds 1,295,703

Total College Net Position (7,737,798)

Blended Component Unit - Financing Corporation 4,498,232

Total (3,239,566)$

5. Investments

The College’s Board of Trustees has adopted a written investment policy providing that surplus funds of

the College shall be invested in those institutions and instruments permitted under the provisions of

Florida Statutes. Section 218.415(16), Florida Statutes, authorizes the College to invest in the Florida

PRIME investment pool administered by the State Board of Administration (SBA); Securities and

Exchange Commission registered money market funds with the highest credit quality rating from a

nationally recognized rating agency; interest-bearing time deposits and savings accounts in qualified

public depositories, as defined by Section 280.02, Florida Statutes; direct obligations of the United States

Treasury; obligations of Federal agencies and instrumentalities; securities of, or interests in, certain

open-end or closed-end management type investment companies; and other investments approved by

the College’s Board of Trustees as authorized by law. State Board of Education (SBE)


Rule 6A-14.0765(3), Florida Administrative Code, provides that College loan, endowment, annuity, and

life income funds may also be invested pursuant to Section 215.47, Florida Statutes. Investments

authorized by Section 215.47, Florida Statutes, include bonds, notes, commercial paper, and various

other types of investments.





State Board of Administration Debt Service Accounts 1,175,738$ Short-Term Investments 662,524 Obligations of United States Government Agencies and Instrumentalities 10,293,689 Collateralized Mortgage Obligations 375,338 State and Municipal Bonds 899,556

748,085 Corporate Bonds 3,815,950 Mutual Funds 726,801


Foreign Obligations


The College reported investments totaling $1,175,738 at June 30, 2015, in the SBA Debt Service

Accounts. These investments are used to make debt service payments on bonds issued by the SBE for

the benefit of the College. The College’s investments consist of United States Treasury securities, with

maturity dates of 6 months or less, and are reported at fair value. The College relies on policies

developed by the SBA for managing interest rate risk and credit risk for this account. Disclosures for the

Debt Service Accounts are included in the notes to financial statements of the State’s Comprehensive


Other Investments

The College’s other investments at June 30, 2015, totaling $16,795,142, consisted of Obligations of

United States Agencies and Instrumentalities of $10,293,689, foreign obligations of $748,085, State and

Municipal bonds of $899,556, corporate bonds of $3,815,950, short-term investments of $662,524, and

collateralized mortgage obligations of $375,338 reported at fair value. The College also had investments

at June 30, 2015, totaling $726,801 that consisted of mutual funds reported at fair value and are held as

part of its endowments.

The following risks apply to these investments:

Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair

value of an investment. The College’s investment policy limits interest rate risk by attempting to match

investment maturities with known cash needs and anticipated cash flow requirements. Investments of


nonoperating funds (“core funds”) shall have a term appropriate to the need for funds but should not

exceed 3 years.

The College utilizes “effective duration” as a measurement of interest rate risk for Federal agency

obligations of a maximum duration of 3 years. The College’s investments in mutual funds at

June 30, 2015, do not have reported maturities.

As a means of managing its exposure to fair-value losses arising from increasing interest rates, the

Financing Corporation has established a target duration of its fixed-income portfolio up to 3 years. The

Obligations of United States Agencies and Instrumentalities, foreign obligations, State and Municipal

bonds, and corporate bonds have maturities of less than 1 year up to 3 years.

Percent ofInvestment Maturities Portfolio

Less than 1 year 12.101-3 years 87.90

Total 100.00

Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its

obligations. The College’s investment policy does not address credit risk. The College’s investments in

Federal agency obligations at June 30, 2015, were rated AA+ and Aaa by Standard & Poor’s and

Moody’s, respectively, at June 30, 2015. The College’s investments in mutual funds at

June 30, 2015 were unrated.

It is the Financing Corporation’s policy that the fixed income portfolio must be rated at A or higher for

corporate bond investments and AA or higher for all other investments by any of the three rating services.

Percent ofRating Portfolio

Aaa 56.40Aa 23.10A 20.50

Total 100.00

Custodial Credit Risk. Custodial risk is the risk that, in the event of failure of the counterparty, the College

will not be able to recover the value of its investments or collateral securities that are in the possession

of an outside party. The College’s investment policy pursuant to Section 218.415(18), Florida Statutes,

requires securities, with the exception of certificates of deposits, be held with a third party custodian; and

all securities purchased by, and all collateral obtained by the College should be properly designated as

an asset of the College. The securities must be held in an account separate and apart from the assets

of the financial institution. A third-party custodian is defined as any bank depository chartered by the

Federal Government, the State of Florida, or any other state or territory of the United States which has a

branch or principal place of business in the State of Florida, or by a national association organized and

existing under the laws of the United States which is authorized to accept and execute trusts and is doing


business in the State of Florida. Certificates of deposit will be placed in the provider’s safekeeping

department for the term of the deposit.

As of June 30, 2015, the College’s Federal agency obligations were held with a third-party custodian as

required by the College’s investment policy.

The Financing Corporation utilizes the services of investment managers for its investments. The

investments held by the investment manager are uninsured and unregistered, with securities held by the

counterparty’s trust department or agent in the Financing Corporation’s name.

Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributable to the magnitude

of the College’s investments in a single issuer. The College’s investment policy has established asset

allocation and issuer limits on the following investments which are designed to reduce concentration of

credit risk of the College’s investment portfolio. A maximum of 100 percent of available funds may be

invested in intergovernmental pools, money market mutual funds, in United States government securities,

and in United States government agencies; 75 percent of available funds may be invested in Federal

agencies and instrumentalities; 50 percent of available funds may be invested in corporate bonds,

non-negotiable certificates of deposit and savings accounts, and commercial paper; 40 percent of

available funds may be invested in repurchase agreements; 25 percent of available funds may be

invested in supranationals, municipal bonds, agency mortgage-backed securities, asset-backed

securities, and Florida local government surplus funds trust funds (Florida PRIME); and 20 percent of

available funds may be invested in fixed-income mutual funds.

The Financing Corporation policy limits investments to United States Treasury Securities, Obligations of

United States Agencies and Instrumentalities, taxable municipal bonds, and corporate bonds. The

maximum exposure to A and AA rated bonds is 25 percent and 25 percent, respectively, of the portfolio’s

market value. United States Treasury Securities and obligations explicitly guaranteed by the

U.S. Government are not considered to have credit risk and do not have purchase limitations.

Management of the Financing Corporation believes the concentration of credit risk with respect to its

investments is mitigated by investing through the use of a national investment manager in United States

Treasury Securities, Obligations of United States Agencies and Instrumentalities, highly rated corporate

bonds, municipal bonds, and widely traded mutual funds.


Investments held by the Florida SouthWestern State College Foundation, Inc., at March 31, 2015,

consisted of money market and mutual funds and are reported at fair value, as follows:



Money Market Funds 2,956$ Mutual Funds: Hedge 8,780,756 Equities (1) 20,544,542 Bonds 15,362,082


Note: (1) Investment risk disclosures are not required for equity mutual funds.

Interest Rate Risk. As a means of managing its exposure to fair-value losses arising from increasing

interest rates, the Foundation has established a target for the duration of its fixed-income portfolio to be

between 3 and 7 years.

As of March 31, 2015, the maturities of the Foundation’s mutual funds-bonds investments of

$15,362,082 by percentage of its portfolio, are presented in the following table:

PercentageInvestment Maturities of Portfolio

Less than 1 year 16.801 - 3 years 27.504 - 5 years 19.305 - 7 years 12.207 - 9 years 8.509 or more years 15.70

Total 100.00

The Foundation’s investments in money market and fixed-income mutual funds are held as a portion of

large mutual funds and are not individual securities held by the Foundation. Therefore, it is not possible

to disclose maturities by actual security held. Instead, this disclosure is provided for the fixed-income

mutual funds in total.

Credit Risk. It is the Foundation’s policy that the investment grade portion of the fixed-income portfolio

must be rated at the four highest ratings (i.e., single “A” or higher) or a comparable rating by Moody’s or

Standard & Poor’s rating services, respectively. The high-yield portion of the fixed-income portfolio will

consist of below investment grade securities. There is no bottom line on the ratings of the high-yield

portfolio.

The Foundation’s fixed-income investments at March 31, 2015, were rated as follows:


PercentageRating of Portfolio

Aaa 65.46Aa 3.86A 11.66Baa 14.22Ba and below 3.86Not Rated 0.94

Total 100.00

The Foundation’s investments in money market and fixed-income mutual funds are held as a portion of

large mutual funds and are not individual securities held by the Foundation. Therefore, it is not possible

to disclose credit ratings by actual security held. Instead, this disclosure is provided for the fixed-income

mutual funds in total. Obligations of the United States government or obligations explicitly guaranteed

by the United States government are not considered to have credit risk and do not have purchase

limitations.

Custodial Credit Risk. The Foundation utilizes the services of investment managers. The investments

held by these managers are uninsured and unregistered, with the securities held by the counterparty’s

trust department of agent in the Foundation’s name. There were no losses during the fiscal year due to

default by counterparties to investment transactions.

Concentration of Credit Risk. The Foundation’s policies state that the non-United States investment

grade portion of the fixed-income portfolio must consist of securities of non-United States issuers located

in at least three non-United States countries. The Foundation’s policies do not specifically limit the debt

of securities maturity dates.

The Foundation’s investment policy prohibits the concentration of more than 5 percent of its investments

in a single specific investment vehicle. Likewise, the Foundation cannot hold more than 5 percent of any

specific issuer.





$801,682 allowance for doubtful accounts.

7. Notes Receivable

Notes receivable represent student loans made under the short-term loan program of $191,526. Notes

receivable are reported net of a $21,052 allowance for doubtful notes.


The amount due from other governmental agencies primarily consists of $7,341,015 of Public Education

Capital Outlay allocations due from the State for construction and renovation of College facilities, and

$1,838,459 due from the Florida Prepaid College Fund.


9. Capital Assets


Beginning EndingDescription Balance Additions Reductions Balance

Nondepreciable Capital Assets:Land 3,491,190$ -$ 411,360$ 3,079,830$ Art Collections 503,093 - - 503,093 Construction in Progress 1,865,401 3,135,123 2,186,466 2,814,058

Total Nondepreciable Capital Assets 5,859,684$ 3,135,123$ 2,597,826$ 6,396,981$

Depreciable Capital Assets:Buildings 203,441,253$ 2,142,725$ 1,518,910$ 204,065,068 Other Structures and Improvements 13,686,476 20,000 93,755 13,612,721 Furniture, Machinery, and Equipment 9,193,203 1,067,033 394,312 9,865,924

Total Depreciable Capital Assets 226,320,932 3,229,758 2,006,977 227,543,713

Less, Accumulated Depreciation:Buildings 60,095,481 4,100,252 439,744 63,755,989 Other Structures and Improvements 10,853,705 1,110,451 18,751 11,945,405 Furniture, Machinery, and Equipment 6,750,197 944,836 386,390 7,308,643

Total Accumulated Depreciation 77,699,383 6,155,539 844,885 83,010,037

Total Depreciable Capital Assets, Net 148,621,549$ (2,925,781)$ 1,162,092$ 144,533,676$


Unearned revenue at June 30, 2015, includes student dorm fees of $406,605 paid to the Financing

Corporation that was received prior to fiscal year-end related to subsequent accounting periods.

11. Unearned Revenue – Component Unit

The Foundation received contributions and grants with either time or eligibility requirements. The

amounts are available when the restrictions have expired or eligibility requirements have been met. As

of March 31, 2015, the following amounts were reported as unearned revenue:

Description Amount

Pooled Gift Annuity 469,161$ Life Estate Trust 2,300,000


12. Deferred Outflow of Resources – Component Unit

The College’s blended component unit, the Financing Corporation, entered into an interest rate swap

agreement in connection with its tax-exempt loan to manage the risk of rising interest rates on its variable

rated-based debt. The deferred outflow of resources includes the effect of deferring accumulated

decreases in fair value of a hedging derivative related to this interest rate swap agreement. The Bonds

Payable section of Note 13 below includes further discussion of the interest rate swap agreement.



Long-term liabilities activity for the fiscal year ended June 30, 2015, is shown below:


Bonds Payable 40,476,708$ 415,000$ 1,797,600$ 39,094,108$ 1,404,936$ Derivative Instrument Liability 1,538,254 - 270,039 1,268,215 - Special Termination Benefits Payable 279,495 34,318 125,726 188,087 81,249 Compensated Absences Payable 3,959,384 230,466 232,630 3,957,220 160,650 Other Postemployment Benefits Payable 179,240 115,486 80,266 214,460 - Net Pension Liability (1) 19,954,560 3,047,002 9,254,396 13,747,166 318,365



Bonds Payable – College. Various bonds were issued to finance capital outlay projects of the College.

The following is a description of the bonded debt issues:


Capital Improvement Revenue Bonds, Series 2010A. These bonds are authorized by Article VII, Section 11(d) of the Florida Constitution; Sections 215.57 through 215.83 and Section 1009.23, Florida Statutes; and other applicable provisions of law. Principal and interest on these bonds are secured by and payable solely from a first lien pledge of the capital improvement fees collected pursuant to Section 1009.23(11), Florida Statutes, by the Series 2010A participating colleges on a parity with any additional bonds issued subsequent to the issuance of the Series 2010A bonds. The Series 2010A bonds constitute the first series of bonds to be issued pursuant to a Master Authorizing Resolution. Upon the issuance of additional bonds, all bonds will share a parity first lien on the pledged revenues of all colleges participating in any series of bonds then outstanding. The Series 2010A bonds will share the lien of such additional bonds on the Series 2010A pledged revenues and on the revenues pledged by the colleges participating in such additional bonds. The bonds were issued for new construction and renovation and remodeling of educational facilities.



SBE Capital Outlay Bonds:Series 2008A 1,195,000$ 4.25 - 5.0 2028Series 2014A, Refunding 260,000 3.0 - 5.0 2025Series 2014B, Refunding 148,000 2.0 - 5.0 2020


Series 2010A 12,940,000 3.0 - 4.375 2030

Total 14,543,000$




2016 817,000$ 600,027$ 1,417,027$ 2017 788,000 572,002 1,360,002 2018 792,000 539,523 1,331,523 2019 820,000 506,872 1,326,872 2020 857,000 473,123 1,330,123 2021-2025 4,884,000 1,804,937 6,688,937 2026-2030 5,585,000 720,519 6,305,519

Total 14,543,000$ 5,217,003$ 19,760,003$


Bonds Payable – Financing Corporation. On December 1, 2010, the Financing Corporation entered

into a Financing Agreement with the Lee County Development Authority to issue a $26,300,000 Industrial

Development Revenue Bond (Series 2010) for the construction of a 405-bed dormitory. On

December 21, 2010, the Corporation closed on the bond purchased by Branch Banking and Trust

Company as a tax-exempt Bank Qualified Loan (BQ). The BQ provides for the repayment of principal

and related interest through December 1, 2040. The BQ will bear interest at a rate computed as the sum

of (a) 68 percent of 1-month London Interbank Offered Rate (LIBOR) and (b) 65 percent of 1.85 percent

per annum, as adjusted monthly with changes in one-month LIBOR. The rate as of March 31, 2015, was

1.322 percent.

The following is a schedule of future debt service requirements for the BQ:

Fiscal YearEnding March 31 Principal Interest Total

2016 587,936$ 917,482$ 1,505,418$ 2017 612,539 898,001 1,510,540 2018 635,597 872,704 1,508,301 2019 659,517 848,997 1,508,514 2020 682,134 824,397 1,506,531 2021-2025 3,825,634 3,723,925 7,549,559 2026-2030 4,602,227 2,952,187 7,554,414 2031-2035 5,536,495 2,026,395 7,562,890 2036-2040 6,660,322 912,637 7,572,959 2041 748,707 29,783 778,490

Total 24,551,108$ 14,006,508$ 38,557,616$

LCDA Industrial Development Revenue Bond

Tenant revenues collected are pledged first to be used for debt service. The total amount of rental

revenue recorded during the year ended March 31, 2015, was $2,584,599.

The Financing Corporation was required to deposit into a separate account an amount to be used for

repayment of interest on the Series 2010A bonds through the construction period. The amount required

is recognized in the financial statements as restricted cash. At March 31, 2015, there was $1,770,976 in

restricted cash available for future debt service requirements.


Defeased Debt – College. On December 10, 2013, the SBE issued $24,555,000 of the SBE Capital

Outlay Bonds, Series 2014A. The College’s portion of the bonds, $267,000 was used to refund

$90,000 and $205,000 of outstanding SBE Capital Outlay Bonds, Series 2004A and 2005A, Refunding,

respectively. The proceeds of the bond issue were deposited in a trust fund with the SBA to provide for

all future debt service payments on the bonds. The assets with the SBA and the liability for the refunded

bonds are not included on the College’s statement of net position. As a result of the refunding, the

College had a debt service savings of $28,000 and obtained an economic gain of $20,238.

Refunded Debt – College. On December 2, 2014, the SBE issued $129,880,000 of the SBE Capital

Outlay Bonds, Series 2014B. The College’s portion of the bonds, $148,000 was used to call the

remaining debt of the College’s portion of the SBE Capital Outlay Bonds, Series 2005A and 2005B,

totaling $125,000 and $30,000, respectively. The SBE Capital Outlay Bonds, Series 2005A and

2005B were called on January 1, 2015. As a result of the refunding, the College had a debt service

savings of $7,000 and obtained an economic gain of $3,559.

Interest Rate Swap Agreement – Financing Corporation. On December 23, 2010, the Financing

Corporation, as the counterparty, entered into an interest rate swap agreement (Swap) with Branch Bank

and Trust Company for the purpose of hedging its variable interest rate risk on the tax-exempt BQ loan.

The Swap provides that the Financing Corporation pay interest as an annual fixed rate of 3.66 percent

effective July 1, 2012, and terminating December 17, 2017. The Swap has been determined to be an

effective hedge. As such, the change in fair value is reported as a deferred outflow, a noncurrent asset

reported on the statement of net position. The fair value balances and notional amounts of derivative

instruments for the fiscal year then ended March 31, 2015, as reported in the financial statements are

presented below:

Interest Rate NotionalSwap Classification Amount Classification Amount Amount

Cash Flow Hedges: Pay-Fixed Interest Rate Swap 288,428$ (1,268,215)$ 24,910,418$

Changes in Fair Value Fair Value at March 31, 2015

Deferred Outflow of Resources

Derivative Instrument Interest Rate Swap

Interest Rate Risk. On its only hedge, a pay-fixed and receivable variable interest rate swap agreement,

as LIBOR decreases, the Financing Corporation’s net payment on the Swap increases.

Termination Risk. The Financing Corporation or its counterparty may terminate the Swap if the other

party fails to perform under the terms of the contract. If at the time of termination, a hedging derivative

instrument is in a liability position, the College would be liable to the counterparty for a payment equal to

the liability.

Rollover Risk. The Financing Corporation is exposed to rollover risk on this hedging instrument as it is a

debt hedge that matures or may be terminated prior to the maturity of the hedged debt. When this

instrument terminates, the Financing Corporation will be re-exposed to the risks being hedged by the

instrument.

Special Termination Benefits Payable. On November 16, 1989, the Board approved a Retirement

Incentive Program (Program) that established certain eligibility guidelines for employees to receive


benefits under this Program. For qualifying employees, the Program provides payment of 50 percent of

the cost of hospitalization and life insurance coverage for a period of 36 calendar months after the

effective date of separation; payment for 50 percent of accumulated sick leave for the first 10 years of

creditable service, plus an additional 2.5 percent of accumulated sick leave for each year of creditable

service beyond 10 years to a maximum of 20 additional years; and a one-time only salary bonus. The

College reported a special termination benefits payable for seven employees of $188,087 at June 30,

2015, of which $81,249 represents the current portion.









absences liability, $160,650, is the amount expected to be paid in the coming fiscal year, and represents

eligible payments for unused sick leave on behalf of regular retirees and Deferred Retirement Optional

Plan Program participants to a deferred compensation annuity program.



postemployment benefits provided by the Florida College System Risk Management Consortium

(Consortium).

Plan Description. The College contributes to an agent multiple-employer defined benefit plan (Plan)

administered by the Consortium for postemployment benefits. Pursuant to the provisions of Section

112.0801, Florida Statutes, former employees who retire from the College are eligible to participate in

the College’s healthcare and life insurance benefits. The College subsidizes the premium rates paid by

retirees by allowing them to participate in the Plan at reduced or blended group (implicitly subsidized)

premium rates for both active and retired employees. These rates provide an implicit subsidy for retirees

because, on an actuarial basis, their current and future claims are expected to result in higher costs to

the Plan on average than those of active employees. The College does not offer any explicit subsidies

for retiree coverage. Retirees are required to enroll in the Federal Medicare program for their primary

health coverage as soon as they are eligible. Neither the College nor the Consortium issue a stand-alone

annual report for the Plan and the Plan is not included in the annual report of a public employee retirement






the 2014-15 fiscal year, 62 retirees received postemployment healthcare benefits, and 82 retirees

received postemployment life insurance benefits. The College provided required contributions of

$80,266 toward the annual OPEB cost, composed of benefit payments made on behalf of retirees for


claim expenses (net of reinsurance), administrative expenses, and reinsurance premiums. Retiree

contributions totaled $388,402, which represents 1.1 percent of covered payroll.



the parameters of GASB Statement No. 45. The ARC represents a level of funding that if paid on an




obligation:

Description Amount




Increase in Net OPEB Obligation 35,220 Net OPEB Obligation, Beginning of Year 179,240

Net OPEB Obligation, End of Year 214,460$


net OPEB obligation as of June 30, 2015, and for the 2 preceding fiscal years, were as follows:

Percentage ofAnnual


2012-13 92,297$ 46.1% 135,379$ 2013-14 115,193 61.9% 179,240 2014-15 115,486 69.5% 214,460


accrued liability for benefits was $1,047,396 and the actuarial value of assets was $0, resulting in an

unfunded actuarial accrued liability of $1,047,396 and a funded ratio of 0 percent. The covered payroll

(annual payroll of active participating employees) was $29,665,206 at the actuarial date of the

July 1, 2013, and the ratio of the unfunded actuarial accrued liability to the covered payroll was

3.5 percent.





determined regarding the funded status of the Plan and the annual required contributions of the employer







on the substantive plan provisions, as understood by the employer and participating members, and





the calculations.

The College’s OPEB actuarial valuation as of July 1, 2013, used the projected unit credit actuarial method

to estimate the actuarial accrued liability as of June 30, 2015, and the College’s 2014-15 fiscal year ARC.




rate of 3 percent per year, and an annual healthcare cost trend rate of 7.5 percent pre-Medicare and

6 percent Medicare for the 2014-15 fiscal year, reduced by decrements to an ultimate rate of 5 percent

after 3 years for pre-Medicare and 2 years for Medicare. The unfunded actuarial accrued liability is being

amortized as a level percentage of projected payroll amortized over 30 years on open basis. The

remaining amortization period at June 30, 2015, was 22 years.


























FRS Pension Plan






Special Risk Class – Members who are employed as law enforcement officers and meet the criteria to qualify for this class.




30 years of service except for members classified as special risk who are eligible for normal retirement

benefits at age 55 or at any age after 25 years of service. All members enrolled in the Plan on or after

July 1, 2011, once vested, are eligible for normal retirement benefits at age 65 or any time after 33 years

of creditable service except for members classified as special risk who are eligible for normal retirement

benefits at age 60 or at any age after 30 years of service. Employees enrolled in the Plans may include

up to 4 years of credit for military service toward creditable service. The Plan also includes an early

retirement provision; however, there is a benefit reduction for each year a member retires before his or

her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-of-

living adjustments to eligible participants.







pension benefits.











earned:




Special Risk Regular Service from December 1, 1970 through September 30, 1974 2.00 Service on and after October 1, 1974 3.00










employees. Contribution rates during the 2014-15 fiscal year were:


FRS, Regular 3.00 7.37FRS, Senior Management Service 3.00 21.14FRS, Special Risk 3.00 19.82Deferred Retirement Option Program - Applicable to Members from All of the Above Classes 0.00 12.28FRS, Reemployed Retiree (2) (2)



The College’s contributions to the plan totaled $1,830,437 for the fiscal year ended June 30, 2015.










of June 30, 2013.

For the fiscal year ended June 30, 2015, the College recognized pension expense of $521,879. In




Differences between expected and actual experience -$ 263,847$ Change of assumptions 738,391 - Net difference between projected and actual earnings on FRS pension plan investments - 7,112,456 Changes in proportion and differences between College FRS contributions and proportionate share of contributions 630,426 - College FRS contributions subsequent to the measurement date 1,830,437 -

Total 3,199,254$ 7,376,303$






2016 (1,569,629)$ 2017 (1,569,629) 2018 (1,569,629) 2019 (1,569,629) 2020 208,485 Thereafter 62,545

Total (6,007,486)$


















Total 100.00%



Discount Rate. The discount rate used to measure the total pension liability was 7.65 percent. The

Plan’s fiduciary net position was projected to be available to make all projected future benefit payments

of current active and inactive employees. Therefore, the discount rate for calculating the total pension









(6.65%) (7.65%) (8.65%)



available in the separately issued FRS Pension Plan and Other State-Administered Systems

Comprehensive Annual Financial Report. .



HIS Pension Plan











include Medicare.









The College’s contributions to the HIS Plan totaled $409,093 for the fiscal year ended June 30, 2015.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources Related to Pensions. At

June 30, 2015, the College reported a net pension liability of $9,483,528 for its proportionate share of the

net pension liability. The current portion of the net pension liability is the College’s proportionate share

of benefit payments expected to be paid within one year, net of the College’s proportionate share of the











sources:


Change of assumptions 337,462$ Net difference between projected and actual earnings on HIS pension plan investments 4,552 Changes in proportion and differences between College HIS contributions and proportionate share of HIS contributions 134,116 College contributions subsequent to the measurement date 409,093

Total 885,223$

The deferred outflows of resources totaling $409,093 was related to pensions resulting from College





2016 77,199$ 2017 77,199 2018 77,199 2019 77,199 2020 76,061 Thereafter 91,273

Total 476,130$





While an experienced study had not been completed for the plan, the Florida Retirement System Actuarial

Assumptions Conference reviewed the actuarial assumptions for the plan.















(3.29%) (4.29%) (5.29%)























0.04 percent of payroll and by forfeited benefits of plan members. Allocations to the Investment Plan



Percent ofGross

Class CompensationFRS, Regular 6.30FRS, Senior Management Service 7.67FRS, Special Risk Regular 14.00







account for up to 5 years. If the employee returns to FRS-covered employment within the 5 year period,

the employee will regain control over their account. If the employee does not return within the 5 year










The College’s Investment Plan pension expense totaled $795,039 for the fiscal year ended

June 30, 2015.









contributes 5.14 percent of the participant’s salary to the participant’ account, 2.54 percent to cover the






The College’s contributions to the Program totaled $143,714 and employee contributions totaled



Senior Management Service Local Annuity Program. Section 121.055(1)(b)2., Florida Statutes, and

Florida Retirement System Rule 60S-1.0057, Florida Administrative Code, provide that local agency

employees eligible for the FRS, Senior Management Service Class, may elect to withdraw from the FRS

altogether and participate in a local annuity program. Pursuant thereto, the College established the

Senior Management Service Class Local Annuity Program (Local Annuity Program). Employees in

eligible positions are allowed to make an irrevocable election to participate in the Local Annuity Program,

rather than the FRS.

The Local Annuity Program is defined contribution plan, which provides full and immediate vesting of all

contributions submitted to the participating companies on behalf of the employee. The College

contributes 14 percent of the employee’s salary to the Local Annuity Program. The participants may

make contributions toward the Local Annuity Program by way of salary reduction or by deduction of a

percentage of the employee’s gross compensation not to exceed the percentage contributed by the

employer.

The College’s contributions to the Local Annuity Program totaled $179,017 for the 2014-15 fiscal year.

16. Other Termination Benefits

The College provides an IRS approved Code Section 401(a) pre-tax program for termination pay that

permits the College to disburse termination pay in a tax-advantaged manner for both the College and the

employee. Contributions are limited by IRS regulation. All employees in designated employee classes

with at least 10 years of service at the time of separation are mandated to participate in this program.

The College deferred $345,034 in salaries for 23 employees during the 2014-15 fiscal year for other

termination benefits.

17. Savings Incentive Plan

Effective January 1, 1994, the Board approved a Savings Incentive Plan as provided by Section 403(b) of

the Internal Revenue Code of 1986. Under the Plan, all full-time employees can elect to defer a portion

of their salary within Internal Revenue Service guidelines. The College may make a matching employer

contribution in an amount to be determined annually by the Board at its discretion. During the

2014-15 fiscal year, the College matched one dollar for every dollar deferred by the employee up to the

first 3 percent of employee compensation. Each employee is fully vested upon enrollment in the Plan,

and is allowed to direct the investment of his or her account to any one of the various fund groups and

insurance companies approved for investment by the College. During the 2014-15 fiscal year, the

College contributed $609,041 as matching funds under the Plan.


The College’s construction commitments at June 30, 2015, are as follows:



Lee Campus - Student Activity CenterConstruction 3,913,025$ -$ 3,913,025$ Architect 1,998,914 1,274,359 724,555 Materials and Other Construction Exp. 108,531 18,076 90,455

Total 6,020,470 1,292,435 4,728,035

Lee Campus - Bldg G HVAC & RoofConstruction 724,979 717,487 7,492 Architect 33,000 33,000 - Materials and Other Construction Exp. 118,095 118,095 -

Total 876,074 868,582 7,492

Lee Campus - Bldg H Renovation & RemodelingConstruction 4,045,600 28,525 4,017,075 Architect 450,000 306,008 143,992 Materials and Other Construction Exp. 104,400 33,701 70,699

Total 4,600,000 368,234 4,231,766

Lee Campus - Bldg K Roof, Window, & LightingConstruction 565,422 172,457 392,965 Architect 5,950 4,850 1,100 Materials and Other Construction Exp. 13,628 - 13,628

Total 585,000 177,307 407,693

Lee Campus - Minor Projects - SignageMaterials and Other Construction Exp. 215,000 107,500 107,500

Total 215,000 107,500 107,500

Total 12,296,544$ 2,814,058$ 9,482,486$













health, life, and other liability coverage. Settled claims resulting from these risks have not exceeded

commercial coverage in any of the past 3 fiscal years. In addition, the College also purchased a


$1,000,000 School Leader’s Error and Omissions Policy which is required to operate the Lee Campus

Collegiate Charter High School.

The Financing Corporation is exposed to various risks of loss related to torts; thefts of, damage to, and

destruction of assets; errors and omissions; and natural disasters. These risks are covered by

commercial insurance purchased from independent third parties. Settlement claims have not exceeded

commercial coverage in any of the last three fiscal years.












Instruction 30,229,038$ Public Services 426,574 Academic Support 7,215,593 Student Services 10,189,277 Institutional Support 15,914,052 Operation and Maintenance of Plant 10,099,892 Scholarships and Waivers 16,031,168 Depreciation 6,155,539 Auxiliary Enterprises 1,531,826


21. Blended Component Unit

The College has one blended component unit as discussed in Note 1. The following financial information

is presented net of eliminations for the College’s blended component unit:


Condensed Statement of Net Position

BlendedComponent Unit

Assets: Other Current Assets $ 2,879,034 $ 32,857,344 $ (109,141) $ 35,627,237 Capital Assets, Net 20,319,909 130,610,748 - 150,930,657 Other Noncurrent Assets 7,759,118 15,597,878 - 23,356,996

Total Assets 30,958,061 179,065,970 (109,141) 209,914,890

Deferred Outflows of Resources 1,228,135 4,084,477 - 5,312,612

Liabilities: Other Current Liabilities 1,045,749 5,865,821 (109,141) 6,802,429 Noncurrent Liabilities 25,231,387 31,272,669 - 56,504,056

Total Liabilities 26,277,136 37,138,490 (109,141) 63,306,485

Deferred Inflows of Resources - 7,376,303 - 7,376,303

Net Position: Net Investment in Capital Assets (360,148) 116,067,747 - 115,707,599

Restricted - Nonexpendable - 731,365 - 731,365 Restricted - Expendable 1,770,976 29,574,340 - 31,345,316

Unrestricted 4,498,232 (7,737,798) - (3,239,566)

Total Net Position 5,909,060$ 138,635,654$ -$ 144,544,714$

Florida SouthWestern State College

Financing Corporation College Eliminations

Total Primary Government


Condensed Statement of Revenues, Expenses, and Changes in Net Position

Total PrimaryCollege Eliminations Government

Operating Revenues 2,584,599$ 22,903,019$ -$ 25,487,618$ Depreciation Expense (568,152) (5,587,387) - (6,155,539) Other Operating Expenses (840,476) (90,796,944) - (91,637,420)

Operating Income (Loss) 1,175,971 (73,481,312) - (72,305,341)

Nonoperating Revenues (Expenses):Nonoperating Revenue 648,133 68,541,691 - 69,189,824 Interest Expense (929,738) (606,165) - (1,535,903) Other Nonoperating Expense (33,786) (1,919,119) - (1,952,905)

Net Nonoperating Revenues (Expenses) (315,391) 66,016,407 - 65,701,016

Other Revenues - 11,763,870 - 11,763,870

Increase in Net Position 860,580 4,298,965 - 5,159,545

Net Position, Beginning of Year 5,048,480 152,413,153 - 157,461,633 Adjustment to Beginning Net Position (1) - (18,076,464) - (18,076,464)

Net Position, Beginning of Year, as Restated 5,048,480 134,336,689 - 139,385,169

Net Position, End of Year 5,909,060$ 138,635,654$ -$ 144,544,714$


Financing Corporation

Note: (1) As discussed in Note 3 to the financial statements.

Condensed Statement of Cash Flows

Total PrimaryGovernment

Net Cash Provided (Used) by:Operating Activities 1,882,840$ (67,950,037)$ -$ (66,067,197)$ Noncapital Financing Activities 549,380 67,644,174 - 68,193,554 Capital and Related Financing Activities (1,500,687) 2,318,410 - 817,723 Investing Activities (515,271) 510,066 - (5,205)

Net Increase in Cash and Cash Equivalents 416,262 2,522,613 - 2,938,875 Cash and Cash Equivalents, Beginning of Year 4,062,855 18,303,762 - 22,366,617

Cash and Cash Equivalents, End of Year 4,479,117$ 20,826,375$ -$ 25,305,492$

College Eliminations


Financing Corporation






Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

7/1/2009 $ - 421,101$ 421,101$ 0% 25,684,249$ 1.6%7/1/2011 - 580,062 580,062 0% 25,052,174 2.3%7/1/2013 - 1,047,396 1,047,396 0% 29,665,206 3.5%

Note: (1) The College’s OPEB actuarial valuation used the projected unit credit actuarial method to estimate the actuarial accrued liability.



2014 (1) 2013 (1)College's proportion of the FRS net pension liability 0.069878863% 0.065525694%

College's proportionate share of the FRS net pension liability 4,263,638$ 11,279,888$


College's proportionate share of the FRS net pension liability as a percentage of its covered-employee payroll 17.35% 46.45%


Notes: (1) The amounts presented for each fiscal year were determined as of June 30.

(2) Covered-employee payroll includes defined benefit plan actives and members in DROP because total employer contributions are determined on a uniform basis (blended rate) as required by Part III of Chapter 121, Florida Statutes.








(2) Covered-employee payroll includes defined benefit plan actives and members in DROP because total employer contributions are determined on a uniform basis (blended rate) as required by Part III of Chapter 121, Florida Statutes.




2014 (1) 2013 (1)College's proportion of the HIS net pension liability 0.101425459% 0.099636556%

College's proportionate share of the HIS net pension liability 9,483,528$ 8,674,672$


College's proportionate share of the HIS net pension liability as a percentage of its covered-employee payroll 27.76% 26.25%





2015 (1) 2014 (1)

Contractually required HIS contribution $ 409,093 $ 347,450

HIS contributions in relation to the contractually required HIS contribution (409,093) (347,450)







1. Schedule of Funding Progress – Other Postemployment Benefits Plan

The July 1, 2013, unfunded actuarial accrued liability of $1,047,396 was significantly higher than the

July 1, 2011, liability of $580,062 as a result of the following:

Demographic assumptions (rates of termination, retirement, disability, and mortality) were revised to be consistent with those used for the Florida Retirement System.

The assumed per capita costs of healthcare were updated.

The rates of healthcare inflation used to project the per capita healthcare costs were revised.

The rates of participation in the Plan were adjusted to reflect current experience.

The assumed conditions for retirement eligibility and rates of retirement were supplemented to accommodate those employees hired on or after July 1, 2011.











Phone: (850) 412-2722 Fax: (850) 488-6975











issued by the Comptroller General of the United States, the financial statements of the Florida

SouthWestern State College, a component unit of the State of Florida, and its discretely presented

component unit as of and for the fiscal year ended June 30, 2015, and the related notes to the financial

statements, which collectively comprise the College’s basic financial statements, and have issued our

report thereon dated March 18, 2016, included under the heading INDEPENDENT AUDITOR’S

REPORT. Our report includes a reference to other auditors who audited the financial statements of the

blended and discretely presented component units, as described in our report on the College’s financial

statements. This report does not include the results of the other auditors’ testing of internal control over

financial reporting or compliance and other matters that are reported on separately by those auditors.















with governance.


























Auditor General

Report No. 2016-112

March 2016



June 30, 2015

Financial Audit


During the 2014-15 fiscal year, Dr. John R. Holdnak served as President and the following individuals

served as Members of the Board of Trustees:

County

Donald R. Crisp, Chair from 7-23-15 Bay

Katie L. Patronis,a Vice Chair from 7-24-14 Bay

Ralph C. Roberson,a Chair to 7-22-15 Gulf

Leah O. Dunn,b Vice Chair to 7-23-14 Bay

Elizabeth M. Kirvin Franklin

James W. McKnight b Gulf

Steve D. Millaway Bay

Joe K. Tannehill, Jr. a Bay

David P. Warriner Gulf

Notes: a Board member served beyond the end of term, May 31, 2014, reappointed by Governor to serve from February 13, 2015.

b Board member served beyond the end of term, May 31, 2015.




The team leader was Melissa F. Hall, CPA, and the audit was supervised by Shelly G. Curti, CPA.









TABLE OF CONTENTS

Page No.

SUMMARY ........................................................................................................................................... i






















SUMMARY


Our audit disclosed that the basic financial statements of Gulf Coast State College (a component unit of

the State of Florida) were presented fairly, in all material respects, in accordance with prescribed financial

reporting standards.







Our audit objectives were to determine whether Gulf Coast State College and its officers with












Statewide audit of Federal awards administered by the State of Florida. The results of our operational

audit of the College are included in our report No. 2016-089.

AUDIT METHODOLOGY






Phone: (850) 412-2722 Fax: (850) 488-6975







We have audited the accompanying financial statements of Gulf Coast State College, a component unit

of the State of Florida, and its discretely presented component unit as of and for the fiscal year ended

June 30, 2015, and the related notes to the financial statements, which collectively comprise the College’s

basic financial statements as listed in the table of contents.






error.




of the transactions and account balances of the discretely presented component unit columns. Those





Government Auditing Standards issued by the Comptroller General of the United States. Those















our audit opinions.

Opinions


to above present fairly, in all material respects, the respective financial position of Gulf Coast State

College and of its discretely presented component unit as of June 30, 2015, and the respective changes

in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance

with accounting principles generally accepted in the United States of America.

Emphasis of Matter








Other Matter






















of Gulf Coast State College’s internal control over financial reporting and on our tests of its compliance

with certain provisions of laws, rules, regulations, contracts, and grant agreements and other matters

included under the heading INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER




financial reporting and compliance and results of that testing, and not to provide an opinion on the internal

control over financial reporting or on compliance. That report is an integral part of an audit performed in

accordance with Government Auditing Standards in considering Gulf Coast State College’s internal

control over financial reporting and compliance.








the responsibility of College management. The MD&A contains financial activity of the College and its

component unit the Gulf Coast State College Foundation, Inc., for the fiscal years ended June 30, 2015,

and June 30, 2014.



8.2 percent, increase as compared to the 2013-14 fiscal year, resulting primarily from the increase of

$7.9 million in cash and cash equivalents, an increase of $4.7 million in amounts due from other

governmental agencies, and a decrease of $3.4 million in capital assets. The increase in cash and cash

equivalents was primarily from $8.4 million in cash proceeds from the sale of capital assets. Liabilities

increased by $7.9 million, or 68.7 percent, totaling $19.3 million at June 30, 2015, compared to

$11.4 million at June 30, 2014, resulting primarily from the addition of pension liabilities due to the

adoption of Governmental Accounting Standards Board (GASB) Statement No. 68. In addition, deferred

outflows and deferred inflows of resources increased $2.5 million and $4.6 million, respectively, as a

result of adopting GASB Statement No. 68. As a result, the College’s net position decreased by

$268 thousand, resulting in a fiscal year-end balance of $105.9 million.

The College’s operating revenues totaled $11.5 million for the 2014-15 and 2013-14 fiscal years.

Operating expenses totaled $48.8 million for the 2014-15 fiscal year, representing a decrease of

$83 thousand or 0.2 percent as compared to the 2013-14 fiscal year.






(In Thousands)







position; and the statement of cash flows. These financial statements, and notes thereto, provide



$0

$50,000

$100,000

Net Investmentin Capital Assets


$87,135

$18,429

$361

$90,419

$8,679 $7,095

2015 2014



70%

Other Revenues11%


Gulf Coast State College (Primary Institution) – Most of the programs and services generally associated with a college fall into this category, including instruction, public service, and support services.

Gulf Coast State College Foundation, Inc. (Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida.









resources, and net position of the College and its component unit as of June 30, 2015, and June 30, 2014,

is shown in the following table:

Condensed Statement of Net Position at (In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14

AssetsCurrent Assets 18,342$ 11,716$ 30,480$ 30,158$ Capital Assets, Net 92,749 96,169 - 1 Other Noncurrent Assets 16,207 9,747 48 47

Total Assets 127,298 117,632 30,528 30,206


LiabilitiesCurrent Liabilities 1,968 1,520 22 74 Noncurrent Liabilities 17,326 9,919 - -

Total Liabilities 19,294 11,439 22 74


Net PositionNet Investment in Capital Assets 87,135 90,419 - - Restricted 18,429 8,679 30,506 30,132 Unrestricted 361 7,095 - -



Total assets plus deferred outflows of resources increased by $12.2 million and total net position

decreased by $268 thousand in the 2014-15 fiscal year. The increase in total assets plus deferred

outflows of resources was primarily the result of the increase of $7.9 million in cash and cash equivalents,


an increase of $4.7 million in amounts due from other governmental agencies, a decrease of $3.4 million

in capital assets, and for the first time reporting deferred outflows of resources of $2.5 million. Total

liabilities plus deferred inflows of resources increased by $12.4 million that was primarily caused as the

net pension liability and deferred inflows of resources totaling $12.7 million was recorded for the first time

in accordance with GASB Statement No. 68. Further information on the implementation of this reporting

change can be found in Note 2 of the notes to financial statements. The net effect of the increase in

assets plus deferred outflows of resources coupled with the increase in liabilities plus deferred inflows of

resources resulted in a decrease of $268 thousand in total net position.





The following summarizes the activities of the College and its component unit for the 2014-15 and

2013-14 fiscal years:


(In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14

Operating Revenues 11,463$ 11,469$ 825$ 914$ Less, Operating Expenses 48,786 48,869 1,582 1,730

Operating Loss (37,323) (37,400) (757) (816) Net Nonoperating Revenues 41,356 33,572 1,131 4,315

Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 4,033 (3,828) 374 3,499 Other Revenues, Expenses, Gains, or Losses 6,383 1,806 - -

Net Increase (Decrease) In Net Position 10,416 (2,022) 374 3,499

Net Position, Beginning of Year 106,193 108,215 30,132 26,633 Adjustment to Beginning Net Position (1) (10,684) - - -




Note: (1) The adjustment to beginning net position of the College was due to the implementation of GASB Statement No. 68, which is a change in accounting principle that requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers' proportionate share of the net pension liability of the defined benefit pension plans.

Operating Revenues





The following summarizes the operating revenues by source for the College and its component unit that

were used to fund operating activities for the 2014-15 and 2013-14 fiscal years:


(In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14

Student Tuition and Fees, Net 4,749$ 4,904$ -$ -$ Grants and Contracts 4,169 3,734 - - Sales and Services of Educational Departments 832 755 - - Auxiliary Enterprises, Net 1,475 1,483 - - Other 238 593 825 914

Total Operating Revenues 11,463$ 11,469$ 825$ 914$




(In Thousands)

The change in College operating revenue for the 2014-15 fiscal as compared to the 2013-14 fiscal year

is due primarily to an increase in Grants and Contracts from state, local, and nongovernmental contracts

of $1 million, partially offset by a decrease in Federal grants in the amount of $598 thousand. The majority

of the variance in state, local, and nongovernmental contracts is due to a change in accounting treatment

from netting Foundation scholarship expenses against scholarship revenue in 2013-14 in the amount of

$660 thousand to reporting 2014-15 revenues and expenses separately.

$0 $3,000 $6,000

Other

Auxiliary Enterprises, Net

Sales and Services of Educational Departments



$593

$1,483

$755

$3,734

$4,904

$238

$1,475

$832

$4,169

$4,749

2014‐15 2013‐14


Operating Expenses







unit for the 2014-15 and 2013-14 fiscal years:


(In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14

Personnel Services 25,250$ 25,104$ -$ -$ Scholarships and Waivers 5,189 4,654 861 805 Utilities and Communications 1,985 1,839 - - Contractual Services 3,518 3,691 - - Other Services and Expenses 2,356 2,393 721 925 Materials and Supplies 6,109 6,926 - - Depreciation 4,379 4,262 - -






(In Thousands)

The change in College operating expenses for the 2014-15 fiscal year as compared to the 2013-14 fiscal

year is due primarily to a decrease in Materials and Supplies of $817 thousand as the College did not

have to purchase items for a new facility as it did with the Advanced Technology Center in the

2013-14 fiscal year, partially offset by an increase in Scholarships and Waivers of $535 thousand as a

result of increased financial aid assistance to students.



noncapital appropriations, Federal and State student financial aid, investment income, and gain on

disposal of capital assets, are defined by GASB as nonoperating. Nonoperating expenses include capital




(In Thousands)

2014-15 2013-14

State Noncapital Appropriations 21,631$ 21,774$ Federal and State Student Financial Aid 11,390 11,976 Investment Income 134 72 Net Gain (Loss) on Disposal of Capital Assets 8,450 (90) Interest on Capital Asset-Related Debt (249) (160)


$0 $15,000 $30,000

Depreciation


Other Services andExpenses




Personnel Services

$4,262

$6,926

$2,393

$3,691

$1,839

$4,654

$25,104

$4,379

$6,109

$2,356

$3,518

$1,985

$5,189

$25,250

2014‐15 2013‐14


When compared to the prior fiscal year, College net nonoperating revenue increased by $7.8 million, or

23.2 percent. This increase is primarily the result of the net gain on the sale of capital assets of

$8.5 million, partially offset by a decrease in Federal and State student financial aid of $586 thousand.

Other Revenues, Expenses, Gains, or Losses


fees. The following summarizes the College’s other revenues, expenses, gains, or losses for the

2014-15 and 2013-14 fiscal years:

Other Revenues, Expenses, Gains, or Losses: College

(In Thousands)

2014-15 2013-14

State Capital Appropriations 5,183$ 534$ Capital Grants, Contracts, Gifts, and Fees 1,200 1,272

Total 6,383$ 1,806$

The College’s other revenues increased as a result of an increase in State capital appropriations for the

construction of a new Science, Technology, Engineering, and Math (STEM) Education Center.












(In Thousands)

2014-15 2013-14

Cash Provided (Used) by:Operating Activities (33,120)$ (32,329)$ Noncapital Financing Activities 33,021 34,496 Capital and Related Financing Activities 7,822 1,134 Investing Activities 138 87




Major sources of cash inflows came from State noncapital appropriations ($21.6 million), Federal and

State student financial aid ($11.4 million), proceeds from the sale of capital assets ($8.4 million), Federal

Direct Student Loan program receipts ($4.8 million), net student tuition and fees ($4.4 million), and grants

and contracts ($4.3 million). Major cash outflows were for payments to employees and for employee

benefits ($25.1 million), payments to suppliers ($12 million), payments for scholarships ($5.2 million), and

disbursements to students for Federal Direct Student Loans ($4.8 million).

The increase in cash and cash equivalents was primarily the result of the sale of capital assets for road

construction adjacent to the College.


Capital Assets






(In Thousands)


Land 3,809$ 3,809$ Construction in Progress 181 90 Buildings 85,262 88,448 Other Structures and Improvements 1,462 1,824 Furniture, Machinery, and Equipment 2,035 1,998



statements.


Major capital expenses through June 30, 2015, were incurred on the STEM Education Center project.

The College’s major construction commitments at June 30, 2015, are as follows:

Amount

Total Committed 1,202$ Completed to Date (180)


(In Thousands)


statements.


Debt Administration

As of June 30, 2015, the College had $7.4 million in outstanding bonds and note payable representing a

decrease of $648 thousand, or 8.1 percent, from the prior fiscal year. The following table summarizes

the outstanding long-term debt by type for the fiscal years ended June 30, 2015, and June 30, 2014:


(In Thousands)

2015 2014

SBE Capital Outlay Bonds 239$ 375$ Florida Department of Education: Capital Improvement Revenue Bonds 5,125 5,375 Note Payable 2,022 2,284

Total 7,386$ 8,034$

During the 2014-15 fiscal year, the State Board of Education (SBE) issued $129.9 million in SBE Capital

Outlay Refunding Bonds, Series 2014B. Proceeds from the College’s portion of the bonds,

$239 thousand, was used to refund $250 thousand of outstanding Capital Outlay Bonds, Series 2005A.

Debt repayments during the 2014-15 fiscal year totaled $887 thousand. Additional information about the

College’s long-term debt is presented in the notes to financial statements.


The College’s economic condition is closely tied to that of the State of Florida. The College’s current

financial and capital plans indicate that the financial resources from State funding will allow it to continue

at the present level of service without a tuition increase for the 2015-16 fiscal year.




addressed to the Vice President for Administration and Finance, Gulf Coast State College, 5230 West

Highway 98, Panama City, Florida 32401.



Gulf Coast State College A Component Unit of the State of Florida



College Unit


Cash and Cash Equivalents 8,483,207$ 186,084$ Restricted Cash and Cash Equivalents 1,132,568 - Restricted Investments - 30,266,111 Accounts Receivable, Net 1,499,563 - Notes Receivable, Net 62,229 - Due from Other Governmental Agencies 5,323,793 - Inventories 1,369,928 - Prepaid Expenses 339,729 - Other Assets 131,304 28,649


Noncurrent Assets:Restricted Cash and Cash Equivalents 15,734,110 - Restricted Investments 472,935 47,687 Depreciable Capital Assets, Net 88,759,825 6 Nondepreciable Capital Assets 3,989,465 -

Total Noncurrent Assets 108,956,335 47,693

TOTAL ASSETS 127,298,656 30,528,537



Accounts Payable 426,329 22,074 Salary and Payroll Taxes Payable 578,216 - Retainage Payable 25,429 - Long-Term Liabilities - Current Portion:

Bonds Payable 435,000 - Note Payable 264,723 - Compensated Absences Payable 56,533 - Net Pension Liability 182,130 -

Total Current Liabilities 1,968,360 22,074





College Unit


Bonds Payable 4,929,000 - Note Payable 1,756,787 - Compensated Absences Payable 2,433,732 - Other Postemployment Benefits Payable 307,755 - Net Pension Liability 7,898,729 -


TOTAL LIABILITIES 19,294,363 22,074



Nonexpendable:Endowment - 12,692,578

Expendable:Grants and Loans 1,030,097 - Scholarships and Other Educational Purposes 28,015 17,813,885 Capital Projects 17,363,001 - Debt Service 7,076 -

Unrestricted 361,199 -







College Unit


Student Tuition and Fees, Net of Scholarship Allowances of $6,277,641 4,749,343$ -$ Federal Grants and Contracts 2,198,562 - State and Local Grants and Contracts 729,696 - Nongovernmental Grants and Contracts 1,241,179 - Sales and Services of Educational Departments 831,557 - Auxiliary Enterprises, Net of Scholarship Allowances of $1,261,200 1,474,567 - Other Operating Revenues 237,949 824,764

Total Operating Revenues 11,462,853 824,764


Personnel Services 25,249,623 - Scholarships and Waivers 5,189,336 861,192 Utilities and Communications 1,985,038 - Contractual Services 3,518,014 - Other Services and Expenses 2,355,809 720,714 Materials and Supplies 6,108,881 - Depreciation 4,378,855 -


Operating Loss (37,322,703) (757,142)

NONOPERATING REVENUES (EXPENSES)State Noncapital Appropriations 21,630,792 - Federal and State Student Financial Aid 11,390,525 - Investment Income 133,879 1,131,195 Gain on Disposal of Capital Assets 8,449,514 - Interest on Capital Asset-Related Debt (249,128) -


Income Before Other Revenues, Expenses, Gains, or Losses 4,032,879 374,053

State Capital Appropriations 5,183,140 - Capital Grants, Contracts, Gifts, and Fees 1,200,230 -

Total Other Revenues, Expenses, Gains, or Losses 6,383,370 -

Increase in Net Position 10,416,249 374,053









CASH FLOWS FROM OPERATING ACTIVITIESStudent Tuition and Fees, Net 4,434,257$ Grants and Contracts 4,344,461 Payments to Suppliers (12,002,449) Payments for Utilities and Communications (1,985,038) Payments to Employees (20,457,965) Payments for Employee Benefits (4,635,825) Payments for Scholarships (5,189,336) Loans Issued to Students (170,820) Collection on Loans to Students 167,478 Auxiliary Enterprises, Net 1,474,567 Sales and Service of Educational Departments 831,557 Other Receipts 69,197


CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESState Noncapital Appropriations 21,630,792 Federal and State Student Financial Aid 11,390,525 Federal Direct Loan Program Receipts 4,829,520 Federal Direct Loan Program Disbursements (4,829,520)


CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESState Capital Appropriations 230,381 Capital Grants and Gifts 1,200,230 Proceeds from Sale of Capital Assets 8,449,514 Purchases of Capital Assets (1,160,394) Principal Paid on Capital Debt (648,104) Interest Paid on Capital Debt (249,128)

Net Cash Provided by Capital and Related Financing Activities 7,822,499

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from Sales and Maturities of Investments 3,926 Investment Income 133,879

Net Cash Provided by Investing Activities 137,805









Accounts Receivable, Net (334,565) Due from Other Governmental Agencies 207,406 Inventories (144,550) Prepaid Expenses and Other Assets (344) Note Receivable, Net (3,342) Accounts Payable 112,246 Salary and Payroll Taxes Payable 479,975 Deposits Held for Others (168,752) Compensated Absences Payable 122,342 Other Postemployment Benefits Payable 77,375 Net Pension Liability (3,755,579) Deferred Outflows of Resources Related to Pensions (1,362,495) Deferred Inflows of Resources Related to Pensions 4,594,215


SUPPLEMENTAL DISCLOSURE OF NONCASH CAPITAL FINANCING ACTIVITIES

11,000$

The State Board of Education (SBE) issued $239,000 in SBE Capital Outlay Bonds,Series 2014B, to refund $250,000 in SBE Capital Outlay Bonds, Series 2005A. Thenew debt and defeasance of the old debt were recorded as an increase and adecrease, respectively, to bonds payable on the statement of net position; however,because the proceeds of the new debt were immediately placed into an irrevocabletrust for the defeasance of the old debt, the transaction did not affect cash and cashequivalents.





Reporting Entity. The governing body of Gulf Coast State College, a component unit of the State of

Florida, is the College Board of Trustees. The Board of Trustees constitutes a corporation and is

composed of nine members appointed by the Governor and confirmed by the Senate. The Board of





College correspond with those of Bay, Franklin, and Gulf Counties.










component units, the Gulf Coast State College Foundation, Inc. (Foundation), a legally separate entity,

is included within the College’s reporting entity as a discretely presented component unit and is governed

by a separate board.





administers property, and makes expenditures to or for the benefit of the College.


Foundation’s audited financial statements are available to the public at the College’s administrative

offices. The financial data reported on the accompanying financial statements was derived from the

Foundation’s audited financial statements for the fiscal year ended June 30, 2015.






























and follows FASB standards of accounting and financial reporting for not-for-profit organizations.






include State noncapital appropriations, Federal and State student financial aid, investment income (net

of unrealized gains or losses on investments), and revenues for capital construction projects. Interest on

capital asset-related debt is a nonoperating expense.








the student or the third party making payment on behalf of the student. To the extent that these resources

are used to pay student charges, the College records a scholarship allowance against tuition and fee

revenue and auxiliary enterprise revenue.






hand, cash in demand accounts, and cash invested with the State Board of Administration (SBA) in

Florida PRIME and the State Treasury Special Purpose Investment Account (SPIA) investment pools.

For reporting cash flows, the College considers all highly liquid investments with original maturities of 3

months or less to be cash equivalents. Under this definition, the College considers amounts invested in

the State Treasury SPIA and SBA Florida PRIME investment pools to be cash equivalents. College cash

deposits are held in banks qualified as public depositories under Florida law. All such deposits are





At June 30, 2015, the College reported as cash equivalents at fair value $4,156,049 in the State Treasury


SPIA carried a credit rating of A+f by Standard & Poor’s, had an effective duration of 2.67 years and fair

value factor of 1.0013 at June 30, 2015. The College relies on policies developed by the State Treasury

for managing interest rate risk or credit risk for this investment pool. Disclosures for the State Treasury

SPIA investment pool are included in the notes to financial statements of the State’s Comprehensive


At June 30, 2015, the College reported as cash equivalents $2,412,770 in the Florida PRIME investment










Capital Assets. College capital assets consist of land; construction in progress; buildings; other

structures and improvements; and furniture, machinery, and equipment. These assets are capitalized

and recorded at cost at the date of acquisition or at estimated fair value at the date received in the case

of gifts and purchases of State surplus property. Additions, improvements, and other outlays that

significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and











Noncurrent Liabilities. Noncurrent liabilities include bonds payable, note payable, compensated

absences payable, other postemployment benefits payable, and net pension liability that are not

scheduled to be paid within the next fiscal year.








2. Reporting Change













plans.

4. Deficit Net Position In Individual Funds


funds - unrestricted net position as shown below. This deficit can be attributed to the full recognition of




Fund Net Position

Current Funds - Unrestricted (4,434,696)$ Auxiliary Funds 4,795,895

Total 361,199$

5. Investments




PRIME investment pool administered by the State Board of Administration (SBA); interest-bearing time

deposits and savings accounts in qualified public depositories, as defined by Section 280.02, Florida

Statutes; direct obligations of the United States Treasury; obligations of Federal agencies and

instrumentalities; securities of, or interests in, certain open-end or closed-end management type

investment companies; Securities and Exchange Commission registered money market funds with the

highest credit quality rating from a nationally recognized rating agency; and other investments approved

by the College’s Board of Trustees as authorized by law.





These investments are used to make debt service payments on bonds issued by the State Board of

Education for the benefit of the College. The College’s investments consist of United States Treasury

securities, with maturity dates of 6 months or less, and are reported at fair value. The College relies on

policies developed by the SBA for managing interest rate risk and credit risk for this account. Disclosures

for the Debt Service Accounts are included in the notes to financial statements of the State’s



The College’s component unit’s investments at June 30, 2015, are reported at fair value, as follows:

Common Fund 30,266,111$ Investment in Real Property 47,687








7. Notes Receivable

Notes receivable represent student loans made under the College’s short-term loan program and are

reported net of a $29,781 allowance for doubtful notes.


Due from other governmental agencies primarily consists of $4,884,793 of Public Education Capital

Outlay allocations due from the State for construction of College facilities.

9. Inventories

Inventories consist of items for resale by the campus bookstore, and are valued using the last invoice

cost, which approximates the first-in, first-out, method of inventory valuation. Consumable laboratory

supplies, teaching materials, and office supplies on hand in College departments are expensed when

purchased, and are not considered material. Accordingly, these items are not included in the reported

inventory.

10. Capital Assets


Beginning Adjustments EndingDescription Balance (1) Additions Reductions Balance

Nondepreciable Capital Assets:Land 3,808,643$ -$ -$ -$ 3,808,643$ Construction in Progress 90,615 - 90,207 - 180,822

Total Nondepreciable Capital Assets 3,899,258$ -$ 90,207$ -$ 3,989,465$

Depreciable Capital Assets:Buildings 120,683,949$ (310,751)$ 97,164$ -$ 120,470,362$ Other Structures and Improvements 6,585,043 - - - 6,585,043 Furniture, Machinery, and Equipment 10,311,995 - 890,787 159,962 11,042,820

Total Depreciable Capital Assets 137,580,987 (310,751) 987,951 159,962 138,098,225

Less, Accumulated Depreciation:Buildings 32,236,044 - 2,972,371 - 35,208,415 Other Structures and Improvements 4,761,555 - 361,202 - 5,122,757 Furniture, Machinery, and Equipment 8,313,620 (191,712) 1,045,282 159,962 9,007,228

Total Accumulated Depreciation 45,311,219 (191,712) 4,378,855 159,962 49,338,400

Total Depreciable Capital Assets, Net 92,269,768$ (119,039)$ (3,390,904)$ -$ 88,759,825$

Note: (1) Capital assets and accumulated depreciation include adjustments totaling $310,751 and $191,712, respectively, to correct errors in the capital assets and depreciation schedules, respectively, for certain assets.

For capital assets partially financed with United States Department of Commerce National

Telecommunications and Information Administration (NTIA)/Public Telecommunications Facilities

Program (PTFP) grants, the Federal Government requires a ten-year lien establishing it as the priority

secured creditor. This is to enforce its reversionary interest in the fixed asset for a ten-year period (dating

from the PTFP’s approval of the final inventory for the grant) in case the College defaults on the terms

and conditions of the grant. The capital assets against which the Federal Government has a lien are:


Capital Assets DOC Grant No. Original Cost Lien Through

Tower 12-01-N06013 438,387$ 2019




Bonds Payable 5,750,000$ 239,000$ 625,000$ 5,364,000$ 435,000$ Note Payable 2,283,614 - 262,104 2,021,510 264,723 Compensated Absences Payable 2,367,923 412,369 290,027 2,490,265 56,533 Other Postemployment Benefits Payable 230,380 120,132 42,757 307,755 - Net Pension Liability (1) 11,836,438 1,990,741 5,746,320 8,080,859 182,130

Total Long-Term Liabilities 22,468,355$ 2,762,242$ 6,966,208$ 18,264,389$ 938,386$





Capital Improvement Revenue Bonds, Series 2010A. These bonds are authorized by Article VII, Section 11(d) of the Florida Constitution; Sections 215.57 through 215.83 and Section 1009.23, Florida Statutes; and other applicable provisions of law. Principal and interest on these bonds are secured by and payable solely from a first lien pledge of the capital improvement fees collected pursuant to Section 1009.23(11), Florida Statutes, by the Series 2010A participating colleges on a parity with any additional bonds issued subsequent to the issuance of the Series 2010A bonds. The Series 2010A bonds constitute the third series of bonds to be issued pursuant to a Master Authorizing Resolution. Upon the issuance of additional bonds, all bonds will share a parity first lien on the pledged revenues of all colleges participating in any series of bonds then outstanding. The Series 2010A bonds will share the lien of such additional bonds on the Series 2010A pledged revenues and on the revenues pledged by the colleges participating in such additional bonds. The bonds were issued for new construction and equipment, and renovation and remodeling of educational facilities.



SBE Capital Outlay Bonds:Series 2014B, Refunding 239,000$ 5 2017


Series 2010A 5,125,000 3.00 - 4.375 2030

Total 5,364,000$


During the 2014-15 fiscal year, the SBE issued $239,000 in Capital Outlay Refunding Bonds,

Series 2014B, on behalf of the College which refunded $250,000 of outstanding Capital Outlay Bonds,

Series 2005A.



2016 435,000$ 219,563$ 654,563$ 2017 329,000 202,050 531,050 2018 275,000 188,250 463,250 2019 285,000 177,250 462,250 2020 300,000 165,850 465,850 2021-2025 1,685,000 639,850 2,324,850 2026-2030 2,055,000 269,656 2,324,656

Total 5,364,000$ 1,862,469$ 7,226,469$


Note Payable. On April 27, 2012, the College signed a promissory note for a line of credit up to

$2,700,000, at a stated interest rate of 1 percent, to finance the Energy Efficiency Project (Project). The

College made draws as needed to make payments to the contractors for the Project. The College

completed the Project and started making principal payments in May 2013. As of June 30, 2015, the

College has drawn $2,586,054. The note matures on April 27, 2023, and principal and interest payments

are made monthly. Annual requirements to amortize the outstanding note as of June 30, 2015, are as

follows:


2016 264,722$ 19,322$ 284,044$ 2017 267,470 16,574 284,044 2018 270,195 13,850 284,045 2019 272,947 11,097 284,044 2020 275,706 8,338 284,044 2021-2023 670,470 8,448 678,918

Total 2,021,510$ 77,629$ 2,099,139$











an estimate of terminal leave payments for employees anticipating retirement during the next fiscal year.



postemployment benefits administered by the Florida College System Risk Management Consortium

(Consortium).

Plan Description. The College contributes to an agent, multiple-employer, defined benefit plan (Plan)









coverage as soon as they are eligible. Neither the College nor the Consortium issue a stand-alone report

for the Plan and the Plan is not included in the annual report of a public employee retirement system or

another entity.





the 2014-15 fiscal year, 47 retirees received postemployment healthcare benefits, and 7 retirees received

postemployment life insurance benefits. The College provided required contributions of $42,757 toward

the annual OPEB cost, composed of benefit payments made on behalf of retirees for claims expenses

(net of reinsurance), administrative expenses, and reinsurance premiums. Retiree contributions totaled

$348,348, which represents 2 percent of covered payroll.







obligation:


Description Amount







net OPEB obligation as of June 30, 2015, and for the two preceding fiscal years were as follows:

Percentage ofAnnual


2012-13 90,163$ 34.1% 159,965$ 2013-14 114,133 38.3% 230,380 2014-15 120,132 35.6% 307,755






















the calculations.








after 3 years pre-Medicare and 2 years Medicare. The unfunded actuarial accrued liability is being

amortized as a level percentage of projected payroll amortized over 30 years on an open basis. The

























The College’s FRS and HIS pension expense totaled $739,131 for the 2014-15 fiscal year.


FRS Pension Plan










for normal retirement benefits at age 65 or any time after 33 years of creditable service. Employees

enrolled in the Plan may include up to 4 years of credit for military service toward creditable service. The

Plan also includes an early retirement provision; however, there is a benefit reduction for each year a

member retires before his or her normal retirement date. The Plan provides retirement, disability, death

benefits, and annual cost-of-living adjustments to eligible participants.







pension benefits.










earned:
















FRS, Regular 3.00 7.37FRS, Senior Management Service 3.00 21.14Deferred Retirement Option Program - Applicable to Members from All of the Above Classes 0.00 12.28FRS, Reemployed Retiree (2) (2)



The College’s contributions to the Plan totaled $1,046,147 for the fiscal year ended June 30, 2015.








.043522957 percent, which was an increase of .003856218 from its proportionate share measured as of

June 30, 2013.






Differences between expected and actual experience -$ 164,333$ Change of assumptions 459,895 - Net difference between projected and actual earnings on FRS pension plan investments - 4,429,882 Changes in proportion and differences between College FRS contributions and proportionate share of contributions 558,457 - College FRS contributions subsequent to the measurement date 1,046,147 -

Total 2,064,499$ 4,594,215$






2016 (946,335)$ 2017 (946,335) 2018 (946,335) 2019 (946,335) 2020 161,136 Thereafter 48,341

Total (3,575,863)$



Inflation 2.60 percentSalary increases 3.25 percent, average, including inflationInvestment rate of return 7.65 percent, net of pension plan investment















Total 100.00%


Note: (1) As outlined in the Plan’s investment policy.











(6.65%) (7.65%) (8.65%)


Pension Plan Fiduciary Net Position. Detailed information about the Plan’s fiduciary net position is




outstanding amount of contributions to the Plan required for the fiscal year ended June 30, 2015.


HIS Pension Plan











include Medicare.











Resources Related to Pensions. At June 30, 2015, the College reported a net pension liability of

$5,425,319 for its proportionate share of the net pension liability. The current portion of the net pension

liability is the College’s proportionate share of benefit payments expected to be paid within one year, net

of the College’s proportionate share of the pension plan’s fiduciary net position available to pay that

amount. The net pension liability was measured as of June 30, 2014, and the total pension liability used

to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2014. The

College’s proportionate share of the net pension liability was based on the College’s 2013-14 fiscal year

contributions relative to the total 2013-14 fiscal year contributions of all participating members.

At June 30, 2014, the College’s proportionate share was .058023289 percent, which was an increase of

.000501516 from its proportionate share measured as of June 30, 2013.



sources:




Total 450,101$






2016 37,853$ 2017 37,853 2018 37,853 2019 37,853 2020 37,202 Thereafter 44,643

Total 233,257$





While an experience study had not been completed for the HIS Plan, the Florida Retirement System

Actuarial Assumptions Conference reviewed the actuarial assumptions for the HIS Plan.






selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index

was adopted as the applicable municipal bond index.








(3.29%) (4.29%) (5.29%)


Pension Plan Fiduciary Net Position. Detailed information about the HIS Plan’s fiduciary net position is


Comprehensive Annual Financial Report

Payables to the Pension Plan. At June 30, 2015, the College reported a payable of $665 for the













same employer and employee contribution rates, that are based on salary and membership class



account balances among various approved investment choices. Costs of administering the Plan,

including the FRS Financial Guidance Program, are funded through an employer contribution of

0.04 percent of payroll and by forfeited benefits of Plan members. Allocations to the Investment Plan


Percent ofGross





















June 30, 2015.










unfunded actuarial liability of the FRS Pension Plan, and 0.01 percent to cover the administrative costs,



by the College to the participant’s annuity account. The contributions are invested in the company or








STEM Education Center:Architect 1,202,756$ 180,413$ 1,022,343$














commercial coverage in any of the past 3 fiscal years.

16. Functional Distribution Of Operating Expenses


















Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

7/1/2009 -$ 559,668$ 559,668$ 0% 15,891,559$ 3.5%7/1/2011 - 682,654 682,654 0% 15,678,182 4.4%7/1/2013 - 1,231,786 1,231,786 0% 16,611,985 7.4%

Note: (1) The OPEB actuarial valuation used the projected unit credit method to estimate the actuarial accrued liability.












2015 (1) 2014 (1)Contractually required FRS contribution $ 1,046,147 $ 953,337

FRS contributions in relation to the contractually required contribution (1,046,147) (953,337)

















2015 (1) 2014 (1)









1. Schedule Of Funding Progress – Other Postemployment Benefit Plan

The July 1, 2013, unfunded actuarial accrued liability of $1,231,786 increased by 80.4 percent from the

July 1, 2011, liability of $682,654 primarily due to:

Demographic assumptions (rate of termination, mortality, disability, and retirement) were revised to be consistent with those used for the Florida Retirement System.




The conditions of retirement eligibility and rates of retirement were supplemented to accommodate those active employees hired on or after July 1, 2011.






3. Schedule of Net Pension Liability And Schedule Of Contributions – Health Insurance Subsidy Pension Plan

Changes of Assumptions. The municipal rate used to determine the total pension liability decreased from



Phone: (850) 412-2722 Fax: (850) 488-6975











issued by the Comptroller General of the United States, the financial statements of Gulf Coast State

College, a component unit of the State of Florida, and its discretely presented component unit as of and

for the fiscal year ended June 30, 2015, and the related notes to the financial statements, which

collectively comprise the College’s basic financial statements, and have issued our report thereon dated

March 7, 2016, included under the heading INDEPENDENT AUDITOR’S REPORT. Our report includes

a reference to other auditors who audited the financial statements of the discretely presented component

unit, as described in our report on the College’s financial statements. This report does not include the

results of the other auditors’ testing of internal control over financial reporting or compliance and other

matters that are reported on separately by those auditors.















with governance.














We noted certain matters that we reported to College management in our operational audit report

No. 2016-089.













Auditor General

Report No. 2016-165

March 2016



June 30, 2015

Financial Audit


During the 2014-15 fiscal year, Dr. Dennis P. Gallon served as President and the following individuals


John W. Dowd III, Chair from 8-12-14, Vice Chair to 8-11-14 Wendy S. Link, Vice Chair from 8-12-14 Carolyn L. Williams, Chair to 8-11-14 William Berger Charles K. Cross Jr.




The team leader was Daria L. Potapova, CPA, and the audit was supervised by Diana G. Garza, CPA.









TABLE OF CONTENTS

Page No.

SUMMARY ........................................................................................................................................... i






















SUMMARY


Our audit disclosed that the basic financial statements of Palm Beach State College (a component unit

of the State of Florida) were presented fairly, in all material respects, in accordance with prescribed

financial reporting standards.







Our audit objectives were to determine whether Palm Beach State College and its officers with


Presented the College’s basic financial statements in accordance with generally acceptedaccounting principles;

Established and implemented internal control over financial reporting and compliance withrequirements that could have a direct and material effect on the financial statements; and

Complied with the various provisions of laws, rules, regulations, contracts, and grant agreementsthat are material to the financial statements.









AUDIT METHODOLOGY






Phone: (850) 412-2722 Fax: (850) 488-6975







We have audited the accompanying financial statements of Palm Beach State College, a component unit

of the State of Florida, and its discretely presented component unit as of and for the fiscal year ended

June 30, 2015, and the related notes to the financial statements, which collectively comprise the College’s

basic financial statements as listed in the table of contents.






error.
























our audit opinions.

Opinions


to above present fairly, in all material respects, the respective financial position of Palm Beach State

College and of its discretely presented component unit as of June 30, 2015, and the respective changes

in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance

with accounting principles generally accepted in the United States of America.

Emphasis of Matter








Other Matter






















of Palm Beach State College’s internal control over financial reporting and on our tests of its compliance

with certain provisions of laws, rules, regulations, contracts, and grant agreements and other matters

included under the heading INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER






performed in accordance with Government Auditing Standards in considering Palm Beach State

College’s internal control over financial reporting and compliance.









fiscal years ended June 30, 2015, and June 30, 2014, and its component unit, The Palm Beach State

College Foundation, Inc. for the fiscal years ended December 31, 2013, and December 31, 2014.



1.1 percent, increase as compared to the 2013-14 fiscal year. While assets increased slightly, total

liabilities increased by $23 million, or 56.4 percent, totaling $63.7 million at June 30, 2015, compared to

$40.7 million at June 30, 2014, resulting mainly from the addition of pension liabilities due to the adoption

of Governmental Accounting Standards Board (GASB) Statement No. 68. In addition, deferred outflows

and deferred inflows of resources increased $8.7 million and $14.9 million, respectively, as a result of

adopting GASB Statement No. 68. The initial adoption of GASB Statement No. 68 also resulted in an

adjustment to beginning net position of $33.8 million. As a result, the College’s net position decreased

by $25.8 million, resulting in a year-end balance of $233.2 million.


2.8 percent increase compared to the 2013-14 fiscal year due mainly to an increase in net tuition and

fees. Operating expenses totaled $167.1 million for the 2014-15 fiscal year, representing an increase of

2.3 percent as compared to the 2013-14 fiscal year due mainly to an increase in personnel services and

scholarships and waivers expenses.






(In Thousands)








‐$20,000

$30,000

$80,000

$130,000

$180,000

$230,000



$210,847

$40,100

‐$17,773

$209,781

$37,726

$11,455

2015 2014

Operating Revenues

33%


60%

Other Revenues

7%




Palm Beach State College (Primary Institution) – Most of the programs and services generally associated with a college fall into this category, including instruction, public service, and support services.

The Palm Beach State College Foundation, Inc. (Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida.









resources, and net position of the College and its component unit for the respective fiscal years ended is

shown in the following table:


(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

AssetsCurrent Assets 39,159$ 30,209$ 14,430$ 13,900$ Capital Assets, Net 232,104 234,862 - 11 Other Noncurrent Assets 31,792 34,604 18,199 17,923

Total Assets 303,055 299,675 32,629 31,834





Net PositionNet Investment in Capital Assets 210,847 209,781 - 11 Restricted 40,100 37,726 30,433 30,277 Unrestricted (17,773) 11,455 1,912 1,382




The significant increases in the College’s deferred outflows and inflows of resources and noncurrent

liabilities and the significant decrease in the College’s unrestricted net position resulted mainly from the

implementation of GASB Statement No. 68. Further information on the implementation of this reporting

change can be found in Note 2 of the notes to financial statements.





The following summarizes the activities of the College and its component unit for the respective fiscal

years ended:


(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13


Operating Loss (109,562) (107,396) (1,290) (815) Net Nonoperating Revenues 105,116 103,293 1,965 4,325

Income (Loss) Before Other Revenues (4,446) (4,103) 675 3,510 Other Revenues 12,486 7,787 - 406

Net Increase In Net Position 8,040 3,684 675 3,916

Net Position, Beginning of Year 258,962 255,278 31,670 27,754 Adjustment to Beginning Net Position (1) (33,828) - - -





Operating Revenues




The following summarizes the operating revenues for the College and its component unit by source that




(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

Student Tuition and Fees, Net 41,524$ 39,544$ -$ -$ Grants and Contracts 12,191 12,359 1,214 1,579 Sales and Services of Educational Departments 581 644 - - Auxiliary Enterprises 1,262 1,210 - - Other 1,965 2,218 783 737





(In Thousands)

The most significant change in the College’s operating revenues was a $2 million increase in net student

tuition and fees, particularly related to nonresident tuition.

Operating Expenses







unit for the respective fiscal years ended:

$0 $25,000 $50,000

Other


Sales and Services ofEducational Departments



$2,218

$1,210

$644

$12,359

$39,544

$1,965

$1,262

$581

$12,191

$41,524

2014‐15 2013‐14



(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

Personnel Services 96,363$ 94,337$ -$ -$ Scholarships and Waivers 28,896 26,850 1,448 1,405 Utilities and Communications 3,170 3,209 - - Contractual Services 11,775 12,262 - - Other Services and Expenses 7,257 7,367 1,839 1,726 Materials and Supplies 8,293 8,358 - - Depreciation 11,331 10,988 - -





(In Thousands)

College operating expense changes were the result of the following factors:

An increase in scholarships and waivers of $2 million, or 7.6 percent, which is dependent on student eligibility and availability of funding sources, and also tied to State mandates related to nonresident tuition waivers.

An increase in personnel services of $2 million, or 2.1 percent, representing a cost of living adjustment of 3 percent for non-bargaining employees.

$0 $40,000 $80,000 $120,000

Depreciation






Personnel Services

$10,988

$8,358

$7,367

$12,262

$3,209

$26,850

$94,337

$11,331

$8,293

$7,257

$11,775

$3,170

$28,896

$96,363

2014‐15 2013‐14


A decrease in contractual services of $0.5 million, or 4 percent, consisting mainly of decreased expenditures for services which often fluctuate year to year.








(In Thousands)

2014-15 2013-14

State Noncapital Appropriations 57,051$ 53,807$ Federal and State Student Financial Aid 47,261 48,143 Gifts and Grants 1,131 1,175 Investment Income 252 886 Gain on Disposal of Capital Assets 110 67 Interest on Capital Asset-Related Debt (689) (785)


Net nonoperating revenues increased $1.8 million, or 1.8 percent, primarily due to an increase in State

noncapital appropriations of $3.2 million.

Other Revenues

This category is composed of State capital appropriations and capital grants, contracts, gifts, and fees.

The following summarizes the College’s other revenues for the 2014-15 and 2013-14 fiscal years:


(In Thousands)

2014-15 2013-14

State Capital Appropriations 7,404$ 2,787$ Capital Grants, Contracts, Gifts, and Fees 5,082 5,000

Total 12,486$ 7,787$

Other revenues increased by $4.7 million, or 60.3 percent, due primarily to an increase in State capital

appropriations of $4.6 million, or 165.7 percent, related to a Public Education Capital Outlay appropriation

for partial funding of the College’s newest campus, while capital improvement fees remained relatively

unchanged.













(In Thousands)

2014-15 2013-14

Cash Provided (Used) by:Operating Activities (99,322)$ (96,251)$ Noncapital Financing Activities 105,398 103,137 Capital and Related Financing Activities (5,730) 3,554 Investing Activities 239 705

Net Increase in Cash and Cash Equivalents 585 11,145 Cash and Cash Equivalents, Beginning of Year 55,460 44,315



student financial aid ($47.2 million), Federal direct loan receipts ($11.9 million), net student tuition and

fees ($41.5 million), and grants and contracts ($12.3 million). Major uses of funds were for payments to

employees and for employee benefits ($97.7 million), payments to suppliers including utilities and

communications ($30.3 million), payments for scholarships ($28.9 million), Federal direct loan

disbursements ($11.9 million), and purchases of capital assets ($8.5 million).

Cash and cash equivalents did not change significantly from the prior fiscal year.


Capital Assets







(In Thousands)


Land 9,768$ 9,768$ Construction in Progress 2,587 942 Buildings 205,100 210,268 Other Structures and Improvements 11,212 10,780 Furniture, Machinery, and Equipment 3,437 3,104



statements.


Major capital expenses through June 30, 2015, were incurred for security initiatives and the Loxahatchee

Groves Campus. The College’s major construction commitments at June 30, 2015, are as follows:

Total Committed 23,616$ Completed to Date 1,826


(In Thousands)


statements.

Debt Administration

As of June 30, 2015, the College had $21.3 million in outstanding bonds payable and loans payable,

representing a decrease of $3.8 million, or 15.2 percent, from the prior fiscal year. The following table


June 30, 2014:


(In Thousands)

2015 2014

SBE Capital Outlay Bonds 2,232$ 3,991$ Capital Improvement Revenue Bonds 15,450 16,240 Loans Payable 3,575 4,850

Total 21,257$ 25,081$

During the 2014-15 fiscal year, the State Board of Education (SBE) issued $129.9 million of the

SBE Capital Outlay Bonds, Series 2014B. Proceeds from the College’s portion of the bonds, $1 million,

was used to refund $1.1 million of Series 2005B bonds. Debt repayments for bonds totaled $2.5 million


and debt repayments for loans totaled $1.3 million during the 2014-15 fiscal year. Additional information

about the College’s long-term debt is presented in the notes to financial statements.




anticipated in the 2015-16 fiscal year. The College’s current financial and capital plans indicate that the

infusion of additional financial resources from active enrollment management efforts, careful materials

budget monitoring, and continued savings of utilities costs will be necessary to maintain its present level

of services.




addressed to Richard Becker, Vice President for Administration and Business Services, Palm Beach

State College, 4200 Congress Avenue, MS#24, Lake Worth, Florida 33461.



Palm Beach State College A Component Unit of the State of Florida



College Unit


Cash and Cash Equivalents 25,567,000$ 2,269,591$ Restricted Cash and Cash Equivalents 102,739 - Restricted Investments - 11,991,092 Accounts Receivable, Net 3,026,246 125,120 Due from Other Governmental Agencies 8,912,022 - Due from Component Unit 26,947 - Inventories 19,594 - Prepaid Expenses 1,504,838 - Other Assets - 44,667


Noncurrent Assets:Restricted Cash and Cash Equivalents 30,374,721 - Investments 1,355,675 18,198,492 Restricted Investments 61,626 - Depreciable Capital Assets, Net 219,748,702 - Nondepreciable Capital Assets 12,355,309 -


TOTAL ASSETS 303,055,419 32,628,962



Accounts Payable 587,428 48,463 Salary and Payroll Taxes Payable 2,699,879 - Retainage Payable 66,524 - Unearned Revenue 8,251 - Deposits Held for Others 1,355,732 - Long-Term Liabilities - Current Portion:

Bonds Payable 1,195,000 - Loans Payable 1,285,537 - Compensated Absences Payable 591,922 - Net Pension Liability 580,495 Other Noncurrent Liabilities 271,135 235,315





June 30, 2015

ComponentCollege Unit


Bonds Payable 16,487,000 - Loans Payable 2,289,230 - Compensated Absences Payable 9,311,430 - Other Postemployment Benefits Payable 572,703 - Net Pension Liability 25,301,941 - Other Noncurrent Liabilities 1,084,540 -






Expendable:Grants and Loans 1,641,592 - Scholarships 669,860 12,234,329 Capital Projects 37,731,926 - Debt Service 56,430 -

Unrestricted (17,773,105) 1,912,363







College Unit


Student Tuition and Fees, Net of Scholarship Allowances of $25,511,808 41,524,086$ -$ Federal Grants and Contracts 4,691,339 - State and Local Grants and Contracts 1,116,358 - Nongovernmental Grants and Contracts 6,383,015 1,213,694 Sales and Services of Educational Departments 580,903 - Auxiliary Enterprises 1,262,130 - Other Operating Revenues 1,964,873 782,974



Personnel Services 96,362,918 - Scholarships and Waivers 28,896,441 1,447,992 Utilities and Communications 3,169,808 - Contractual Services 11,774,699 - Other Services and Expenses 7,257,183 1,839,137 Materials and Supplies 8,293,498 - Depreciation 11,330,507 -


Operating Loss (109,562,350) (1,290,461)

NONOPERATING REVENUES (EXPENSES)State Noncapital Appropriations 57,051,399 - Federal and State Student Financial Aid 47,260,644 - Gifts and Grants 1,131,181 272,001 Investment Income 251,834 1,693,323 Gain on Disposal of Capital Assets 110,085 - Interest on Capital Asset-Related Debt (688,537) -


Income (Loss) Before Other Revenues (4,445,744) 674,863













For the Fiscal Year Ended June 30, 2015

College

CASH FLOWS FROM OPERATING ACTIVITIESStudent Tuition and Fees, Net 41,510,465$ Grants and Contracts 12,268,979 Payments to Suppliers (27,098,705) Payments for Utilities and Communications (3,169,808) Payments to Employees (80,988,206) Payments for Employee Benefits (16,747,548) Payments for Scholarships (28,896,441) Auxiliary Enterprises 1,262,130 Sales and Service of Educational Departments 580,903 Other Receipts 1,956,575


CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESState Noncapital Appropriations 57,051,399 Federal and State Student Financial Aid 47,215,235 Federal Direct Loan Program Receipts 11,937,317 Federal Direct Loan Program Disbursements (11,937,317) Gifts and Grants Received for Other Than Capital or Endowment Purposes 1,131,181


CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESState Capital Appropriations 2,163,951 Capital Grants and Gifts 5,081,853 Purchases of Capital Assets (8,463,769) Principal Paid on Capital Debt (3,823,769) Interest Paid on Capital Debt (688,537)


CASH FLOWS FROM INVESTING ACTIVITIESProceeds from Sales and Maturities of Investments 120,227 Purchases of Investments (311,353) Investment Income 429,885


Net Increase in Cash and Cash Equivalents 584,647 Cash and Cash Equivalents, Beginning of Year 55,459,813








Receivables, Net (260,425) Inventories 34,104 Prepaid Expenses (28,809) Accounts Payable 585,596 Unearned Revenue (34,366) Deposits Held for Others 359,573 Compensated Absences Payable (94,254) Other Postemployment Benefits Payable 101,825 Net Pension Liability (11,663,302) Deferred Outflows of Resources Related to Pensions (4,951,780) Deferred Inflows of Resources Related to Pensions 14,862,025



110,085$

(178,051)$

77,000$

Gains from the disposal of capital assets were recognized on the statement ofrevenues, expenses, and changes in net position, but are not cash transactionsfor the statement of cash flows.

Unrealized losses on investments were recognized as a reduction to investmentincome on the statement of revenues, expenses, and changes in net position, butare not cash transactions for the statement of cash flows.

The State Board of Education (SBE) issued $988,000 in the SBE Capital OutlayBonds, Series 2014B, to refund $1,065,000 in SBE Capital Outlay Bonds, Series2005B. The new debt and defeasance of the old debt were recorded as anincrease and a decrease, respectively, to bonds payable on the statement of netposition; however, because the proceeds of the new debt were immediatelyplaced into an irrevocable trust for the defeasance of the old debt, the transactiondid not affect cash and cash equivalents.





Reporting Entity. The governing body of Palm Beach State College, a component unit of the State of

Florida, is the District Board of Trustees. The Board of Trustees constitutes a corporation and is

composed of five members appointed by the Governor and confirmed by the Senate. The Board of





College correspond with those of Palm Beach County.










component units, the Palm Beach State College Foundation, Inc. (Foundation), a legally separate entity,

is included within the College’s reporting entity as a discretely presented component unit and is governed








Foundation’s audited financial statements are available to the public at the College. The financial data

reported on the accompanying financial statements was derived from the Foundation’s audited financial

statements for the fiscal year ended December 31, 2014.










































by the use of the unrestricted resources




the student or the third party making payment on behalf of the student. The College determines its

scholarship allowance by identifying those student transactions where the student’s classes were paid


by an applicable financial aid source. To the extent that those resources are used to pay student charges,

the College records a scholarship allowance against tuition and fees revenue.




Cash and Cash Equivalents – College. The amount reported as cash and cash equivalents consists

of cash on hand, cash in demand accounts, and cash placed with the State Treasury Special Purpose

Investment Account (SPIA) and State Board of Administration (SBA) Florida PRIME investment pools.

For reporting cash flows, the College considers all highly liquid investments with original maturities of

3 months or less to be cash equivalents. Under this definition, the College considers amounts invested

in the State Treasury SPIA and the SBA Florida PRIME investment pools to be cash equivalents. College

demand deposits are held in banks qualified as public depositories under Florida law. All such deposits

are insured by Federal depository insurance, up to specified limits, or collateralized with securities held

in Florida’s multiple financial institution collateral pool required by Chapter 280, Florida Statutes. Cash

and cash equivalents that are externally restricted to make debt service payments, maintain sinking or

reserve funds, or to purchase or construct capital or other restricted assets are classified as restricted.

At June 30, 2015, the College reported as cash equivalents at fair value $28,977,796 in the State

Treasury SPIA investment pool representing ownership of a share of the pool, not the underlying

securities. The SPIA carried a credit rating of A+f by Standard & Poor’s, had an effective duration of

2.67 years and fair value factor of 1.0013 at June 30, 2015. The College relies on policies developed by

the State Treasury for managing interest rate risk or credit risk for this investment pool. Disclosures for

the State Treasury SPIA investment pool are included in the notes to financial statements of the State’s












Cash and Cash Equivalents – Discretely Presented Component Unit. The amount reported for the

Foundation as cash and cash equivalents consists of cash, money market accounts, and highly liquid

fixed income investments with original maturities of 3 months or less.

Custodial Credit Risk. Cash deposits in excess of Federal Depositors Insurance Corporation (FDIC) limits

at individual financial institutions and cash held in money market accounts are uninsured. Management

does not consider this risk significant. Certain cash equivalents are held in brokerage house investment


accounts that are not insured by the FDIC. The total amount of cash and cash equivalents held by such

institutions amounted to $2,269,591, of which $1,761,341 was uninsured at December 31, 2014.


structures and improvements; and furniture, machinery, and equipment. These assets are capitalized

and recorded at cost at the date of acquisition or at estimated fair value at the date received in the case

of gifts and purchases of State surplus property. Additions, improvements, and other outlays that

significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and










Noncurrent Liabilities. Noncurrent liabilities include bonds payable, loans payable, compensated

absences payable, other postemployment benefits payable, net pension liability, and other noncurrent

liabilities that are not scheduled to be paid within the next fiscal year.



net position of the Florida Retirement System (FRS) defined benefit pension plan and the Health

Insurance Subsidy (HIS) defined benefit pension plan and additions to/deductions from the FRS’s and

the HIS’s fiduciary net position have been determined on the same basis as they are reported by the FRS

and the HIS plans. For this purpose, benefit payments (including refunds of employee contributions) are

recognized when due and payable in accordance with benefit terms. Investments are reported at fair

value.

2. Reporting Change





benefit pension plan and the HIS defined benefit pension plan administered by the Florida Department

of Management Services, Division of Retirement. The effects of implementing this Statement are

discussed in a subsequent note.

3. Adjustments to Beginning Net Position








funds - unrestricted net position as shown below. This deficit can be attributed to the full recognition of



Fund Net Position


Total (17,773,105)$

5. Investments

The Board of Trustees had not adopted a written investment policy. Therefore, pursuant to

Section 218.415(17), Florida Statutes, the College is authorized to invest in the Florida PRIME

investment pool, administered by the State Board of Administration (SBA); interest-bearing time deposits

and savings accounts in qualified public depositories, as defined by Section 280.02, Florida Statutes;

direct obligations of the United States Treasury; and Securities and Exchange Commission registered

money market funds with the highest credit quality rating from a nationally recognized rating agency.





State Board of Administration Debt Service Accounts 56,430$ Money Market Funds 1,355,675 Other 5,196









Report.



Investments held by the College’s component unit at December 31, 2014, are reported at fair market

value with the following maturities:

Investment Type Fair Value Less than 1 1 - 5 6 - 10 11 - 15 More than 15

Investment in Debt Obligations: U.S. Government Securities 1,832,165$ 106,265$ 928,030$ 326,131$ -$ 471,739$ Mortgage-Backed Pass-Throughs 1,625,168 140,737 233,414 239,224 47,928 963,865 Corporate Bonds 2,001,114 83,470 849,678 824,877 73,889 169,200

Total Investment in Debt Obligations 5,458,447$ 330,472$ 2,011,122$ 1,390,232$ 121,817$ 1,604,804$

Other Investments: Mutual Funds 7,819,042 Alternative Investments 2,238,471 Equity Securities 14,673,624

Total Other Investments 24,731,137


Investment Maturities (In Years)

The Foundation has developed an investment objective of growth and income over the long term. Per

the Foundation’s investment policy, the spending policy is to make available on an annual basis an

amount equal to approximately 5.0 percent of the market value of the Foundation’s assets as of the

beginning of each fiscal year, plus approximately 1.0 percent to account for administrative expenses.

These distributions may be from any combination of income, earnings, or principal value of contributions

that are not donor or Board restricted. The following risks apply to the Foundation’s investments:

Interest Rate Risk: Interest rate risk is the risk that changes in interest rates will adversely affect the fair

value of the investments. The Foundation’s policy for managing its exposure for changes in interest rates

is through maintaining diversification of its investments and investment maturity dates to minimize the

impact of downturns in the market. As of December 31, 2014, the Foundation has investments in

U.S. Government securities, mortgage-backed pass-throughs, and corporate bonds and is therefore

subject to interest rate risk.

Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its

obligations. The Foundation’s policy for managing its exposure to credit risk is through maintaining its

investments in securities rated “BBB” (or its equivalent) or higher at the time of purchase by a nationally

recognized statistical rating agency. As of December 31, 2014, the credit quality of the Foundation’s

fixed income accounts was investment grade “B” or higher. The policy also recommends a target asset

allocation strategy of 60 percent equities (minimum 50 percent and maximum 70 percent limits) and

40 percent fixed income and cash equivalents (minimum 25 percent and maximum 50 percent limits).

Obligations of United States government agencies and instrumentalities and domestic equities do not

require disclosure of credit quality. Mortgage-backed pass-throughs were not rated. Corporate bonds

held by the Foundation at December 31, 2014, were rated as follows:


Investment Type Fair Value Moody's Standard & Poor's

Corporate Bonds 1,309,241$ AAA to BAA1 AA to A691,873 BAA1 to B1 BBB to B

Total Corporate Bonds 2,001,114$

Credit Quality Ratings

Custodial Credit Risk: Custodial credit risk is the risk that in the event of the failure of the counterparty,

the value of investments or collateral securities in the possession of an outside party will not be

recoverable. Exposure to custodial risk relates to investment securities that are held by someone other

than the Foundation and are not registered in the Foundation’s name. The Foundation’s investment

policy does not address custodial credit risk.

Concentration of Credit Risk: Concentration of credit risk is the risk of loss attributed to the magnitude of

a government’s investment in a single issuer. The Foundation’s investment policy requires that invested

assets be broadly diversified by asset class, investment style, number of issues, issue type, and other

factors consistent with the investment objectives to reduce the risk of wide swings in market value from

year-to-year or incurring large losses that may result from concentrated positions. Subject to the usual

standards of fiduciary prudence, and to minimize the risk of large losses, each investment manager is to

maintain adequate diversification in their portfolio.



the College, uncollected commissions for food service and vending machine sales, and contract and

grant reimbursements due from third parties. These receivables are reported net of a



The amount primarily consists of $6,638,203 of Public Education Capital Outlay allocations due from the

State for construction of College facilities, $713,937 due from Federal grants and scholarships, and

$795,980 due from the Florida Prepaid Scholarship Program.

8. Due From Component Unit

The $26,947 reported as due from component unit consists of amounts owed by the Foundation for

scholarships. The College’s financial statements are reported for the fiscal year ended June 30, 2015.

The Foundation’s financial statements are reported for the fiscal year ended December 31, 2014.

Accordingly, although the College reported an amount due from the component unit on the statement of

net position, no amount is reported by the component unit as due to the College.

9. Inventories

Inventories consist of centrally stored items, primarily office and teaching supplies held for College-wide

use, and are valued using the last invoice cost, which approximates the first-in, first-out, method of

inventory valuation. Consumable laboratory supplies, teaching materials, and office supplies on hand in


College departments are expensed when purchased, and are not considered material. Accordingly,

these items are not included in the reported inventory.

10. Capital Assets



Nondepreciable Capital Assets:Land 9,767,812$ -$ -$ 9,767,812$ Construction in Progress 941,925 6,256,388 4,610,816 2,587,497

Total Nondepreciable Capital Assets 10,709,737$ 6,256,388$ 4,610,816$ 12,355,309$

Depreciable Capital Assets:Buildings 301,600,702$ 2,043,517$ -$ 303,644,219$ Other Structures and Improvements 38,257,789 2,823,406 - 41,081,195 Furniture, Machinery, and Equipment 18,484,119 2,094,885 861,717 19,717,287

Total Depreciable Capital Assets 358,342,610 6,961,808 861,717 364,442,701

Less, Accumulated Depreciation:Buildings 91,332,750 7,211,480 - 98,544,230 Other Structures and Improvements 27,477,489 2,391,586 - 29,869,075 Furniture, Machinery, and Equipment 15,380,022 1,727,441 826,769 16,280,694


Total Depreciable Capital Assets, Net 224,152,349$ (4,368,699)$ 34,948$ 219,748,702$




Bonds Payable 20,231,000$ 988,000$ 3,537,000$ 17,682,000$ 1,195,000$ Loans Payable 4,849,536 - 1,274,769 3,574,767 1,285,537 Compensated Absences Payable 9,997,606 407,329 501,583 9,903,352 591,922 Other Postemployment Benefits Payable 470,878 177,534 75,709 572,703 - Net Pension Liability (1) 37,545,738 6,916,243 18,579,545 25,882,436 580,495 Other Noncurrent Liabilities 1,222,373 133,302 - 1,355,675 271,135





SBE Capital Outlay Bonds. The SBE issues capital outlay bonds on behalf of the College. These bonds mature serially and are secured by a pledge of the College’s portion of the State-assessed motor vehicle license tax and by the State’s full faith and credit. The SBE and the SBA administer


the principal and interest payments, investment of debt service resources, and compliance with reserve requirements.

Capital Improvement Revenue Bonds, Series 2008A and 2012A. These bonds are authorized by Article VII, Section 11(d) of the Florida Constitution; Sections 215.57 through 215.83 and Section 1009.23, Florida Statutes; and other applicable provisions of law. Principal and interest on these bonds are secured by and payable solely from a first lien pledge of the capital improvement fees collected pursuant to Section 1009.23(11), Florida Statutes, by participating colleges on a parity with other 2008A bonds and any additional bonds issued subsequent to the issuance of the Series 2008A bonds. The Series 2008A bonds constitute the second series of bonds issued pursuant to a Master Authorizing Resolution. The Governing Board authorized the sale of the Series 2012A bonds by the Fourth Supplemental Resolution adopted on October 1, 2011, which also amended the Master Authorizing Resolution. Upon the issuance of additional bonds, all bonds will share a parity first lien on the pledged revenues of all colleges participating in any series of bonds then outstanding. The Series 2008A and 2012A bonds will share the lien of such additional bonds on the Series 2008A and 2012A pledged revenues and on the revenues pledged by the colleges participating in such additional bonds. The 2008A and 2012A bonds were issued for new construction and renovation and remodeling of educational facilities.



SBE Capital Outlay Bonds:Series 2014A, Refunding 1,244,000$ 2.0 - 5.0 2025Series 2014B, Refunding 988,000 2.0 - 5.0 2020


Series 2008A 6,660,000 4.0 - 5.0 2028Series 2012A 8,790,000 2.0 - 3.625 2032

Total 17,682,000$



2016 1,195,000$ 662,158$ 1,857,158$ 2017 1,249,000 613,161 1,862,161 2018 1,302,000 568,751 1,870,751 2019 1,042,000 521,151 1,563,151 2020 1,074,000 486,851 1,560,851 2021-2025 5,785,000 1,827,294 7,612,294 2026-2030 4,750,000 703,813 5,453,813 2031-2032 1,285,000 69,538 1,354,538

Total 17,682,000$ 5,452,717$ 23,134,717$


On December 2, 2014, the SBE issued $129,880,000 in SBE Capital Outlay Bonds, Series 2014B. The

College’s portion of the bonds, $988,000, was used to refund $1,065,000 of outstanding SBE Capital


Outlay Bonds, Series 2005B. The SBE Capital Outlay Bonds, Series 2005A were called on

January 1, 2015. As a result of the refunding, the College had a debt service savings of $77,000.

Loans Payable. On August 14, 2012, the College borrowed $3,403,103, to finance the cost of network

infrastructure. The loan matures on August 21, 2017, and payments are made annually. On

December 11, 2012, the College borrowed $3 million to finance the acquisition of the Loxahatchee

Groves new campus property. The loan matures on December 1, 2017, and payments are made

quarterly. Annual requirements to amortize the outstanding loan as of June 30, 2015, are as follows:


2016 1,285,537$ 23,524$ 1,309,061$ 2017 1,296,498 12,562 1,309,060 2018 992,732 2,108 994,840

Total 3,574,767$ 38,194$ 3,612,961$










the average fiscal year payouts for all leave for the 2 fiscal years immediately preceding, including

applicable tax payments.




(Consortium).

Plan Description. The College contributes to an agent, multiple-employer defined benefit plan (Plan)



the College’s healthcare benefits. The College subsidizes the premium rates paid by retirees by allowing

them to participate in the Plan at reduced or blended group (implicitly subsidized) premium rates for both

active and retired employees. These rates provide an implicit subsidy for retirees because, on an

actuarial basis, their current and future claims are expected to result in higher costs to the Plan on

average than those of active employees. The College does not offer any explicit subsidies for retiree

coverage. Retirees are required to enroll in the Federal Medicare program for their primary health

coverage as soon as they are eligible. Neither the College nor the Consortium issue a stand-alone annual

report for the Plan and the Plan is not included in the annual report of a public employee retirement







the 2014-15 fiscal year, 48 retirees received postemployment healthcare benefits. The College provided

required contributions of $75,709 toward the annual OPEB cost, composed of benefit payments made

on behalf of retirees for claim expenses (net of reinsurance), administrative expenses, and reinsurance

premiums. Retiree contributions totaled $278,981, which represents 0.4 percent of covered payroll.







obligation:

Description Amount








Percentage ofAnnual


2012-13 155,444$ 33.7% 356,598$ 2013-14 168,003 32.0% 470,878 2014-15 177,534 42.6% 572,703






















the calculations.




return on invested assets. The actuarial assumptions also included a payroll growth rate of 4 percent per

year, an inflation rate of 3 percent per year, and an annual healthcare cost trend rate of 7.5 percent

pre-Medicare and 6 percent Medicare for the 2014-15 fiscal year, reduced by decrements to an ultimate

rate of 5 percent after 3 years for pre-Medicare and 2 years for Medicare. The unfunded actuarial accrued

liability is being amortized as a level percentage of projected payroll amortized over 30 years on an open

basis. The remaining amortization period at June 30, 2015, was 22 years.


























FRS Pension Plan





















pension benefits.











earned:















FRS, Regular 3.00 7.37FRS, Senior Management Service 3.00 21.14Deferred Retirement Option Program - Applicable to Members from Both of the Above Classes 0.00 12.28FRS, Reemployed Retiree (2) (2)












0.140794298 percent, which was an increase of 0.014927952 percent from its proportionate share

measured as of June 30, 2013.





Differences between expected and actual experience -$ 531,607$ Change of assumptions 1,487,736 - Net difference between projected and actual earnings on FRS pension plan investments - 14,330,418 Changes in proportion and differences between College FRS contributions and proportionate share of contributions 2,161,866 - College FRS contributions subsequent to the measurement date 3,490,816 -

Total 7,140,418$ 14,862,025$






2016 (2,994,304)$ 2017 (2,994,304) 2018 (2,994,304) 2019 (2,994,302) 2020 588,301 Thereafter 176,490

Total (11,212,423)$



Inflation 2.60 percentSalary Increases 3.25 percent, average, including inflationInvestment Rate of Return 7.65 percent, net of pension plan investment















Total 100.00%













(6.65%) (7.65%) (8.65%)








HIS Pension Plan











include Medicare.











June 30, 2015, the College reported a liability of $17,291,913 for its proportionate share of the net


benefit payments expected to be paid within one year, net of the College’s proportionate share of the











sources:



Total 1,528,882$






2016 132,225$ 2017 132,225 2018 132,226 2019 132,226 2020 130,150 Thereafter 156,180

Total 815,232$





















(3.29%) (4.29%) (5.29%)






outstanding amount of contributions to the HIS Plan required for the fiscal year ended June 30, 2015.

















0.04 percent of payroll and by forfeited benefits of Investment Plan members. Allocations to the

Investment Plan member accounts during the 2014-15 fiscal year were as follows:


Percent ofGross




















June 30, 2015.











for a total of 7.69, and employees contribute 3 percent of the employee’s salary. Additionally, the

employee may contribute, by payroll deduction, an amount not to exceed the percentage contributed by

the college to the participant’s annuity account. The contributions are invested in the company or












The Local Annuity Program is a defined contribution plan, which provides full and immediate vesting of

all contributions submitted to the participating companies on behalf of the employee. The College

contributes 9 percent of the employee’s salary to the Local Annuity Program. The participants may make

contributions toward the Local Annuity Program by way of salary reduction or by deduction of a


employer.

The College’s contributions to the Annuity Program totaled $70,458 and employee contributions totaled





Loxahatchee Groves Campus Construction Company 22,072,469$ 674,585$ 21,397,884$ Architect 1,543,825 1,151,492 392,333

Total 23,616,294$ 1,826,077$ 21,790,217$


The College leased computer equipment under an operating lease, which expires in 2018. These leased

assets and the related commitments are not reported on the College’s statement of net position.


resulting from this lease agreement are contingent upon future appropriations. Future minimum lease

commitments for this noncancelable operating lease are as follows:


2016 1,173,959$ 2017 1,173,959 2018 1,320,704



































Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

7/1/2009 -$ 297,267$ 297,267$ 0% 54,890,980$ 0.54%7/1/2011 - 1,090,710 1,090,710 0% 50,945,268 2.14%7/1/2013 - 1,533,268 1,533,268 0% 51,196,916 2.99%










(2) Covered-employee payroll includes defined benefit plan actives, investment plan members, State college system optional retirement plan, and members in DROP because total employer contributions are determined on a uniform basis (blended rate) as required by Part III of Chapter 121, Florida Statutes.




















2015 (1) 2014 (1)











The July 1, 2013, unfunded actuarial accrued liability of $1,533,268 was $442,558 higher than the

July 1, 2011, liability of $1,090,710 as a result of the following factors:

Demographic assumption (rates of termination, retirement, disability, and mortality) were revised to be consistent with those used for the Florida Retirement System.




The conditions for retirement eligibility and rates of retirement were supplemented to accommodate those active employees hired on or after July 1, 2011.





3.25 percent. The long term expected rate of return decreased from 7.75 percent to 7.65 percent.





Phone: (850) 412-2722 Fax: (850) 488-6975











issued by the Comptroller General of the United States, the financial statements of Palm Beach State

College, a component unit of the State of Florida, and its discretely presented component unit as of and






















with governance.


























Auditor General

Report No. 2016-152

March 2016

SANTA FE COLLEGE


June 30, 2015

Financial Audit


During the 2014-15 fiscal year, Dr. Jackson N. Sasser served as President and the following


County

Robert L. Woody, Chair from 7-29-14, a

Vice Chair to 7-28-14

Jeffrey L. Oody, Vice Chair from 7-29-14 Bradford

Col. Arley W. McRae, Chair to 7-28-14 Bradford

G. W. “Blake” Fletcher from 2-25-15 Alachua

Robert C. Hudson Alachua

Dr. Bessie G. Jackson to 2-24-15 Alachua

Caridad E. Lee Alachua

G. Thomas Mallini Alachua

Lisa M. Prevatt Bradford

Note: a Confidential pursuant to Section 119.071(4), Florida Statutes.




The audit was supervised by Philip B. Ciano, CPA.








SANTA FE COLLEGE

TABLE OF CONTENTS

Page No.

SUMMARY ........................................................................................................................................... i






















SUMMARY


Our audit disclosed that the basic financial statements of Santa Fe College (a component unit of the State

of Florida) were presented fairly, in all material respects, in accordance with prescribed financial reporting

standards.







Our audit objectives were to determine whether Santa Fe College and its officers with administrative and

stewardship responsibilities for College operations had:













AUDIT METHODOLOGY






Phone: (850) 412-2722 Fax: (850) 488-6975







We have audited the accompanying financial statements of Santa Fe College, a component unit of the

State of Florida, and its discretely presented component unit as of and for the fiscal year ended

June 30, 2015, and the related notes to the financial statements, which collectively comprise the







error.
























our audit opinions.

Opinions


to above present fairly, in all material respects, the respective financial position of Santa Fe College and

of its discretely presented component unit as of June 30, 2015, and the respective changes in financial

position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with

accounting principles generally accepted in the United States of America.

Emphasis of Matter








Other Matter






















of Santa Fe College’s internal control over financial reporting and on our tests of its compliance with








performed in accordance with Government Auditing Standards in considering Santa Fe College’s internal

control over financial reporting and compliance.








the responsibility of College management. The MD&A contains financial activity of the College and the

Florida College System Risk Management Consortium (Consortium) for the fiscal years ended

June 30, 2015, and June 30, 2014, and the College’s component unit, the Santa Fe College Foundation,

Inc., for the fiscal years ended December 31, 2014, and December 31, 2013. To better distinguish the

activities of the College and Consortium within the primary government, the financial information related

to the Consortium is separately identified.



3.4 percent, increase as compared to June 30, 2014, resulting primarily from an increase in amounts due

from other governmental agencies. Deferred outflows of resources at June 30, 2015, totaled $5.8 million.

Liabilities increased by $17.2 million, or 55 percent, totaling $48.6 million at June 30, 2015, as compared

to $31.4 million at June 30, 2014. Deferred inflows of resources at June 30, 2015, totaled $10.6 million.

As a result, the College’s net position decreased by $16.7 million. The increase in liabilities, deferred

outflows and inflows of resources, and decrease in net position were primarily due to the adoption of

Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial

Reporting for Pensions, an amendment of GASB Statement No. 27. This accounting standard requires

the College, as a participating employer in the Florida Retirement System (FRS), to recognize its

proportionate share of the collective net pension liabilities of the FRS and Health Insurance Subsidy (HIS)

cost-sharing multiple-employer defined benefit plans. Changes in liabilities are recognized through the

statement of revenues, expenses and changes in net position, or reported as deferred outflows or inflows

of resources on the statement of net position, depending on the nature of the change. The initial adoption

also resulted in an adjustment to beginning net position of $22.6 million.


after deducting the liabilities and deferred inflows of resources. The College’s comparative total net

position by category for the fiscal years ended June 30, 2015, and June 30, 2014, is shown in the

following graph:



(In Thousands)

The College’s net investment in capital assets represents capital assets, net of accumulated depreciation

and outstanding debt principal attributable to the acquisition, construction, or improvement of those

assets. The $1.9 million, or 2.5 percent, decrease in net investment in capital assets compared to the

prior fiscal year was primarily due to the excess depreciation expense over the additions to capital assets

during the 2014-15 fiscal year.

Restricted net position is subject to externally imposed restrictions governing their use. The increase in

restricted net position of $6.7 million, or 35 percent, was primarily due to the increase in the amount of

restricted expendable capital funding from the construction of new facilities as well as renovation and

remodeling of existing structures. Variances from year to year for capital funding are expected based on

the methods the State Legislature uses to allocate capital appropriations. Therefore, this portion of

restricted net position will continue to fluctuate each year.

Unrestricted net position is not subject to externally imposed restrictions. The College reports liabilities

for accrued leave, postemployment healthcare and life insurance benefits, and the College’s

proportionate share of the net pension liability for the FRS and HIS pension plans, totaling $25.8 million;

however, State appropriations fund only the portion of accrued leave and postemployment benefits that

are paid in the current fiscal year (see the notes to financial statements for further details). Even with

this reporting requirement, unrestricted net position has a positive balance.

As more fully described in the Operating Expenses and the Revenues sections which follow, College

revenues and other support exceed expenses for the fiscal year ended June 30, 2015. The following

chart provides a graphical presentation of College revenues by category for the 2014-15 fiscal year:

$0

$25,000

$50,000

$75,000

$100,000



$74,161

$25,713

$8,967

$76,030

$19,050

$30,429

2015 2014



Annual State appropriations are classified as nonoperating revenues according to generally accepted

accounting principles, although State-appropriated funds are used to support the operations of the

College. Nonoperating revenues, comprising 58 percent of total revenues, included State noncapital

appropriations, Federal Pell Grant revenue, State scholarship revenue, revenues received from

agreements between local school boards and the College for high school programs, and investment

income; all of which supported operating expenses of the College. Operating revenues, comprising

30 percent of total revenues, consisted primarily of student tuition and fees, grants and contracts, sales

and services of educational departments, and auxiliary enterprises. Other revenues, comprising

12 percent of total revenues, included State capital appropriations and capital grants, contracts, gifts, and

fees designated for capital projects.

The component unit revenues exceeded expenses during the 2014 calendar year, resulting in an

increase in net position of $1.8 million, primarily due to an increase in unrealized investment appreciation

of $1.2 million, an increase in endowment contributions of $339 thousand, and a decrease in contributions

in support of the College of $463 thousand for capital projects.







Primary Government

Santa Fe College (College) – Most of the programs and services generally associated with a college fall into this category, including instruction, public service, and support services.

Florida College System Risk Management Financing Consortium (Consortium), a Statewide college system risk management program – Although legally separate, the College is the fiscal administrator for the program and is required to report certain financial activities to the State of Florida. The required financial information reported includes the assets of cash and cash

Operating Revenues

30%


58%

Other Revenues12%


equivalents, and investments with a corresponding liability representing that the assets are held in custody by the College for the Consortium.

Component Unit

Santa Fe College Foundation, Inc. (Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida.

The Statement of Net Position and the Statement of Revenues, Expenses, and Changes in Net

Position

One of the most important questions asked about the College’s finances is, “Is Santa Fe College, as a

whole, better off or worse off as a result of the year’s activities?” The statement of net position and the

statement of revenues, expenses, and changes in net position report information on the College as a

whole and on its activities in a way that helps answer this question. When revenues and other support

exceed expenses, the result is an increase in net position. When the reverse occurs, the result is a

decrease in net position. The relationship between revenues and expenses may be thought of as Santa

Fe College’s operating results.

These two statements report Santa Fe College’s net position and changes in them. You can think of the

College’s net position (assets, plus deferred outflows of resources, less liabilities, less deferred inflows

of resources) as one way to measure the College’s financial health, or financial position. Over time,

increases or decreases in the College’s net position are one indication of whether its financial health is

improving or deteriorating. You need to consider many other nonfinancial factors, such as certain trends,

student retention, condition of the buildings, and safety of the campus, to assess the College’s overall

financial health.

These statements include all assets and liabilities using the accrual basis of accounting, which is similar

to the accounting used by most private-sector institutions. All of the current year’s revenues and

expenses are taken into account when earned or incurred, regardless of when cash is received or paid.


resources, and net position of the College, Consortium, and its component unit for the respective fiscal

years ended are shown in the following table:



(In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14 12-31-14 12-31-13

AssetsCurrent Assets 56,717$ 47,297$ 66,548$ 75,850$ 2,329$ 1,628$ Capital Assets, Net 84,552 87,286 - - 13,802 14,176 Other Noncurrent Assets 21,008 22,313 18,573 16,824 29,144 27,710

Total Assets 162,277 156,896 85,121 92,674 45,275 43,514

Deferred Outflows of5,849 - - - - -

LiabilitiesCurrent Liabilities 14,511 12,702 66,548 75,850 33 21 Noncurrent Liabilities 34,125 18,685 18,573 16,824 1,626 1,723

Total Liabilities 48,636 31,387 85,121 92,674 1,659 1,744

Deferred Inflows of10,649 - - - - -

Net PositionNet Investment in Capital

74,161 76,030 - - 13,802 14,176 Restricted 25,713 19,050 - - 29,703 27,625 Unrestricted 8,967 30,429 - - 111 (31)

Total Net Position 108,841$ 125,509$ -$ -$ 43,616$ 41,770$

Increase (Decrease) in(16,668)$ (13.3%) -$ 1,846$ 4.4%

CollegeComponent Unit

Consortium (1)Primary Government

Net Position

Resources

Assets

Resources

Note: (1) The financial information reported for the Consortium includes the assets of restricted cash and cash equivalents and investments with a corresponding liability representing that the assets are held in custody by the College for the Consortium.

Revenues and expenses of the College and its component unit (the College does not include operating

results of the Consortium in its statements) for the respective fiscal years ended are shown in the

following table:



(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

Operating RevenuesStudent Tuition and Fees, Net of Scholarship Allowances 25,864$ 24,041$ -$ -$ Federal Grants and Contracts 2,763 2,896 - - State and Local Grants and Contracts 648 530 - - Nongovernmental Grants and Contracts 422 184 413 402 Sales and Services of Educational Departments 1,115 1,102 - - Auxiliary Enterprises 1,563 1,016 - - Other Operating Revenues 451 552 513 520

Total Operating Revenues 32,826 30,321 926 922 Less, Operating Expenses 103,998 106,271 2,060 1,868

Operating Loss (71,172) (75,950) (1,134) (946)

Nonoperating Revenues (Expenses)State Noncapital Appropriations 36,078 35,452 - - Federal and State Grants 25,653 28,225 - - Gifts and Grants 1,920 1,505 - - Other Nonoperating Revenues 442 827 2,381 1,173 Nonoperating Expenses (516) (555) - -

Net Nonoperating Revenues 63,577 65,454 2,381 1,173

Income (Loss) Before Other Revenues or Expenses (7,595) (10,496) 1,247 227 State Capital Appropriations 9,096 1,781 - - Endowment Principal Additions - - 599 260 Capital Grants, Contracts, Gifts, and Fees 4,411 5,182 - 92 Contributions in Support of College - - - (463)

Net Increase (Decrease) In Net Position 5,912 (3,533) 1,846 116






Revenues



receives something of equal or similar value. Certain revenue sources that the College relies on to


provide for operations, including State appropriations, certain gifts and grants, and investment income,

are defined by GASB as nonoperating. College revenues increased $7.1 million, or 6.9 percent, as

compared to the prior year as a result of the following factors:

Operating Revenues

Net student tuition and fee revenue increased by $1.8 million, or 7.6 percent, as a result of a decrease in the scholarship allowance.

Grants and contracts increased by $223 thousand, or 6.2 percent, primarily due to an increase in nongovernmental grants.

Auxiliary enterprise revenue increased by $547 thousand, or 53.8 percent, as a result of the College entering into an inter-local agreement with the City of Gainesville for management services of the Gainesville Technology Entrepreneurship Center Incubator.

Nonoperating and Other Revenues and Gains

State noncapital appropriations increased by $626 thousand, or 1.8 percent, primarily due to increased funding in College Program funds.

Federal and State grants revenue decreased by $2.6 million, or 9.1 percent, due primarily to a decrease in Federal Pell Grant Program scholarship support.

Investment income decreased by $425 thousand, or 49.9 percent, principally due to decreases in interest rates.

State capital appropriations increased by $7.3 million, or 410.7 percent. This was due to increased Public Education Capital Outlay funding from the prior fiscal year for capital projects.

Capital grants, contracts, gifts and fees decreased by $771 thousand, or 14.9 percent, primarily due to decreases in fees both from enrollment decline and fee reduction.

Component unit revenues increased by $1.5 million, or 59.6 percent, as compared to the prior fiscal year

as a result of the following factors:

Other nonoperating revenues increased $1.2 million, or 103 percent, mainly from an increase in investment income, net of realized and unrealized gains or losses.

Endowment principal additions increased $339 thousand, or 130.4 percent, as a result of an increase in amounts designated by donors to be placed in permanent endowments.

Operating Expenses






The following summarizes operating expenses by natural classification for the College (none are reported

for the Consortium) and its component unit for the respective fiscal years ended:



(In Thousands)

6-30-15 6-30-14 12-31-14 12-31-13

Personnel Services 59,096$ 59,322$ -$ -$ Scholarships and Waivers 18,237 18,080 834 737 Utilities and Communications 2,398 2,478 - - Contractual Services 6,495 6,376 - - Other Services and Expenses 4,082 4,694 832 737 Materials and Supplies 7,848 8,401 - - Depreciation 5,842 6,920 394 394



College total operating expense decreased by $2.3 million, or 2.1 percent, as compared to the prior fiscal

year as a result of the following factors:

The College provided salary increases of 2 percent to each employee’s 2013-14 base salary and a non-recurring periodic salary supplement of $500 to all full-time personnel. These increases were offset with the implementation of GASB Statement No. 68 that required the recording of a net pension expense credit adjustment totaling $1.2 million. As a result, personnel services decreased by $226 thousand, or 0.4 percent, from the prior fiscal year.

Scholarships and waivers provided to students increased by $157 thousand, or 0.9 percent, due to decreases in Federal Title IV financial aid and the State’s Bright Futures Scholarship Program and increases in waiver expense with the addition of two out of state fee waivers for non-Florida resident Florida high school graduates and veterans. Scholarship expenses, similar to tuition and fees revenue, are also shown net of scholarship allowances (amounts received from other than students and third party payers).

Utilities and communications decreased by $80 thousand, or 3.2 percent, primarily due to a decrease in water, sewer and electrical consumption, offset by a slight increase in broadband expenses.

Contractual services increased by $119 thousand, or 1.9 percent, primarily due to an increase in institutional membership expenses.

Other services and expenses decreased $612 thousand, or 13 percent, primarily due to a decrease in the bad debt expense.

Materials and supplies decreased by $553 thousand, or 6.6 percent, which is attributable primarily to decreases in expenses for non-capitalized repairs and maintenance offset with slight increases in software expenses.

Depreciation expense decreased by $1.1 million, or 15.6 percent, as a result of several buildings and equipment reaching full depreciation in the 2014-15 fiscal year.

Total operating expenses for the component unit increased $192 thousand, or 10.3 percent, primarily

due to an increase in scholarships provided to students.


Another way to assess the financial health of an institution is to look at the statement of cash flows. Its

primary purpose is to provide relevant information about the cash receipts and cash payments of an entity


during a period. The statement of cash flows provides information about the College’s financial results

by reporting the major sources and uses of cash and cash equivalents. Cash flows from operating

activities show the net cash used by the operating activities of the College. Cash flows from capital

financing activities include all plant funds and related long-term debt activities. Cash flows from investing

activities show the net source and use of cash related to purchasing or selling investments, and earning

income on those investments. Cash flows from noncapital financing activities include those activities not

covered in other sections. The statement of cash flows also helps users assess:

An entity’s ability to generate future net cash flows.

Its ability to meet its financial obligations as they come due.

Its need for external financing.

A summary of the College’s and the Consortium’s cash flows for the 2014-15 and 2013-14 fiscal years is

presented in the following table:


(In Thousands)

2014-15 2013-14 2014-15 2013-14

Cash Provided (Used) by:Operating Activities (65,292)$ (68,924)$ (7,554)$ 6,454$ Noncapital Financing Activities 63,709 65,147 - - Capital and Related Financing Activities 818 3,985 - - Investing Activities 421 897 (71) (43)

Net Increase (Decrease) in Cash and Cash Equivalents (344) 1,105 (7,625) 6,411 Cash and Cash Equivalents, Beginning of Year 54,946 53,841 72,183 65,772

Cash and Cash Equivalents, End of Year 54,602$ 54,946$ 64,558$ 72,183$

College Consortium

The College’s cash and cash equivalents decreased during the 2014-15 fiscal year. The following

discussion amplifies the overview of cash flows:

Cash outflows for operating activities decreased $3.6 million as compared to the prior fiscal year. The primary components of this change were increases in cash inflows from student tuition and fees of $2.1 million, and other receipts of $1.3 million, as well as increases in cash outflows of $964 thousand for payments to employees and employee benefits. These cash outflows were offset by a decrease of $1 million in cash outflows in payments to suppliers.

The primary sources of cash inflows in noncapital financing activities are State noncapital appropriations ($36.1 million), and Federal and State grants ($25.7 million). Cash inflows from noncapital financing decreased $1.4 million, as compared to the prior fiscal year, predominantly due to a decrease in Federal and State grants ($2.6 million) offset by an increase in State noncapital appropriations ($626 thousand) and Gifts and Contracts ($415 thousand).

The primary sources of cash inflows for capital and related financing activities are capital grants and gifts ($4.1 million) and State capital appropriations ($1.1 million). Net cash inflows for capital and related financing activities decreased $3.2 million as compared to the prior fiscal year, primarily due to a decrease in State capital appropriations ($314 thousand) and capital grants and gifts ($1 million) as well as an increase in the purchase of capital assets ($1.8 million).

Cash inflows for investing activities of the College decreased by $476 thousand primarily due to a decrease in investment income.



Capital Assets



$5.8 million. The following table summarizes the College’s capital assets activity for the fiscal year ending

June 30, 2015:


(In Thousands)

Beginning EndingCapital Assets Balance Additions Reductions Balance

Land 5,110$ 7$ -$ 5,117$ Artwork and Artifacts 18 - - 18 Buildings 140,140 - - 140,140 Other Structures and Improvements 30,966 92 44 31,014 Furniture, Machinery, and Equipment 9,353 805 1,189 8,969 Construction in Progress 147 2,296 92 2,351

Total 185,734 3,200 1,325 187,609

Less, Accumulated Depreciation:Buildings 63,666 3,390 - 67,056 Other Structures and Improvements 26,623 1,728 44 28,307 Furniture, Machinery, and Equipment 8,159 724 1,189 7,694

Total Accumulated Depreciation 98,448 5,842 1,233 103,057

Capital Assets, Net 87,286$ (2,642)$ 92$ 84,552$

The component unit had $19.1 million in capital assets, less accumulated depreciation of $5.3 million, for

net capital assets of $13.8 million. Depreciation charges for the current fiscal year totaled $394 thousand.

Details of the component unit’s capital assets activity for the fiscal year ended December 31, 2014, are

shown in the following table:


Capital Assets, Net at December 31: Component Unit

(In Thousands)

Beginning Additions Reductions EndingCapital Assets Balance Balance

Land 3,622$ -$ -$ 3,622$ Art Collection 473 - - 473 Equipment 4 - - 4 Land and Buildings Held for Investment 2,068 14 - 2,082 Buildings and Improvements 11,927 6 - 11,933 Film Costs (Depreciable) 962 - - 962

Total 19,056 20 - 19,076 Less, Accumulated Depreciation: 4,880 394 - 5,274

Capital Assets, Net 14,176$ (374)$ -$ 13,802$

More detailed information about the College’s and its component unit’s capital assets is presented in the

notes to the financial statements.


Capital expenses through June 30, 2015, included renovations of buildings C and T ($66 thousand),

signage ($1.4 million), and renewable energy accessible lab ($850 thousand).

The College has $699 thousand in construction contract commitments at June 30, 2015. The contract

commitments are for projects that include the construction of the Law Enforcement and Emergency

Medical Technician facility, college signage, renewable energy accessible lab, and various street

resurfacing projects. State capital appropriations together with local funds are expected to finance the

construction and renovation of facilities. The College’s construction commitments at June 30, 2015, are

as follows:

Major Capital Additions: College

(In Thousands)


Balance Committed 699$


statements.

Debt Administration

At fiscal year end, the College had $10.4 million in outstanding capital outlay bonds payable versus

$11.3 million at the end of the prior fiscal year, a decrease of 7.7 percent. Proceeds from bonds were

used to construct and renovate College facilities. During the 2014-15 fiscal year, there was a bond

refunding on $100 thousand of State Board of Education (SBE) bonds. Debt payments totaled

$630 thousand for the Capital Improvement Revenue bonds and $230 thousand for SBE bonds. The


following table summarizes the outstanding long-term debt by type for the fiscal years ended

June 30, 2015, and June 30, 2014:


(In Thousands)

2015 2014

SBE Capital Outlay Bonds 96$ 330$ Capital Improvement Revenue Bonds 10,295 10,925

Total 10,391$ 11,255$

Additional information about the College’s long-term debt is presented in the notes to the financial

statements.


The College’s economic condition is closely tied to that of the State of Florida. The College’s current

financial and capital plans indicate that additional financial resources will be necessary to maintain its

present level of services. Forty-nine percent of the College’s planned recurring 2015-16 operating funds

are received through State noncapital appropriations. State allocations for the 2015-16 fiscal years were

slightly higher than the 2014-15 fiscal year allocation. While the revenue projections for the State

continue to be positive, the demands for State resources continues to grow and, therefore, the College

does not anticipate a major increase or decrease in State appropriations in the future. The College

continues to designate reserves in excess of the statutory level to be utilized as needed for maintaining

operations during the upcoming fiscal year.

On-going efforts to develop new revenue sources and contain costs continue to serve the College well

in its commitment to the growth of educational programs, improved student access, and overall

excellence in service to its students and communities. The conservative budgetary stance taken by the

College provides a framework for a focused response in support of our educational mission and provides

financial stability in the face of limited economic growth and increased demand for State resources.

The component unit’s reliance on charitable giving is also affected by the general state of the economy

as well as by the health of the stock market and prospective donors’ perception of the benefiting

organization. Toward this latter factor, the College has historically enjoyed a very positive reputation in

the communities it serves. The continuation of the component unit’s history of very steady growth is

expected.




addressed to the Vice President for Administrative Affairs/CFO, Santa Fe College, 3000 Northwest

83rd Street, Gainesville, Florida, 32606.



Santa Fe College A Component Unit of the State of Florida



College Unit


Cash and Cash Equivalents 35,798,881$ 342,940$ Restricted Cash and Cash Equivalents 5,144,588 500,222 Investments 965,536 33,449 Restricted Investments - 1,434,387 Accounts Receivable, Net 4,095,321 18,338 Notes Receivable 4,436 - Due from Other Governmental Agencies 10,465,499 - Due from Component Unit 79,156 - Inventories 96,634 - Prepaid Expenses 62,341 - Deposits Receivable 5,000 - Risk Management Consortium:

Restricted Cash and Cash Equivalents 64,558,075 - Restricted Investments 1,989,809 -


Noncurrent Assets:Restricted Cash and Cash Equivalents 13,658,457 - Investments 7,347,034 457,392 Restricted Investments 3,030 5,135,160 Endowment Investments - 23,551,149 Depreciable Capital Assets, Net 77,066,509 7,619,224 Nondepreciable Capital Assets 7,485,411 6,183,113 Risk Management Consortium:

Restricted Deposit 4,709,257 - Restricted Investments 13,863,756 -


TOTAL ASSETS 247,398,730 45,275,374



Accounts Payable 1,682,965 33,124 Salary and Payroll Taxes Payable 4,433,549 - Retainage Payable 136,496 - Due to Other Governmental Agencies 3,502 - Unearned Revenue 5,221,786 - Deposits Held for Others 1,011,662 - Long-Term Liabilities - Current Portion:

Bonds Payable 725,000 - Compensated Absences Payable 877,710 - Net Pension Liability 418,766 -

Risk Management Consortium:Deposits Held for Others 66,547,884 -






College Unit


Bonds Payable 9,666,000 - Compensated Absences Payable 7,754,443 - Other Postemployment Benefits Payable 519,573 - Net Pension Liability 16,184,946 - Other Noncurrent Liabilities - 1,626,631 Risk Management Consortium:

Deposits Held in Custody 18,573,013 -

Total Noncurrent Liabilities 52,697,975 1,626,631



NET POSITIONNet Investment in Capital Assets 74,160,920 13,802,337 Restricted:


Expendable:Grants 2,011,613 - Loans 504,331 - Scholarships - 1,287,201 Capital Projects 23,194,184 - Debt Service 3,030 - Other - 3,853,263

Unrestricted 8,966,913 110,742







College Unit


Student Tuition and Fees, Net of Scholarship Allowances of $9,473,612 25,864,032$ -$ Federal Grants and Contracts 2,762,874 - State and Local Grants and Contracts 647,764 - Nongovernmental Grants and Contracts 422,582 412,887 Sales and Services of Educational Departments 1,115,105 - Auxiliary Enterprises 1,562,967 - Other Operating Revenues 450,750 513,539

Total Operating Revenues 32,826,074 926,426


Personnel Services 59,095,669 - Scholarships and Waivers 18,236,738 833,578 Utilities and Communications 2,398,453 - Contractual Services 6,494,968 - Other Services and Expenses 4,081,903 832,062 Materials and Supplies 7,848,294 - Depreciation 5,841,924 394,353


Operating Loss (71,171,875) (1,133,567)

NONOPERATING REVENUES (EXPENSES)State Noncapital Appropriations 36,078,418 - Federal and State Grants 25,652,848 - Gifts, Grants, and Contracts 1,920,419 - Investment Income 426,889 2,380,203 Gain on Disposal of Capital Assets 14,788 - Interest on Capital Asset-Related Debt (515,225) - Other Nonoperating Expenses (1,154) -



State Capital Appropriations 9,095,598 - Endowment Principal Additions - 598,730 Capital Grants, Contracts, Gifts, and Fees 4,411,364 -


Increase in Net Position 5,912,070 1,845,366











CASH FLOWS FROM OPERATING ACTIVITIESStudent Tuition and Fees, Net 26,400,952$ Grants and Contracts 3,591,457 Payments to Suppliers (18,458,716) Payments for Utilities and Communications (2,398,453) Payments to Employees (48,490,928) Payments for Employee Benefits (11,572,116) Payments for Scholarships (18,236,738) Loans Issued to Students (34,031) Collection on Loans to Students 37,234 Auxiliary Enterprises 1,441,538 Sales and Service of Educational Departments 1,115,105 Other Receipts 1,312,784 Risk Management Consortium: Other Payments (7,553,947)


CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESState Noncapital Appropriations 36,078,418 Federal and State Grants 25,652,848 Federal Direct Loan Program Receipts 24,585,318 Federal Direct Loan Program Disbursements (24,526,565) Gifts, Grants, and Contracts 1,920,419 Other Nonoperating Disbursements (1,154)


CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESState Capital Appropriations 1,139,597 Capital Grants and Gifts 4,091,401 Proceeds from Sale of Capital Assets 2,838 Purchases of Capital Assets (3,036,950) Principal Paid on Capital Debt (864,000) Interest Paid on Capital Debt (515,225)

Net Cash Provided by Capital and Related Financing Activities 817,661

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from Sales and Maturities of Investments 10,540,328 Purchases of Investments (10,517,264) Investment Income 398,500 Risk Management Consortium:

Proceeds from Sales and Maturities of Investments 18,928,345 Purchases of Investments (18,999,798)



Cash and Cash Equivalents, End of Year 119,160,001






Depreciation Expense 5,841,924 Changes in Assets, Liabilities, Deferred Outflows of Resources and Deferred Inflows of Resources:

Accounts Receivable, Net (247,473) Notes Receivable 3,203 Due from Other Governmental Agencies (55,875) Due from Component Unit 52,810 Inventories (28,551) Deposits Receivable (5,000) Prepaid Expenses 28,147 Accounts Payable 708,095 Salary and Payroll Taxes Payable 223,575 Due to Other Governmental Agencies (10,643) Unearned Revenue 426,144 Deposits Held for Others 134,557 Compensated Absences Payable (44,837) Other Postemployment Benefits Payable 29,906 Net Pension Liability (8,569,088) Deferred Outflows Related to Pensions (3,256,304) Deferred Inflows Related to Pensions 10,649,373 Risk Management Consortium: Deposits Held for Others (7,553,947)



28,389$

16,105$

4,000$

Unrealized gains on investments were recognized as increases toinvestment income on the statement of revenues, expenses, and changes innet position, but are not cash transactions for the statement of cash flows.

Donation of capital assets were recognized on the statement of revenues,expenses, and changes in net position, but are not cash transactions for thestatement of cash flows.

The State Board of Education issued $96,000 Capital Outlay Bonds, Series2014B, to refund $100,000 Capital Outlay Bonds, Series 2005A. The newdebt and defeasance of the old debt were recorded as an increase and adecrease, respectively, to bonds payable on the statement of net position;however, because the proceeds of the new debt were immediately placedinto an irrevocable trust for the defeasance of the old debt, the transactiondid not affect cash and cash equivalents.





Reporting Entity. The governing body of Santa Fe College, a component unit of the State of Florida, is

the College Board of Trustees. The Board of Trustees constitutes a corporation and is composed of eight

members appointed by the Governor and confirmed by the Senate. The Board of Trustees is under the

general direction and control of the Florida Department of Education, Division of Florida Colleges, and is

governed by law and State Board of Education rules. However, the Board of Trustees is directly

responsible for the day-to-day operations and control of the College within the framework of applicable

State laws and State Board of Education rules. Geographic boundaries of the College correspond with

those of Alachua and Bradford Counties.

Reported within the College’s financial statements are certain assets and liabilities of the Florida College

System Risk Management Financing Consortium (Consortium). The College is the fiscal agent for the

Consortium, which is the administrator of an Employee Benefit Plan and a Property and Casualty Plan

for participating Florida colleges. As fiscal agent, the College is responsible for receiving, disbursing,

and administering all moneys due to or payable from the Consortium and for personnel functions (hiring,

records maintenance, etc.) of the Consortium. The financial information reported for the Consortium

includes restricted cash and cash equivalents, restricted deposits, and investments with a corresponding

liability representing that the assets are held in custody by the College for the Consortium. Annual audits

of the Consortium and its financial activities are conducted by independent certified public accountants,

and are available at the College.










component units, the Santa Fe College Foundation, Inc. (Foundation), a legally separate entity, is

included within the College’s reporting entity as a discretely presented component unit and is governed








Foundation’s audited financial statements are available to the public and can be obtained from the


College. The financial data reported on the accompanying financial statements was derived from the

Foundation’s audited financial statements for the fiscal year ended December 31, 2014.



































include State noncapital appropriations; Federal and State grants; gifts, grants, and contracts; investment

income (net of unrealized gains or losses on investments); and revenues for capital construction projects.










the student or the third party making payment on behalf of the student. The College identifies within its

accounting system amounts paid for tuition and fees from grants, loans, or others providing financial aid

sources. The total amount of these payments is deducted from student tuition and fees.




Cash and Cash Equivalents. The amount reported as cash and cash equivalents for the College

consists of cash on hand, cash in demand accounts, and cash invested with the State Treasury Special

Purpose Investment Account (SPIA) and the State Board of Administration (SBA) Florida PRIME

investment pools. For reporting cash flows, the College and Consortium consider all highly liquid

investments with original maturities of 3 months or less to be cash equivalents. Under this definition, the

College and Consortium consider amounts invested in the State Treasury SPIA and SBA Florida PRIME

investment pools to be cash equivalents. College cash deposits are held in banks qualified as public

depositories under Florida law. All such deposits are insured by Federal depository insurance, up to

specified limits, or collateralized with securities held in Florida’s multiple financial institution collateral pool

required by Chapter 280, Florida Statutes. Cash and cash equivalents that are externally restricted to

make debt service payments, maintain sinking or reserve funds, or to purchase or construct capital or

other restricted assets are classified as restricted.

At June 30, 2015, the College and the Consortium reported as cash equivalents at fair value

$38,370,594 and $64,373,481, respectively, in the State Treasury SPIA investment pool representing

ownership of a share of the pool, not the underlying securities. The SPIA carried a credit rating of A+f by

Standard & Poor’s, had an effective duration of 2.67 years and fair value factor of 1.0013 at

June 30, 2015. The College relies on policies developed by the State Treasury for managing interest

rate risk or credit risk for this investment pool. Disclosures for the State Treasury SPIA investment pool

are included in the notes to financial statements of the State’s Comprehensive Annual Financial Report.

At June 30, 2015, the College and Consortium reported as cash equivalents $15,394,534 and

$1,790, respectively, in the Florida PRIME investment pool administered by the SBA pursuant to

Section 218.405, Florida Statutes. The investments in the Florida PRIME investment pool, which the

SBA indicates is a Securities and Exchange Commission Rule 2a7-like external investment pool, are

similar to money market funds in which shares are owned in the fund rather than the underlying

investments. The Florida PRIME investment pool carried a credit rating of AAAm by Standard & Poor’s

and had a weighted-average days to maturity (WAM) of 34 days as of June 30, 2015. A portfolio’s WAM

reflects the average maturity in days based on final maturity or reset date, in the case of floating-rate


instruments. WAM measures the sensitivity of the Florida PRIME investment pool to interest rate

changes. The investments in the Florida PRIME investment pool are reported at fair value, which is

amortized cost.

Capital Assets. College capital assets consist of land; artwork and artifacts; construction in progress;

buildings; other structures and improvements; and furniture, machinery, and equipment. These assets

are capitalized and recorded at cost at the date of acquisition or at estimated fair value at the date

received in the case of gifts and purchases of State surplus property. Additions, improvements, and other

outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs

and maintenance are expensed as incurred. The College has a capitalization threshold of $5,000 for

tangible personal property and $25,000 for buildings and other structures and improvements.

Depreciation is computed on the straight-line basis over the following estimated useful lives:


Other Structures and Improvements, Portables – 10 years




o Furniture, Pianos – 7 years

Capital Assets - Component Unit. Property and equipment acquisitions of the College’s component

unit are recorded at cost, if purchased. Contributed property and equipment are recorded at estimated

value, as determined by the donor or the component unit, at the date of receipt. Capitalized assets have

a useful life greater than one year and an original cost of $500 or greater. Buildings and equipment, not

held for investment, are depreciated using the straight-line method, based on a 40 year useful life for

buildings, 5 to 7 years useful life for equipment, and 10 years for film production costs. Land and buildings

held as investments are recorded at fair market value, based on comparable sales in the market, as of

December 31, 2014. Changes in fair value during the reporting period are recorded as investment income

or loss.

Noncurrent Liabilities. Noncurrent liabilities include bonds payable, compensated absences payable,

other postemployment benefits payable, and net pension liability that are not scheduled to be paid within

the next fiscal year.








2. Reporting Change














4. Restricted Deposit

Pursuant to a collateral agreement, the Consortium has a $4,709,257 collateral deposit held by an

insurance company (company) for workers’ compensation insurance claims. Although the Consortium

is required to reimburse the company for claims paid, the company is authorized to use the collateral to

pay any and all of the Consortium’s obligations owed under the agreement. The deposit is held by the

company in an interest bearing account; however, the deposit is exposed to custodial credit risk because

it is not covered by depository insurance and is uncollateralized. The Consortium does not have a policy

for custodial credit risk.

5. Investments

College and Consortium

The College’s Board of Trustees and the Consortium have adopted written investment policies providing

that surplus funds of the College and the Consortium shall be invested in those institutions and

instruments permitted under the provisions of Florida Statutes. Section 218.415(16), Florida Statutes,

authorizes the College to invest in the Florida PRIME investment pool administered by the State Board

of Administration (SBA); interest-bearing time deposits and savings accounts in qualified public

depositories, as defined by Section 280.02, Florida Statutes; direct obligations of the United States

Treasury; obligations of Federal agencies and instrumentalities; securities of, or interests in, certain

open-end or closed-end management type investment companies; Securities and Exchange Commission


agency; and other investments approved by the College’s Board of Trustees as authorized by law. State

Board of Education (SBE) Rule 6A-14.0765(3), Florida Administrative Code, provides that College loan,

endowment, annuity, and life income funds may also be invested pursuant to Section 215.47, Florida

Statutes. Investments authorized by Section 215.47, Florida Statutes, include bonds, notes, commercial

paper, and various other types of investments.



The general investment policy of both the College and the Consortium is to apply the prudent person

rule: investments are made with judgment and care, under circumstances then prevailing, which persons

of prudence, discretion, and intelligence would exercise in the management of their own affairs, not for


speculation, but for investment, considering the probable safety of their capital as well as the probable

income to be derived from the investment. In addition to the investments allowed by Section 218.415(16),

Florida Statutes, the investment policies of the College and the Consortium authorize investments in

repurchase agreements, corporate notes, and money market instruments. The Consortium also includes

asset-backed securities as an authorized investment.

The College’s and the Consortium’s investments at June 30, 2015, are reported at fair value, as follows:

ModifiedAverage

Fair DurationInvestment Type Value (in Years)

College

State Board of Administration Debt Service Accounts 3,030$ (1)United States Treasury Notes 4,509,127 2.070Obligations of United States Government-Sponsored Enterprises 2,176,722 1.360Federal Agency Collateralized Mortgage Obligations 59,736 1.520Corporate Note 329,838 2.510Mortgage-Backed Pass-Throughs 271,611 4.710Commercial Paper 898,657 0.370Money Market Mutual Funds 66,879 (2)

Total College Investments 8,315,600

Portfolio Modified Average Duration - College 1.800

Consortium

United States Treasury Notes 2,837,194 3.230Obligations of United States Government-Sponsored Enterprises 3,976,112 2.210

Federal Agency Collateralized Mortgage Obligations 655,709 9.240Foreign Notes 700,216 2.410Corporate Notes 5,397,116 3.000Mortgage-Backed Pass-Throughs 998,748 4.760Commercial Paper 1,248,000 0.380Money Market Mutual Funds 40,470 (2)

Total Consortium Investments 15,853,565

Portfolio Modified Average Duration - Consortium 2.980

Total Investments - College and Consortium 24,169,165$

Corporate Notes

Notes: (1) Investments in United States Treasury securities with maturity dates of 6 months or less.

(2) The College and Consortium opted to use the weighted-average maturity interest rate risk method for the money market mutual funds (37 days).


State Board of Administration (SBA) Debt Service Accounts







Report.

Other Investments. The College and the Consortium invested in various debt and equity securities and

money market mutual funds. The following risks apply to College and Consortium investments:

Interest Rate Risk: Interest Rate Risk is the risk that changing interest rates will adversely affect the fair

value of an investment. The investment policies of the College and the Consortium limit the maximum

average duration of their investment portfolios to no greater than 120 percent of the target benchmarks’

average duration:

College: Merrill Lynch 1-3 Year U.S. Treasury Index

Consortium: Merrill Lynch 1-5 Year U.S. Treasury Index

At June 30, 2015, the Merrill Lynch 1-3 and 1-5 Year U.S. Treasury Indexes’ modified average durations

were 1.87 and 2.70 years, respectively. Recognizing that market volatility is a function of duration, the

investment policies of the College and the Consortium also state that the portfolios are to be maintained

as short- to intermediary-term duration portfolios. The maximum duration of floating rate and individual

securities is 5 years from date of purchase. Furthermore, the investment policies are designed to limit

principal fluctuation so that no more than 20 percent of the College’s and 45 percent of the Consortium’s

portfolios have an effective duration greater than 3 years. An additional objective is to provide sufficient

liquidity and stability of principal, so that no less than 10 percent of the portfolios have an effective

duration of 1 year or less.


obligations. The investment policies of the College and the Consortium provide for the following regarding

credit risk:

Repurchase agreements must be fully collateralized at 102 percent by United States Treasuries.

Asset-backed securities must, at minimum, be rated “AAA” by either Standard & Poor’s or Moody’s Investors Service (Moody’s) for the Consortium; such securities are not an authorized investment for the College.

Money market instruments including, but not limited to, commercial paper, time deposits, and banker’s acceptances, at the time of purchase must, at a minimum, be rated “A1/P1” or the equivalent by Standard & Poor’s and/or Moody’s and all other nationally recognized credit rating organizations.

Corporate bonds and notes must have at least an “AAA” rating for the College by at least two of the following three credit rating organizations: Standard & Poor’s, Moody’s, or Fitch; and at least a “BBB” rating for the Consortium by two of the following three credit rating organizations: Standard & Poor’s, Moody’s, or Fitch.


Money market funds must be registered with the SEC with the highest credit quality rating from a nationally recognized rating company.

A total quality rating of 8 or higher for the College and 7 or higher for the Consortium must be maintained using the following scale.

o United States Government Fully Guaranteed 10

o Government-Sponsored Enterprises 9

o “AAA” – Rated Securities 8

o “AA” – Rated Securities 7

o “A” – Rated Securities 6

o “BBB” – Rated Securities (Consortium only) 5

As of June 30, 2015, using the above scale, the College’s and the Consortium’s total quality ratings were

9.24 and 7.98, respectively.

At June 30, 2015, the investments of the College and the Consortium in obligations of the United States

Government and Government-sponsored enterprises, Federal agency collateralized mortgage

obligations, corporate notes, mortgage-backed pass-throughs, commercial paper, money market mutual

funds, and foreign notes were rated by Standard & Poor’s as follows:

Fair Credit QualityInvestment Type Value Rating

CollegeObligations of United States Government

and Government-Sponsored Enterprises 6,685,849$ AA+

Federal Agency Collateralized Mortgage Obligations 59,736$ AA+

Corporate Note 329,838$ AAA

Mortgage-Backed Pass-Throughs 271,611$ AA+

Commercial Paper 898,657$ A-1 to A-1+

Money Market Mutual Funds 66,879$ AAAm

ConsortiumObligations of United States Government

and Government-Sponsored Enterprises 6,813,306$ AA+

Federal Agency Collateralized Mortgage Obligations 655,709$ AA+

Foreign Notes 700,216$ A+

Corporate Notes 5,397,116$ A- to AAA

Mortgage-Backed Pass-Throughs 998,748$ AA+

Commercial Paper 1,248,000$ A-1

Money Market Mutual Funds 40,470$ AAAm


Custodial Credit Risk: Custodial credit risk is the risk that, in the event of failure of the counterparty to a

transaction, the College will not be able to recover the value of investment or collateral securities that are

in the possession of an outside party. Investments purchased on behalf of the College pursuant to

Section 218.415, Florida Statutes, must be properly earmarked and: (1) if registered with the issuer or

its agents, the investment must be immediately placed for safekeeping in a location that protects the

College’s interest in the security; (2) if in a book entry form, the investment must be held for the credit of

the College by a depository chartered by the Federal Government, the State, or any other State or territory

of the United States that has a branch or principal place of business in this State, or by a national

association organized and existing under the laws of the United States that is authorized to accept and

execute trusts and is doing business in this State, and must be kept by the depository in an account

separate and apart from the assets of the financial institution; or (3) if physically issued to the holder but

not registered with the issuer or its agents, must be immediately placed for safekeeping in a secured

vault. Investment policies of the College and the Consortium require that all securities purchased be

properly designated as an asset of the College or the Consortium and held in safekeeping by a third-party

custodial bank or other third-party custodial institution. The College’s and the Consortium’s investments

are held by a safekeeping agent in the name of the College or the Consortium.


the College’s investment in a single issuer. The investment policies of the College and the Consortium

provide that a maximum of 5 percent of the portfolios may be invested in securities of a single issuer,

excluding United States Government, government agencies, and government-sponsored enterprise

securities.


Investments held by the College’s component unit (Foundation) at December 31, 2014, were reported at

fair value as follows:

Fair Investment Maturities (In Years)Investment Type Value Less than 1 1-2 3-5 6-10 More Than 10

Investment in Debt Obligations:Domestic Bonds 18,892,761$ 1,366,460$ 1,902,987$ 4,546,985$ 2,739,627$ 8,336,702$

Other Investments:Corporate Stocks 9,587,507 Limited Partnerships 1,018,338 Preferred Stocks 607,365 Mutual Funds 400,154 Municipals 100,194 Government Backed 5,218

Total Other Investments 11,718,776


There was a $1,215,611 unrealized gain in the fair value of investments during the fiscal year ended

December 31, 2014. The carrying value of investments at December 31, 2014, includes all material

changes in fair value, including unrealized gains and (losses) that occurred both during the current year

and previous years.


The Foundation invested in various debt and equity securities. To smooth distributions from the

aggregate portfolio, the Foundation uses the moving average method of determining year-to-year

spending. This policy provides for a more consistent and predictable spending for programs and it allows

the Foundation to design an investment strategy that is more consistent with a higher expected average

return over time. The following risks apply to the Foundation’s investments:

Interest Rate Risk: The Foundation’s investment policy does not limit debt obligation maturities.

However, the Foundation manages its exposure to fair value losses arising from increasing interest rates

through the segmented-time distribution method.

Credit Risk: The Foundation’s investment policy limits investments to investment grade securities

(BBB or higher) issued by banks, corporations, or the Federal Government. Those securities listed at

below investment grade have been downgraded subsequent to purchase. In each case the Foundation’s

Board of Directors, through its Finance Committee, has determined that the downgraded security has a

reasonable expectation of recovery and has elected to maintain its position. The policy provides that

20 percent of the total investment in securities may be made in preferred corporate securities.

Obligations of United States government agencies and instrumentalities, certificates of deposit, and

domestic equities do not require disclosure of credit quality. Domestic bonds held by the Foundation at

December 31, 2014, were rated by nationally recognized rating agencies (e.g., Moody’s Investors

Service) as follows:

CreditFair Quality

Investment Type Value Ratings

Domestic Bonds 510,193$ Aaa/AAA1,144,028 Aa/AA7,720,263 A/A7,888,812 Baa/BBB1,629,465 Not Rated

Total Domestic Bonds 18,892,761$

Custodial Credit Risk: The Foundation has no formal policy on custodial credit risk. However, all

investments are issued in the Foundation’s name.

Concentration of Credit Risk: Composition of the Foundation’s investment portfolio is limited by its

investment policy, which restricts investment in any one issue to no more than 5 percent of the value of

the entire portfolio.


Accounts receivable represent amounts for student fee deferments, Title IV Federal grant and State

Bright Futures program repayments due from students, agency billings, investment income, and

commissions and rent due from vendors under contracts for food, vending, and bookstore operations.

The receivables for students are reported net of a $580,381 allowance for doubtful accounts. Other

receivables are considered to be fully collectible.



This amount primarily consists of $9,611,244 of Public Education Capital Outlay allocations due from the

State for construction of College facilities and $389,744 of Federal grant allocations due from the Federal

Government primarily for Work Force Development, Federal Work-Study grants, and international state

department grants.

8. Due From Component Unit

The $79,156 reported as due from the component unit primarily consists of the remaining amounts owed

to the College by the Foundation for donor contributed and matching funds. The College’s financial

statements are reported for the fiscal year ended June 30, 2015. The College’s component unit’s financial

statements are reported for the calendar year ended December 31, 2014; accordingly, there is no amount

reported as due to the College by the Foundation.

9. Capital Assets

Capital assets activity of the College for the fiscal year ended June 30, 2015, is shown in the following

table:


Nondepreciable Capital Assets:Land 5,109,819$ 6,500$ -$ 5,116,319$ Artwork and Artifacts 18,000 - - 18,000 Construction in Progress 147,180 2,296,352 92,440 2,351,092

Total Nondepreciable Capital Assets 5,274,999$ 2,302,852$ 92,440$ 7,485,411$

Depreciable Capital Assets:Buildings 140,140,075$ -$ -$ 140,140,075$ Other Structures and Improvements 30,966,004 92,440 43,522 31,014,922 Furniture, Machinery, and Equipment 9,353,257 805,465 1,189,066 8,969,656

Total Depreciable Capital Assets 180,459,336 897,905 1,232,588 180,124,653

Less, Accumulated Depreciation:Buildings 63,666,703 3,390,163 - 67,056,866 Other Structures and Improvements 26,622,674 1,727,556 43,522 28,306,708 Furniture, Machinery, and Equipment 8,159,431 724,205 1,189,066 7,694,570

Total Accumulated Depreciation 98,448,808 5,841,924 1,232,588 103,058,144

Total Depreciable Capital Assets, Net 82,010,528$ (4,944,019)$ -$ 77,066,509$

Capital assets activity of the College’s component unit for the fiscal year ended December 31, 2014, is

shown below:



Nondepreciable Capital Assets:Land 3,622,393$ -$ -$ 3,622,393$ Art Collection 473,393 - - 473,393 Equipment 4,375 - - 4,375 Land Held for Investment 191,500 - - 191,500 Buildings Held for Investment 1,876,704 14,748 - 1,891,452

Total Nondepreciable Capital Assets 6,168,365$ 14,748$ -$ 6,183,113$

Depreciable Capital Assets:Buildings and Improvements 11,926,118$ 6,400$ -$ 11,932,518$ Film Costs 961,992 - - 961,992

Total Depreciable Capital Assets 12,888,110 6,400 - 12,894,510

Less, Accumulated Depreciation:Buildings and Improvements 4,496,137 298,154 - 4,794,291 Film Costs 384,796 96,199 - 480,995

Total Accumulated Depreciation 4,880,933 394,353 - 5,275,286

Total Depreciable Capital Assets, Net 8,007,177$ (387,953)$ -$ 7,619,224$


Unearned revenue includes student tuition and fees, grant revenue, and rent revenue received prior to

the fiscal year end related to subsequent accounting periods. As of June 30, 2015, the College reported

the following amounts as unearned revenue:

Description Amount

Student Tuition and Fees 5,090,471$ Grant Revenue 130,757 Rent Revenue 558



Long-term liabilities of the College at June 30, 2015, include bonds payable, compensated absences

payable, other postemployment benefits payable and net pension liability. Long-term liabilities activity

for the fiscal year ended June 30, 2015, is shown below:



Bonds Payable 11,255,000$ 96,000$ 960,000$ 10,391,000$ 725,000$ Compensated Absences Payable 8,676,990 832,603 877,440 8,632,153 877,710 Other Postemployment Benefits Payable 489,667 94,821 64,915 519,573 - Net Pension Liability (1) 25,172,800 4,672,910 13,241,998 16,603,712 418,766







The College had the following bonds payable outstanding at June 30, 2015:



SBE Capital Outlay Bonds:Series 2014B, Refunding 96,000$ 5.0 2017


Series 2006A 10,295,000 3.5 - 5.0 2027

Total 10,391,000$



Fiscal Year Ending June 30 Principal Interest Total

SBE Capital Outlay Bonds:2016 70,000$ 3,050$ 73,050$ 2017 26,000 650 26,650

Subtotal 96,000 3,700 99,700

Capital Improvement Revenue Bonds:2016 655,000 476,025 1,131,025 2017 680,000 449,825 1,129,825 2018 715,000 415,825 1,130,825 2019 750,000 380,075 1,130,075 2020 785,000 342,575 1,127,575 2021-2025 4,565,000 1,082,375 5,647,375 2026-2027 2,145,000 113,225 2,258,225

Subtotal 10,295,000 3,259,925 13,554,925

Total Bonds Payable 10,391,000$ 3,263,625$ 13,654,625$


The College’s portion of the bonds, $96,000, was used to refund $100,000 of outstanding SBE Capital

Outlay Bonds, Series 2005A. The SBE Capital Outlay Bonds, Series 2005A were called on

January 1, 2015. As a result of the refunding, the College had a debt service savings of $4,000.









absences liability, $877,710, is the amount expected to be paid in the coming fiscal year based upon the

College’s prior experience.




(Consortium).

Plan Description. The College contributes to an agent multiple-employer defined benefit plan (Plan)











annual report for the Plan, and the Plan is not included in the annual report of a public employee

retirement system or another entity.


the Board of Trustees has established and can amend Plan benefits and contribution rates. The College














obligation:

Description Amount







net OPEB obligation as of June 30, 2015, and for the two preceding fiscal years, were as follows:


Percentage ofAnnual


2012-13 120,978$ 4.5% 434,652$ 2013-14 90,145 39.0% 489,667 2014-15 94,821 68.5% 519,573


accrued liability for benefits was $874,575 and the actuarial value of assets was $0, resulting in an

unfunded actuarial accrued liability of $874,575 and a funded ratio of 0 percent. The covered payroll


















the calculations.






















programs in lieu of the FRS to certain members of the Senior Management Service Class employed by

the State and faculty and specified employees of State colleges.













FRS Pension Plan





Senior Management Service Class– Members in senior management level positions.





30 years of service except for members classified as special risk who are eligible for normal retirement



of creditable service except for members classified as special risk who are eligible for normal retirement


benefits at age 60 or at any age after 30 years of service. Employees enrolled in the Plan may include



her normal retirement date. The Plan provides retirement, disability, death benefits, and annual

cost-of-living adjustments to eligible participants.







pension benefits.










earned:




Special Risk Regular Service on and after October 1, 1974 3.00

























of June 30, 2013.







Total 4,992,868$ 10,649,373$






2016 (2,143,787)$ 2017 (2,143,787) 2018 (2,143,787) 2019 (2,143,787) 2020 423,325 Thereafter 126,996

Total (8,024,827)$


















Total 100.00%













(6.65%) (7.65%) (8.65%)

College's proportionate share of the net pension liability 26,328,030$ $6,155,532 (10,624,136)$




HIS Pension Plan












include Medicare.




pursuant to section 112.363, Florida Statues. The College contributed 100 percent of its statutorily







June 30, 2015, the College reported a net pension liability of $10,448,180 for its proportionate share of

the net pension liability. The current portion of the net pension liability is the College’s proportionate

share of benefit payments expected to be paid within one year, net of the College’s proportionate share

of the HIS Plan’s fiduciary net position available to pay that amount. The net pension liability was

measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability

was determined by an actuarial valuation as of July 1, 2014. The College’s proportionate share of the

net pension liability was based on the College’s 2013-14 fiscal year contributions relative to the total






sources:



Total 856,061$







2016 70,976$ 2017 70,976 2018 70,976 2019 70,976 2020 69,723 Thereafter 83,668

Total 437,295$





While an experience study has not been completed for the HIS Plan, the Florida Retirement System















(3.29%) (4.29%) (5.29%)











Investment Plan in lieu of the FRS defined-benefit plan. College employees already participating in the













Percent ofGross





















June 30, 2015.










unfunded actuarial liability of the FRS Pension Plan, and 0.01 percent to cover the administrative costs,







Senior Management Service Local Annuity Program. Section 121.055(1)(b)2, Florida Statutes, and









contributes 9.65 percent and employees contribute 3 percent of the employee’s salary to the Local

Annuity Program. Additionally, the employee may contribute, by salary deduction, an additional amount

not to exceed the percentage contributed by the College. These contributions are invested in the

companies selected by the employee to create a fund for the purchase of annuities at retirement.

The College’s contributions to the Local Annuity Program totaled $97,376 and employee contributions

totaled $13,951 for the 2014-15 fiscal year.


The College’s capitalized and noncapitalized construction commitments at June 30, 2015, are as follows:



Capitalized:Entrance Signs Projects:

Engineer 102,867$ 98,334$ 4,533$ Construction Manager 1,228,312 1,221,211 7,101

General Contractor 41,053 40,903 150 Renewable Energy Accessible Lab:

Engineer 75,440 70,260 5,180 Construction Manager 827,522 779,562 47,960

Construction EMT, Law Enforcement Labs & Library:Architect 600,654 5,512 595,142

Building C ADA Ramp: Architect 4,500 4,500 - Construction Manager 45,185 43,720 1,465

Building T Renovations: Architect 46,784 17,913 28,871

North and South Minor Repaving: Construction Manager 77,407 69,177 8,230

Total Capitalized Projects 3,049,724 2,351,092 698,632

NonCapitalized:Buildings A,B,E,F ADA Door Hardware Replacement:

General Contractor 90,395 80,611 9,784 Buildings HA Room 105 Renovations:

Architect 22,774 20,223 2,551 Construction Manager 299,837 131,000 168,837 General Contractor 37,387 1,795 35,592

Institute of Public Safety and Blount Center Renovation:Architect 19,900 11,940 7,960 Construction Manager 7,842 - 7,842

Buildings A,D,G,R,RA,V,Y Renovations: Engineer 12,000 9,600 2,400 General Contractor 24,914 5,493 19,421

Buildings R,V Restroom ADA Upgrades: Architect 43,197 41,095 2,102 Construction Manager 456,656 348,085 108,571 General Contractor 6,907 4,270 2,637

Buildings E,M,RA Roofing: Architect 5,873 5,791 82 Construction Manager 79,904 65,386 14,518

General Contractor 7,716 - 7,716 Building Y Water Intrusion Repairs: Construction Manager 107,023 40,931 66,092 Zoo Enclosure:

General Contractor 79,190 77,920 1,270 Zoo Exterior Painting:

General Contractor 37,975 - 37,975 Zoo Doors Replacement:

General Contractor 40,303 - 40,303 Projects Committed for less than $25,000 81,331 28,132 53,199

Total Noncapitalized Projects 1,461,124 872,272 588,852

Total Construction Contract Commitments 4,510,848$ 3,223,364$ 1,287,484$





coverage for these risks primarily through the Florida College System Risk Management Financing

Consortium (Consortium), which was created under authority of Section 1001.64(27), Florida Statutes,

by the boards of trustees of the Florida public colleges for the purpose of joining a cooperative effort to

develop, implement, and participate in a coordinated Statewide College risk management program. The



















Instruction 33,691,105$ Public Services 1,224,509 Academic Support 8,613,136 Student Services 11,525,348 Institutional Support 13,111,359 Operation and Maintenance of Plant 11,336,047 Scholarships and Waivers 18,300,863 Depreciation 5,841,924 Auxiliary Enterprises 353,658







Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

7/1/2009 -$ 504,898$ 504,898$ 0% 42,603,913$ 1.19%7/1/2011 - 913,031 913,031 0% 45,323,385 2.01%7/1/2013 - 874,575 874,575 0% 35,632,325 2.45%










(2) Covered-employee payroll includes defined benefit plan actives, investment plan members and members in DROP because total employer contributions are determined on a uniform basis (blended rate) as required by Part III of Chapter 121, Florida Statutes.








(2) Covered-employee payroll includes defined benefit plan actives, investment plan members and members in DROP because total employer contributions are determined on a uniform basis (blended rate) as required by Part III of Chapter 121, Florida Statutes.










(2) Covered employee payroll includes defined benefit plan actives, investment plan members, and members in DROP.


2015 (1) 2014 (1)







(2) Covered employee payroll includes defined benefit plan actives, investment plan members, and members in DROP.




The July 1, 2013, unfunded actuarial accrued liability of $874,575 decreased by 4.2 percent from the

July 1, 2011, liability of $913,031 primarily due to:

Demographic assumptions (rates of termination, retirement, disability, and mortality) were revised to be consistent with those used for the Florida Retirement System.




The conditions for retirement eligibility and rates of retirement were supplemented to accommodate those employees hired on or after July 1, 2011.










Phone: (850) 412-2722 Fax: (850) 488-6975











issued by the Comptroller General of the United States, the financial statements of Santa Fe College, a



the College’s basic financial statements, and have issued our report thereon dated March 17, 2016,

included under the heading INDEPENDENT AUDITOR’S REPORT. Our report includes a reference to

other auditors who audited the financial statements of the discretely presented component unit, as

described in our report on the College’s financial statements. This report does not include the results of

the other auditors’ testing of internal control over financial reporting or compliance and other matters that

are reported on separately by those auditors.















with governance.















No. 2016-053.













Auditor General

Report No. 2016-130

March 2016

SEMINOLE STATE COLLEGE OF FLORIDA


June 30, 2015

Financial Audit


During the 2014-15 fiscal year, Dr. E. Ann McGee served as President and the following individuals


Alex Setzer,a Chair from 8-18-14, Vice Chair to 8-17-14 Scott D. Howat,a Vice Chair from 8-18-14, Chair to 8-17-14 Jeffrey M. Bauer Wendy H. Brandon Amy L. Lockhart

Note: a Board member served beyond the end of term, 5-31-15.




The audit was supervised by Keith A. Wolfe, CPA.








SEMINOLE STATE COLLEGE OF FLORIDA

TABLE OF CONTENTS

Page No.

SUMMARY ........................................................................................................................................... i





















PRIOR AUDIT FOLLOW-UP ................................................................................................................ 47


SUMMARY


Our audit disclosed that the basic financial statements of Seminole State College of Florida (a component

unit of the State of Florida) were presented fairly, in all material respects, in accordance with prescribed






reported under Government Auditing Standards issued by the comptroller General of the United States.


Our audit objectives were to determine whether Seminole State College of Florida and its officers with



Established and implemented internal control over financial reporting and compliance with requirements that could have a direct and material effect on the financial statements;

Complied with the various provisions of laws, rules, regulations, contracts, and grant agreements that are material to the financial statements; and

Taken corrective actions for findings included in our report No. 2015-122.










AUDIT METHODOLOGY






Phone: (850) 412-2722 Fax: (850) 488-6975







We have audited the accompanying financial statements of Seminole State College of Florida, a



the College’s basic financial statements as listed in the table of contents.






error.
























our audit opinions.

Opinions


to above present fairly, in all material respects, the respective financial position of Seminole State College

of Florida and of its discretely presented component unit as of June 30, 2015, and the respective changes

in financial position and, where applicable, cash flows thereof for the fiscal year then ended, in


Emphasis of Matter








Other Matter








Pension Plan, and Notes To Required Supplementary Information, as listed in the table of contents,














of the Seminole State College of Florida’s internal control over financial reporting and on our tests of its

compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements and other

matters included under the heading INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT

AUDITING STANDARDS. The purpose of that report is to describe the scope of our testing of internal

control over financial reporting and compliance and the results of that testing, and not to provide an

opinion on the internal control over financial reporting or on compliance. That report is an integral part of

an audit performed in accordance with Government Auditing Standards in considering Seminole State

College of Florida’s internal control over financial reporting and compliance.









fiscal years ended June 30, 2015, and June 30, 2014, and its component unit, the Foundation for

Seminole State College of Florida, Inc., for the fiscal years ended June 30, 2015, and June 30, 2014.



1.3 percent, decrease as compared to the 2013-14 fiscal year, resulting primarily from increases in cash

and cash equivalents of $3.4 million, offset by a decrease of $6.1 million in capital assets, related to

depreciation. Total liabilities increased $13.9 million, or 74.4 percent, totaling $32.5 million at

June 30, 2015, as compared to $18.6 million at June 30, 2014. The increase is the result of the initial

recording of the pension liability, in conjunction with the implementation of Governmental Accounting

Standards Board (GASB) Statement No. 68. Additionally, the College reported deferred outflows of

resources totaling $5.7 million and deferred inflows of resources totaling $10.8 million related to the net

pension liability at June 30, 2015. See the notes to the financial statements for a comprehensive

discussion of the impact of recording this liability. Other liabilities decreased as a result of the payment

in the 2014-15 fiscal year of a $3 million special termination benefit that resulted from a voluntary

separation incentive program offered to employees and recorded as a liability during the 2013-14 fiscal

year. As a result, the College’s net position decreased by $21.8 million, resulting in a year-end balance

of $180.4 million.


4.8 percent increase compared to the 2013-14 fiscal year due mainly to increases in grants and auxiliary

revenue. Operating expenses totaled $111.9 million for the 2014-15 fiscal year, representing a decrease

of 3.7 percent as compared to the 2013-14 fiscal year due mainly to decreases in personnel costs

resulting from the voluntary separation incentive offered to employees during the 2013-14 fiscal year.


after deducting liabilities and deferred inflows of resources. As a result of the implementation of GASB

Statement No. 68, the 2014-15 fiscal year beginning net position of the College was adjusted by

$24.2 million, representing the net amount of the beginning net pension liability and the deferred outflows

of resources. The College’s comparative total net position by category for the fiscal years ended

June 30, 2015, and June 30, 2014, is shown in the following graph:



(In Thousands)










‐$50,000

$0

$50,000

$100,000

$150,000

$200,000



$172,166

$21,093

‐$12,836

$177,631

$16,848 $7,749

2015 2014

Operating Revenues

28%


63% Other Revenues9%


Seminole State College of Florida (Primary Institution) – Most of the programs and services generally associated with a college fall into this category, including instruction, public service, and support services.

Foundation for Seminole State College of Florida, Inc. (Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida.









resources, and net position of the College and its component unit as of June 30, 2015, and June 30, 2014,



(In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14

AssetsCurrent Assets 23,578$ 25,089$ 1,521$ 1,446$ Capital Assets, Net 176,972 183,053 1,493 894 Other Noncurrent Assets 17,508 12,724 17,445 16,552

Total Assets 218,058 220,866 20,459 18,892


LiabilitiesCurrent Liabilities 4,377 7,648 364 167 Noncurrent Liabilities 28,132 10,990 500 -



Net PositionNet Investment in Capital Assets 172,166 177,631 901 894 Restricted 21,093 16,848 16,657 16,893 Unrestricted (12,836) 7,749 2,037 938



Total assets decreased primarily from decreases in net capital assets, related to depreciation. This

decrease was partially offset by an increase in noncurrent restricted cash and cash equivalents held for


capital improvements. Total liabilities increased from the prior fiscal year primarily due to reporting the

net pension liability of $18 million for the defined benefit pension plans, in accordance with

GASB Statement No. 68, and decreases in other liabilities due to the payments of $3 million for special

termination benefits. The special termination benefits liability resulted from the College’s adoption of a

voluntary separation incentive program (VSIP) with participant contracts in place, and accrued, before

the close of the 2013-14 fiscal year. All VSIP amounts were paid to employees in the 2014-15 fiscal year

depending on their agreed upon employment termination date.





The following summarizes the activities of the College and its component unit for the 2014-15 and

2013-14 fiscal years:


(In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14


Operating Income (Loss) (80,340) (86,107) 300 (370) Net Nonoperating Revenues 72,715 73,663 570 1,945

Income (Loss) Before Other Revenues (7,625) (12,444) 870 1,575 Other Revenues 10,048 12,500 - -

Net Increase In Net Position 2,423 56 870 1,575





Note: (1) Adjustment to beginning net position of the College was due to the implementation of GASB Statement No. 68, which is a change in accounting principle that requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers' proportionate share of the net pension liability of the defined benefit pension plans.

Operating Revenues





The following summarizes the operating revenues by source for the College and its component unit that

were used to fund operating activities for the 2014-15 and 2013-14 fiscal years:


(In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14

Student Tuition and Fees, Net 23,789$ 23,963$ -$ -$ Grants and Contracts 5,296 4,316 - - Sales and Services of Educational Departments 47 49 - - Auxiliary Enterprises 2,359 1,715 - - Other 90 98 2,903 1,877





(In Thousands)

Grants and contracts revenues increased by $1 million, or 22.7 percent, primarily due to an increase in

participation in Quick Response Training Program grants.

Operating Expenses






$0 $10,000 $20,000 $30,000

Other





$98

$1,715

$49

$4,316

$23,963

$90

$2,359

$47

$5,296

$23,789

2014‐15 2013‐14



unit for the 2014-15 and 2013-14 fiscal years:


(In Thousands)

6-30-15 6-30-14 6-30-15 6-30-14

Personnel Services 62,091$ 68,597$ 558$ 526$ Scholarships and Waivers 20,608 21,215 1,687 1,404 Utilities and Communications 2,718 2,610 - - Contractual Services 3,212 2,806 231 209 Other Services and Expenses 8,264 8,642 85 66 Materials and Supplies 8,565 5,811 42 42 Depreciation 6,463 6,567 - -





(In Thousands)

College operating expense changes were the result of the following factors:

Personnel expenses decreased $6.5 million, or 9.5 percent, primarily due to higher than normal expense in the 2013-14 fiscal year resulting from the voluntary separation incentive program and savings in the 2014-15 fiscal year resulting from that same program.

$0 $20,000 $40,000 $60,000 $80,000

Depreciation






Personnel Services

$6,567

$5,811

$8,642

$2,806

$2,610

$21,215

$68,597

$6,463

$8,565

$8,264

$3,212

$2,718

$20,608

$62,091

2014‐15 2013‐14


Materials and supplies expenses increased $2.8 million, or 47.4 percent, over the prior fiscal year due to increased purchases of minor equipment and non-capitalized repair and renovation projects.




investment income are defined by GASB as nonoperating. Nonoperating expenses include capital




(In Thousands)

2014-15 2013-14

State Noncapital Appropriations 38,938$ 37,336$ Federal and State Student Financial Aid 33,602 36,224 Gifts and Grants 321 320 Investment Income 73 44 Other Nonoperating Revenues 21 10 Interest on Capital Asset-Related Debt (240) (271)


Nonoperating revenue and expenses decreased $0.9 million, or 1.3 percent, primarily as a result of

reductions in Federal Pell grant awards from decreased enrollment of students eligible for these awards.

Other Revenues




(In Thousands)

2014-15 2013-14


Total 10,048$ 12,500$

Changes in other revenues were primarily the result of a decrease in State capital appropriations for

general maintenance, repair, renovation, and remodeling projects.













(In Thousands)

2014-15 2013-14

Cash Provided (Used) by:Operating Activities (79,031)$ (72,888)$ Noncapital Financing Activities 72,825 73,871 Capital and Related Financing Activities 9,492 8,628 Investing Activities 79 58



Major sources of funds came from net student tuition and fees ($23.8 million), State noncapital

appropriations ($38.9 million); State capital appropriations ($7 million); Federal and State student

financial aid ($33.6 million), and Federal Direct Student Loan program receipts ($33.3 million). Major

uses of funds were for payments to employees ($50.9 million), disbursements to students for Federal

Direct Student Loans ($33.3 million), payments for scholarships ($20.6 million), payments to suppliers

($20.2 million), and payments for employee benefits ($16.3 million).

Changes in cash provided and used were the result of the following factors:

Operating activities used $6.1 million more cash compared to the 2013-14 fiscal year. Payments for employee benefits in the 2014-15 fiscal year included the payment of the voluntary separation incentive program offered to employees in the 2013-14 fiscal year. Payments to suppliers increased to pay for repair and renovation projects.

Noncapital financing cash flows decreased by $1 million primarily as a result of a decrease in Federal and State financial aid.

Cash flows from capital and related financing activities increased by $0.9 million because of a decrease in cash outflows for purchases of capital assets and an increase in cash inflows from State capital appropriations.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets


$77.2 million, for net capital assets of $177 million. Depreciation charges for the current fiscal year totaled

$6.5 million. The following table summarizes the College’s capital assets, net of accumulated




(In Thousands)


Land 32,365$ 32,365$ Construction in Progress 381 340 Buildings 137,592 142,004 Other Structures and Improvements 5,125 6,205 Furniture, Machinery, and Equipment 771 949 Assets Under Capital Lease 166 332 Leasehold Improvements 572 858



Debt Administration

As of June 30, 2015, the College had $4.8 million in outstanding bonds payable and a capital lease

payable, representing a decrease of $0.6 million, or 11.4 percent, from the prior fiscal year. The following

table summarizes the outstanding long-term debt by type for the fiscal years ended June 30, 2015, and

June 30, 2014:


(In Thousands)

2015 2014

Bonds Payable 4,635$ 5,085$ Capital Lease Payable 171 337

Total 4,806$ 5,422$

The State Board of Education (SBE) issues capital outlay bonds on behalf of the College. During the

2014-15 fiscal year, debt repayments totaled $0.6 million. Additional information about the College’s

long-term debt is presented in the notes to financial statements.


The College’s economic condition is closely tied to that of the State of Florida. As a result of redistribution

of State resources, the College anticipates a 13.1 percent increase in State funding for the 2015-16 fiscal

year. Changes in the unemployment rate and statutory revisions to the requirements for developmental

education correlate to changes in enrollment at the College. A modest change in the unemployment rate

is projected in Central Florida and is anticipated to result in modest changes in enrollment. In response,

the Board of Trustees elected not to increase the tuition rate for the Fall 2015 term and the College will

offer additional programs to attract new students and increase retention of students currently enrolled.

As a result, the College anticipates an increase of 1.7 percent in full-time equivalent enrollment in the

2015-16 fiscal year.


The Board designates reserves in excess of the 5 percent minimum statutory level in order to lessen the

possible impact of unforeseen changes in allocations or enrollments in future years.

The College received $11.5 million in State funding to begin construction of a new Student Center on the

Sanford/Lake Mary Campus that will allow the College to centralize student services into one facility. In

addition, the College continues to plan the development of more than 25 acres of land and 80,000 square

feet of newly acquired buildings adjacent to the existing Altamonte Springs Campus. Expansion of this

campus using a joint development strategy with the private sector will enable the College to meet future

demand for healthcare and other general educational program offerings. Facility improvements for the

next two years include expanding facilities for tutoring on the Sanford/Lake Mary Campus to improve

student success and initiating a joint development project with the private sector to replace the existing

gymnasium with a comprehensive Wellness Center on the Sanford/Lake Mary Campus.




addressed to the Executive Vice President/CFO, Seminole State College of Florida, 100 Weldon

Boulevard, Sanford, Florida 32773.



Seminole State College of Florida A Component Unit of the State of Florida



College Unit


Cash and Cash Equivalents 15,014,202$ 107,854$ Restricted Cash and Cash Equivalents 1,301,099 976,397 Accounts Receivable, Net 3,514,682 430,782 Notes Receivable, Net 13,665 - Due from Other Governmental Agencies 3,348,419 1,773 Due from Component Unit 202,902 - Prepaid Expenses 163,503 - Deposits 19,856 - Other Assets - 4,389


Noncurrent Assets:Restricted Cash and Cash Equivalents 17,480,405 - Investments - 932,385 Restricted Investments 27,253 14,564,633 Depreciable Capital Assets, Net 144,226,933 - Nondepreciable Capital Assets 32,745,393 1,492,702 Other Assets - 1,947,706


TOTAL ASSETS 218,058,312 20,458,621


TOTAL DEFERRED OUTFLOWS OF RESOURCES 5,659,621 -


Accounts Payable 1,171,632 12,744 Salary and Payroll Taxes Payable 1,562,489 - Retainage Payable 125,043 - Due to Other Governmental Agencies 2,622 - Due to College - 202,902 Unearned Revenue 39,148 - Deposits Held for Others 327,286 48,130 Long-Term Liabilities - Current Portion:

Bonds Payable 394,000 - Notes Payable - 100,000 Capital Lease Payable 170,913 - Compensated Absences Payable 150,287 - Net Pension Liability 433,590 -






College Unit


Bonds Payable 4,241,000 - Notes Payable - 500,000 Compensated Absences Payable 5,530,541 - Other Postemployment Benefits Payable 784,313 - Net Pension Liability 17,575,994 -

Total Noncurrent Liabilities 28,131,848 500,000



TOTAL DEFERRED INFLOWS OF RESOURCES 10,785,758 -

NET POSITIONNet Investment in Capital Assets 172,166,413 900,598 Restricted:



Unrestricted (12,835,678) 2,037,207







College Unit


Student Tuition and Fees, Net of Scholarship Allowances of $14,687,372 23,789,638$ -$ Federal Grants and Contracts 2,618,793 - State and Local Grants and Contracts 1,216,271 - Nongovernmental Grants and Contracts 1,460,527 - Sales and Services of Educational Departments 47,082 - Auxiliary Enterprises 2,359,114 - Other Operating Revenues 89,961 2,902,522



Personnel Services 62,090,630 557,441 Scholarships and Waivers 20,607,787 1,687,073 Utilities and Communications 2,718,414 - Contractual Services 3,212,270 231,372 Other Services and Expenses 8,264,328 84,877 Materials and Supplies 8,565,444 41,851 Depreciation 6,462,775 -


Operating Income (Loss) (80,340,262) 299,908

NONOPERATING REVENUES (EXPENSES)State Noncapital Appropriations 38,937,312 64,058 Federal and State Student Financial Aid 33,602,208 - Gifts and Grants 321,305 215,994 Investment Income 72,647 348,216 Net Loss on Investments - (58,089) Other Nonoperating Revenues 21,241 - Interest on Capital Asset-Related Debt (239,976) -

Net Nonoperating Revenues 72,714,737 570,179

Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (7,625,525) 870,087














CASH FLOWS FROM OPERATING ACTIVITIESStudent Tuition and Fees, Net 23,794,640$ Grants and Contracts 4,956,317 Payments to Suppliers (20,162,497) Payments for Utilities and Communications (2,629,587) Payments to Employees (50,866,519) Payments for Employee Benefits (16,292,192) Payments for Scholarships (20,603,750) Loans Issued to Students (15,838) Collection on Loans to Students 47,089 Auxiliary Enterprises 2,549,263 Sales and Service of Educational Departments 42,314 Other Receipts 149,255


CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESState Noncapital Appropriations 38,937,312 Federal and State Student Financial Aid 33,598,514 Federal Direct Loan Program Receipts 33,262,742 Federal Direct Loan Program Disbursements (33,262,742) Gifts and Grants Received for Other Than Capital or Endowment Purposes 321,305 Other Nonoperating Disbursements (31,987)


CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESState Capital Appropriations 6,999,408 Capital Grants, Contracts, Gifts, and Fees 3,343,236 Proceeds from Sale of Capital Assets 14,699 Purchases of Capital Assets (9,763) Principal Paid on Capital Debt and Lease (616,013) Interest Paid on Capital Debt and Lease (239,976)

Net Cash Provided by Capital and Related Financing Activities 9,491,591











Receivables, Net (222,996) Due From Other Governmental Agencies 90,993 Prepaid Expenses (34,877) Accounts Payable 30,757 Salaries and Payroll Taxes Payable (1,113,933) Unearned Revenue 21,053 Deposits Held for Others 43,320 Special Termination Benefits Payable (3,004,983) Compensated Absences Payable (18,720) Other Postemployment Benefits Payable 147,612 Net Pension Liability (8,868,746) Deferred Outflows of Resources Related to Pensions (3,009,256) Deferred Inflows of Resources Related to Pensions 10,785,758



10,000$

The State Board of Education (SBE) issued $170,000 in SBE Capital OutlayBonds, Series 2014B, to refund $40,000 in SBE Capital Outlay Bonds, Series2005A and $140,000 in SBE Capital Outlay Bonds, Series 2005B. The new debtand defeasance of the old debt were recorded as an increase and a decrease,respectively, to bonds payable on the statement of net position; however,because the proceeds of the new debt were immediately placed into anirrevocable trust for the defeasance of the old debt, the transaction did not affectcash and cash equivalents.





Reporting Entity. The governing body of Seminole State College of Florida, a component unit of the

State of Florida, is the College Board of Trustees. The Board of Trustees constitutes a corporation and

is composed of 5 members appointed by the Governor and confirmed by the Senate. The Board of





College correspond with those of Seminole County.










component units, the Foundation for Seminole State College of Florida, Inc. (Foundation), a legally

separate entity, is included within the College’s reporting entity as a discretely presented component unit

and is governed by a separate board.







Foundation’s audited financial statements are available to the public and can be obtained from the

Executive Vice President/CFO, Seminole State College, 100 Weldon Blvd., Sanford, Florida 32773. The

financial data reported on the accompanying financial statements was derived from the Foundation’s

audited financial statements for the fiscal year ended June 30, 2015.




































include State noncapital appropriations, Federal and State student financial aid, gifts and grants,

investment income and revenues for capital construction projects. Interest on capital asset-related debt

is a nonoperating expense.








the student or the third party making payment on behalf of the student. The College determines its


scholarship allowance by identifying those student transactions where the student’s classes were paid

by an applicable financial aid resource. To the extent that these resources are used to pay student

charges, the College records a scholarship allowance against tuition and fees revenues.





hand, cash in demand accounts, cash placed with the State Treasury Special Purpose Investment

Account (SPIA), and cash in a money market account. For reporting cash flows, the College considers

all highly liquid investments with original maturities of 3 months or less to be cash equivalents. Under

this definition, the College considers amounts invested in the State Treasury SPIA investment pool to be

cash equivalents. College cash deposits are held in banks qualified as public depositories under Florida

law. All such deposits are insured by Federal depository insurance, up to specified limits, or collateralized

with securities held in Florida’s multiple financial institution collateral pool required by Chapter 280,

Florida Statutes. Cash and cash equivalents that are externally restricted to make debt service payments,

maintain sinking or reserve funds, or to purchase or construct capital or other restricted assets are

classified as restricted.

At June 30, 2015, the College reported as cash equivalents at fair value $4,393,090 in the State Treasury


SPIA carried a credit rating of A+f by Standard & Poor’s and had an effective duration of 2.67 years and

fair value factor of 1.0013 at June 30, 2015. The College relies on policies developed by the State

Treasury for managing interest rate risk or credit risk for this investment pool. Disclosures for the State

Treasury SPIA investment pool are included in the notes to financial statements of the State’s


At June 30, 2015, the College also reported as cash equivalents at fair value $5,020,162 in a money

market account. The funds invested in the money market account carried a credit rating of AAAm by

Standard and Poor’s.


structures and improvements; furniture, machinery, and equipment; assets under capital leases;

leasehold improvements; and computer software. These assets are capitalized and recorded at cost at

the date of acquisition or at estimated fair value at the date received in the case of gifts and purchases

of State surplus property. Additions, improvements, and other outlays that significantly extend the useful

life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as

incurred. The College has a capitalization threshold of $5,000 for tangible personal property and

$25,000 for buildings and other structures and improvements. Depreciation is computed on the

straight-line basis over the following estimated useful lives:








Leasehold Improvements – 10 to 40 years

Assets Under Capital Lease – 5 years

Computer Software – 10 years

Noncurrent Liabilities. Noncurrent liabilities include bonds payable, compensated absences payable,

other postemployment benefits payable, and net pension liability that are not scheduled to be paid within

the next fiscal year.








2. Reporting Change













plans.



funds-unrestricted as show below. The deficit can be attributed to the full recognition of long-term


liabilities) in the current unrestricted funds.


Fund Net Position

Current Funds-Unrestricted (15,896,547)$ Auxiliary Funds 3,060,869

Total (12,835,678)$

5. Investments























Report.


Investments of the Foundation consist of corporate bonds, United States Treasury Bonds, United

States mortgage-backed securities, mutual funds, domestic and international equities, and exchange

traded/closed end funds. Investments held by the Foundation at June 30, 2015, are reported at fair

value as follows:


Average Credit Quality Fair Investment Maturity Rating Value

Corporate Bonds 6.48 years AAA - BB 2,357,802$ United States Treasury Bonds 8.24 years AAA 758,818 United States Mortgage-Backed Securities 17.70 years (1) 871,544 Mutual Funds N/A (2) 2,585,195 Domestic Equities N/A (2) 7,219,481 International Equities N/A (2) 1,647,936 ExchangeTraded/Closed End Funds N/A (2) 56,242

Total Foundation Investments 15,497,018$

Notes: (1) Disclosure of credit quality risk is not required for this investment type.

(2) Disclosure of interest rate risk, maturity date, and credit quality rating is not applicable to this investment type.

The goal of the Foundation’s investment program for endowments is set forth in the investment policy as

approved by the Foundation’s Board of Directors and Finance Committee. The objective is to provide a

steady growing income stream to support the Foundation’s mission while providing sufficient

reinvestment to protect the endowment from inflation. For investments of endowed funds, the investment

policy includes target allocations of 55 percent equities, with an allowable range of 15 to 70 percent,

(at least 15 percent of the total managed portfolio must be domestic; up to 25 percent of the total

managed portfolio can be international), a target allocation of 30 percent fixed income, with an allowable

range of 30 to 85 percent, and a target allocation of 15 percent alternative investments, with a maximum

of 25 percent. For investments of non-endowed funds, the investment policy includes target allocations

of 25 percent equities, with a maximum of 45 percent (up to 30 percent and 15 percent, respectively, of

the total managed portfolio can be domestic and international), a target allocation of 75 percent fixed

income, with an allowable range of 70 to 100 percent, and a target allocation of zero percent alternative

investments, with a maximum of 5 percent. Management believes the Foundation is in compliance with

its investment policy for the fiscal year ended June 30, 2015.

Interest Rate Risk: Interest rate risk is the risk that changes in interest rates of debt instruments will

adversely affect the fair value of an investment. The Foundation’s investment policy provides guidelines

such as duration maximums, and collateralization requirements to reduce its interest rate risk.


obligations. The table above summarizes the ratings of Foundation debt instruments using the higher of

Standard and Poor’s or Moody’s nationally recognized statistical rating organizations. The Foundation’s

investment policy requires investment grade bonds and commercial papers to be rated B+ and A1 or

better, respectively.

Custodial Credit Risk: Custodial credit risk is the risk that, in the event of a failure of the counterparty,

the Foundation will not be able to recover the value of its investments or collateral securities that are in

the possession of an outside party. The Foundation maintains investment accounts with stock brokerage

firms. The accounts contain cash and securities. Under the Securities Investor Protection Act, the

Foundation’s cash and securities held with qualified brokerage firms are insured up to $500,000 at

June 30, 2015. The Florida Security for Public Deposits Act (Act) establishes guidelines for qualification


and participation by banks and savings associations, procedures for the administration of the collateral

requirements, and characteristics of eligible collateral. Under the Act, Foundation deposits in qualified

public depositories are fully insured. The qualified public depository must pledge at least 50 percent of

the average daily balance for each month of all public deposits in excess of any applicable deposit

insurance. Additional collateral, up to a maximum of 125 percent, may be required, if deemed necessary

under the conditions set forth in the Act. Obligations pledged to secure deposits must be delivered to the

State Treasurer, or with the approval of the State Treasurer, to a bank, savings association, or trust

company provided a power of attorney is delivered to the Treasurer.


an entity’s investment in a single issuer. The Foundation’s investment policy requires diversification of

investments sufficient to reduce the potential of a single security, single sector of securities, or single

style of management having a disproportionate or significant impact on the portfolio. No more than

5 percent of Foundation investments can be invested with a single company and no more than 20 percent

of investments can be in one equity industry.


Accounts receivable represent amounts for student fee deferments; various student services provided by

the College; uncollected commissions for bookstore, food service and vending machine sales; payroll

receivables; and contract and grant reimbursements due from third parties. These receivables are

reported net of a $2,436,872 allowance for doubtful accounts.


The amount due from other governmental agencies consists of $2,361,481 of Public Education Capital

Outlay allocations due from the State for renovation, repair, and remodeling of College facilities, and

$986,938 due from Federal, State, and local agencies for student fees or other contractual obligations.

8. Due From and To Component Unit/College

The $202,902 reported as due from component unit consists of amounts owed to the College by the

Foundation for scholarships, student aid, and other contractual obligations.

9. Capital Assets




Nondepreciable Capital Assets:Land 32,364,540$ -$ -$ 32,364,540$ Construction in Progress 340,027 40,826 - 380,853

Total Nondepreciable Capital Assets 32,704,567$ 40,826$ $ 32,745,393$

Depreciable Capital Assets:Buildings 188,399,049$ -$ -$ 188,399,049$ Other Structures and Improvements 16,391,794 - - 16,391,794 Furniture, Machinery, and Equipment 9,046,774 341,129 255,124 9,132,779 Leasehold Improvements 3,097,419 - - 3,097,419 Assets Under Capital Lease 828,755 - - 828,755 Computer Software 3,595,938 - - 3,595,938

Total Depreciable Capital Assets 221,359,729 341,129 255,124 221,445,734

Less, Accumulated Depreciation:Buildings 46,394,853 4,411,707 - 50,806,560 Other Structures and Improvements 10,186,819 1,079,746 - 11,266,565 Furniture, Machinery, and Equipment 8,097,789 518,990 255,124 8,361,655 Leasehold Improvements 2,238,911 286,168 - 2,525,079 Assets Under Capital Lease 496,840 166,164 - 663,004 Computer Software 3,595,938 - - 3,595,938


Total Depreciable Capital Assets, Net 150,348,579$ (6,121,646)$ -$ 144,226,933$


Long-term liabilities of the College at June 30, 2015, include bonds payable, capital lease payable,

compensated absences payable, other postemployment benefits payable, and net pension liability.



Bonds Payable 5,085,000$ 170,000$ 620,000$ 4,635,000$ 394,000$ Capital Lease Payable 336,926 - 166,013 170,913 170,913 Compensated Absences Payable 5,699,549 639,304 658,025 5,680,828 150,287 Other Postemployment Benefits Payable 636,701 211,003 63,391 784,313 - Net Pension Liability (1) 26,878,330 4,567,377 13,436,123 18,009,584 433,590





SBE Capital Outlay Bonds. The SBE issues capital outlay bonds on behalf of the College. These bonds mature serially and are secured by a pledge of the College’s portion of the State-assessed


motor vehicle license tax and by the State’s full faith and credit. The SBE and the SBA administer the principal and interest payments, investment of debt service resources, and compliance with reserve requirements.




SBE Capital Outlay Bonds:Series 2006A 745,000 4 - 5 2026Series 2010A 220,000 4 - 5 2022Series 2014B, Refunding 170,000 2 - 5 2020

Florida Department of Education:Capital Improvement Revenue Bonds:

Series 2006A 3,500,000 3.5 - 5 2027

Total 4,635,000$



2016 394,000$ 215,103$ 609,103$ 2017 342,000 197,226 539,226 2018 327,000 180,426 507,426 2019 341,000 164,414 505,414 2020 361,000 148,008 509,008 2021-2025 2,035,000 457,375 2,492,375 2026-2027 835,000 43,356 878,356

Total 4,635,000$ 1,405,908$ 6,040,908$


On December 2, 2014, the SBE issued $129,880,000 of the SBE Capital Outlay Refunding Bonds, Series

2014B. The College’s portion of the bonds, $170,000, was used to call the remaining outstanding debt

of the College’s portion of the SBE Capital Outlay Bonds, Series 2005A and SBE Capital Outlay Bonds,

Series 2005B totaling $140,000 and $40,000, respectively. The SBE Capital Outlay Bonds, Series


2005A and Series 2005B were called on January 1, 2015. As a result of the refunding, the College had

a debt service savings of $12,820 and obtained an economic gain of $12,622.

Capital Lease Payable. Telecommunications equipment in the amount of $828,755 is being acquired

under a capital lease agreement. The stated interest rate is 2.91 percent. Future minimum payments

under the capital lease agreement and the present value of the minimum payments as of June 30, 2015,

are as follows:


2016 175,958$ Less, Amount Representing Interest 5,045

Present Value of Minimum Payments 170,913$










payments for employees in the final year of the Deferred Retirement Option Program.




(Consortium).

Plan Description. The College contributes to an agent multiple-employer, defined benefit plan (Plan)










report for the Plan, and the Plan is not included in the annual report of a public employee retirement


















obligation:

Description Amount







net OPEB obligation as of June 30, 2015, and for the two preceding fiscal years, were as follows:

Percentage ofAnnual


2012-13 236,134$ 25.2% 468,050$ 2013-14 209,878 19.6% 636,701 2014-15 211,003 30.0% 784,313






















the calculations.




return on invested assets, which is based upon the likely return of the assets if placed in trust to pay

benefits. The actuarial assumptions also included a payroll growth rate of 4 percent per year, an inflation































FRS Pension Plan





















pension benefits.











earned:






July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost of living adjustment


after July 1, 2011, there is an individually calculated cost of living adjustment. The annual cost of living



July 1, 2011, will not have a cost of living adjustment after retirement.



Percent of Gross SalaryClass Employee Employer (1)FRS, Regular 3.00 7.37FRS, Senior Management Service 3.00 21.14Deferred Retirement Option Program - Applicable to Members from All of the Above Classes 0.00 12.28FRS, Reemployed Retiree (2) (2)













of June 30, 2013.






Total 4,782,498$ 10,682,827$






2016 (2,180,932)$ 2017 (2,180,932) 2018 (2,180,932) 2019 (2,180,932) 2020 394,245 Thereafter 131,414

Total (8,198,069)$


















Total 100.00%










pension liability would be if it were calculated using a discount rate that is 1-percentage point lower

(6.65 percent) or 1-percentage point higher (8.65 percent) than the current rate:


(6.65%) (7.65%) (8.65%)






HIS Pension Plan











include Medicare.












proportionate share of the net pension liability. The current portion of the net pension liability is the

College’s proportionate share of benefit payments expected to be paid within one year, net of the

College’s proportionate share of the HIS Plan’s fiduciary net position available to pay that amount. The

net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate

the net pension liability was determined by an actuarial valuation as of July 1, 2014. The College’s

proportionate share of the net pension liability was based on the College’s 2013-14 fiscal year

contributions relative to the total 2013-14 fiscal year contributions of all participating members.

At June 30, 2014, the College’s proportionate share was 0.126571174 percent, which was a decrease of

0.001372949 from its proportionate share measured as of June 30, 2013.





Deferred Outflows Deferred Inflows Description of Resources of Resources

Change of Assumptions 421,126$ -$ Net difference between projected and actual earnings on HIS pension plan investments 5,681 - Changes in proportion and differences

between College HIS contributions andproportionate share of HIS contributions - 102,931

College contributions subsequent to the measurement date 450,316 -

Total 877,123$ 102,931$




resources and deferred inflows of resources related to pensions will be recognized in pension expense

as follows:


2016 53,019$ 2017 53,019 2018 53,019 2019 53,019 2020 51,599 Thereafter 60,201

Total 323,876$





















(3.29%) (4.29%) (5.29%)























Percent ofGross





















June 30, 2015.



























contributes 12.49 percent of the employee’s salary to the Local Annuity Program. The participants may

make contributions toward the Local Annuity Program by way of salary reduction or by deduction of a


employer.

There were 3 College participants during the 2014-15 fiscal year. The College’s contributions to the

Local Annuity Program totaled $34,942 and there were no employee contributions for the 2014-15 fiscal

year.


Leased assets and the related commitments are not reported on the College’s statement of net position.


resulting from these lease agreements are contingent upon future appropriations. The College has the

following operating lease commitments:

Land utilized for a Public Safety Training Center is leased under an operating lease that expires in 2052. Annual lease payments total $1 annually beginning in the 2014-15 fiscal year until the expiration of the lease term.

Computers and related equipment are leased under operating leases. These leases are for 3 and 4 years and the equipment is returned to the lessor upon expiration of the lease.

College vehicles, primarily used by the maintenance department and security department, are lease for 5 years under an operating lease that began in the 2008-09 fiscal year.

The College entered into a 5 year lease for multi-function printers that commenced in June 2015.

Future minimum lease commitments for these noncancelable operating leases are as follows:


2016 1,485,778$ 2017 920,240 2018 712,929 2019 388,938 2020 171,763 2021-2025 32




























Instruction 36,387,654$ Academic Support 7,968,648 Student Services 10,446,631 Institutional Support 15,583,477 Operation and Maintenance of Plant 13,591,087 Scholarships and Waivers 20,607,787 Depreciation 6,462,775 Auxiliary Enterprises 873,589







Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

7/1/2009 -$ 822,003$ 822,003$ 0% 34,652,305$ 2.4%7/1/2011 - 1,797,992 1,797,992 0% 35,398,952 5.1%7/1/2013 - 2,010,410 2,010,410 0% 35,618,504 5.6%










(2) Covered-employee payroll includes defined benefit plan actives, investment plan members, State college system optional retirement plan members, and members in DROP because total employer contributions are determined on a uniform basis (blended rate) as required by Part III of Chapter 121, Florida Statutes.




















2015 (1) 2014 (1)











The July 1, 2013, unfunded actuarial accrued liability of $2,010,410 was higher than the July 1, 2011,

liability of $1,797,992 due to:

Demographic assumptions (rates of termination, retirement, disability, and mortality) were revised to be consistent with those used by the Florida Retirement System.




The conditions for retirement eligibility and rates of retirement were supplemented to accommodate those employees hired on or after July 1, 2011.

2. Schedule of Net Pension Liability And Schedule of Contributions – Florida Retirement System Pension Plan


3 percent to 2.60 percent, the real payroll growth assumption was decreased from 1 percent to 0.65

percent, and the overall payroll growth rate assumption was decreased from 4 percent to 3.25 percent.

The long-term expected rate of return decreased from 7.75 percent to 7.65 percent.

3. Schedule of Net Pension Liability And Schedule of Contributions – Health Insurance Subsidy Pension Plan




Phone: (850) 412-2722 Fax: (850) 488-6975











issued by the Comptroller General of the United States, the financial statements of Seminole State

College of Florida, a component unit of the State of Florida, and its discretely presented component unit

as of and for the fiscal year ended June 30, 2015, and the related notes to the financial statements, which





















with governance.















No. 2016-101.













PRIOR AUDIT FOLLOW-UP

The College had taken corrective actions for the finding included in our report No. 2015-122.


Auditor General

Report No. 2016-124

March 2016

ST. PETERSBURG COLLEGE


June 30, 2015

Financial Audit


During the 2014-15 fiscal year, Dr. William D. Law, Jr., served as President and the following


Robert J. Fine, Jr., Chair from 8-19-14, Vice Chair to 8-18-14 Jeffrey Dale Oliver, Vice Chair from 8-19-14

Deveron M. Gibbons, Chair to 8-18-14 Bridgette Bello Lauralee Westine




The team leader was Janet N. Case, CPA, and the audit was supervised by Karen J. Collington, CPA.








ST. PETERSBURG COLLEGE

TABLE OF CONTENTS

Page No.

SUMMARY ........................................................................................................................................... i






















SUMMARY


Our audit disclosed that the basic financial statements of St. Petersburg College (a component unit of

the State of Florida) were presented fairly, in all material respects, in accordance with prescribed financial

reporting standards.







Our audit objectives were to determine whether St. Petersburg College and its officers with administrative

and stewardship responsibilities for College operations had:













AUDIT METHODOLOGY






Phone: (850) 412-2722 Fax: (850) 488-6975







We have audited the accompanying financial statements of St. Petersburg College, a component unit of

the State of Florida, and its aggregate discretely presented component units as of and for the fiscal year

ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the







error.



audit the financial statements of the aggregate discretely presented component units, which represent

100 percent of the transactions and account balances of the aggregate discretely presented component

units’ columns. Those statements were audited by other auditors whose reports have been furnished to

us, and our opinion, insofar as it relates to the amounts included for the aggregate discretely presented

component units, is based solely on the reports of the other auditors. We conducted our audit 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

General of the United States. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material misstatement.













our audit opinions.

Opinions

In our opinion, based on our audit and the reports of the other auditors, the financial statements referred

to above present fairly, in all material respects, the respective financial position of St. Petersburg College

and of its aggregate discretely presented component units as of June 30, 2015, and the respective

changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended, in


Emphasis of Matter








Other Matter








Pension Plan, and Notes To Required Supplementary Information as listed in the table of contents,














of St. Petersburg College’s internal control over financial reporting and on our tests of its compliance with








performed in accordance with Government Auditing Standards in considering St. Petersburg College’s

internal control over financial reporting and compliance.









fiscal years ended June 30, 2015, and June 30, 2014, and its component units, St. Petersburg College

Foundation, Inc., The Leepa-Rattner Museum of Art, Inc., and the Institute for Strategic Policy Solutions,

Inc., for the fiscal years ended March 31, 2015, and March 31, 2014. Financial activity for the

St. Petersburg College Alumni Association, Inc., is reported for the period April 1, 2014, through

September 19, 2014.



2.7 percent, decrease from the 2013-14 fiscal year, resulting primarily from decreases in cash and cash

equivalents of $7.1 million and in investments of $6.1 million. This was offset by an increase in capital

assets of $2.2 million and net amounts receivable (accounts receivable, net and due from other

governmental agencies) of $1.4 million. Deferred outflows of resources at June 30, 2015, totaled

$11 million. Liabilities increased by $31 million, or 52.9 percent, totaling $89.5 million at June 30, 2015,

as compared to $58.5 million at June 30, 2014. Deferred inflows of resources at June 30, 2015, totaled

$18.7 million. As a result, the College’s net position decreased by $48.3 million during the 2014-15 fiscal

year, reaching a year-end balance of $247.2 million. The increases in liabilities, deferred outflows and

inflows of resources, and the decrease in net position were largely impacted by the adoption of

Governmental Accounting Standards Board’s (GASB) Statement No. 68, Accounting and Financial

Reporting for Pensions, an amendment of GASB Statement No. 27. This accounting standard requires

the College, as a participating employer in the Florida Retirement System (FRS), to recognize its

proportionate share of the collective net pension liabilities of the FRS cost-sharing multiple-employer

defined benefit plans. Changes in liabilities are recognized through the Statement of Revenues,

Expenses, and Changes in Net Position, or reported as deferred outflows or inflows of resources on the

Statement of Net Position, depending on the nature of the change. The initial adoption also resulted in

an adjustment to beginning net position of $42.3 million.


2 percent increase compared to the 2013-14 fiscal year. Operating expenses totaled $215.5 million for

the 2014-15 fiscal year, representing an increase of 3.6 percent as compared to the 2013-14 fiscal year.






(In Thousands)










‐$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000


Restricted Unrestricted Total Net Position

$250,489

$26,366

($29,616)

$247,239$246,352

$36,800$12,409

$295,561

2015 2014



69%

Other Revenues6%


St. Petersburg College (Primary Institution) – Most of the programs and services generally associated with a college fall into this category, including instruction, public service, and support services.

St. Petersburg College Foundation, Inc. (Foundation); The Leepa-Rattner Museum of Art, Inc. (Museum); the Institute for Strategic Policy Solutions, Inc. (Institute); and the St. Petersburg College Alumni Association, Inc., (Association) (Component Units) – Although legally separate, these component units are important because the College is financially accountable for them, as the College reports its financial activities to the State of Florida. On August 7, 2014, the Association voted to dissolve its incorporation and the St. Petersburg College Board approved the resolution on August 19, 2014. A Memorandum of Understanding between the Association and the Foundation was approved and all Association activities and account balances were transferred to the Foundation. Transactions reported for the Association are for the period of April 1, 2014, through September 19, 2014.


One of the most important questions asked about the College’s finances is, “Is St. Petersburg College,

as a whole, better off or worse off as a result of the year’s activities?” The statement of net position

reflects the assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the

College, using the accrual basis of accounting, and presents the financial position of the College at a

specified time. Assets, plus deferred outflows of resources, less liabilities, less deferred inflows of

resources, equals net position, which is one indicator of the College’s current financial condition. The

changes in net position that occur over time indicate improvement or deterioration in the College’s

financial condition.


resources, and net position of the College and its component units for the respective fiscal years ended,




(In Thousands)

6-30-15 6-30-14 03-31-15 03-31-14

AssetsCurrent Assets 45,398$ 45,140$ 33,663$ 32,373$ Capital Assets, Net 278,498 276,271 Other Noncurrent Assets 20,633 32,693 28,471 27,922

Total Assets 344,529 354,104 62,134 60,295







Increase (Decrease) in Net Position (48,322)$ -16.3% 2,123$ 3.5%

College Component Units





The following summarizes the activities of the College and its component units for the respective fiscal

years ended:



(In Thousands)

6-30-15 6-30-14 3-31-15 (1) 3-31-14


Operating Loss (163,412) (156,851) (1,674) (1,376) Net Nonoperating Revenues 145,200 139,564 3,467 7,643

Income (Loss) Before Other Revenues (18,212) (17,287) 1,793 6,267 Other Revenues 12,198 11,560 330 639

Net Increase (Decrease) In Net Position (6,014) (5,727) 2,123 6,906





Notes: (1) Amounts are for the fiscal year ended March 31, 2015, for the St. Petersburg College Foundation, Inc., The Leepa-Rattner Museum of Art, Inc., and the Institute for Strategic Policy Solutions, Inc. The St. Petersburg College Alumni Association, Inc., was dissolved by the Board during the 2014-15 fiscal year, and operations were transferred to the St. Petersburg College Foundation, Inc.

(2) The adjustment to beginning net position of the College was due to the implementation of GASB Statement No. 68, which is a change in accounting principle that requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers' proportionate share of the net pension liability of the defined benefit pension plans.

Operating Revenue




The following summarizes the operating revenues for the College and its component units by source that




(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14

Student Tuition and Fees, Net 42,195$ 41,191$ -$ -$ Grants and Contracts 3,265 3,274 - - Sales and Services of Educational Departments 3,071 3,216 - - Auxiliary Enterprises 3,434 3,336 - - Other 156 105 3,565 3,138





(In Thousands)

College operating revenue increased by $1 million, or 2 percent. This can be primarily attributed to an

increase of $1 million in net tuition and fees due to a $1 per credit hour increase in the student learning

access fee.

Operating Expenses







units for the respective fiscal years ended:

$0 $25,000 $50,000

Other





$105

$3,336

$3,216

$3,274

$41,191

$156

$3,434

$3,071

$3,265

$42,195

2014‐15 2013‐14



(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14

Personnel Services 125,971$ 124,302$ -$ -$ Scholarships and Waivers 35,112 32,661 2,960 2,598 Utilities and Communications 6,536 6,327 - - Contractual Services 12,602 12,030 62 51 Other Services and Expenses 8,781 8,659 2,186 1,832 Materials and Supplies 15,860 13,797 31 33 Depreciation 10,671 10,197 - -





(In Thousands)

College operating expenses increased by $7.6 million from the 2013-14 fiscal year, primarily from

increases in personnel services of $1.7 million, scholarships and waivers of $2.5 million, and materials

and supplies of $2.1 million. The increase in personnel services was primarily due to a one time incentive

payment. The increase in scholarships and waivers is primarily due to an increase in Federal Pell Grant

awards and the implementation of a tuition waiver for veterans and undocumented students mandated

by Florida Statutes beginning in the 2014-15 fiscal year. The increase in materials and supplies was

$0 $70,000 $140,000

Depreciation






Personnel Services

$10,197

$13,797

$8,659

$12,030

$6,327

$32,661

$124,302

$10,671

$15,860

$8,781

$12,602

$6,536

$35,112

$125,971

2014‐15 2013‐14


primarily due to the purchase of new equipment upon completion of the Midtown construction project and

other renovation projects updating furniture and equipment.








(In Thousands)

2014-15 2013-14

State Noncapital Appropriations 69,507$ 67,507$ Federal and State Student Financial Aid 61,228 58,909 Gifts and Grants 15,342 13,692 Investment Income 310 746 Other Nonoperating Revenues 30 19 Gain on Disposal of Capital Assets 34 - Interest on Capital Asset-Related Debt (1,251) (1,309)


When compared to the prior fiscal year, College net nonoperating revenues increased by $5.6 million, or

4 percent. The change in revenue was primarily due to an increase in State noncapital appropriations of

$2 million and Federal and State student financial aid of $2.3 million due to an increase in the number of

students receiving student financial aid. In addition, gifts and grants increased $1.7 million, largely

attributable to additions of Federal grants to bolster the workforce in Florida. Investment Income

decreased by $0.4 million.

Other Revenues




(In Thousands)

2014-15 2013-14


Total 12,198$ 11,560$

Changes in other revenues were the result of State capital appropriations decreasing by $0.2 million

offset by an increase in capital grants, contracts, gifts, and fees of $0.8 million primarily due to an increase

in student capital improvement fees in the 2014-15 fiscal year.




major sources and uses of cash and cash equivalents. Cash flows from operating activities show the net

cash used by the operating activities of the College. Cash flows from capital financing activities include

all plant funds and related long-term debt activities. Cash flows from investing activities show the net

source and use of cash related to purchasing or selling investments, and earning income on those

investments. Cash flows from noncapital financing activities include those activities not covered in other

sections. The statement of cash flows also helps users assess:

An entity’s ability to generate future net cash flows.

Its ability to meet its obligations as they come due.

Its need for external financing.



(In Thousands)

2014-15 2013-14

Cash Provided (Used) by:Operating Activities (153,931)$ (144,165)$ Noncapital Financing Activities 145,989 139,685 Capital and Related Financing Activities (5,525) 1,019 Investing Activities 6,392 747

Net Decrease in Cash and Cash Equivalents (7,075) (2,714) Cash and Cash Equivalents, Beginning of Year 46,167 48,881


Major sources of cash inflows came from Federal Direct Student Loan program receipts ($81.6 million),

State noncapital appropriations ($69.5 million), Federal and State student financial aid ($61.2 million),

net student tuition and fees ($42.3 million), noncapital gifts and grants ($15.2 million), proceeds from

sales and maturities of investments ($8.7 million), and capital gifts and grants ($7.8 million). Major uses

of cash were disbursements to students for Federal Direct Student Loans ($81.6 million), payments to

employees ($100.6 million), payments to suppliers ($37.2 million), payments for scholarships

($35.1 million), payments for employee benefits ($27 million), and purchase of capital assets

($11.6 million).

The College’s overall cash and cash equivalents decreased in the 2014-15 fiscal year by $7.1 million, or

15.3 percent from the 2013-14 fiscal year. Changes in cash and cash equivalents were the result of the

following factors:

The increase of $9.8 million in cash used by operating activities is partly a result of an increase in cash outflows of $4.1 million in payments to suppliers for materials, supplies, and services and a $4.1 million increase in payments to employees and employee benefits, primarily due to a one time incentive payment. In addition, there was a $2.5 million increase in payments for scholarships offset by an increase in cash inflows of $0.9 million from student tuition and fees.


Increases in noncapital financing net cash inflows of $6.3 million were primarily due to the $2 million increase in State noncapital appropriations, a $2 million increase in gifts and grants received for other than capital or endowment purposes, and a $2.3 million increase in Federal and State student financial aid.

Cash used by capital and related financing activities increased by $6.5 million primarily due to a $5.9 million increase in purchases of capital assets. In addition, there was a $1.6 million decrease in State capital appropriations. There were cash inflows of $0.8 million due to an increase in capital grants and gifts.

Cash provided by investing activities increased by $5.6 million in the 2014-15 fiscal year due to an increase in proceeds from sales and maturities of investments and a decrease in the purchase of new investments.


Capital Assets




depreciation, at June 30, 2015:


(In Thousands)

Beginning EndingCapital Assets Balance Additions Reductions Balance

Land 25,603$ -$ -$ 25,603$ Construction in Progress 4,872 731 4,287 1,316 Buildings 325,387 14,082 - 339,469 Other Structures and Improvements 12,414 65 - 12,479 Furniture, Machinery, and Equipment 19,972 1,258 1,401 19,829 Assets Under Capital Leases 5,410 1,049 - 6,459

Total 393,658 17,185 5,688 405,155

Less, Accumulated Depreciation:Buildings 86,237 8,308 - 94,545 Other Structures and Improvements 11,175 177 - 11,352 Furniture, Machinery, and Equipment 17,388 931 1,401 16,918 Assets Under Capital Leases 2,587 1,255 - 3,842

Total Accumulated Depreciation 117,387 10,671 1,401 126,657

Capital Assets, Net 276,271$ 6,514$ 4,287$ 278,498$



During the 2014-15 fiscal year, the College had $12.9 million in expenses for construction of the Midtown

Center and other small projects, capital leases, and various other equipment. The College has


$4.9 million in construction commitments at June 30, 2015, primarily related to construction of the

Bay Pines Center.

Amount



(In Thousands)


statements.

Debt Administration

As of June 30, 2015, the College had $28 million in long-term debt outstanding. The following table


June 30, 2014:


(In Thousands)

2015 2014

SBE Capital Outlay Bonds 2,685$ 2,950$ Florida Department of Education Capital Improvement Revenue Bonds 22,005 23,255 Notes Payable 702 889 Capital Leases Payable 2,617 2,824

Total 28,009$ 29,918$

During the 2014-15 fiscal year, the College entered into capital leases for network server equipment

totaling $1 million. Long-term debt repayments during the 2014-15 fiscal year totaled $3 million.

Additional information about the College’s long-term debt is presented in the notes to financial

statements.



economic growth and increased demand for State resources, only a modest increase in general State

appropriations is anticipated in the 2015-16 fiscal year. The St. Petersburg College Board of Trustees

(Board) voted not to raise the tuition rate for the 2015-16 fiscal year for Associate and Baccalaureate

degree programs. The Board approved the increase of the Capital Improvement fee of $2 per credit

hour. The Capital Improvement fee is used primarily for repair and renovation projects for College

facilities.





addressed to Theresa K. Furnas, CPA, Associate Vice President for Financial and Business Services,

St. Petersburg College, P.O. Box 13489, St. Petersburg, FL 33733.



St. Petersburg College A Component Unit of the State of Florida



College Units


Cash and Cash Equivalents 18,131,837$ 1,385,642$ Restricted Cash and Cash Equivalents 14,119,410 - Investments - 32,212,747 Accounts Receivable, Net 2,007,504 1,985 Due from Other Governmental Agencies 10,785,021 - Due from Component Units/College 44,408 53,160 Inventories 152,257 9,757 Prepaid Expenses 156,080 - Other Assets 1,182 -


Noncurrent Assets:Restricted Cash and Cash Equivalents 6,841,223 - Investments 6,345,999 250,707 Restricted Investments 7,445,527 27,090,093 Loans and Notes Receivable, Net - 1,075,187 Depreciable Capital Assets, Net 251,579,774 - Nondepreciable Capital Assets 26,918,353 - Other Assets - 54,250


TOTAL ASSETS 344,528,575 62,133,528



Accounts Payable 2,393,626 5,409 Salary and Payroll Taxes Payable 1,106,641 - Retainage Payable 497,705 - Unearned Revenue 961,494 43,403 Estimated Insurance Claims Payable 1,458,824 - Deposits Held for Others 6,779,949 - Long-Term Liabilities - Current Portion:

Bonds Payable 1,585,000 - Note Payable 187,770 - Capital Leases Payable 1,184,464 - Compensated Absences Payable 1,152,485 - Net Pension Liability 890,595 -






College Units


Bonds Payable 23,105,000 - Note Payable 514,078 - Capital Leases Payable 1,433,225 - Compensated Absences Payable 10,372,362 - Other Postemployment Benefits Payable 4,491,568 - Net Pension Liability 31,411,915 -






Expendable:Grants and Loans 6,970,168 22,736,849 Scholarships 143,888 9,848,119 Capital Projects 18,915,456 - Debt Service 337,198 -

Unrestricted (29,616,432) 2,069,115

Total Net Position 247,238,868$ 62,084,716$






College Units


Student Tuition and Fees, Net of Scholarship Allowances of $33,551,931 42,194,636$ -$ Federal Grants and Contracts 517,317 - State and Local Grants and Contracts 1,746,981 - Nongovernmental Grants and Contracts 1,000,593 - Sales and Services of Educational Departments 3,070,554 - Auxiliary Enterprises 3,434,449 - Other Operating Revenues 156,717 3,564,495



Personnel Services 125,970,610 - Scholarships and Waivers 35,111,496 2,959,944 Utilities and Communications 6,536,432 - Contractual Services 12,602,025 61,954 Other Services and Expenses 8,781,183 2,185,745 Materials and Supplies 15,859,999 31,271 Depreciation 10,671,039 -


Operating Loss (163,411,537) (1,674,419)

NONOPERATING REVENUES (EXPENSES)State Noncapital Appropriations 69,507,154 - Federal and State Student Financial Aid 61,228,292 - Gifts and Grants 15,341,510 77,143 Investment Income 310,277 3,389,373 Other Nonoperating Revenues 29,603 - Gain on Disposal of Capital Assets 34,001 - Interest on Capital Asset-Related Debt (1,250,670) -



State Capital Appropriations 4,433,484 - Capital Grants, Contracts, Gifts, and Fees 7,764,186 - Additions to Endowments - 330,180


Increase (Decrease) in Net Position (6,013,700) 2,122,277

Net Position, Beginning of Year 295,561,213 59,962,439 Adjustments to Beginning Net Position (42,308,645)










CASH FLOWS FROM OPERATING ACTIVITIESStudent Tuition and Fees, Net 42,294,346$ Grants and Contracts 3,516,717 Payments to Suppliers (37,192,561) Payments for Utilities and Communications (6,536,432) Payments to Employees (100,569,533) Payments for Employee Benefits (27,009,598) Payments for Scholarships (35,111,496) Auxiliary Enterprises 3,450,557 Sales and Service of Educational Departments 3,070,554 Other Receipts 156,717


CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESState Noncapital Appropriations 69,507,154 Federal and State Student Financial Aid 61,228,292 Federal Direct Loan Program Receipts 81,643,705 Federal Direct Loan Program Disbursements (81,643,705) Gifts and Grants Received for Other Than Capital or Endowment Purposes 15,224,107 Other Nonoperating Receipts 29,603


CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESState Capital Appropriations 2,496,779 Capital Grants and Gifts 7,764,186 Purchases of Capital Assets (11,577,425) Principal Paid on Capital Debt and Leases (2,958,170) Interest Paid on Capital Debt and Leases (1,250,670)


CASH FLOWS FROM INVESTING ACTIVITIESProceeds from Sales and Maturities of Investments 8,709,384 Purchases of Investments (2,642,207) Investment Income 324,965

Net Cash Provided by Investing Activities 6,392,142









Accounts Receivable, Net 375,713 Due from Other Governmental Agencies 251,826 Inventories 13,972 Prepaid Expenses (47,330) Other Assets (546) Accounts Payable 338,056 Salary and Payroll Taxes Payable 151,097 Unearned Revenue (259,896) Deposits Held for Others (872,459) Compensated Absences Payable 389,897 Other Postemployment Benefits Payable 712,568 Net Pension Liability (14,678,531) Deferred Outflows of Resources Related to Pensions (6,288,904) Deferred Inflows of Resources Related to Pensions 18,724,306



The College entered into several new capital leases, which were recognizedon the statement of net position, but are not cash transactions forthe statement of cash flows. 1,049,364$





Reporting Entity. The governing body of St. Petersburg College, a component unit of the State of

Florida, is the College Board of Trustees. The Board of Trustees constitutes a corporation and is

composed of five members appointed by the Governor and confirmed by the Senate. The Board of




framework of applicable State law and State Board of Education rules. Geographic boundaries of the

College correspond with those of Pinellas County.









Discretely Presented Component Units. Based on the application of the criteria for determining

component units, the following component units are included within the College’s reporting entity:

The St. Petersburg College Foundation, Inc. (Foundation): This legally separate organization is a community advocate for St. Petersburg College and encourages charitable donations to provide financial support for the College. As a public charity, the Foundation accepts donations to enhance the College’s many and varied teaching and public service programs, as well as to support capital projects and other related College improvements and is governed by a separate board.

The Leepa-Rattner Museum of Art, Inc. (Museum): This legally separate organization benefits the College through the promotion of educational excellence by collecting, preserving and displaying works of art that reflect or support the aesthetic concerns of Abraham Rattner, Esther Gentle, Allen Leepa, and other artists and is governed by a separate board.

The Institute for Strategic Policy Solutions, Inc. (Institute): This legally separate organization benefits the College through the promotion of educational and civic engagement through its operations and activities by providing students, faculty, and the community at large, a forum and center for learning and scholarly public discourse and is governed by a separate board.

The St. Petersburg College Alumni Association, Inc. (Association): This legally separate organization assists the College in worthwhile endeavors such as fund raising and establishing scholarships. On August 7, 2014, the Association voted to dissolve its incorporation and the St. Petersburg College Board approved the resolution on August 19, 2014. The Association was dissolved on September 19, 2014. A Memorandum of Understanding between the Association and Foundation was approved and all Association activities and account balances were transferred to the Foundation.


The College's component units are also direct-support organizations, as defined in Section 1004.70,

Florida Statutes, and although legally separate from the College, are financially accountable to the

College. The direct-support organizations are managed independently, outside the College’s budgeting

process, and their powers generally are vested in a governing board pursuant to various State statutes.

The direct-support organizations receive, hold, invest, and administer property and make expenses to or

for the benefit of the College.

The direct-support organizations are audited by other auditors pursuant to Section 1004.70(6), Florida

Statutes. The audited financial statements of the Foundation, Museum, and Institute are available to the

public at the College. The financial data reported on the accompanying financial statements was derived

from the audited financial statements of the organizations for the fiscal year ended March 31, 2015,

except for the Association whose activity is presented from April 1, 2014, through September 19, 2014.

Additional condensed financial statements for the College’s component units are included in a

subsequent note.






























and follow GASB standards of accounting and financial reporting.
















the student or the third party making payment on behalf of the student. The College calculated its

scholarship allowances by identifying financial aid applied versus cash payments applied to the student

accounts receivable.





hand, cash in demand accounts, and cash placed with the State Treasury Special Purpose Investment

Account (SPIA) and the State Board of Administration (SBA) Florida PRIME investment pools.

For reporting cash flows, the College considers all highly liquid investments with original maturities of

3 months or less to be cash equivalents. Under this definition, the College considers amounts invested

in the State Treasury SPIA and SBA Florida PRIME investment pools to be cash equivalents. College

cash deposits are held in banks qualified as public depositories under Florida law. All such deposits are


Florida's multiple financial institution collateral pool required by Chapter 280, Florida Statutes. Cash and



At June 30, 2015, the College reported as cash equivalents at fair value $23,980,802 in the State

Treasury SPIA investment pool representing ownership of a share of the pool, not the underlying

securities. The SPIA carried a credit rating of A+f by Standard & Poor’s, had an effective duration of

2.67 years, and had a fair value factor of 1.0013 at June 30, 2015. The College relies on policies

developed by the State Treasury for managing interest rate risk or credit risk for this investment pool.


Disclosures for the State Treasury SPIA investment pool are included in the notes to financial statements

of the State’s Comprehensive Annual Financial Report.












structures and improvements; furniture, machinery, and equipment; and assets under capital leases.

These assets are capitalized and recorded at cost at the date of acquisition or at estimated fair value at

the date received in the case of gifts and purchases of State surplus property. Additions, improvements,

and other outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred

for repairs and maintenance are expensed as incurred. The College has a capitalization threshold of

$5,000 for tangible personal property and $25,000 for buildings and other structures and improvements.


Buildings – 10 to 40 years, depending on construction






Assets Under Capital Leases – 4 to 5 years

Noncurrent Liabilities. Noncurrent liabilities include bonds payable, note payable, capital leases

payable, compensated absences payable, other postemployment benefits payable, and net pension

liability that are not scheduled to be paid within the next fiscal year.









2. Reporting Change













plans.



funds - unrestricted net assets as shown below. This deficit can be attributed to the full recognition of



Fund Net Position


Total (29,616,432)$

5. Investments




PRIME investment pool administered by the State Board of Administration (SBA); interest-bearing time

deposits and savings accounts in qualified public depositories, as defined by Section 280.02, Florida

Statutes; direct obligations of the United States Treasury; obligations of Federal agencies and

instrumentalities; securities of, or interests in, certain open-end or closed-end management type

investment companies; Securities and Exchange Commission registered money market funds with the

highest credit quality rating from a nationally recognized rating agency; and other investments approved

by the College’s Board of Trustees as authorized by law. State Board of Education (SBE)

Rule 6A-14.0765(3), Florida Administrative Code, provides that College loan, endowment, annuity, and

life income funds may also be invested pursuant to Section 215.47, Florida Statutes. Investments

authorized by Section 215.47, Florida Statutes, include bonds, notes, commercial paper, and various

other types of investments.






State Board of Administration Debt Service Accounts 759,765$ Certificates of Deposit 13,031,761









Report.

Certificates of Deposit

At June 30, 2015, the College had investments in individual certificates of deposits (CDs) with 57 banks

in the College’s name totaling $13,031,761. Two 2 CDs at one bank totaling $460,000 ($230,000 each

with maturity dates of July 20, 2015, and April 30, 2018), exceeded the amount insured by the Federal

Deposit Insurance Corporation by $210,000. The CDs carry original maturity dates of 24 months to

43 months with annual percentage interest rates between 0.35 and 1.50 percent.


Investments held by the College’s component units, St. Petersburg College Foundation, Inc.

(Foundation), and The Leepa-Rattner Museum of Art, Inc. (Museum) at March 31, 2015, are reported at

fair value as follows:

St. Petersburg The Leepa-RattnerCollege Museum of

Investment Type Foundation, Inc. Art, Inc. Total

United States Government Obligations 1,077,789$ -$ 1,077,789$ Federal Agency Obligations 2,020,758 - 2,020,758 Bonds and Notes 6,474,905 - 6,474,905 Stocks and Other Equity Securities 40,796,638 - 40,796,638 Mutual Funds 7,295,848 - 7,295,848 Real Estate Investment Trusts 611,122 - 611,122 Certificates of Deposit - 250,707 250,707 Alternative Investments 1,025,780 - 1,025,780

Total Component Unit Investments 59,302,840$ 250,707$ 59,553,547$


The Foundation has a written investment policy to provide the basis for the management of a prudent

investment program appropriate to the particular fund type.

Interest Rate and Credit Risk: Interest rate risk is the risk that changes in interest rates will adversely

affect the fair market value of an investment. Credit risk is the risk that an insurer or other counterparty

to an investment will not fulfill its obligation. The Foundation’s investment policy limits investments in

fixed income securities to maturities of no longer than 30 years. The Foundation has $9,573,452 of

United States Government obligations, Federal agencies obligations, and bonds and notes that include

embedded options consisting of the option at the discretion of the issuer to call their obligation. These

securities have various call dates and mature between July 2016 and November 2044.

The Foundation’s investment policy provides that debt issues of investment grade “BBB” or better is

preferred. However, investment managers may purchase lesser quality debt investments as long as the

purchases represent no more than 25 percent of that particular fixed income portfolio’s assets.

The following are maturities and credit quality ratings for the Foundation and Museum investments at

March 31, 2015:

CreditFair Less More Quality

Investment Type Value Than 1 1-5 6-10 Than 10 Rating (1)

United States Government Obligations 1,077,789$ 107,224$ 409,545$ 474,066$ 86,954$ (2)Federal Agency Obligations 2,020,758 - 356,543 476,383 1,187,832 AA+Bonds and Notes 6,474,905 26,469 2,882,783 2,364,465 1,201,188 AAA-DFixed Income Mutual Funds 25,112 25,112 - - - Not RatedFixed Income Mutual Funds (3) 370,993 33,195 206,611 131,187 - AAA - BFixed Income Mutual Funds (4) 46,608 - 46,608 - - Not RatedFixed Income Mutual Funds (4) 153,584 - 153,584 - - BBB-DFixed Income Mutual Funds (4) 46,336 - 46,336 - - AAA-BBBFixed Income Mutual Funds 76,690 - - 76,690 - AA-NRFixed Income Mutual Funds (4) 243,385 - 243,385 - - AAA-NRFixed Income Mutual Funds 239,037 - - - 239,037 AAA-NRFixed Income Mutual Funds 1,428,457 1,428,457 - - - AAA-BFixed Income Mutual Funds (4) 1,825,080 - 1,825,080 - - BB-BFixed Income Mutual Funds 1,297,863 - - 1,297,863 - AAA-BBFixed Income Mutual Funds 524,129 - - - 524,129 BB-BBB-Real Estate Investment Trusts 611,122 611,122 - - - Not RatedCertificates of Deposit 250,707 - 250,707 - - Not RatedAlternative Investments (5) 1,025,780 1,025,780 - - - Not RatedEquity Mutual Funds 1,018,574 1,018,574 - - - Not RatedEquity Securities 40,796,638 40,796,638 - - - Not Rated

Total Component Units Investments 59,553,547$ 45,072,571$ 6,421,182$ 4,820,654$ 3,239,140$

Investment Maturities (In Years)

Notes: (1) Rated by Standard & Poor’s.

(2) Disclosure of credit risk is not required for this investment type.

(3) This has an average credit rating.

(4) These fixed income mutual funds have a weighted average maturity of less than 5 years.

(5) These are mutual funds consisting of mixed asset investments.


Custodial Credit Risk: Custodial credit risk is the risk that, in the event of the failure of the counterparty,

the Foundation will not be able to recover the value of its investments or collateral securities that are in

the possession of an outside party. The Foundation’s investment policy does not address custodial risk.

Foundation investments in debt securities are uninsured, not registered in the name of the Foundation,

and held by financial institutions and, as such, are exposed to custodial credit risk.


the Foundation’s investment in a single issuer. The Foundation’s policy provides that investments in

fixed income securities of a single issue must not exceed 5 percent of total investment assets with each

money manager at market value. United States Government and Federal agency obligations are not

subject to this limitation. For equities, no single major industry may represent more than 15 percent of

the market value of the total amount each investment firm has to invest at the time of purchase, and in

no case shall an individual security be purchased that exceeds 5 percent of the portfolio total without

approval from the investment committee. The policy also provides that the target asset allocation for the

investment portfolio is 65 percent in equities, 30 percent in fixed income, and 5 percent in alternative

investments.



the College, uncollected commissions or rent for vendors under food, vending, and bookstore operations,

accrued interest, and contract and grant reimbursements due from third parties. These receivables are

reported net of a $1,912,144 allowance for uncollectible accounts.


Due from other governmental agencies primarily consists of $6,875,615 of Public Education Capital

Outlay allocations due from the State for construction, remodeling, and renovation of College facilities

and $1,502,762 of grant and contract reimbursements due from third parties.

8. Due From and To Component Units/College

The $44,408 reported as due from component units consists of amounts owed to the College by the

Foundation and Institute for programs and scholarships. The College’s financial statements are reported

for the fiscal year ended June 30, 2015. The College’s component units financial statements are reported

for the fiscal year ended March 31, 2015. Accordingly, the amount reported as due from component units

on the statement of net position does not have a corresponding amount reported by the component units

as due to the College.

9. Capital Assets




Nondepreciable Capital Assets:Land 25,602,742$ -$ -$ 25,602,742$ Construction in Progress 4,871,771 731,219 4,287,379 1,315,611

Total Nondepreciable Capital Assets 30,474,513$ 731,219$ 4,287,379$ 26,918,353$

Depreciable Capital Assets:Buildings 325,386,690$ 14,082,164$ -$ 339,468,854$ Other Structures and Improvements 12,413,551 65,660 - 12,479,211 Furniture, Machinery, and Equipment 19,972,392 1,257,407 1,400,878 19,828,921 Assets Under Capital Leases 5,410,571 1,049,364 - 6,459,935

Total Depreciable Capital Assets 363,183,204 16,454,595 1,400,878 378,236,921

Less, Accumulated Depreciation:Buildings 86,236,623 8,307,782 - 94,544,405 Other Structures and Improvements 11,174,736 177,674 - 11,352,410 Furniture, Machinery, and Equipment 17,388,781 930,185 1,400,878 16,918,088 Assets Under Capital Leases 2,586,846 1,255,398 - 3,842,244

Total Accumulated Depreciation 117,386,986 10,671,039 1,400,878 126,657,147

Total Depreciable Capital Assets, Net 245,796,218$ 5,783,556$ -$ 251,579,774$


Unearned revenue includes restricted grants and contracts, auxiliary enterprise revenues, and student

tuition and fees received prior to fiscal year-end related to subsequent accounting periods. As of

June 30, 2015, the College reported the following amounts as unearned revenue:

Description Amount

Restricted Grants and Contracts 201,586$ Auxiliary 32,207 Student Tuition and Fees 727,701

Total Unearned Revenue 961,494$





Bonds Payable 26,205,000$ -$ 1,515,000$ 24,690,000$ 1,585,000$ Note Payable 889,618 - 187,770 701,848 187,770 Capital Leases Payable 2,823,725 1,049,364 1,255,400 2,617,689 1,184,464 Compensated Absences Payable 11,134,950 1,717,869 1,327,972 11,524,847 1,152,485 Other Postemployment Benefits Payable 3,779,000 1,220,568 508,000 4,491,568 - Net Pension Liability 46,981,041 8,718,171 23,396,702 32,302,510 890,595





Capital Improvement Revenue Bonds, Series 2006A and 2010A. These bonds are authorized by Article VII, Section 11(d) of the Florida Constitution; Sections 215.57 through 215.83 and Section 1009.23, Florida Statutes; and other applicable provisions of law. Principal and interest on these bonds are secured by and payable solely from a first lien pledge of the capital improvement fees collected pursuant to Section 1009.23(11), Florida Statutes, by the Series 2006A participating colleges on a parity with any additional bonds issued subsequent to the issuance of the Series 2006A bonds. The Series 2006A bonds constitute the first series of bonds to be issued pursuant to a Master Authorizing Resolution. The Governing Board authorized the sale of the Series 2010A Bonds by the Third Supplemental Resolution adopted on May 11, 2010, which also amended the Master Authorizing Resolution. Upon the issuance of additional bonds, all bonds will share a parity first lien on the pledged revenues of all colleges participating in any series of bonds then outstanding. The Series 2006A and 2010A bonds will share the lien of such additional bonds on the Series 2006A and 2010A pledged revenues and on the revenues pledged by the colleges participating in such additional bonds. The Series 2006A and 2010A bonds were issued for new construction and renovation and remodeling of educational facilities.



SBE Capital Outlay Bonds:Series 2009A 1,110,000$ 5.00 2019Series 2010A 1,575,000 3.50 - 5.00 2030


Series 2006A 14,360,000 3.50 - 5.00 2027Series 2010A 7,645,000 3.00 - 4.375 2030

Total 24,690,000$




2016 1,585,000$ 1,094,013$ 2,679,013$ 2017 1,660,000 1,031,563 2,691,563 2018 1,750,000 952,513 2,702,513 2019 1,840,000 869,162 2,709,162 2020 1,620,000 782,112 2,402,112 2021-2025 9,410,000 2,683,912 12,093,912 2026-2030 6,825,000 655,456 7,480,456

Total 24,690,000$ 8,068,731$ 32,758,731$


Note Payable. On March 16, 2011, the College borrowed $2,166,667, at a stated interest rate of

zero percent, to finance the remaining costs of a building acquisition with property. The note matures on

April 1, 2019, and principal payments are made quarterly. Annual requirements to amortize the

outstanding note as of June 30, 2015, are as follows:

Fiscal YearEnding June 30 Principal

2016 187,770$ 2017 187,770 2018 187,770 2019 138,538

Total 701,848$

Capital Leases Payable. Network server equipment in the amount of $5,892,957, Dental Hygiene

Program equipment in the amount of $403,259, and MIRA computer lab equipment in the amount of

$163,719 are being acquired under capital lease agreements. The stated interest rates ranged from

3.031 percent to 6.545 percent. Future minimum payments under the capital lease agreements and the

present value of the minimum payments as of June 30, 2015, are as follows:


2016 1,272,874$ 2017 829,007 2018 507,709 2019 198,990

Total Minimum Payments 2,808,580 Less, Amount Representing Interest 190,891

Present Value of Minimum Payments 2,617,689$










absences liability, $1,152,485, is the amount expected to be paid in the coming fiscal year. The current

portion of the compensated absences was determined by calculating 10 percent of the compensated

absences liability as of June 30, 2015.



postemployment health care benefits administered by the College.

Plan Description. The Other Postemployment Benefits Plan (Plan) is a single-employer defined benefit

plan administered by the College. Pursuant to the provisions of Section 112.0801, Florida Statutes,

former employees who retire from the College are eligible to participate in the College’s self-insured

dental, health, and hospitalization plan for medical and prescription drug coverage. The College

subsidizes the premium rates paid by retirees by allowing them to participate in the Plan at reduced or

blended group (implicitly subsidized) premium rates for both active and retired employees. These rates

provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are

expected to result in higher costs to the Plan on average than those of active employees. The College

does not offer any explicit subsidies for retiree coverage. Retirees are required to enroll in the Federal

Medicare program for their primary coverage as soon as they are eligible. The College does not issue a

stand-alone report and the Plan is not included in the annual report of a public employee retirement




has not advance-funded other postemployment benefit (OPEB) costs or the net OPEB obligation.

Premiums necessary for funding the Plan each year on a pay-as-you-go basis are established by the

Governor’s recommended budget and the General Appropriations Act. For the 2014-15 fiscal year,

88 retirees received other postemployment benefits. The College provided required contributions of


claims expenses (net of reinsurance), administrative expenses, and reinsurance premiums. Retiree








obligation:


Description Amount

Normal Cost (Service Cost for One Year) 697,000$ Amortization of Unfunded Actuarial Accrued Liability 429,000 Interest on Normal Cost and Amortization 50,000

Annual Required Contribution 1,176,000 Interest on Net OPEB Obligation 170,535 Adjustment to Annual Required Contribution (125,967)

Annual OPEB Cost (Expense) 1,220,568 Contribution Toward the OPEB Cost (508,000)




net OPEB obligation as of June 30, 2015, and for the two preceding fiscal years were as follows:

AnnualAnnual OPEB Cost Net OPEB

Fiscal Year OPEB Cost Contributed Obligation

2012-13 1,249,305$ 49.95% 3,025,305$ 2013-14 1,197,000 37.03% 3,779,000 2014-15 1,220,568 41.62% 4,491,568



unfunded actuarial accrued liability of $11,245,000, and a funded ratio of 0 percent. The covered payroll






determined regarding the funded status of the plan and the annual required contributions of the employer







on the substantive Plan provisions, as understood by the employer and participating members, and






the calculations.


to estimate the unfunded actuarial liability as of June 30, 2015, and the College’s 2014-15 fiscal year

ARC. Because the OPEB liability is currently unfunded, the actuarial assumptions included a 4.5 percent

rate of return on invested assets. The actuarial assumptions also included a payroll growth rate of

3.5 percent per year, an inflation rate of 3.5 percent, and an annual healthcare cost trend rate of

8.5 percent for the 2014-15 fiscal year, reduced by 0.5 percent per year, until an ultimate rate of 5 percent

is reached. The unfunded actuarial accrued liability is being amortized as a level percentage of projected

payroll amortized over 30 years on an open basis. The remaining amortization period at June 30, 2015,

was 22 years.


























FRS Pension Plan





















pension benefits.










earned:
















FRS, Regular 3.00 7.37FRS, Senior Management Service 3.00 21.14Deferred Retirement Option Program - Applicable to Members from Both of the Above Classes 0.00 12.28FRS, Reemployed Retiree (2) (2)



The College’s contributions to the Plan, totaled $4,426,326 for the fiscal year ended June 30, 2015.









0.177383333 percent, which was an increase of 0.019235273 percent from its proportionate share

measured as of June 30, 2013.






Total 9,086,340$ 18,724,306$

The deferred outflows of resources related to pensions totaling $4,426,326, resulting from College





2016 (3,760,758)$ 2017 (3,760,758) 2018 (3,760,758) 2019 (3,760,758) 2020 752,878 Thereafter 225,862

Total (14,064,292)$


















Total 100.00%













(6.65%) (7.65%) (8.65%)

College's proportionate share of the net pension liability (asset) 46,291,374$ 10,822,992$ (18,679,934)$







HIS Pension Plan











include Medicare.










Pension Liabilities, Pension Expense, and Deferred Outflows of Resources Related to Pensions.

At June 30, 2015, the College reported a liability of $21,479,518 for its proportionate share of the net


benefit payments expected to be paid within one year, net of the College’s proportionate share of the HIS

Plan’s fiduciary net position available to pay that amount. The net pension liability was measured as of






of June 30, 2013.

For the fiscal year ended June 30, 2015, the College recognized pension expense of $1,525,380.

In addition, the College reported deferred outflows of resources related to pensions from the following

sources:




Total 1,874,960$






2016 159,683$ 2017 159,683 2018 159,683 2019 159,683 2020 157,105 Thereafter 188,528

Total 984,365$





















(3.29%) (4.29%) (5.29%)






outstanding amount of contributions to the HIS Plan required for the fiscal year ended June 30, 2015.

13. Retirement Plans – Defined Contribution Plans


















Percent ofGross




















The College’s Investment Plan pension expense totaled $1,385,969 for the fiscal year ended

June 30, 2015.

















Senior Management Service Optional Annuity Program. Section 121.055, Florida Statutes, created

the Senior Management Service Optional Annuity Program (Annuity Program) as an optional retirement

program for College employees that are members of the FRS Senior Management Service Class.

The Annuity Program is a defined contribution plan, which provides full and immediate vesting of all

contributions submitted to the participating companies on behalf of the participant. College employees

in eligible positions make an irrevocable election to participate in the Annuity Program in lieu of the Senior

Management Service Class of FRS, and purchase retirement and death benefits through contracts with

participating provider companies. The College contributes 21.31 percent and employees contribute

3 percent of the employee’s salary. Additionally, the employee may contribute, by salary reduction, an


additional amount not to exceed the percentage contributed by the College. These contributions are

invested in the companies selected by the employee to create a fund for the purchase of annuities at

retirement.

The College’s contributions to the Annuity Program totaled $15,204 and employee contributions totaled



The College had one major construction project commitment at June 30, 2015, as well as several smaller

projects, as outlined below:


Bay Pines Center 4,563,426$ 747,829$ 3,815,597$ Smaller Projects (1) 1,689,047 567,782 1,121,265

Total 6,252,473$ 1,315,611$ 4,936,862$

Note: (1) Individual projects with current balance committed of less than $1 million each at June 30, 2015.


The College leased computer equipment and copiers under operating leases with various expiration

dates through 2020. These leased assets and the related commitments are not reported on the College’s

statement of net position. Operating lease payments are recorded as expenses when paid or incurred.

Outstanding commitments resulting from these lease agreements are contingent upon future

appropriations. Future minimum lease commitments for these noncancelable operating leases are as

follows:


2016 1,679,429$ 2017 1,461,460 2018 972,265 2019 234,293 2020 22,883















and other liability coverage. Settled claims resulting from these risks have not exceeded commercial

coverage in any of the past 3 fiscal years.

Life insurance coverage is provided through purchased commercial insurance.

Self-Insured Program. The Board has established an individual self-insured program to provide group

health and dental insurance for its employees, retirees, former employees, and their dependents. The

College’s liability was limited by excess reinsurance to $350,000 per insured person for the 2014-15 fiscal

year. The plan is provided by an insurance company licensed by the Florida Department of Financial

Services, Office of Insurance Regulation. The College contributes a portion of employee premiums as a

fringe benefit. The remaining portion of the employee premium and dependent coverage is by payroll

deduction and coverage for retirees, former employees, and their dependents is by prepaid premium.

The College reports a liability when it is probable that a loss has occurred and the amount of that loss

can be reasonably estimated. The liability includes an amount for claims that have been incurred, but

not reported. Because the actual claims liability depends on such complex factors as inflation, change

in legal doctrines, and damage awards, the process used in computing the claims liability does not

necessarily result in an exact amount. The College reevaluates the claims liability periodically and the

claims liability totaled $1,458,824 as of June 30, 2015.

The following schedule represents the changes in claims liability for the current and prior years for the

College’s self-insured program:

Beginning Claims and End ofFiscal of Fiscal Changes in Claim FiscalYear Year Estimates Payments Year

2013-14 1,628,101$ 14,872,259$ (15,295,042)$ 1,205,318$ 2014-15 1,205,318 16,029,651 (15,776,145) 1,458,824













Instruction 79,941,973$ Public Services 5,549 Academic Support 28,114,915 Student Services 22,817,778 Institutional Support 20,005,418 Operation and Maintenance of Plant 18,641,308 Scholarships and Waivers 35,111,496 Depreciation 10,671,039 Auxiliary Enterprises 223,308


18. Discretely Presented Component Units

The College had four discretely presented component units as discussed in note 1. These component

units represent 100 percent of the transactions and account balances of the aggregate discretely

presented component units’ columns of the financial statements. The following financial information is

from the most recently available audited financial statements for the component units:


St. PetersburgSt. Petersburg College Alumni The Leepa- Institute for

College Association, Inc. Rattner Museum Strategic PolicyFoundation, Inc. (Unaudited) of Art, Inc. Solutions, Inc.

3/31/2015 9/19/2014 (1) 3/31/2015 3/31/2015 Total

Assets: Current Assets 33,349,215$ -$ 239,980$ 74,096$ 33,663,291$ Other Noncurrent Assets 28,198,899 - 271,338 - 28,470,237

Total Assets 61,548,114 - 511,318 74,096 62,133,528

Liabilities: Current Liabilities - - 47,668 1,144 48,812

Net Position: Restricted Nonexpendable 27,430,633 - - - 27,430,633 Restricted Expendable 32,525,157 - 59,811 - 32,584,968 Unrestricted 1,592,324 - 403,839 72,952 2,069,115

Total Net Position 61,548,114$ -$ 463,650$ 72,952$ 62,084,716$

Direct-Support Organizations

Note: (1) On August 7, 2014, the St. Petersburg College Alumni Association, Inc. (Association), voted to dissolve its incorporation and the St. Petersburg College Board of Trustees approved the resolution on August 19, 2014. The Association was dissolved on September 19, 2014. Transactions are reported for the period April 1, 2014, through September 19, 2014. The activities and account balances of the Association were transferred to the St. Petersburg College Foundation, Inc.



St. Petersburg The Institute for

College Leepa-Rattner Strategic Policy

Foundation, Inc. (Unaudited) Museum of Art, Inc. Solutions, Inc.

3/31/2015 9/19/2014 (1) 3/31/2015 3/31/2015 Total

Operating Revenues 2,284,985$ -$ 835,525$ 443,985$ 3,564,495$

Operating Expenses (3,797,062) (129,109) (925,185) (387,558) (5,238,914)

Operating Income (Loss) (1,512,077) (129,109) (89,660) 56,427 (1,674,419)

Net Nonoperating Revenues 3,386,862 4,469 75,185 - 3,466,516

Other Revenues, Expenses, Gains

and Losses 330,180 - - - 330,180

Increase (Decrease) in Net Position 2,204,965 (124,640) (14,475) 56,427 2,122,277

Net Position, Beginning of Year 59,343,149 124,640 478,125 16,525 59,962,439

Net Position, End of Year 61,548,114$ -$ 463,650$ 72,952$ 62,084,716$


St. Petersburg College Alumni

Association, Inc.

Note: (1) On August 7, 2014, the St. Petersburg College Alumni Association, Inc. (Association), voted to dissolve its incorporation and the St. Petersburg College Board of Trustees approved the resolution on August 19, 2014. The Association was dissolved on September 19, 2014. Transactions are reported for the period April 1, 2014, through September 19, 2014. The activities and account balances of the Association were transferred to the St. Petersburg College Foundation, Inc.






Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

7/1/2009 -$ 9,624,000$ 9,624,000$ 0% 65,729,628$ 14.6%7/1/2011 - 10,586,000 10,586,000 0% 73,173,278 14.5%7/1/2013 - 11,245,000 11,245,000 0% 76,426,236 14.7%

Note: (1) The College’s OPEB actuarial valuation used the projected unit credit actuarial method to estimate the unfunded actuarial accrued liability.












2015 (1) 2014 (1)Contractually required FRS contribution $4,426,326 3,885,448$



College's covered-employee payroll (2) $83,468,575 81,597,410$







College's proportionate share of the HIS net pension liability 21,479,518$ $19,756,721







2015 (1) 2014 (1)







(2) Covered-employee payroll included defined benefit plan actives, investment plan members, and members in DROP.




The July 1, 2013, unfunded actuarial liability (UAAL) of $11,245,000 was 6.2 percent higher than the

July 1, 2011, UAAL of $10,586,000. This increase was due to the expected growth of liabilities over time,

demographic changes, updated participation and medical trend assumptions, updated claims costs as

compared to contribution rates, and revised mortality assumptions.

2. Schedule of Net Pension Liability And Schedule of Contributions – Florida Retirement System Pension Plan





3. Schedule of Net Pension Liability And Schedule of Contributions – Health Insurance Subsidy Pension Plan




Phone: (850) 412-2722 Fax: (850) 488-6975











issued by the Comptroller General of the United States, the financial statements of St. Petersburg

College, a component unit of the State of Florida, and its aggregate discretely presented component units

as of and for the fiscal year ended June 30, 2015, and the related notes to the financial statements, which



a reference to other auditors who audited the financial statements of the aggregate discretely presented

component units, as described in our report on the College’s financial statements. This report does not

include the results of the other auditors’ testing of internal control over financial reporting or compliance

and other matters that are reported on separately by those auditors.















with governance.















No. 2016-115.













Auditor General

Report No. 2016-178

March 2016

TALLAHASSEE COMMUNITY COLLEGE


June 30, 2015

Financial Audit


During the 2014-15 fiscal year, Dr. James T. Murdaugh served as President and the following


County

Frank S. Messersmith, Chair from 8-18-14, Wakulla

Vice Chair to 8-17-14 Donna G. Callaway, Vice Chair from 8-18-14 Leon

Eugene Lamb, Chair to 8-17-14 Gadsden

Jonathan A. Kilpatrick Wakulla

Karen B. Moore Leon

Randolph M. Pople Gadsden

G. Kevin Vaughn Leon




The team leader was Stacy P. Boyd and the audit was supervised by Karen L. Revell, CPA.








TALLAHASSEE COMMUNITY COLLEGE

TABLE OF CONTENTS

Page No.

SUMMARY ........................................................................................................................................... i






















SUMMARY


Our audit disclosed that the basic financial statements of Tallahassee Community College (a component

unit of the State of Florida) were presented fairly, in all material respects, in accordance with prescribed








Our audit objectives were to determine whether Tallahassee Community College and its officers with














AUDIT METHODOLOGY






Phone: (850) 412-2722 Fax: (850) 488-6975







We have audited the accompanying financial statements of Tallahassee Community College, a

component unit of the State of Florida, and its aggregate discretely presented component units as of and


collectively comprise the College’s basic financial statements as listed in the table of contents.






error.



audit the financial statements of the aggregate discretely presented component units, which represent

100 percent of the transactions and account balances of the aggregate discretely presented component

units’ columns. Those statements were audited by other auditors whose reports have been furnished to

us, and our opinion, insofar as it relates to the amounts included for the aggregate discretely presented

component units, is based solely on the reports of the other auditors. We conducted our audit 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

General of the United States. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material misstatement.













our audit opinions.

Opinions

In our opinion, based on our audit and the reports of other auditors, the financial statements referred to

above present fairly, in all material respects, the respective financial position of Tallahassee Community

College and of its aggregate discretely presented component units as of June 30, 2015, and the

respective changes in financial position and, where applicable, cash flows thereof for the fiscal year then

ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter








Other Matters






















of the Tallahassee Community College’s internal control over financial reporting and on our tests of its

compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements and other

matters included under the heading INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT

AUDITING STANDARDS. The purpose of that report is to describe the scope of our testing of internal

control over financial reporting and compliance and the results of that testing, and not to provide an

opinion on the internal control over financial reporting or on compliance. That report is an integral part of

an audit performed in accordance with Government Auditing Standards in considering the Tallahassee

Community College’s internal control over financial reporting and compliance.









fiscal years ended June 30, 2015, and June 30, 2014, and its component units, Tallahassee Community

College Foundation, Inc. and Public Safety Academy Housing, Inc. for the fiscal years ended

March 31, 2015, and March 31, 2014.



1.5 percent, increase as compared to the 2013-14 fiscal year, resulting primarily from an increase of

$2.8 million in cash and cash equivalents, a decrease of $0.9 million due from other governmental

agencies as a result of a decrease in Public Education Capital Outlay (PECO) funding, and an increase

in capital assets, net of $0.5 million due primarily to the capitalization of construction in progress and the

implementation of a new enterprise resource planning system. Liabilities increased by $21.5 million, or

84.1 percent, totaling $47.1 million at June 30, 2015, compared to $25.6 million at June 30, 2014,

resulting mainly from the addition of pension liabilities due to the adoption of Governmental Accounting

Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. As a

result, the College’s net position decreased by $27 million, resulting in a year-end balance of

$108.5 million.

The College’s operating revenues totaled $46.7 million for the 2014-15 fiscal year, which were essentially

the same as the 2013-14 fiscal year operating revenues. Operating expenses totaled $109.8 million for

the 2014-15 fiscal year, representing a 6 percent decrease as compared to the 2013-14 fiscal year due

mainly to changes related to personnel services, scholarships and waivers, other services and expenses,

and depreciation expenses.

The College’s comparative total net position by category for the fiscal years ended June 30, 2015, and

June 30, 2014, is shown in the following graph:



(In Thousands)










‐$25,000

$25,000

$75,000

$125,000



$107,737

$16,168

‐$15,442

$106,198

$22,156

$7,143

2015 2014

Operating Revenues

42%


53%

Other Revenues5%


Tallahassee Community College (Primary Institution) – Most of the programs and services generally associated with a college fall into this category, including instruction, public service, and support services.

Tallahassee Community College Foundation, Inc. (Foundation) (Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida.

Public Safety Academy Housing, Inc. (PSAH) (Component Unit) – Although legally separate, this component unit is important because the College is financially accountable for it, as the College reports its financial activities to the State of Florida.









resources, and net position of the College and its component units for the respective fiscal years ended



(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14

AssetsCurrent Assets 34,783$ 30,560$ 3,512$ 4,837$ Capital Assets, Net 121,155 120,704 6,178 6,386 Other Noncurrent Assets 7,607 9,833 10,768 11,263

Total Assets 163,545 161,097 20,458 22,486


LiabilitiesCurrent Liabilities 7,590 4,082 504 497 Noncurrent Liabilities 39,549 21,518 5,454 5,868

Total Liabilities 47,139 25,600 5,958 6,365


Net PositionNet Investment in Capital Assets 107,737 106,198 274 251 Restricted 16,168 22,156 12,875 14,685 Unrestricted (15,442) 7,143 1,351 1,185




The initial reporting of deferred outflows and inflows of resources and noncurrent liabilities and the

significant decrease in the College’s unrestricted net position resulted mainly from the implementation of

GASB Statement No. 68. Further information on the implementation of this reporting change can be

found in Notes 2 and 3 of the notes to financial statements.





The following summarizes the activities of the College and its component units for the respective fiscal

years ended:


(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14


Operating Income (Loss) (63,089) (69,819) (1,361) (378) Net Nonoperating Revenues 58,541 62,102 (260) 919

Income (Loss) Before Other Revenues (4,548) (7,717) (1,621) 541 Other Revenues 5,752 5,233 - -

Net Increase (Decrease) In Net Position 1,204 (2,484) (1,621) 541





Note: (1) The adjustment to the College’s beginning net position was due to the implementation of GASB Statement No. 68, which is a change in accounting principle that requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers' proportionate share of the net pension liability of the defined benefit pension plans. See Notes 2 and 3 to the financial statements.

Operating Revenues




The following summarizes the operating revenues for the College and its component units by source that




(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14

Student Tuition and Fees, Net 16,870$ 17,270$ -$ -$ Federal Grants and Contracts 16,430 17,403 - - State and Local Grants and Contracts 6,947 5,449 - - Nongovernmental Grants and Contracts 1,097 1,111 - - Auxiliary Enterprises 5,116 5,293 - - Other 239 406 1,839 1,693





(In Thousands)

College operating revenue changes were the result of the following factors: net student tuition and fees

decreased by $0.4 million, or 2.3 percent, due to a decline in student enrollment during the 2014-15 fiscal

year. Federal grants and contracts decreased by $1 million, or 5.6 percent, as a result of a decline in

Federal grants during the 2014-15 fiscal year. State and local grants and contracts increased by

$1.5 million, or 27.5 percent, due to an increase in funding for grants and contracts during the

2014-15 fiscal year.

Operating Expenses



$0 $10,000 $20,000

Other


Nongovernmental Grantsand Contracts

State and Local Grantsand Contracts

Federal Grants andContracts

Student Tuition andFees, Net

$406

$5,293

$1,111

$5,449

$17,403

$17,270

$239

$5,116

$1,097

$6,947

$16,430

$16,870

2014‐15 2013‐14






units for the respective fiscal years ended:


(In Thousands)

6-30-15 6-30-14 3-31-15 3-31-14

Personnel Services 56,613$ 59,592$ 301$ 423$ Scholarships and Waivers 17,626 19,181 269 248 Utilities and Communications 2,279 2,092 4 6 Contractual Services 16,687 15,652 202 205 Other Services and Expenses 3,793 5,996 2,167 952 Materials and Supplies 7,757 8,225 49 29 Depreciation 5,033 6,013 208 208





(In Thousands)

$0 $35,000 $70,000

Depreciation


Other Servicesand Expenses



Scholarships andWaivers

Personnel Services

$6,013

$8,225

$5,996

$15,652

$2,092

$19,181

$59,592

$5,033

$7,757

$3,793

$16,687

$2,279

$17,626

$56,613

2014‐15 2013‐14


College operating expense changes were the result of a decrease of $3 million in salary payments. As

indicated in the table below, the recording of the net pension liability adjustments decreased current

expenses by $1.6 million for salary and benefit payments. Other services and expenses decreased by

$2.2 million due primarily to discontinued Department of Transportation grant programs.

Pension PlanPension Expense

FRS $ 652,758 $ (2,465,505) $ (1,812,747)HIS 654,552 (457,343) 197,209

Total $ 1,307,310 $ (2,922,848) $ (1,615,538)

Expenditures Reclassified to

Deferred Outflows

Effects of Recording Net Pensions on

Salary and Benefit Payments








(In Thousands)

2014-15 2013-14

State Noncapital Appropriations 31,817$ 29,771$ Federal and State Student Financial Aid 29,216 31,021 Gifts and Grants 182 2,874 Investment Income 5 8 Other Nonoperating Revenues 19 - Interest on Capital Asset-Related Debt (644) (700) Other Nonoperating Expenses (2,054) (872)


College net nonoperating revenue decreased by $3.6 million, or 5.7 percent. The decrease was primarily

due to a decrease in gifts and grants of $2.7 million, or 93.7 percent, as a result of the reduction in Federal

stimulus funds through the American Recovery and Reinvestment Act.

Other Revenues


fees. The following summarizes the College’s other revenues for the 2014-15 and 2013-14 fiscal years:



(In Thousands)

2014-15 2013-14

State Capital Appropriations 940$ 1,772$ Capital Grants, Contracts, Gifts, and Fees 4,812 3,461

Total 5,752$ 5,233$

Total other revenues increased by $0.5 million as compared to the prior fiscal year. A decrease in State

capital appropriations of $0.8 million due to a decrease in PECO appropriations was offset by an increase

in private capital grants and capital improvement fees collected of $1.3 million.












(In Thousands)

2014-15 2013-14

Cash Provided (Used) by:Operating Activities (55,563)$ (66,276)$ Noncapital Financing Activities 59,560 63,666 Capital and Related Financing Activities (1,206) 425 Investing Activities 46 (554)

Net Increase (Decrease) in Cash and Cash Equivalents 2,837 (2,739) Cash and Cash Equivalents, Beginning of Year 30,080 32,819



student financial aid ($29.2 million), Federal Direct Loan program receipts ($25.5 million), grants and

contracts ($23.4 million), net student tuition and fees ($18.3 million), auxiliary enterprises ($4.9 million),

capital grants and gifts ($4.8 million), and State capital appropriations ($1.4 million). Major uses of funds

were for payments to employees ($46 million), payments to suppliers ($25.6 million), and disbursements

to students for Federal Direct Loans ($25.5 million).

Changes in cash and cash equivalents increased by $2.8 million from the prior fiscal year and were the

result of the following factors: cash flows used by operating activities decreased by $10.7 million, primarily


due to a decrease of $6.8 million in payments to suppliers, $1.5 million in payments for scholarships, and

payments to employees of $2.9 million. Cash provided by noncapital financing activities decreased by

$3.8 million due primarily to a decrease in gifts and grants received for other than capital or endowment

purposes of $2.7 million. Also, cash used by capital and related financing activities increased by

$1.9 million, mainly due to an increase in capital grants and gifts of $1.4 million offset by an increase in

purchases of capital assets of $2.9 million.


Capital Assets



$5 million. The following table summarizes the College’s capital assets, net of accumulated depreciation,

at June 30:


(In Thousands)


Land 9,556$ 9,556$ Construction in Progress 5,716 1,700 Buildings 103,361 105,452 Other Structures and Improvements 858 1,172 Furniture, Machinery, and Equipment 1,009 1,861 Assets Under Capital Leases 655 963




Major capital expenses through June 30, 2015, were incurred on the renovation of the Wakulla

Environmental Center project and costs of implementation of the new Enterprise Resource Planning

system. The College’s major construction commitments at June 30, 2015, are as follows:

Amount



(In Thousands)


statements.


Debt Administration

As of June 30, 2015, the College had $13.9 million in outstanding long-term debt that included capital

improvement revenue bonds payable, State Board of Education (SBE) capital outlay bonds payable, and

capital leases payable, representing a decrease of $1.1 million, or 7.4 percent, from the prior fiscal year.

The following table summarizes the outstanding long-term debt by type for the fiscal years ended

June 30, 2015, and June 30, 2014:


(In Thousands)

2015 2014

Capital Improvement Revenue Bonds 9,660$ 10,195$ SBE Capital Outlay Bonds 3,176 3,435 Capital Leases 1,086 1,401

Total 13,922$ 15,031$

The State Board of Education (SBE) issues capital outlay bonds on behalf of the College. During the

2014-15 fiscal year, debt repayments totaled $1.1 million and debt refunding of $0.3 million. Additional

information about the College’s long-term debt is presented in the notes to financial statements.




anticipated in the 2015-16 fiscal year. In response, the Board of Trustees did not increase the tuition rate

for the Fall 2015 term. The College’s current financial and capital plans indicate that the infusion of

additional State funding will be necessary to maintain its present level of services.




addressed to Dr. Barbara Wills, Vice President for Administrative Services, Tallahassee Community

College, 444 Appleyard Drive, Tallahassee, Florida 32304.



Tallahassee Community College A Component Unit of the State of Florida



College Units


Cash and Cash Equivalents 22,725,508$ 267,114$ Restricted Cash and Cash Equivalents 2,654,924 - Investments 563,435 2,884,045 Accounts Receivable, Net 2,026,611 349,794 Notes Receivable, Net 12,862 - Due from Other Governmental Agencies 6,788,438 - Inventories 10,486 - Prepaid Expenses 1,000 10,863


Noncurrent Assets:Restricted Cash and Cash Equivalents 7,536,667 - Restricted Investments 69,843 9,929,989 Depreciable Capital Assets, Net 105,882,713 6,177,899 Nondepreciable Capital Assets 15,272,227 - Other Assets - 838,360


TOTAL ASSETS 163,544,714 20,458,064



Accounts Payable 3,338,868 54,055 Salary and Payroll Taxes Payable 424,429 - Retainage Payable 46,461 - Unearned Revenue 143,413 - Deposits Held for Others 841,634 - Long-Term Liabilities - Current Portion:

Bonds Payable 876,000 - Notes Payable - 449,664 Capital Leases Payable 364,793 - Special Termination Benefits Payable 381,542 - Compensated Absences Payable 767,839 - Net Pension Liability 404,805 -





June 30, 2015

ComponentCollege Units


Bonds Payable 11,960,000 - Notes Payable - 5,454,309 Capital Leases Payable 721,287 - Special Termination Benefits Payable 577,227 - Compensated Absences Payable 5,254,968 - Other Postemployment Benefits Payable 2,760,027 - Net Pension Liability 18,275,657 -

Total Noncurrent Liabilities 39,549,166 5,454,309



NET POSITIONNet Investment in Capital Assets 107,736,859 273,926 Restricted:



Unrestricted (15,442,145) 1,351,027







College Units


Student Tuition and Fees, Net of Scholarship Allowances of $13,415,350 16,869,593$ -$ Federal Grants and Contracts 16,429,992 - State and Local Grants and Contracts 6,947,215 - Nongovernmental Grants and Contracts 1,097,119 - Auxiliary Enterprises 5,116,009 - Other Operating Revenues 238,982 1,839,880



Personnel Services 56,613,089 300,651 Scholarships and Waivers 17,625,781 269,799 Utilities and Communications 2,278,883 4,186 Contractual Services 16,687,384 201,727 Other Services and Expenses 3,792,591 2,167,496 Materials and Supplies 7,756,967 48,605 Depreciation 5,033,227 207,661


Operating Loss (63,089,012) (1,360,245)

NONOPERATING REVENUES (EXPENSES)State Noncapital Appropriations 31,817,398 - Federal and State Student Financial Aid 29,216,207 - Gifts and Grants 182,037 - Investment Income 4,456 169,456 Other Nonoperating Revenues 19,074 - Interest on Capital Asset-Related Debt (644,261) (283,958) Other Nonoperating Expenses (2,053,684) (145,719)

Net Nonoperating Revenues (Expenses) 58,541,227 (260,221)

Loss Before Other Revenues (4,547,785) (1,620,466)

State Capital Appropriations 939,843 - Capital Grants, Contracts, Gifts, and Fees 4,812,488 -


Increase (Decrease) in Net Position 1,204,546 (1,620,466)










For the Fiscal Year Ended June 30, 2015

College

CASH FLOWS FROM OPERATING ACTIVITIESStudent Tuition and Fees, Net 18,316,224$ Grants and Contracts 23,435,896 Payments to Suppliers (25,623,589) Payments for Utilities and Communications (2,278,883) Payments to Employees (46,032,439) Payments for Employee Benefits (10,993,651) Payments for Scholarships (17,625,781) Loans Issued to Students (12,691) Collection on Loans to Students 47,029 Auxiliary Enterprises, Net 4,966,146 Other Receipts 238,982


CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESState Noncapital Appropriations 31,817,398 Federal and State Student Financial Aid 29,216,207 Federal Direct Loan Program Receipts 25,495,488 Federal Direct Loan Program Disbursements (25,495,488) Gifts and Grants Received for Other Than Capital or Endowment Purposes 182,037 Other Nonoperating Disbursements (1,655,847)


CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESState Capital Appropriations 1,421,383 Capital Grants and Gifts 4,812,488 Purchases of Capital Assets (5,700,436) Principal Paid on Capital Debt and Leases (1,095,234) Interest Paid on Capital Debt and Leases (644,261)











Depreciation Expense 5,033,227 Changes in Assets, Liabilities, Deferred Outflows of Resources,and Deferred Inflows of Resources:

Receivables, Net 204,671 Inventories 38,926 Prepaid Expenses 2,166 Accounts Payable 3,128,652 Unearned Revenue 49,128 Deposits Held for Others (573,930) Special Termination Benefits Payable 65,511 Compensated Absences Payable 956,728 Other Postemployment Benefits Payable 236,714 Net Pension Liability (12,377,025) Deferred Outflows of Resources Related to Pensions (1,828,284) Deferred Inflows of Resources Related to Pensions 12,589,771



14,000$

(195,905)$

The State Board of Education (SBE) issued $301,000 in SBE Capital OutlayBonds, Series 2014B, to refund $315,000 in SBE Capital Outlay Bonds, Series2005B. The new debt and the refunded debt were recorded as an increase anda decrease, respectively, to bonds payable on the statement of net position;however, the transactions, including the debt service savings, are not cashtransactions for the statement of cash flows.

Losses from the disposal of capital assets were recognized on the statementof revenues, expenses, and changes in net position, but are not cashtransactions for the statement of cash flows.





Reporting Entity. The governing body of Tallahassee Community College, a component unit of the

State of Florida, is the District Board of Trustees. The Board of Trustees constitutes a corporation and

is composed of seven members appointed by the Governor and confirmed by the Senate. The Board of





District correspond with those of Gadsden, Leon, and Wakulla Counties.









Discretely Presented Component Units. Based on the application of the criteria for determining

component units, the following component units are included within the College’s reporting entity:

The Tallahassee Community College Foundation, Inc. (Foundation) – This legally separate organization provides funding and services to support and foster the pursuit of higher education at the College and is governed by a separate board.

Public Safety Academy Housing, Inc. (PSAH) – This legally separate organization was established to obtain financing to construct a 200-room housing facility for students at the College’s Florida Public Safety Institute. The housing facility was completed on January 4, 2006. Upon completion, the PSAH executed an agreement with the College whereby the College leases the housing facility from the PSAH and is responsible for operating and maintaining the facility. In exchange, the PSAH receives a monthly lease payment in the amount of its mortgage payment and operating expenses. During the 2014-2015 fiscal year, these lease and note transactions accounted for substantially all of the PSAH financial activity.

The Foundation and the PSAH are also direct-support organizations, as defined in Section 1004.70,

Florida Statutes, and although legally separate from the College, are financially accountable to the

College. The Foundation and the PSAH are managed independently, outside the College’s budgeting

process, and their powers generally are vested in a governing board pursuant to various State statutes.

The Foundation and the PSAH receive, hold, invest, and administer property, and make expenses to or

for the benefit of the College.

The Foundation and the PSAH are audited by other auditors pursuant to Section 1004.70(6), Florida

Statutes. The Foundation and PSAH audited financial statements are available to the public at the

College’s administrative offices. The financial data reported on the accompanying financial statements

for the Foundation and the PSAH was derived from the Foundation and PSAH audited financial


statements for the fiscal year ended March 31, 2015. Additional condensed financial statements for the

College’s component units are included in a subsequent note.




























accounting whereby revenues are recognized when earned and expenses are recognized when incurred.

The Foundation follows FASB standards of accounting and financial reporting for not-for-profit

organizations. The PSAH follows GASB standards of accounting and financial reporting.






include State noncapital appropriations, Federal and State student financial aid, gifts and grants,


investment income, and revenues for capital construction projects. Interest on capital asset-related debt

is a nonoperating expense.








the student or the third party making payment on behalf of the student. The College calculated the

scholarship allowance by determining the total financial aid received for the fiscal year, then excluding all

loan assistance from this total. The College then applied the average for scholarship allowance

percentage to tuition and fees for the previous five years to the current year tuition and fees, then applied

the product as the current year scholarship allowance.





hand, cash in demand accounts, and funds invested with the State Board of Administration (SBA) Florida

PRIME investment pool. For reporting cash flows, the College considers all highly liquid investments

with original maturities of 3 months or less to be cash equivalents. Under this definition, the College

considers amounts invested in the SBA Florida PRIME investment pool to be cash equivalents. College

cash deposits are held in banks qualified as public depositories under Florida law. All such deposits are








Rule 2a7-like external investment pool are similar to money market funds in which shares are owned in








structures and improvements; furniture, machinery, and equipment; and assets under capital leases.

These assets are capitalized and recorded at cost at the date of acquisition or at estimated fair value at


the date received in the case of gifts and purchases of State surplus property. Additions, improvements,

and other outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred

for repairs and maintenance are expensed as incurred. The College has a capitalization threshold of

$5,000 for tangible personal property and increased the capitalization threshold from $25,000 to

$65,000 for buildings and other structures and improvements during the 2014-15 fiscal year.








Assets Under Capital Lease – 3 to 10 years

Land, buildings, and equipment of the College’s component units are stated at cost, except for donated

property, which is stated at fair market value at the date of donation and is net of accumulated

depreciation of $2,498,811. The College’s component units depreciate buildings and equipment over an

estimated life of 39 years for buildings and improvements and from 5 to 7 years for furniture and

equipment.

Noncurrent Liabilities. Noncurrent liabilities include bonds payable, capital leases payable, special

termination benefits payable, compensated absences payable, other postemployment benefits payable,

and net pension liability that are not scheduled to be paid within the next fiscal year.








2. Reporting Change
















funds-unrestricted as shown below. This deficit can be attributed to the full recognition of long-term


liabilities) in the current unrestricted funds.

Fund Net Position


Total (15,442,145)$

5. Investments


















State Board of Administration Debt Service Accounts 69,843$ Certificates of Deposit 563,435

Total College Investments 633,278$









Report.

Certificates of Deposit

The College reported investments totaling $563,435 at June 30, 2015, in certificates of deposits (CDs)

with two banks. The investments in CDs were fully insured by the Federal Deposit Insurance Corporation,

except for $104,509 in investments not insured. The CDs carry original maturity dates of 12 months with

annual percentage interest rates between 0.10 and 0.20 percent.

Component Units Investments

Investments reported by the College’s component units consisted of those held by the Tallahassee

Community College Foundation, Inc. at March 31, 2015, and are reported at fair value as follows:


Mutual Funds 12,708,014$ Money Market Funds 95,692 State Board of Administration Fund 10,328

Total Investments 12,814,034$





$1,222,235 allowance for doubtful accounts.

7. Notes Receivable

Notes receivable represent student loans made for veteran students’ fees of $50,836, and short-term

loan program of $162. Notes receivable are reported net of a $38,136 allowance for doubtful notes.


The amount due from other governmental agencies consists of $5,020,971 of Public Education Capital

Outlay allocations due from the State for construction of College facilities and $1,767,467 due from

Federal and State agencies for contracts and grants.

9. Inventories

Inventories consist of items for resale by the Florida Public Safety Institute store, and are valued using

the last invoice cost, which approximates the first-in, first-out, method of inventory valuation. Consumable


laboratory supplies, teaching materials, and office supplies on hand in College departments are expensed

when purchased, and are not considered material. Accordingly, these items are not included in the

reported inventory.

10. Capital Assets



Nondepreciable Capital Assets:Land 9,556,301$ -$ -$ 9,556,301$ Construction in Progress 1,700,256 4,482,687 467,017 5,715,926

Total Nondepreciable Capital Assets 11,256,557$ 4,482,687$ 467,017$ 15,272,227$

Depreciable Capital Assets:Buildings 154,832,055$ 1,447,382$ -$ 156,279,437$ Other Structures and Improvements 11,446,483 - - 11,446,483 Furniture, Machinery, and Equipment 11,489,345 216,692 458,565 11,247,472 Assets Under Capital Leases 2,892,420 - - 2,892,420

Total Depreciable Capital Assets 180,660,303 1,664,074 458,565 181,865,812

Less, Accumulated Depreciation:Buildings 49,380,583 3,538,414 - 52,918,997 Other Structures and Improvements 10,274,437 313,941 - 10,588,378 Furniture, Machinery, and Equipment 9,628,493 872,495 262,660 10,238,328 Assets Under Capital Leases 1,929,019 308,377 - 2,237,396


Total Depreciable Capital Assets, Net 109,447,771$ (3,369,153)$ 195,905$ 105,882,713$


Unearned revenue at June 30, 2015, includes advance funding for contracts and grants and student

tuition and fees received prior to fiscal year-end related to subsequent accounting periods. As of

June 30, 2015, the College reported the following amounts as unearned revenue:

Description Amount

Contracts and Grants 25,825$ Student Tuition and Fees 117,588

Total Unearned Revenue 143,413$





Bonds Payable 13,630,000$ 301,000$ 1,095,000$ 12,836,000$ 876,000$ Capital Leases Payable 1,401,314 - 315,234 1,086,080 364,793 Special Termination Benefits Payable 893,259 350,930 285,420 958,769 381,542 Compensated Absences Payable 5,066,079 3,380,059 2,423,331 6,022,807 767,839 Other Postemployment Benefits Payable 2,523,313 416,421 179,707 2,760,027 - Net Pension Liability (1) 31,057,487 3,031,839 15,408,864 18,680,462 404,805



Bonds Payable - College. Various bonds were issued to finance capital outlay projects of the College.

The following is a description of the bonded debt issues:





SBE Capital Outlay Bonds:Series 2009A 2,365,000$ 4.0 - 5.0 2029Series 2010A 510,000 3.5 - 5.0 2030Series 2014B 301,000 5.0 2020


Series 2006A 9,660,000 3.5 - 5.0 2027

Total 12,836,000$




2016 876,000$ 563,013$ 1,439,013$ 2017 770,000 527,788 1,297,788 2018 725,000 493,688 1,218,688 2019 765,000 456,687 1,221,687 2020 815,000 417,812 1,232,812 2021-2025 4,850,000 1,438,935 6,288,935 2026-2030 4,035,000 294,712 4,329,712

Total 12,836,000$ 4,192,635$ 17,028,635$



The College’s portion of the bonds, $301,000, was used to refund $315,000 of outstanding SBE Capital

Outlay Bonds, Series 2005B. The SBE Capital Outlay Bonds, Series 2005B were called on

January 1, 2015. As a result of the refunding, the College had a debt service savings of $25,975 and

obtained an economic gain of $19,073.

Mortgage Note Payable – Component Unit. The PSAH executed a mortgage payable on

May 21, 2004, to construct a housing facility to provide short-term lodging for students of the College’s

Florida Public Safety Institute. The amount of the note is $9 million and bears interest at a variable rate,

currently 5.45 percent. The note is collateralized by a leasehold mortgage in real estate, a first priority

security interest in all personal property located at the facility, and the assignment of rents derived from

the operation of the housing facility. Annual requirements to amortize the outstanding note as of

March 31, 2015, are as follows:

Fiscal YearEnding March 31 Principal Interest Total

2016 449,664$ 228,129$ 677,793$ 2017 533,110 163,581 696,691 2018 589,686 143,723 733,409 2019 604,006 129,362 733,368 2020 621,286 111,998 733,284 2021-2025 3,106,221 224,006 3,330,227

Total 5,903,973$ 1,000,799$ 6,904,772$

Capital Leases Payable. Energy savings equipment in the amount of $2,701,069 and computer

equipment in the amount of $191,351 are being acquired under capital lease agreements. The stated

interest rate is 3.5 and 3 percent, respectively. Future minimum payments under the capital lease

agreements and the present value of the minimum payments as of June 30, 2015, are as follows:



2016 403,571$ 2017 410,476 2018 341,129

Total Minimum Payments 1,155,176 Less, Amount Representing Interest 69,096

Present Value of Minimum Payments 1,086,080$

Special Termination Benefits Payable. Under a Board-established Retirement Incentive Program,

employees who were hired prior to July 1, 1995, and elect to retire within 36 months from the achievement

of normal retirement, as defined in Sections 121.091 and 238.07, Florida Statutes, receive an incentive

payment of 10 percent based on their salary at retirement. In addition, the employee receives payment

for a maximum of 1,440 hours of sick leave. The College reported a special termination benefits payable

of $958,769 as of June 30, 2015, for 29 employees who gave notice to retire under the Retirement

Incentive Program, of which $381,542 represents the current portion.









absences liability, $767,839, is the amount expected to be paid in the coming fiscal year, and is calculated

as a percentage of total liability, based on the average ratio of employees who terminated services to the

total number of authorized positions for each of the preceding five years.



postemployment benefits administered by the Florida College System Risk Management Consortium

(Consortium).

Plan Description. The College contributes to an agent multiple-employer defined-benefit plan (Plan)











annual report for the Plan and the Plan is not included in the annual report of a public employee retirement






the 2014-15 fiscal year, 182 retirees received postemployment healthcare benefits and 109 retirees











obligation:

Description Amount








Percentage ofAnnual


2012-13 555,186$ 24.0% 2,291,572$ 2013-14 398,311 41.8% 2,523,313 2014-15 416,421 43.2% 2,760,027






















the calculations.




return on invested assets, which is based upon the likely return of the assets if placed in trust to pay

benefits. The actuarial assumptions also included a payroll growth rate of 4 percent per year, an inflation

















programs in lieu of the FRS to certain members of the Senior Management Service Class employed by

the State and faculty and specified employees of State colleges.












The College’s pension expense for FRS and HIS totaled $1,307,310 for the 2014-15 fiscal year.

FRS Pension Plan





Senior Management Service Class – Members in senior management level positions.





30 years of service, except for members classified as special risk who are eligible for normal retirement



of creditable service, except for members classified as special risk who are eligible for normal retirement

benefits at age 60 or at any age after 30 years of service. Employees enrolled in the Plan may include



her normal retirement date. The Plan provides retirement, disability, death benefits, and annual

cost-of-living adjustments to eligible participants.








pension benefits.










earned:




Special Risk Regular Service from December 1, 1970 through September 30, 1974 2.00 Service on and after October 1, 1974 3.00

























of June 30, 2013.





Differences between expected and actual experience -$ 409,791$ Change of assumptions 1,146,827 - Net difference between projected and actual earnings on FRS pension plan investments - 11,046,649 Changes in proportion and differences between College FRS contributions and proportionate share of contributions 142,827 - College FRS contributions subsequent to the measurement date 2,465,505 -

Total 3,755,159$ 11,456,440$







2016 (2,595,651)$ 2017 (2,595,651) 2018 (2,595,651) 2019 (2,595,651) 2020 166,012 Thereafter 49,806

Total (10,166,786)$
















Cash 1.00% 3.11% 3.10% 1.65%Intermediate-Term Bonds 18.00% 4.18% 4.05% 5.15%High Yield Bonds 3.00% 6.79% 6.25% 10.95%Broad US Equities 26.50% 8.51% 6.95% 18.90%Developed Foreign Equities 21.20% 8.66% 6.85% 20.40%Emerging Market Equities 5.30% 11.58% 7.60% 31.15%Private Equity 6.00% 11.80% 8.11% 30.00%Hedge Funds / Absolute Return 7.00% 5.81% 5.35% 10.00%Real Estate (Property) 12.00% 7.11% 6.35% 13.00%

Total 100.00%


Note: (1) As outlined in the Plan’s investment policy.












(6.65%) (7.65%) (8.65%)





HIS Pension Plan











include Medicare.












proportionate share of the net pension liability. The current portion of the net pension liability is the


College’s proportionate share of benefit payments expected to be paid within one year, net of the

College’s proportionate share of the HIS Plan’s fiduciary net position available to pay that amount. The

net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate

the net pension liability was determined by an actuarial valuation as of July 1, 2014. The College’s

proportionate share of the net pension liability was based on the College’s 2013-14 fiscal year

contributions relative to the total 2013-14 fiscal year contributions of all participating members. At

June 30, 2014, the College’s proportionate share was 0.128963797 percent, which was a decrease of

0.015116912 from its proportionate share measured as of June 30, 2013.





Change of assumptions 429,087$ -$ Net difference between projected and actual earnings on HIS pension plan investments 5,788 - Changes in proportion and differences between College HIS contributions and proportionate share of HIS contributions - 1,133,331 College contributions subsequent to the measurement date 457,343 -

Total 892,218$ 1,133,331$




resources and deferred inflows of resources related to pensions will be recognized in pension expense

as follows:


2016 (112,141)$ 2017 (112,141) 2018 (112,141) 2019 (112,141) 2020 (113,588) Thereafter (136,304)

Total (698,456)$





















(3.29%) (4.29%) (5.29%)



















account balances among various approved investment choices. Costs of administering the Plan,

including the FRS Financial Guidance Program, are funded through an employer contribution of


0.04 percent of payroll and by forfeited benefits of Plan members. Allocations to the Investment Plan


Percent ofGross




















June 30, 2015.





















CapitalizedEnterprise Resource Planning System:

Architect/Other 5,126,457$ 4,411,618$ 714,839$ Wakulla Environmental Center:

Contractor 4,278,511 418,149 3,860,362 Architect/Other 838,085 776,975 61,110

Total Capitalized Projects 10,243,053 5,606,742 4,636,311

Noncapitalized:Enterprise Resource Planning System:

Architect/Other 1,642,177 1,642,177 - Wakulla Environmental Center:

Architect/Other 3,950 3,950 - Total Noncapitalized Projects 1,646,127 1,646,127 -

Total Construction Contract Commitments 11,889,180$ 7,252,869$ 4,636,311$



























Instruction 32,226,745$ Public Services 3,783,023 Academic Support 5,148,009 Student Services 11,468,106 Institutional Support 23,791,793 Operation and Maintenance of Plant 7,061,051 Scholarships and Waivers 17,625,781 Depreciation 5,033,227 Auxiliary Enterprises 3,650,187


18. Discretely Presented Component Units

The College has two discretely presented component units as discussed in Note 1. These component

units represent 100 percent of the transactions and account balances of the aggregate discretely

presented component units’ columns of the financial statements. The following financial information is

from the most recently available audited financial statements for the component units:


TallahasseeCommunity

College Public SafetyFoundation, Academy

Inc. Housing, Inc.3-31-15 3-31-15 Total

Assets: Current Assets 3,445,667$ 66,149$ 3,511,816$ Capital Assets, Net - 6,177,899 6,177,899 Other Noncurrent Assets 10,768,349 - 10,768,349

Total Assets 14,214,016 6,244,048 20,458,064

Liabilities: Current Liabilities 39,328 464,391 503,719 Noncurrent Liabilities - 5,454,309 5,454,309

Total Liabilities 39,328 5,918,700 5,958,028

Net Position: Net Investment in Capital Assets - 273,926 273,926 Restricted Nonexpendable 4,919,475 - 4,919,475 Restricted Expendable 7,955,608 - 7,955,608 Unrestricted 1,299,605 51,422 1,351,027

Total Net Position 14,174,688$ 325,348$ 14,500,036$




TallahasseeCommunity

College Public SafetyFoundation, Academy

Inc. Housing, Inc.3-31-15 3-31-15 Total

Operating Revenues 1,125,307$ 714,573$ 1,839,880$ Depreciation Expense - (207,661) (207,661) Operating Expenses (2,979,403) (13,061) (2,992,464)

Operating Income (Loss) (1,854,096) 493,851 (1,360,245)

Net Nonoperating Revenues (Expenses)Nonoperating Revenues 169,456 - 169,456 Interest Expense - (283,958) (283,958) Other Nonoperating Expenses - (145,719) (145,719)

Net Nonoperating Revenues (Expenses) 169,456 (429,677) (260,221)

Increase (Decrease) in Net Position (1,684,640) 64,174 (1,620,466)

Net Position, Beginning of Year 15,859,328 261,174 16,120,502

Net Position, End of Year 14,174,688$ 325,348$ 14,500,036$







Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

7/1/2009 -$ 8,025,892$ 8,025,892$ 0% 39,111,832$ 20.5%7/1/2011 - 5,386,710 5,386,710 0% 37,835,863 14.2%7/1/2013 - 5,128,091 5,128,091 0% 32,210,525 15.9%































2015 (1) 2014 (1)


















Phone: (850) 412-2722 Fax: (850) 488-6975











issued by the Comptroller General of the United States, the financial statements of the Tallahassee

Community College, a component unit of the State of Florida, and its aggregate discretely presented

component units as of and for the fiscal year ended June 30, 2015, and the related notes to the financial

statements, which collectively comprise the College’s basic financial statements, and have issued our

report thereon dated March 24, 2016, included under the heading INDEPENDENT AUDITOR’S

REPORT. Our report includes a reference to other auditors who audited the financial statements of the

aggregate discretely presented component units, as described in our report on the College’s financial

statements. This report does not include the results of the other auditors’ testing of internal control over

financial reporting or compliance and other matters that are reported on separately by those auditors.















with governance.















No. 2016-135.












Documents

COMMUNITY COLLEGE CAPITAL IMPROVEMENT ...COMMUNITY COLLEGE CAPITAL IMPROVEMENT REVENUE BONDS CUSIP Numbers Maturity Date Series 2006A Dated 11/01/2006 Series 2008A Dated 7/15/2008