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<ul><li> 1. ` Summary Operating Statements For the Period September 1, 2013 - May 31, 2014 For the Meeting of the Board of Trustees - June 19, 2014 for Houston Community College System &amp; Houston Community College Public Facility Corporation </li></ul><p> 2. Memorandum Management Discussion &amp; Analysis i Fund Balances Fund Balance Statement 1 Operating Summary HCCS Unrestricted Revenue &amp; Expenditures 2 Auxiliary Sources and Uses of Auxiliary Funds 3 Balance Sheet Balance Sheet by Fund 6 Budgets Adjusted Budgets by Division 7 Exemptions/Waivers Exemptions &amp; Waivers Detail 8 Table of Contents For the Period September 1, 2013 - May 31, 2014 For the Meeting of the Board of Trustees Houston Community College System 3. Managements Discussion and Analysis Thru May 31, 2014 Revenues Expenditures Total Salaries are $126,825,237 year-to-date, 4% above the previous year, namely due to the 3% annual salary increases. Salary expense at year-end is expected to increase by $1.5M due to changes in TRS guidelines. Total salaries at year end are expected to be $169,920,916. Contracted services year-to-date totaled $16,575,677, 10.4% above the previous year. The increase is namely due to an increase in janitorial, security and facility maintenance. Additional IT projects also contributed to the increase. Total Contracted Services at year-end are expected to be $26,691,552. i Athletic Field Project - In April 2012, the Board approved approximately $4.1M in Auxiliary funds for athletic fields. This amount has been set aside from the Auxiliary Fund Balance. Tuition &amp; Fee-Extended Learning receipts totaled $6,090,932 year to date, 3.6% above last year. Total tuition and fees-Extended Learning at fiscal year end are expected to be $6,565,665. Total revenue collections, net of exemptions and waivers, totaled $269,459,286 year-to-date. Total revenue received at fiscal year-end is expected to be $293,196,587; which is 2.3% above budget plan. Benefits costs totaled $13,837,703 year-to-date, 2.5% above last year. This increase is due namely to the reduction in the state's contribution to TRS and ORP and an increase in health insurance premiums. Due to TRS rule changes, benefits at year-end are expected to increase by $1.5M. Total benefits at fiscal year end are expected to be $19,496,331. Total revenues and expenditures by expense type for the Operating Fund for 2013-2014 are reported on page one. Highlights of financial activities year-to-date are as follows: State Appropriations received year to date totaled $49,494,917, 1.9% below last year. The reduction is namely due to one-time funding issued to community colleges for the previous biennium. Under Article IX, the state provided this supplemental funding in the prior biennium of $1.4M per year. The state adopted a new funding formula during the 83rd Legislative Session; 10% of appropriations will be based on student success points and must be earned. However, for the first biennium, the state waived the use of the formula and will grant each community college full funding. Total biennium funding was reduced by 1.5% compared to the previous biennium. Total appropriations received are expected to be $69,202,364. Ad Valorem Tax collections totaled $110,727,935 year-to-date. The tax rate for FY 2014 remains the same as the prior year tax rate at $0.097173. However, the tax rate applied to operations decreased proportionally this year due to the increase in the tax rate related to debt service. Tax revenue generated by the applied tax rate is trending higher than budget plan by approximately 8% due to higher than anticipated increases in property valuations within the taxing district. We project that the total tax revenue for the fiscal year will be $112,151.493. Tuition and Fees net revenue year to date totaled $100,858,389 which is 1.5% lower than the same time last year. Fall 2013 enrollment decreased 1.2%; SCH -1.1%, and Spring 2014 enrollment is down 3.4%; SCH -1.9% to-date compared to last year. We are projecting tuition and fee revenue to be $102,409,606 at fiscal year-end; 3.7% below budget plan. 4. Managements Discussion and Analysis Thru May 31, 2014 Budget Priorities funding allocated for the year are detailed below through May 31, 2014. Budget Commitments/ Priority Funding Expense: Position Management New Funding Requests1 Increase in FT Faculty to Meet SACS Requirement QEP Additional Funding Investment in Retention and Completion Faculty Compensation Committee Request Police Staffing ($6.6M over 5 years) Security Upgrades ($4M over 4 years) Designated Fund Balance Transfer Other Total Budget Commitments/Priorities Instructional &amp; Other Materials year-to date totaled $5,804,555, 27.4% above last fiscal year. IT upgrades and additional software contributed to the increase. Expenses in this area are expected to be $9,368,610 at year end. Total operating fund expenditures year-to-date total $216,487,856. We are projecting expenditures to be $302,937,280 at fiscal year end. Budget 2,374,415$ 5,535,476 1,300,000 125,000 2,500,000 ii - 1 Items requested during the budget planning process for new funding (i.e. Equipment, personnel, adjunct faculty funding, etc.) 527,000 1,320,000 1,000,000 49,500 14,731,391$ 5. Unrestricted Restricted Auxiliary1 Loan &amp; Endowments Scholarship Agency Unexpended Plant7 Retire of Debt Invest in Plant PFC Grand Total Fund Balance as of 9/1/2013, Audited $ 89,452,802 $ 8,722,535 $ 9,026,196 $ 509,932 $ 705,617 $ (59,611) $ 3,149,255 $ 9,482,219 $ 224,400,116 $ (6,325,820) $ 339,063,240 Revenue 2 269,459,286 23,910,417 13,935,053 - 93,571,652 10 2,994,822 34,058,797 2,050,009 4,084 439,984,130 Expenses Salaries 126,825,237 4,835,040 5,392,923 - 1,184,493 - 162,906 - - - 138,400,600 Employee Benefits 13,837,703 10,294,288 1,039,943 - - - 35,881 - - - 25,207,814 Supplies &amp; General Exp 3,592,947 214,632 717,879 - - - 30,302 - - - 4,555,760 Travel 719,778 145,483 164,213 - - - - - - - 1,029,474 Marketing Costs 775,050 25,210 29,588 - - - 1,300 - - - 831,149 Rentals &amp; Leases 1,880,266 84,385 47,040 - - - 2,361 - - - 2,014,051 Insurance/Risk Mgmt 6,462,004 5,500 3,854 - - - - - - - 6,471,358 Contracted Services 16,575,677 3,236,960 1,301,584 - - - 292,423 221,609 - - 21,628,254 Utilities 5,369,014 - 330,239 - - - - - - - 5,699,253 Other Departmental Expenses 3 1,876,763 58,677 3,927,917 - - - - - - - 5,863,358 Instructional and Other Materials4 &amp; 5 5,804,555 197,355 193,934 - - - 186,897 - - - 6,382,742 Maintenance and Repair 997,793 432,500 10,668 - 251,135 - 150,266 - - - 1,842,362 Transfers In/Out 6 26,660,584 - 4,095,000 - (2,940,387) - 4,439,193 (32,254,390) - - (0) Debt 92,718 - - - - - 468,995 55,710,726 - 3,076,987 59,349,425 Capital Outlay 5,017,767 401,047 25,227 - - - 67,826,183 - - 152,607 73,422,832 Depreciation - - - - - - - - 14,330,199 - 14,330,199 Scholarship Distribution 95,498,087 95,498,087 Total Expenses 216,487,856 19,931,077 17,280,009 - 93,993,329 - 73,596,708 23,677,945 14,330,199 3,229,594 462,526,716 Net of Revenue/Expenses 52,971,430 3,979,340 (3,344,956) - (421,677) 10 (70,601,885) 10,380,852 (12,280,190) (3,225,510) (22,542,587) Fund Balance Entries (534,916) (148,343) 74,925,012 19,685,233 93,926,986 Debt Funded - Fund Balance as of 05/31/2014 141,889,316$ 12,701,875$ 5,681,240$ 509,932$ 135,597$ (59,601)$ 7,472,382$ 19,863,071$ 231,805,159$ (9,551,330)$ 410,447,639$ 1 Inculdes Foundation expenses of approx. $1.6M (since inception) supplemental funding approved by the Board. 2 Revenue in Unrestricted Fund is shown net of Exemptions/Waivers, namely $6.5M for Dept. of Corrections &amp; Dual Credit waivers. 3 Institution-wide is inclusive of colleges and/or system administration expenditure (ie. Accredition fees, Graduation Expense, Elections Expense). 4 Expenses of $5,804,555 in the Unrestricted Fund includes, not limited to, classroom materials such as workbooks, textbooks, music supplies, physical education supplies, art materials and the maintenance of theses instructional materials/equipment. 5 Expenditures of $179,217 in the Auxiliary category is attributed to NEO Caf. 6 Items in this category include all student revenue bond payments, transfers for scholarship matching funds, and transfers to the Unexpended Plant Fund. 7 Items in this category are funded through Bonds. *HCC has adopted and adheres to GASB 34(1999) , GASB 54(2010) and OMB 134(1993). The college has received unqualified audit opinions since the adoption of each. Funds Operating Statement - Unaudited Fund Balances (Across all Funds) as of May 31, 2014 1 6. FY2013 Actuals FY2014 Budget Year-to-Date Actuals Thru May 31, 2014 Actuals as a % of Budget Unrealized Budget Year-to-Date Actuals Thru May 31, 2013 2013-2014 Inc/(Dec) vs. 2012- 2013 Actuals % Inc/(Dec)YTD vs. PriorYTD Projected Actuals @ 8/31/2014 Projected 2013- 2014 Inc/(Dec) vs. Budget Projected 2013-2014 Inc/(Dec) vs. Adj Budget % REVENUES State Appropriations 70,014,003$ 69,202,364$ 49,494,917$ 71.5% 19,707,447$ 50,459,091$ (964,174)$ -1.91% 69,202,364 - 0.00% Ad Valorem Taxes 106,097,476 101,478,107 110,727,935 109.1% (9,249,828) 103,556,327 7,171,608 6.93% 112,151,493 10,673,386 10.52% Tuition, Net 40,063,500 41,453,277 38,701,781 93.4% 2,751,496 39,639,661 (937,880) -2.37% 39,134,179 (2,319,098) -5.59% Fees1 63,996,717 64,922,582 62,156,607 95.7% 2,765,975 62,788,281 (631,674) -1.01% 63,275,428 (1,647,154) -2.54% Other Local Income2 2,184,999 2,543,140 1,803,852 70.9% 739,288 1,724,272 79,579 4.62% 2,247,796 (295,344) -11.61% Tuition &amp; Fee, Net -- Extended Learning 6,400,587 6,565,665 6,090,932 92.8% 474,733 5,877,199 213,733 3.64% 6,565,665 0 0.00% Grant Revenue 517,655 434,410 483,261 111.2% (48,851) 379,224 104,037 27.43% 619,663 185,253 42.64% Total Revenues 289,274,937 286,599,545 269,459,286 94.0% 17,140,259 264,424,056 5,035,230 1.90% 293,196,587 6,597,042 2.30% Assigned Fund Balance Transfers In3 Assigned Fund Balance Transfers In3 - 14,731,391 - 0.0% 14,731,391 - - 0.00% 14,731,391 - 0.00% FY2013 Purchase Order Rolls - 6,772,578 - 0.0% 6,772,578 - - 0.00% 6,772,578 - 0.00% Total Assigned FB Transfers In - 21,503,969 - - 21,503,969 - - - 21,503,969 - - Total Revenues Plus Assigned FB Transfer In 289,274,937$ 308,103,514$ 269,459,286$ 87.5% 38,644,228$ 264,424,056$ 5,035,230$ 1.90% 314,700,556$ 6,597,042$ 2.14% EXPENSES Salaries 158,833,961 174,001,463 126,825,237 72.9% 47,176,226 121,932,790 4,892,447 4.01% 169,920,916 (4,080,547) -2.35% Employee Benefits 18,704,344 18,152,880 13,837,703 76.2% 4,315,177 13,499,589 338,114 2.50% 19,496,331 1,343,451 7.40% Supplies Gen Exp 5,216,679 6,220,338 3,592,947 57.8% 2,627,390 3,660,611 (67,664) -1.85% 5,737,537 (482,800) -7.76% Travel 883,137 1,271,172 719,778 56.6% 551,394 634,105 85,673 13.51% 1,125,991 (145,181) -11.42% Marketing Costs 1,350,751 1,286,782 775,050 60.2% 511,732 907,883 (132,832) -14.63% 1,286,782 - 0.00% Rental &amp; Leases 2,234,487 2,997,527 1,880,266 62.7% 1,117,261 1,734,546 145,720 8.40% 2,997,527 - 0.00% Insurance/Risk Mgmt 6,521,682 7,052,698 6,462,004 91.6% 590,694 6,519,144 (57,140) -0.88% 7,052,698 - 0.00% Contract Services4 21,328,764 26,691,552 16,575,677 62.1% 10,115,875 15,014,072 1,561,605 10.40% 26,691,552 - 0.00% Utilities 8,414,469 11,369,205 5,369,014 47.2% 6,000,191 5,880,346 (511,332) -8.70% 10,271,465 (1,097,741) -9.66% Other Departmental Expenses5 1,799,321 2,509,576 1,876,763 74.8% 632,813 1,430,302 446,461 31.21% 2,509,576 - 0.00% Instructional &amp; Other Materials 6,263,298 9,403,646 5,804,555 61.7% 3,599,091 4,558,092 1,246,463 27.35% 9,368,610 (35,036) -0.37% Maintenance &amp; Repair 1,082,934 1,867,759 997,793 53.4% 869,966 453,380 544,413 120.08% 1,867,759 - 0.00% Transfers/Debt 33,095,470 30,747,366 26,753,301 87.0% 3,994,065 27,756,872 (1,003,571) -3.62% 30,747,366 - 0.00% Budget Commitments - 3,255,949 - 0.0% 3,255,949 - - 0.00% 2,817,462 (438,487) -13.47% Capital Outlay 4,451,702 11,275,602 5,017,767 44.5% 6,257,834 2,398,636 2,619,132 109.19% 11,045,708 (229,894) -2.04% Total Expenses 270,180,997$ 308,103,514$ 216,487,856$ 70.3% 91,615,658$ 206,380,368$ 10,107,488 4.90% 302,937,280 (5,166,234) -1.68% NET REVENUE Incr/(Decr) Vs EXPENSES 19,093,940$ 52,971,430$ 58,043,688$ (9,740,692)$ 11,763,277$ 1 Fees charged to student include: Out-of-District fees, Technology fees, lab fees, etc. 2 Includes interest &amp; dividends income, fines &amp; penalties and parking fines 3 Planned Fund Balance transfer and additional budget commitments related to Student Services &amp; Instruction as approved by the Board during the budget process. 4 Contracted Services includes consulting, auditing and maintenance &amp; ground services. 5 Institution-wide is inclusive of colleges and/or system administration expenditure (ie. Accreditation fees, Graduation Expense, Elections Expense). HOUSTON COMMUNITY COLLEGE 2013-2014 Budget vs. Actuals as of May 31, 2014 HCCS CURRENT UNRESTRICTED 2 7. 3101-3100 Main Leasing 3104 - Minority Business Development Agency Misc. Auxiliary2 Foundation3 Marketing Bookstore Commission Total Auxiliary (3110) 3111 International Student Services4 3201 Cafe Club NEO 3100 Main Subtotal 18,607,266$ -$ (13,197,204)$ (1,458,032)$ (16,170,934)$ 20,828,597$ (9,997,573)$ (1,160,839)$ (1,435,926)$ 6,012,927$ FY2013 Revenue 3,961,385 14,250 377,716 - - 1,938,886 2,316,602 - 381,788 6,674,025 Salaries 227,764 480,099 63,658 543,757 232,583 204,278 1,208,382 Benefits 61,166 116,940 12,582 129,522 55,064 51,162 296,914 Supplies Gen Exp 30,902 71,003 8,396 79,399 11,774 122,075 Travel 5,231 4,545 9,776 23,388 33,164 Marketing Costs 29,588 29,588 29,588 Rental &amp; Leases 2,674 31,575 31,575 700 34,949 Contract Services 668,973 238,828 63,279 302,107 823 971,903 Utilities 328,188 - 2,051 330,239 Departmental Expenses 1,500 318,287 7,429 3,484,071 3,809,787 19,556 3,830,843 Instructional &amp; Other Materials 600 14,118 14,118 179,217 193,934 Maintenance &amp; Repair 3,062 508 508 7,087 10,658 Insurance/Risk Mgmt 28 28 130 158 Exemptions and Waivers 2,065 2,065 2,065 Transfer/Debt5 4,101,005 - 4,101,005 Capital Outlay 2,582 16,640 16,640 19,222 Total Expense 5,428,417 - 1,310,794 174,005 - 4,968,871 330,721 457,093 11,185,101 Contribution to Fund Balance (1,467,032) 14,250 (933,078) (174,005) (3,484,071) 1,938,886 (2,652,269) (330,721) (75,305) (4,511,075) 17,140,234$ 14,250$ (14,130,282)$ (1,632,038)$ (19,655,005)$ 22,767,483$ (12,649,842)$ (1,491,560)$ (1,511,231)$ 1,501,851$ 1 Restricted by limitations; must comply with laws, statutes and regulations. 2 Common Area - Expenditures in this category include mailroom, child day care, Minority Male Initiative, Govt. Relation, Mobile Go, etc. 3 Approx. $1.6M (since inception) supplemental funding, approved by the Board. Return on Investment (ROI) is approximately 3:1. 4 Activity in this fund is related to International Student Support. 5 In April 2012 the Board approved approx. $4.1M in auxiliary funds for athletic fields. HOUSTON COMMUNITY COLLEGE SYSTEM Auxiliary Budget By Fund as of May 31, 2014 Ne...</p>