Colorado Community College System
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Colorado Community College System Financial Statements and Independent Auditor’s Reports Financial Audit Years Ended June 30, 2020 and 2019 Compliance Audit Year Ended June 30, 2020 LEGISLATIVE AUDIT COMMITTEE Representative Dafna Michaelson Jenet Senator Jim Smallwood Chair Vice Chair Representative Rod Bockenfeld Representative Dylan Roberts Senator Julie Gonzales Senator Robert Rodriguez Representative Colin Larson Senator Rob Woodward OFFICE OF THE STATE AUDITOR Dianne E. Ray State Auditor Kerri Hunter Deputy State Auditor Monica Power Contract Monitor BKD, LLP Contractor AN ELECTRONIC VERSION OF THIS REPORT IS AVAILABLE AT WWW.COLORADO.GOV/AUDITOR A BOUND REPORT MAY BE OBTAINED BY CALLING THE OFFICE OF THE STATE AUDITOR 303.869.2800 PLEASE REFER TO REPORT NUMBER 2011F WHEN REQUESTING THIS REPORT THIS PAGE LEFT BLANK INTENTIONALLY The Members of the Legislative Audit Committee and State Board for Community Colleges and Occupational Education We have completed the financial statement audits of the Colorado Community College System as of and for the years ended June 30, 2020 and 2019. Our audits were conducted 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. We were engaged to conduct our audits pursuant to Section 2-3-103, C.R.S., which authorizes the State Auditor to conduct or cause to be conducted audits of all departments, institutions and agencies of state government. The reports which we have issued as a result of this engagement are set forth in the table of contents which follows. Denver, Colorado February 26, 2021 THIS PAGE LEFT BLANK INTENTIONALLY Colorado Community College System June 30, 2020 Table of Contents Page(s) Report Summary ..................................................................................................................... 1–2 Recommendation Locator .......................................................................................................... 3 Financial and Compliance Audit Description of the Colorado Community College System ............................................................. 4–5 Findings and Recommendations ..................................................................................................... 6–9 Disposition of Prior Audit Findings and Recommendations ............................................................ 10 Independent Auditor’s Report .................................................................................................... 12–14 Management’s Discussion and Analysis (Unaudited) ................................................................ 16–35 Business-Type Activities – Statements of Net Position ............................................................. 37–38 Discretely Presented Component Units – Statements of Financial Position .................................... 39 Business-Type Activities – Statements of Revenues, Expenses and Changes in Net Position ......................................................................................................... 41–42 Discretely Presented Component Units – Statements of Activities ............................................ 43–44 Business-Type Activities – Statements of Cash Flows .............................................................. 45–46 Notes to Financial Statements .................................................................................................... 48–92 Required Supplementary Information Schedule of Proportionate Share of Net Pension Liability (NPL) (Unaudited) ............................... 96 Schedule of Contributions for Net Pension Liability (NPL) (Unaudited) ........................................ 97 Notes to Required Supplementary Information (NPL) ..................................................................... 98 Schedule of Proportionate Share of Other Postemployment Benefits (OPEB) (Unaudited) ............ 99 Schedule of Contributions for Other Postemployment Benefits (OPEB) (Unaudited) .................. 100 Notes to Required Supplementary Information (OPEB) ................................................................ 101 Colorado Community College System June 30, 2020 Table of Contents (continued) Page(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 – Independent Auditor’s Report .................................................................................... 102–103 State-Funded Student Financial Assistance Programs Introduction .................................................................................................................................... 105 Independent Auditor’s Report ................................................................................................ 106–108 Statement of Allocations, Expenditures, Transfers and Reversions ............................................... 109 Notes to Statement of Allocations, Expenditures, Transfers and Reversions ................................ 110 Schedules of Allocations, Expenditures, Transfers and Reversions for Colleges .................. 111–123 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 – Independent Auditor’s Report ............................................................................................ 124–125 Required Communications to Legislative Audit Committee and State Board for Community Colleges and Occupational Education .............................................................................................. 126–129 Schedule of Uncorrected Misstatements ................................................................................ 130–131 Colorado Community College System Report Summary Year Ended June 30, 2020 Purpose and Scope of Audit The Office of the State Auditor of the State of Colorado engaged BKD, LLP (BKD) to conduct a financial and compliance audit of the Colorado Community College System (CCCS or the System) for the years ended June 30, 2020 and 2019. BKD performed the audits 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. BKD was not engaged to audit the System’s aggregate discretely presented component units which includes the Colorado Community College System Office Foundation and 13 college foundations (the Foundations). The Foundations were audited by other auditors as disclosed in the Independent Auditor’s Report and the audits of the Foundations were not performed in accordance with the standards applicable to financial audits contained in Government Auditing Standards. The purposes and scope of the audit were to: • Express opinions on the financial statements of the System as of and for the years ended June 30, 2020 and 2019. • Issue a report on the System’s internal control over financial reporting and on compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters based on our audit of the financial statements performed in accordance with Government Auditing Standards for the year ended June 30, 2020. • Evaluate compliance with laws, regulations, contracts, and grants governing the expenditure of federal funds for the year ended June 30, 2020. • Express an opinion on the Statement of Allocations, Expenditures, Transfers and Reversions of the State-Funded Student Financial Assistance Programs of CCCS for the year ended June 30, 2020. • Issue a report on internal control over compliance with requirements applicable to each state-funded student financial assistance program for the year ended June 30, 2020. • Evaluate progress in implementing prior year audit recommendations. The System’s schedule of expenditures of federal awards and applicable opinions thereon, issued by the Office of the State Auditor, are included in the Statewide Single Audit Report issued under separate cover. Audit Opinions and Reports The independent auditor’s reports included herein expressed unmodified opinions on the System’s financial statements as of and for the years ended June 30, 2020 and 2019. Our report included a reference to other auditors who audited the financial statements of the aggregate discretely presented component units, as described in our report on the System’s financial statements. No material weaknesses in internal control over financial reporting were identified. No instances of noncompliance considered material to the financial statements were disclosed by the audit. 1 Colorado Community College System Report Summary Year Ended June 30, 2020 Significant Audit Adjustments There were no proposed audit adjustments recorded as a result of the audit. Summary of Audit Findings Internal Controls Over Higher Education Emergency Relief Funds Compliance Allowable Costs and Activities: Colorado Community College System – Pueblo Community College There was one finding identified in our testing of Higher Education Emergency Relief Funds expenditures under Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards