Del Mar College Comprehensive Annual Financial Report Fiscal Year Ended August 31, 2014 Del Mar College • 101 Baldwin Blvd • Corpus Christi, TX 78404-3897 This page intentionally left blank. Comprehensive Annual Financial Report Fiscal Year Ended August 31, 2014 Prepared by Lee Sloan, Ed.D. Chief Financial Officer and Vice President of Operations John Johnson Comptroller Lenora Keas Vice President of Strategic Planning and Workforce Initiatives Del Mar College 101 Baldwin Blvd., Corpus Christi, Texas 78404-3897 www.delmar.edu Front cover photo: Designed by Richter Architects, the Fine Arts Music Building addition includes more than 18,900 square feet of expanded instructional and performance space for music and sound recording technology. Back cover photo: Looking out from the addition to the Fine Arts Music Building. Del Mar College COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED AUGUST 31, 2014 Table of Contents Page No. INTRODUCTORY SECTION Transmittal Letter .......................................................................................................................... 1 Board of Regents and Administration .......................................................................................... 16 Certificate of Excellence in Financial Reporting ......................................................................... 17 Organizational Chart .................................................................................................................... 18 FINANCIAL SECTION Independent Auditor’s Report ....................................................................................................... 21 Management’s Discussion and Analysis ....................................................................................... 25 Basic Financial Statements: Exhibit 1 Statements of Net Position ............................................................................................................ 43 Statements of Financial Position, Component Unit ...................................................................... 44 Exhibit 2 Statements of Revenues, Expenses and Changes in Net Position ................................................ 45 Statements of Revenues, Expenses and Changes in Net Assets, Component Unit ...................... 46 Exhibit 3 Statements of Cash Flows ............................................................................................................ 47 Notes to Financial Statements ....................................................................................................... 49 Schedules Required by the Texas Higher Education Coordinating Board: Schedule A Schedule of Operating Revenues ................................................................................................. 78 Schedule B Schedule of Operating Expenses by Object .................................................................................. 79 Schedule C Schedule of Non-Operating Revenues and Expenses .................................................................. 80 i Del Mar College COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED AUGUST 31, 2014 TABLE OF CONTENTS (Continued) Page No. Schedule D Schedule of Net Assets by Source and Availability...................................................................... 81 STATISTICAL SECTION (UNAUDITED) Statistical Information ................................................................................................................... 85 Statistical Supplement 1 Net Position by Component (Unaudited) ...................................................................................... 87 Statistical Supplement 2 Revenues by Source (Unaudited) .................................................................................................. 88 Statistical Supplement 3 Program Expenses by Function (Unaudited) ............................................................................... 90 Statistical Supplement 4 Tuition and Fees (Unaudited) ....................................................................................................... 92 Statistical Supplement 5 Assessed Value and Taxable Assessed Value of Property (Unaudited) ...................................... 93 Statistical Supplement 6 State Appropriation Per FTSE and Contact Hour (Unaudited) ..................................................... 94 Statistical Supplement 7 Principal Taxpayers (Unaudited) ................................................................................................. 95 Statistical Supplement 8 Property Tax Levies and Collections (Unaudited) ....................................................................... 97 Statistical Supplement 9 Ratios of Outstanding Debt (Unaudited) ...................................................................................... 98 Statistical Supplement 10 Legal Debt Margin Information (Unaudited) ................................................................................ 99 ii Del Mar College COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED AUGUST 31, 2014 TABLE OF CONTENTS (Continued) Page No. Statistical Supplement 11 Pledged Revenue Coverage (Unaudited) ..................................................................................... 100 Statistical Supplement 12 Demographic and Economic Statistics – Taxing District (Unaudited) ........................................ 101 Statistical Supplement 13 Principal Employers (Unaudited) .................................................................................................. 102 Statistical Supplement 14 Faculty, Staff, and Administrators Statistics (Unaudited) ........................................................... 103 Statistical Supplement 15 Enrollment Details (Unaudited) ................................................................................................... 104 Statistical Supplement 16 Student Profile (Unaudited) ......................................................................................................... 105 Statistical Supplement 17 Transfers to Senior Institutions (Unaudited) ................................................................................. 106 Statistical Supplement 18 Capital Asset Information (Unaudited) ........................................................................................ 107 Statistical Supplement 19 Changes in Net Assets (Unaudited) ............................................................................................. 108 Statistical Supplement 20 Ad Valorem Tax Rates Authorized (Unaudited) ......................................................................... 110 Statistical Supplement 21 Property Tax Rates – All Direct and Overlapping Governments (Unaudited) ............................ 111 Statistical Supplement 22 Computation of Direct and Overlapping Debt (Unaudited) .......................................................... 113 iii Del Mar College COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED AUGUST 31, 2014 TABLE OF CONTENTS (Continued) Page No. FEDERAL AND STATE AWARDS SECTION 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 ................................................. 117 Independent Auditor’s Report on Compliance (with Requirements Applicable) for Each Federal Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 .................................................................................... 119 Schedule of Federal Findings and Questioned Costs .................................................................... 123 Schedule E Schedule of Expenditures of Federal Awards ............................................................................... 125 Independent Auditor’s Report on Compliance (with Requirements Applicable) for Each State Major Program and on Internal Control Over Compliance in Accordance with State Single Audit Circular ........................................................................... 129 Schedule of State Findings and Questioned Costs ........................................................................ 131 Schedule F Schedule of Expenditures of State Awards ................................................................................... 133 iv This page intentionally left blank. by GASB Statements No. 34 and No. 35 provides a comprehensive, entity-wide perspective of the College’s assets, liabilities, net assets, revenues, expenses, changes in net assets and cash flows and replaces the fund-group perspective previously required. The College maintains its accounts and prepares its financial statements in accordance with generally accepted accounting principles in the United States of America (GAAP) as set forth by Governmental and Financial Accounting Standards Boards (GASB and FASB), National Association of College and University Business Officers (NACUBO) and the Texas Higher Education Coordinating Board (THECB). The financial records of the College are maintained on the accrual basis of accounting, whereby all revenues are recorded when earned and all expenses are recorded when incurred. The College’s financial statements are prepared using the economic resources measurement focus. The notes to the financial statements expand on and explain the financial statements and the accounting principles applied. Profile of the College Del Mar College District is