MARCH 2011 REPORT NO. 2011-164 6 Operating Revenues: College (In Thousands) College operating revenue changes were primarily the result of a $3.2 million increase in student tuition and fees due to enrollment growth and an 8 percent increase in tuition and fee rates in the 2009-10 fiscal year. Operating Expenses Expenses are categorized as operating or nonoperating. The majority of the College’s expenses are operating expenses as defined by GASB Statement No. 35. GASB gives financial reporting entities the choice of reporting operating expenses in the functional or natural classifications. The College has chosen to report the expenses in their natural classification on the statement of revenues, expenses, and changes in net assets and has displayed the functional classification in the notes to financial statements. Operating expenses for the College and its component unit for the 2009-10 and 2008-09 fiscal years ended are presented in the following table: Operating Expenses (In Thousands) 6-30-10 6-30-09 6-30-10 6-30-09 Operating Expenses Personnel Services 73,783$ 71,049$ $ $ Scholarships and Waivers 32,406 18,239 1,766 2,027 Utilities and Communications 4,897 4,921 Contractual Services 11,934 10,334 Other Services and Expenses 6,607 6,749 2,643 3,079 Materials and Supplies 22,173 16,687 Depreciation 7,808 6,832 852 859 Total Operating Expenses 159,608$ 134,811$ 5,261$ 5,965$ College Component Unit $34,681 $3,700 $265 $394 $434 $7,486 $1,483 $31,443 $3,271 $817 $96 $489 $6,695 $1,463 $0 $25,000 $50,000 Student Tuition and Fees, Net Federal Grants and Contracts State and Local Grants and Contracts Nongovernmental Grants and Contracts Sales and Services of Educational Departments Auxiliary Enterprises, Net Other 2008-09 2009-10 This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 7 The following chart presents the College’s operating expenses for the 2009-10 and 2008-09 fiscal years: Operating Expenses: College (In Thousands) College operating expenses increased by $24.8 million from the 2008-09 fiscal year. Operating expenses increased primarily as a result of a 3.8 percent increase in personnel services, a 77.7 percent increase in scholarships and waivers, and a 32.9 percent increase in materials and supplies. The increase in personnel services is primarily due to the increase in cost for instruction as a result of the enrollment growth experienced in the 2009-10 fiscal year. The cost for instructional salaries and wages increased by 6.3 percent in the 2009-10 fiscal year. Scholarships and waivers increased as a result of additional scholarship awards resulting from a 67 percent increase in student financial aid awarded over the prior fiscal year. Materials and supplies increased as a result of purchases for major information technology enhancement projects and direct material purchases for construction projects. Nonoperating Revenues and Expenses Certain revenue sources that the College relies on to provide funding for operations, including State appropriations, certain gifts and grants, and investment income, are defined by GASB as nonoperating. Nonoperating expenses include capital financing costs and other costs related to capital assets. The following summarizes the College’s nonoperating revenues and expenses for the 2009-10 and 2008-09 fiscal years: Nonoperating Revenues (Expenses): College (In Thousands) 2009-10 2008-09 State Appropriations 45,640$ 50,446$ Gifts and Grants 56,078 30,398 Investment Income 117 309 Other Nonoperating Revenues 261 40 Interest on Capital Asset-Related Debt (108) (151) Other Nonoperating Expenses (5) (150) Net Nonoperating Revenues 101,983$ 80,892$ $7,808 $22,173 $6,607 $11,934 $4,897 $32,406 $73,783 $6,832 $16,687 $6,749 $10,334 $4,921 $18,239 $71,049 $0 $50,000 $100,000 Depreciation Materials and Supplies Other Services and Expenses Contractual Services Utilities and Communications Scholarships and Waivers Personnel Services 2008-09 2009-10 This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 8 Net nonoperating revenues increased by $21.1 million, primarily due to the following:  Gifts and grants increased by $25.7 million, which primarily was the result of an increase in student financial aid funds and receipt of $3.9 million in Federal American Recovery and Reinvestment Act (ARRA) funds.  State appropriations decreased by $4.8 million from the 2008-09 fiscal year, due primarily to reduced College Program Funds appropriated by the Legislature. Other Revenues, Expenses, Gains, or Losses This category is composed of capital appropriations and capital grants, contracts, gifts, and fees. The following summarizes the College’s other revenues, expenses, gains, or losses for the 2009-10 and 2008-09 fiscal years: Other Revenues, Expenses, Gains, or Losses: College (In Thousands) 2009-10 2008-09 Capital Appropriations 2,887$ 12,958$ Capital Grants, Contracts, Gifts, and Fees 3,888 3,268 Total 6,775$ 16,226$ Capital appropriations decreased by $10.1 million, due to a decrease in Public Education Capital Outlay (PECO) funding in the 2009-10 fiscal year as compared to the 2008-09 fiscal year. T HE STATEMENT OF CASH FLOWS Another way to assess the financial health of an institution is to look at the statement of cash flows. Its primary purpose is to provide relevant information about the cash receipts and cash payments of an entity during a period. The statement of cash flows also helps users assess:  An entity’s ability to generate future net cash flows.  Its ability to meet its obligations as they come due.  Its need for external financing. A summary of the College’s cash flows for the 2009-10 and 2008-09 fiscal years is presented in the following table: Condensed Statement of Cash Flows: College (In Thousands) 2009-10 2008-09 Cash Provided (Used) by: Operating Activities (104,893)$ (83,774)$ Noncapital Financing Activities 101,885 80,867 Capital and Related Financing Activities 4,278 6,143 Investing Activities 264 564 Net Increase in Cash and Cash Equivalents 1,534 3,800 Cash and Cash Equivalents, Beginning of Year 31,337 27,537 Cash and Cash Equivalents, End of Year 32,871$ 31,337$ Major sources of funds came from State appropriations ($45.6 million), net student tuition and fees ($33.3 million), noncapital gifts and grants ($56.1 million), and capital appropriations ($24 million). Major uses of funds were for payments to employees ($59.8 million), payments to suppliers ($40.6 million), payments for scholarships ($32.4 million), and purchase of capital assets ($23.1 million). This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 9 Changes in cash and cash equivalents were the result of the following factors:  The $21.1 million increase in cash outflows from operating activities is primarily due to an increase in payments to suppliers, payments to employees, and payments for scholarships offset by an increase in tuition and fees.  The $21 million increase in cash inflows from noncapital financing activities is primarily due to an increase in Federal Pell grant funds received and the receipt of $3.9 million of State appropriated ARRA funds in the 2009-10 fiscal year offset by a reduction in State appropriations.  The $1.9 million decrease in cash inflows from capital and related financing activities is primarily due to an increase in the purchase of capital assets offset by an increase in the receipt of PECO funds from the State. CAPITAL ASSETS AND DEBT ADMINISTRATION C APITAL ASSETS At June 30, 2010, the College had $273.1 million in capital assets, less accumulated depreciation of $86.7 million, for net capital assets of $186.5 million. Depreciation charges for the current fiscal year totaled $7.8 million. The following table summarizes the College’s capital assets at June 30: Capital Assets, Net at June 30: College (In Thousands) Capital Assets 2010 2009 Land 27,571$ 26,278$ Buildings 213,545 193,598 Other Structures and Improvements 6,495 5,344 Furniture, Machinery, and Equipment 11,649 9,506 Leasehold Improvements 6,376 6,377 Construction in Progress 7,491 8,290 Total 273,127 249,393 Less, Accumulated Depreciation: Buildings 71,060 64,968 Other Structures and Improvements 5,276 5,011 Furniture, Machinery, and Equipment 8,965 7,912 Leasehold Improvements 1,361 1,209 Total Accumulated Depreciation 86,662 79,100 Capital Assets, Net 186,465$ 170,293$ The College has $6.8 million in construction commitments at June 30, 2010. The construction commitments are for projects that include Brandon Campus remodeling and renovations, Ybor City auto mechanic facility renovation, and Dale Mabry Campus bookstore renovations. In addition, planning is underway for renovation of the Collaboration Studio building which was purchased in the 2009-10 fiscal year. State appropriations together with local funds are expected to finance the construction, renovation, and purchase of land and facilities. More information about the College’s capital assets is presented in the notes to financial statements. D EBT ADMINISTRATION At fiscal year-end, the College had $2.6 million in long-term debt outstanding versus $3 million at the end of the prior fiscal year, a decrease of 13.3 percent. The State Board of Education issues capital outlay bonds on behalf of the College. During the 2009-10 fiscal year, the State Board of Education issued $52.9 million of State Board of Education Capital Outlay Bonds, Series 2009A. This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 10 Proceeds from the College’s portion of the bonds, $2,825,000, were used to refund certain callable portions of the State Board of Education Capital Outlay Bonds, Series 1999A. Additional information about the College’s long-term debt is presented in the notes to financial statements. At June 30, 2010, the Hillsborough Community College Foundation, Inc., had $18 million in Student Housing Revenue bonds outstanding. The bonds were issued in December 2006 to fund construction of a 420-bed student housing facility. ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE Hillsborough Community 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 coming year. In response, the Board of Trustees increased the tuition rate 8 percent to take effect beginning with the Fall 2010 term. The College received $3.9 million of nonrecurring funds from State appropriated ARRA to offset the $4.8 million decrease in State appropriations for the 2009-10 fiscal year. The College anticipates receiving $4 million additional ARRA funding in the 2010-11 fiscal year. ARRA funding is not anticipated after the 2010-11 fiscal year. The College’s current financial and capital plans indicate that the infusion of additional financial resources from an increase in tuition rates will be necessary to maintain its present level of services. REQUESTS FOR INFORMATION Questions concerning information provided in the MD&A, financial statements and notes thereto, or other required supplementary information, or requests for additional financial information should be addressed to Barbara A. Larson, Vice President for Administration/Chief Financial Officer, Hillsborough Community College, 39 Columbia Drive, Tampa, Florida 33606. This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 11 BASIC FINANCIAL STATEMENTS College Component Unit ASSETS Current Assets: Cash and Cash Equivalents 19,028,781$ 759,977$ Restricted Cash and Cash Equivalents 5,018,175 Accounts Receivable, Net 5,090,270 184,791 Due from Other Governmental Agencies 21,168,395 Due from Component Unit/College 106,013 51,931 Inventories 1,569,374 Prepaid Expenses 83,720 7,983 Total Current Assets 52,064,728 1,004,682 Noncurrent Assets: Restricted Cash and Cash Equivalents 8,824,105 1,086,775 Investments 5,179,034 Restricted Investments 207,866 Depreciable Capital Assets, Net 151,403,752 15,892,931 Nondepreciable Capital Assets 35,061,570 Other Assets 280,203 Total Noncurrent Assets 195,497,293 22,438,943 TOTAL ASSETS 247,562,021$ 23,443,625$ LIABILITIES Current Liabilities: Accounts Payable 1,619,720$ 125,953$ Salary and Payroll Taxes Payable 3,595,529 Retainage Payable 1,336,044 Due to Component Unit/College 51,931 106,013 Deferred Revenue 367,070 49,219 Deposits Held for Others 464,806 Long-Term Liabilities - Current Portion: Bonds Payable 235,000 325,000 Notes Payable 542,834 Compensated Absences Payable 500,000 Total Current Liabilities 8,170,100 1,149,019 Noncurrent Liabilities: Bonds Payable 2,330,000 17,675,000 Notes Payable 1,065,938 Compensated Absences Payable 2,942,130 Other Postemployment Benefits Payable 546,209 Total Noncurrent Liabilities 5,818,339 18,740,938 TOTAL LIABILITIES 13,988,439 19,889,957 HILLSBOROUGH COMMUNITY COLLEGE A COMPONENT UNIT OF THE STATE OF FLORID A STATEMENT OF NET ASSETS June 30, 2010 This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 12 College Component Unit NET ASSETS Invested in Capital Assets, Net of Related Debt 183,900,321$ (3,715,841)$ Restricted: Nonexpendable: Endowment 1,650,747 Expendable: Grants and Loans 3,907,939 1,901,788 Scholarships 868,785 2,244,424 Capital Projects 28,482,784 Debt Service 6,689 Unrestricted 16,407,064 1,472,550 Total Net Assets 233,573,582 3,553,668 TOTAL LIABILITIES AND NET ASSETS 247,562,021$ 23,443,625$ HILLSBOROUGH COMMUNITY COLLEG E A COMPONENT UNIT OF THE STATE OF FLORID A STATEMENT OF NET ASSETS (Continued) June 30, 2010 The accompanying notes to financial statements are an integral part of this statement. This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 13 College Component Unit REVENUES Operating Revenues: Student Tuition and Fees, Net of Scholarship Allowances of $20,845,585 34,681,106$ $ Federal Grants and Contracts 3,699,777 State and Local Grants and Contracts 265,190 Nongovernmental Grants and Contracts 394,412 892,309 Sales and Services of Educational Departments 433,790 Auxiliary Enterprises, Net of Scholarship Allowances of $1,288,848 7,485,723 Other Operating Revenues 1,482,912 2,972,969 Total Operating Revenues 48,442,910 3,865,278 EXPENSES Operating Expenses: Personnel Services 73,783,088 Scholarships and Waivers 32,405,500 1,766,090 Utilities and Communications 4,897,112 Contractual Services 11,934,012 Other Services and Expenses 6,607,111 2,642,692 Materials and Supplies 22,173,054 Depreciation 7,808,320 852,291 Total Operating Expenses 159,608,197 5,261,073 Operating Loss (111,165,287) (1,395,795) NONOPERATING REVENUES (EXPENSES) State Appropriations 45,640,478 93,799 Gifts and Grants 56,078,530 646,387 Investment Income 116,656 97,894 Unrealized Gain on Investments 89,739 Other Nonoperating Revenues 171,000 334,486 Interest on Capital Asset-Related Debt (107,652) Other Nonoperating Expenses (5,584) (163,544) Net Nonoperating Revenues 101,983,167 1,009,022 Loss Before Other Revenues, Expenses, Gains, or Losses (9,182,120) (386,773) Capital Appropriations 2,886,661 Capital Grants, Contracts, Gifts, and Fees 3,887,744 Total Other Revenues 6,774,405 Decrease in Net Assets (2,407,715) (386,773) Net Assets, Beginning of Year 235,981,297 3,940,441 Net Assets, End of Year 233,573,582$ 3,553,668$ The accompanying notes to financial statements are an integral part of this statement. HILLSBOROUGH COMMUNITY COLLEGE A COMPONENT UNIT OF THE STATE OF FLORID A STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the Fiscal Year Ended June 30, 2010 This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 14 College CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees, Net 33,282,608$ Grants and Contracts 3,905,438 Payments to Suppliers (40,630,732) Payments for Utilities and Communications (4,897,112) Payments to Employees (59,764,430) Payments for Employee Benefits (13,812,993) Payments for Scholarships (32,405,500) Auxiliary Enterprises, Net 7,875,374 Sales and Service of Educational Departments 433,790 Other Receipts 1,120,602 Net Cash Used by Operating Activities (104,892,955) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations 45,640,478 Gifts and Grants Received for Other Than Capital or Endowment Purposes 56,078,530 Other Nonoperating Receipts 165,416 Net Cash Provided by Noncapital Financing Activities 101,884,424 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from Capital Debt 2,825,000 Capital Appropriations 24,048,381 Capital Grants and Gifts 3,887,744 Purchases of Capital Assets (23,130,206) Principal Paid on Capital Debt (3,245,000) Interest Paid on Capital Debt (107,652) Net Cash Provided by Capital and Related Financing Activities 4,278,267 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments 147,175 Investment Income 116,656 Net Cash Provided by Investing Activities 263,831 Net Increase in Cash and Cash Equivalents 1,533,567 Cash and Cash Equivalents, Beginning of Year 31,337,494 Cash and Cash Equivalents, End of Year 32,871,061$ HILLSBOROUGH COMMUNITY COLLEGE A COMPONENT UNIT OF THE STATE OF FLORID A STATEMENT OF CASH FLOWS For the Fiscal Year Ended June 30, 2010 This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011-164 15 College RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES Operating Loss (111,165,287)$ Adjustments to Reconcile Operating Loss to Net Cash Used by Operating Activities: Depreciation Expense 7,808,320 Changes in Assets and Liabilities: Receivables, Net (2,042,665) Due from Component Unit 106,013 Inventories 8,778 Prepaid Expenses (232) Accounts Payable 74,667 Salary and Payroll Taxes Payable 539,880 Due to Component Unit (348,054) Deferred Revenue 367,070 Deposits Held for Others 91,988 Compensated Absences Payable (499,750) Other Postemployment Benefits Payable 166,317 NET CASH USED BY OPERATING ACTIVITIES (104,892,955)$ SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES 89,739$ HILLSBOROUGH COMMUNITY COLLEGE A COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF CASH FLOWS (Continued) For the Fiscal Year Ended June 30, 2010 The accompanying notes to financial statements are an integral part of this statement. Unrealized gains were recognized as increases in investment income on the statement of revenues, expenses, and changes in net assets, but are not cash transactions for the statement of cash flows. This is trial version www.adultpdf.com [...].. .MARCH 2011 REPORT NO 2011- 164 HILLSBOROUGH COMMUNITY COLLEGE A COMPONENT UNIT OF THE STATE OF FLORIDA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The governing body of Hillsborough Community College, a component unit of the State of Florida, is the District Board of... the College is a component unit of the State of Florida, and its financial balances and activity 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 Hillsborough Community College Foundation, Inc (Foundation), is included within the College s reporting... and foster the pursuit of higher education at 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 June... Governmental Accounting and Financial Reporting Standards, Sections 2100 and 2600 These criteria were used to evaluate potential component units for which the District 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... separate from the College, is financially accountable to the College The Foundation 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 expenditures to or for the benefit of the College Basis of Presentation The College s accounting... public colleges and universities as prescribed by the Governmental Accounting Standards Board (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... 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 Hillsborough County Criteria for defining the reporting entity... 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 This is trial version www.adultpdf.com 16 . Administration/Chief Financial Officer, Hillsborough Community College, 39 Columbia Drive, Tampa, Florida 33606. This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011- 164 11 BASIC FINANCIAL. 19,889,957 HILLSBOROUGH COMMUNITY COLLEGE A COMPONENT UNIT OF THE STATE OF FLORID A STATEMENT OF NET ASSETS June 30, 2010 This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011- 164 12 College. net assets, but are not cash transactions for the statement of cash flows. This is trial version www.adultpdf.com MARCH 2011 REPORT NO. 2011- 164 HILLSBOROUGH COMMUNITY COLLEGE A COMPONENT