2.11.1 Financial Resources

The institution has a sound financial base and demonstrated financial stability to support the mission of the institution and the scope of its programs and services.

The member institution provides the following financial statements: (1)an institutional audit (or Standard Review Report issued in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA for those institutions audited as part of a system wide or statewide audit) and written institutional management letter for the most recent fiscal year prepared by an independent certified public accountant and/or an appropriate governing auditing agency employing the appropriate audit (or Standard Review Report) guide; (2) a statement of financial position of unrestricted net assets, exclusive of plant assets and plant-related debt, which represents the change in unrestricted net assets attributable to operations for the most recent year; and, (3) an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board.

Audit requirements for applicant institutions may be found in the Commission policy entitled “Accreditation Procedures for Applicant Institutions.”

St. Petersburg College is in compliance with this requirement because it has a sound financial base and has demonstrated a pattern of financial stability to support the mission of the College and the scope of its programs and services.

The sound financial base and financial stability of the College is evidenced by stable enrollment, growth in revenues, expenditures less than revenues, and positive change in net asset position. In spite of difficult economic times and dramatic budget challenges faced by our state since the attacks of September 11, 2001, St. Petersburg College has maintained its sound financial base with no major cutbacks, layoffs, or other dramatic changes in operations. In addition, the College has consistently achieved State of Florida planning and budgetary guidelines for maintaining the Unallocated Fund Balance in an amount equal to or greater than 5 percent of total operating funds available for the fiscal year. Currently the College has allocated reserves and surplus investments sufficient to fund accelerated construction projects as a hedge against dramatic increases in construction costs, and reserves for certain federal grants which may be discontinued or reduced in coming years. In an internally prepared comparative analysis of annual financial reports, completed in August 2005, the College’s fiscal health, financial position, and financial stability ranked # 3 in net assets, #1 in 3-year average change in net assets, and #3 in 3-year average change in cash flow among colleges in the Florida Community College System for the Fiscal Years 2001-2002 through 2003-2004.

St. Petersburg College provides internal reviews and reports documenting multiple measures of financial health. Revenue from auxiliary operations, capital-spending progress, grant spending activity, outstanding receivables, and investment returns are routinely examined by the Associate Vice President of Financial and Business Services. Revenue and expenditure activity are examined monthly to ensure that targeted levels can be achieved. Monthly process measurements also include reviewing student accounts receivable collections and bank reconciliation timeliness. Statements of Revenues and Expenditures, Comparative Balance Sheets, as well as Surplus Investments Reports are shared with the Board of Trustees on a quarterly basis, or upon Board request. These routine financial statements and budget reports combined with increasing enrollment growth and the overall condition of the physical plant are indicators of a strong financial position at the College.

Not Applicable. As a public institution, the College does not utilize fee discounts.

The College is audited annually by the State of Florida Auditor General’s Office. Audits are conducted pursuant to the provision of Florida Statutes, Section 11.45, and applicable standards contained in Government Auditing Standards issued by the Comptroller General of the United States. An audit report and management letter (Florida Auditor General Executive Summary letter for St. Petersburg College Financial Audit) is issued at the completion of the audit; a management representation letter is provided by the College. The audit reports have consistently found that the College’s financial statements presented fairly, in all material aspects, the financial position of the College and its aggregate discretely presented component units. The reports indicate full compliance with Government Auditing Standards with no material weaknesses in internal controls over financial reporting.

With the implementation of GASB 34/35, reporting requirements of the Annual Financial report changed dramatically. All of the multiple fund activity collapsed into a single entity column for reporting purposes. There was no longer an individual statement of financial position for each fund. To meet the disclosure requirement of the Southern Association of Colleges and Schools’ Commission on Colleges, a footnote has been added to the audited financial statements. The footnote includes statements of net assets and revenues, expenses, and changes in net assets for the current unrestricted fund. This required disclosure appears in the footnotes of the College’s audited Financial Statement Reports for 2005-2006 (still to be issued at time of printing), 2004-2005 (pages 37-38), and 2003-2004 (pages 35-36). The following table represents the change in Unrestricted Net Assets attributable to operations for the past three years.

St. Petersburg College has a sound annual planning and budgeting system that is centered on its Strategic Directions and Institutional Directions (SD-IOs), its departmental unit plans, and the national award winning Strategic Planning On-Line (SPOL) central computing system. These components of the College’s annual planning and budgeting system, together with a Collegewide budget committee, are integrated under the College’s overall Institutional Effectiveness processes, which are detailed elsewhere in this document.

The Budget Committee is appointed by the College President on an annual basis, and is comprised of 2-3 campus provosts, 2-3 senior vice presidents, and representation from Collegewide planning, budgeting and research, technology, business services, and facilities services and planning. The budget committee communicates annual budget preparation guidance to the College community via instructional documents which are posted on the College’s internal Web site, delivered through email, and presented in budget planning and training workshops held on the various campuses. Each of the approximately 150 reporting unit/department managers develops unit plans and corresponding budget requests that are entered into the SPOL system and subsequently review, approved, modified or rejected by their immediate management. New funds requested to support “Strategic Objectives” are categorized as “cost-to-continue” or “new Initiatives.” Those approved are then submitted to the budget committee for further review and approval; consistent with college priorities, needs, and available fiscal resources.

The Budget Committee develops collegewide operating budget “Picture Frames” based on projected new funds and/or reallocation of existing funds for its goals and objectives for the following year. Several iterations of the Picture Frames are prepared, reviewed and refined in a sequence of meetings with the President, and the President’s Cabinet which includes representation for Faculty and student governance. The completed budget is then submitted to the Board of Trustees and the Florida State Board of Education for approval. The approved budget in subsequently loaded into the Collegewide finance system for operating and budget control purposes.

An example of the Operating Budget Picture Frame for fiscal year 2005-2006 fund 10 pro forma budget – sources and uses of new funds is shown below. This report also includes the fiscal year 2004-2005 budget information.

The annual College budget is prepared according to sound fiscal procedures, using an account structure defined by the Florida Community College System Accounting Manual as approved by the State Board of Education. Categories of expenditures are compared to benchmark data from comparable institutions in the state, and enrollment projections are analyzed by the state Division of Community Colleges for reasonableness. Tuition and fees, and exemption criteria for same, are set according to statutory authority. Salaries and benefits are evaluated to comparable institutions to ensure attraction and retention of staff.

The College controls and accounts for state appropriations along with other resources by using budget controls within its accounting system in accordance with the Florida Statutes section 1011.30 Budgets for Community Colleges – each community college president shall recommend to the community college board of trustees a budget of income and expenditures at such time and in such form as the State Board of Education may prescribe. Upon approval of a budget by the community college board of trustees, such budget shall be transmitted to the Department of Education for review and approval. Rules of the State Board of Education shall prescribe procedures for effecting budget amendments subsequent to the final approval of a budget for a given year. Through its Strategic Planning and Budgeting Processes (SPOL), St. Petersburg College has become adept at identifying and prioritizing basic needs, reallocating funds internally, and developing external resources. The budget depicts the sources and uses of the operating budget.

St. Petersburg College conducts an extensive and inclusive budget process in accordance with Florida State Board of Education, Administrative Rule 6A-14.0716 and 6A-14.072. Funds necessary to support these objectives are estimated and requested by each budgeting unit. These unit budgets are combined into one consolidated operating budget for the College. Revenue estimates are completed as early as possible to provide the College President with data needed to make informed budgetary decisions. The completed budget is then submitted to the Board of Trustees and the Florida State Board of Education for approval.

The Minutes of the Regular Meeting of June 21, 2005 Board of Trustees of St. Petersburg College the president sought approval for the Annual Capital Outlay Budget, Operating Budget, Auxiliary Fund Budget, and Salary Adjustments for FY 2005-2006 (which represents the most recently audited financial statements). An excerpt pertaining to that budget is depicted below:

Mr. Burke noted this is an extraordinary budget, which took tremendous sacrifice on the part of the College to make happen and a commitment on the Board’s part to show dedication to the Faculty. He cautioned that it comes with some pain involved (i.e., cutbacks, etc.). Mr. Johnston spoke to the credibility of those who put the budget together and said he appreciates the individual meetings with trustees to better prepare them for the presentation. President Kuttler asked for staff involved in the lengthy budget process to stand and be recognized.

Mr. Johnston, therefore, amended his motion to approve Items IX-K and IX-L only. Mr. Keene seconded the motion. Mr. Keene voted aye; Mr. Johnston voted aye; Mrs. Bilirakis voted aye; Dr. Jones voted aye; and Mr. Burke voted aye. Motion carried.

An excerpt from President Kuttler to Board of Trustees, St Petersburg College regarding the annual College budget for FY 2005-2006 is also presented below.

MEMORANDUM

DATE: June 21, 2005

TO: Board of Trustees, St. Petersburg College

FROM: Carl M. Kuttler, Jr.

SUBJECT: Annual Capital Outlay Budget, Operating Budget and Auxiliary Fund Budget, and Salary Adjustments for Fiscal Year 2005-2006

VII. Collegewide Operating Budgets – Lower & Upper Divisions

Approval is sought for the Collegewide Operating Budgets for lower and upper divisions, the Auxiliary Fund Budget, and the Staffing and Program Development Budget for Fiscal Year 2005-2006. Release for spending of these budgets shall be authorized by the College President, or his designee(s).

The Collegewide Fund 10 Operating Budget for the lower division (Attachment A1, A2 and A3) is based largely on State Appropriations agreed upon during the Legislative Conference on the appropriations bill SB 2600 - 2005-2006 and projected student tuition fees. The Fund 10 lower division Operating Budget includes a 5% student tuition fee increase (Approved at May 16, 2005 BOT Meeting); up to a 7% salary increase for A&P, Career staff and student assistants; an aggregate salary increase of approximately 8.2% for full-time Faculty comprised of a minimum of 6% for all full-time Faculty and a Faculty regression adjustment in the amount of $444,103, (an additional 2.2%) including benefits. The top and the bottom of the respective salary schedules for Faculty, Career Services, and Administrative and Professional, have been raised by 7%.

Faculty and staff support for 48 full-time equivalent, new nursing students is included, as well as unit plan and cost-to-continue increases. The recurring reserves for Project Eagle and certain other federally funded Allstate Center programs, initially funded in the 2004-2005 at $635,000, have been increased tentatively to $1,422,500 in the proposed 2005-2006 budget. If approved by the Board, the FY2005-2006 Operating Budget Picture Frame will be used as the basis for completing the FY2006 Operating Budget Form Submission to the Florida Division of Community Colleges. The FY2006 Division Form Submission will be included in a future Board Meeting Agenda for information purposes (FY2005 Submission attached in part as Attachment A4 for information).

The recommended FY2005-2006 Auxiliary Fund Budget, including a summary comparison to FY2004-2005, is provided in Attachment C1.

The Operating Budget for the upper division baccalaureate programs for Fiscal Year 2005-2006, as provided in Attachment B1, is based on the 2005-2006 state appropriation for the baccalaureate program and projected 4-year student fees. The tuition for the baccalaureate program is prescribed in the appropriations bill for 2005-2006. The fees for the baccalaureate program were approved by the Board at the May 16, 2005 meeting.

The above budgets have been reviewed by the President’s Cabinet and are recommended by the President.

The Minutes of the Regular Meeting of June 20, 2006 Board of Trustees of St. Petersburg College the president sought approval of Item IX_N, Annual Capital Outlay Budget (Facilities Planning & Institutional Services), Operating Budget and Auxiliary Fund Budget (Business Services), and Salary Adjustments (Human Resources) for FY 2005-2006. The operating budget for FY2006-2007 Fund 10 Pro Forma Budget: Sources & Uses of New Funds, and Fiscal Year 2006-2007 Baccalaureate Programs (Fund 12) Pro Forma Budget: Sources and Uses of Funds are depicted below:

The College’s current assets adequately meet current liabilities. Analysis of the financial results documented in the College’s audited financial statements shows the history of the College’s stability.