LOS ANGELES COMMUNITY COLLEGE DISTRICT
BOARD OF TRUSTEES
BUDGET AND FINANCE COMMITTEE
Los Angeles Harbor College
Oak Room – Seahawk Center, 2nd Floor
1111 Figueroa Place
Wilmington, California 90744
Wednesday, December 14, 2005
9 – 11 a.m. Committee: Kelly Candaele, Chair; Georgia Mercer; Michael Waxman; Nancy Pearlman, Alternate Participants: Adriana Barrera, LAMC; A. Sue Carleo, ESC; Daphne Congdon, ESC; Brian Day, DMJM/JGM; Larry Eisenberg, ESC; Jeanette Gordon, ESC; Camille Goulet, ESC; Tracy Hensley, KPMG; Anil Jain, ESC; Audre Levy, LASC; Jose Leyba, LAMC; Leon Marzillier, DAS; Curtis Matthews, Moss Adams LLP; Alexia Nalewaik, Moss Adams LLP; Vinh Nguyen, ESC; Eric Tostenrud, Moss Adams LLP; Christopher Ray, KPMG; Lynn Winter Gross, ESC; Darroch Young, ESC Trustee Mercer called the meeting to order at 9:00 a.m. PUBLIC SPEAKERS None. REPORTS/RECOMMENDATIONS Proposition 39 Financial and Performance Audits Performance Audit Copies of a document entitled “Bond Program Performance Audit – Fiscal Year Ending June 30, 2005” were distributed. Mr. Larry Eisenberg indicated that under Proposition 39, the District is required to conduct two audits of the Bond Program. One is a performance audit and the other is a financial audit. He deferred to Mr. Curtis Matthews of Moss Adams LLP. (Trustee Candaele arrived at 9:06 a.m.) Mr. Matthews indicated that the main purpose of the performance audit is to verify that the funds are being used for approved Bond Program purposes. He stated that the District has been in compliance with respect to the use of these funds. He summarized the document with respect to the key observations for various Bond Program performance activities and expenditure testing results. There was discussion regarding the issue of billing and payment amounts being incorrect and the need to review payment invoices in order to resolve these errors and prevent further erroneous payments. Trustee Waxman inquired if the Board has the right to go back and review past invoices in order to recover the amounts owed. He inquired as to whether there are firms that would do this. Mr. Eisenberg responded in the affirmative. He indicated that he is meeting with such a firm tomorrow regarding this issue. Mr. Matthews continued his presentation. There was discussion regarding the issue of hard costs versus soft costs and the method for calculating these figures. Trustee Mercer requested that the next quarterly report presentation include more reflection on the soft costs issue.
Budget and Finance Committee 1 December 14, 2005
Financial Audit Copies of a document regarding the KPMG presentation and a document entitled “Los Angeles Community College District Basic Financial Statements” were distributed. Chancellor Young indicated that the financial audit was conducted by KPMG. He deferred to Ms. Tracy Hensley of KPMG. Ms. Hensley discussed the financial audit with respect to required communications and the basic financial statements. There was discussion regarding revisions that have been made to Proposition A and AA bond construction project budgets. Annual Financial Audit Copies of a document regarding the KPMG presentation were distributed. Mr. Christopher Ray discussed the required communications, the reports issued for the year ended June 30, 2005, federal and state compliance findings, and the Report to Management regarding the District financial statement audit. There was discussion regarding the federal compliance findings with respect to student financial aid. New State Alternative to the “Watch List” Copies of a document entitled “California Community Colleges Sound Fiscal Management Self­Assessment Checklist” were distributed. Chancellor Young reported that Dr. Marshall Drummond, Chancellor, California Community Colleges, has eliminated the “Watch List” and replaced it with the Sound Fiscal Management Self­Assessment Checklist. He summarized the criteria that will be used to assess a community college district’s financial condition and the follow­up actions, if any, that will be taken by the California Community Colleges Chancellor’s Office. He indicated that this is an internal process and that it is scheduled to begin at the end of the 2005­06 fiscal year. (Trustee Waxman left and Trustee Pearlman arrived at 10:50 a.m.) There was discussion regarding some of the areas on the checklist including enrollment, fund balance, etc. * * * Chancellor Young indicated that at today’s Board meeting, the Committee needs to recommend acceptance of the all three of the audits that were presented. Motion by Trustee Mercer, seconded by Trustee Pearlman, to accept all three audits. APPROVED: 3 Ayes New Business None. ADJOURNMENT Motion by Trustee Pearlman, seconded by Trustee Mercer, to adjourn. APPROVED: 3 Ayes The meeting adjourned at 11:00 a.m.
Budget and Finance Committee 2 December 14, 2005