Redwoods Community College District Vice President, Chief Business Officer FINANCIAL ADVISORY COMMITTEE NOTES Accreditation Response Workgroup November 9, 2006 A workgroup was formed to begin the process of assisting the district with its response to our accrediting commission’s request for a progress report on 4 recommendations. Our area of focus relates to commission standards in Section IIID, Financial Resources. Present Ron Cox, Helen Edwards Steering Committee Here are the major points raised at the Steering Committee meeting on 11/1/06: Start with the March report content (do not refer to the March report) The response should cover progress from October 2005 through the present. The deadline for the first draft (and the end of the committee’s work) is December 15, 2006. Jeff, Scott, and Ron will discuss the response to Recommendation 6. Recommendation 5 Standards for financial resources are mentioned prominently in recommendation 5. The following are initial thoughts on scope and content: A portion of this recommendation addresses the need for longrange planning regarding the development and allocation of financial resources and maintenance of fiscal stability. It does not suggest an actual plan be developed, but the development of a planning process. We developed a 12-month action plan in March. In light of the further development of our institutional planning efforts and a rereading of this recommendation, it appears that the action plan needs some revision. Specifically, it may be appropriate to deemphasize the development of a plan and address the ongoing financial analysis needs for institutional decision making consistent with other long-range planning efforts. Suggested revisions to the 12-month action plan will be drafted for distribution by email to the FAC for comment. Our documentation on best practices and stakeholder interest will also need revision according. Even though our new (program review driven/data informed) FINANCIAL ADVISORY COMMITTEE NOTES November 9, 2006 Page 2 of 3 institutional planning efforts have only just begun, we can still make progress on two areas on our Best Practices List (Analyze the Current/Future Economic Environment and Explore Resources Available or for Potential Development). Recommendation 6 This recommendation deals strictly with financial resource standard IIID.2c. It has not been addressed previously by the FAC. As noted above, Jeff has indicated he would like to discuss our response to this recommendation with Scott and Ron. This has not yet taken place. However, here are some initial thoughts: Unlike the previous recommendation, this one suggests the development of a plan. The primary emphasis is the achievement and maintenance of financial stability. Key elements to be addressed are declining FTES (and therefore, revenue), a prudent reserve balance, and annual expenditures in line with available resources. Because we currently have a structural imbalance with declining FTES, revenue, and reserves, any plan adopted by the district could be of immediate benefit. This could be viewed as a financial recovery plan of sorts. The primary element of financial stability is the matching of ongoing expenditures with ongoing revenues. Before committing to any new ongoing expenditures, uncommitted ongoing revenues need to be identified to pay for them. One-time revenues should be used for one-time expenditures. Ongoing and one-time revenues need to be estimated based (in part) on projections of FTES. The state provides stability funding for one year for a district to adjust to declining revenues from declining FTES. Our plan needs to include FTES and revenue projections together with ongoing expenditure cuts to the level of our revenues or below (to build our reserves to a prudent level). Once a target level of expenditure cuts or additional revenue development has been identified, two basic things could take place. First, a list of potential solutions could to be compiled and evaluated for financial impact and feasibility. Next, the potential solutions could be prioritized and selected for implementation. When it has been determined how we will do these steps, we could have the basis for a plan. Finally, we may want to include an ongoing analysis component to track how effective our solutions are and whether any of our projections need updating. FINANCIAL ADVISORY COMMITTEE NOTES November 9, 2006 Page 3 of 3 Follow-up Here are some additional follow-up ideas that could be pursued: Tracking Other Planning Efforts – It was suggested that individual working meetings with Program Review, Facilities, and Technology would be helpful. Evidence – While to some extent we may need to describe how we plan to implement the recommendations of the Commission in the future, any progress made to date and cited needs to be adequately documented. We need to compile a list of evidence that is already available and evidence that could be developed in the time available. Best Practices – While an initial survey was conducted of other institutions for best practices, we did not check with colleges that have recently renewed their accreditation under the new standards. We could start with the ACCJC web site. Outlook Folders – We need to both post our progress and review the progress of others by reference to Public folders in Outlook.