PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
Consideration of the 15 bulleted items on the State Chancellor’s Office “Sound Fiscal
Management Self-Assessment Checklist”
http://extranet.cccco.edu/Portals/1/CFFP/Fiscal_Services/Standards/AcctgAdvisories/FS0505_Fiscal_Monitoring_A
ccounting_Advisory4.pdf reveals the following:
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
I.
Deficit Spending - Is this area acceptable?
To balance the 2013-14 budget and avoid deficit spending, the District
planned for $2 million in budget savings centered in employee payroll
savings and implemented this savings target primarily through the
following actions and agreements:
Partial
Yes
a. The District implemented its “Round One Reorganization and
Reduction in Force (RIF)” which was approved by the Board of
Trustees at the December 4, 2012 meeting.
http://www.redwoods.edu/District/Board/documents/BudgetSavings12-412.pdf
http://www.redwoods.edu/District/Board/documents/Dec2012Resolutionelimi
natingclassifiedpositions.pdf
b. The District implemented its Round Two Reorganization and RIF
which was approved by the Board of Trustees at the July 9, 2013
meeting, see P. 61 of the BOT July 9, 2012 meeting agenda.
http://www.redwoods.edu/district/board/documents/July92013packet.pdf
c. The District implemented employee salary concessions on a
permanent basis for unrepresented employees in the 6.5% to 9.0%
range. See P. 59 of the July 9, 2013 BOT meeting agenda.
http://www.redwoods.edu/district/board/documents/July92013packet.pdf
d. The District and the California School Employees Association
(CSEA) ratified a collective bargaining agreement for the period July
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
1, 2013 through June 30, 2015. The agreement includes a 6.5%
permanent salary concession.
http://www.redwoods.edu/district/board/documents/CSEACollectiveBargainin
gAgreement-2013-2015.pdf
e. The District and the College of the Redwoods Faculty Organization
(CRFO) ratified a collective bargaining agreement for the period July
1, 2013 through June 30, 2016. The agreement includes an 8.7%
permanent salary concession for full-time faculty and an 8.0%
concession for associate faculty. Also, new full-time faculty may be
hired at steps 1 through 5, whereas previously new hires could come at
steps 1 through 10.
http://www.redwoods.edu/district/board/documents/CRFOCollectiveBargainin
gAgreement-2013-2016.pdf
i. Both collective bargaining agreements allow for future
adjustments to the step schedule (i.e. Cost of Living “COLA”
increases) only when the District’s fund balance is budgeted to
stay above 6% and then only when the State increases the funding
per FTES in the Chancellor’s Office apportionment model by more
than 1.6%. Only then can the amount above 1.6% be added to the
step schedule as a COLA.
ii. In years when the fund balance is budgeted below 6%, then any
increase to the step schedules will be temporarily withheld until
the fund balance can be maintained at 6% or better.
iii. This language will protect the District from funding a COLA
during a weak fiscal period.
iv. In years when the State funds an inflationary increase. The 1.6%
threshold will provide a sustainable funding source to help the
District cover items such as cost increases in health and welfare
benefits plans and increases in operating expenditures.

Is the College spending within their revenue budget in the current year?
The 2013-14 Final Budget shows a $79K net revenue budget and the
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No
Yes
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
multiyear forecast for 2014-15 and 2015-16 show $85K and $99K,
respectively. http://www.redwoods.edu/district/board/documents/201314CRFinalBgtBOT9-10-2013_000.PDF

Has the College controlled deficit spending over multiple years? The
college has controlled deficit spending by returning to a positive net
revenue budget for 2013-14 and implementing permanent and on-going
salary concessions by all employees.
http://www.redwoods.edu/district/board/documents/201314CRFinalBgtBOT9-10-2013_000.PDF
No
Yes

Is deficit spending addressed by fund balance, ongoing revenue
increases, or expenditure reductions? The combination of
reorganizations, employee pay concessions, and a small inflationary
increase in State funding has helped to manage the budget.
Yes
Yes

Are College revenue estimates based upon past history?
Yes
Yes

Does the College automatically build in growth revenue estimates? In
2011-12 and 2012-13, the College stopped budgeting with assumptions
of growth funding. The 2013-14 Final Budget is based on a reasonable
but conservative FTES target for Fall and Spring terms. The 2013-14
budget includes an enrollment increase related to additional
enrollments already booked from Summer 2013. It is appropriate to
answer No to this question as sustainable enrollment growth funding
has not been coming from the State for several years and the small,
rural makeup of the District means that it is difficult for the District to
sustain enrollment growth over 3% or so per year.
No
No
II.
Fund Balance – Is this area acceptable? During 2012-13 the District
committed on quarterly financial reports to the Chancellor’s Office to
close the 2012-13 budget year with at least a 5.0% fund balance. If the
fund balance is below 5% at the closing of the books, then the Board of
Trustees (BOT) has authorized the President/Superintendent to make a
transfer from the employee benefits trust to bring the fund balance up
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No
Yes
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
to 5%. If an emergency transfer from the employee benefits trust is
taken, it will need to be returned within two fiscal years. For example,
see P. 87 of the August 6, 2013 BOT meeting agenda for a quarterly
report:
http://www.redwoods.edu/district/board/documents/August62013packet.pdf
See P. 59 of the November 7, 2012 BOT meeting agenda for the action
item authorizing the transfer of funds, if necessary:
http://www.redwoods.edu/District/Board/documents/November72012packet.p
df
To permanently memorialize this commitment to the maintenance of a
minimum 5% fund balance and to create a policy for increasing the
fund balance above that minimum floor, the District’s shared
governance committee, the College Council, considering a policy
change. A revision to the College’s Board Policy (BP) 6200 Budget
Preparation is currently under shared governance review. That policy
revision would provide a fund balance policy as follows:
“Each year the Tentative and Final Budgets shall maintain an
unrestricted general fund balance as follows:
a. If the fund balance is below 5 percent, the budget shall restore
the year-end fund balance to 5 percent;
b. If the fund balance is below 10 percent but greater than 5
percent, the budget shall steadily increase the fund balance to a
goal of 10 percent (equal to about 1.5 months of payroll
expenditures); and
c. If the fund balance is greater than 10 percent:
i. The budget may maintain the fund balance or steadily
reduce the fund balance to no less than 10 percent,
ii. or may increase the fund balance further, but shall
include an explanation of the need to accumulate an
excess fund balance above 10 percent (i.e. as a reserve
for potential mid-year cut in State funding, to fund a
multiyear strategic initiative, etc.).”
Once the College Council makes its recommendation, the
President/Superintendent will consider the recommendation and in turn
consider a recommendation to the Board of Trustees.
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EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
No
Yes
Yes
Yes
Partial
Yes
No
No
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
The 2013-14 Final Budget shows a beginning 5% fund balance
growing to a projected 5.3% by June 30, 2014.

Is the College’s fund balance stable or consistently increasing? The fund
balance is increasing due to a reduction of expenditures (Two
reorganizations and salary concessions), as well as increases in revenue.
http://www.redwoods.edu/district/board/documents/2013-14CRFinalBgtBOT910-2013_000.PDF

III.

Is the fund balance increasing due to on-going revenue increases and/or
expenditure reductions? As noted in question I, the District balanced
the 2013-14 budget primarily through employee salary concessions and
two rounds of reorganizations and reductions in force (RIF).
Enrollment - Is this area acceptable?
Has the College’s enrollment been increasing or stable for multiple
years? The District’s enrollment has contracted for any number of
reasons. However, the State recently revised its funding priorities. Due
to new restrictions on “repeatability”, etc., the District revised its
enrollment forecast to reflect a reasonable and conservative enrollment
forecast. Therefore, in this case a “No” more appropriately represents
the District reacting conservatively and appropriately to changes in its
funding forecast.
The four revised funding priorities (the “Core Missions”) are noted in
the June 2013 update to the Strategic Plan for the State Chancellor’s
Office:
1. Transfer Education
2. Basic Skills and English Language Proficiency
3. Economic and Workforce Development
4. Associates Degrees and Certificates
See Figure 1 on the 8th page of this pdf:
http://californiacommunitycolleges.cccco.edu/Portals/0/reportsTB/2013
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
StrategicPlan_062013.pdf

Are the College’s enrollment projections updated at least semiannually?
Yes
Yes

Are staffing adjustments consistent with the enrollment trends?
Yes
Yes

Does the College analyze enrollment and full time equivalent students
(FTES) data?
Yes
Yes

Does the College track historical data to establish future trends between
P-1 and annual for projection purposes?
Yes
Yes

Has the College avoided stabilization funding? The District missed its
2011-12 enrollment target and missed again in 2012-13. The 2013-14
enrollment target reverses the declining trend and is forecasted above
the stability funding level for 2013-14. The multiyear enrollment
forecast projects to continue enrollment increases, but not enough to
rebuild enrollments back up to 2011-12 levels.
No
No
No
Yes
No
Yes
No
Yes
http://inside.redwoods.edu/StrategicPlanning/EnrollmentManagement/docume
nts/1.2013-14FTESTargetsfromEMCtoBPCfinal02-11-13.pdf
IV.

Unrestricted General Fund Balance – Is this area acceptable?
Is the College’s unrestricted general fund balance consistently
maintained at or above the recommended minimum prudent level (5% of
the total unrestricted general fund expenditures)? The 2012-13 fund
balance will increase to 5% and the 2013-14 fund balance is forecasted
to increase further.
http://www.redwoods.edu/district/board/documents/2013-14CRFinalBgtBOT910-2013_000.PDF

Is the College’s unrestricted fund balance maintained throughout the
year? To address late payments by the State of California (“Payment
deferrals”), the District accesses Tax and Revenue Anticipation Notes
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Yes
Yes
Yes
Yes
Yes
Yes
Partial
Yes
No
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
(TRANs) each year to assure a reasonable and prudent level of cash
flow each month of the year. The District’s budget anticipates
maintaining at least a 5% fund balance throughout 2013-14.
V.
Cash Flow Borrowing - Is this area acceptable?

Can the College manage its cash flow without interfund borrowing?
The 2012-13 fund balance will increase to 5% and the 2013-14 fund
balance is forecasted to increase further. The President/Superintendent
may need to make a transfer of funds from the employee benefits trust to
bring the unrestricted fund balance up to 5%, but such a transfer, if
needed, will not be a loan.

Is the College repaying TRANS and/or borrowed funds within the
required statutory period?
VI.

Bargaining Agreements - Is this area acceptable?
Has the College settled bargaining agreements within new revenue
sources during the past three years? The District recently settled with
both bargaining units as noted below. However, new revenue sources to
fund COLAs have been restricted by certain fiscal stability tests as
described below:
 The District and the California School Employees Association
(CSEA) ratified a collective bargaining agreement for the period July
1, 2013 through June 30, 2015. The agreement includes a 6.5%
permanent salary concession.
http://www.redwoods.edu/district/board/documents/CSEACollectiveBargaini
ngAgreement-2013-2015.pdf
a. The District and the College of the Redwoods Faculty Organization
(CRFO) ratified a collective bargaining agreement for the period July
1, 2013 through June 30, 2016. The agreement includes an 8.7%
permanent salary concession for full-time faculty and an 8.0%
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Yes
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
concession for associate faculty. Also, new full-time faculty may be
hired at steps 1 through 5, whereas previously new hires could come at
steps 1 through 10.
http://www.redwoods.edu/district/board/documents/CRFOCollectiveBargainin
gAgreement-2013-2016.pdf
 Both collective bargaining agreements allow for future adjustments to
the step schedule (i.e. Cost of Living “COLA” increases) only when
the District’s fund balance is budgeted to stay above 6% and then
only when the State increases the funding per FTES in the
Chancellor’s Office apportionment model by more than 1.6%. Only
then can the amount above 1.6% be added to the step schedule as a
COLA.
 In years when the fund balance is budgeted below 6%, then any
increase to the step schedules will be temporarily withheld until the
fund balance can be maintained at 6% or better.
 This language will protect the District from funding a COLA during a
weak fiscal period.
 In years when the State funds an inflationary increase. The 1.6%
threshold will provide a sustainable funding source to help the
District cover items such as cost increases in health and welfare
benefits plans and increases in operating expenditures.

Did the College conduct a pre-settlement analysis identifying an
ongoing revenue source to support the agreement? As noted
immediately above, both agreements allow COLA increases only when
the State funds an inflationary increase, and even then the District will
only fund the COLA into the step schedule subject to the fund balance
test above and the test that requires at least a 1.6% increase in state
funding. The analysis that arrived at this solution was primarily driven
by confidential District/CRFO negotiations in a collaborative, interest
based approach to collective bargaining. These discussions are included
in confidential meeting recollections and notes.
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Yes
Yes
Partial
Yes
No
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
The District recognizes that potential increases in health and welfare
costs could occur. However, the exact magnitude of any future health
and welfare cost increases beyond 2013-14 are not known yet. Some
community college districts have implemented funding caps and other
cost control mechanisms. The District’s plan is to use up to 1.6% in any
State funded increases during the contract term to help offset cost
increases. However, if the inflationary increase from the State is
insufficient to cover health and welfare cost increases and other cost
increases in a given year, then the District has available contract
reopeners for each and every contract year. A reopener may be used to
collaboratively negotiate a solution to such a future fiscal problem.

Did the College correctly identify the related costs?

Did the College address budget reductions necessary to sustain the total
compensation increase? As discussed above, units agreed to salary
concessions. Any increases to the step schedules (COLA) must be
funded by the State, must meet the fund balance test described above,
and will only be for the amount of any state funded increase above 1.6%
each year.
VII.
Unrestricted General Fund Staffing - Is this area acceptable?

Is the College ensuring it is not using one-time funds to pay for
permanent staff or other ongoing expenses?
No
Yes

Is the percentage of College general fund budget allocated to salaries
and benefits at or less than the Statewide average (i.e. the Statewide
average for 2003-04 is 85%)? While it is not yet known if the District’s
percentage will fall to the middle or less than the Statewide average, the
implementation of two rounds of reorganization and reduction in force
(RIF) and across-the-board salary concessions from all employee groups
in the 6.5% to 9.0% will surely contribute to reducing the District’s
payroll percentage. Also, regardless of the District’s placement, the
No
Yes
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
2013-14 budget has been implemented with conservative fiscal policies
and in a sustainable manner.
VIII.

Internal Controls - Is this area acceptable?
Does the College have adequate internal controls to insure the integrity
of the general ledger? See P. 55 of the 2011-12 Audited Financial
Statements for this notation, “We did not identify any deficiencies in
internal control over financial reporting that we consider to be material
weaknesses, as defined above.”
http://www.redwoods.edu/District/BusinessOffice/documents/RedwoodsDistrtic
tFinalFS12.pdf

Does the College have adequate internal controls to safeguard the
College’s assets? [See p. 65 of Independent Auditors Report on Internal
Control at:
http://www.redwoods.edu/District/BusinessOffice/documents/FinalFSAudit2011
.pdf]
IX.
Management Information Systems - Is this area acceptable?

Is the College data accurate and timely?
Yes
Yes

Are the county and State reports filed in a timely manner? There have
been no major delays in report submissions. Also, Business Office staff
communicate with the other party (typically the State Chancellor’s
office) and keep them informed on progress.
Yes
Yes

Are key fiscal reports readily available and understandable? One
primary source for fiscal reports is the monthly Board of Trustees
meetings. For example see the August 6, 2012 BOT meeting agenda: P.
35 for the Monthly Financial Status Report, P. 87 for the Quarterly
Financial Status Report, and other budget reports.
Yes
Yes
http://www.redwoods.edu/District/Board/documents/August62013packet.pdf
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Yes
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
Another primary source for fiscal reports is the Budget Planning
Committee (BPC) which reviews budget forecasts and other reports.
http://inside.redwoods.edu/BudgetPlanning/
Another primary source for fiscal reports is the Business Office
webpage.
http://www.redwoods.edu/District/BusinessOffice/reports.asp
X.
Position Control – Is this area acceptable?

Is position control integrated with payroll?
Yes
Yes

Does the College control unauthorized hiring? The Board of Trustees
reviews a monthly report of hiring activities. For example, see p. 37 of
the August 6,20123 BOT meeting agenda packet:
Yes
Yes
Yes
Yes
Yes
Yes
http://www.redwoods.edu/District/Board/documents/August62013packet.pdf#p
age=37

XI.
Does the College have controls over part-time academic staff hiring?
Budget Monitoring - Is this area acceptable?

Is there sufficient consideration to the budget, related to long-term
bargaining agreements? Consideration of the Total Cost of Ownership
(TCO) is integrated into budget planning and collective bargaining
negotiation decisions.
Yes
Yes

Are budget revisions completed in a timely manner?
Yes
Yes

Does the College openly discuss the impact of budget revisions at the
board level? At each monthly meeting of the Board of Trustees, a
monthly financial status report is presented which includes any budget
revisions. The cover page for this spreadsheet includes a discussion of
any material changes. On a quarterly basis, the Board reviews a
Yes
Yes
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Oct
2012
Sept
2013
Yes
Yes
Partial
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
quarterly report that is also submitted to the State Chancellor’s Office.
For example, the Minutes from the June 4,2013 Board meeting includes
questions from the Board on the monthly financial status report as noted
on p. 9 of this document:
http://www.redwoods.edu/district/board/documents/August62013packet.
pdf
Also, p. 9 of this document includes discussion of the monthly financial
status report:
http://www.redwoods.edu/district/board/documents/March52013packet_
000.pdf

Are budget revisions made or confirmed by the board in a timely
manner after the collective bargaining agreements are ratified? For
example see the August 6, 2012 BOT meeting agenda action item: P. 36
for the Monthly Financial Status Report which includes a monthly
income statement with columns for the “Adopted Budget”, “Year-toDate Adjustments” to the budget and the “Current Budget” as of the
month reviewed.
http://www.redwoods.edu/District/Board/documents/August62013packet.pdf
See P. 91 of the August 6, 2013 BOT meeting agenda for the Board’s
ratification of the CSEA contract and P. 92 for the ratification of the
CRFO contract.
http://www.redwoods.edu/district/board/documents/August62013packet.pdf

Has the College’s long-term debt decreased from the prior fiscal year?
The District has not increased its Certificates of Participation (COPs)
debt. The District’s Employee Benefits Fund for post-employment
retirement benefits increased in 2011-12 due to employees opting into a
voluntary Supplemental Early Retirement incentive Program (SERP),
and the SERP costs have been included in the budget. The District
anticipates issuing the remaining $7.2 million of locally approved bond
authorization (Measure Q and Measure B) during 2013-14, but such
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
bonds are repaid through property tax assessments.
For 2013-14 the District has identified paying off the COP debt as a
priority. Paying off the SERP debt will be added the row that discusses
the COP debt for the chart for the 2013-14 Final Budget. See “CR
Priority Funding Plan for 2013-14” on P. 3 of the 2013-14 Tentative
Budget approved at the June 4, 2013 BOT meeting.
http://www.redwoods.edu/district/board/documents/TentativebudgetMayRevise
3-BOThandout.pdf

Has the College identified the repayment sources for the long-term debt?
Yes
Yes

Does the College compile annualized revenue and expenditure
projections throughout the year?
Yes
Yes
Yes
Yes
Yes
Yes
XII.
Retiree Health Benefits - Is this area acceptable? The Board of
Trustees approved a plan to allow the President/Superintendent to
transfer funds from the employee benefits trust to the general fund if
necessary to bring the general fund balance up to 5.0% by the close of
2012-13. However, the funds must be fully returned to the employee
benefits fund within two years to provide necessary cash flow to the
employee benefits fund. See P. 59 of the November 7, 2012 BOT
meeting agenda for the action item:
http://www.redwoods.edu/District/Board/documents/November72012packet.p
df
Please see Section II “Fund Balance – Is this area acceptable?” of this
report for a discussion of the possible transfer of funds from the
employee benefits fund.

Has the College completed an actuarial calculation to determine the
unfunded liability? The District’s most recent complete actuarial study
was completed in 2011. The actuary is currently preparing a complete
actuarial study.
http://www.redwoods.edu/District/BusinessOffice/documents/Acturarialstudy1Fi
nal2011Report.pdf
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EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Yes
Yes
Yes
Yes
Yes
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.

XIII.

Does the College have a plan for addressing the retiree benefits
liabilities?
Leadership/Stability - Is this area acceptable?
Has the College experienced recent turnover in its management team
(including the Chief Executive Officer, Chief Business Officer, and
Board of Trustees)? During 2011-12, the District hired a permanent
President/Superintendent, but this has not destabilized the District. See
the April 3, 2012 Board of Trustees meeting minutes on P. 10 of this
BOT meeting agenda packet:
http://www.redwoods.edu/District/Board/documents/rMay12012Packet.pdf
During 2012-13, the District hired a State Special Trustee. See P. 35 of
the BOT August 7, 2012 meeting agenda:
http://www.redwoods.edu/District/Board/documents/August72012Packet.pdf
Also in 2012-13, the District implemented its Round One
Reorganization and Reduction in Force (RIF) which included the
merging of the VP for Instruction with the VP for Student Success. See
this organization chart for the revised structure:
http://www.redwoods.edu/District/Board/documents/OrgChartasof11292012sta
ndardsize.pdf
See P. 37 of the BOT December 4, 2012 meeting agenda for the reorg
action item:
http://www.redwoods.edu/District/Board/documents/December42012packet.pdf
During 2013-14, the District implemented its Round Two
Reorganization and RIF which included a reorganization of the existing
Dean structure. See P. 61 of the July 9, 2013 BOT meeting agenda:
http://www.redwoods.edu/district/board/documents/July92013packet.pdf
These management changes were made to realize overall cost savings to
the District and to streamline decision-making, and are not expected to
destabilize the District.
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Yes
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
XIV.
College Liability – Is this area acceptable?

Has the College performed the proper legal analysis regarding potential
lawsuits that may require the College to maintain increased reserve
levels?
Yes
Yes

Has the College set up contingent liabilities for anticipated settlements,
legal fees, etc?
Yes
Yes
Yes
Yes
XV.
Reporting – Is this area acceptable?

Has the College filed the annual audit report with the System Office on
a timely basis?
Yes
Yes

Has the College taken appropriate actions to address material findings
cited in their annual audit report?
Yes
Yes

Has the College met the requirements of the 50 percent law? 2011-12
partial exemption was issued. 2012-13 was in compliance.
No
Yes

Have the Quarterly Financial Status Reports (CCFS-311Q), Annual
Financial and Budget Reports (CCFS-311), and Apportionment
Attendance Reports (CCFS-320) been submitted to the System Office
on or before the Stated deadlines?
Yes
Yes
As noted in the responses to the State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist, the District’s response has changed for the better in the following
areas:
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
District Responses to the State Chancellor’s Office Sound
Fiscal Management Self-Assessment Checklist
Oct
2012
Sept
2013
Better
Or
Worse?
Partial
Yes
Better
No
Yes
Better
No
Yes
Better
No
Yes
Better
Partial
Yes
Better
No
Yes
Better
Areas showing improvement:
I.
Deficit Spending - Is this area acceptable?

II.

Is the College spending within their revenue budget in
the current year?
Fund Balance – Is this area acceptable
Is the College’s fund balance stable or consistently
increasing?
III.
Enrollment - Is this area acceptable?
IV.
Unrestricted General Fund Balance – Is this area
acceptable?

Is the College’s unrestricted general fund balance
consistently maintained at or above the recommended
minimum prudent level (5% of the total unrestricted general
fund expenditures)?
No
Yes
Better

Is the College’s unrestricted fund balance maintained
throughout the year?
No
Yes
Better
Partial
Yes
Better
No
Yes
Better
VI.

Bargaining Agreements - Is this area acceptable?
Has the College settled bargaining agreements within new
revenue sources during the past three years?
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PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.

VII.
Did the College address budget reductions necessary to
sustain the total compensation increase?
Unrestricted General Fund Staffing - Is this area
acceptable?
Partial
Yes
Better
No
Yes
Better

Is the College ensuring it is not using one-time funds to pay
for permanent staff or other ongoing expenses?
No
Yes
Better

Is the percentage of College general fund budget allocated
to salaries and benefits at or less than the Statewide average
(i.e. the Statewide average for 2003-04 is 85%)?
No
Yes?
Better
Partial
Yes
Better
No
Yes
Better
XI.

XV.

Budget Monitoring - Is this area acceptable?
Has the College’s long-term debt decreased from the prior
fiscal year?
Reporting – Is this area acceptable?
Has the College met the requirements of the 50 percent
law? 2011-12 partial exemption was issued.
As noted in the responses to the State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist, the District’s responses in the following areas represent an area that
needs continued attention:
District Responses to the State Chancellor’s Office Sound Fiscal
Management Self-Assessment Checklist
Oct
2012
Sept
2013
Areas requiring due diligence by the District:
I.
Deficit Spending - Is this area acceptable?
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Sept
2013
No
Yes
No
Yes
Partial
Yes
No
Yes
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.

Has the College controlled deficit spending over multiple years?
The college has controlled deficit spending by returning to a positive net
revenue budget for 2013-14 and implementing permanent and on-going salary
concessions by all employees. The District’s 2013-14 budget shows a positive
net revenue. The two rounds of reorganization and reduction in force (RIF) and
the salary concessions from all employee groups in the 6.5% to 9.0% range
helped create a sustainable budget environment that will allow the District to
post a multiyear budget forecast with positive net revenue in each year.
II.
Fund Balance – Is this area acceptable
The District is coming out of a period of low fund balance that has been
reversed with material changes to the budget. The District will continue on this
positive revenue path to maintain fiscal stability.
III.
Enrollment - Is this area acceptable?
The District went on enrollment stability due to missing its 2011-12 and 201213 enrollment targets. The 2013-14 enrollment budget is set above the
Chancellor’s Office’s stability enrollment cap for 2013-14. Also, the State has
revised its enrollment priorities and restricted course repeatability. The issue
here is that the District must enroll students under the revised State rules and
maintain and sustain those enrollment levels to ensure continued fiscal stability.
IV.
Unrestricted General Fund Balance – Is this area acceptable?
The District’s fund balance fell below 5.0% at the close of books on June 30,
2012, but was restored to 5% by June 30, 2013. The District will sustain and
continue to improve the fund balance percent to at least 1.5 months of District
payroll or about 10%. Note that the District’s payroll annual budget is about
$21.6 million, so 1.5 months is about $2.7 million, which equates to a 10%
unrestricted general fund balance.
Standard IIID Self Assessement4 - Final Bgt.docx
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page 18 of 19
PRELIMINARY DRAFT – FOR DISCUSSION ONLY
EXHIBIT A: State Chancellor’s Office Sound Fiscal Management SelfAssessment Checklist
Oct
2012
Sept
2013
Note that the column titled “Oct 2012” shows the response on the District’s “Show Cause
Report” dated October, 15, 2012. The column titled, “Sep 2013” shows the updated response
from the District.
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