CABRILLO COMMUNITY COLLEGE DISTRICT
ANNUAL FINANCIAL REPORT
JUNE 30, 2013 AND 2012
CABRILLO COMMUNITY COLLEGE DISTRICT
TABLE OF CONTENTS
JUNE 30, 2013
FINANCIAL SECTION
Independent Auditors' Report
Management Discussions and Analysis (Required Supplementary Information)
Primary Government
Statements of Net Position
Statements of Revenues, Expenses, and Changes in Net Position
Statements of Cash Flows
Fiduciary Funds
Statements of Net Position
Statements of Changes in Net Position
Discretely Presented Component Unit – Cabrillo College Foundation
Statements of Financial Position
Statement of Activities
Statements of Cash Flows
Notes to Financial Statements
2
5
11
12
13
15
16
17
18
19
20
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Other Postemployment Benefit (OPEB) Funding Progress
50
SUPPLEMENTARY INFORMATION
District Organization
Schedule of Expenditures of Federal Awards
Schedule of Expenditures of State Awards
Schedule of Workload Measures for State General Apportionment
Reconciliation of Education Code Section 84362 (50 Percent Law) Calculation
Proposition 30 Education Protection Act (EPA) Expenditure Report
Reconciliation of Annual Financial & Budget Report CCFS–311 With Fund Financial Statement
Note to Supplementary Information
52
53
55
59
60
63
64
65
INDEPENDENT AUDITORS' REPORTS
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government Auditing
Standards
Report on Compliance with Requirements That Could Have a Direct and Material Effect on
Each Major Program and on Internal Control Over Compliance in Accordance with OMB
Circular A-133
Report on State Compliance
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Summary of Auditors' Results
Financial Statement Findings and Recommendations
Federal Awards Findings and Questioned Costs
State Awards Findings and Questioned Costs
Summary Schedule of Prior Audit Findings
67
69
71
74
75
76
77
79
FINANCIAL SECTION
1
INDEPENDENT AUDITORS' REPORT
Board of Trustees
Cabrillo Community College District
Aptos, California
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities and the discretely
presented component unit (Cabrillo College Foundation) of Cabrillo Community College District (the District) as
of and for the years ended June 30, 2013 and 2012, and the related notes to the financial statements, which
collectively comprise the District's basic financial statements as listed in the Table of Contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatements, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audits. We conducted our
audits in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the District's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
2
5000 Hopyard Road, Suite 335
Pleasanton, CA 94588
Tel: 925.734.6600
Fax: 925.734.6611
www.vtdcpa.com
FRESNO  LAGUNA HILLS  PALO ALTO  PLEASANTON  RANCHO CUCAMONGA  RIVERSIDE  SACRAMENTO
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the business-type activities and the discretely presented component unit of the District as of June 30,
2013 and 2012, and the changes in financial position and cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
Changes in Accounting Principles
As discussed in the Notes to the basic financial statements, the accompanying financial statements reflect certain
changes required as a result of the implementation of GASB Statement No. 62 for the year ended June 30, 2013.
These changes require a restatement of the beginning net position of the District as discussed in Note 16. Our
opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require the Management's Discussion
and Analysis and the Schedule of Other Postemployment Benefits (OPEB) Funding Progress as listed in the Table
of Contents be presented to supplement the basic financial statements. Such information, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audits of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audits were conducted for the purpose of forming opinions on the financial statements that collectively
comprise the District's basic financial statements. The supplementary information listed in the Table of Contents,
including the Schedule of Expenditures of Federal Awards, as required by U.S. Office of Management and
Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented
for purposes of additional analysis and is not a required part of the basic financial statements.
The supplementary information, including the Schedule of Expenditures of Federal Awards, is the responsibility
of management and was derived from and relates directly to the underlying accounting and other records used to
prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in
the audits of the basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the supplementary
information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
3
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 7, 2014, on our
consideration of the District's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report
is to describe the scope of our testing of internal control over financial reporting and compliance and the results of
that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards in considering
the District's internal control over financial reporting and compliance.
Pleasanton, California
January 7, 2014
4
CABRILLO COMMUNITY COLLEGE DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
USING THE ANNUAL REPORT
The purpose of this annual report is to provide readers with information about the activities programs and financial
condition of the Cabrillo Community College District (the District) as of June 30, 2013. The report consists of
three basic financial statements: the Statement of Net Position, Statement of Revenues, Expenses, and Changes in
Net Position, and Statement of Cash Flows and provides information about the District as a whole. This section of
the annual financial report presents our discussion and analysis of the District's financial performance during the
fiscal year that ended on June 30, 2013. Responsibility for the completeness and accuracy of this information rests
with the District management.
OVERVIEW OF THE FINANCIAL STATEMENTS
Cabrillo Community College District's financial statements are presented in accordance with Governmental
Accounting Standards Board Statements No. 34, Basic Financial Statements - and Management's Discussion and
Analysis - for State and Local Governments and No. 35, Basic Financial Statements - and Management Discussion
and Analysis - for Public College and Universities. These statements allow for the presentation of financial activity
and results of operations which focuses on the District as a whole. The entity-wide financial statements present the
overall results of operations whereby all of the District's activities are consolidated into one total versus the
traditional presentation by fund type. The focus of the Statement of Net Position is designed to be similar to the
bottom line results of the District. This statement combines and consolidates current financial resources with
capital assets and long-term obligations. The Statement of Revenues, Expenses, and Changes in Net Position
focuses on the costs of the District's operational activities with revenues and expenses categorized as operating and
nonoperating, and expenses are reported by natural classification. The Statement of Cash Flows provides an
analysis of the sources and uses of cash within the operations of the District.
The California Community Colleges Chancellor's Office has recommended that all State community colleges
follow the Business-Type Activity (BTA) model for financial statement reporting purposes.
FINANCIAL HIGHLIGHTS

The District's primary funding source is based upon apportionment received from the State of California.
The primary basis of this apportionment is the calculation of Full Time Equivalent Students (FTES).
During the 2012-2013 fiscal year, the factored reported FTES were 10,894 as compared to 11,142 in the
2011-2012 fiscal year. The fully funded cap for fiscal year 2012-2013 is 10,894.

The District continued several construction and modernization projects during 2012-13. These projects are
funded both through State construction revenues and through our voter approved general obligation bond.

Costs for employee salaries and benefits decreased compared to the 2011-12 fiscal year due to overall
budget reductions undertaken by the district in an effort to balance its structural deficit as well as a
significant number of retirements which occurred during the year. It is important to note that employee
benefits costs include $359,715 for unfunded future retiree health benefits and $1,177,234 for current
retiree health benefits. The increase in the benefit costs has been due to continued rising costs of health and
welfare benefits paid on behalf of both current employees and retirees and increased contribution rates for
PERS retirement contributions.

During the 2012-2013 fiscal year, the District provided approximately $17 million in financial aid to
students attending classes at the college. This aid was provided in the form of grants, scholarships, loans,
and tuition reductions funded through the Federal government, State Chancellor's Office, and local funding.
5
CABRILLO COMMUNITY COLLEGE DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
THE DISTRICT AS A WHOLE
Net Position
Table 1
ASSETS
Current Assets
Cash and investments
Accounts receivable (net)
Other current assets
Total Current Assets
Noncurrent Assets
Capital assets (net)
Other noncurrent assets
Total Noncurrent Assets
Total Assets
2013
$ 42,971,289
16,248,986
809,676
60,029,951
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities
Current portion of long-term debt
Total Current Liabilities
Long-term Debt
Total Liabilities
NET POSITION
Invested in capital assets
Restricted
Unrestricted
Total Net Position
6
2012
$
2011
36,155,191
19,571,401
1,261,780
56,988,372
$ 45,997,599
15,791,039
1,301,810
63,090,448
284,497,099
497,832
284,994,931
345,024,882
246,608,746
516,980
247,125,726
304,114,098
248,905,839
536,128
249,441,967
312,532,415
19,667,522
7,578,779
27,246,301
180,132,421
207,378,722
15,474,396
6,109,916
21,584,312
186,366,874
207,951,186
15,671,191
6,003,391
21,674,582
189,392,408
211,066,990
111,744,786
13,241,307
12,660,067
$ 137,646,160
71,878,557
11,158,776
13,125,579
96,162,912
70,809,709
10,983,617
19,672,099
$ 101,465,425
$
CABRILLO COMMUNITY COLLEGE DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
Operating Results for the Year
The results of this year's operations for the District as a whole are reported in the Statement of Revenues,
Expenses, and Changes in Net Position.
Table 2
Operating Revenues
Tuition and fees
Auxiliary sales and charges
Total Operating Revenues
Operating Expenses
Salaries and benefits
Payment to students
Supplies, maintenance and other
Depreciation
Total Operating Expenses
Loss on Operations
Nonoperating Revenues
State apportionments
Property taxes
Grants and contracts
Net interest expense and bond refunding
Other nonoperating revenues (expenses)
Total Nonoperating Revenue
Other Revenues
State and local capital income
Net Increase in Net Position
$
$
2013
7,699,152
2,197,173
9,896,325
$
2012
6,369,695
2,719,868
9,089,563
$
2011
6,283,278
3,028,894
9,312,172
58,658,217
17,811,715
13,642,728
8,810,150
98,922,810
(89,026,485)
61,790,891
19,661,561
14,666,160
7,894,110
104,012,722
(94,923,159)
61,813,758
17,633,290
12,978,061
5,334,778
97,759,887
(88,447,715)
30,252,987
33,118,151
28,348,459
1,620,000
4,259,413
97,599,010
30,011,383
31,811,941
31,513,756
(9,468,434)
5,140,827
89,009,473
36,595,097
30,703,440
29,995,183
(9,670,464)
9,542,649
97,165,905
237,190
8,809,715
611,173
$ (5,302,513)
$
1,825,312
10,543,502
The District's primary revenue fund is the State apportionment calculation which is comprised of three sources
of revenues: local property taxes, student enrollment fees, and State apportionment.
Auxiliary revenue consists of the bookstore operations. The college contracted with Barnes & Noble to provide
services to the students and faculty of the college. The operations are self-supporting and contribute to the
student programs on each campus.
Grant and contract revenues relate primarily to student financial aid as well as to specific Federal and State
grants received for programs serving the students and programs of the District. These grant and program
revenues are restricted as to the allowable expenses related to the programs.
Tuition and fee revenue includes enrollment fees of $5,012,330 for 2012-2013 and $3,997,233 for 2011-2012.
The balance of the tuition and fee revenue line consists of other fees and revenues.
The District implemented GASB 62 during 2012-13. One of the provisions of GASB 62 included the
capitalization of interest expense association with construction. The implementation of this new accounting
standard moved interest costs from expense to building capital assets on the statement of net position.
7
CABRILLO COMMUNITY COLLEGE DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
Changes in Cash Position
Table 3
2013
Cash Provided by (Used in)
Operating activities
Noncapital financing activities
Capital financing activities
Investing activities
Net Increase (Decrease) in Cash
Cash, Beginning of Year
Cash, End of Year
$
(80,440,319)
89,857,415
(2,650,180)
49,182
6,816,098
36,155,191
$ 42,971,289
2012
2011
$ (87,138,180)
84,607,535
(7,452,223)
140,460
(9,842,408)
45,997,599
$ 36,155,191
$ (84,697,681)
93,922,646
(5,339,957)
94,987
3,979,995
42,017,604
$ 45,997,599
The Statement of Cash Flows in the financial statements provides more detailed information about our cash
receipts and payments during the year. This statement also assists users in assessing the District's ability to
meet its obligations as they come due and its need for external financing. Our primary operating receipts are
student tuition and fees and Federal, State, and local grants and contracts. The primary operating expense of
the District is the payment of salaries and benefits to instructional and classified support staff.
While State apportionment revenues and property taxes are the primary source of noncapital related revenue,
the GASB accounting standards require that this source of revenue is shown as non-operating revenue as it
comes from the general resources of the State and not from the primary users of the college's programs and
services – our students. The District depends upon this funding to continue the current level of operations.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At June 30, 2013, the District had $284.5 million in a broad range of capital assets, including land, buildings,
and furniture and equipment. At June 30, 2012, our net capital assets were $279.3 million. The District is
currently in the process of completing a capital improvement program with construction ongoing throughout
the college campus. These projects are primarily funded through our general obligation bonds. These projects
are accounted for within our Construction in Progress account until the project is completed at which time the
cost of the buildings and/or improvements will be brought in to the depreciable Buildings and Improvement
category.
Capital projects are continuing through the 2013-2014 fiscal year and beyond with primary funding through our
general obligation bond.
8
CABRILLO COMMUNITY COLLEGE DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
Table 4
Land and construction in progress
Buildings and improvements
Furniture and equipment
Subtotal
Accumulated depreciation
Total
Balance
Beginning of
Year
$ 15,792,004
305,023,748
19,156,484
339,972,236
(60,689,957)
$ 279,282,279
Additions
5,611,775
19,193,347
408,021
25,213,143
(8,810,150)
$ 16,402,993
$
Deletions
$ (11,188,173)
(11,188,173)
$ (11,188,173)
Balance End of
Year
$ 10,215,606
324,217,095
19,564,505
353,997,206
(69,500,107)
$ 284,497,099
Obligations
At the end of the 2012-2013 fiscal year, the District had $181.5 million in general obligation bonds outstanding.
These bonds are repaid annually in accordance with the obligation requirements through an increase in the
assessed property taxes on property within the Cabrillo Community College District boundaries. Other
obligations for the District include Certificates of Participation issued to fund various capital improvement
projects throughout the District, capital leases, and other notes payable.
In addition to the above obligations, the District is obligated to employees of the District for vacation and load
banking benefits.
Table 5
General obligation bonds
Certificates of participation
Other liabilities
Total Long-term Debt
Balance
Beginning of
Year
$ 187,275,132
1,735,000
3,466,658
$ 192,476,790
Amount due within one year
Additions
$ 42,561,511
1,529,860
483,888
$ 44,575,259
Deletions
$ (48,308,501)
(694,900)
(337,448)
$ (49,340,849)
Balance End of
Year
$ 181,528,142
2,569,960
3,613,098
$ 187,711,200
$
7,642,280
GENERAL FUND BUDGETARY HIGHLIGHTS
Over the course of the year, the District revises its budget as it attempts to deal with unexpected changes in
revenues and expenditures. The Board of Trustees adopted the final amendment to the budget for the
2012-2013 fiscal year on September 17, 2012.
Within the Unrestricted General Fund, operating costs have continually increased. The State Budget has not
kept pace with the increased operating costs, primarily in health and welfare benefits, especially in regards to
the need to recognize post retirement benefits.
9
CABRILLO COMMUNITY COLLEGE DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
ECONOMIC FACTORS AFFECTING THE FUTURE OF THE CABRILLO COMMUNITY COLLEGE
DISTRICT
The economic position of the District is closely tied to the State of California as State apportionments and
property taxes allocated to the District represent approximately 93 percent of the total unrestricted sources of
revenues received within the General Fund. The District’s student enrollment is currently down from the prior
year. There is uncertainty as to the actual level of funding the District will receive for student enrollment. Due
to the implementation of legislative changes in instructional activities currently funded i.e. course repeatability,
etc, the District continues to monitor enrollment and operating costs of the District to ensure ongoing financial
stability and retain the reserve levels required by our Board of Trustees and the State Chancellor's Office.
CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, students, investors and creditors with a
general overview of the District's finances and to show the District's accountability for the money it receives. If
you have questions about this report or need any additional financial information, contact the Cabrillo
Community College District, Victoria Lewis, Vice President of Administrative Services by phone at 831-4796406 or by email at vilewis@cabrillo.edu.
10
CABRILLO COMMUNITY COLLEGE DISTRICT
STATEMENTS OF NET POSITION – PRIMARY GOVERNMENT
JUNE 30, 2013AND 2012
2013
ASSETS
Current Assets
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable, net
Due from fiduciary funds
Prepaid expenses
Deferred charges
Inventories
Total Current Assets
Noncurrent Assets
Deferred charges - noncurrent portion
Nondepreciable capital assets
Depreciable capital assets, net of depreciation
Total Noncurrent Assets
TOTAL ASSETS
$
LIABILITIES
Current Liabilities
Accounts payable
Interest payable
Tax and revenue anticipation note
Early retirement incentive
Due to fiduciary funds
Deferred revenue
Certificates of participation - current portion
Lease obligations - current portion
Related party liability - current portion
Bonds payable - current portion
Total Current Liabilities
Noncurrent Liabilities
Compensated absences payable
Certificates of participation - noncurrent portion
Lease obligations - noncurrent portion
Related party liability - noncurrent portion
OPEB liability
Bonds payable - noncurrent portion
Total Noncurrent Liabilities
TOTAL LIABILITIES
NET POSITION
Net investment in capital assets
Restricted for:
Debt service
Educational programs
Unrestricted
TOTAL NET POSITION
$
The accompanying notes are an integral part of these financial statements.
11
25,149,836
17,821,453
16,248,986
188,169
602,359
19,148
60,029,951
2012
$
14,654,502
21,500,689
19,571,401
145,001
505,949
19,148
591,682
56,988,372
497,832
10,215,606
274,281,493
284,994,931
345,024,882
516,980
15,792,004
230,816,742
247,125,726
304,114,098
3,416,949
2,225,241
8,825,505
79,300
17,229
5,103,298
618,510
6,993
44,000
6,909,276
27,246,301
4,003,414
2,323,986
4,007,525
126,000
973
5,012,498
255,000
5,854,916
21,584,312
959,060
1,951,450
26,225
62,895
2,513,925
174,618,866
180,132,421
207,378,722
1,294,760
1,480,000
2,171,898
181,420,216
186,366,874
207,951,186
111,744,786
71,878,557
11,172,407
2,068,900
12,660,067
137,646,160
10,311,439
847,337
13,125,579
96,162,912
$
CABRILLO COMMUNITY COLLEGE DISTRICT
STATEMENTS OF REVENUES, EXPENSES,
AND CHANGES IN NET POSITION – PRIMARY GOVERNMENT
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
OPERATING REVENUES
Student Tuition and Fees
Less: Scholarship discount and allowance
Net tuition and fees
Auxiliary Enterprise Sales and Charges
Bookstore
TOTAL OPERATING REVENUES
OPERATING EXPENSES
Salaries
Employee benefits
Payment to students
Supplies, materials, and other operating expenses and services
Depreciation
TOTAL OPERATING EXPENSES
OPERATING LOSS
NONOPERATING REVENUES (EXPENSES)
State apportionments, noncapital
Local property taxes, levied for general purposes
Local property taxes, levied for other specific purposes
Federal revenues
State revenues
Investment income, net
Interest expense on capital related debt
Gain on debt refunding
Transfer from fiduciary funds
Transfer to fiduciary funds
Other nonoperating revenues (expenses)
TOTAL NONOPERATING REVENUES (EXPENSES)
INCOME (LOSS) BEFORE OTHER REVENUES AND EXPENSES
State revenues, capital
CHANGE IN NET POSITION
NET POSITION, BEGINNING OF YEAR
RESTATEMENT
NET POSITION, END OF YEAR
The accompanying notes are an integral part of these financial statements.
12
2013
$
13,791,950
(6,092,798)
7,699,152
2012
$
11,167,934
(4,798,239)
6,369,695
2,197,173
9,896,325
2,719,868
9,089,563
41,408,446
17,249,771
17,811,715
13,642,728
8,810,150
98,922,810
43,456,598
18,334,293
19,661,561
14,666,160
7,894,110
104,012,722
(89,026,485)
(94,923,159)
30,252,987
19,708,538
13,409,614
19,645,928
8,702,531
49,182
(49,182)
1,620,000
324,729
(154,530)
4,089,213
97,599,010
30,011,383
18,692,185
13,119,756
23,179,690
8,334,066
140,460
(9,608,894)
358,253
(156,388)
4,938,962
89,009,473
8,572,525
237,190
(5,913,686)
611,173
8,809,715
96,162,912
32,673,533
$ 137,646,160
(5,302,513)
101,465,425
$ 96,162,912
CABRILLO COMMUNITY COLLEGE DISTRICT
STATEMENTS OF CASH FLOWS – PRIMARY GOVERNMENT
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
2013
CASH FLOWS FROM OPERATING ACTIVITIES
Tuition and fees
Payments to vendors for supplies and services
Payments to or on behalf of employees
Payments to students for scholarships and grants
Auxiliary enterprise sales and charges:
Bookstore
Net Cash Flows Used For Operating Activities
$
7,371,482
(13,432,911)
(58,764,348)
(17,811,715)
2012
$
6,441,732
(14,700,892)
(61,937,327)
(19,661,561)
2,197,173
(80,440,319)
2,719,868
(87,138,180)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
State apportionments
Property taxes - nondebt related
Federal grants and contracts
State grants and contracts
Local grants and contracts
Student organization and other agency transactions
Net Cash Flows From Noncapital Financing Activities
32,205,583
19,708,538
20,875,233
8,613,782
8,284,080
170,199
89,857,415
27,569,943
18,692,185
22,556,884
7,285,558
8,301,100
201,865
84,607,535
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES
Purchase of capital assets
State revenue, capital projects
Property taxes - related to capital debt
Cash received from issuance of debt
Principal paid on capital debt
Principal partially refunded on capital debt
Interest paid on capital debt
Net Cash Flows Used For Capital Financing Activities
(5,611,775)
357,741
13,409,614
44,198,266
(8,036,649)
(40,125,000)
(6,842,377)
(2,650,180)
(11,836,724)
272,430
13,119,756
8,005,085
(7,313,407)
(9,699,363)
(7,452,223)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received from investments
Net Cash Flows From Investing Activities
CHANGE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
The accompanying notes are an integral part of these financial statements.
13
49,182
49,182
$
6,816,098
36,155,191
42,971,289
140,460
140,460
$
(9,842,408)
45,997,599
36,155,191
CABRILLO COMMUNITY COLLEGE DISTRICT
STATEMENTS OF CASH FLOWS - PRIMARY GOVERNMENT, Continued
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
RECONCILIATION OF NET OPERATING LOSS TO NET CASH FLOWS
FROM OPERATING ACTIVITIES
Operating loss
Adjustments to Reconcile Operating Loss to Net Cash Flows used for
Operating Activities:
Depreciation and amortization expense
Changes in Assets and Liabilities:
Receivables, net
Stores inventories
Prepaid expenses
Due from fiduciary funds
Accounts payable and accrued liabilities
Deferred revenue
Total Adjustments
Net Cash Flows Used For Operating Activities
2013
2012
$ (89,026,485)
$ (94,923,159)
8,810,150
7,894,110
(327,670)
(96,410)
(43,168)
(6,621)
249,885
8,586,166
$ (80,440,319)
(201,681)
88,373
(26,391)
(21,952)
(221,198)
273,718
7,784,979
$ (87,138,180)
CASH AND CASH EQUIVALENTS CONSIST OF THE FOLLOWING:
Cash and cash equivalents
Restricted cash and cash equivalents
Total Cash and Cash Equivalents
$ 25,149,836
17,821,453
$ 42,971,289
$ 14,654,502
21,500,689
$ 36,155,191
NON CASH TRANSACTIONS
On behalf payments for benefits
$
$
The accompanying notes are an integral part of these financial statements.
14
1,212,218
1,173,504
CABRILLO COMMUNITY COLLEGE DISTRICT
STATEMENTS OF FIDUCIARY NET POSITION
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
2013
Agency
Funds
Trust
ASSETS
Cash and cash equivalents
Accounts receivable, net
Prepaid expenditures
Due from other funds
Total Assets
$
LIABILITIES
Accounts payable
Due to other funds
Deferred revenue
Due to student groups
Total Liabilities
34,021
31,721
65,742
NET POSITION
Reserved
Total Net Position
855,355
26,493
881,848
$
2012
$ 1,186,941
15,652
17,229
$ 1,219,822
2,585
156,448
1,489
1,059,300
$ 1,219,822
The accompanying notes are an integral part of these financial statements.
15
$
$
816,106
816,106
Agency
Funds
Trust
813,530
11,204
2,440
827,174
20,378
73,191
93,569
$
733,605
733,605
$ 1,124,072
17,108
1,105
$ 1,142,285
$
1,128
71,810
2,219
1,067,128
$ 1,142,285
CABRILLO COMMUNITY COLLEGE DISTRICT
STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
ADDITIONS
Local revenues
Total Additions
2013
Trust
$ 2,593,865
2,593,865
2012
Trust
$ 2,116,108
2,116,108
199,963
2,187,733
2,387,696
254,553
1,873,820
1,300
2,129,673
DEDUCTIONS
Books and supplies
Services and operating expenditures
Capital outlay
Total Deductions
OTHER FINANCING SOURCES (USES)
Operating transfers out
Change in Net Position
Net Position - Beginning
Net Position - Ending
$
The accompanying notes are an integral part of these financial statements.
16
(123,668)
82,501
733,605
816,106
$
(85,839)
(99,404)
833,009
733,605
CABRILLO COMMUNITY COLLEGE DISTRICT
DISCRETELY PRESENTED COMPONENT UNIT
CABRILLO COLLEGE FOUNDATION
STATEMENTS OF FINANCIAL POSITION
JUNE 30, 2013 AND 2012
2013
ASSETS
Current Assets
Cash and cash equivalents
Contributions receivable, net
Accounts receivable
Beneficial interest in split interest agreements
Prepaids and other assets
Notes receivable
Investments
Total Current Assets
Noncurrent Assets
Depreciable capital assets, net of depreciation
TOTAL ASSETS
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts payable, scholarships and projects payable
Other post employment benefits
TOTAL LIABILITIES
NET ASSETS
Unrestricted
Temporarily restricted
Permanently restricted
TOTAL NET ASSETS
TOTAL LIABILITIES AND NET ASSETS
The accompanying notes are an integral part of these financial statements.
17
$
4,318,174
2,125,577
5,978
282,249
64,149
106,895
18,381,452
25,284,474
2012
$
4,360,813
2,716,603
60,912
65,454
15,440,917
22,644,699
4,748
$ 25,289,222
9,134
$ 22,653,833
$
$
1,610,729
61,052
1,671,781
823,138
6,038,869
16,755,434
23,617,441
$ 25,289,222
1,892,995
44,249
1,937,244
779,378
4,151,548
15,785,663
20,716,589
$ 22,653,833
CABRILLO COMMUNITY COLLEGE DISTRICT
DISCRETELY PRESENTED COMPONENT UNIT
CABRILLO COLLEGE FOUNDATION
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2013
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED JUNE 30, 2012
Unrestricted
SUPPORT AND REVENUES
Contributions
Investment income (loss), net of expenses
Endowment management fee
In-kind contributions
Other income
Net assets released from restrictions
TOTAL SUPPORT AND REVENUES
$
EXPENSES
Program Services
Scholarships and awards
College support
Supporting Services
Management and general
Fundraising
TOTAL EXPENSES
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
$
401,678
4,972
256,617
27,844
138,954
2,037,049
2,867,114
2013
Temporarily
Permanently
Restricted
Restricted
$
2,111,750 $
1,745,816
66,804
(2,037,049)
1,887,321
969,771
969,771
Total
$
3,483,199
1,750,788
256,617
94,648
138,954
5,724,206
2012
$
3,946,666
(544,472)
224,859
156,700
131,629
3,915,382
788,225
1,460,774
-
-
788,225
1,460,774
672,731
2,477,715
319,389
254,966
2,823,354
-
-
319,389
254,966
2,823,354
304,194
312,472
3,767,112
43,760
1,887,321
969,771
2,900,852
148,270
4,151,548
6,038,869
15,785,663
$ 16,755,434
20,716,589
$ 23,617,441
20,568,319
$ 20,716,589
779,378
823,138
$
The accompanying notes are an integral part of these financial statements.
18
CABRILLO COMMUNITY COLLEGE DISTRICT
DISCRETELY PRESENTED COMPONENT UNIT
CABRILLO COLLEGE FOUNDATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
2013
CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets
Adjustments to reconcile change in net assets
to net cash provided (used) by operations
Depreciation
Change in valuation of split-interest agreement
Change in operating assets and liabilities
Contributions receivable
Accounts receivable
Prepaids and other assets
Accounts payable, scholarships and projects payable
Other post employment benefits
Net Cash Flows Provided (Used) By Operating Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Note receivable from District
Additions to investments
Net Cash Flows Used By Investing Activities
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
The accompanying notes are an integral part of these financial statements.
19
$ 2,900,852
4,386
(282,249)
2012
$
148,270
4,386
261,880
591,026
54,934
1,305
(282,266)
16,803
3,004,791
(1,011,532)
(6,963)
(65,454)
219,195
4,639
(445,579)
(106,895)
(2,940,535)
(3,047,430)
(235,716)
(235,716)
(42,639)
(681,295)
4,360,813
5,042,108
$ 4,318,174 $ 4,360,813
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
NOTE 1 - ORGANIZATION
The Cabrillo Community College District (the District) was established in 1959 as a political subdivision of the
State of California and provides post secondary educational services to residents of Santa Cruz. The District
operates under a locally elected seven-member Board of Trustees form of government, which establishes the
policies and procedures by which the District operates. The Board must approve the annual budgets for the
General Fund, special revenue funds, and capital project funds, but these budgets are managed at the department
level. Currently, the District operates one campus located in Aptos, California and a center in Watsonville and
Scotts Valley. While the District is a political subdivision of the State of California, it is not a component unit of
the State in accordance with the provisions of Governmental Accounting Standards Board (GASB) Statement No.
61.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Reporting Entity
The District has adopted GASB Statement No. 61, Determining Whether Certain Organizations are Component
Units. This statement amends GASB Statement No. 14, The Financial Reporting Entity, to provide additional
guidance to determine whether certain organizations, for which the District is not financially accountable, should
be reported as component units based on the nature and significance of their relationship with the District. The
three components used to determine the presentation are: providing a "direct benefit", the "environment and
ability to access/influence reporting", and the "significance" criterion. As defined by accounting principles
generally accepted in the United States of America and established by the Governmental Accounting Standards
Board, the financial reporting entity consists of the primary government, the District, and the following
component units:
Cabrillo College Foundation
The Cabrillo College Foundation (the Foundation) is a legally separate, tax-exempt component unit of the
District. The Foundation acts primarily as a fundraising organization to provide grants and scholarships to
students and support to employees, programs, and departments of the District. The board of the Foundation
consists of community members, alumni, and other supporters of the Foundation. Although the District does not
control the timing or amount of receipts from the Foundation, the majority of resources or income thereof that, the
Foundation holds and invests are restricted to the activities of the District by the donors. Because these restricted
resources held by the Foundation can only be used by, or for the benefit of, the District, the Foundation is
considered a component unit of the District. The Foundation is reported in separate financial statements because
of the difference in its reporting model, as further described below.
The Foundation is a not-for-profit organization under Internal Revenue Code (IRC) Section 501(c)( 3) that
reports, is financial results in accordance with Financial Accounting Standards Codifications. As such, certain
revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and
presentation features. No modifications have been made to the Foundation's financial information in the District's
financial reporting entity for these differences; however, significant note disclosures to the Foundation's financial
statements have been incorporated into the District's notes to the financial statements. Separately issued financial
statements may be obtained by contacting the Cabrillo College Foundation.
20
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Financing Corporation
The Cabrillo College Financing Corporation's financial activity is presented in the financial statements and
included in the Capital Projects Fund and the Debt Service Fund. Certificates of participation issued by the
Corporation are included as long-term liabilities in the government-wide financial statements. Individuallyprepared financial statements are not prepared for Cabrillo College Financing Corporation.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
For financial reporting purposes, the District is considered a special-purpose government engaged only in
business-type activities as defined by GASB Statements No. 34 and No. 35 as amended by GASB Statements
No. 37 and No. 38. This presentation provides a comprehensive entity-wide perspective of the District's assets,
liabilities, activities, and cash flows and replaces the fund group perspective previously required. Accordingly,
the District's financial statements have been presented using the economic resources measurement focus and the
accrual basis of accounting. The significant accounting policies followed by the District in preparing these
financial statements are in accordance with accounting principles generally accepted in the United States of
America as prescribed by GASB. Additionally, the District's policies comply with the California Community
Colleges Chancellor's Office Budget and Accounting Manual. Under the accrual basis, revenues are recognized
when earned, and expenses are recorded when an obligation has been incurred. All material intra-agency and
intra-fund transactions have been eliminated.
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is
recorded on the accrual basis when the exchange takes place. Available means that the resources will be collected
within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of
the current fiscal year. For the District, available means expected to be received within 60 days of fiscal year-end.
For the District operating revenues consist primarily of student fees and auxiliary activities through the bookstore
and cafeteria.
Non-exchange transactions, in which the District receives value without directly giving equal value in return,
include State apportionments, property taxes, certain Federal and State grants, entitlements, and donations. State
apportionment revenue is earned based upon criteria set forth from the Community Colleges Chancellor's Office
and includes reporting of full-time equivalent students (FTES) attendance. The corresponding apportionment
revenue is recognized in the period the FTES are generated. Revenue from property taxes is recognized in the
fiscal year in which the taxes are received. Revenue from certain grants, entitlements, and donations is
recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements
may include time and/or purpose requirements.
Operating expenses are costs incurred to provide instructional services including support costs, auxiliary services,
and depreciation of capital assets. All other expenses not meeting this definition are reported as non-operating.
Expenses are recorded on the accrual basis as they are incurred, when goods are received, or services are
rendered.
The District reports are based on all applicable GASB pronouncements, as well as applicable Financial
Accounting Standards Board (FASB) pronouncements issued on or before November 30, 1989, unless those
pronouncements conflict or contradict GASB pronouncements.
21
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
The financial statements are presented in accordance with the reporting model as prescribed in GASB Statement
No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments,
and GASB Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for Public
Colleges and Universities, as amended by GASB Statements No. 37 and No. 38. The business-type activities
model followed by the District requires the following components of the District's financial statements:



Management's Discussion and Analysis
Basic Financial Statements for the District as a whole including:
o Statements of Net Position - Primary Government
o Statements of Revenues, Expenses, and Changes in Net Position - Primary Government
o Statements of Cash Flows - Primary Government
o Financial Statements for the Fiduciary Funds including:
o Statements of Fiduciary Net Position
o Statements of Changes in Fiduciary Net Position
Notes to the Financial Statements
The following is a summary of the more significant policies:
Cash and Cash Equivalents
The District's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term
investments with original maturities of one year or less from the date of acquisition. Cash equivalents also
include unrestricted cash with county treasury balances for purposes of the Statement of Cash Flows. Restricted
cash and cash equivalents represent balances restricted by external sources such as grants and contracts or
specifically restricted for the repayment of capital debt.
Investments
In accordance with GASB Statement No. 31, Accounting and Reporting for Certain Investments and for External
Investment Pools, investments held at June 30, 2013 and 2012, are stated at fair value. Fair value is estimated
based on published market prices at year-end. Short-term investments have an original maturity date greater than
three months, but less than one year at a time of purchase. Long-term investments have an original maturity of
greater than one year. Investments for which there are no quoted market prices are not material.
Restricted Assets
Restricted assets arise when restrictions on their use change the normal understanding of the availability of the
asset. Such constraints are either imposed by creditors, contributors, grantors, or laws of other governments or
imposed by enabling legislation. Restricted assets represent investments required by debt covenants to be set
aside by the District for the purpose of satisfying certain requirements of the bonded debt issuance.
Accounts Receivable
Accounts receivable include amounts due from the Federal, State and/or local governments, or private sources, in
connection with reimbursement of allowable expenditures made pursuant to the District's grants and contracts.
Accounts receivable also consists of tuition and fee charges to students and auxiliary enterprise services provided
to students, faculty, and staff, the majority of each residing in the State of California. The District provides for an
allowance for uncollectible accounts as an estimation of amounts that may not be received. This allowance is
based upon management's estimates and analysis. The allowance was estimated at $3,422,713 and $3,242,782 for
the years ended June 30, 2013 and 2012.
22
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Prepaid Expenses
Prepaid expenditures or expenses represent payments made to vendors and others for services that will benefit
periods beyond June 30.
Capital Assets and Depreciation
Capital assets are long-lived assets of the District as a whole and include land, construction-in-progress, buildings,
leasehold improvements, infrastructure and equipment. The District maintains an initial unit cost capitalization
threshold of $5,000. Assets are recorded at historical cost, or estimated historical cost, when purchased or
constructed. The District’s infrastructure consists primarily of road network connecting the different buildings of
the campus. Donated capital assets are recorded at estimated fair market value at the date of donation.
Improvements to building and land that significantly increase the value or extend the useful life of the assets are
capitalized; the costs of routine maintenance and repairs that do not add to the value of the asset or materially
extend an asset's life are charged as an operating expense in the year in which the expense was incurred. Major
outlays for capital improvements are capitalized as construction-in-progress as the projects are constructed.
Depreciation of capital assets is computed and recorded utilizing the straight-line method. Estimated useful lives
of the various classes of depreciable capital assets are as follows: buildings and infrastructure, 50 years;
improvements, 25 years; equipment, 3 to 8 years.
Accrued Liabilities and Long-term Obligations
All payables, accrued liabilities, and long-term obligations are reported in the entity-wide financial statements.
Deferred Issuance Costs, Premiums and Discounts
Bond premiums and discounts as well as issuance costs are deferred and amortized over the life of the bonds
using the straight-line method.
Compensated Absences
Accumulated unpaid employee vacation benefits are accrued as a liability as the benefits are earned. The amounts
have been recorded in the fund from which the employees, who have accumulated the leave, are paid. Sick leave
is accumulated without limit for each employee based upon negotiated contracts. Leave with pay is provided
when employees are absent for health reasons; however, the employees do not gain a vested right to accumulated
sick leave. Employees are never paid for any sick leave balance at termination of employment or any other time.
Therefore, the value of accumulated sick leave is not recognized as a liability in the District's financial statements.
However, retirement credit for unused sick leave is applicable to all classified school members who retire after
January 1, 1999. At retirement, each member will receive .004 year of service credit for each day of unused sick
leave. Retirement credit for unused sick leave is applicable to all academic employees and is determined by
dividing the number of unused sick days by the number of base service days required to complete the last school
year, if employed full time.
23
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Deferred Revenue
Deferred revenue arises when potential revenue does not meet both the "measurable" and "available" criteria for
recognition in the current period or when resources are received by the District prior to the incurrence of
qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the
District has a legal claim to the resources, the liability for deferred revenue is removed from the combined balance
sheet and revenue is recognized. Deferred revenues include (1) amounts received for tuition and fees prior to the
end of the fiscal year that are related to the subsequent fiscal year and (2) amounts received from Federal and
State grants received before the eligibility requirements are met are recorded as deferred revenue.
Current Loans
Current loans consist of amounts outstanding at June 30, 2013, for Tax and Revenue Anticipation Notes The
notes were issued as short-term obligations to provide cash flow needs. This liability is offset with cash deposits
in the Santa Cruz County Treasurer, which have been set aside to repay the notes
Noncurrent Liabilities
Noncurrent liabilities include bonds and notes payable, certificates of participation, lease obligations, a related
party note, compensated absences, and OPEB obligations with maturities greater than one year.
Net Position
GASB Statements No. 34 and No. 35 report equity as "Net Position" and represent the difference between assets
and liabilities. The net position is classified according to external donor restrictions or availability of assets for
satisfaction of District obligations according to the following net asset categories:
Net Investment in Capital Assets: consist of capital assets, net of accumulated depreciation and outstanding
principal balances of debt attributable to the acquisition, construction, or improvement of those assets.
Net position is reported as restricted when there are limitations imposed of their use, either through enabling
legislation adopted by the District, or through external restrictions imposed by creditors, grantors, or laws or
regulations of other governments. The District first applies restricted resources when an expense is incurred
for purposes for which both restricted and unrestricted resources are available.
None of the District's net position has resulted from enabling legislation adopted by the District.
Unrestricted: Net position that is not subject to externally imposed constraints. Unrestricted net position
may be designated for specific purposes by action of the Board of Trustees or may otherwise be limited by
contractual agreements with outside parties.
When both restricted and unrestricted resources are available for use, it is the District's practice to use restricted
resources first and the unrestricted resources when they are needed.
24
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
State Apportionments
Certain current year apportionments from the State are based on financial and statistical information of the
previous year. Any corrections due to the recalculation of the apportionment are made in February of the
subsequent year and are recorded in the District's financial records when received. When known and measurable,
these recalculations and corrections are accrued in the year in which the FTES are generated.
Property Taxes
Secured property taxes attach as an enforceable lien on property as of January 1. The County Assessor is
responsible for assessment of all taxable real property. Taxes are payable in two installments on November 1 and
February 1 and become delinquent on December 10 and April 10, respectively. Unsecured property taxes are
payable in one installment on or before August 31. The County of Santa Cruz bills and collects the taxes on
behalf of the District. Local property tax revenues are recorded when received.
Board of Governors Grants (BOGG) and Fee Waivers
Student tuition and fee revenue is reported net of allowances and fee waivers approved by the Board of Governors
through BOGG fee waivers in the Statement of Revenues, Expenses, and Changes in Net Position. Scholarship
discounts and allowances represent the difference between stated charges for enrollment fees and the amount that
is paid by students or third parties making payments on the students' behalf. To the extent that fee waivers have
been used to satisfy tuition and fee charges, the District has recorded a scholarship discount and allowance.
Federal Financial Assistance Programs
The District participates in federally funded Pell Grants, SEOG Grants, and Federal Work-Study programs, as well as
other programs funded by the Federal government. Financial aid to students is either reported as operating expenses
or scholarship allowances, which reduce revenues. The amount reported as operating expense represents the portion
of aid that was provided to the student in the form of cash. Scholarship allowances represent the portion of aid
provided to students in the form of reduced tuition. These programs are audited in accordance with the Single Audit
Act Amendments of 1996, and the U.S. Office of Management and Budget's revised Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations and the related Compliance Supplement.
On-Behalf Payments
GASB Statement No. 24 requires direct on behalf payments for fringe benefits and salaries made by one entity to
a third party recipient for the employees for another legally separate entity be recognized as revenues and
expenditures by the employer entity. The State of California makes direct on behalf payments to the California
State Teachers' Retirement System (CalSTRS) and the California Public Employees' Retirement System
(CalPERS) on behalf of all community colleges in California. The California Department of Education has issued
a fiscal advisory instructing districts not to record the revenue and expenditures for the on behalf payments within
the funds and accounts of a district. The amount of the on behalf payments made for the District for the year
ended June 30, 2013, was $1,212,218 for CalSTRS. This amount is reflected in the District's audited financial
statements.
25
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Estimates
The preparation of the financial statements with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those estimates.
Interfund Activity
Interfund transfers and interfund receivables and payables are eliminated during the consolidation process in the
entity-wide financial statements.
Foundation Financial Statement Presentation
The Cabrillo College Foundation presents its financial statements in accordance with Statement of Financial
Accounting Codifications. Under these reporting requirements, the Foundation is required to report information
regarding its financial position and activities according to three classes of net assets: unrestricted net assets,
temporarily restricted net assets, and permanently restricted net assets. As permitted by the codification, the
Foundation does not use fund accounting.
Permanently Restricted Net Assets: Net assets subject to donor-imposed stipulations that they be
maintained permanently by the Foundation. Generally, the donors of these assets permit the Foundation to
use all or part of the income earned on related investments for general or specific purposes.
Temporarily Restricted Net Assets: Net assets subject to donor-imposed stipulations that will be met by
actions of the Foundation and/or the passage of time.
Unrestricted Net Assets: Net assets not subject to donor-imposed restrictions.
Revenues and expenses are recorded when incurred in accordance with the accrual basis of accounting. Revenues
are reported as increases in the unrestricted net assets classification unless use of the related assets is limited by
donor-imposed restrictions. Contributions, including unconditional promises to give, are recognized as revenue in
the period received. Conditional promises to give are not recognized as revenue until the conditions on which
they depend are substantially met. Contributions for in-kind gifts from outside sources are recorded at their fair
market value on the date of the donation.
Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or
liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit
donor stipulation or by law.
Investments are reported at fair value in accordance with FASB Accounting Standards Codification (ASC) 820,
Fair Value Measurements and Disclosures.
The Foundation is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the
Internal Revenue Code and related California Franchise Tax Codes.
26
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Changes in Accounting Principles
In March 2012, GASB issued Statement No. 62, Codification of Accounting and Financial Reporting Guidance
Contained in Pre November 30, 1989 FASB and AICPA Pronouncements. GASB Statement No. 62 establishes
standards of financial accounting and reporting for capitalizing interest cost as a part of the historical cost of
acquiring certain assets. For the purposes of applying this Statement, interest cost includes interest recognized on
obligations having explicit interest rates and interest imputed on certain types of payables, as well as interest
related to capital leases.
The District has implemented the provisions of this Statement for the year ended June 30, 2013. See Note 16 for
more information.
In June 2011, the GASB issued Statement No. 63, Financial Reporting of Deferred Outflows of Resources,
Deferred Inflows of Resources, and Net Position. This Statement provides financial reporting guidance for
deferred outflows of resources and deferred inflows of resources. Concepts Statement No. 4, Elements of
Financial Statements, introduced and defined those elements as a consumption of net assets by the government
that is applicable to a future reporting period, and an acquisition of net assets by the government that is applicable
to a future reporting period, respectively. Previous financial reporting standards do not include guidance for
reporting those financial statement elements, which are distinct from assets and liabilities.
Concepts Statement No. 4 also identifies net position as the residual of all other elements presented in a statement
of financial position. This Statement amends the net asset reporting requirements in Statement No. 34, Basic
Financial Statements—and Management's Discussion and Analysis—for State and Local Governments, and other
pronouncements by incorporating deferred outflows of resources and deferred inflows of resources into the
definitions of the required components of the residual measure and by renaming that measure as net position,
rather than net assets.
The District has implemented the provisions of this Statement for the year ended June 30, 2013. There was no
significant effect on the District as a result of implementing this Statement.
New Accounting Pronouncements
In March 2012, the GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities. This
Statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of
resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and
recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets
and liabilities.
Concepts Statement No. 4, Elements of Financial Statements, introduced and defined the elements included in
financial statements, including deferred outflows of resources and deferred inflows of resources. In addition,
Concepts Statement No. 4 provides that reporting a deferred outflow of resources or a deferred inflow of
resources should be limited to those instances identified by the Board in authoritative pronouncements that are
established after applicable due process. Prior to the issuance of this Statement, only two such pronouncements
have been issued. Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, requires the
reporting of a deferred outflow of resources or a deferred inflow of resources for the changes in fair value of
hedging derivative instruments, and Statement No. 60, Accounting and Financial Reporting for Service
Concession Arrangements, requires a deferred inflow of resources to be reported by a transferor government in a
qualifying service concession arrangement. This Statement amends the financial statement element classification
of certain items previously reported as assets and liabilities to be consistent with the definitions in Concepts
27
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Statement No. 4. This Statement also provides other financial reporting guidance related to the impact of the
financial statement elements deferred outflows of resources and deferred inflows of resources, such as changes in
the determination of the major fund calculations and limiting the use of the term deferred in financial statement
presentations.
The provisions of this Statement are effective for financial statements for periods beginning after December 15,
2012. Early implementation is encouraged.
In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions—an
amendment of GASB Statement No. 27. The primary objective of this Statement is to improve accounting and
financial reporting by state and local governments for pensions. It also improves information provided by state
and local governmental employers about financial support for pensions that is provided by other entities. This
Statement results from a comprehensive review of the effectiveness of existing standards of accounting and
financial reporting for pensions with regard to providing decision-useful information, supporting assessments of
accountability and inter-period equity, and creating additional transparency.
This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local
Governmental Employers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate to
pensions that are provided through pension plans administered as trusts or equivalent arrangements (hereafter
jointly referred to as trusts) that meet certain criteria. The requirements of Statements No. 27 and No. 50 remain
applicable for pensions that are not covered by the scope of this Statement.
The scope of this Statement addresses accounting and financial reporting for pensions that are provided to the
employees of state and local governmental employers through pension plans that are administered through trusts
that have the following characteristics:

Contributions from employers and non-employer contributing entities to the pension plan and earnings on
those contributions are irrevocable.

Pension plan assets are dedicated to providing pensions to plan members in accordance with the benefit terms.

Pension plan assets are legally protected from the creditors of employers, non-employer contributing entities,
and the pension plan administrator. If the plan is a defined benefit pension plan, plan assets also are legally
protected from creditors of the plan members.
This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources,
deferred inflows of resources, and expense/expenditures. For defined benefit pensions, this Statement identifies
the methods and assumptions that should be used to project benefit payments, discount projected benefit
payments to their actuarial present value, and attribute that present value to periods of employee service.
Note disclosure and required supplementary information requirements about pensions also are addressed.
Distinctions are made regarding the particular requirements for employers based on the number of employers
whose employees are provided with pensions through the pension plan and whether pension obligations and
pension plan assets are shared. Employers are classified in one of the following categories for purposes of this
Statement:

Single employers are those whose employees are provided with defined benefit pensions through singleemployer pension plans—pension plans in which pensions are provided to the employees of only one
employer (as defined in this Statement).
28
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012

Agent employers are those whose employees are provided with defined benefit pensions through agent
multiple-employer pension plans—pension plans in which plan assets are pooled for investment purposes, but
separate accounts are maintained for each individual employer so that each employer's share of the pooled
assets is legally available to pay the benefits of only its employees.

Cost-sharing employers are those whose employees are provided with defined benefit pensions through costsharing multiple-employer pension plans—pension plans in which the pension obligations to the employees
of more than one employer are pooled and plan assets can be used to pay the benefits of the employees of any
employer that provides pensions through the pension plan.
In addition, this Statement details the recognition and disclosure requirements for employers with liabilities
(payables) to a defined benefit pension plan and for employers whose employees are provided with defined
contribution pensions. This Statement also addresses circumstances in which a non-employer entity has a legal
requirement to make contributions directly to a pension plan.
This Statement is effective for fiscal years beginning after June 15, 2014. Early implementation is encouraged.
Comparative Financial Information
Comparative financial information for the prior year has been presented for additional analysis; certain amounts
presented in the prior year data may have been reclassified in order to be consistent with the current year's
presentation.
NOTE 3 - CASH AND INVESTMENTS
Policies and Practices
The District is authorized under California Government Code to make direct investments in local agency bonds,
notes, or warrants within the State; U.S. Treasury instruments; registered State warrants or treasury notes;
securities of the U.S. Government, or its agencies; bankers acceptances; commercial paper; certificates of deposit
placed with commercial banks and/or savings and loan companies; repurchase or reverse repurchase agreements;
medium term corporate notes; shares of beneficial interest issued by diversified management companies,
certificates of participation, obligations with first priority security; and collateralized mortgage obligations.
Investment in County Treasury - The District is considered to be an involuntary participant in an external
investment pool as the District is required to deposit all receipts and collections of monies with their County
Treasurer (Education Code Section (ECS) 41001). The fair value of the District's investment in the pool is
reported in the accompanying financial statements at amounts based upon the District's pro-rata share of the fair
value provided by the County Treasurer for the entire portfolio (in relation to the amortized cost of that portfolio).
The balance available for withdrawal is based on the accounting records maintained by the County Treasurer,
which is recorded on the amortized cost basis.
Investment in the State Investment Pool Restricted Cash – The District has a contractual requirement to keep one year’s COP payment in a reserve fund.
29
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
General Authorizations
Limitations as they relate to interest rate risk, credit risk, and concentration of credit risk are indicated in the
schedules below:
Maximum
Remaining
Maturity
5 years
5 years
5 years
5 years
180 days
270 days
5 years
1 year
92 days
5 years
N/A
N/A
5 years
N/A
N/A
N/A
Authorized
Investment Type
Local Agency Bonds, Notes, Warrants
Registered State Bonds, Notes, Warrants
U.S. Treasury Obligations
U.S. Agency Securities
Banker's Acceptance
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements
Reverse Repurchase Agreements
Medium-term Corporate Notes
Mutual Funds
Money Market Mutual Funds
Mortgage Pass-Through Securities
County Pooled Investment Funds
Local Agency Investment Fund (LAIF)
Joint Powers Authority Pools
Maximum
Percentage
of Portfolio
None
None
None
None
40%
25%
30%
None
20% of base
30%
20%
20%
20%
None
None
None
Maximum
Investment
In One Issuer
None
None
None
None
30%
10%
None
None
None
None
10%
10%
None
None
None
None
Summary of Deposits and Investments
Deposits and investments as of June 30, 2013, consist of the following:
Primary government
Cash in banks
Cash in revolving
Investments - cash equivalents
Total Deposits and Investments
$
$
Fiduciary government
Cash in banks
Investments - cash equivalents
Total Deposits and Investments
$
$
30
1,390,375
55,000
41,525,914
42,971,289
751,705
1,290,591
2,042,296
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to
changes in market interest rates. The District manages its exposure to interest rate risk by investing in the County
pool and purchasing a combination of shorter term and longer term investments and by timing cash flows from
maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary
to provide the cash flow and liquidity needed for operations.
Specific Identification of the District’s Investments
Information about the sensitivity of the fair values of the District's investments to market interest rate fluctuation
is provided by the following schedule that shows the distribution of the District's investment by maturity:
Investment Type - Primary government
Cost
U.S. Treasury
County Pool
346,500
41,179,414
$ 41,525,914
Total
Investment Type - Fiduciary funds
County Pool
Fair
Value
Maturity
Date
$
$
346,500
41,049,336
$ 41,395,836
0.13 Years
1.43 Years
Cost
$ 1,290,591
Fair
Value
$ 1,286,514
Maturity
Date
1.43 Years
Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.
This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
Presented below is the actual rating as of the year-end for each investment type.
Investment Type - Primary government
U.S. Agencies
County Pool
Total
Investment Type - Fiduciary funds
County Pool
31
Fair
Value
$ 346,500
41,049,336
$ 41,395,836
Not Required Rating as of
To Be
Year End
Rated
Aaa
$
- $ 346,500
41,049,336
$ 41,049,336 $ 346,500
Fair
Value
$ 1,286,514
Not Required Rating as of
To Be
Year End
Rated
Aaa
$ 1,286,514 $
-
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Concentration of Credit Risk
The investment policy of the District contains no limitations on the amount that can be invested in any one issuer
beyond the stipulated by the California Government code. There were no investments in any one issuer that
represent five percent or more of the total investments.
Custodial Credit Risk - Deposits
This is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District
does not have a policy for custodial credit risk. However, the California Government Code requires that a
financial institution secure deposits made by State or local governmental units by pledging securities in an
undivided collateral pool held by a depository regulated under State law (unless so waived by the governmental
unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total
amount deposited by the public agency. California law also allows financial institutions to secure public deposits
by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits and letters
of credit issued by the Federal Home Loan Bank of San Francisco having a value of 105 percent of the secured
deposits. As of June 30, 2013, $3,000,000 of the District's cash balance of approximately $3,754,000 was
exposed to custodial credit risk because it was uninsured but it is collateralized with securities held by the
pledging financial institution's trust department or agent, but not in the name of the District.
Custodial Credit Risk - Investments
This is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value
of its investments or collateral securities that are in possession of an outside party. As of June 30, 2013, the
District has no custodial credit risk on the investment in US Bank of $346,500.
32
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
NOTE 4 - ACCOUNTS RECEIVABLE
Accounts receivable for the District consisted primarily of intergovernmental grants, entitlements, interest, and
other local sources.
The accounts receivable are as follows:
Primary Government
2013
2012
Federal Government
Categorical aid
State Government
Apportionment
Categorical aid
Educational protection account
Restricted lottery
Construction funds
Local Government
Other local sources
Subtotal
Student receivables
Less allowance for uncollectible accounts
Subtotal
Total
$ 1,065,607
$ 2,294,212
8,903,589
543,061
546,285
261,022
120,551
11,402,470
612,770
824,376
-
1,554,071
12,994,186
1,510,443
16,644,271
6,677,513
(3,422,713)
3,254,800
$ 16,248,986
6,169,912
(3,242,782)
2,927,130
$ 19,571,401
Fiduciary Funds
2013
2012
Local Government
Other local sources
$
$
26,493
26,493
$
$
11,204
11,204
Discretely Presented Component Unit
At June 30, 2013 and 2012, the Foundation's contributions receivable consisted of $2,125,577 and $2,716,603
respectively. These amounts were primarily short-term donations. The contributions receivable amounts are net
of an allowance for uncollectible contributions of approximately $29,000 and $26,000 at June 30, 2013 and 2012.
33
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
NOTE 5 - CAPITAL ASSETS
Capital asset activity for the District for the fiscal year ended June 30, 2013, was as follows:
Balance
Beginning of
Year, Restated
Capital Assets Not Being Depreciated
Land
Construction in progress
Total Capital Assets Not
Being Depreciated
Capital Assets Being Depreciated
Land improvements
Infrastructure
Buildings
Furniture and equipment
Total Capital Assets
Being Depreciated
Total Capital Assets
Less Accumulated Depreciation
Land improvements
Infrastructure
Buildings
Furniture and equipment
Total Accumulated Depreciation
Net Capital Assets Being Depreciated
Net Capital Assets
$
4,164,679
11,627,325
Additions
$
5,611,775
Balance
End
of Year
Deductions
$
11,188,173
$
4,164,679
6,050,927
15,792,004
5,611,775
11,188,173
10,215,606
13,864,799
49,076,942
242,082,007
19,156,484
51,611
19,141,736
408,021
-
13,916,410
49,076,942
261,223,743
19,564,505
324,180,232
339,972,236
19,601,368
25,213,143
11,188,173
343,781,600
353,997,206
6,115,186
8,176,313
33,291,035
13,107,423
60,689,957
263,490,275
$ 279,282,279
567,516
981,547
5,564,468
1,696,619
8,810,150
10,791,218
$ 16,402,993
$ 11,188,173
6,682,702
9,157,860
38,855,503
14,804,042
69,500,107
274,281,493
$ 284,497,099
Depreciation expense for the year was $8,810,150.
Net interest expense for the year ended June 30, 2013 was $8,413,195, all of which was capitalized during the
year.
34
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Capital asset activity for the District for the fiscal year ended June 30, 2012, was as follows:
Balance
Beginning
of Year
Capital Assets Not Being Depreciated
Land
Construction in progress
Total Capital Assets Not
Being Depreciated
Capital Assets Being Depreciated
Land improvements
Infrastructure
Buildings
Furniture and equipment
Total Capital Assets
Being Depreciated
Total Capital Assets
Less Accumulated Depreciation
Land improvements
Infrastructure
Buildings
Furniture and equipment
Total Accumulated Depreciation
Net Capital Assets Being Depreciated
Net Capital Assets
$
4,164,679
114,830,805
Additions
$
4,759,507
Balance
End
of Year
Deductions
$
107,962,987
$
4,164,679
11,627,325
118,995,484
4,759,507
107,962,987
15,792,004
13,638,407
49,076,942
100,020,760
18,256,583
226,392
107,674,204
899,901
-
13,864,799
49,076,942
207,694,964
19,156,484
180,992,692
299,988,176
108,800,497
113,560,004
107,962,987
289,793,189
305,585,193
5,551,503
7,194,766
27,019,504
11,316,564
51,082,337
129,910,355
$ 248,905,839
563,683
981,547
4,558,021
1,790,859
7,894,110
100,906,387
$ 105,665,894
$ 107,962,987
6,115,186
8,176,313
31,577,525
13,107,423
58,976,447
230,816,742
$ 246,608,746
Depreciation expense for the year was $7,894,110.
Discretely Presented Component Unit
Capital assets for the Cabrillo College Foundation in the amounts of $4,748 and $9,134, respectively, for the years
ended June 30, 2013 and 2012, consisted primarily of equipment. Depreciation expense for 2013 and 2012 was
$4,386.
35
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
NOTE 6 - ACCOUNTS PAYABLE
Accounts payable for the District consisted of the following:
Primary Government
2013
2012
$ 2,229,010
$ 2,021,039
1,179,683
1,292,161
8,256
5,067
685,147
$ 3,416,949
$ 4,003,414
Vendor
Accrued payroll and benefits
State categorical aid
Apportionment
Total
Vendor
$
Fiduciary Funds
2013
2012
36,606
$
21,506
Discretely Presented Component Unit
The liabilities of the Cabrillo College Foundation consist primarily of amounts owed for scholarships and projects
totaling $1,610,729 and $1,892,995, respectively, for the years ended June 30, 2013 and 2012.
NOTE 7 - DEFERRED REVENUE
Deferred revenue consisted of the following:
Primary Government
2013
2012
$
$
3,736
784,084
668,791
3,662,943
3,413,058
656,271
926,913
$ 5,103,298
$ 5,012,498
Federal categorical aid
State categorical aid
Enrollment fees
Other local
Total
Enrollment fees
$
Fiduciary Funds
2013
2012
1,489
$
2,219
NOTE 8– TAX AND REVENUE ANTICIPATION NOTE (TRAN)
On February 28, 2013, the District issued a $8,735,000 Tax and Revenue Anticipation Note bearing interest at 2.0
percent. The note was issued to supplement cash flows. Interest and principal are due and payable on December
31, 2013. The District recorded the cash available to make the principal and interest payments as with the
corresponding liability and associated interest as a current loan.
36
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Changes in the outstanding liability for the Tax and Revenue Anticipation Note are as follows:
Issue Date
Rate
Maturity Date
May 18, 2012
1.50% December 31, 2012
February 28, 2013 2.00% December 31, 2013
Outstanding
July 1, 2012
$ 4,007,525
$ 4,007,525
Additions
$
8,735,000
$ 8,735,000
Interest
$
90,505
$
90,505
Deductions
$ 4,007,525
$ 4,007,525
Outstanding
June 30, 2013
$
8,825,505
$ 8,825,505
NOTE 9 - INTERFUND TRANSACTIONS
Interfund Receivables and Payables (Due To/Due From)
Interfund receivable and payable balances arise from interfund transactions and are recorded by all funds affected
in the period in which transactions are executed. Interfund activity within the governmental funds and fiduciary
funds has been eliminated respectively in the consolidation process of the basic financial statements. Balances
owing between the primary government and the fiduciary funds are not eliminated in the consolidation process.
As of June 30, 2013, the amounts owed between the government and the fiduciary funds were $188,169 and
$17,229, respectively.
Interfund Operating Transfers
Operating transfers between funds of the District are used to (1) move revenues from the fund that statute or
budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts
restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments
become due, and (3) use restricted revenues collected in the General Fund to finance various programs accounted
for in other funds in accordance with budgetary authorizations. Operating transfers within the funds of the
District have been eliminated in the consolidation process. Transfers between the primary government and the
fiduciary funds are not eliminated in the consolidation process. During the 2013 fiscal year, the amount
transferred to the primary government from the fiduciary fund amounted to $324,729. The amount transferred to
the fiduciary funds from the primary government amounted to $154,530.
37
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
NOTE 10 - LONG-TERM OBLIGATIONS
Long-term Obligations Summary
The changes in the District's long-term obligations during the 2013 fiscal year consisted of the following:
2013
Bonds and Notes Payable
General obligation bonds
Capital appreciation bonds
Subtotal
Related party note payable
Bond premiums
Total Bonds and Notes Payable
Other Liabilities
Compensated absences
Certificates of participation
Capital lease
Other postemployment benefits
Total Other Liabilities
Total Long-term Debt
Balance
Beginning
of Year
Additions/
Accretion
Deductions
Balance
End
of Year
Due in
One Year
$ 109,345,000
76,250,081
185,595,081
1,680,051
187,275,132
$ 38,505,000
4,056,511
42,561,511
106,895
42,668,406
$ 45,090,000
3,155,000
48,245,000
63,501
48,308,501
$ 102,760,000
77,151,592
179,911,592
106,895
1,616,550
181,635,037
$ 5,375,000
1,534,276
6,909,276
44,000
63,501
7,016,777
1,294,760
1,735,000
2,171,898
5,201,658
1,529,860
34,966
342,027
1,906,853
335,700
694,900
1,748
1,032,348
959,060
2,569,960
33,218
2,513,925
6,076,163
618,510
6,993
625,503
$ 192,476,790
$ 44,575,259
$ 49,340,849
$ 187,711,200
$ 7,642,280
The changes in the District's long-term obligations during the 2012 fiscal year consisted of the following:
2012
Balance
Beginning
of Year
Bonds and Notes Payable
General obligation bonds
Capital appreciation bonds
Subtotal
Premium
Total Bonds and Notes Payable
Other Liabilities
Compensated absences
Certificates of participation
Other postemployment benefits
Total Other Liabilities
Total Long-term Debt
Deductions
Balance
End
of Year
Due in
One Year
3,997,560
3,997,560
3,997,560
$ 4,075,000
2,980,000
7,055,000
63,501
7,118,501
$ 109,345,000
76,250,081
185,595,081
1,680,051
187,275,132
$ 4,185,000
1,606,415
5,791,415
63,501
5,854,916
1,308,167
1,980,000
1,711,559
4,999,726
460,339
460,339
13,407
245,000
258,407
1,294,760
1,735,000
2,171,898
5,201,658
255,000
255,000
$ 195,395,799
$ 4,457,899
$ 7,376,908
$ 192,476,790
$ 6,109,916
$ 113,420,000
75,232,521
188,652,521
1,743,552
190,396,073
Additions/
Accretion
$
38
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Description of Bonds
Payments on the general obligation bonds are made by the Bond Interest and Redemption Fund with local
revenues. Payments on the Certificates of Participation (COPs) and the related party note payable are made by
the Debt Service Fund. Capital lease payments are made by the General – Unrestricted Fund. The compensated
absences and other postemployment benefits will be paid for by the fund for which the employee worked.
The District issued 1998 Series A, B, C and D in the amount of $ 85,000.000 as authorized by voter election held
within the Cabrillo Community College District boundaries. The bond proceeds were used to finance the
construction and renovation of various District facilities and are paid through ad valorem taxes.
On June 2, 2004, the District issued the 2004 Series A bonds totaling $59,997,760 and on March 27, 2007, the
District issued the 2004 Series B bonds totaling $58,498,505 to finance the construction and renovation of various
District facilities.
On May 22, 2012, the District issued the 2012 Refunding Bonds in the amount of $38,505,000. The proceeds
were used to advance refund a portion of the outstanding 2004 Series A Bonds and a portion of the outstanding
2004 Refunding Bonds. The net proceeds were used to purchase U.S. securities. Those securities were deposited
into an irrevocable trust with an escrow agent to provide for partial future debt service payments on the 2004
Series A and 2004 Refunding Bonds. In 2013, the escrow agent continued making payments on the 2004 Series
A and 2004 Refunding Bonds that were refunded and the debt service to maturity amounts of the remaining
outstanding balance. At June 30, 2013, the balance in the escrow account was $42,663,806.
Description of Related Party Note
On May 14, 2013, the District obtained $106,895 through a loan agreement with the Cabrillo College Foundation
in order to facilitate the purchase of furniture and equipment for the Building 800 Renovation Project.
Description of Certificates of Participation
In February 1998, the District issued certificates of participation in the amount of $3,450,000. The proceeds from
the issuance were used to finance the acquisition of various capital assets.
On July 11, 2012, the District obtained $1,529,860 through a direct lease purchase agreement (STEM COP loan)
with a bank to finance costs associated with the Building 800 Renovation Project to accommodate the science,
technology, engineering, and math programs (STEM). The bank will purchase the lease bonds at a rate of 2.75
percent for four years. Repayment of the loan including interest will be from annual proceeds received from the
STEM Articulation Program Grant awarded to Cabrillo College in 2013 of which a portion of the grant has been
allocated for construction and remodeling.
39
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Description of Capital Lease
The District has entered into a lease agreement for office equipment. This agreement is in substance a purchase
(capital lease) and is reported as a capital lease obligation.
Debt Maturity
General Obligation Bonds
Issue
Date
2/16/2000
4/20/2001
6/27/2002
5/18/2004
5/18/2004
3/27/2007
Maturity
Interest
Original
Date
Rate
Issue
8/1/2024 4.0-6.3% $ 30,000,000
5/1/2026 5.1-5.8%
20,002,009
7/1/2027 3.0-5.7%
22,997,991
8/1/2018 2.0-5.7%
32,410,000
8/1/2028 2.0-5.8%
59,997,760
8/1/2039 4.79-4.87%
58,498,505
Bonds
Outstanding
July 1, 2012
$ 26,748,566
7,088,725
8,958,780
23,925,000
54,845,844
64,028,166
$ 185,595,081
Issued/
Accreted
$ 1,510,407
363,593
502,240
157,696
1,522,575
38,505,000
$ 42,561,511
Redeemed
$ 2,525,000
630,000
11,520,000
32,410,000
380,000
780,000
$ 48,245,000
Bonds
Outstanding
June 30, 2013
$ 25,733,973
6,822,318
9,461,020
12,405,000
22,593,540
65,170,741
37,725,000
$ 179,911,592
The bonds mature through 2040 as follows:
Fiscal Year
2014
2015
2016
2017
2018
2019-2013
2024-2028
2029-2033
2034-2038
2039-2040
Total
Accretion to date:
Principal
$ 6,909,276
7,869,831
7,667,728
8,195,903
8,744,262
27,670,675
34,101,162
13,275,923
29,193,876
5,366,466
$ 148,995,102
30,916,490
$ 179,911,592
40
Interest to
Maturity
$ 6,457,789
6,598,203
6,534,387
6,495,299
6,387,885
32,488,115
22,445,215
38,301,587
27,534,475
14,660,172
$ 167,903,127
Total
$ 13,367,065
14,468,034
14,202,115
14,691,202
15,132,147
60,158,790
56,546,377
51,577,510
56,728,351
20,026,638
$ 316,898,229
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Related Party Note Payable
Interest on the related party note payable is at the annual rate equivalent to the monthly money market rate earned
by the Cabrillo College Foundation for other concurrent investments. The note may be prepaid in whole or in part
at any time without penalty. The related party note payable matures through 2014 as follows:
Year Ending
June 30,
2013
2014
Total
Principal
44,000
62,895
$
106,895
$
Interest
to be determined
to be determined
$
-
Total
44,000
62,895
$ 106,895
$
Certificates of Participation
The certificates of participation mature through 2018 as follows:
Year Ending
June 30,
2014
2015
2016
2017
2018
Total
Principal
618,510
643,230
668,220
310,000
330,000
$ 2,569,960
$
Interest
103,974
81,002
57,014
32,000
16,500
$
290,490
$
Total
722,484
724,232
725,234
342,000
346,500
$ 2,860,450
$
Capital Lease
The District's liability on its lease agreement through 2018 with an option to purchase is as follows:
Year Ending
June 30,
2014
2015
2016
2017
2018
Total
Less: Amount Representing Interest
Present Value of Minimum Lease Payments
Lease
Payment
$
6,993
6,993
6,993
6,993
5,246
33,218
5,061
$
28,157
41
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Equipment under the capital lease at June 30, 2013 include the following:
Equipment
Less: Accumulated Depreciation
Total
$
$
34,966
(4,371)
30,595
Accumulated Unpaid Employee Vacation
The long-term portion of accumulated unpaid employee vacation for the District at June 30, 2013 is $959,060.
Other Postemployment Benefit (OPEB) Obligation
The District’s annual required contribution for the year ended June 30, 2013 was $1,519,261, contributions made
by the District during the year were $1,177,234, and the balance at the beginning of the year was $2,171,898. As
of June 30, 2013, the net OPEB obligation was $2,513,925. See Note 11 for additional information regarding the
OPEB obligation and the postemployment benefit plan.
Early Retirement Incentive
On September 20, 2012, the District and the Cabrillo College Federation of Teachers entered into an agreement
for a retirement incentive program. In order to participate in the program, regular faculty members must meet
STRS eligibility requirements, retire into the STRS retirement system, have ten years or more of service credit in
the District and specify a retirement date of no later than August 1, 2013. Faculty who met the eligibility
requirements were offered the following:
Ten years and less than fifteen years of service
Fifteen years and less than twenty years of service
Twenty years or more of service
$ 8,000
$10,000
$15,000
Payments to six faculty who accepted the incentive totaling $79,300 will be made one-half in August 2013 and
one-half in September 2013.
NOTE 11 - POSTEMPLOYMENT HEALTH CARE PLAN AND OTHER POSTEMPLOYMENT
BENEFITS (OPEB) OBLIGATION
The District provides postemployment health care benefits for retired employees in accordance with negotiated
contracts with the various bargaining units of the District.
Plan Description
The Postemployment Benefit Plan (the "Plan") is a single-employer defined benefit healthcare plan administered
by the Cabrillo Community College District. The Plan provides medical insurance benefits to eligible retirees and
their spouses. Membership of the Plan consists of 141 retirees and beneficiaries currently receiving benefits, no
terminated plan members entitled to but not yet receiving benefits, and 438 active plan members.
42
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Benefit types provided
Duration of Benefits
Required Service
Minimum Age
Dependent Coverage
College Contribution %
College Cap
Faculty
Medical only
To age 70
10 years**
55
Yes*
100%
Pre-65: Active cap
Post-65: Frozen at rate
just prior to age 65
Management
Medical only
To age 70
10 years
50
Yes*
100%
Pre-65: Active cap
Post-65: Frozen at rate
just prior to age 65
Classified and
Confidential
Medical only
To age 65
10 years
50
Yes
100%
Active cap
* Spouse benefits are only provided until the retiree reaches age 65
** Must be consecutive years
Funding Policy
The contribution requirements of Plan members and the District are established and may be amended by the
District and the District's bargaining units. The required contribution is based on projected pay-as-you-go
financing requirements with an additional amount to prefund benefits as determined annually through agreements
between the District and the bargaining units. For fiscal year 2013-2012, the District contributed $1,177,234 to
the Plan, all of which was used for current premiums (approximately 77 percent of total premiums
Annual OPEB Cost and Net OPEB Obligation
The District's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer
(ARC), an amount actuarially determined in accordance with the payments of GASB Statement No. 45. The
ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year
and amortize any unfunded actuarial accrued liabilities (UAAL) (or funding costs) over a period not to exceed
30 years. The following table shows the components of the District's annual OPEB cost for the year, the amount
actually contributed to the Plan, and changes in the District's net OPEB obligation to the Plan:
Annual required contribution
Contributions made
Increase in net OPEB obligation
Net OPEB obligation, beginning of year
Net OPEB obligation, end of year
$
1,519,261
(1,177,234)
342,027
2,171,898
$ 2,513,925
43
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Trend Information
Trend information for the annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the
net OPEB obligation for the past four years is as follows:
Year Ended
June 30
2011
2012
2013
Actual
Contribution
$
1,044,294
$
1,133,273
$
1,177,234
Annual Required
Contribution
$
1,633,776
$
1,593,612
$
1,519,261
Percentage
Contributed
64%
71%
77%
Net OPEB
Obligation
$ 1,711,559
$ 2,171,898
$ 2,513,925
Funded Status and Funding Progress
The Plan is not funded, however, as of June 30, 2013, the district has set aside approximately $2.7 million for
these costs. The actuarial accrued liability was based on the April 1, 2010 actuarial valuation. Actuarial valuation
of an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of
occurrence of events far into the future. Examples include assumptions about future employment, mortality, and
the healthcare cost trend. Amounts determined regarding the funded status of the Plan and the annual required
contribution of the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. The Schedule of Other Postemployment Benefits
Funding Progress, presented as required supplementary information, follows the notes to the financial statements
and presents multi-year trend information about whether the actuarial value of Plan assets is increasing or
decreasing over time relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive Plan (the Plan as understood
by the employer and the Plan members) and include the types of benefits provided at the time of each valuation
and the historical pattern of sharing of benefit costs between the employer and the Plan members to that point.
The actuarial methods and assumptions used include techniques that are designed to reduce the effects of shortterm volatility in actuarial accrued liabilities and the actuarial values of assets, consistent with the long-term
perspective of the calculations.
In the April 1, 2010, actuarial valuation, the entry age normal method was used. The actuarial assumptions
included a five percent investment rate of return (net of administrative expenses), based on the plan being funded
in an irrevocable employee benefit trust invested in a combined equity and fixed income portfolio. Healthcare
cost trend rates were estimated at four percent and take College contribution caps into account. The UAAL is
being amortized at a level percentage of payroll method assuming a three percent annual increase in payroll. The
remaining amortization period at June 30, 2013 was 25 years. The actuarial value of assets was not determined in
this actuarial valuation.
44
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
NOTE 12 - RISK MANAGEMENT
Insurance Coverages
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors
and omissions; injuries to employees; and natural disasters.
Joint Powers Authority Risk Pools
During fiscal year ending June 30, 2013, the District contracted with the Statewide Association of Community
Colleges (“SWACC”) Joint Powers Authority (JPA) for property and liability insurance coverage. Settled claims
have not exceeded this commercial coverage in any of the past three years. There has not been a significant
reduction in coverage from the prior year.
Workers' Compensation
The intent of the JPA is to achieve the benefit of a reduced premium for the District by virtue of its grouping and
representation with other participants in the JPA. The workers' compensation experience of the participating
districts is calculated as one experience, and a common premium rate is applied to all districts in the JPA. Each
participant pays its workers' compensation premium based on its individual rate. Total savings are then calculated
and each participant's individual performance is compared to the overall saving. A participant will then either
receive money from or be required to contribute to the "equity-pooling fund." This "equity pooling" arrangement
insures that each participant shares equally in the overall performance of the JPA. Participation in the JPA is
limited to K-12 and community college districts that can meet the JPA's selection criteria.
Insurance Program/Company Name
Northern California Community College Pool
Statewide Association of Community Colleges
Schools Excess Liability Fund
Type of Coverage
Workers' Compensation
Property and Liability
Excess Liability
Limits
Statutory Limits
$ 250,000,000
$
20,000,000
Employee Medical Benefits
The District has contracted with the Self Insured Schools of California (SISC) to provide employee medical and
surgical benefits. SISC is a shared risk pool comprised of several educational agencies throughout California.
Rates are set through an annual calculation process. The District pays a monthly contribution, which is placed in
a common fund from which claim payments are made for all participating districts. Claims are paid for all
participants regardless of claims flow. The Board of Directors has a right to return monies to a district subsequent
to the settlement of all expenses and claims if a district withdraws from the pool.
NOTE 13 - EMPLOYEE RETIREMENT SYSTEMS
Qualified employees are covered under multiple-employer retirement plans maintained by agencies of the State of
California. Certificated employees are members of the California State Teachers' Retirement System (CalSTRS)
and classified employees are members of the California Public Employees' Retirement System (CalPERS).
45
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
CalSTRS
Plan Description
The District contributes to CalSTRS, a cost-sharing multiple-employer public employee retirement system
defined benefit pension plan administered by CalSTRS. The plan provides retirement and disability benefits,
annual cost-of-living adjustments, and survivor benefits to beneficiaries. Benefit provisions are established by
State statutes, as legislatively amended, within the State Teachers' Retirement Law. CalSTRS issues a separate
comprehensive annual financial report that includes financial statements and required supplementary information.
Copies of the CalSTRS annual financial report may be obtained from CalSTRS, 100 Waterfront Place,
West Sacramento, CA 95605.
Funding Policy
Active members are required to contribute 8.0 percent of their salary, and the District is required to contribute an
actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those
adopted by the CalSTRS Teachers' Retirement Board. The required employer contribution rate for fiscal year
2013-2012 was 8.25 percent of annual payroll. The contribution requirements of the plan members are
established by State statute. The District's contributions to CalSTRS for the fiscal years ended June 30, 2013,
2012, and 2011, were $1,912,413, $2,001,248, and $1,998,908, respectively, and equal 100 percent of the
required contributions for each year.
CalPERS
Plan Description
The District contributes to the School Employer Pool under CalPERS a cost-sharing multiple-employer public
employee retirement system defined benefit pension plan administered by CalPERS. The plan provides
retirement and disability benefits, annual cost-of-living adjustments, and survivor benefits to plan members and
beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the Public
Employees' Retirement Laws. CalPERS issues a separate comprehensive annual financial report that includes
financial statements and required supplementary information. Copies of the CalPERS' annual financial report
may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95811.
Funding Policy
Active plan members are required to contribute 7.0 percent of their salary, and the District is required to
contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate
are those adopted by the CalPERS Board of Administration. The required employer contribution rate for fiscal
year 2013-2012 was 11.417 percent of covered payroll. The contribution requirements of the plan members are
established by State statute. The District's contributions to CalPERS for the fiscal years ended June 30, 2013,
2012, and 2011, were $1,425,076, $1,523,074, and $1,557,020, respectively, and equal 100 percent of the
required contributions for each year.
Tax Deferred Annuity/Social Security
As established by Federal law, all public sector employees who are not members of their employer's existing
retirement system (CalSTRS or CalPERS) must be covered by Social Security or an alternative plan. The District
has elected to use Social Security as its alternative plan.
46
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
On Behalf Payments
The State of California makes contributions to CalSTRS and CalPERS on behalf of the District. These payments
consist of State General Fund contributions to CalSTRS for the fiscal years ended June 30, 2013, 2012, and 2011,
which amounted to $1,212,218, $1,173,504, and $909,237, respectively, (5.176 percent) of salaries subject to
CalSTRS. Contributions are no longer appropriated in the annual Budget Act for the legislatively mandated
benefits to CalPERS. Therefore, there is no on behalf contribution rate for CalPERS. No contributions were
made for CalPERS for the years ended June 30, 2013, 2012, and 2011. Under accounting principles generally
accepted in the United States of America, these amounts are to be reported as revenues and expenditures. These
amounts have been reflected in the basic financial statements as a component of non-operating revenue and
employee benefit expense.
NOTE 14 - PARTICIPATION IN PUBLIC ENTITY RISK POOLS AND JOINT POWERS AUTHORITIES
The District is a member of the Statewide Association of Community Colleges (“SWACC”) Joint Powers
Authority, Self Insured Schools of California (“SISC”) and Northern California Community College Pool
(“NCCCP”) Joint Powers Authority (JPAs). The District pays annual premiums for its property liability, health
benefits and workers' compensation coverage. The relationship between the District and the JPAs are such that
they are not component units of the District for financial reporting purposes.
The JPAs have budgeting and financial reporting requirements independent of member units and their financial
statements are not presented in these financial statements; however, transactions between the JPAs and the
District are included in these statements. Audited financial statements are available from the respective entities.
The District's share of year-end assets, liabilities, or fund equity has not been calculated.
During the year ended June 30, 2013, the District made payments of $288,514 and $8,711,123, and $807,304, to
SWACC, SISC and NCCCP, respectively.
NOTE 15 - COMMITMENTS AND CONTINGENCIES
Grants
The District receives financial assistance from Federal and State agencies in the form of grants. The disbursement
of funds received under these programs generally requires compliance with terms and conditions specified in the
grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such
audits could become a liability of the District. However, in the opinion of management, any such disallowed
claims will not have a material adverse effect on the overall financial position of the District at June 30, 2013.
Litigation
The District is involved in various litigations arising from the normal course of business. In the opinion of
management and legal counsel, the disposition of all litigation pending is not expected to have a material adverse
effect on the overall financial position of the District at June 30, 2013.
47
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012
Related Party Transactions
On May 14, 2013, the District obtained $106,895 through a loan agreement with the Cabrillo College Foundation
(the Foundation) in order to facilitate the purchase of furniture and equipment for the Building 800 Renovation
Project. Interest on the related party note payable is at the annual rate equivalent to the monthly money market
rate earned by the Cabrillo College Foundation for other concurrent investments. The note may be prepaid in
whole or in part at any time without penalty.
Donated office space was provided by the District employees on behalf of the Foundation. Donated services
include the value of Foundation audit services paid by the District as part of its agreement with the Foundation.
Donated supplies and materials include items donated to the Foundation for the use of the Foundation or the
District. Donated facilities, services and materials totaled $94,648 and $156,700 for 2013 and 2012, respectively.
Construction Commitments
As of June 30, 2013, the District had the following commitments with respect to the unfinished capital projects:
Remaining
Construction
Commitment
$ 2,238,417
862,783
80,925
20,339
$ 3,202,464
CAPITAL PROJECT
Building 800
Building 600
VAPA remediation
Building 100
Expected
Date of
Completion
Fall 2013
Fall 2013
Fall 2013
Winter 2013
The projects are funded through a combination of general obligation bonds, certificates of participation, and
capital project apportionments from the State Chancellor's Office.
NOTE 16 - RESTATEMENT OF PRIOR YEAR FUND BALANCES
The District's prior year beginning net position has been restated as of June 30, 2013.
Effective in fiscal year 2012-2013, the District was required to capitalize interest as part of the historical cost of
constructing certain business-type activity assets. The implementation of this standard required a change in
accounting principle and restatement of the beginning net position of the District by $32,673,533.
NOTE 17 - SUBSEQUENT EVENT
The District issued $4,000,000 of Tax and Revenue Anticipation Notes dated July 17, 2013. The notes mature on
June 30, 2014 and yield 2.0 percent interest. The notes were sold to supplement cash flow.
48
REQUIRED SUPPLEMENTARY INFORMATION
49
CABRILLO COMMUNITY COLLEGE DISTRICT
SCHEDULE OF OTHER POSTEMPLOYMENT BENEFITS (OPEB)
FUNDING PROGRESS
FOR THE YEAR ENDED JUNE 30, 2013
Actuarial
Valuation
Date
March 1, 2008
April 1, 2010
Actuarial
Accrued
Liability
(AAL) Method
Used (b)
Actuarial Value
of Assets (a)
$
$
-
$
$
11,588,442
12,570,618
Unfunded
AAL
(UAAL)
(b - a)
$
$
11,588,442
12,570,618
50
Funded Ratio
(a / b)
$
$
-
Covered
Payroll (c)
$
$
46,796,540
41,429,101
UAAL as a
Percentage of
Covered Payroll
([b - a] / c)
24.8%
30.3%
SUPPLEMENTARY INFORMATION
51
CABRILLO COMMUNITY COLLEGE DISTRICT
DISTRICT ORGANIZATION
JUNE 30, 2013
The Cabrillo Community College District was established in January 1959 and serves all of Santa Cruz County,
the northern portion of Monterey County, and the western portion of San Benito County. There were no changes
in the boundaries of the District during the current year.
BOARD OF TRUSTEES
MEMBER
OFFICE
TERM EXPIRES
Rachael Spencer
Chair
2016
Susan True
Vice Chair
2016
Donna Ziel
Clerk
2014
Margarita Cortez
Member
2016
Ed Banks
Member
2016
Gary Reece
Member
2014
Alan Smith
Member
2014
ADMINISTRATION
Dr. Laurel Jones
President and District Superintendent
Victoria Lewis
Vice President, Business Services
Dr. Kathleen Welch
Vice President, Instruction
Dennis Bailey - Fougnier
Vice President, Student Services
52
CABRILLO COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2013
Grantor/Program or Cluster Title
U.S. DEPARTMENT OF EDUCATION
Financial Aid Cluster
Pell Grants
Supplemental Education Opportunity Grant Program
Direct Loans
Federal Work Study
Vocational and Technical Education Act
Passed through California Community College System's Office
Career and Technical Education - Basic Grants to States
Tech Prep Education
Higher Education Act:
Migrant Education: High School Equivalency
Migrant Education: State Grant Program
Child Care Access Means Parents
Title III - Higher Education Institutional Aid
Title V - Strengthening Institutions
Total U.S. Department of Education
U.S. DEPARTMENT OF LABOR
Workforce Investment Act, Adult Program
Workforce Investment Act, Dislocated Workers
Total U.S. Department of Labor
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Passed through California Community College System's Office:
Temporary Assistant to Needy Families (TANF)
Child Development: Family Child Care Home (CFCC) - Matching
Child Development: Family Child Care Home (CFCC) - Discretionary
Child Development: Federal General (CCTR) - Matching
Child Development: Federal General (CCTR) - Discretionary
Passed through ACCESS:
Biomedical Research and Research Training
Total U.S. Department of Health and Human Services
Federal
Catalog
Number
84.063
84.007
84.268
84.033
[1]
84.048
84.243
03303
84.141A
84.011
84.335
84.031C
84.031S
[1]
17.258
17.260
03573
93.558
93.575
93.575
93.596
93.575
[2]
93.859
See accompanying note to supplementary information.
53
Pass-Through
Entity
Identifying
Number
[1]
[1]
[1]
[2]
[1]
[1]
[1]
[1]
[2]
13609
15136
13609
15136
[2]
Federal
Expenditures
$ 12,672,633
255,788
3,485,411
176,038
627,611
49,389
25,016
26,950
75,163
1,073,882
373,848
18,841,729
32,787
42,213
75,000
24,732
65,487
35,262
37,183
18,685
31,568
212,917
CABRILLO COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2013
Grantor/Program or Cluster Title
U.S. DEPARTMENT OF AGRICULTURE
Passed through California Department of Education
Child and Adult Care Food Program
Total U.S. Department of Agriculture
Federal
Catalog
Number
Pass-Through
Entity
Identifying
Number
10.558
03628
11.557
[2]
Federal
Expenditures
$
11,214
11,214
U.S. DEPARTMENT OF COMMERCE
Passed through Foundation for California Community Colleges:
ARRA: SBA Recovery Act:
"California Connects" Broadband Opportunities Program
3,736
3,736
U.S. DEPARTMENT OF VETERAN'S AFFAIRS
Post 9/11 - Veteran's Educational Assistance
NATIONAL SCIENCE FOUNDATION
Science, Technology, and Energy, Expanding Potential (STEEP)
Bridging Community College Chemistry Faculty into the National
Education Community
Math and Science Curriculum for the Digital Bridge Academy
Collaborative Research: Engaged Interdisciplinary Learning in
Sustainability Information and Communication Technologies
Passed through California State University Monterey Bay
Monterey Bay Networking Education Consortium
Total National Science Foundation
SMALL BUSINESS ADMINISTRATION
Passed through Humboldt State University
Small Business Development Center
Small Business Development Center-Jobs Act
Small Business Development Center- Workforce Investment Board
Total
[1]
[2]
Pass through number not applicable.
Pass through number not available.
See accompanying note to supplementary information.
54
64.028
[2]
47.076
03787
160,160
47.076
47.076
03787
03787
9,872
111,994
47.076
03787
9,225
47.076
[2]
2,475
293,726
59.037
59.037
59.037
[2]
138,900
24,434
40,000
203,334
$ 19,645,928
[2]
[2]
4,272
CABRILLO COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF STATE AWARDS
FOR THE YEAR ENDED JUNE 30, 2013
Current
Year
PROGRAM
GENERAL FUND-Restricted
Lottery Instructional
DSPS
CCC - Electronic Transcript
CARE
EOPS
Student Financial Aid
CAL Grant
Child Care Train Consortium - CDTC
Foster Parent - FKCE
Puente Project Through UCOP
Learning Works - MARC
MESA CCCP 12/13
Matriculation - Non Credit
Matriculation
Faculty/Staff Diversity
TANF-State-FTTW
CalWorks-FTTW
TTIP - TCO 06/07 Carryover
CA ECE Mentor Program
CalWorks-WIA FTTW
CTE Nursing Enrollment Growth
RN Enrollment Growth
AHEC Projects Center
MALC
Basic Skills Apportionment 12/13
Basic Skills Apportionment 11/12
Basic Skills Apportionment 10/11
$
See accompanying note to supplementary information.
55
Program Entitlements
Prior
Total
Year
Entitlement
365,862
931,765
5,000
77,902
311,594
430,864
745,046
21,913
122,647
1,500
31,000
50,500
9,331
354,847
6,585
24,732
174,685
1,000
85,136
146,687
11,500
186,094
90,000
-
$
544,554
1,471
23,761
71,229
9,964
$
910,416
931,765
5,000
77,902
311,594
430,864
745,046
21,913
122,647
1,500
31,000
50,500
9,331
354,847
6,585
24,732
174,685
1,471
1,000
85,136
146,687
23,761
11,500
186,094
90,000
71,229
9,964
Cash
Received
$
104,839
931,765
5,000
77,902
311,594
430,864
740,039
21,913
91,986
1,500
30,300
9,331
354,847
6,585
24,732
172,935
1,000
72,726
99,747
23,761
50,720
90,000
71,229
9,964
Accounts
Receivable
$
261,022
5,007
30,661
1,268
20,200
1,671
12,408
46,940
4,127
92,812
-
Program Revenues
Deferred
Revenue
$
75,204
-
Accounts
Payable
$
545
5,860
-
56
Total
Revenue
$
365,861
931,765
5,000
77,902
311,049
425,004
745,046
21,913
122,647
1,500
1,268
50,500
9,331
354,847
6,585
24,732
174,606
1,000
85,134
146,687
23,761
4,127
143,532
14,796
71,229
9,964
Program
Expenditures
$
268,512
931,765
5,000
77,902
311,049
425,004
743,534
21,913
122,647
1,500
1,268
50,500
9,331
354,847
6,585
24,732
174,606
1,471
1,000
85,134
146,687
23,761
4,127
143,532
14,796
71,229
9,964
CABRILLO COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF STATE AWARDS (Continued)
FOR THE YEAR ENDED JUNE 30, 2013
PROGRAM
Options For Recovery (OFR)
Special Training For Adoptive Parents (STAP)
YEP
BEC
SBDC - BEC
SBDC Youth Entreprenuer Programs (YEP)
Academic Affairs - Teacher's Preparation Pipeline
CTE - Teacher's Preparation Pipeline
$
WD 2.0
CTE Community Collaborative 140
CTE Community Collaborative 141
CTE Community Collaborative 11 140 411
CTE Community Collaborative 12 140 411
CTE BAWFC
Subtotal
CHILD DEVELOPMENT FUND
Childcare Tax Bailout Through Apportionment
State Nutrition
CA Department of Education-CRPM 130 Renovation and Repair
CA Department of Education-CRPM 1085 Renovation and Repair
CA Department of Education - CSPP
CA Department of Education - CCTR
CA Department of Education - CFCC
WestEd/PITC
Subtotal
Grand Total
57
$
Program Entitlements
Current
Prior
Total
Year
Year
Entitlement
239,922 $
- $
239,922
167,466
167,466
128,925
128,925
172,899
172,899
205,000
205,000
125,000
125,000
120,000
120,000
104,543
104,543
137,000
-
137,000
-
266,232
266,232
411,350
387,023
23,883
6,107,377
124,706
1,343,741
124,706
411,350
387,023
23,883
7,451,118
61,778
300
(328)
95,649
46,121
96,798
28,581
328,899
6,436,276
10,479
19,575
30,054
1,373,795
61,778
300
10,151
19,575
95,649
46,121
96,798
28,581
358,953
7,810,071
$
$
Program Revenues
Deferred
Accounts
Revenue
Payable
$
- $
107,886
93,750
-
Cash
Received
$
146,999
126,459
83,925
90,899
123,000
93,750
92,543
Accounts
Receivable
$
92,923
41,007
25,842
82,000
7,502
-
14,196
-
266,232
-
124,706
400,215
290,267
5,574,274
61,778
290
1,308
4,894
95,481
47,972
69,903
281,626
5,855,900
$
$
Total
Revenue
$
239,922
167,466
109,767
172,899
15,114
100,045
Program
Expenditures
$
239,922
167,466
109,768
172,899
15,114
100,045
-
14,196
14,196
-
-
266,232
266,232
739,586
281,605
221,396
779,841
6,405
124,706
118,610
68,871
5,527,614
124,706
118,610
68,871
5,430,225
10
8,843
168
26,895
28,581
64,497
804,083
4,243
4,243
784,084
1,851
1,851
8,256
61,778
300
10,151
651
95,649
46,121
96,798
28,581
340,029
5,867,643
61,778
300
10,151
651
95,649
46,121
96,798
28,581
340,029
5,770,254
$
$
58
$
$
CABRILLO COMMUNITY COLLEGE DISTRICT
SCHEDULE OF WORKLOAD MEASURES FOR STATE
GENERAL APPORTIONMENT – ANNUAL/ACTUAL ATTENDANCE
FOR THE YEAR ENDED JUNE 30, 2013
Reported
Data
Audit
Adjustments
Audited
Data
CATEGORIES
A. Summer Intersession (Summer 2011 only)
1. Noncredit **
2. Credit
9.40
414.37
-
9.40
414.37
B. Summer Intersession (Summer 2012 - prior to July 1, 2012)
1. Noncredit **
2. Credit
302.14
-
302.14
C. Primary Terms (Exclusive of Summer Intersession)
1. Census Procedure Courses
(a) Weekly Census Contact Hours
(b) Daily Census Contact Hours
7,492.87
273.59
2. Actual Hours of Attendance Procedure Courses
(a) Noncredit **
(b) Credit
213.56
555.61
-
213.56
555.61
1,482.22
89.00
-
-
1,482.22
89.00
-
3. Alternative Attendance Accounting Procedure
(a) Weekly Census Procedure Courses
(b) Daily Census Procedure Courses
(c) Noncredit Independent Study/Distance
Education Courses
D. Total FTES
10,832.76
(6.40)
(0.09)
(6.49)
7,486.47
273.50
10,826.27
SUPPLEMENTAL INFORMATION
E. In-Service Training Courses (FTES)
H. Basic Skills Courses and Immigrant Education
1. Noncredit **
2. Credit
CCFS-320 Addendum
CDCP Noncredit FTES
Centers FTES
1 Noncredit **
2 Credit
See accompanying note to supplementary information.
59
33.69
-
33.69
167.25
393.77
-
167.25
393.77
-
-
-
34.77
868.69
-
34.77
868.69
CABRILLO COMMUNITY COLLEGE DISTRICT
RECONCILI ATION OF EDUCATION CODE SECTION 84362 (50 PERCENT LAW) CALCULATION
FOR THE YEAR ENDED JUNE 30, 2013
ECS 84362 A
Instructional Salary Cost
AC 0100 - 5900 and AC 6110
Object/TOP
Audit
Codes
Reported Data Adjustments Revised Data
Academic Salaries
Instructional Salaries
Contract or Regular
Other
Total Instructional Salaries
Noninstructional Salaries
Contract or Regular
Other
Total Noninstructional Salaries
Total Academic Salaries
Classified Salaries
Noninstructional Salaries
Regular Status
Other
Total Noninstructional Salaries
Instructional Aides
Regular Status
Other
Total Instructional Aides
Total Classified Salaries
Employee Benefits
Supplies and Material
Other Operating Expenses
Equipment Replacement
Total Expenditures
Prior to Exclusions
1100
1300
$ 11,662,651
7,845,430
19,508,081
1200
1400
-
$ 11,662,651
7,845,430
19,508,081
$ 11,662,651
7,845,429
19,508,080
19,508,081
-
19,508,081
2100
2300
-
-
2200
2400
1,254,705
310,166
1,564,871
1,564,871
6,211,276
617,052
27,901,280
3000
4000
5000
6420
See accompanying note to supplementary information.
60
$
ECS 84362 B
Total CEE
AC 0100 - 6799
Audit
Reported Data Adjustments Revised Data
$
-
$ 11,662,651
7,845,429
19,508,080
4,601,909
781,372
5,383,281
24,891,361
-
4,601,909
781,372
5,383,281
24,891,361
-
9,102,245
677,960
9,780,205
-
9,102,245
677,960
9,780,205
-
1,254,705
310,166
1,564,871
1,564,871
6,211,276
617,052
-
1,254,705
310,166
1,564,871
11,345,076
12,901,667
1,110,835
5,728,309
127,679
-
1,254,705
310,166
1,564,871
11,345,076
12,901,667
1,110,835
5,728,309
127,679
-
27,901,280
56,104,927
-
56,104,927
CABRILLO COMMUNITY COLLEGE DISTRICT
RECONCILIATION OF EDUCATION CODE SECTION 84362 (50 PERCENT LAW) CALCULATION
FOR THE YEAR ENDED JUNE 30, 2013
ECS 84362 A
Instructional Salary Cost
AC 0100 - 5900 and AC 6110
Object/TOP
Audit
Codes
Reported Data Adjustments Revised Data
Exclusions
Activities to Exclude
Instructional Staff - Retirees' Benefits and
Retirement Incentives
Student Health Services Above Amount
Collected
Student Transportation
Noninstructional Staff - Retirees' Benefits
and Retirement Incentives
Objects to Exclude
Rents and Leases
Lottery Expenditures
Academic Salaries
Classified Salaries
Employee Benefits
Supplies and Materials
Software
Books, Magazines, and Periodicals
Instructional Supplies and Materials
Noninstructional Supplies and Materials
Total Supplies and Materials
5900
$
ECS 84362 B
Total CEE
AC 0100 - 6799
Audit
Reported Data Adjustments Revised Data
- $
- $
-
6441
6491
-
-
-
-
-
-
6740
-
-
-
176,700
-
176,700
5060
-
-
-
12,617
-
1000
2000
3000
4000
4100
4200
4300
4400
-
-
-
1,344,367
-
-
12,617
1,344,367
-
See accompanying note to supplementary information.
61
$
55,982
$
- $
55,982
CABRILLO COMMUNITY COLLEGE DISTRICT
RECONCILIATION OF EDUCATION CODE SECTION 84362 (50 PERCENT LAW) CALCULATION
FOR THE YEAR ENDED JUNE 30, 2013
Other Operating Expenses and Services
Capital Outlay
Library Books
Equipment
Equipment - Additional
Equipment - Replacement
Total Equipment
Total Capital Outlay
Other Outgo
Total Exclusions
ECS 84362 A
Instructional Salary Cost
AC 0100 - 5900 and AC 6110
Object/TOP
Audit
Codes
Reported Data Adjustments Revised Data
5000
$
- $
- $
-
ECS 84362 B
Total CEE
AC 0100 - 6799
Audit
Reported Data Adjustments Revised Data
$
- $
- $
-
6300
6400
6410
6420
-
-
-
7000
-
-
-
25,784
127,679
127,679
153,463
1,743,129
- $ 27,901,280
$ 54,361,798
Total for ECS 84362,
50 Percent Law
Percent of CEE (Instructional Salary
Cost/Total CEE)
50% of Current Expense of Education
$ 27,901,280
51.33%
See accompanying note to supplementary information.
62
$
51.33%
100.00%
$ 27,180,899
$
25,784
127,679
127,679
153,463
1,743,129
- $ 54,361,798
100.00%
$ 27,180,899
CABRILLO COMMUNITY COLLEGE DISTRICT
PROPOSITION 30 EDUCATION PROTECTION ACT (EPA) EXPENDITURE REPORT
FOR THE YEAR ENDED JUNE 30, 2013
Activity Classification
EPA Proceeds:
Activity Classification
Object
Code
Unrestricted
$ 8,972,583
8630
Activity
Code
Operating
Salaries
Expenses
Capital Outlay
and Benefits
(Obj 6000)
(Obj 1000-3000) (Obj 4000-5000)
Instructional Activities
1000-5900 $
Total Expenditures for EPA
$
Revenues Less Expenditures
8,972,583
8,972,583
63
$
- $
-
-
Total
$ 8,972,583
$ 8,972,583
$
-
CABRILLO COMMUNITY COLLEGE DISTRICT
RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET REPORT (CCFS-311)
WITH FUND FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2013
None.
64
CABRILLO COMMUNITY COLLEGE DISTRICT
NOTES TO SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2013
NOTE 1 - PURPOSE OF SCHEDULES
District Organization
This schedule provides information about the District's governing board members and administration members.
Schedule of Expenditures of Federal Awards
The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of the District
and is presented on the modified accrual basis of accounting. The information in this schedule is presented in
accordance with the requirements of the United States Office of Management and Budget Circular A-133, Audits
of States, Local Governments, and Non-Profit Organizations.
Schedule of Expenditures of State Awards
The accompanying Schedule of Expenditures of State Awards includes the State grant activity of the District and
is presented on the modified accrual basis of accounting. Therefore, some amounts presented in this schedule
may differ from amounts presented in, or used in the preparation of, the financial statements. The information in
this schedule is presented to comply with reporting requirements of the California State Chancellor's Office.
Schedule of Workload Measures for State General Apportionment Annual (Actual) Attendance
FTES is a measurement of the number of pupils attending classes of the District. The purpose of attendance
accounting from a fiscal standpoint is to provide the basis on which apportionments of State funds, including
restricted categorical funding, are made to community college districts. This schedule provides information
regarding the annual attendance measurements of students throughout the District.
Reconciliation of Education Code Section 84362 (50 Percent Law) Calculation
ECS 84362 requires the District to expend a minimum of 50 percent of the unrestricted General Fund monies on
salaries of classroom instructors. This is reported annually to the State Chancellor's Office. This schedule
provides a reconciliation of the amount reported to the State Chancellor's Office and the impact of any audit
adjustments and/or corrections noted during the audit.
Proposition 30 Education Protection Act (EPA) Expenditure Report
This schedule provides the District's summary of receipts and uses of the monies received through the EPA.
Reconciliation of Annual Financial and Budget Report (CCFS-311) With Fund Financial Statements
This schedule provides the information necessary to reconcile the fund balance of all funds reported on the
Form CCFS-311 to the District's internal fund financial statements.
65
INDEPENDENT AUDITORS' REPORTS
66
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Trustees
Cabrillo Community College District
Aptos, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States, the basic financial statements of Cabrillo Community College District
(the District) and its discretely presented component unit as of and for the years ended June 30, 2013 and 2012,
and the related notes to the financial statements, which collectively comprise the District's basic financial
statements and have issued our report thereon dated January 7, 2014.
Internal Control Over Financial Reporting
In planning and performing our audits of the financial statements, we considered the District's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an
opinion on the effectiveness of the District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal
control, such that there is a reasonable possibility that a material misstatement of the District's financial statements
will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
67
5000 Hopyard Road, Suite 335
Pleasanton, CA 94588
Tel: 925.734.6600
Fax: 925.734.6611
www.vtdcpa.com
FRESNO  LAGUNA HILLS  PALO ALTO  PLEASANTON  RANCHO CUCAMONGA  RIVERSIDE  SACRAMENTO
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audits we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may
exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audits and, accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the District's internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the District's internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Pleasanton, California
January 7, 2014
68
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND REPORT ON INTERNAL CONTROL
OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
Board of Trustees
Cabrillo Community College District
Aptos, California
Report on Compliance for Each Major Federal Program
We have audited Cabrillo Community College District's (the District) compliance with the types of compliance
requirements described in OMB Circular A-133 Compliance Supplement that could have a direct and material
effect on each of the District's major Federal programs for the year ended June 30, 2013. The District's major
Federal programs are identified in the Summary of Auditors' Results section of the accompanying Schedule of
Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants
applicable to its Federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the District's major Federal programs based
on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in
accordance with auditing standards generally accepted in the United States of America; the standards applicable
to financial audits contained in Government Auditing Standards issued by the Comptroller General of the
United States; and OMB Circular A-133, Audits of State, Local Governments, and Non-Profit Organizations.
Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable
assurance about whether noncompliance with the types of compliance requirements referred to above that could
have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test
basis, evidence about the District's compliance with those requirements and performing such other procedures as
we consider necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major Federal
program. However, our audit does not provide a legal determination of the District's compliance.
69
5000 Hopyard Road, Suite 335
Pleasanton, CA 94588
Tel: 925.734.6600
Fax: 925.734.6611
www.vtdcpa.com
FRESNO  LAGUNA HILLS  PALO ALTO  PLEASANTON  RANCHO CUCAMONGA  RIVERSIDE  SACRAMENTO
Opinion on Each Major Federal Program
In our opinion, the District complied, in all material respects, with the types of compliance requirements referred
to above that could have a direct and material effect on each of its major Federal programs for the year ended
June 30, 2013.
Report on Internal Control Over Compliance
Management of the District is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our audit of
compliance, we considered the District's internal control over compliance with the types of requirements that
could have a direct and material effect on each major Federal program to determine the auditing procedures that
are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major
Federal program and to test and report on internal control over compliance in accordance with OMB
Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over
compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a
timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance, such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and
corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal
control over compliance with a type of compliance requirement of a Federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control over compliance that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
We noted certain matters that we reported to management of the District in a separate letter dated January 7, 2014.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133.
Accordingly, this report is not suitable for any other purpose.
Pleasanton, California
January 7, 2014
70
INDEPENDENT AUDITORS' REPORT ON STATE COMPLIANCE
Board of Trustees
Cabrillo Community College District
Aptos, California
Report on State Compliance
We have audited Cabrillo Community College District's (the District) compliance with the types of compliance
requirements as identified in the California Community Colleges Chancellor's Office District Audit Manual issued
in April 2013 that could have a direct and material effect on each of the District's programs as noted below for the
year ended June 30, 2013.
Management's Responsibility
Management is responsible for compliance with the requirements identified in the California Community
Colleges Chancellor's Office District Audit Manual issued in April 2013.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance of each of the District's programs based on our audit of
the types of compliance requirements referred to above. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States. These
standards require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the compliance requirements referred to above could have a material effect on the applicable programs noted
below. An audit includes examining, on a test basis, evidence about the District's compliance with those
requirements and performing such procedures as we consider necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the
District's compliance with those requirements.
Basis for Qualified Opinion
As described in the accompanying Schedule of Findings and Questioned Costs, the District did not comply with
requirements regarding Section 479 To Be Arranged (TBA) Hours; and Section 437 Student Fees – Instructional
and Other Materials; listed as items 2013-1 and 2013-2. Compliance with such requirements is necessary, in our
opinion, for the District to comply with the requirements applicable to those programs.
71
5000 Hopyard Road, Suite 335
Pleasanton, CA 94588
Tel: 925.734.6600
Fax: 925.734.6611
www.vtdcpa.com
FRESNO  LAGUNA HILLS  PALO ALTO  PLEASANTON  RANCHO CUCAMONGA  RIVERSIDE  SACRAMENTO
Qualified Opinion
In our opinion, except for the noncompliance described in the Basis for Qualified Opinion paragraph, the District
complied, in all material respects, with the types of compliance requirements referred to above for the year ended
June 30, 2013.
Unmodified Opinion for Each of the Other Programs
In our opinion, the District complied, in all material respects, with the compliance requirements referred to above
that are applicable to the programs noted below that were audited for the year ended June 30, 2013, except as
described in the State Awards Findings and Questioned Costs section of the accompanying Schedule of Findings
and Questioned Costs.
Other Matters
We noted certain matters that we reported to management of the District in a separate letter dated January 7, 2014.
In connection with the audit referred to above, we selected and tested transactions and records to determine the
District's compliance with State laws and regulations applicable to the following:
Section 421
Section 423
Section 424
Section 425
Section 426
Section 427
Section 431
Section 433
Section 435
Section 437
Section 438
Section 474
Section 475
Section 479
Section 490
Section 491
Salaries of Classroom Instructors (50 Percent Law)
Apportionment for Instructional Service Agreements/Contracts
State General Apportionment Funding System
Residency Determination for Credit Courses
Students Actively Enrolled
Concurrent Enrollment of K-12 Students in Community College Credit Courses
Gann Limit Calculation
CalWORKS
Open Enrollment
Student Fees – Instructional and Other Materials
Student Fees – Health Fees and Use of Health Fee Funds
Extended Opportunity Programs and Services (EOPS) and Cooperative Agencies Resources
for Education (CARE)
Disabled Student Programs and Services (DSPS)
To Be Arranged (TBA) Hours
Proposition 1D State Bond Funded Projects
Proposition 30 Education Protection Account Funds
The District's responses to the findings identified in our audit are described in the accompanying Schedule of
Findings and Questioned Costs. We did not audit the District's responses and, accordingly, we express no opinion
on the responses.
Pleasanton, California
January 7, 2014
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
73
CABRILLO COMMUNITY COLLEGE DISTRICT
SUMMARY OF AUDITORS’ RESULTS
FOR THE YEAR ENDED JUNE 30, 2013
FINANCIAL STATEMENTS
Type of auditors’ report issued:
Internal control over financial reporting:
Material weaknesses identified?
Significant deficiencies identified?
Noncompliance material to financial statements noted?
FEDERAL AWARDS
Internal control over major programs:
Material weaknesses identified?
Significant deficiencies identified?
Type of auditors’ report issued on compliance for major programs:
Any audit findings disclosed that are required to be reported in accordance with
Circular A-133, Section .510(a)
Identification of major programs:
CFDA Numbers
84.007, 84.033, 84.063, 84.268
84.048, 84.243
Unmodified
No
None reported
No
No
None reported
Unmodified
No
Name of Federal Program or Cluster
Student Financial Aid Cluster
Career and Technical Education Cluster
Dollar threshold used to distinguish between Type A and Type B programs:
Auditee qualified as low-risk auditee?
STATE AWARDS
Internal control over State programs:
Material weaknesses identified?
Significant deficiencies identified?
Type of auditors' report issued on compliance for State programs:
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$300,000
Yes
No
Yes
Unmodified
CABRILLO COMMUNITY COLLEGE DISTRICT
FINANCIAL STATEMENT FINDINGS AND RECOMMENDATIONS
FOR THE YEAR ENDED JUNE 30, 2013
None reported.
75
CABRILLO COMMUNITY COLLEGE DISTRICT
FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2013
None reported.
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CABRILLO COMMUNITY COLLEGE DISTRICT
STATE AWARDS FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2013
The following findings represent instances of noncompliance and/or questioned costs relating to State program
laws and regulations.
2013-1
Finding – To Be Arranged Hours (TBA)
Significant Deficiency – Compliance
Criteria or Specific Requirement
Pursuant to Title 5, Sections 58003.1(b) and (c), the TBA portion of a course uses an alternative
method for regularly scheduling a credit course. In addition, Legal Advisory 08-02 To Be Arranged
(TBA) Hours Compliance Advice indicates that documentation is required to substantiate that each
student has completed the TBA requirements as appropriate for either the Weekly or Daily census
attendance accounting procedures.
Condition
We noted that contact hours for students where documentation of participation for at least 50 minutes
of the To Be Arranged time was not available had not been removed from the Annual Form 320.
Questioned Costs
6.40 FTES, should be removed from weekly courses to remove contact hours of students who did not
demonstrate TBA activity participation. Extrapolated FTES based on the ratio of contact hours in
error would be 13.92. This is calculated based on an error rate of 23%, multiplied by the population
of 31,274 contact hours for TBA courses.
Context
We reviewed 21 TBA weekly courses and 4 TBA daily courses, out of a population of approximately
164 courses. We noted that TBA contact hours of 3,410.60 of 14,596 tested, or 23 percent of those
tested, were not supported by documented attendance records.
Effect
FTES reported on the Annual Form 320 were overstated and the District may have received
apportionment funding for those FTES.
Cause
The District did not have a process to capture and reduce the Annual Form 320 data for those
students who did not participate for a minimum amount of To Be Arranged Hours.
Recommendation
We recommend the District review participation records for all To Be Arranged courses and remove
contact hours for those students who are not participating.
Management's Response and Corrective Action Plan
For 2012-13 an amended CCFS-320 was submitted on November 12, 2013. The amended report
removed 6.40 FTES from weekly courses.
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CABRILLO COMMUNITY COLLEGE DISTRICT
STATE AWARDS FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2013
2013-2
Finding – Student Fees – Instructional Materials
Significant Deficiency – Compliance
Criteria or Specific Requirement
CCR Title V 59400-59408 sets certain requirements for Colleges that charge instructional fees.
Section 55440(d) of the California Code of Regulations and Section 4.7 of the Student Fee handbook
provides that no student may be prevented from participating in a field trip due to lack of funds.
Essentially, Districts may not charge a mandatory fee for a field trip unless it exempts students who
do not have sufficient funds to pay the fee.
Condition
In 1 out of 10 courses reviewed, we noted the following:
 The course fee for a camping trip was identified as mandatory rather than optional,
 Course expenditures included two unallowable costs; an instructional aide stipend and a tire
repair.
Questioned Costs
 $10,000 based on a fee of $500 charged to 20 students enrolled in the course.
 $1,000 instructional aide stipend and $96.96 tire repair.
 No extrapolated costs as this was the only such course in the population.
Context
We reviewed the class schedule and selected ten courses for review that charged mandatory
instructional fees.
Effect
The District does not appear to be in compliance with notifying students of a process that would
exempt students who do not have sufficient funds to pay the mandatory fees.
Cause
No process was in place to notify students that mandatory instructional field trip fees could be
waived for students who do not have sufficient funds to pay the mandatory fees.
Recommendation
The District should ensure that a mandatory fee exemption process is established and that students
are notified of the process to apply for an exemption through materials provided to the students at the
beginning of the course or through other publication methods.
Management's Response and Corrective Action Plan
The District has reviewed the mandatory fee exemption notification process and ensures that students
are informed of the policy.
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CABRILLO COMMUNITY COLLEGE DISTRICT
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30 2013
Except as specified in previous sections of this report, summarized below is the current status of all audit findings
reported in the prior year's Schedule of Findings and Questioned Costs.
2012-1
Finding – Student Financial Aid Cluster, Pell Grants - CFDA #84.063
Significant Deficiency, Internal Control Over Compliance - Reporting
Criteria or Specific Requirement
OMB A-133 Compliance Supplement Part 5 Reporting Requirements for Student Financial Aid
programs indicates that institutions must report student payment data to the Common Origination and
Disbursement (COD) system within 30 calendar days after the institution makes the payment to the
student.
Condition
Reports to the COD system of student payment data were not made within the allowed 30 day
timeframe.
Questioned Costs
None – Reports were accurately filed, but were filed late.
Context
We reviewed 40 disbursements and noted 15 that were reported later than the allowed 30 day
timeframe.
Effect
The District was not in compliance with one of the reporting deadlines required by the Student
Financial Aid award requirements.
Cause
The District has indicated that a turnover in personnel lead to the reports not being timely filed.
Recommendation
Ensure that critical processes and deadlines are summarized in a procedures checklist format that can
be used by personnel as a reminder or a summary of tasks to be done.
Current Status
Implemented.
79
CABRILLO COMMUNITY COLLEGE DISTRICT
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30 2013
2012-2
Finding – To Be Arranged Hours (TBA)
Significant Deficiency – Compliance
Criteria or Specific Requirement
Pursuant to Title 5, Sections 58003.1(b) and (c), the TBA portion of a course uses an alternative
method for regularly scheduling a credit course. In addition, Legal Advisory 08-02 To Be Arranged
(TBA) Hours Compliance Advice indicates that documentation is required to substantiate that each
student has completed the TBA requirements as appropriate for either the Weekly or Daily census
attendance accounting procedures.
Condition
We noted that contact hours for students where documentation of participation for at least 50 minutes
of the To Be Arranged time was not available had not been removed from the 320.
Questioned Costs
19.44 FTES, should be removed from weekly courses to remove contact hours of students who did
not demonstrate TBA activity participation.
Context
We reviewed 25 TBA weekly courses, out of a population of approximately 190 courses. We noted
that TBA contact hours of 10,207 of 21,073 tested, or 48 percent of those tested, were not supported
by documented attendance records. There was no significant level of TBA daily courses noted.
Effect
FTES reported on the Annual Form 320 were overstated and the District may have received
apportionment funding for those FTES.
Cause
The District did not have a process to capture and reduce the Annual Form 320 data for those
students who did not participate for a minimum amount of To Be Arranged Hours.
Recommendation
We recommend the District review participation records for all To Be Arranged courses and remove
contact hours for those students who are not participating.
Current Status
Not Implemented. See Finding 2013-1.
80
CABRILLO COMMUNITY COLLEGE DISTRICT
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30 2013
2012-3
Finding – State General Apportionment Funding System
Significant Deficiency – Compliance
Criteria or Specific Requirement
Positive Attendance Courses - Education Code 58003.1 (d) and (e) and the Student Attendance
Account Manual define Positive Attendance courses as those scheduled to meet for fewer than five
days, and credit courses scheduled to irregularly with respect to the number of days of the shall be
computed by dividing the actual student contact hours of attendance by 525.
Contact hour calculations shall be computed by taking actual student contact hours, up to a maximum
of hours consistent with the course outline and schedule, divided by 525.
Condition
Positive attendance contact hours for courses in the Athletics department included hours in excess of
the maximum that would be consistent with the course outline and schedule.
Questioned Costs
4,978 contact hours, or 9.48 FTES from three athletic courses. This amount is based on a review of
all of the athletic courses for the fiscal year, therefore, no extrapolation to a population is considered
necessary.
Context
We reviewed 25 courses totaling 29,576 contact hours and noted three courses, all within the
Athletics department, in which a total of 4,978 contact hours were not limited to the amount
consistent with the course outline and schedule.
Effect
FTES reported on the Annual Form 320 were overstated and the District may have received
apportionment funding for those FTES.
Cause
The District did not have a process to capture and reduce the Annual Form 320 data for those
Athletic department students whose hours of attendance exceeded the maximum consistent with the
course outline and schedule.
Recommendation
We recommend the District review participation records for all To Be Arranged courses and remove
contact hours for those students who are not participating.
Current Status
Implemented.
81
CABRILLO COMMUNITY COLLEGE DISTRICT
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30 2013
2012-4
Finding – Concurrent Enrollment of K-12 Students Enrolled in Credit Courses
Significant Deficiency – Compliance
Criteria or Specific Requirement
A community college district may claim FTES for the attendance of K-12 pupils who take courses
offered by the district under the concurrent enrollment arrangement only if it complies with specific
conditions. Per Education Code Section 48800(a), for summer session, K-12 principals may not
recommend more than five percent of the number of pupils who have completed a particular grade
immediately prior to the recommendation.
Condition
The high school release forms for summer 2011 concurrent enrollment students did not consistently
contain the required language indicating that the Principal ensured that he/she did not recommend
more than 5% of the total number of graduates from the applicable High School.
Questioned Costs
Total FTES claimed for summertime students without Principal certification was 0.71 FTES.
Context
We noted that seven of eight concurrent enrollment authorization forms reviewed did not contain the
required language.
Effect
The District was not in compliance with monitoring the State requirements regarding the operations
of concurrent enrollment courses and may be subject to removal of some of the associated FTES.
Cause
The District did not review the documentation received from the high school to verify that the high
school principals certified they did not recommend more than 5% of the students for summer courses.
Recommendation
The District should work with the High Schools to develop procedures to ensure that the approval
forms contain the necessary language for the concurrently enrolled students.
Current Status
Implemented.
2012-5
Finding – Student Fees – Instructional Materials
Significant Deficiency – Compliance
Criteria or Specific Requirement
CCR Title V 59400-59408 sets certain requirements for Colleges that charge instructional fees.
Section 55440(d) of the California Code of Regulations and Section 4.7 of the Student Fee handbook
provide that no student may be prevented from participating in a field trip due to lack of funds.
Essentially, Districts may not charge a mandatory fee for a field trip unless it exempts students who
do not have sufficient funds to pay the fee.
82
CABRILLO COMMUNITY COLLEGE DISTRICT
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30 2013
Condition
During our testing of instructional material fees charged by the college, we noted that the amounts for
a field trip fee associated with a Geology course were collected, however, the District did not have a
mechanism in place to inform students that students who do not have sufficient funds to pay the fee
could be exempted.
Questioned Costs
$435 based on a $15 fee charged to 29 students enrolled in the course.
Context
We reviewed the class schedule and selected five courses for review that charged mandatory
instructional fees.
Effect
The District does not appear to be in compliance with notifying students of a process that would
exempt students who do not have sufficient funds to pay the mandatory fees.
Cause
No process was in place to notify students that mandatory instructional field trip fees could be
waived for students who did not have sufficient funds to pay the mandatory fees.
Recommendation
The District should ensure that a mandatory fee exemption process is established and that students
are notified of the process to apply for an exemption through materials given to the students at the
beginning of the course or through other publications methods.
Current Status
Not Implemented. See Finding 2013-2.
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