HARTNELL COMMUNITY COLLEGE DISTRICT
Board of Trustees
Annual Organization and Regular Meeting*
Board Room, CAB-112
411 Central Avenue
Salinas, California
Tuesday, December 1, 2009
5:00 p.m. – Public Session – Swearing in New Trustees
5:45 p.m. – Closed Session
6:00 p.m. – Reconvene in Public Session
Board of Trustees
Patricia Donohue, President
Kevin Healy, Vice President
Bill Freeman, Elia Gonzalez-Castro
John Martinez, Ray Montemayor, Brad Rice
Armando Cortes, Student Trustee
Dr. Phoebe Helm, Superintendent/President, Secretary to the Board
*In accordance with Education Code Section 72000, the Annual Organizational Meeting of the Board of Trustees of Hartnell
Community College District is scheduled in Room C-112, Board Room/Administration Building Hartnell College.
The Board of Trustees welcomes you to its meetings, scheduled on the first Tuesday of each month,
unless otherwise noted.
Typically, the agenda consists of the following:
A. CONSENT AGENDA: These matters include routine administrative and financial actions and are
usually approved by a single majority vote.
B. REGULAR AGENDA: Action Items: These items include significant administrative and financial
actions classified by departmental areas and approved by majority vote for each item.
Information Items: These items include presentations to the Board and items for discussion prior to
Board action, usually taken at the next meeting.
C. CLOSED SESSION: In accordance with Government Code Sections, 3549.1, 54956.9, 54957
and/or 54957.6, the Board of Trustees may meet in Closed Session to consider legal, personnel, labor,
and/or contract matters.
INDIVIDUALS DESIRING TO ADDRESS THE BOARD: Any member of the audience desiring to
address the Board should complete and submit to the Superintendent prior to the meeting, if possible, a
Speaker Request Form, available at the door. When the item PUBLIC COMMENTS is taken, the Board
President will recognize those who have filled out a Speaker Request Form in the order in which they are
received. The Board President may limit the time of presentation to three minutes per speaker, and a
maximum of fifteen minutes. Following public comment, the Board President will limit discussion to the
Board only.
MISSION STATEMENT: Hartnell College provides the leadership and resources to ensure that all
students shall have equal access to a quality education and the opportunity to pursue and achieve their
goals. We are responsive to the learning needs of our community and dedicated to a diverse educational
and cultural campus environment that prepares our students for productive participation in a changing
world.
HCCD – ANNUAL ORGANIZATION AND REGULAR MEETING – DECEMBER 1, 2009
Page 1 of 4
I.
OPEN SESSION, CALL TO ORDER – 5:00 P.M.
A. ROLL CALL
Action
B. ADOPT AGENDA
Action
C. RESOLUTIONS OF APPRECIATION
Adopt Resolutions of Appreciation in recognition of outstanding public service.
D. SWEARING IN OF NEW TRUSTEES
Administer Oath of Office to recently elected Trustees to serve four-year terms, effective
December 4, 2009 in accordance with Education Code 72000.
E. DISCLOSURE OF ITEMS DISCUSSED IN CLOSED SESSION, AS FOLLOWS:
Items discussed in Closed Session will include, legal, personnel, labor, and/or contract matters
authorized for Closed Session per Government Code Sections, 3549.1, 54956.9, 54957, and/or
54957.6.
F. PUBLIC COMMENT PERIOD REGARDING CLOSED SESSION ITEMS
Fifteen minutes set aside for public comment on closed session items.
Maximum three minutes each.
II.
III.
MOVE TO CLOSED SESSION
The Board of Trustees of Hartnell Community College District will meet in Closed Session to
consider legal, personnel, labor, and/or contract matters authorized for Closed Session per
Government Code Sections, 3549.1, 54956.9, 54957 and/or 54957.6.
RECONVENE TO OPEN SESSION (APPROXIMATELY AT 6:00 P.M.)
Pledge of Allegiance
A. REPORT OUT FROM CLOSED SESSION
IV.
Action
ANNUAL ORGANIZATION OF THE BOARD OF TRUSTEES
A. ELECTION OF OFFICERS
Elect officers to the Board of Trustees for the 2010 calendar year.
Action
B. APPOINTMENT OF REPRESENTATIVES TO STANDING ORGANIZATIONS
Appoint one representative to the Sunrise House and one representative to the Monterey County
School Boards Association for the 2010 calendar year.
Action
C. DESIGNATION OF 2010 BOARD MEETING DATES AND TIMES
Set dates and times of Board meetings for the 2010 calendar year.
Roll-call
D. RESOLUTION 09:24, AUTHORIZING SIGNATURE OF BOARD SECRETARY ON
DOCUMENTS
Adopt Resolution 09:24, Authorizing Signature of Board Secretary to sign all appropriate
documents.
HCCD – ANNUAL ORGANIZATION AND REGULAR MEETING – DECEMBER 1, 2009
Page 2 of 4
V.
PUBLIC COMMENTS
Twenty minutes set aside to receive public comments on open session agenda items or items not on
the open session agenda, but within the jurisdiction of the Board. Maximum three minutes each.
A. Receive public comments on items on the open session agenda
B. Receive public comments on items not on the open session agenda
VI.
PRESENTATIONS
A. BOND OVERSIGHT COMMITTEE UPDATE – See Information Item IX. A.
Damon Felice, Townsend Management, Inc.
B. PRESENTATION ON ANNUAL AUDIT REPORTS
Gema M. Ptasinski, CPA – Vicenti, Lloyd, & Stutzman LLP
1. Independent Accountant’s Audit Report for the year ending June 30, 2009
2. Measure H Obligation Bond Independent Accountant’s Report (Performance Audit) and
Financial Audit for 2008-09
VII.
CONSENT ACTION ITEMS
A. MINUTES
Approve Minutes of Regular Meeting of November 10, 2009.
B. DISBURSEMENTS
Ratify disbursements from any or all of the following funds: general; debt service; bookstore;
child development; capital outlay projects; scheduled maintenance; property acquisition; bond
projects; cafeteria; self-insurance; retirees health benefits; associated student body; scholarship,
loan, and trust; and intercollegiate athletics.
C. NON-CASH DONATIONS
Accept non-cash donations from the Hartnell College Foundation.
D. CURRICULUM COMMITTEE
Ratify Curriculum Committee actions.
E. EXTEND LEASE AGREEMENT WITH FRANSCIONI BROTHERS, INC
Approve an extension to the lease agreement with Franscioni Brothers, Inc., for Alisal Campus
farmland. The extension is for one year and is effective December 3, 2009 to December 2, 2010.
F. CONTRACTS WITH PARTNERS AND CONSULTANTS – CLEAN ENERGY GRANT
Ratify the contracts with partners and consultants funded by the Clean Energy Workforce
Training Program grant for $500,000.
G. EXTEND OFFICE DEPOT PURCHASING AGREEMENT
Approve extending the purchasing agreement with Office Depot under the competitively bid
agreement with Los Angeles County. This is a one-year extension effective January 2, 2010 to
January 1, 2011.
H. SUB-AWARD GRANT FROM UNIVERSITY CORPORATION AT MONTEREY BAY
Accept the sub-award grant (College Cost Reduction and Access Act – Hispanic Serving
Institutions) from the University Corporation at Monterey Bay for $110,000. Through the subaward, the objective is to increase the number of transfer students to CSU, Monterey Bay in the
Science, Technology, Engineering, and Math majors.
HCCD – ANNUAL ORGANIZATION AND REGULAR MEETING – DECEMBER 1, 2009
Page 3 of 4
I. APPROVE APPOINTMENTS TO INDEPENDENT CITIZENS’ BOND OVERSIGHT
COMMITTEE
Approve two appointments to the Independent Citizens’ Bond Oversight Committee effective
December 17, 2009 (At large) and February 19, 2010 (Bona fide Taxpayers’ Association).
J. PERSONNEL ACTIONS
Approve and/or ratify Personnel Actions (included in packet).
VIII.
ACTION ITEMS
Action
A. ACCEPT INDEPENDENT ACCOUNTANTS’ AUDIT REPORT FOR YEAR ENDING
JUNE 30, 2009
Accept the Independent Accountants’ Audit Report for the year ending June 30, 2009.
Action
B. ACCEPT MEASURE H GENERAL OBLIGATIONS BOND INDEPENDENT
ACCOUNTANTS’ REPORT AND FINANCIAL AUDIT FOR 2008-2009
Accept the Measure H Obligations Bond Independent Accountant’s Report (Performance
Audit) and Financial Audit for 2008-2009.
Roll-call
IX.
C. APPROVE BUDGET REVISIONS
Approve budget revisions numbered 8493 to 8506.
INFORMATION ITEMS
A. BOND OVERSIGHT REPORT
Receive written report from Bond Oversight Committee
B. FINANCIAL STATEMENTS
Receive and accept financial statements for month ending October 31, 2009.
C. REPORTS FROM SENATES
Reports from Student, Classified, and Academic Senates
D. PRESIDENT’S REPORT
Report from the Superintendent/President
E. BOARD OF TRUSTEES COMMUNICATION
Trustee reports on matters of interest to the college
X.
ADJOURNMENT
Adjourn the meeting
The agendas are set by the President of the Board in consultation with the Superintendent/President.
To add future items, contact the board chair or the Superintendent/President.
NEXT MEETING: January 12, 2010, 5:00 p.m., CAB-112, Hartnell College Board Room
HCCD – ANNUAL ORGANIZATION AND REGULAR MEETING – DECEMBER 1, 2009
Page 4 of 4
ANNUAL ORGANIZATION
ANNUAL ORGANIZATION MEETING OF TRUSTEES:
Title:
December 1, 2009
Number:
Annual Election of Officers for 2010
IV. A.
Area:
Status:
Annual Organization Meeting
Action
Recommendation:
That the Board of Trustees conducts the election of officers and appoints Superintendent/
President as Secretary to the Board.
Summary:
In accordance with Education Code Section 72000, the Hartnell College District Board of
Trustees will conduct its annual election of officers for 2010 as follows:
Board President
Board Vice President
Appoint Superintendent/President as Secretary of Board in accordance with Board Policy 1010,
Annual Organization Meeting and Officers of the Board.
ANNUAL ORGANIZATION MEETING OF TRUSTEES:
Title:
December 1, 2009
Number:
Annual Appointment of Representatives to
Standing Organizations
IV. B.
Area:
Status:
Annual Organization Meeting
Action
Recommendation:
That the Board of Trustees appoints the 2010 representatives to standing organizations.
Summary:
Each year, the Hartnell College District Board of Trustees appoints a representative to the
Sunrise House. Also, this year, the Monterey County School Boards Association (MCSBA)
has requested that the Board appoint a representative to MCSBA at their annual organization
meeting.
Therefore, the Board will need to appoint one representative for 2010:
Sunrise House
Monterey County School Boards Association
Budget Implications:
None
ANNUAL ORGANIZATION MEETING OF TRUSTEES:
December 1, 2009
Number:
Title:
Designation of 2010 Board Meeting
Dates and Times
IV. C.
Area:
Status:
Annual Organization Meeting
Action
Recommendation:
That the Board of Trustees adopts the recommended dates and times for meetings in 2010.
Summary:
Education Code Section 72000 requires that the governing board of each community college
district hold regular monthly meetings. Dates and times of Closed Session and Open Board
Meetings are recommended for the first Tuesday of each month, except where noted. The dates
and times are as presented below:
Meeting Date
January 19, 2010*
February 2, 2010
March 2, 2010
April 6, 2010
May 4, 2010
June 1, 2010
July 6, 2010
August 3, 2010
September 7, 2010
October 5, 2010
November 2, 2010
December 7, 2010
January 18, 2011*
Closed Session**
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
5:00 p.m.
Open Board Meeting
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
6:00 p.m.
*These dates have been set two weeks later than usual to accommodate the academic calendar.
**The Board opens its meetings at 5:00 p.m., accepts public comments related to closed session
matters, and then adjourns to closed session.
ANNUAL ORGANIZATION MEETING OF TRUSTEES:
Title:
Adopt Resolution 09:24, Authorizing
Signature of Superintendent/President as
Secretary of the Board of Trustees
Number:
Area:
Status:
Annual Organization Meeting
Action (Roll Call)
December 1, 2009
IV. D.
Recommendation:
That the Board of Trustees adopts Resolution 09:24 authorizing the signature on appropriate
documents of Dr. Phoebe Helm, Superintendent/President, as Board of Trustees Secretary.
Summary:
WHEREAS, Board Policy 1010, Annual Organization Meeting and Officers of the
Board, states that the Superintendent/President will serve as Secretary of the Governing Board,
WHEREAS, Dr. Phoebe Helm is the Superintendent/President,
NOW, THEREFORE, BE IT RESOLVED, that Dr. Phoebe Helm is hereby authorized
to sign all appropriate documents requiring the signature of the Board of Trustees’ Secretary.
AYES:
NOES:
ABSENT:
PRESENTATIONS/BOARD DEVELOPMENT
CONSENT ACTION
AGENDA ITEM FOR BOARD MEETING OF:
December 1, 2009
Number:
Title:
Approve Minutes of Regular Meeting of
November 10, 2009
VII. A.
Area:
Status:
Superintendent/President
Prepared by: Dr. Phoebe Helm
Consent Action
Recommendation:
That the Board of Trustees review, revise as appropriate, and adopt minutes of regular meeting
of November 10, 2009.
Summary:
Minutes of the Board of Trustees for are submitted for review and approval as follows:
Regular Meeting of November 10, 2009
Unadopted
HARTNELL COMMUNITY COLLEGE DISTRICT
MINUTES
Regular Meeting of the Board of Trustees
Hartnell College Board Room – CAB112
411 Central Avenue
Salinas, California
November 10, 2009
OPEN SESSION
Meeting called to order at 5:03 p.m.
ROLL CALL
Patricia Donohue, President
Bill Freeman (Arrived at 5:22 p.m.)
Kevin Healy, Vice President
Elia Gonzalez-Castro
Juan Martinez (Arrived at 5:40 p.m.)
Ray Montemayor
Brad Rice
Phoebe K. Helm, Superintendent-President/Board Secretary
ABSENT
Armando Cortes, Student Trustee (advisory vote per Board Policy 1030)
AGENDA
Since the publication of the agenda, the agenda was amended to include:
Closed Session: Appointment of Vice President, Academic Affairs/
Accreditation and Clarification of Resolution 09:6, Golden Handshake
Also, The Board received a revised Consent Action Item IV. L. Personnel
Action, which included the appointment of one management position, one
classified position and the resignation of one classified employee.
Motion by Trustee Rice, seconded by Trustee Healy, and vote of 5-0, the
Board adopted the agenda as amended.
Absent: Freeman, Martinez
DISCLOSURE OF
CLOSED SESSION
ITEMS
Trustee Donohue disclosed items for Closed Session as authorized per
Government Code Sections, 3549.1, 54956.9, 54957 and/or 54957.6:
1. Update on Lawrence/Culver Case
2. Reduction of two academic employees
3. Appointment of Vice President, Support Operations and appointment of
Vice President, Academic Affairs/Accreditation
4. Clarification of Resolution 09:6, Golden Handshake (as requested by the
State Teachers’ Retirement System)
PUBLIC COMMENTS
REGARDING CLOSED
SESSION
There were no public comments regarding closed session items.
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 1 of 12
MOVED TO CLOSED
SESSION
The Board of Trustees, Dr. Phoebe Helm, Superintendent/President, and
Terri Pyer, Interim Director, Human Resources adjourned to closed session
at 5:07 p.m. to consider legal, personnel, labor, and/or contract matters
authorized for Closed Session per Government Code Sections, 3549.1,
54956.9, 54957 and/or 54957.6.
RECONVENED OPEN
SESSION
Meeting reconvened the meeting at 6:04 p.m.
PLEDGE OF
ALLEGIANCE
Trustee Freeman led the Pledge of Allegiance.
REPORT OUT FROM
CLOSED SESSION
Trustee Donohue reported out from closed session a motion by Trustee
Freeman, seconded by Trustee Martinez, to hire an additional independent
auditor. The motion failed on a vote of 1-6. ( No – Donohue, GonzalezCastro, Healy, Martinez, Montemayor, Rice)
Dr. Helm clarified that the college already has an independent auditor
because state and federal laws mandate that it does.
On a motion by Trustee Healy, seconded by Gonzalez-Castro, vote of 7-0,
the Board approved a language change to Resolution, 09:6, Golden
Handshake to include, “the window period is from April 15 to July 7, 2009”.
Since the adoption of Resolution 09:6 in April 2009, the Board approved to
amend the Resolution on two other occasions extending the window period
to July 7th. However, the State Teachers’ Retirement Systems (STRS) has
requested that the Board include the term “window period” and the dates,
April 15-July 7, 2009, in one resolution rather than amendments to the April
2009 resolution.
PUBLIC COMMENTS
ON OPEN SESSION
ITEMS
There were none.
PUBLIC HEARING:
Reallocation of
Categorical Funding
Trustee Donohue opened the public hearing. Dr. Helm explained the State
has allowed an opportunity for the college to move certain restricted monies
from one category to another. In choosing to do so, it releases the college
from certain reporting requirements. The student services area has
recommended moving $70,000 from Matriculation to Disabled Student
Program and Services (DSP&S) to retain an instructional specialist for
disabled students. Dr. Helm explained that matriculation is a process that
enhances student access to the California Community Colleges and
promotes efforts to ensure that all students complete their college courses,
persist to the next academic term, and achieve their educational objectives.
The remaining matriculation funds will be used to support: process:
admissions, orientation, assessment and testing, counseling, and student
follow-up. The college recognizes that student access and success is the
core responsibility of each employee, regardless of their specific job.
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 2 of 12
Cathy Noble, DSP&S Coordinator, spoke about the DSP&S program, its
history at the college, the importance of retaining the instructional specialist,
and the federal mandate that requires the college to provide DSP&S
services.
There were no further public comments.
Bond Oversight
Committee Report
Damon Felice, Felice Consulting Services reported on the status of district’s
construction projects as of October 28, 2009. The written report is at:
http://www.hartnell.edu/board/packets/Nov_Board_Packet_2009.pdf (Page
107).
CONSENT ACTION
Pulled for discussion were: Items E (Freeman) and K (Martinez).
On a motion by Trustee Montemayor, seconded by Trustee Rice, vote of 70, the Board approved Consent Action Items A through L.
A. MINUTES
Approved minutes of regular meeting of October 6, 2009 and minutes of
special meeting of October 20, 2009 – Public Hearing and Adoption of the
2009-2010 Annual Budget.
B. DISBURSEMENTS
Approved disbursements from any or all of the following funds: general;
debt service; bookstore; child development; capital outlay projects;
scheduled maintenance; property acquisition; bond projects; cafeteria; selfinsurance; retirees health benefits; associated student body; scholarship,
loan, and trust; and intercollegiate athletics.
C. CURRICULUM
COMMITTEE
Ratified recommendations from the Curriculum Committee.
D. AMENDED MOU
KING CITY TOWN
SQUARE, LLC
Approved an amendment to the Memorandum of Understanding between
King City Town Square and Hartnell Community College District. The
amendment includes an increase of $1,500 for landscaping, grounds
maintenance, pruning, and hauling services.
E. STUDENT CENTER
RENOVATION
PROJECT
Accepted the bid withdrawal of Menghetti Construction and award a contract
to the lowest responsive bidder, DMC Construction, for the Student Center
Renovation Project for $3,975,000, paid with Measure H funds.
Trustee Freeman asked why Mengehetti withdrew their bid and Damon
explained that the company asked to be relieved of their bid because subcontractors included in the bid could not meet their obligations.
F. OUT OF POVERTY
GRANT
Ratified grant application to the United States Department of Labor,
Employment, and Training Administration for the Pathways Out of Poverty
Program, and accept funds, and the scope of work, if awarded. The grant
amount, if awarded could be up to $2,896,586 for January 2010 to December
2011.
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 3 of 12
G. CHILD CARE
ACCESS MEANS TO
PARENTS IN
SCHOOL GRANT
Accepted funds from the United States Department of Education for the
Child Care Access Means to Parents in School grant. The grant provides
funding to expand free childcare services (at the main campus) on Saturdays,
as well as, winter intersession, and summer session. The college will receive
$147,888 over the next three years.
H. STATE PRESCHOOL
PROGRAM CONTINUED
FUNDING
Ratified amendment to 2009-10 Contract for Continued Funding, California
State Preschool Program. The amendment increases funding amount by
$89,124. Increased funding will provide additional free preschool services
for approximately 24 children.
I.
CHILD
DEVELOPMENT
TRAINING
CONSORTIUM –
YOSEMITE
COMMUNITY
COLLEGE
Ratified the renewal of the instructional agreement with California Child
Development Training Consortium between Yosemite Community College
District/Child Development Training Consortium and Hartnell College for
academic year 2009-10. The funds received by the college would be up to
$10,000 to support approximately 107 students (currently employed as
caregivers, teacher assistants, and teachers in licensed Early Childhood
Education programs) with enrollment fees, books, supplies, and instructional
materials.
J.
REQUEST FOR
QUALIFICATION/
PROPOSAL
PROCESS – CAB
REMODEL PROJECT
Approved issuing Request for Qualification/Proposal Process for Design
Build Services for the CAB Remodel Project. The estimated budgeted
amount for these services is at a minimum of $2,500,000 and will be paid
with Measure H funds.
K. SKYLINE
ENGINEERING DESIGN OF PLANS
Approved a contract with Skyline Engineering for the design of plans and
specifications for the replacement of roof for the King City Education
Center.
Trustee Martinez questioned why a new roof and how will it be funded.
Damon Felice explained the current roof is leaking, has already had some
repair, and needs to be replaced with a more energy-efficient roof. The cost
of the design is not to exceed $11,000 and will be paid with Measure H
funds.
L. PERSONNEL
ACTIONS
ACTION ITEMS
A. BUDGET
REVISIONS
B. CCFS-311Q ENDING
SEPT. 30, 2009
Approved and/or ratified personnel actions as amended – Appendix A
On a motion by Trustee Healy, seconded by Trustee Martinez, roll-call vote
of 7-0, the Board approved budget revisions numbered 8480-8491.
On a motion by Trustee Healy, second by Trustee Gonzalez-Castro, roll-call
vote of 7-0, the Board reviewed and accepted the required State Report:
Quarterly Financial Status Report (CCFS-311Q) for quarter ended
September 30, 2009.
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 4 of 12
Dr. Helm stated that the college did its first borrowing to cover payroll for
October 27, 28, and 29, caused by a cut in funding and the State’s delay in
reimbursements which, of course, pushes the State’s cash flow problem
down to the colleges. Current forecasts indicate the college will be able to
manage payroll and other financial commitments through June 30th without
additional borrowing. The college tracks its cash daily to keep its status upto-date.
C. ADOPT
RESOLUTION 09:23
On a motion by Trustee Gonzalez-Castro, second by Trustee Freeman, rollcall vote of 7-0, the Board adopted Resolution 09:23, Establishing
Reallocation of Categorical Funding 2009-10 as reviewed in the Public
Hearing earlier in the meeting.
INFORMATION ITEMS
FINANCIAL
The Board received and accepted the financial statements for the month
STATEMENTS
ending September 30, 2009.
SEATING OF NEW
BOARD MEMBERS
The Board reviewed Policy 1010, Annual Organizational Meeting and
Officers of the Board. Each year, in December, the Board of Trustees holds
its annual organizational meeting and when applicable, swears in new
members. In accordance with Education Codes 5017 and 72000(2)(A), the
Board would need to take two actions at the December meeting (1) newly
elected members will be sworn in for a four-year term that begins on Friday,
December 4, 2009, and (2) officers of the Board will be elected from
amongst its members. These offices are effective Friday, December 4, 2009.
Outgoing Board members retain their official responsibilities until Friday,
December 4, 2009.
SENATE REPORTS
Student Senate: Cara Singleton, VP of Communications, reported that Senate
members participated in the California Community College Student Affairs
Association assembly in San Francisco where they learned to write
resolutions, voted on resolutions, and discussed the budget crisis. Concerns
expressed at the assembly were cuts to general education courses, budget
constraints, and student health centers. Also, she spoke about the Spooktacular event, the up-coming toy drive on December 5, 2009, and the
Festival of Trees Celebration.
Academic Senate: Dr. Kelly Locke reported that Cheryl O’Donnell spoke to
the Senate about the process for preparing the accreditation mid-term report
and that the Senate is forming writing teams; that the Senate took action to
form a task force to look at a 16-week calendar; and that they have started a
discussion on priorities set by the legislature regarding transferable and basic
skill courses. The Senate is firmly committed to determining their own
priorities as a college and committed to do those things that fall into the
college’s priories, rather than being pressured to take over things that other
institutions aren’t able to do. As an example, she reported that the math
transferable courses are already at capacity for the spring semester and this is
something the college will need to deal with.
Classified Senate: There was none.
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 5 of 12
PRESIDENT’S REPORT
Dr. Helm asked the audience and Board to join her in congratulating Barbara
Yesnosky, Associate Vice President Support Operation, in her new position
with Chabot/Las Positas Community College District. She acknowledged
and thanked the search committees, Terri Pyer, and staff for the selection of
the two new vice presidents, Dr. Suzanne Flannigan (Academic Affairs) and
Kent Stephens (Support Operations). Also, she would like to work with the
board chair to bring to the Board, at the December meeting, a board
development calendar. This Thursday, an orientation provided by the
Monterey County School Boards Association is scheduled for new board
members, although all members are welcomed. Other workshops/trainings
include a workshop, sponsored by the California League of Community
College, in January, both an ethics training and a workshop on role and
responsibilities of the bond oversight committee in February, and a training
on faculty tenure review in March.
The trainings are part of the on-going development plan that was adopted by
the Board and approved by the Accrediting Commission in 2007. Board
development is one of the requirements for accreditation.
BOARD
COMMUNICATION
Trustee Freeman said he was honored to serve with Trustee Martinez over
the past six years and that he will miss him. Also, he wants to look into
Monterey/Salinas Transit discount bus passes for students. Trustee Rice
commented that they are already discounted.
Trustee Gonzalez-Castro thanked the committee involved with organizing
The Western Stage Gala – that it was a wonderful event that she,
unfortunately, could not attend because of the birth of her first grandchild;
she thanked the Child Development Center for their invitation to conduct a
class on nutrition to the children and families of the center; she thanked
Susan Langland, nutrition faculty, for inviting her to speak to nutrition
students. Also, she thanked Trustee Martinez for his years of service on the
Board and for his commitment to the community, and she congratulated
Trustee Montemayor on winning his election. In closing, she thanked Andy
Newton and Dr. Greg Peterson for organizing, in a very short time, a tour of
the campus for several hundred 6th grade students from the Alisal Union
School District.
Trustee Martinez spoke about the recent unveiling of the wall relief of
William Hartnell and Maria de la Guerra stating that the location is great and
that he appreciated the support from the faculty and the Foundation for this
project. Also, he recently attended The Western Stage performance “Mame”
and encouraged all to see.
Trustee Donohue report she attended the Gala and had a wonderful time; that
she recently attended a student senate meeting; and that she attended the
Music Department’s Open House and was delighted to see extraordinary
student talent and good food for $15. In closing, she thanked the maintenance
staff for their outstanding work in keeping the campus green, clean and safe.
FUTURE ITEMS
None
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 6 of 12
ADJOURNMENT
On a motion by Trustee Rice, seconded by Trustee Freeman, and
unanimously carried, the Board adjourned the meeting adjourned at 7:14 p.m.
in memory of those who lost their lives in Fort Hood, in particular the
families left behind, and that we should remember our veterans.
NEXT MEETING
The Board of Trustees will hold its Annual Organizational Meeting and
Regular Board Meeting on December 1, 2009, 5:00 p.m., Hartnell College,
CAB112, Board Room.
Patricia Donohue
Board of Trustees President
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Phoebe K. Helm
Board Secretary
Page 7 of 12
APPENDIX A
THE FOLLOWING PERSONNEL ACTIONS WERE APPROVED AND/OR RATIFIED
AT THE REGULAR MEETING OF NOVEMBER 10, 2009:
I. Retirements, resignations, releases, and leave requests
A. Approve resignation of regular personnel:
1. Barbara Yesnosky, Associate Vice President for Support Operations (#A-46),
effective November 30, 2009.
2. David Fox, Maintenance Specialist (#CL-9), Maintenance and Operations,
effective November 21, 2009.
II. Appointments
A. Approve appointment to Management position:
1. Vice President for Support Operations (#A-46), management range I(a), effective
December 1, 2009.
2. Suzanne Flannigan, Vice President for Academic Affairs and Accreditation
(#A-47), management range I(a), Step E, effective January 12, 2010.
A. Ratify appointment of regular classified personnel:
1. Yvonne Carreon, part-time, 20 hours per week, 10 months per year, Clerical
Assistant-TRIO (#CC-104), Step B, effective September 28, 2009—grant
funded.
B. Ratify appointment of part-time non-credit instructors for fall semester 2009:
1. Laura Cannon, Social Studies & Language Arts
2. Yvonne Carreon, Math & Science (general education)
3. Irina Lee, English as a Second Language
C. Ratify appointment of part-time instructors for fall semester 2009:
1. Gabriel Bravo, Counseling
2. Tito Polo, Engineering. Appointment based on equivalency as follows: 9 units
graduate course work in Electrical Engineering, BS in Electrical Engineering, and
4 years experience in Electronics Industry.
D. Ratify volunteers:
1. Tenia Bey, Nursing.
2. Kenneth K. Chee, Administrative Information Systems.
3. Ricardo S. Garcia, Physical Education.
4. Ramon Hernandez, Physical Education.
5. Jennifer Ochoa, Financial Aid.
6. Jacqeline Sells, Physical Education.
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 8 of 12
E. Ratify appointment of Professional Experts:
a. Hartnell’s theater arts program/The Western Stage (TWS) provides students the
opportunity to learn their craft within a professional context. TWS’ current season
runs through December 4, 2009:
1. Lucy Faridany, $1125, musical accompaniment for The Baker’s Wife.
2. Jeff Gallagher, $1225, musical accompaniment for The Baker’s Wife.
3. Ian Shields, $1300, musical accompaniment for The Baker’s Wife.
b. The Foster Kinship Care Education Program (FKCE) provides advanced training
for current and prospective foster, relative, and non-related extended family
member caregivers, adoptive parents, and local agency employees; and support for
foster home recruitment activities. This grant-funded program is a joint effort of
the California Community College Chancellor’s Office and the Department of
Social and Employment Services (DSES). Assignments include orientation leaders,
trainers, childcare and activity providers, and program coordination, and run
through June 10, 2011:
4. Shiobhan Bowman, $13/hr, (as needed), ILP Program Mentor.
5. Guadalupe Chavez, $22/hr, (as needed), Peer Recruiter.
6. Gabriela Clemente, $13/hr, (as needed), childcare.
7. Gabriela Clemente, $16/hr, (as needed), childcare lead.
8. Paulina Clemente, $13/hr, (as needed), childcare.
9. Paulina Clemente, $16/hr, (as needed), childcare lead.
10. Susan Derichsweiler, $22/hr, (as needed), Peer Recruiter.
11. Ezekiel Gabor, $13/hr, (as needed), ILP Program Mentor.
12. Esther Guzman, $22/hr, (as needed), Peer Recruiter.
13. Mariana Jimenez, $50/hr, (as needed), translator.
14. Bree Nakashima, $45/hr, (as needed), FKCE Instructor.
15. Bree Nakashima, $50/hr, (as needed), DSES Trainer.
16. Bree Nakashima, $100/hr, (as needed), Special Education Consultant.
17. Cassidy Porter, $50/hr, (as needed), Website support.
18. Michael Powers, $22/hr, (as needed), Peer Recruiter.
19. Maria Ramirez, $22/hr, (as needed), Peer Recruiter.
20. Maryane Rehberf, $200/hr, (as needed), DSES Instructor.
21. Abilene Siason, $13/hr, (as needed), ILP Program Mentor.
22. Deborah VanBuren, $100/hr, (as needed), DSES Trainer.
c. Students who are having difficulty mastering certain important concepts are
required to complete Directed Learning Activities (DLA’s). Funded by the Title V
grant, professional experts provide tutoring and educational support to those
identified students in English composition courses, August 17 – December 18,
2009:
23. Sarah Reitmayer, $14.42/hr, (11 hrs/week), tutor.
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 9 of 12
d. Hartnell College provides Crisis Counseling Services that are completely
confidential and free of charge to enrolled Hartnell students. A Marriage & Family
Therapist Counseling Intern is available to assist students in crisis, July 1, 2009 –
June 30, 2011:
24. Veronica Lara, $20/hr, (as needed), intern counselor.
e. The Workforce Investment Board (WIB) has contracted Hartnell College to
provide an intensive 24-hour program spread over an 11-week period to provide
out-of-work employees with new (or enhanced) industrial related skills that are
sought by local employers. The program will cover design, blueprint reading,
elementary mechanical drawing skills, fabrication, MIG welding, Arc welding,
basic agriculture mechanics, and Hazmat & Industrial Safety, September 28 –
December 18, 2009:
25. David Moore, $18.25/hr, (25 hrs/week), assistant for Agriculture Mechanics.
f. Music 20 College Choir and Music 21 Chamber Singers require an accompanist to
play in the choir classes for fall semester, August 18 - December 18, 2009:
26. Barbara Vella, $20/hr, (10 hrs/week), accompanist.
g. Administration of Justice 102 PC 832 Arrest and Firearms is designed to satisfy the
curriculum standards of the Commission on Peace Officer Standards and Training
(POST) as required by Penal Code 832 for fall semester, August 17 - December
18, 2009:
27. Ernesto Castro, $47/hr, (not to exceed 24 hrs), arrest and firearms instructor.
h. The Nursing and Health Sciences Department comprises four programs: Registered
Nursing, Vocational Nursing, Emergency Medical Technician (EMT), and
Certified Nursing Assistant. Lab instruction assistants are required to meet Board
of Registered Nursing (BRN) requirements for specific student-to-certifiedinstructor ratios. Assignment runs June 22, 2009 – December 18, 2010:
28. Frances Lucina Ramirez, $25/hr, (6 hrs/week), HES-110 B assistant.
F. Ratify appointment of student workers for fall semester 2009:
1. Edgar Collazo Reyes, Math & Science, Student Worker IV
2. Timothy Elliot, Information Systems, Student Worker III
3. Timothy Fuller, Math & Science, Student Worker IV
4. Christopher Fullington, Math & Science, Student Worker IV
5. Samantha Gebben, Math & Science, Student Worker IV
6. Blanca Juarez, Library, Student Worker I
7. Timothy Lincoln, MESA, Student Worker IV
8. Elisabeth Lopez, Child Development Center, Student Worker I
9. Hilario Lopez, High Skill High Wage, Student Worker I
10. Maricela Lopez, Child Development Center, Student Worker I
11. Masay Nakamura, Art Gallery, Student Worker I
12. Magdalena Nowosielska, MESA, Student Worker III
13. Toribio Pacheco Camacho, Child Development Center, Student Worker I
14. Jessenia Ramirez, MESA, Student Worker III
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 10 of 12
15. Demetrius Ramon, Academic Learning Center, Student Worker I
16. Alejandra Ruiz, Academic Learning Center, Student Worker I
17. Ramona Salcido, High School Equivalency Program, Student Worker I
18. Stacy Sanchez, MESA, Student Worker II
19. Xuliang Tan, Art Gallery, Student Worker I
20. Zhao Teng Yang, Art Gallery, Student Worker I
III. Special projects and stipends
A. Ratify special project agreement payments:
a. The College Cost Reduction and Access Act (CCRAA) grant focuses on improving
mathematics and science courses and the academic support structures for STEM
students to increase the transfer rate of these students to CSUMB. Methods to
achieve project goals include: curriculum development; creating mathematics
academy; updating laboratory equipment; providing supplemental instruction;
expanding tutoring services; exposing students to visiting scholars/role models;
improving classroom practices; training faculty and staff; improving assessment
and data collection; providing campus tours and paid internships for Hartnell
students; enhancing articulation and collaboration with CSUMB, April 16 –
December 18, 2009:
1. Alicia Steinhart $65/hr, (not to exceed $25,480), Science co-director—grant
funded.
2. Jeff Hughey, $5,000, tour and internship coordinator—grant funded.
b. Mathematics, Engineering, Science, Achievement (MESA) program is a grantfunded program designed to support educationally disadvantaged students in their
pursuit of college degrees in math, engineering, and science. Counseling for these
students will be provided from August 17, 2009 – June 2, 2010:
3. Ignacio Pando, $64.21/hr for 136 hours, up to $8,732.56, counselor—grant
funded.
c. The Hartnell Science Talent Expansion Program (STEP) NSF grant provides
support for underrepresented students in a variety of ways, all intended to increase
the number of women and Latinos enrolling and succeeding in math and science
courses.
One component of this provides for a Summer Undergraduate Mathematics &
Science (SUMS) bridge program, which ran from June 13 – July 24, 2009:
4. Ann Wright, $1,712.62, Biology instructor—grant funded.
5. Joe Welch, $1,612.62, Computer Science instructor—grant funded.
Another component provides mentorship and training for students in summer
internships, April 17 – August 30, 2009:
6. Pimol Moth, $2,000, intern mentor and trainer—grant funded.
d. Funded by the Title V Grant, English and English as a Second Language
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 11 of 12
instructors have created Directed Learning Activities (DLAs) to support students in
English composition courses who need additional assistance to achieve the Student
Learning Outcomes of the courses. The projects were completed between June 22
– September 30, 2009:
7. James Beck, $4,500, for creation of 3 Directed Learning Activities—grant
funded.
8. Carol King, $3,000, for creation of 2 Directed Learning Activities—grant
funded.
9. Rhea Mendoza-Lewis, $4,500, for creation of 3 Directed Learning Activities—
grant funded.
10. Janet Pessagno, $4,500, for creation of 3 Directed Learning Activities—grant
funded.
e. The Nursing and Health Sciences Department requires a Program Director for the
MLT program to coordinate and modify the phlebotomy program to comply with
the new regulations of the State of California and a contact person for Health
Education Services to maintain appropriate documentation requirements and to
serve as a contact point for students and faculty, September 14 – December 18,
2009:
11. Karen Carmon, $49.78/hr, (not to exceed $746.70), director.
12. Tracy Villanueva, $57.75/hr, (not to exceed $866.25), HES contact.
f. Veterinary services for colony animals and controlled drug supervision for Animal
Health Technology courses, July 1 – December 31, 2009:
13. Rachel Sage, $2,500, 1st installment for a total of 2 installments (not to exceed
$5,000), veterinary care.
g. All Nursing and Health Sciences programs are relocating to the main campus and
require assistance in moving, packaging and managing inventory of supplies,
September 24, 2009 to December 18, 2009:
14. William Jones, $25/hr (not to exceed $1,000), moving assistant—grant funded.
HCCD –REGULAR MEETING – NOVEMBER 10, 2009
Page 12 of 12
AGENDA ITEM FOR BOARD MEETING OF:
December 01, 2009
Title:
Ratify Disbursements of District Accounts
Number:
Area:
Office of Support Operations
Supplement OSO-3
Prepared by: Alfred Muñoz
Status:
Consent Action
VII. B.
Recommendation:
That the Board of Trustees ratifies disbursements from District accounts.
Summary:
The attached lists of disbursements from District accounts are presented for ratification.
COUNTY WARRANTS
Any or all of the following funds:
General; Debt Service; Bookstore; Child Development Center; Capital Outlay; Scheduled
Maintenance/State-Funded Projects; Property Acquisition; Bond Projects; Cafeteria;
Self-Insurance; Retirees’ Health Benefits; Associated Student Body; Scholarship, Loan,
and Trust; and Intercollegiate Athletics
NO OF
DATE
WARRANT NUMBER
WARRANTS
AMOUNT
10/05/09
12743742
12743767
26
236,424.74
10/12/09
12745086
12745191
106
284,484.47
10/14/09
12745612
12745638
27
661,566.02
10/19/06
12746440
12746508
69
379,488.55
10/28/09
12748084
12748178
95
2,784,978.73
Subtotal
$ 4,346,942.51
Note: Legal fees in above summary total $12,968.00
CHECKING ACCOUNTS
General Fund Revolving
DATE
Oct 09
Subtotal
Total
Budget Implications:
None.
WARRANT NUMBER
10120
10127
NO OF
WARRANTS
8
AMOUNT
8,047.68
8,047.68
$ 4,354,990.19
AGENDA ITEM FOR BOARD MEETING OF:
Title:
December 1, 2009
Number:
Transfer of Non-Cash Donations from
Hartnell College Foundation
VII. C.
Area:
Status:
Office of Advancement
Prepared by: Beverly Grova
Consent Action
Recommendation:
That the Board of Trustees accepts the non-cash donations from the Hartnell College
Foundation.
Summary
A list of non-cash donations received by the Hartnell College Foundation is listed below:
Date
Received
01/30/09
Donor
Donated To
Non-Cash Donations
Nick Kraushaar
Astronomy Program/Planetarium
5” Mead Telescope
03/26/09
MaryHelen Dorado
Fine Arts Department
500 VHS cassettesvarious films
06/29/09
Alfred Friedrich
Monterey County
Government Center
Gary Tanimura
Tanimura & Antle,
Inc.
Academic Learning Center
One laptop computer,
ACER A0A150-1635 8.9”
Netbook PC, Blue
One tractor Crawler cat
D7G (tag#201) ID SC45;
Asset Nr37041
06/30/09
Budget Implications:
None
Ag Mechanics
AGENDA ITEM FOR BOARD MEETING OF:
December 1, 2009
Title:
Ratify the Recommendations from the
Curriculum Committee
Number:
Area:
Academic Affairs
Prepared by: Carole Bogue-Feinour
Status:
VII. D.
Consent Action
Recommendation:
That the Board of Trustees ratifies the recommendations from the Curriculum Committee.
Summary:
The following actions were reviewed by faculty in the disciplines, approved by the Curriculum
Committee which is a standing committee of the Academic Senate:
NEW COURSES – 2 Courses
CON 125, Green Building Materials and Methods
CON 129, Managing Off-Site Impacts of Projects
COURSE REVISIONS – 5 Courses
HED 6, Multicultural Health Beliefs – Added Distance Education as a modality.
MAT 200L, Arithmetic of Whole Numbers – Added Distance Education as a modality,
course outline updated.
MAT 151L1, Technical Mathematics Level 1 – Title changed and added Distance Education
as a modality.
MAT 151L2, Technical Mathematics Level 2 – Title changed and added Distance Education
as a modality.
MAT 151L3 Technical Mathematics Level 3 – Title changed and added Distance Education
as a modality.
INACTIVE COURSES – 16 Courses
BUS 168, Community Leadership Skills
This course was part of Leadership Salinas. It is no longer being used.
CON 50A, Residential Construction: Building Layout
CON 50B, Residential Construction: Wall & Stair
CON 50C, Residential Construction: Roof Frame
CON 51A, Residential Construction: Exterior Work
CON 51B, Residential Construction: Interior Work
CON 51C, Residential Construction: Project End
The parent course is still available for the above listed Construction courses.
GOVERNING BOARD MEETING
DECEMBER 1, 2009
PAGE 2
INACTIVE COURSES – continued
CON 81, Introduction to the Uniform Building Code
CON 82, Introduction to the Uniform Mechanical Code
CON 83, Introduction to the Uniform Plumbing Code
CON 84, Introduction to the National Electrical Code
CON 110, Carpentry – Floor and Wall
CON 111, Carpentry – Roof and Stairs
CON 121, Construction Fundamentals
CON 122, Carpentry Fundamentals
CON 123, Commercial and Residential Carpentry Framing and Finishing
These Construction courses are part of the Construction Program that is being revamped.
DELETED COURSE – 1 Course
ECE 81, ECE Practicum in Cognitive Development for the Employed
This course is no longer part of the ECE program.
AGENDA ITEM FOR BOARD MEETING OF:
December 1, 2009
Title:
Number:
Approve Extension to Lease Agreement
with Franscioni Brothers, Inc. for Alisal
Campus Farmland
VII. E.
Area:
Status:
Office of Support Operations
Supplement OSO-4
Prepared by: Alfred Muñoz
Consent Action
Recommendation:
That the Board of Trustees approves the extension to the lease agreement with Franscioni
Brothers, Inc. for Alisal Campus farmland.
Summary:
In October 2006, Franscioni Brothers, Inc. was awarded the bid for a two-year lease of the
116.5 acres of Alisal Campus farmland. In consideration of the current and future construction
planned for the Alisal Campus, administration has reviewed the lease agreement and has
determined the following actions to be in the best interest of the College:
Extend the lease by one year
Extended Term Dates: December 3, 2009 through December 2, 2010
Budget Implications:
None.
AGENDA ITEM FOR BOARD MEETING OF:
Title:
December 1, 2009
Number:
Ratify Contracts with Partners and
Consultants included in the approved Clean
Energy Workforce Training Program Grant
VII. F.
Area:
Status:
Advanced Technology
Prepared by: Beverly Grova
Consent Action
Recommendation:
That the Board of Trustees ratifies the following contracts funded by the Clean Energy
Workforce Training Program Grant in the amounts specified below:
Ecology Action, $56,000, 10/1/09 – 3/31/11. Will design, develop, and deliver Green Gardner,
Grey water Design Installation, and Maintenance Certification Program for 40 participants.
John Owens, $20,000, 10/1/09 – 3/31/11. Will tailor and deliver Green Plumbers USA
Certification program for 30 participants.
Dr. Laura Strohm, $24,000, 10/1/09 – 3/31/11. Will design, develop, and contextualize Hartnell
College’s Clean Energy Green Construction curriculum and help to identify and recruit
qualified adjunct faculty.
Cabrillo College, Not to exceed $400,000, 10/1/09 – 3/31/11. As Hartnell’s primary partner,
will train 40 participants at Cabrillo College in Green Construction Technology
Project Director: Mike Thomas
Budget Implications:
All costs will be paid through grant funds.
Source of Funds: Federal $500,000
AGENDA ITEM FOR BOARD MEETING OF:
Title:
December 1, 2009
Number:
Approve Extending Agreement with Office
Depot
VII. G.
Area:
Status:
Support Operations
Supplement OSO-8
Prepared by: Alfred Muñoz
Consent Action
Recommendation:
The Board of Trustees approves extending the purchasing agreement with Office Depot under
the competitively bid agreement with L.A. County.
Summary:
December 2005, The Board of Trustees approved the purchasing agreement with Office Depot
under the competitively bid agreement with Los Angeles County. Hartnell College was
attached to this agreement for contract period January 2, 2006 through January 1, 2010. The
County’s purchasing agent has exercised the option to extend the Master Agreement period for
two (2) additional twelve (12) month periods as set forth in Paragraph 3.0 (Change Notices and
Amendments), of this Master Agreement. Hartnell College will be included in the extension
agreement, but can choose to be released from the agreement at any time during the extended
contract period.
The cost savings, as well as the efficiency and convenience of on-line ordering, along with
consolidation of billing and order tracking offered by Office Depot have been and would
continue to be significant benefits to the College.
Term: January 2, 2010 – January 1, 2012
Budget Implications:
None
AGENDA ITEM FOR BOARD MEETING OF:
December 1, 2009
Title:
Number:
Accept Grant Sub-award from the University
Corporation (Foundation) at Monterey Bay
from the CCRAA Hispanic Serving Institutions
Grant
Area:
Office of Academic Affairs
Supplement OAA-1
Prepared by: Carole Bogue-Feinour
VII. H.
Status:
Consent Action
Recommendation:
That the Board of Trustees accepts the sub-award from the University Corporation
(Foundation) at Monterey Bay from the CCRAA Hispanic Serving Institutions Grant.
Summary
CSUMB received a College Cost Reduction and Access Act- Hispanic-Serving Institutions
(CCRAA-HSI) award for the performance period 10/01/09 – 09/30/2010, from which Hartnell
College will receive a sub award of $110,000 for the budget period of 10/01/09 – 09/30/2010.
The objectives defined in the grant proposal are to increase transfer, retention and graduation
rates in Science, Technology, Engineering and Math disciplines from California State
University, Monterey Bay. The goals of the grant include increasing the number of Hispanic
and low-income students attaining Bachelor of Science degrees from California State
University, Monterey Bay in Science (CSUMB). Through the sub-award, the objective is to
increase the number of transfer students to California State University, Monterey Bay
(CSUMB) from Hartnell College in the Science, Technology, Engineering and Math Majors.
Term: 10/01/2009 – 09/30/2010
Project Manager: Chanté Davis
Budget Implications:
$110,000 will be received from the University Corporation (Foundation) California State
University, Monterey Bay
Source of Funds:
Federal $110,000 (sub-award)
AGENDA ITEM FOR BOARD MEETING OF:
December 1, 2009
Title:
Appointment of Two Members to the
Independent Citizens’ Bond Oversight
Committee
Number:
Area:
Office of Superintendent/President
Prepared by: Phoebe K. Helm
Status:
VII. I.
Consent Action
Recommendation:
That the Board of Trustees approves the appointment of two members to the Independent Citizens’
Bond Oversight Committee.
Summary:
Based on criteria established by Prop 39, the membership of the Independent Citizens’ Oversight
Committee is to consist of seven members. After publications in the local newspaper and
interviews, the following individuals are being recommended as indicated:
Member at Large
Bruce Adams
Term:
12/17/2009-12/16/2011
One member shall be active in a bona fide taxpayers’ organization
Celia Perez-Martinez
Term:
2/19/2010-2/18/2012
Each of these candidates will be eligible for a second two year term.
Brief introduction to the candidates:
Bruce Adams, Vice President of Central Coast Credit Union, holds a BS Degree in Business
Administration from CSU Sacramento and is a graduate of Hartnell College. He is a lifelong
resident of Salinas and serves on the Hartnell College Foundation. Bruce will be an excellent
addition to the Bond Oversight Committee as a member at large.
Celia Perez-Martinez is member of the Jarvis Taxpayers Association, and is otherwise
exceptionally qualified to serve on the BOC in that she has completed graduate work in Business
Administration at Columbia University and 15 or more years of experience in public finance,
maintenance, and construction in Monterey County. Since 2005, she has served as Public Works
Superintendent for the City of Pacific Grove, CA. She is a lifelong resident of Salinas and will be
the only female currently on the BOC.
The primary role of the Bond Oversight Committee is to review the District’s expenditures of bond
funds and ensure that the funds are spent only for the purposes set forth in the ballet measure. The
BOC presents a written report to the Board of Trustees and the public, annually, indicating whether
the District is in compliance with the requirements of Article XIII A, Section 1 (b) (3) of the
California Constitution.
AGENDA ITEM FOR BOARD MEETING OF: December 1, 2009
Title:
Number:
Approve and/or Ratify Personnel Actions
VII. J.
Area:
Human Resources & Equal Employment
Opportunity
Status:
Consent Action
Recommendation:
Approve and/or ratify personnel actions as listed below.
Summary:
Approval of:
3 new classifications and allocations
2 reclassifications of classified positions
Ratification of:
2 reclassifications of management positions
1 volunteer
11 professional expert hires
12 student worker hires for fall semester 2009
Detail:
I. Classification and Compensation
A. Ratify reclassification of Greg Peterson, Associate Vice President for Student
Affairs & Athletics, management salary schedule I(a), Step C, to Vice President
for Student Affairs & Athletics, Management Salary range I(a), Step D, effective
November 11, 2009.
B. Ratify reclassification of Terri Pyer, Director of Human Resources & Equal
Employment Opportunity, Management Salary Schedule Range III, Step E, to
Associate Vice President of Human Resources & Equal Employment
Opportunity, Management Salary Schedule range I(a), Step E, effective
November 11, 2009.
C. Approve classified staff reorganization in Student Services:
This staff reorganization, already accomplished at the management level, is
expected to result in a net savings to the District of approximately $30,000, the
creation of three career advancement ladders for employees in all the different
areas of Student Services, and better service to students. (Side letter of agreement
with the CSEA regarding these requests will be furnished at meeting as
Supplement HR-4).
1
AGENDA ITEM FOR BOARD MEETING OF: December 1, 2009
1. Approve new CSEA classification of Financial Aid Lead, CSEA salary
schedule range 34 (Job Description to be furnished at meeting as Supplement
HR-1).
2. Approve request to allocate new classified CSEA position in Student
Services: Financial Aid Lead (#CC-172) (full-time, 40 hours per week, 12
months per year).
3. Approve new CSEA classification of Enrollment Services Specialist, CSEA
salary schedule range 24 (Job Description to be furnished at meeting as
Supplement HR-2).
4. Approve request to allocate new classified CSEA position in Student
Services: Enrollment Services Specialist (#CC-173) (full-time, 40 hours per
week, 12 months per year).
5. Approve new CSEA classification of Enrollment Lead, CSEA salary schedule
range 34 (Job Description to be furnished at meeting as Supplement HR-3).
6. Approve request to allocate new classified CSEA position in Student
Services: Enrollment Lead (#CC-174) (full-time, 40 hours per week, 12 months
per year).
D. Approve actions related to reclassification of two classified staff members in
Admissions & Records:
7. Approve side letter of agreement between CSEA, Chapter 470, and the
Hartnell Community College District concerning the reclassification. (Side
letter of agreement to be furnished at meeting as Supplement HR-5).
8. Approve new CSEA classification of Admissions & Records Evaluation
Technician, CSEA salary schedule range 22 (Job Description to be furnished
at meeting as Supplement HR-6).
9. Reclassification of Roberta Ruiz-Camacho and Jutta West, Admissions &
Records Technicians, to Admissions & Records Evaluation Technicians,
effective December 1, 2009 (full-time, 40 hours per week, 12 months per
year).
II. Appointments
A. Ratify volunteers:
1. Anna K. Smith, Animal Health Technology
B. Ratify appointment of Professional Experts:
a. Hartnell’s theater arts program/The Western Stage (TWS) provides students
the opportunity to learn their craft within a professional context. TWS’ current
2
AGENDA ITEM FOR BOARD MEETING OF: December 1, 2009
season runs through December 4, 2009:
1. Rumiana Drumew, $1125, musical accompaniment for Mame.
b. The Foster Kinship Care Education Program (FKCE) provides advanced
training for current and prospective foster, relative, and non-related extended
family member caregivers, adoptive parents, and local agency employees; and
support for foster home recruitment activities. This grant funded program is a
joint effort of the California Community College Chancellor’s Office and the
Department of Social and Employment Services (DSES). Assignments
include orientation leaders, trainers, childcare and activity providers, and
program coordination, and run through June 10, 2011:
2. Tonya Anderson, $22/hr, (as needed), Peer Recruiter.
3. Juana Cano, $50/hr, (as needed), translator.
4. Kendall Channing Corpuz, $13/hr, (as needed), childcare.
5. Christianne Dettinger, $100/hr, (as needed), ILP Trainer.
6. Shaylene Shigeko Duran, $22/hr, (as needed), ILP Trainer.
7. Andre Esplin $13/hr, (as needed), ILP Program Mentor.
8. Marisela Lemus, $13/hr, (as needed), childcare.
9. Marisela Lemus, $16/hr, (as needed), childcare lead.
c. The categorically funded program, Disabled Students Programs and Services
(DSP&S), offers supportive services and instruction for students with
disabilities, August 17, 2009 – August 16, 2011:
10. Katie Swift, $38/hr, (9hrs/week), sign language interpreting.
d. Students who are having difficulty mastering certain important concepts are
required to complete Directed Learning Activities (DLA’s). Funded by the
Title V grant, professional experts provide tutoring and educational support to
those identified students in English composition courses, August 17 –
December 18, 2009:
11. Laura Cannon, $14.42/hr (11hrs/week), tutor.
C. Ratify appointment of student workers for fall semester 2009:
1. Edgar Collazo Reyes, Math & Science, Student Worker IV
2. Paula Baeza, Nursing & Health Sciences, Student Worker III
3. Christopher Baker, Nursing & Health Sciences, Student Worker III
4. Diego Barraza, Student Services, Student Worker III
3
AGENDA ITEM FOR BOARD MEETING OF: December 1, 2009
5. Thomas Brown, CCRAA Grant, Student Worker III
6. Rodolfo Garcia, East Salinas GEAR Up Grant, Student Worker III
7. Kamaljit Kaur, Nursing & Health Sciences, Student Worker III
8. Hyang Ko, Nursing & Health Sciences, Student Worker III
9. Elaine Miller, Nursing & Health Sciences, Student Worker III
10. Jimmy Parks, Nursing & Health Sciences, Student Worker III
11. Carissa Perez, CCRAA Grant, Student Worker III
12. Evan Reeves-Fortney, Child Development Center, Student Worker I
4
ACTION ITEMS
AGENDA ITEM FOR BOARD MEETING OF: December 1, 2009
Title:
Number:
Accept the Independent Accountants’ Audit
Report for the Fiscal Year Ended
June 30, 2009
VIII. A.
Area:
Status:
Office of Support Operations
Supplement OSO-6
Prepared by: Alfred Muñoz
Action
Recommendation:
That the Board of Trustees accepts the annual Audit Report for fiscal year ended June 30, 2009.
Summary:
The attached Audit Report for the fiscal year ended June 30, 2009, is made directly to the
Board of Trustees by representatives from the firm of Vicenti, Lloyd, Stutzman, LLP. Staff
will also be available to answer questions.
Budget Implications:
None
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MONTEREY COUNTY
REPORT ON
AUDIT OF FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
INCLUDING REPORTS ON COMPLIANCE
June 30, 2009
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
AUDIT REPORT
June 30, 2009
CONTENTS
Page
INDEPENDENT AUDITORS’ REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS................................................
i-vii
BASIC FINANCIAL STATEMENTS:
Statements of Net Assets.............................................................................................
Statements of Revenues, Expenses and Changes in Net Assets .................................
Statements of Cash Flows ...........................................................................................
Statements of Fiduciary Net Assets ............................................................................
Statements of Changes in Fiduciary Net Assets .........................................................
1
2
3-4
5-6
7
DISCRETELY PRESENTED COMPONENT UNIT – HARTNELL COLLEGE
FOUNDATION:
Statements of Financial Position.................................................................................
Statements of Activities ..............................................................................................
Statements of Cash Flows ...........................................................................................
8
9-10
11
NOTES TO FINANCIAL STATEMENTS .................................................................
12-43
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of Postemployment Healthcare Benefits Funding progress ........................
Notes to Required Supplementary Information ..........................................................
44
45
SUPPLEMENTARY INFORMATION:
History and Organization ............................................................................................
Schedule of Expenditures of Federal Awards.............................................................
Schedule of State Financial Assistance - Grants.........................................................
Schedule of Workload Measures for State General Apportionment Annual
(Actual) Attendance ...............................................................................................
Reconciliation of Annual Financial and Budget Report with Audited
Fund Balances ........................................................................................................
Schedule of Financial Trends and Analysis................................................................
Notes to Supplementary Information ..........................................................................
46
47-49
50
51
52
53
54
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
AUDIT REPORT
June 30, 2009
CONTENTS
Page
OTHER 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 Applicable to Each Major Program and
on Internal Control over Compliance in Accordance with OMB Circular A-133 .
Report on State Compliance .......................................................................................
FINDINGS AND RECOMMENDATIONS:
Schedule of Findings and Questioned Costs – Summary of Auditor Results.............
Schedule of Findings and Questioned Costs Related to Financial Statements ...........
Schedule of Findings and Questioned Costs Related to Federal Awards ...................
Status of Prior Year Findings and Questioned Costs..................................................
55-57
58-60
61-63
64
65-67
68-71
72-82
DRAFT for Discussion Purposes Only
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
Hartnell Community College District
411 Central Avenue
Salinas, California 93901
We have audited the accompanying basic financial statements of the Hartnell Community College District,
including its discretely presented component unit, as of and for the year ended June 30, 2009 and 2008 as
listed in the table of contents. These financial statements are the responsibility of the District's
management. Our responsibility is to express an opinion 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 audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the basic financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall basic financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements listed in the aforementioned table of contents present fairly, in all
material respects, the financial position of the Hartnell Community College District as of June 30, 2009 and
2008, and the results of its operations, changes in net assets and cash flows for the fiscal year then ended in
conformity with accounting principles generally accepted in the United States of America.
As described in Note 1.C.20 to the financial statements, the Hartnell Community College District adopted
the provisions of GASB Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefits Other Than Pensions, for the year ended June 30, 2009.
As discussed in Note 15 to the financial statements, certain errors in reporting capital assets were
discovered during the current year. Accordingly, the 2008 financial statements have been restated to
correct the error.
DRAFT for Discussion Purposes Only
Board of Trustees
Hartnell Community College District
In accordance with Government Auditing Standards, we have also issued our report dated November 20,
2009 on our consideration of the Hartnell Community College District's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and 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 and should be considered in
assessing the results of our audit.
The required supplementary information, such as the management’s discussion and analysis and the
schedule of funding progress, is not a required part of the basic financial statements, but is supplementary
information required by accounting principles generally accepted in the United States of America. We
have applied certain limited procedures, consisting principally of inquiries of management regarding the
methods of measurement and presentation of the required supplementary information. However, we did
not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the Hartnell Community College District’s
basic financial statements. The supplementary section is presented for purposes of additional analysis and
is not a required part of the basic financial statements. The accompanying schedule of expenditures of
federal awards is presented for purposes of additional analysis as required by U.S. Office of Management
and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is
also not a required part of the basic financial statements. The supplementary information, including the
schedule of expenditures of federal awards, has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
VICENTI, LLOYD & STUTZMAN LLP
November 20, 2009
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2009
USING THIS ANNUAL REPORT
In accordance with generally accepted accounting principles, the annual report consists of three basic
financial statements that provide information on Hartnell Community College District's (the District)
activities as a whole: the Statement of Net Assets; the Statement of Revenues, Expenses, and Changes in
Net Assets; and the Statement of Cash Flows.
The focus of the Statement of Net Assets is designed to show the financial position of the District. This
statement combines and consolidates current financial resources (net short-term spendable resources) with
capital assets and long-term obligations. The Statement of Revenues, Expenses, and Changes in Net Assets
focuses on the costs of the District's operational activities, which are supported mainly by property taxes
and State revenues. This approach is intended to summarize and simplify the user's analysis of the costs of
various District services to students and the public. The Statement of Cash Flows provides an analysis of
the sources and uses of cash within the operations of the District.
The Western Stage Auxiliary Corporation was a legally separate organization that was a component unit of
the District through December 31, 2008. The corporation was dissolved on December 31, 2008. The
financial activity for the period ending December 31, 2008 has been consolidated within the financial
statements of the District. Separate audited financial statements can be obtained through the District’s
Office of Support Operations.
Responsibility for the completeness and accuracy of this information rests with the District management.
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 2008-09 fiscal year, FTES were 7,624 as compared to 6,586 in the
2007-08 fiscal year. Of the total FTES generated, 7,088 were funded in 2008-09 and all were
funded in 2007-08.
•
During the 2008-09 fiscal year, the District provided over $8.3 million in financial aid to
students. This aid was provided in the form of grants, scholarships, loans, and tuition discounts
funded through the Federal government, State Chancellor's Office, and local funding.
•
The District passed $131 million in general obligation bonds in November 2002 for the
construction and renovation of buildings and equipment throughout the District. These projects
were approved by the voters within the District's boundaries and will be completed over the next
ten years or so. The first series of $35 million was issued in April 2003. The second series of
$35 million was issued in June 2006. The third series of $12.6 million was issued in May 2009,
proceeds were received in June 2009.
-i-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2009
FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE
NET ASSETS as of June 30,
(Amounts in thousands)
2009
2008
ASSETS
Current Assets
Cash and investments
Accounts receivable, net
Other current assets
$ 10,344
14,487
134
Total Current Assets
Restricted cash and other non-current assets
Capital Assets, net
$
24,965
34,875
104,788
Total Assets
LIABILITIES
Current Liabilities
Accounts payable, accrued liabilities
and other current liabilities
Current portion of long-term obligations
Total Current Liabilities
Long-Term Obligations
9,848
12,574
79
22,501
42,227
86,495
$ 164,628
$
151,223
$ 11,513
1,743
$
16,641
1,680
13,256
82,251
18,321
72,204
95,507
90,525
NET ASSETS
Invested in capital assets
Restricted
Unrestricted
55,081
6,864
7,176
48,346
5,072
7,280
Total Net Assets
69,121
60,698
Total Liabilities
Total Liabilities and Net Assets
$ 164,628
$
151,223
This schedule has been prepared from the District's Statement of Net Assets (page 1), which is presented on
an accrual basis of accounting whereby assets are capitalized and depreciated.
Cash and short-term investments consist primarily of funds held in the Monterey County Treasury. The
changes in the cash position are explained in the Statement of Cash Flows (pages 3-4).
Unrestricted net assets are composed of reserves for self-insurance, retiree health benefits, bookstore and
cafeteria reserves, and general reserves for the ongoing financial health of the District.
-ii-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2009
Operating Results for the Year Ended June 30,
(Amounts in thousands)
2009
2008
Operating Revenues
Tuition and fees
Grants and contracts
Auxiliary sales and charges
$
Total Operating Revenues
Operating Expenses
Salaries and benefits
Supplies, other operating expenses, and financial aid
Depreciation
Total Operating Expenses
Loss on Operations
Nonoperating Revenues and (Expenses)
State apportionments
Property taxes
State revenues
Interest income
Other nonoperating revenues
and (expenses)
Total Nonoperating Revenue
and (Expenses)
Other Revenues, Expenses, Gains and Losses
State and local capital income
Interest income, Capital
Interest expenses and losses
Total Revenues, Expenses, Gains
and Losses
Increase in Net Assets
$
2,395
16,961
1,755
$
2,393
14,798
904
21,111
18,095
35,301
20,486
2,365
34,394
17,459
2,296
58,152
54,149
(37,041)
(36,054)
14,402
24,193
915
(58)
13,938
22,063
1,056
335
185
267
39,637
37,659
10,350
(809)
(3,715)
8,773
1,924
(3,921)
5,826
6,776
8,422
$
8,381
This schedule has been prepared from the Statement of Revenues, Expenses, and Changes in Net Assets
presented on page 2.
Auxiliary sales and charges consist of cafeteria revenues. The operations are self-supporting.
-iii-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2009
Grant and contract revenues relate to student financial aid, as well as specific Federal and State grants
received for programs serving the students of the District. These grant and program revenues are restricted
as to the allowable expenses related to the programs.
Total interest income was negative for 2008-2009. This is a result of the write-off of Washington Mutual
and Lehman Brothers investments held by the Monterey County Treasurer. The interest expense relates to
interest on the general obligation bonds and lease revenue bonds.
The District is recording the depreciation expense related to capital assets. The detail of the changes in
capital assets for the year is included in the notes to the financial statements as Note 5.
The Statement of Cash Flows provides information about 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.
Statement of Cash Flows for the Year Ended June 30,
(Amounts in thousands)
2009
2008
Cash Provided by (Used in)
Operating activities
Noncapital financing activities
Capital financing activities
Investing activities
Net (Decrease) in Cash
Cash, Beginning of Year
Cash, End of Year
$ (33,069)
38,803
(7,216)
(5,515)
$ (32,839)
38,341
(12,282)
6,542
(6,997)
50,875
(238)
51,113
$ 43,878
$ 50,875
The 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 faculty
and staff.
While State apportionment and property taxes are the primary sources of noncapital related revenue, GASB
accounting standards require that this source of revenue is shown as nonoperating revenue because it comes
from the general resources of the State and not from the primary users of the District’s programs and
services. The District depends upon this funding as the primary source of funds to continue the current
level of operations.
-iv-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2009
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At June 30, 2009, the District had $104.8 million in a broad range of capital assets, including land,
buildings, and furniture and equipment, net of depreciation. At June 30, 2008, net capital assets were $86.5
million. The District is currently in the middle of a major capital improvement project with construction
ongoing throughout the District. These projects are funded primarily through the general obligation bonds.
The majority of our West campus property was purchased in 1936 and 1954 from the U.S. Government.
The Alisal campus property was purchased for $1 from the U.S. Government in 1948. Capital assets
reported within these financial statements reflect the cost at the time of purchase. Current market values of
our property are not reflected in the financial statements.
Several capital projects are planned for the 2009-10 year with funding through the general obligation bonds
and the State of California.
Land and construction in progress
Buildings and improvements
Furniture and equipment
$
Subtotal
Accumulated depreciation
(Amounts in thousands)
2009
2008
32,370
$
16,948
94,384
89,656
8,553
8,044
135,307
30,519
Totals
$
104,788
114,648
28,154
$
86,494
Long-Term Obligations
At the end of the 2008-09 fiscal year, the District had $84.0 million in bonds outstanding from the voter
approved general obligation bonds and other long-term obligations. These bonds will be repaid annually
through property taxes on assessed property within the Hartnell Community College District boundaries.
The lease revenue bonds issued to fund construction of the King City Education Center building in King
City were defeased in December 2008.
General obligation bonds
Premium on obligations
Lease revenue bonds
Early retirement incentive
Other post employment benefits
$
Totals
$
-v-
(Amounts in thousands)
2009
2008
78,857
$
67,040
4,422
4,514
2,330
601
115
83,995
$
73,884
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2009
ECONOMIC FACTORS AFFECTING THE FUTURE OF HARTNELL COMMUNITY COLLEGE
DISTRICT
The economic position of Hartnell Community College District is closely tied to the State of California as
State apportionments and property taxes allocated to the District represent approximately 55 percent of the
total sources of revenues received by the District. The District is aligning its course offerings with the
reduction of workload measures as issued by the Chancellor’s Office.
The State of California is still currently in a precarious financial condition due to the nationwide recession
and the mortgage, real estate, banking and unemployment crisis. The State budget for fiscal year 2009-10
provided a reduction for California community colleges of over $800 million by reducing categorical
programs funding levels and reducing FTES base funding.
According to the 2009-10 State budget, student enrollment fees have increased from $20 to $26 per unit for
2009-10.
The District issued $35 million in general obligation bonds in April 2003 to fund various construction
projects throughout the District. The District issued a second series of general obligation bonds in June
2006, a third series in June 2009, and a fourth series in September 2009. All bonds, related to the 2002
Measure H election, have been issued as of September 2009. The major projects outstanding are the Center
for Assessment and Lifelong Learning, the Center for Advanced Technology, the College Center
renovation, the Physical Education renovation, the Northeast Quad landscaping project, the Classroom
Administration Building renovation, and the Science Building.
The District issued lease revenue bonds in the amount of $2,585,000 in January 2006 to advance refund the
2000 Certificates of Participation. These lease revenue bonds were defeased in December 2008.
At the time the budget was developed, the following assumptions were made:
•
The 2009-10 State budget for community colleges contains no Cost of Living Allowance (COLA)
increase.
•
The 2009-10 reduction in categorical funding for the District amounts to approximately $1.9
million.
•
The 2009-10 adopted budget reflects a State apportionment deficit of $3.1 million in anticipation of
known and mid-year funding reductions for 2009-10 fiscal year.
•
The 2009-10 adopted budget incorporates the reduction of $3.3 million in expenses.
-vi-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2009
CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, students, and investors and creditors
with a general overview of the District's finances and to show the District's accountability for the money it
receives. Questions may be directed to the Associate Vice President for Support Operations, Hartnell
Community College District, 411 Central Avenue, Salinas, CA 93901.
-vii-
DRAFT for Discussion Purposes Only
BASIC FINANCIAL STATEMENTS
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF NET ASSETS
June 30, 2009 and 2008
2009
ASSETS
Current Assets:
Cash and cash equivalents
Investments in local agency investment fund
Accounts receivable, net
Inventory
Prepaid expenses
Total Current Assets
$
Non-Current Assets:
Restricted cash and cash equivalents
Capitalized fees
Capital assets, net of accumulated depreciation
Total Non-Current Assets
TOTAL ASSETS
10,113,054
231,079
14,486,848
18,034
115,610
24,964,625
2008
$
9,616,770
231,079
12,573,947
22,875
56,061
22,500,732
33,765,517
1,109,787
104,787,889
139,663,193
41,258,714
968,263
86,494,938
128,721,915
$ 164,627,818
$ 151,222,647
$
$
LIABILITIES
Current Liabilities:
Short-term borrowing
Accounts payable
Accrued liabilities
Accrued interest payable
Due to fiduciary funds, net
Deferred revenue
Early retirement incentive
Bonds payable
Total Current Liabilities
2,117,418
4,833,924
1,301,230
659,208
12,642
2,588,537
83,335
1,660,000
13,256,294
7,022,787
6,398,098
905,215
665,679
33,612
1,615,333
1,680,000
18,320,724
Non-Current Liabilities:
Other postemployment benefits other than pensions (OPEB)
Early retirement incentive
Bonds payable
Total Non-Current Liabilities
115,017
517,216
81,618,977
82,251,210
72,203,569
72,203,569
TOTAL LIABILITIES
95,507,504
90,524,293
55,080,882
48,346,153
2,856,291
3,124,581
882,954
7,175,606
1,811,047
2,428,731
831,818
7,280,605
69,120,314
60,698,354
$ 164,627,818
$ 151,222,647
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Capital projects
Debt service
Other special purposes
Unrestricted
TOTAL NET ASSETS
TOTAL LIABILITIES AND NET ASSETS
See the accompanying notes to the financial statements.
-1-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
For the Fiscal Years Ended June 30, 2009 and 2008
2009
OPERATING REVENUES
Tuition and fees (gross)
Less: Scholarship discounts and allowances
Net tuition and fees
Grants and contracts, non-capital:
Federal
State
Local
Sales
$
3,758,958
(1,364,255)
2,394,703
TOTAL OPERATING REVENUES
2008
$
3,628,267
(1,235,562)
2,392,705
10,678,865
5,038,073
1,244,268
1,755,179
7,845,965
5,462,123
1,489,829
904,466
21,111,088
18,095,088
OPERATING EXPENSES
Salaries
Employee benefits
Supplies, materials, and other operating
expenses and services
Financial aid
Utilities
Depreciation
25,824,642
9,476,306
25,597,530
8,795,685
12,331,352
6,888,898
1,265,361
2,365,126
11,199,562
4,978,476
1,282,013
2,295,906
TOTAL OPERATING EXPENSES
58,151,685
54,149,172
(37,040,597)
(36,054,084)
NON-OPERATING REVENUES (EXPENSES)
State apportionments, non-capital
Local property taxes
State taxes and other revenue
Interest and investment income (loss), non-capital
Other non-operating revenues
Transfer to agency fund
Transfer to foundation
14,402,203
24,193,011
914,437
(57,738)
222,937
(13,741)
(24,301)
13,938,300
22,062,508
1,056,274
334,534
283,324
(15,669)
TOTAL NON-OPERATING REVENUES (EXPENSES)
39,636,808
37,659,271
2,596,211
1,605,187
10,349,839
(808,877)
(3,715,213)
8,773,416
1,923,790
(335,121)
(3,585,728)
TOTAL OTHER REVENUES, EXPENSES, GAINS AND LOSSES
5,825,749
6,776,357
INCREASE IN NET ASSETS
8,421,960
8,381,544
58,370,600
51,725,007
OPERATING LOSS
INCOME BEFORE OTHER REVENUES, EXPENSES, GAINS AND LOSSES
OTHER REVENUES, EXPENSES, GAINS AND LOSSES
State apportionments, capital
Interest and investment income (loss), capital
Loss on disposition of equipment
Interest expense on capital asset-related debt
NET ASSETS, BEGINNING OF YEAR, AS ORIGINALLY STATED
Adjustment for restatement (see note 15A - pg 41)
2,327,754
591,803
NET ASSETS, BEGINNING OF YEAR, AS RESTATED
60,698,354
52,316,810
NET ASSETS, END OF YEAR
$
See the accompanying notes to the financial statements.
-2-
69,120,314
$
60,698,354
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF CASH FLOWS
For the Fiscal Years Ended June 30, 2009 and 2008
2009
CASH FLOWS FROM OPERATING ACTIVITIES
Tuition and fees
Federal grants and contracts
State grants and contracts
Local grants and contracts
Sales
Payments to suppliers
Payments to/on-behalf of employees
Payments to/on-behalf of students
Net amounts due to (from) fiduciary funds
$
2,404,380
9,261,289
5,946,772
2,498,121
842,510
(12,971,352)
(34,126,963)
(6,888,898)
(34,711)
2008
$
2,328,990
7,543,953
6,230,501
2,111,268
1,063,435
(12,863,645)
(34,310,287)
(4,978,751)
35,283
(33,068,852)
(32,839,253)
13,544,298
24,222,802
1,036,362
14,959,231
22,086,677
1,295,331
38,803,462
38,341,239
7,538
8,131,454
(21,184,388)
12,597,888
(6,768,266)
86,713
3,686,454
(14,694,863)
(7,215,774)
(12,282,314)
(610,380)
(4,905,369)
2,873,467
3,669,211
Net cash provided (used) by investing activities
(5,515,749)
6,542,678
NET CHANGE IN CASH AND CASH EQUIVALENTS
(6,996,913)
CASH BALANCE, BEGINNING OF YEAR, AS ORIGINALLY STATED
Adjustment for restatement (see note 15B - pg 42)
CASH BALANCE, BEGINNING OF YEAR, AS RESTATED
50,875,484
50,875,484
Net cash used by operating activities
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
State apportionments and receipts
Property taxes
State tax and other revenues
Net cash provided by non-capital financing activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Interest received on capital debt
State apportionment for capital purposes
Purchases of capital assets
Issuance of capital debt
Principal and interest paid on capital debt
Net cash used by capital and related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Net investment activity
Net change in short-term borrowings
CASH BALANCE - End of Year
Cash balances at June 30, 2009 and 2008 consisted of the following:
Cash and cash equivalents
Restricted cash and cash equivalents
Total cash balances
(237,650)
46,423,330
4,689,804
51,113,134
$
43,878,571
$
50,875,484
$
10,113,054
33,765,517
43,878,571
$
9,616,770
41,258,714
50,875,484
$
See the accompanying notes to the financial statements.
-3-
(1,360,618)
$
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF CASH FLOWS
For the Fiscal Years Ended June 30, 2009 and 2008
RECONCILIATION OF OPERATING LOSS TO
NET CASH USED BY OPERATING ACTIVITIES
2009
2008
$ (37,040,597)
$ (36,054,084)
CASH USED BY OPERATING ACTIVITIES
Operating loss
Adjustments to reconcile operating loss to net cash
used by operating activities:
Depreciation expense
Changes in assets and liabilities:
Accounts receivable, net
Inventory
Prepaid expense
Accounts payable and accrued liabilities
Due to fiduciary funds, net
Deferred revenue
Early retirement incentive
Other postemployment benefits other than pensions (OPEB)
Net cash used by operating activities
2,365,126
(1,200,440)
4,841
285,273
849,143
(20,970)
973,204
600,551
115,017
580,280
(2,905)
(128,352)
472,522
27,284
(29,904)
$ (33,068,852)
$ (32,839,253)
See the accompanying notes to the financial statements.
-4-
2,295,906
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF FIDUCIARY NET ASSETS
June 30, 2009
Agency Fund
ASSETS
Cash and cash equivalents
Investments in local agency investment fund
Accounts receivable:
Miscellaneous
Due from district
$
Trust Funds
397,664
153,862
$
87,678
113,955
13,241
TOTAL ASSETS
LIABILITIES
Accounts payable
Due to district
Funds held in trust
$
564,767
$
201,633
$
464
$
564,303
28,854
599
16,675
564,767
46,128
-
119,102
36,403
155,505
TOTAL LIABILITIES
NET ASSETS
Reserved for scholarships
Unrestricted
TOTAL NET ASSETS
$
TOTAL LIABILITIES AND NET ASSETS
564,767
$
See the accompanying notes to the financial statements.
-5-
201,633
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF FIDUCIARY NET ASSETS
June 30, 2008
Agency Fund
ASSETS
Cash and cash equivalents
Investments in local agency investment fund
Accounts receivable:
Miscellaneous
Due from district
$
Trust Funds
295,923
153,862
$
1,773
51,577
TOTAL ASSETS
LIABILITIES
Accounts payable
Due to district
Funds held in trust
950
$
503,135
$
367,786
$
1,412
$
501,723
75,434
17,965
38,635
503,135
132,034
-
180,265
55,487
235,752
TOTAL LIABILITIES
NET ASSETS
Reserved for scholarships
Unrestricted
TOTAL NET ASSETS
$
TOTAL LIABILITIES AND NET ASSETS
503,135
$
See the accompanying notes to the financial statements.
-6-
252,881
113,955
367,786
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
For the Fiscal Years Ended June 30, 2009 and 2008
Trust Funds
2009
ADDITIONS
Local revenues
Interest and investment income (loss)
$
12,275
(4,248)
2008
$
10,326
56,082
TOTAL ADDITIONS
8,027
66,408
DEDUCTIONS
Operating expenses
Contribution transfer
88,274
80,076
3,039,633
TOTAL DEDUCTIONS
88,274
3,119,709
(80,247)
(3,053,301)
235,752
3,212,847
Change in Net Assets
NET ASSETS, BEGINNING OF YEAR, AS ORIGINALLY STATED
76,206
Adjustment for restatement (see note 15A, pg 41)
235,752
NET ASSETS, BEGINNING OF YEAR, AS RESTATED
$
NET ASSETS, ENDING OF YEAR
155,505
See the accompanying notes to the financial statements.
-7-
3,289,053
$
235,752
DRAFT for Discussion Purposes Only
DISCRETELY PRESENTED COMPONENT UNIT –
HARTNELL COLLEGE FOUNDATION
-8-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
DISCRETELY PRESENTED COMPONENT UNIT
HARTNELL COLLEGE FOUNDATION
STATEMENT OF FINANCIAL POSITION
June 30, 2009 and 2008
2009
ASSETS
Current Assets
Cash and cash equivalents - restricted
Cash and cash equivalents - unrestricted
Pledges receivable, current
Note receivable, current
Total current assets
$
Noncurrent Assets
Investments - restricted
Pledges receivable
Note receivable
Property and equipment, net
Total noncurrent assets
Total assets
LIABILITIES AND NET ASSETS
Liabilities
Accounts payable
Deferred revenue
Total Liabilities
Net Assets
Unrestricted
Temporarily restricted
Permanently restricted
Total net assets
Total liabilities and net assets
204,419
2,673,279
810,138
5,733
3,693,569
$
105,895
1,963,272
899,154
5,454
2,973,775
3,463,280
100,500
107,488
326,375
3,997,643
$ 7,691,212
4,559,741
144,000
113,219
321,905
5,138,865
$ 8,112,640
$
$
842,056
16,147
858,203
(156,690)
2,705,022
4,284,677
6,833,009
$ 7,691,212
See the accompanying notes to the financial statements.
-8-
2008
555,767
555,767
346,577
3,008,321
4,201,975
7,556,873
$ 8,112,640
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
DISCRETELY PRESENTED COMPONENT UNIT
HARTNELL COLLEGE FOUNDATION
STATEMENT OF ACTIVITIES
For the Fiscal Year Ended June 30, 2009
REVENUE
Donations
Special events
In-kind donations
Miscellaneous revenue
Western Stage revenue
Assets released from restrictions
Total revenues
Unrestricted
Temporarily
Restricted
Permanently
Restricted
$
$
$
EXPENSES
Operating expenses
Program expenses
Fundraising expenses
Total expenses
7,416
99,652
21,519
72,694
73,523
1,475,668
1,750,472
(1,475,668)
191,572
134,805
1,516,549
72,062
1,723,416
OPERATING INCOME
1,583,010
8,971
61,839
13,420
52,702
52,702
-
-
Total
$ 1,643,128
108,623
83,358
86,114
73,523
1,994,746
134,805
1,516,549
72,062
1,723,416
27,056
191,572
OTHER INCOME
Interest and dividends
Realized (loss) on sale of investments
Unrealized (loss) on investments
Total other income
36,578
(382,794)
(208,408)
(554,624)
121,217
(379,348)
(206,740)
(464,871)
-
CHANGE IN NET ASSETS BEFORE
TRANSFERS
(527,568)
(273,299)
52,702
(30,000)
30,000
-
24,301
24,301
(30,000)
30,000
24,301
24,301
(503,267)
(303,299)
82,702
(723,864)
TRANSFERS
Change in donor designation
Net transfer of assets and liabilities from
Western Stage Auxiliary Corporation
Total transfers
CHANGE IN NET ASSETS AFTER
TRANSFERS
NET ASSETS
Net Assets, Beginning of year before restatement
Restatement
Net Assets, Beginning of year as restated
Net Assets, End of Year
109,853
236,724
346,577
$
(156,690)
52,702
3,006,646
1,675
3,008,321
$
2,705,022
4,440,374
(238,399)
4,201,975
$
See the accompanying notes to the financial statements.
-9-
4,284,677
271,330
157,795
(762,142)
(415,148)
(1,019,495)
(748,165)
7,556,873
7,556,873
$ 6,833,009
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
DISCRETELY PRESENTED COMPONENT UNIT
HARTNELL COLLEGE FOUNDATION
STATEMENT OF ACTIVITIES
For the Fiscal Year Ended June 30, 2008
REVENUE
Donations
Donations transferred from Hartnell College
Special events
In-kind donations
Miscellaneous revenue
Assets released from restrictions
Total revenues
Unrestricted
Temporarily
Restricted
Permanently
Restricted
$
$
$
118,520
15,887
76,498
1,302,710
1,528,686
EXPENSES
Operating expenses
Program expenses
Fundraising expenses
Total expenses
98,646
1,687,490
92,841
1,878,977
OPERATING INCOME
NET ASSETS
Net Assets, Beginning of year before restatement
Restatement
Net Assets, Beginning of year as restated
$
232,096
2,174,786
2,406,882
-
1,036,599
47,038
(2,478)
(3,796)
40,764
CHANGE IN NET ASSETS
1,173,302
864,847
45,831
172,723
82,606
(1,302,710)
1,036,599
-
(350,291)
OTHER INCOME
Interest and dividends
Realized (loss) on sale of investments
Unrealized (loss) on investments
Total other income
Net Assets, End of Year
15,071
2,406,882
265,775
(72,346)
(238,431)
(45,002)
-
Total
$ 1,420,469
3,039,633
164,351
188,610
159,104
4,972,167
98,646
1,687,490
92,841
1,878,977
3,093,190
312,813
(74,824)
(242,227)
(4,238)
(309,527)
991,597
2,406,882
3,088,952
37,458
618,646
656,104
2,030,658
(13,934)
2,016,724
2,399,805
(604,712)
1,795,093
4,467,921
4,467,921
346,577
$
3,008,321
$
See the accompanying notes to the financial statements.
-10-
4,201,975
$ 7,556,873
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
DISCRETELY PRESENTED COMPONENT UNIT
HARTNELL COLLEGE FOUNDATION
STATEMENT OF CASH FLOWS
For the Fiscal Year Ended June 30, 2009 and 2008
2009
2008
Cash flows from operating activities
Change in net assets
$
(723,864)
$
3,088,952
Adjustment to reconcile changes in net assets to net
cash provided for operations
Unrealized loss on investments
Depreciation
Donation of collection items
Changes in operating assets and liabilities:
Receivables
Payables
Deferred revenue
415,148
1,515
(4,600)
242,227
2,700
-
137,968
286,289
16,147
(12,672)
362,557
-
Net cash provided by operating activities
128,603
3,683,764
Cash flows from investing activities
Purchase of equipment
Purchase of investments
Proceeds from the sale of investments
(1,385)
(1,725,879)
2,407,192
(4,563,187)
2,515,152
Net cash used by investing activities
679,928
(2,048,035)
Net increase in cash and cash equivalents
808,531
1,635,729
2,069,167
433,438
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
$
2,877,698
$
2,069,167
Supplemental Disclosure:
Noncash financing transaction:
Collection items contributed
$
46,000
$
-
See the accompanying notes to the financial statements.
-11-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A.
REPORTING ENTITY
The District is the level of government primarily accountable for activities related
to public education. The governing authority consists of elected officials who,
together, constitute the Board of Trustees.
The District considered its financial and operational relationships with potential
component units under the reporting entity definition of GASB Statement No. 14,
The Financial Reporting Entity. The basic, but not the only, criterion for including
another organization in the District’s reporting entity for financial reports is the
ability of the District’s elected officials to exercise oversight responsibility over
such agencies. Oversight responsibility implies that one entity is dependent on
another and that the dependent unit should be reported as part of the other.
Oversight responsibility is derived from the District’s power and includes, but is
not limited to: financial interdependency; selection of governing authority;
designation of management; ability to significantly influence operations; and
accountability for fiscal matters.
Based upon the requirements of GASB Statement No. 14, and as amended by
GASB Statement No. 39, Determining Whether Certain Organizations are
Component Units, certain organizations warrant inclusion as part of the financial
reporting entity because of the nature and significance of their relationship with the
District, including their ongoing financial support of the District or its other
component units. A legally separate, tax-exempt organization should be reported
as a component unit of the District if all of the following criteria are met:
1.
The economic resources received or held by the separate organization are
entirely or almost entirely for the direct benefit of the District, its component
units, or its constituents.
2.
The District, or its component units, is entitled to, or has the ability to
otherwise access, a majority of the economic resources received or held by
the separate organization.
3.
The economic resources received or held by an individual organization that
the District, or its component units, is entitled to, or has the ability to
otherwise access, are significant to the District.
-12-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
A.
REPORTING ENTITY (continued)
Based upon the application of the criteria listed above, the following potential
component units have been included in the District’s reporting entity:
The Hartnell College Foundation (the Foundation) – The Foundation is a
separate not-for-profit corporation formed to promote and assist the educational
programs of the District. The Board of Directors is comprised of up to 35 members
including the President of the College, a member of the Board of Trustees selected
by the President and the Executive Director of the Foundation. In addition, the
Foundation does not carry on any activities not approved by the Superintendent of
the District. The financial activities of the Foundation have been discretely
presented. Financial statements for the Foundation may be obtained through the
District.
The Hartnell Community College Facilities Corporation (the Corporation) –
The Corporation is a legally separate organization component unit of the District.
The Corporation was formed to issue debt specifically for the acquisition and
construction of capital assets for the District. The Board of Trustees of the
Corporation is the same as the Board of Trustees of the District. The financial
activity has been “blended” or consolidated within the financial statements of the
District as if the activity was the District’s. There was no activity associated with
the Corporation for the 2008-09 year. Individually-prepared financial statements
are not prepared for the Corporation.
The Western Stage Auxiliary Corporation (the Auxiliary) – The Auxiliary is a
legally separate organization component unit of the District. The Auxiliary was
formed to augment and enhance the District’s Theater Arts program. The District’s
Board of Trustees and the Auxiliary’s Board share common members, and the
Board of Trustees provides oversight of the Auxiliary’s operation.
On
September 9, 2008 the District Board of Trustees approved a resolution to dissolve
the Auxiliary effective December 2008 and remaining assets and liabilities of the
Auxiliary were transferred to the Hartnell College Foundation. The financial
activity through December 31, 2008 has been “blended” or consolidated within the
financial statements as a component of the General Fund of the District as if the
activity was the District’s. Financial statements for the Auxiliary for the six
months ended December 31, 2008 can be obtained through the District.
-13-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
B.
FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles as prescribed by the Governmental
Accounting Standards Board (GASB), including Statement No. 34, Basic Financial
Statements and Management’s Discussion and Analysis – for State and Local
Governments and including Statement No. 35, Basic Financial Statements and
Management’s Discussion and Analysis of Public Colleges and Universities, issued
in June and November 1999 and Audits of State and Local Governmental Units
issued by the American Institute of Certified Public Accountants. The financial
statement presentation required by GASB No. 34 and No. 35 provides a
comprehensive, entity-wide perspective of the District’s financial activities. The
entity-wide perspective replaces the fund-group perspective previously required.
Fiduciary activities are excluded from the basic financial statements.
C.
BASIS OF ACCOUNTING
Basis of accounting refers to when revenues and expenditures or expenses are
recognized in the accounts and reported in the financial statements. Basis of
accounting relates to the timing of measurement made, regardless of the
measurement focus applied.
For financial reporting purposes, the District is considered a special-purpose
government agency engaged in business-type activities. Accordingly, the District’s
basic financial statements have been presented using the economic resources
measurement focus and the accrual basis of accounting. Under the accrual basis,
revenues are recognized when earned, and expenses are recorded when an
obligation has been incurred. All significant intra-agency transactions have been
eliminated.
For internal accounting purposes, the budgetary and financial accounts of the
District have been recorded and maintained in accordance with the California
Community Colleges System Office’s Budget and Accounting Manual.
-14-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
To ensure compliance with the California Education Code, the financial resources
of the District are divided into separate funds for which separate accounts are
maintained for recording cash, other resources and all related liabilities, obligations
and equities.
By state law, the District's Governing Board must approve a budget no later than
September 15. A public hearing must be conducted to receive comments prior to
adoption. The District's Governing Board satisfied these requirements. Budgets for
all governmental funds were adopted on a basis consistent with generally accepted
accounting principles (GAAP).
These budgets are revised by the District's Governing Board during the year to give
consideration to unanticipated income and expenditures. Formal budgetary
integration was employed as a management control device during the year for all
budgeted funds. Expenditures cannot legally exceed appropriations by major
object account.
In accordance with GASB Statement No. 20, the District follows all GASB
statements issued prior to November 30, 1989 until subsequently amended,
superceded or rescinded. The District has the option to apply all Financial
Accounting Standards Board (FASB) pronouncements issued after November 30,
1989 unless FASB conflicts with GASB. The District has elected to not apply
FASB pronouncements issued after the applicable date.
1.
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 three
months or less from the date of acquisition. Cash in the County treasury is
recorded at cost, which approximates fair value, in accordance with the
requirements of GASB Statement No. 31.
-15-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
2.
Accounts Receivable
Accounts receivable consists primarily of amounts due from the Federal
government, state and local governments, or private sources, in connection
with reimbursement of allowable expenditures made pursuant to the
District’s grants and contracts. Accounts receivable are recorded net of
estimated uncollectible amounts. The District recognized for budgetary and
financial reporting purposes any amount of state appropriations deferred from
the current fiscal year and appropriated from the subsequent fiscal year for
payment of current year costs as a receivable in the current year.
3.
Inventories
Inventories are presented at cost, on the weighted average method and are
expensed when used. Inventory consists of cafeteria food and supplies held
for resale to the students, faculty and staff of the College.
4.
Prepaid Expenses
Payments made to vendors for goods or services that will benefit periods
beyond June 30, 2009, are recorded as prepaid items using the consumption
method. A current asset for the prepaid amount is recorded at the time of the
purchase and an expenditure/expense is reported in the year in which goods
or services are consumed.
5.
Capitalized Fees
Amounts paid for fees and underwriting costs associated with long-term debt
are capitalized and amortized to interest expense over the life of the liability.
These costs are amortized using the straight-line method.
-16-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
6.
Restricted Cash and Cash Equivalents
Restricted cash and cash equivalents are those amounts externally restricted
as to use pursuant to the requirements of the District’s grants, contracts, and
debt service requirements.
7.
Capital Assets
Capital assets are recorded at cost at the date of acquisition. Donated capital
assets are recorded at their estimated fair value at the date of donation. For
equipment, the District’s capitalization policy includes all items with a unit
cost of $5,000 or more and an estimated useful life of greater than one year.
Buildings as well as renovations to buildings, infrastructure, and land
improvements that significantly increase the value or extend the useful life of
the structure are capitalized. Interest incurred during construction is not
capitalized.
The cost of normal maintenance and repairs that does not add to the value of
the asset or materially extend the asset's life is recorded in operating expense
in the year in which the expense was incurred. Depreciation is computed
using the straight-line method over the estimated useful lives of the assets,
generally 50 years for buildings, 10 years for building and land
improvements, 3-8 years for equipment and vehicles. Land and construction
in progress are not depreciated.
8.
Accounts Payable
Accounts payable consists of amounts due to vendors.
9.
Short-Term Borrowing
The cash in county balance in the Scheduled Maintenance Fund is a negative
$2,113,759 and $7,022,787 at June 30, 2009 and 2008, respectively. This
fund is used to record State monies for facilities projects. The negative
balance is due to a timing difference between expenditures made and
reimbursements from the State. The cash in county balance for the Debt
Service Fund is a negative $3,659 at June 30, 2009. These balances have
been reported as short-term borrowing in the Statement of Net Assets.
-17-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
10.
Accrued Liabilities
Accrued liabilities consist of salaries and benefits payable and deferred
summer pay.
11.
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 before the eligibility requirements are met.
12.
Compensated Absences
In accordance with GASB Statement No. 16, accumulated unpaid employee
vacation benefits are recognized as a liability of the District as accrued
liabilities in the Statement of Net Assets.
Sick leave benefits are accumulated without limit for each employee. The
employees do not gain a vested right to accumulated sick leave.
Accumulated employee sick leave benefits are not recognized as a liability of
the District. The District's policy is to record sick leave as an operating
expense in the period taken since such benefits do not vest nor is payment
probable; however, unused sick leave is added to the creditable service
period for calculation of retirement benefits when the employee retires and
within the constraints of the appropriate retirement systems.
-18-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
13.
Net Assets
Invested in capital assets, net of related debt: This represents the
District’s total investment in capital assets, net of outstanding debt
obligations related to those capital assets. To the extent debt has been
incurred but not yet expended for capital assets, such amounts are not
included as a component of invested in capital assets, net of related debt.
Restricted net assets – expendable: Restricted expendable net assets
include resources in which the District is legally or contractually obligated
to spend resources in accordance with restrictions imposed by external
third parties or by enabling legislation adopted by the District. The
District first applies restricted resources when an expense is incurred for
purposes for which both restricted and unrestricted net assets are
available.
Restricted net assets – nonexpendable: Nonexpendable restricted net
assets consist of endowment and similar type funds in which donors or
other outside sources have stipulated, as a condition of the gift instrument,
that the principal is to be maintained inviolate and in perpetuity, and
invested for the purpose of producing present and future income, which
may either be expended or added to principal. The District had no
restricted net assets – nonexpendable.
Unrestricted net assets: Unrestricted net assets represent resources
available to be used for transactions relating to the general operations of
the District, and may be used at the discretion of the governing board, as
designated, to meet current expenses for specific future purposes.
14.
State Apportionments
Certain current year apportionments from the state are based upon various
financial and statistical information of the previous year.
Any prior year corrections due to the recalculation in February of 2010 will
be recorded in the year computed by the State.
-19-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
15.
Property Taxes
Secured property taxes attach as an enforceable lien on property as of
March 1. Taxes are payable in two installments on November 15 and
March 15. Unsecured property taxes are payable in one installment on or
before August 31.
Real and personal property tax revenues are reported in the same manner in
which the County auditor records and reports actual property tax receipts to
the Monterey County Office of Education. This is generally on a cash basis.
A receivable has not been accrued in these financial statements because it is
not material. Property taxes for debt service purposes cannot be estimated
and have therefore not been accrued in the basic financial statements.
16.
On-Behalf Payments
GASB Statement No. 24 requires that direct on-behalf payments for fringe
benefits and salaries made by one entity to a third party recipient for the
employees of another, legally separate entity be recognized as revenue and
expenditures by the employer government. The State of California makes
direct on-behalf payments for retirement benefits to the State Teachers and
Public Employees Retirement Systems on behalf of all Community Colleges
in California. However, a fiscal advisory was issued by the California
Department of Education instructing districts not to record revenue and
expenditures for these on-behalf payments. The amount of on-behalf
payments made for the District is estimated at $228,000 and $231,000 for
STRS at June 30, 2009 and 2008, respectively.
-20-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
17.
Classification of Revenues
The District has classified its revenues as either operating or non-operating
revenues according to the following criteria:
Operating revenues: Operating revenues include activities that have the
characteristics of exchange transactions, such as student fees, net of
scholarship discounts and allowances, and Federal and most state and
local grants and contracts.
Non-operating revenues: Non-operating revenues include activities that
have the characteristics of nonexchange transactions, such as State
apportionments, taxes, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary
and Nonexpendable Trust Funds and Governmental Entities that use
Proprietary Fund Accounting, and GASB No. 33, Accounting and
Financial Reporting for Nonexchange Transactions, such as investment
income.
18.
Scholarship Discounts and Allowances
Student tuition and fee revenues, and certain other revenues from students,
are reported net of scholarship discounts and allowances in the statement of
revenues, expenses, and changes in net assets. Scholarship discounts and
allowances are the difference between the stated charge for goods and
services provided by the District, and the amount that is paid by students
and/or third parties making payments on the students’ behalf. Certain
governmental grants, such as Board of Governors’ grants are recorded as
operating revenues in the District’s financial statements. To the extent that
revenues from such programs are used to satisfy tuition and fees and other
student charges, the District has recorded a scholarship discount and
allowance.
-21-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
19.
Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles 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.
20.
New Accounting Pronouncement
The Governmental Accounting Standards Board (GASB) has issued
Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefits Other than Pension Plans, outlining new
accounting standards for governmental agencies regarding other
postemployment benefits. The statement is effective for the District in fiscal
year 2008-09. The statement requires governmental agencies to record and
disclose the actuarially determined cost of postemployment benefits other
than pensions based on the benefits expected to be earned by employees in
the future, as well as those benefits the employees have already earned.
Annual required contributions shall include the employer’s normal cost and a
provision(s) for amortizing the total unfunded actuarial accrued liability for a
period not to exceed 30 years.
Detailed disclosure required by both statements is provided at Note 12.
-22-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 2 - DEPOSITS AND INVESTMENTS:
A.
Deposits
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a bank failure, the District’s
deposits may not be returned to it. Although the District does not have a specific
deposit policy for custodial risk, the California Government Code requires
California banks and savings and loan associations to receive a local agencies’
deposits by pledging government securities with a value of 110% of a local
agencies’ deposits. As of June 30, 2009 and 2008, respectively, $760,617 and
$894,803 of the District’s bank balance of $1,083,181 and $1,012,444 was exposed
to credit risk as follows:
Uninsured and collateral held by pledging bank’s
trust department not in the District’s name
2009
2008
$ 760,617
$ 894,803
Cash in County
In accordance with Education Code Section 41001, the District maintains
substantially all of its cash in the Monterey County Treasury as part of the common
investment pool. These pooled funds are carried at cost which approximates fair
value. The fair market value of the District’s deposits in this pool as of June 30,
2009 and 2008, as provided by the pool sponsor, was $37,813,042 and
$39,872,260, respectively.
The County is authorized to deposit cash and invest excess funds by California
Government Code Section 53648 et. seq. The county is restricted by Government
Code Section 53635 pursuant to Section 53601 to invest in time deposits, U.S.
government securities, state registered warrants, notes or bonds, State Treasurer’s
investment pool, bankers’ acceptances, commercial paper, negotiable certificates of
deposit, and repurchase or reverse repurchase agreements. The funds maintained
by the County are either secured by federal depository insurance or are
collateralized.
Interest earned is deposited quarterly into participating funds. The investment
losses were proportionately shared by all funds in the pool. The County has
advised the District to expect a loss of earnings beginning in the 2008-09 fiscal
year due to its investments in Lehman Brothers and Washington Mutual. The
District’s proportionate share for all funds including fiduciary funds of
($1,428,904) for the 2008-09 year is reported net of interest earned in these
financial statements.
-23-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 2 - DEPOSITS AND INVESTMENTS: (continued)
B.
Investments
The District maintains investments with the State of California Local Agency
Investment Fund (LAIF) amounting to $498,896 and $498,896 as of June 30, 2009
and 2008, respectively, including amounts invested by Fiduciary Funds. Interest of
$9,067 was earned during the 2008-09 fiscal year, but was not recorded. An
adjustment was not made as the amount is not considered material to the financial
statements. LAIF pools these funds with other governmental agencies and invests
in various investment vehicles. These pooled funds approximate fair value.
Regulatory oversight is provided by the State Pooled Money Investment Board and
the Local Investment Advisory Board. LAIF is not subject to categorization as
prescribed by GASB Statement No. 3 to indicate the level of custodial credit risk
assumed by the District at year end.
NOTE 3 - ACCOUNTS RECEIVABLE:
The accounts receivable balance consists of the following:
Federal and State
Miscellaneous
2009
2008
$12,826,502
1,660,346
$ 9,548,183
3,025,764
$14,486,848
$12,573,947
NOTE 4 - INTERFUND TRANSACTIONS:
Interfund transfers consist of operating transfers from funds receiving resources to funds
through which the resources are to be expended. Interfund receivables and payables
result when the interfund transfer is transacted after the close of the fiscal year. Interfund
activity has been eliminated in the basic financial statements, except for transactions
occurring between governmental and fiduciary funds.
-24-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 5 - CAPITAL ASSETS:
The following provides a summary of changes in capital assets for the year ended
June 30, 2009:
Balance
June 30, 2008
Land
Site and site improvements
Equipment
Construction in progress
Total cost
$
Additions
590,992
89,656,392
8,044,363
16,357,218
114,648,965
Balance
June 30, 2009
Retirements
$
$
4,727,011
509,020
20,149,057
25,385,088
$
4,727,011
4,727,011
590,992
94,383,403
8,553,383
31,779,264
135,307,042
Less accumulated depreciation for:
Site and site improvements
Equipment
22,532,902
5,621,125
1,928,267
436,859
Total accumulated depreciation
28,154,027
2,365,126
Governmental capital assets, net
$
86,494,938
$
23,019,962
24,461,169
6,057,984
$
-
30,519,153
4,727,011
$ 104,787,889
The following provides a summary of changes in capital assets for the year ended
June 30, 2008:
Balance
Land
Site and site improvements
Equipment
Construction in progress
Total cost
Less accumulated depreciation for:
Site and site improvements
Equipment
Total accumulated depreciation
Governmental capital assets, net
(1)
Balance
June 30, 2007
Restatements (1)
$
$
590,992
80,060,202
6,309,328
11,984,378
98,944,900
Additions
$
2,645,175
2,645,175
Retirements
June 30, 2008
$
$
7,240,177
1,989,015
13,327,486
22,556,678
289,162
253,980
8,954,646
9,497,788
590,992
89,656,392
8,044,363
16,357,218
114,648,965
20,455,913
5,292,808
317,421
1,811,617
484,289
52,049
155,972
22,532,902
5,621,125
25,748,721
317,421
2,295,906
208,021
28,154,027
2,327,754
$ 20,260,772
$ 9,289,767
$ 86,494,938
$ 73,196,179
$
See note 15A - pg 41
-25-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 6 - TAX REVENUE ANTICIPATION NOTES (TRANS):
During the fiscal year ended June 30, 2009, the District issued $2,080,000 of Tax
Revenue Anticipation Notes dated July 1, 2008 through the California School Boards
Association Finance Corporation (Series 2008-09). The notes matured on July 6, 2009
and yielded 1.65% interest. The notes were sold by the District to supplement its cash
flow.
The funds were held in a Guaranteed
were that $2,080,000 be deposited in
requirements were met as of June 30,
defeased on June 30, 2009 and are
statements.
Investment Contract. Repayment requirements
July 2009, inclusive of interest. All repayment
2009. The notes were considered in-substance
not reflected as a liability in these financial
NOTE 7 - GENERAL OBLIGATION BONDS:
On November 5, 2002, the District voters authorized the issuance and sale of general
obligation bonds totaling $131,000,000. Proceeds from the sale of the bonds will be used
to finance the construction, acquisition, and modernization of certain property and
District facilities.
On April 15, 2003, the District issued General Obligation Bonds, Election of 2002, Series
A of $35,000,000 of current interest bonds. Interest ranges from 2.0% to 5.0% payable
semiannually on February 1 and August 1. At June 30, 2009 and 2008 the principal
balance outstanding was $2,610,000 and $2,880,000, respectively.
On March 23, 2005, the District issued 2005 General Obligation Refunding Bonds of
$23,500,000 of current interest bonds and $5,562,042 of capital appreciation bonds.
Interest rates range from 4.50% to 5.25% payable semiannually on February 1 and
August 1. At June 30, 2009 and 2008, the principal balance outstanding (including
accreted interest to date) was $29,053,453 and $29,416,437, respectively. Unamortized
premium costs at June 30, 2009 and 2008 were $3,055,448 and $3,287,507, respectively.
Unamortized issue costs at June 30, 2009 and 2008 were $394,388 and $424,341,
respectively. Premium and issuance costs are amortized over the life of the bonds as a
component of interest expense on the bonds.
-26-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 7 - GENERAL OBLIGATION BONDS: (continued)
On June 6, 2006, the District issued the General Obligation Bonds, Election 2002, Series
B of $32,815,000 of current interest bonds and $2,180,518 of capital appreciation bonds.
Interest ranges from 3.86% to 5.25% payable semiannually June 1 and December 1. At
June 30, 2009 and 2008 the principal balance outstanding (including accreted interest to
date) was $34,938,019 and $35,112,150, respectively. Unamortized premium costs at
June 30, 2009 and 2008 were $1,170,600 and $1,226,565, respectively. Unamortized
issue costs at June 30, 2009 and 2008 were $519,104 and $543,922, respectively.
Premium and issuance costs are amortized over the life of the bonds as a component of
interest expense on the bonds.
On May 27, 2009, the District issued the General Obligation Bonds, Election 2002,
Series C of $3,366,499 of capital appreciation bonds and $9,231,389 of convertible
capital appreciation bonds. Interest ranges from 5.66% to 6.20% payable semiannually
February 1 and August 1. At June 30, 2009 the principal balance outstanding was
$12,597,888. Unamortized premium and issue costs were $196,295 each. Premium and
issuance costs are amortized over the life of the bonds as a component of interest expense
on the bonds.
Capital appreciation bonds issued for Series B, Series C, and the Refunded Bond have
maturity dates from June 1, 2017 through June 1, 2025, August 1, 2023 through August
1, 2028, and August 1, 2005 through August 1, 2014, respectively. Prior to the
applicable maturity date, each bond will accrete interest on the principal component.
The refunding bonds were issued to advance refund a portion of the outstanding Series A
general obligation bonds. $28,554,555 in refunding proceeds were placed into an
irrevocable escrow account and will be used to fund the future required principal and
interest payments of the refunded bonds. The amount of refunded debt to be paid from
the escrow account at June 30, 2009 and 2008 for Series A is $27,240,000. The refunded
portions of the bonds are considered in-substance defeased and are not recorded in the
financial statements.
Amounts paid to the refunded debt escrow agent, in excess of outstanding debt at the
time of payment, are recorded as deferred charges on the statement of net assets and are
amortized to interest expense over the life of the liability. At June 30, 2009 and 2008,
unamortized deferred charges were $342,726 and $369,090, respectively.
-27-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 7 - GENERAL OBLIGATION BONDS: (continued)
The outstanding bonded debt for Hartnell Community College District at June 30, 2009
is:
Series
Series A
Refunding Bond
Accreted Interest
Series B
Accreted Interest
Series C
Amount
of Original
Issue
Date of
Issue
Interest
Rate %
Maturity
Date
4/15/2003
3/23/2005
2.00-5.00%
4.50-5.25%
8/1/2014
8/1/2022
6/6/2006
3.86 - 5.25%
6/1/2031
34,995,518
5/27/2009
5.66 - 6.20%
8/1/2033
12,597,888
111,655,448
(1)
$
$
(1)
35,000,000
29,062,042
Issued
Current
Year
Outstanding
July 1, 2008
$
$
2,880,000
27,715,641
1,700,796
34,842,226
269,924
67,408,587
$
Interest
Accreted
Current Year
$
Redeemed
Current
Year
$
270,000
696,395
328,605
232,224
27,776
$
$
1,555,000
$
662,016
85,869
12,597,888
$ 12,597,888
$
747,885
Outstanding
June 30, 2009
2,610,000
27,019,246
2,034,207
34,610,002
328,017
12,597,888
79,199,360
The maturity date has been revised from the original date of August 1, 2027 to reflect the final maturity date on the remaining non-refunded bonds.
The annual requirements to amortize all bonds payable, outstanding as of June 30, 2009,
are as follows:
Series A
Year Ended
June 30,
2010
2011
2012
2013
2014
Principal
Interest
Total
$
345,000
425,000
515,000
610,000
715,000
$
88,788
76,175
59,725
39,656
14,300
$
433,788
501,175
574,725
649,656
729,300
$
2,610,000
$
278,644
$
2,888,644
-28-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 7 - GENERAL OBLIGATION BONDS: (continued)
Refunding Bond
Year Ended
June 30,
2010
2011
2012
2013
2014
2015-2019
2020-2023
Principal
$
653,054
613,502
574,752
537,100
502,679
10,113,159
14,025,000
$ 27,019,246
Accreted
Interest
Component
Interest
$
Total
1,163,688
1,163,688
1,163,688
1,163,688
1,163,688
4,940,900
1,415,369
$
426,946
526,498
625,248
722,900
822,321
1,251,841
$
2,243,688
2,303,688
2,363,688
2,423,688
2,488,688
16,305,900
15,440,369
$ 12,174,709
$
4,375,754
$ 43,569,709
Series B
Year Ended
June 30,
2010
2011
2012
2013
2014
2015-2019
2020-2024
2025-2029
2030-2031
Principal
$
201,165
213,512
239,391
239,635
263,895
2,662,404
8,285,000
15,265,000
7,240,000
$ 34,610,002
Accreted
Interest
Component
Interest
$
1,622,241
1,622,241
1,622,241
1,622,241
1,622,241
8,037,448
7,167,566
4,196,637
547,500
$ 28,060,356
-29-
Total
$
33,835
46,488
65,609
80,365
106,105
327,597
$
$
659,999
$
1,857,241
1,882,241
1,927,241
1,942,241
1,992,241
11,027,449
15,452,566
19,461,637
7,787,500
63,330,357
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 7 - GENERAL OBLIGATION BONDS: (continued)
Series C
Year Ended
June 30,
2010
2011
2012
2013
2014
2015-2019
2020-2024
2025-2029
2030-2034
Principal
Accreted
Interest
Component
Interest
Total
$
$
$
$
153,306
3,213,193
9,231,389
$ 12,597,888
1,873,791
6,245,969
3,200,159
$ 11,319,919
591,694
5,906,807
11,163,611
$ 17,662,112
$
2,618,791
15,365,969
23,595,159
41,579,919
NOTE 8 - LEASE REVENUE BONDS:
Lease Revenue Bonds, Series 2006A
On January 20, 2006, the District issued lease revenue bonds in the amount of
$2,585,000, with interest rates ranging from 3.50 to 4.375 percent. The funds were used
to advance refund the 2000 Certificates of Participation which have been paid off in full.
At June 30, 2008, the principal balance outstanding was $2,330,000. During the fiscal
year ended 2009, the District advance refunded the debt with proceeds from general
obligation bonds. On December 11, 2008 the District placed into an irrevocable escrow
account $2,613,848 that will be used to fund future required principal and interest
payments on the bonds, therefore at June 30, 2009 the bonds were considered insubstance defeased. The outstanding debt to be paid by the escrow agent at June 30,
2009 is $2,205,000.
-30-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 9 - LONG-TERM DEBT:
A schedule of changes in long-term debt for the year ended June 30, 2009 is shown
below:
Beginning
Balance
July 1, 2008
Additions
Deductions
Ending
Balance
June 30, 2009
Amount
Due in
One Year
General obligation bond:
Series A
Refunding bond
Refunding bond - bond premium
Deferred liability on refunding
Series B
Series B - bond premium
Series C
Series C - bond premium
Total general obligation bonds payable
Lease revenue bonds
Early retirement incentive
Other post employment benefits
Total bonds and notes payable
$
2,880,000
29,416,437
3,287,507
(369,090)
35,112,150
1,226,565
71,553,569
2,330,000
$ 73,883,569
-31-
$
$
662,016
85,869
12,597,888
196,974
13,542,747
600,551
115,017
$ 14,258,315
270,000
1,025,000
232,059
(26,364)
260,000
55,965
679
1,817,339
2,330,000
$
4,147,339
$
2,610,000
29,053,453
3,055,448
(342,726)
34,938,019
1,170,600
12,597,888
196,295
83,278,977
600,551
115,017
$ 83,994,545
$
345,000
1,080,000
235,000
1,660,000
83,335
$
1,743,335
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 10 - EMPLOYEE RETIREMENT PLANS:
Qualified employees are covered under multiple-employer defined benefit pension plans
maintained by agencies of the State of California. Academic employees are members of
the State Teachers’ Retirement System (STRS) and classified employees are members of
the Public Employees’ Retirement System (PERS) and part-time, seasonal and temporary
employees and employees not covered by STRS or PERS are members of the Public
Agency Retirement System (PARS).
State Teachers’ Retirement System (STRS)
Plan Description
The District contributes to the State Teachers’ Retirement System (STRS), a cost-sharing
multiple-employer public employee retirement system defined benefit pension plan
administered by STRS. The plan provides retirement, disability and survivor benefits to
beneficiaries. Benefit provisions are established by State statutes, as legislatively
amended, within the State Teachers’ Retirement Law. STRS issues a separate
comprehensive annual financial report that includes financial statements and required
supplementary information. Copies of the STRS annual financial report may be obtained
from STRS, 7667 Folsom Boulevard, Sacramento, CA 95826.
Funding Policy
Active plan members are required to contribute 8.0% 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 STRS Teachers’
Retirement Board. The required employer contribution rate for fiscal year 2008-09 was
8.25% of annual payroll. The contribution requirements of the plan members are
established and may be amended by State statute.
-32-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 10 - EMPLOYEE RETIREMENT PLANS: (continued)
Public Employees’ Retirement System (PERS)
Plan Description
The District contributes to the School Employer Pool under the California Public
Employees’ Retirement System (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
death benefits to plan members and beneficiaries. Benefit provisions are established by
State statutes, as legislatively amended, within the Public Employees’ Retirement Law.
CalPERS issues a separate comprehensive annual financial report that includes required
supplementary information. Copies of the CalPERS’ annual financial report may be
obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814.
Funding Policy
Active plan members are required to contribute 7.0% of their salary; currently the District
contributes the employees’ portion for California School Employees Association and
Local 39 bargaining unit members. 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 for fiscal year 2008-09 was 9.428% of annual payroll. The contribution
requirements of the plan members are established and may be amended by State statute.
Contributions to STRS and PERS
The District’s contributions to STRS and PERS for each of the last three fiscal years are
as follows:
STRS
PERS
Year Ended
June 30,
Required
Contribution
Percent
Contributed
Required
Contribution
Percent
Contributed
2007*
2008
2009
$1,117,983
1,060,052
934,307
100%
100%
100%
$1,227,828
1,287,360
1,033,971
100%
100%
100%
*This year was not audited by Vicenti, Lloyd & Stutzman LLP.
-33-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 11 - EARLY RETIREMENT INCENTIVE:
On April 14, 2009, the Board of Trustees adopted a resolution for the implementation of
an Early Retirement Incentive for Full-Time Faculty.
A total of seven full-time faculty are participating. The District will pay benefits from
2010 through 2017 totaling $600,551. $83,335 is due during 2009-10. The total
remaining liability has been reflected in these financial statements. The net savings for
the life of the plan is estimated at $945,000.
NOTE 12 - POSTEMPLOYMENT HEALTH CARE BENEFITS:
Plan Description
The District administers a single-employer defined benefit healthcare plan (the Retiree
Health Plan).
The District provides medical, dental, and vision insurance coverage, as prescribed in the
various employee union contracts, to retirees meeting plan eligibility requirements.
Eligible employees retiring from the District may become eligible for these benefits when
the requirements are met. The eligibility requirements for employees who are members
of California School Employees Association or International Union of Operating
Engineers Stationary Local Number 39 are a minimum age of 60 and have a minimum of
ten years of continuous service with the District. These employees receive one year of
benefits for each two years with the District not to exceed five years. Additional age and
service criteria may be required. The eligibility requirement for members of Hartnell
College Faculty Association is a minimum age of 58 with ten years of full-time service.
These employees receive one year of benefits for each two years with the District not to
exceed seven years. Additional age and service criteria may be required. The eligibility
requirement for managers, supervisors, and confidential employees are: to be of eligible
age to retire from STRS or PERS, whichever is appropriate and have five years of fulltime employment with the District. Benefits will be granted for a maximum of ten years.
The District-paid health benefits for all retirees terminates at age 65.
The Retiree Health Plan does not issue a separate financial report.
-34-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 12 - POSTEMPLOYMENT HEALTH CARE BENEFITS: (continued)
Funding Policy
The District currently finances benefits on a pay-as-you-go basis. The District
contributes 100 percent of the cost of current year premiums for eligible retired plan
members and their dependents as applicable. For fiscal year ended 2009, the District
contributed $420,215 to the plan.
Annual OPEB Cost and Net OPEB Obligation
The District’s annual other post employment benefit (OPEB) cost (expense) is calculated
based on the annual required contribution of the employer (ARC), an amount actuarially
determined in accordance with the parameters of GASB Statement 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 liabilities (or funding excess)
over a period not to exceed thirty years. The following table shows the components of
the District’s annual OPEB cost for the year, the amount actually contributed, and
changes in the OPEB obligation:
Annual required contribution (ARC)
$
535,232
Interest on net OPEB obligation
-
Adjustment to annual required contribution
-
Annual OPEB cost (expense)
535,232
Contributions made
(420,215)
Change in net OPEB obligation
115,017
Net OPEB obligation - Beginning of Year (1)
Net OPEB obligation - End of Year
(1)
$
115,017
GASB Statement No. 45 provides for prospective implementation, therefore the
beginning net OPEB obligation is set at zero as of the beginning of the initial year.
-35-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 12 - POSTEMPLOYMENT HEALTH CARE BENEFITS: (continued)
The District’s annual OPEB cost for the year, the percentage of annual OPEB cost
contributed, and the net OPEB obligation for the fiscal year was as follows:
Fiscal Year
Ended
6/30/2009
Percentage of
Annual OPEB
Cost Contributed
Annual
OPEB Cost
$
535,232
78.5%
Net OPEB
Obligation
$
115,017
Fiscal year 2008-09 was the year of implementation of GASB Statement No. 45 and the
District elected to implement prospectively, therefore, prior year comparative data is not
available. In future years, three-year trend information will be presented.
Funding Status and Funding Progress
As of June 1, 2009, the most recent actuarial valuation date, the plan was unfunded. The
actuarial accrued liability for benefits as well as the unfunded actuarial accrued liability
(UAAL) was $4,852,364. The covered payroll (annual payroll of active employees
covered by the plan) was $16,251,014, and the ratio of the UAAL to the covered payroll
was 29.86%. Although the plan has no segregated assets, the District does maintain a
retiree benefits fund to designate resources for retiree health care costs. At June 30,
2009, the fund’s designated balance was $1,240,012.
Actuarial valuations of an ongoing benefit plan involve 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 contributions 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 funding progress, presented as required supplementary
information following the notes to the financial statements, presents multiyear trend
information about whether the actuarial value of plan assets, if any, is increasing or
decreasing over time relative to the actuarial accrued liabilities for benefits.
-36-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 12 - POSTEMPLOYMENT HEALTH CARE BENEFITS: (continued)
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 plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce the effects
of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, if
any, consistent with the long-term perspective of the calculations.
In the June 1, 2009 actuarial valuation, the entry age normal actuarial cost method was
used. The actuarial assumptions included a 5.0 percent investment rate of return (net of
administrative expenses) which is a blended rate of the expected long-term investment
returns on plan assets and on the employers own investments calculated based on the
funded level of the plan at the valuation date, and an annual healthcare cost trend rate of
4 percent. The UAAL is being amortized as a level percentage of projected payroll over
30 years. The District will need to make an election with respect to whether to use an
“open” or “closed” amortization period in future valuations.
NOTE 13 - JOINT VENTURES (JOINT POWERS AGREEMENTS):
The District participates in seven joint Powers Agreements (JPA) entities, Monterey
County Schools Insurance Group, Bay Area Community College Districts, School
Association for Excess Risk (SAFER), the Statewide Association of Community
Colleges (SWACC), Protected Insurance Program for Schools (PIPS), South Bay
Regional Public Safety Training Consortium and the Monterey County Delinquent Tax
Finance Authority (the Authority). The relationship between the District and the JPAs is
such that the JPAs are not component units of the District for financial reporting
purposes.
Monterey County Schools Insurance Group administers medical, dental and vision
benefit programs for its member districts.
-37-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 13 - JOINT VENTURES (JOINT POWERS AGREEMENTS): (continued)
Bay Area Community College Districts administers a cooperative insurance program for
member districts. Under this program, member districts are insured under certain
liability and property insurance policies purchased by the Agency. The Agency is
governed by a board comprised of one representative for each member district.
Coverages under current policies provide for the member districts to pay for the first
$10,000 and the Agency to pay for the next $240,000 on each property claim and the next
$90,000 for each liability claim. Claims over the $250,000 and $100,000 self-insured
retention are covered by excess insurance pools.
SAFER provides excess property and liability program protection for its member
agencies. SAFER is governed by a board which is comprised of one or two members,
determined based on ADA (Average Daily Attendance) or FTES, for each participating
district. Each member’s contribution is determined based on its respective total insurable
values, loss history, unusual exposures and other information relative to providing
coverage. The base contribution rate may be subject to modification based on each
member’s claim experience.
SWACC provides liability and property insurance for approximately nineteen community
colleges. SWACC is governed by a Board comprised of a member of each of the
participating districts. The board controls the operations of SWACC, including selection
of management and approval of members beyond their representation on the Board. Each
member shares surpluses and deficits proportionately to its participation in SWACC.
PIPS provides workers’ compensation insurance protection to its membership for public
schools and community colleges throughout California.
The South Bay Regional Public Safety Training Consortium provides education and
training to public safety students of participating community colleges.
The Authority purchases delinquent ad valorem property taxes from school agencies in
Monterey County to receive additional unrestricted revenues through financing of
property tax delinquencies. The Authority is a pass through entity and financial
information is not available. For the fiscal year 2008-09, the District received $78,245 in
local revenue from the Authority.
-38-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 13 - JOINT VENTURES (JOINT POWERS AGREEMENTS): (continued)
Each JPA is governed by a board consisting of a representative from each member
district. Each governing board controls the operations of its JPA independent of any
influence by the Hartnell Community College District beyond the District’s
representation on the governing boards.
Each JPA is independently accountable for its fiscal matters. All JPAs maintain their
own accounting records. Budgets are not subject to any approval other than that of the
respective governing boards.
Member districts share surpluses and deficits
proportionately to their participation in the JPA.
The relationships between the Hartnell Community College District and the JPAs are
such that the JPA is not a component unit of the District for financial reporting purposes.
Separate financial statements for each JPA may be obtained from the respective entity.
Condensed financial information for the most current information available is as follows:
Bay Area
CCD
6/30/08
(Audited)
MCSIG
6/30/2008
(Audited)
SBRPSTC
6/30/2008
(Audited)
8,918
4,661
$ 8,273,001
2,441,134
$ 21,966,617
13,216,265
$ 6,457,092
1,768,491
4,257
$ 5,831,867
$ 8,750,352
$ 4,688,601
$ 7,013,422
4,430,778
$ 26,409,423
26,408,589
$ 3,823,148
3,815,573
$ 71,329,593
72,624,859
$ 8,846,082
8,672,473
$ 2,582,644
$
$
$ (1,295,266)
$
SWACC
6/30/08
(Audited)
PIPS
6/30/08
(Audited)
Total assets
Total liabilities
$ 39,034,338
19,175,367
$ 65,758,281
41,930,893
$
Net assets
$ 19,858,971
$ 23,827,388
$
Total revenues
Total expenditures
$ 10,740,119
8,769,388
Change in net assets
$ 1,970,731
-39-
SAFER
6/30/08
(Audited)
834
7,575
173,609
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 14 - RISK MANAGEMENT:
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; natural disasters; and
medical claims. The District contracts with the Statewide Association of Community
Colleges (SWACC), School Association of Excess Risk (SAFER) and Bay Area
Community College District Joint Powers Authority for property and liability insurance
coverage. Settled claims have not exceeded the coverage provided by the JPA in any of
the past three fiscal years.
The District participated in the Protected Insurance Program for Schools (PIPS), an
insurance purchasing pool. The intent of PIPS is to achieve the benefit of a reduced
premium for the District by virtue of its grouping and representation with other
participants in the PIPS. 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 PIPS. 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 ensures that each participant shares equally in the overall
performance of the PIPS. Participation in the PIPS is limited to community college
districts that can meet the PIPS’s selection criteria.
-40-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 15 - RESTATEMENTS:
A.
Beginning Net Assets
Beginning net assets on the statement revenues, expenses and changes in net assets
has been restated to reflect the:
Capital assets, net of accumulated depreciation
not recorded in previous years for the King City
Campus Center Building
2009
2008
$ 2,327,754
$ 2,327,754
Deferred charges incurred in the bond refunding
transaction which were not recorded in the prior
year
395,454
Athletic trust as a trust fund on the statement of
fiduciary net assets
(105,916)
Cumulative activity of the Deferred Payroll
Clearing Account at the Monterey County Office
of Education
(913,464)
Correction of the prior year accounts receivable
balance in the Scheduled Maintenance Fund for
State funding that will not be received by the
District
(1,112,025)
$ 2,327,754
-41-
$
591,803
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 15 - RESTATEMENTS: (continued)
B.
Beginning Cash and Cash Equivalents – Fiscal Year Ended June 30, 2008
Beginning cash and cash equivalents on the statement of cash flows has been
restated to reflect the:
Cumulative activity of the Deferred Payable Clearing
Account at the Monterey County Office of Education
Change in presentation of fiduciary funds previously
reported as amounts held in trust in the primary
government financial statements
Change in presentation of the Athletic Trust Fund as a
fiduciary fund which was previously reported in the
primary government financial statements
$
(913,464)
(3,663,641)
(112,699)
$ (4,689,804)
NOTE 16 - COMMITMENTS AND CONTINGENCIES:
A.
Litigation
The District is involved in various claims and legal actions arising in the ordinary
course of business. In the opinion of management, the ultimate disposition of these
matters will not have a material adverse effect on the District’s financial
statements.
B.
State and Federal Allowances, Awards and Grants
The District has received state and Federal funds for specific purposes that are
subject to review and audit by the grantor agencies. Although such audits could
generate expenditure disallowances under terms of the grants, it is believed that any
required reimbursement will not be material.
-42-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2008
NOTE 16 - COMMITMENTS AND CONTINGENCIES: (continued)
C.
Purchase Commitments
As of June 30, 2009 and 2008, the District was committed under various capital
expenditure purchase agreements for construction and modernization projects
totaling $31,065,000 and $36,143,325, respectively. Projects will be funded
through bond proceeds and state funds.
NOTE 17 - SUBSEQUENT EVENTS:
A.
Tax Revenue Anticipation Notes
The District issued $2,815,000 of Tax Revenue Anticipation Notes dated July 21,
2009 through the California Community College Financing Authority’s Tax and
Revenue Anticipation Note Program (Series 2009A). The notes mature on June 30,
2010 and yield 0.95% interest. The notes were sold by the District to supplement its
cash flow.
The funds will be held with the trustee unless and until the District needs to draw
funds out. Repayment requirements are that $2,815,000 of principal and $61,016 of
interest be repaid from the funds held with the administrator by June 2010.
B.
General Obligation Bonds
The District sold $48,405,079 General Obligation Bonds, 2002 Election Series D
on August 27, 2009. The bonds were sold with an interest yield of 6.43% to 7.72%
and will mature through 2049. The bonds were sold to finance the construction,
acquisition, and modernization of certain property and District facilities.
-43-
DRAFT for Discussion Purposes Only
REQUIRED SUPPLEMENTARY INFORMATION
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF POST EMPLOYMENT HEALTHCARE BENEFITS FUNDING PROGRESS
For the Fiscal Year Ended June 30, 2009
Actuarial
Valuation Date
6/1/2009
Actuarial Value
of
Assets
(AVA)
$
-
Actuarial Accrued
Liability
(Unit Cost Method)
(AAL)
Unfunded Actuarial
Accrued Liability
(UAAL)
$
$
4,852,364
4,852,364
Funding
Ratio
0.0%
Covered
Payroll
$
UAAL as a
Percentage of
Covered Payroll
16,251,014
29.86%
Note: Fiscal year 2008-09 was the year of implementation of GASB Statement No. 45 and the District elected to implement prospectively, therefor
prior year comparative data is not available. In future years, three year trend actuarial information will be presented.
Although the plan has no segregated assets, the District does maintain a retiree benefits fund to designate resources for retiree health
care costs. At June 30, 2009, the funds designated balance was $1,240,012.
See the accompanying notes to the required supplementary information.
-44-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2009
NOTE 1 - PURPOSE OF SCHEDULES:
Schedule of Post Employment Healthcare Benefits Funding Progress
This schedule is prepared to show information for the most recent actuarial valuation and
in future years, the information from the three most recent actuarial valuations in
accordance with Statement No. 45 of the Governmental Accounting Standards Board,
Accounting and Financial Reporting by Employers for Postemployment Benefits Other
Than Pensions. The schedule is intended to show trends about the funding progress of
the District’s actuarially determined liability for post employment benefits other than
pensions.
-45-
DRAFT for Discussion Purposes Only
SUPPLEMENTARY INFORMATION
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
HISTORY AND ORGANIZATION
June 30, 2009
The Hartnell Community College District was established in 1949 and serves communities in
both Monterey and San Benito counties. The District currently operates one college.
BOARD OF TRUSTEES
Member
Office
Term Expiration
Patricia Donohue
President
November 2011
Kevin Healy
Vice President
November 2011
William Freeman
Member
November 2011
Elia Gonzalez-Castro
Member
November 2011
John Martinez
Member
November 2009
Brad Rice
Member
November 2009
Ray Montemayor
Member
November 2009
Armando Cortes
Student Trustee, Hartnell College
June 2009
DISTRICT EXECUTIVE OFFICERS
Dr. Phoebe K. Helm
Superintendent/President
Vacant
Associate Vice President for Academic Affairs and Accreditation
Mr. Gary Hughes
Associate Vice President for Administrative Information Systems
and Library Services
Ms. Barbara Yesnosky
Associate Vice President for Support Operations
Ms. Terri Pyer
Interim Director of Human Resources/Equal Employment Opportunity
Dr. Gregory Peterson
Associate Vice President for Student Affairs
-46-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2009
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
U. S. DEPARTMENT OF EDUCATION
Direct:
Finanacial Aid Cluster:
Pell Grant
Pell Grants Administration
Academic Competitiveness Grant
Federal Work Study
Supplemental Educational Opportunity Grants (SEOG)
Total Finanacial Aid Cluster
College Cost Reduction and Access Act - Math & Science
Child Care Access Grant
GEAR UP (East Salinas)
GEAR UP (Soledad)
Title V - Strengthening Institutions
Student Support Services Program
Migrant Ed - High School Equivalency Program
CFDA
Number
Pass-Through Entity
Identifying Number
84.063
84.063
84.375
84.033
84.007
N/A
N/A
N/A
N/A
N/A
84.031C
84.335A
84.334A
84.334A
84.031S
84.042A
84.141N
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Total direct from U.S. Department of Education
Program
Expenditures
$
5,516,418
9,790
37,650
116,571
130,830
5,811,259
737,649
34,087
912,248
130,997
794,565
224,535
400,909
9,046,249
Passed through from California Community Colleges Chancellor's Office:
Carl D. Perkins Career and Technical Education (CTE) Act
CTE - Title I, Part C
CTE - Title II, Tech Prep
84.048
84.243
07-C01-021
N/A
272,927
81,405
Passed through from the California State Department of Rehabilitation:
Workability III Department of Rehabilitation
84.126A
26014
137,716
Passed through from the Foundation of California State University, Monterey
Bay:
College Cost Reduction and Access Act - Math & Science
84.031C
5024701A-081120-S-A
18,259
Total passed through from U.S. Department of Education
510,307
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Passed through from the University of California, Santa Cruz:
National Institute of Health
93.375
S0180631
11,811
Passed through from California Community Colleges Chancellor's Office:
Temporary Assistance for Needy Families (TANF)
Foster Care - Title IV-E
93.558
93.658
N/A
N/A
45,010
140,341
Passed through from the County of Monterey, Department of Social and
Employee Services (DSES):
Foster Care - Title IV-E (DSES)
93.658
N/A
325,260
Passed through from Yosemite Community College District:
Child Development Training Consortium
93.575
N/A
10,000
Total passed through from Department of Health and Human Services
See the accompanying notes to the supplementary information.
-47-
532,422
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2009
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
NATIONAL SCIENCE FOUNDATION
Direct:
Improving Student Success in Computer Science, Engineering, and
Mathematics
Improving Women and Latino Enrollment in STEM Program
CFDA
Number
Pass-Through Entity
Identifying Number
47.076
47.076
N/A
N/A
Total direct from National Science Foundation
Program
Expenditures
5,025
224,136
229,161
Passed through from the University of California, Santa Cruz:
Transforming Undergraduate Laboratory Experience
47.076
DUE-0816754
Total passed through from the National Science Foundation
10,970
10,970
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
Direct:
National Service Award for Scholarships
94.006
N/A
Total direct from the Corporation for National and Community Service
Passed through from the Foundation for California Community Colleges:
AmeriCorps Funds - California Service Corps (America Reads)
82,272
94.006
N/A
Total passed through from the Corporation for National and Community
Service
U.S. DEPARTMENT OF AGRICULTURE
Passed through from the California Department of Education:
Child Care Food Program
Forest Reserve Funds
Passed through from the Foundation of California State University, Monterey
Bay:
Seamless Agribusiness Management Program
82,272
11,130
11,130
10.558
10.665
2850-6A
10044
8,126
3,839
10.223
101304-A
30,699
Total passed through from U.S. Department of Agriculture
42,664
U.S. DEPARTMENT OF LABOR
Passed through from the Monterey County Office of Education:
Workforce Investment Grant
17.259
N/A
Total passed through from U.S. Department of Labor
48,345
48,345
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
Passed through from the United Negro College Fund Special Programs
Corporation:
Curriculum Improvement Partnership Award II Grant
43.001
N/A
Total passed through from the National Aeronautics and Space
Administration
134,918
134,918
See the accompanying notes to the supplementary information.
-48-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2009
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
SMALL BUSINESS ADMINISTRATION
Passed through from the University of California, Merced:
Small Business Development Center (SBA UC Merced)
CFDA
Number
Pass-Through Entity
Identifying Number
59.037
N/A
Program
Expenditures
30,427
Total passed through from Small Business Administration
30,427
Total Federal Awards
$ 10,678,865
Student Financial Aid Loan Programs:
Stafford Loans
Hartnell Community College District had the following loan balance outstanding as of 6/30/09
N/A- Pass-through entity identifying number is either not available or not applicable
See the accompanying notes to the supplementary information.
-49-
$
261,051
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF STATE AWARDS
For the year ended June 30, 3009
Program
Cash
GENERAL FUND
Block Grant
California State Grants (CAL Grants)
CalWorks
Career Technical Education Equipment for Nursing Program
Career Technical Education Growth & Retention Nursing Prog Enrollment
Career Technical Education Nursing Program Redmediation
Career Technical Education Regional Occupation Partner
Career Technical Education Regional Occupation Partner Supplemental
Career Technical Education Linking After School Employment
Coding Specialist Grant
Cooperative Agency Resource Education (CARE)
Disabled Students Programs and Services (DSP&S)
Entrepreneurship Career Pathways Projects
Extended Opportunity Program and Services (EOPS)
Faculty and Staff Development
Faculty and Staff Diversity (Equal Employment Opportunity)
Foster Care Education
Industry Driven Regional Collaborative Food Safety Tech
Industry Driven Regional Collaborative Sustainable Construction
Matriculation
MESA Program
Small Business Development Center (SBDC )
Student Financial Aid Administration
Telecommunications and Technology Infrascturcture Program (TTIP)
Transfer and Articulation (California Articulation Number)
Subtotal
CHILD DEVELOPMENT
State Preschool
Facilities Renovation and Repair
Child Care Tax Bailout to Community College Districts
Subtotal
Total State Revenue
$
Program Revenues
Accounts
Deferred
Receivable
Revenue
Received
855,588
442,995
280,298
72,688
270,180
40,333
369,700
400,000
210,000
7,383
172,351
612,312
50,000
799,456
17,723
47,967
34,804
100,818
183,194
553,622
35,383
70,796
316,897
71,548
4,000
6,020,036
$
$
609,113
3,334
$
26,377
7,001
519
1,725,356
246,475
439,661
280,298
53,817
195,631
40,333
164,461
38,910
69,809
70,083
163,772
576,978
232
737,390
5,591
4,868
46,780
78,026
147,935
543,579
73,033
116,056
290,520
64,547
3,481
4,452,266
1,725,356
518,759
4,625
72,517
595,901
5,048,167
18,871
74,549
205,239
361,090
140,191
62,700
8,579
35,334
49,768
62,066
12,132
43,099
11,976
22,792
35,259
10,043
37,650
45,260
157,586
518,759
4,625
$
72,517
591,276
6,611,312
$
4,625
162,211
$
See the accompanying notes to the supplementary information.
-50-
Program
Expenditures
Total Revenue
$
$
$
246,475
439,661
280,298
53,817
195,631
40,333
164,461
38,910
69,809
70,083
163,772
576,978
232
737,390
5,591
4,868
46,780
78,026
147,935
543,579
73,033
116,056
290,520
64,547
3,481
4,452,266
518,759
4,625
72,517
595,901
5,048,167
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF WORKLOAD MEASURES FOR STATE GENERAL APPORTIONMENT
ANNUAL (ACTUAL) ATTENDANCE
For the Fiscal Year Ended June 30, 2009
Revised
Reported
Data
Categories
A. Summer Intersession (Summer 2008 only)
1
1. Noncredit
2. Credit
B. Summer Intersession (Summer 2009 - Prior to July 1, 2009)
1
1. Noncredit
2. Credit
C. Primary Terms (Exclusive of Summer Intersession)
1. Census Procedure Courses
(a) Weekly Census Contact Hours
(b) Daily Census Contact Hours
2. Actual Hours of Attendance Procedure Courses
1
(a) Noncredit
(b) Credit
3. Independent Study/Work Experience
(a) Weekly Census Contact Hours
(b) Daily Census Contact Hours
(c) Noncredit Independent Study/Distance
Education Courses
D. Total FTES
Audit
Adjustments
1.17
761.49
1.17
761.49
42.75
42.75
5,033.81
272.74
5,033.81
272.74
19.81
1,187.45
19.81
1,187.45
256.58
48.26
-
256.58
48.26
-
7,624.06
Supplemental Information (subset of above information)
E. In-Service Training Courses (FTES)
745.96
H. Basic Skills courses and Immigrant Education
1
(a) Noncredit
(b) Credit
N/A
328.23
CCFS 320 Addendum
CDCP Noncredit FTES
N/A
Centers FTES
1
(a) Noncredit
(b) Credit
N/A
405.05
1
Including Career Development and College Preparation (CDCP) FTES
N/A - Workload measure is not applicable
See the accompanying notes to the supplementary information.
-51-
Audited
Data
-
7,624.06
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET
REPORT WITH AUDITED FUND BALANCES
For the Fiscal Year Ended June 30, 2009
The audit resulted in no adjustments to the fund balances reported on the June 30, 2009 Annual
Financial and Budget Report (CCFS-311) based upon governmental accounting principles.
Additional entries were made to comply with the GASB 34/35 reporting requirements. These
entries are not considered audit adjustments for purposes of this reconciliation.
See the accompanying notes to the supplementary information.
-52-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINANCIAL TRENDS AND ANALYSIS
For the Fiscal Year Ended June 30,
(Budget) 2010
Amount
%
2009
Amount
%
13,629
15,217,146
22,603,328
-
0.04
40.87
60.71
101.62
2008
Amount
%
12,464
14,861,596
21,783,173
743
0.03
40.82
59.82
0.00
36,657,976
100.67
UNRESTRICTED GENERAL FUND:
Revenue
Federal
State
County and Local
Other Financing sources
$
Total Revenue
Expenditures
Academic Salaries
Classified Salaries
Employee Benefits
Supplies and Materials
Other Operating Expenses and Services
Capital Outlay
Other Uses
Total Expenditures
12,000
18,645,395
14,149,312
-
0.03
53.92
40.92
-
32,806,707
94.87
37,834,103
12,953,829
6,526,757
6,868,045
494,565
8,060,814
188,500
(513,603)
37.46
18.87
19.86
1.43
23.31
0.55
(1.48)
13,700,149
7,249,762
7,328,482
346,252
8,881,502
111,236
(386,093)
34,578,907
$
100.00
37,231,290
$
36.80
19.47
19.68
0.93
23.86
0.30
(1.04)
13,328,254
7,433,292
7,165,075
495,968
8,001,335
486,930
(498,550)
100.00
36,412,304
Restatement
Change in Fund Balance
$
(1,772,200)
(5.13)
$
602,813
1.62
$
Ending Fund Balance
$
1,777,319
5.14
$
3,549,519
9.53
$
Full-Time Equivalent Students (Factored)
Total Long-Term Debt
(2.51)
(667,792)
(1.84)
2,946,706
7,624
6,586
$ 82,407,011
$ 83,994,545
$ 73,883,569
IMPORTANT NOTES:
The California Community College Chancellor's Office has provided guidelines that recommend an ending fund balance
of 3% of expenditures as a minimum, with a prudent ending fund balance being 5% of expenditures.
All percentages are of total expenditures.
The 2010 Budget was adopted by the Board of Trusteess on October 20, 2009.
See the accompanying notes to the supplementary information.
-53-
100.00
(913,464)
7,474
Full-time Equivalent Students (FTES) includes resident and nonresident factored FTES.
36.61
20.41
19.68
1.36
21.97
1.34
(1.37)
8.09
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2009
NOTE 1 - PURPOSE OF SCHEDULES:
A.
Schedules of Expenditures of Federal Awards and State Financial Assistance
The audit of the Hartnell Community College District for the year ended June 30,
2009 was conducted in accordance with OMB Circular A-133, which requires a
disclosure of the financial activities of all federally funded programs. To comply
with A-133 and state requirements, the Schedule of Expenditures of Federal
Awards and the Schedule of State Financial Assistance was prepared for the
Hartnell Community College District on the modified accrual basis of accounting.
Subrecipients
Of the Federal expenditures presented in the Schedule of Federal Awards, the
District provided Federal awards to subrecipients as follows:
B.
Federal Grantor/Pass-Through
Grantor/Program
CFDA
Number
U.S. Department of Education
GEAR-UP - Salinas Union High School District
Title V - Strengthening Institutions - Gavilan College
84.334A
84.031S
Amount Provided
to Subrecipients
$
594,210
337,779
$
931,989
Schedule of Workload Measures for State General Apportionment
The Schedule of Workload Measures for State General Apportionment represents
the basis of apportionment of the Hartnell Community College District's annual
source of funding.
C.
Reconciliation of Annual Financial and Budget Report with Audited Fund Balances
This schedule reports any audit adjustments made to the fund balances of all funds
as reported on the Form CCFS-311.
D.
Schedule of General Fund Financial Trends and Analysis
This report is prepared to show financial trends of the Unrestricted General Fund
over the past two fiscal years as well as the current year budget. This schedule is
intended to identify if the District faces potential fiscal problems and if they have
met the recommended available reserve percentages.
-54-
DRAFT for Discussion Purposes Only
OTHER INDEPENDENT AUDITORS’ REPORTS
DRAFT for Discussion Purposes Only
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
The Board of Trustees
Hartnell Community College District
411 Central Avenue
Salinas, California 93901
We have audited the basic financial statements of Hartnell Community College District (the District) as of
and for the year ended June 30, 2009 which collectively comprise the District’s basic financial statements,
and have issued our report thereon dated November 20, 2009. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Hartnell Community College District’s internal
control over financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the District’s internal control over financial reporting. Accordingly, we do not express an
opinion on the effectiveness of the District’s internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in internal control over financial
reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we
identified certain deficiency in internal control over financial reporting that we consider to be a significant
deficiency.
-55-
DRAFT for Discussion Purposes Only
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
A control deficiency 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 misstatements
on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,
that adversely affect the District’s ability to initiate, authorize, record, process, or report financial data
reliably in accordance with generally accepted accounting principles such that there is more than a remote
likelihood that a misstatement of the District’s financial statements that is more than inconsequential will
not be prevented or detected by the District’s internal control. We consider the deficiency described in the
accompanying schedule of findings and questioned costs as item 09-1 to be a significant deficiency in
internal control over financial reporting.
A material weakness is a significant deficiency, or a combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be prevented
or detected by the District’s internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies and, accordingly, would not necessarily disclose all significant
deficiencies that are also considered to be material weaknesses. However, we do not believe the significant
deficiency described above to be a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Hartnell Community College 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 audit and, accordingly, we do not express
such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards and which are described in the
accompanying schedule of findings and questioned costs as items 09-2 and 09-3.
Hartnell Community College 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 them.
-56-
DRAFT for Discussion Purposes Only
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
This report is intended solely for the information and use of management, the audit committee, the Board,
the California Department of Finance, the State Chancellor’s Office and federal awarding agencies and
pass-through entities and is not intended to be and should not be used by anyone other than these specified
parties.
VICENTI, LLOYD & STUTZMAN LLP
November 20, 2009
-57-
DRAFT for Discussion Purposes Only
REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND ON
INTERNAL CONTROL OVER COMPLIANCE IN
ACCORDANCE WITH OMB CIRCULAR A-133
The Board of Trustees
Hartnell Community College District
411 Central Avenue
Salinas, California 93901
Compliance
We have audited the compliance of Hartnell Community College District (the District) with the types of
compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of its major federal programs for the year ended
June 30, 2009. The District’s major federal programs are identified in the summary of auditor’s results
section of the accompanying schedule of findings and questioned costs. Compliance with the requirements
of laws, regulations, contracts and grants applicable to each of its major federal programs is the
responsibility of the District’s management. Our responsibility is to express an opinion on the District’s
compliance based on our audit.
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
States, 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 considered
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.
-58-
DRAFT for Discussion Purposes Only
REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND ON
INTERNAL CONTROL OVER COMPLIANCE IN
ACCORDANCE WITH OMB CIRCULAR A-133
In our opinion, the District complied, in all material respects, with the requirements referred to above that
are applicable to each of its major federal programs for the year ended June 30, 2009. However, the results
of our auditing procedures disclosed instances of noncompliance with those requirements, which are
required to be reported in accordance with OMB Circular A-133 and which are described in the
accompanying schedule of findings and questioned costs as items 09-4 through 09-6.
Internal Control Over Compliance
The management of the District is responsible for establishing and maintaining effective internal control
over compliance with requirements of laws, regulations, contracts and grants applicable to federal
programs. In planning and performing our audit, we considered the District’s internal control over
compliance with requirements that could have a direct and material effect on a major federal program in
order to determine our auditing procedures for the purpose of expressing our opinion on compliance, 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.
Our consideration of internal control over compliance was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in the entity’s internal control that
might be significant deficiencies or material weaknesses as defined below. However, as discussed below,
we identified certain deficiencies in internal control over compliance that we consider to be significant
deficiencies.
A control deficiency in an entity’s internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program
on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,
that adversely affects the entity’s ability to administer a federal program such that there is more than a
remote likelihood that noncompliance with a type of compliance requirement of a federal program that is
more than inconsequential will not be prevented or detected by the entity’s internal control. We consider
the deficiencies in internal control over compliance described in the accompanying schedule of findings
and questioned costs as items 09-4 through 09-6 to be significant deficiencies.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that material noncompliance with a type of compliance requirement of a
federal program will not be prevented or detected by the entity’s internal control. However, we believe
none of the significant deficiencies described above is a material weakness.
-59-
DRAFT for Discussion Purposes Only
REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND ON
INTERNAL CONTROL OVER COMPLIANCE IN
ACCORDANCE WITH OMB CIRCULAR A-133
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 them.
This report is intended solely for the information and use of management, the audit committee, the Board,
the California Department of Finance, the State Chancellor’s Office and federal awarding agencies and
pass-through entities and is not intended to be and should not be used by anyone other than these specified
parties.
VICENTI, LLOYD & STUTZMAN LLP
November 20, 2009
-60-
DRAFT for Discussion Purposes Only
REPORT ON STATE COMPLIANCE
The Board of Trustees
Hartnell Community College District
411 Central Avenue
Salinas, California 93901
We have audited the basic financial statements of Hartnell Community College District, as of and for the
year ended June 30, 2009, and have issued our report thereon dated November 20, 2009.
Our audit was made in accordance with auditing standards generally accepted in the United States of
America, and the standards for financial and compliance audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. An audit includes examining, on a test
basis, evidence about the District’s compliance with those requirements and performing such other
procedures as we considered 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.
In connection with our audit referred to above, we selected and tested transactions and records to determine
the District’s compliance with the following state laws and regulations in accordance with the Chancellor’s
Office’s California Community Colleges Contracted District Audit Manual (CDAM). Management is
responsible for the District’s compliance with those requirements. Our responsibility is to express an
opinion on the District’s compliance based on our examination:
−
Whether the District's salaries of classroom instructors equal or exceed 50 percent of the
District's current expense of education in accordance with Section 84362 of the Education
Code.
−
Whether the District has the appropriate documentation to support the FTES, if any, that are
claimed for instructional service agreements/contracts.
−
Whether the District has the ability to support timely accurate and complete information for
workload measures used in the calculation of State General Apportionment.
-61-
DRAFT for Discussion Purposes Only
REPORT ON STATE COMPLIANCE
−
Whether the District has acted to ensure that the residency of each student is properly
classified and that only the attendance of California residents is claimed for apportionment
purposes.
−
Whether the District claimed for apportionment purposes only the attendance of students
actively enrolled in a course section as of the census date.
−
Whether District has complied with all requirements necessary to claim FTES for the
attendance of concurrently enrolled K-12 pupils.
−
Whether the District had local funds to support at least 75 percent of the credit matriculation
activities and that all matriculation expenditures are consistent with the District's State
approved matriculation plan.
−
Whether the Gann Limit Calculation was properly calculated and supported by adequate
documentation.
−
Whether the District is reporting the total amount that students should have paid for
enrollment fees for the purpose of determining the District’s share of annual apportionment.
−
Whether the District expended CalWORKS program State and TANF funds to provide
specialized student support services, curriculum development, or instruction to eligible
CalWORKS students.
−
Whether the District spent an amount equal to or greater than the amount provided by the
State for scheduled maintenance and special repairs. Funds provided by the State must be to
supplement, not supplant, District scheduled maintenance funds. The amount expended for
plant maintenance and operations during the base year of 1995-96 was $1,998,725.
−
Whether all District courses that qualify for State apportionment are open to enrollment by
the general public unless specifically exempted by statute.
−
Whether the District has adopted policies or regulations regarding the authority of the
District to require students to provide various types of instructional materials and whether
the District has advised students of the exemptions from payment of health fees and
established a process to ensure that students may claim the exemptions.
In our opinion, except for Findings 09-2 and 09-3 described in the accompanying schedule of findings and
questioned costs, Hartnell Community College District complied with the compliance requirements for the
state programs listed and tested above. Nothing came to our attention as a result of the aforementioned
procedures to indicate that Hartnell Community College District had not complied with the terms and
conditions of state assisted educational programs not selected for testing.
-62-
DRAFT for Discussion Purposes Only
REPORT ON STATE COMPLIANCE
Our examination of compliance made for the purposes set forth in the preceding paragraph of this report
would not necessarily disclose all instances of noncompliance.
The Hartnell Community College District’s (the District) response to the findings identified in our audit is
described in the accompanying schedule of findings and questioned costs. We did not audit the District’s
response and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of management, the audit committee, the Board,
the California Department of Finance, the State Chancellor’s Office and federal awarding agencies and
pass-through entities and is not intended to be and should not be used by anyone other than these specified
parties.
VICENTI, LLOYD & STUTZMAN LLP
November 20, 2009
-63-
DRAFT for Discussion Purposes Only
FINDINGS AND RECOMMENDATIONS
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SUMMARY OF AUDITOR RESULTS
June 30, 2009
Financial Statements
Type of auditor’s report issued:
Unqualified
Internal control over financial reporting:
Material weakness(es) identified?
Significant deficiency(ies) identified not considered
to be material weaknesses?
Yes
X
Noncompliance material to financial statements noted?
X
No
Yes
None reported
Yes
X
No
Yes
X
No
Federal Awards
Internal control over major programs:
Material weakness(es) identified?
Significant deficiency(ies) identified not considered
to be material weaknesses?
Type of auditor’s report issued on compliance for
major programs:
X
Yes
None reported
Unqualified
Any audit findings disclosed that are required to be
Reported in accordance with Circular A-133,
Section .510(a)
X
Yes
No
Identification of major programs tested
CFDA Number(s)
Name of Federal Program or Cluster
84.063, 84.375, 84.033, 84.007
84.031C
84.031S
Financial Aid Cluster
College Cost Reduction and Access Act – Math and Science
Title V – Strengthening Institutions
Dollar threshold used to distinguish between Type A
and Type B programs:
Auditee qualified as low-risk auditee?
$
320,366
Yes
-64-
X
No
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2009
FINDING 09-1 – INTERNAL CONTROL
Original Finding No. 08-3
Finding: During our evaluation of internal control we noted the following deficiencies:
•
Cash Receipt Procedures: Proper controls over cash/checks include mail containing
cash/checks being opened at a central location and a listing of the items received
prepared. During our evaluation of internal controls we noted improvement over the prior
year. The District currently receives mail containing cash/checks at a central location.
However, it was noted that a listing of the items received is prepared only as time allows.
The listing does not indicate a deposit date to allow for the daily receipts to be reconciled
to deposits per the bank statement.
•
Bank Reconciliation: Proper controls over revolving cash funds include the performance
of timely reconciliations to the imprest amount. During our evaluation of internal
controls it was noted that a reconciliation of the revolving cash imprest amount is not
performed consistently.
Recommendation: We recommend the following changes to improve the internal control
procedures:
•
Cash Receipts Procedures: The District should evaluate the cash receipt process and
consider implementing the preparation of a listing as the cash/checks are opened. This
listing should include documentation, such as deposit date, that can be used to verify
amounts have been properly deposited while preparing the reconciliation to the bank
statement.
•
Bank Reconciliations: The District should ensure that reconciliations of the revolving
cash imprest amount are being performed and reviewed.
District Response:
Cash Receipts Procedures: The District has implemented cash (check) receipts procedure. All
checks arriving in the District mailroom are logged in and identified by payee, amount and date
received in mailroom. A photo copy of the check is also included in the log. The Business
Office is currently determining the best option in also recording deposit date in the log.
Bank Reconciliations: The reconciliation of the revolving cash imprest funds have been
reconciled over the past year, but not in a consistent manner. The Controller has recently
implemented a monthly reconciliation of the imprest funds. Documentation of the monthly
reconciliation will be maintained for future review.
-65-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2009
FINDING 09-2 – CALIFORNIA WORK OPPORTUNITY AND RESPONSIBILITY
TO KIDS (CalWORKs) STATE FUNDS AND CalWORKS FEDERAL
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES FUNDS
Original Finding: 07-13
Finding: The CalWORKs handbook stipulates the following: “The District’s CalWORKs
program must have a system/process in place for case management to track a student’s
continuing eligibly for program services, progress made in achieving their educational goals and
tracking the services provided to support the student.” It further states, “The District’s
CalWORKs program must have a process for tracking the expenditure of CalWORKs funds to
ensure expenditures comply with legal requirements.” In our sample of 17 CalWORKs
recipients tested for eligibility requirements, we noted 11 recipients who were receiving
CalWORKs services who did not have the proper eligibility documentation through the County
Welfare Department for each academic term served. Additionally, during our testing of
expenditures we noted three out of 19 expenditures tested had exceptions to these guidelines.
Recommendation: The District should evaluate the procedures for eligibility verification to
ensure that all students have the proper documentation from the County Welfare Department for
each academic term the student participates in the program. Services provided through other
college departments, such as the Child Care Center and other departments, must be coordinated
with the CalWORKs program office and Monterey County to verify student's ongoing eligibility
for services, academic progress, and to monitor program expenses that are directly attributable to
support for the identified CalWORKs eligible recipients. Additionally, the District should
review all expenditures to ensure there are no additional ineligible student expenditures charged
to the CalWORKs program. The District should transfer all expenditures for ineligible students
or items discovered out of the CalWORKs program.
District Response: Eligibility – The District has evaluated the procedures for eligibility
verification to ensure that all students have the proper documentation from County Welfare
Department for each academic term the student participates in the program. In coordination with
the Director of CalWORKS program, the Controller and Grants Manager will, on a semi-annual
basis, review a selected sample of student files to determine if procedures are being followed.
Expenditures – The District will review current established procedures for program
expenditures. Review will be made to ensure there are no additional ineligible student
expenditures charged to the Cal Works program. Per auditor’s assistance, the District will
determine total expenditures that were made during the fiscal year and will transfer expenditures
out of the CalWORKS program.
-66-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2009
FINDING 09-3 – SALARIES OF CLASSROOM INSTRUCTORS – 50 PERCENT LAW
Finding: During our audit of Salaries of Classroom Instructors law, the following deficiencies
were noted:
•
Lottery Account: In accordance with Government Code, Section 8880.5(k), the District
should have established a separate account/subfund to account for the receipt and
expenditure of unrestricted lottery funds to determine that lottery funds have been
properly excluded from the 50 Percent Law calculation. During our review of the 50
Percent Law calculation, we noted that the District does not maintain a separate account
or subfund for unrestricted lottery receipts and expenditures.
•
Employee Classification: Employees whose salaries are classified as instructional aides
should have job responsibilities that include assisting an instructor in a classroom setting.
During our testing of the 50 Percent Law, it was noted that two out of ten instructional
aides selected for testing were found to have job descriptions which were not
instructional in nature. These positions were a Telephone Technician and a LRC Student
Worker.
Recommendation: We recommend the following changes to be compliant with the 50 Percent
Law:
•
Lottery Account: The District should establish a separate account for accumulating
expenditures and recording receipts which meet Lottery requirements and which the
District plans to use for exclusion in the 50 Percent Law.
•
Employee Classification: The District should review the employees classified as
instructional aides and determine if job responsibilities are instructional in nature. If
additional employees are discovered to have job responsibilities that are non-instructional
in nature they should be reclassified to a non-instructional account code.
District Response: Lottery Account – The District will set up the appropriate accounts to
comply with Government Code, Section 8880.5(k). Receipts and expenditures will be identified
separately from other general fund accounts.
Employee Classification – The District will review all current instructional aid job allocations
to determine all required documentation is complete. Any changes will be properly documented
in employee file. The Controller will review employee payroll files during the year to determine
if appropriate documentation has been inserted in employee file. Controller will work with
Human Resource Director to determine if job responsibilities are instructional in nature.
-67-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FEDERAL AWARDS
June 30, 2009
FINDING 09-4 – ALLOWABLE COSTS –
COMPENSATION FOR PERSONAL SERVICES
Original Finding Number 07-7
CFDA Title and Number: CTE (CFDA #84.048 and 84.243)
Federal Award Number: 07-C01-021
Name of Federal Agency: U.S. Department of Education
Name of Pass-through Agency: California Community College Chancellor’s Office
Compliance Requirement: B. Allowable Costs/Cost Principals
Criteria: Procedures and controls over how the District ensures compliance with time
accounting requirements were found to be ineffective. Although, we found centralized
monitoring has been established for the program noted above, we found that the required
certifications were not prepared and collected in a timely manner to document compliance.
Condition: OMB Circular A-21, Cost Principles for Educational Institutions, Part J, General
Provisions for Selected Items of Cost, No. 10, Compensation for Personal Services. (1)(e) At
least annually, a statement will be signed by the employee, principal investigator, or responsible
official(s) using suitable means of verification that the work was performed, stating that salaries
and wages charged to sponsored agreements as direct charges and to indirect cost are reasonable
in relation to work performed.
Effect: Inadequate monitoring of program compliance requirements leaves the District
vulnerable to noncompliance that could result in loss of funding and disallowed costs.
Recommendation: We recommend that the District review procedures over time certification
monitoring to ensure the appropriate documentation is collected in a timely manner and
maintained as support for the employees’ effort in the program.
Questioned Cost: Includes salaries and benefits for all multi-funded permanent professional or
professorial staff for CTE of approximately $10,600.
District Response: The District has implemented time reporting procedures during the fiscal
year. The collection of time reports will be made monthly. The Grants Manager is responsible
for collecting and maintaining these reports and/or associated financial reports and compares the
time reporting worksheets to actual payroll expense to ensure that the federally funded employee
is being compensated by grant funds according to the time reports. Additionally, the level of
effort for personnel designated as “key personnel” on the Grant Award Notification (GAN) will
be monitored along with the time reports and the actual expenditures to ensure alignment.
-68-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FEDERAL AWARDS
June 30, 2009
FINDING 09-5 – PROCUREMENT, SUSPENSION AND DEBARMENT –
SUSPENSION OR DEBARMENT CERTIFICATIONS FOR CONTRACTS
OVER $25,000
Original Finding: 07-8
CFDA Title and Number: GEAR UP (GEAR UP East Salinas) (CFDA #84.334A)
Federal Award Number: P334A060158-07
Name of Federal Agency: U.S. Department of Education
Name of Pass-through Agency: Not applicable
Compliance Requirement: I. Procurement and Suspension and Debarment
Criteria: Title 34 – Education, Part 80 – Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments, Sub-part C, Pre-Award Requirements,
Section 80.35 Sub awards to debarred and suspended parties:
•
Grantees and sub grantees must not make any award or permit any award (sub grant or
contract) at any tier to any party, which is debarred or suspended or is otherwise
excluded from or ineligible for participation in Federal assistance programs under
Executive Order 12549, "Debarment and Suspension."
OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals,
and Other Non-Profit Organizations, Sub-Part C, Pre-Award Requirements, Section .33
Debarment and suspension:
•
Federal awarding agencies and recipients shall comply with the nonprocurement
debarment and suspension common rule implementing E.O.s 12549 and 12689,
"Debarment and Suspension." This common rule restricts sub awards and contracts with
certain parties that are debarred, suspended, or otherwise excluded from or ineligible for
participation in Federal assistance programs or activities.
Condition: Internal controls, including policies and procedures, necessary to ensure compliance
with debarment requirements are not in place. Further, required debarment certifications or other
verification for each grant subrecipient were not obtained or performed per the requirements of
the Federal regulations. This must be done not only on all vendors over $25,000, but also must
be done for all subrecipients of Federal programs whose spending is over $25,000.
-69-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FEDERAL AWARDS
June 30, 2009
FINDING 09-5 – PROCUREMENT, SUSPENSION AND DEBARMENT –
SUSPENSION OR DEBARMENT CERTIFICATIONS FOR CONTRACTS
OVER $25,000
(continued)
Effect: Grant requirements specify that the certifications must be obtained prior to entering into
an agreement to provide the sub award.
Recommendation: We recommend the District review its policies and procedures to verify all
vendors who are providing services to federally funded programs in excess of $25,000 are not
suspended or debarred or otherwise excluded. This verification may be accomplished by
checking the Excluded Parties List System (EPLS) maintained by the General Services
Administration (GSA), collecting a certification from the entity, or adding a clause or condition
to the covered transaction with that entity. The District should also update contract templates for
all contract types that exceed $25,000 to avoid a violation of the Executive Order 12549.
Questioned Cost: None.
District Response: The business office performed an audit of all FY 08-09 Hartnell contracts
against the Excluded Parties List System at June 2009. No exceptions were found. Future EPLS
audits of contracts over $25,000 will be performed by the business office prior to the contract
being presented to the Board of Trustees and subsequently, prior to full execution of the contract.
Contract language has been added to the Hartnell Community College District contract template
outlining the Debarment, Suspension, and other Representation language.
-70-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FEDERAL AWARDS
June 30, 2009
FINDING 09-6 – PHYSICAL INVENTORY OF CAPITAL ASSETS
Original Finding No. 08-10
CFDA Title and Number: CTE – Title I, Part C, CFDA #84.048 and College Cost Reduction
and Access Act – Math & Science, CFDA #84.031C
Federal Award Number: 07-C01-021 and P031C080096
Name of Federal Agency: U.S. Department of Education
Name of Pass-through Agency: CTE pass-through: California Community College
Chancellor’s Office
Compliance Requirement: F. Equipment and Real Property Management
Criteria: OMB Circular A-110, Uniform Administrative Requirements for Grants and
Agreements Section 34(f)(3), Property Management.
Condition: Through inquiry, we determined that a physical inventory of equipment had not
been performed in more than two years. This appears to be a systemic organizational issue and
would apply to all grants subject to compliance requirement F. Equipment and Real Property
Management.
Effect: The existence and location of equipment purchased with Federal funding is in question.
Recommendation: The District should conduct a physical inventory of all equipment purchased
with Federal funding as soon as possible. In the future, this process should be repeated every
two years in order to be in compliance with Federal regulations.
Questioned Cost: For the asset audited in the above programs the cost is $8,559 and 9,165,
respectively.
District Response: The District will conduct a physical inventory of all equipment purchased
with Federal funds exceeding $5,000. Business office has established procedures in accounting
for all capital assets. With the assistance of Grant Coordinators and Grant Manager, the
Controller has tagged two recently purchased pieces of equipment. The tags contain information
required by Federal grant agreements.
-71-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-1 – JOURNAL ENTRY PROCEDURES
Finding: During our evaluation of journal entries, we noted that the District does not have a
process to review journal entries, either prior to or after entry into the general ledger system.
Employees who prepare journal entries directly post those without prior approval.
Recommendation: The District should evaluate journal entry preparation and recording
procedures and consider establishing a system whereby journal entries are prepared, reviewed
and authorized, and recorded by separate employees. At a minimum, journal entries should be
reviewed and authorized by an appropriate level employee other than the individual recording
the entry. Evidence of the review process should be available for audit.
Current Status: Implemented.
FINDING 08-2 – CONCURRENT ENROLLMENT
Finding: Per Education Code Section 76002(a)(4) a community college district may not receive
state apportionment for special part-time and full-time students enrolled in physical education
courses in excess of five percent of the district’s total reported FTES of special part-time and
full-time students. During testing it was noted that procedures are not in place to calculate and
monitor compliance. Reports are not maintained and were therefore not available to verify
compliance at the census date. It is our understanding that the District is currently gathering the
data to verify compliance.
Recommendation: The District should develop procedures to monitor the FTES generated for
physical education courses in excess of the five percent maximum. Documentation of this
evaluation process and of compliance as of census dates should be available for audit. FTES
generated for concurrently enrolled students in PE courses found to be in excess of the five
percent rule should be excluded from the CCFS-320 report.
Current Status: Implemented.
-72-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-3 – INTERNAL CONTROL
Finding: During our evaluation of internal control we noted the following deficiencies:
•
Cash Receipt Procedures: We noted that mail containing cash/checks is opened at
numerous locations and no listing of cash/checks is prepared and provided with the
deposits. Proper control over the cash receipt process includes opening of mail
containing cash/checks at a central location and the preparation of a listing of all receipts.
•
Bank Reconciliation: We noted that the bank reconciliations for the months of July 2007
through March 2008 were not completed until May 2008. Proper control over cash
relating to bank accounts includes the performance of timely bank reconciliations. This
will mitigate the risk of discrepancies and inconsistencies not being discovered and
investigated in a timely manner.
•
Authorized Signers: The signature, in the form of a signature plate, of the former Vice
President of Administrative Services, has continued to be used. In addition, the former
Vice President is still listed as an authorized signer on several bank accounts. Proper
control over cash related to bank accounts includes the prompt removal of individuals no
longer authorized on the accounts.
Recommendation: We recommend the following changes to improve the internal control
procedures:
•
Cash Receipts Procedures: The District should evaluate the mail delivery system and
consider having cash/checks received by one or two employees who endorse the checks
and prepare a listing of cash/checks. At a minimum, a listing should accompany the
deposit. In the event that cash/checks are ultimately not deposited, a listing of items
received would provide a record to facilitate further inquiry or investigation.
•
Bank Reconciliations: The District should ensure that bank reconciliations are performed
in a reasonable time frame, not to exceed 30 days from the date the statement is received
from the bank.
•
Authorized Signers: The District should ensure that, upon termination of employment,
prompt notification is made to the bank to remove the employee from the authorized
signer list.
Current Status: Improvement noted. See current year finding 09-1.
-73-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-4 – CONFLICT OF INTEREST
Finding: We obtained the listing of Economic Interest Designees, District officials and
employees with executive responsibilities, in order to determine if the District was in compliance
with the Political Reform Act requirement of public disclosure of personal assets and income via
the Form 700, Statement of Economic Interest. The results of our testing in September, 2008
indicated that 7 (including 3 board members) of 36 individuals listed had not completed and
returned their Form 700 for the 2007-08 fiscal year.
Recommendation: We recommend the organization ensure that all significant persons within
the District complete a conflict of interest statement annually. The District should determine
who is responsible for the collection and maintenance of this information. In addition, we
recommend that the organization evaluate and document those transactions or arrangements
involving significant persons to support the decision that the arrangement is in the District’s best
interest.
Current Status: Implemented.
-74-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-5 – CALIFORNIA WORK OPPORTUNITY AND RESPONSIBILITY
TO KIDS (CalWORKs) STATE FUNDS AND CALWORKS FEDERAL
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES FUNDS
Original Finding: 07-13
Finding: The CalWORKs handbook stipulates the following: “The District’s CalWORKs
program must have a system/process in place for case management to track a student’s
continuing eligibly for program services, progress made in achieving their educational goals and
tracking the services provided to support the student.” It further states, “The District’s
CalWORKs program must have a process for tracking the expenditure of CalWORKs funds to
ensure expenditures comply with legal requirements.” In our sample of 10 CalWORKs
recipients tested for eligibility requirements, we noted two recipients who were receiving
CalWORKs services who did not have the proper eligibility documentation through the County
Welfare Department for each academic term served. In addition, we were unable to determine if
eligibility was verified by the District at the beginning of each term for all students tested. The
District does not have a consistent mechanism for tracking student eligibility and for all
CalWORKs and TANF-funded services. Additionally, during our testing of expenditures we
noted twelve out of twenty expenditures tested had exceptions to these guidelines. Eleven of the
twelve expenditures were for child care services and work-study to students who were not
eligible CalWORKs students. One of the twelve expenditures was for a piece of furniture, which
is not an allowable expenditure per the CalWORKs handbook. The Director of CalWORKs
stated that they were given approval by the Chancellor’s Office, but no supporting
documentation of said communication was retained and available.
Recommendation: We recommend the District strengthen and develop an independent internal
tracking of student eligibility for all CalWORKs and TANF-funded services. Services provided
through other college departments, such as the Child Care Center and other departments, must be
coordinated with the CalWORKs program office and Monterey County to verify student's
ongoing eligibility for services, academic progress, and to monitor program expenses that are
directly attributable to support for the identified CalWORKs eligible recipients. Additionally,
the District should review all expenditures to ensure there are no additional ineligible student
expenditures charged to the CalWORKs program. The District should transfer all expenditures
for ineligible students discovered out of the CalWORKs program.
Current Status: Partially implemented. See current year finding 09-2.
-75-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-6 – STANDARDS OF SCHOLARSHIP
Original Finding: 07-14
Finding: During the testing of State Compliance under the "Standards of Scholarship", per
California Code of Regulations (CCR) Title 5, Sections 55756.5 and 56014, the following
elements were missing as outlined below:
The college catalog does not have a publication of adopted procedures or regulations for:
"Limitations on remedial course work for a community college student stating
that no student shall receive more than 30 semester units (or 45 quarter units) of
credit in remedial coursework". Also, the system currently is not blocked to stop
students from exceeding these 30 semester units.
Recommendation: The District must establish a limit on the amount of remedial coursework a
community college student may take. The District must adopted procedures or regulations for
limitations on remedial coursework for a community college student. The limitations should
identify that no student shall receive more than 30 semester units (or 45 quarter units) of credit in
remedial coursework. The District also must publish the adopted procedures or regulations in the
college catalog under the appropriate heading.
Current Status: Implemented.
-76-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-7 – ALLOWABLE COSTS –
COMPENSATION FOR PERSONAL SERVICES
Original Finding Number 07-7
CFDA Title and Number: GEAR UP (GEAR UP Soledad and GEAR UP East Salinas),
(CFDA #84.334A); Title IV E/Training, (CFDA #93.658); Workability, (CFDA #84.126A);
Migrant Ed-High School Equivalency Program, (CFDA #84.141N); and VTEA, (CFDA #84.048
and 84.243)
Federal Award Number: P334A020101-07 and P334A060158-07; P0315070022;
51600708320218; S141A060007-07A; and 07-C01-021 (respectively)
Name of Federal Agency: U.S. Department of Education and Department of Health and
Human Services
Name of Pass-through Agency: Title IV E/Training, Workability and VTEA: pass-through:
California Community College Chancellor’s Office
Compliance Requirement: B. Allowable Costs/Cost Principals
Criteria: Procedures and controls over how the District ensures compliance with time
accounting requirements were found to be ineffective. We found that no centralized monitoring
is in place. This appears to leave compliance up to each program administrator. The compliance
requirement has been the subject of re-occurring compliance comments. This results from the
District not having a key individual responsible for ensuring uniform application of required
procedures.
Further, in the programs subject to testing, we found that the required certifications were not
prepared, collected, and maintained to document compliance.
Condition: OMB Circular A-21, Cost Principles for Educational Institutions, Part J, General
Provisions for Selected Items of Cost, No. 10, Compensation for Personal Services. (1)(e) At
least annually, a statement will be signed by the employee, principal investigator, or responsible
official(s) using suitable means of verification that the work was performed, stating that salaries
and wages charged to sponsored agreements as direct charges and to indirect cost are reasonable
in relation to work performed.
Effect: Inadequate monitoring of program compliance requirements leaves the District
vulnerable to noncompliance that could result in loss of funding and disallowed costs.
-77-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-7 – ALLOWABLE COSTS –
COMPENSATION FOR PERSONAL SERVICES
(continued)
Recommendation: We recommend that the District centralize this function to support adequate
monitoring of compliance. Further, by centralizing this function, the District will be better able
to disseminate compliance specific information to program directors and provide a key link
necessary to prevent future non-compliance.
Questioned Cost: Includes salaries and benefits for all multi-funded permanent professional or
professional staff of approximately $113,600. (Workability $24,772; Gear-Up $82,843; and
VTEA $6,059). Questioned costs have not been quantified for single funded employees because
we do not believe there is evidence that employees are being charged inappropriately to the
above mentioned programs; however, the District should be aware that if a federal audit was to
occur, funding could be in jeopardy.
Current Status: Improvement noted. See current year finding 09-4.
-78-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-8 – PROCUREMENT, SUSPENSION AND DEBARMENT –
SUSPENSION OR DEBARMENT CERTIFICATIONS FOR CONTRACTS
OVER $25,000
Original Finding: 07-8
CFDA Title and Number: GEAR UP (GEAR UP Soledad and GEAR UP East Salinas),
(CFDA #84.334A)
Federal Award Number: P334A020101-07 and P334A060158-07
Name of Federal Agency: U.S. Department of Education
Name of Pass-through Agency: Not applicable
Compliance Requirement: I. Procurement and Suspension and Debarment
Criteria: Title 34 – Education, Part 80 – Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments – Sub-part C – Pre-Award
Requirements, Section 80.35 Sub awards to debarred and suspended parties:
•
Grantees and sub grantees must not make any award or permit any award (sub grant or
contract) at any tier to any party, which is debarred or suspended or is otherwise
excluded from or ineligible for participation in Federal assistance programs under
Executive Order 12549, "Debarment and Suspension."
OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals,
and Other Non-Profit Organizations, Sub-Part C, Pre-Award Requirements, Section .33
Debarment and suspension:
•
Federal awarding agencies and recipients shall comply with the nonprocurement
debarment and suspension common rule implementing E.O.s 12549 and 12689,
"Debarment and Suspension." This common rule restricts sub awards and contracts with
certain parties that are debarred, suspended, or otherwise excluded from or ineligible for
participation in Federal assistance programs or activities.
Condition: Internal controls including policies and procedures necessary to insure compliance
with debarment requirements are not in place. Further, required debarment certifications for each
grant subrecipient were not obtained per the requirements of the Federal regulations. This
certification must be done not only on all vendors over $25,000, but also must be done for all
subrecipients of Federal programs whose spending is over $25,000.
-79-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-8 – PROCUREMENT, SUSPENSION AND DEBARMENT –
SUSPENSION OR DEBARMENT CERTIFICATIONS FOR CONTRACTS
OVER $25,000
(continued)
Effect: Grant requirements specify that the certifications must be obtained prior to entering into
an agreement to provide the sub award.
Recommendation: We recommend the District review its policies and procedures to verify all
vendors who are providing services to federally funded programs in excess of $25,000 have
verified that the entity is not suspended or debarred or otherwise excluded. This verification may
be accomplished by checking the Excluded Parties List System (EPLS) maintained by the
General Services Administration (GSA), collecting a certification from the entity, or adding a
clause or condition to the covered transaction with that entity. The District should also update
contract templates for all contract types that exceed $25,000 to avoid a violation of the Executive
Order 12549.
Questioned Cost: None.
Current Status: Not implemented. See current year finding 09-5.
-80-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-9 – SUBRECIPIENT MONITORING
Original Finding: 07-9
CFDA Title and Number: GEAR UP Soledad (CFDA #84.334A)
Federal Award Number: P334A020101-07
Name of Federal Agency: U.S. Department of Education
Name of Pass-through Agency: Not applicable
Compliance Requirement: M. Subrecipient Monitoring
Criteria: OMB Circular A-133, Audits of State and Local Governments and Not-for-profit
Organizations, Section 400 (d) Pass-through entity responsibilities.
Condition: During testing compliance requirements for GEAR UP Soledad, we noted the
following deficiencies of noncompliance in regards to site monitoring: It appears Soledad is
receiving Federal funds from Hartnell, but not reporting them as Federal revenue. Therefore, the
site is not being properly monitored as a subrecipient.
Effect: The District must be responsible for accurately communicating requirements,
monitoring compliance, perform monitoring, ensure proper reporting, and follow-up on any
corrective actions that result from audits that the subrecipient undergoes. Non-compliance by
subrecipients can place the District at risk.
Recommendation: Effective documentation includes agreements that include the name of the
award, awarding agency, and Catalog of Federal Domestic Assistance numbers. Clear
identification of applicable Federal compliance requirements, oversight, and follow-up
requirements should be integrated into agreements.
Questioned Cost: None.
Current Status: Implemented.
-81-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2009
FINDING 08-10 – PHYSICAL INVENTORY OF CAPITAL ASSETS
CFDA Title and Number: VTEA – Title I, Part C, (CFDA #84.048)
Federal Award Number: 07-C01-021
Name of Federal Agency: U.S. Department of Education
Name of Pass-through Agency: California Community College Chancellor’s Office
Compliance Requirement: F. Equipment and Real Property Management
Criteria: OMB Circular A-110, Uniform Administrative Requirements for Grants and
Agreements Section 34(f)(3), Property Management
Condition: Through inquiry, we determined that a physical inventory of equipment had not
been performed in more than two years. This appears to be a systemic organizational issue and
would apply to all grants subject to compliance requirement F. Equipment and Real Property
Management.
Effect: The existence and location of equipment purchased with Federal funding is in question.
Recommendation: The District should conduct a physical inventory of all equipment purchased
with Federal funding as soon as possible. In the future, this process should be repeated every
two years in order to be in compliance with Federal regulations.
Questioned Cost: For the asset audited in the above program the cost is $8,559.
Current Status: Not implemented. See current year finding 09-6.
-82-
AGENDA ITEM FOR BOARD MEETING OF: December 1, 2009
Title:
Accept Measure H General Obligation
Bonds Independent Accountants’
Report Performance Audit and
Financial Audit for Fiscal Year Ended
June 30, 2009
Area:
Office of Support Operations
Supplement OSO-7
Prepared by: Alfred Muñoz
Number:
VIII. B.
Status:
Action
Recommendation:
That the Board of Trustees accepts the Measure H General Obligation Bonds Independent
Accountants’ Report Performance Audit and Financial Audit for fiscal year ended June 30,
2009.
Summary:
In November, 2002, voters of the Hartnell community College district approved Bond Measure
H for $131 million bond issue to fund capital improvements. A Performance Audit has be
performed in accordance with Article 13 (A), Section 1 (C) of the California Constitution,
which state: “A requirement that the school district board, community college board, or county
office of education conduct an annual, independent performance audit to ensure that the funds
have been expended only on the specific projects listed.”
The attached Performance Audit and Financial Audit were prepared by District-contracted
independent auditors as part of our annual audit. It was conducted to ensure that expenditures
have been made only on specific projects listed in the bond covenants and that expenditures are
in accordance with the voter-approved bond measure. The Performance Audit and the
Financial Audit were provided to the Bond Oversight Committee on November 17, 2009.
Budget Implications:
None
AGENDA ITEM FOR BOARD MEETING OF:
December 1, 2009
Title:
Number:
Ratify Budget Revisions
Area:
Office of Support Operations
Supplement OSO-2
Prepared by: Alfred Muñoz
VIII. C.
Status:
Action (Roll Call Vote)
Recommendation:
That the Board of Trustees ratifies Budget Revisions for FY 09-10 numbered 8493 to 8506.
Summary:
The adopted budget each year represents the best estimate of revenue and expenditures. As the
year progresses and actual amounts are known, budget changes must be made.
Revisions to the adopted budget are subject to approval by the Board of Trustees. Budget
revisions consist of transfers between major object expenditures or from the appropriations for
contingencies, as well as budgetary increases for the use of funds not included in the original
budget.
All budget entry numbers are assigned automatically assuring a complete sequence accounting.
Numeric breaks on the attached report are due to the exclusion of budget transfers, which do
not require Board approval. The accompanying Budget Journal Entry Detail Report was
produced directly from the accounting software.
Budget Implications:
The Unrestricted General Fund budget remains unchanged.
The Restricted General Fund increased by $38,707.50 due to increased revenue to program.
INFORMATION ITEMS
AGENDA ITEM FOR BOARD MEETING OF:
Title:
Receive Report on Construction Projects
December 1, 2009
Number:
IX. A.
Area:
Facilities and Development
Prepared by: Gary Hughes
Status:
Information
Recommendation:
That the Board of Trustees receives the report on construction projects dated
November 20, 2009.
Summary:
Each month, the Board of Trustees receives a verbal and written report on current design,
planning, and construction projects as funded by Measure H.
CONSTRUCTION UPDATE
AS OF 11/20/2009
CURRENT DESIGN, PLANNING AND CONSTRUCTION PROJECTS
PLANNING PROJECTS

Alisal Campus Master Plan
⇒ The District has begun the planning process for the 142 acres of the Alisal Campus
⇒ The process will include two master plans, (1) for the +/- 42 acre campus and (1) for the
remaining +/- 100 acres
⇒ Once a master plan is complete the EIR process will begin with the City of Salinas
⇒ The land swap with the City of Salinas is currently underway. It is anticipated that this will take
between 18 and 24 month
⇒ The FDA has approached the College about having a permeant facility on the Alisal Campus for
their emergency response trailers. The District is currently working with them to bring a
recommendation forward.

Main Campus Facilities Master Planning Process
⇒ The 5-year Capital Outlay Plan was completed and submitted to the CCCCO on June 29, 2009.
⇒ The 2009-10 IPP for a new Health Sciences & Nursing Building was completed and submitted to
the CCCCO on June 29, 2009.

Science Building FPP
⇒ Lionakis, out of Sacramento, is the Architect of Record for this project, which includes the
preparation of the FPP.
⇒ The kick-off meeting for the FPP took place on 02/19-20
⇒ The stakeholders took a trip to Cal Poly on 03/09 to look at their facilities
⇒ At our second meeting a few general layouts were established and we are working from those
layouts
⇒ The group took its second field trip to look at both San Mateo and San Jose City College’s new
science building
⇒ The last programming meeting was May 8 and all the user groups concerns were addressed
⇒ Lionakis completed the FPP and the Board Approved the document on June 8, 2009 and the FPP
was submitted to the CCCCO on June 29, 2009.
⇒
DESIGN PROJECTS

CAB Building Renovation
⇒ The programming for this project has started
⇒ The RFQ is currently being constructed and is scheduled to be on the street in the next few
weeks
⇒ The schedule is to have plans submitted to DSA by April/May 2010 with construction starting
next spring/winter
Hartnell College ● Facilities Development Office ● 411 Central Ave., Salinas, CA 93901
Phone (831)770-7041 ● Fax (831)770-7040
1
CONSTRUCTION PROJECTS

PE Renovation Project
⇒ Sugimura Finney (SFA) is the Architect of Record for this project
⇒ The plans were submitted to DSA on February 26, 2009
⇒ The project was out to bid on May 19th and the bid opening was on June 23, 2009.
⇒ There was a total of 5 bidders on the project with Perma-Green Hydroseeding (PGH) being the
responsive low bidder at $4,114,400.
⇒ Work started on July 8 and phase I, the new soccer field is scheduled to be completed on August
5, 2009.
⇒ The remainder of the work is scheduled to be completed by February 1, 2010.
⇒ The soccer field has been completed and the first game is scheduled for 09/29/09
⇒ All the fence posts are in and the fencing around the soccer field is being installed
⇒ The baseball field drain system is being installed and rock will be placed in the next few weeks
which will mean that the turf will be ready for installation.
⇒ The tentative start date for the turf in the baseball field is January 4, 2010.

Northeast Landscaping Project
⇒ Bellinger Foster Steinmetz (BFS), out of Monterey, is the Architect of Record for this project
⇒ Monterey Peninsula Engineering is the contractor for the project ($1,223,000)
⇒ They were given notice to proceed on April 20, 2009
⇒ The demo and site balance work has been completed.
⇒ They are currently working the added scope of the atrium and the flat work
⇒ MPE is continuing on the concrete pours and the installation of the sign at the corner of
Homestead and Central
⇒ The project is anticipated to be completed by December 2009

CALL Building
⇒ Minor programming changes are taking place and the first equipment and furniture order was
place in mid-September
⇒ Nursing is currently occupying about a portion of the building.
⇒ The area designated for Student Services is loaded with furniture and the install is scheduled to
start on 11/23

Alisal Campus Center for Applied Technology
⇒ Kasavan Architects is the AOR for the project
⇒ Dilbeck construction is the GC for this project ($19,340,000)
⇒ Construction began on July 14, 2008
⇒ The project will be completed in 2010
⇒ All structural steel has been erected
⇒ Interior metal studs and drywall is currently going up
⇒ The roofing and exterior siding is currently going up
⇒ The site was paved during the week of the 16th and is now completely winterized in anticipation
of the winter
⇒ Check out the webcam on the Measure H website, http://webcam.hartnell.edu/popup.html

Student Center Renovation/Remodel Project
⇒ BFGC is the Architect of Record for this project
⇒ DMC Construction was the low bidder and will be the GC for the project
⇒ Construction started on November 17th and is scheduled to be completed by September 3, 2010
⇒ The new bookstore in Steinbeck Hall is the first scope of work
Hartnell College ● Facilities Development Office ● 411 Central Ave., Salinas, CA 93901
Phone (831)770-7041 ● Fax (831)770-7040
2
⇒
DMC will be performing most of the heavy demo work during the winter break so that the
students are not exposed to he noise and dust which will be created

Pool Renovation
⇒ The Hartnell pool, which is a PE classroom, will be remodeled and is anticipated to start on June
5, 2010 and be completed around August 1, 2010.
⇒ A Myrtha Pool which is a PVC lined pool system and has a fifteen year guarantee on leaks

King City Center Energy Efficiency Roof Project
⇒ As part of the energy efficiency projects throughout the District, the roof on the King City
Center will be upgraded to a new efficient roof.
⇒ The project is currently out to bid and will be completed over the Winter Break.
Hartnell College ● Facilities Development Office ● 411 Central Ave., Salinas, CA 93901
Phone (831)770-7041 ● Fax (831)770-7040
3
AGENDA ITEM FOR BOARD MEETING OF: December 01, 2009
Title:
Number:
Receive and Accept Financial Statements for
Period Ending October 31, 2009
IX. B.
Area:
Status:
Office of Support Operations
Supplement OSO-1
Prepared by: Alfred Muñoz
Information
Recommendation:
That the Board of Trustees receives and accepts the Financial Statements for the period ending
October 31, 2009.
Summary:
Financial Statements of District funds for the period ending October 31, 2009 are attached
for information.
Budget Implications:
None
ADJOURNMENT