PERALTA RECOVERY TEAM
UPDATE
April 21, 2010
2008-09 Financial Closure and Audit
On Thursday, April 15, 2010, at the Audit & Budget Committee meeting, members of
the Audit & Budget Committee and the Recovery Team received an update from the
VTD Auditors regarding the status of the audit report. There was some confusion
regarding the expected timeline for the closure of the 2008-09 audit report and
closure of the 2008-09 financial books.
In the Board update dated April 13, 2010 the Recovery Team communicated the
estimated timeline for the closure of the financial books and completion of the 200809 audit report. Essentially, those timelines have not changed and are consistent with
prior updates on this matter. The dates are also contingent on the recovery effort
going well without any unexpected surprises. As a reminder, the Recovery Team is
hopeful that the financial books for 2008-09 can be closed in May 2010 and that the
audit report completed subsequent to closure of the financial books.
It must be emphasized that the Recovery Team is making every effort to provide the
VTD auditors with all requests and to close the financial books in order to be able to
communicate that effort prior to the June 10th/11th ACCJC Hearing. However, the
timeline is very short and a great deal of work remains. At this point, it is more
important for the closure of the financial books to be accurate as it impacts the
development of the 2010-11 budget. The fact is, PCCD did not adopt a 2009-10
budget in a timely manner, did not submit the State report in a timely manner and did
not close its financial books in a timely manner. We cannot change those facts. What
is most important for the PCCD, is to acknowledge those facts and to correct the
deficiencies going forward.
We will further review this timeline and status at our Recovery Team meeting this
Wednesday and also at the audit report status meeting this Thursday. Regardless of
the ultimate completion, PCCD will be able to communicate to ACCJC progress todate, prior to and at the June ACCJC hearing.
ACCJC Team Visit
Members of the ACCJC Team visited the Peralta Community College District office
this past Monday, April 19, 2010. Team members interviewed individuals
representing the Board, administration, recovery team, auditors, staff and others. The
general focus of the visit centered on three distinct areas;
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Governance/Leadership
Fiscal Stability
Technology /MIS
It was clear that the PCCD has the opportunity to continue its effort in addressing
outstanding issues addressed in previous ACCJC correspondence. It was suggested that
any progress in the three focus areas could be communicated in monthly progress reports
as well as testimony at the June 2010, hearing.
As the Fiscal Adviser, I am recommending to the PCCD Chancellor the following:
GOVERNANCE
Place on the Board agenda, for future Board meetings, the following items for discussion
and potential actions:
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A re-visitation, affirmation, and re-adoption of a Governing Board “Code of
Conduct”. The roles and responsibilities of community college governing boards
are spelled out in the Education Code, in Title 5 and in Board Policy. The Board
of Trustees needs to concur that these responsibilities are essential to effective
trusteeship.
The Board is a corporate body. It governs as a unit, with one voice. This
principle means that individual trustees have authority only when they are acting
as a board. They have no power or authority to act or to direct college employees
or operations. Governing Boards establish policies that provide direction and
guidance to the Chancellor. It is important relative to accreditation that the
Chancellor in concert with the Board of Trustees schedules a training session as
soon as possible on Board leadership and governance as part of the Accreditation
Standard IV.
The Chancellor and Board needs to collectively evaluate the number and focus of
the Board Sub-Committees’ as it relates to Standard IV and Eligibility
Requirement 3. A good measurement to evaluate Board Sub-Committees’ is the
following:
o Does the Committee promote the College in the community?
o Does the Committee advance partnerships with other entities in the
community?
o Does the Committee support the foundation and fundraising effort within
the community?
o Does the Committee refrain from operational and direct intervention into
the day-to-day responsibilities of the CEO?
o Does the Committee refrain from inappropriate influence in decision
making by the CEO?
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The Board needs to conduct a “How Do We Rate Checklist”. Questions could
include the following:
o Have we created an environment in which the Chancellor has the power to
lead the PCCD?
o Have we delegated authority to the Chancellor to lead and administer?
o Are we keeping the Chancellor informed, adhering to the rule of “no
surprises”?
o Are we honoring the Chancellor as the point of contact for the institution?
o Do we fully consider information and recommendations offered by the
Chancellor?
o Are we supporting professional development for the Chancellor?
o Are we adhering to the standards of Board ethics and ACCJC Standards
IV relative to governance?
o Are we ensuring that the Chancellor has the resources needed to do the
job?
o Do we respect and support the Chancellor?
o Does the Chancellor always ask the Board to make major decisions with
advance preparation?
o Do we alert the Chancellor and Board about our concerns prior to going
public with them?
o Do all Board members receive the same communications from the
Chancellor?
o Do we make it a practice to share information and questions with other
Board members and the Chancellor?
o Do we keep the Chancellor informed about our contacts in the community,
discussions with employees, policymakers and any visits to the Colleges
related to College business?
o Do we help the Chancellor in being effective by not making unnecessary
demands on him?
o Do we provide guidance, support, dialogue, information and feedback to
the Chancellor?
o Do we rely on the Chancellor for leadership and have confidence in his
recommendations?
o Is our time spent in governing and policy making, not managing, the
institution?
o Do we honor the professionalism of the Colleges (faculty, staff and
administration) by allowing them to perform their duties?
o As trustees, do we monitor ourselves carefully to ensure that offering
opinions to the Chancellor and employees is not constructed as directions?
o When issues arise, do we question whether the decision or action we are
about to take reinforce our policy role, or is it an administrative decision?
o Do the Board President and the Chancellor emphasize that individual
Trustees’ opinions are simply opinion and that the only legitimate
direction to the Chancellor comes form the Board as a whole?
o Do we recognize that the Board (not a single Trustee) has the legal right to
give direction relative to the day-to-day operation and mission of the
PCCD, to only one employee, the Chancellor?
o Have we done anything this fiscal year to foster trust?
o Do we acknowledge that the Chancellor directs the faculty, staff and
administration?
o Are we willing to invest time in planning meetings to ensure success?
o Do we model the behaviors that the Board values? (consensus building,
starting and finishing on time, moving the agenda forward)
o Do the Chancellor, Board President and other Trustees have a cooperative
relationship?
o Do we provide fair, consistent, and constructive feedback to the
Chancellor?
LEADERSHIP
It will be important that the PCCD provide a timely update on the status of vacant
administrative and key positions. I have had the opportunity to review the
applications for the VC/CFO and believe there are a number of qualified candidates
for that position. As fiscal adviser, I recommend that the process for filling that
position move forward as soon as possible.
We will need to indicate in the update to the ACCJC that the Chancellor’s position
has been filled on an interim basis for one-year with Dr. Wise Allen and that the HR
Director’s position has been filled on an interim basis for one-year with Dr. Trudy
Largent. We will need to provide a status report for all other vacant administrative
positions.
It is critically important that the Board and Administrative leadership is able to
communicate that the Governing Board is focused on the institution’s major issues
and questions of policy. The Governing Board will need to delegate full
responsibility and authority to the Chancellor to implement and administer Board
policies and the operation of the Colleges. The Administrative leaders should
likewise foster empowerment, innovation, and institutional excellence through
dialogue that builds trust and increases focus on student learning and assessment of
learning outcomes, institutional effectiveness, and integrity.
FISCAL STABILITY
As it relates to ACCJC Standard III (Fiscal Integrity and Stability), the
Administration needs to develop a detailed plan with a timeline and fixed
responsibilities to address both short and long term fiscal concerns, including
obligations, debt retirement, reserves, and the State’s fiscal crisis and its impact on
PCCD. As part of that process, the following key points need immediate attention:
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2009-10 Adopted Budget
Closing of Financial Books for 2008-09 and Preparation for Closing of Financial
Books for 2009-10.
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Acceptance of 2008-09 Fiscal Audit
Preparation and Adoption of the 2010-11 Budget
Submission of all State and Federal Reports Consistent with Statutory Guidelines
Reconciliation of Cash in all Bank Accounts
Development of Fiscal Policies, Regulations, and Procedures to ensure
appropriate management of the district’s fiscal resources.
Clarification of roles, responsibilities and increased accountability; distribution of
financial information to users; training on financial reporting and preparation of
budget and financial audit.
An analysis of the finance office relative to current and needed positions.
Districts the size of PCCD typically have staff serving in the following positions:
internal auditor, bond accountant, budget analyst and accounting analysts
(revenue, categorical and construction accounting). These positions are missing
at PCCD and are necessary for total recovery.
TECHNOLOGY/MIS
The Peralta Community College District (PCCD) is experiencing technical issues that are
impacting its accreditation status, fiscal stability and state reporting. There are several
items contributing to this situation, but the following key items are of major concern:
 The PeopleSoft software used to process financial, human resources and student
information is not configured or utilized properly. As such, reports produced by
the system have not been accurate, timely, or reliable. In the past, data from this
system could not be used for decision making. Staff are not utilizing the system
properly for effective internal controls and financial reporting.
 Staff members continue to need both technical and procedural training in data
entry, retrieval and analysis.
 Leadership is moving forward in developing solutions to the known issues.
 Key functional/operational positions within IT and the Finance office are still
vacant.
The PCCD’s frustration and current experiences with the financial closure, adopted
budget, state/federal reporting, financial aid reporting and past and current audit findings,
can be directly related to the system’s and/or staff’s inability to produce timely and
accurate data.
In addition to the data concerns, there are numerous human resource issues related to the
PCCD’s current status. It is speculation at this juncture, but one could surmise that
inadequate training with PeopleSoft, coupled with ineffective and/or inadequate staffing
have attributed to the dysfunctionality. CIBER provides consulting services for clients
who purchase and implement products from Oracle/PeopleSoft. CIBER has been
engaged with the PCCD since July, 2005-06. Initially, the PCCD conducted a “lab
implementation”, and as such, there was no trial system. This meant that PCCD did not
run a parallel system in H.R., Finance and Student modules. The CIBER consultant
assigned on-site since July, 2007 provided expertise in the financial system. Until
recently, CIBER had not assigned anyone on the functional student system side of the
house since CIBER installed the “passport system” (student module system).
As fiscal adviser, I recommend that the PCCD evaluate the current use of the CIBER
consultants as well as the needed or unfilled positions within MIS division. A
restructuring of MIS is merited. The PCCD also needs to examine the reporting of the
Chief Information Officer to the Chancellor. Once fully examined, this position would
be more suited in reporting to the Vice Chancellor/Chief Fiscal Officer.