REPORT NO. 2010-138 M ARCH 2010 EDISON STATE COLLEGE Financial Audit For the Fiscal Year Ended June 30, 2009 This is trial version www.adultpdf.com BOARD OF TRUSTEES AND PRESIDENT Members of the Board of Trustees and President who served during the 2008-09 fiscal year are listed below: Count y Dr. Washington D. Baquero, Chairman Lee Dr. Randall T. Parrish, Jr., Vice Chairman Hendr y A nn E. Berlam Collie r JoAnn P. Helphenstine, from 8-07-08 (1) Charlotte W. Mahlan Houghton, Jr. Lee Dr. David M. Klein Charlotte Mary Lee Mann Lee Julia G. Perry Glades Christopher T. Vernon, J.D. Collie r Note: (1) Dr. Kenneth P. Walker, President Board member position was vacant from July 1, 2008, through August 6, 2008. T he Auditor General conducts audits of governmental entities to provide the Legislature, Florida’s citizens, public entity management, and other stakeholders unbiased, timely, and relevant information for use in promoting government accountability and stewardship and improving government operations. The audit team leader was Claudia A. Salgado, and the audit was supervised by Deirdre F. Waigand, CPA. Please address inquiries regarding this report to James R. Stultz, CPA, Audit Manager, by e-mail at jimstultz@aud.state.fl.us or by telephone at (850) 922-2263. This report and other reports prepared by the Auditor General can be obtained on our Web site at www.myflorida.com/audgen ; by telephone at (850) 487-9024; or by mail at G74 Claude Pepper Building, 111 West Madison Street, Tallahassee, Florida 32399-1450. This is trial version www.adultpdf.com MARCH 2010 REPORT NO. 2010-138 EDISON STATE COLLEGE TABLE OF CONTENTS PAGE NO. EXECUTIVE SUMMARY i INDEPENDENT AUDITOR’S REPORT ON FINANCIAL STATEMENTS 1 MANAGEMENT’S DISCUSSION AND ANALYSIS 3 BASIC FINANCIAL STATEMENTS Statement of Net Assets 13 Statement of Revenues, Expenses, and Changes in Net Assets 15 Statement of Cash Flows 16 Notes to Financial Statements 18 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 40 Internal Control Over Financial Reporting 40 Compliance and Other Matters 41 This is trial version www.adultpdf.com MARCH 2010 REPORT NO. 2010-138 2 In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of Edison State College and of its discretely presented component unit as of June 30, 2009, and the respective changes in financial position and cash flows thereof for the fiscal year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report on our consideration of Edison State College’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements and other matters included under the heading INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS . The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and 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 MANAGEMENT’S DISCUSSION AND ANALYSIS on pages 3 through 12 is not a required part of the basic financial statements, but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted 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. Respectfully submitted, David W. Martin, CPA March 15, 2010 This is trial version www.adultpdf.com MARCH 2010 REPORT NO. 2010-138 4 financial activities to the State of Florida. Based on the application of the criteria for determining component units, the Financing Corporation is included within the College’s reporting entity as a blended component unit. The Financing Corporation’s fiscal year is from April 1 st through March 31 st . As a result, the Financing Corporation’s financial activities are included in the MD&A and accompanying financial statements are for the years ended March 31, 2009, and 2008, respectively. T HE STATEMENT OF NET ASSETS AND THE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS One of the most important questions asked about the College’s finances is, “Is Edison State College, as a whole, better or worse off as a result of the year’s activities?” The statement of net assets and the statement of revenues, expenses, and changes in net assets report information on the College as a whole and on its activities in a way that helps answer this question. When revenues and other support exceed expenses, the result is an increase in net assets. When the reverse occurs, the result is a decrease in net assets. The relationship between revenues and expenses may be thought of as Edison State College’s operating results. These two statements report Edison State College’s net assets and changes in them. You can think of the College’s net assets, the difference between assets and liabilities, as one way to measure the College’s financial health or financial position. Over time, increases or decreases in the College’s net assets are one indicator of whether its financial health is improving or deteriorating. You will need to consider many other nonfinancial factors, such as certain trends, student retention, condition of buildings, and the safety of the campus, to assess the overall financial health of the College. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector institutions. All of the current year revenues and expenses are taken into account regardless of when cash is received or paid. A condensed statement of assets, liabilities, and net assets for the College and its discretely presented component unit for the respective periods ended is shown in the following table: This is trial version www.adultpdf.com MARCH 2010 REPORT NO. 2010-138 5 Assets, Liabilities, and Net Assets at (In Thousands) 6-30-09 6-30-08 3-31-09 3-31-08 Assets Current Assets 47,167$ 28,715$ 1,272$ 2,322$ Capital Assets, Net 94,176 85,640 Other Noncurrent Assets 7,792 9,745 39,685 53,338 Total Assets 149,135 124,100 40,957 55,660 Liabilities Current Liabilities 4,246 3,896 5,158 10,990 Noncurrent Liabilities 6,836 6,581 Total Liabilities 11,082 10,477 5,158 10,990 Net Assets Invested in Capital Assets, Net of Related Debt 91,596 82,920 Restricted 37,356 24,504 31,657 28,372 Unrestricted 9,101 6,199 4,142 16,298 Total Net Assets 138,053$ 113,623$ 35,799$ 44,670$ Increase (Decrease) in Net Assets 24,430$ 21.5% (8,871)$ -19.9% College Component Unit The following chart presents the College’s net assets as of June 30: Net Assets: College (In Thousands) $82,920 $24,504 $6,199 $91,596 $37,356 $9,101 $0 $50,000 $100,000 Invested in Capital Assets, Net of Related Debt Restricted Unrestricted 2008 2009 This is trial version www.adultpdf.com . version www.adultpdf.com MARCH 2010 REPORT NO. 2010- 138 EDISON STATE COLLEGE TABLE OF CONTENTS PAGE NO. EXECUTIVE SUMMARY i INDEPENDENT AUDITOR’S REPORT ON FINANCIAL STATEMENTS 1 MANAGEMENT’S. did not audit the information and express no opinion on it. Respectfully submitted, David W. Martin, CPA March 15, 2010 This is trial version www.adultpdf.com MARCH 2010 REPORT NO. 2010- 138. may be thought of as Edison State College s operating results. These two statements report Edison State College s net assets and changes in them. You can think of the College s net assets,