FEBRUARY 2011 REPORT NO. 2011-108 7 Operating Expenses (In Thousands) 6-30-10 6-30-09 6-30-10 6-30-09 Operating Expenses Personnel Services 57,263$ 53,846$ 565$ 709$ Scholarships and Waivers 21,847 11,517 1,140 1,731 Utilities and Communications 2,578 2,494 Contractual Services 2,790 3,247 103 122 Other Services and Expenses 4,943 4,606 255 810 Materials and Supplies 9,222 4,481 42 35 Depreciation 6,647 5,052 Total Operating Expenses 105,290$ 85,243$ 2,105$ 3,407$ College Component Unit The following chart presents the College’s operating expenses for the 2009-10 and 2008-09 fiscal years: Operating Expenses: College (In Thousands) College operating expense changes were the result of the following factors:  Personnel expenses increased $3.4 million, or 6.3 percent, due to compensation adjustments and increased staffing levels necessitated by enrollment growth.  Scholarship expenses increased $10.3 million, or 89.7 percent, primarily due to increases in Federal Pell Grant awards due to increased enrollment and the new year-round Federal Pell Grant regulation, and increases in Bright Futures, Federal Supplemental Educational Opportunity Grants, and First Generation in College scholarships. Additionally, the increased enrollment at the College resulted in increased scholarship expenses.  Materials and supplies expenses increased $4.7 million, or 105.8 percent, over the prior year due to significant amounts of minor equipment purchases related to furnishing the new University Partnership building and Public Safety building. Additionally many noncapitalized repairs, renovations, and remodels on the Sanford/Lake Mary campus occurred during the 2009-10 fiscal year. $6,647 $9,222 $4,943 $2,790 $2,578 $21,847 $57,263 $5,052 $4,481 $4,606 $3,247 $2,494 $11,517 $53,846 $0 $35,000 $70,000 Depreciation Materials and Supplies Other Services and Expenses Contractual Services Utilities and Communications Scholarships and Waivers Personnel Services 2008-09 2009-10 This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 8 Nonoperating Revenues and Expenses Certain revenue sources that the College relies on to provide funding for operations, including State appropriations, certain gifts and grants, and investment income, are defined by GASB as nonoperating. Nonoperating expenses include capital financing costs and other costs related to capital assets. The following summarizes the College’s nonoperating revenues and expenses for the 2009-10 and 2008-09 fiscal years: Nonoperating Revenues (Expenses): College (In Thousands) 2009-10 2008-09 State Appropriations 32,928$ 35,670$ Gifts and Grants 38,500 17,640 Investment Income 113 244 Other Nonoperating Revenues 74 64 Interest on Capital Asset-Related Debt (499) (539) Other Nonoperating Expenses (30) (19) Net Nonoperating Revenues 71,086$ 53,060$ Nonoperating revenue changes were the result of the following factors:  Although State appropriations decreased by $2.7 million, or 7.7 percent, the College received $2.9 million in Federal stimulus dollars, which accounts for some of the increase in the gifts and grants category.  The gifts and grants nonoperating revenue increased $20.9 million, or 118.3 percent partly due to the Federal stimulus dollars appropriated from the State, as well as increased Federal Pell grant revenue. Other Revenues, Expenses, Gains, or Losses This category is comprised of capital appropriations and capital grants, contracts, gifts, and fees. The following summarizes the College’s other revenues, expenses, gains, or losses for the 2009-10 and 2008-09 fiscal years: Other Revenues, Expenses, Gains, or Losses: College (In Thousands) 2009-10 2008-09 Capital Appropriations 9,751$ 16,306$ Capital Grants, Contracts, Gifts, and Fees 2,768 9,893 Total 12,519$ 26,199$ Other revenues, expenses, gains, or losses changes were the result of the following factors:  Capital appropriations decreased by $6.6 million, or 40.2 percent, due to decreased Public Education Capital Outlay funds received from the State for construction projects. The prior year capital appropriations included major building renovations on the Sanford/Lake Mary campus and the University Partnership building.  Capital grants and contracts decreased by $7.1 million, or 72 percent, mainly due to the prior year funds, which were the final contributions, received from the University of Central Florida for the University Partnership building. This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 9 T HE STATEMENT OF CASH FLOWS Another way to assess the financial health of an institution is to look at the statement of cash flows. Its primary purpose is to provide relevant information about the cash receipts and cash payments of an entity during a period. The statement of cash flows also helps users assess:  An entity’s ability to generate future net cash flows.  Its ability to meet its obligations as they come due.  Its need for external financing. A summary of the College’s cash flows for the 2009-10 and 2008-09 fiscal years is presented in the following table: Condensed Statement of Cash Flows: College (In Thousands) 2009-10 2008-09 Cash Provided (Used) by: Operating Activities (70,739)$ (53,426)$ Noncapital Financing Activities 71,428 53,310 Capital and Related Financing Activities (1,984) 1,384 Investing Activities 117 251 Net Increase (Decrease) in Cash and Cash Equivalents (1,178) 1,519 Cash and Cash Equivalents, Beginning of Year 20,095 18,576 Cash and Cash Equivalents, End of Year 18,917$ 20,095$ Major sources of funds came from State appropriations ($32.9 million), capital appropriations ($11.8 million), net student tuition and fees ($21.2 million), and noncapital gifts and grants ($38.5 million). Major uses of funds were for payments to employees ($45.9 million), payments for scholarships ($21.8 million), payments to suppliers ($17 million), payments for employee benefits ($11 million), and the purchase of capital assets ($15.2 million). Changes in cash and cash equivalents were the result of the following factors:  Operating Activities used $17.3 million more cash compared to the previous fiscal year. The majority of this increase was related to an increase of $10.3 million in scholarship disbursements compared to the prior fiscal year. Additional cash outflow increases are related to supplier and employee payments.  Noncapital financing activities increased the College’s cash position by $18.1 million. This increase is mainly due to an $18 million increase in cash inflows for Federal Pell grants and State scholarships, and the receipt of Federal stimulus dollars of $2.9 million, offset by $2.7 million less received this year for State appropriations.  Cash inflows from capital and related financing activities decreased by $3.4 million primarily due to a decrease in capital appropriations from the State as many of the major construction projects in the prior year were completed. In the prior year the College had also received $7.9 million from the University of Central Florida for the University Partnership building.  The cash flows from investing activities are the result of interest income earned on the College’s demand deposits in the bank and with the State’s Special Purpose Investment Account. The cash inflow from investing activities decreased $0.1 million compared to the prior fiscal year as a result of decreased interest rates. This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 10 CAPITAL ASSETS AND DEBT ADMINISTRATION C APITAL ASSETS At June 30, 2010, the College had $223.4 million in capital assets, less accumulated depreciation of $51.7 million, for net capital assets of $171.8 million. Depreciation charges for the current fiscal year totaled $6.6 million. The following table summarizes the College’s capital assets at June 30, 2010, and June 30, 2009: Capital Assets, Net at June 30: College (In Thousands) Capital Assets 2010 2009 Land 21,269$ 21,228$ Buildings 168,608 125,265 Other Structures and Improvements 11,842 5,518 Furniture, Machinery, and Equipment 10,591 8,912 Assets Under Capital Lease 1,585 1,610 Leasehold Improvements 3,097 3,097 Other Capital Assets 3,778 4,117 Construction in Progress 2,678 42,550 Total 223,448 212,297 Less, Accumulated Depreciation: Buildings 31,575 29,472 Other Structures and Improvements 6,151 5,478 Furniture, Machinery, and Equipment 8,538 7,652 Assets Under Capital Lease 1,165 1,046 Leasehold Improvements 1,094 808 Other Capital Assets 3,157 3,070 Total Accumulated Depreciation 51,680 47,526 Capital Assets, Net 171,768$ 164,771$ The College has $1 million in major construction commitments at June 30, 2010. The construction commitments are for projects that include renovations of Buildings L and F, a Student Services building, and signage projects. State appropriations, capital improvement revenue bonds, and local funds are expected to finance these capital projects. More information about the College’s capital assets is presented in the notes to financial statements. D EBT ADMINISTRATION At fiscal year-end, the College had $10.4 million in long-term debt outstanding. The following table summarizes outstanding long-term debt by type for the fiscal years ended June 30, 2010, and June 30, 2009: Long-Term Debt, at June 30: College (In Thousands) 2010 2009 Bonds Payable 6,990$ 7,400$ Loan Payable 2,989 3,193 Capital Lease Payable 418 697 Total 10,397$ 11,290$ The State Board of Education issues capital outlay and capital improvement revenue bonds on behalf of the College. During the 2009-10 fiscal year, there were no bond sales and debt repayments totaled $892,000. Additional information about the College’s long-term debt is presented in the notes to financial statements. This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 11 ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE Seminole State College of Florida’s economic condition is closely tied to that of the State of Florida because approximately 50.9 percent of the College’s operating funds were received through appropriations and Federal Stimulus allocations through the State. Initial allocations for the 2010-11 fiscal year are approximately 7.7 percent greater than 2009-10 fiscal year allocations. However, the 2010-11 allocations include $2.9 million of nonrecurring Federal stabilization funds. These nonrecurring appropriations represent approximately 3.8 percent of the current year operating resources. Therefore, the College established a designated reserve in excess of the statutory level sufficient to maintain operations during the upcoming and future fiscal years. High levels of unemployment in the State are correlated to increased enrollments in State colleges. Summer and Fall Term enrollment at Seminole State College of Florida continued to exceed the budgeted 11.4 percent increase as State unemployment rates remained high. The College anticipates a continued increase in enrollment throughout the year. In addition, the College began offering courses leading to a Bachelor Degree in Applied Science for Interior Design accredited by the Southern Association of Colleges and Schools, with plans to offer four more baccalaureate degrees next year. Resources from this enrollment increase are augmented by an 8 percent increase in tuition rates which began in the Fall 2010 term. Therefore, the projected increases in enrollment and tuition rates provide additional resources for the College to maintain and grow programs throughout next year. A newly-renovated and expanded Center for Public Safety was completed on the Sanford/Lake Mary campus this past year. This facility provides additional instructional capacity to serve students throughout 2010-11. The College also completed construction of a joint-use facility on the Sanford/Lake Mary campus in cooperation with the University of Central Florida (UCF). This new 108,000 square foot facility provides expanded library, classroom and student service capacity to serve the growing need of the College and UCF as additional baccalaureate programs are offered at the Sanford/Lake Mary campus. The College also received funding through the Public Educational Capital Outlay program to fund the renovation of 30,000 square feet of classroom space and begin planning for a new Student Center on the Sanford/Lake Mary campus. The College also received funds to acquire over 25 acres of land and 80,000 square feet of building adjacent to the existing Altamonte Springs campus. REQUESTS FOR INFORMATION Questions concerning information provided in the MD&A or other required supplementary information and financial statements and notes thereto, or requests for additional financial information, should be addressed to the Vice President of Administrative Services, Seminole State College of Florida, 100 Weldon Boulevard, Sanford, Florida 32773. This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 12 BASIC FINANCIAL STATEMENTS College Component Unit ASSETS Current Assets: Cash and Cash Equivalents 10,834,378$ 3,341,014$ Restricted Cash and Cash Equivalents 1,914,444 Restricted Investments 1,068,431 Accounts Receivable, Net 3,186,282 169,732 Notes Receivable, Net 44,497 Due from Other Governmental Agencies 7,798,619 Due from Component Unit 60,160 Prepaid Expenses 736,210 Other Assets 3,886 Total Current Assets 24,574,590 4,583,063 Noncurrent Assets: Restricted Cash and Cash Equivalents 6,167,969 Endowment Investments 6,248,360 Restricted Investments 132,453 Depreciable Capital Assets, Net 147,821,624 Nondepreciable Capital Assets 23,946,384 872,171 Other Noncurrent Assets 169,161 Total Noncurrent Assets 178,068,430 7,289,692 TOTAL ASSETS 202,643,020$ 11,872,755$ LIABILITIES Current Liabilities: Accounts Payable 972,929$ 45,721$ Salary and Payroll Taxes Payable 1,138,813 Retainage Payable 267,861 Due to Other Governmental Agencies 3,929 Due to College 60,160 Deferred Revenue 67,382 Deposits Held for Others 382,380 45,568 Long-Term Liabilities - Current Portion: Bonds Payable 440,000 Loans Payable 212,426 Capital Lease Payable 133,144 Compensated Absences Payable 122,617 Total Current Liabilities 3,741,481 151,449 Noncurrent Liabilities: Bonds Payable 6,550,000 Loans Payable 2,776,992 Notes Payable 702,104 Capital Lease Payable 285,253 Compensated Absences Payable 4,912,448 Other Postemployment Benefits Payable 54,351 Total Noncurrent Liabilities 14,579,044 702,104 TOTAL LIABILITIES 18,320,525 853,553 SEM INOLE STATE COLLEGE OF FLORIDA A COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF NET ASSETS June 30, 2010 This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 13 College Component Unit NET ASSETS Invested in Capital Assets, Net of Related Debt 161,370,193$ 170,067$ Restricted: Nonexpendable: Endowment 4,710,231 Expendable: Grants and Loans 2,210,420 Scholarships 409,684 5,504,993 Capital Projects 12,058,032 Debt Service 72,644 Unrestricted 8,201,522 633,911 Total Net Assets 184,322,495 11,019,202 TOTAL LIABILITIES AND NET ASSETS 202,643,020$ 11,872,755$ SEMINOLE STATE COLLEGE OF FLORIDA A COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF NET ASSETS (Continued) June 30, 2010 The accompanying notes to financial statements are an integral part of this statement. This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 14 College Component Unit REVENUES Operating Revenues: Student Tuition and Fees, Net of Scholarship Allowances of $15,210,537 22,279,054$ $ Federal Grants and Contracts 2,418,829 State and Local Grants and Contracts 841,746 Nongovernmental Grants and Contracts 1,173,567 Sales and Services of Educational Departments 78,178 Auxiliary Enterprises 1,403,808 Other Operating Revenues 491,216 1,732,949 Total Operating Revenues 28,686,398 1,732,949 EXPENSES Operating Expenses: Personnel Services 57,262,798 565,053 Scholarships and Waivers 21,847,246 1,140,392 Utilities and Communications 2,577,779 Contractual Services 2,789,905 102,913 Other Services and Expenses 4,943,486 254,530 Materials and Supplies 9,221,527 41,784 Depreciation 6,647,279 Total Operating Expenses 105,290,020 2,104,672 Operating Loss (76,603,622) (371,723) NONOPERATING REVENUES (EXPENSES) State Appropriations 32,927,908 53,820 Gifts and Grants 38,499,637 51,153 Investment Income 113,339 292,781 Net Realized and Unrealized Gain on Investments 374,972 Other Nonoperating Revenues 74,641 Interest on Capital Asset-Related Debt (499,138) Other Nonoperating Expenses (30,320) Net Nonoperating Revenues 71,086,067 772,726 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (5,517,555) 401,003 Capital Appropriations 9,750,816 Capital Grants, Contracts, Gifts, and Fees 2,768,444 Total Other Revenues 12,519,260 Increase in Net Assets 7,001,705 401,003 Net Assets, Beginning of Year 177,320,790 10,618,199 Net Assets, End of Year 184,322,495$ 11,019,202$ The accompanying notes to financial statements are an integral part of this statement. SEMINOLE STATE COLLEGE OF FLORIDA A COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS F or the Fiscal Year Ended June 30, 2010 This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 15 College CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees, Net 21,199,791$ Grants and Contracts 4,793,082 Payments to Suppliers (17,017,581) Payments for Utilities and Communications (2,584,365) Payments to Employees (45,894,952) Payments for Employee Benefits (10,980,965) Payments for Scholarships (21,847,247) Net Loans Issued to Students (127,275) Collection of Loans to Students 133,590 Auxiliary Enterprises 913,536 Sales and Service of Educational Departments 80,384 Other Receipts 592,762 Net Cash Used by Operating Activities (70,739,240) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations 32,927,908 Gifts and Grants Received for Other Than Capital or Endowment Purposes 38,499,637 Net Cash Provided by Noncapital Financing Activities 71,427,545 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Appropriations 11,762,936 Capital Grants and Gifts 2,768,444 Proceeds from Sale of Capital Assets 44,321 Purchases of Capital Assets (15,168,424) Principal Paid on Capital Debt and Lease (891,731) Interest Paid on Capital Debt and Lease (499,138) Net Cash Used by Capital and Related Financing Activities (1,983,592) CASH FLOWS FROM INVESTING ACTIVITIES Investment Income 117,197 Net Cash Provided by Investing Activities 117,197 Net Decrease in Cash and Cash Equivalents (1,178,090) Cash and Cash Equivalents, Beginning of Year 20,094,881 Cash and Cash Equivalents, End of Year 18,916,791$ SEMINOLE STATE COLLEGE OF FLORIDA A COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF CASH FLOWS For the Fiscal Year Ended June 30, 2010 This is trial version www.adultpdf.com FEBRUARY 2011 REPORT NO. 2011-108 16 College RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES Operating Loss (76,603,622)$ Adjustments to Reconcile Operating Loss to Net Cash Used by Operating Activities: Depreciation Expense 6,647,279 Changes in Assets and Liabilities: Accounts Receivable, Net (543,781) Notes Receivable, Net 6,315 Due From Other Governmental Agencies (226,502) Prepaid Expenses (65,755) Salaries and Payroll Taxes Payable 204,485 Accounts Payable (441,915) Deferred Revenue 253 Deposits Held for Others 96,507 Compensated Absences Payable 171,167 Other Postemployment Benefits Payable 16,329 NET CASH USED BY OPERATING ACTIVITIES (70,739,240)$ SEMINOLE STATE COLLEGE OF FLORIDA A COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF CASH FLOWS (Continued) For the Fiscal Year Ended June 30, 2010 The accompanying notes to financial statements are an integral part of this statement. This is trial version www.adultpdf.com . Beginning of Year 20,094,881 Cash and Cash Equivalents, End of Year 18,916,791$ SEMINOLE STATE COLLEGE OF FLORIDA A COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF CASH FLOWS For the Fiscal Year. COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF CASH FLOWS (Continued) For the Fiscal Year Ended June 30, 2010 The accompanying notes to financial statements are an integral part of this statement. . ASSETS 202,643,020$ 11,872,755$ SEMINOLE STATE COLLEGE OF FLORIDA A COMPONENT UNIT OF THE STATE OF FLORIDA STATEMENT OF NET ASSETS (Continued) June 30, 2010 The accompanying notes to financial statements are