Standard
9
Financial Resources
Team Members:
John Boland, lead,
Dean of Administrative Services
Penny
Barton-Zuckerman, Assistant Professor
Richard Fontaine,
Director of the Center for Community and Professional Learning
James Kilbride, Business Manager
Description
By
far the most significant impact on the College’s financial resources since the
last accreditation report (1991) came from Public Act 91-256. Commonly referred
to as the Higher Education Flexibility Bill, this act was passed by the
Connecticut legislature in June 1991. The bill removed the need for many prior
approvals and, among other changes, essentially gave colleges control of their
own purchasing, contract administration, and travel authorizations. As a
result, QVCC can either search (increasingly via the Internet) for the best
price for commodities or use existing pre-bid contracts. Because of
decentralized control, State colleges now can save resources by shopping for
the best price, and they can procure required equipment and supplies in much
less time. Equally important, QVCC can respond quickly to departmental
requests. As an example, prior to the flexibility legislation, it used to take
two to three months with extensive justification to purchase computers. Today,
the College can take advantage of the most current prices and receive equipment
in as little as two to three weeks. The College has had similar experiences
with its ability to approve vendor contracts (personal service agreements) and
process travel requests.
One other legislative
change that permitted the College to manage financial resources more
efficiently occurred in 1994. That year the State changed from an annual budget
cycle to a biennial budget. Even though minor budget adjustments may occur in
the second year, for planning purposes being able to forecast College budgets
two years out is a significant improvement over the previous annual cycle.
Expenditures
for the College have increased approximately 25% over the past five years,
despite a slight decrease in spending in fiscal year 1998 as a result of an
early retirement incentive program implemented by the State at the end of
fiscal year 1997. Part of the salary savings from that program was returned to
the State in FY98. In recent years, the State’s share of the College’s budget
has held relatively constant at approximately 63% of total expenses. At the
same time, tuition rates have remained relatively constant, in part due to a
legislative initiative that subsidized community college budgets in lieu of
raising tuition in FY99 and FY00. Projecting through FY03’s adopted rates,
tuition and fees at the community colleges will have increased an average of
4.8% per year over a ten-year period.
Because
each of the Connecticut Community-Technical Colleges (CCTCs) is now able to
manage its own budget and also to maintain fund balances, Quinebaug Valley has
sufficient resources to respond to short-term financial emergencies. The
College had a balance in its Operating Fund of approximately $1.2 million at
the end of FY00.
As
previously mentioned, approximately 63% of QVCC’s budget is funded by the
State. The College’s other sources of revenue are student tuition and fees,
which make up 26%, and Federal and private grants, which supply 11%. Usually
each year, the State also provides bond funds for the purchase of equipment as
well as for deferred maintenance projects. The College has nearly complete
autonomy over the allocation of its resources. Final budget decisions, whenever
possible, are based on budget priorities established in the Strategic
Plan, with Learners First as the guiding principle.
The
General Statutes were amended in 1992 to provide for the development of a
biennial budget effective with the FY94-95 biennium. The CCTC Board of Trustees
reviews and approves its biennial budget request in the summer of even-numbered
years. The legislative process of the General Assembly takes up the approval of
the biennial budget in the spring of odd numbered years. The process provides
for a midterm budget adjustment, which the General Assembly may consider during
the first year (even-numbered year) of the biennium.
The
budgetary process begins with the development of system guidelines for
preparing a budget request for the ensuing biennium. The CCTC Chancellor, working
with the CCTC Council of Presidents, develops system guidelines that are
responsive to system and college strategic planning—addressing both system-wide
and individual college needs—and that also incorporate State guidelines
established by the Office of Policy and Management and the Board of Governors
for Higher Education. Working within these guidelines, the QVCC President’s
Cabinet, in concert with the Strategic Plan—which is developed and approved by
the college community—identifies any new requests to be included in the
College’s budget.
When
the legislative process is completed, appropriations are made to the Board of
Trustees, which in turn has the responsibility of allocating funds among the
colleges in the system. The allocation is based on a comprehensive resource
allocation model that provides for an equitable distribution of funds available
to the system. Funds are allocated in major categories of personal services,
other expense, equipment, and fixed charges (including student financial aid and
refunds). Specific funding in recognition of mandatory expenses such as plant
operations, fuel and utilities, leasing of facilities, contractual clinical
instruction, and campus security is also included in the distribution. Once
allocations have been made, each college has significant discretion in the
management of its budget within the specific categories of personnel,
equipment, and other operating expenses.
QVCC
has a highly decentralized budget process, with almost every full-time faculty
member having his or her own budget. This puts the onus of budget management at
the individual level.
Departmental
budget requests are usually requested in April from each department and
forwarded to the area dean for approval before being sent to the Dean of Administrative
Services for consolidation. The dean compares the total of these requests with
the available funding level and provides this information to the Cabinet.
Guided by priorities established in the Strategic Plan, the Cabinet establishes
funding priorities for the new year and makes the allocation. College staff are
kept informed about major developments affecting the budget, both at the State
and College levels, at general staff meetings.
Many
of the fiscal procedures of the College are written in the Business Office Guide
produced by the Administrative Services Division. In addition, the Board of
Trustees Policy Manual contains operational policies that pertain to
all the community colleges. The State of Connecticut self-insures most of its
equipment; however, for certain high risk items such as artwork or computers,
insurance coverage can be obtained through the State Insurance Purchasing
Board.
Adequate
controls are in place to ensure that the College manages its financial
resources. In FY97, the CCTC system implemented the Banner Finance Module. When
the new general ledger was put in place, the College changed its accounting
system from a modified cash basis to an accrual basis, thus providing more
accurate financial statements. The Banner system also allows budget
encumbrances at the purchase requisition stage. Purchase requisitions are sent
by department heads to their area dean or director for approval and then
forwarded to the business office for processing. The business office checks the
department’s available funds before fulfilling the request. Each month, the
business office also provides detailed budget reports to each department head,
showing all transactions processed as well as the remaining budget balance. As
a State agency, the College must operate within its available resources and is
not permitted to spend beyond its reserves.
The
College’s financial records are subject to review by the Auditors of Public
Accounts. These records are audited every one or two years. The most recent audit completed
is for FY98 and FY99. In addition, in December 1999 the State
Comptroller’s Office completed a Paperless Processing Compliance
Audit of the College’s internal controls, as a result of the
College’s implementation of electronic processing of accounts payable in 1998.
QVCC Foundation
The
QVCC Foundation is governed in accordance with Public Act 89-267, An Act Concerning Private Foundations
Established for the Benefit of State Agencies and Institutions. The
Foundation’s mission is to raise funds to support educational excellence,
technological advancement, and professional development at QVCC, as well as to
provide all residents of northeastern Connecticut the opportunity to attend
Quinebaug Valley Community College.
The
Foundation is in complete compliance with the policies mandated by the Board of
Trustees concerning Public Act 97-293,
An Act Concerning Advancement of Public Institutions of Higher Education,
whereby in September 1997 the Board of Trustees was given authority to
establish and administer a permanent CCTC Endowment Fund.
The
Foundation is audited annually by a professional CPA firm if revenue exceeds
$100,000 per fiscal year and biennially if revenue is under $100,000 per year.
The results of QVCC Foundation audits are made available to the QVCC
administration and to State auditors.
Appraisal
The College is financially stable and has
sufficient resources to accomplish its educational objectives. Despite a slight
decline in FY98, the budget has increased steadily in recent years. Because of
favorable budgets, the fund balance has also increased during this time and
serves as an adequate reserve to respond to a budget crisis.
The College’s budget is linked to the goals
identified in the Strategic Plan. Each year, this plan is updated by the Lead
Planning Team and accepted by staff at a general meeting. Once a budget is
adopted, appropriate expenditure controls are in place to manage the funds. The
State has fairly consistently provided bond funds to support deferred
maintenance projects and thus enables the College to keep its facilities in
excellent condition.
The Administrative Services Division
continues to be very customer focused. It frequently uses Process Improvement
Teams and other Total Quality initiatives to provide better service to
students. A recent example of this emphasis was the financial aid Process
Improvement Team, which greatly expedited the processing of financial aid
awards.
The College has always been energetic and
creative in seeking ways to maximize its limited resources. For instance, to
meet the unending demand for the most current computers in classrooms and
offices, the data processing staff is now upgrading personal computers rather
than buying new ones, at a savings of about 40%.
Despite the College’s small size, the QVCC
Foundation continues to be one of the most active in the CCTC system. In FY00,
the Foundation contributed over $43,000 in scholarships and other financial
support.
The enactment of flexibility legislation has
had a major impact on the College’s ability to manage its own budgets and has
enabled it to be more responsive to both its internal and external
constituencies. In reaction to an increasing workload, the College continues to
turn to technology as a solution. Every staff member has a computer workstation
and is connected to the network. Along with the other community colleges,
Quinebaug Valley has implemented the Banner Administrative Data Processing
System. As a result of a significant staff investment, all four modules (student,
finance, human resources, and financial aid) have been implemented. The hope
now is that, as a result of having this integrated system and being able to
work with database management tools, the College will experience major
productivity gains. In addition, there continues to be more use of electronic
processing to assist in such tasks as accounts payable, bid procurement, and
purchasing, reducing both paperwork and turnaround time.
Although the College has experienced moderate
budget growth, there are signs that this trend may be ending. In FY01, the
College was required to give back $78,000 of its appropriation to the State due
to a budget cut. While the State is still projecting budget surpluses in the
next biennial cycle, it is experiencing difficulties staying within a statutory
spending cap, which limits growth of the overall budget. Agencies have recently
been put on notice that spending reductions may be necessary in FY02 and FY03.
Whether or not budgets are reduced, it appears that there will be very limited
growth in the near future.
Despite the fact the College has enjoyed
relatively strong enrollment increases the past few years, there have not been
commensurate increases in staff in a number of offices. This is particularly
true with respect to support positions. As a result, the College increasingly
relies on student labor to assist existing staff. If the College is going to
continue to maintain the current level of service, it will need to respond to
this concern as the workload increases due to higher enrollments in both credit
and credit-free courses.
The Banner project has been an enormous drain
on staff time; several offices have had a very difficult time keeping up with
day-to-day responsibilities during the implementation phase. Some offices have
incurred increased labor costs in support of this effort. Since all four
modules are now functioning, the goal is to make Banner more of a tool and less
of a burden.
Projection
·
The College will continue to link
the budget process to the planning process.
·
Increased enrollment without
increased staffing and revenue will stretch existing staff in maintaining the
quality of programs and services.
·
With all four modules of Banner
operational, the focus of staff time and training will be on maximizing the
capacity for obtaining information for planning and decision-making.
·
The College will use the
legislative flexibility provided to maximize the use of its resources and to
provide better customer service.
·
Management will continue to
advocate for additional resources from the System Office to support the
College’s enrollment growth.
Auditor’s Reports FY98 and FY99
Banner Reports
FGRBDSC – Budget Status
FGRBLSH – Balance Sheet
FGRODTA – Organization Detail Activity
FWRREAB – Statement of Revenues and Expenses by Account
FYROPAL – Budget Monitoring Form
Business Office Guide
Connecticut Community College Performance
Measures
Enrollment and Budget Trends Report –
February 01
IPEDS Report FY01
Integrated Postsecondary Education Data
System reports for FY01
National Association of College and
University Business Officers Two-year College Survey
Paperless Processing Compliance Audit,
December 1999
Public Act 89-267
Public Act 97-293
QVCC Foundation Audit, June 30, 2000
Real Price to Students – February 00
State vs. Student Share—Historical Trends
Strategic Plan
Tuition and Fees—Ten Year History