RESOURCES 

3.10  Financial and Physical Resources

3.10.1 The institution's recent financial history demonstrates financial stability. 

R Compliance          
€  Partial Compliance         
€  Non-Compliance 

NARRATIVE:

Trinity Valley Community College's recent financial history demonstrating its financial stability is documented in the approved budgets for 2002-2003, 2003-2004 and 2004-2005, and the audited Annual Financial Reports for Years Ended August 31, 2003, 2004, and 2005.

TVCC strives to provide quality educational programs at an affordable cost.  The College maintains one of the lowest tuition rates as well as one of the lowest property tax rates among all Texas community colleges (Tuition Rates 2004-2005, Tuition Rates 2005-2006, Property Tax Rates 2004-2005, Property Rates 2005-2006).  Nevertheless, TVCC has sufficient funds to support its mission.  Through fiscally responsible leadership by the Board of Trustees and the College's administration, TVCC has generated continued growth in net assets.  As can be determined through an analysis of the Statement of Net Assets for Years Ended August 31, 2003, 2004, and 2005, net assets have increased 3.5%, 2.9% (restated) and 5.1%, respectively.

Revenue is obtained from a variety of sources.  The major categories are state appropriations, tuition and fees, grants and contracts, ad valorem taxes, and auxiliary services.  The contribution of each of these revenue sources has remained fairly consistent over the past three years, the exception being that state appropriations have fallen from 46% in 2003 to 41% in 2005.   Revenue sources are graphically depicted in the Management's Discussion and Analysis section of the 2004 (p.9) and 2005 (p.9) Annual Financial Reports.  As can be determined through an analysis of the revenue sections (both operating and non-operating) of the Statement of Revenues, Expenses, and Changes in Net Assets for the Years Ended August 31, 2003, 2004 and 2005, revenues have increased 6.8%, 10% and 1.9%, respectively. The small increase for 2005 is reflective of the College's decision not to raise tuition and fees for the fiscal year. Additionally, state appropriations remained flat relative to 2004.

Expenses have increased alongside revenues.  Generally, salaries and employee fringe benefits increased as well as additional grant and scholarship aid in all three years.  As can be determined through an analysis of the expense sections (both operating and non-operating) of the Statement of Revenues, Expenses, and Changes in Net Assets for the Years Ended August 31, 2003, 2004, and 2005, expenses have increased 9.6%, 5.7% and 4.4%, respectively.  However, higher revenues have offset the increase in expenses, resulting in a positive change in net assets.

TVCC has maintained positive cash flow with increases of 39.8%, 15.8%, and 121% (includes bond proceeds) as shown on the Statement of Cash Flows for the Year Ended August 31, 2003, 2004, and 2005, respectively.

Over the last three years, TVCC's endowment funds have increased 1%, 3%, and 7% respectively. This growth is reflected in the Restricted portion of the Net Assets section of the TVCC Statement of Net Assets for Years Ended August 31, 2003, 2004, and 2005 and is summarized in the table below.

The emphasis on endowment fund growth in recent years has been on those funds held within the TVCC Foundation. The TVCC Foundation began a new capital campaign in 2001. The campaign's overall goal seeks to strengthen scholarship endowment funds in hopes of providing some type of scholarship for every deserving student who desires a college education at TVCC. The resulting endowment growth over the previous three years is reflected in the Restricted portion of the Net Assets section of the TVCC Foundation Statement of Net Assets for Years Ended August 31, 2003, 2004, and 2005 and is summarized in the table below. As the TVCC Foundation is an entity distinct from TVCC, a separate accounting system is maintained for its financial activity. However, the TVCC Foundation is a related entity to TVCC, and its financial statements are included in TVCC's audited Annual Financial Reports.

The combined results of both TVCC endowment funds and TVCC Foundation endowment funds are summarized in the table below.

Endowment Funds, 2003-2005

DOCUMENTATION:

3.10.2 The institution provides financial statements and related documents, including multiple measures for determining financial health as requested by the Commission, which accurately and appropriately represent the total operation of the institution.

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NARRATIVE:

Trinity Valley Community College prepares several documents, including multiple measures for determining financial health as requested by the Commission, which accurately and appropriately represent the total operation of the College.

The Approved Budget is the culmination of the annual budgeting process and contains the official budget as approved by the Board of Trustees.  It reflects budgeted revenue and expense amounts by account for the upcoming fiscal year.

The Balance Sheet is produced monthly and reflects current balances in the asset, liability, and fund balance accounts of each of TVCC's funds.  It is reviewed by the TVCC Board of Trustees.

The Income and Expenditure Statement (March 2005) is prepared in accordance with the fund method of accounting.  It is produced monthly and reports fiscal year-to-date net income.  It also reflects the beginning approved budget, the current adjusted budget, the fiscal year-to-date actual amounts, and the encumbered and unencumbered amounts in TVCC's revenue and expenditure accounts.  It is a key financial control report and is reviewed and discussed by the Board of Trustees [TVCC Board Minutes (April 2005, Item 3)].

TVCC prepares an Annual Financial Report in accordance with the requirements of Texas Education Code 51.005(a) and (b) as directed by the Texas Higher Education Coordinating Board (THECB) and as documented in TVCC Board Policy CDA (Legal). The audited Annual Financial Report for the Year Ended August 31, 2005 discussed in the response to Core Requirement 2.11(a) includes several important measures of financial health.  These include the following:

The Investment Report is produced monthly and reports classification, book and market value, term/maturity date, and interest rates of TVCC's investments and is reviewed by the Board of Trustees.  It is prepared in accordance with TVCC Board Policies CAK (Legal) and CAK (Local).  In addition, as required by the Public Funds Investment Act, quarterly and annual investment reports are posted on the TVCC Business Office Website, Investment Disclosure.  A paper copy of the annual investment report is also submitted to various state agencies.

TVCC submits annually the Financial Profile and Indicators Report to the Commission on Colleges of the Southern Association of Colleges and Schools. TVCC also submits the Integrated Postsecondary Education Data System (IPEDS) Financial Report to the U.S. Department of Education National Center for Education Statistics.

DOCUMENTATION:

3.10.3 The institution audits financial aid programs as required by federal and state regulations. 

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€  Partial Compliance         
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NARRATIVE:

The Board of Trustees engages annually the independent public accounting firm of Smith, Lambright and Associates, P.C. to audit TVCC's compliance with financial aid requirements as described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to TVCC's major federal programs.  The audit is conducted 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,OMB Circular A-133 Audits of States, Local Governments, and Non-Profit Organizations; and State of Texas Single Audit Circular. 

The TVCC Annual Financial Reports discussed in response to Core Requirement 2.11(a) include the documents listed below pertaining to the audit of federal and state financial aid programs. As evidenced by these documents for the years ended August 31, 2003,  2004 and 2005, the audits for those years resulted in no negative findings respective to financial statements, federal awards, or questioned costs.

3.10.4 The institution exercises appropriate control over all its financial and physical resources.

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€  Partial Compliance         
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NARRATIVE:

Policies and procedures are in place to ensure that Trinity Valley Community College exercises appropriate control over all its financial and physical resources.

Financial Resources

The College's annual operating budget process is the primary means for controlling its financial resources and is discussed in the response to Core Requirement 2.11(c). 

The Board of Trustees reviews monthly each of the following fiscal control reports:  (1) the Income and Expenditure Statement, which reports fiscal year-to-date net income, beginning approved budget, year-to-date adjusted current budget, fiscal year-to-date actual expenses, and encumbered and unencumbered amounts, (2) budget amendments, for the month, and (3) the Investment Report [TVCC Board Minutes (April 2005, Item 3)].

The  vice president of fiscal services is responsible for overseeing the financial processes and ensuring that adequate fiscal controls are in place.  Appropriate procedural and internal controls are in place for the primary business processes including accounts payable, accounts receivable, bank account control and reconciliation, capital asset accounting, payroll, general ledger accounting, financial aid accounting, and employee reimbursements.   For detailed procedures, see the TVCC Cash Control Manual and the Reimbursable Travel Expenses Policies and Procedures Manual.

The College uses the encumbrance method of accounting for purchases.  Purchase requisitions (purchase orders) and invoices are approved by the appropriate personnel and submitted to the vice president of fiscal services for final approval [See Board Policy CFD (Local)].  For detailed procedures, see the Disbursement Procedures section of the TVCC Cash Control Manual.

Policies are in place for purchases valued at or above $25,000 as required by TVCC Board Policy CF(Legal); Purchasing and Acquisition and TVCC Board Policy CF (Local), and for major construction expenditures as required by TVCC Board Policy CM (Legal).  These policies state that purchases of this nature shall be made by the method that provides the best value for the College, including but not limited to competitive bidding and competitive sealed proposals.

The Board of Trustees is authorized to issue certain debt instruments as documented in TVCC Board Policies CAD (Legal) and CAH (Legal).

The vice president of fiscal services serves as TVCC's investment officer and is responsible for ensuring that the College's investment policy described in TVCC Board Policies CAK (Legal)  and CAK (Local) is followed.  In accordance with the Public Funds Investment Act (Act), an annual audit is performed.  As documented in the Report on Compliance with Provisions of the Public Funds Investment Act found in the Annual Financial Report for the Year Ended August 31, 2005, no matters were noted with regard to noncompliance with the Act, lack of adherence to TVCC's investment policy, internal control weaknesses over the investment function, or any other investment issues during the audit.

Physical Resources

TVCC exercises appropriate control over its physical resources through various means.  The College's physical plant is managed by the dean of physical facilities; see the response to Comprehensive Standard 3.10.6 for a description of the control processes in place to manage and safeguard facilities including routine maintenance schedules and safety inspections. 

Equipment, including electronics and furniture is tagged by the shipping and receiving department as it arrives on site.  The tag number and other pertinent information is recorded on the Fixed Assets Inventory Report by the inventory control clerk.  Upon disposition of the asset, the tag is removed and returned to the inventory control clerk who removes the item from the report and completes a Change in Inventory Status Form.

TVCC maintains a fleet of vehicles for College business use.  An employee needing a vehicle completes a Vehicle Request Form stating the business purpose of travel and submits the form to the administrative assistant, dean of physical facilities who provides keys to the vehicle.  The vehicles are parked in a campus parking lot which is monitored by security cameras.   After use, the vehicles are returned to the parking lot and locked, and the keys are returned to the administrative assistant.  The fleet is maintained in good working condition, and vehicles are monitored for the effects of use and age and replaced as needed.

As directed by TVCC Board Policies CIA (Legal) and CIA (Local), the Board of Trustees has designated a records management officer who maintains a records management program to effectively control the organization, storage and disposition of all appropriate documents and records of the College.  The process for carrying out this program is on file with the Texas State Library.

DOCUMENTATION:

3.10.5 The institution maintains financial control over externally funded or sponsored research and programs.

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€  Partial Compliance         
€  Non-Compliance 

NARRATIVE:

Trinity Valley Community College does not receive research grants; however, it does receive external funds for some programs and services.  The College maintains institutional control of grants and contracts by providing institutional staff to manage the programs, financial management within the departments and the College's fiscal office, and contractual control by the president, who approves and signs legal documents.

Financial control is also accomplished by subjecting grants and contracts to the College's budget, accounting, and cash control procedures.   As documented in the Grants and Contracts section of the TVCC Cash Control Manual, receipt and disbursement of grant and contract funds are subject to the same policies and procedures as institutional receipts and disbursements. Purchases made with grant funds must follow TVCC's purchasing policies and procedures as outlined in TVCC Board Policies CF(Legal), CF(Local) and CFD (Local), and in the Disbursement Procedures section of the TVCC Cash Control Manual. The College's fiscal office is responsible for monitoring grant compliance, collecting and recording grant and contract revenue and expenditures, and completing and filing financial reports required by grantors.

Grant and contract funds are budgeted and accounted for separately within TVCC's accounting system (Grant Chart of Accounts). Program directors and appropriate staff may access budget and expenditure detail via TVCC's accounting system.

DOCUMENTATION: