Audit and Finance Committee Meeting

Audit and Finance Committee Meeting

December 9, 2009

Present: Trustees Withrow, Gulassa, and Riley, Student Trustee Mouton-Patterson, Presidents Inclan, Adams, Herring, MaryBeth, Connie, Yvonne Dorrough, Jerry Keanny, Gail Waiters, Debbie Budd, Joseph Bielanski, Jr., Debbie Weintraub, Helena Livingston, Pieter deHaan, and Karolyn van Putten,

Audit

Chancellor gave an update on the accreditation letter related to our audit. The items have been reduced to a fixed number. We need to submit a response by March 15th. Trustee Withrow shared this is a qualified opinion from an external auditor which is a serious accusation, some involving State and Federal reporting.

Debbie Budd – Business officers and senior staff held a meeting on Monday. All of the campuses did incredible work for the accreditation teams last spring. Standard III on Finance raised audit issues. Joseph Bielanski has been helping with the District responses. Goal is to address and fix the issues. We have been working around the clock with the BI tool to get the data out from PeopleSoft. After the meeting on Monday, it was felt that the goals can be achieved. When they come back in April, we only need to identify what they addressed in their special letter. Bielanski gave his interpretation of what has been requested, to keep it in scope. Trustee Gulassa asked if they will be satisfied on a restrictive view of their concerns. They are focusing on what they feel are the most significant issues, and will be visiting just for one day. Planning and budget is meeting this Friday to set a response timeline, and the information will proceed to the Board by February. Trustee Gulassa asked if the letter delay is typical. We don’t know why they took so long, as it’s not typical. They can visit on one list of issues, and then find other issues. Our auditors don’t communicate to WASJ at all.

Trustee Riley asked how aggressive a response we should be taking. We need to have the back-up information in order to write the report. Trustee Withrow doesn’t have a comfort level from the auditor that things have been fixed yet. The Chancellor shares that the concerns will be explored in great detail.

Bill Rausch from VTD auditors gave an update on the current missing audit items. There will be a conference call in December 18th, to come back out in January, with an audit report by the end of January.

Jerry Keanny from CIBER was also present to speak.

Yvonne Dorrough gave an update on the missing items, and feels that Financial Services is on track to provide the requested information by December 18th. Some of the information will go out next week. IT department and CIBER department need to be in sync to provide information to the auditors. They are reporting to the Chancellor when items are ready, each part at a time, and then it will be communicated to the auditor team that the information is ready. The auditor needs 3 weeks from the team visit to complete a report. We have to write something by March 15, with the team visit at the beginning of April.

Minh Lam gave an update on his goals. Enrollment side he is very confident that information will be timely submitted.

Jerry gave an update on the goals. Fixed assets test database schedules are ready to provide to the auditors. He is a CPA, as well.

Audit process to use to track software when take data in and then take data out in a report. The report process was described. Trustee Withrow concern how we know what information comes out is good or not. Jerry has 14 years of working with the software, and he’s 100% confident that it’s built correctly and that the information is accurate. Trustee Withrow feels it hasn’t worked in the last 4 years. He would like to be shown something that validates as proof what is presented. Jerry shares that it’s a very complicated process. He’s only been involved with the integrated issues for the last four months.

Minh shares that proof is in the underlying details of what is presented to the auditors.

Trustee Withrow priorities to the audit functions to the report? We’re working on the issues with the issues by December 18th. The auditor will also provide report examples to ensure that we’re on the right track. Brief the Board with a status update, and it will be on the agenda. Trustee Gulassa feels that the information needs to be shown to him, as he doesn’t have a comfort level yet. Trustee Riley feels that this year’s budget is set, and that 2010-2011 will be a critical year in our organization. Trustee Gulassa commented that this year’s budget is late, and he’s concerned that the budget format is problematic. He’s concerned about past budget delays and future.

Chancellor shares that we’ve used the same budget process and format for ten years. As long as there’s been enough funding, it hasn’t received criticism. We need to find a new format and process, which will be explored.

Speaker Bielanski shares that a special report was done by the District in April, and that 3 of there issues has been resolved at the District. Jacque Bell commented that one issue has been resolved by the accreditation team due to a misunderstanding, and has been addressed and corrected.

Areas of expertise will also be brought in to correct all problems by March 15th, with adequate responses provided to the auditors by their deadline. Purchasing document is being tightened and will be presented to the Board.

Yvonne D. shared her understanding of when different findings can be provided. A status update will be given at the December 15th Board meeting.

Speaker Stark audit, budget book and ACCJJ shares that the audit is just one check. She feels it suggests a bigger problem. She asks if we have accurate timely fiscal data, ordering and purchasing, accounting that we don’t have yet. She feels that the budget book is another example of where our district needs fixing and is inaccurate.

Trustee Withrow would like to finish the audit portion.

Bill from VTD provided an audit summary. He doesn’t have the current information of how many of the findings have been met, but they will review this with Peralta management as soon as it becomes available. Withrow requests a report of the number of items on that by December 15th. Bill feels it’s too early to present that prior to finishing the audit, but he will see what they can produce.

Budget

Chancellor gave an update that the budget book will be reviewed and updated. Withrow shares that most of the people with an interest in the budget don’t understand it.

The Ventura budget format was reviewed.

http://www.vcccd.edu/departments/budget/budget_documents.shtml

The Goal is to have a more readable fashion with a summary. Trustee Gulassa shared that some written requests for information are ignored, and that communication is not good to provide requested information, which breeds mistrust. People will make sacrifices if they feel that the information is clear and provided to them. The advisory component section also needs improvement. The Chancellor shared that the budget format can be reviewed by shared government, and a revised budget can be submitted later in a better format. Withrow doesn’t feel it will take that long to revise the budget. Chancellor feels we have to be realistic about the work related to the audit.

Helena L. looked at the Ventura budget, and asked if there is a limitation with our financial system to just not be able to ask good questions to be able to write good queries to produce good answers. She feels that the District has never truly recovered from our bankruptcy in the 80s, and that mistrust has never been restored to release financial information too clearly. The intent of the Board is that they want a transparent budget. Withrow recommends that the Board not the budget, and he moves from the committee that the committee recommends this.

Speaker Black asked if base adopted position controls had errors by percentage and other omitted. The response was that it has been in other budgets over the years. Assumptions should be included in the budget. Debbie Budd gave an update on the process that’s being used to correct those omissions, with retirements and grant positions entered into the system, and will be corrected. Colleges validate data via PAs. The tentative budget done in July has more details, and then corrections are then made in the proposed final budget. Our budget does have a glossary in the back with many terms defined. Also, the Fi Services needs to receive information timely, otherwise the budget will be delayed. Raises to the PFT continuing on, needs a clear by-in. Expenditure base is the way to calculate the 50% law. It is complicated how the international students’ budgets are incorporated to pay for these items at all times. International funds not segregated, but go into general funds. It is in the unrestricted budget as they are in the same classrooms, to account for raises with more flexibility here. The colleges then don’t see how they benefit from those students. If the funds are restricted, then it’s not covered by the 50% law, and this needs to be confirmed.

Speaker is concerned about the spring. She asks about enrollment. Spring 7000 FTES. She shares that enrollment in her classes is high. New students won’t have EOPS, which is a major issue. Chancellor shares that we will have to add some sections, and that we will have to backfill support services and EOPS, some of which is State mandated. DSPS staff has been exploring other ways to be more cost effective, and exploring areas where services may be delivered differently. That information won’t be included in the new budget. We don’t know how the funds will be allocated yet. Susan shares that some students haven’t received their Financial Aid yet, much of which has been delayed by documentation delays. We haven’t seen students en masse protesting Financial Aid. How communicate and then control the number in the spring? The colleges have their budgets that have been allocated to the Colleges in general and categorical. Low enrolled classes are being cancelled, and then full classes will be closed. This is the first year that a 1351 year budget has been given. We will be at least 1000 unfunded FTES this year Debbie Budd projects. There is legislation in WA looking into building into the Fed budget increased enrollment for the spring. SF cancelled 800 classes, and we cancelled 400 classes. FTE is the fall and spring for 10 months, with some exceptions, such as for a coach. President Adams shared that the State budget has blocked access. We have a campaign now telling current students to enroll now. Cal State and UC students are seeing that our system is quite a deal, and our traditional students are suffering.

Speaker Stark urges them not to pass it as it is, and require that inaccuracies and discrepancies by corrected. She feels that less that acceptable standards shouldn’t be approved. Chancellor feels that we’re spending money monthly in the absence of a budget. Presentation style won’t have any different information within. Thursday or Friday the corrections will be ready, after college review.

Student Trustee also concurs that the budget not be adopted until it is clear. The State is willing to accept our 311 letter by the end of December. Our reports occur with a domino effect, but that actions have consequences. The State Chancellor’s office needs the 311 letter. Speaker Stark asks that Yvonne D. get help in her department. Trustee Gulassa concurs, that the committee recommends that the budget not pass as it is. If we don’t pass a budget, it could affect our ability to sell our bonds.

Respectfully submitted,

Roxanne Epstein

466-7203