Pinal County Community College District single audit reporting package

              Pinal County Community College District
(Central Arizona College)
Single Audit Reporting Package
June 30, 2001
Pinal County Community College District
(Central Arizona College)
Single Audit Reporting Package
June 30, 2001
Table of Contents
Report on Audit of Financial Statements Page
Independent Auditor's Report.........................................................................................................1
Balance Sheet - Current Funds, Loan Fund, Plant Funds,
and Agency Fund....................................................................................................................2
Statement of Changes in Fund Balances - Current Funds,
Loan Fund, and Plant Funds ..................................................................................................4
Statement of Current Funds Revenues, Expenditures, and
Other Changes........................................................................................................................5
Notes to Financial Statements........................................................................................................6
Supplementary Information
Schedule of Expenditures of Federal Awards ........................................................................16
Reports on Compliance and Internal Control
Report on Compliance and on Internal Control over Financial
Reporting Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards.............................................................18
Report on Compliance with Requirements Applicable to Each
Major Program and on Internal Control over Compliance in
Accordance with OMB Circular A-133....................................................................................20
Schedule of Findings and Questioned Costs
Summary of Auditor's Results.................................................................................................22
Financial Statement Findings .................................................................................................23
Federal Award Findings and Questioned Costs.....................................................................24
District Responses
Corrective Action Plan.............................................................................................................27
Summary Schedule of Prior Audit Findings............................................................................28
See accompanying notes to financial statements
2
Pinal County Community College District
(Central Arizona College)
Balance Sheet
June 30, 2001
Current Funds Plant Funds
Unrestricted Total
Auxiliary Current Loan Retirement of Investment Agency
General Enterprises Restricted Funds Fund Unexpended Indebtedness in Plant Fund
Assets
Cash and cash equivalents $ 531,723 $ 14,000 $ 772,933 $ 1,318,656 $ 12,964 $ 1,371,755 $ 545,315 $ 364,750
Cash and investments held by trustees 2,133,723
Receivables:
Property taxes (net of allowances) 1,226,003 1,226,003 25,999
Government grants and contracts 370,987 370,987
Other (net of allowances) 552,451 330,980 883,431 58,276 48 6,636 23,151
Due from other funds 1,154,288 20,000 44,630 1,218,918 520,000
Inventories 48,927 311,955 360,882
Property, buildings, and equipment:
Land and improvements $ 2,545,147
Buildings 40,256,482
Equipment 16,434,405
Library books 1,532,766
Total assets $ 3,513,392 $ 676,935 $ 1,188,550 $ 5,378,877 $ 71,240 $ 1,891,803 $ 2,711,673 $ 60,768,800 $ 387,901
(Continued)
See accompanying notes to financial statements.
3
Pinal County Community College District
(Central Arizona College)
Balance Sheet
June 30, 2001
(Continued)
Current Funds Plant Funds
Unrestricted Total
Auxiliary Current Loan Retirement of Investment Agency
General Enterprises Restricted Funds Fund Unexpended Indebtedness in Plant Fund
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 183,492 $ 109,236 $ 29,287 $ 322,015 $ 178,507
Accrued payroll and related
expenses
1,889,527
98,608
35,570
2,023,705
Insurance claims payable 127,950 127,950
Deposits held in custody for
others
$ 387,901
Due to other funds 564,631 892,370 76,530 1,533,531 $ 1,629 203,758
Interest payable $ 522,087
Pledged revenue obligations
payable
710,000
$ 10,510,000
Bonds payable 745,000 9,025,000
Installment purchase contracts
payable
685,000
Deferred revenue 74,566
Total liabilities 2,765,600 1,100,214 141,387 4,007,201 1,629 382,265 2,051,653 20,220,000 387,901
Fund balances (deficits):
Restricted – general 1,047,163 1,047,163 69,611 1,509,538 660,020
Unrestricted – general 747,792 (423,279) 324,513
Net investment in plant 40,548,800
Total fund balances (deficits) 747,792 (423,279) 1,047,163 1,371,676 69,611 1,509,538 660,020 40,548,800
Total liabilities and fund balances $ 3,513,392 $ 676,935 $ 1,188,550 $ 5,378,877 $ 71,240 $ 1,891,803 $ 2,711,673 $ 60,768,800 $ 387,901
See accompanying notes to financial statements.
4
Pinal County Community College District
(Central Arizona College)
Statement of Changes in Fund Balances
Year Ended June 30, 2001
Current Funds Plant Funds
Unrestricted Total
Auxiliary Current Loan Retirement of Investment
General Enterprises Restricted Funds Fund Unexpended Indebtedness in Plant
Revenues and other additions:
Unrestricted current revenues $ 23,429,587 $ 3,911,219 $ 27,340,806
Property taxes $ 520,000 $ 296,826
State appropriations 662,600
Government grants and contracts $ 4,654,269 4,654,269 78,990
Private gifts, grants and contracts 151,321 151,321 50,000
Investment income 100,699 35,816
Expended for plant facilities (including $237,911
of expenditures charged to current funds)
$ 1,807,801
Retirement of indebtedness 1,455,000
Total revenues and other additions 23,429,587 3,911,219 4,805,590 32,146,396 1,333,299 411,632 3,262,801
Expenditures and other deductions:
Educational and general expenditures 21,156,133 3,931,850 25,087,983
Auxiliary enterprises expenditures 4,295,581 13,867 4,309,448
Administrative and collection costs $ 165 1,926
Expended for plant facilities 1,569,890
Retirement of indebtedness 1,455,000
Interest on indebtedness 1,040,708
Total expenditures and other deductions 21,156,133 4,295,581 3,945,717 29,397,431 165 1,569,890 2,497,634
Transfers among funds - additions (deductions):
Mandatory transfers for:
Principal and interest
(2,121,152)
(2,121,152)
(42)
2,121,194
College matching portion of government grants (65,141) 65,141
Total mandatory transfers (2,186,293) 65,141 (2,121,152) (42) 2,121,194
Nonmandatory transfers (net) 132,520 132,520 (132,520)
Total transfers (2,053,773) 65,141 (1,988,632) (132,562) 2,121,194
Net increase (decrease) for the year 219,681 (384,362) 925,014 760,333 (165) (369,153) 35,192 3,262,801
Fund balances (deficits), July 1, 2000 528,111 (38,917) 122,149 611,343 69,776 1,878,691 624,828 37,285,999
Fund balances (deficits), June 30, 2001 $ 747,792 $ (423,279) $ 1,047,163 $ 1,371,676 $ 69,611 $ 1,509,538 $ 660,020 $ 40,548,800
See accompanying notes to financial statements.
5
Pinal County Community College District
(Central Arizona College)
Statement of Current Funds Revenues, Expenditures, and Other Changes
Year Ended June 30, 2001
Unrestricted
Auxiliary Total Current
General Enterprises Total Restricted Funds
Revenues:
Property taxes $ 13,585,699 $ 13,585,699 $ 13,585,699
State appropriations 6,165,100 6,165,100 6,165,100
Government grants and contracts $ 3,729,255 3,729,255
Private gifts, grants, and contracts 151,321 151,321
Tuition and fees 3,102,823 $ 1,964,529 5,067,352 5,067,352
Investment income 149,074 149,074 149,074
Bookstore sales 1,197,669 1,197,669 1,197,669
Food services sales 115,779 115,779 115,779
Dormitory rentals 468,266 468,266 468,266
Administrative fees 359,803 359,803 359,803
Other 67,088 164,976 232,064 232,064
Total revenues 23,429,587 3,911,219 27,340,806 3,880,576 31,221,382
Expenditures and mandatory transfers:
Educational and general expenditures:
Instruction 9,956,191 9,956,191 1,459,347 11,415,538
Academic support 1,841,589 1,841,589 125,610 1,967,199
Student services 1,467,463 1,467,463 202,485 1,669,948
Institutional support (administration) 4,631,774 4,631,774 100,328 4,732,102
Operation and maintenance of plant 3,051,004 3,051,004 7,376 3,058,380
Public service 64,579 64,579 64,579
Scholarships 143,533 143,533 2,036,704 2,180,237
Total educational and general expenditures 21,156,133 21,156,133 3,931,850 25,087,983
Auxiliary enterprises expenditures 4,295,581 4,295,581 13,867 4,309,448
Total expenditures 21,156,133 4,295,581 25,451,714 3,945,717 29,397,431
Mandatory transfers for:
Principal and interest 2,121,152 2,121,152 2,121,152
College matching portion of government grants 65,141 65,141 (65,141)
Total mandatory transfers 2,186,293 2,186,293 (65,141) 2,121,152
Total expenditures and mandatory transfers 23,342,426 4,295,581 27,638,007 3,880,576 31,518,583
Other transfers and additions (deductions):
Excess of restricted receipts over transfers to revenues 925,014 925,014
Nonmandatory transfers (net) 132,520 132,520 132,520
Net increase (decrease) in fund balances $ 219,681 $ (384,362) $ (164,681) $ 925,014 $ 760,333
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
6
Note 1 - Summary of Significant Accounting Policies
The accounting policies of the Pinal County Community College District conform to
generally accepted accounting principles as applied to governmental colleges and
universities in the AICPA College Guide model as defined in Governmental Accounting
Standards Board Statement No. 15. A summary of the District's more significant
accounting policies follows.
A. Reporting Entity
The District is a special-purpose government that is governed by a separately elected
governing body. It is legally separate and fiscally independent of other state and local
governments. Furthermore, there are no component units combined with the District
for financial statement presentation purposes, and it is not included in any other
governmental reporting entity.
The financial activities of the Central Arizona College Foundation are not included in
the District's financial statements. The Foundation is a nonprofit corporation controlled
by a separate board of directors. The Foundation’s goals are to promote educational
programs and District objectives.
B. Fund Accounting
The District's accounts are maintained in accordance with the principles of fund
accounting to ensure that limitations and restrictions on the District's available
resources are observed. The principles of fund accounting require that resources be
classified for accounting and reporting purposes into funds in accordance with the
activities or objectives specified for those resources. Accounts are separately
maintained for each fund; however, in the accompanying financial statements, funds
that have similar characteristics have been combined into fund groups. Accordingly,
financial transactions are reported by fund groups as if each fund group was a single
fund. A description of the funds follows.
The Current Funds account for resources that will be expended in the near term for
operating purposes in performing the District's primary and support missions, which
are instruction, academic support, student services, institutional support, operation and
maintenance of plant, public service, scholarships, and auxiliary enterprises. The
individual Current Funds are described more fully as follows:
The General Fund accounts for all current financial resources not required to be
accounted for in the other Current Funds.
The Auxiliary Enterprises Fund accounts for transactions of substantially self-supporting
auxiliary activities that perform services primarily to students, faculty,
and staff, such as bookstores, food services, dormitories, and intercollegiate
athletics.
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
7
The Restricted Fund accounts for resources that are expended only for operating
purposes specified by donors or other outside agencies. The Restricted Fund’s
revenues are reported in the statement of current funds revenues, expenditures,
and other changes only to the extent of expenditures and net mandatory transfers.
Amounts received in excess of expenditures and net mandatory transfers are
reported as additions to the fund balance during the year, and may be subject to
repayment if not expended.
The Loan Fund accounts for loans and resources available for loans to students,
faculty, and staff. The loans are financed primarily by private gifts and grants. Interest
on student loans is recorded only when received.
The Plant Funds account for transactions relating to the District's investment in plant
assets such as property, buildings, and equipment. The individual Plant Funds are
described more fully as follows:
The Unexpended Plant Fund accounts for resources available to finance the
District’s acquisition, construction, or improvement of plant assets. Expenditures
for construction in progress are accumulated in this fund until the project is
completed or until the end of the fiscal year and then transferred to the Investment
in Plant Fund. Resources restricted for renewals and replacements of existing
District plant assets are also recorded in the Unexpended Plant Fund.
The Retirement of Indebtedness Plant Fund accounts for the accumulation of
resources for payment of principal, interest, and other debt service charges,
including contributions for sinking funds relating to debt incurred in financing
District plant assets.
The Investment in Plant Fund accounts for the costs of the District's plant assets
and the associated liabilities. Assets recorded in the Investment in Plant Fund may
be acquired from resources in the Unexpended Plant, Auxiliary Enterprises, and
Restricted Funds.
The Agency Fund accounts for resources held by the District as custodian or fiscal
agent for students, faculty, staff, and other organizations; therefore, the transactions
within this fund do not affect the statement of changes in fund balances.
C. Basis of Accounting
The financial statements are presented on the accrual basis of accounting. The
statement of current funds revenues, expenditures, and other changes is a statement
of financial activities of current funds related to the current reporting period. It does not
claim to present the results of operations, or the net income or loss for the period as
would a statement of income, or a statement of revenues and expenses.
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
8
D. Cash and Investments
The District’s cash and cash equivalents are considered to be cash on hand, demand
deposits, cash and investments held by the County Treasurer, and highly liquid
investments.
Nonparticipating interest-earning investment contracts are stated at cost. Money
market investments and participating interest-earning investment contracts with a
remaining maturity of one year or less at time of purchase are stated at amortized cost.
All other investments are stated at fair value.
E. Inventories
The bookstore inventory is stated at cost by specific identification. All other inventories
are stated at the lower of cost (first-in, first-out method) or market.
F. Property, Buildings, and Equipment
Property, buildings, and equipment are capitalized at cost if purchased, or estimated
fair market value at the time received in the case of gifts. Major outlays for assets or
improvements to them are capitalized as projects are constructed. Interest incurred
during the construction phase of the project is capitalized net of interest earned on the
invested proceeds over the same period.
To the extent that current fund monies are used to finance such assets, the amounts
so provided are accounted for as expenditures in the case of normal acquisition or
replacement of movable equipment and library books; mandatory transfers (transfers
among funds resulting from legally binding agreements) in the case of required
provisions for debt amortization and interest, and equipment renewal and replacement;
or nonmandatory transfers (transfers among funds made at the discretion of the
Governing Board) in other cases.
Depreciation on buildings and equipment is not recorded.
G. Compensated Absences
Compensated absences consist of vacation leave and a calculated amount of sick
leave earned by employees based on services already rendered. Employees may
accumulate unused vacation leave to a maximum amount which varies depending on
their employee classification and years of service. Any vacation hours in excess of the
maximum amount that are unused at year-end are forfeited. Generally, sick leave
benefits provide for ordinary sick pay and are cumulative up to a maximum but do not
vest with employees and therefore, are not accrued. However, for employees with 5 or
more years of service, 50% of the unused sick leave benefits do vest at employee
termination. Sick leave benefits are accrued to the extent it is probable that the
employer will compensate employees through cash payments. Upon termination of
employment, all unused and unforfeited vacation and sick leave benefits are paid to
employees. Accordingly, these benefits are accrued as a liability in the financial
statements.
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
9
H. Investment Income
Investment income is composed of interest, dividends, and net changes in the fair
value of applicable investments. Income earned from investments purchased with
pooled monies is allocated monthly to each of the District’s funds based on cumulative
daily positive cash balances.
I. Summer Sessions
Summer sessions revenues and expenditures are reported in the General and
Auxiliary Enterprise Funds within the fiscal year in which the total summer sessions
program is predominantly conducted.
J. Financial Aid
When the District does not select the recipients for student financial aid, such awards
are accounted for within the Agency Fund (except for Pell grants that are included in
the Current Restricted Fund) and, consequently, are not included in the statement of
changes in fund balances. During the year ended June 30, 2001, the District disbursed
$24,846 in such student awards, primarily for private scholarships.
Note 2 - Deposits and Investments
Arizona Revised Statutes (A.R.S.) require the District to deposit special tax levies for
the District’s maintenance or capital outlay with the County Treasurer.
The statutes do not require the District to deposit other public monies in its custody
with the County Treasurer; however, the District must act as a prudent person dealing
with the property of another when making investment decisions about those monies.
Deposits – The District’s deposits at June 30, 2001, were entirely covered by federal
depository insurance or by collateral held by the District’s custodial bank in the
District’s name.
Investments - At June 30, 2001, the District’s investments consisted of the following:
Fair
Value
Cash and investments held by the County Treasurer $ 2,733,230
Mutual funds – invested in U.S. government securities 2,133,539
Total $ 4,866,769
The District’s investment in the County Treasurer’s investment pool represents a
proportionate interest in that pool’s portfolios; however, the District’s portion is not
identified with specific investments and is not subject to custodial credit risk. The same
is true for the District’s investments in mutual funds. There is no regulatory oversight
body provided for the County Treasurer’s investment pool, and the pool’s structure
does not provide for shares.
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
10
A reconciliation of cash and investments to amounts shown on the balance sheet
follows.
Cash and investments: Balance Sheet:
Cash on hand $ 19,220 Cash and cash equivalents $ 3,613,440
Carrying amount of deposits 861,174 Cash and investments held by trustees 2,133,723
Reported amount of investments 4,866,769
Total $ 5,747,163 Total $ 5,747,163
Note 3 - Property Taxes Receivable
The Pinal County Treasurer is responsible for collecting property taxes for all
governmental entities within the County. The County levies the property taxes due the
District in August. Two equal installments, payable in October and March, become
delinquent after the first business day in November and May. A lien assessed against
real and personal property attaches on the first day of January preceding the
assessment and levy.
Property taxes receivable consist of uncollected property taxes as determined from the
records of the County Treasurer's Office, and at June 30, 2001, the uncollected
property taxes and related allowances for uncollectibles were as follows:
Fiscal Year
General
Fund
Retirement of
Indebtedness
Plant Fund
2000-01 $ 595,930 $ 11,590
Prior 679,719 15,382
1,275,649 26,972
Less allowances for uncollectibles (49,646) (973)
Net total $ 1,226,003 $ 25,999
Note 4 - Other Receivables
Other receivables are shown net of the related allowances for uncollectibles. A
summary of other receivables and related allowances for uncollectibles at June 30,
2001, follows:
General
Fund
Auxiliary
Enterprises
Fund
Loan
Fund
Retirement of
Indebtedness
Plant Fund
Agency
Fund
Unexpended
Plant Fund
Other receivables $ 574,822 $ 412,790 $ 86,030 $ 6,636 $ 23,151 $ 48
Less allowances for uncollectibles (22,371) (81,810) (27,754) - - -
Total $ 552,451 $ 330,980 $ 58,276 $ 6,636 $ 23,151 $ 48
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
11
Note 5 - Bonds Payable
Revenue Bonds Payable - The District’s revenue bonds of June 1, 1973, were issued
to provide monies to construct dormitories, a student union, and appurtenant facilities.
The bonds are secured by revenues of the Auxiliary Enterprises Fund and are callable
with interest payable semiannually. In accordance with the bond requirements, a repair
and replacement reserve account is maintained with the bond trustee, and the
accumulated balance is at the minimum requirement of $50,000.
The District’s revenue bonds of March 1, 1998, were issued to construct a student
services building, a dormitory, a shipping and receiving facility, and a computer
commons facility. The bonds are secured by tuition, student fees, and student rental
revenue of the District and are callable with interest payable semiannually.
Principal and interest requirements at June 30, 2001, were as follows:
Description
Interest Rates
Maturities
Outstanding
Principal
Revenue Bonds,
Series of 1973
5.25 - 5.30%
7/1/01-04
$ 70,000
Revenue Bonds,
Series of 1998
4.75 - 6.50%
7/1/01-14
8,815,000
$ 8,885,000
Revenue bond debt service requirements to maturity, including $4,204,131 of interest,
are as follows:
Year ending June 30,
2002 $ 772,111
2003 772,058
2004 776,869
2005 775,396
2006 753,998
Thereafter 9,238,699
Total $ 13,089,131
General Obligation Bonds Payable - General obligation bonds payable at June 30,
2001, consisted of the outstanding general obligation bonds presented below. The
bonds are generally noncallable with interest payable semiannually.
Principal and interest requirements at June 30, 2001, were as follows:
Description
Interest Rates
Maturities
Outstanding
Principal
School Improvement
Bonds, Series of 1972
.05 - 5.6%
7/1/01-02
$ 885,000
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
12
General obligation bond debt service requirements to maturity, including $12,245 of
interest, are as follows:
Year ending June 30,
2002 $ 437,130
2003 460,115
Total $ 897,245
Note 6 - Pledged Revenue Obligations Payable
The District’s pledged revenue obligations of March 1, 1998, were issued to provide
monies to construct a student services building, a shipping and receiving facility, a
dormitory, and a computer commons facility. The obligations are secured by tuition,
student fees, and student rental revenues of the District and are callable with interest
payable semiannually.
Principal and interest requirements at June 30, 2001, were as follows:
Outstanding
Description Interest Rate Maturities Principal
Pledged Revenue Obligations
Series of 1998 4.5 - 5.25% 7/1/01-12 $ 11,220,000
Pledged revenue obligations debt service requirements to maturity, including
$3,695,743 of interest, are as follows:
Year ending June 30,
2002 $ 1,248,282
2003 1,250,545
2004 1,246,345
2005 1,244,468
2006 1,242,715
Thereafter 8,683,388
Total $ 14,915,743
Note 7 - Installment Purchase Contracts Payable
During the fiscal year 2000-01 the District entered into two installment purchase
agreements for the acquisition of two parcels of vacant land adjoining the Superstition
Mountain campus. The total purchase price of both properties was $1,009,875. The
future minimum payments required under the contracts at June 30, 2001, including
interest at 10 percent, are as follows:
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
13
Year ending June 30,
2002 $ 526,968
2003 233,357
Total minimum payments 760,325
Less amount representing interest 75,325
Present value of minimum payments $ 685,000
Note 8 - Risk Management
The District is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural
disasters. The District carries commercial insurance for all such risks of loss, including
workers' compensation and accident insurance. Settled claims resulting from these
risks have not exceeded commercial insurance coverage in any of the past three fiscal
years.
In addition, the District finances uninsured risks of loss for certain health and eye care
benefits to eligible employees and their dependents, which are accounted for in the
General Fund. The health care plans provide coverage for claims up to $45,000 for
each individual not to exceed an annual stop loss of $1,000,000. The District
purchases commercial insurance for claims in excess of this health care coverage.
The eye care plan offers substantially reduced prices for eye examinations and
eyewear. Settled claims have not exceeded the District's coverage for either plan in
any of the past three fiscal years. An independent administrator provides claim and
recordkeeping services for the plans.
The insurance claims payable liability of $127,950 reported on the balance sheet at
June 30, 2001, is the estimated ultimate cost of settling claims that have been reported
but not settled and claims that have been incurred but not reported. This estimate is
based on historical data for health and eye care insurance claims reported during the
year, prior-year claims of continuing duration, and claims incurred but not reported as
of June 30, 2001. Changes in the District's claims payable liability amounts for the
years ended June 30, 2001 and 2000, were as follows:
2000 2001
Claims payable, beginning of year $ 132,874 $ 251,502
Current-year claims and changes
in estimates
1,431,955
1,703,618
Net claim payments (1,313,327) (1,827,170)
Claims payable, end of year $ 251,502 $ 127,950
Pinal County Community College District
(Central Arizona College)
Notes to Financial Statements
June 30, 2001
14
Note 9 - Retirement Plan
Plan Description - The District contributes to a cost-sharing multiple-employer defined
benefit pension plan administered by the Arizona State Retirement System. Benefits
are established by state statute and generally provide retirement, death, long-term
disability, survivor, and health insurance premium benefits. The System is governed by
the Arizona State Retirement System Board according to the provisions of A.R.S.
Title 38, Chapter 5, Article 2.
The System issues a comprehensive annual financial report that includes financial
statements and required supplementary information. The most recent report may be
obtained by writing the System, 3300 North Central Avenue, PO Box 33910, Phoenix,
AZ 85067-3910 or by calling (602) 240-2001 or (800) 621-3778.
Funding Policy - The Arizona State Legislature establishes and may amend active
plan members' and the District's contribution rate. For the year ended June 30, 2001,
active plan members and the District were each required by statute to contribute at the
actuarially determined rate of 2.66 percent (2.17 percent retirement and 0.49 percent
long-term disability) of the members' annual covered payroll. The District's
contributions to the System for the years ended June 30, 2001, 2000, and 1999, were
$348,711, $318,647, and $364,590, respectively, which were equal to the required
contributions for the year.
Note 10 - Subsequent Events
The District began construction in the subsequent fiscal year on an extension to the
Peace Office Training Center, which will cost approximately $1,500,000. The
construction project is being funded by state and local grants.
Note 11 - Implementation of GASB Statement No. 35
Beginning with fiscal year 2002, the District will prepare its external financial reports
following the requirements of GASB Statement No. 35, Basic Financial Statements—
and Management’s Discussion and Analysis—for Public Colleges and Universities.
Implementing this standard will significantly change the accounting principles and
reporting format used by the District in future financial reports.
15
Supplementary Information
See accompanying notes to schedule.
16
Pinal County Community College District
(Central Arizona College)
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2001
Pass-Through
CFDA Grantor’s
Federal Grantor/Pass-Through Grantor/Program Title Number Number Expenditures
U.S. Department of Education
Preparing Tomorrow’s Teachers to Use Technology 84.342 $ 325,376
Student Financial Aid Cluster
Federal Supplemental Educational Opportunity Grants 84.007 46,372
Federal Work-Study Program 84.033 56,183
Federal Pell Grant Program 84.063 1,833,389
Annual Interest Grant 84.Unknown 74,566
Higher Education – Institutional Aid 84.031 190,119
Special Education – Personnel Preparation to Improve
Services and Results 84.325 173,239
Passed through Arizona Department of Education
Adult Education - State Grant Program 84.002 01SAEBS-170526-01A & 100,000
01FAEABE-170526-02A
Passed through State Board of Directors
for Community Colleges
Vocational Education - Basic Grants to States 84.048 30008/30108 195,706
Tech-Prep Education 84.243 00FVEDTP-070734-01A 6,000
Passed through Arizona Commission
for Postsecondary Education
Leveraging Educational Assistance Partnership 84.069 None 44,108
Total U.S. Department of Education 3,045,058
U.S. Department of Health and Human Services
Passed through Arizona Department of Economic Security
Child Development Associate Scholarships 93.614 E5401399 315,445
Child Care and Development Block Grant 93.575 E5400368 162,502
Total U.S. Department of Health and Human Services 477,947
U.S. Department of Justice
Passed through Arizona Police Officers
Standards and Training Board
Police Corps 16.712 None 14,638
U.S. Small Business Administration
Passed through Maricopa County Community College District
Small Business Development Center 59.037 0-7620-0003-08 & 51,276
01-7620-0003-09
National Aeronautics and Space Administration
Passed through Cuyahoga Community College
SEMMA 43.Unknown None 13,334
U.S. Department of Housing and Urban Development
College Housing Debt Service Grant 14.Unknown 4,424
Total Expenditures of Federal Awards $ 3,606,677
17
Pinal County Community College District
(Central Arizona College)
Notes to Schedule of Expenditures of Federal Awards
Year Ended June 30, 2001
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal
grant activity of Pinal County Community College District and is presented on the full
accrual basis of accounting. The information in this schedule is presented in
accordance with the requirements of OMB Circular A-133, Audits of States, Local
Governments, and Non-profit Organizations. Therefore, some amounts presented in
this schedule may differ from amounts presented in, or used in the preparation of, the
financial statements.
Note 2 - Catalog of Federal Domestic Assistance (CFDA) Numbers
The program titles and CFDA numbers were obtained from the federal or pass-through
grantor or the 2001 Catalog of Federal Domestic Assistance.
Note 3 - Subrecipients
Of the federal expenditures presented in the schedule, Pinal County Community
College District provided federal awards to subrecipients as follows:
Amount
Federal CFDA Provided to
Program Title Number Subrecipients
Child Development Associate Scholarships 93.614 $ 52,248
Pinal County Community College District
(Central Arizona College)
Schedule of Findings and Questioned Costs
Year Ended June 30, 2001
22
Summary of Auditor's Results
Financial Statements
Type of auditor's report issued: unqualified
YES NO
Material weaknesses identified in internal control over financial reporting? X
Reportable conditions identified not considered to be material weaknesses? X
(None reported)
Noncompliance material to the financial statements noted? X
Federal Awards
Material weaknesses identified in internal control over major programs? X
Reportable conditions identified not considered to be material weaknesses? X
(None reported)
Type of auditor's report issued on compliance for major programs: qualified
Any audit findings disclosed that are required to be reported in accordance with
Circular A-133 (section .510[a])? X
Identification of major programs:
CFDA Number Name of Federal Program or Cluster
84.342 Preparing Tomorrow’s Teachers to Use Technology
93.614 Child Development Associate Scholarships
Student Financial Aid Cluster of Programs:
84.007 Federal Supplemental Educational Opportunity Grants
84.033 Federal Work-Study Program
84.063 Federal Pell Grant Program
Dollar threshold used to distinguish between Type A and Type B programs: $300,000
Auditee qualified as low-risk auditee? X
Other Matters
Auditee's summary schedule of prior audit findings required to be reported in
accordance with Circular A-133 (section .315[b])? X
Pinal County Community College District
(Central Arizona College)
Schedule of Findings and Questioned Costs
Year Ended June 30, 2001
23
Financial Statement Findings
No matters reported.
Pinal County Community College District
(Central Arizona College)
Schedule of Findings and Questioned Costs
Year Ended June 30, 2001
24
Federal Award Findings and Questioned Costs
Item: 01-1
CFDA Number: 84.342
Program: Preparing Tomorrow’s Teachers to Use Technology
Agency: U.S. Department of Education
Award Years: September 15, 1999 to September 30, 2001
Award Number: P342A990211
Questioned Costs: N/A
Condition: The District did not establish internal control procedures to account for and document
the District’s required matching contributions to the program. The District was required to
contribute to the project an amount from nonfederal sources equal to the amount of the grant. A
line-item budget of the nonfederal contributions, prepared during the awarding process, was the
only information maintained by the District. The District expended $325,376 of federal monies
during the fiscal year ended June 30, 2001. Reasonable assurance as to the District’s compliance
with the matching requirement could not be obtained because of the lack of sufficient
documentation.
Recommendation: The District should establish internal control procedures that would provide the
necessary documentation to support and substantiate the District’s compliance with the program’s
matching requirements.
Item: 01-2
CFDA Numbers: 93.614
Program: Child Development Associate Scholarships
Agency: U.S. Department of Health and Human Services
Pass-through Entity: Arizona Department of Economic Security
Award Year: October 1, 2000 to September 30, 2001
Award Number: E5401399
Questioned Costs: N/A
Pinal County Community College District
(Central Arizona College)
Schedule of Findings and Questioned Costs
Year Ended June 30, 2001
25
Condition: Subrecipients were not monitored for their respective responsibilities regarding
eligibility. The District was unaware that OMB Circular A-133, Subpart D §.440 (d) (3) requires the
pass-through entity to monitor the activities of subrecipients as necessary to ensure that Federal
awards are used for authorized purposes in compliance with laws, regulations, and the provisions
of contracts or grant agreements and that performance goals are achieved. The District provided
$52,248 of federal awards to subrecipients.
Recommendation: In order to comply with the requirements set forth by OMB Circular A-133,
subrecipient awards should be tested by the District for compliance related to eligibility.
26
District Responses
Pinal County Community College District
(Central Arizona College)
Corrective Action Plan
Year Ended June 30, 2001
27
Item: 01-1
CFDA Number: 84.342
Program: Preparing Tomorrow’s Teachers to Use Technology
Contact Person: Dennis Jenkins, Vice President, Finance and Administrative Services
Anticipated Completion Date: June 30, 2002
Corrective Action: The District is reviewing procedures and internal controls to account for and
document the District’s required matching contributions. The District will make the changes
necessary to ensure matching requirements are adequately accounted for and documented.
Item: 01-2
CFDA Number: 93.614
Program: Child Development Associate Scholarships
Contact Person: Barbara Mezzio, Director for Early Care and Education
Anticipated Completion Date: July 1, 2002
Corrective Action: Procedures have been modified to ensure that sub-recipients are monitored
regarding eligibility for funding and that documentation of eligibility is adequately maintained.
Pinal County Community College District
(Central Arizona College)
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2001
28
Status of Federal Award Findings and Questioned Costs
Finding Numbers: 99-2, 00-2
CFDA Numbers: 84.063, 84.268, 84.033, and 84.007
Programs: Student Financial Aid Cluster of Programs
Status: Corrected