Standard IIID

Standard IIID
Financial Resources

Financial resources are sufficient to support student learning programs and services and to improve institutional effectiveness. The distribution of resources supports the development, maintenance, and enhancement of programs and services. The institution plans and manages its financial affairs with integrity and in a manner that ensures financial stability. The level of financial resources provides a reasonable expectation of both short-term and long-term financial solvency. Financial resources planning is integrated with institutional planning.

DESCRIPTIVE SUMMARY

The governing board adopted Ventura College's 2003-04 General Fund Unrestricted budget, which supports the bulk of the college's operations, including instruction, student services, learning resources, maintenance and operations and general administration, at a level of $31,526,581 (IIID-1 Ventura County Community College District 2003-04 Adoption Budget, September 16, 2003, page 6).

By almost any measure, the college's operating resources do not adequately support quality programs and services in addressing needs for improvement. The past two accreditation progress reports, the last prepared in the spring of 2003, document well the extreme financial constraints the college has operated within for the past several years (IIID-2, Ventura College Progress Report for Accreditation Site Visit, April 2-3, 2003 , pages 61-64 and 144-148).

Since preparation of the 2003 Progress Report, the college lost an additional 29 full-time faculty positions, 17 classified positions, three supervisors, and one manager through retirement, resignation and layoff. The governing board approved the 2003-04 Adoption Budget referenced above at a level $2,440,359 below the comparable budget for the college in 2002-03. Further, the outlook in the short term is poor. In December 2003, the district directed a mid-year budget reduction of $1.5 million. The college's share of that reduction totaled $508,500. The college entered the spring semester 2004 with far fewer staff in all ranks and nearly $3 million less in resources than it had only one year earlier and at a level below the college's 2001-02 budget.

Although the mechanisms are in place for establishing and funding institutional priorities for improvement, the college's funding status precluded the opportunity for accomplishing those outcomes. The Campus Resource Council (CRC), the college's shared governance budget committee, continues to meet; however, its role has been diminished. During the past several years, it has addressed budget reductions and shared financial information. Even so, from non-general fund sources, the college realized a number of institutional improvements. The college implemented CISCO and Oracle instructional programs using categorical resources, the biotechnology program continued to develop through the use of grant and contract monies and industry donations, and a variety of facility and equipment improvements were initiated through the use of state grants, restricted allocations, deferred maintenance and bond funds. Without these non-general fund resources, few, if any, institutional improvements would have been realized.

1. The institution relies upon its mission and goals as the foundation for financial planning.

 a. Financial planning is integrated with and supports all institutional planning.

The Council for Institutional Development (CID) reviews the college's mission and goals annually. Their review recently led to a major revision of the college's Educational Master Plan (IIID-3 Ventura College Educational Master Plan April 2003) and the subsequent development of a Facilities Master Plan (IIID-4 Ventura College Facilities Master Plan, draft December 9, 2003 ).

These master plans serve as the primary source for fiscal planning. Over the past several years, this process resulted in the expansion of our off-campus operations, to stimulate enrollment growth; the creation of the Institute for Community and Professional Development (ICPD) to generate external funding sources; implementation and upgrading of our technology programs (CISCO, Oracle, BIS, GIS, etc.) to state-of-the-art operations; and the allocation of state modernization and local bond funding for the improvement/replacement of our aging facilities and equipment.

As noted above, the annual review of the college's mission results in the establishment of goals. The President's Cabinet considers these goals with input from the Academic Senate, the Campus Resource Council (CRC), the Classified Senate, and the Administrative Council. During the past few years, constraints on the general fund budget have precluded the college from accomplishing many of these goals. However, as referenced, the use of non-general fund resources provided an opportunity for several of the goals to be realized (e.g., expansion of off-campus programs, development of the ICPD, etc.). Additionally, the successful passage of the local bond, Measure S, will provide, over time, $115 million, which will result in significant short and long-range facility improvements.

The college expanded its campus programs to stimulate enrollment growth, so the college could remain competitive within the district for the allocation of resources. The college created the ICPD to serve as a revenue generator for resources that otherwise would not be available to the college and for which the college was becoming more and more dependent upon for its very survival. The college made these decisions only after serious consideration of a number of priorities, and they were made as a direct desire for the college to experience a more stable and predictable financial future.

The college's Educational Master Plan drives both short and long term changes in the instructional fabric and resultant support services of the college. The changes are then incorporated into the budget development process in order for them to be realized.

The college's Facilities Master Plan drives both the short and long term implementation of renovation, renewal, and new construction projects that are incorporated into the district's capital budget planning both annually and through 2015.

The Educational and Facilities Master Plans drive the college's financial planning, as referenced above. Current economic conditions, however, somewhat control the timeliness of the master plan accomplishments. For the past several years, the college has experienced difficulty implementing the major goals of the Educational Master Plan since it is primarily dependent upon general fund resources and those resources have been declining. However, as noted earlier, the college has accomplished several of the highest priority initiatives with non-general fund monies.

However, local bond proceeds and projected State capital modernization funds currently fund the Facilities Master Plan more than adequately. The college should successfully complete scheduled projects for initiation within the proposed timelines over the next several years.

Clear evidence of the college's institutional plan accomplishments through budgetary processes exists, as previously referenced. Implementation of the CISCO and Oracle programs, initiation of the ICPD, and expansion of off-campus offerings, leading now to the district seeking "education center" status for the East Campus operation all indicate that the college followed its plans, within the limitations of resources available at the time.

The college president meets with the chancellor and district executive staff weekly to discuss both operations and planning. The chancellor shares a districtwide communication with the governing board highlighting accomplishments, concerns, and plans from each of the colleges and district office weekly. At the monthly board meetings, the presidents deliver both written and oral reports to the board. The board reviews and adopts the individual colleges' Educational and Facilities Master Plans. Annually, the board adopts budget guidelines and assumptions based on input from the District Council of Administration Services (DCAS) and the district's projections of financial changes that may impact the district and its colleges' operations. At nearly each board meeting, the deputy chancellor, the district's chief financial officer, or his chief assistant apprise the board of the status of the budget and the resultant impact on the colleges' operations. Therefore, the colleges and the district keep the governing board well informed about the fiscal condition of the district and its colleges, and the governing board understands well the impact on the accomplishment of institutional plans.

b. Institutional planning reflects assessment of financial resource availability, development of financial resources, partnerships and expenditure requirements.

The vice president of Business Services distributes budgetary information throughout the college through a variety of mechanisms. Weekly, he updates the status of the budget with members of the Administrative Council, who in turn share the information with their respective operating sub-units. Monthly, the vice president reviews the current status of the budget with the Campus Resource Council, and with all managers and supervisors, who again communicate the information with their constituents. When the vice president receives electronic communications from the State Chancellor's office and other sources, he broadcasts them to all users to keep them apprised of fiscal conditions at the state level and whenever possible, he provides the projected local impact of that information as well. In addition, the district's management information system, which has been in place for the past several years, fully integrates a real-time, client server and web-based system. The college ensures that budget and program managers and various levels of support staff and faculty are trained in the utilization of the system and have continuous access to financial management information. Finally, when the college faced severe budget reductions during 2002-03 and 2003-04, the president and vice presidents conducted monthly collegewide budget forums in order to keep all staff apprised of current financial conditions and to solicit input for recommendations, which could mitigate the impact on college operations.

During the past several years, the college has made maintaining enrollment growth a priority in order to remain competitive for resource allocation and to assist the district in meeting its enrollment cap. Additionally, the establishment of external funding sources mitigated the continued decline in general fund operating resources. These priorities provided survival techniques. At the time, full-time equivalent student (FTES) enrollment drove the district's resource allocation model. Ventura College , far and away the oldest college in the district, and located in an area of very slow population growth, could not maintain an FTES growth rate similar to its sister institutions. Therefore, it found its operating budget declining proportionately on an annual basis since implementation of the allocation model in 1997-98. Thus, in response to this situation, the college aligned its goals to achieve growth, which occurred through the expansion of off-campus operations where the general population was growing more rapidly and the proportion of underserved students was significantly greater than in the City of Ventura . At the same time, the college opened the ICPD to expand its external resource generation capabilities. Both decisions proved to be successful and reasonable for the circumstances in which they were made. Enrollment increases have occurred at East Campus, and the ICPD over the past few years has generated about $12 million in grants and contracts and provides indirect financial support to the college.

Ventura College places student learning at the central core of all of the college's planning and prioritization of options. However, as referenced, the college has functioned in a survival mode since 2001-02. As retrenchment decisions have been made, the college has focused on methods that least harm student learning. The college has consumed most available resources, including its bookstore cash balances ($385,000 in 2002-03 and an additional $65,000 in 2003-04), transferred every allowable expenditure possible to restricted resources such as Instructional Equipment/Library Materials (IELM), Restricted Lottery, Telecommunications Technology Infrastructure Program (TTIP), Board Financial Assistance Program (BFAP), Foreign Student Surcharge and so on. Despite having taken these measures, the books still did not balance. Therefore, the district implemented an early retirement incentive program in 2002-03 and negotiated major concessions with its bargaining units in 2003-04. As noted earlier, that retirement program, augmented with layoffs and resignations, left the college with 29 fewer full-time faculty and 21 fewer support staff. While these measures affected students' ability to learn, no greater economical alternatives existed other than to further reduce course offerings, which, in our opinion, would have damaged student learning more significantly.

Although the Educational and Facilities Master Plans form the heart of the college's financial planning, other important processes intervene as appropriate. The college's Academic Senate annually prepares a "Staffing Priorities Plan" for the orderly hiring of faculty (IIID-5). In addition, individual departments submit requests to their division leadership for operational (non-staff) resources. Faculty and staff share these requests and their supporting documentation with the Campus Resource Council, the Administrative Council, and ultimately the President's Cabinet. Throughout the year, the vice presidents prepare departmental hourly staffing budgets, which are also presented to the CRC and Administrative Council, to establish hourly budgets for part-time faculty (teaching and non-teaching) for the instructional term(s). With this advice, the President's Cabinet makes the final decision regarding resource allocation.

Finally, although not presented in a published form, the vice president of Business Services annually prepares a resource allocation scheme, which he shares with the executive staff (president and executive vice president). This allocation scheme presents the college's projected allocation of district resources, and it contains internal designations of those resources required to support the following, in priority order:

a) full-time employee salaries and benefits

b) inescapable costs (e.g. utilities, contractual commitments, custodial supply requirements, etc.)

c) part-time faculty costs to support the proposed instructional schedule and library and counseling services

d) discretionary allocations

Since 2000-01 the college has received insufficient resources to fully fund operations through item (c). As a consequence, the college annually cuts the part-time faculty portion of the budget, thus reducing the instructional schedule and support services. Additionally, the college supports only a minimum of discretionary allocations.

c. When making short-range financial plans, the institution considers its long-range financial priorities to assure financial stability. The institution clearly identifies and plans for payment of liabilities and future obligations.

As referenced previously, both the Education and Facilities Master Plans form the core of the college's long-term planning efforts. Annually, these plans translate into an operational plan, which is expressed through the college's budget. Long-term planning as it relates to general operations has proven difficult for the past three years as a result of the state's economic situation and the resultant impact on community colleges. Neither the district nor Ventura College has been insulated from the effects of the state's budgetary shortfall. Thus, the college plans operationally for the short-term, with an emphasis on preserving as much of our central core as possible. The college maintains capital planning with a long-term focus, since the resources to support those efforts are stable as a result of the passage of Measure S in 2002. The campus' long-term reconstruction focuses on reduced costs of facility operations and maintenance.

The college has incurred no long-term indebtedness. The district budgets for primary long-term obligations associated with retiree benefits annually on a "pay as you go" basis, and property tax assessments supports bond repayments. The annual budget process addresses other ongoing obligations such as insurance premiums, building maintenance, medical/dental/vision plan re-rates, etc. The state's scheduled maintenance funding, matched by bond proceeds, addresses much of the building maintenance needs. Further, the college plans to construct new facilities and/or modernize existing ones by using state capital project and bond resources.

As referenced above, the budget development process districtwide first recognizes ongoing obligations and establishes a pool of resources to address those costs annually.

The college factors into the budget and funds, as appropriate, incremental costs for expenses such as medical/dental/vision re-rates and step and column movement of staff, which have been passed on by the district. As part of short-term planning in order to best meet college objectives, the college considers comparable data from year to year.

d. The institution clearly defines and follows its guidelines and processes for financial planning and budget.

The annual budget process begins in January with a governing board study session of the status of the current year's budget, including expenditures and preliminary projections for the new budget year. Annually, the District Council of Administrative Services (DCAS) reviews and recommends budget assumptions and guidelines that are shared with the college's Campus Resource Council (CRC), the local shared governance budget advisory body. DCAS ultimately recommends the budget assumptions and guidelines to the Chancellor's Cabinet. The governing board adopts them and makes them part of the public record. The college's DCAS representative also presents them to the college's Administrative Council, the President's Cabinet, and any other group interested in reviewing the information.

Once in place, individual departments begin the development of their budget requests and input that information into the budget development system. Departments summarize requests and present them to both the CRC and the Administrative Council for review. At the same time, the college considers input from the staffing priorities committees. As the district develops final allocations, management compares the sum of the budget and staffing requests to the available resources and makes recommendations to the President's Cabinet. Final authority for the establishment of the budget rests with the President's Cabinet.

Once the budget is finalized, the district prepares and presents the annual budget document to the board for adoption (IIID-1). College staff members then make copies of the budget document available throughout the college, and interested parties may access the entire budget on-line through the district's financial information system.

SELF EVALUATION

The college desires that the Educational and Facilities Master Plans drive financial planning. This model should allow the college to plan for growth by funding the expansion of the East Campus Center , to adapt our programs to meet the needs of the community, and to keep pace with changes in technology. Unfortunately, extraordinary cuts in general funding-a cut from $35 million to $31.5 million in one year alone-necessitated moving away from a proactive planning position to a defensive posture in which the college must plan in order to survive this economic downturn in a way that best preserves the goals of the Educational Master Plan, yet is the least damaging to student outcomes. This delicate balance has proven difficult to maintain.

The college's executive team held regular collegewide budget forums to keep faculty and staff informed and to solicit input from the rank and file. Additionally, deans worked with department chairs to streamline budgets within divisions, and the department chairs worked with the faculty to best determine where cuts could be made with the least damage to programs and services.

To date, the college has eliminated no programs; however, 17 classified staff were either laid off or retired, and the college reduced its schedule by 14 per cent in fall 2003 and 1 4 per cent in spring 2004. Twenty-six full-time faculty retired due to incentives. The college decreased the number of part-time faculty, cut maintenance and operations down to a skeleton crew, slashed operating budgets, and drastically cut numerous student support services. Personnel now make up 96 percent of the college's budget. No further cuts can be made without further reducing personnel and/or eliminating programs.

This fiscal crisis has been particularly hard on classified personnel. In addition to the loss of employees, the remaining staff agreed to work a reduced schedule. Furthermore, classified staff clearly understands that further reductions to the general fund will directly result in added reductions in their ranks. The staff who remain are overworked, and morale is very low.

Every area of the college has been negatively affected, but students have been affected most significantly. In the area of student services, meeting with counselors proves difficult for many students. With student to counselor ratio at 1000:1, wait times for students exceed two hours at peak periods. Furthermore, no hourly budget for evening counseling exists even though 60 percent of our students attend evening classes. The state increased the enrollment fee , which increases the need for financial aid, yet the college was forced to cut financial aid staff, making it difficult for students to receive timely assistance. The college was forced to reduce the number of personnel in the Student Business Office from three full-time staff and two seasonal employees to just two seasonal employees. Therefore, the office opens later and limits evening hours. Budget cuts also forced the college to dissolve the Job Placement Center ; consequently, faculty and staff refer students seeking job placement to the Transfer Center . Unfortunately, the Transfer Center , too, suffers from insufficient staffing and has been forced to close in the evenings and during the summer months.

The burden on our students follows them to the classrooms as well. The college removed all Saturday classes from the schedule, and class sizes increased for many courses. For example , the biology department, which had previously set maximum class size at 50, scheduled lecture classes of 100 and is currently discussing additional increases to meet student demand. The math department increased class sizes in several sections to 70 when previous class size had been set at 40. Despite these measures, numerous sections of math classes close weeks before the semester begins. Additionally, the college was forced to significantly reduce funding for tutoring, and the Tutoring Center is now closed on Saturdays.

Ventura College is proud to be in the top 25 percent of all community colleges transferring students into the University of California (UC), and in the top 30 percent for California State University (CSU) systems. We are also proud to be in the top 15 percent of community colleges transferring Hispanic students into the UC system, and the top 20 percent of community colleges transferring Hispanic students into the CSU system. These transfer rates are remarkable given the enrollment at the college. One-half of all California community colleges are larger than Ventura College ; therefore, one would expect these colleges to be transferring more students. The college realizes, however, that the increasing difficulty students encounter obtaining access to classes and student services is counterproductive to these accomplishments.

Productive outcomes do exist despite the damage to student success resulting from the current budget situation. The Budget Forums peaked interest in campuswide committees and increased collaboration among managers, faculty, and staff. The college has historically sought external funding, yet this crisis emphasized a greater need to look outside the state's general fund to ensure the success of our programs. Though the college understands the need to increase the number of sections offered to provide better access to students, we learned important lessons from streamlining our schedule. The college will operate more efficiently when our fiscal problems relax. Finally, the new construction around campus funded by the successful passage of the bond initiative, Measure S, provides optimism and a belief that we are moving forward with the support of the community. We know that the college will remain a vital force to the community for many years to come.

In general, the college understands the great need to systematically replace faculty and staff lost through budgetary retrenchment and to rebuild the schedule of classes in order to support student demand and improve the quality of student learning. In spring 2004, the Academic Senate advanced a hiring plan for replacement of 19 of the faculty retirees. The President's Cabinet approved the plan, with minor modifications and will implement it in 2004-05, consistent with the Educational Master Plan.

Overall, the college views the financial planning and annual budget development process as adequate although frustrating as a result of the constant decline in resources. From a positive perspective, the college possesses well developed and articulated Educational and Facilities Master plans that can be made operational quickly to achieve the college's mission and goals as soon as sufficient resources materialize to allow for realization of the plans.

PLANNING AGENDA

• The college will develop systematic plans that can be implemented as financial conditions improve to replace lost faculty and staff positions.

• The college will develop a plan to encourage and reward faculty and staff to solicit external funding in the form of grants, contracts, endowments, and gifts and other fund raising activities to augment the base operating budget.

2. To assure the financial integrity of the institution and responsible use of financial resources, the financial management system has appropriate control mechanisms and widely disseminates dependable and timely information for sound financial decision making.

a. Financial documents, including the budget and independent audit, reflect appropriate allocation and use of financial resources to support student learning programs and services. Institutional responses to external audit findings are comprehensive, timely, and communicated appropriately.

DESCRIPTIVE SUMMARY

Over a two-year period, the district worked through an expanded shared-governance process intended to modify the current budget allocation model to distribute available resources in a manner to better achieve the institutional goals for student learning at each of its colleges. Because of the significant decline in the state's fiscal condition, and ultimately in the state apportionment received by the district, the districtwide shared governance committee recommended that the existing allocation model be suspended and funds be allocated to the colleges based on the same proportional shares as provided in the Adoption Budget for 2002-03.

As a result of continued declining resources, the college conflated special funding sources into its operating budget. For example, the 2002-03 and 2003-04 budgets relied heavily on the utilization of Bookstore reserves, categorical and contract funds, and even Associated Student contributions.

The college has made every effort during the past several years to minimize the impact of budget reductions on instruction and student services. However, the reality of the current economic conditions do not allow for complete budgetary protection of these programs. In fact, the college balanced its 2003-04 budget only after a significant number of retirements and staff eliminations, many of which were from our faculty ranks. Further, in order to operate within the limits of its allocation, the college eliminated its early summer session, significantly compressed the remainder of its summer offerings, and reduced the fall 2003 instructional schedule of classes by about 14 percent and the spring 2004 schedule by 14 percent. However, by more effective schedule management and room utilization and assignment, the college experienced less than a one percent decline in FTES enrollment. Thus, although the budget, when compared to prior periods may suggest serious damage to student learning, the college successfully maintained a sufficient level of programs and services to support our student demand despite the retrenchment actions.

The most recent audit report accepted by the governing board, for the period ended June 30, 2003, included the following statement: "In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ventura County Community College District as of June 30, 2003 and its revenues, expenditures and changes in fund balance for the year then ended. . ." (IIID-6 Ventura County Community College District Special Report for Board of Trustees and Management Only, June 30, 2003 , dated September 4, 2003 ). This unqualified opinion supports the integrity of the district's financial management system and its application.

However, the audit report findings and recommendations also included the following comments:

District Financial Condition

During the 2002-03 fiscal year, the district incurred deficit spending within the General Fund in the amount of $1.4 million. This follows a $1.2 million deficit in the 2001-02 fiscal year. The general reserves of the district are currently below three percent of total General Fund expenditures. The district's internal board policy and the State Chancellor's Office recommend the general reserve levels should be five percent. The State of California has experienced reductions in funding in all levels and has passed these reductions on to the community college districts throughout the State. The ability of the district to continue as a going concern is severely impacted by these reductions without corresponding reductions in the spending patterns of the General Fund.

We suggest the 2003-04 budget continue to be monitored for areas of reductions in spending. It is imperative that the pattern of deficit spending be broken immediately in order to strengthen the financial condition and protect the future stability of the district.

District Response

The district concurs with the finding and recommendation. The district's internal Board Policy states that the general reserve level should be at five percent. The district plans to restore the General Fund reserve back to the five percent minimum level in the future. The district developed the 2003-04 adoption budget without deficit spending planned and will continue to review areas of cost control to ensure staying within budget. Side letter agreements for 2003-04 with our bargaining units will assist in meeting that objective.

In December 2003, the district implemented a $1.5 million mid-year budget reduction supported by cuts at all colleges and the district office. Through the cuts, the district intended to restore the reserve to a level above three percent and ensure that the district would not find itself again in the position of deficit spending. Thus, the district and its colleges face numerous challenges in regard to its financial condition.

Prior to completion of the audit report, the district convenes meetings with all parties or operating sub-units that have been cited in the audit's findings and recommendations sections. During those meetings, district staff reviews appropriate corrective actions and provides a response to the auditor prior to the report being released. The board's audit sub-committee reviews the audit report, recommendations, and responses in detail and submits the report to the full board for acceptance. Subsequently, the district implements the corrective actions and ensures compliance. Mid-year, the board subcommittee reviews the status of progress toward accomplishment of the corrective actions. Finally, the auditors specifically review those areas of concern during their next engagement.

b. Appropriate financial information is provided throughout the institution.

Please refer to the response to Standard III, D, 1.d, which describes where and how processes for financial planning and budget are recorded and made known to college constituents. For financial planning, the college utilizes comparable budget data from prior periods to provide a basis for comparison of institutional goal achievement.

In addition to the information referenced previously, the vice president of Business Services prepares updated financial statements monthly for the college's general fund budget status, bookstore and cafeteria operations, Trust and Agency account balances, Co-Curricular account balances and the budgetary status of hourly instructional budgets by division. Representative samples of these documents exist in Exhibit IIID-7. The vice president of Business Services routinely shares this information with the Administrative Council, the CRC, and the President's Cabinet. The college uses the information throughout the year to initiate budgetary changes as necessary to meet operational goals within the constraints of budget limitations.

Once accepted by the governing board, the district distributes copies of the audit reports to the executive staff at each college and then makes copies of these reports available for review in the college's office of the vice president of Business Services, the college library, and the district office.

To date, the sum of the financial information presented sufficiently provides for appropriate financial planning and local management. The greatest difficulty the district and its colleges experience with financial planning and management revolves around the vast uncertainty of state funding. Obviously the speculation surrounding the mid-year budget reductions in 2002-03 and the continuing changes and delays in the state's adoption of a 2003-04 budget led to much speculation and ambiguity as the college tried to plan for an ever-moving financial target. Furthermore, the lateness of information from the state presented challenges in finalizing a budget that reasonably represented a rational plan of action. However, once the district received firm information upon which to plan, the colleges reacted and stabilized their operations.

c. The institution has sufficient cash flow and reserves to maintain stability, strategies for appropriate risk management, and realistic plans to meet financial emergencies and unforeseen occurrences.

The district's ending balance of unrestricted general funds for fiscal years 2000-01, 2001-02, and 2002-03 was $5.7 million, $4.4 million, and $3.2 million respectively.

The governing board adopted a policy to maintain a five percent reserve. However, due to the significant budget reductions statewide during the past two years and the predominance of the budget directed to staff salaries and benefits, the board reduced the reserve during budget development to four percent and three percent respectively during 2002-03 and 2003-04. The board adopted the budget for 2003-04 with a three percent reserve, with the objective of increasing those reserves throughout the year by identifying additional cost-saving measures and salary savings. The board has approved budget assumptions for the 2004-05 budget year to include a minimum of five percent in reserves.

As with most California Community College districts, the receipt and timing of revenue from the state and local property taxes inadequately meets district cash requirements. In order to ensure sufficient cash balances to meet financial obligations of all colleges in the district in a timely manner, the district participates in the Community College League of California's (CCLC's) Tax and Revenue Anticipation Notes (TRAN) program each year. The district fully repays this short term borrowing, which provides the necessary cash throughout the fiscal year for the district to meet its financial obligations, within 12 months of issuance.

The district belongs to a statewide joint powers authority (JPA), which provides all liability and property insurance needs, as well as worker's compensation. The district maintains a small self-insurance reserve to provide coverage for the minor self-insurance retention portion of the policies. The reserve adequately handles all retention requirements, with the level of retention estimated annually by the JPA.

d. The institution practices effective oversight of finances, including management of financial aid, grants, externally funded programs, contractual relationships, auxiliary organizations or foundations, and institutional investments and assets.

In addition to the specific institutional procedures for reviewing fiscal management, the district holds regular districtwide meetings of the executive staff of all three colleges working in coordination with district staff to review institutional and districtwide financial plans and projections. The district's Office of Special Funding provides financial oversight and support services to the college program managers responsible for externally funded programs, contracts, and grants. This office acts as a liaison with funding agencies to ensure funds are expended in compliance with the conditions of the agreements. Annually, the district contracts for an independent external audit of all funds and financial records. The audit, as required by state law, includes both financial and compliance issues related to state and federal funds. The absence of a qualified opinion of the financial statements, as well as the absence of reportable conditions and noncompliance or questioned costs related to federal or state projects, provides evidence of the adequacy of fiscal management related to these programs. Several years ago, the district received a qualified opinion, as did many California community college districts in the state, because it did not have an appropriate system of accounting for fixed assets, such as buildings, equipment, and land. With the implementation of the current management information system, the district implemented the necessary accounting for fixed assets and subsequently received unqualified audit opinions. Annually, the audit includes findings and recommendations to management for strengthening internal controls or for improving financial procedures. None of these findings have proven significant, but each year the district reviews those findings and recommendations with the involved parties and develops plans to implement changes, if reasonable and cost effective.

e. All financial resources, including those from auxiliary activities, fund-raising efforts, and grants are used with integrity in a manner consistent with the mission and goals of the institution.

As stated above, external independent auditors examine all district financial resources, including those from auxiliary activities such as the bookstore and cafeteria; Student Health Center; Child Care Center; Trust and Agency accounts, such as student and athletic team fund-raising accounts; categorical programs; and contracts and grants. As a part of the audit process, the district also receives a management letter with recommendations to strengthen internal controls or to improve financial procedures. These reports and the follow-up work to evaluate and implement recommendations, where appropriate, assist in assuring that all funds are used appropriately and within the mission and goals of the district and its colleges.

f. Contractual agreements with external entities are consistent with the mission and goals of the institution, governed by institutional policies, and contain appropriate provisions to maintain the integrity of the institution.

Prior to seeking or accepting a contract or grant, college reviews the project for consistency with its mission and goals. As stated in III D.2.d, the district's Office of Special Funding provides financial oversight and support services for these contracts. The district presents each agreement to the board for approval. The district approves most contracts on an annual basis, and the district can terminate contracts prior to completion if it deems that action appropriate.

g. The institution regularly evaluates its financial management processes, and the results of the evaluation are used to improve financial management systems.

As stated in III D.2.a., an independent auditor annually audits all district funds and financial records. The audit includes an opinion on the financial statements and the financial management system, as well as issues related to federal and state compliance, and recommendations to strengthen internal controls or to improve financial procedures. In addition, the district office provides oversight and support services ensuring the integrity of the financial management system. Financial controls, assessments, and evaluations exist and operate well. The district compares financial results to the budget as part of fiscal planning and makes appropriate adjustments as necessary.

SELF EVALUATION

Being part of a three-college district, Ventura College competes with its sister colleges for an appropriate share of the state funding. The district's allocation model, which was in place between 1997 and January 2003, provided funding that made it difficult for Ventura College to achieve its goals for student learning. Driven by FTES, this allocation model gave an advantage to the college (s) experiencing the greatest rate of growth. Unfortunately, Ventura College , which is located in a low growth region of the county, received proportionally decreasing funding from 1997 through 2002 with this allocation model despite experiencing moderate enrollment growth each year. This funding practice forced the college to begin administering budget reductions and cutbacks even during the years when the state was experiencing surpluses in the budget.

To many faculty and staff this funding practice, coupled with allegations by the media that our previous chancellor mismanaged district funds, created a high level of distrust among the faculty and staff for most decisions made by the management team at the District Service Center .

In the summer of 2002, the board appointed an interim chancellor to replace the embattled chancellor. This move by the board created an immediate positive effect on morale among faculty and staff. The interim chancellor had the foresight to create an extended District Council for Administrative Services as one of his first actions. This committee consisted of faculty and classified staff, in addition to the management teams of the three colleges, and it reviewed the allocation model. The committee ultimately decided to abandon the model that dispersed funding based on FTES and instead allocated funding based on the proportional shares of the budgeted expenses from the prior year until a better model could be devised. This new practice ensured that the college would no longer continue to receive funding reduced disproportionately to the other colleges. Unfortunately, by the time the committee made this decision, the growing level of the State deficit was just being realized, and mid-year funding cuts to the d istrict exceeded projections of a worst-case scenario.

In spring 2003, the American Federation of Teachers (AFT) negotiated a sideletter agreement with the district to cut stipends, reduce department chair compensation, and reduce faculty salaries commensurate with the level necessary to fund the colleges at the same level as 2002-2003. Fortunately, the climate in Sacramento concerning funding cuts to community colleges changed and the district received funding at a level that did not necessitate faculty salary rollbacks, and conversely resulted in a .53 per cent payroll increase for faculty . Unfortunately, despite the benefit of increased funding, a rift developed between classified staff and faculty, and feelings of distrust for decisions made by the board and the District Service Center reoccurred. Two factors created this rekindled mistrust. First , the district received less severe budget reductions than originally forecast by the District Service Center . The governing board moved $1.5 million back into district reserves rather than increasing funding to programs and student support services, causing many faculty and staff to believe that the management team cried wolf. Secondly, most classified staff believes they are absorbing a disproportionate share of the fiscal problems since the Service Employees International Union (SEIU) negotiated fixed reductions to classified payroll, rather than the sliding scale applied by AFT.

Although the state's financial condition significantly stressed the college's ability to operate at appropriate levels to maintain and improve student learning and programs and services to support our student demand and created tension among the faculty, staff and management, faculty and staff view the change in budget allocation methodology as a positive move. Further, the Governor's 2004-05 budget proposal for community colleges and the passage of Proposition 57 in March 2004 have provided a flicker of hope that perhaps the financial situation is improving.

College personnel believe that the distribution of financial information throughout the college is adequate. The Administrative Council receives budget updates weekly. The Campus Resource Council reviews the status of the budget monthly, and during particularly critical budget times, the college's executive staff holds monthly campuswide budget forums to apprise all members of the college's financial situation. All budget managers possess on-line access to their financial information and are encouraged to share it with their departments in accordance with their internal operating practices .

The district manages cash flows and reserves centrally as it is predominantly a district, rather than a college issue .

Both college and district policies and procedures adequately control financial oversight and management of our general fund activities and appear to be well organized and operationally responsive. Coupled with independent financial audits and internal and external program reviews, the district and college believe that the management and control processes are adequate. The district and the college see the primary issue as one of insufficient resources to adequately operate the district, not a lack of prudent management at the college level. Compelled by budgetary constraints placed on the college management team, faculty, and classified staff, the college has done a more than adequate, if not admirable, job of optimizing the efficiency with which it allocates available funds to meet the needs of students. With support from district management, an optimism that future state funding will be commensurate with the educational value the college offers to the community, and the expectation that a fair and equitable budgetary allocation model will follow, we at the college level will continue to meet the many challenges confronting us in order that we may continue to offer an outstanding learning environment and program for our students.

PLANNING AGENDA

• The college will maintain continued participation in the district's allocation model development activities to assure preservation and expansion of the college's funding base.

• The college's executive staff will continue to hold collegewide budget forums and other information sharing activities to keep faculty and staff appraised of changing budget scenarios.

Standard IIID
Financial Resources

List of Documents:

IIID-1	Ventura County Community College District 2003-04 Adoption Budget September 16, 2003
IIID-2	Ventura College Progress Report for Accreditation Site Visit April 2-3, 2003
IIID-3	Ventura College Educational Master Plan, April 2003
IIID-4	Ventura College Facilities Master Plan, draft, December 9, 2003
IIID-5	Ventura College Academic Senate Staffing Priorities Plan
IIID-6	Ventura County Community College District Special Report for Board of Trustees and Management Only, June 30, 2003, dated September 4, 2003
IIID-7	Representative budget and accounting information prepared and distributed monthly