Standard 7.C
Description
The financial organization and management, as well as the system of reporting, ensure the integrity of institutional finances, create appropriate control mechanisms, and provide a basis for sound financial decision-making.
7.C.1 The president reports regularly to the governing board about the financial adequacy and stability of the institution.
7.C.2 Financial functions are centralized and are under a single qualified financial officer responsible to the president. Institutional business functions are under one or more qualified officers, are well organized, and function effectively. The complexity of the usiness organization reflects the size of the institution and the significance of its transactions.
7.C.3 All expenditures and income from whatever source, and the administration of scholarships, grants in aid, loans, and student employment, are fully controlled by the institution and are included in its regular planning, budgeting, accounting, and auditing procedures.
7.C.4 The institution has clearly defined and implemented policies regarding cash management and investments which have been approved by the governing board.
7.C.5 The institution’s accounting system follows generally accepted principles of accounting.
7.C.6 For independent institutions, the governing board is responsible for the selection of an auditing firm and receives the annual audit report.
7.C.7 Independent institutions are audited annually by an independent certified public accountant and the audit is conducted in accordance with generally accepted auditing standards. The audit includes a management letter. A summary of the latest audited financial statement is made available to the public.
7.C.8 A proprietary institution makes available annually a financial summary which includes, as a minimum, a list of company officers, a statement of profit and loss, expenditures, indebtedness, and companies which have a controlling interest in the institution.
7.C.9 If public institutions are, by law, audited by a state agency, an independent audit is not required except for any funds not subject to governmental audit.
7.C.10 All funds for financial aid and other specific programs not subject to governmental audit are audited annually by an independent certified public accountant and include a management letter.
7.C.11 The institution demonstrates a well-organized program of internal audit (where appropriate) and control that complements the accounting system and the external audit.
7.C.12 The institution demonstrates that recommendations in the auditor’s management letter accompanying the audit report have been adequately considered.
7.C.13 Federal, state, external, and internal audit reports are made available for examination as part of any evaluation conducted by the Northwest Commission on Colleges and Universities.
Evidence
7.C.1
Quarterly, the President and Vice President for Finance and Administration provide financial information to the Board of Trustees that includes standard year to date financial statements for the entire college, and specific financial information on operating budgets and expenditures to date, auxiliary financial reports, capital expenditures and local dedicated fund activity. The President informs the board about any concerns relating to the financial health of the college. In the fall the board receives a financial report for the year ending June 30. The College’s audited report is reviewed by the full board and at least one board member attends the audit exit meeting with the State Auditor’s Office.
7.C.2
The financial management of the College is the responsibility of the Vice President for Finance and Administration. The Director of Business Services, who reports to the vice president, is responsible for all day to day financial transactions and the centralized major financial functions including payroll, purchasing, reporting, investments, cashiering and general accounting. The Executive Director of Operational Planning and Budget, who reports directly to the President, is responsible for budget development and monitoring, and long-range planning. He consults with the Budget Coordinators located within each division and who report directly to the appropriate Vice President. Qualified professionals occupy positions responsible for accounting functions and financial management.
7.C.3
The College’s expenditures and income are recorded and coordinated through the college’s financial processes which are governed in their basic structure by the state. The state sets financial standards and policy through the Office of Financial Management. Financial information is input and reported via the SCT Banner system, a computerized process used by Evergreen and some other four year institutions in the state. This system interfaces with the state government accounting system and meets accounting and auditing guidelines. The Banner system’s financial management reporting module includes control tables, general ledger accounting, accounts payable, purchasing, customer accounts and cashiering. The annual College budget is input and processed through this system. The College has established organization codes to track and monitor financial activity within the departments of the College.
Each unit/department head is responsible for monitoring the budgets under their control. They have web access to current data on their budget and expenditures to date. The budget coordinator for each division is responsible for monitoring all the budgets in their division. The budget coordinators and the Executive Director of Operational Planning and Budget meet regularly, and also meet quarterly with the vice presidents to review and discuss the budget. The vice presidents meet regularly with the president.
Historical financial information is readily available in the accounting system and is used to effectively prepare and budget for future years.
The administration and accounting of financial aid is administered jointly by the Financial Aid office and business office. Financial Aid also uses an integrated Banner program that provides needs analysis, application tracking, award management, student loans, student employment monitoring, external reporting, and disbursement. The Financial Aid Director has responsibility for the college’s financial aid programs.
7.C.4
The Office of Financial Management establishes the standards and guidelines for cash management and investments. The college’s Investment Policy provides additional guidelines. The Director of Business Services and the Accounting Manager monitor the college’s investments. Investment options are very limited by Washington State Law, resulting in a conservative and safe investment strategy. Decisions on investments are based on current market conditions, interest rates, and the long term and short term cash needs of the college. Final approval for all investments is the responsibility of the Vice President for Finance and Administration. The Accounting Supervisor, under the auspices of the Director of Business Services, reviews all accounts and keeps the College cash management account in balance. The Vice President of Finance and Administration is provided a monthly report on all college investments.
Most of the college’s endowment funds are invested with a private investment firm, and the balance of the college’s cash assets are invested in certificates of deposit or with the state’s Local Government Investment Pool.
7.C.5
The college maintains an accounting system that records all transactions to facilitate reporting in accordance with generally accepted accounting principles. The professional accounting staff is fully knowledgeable of accounting principles.
7.C.6 – 7.C.10
The college is audited annually by the Washington State Auditor’s office and the audit includes a management letter. The audits are conducted in accordance with generally accepted accounting standards, and all college funds are subject to the audit including financial aid and other specific programs. The audit is a “single audit process” covering both federal and state funds.
Since 2005, the audited financial statements have been available to the public on the college’s website. Prior to 2005, printed financial statements were available upon request.
7.C.11
The college’s internal auditor, a qualified professional, reports directly to the President. The internal auditor has developed a comprehensive audit plan and has full access to all college financial records and transactions. The internal auditor meets regularly with the Board of Trustees to discuss the results of internal audits performed. The auditor also meet regularly with the Vice President for Finance and Administration and the Director of Business Services to discuss the results of audits and recommended corrections.
7.C.12
The College takes recommendations from the state auditor and the internal auditor very seriously and strives to correct any items of concern expressed in the audits. Audit results from the State Auditor’s Office are reviewed by the Board of Trustees and published in a statewide audit report.
7.C.13
Recent audits and other federal, state and external reports are available for review.
