Audit gives college clean bill of fiscal health

Getting a physical checkup is important and Shoreline Community College just passed an important one with flying colors.

In its first-ever financial statement audit, the college received a clean bill of health from the Washington State Auditor’s Office. The audit was dated Nov. 12, 2014, and the college just recently received the official version of the report. The results were reported and explained during a study session of the Feb. 25, 2015 regular meeting of the Board of Trustees.

Cheryl Roberts photo

President Cheryl Roberts

“This is great news,” President Cheryl Roberts said before the study session. “The outcome reflects the ongoing hard work by our staff, led by Executive Director Stuart Trippel, to ensure that our financial practices are appropriate and accurate.”

The college regularly reports on its operating budget, but a full financial statement is a new requirement by the Northwest Commission on Colleges and Universities (NWCCU), the accrediting body for Shoreline and most of the other higher-education institutions in Washington and six other western states.

“While we chose to have the state Auditor’s Office perform the audit, this isn’t a state-law requirement, this is an accreditation requirement,” Roberts said. Shoreline is one of the first NWCCU colleges in Washington to complete such an audit, but all will eventually need to comply.

The audit reviews the college financial statement not so much for what the numbers are, but rather that the numbers accurately reflect the college’s financial position. In the “Opinion” section, the audit, says in part, “In our opinion, the financial statements … present fairly, in all material respects, the financial position of Shoreline Community College … as of June 30, 2013.”

And the numbers in those statements show a financially healthy college.

“There are three statements,” Trippel said. “’Statement of Net Position’ or a balance sheet, ‘Statement of Revenues, Expenses and Changes in Net Position’ or an income statement and ‘Statement of Cash Flows’ which is pretty much what it sounds like.”

The balance sheet, Trippel said, is really an accounting of just two categories; assets and liabilities.

The three largest dollar-value items on the asset side of the ledger include the college property, including land, buildings, equipment and library ($46 million), the college bank account ($25.5 million) and accounts receivable ($3 million) for a total of $75.3 million.

On the liability side, the college has about $7.3 million in what are termed current liabilities and another $13 million in long-term liabilities. The long-term category includes $10.5 million still owed on the PUB renovation.

“While clearly we can’t sell off the campus and the cash in our bank account does have some restrictions, the bottom line is that college is in a strong financial position,” Trippel said.

That strength was built during – and as a result of – the turbulent economic times of that came crashing down starting in 2008. While the state reduced tax-supported allocations, it raised tuition rates in an effort to keep colleges whole, but then also imposed spending and hiring freezes. Another factor was the economic uncertainties that had college officials creating as many as six budget scenarios based on threatened state budget cuts, some coming during the academic year.

“The college displayed extraordinary prudence that has put us in this strong position now,” Trippel said. Roberts said that strength can help the college prepare for a future that still contains considerable challenges.

“We know the Legislature is under significant and competing pressures,” Roberts said. “When we focus on student engagement and learning, we know we’re meeting the needs expectations of our students, communities and lawmakers. We are in a position now to focus on outcomes that make a difference. I know we can deepen this work because it is at the heart of who we are.”

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