Southern State audit released
Millhuff-Stang, CPA, Inc. of Portsmouth has completed its audit of Southern State Community College's financial statements of the business activities for the program year that ended June 30, 2012.
The audit is available at the Ohio Auditor of State website at: http://www.ohioauditor.gov/auditsearch/Reports/2012/Southern_State_Comm…
"In our opinion, the financial statements present fairly, in all material respects, the respective financial position of the business-type activities … of Southern State Community College as of June 30, 2012 and 2011, and the respective changes in financial position and cash flows thereof for the years then ended in conformity with accounting principles generally accepted in the United States," said Natalie Millhuff-Stang, CPA, and president/owner Millhuff-Stang, CPA, Inc.
"In accordance with Government Auditing Standards, we have also issued our report dated October 11, 2012 on our consideration of the college’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
"The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide on opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit."
"I'm pleased to see the results of the audit for the year ending June 30, 2012," SSCC President Dr. Kevin Boys said.
"Once again, the audit issued an unqualified opinion. There were no material weaknesses identified on either financial statements or federal awards. In other words, this was a clean audit."
Boys credited SSCC Vice President of Business and Finance Jim Buck and his staff for their "conscientious daily work, defined processes, and commitment to both integrity and transparency of all financial matters."
The audit noted that in fiscal year 2012, the college experienced an enrollment decrease of 13.7 percent. In addition, gross student fee revenue decreased 11.8 percent.
Health care premiums increased 4.7 percent in fiscal year 2012 and will increase 11.4 percent in fiscal year 2013.
Meanwhile, the college's state subsidy increased by 12.9 percent.
The primary cash receipts from operating activities are student fees. State subsidies and federal grants represent the primary non-operating sources of funds. Payments to employees are the primary use of funds.
"We have experienced a significant reduction in enrollment," Boys said. "We certainly anticipated a leveling off of enrollment, especially after the record-breaking years of enrollment growth at the beginning of the recession.
"However, our enrollment is still above our pre-recession levels. To adjust to this loss of revenue, we have used a balanced approach including the use of reserves that were built up during enrollment growth, and implementing a 'soft hiring freeze' when we have staffing losses due to resignations and retirements."
The audit also reported:
Capital Assets
Capital assets, net of accumulated depreciation totaled $22,660,228 at June 30, 2012, a net increase of $2,639,401 from the prior year-end. Additions to capital assets during the year totaled $3,583,214 and there were no disposals.
Depreciation expense for the year ended June 30, 2012 totaled $943,813.
Debt
As of June 30, 2012, the college had outstanding debt of $19,220,007 of which $330,241 was short-term (or due within one year) and $18,889,766 was long-term debt (would come due in more than one year).
Of the outstanding debt, $250,007 related to capital leases, and $18,970,000 related to four 20-year bond issues that were used to provide a portion of the funding of the Patriot Center located on the Central Campus, a portion of the funding for a renovation and expansion project on the Fayette Campus, and the construction of a new Brown County campus, which will replace the existing facility.
The Patriot Center was completed in March 2005. The Fayette expansion was completed in 2009.
The construction of the new Brown County Campus is scheduled to begin March 2013, with completion scheduled for March 2014.
Economic Factors that will effect the future
Challenges
• The college continues to have one of the lowest tuition rates in the state among non-levy state colleges. Maintaining the appropriate balance between affordability and quality is a continuing challenge.
• Adjusting to enrollment trends has always been important, but more so in recent years. The college historically has experienced significant growth. A leveling of significant spikes in enrollment experienced in fiscal year 2009 and fiscal year 2010 had clearly been anticipated. Identifying where a return to a normal growth curve will take place will be important.
Opportunities
• The construction of the new campus in Brown County and increased participation in early college partnerships with local schools presents significant growth potential.
About the college
Southern State Community College was chartered on Feb. 21, 1975 as the Southern State General and Technical College. On Oct. 21, 1977, the name of the college was officially changed to Southern State Community College.
The college operates under the direction of a nine-member Board of Trustees who are appointed by the governor with the advice and consent of the Ohio Senate.
A president is appointed by the Board of Trustees to oversee day-to-day operations of the college. An appointed treasurer is the custodian of funds and is responsible for the fiscal control of the resources of the college.
The college was organized principally to offer educational programs beyond high school, normally not exceeding two years in duration, and leading to the award of an associate degree. The college offers programs in the liberal arts and sciences, technical training, and adult and continuing education, as outlined in Ohio Revised Code Section 3358.01.