Institutional Self Evaluation Report

Standard IIID.3

The institution has policies and procedures to ensure sound financial practices and financial stability.

Standard IIID.3.a

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.

Descriptive Summary

Following a conservative philosophy towards maintaining the stability of the district’s financial picture, District Policy BP6200 and AP6305 require a five percent budgeted reserve in designated unrestricted fund balances, per the standard set at the California Community College Chancellor’s Office. Additionally, a contingency reserve of no greater than three percent is maintained. (3D.3.a.1) Continuous review of financial conditions and state funding levels by the District Council and Chief Budget Officer’s meeting and the board provides timely, ongoing assessments of the potential risks. Information relative to the fiscal condition is then disseminated for review, discussion, and planning at the college level through College Council, Division Chairs Council, Performance Goals Committee, and Student Services Council.

The two following tables, excerpted from the district’s Tentative Budget for fiscal year 2013-2014, document general fund balances and revenues:

Through realistic budgets and well-planned risk management, the district and colleges have been able to weather California’s fiscal storms.

The district’s cash balance is invested, as provided in the state education code, through the Santa Clara County Office of Education Treasurer. In the event of emergencies that cannot be handled with the current resources, the district continues to benefit from help from the Land Corporation with one-time funds for meeting cash flow.

Self-Evaluation

The college meets this standard. The district successfully weathered the stated fiscal and budget uncertainties during 2011-12 and 2012-13 using the Land Corporation revenue, as well as delivering the college’s 2012-13 budget reduction plans to meet the fund balance.

Actionable Improvement Plans

None.

Evidence

3D.3.a.1

BP6200 and AP6305

http://www.westvalley.edu/committees/Accreditation/2013/evidence/3d/bp_6200_ap_6305.pdf

Standard IIID.3.b

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.

Descriptive Summary

To ensure oversight of finances including financial aid, grants, externally funded programs, contractual relationships, foundations, and investments, the college and the district have an annual, comprehensive, external audit prepared in concert with generally accepted accounting principles. (3D.3.b.1)

The auditors give feedback on the financial statements and the adequacy of the accounting procedures and internal controls. As required by state law, the district retains an independent auditor who performs separate audits of bond funds (Measure C) and investments annually. (3D.3.b.2) The audit report as of June 30, 2012 indicated unqualified opinions with no material weakness.

In addition to the annual external audit, the district’s CPA firm is engaged as needed to perform internal audits for key areas of fiscal operations. The Audit and Budget Oversight Committee and Citizen’s Bond Oversight Committee, subcommittees of the Board of Trustees, review audit reports, as well as their review process to ensure that district financial resources are used ethically and in compliance with the law. Committee reports are given on a regular basis at the Board of Trustees meeting.

Oversight and management of fiscal resources begins at the district level under the direction of the Vice Chancellor of Administrative Services in cooperation with the Vice President of Administrative Services at the college. Effective oversight begins with board policy. District Fiscal Services is responsible for interpreting board policy by establishing and monitoring the internal control policies that protect the assets of the district and the colleges. (3D.3.b.3) An independent certified public accountant performs the annual audit of all financial records including the auxiliary accounts. (3D.3.b.4) District- and College-level participatory governance entities such as the District Council and College Council are informed of the financial status on a regular basis. (3D.3.b.5) College level oversight is led by the Vice President of Administrative Services and college Fiscal Services Office working jointly with District Administrative and Fiscal Services.

Institutional investments are managed by the Vice Chancellor of Administrative Services who is the Chief Financial Officer of the district, utilizing the Santa Clara County investment pool and other investment options as appropriate so as to earn additional revenue. Interests and overall investment updates are reviewed on a regular basis by the Board of Trustees.

The Financial Aid (FA) Department works in conjunction with District Fiscal Services to ensure that appropriate procedures are in place and are followed. The FA department is part of the annual financial audit process where its compliance with state and federal law and regulations, use of funds, and process are thoroughly reviewed on an annual basis which serves as its systemic assessment process of the proper use of fiscal resource. (3D.3.b.6)

District Administrative Services publishes three annual budget reports: Tentative, Mid-year and Final. The reports contain timely and useful information on the budget, financial reports by fund and FTES enrollment data, as well as grant and categorical funds information. Each report is presented to the District Council and the Board of Trustees and is available to the public via the district website. (3D.3.b.7)

Self-Evaluation

The college meets this standard. West Valley College and the district have multiple levels of oversight to assure ethical and transparent fiscal management of all finances, including financial aid, grants and externally funded programs and auxiliary services. There is a mechanism established to monitor student loan defaults and the revenue streams and assets. The college regularly assesses its processes and uses the results of the assessment to revise and improve its processes. Financial and resource needs are assessed year-round through the participatory governance process starting with the Program Review, department and division chairs, the president’s cabinet, and the college council. Audits are conducted to ensure that ongoing assessment of the fiscal and financial resource for the college and the district are efficiently managed and in compliance.

Actionable Improvement Plans

None.

Evidence

3D.3.b.1	Audit Reports	http://www.westvalley.edu/committees/Accreditation/fiduciary_documents.html
3D.3.b.2	Citizen Bond Oversight Committee Report	http://www.westvalley.edu/committees/Accreditation/2013/evidence/3d/cboc_report_2012-13.pdf
3D.3.b.3	District Fiscal Services	http://wvm.edu/group.aspx?id=2222&linkidentifier=id&itemid=2222
3D.3.b.4	Audit and Budget Oversight Committee Documents	http://wvm.edu/documents.aspx?fid=26758&doc=26759&year=2013
3D.3.b.5	Citizen’s Bond Oversight Committee Agendas, Minutes and Annual Report	http://wvm.edu/documents.aspx?fid=26344&doc=26346&year=2013&category=39548&excludeyear=0
3D.3.b.6	Audit Reports	http://www.westvalley.edu/committees/Accreditation/2013/evidence/1a/fy13_14_budget_process.pdf
3D.3.b.7	Annual Budget Reports	http://www.westvalley.edu/committees/Accreditation/2013/evidence/3d/District_Budgets/