Institutional Self Evaluation Report

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Standard IIID.2.d

All financial resources including long and short term debt instruments (such as bonds and Certificates of Participation) auxiliary activities, fund-raising efforts and grants are used with integrity in a manner consistent with the intended purpose of the funding source.

Descriptive Summary

The distribution of funds from auxiliary activities and grants is managed by the Vice President of Administrative Services, in cooperation with the Vice President of Student Services, the Vice President of Instruction, and responsible area deans. All activities are conducted in concert with college mission and goals. In addition, all allocation decisions and activities occur in accordance with state law, GASB, and the Budget Accounting Manual. (3D.2.d.1)

All budgets are monitored by the Vice President of Administrative Services. Restricted fund programs are established for the purpose of providing specialized services, funded by revenues collected from program participants or from revenues provided by a state or local agency grants. Restricted funds may only be used to pay for the costs of providing services appropriate to the restrictions of the fund source. Revenues from college proprietary activities are shown in the following table together with the Campus Center fiduciary fund with income from student fees and campus center-related activities: (3D.2.d.2, 3)

District and college fund-raising efforts involving events and other donor-related activities are managed by the West Valley-Mission Foundation, not by the colleges. These funds are audited annually.

Citizen’s Bond Oversight Committee (CBOC): The district’s construction bond measures, Measure H and Measure C, are overseen by the Citizen’s Bond Oversight Committee, which meets regularly to appraise the district’s application of bond monies to the priority list of projects.

The Annual Report of the Citizens’ Bond Oversight Committee (CBOC) is required by law in the language of Measure H, which was passed by the voters on November 2, 2004, and the language of Measure C, which was passed by the voters on June 5, 2012 by at least 55% of the votes cast. The CBOC is governed by the Brown Act of 1971 (The Open Meetings Act) and all meeting agendas are published and publicly placed at least 72 hours prior to any scheduled meeting where official business is to be transacted. The general public is invited to attend all meetings. There are no closed sessions of the CBOC.

Concluding its eighth year, the CBOC continued with its program of oversight and review of Measure H expenditures. The compliance to Measure H priorities and procedures by the District Staff and the CBOC was validated by the recent audit performed by Vavrinek, Trine, Day & Company LLP, which was presented to the CBOC on March 13, 2013. The auditors conducted a Measure H Performance Audit to measure compliance with Proposition 39 and concluded that the District expended funds only for the specific projects approved by the voters. A separate Financial Audit was conducted and concluded that the Financial Statements of the Measure H Fund accurately present its financial status. At the time the audit report was prepared, there had been no expenditures of Measure C funds. Subsequently, beginning later in 2013, Measure C projects have started and will be included in future CBOC meeting reports. (3D.2.d.4) Through regular meetings and a variety of reports that the CBOC helped draft, the oversight process was timely and consistent.

Self-Evaluation

The college meets this standard.

Actionable Improvement Plans

None.

Evidence

3D.2.d.1	2012-13 Budget	http://www.westvalley.edu/committees/Accreditation/2013/evidence/3d/2012-13_Final_Budget.08.17.12.rev.pdf
3D.2.d.2	2013-14 Tentative Budget	http://www.westvalley.edu/committees/Accreditation/2013/evidence/3d/2013-14_tentative_budget.05.28.13.pdf
3D.2.d.3	2013-14 Final Budget	http://westvalley.edu/committees/Accreditation/2013/evidence/3d/2013-14_Final_Budget.08.14.13.pdf
3D.2.d.4	CBOC Report	http://www.wvm.edu/WorkArea/DownloadAsset.aspx?id=6750

Standard IIID.2.e

The institution’s internal control systems are evaluated and assessed for validity and effectiveness and the results of this assessment are used for improvement

Descriptive Summary

Adherence to appropriate internal control procedures are one aspect of the annual audit process, but audits are not the sole means by which adherence to proper internal controls are measured. Application of internal control must begin as an inherent part of the institution’s fiscal management culture, pervasively integrated through all aspects of administrative procedure. This is especially true when addressing compliance issues with regard to reporting on federal or state grants, special fund allocations, application of funds sourced from local bonds, and the use of any funds for which there are specific restrictions.

Within the annual auditor’s report, “Internal Control over Financial Reporting” is specifically addressed with respect to the auditor’s tests in accordance with government accounting standards:

Internal Control over Financial Reporting

The management of West Valley-Mission Community College District is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audits, we considered West Valley-Mission Community College District's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of West Valley-Mission Community College District's internal control over financial reporting.

Accordingly, we do not express an opinion on the effectiveness of West Valley-Mission Community College District's internal control over financial reporting. …

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as previously defined.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether West Valley-Mission Community College District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audits and, accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and questioned costs as items 2012-1 and 2012-2.

Although the intent of an audit is to test the accuracy of financial information portrayed in the auditor’s report, auditors, by necessity, must also sufficiently sample and test the procedures employed within the organization so as to be able to validate that the information derived from the financial transactions behind the reported information follow all applicable accounting standards, compliance to regulations. On that basis, auditors have found very few procedural issues with the district’s internal control systems. Those that have been identified as a part of testing for compliance with reporting attendance, grants, or similar tasks have been addressed and corrected.

In 2008, a report was prepared for the district by the California Collegiate Brain Trust (CCBT). (3D.2.e.1) The focus of the report was “to prepare recommendations to help solve the financial deficit being experienced by the district and to help improve institutional effectiveness.” One aspect of that report was to “Recommend organizational changes that will improve accountability for both external and internal stakeholders.” The majority of CCBT recommendations have since been implemented, key among which are the Revenue Allocation Model and a position control system. Other recommendations have been far more complicated to implement, a significant example of which implementation of the Colleague Human Resources module.

In 2006, the Financial Crisis and Management Assistance Team (FCMAT) was engaged to study district fiscal processes and stability. This study agreement requested that FCMAT: (3D.2.e.2)

Conduct an analysis (including processes and procedures used to develop the budget) of the district annual budget and prepare a multiyear financial forecast. The analysis should include the following:

^{Review the district for effective use of resource management.}
^{Evaluate the budget decision-making/management process.}
^{Prioritization of resources.}
^{Complete a Fiscal Health Analysis of the district using the California Community Colleges Sound Fiscal Management Self-Assessment Checklist to determine the district’s current level of financial risk.}
^{Review of the financial measurement system (actual to budget comparison).}
^{Review of the accountability system (enforcement of processes).}
^{Review Fund 17.}
^{Review parameters of the 50% law as it relates to:}
^{Procedures regarding entrepreneurial activities (Fund 17).}
^{Note: Since the FCMAT report was published, the district reclassified entrepreneurial activities to Fund 597; Fund 17 now represents solely student materials fees.}
^Lottery.
^{Explore best practices for a board of trustees in fiscal management}
^{Review the district allocation of resources model.}

FCMAT listed fourteen recommendations for internal controls in its report, each of which has been reviewed and implemented. The recommendations consist mainly of “best practice” control processes and are frequently reviewed in the context of on-going discussions such as the regularly scheduled CBO meetings that include the district’s vice chancellor and both college vice presidents of administrative services. (3D.2.e.3)