Central Louisiana Technical College...central louisiana technical . community college. louisiana community and. technical college system. financial statement audit . for the year ended

CENTRAL LOUISIANA TECHNICAL COMMUNITY COLLEGE

LOUISIANA COMMUNITY AND TECHNICAL COLLEGE SYSTEM

FINANCIAL STATEMENT AUDIT FOR THE YEAR ENDED JUNE 30, 2015

ISSUED JULY 13, 2016

LOUISIANA LEGISLATIVE AUDITOR 1600 NORTH THIRD STREET

POST OFFICE BOX 94397 BATON ROUGE, LOUISIANA 70804-9397

LEGISLATIVE AUDITOR DARYL G. PURPERA, CPA, CFE

ASSISTANT LEGISLATIVE AUDITOR FOR STATE AUDIT SERVICES

NICOLE B. EDMONSON, CIA, CGAP, MPA

DIRECTOR OF FINANCIAL AUDIT ERNEST F. SUMMERVILLE, JR., CPA

Under the provisions of state law, this report is a public document. A copy of this report has been submitted to the Governor, to the Attorney General, and to other public officials as required by state law. A copy of this report is available for public inspection at the Baton Rouge office of the Louisiana Legislative Auditor and at the office of the parish clerk of court. This document is produced by the Louisiana Legislative Auditor, State of Louisiana, Post Office Box 94397, Baton Rouge, Louisiana 70804-9397 in accordance with Louisiana Revised Statute 24:513. One copy of this public document was produced at an approximate cost of $3.05. This material was produced in accordance with the standards for state agencies established pursuant to R.S. 43:31. This report is available on the Legislative Auditor’s website at www.lla.la.gov. When contacting the office, you may refer to Agency ID No. 3283 or Report ID No. 80150135 for additional information. In compliance with the Americans With Disabilities Act, if you need special assistance relative to this document, or any documents of the Legislative Auditor, please contact Elizabeth Coxe, Chief Administrative Officer, at 225-339-3800.

1

TABLE OF CONTENTS

Page Independent Auditor’s Report ......................................................................................................... 2

Management’s Discussion and Analysis ........................................................................................ 5

Statement Basic Financial Statements:

Statement of Net Position ...................................................................................... A ..................13

Statement of Revenues, Expenses, and Changes in Net Position ..................................................................................................... B ..................14

Statement of Cash Flows ....................................................................................... C ..................16

Notes to the Financial Statements ...............................................................................................18

Schedule Required Supplementary Information:

Schedule of the College’s Proportionate Share of the Net Pension Liability ..................................................................................1...................38

Schedule of the College’s Contributions ................................................................2...................38

Schedule of Funding Progress for the Other Postemployment Benefits Plan ...................................................................3...................39

Exhibit Report on Internal Control over Financial Reporting

and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ................................................................... A

Appendix Management’s Corrective Action Plans and Responses to the Findings and Recommendations .................................................................. A

LOUISIANA LEGISLATIVE AUDITOR

DARYL G. PURPERA, CPA, CFE

1600 NORTH THIRD STREET • POST OFFICE BOX 94397 • BATON ROUGE, LOUISIANA 70804-9397

WWW.LLA.LA.GOV • PHONE: 225-339-3800 • FAX: 225-339-3870

June 30, 2016

Independent Auditor’s Report

CENTRAL LOUISIANA TECHNICAL COMMUNITY COLLEGE LOUISIANA COMMUNITY AND TECHNICAL COLLEGE SYSTEM STATE OF LOUISIANA Alexandria, Louisiana Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities of Central Louisiana Technical Community College (College), a college within the Louisiana Community and Technical College System (System), a component unit of the state of Louisiana, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

Central Louisiana Technical Community College Independent Auditor’s Report

3

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the business-type activities of the College as of June 30, 2015, and the changes in its financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matters As disclosed in note 6 to the financial statements, the net pension liability for the College was $13,427,044 at June 30, 2015, as determined by the Louisiana State Employees’ Retirement System (LASERS) and Teachers’ Retirement System of Louisiana (TRSL). The related actuarial valuation was performed by LASERS’s and TRSL’s actuaries using various assumptions. Because actual experience may differ from the assumptions used, there is a risk that this amount at June 30, 2015, could be under or overstated. As discussed in notes 1-L and 14 to the financial statements, the College implemented Governmental Accounting Standards Board (GASB) Statement 68, Accounting and Financial Reporting for Pensions − an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date − an amendment of GASB Statement No. 68, for the year ended June 30, 2015. The adoption of these standards required the College to record its proportionate share of pension amounts related to its participation in cost-sharing, multiple-employer defined benefit pension plans, restating the previous year. As a result of the implementation, the College’s net position decreased by $13,763,053. As discussed in note 1-B, the accompanying financial statements of the College are intended to present the financial position, the changes in financial position and cash flows of only that portion of the business-type activities of the System that is attributable to the transactions of the College. They do not purport to, and do not, present fairly the financial position of the System as of June 30, 2015, the changes in its financial position, or its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Central Louisiana Technical Community College Independent Auditor’s Report

4

Our opinion is not modified with respect to the matters emphasized previously. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis on pages 5 through 12, the Schedule of the College’s Proportionate Share of the Net Pension Liability on page 38, the Schedule of the College’s Contributions on page 38, and the Schedule of Funding Progress for the Other Postemployment Benefits Plan on page 39 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by GASB, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2016, 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 an 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 in considering the College’s internal control over financial reporting and compliance.

Respectfully submitted, Daryl G. Purpera, CPA, CFE Legislative Auditor

PGH:BAC:BDC:EFS:aa CLTCC 2015

5

MANAGEMENT’S DISCUSSION AND ANALYSIS

The Management’s Discussion and Analysis of Central Louisiana Technical Community College’s (College) financial performance presents a narrative overview and analysis of the College’s financial activities for the year ended June 30, 2015. This document focuses on the current-year’s activities, resulting changes, and currently-known facts in comparison with the prior-year’s information. Please read this document in conjunction with the College’s financial statements. Dollar amounts are presented in thousands unless otherwise noted. FINANCIAL HIGHLIGHTS The College’s net position decreased from ($3,298), not restated, to ($17,956) million, or 444.5%, from July 1, 2014, to June 30, 2015. The overall reasons for this change included:

an increase in pension liability due to implementation of Governmental Accounting Standards Board Statement No. 68;

an increase in other postemployment benefits payable;

an increase in deferred inflows and outflows related to pensions;

a decrease in enrollment;

a reduction in federal and state funding; and

an increase in tuition and fees.

Fall enrollment changed from 2,127 to 2,035 from July 1, 2014, to June 30, 2015, a decrease of 4.3%. The reason for this change is attributed to a stabilizing economy and a greater number of available jobs requiring no additional training. However, this trend reversed in the following year’s fall semester when enrollment increased to 2,445. The College’s operating revenues decreased from $3,811 to $2,856 or 25.1% from July 1, 2014, to June 30, 2015, due to a decrease in enrollment and online book store sales. In addition, current management identified inconsistent billing practices in dual enrollment for student tuition, as identified, in part, by the Legislative Auditor’s finding relating to student receivables not collected. Operating expenses, however, increased by 1.7% to $15,027 for the year ended June 30, 2015, due in part to filling vacant faculty positions, completion of required classroom and building maintenance, increase in instructional support and supplies for state prison classroom sites, and increase in instructional costs associated with union apprenticeship programs. Nonoperating revenues fluctuate depending upon the level of state appropriations and other nonoperating revenues. The increase to $11,275 in 2015 from $10,745 in 2014 is attributed to receiving additional Rapid Response Training Grants.

Central Louisiana Technical Community College Management’s Discussion and Analysis

6

The attached Louisiana Legislative Auditor’s opinion letter states that this is the College’s third year in a row with deficiencies in areas of internal controls. These areas of deficiencies are of grave concern and importance to management, as management has annually requested this audit to help identify and gauge the College’s progress, opportunities, strengths, and weaknesses. Current management takes ownership of its challenges, has identified sources and solutions, facilitated positive change through transparent and consistent communication, and is in the process of building a stronger team through both education and training. All of this is because the College recognizes its fiscal and operating responsibility to students, communities, and supporters and has a continued strong commitment to provide programs of high wage, high demand, and high skill that the community and business partners have grown to expect. OVERVIEW OF THE FINANCIAL STATEMENTS The following graphic illustrates the minimum requirements for special purpose governments engaged in business-type activities established by GASB Statement No. 34, Basic Financial Statements − and Management’s Discussion and Analysis − for State and Local Governments. These financial statements consist of three sections − Management’s Discussion and Analysis (this section), the basic financial statements (including the notes to the financial statements), and required supplementary information. Basic Financial Statements The basic financial statements present information for the College as a whole, in a format designed to make the statements easier for the reader to understand. The statements in this section include the Statement of Net Position; the Statement of Revenues, Expenses, and Changes in Net Position; and the Statement of Cash Flows. The Statement of Net Position (page 13) presents assets, deferred outflows of resources, liabilities, and deferred inflows of resources separately. The difference between assets plus deferred outflows and liabilities plus deferred inflows is net position and may provide a useful indicator of whether the financial position of the College is improving or deteriorating.

Management’s Discussion and Analysis

Basic Financial Statements

Required Supplementary Information (other than MD&A)


7

The Statement of Revenues, Expenses, and Changes in Net Position (pages 14-15) presents information showing how the College’s net position changed as a result of current-year operations. Regardless of when cash is affected, all changes in net position are reported when the underlying transactions occur. As a result, there are transactions included that will not affect cash until future fiscal periods. The Statement of Cash Flows (pages 16-17) presents information showing how the College’s cash changed as a result of current-year operations. The Statement of Cash Flows is prepared using the direct method and includes the reconciliation of operating income (loss) to net cash provided (used) by operating activities (indirect method) as required by GASB Statement No. 34. The financial statements provide both long-term and short-term information about the College’s overall financial status. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. The College’s financial statements are prepared on an accrual basis in conformity with accounting principles generally accepted in the United States of America as applied to government units. Under this basis of accounting, revenues are recognized in the period in which they are earned, expenses are recognized in the period in which they are incurred, and depreciation of assets is recognized in the Statement of Revenues, Expenses, and Changes in Net Position. All assets, liabilities, and deferred inflows/outflows associated with the operation of the College are included in the Statement of Net Position.


8

FINANCIAL ANALYSIS

2015*

2014 VariancePercentage

ChangeAssets: Current assets and other assets $2,032 $2,389 ($357) (14.9%) Capital assets 2,159 2,472 (313) (12.7%) Total assets 4,191 4,861 (670) (13.8%)Total deferred outflow of resources 1,783 0 1,783 100.0%

Total assets and deferred outflow of resources $5,974 $4,861 $1,113 22.9%

Liabilities: Current liabilities $1,363 $1,282 $81 6.3% Long-term liabilities 20,694 6,877 13,817 200.9%

Total liabilities 22,057 8,159 13,898 170.3%Total deferred inflows of resources 1,873 0 1,873 100.0%

Total liabilities and deferred inflow of resources $23,930 $8,159 $15,771 193.3%

Net Position: Investment in capital assets $2,159 $2,472 ($313) (12.7%) Restricted 1,932 2,090 (158) (7.6%) Unrestricted (22,047) (7,860) (14,187) (180.5%)

Total net position ($17,956) ($3,298) ($14,658) (444.5%)

*Amounts for 2014 were not restated for GASB Statement No. 68 regarding pensions. The restatement of the prior year was not practical.

Table A-1

For the Fiscal Years Ended June 30, 2015 and 2014

Central Louisiana Technical Community CollegeComparative Statement of Net Position

(in thousands of dollars)


9

This schedule is prepared from the College’s Statement of Net Position as shown on page 13, which is presented on an accrual basis of accounting. Significant Statement of Net Position changes for 2015 include, as previously stated:

an implementation of GASB Statement No. 68 which required, for the first time, recording of $13.4 million pension liability, and

an increase in liabilities due to other postemployment benefits payable.

Investment in capital assets consists of capital assets net of accumulated depreciation. Restricted net position represents those assets that are only available for spending on certain activities as a result of legislative requirements, donor agreements, or grant requirements. Conversely, unrestricted net position is the portion of net position that has no limitations on how these amounts may be spent.


10

2015*

2014 VariancePercentage

ChangeOperating revenues: Student tuition and fees, net $846 $1,950 ($1,104) (56.6%) Grants and contracts 1,710 1,603 107 6.7% Auxiliary enterprises, net 82 257 (175) (68.1%) Other 218 1 217 21,700.0% Total operating revenues 2,856 3,811 (955) (25.1%)

Operating expenses: Education and general: Instruction 6,998 6,738 260 3.9% Academic support 1,295 1,038 257 24.8% Student services 902 964 (62) (6.4%) Institutional support 2,183 2,230 (47) (2.1%) Operations and maintenance of plant 1,783 1,452 331 22.8% Depreciation 304 378 (74) (19.6%) Scholarships and fellowships 1,111 1,351 (240) (17.8%) Auxiliary enterprises, net 217 360 (143) (39.7%) Other operating expenses 234 262 (28) (10.7%) Total operating expenses 15,027 14,773 254 1.7%

Operating loss (12,171) (10,962) (1,209) (11.0%)

Nonoperating revenues: State appropriations 5,897 5,964 (67) (1.1%) Gifts 2 11 (9) (81.8%) Federal nonoperating revenues 3,192 3,644 (452) (12.4%) Other nonoperating revenues 2,184 1,126 1,058 94.0% Net nonoperating revenues 11,275 10,745 530 4.9%

Loss before Additions (896) (217) (679) 312.9%

Additions to permanent endowments 1 0 1 100.0%

Change in net position (895) (217) (678) (312.4%)

Net position, beginning of year, restated (17,061) (3,081) (13,980) (453.7%)

Net position, end of year ($17,956) ($3,298) ($14,658) (444.5%)

*Amounts for 2014 were not restated for GASB Statement No. 68 regarding pensions. The restatement of the prior year was not practical.

Table A-2

For the Fiscal Years Ended June 30, 2015 and 2014

and Changes in Net Position

Central Louisiana Technical Community CollegeComparative Statement of Revenues, Expenses,

(in thousands of dollars)


11

Nonoperating revenues increased by 4.9% to $11,275, primarily attributable to receiving Rapid Response Training Grants. State appropriations decreased from $5,964 to $5,897 due to continuing attempts by state government to correct budgeting issues. The College’s operating revenues decreased by $955, or 25.1%. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2015, the College had invested approximately $2,159 in capital assets, net of accumulated depreciation. This amount represents a net decrease (including additions and disposals, net of depreciation) of approximately $313, or 12.7%, over the previous fiscal year. More detailed information about the College’s capital assets is presented in note 4 to the financial statements.

2015 2014 VariancePercentage

Change

Land and improvements $589 $589Buildings 1,247 1,436 ($189) (13.2%)Equipment 323 447 (124) (27.7%)

Total $2,159 $2,472 ($313) (12.7%)

As of June 30, 2015 and 2014

Table A-3Central Louisiana Technical Community College

Capital Assets, Net of Depreciation(in thousands of dollars)

Debt The College had no bonds or notes outstanding at year-end. ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE The following currently-known facts, decisions, or conditions are expected to have a significant effect on financial position or results of operations:

Decreases in current enrollment

Increases in tuition and fees


12

Changes in state appropriations

Decrease in grant participation

CONTACTING THE CENTRAL LOUISIANA TECHNICAL COMMUNITY COLLEGE’S MANAGEMENT This financial report is designed to provide our residents, taxpayers, customers, investors, and creditors with a general overview of the College’s finances and show the College’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact Lee Claudette Moore, Vice-Chancellor of Finance at [email protected].

13

Statement ACENTRAL LOUISIANA TECHNICAL COMMUNITY COLLEGELOUISIANA COMMUNITY AND TECHNICAL COLLEGE SYSTEMSTATE OF LOUISIANA

Statement of Net PositionJune 30, 2015

ASSETSCurrent assets: Cash and cash equivalents (note 2) $531,329 Receivables, net (note 3) 616,637 Due from federal government 185,642 Due from Louisiana Community and Technical College System (LCTCS) 395,650 Prepaid expenses and advances 11,729 Total current assets 1,740,987Noncurrent assets: Restricted Asset: Cash and cash equivalents (note 2) 290,311 Capital assets, net (note 4) 2,159,349 Total noncurrent assets 2,449,660 Total assets 4,190,647

DEFERRED OUTFLOWS OF RESOURCESDeferred outflows related to pensions (note 6) 1,783,436

Total deferred outflows of resources 1,783,436

LIABILITIES Current liabilities: Accounts payable and accruals (note 9) 762,779 Due to federal government 7,216 Due to LCTCS 153,056 Unearned revenues (note 10) 310,574 Compensated absences payable (notes 11 and 12) 114,971 Amounts held in custody for others 14,617 Total current liabilities 1,363,213Noncurrent liabilities: Compensated absences payable (notes 11 and 12) 406,920 Net pension liability (notes 6 and 12) 13,427,044 Other postemployment benefits payable (notes 8 and 12) 6,859,800 Total noncurrent liabilities 20,693,764

Total liabilities 22,056,977

DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions (note 6) 1,873,190 Total deferred inflows of resources 1,873,190

NET POSITIONInvestment in capital assets 2,159,349Restricted - nonexpendable (note 13) 289,136Restricted - expendable (note 13) 1,642,516Unrestricted (22,047,085) Total Net Position ($17,956,084)

The accompanying notes are an integral part of this statement.

14

Statement B

CENTRAL LOUISIANA TECHNICAL COMMUNITY COLLEGELOUISIANA COMMUNITY AND TECHNICAL COLLEGE SYSTEMSTATE OF LOUISIANA

Statement of Revenues, Expenses, and Changes in Net PositionFor the Year Ended June 30, 2015

OPERATING REVENUESStudent tuition and fees $5,370,941 Less scholarship allowances (4,525,062) Net student tuition and fees 845,879Federal grants and contracts 1,455,259State and local grants and contracts 254,693Interagency revenues 138,253Auxiliary enterprises revenues 82,220Other operating revenues 79,633 Total operating revenues 2,855,937

OPERATING EXPENSESEducational and general: Instruction 6,998,149 Academic support 1,295,360 Student services 902,125 Institutional support 2,182,551 Operations and maintenance of plant 1,782,785 Depreciation (note 4) 304,170 Scholarships and fellowships 1,110,970Auxiliary enterprises 216,852Interagency expense 233,630 Total operating expenses 15,026,592

OPERATING LOSS (12,170,655)

(Continued)


15

Statement B

CENTRAL LOUISIANA TECHNICAL COMMUNITY COLLEGELOUISIANA COMMUNITY AND TECHNICAL COLLEGE SYSTEMSTATE OF LOUISIANAStatement of Revenues, Expenses, and Changes in Net PositionFor the Year Ended June 30, 2015

NONOPERATING REVENUESState appropriations $5,897,394Gifts 1,392Federal nonoperating revenues 3,192,440Net investment income 56Other nonoperating revenues 2,183,745 Net nonoperating revenues 11,275,027

LOSS BEFORE ADDITIONS (895,628)

Additions to permanent endowments 500

DECREASE IN NET POSITION (895,128)

NET POSITION AT BEGINNING OF YEAR (restated) (note 14) (17,060,956)

NET POSITION AT END OF YEAR ($17,956,084)

(Concluded)


16

Statement C


Statement of Cash FlowsFor the Year Ended June 30, 2015

CASH FLOWS FROM OPERATING ACTIVITIES: Tuition and fees $1,331,468 Grants and contracts 1,733,045 Auxiliary enterprise receipts 82,220 Payments for employee compensation (6,556,607) Payments for benefits (2,989,470) Payments for utilities (428,657) Payments for supplies and services (3,216,707) Payments for scholarships and fellowships (1,110,970) Other receipts 52,349 Net cash used by operating activities (11,103,329)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: State appropriations 5,870,489 Gifts and grants for other than capital purposes 5,582,730 Private gifts for endowment purposes 500 Taylor Opportunity Program for Students (TOPS) receipts 164,445 TOPS disbursements (164,445) Other receipts 11,365 Net cash provided by noncapital financing activities 11,465,084

CASH FLOWS FROM INVESTING ACTIVITIES: Interest received on investments 56

(Continued)


17

Statement C

CENTRAL LOUISIANA TECHNICAL COMMUNITY COLLEGELOUISIANA COMMUNITY AND TECHNICAL COLLEGE SYSTEMSTATE OF LOUISIANAStatement of Cash FlowsFor the Year Ended June 30, 2015

NET INCREASE IN CASH AND CASH EQUIVALENTS $361,811

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 459,829

CASH AND CASH EQUIVALENTS AT END OF YEAR $821,640

RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES: Operating loss ($12,170,655) Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation expense 304,170 Pension expense 1,286,565 Current-year pension contributions made subsequent to the measurement date (1,492,620) Changes in assets and liabilities: Decrease in accounts receivables, net 488,259 Decrease in prepaid expenses and advances 9,413 Increase in accounts payable and accrued liabilities 159,617 (Decrease) in unearned revenue (28,739) Increase in amounts held in custody for others 323 (Decrease) in compensated absences (22,262) Increase in other postemployment benefits payable 362,600

Net cash used by operating activities ($11,103,329)

NONCASH INVESTING, NONCAPITAL FINANCING, AND CAPITAL AND RELATED FINANCING TRANSACTIONS: Non-Employer contributing entity revenue $40,200

(Loss) on disposal of capital assets ($8,045)

(Concluded)


18

NOTES TO THE FINANCIAL STATEMENTS

INTRODUCTION Central Louisiana Technical Community College (College) is a publicly-supported institution of higher education. The College is a part of the Louisiana Community and Technical College System (System), which is a component unit of the state of Louisiana, within the executive branch of government. The College is under the management and supervision of the System Board of Supervisors; however, certain items, such as the annual budget of the College and changes to the degree programs and departments of instruction, require the approval of the Louisiana Board of Regents of Higher Education. As a state college, operations of the College’s instructional programs are funded through annual lapsing appropriations made by the Louisiana Legislature. The College is comprised of seven campuses located in Alexandria, Cottonport, Winnfield, Ferriday, Leesville, Oakdale, and Jena. The College also provides training programs at five correctional centers. The College offers associate of applied science degrees, technical competency areas, technical diplomas, and certificate of technical studies. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting principles and reporting standards. These principles are found in the Codification of Governmental Accounting and Financial Reporting Standards, published by GASB. The accompanying financial statements have been prepared on the full accrual basis in accordance with accounting principles generally accepted in the United States of America as applied to governmental units. B. REPORTING ENTITY Using the criteria in GASB Statement 61, the Division of Administration, Office of Statewide Reporting and Accounting Policy has defined the governmental reporting entity to be the state of Louisiana. The College is part of the System, which is considered a component unit blended as an enterprise fund of the state of Louisiana because the state exercises oversight responsibility and has accountability for fiscal matters as follows: (1) a majority of the members of the governing board are appointed by the governor; (2) the state has control and exercises authority over budget matters; and (3) the state has

Central Louisiana Technical Community College Notes to the Financial Statements

19

agreed through cooperative endeavor agreements to fund lease/debt service payments on all outstanding bonds. The accompanying financial statements present information only as to the transactions of the programs of the College. Annually, the state of Louisiana issues a Comprehensive Annual Financial Report, which includes the activity contained in the accompanying financial statements within the System amounts. The Louisiana Legislative Auditor audits the basic financial statements of the System and the state of Louisiana. C. BASIS OF ACCOUNTING For financial reporting purposes, the College is considered a special-purpose government engaged only in business-type activities. Accordingly, the College’s financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-college transactions have been eliminated. D. CASH AND CASH EQUIVALENTS Cash includes cash on hand and interest-bearing demand deposits. Under state law, the College may deposit funds within a fiscal agent bank organized under the laws of the state of Louisiana, the laws of any other state in the Union, or the laws of the United States. The College may also invest in certificates of deposit of state banks organized under Louisiana law and national banks having their principal offices in Louisiana. The College considers certificates of deposit and all highly-liquid investments with an original maturity of three months or less to be cash equivalents. Restricted cash and cash equivalents consist of assets that are restricted by a donor.

E. CAPITAL ASSETS Capital assets are reported at cost at the date of acquisition or their estimated fair value at the date of donation. For movable property, the College’s capitalization policy includes all items with a unit cost of $5,000 or more and an estimated useful life greater than one year. Renovations to buildings and land improvements that significantly increase the value or extend the useful life of the structure are capitalized if they exceed $100,000. Routine repairs and maintenance are charged to operating expense in the year in which the expense is incurred. Depreciation is computed using the straight-line method over the estimated useful life of the assets, generally 40 years for buildings and three to 10 years for most movable property.


20

F. UNEARNED REVENUES Unearned revenues include amounts received for tuition and fees before the end of the fiscal year but are related to the subsequent accounting period. G. NONCURRENT LIABILITIES Noncurrent liabilities include estimated amounts for accrued compensated absences, the pension liability, and other postemployment benefits that will not be paid within the next fiscal year. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Louisiana State Employees’ Retirement System (LASERS) and the Teachers’ Retirement System of Louisiana (TRSL), and additions to/deductions from each system’s fiduciary net position have been determined on the same basis as they are reported by the system. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. H. COMPENSATED ABSENCES Employees accrue and accumulate annual and sick leave in accordance with state law and administrative regulations. The leave is accumulated without limitation; however, nine-month faculty members do not accrue annual leave but are granted faculty leave during holiday periods when students are not in classes. Employees who are considered having nonexempt status according to the guidelines contained in the Fair Labor Standards Act may be paid for compensatory leave earned. Upon separation of employment, both classified and non-classified personnel or their heirs are compensated for accumulated annual leave not to exceed 300 hours. In addition, academic and non-classified personnel or their heirs are compensated for accumulated sick leave not to exceed 25 days upon retirement or death. Act 343 of 1993 allows members of LASERS, upon application for retirement, the option of receiving an actuarially-determined lump sum payment for annual and sick leave which would otherwise have been used to compute years of service for retirement. Unused annual leave in excess of 300 hours plus unused sick leave are used to compute retirement benefits for the TRSL and LASERS but not for the Optional Retirement System. Upon termination or transfer, a classified employee will be paid for any time and one-half hour compensatory leave earned and may or may not be paid for any straight hour-for-hour compensatory leave earned. Compensation paid will be based on the classified employee’s hourly rate of pay at termination or transfer.


21

I. NET POSITION Net position comprises the various net earnings from operations, nonoperating revenues, expenses, and contributions of capital. The College’s net position is classified in the following components:

(a) Investment in capital assets consists of the College’s total investment in capital assets, net of accumulated depreciation. The College does not have any outstanding debt obligations related to capital assets.

(b) Restricted net position - nonexpendable consists of endowment and

similar type funds for which donors or other outside sources have stipulated, as a condition of the gift instrument that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principle.

(c) Restricted net position - expendable consists of resources that the College is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties.

(d) Unrestricted net position consists of resources derived from student tuition and fees, state appropriations, sales and services of educational departments, and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the College and may be used at the discretion of the governing board to meet current expenses and for any purpose.

When an expense is incurred that can be paid using either restricted or unrestricted resources, the College’s policy is to first apply the expense toward unrestricted resources, then toward restricted resources. J. CLASSIFICATION OF REVENUES AND EXPENSES The College has classified its revenues and expenses as either operating or nonoperating according to the following criteria:

(a) Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship discounts and allowances; (2) sales and services of educational departments; and (3) most federal, state, and local grants and contracts.

(b) Nonoperating revenue includes activities that have the characteristics of

nonexchange transactions, such as state appropriations, certain federal revenues (Pell), gifts and contributions, investment income, and grants that do not have the characteristics of exchange transactions.


22

(c) Operating expenses generally include transactions resulting from providing goods or services, such as (1) payments to vendors for goods or services; (2) payments to employees for services; and (3) payments for employee benefits.

(d) Nonoperating expenses include transactions resulting from financing

activities, capital acquisitions, and investing activities. K. SCHOLARSHIP DISCOUNTS AND ALLOWANCES Student tuition and fee revenues and certain other revenues from students are reported net of scholarship discounts and allowances in the Statement of Revenues, Expenses, and Changes in Net Position. Scholarship discounts and allowances are the difference between the stated charge for services (tuition and fees) provided by the College and the amount that is paid by students and/or third parties making payments on the students’ behalf. L. ADOPTION OF NEW ACCOUNTING PRINCIPLES For the year ended June 30, 2015, the following statements were implemented: GASB Statement No. 68, Accounting and Financial Reporting for Pensions − an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date − an amendment of GASB Statement No. 68. These statements changed the accounting and financial reporting for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. The cumulative effect of applying these statements is reported as a restatement of beginning net position for fiscal year 2015. The restatement of all prior-year accounts was not practical because the earliest available measurement date of the net pension liability is July 1, 2014. See note 14 GASB Statement No. 68, Pension Restatement for the effect on the 2015 beginning net position. M. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.


23

2. CASH AND CASH EQUIVALENTS At June 30, 2015, the College has cash and cash equivalents (book balance) of $821,640 as follows:

Demand deposits $530,004Certificate of deposit 289,136Petty cash 2,500

Total $821,640

These cash and cash equivalents are reported as follows on the Statement of Net Position:

Current assets $531,329Noncurrent assets 290,311

Total $821,640

Custodial credit risk is the risk that, in the event of a bank failure, the College’s deposits may not be recovered. Under state law, these deposits (or the resulting bank balances) must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent. These securities are held in the name of the College or the pledging bank by a holding or custodial bank that is mutually acceptable to both parties. At June 30, 2015, the College has $888,626 in deposits (collective bank balances), which are secured from risk by federal deposit insurance plus pledged securities. 3. RECEIVABLES Receivables are shown on the Statement of Net Position, net of an allowance for doubtful accounts, at June 30, 2015. These receivables are composed of the following:

Allowance for Doubtful Receivables,

Receivables Accounts Net

Student tuition and fees $1,619,008 $1,044,407 $574,601State and private grants and contracts 35,388 NONE 35,388Other 6,648 NONE 6,648

Total $1,661,044 $1,044,407 $616,637

There is no noncurrent portion of receivables.


24

4. CAPITAL ASSETS A summary of changes in capital assets for the fiscal year ended June 30, 2015, follows:

Balance BalanceJune 30, 2014 Additions Retirements June 30, 2015

Capital assets not being depreciated: Land $589,179 NONE NONE $589,179

Total capital assets not being depreciated $589,179 NONE NONE $589,179

Other capital assets: Buildings $8,146,758 NONE NONE $8,146,758 Less accumulated depreciation (6,710,742) ($188,779) NONE (6,899,521) Total buildings 1,436,016 (188,779) NONE 1,247,237

Equipment 2,989,840 NONE ($104,472) $2,885,368 Less accumulated depreciation (2,543,471) (115,391) 96,427 (2,562,435) Total equipment 446,369 (115,391) (8,045) 322,933

Total other capital assets $1,882,385 ($304,170) ($8,045) $1,570,170

Capital asset summary: Capital assets not being depreciated $589,179 NONE NONE $589,179 Other capital assets, at cost 11,136,598 NONE ($104,472) 11,032,126 Total cost of capital assets 11,725,777 NONE (104,472) 11,621,305 Less accumulated depreciation (9,254,213) ($304,170) 96,427 (9,461,956)

Capital assets, net $2,471,564 ($304,170) ($8,045) $2,159,349

5. CAPITAL ASSETS HELD BY OTHERS Construction for new facilities at the Huey P. Long and Ferriday campuses were completed during early fiscal year 2013. The College implemented Banner during fiscal years 2012 and 2013. The new construction and some of the Banner implementation costs were funded by bonds issued by LCTCS Facilities Corporation in accordance with Act 391 of the 2007 Regular Legislative Session. The cost of acquisition of the sites and construction of the facilities, along with the related bond debt, are recorded in the System’s financial statements through the blending of the LCTCS Facilities Corporation with the System. The Banner asset will be capitalized by the System Board Office. 6. PENSION PLANS The College is a participating employer in two statewide, public employee retirement systems, the Louisiana State Employees’ Retirement System (LASERS) and the Teachers’ Retirement System of Louisiana (TRSL). Both systems have separate boards of trustees and administer cost-sharing, multiple-employer defined benefit pension plans, including classes of employees


25

with different benefits and contribution rates (sub-plans). Article X, Section 29(F) of the Louisiana Constitution of 1974 assigns the authority to establish and amend benefit provisions of all sub-plans administered by these systems to the state legislature. Each system issues a public report that includes financial statements and required supplementary information. Copies of these reports for LASERS and TRSL may be obtained at www.lasersonline.org and www.trsl.org, respectively. TRSL also administers an optional retirement plan (ORP), which was created by Louisiana Revised Statute (R.S.) 11:921-931 for academic and administrative employees of public institutions of higher education and is considered a defined contribution plan (see note 7 on page 30). A portion of the employer contributions for ORP plan members is dedicated to the unfunded accrued liability of the TRSL defined benefit plan. General Information about the Pension Plans Plan Descriptions/Benefits Provided LASERS - LASERS administers a plan to provide retirement, disability, and survivor’s benefits to eligible state employees and their beneficiaries as defined in R.S. 11:411-414. The age and years of creditable service (service) required in order for a member to receive retirement benefits are established by R.S. 11:441 and vary depending on the member’s hire date, employer, and job classification. Act 992 of the 2010 Regular Legislative Session closed existing sub-plans for members hired before January 1, 2011, and created new sub-plans for regular members, hazardous duty members, and judges. The substantial majority of members may retire with full benefits at any age upon completing 30 years of service and at age 60 upon completing five to 10 years of service. Additionally, members may choose to retire with 20 years of service at any age, with an actuarially-reduced benefit. Eligibility for retirement benefits and the computation of retirement benefits are provided for in R.S. 11:444. The basic annual retirement benefit for members is equal to a percentage (between 2.5% and 3.5%) of average compensation multiplied by the number of years of service, generally not to exceed 100% of average compensation. Average compensation is defined as the member’s average annual earned compensation for the highest 36 consecutive months of employment for members employed prior to July 1, 2006, or highest 60 consecutive months of employment for members employed after that date. A member leaving service before attaining minimum retirement but after completing certain minimum service requirements, generally 10 years, becomes eligible for a benefit provided the member lives to the minimum service retirement age and does not withdraw the accumulated contributions. Eligibility requirements and benefit computations for disability benefits are provided for in R.S. 11:461. All members with 10 or more years of service, or members aged 60 or older regardless of date of hire, who become disabled may receive a maximum disability benefit equivalent to the regular retirement formula without reduction by reason of age. Hazardous duty personnel who become disabled in the line of duty will receive a disability benefit equal to 75% of final average compensation.


26

Provisions for survivor’s benefits are provided for in R.S. 11:471-478. Under these statutes, the deceased member who was in state service at the time of death must have a minimum of five years of service, at least two of which were earned immediately prior to death, or who had a minimum of 20 years of service regardless of when earned in order for a benefit to be paid to a minor or handicapped child. Benefits are payable to an unmarried child until age 18, or age 23 if the child remains a full-time student. The minimum service requirement is 10 years for a surviving spouse with no minor children, and benefits are to be paid for life to the spouse or qualified handicapped child. LASERS has established a Deferred Retirement Option Plan (DROP). When members enter DROP, their status changes from active member to retiree even though they continue to work and draw their salary for a period up to three years. The election is irrevocable once participation begins. During participation, benefits otherwise payable are fixed and deposited in an individual DROP account. Upon leaving DROP, members must choose among available alternatives for the distribution of benefits that have accumulated in their DROP accounts. TRSL - TRSL administers a plan to provide retirement, disability, and survivor benefits to employees who meet the legal definition of a “teacher” as provided for in R.S 11:701. Eligibility for retirement benefits and the calculation of retirement benefits are provided for in R.S. 11:761. Statutory changes closed existing, and created new sub-plans for members hired on or after January 1, 2011. Most members are eligible to receive retirement benefits: (1) at the age of 60 with five years of service, (2) at the age of 55 with at least 25 years of service or, (3) at any age with at least 30 years of service. Retirement benefits are calculated by applying a percentage ranging from 2% to 3% of final average salary multiplied by years of service. Average compensation is defined as the member’s average annual earned compensation for the highest 36 consecutive months of employment for members employed prior to July 1, 2011, or highest 60 consecutive months of employment for members employed after that date. Under R.S. 11:778 and 11:779, members who have suffered a qualified disability are eligible for disability benefits if employed prior to January 1, 2011, and attained at least five years of service, or if employed on or after January 1, 2011, and attained at least 10 years of service. Members employed prior to January 1, 2011, receive disability benefits equal to 2.5% of average compensation multiplied by the years of service, but not more than 50% of average compensation subject to statutory minimums. Members employed on or after January 1, 2011, receive disability benefits equivalent to the regular retirement formula without reduction by reason of age. Survivor benefits are provided for in R.S. 11:762. In order for survivor benefits to be paid, the deceased member must have been in state service at the time of death and must have a minimum of five years of service, at least two of which were earned immediately prior to death, or must have had a minimum of twenty years of service regardless of when earned in order for a benefit to be paid to a minor or handicapped child. Survivor benefits are equal to 50% of the benefit to which the member would have been entitled if retired on the date of death using a factor of 2.5% regardless of years of service or age, or $600 per month, whichever is greater. Benefits are


27

payable to an unmarried child until age 18, or age 23 if the child remains a full-time student. The minimum service credit requirement is 10 years for a surviving spouse with no minor children, and benefits are to be paid for life to the spouse or a qualified handicapped child. TRSL has established a DROP plan. When members enter DROP, their status changes from active member to retiree even though they continue to work and draw their salary for a period up to three years. The election is irrevocable once participation begins. During participation, benefits otherwise payable are fixed and deposited in an individual DROP account. Upon leaving DROP, members must choose among available alternatives for the distribution of benefits that have accumulated in their DROP accounts Cost of Living Adjustments As fully described in Title 11 of the Louisiana Revised Statutes, LASERS and TRSL allow for the payment of cost of living adjustments, or COLAs, that are funded through investment earnings when recommended by the board of trustees and approved by the Legislature. These ad hoc COLAs are not considered to be substantively automatic. Contributions Article X, Section 29(E)(2)(a) of the Louisiana Constitution of 1974 assigns the legislature the authority to determine employee contributions. Employer contributions are actuarially determined using statutorily-established methods on an annual basis and are constitutionally-required to cover the employer’s portion of the normal cost and provide for the amortization of the unfunded accrued liability. Employer contributions are adopted by the legislature annually upon recommendation of the Public Retirement Systems’ Actuarial Committee. For those members participating in the TRSL defined contribution ORP, a portion of the employer contributions are used to fund the TRSL defined benefit plan’s unfunded accrued liability. Employer contributions to LASERS for fiscal year 2015 were $203,595, with active member contributions ranging from 7.5% to 8%, and employer contributions of 37%. Employer defined benefit plan contributions to TRSL for fiscal year 2015 were $1,289,025, with active member contributions of 8% and employer contributions of 22.7% and 26.4% for ORP and defined benefit plan employees, respectively. Non-employer contributing entity contributions to TRSL, which are comprised of ad valorem tax revenue, totaled $40,200 for fiscal year 2015, and were recognized as revenue by the College. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2015, the College reported liabilities of $1,990,179 and $11,436,865 under LASERS and TRSL, respectively, for its proportionate share of the Net Pension Liability (NPL). The NPL for LASERS and TRSL was measured as of June 30, 2014, and the total pension liabilities used to calculate the NPL were determined by actuarial valuations as of that date. The College’s proportions of the NPL were based on projections of the College’s long-term share of contributions to the pension plans relative to the projected contribution of all participating


28

employers, actuarially determined. As of June 30, 2014, the most recent measurement date, the College’s proportions and the changes in proportion from the prior measurement date were 0.03183%, or a decrease of (0.00080%), for LASERS and 0.11189%, or an increase of 0.00055%, for TRSL. For the year ended June 30, 2015, the College recognized a total pension expense of $1,286,565, or $273,700 and $1,012,865 for LASERS and TRSL, respectively. The College reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows of Resources Deferred Inflows of ResourcesLASERS TRSL Total LASERS TRSL Total

Differences between expected and actual experience $35,463 $109,498 $144,961

Net difference between projected and actual earnings earnings on pension plan investments 251,777 1,459,370 1,711,147

Changes in proportion and differences between employer contributions and proportionate share of contributions $238,094 $52,722 $290,816 17,082 17,082

Employer contributions subsequent to the measurement date 203,595 1,289,025 1,492,620

Total $441,689 $1,341,747 $1,783,436 $287,240 $1,585,950 $1,873,190

Deferred outflows of resources related to pensions resulting from the College’s contributions subsequent to the measurement date will be recognized as a reduction of the LASERS and TRSL NPL in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended June 30, LASERS TRSL Total2016 $38,372 ($383,307) ($344,935)2017 $38,372 ($383,307) ($344,935)2018 ($62,944) ($383,307) ($446,251)2019 ($62,944) ($383,307) ($446,251)

Actuarial Assumptions The total pension liabilities for LASERS and TRSL in the June 30, 2014, actuarial valuations were determined using the following actuarial assumptions, applied to all periods included in the measurements:


29

LASERS TRSLValuation Date June 30, 2014 June 30, 2014Actuarial Cost Method Entry Age Normal Entry Age NormalExpected Remaining Service Lives 3 years 5 yearsInvestment Rate of Return 7.75% per annum 7.75%, net of investment exp.Inflation Rate 3% per annum 2.5% per annumMortality - Non-disabled RP-2000, improvement to 2015 RP-2000, scale AA to 2025Mortality - Disabled RP-2000 RP-2000, scale AA to 2025Termination, Disability, Retirement 2009-2013 experience study 2008-2012 experience studySalary Increases 2009-2013 experience study,

ranging from 3.0% to 14.5% 3.5% to 10.0%Cost of Living Adjustments Not substantively automatic Not substantively automatic For LASERS and TRSL, the long-term expected rate of return for each plan was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and an adjustment for the effect of rebalancing/diversification. The target allocation and best estimates of arithmetic/geometric real rates of return for each major asset class are summarized for each plan in the following table:

Target AllocationLong-term Expected Real Rate of Return

TRSL (arithmetic) Domestic equity 31% 4.71% International equity 19% 5.69% Domestic fixed income 14% 2.04% International fixed income 7% 2.80% Alternatives 29% 5.94% Total 100%

LASERS (geometric) Cash 0% 0.50% Domestic equity 27% 4.69% International equity 30% 5.83% Domestic fixed income 11% 2.34% International fixed income 2% 4.00% Alternative investments 23% 8.09% Global tactical asset allocation 7% 3.42% Total 100% 5.78%


30

Discount Rate. The discount rate used to measure the total pension liability was 7.75% for both LASERS and TRSL. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate, and that employer contributions from participating employers will be made at contractually-required rates, actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the proportionate share of the NPL to changes in the discount rate. The following presents the College’s proportionate share of the NPL for LASERS and TRSL using the current discount rate, as well as what the College’s proportionate share of the NPL would be if it were calculated using a discount rate that is one percentage-point lower or one percentage-point higher than the current rate:

1.0% Decrease Current Discount Rate 1.0% IncreaseLASERS $2,552,566 $1,990,179 $1,513,476TRSL $14,566,517 $11,436,865 $8,773,377

Pension plan fiduciary net position. Detailed information about LASERS and TRSL fiduciary net position is available in the separately-issued financial reports referenced previously. Payables to the Pension Plan. At June 30, 2015, the College had $17,287 and $117,983 in payables to LASERS and TRSL, respectively, for the June 2015 employee and employer legally-required contributions. 7. OPTIONAL RETIREMENT SYSTEM TRSL administers an optional retirement plan (ORP), which was created by R.S. 11:921-931 for academic and administrative employees of public institutions of higher education. The purpose of the ORP is to provide retirement and death benefits to the participants while affording the maximum portability of these benefits to the participants. The ORP is a defined contribution plan that provides for full and immediate vesting of all contributions remitted to the participating companies on behalf of the participants. Eligible employees make an irrevocable election to participate in the ORP rather than TRSL and purchase retirement and death benefits through contracts provided by designated companies. Benefits payable to participants are not the obligation of the state of Louisiana or TRSL. Such benefits and other rights of ORP are the liability and responsibility solely of the designated company or companies to whom contributions have been made. R.S. 11:927 sets the contribution requirements of ORP plan members and the employer. Employer ORP contributions to TRSL for fiscal year 2015 totaled $22,046, which represents pension expense for the College. Employee contributions totaled $6,326. The Active member and employer contribution rates were 8% and 5.2%, respectively, with an additional employer contribution of 22.7% made to the TRSL defined benefit plan described in note 6 above.


31

8. OTHER POSTEMPLOYMENT BENEFITS Plan Description. Employees of the College voluntarily participate in the state of Louisiana’s health insurance plan. The Office of Group Benefits (OGB) provides medical and life insurance benefits to eligible retirees and their beneficiaries. Participants are eligible for retiree benefits if they meet the retirement eligibility as defined in the applicable retirement system, and they must be covered by the active medical plan immediately before retirement. The postemployment benefits plan is a cost-sharing, multiple-employer defined benefit plan but is classified as an agent multiple-employer plan for financial reporting purposes since the plan is not administered as a formal trust. R.S. 42:801-883 provides the authority to establish and amend benefit provisions of the plan. OGB does not issue a publicly-available financial report. However, the entity is included in the Louisiana Comprehensive Annual Financial Report (CAFR). You may obtain a copy of the CAFR on the Office of Statewide Reporting and Accounting Policy’s website at www.doa.la.gov/osrap. Funding Policy. The plan is currently financed on a pay-as-you-go basis. The contribution requirements of plan members and the College are established and may be amended by R.S. 42:801-883. Employees do not contribute to their postemployment benefits cost until they become retirees and begin receiving those benefits. The retirees contribute to the cost of retiree healthcare based on a service schedule. Contribution amounts vary depending on what healthcare provider is selected from the plan and if the member has Medicare coverage. OGB offers several different plan options for both active and retired employees. Employer contributions are based on plan premiums and the employer contribution percentage. This percentage is based on the date of participation in an OGB plan (before or after January 1, 2002) and employee years of service at retirement. Employees who begin participation or rejoin the plan before January 1, 2002, pay approximately 25% of the cost of coverage. Employees who begin participation or rejoin on or after January 1, 2002, pay a percentage of premiums (active premium if over 20 years of service) based on the following schedule:

Employer Employee Contribution ContributionPercentage Percentage

Under 10 years 19% 81%10 - 14 years 38% 62%15 - 19 years 56% 44%20+ years 75% 25%

OGB Participation

In addition to healthcare benefits, retirees may elect to receive life insurance benefits. Basic and supplemental life insurance is available for the individual retiree and spouses of retirees, subject to maximum values. Employers pay approximately 50% of monthly premiums. Participating retirees paid $0.54 each month for each $1,000 of life insurance and $0.98 each month for each $1,000 of spouse life insurance. Life insurance amounts are reduced to 75% of the initial value at age 65 and to 50% of the original amount at age 70.


32

Annual Other Postemployment Benefit Cost and Liability. The College’s annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with GASB Statement 45, which was initially implemented for the year ended June 30, 2008. The ARC represents a level of funding that, if paid on an ongoing basis, would cover normal cost each year and amortize any unfunded actuarial accrued liabilities (UAAL) over a period of 30 years. A 30-year open amortization period has been used. The total ARC for fiscal year 2015 is $1,065,500. The following schedule presents the components of the College’s annual OPEB cost for fiscal year 2015, the amount actually contributed to the plan, and changes in the College’s net OPEB obligation to the OPEB plan:

ARC $1,065,500Interest on net OPEB obligation 259,900ARC adjustment (248,300)Annual OPEB cost 1,077,100Contributions made - current-year retiree premiums (714,500)Increase in net OPEB obligation 362,600Beginning net OPEB obligation at June 30, 2014 6,497,200Ending net OPEB obligation at June 30, 2015 $6,859,800

The College’s annual OPEB cost contributed to the plan using the pay-as-you-go method, and the net OPEB obligation for the fiscal year ended June 30, 2015, and the preceding two fiscal years were as follows:

Percentage of Annual

Fiscal Year Annual OPEB OPEB CostEnded Cost Contributed

June 30, 2013 $1,038,985 62% $6,210,000June 30, 2014 $1,030,927 72% $6,497,200June 30, 2015 $1,077,100 66% $6,859,800

Net OPEB Obligation

Funded Status and Funding Progress. During fiscal year 2015, neither the College nor the state of Louisiana made contributions to a postemployment benefits plan trust. A trust was established July 1, 2008, but was not funded, has no assets, and hence has a funded ratio of zero. Since the plan was not funded, the College’s entire actuarial accrued liability (AAL) of $17,038,100 was unfunded. The funded status of the plan, as determined by an actuary as of July 1, 2014, was as follows:


33

AAL $17,038,100Actuarial value of plan assets NONE UAAL $17,038,100

Funded ratio (actuarial value of plan assets/AAL) 0%Covered payroll $3,605,800UAAL as percentage of covered payroll 473%

Actuarial Methods and Assumptions. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan, and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as Required Supplementary Information following the Notes to the Financial Statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and the plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities consistent with the long-term perspective of the calculations. In the July 1, 2014, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.0% discount rate. The UAAL is amortized over the maximum acceptable period of 30 years on an open basis. It is calculated assuming a level percentage of projected payroll. Other critical assumptions used in the actuarial valuation are the health care cost trend rate and participation assumptions. The health care cost trend assumption is used to project the cost of health care to future years. The valuation uses a health care cost trend rate assumption of 8.0% (7.0% post Medicare) in the year July 1, 2014, to June 30, 2015, grading down by 0.5% each year until an ultimate health care cost trend rate of 4.5% is reached. The participation assumption is the assumed percentage of future retirees that participate and enroll in the health plan. The participation breakouts are provided in the following table:

ParticipationYears of Service Percentage

<10 57%10-14 72%15-19 82%20+ 100%


34

9. ACCOUNTS PAYABLE AND ACCRUALS The following is a summary of accounts payable and accruals at June 30, 2015:

Vendors $366,702Accrued salaries and benefits 396,077

Total $762,779

10. UNEARNED REVENUES The following is a summary of unearned revenues at June 30, 2015:

Prepaid tuition and fees $310,574

11. COMPENSATED ABSENCES At June 30, 2015, employees of the College have accumulated and vested annual, sick, and compensatory leave of $301,148; $220,521; and $222, respectively. These balances were computed in accordance with GASB Codification Section C60. The leave payable is recorded in the accompanying financial statements. 12. LONG-TERM LIABILITIES The following is a summary of long-term transactions of the College for the year ended June 30, 2015:

Restated Balance PortionBalance June 30, Due Within

June 30, 2014 Additions Reductions 2015 One Year

Net pension liability (note 6) $15,277,141 $1,560,299 ($3,410,396) $13,427,044Compensated absences payable (note 11) 544,153 328,695 (350,957) 521,891 $114,971OPEB payable (note 8) 6,497,200 1,077,087 (714,487) 6,859,800

Total $22,318,494 $2,966,081 ($4,475,840) $20,808,735 $114,971


35

13. RESTRICTED NET POSITION The College has the following restricted net position at June 30, 2015:

Nonexpendable: Phoebe Jackson Trust $289,136

Expendable: Student technology fee $349,670 Building use fee 56,454 Vehicle registration fee 60,189 Academic excellence fee 16,364 Endowment - Expendable 5,958 Operational fee 74 Student Government fee 81,403 Grants and contracts 1,072,404

Total $1,642,516

Of the total net position reported in the Statement of Net Position for the year ended June 30, 2015, $482,751 is restricted by enabling legislation (which also includes a legally-enforceable requirement that the resources be used only for the specific purposes stipulated in the legislation). 14. RESTATEMENT OF BEGINNING NET POSITION The beginning net position as reflected on Statement B has been restated to reflect the following adjustments:

Net position at June 30, 2014 ($3,297,903)

GASB Statement No. 68 - Pension Restatement (13,763,053)

Net Position at June 30, 2014, as restated ($17,060,956)

The restatements decreased the College’s beginning net position by $13,763,053. 15. CONTINGENT LIABILITIES AND RISK MANAGEMENT Losses arising from judgments, claims, and similar contingencies are paid through the state’s self-insurance fund operated by the Office of Risk Management (ORM), the agency responsible for the state’s risk management program, or by appropriation from the state’s General Fund. All other lawsuits are handled by either ORM or the Attorney General’s office.


36

Also, the amount of settlements paid in the last three years did not exceed insurance coverage. For the claims and litigations not being handled by ORM, the College pays for settlements out of available funds or can request supplemental appropriations from the state’s General Fund. 16. DEFERRED COMPENSATION PLAN Certain employees of the College participate in the Louisiana Public Employees Deferred Compensation Plan adopted under the provisions of the Internal Revenue Code Section 457. Complete disclosures relating to the plan are included in the separately-issued audit report for the Plan, available on the Louisiana Legislative Auditor’s website at www.lla.la.gov.

37

REQUIRED SUPPLEMENTARY INFORMATION

Schedule of the College’s Proportionate Share of the Net Pension Liability

Schedule 1 presents the College’s Net Pension Liability.

Schedule of the College’s Contributions

Schedule 2 presents the amount of contributions the College made to pension systems.

Schedule of Funding Progress for the Other Postemployment Benefits Plan

Schedule 3 presents certain specific data regarding the funding progress of the Other Postemployment Benefits Plan, including the unfunded actuarial accrued liability.

38


Schedules of Required Supplementary InformationFiscal Year Ended June 30, 2015

Schedule of the College's Proportionate Share Schedule 1 of the Net Pension Liability

College'sproportionate shareof the net pension Plan fiduciary

College's College's liability (asset) as a net positionproportion of proportionate share College's percentage of its as a percentage

Fiscal the net pension of the net pension covered-employee covered-employee of the total Year* liability (asset) liability (asset) payroll payroll pension liability

Louisiana State Employees' Retirement System

2015 0.03183% $1,990,179 $664,887 340% 65.0%

Teachers' Retirement System of Louisiana

2015 0.11189% $11,436,865 $4,972,485 236% 63.7%

*Amounts presented were determined as of the measurement date (previous fiscal year-end).

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

Schedule of the College's Contributions Schedule 2

(b)(a) Contributions Contributions

Statutorily- in relation to the (a-b) College's as a percentage ofFiscal Required statutorily- Contribution covered-employee covered-employeeYear* Contribution required contribution Deficiency (Excess) payroll payroll

Louisiana State Employees' Retirement System

2015 $203,595 $203,595 $516,702 39.4%

Teachers' Retirement System of Louisiana

2015 $1,289,025 $1,289,025 $4,991,999 25.8%

*Amounts presented were determined as of the end of the fiscal year.

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

Notes to Required Supplementary InformationChanges of Benefit Terms include:

A 1.5% COLA, effective July 1, 2014, provided by Act 102 of the 2014 Louisiana Regular Legislative Session, and, Improved benefits for certain members employed by the Office of Adult Probation and Parole within the Department of Public Safety and Corrections as established by Act 852 of 2014.

39

Schedule 3


Schedule of Funding Progress for the Other Postemployment Benefits PlanFiscal Year Ended June 30, 2015

ActuarialAccruedLiability UAAL as a

Actuarial (AAL) - Unfunded Percentage ofActuarial Value of Projected AAL Funded Covered CoveredValuation Assets Unit Cost (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) [(b-a)/c]

July 1, 2012 NONE $15,807,400 $15,807,400 0.0% $4,087,179 387%July 1, 2013 NONE $16,170,400 $16,170,400 0.0% $3,887,290 416%July 1, 2014 NONE $17,038,100 $17,038,100 0.0% $3,605,800 473%

OTHER REPORT REQUIRED BY GOVERNMENT AUDITING STANDARDS

Exhibit A The following pages contain a report on internal control over financial reporting and on compliance with laws and regulations, and other matters as required by Government Auditing Standards issued by the Comptroller General of the United States. This report is based solely on the audit of the financial statements and includes, where appropriate, any significant deficiencies and/or material weaknesses in internal control or compliance and other matters that would be material to the presented financial statements.

LOUISIANA LEGISLATIVE AUDITOR

DARYL G. PURPERA, CPA, CFE

1600 NORTH THIRD STREET • POST OFFICE BOX 94397 • BATON ROUGE, LOUISIANA 70804-9397

WWW.LLA.LA.GOV • PHONE: 225-339-3800 • FAX: 225-339-3870

June 30, 2016

Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements

Performed in Accordance with Government Auditing Standards

Independent Auditor’s Report

CENTRAL LOUISIANA TECHNICAL COMMUNITY COLLEGE LOUISIANA COMMUNITY AND TECHNICAL COLLEGE SYSTEM STATE OF LOUISIANA Alexandria, Louisiana We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the business-type activities of Central Louisiana Technical Community College (College), a college within the Louisiana Community and Technical College System (System), a component unit of the state of Louisiana, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements, and have issued our report thereon dated June 30, 2016. Our report was modified to include emphasis of matter paragraphs regarding actuarial assumptions and financial statement comparability. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the College’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control. Accordingly, we do not express an opinion on the effectiveness of the College’s internal control.

Central Louisiana Technical Community College Report on Internal Control

Exhibit A.2

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described below, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies below to be material weaknesses.

Inaccurate Annual Fiscal Report For the third consecutive year, the College failed to prepare an accurate Annual Fiscal Report (AFR), resulting in inaccurate financial information being submitted to the System and delaying the audit process for fiscal year 2015. In addition, management did not close its accounting periods timely and allowed the same person to enter and approve adjusting journal entries. Significant AFR errors, similar to those identified in the prior year, included an overstatement of net tuition and fees revenues and scholarship and fellowship expenses by approximately $2.4 million and a misclassification of unrestricted and restricted net position of $1.6 million. In addition, monthly fiscal periods were not closed for up to 10 months during the 2015 fiscal year although all periods, except for June 2015, were closed before the AFR was issued. Further, all year-end journal entries are entered and approved by the director of accounting, increasing the risk of fraud or errors although no fraud or additional errors were identified. As in the prior year, inaccurate financial information was provided by the director of accounting to the independent Certified Public Accountants who performed the AFR compilation. There was also a turnover in key accounting and administrative personnel responsible for reviewing the director of accounting’s work. Good internal controls should include closing accounting periods timely and a thorough review by a knowledgeable person of the financial information included in the AFR. Management should hold its accounting personnel accountable for providing inaccurate information to the System, provide additional accounting and Banner system training, and assign a knowledgeable person to review financial information before submitting the College’s AFR to the System. Management concurred with the finding and outlined a plan of corrective action (see Appendix A, pages 1-3).


Exhibit A.3

Inappropriate System Access For the second consecutive year, the College granted its staff inappropriate access to the Banner accounting system, increasing the risk of errors or fraud in a system that processed $14 million in revenues and expenses during fiscal year 2015. Specific examples of inappropriate access include the following:

One employee had the ability to execute the entire procurement process without subsequent approval by a supervisor.

Four employees had the ability to adjust students’ accounts without a business need.

Seven employees had the ability to create and edit the tuition and fee tables within the accounting system without a business need.

One employee had the ability to approve his own time sheet.

Although the examples above increase the risk of errors or fraud, no such errors or fraud were identified. Good internal control requires the College to restrict access to those functions necessary for its employees’ job duties and ensure that no employees have the ability to initiate, process, and approve the same transactions or make unauthorized changes to system data. Management has represented that the deficiencies resulted from continued turnover in key accounting and administrative personnel, as well as a lack of monitoring of system access. College management should establish policies to limit its employees’ access to only what is required for their job duties. In addition, management should further restrict or closely monitor any access that allows an employee to initiate, process, and approve the same transactions, or otherwise change system data. Management concurred in part with the finding and outlined a plan of corrective action (see Appendix A, pages 4-5). Additional Comments: Although management did not concur that one employee had access to approve his own time sheet, we noted six instances where this employee approved his own time sheet. Inadequate Cash Controls The College did not have adequate controls over cash during fiscal year 2015, thereby increasing the risk of errors or fraud. The following control deficiencies were noted:

The College did not perform timely reconciliations of its operating bank account for up to 12 months, primarily because electronic fund transfers (EFT) totaling $5 million were not properly posted to the general ledger during fiscal year 2015.


Exhibit A.4

The director of accounting prepared federal bank account reconciliations and requested federal funds electronically transferred to the federal bank account without an independent review or approval. The review and approval function was previously handled by the chief financial officer, who resigned during fiscal year 2015.

The College did not require restrictive endorsements on all checks received at its Ferriday campus prior to the campus sending the checks to the main campus for deposit. This occurred because no employee was assigned the responsibility of endorsing checks received at the Ferriday campus.

Although the deficiencies above increase the risk of errors or fraud, no such errors or fraud were identified. Good internal controls require timely bank reconciliations, independent review and approval of bank reconciliations and fund transfers, and restrictive endorsements of checks upon receipt. College management should address these issues by consulting with the System regarding best practices for posting EFTs in the College’s general ledger; assigning the newly-hired vice president of finance and administration to review and approve bank reconciliations and fund transfers; and requiring restrictive endorsements on all checks received by the College’s campuses. Management concurred with the finding and outlined a plan of corrective action (see Appendix A, pages 6-8).

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies below to be significant deficiencies.

Student Receivables Not Collected The College allowed students to attend classes while owing outstanding balances and did not timely bill for dual enrollment students, thereby increasing the risk that delinquent accounts will become uncollectible and weakening the College’s funding of ongoing operations.

305 students with outstanding account balances from previous semesters were allowed to enroll in subsequent classes in violation of System policy. These students owed $552,017 to the College at June 30, 2015.

The policy requires a registration hold be placed on accounts with an outstanding balance after the last scheduled payment date of any semester; however, College employees did not check students’ accounts for outstanding balances prior to registering them for the next semester.

Dual enrollment fees for 658 students were not billed timely to local school boards for up to 11 months after the fiscal year 2015 semesters


Exhibit A.5

began. Local school boards owed $127,452 to the College at June 30, 2015.

Good internal control requires the College to prepare and mail dual enrollment invoices to school boards at least monthly. College employees did prepare the invoices timely but failed to mail them after preparation. College management should properly monitor its employees to ensure that they are complying with existing policies and procedures over receivable collections and aggressively pursue outstanding receivables. Management concurred with the finding and outlined a plan of corrective action (see Appendix A, pages 9-10).

Improper Expenditure of Grant Funds

The College improperly spent $329,874 in state capital outlay grant funds. The award letter for the Workforce and Innovation for a Stronger Economy grant, which was received from the System, stated that the capital outlay funds were to be used for the acquisition of equipment and property. Instead, the College spent the available cash to cover its payroll when the College experienced a cash shortfall in May 2015. Not only did the College fail to comply with grant requirements, it also has not reimbursed the funds or purchased the equipment and property for which the funds were intended.

The College should consult with the System regarding its legal options relating to the grant funds and should better monitor its cash flow to prevent instances of noncompliance. Management concurred with the finding and outlined a plan of corrective action (see Appendix A, pages 11-12).

Compliance and Other Matters As part of obtaining reasonable assurance about whether the College’s financial statements are free from 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 audit, and accordingly, we do not express such an opinion. As described previously, the results of our tests disclosed noncompliance relating to improper expenditure of grant funds that is required to be reported under Government Auditing Standards. Central Louisiana Technical Community College’s Responses to Findings The College’s responses to the findings identified in this report are attached in Appendix A. The College’s responses were not subjected to the auditing procedures applied in the audit of the financial statements, and, accordingly, we express no opinion on them.


Exhibit A.6

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

Respectfully submitted, Daryl G. Purpera, CPA, CFE Legislative Auditor

PGH:BAC:BDC:EFS:aa CLTCC 2015

APPENDIX A

Management’s Corrective Action Plans and Responses to the

Findings and Recommendations

A. 1

TECHNICAL COMMUNITY

Ms. Bynog will reconcile bank statements by the 25th of each month as reviewed by Ms. Moore. Monthly, as the bank statements are reconciled and respective

adjusting entries have been posted, the accounting period will be closed by the last day of the following month. To reduce fraud risk or errors as it relates to fiscal reporting, entries posted by accounting personnel will be reviewed and

approved by Ms. Moore.

• As identified by the Louisiana Legislative Auditors, the college was misclassifying unrestricted and restricted funds. Understanding that the LLAs did not have access to the detail, and had already proposed $821k in audit adjustments, Ms. Moore worked with the accounting personnel to review coding and classification. In this detail review, Ms. Moore identified an additional $821k in restricted

monies that needed to be reclassified out unrestricted. This entry was provided to the LLAs, resulting in a total $1.6M audit adjustment. The financials are reviewed monthly by Ms. Moore for coding and classification to reduce material future audit adjustments as applicable.

• Ms. Moore has prior experience of preparing a CAFR for another school system and will be the preparer of the AFR for CLTCC. In February 2016, Ms. Moore will prepare a preliminary AFR and meet with Ms. Shannon Sedberry, Director of Fiscal Affairs - LCTCS, in order to confirm accuracy in reporting to prevent the repeat of misclassification and overstatement errors reported by the LLA.

• Ms. Moore is working with the accounting personnel in the development of balance sheet reconciliations. Of immediate and specific focus are the maintenance of cash reconciliations, accuracy of grant reporting and compliance, reconciliation of aged student and contract receivables for billing and collection,

fund accounting and reporting, and asset management. All of which, are integral to a fairly and accurately stated AFR.

• Ms. Moore conducts weekly department meetings and has used this forum to discuss current audit findings, prior period audit findings, and shares her knowledge of internal control processes to coach, educate, and train accounting personnel. The system office provides extensive online Banner training and support for various modules via LOLA. Ms. Moore will review modules as it

A. 2

TECHNICAL COMMUNITY

LLE E applies to accounting personnel and incorporate in weekly department meetings

for the establishment of best practices.

In recognition that the implementation of this corrective action plan means a change in CLTCC's current entrenched processes, Management understands that the development

of accounting personnel will take time through consistent communication and training. Management also seeks to cultivate a working, yet arm's length, relationship with the

LLAs, to reaffirm compliance and minimize internal control deficiencies.

Regards,

jOPI-~ Jimmy Sawtelle, Chancellor

C: Dr. Monty Sullivan, LCTCS President

Michael Redmond, LCTCS Internal Auditor Lee C Moore CPA, Vice Chancellor of Finance and Administration

Main Campus

5%0 f fw). 167 "loct.h 521 East Bradford ~t. 15014 L:1kc ChJrlcs J lwy. 4111 ~- ~luc\rthur Dr. ll7 J Iwy. 1152 2100 E. I':. Wtllace Bh-d. 508 Chnt1p1qu~ St.

\v'innt1dd. f .. \ 7l+R"I Jen<t,l. \71342 l.etsYillc, L\ 71446 .\kxandria, L\ 71302 Oakd,I!e, 1.\ 71-16'\ Fcrride~j, f..\ 7LH4 Cottonport, L.\ 71.>~7

www.cltcc.edu A Louisiana Conununiry & Technical College System member institution govemcd by the Louisiana Board of Regents Established 1938

A. 3

TECHNICAL COMMUNITY

February 1, 2016

Mr. Daryl G. Purpera, CPA, CFE Legislative Auditor 1600 North Third Street Baton Rouge, LA 70804-9397

Re: CLTCC Audit Findings Management Response FYE 06/30/15

Dear Mr. Purpera:

Management of Central Louisiana Technical Community College concurs in part to the finding related to Inappropriate System Access. The following is Management's "corrective action plan including the status of action taken or action planned to correct the internal control weakness and/or noncompliance".

Audit Finding: Inappropriate System Access

Corrective Action Plan: • In response to the LLA finding on inappropriate system access, Ms. Moore

emailed Ms. Vonita Norman, IT Security Administrator- LCTCS on January 27th, 2016, requesting an exception report showing conflicting system access as it relates to job duties and internal controls. In response, Ms. Norman stated that she is currently "in the process of doing user audits for all colleges with all the modules". She further stated that she would send Ms. Moore the audit for Finance and suggest that Ms. Moore work with Ms. Sedberry to confirm user appropriate access. This report has been provided, and Ms. Moore is scheduled to review with Ms. Sedberry in February 2016. As an additional note, current accounting personnel stated that their user access was amended prior to January 2016 but post FYE 06/30/2015 audit period.

Wlnnfi ·ld, I .. A 7148.1 J~n~.l.i\ 71.'14::! I:A.X-:<Ville, 1.:\ 7\4415

Main <\:amp

.t31l S. ~lltcArthurDr 11i Hwy.1152 ,\l~~andttt, L:\ 713112 OJ.~wk:, 1 ..c\ 714(i3

2HKHl!E W<lllnc~ Blnl. f1cm(hy, I .. A 71'\14

www.cltc:c.cdu A Louisi:ana·Community & Tcchnic..':ll CoUcge System mc:mbcr.inslltu tion governed by the Ltluisi:ma Bcmrd of Rc:gmlll

5M <:muuri<ju.: t't. Cottonport. l...r\ 7,1'327

Established 1938

A. 4

• According to the LlA finding, "one employee had the ability to approve his own time sheet". On January 28th, 2016, in speaking to Mr. Willis, Human Resources Director, concerning this finding, he stated that the Human Resource team "communicated with Ms. Sharon Dunham, Payroll Manager - LCTCS, to request her assistance in investigating this matter". Accordingly, Ms. Dunham reviewed CLTCC's Error Message Approved Time Sheet Report and did not identify any employees with the capability to approve his own time sheet. The result of this investigation was said to be discussed with the LLAs.

Regards,

James R. Sawtelle III Chancellor

C: Dr. Monty Sullivan, LCTCS President Mr. Joseph Marin, Senior Vice President for Finance and Administration Mr. Michael Redmond, LCTCS Internal Auditor Ms. Lee C Moore CPA, Vice Chancellor of Finance and Administration

A. 5

TECHNICAL COMMUNITY

LLEGE

March 3rd, 2016

Mr. Daryl G. Purpera, CPA, CFE Legislative Auditor 1600 North Third Street Baton Rouge, LA 70804-9397


Dear Mr. Purpera:

Management of Central Louisiana Technical Community College concurs with the finding related to Inadequate Cash Controls. The following is Management's "corrective

action plan including the status of action taken or action planned to correct the internal

control weakness and/or noncompliance".

Audit Finding: Inadequate Cash Controls

Corrective Action Plan: • In January 2016, Lee C Moore CPA joined CLTCC as Vice Chancellor of Finance

and Administration. In meeting with the accounting personnel, Ms. Moore reviewed current processes and reporting. In this review, it was identified that cash had not been reconciled through December 2015 as reported by the LLA for

the FYE 06/30/15 audit period.

Main Campus

'1960 fTwy. 1117 North 521 EastHradiordSt. 15014I.akc Charles f lwy. 4'\11 S. MacArthur Dr. 117 Hwy. 1152 2100E.E. \Vallacc Blvd. 508 Choupique Sr.

Winnfidd, L:\ 71483 Jenn, L,\ 71342 L<:csviJJe. L\ 71446 ,\lcxandria. L:\ 71302 Oakda:lc, LA 71463 Ferriday, LA '71334 Cort<mporr, LA 71327

w<vw.cltcc.edu A Lou.isiana Community & Teclmical College System member institution governed by the Louisiana Board of Regents Established 1938

A. 6

o As of January 29th, 2016, Ms. Bynog, Director of Accounting, brought

bank reconciliations current through December 31, 2015. o Ms. Bynog will reconcile bank statements by the 25th of each month as

reviewed by Ms. Moore.

o As of the date of this letter, bank reconciliations are current.

• In January 2016, during the weekly department meeting held by Ms. Moore to

discuss, in this case, internal control processes for grant management, it was identified that Ms. Bynog, who reconciles the bank statements, was also drawing

down grant funds and making cash transfers. In response, Ms. Moore acquired bank access on January 29th, 2016, in order to draw down grant funds and/or

make transfers based on supporting documentation provided by the grant accountant for segregation of duties in compliance with adequate cash controls.

• In reviewing current processes with the accounting personnel in January 2016, Ms. Moore identified that the Bursar was receiving and posting payments to student accounts for all campuses. The two immediate concerns were (a) timely posting of student payments and (b) timely deposits. In response, on February 17th, 2016, Ms. Moore sent an email to Campus Deans requesting a designee per

campus as the payment poster. The Campus Deans responded with the designated payment poster per campus and it was confirmed that each campus had a deposit only stamp. On February 25th, 2016, Ms. Moore sent

communication to the Campus Deans and the designated payment posters identifying the following steps for adequate cash controls, with an effective

implementation date of March 1, 2016:

o Designated payment posters will post payments to student accounts per campus

o Designated payment posters will endorse the back of the students' payment for deposit only

o Designated payment posters will close cashiering session, place the session number on the cashiering report, and email this report to the attention of the Bursar at the main campus

o The Bursar will audit a sample of the mailed in payments using the cashiering report provided by the designated payment posters from the satellite campuses.

A. 7

Regards,

James R. Sawtelle III Chancellor


A. 8

TECHNICAL COMMUNITY

LLEGE

March 3rd, 2016

Mr. Daryl G. Purpera, CPA, CFE

Legislative Auditor 1600 North Third Street Baton Rouge, LA 70804-9397


Dear Mr. Purpera:

Management of Central Louisiana Technical Community College concurs with the finding related to Student Receivables Not Collected. The following is Management's

"corrective action plan including the status of action taken or action planned to correct

the internal control weakness and/or noncompliance".

Audit Finding: Student Receivables Not Collected

Corrective Action Plan: • In January 2016, Lee C Moore CPA joined CLTCC as Vice Chancellor of Finance

and Administration. In meeting with the accounting personnel, Ms. Moore reviewed current processes and reporting. In this review, it was identified that the receivable balance was $3M and while there had been no process established for active collection, CL TCC had recently contracted with the

Main Campus 5960 Hwy. 167 Nortl1 521 East Bradford St. 15014 LaJ;:, Charles Hwy. 4'111 S. MacJ\rrhur Dr. 117 Hwy. 1152 2100E.E. Wallace Bh·d. 508 Choupique St.

Winntidd, L\ 7 J 483 jt.>JL't, LA 71342 L~c,l'ille, LA 71 +16 ,\Jcxandria. L •\ 71302 Oakdale, L\ 71463 Ftrriday. L\ 71334 Cottonport, L \ 71327

www:cltcc.edu A Louisiana Community & Technical College System member institution governed by the Louisiana Board of Regents Established 1938

A. 9

Louisiana Office of Debt Recovery to assist in the collection of delinquent

accounts. In response, Ms. Moore met with Student Services to discuss the

process for purges and registration holds to prevent students from further registering with an outstanding balance. As a result, for the spring term, CLTCC

did purge and place holds on student accounts for non pay and/or delinquency.

• Ms. Moore is currently working with the Bursar to identify the delinquent account

holders and are in the process of preparing sixty-day demand letters to demonstrate collection efforts prior to turning over the accounts to the Louisiana

Office of Debt Recovery for further collection efforts.

• On February lSth, 2016, Ms. Moore set up a second meeting with Student Services, Registration, and AR Billing to build an academic calendar that listed purge for non-payment and incomplete payment plan dates, internal due dates

that Student Services is to provide needed data to bill for dual enrollment and prisons, and internal due dates that AR is to mail and/or electronically submit invoices for payment based on the data Student Services provides. This process is monitored in the weekly department meetings held by Ms. Moore, in confirmation of process compliance.

Regards,

James R. Sawtelle III

Chancellor


A. 10

May 24th, 2016

Mr. Darryl G. Purpera, CPA, CFE

Legislative Auditor

1600 North Third Street Baton Rouge, LA 70804-9397

TECHNICAL COMMUNITY


Dear Mr. Purpera:

Management of Central Louisiana Technical Community College concurs with the finding related to Improper Expenditure of Grant Funds. The following is Management's "corrective action plan including the status of action taken or action planned to correct the internal control weakness and/or noncompliance".

Audit Finding: Improper Expenditure of Grant Funds

Corrective Action Plan:

In January 2016, Lee C Moore CPA joined CLTCC as Vice Chancellor of Finance and Administration. In meeting with the accounting personnel, Ms. Moore reviewed current

processes and reporting. In this review, it was identified that cash had not been reconciled through December 2015 contributing to the non management of cash flows that resulted in the misuse of BOR WISE grant funds to cover operating payroll in May 2015. Ms. Moore worked with the finance team to reinstate the $329,874 in BOR WISE funds and segregated these monies from operating funds for specific use in compliance with the award letter from the Workforce and Innovation for a Stronger Economy

(WISE) grantor. As of the date of management's response, the $329,874 in BOR WISE funds has been encumbered for equipment purchase. In addition, cash reconciliations are current through the date of management's response, as an additional control for monitoring cash flows to prevent future instances of misuse as they relate to all funds, in particular, grant funds.

Main Campus

5960 ffw}. 167 North 511 East Bradford St. 15014 Lake Charb Hwy. 4.311 S. "l\L.C'\rrhur Dr. 117 Hwy. 1152 2[(~1 E. E. Wallace BlvJ. 508 Choupique St. \';,'inn field, L. \ 714fl1 Jt:na, L.\ 71342 Lecsyi]lc, L\ 71446 \lexondru, L.\ 71302 Oakdale,].\ 7H63 l'w·iJ,,~·, L \ 71.1.14 C<>lt<>nport, L.\ 71527

www.cltcc.edu A Louisiana Community & Technical College System member institution governed by the Louisiana Board of Regents Established 1938

A. 11

TECHNICAL COMMUNITY

Regards,

Jimmy Sawtelle, Chancellor

C: Dr. Monty Sullivan, LCTCS President

Michael Redmond, LCTCS Internal Auditor

Lee C Moore CPA, Vice Chancellor of Finance and Administration

A. 12

Documents

Central Louisiana Technical College...central louisiana technical . community college. louisiana community and. technical college system. financial statement audit . for the year ended