Recommendation 8 (Financial Integrity)

The College developed and refined several processes in order to address the different parts of this recommendation. Firstly, the College decided it was prudent to review all personnel-related matters that have fiscal impacts at the president’s cabinet. To that end, the “Position Inventory” is updated monthly with relevant position changes, resignations, retirements, and reorganizations. The College Cabinet, Human Resources (HR), and department leads routinely review the position inventory for accuracy, either during meetings or through email correspondence.   (R.8.1, R.8.2, R.8.3, R.8.4, R.8.5, R.8.6, R.8.7, R.8.8, R.8.9, R.8.10).

The College also determined that it needed to establish more consistency in its Business Office procedures. To accomplish this, standard operating procedure manuals are being produced for each role in the Business Office in order to ensure that there is a reasonable degree of consistency in all of its operations (R.8.11, R.8.12).

Business Office trainings are held in conjunction with HR’s professional staff development program for staff across the District, in order to ensure that financial data is reliable and provided in a timely manner.  At a minimum, these trainings are done bi-annually, with one training scheduled in the fall and another in the spring. The trainings cover budget reports, purchasing and travel procedures, use of Cal Cards, as well as the fiscal year transition, including deadlines.  The most recent training was held in spring 2021 and will occur every semester, at a minimum (R.8.13, R.8.14).

The College also determined that it was prudent to establish a budget timeline that is clear and consistently applied from year to year. The preliminary budget is typically developed and presented to the Board of Trustees for discussion by May of each year, the tentative budget by June, and the final budget by September.  Due to COVID-19, the 2020-21 tentative budget was presented to the Board on July 7, 2020 (R.8.15, R.8.16, R.8.17, R.8.18, R.8.19, R.8.20). The 2019-2020 preliminary budget and multi-year forecast were presented in a series of open forums across the district on May 16, May 17, and May 22, 2019. Final budget and multi-year forecast open forums were held on September 12, September 24, and September 26, 2019 (R.8.21). To ensure widespread district coverage, the meetings were held across the district, on the College’s Crescent City and Klamath Trinity sites, as well as on the main campus site in Eureka. The same process occured via Zoom for the 2021-22 final budget and multi-year forecast (R.8.39).

The Director of Administrative Services and the Principal Accountant work closely with the Business Office staff to prepare, distribute, and enforce a fiscal year transition plan that details important dates that need to be adhered to in order for a timely closing of the books and audit to occur. To facilitate this, the Business Office is continuing its policy of freezing Cal Card use during the designated blackout period. Thus far, this practice has had a positive impact in the timely closing of the books. In February 2019 a fiscal year transition plan was sent to the entire district by the Director of Administrative Services. As the dates indicated in the plan neared, follow-up information was distributed so that staff, faculty, and administrators were continually apprised of pending deadlines and the importance of meeting those deadlines to ensure that the College can close its books and submit audit reports in a timely manner.  This practice continues and is initiated in late February or early March of each year. (R.8.22, R.8.23, R.8.24, R.8.25, R.8.26, R.8.27). In addition to these communications, fiscal year transition meetings are held with personnel who oversee grants and categorical programs (R.8.28).

Once the auditors post their requests for the interim and final audit engagements, timely assignments are made and clear communication is disseminated to the assignees to ensure they are aware of the assignments, the internal deadline to provide the requested items, and to answer any questions they may have about the requests.  In addition to emails coming from District staff, the online portal that is used by the auditors also sends out notifications to assignees (R.8.29, R.8.30, R.8.31).

As a result of these efforts, the 2017-18 audit was completed by December 31, 2018 and submitted to the Chancellor’s Office (CO) after Audit and Finance Committee approval at the January 8, 2019 meeting. The 2018-2019 books were closed in the College’s Datatel system in mid-January 2020, all audit requests were provided by the deadlines, the audit report was approved by the Audit and Finance Committee at the December 10, 2020 meeting, and the audit was submitted to the CO on December 30, 2019.  The 2019-20 audit was approved by the Audit and Finance Committee at the February 2, 2021 meeting and submitted to the CO by February 28, 2021, which was the extended deadline due to COVID-19.  All three audits had no findings.  (R.8.32, R.8.33, R.8.34, R.8.35, R.8.36).

The College has also developed a plan to address short-term cash flow needs. An analysis of cash flow is conducted on a regular basis to determine the College’s cash flow needs. The Board of Trustees annually authorizes the district to engage in inter-fund borrowing from the Humboldt County Treasurer throughout the year to meet cash flow needs, if necessary to do so. The Board of Trustees can also authorize the participation in the Tax and Revenue Anticipation Note program which, if necessary, would be authorized in May for the following fiscal year (R.8.37).

Analysis and Evaluation:

This recommendation has prompted the College to establish policies, procedures, and timelines inside the Business Office as well as throughout the district to ensure that financial information and reporting is not only accurate but also timely. It has also systematized its reporting timelines for the different budgets and has worked to communicate significant fiscal deadlines on a regular basis throughout the College. Coupled with the work of the Budget Advisory Committee, which is covered in the first section of this Midterm Report, the College has satisfied the different aspects of this recommendation.

Evidence Sources Below