ALAMO COMMUNITY COLLEGE DISTRICT San Antonio, Texas San Antonio College Northwest Vista College St.Philip’s College St.Philip’s College Northeast Lakeview College Comprehensive Annual Financial Report For the Years Ended August 31, 2011 and 2010 Palo Alto College ALAMO COMMUNITY COLLEGE DISTRICT San Antonio, Texas Comprehensive Annual Financial Report For the Years Ended August 31, 2011 and 2010 Prepared by: Finance and Fiscal Services Department ALAMO COMMUNITY COLLEGE DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS INTRODUCTORY SECTION Transmittal Letter ........................................................................................................................................................... 1 Organizational Data ..................................................................................................................................................... 6 Vision, Mission Statement, and Statement of Values .............................................................................................. 8 Certificate of Achievement for Excellence in Financial Reporting-August 31, 2010 ....................................... 9 FINANCIAL SECTION Report of Independent Auditors ................................................................................................................................ 12 Management’s Discussion and Analysis (Unaudited) ............................................................................................. 13 Exhibit 1—Statements of Net Assets ........................................................................................................................ 24 Exhibit 2—Statements of Revenues, Expenses, and Changes in Net Assets .................................................... 25 Exhibit 3—Statements of Cash Flows ....................................................................................................................... 26 Notes to Financial Statements .................................................................................................................................... 28 SUPPLEMENTARY INFORMATION Schedule A—Schedule of Operating Revenues .................................................................................................... 49 Schedule B—Schedule of Operating Expenses by Object ................................................................................. 50 Schedule C—Schedule of Non-Operating Revenues and Expenses ................................................................. 51 Schedule D—Schedule of Net Assets by Source and Availability..................................................................... 52 Schedule E—Schedule of Expenditures of Federal Awards ............................................................................... 53 Notes to Schedule of Expenditures of Federal Awards ....................................................................................... 56 Schedule F—Schedule of Expenditures of State Awards .................................................................................... 57 Notes to Schedule of Expenditures of State Awards............................................................................................ 59 SUPPLEMENTARY INFORMATION—BY LOCATION (Unaudited) Schedule of Operating Revenues by Location ....................................................................................................... 62 Schedule of Operating Expenses by Location ....................................................................................................... 63 Schedule of Non-operating Revenues and Expenses by Location ..................................................................... 64 Schedule of Fixed Assets by Asset Types ................................................................................................................ 65 Schedule of Fixed Asset by Location ........................................................................................................................ 66 ALAMO COMMUNITY COLLEGE DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS STATISTICAL SUPPLEMENT—(Unaudited) Statistical Section Introduction ................................................................................................................................... 70 Statistical Supplement 1—Net Assets by Component ....................................................................................... 72 Statistical Supplement 2—Revenues by Source .................................................................................................. 73 Statistical Supplement 3—Program Expenses by Function .............................................................................. 74 Statistical Supplement 4—Tuition and Fees ......................................................................................................... 75 Statistical Supplement 5—Assessed Value and Taxable Assessed Value of Property ............................. 76 Statistical Supplement 6—State Appropriations per FTSE and Contact Hours ........................................... 77 Statistical Supplement 7—Principal Taxpayers ................................................................................................. 78 Statistical Supplement 8—Property Tax Levies and Collections..................................................................... 79 Statistical Supplement 9—Ratios of Outstanding Debt .................................................................................... 80 Statistical Supplement 10—Legal Debt Margin Information ............................................................................. 81 Statistical Supplement 11—Pledged Revenue Coverage .................................................................................. 82 Statistical Supplement 12—Demographic and Economic Statistics—Taxing District .................................... 83 Statistical Supplement 13—Principal Employers .................................................................................................. 84 Statistical Supplement 14—Faculty, Staff and Administrators Statistics ......................................................... 85 Statistical Supplement 15—Enrollment Details ...................................................................................................... 86 Statistical Supplement 16—Student Profile ........................................................................................................... 87 Statistical Supplement 17—Transfer Students to Senior Institutions ................................................................. 88 Statistical Supplement 18—Capital Asset Information ........................................................................................ 89 SINGLE AUDIT SECTION 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 ....................................................... 92 Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 Independent Auditor’s Report ............................................ 94 Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with Texas Single Audit Circular Independent Auditor’s Report.............................. 96 ALAMO COMMUNITY COLLEGE DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Schedule of Findings and Questioned Costs ........................................................................................................... 98 Summary Schedule of Prior Audit Findings .......................................................................................................... 108 Introductory Section December 6, 2011 To the Board of Trustees, the Residents of Bexar County and the Alamo Community College District Service Area of Atascosa, Bandera, Comal, Guadalupe, Kendall, Kerr and Wilson counties: We are proud to submit the following comprehensive annual financial report (CAFR) for the Alamo Community College District (Alamo Colleges, District) for the fiscal year ended August 31, 2011. The CAFR has been prepared in conformance with the financial reporting standards applicable to governmental entities set forth by the Governmental Accounting Standards Board (GASB) in its authoritative pronouncements, as well as the financial reporting requirements of the Government Finance Officers Association (GFOA). The report complies with the requirements of Annual Financial Reporting Requirements for Texas Public Community and Junior Colleges as set forth by the Texas Higher Education Coordinating Board (THECB). State statute requires an annual audit by independent certified public accountants. The purpose of an independent audit is to provide assurance, based on independent review and testing, that the basic financial statements and accompanying notes are fairly stated in all material respects. In 2011, the District’s Board of Trustees affirmed the selection of the accounting firm of Ernst & Young LLP to perform the annual audit for the District. In addition to meeting the requirements set forth in state statutes, their audit also was designed to meet the requirements of the Federal Single Audit Act Amendments of 1996 and related OMB Circular A-133 and the State Single Audit related to the Uniform Grant Management Standards Single Audit Circular. The auditor’s report related specifically to the single audit is included in the Single Audit Section. Management assumes full responsibility for the completeness and reliability of the information contained in this report based upon a comprehensive framework of internal control. The objective of internal control is to provide reasonable, rather than absolute, assurance that the financial statements are free of material misstatements. The concept of reasonable assurance ensures that the costs do not exceed the benefits derived. The independent auditors’ report is located at the front of the financial section of this report. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditors’ report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Profile The Alamo Community College District was established as a public community college through a public election in 1945. The District operates as a political subdivision under the laws of the State of Texas. A nine-member Board of Trustees is the governing body of the District. The Trustees are elected locally to six-year terms by Bexar County voters. The Chancellor, the District's chief executive officer, guides and implements the programs and policies of the Alamo Colleges. 1