Judgment of Compliance: The College certifies COMPLIANCE.

Narrative:

Wayne Community College defines having a sound financial base, demonstrated financial stability, and adequate physical resources to support the mission of the institution and the scope of its programs and services as the ability to offer quality educational experiences and to maintain all facilities and grounds. Wayne Community College prioritizes needs and adequately appropriates resources to meet these needs. The college is dedicated to providing adequate physical resources to enhance the learning environment of its students.

Wayne Community College, one of fifty-eight community colleges in the North Carolina Community College system, is audited annually by the Office of the State Auditor. Although there is an annual system-wide financial statement, each college, including WCC, is also audited individually and receives an individual financial statement. The Office of the State Auditor is authorized to audit all accounts and other financial records of the college 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. An institutional audit was performed for the fiscal year ending June 30, 2004, under authority of Article 5A of Chapter 147 of the North Carolina General Statutes. The state auditors cited no exceptions or noncompliance issues. For the four-year period, beginning with the audit of June 30, 2001, through the audit of June 30, 2004, the state auditors did not report any audit findings.

Wayne Community College has maintained financial accountability by operating within annual budgets. Programs and services continue to grow and develop to meet the changing needs in the curriculum and continuing education areas. The college has demonstrated financial integrity and stability by operating under accounting standards, policy restrictions, and budget procedures approved by the State Board of Community Colleges. Currently, the main campus has nine buildings valued at over $27,000,000 with a total square footage of 348,756. The college has just completed a state-of-the-art childcare center. At the beginning of the fall term 2003, an addition to the dental clinic was completed, allowing the dental program to accommodate six additional students. The college also has a leased facility at the local municipal airport for the aviation maintenance technology programs. Construction is currently underway on a "green building." This energy efficient building will be used to expand the college's non-curriculum instructional programs.

The college is funded largely by state funds as provided for by the North Carolina General Assembly and distributed by the North Carolina Community College System. In addition, state law mandates that counties provide their local community college with funding for maintenance of facilities and related expenses. (115D-32. Community College Laws of North Carolina). Other sources of revenue are gifts, endowments, investments and proprietary funds such as food services and bookstore operations.

The college develops its annual budget as a part of the institution-wide planning process. Once the budget has been approved at all levels of the college, the Board of Trustees adopts a Budget Resolution appropriating state current funds, county current funds, plant funds, and institutional funds for the operation of the college.

The development of the annual budget begins with each department of the college. The departments write planning objectives that identify what they want to accomplish in the coming year and what resources are necessary to accomplish those objectives. Each department has a base budget to which funds necessary for planning objectives are added. The budgeting process, therefore, is integrated into the planning process. Annual planning objectives are prioritized by the Planning Council. The Administrative Council reviews the prioritized planning objectives and makes recommendations to the President, who reserves the right to make changes in funding in the best interests of the college. Procedures for the budget planning process are reviewed annually.

State Funds. State current formula appropriations are based on full time equivalent (FTE) enrollment. The current year's budget is based on the previous year's FTE or the previous three-year "rolling average" of FTE enrollment whichever is greater.

Table 1 State Current Appropriations, 2000-2005

State plant appropriations (equipment funding and book funding) have varied from one year to another, but the needs of the college have been met because of the ability to transfer funds into this area from other areas of the budget. In addition to the budgeted state appropriations funds in 2000, the college also received $978,000 in non recurring equipment appropriations for the two-year period beginning July 2000.

Table 2 State Plant Appropriations, 2000-2005

County Funds. County appropriations are provided to the college primarily to fund plant operations and maintenance (current expense) and to fund construction projects, motor vehicles, and maintenance equipment (plant funds). Unexpended county current funds do not revert at the end of the fiscal year. Unexpended plant funds do revert unless the funds have been obligated.

The county appropriation for Wayne Community College has generally increased each year in order to support increased enrollment and expansion of physical facilities.

Table 3 County Appropriations, 2000-2005

Fiscal Year	Current Appropriation	Per FTE	Square Feet	Funding per sq ft.
1999-2000	$1,682,699	$556.44	336,428	$5.00
2000-2001	$1,862,333	$604.84	336,428	$5.53
2001-2002	$1,840,475	$601.85	336,428	$5.47
2002-2003	$1,840,475	$565.95	336,428	$5.47
2003-2004	$1,967,092	$573.66	348,756	$5.64
2004-2005	$2,023,114	$588.46	348,756	$5.80

Wayne Community College's financial resources are sufficient to support the mission of the institution and the scope of its programs and services.

An examination of changes in unrestricted net assets, excluding plant and plant related-debt (short and long-term debt attached to physical assets) reveals a negative balance in the fiscal year ending June 30, 2004. This change in current unrestricted funds in the amount of ($365,722.82) was due in part from the increase in accrued salaries, accrued vacation, and bonus leave. This liability amounted to $215,414. As a state supported institution, the college is required to report the liability even though funding by the state is based on actual expenditures for the year. Bookstore funds reported a decrease in fund balance also. The college elected to lease bookstore operations beginning in October 2003. With this agreement, the college absorbed losses related to the sale of the inventory and obsolete items. Other decreases include the Student Activity fund. The college remodeled the SGA area, and the students elected to use a portion of their fund balance to purchase new furniture and games for the area.

	Fiscal Year Ended		Fiscal Year Ended	Net
Net Assets	June 30, 2003		June 30, 2004	Change
Invested in Capital Assets, Net of Related Debt	$ 23,628,316.25		$ 23,525,375.62	$ (102,940.63)
Restricted for:
Nonexpendable:
Scholarships and Fellowships	72,031.00		74,196.00	2,165.00
Other	16,000.00		16,000.00
Expendable:	-
Scholarships and Fellowships	12,085.61		11,193.54	(892.07)
Loans	(5,090.27)		4,897.67	9,987.94
Capital Projects	216,253.33		3,188,940.79	2,972,687.46
Other	25,564.39		44,463.23	18,898.84
Unrestricted	483,084.14		117,361.32	(365,722.82)
Total Net Assets	$ 24,448,244.45		$ 26,982,428.17	$2,534,183.72
Revenues:
Net Student Tuition and Fees	2,997,702.54		3,355,786.37
Federal Grants and Contracts	4,317,253.82		4,120,139.77
State and Local Grants and Contracts	226,238.72		531,538.54
State Aid	10,539,804.05		11,031,493.26
State Capital Aid	1,796,556.69		4,648,514.52
County Appropriations	1,840,475.00		1,967,092.04
County Capital Appropriations	222,327.97		211,246.64
Noncapital Grants	50,978.50		506,190.72
Capital Grants	-		173,359.38
Noncapital Gifts	254,708.78		188,431.70
Sales and Services	1,053,782.15		764,492.95
Other Operating Revenues	14,584.00		14,843.54
Other Nonoperating Revenues	5,701.48		10,131.24
Additions to Endowments	15,225.00		2,050.00
Investment Income	23,953.62		32,480.75
Total Revenue	23,359,292.32		27,557,791.42
Schedule of Changes in Unrestricted Net Assets
Deductions:
Restricted Tuition and Fees			(21,245.00)
Restricted Federal Grants and Contracts	(3,840,298.05)		(3,665,483.28)
Restricted State Grants and Contracts	(225,920.05)		(530,958.52)
State Capital Aid	(1,796,556.69)		(4,648,514.52)
County Capital Appropriations	(222,327.97)		(211,246.64)
Capital Grants	-		(173,359.38)
Noncapital Restricted Grants	(50,978.50)		(151,080.70)
Noncapital Restricted Gifts	(202,712.78)		(506,190.72)
Other Restricted Nonoperating Revenues	(1,792.59)		(717.26)
Additions to Endowments	(15,225.00)		(2,050.00)
Investment Income	(3,044.34)		(4,620.01)
Total Net Unrestricted Revenue	17,000,436.35		$ 17,642,325.39
Expenses:
Personal Services	13,890,342.89		14,860,379.08
Supplies and Materials	2,319,813.12		3,154,690.50
Services	1,612,356.11		1,629,828.62
Scholarships Fellowships	3,538,985.65		3,943,683.68
Utilities	471,980.11		497,018.98
Depreciation	987,726.38		927,159.03
Interest and Fees on Debt	-		10,847.81
Subtotal Expenses	22,821,204.26		25,023,607.70
Deductions
Restricted Personal Services	(507,197.04)		(784,759.72)
Restricted Supplies and Materials	(564,853.76)		(1,050,865.99)
Restricted Services	(275,694.29)		(515,241.62)
Restricted Scholarships Fellowships	(3,511,114.77)		(3,783,137.21)
Depreciation	(987,726.38)		(927,159.03)
Interest and Fees on Debt	-		(10,847.81)
Total Net Unrestricted Expense	16,974,618.02		17,951,596.32
Transfer to Restricted Funds	(43,431.19)		(56,451.89)
Change	$ 69,249.52		$ (365,722.82)