REPORT NO. 2011-108 FEBRUARY 2011 SEMINOLE STATE COLLEGE OF FLORIDA Financial Audit_part5 pot

FEBRUARY 2011 REPORT NO. 2011-108
SEMINOLE STATE COLLEGE OF FLORIDA
A COMPONENT UNIT OF THE STATE OF FLORIDA
NOTES
TO FINANCIAL STATEMENTS (CONTINUED)
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UNE 30, 2010


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13. LITIGATION
The College is involved in several pending and threatened legal actions. The range of potential loss from all
such claims and actions, as estimated by the College’s legal counsel and management, should not materially
affect the College’s financial position.
14. SCHEDULE OF STATE REVENUE SOURCES
Revenue from State sources for current operations is primarily from the College Program Fund administered
by the Florida Department of Education under the provisions of Section 1011.81, Florida Statutes. In
accordance with Section 1011.84, Florida Statutes, the Legislature determines each college’s apportionment
considering the following components: base budget, which includes the State appropriation to the College
Program Fund in the current year plus the related student tuition and fees assigned in the current General
Appropriations Act; the cost-to-continue allocation, which consists of incremental changes to the base
budget, including salaries, price levels, and other related costs; enrollment workload adjustments; operation
costs of new facilities adjustments; and new and improved program enhancements, which are determined by
the Legislature. Student fees in the base budget plus student fee revenues generated by increases in fee rates
are deducted from the sum of these components to determine the net annual State apportionment to each
college.
The State allocates gross receipts taxes, generally known as Public Education Capital Outlay money, to the
College on an annual basis. The College is authorized to receive and expend these resources only upon
applying for and receiving an encumbrance authorization from the Florida Department of Education.
The following is a summary of State revenue sources and amounts:
Source Amount

College Program Fund 28,856,779$
Gross Receipts Tax (Public Education Capital Outlay) 9,178,016
4,071,129
Bright Futures Scholarship Program 2,669,826
Florida Student Assistance Grants 1,087,456
Restricted Contracts and Grants 706,370
Motor Vehicle License Tax (Capital Outlay and Debt Service) 572,800
Other State Sources 166,611
Total
47,308,987$
Education Enhancement Trust Fund (Lottery)

15. FUNCTIONAL DISTRIBUTION OF OPERATING EXPENSES
The functional classification of an operating expense (instruction, academic support, etc.) is assigned to a
department based on the nature of the activity, which represents the material portion of the activity
attributable to the department. For example, activities of an academic department for which the primary
departmental function is instruction may include some activities other than direct instruction such as public
service. However, when the primary mission of the department consists of instructional program elements,
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A COMPONENT UNIT OF THE STATE OF FLORIDA
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all expenses of the department are reported under the instruction classification. The operating expenses on
the statement of revenues, expenses, and changes in net assets are presented by natural classifications. The
following are those same expenses presented in functional classifications as recommended by NACUBO:
Functional Classification Amount
Instruction 33,889,940$
Academic Support 6,828,299
Student Services 9,262,415
Institutional Support 11,946,301
Operation and Maintenance of Plant 14,271,672
Scholarships and Fellowships 21,847,246
Depreciation 6,647,279
Auxiliary Enterprises 596,868
Total Operating Expenses
105,290,020$

16. CURRENT UNRESTRICTED FUNDS
The Southern Association of Colleges and Schools, Commission on Colleges, which establishes the
accreditation requirements for institutions of higher education, requires a disclosure of the financial position
of unrestricted net assets, exclusive of plant assets and plant-related debt, which represents the change in
unrestricted net assets. To meet this requirement, statements of net assets and revenues, expenses, and
changes in net assets for the current unrestricted funds are presented, as follows:
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A COMPONENT UNIT OF THE STATE OF FLORIDA
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ASSETS
Current Assets:
Cash and Cash Equivalents 10,834,128$
Accounts Receivable, Net 3,177,361
Due from Other Governmental Agencies 393,106
Due from Component Unit 49,797
Prepaid Expenses 723,715
TOTAL ASSETS
15,178,107$
LIABILITIES
Current Liabilities:
Accounts Payable 744,067$
Salary and Payroll Taxes Payable 1,017,642
Deferred Revenue 7,573
Deposits Held for Others 117,887
Compensated Absences Payable 122,617

Total Current Liabilities
2,009,786
Noncurrent Liabilities:
Compensated Absences Payable 4,912,448
Other Postemployment Benefits Payable 54,351
Total Noncurrent Liabilities
4,966,799
TOTAL LIABILITIES
6,976,585
TOTAL NET ASSETS

8,201,522
TOTAL LIABILITIES AND NET ASSETS
15,178,107$
Statement of Current Unrestricted Funds Net Assets

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A COMPONENT UNIT OF THE STATE OF FLORIDA
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REVENUES
Operating Revenues:
Student Tuition and Fees, Net of Scholarship
Allowances of $15,046,562 17,815,697$
Federal Grants and Contracts 105,343
State and Local Grants and Contracts 149,488
Nongovernmental Grants and Contracts 603,762
Sales and Services of Educational Departments 16,507
Auxiliary Enterprises 1,403,808
Other Operating Revenues 151,699
Total Operating Revenues
20,246,304
EXPENSES

Operating Expenses:
Personnel Services 53,485,496
Scholarships and Waivers 603
Utilities and Communications 2,547,756
Contractual Services 2,035,655
Other Services and Expenses 4,586,125
Materials and Supplies 2,755,436
Total Operating Expenses
65,411,071
Operating Loss
(45,164,767)
NONOPERATING REVENUES
State Appropriations 32,927,908
Gifts and Grants 2,874,753
Investment Income 42,411
Other Nonoperating Revenues 21,853
Net Nonoperating Revenues
35,866,925
Loss Before Other Revenues,
Expenses, Gains, or Losses
(9,297,842)
Transfers from Other Funds 14,462,588
Increase in Net Assets
5,164,746
Net Assets, Beginning of Year 3,036,776
Net Assets, End of Year
8,201,522$
Statement of Current Unrestricted Funds Revenues,
Ex
p

enses, and Chan
g
es in Net Assets

17. SUBSEQUENT EVENTS
During the 2010 legislative session, the College received Public Education Capital Outlay funds for the
purchase of 25 acres of land adjacent to the existing Altamonte Springs campus. This land includes three
existing buildings of over 90,000 square feet. On July 29, 2010, the College closed on this purchase at a cost
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A COMPONENT UNIT OF THE STATE OF FLORIDA
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of $22.5 million with payments of $500,100 made as a deposit, $12,500,000 made at closing, and the
$10 million balance plus interest due by July 29, 2011.
On September 29, 2010, the College closed on a 2.58 acre parcel of land adjacent to the south entrance of
the Sanford/Lake Mary Campus. The purchase price of this property was $600,000 and was funded with
general operating funds.

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SEMINOLE STATE COLLEGE OF FLORIDA

OTHER REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS –
OTHER POSTEMPLOYMENT BENEFITS PLAN


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Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage
Actuarial Value of Liability (AAL) AAL Funded Covered of Covered
Valuation Assets (2) (UAAL) Ratio Payroll Payroll
Date (1) (a) (b) (b-a) (a/b) (c) [(b-a)/c]
7/1/2007 $ 715,854$ 715,854$ 0% 31,261,578$ 2.3%
7/1/2009 $ 822,003$ 822,003$ 0% 34,652,305$ 2.4%
Notes: (1)
(2)
The initial OPEB actuarial calculation was performed as of July 1, 2007, for the College as it
im
p
lemented the
p
rovisions of GASB 45.
The College's OPEB actuarial valuation used the projected unit credit actuarial method to estimate
the unfunded actuarial liabilities.




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SEMINOLE STATE COLLEGE OF FLORIDA
OTHER REQUIRED SUPPLEMENTARY INFORMATION
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1. SCHEDULE OF FUNDING PROGRESS – OTHER POSTEMPLOYMENT BENEFITS PLAN
The July 1, 2009, unfunded actuarial accrued liability (UAAL) of $822,003 was 14.8 percent higher than the
July 1, 2007, UAAL of $715,854. The increase was due to the expected growth of liabilities over time and
demographic changes of approximately $133,000. Updated participation and medical trend assumptions
accounted for an additional $55,000 increase in the liability. These increases were partially offset by a
decrease in the UAAL of $82,000 resulting from updated claims costs, contributions, and the revised
mortality assumption.
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AUDITOR GENERAL
STATE OF FLORIDA
G74 Claude Pepper Building
111 West Madison Street
Tallahassee, Florida 32399-1450
The President of the Senate, the Speaker of the
House of Representatives, and the
Legislative Auditing Committee
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS

We have audited the financial statements of Seminole State College of Florida, a component unit of the State of
Florida, and its discretely presented component unit as of and for the fiscal year ended June 30, 2010, which
collectively comprise the College’s basic financial statements, and have issued our report thereon included under the
heading INDEPENDENT AUDITOR’S REPORT ON FINANCIAL STATEMENTS. Our report on the
financial statements was modified to include a reference to other auditors. 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. Other
auditors audited the financial statements of the discretely presented component unit as described in our report on the
College’s financial statements. This report does not include the results of the other auditors’ testing of internal
control over financial reporting or compliance and other matters that are reported on separately by those auditors.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the College’s internal control over financial reporting as a basis
for designing our auditing procedures 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 over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the College’s internal control over financial
reporting.
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 College’s financial statements will not be prevented, or
detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting
DAVID W. MARTIN, CP
A
AUDITOR GENERAL
PHONE: 850-488-5534
F
AX: 850-488-6975

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that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in
internal control over financial reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the College’s financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, rules, 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. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
Pursuant to Section 11.45(4), Florida Statutes, this report is a public record and its distribution is not limited.
Auditing standards generally accepted in the United States of America require us to indicate that this report is
intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate
and the Florida House of Representatives, Federal and other granting agencies, and applicable management and is not
intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

David W. Martin, CPA
February 9, 2011

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