Audit finds SFCC’s financial outlook improved despite declining enrollment
Santa Fe Community College had a clean state audit for fiscal year 2018, along with increasing net worth and rising cash reserves.
The lack of findings in the audit, released earlier this week by the State Auditor’s Office, was good news for the college, which has struggled with declining enrollment and state funding cuts in recent years.
In 2012, the state reported 21 findings in its financial audit of the college. The following fiscal year, Nick Telles took over as vice president of finance and started implementing a plan to better report and manage expenses.
“That’s why we brought him in,” board member Linda Siegle said of Telles. “We were still doing things by hand and by paper. Nick and his team have done a great job of identifying problems and working with [information technology] to make sure we have the right software and technology to be efficient in everything that we do.”
Before arriving at Santa Fe Community College in 2014, Telles was a fiscal analyst for the Senate Majority Leadership Office for 14 legislative sessions and then served as the finance director for Valencia County.
Community colleges have multiple, ever-changing revenue streams, which gives finance directors and auditors plenty to track.
“Between federal and state grants, capital grants, state appropriations, operational appropriations, property taxes, tuition and fees, there are so many different funding sources for community colleges,” Telles said. “From the start, we brought in CPAs and provided a lot of training in education finance.”
According to the 2018 audit, which was verified by independent auditing firm Axiom CPAs and approved by the State Auditor’s Office, the community college’s net worth jumped from nearly $5.4 million in fiscal year 2017 to more than $12.5 millionin fiscal year 2018.
In fiscal year 2014, SFCC had a cash reserve balance slightly above $700,000. By June 30, 2018, those reserves had more than doubled to $1.6 million. This month, the college’s reserve balance is above $3.9 million.
“We’ve been taking a really close look at monthly expenditures,” Telles said. “By monitoring those expenses all across campus in every department every month, we’ve been able to set goals and make progress towards meeting them.
“It is a matter of maximizing every dollar of expenditure that we have,” he added. “We have to be very methodical in spending every dollar.”
Despite that rapid increase in reserves, the college is still behind its goal of around $7.5 million, which would be good enough for three months of payroll for all employees.
The college also faces uncertainties when it comes to the yearly appropriations it receives from the state and its enrollment numbers. The college received $10.4 million in state funding in fiscal year 2016. That dropped to around $9.6 million in fiscal years 2017 and 2018.
Over the past year, from the spring 2018 semester to spring 2019, the college lost 5.36 percent of its students, dropping from 5,635 to 5,333. In addition, total credit hours are down 9 percent, meaning students are taking fewer classes on average.
Still, the college is on more stable financial footing than it has been at any other time in the past five years, officials said.
“This gives the public more confidence that we know what we’re doing,” Siegle said. “They can trust that we’re managing their money to the best of our ability.”