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Community College District 502 • Counties of DuPage, Cook and Will and State of Illinois

Comprehensive Annual Financial ReportFiscal Year Ended June 30, 2012

FINAN-12-10171 CAFR Cover.indd 1 9/10/12 2:05 PM

COLLEGE OF DUPAGE COMMUNITY COLLEGE DISTRICT NUMBER 502

GLEN ELLYN, ILLINOIS

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FISCAL YEARS ENDED JUNE 30, 2012 AND JUNE 30, 2011

Prepared by the Finance Office


TABLE OF CONTENTS FISCAL YEARS ENDED JUNE 30, 2012 AND JUNE 30, 2011

I. INTRODUCTORY SECTION Table of Contents ...................................................................................................... 1 Transmittal Letter ...................................................................................................... 7 Principal Officials ...................................................................................................... 20 Organization Chart .................................................................................................... 21

Senior Management Team ........................................................................................ 22 Certificate of Achievement for Excellence in Financial Reporting............................................................................................ 23

II. FINANCIAL SECTION Independent Auditors’ Report .................................................................................. 24 Required Supplementary Information: Management’s Discussion and Analysis .................................................................. 26

Basic Financial Statements: Statements of Net Assets ..................................................................................... Statement 1 39 Statements of Revenues, Expenses, and Changes in Net Assets ........................ Statement 2 40 Statements of Cash Flows ................................................................................... Statement 3 41 Discretely Presented Component Unit College of DuPage Foundation

Statement of Financial Position ....................................................................... Statement 4 42

Statement of Activities .................................................................................... Statement 5 43

Notes to Financial Statements .............................................................................. 44

Required Supplementary Information: Schedule of Funding Progress .............................................................................. 80

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III. STATISTICAL SECTION (Unaudited) Statistical Section Contents ....................................................................................... 81

Financial Trends: Net Assets by Component,

Last Ten Fiscal Years ..................................................................................... Table 1 82 Changes in Net Assets,

Last Ten Fiscal Years ..................................................................................... Table 2 83 Revenue Capacity: Assessed Value and Actual Value of Taxable Property,

Last Ten Levy Years ...................................................................................... Table 3 84

Property Tax Rates - Direct and Overlapping Governments, Last Ten Levy Years ...................................................................................... Table 4 85

Principal Property Taxpayers, Current Levy Year and Nine Years Ago ....................................................... Table 5 86

Property Tax Levies and Collections, Last Ten Levy Years ....................................................................................... Table 6 87

Enrollment, Tuition and Fee Rates, Credit Hours, and Tuition and Fees Revenues Generated, Last Ten Fiscal Years ...................... Table 7 88

Debt Capacity:Ratios of Outstanding Debt by Type,

Last Ten Fiscal Years .................................................................................... Table 8 89

Direct and Overlapping Governmental Activities Debt, General Obligation Bonds .............................................................................. Table 9 90

Legal Debt Margin Information, Last Ten Fiscal Years ..................................................................................... Table 10 91

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III. STATISTICAL SECTION (Unaudited) (Continued)

Debt Capacity (continued):Pledged Revenue Coverage, Series 2003B, 2006, 2009A, 2009B, and 2011B Bonds, Last Ten Fiscal Years ....................................................... Table 11 92

Demographic and Economic Information: Personal Income per Capita, Last Ten Calendar Years ...................................... Table 12 93

Principal Employers, Current Year and Nine Years Ago ................................... Table 13 94

Student Enrollment Demographic Statistics by Category, Last Ten Fiscal Years .................................................................................... Table 14 95

Student Enrollment Semester Credit Hours, Last Ten Fiscal Years ..................................................................................... Table 15 96

State Credit Hour Grant Funding per Semester Credit Hour by Instructional Category, Last Ten Fiscal Years ......................................... Table 16 97

Operating Information:Employee Headcount and Classification,

Last Ten Fiscal Years ..................................................................................... Table 17 98

Operating Indicators, Last Ten Fiscal Years ..................................................................................... Table 18 99

Capital Asset Statistics, Last Ten Fiscal Years ..................................................................................... Table 19 100

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IV. SPECIAL REPORTS SECTION

Supplemental Financial Information: (Illinois Community College Board Uniform Financial Statements)

All Subfunds Summary ....................................................................................... Exhibit 1 101

Summary of Capital Assets and Long-Term Debt ............................................. Exhibit 2 102

Operating Subfunds Revenues and Expenditures .............................................. Exhibit 3 103

Restricted Purposes Subfund Revenues and Expenditures ................................ Exhibit 4 105

Current Subfunds Expenditures by Activity ....................................................... Exhibit 5 107

Certification of Chargeback Reimbursement ..................................................... Exhibit 6 108

Other Supplemental Financial Information: Combining Schedule of Revenues, Expenses, and Changes in Subfund Balances, All Subfunds and Account Groups ...................................................... Exhibit A 109

Schedule of Auxiliary Subfunds .............................................................................. Exhibit B 111

Other Supplementary Financial Information ...................................................... 112

State Grant Activity and Schedule of Enrollment Data: State Grant Activity and Schedule of Enrollment Data Notes ................................ 118

Independent Auditors’ Report .................................................................................. 119

Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Grant Program Financial Statements Performed in Accordance with Government Auditing Standards……………………………………………………….. .... 121

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IV. SPECIAL REPORTS SECTION (Continued)

ICCB Grant Statements:

Workforce Development (Business/Industry) Grant Financial Statements: Balance Sheet ..................................................................................................Schedule 1 123 Statement of Revenues, Expenditures, and Changes in Fund Balance ...........................................................................Schedule 2 124 Expenditures Compliance Statement ................................................................... Schedule 3 125

Notes to the Financial Statements ................................................................. 126

State Adult Education and Family Literacy Restricted Fund Grants (State Basic, Public Assistance, and Performance)Financial Statements: Combining Balance Sheet ...............................................................................Schedule 4 127

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ...........................................................................Schedule 5 128

ICCB Compliance Statement .........................................................................Schedule 6 129 Notes to the Financial Statements………………………………………….. 130

Career and Technical Education – Program Improvement GrantFinancial Statements: Balance Sheet ..................................................................................................Schedule 7 131

Statement of Revenues, Expenditures, and Changes in Fund Balance .............................................................................................Schedule 8 132


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IV. SPECIAL REPORTS SECTION (Continued)

Career & Technical Education Innovation GrantFinancial Statements: Balance Sheet ..................................................................................................Schedule 9 134

Statement of Revenues, Expenditures, and Changes in Fund Balance .............................................................................................Schedule 10 135


Enrollment Data and Other Bases Upon Which Claims Were Filed Independent Accountants’ Report .................................................................. 137 Schedule of Enrollment Data and Other Bases Upon Which Claims are Filed ..............................................................................Schedule 11 138

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PROFILE/HISTORY OF THE COLLEGE

The origins of College of DuPage can be traced to two signature events: the adoption of the Public Community College Act of 1965 by the Illinois General Assembly and the approval of a December 4, 1965, referendum by DuPage high school district voters. This foresight created a new community college to serve the dynamically growing and prospering DuPage area. College of DuPage is the Midwest's largest comprehensive, single campus community college, and is dedicated to serving the diverse higher educational, civic and cultural needs of the residents of Community College District 502.

On September 25, 1967, College of DuPage (C.O.D.) opened under President Rodney K. Berg and Board of Trustees Chairman George L. Seaton. Classes were held in office trailers and at 40 leased suburban sites throughout the newly formed Community College District 502. Driving from class to class, the 2,621 students and 87 full-time faculty and staff of this "campus-less" community college became affectionately known as road-runners; hence the school's nickname "Chaparrals."

Enrolling approximately 30,000 students each semester, College of DuPage is the second largest higher education provider in the state; second only to the University of Illinois. In 2008, the College received a maximum seven-year reaccreditation through the North Central Association of Colleges and Schools Commission on Institutions of Higher Education. The College maintains its accredited status through participation in the Academic Quality Improvement Program (AQIP). College of DuPage is committed to engage in all AQIP processes in seven year cycles including Strategy Forums, Annual Updates for AQIP Action Projects, Systems Portfolio Appraisals and site visits to review Department of Education compliance issues.

The College is recognized by the Illinois Community College Board and governed by a locally elected seven-member Board of Trustees and one elected, non-voting student representative. Total staff at the College numbers 4,098 (Spring 2012) and includes administrators, full- and part-time faculty members, counselors and advisors, classified staff, various other professionals and student employees.

College of DuPage’s operating revenue is derived primarily from local property taxes and tuition and fees. Additionally, the College receives state allocations and grant funding from state and federal sources. Gifts and grants from foundations and private sources are accepted through College of DuPage Foundation.

College of DuPage offers its students diverse and far-reaching educational programs. Students can choose from 71 different Associate degree programs, 151 certificate programs, and also complete coursework that transfers towards earning a baccalaureate degree. College credit and Continuing Education classes are offered on the College’s 273-acre Glen Ellyn campus, at five regional centers, and at area high schools and other community locations.

Under the College’s current President, Dr. Robert L. Breuder, the College’s financial position has strengthened as C.O.D.’s unrestricted fund balances in the General, Auxiliary and Working Cash Funds have increased over $55 million to 60.3% of total operating revenues in FY2012 from 30.9% in FY2008. This increase in fund balance has been achieved during the one of the most challenging economic times in recent memory as the economy continues to struggle to recover from the recession that began in 2008. In FY2011, the College also had its Aaa/AAA bond ratings (the highest ratings possible) re-affirmed from Moody’s and Standards & Poor’s, respectively. In

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addition, since 2009, C.O.D. has developed more than 30 new programs and certificates, as well as 20 new program accreditations and has implemented ten new 3+1 programs that offer students the opportunity to earn bachelor’s degrees at the Glen Ellyn campus.

LOCAL ECONOMY

The College’s district includes the majority of DuPage County and portions of Cook and Will Counties. DuPage County is in northeastern Illinois and covers 332.1 square miles. DuPage is at the hub of the nation’s rail, air, freight and trucking systems. The County plays a critical role in maintaining a large, efficient transportation system and infrastructure which includes six major expressways and three major commuter rail lines. DuPage Airport Authority is Illinois’ third busiest airport and O’Hare International airport is on the County’s northeastern border.

The District normally has a relatively low unemployment rate and one of the highest equalized assessed valuations per community college student. DuPage County has a highly skilled employment pool, reflecting the educational commitment of its residents. Over 45% of DuPage’s population has a college or professional degree, compared to the 32% statewide average. High school graduation rates are 92% while the statewide average is 84%. School test scores consistently rank above the state average, and school operating expenditures per child exceed the state average. Twenty private or public colleges are located in DuPage County.

The County has a very diverse economic base, comprised of construction and manufacturing, wholesale and retail trade, various service sectors and research. A high tech research and development corridor covers the width of DuPage County, stretching from the Argonne National Laboratory in the Southern part of the County to the Fermi National Accelerator Laboratory on the western boundary. A pro-business atmosphere, a commitment to a well-educated workforce and a modern transportation system make DuPage County an ideal location for business expansion and relocation.

The population of District 502 continues to change as follows:

District 502 Population Year Population

1992 848,155 (actual) 2000 965,009 (actual) 2010 1,091,387 (actual) 2012 1,061,506 (estimated)

OUTREACH

The College offers many different forums to engage and provide programming to members of the community.

McAninch Arts Center (MAC) The McAninch Arts Center is a state-of-the-art facility, housing three performance spaces, an art gallery and classrooms for the College’s academic programming. This unique facility has presented theater, music, dance and visual arts to more than 1.5 million people since its opening in 1986 and last year welcomed more than 75,000 patrons from the greater Chicago area to more than 230 performances. The MAC is also home to the Buffalo Theatre Ensemble and the New Philharmonic.

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The result is a collection of touring, resident and student groups that foster enlightened education and performance opportunities to encourage artistic expression, promote a lasting relationship between people and art, and enrich the cultural vitality of the community.

WDCB-TV An educational and community service provided by College of DuPage, WDCB-TV's broadcast schedule originates from the College and runs 24-hours a day, seven days a week. Programs are aired with public service announcements and WDCB-FM news.

A primary source of programming for WDCB-TV is college-credit telecourses offered by the College's Center for Extended Learning. The College's Multimedia Services department produces Images, Career Paths, That Beepin’ Show and The College Lecture Series. These four general interest video programs cover a wide range of College issues. WDCB-TV is available in Wheaton, Glen Ellyn, Naperville, West Chicago, Geneva and St. Charles.

WDCB 90.9 FM Public Radio The College's award-winning public radio station provides Chicagoland and beyond with jazz, news, blues and more, 24-hours a day, seven days a week. WDCB serves the entire metropolitan area with a 5-kilowatt signal broadcasting from C.O.D.'s Glen Ellyn campus, and also streams its signal to the rest of the world at www.wdcb.org.

HIGHLIGHTS OF FY2012

The mission of College of DuPage is to be a center for excellence in teaching, learning, and cultural experiences by providing accessible, affordable, and comprehensive education. DuringFiscal Year 2012, the College accomplished much in furthering this mission. The following highlights a few of the major achievements:

College of DuPage partnered with Lewis University to offer a second 3+1 program, which enables students to complete a four-year Bachelor of Arts degree in Fire Service Administration at C.O.D.'s Glen Ellyn campus.

The College signed three new 3+1 agreements with Benedictine University that enable Accounting, Management and Marketing students to earn a Bachelor of Arts degree in Management from Benedictine at C.O.D.’s Glen Ellyn campus.

A new 3+1 agreement for C.O.D. Nursing students to complete a Bachelor of Science degree in Nursing (online) from Governors State University (GSU). In terms of the C.O.D./GSU agreement, College of DuPage students will take three full years of coursework at C.O.D. with the fourth year offered by GSU through online courses. The online format for the fourth year of the program will be convenient for students who are busy with jobs, family and other responsibilities.

The 65,000-square-foot Student Services Center opened in August, 2011. The facility serves as the College’s new front door and is home to the College’s Admissions, Registration, Financial Aid and Counseling and Advising offices, as well as the Office of Student Life.

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On Tuesday, September 27, 2011, C.O.D. formally opened and dedicated the new Homeland Security Education Center (HEC). This 65,000-square-foot facility serves as a training ground for first responders and houses Fire Science/EMS and Criminal Justice programs, as well as the C.O.D. Police Department. The HEC has state-of-the-art equipment, but perhaps one of the most awe-inspiring components of this facility is a relic from the site of the World Trade Center. This 27” x 120” beam was taken from the debris. College of DuPage is one of thousands of institutions and organizations requesting a relic and among only a few selected to receive a piece of this history.

On Monday, October 3, 2011, Waterleaf restaurant and Inn at Water’s Edge boutique hotel, located in the Culinary & Hospitality Center opened. This fine dining establishment serves lunch and dinner on select days of the week under the direction of Executive Chef Jean-Louis Clerc and his staff. Waterleaf will provide a unique professional dining experience unlike any other restaurant in the Chicago area. Waterleaf was recently identified as a “Diner’s Choice” restaurant on OpenTable.com. This recognition is based upon more than 80 reviews provided by Waterleaf patrons, which also resulted in Waterleaf being named one of the “Best Overall” restaurants in the western suburbs. Inn at Water’s Edge is an elegant, six-room boutique hotel that features beautifully appointed suites, Continental breakfast for guests and 24-hour concierge service. Reservations for Waterleaf can be made by calling (630) 942-6888. Learn more about Inn at Water’s Edge at www.innatwatersedgehotel.com.

The College's new Learning Commons opened Monday, June 11, 2012, in the Student Resource Center, and provides students a single location for academic support services. The center is conveniently located near the Library and provides tutoring, math, writing, reading and speech assistance. Services are offered by faculty members, peer or professional tutors and staff members and are free for registered C.O.D. students. The Learning Commons also offers Course Connections, which includes FLEXible Learning (previously the Center for Independent Learning); online, classroom and hybrid course support; and developmental math and English courses.

College of DuPage implemented a new pilot program that provides scholarships to eligible GED students to help them “jump start” their college education and improves their skills for employment. The new Jump Start Scholarship awards $500 to students who reside in District 502, have successfully completed the GED preparation course at the College, and have received the GED credential in the past 12 months and within three months of completing the prep course.

In August, 2011 the College sold half of the bonds approved under the $168 million referendum approved in November, 2010 by the voters of District 502. The College also refinanced $20.4 million of previously issued debt. This institution has long enjoyed a AAA rating from Moody’s Investors Services and Standard & Poor’s, helping to draw top-level investors to purchase bonds at exceptional prices. The stellar ratings have helped the College to refinance bonds in the past, saving taxpayers millions of dollars in interest payments. This current sale was no different and taxpayers were estimated to have saved $2 million in interest. Considering current market conditions, this translates into a savings of about $860,000 to taxpayers over the life of the bonds originally issued in 2003.

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In August, 2011 a new payment policy was implemented that requires students pay their tuition and fees at the time of registration. For students unable to pay their bill in full, the College offers two convenient payment plans:

o Pay As You Go Plan (previously known as the Automatic Payment Plan). The Pay As You Go Plan allows students to pay their tuition and fees in installments automatically deducted from a checking or savings account or applied to a credit card.

o Deferred Payment Plan (for those who are eligible for financial aid and veteran’s assistance). The Deferred Payment Plan requires that a student have an EFC score of 2,051 on their FASFA and be qualified for receiving veterans’ benefits, or federal or state student assistance.

The College’s Associate Degree Nursing program received accreditation from the National League for Nursing Accrediting Commission (NLNAC) through 2016, when C.O.D. will receive the next evaluation visit. The NLNAC is nationally recognized for the specialized accreditation of nursing education programs, including Clinical Doctorate, Master’s Degree, Baccalaureate Degree, Associate Degree, Diploma and Practical Nursing programs. The rigorous accreditation standards and criteria set by NLNAC include a review of the ADN program’s mission and administrative capacity, faculty and staff credentials, student services, curriculum, physical resources, and demonstration of student learning and outcomes.

College of DuPage Foundation received a seven-figure gift from Glen Ellyn resident Cleve Carney that will create an arts legacy for the community. The gift consists of a $700,000 cash donation and an in-kind gift of artwork for a total amount which exceeds $1.0 million. The gift will be used to establish the Cleve Carney Art Space in the McAninch Arts Center and the Cleve Carney Art Space Endowment Fund, which will support the exhibition of contemporary art in the new space and provide funding to purchase artwork for the College’s Permanent Art Collection.

College of DuPage named a record 63 Presidential Scholars for Fall 2012. The recent high school graduates will receive full-tuition scholarships to College of DuPage for a maximum of 64 semester hours. These high-achieving students have an average GPA of 4.013 and an average ACT composite score of 28.07.

The College initiated a debit card program for student refunds/disbursements. This new system will ease the process for students and help eliminate long lines at the Cashier’s windows. To date, 800 students have enrolled in the program. There is no cost for C.O.D. students to obtain the card and students can enroll online at myaccess.cod.edu. The card provides a faster, more convenient alternative for students to receive refunds and financial aid disbursements and provides a convenient, secure alternative to paper checks. Through this new service, refunds and disbursements are automatically deposited to a student's account without the requirement of check-cashing or bank visits. In addition, if a card is lost, it can be replaced and the card balance restored. The card also can be used like any other debit card for payment of such items as tuition, books and other living expenses.

College of DuPage has been selected to receive the Governor’s Award for Excellence in Education by the Illinois Department of Veterans Affairs. C.O.D. is the first community

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college in the State to receive the award. The award highlights the work of Illinois colleges and universities whose veteran’s services go above and beyond basic services, and whose accomplishments in veteran-friendly programs significantly impact the overall experience of the student veteran community.

College of DuPage Board of Trustees adopted a Tobacco-Free Campus Policy during its April 19, 2012 regular meeting. Effective Monday, August 6, 2012, the use of tobacco and tobacco-related products was prohibited on all College of DuPage premises and in all College-owned vehicles.

College of DuPage and the Village of Glen Ellyn reached an agreement after a mediation session with DuPage County Circuit Court Judge Hollis Webster. Under this agreement, all regulatory control and authority over the College campus will be transferred from the Village to DuPage County while the College will remain incorporated in the Village of Glen Ellyn.

FINANCIAL INFORMATION

The College maintains its accounts and prepares its financial statements in accordance with generally accepted accounting principles in the United States of America (GAAP) as set forth by the Governmental and Financial Accounting Standards Boards (GASB and FASB), and the ICCB. The ICCB requires accounting by sub-funds in order that limitations and restrictions on resources can be easily accounted for. The funds required are as follows:

Fund Group FundGeneral Education Operating & Maintenance Capital Projects Operating & Maintenance (Restricted) Debt Service Bond & Interest Proprietary Auxiliary Enterprises Special Revenue Restricted

The financial records of the College are maintained on the accrual basis of accounting whereby all revenues are recorded when earned and all expenses are recorded when an obligation has been incurred. The notes to the financial statements expand and explain the financial statements and the accounting principles applied.

Internal Controls: Management of the College is responsible for establishing and maintaining internal controls to protect the assets of the College, prevent loss from theft or misuse and to provide that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles in the United States of America. The internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: one, the cost of a control should not exceed the benefit likely to be derived; and two, the valuation of costs and benefits requires estimates and judgments by management.

Budgeting Controls: The College maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget

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approved by the College’s Board of Trustees. Activities of the subfunds are included in the annual appropriated budget.

The level of budgetary control (that is, the level at which expenditures cannot exceed the appropriated amount) is established for each individual subfund. The College also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts lapse at year end, unless reserved. However, encumbrances generally are re-authorized as part of the following year’s budget.

As demonstrated by the statements and supplementary financial information included in the financial section of this report, the College continues to meet its responsibility for sound financial management.

PROPERTY TAXES

Taxes are collected on a calendar year basis; taxes levied in 2011 are collected in 2012. Legislation limits the increase in the amount of taxes the College can levy to 5% of the prior year tax extension or the Consumer Price Index (CPI) annual increase, whichever is lower, plus the taxes on new construction. The prior year CPI is used for the current levy year. The 1991 tax levy was the first levy affected by the tax cap legislation. Current and historical information on property taxes is presented in the Statistical section of this report. In the 2010 tax year, assessed valuations in DuPage County decreased by 5.8% and decreased another 6.5% in levy year 2011. 2010 was the first time DuPage County experienced such a decrease.

PROSPECTS FOR THE FUTURE

The President and Senior Management Team have reviewed and modified the College’s Facilities Master Plan, developed Intuitional Priorities for FY2013 and completed a comprehensive Strategic Long-Range Plan including review of the College’s mission, vision and core values.

Given the current economic environment, continued state budget deficits, proposed pension reform, and real estate tax cap legislation limiting C.O.D.’s ability to raise property taxes, the College’s financial outlook remains challenging. The College is meeting these challenges through strategic tuition and fee increases, continuous process improvements to lower costs; the development of marketing programs to build enrollment, especially in under-represented populations, and retention; the expansion of course offerings, including on-line classes, to increase opportunities to learn; and seeking additional grant and private funding to reduce operating costs. The College will continue to conserve resources through the application of financial controls and reduction in expenses, where possible, without affecting the quality of its educational programs.

As part of College of DuPage’s overall planning activities, a five-year financial plan is prepared that is integrated with the strategic planning initiatives. This plan, which is updated annually and presented to the Board of Trustees, identifies major areas of concern that must be addressed if the College is to continue to fulfill its mission, vision and values consistent with the Strategic Long- Range Plan. Currently, the five-year plan anticipates further increases in tuition and streamlining of operations to help address these challenges. The College’s financial goal of maintaining a healthy financial position through the prudent allocation and use of available resources in support of its educational goals and mission remains unchanged.

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The Board approved a goal to build the unrestricted, undesignated fund balances in the Operating & Maintenance, Education, Working Cash and Auxiliary Funds to 50% of Total Operating Revenues by FY2013. At the end of FY2012, the College achieved this goal with a fund balance ratio of 60.3%.

INSTITUTIONAL PRIORITIES

Looking forward to next fiscal year, the Board of Trustees has set the following as Institutional Priorities:

1. Grow combined Fall and Spring (Academic Year 2012-2013) 10th day FTES enrollment by 1%, from 29,967 to 30,267.

2. Implement the Enhanced Student Experience Implementation Plan (ESEIP) to increase student satisfaction and to improve the combined Fall and Spring (Academic Year 2012-2013) within-term retention rate by 1% for degree and certificate-seeking students taking traditional (face-to-face) courses.

3. Add new degree and certificate programs, as well as modify and/or discontinue existing programs, to ensure that our curricular offerings are high quality and in alignment with changing community needs.

4. Add new 3+1 and hybrid 2+2 academic partnership agreements to reach a total of twenty baccalaureate program options by June, 2013.

5. Ensure the financial integrity and performance of the College (e.g. receive clean audit opinion, augment the unrestricted fund balances in the General Fund, Auxiliary Fund and Working Cash Fund to no less than 50% of total general fund operating revenues and maintain “AAA/Aaa” ratings by Standard & Poor’s and Moody’s, respectively).

6. Commence renovation of Physical Education Building, Seaton Computing Center, Student Resource Center (Library and adjacent areas) and McAninch Arts Center; demolish M Building; commence construction of Campus Maintenance Center; and continue site development.

7. Provide at least $500,000 from the Foundation for academic scholarships and programs.

8. Develop and implement professional development programs that enhance employees’ effectiveness and capabilities in supporting the goals and tasks of the College.

9. Strengthen student and employee programs and activities which foster a culture of inclusiveness.

10. Reaffirm Higher Learning Commission/AQIP accreditation by applying for the Illinois Performance Excellence (ILPEx) Awards and advance institutional quality and innovation by developing and implementing action plans around the ILPEx Feedback Report.

11. Ensure the College’s input in Illinois higher education performance-based funding guidelines and align the College with those guidelines.

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12. Strengthen fiscal performance of all auxiliary enterprises (e.g., radio station, Waters Edge/Waterleaf, MAC, Business Solutions), Multi-media services and five Regional Centers.

The Goals set by the College during the 2013 planning process are:

Goal 1 (Demographics) Goal Statement: Strengthen programs and services to support the changing demographics of District 502.

Tasks:1.1 Expand and coordinate academic, social, and personal support systems for underrepresented

populations.1.2 Enhance and expand opportunities to meet student learning needs through alternative delivery

systems.

Goal 2 (Student Success) Goal Statement: Improve student success.

Tasks:2.1 Implement ESEIP to develop, deploy, and effectively use electronic tools and programs to

support student retention and success. 2.2 Implement the ESEIP to promote advising and develop an educational plan for all full-time,

degree and certificate-seeking students.

Goal 3 (Programs) Goal Statement: Ensure a viable academic portfolio that anticipates community needs.

Tasks:3.1 Add new degree and certificate programs to meet the needs of the community. 3.2 Evaluate, modify and/or discontinue existing programs that are not aligned with community

needs.

Goal 4 (Funding) Goal Statement: Enhance C.O.D.’s strong financial position.

Tasks:4.1 Enhance public’s awareness of capital improvements. 4.2 Continue to strengthen the effectiveness of the C.O.D. Foundation and increase funding of

scholarships and programs. 4.3 Expand success in securing private and public sector funding. 4.4 Allocate resources in support of Institutional Priorities and objectives through the annual

budget process. 4.5 Grow enrollment through multiple strategies. 4.6 Ensure auxiliary enterprises are cost-effective and meeting community needs. 4.7 Maintain at least a 50% fund balance. 4.8 Continue to pursue opportunities for providing input into Illinois performance-based funding

guidelines.

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Goal 5 (Partnerships) Goal Statement: Strengthen community partnerships.

Tasks: 5.1 Deploy and further develop a comprehensive planning process. 5.2 Ensure that regional centers are cost-effective and meeting the unique needs of their respective

community.5.3 Strengthen and diversify partnerships with high schools.5.4 Create and strengthen partnerships with the community to enhance workforce development. 5.5 Enhance co-branding with select external partners. 5.6 Strengthen community’s awareness of programs, services and capabilities. 5.7 Pursue a legislative agenda that will assist in meeting the needs of students, community, and

the College. 5.8 Collaborate with additional post-secondary education institutions with a focus on adding

additional 3+1 and hybrid 2+2 degree programs. 5.9 Utilize the ILPEx (Baldrige-based) Awards as the initial step in reaffirming HLC/AQIP

accreditation.

Goal 6 (Facilities & Technology) Goal Statement: Build a state-of-the-art physical and technological setting.

Tasks: 6.1 Continue site development according to FMP. 6.2 Implement an Information Technology Plan that enhances student learning and supports

faculty and staff productivity. 6.3 Improve information technology facility in order to maximize institutional effectiveness. 6.4 Continue to enhance aesthetics of campus buildings and grounds.

Goal 7 (Workforce) Goal Statement: Develop and sustain a workforce committed to the C.O.D. mission.

Tasks: 7.1 Design and implement additional professional development programs that are aligned with the

goals and priorities of the College. 7.2 Through programs and activities continue to foster a culture of inclusiveness for students and

employees. 7.3 Improve College climate through enhanced collaboration. 7.4 Utilize performance improvement method and tools to identify and improve the effectiveness

of key work processes.

FINANCIAL POLICIES

College of DuPage engages in planning to assure that it is future-oriented in serving its students, community and other stakeholders. The Strategic Long-Range Plan is a continuous process that guides the future direction of the institution. Specifically, the Strategic Long-Range Plan (SLRP) defines C.O.D.’s institutional philosophy, mission, vision, core values, long-term goals and associated tasks.

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At College of DuPage, the SLRP is based on the concept of planning “from the outside-in,” therefore the SLRP is a map for the development and delivery of programs and services which address community challenges and needs. The Annual Plan ensures that the College follows a predetermined agenda in an organized and systematic manner. The result is high performance and maximum achievement with minimal waste and maximum resource utilization. Further, the Annual Plan is intended to promote collegiality and facilitate two-way communication. This encourages individual commitment and engagement of all staff. We believe that a stronger, more efficient and effective institution will enable the College to fulfill its mission, achieve its vision, maintain high academic standards, increase opportunities for learning and respond to future challenges and opportunities.

Budget decisions are made in accordance with the College’s Financial Plan and conform to the requirements as set forth in the Illinois Community College Board Fiscal Management Manual. College of DuPage’s budgetary goals include the following:

Annual operating expenditures not to exceed projected revenues. (Expenditures shall be budgeted according to the College’s strategic priorities.) Adequate funding to address debt service, both current (due in less than 12 months) and long-term. Adequate reserves for maintenance and repairs to its existing facilities. Adequate reserves for acquisition, maintenance and replacement of capital equipment. Adequate reserves for strategic capital projects. Adequate funding levels to fulfill future terms and conditions of employment, including early retirement benefits. Adequate allocations for special projects related to the strategic directions of the College. Appropriate allocations for contingencies (unforeseen events requiring expenditures of current resources.) Permanently stabilize its finances in their entirety (operating budget, reserves, contingencies and ending fund balances) when it perceives a long-term change (increase or decrease) to its available future recurring resources. Build unrestricted fund balance to equal 50% of total operating revenue by 2013.

DEBT ADMINISTRATION

Equalized Assessed Valuation of Taxable Property $ 42,017,143,168 College of DuPage net General Obligation Bonded Debt $ 151,207,499

Long-Term Debt Percent of Assessed Valuation 0.36%

The legal debt limit is 2.875% of the District’s assessed valuation. The debt limitation would therefore be $1,207,992,866. The College’s bonded debt of $151,207,499 is well below the legal limit.

18

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21

Dr. Robert L. BreuderPresident

Earl DowlingAssociate Vice PresidentEnrollment Management

Thomas J. GlaserSenior Vice PresidentAdministration andTreasurer

Jean KartjeVice PresidentAcademic Affairs

Susan MartinDeanStudent Affairs

College of DuPage Senior Management Team

James BentéVice PresidentPlanning and InstitutionalEffectiveness

Catherine BrodVice President, DevelopmentExecutive Director,College of DuPage Foundation

Joseph CollinsExecutive Vice President

Charles CurrierVice PresidentInformation Technology

Mary Ann MillushDirectorLegislative Relations andSpecial Assistant to thePresident

Joseph MooreAssociate Vice PresidentMarketing and��

Linda Sands-VankerkVice PresidentHuman Resources

22

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Crowe Horwath LLPIndependent Member Crowe Horwath International

INDEPENDENT AUDITORS’ REPORT

To the Board of Trustees College of DuPage Community College District 502 Glen Ellyn, Illinois

We have audited the accompanying financial statements of the College of DuPage, Community College District 502 (the College) and the discretely presented component unit, the College of DuPage Foundation, as of and for the years ended June 30, 2012 and 2011, as listed in the Table of Contents. These financial statements are the responsibility of the College’s management. Our responsibility is to express opinions on these financial statements based on our audits.

We conducted our audits 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The financial statements of the College of DuPage Foundation were not audited in accordance with Government Auditing Standards. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the College, and the College of DuPage Foundation as of June 30, 2012 and 2011, and the results of its operations and its cash flows, where applicable, for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated October 10, 2012 on our consideration of the College’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and Schedule of Funding Progress, designated in the table of contents as “Required Supplementary Information” be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of

24

America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquires, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the College’s financial statements. The introductory section, statistical section, and the supplemental financial information and the other supplemental financial information listed under the special reports section of the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The supplemental financial information listed under the special reports section of the table of contents is required by the Illinois Community College Board and is presented on the modified accrual basis of accounting. Such information have been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepting in the United States of America. In our opinion, the supplemental financial information listed under the special reports section of the table of contents are fairly presented in all material respects in relation to the financial statements as a whole. The introductory section, statistical section and the other supplemental financial information as listed in the table of contents have not been subjected to the audit procedures applied in the audit of the financial statements, and accordingly, we express no opinion on them.

Crowe Horwath LLP

Oak Brook, Illinois October 10, 2012

25


JUNE 30, 2012

Management’s Discussion and Analysis (unaudited)

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�

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S

INTRODUCTION AND BACKGROUND

This section of College of DuPage, Community College District 502’s (the College) Comprehensive Annual Financial Report presents management’s discussion and analysis (MD&A) of the College’s financial activity during the fiscal years ended June 30, 2012 and June 30, 2011. Since this MD&A is designed to focus on current activities, resulting changes and currently known facts, please read it in conjunction with the Transmittal Letter and the College’s basic financial statements including the notes to the financial statements. Responsibility for the completeness and fairness of this information rests with the College.

USING THIS ANNUAL REPORT

The financial statements focus on the College as a whole and are designed to emulate corporate presentation models whereby all College activities are consolidated into one total. The financial statements consists of four primary parts: (1) the statements of net assets, (2) statements of revenues, expenses, and changes in net assets, (3) statements of cash flow and (4) notes to the financial statements. The financial statements are prepared on the accrual basis of accounting and economic resources measurement focus. Under the accrual basis of accounting, expenses are recorded when incurred and all revenues are recognized when earned in accordance with generally accepted accounting principles.

The Statement of Net Assets is presented in the format where assets equal liabilities plus net assets. Assets and liabilities are presented in order of liquidity and are classified as current (convertible into cash within one year) and noncurrent. This statement combines and consolidates current financial resources (short-term spendable resources) with long-term capital assets. The focus of this statement is to show the overall liquidity and health of the College as of the end of the fiscal year.

The Statement of Revenues, Expenses, and Changes in Net Assets focuses on both the gross and net costs of College activities, which are supported substantially by property taxes, state and federal grants and contracts, student tuition and fees and auxiliary enterprises revenues. This approach is intended to summarize and simplify the user’s analysis of the financial results of the various College services to students and the public.

The Statement of Cash Flow discloses net cash provided by or used for operating, non-capital financing and related financing activities. This statement shows the College’s cash flows are sufficient to pay current liabilities.

The notes to the financial statements are an integral part of the basic statements and describe the College’s significant accounting policies. The reader is encouraged to review the notes in conjunction with management’s discussion and analysis of the financial statements.

26

�

FINANCIAL HIGHLIGHTS

STATEMENT OF NET ASSETS

The major components of College of DuPage’s assets, liabilities, and net assets as of June 30, 2012, 2011, and 2010, are as follows (in millions of dollars):

Change Change2012 2011 2010 2012-11 2011-10

AssetsCurrent assets 314.3$ 278.3$ 332.6$ 36.0$ (54.3)$ Non-current assets

Capital assets, net of depreciation 437.0 374.0 289.5 63.0 84.5Bond issuance costs 1.4 0.9 1.0 0.5 (0.1)

Total assets 752.7 653.2 623.1 99.5 30.1

LiabilitiesCurrent liabilities 116.5 127.1 116.1 (10.6) 11.0Non-current liabilities 258.7 187.9 214.9 70.8 (27.0)

Total liabilities 375.2 315.0 331.0 60.2 (16.0)

Net assetsInvested in capital assets, net of debt 221.2 185.1 162.3 36.1 22.8Restricted 26.3 28.4 29.9 (2.1) (1.5)Unrestricted 130.0 124.7 99.9 5.3 24.8

Total net assets 377.5$ 338.2$ 292.1$ 39.3$ 46.1$

Fiscal Year 2012 Compared to 2011 Total current assets increased by $36.0 million as compared to prior year. The primary reason for the increase is attributable to the increase in investments of $31.3 million due to higher cash balances and an increase in the receivables balance of $3.3 million. In November, 2010 the College was successful in passage of a voter referendum allowing the College to issue additional bonds in an amount up to $168.0 million for construction or renovation of various College facilities. The College issued $84.0 million of the voter approved referendum bonds in August of 2011. The higher receivables balance is due to amounts owed the College from the State of Illinois. The State of Illinois owes the College $4.2 million for the base operating grant as of June 30, 2012; this amount represents four monthly payments. The state of Illinois has appropriated the $4.2 million and prior to the issuance of this report has paid the College the $4.2 million.

Capital assets increased $63.0 million during fiscal year 2012. During the year, the College completed work and transferred from construction in progress to depreciable buildings $160.0 million as work was completed on the Homeland Security Education Center, Culinary and Hospitality Center, BIC West renovations and the Student Services Center building. Also during fiscal year 2012, the College began work on 2010 referendum projects: MAC renovations ($1.2 million), Physical Education building renovations ($2.8 million) Student Resource Center

27

�

rehabilitation ($35.9 million) and various infrastructure improvements ($22.3 million), which accounted for new construction in progress of $62.2 million.

Current liabilities decreased $10.6 million primarily due to a decrease in accounts payable and accrued expenses of $4.7 million and a decrease of $2.4 million in unearned property tax revenues from the previous year. The lower payables balance reflects an acceleration of payments by the College at the end of FY2012. Unearned property tax revenues declined from prior year as a higher proportion of property tax receipts from Cook County were received in FY2012. Non-current liabilities increased $70.8 over the previous year due to the issuance of $84.0 million of general obligation bonds in FY2012.

Total net assets increased by $39.3 million over prior year. This increase is attributable to favorable operating results and unspent bond proceeds. The College had an operating surplus of $39.3 million of which $23.3 million is due to unspent construction funds.

The net investment in capital assets increased by $36.1 million due to the increase in overall capital assets investments net of related debt during fiscal year 2012.

221.2

26.3

130.0

185.1

28.4

124.7

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$200

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Net Investment in CapitalAssets

Restricted Unrestricted

Comparison of Net AssetsFiscal Years 2012, 2011, 2010 (amounts in millions)

2012

2011

2010

In addition to the restrictions presented on the financial statements, the Board of Trustees has approved two additional reservations of net assets. $17,000,000 was approved to be set aside to fund future pension payments to the State of Illinois and $3,000,000 to fund annual maintenance costs which are expected to increase with the expansion of the College’s physical plant.

28

�

Fiscal Year 2011 Compared to 2010

Total current assets decreased by $54.3 million as compared to prior year. The primary reason for the decrease is attributable to the reduction in cash and investments of $53.0 million as bond proceeds were drawn down to pay for construction projects during fiscal year 2011.

Capital assets increased by $84.5 million due primarily to an increase in construction-in-progressfrom spending on various capital projects. During fiscal year 2011, substantial construction work occurred on the new Homeland Security Education Center, Culinary and Hospitality Center, and BIC West renovation which were opened in August 2011 and the Student Services Center building which was opened in September 2011 in time for the Fall school semester.

Current liabilities increased by $11.0 million due primarily to accounts payable increasing $12.9 million. The increase in accounts payable is due to the accrual of unpaid construction invoices for work performed in fiscal year 2011. Non-current liabilities decreased by $27.0 million from prior year due to the scheduled principal payments that will be made in fiscal year 2012 on the College’s long-term bond debt.

Total net assets increased by $46.1 million over prior year. This increase is attributable to an increase in construction spending and the College finishing the year with a surplus. The net investment in capital assets increased by $22.8 million due to the increase in overall capital assets investments during fiscal year 2011.

Unrestricted net assets increased by $24.8 million due to strong financial measures implemented by College management during the year to reduce operating expenses and strengthen revenue growth that resulted in a budget surplus that increased the fund balance.

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS

Revenues:


The College’s operating and non-operating revenues were $248.2 million for fiscal year 2012, which was an increase of $6.6 million from the prior year. Local property taxes continue to be the College’s leading revenue source accounting for $107.8 million or 43.4% of FY2012 revenues. The second largest source of revenue is student tuition and fees which was $59.1 million or 23.8% of total revenues in FY2012. Revenues from state and federal grants totaled $72.0 million and accounted for 29.0% of total fiscal year 2012 revenues.

Operating revenues decreased $3.1 million in FY2012 due to a decrease in tuition and fees revenue. The lower tuition revenue was due to a decrease in attendance. The reimbursable restricted and unrestricted semester credit hours for state apportionment in fiscal year 2012 were 465,067; a decrease of 10,528 hours from fiscal year 2011. The impact lower attendance had on revenue was partially offset by an increase in tuition and fee rates. During FY2012 the College increased fees by $3 per credit hour. Tuition revenues were also negatively impacted by the College increasing the

29

reserve for bad debts by $1.0 million. Per Generally Accepted Accounting Principles (GAAP), any

change to the bad debt reserve is offset against tuition revenue. The College was also able to

generate $9.1 million in out-of-district and out-of-state tuition and fee revenue in FY2012, an

increase of $0.6 million from the previous year. GAAP requires colleges to report tuition and fees

funded by state and federal financial awards as non-operating revenues and not as tuition. As shown

below, student tuition and fees before adjustment was $84.5 million or $2.1 million lower than the

prior year.

Change Change

FY2012 FY2011 FY2010 2012-11 2011-10

Student tuition and fees 84.5$ 86.6$ 76.1$ (2.1)$ 10.5$

Federal and State Awards (25.4) (24.6) (21.7) (0.8) (2.9)

Student tuition and fees, net 59.1$ 62.0$ 54.4$ (2.9)$ 7.6$

The revenue for chargebacks, sales and service fees and other operating revenues remained

consistent with the prior year.

Property taxes increased $3.3 million in FY2012 due to the annual growth from the CPI and Cook

County paying a greater percentage of the first installment of taxes in fiscal year 2012 than in

previous fiscal years. State appropriations increased $3.9 million from FY2011 due to a $5.1

million increase in the on-behalf payment made by the state of Illinois to the State University

Retirement System (SURS) for the benefit of the College’s employees. The increase in on-behalf

payments was offset with decreases in other state funding including $0.9 million in the Student

Success grant, which was a one-time grant for FY2011, and $0.6 million in Illinois Veterans Grant

and $0.8 million decrease in the state of Illinois Monetary Assistance Program. The increase in

Federal grants and contracts is due to a $3.5 increase in Pell Grants received in FY2012.

Student tuition and fees,

net

23.8%

Sales and service fees

1.5%

Other operating revenues

0.7%

Real estate taxes &

CPPRT

44.0%

State appropriations

17.2%

Federal grants and

contracts

11.8%

Non-governmental gifts

and grants

0.6%

Investment

income

0.3%

Other non-operating

revenues

0.0%

Operating and Non-Operating RevenuesFiscal Year 2012

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The following table presents the statement of revenues, expenses and changes in net assets for the College for fiscal years 2012, 2011, and 2010 (in millions of dollars):

Statement of Revenues, Expenses, and Changes in Net Assets Change Change

2012 2011 2010 2012-11 2011-10

RevenuesOperating revenues

Student tuition and fees, net 59.1$ 62.0$ 54.4$ (2.9)$ 7.6$ Sales and service fees 3.8 3.9 6.7 (0.1) (2.8) Other operating revenues 1.8 1.9 2.6 (0.1) (0.7)

Total Operating revenues 64.7 67.8 63.7 (3.1) 4.1

Non-operating revenuesReal estate taxes & CPPRT 109.3 106.0 96.4 3.3 9.6 State appropriations 42.6 38.7 34.0 3.9 4.7 Federal grants and contracts 29.4 26.2 20.0 3.2 6.2 Investment income 0.7 1.3 2.0 (0.6) (0.7) Other non-operating revenues 1.5 1.6 2.7 (0.1) (1.1)

Total non-operating revenues 183.5 173.8 155.1 9.7 18.7 Total revenues 248.2 241.6 218.8 6.6 22.8

ExpensesOperating expenses

Instruction 89.0 83.4 84.3 5.6 (0.9) Academic support 9.4 9.5 10.1 (0.1) (0.6) Student services 11.1 12.4 13.8 (1.3) (1.4) Public service 1.9 1.7 2.1 0.2 (0.4) Independent operations 0.3 0.2 0.5 0.1 (0.3) Operation and maintenance of plant 17.1 16.0 16.0 1.1 - General administration 13.4 12.9 13.1 0.5 (0.2) General institutional 21.5 22.3 6.3 (0.8) 16.0 Auxiliary enterprises 12.5 10.9 11.9 1.6 (1.0) Scholarship expense 12.5 12.2 6.6 0.3 5.6 Depreciation expense 14.4 7.7 6.4 6.7 1.3

Total Operating Expenses 203.1 189.2 171.1 13.9 18.1

Non-operating expensesInterest on capital asset-related debt 5.8 6.3 6.3 (0.5) - Loss on sale of capital assets - - - - -

Total non-operating revenues 5.8 6.3 6.3 (0.5) - Total expenses 208.9 195.5 177.4 13.4 18.1 Net income before capital contributions 39.3 46.1 41.4 (6.8) 4.7 Capital Contributions - - - - - Increase in net assets 39.3 46.1 41.4 (6.8) 4.7

Net assets at beginning of year 338.2 292.1 250.7 46.1 41.4 Net assets at end of year 377.5$ 338.2$ 292.1$ 39.3$ 46.1$

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Student tuition and

fees, net

25.7%

Sales and service

fees

1.6%

Other operating

revenues

0.8%

Real estate taxes &

CPPRT

43.9%

State

appropriations

16.0%

Federal grants and

contracts

10.8%

Non-governmental

gifts and grants

0.7%

Investment income

0.5%

Other non-

operating revenues

0.0%

Operating and Non-Operating RevenuesFiscal Year 2011


Operating and non-operating revenues total $241.6 million for fiscal year 2011, an increase of $22.8

million over fiscal year 2010. The largest component of revenues is local property taxes comprising

43.9% of total revenues. Revenues from student tuition and fees were $62.0 million in fiscal year

2011 and represent the second largest revenue component at 25.7% of total revenues. Revenues

from state and federal grants totaled $64.9 million in fiscal year 2011 and accounted for 26.8% of

total fiscal year 2011 revenues.

Operating revenues increased by $4.1 million. Revenues were down in chargeback, sales and

service fees and other operating revenues. Tuition and fee revenue was $62.0 million; this was $7.6

million greater than prior year. The FY2010 tuition revenue included a write off of $5.6 million of

uncollectable revenue. Without the uncollectable revenue adjustment tuition revenue year-over-

year would have only been $2.0 million higher. Generally Accepted Accounting Principles

(GAAP) requires colleges to report tuition and fees funded by state and federal financial awards as

non-operating revenues and not as tuition. Student tuition and fees before adjustment were $86.6

million, or $10.5 million or 14% higher than the prior year. The semester credit hours for fiscal year

2011 were 475,595; a decrease of 28,873 hours from fiscal year 2010. Even though semester credit

hours were lower than prior year, tuition and fees exceeded prior year revenues due to an increase in

out-of-district students who pay a higher tuition rate than in-district.

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Sales and service fees were $3.9 million; $2.8 million lower than prior year primarily due to decreases in the College’s Auxiliary Fund program revenues. The Continuing Education program had a decrease in its enrollment for the summer 2010 programs which resulted in a $0.5 decrease in revenue. The Arts Center also had a decrease in revenues of $0.2 due to decreases in the number of performances offered and a decrease in attendance. The bookstore revenue decreased by $0.5 from fiscal year 2010 due to a decrease in the volume of books sold.

Non-operating revenues totaled $173.8 million for the year and were $18.7 million greater than FY2010. This increase is primarily due to higher revenue from property taxes which increased $9.6 million in fiscal year 2011. For the first time in the history of DuPage County assessed valuations declined by approximately 6.0%. Revenues from state and federal grants totaled $64.9 million in fiscal year 2011 and were $10.9 million more than FY2010. The primary reason for the increase in federal grants was an increase in Pell funding in fiscal year 2011.

Expenses:


Total expenses for FY2012 were $208.9 million, an increase of $13.4 million from the previous fiscal year. The two primary categories of expense that increased were Instruction and Depreciation. Instruction category represents all of the direct costs associated with teaching of students and is the largest component of operating expenses, accounting for 43.8% of total operating expenses. Instructional expenses increased $5.6 million over FY2011 primarily due to higher SURS pension expense and termination benefits for retiring employees. SURS pension contributions increased by $5.1 million to $22.6 million in FY2012. The state makes this contribution on behalf of the College. As such the College records an expense and revenue for the in-kind payment made by the State. This expense is then allocated to the different categories based on their prorated share of labor expense. Instruction’s share of SURS pension expense increased by $2.7 million from FY2011.

The College offers termination benefits to retiring employees. During fiscal year 2012, the last year that this benefit is being offered to employees, forty employees put in application for retirement. The retirement benefits for these employees is an increase of $2.6 million, of which $2.2 million was charged to Instruction expense.

Depreciation expense increased $6.7 million from the previous year due to the addition of four new buildings and also building additions which were placed into service during FY2012, the Homeland Security Education Center, Culinary and Hospitality Center, BIC West renovations and the Student Services Center building. The College’s depreciable assets increased $173.6 million,

Change % ChangeFY2011 FY2010 2011-10 2011-10

Student tuition and fees 86.6$ 76.1$ 10.5$ 14%Federal and State Awards (24.6) (21.7) (2.9) 13%

Student tuition and fees, net 62.0$ 54.4$ 7.6$ 14%

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net of disposals of $1.6 million. The other operating expenses were consistent with the prior year as

management continues to contain costs and stay within budget.

Operation and maintenance of plant at $17.1 million represents 8.4% of total operating expenses

and increased $1.1 million from prior year due to more buildings being utilized in FY2012. This

expense includes utilities, security, insurance and all costs necessary to keep the physical

facilities open and ready for use. The costs associated with Student Services such as financial

aid, admissions, records and counseling equaled $11.1 million in fiscal year 2012 and was $1.3

million lower than prior year.

Instruction

43.8%

Academic support

4.6%Student services

5.5%

Public service

0.9%

Independent operations

0.1%

Operation and

maintenance of plant

8.4%

General administration

6.6%

General institutional

10.6%

Auxiliary enterprises

6.2%

Scholarship expense

6.2%

Depreciation expense

7.1%

Operating ExpensesFiscal Year 2012

Instruction

44.1%

Academic support

5.0%

Student services

6.6%Public service

0.9%

Independent

operations

0.1%

Operation and

maintenance of plant

8.5%

General

administration

6.8%

General institutional

11.8%

Auxiliary enterprises

5.8%

Scholarship expense

6.4%

Depreciation expense

4.1%

Operating ExpensesFiscal Year 2011

34

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The following graph shows how the College’s operating expenses by function for the current year and the two previous years ($ in millions).

$-

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

2012

2011

2010

Fiscal Year 2011 Compared to 2010 The College’s total expenses were $195.5 million in fiscal year 2011, an increase of $18.1 million from the prior year. Operating expenses for fiscal year 2011 equaled $189.2 million and were $18.1 million higher than prior year. The largest increase in year-over-year expenses was in General Institution, which increased $16.0 million due to a change in accounting for fringe benefits. Scholarship expense increased $5.6 million primarily due to a $5.0 million increase in Pell awards from fiscal year 2010. Depreciation expense increased by $1.3 million due to a net

35

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increase in depreciable capital assets of $156.2 million, most of which were added late in the fiscal year and therefore did not have a full year depreciation expense. The remaining operating expense categories were lower than the previous year as management continued to enforce cost controls during the year to reduce costs in the event funding from the State did not materialize as anticipated.

As shown in the operating expenses chart, fiscal year 2011 Instruction costs were $83.4 million. This category represents all of the direct costs associated with teaching of students and is the largest component of operating expenses, accounting for 44.1% of tot

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