3.10.2  

The institution provides financial statements and related documents, including multiple measures for determining financial health as requested by the Commission, which accurately and appropriately represent the total operation of the institution.

RATIONALE FOR COMPLIANCE JUDGMENT

Financial statements are prepared on an annual basis and presented to the President of Nashville State Technical Community College (NSCC) for review and submission to the Chancellor of the Tennessee Board of Regents (TBR). The information provided is verified for accuracy by an external audit performed by the State of Tennessee Comptroller's Office, Division of State Audit and conducted in accordance with generally accepted government auditing standards (2004/2005) [1], (2003/2002) [2], (2000/2001)] [3]. The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board (GASB). The annual financial report compiled and presented consists of three required basic financial statements: the Statement of Net Assets (2005-2006) [4], (2004-2005)] [5], (2003-2004) [6]; the Statement of Revenues, Expenses, and Changes in Net Assets (2005-2006) [7], (2004-2005) [8], (2003-2004) [9]; and the Statement of Cash Flows (2005-2006) [10], (2004-2005) [11], (2003-2004) [12]. The management and analysis discussion section of the report presents three years of financial data for comparative purposes. This discussion is prepared and presented in conjunction with the basic financial statements and related note disclosures and provides details of any significant fluctuations.

 The financial statements (2005-2006) [13], (2004-2005) [14], (2003-2004) [15] presented provide a comprehensive, entity-wide perspective of the institution's assets, liabilities, net assets (restricted and unrestricted), operating revenues and expenses, non-operating revenue and expenses, and changes in net assets. In addition, cash flow information is presented as sources and uses from operating activities, non-capital financing activities, capital and related financing activities and investing activities.  Supporting schedules to the financial statements are provided according to NACUBO classifications.

In addition to the biannual state audits, the College contributes to the effectiveness of controls that management is responsible for establishing and maintaining through the internal audit function [16] The internal audit office reports to the College’s President and the Director of Internal Audit at the Tennessee Board of Regents.

The Nashville State Community College Foundation is a separate, tax-exempt entity organized and operated primarily as a fund-raising organization to supplement the resources that are available to the College in support of its programs. Since the majority of resources held and invested by the Foundation are restricted for use by or for the benefit of the College, the Foundation is considered a component unit of the College and is discretely presented in the College's financial statements. This information is audited in conjunction with the College's audit by the State of Tennessee Comptroller's Office, Division of State Audit.

Monthly accounting reports of detailed operational transactions and summary payroll transactions are prepared and distributed electronically via EPrint.  Monthly labor distribution reports that list detailed payroll transactions are distributed to the departments in paper format by the Payroll Office. Departments are required [17] to reconcile the monthly reports to departmental records and notify the accounting department of any necessary adjustments on a monthly basis.  All departments have online real-time inquiry to the accounting system.  Departmental access allows budget managers and users to view detailed transactions as well as summary information.  When making a purchase, an employee’s authorization to purchase is established through the Employee Service Access Authorization form [18].  Employees who are authorized to purchase must obtain additional chain of command approval from the Dean of the Division for purchases that do not exceed $1,000 [19]    Purchases greater than $1000 require the additional approval of the Vice President of the Division.  Purchases greater than $10,000 require additional approval by  the Vice President of Finance and Administration.  In addition to the required chain of command approvals established, oversight for operational expenditures is provided by the Purchasing Office, who is responsible for reviewing account balances prior to processing requisitions, and the Office of Budget who reviews all accounts on a monthly basis to ensure unauthorized deficit spending does not occur.  Oversight for personnel expenditures is the responsibility of personnel in the Office of Human Resources, who ensure that funded positions exist prior to authorizing employment contracts.

The accounting system used by the college through June 30, 2006 was the SCT Plus system; effective January 1, 2006, the College converted to the SCT Banner payroll system.  The Banner Finance system and Banner Self-Service were implemented July 1, 2006. The Banner system will better serve the College's needs, will provide a greater level of automated oversight, and access to more comprehensive information,  thus allowing more detailed and customized financial reporting capabilities.  This will provide for more efficient management of College resources.