INDEPENDENT AUDITOR'S COMMENTS

• ORS Chapter 295 regarding collateral securing depository balances,
• ORS 294.035 regarding the investment of surplus public funds, the legal requirements relating to debt,
• ORS 294.305 to 294.565 in the preparation and adoption of its budget for the fiscal years ending June 30, 2003 and June 30, 2004, and the execution of its budget for the fiscal year ended June 30, 2003,
• ORS Chapter 279 in the awarding of public contracts and the construction of public improvements, the appropriate laws, rules and regulations pertaining to programs funded wholly or partially by other governmental agencies,

except as follows:

• As discussed in Note 8 to the financial statements, the College overexpended appropriations for certain funds
•  The College exceeded its collateral coverage in one institution for several days during the year.

However, it should be noted that our audit was not directed primarily toward obtaining knowledge of noncompliance with such requirements.

Additionally, we make the following comments:

• The accounting records are generally adequate for the needs of the College.
• We have reviewed the College's insurance and fidelity bond coverage for compliance with legal requirements. Since we are not experts in insurance matters, we make no representation as to the adequacy of such coverage.

The courteous assistance and cooperation extended to us by employees and officials of the College during the course of the audit are sincerely appreciated