BOARD OF EDUCATION MONITORING REPORT
January 10, 2007
Presented by Greg Morgan, AVP for Finance and Budget
POLICY TYPE: EXECUTIVE DIRECTIONS
POLICY TITLE: FINANCIAL PLANNING AND BUDGETING
POLICY NUMBER: A.040
ADOPTED: November 9, 1998
REVISED: April 12, 2000
REVISED: January 14, 2004
Financial planning for any fiscal year or the remaining part of any fiscal year shall reflect the Board's end priorities, avoid fiscal jeopardy, and shall be derived from a multi-year plan.
Accordingly, the President shall assure budgeting that:
1. Complies with Oregon Local Budget Law.
The June 30, 2006 audit report, on file in the College Operations Office, verifies full compliance with Oregon Local Budget Law.
2. Contains sufficient information to enable credible projections of resources and expenditures as presented in the Budget Document in accordance with Oregon Local Budget Law.
The college received the Distinguished Budget Presentation Award for its fiscal year 2005-06 budget document from the Government Finance Officers Association of the United States and Canada (GFOA). In order to receive the award, the college satisfied nationally-recognized guidelines for effective budget presentation. The guidelines are designed to assess how well the budget serves as a policy document, a financial plan, an operations guide and a communications device. Lane’s budget was rated proficient in all four catagories.
Additionally, comments by the Lane’s independent auditors in the fiscal year 2005-06 Comprehensive Annual Financial Report state:
"In connection with our audit, nothing came to our attention that caused us to believe the College was not substantially in compliance with: ORS 294.305 to 294.565 in preparation and adoption of its budget for the fiscal years ending June 30, 2006 and June 30, 2007, and the execution of its budget for the fiscal year ended June 30, 2006."
3. Discloses planning assumptions.
Budget assumptions used in budget development are:
a. Developed by the Budget Office
b. Reviewed and approved by the Finance and College Councils
c. Reviewed and approved by the President
d. Reviewed and approved by the Board
e. Posted to the budget development web site
Budget assumptions used in the fiscal year 2006-07 budget process were developed following the above guidelines.
4. Limits expenditures in any fiscal year to conservatively projected resources for that period.
Lane conservatively projects resources through its budget development process. Expenditure budgets are developed so that they do not exceed the budgeted revenue. The budget checking option has been turned on in Banner, Lane’s administrative software. This prevents departments for making purchase orders or journal vouchers where there is insufficient budget available. To certify compliance, please refer to the college’s June 30, 2006 audit report presented to the Board in December 2006. Schedules 1 through 8, found on pages 30 through 40, show that no expenditures exceeded budget.
5. Maintains current assets at any time to at least twice current liabilities.
At June 30, 2006 the College’s current assets of $21.1 million were sufficient to cover current liabilities of $15.6 million. This represents a current ratio of 1.36 representing a slight decrease from 1.4 in last year’s report but is not in compliance with board policy. Compliance would have required additional current assets of $10.1 million.
6. Complies with budget and financial policies contained in Section E.
See Appendix A.
