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SANTA ANA COLLEGE FOUNDATION(A California Nonprofit Corporation)NOTES TO FINANCIAL STATEMENTSJUNE 30, 2015 AND 2014Contributions, including unconditional promises to give, are recognized as revenues in the period received.Conditional promises to give are not recognized until they become unconditional, that is, when the conditions onwhich they depend are substantially met. Contributions of assets other than cash are recorded at their estimatedfair value at the time of the gift.Comparative Financial InformationComparative financial information for the prior year has been presented for additional analysis. Certainreclassifications may have been made to conform with the current year presentation.Donated Assets, Services, and FacilitiesThe Foundation records the value of donated assets and facilities when there is an objective basis available tomeasure their value. Donated facilities are reflected as support in the accompanying statements at their estimatedvalues at date of donation and fair market value of facilities for the year. Donated assets are capitalized at thestated donated value and depreciated in accordance with Foundation policies, unless they are passed through tothe College.Use of EstimatesThe preparation of financial statements, in conformity with accounting principles generally accepted in the UnitedStates of America, requires management to make estimates and assumptions that affect reported amounts of assetsand liabilities at the reporting date, and revenues and expenses during the reporting period. Actual results coulddiffer from those estimates.Income TaxesThe Foundation is a nonprofit public benefit corporation that is exempt from income taxes underSection 501(c)(3) of the Internal Revenue Code and classified by the Internal Revenue Service as other than aprivate foundation and qualifies for deductible contributions as provided in Section 170(b) (A) (vi). It is alsoexempt from State franchise and income taxes under Section 23701(d) of the California Revenue and TaxationCode.The Foundation has adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification(ASC) Topic 740 that clarifies the accounting for uncertainty in tax positions taken or expected to be taken on atax return and provides that the tax effects from an uncertain tax position can be recognized in the financialstatements only if, based on its merits, the position is more likely than not to be sustained on audit by the taxingauthorities. Management believes that all tax positions taken to date are highly certain and, accordingly, noaccounting adjustment has been made to the financial statements.The Foundation's Federal informational tax returns for the years ended June 30, 2012, 2013, and 2014, are open toaudit by the Federal authorities. California State informational returns for the years ended June 30, 2011, 2012,2013, and 2014, are open to audit by State authorities.-8-

SANTA ANA COLLEGE FOUNDATION(A California Nonprofit Corporation)NOTES TO FINANCIAL STATEMENTSJUNE 30, 2015 AND 2014Cash and Cash EquivalentsCash and cash equivalents consist of cash held in checking and money market accounts and certificates of depositwith maturities of less than 90 days. The Foundation maintains cash balances in financial institutions which areinsured up to 250,000. At June 30, 2015 and 2014, the Foundation had cash balances of 5,215,097 and 141,928, respectively, held in financial institutions in excess of Federal depository insurance coverage. As ofJuly 30, 2015, the Foundation transferred 2,750,000 from the cash account into their investment account.For purposes of the statement of cash flows, the Foundation considers all unrestricted highly liquid investmentspurchased with an initial maturity of three months or less to be cash equivalents.InvestmentsInvestments in marketable securities with readily determinable fair values are presented at their fair values in thestatements of financial position. Unrealized gains and losses are included in the change in net assets. Investmentincome and gains restricted by a donor are reported as increases in unrestricted net assets if the restrictions aremet (either by passage of time or by use) in the reporting period in which the income and gains are recognized.Property and EquipmentFor equipment, the Foundation capitalization policy includes all items with a unit cost of 1,000 or more and anestimated useful life of greater than one year. Depreciation for equipment and leasehold improvements iscomputed on a straight-line basis over an estimated useful life of three to five years.Functional Allocation of ExpensesThe costs of providing various programs and activities have been summarized on a functional basis in thestatement of functional expenses. Accordingly, based upon management's estimates, certain costs have beenallocated among the programs, support services, and fundraising activities.NOTE 2 - RESTRICTED NET ASSETSTemporarily restricted net assets consist of the following at June 30, 2015:ScholarshipsStudent assistanceTitle V endowment grantTotal Temporarily Restricted Net Assets-9- 3,299,7041,627,085691,3275,618,116

SANTA ANA COLLEGE FOUNDATION(A California Nonprofit Corporation)NOTES TO FINANCIAL STATEMENTSJUNE 30, 2015 AND 2014Temporarily restricted net assets consisted of the following at June 30, 2014:ScholarshipsStudent assistanceTitle V endowment grantTotal Temporarily Restricted Net Assets 3,129,6481,933,201687,3465,750,195NOTE 3 - INVESTMENTSInvestments are presented at fair value in the financial statements and are composed of the following atJune 30, 2015:AdjustedCost 531,5722,325,5022,370,1241,573,845 6,801,043Certificates of depositBondsEquity securitiesOther assetsFair MarketValue 531,5722,292,8801,885,5981,949,874 6,659,924UnrealizedGain (Loss) (32,622)(484,526)376,029(141,119) Investments are presented at fair value in the financial statements and are composed of the following atJune 30, 2014:AdjustedCost 273,4641,418,8343,305,167745,863 5,743,328Certificates of depositsEquity securitiesOther fixed incomeAlternative-10-Fair MarketValue 273,4641,608,4613,342,022776,991 6,000,938UnrealizedGain 189,62736,85531,128257,610

SANTA ANA COLLEGE FOUNDATION(A California Nonprofit Corporation)NOTES TO FINANCIAL STATEMENTSJUNE 30, 2015 AND 2014The following schedule summarizes the investment return and its classification in the statement of activities forthe years ended June 30, 2015 and 2014:Realized gains on investmentsUnrealized loss on investmentsInterest and dividendsTotal Investment IncomeInvestment expensesTotal Investment Income, Net of Expenses Realized gains on investmentsUnrealized gain on investmentsInterest and dividendsTotal Investment IncomeInvestment expensesTotal Investment Income, Net of Expenses 01467,965257,610175,873501,448(45,935)455,513NOTE 4 - INVESTMENT SECURITIESMarket Value of Financial Assets and LiabilitiesThe Foundation determines the fair market values of certain financial instruments based on the fair valuehierarchy established in Statement of Financial Accounting Standards, Fair Value Measurements, which requiresan entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuringfair value. The standard describes three levels of inputs that may be used to measure fair value.The following provides a summary of the hierarchical levels used to measure fair value:Level 1 - Quoted prices in active markets for identical assets or liabilities that the reporting entity has theability to access at the measurement date. Level 1 assets and liabilities may include debt and equity securitiesthat are traded in an active exchange market and that are highly liquid and are actively traded in over-thecounter markets.Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;quoted prices in markets that are not active; or other inputs that are observable or can be corroborated byobservable market data for substantially the full term of the assets or liabilities.Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to thefair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value isdetermined using pricing models, discounted cash flow methodologies, or similar techniques, as well asinstruments for which the determination of fair value requires significant management judgment orestimation.-11-

SANTA ANA COLLEGE FOUNDATION(A California Nonprofit Corporation)NOTES TO FINANCIAL STATEMENTSJUNE 30, 2015 AND 2014Assets and Liabilities Recorded at Fair Value on a Recurring BasisThe following table presents the balances of the assets measured at fair value on a recurring basis as ofJune 30, 2015. The Foundation did not have any liabilities measured at fair value on a recurring basis as ofJune 30, 2015.ASSETSCertificates of depositBondsEquity securitiesOther assetsTotalLevel 1 531,572 531,572Level 2 2,292,8801,885,5981,949,874 6,128,352Total 531,5722,292,8801,885,5981,949,874 6,659,924The following table presents the balances of the assets measured at fair value on a recurring basis as ofJune 30, 2014. The Foundation did not have any liabilities measured at fair value on a recurring basis as ofJune 30, 2014.ASSETSCertificates of depositEquity securitiesOther fixed incomeAlternativeTotalLevel 1273,464 273,464 Level 2 1,608,4613,342,022776,991 5,727,474Total273,4641,608,4613,342,022776,991 6,000,938 NOTE 5 - PROPERTY AND EQUIPMENTProperty and equipment consisted of the following as of June 30, 2015 and 2014:2015Depreciable AssetsLeasehold improvementsFurniture and equipment Accumulated depreciationTotal Depreciable Assets 32,7648,73041,494(27,536)13,9582014 Depreciation expense for the years ended June 30, 2015 and 2014, was 7,582 and 6,584, respectively.-12-32,7646,31939,083(19,954)19,129

SANTA ANA COLLEGE FOUNDATION(A California Nonprofit Corporation)NOTES TO FINANCIAL STATEMENTSJUNE 30, 2015 AND 2014NOTE 6 - TRANSFERS BETWEEN FUNDSDuring the years ended June 30, 2015 and 2014, management reviewed original donor instructions anddetermined that various donations in the amount of 47,541 and 7,550, respectively, had been classifiedincorrectly, and transfers were made to properly move them to the correct fund.NOTE 7 - ENDOWMENT GRANTThe District provided the Foundation with an endowment grant, which was awarded by the U.S. Department ofEducation in the fiscal year ended June 30, 2003. The grant was a Title V, Hispanic Serving Institution Grant andits purpose was to expand educational opportunities for, and improve the academic attainment of, Hispanicstudents, and expand and enhance the academic offerings, program quality, and institutional stability of collegesthat are educating Hispanic students. The Foundation received 300,000 over a five-year period endingJune 30, 2010, upon certification that matching funds from acceptable resources were met. The corpus of theendowment was to be invested over a period of twenty years, and the Foundation may not spend more than50 percent of the aggregate income earned in years six through twenty for allowable expenses. No earnings wereallowed to be spent in years one through five. At the end of twenty years, the Foundation may use the corpus forany educational purpose.NOTE 8 - RELATED PARTY TRANSACTIONSSanta Ana CollegeSanta Ana College donates administrative services to the Foundation. Salaries and benefits for the ExecutiveDirector, administrative staff, and other services are paid primarily by the District; however, a small portion of theDirector's salary is paid for by the Foundation. Accordingly, the Foundation received 280,974 and 264,905from the District for salaries and benefits for the years ended June 30, 2015 and 2014, respectively, which hasbeen reflected in the financial statements as donated salaries. In addition, the District provides office space foremployees who perform services for the Foundation at no charge. The donated facilities for the fiscal years 2015and 2014 amounted to 19,705 and 18,608, respectively, which has been reflected in the financial statements asdonated facilities.-13-

SANTA ANA COLLEGE FOUNDATION(A California Nonprofit Corporation)NOTES TO FINANCIAL STATEMENTSJUNE 30, 2015 AND 2014NOTE 9 - DONOR DESIGNATED ENDOWMENTSEndowment net asset composition by type of fund as of June 30, 2015, is as follows:TotalEndowmentFunds 691,327Donor-restricted endowment fundsChanges in endowment net assets as of June 30, 2015, are as follows:Total NetEndowmentFunds 687,34624,0793,100(1)(23,197) 691,327Endowment net assets, beginning of yearInvestment incomeNet appreciationTransfers of investment to unrestrictedAmounts appropriated for expendituresEndowment net assets, end of yearEndowment net asset composition by type of fund as of June 30, 2014, is as follows:TotalEndowmentFunds 687,346Donor-restricted endowment fundsChanges in endowment net assets as of June 30, 2014, are as follows:Total NetEndowmentFunds 634,51617,98479,620(37,851)(6,923) 687,346Endowment net assets, beginning of yearInvestment incomeNet appreciationTransfers of investment to unrestrictedAmounts appropriated for expendituresEndowment net assets, end of year-14-

SANTA ANA COLLEGE FOUNDATION(A California Nonprofit Corporation)NOTES TO FINANCIAL STATEMENTSJUNE 30, 2015 AND 2014NOTE 10 - SUBSEQUENT EVENTSThe Foundation's management has evaluated events or transactions that may occur for potential recognition ordisclosure in the financial statements from the balance sheet date through December 3, 2015, which is the date thefinancial statements were available to be issued. Management has determined that there were no subsequentevents or transactions that would have a material impact on the current year financial statements.-15-

Vavrinek, Trine, Day & Co., LLPCertified Public AccountantsVA L U E T H E D I F F E R E N C EINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERSBASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDSThe Board of DirectorsSanta Ana College FoundationSanta Ana, CaliforniaWe have audited, in accordance with the auditing standards generally accepted in the United States of Americaand the standards applicable to financial audits contained in Government Auditing Standards issued by theComptroller General of the United States, the financial statements of Santa Ana College Foundation(the Foundation) (a California nonprofit corporation) as of and for the years ended June 30, 2015 and 2014, andthe related notes to the financial statements, which collectively comprise Santa Ana College Foundation's basicfinancial statements, and have issued our report thereon dated December 3, 2015.Internal Control Over Financial ReportingIn planning and performing our audit of the financial statements, we considered Santa Ana College Foundation'sinternal control over financial reporting (internal control) to determine the audit procedures that are appropriate inthe circumstances for the purpose of expressing our opinions on the financial statements, but not for the purposeof expressing an opinion on the effectiveness of Santa Ana College Foundation's internal control. Accordingly,we do not express an opinion on the effectiveness of Santa Ana College Foundation's internal control.A deficiency in internal control exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent, or detect and correct,misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internalcontrol, such that there is a reasonable possibility that a material misstatement of the Foundation's financialstatements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is adeficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yetimportant enough to merit attention by those charged with governance.Our consideration of internal control was for the limited purpose described in the first paragraph of this sectionand was not designed to identify all deficiencies in internal control that might be material w

SANTA ANA COLLEGE FOUNDATION (A California Nonprofit Corporation) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 AND 2014-7-NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Activities Santa Ana College Foundation (the Foundation) is a nonprofit organization founded in 1968 for the purpose of