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11/2/2020BY THE NUMBERSStandard 7 and BeyondPresented By:Billy L. ClarkDelta College of Arts & Technology, et al.bclark@deltacollege.comThe Importance of Communication1
11/2/2020 SometimesI’m just not connecting Ifyou are in this for the MONEY, therewill NEVER be enough Ifyou are in this for the STUDENT, therewill ALWAYS be enough Thegoal at our schools is to have apositive impact on every person.WHY DO WE DO THIS?2
11/2/2020 Second Generation – started at 10 years of age 7 Campuses and 5 OP ID numbers COE, NACCAS, ACCSC (and ACICS-20 years ago) 2-3 COE visits per year for the last 20 years or so Most importantly, I am a resident of Baton Rouge andwant to have a good reputation Married 36 years and have 8 adult children, 2 son-inlaws, and 3 grandchildrenWHO AM I? Standard 7 Checksheets-2020 Refund Policy Worksheet-2020 Definitions-Handbook of Accreditation: “AuditedFinancials”-Pg 81, “Contingent Liability”-Pg 83and “Default Management Plan”-Pg 84 Hopefully lots of Practical ApplicationWHAT WILL BE COVERED INTHIS SESSION3
11/2/2020 Practical Applications Simple Tools & Strategies Timely Information Gain Control Forecasting Compliance No Findings!GOALS FOR THIS SESSIONPOLL QUESTION – 1 AND 24
11/2/2020UPDATESCOE Alert 6 Revised – June 13, 2020UPDATESAudit Needs & COE Financial Questionnaire5
11/2/2020STANDARD 7-#1 QUALIFIEDNot to be confused with Standard 7-#9Qualified – Not necessarily the CEO orowner or bookkeeper and for sure not theCPA that does your year end financials.But whoever it is, make sure you candocument what makes them qualified tooversee the financial and businessoperations of the institution.STANDARD 7-#2 KEYSMaintained: facilitate timely analysisClosely Related to Standard 7-#5 and 7-#6 Financial Records Maintained ANALYZED!!! Timely What Financial Records? Who Maintains? Who Analyzes? What is Timely?6
11/2/2020STANDARD 7-#2, 5, 6 CONSIDERATIONS Accounting Software-Income Statement& Balance SheetCash Position & ProjectionsFuture Starts ReportAccounts ReceivableCollections ReportsDeposit Reports90/10 Status & What If?Composite ScoreDefault Rates – Now & ProjectionsStudents Paying Down Their DebtGE – Debt to Earnings RatioIncomeStatementPage 17
11/2/2020IncomeStatementPage 28
11/2/2020Future Starts Spreadsheet Page OneFuture Starts Spreadsheet Page Two9
11/2/2020POLL QUESTION - 390/10 Tracking Report10
11/2/2020AR-Current Students – Weekly and 1st of the MonthAR-Future Starts– Weekly and 1st of the Month11
11/2/2020Deposit LogCash/Institutional Loans Collection Report12
11/2/2020STANDARD 7-#3 FISCAL RESPONSIBILITY What does responsible financial management looklike? What are sufficient funds to: Maintain Quality Educational Programs? Complete the Education of All Students Enrolled? What documentation can you use? Ideas – Audited Financials and Title IV evidencingcompliance; Budget; current cash on hand plusaccounts receivable; timeliness of reviewing suchdata Other ideas?STANDARD 7-#4 STRATEGIC PLANNING“The institution “considers” financial resources as abasis for strategic planning.”Documentation might include pages from yourstrategic plan considering financial resources forvarious objectives, strategies, or benchmarks. New programs (equipment, curriculadevelopment) Equipment Replacement Facility Improvement/Expansion13
11/2/2020POLL QUESTION - 4STANDARD 7-#5 AND 7-#6“ uses adequate auditing and budgetary controls andprocedures”“ exercises proper management, financial controls, andbusiness practices” Budgeting – Cash, Accounts Receivable, Income,Expenses, Starts, Drops, Grads Simplest Income Projection Tool – Tuition divided by program length multiplied bynumber of paying students in that program That can be adjusted by the percent of tuition youactually expect to receive.14
11/2/2020Simple Revenue Projection ToolSTANDARD 7-#5 AND 7-#6 Budgeting Income and Expenses Use last year’s income statement as a baseline tobudget for next year. Budget starts in the same manner – compareprevious years to project this year’s Integrate Starts forecasts into Budget using Exceltools to allow for “what if?” planning Using your school’s retention rates, compute agoal for monthly census by program andexperiment15
11/2/2020POLL QUESTION - 5Master Starts Budget16
11/2/2020Starts Budgetand TrackingDetail byMajor and byStart DateMaster Budget – Starts & Revenue Projection17
11/2/2020IncomeStatement BudgetProjection Page 1IncomeStatement BudgetProjection Page 2118
11/2/2020STANDARD 7-#5 AND 7-#6Controls, Procedures, proper management, financial controls,and business practices Controls and Procedures Might Include: Purchase order system Inventory for supplies & re-order points Payables ManagementAccountability and Separation of Duties Who signs checks, makes deposits, collectsreceipts, etc. Bank Account Reconciliation – Fed Funds andGeneral FundSTANDARD 7-#7Employee Dishonesty Bond or InsuranceSTANDARD 7-#8Financial Aid Programs are capably administeredand accurately documented. SFA Audit Servicer or In-House – describe How are students awarded financial aid? How are financial records kept for each student? Document all processes - samples19
11/2/2020STANDARD 7-#9 - QUALIFIED“Qualified personnel are responsible for proper record-keeping,reporting, and auditing” Qualified – don’t just describe who does what, butdocument what makes them qualified – couldinclude resume’; employee evals, clean SFA audit,etc. Record keeping – bursar, payables, payroll,financial aid officers, etc. Reporting – probably some of the same folks Auditing – for sure your 3rd party auditor and anyinternal folks that may check for accuracySTANDARD 7-#10 – TELL COEReport Contingent Liabilities to COE-defined in Glossary ofHandbook of Accreditation Lawsuits Adverse Tax Court Decisions Letter of Credit Required by US Dept of EdAny other adverse action creating a potentialliabilitySTANDARD 7-#11 – TELL COENotify COE within 5 days of your receiving notification20
11/2/2020STANDARD 7-#12 COMPLIANCE WITH HEADocumentation would definitely include the following: Program Participation Agreement - PPA Eligibility and Certification Approval Report – ECAR Easy Audit Submission Confirmations Your current Official and Draft Cohort Default Rates Audit Benchmarks: Currently Composite Score of 1.5 or greater – include worksheet inAudit 90/10 CalculationSTANDARD 7-#13Student Loan Repayment Program Default Management Plan containing all elementsfrom Standard 10-3 and Definition in the Glossaryof the Handbook for Accreditation Default Management Plan is a part of this plan, notthe complete plan Make sure to document compliance with allrequired elements – student loan information,counseling, monitoring, and cooperation withlenders – Entrance & Exit Counseling, Entry & ExitInterviews, etc.21
11/2/2020STANDARD 7-#14Inform Students of Ethical Responsibilities regardingfinancial assistance – Be sure to document what youdo to promote honesty Don’t lie on your FAFSA – how do youcommunicate that to your students Make sure students know what loans they have –how much and repayable to whom IT is a LOAN – not a grant Documentation might include Awards Letter,Delinquency Letters with Consequences of Default,etc.STANDARD 7-#15Financial Stability Requirements for PUBLIC Schools Usually an audit – if the school uses any Title IV –Pell Grants or Student Loans, the school is requiredto submit a Financial Audit and a Financial StudentAid Audit to the US Dept of Ed Annually Since most of us are not familiar with publicaccounting practices, it would be most helpful toindicate: Sources of Funds and Revenues Evidence of Fiscal Stability22
11/2/2020STANDARD 7-#16 TO 7-#18Financial Stability Requirements for NON-PUBLICSAnnual Audit Submitted to US Dept of Ed Page 81, 2020 Standards of Accreditation GAGAS Composite Score of at least 1.5 – must includeworksheet in the audit Can’t be greater than 3.090/10 Compliance Should be prepared by someone other than CPAconducting the audit Don’t include fund definitions in CASH that are not usuallyconsidered educational revenue – interest income, otherincome, etc.STANDARD 7-#19 TO 7-#24 REFUND POLICYBY FAR THE MOST FINDINGS!!! Standard 7-#19 to #23 apply to ALL – public, nonprofit and proprietary. That’s the way it reads to me 7-#21 - One of the most common findings –“Refunds made w/o requiring a request fromstudent” – If your policy doesn’t have thisstatement, that’s a finding. 7-#23, Institution cannot keep more than 100 for astudent that does not start class. Applies to ALL!!!23
11/2/2020STANDARD 7-#19 TO 7-#24 REFUND POLICYBY FAR THE MOST FINDINGS!!! #25 Only exempted from Refund Policy Worksheet IF adifferent policy is MANDATED by a non-publicinstitution’s licensing agency or a public institution’sgoverning board APPROVED BY COE!!! Refund Policy Worksheet – last item: Requiresdocumentation for any deviations that are mandatedby state licensing board or public institution’sgoverning board. AND APPROVED BY COE per 2020Policies & ProceduresSTANDARD 7-#19 TO 7-#24 REFUND POLICYBY FAR THE MOST FINDINGS!!! Refund Policy Worksheet 1.a. – another commonfinding – most tell me we don’t do that, but withonline admissions applications, you may?Refund 100% if institution cancels class. Refund Policy Worksheet 3. – another commonfinding – in my opinion, Just add the statement toyour refund policy. With Virtual Admissions andFinancial Aid, you may have students enroll andpay prior to visiting your campus.24
11/2/2020STANDARD 7-#19 TO 7-#24 REFUND POLICYMy Advice to Ensure Compliance Make sure every item is in your policy! Do the Refund Policy Worksheet yourself as anexhibit for the team. Cross reference to yourpolicy and label Cross reference Standard 7 items #19-#23 withyour refund policy and label for each exhibit. Have documentation “Mandating” deviations All deviations APPROVED BY COE per 2020 Policies& ProceduresSO REALLY, WHY DO WE DO THIS!25
11/2/2020Who is your Paul?26
11/2/2020BY THE NUMBERSStandard 7 and BeyondPresented By:Billy L. ClarkDelta College of Arts & Technology, et al.bclark@deltacollege.com27
11/2/2020 3 WHO AM I? Second Generation –started at 10 years of age 7 Campuses and 5 OP ID numbers COE, NACCAS, ACCSC (and ACICS-20 years ago) 2-3 COE visits per year for the last 20 years or so Most importantly, I am a resident of Baton Rouge and want to have a good reputation Married 36 years and h
