V/^J CITY COLLEGES"
i^^of CHICAGO
December 20, 2022
Dear Colleague:
City Colleges of Chicago is pleased to present the Annual Comprehensive Financial Report (ACFR) for its Fiscal Year 2022. This comprehensive report reflects detailed information and statistics. Additional copies of these reports are available from the Office of Finance at 773-487-3743 or on our website at ReportSTaspx.
Bruce Gename, Associate Controller City Colleges of Chicago - Finance Department 3901 South State Street, Room 216 Chicago, Illinois 60609
Enclosure: City Colleges of Chicago Board Report 34661
Chicaqo City Clerk-Council H\v,
2022 DEC 20ph1:55
3901 S. State St. I Chicago, IL 60609 I 773-COLLEGE I www.ccc.edu
34661
ADOPTED - BOARD OF TRUSTEES COMMUNITY COLLEGE DISTRICT NO. 508 DECEMBER 1, 2022
BOARD OF TRUSTEES OF COMMUNITY COLLEGE DISTRICT NO. 508 COUNTY OF COOK AND STATE OF ILLINOIS
RESOLUTION TO TRANSMIT FISCAL YEAR 2022 ANNUAL AUDIT OFFICE OF FINANCE
WHEREAS, pursuant to Section 7-24 of the Illinois Public Community College Act, "the board shall yearly, and may as often as necessary, appoint certified public accountants to examine thc business methods and audit the accounts of the board, and to submit a report of that examination and audit, together with any of their recommendations as to changes in business methods of the board or any of its departments, officers or employees That report shall be made to the mayor, the city council and thc board and be filed in the records of the board";
WHEREAS, the City Colleges of Chicago audit for Fiscal Year 2022 was completed by RSM US, LLP which found that there was a reasonable basis for rending an unmodified opinion that the District's financial statements were fairly presented in conformity with Generally Accepted Accounting Principles (GAAP); and
WHEREAS, the Office of Finance has reviewed the completed audit for Fiscal Year 2022;
NOW THEREFORE BE IT RESOLVED that RSM US, LLP has submitted thc Fiscal Year 2022 audit and the Board authorizes the transmission of said audit to the Mayor and thc City Council with a copy filed in the records of the Board.
December 1,2022- OFFICE OF FINANCE
CITY COLLEGES"
of CHICAGO COMMUNITY COLLEGE DISTRICT NO. 508
Chicago, Illinois
ANNUAL COMPREHENSIVE FINANCIAL
REPORT
For the fiscal year ended June 30, 2022
Prepared by: Office of Finance
Walter E. Massey, Ph.D., Chair Juan Salgado, Chancellor
Board of Trustees of Community College District No. 508
County of Cook and State of Illinois
Lori E. Lightfoot, Mayor City of Chicago, Illinois
Board of Trustees
Walter E. Massey Ph.D., Board Chair
Elizabeth Swanson, Vice Chair
Peggy A. Davis, Secretary
Laritza Lopez, Trustee
Karen Kent, Trustee
Darrell A. Williams, Trustee
Deborah H. Telman, Trustee
Neith Tiri-Xi'ui, Student Trustee
Bonnie Phillips, Chief Advisor to the Board of Trustees
Vacant, Assistant Board Secretary
District Office 180 N. Wabash Suite 200
Chicago, Illinois 60601
CITY COLLEGES* (312)553-2500 of CHICAGO www.ccc.edu
Administrative Officers
Juan Salgado, Chancellor
Dr. Mark Potter,
Provost & Chief Academic Officer Veronica Herrero,
Chief of Staff and Strategy Maribel Rodriguez,
Chief Financial Officer Karla Mitchell Gowen,
General Counsel Jerrold Martin,
Chief Information Officer Carol Dunning,
Chief Talent Officer Lamesha Smith,
Inspector General Gina Gentile,
Director of Internal Auditing Eric Lugo
Senior Advisor
Dr. Janine Janosky,
President, Richard J. Daley College Dr. Daniel Lopez,
President, Harold Washington College Dr. Katonja Webb Walker,
Interim President, Kennedy-King College David A. Sanders,
President, Malcolm X College Kimberly Hollingsworth,
President, Olive-Harvey College Dr. Shawn L. Jackson,
President, Harry S. Truman College Dr. David Potash,
President, Wilbur Wright College
CITY COLLEGES*
of CHICAGO
Office of the Chancellor
Dear City College's Community:
The I-Y2022 Annual Comprehensive Financial Report (ACFR] reflects a year of recovery from the COVID-19 pandemic and a dedication to achieving our strategic vision of serving as the city's most accessible higher education engine of socioeconomic mobility and racial equity.
This ACFR reflects that City Colleges concluded the year with $514.5 million in assets; a four percent (4%) increase over the prior year.
While holding the credit hour rate of $146 level for the sixth straight year, we worked to offer our students and communities the resources to access a quality, affordable education through investments in:
A comprehensive suite of student supports to improve access, retention and completion, such as scholarships, grants, and the Chancellor's Retention Fund
A robust offering of remote, online and in-person learning options
Academic programs that ensure students are prepared for the economic recovery
The Chicago Roadmap, an unprecedented partnership with the Chicago Public Schools, to support students along a seamless path to and through college on the way to their chosen careers
Resources to ensure the continued health and safety of CCC students, faculty and staff as we continue to combat and prevent against a resurgence of COVID-19.
Enhanced marketing and enrollment infrastructure to attract and retain a diverse student body
City Colleges-wide athletics
A modest capital program targeted for in-demand/emerging programs, technology, deferred maintenance, and life safety infrastructure
To support revenues in FY22, City Colleges relied on federal HEERF stimulus funds, taxing to the city levy cap, Tax Increment Financing surplus proceeds from the City of Chicago, and expense management practices focused on achieving continued operational efficiency.
The FY2022 ACFR reflects our efforts to be remain a source of stability and a mechanism for upward mobility for our students and our city.
Juan Salgado
Chancellor, City Colleges of Chicago
Sincerely,
City Colleges of Chicago Community College District No. 508 Annual Comprehensive Financial Report Fiscal year ended June 30, 2022
TABLE OF CONTENTS Schedule/Table Page
INTRODUCTORY SECTION
Transmittal Letter v
Principal Officials xvi
Organization Chart xvii
Cert ificate of Achievement for Excellence in Financial Reporting xviii
FINANCIAL SECTION
Independent Auditor's Report|910|Management's Discussion and Analysis|910|Basic Financial Statements
Statement of Net Position 14
Statement of Revenues, Expenses and Changes in Net Position 15
Statement of Cash Flows 16
Discretely Presented Component Unit
City Colleges of Chicago Foundation
Statement of Financial Position 18
Statement of Activities 19
Notes to the Basic Financial Statements 20
Required Supplementary Information 69
STATISTICAL SECTION (Unaudited) Financial Trends
Components of Net Position A 74
Changes in Net Position B 75
Revenue Capacity
Assessed and Estimated Value of Taxable Property C 76
Property Tax Rates - Direct and Overlapping Governments D 77
Principal Property Taxpayers - Current Year and Nine Years Ago E 78
Property Tax Levies and Collections F 79
Enrollment, Tuition and Fee Rates, Credit Hours, Tuition and
Fee Revenues Generated G 80
i
City Colleges of Chicago Community College District No. 508 Annual Comprehensive Financial Report Fiscal year ended June 30, 2022
TABLE OF CONTENTS Schedule/Table Page
STATISTICAL SECTION (Uiuiuditcd)(Contimicd) Debt Capacity
Ratios of General Debt Outstanding H 81
Direct and Overlapping Long-Term Debt 1 82
Demographic and Economic Information
Demographic and Economic Statistics J 83
Principal Employers K 84
Employee Data L 85
Student Enrollment Demographic Statistics - Credit Hours by Category M 86
Operating Information
Capital Assets Statistics N 87
Miscellaneous Statistics O 88
Community College State Funding P 89
Revenues and Expenditures by Campus Q 90
SPECIAL REPORTS SECTION State Required Reports Section Uniform Financial Statements
All Funds Summary 1 91
Summary of Fixed Assets and Debt 2 92
Operating Funds Revenues and Expenditures All Funds Summary 3 93
Restricted Purposes Fund Revenues and Expenditures 4 94
Current Funds Expenditures by Activity 5 95
Certification of Chargeback Reimbursement for Fiscal Year 2023 (Unaudited) 6 96
Independent Accountant's Report on Schedule of Enrollment Data and Other
Bases on Which Claims are Filed 97
Schedule of Enrollment Data and Other Bases on Which Claims are Filed 7 98
Reconciliation of In-District and Chargeback/Coopcrativc Contractual
Agreement Credit Hours 8 99
Student Residency Verification Process and Summary of Assessed
Valuations (Unexamined) 9 100
City Colleges of Chicago Community College District No. 508 Annual Comprehensive Financial Report Fiscal year ended June 30, 2022
TABLE OF CONTENTS Page
STATE GRANT COMPLIANCE SECTION
Independent Auditor's Report on Audits of Grant Programs Financial Statements 101 Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Grant Program Financial
Statements Performed in Accordance with Government Auditing Standards 104 Grant Program Financial Statements
State Adult Education and Family Literacy Grant Program
Combined Statements of Net Position 106
Combined Statements of Revenues, Expenses and Changes in Net Position 106
Expense Amounts and Percentages for ICCB Grant Funds 107 Early School Leavers Grant Program
Statement of Net Position 108
Statement of Revenues, Expenses and Changes in Net Position 108 Innovation Bridge and Transition Program
Statement of Net Position 109
Statement of Revenues, Expenses and Changes in Net Position 109 Workforce Equity Initiative
Statement of Net Position 110
Statement of Revenues, Expenses and Changes in Net Position 110
Notes to Grant Program Financial.Statements 111
SINGLE AUDIT ACT SUPPLEMENTARY FINANCIAL AND COMPLIANCE REPORT SECTION
Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 1 15
Report on Compliance for the Major Federal Program; Report on Internal Control Over Compliance; And Report on Schedule of Expenditures of
Federal Awards Required by the Uniform Guidance I 17
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City Colleges of Chicago Community College District No. 508 Annual Comprehensive Financial Report Fiscal year ended June 30, 2022
TABLE OF CONTENTS Page
SINGLE AUDIT ACT SUPPLEMENTARY FINANCIAL AND COMPLIANCE REPORT SECTION (continued)
Schedule of Expenditures of Federal Awards 120
Notes to Schedule of Expenditures of Federal Awards 125
Schedule of Findings and Questioned Costs 127
Summary Schedule of Prior Year Audit Findings 134
Corrective Action Plans 139
iv
Introductory Section
CITY COLLECES*
of CHICAGO
Transmittal Letter
November 30, 2022
To Members ofthe Board of Trustees of City Colleges of Chicago, Community College District No. 508:
We are pleased to submit to you the Annual Comprehensive Financial Report of City Colleges of Chicago, Community College District No. 508 (City Colleges or the District), for the fiscal year ended June 30, 2022. It has been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), as set forth by the Governmental Accounting Standards Board (GASB).
City Colleges also maintains its accounts in accordance with guidelines set forth by the Government Finance Officers Association (GFOA), National Association of College and University Business Officers (NACU.BO) and the Illinois Community College Board (ICCB). To more easily account for limitations and restrictions on certain resources, ICCB requires City Colleges to also report by select categories of funds. The financial records of City Colleges are maintained on thc accrual basis of accounting, whereby revenues are recorded when earned and expenses are recorded when incurred. The independent auditor's report of RSM US LLP is included in the financial section ofthis Annual Comprehensive Financial Report.
Responsibility for both the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the management of City Colleges. To thc best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and changes in financial position of City Colleges. All disclosures necessary to enable the reader to gain an understanding of City Colleges' financial activities in relation to its mission have been included.
This letter of transmittal should be read in conjunction with the accompanying Management's Discussion and Analysis, which focuses on current activities, accounting changes, and currently known facts.
PROFILE OF CITY COLLEGES OF CHICAGO
City Colleges is a non-home rule community college district of the State of Illinois, having boundaries coterminous with the City of Chicago. City Colleges is established under and governed by the Illinois Public Community College Act and operates seven colleges offering two-year Associate degrees, occupational certificates, continuing education, customized business-specific training and adult education programs. In accordance with standards established by GASB, City Colleges has included Cily Colleges of Chicago Foundation as a discretely presented component unit.
Ofthe Board's eight members, the seven who vote are appointed by the Mayor ofthe City of Chicago with the approval of the City Council of Chicago. One non-voting student member, selected in accordance with the Illinois Public Community College Act, is elected from one ofthe colleges.
The District currently occupies a land area of approximately 228.5 square miles and serves an estimated population of 2,696,555.
As a large urban school district, our colleges, students and administrators reflect the broad diversity of our city. Our constituents are comprised of many ethnic minorities, working adults, single parents and individuals from low-income backgrounds. City Colleges' District Office and the seven separately accredited colleges are strategically located throughout the City of Chicago.
On Sunday, May 1st, City Colleges of Chicago returned to the Wintrust Arena for the first time since the COVID-19 pandemic and began to celebrate associate degree earners from the graduating classes of 2022, 2021, and 2020. There were two ceremonies, seven colleges, around 1,700 graduates, and countless stories of resilience and success. This in-person event brought excitement and energy from graduates, guests and City Colleges employees alike, featuring engaging speeches, videos, and a traditional marching of graduates.
The total number of degrees, certificates and general education completers credentials awarded in fiscal year 2022 was 7,758 and degrees awarded totaled 3,722. The vision for City Colleges is to transform the District into a world-class institution that not only prepares students to move into higher education, but also ensures that they have the skills necessary for employment.
STRATEGIC GOALS AND STRATEGIES OUR STRATEGIC GOALS
City Colleges of Chicago has outlined a common strategic framework, consisting of six strategic levers and a common set of goals, values, and Key Performance Indicators (KPIs) along with strategic plans, equity plans and strategic enrollment management plans for each college.
VI
A single unifying vision was crafted with input from a cross section of Cily Colleges stakeholders: Cily Colleges' vision is to be recognized as the city's most accessible higher education engine of socioeconomic mobility and racial equity - empowering all Chicagoans to take pari in building a stronger and more just city.
Three transformational goals serve as metrics for the five-year framework:
Achieve unprecedented and equitable retention and completion rates
Be regarded as the smart choice among students, K-12 partners, alumni, partners,
universities and employers
Advance upward mobility among City Colleges students and alumni through our colleges' high-quality pathways
Six levers form the framework for all strategic activities and will steer City Colleges' long-term goals and vision:
STUDENT EXPERIENCE: Our Goal: Create an Exceptional Student Experience
We promise that every experience with City Colleges, from pre-admissions to completion, will be exceptional. Every student will be able to maximize their learning inside and outside the classroom, navigate our institution with ease, make significant progress towards their goals and feel welcome and supported by all City Colleges employees.
EQUITY: Our Goal: Achieve Equity in Student Outcomes
We will become "student-ready" and equitable. Our institution will be designed for all students to thrive—especially those from historically and present-day marginalized communities. We will equip students with the support and resources they need to succeed in the classroom and beyond.
ECONOMIC RESPONSIVENESS: Our Goal: Respond to the Economic Needs ofthe City We will be forward-looking and agile in developing pathways and forging partnerships that unlock transformational career opportunities for City Colleges students and fuel the Chicago workforce with talent that is prepared to meet the needs ofthe economy.
EXCELLENCE: Our Goal: Build a Culture of Excellence
Wc will build a culture of excellence that inspires everyone to become the 'best in class' for our students and community. We hold ourselves accountable to delivering academics, experiences and services of the highest quality. Our faculty and staff will continue to receive professional development across the District to continuously improve their practices.
COLLABORATION: Our Goal: Create a Collaborative and Connected Ecosystem
We will create a more collaborative and connected ecosystem to foster coordination and communication that supports student success. At each college and across the District, we will implement people, data and technology solutions to create holistic best practices with an inclusive approach to problem solving.
HEALTHY: Our Goal: The success of our institution and therefore our students, relies on our ability to operate focusing on long-term growth, stability and sustainability.
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A set of KPIs are used to measure success:
ACCESS: Total unduplicaled enrollment, credit enrollment, adult education enrollment, continuing education enrollment, credit hour production.
MOMENTUM: First year tall to spring retention, fall to spring credit retention, adult education level gains, taking and passing college level English in the first year, taking and passing college level Math in the first year.
COMPLETION: Integrated Postsecondary Education Data System (IPEDS) gratjuation rate, four-year student outcome measures.
MOBILITY: Transfer with degree, economic mobility.
• STUDENT EXPERIENCE: Net promoter score. Targets have been set for the first three years ofthe plan.
Unified strategic initiatives support the success of college plans, and provide the leadership and vision needed to achieve our goals and mission. They identify and support common areas of activity across colleges, shared opportunities for innovation or improvement, and the needed infrastructure to enable or accelerate meeting our goals.
To read the strategic plans in full, go to: www.ccc.edu/strategicplan . FINANCIAL CHALLENGES
City Colleges faces significant financial pressures arising largely from macro-economic and external policy factors, specifically:
COVID-19 Recovery: The pandemic had a significant impact on our students and communities. While City Colleges has taken measures to provide a safe and nurturing environment and has created online, remote and in-person class options, we will need to continue to work to attract those students back to the classroom who did not enroll during the pandemic in order to care for their family, work, or meet other life-sustaining needs.
Enrollment: Coupled with the COVID-19 impact on enrollment, City Colleges continues to work to turn around a downward trend in community college enrollment since the end of the Great Recession in 2010. The fiscal year 2023 budget makes investments in enrollment-related systems and marketing.
Federal Stimulus: The federal stimulus dollars provided significant support that allows City Colleges to continue to make investments to advance its strategic plan. We recognize these dollars must be used by fiscal year 2023 and do not anticipate similar levels of federal grant funds in the near future.
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ECONOMIC CONDITION AND OUTLOOK
In 2021, the Federal Reserve Bank of Chicago (Chicago Fed) reported the economy recovered rapidly although the Covid-19 virus has taken a horrible toll on the health and livelihoods of so many people. This economic progress is remarkable given how dire an event the pandemic has been. Households and businesses showed amazing ingenuity in finding ways to operate safely. Thc health care sector was able to develop and deploy vaccines extremely rapidly. And the government provided crucial support through fiscal and monetary policy actions. By the second quarter of the year, real gross domestic product had surpassed its pre-pandemic level; and despite new waves of infections during thc second half, growth for the year was. a quite robust 5.6 percent and the economy appears lo be entering 2022 with solid momentum.
In the labor market, after peaking near 15 percent early in the pandemic, the unemployment rate fell quickly and ended the year at a very healthy 3.9 percent. By this measure, thc labor market appears to have largely recovered from the effects of the pandemic, and by a number of other measurements, such as unfilled job openings at businesses and the rate at which people quit their jobs for other opportunities, the labor market is quite tight. Flowever, the number of people actually employed is still well below pre-pandemic trends, as many workers who left the labor force during the pandemic have not returned. This is especially true of older workers who retired. As the pandemic recedes further, many of those sitting on the sidelines likely will eventually return to the workforce, though the timing and extent are open questions.
With people avoiding activities requiring closer contact with others, spending patterns shifted considerably over the pandemic. Expenditures for goods rose substantially while spending on services declined. These changes in spending patterns, together with Covid-19 disruptions here and abroad, stressed global supply chains, leading to higher costs and ultimately higher prices for many items. Earlier in the year as activity began to normalize, prices for goods and services that were especially sensitive to the pandemic adjusted higher. However, as the year progressed, strong demand and continuing supply challenges, including shortages of workers in many sectors, resulted in prices rising across a broader range of goods and services. Inflation for the year was an uncomfortably high 5.8 percent. For people whose incomes have not kept pace, higher inflation is a real hardship, and particularly so for those least able to meet the higher costs of essentials such as food, housing, and transportation.
Continued strong growth and a vibrant labor market in thc coming year is expected. As we continue to adapt to and better control the virus, and as market forces work to re-allocate productive resources, we should see supply conditions improve over time and some corresponding reduction in inflationary pressure. Monetary policy must also do its part in controlling inflation. With the economy on a solid footing but inflation clearly too high, it is now time to begin to remove the extraordinary degree of monetary accommodation that the Federal Open Market Committee provided to support the recovery from the pandemic. As is always the case, these adjustments to the stance of monetary policy will depend on economic and financial developments and will be squarely focused on achieving the Federal Reserve's mandated policy goals of maximum inclusive employment and inflation that averages 2 percent over time. (Federal Reserve Bank of Chicago 2021 Annual Report).
IX
The Chicago Fed Survey of Economic Conditions (CFSEC) Activity Index decreased to -51 in July from -31 in June, suggesting that economic growth was well below trend. The CFSEC Manufacturing Activity Index decreased to -56 in July from -30 in June, and the CFSEC Nonmanufacturing Activity Index decreased to -47 in July from -31 in the previous month.
Springfield -The Illinois Department ol* Employment Security (IDES). The unemployment rate
decreased in all fourteen Illinois metropolitan areas in June according to preliminary data released
today by the U.S. Bureau of Labor Statistics (BLS) and the Illinois Department of Employment
Security (IDES). Jobs were up in all metro areas except one. Chicago City unemployment rate
decreased from 9.4% in June 2021 to 5.7% in June 2022. This represent a 3.7% change year-over-
- year (YOY).
Chicago Fed National Activity Index (CF1NA1). Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.27 in July from -0.25 in June. All four broad categories of indicators used to construct the index made positive contributions in July, and all four categories improved from June. The index's three-month moving average, CFNAI-MA3, was unchanged at -0.09 in July. Thc CFNAI Diffusion Index, which is also a three-month moving average, edged up to -0.05 in July from -0.08 in June. Fifty-five of the 85 individual indicators made positive contributions to the CFNAI in July, while 30 made negative contributions. Fifty-five indicators improved from June to July, while 30 indicators deteriorated. Ofthe indicators that improved, 17 made negative contributions.
Production-related indicators contributed +0.16 to the CFNAI in July, up from -0.19 in June. Manufacturing industrial production increased 0.7 percent in July after decreasing 0.4 percent in June. Employment-related indicators contributed +0.09 to the CFNAI in July, up from a neutral value in June. The contribution ofthe personal consumption and housing category to the CFNAI ticked up to +0.01 in July from a neutral value in June.
The CFNAI was constructed using data available as of August 18, 2022.
The fiscal year 2023 budget is balanced. The unrestricted and enterprise operating budget of S325.0 million represents a 1.8 percent increase from the prior fiscal year as we invest for the long-term. At the same time, we plan financially for the residual impact ofthe pandemic with a one percent year to year enrollment increase (fiscal year 2022 to fiscal year 2023).
This budget reflects City Colleges' commitment to providing our students and communities with an exceptional student experience, quality, responsive and affordable education, equitable student outcomes and a collaborative, healthy environment underpinned by a culture of excellence.
Strategic investments will help achieve our vision of being recognized as the city's most accessible higher education engine of socioeconomic mobility and racial equity - empowering all Chicagoans to take part in building a stronger and more just city.
x
Key planned investments include:
A comprehensive suite of student supports to improve access, retention and completion, including financial supports like Completer scholarships. Developmental Education course waivers, Future Ready no-cost short-term programs, the Star Scholarship with expanded eligibility, a new scholarship for CPS Options school graduates, and the Chancellor's Retention Fund
• Enhanced marketing and enrollment infrastructure to attract and retain a diverse student body
Grant-funded efforts to better connect Chicago communities and adult learners to opportunities at City Colleges and to remove students' technology barriers to academic success
A robust offering of remote, online and in-person learning options
Academic programs that ensure students are prepared for the economic recovery
The Chicago Roadmap, an unprecedented partnership with the Chicago Public Schools, to support students along a seamless path to and through college on the way to their chosen careers
Resources to ensure the continued health and safety of City Colleges students, faculty and staff as we continue to combat and prevent against a resurgence of COVID-19
A modest capital program targeted for in-demand/emerging programs, technology, deferred maintenance, and life safety infrastructure.
Community College State Funding
State Funding to All
State Community
Fiscal Year Colleges
2013 $~- 282,421,700
284,916,500
278,773,899
74,142,300
114,525,000
409,595,700 *
257,111,600
269,222,284
269,222,286
278,178,388
Source: Illinois Community College Board *Amounts include the appropriations from Illinois Senate Bill 6 passed on July 6, 2017.
xi
ACHIEVEMENTS
Holding our credit hour rate of $146 level for the fourth straight year, recognizing thc economic strain ofthe pandemic, and increasing marketing to attract a diverse student body in an unprecedented COVID-19 environment.
Maintaining a robust suite of student academic and related supports from wellness centers and tutoring to a new coaching advising model and disability access centers.
The City Colleges of Chicago Equity Plans represent a milestone for City Colleges of Chicago. For the first time in our institution's history, there is a set of seven distinct college plans, each addressing the unique assets and challenges of each campus community and forming a collective vision for equity and excellence for the City Colleges of Chicago.
The City Colleges of Chicago has been recognized by the EPA for sustainability efforts. Our purchasing of green power from wind sources landed City Colleges of Chicago on the "Green Power Partnership Top 30 College & University" list by the United States Environmental Protection Agency (EPA). City Colleges is one of only two community college systems named on the list and one of only three colleges in the state of Illinois who were recognized.
CAPITAL IMPROVEMENT PLAN
On July 1, 2021, City Colleges of Chicago entered a new five-year capital plan, consisting of key strategic programmatic and academic improvements, necessary deferred maintenance, technology and technology infrastructure upgrades. The projects prioritized and included in the Capital Plan further our strategic vision and maintain the condition of our colleges. Each year City Colleges updates the plan based on a renewed assessment of conditions and evolving academic priorities. The updated 5-year total plan is $215.2 million. For fiscal year 2023, City Colleges has budgeted capital investments of up to $44.3 million that included $16.2 million in technology and technology infrastructure and $14.9 million in deferred maintenance and life safety capital improvements to existing infrastructure. The $13.2 million in recommended academic and programmatic improvements will be prioritized by their impact on student success and are subject to external funding and/or Chancellor approval.
FINANCIAL INFORMATION
Internal Control: City Colleges' management is responsible for establishing and maintaining an internal control structure designed to protect its assets, to prevent loss from theft or misuse of assets, and to allow for the preparation of financial information in conformity with U.S. GAAP under GASB. Although no internal control can guarantee complete assurance that these objectives are met, strong controls provide reasonable assurance ofthis. The concept of reasonable assurance recognizes that the cost ofa control should not exceed the benefits likely to be derived and that the valuation of costs and benefits requires estimates and judgments by management.
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Budgeting Controls: The fiscal year begins on July 1 and ends on June 30 with annual appropriations lapsing at the end of the fiscal year. Individual colleges submit budget requests based on the colleges' strategic and tactical plans as reviewed and approved by the Chancellor. Administrative units submit requests for the Chancellor's review. The Budget Office compiles requests and recommendations for submission to the Board of Trustees for appropriation. The appropriated budget is prepared by fund, department, account (object of expense), and program (function).
City Colleges' budgetary control objectives are to ensure compliance with legal provisions embodied in. the annual appropriated budget approved by City Colleges' Board.of Trustees. Budgetary control is implemented by individual fund within each college. Board approval is required for all transfers between funds, accounts, or programs. In addition, an amended budget is required for increases in total appropriation in accordance with the Illinois Public Community College Act.
Board approval is required for all purchases or exchanges of goods and services over $25,000 from a single vendor during the fiscal year. In addition, proper segregation of duties exists both operationally and technologically to ensure that purchase orders are properly authorized with appropriate checks and balances.
City Colleges maintains an encumbrance accounting system as part of its budgetary control. Encumbered amounts lapse al the end of each fiscal year.
Capital project funds are budgeted on a project-by-projcct basis and represent thc entire project budget for projects expected to begin in that fiscal year.
City Colleges' financial resources are summarized in the following fund groups and individual funds in accordance with ICCB reporting requirements.
GASB Net Position Category
Unrestricted
ICCB FUND
Education
Auxiliary / Enterprise
Operations and Maintenance
Operations and Maintenance - Restricted (Board
Designated Capital Projects) Working Cash
Audit Fund
Liability, Protection and Settlement Restricted Purposes (Grants) Bond and Interest Trust and Agency
Building Bond Proceeds Long-Term Debt
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Property Tax: Estimated assessed value ol'taxable property for tax year 2021 collectible in fiscal year 2022 was $96,868,463,441. Estimated assessed value of taxable property for tax year 2020 collectible in fiscal year 2021 was $89,478,355,786. City Colleges' average collection rate over the past five years lias been over 97%.
Debt A dm in istr ation: Long-term and current debt at June 30, 2022 totaled $295,955,000 due to City Colleges' issuance of bonds Series 2013 in October 2013 and Series 2017 in December 2017.
Cash Management: Cash and investments are controlled by City Colleges' Treasurer or Vice Chancellor of Finance and Business Enterprises / Chief Financial Officer. Treasury is governed by provisions within the Illinois Public Community College Act (Illinois Compiled Statutes Chapter 110, Act 805) and the Illinois Public Funds Investment Act (Illinois Compiled Statutes Chapter 30, Act 235). Fiduciary responsibility for investments is entrusted to City Colleges' Board of Trustees, which has delegated the function to the Treasurer of City Colleges as permitted by the Illinois Public Community College Act.
In keeping with existing Board policy, investments of excess funds arc made in a prudent, conservative and secure manner in accordance with guidelines detailed in the Board Rules for Management and Government section 5.4, Investment and Depository Policies. Designation of depositories and investment managers is authorized by the Board of Trustees.
City Colleges invests funds in various securities listed as permitted investments in the Board-approved Investment Policy. This policy is reviewed on an annual basis and any modifications require Board approval. The securities include, but are not limited to, money market funds, U.S. Treasury bonds, bills, notes and certificates of deposit.
Risk Management: The Office of Risk Management (ORM) continuously and actively assesses and reviews potential risk and exposures the District may encounter and strives to mitigate the potential impact on the institution. ORM procures commercial insurance to address significant property and non-property losses for amounts in excess of self-insured retentions. The comprehensive Commercial Insurance Portfolio is reviewed annually to determine policy limits and retention (deductible) levels for property assets, general liability exposures, workers' compensation injuries and educator's legal liability matters. The current deductibles equal $25,000, $250,000, $600,000 and $250,000 per claim, respectively.
City Colleges engages a third-party administrator to adjudicate and administer claims for general liability, workers' compensation, student athlete injury and student accident health claims.
OTHER INFORMATION
Independent Audit: State statutes require an annual audit by independent certified public accountants. The City Colleges of Chicago Board of Trustees selected the audit firm of RSM US LLP as its independent certified public accountants for fiscal year 2022. The independent auditor's report of RSM US LLP on the basic financial statements and supplementary schedules is included in the financial section ofthis report.
MV
Awards: The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to City Colleges for its Annual Comprehensive Financial Report for thc fiscal year ended June 30, 2021. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report whose contents conform to program standards. This report must satisfy both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that the current report continues to conform to the GFOA Certificate of Excellence program requirements, and we are submitting it to GFOA again this year.
Ackno wledgem en ts: The preparation ofthe Annual Comprehensive Financial Report was made possible by the dedicated service of the senior leadership team and staff of City Colleges. We wish to express our sincere appreciation for the contributions they have made in preparing this report.
Respectfully submitted,
Maribel Rodriguez Daryl J. Okrzesik
Chief Financial Officer Associate Vice Chancellor, Treasurer
XV
CITY COLLEGES OF CHICAGO COMMUNITY COLLEGE DISTRICT NO. 508 PRINCIPAL OFFICIALS Year Ended June 30, 2022
BOARD OF TRUSTEES
Walter E. Massey Ph.D Chair Elizabeth Swanson, Vice Chair Peggy A. Davis, Secretary Laritza Lopez, Trustee Karen Kent, Trustee Darrell A. Williams, Trustee Deborah IT. Telman, Trustee Neith Tiri-Xi'ui, Student Trustee Bonnie Phillips, Chief Advisor to the Board of Trustees Vacant, Assistant Board Secretary
ADMINISTRATIVE OFFICERS
Juan Salgado, Chancellor Dr. Mark Potter, Provost & Chief Academic Officer Veronica Herrero, Chief of Staff and Strategy Officer Maribel Rodriguez, Chief Financial Officer Karla Mitchell Gowen, General Counsel Jcrrold Martin, ChielTnformation Officer Carol Dunning, Chief Talent Officer Lamesha Smith, Inspector General Gina Gentile, Director of Internal Auditing Eric Lugo, Senior Advisor Dr. Janine Janosky, President, Richard J. Daley College Dr. Daniel Lopez, President, Harold Washington College Dr. Katonja Webb Walker, Interim President, Kennedy-King College David A. Sanders, President, Malcolm X College Kimberly Hollingsworth, President, Olive-Harvey College Dr. Shawn L. Jackson, President, Harry S. Truman College Dr. David Potash, President, Wilbur Wright College
REPORT ISSUED BY
Office of Finance
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Government Finance Officers Association
Certificate of Achievement for Excellence
in Financial
Reporting
Presented to
City Colleges of Chicago Illinois
For its Annual Comprehensive Financial Report For the Fiscal Year Ended
June 30, 2021 Executive Director/CEO
XVIII
Financial Section
r
Independent Auditor's Report
To the Board of Trustees of City Colleges of Chicago Community College District No. 508
Report on the Audit of the Financial Statements Opinions
We have audited the financial statements of the business-type activities and the discretely presented component unit of City Colleges of Chicago, Community College District No. 508 (City Colleges), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise City Colleges' basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the discretely presented component unit of City Colleges, as of June 30, 2022, and the respective changes in financial position, and, where applicable cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of City Colleges and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. The financial statements of the discretely presented component unit (City Colleges of Chicago Foundation) were not audited in accordance with Government Auditing Standards.
Emphasis of Matter
As-discussed in Note 16 to the accompanying financial statements, the beginning net assets, as of July 1, 2021, of City Colleges of Chicago Foundation were restated as a result of an error related to the revenue recognition of multi-year grant agreements. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about City Colleges' ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
THE POWER OF BEING UNDERSTOOD
AUDiT | TAX ! CONSULTING
Auditor's Responsibilities for the Audit ofthe Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of City Colleges' internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation ofthe financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about City Colleges' ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing ofthe audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and pension and other post-employment benefit obligations (OPEB) information and related notes to the required supplementary information to be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise City Colleges' basic financial statements. The supplementary information as described in the table of contents (the Uniform Financial Statements, as required by the Illinois Community College Board) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the supplementary information as described in the table of contents is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory section, statistical section and the Certification of Chargeback Reimbursement but does not include the basic financial statements and our auditor's report thereon. Our opinion on the basic financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement ofthe other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 30, 2022, on our consideration of City Colleges' internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City Colleges' internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City Colleges' internal control over financial reporting and compliance.
JlSAt JULP
Chicago, Illinois November 30, 2022
Management's Discussion and Analysis
(MD&A)
CITY COLLEGES" Community College District No. 508
of CHICAGO Management's Discussion and Analysis
The discussion and analysis of City Colleges of Chicago financial performance provides an overall review of City Colleges' financial activities for the fiscal year ended June 30, 2022. This discussion and analysis focuses on current activities, currently known facts and related changes. The management of City Colleges encourages readers lo consider the information being presented herein in conjunction with the transmittal letter that precedes this section and thc basic financial statements and accompanying notes (which immediately follow this section) to enhance their understanding of City Colleges1 financial performance. All amounts, unless otherwise indicated, are expressed in millions of dollars. Certain comparative information between the current and prior year is required to be presented in the Management's Discussion and Analysis (the "MD&A"). Responsibility for thc completeness and fairness of the information presented here rests with City Colleges.
Using This Annual Report
The basic financial statements focus on City Colleges as a whole. The accompanying basic financial statements are designed to emulate the presentation model of private sector business-type activities, whereby all City Colleges' activities are consolidated into one total. The Statement of Net Position combines and consolidates all financial resources with long-term capital assets and debt. The Statement of Revenues, Expenses and Changes in Net Position describes operating results, comparing revenues derived from operations such as tuition and fees with operating expenses, and non-operating results. Non-operating revenues include funding received from State apportionment, grants, and property taxes. This approach is intended to facilitate analysis of financial results of various services to students and the public.
Financial Highlights Statement of Net Position
The total net position as of June 30, 2022 increased by $20.5 million to $514.5 million mainly due to increases in federal and state grants and contracts, property taxes and personal property replacement taxes as well as decreases in fringe benefits and depreciation.
On January 30, 2020, the World Health Organization declared the coronavirus disease ("COVID-19") outbreak a "Public Health Emergency of International Concern" and on March 11, 2020, declared it to be a pandemic. It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to City Colleges.
|1010|
CITY COLLEGES-
of CHICAGO
Community College District No. 508 Management's Discussion and Analysis
Overview of Financial Statements
Total current assets increased by S31.4 million as compared to the prior year, mainly due to the increase in short term investments and property tax receivable.
Total current liabilities increased by $6.7 million due to increases in accounts payable, unearned grant revenue and the current portion ofthe non-current liabilities. These were offset by decreases in accrued payroll, other accruals, unearned tuition and fees revenue and other liabilities.
Total non-current liabilities decreased by $17.5 million. This was mainly due to decreases in accrued property tax refunds, sick leave benefits, other post-employment benefits, bonds payable and the current portion of non-current liabilities. This was offset by increases in accrued compensated absences, workers compensation and lease obligations. The deferred inflows of resources are the deferred property tax revenue, other post-employment benefits and leases that have been presented separately in the financial statements to conform to GASB Statements 65, 75 and 87, respectively.
CITY COLLEGES" Community College District No. 508
of CHICAGO Management's Discussion and Analysis
HIGHER EDUCATION EMERGENCY RELIEF FUNDS (HEERF)
City Colleges received federal stimulus funds which have helped provide direct support to students and stabilize thc organization through the challenging financial environment resulting from the COVID-19 pandemic. The Higher Education Emergency Relief Funds (HEERF) were received from the following federal legislation; Coronavirus Aid, Relief, and Economic Security Act (CARES Act - "HEERF I"), Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA - "HEERF 11"), and American Rescue Plan (ARP - "HEERF III").
The HEERF funds are issued as direct aid to students and to support institutions of higher education to ensure learning continues during the COVID-19 pandemic. Thc institutional funds were appropriated for costs of disruption due to the pandemic, to setup the infrastructure to transition to remote learning, and to cover for lost revenue. Below is a summary of CCC's HEERF allocations.
Bill Date signed & Status Provides Student grants Institutional funds Total allocation
HEERFI -CARES ACT March 27, 2020 Funds received and used Support costs of remote learning and student grants for housing, food and technology $12.7M S12.7M $25.4M
HEERF II -CRRSAA December 27, 2020 Funds awarded Support for learning continuity $12.7M $40.5M S53.2M
HEERF III -American Rescue Plan March 11,2021 Funds awarded Additional COVID relief- S46.9M $46.3 M $93.2M
HEERF III-SSARP July 19,2022 Funds awarded Assist students affected by COVID-19 pandemic and make institutional changes to assist students $574.6K S574.6K $ 1.1M
|1010|CITY COLLEGES" Community College District No. 508
of CHICAGO Managemeiifs Discussion and Analysis
Table I
Condensed Statements of Net Position (in millions of dollars)
Current assets Non-current assets Capital assets
Less accumulated depreciation Other assets Total assets
2022
233.5
1,296.9 (498.4) 55.3
1,087.3
2021
202.1
1,275.4 (464.9) 52.4
1,065.0
Change
$ 31.4
21.5 (33.5) 2.9 22.3
Deferred outflows of resources
Current liabilities Non-current liabilities Total liabilities
Deferred inflows of resources
Net position
Net investment in capital assets Restricted for specific purposes Unrestricted
Total net position
75.7 422.8
498.5
78.9
488.9 4.5 21.1
514.5
69.0 440.3
509.3
70.3
509.7 3.8 (19.5)
494.0
6.7 (17-5) (10-8)
8.6
(20.8) 0.7 40.6
20.5
|1010|
CITY COLLEGES" Community College District No. 508
of CHICAGO Management's Discussion and Analysis
Table 2
Condensed Statements of Revenues, Expenses and Changes in Net Position
(in millions of dollars)
Operating 2022 2021 Change
Revenues $ 29.9 $ 32.7 $ (2.8)
Expenses " (518.7) (521.3) 2.6
Operating loss (488.8) (488.6) (0.2)
Non-operating
Revenues 520.4 512.0 8.4
Expenses (16.2) (14.9) (1.3)
Net non-operating revenues 504.2 497.1 7.1
Income before capital contributions 15.4 8.5 6.9
Capital contributions 5J_ E6 3.5
Change in net position 20.5 10.1 10.4
Net position, beginning of year 494.0 483.9 10.1
Net position, end of year $ 514.5 $ 494.0 $ 20.5
Changes in Net Position Years Ended June 30, (in millions of dollars)
Total revenue Total expenses
Increase (decrease) in net position
2022 2021
$ 555.4 $ 546.3
(534.9) (536.2)
S 20.5 $ 10.1
CITY COLLEGES"
of CHICAGO
Community College District No. 508 Management's Discussion and Analysis
Statement of Revenues, Expenses and Changes in Net Position
Operating revenues decreased by $2.8 million from the previous year due to decreases in enrollment as well as student tuition and fees.
Total non-operating revenues and expenses increased by $7.1 million in fiscal year 2022 due to increases in state apportionment and equalization, local grants and contracts, local property taxes, personal property replacement tax, federal grants and contracts, interest payments on debt, litigation settlements and other non-operating revenue. This was offset by decreases of $50.5 million in other state grants and contracts, SURS apportionment and equalization and investment income. Capital appropriations and grants decreased by $3.5 million due to an increase in grants from the State of Illinois Capital Development Board.
Table 3
Operating Revenues and Non-Operating Revenues (Expenses)
(in millions of dollars)
Operating revenues
Student tuition and fees
Less scholarships-Other operating Total operating revenues Non-operating revenues (expenses)
State apportionment and equalization
Other state grants and contracts
Local grants and contracls
Local property taxes
Personal property replacement tax
Federal grants and contracts
Interest payments on debt
Investment income
Other non-operating revenues (expenses) Total non-operating revenues (expenses)
Capital appropriations and grants Total
2022 2021 Change
$ 73.4 $ 76.7 S (3.3)
(49.0) (46.7) (2.3)
5J5 2/7 2^8
29.9 32.7 (2.8)
47.2 46.0 1.2
137.1 185.8 (48.7)
10.7 7.7 3.0
141.3 135.8 5.5
43.9 20.3 23.6
139.6 116.0 23.6
(14.7) (14.9) 0.2
(1.5) 0.3 (1.8)
06 (U 0.5
504.2 497.1 7.1
5A L6 3.5
S 539.2 $ 531.3 $ 7.9
|10 10|CITY COLLEGES" Community College District No. 508
of CHICAGO Management's Discussion and Analysis
Table 3
Operating Revenues and Non-Operating Revenues (Expenses)
(in millions of dollars)
Operating Revenue and Non-Operating Revenue (Expenses) by Source For the year ended June 30, 2022
2.0% Local grants and contracts
fees, net
26.2% Local property taxes
tier non-operating revenue 0.1%
25.9% Federal grants and contracts
8.1% Personal property replacement tax
-0.3% Investment income
-2.7% Interest payments on debt
0.9% Capital appropriations and grants
Total operating expenses decreased by $2.6 million in fiscal year 2022. This was mainly due to a $35.5 million decrease for SURS and a $6.3 million decrease in fringe benefits and depreciation. This was offset by a $39.2 million increase in salaries, supplies, professional development, utilities, contractual services, financial aid expenses and other expenses.
10
CITY COLLEGES' Community College District No. 508
of CHICAGO Management's Discussion and Analysis
Table 4
Operating Functional Expenses (in millions of dollars)
Operating expenses 2022 2021 Change
Instruction - -- S 155.8 S 180.9 $ (25.1)
Academic support 41.0 44.6 (3.6)
Student services 57.8 61.3 (3.5)
Public service 4.3 2.5 1.8
Operations and maintenance of plant 70.7 70.0 0.7
Institutional support 74.8 67.7 7.1
Financial aid 69.6 47.2 22.4
Auxiliary 12.6 12.4 0.2
Depreciation and amortization 32.1 34.7 (2.6)
Total operating expenses $ ' 518.7 $ 521.3 _$ (2.6)
Operating Functional Expenses For the year ended June 30, 2022
CITY COLLEGES" Community College District No. 508
of CHICAGO Management's Discussion and Analysis
Net Capital Assets and Non-Current Liabilities
As of June 30, 2022, City Colleges had $1,297.0 million in capital assets and $498.4 million in accumulated depreciation, resulting in $798.6 million in net capital assets. Some construction in progress projects were completed and put into service, and additional software was purchased. This investment in net capital assets includes land, buildings and improvements, construction in progress, equipment, vehicles, software .and leased assets. The total decrease in City Colleges' net capital assets for the current fiscal year is $11.9 million for depreciation on existing assets. For more detailed information on capital assets, please refer to Notes IK and Note 4 in the Notes to Basic Financial Statements.
Table 5
Capital Assets (Net of Accumulated Depreciation and Amortization)
(in millions of dollars)
Capital assets 2022 2021 Change
Land $ 51.4 $ 51.4 $ -
Buildings and improvements 1,108.4 1,105.6 2.8
Construction in progress 11.8 5.7 6.1
Equipment 64.9 64.8 0.1
Software 48.3 47.9 0.4
Leased assets 12.2 -_ 12.2
Total 1,297.0 1,275.4 21.6
Less Depreciation and amortization (498.4) (464.9) (33.5)
Net capital assets $ 798.6 $ 810.5 $ (11.9)
CITY COLLEGES"
of CHICAGO
Community College District No. 508 Management's Discussion and Analysis
Total non-current liabilities decreased by $17.5 million to $422.8 million. This was mainly due to decreases of $24.3 million in bonds payable, sick leave benefits and other post-employment benefits, which were offset by increases in accrued compensated absences and lease obligations of $7.7 million. See Note 12 for more detailed information regarding long-term debt activity.
Table 6 Non-Current Liabilities (in millions of dollars)
2022 2021 Change
Accrued compensated absences 5 3.7 $ 3.5 $ 0.2
Sick leave benefits 2.7 3.0 (0.3)
Other post-employment benefits 90.2 105.8 (15.6)
Bonds payable, net of premiums & discounts 303.0 309.0 ,. (6.0)
Workers compensation 1.2 1.1 0.1
Accrued property tax refunds 17.1 19.1 (2.0)
Lease obligations 14.6 TA. 7.5
Sub-total 432.5 448.6 (16.1)
Less current portion (9.7) (8.3) (1.4)
Total non-current liabilities $ 422.8 $ 440.3 $ (17.5)
Requests for Information
This financial report is designed to provide a general overview of City Colleges' finances. Questions concerning the report or requests for additional information should be addressed to the Chief Financial Officer, City Colleges of Chicago, 180 N. Wabash, Suite 200, Chicago, IL 60601.
13
Basic Financial Statements
City Colleges ot Chicago Community College District No. SON Statement of Net Position June .10, 2022
Assets
Cut rent .resets
Cash and cash euimaicnts
Shoil-icnn imestmcnls
Property ui\ iecei\abte. nel
Personal property replacement lax receivable
Other accounts receivable, net
Prepaid items and other assels Total cunent assels
I-l. I l'J.5(,3 I I7.7I7.IU9 Ii5.420.3fl5 7.109.559 24.347.169
4.700.519
233.504.314
Non-current assels: Restricted cash
Funds held by others - lesincled Long-term lnvestmenls Other accounts receivable Capital assets not being depreciated Capital assels being depreciated, net
Tolal non-current assets
Tolal assets
2i-i.0OI.fiS7 1.035,233 27.dSO.425 490.493 f.3.l3S.33S 735.415.629 S53.7fil.S05
1.087.266.119
Deferred outflows of resources
Deferred outtlows related to other post-employment benefits Deferred outllows related to pensions Total deferred outllows of resources
I. nihilities
Current liabilities' Accounts payable Accrued payroll Other accruals
Unearned tuition and fees revenue Unearned grant revenue Other liabilities
Cunent portion ofnon-currenl liabilities Total current liabilities
Non-curienl liabilities
Accrued compensaled absences Accrued property tax refunds Sick leave benelils Other post-employment benefits Workeis compensation
Bonds payable, net of premiums and discounts
Lease obligations
Other non-current liabilities
Less current portion of non-current liabilities Tolal non-current liabilities Total liabilities
Deferred inflows of resources
Deferred inflows related to other posl-employmenl benelils Deferred inflows relaled to property lax revenue Deferred inflows related to leases Total deferred inllows of resources
3,146.037 1.540.231
4.6S6.26X
I7.S69.757 20.751.635 1,963.022 5.627.662 10.771.259 8.982.259 9.74S.654
75.7I4.24S
3.692.232 17.099.92 I
2.669.455 90.24S.733
1,206.644 303,071,153
S.302.SOS
6,285.737 (9.748.654)
422.S2S.029
49S.542.277
I 1.143.945 67.757.739 14.357
7S.916.04I
Net position
Net investment m capital assels Restricted for specific purposes. Audit
Trust and agency
(.iiants Unrestricted Total net position
4SS.S5S.156
424.501 1.012.595 3.0SO.I49 21.11 S.66S
514.49-1.069
The accompanying notes are an integral part of these basic financial statements.
14
City Colleges of Chicago Community College District No. SOX Statement of Revenues, Expenses and Changes in Net Position Fiscal Year Ended June 30, 2022
Revenues
Operating revenues:
Student tuition and fees:
Resident tuition S 66.S53.4S3
Nonresident tuition • 2.059,4X5
Fees 4.450,220
Less: Scholarship allowances (4S.9S4.6S2)
Net student tuition and lees 24.378,506
Other operating revenues 5.567.071
Total operating revenues 29.945.577
Expenses
Operating expenses:
Instructional salaries 91,156.656
Non-inslructional salaries I 18.865.175
Fringe benefits 151,824,451
Supplies 23,021,322
Professional development 558.721
Utilities 9,072,584
Contractual services 22,286,105
Depreciation and amortization 32,105,950
Finaneial aid, exclusive of scholarship allowances 69,627,1 15
Other expenses 200.1 16
Total operating expenses 518,718.195
Operating loss (4S8.772.618)
Non-operating revenues (expenses):
State apportionment and equalization 47.185,162
Other state grants and contracls • 137,039,661
Local grants and contracts 10,655,865
Local property taxes 141,347,1 10
Personal property replacement tax 43,942,972
Federal giants and contracts 139,623,169
Litigation settlement 16,600
Investment loss (1,468,428)
Interest payments on debt (14.738,790)
Other non-operating revenue 579.532
Total non-operating revenues (expenses) 504.182,853
Increase in net position before capital appropriations 15,410,235
Capital appropriations 5.066.919
Change in net position 20.477.154
Net position, beginning of year 494.016.915
Net position, end of year $ 514.494.069
The accompanying notes are an integral part of these basic financial statements.
15
City Colleges of Chicago Community College District No. 508 Statement of Cash Flows Fiscal Year Ended June 30, 2022
Cash flows from operating activities
Tuilion and Ices Payments to suppliers Payments to employees Payments to students Other operating receipts Net cash used in operating activities
25,590,016 (97,617,291) (211.817.164) (69,627,115) 5,567.071 (347,904,483)
Cash flows from noncapital financing activities
Local property taxes
State apportionment, grants and contracts Personal properly replacement tax Federal grants and contracts Other non-operating receipts Net cash provided by noncapital financing activities
140,945,756 67,248,043 40,545,627
147,537,405 1,597,618
397,874.449
Cash flows from capital and related financing activities
Purchases of capital assets Payment received on note receivable Principal paid on debt Interest paid on debt Net cash used in capital and related financing activities
(4.764,720) 1,005,085 (5.265,000) (15,417,074)
(24,441,709)
Cash flows from investing activities
Proceeds from sales and maturities of investments Purchases of investments Loss on investments Net cash used in investing activities
45,750.780 (70.513.032) (1.371,814)
(26,134,066)
Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year
(605,809) 40,727,059
40,121.250
Cash and cash equivalents Restricted cash
14,119,563 26.001,687
40.121.250
The accompanying notes are an integral part of these basic financial statements.
16
City Colleges of Chicago Community College District No. 508 Statement of Cash Flows tConimuci// Fiscal Year Fueled June 30, 2022
Reconciliation of operating loss to net cash used in operating activities
Operating loss
Reconciling adjustments:
Depreciation and amortization 1
Slate pension lhat is associated with the College
Decrease in allowance for uncollectible receivables
Changes in assets and liabilities: Receivables
Prepaid items and other assets Accounts payable Accrued payroll Other accruals
Unearned tuition and fees revenue Other liabilities
Accrued compensated absences Sick leave benefits
OPEB and related deferred outllows and inflows Lease obligations Net cash used in operating activities
$ (488,772.6 IS)
32.105.950 I 16.976.780 (2.533,697)
3.S34.73S (1.612,773) 3,385.610 (542,497) (787,063) (134,723) (2,252,113) 138,005 (312,876) (5,667,678) (1,729.528) $ (347,904,483)
Non-cash investing, capital and financing activities
Decrease in fair value of investments Stale of Illinois contributed capital assets Capital assels in accounts payable
Amortization of premiums and discounts on bonds payable
7.416,773 5.066,919 1,464,624 678,285
The accompanying notes are an integral part of these basic financial statements
17
Component Unit - City Colleges of Chicago Foundation Statement of Financial Position as of .June 30, 2022
Assets
Cash and cash equivalents Investments
Contributions receivable, net Other receivables Prepaid expenses Total assets
Liabilities and Net Assets
Accounts payable
Net Assets
Without donor restrictions With donor restrictions
Total net assets
Total liabilities and net assets
2022
$ 7,556,400 12.302.980 4,481,814 10,207
1,265
S 24,352,666
$ 483,615
1,923,610 21,945,441 23,869,051 $ 24,352,666
The accompanying notes are an integral part of these basic financial statements.
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Component Unit - City Colleges ol Chicago Foundation Statement of Activities For the year ended June 30, 2022
Without Donor Restrictions
2022 With Donor Restrictions
Revenue
Contributions Contributed services" Net assets released from restrictions Total revenues and other support
119,472 587.499 6.114,958
6,821,929
7.012.399 S 7,131,871 587,499
(6,1 14,958) -
7,719,370
897,441
Expenses
Program services Scholarships awarded Management and general Fundraising Total expenses
4,194,130 2,019,930 512,552 238,973
6,965,585
4,194,130 2,019,930 512,552 238,973 6.965,585
( Decrease) Increase in net assets
Other changes
Investment return, net
Change in net assets Net assets — Beginning of year as restated Net assels — End of vear
(1,478,091) 3,401,701
,923,610 S
138,435 21,807,006
21,945,441
(1,339,656)
25,208,707
23,869,051
The accompanying notes are an integral part of these basic financial statements.
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Notes to Basic Financial Statements
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cily Colleges of Chicago, Community College District No. 508 (City Colleges), is a separate taxing body created under the Illinois Public Community College Act of 1965 with boundaries coterminous with the City of Chicago. City Colleges delivers educational and student services through seven colleges, each of which is separately accredited by the North Central Association. The Board of Trustees, appointed by the Mayor of Chicago and ratified by the City Council, is responsible for establishing the policies and procedures by which City Colleges is governed. The City of Chicago is a related organization but is a separate fiscal reporting entity. The City Colleges of Chicago is excluded from the City of Chicago financial reports and the City of Chicago financial reports are not included as part of City Colleges financial reports. No fiscal relationship exists between these organizations that meets the financial accountability criteria established by thc Government Accounting Standards Board (GASB).
Reporting Entity
The accompanying financial statements include City Colleges of Chicago and its discretely presented component unit, City Colleges of Chicago Foundation (Foundation).
City Colleges follows the standards established in the Codification Section 2100: "Defining the Financial Reporting Entity". According to the GASB Codification, City Colleges is a primary government since it is fiscally independent, whereas the Foundation is a discretely presented component unit of City Colleges.
The Foundation is a legally separate not-for-profit, tax-exempt corporation, established under Internal Revenue Code Section 501(c) 3. The Foundation reports its financial results under Financial Accounting Standards Board (FASB) Accounting Standards Codification, which is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB. Financial statements for the Foundation are available at City Colleges of Chicago's website,
.
Basis of Accounting
For financial reporting purposes, City Colleges is considered a special-purpose government engaged only in business-type activities. Accordingly, City Colleges' basic financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned and expenses are recorded when incurred. All significant inlra-agency transactions have been eliminated.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basis of Accounting (continued)
Non-exchange transactions, in which City Colleges receives value without directly giving equal value in return, include property taxes, federal, state, and local grants, state appropriations and other contributions. On an accrual basis, revenue from property taxes is recognized in the period for which the levy is intended to finance. Revenue from grants, state appropriations, and other contributions are recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted, matching requirements, in which City Colleges must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to City Colleges on a reimbursement basis.
The accounting policies of City Colleges conform to generally accepted accounting principles accepted in the United States of America (GAAP) as applicable to colleges and universities, as well as those prescribed by the Illinois Community College Board (ICCB). City Colleges' reports are based on all applicable Governmental Accounting Standards Board (GASB) pronouncements.
Cash and Cash Equivalents
Cash and cash equivalents include demand deposits and short-term investments with original maturities of three months or less from the date of purchase, except for Illinois funds, Illinois Institutional Investor Trust and money market mutual funds, which are treated as investments.
Investments
Investments are reported at fair value. External investment pools are reported at net asset value based on amortized cost, which approximates fair value. Illinois Funds and Illinois Portfolio, HIT class are external investment pools. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants' at the measurement date. Changes in the carrying value of investments, resulting in realized and unrealized gains or losses, are reported as a component of investment income in the statement of revenues, expenses and changes in net position.
City Colleges of Chicago Community College District JNo. 508 Notes to Basic Financial Statements June 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continual)
Investments (continued)
Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term that could materially affect the amounts reported in the statement of net position and in the statement of revenues, expenses and changes in net position.
Receivables
Accounts receivable consist of property taxes, personal property replacement taxes and tuition and fee charges to students and facilities rentals provided to third parties. Accounts receivable also include amounts due from the federal government, as well as state and local governments, in connection with reimbursement of allowable expenditures made pursuant to City Colleges' grants and contract agreements. Receivables are recorded net of estimated uncollectible amounts.
Allowance lor Uncollectible Receivables
City Colleges provides allowances for uncollectible student accounts for any outstanding receivable balances less than 365 days. Balances in excess of 365 days past due are written off. During fiscal year 2022, $ 1.3 million of student receivables were written off
Property Taxes
City Colleges' property taxes are levied each calendar year on all taxable real property located in City Colleges' district. Property taxes are collected by the Cook and DuPage County Collectors and are submitted to each county's respective treasurer,, who remits to the units their respective shares ofthe collections. Cook Co'unty taxes levied in one year become generally clue and payable in two installments on March 1 and typically September 1 ofthe following year. The first installment is an estimated bill and is 55% of the prior year's tax bill The second installment is based on the current levy, assessment, and equalization. Any changes from the prior year will be reflected in the second installment bill. Taxes must be levied by the last Tuesday in December for the following levy year. DuPage County, which represents 1/100 of one percent ofthe total levy, follows a similar practice as Cook County. The levy becomes an enforceable lien against the property as of January 1 of the levy year.
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property Taxes (continued)
Taxes are levied on all taxable real property located in the district for educational purposes, operations and maintenance purposes, financial-auditing purposes and liability protection and settlement. The lax levies for City Colleges for the educational, operations and maintenance, and financial auditing purposes are limited by Illinois statute to 0.175%, 0.05%, and 0.005%, respectively, of the equalized assessed valuation (EAV).
In accordance with City Colleges' Board resolution, 50% of property taxes extended for the 2021 tax year and collected in 2022 are recorded as revenue in fiscal year 2022. The remaining revenue related to the 2021 tax year extension is deferred and will be recorded as revenue in fiscal year 2023. Based upon collection histories, City Colleges recorded property taxes at 96.5% of the 2021 extended levy and has an allowance of $2.5 million at June 30, 2022.
Personal Property Replacement Tax Revenue
Personal property replacement taxes are recognized as revenue when these amounts arc ¦ collected by the State of Illinois for distribution.
L Prepaid Items and Other Assets
Prepaid expenses and other assets represent amounts paid as of June 30 whose recognition is postponed to a future period. Prepaid expenses consist primarily of prepayments to vendors for maintenance contracts.
J. Restricted Cash
Cash held for the purchase or construction of capital or other non-current assets is classified as non-current assels in the statement of net position.
K. Capital Assets
Capital assets of City Colleges consist of land, construction in progress, building, improvements, computer equipment, software and other equipment. Capital assets are reported at cost at the date of acquisition or their estimated acquisition value at the date of donation. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value rather than fair value.
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
1. SUM MARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
K. Capital Assets (continued)
Major outlays for assets or improvements lo assels equal lo or greater than $200,000 are capitalized as projects are constructed. These are categorized as construction work in progress until placed in service at which lime they are reclassified to the appropriate asset type.
City Colleges considers a capital asset impaired when its service utility has declined significantly and the events or changes in the circumstances are unexpected or outside the normal life cycle.
City Colleges' capitalization policy for movable property includes only items with a unit cost equal to or greater than $25,000 and an estimated useful life greater than one year. Beginning in fiscal year 2015, City Colleges also capitalizes moveable property less than $25,000 with an estimated useful life greater than one year ifthe property is for major new construction or district-wide initiatives over $200,000. City Colleges capitalizes interest related to construction in progress on self-constructed capital assets.
Renovations to buildings and land improvements that significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged lo operating expense in the year in which the expense is incurred.
Renovations that increase the value of the structure are depreciated according to their estimated useful life. When renovations are capitalized, a portion of the original asset renovated is retired from capital assets and accumulated depreciation using a deflated replacement cost methodology. In addition, City Colleges re-evaluates an asset's useful life when there is a change in circumstances.
Capital assets are depreciated beginning the first day of the following month after they were put in service using the straight-line method over the following useful lives:
Assets Years
Buildings and improvements 20 - 40
Computer equipment 4-5
Software 3-10
Other equipment 3-10
Leased assets 5-18
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
L. Deferred Outflows of Resources
Deferred outflows are defined under GASB Statement No. 63 as a consumption of nel assets by City Colleges that is applicable to future reporting periods and should be reported as having a similar impact on net position as assets. For City Colleges, pension payments related to federal grants and made subsequent to the pension liability measurement date are considered to be deferred outflows in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions. Deferred outflows related to OPEB are differences between expected and actual experience and changes in assumptions, in accordance with GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions. (See Note 7 and Note 11 for further discussion of City Colleges deferred outflows of resources.)
M. Pensions and Other Postemployment Benefits
Pensions. For the purpose of measuring the net pension liability, deferred outflows and deferred inflows of resources related to pensions, and pension expense, information about the plan net position ofthe State Universities Retirement System (SURS) and additions and deductions from SURS plan net position have been determined on the same basis as they are reported by SURS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
For financial reporting purposes, the State of Illinois (the State) and its public universities and community colleges are under a special funding situation. A special funding situation exists when a non-employer entity (the State) is legally responsible for making contributions directly to a pension plan that is used to provide pensions to the employees of another entity (City Colleges) and 1) the amount of contributions for which the nonemployer entity (the State) is legally responsible is not dependent upon one or more events unrelated to pensions and 2) thc non-employer (the State) is,the only entity with a legal obligation lo make contributions directly to a pension plan. City Colleges recognizes its proportionate share of the State's pension expense relative to its employees as non-operating revenue and pension expense, with the expense further allocated to the related function by employees. (See Note 7)
Other Postemployment Benefits. City Colleges provides other post-employment healthcare benefits (OPEB) and life insurance to retirees and spouses. Benefit payments are recognized when due and payable in accordance with the benefit terms. There are no investments as this is a pay-as-you-go plan. (See Note 11)
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) N. Other Liabilities
Oilier liabilities include amounts due at year-end for health care, dental, vision, unclaimed property and other third-party vendors.
O. Non-Current Liabilities
Non-current liabilities include estimated amounts for accrued compensated absences, sick leave benefits (payments to eligible retirees for accumulated unused sick days), other post-employment benefits, workers' compensation claims, bonds payable and lease obligations net ofthe current portion representing the amount to be paid within the next fiscal year.
P. Premiums, Discounts, and Issuance Costs
Bond premiums and discounts are deferred and amortized over the life ofthe bonds using the effective interest method. Long-term obligations (general obligation bonds) are reported net of the applicable bond premium and discount. Bond issuance costs are expensed at the time thc debt is issued.
Q. Accrued Property Tax Refunds
Accrued property tax refunds are included in non-current liabilities. These are estimates of property taxes that may be refunded to taxpayers in the future.
R. Unearned Revenue and Deferred Inflows of Resources
Deferred inflows of resources are defined under GASB Statement No. 63 as acquisitions of net assets that are applicable to a future reporting period and should be reported as having a similar impact on net position as liabilities. Deferred inflows include property tax revenues intended to finance the subsequent fiscal year and future lease revenues related to GASB Statement 87, Leases. Deferred inflows related to OPEB represent differences between expected and actual experience and changes in assumptions, in accordance with GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions. (Sec Note 11)
Amounts received for tuition and fees, certain auxiliary activities and grant and contract sponsors that have not yet been earned are classified as unearned revenue within current liabilities.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continual) S. Net Position
City Colleges' net position is classified as follows:
Net Investment in Capital Assets - Net investment in capital assets represents City Colleges' total investment in capital assets, net of accumulated depreciation and reduced by outstanding debt obligations related to acquisition, construction, or improvement of those capital assets plus unspent bond proceeds net ofany related deferred outflows or inflows.
Restricted for Specific Purposes - Restricted net position includes assets that City Colleges is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or through enabling legislation. At June 30, 2022, City Colleges had a portion of its net position restricted for audit, agency and grants.
Unrestricted - Unrestricted net position represents resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of City Colleges and may be used at the discretion ofthe governing board to meet current expenses for any purpose.
When both restricted and unrestricted resources arc available for use, it is City Colleges' policy to use restricted resources first and then use unrestricted resources when they are needed.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
T. Classification of Revenues and Expenses
City Colleges has classified its revenues and expenses as either operating or non-operating according to the following criteria:
Operating Revenue and Expenses - Operating revenue and expenses includes activities that have the characteristics of exchange transactions, such as: (1) student tuition and fees, net of scholarship allowances, (2) sales and services of educational departments and auxiliary enterprises, (3) salaries and benefits and (4) materials and supplies.
Non-Operating Revenue and Expenses - Non-operating revenue and expenses includes activities that have the characteristics of non-exchange transactions, such as: (1) local property taxes, (2) state appropriations, (3) most federal, state, and local grants and contracts and federal appropriations, (4) gifts and contributions, (5) income from investments and (6) interest on debt.
U. Tuition and Fees
Tuition and fees include all such items charged to students for educational and service purposes. Tuition-related waivers, scholarships, and other financial aid (excluding direct loans) are reported as contra revenue to tuition revenue. Scholarships that are paid to students are recorded as financial aid expense under operating expenses. Tuition and fees revenue are recognized when the educational services are performed.
V. Use of Estimates
The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates and assumptions.
VV. Measurement of Lease Amounts
For leases that have a maximum possible term of 12 months or less at commencement. City Colleges recognizes expense based on the provisions ofthe lease contract.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
VV. Measurement of Lease Amounts (Continued)
For all other leases, City Colleges recognizes a lease liability and an intangible right-to-use asset. At lease commencement, City Colleges initially measures the lease liability at the present value of payments expected to be made during tlie lease term. Subsequently, the lease liability is reduced by the principle portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability. Lease payments made at or before the lease commencement dale, plus any initial direct costs ancillary lo placing the underlying asset into service, less any lease incentives received at or before the lease commencement date. Subsequently, the leased asset is amortized into amortization expense on a straight-line basis over the shorter of the lease term or the useful life ofthe underlying asset.
City Colleges uses its estimated incremental borrowing rate as the discount rate for leases unless the rate that the lessor charges is known. The incremental borrowing rate for leases is based on the rate of interest il would have to pay if it is issued general obligation bonds to borrow an amount equal to the lease payment under similar terms at the commencement or remeasurement date.
The lease term includes the noncancelable period of the lease plus any additional periods covered by either City Colleges or the lessor's option to extend for which it is reasonably certain to be exercised or terminated for which it is reasonably certain to not be exercised. Periods in which both City Colleges and the lessor have a unilateral option to terminate are excluded from the lease term.
Lease payments included in the measurement of lease liability including those payments that are reasonably certain of being made.
X. Pending Accounting Standards
GASB Statement No. 91, Conduit Debt Obligations, will be effective for City Colleges beginning with its year ended .lune 30, 2023. The primary objectives ofthis Statement are to provide a single method of reporting conduit debt obligations by. issuers and eliminate diversity in practice associated.with (T) commitments extended by issuers, (2) arrangements associated with conduit debt obligations and (3) related note disclosures.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
X. Pending Accounting Standards (continued)
GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, will be effective for City Colleges beginning with its year ended June 30, 2023. The primary objective ofthis Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs).
GASB Statement No. 96, Subscription-Based Information Technology Arrangements, will be effective for City Colleges beginning with its year ended June 30, 2023. The objective of this statement is to provide guidance on the accounting and financial reporting for subscription-based information technology arrangement (SBITAs) for government end users (governments).
GASB Statement No. 99, Omnibus 2022. The objectives ofthis statement are lo enhance comparability in accounting and financial reporting and to improve the consistence of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The requirements related to leases, PPPs, and SBITAs are effective for Cily Colleges beginning with its year end June 30, 2023. The requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statements 53 are effective for City Colleges beginning with its year end June 30, 2024.
GASB Statement No. 100, Accounting Changes and Error Corrections - An Amendment of GASB Statement No. 62, will be effective for City Colleges beginning with its year ended June 30, 2024. The objective of this statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent and comparable information for making decisions or assessing accountability.
GASB Statement No. 101, Compensated Absences, will be effective for City Colleges beginning with its year end June 30, 2025. The objective ofthis statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. ¦
Management has not yet completed its evaluation ofthe impact ofthe provisions of these standards on it financial statements.
t
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
2. DEPOSITS AND INVESTMENTS
The Treasurer or Chief Financial Officer may invest restricted and unrestricted funds pursuant to the Illinois Public Funds Investment Act. Investments may include current operating funds, special funds, interest and sinking funds, and other funds belonging to or in the custody of the Board, in the following types of securities, provided that: (i) such securities shall achieve the objectives described in Section 2 of these guidelines and; (ii) that such securities shall mature or be redeemable on the date or dates prior to the time when in the judgment ofthe Treasurer or Chief Financial Officer, the funds so invested will be required for expenditures by the Board. Securities shall generally be purchased with the intention that they will be held to maturity so as to minimize interest rate risk.
The investment portfolio will be diversified to avoid incurring undue concentration in securities of one type or securities of one financial institution or maturities.
In accordance with City Colleges' investment policy, funds may be invested in the following types of securities within certain limitations: (a) securities backed by the full faith and credit of the United States, (b) United States or its agencies' government securities, (c) bank certificates of deposit, (d) short-term obligations of corporations organized in thc United States, (e) money market mutual funds, when they are invested in securities noted in items (a) and (b) above, (f) obligations of agencies created by an Act of Congress, (g) savings and loan securities, (h) certain credit unions if specifically authorized by the Board of Trustees and fully secured, (i) the Illinois Funds (Money Market and Prime), (j) repurchase agreements, (k) municipal bonds, and (I) short-term bond funds that invest primarily in corporate investment grade bonds. It is the policy of City Colleges to invest its funds in a manner which will provide for the preservation of capital, meeting cash flow demands, providing for yields consistent with the market, and conforming to all state and local statutes governing the investment ofthe public funds, using the "prudent person" standard for managing the overall portfolio.
Prohibitions
Investments in the following securities are prohibited: reverse repurchase agreements, inverse floaters, derivative products, such as interest only securities (10s), principal only securities (POs) and other securities that could impart leverage to the portfolio or have highly unpredictable cash flows.
The primary objective ofthe policy is protection of investment principal, liquidity and yield within statutory constraints. This policy applies to all restricted and unrestricted funds, including operating funds, special funds, interest and sinking funds and other funds belonging to or in the custody ofthe Board.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
DEPOSITS AND INVESTMENTS (Continued) Deposits
Custodial credit risk - with regard to deposits with financial institutions, custodial credit risk is the risk that in the event of bank failure. City Colleges' deposits may not be returned. Cily Colleges' investment policy requires that investments made in excess of any applicable deposit insurance be secured by a corporate surety bond written by a surely company authorized to do business in the State of Illinois that is rated at least AA by Standard and Poor's or Aa3 by Moody's, or by an undertaking from the depository supported by a pledge of securities having a fair value that is at all times equal to or greater than the uninsured amount on deposit. At June 30, 2022, City Colleges had deposits of over $14.1 million in cash and $26.0 million in restricted cash that was not exposed to custodial credit risk.
Investments
In accordance with its investment policy, City Colleges limits its risk tolerance based on the investment's objective. Volatility of principal is not permitted or limited in order to obtain additional income or to manage the funds available for projects. Volatility of principal is defined as "selling an individual security that would cause a realization of an accounting loss on the security". City Colleges limits its risk tolerance by primarily-investing in obligations guaranteed by the United States government or securities issued by agencies of the United States government that are implicitly guaranteed by the United States government. However, City Colleges' investment policy does not specifically limit City Colleges to these types of investments, as noted above. Illinois statutes authorize City College to invest in obligations of thc U.S. Treasury and U.S. Agencies, interest-bearing savings accounts, interest-bearing time deposits, money market mutual funds registered under the Investment Company Act of 1940 (limited to U.S. Government obligations), shares issued by savings and loan associations (provided.the investments are insured by the Federal Savings and Loan Insurance Corporaiion (FSLIC), short-term discount obligations issued by the Federal National Mortgage Association, share accounts of certain credit unions, investments in the Illinois School District Liquid Asset-Fund, and certain repurchase agreements.
Custodial credit risk - as it relates to investments, custodial credit risk is the risk that in the event ofthe failure ofthe counterparty to the investment, City Colleges will not be able to recover the value of its investments held by an outside party. All City Colleges' investment counterparties are limited to banks or trust companies authorized lo do business in the State of Illinois that are member banks of the Federal Reserve System, and only to registered primary reporting dealers who are registered as broker-dealers with the Securities and Exchange Commission as required by Cily Colleges' investment policy. All of City Colleges investments were insured or collateralized and there was no investment exposed to custodial credit risk as of June 30, 2022.
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
2. DEPOSITS AND INVESTMENTS (Continued)
Concentration of credit risk - Investments issued or explicitly guaranteed by the United States government and investments in mutual funds, external investment pools, and other pooled investments are excluded from this requirement.
City Colleges' investment policy requires the investment portfolio to be diversified to avoid incurring undue concentration in securities of one type or securities of one financial institution or maturities. t
Interest Rate Risk - Interest rate risk is the risk that the fair value of investments will decrease as a result of an increase in interest rates. City Colleges' investment policy docs not limit the maturities of investments as a means of managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk - Credit risk is the risk that City Colleges will not recover its investments due to the inability ofthe counterparty to fulfill its obligation. Safety of principal is the foremost objective ofthe investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.
Obligations of corporations organized in the United States of America with assets exceeding $500,000,000; obligations must be rated at the time of purchase at one of the 3 highest classifications established by at least 2 standard rating services, and must mature not later than 3 years from the date of purchase; thc Board's investment in the short-term obligations ofa single issuer shall not exceed 10% of that corporation's outstanding obligations. U.S. dollar denominated corporate obligations of domestic issuers must be rated at the highest short-term rating category ( A-l/P-1 or equivalent) or be rated at one of the three highest long-term rating categories (A-/A3 or equivalent) by at least two of the following standard rating services: Standard & Poor's, Moody's and Fitch.
Interest-bearing savings accounts, certificates of deposit, time deposits, or any other investments constituting direct obligations of any bank as defined by the Illinois Banking Act. the deposits of which are insured by the Federal Deposit Insurance Corporation C'FDIC").
Investments made in excess of any applicable deposit insurance, including uninsured accounts in financial institutions in which multiple accounts are maintained, shall be secured by a corporate surety bond written by a surety company authorized lo do business in the State of Illinois that is rated at least AA-by Standard and Poor's or Aa3 by Moody's, or by an undertaking from the depository supported by a pledge of securities having a market value of 102% or greater than the uninsured amount on deposit or by a Federal Home Loan Bank ("FHLB") Letter of Credit ("LOC") rated AA- by Standard and Poor's or Aa3 by Moody's.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
2. DEPOSITS AND INVESTMENTS (Continued)
At June 30, 2022. the Federal Agency Bond/Note investments held by City Colleges were all rated AA+/AAA by Standard and Poor's (S&P) and Moody's, respectively. The Commercial Paper was rated A-1 by S&P and P-l by Moody's. U.S. instrumentalities (including supranational securities where the U.S. is a shareholder and voting member) were at least rated A-1/P-l, AA-/Aa3, or equivalent by Standard & Poor's, Moody's, or Fitch. U.S. dollar denominated corporate obligations of domestic issuers were at least rated Highest ST (A-l/P-1, or equivalent) or Three Highest LT Rating Categories (A-A3 or equivalent) by Standard & Poor's, Moody's, or Fitch. Municipals were at least rated Highest ST or Three Highest LT Rating Categories (SP-l/MIG 1, A-/A3, or equivalent) by Standard & Poor's, Moody's, or Fitch.
The State Treasurer maintains the Illinois Funds at net asset value based on amortized cost, which approximates fair value, through daily adjustment in the interest earnings. The pool does not meet all the criteria in GASB No. 79 paragraph 4 which allows the reporting of its investment at amortized cost. The State Treasurer also maintains the average duration ofthe pool at less than 25 days. The value of City Colleges' investment in the funds is the same as the value of the pool shares. The pool is audited annually by an outside independent auditor and copies of the report are distributed to participants. All funds deposited in the pool are classified as investments even though some could be withdrawn on a day's notice. There arc no limitations or restrictions on withdrawals from the pool. Although not subject to direct regulatory oversight, the fund is administered in accordance with the provision ofthe Illinois Public Investment Act, 30 ILCS 235. The Illinois Funds are rated AAAm by Standard and Poor's.
The Illinois Trust measures the Illinois Portfolio, HIT Class at net asset value based on amortized cost, which approximates fair value. The pool does meet all the criteria in GASB No. 79 paragraph 4, which allows the reporting of its investments at amortized cost. The Illinois Trust also maintains a weighted average maturity of 60 days or less. The value of City Colleges' investments in the funds is the same as the value ofthe pool shares. Thc pool is audited annually by an outside independent auditor and copies ofthe report are distributed to participants. All funds deposited in the pool are classified as investments even though some could be withdrawn on a day's notice. There are no limitations or restrictions on withdrawals from the pool. Although not subject to direct regulatory oversight, the fund is administered in accordance with the provision ofthe Illinois Public Investment Act, 30 ILCS 235. The Illinois Portfolio, HIT class is rated AAAm by Standard & Poor's.
34
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
2. DEPOSITS AND INVESTMENTS (Continued)
The carrying amount of investments at June 30, 2022 is shown below:
Investment Type
U.S. Treasury Bond / Note Federal Agency Bond / Note Federal Agency Collateralized Mortgage First Agency Mortgage Certificate of Deposit Corporate Note Commercial Paper Supra-National Agency Bond/Note Municipal Bond/Note Illinois Portfolio, HIT Class Illinois Funds LGJP/5000 Total investments
Investment Maturities (in years)
1 -5
7,539,219 1,137,124
14,391,513 1,849,098 236,272 740,003
8,521,651
905,569 1,036,319
Less Than 1
$
620,651 5,752,823 28,152,670 2,197,303 490,978 17,022,328 54,804,013
21,930,732 2,986.222 236.272 740,003 620,651 14,274.474 28,152,670 3,102.872 1,527,297 I7,022;328 54,804,013
S 145,397,534 $ 117,717,109 S- 27,680,425
GASB Statement No. 72 provides guidance for determining a fair value measurement for reporting purposes and applying fair value lo certain investments and disclosures related lo all fair value measurements.
City Colleges categorizes its fair value measurements within lhe fair value hierarchy established by generally accepted accounting principles (GAAP). The hierarchy is based on the valuation input used to measure the fair value ofthe asset.
Level 1 inputs are quoted prices in active markets for identical assets
Level 2 inputs are significant other observable inputs which include quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or using other inputs such as interest rates and yield curves at commonly quoted intervals, implied volatilities and credit spreads or market-corroborated inputs
Level 3 inputs are significant unobservable inputs
35
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
2. DEPOSITS AND INVESTMENTS (Continued)
The carrying amount of" investments and fair value hierarchy at June 30, 2022 is as follows:
Fair Value Measurements Using
Investments Measured at Fair Value June 30, 2022
Debt Securities
U.S. Treasury Bond/Note S 21,930.732
Federal Agency Bond / Nole 2.986,222
Federal Agency Commercial Mortgage Back Security 124,197
Federal Agency Collateralized Mortgage 112,075
First Agency Mortgage 740.003
Corporate Note 14,274.474
Commercial Paper 28,152,670
Supra-National Agency Bond'Noic 3,102.872
Municipal Bonds/Note 1,527.297
Total investments at fair value S 72.950.542
Quoted Prices in Active Significant Other Significant
Markets for Identical Observable Inputs Unobservable Inputs
Assets (Level 1) (Level 2) _ (Level 3)
S 21,930,732 S - S
2.986,222 124,197 112,075 740,003
14,274,474 ' -
28.152.670 3,102.872
_ 1,527,297 -_
S 21,930,732 S 51,019,810 S -_
Investments not Measured at Fair Value
Illinois Portfolio, NT Class S 17,022,328
Illinois Funds LGIP/5000 54,804,013
Certificate of Deposits 620,651
Tolal investments at Nel Assel Value 72446.992
Total investments S 145,397.534
Debt securities classified in Level 1 ofthe fair value hierarchy are valued using prices quoted in active markets for those securities. Debt securities classified in Level 2 are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. City Colleges does not have Level 3 investments.
36
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
3. OTHER ACCOUNTS RECEIVABLE
City Colleges' other accounts receivable consist ofthe following:
2022
Student Grants
State of Illinois
City of Chicago - TIF
Leases and other
Gross other accounts receivable
Less: Allowance for uncollectible
Other accounts receivable, net
Less: Non-current portion of City of Chicago - TIF Current portion of other receivable, net
3,332,453 18,488,476 2,599 1,547,000 2,804,55 1
26,175,079
(1,337,422)
24,837,657
(490,488)
$ 24,347,169
4. CAPITAL ASSETS
Capital assets not being depreciated: Land
Construction in progress Subtotal
July 1, 2021
51,376,464 5,657,131 57.033.595
Additions and Transfers In
12,705,466
12,705,466
Retirements and Transfers Out
(6,600,723) (6.600,723)
June 30, 2022
51,376,464 11,761,874 63.138,338
Capital assets being depreciated: Leases* Equipment Software
Buildings and improvements Subtotal
Tolal capital assets
12.198,706 64,817,510 47,878,119-1.105.655,491 1,230,549,826 1.287.583.421
58,998 425,546 5.362,622
5,847,166
18,552,632
12,198,706 64.876,508 48,303,665 ,108.439,948
,233,818.827
,296.957.165
Accumulated depreciation and amortization
Leases* 2,937,124
Equipment 57,819,287
Software 43.660,831
Buildings and improvements 363.422.991
Total accumulated depreciation 467.840,233
Capital assets, net S 819,743,188
835,291 2.622.455 1.768,955 26.879,249
1,542.985)
(1,542,985)
32,105.950
(13,553.318) $ (7,635.903) %
3,772,415 60,441,742 45,429.786 388.75.9,255
498.403,198
798.553.967
*See Note 14 for Leases.
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
NET POSITION
City Colleges' net position includes restricted and unrestricted resources (including $67 million of working cash fund). Unrestricted resources may be used at the discretion ofthe governing board to meet current expenses for any purpose. This qualifies as a stabilization arrangement, which is a formal arrangement set aside by the District to maintain amounts for budget stabilization or working capital needs. These funds may be spent through a transfer, an abolishment, or an abatement of amounts needed by the District. Amounts can be added to the working cash balance through replenishment, the issuance of bonds, or the levy of property taxes.
OTHER ACCRUALS AND OTHER LIABILITIES
City Colleges' other accruals and other liabilities consist ofthe following as of June 30, 2022:
2022
Other accruals
Accrued interest $ 1,275,617
Other accruals 687,405
Total other accruals $ 1,963,022
Other liabilities
Self insurance $ 3,241,055
Unclaimed property 7,984
ICCB 5,654,630
Other 78,590
Total other liabilities $ 8,982,259
3S
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
7. EMPLOYEE RETIREMENT PENSION PLAN
Plan Description - City Colleges contributes to the State Universities Retirement System (SURS). a cost-sharing multiple-employer defined benefit plan (Plan) with a special funding situation whereby the State of Illinois (State) makes substantially all actuarially determined required contributions on behalf of the participating employers. SURS was established July 21, 1941, to provide retirement annuities and other benefits for staff members and employees of state universities, certain affiliated organizations, and certain other state educational and scientific agencies and for survivors, dependents, and other beneficiaries of such employees. SURS is considered a component unit of the State's financial reporting entity and is included in the State's Annual Comprehensive Financial Report as a pension trust fund. SURS is governed by Chapter 40, Act 5, Article 15 ofthe Illinois Compiled Statutes. SURS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by accessing the website at www.SURS.org .
Benefits Provided - A traditional benefit plan was established in 1941. Public Act 90-0448 enacted effective January 1, 1998, established an alternative defined benefit program known as the portable benefit package. Thc traditional and portable plan Tier 1 refers to members that began participation prior to January 1, 2011. Public Act 96-0889 revised the traditional and portable benefit plans for members who begin participation on or after January 1, 2011, and who do not have other eligible reciprocal system service. The revised plan is referred to as Tier 2. New employees are allowed six months after their date of hire to make an irrevocable election whether to participate in either the traditional or portable benefit plans. A summary of the benefit provisions as of June 30, 2021 can be found in SURS Annual Comprehensive Financial Report - Notes to the Financial Statements.
Contributions - The State is primarily responsible for funding the System on behalf of the individual employers at an actuarially determined amount. Public Act 88-0593 provides a statutory funding plan consisting of two parts: (i) a ramp-up period from 1996 to 2010 and (ii) a period of contributions equal to a level percentage ofthe payroll of active members within SURS to reach 90% ofthe total Actuarial Accrued. Liability by the end of fiscal year 2045. Employer contributions from "trust, federal, and other funds" are provided under Section 15-155(b) ofthe Illinois Pension Code and require employers to pay contributions which are sufficient to cover the accruing normal costs on behalf of applicable employees. The employer normal cost for fiscal year 2021 and fiscal year 2022, respectively, was 12.70% and 12.32% of employee payroll. Contributions for fiscal years 2021 and 2022 were $2,047,5 10 and $1,540,23 1 respectively. The normal cost is equal to the value ofthe current year's pension benefit and does not include any allocation for the past unfunded liability or interest on the unfunded liability. Plan members are required to contribute 8.0% ofthe annual covered salary, except for police officers and fire fighters who contribute 9.5% of their earnings. The contribution requirements of plan members and employers are established and may be amended by the State's General Assembly.
39
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
7. EMPLOYEE RETIREMENT PENSION PLAN (Continued)
Participating employers make contributions toward separately financed specific liabilities under Section 15- 139.5(e) ofthe Illinois Pension Code (relating to contributions payable'due to the employment of "affected annuitants" or specific return to work annuitants). Section 15-155(g) (relating to contributions payable due to earning increases exceeding 6% during the final rate of earnings period), and Section 15-155(j-5) (relating to contributions payable due to earnings exceeding the salary set for the Governor). City Colleges accrued $40,149 for the liability due to earnings that exceed the Governor's salary.
For purposes of financial reporting, the State of Illinois and participating employers are considered to be under a special funding situation. A special funding situation is defined as a circumstance in which a non-employer entity is legally responsible for making contributions directly to a pension plan that is used to provide pensions to the employees of another entity or entities and either (1) the amount ofthe contributions for which the non-employer entity is legally responsible is not dependent upon one or more events unrelated to pensions or (2) the non-employer is thc only entity with a legal obligation to make contributions directly to a pension plan. The state of Illinois is considered a non-employer contributing entity. Participating employers are considered employer contributing entities.
Pension Liabilities, Expense, and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
Net Pension Liability - The net pension liability (NPL) was measured as of June 30, 2021. At June 30, 2021, the collective NPL was $28,477,079.
Employer Proportionate Share of Net Pension Liability — The amount ofthe proportionate share of the NPL to be recognized for City Colleges is $0. The proportionate share of the State's NPL associated with City Colleges is $1,410,599,964 or 4.9445%. City Colleges' proportionate share changed by 0.0124% from 4.9569% since the last measurement date on June 30. 2020. This amount is not recognized in City Colleges' financial statements. The NPL and total pension liability as of June 30, 2021, was determined based on the June 30, 2020, actuarial valuation rolled forward to the measurement date. Thc basis of allocation used in the proportionate share of net pension liability is the actual reported pensionable contributions made to SURS defined benefit plan during fiscal year 2021.
Pension Expense - For the year ending June 30, 2021, collective net pension expense was $2,342,460,058.
40
City Colleges of Chicago Community College District No. 508 [Notes to Basic Financial Statements June 30, 2022
7. EMPLOYEE RETIREMENT PENSION PLAN (Continued)
Employer Proportionate Share of Pension Expense - The employer proportionate share of the State's pension expense that is associated with City Colleges of Chicago is recognized as nonoperating revenue with matching operating expense (compensation and benefits) in the financial statements. The basis of allocation used in the proportionate share is the actual reported pensionable contributions ma"de to SURS defined benefit plan during fiscal year 2021. As a result, City Colleges recognized revenue and pension expense of $115,823,711 from this special funding situation during the year ended June 30, 2022. On the statement of revenues, expenses and changes in net position, the revenue is reflected in other state grants and contracts and the pension expense is reflected in fringe benefits.
Deferred Outflows and Deferred Inflows of Resources Related to Pensions - Deferred outflows of resources are the consumption of net position that is applicable to future reporting periods. Conversely, deferred inflows of resources are the acquisition of net position that is applicable to future reporting periods.
Collective Deferred Outflows and Deferred Inflows of Resources by Sources are as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected $ 113,467,689 $
and actual experience Changes in assumptions 776,968,084 Net difference between
projected and actual earnings
on pension plan investments -_ 2,283,514,660
Total $ 890,435,773 _$ 2,283,514,660
Collective Deferred Outflows and Deferred Inflows of Resources by Year to be Recognized in Future Pension Expenses are as follows:
Net Deferred Outllows
Year Endiim June 30 of Resources
2022 $ 34,095,451
(197,005,703)
(538,343,058)
(691,825.577)
Total $ (1,393,078,887)
41
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
7. EMPLOYEE RETIREMENT PENSION PLAN (Continued)
City Colleges of Chicago's Deferral of Fiscal Year 2022 Contributions - The City Colleges of Chicago paid S 1,540,231 in federal, trust or grant contributions to SURS defined benefit pension plan during the year ended June 30, 2022. These contributions were made subsequent to the pension liability measurement date of June 30, 2021 and are recognized as deferred outllows of resources as of June 30, 2022 on the statement of net position.
Assumptions and Other Inputs
Actuarial assumptions. The actuarial assumptions used in the June 30, 2021 valuation was based on the results of an actuarial experience study for the period from June 30, 2017 through June 30, 2020. The total pension liability in the June 30, 2020, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation Salary increases Investment rate of return
2.25 percent
3.00 to 12.75 percent, including inflation
6.50 percent beginning with the actuarial valuation
as of June 30, 2021
Mortality rates were based on the PUB-2010 employee and retiree gender distinct tables with projected generational mortality and a separate mortality assumption for disabled participants.
Assumption changes as of June 30, 2021, are salary increase rates, ranging from 3.00% to 12.75%, investment rate of return assumption decrease to 6.50% from 6.75%> in 2021, and effective rate of interest decrease to 6.50% from 6.75% in 2021.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return were adopted by the plan's trustees after considering input from the plan's investment consultants and actuary. For each major asset class that is included in the pension plan's target asset allocation as of June 30, 2021, these best estimates are summarized in the following table:
42
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
7. EMPLOYEE RETIREMENT PENSION PLAN (Continued)
Defined Benefit Plan Traditional Growth * Global Public Equity utilized Growth [; Credit Fixed Income Core Real Assets Options Strategies Non-Traditional Growth Private Equity Non-Core Real Assets Inflation Sensitive ' : U.S. TIPS
Principal Protection : .-: Core Fixed Income Crisis Risk Offset Systematic Trend Following
Alternative Risk Premia Lous Duration
Strategic Policy Allocation
' 11.00%
1 1.0 5.0 6.0
7.5 2.5
6.0
8.0
3.5 3.0 3.5
Weighted Average Long-Term Expected Real Rate of Reuitn (Arithmetic)
; 6.30%
1.82 3.92 4.20
10.45 8.83
(0.22)
(0.81)
3.45 2.30 0.91
Total Inflation
4.43% 2.25
Expected arithmetic return
Discount Rate - A single discount rate of 6.12% (a decrease of 0.37% from fiscal year 2021) was used to measure the total pension liability. This single discount rate was based on an expected rate of return on pension plan investments of 6.50% and a municipal bond rate of 1.92% (based on the Fidelity 20-Year Municipal GO AA Index as of June 30, 2021). The projection of cash flows used to determine this single discount rate were the amounts of contributions attributable to current plan members and assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rales equal lo lhe statutory contribution rates under SURS funding policy. Based on these assumptions, the pension plan's fiduciary net position and future contributions were sufficient to finance the benefit payments through the year 2075. As a result, thc long-term expected rate of return on pension plan investments was applied to projected benefit payments through the year 2075, and the municipal bond rate was applied to all benefit payments after that date.
43
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
7. EMPLOYEE RETIREMENT PENSION PLAN (Continued)
Sensitivity ofthe Net Pension Liability to Changes in the Discount Rate - Regarding the sensitivity of the NPL to changes in the single discount rate, the following presents the State's NPL, calculated using a single discount rate of 6.12%, as well as what the State's NPL would be if it were calculated using a single discount rate that is 1-percentage-point lower or 1-percentage-point higher:
Current Single Discount
1% Decrease Rate Assumption 1% Increase
5.12% 6.12% 7.12%)
$35,000,704,353 $28,528,477,079 $23,155,085,730
Additional information regarding the SURS basic financial statements including the plan's net position can be found in the SURS Annual Comprehensive Financial Report by accessing the website at www.SURS.org .
8. CHANGES IN NON-CURRENT LIABILITIES
Changes in non-current liabilities for the year ended June 30, 2022 are as follows:
Reductions/ Amounts due
July 1,2021 Additions Adjustments June 30, 2022 within one year
2,982,331 105,759,050 301,220,000 7,794,437 1,145,668 19,126,094 9.266,760 7,051,313
Accrued compensated absences S 3.554,227 S 6,720,113
25.586
Sick leave benefits
Other post-retirement benefits
Bonds payable
Bonds premiums and discounts Workers compensation Accrued property tax refund Lease obligations Other
S (6,582,108) (338,462) (15,510,317) (5,265,000) (678,284) (370,902) (6,312,508) (963,952) (765,576)
3,692,232 2,669,455 90,248,733 295,955,000 7,116,153 1,206,644 17,099,921 8,302,808 6,285,737
1,643,485 393,591
5,530,000
488,615
904,419 788,544
S 457,899,880 S 11,463,912 S (36,787,109) S 432,576.683 $ 9.748.654
44
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
ACCRUED COMPENSATED ABSENCES
Administrators and full time, non-bargained for employees accrue and accumulate paid vacation days based upon their years of service and cannot accrue in excess ofthe maximum number of vacation clays as set forth in the Board policy and procedures, Article IV. Bargained for employees receive paid leave days in accordance with their applicable collective bargaining agreements. Accumulated unused vacation leave banks will be paid out upon termination of employment.
At June 30, 2022, City Colleges recorded a liability of $3,692,232 for compensated absences and estimated that $1,643,485 of these liabilities is current and due within one year. (See NoteS)
SICK LEAVE BENEFITS
Upon the retirement, permanent disability, or death of a full-time eligible employee, it is the policy of City Colleges to pay over a three to five-year period an amount equal to a percentage ofthe individual's accumulated unused sick days in the form ofa termination benefit. Eligible employees include administrative and non-bargaincd-for employees, if hired prior to January 1, 2012 and certain union-represented employees pursuant to their respective collective bargaining agreements, who have served continuously for 10 years or more and are eligible for an annuity under the State University Retirement System (SURS), generally at age 55. The method of calculating the value of an eligible employee's termination benefit liability uses the actual sick leave balances at 80% multiplied by thc current daily rates.
At June 30, 2022, City Colleges accrued $2,424,338 for the estimated present value of these future benefits for current eligible employees and $245,117 in benefits payable to inactive (retired) employees for a total of $2,669,455. (See Note 8)
OTHER POST-EMPLOYMENT BENEFITS
Plan Description: In addition to providing the pension benefits described in Note 8, City Colleges provides other post-employment healthcare benefits (OPEB) and life insurance to retirees and their spouses. The benefits, benefit levels, employee contributions and employer contributions are governed by City Colleges and can be amended by City Colleges through its personnel manual and union contracts. The plan is a single employer defined benefit plan. An irrevocable trust has not been established to account for the plan, so the plan is not accounted for as a trust fund and does not issue a separate report.
45
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
11. OTHER POST-EMPLOYMENT BENEFITS (Continued)
Benefits Provided: Cily Colleges pays approximaiciy 85% of the medical and life insurance premiums for most retirees and spouses. For other retirees, City Colleges pays a portion of the medical premium. To be eligible for benefits, an employee must qualify for retirement under SURS. It is expected that all full-time active employees who retire directly from City Colleges and meet the eligibility criteria will participate. Effective October 5, 2017, City Colleges eliminated the other post-employment benefits for new administrators and non-bargained for employees not covered by a collective bargaining agreement.
Membership: As of June 30, 2022 consists of:
2022
Retirees currently receiving benefits 430
Active employees 1,481
TOTAL 1,911
Participating Rmployers J_
Funding Policy: Currently, City Colleges provides subsidized coverage for the medical, dental and vision insurance for a period of 10 years from the employee's retirement date. Retired employees are covered for life insurance for a period of six to ten years, with City Colleges paying the cost ofthe coverage. During thc ten-year subsidy period, City Colleges pays approximately 85% ofthe cost ofthe premiums and retirees pay approximately 15% of the cost ofthe medical, dental and vision coverage. City Colleges' contribution is estimated and is based on premiums, retiree contributions and retirees participating in the plan in 2022. The actuarial valuation is used to determine the total actuarial accrued liability and the annual OPEB expense for the post-retirement medical and life insurance benefits provided for purposes of GASB Statement No. 75. For the fiscal year ended June 30, 2022, City Colleges contributed $5,304,869.
The City Colleges' total OPEB liability was determined by an actuarial valuation as of July 1, 2021 and rolled forward to the measurement date of June 30, 2022.
46
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
11. OTHER POST-EMPLOYMENT BENEFITS (Continued)
Annual OPEB costs and the total OPEB liability are based on the calculations and parameters prescribed in GASB Statement No. 75. The Entry Age Normal actuarial cost method was used. Thc Actuarially Determined Contribution (ADC) expense includes interest charge on the Unfunded Actuarial Liability and the gains and losses are amortized over the "Average Service to Retirement" of 4.40 years. The amortization, of gains, losses, and actuarial assumption changes arc referred to as "deferred inflows and outflows". The assumptions also include data regarding demographic and mortality rates, an inflation rate of 2.6% per year, salary rate increase of 2.60%, an interest rate assumption of 3.54% per year, and a healthcare cost trend rale assumption that starts at 2.90% to 4.0% over 52 years. Mortality rales were based on the PUB-2010 headcount-vveighted for Teachers, projected fully generationally with MP-2021 ultimate scale.
OPEB Assumption changes:
Valuation date Measurement date Actuarial cost method Inflation
Medical trend rate
Salary increases including inflation
Discount rate
20-Year Tax Exempt Municipal Bond Yield Mortality table
Projected fully generationally with
2022
July 1,2021 June 30, 2022 Entry age normal 2.60%
2.90% - 4.00% 2.60%
3.54%
Pub-2010 Teachers MP-2021 ultimate scale
2021
July 1, 2019 June 30, 2021 Entry age normal 2.00%
5.50%-4.00% 2.50%.
2.16%
Pub-2010 Teachers MP-2018
This valuation also considers projections and estimates of future retiree healthcare benefits based on actuarial standards issued by the Actuarial Standards Board. In performing the actuarial valuation of the OPEB program, the actuarial assumptions for fiscal year 2022 included premium rates, payroll data, variation of healthcare costs, census data regarding participants and age factors in each plan.
47
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
11. OTHER POST-EMPLOYMENT BENEFITS (Continued)
Actuarial calculations of City Colleges' OPEB plan reflect a long-term perspective. Calculations are based on the OPEB benefits provided under the terms ofthe substantive plan in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members. Actuarial valuations for OPEB plans involve estimates ofthe value of reported amounts and assumptions about the probability of events far into the future.
Thc actuarial value of assets was not determined as City Colleges has not advance-funded its obligation. Based upon the above valuations. City Colleges' total OPEB liability is $90,248,733 as of June 30, 2022.
Changes in the Total OPEB Liability
Total OPEB Liability
Balance as of June 30, 2021 J 105,759,050
Changes for ihe Year:
Services Cost 1,697,411 Interest 2,264,072 Change in Benefit Terms
Difference between Expeted and Actual Experience (10,987,691)
Change of Assumptions (3,179,240)
Bene 111 Payments (5,304,869)
Net Changes: (15,510,317) .
Balance as of June 30,2022 $ 90,248,733
Changes in the actuarial assumptions reflect the changes in the discount rate from 2.16% as of June 30, 2021 to 3.54%), an increase of 1.38% as of June 30, 2022. There were no changes of benefit terms and no significant changes between the valuation date and the fiscal year end.
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB: For the year ended June 30, 2022, City Colleges recognized OPEB expense of ($884,444). At June 30, 2022, City Colleges reported deferred outflows and inflows of resources related to OPEB from the following sources.
Deferred Inflows Deterred Outflows
of Resources of Resources
Differences between expected
and actual experience S (8,687,260) S
Changes oi"assumptions (2,456.685) 3.146,037
Total S (fj,143",945) S 3,146,037"
4S
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
11. OTHER POST-EMPLOYMENT BENEFITS (Continued)
Other amounts reported as deferred outflows of resources and (deferred inflows) of resources related to OPEB will be amortized over the average remaining service lives ofthe active and inactive members and will be recognized in OPEB expense as follows:
Year ended June 30
$ (1,172,694)
(2,317,555)
(3,219,757)
(1,287,903)
Total $ (7,997,909)
Sensitivity ofthe total OPEB liability to changes in the discount rate.
The following chart presents the total OPEB liability of the plan as of June 30, 2022, calculated using the discount rate of 3.54% for a 20-year Tax Exempt Municipal Bond Yield, as well as what the total OPEB liability would be if calculated using a discount rate that is 1 percentage point lower (2.54%) or 1 percentage point higher (4.54%) than the current discount rate.
1% Decrease Discount rate 1% Increase
(2.54%) (3.54%,) (4.54%)
Total OPEB liability $ 97,810,837 5 90,248,733 $ 83,506,511
Sensitivity ofthe total OPEB liability to changes in the health care trend rate.
The following chart presents the total OPEB liability of the plan as of June 30, 2022, calculated using the current healthcare cost trend rate as well as what the total OPEB liability would be if calculated using a healthcare cost trend rate that is 1 percentage point lower or 1 percentage point higher than the current healthcare cost trend rate.
- ¦ Current Trend
1 % Decrease Rate 1 % Increase
Total OPEB liability $ 82,631,430 $ 90,248,733 $ 98,794,373
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
12. LONG-TERM DEBT
General Obligation Bonds - Series 2013: On October 8, 2013, City Colleges issued $250,000,000 in Unlimited Tax General Obligation Bonds (Series 2013) at a net premium of $8,233,226. The bonds were issued with interest rates ranging from 4.00% to 5.50% with payment dates of June 1 and December 1 of each year. The proceeds derived from the issuance of the bonds were used to (i) construct, acquire and equip City Colleges' campus and administrative buildings and make site improvements and other capital expenditures related to the initial five-year $555 million capital improvement plan and (ii) pay the cost of issuance of the bonds including the underwriters' discount. The bonds are secured by thc pledged revenues of tuition and fees, and state grants. Furthermore, City Colleges has levied the pledged property taxes to satisfy the debt service on the bonds if the pledged revenues are insufficient; however, based on projected receipts of pledged revenues, City Colleges anticipates that all pledged taxes will be abated on a year-by-year basis prior to such pledged taxes being extended.
Following is the future debt service requirements for the Bonds:
Fiscal Year Principal Payment Interest Total
2023 $ 5,530,000 $ 11,275,438 S 16,805,438
5,805,000 10,992,063 16,797,063
6,095,000 10,694,563 16,789,563
6,400,000 10,374,188 16,774,188
6,735,000 10,029,394 16,764,394
2028 - 2032 39,380,000 44,305,689 83,685,689
2033 - 2037 50,810,000 32,577,313 83,387,313
2038 - 2042 65,740,000 17,243,275 82,983,275
2043 - 2044 31,395,000 1,669,369 33,064,369
Total S 217,890,000 $ 149,161,292 S 367,051,292
General Obligation Bonds - Series 2017: On December 11, 2017, City Colleges issued $78,065,000 in Unlimited Tax General Obligation Bonds (Series 2017) at a net premium of $7,330,176. The bonds were issued with interest rates ranging from 4% to 5% with payment dates of June 1 and December 1 of each year. The proceeds derived from the issuance ofthe bonds were to pay for (i) all or a portion ofthe costs ofthe Capital Plan, (ii) any capitalized interest on the Bonds, (iii) costs of issuance ofthe Bonds including bond insurance. The Bonds are secured by the pledged revenues of tuition and fees, and state grants. Furthermore, City Colleges has levied the pledged property taxes to satisfy the debt service on the bonds ifthe pledged revenues are insufficient; however, based on projected receipts of pledged revenues. City Colleges anticipates that all pledged taxes will be abated on a year-by-year basis prior to such pledged taxes being extended.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
12. LONG-TERM DEBT (Continued)
Following is the future debt service requirements for the Bonds:
Fiscal Year Principal Payment Interest Total
2023 $ - $ 3,893,700 $ 3,893,700
110,000 3,890,950 4,000,950
115,000 3,885,325 4,000,325
120,000 3,879,450 3,999,450
130,000 3,873,200 4.003,200
2028 - 2032 , 730,000 19,262,250 19,992,250
2033 - 2037 915,000 19,070,700 19,985,700
2038 - 2042 1,135,000 18,848,325 ' 19,983,325
2043 - 2047. 54,860,000 14,610,000 69,470,000
2048 19,950,000 498,750 20,448,750
Total $ 78,065,000 S 91,712,650 $169,777,650
City Colleges has pledged revenues lo repay its bond issue. Thc pledges will remain until the bonds are retired. The amount of pledges remaining as of June 30, 2022 is as follows:
Pledge Commitment
Debt Issue Pledged Revenue Source Remaining End Date
Series 2013 Tuition, fees, and stale grant S 367,051,292 2044
Series 2017 Tuition, fees, and state grant 169,777,650 2048
Total S 536,828,942
Pledge Revenue
Debt Issue Pledged Revenue Source
Series 2013 Tuition, fees, and state grant $ 140,61 1,231 Series 2017 Tuition, fees, and state grant 140,611,231
Principal and Interest Retired
16,810,313 3,893,700
Percentage of Revenue Pledged
11.96% 2.77%
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
LONG-TERM DEBT (Continued)
Investors who purchase municipal bonds use debt ratings as an indicator of financial stability of an organization and consequently the safety and security of the debt sold by that organization. In general, higher credit ratings often result in lower borrowing costs via reduced interest rates paid on municipal bonds. A strong rating also promotes a wider market and more buyers of City Colleges' municipal bonds. There are several rating agencies that assign ratings to municipal debt, including debt issued by City Colleges. As of June 30, 2022, City Colleges' current ratings are A+ and BBB by Fitch Ratings and S&P Global Ratings, respectively.
RISK MANAGEMENT
City Colleges is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. These matters arc managed by thc Office of Risk Management in concert with the Office of the General Counsel and the District's insurance broker, insurance carriers and third-party claims administrator.
A. General Liability - Property Policy and Educators Legal Liability Policy
General Liability includes claims of property and non-property matters. This exposure is insured under a buffer policy and an excess policy. The underlying retention is $250,000. Property insurance is designed to provide coverage for the District's real estate assets, boilers, machinery, and contents as well as its vehicles. City Colleges maintains a commercial property policy with limits equal to $500,000,000 with various sub-limits dependent upon the nature of thc loss. The retention stands at $25,000.
The amount of liability of Cily Colleges is further limited by the Local Government and Governmental Employees Tort Immunity Act. This Act gives City Colleges the authority to levy a special judgment tax or to issue bonds to pay qualifying tort related expenses.
The District procures an Educators Legal Liability Policy (ELL) to cover a broad range of non-bodily injury or non-property damage liability claims made against the District, administrators, employees and staff and includes a sublimit providing Directors & Officers Liability in the Policy amount of $10,000,000 to address the actions of the Board of Trustees. Claims associated with ELL matters are managed by the Office of the General Counsel with cooperation ofthe Office of Risk Management. Policy limits of $5,000,000 in the aggregate and $5,000,000 per occurrence apply, with retention of $250,000.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
.13. RISK MANAGEMENT (Continued)
City Colleges follows the practice of recognizing the expenses for general liability claims in thc year such settlements become probable and estimable. City Colleges has accrued funds for estimated future claims of $1,610,775 as of June 30, 2022.
City Colleges'"management believes there are no material lawsuits or claims covered by thc general liability self-insurance programs that have not been adequately accrued.
Health Insurance
City Colleges self-insures for a portion of its health costs for eligible employees. Future claims are estimated based on historical charges and lag periods. City Colleges has accrued estimated medical expenses of Sl,630,280 as of June 30, 2022 that have been incurred, but not paid.
Workers'1 Compensation
City Colleges retains a portion of workers' compensation risk and maintains an excess commercial policy for individual claims exceeding $600,000 up to the statutory limit. City Colleges estimates future claims based on a loss development factor and a specific claim reserve. City Colleges' management believes that there are no material lawsuits or claims covered by the workers' compensation self-insurance program that have not been adequately covered. City Colleges' has accrued estimated workers' compensation liability of $1,206,644 and estimated that $488,615 is current and due within one year. (See Note 8).
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
13. RISK MANAGEMENT (Continued)
The following table shows the activity within City Colleges' self-insurance liability, which is reported within other current liabilities on the statement of net position. (See Note 6)
Summary of Changes in Self-Insurance*
Incurred Payment
June 30, 2021 Claims on Claims June 30, 2022
General liability $ 1,853,775 $ 17,000 S (260,000) $ 1,610,775
Health insurance 921,637 32,897,972 (32,189,329) 1,630,280
Workers'compensation 1,145,668 431,878 (370,902) 1,206,644
$ 3,921,080 $33,346,850 $ (32,820,231) $ 4,447,699
Incurred Payment
June 30,2020 Claims on Claims June 30, 2021
General liability $ 1,753,775 $ 248,465 $ (148,465) $ 1,853,775
Health insurance 905,799 29,262,425 (29,246,587) 921,637
Workers' compensation 1,177,121 -_ (31,453) 1,145,668
$ 3,836,695 $29,510,890" $ (29,426,505) $ 3,921,080
* Workers' compensation is also presented in Note 8. 14. LEASES
A. Lessor
City Colleges entered into a five-year lease for office space in Truman College commencing September 1, 2017. The lease also requires the lessee to pay a one-time fee of $75,000 to cover the construction cost. The total amount of thc inflows (revenue) during the fiscal year is $49,500. The interest rate for this lease is 2.26%.
City Colleges entered into a three-year lease for office space in Kennedy-King College commencing April 1, 2019. The total amount ofthe inflows (revenue) during the fiscal year is $23,472. The interest rate for this lease is 2.72%.
City Colleges entered into one-year lease for office space in Arturo Velasquez Institute with options to renew. The lease has been renewed to October 2022. The total amount ofthe inflows (revenue) during the fiscal year is $23,888. The interest rate for this lease is 3.46%.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
14. LEASES (Continual)
A. Lessor (continued)
City Colleges did not incur revenue related lo residual value guarantees or lease termination penalties. It also does not have any agreements that include sale-leaseback and lease-leaseback transactions.
B. Lessee
City Colleges entered into a twelve-year, ten-month lease for its District Office commencing on May 1, 2018 and terminating on May 28. 2031. City Colleges has the option to renew the term ofthis lease for one additional period of five years, which it is reasonably certain it will exercise. Total outflows (expense) recognized during the fiscal year for payments is $82,685. The annual interest rate charged on this lease is 4.5%.
City Colleges also entered into a five-year lease for its inspector general office beginning July 1, 2014. City Colleges also renewed the contract to extend it to December 31, 2028. The total outflows (expense) recognized during the fiscal year is $22,680. The annual interest rate charged on this lease is 3.31%.
City Colleges entered into two five-year leases with two separate vendors. Both leases started July 1, 2017 and both have an option to renew for two additional years. Thc total outllows (expense) recognized during the fiscal year is $272,801. The annual interest rate charged on both leases is 2.5%.
City Colleges did not incur expenses regarding its leasing activities that related to residual value guarantees or lease termination penalties. It also does not currently have an agreement that includes sale-leaseback and lease-leaseback transactions as a lessee.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
14. LEASES (Continued)
Leased assets:
Buildings
Equipment Total leased assets
Accumulated amortization:
Buildings
Equipment Total accumulated amortization Total leased assets, net
S
S 10,494,519 $ 1,704,187
591,836 243,455
12,198,706
835,291
1,943,015 994,109
2,937,124
$ 9,261,582 $ (835,291) $
$ 10,494.519 1,704,187 12,198.706
2,534,851 1,237,564 3,772,415 $ 8,426,291
Future annual lease payments are as follows:
Principal Interest
Fiscal Year Amount Amount Total
2023 $ 904,419 $ 193,525 $ 1,097,944
863,233 229,090 1,092,323
661,125 230,168 891,293
642,155 263,058 905,213
623,575 295,558 919,133
2028 - 2032 2,807,753 - 1,919,478 4,727,231
2033 - 2037 1,800,548 1,885,454 3,686,002
$ 8,302,808 $ 5,016,331 $ 13,319,139
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
15. TAX ABATEMENT
GASB Statement No. 77, Tax Abatement Disclosures, requires disclosure of tax abatement information about a reporting government's own tax abatement agreements and those that are entered into by other governments and that reduced the reporting government's tax revenues. It requires the government to disclose: (I) Brief descriptive information about the agreement; (2) The gross dollar amount of taxes abated during the period; and (3) Commitments made by government, other than to abate taxes, that are part ofthe tax abatement agreement.
Tax Abatement Agreement Entered into Directly by City Colleges -The Boeing Company
City Colleges entered into a Tax Reimbursement Payment Agreement with The Boeing Company ("Boeing") on November 1, 2001. Under the provisions of Section 18 ofthe Property Tax Code and thc Corporate Headquarters Relocation Act, City Colleges is allowed to make annual payments to Boeing in an amount not to exceed the property taxes paid directly or indirectly by Boeing for premises occupied pursuant to a written lease. The annual payment may not exceed 20 years. The relocation of Boeing will provide no less than 500 full time jobs and create a substantial public benefit and foster economic growth and development in the city of Chicago. .
The agreement requires Boeing to submit the "Annual Boeing Summary Compliance Report" and "Annual Reimbursement Form" to City Colleges for reimbursement. In order to receive the reimbursement, Boeing must have at least $25 billion in annual world-wide revenues, satisfy the MBE/WBE requirements, comply with the resident hiring and prevailing wage requirements, employ a minimum of 500 full lime employees in Chicago, and lease and occupy not less than 125,000 rentable square feet in Chicago, among other requirements.
Fiscal year 2022 would have been the final year of reimbursement, but Boeing stated that it would not qualify for reimbursement. Therefore, City Colleges did not reimburse Boeing for fiscal year 2022.
Tax Abatement Agreements Entered into by Other Governments - Cook County
Cook County provides tax reductions under numerous programs with different taxpayers. The purpose of these agreements is to encourage the development and rehabilitation of new and existing industrial and commercial property, reutilization of abandoned properly, and increase multi-family residential affordable rental housing throughout Cook County by offering a real estate tax incentive. An eligibility application must be filed prior to commencement ofa project and include a resolution from the municipality where the real estate is located. Once the project has been completed, the applicant must file an Incentive Appeal Form with the County Assessor's Office. Upon approval by the County Assessor's Office and based on the property classification, the applicant is eligible to receive one ofthe following tax incentives:
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
15. TAX ABATEMENT (Continued) ¦
Property will be assessed at 10% of market value for the first 10 years, 15% in the 1 l,h year and 20% in thc 12"' year.
Property will be assessed at 10% of market value for the first 3 years, 15% in the 4lh year and 20% in the 5lh year.
Property will be assessed .at 10% of the market value to 10 years from the date of completion of major rehabilitation.
Without the incentive, the property tax would be assessed at 25% of its market value. This incentive constitutes a substantial reduction in the level of assessment and results in significant tax savings for eligible applicants. For fiscal year 2022, City Colleges estimated its portion of annual abatement of property taxes to various taxpayers under the development incentive programs approximates $2.2 million.
16. DISCRETELY PRESENTED COMPONENT UNIT
Operations
City Colleges of Chicago Foundation (the "Foundation") is an Illinois not-for-profit, Tax-exempt Corporation established to pursue financial support from the private sector and to promote the programs of the City Colleges of Chicago, Community College District No. 508 ("City Colleges"). The Foundation receives, administers, and distributes funds to City Colleges for various grants, scholarships, and programs. Substantially all of the Foundation's revenues and support are for the benefit of City Colleges. The Foundation is supported primarily through donor contributions and grants. The Foundation is considered a component unit of City Colleges and is discretely presented in City Colleges' financial statements.
Significant Accounting Policies
Management Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
16. DISCRETELY PRESENTED COMPONENT UNIT (Continued)
B. Significant Accounting Policies (continued)
Cash and Cash Equivalents- As of June 30, 2022, cash and cash equivalents include highly liquid investments with maturities of three months or less at the date of purchase, and are stated at cost, which approximates fair value. The Foundation maintains its cash in commercial bank deposit accounts, which, at times, may exceed federally insured limits. Thc Foundation has not experienced any losses in such accounts. The Foundation believes it is not exposed to any significant credit risk on cash and cash equivalents.
Investments - The Foundation's investment policy permits the Foundation's board of directors to oversee the investment of Foundation assets through the use of an internally appointed investment committee and external investment managers and custodians. The policy reflects the objectives and constraints associated with investing the Foundation's assets. Investments are measured at fair value in the statement of financial position. Net investment return (including realized and unrealized gains and losses on investments, interest, and dividends) is reported as an increase or decrease in net assets without donor restrictions, unless such income or loss is restricted by explicit donor stipulations or by law.
Contributions - Contributions, including unconditional promises to give, are recognized as revenue in the period received. Conditional promises to give are not recognized as revenue until the conditions on which they depend are substantially met. Contributions of assets other than cash arc recorded at their estimated fair value. Contributions receivable at June 30, 2022 are considered fully collectible and management has determined no allowance is necessary.
Contributed Services - The Foundation receives contributed services consisting of donated accounting services and other operating support from City Colleges. These amounts are included as contributed services revenue in the statement of activities.
Functional Allocation of Expenses - Expenses are recognized in the period they are incurred. When an expense is identified with a specific program, fundraising, or general and management function, il will be charged directly to that category. In some circumstances, an expense will be allocated between thc program services, fundraising, or general and management categories based on lhe specific transaction. The accounting services received consist of salaries and fringe benefits paid to City Colleges employees who estimate their percentage of time spent on Foundation duties. The other operating support includes occupancy cost (lease and utilities) which is allocated based on square footage, as well as the audit fee.
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Citv Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
DISCRETELY PRESENTED COMPONENT UNIT (Continued)
B. Significant Accounting Policies (continued)
Basis of presentation - The financial statements ofthe Foundation have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), which require the Foundation to report information regarding its financial position and activities according to the following net asset classifications:
Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions and may be expended for any purpose in performing the primary objectives of the organization. These net assets may be used at the discretion of the Foundation's management and the board of directors.
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors and grantors. Some donor restrictions are temporary in nature; those restrictions will be met by actions ofthe Foundation or by thc passage of time. Other donor restrictions arc perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity.
Donor restricted contributions are reported as increases in net assets with donor restrictions. When a restriction expires, net assets are reclassified from net assets with donor restrictions to net assets without donor restrictions in the statements of activities.
Tax Status - Thc Foundation is exempt from federal income tax under Internal Revenue Code Section 501(c) (3). Accordingly, no provision for such taxes has been recognized in these financial statements.
The accounting standard on Accounting for Uncertainty in Income Taxes addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, the Foundation may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits ofthe position. Examples of tax positions include the tax-exempt status of thc Foundation and the various positions related to the potential sources of unrelated business income tax. There were no unrecognized tax benefits identified or recorded as liabilities during the year ended June 30, 2022.
Thc Foundation files Forms 990 in the U.S. federal jurisdiction and the State of Illinois.
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City Colleges oi Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
16. DISCRETELY PRESENTED COMPONENT UNIT (Continued) B. Significant Accounting Policies (continued)
Pending Accounting Pronouncements -- In February 2016, The Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842). The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under thc new guidance, lessees are required to recognize lease assets and lease liabilities on the statement of financial position for all leases with terms longer than twelve months. Leases will be classified'as either finance or operating, with classification affecting the pattern of expense recognition in the statement of activities. The new standard is effective for thc Foundation for the year ending June 30, 2023. The Foundation is currently evaluating the effect the standard will have on its financial statements.
In September 2020, the FASB issued ASU 2020-07, Not-fbr-Profil Entities (Topic 958) Presentation and Disclosures by Not-for-Projit Entities for Contributed Nonfmancial Assets, requiring an entity to present contributed nonfmancial assets as a separate line item in the statement of activities, apart from contributions of cash or other financial assets. The guidance in this ASU also requires an entity lo disclose the contributed non financial assets by category that identifies the type of nonfmancial asset and disclose certain required information. The new standard is effective for the Foundation in the fiscal year ending June 30, 2023. The Foundation is currently evaluating the impact ofthe adoption of the standard in its financial statements.
Subsequent Events— The Foundation has evaluated all subsequent events through November 30, 2022, which is the date the financial statements were available to be issued.
C. Investments
The components of net investment loss for the year ended June 30, 2022 arc as follows:
Interest and dividends Net realized gains Net unrealized losses
Total
2022
$ 249,254 1.671,726 (4,014,421) $(2,093,441)
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
16. DISCRETELY PRESENTED COMPONENT UNIT (Continued) D. Fair Value of Investments
The Fair Value Measurements and Disclosures Topic of the Accounting Standards Codification defines fair value as the price that would be received for an asset or paid to . transfer.a liability in an orderly transaction among market participants on the measurement date. The accounting guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:
Level 1 - Quoted prices for identical instruments in active markets.
Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs are observable in active markets.
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are not observable.
The Foundation attempts to establish fair value as an exit price in an orderly transaction consistent with normal settlement market conventions. The Foundation is responsible for the valuation process and seeks to obtain quoted market prices for all securities.
For the year ended June 30, 2022, the application of valuation techniques applied to similar assets and liabilities has been consistent. The Foundation's investments are the only assets or liabilities that are measured at fair value on a recurring basis.
The Foundation assesses the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer. For the year ended June 30, 2022, there were no such transfers.
The Foundation invests in domestic and fixed income mutual funds, which arc open-ended Securities and Exchange Commission registered investment funds with a daily net asset value ("NAV"). These mutual funds are designed to be liquid and allow investors to sell their interests daily to the fund at the published NAV, with no restrictions on redemptions and no unfunded commitments.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
16. DISCRETELY PRESENTED COMPONENT UNIT (Continued)
D. Fair Value of Investments (continued)
The Foundation also invests in alternative investments - real estate fund. The fair value of certain funds is based on the NAV of units of the fund. The NAV, as provided by the investment manager, is used as a practical expedient to estimating fair value. The NAV is based upon the fair value of the underlying investments comprising the fund less its liabilities. Redemption is allowed quarterly with 60 days notice. There are no unfunded commitments.
Assets measured at fair value based on NAV using the practical expedient as of June 30, 2022 are as follows:
Mutual funds: 2022
Fixed income funds ' $ 3,368,507
Equity funds 8,434,473
Alternative investment - real estate fund 500,000 Total $12,302,980
E. Net Assets with Donor Restrictions
Net assets with donor restrictions at June 30, 2022 are restricted to the following puiposes:
Net Assets with Donor Restrictions 2022
Subject to expenditure for specified purpose:
Scholarships and instructional services $13,854,868
Goldman Sachs 10,000 Small Businesses Initiative - 259,149
Project Grants 480,852
Miscellaneous 908,376
Time Restriction 4,48 1,814
Purpose and/or time restrictions $ 1 9,985,059
Endowment (corpus): 2022
Scholarships $ 1,959,977
Miscellaneous 405
Endowment (corpus) $ 1,960,382
The above amounts of $ 19,985,059 and $1,960,382. totaling $21,945,441 are reflected as net assets with donor restrictions on the Statement of Activities.
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
DISCRETELY PRESENTED COMPONENT UNIT (Continned) E. Net Assets with Donor Restrictions (continued)
Net assets released from donor restrictions are as follows for the year ended June 30, 2022:
Scholarships
Instructional services and supplies
Goldman Sachs 10,000 Small Businesses Initiative
Project Grants
Total released from donor restrictions
2022
$ 2,019,930
894,355 959,825 2.240,848
$ 6,114,958
F. Endowment Net Assets
The Foundation has perpetual donor-restricted endowment net assets that consist of 15 individual funds established for a variety of donor-restricted purposes. Net assets associated with perpetual restrictions are classified and reported based on the existence of perpetual donor-imposed restrictions.
The Foundation has interpreted the Uniform Prudent Management of Institutional Funds Act (UPM1FA) as requiring the preservation ofthe fair value ofthe original gift, as ofthe gift date of the donation, as perpetual restricted funds in the absence of explicit donor stipulations to the contrary. As a result ofthis interpretation, the Foundation classifies as perpetual donor restricted net assets (a) the original value ofthe gifts, (b) the original value of subsequent gifts, and (c) accumulations made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. In accordance with UPMIFA, the Foundation considers the following factors in making a determination to appropriate or accumulate perpetual donor-restricted funds:
.1. The duration and preservation ofthe fund
The purposes ofthe Foundation and the donor-restricted fund
General economic conditions
The possible effect of inflation and deflation
The expected total return from income and the appreciation of investments
Other resources ofthe Foundation
The investment policies ofthe Foundation
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City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
DISCRETELY PRESENTED COMPONENT UNIT (.Continued) F. Endowment Net Assets (continued)
Funds with Deficiencies - From time to time, the lair value of assets associated with individual donor restricted funds may fall below the level that the donor or UPMIFA requires the Foundation to retain as a fund of perpetual duration. There were no deficiencies ofthis nature as of June 30, 2022.
Changes in endowment net assets for the year ended June 30, 2022, are as follows:
Endowment net assets - beginning of year Investment return:
Investment income
Net loss (realized and unrealized) Total investment return Contributions
Appropriation of endowment assets
for expenditures Endowment net assets - end of year
With Donor Restriction
$ 4,747,249
70,196 (624,333) (554,137)
(715,61 1) $ 3,477,501
G. Related Party Transactions
The Foundation receives donated accounting services and other operating support from City Colleges. The Foundation estimates the fair value of these services to be $587,499. These amounts have been included as contributed services and related expenses in the statement of activities.
City Colleges oi" Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
16. DISCRETELY PRESENTED COMPONENT UNIT (Continued) H. Contributions Receivable
Contributions receivable consisted ofthe following at June 30. 2022
$ 2,327,193.
1,366,667
450,000
450,000
4,593,860
Less discount (1 1 2,046)
Total $ 4,481,814
I. Functional Expenses
The Foundation expenses by function are as follows:
Total
Fundraising
$ 66,358 28.241
S 80,461 22,412
$ 4,185,106 105,672 4,684 2,019,930 12,439 48,170 2,085 587,499
Program Scholarships Management
Services Awarded and General
Supplies Travel Scholarships Bank lees Equipment rental Liability insurance Contributed services
Professional services $ 4,038,287 $
55,019 4,684
48,170 96,204
2,019,930
12,439
2,085 395,155
96,140
$ 4,194,130 % 2,019,930 S 512,552 $ 238,973 $ 6,965,585
66
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
DISCRETELY PRESENTED COMPONENT UNIT [Continued)
J. Availability and Liquidity
Financial assets available for general expenditure, that is, without donor or board restrictions limiting their use, within one year ofthe statement of financial position date, comprise the following:
_ 2022
Financial assets at year-end:
Cash and cash equivalents $ 7,556,400
Investments 12,302,980
Contribution receivable 4,48 1,814
Other receivables 10,207
Total financial assets $24,35 1,401
Less amounts not available to be used within one year:
Net assets with donor restrictions $2 1,945,441
Financial assets available to meet general expenditures
over the next twelve months $ 2,405,960
Certain investments ofthe Foundation consist of donor-restricted funds that the Foundation must hold in perpetuity or for donor-specific periods. Income from donor-restricted funds is restricted for scholarship and educational purposes. The Board approves the use of funds without donor restrictions for operating expenses.
As part of its liquidity management plan, the Foundation invests excess cash in short-term investments, including money market funds and short-term investments.
K. Restatement
The beginning net assets, as of July 1, 2021, were restated and increased by $3,713,787 as a result of an error related to the revenue recognition of multi-year grant agreement which the Foundation did not recognize revenue in the proper year. Additionally, the June 30, 2021 change in net assets increased by $3,169,419.
67
City Colleges of Chicago Community College District No. 508 Notes to Basic Financial Statements June 30, 2022
17. COMMITMENTS AND CONTINGENCIES
City Colleges is a defendant in litigation under various matters (sexual harassment,
discrimination, personal injury, loss of wages, unfair labor practice, breach of employment
contract, etc.) arising in the ordinary course of business. In the opinion of management, this
litigation will be vigorously defended and resolved without any material adverse effect upon
- the financial-position of City Colleges. .
As of June 30, 2022, City Colleges had $21,214,290 in commitments for its capital plan, all of which are being funded by City Colleges.
On January 30, 2020, the World Health Organization declared the coronavirus disease 2019 ("COVID-19") outbreak a "Public Health Emergency of international Concern" and on March 11, 2020, declared it to be a pandemic. It is not known how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to City Colleges.
Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including loss of revenue due to decreases in enrollment, higher health cost, and higher OPEB liabilities.
City Colleges participates in a number of Federal and State grant programs. Participation in these programs is subject to financial and compliance audits by the grantors or their representatives. Such audits could lead to requests for reimbursement to the grantor agency for expenditures disallowed under terms ofthe grant.
6
Required Supplementary Information
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City Colleges of Chicago Community College District No. 508 Required Supplementary Information June 30, 2022
Notes to Required Supplementary Information
These pension schedules are presented to illustrate the requirements of the Governmental Accounting Standards Board's Statement No. 68 to show information for 10 years. However, until a full 10-year trend is compiled, thc City Colleges of Chicago will only present available .in formation measured in accordance with, the requirements of Statement No. 68. _._ .
Changes of benefit terms. There were no benefit changes recognized in the Collective Pension Liability as of June 30, 2021.
Changes of assumptions. In accordance with Illinois Compiled Statutes, an actuarial review is to be performed at least once every three years to determine the reasonableness of actuarial assumptions regarding the retirement, disability, mortality, turnover, interest, arid salary of the members and benefit recipients of SURS. An experience review for the years June 30, 2017, to June 30, 2020, was performed in Spring 2021, resulting in the adoption of new assumptions as of June 30, 2021.
Salary increase. Change in the overall assumed salary increase rates, ranging from 3.00 percent to 12.75 percent based on years of service, while maintaining the underlying wage inflation rate of 2.25 percent.
Investment return. Decrease the investment return assumption to 6.50 percent. This reflects decreasing the assumed real rate of return to 4.25 percent and maintaining the underlying assumed price inflation of 2.25 percent.
Effective rale of interest. Decrease the long-term assumption for the effective rale of interest for crediting thc money purchase accounts to 6.50 percent.
Normal retirement rates. Establish separate rates for members in academic positions and nonacademic positions to reflect that retirement rales for academic positions are lower than for nonacademic positions.
Early retirement rates. Establish separate rates for members in academic positions and nonacademic positions to reflect that retirement rates for academic positions are lower than for nonacademic positions.
Turnover rates. Change rates to produce slightly lower expected turnover for most members, while maintaining pattern of decreasing termination rates as years of service increase.
Mortality rates. Change from the RP-2014 to the Pub-2010 mortality tables to reflect the hitter's higher applicability to public pensions. Update the projection scale from the MP-2017 to the MP-2020 scale.
Disability rates. Establish separate rates for members in academic positions and non-academic positions and maintain separate rates for males and females.
City Colleges of Chicago Community College District No. 508 Required Supplementary Information June 30, 2022
Notes to Required Supplementary Information (Continued)
Plan election. Change plan election assumptions to 75 percent Tier 2 and 25 percent
Retirement Savings Plan (RSP) for non-academic members. Change plan election
assumptions to 55 percent Tier 2 and 45 percent Retirement Savings Plan (RSP) for
academic members. " ~ "
73
Statistical Section
This section of City Colleges' Annual Comprehensive Financial Report includes detailed information as a context for understanding the financial statements and note disclosures related to the college's overall financial health.
Financial Trends
These schedules contain trend information to help the reader understand how City Colleges' financial performance has changed over time.
Revenue Capacity
These schedules contain information to help the reader assess City Colleges' significant local revenue sources, property taxes and tuition,and fees revenue.
Debt Capacity
These schedules present information to help the reader assess City Colleges' current levels of outstanding debt and City Colleges' ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which City Colleges operates.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in City Colleges' financial reports relates to the services the college provides and the activities it performs.
Sources: Unless otherwise noted, the infonnation in these schedules is derived from the annual comprehensive financial reports for the relevant year.
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City Colleges of Chicago Community College District No. 508
Table E
Revenue Capacity Principal Property Taxpayers (UihukIiiciI)
2020
Taxpayer
Willis Tower
Merchandise Mart Owner
One Prudential Plaza
I-l CSC Blue Cross J Kayo
Cbre Suite 2530
Aon Building
300 Lasallc LLC
227 Monroe Street LLC
Chase Tower
3 Tup Owner LLC
Northwestern Memorial Hospital
Water Tower LLC
Franklin Center
Three First National Plaza
Taxable Assessed Value
561,677 520,774 315.893 314.45S 308,831 288,604 259,586 259,137 233,733 219.985
3.282,678
Rank
4 5 6 7 8 9 10
Percentage of Total
Assessed Valuation
0.63% 0.58% 0.35% 0.35% 0.35% 0.32% 0.29% 0.29% 0.26% 0.25%
3.67%
Taxable Assessed Value
445,590
272,345 206,343
302,124 190,005
204.229
243,609 207,942 197.944 197.183
2.467.314
Rank
2 10
Percentage of Total Assessed
Valuation
0.59%
0.36% 0.27%
0.40% 0.25%
0.27%
0.32% 0.28% 0.26% 0.26% 3.26%
Note:
I'ivery effort has been made lo seek out and report lhe largest taxpayers; however, many ofthe taxpayers contain multiple parcels, and il is possible lhal some parcels and their valuations have been overlooked
Source: Cook County Assessor's Office - 2021 dala is not available. 2020 lax levy year is Ihe lalesi data available Cook County Clerk's Office Taxable Assessed Value in thousands of dollars.
78
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City Colleges of Chicago Community College District No. 508
Table H
Debt Capacity Ratios of General Debt Outstanding (Unaurfiied) Last Ten Fiscal Years
Fiscal Year
General Obligation Bonds
Lease Obligations
Total Outstanding Debt
Percentage of
Estimated Actual Taxable Value of Property
Per Capita
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
257,406,782 256,21 1,924 251,089,656 245,933.132 325,987,163 320,445,797 314,797,847 309,014,437 303,071,153
257,406,782 256,211,924 251,089,656 245,933,132 325,987,163 320,445,797 314,797,847 309,014,437 311,373,961
0.14% 0.13% 0.12% 0.11% 0.14% 0.12% 0.12% 0.12% 0.11%
94.68 94.1 1 92.29 90.92 120.00 118.42 116.85 114.48 115.47
Note: Details of City Colleges' outstanding bonded debt can be found in the notes to the financial statements.
Sources: Per capita is based on the population obtained from the US Census Bureau (USCB) and the total outstanding debt. Tlie census is conducted decennially at the start of each decade.
81
City Colleges of Chicago Community College District No. 508
Table I
Debt Capacity Direct and Overlapping Long-Term Debt (Unaudited) (SOOOs)
As of June 30, 2022
Estimated Estimated Share
Net Direct Long- Percentage of Overlapping
Term Debt (I) Applicable (2) Debt
Direct Debt
Cily Colleges of Chicago (as of June 30, 2022)
Estimated General Obligation Overlapping Debt
City of Chicago General Obligation Bonds (2) Chicago Board of Education (3) Chicago Park District (4)
Metropolitan Water Reclamation District of Greater Chicago (5) Cook County (6)
Cook County Forest Preserve District (7)
Total Estimated Overlapping Long-Term Debt Direct and Estimated Overlapping Long-Term Debt
5,856,240 8,649,749
832,735 2,678,452 3,132,317
I 19,775
100.00% 100.00% 100.00%, 52.38%, 51.49% 51.49%
5,856,240 8,649,749 832,735 1,402,973 1,612,830 61,672
18,416,199
$ 18,719,271
(1) Assessed value data used to estimate applicable percentage is provided by lhe Office of the Cook County Clerk. Percentages arc calculated by dividing each taxing district's 2021 Cily of Chicago tax extension, within lhe Cily of Chicago, by the total Cook County extension for lhe district Source: Cily of Chicago Annual Comprehensive Financial Report
(21 Source: City of Chicago
Source: Board of Education
Source: Chicago Pui k District
Source: Metropolitan Water Reclamation Disliicl of Greater Chicago
Source: Cook Countv
Source: Cook County l-'orest I'icscrvc District
82
City Colleges of Chicago Community College District No. 508
Table J
Demographic and Economic Information Demographic and Economic Statistics (Unaudited) Last Ten Fiscal Years
Fiscal Year
2013 2014 2015 2016 2017 20 IS 2019 2020 2021 2022
(A) Population
2,718,789 2,722,407 2,720,556 2,704,965 2,716,462 2,705,988 2,693,959 2,699,347 2,696,555
Personal Income
(in thousands)
$
135,482,693
145,959,129 *
153,828,398 *
154,656,374 *
161,474,651 *
171,657,055 *
175,931,686 *
188,778,832 *
Data Not Available-
-Data Not Available
(C)
Unemployment Rate
10.10%
7.90%
6.60%
6.50%
5.40%
4.40%
4.10%
12.00%
7.60%
*Estimated
Sources: (A) US Census Bureau (USCB). The census is conducted decennially at the start of each decade.
2013 - 2020 Data from the Bureau of Economic Analysis (BEA). These rates arc for Cook County. Data is not available for 2021 and 2022.
Illinois Workforce Info Center Website
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City Colleges of Chicago Community College District No. 508
Table M
Demographic and Economic Information Student Enrollment Demographic Statistics Student Enrollment Credit Hours by Category (Unauilitcil) East Ten Fiscal Years
Fiscal Year
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Total
596,893.5 653.576.0 750,937.0 791,761.5 821,349.0 904,038.0 983,907.0 1,098,557.5 1,184,165.0 1,209,972.5
Baccalaureate
314.615.0 357,564.5 396,941.0 427,442.0 447,130.0 455,404.0 489,438.0 536,289.0 536,233.0 532,810.0
Business
35,686.5 36,886.0 40,124.0 34,142.0 33,480.0 33,621.0 36,204.0 44,735.0 51,231.0 53,069.0
Occupational
Technical
25,767.0 25,821.0 30,744.5 37,525.5 38,827.5 56,363.5 59,245.5 68,863.0 79,220.0 71,636.5
Health
28,062.5 25,340.5 29,389.0 28,703.0 28,755.0 25,955.0 32,958.5 36,548.5 45,666.0 47,413.0
Remedial Development
33,624.0 34,407.0 49,979.0 51,409.0 51,423.0 59,925.0 72,423.0 107,093.0 123,339.0 132,728.0
Adult Basic Secondary Education
159,138.5 173,557.0 203,759.5 212,540.0 221,733.5 272,769.5 293,638.0 305,029.0 348,476.0 372,316.0
Data Source: Collenc records
City Colleges of Chicago Community College District No. 508
Table O
Operating Information Miscellaneous Statistics (Unaudited)
Founded
Accreditation by North Central Association of Colleges and Schools .Most Recent
Accreditation
Daley
Harold Washington
Kennedy-King
Malcolm X
Olive-Harvey
Truman
Wright
2021-22
19 2015-16 2017-18 2020-21
20
21
2031-32
29 2025-26 2027-28 2030-31
30 2029-30
Current gross square footage Size of district Counties served Population of district Number ol" faculty
Number of professional / technical staff
Number of administrators
Number of clerical staff
Number of custodial / maintenance staff
Number of academic support staff
Number of .student/work study staff
Degrees and certificates awarded (fiscal year 2022)
4,023,409 228.5 square miles Cook and DuPage 2,696,555 1,589 358 323 225 409 608 18 7,758
SS
City Colleges of Chicago Community College District No. 508
Table P
Community College State Funding Last Ten Fiscal Years
State Funding to All
State Community ICCB Funding to
Fiscal Year Colleges the District
2013 $ 282,421,700 $ 58,314,908
284,916,500 58,700,515
278,773,899 55,231,784
74,142,300 14,370,863
114,525,000 22,463,354
409,595,700 * 80,276,413 *
257,111,600 47,594,594
269,222,284 45,566,809
269,222,286 44,107.140
278,178,388 45,311,205
Source: Illinois Community College Board
^Amounts include the appropriations from Illinois Senate. Bill 6 passed on July 6. 2017.
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SPECIAL REPORTS SECTION
State Required Reports Section
Schedule 2
Cily Colleges of Chicago Community College District No. 508 Summary of Fixed Assets and Debt
Uniform f inancial Statement #2
Fiscal Year Ended June 30, 2022
Fixed Assets
Land
Construction in progress
Buildings and improvements
Leased assels
Equipment
Software
Accumulated depreciation and amortization Net Fixed Assets
Additions
Capital Assets July I, 2021
(6,600,723) (2,578,165)
12,705,466 5,362,622
58,998 425,546
(32,105,950)
51,376.464 5,657,131 1,105,655,491 12,198,706 64,817,510 47,878.1 19
(467,840,233)
1,542,985
819,743,188 S (13,553,318) $ (7,635,903) $
Capital Assets June 30, 2022
51,376,464 1 1,761,874 1,108,439,948 12,198,706 64,876,508 48,303,665
(498,403,198)
798.553.967
Long-Term Debt Deletions and Long-Term Debt
July 1, 2021 Additions Transfers June 30.2022
Fixed Debt
Bonds payable S 301,220,000 $ - S (5,265,000) S 295,955,000
Total Fixed Debt S 301,220,000 $ - S (5,265,000) $ 295,955,000
92
City Colleges (il 'Chicngo Community College District No. 508 Operating Funds Revenues and Expenditures Uniform Financial Statement #3 Fiscal Year Ended June 30, 2022
OPERATING REVENUES BY SOURCE
Local Government Revenue Local Taxes
Personal Properly Replacement Tax TOTAL LOCAL GOVERNMENT
Education Fund
103,004,523 26.944,324
129,948,847
Operations
and
Maintenance
Fund
29,015.246
29.015.296
Total Operating Funds
132.019,SI1) 26.944.324
I5S.964.I43
Sialc Government:
ICCB Base Operating Gram
ICCB Equalization Grains
ICCB Career ami Technical Education
Other (Include other ICCB grains not listed above)
TOTAL STATE GOVERNMENT
33,256.462 13.92S.700 1.349,813 193.244
4S.72S.2I9
33.256,462 13.92S.700 1.349,S13
193,244
48,728,219
Federal Government:
Department of Education HEERF
TOTAL FEDERAL GOVERNMENT
Student Tuiiion and Fees Tuition Fees
TOTAL TUITION AND FEES
Other Sources
Sales and Service Fees Facilities Revenue Inveslmeni Revenue Other
TOTAL OTHER REVENUE TOTAL REVENUE
152,764 23,790,975
23,943,739
72,110.704 19.009
72.129,713
347,672 2,SS8 (1,497,648) 4.113.SOS
2,966,720
277.7I7.23S
157 1,429,931 440
1,430.528
30.445.S24
152,764 23,790.975 23.943,739
72.1 10,704 19.009, 72,129.713
347.829 1,432,819 (1,497.208) 4,1 13.808 4,397,248
S 308.163.062
OPERATING EXPENDITURES BY PROGRAM
Instruction Academic Support Student Services
Public Service/Continuing Education Auxiliary Services Operations and Maintenance Institutional Support Scholarships, Grants, Waivers TOTAL EXPENDITURES
Less Non-Operanng Items
Transfers lo Non-Operanng Funds ADJUSTED EXPENDITURES
OPERATING EXPENDITURES BY OBJECT
Salaries
Employee Benefits
Contractual Services
General Materials and Supplies
Professional Development
Fixed Charges
Utilities
Other
TOTAL EXPENDITURES
Less Non-Operanng Items
Transfers lo Non-Operanng Funds ADJUSTED EXPENDITURES
96.814,332 19,269,671 30,834,110 62.694 5,107,172 9,631,103 56,638,753 10,151,471
228,509.306.00
41.000.000 269,509.306
172,559.493 24.306.291 8,397.897 1 1.347.722 346,040 403,843 579,137 I0.56S.SS3 22S.509.30d
41.000.000
269.500.306
28,670,480 (93,701)
2S,576;779.00
28.576.779
14,984,473 2,505,614 1.886,205 950.594 676 992.268 7.361,759 (104.810) 28.576.779
28,576.779
96,814,332 19,269,671 30,834,1 10 62.694 5,107.172 38.301,583 56,545,052 10,151,471 257.0S6.0S5.00
41.000.000 29S,0S6.085
187,543,966 26,8 I 1.905 10,284,102 12,298.316 346,716 1.396.1 1 I 7,940.896 10.464.073
257.086.0S5
4 1.000.000
2O8.0S6.085
93
Citv Colleges ol'Chicago Community College District No. 508 Restricted Purposes Fund Revenues and Expenditures Uniform Financial Statement #4 Fiscal Year Ended June 30, 2022
REVENUE BY SOURCE:
TOTAL LOCAL GOVERNMEN'I
Stale Government
ICCB - Adult Education SURS - On Behalf Other
TOTAL STATE GOVERNMEN'I
3,678,568 116,976,780 14,841,256 135,496,604
Federal Government
Department of Education Other
TOTAL FEDERAL GOVERNMEN'I
Other Sources Other
TOTAL OTHER SOURCES
50,863,901 64.815,529
15,679,430
3,963,970
3,963,970
TOTAL RESTRICTED PURPOSES FUND REVENUES
EXPENDITURES BY PROGRAM Instruction Academic Support Student Services
Public Service/Continuing Education Auxiliary Services Operations and Maintenance Institutional Support Scholarships, Grants and Waivers
TOTAL RESTRICTED PURPOSES FUND EXPENDITURES
261,369,661
58,833,017 21,491,489 26,625,395 3,622,864 4,174,657 14,134,845 25,568,22 I 106.300,907
260,751.395
EXPENDITURES BY OBJECT Salaries
Employee Benclits
Contractual Services
General Materials and Supplies
Professional Development
Utilities
Capital Outlay
Other
Scholaiships. Giants, Waivers
19,048,687 120,446.902 4,675,190 6,095.964 197,687 1,131,687 280,932 416,619 108.457,727
TOTAL. RESTRICTED PURPOSES FUND EXPENDITURES
94
Schedule 5
City Colleges of Chicago Community College District No. 508 Current Funds * Expenditures hy Activity Uniform Financial Statement #5 Fiscal Year Ended June 30, 2022
INSTRUCTION
Instructional Programs $ 155.647.349
Total Instruction 155.647.349
ACADEMIC SUPPORT
Library Center ' 4.S17.3II
Instructional Materials Center 306,964
Educational Media Services 363.951
Academic Computing Support 2,171.422
Academic Administration and Planning 22,016,422
Other " 1 1.085,090
Total Academic Support 40.761.160
STUDENT SERVICES SUPPORT
Admissions and Records 9.926,210
Counseling and Career Services 17.525.054
Financial Aid Administration 5,971,983
Other 23,950,134
Total Student Services Support 57.373.381
PUBLIC SERVICE/CONTINUING EDUCATION
Community Education 355.868
Customized Training (Instructional) 306.936
Community Services 1,513,924
Other 2,227,162
Total Public Service/Continuing Education 4.403.890
AUXILIARY SERVICES 12.592,733
OPERA TIONS AND MAINTENANCE OF PLANT Maintenance Custodial Services Grounds Campus Security Utilities Administration Other
Total Operations and Maintenance of Plant
16.073.528 1 1.124,743 28,341 13.317.248 7,361,755 2,964,660 1.603.224
52.473,499
INSTITUTIONAL SUPPORT Executive Management Fiscal Operations Community Relations Administrative Support Services Board of Trustees Geneiahhistiuitional Institutional Research Administrative Data Processing Other Institutional Support Tolal Institutional Support
12.850,757 14.770.199 7,035,248 43,328,460 212,803 12.939,698 1.123,865 12.351.627 (16.317,132) 88.295.525
SCHOLARSHIPS. STUDENTS GRANTS, & WAIVERS
'TOTAL CURRENT FUNDS EXPENDITURES
Cunent Funds include the Education. Operations and Maintenance. Auxiliary Enterprises Restricted Purposes. Audit and Liability, Proicction and Sctilemcnl funds
95
CITY COLLEGES CCC.EDU 180 N.Wabash Ave., Ste. 200
OF CHICAGO 773.COLLEGE Chicago, IL 60601
Schedule 6
City Colleges of Chicago ILLINOIS COMMUNITY COLLEGE DISTRICT NO. 508
CERTIFICATE OF CHARGEBACK REIMBURSEMENT FOR FISCAL YEAR 2023
All fiscal year 2022 non-capital operating expenditures for the past year from thc following funds:
Education Fund S 228,450,308
Operations and Maintenance Fund 28,576,779
Bond and Interest Fund 20,682,075
Restricted Purposes Fund, excluding SURS 143,774,615
Audit Fund 439,000
Liability, Protection and Settlement Fund 5,669,033
Total noncapital expenditures S 427.591,810
Depreciation on capital outlay expenditures (equipment, buildings, and fixed equipment paid) from sources other than state and federal funds
Total costs included S 433.513,841
Total certified semester credit hours for fiscal year 2022 " • 596,893.50
Per capita cost S 726.28
All fiscal year 2022 state and federal operating grants for noncapital expenditures, except ICCB grants S 154,657.669
Fiscal year 2022 state and federal grants per semester credit hour S 259.10
District's average ICCB grant rate (excluding equalization grants) for fiscal year 2023 S 64.38
District's student tuition and fee rate per semester credit hour for fiscal year 2023 S 116.53
Chargeback reimbursement per semester credit hour S ,. 286.27
Approved: ^<^^ n/29/22
Maribel Rodriguez, Chief Financial Officer Date
Approved: 4~ ^ 11/29/22
Juan Salaido, Chancellor Date
HAROLD WASHINGTON • HARRY S TRUMAN • KENNEDY-KING
RSM US LLP
Independent Accountant's Report on the Schedule of Enrollment Data and Other Bases Upon Which Claims Are Filed
To the Board of Trustees of City Colleges of Chicago Community College District No. 508
We have examined the accompanying Schedule of Enrollment Data and Other Bases Upon Which Claims Are Filed (the Schedule) of City Colleges of Chicago, Community College District No. 508 (City Colleges) for the year ended June 30, 2022. City Colleges' management is responsible for preparing the Schedule in accordance with the guidelines ofthe Illinois Community College Board's Fiscal Management Manual. Our responsibility is to express an opinion on the Schedule based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the . examination to obtain reasonable assurance about whether the Schedule presented is in accordance with the guidelines of the Illinois Community College Board's Fiscal Management Manual, in all material respects. An examination involves performing procedures to obtain evidence about the Schedule. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement of the Schedule, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
We are required to be independent and to meet our other ethical responsibilities in accordance with relevant ethical requirements relating to the engagement.
In our opinion, the Schedule is presented in accordance with the provisions of the Illinois Community College Board's Fiscal Management Manual, in all material respects.
The other information included in Schedule 9 discusses City Colleges' residency policy and provides a summary of assessed valuations and is the responsibility of City Colleges' management. This information has not been subjected to the examination procedures applied in the examination ofthe Schedule and, accordingly, we do not express an opinion or provide any assurance on it.
This report is intended solely for the information and use of the Board of Trustees, management of City Colleges and the Illinois Community College Board and is not intended to be and should not be used by anyone other than these specified parties.
Chicago, Illinois November 30, 2022
THE POWER OF BEING UNDERSTOOD
AUDIT j TAX j CONSULTING
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Schedule 8
City Colleges of Chicago Schedule of Enrollment Data and Other Bases on Which Claims are Filed (Continued) Year ended June 30, 2022
Reconciliation of In-District and Chargeback/Coopcrativc Contractual Agreement Credit Hours
Attending In-District
Attending Out-of-District on Chargeback or Cooperative/ Contractual Agreement
Unrestricted in-district resident hours Restricted in-district resident hours Semester credit hours (all terms)
543,721.0 29,979.0 573,700.0
District prior-year equalized assessed evaluation
Total Credit Hours Total Credit Hours Certified bv ICCB
In-district resident
Out-of-district (chargeback/contractual agreement) Total
573,700.0 1,131.5
574,831.5
573,700.0 1,131.5
574.831.5
*The evaluation has not been received from the County as of yet. The figure will be added once it is available.
99
Schedule 9
Student Residency Verification Process (Unexamined)
Because all the District's campuses are publicly supported and chartered within thc Community College District No. 508 (the City of Chicago), residents of Chicago "in-district" students pay a lower tuition rate for college credit courses. Those eligible for the resident status tuition rate, as of thc date of arrival in Chicago, are:
Minors whose parents or; legal guardians live in Chicago
Adults or emancipated minors who live in Chicago (and have not moved to the city for the sole purpose of attending a post-secondary educational institution)
Students who live out of district may qualify for in-district tuition if they work more than 35 hours per week in the City of Chicago. Proof of full-time employment must be shown at registration.
Any student at any time may be required to submit proof of Chicago residency through a voter registration card, driver's license, state identification card, utility bills, or other appropriate documentation. The District may require an affidavit from the parent or guardian of the minor student, or from adult or emancipated minor students themselves.
Non-resident tuition and fees will be charged to:
Students residing outside Chicago or occupying a Chicago dwelling for purposes of attending a post-secondary educational institution
All international students holding student 1-20 visas
Summary of Assessed Valuations (Unexamined)
Tax Levy Year
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Equalized Assessed Valuation
$96,868,463,441 89,478,355,786 87,776,056,332 86,286,411,094 76,722,182,440 73,984,605,433 70,924,421,349 64,879,908,794 62,337,066,955 65,221,057,665
100
State Grant Compliance Section
Independent Auditor's Report on Audits of Grant Programs Financial Statements
To the Board of Trustees of City Colleges of Chicago Community College District No. 508
Opinions
We have audited the accompanying financial statements of the State Adult Education and Family Literacy Grant Program, the Early School Leavers Grant Program, the Innovative Bridge and Transition Grant Program, and the Workforce Equity Initiative Grant Program (the Grant Programs) of City Colleges of Chicago, Community College District No. 508 (City Colleges), as of and for the year ended June 30, 2022, and the related notes to the financial statements, as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position ofthe Grant Programs, as of June 30, 2022, and the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS), the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), and the guidelines of the Illinois Community College Board's Fiscal Management Manual. Our responsibilities under those standards and guidelines are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of City Colleges and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the guidelines of the Illinois Community College Board's Fiscal Management Manual will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX I CONSULTING
101
In performing an audit in accordance with GAAS, Government Auditing Standards, and the guidelines of the Illinois Community College Board's Fiscal Management Manual, we
. • Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of City Colleges' internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation ofthe financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Emphasis of Matter
As discussed in Note 2, the grant programs financial statements present only the Grant Programs referred to above and do not purport to, and do not, present fairly the financial position of City Colleges as of June 30, 2022, or the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the grant program financial statements of City Colleges. The ICCB Compliance Statement on page 105 is presented for purposes of additional analysis and is not a required part of the grant program financial statements.
The ICCB Compliance Statement is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the grant program financial statements. Such information has been subjected to the auditing procedures applied in the audit of the grant program financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the grant program financial statements or to the grant program financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the ICCB Compliance Statement is fairly stated, in all material respects, in relation to the grant program financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 30, 2022, on our consideration of City Colleges' internal control over financial reporting of the Grant Programs and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City Colleges' internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City Colleges' internal control over financial reporting and compliance.
Chicago, Illinois November 30, 2022
103
Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Grant Program Financial Statements Performed in Accordance with Government Auditing Standards
Independent Auditor's Report
To the Board of Trustees of City Colleges of Chicago Community College District No. 508
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General ofthe United States and the guidelines ofthe Illinois Community College Board Fiscal Management Manual, the financial statements of the State Adult Education and Family Literacy Grant Program, the Early School Leavers Grant Program, the Innovative Bridge and Transition Grant Program, and the Workforce Equity Initiative Grant Program (the Grant Programs) of City Colleges of Chicago, Community College District No. 508 (City Colleges) as of and for the year ended June 30, 2022, and the related notes to the financial statements, and have issued our report thereon dated November 30, 2022.
Report on Internal Control over Financial Reporting
In planning and performing our audit ofthe grant program financial statements, we considered City Colleges' internal control over financial reporting (internal control) as a basis of designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but notforthe purpose of expressing an opinion on the effectiveness of City Colleges' internal control. Accordingly, we do not express an opinion on the effectiveness of City Colleges' internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant defic/ency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important 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 section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City Colleges' Grant Programs financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
THE POWER OF BEING UNDERSTOOD
AUDIT ! TAX I CONSULTING
104
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Chicago, Illinois
November 30, 2022 ... ..
105
Grant Program Financial Statements
City Colleges of Chicago Community College District No. 508 State Adult Education and f amily Literacy Grant Program Statement of Net Position June 30, 2022
State Performance
Assets
Due from Cily Colleges of Chicago Tolal Assels
6.460 S_ 6.460
18,970 18.970
Liabilities and Net Position
Accrued payroll Total Liabilities
6.460 6.460
J2.5M) 12.510
18.970 18,970
Net Position
Total Liabilities and Net Position
Statement of Revenues, Expenses and Changes in Net Position Year ended June 30, 2022
Revenue
Stale Sources
Expenses by Program
Instruction
Social'Work Services Guidance Services Assessment and Testing Subtotal Instructional and Student Services
1.584,885 35.820 294,367 153,306
2.068.378
285,655 94,875 111,362 218.410
710,302
1,870,540 130,695 405,729 371,716
2,778,680
Program Support
Improvement of Instructional Services General Administration Data and Information Services Subtotal Program Support Total Expenses
Excess of Revenue Over Expenses
Net Position - July 1. 2021 Nel Position - June 30. 2022
234.129 35.497
269.626
2.338.004
69,319 410.521 150.422
630.262
1,340.564
69.319 644,650 185.919
899,888
3.678,568
See accompanying notes to grant program financial statements.
City Colleges of Chicago Community College District No. 508 ICCB Compliance Statement for the Adult Education and Family Literacy Grant Program Expense Amounts and Percentages for ICCB Grant Funds Only Year ended June 30, 2022
State Basic
Instruction
General Administration
S S
Expense Amount
1,584,885 234,129
Allowed Expense Percentage
Minimum 45% Maximum 15%
Actual Expense Percentage
68% J0%
See accompanying notes to grant program financial statements.
107
City Colleges of Chicago Community College District No. 508 Early School Leavers Grant Program
Statement of Net Position June 30, 2022
Assets
Due from City Colleges of Chicago $ 3.388
Total Assets 3,388
Liabilities and Net Position
Accounts payable 2,413
Unearned revenue 975
Total Liabilities 3.388
Net Position |910|Total Liabilities and Net Position $ 3,388
Statement of Revenues, Expenses and Changes in Net Position Year ended June 30, 2022
Revenue
State sources
Expenses
Salaries
Employee benefits Total Expenses
49,496 9,529 59,025
Excess of Revenue Over Expenses
Net Position - July 1, 2021 Net Position - June 30. 2022
See accompanying notes to grant program financial statements.
108
City Colleges of Chicago Community College District No. 508 Innovative Bridge and Transition Program Statement of Net Position June 30,2022
Assets
Receivables Total Assets
Innovative Bridge 1
Total
Innovative Bridge II
170.637
170.637 $ 170.637 170.637
Liabilities and Net Position
Due to Cily Colleges of Chicago Total Liabilities
170,637 "170,637
Net Position
Total Liabilities and Net Position
Statement of Revenues, Expenses and Changes in Net Position Year ended June 30, 2022
Revenue
State sources
Expenses
Salaries
Employee benefits Purchased services Materials and supplies Scholarships Total Expenses
18,250 113 119
73.657 600
92.739 $ 129,363 $
81,938 957
92,739
40,000 5,568 900
129,363
222,102
100,188 1,070 40,119 79,225 1,500
222,102
Excess of Revenue Over Expenses
Net Position - July 1, 2021 Net Position - June 30. 2022
See accompanying notes to grant program financial statements.
109
Cily Colleges of Chicago Community College District No. 508 Workforce Equity Initiative Statement of Net Position June 30, 2022
Total
WEI 3
4.927,205
S 4,927,205 S 4,927,205
4.927,205
Liabilities and Net Position
Accounts payable Accrued payroll Unearned Revenue Total Liabilities
96,607 61,178 4,769,420 4,927,205
96,607 61,178 4,769,420 4,927,205
Net Position
Total Liabilities and Net Position
Statement of Revenues, Expenses and Changes in Net Position Year ended June 30, 2022
Revenue
State sources S 3,812.422 S 973,772 $ 4,786,194
Expenses
Salaries
Employee bene fits Equipment Purchased services Materials and supplies Consultants
Conference and meeting expenses
Scholarships
Total Expenses
473,100 54,717 385,321 852,185 548,370 71,849 13,868 .413.012
3,812,422
221,907 29,802 66,751 54,664 34,313 62,671 1,346
502.318
973,772
695,007 84,519 452,072 906.849 582,683 134,520 15.214 1,915,330 4,786,194
Excess of Revenue Over Expenses
Net Position - July 1, 2021 Net Position - June 30, 2022
See accompanying notes to grant program financial statements.
Notes to Grant Program Financial Statements
City Colleges of Chicago Community College District No. 508 Notes to Grant Program Financial Statements June 30, 2022
1. PROGRAM DESCRIPTIONS
City Colleges of Chicago is responsible for administering the following programs in accordance with "Policy Guidelines for Restricted Grant Expenditures and Reporting" set forth by ICCB in its Fiscal Management Manual. Program funds are accounted for in the City Colleges of Chicago's current restricted fund.
State Adult Education and Family Literacy Grants
The ICCB awards funding to eligible applicants to develop, implement and improve adult education and literacy activities. The provider must use the grant to establish or operate programs that provide services or instruction in one or more of the following categories:
Adult education and literacy services (including workplace)
Family literacy services
English literacy programs
The ICCB provides funding for Adult Education and Family Literacy from State and Federal sources in fiscal year 2022. State funds include two categories: (1) State Basic and (2) State Performance. Federal funds include one category in fiscal year 2022, (1) Federal Basic. Funding is allocated through a competitive process. The funding source determines the applicable statutory regulations, policies, and guidelines including allowable costs.
Early School Leavers Grant
The Early School Leavers Grant is to provide opportunities for youth 16-21 years to re-engage in the completion of their secondary education and receipt of either the GED credential or a high school diploma, while receiving intensive career services.
C. Innovative Bridge and Transition Program Grant
The City Colleges of Chicago's Career Bridge programs are offered in six different career sectors across six campuses. The program is designed as an Integrated Education and Training (IET) program, which means that students will receive contextualized instruction in a career area and will be co-enrolled in Adult Education . along with credit classes for industry credentials. The goals of Career Bridge are: obtainment of an industry credential allowing entry into the workforce; to improve reading, writing, math and/or English language skills, and preparation for the high school equivalency, if needed.
City Colleges of Chicago Community College District No. 508 Notes to Grant Program Financial Statements June 30, 2022
PROGRAM DESCRIPTIONS (Continued)
D. Workforce Equity Initiative Grants
The purpose of these grants is to create, support, or expand short-term workforce (credit and/or noncredit) training opportunities in high-need communities focused on specific sectors with identified workforce gaps. Programs will be monitored throughout the year on the following outcomes: "
Employment after completion ofthe credential aligned with regional workforce gaps that provides a full-time job paying at least 30% above the regional living wage or is on a pathway to a family sustaining wage;
Accelerated time for the targeted population to enter and succeed in postsecondary education/training programs that lead to employment in high skilled, high wage and in-demand occupations;
The degree to which thc programs comply with ICCB, state guidelines;
The degree to which 60% ofthe eligible participants served are African Americans;
The ability to achieve the outcomes and objectives as initially indicated by the program.
All programs developed should be a part ofa career pathway that allows participants to obtain an industry recognized credential and/or a community college certificate (credit or noncredit) in the shortest possible time while maintaining quality instruction and enhancing the participant's eligibility for employment in the identified sectors.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Reporting
These grant program financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. Expenses are reported when services are rendered, or when goods are received.
Grant revenues are reported in these grant program financial statements when allowable grant expenses are made. Expenses are allowable if they comply with "Policy Guidelines for Restricted Grant Expenditures and Reporting" set for in the ICCB Fiscal Management Manual.
City Colleges of Chicago Community College District No. 508 Notes to Grant Program Financial Statements June 30, 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basis of Reporting (continued)
The grant funds shall be expended or obligated prior to June 30 each year, the last day of the fiscal year. Grant funds should be accounted for in the same period as in the credit hour claiming process. Unexpended funds shall be returned to ICCB by October 15 following the end ofthe fiscal year. The State Adult Education and Family Literacy programs, the Early School Leavers program, and the Innovative Bridge and Transition program were fully expended within the grant period.
The grant funds for the Workforce Equity Initiative cover the periods of November 1, 2020through March 31, 2022 for WEI 2 and December 1, 2021 through June 30, 2023 for WEI 3. Revenue is recognized when expenditure requirements have been met. The Workforce Equity Initiative 3 program has unearned revenue of $4,769,420 at June 30, 2022 which represents grant monies received but not yet expended.
These grant program financial statements cover only the State Adult Education and Family Literacy, thc Early School Leavers, the Innovative Bridge and Transition program and the Workforce Equity Initiative for Year 2 and Year 3. It is not intended to and does not represent the financial position or results of operations of City Colleges of Chicago in its entirety.
Cash held by Citv Colleges of Chicago
To facilitate sound management, substantially all grant program cash for the State Adult Education and Family Literacy, the Early School Leavers program, thc Innovative Bridge and Transition program and the Workforce Equity Initiative is pooled with City Colleges.
Accounts Receivable
A receivable is recorded for the funds to be received from thc ICCB at June 30, 2022 for reimbursement ofthe allowable expenditures incurred during the fiscal year.
Due to Citv Colleges of Chicago
Due to City Colleges of Chicago represents the amount to be reimbursed to City Colleges for thc use of resources to pay for the expenses incurred by the grant program prior to the receipt ofthe grant monies.
City Colleges of Chicago Community College District No. 508 Notes to Grant Program Financial Statements June 30, 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Unearned Revenue
Unearned revenue represents grant funds received that have not yet been earned.
Uses of Estimates
The preparation of the grant program financial statements in conformity with accounting principles generally accepted in the United States of America requires sound management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates and assumptions.
114
Single Audit Act Supplementary Financial and Compliance Report Section
R
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
Independent Auditor's Report
To the Board of Trustees of City Colleges of Chicago Community College District No. 508
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the business-type activities and the discretely presented component unit of City Colleges of Chicago, Community College District No. 508 (City Colleges), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise City Colleges' basic financial statements, and have issued our report thereon dated November 30, 2022. Our report included an emphasis of matter paragraph relative to the restatement of beginning net assets, as of July 1, 2021, of City Colleges of Chicago Foundation, as a result of an error related to the revenue recognition of multi-year grant agreements. The financial statements of City Colleges of Chicago Foundation (Foundation) were not audited in accordance with Government Auditing Standards, and accordingly, this report does not include reporting on internal control over financial reporting or instances of reportable noncompliance associated with the Foundation.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered City Colleges' internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City Colleges' internal control. Accordingly, we do not express an opinion on the effectiveness of City Colleges' internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, 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 internal control, such that there is a reasonable possibility that a material misstatement of City Colleges' financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important 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 section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX ! CONSULTING
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City Colleges' financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose ofthis Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City Colleges' internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City Colleges' internal control and compliance. Accordingly, this communication is not suitable for any other purpose. •1
"fiSM ȣ JjLP
Chicago, Illinois November 30, 2022
116
Report on Compliance for the Major Federal Program; RSM US LLP
Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
Independent Auditor's Report
To the Board of Trustees of City Colleges of Chicago Community College District No. 508
Report on Compliance for the Major Federal Program Opinion on the Major Federal Program
We have audited City Colleges of Chicago, Community College District No. 508's (City Colleges) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on City Colleges' major federal program for the year ended June 30, 2022. City Colleges' major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.
In our opinion, City Colleges complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2022.
Basis for Opinion on the Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of City Colleges and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for the major federal program. Our audit does not provide a legal determination of City Colleges compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to City Colleges' federal programs.
THE POWER OF BEING UNDERSTOOD
[AX [CONSULTING
Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on City Colleges' compliance.based on our audit. Reasonable assurance is a high level of
assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with generally accepted auditing standards, Government Auditing Standards, and the
Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting
material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material, if there is a
substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a
reasonable user of the report on compliance about City Colleges' compliance with the requirements of the
major federal program as-a whole. - ...
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding City Colleges' compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of City Colleges' internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in-the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of City Colleges' internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing ofthe audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Other Matters
The results of our auditing procedures disclosed instances of noncompliance which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as items 2022-001, 2022-002 and 2022-003. Our opinion on the major federal program is not modified with respect to these matters.
Government Auditing Standards requires the auditor to perform limited procedures on City Colleges' responses to the noncompliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. City Colleges' responses were not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the responses.
Report on Internal Control Over Compliance
Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, as discussed below, we did identify certain deficiencies in internal control over compliance that we consider to be significant deficiencies.
I IS
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement ofa federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of .findings and questioned costs as items 2022-001 and 2022-002 to be significant deficiencies.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
Government Auditing Standards requires the auditor to perform limited procedures on City Colleges' responses to the internal control over compliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. City Colleges' responses were not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the responses.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by Uniform Guidance
We have audited the financial statements of the business-type activities and the discretely presented component unit of City Colleges as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise City Colleges' basic financial statements. We issued our report thereon dated November 30, 2022, which contained unmodified opinions on those financial statements. Our report included an emphasis of matter paragraph relative to a restatement to the beginning net assets, as of July 1, 2021, of City Colleges of Chicago Foundation as a result of an error related to the revenue recognition of multi-year grant agreements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part ofthe basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
flSAt VS JULP
Chicago, Illinois November 30, 2022
119
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
Assistance Pass-Through Federal
Listing Entity's Identifying Project Grantor's Tolal l'ro\idcd To
Number Number Number Expenditures Suhrecipients
I.S. Department of Education -
Student financial Assistance Cluster: federal Pell Gram Program
federal Woik-Studv Procram
84.063 84.033
federal Supplemental Educational Opportunity Grants Federal Direct Student Loans
84.007 84 268
Total Student Financial Assistance Cluster: TRIO Cluster:
TRIO - Student Support Services Student Support Services Student Support Services Student Support Services Student Support Services Student Support Services Student Support Services
TRIO-Talent Search Talent Search Talent Search Talent Search
TRIO - Educational Opporlunily Centers Educational Opportunity Centers Educational Opportunity Centers Educational Opportunity Centers
84.042A 84.042A 84.042A 84.042A 84.042A 84.042A 84.042A
84.044A 84.044A 84.044A 84.044A
84.066A 84.066A 84.066A 84.066A
P042A200869-20 P042A200869-21 P042A2OI422-20 P042A20I422-2I P042A201393-20 P042A20I393-21
P044A160557-20 37.768 P044A160557-21 20,710 l'044A2l062l-2i 258.374
3I6.S52
P066A160284-20 33,139 P066A160284-21 22,715 P066A210039-21 190.486
246.340
Tolal TRIO Cluster
Adult Education - Basic Grants to Slates
Passed through lhe Illinois Community College Board Adult Education - Basic Grants to Slates
84.002A Subtotal 84.002A
1.706.119 1.706.119
120
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
Program or Clusler Title
U.S. Department of tducation - (Continued)
Higher Education Institutional Aid
Title V Northeastern Illinois University Cooperative Title V Northeastern Illinois University Cooperative Maihemalics. Engineering. Technology. Apoyo. and Science (META Predominantly Black Institutions Program - Formula Grants 11 S.I STEM and Articulation
Subtotal
Career and Technical Education - Basic Grants to States (Perkins V) Passed through the Illinois Community College Board Perkins III Grant Perkins III Grant Perkins Leadership Grant
Subtotal
COVID-19 Education Stabilization Fund
Higher Education Emergency Relief Fund (HEERF)
COVID 19-HEERFStudent Aid Portion
COVID 19 - HEERF Institutional Portion
COVID 19 - Minority Serving Institutions Total I ligher Education Relief Fund
Passed through the Illinois Community College Boaid
COVID-19 Governor's Emergency Education Relief Fund (GEER) COVID-19 Governor's Emergency Education Relief Fund (GEER II)
Assistance Pass-Through Federal
Listing Entity's Identifying Projeel GranlorS
S4 WIS 84 03IS S4.031C X4 03 IP S4 03 IC X4.03I
Number Number Number
N/A 21061-210X22-
P03IS1X015I-2U P03ISIXOT5I-2I P031 ('210013-21 P03!P210009-21 P03IC210I1I
84.048 84 048 84 048 84.048
-IIWC
84.425E S4.425F X4 425L 84.425
CTE5082I CTE50822 LEAD50822
GEER-508 GEERII-50X22
84.425C 84.425C X4.425
P425E2026 P425E2032 P425L2002
684-00-2455 6X4-00-2727
Total Expenditures
S 21.314 I9S.I36 243.-572 05.844 10.831 539.697
249.590 1.054.136
107.368 1.411.094
35.540.9X6 35,150,652 5,950,351 76.641,989
968,860 55,051
1.023.911
Provided To Suhrecipicnts
Passed through the Illinois Community College Boaid COVID-19 Maximizing On-Site and Virtual Experiences
X4.425P S4.425
Tolal COVID-19 Education Stabilization Fund
Stiengthcnmg Minority-Serving Institutions Olive Harvey College Olive Harvey College Pipeline lo Careers in Healthcare Pipeline to Careers in Healthcare
X4 3X2A X4.3X2A X4.3X2A 84 3X2A X4.3X2A
P3X2A150033-20 P3X2AL50033-2I P3X2A150024-20 P3X2A150024-21
7X.072.042
34
155,072 25X.5I2 102.164 515.3X6
I 03
Education Research
Passed thiough Teachers College. Columbia University Exploring the Experiences and Outcomes of English Learners in Communilv College
Total Expenditures - U.S. Department ol Education
121
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
Assistance Pass-Through Federal
Listing Entity's Identifying Project Grantor's
Number Number Number
Program or Cluster Title
U.S. Department of Health and Human Services -
Head Stan Cluster
Passed through the Cily of Chicago Department ol'Family and Support Services:
Head Start Program _ _. 93.600 122407-5
Head Start Program 93.600 174540
Head Start Program 93 600' 181584
Early Head Stan 93.600 174539
Early Head Start 93 600 181584
Early Head Start CCP IGA 93.600 164097-5
Head Start IGA 93 600 164097-6
CELWS Head Start IGA 93.600 189414
Early Head Start IGA 916§ 164097-4
Total Headslart Cluster 93.600
Total Prmided To
Lxpenditurcs Suhrecipients
5 578 I23:6S8 268.282 163.621 379.354
47.334 116.502 207,750
21,667
1.333.776
Coronavirus Relief Fund
Passed through the City of Chicago Department ol'Family and Support Services:
COVID-19 Coronavirus Relief Fund 21.019
Public Health Sen ice Act
Passed through Health Resources and Services Administration: Mental and Behavioral Health Education and Training Grants
Opioid Family Support 93 732
Total Expenditures - U.S. Departmeni of Health and Human Services
U.S. Department of Agriculture -
Passed through thc Illinois State Board of Education:
Child and Adult Care Food Program 10 558
Child and Adult Care Food Program 10.558
Subtotal 10.558
Total Expenditures - U.S. Department of Agriculture
15016508051 15016508051
1,963.628
13,959 143,643 157.602 157,602
122
City Colleges ol" Chicago Community College District No. 508 Schedule ol" Expenditures of Federal Awards Fiscal year ended June 30, 2022
Program or Cluster Title
U.S. Department of Labor -
Passed through the American Association of Community Colleges Apprenticeship USA Grants - Expanding Community College Apprenticeships Initiative (ECC'A)
" Subtotal
Assistance Pass-Through Federal
Listing Entity's Identifying Project Grantor's Total Provided To
56.9-10
' 2X5
Number Number Number Expenditures Suhrecipienls
156.940
17 2S5
AP330251975AH
Passed iluougli the Illinois Community College Boaid
11-1B Job Training Grants - CAP-IT Apptenticeshin Grant
Total Expenditures - U.S. Department of Labor
National Science Foundation -
Research and Development Cluster Education and Human Resources Passed through Chicago State University:
Louis Stokes STEM Pathways & Research Alliances (LSAMP) 47.076 IIRDI911341
Exploring the Impact of Cultural Wealth and Scholarships
S-STEM Scholars Program 47.076 DUF.-1S33435
Building Capacity: Building Bridges into Engineering and
Computer Science 47.076 DUE-1X32553
Passed through Northeastern Illinois University:
Chicago STEM Teaching Collaborative: Developing a STEM Master Tcachcts Program
Northeastern Illinois University Novcc 47 076 DUE-2050564
Developing a Biotechnology Degree Program to Train Skilled Biotechnicians in Chicago
Total Research and Development Cluster
Total Expenditures - National Science Foundation
U.S. Department of Transportation -
Passed through the Illinois Department of Transposition1
Highway Planning and Construction (Federal-Aid Highway Program) Cluster
Federal Highway Administration
Highway Planning and Construction (Federal-Aid
llighwav Piogram) 20 205
Total Highway. Planning and Construction Cluster
Total Expenditures - U.S. Department of Transportation
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
Assistance Pass-Through Federal
Listing Entity's Identifying Project Grantor's Total Provided To
Number Number Number Expenditures Suhrccipients
Program nr Cluster Title
National Endowment for the Humanities -
4S5
GR-EJ34-00
Passed through Illinois I lumamtics Art for Justice Fund' Pionioiioit ofthe Humanities Federal/Slate Partnership
455
Envisioning Justice 45.12')
Total Expenditures - National Endowment for the Humanities
U.S. Department nf Justice -
2020-WA-AX-00OS 136,612
Grants lo Reduce Domestic Violence, Dating Violence, Sexual Assault, and Stalking on Campus Office on Violence Against Women
Project SAFE 16.525
219027 219027
715,952 29.745
Passed thiough the Illinois Criminal Justice Information Authority
X82.309
Victim of Crime Act 16.525 Victim of Crime Act 16.525
Total Expenditures - U.S. Department of Justice
U.S. Department of Defense
Passed through the Office of Naval Research National Defense Education Program Advancing Opportunities for Women in STEM
Total Expenditures - U.S. Department of Defense
U.S. Department of Energy
Passed through Illinois Green Economy Network (1GEN): State Energy Program - Expanding the Solar Workforce through the Illinois Community College System
National Aeronautics and Space Administration Passed through University of Illinois Urbana-Champaign: Office of Stem Engagement (OSTEM) - Illinois Space Grant Consortium - Higher Education Incentives
Total Expenditures - U.S. Department of Energy
Total Expenditures of Federal Awards
N/A HQ00342II00I0 242,354
20,798
242.354
2,600
DE-EE0O08576
23.398
099286-18087 80NSSC20V1O046
See Notes to thc Schedule of Expenditures of Federal Awards.
City Colleges of Chicago Community College District No. 508 Schedule ol* Expenditures of Federal Awards Fiscal year ended June 30, 2022
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Note 1. Scope of Entity
City Colleges of Chicago, Community College District No. 50X (City Colleges) is a separate taxing body created under the Illinois Public Community College Act of 1965, with boundaries coterminous with the City of Chicago. City Colleges delivers educational and student services through seven colleges, each of which is separately accredited by the North Central Association. The seven colleges are Richard J. Daley College, Harold Washington College^ Kennedy-King College, Malcolm X College, Olive-Harvey College, Harry S. Truman College, and Wilbur Wright College. The Board of Trustees, appointed by the Mayor ofthe City of Chicago and ratified by the City Council of Chicago, is responsible for establishing the policies and procedures by which City Colleges is governed. The U.S. Department of Education has been designated as the City Colleges' cognizant agency for the audit performed in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Fiscal period audited: Single Audit testing procedures were performed for program transactions that occurred during the fiscal year ended June 30, 2022.
Note 2. Summary of Significant Accounting Policies
Basis of accounting: The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of City Colleges under programs ofthe federal government and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements ofthe Uniform Guidance. Because the schedule presents only a selected portion ofthe operations of City Colleges, it is not intended to and does not present the financial position changes in net position, or cash flows of City Colleges.
Note 3. Indirect Costs
Cost allocation: City Colleges has a plan for allocation of common and indirect costs related to grant programs in accordance with the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Thc indirect cost rate, used to allocate amounts to grant programs during the fiscal year ended June 30, 2022 is primarily based on a federally negotiated higher education rate agreement of 53%. Because City Colleges negotiated an indirect cost rate, it cannot elect to use the 10% de minimis rate.
125
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Note 4. Federal Student Loan Programs
Loans made under the Federal Direct Student Loan program (Assistance Listing Number 84.268) issued to eligible students of City Colleges during the fiscal year ended June 30, 2022, are summarized as follows:
Guaranteed Loan Programs: Subsidized Unsubsidized
Total Federal Student Loan Programs
$ 1,456,701 1,437,717 $ 2,894,418
The loan programs include subsidized and unsubsidized loans. The value of loans issued for the Federal Student Loan Program is based on disbursement amounts. The loan amounts issued during the year are disclosed on the schedule. City Colleges is responsible only for the performance of certain administrative duties with respect to the federally guaranteed student loan programs and, accordingly, balances and transactions relating to these loan programs are not included in City Colleges' basic financial statements. Therefore, it is not practicable to determine the balance of loans outstanding to students and former students of City Colleges at June 30, 2022.
Note 5. Amount of Federal Insurance in Effect During the Year
No federal insurance was received by City Colleges during the year ended June 30, 2022.
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal vear ended June 30, 2022
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section I. SUMMARY OF AUDITOR'S RESULTS Fin an cial St at em en ts
Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? Yes X No
Significant deficicncy(ies) identified? Yes X None Reported
Noncompliance material to financial
statements noted? Yes X No
Federal A wards
Internal control over major program:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? X Yes None Reported
Type of auditor's report issued on compliance for the major federal program: Unmodified Any audit findings disclosed that are required to
be reported in accordance with section 2 CFR X Yes No
200.516(a)?
127
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
Identification of major program:
Assistance Listing Numbers Names of Federal Programs or Cluster
S4.425E, 84.425F, 84.425L. 84.425C. COVID Education Emergency Relief Fund
84,425P Education Stabilization Fund:
Higher Education Emergency Relief Fund (HEERF) COVID-19: HEERF Student Aid Portion COVID-19: HEERF Institutional Portion COVID-19: HEERF Minority Serving Institution COVID-19: Governor's Emergency Education Relief Fund (GEER)
COVID-19: Maximizing On-Site and Virtual Experiences
Dollar threshold used to distinguish between
type A and type B programs $3,000,000
Auditcc qualified as low-risk auditee? Yes X No
Finding 2022-001 - COVID-19 Education Stabilization Fund: Higher Education Emergency Relief Fund Reporting
Repeat Finding: Partial
Federal Program Title - U.S. Department of Education
COVID-19 Education Stabilization Fund Higher Education Emergency Relief Fund (HEERF) COVID-19: HEERF Student Aid Portion: 84.425E COVID-19: HEERF Minority Serving Institutions (MSI): 84.425L Federal Award Year 2021-2022
Condition
City Colleges did not have sufficient documentation that internal controls were in place and operating effectively relative to the following areas:
128
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Cnntinued)
HEERF Student Reporting: City Colleges did not have sufficient supporting evidence that review controls were performed over the July 1, 2021 - September 30, 2021 quarterly student report prior to submission.
HEERF MSI Reporting: City Colleges did not have sufficient supporting evidence that review controls were performed over the July 1, 2021 - September 30, 2021 quarterly student report prior to submission.
City Colleges did not publicly post certain required reports accurately. The following instance of noncompliance was identified:
HEERF Student Portion: City Colleges posted a report on July 8, 2022 for Wilbur Wright for the period of April 1, 2022 - June 30, 2022 which did not reconcile to the underlying expense detail as ofthe date ofthe report. The difference was $307,750.
Criteria
There are three components to reporting for HEERF: (1) public reporting on the (a)(1) Student Aid Portion; (2) public reporting on the (a)(1) Institutional Portion, (a)(2), and (a)(3) subprograms, as applicable; and (3) the annual report.
The institutional quarterly portion reporting requirements involve publicly posting completed forms on City College's website. The forms must be conspicuously posted on City College's primary website on the same page the reports of City College's activities as to the emergency financial aid grants to students (Student Aid Portion) are posted.
A new, separate form must be posted covering aggregate amounts spent for HEERF I, HEERF II, and HEERF III funds each quarterly reporting period (September 30, December 3 1, March 31, June 30), concluding after an institution has expended and liquidated all (a)(1) Institutional Portion, (a)(2), and (a)(3) funds and checks the "final report" box. City Colleges must post this quarterly report form no later than 10 days after the end of each calendar quarter (October 10, January 10, April 10, July 10) apart from the first report, which was due October 30, 2020, and the report covering the first quarter of 2021, which was due July 10, 2021.
129
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)
According to an electronic announcement (EA) by the Department of Education (ED) on May 6, 2020, ED required institutions that received a HEERF 18004(a)(1) Student Aid Portion Aid award to publicly post certain information on their website no later than 30 days after award, and update that information every 45 days thereafter by posting a new report. On August 31, 2020, ED revised the EA with 85 FR 53802, which decreased the frequency of subsequent reporting from every 45 days to every calendar quarter.
2 CFR Section 200.303 requires entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure the timely and accurate posting of reports.
Questioned Costs
There were no questioned costs with respect to this finding. Cause
City Colleges did not have effective internal controls in place to ensure reports were posted accurately due to the newness ofthe program and how quickly it was rolled out.
Prevalence
Infrequent. 63 reports were required to be submitted in fiscal year 2022 relative to HEERF Student, Institutional, MSI and Annual reporting. One report was inaccurate and 14 did not have sufficient evidence of review.
Effect
The submission of inaccurate reports is noncompliance with the requirements ofthe grant award and could result in loss of funding or other penalties.
Recommendation
We recommend City Colleges implement internal controls to ensure reports are posted accurately. Views of responsible officials
We agree with this finding. See corrective action plan.
130
City Colleges of Chicago Community College District No." SOS Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Finding 2022-002 - Return of Title IV Funds - Enrollment Reporting Repeat Finding: Yes
Federal"Program Title - U.S. Department of Education
Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Award Year 2021-2022
Condition
For two out of sixty students tested (3%) who withdrew from City Colleges, the students' withdrawal date reported to the National Student Loan Data System (NSLDS) for campus level and program level did not match the institution's records.
For one out of sixty students tested (2%) who withdrew from City Colleges, the student's withdrawal date reported to the National Student Loan Data System (NSLDS) for campus level and program level did not match the institution's records. Thc student's status change at the campus level and program were not reported to the National Student Loan Data System (NSLDS) within the 60-day requirement.
For two out of sixty students tested (3%) who withdrew from City Colleges, the students' status change at thc campus level and program level were not reported to the National Student Loan Data System (NSLDS) within the 60-day requirement.
For nine out of sixty students tested (15%) who withdrew from City Colleges, the students' status change at the campus level and program level was never reported thc National Student Loan Data System (NSLDS).
For six out of sixty students tested (10%) who withdrew from City Colleges, the students' status change at the program level was never reported the National Student Loan Data System (NSLDS).
For one out of sixty students tested (2%) who withdrew from City Colleges, the student's status change at the program level was not reported to the National Student Loan Data System (NSLDS) within the 60-day requirement.
For one out of sixty students tested (2%) who withdrew from City Colleges, the student's status change at the campus level was not reported to the National Student Loan Data System (NSLDS) within the 60-day requirement.
For four out of sixty students tested (7%) who withdrew from City-Colleges, the students' withdrawal status reported to the National Student Loan Data System (NSLDS) for campus level and program level did not match the institution's records.
131
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria
CFR section 685.309 and 690.83(b)(2) requires City Colleges to notify the NSLDS within 30 days ofa change in student status or include thc change in status in a response to an enrollment reporting roster within 60 days ofthe student's date of determination of withdrawal.
Questioned Costs
There were no questioned costs related to testing of enrollment reporting. Cause
The financial aid office does not have an effective system in place to ensure all official student status changes are reported to the lender in a timely manner.
Prevalence
Frequent. Twenty out of sixty students selected for testing. Effect
Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding.
Recommendation
We recommend City Colleges implement monitoring procedures which will promptly notify the financial aid office of any student status changes. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes to the lender in a timely manner. City Colleges should implement a review process to ensure all status changes are addressed by the financial aid office.
Views of responsible officials
We agree with this finding. See corrective action plan.
Finding 2022-003 - Short-Term Program Placement Rate Repeat Finding: Yes
Federal Program Title - U.S. Department of Education
Student Financial Assistance Cluster Federal Direct Student Loans: 84.268 Federal Award Year 2021-2022
City Colleges of Chicago Community College District No. 508 Schedule of Expenditures of Federal Awards Fiscal year ended June 30, 2022
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition
The College cannot demonstrate compliance with the gainful employment placement rate calculation of 70% for the short-term program at a post-secondary vocational institution.
Criteria
For the Direct Loan Program, short-term eligible programs at a postsecondary vocational institution must be between 300 - 599 clock hours. They must have been provided for at least one year and must have a substantiated completion and placement rate of at least 70 percent for the most recently completed award year. 34 CFR Section 668.8(f) and (g) requires the college to have documentation supporting its placement rates for each student ^showing that the student obtained gainful employment in thc recognized occupation for which he or she was trained or in a related comparable recognized occupation.
Questioned Costs
There were no questioned costs with respect to this finding. Cause i
The financial aid office did not follow-up on the gainful employment of students. Prevalence
Frequent. Five out of live students tested did not have sufficient support for the placement rate calculation.
Effect
Failure to calculate the placement data for each student is noncompliance with Federal regulation and could result in loss of future funding
Recommendation
We recommend City Colleges enhance their policies and procedures to ensure that calculation of placement rates is being maintained.
Views of responsible officials
We agree with this finding. See corrective action plan.
133
CITY COLLEGES
OF CHICAGO
CCC.EDU
773.COLLEGE
180N WabnshAvc.Ste 200 Chicago, II. 60601
RSM US LLP
30 S. Wacker Drive, Suite 3300 Chicago Illinois 60606
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2022
Identifying Number: 2021-001-COVID-19 Education Stabilization Fund: Higher Education Emergency Relief Fund and Governor's Emergency Education Relief Fund Internal Controls for Activities Allow or Unallowed, Allowable Costs / Cost Principles and Period of Performance
Audit Finding: City Colleges did not have sufficient documentation that internal controls were in place and operating effectively. Although City Colleges was able to provide some email correspondence noting approvals, there was no formal documentation ofthe control process and thc emails were not consistent to indicate approvals. Issues relative to the following areas were noted:
MSI: City Colleges did not. have sufficient supporting evidence that review controls were performed over the awarding of MSI student awards nor over the determination that awards were utilized before the end ofthe period of performance.
HEERF Student Aid Portion: For eight out of sixty students, City Colleges determined the students to be eligible for a 11EERF award based on established criteria, however, City Colleges did not have sufficient supporting evidence that students were approved to be awarded funding nor over thc determination that awards were utilized before the end ofthe period of performance.
GEER: City Colleges did not have sufficient supporting evidence that review controls were performed over the awarding of GEER student awards nor over the determination that awards were utilized before the end of the period of performance.
Status: Corrected.
Corrective Action Taken:
Student Financial and the Financial Aid Office will continue to fine-tune the review & approval process for all quarterly and annual reports. Part-Time Project Manager for Finance.
134
HAROLD WASHINGTON • HARRY S TRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD J. DALEY • WILBUR WRIGHT
CITY COLLEGES CCC.EDU ¦ 180 N.Wabash Ave,.Ste 200
OF CHICAGO 773.COLLEGE Chicago, ll. 60601
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2022 (continued)
Identifying Number: Finding 2021-002 - COVID-19 Education Stabilization Fund: Higher Education Emergency Relief Fund Reporting
Audit Finding: City Colleges did not have sufficient documentation that internal controls were in place and operating effectively relative to the following areas:
HEERF Student Reporting: City Colleges did not have sufficient supporting evidence that review controls were performed over-student reports prior to submission.
HEERF Annual Report: City Colleges did not have sufficient supporting evidence that "review controls were performed over annual reports prior to submission.
HEERF Reporting: City Colleges did not have controls in place to appropriately track reporting deadlines.
City Colleges did not publicly post certain required reports accurately or on a timely basis. Tlie following instances of noncompliance were identified:
Required Reports not Submitted
HEERF I Student Portion: None of the required seven colleges' first quarter reports for the period of July 1, 2020 through September 30, 2020 were submitted.
HEERF I Student Portion: None ofthe required seven colleges' third quarter reports for the period of January 1, 2021 through March 31, 2021 were submitted.
HEERF II Student Portion: None ofthe required seven colleges' fourth quarter reports for the period of April 1, 2021 through June 30, 2021 for were submitted.
HEERF III Student Portion: City Colleges did not submit the required fourth quarter report for the period of April 1, 2021 through June 30, 2021 for Malcolm X college.
Inaccurate Reports
HEERF I Student Portion: City Colleges posted a report on July 29, 2020 for Malcolm X college which did not reconcile to the underlying expense detail as ofthe date ofthe report. The difference was $46,746.
135
HAROLD WASHINGTON • HARRY S TRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD J. DALEY • WILBUR WRIGHT
CITY COLLEGES
OF CHICAGO
CCC.EDU
773.COLLEGE
180 N. Wabash Ave, Ste. 200 Chicago, IL 60601
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2022 (continued)
HEERF I Student Portion: City Colleges posted a report on August 28, 2020 for Malcolm X college which did not reconcile to the underlying detail as ofthe date ofthe report. The difference was $298,000.
The Annual Report 2020: City Colleges posted the annual report for Daley college on February 1, 2021 which did not reconcile to the underlying expense detail for total annual expenditures. The total difference was $426,872.
The Annual Report 2020: City Colleges posted the annual report for Kennedy King college on February 4, 2021 which not reconcile to underlying expense detail for total student expenditures due to a figure incorrectly reported for student count. The total difference was $62,229.
HEERF I MSI Portion: The first quarter report for the period of July 1, 2020 through September 30, 2020 did not reconcile to underlying expense detail for each ofthe seven colleges. The total difference for all colleges was $386,892.
HEERF I MSI Portion: The second quarter report for the period of October 1, 2020 through December 31, 2020 did not reconcile to underlying expense detail for each ofthe seven colleges. The total difference for all colleges was $89,642.
HEERF I MSI Portion: the fourth quarter report for the period of April 1, 2021 through June 30, 2021 did not reconcile to underlying expense detail for Harold Washington college. The difference was $30,144.
Status: Uncorrected. Repeat finding in fiscal year 2022. See finding 2022-001. Corrective Action Taken:
The Department of Education has given the institution the authorization to amend prior quarterly and annual reports that were posted in error. Student Financial and the Financial Aid Office will continue to fine-tune the review & approval process for all quarterly and annual reports. The Part-Time Project Manager for Finance will continue to monitor the Department of Education for any HEERF updates while validating all review and approval documents.
136
HAROLD WASHINGTON • HARRY S TRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD J. DALEY • WILBUR WRIGHT
CITY COLLEGES
OF CHICAGO
CCC.EDU
773.COLLEGE
180 N. Wabash Ave , Ste 200 Chicago, IL 60601
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2022 (continued)
Identifying Number: 2021-003 - Short-Term Programs
Audit Finding: 34 CFR Section 668.8(e) states that students enrolled in short-term programs are not eligible to receive Pell or SEOG Grant funds. For two out of sixteen students tested (12.5%), City Colleges improperly disbursed Pell Grants to students enrolled in short-term programs.
Status: Corrected.
Corrective Action Taken:
The PeopleSoft system has been configured to hold all disbursements for short-term programs until Title IV is verified. All Pell and SEOG Disbursements were returned.
Identifying Number: 2021-004 - Short-Term Programs Placement Rates
Audit Finding: 34 CFR Section 668.8(e) states that students enrolled in short-term programs are not eligible to received Pell or SEOG Grant funds. For ten out of twelve students tested, City Colleges improperly disbursed Pell and SEOG Grants to students enrolled.in short-term programs.
Status: Uncorrected. Repeat finding in fiscal year 2022. See finding 2022-003.
Corrective Action Taken:
The Financial Aid Office will work with campus leadership to develop a gainful employment reporting process at Daley College and Wright College for short term programs. The reporting structure will include an outreach protocol to be completed and report on currently enrolled during the end of term processing for each semester.
137
HAROLD WASHINGTON • HARRY S TRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD J. DALEY • WILBUR WRIGHT
CITY COLLEGES
OF CHICAGO
CCC.EDU
773.COLLEGE
180 N. Wabash Ave , Ste 200 Chicago, IL 60601
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2022 (continued)
Identifying Number: 2021-005 - Enrollment Reporting
Audit Finding: CFR section 685.309 and 690.83(b)(2) requires City Colleges to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days ofthe student's date of determination of withdrawal. Four out of sixty students tested (7%) who withdrew from City Colleges for which status changes were not properly reported to the National Student Loan Data System (NSLDS) within the 60-day requirement. The status change reports were between 95 and 256 days late. Additionally, one out of sixty students tested withdrew from City Colleges for which status changes were never reported to the National Student Loan Data System (NSLDS).
Status: Uncorrected. Repeat finding in fiscal year 2022. See finding 2022-002. Corrective Action Taken:
The enrollment reporting functions are housed in the college's registrar office and separate from financial aid. An enrollment file is generated at the district level and uploaded quarterly.
The Registrar's Office & Financial Aid Office will create a weekly meeting to update its enrollment reporting procedures and create a reconciliation process to ensure all students are reported to NSLDS.
Identifying Number: 2021-006 - Direct Loan Quality Assurance System
Audit Finding: 34 CFR Section 685.300(b) (9) require schools to implement and document a quality assurance process to ensure that City Colleges is complying with program requirements and meeting program objectives. During the prior year audit, it was determined that City Colleges did not have a formally documented direct loan quality assurance process. During the current fiscal year, City Colleges documented a formal direct loan quality assurance process, however, the process was not documented for the entire fiscal year. The documentation was completed in August 2020.
Status: Corrected. Corrective Action Taken:
All Financial Aid manuals and policies go through a bi-annual review to ensure timely updates.
138
HAROLD WASHINGTON • HARRY S TRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD J. DALEY • WILBUR WRIGHT
CITY COLLEGES
OF CHICAGO
CCC.EDU
773.COLl.EGE
180 N Wabash Ave, Ste. 200 Chicago, 11.60601
RSM US LLP
30 S. Wacker Drive, Suite 3300 Chicago Illinois 60606
CORRECTIVE ACTION PLANS
Finding 2022-001 - COVID-19 Education Stabilization Fund: Higher Education Emergency Relief Fund Reporting
Condition
City Colleges did not have sufficient documentation that internal controls were in place and operating effectively relative to the following areas:
HEERF Student Reporting: City Colleges did not have sufficient supporting evidence that review controls were performed over the July 1, 2021 - September 30, 2021 quarterly student report prior to submission.
HEERF MSI Reporting: City Colleges did not have sufficient supporting evidence that review controls were performed over the July 1; 2021 - September 30, 2021 quarterly
v student report prior to submission.
City Colleges did not publicly post certain required reports accurately. The following instance of
noncompliance was identified: - v :
HEERF Student Portion: City Colleges posted a report on July 8, 2022 for Wilbur Wright college for the period of April 1, 2022 - June 30, 2022 which did not reconcile to the underlying expense detail as ofthe date ofthe report. The difference was $307,750.
Cause • ¦
City Colleges did not have effective internal controls in place to ensure reports were posted accurately and timely. Student Finance and FAO created a new Review & Approval Process for F1EERF Reporting that was not implemented until January 2022.
Corrective Action Taken or Planned
The Department of Education has given the institution the authorization to amend prior quarterly and annual reports that was posted in error. Student Financial and the Financial Aid Office will continue to fine-tune the Review and Approval Process for all quarterly and annual reports. The Part-Time Project Manager for Finance will continue to monitor the Department of Education for any HEERF updates while validating all review and approval documents.
139
HAROLD WASHINGTON • HARRY S TRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD |. DALEY • WILBUR WRIGHT
CCC.EDU
OFCHICAGO 773.COLI.EGE
180 N. Wabash Ave , Ste. 200 Chicago, 11.60601
CORRECTIVE ACTION PLANS (Continued)
Contact Person: Associate Vice Chancellor, Financial Aid & Scholarships - Richard Hayes Anticipated Completion Date: January 2023
Finding 2022-002 - Return of Title IV Funds - Enrollment Reporting
Condition
For two out of sixty students tested (3%) who withdrew from City Colleges, the students' withdrawal date reported to the National Student Loan Data System (NSLDS) for campus level and program level did not match the institution's records.
For one out of sixty students tested (2%) who withdrew from City Colleges, the student's withdrawal date reported to the National Student Loan Data System (NSLDS) for campus level and program level did not match the institution's records. The student's status change at the campus level and program were not reported to the National Student Loan Data System (NSLDS) within the 60-day requirement.
For two out of sixty students tested (3%) who withdrew from City Colleges, the students' status change at the campus level and program level were not reported to the National Student Loan Data System (NSLDS) within the 60-day requirement.
For nine out of sixty students tested (15%) who withdrew from City Colleges, the students' status change at thc campus level and program level was never reported the National Student Loan Data System (NSLDS).
For six out of sixty students tested (10%) who withdrew from City Colleges, the students' status change at the program level was never reported the National Student Loan . Data System (NSLDS).
For one out of sixty students tested (2%) who withdrew from City Colleges, the student's status change at the program level was not reported to the National Student Loan Data System (NSLDS) within the 60-day requirement.
For one out of sixty students tested (2%) who withdrew from City Colleges, the student's status change at the campus level was not reported to the National Student Loan Data System (NSLDS) within the 60-day requirement.
For four out of sixty students tested (7%) who withdrew from City Colleges, the students' withdrawal status reported to the National Student Loan Data System (NSLDS) for campus level and program level did not match the institution's records.
140
HAROLD WASHINGTON • HARRYSTRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD J DALEY • WILBUR WRIGHT
CITY COLLEGES CCC.EDU 180 N Wabash Ave , Ste 200
OF CHICAGO 773.COLLEGE Chicago, IL 60601
CORRECTIVE ACTION PLANS (Continued) Cause
Tlie Academic Systems & Registrar Office does not have an effective system in place to ensure all official student status changes are reported to the lender in a timely manner.
Corrective Action Taken or Planned
The enrollment reporting functions are housed in the college's registrar office and separate from financial aid. An enrollment tile is generated at the district level and uploaded quarterly. The Registrar's Office and Financial Aid Office will create a weekly meeting to update its enrollment reporting procedures and create a reconciliation process to ensure all students are reported to NSLDS.
Contact Person: Associate Vice Chancellor, Academic Systems - Laura Clark. Associate Vice Chancellor, Financial Aid & Scholarships - Richard Hayes
Anticipated Completion Date: January 2023
Finding 2022-003 - Short Term Program Place Rate
Condition >-
The College cannot demonstrate compliance with the gainful employment placement rate of 70% calculation for the short-term program at a post-secondary vocational institution.
Cause ¦ .
The financial aid office did not follow-up on the gainful employment of students. Currently the Financial Aid Office does not manage the Short-Term Program Gainful Employment Requirement at the campus level. That process is managed by the campus.
Corrective Action Taken or Planned
City Colleges currently has two short term programs:
• Computer Numerical Machining (Daley College, Wright College)
141
HAROLD WASHINGTON • HARRYSTRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD j. DALEY • WILBUR WRIGHT
CITY COLLEGES
OF CHICAGO
CCC.EDU
773.COLI.EGE
180 N. Wabash Ave , Ste 200 Chicago, IL 60601
CORRECTIVE ACTION PLANS (Continued)
The Financial Aid Office will work with campus leadership to develop a gainful employment reporting process at Daley College and Wright College for short term programs. The reporting structure will include an outreach protocol to be completed and reported on currently enrolled during End of Term Processing for each semester.
Contact Person: Associate Vice Chancellor, Financial Aid & Scholarships - Richard 1 layes Anticipated Completion Date: January 2023
142
HAROLD WASHINGTON • HARRYSTRUMAN • KENNEDY-KING • MALCOLM X • OLIVE-HARVEY • RICHARD J. DALEY • WILBUR WRIGHT
Please contact us if you would like additional copies of the Annual Comprehensive Financial Report for the year ended June 30, 2022: Pagcs/Annual-Finance-and-Budget-Reports
For further information or to learn about our educational, operational and employment opportunities, please visit the CCC website at .
Office of Finance
180 N. Wabash, Suite 200 Chicago, IL 60601 (312) 553-2500 Phone
CITY COLLEGES'
of CHICAGO