1. Chancellor’s Office Updates
Community College Internal Auditors
Fall 2018 Conference
October 4-5, 2018
Fullerton College
Michael R. Quiaoit, Dean – Student Services and Special Programs
Wrenna Finche, Director – Fiscal Standards and Accountability

2. Agenda Student Centered Funding Formula (SCFF)
Budget & Legislative Update
Student Equity and Achievement (SEA) Program
Annual Audit Update

3. Student Centered Funding Formula (SCFF)

4. Given the challenges we face, we must reexamine our policies and practices to align with the Vision for Success.
The Student Centered Funding Formula is one of several connected efforts aimed at reaching the Vision goals under the Guided Pathways framework.

5. Challenges
Most students who enter a community college never complete a degree or certificate or transfer.
Achievement gaps persist across student groups and across regions.
Students who do reach an educational goal take a long time to do so.

6. Discussions about a new funding formula began more than a year ago, given concerns among system stakeholders that enrollment—the traditional driver of funding—has been stagnant in many districts.
Enrollment

7. In reforming funding for community college districts, we aim to do the following:
Provide groups of students that have faced barriers to success with additional support to meet our goals.
Encourage progress toward the Vision for Success adopted by the Board of Governors.
Make resources most useful to community college districts by making them stable, predictable, and flexible.

8. We want community college finance to further the activities the Chancellor’s Office is undertaking through the Guided Pathways framework.
Associate Degree for Transfer
Associate Degree
Regional Living Wage
Baccalaureate Degree
Completion of nine or more CTE# Units
Credit Certificates
Transfer to Four-Year University
Transfer-Level Math and English

9. Ye Olde Funding Formula (1996 – 2018)
District size (number and size of colleges and centers)
Each student (FTES) funded at same rate
for Credit, Noncredit, and CDCP

10. Milestone
“…California’s state leaders have truly delivered on a promise to put students first and set an example for the rest of the nation by adopting a new funding formula that incentivizes student success…”
–Chancellor Eloy Ortiz Oakley

11. The Student Centered Funding Formula is a three-part model that (1) supports costs of education by linking funding to enrollment, (2) recognizes higher needs of students who have historically faced barriers to success, and (3) creates new financial incentives around the goals that matter to our students.

12. Student Centered Funding Formula
Base Allocation = Ye Olde Funding Formula
Supplemental Allocation—Counts of low-income students.
Student Success Allocation—Counts of outcomes related to the Vision for Success, with “premiums” for outcomes of low-income students.
August 27, 2018

13. Ye Olde Funding Formula | SCFF

14. SCFF Fun Facts
Noncredit FTES, Special Admit, and Inmate FTES is funded at current rates.
Special Admit and FTES ‘outcomes’ count for Supplemental and Student Success allocations.
The rates are calculated to provide a three-year transition.
Base Allocation
70%
65%
60%
Supplemental Allocation
20%
Student Success Allocation
10%
15%

15. Supplemental Allocation
Districts receive one “point” based on prior year data:
Pell Grant recipients.
California College Promise Grant recipients.
AB 540 students.
August 27, 2018

16. Student Success Allocation
Student Success Allocation—Measures
All Students
Promise Grant Premium
Pell Grant Premium
Associate degrees for transfer granted 4 6
Associate degrees granted (excluding ADTs) 3
4.5
Baccalaureate degree granted
Credit certificates (16 units or more) granted 2
Completion of transfer-level mathematics and English courses within first academic year of enrollment
Successful transfer to four-year university
1.5
2.25
Completion of nine or more CTE units 1
Attainment of regional living wage
August 27, 2018

17. Point Values
August 27, 2018

18. Example 1 Allocations Dollars Base Allocation $3,727
Supplemental Allocation
n/a
Student Success Allocation
Completion of transfer-level mathematics and English courses within first academic year of enrollment
(2 points * $440)
880
Total for 1 FTE
$4,607

19. Example 2 Allocations Dollars Base Allocation $3,727
Supplemental Allocation
College Promise & Pell Recipient
(2 points * $919)
1,838
Student Success Allocation
Completion of transfer-level mathematics and English courses within first academic year of enrollment
(2 points * $440) + (5 points * $111)
1,435
Total for 1 FTE
$7,000

20. Hold Harmless Provision
In , , and , a district would receive the greater of the formula total or the amount the district received in , adjusted by the changes in the cost-of-living.
The formula includes a “stability” provision that delays any decreases in revenues by one year.

21. Chancellor’s Office Implementation Team
Board of Governors
Legislature
Governor
Oversight Committee
Advisory Groups
Chancellor’s Office Implementation Team
August 27, 2018

22. SCFF Oversight Committee
The Legislature established the committee for the purpose of continuously evaluating and reviewing the implementation of the SCFF. The committee consists of 12 members:
Four members appointed by the Senate Committee on Rules with at least one of these members employed by a community college district in a classified position.
Four members appointed by the Speaker of the Assembly with at least one of these members being a faculty member from a community college district.
Four members appointed by the Governor serving a four-year term with at least one being a community college administrator.

23. Goals of Implementation Team
To communicate how the implementation of the Student Centered Funding Formula (SCFF) advances the Vision for Success under the Guided Pathways framework. 
To apportion funds consistent with the statutes related to the SCFF. 
To support community colleges in implementing these policies by providing professional development and technical assistance. 
To align system policies, practices, and systems with these changes. 
To maintain stability in in the policy environment by building coalitions and making decisions transparently.

24. The Chancellor’s Office will provide guidance, technical assistance, and professional development as we make the transition.

25. Website URL
Address
StudentCenteredFundingFormula.aspx

26. Other Support We have scheduled three SCFF webinars:
September 13—Nuts and Bolts of the SCFF missed it
October 8, 10:30 AM -12:00 PM —Deep Dive into Data
November 5, 2:00-3:00 — Information on Local Goals

27. SCFF Questions?

28. Budget & Legislative Update

29. Recently Approved Legislation
SSSP, BS, SE now SEA Program
Apprenticeship – some FTES ok
CCAP Dual Enrollment – Charter ok, Online ok
Nonresident Tuition Fee Exemption – Eligible Special Immigrant Visa and Refugees Students
AB 540 – Attendance & Completion requirement changes
Noncredit only students EXEMPT from Residency requirements

30. Title 5 Regulatory Changes
Nonresident/Noncredit FTES ok
Proposed Regulatory Changes:
FTES for Supervised Tutoring – Student self-referral ok
Elimination of fourth quarter CCFS-311Q Reporting Requirement

31. Board of Governors 2019-20 Budget and Legislative Request
5% increase ($345 million) in the funding rates for the Student Centered Funding Formula to address community colleges’ general operating expense increases (in addition to the cost-of-living adjustments and other baseline adjustments)
$1.5 billion for Cal Grant program reforms (paid from non-Proposition 98 funds)
5% increase ($23 million) for the Student Equity and Achievement Program
$50 million in ongoing funds for faculty support
$25 million in ongoing funds for a new College-Wide Professional Development Program
$20 million in onetime funds to expand work-based learning, including apprenticeship
The proposed reforms to the Cal Grant awards program are to address current inequities in eligibility that adversely impact community college students who are non-traditional or returning students. The reforms include:
Linking the maximum awards to the total cost of attendance, rather than tuition
Entitling students to Cal Grant awards based on financial need as defined by the expected family contribution (rather than their age, how recently they graduated from high school, or what their grade point average was)
Extending the Cal Grant to all certificate and associate degree programs offered at community colleges, regardless of whether the programs are oriented to transfer to four-year universities or to careers
The proposal for the increase in Student Equity and Achievement Program funds comes with a request to establish—through the consultation process—a methodology for allocating the funds in a way to create financial incentives for meeting the goals of the system’s Vision for Success and to provide flexibility to local districts in designing their programs.
The request for faculty support funds is tied to a proposal to use the consultation process, including deliberations by the Workgroup on Regulations related to the 50 Percent Law and the full-time faculty obligation, to determine how best to allocate the funds and allow for some local flexibility in the use of the funds.
The College-Wide Professional Development Program request is an ongoing augmentation to continue the $5 million in one-time funds provided in the current year for the Classified School Employee Professional Development Block Grant Program.

32. Budget Update Questions?

33. Student Equity and Achievement (SEA) Program
Michael R. Quiaoit, Dean – Student Services and Special Programs
Building out the guided pathways leadership team:
Laura Hope
Michael Quiaoit
Rob Rundquist
Mina Dadgar
Guided Pathways Advisory 2.0
Partners Network

34. TOPICS What is Student Equity and Achievement Program?
What happened to SSSP, Student Equity, and BSI
Key deliverables in the Student Equity and Achievement Program

35. Intent - EDC 78222(a)
(a) (1) The Student Equity and Achievement Program is hereby established.
(2) It is the intent of the Legislature that funds for the Student Equity and Achievement Program support the California Community Colleges in advancing the systemwide goal to boost achievement for all students with an emphasis on eliminating achievement gaps for students from traditionally underrepresented groups by doing of all of the following:
(A) Implementing activities and practices pursuant to the California Community College Guided Pathways Grant Program.
(B) Ensuring students complete their educational goals and a defined course of study.
(C) Providing quality curriculum, instruction, and support services to students who enter college deficient in English and mathematics to ensure these students complete a course of study in a timely manner.

36. Requirements - EDC 78222(b)
(b) As a condition of the receipt of funds for purposes of this section, a district shall comply with all of the following:
(1) Maintain a student equity plan pursuant to Section to ensure equal educational opportunities and to promote student success for all students, regardless of race, gender, age, disability, or economic circumstances.
(2) Provide student matriculation services pursuant to Section 78212, including implementation of orientation, counseling and advising, referral to specialized student support services, and other education planning services needed to assist a student in making informed decisions about his or her educational goal and course of study and in developing an education plan. The Office of the Chancellor of the California Community Colleges shall establish guidelines on student matriculation services, including, but not limited to, the development of an education plan leading to a course of study. Notwithstanding any other law, students who are exempted from matriculation services pursuant to Section are not subject to the requirements of this paragraph.
(3) Adopt and implement placement policies consistent with the requirements of Section
(4) Provide all students with an education plan, which identifies courses, a sequence of courses, key progress milestones, and other requirements the student must complete to earn an associate degree, career technical education certificate, other community college certificate, or meet transfer requirements. Notwithstanding any other provision of law, students who are exempted from having an education plan under Section are not subject to the requirement of this paragraph.
(5) Provide a report to the chancellor’s office by January 1 of each year detailing how funding pursuant to this section was expended in the prior fiscal year and for what specific purposes. A district report shall also include an assessment of the progress in advancing the goals identified in paragraph (2) of subdivision (a).

37. Programmatic Changes

38. Credit and Noncredit SSSP
A Credit and Noncredit SSSP Plan (Integrated Plan) is no longer required
Funding will not be based on the SSSP Allocation formula (e.g. counts of Core Services: Orientation, Education Plans, etc.) for both credit and noncredit
Core matriculation services identified in EDC (SSSP Matriculation Services) are still required

39. Student Equity
All requirements from EDC (Student Equity Plan) are still in effect
Integrated Plan information does not replace Student Equity plan
Next Student Equity Plan due to the Chancellor’s Office June 30, 2019

40. Basic Skills Initiative
A Basic Skills Plan is no longer required (Integrated Plan)
BSI allocation included in SEA funding
Alignment with EDC (AB 705) requirements

41. Program Reporting 2016-17 2017-18 2018-19 2019-20 SSSP Student Equity
Year-End Expenditure Report – September 17, 2018
Not Applicable
Student Equity
Student Equity Plan – Due June 30, 2019 (3 year plan)
BSI
Integrated Plan ( )
Mid-Year Expenditure Report – August 31, 2018
Year-End Expenditure Report – September 2019
SEA Program
Annual Report – Due January 2020
Annual Report – Due January 2021

42. Summary SEA Program combines SSSP, Student Equity, and BSI
Student Equity Plan remains, others do not
Education Plans for all students
Funding will be at levels for colleges (all programs combined), until new formula is developed
New report is due each year – first one will be January 2020

43. Thank You!

44. Annual Audit & CDAM Updates

45. Annual Financial and Compliance Audit
4/3/2019
Annual Financial and Compliance Audit
Community college districts are required to have an annual audit conducted by a CPA firm (EC § )
The Contracted District Audit Manual (CDAM) prescribes the requirements and procedures for the annual audit
New CDAM issued each Fiscal Year
Section 400 of CDAM -State Compliance Tests (15 tests in )
Of the 15 State tests, 7 directly relate to verifying FTES eligibility for State general apportionment. Findings in these areas could result in an apportionment adjustment. 45

46. Common State Compliance Audit Findings
4/3/2019
Incorrect Attendance Accounting Procedures (T5 §§ et seq.)
Weekly Census procedure incorrectly applied.
Support records for positive attendance hours generated did not agree with hours claimed.
Claimed students that were required to be removed from census roster.
Apportionment claimed for cancelled “census-based” classes.
Programming Errors in attendance/scheduling information system caused incorrect FTES totals 46

47. Education Protection Account
Recent SCO Audit of EPA Funds
No findings for the Chancellor’s Office!
However:
EPA Expenditures didn’t reconcile to fiscal year EPA apportionment
(timing differences)
Instructional Activities are Great!
Administrative salaries, benefits, and other costs are PROHIBITED
Recent SCO Audit of EPA – no findings for Chancellor’s Office
9 districts showed administrative costs in the Reconciliation of EPA Expenditures with NO ASSOCIATED FINDING?
Should be all in “Instructional Activities”
EPA Suggested Audit Procedures
Verify the local governing board held an open session public meeting where they took action to adopt a plan to expend EPA funds.
2) Verify the district expended EPA funds according to the board adopted EPA spending plan.
3) Verify EPA funds were not used to support administrative salaries and benefits or other administrative costs consistent with the Chancellor’s Office Accounting Advisory FS dated December 19, 2016.

48. Review of 2017-18 Audit Reports
EXTRAPOLATED Questioned FTES
Education Protection Account
Reconciliation of Financial Statements to CCFS-311
Pension and OPEB liabilities
Acceptance/Follow-Up Letters
Repeat Findings
District Corrective Action Plan (CAP) required
Submit CAP to Chancellor’s Office by April 1, 2018
Extrapolate Questioned FTES from Statistical Sample or 100% testing. We look only at FTES, $$ affect on apportionment determined at C.O. as per FTES rates fluctuate.
Pension (82) and OPEB obligations (GASB 75)
Is reconciliation to CCFS-311 helpful?
As CPAs and Internal Auditors – Are there any other areas you would recommend that we focus on?

49. Fiscal Health Monitoring
Opinions
Financial Statement
Federal Compliance
State Compliance
Management Letter
Findings
Repeat Findings
Pension and OPEB liability trends
Each audit report & Mgt Letter analyzed individually – looking to id CONTROL issues
Remember, repeat findings = CAP submitted to Chancellor’s Office by April 1, 2018
Overall Fiscal Health assessment combined with financial data from CCFS-311 may result in a CAP also.

50. FY 18-19 CDAM – Revisions/Updates
Removed:
Section 428 – Student Equity
Section 429 – Student Success & Support Program Funds
The Student Equity and Student Success & Support programs have been replaced by the Student Equity Achievement (SEA) Program.
Section 440 – Intersession Extension Program
The Education Code that created this program was repealed. 

51. FY 18-19 CDAM – Revisions/Updates
Section 424 – State General Apportionment Funding System
Background and criteria sections now reflect the newly enacted Student Centered Funding Formula (SCFF).
NO specific audit procedures for supplemental or student success allocations are added this year.
Apprenticeship programs that don’t claim RSI are now eligible to claim FTES for apportionment purposes.
Start thinking about how data flows
Initial procedures will be related to developing and implementing a process to ensure SCFF data is complete and accurate.
Apprenticeship programs that don’t claim RSI can now claim FTES.
AB 1809 Budget Trailer Bill- Apprenticeship Changes
Beginning in , districts may report hours generated by apprentices on the CCFS- 320 if not reported on the CCFS-321 (must use positive attendance method to calculate FTES)
Course must be taught by a community college faculty member to report attendance on the CCFS-320
Enrollment may be limited to apprentices if that course or course section is required for those students as a part of a registered apprenticeship program.
If the course is part of an apprenticeship program in the building and construction trades, the sponsor must approve a decision to report attendance on the CCFS-320 rather than on the CCFS-321.

52. FY 18-19 CDAM – Revisions/Updates
Section 425 – Residency
The audit procedures have been updated to reflect recent legislation related to the residency determination for students cross enrolled through the online course exchange of the Online Education Initiative Consortium.
The residency determination of the student’s home college is accepted if the teaching college possesses a signed consortium reciprocity agreement.

53. FY 18-19 CDAM – Revisions/Updates
Section 427 – Dual Enrollment
Recent legislation now allows :
CCAP agreements with charter schools
Closed courses for eligible high school students in person or using an online platform
In addition, the CCAP annual report must include the total number of FTES generated by online CCAP participants.

54. Annual Audit Update Questions?