GLENDALE COMMUNITY COLLEGE DISTRICT - Californiatrackprop30.ca.gov/AuditReport/CCD/2016/Glendale Community Colleg… · GLENDALE COMMUNITY COLLEGE DISTRICT TABLE OF CONTENTS JUNE

GLENDALE COMMUNITYCOLLEGE DISTRICT

ANNUAL FINANCIAL REPORT

JUNE 30, 2016

GLENDALE COMMUNITY COLLEGE DISTRICT

TABLE OF CONTENTSJUNE 30, 2016

FINANCIAL SECTIONIndependent Auditor's Report 2Management's Discussion and Analysis 5Basic Financial Statements - Primary Government

Statement of Net Position 13Statement of Revenues, Expenses, and Changes in Net Position 14Statement of Cash Flows 15Fiduciary Funds

Statement of Net Position 17Statement of Changes in Net Position 18

Notes to Financial Statements 19

REQUIRED SUPPLEMENTARY INFORMATIONSchedule of Other Postemployment Benefits (OPEB) Funding Progress 70Schedule of the District's Proportionate Share of the Net Pension Liability 71Schedule of District Contributions 73Note to Required Supplementary Information 74

SUPPLEMENTARY INFORMATIONDistrict Organization 76Schedule of Expenditures of Federal Awards 77Schedule of Expenditures of State Awards 79Schedule of Workload Measures for State General Apportionment 80Reconciliation of Education Code 84362 (50 Percent Law) Calculation 81Reconciliation of Annual Financial and Budget Report (CCFS-311) With theFinancial Statements 83Proposition 30 Education Protection Act (EPA) Expenditure Report 84Reconciliation of Governmental Funds to the Statement of Net Position 85Note to Supplementary Information 87

INDEPENDENT AUDITOR'S REPORTSReport on Internal Control Over Financial Reporting and on Compliance and OtherMatters Based on an Audit of Financial Statements Performed in Accordance WithGovernment Auditing Standards 90

Report on Compliance for Each Major Program and on Internal Control OverCompliance Required by the Uniform Guidance 92

Report on State Compliance 95

SCHEDULE OF FINDINGS AND QUESTIONED COSTSSummary of Auditor's Results 98Financial Statement Findings and Recommendations 99Federal Awards Findings and Questioned Costs 100State Awards Findings and Questioned Costs 102Summary Schedule of Prior Audit Findings 104

1

FINANCIAL SECTION

10681 Foothill Blvd., Suite 300 Rancho Cucamonga, CA 91730 Tel: 909.466.4410 www.vtdcpa.com Fax: 909.466.4431

Vavrinek, Trine, Day & Co., LLPCertified Public Accountants

VALUE THE D IFFERENCE

2

INDEPENDENT AUDITOR'S REPORT

Board of TrusteesGlendale Community College DistrictGlendale, California

Report on the Financial Statements

We have audited the accompanying financial statements of the business-type activities and the aggregateremaining fund information of Glendale Community College District (the District) as of and for the year endedJune 30, 2016, and the related notes to the financial statements, which collectively comprise the District's basicfinancial statements as listed in the Table of Contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordancewith accounting principles generally accepted in the United States of America; this includes the design,implementation, and maintenance of internal control relevant to the preparation and fair presentation of financialstatements that are free from material misstatements, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with auditing standards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States, and the 2015-2016 Contracted District Audit Manual, issued by the California CommunityColleges Chancellor's Office. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor's judgment, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the District's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we expressno such opinion. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of significant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

3

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the respectivefinancial position of the business-type activities and the aggregate remaining fund information of the District as ofJune 30, 2016, and the respective changes in financial position and cash flows thereof for the year then ended inaccordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require the Management's Discussionand Analysis on pages 5 through 12, the Schedule of Other Postemployment Benefits (OPEB) Funding Progress onpage 70, the Schedule of the District's Proportionate Share of the Net Pension Liability on pages 71 through 72,and the Schedule of District Contributions on page 73 be presented to supplement the basic financial statements.Such information, although not a part of the basic financial statements, is required by the GovernmentalAccounting Standards Board, who considers it to be an essential part of financial reporting for placing the basicfinancial statements in an appropriate operational, economic, or historical context. We have applied certain limitedprocedures to the required supplementary information in accordance with auditing standards generally accepted inthe United States of America, which consisted of inquiries of management about the methods of preparing theinformation and comparing the information for consistency with management's responses to our inquiries, the basicfinancial statements, and other knowledge we obtained during our audit of the basic financial statements. We donot express an opinion or provide any assurance on the information because the limited procedures do not provideus with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectivelycomprise the District's basic financial statements. The accompanying supplementary information listed in theTable of Contents, including the Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code ofFederal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of thebasic financial statements.

The accompanying supplementary information is the responsibility of management and was derived from andrelates directly to the underlying accounting and other records used to prepare the basic financial statements.Such information has been subjected to the auditing procedures applied in the audit of the basic financialstatements and certain additional procedures, including comparing and reconciling such information directly tothe underlying accounting and other records used to prepare the basic financial statements or to the basic financialstatements themselves, and other additional procedures in accordance with auditing standards generally acceptedin the United States of America. In our opinion, the accompanying supplementary information is fairly stated, inall material respects, in relation to the basic financial statements as a whole.

4

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2016, onour consideration of the District's internal control over financial reporting and on our tests of its compliance withcertain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that reportis to describe the scope of our testing of internal control over financial reporting and compliance and the results ofthat testing, and not to provide an opinion on the internal control over financial reporting or on compliance. Thatreport is an integral part of an audit performed in accordance with Government Auditing Standards in consideringthe District's internal control over financial reporting and compliance.

Rancho Cucamonga, CaliforniaDecember 21, 2016

Dr. David ViarSuperintendent/President

BOARD OF TRUSTEESAnita Quinonez Gabrielian

Dr. Armine HacopianDr. Vahé Peroomian

Ann H. RansfordAnthony P. Tartaglia

1500 North Verdugo Road • Glendale, CA 91208-2894 • 818-240-1000 • fax: 818-549-9436 • www.glendale.edu

5

In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic FinancialStatements and Management's Discussion and Analysis for State and Local Governments, which established anew reporting format for annual financial statements of governmental entities. In November 1999, GASBreleased Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for PublicColleges and Universities, which applies the new reporting standards to public colleges and universities.

The California Community Colleges Chancellor's Office has recommended that all State community collegesfollow the Business-Type Activity (BTA) model for financial statement reporting purposes.

The following discussion and analysis complies with the GASB standard and provides an overview of GlendaleCommunity College District's (the District) financial position and activities for the year ended June 30, 2016, withselected comparative information for the year ended June 30, 2015. This discussion has been prepared bymanagement and should be read in conjunction with the financial statements and the notes which follow thissection. Responsibility for the completeness and accuracy of this information rests with the District management.

As required by generally accepted accounting principles, the annual report consists of three basic financialstatements that provide information on the District as a whole:

The Statement of Net Position

The Statement of Revenue, Expenses, and Changes in Net Position

The Statement of Cash Flows

Each of these statements will be discussed.

FINANCIAL AND ENROLLMENT HIGHLIGHTS

Reported enrollment at the District decreased in 2015-2016. Credit enrollment decreased about 0.9 percent.Noncredit enrollment decreased about 0.96 percent from 2014-2015.

Nonresident enrollment increased almost 3.0 percent in 2015-2016.

The District ended the year with an unrestricted General Fund balance of $11.1 million. This was an increaseof approximately $6.4 million from the prior year due to one-time State allocations.

The District ending fund balance increased from 5.63 percent to 11.96 percent due to one-time Stateallocations.


MANAGEMENT'S DISCUSSION AND ANALYSISJUNE 30, 2016

6

STATEMENT OF NET POSITION

The Statement of Net Position includes all assets and liabilities using the accrual basis of accounting, which issimilar to the accounting used by most private-sector institutions. The biggest change in this statement is that ourfixed assets (land, building, and equipment) are capitalized and depreciated, and long-term obligations are nowincluded. As a result, they are now reflected as an asset on this statement. Net Position, the difference betweenassets and liabilities, are one way to measure the financial health of the District.

STATEMENT OF NET POSITION - PRIMARY GOVERNMENT

(Amounts in thousands)2016 2015

ASSETSCURRENT ASSETS

Cash and cash equivalents 45,463$ 32,310$Receivables 11,581 11,158Inventory and other assets 163 492

Total Current Assets 57,207 43,960NONCURRENT ASSETS

Capital assets, net 163,765 150,124Total Assets 220,972 194,084

DEFERRED OUTFLOWS OF RESOURCESDeferred charge on refunding 422 1,688Deferred outflows of resources related to pensions 17,408 5,647

Total Assets and Deferred Outflows of Resources 238,802$ 201,419$

LIABILITIESCURRENT LIABILITIES

Accounts payable and accrued liabilities 14,095$ 11,058$Unearned revenue 7,214 3,596Current portion of long-term obligations other than pensions 5,590 5,779

Total Current Liabilities 26,899 20,433NONCURRENT LIABILITIES

Noncurrent portion of long-term obligations other than pensions 81,882 85,592Aggregate net pension obligation 80,706 70,112

Total Noncurrent Liabilities 162,588 155,704Total Liabilities 189,487 176,137

DEFERRED INFLOWS OF RESOURCESDeferred inflows of resources related to pensions 20,199 19,777

NET POSITIONNet investment in capital assets 99,487 86,284Restricted 13,586 10,112Unrestricted (83,957) (90,891)

Total Net Position 29,116 5,505Total Liabilities, Deferred Inflows of Resources and Net Position 238,802$ 201,419$



7

Cash and cash equivalents consist of cash in the Los Angeles County Treasurer and associate studentsinvestments. Cash and cash equivalents were increased by approximately $13.2 million over last year due tothe one-time State allocations.

Receivables consist mainly of receivables from State and Federal grants and the apportionment funds duefrom the State. Receivables were flat. There was no significant change in its ending balance.

Capital Assets are the net historical value (original cost) of land, buildings, construction in progress, andequipment less accumulated depreciation. Capital Assets increased approximately $13.6 million due toongoing construction for the Sierra Vista Building projects.

Accounts Payable and Accrued Liabilities consist of payables to vendors and the June payroll. Payablesincreased approximately $3.0 million compared to 2014-2015 primarily due to construction payables.

Long-term obligations consist primarily of the general obligation bond issues and our 2007 COPS issues. Thetotal noncurrent liability decreased approximately $3.7 million from 2014-2015. Debt service payments andaccreted interest accruals were made reducing the principal on existing bond issues.



8

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

The Statement of Revenues, Expenses, and Changes in Net Position present the operating results of the District,as well as the nonoperating revenue and expenses. The State general apportionment and property taxes, whilebudgeted for operations, are considered nonoperating revenues according to the GASB standards. As a result, thisstatement will show a significant operating loss.

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION -PRIMARY GOVERNMENT


REVENUESOPERATING REVENUES

Net tuition and fees 11,145$ 10,929$Auxiliary enterprise 1,307 791

Total Operating Revenues 12,452 11,720Total Operating Expenses 148,816 146,750Operating Loss (136,364) (135,030)

NONOPERATING REVENUES (EXPENSES)State apportionment 62,493 58,436Grants and contracts - noncapital 59,405 46,326Local property taxes 22,449 17,466State taxes and other revenues 3,062 2,762Investment income (expenses) - net (1,872) (3,228)Other nonoperating revenues 2,694 3,884

Total Nonoperating Revenues 148,231 125,646Income (Loss) Before Other Revenues 11,867 (9,384)

OTHER REVENUESState and local revenues - capital 11,743 18,740

Change in Net Position 23,610$ 9,356$

Net Tuition and Fees are primarily enrollment fees, nonresident tuition, community service fees, and healthfees. Fees were flat. There was no significant change in its ending balance.

Auxiliary Enterprise revenue consists mainly of Cafeteria sales and the Self Insurance fund. This categoryincreased by approximately $500 thousand due to the Blue Shield Rebate.

State Apportionment increased by approximately $4.1 million over last year.

State Taxes and Other Revenues are our State lottery funds and mandated cost block grant. State Taxes andOther Revenues were relatively stable increasing by approximately $300 thousand over last year.

Investment Income is our interest earnings at the County Treasurer less interest on our bond issues. Thiscategory increased due to reduction of interest payment and General Obligation Bond payments.



9

FUNCTIONAL EXPENSES

In accordance with requirements set forth by the California State Chancellor's Office, the District reportsoperating expenses by object code. Operating expenses by functional classification are as follows:

Year ended June 30, 2016:

(Amounts in thousands)

Supplies,

Materials, and Equipment, Student

Employee Other Expenses Maintenance, Financial

Salaries Benefits and Services and Repairs Aid Depreciation Total

Instructional activities 38,692$ 10,934$ 1,523$ 1,595$ -$ -$ 52,744$

Academic support 3,490 (761) 86 20 - - 2,835

Student services 15,012 5,007 1,733 2,177 - - 23,929

Plant operations

and maintenance 2,994 1,213 7,271 50 - - 11,528

Institutional support

services 6,981 7,070 4,941 608 - - 19,600

Community services and

economic development 318 121 517 - - - 956

Ancillary services and

auxiliary operations 2,307 672 1,726 77 - - 4,782

Student aid - - - - 29,806 - 29,806

Physical property and

related acquisitions - - 766 (3,755) - - (2,989)

Depreciation expense - - - - - 5,625 5,625

Total 69,794$ 24,256$ 18,563$ 772$ 29,806$ 5,625$ 148,816$



10

STATEMENT OF CASH FLOWS

The Statement of Cash Flows provides information about cash receipts and payments during the year. Thisstatement also assists users in assessing the District's ability to meet its obligations as they come due and theDistrict's need for external funding.

STATEMENT OF CASH FLOWS - PRIMARY GOVERNMENT


Cash Provided by (Used in)Operating activities (125,919)$ (123,914)$Noncapital financing activities 145,895 127,052Capital financing activities (7,015) (405)Investing activities 192 219

Net Change in Cash 13,153 2,952Cash, Beginning of Year 32,310 29,358Cash, End of Year 45,463$ 32,310$

Cash Provided by Operating Activities are student fees less our operating expenses (salaries, benefits,supplies, and services).

Noncapital Financing Activities are our State apportionment and property taxes. Although these revenues areearned from student enrollment, they are non-operating since it comes from the State and not from theprimary users (students) of college programs.

Capital and Related Financing Activities are the proceeds received from the general obligation bond(increase) less the purchase of capital assets (land, buildings, and equipment).

Investing Activities are earning off investments and the general obligation bond proceeds.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

At June 30, 2016, the District had $163.8 million in a broad range of capital assets, including land, buildings, andfurniture and equipment. At June 30, 2015, our net capital assets were $150.1 million. The District is currently inthe middle of a major capital improvement program with construction ongoing throughout the college campus.These projects are primarily funded through our general obligation bonds. These projects are accounted forwithin our Construction in Progress account until the project is completed at which time the cost of the buildingsand/or improvements will be brought in to the depreciable Buildings and Improvements category.



11

Capital projects are continuing through the 2016-2017 fiscal year and beyond with primary funding through ourgeneral obligation bond.


Balance

July 1, 2015 Additions Deletions

Balance

June 30, 2016Land and construction in progress 49,150$ 12,584$ -$ 61,734$Building and improvements 137,180 2,744 - 139,924Furniture and equipment 20,016 3,938 - 23,954

Subtotal 206,346 19,266 - 225,612Accumulated depreciation 56,222 5,625 - 61,847

150,124$ 13,641$ -$ 163,765$

We present more detailed information regarding our Capital Assets in Note 7 of the financial statements.

Obligations

At the end of the 2015-2016 fiscal year, the District had $70.8 million in general obligation bonds outstanding.These bonds are repaid annually in accordance with the obligation requirements through an increase in theassessed property taxes on property within the Glendale Community College District boundaries. Otherobligations for the District include two certificates of participation and capital lease obligations.

In addition to the above obligations, the District is obligated to employees of the District for compensatedabsences, early retirement, load banking, postemployment benefits, and pension obligations.


Balance

July 1, 2015 Additions Deletions

Balance

June 30, 2016General obligation bonds 75,486$ 1,105$ 5,822$ 70,769$Certificates of participation 3,005 - 600 2,405Capital leases 45 1,903 547 1,401Compensated absences 3,433 - 42 3,391Early retirement 424 - 424 -Load banking 2,156 302 - 2,458Net OPEB obligation 6,822 2,479 2,253 7,048Aggregate net pension obligation 70,112 10,594 - 80,706

Total Long-Term Obligations 161,483$ 16,383$ 9,688$ 168,178$

Amount due within one year 5,590$

We present more detailed information regarding our long-term obligations in Note 11 of the financial statements.



12

ECONOMIC FACTORS THAT MAY AFFECT THE FUTURE

The November 8, 2016 election had several positive outcomes for the Glendale Community College District(GCCD). The extension of Proposition 30 (income tax), after it expires on December 31, 2018, will continue for12 additional years in the form of Proposition 55. This extension will provide continual access to approximately$13 million dollars per year to support instructional costs. In addition, the approval of Proposition 51 included$2 billion dollars earmarked for Community Colleges. GCCD will be able to submit construction projects tocompete for those financial resources. Finally, GCCD's local GC Bond was approved by 73 percent of the voters.This local bond measure totals $325 million dollars. These monies will be used to improve the GCCD campusesand facilities as stated in the bond ballot language.

Although the one-quarter of percent sales tax increase which was also initiated by the Governor's tax initiative(Proposition 30) will sunset at the end of 2016, Proposition 2 (Governor's Rainy Day Fund) could be used by theGovernor to cover revenue short falls. The Governor has expressed caution even with the improved State economy,there are still concerns with the loss of $4-$5 billion when sales tax rates revert back to the pre-Proposition 30level.

The State's economy continues to improve with tax receipts far exceeding initial estimates. As a result, the StateBudget provides significant increases for access, student success, and student equity. The Governor hasappropriated the new funding as "ONE-TIME". The District will be strategically prudent in the allocation of itsone-time funds to avoid any financial problems in the future years.

All of these resources will be used to continually enhance a learning environment to attract new students as well asprovide student support services that will encourage persistence of the existing student body. These activitiescould lead to higher enrollment numbers that could yield larger resource allocations to GCCD from the StateChancellors Office. Enrollment is the biggest concern with the college's budget. Enrollment was flat in 2014-2015and 772 FTEs from Summer 2015 were shifted to the 2014-2015 fiscal year to maximize revenue. The college willcontinue to use this State Chancellor's Office approved method of shifting FTES through 2018-2019. The collegehas implemented a strategic touchpoint strategy as it continues to look into ways to become more effective in itsenrollment management.

CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, students, and investors and creditors with ageneral overview of the District's finances and to demonstrate the District's accountability for the money itreceives. If you have any questions about this report or need additional financial information, contact the Districtat: Glendale Community College District, 1500 North Verdugo Road, Glendale, CA 91208.


STATEMENT OF NET POSITION - PRIMARY GOVERNMENTJUNE 30, 2016

The accompanying notes are an integral part of these financial statements.

13

ASSETSCURRENT ASSETS

Cash and cash equivalents 144,113$Investments - unrestricted 16,858,197Investments - restricted 28,460,521Accounts receivable 6,697,173Student loans receivable 4,883,525Prepaid expenses 147,939Inventories 15,103

Total Current Assets 57,206,571NONCURRENT ASSETS

Nondepreciable capital assets 61,734,410Depreciable capital assets, net of depreciation 102,030,904

Total Noncurrent Assets 163,765,314TOTAL ASSETS 220,971,885

DEFERRED OUTFLOWS OF RESOURCESDeferred charge on refunding 422,067Deferred outflows of resources related to pensions 17,407,613

Total Deferred Outflows

of Resources 17,829,680LIABILITIESCURRENT LIABILITIES

Accounts payable 13,577,558Accrued interest payable 517,284Unearned revenue 7,214,131Current portion of long-term obligations other than pensions 5,589,746

Total Current Liabilities 26,898,719NONCURRENT LIABILITIES

Noncurrent portion of long-term obligations other than pensions 81,882,026Aggregate net pension obligation 80,706,400

Total Noncurrent Liabilities 162,588,426TOTAL LIABILITIES 189,487,145

DEFERRED INFLOWS OF RESOURCESDeferred inflows of resources related to pensions 20,198,918

NET POSITIONNet investment in capital assets 99,486,959Restricted for:

Debt service 5,742,436Capital projects 70,963Educational programs 7,772,861

Unrestricted (83,957,717)TOTAL NET POSITION 29,115,502$


STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION -PRIMARY GOVERNMENT

FOR THE YEAR ENDED JUNE 30, 2016


14

OPERATING REVENUESTuition and Fees 21,150,277$

Less: Scholarship discount and allowance (10,004,860)Net tuition and fees 11,145,417

Internal Service Sales and Charges 1,307,362TOTAL OPERATING REVENUES 12,452,779

OPERATING EXPENSESSalaries 69,793,674Employee benefits 24,256,584Supplies, materials, and other operating expenses and services 18,563,335Financial aid 29,805,559Equipment, maintenance, and repairs 772,171Depreciation 5,625,027

TOTAL OPERATING EXPENSES 148,816,350

OPERATING LOSS (136,363,571)

NONOPERATING REVENUES (EXPENSES)State apportionments, noncapital 62,493,534Grants and Contracts, noncapital:

Federal 31,793,747State and local 27,611,054

Local property taxes levied for general purposes 16,353,781Local property taxes levied for capital debt 6,095,204State taxes and other revenues 3,062,293Investment income, noncapital 91,178Investment income, capital 101,139Interest expense on capital related debt (2,110,750)Interest income on capital asset-related debt 46,408Other nonoperating revenue 2,693,586

TOTAL NONOPERATING REVENUES (EXPENSES) 148,231,174

INCOME BEFORE OTHER REVENUES 11,867,603OTHER REVENUES

State revenues, capital 11,404,046Local revenues, capital 338,830

TOTAL OTHER REVENUES 11,742,876

CHANGE IN NET POSITION 23,610,479NET POSITION, BEGINNING OF YEAR 5,505,023NET POSITION, END OF YEAR 29,115,502$


STATEMENT OF CASH FLOWS - PRIMARY GOVERNMENTFOR THE YEAR ENDED JUNE 30, 2016


15

CASH FLOWS FROM OPERATING ACTIVITIES

Tuition and fees 14,414,155$

Loans issued to students (2,349,789)

Payments to vendors for supplies and services (15,940,574)

Payments to or on behalf of employees (93,545,107)

Payments to students for scholarships and grants (29,805,559)

Auxiliary enterprise sales 1,307,362

Net Cash Flows From Operating Activities (125,919,512)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

State apportionments 62,431,221

Grants and contracts 60,794,053

Property taxes 16,353,781

State taxes and other apportionments 3,171,692

Other nonoperating 3,143,738

Net Cash Flows From Noncapital

Financing Activities 145,894,485

CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES

Proceeds from capital debt 3,008,701

State revenue for capital purposes 11,404,046

Purchase of capital assets (20,074,444)Property taxes - related to capital debt 6,095,204

Principal paid on capital debt (6,969,776)

Interest costs on capital debt-net (863,489)

Interest received on capital investments 46,408

Local revenue for capital purposes 338,830

Net Cash Flows From Capital Financing Activities (7,014,520)

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received from investments 192,317

NET CHANGE IN CASH AND CASH EQUIVALENTS 13,152,770

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 32,310,061CASH AND CASH EQUIVALENTS, END OF YEAR 45,462,831$


STATEMENT OF CASH FLOWS - PRIMARY GOVERNMENT, CONTINUEDFOR THE YEAR ENDED JUNE 30, 2016


16

RECONCILIATION OF NET OPERATING LOSS TO

NET CASH FLOWS FROM OPERATING ACTIVITIES

Operating Loss (136,363,571)$

Adjustments to Reconcile Net Operating Loss to

Net Cash Flows From Operating Activities:

Depreciation expense 5,625,027

Changes in Operating Assets, Deferred Outflows, Liabilities and Deferred Inflows:

Receivables (2,349,789)

Stores inventories (130,819)

Accounts payable and other obligations 3,863,683

Prepaid expense 459,752

Unearned revenue 3,658,605

Change in deferred outflows related to pensions (11,760,872)

Change in deferred inflows related to pensions 421,848

Aggregate net pension obligation 10,594,649

Compensated absences, load banking and early retirement (164,422)

OPEB obligation 226,397Net Cash Flows From Operating Activities (125,919,512)$

CASH AND CASH EQUIVALENTS CONSIST OF THE FOLLOWING:

Cash in banks 144,113$

Investments 45,318,71845,462,831$

NONCASH TRANSACTIONSOn behalf payments for benefits 2,134,072$


STATEMENT OF FIDUCIARY NET POSITIONJUNE 30, 2016


17

ASSETS

Cash and cash equivalents 1,526,893$

Investments 3,854,091

Accounts receivable 30,836Student loan receivable 127,965

Total Assets 5,539,785

DEFERRED OUTFLOWS OF RESOURCES

Deferred outflows of resources related to pensions 221,056

LIABILITIESCurrent Liabilities

Due to student groups 885,033

Noncurrent LiabilitiesAggregate net pension obligation 380,645

TOTAL LIABILITIES 1,265,678

DEFERRED INFLOWS OF RESOURCES

Deferred inflows of resources related to pensions 13,470

NET POSITIONUnreserved 4,481,693$


STATEMENT OF CHANGES IN FIDUCIARY NET POSITIONFOR THE YEAR ENDED JUNE 30, 2016


18

ADDITIONS

Local revenues 861,741$

DEDUCTIONSEmployee benefits 173,059

Services and operating expenditures 1,275,559Total Deductions 1,448,618

Change in Net Position (586,877)

Net Position - Beginning 5,068,570Net Position - Ending 4,481,693$


NOTES TO FINANCIAL STATEMENTSJUNE 30, 2016

19

NOTE 1 - ORGANIZATION

The Glendale Community College District (the District) was established in 1983 as a political subdivision of theState of California and is a comprehensive, public, two-year institution offering educational services to residentsof the surrounding area. The District operates under a locally elected five-member Board of Trustees form ofgovernment, which establishes the policies and procedures by which the District operates. The Board mustapprove the annual budgets for the General Fund, special revenue funds, and capital project funds, but thesebudgets are managed at the department level. Currently, the District operates one community college and onecenter located in Glendale, California. While the District is a political subdivision of the State of California, it islegally separate and is independent of other State and local governments, and it is not a component unit of theState in accordance with the provisions of Governmental Accounting Standards Board (GASB) Statement No. 61.The District is classified as a Public Educational Institution under Internal Revenue Code Section 115 and is,therefore, exempt from Federal taxes.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Reporting Entity

The District has adopted GASB Statement No. 61, Determining Whether Certain Organizations are ComponentUnits. This statement amends Statement No. 14, The Financial Reporting Entity, to provide additional guidanceto determine whether certain organizations, for which the District is not financially accountable, should bereported as component units based on the nature and significance of their relationship with the District. The threecomponents used to determine the presentation are: providing a "direct benefit", the "environment and ability toaccess/influence reporting", and the "significance" criterion. As defined by accounting principles generallyaccepted in the United States of America and established by the Governmental Accounting Standards Board, thefinancial reporting entity consists of the primary government, the District, and the following component unit:

The Los Angeles County Schools Regionalized Business Service Corporation

The Los Angeles County Schools Regionalized Business Service Corporation (the Corporation) is a legallyseparate organization and a component unit of the District. The Corporation was formed to issue debtspecifically for the acquisition and construction of capital assets for the District. The financial activity hasbeen "blended" or consolidated within the financial statements of the District as if the activity was theDistrict's. The activity is included as the Other Debt Service Fund. Certificates of participation issued by theCorporation are included as long-term obligations of the District. Individually-prepared financial statementsare not prepared for the Los Angeles County Schools Regionalized Business Service Corporation.



20

Blended Component

Condensed component unit information for the Corporation, the District's blended component unit, for the yearended June 30, 2016, is as follows:

EXPENDITURES (281,815)$

TRANSFER IN 281,815

TRANSFER OUT (441,288)

CHANGE IN NET POSITION (441,288)

NET POSITION, BEGINNING OF YEAR 441,288NET POSITION, END OF YEAR -$

Condensed Statement of Revenues, Expenses, and Changes in Net Position

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

For financial reporting purposes, the District is considered a special-purpose government engaged only inbusiness-type activities as defined by GASB Statements No. 34 and No. 35 as amended by GASB StatementsNo. 37, No. 38, and No. 39. This presentation provides a comprehensive entity-wide perspective of the District'sassets, liabilities, activities, and cash flows and replaces the fund group perspective previously required.Accordingly, the District's financial statements have been presented using the economic resources measurementfocus and the accrual basis of accounting. The significant accounting policies followed by the District inpreparing these financial statements are in accordance with accounting principles generally accepted in the UnitedStates of America as prescribed by GASB. Additionally, the District's policies comply with the CaliforniaCommunity Colleges Chancellor's Office Budget and Accounting Manual. Under the accrual basis, revenues arerecognized when earned, and expenses are recorded when an obligation has been incurred. All material intra-agency and intra-fund transactions have been eliminated.

Revenues resulting from exchange transactions, in which each party gives and receives essentially equal value,are classified as operating revenues. These transactions are recorded on the accrual basis when the exchangetakes place. Available means that the resources will be collected within the current fiscal year or are expected tobe collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District,operating revenues consist primarily of student fees and auxiliary activities through the bookstore and cafeteria.

Nonexchange transactions, in which the District receives value without directly giving equal value in return,include State apportionments, property taxes, certain Federal and State grants, entitlements, and donations.Property tax revenue is recognized in the fiscal year received. State apportionment revenue is earned based uponcriteria set forth from the Community Colleges Chancellor's Office and includes reporting of full-time equivalentstudents (FTES) attendance. The corresponding apportionment revenue is recognized in the period the FTES aregenerated. Revenue from Federal and State grants and entitlements are recognized in the fiscal year in which alleligibility requirements have been satisfied. Eligibility requirements may include time and/or purposerequirements.



21

Operating expenses are costs incurred to provide instructional services including support costs, auxiliary services,and depreciation of capital assets. All other expenses not meeting this definition are reported as nonoperating.Expenses are recorded on the accrual basis as they are incurred, when goods are received, or services arerendered.

The District reports are based on all applicable GASB pronouncements, as well as applicable FinancialAccounting Standards Board (FASB) pronouncements issued on or before November 30, 1989, unless thosepronouncements conflict or contradict GASB pronouncements. The District has not elected to apply FASBpronouncements after that date.

The financial statements are presented in accordance with the reporting model as prescribed in GASB StatementNo. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments,and GASB Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for PublicColleges and Universities, as amended by GASB Statements No. 37, No. 38, and No. 39. The business-typeactivities model followed by the District requires the following components of the District's financial statements:

Management's Discussion and Analysis Basic Financial Statements for the District as a whole including:

o Statements of Net Position - Primary Governmento Statements of Revenues, Expenses, and Changes in Net Position - Primary Governmento Statements of Cash Flows - Primary Governmento Financial Statements for the Fiduciary Funds including:

o Statements of Fiduciary Net Positiono Statements of Changes in Fiduciary Net Position

Notes to the Financial Statements

Cash and Cash Equivalents

The District's cash and cash equivalents are considered to be unrestricted cash on hand, demand deposits, andshort-term unrestricted investments with original maturities of three months or less from the date of acquisition.Cash equivalents also include unrestricted cash with county treasury balances for purposes of the Statement ofCash Flows. Restricted cash and cash equivalents represent balances restricted by external sources such as grantsand contracts or specifically restricted for the repayment of capital debt.

Investments

In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments andExternal Investment Pools, investments held at June 30, 2016, are stated at fair value. Fair value is estimatedbased on quoted market prices at year-end. Short-term investments have an original maturity date greater thanthree months, but less than one year at time of purchase. Long-term investments have an original maturity ofgreater than one year at the time of purchase.



22

Restricted Assets

Restricted assets arise when restrictions on their use change the normal understanding of the availability of theasset. Such constraints are either imposed by creditors, contributors, grantors, or laws of other governments orimposed by enabling legislation. Restricted assets are classified on the Statement of Net Position because theiruse is limited by enabling legislation, applicable bond covenants, and other laws of other governments. Also,resources have been set aside to satisfy certain requirements of the bonded debt issuance and to fund certaincapital asset projects.

Accounts Receivable

Accounts receivable include amounts due from the Federal, State, and/or local governments or private sources, inconnection with reimbursement of allowable expenditures made pursuant to the District's grants and contracts.Accounts receivable also consist of tuition and fee charges to students and auxiliary enterprise services providedto students, faculty, and staff, the majority of each residing in the State of California. Management has analyzedthese accounts and believes all amounts are fully collectable.

Prepaid Expenses

Prepaid expenses represent payments made to vendors and others for services that will benefit periods beyondJune 30, 2016.

Inventories

Inventories consist primarily of bookstore merchandise and cafeteria food and supplies held for resale to thestudents and faculty of the colleges. Inventories are stated at cost, utilizing the weighted average method. Thecost is recorded as an expense as the inventory is consumed.

Capital Assets and Depreciation

Capital assets are long-lived assets of the District as a whole and include land, construction in progress, buildings,leasehold improvements, and equipment. The District maintains an initial unit cost capitalization threshold of$5,000 and an estimated useful life greater than one year. Assets are recorded at historical cost, or estimatedhistorical cost, when purchased or constructed. The District does not possess any infrastructure. Donated capitalassets are recorded at estimated fair market value at the date of donation. Improvements to buildings and land thatsignificantly increase the value or extend the useful life of the asset are capitalized; the costs of routinemaintenance and repairs that do not add to the value of the asset or materially extend an asset's life are charged asan operating expense in the year in which the expense was incurred. Major outlays for capital improvements arecapitalized as construction in progress as the projects are constructed.



23

Depreciation of capital assets is computed and recorded utilizing the straight-line method. Estimated useful livesof the various classes of depreciable capital assets are as follows: buildings, 25 to 50 years; improvements,20 years; equipment, 5 to 15 years; vehicles, 5 to 10 years.

Accrued Liabilities and Long-Term Obligations

All payables, accrued liabilities, and long-term obligations are reported in the entity-wide financial statements.

Debt Issuance Costs, Premiums, and Discounts

Debt premiums and discounts, as well as issuance costs related to prepaid insurance costs, are amortized over thelife of the bonds using the straight-line method.

Deferred Charge on Refunding

Deferred charge on refunding is amortized using the straight-line method over the remaining life of the new debt.

Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position also reports deferred outflows of resources. This separatefinancial statement element represents a consumption of net position that applies to a future period and so will notbe recognized as an expense or expenditure until then. The District reports deferred outflows of resources fordeferred charges on refunding of debt and for pension related items.

In addition to liabilities, the Statement of Net Position reports a separate section for deferred inflows of resources.This separate financial statement element represents an acquisition of net position that applies to a future periodand so will not be recognized as revenue until then. The District reports deferred inflows of resources for pensionrelated items.

Pensions

For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensionsand pension expense, information about the fiduciary net position of the California State Teachers' RetirementSystem (CalSTRS) and the California Public Employees' Retirement System (CalPERS) plan for schools(the Plans) and additions to/deductions from the Plans' fiduciary net position have been determined on the samebasis as they are reported by CalSTRS and CalPERS. For this purpose, benefit payments (including refunds ofemployee contributions) are recognized when due and payable in accordance with the benefit terms. Membercontributions are recognized in the period in which they are earned. Investments are reported at fair value.



24

Compensated Absences

Accumulated unpaid employee vacation benefits are accrued as a liability as the benefits are earned. The entirecompensated absence liability is reported on the entity-wide financial statements. The current portion of unpaidcompensated absences is recognized upon the occurrence of relevant events such as employee resignation andretirements that occur prior to year end that have not yet been paid within the fund from which the employeeswho have accumulated the leave are paid. The District also participates in "load banking" with eligible academicemployees whereby the employee may teach extra courses in one period in exchange for time off in anotherperiod. The liability for this benefit is reported on the entity-wide financial statements.

Sick leave is accumulated without limit for each employee based upon negotiated contracts. Leave with pay isprovided when employees are absent for health reasons; however, the employees do not gain a vested right toaccumulated sick leave. Employees are never paid for any sick leave balance at termination of employment orany other time. Therefore, the value of accumulated sick leave is not recognized as a liability in the District'sfinancial statements. However, retirement credit for unused sick leave is applicable to all classified members whoretire after January 1, 1999. At retirement, each member will receive .004 year of service credit for each day ofunused sick leave. Retirement credit for unused sick leave is applicable to all academic employees and isdetermined by dividing the number of unused sick days by the number of base service days required to completethe last school year, if employed full time.

Unearned Revenue

Unearned revenue arises when potential revenue does not meet both the "measurable" and "available" criteria forrecognition in the current period or when resources are received by the District prior to the incurrence ofqualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when theDistrict has a legal claim to the resources, the liability for unearned revenue is removed from the combinedbalance sheet and revenue is recognized. Unearned revenue includes (1) amounts received for tuition and feesprior to the end of the fiscal year that are related to the subsequent fiscal year and (2) amounts received fromFederal and State grants received before the eligibility requirements are met.

Noncurrent Liabilities

Noncurrent liabilities include bonds and notes payable, compensated absences, capital lease obligations, earlyretirement, load banking, OPEB obligations, and net pension obligation with maturities greater than one year.

Net Position

GASB Statements No. 34 and No. 35 report equity as "Net Position" and represent the difference between assetsand liabilities. The net position is classified according to imposed restrictions or availability of assets forsatisfaction of District obligations according to the following net asset categories:

Net Investment in Capital Assets consists of capital assets, net of accumulated depreciation and outstandingprincipal balances of debt attributable to the acquisition, construction, or improvement of those assets. To theextent debt has been incurred, but not yet expended for capital assets, such accounts are not included as acomponent of net investment in capital assets.



25

Restricted: Net position is reported as restricted when there are limitations imposed on their use, eitherthrough enabling legislation adopted by the District, or through external restrictions imposed by creditors,grantors, or laws or regulations of other governments. The District first applies restricted resources when anexpense is incurred for purposes for which both restricted and unrestricted resources are available.

Unrestricted: Net position that is not subject to externally imposed constraints. Unrestricted net positionmay be designated for specific purposes by action of the Board of Trustees or may otherwise be limited bycontractual agreements with outside parties.

When both restricted and unrestricted resources are available for use, it is the District's practice to use restrictedresources first and the unrestricted resources when they are needed. The entity-wide financial statements report$13,586,260 of restricted net position.

State Apportionments

Certain current year apportionments from the State are based on financial and statistical information of theprevious year. Any corrections due to the recalculation of the apportionment are made in February of thesubsequent year. When known and measurable, these recalculations and corrections are accrued in the year inwhich the FTES are generated.

Property Taxes

Secured property taxes attach as an enforceable lien on property as of January 1. The County Assessor isresponsible for assessment of all taxable real property. Taxes are payable in two installments on November 1 andFebruary 1 and become delinquent on December 10 and April 10, respectively. Unsecured property taxes arepayable in one installment on or before August 31. The County of Los Angeles bills and collects the taxes onbehalf of the District. Local property tax revenues are recorded when received.

The voters of the District passed a General Obligation Bond in March 2002 for the acquisition, construction, andremodeling of certain District property. As a result of the passage of the bond, property taxes are assessed on theproperty within the District specifically for the repayment of the debt incurred. The taxes are assessed, billed, andcollected as noted above and remitted to the District when collected.

Scholarships, Discounts, and Allowances

Student tuition and fee revenue is reported net of scholarships, discounts, and allowances. Fee waivers approvedby the Board of Governors are included within the scholarships, discounts, and allowances in the Statement ofRevenues, Expenses, and Changes in Net Position. Scholarship discounts and allowances represent the differencebetween stated charges for enrollment fees and the amount that is paid by students or third parties makingpayments on the students' behalf.



26

Federal Financial Assistance Programs

The District participates in federally funded Pell Grants, SEOG Grants, and Federal Work-Study programs, as well asother programs funded by the Federal government. Financial aid to students is either reported as operating expensesor scholarship allowances, which reduce revenues. The amount reported as operating expense represents the portionof aid that was provided to the student in the form of cash. Scholarship allowances represent the portion of aidprovided to students in the form of reduced tuition. These programs are audited in accordance with Title 2 U.S. Codeof Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards.

Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in theUnited States of America requires management to make estimates and assumptions that affect the amountsreported in the financial statements and accompanying notes. Actual results may differ from those estimates.

Interfund Activity

Interfund transfers and interfund receivables and payables for governmental activities are eliminated during theconsolidation process in the Primary Government and Fiduciary Funds' financial statements, respectively.

Change in Accounting Principles

In February 2015, the GASB issued Statement No. 72, Fair Value Measurement and Application. This Statementaddresses accounting and financial reporting issues related to fair value measurements. The definition of fairvalue is the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants at the measurement date. This Statement provides guidance for determining a fairvalue measurement for financial reporting purposes. This Statement also provides guidance for applying fairvalue to certain investments and disclosures related to all fair value measurements.

The District has implemented the provisions of this Statement as of June 30, 2016.

In June 2015, the GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions and RelatedAssets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASBStatements 67 and 68. The objective of this Statement is to improve the usefulness of information about pensionsincluded in the general purpose external financial reports of State and local governments for making decisions andassessing accountability. This Statement results from a comprehensive review of the effectiveness of existingstandards of accounting and financial reporting for all postemployment benefits with regard to providingdecision-useful information, supporting assessments of accountability and inter-period equity, and creatingadditional transparency.



27

This Statement establishes requirements for defined benefit pensions that are not within the scope of StatementNo. 68, Accounting and Financial Reporting for Pensions—an amendment to GASB Statement No. 27, as well asfor the assets accumulated for purposes of providing those pensions. In addition, it establishes requirements fordefined contribution pensions that are not within the scope of GASB Statement No. 68. It also amends certainprovisions of GASB Statement No. 67, Financial Reporting for Pension Plans—an amendment toGASB Statement No. 25, and GASB Statement No. 68 for pension plans and pensions that are within theirrespective scopes.

The provisions in this Statement, effective as of June 30, 2016, include the provisions for assets accumulated forpurposes of providing pensions through defined benefit plans and the amended provisions of GASB StatementsNo. 67 and No. 68. The District has implemented these provisions as of June 30, 2016. The provisions in thisStatement related to defined benefit pensions that are not within the scope of GASB Statement No. 68 areeffective for periods beginning after June 15, 2016.

In June 2015, the GASB issued Statement No. 76, The Hierarchy of Generally Accepted Accounting Principlesfor State and Local Governments. The objective of this Statement is to identify—in the context of the currentgovernmental financial reporting environment—the hierarchy of generally accepted accounting principles(GAAP). The "GAAP hierarchy" consists of the sources of accounting principles used to prepare financialstatements of State and local governmental entities in conformity with GAAP and the framework for selectingthose principles. This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP andaddresses the use of authoritative and non-authoritative literature in the event that the accounting treatment for atransaction or other event is not specified within a source of authoritative GAAP.

This Statement supersedes GASB Statement No. 55, The Hierarchy of Generally Accepted Accounting Principlesfor State and Local Governments.


In December 2015, the GASB issued Statement No. 79, Certain External Investment Pools and Pool Participants.This Statement addresses accounting and financial reporting for certain external investment pools and poolparticipants. Specifically, it establishes criteria for an external investment pool to qualify for making the electionto measure all of its investments at amortized cost for financial reporting purposes. An external investment poolqualifies for that reporting if it meets all of the applicable criteria established in this Statement. The specificcriteria address (1) how the external investment pool transacts with participants; (2) requirements for portfoliomaturity, quality, diversification, and liquidity; and (3) calculation and requirements of a shadow price.Significant noncompliance prevents the external investment pool from measuring all of its investments atamortized cost for financial reporting purposes. Professional judgment is required to determine if instances ofnoncompliance with the criteria established by this Statement during the reporting period, individually or in theaggregate, were significant.

If an external investment pool does not meet the criteria established by this Statement, that pool should apply theprovisions in paragraph 16 of GASB Statement No. 31, Accounting and Financial Reporting for CertainInvestments and for External Investment Pools, as amended. If an external investment pool meets the criteria inthis Statement and measures all of its investments at amortized cost, the pool's participants also should measuretheir investments in that external investment pool at amortized cost for financial reporting purposes. If anexternal investment pool does not meet the criteria in this Statement, the pool's participants should measure theirinvestments in that pool at fair value, as provided in paragraph 11 of GASB Statement No. 31, as amended.



28

This Statement establishes additional note disclosure requirements for qualifying external investment pools thatmeasure all of their investments at amortized cost for financial reporting purposes and for governments thatparticipate in those pools. Those disclosures, for both the qualifying external investment pools and theirparticipants, include information about any limitations or restrictions on participant withdrawals.


New Accounting Pronouncements

In June 2015, the GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans OtherThan Pension Plans. The objective of this Statement is to improve the usefulness of information aboutpostemployment benefits other than pensions (other postemployment benefits or OPEB) included in the generalpurpose external financial reports of State and local governmental OPEB plans for making decisions andassessing accountability. This Statement results from a comprehensive review of the effectiveness of existingstandards of accounting and financial reporting for all postemployment benefits (pensions and OPEB) with regardto providing decision-useful information, supporting assessments of accountability and inter-period equity, andcreating additional transparency.

This Statement replaces GASB Statements No. 43, Financial Reporting for Postemployment Benefit Plans OtherThan Pension Plans, as amended, and No. 57, OPEB Measurements by Agent Employers and AgentMultiple-Employer Plans. It also includes requirements for defined contribution OPEB plans that replace therequirements for those OPEB plans in GASB Statements No. 25, Financial Reporting for Defined Benefit PensionPlans and Note Disclosures for Defined Contribution Plans, as amended, No. 43, and No. 50, PensionDisclosures.

The requirements of this Statement are effective for financial statements for periods beginning after June 15, 2016.Early implementation is encouraged.

In June 2015, the GASB issued Statement No. 75, Accounting and Financial Reporting for PostemploymentBenefits Other Than Pension. The primary objective of this Statement is to improve accounting and financialreporting by State and local governments for postemployment benefits other than pensions (other postemploymentbenefits or OPEB). It also improves information provided by State and local governmental employers aboutfinancial support for OPEB that is provided by other entities. This Statement results from a comprehensivereview of the effectiveness of existing standards of accounting and financial reporting for all postemploymentbenefits (pensions and OPEB) with regard to providing decision-useful information, supporting assessments ofaccountability and inter-period equity, and creating additional transparency.

This Statement replaces the requirements of GASB Statements No. 45, Accounting and Financial Reporting byEmployers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB Measurements byAgent Employers and Agent Multiple-Employer Plans, for OPEB. GASB Statement No. 74, Financial Reportingfor Postemployment Benefit Plans Other Than Pension Plans, establishes new accounting and financial reportingrequirements for OPEB plans.

The requirements of this Statement are effective for financial statements for periods beginning after June 30, 2017.Early implementation is encouraged.



29

In August 2015, the GASB issued Statement No. 77, Tax Abatement Disclosures. This Statement requiresgovernments that enter into tax abatement agreements to disclose the following information about the agreements:

Brief descriptive information, such as the tax being abated, the authority under which tax abatements areprovided, eligibility criteria, the mechanism by which taxes are abated, provisions for recapturing abatedtaxes, and the types of commitments made by tax abatement recipients

The gross dollar amount of taxes abated during the period Commitments made by a government, other than to abate taxes, as part of a tax abatement agreement

The requirements of this Statement are effective for financial statements for periods beginning afterDecember 15, 2015. Early implementation is encouraged.

In December 2015, the GASB issued Statement No. 78, Pensions Provided through Certain Multiple-EmployerDefined Benefit Pension Plans. The objective of this Statement is to address a practice issue regarding the scopeand applicability of GASB Statement No. 68, Accounting and Financial Reporting for Pensions—an amendmentto GASB Statement No. 27. This issue is associated with pensions provided through certain multiple-employerdefined benefit pension plans and to State or local governmental employers whose employees are provided withsuch pensions.

Prior to the issuance of this Statement, the requirements of GASB Statement No. 68 applied to the financialstatements of all State and local governmental employers whose employees are provided with pensions throughpension plans that are administered through trusts that meet the criteria in paragraph 4 of that Statement.

This Statement amends the scope and applicability of GASB Statement No. 68 to exclude pensions provided toemployees of State or local governmental employers through a cost-sharing multiple-employer defined benefitpension plan that (1) is not a State or local governmental pension plan; (2) is used to provide defined benefitpensions both to employees of State or local governmental employers and to employees of employers that are notState or local governmental employers; and (3) has no predominant State or local governmental employer(either individually or collectively with other State or local governmental employers that provide pensionsthrough the pension plan). This Statement establishes requirements for recognition and measurement of pensionexpense, expenditures, and liabilities; note disclosures; and required supplementary information for pensions thathave the characteristics described above.

The requirements of this Statement are effective for reporting periods beginning after December 15, 2015. Earlyimplementation is encouraged.

In January 2016, the GASB issued Statement No. 80, Blending Requirements for Certain Component Units—anamendment to GASB Statement No. 14. The objective of this Statement is to improve financial reporting byclarifying the financial statement presentation requirements for certain component units. This Statement amendsthe blending requirements established in paragraph 53 of GASB Statement No. 14, The Financial ReportingEntity. The additional criterion requires blending of a component unit incorporated as a not-for-profit corporationin which the primary government is the sole corporate member. The additional criterion does not apply tocomponent units included in the financial reporting entity pursuant to the provisions of GASB StatementNo. 39, Determining Whether Certain Organizations Are Component Units—an amendment to GASB StatementNo. 14.



30

The requirements of this Statement are effective for reporting periods beginning after June 15, 2016. Earlyimplementation is encouraged.

In March 2016, the GASB issued Statement No. 81, Irrevocable Split-Interest Agreements. The objective of thisStatement is to improve accounting and financial reporting for irrevocable split-interest agreements by providingrecognition and measurement guidance for situations in which a government is a beneficiary of the agreement.

This Statement requires that a government that receives resources pursuant to an irrevocable split-interestagreement recognize assets, liabilities, and deferred inflows of resources at the inception of the agreement.Furthermore, this Statement requires that a government recognize assets representing its beneficial interests inirrevocable split-interest agreements that are administered by a third party, if the government controls the presentservice capacity of the beneficial interests. This Statement requires that a government recognize revenue whenthe resources become applicable to the reporting period.

The requirements of this Statement are effective for financial statements for periods beginning afterDecember 15, 2016, and should be applied retroactively. Early implementation is encouraged.

In March 2016, the GASB issued Statement No. 82, Pension Issues—an amendment of GASB Statements No. 67,No. 68, and No. 73. The objective of this Statement is to address certain issues that have been raised with respectto GASB Statement No. 67, Financial Reporting for Pension Plans—an amendment to GASB Statement No. 25,GASB Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment to GASB StatementNo. 27, and GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets ThatAre Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67and 68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll-related measures inrequired supplementary information; (2) the selection of assumptions and the treatment of deviations from theguidance in an Actuarial Standard of Practice for financial reporting purposes; and (3) the classification ofpayments made by employers to satisfy employee (plan member) contribution requirements.

The requirements of this Statement are effective for reporting periods beginning after June 15, 2016, except forthe requirements of this Statement for the selection of assumptions in a circumstance in which an employer'spension liability is measured as of a date other than the employer's most recent fiscal year end. In thatcircumstance, the requirements for the selection of assumptions are effective for that employer in the firstreporting period in which the measurement date of the pension liability is on or after June 15, 2017. Earlyimplementation is encouraged.



31

NOTE 3 - DEPOSITS AND INVESTMENTS

Policies and Practices

The District is authorized under California Government Code to make direct investments in local agency bonds,notes, or warrants within the State; U.S. Treasury instruments; registered State warrants or treasury notes;securities of the U.S. Government, or its agencies; bankers acceptances; commercial paper; certificates of depositplaced with commercial banks and/or savings and loan companies; repurchase or reverse repurchase agreements;medium-term corporate notes; shares of beneficial interest issued by diversified management companies,certificates of participation, obligations with first priority security; and collateralized mortgage obligations.

Investment in County Treasury - The District is considered to be an involuntary participant in an externalinvestment pool as the District is required to deposit all receipts and collections of monies with their CountyTreasurer (Education Code Section (ECS) 41001). The fair value of the District's investment in the pool isreported in the accompanying financial statements at amounts based upon the District's pro-rata share of the fairvalue provided by the County Treasurer for the entire portfolio (in relation to the amortized cost of that portfolio).The balance available for withdrawal is based on the accounting records maintained by the County Treasurer,which is recorded on the amortized cost basis.

General Authorizations

Limitations as they relate to interest rate risk, credit risk, and concentration of credit risk are indicated in theschedules below:

Maximum Maximum Maximum

Authorized Remaining Percentage Investment

Investment Type Maturity of Portfolio in One Issuer

Local Agency Bonds, Notes, Warrants 5 years None None

Registered State Bonds, Notes, Warrants 5 years None None

U.S. Treasury Obligations 5 years None None

U.S. Agency Securities 5 years None None

Banker's Acceptance 180 days 40% 30%

Commercial Paper 270 days 25% 10%

Negotiable Certificates of Deposit 5 years 30% None

Repurchase Agreements 1 year None None

Reverse Repurchase Agreements 92 days 20% of base None

Medium-Term Corporate Notes 5 years 30% None

Mutual Funds N/A 20% 10%

Money Market Mutual Funds N/A 20% 10%

Mortgage Pass-Through Securities 5 years 20% None

County Pooled Investment Funds N/A None None

Local Agency Investment Fund (LAIF) N/A None None

Joint Powers Authority Pools N/A None None



32

Authorized Under Debt Agreements

Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements rather thanthe general provisions of the California Government Code. These provisions allow for the acquisition ofinvestment agreements with maturities of up to 30 years.

Summary of Deposits and Investments

Deposits and investments as of June 30, 2016, consisted of the following:

Primary Government

Cash on hand and in banks 113,113$

Cash in revolving 31,000

Investments 45,318,718Total Deposits and Investments 45,462,831$

Fiduciary Funds

Cash on hand and in banks 1,519,393$

Cash in revolving 7,500

Investments 3,854,091Total Deposits and Investments 5,380,984$

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of aninvestment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value tochanges in market interest rates. The District does not have a formal investment policy that limits investmentmaturities as a means of managing its exposure to fair value losses arising from increasing interest rates. TheDistrict manages its exposure to interest rate risk by investing in U.S. Treasury cash reserves, certificates ofdeposits, and the Los Angeles County Investment Pool. The District maintains an investment of $45,318,718with the Los Angeles County Investment Pool with a weighted maturity of 608 days. In addition, the District alsohas an investment of $3,854,091 in various money market accounts and certificates of deposits with variousbanks.

Credit Risk

Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.This is measured by the assignment of a rating by a nationally recognized statistical rating organization. TheDistrict's investment in the Los Angeles County Investment Pool is not required to be rated, nor has it been rated,as of June 30, 2016. The various money market accounts and certificates of deposits are also not rated.



33

Custodial Credit Risk - Deposits

This is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The Districtdoes not have a policy for custodial credit risk for deposits. However, the California Government Code requiresthat a financial institution secure deposits made by State or local governmental units by pledging securities in anundivided collateral pool held by a depository regulated under State law (unless so waived by the governmentalunit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the totalamount deposited by the public agencies. California law also allows financial institutions to secure publicdeposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public depositsand letters of credit issued by the Federal Home Loan Bank of San Francisco having a value of 105 percent of thesecured deposits. As of June 30, 2016, the District had $3,137,842 exposed to custodial credit risk because it wasuninsured but collateralized with securities held by the pledging financial institution's trust department or agent,but not in the name of the District.

NOTE 4 - FAIR VALUE MEASUREMENTS

The District categorizes the fair value measurements of its investments based on the hierarchy established bygenerally accepted accounting principles. The fair value hierarchy, which has three levels, is based on thevaluation inputs used to measure an asset's fair value. The following provides a summary of the hierarchy used tomeasure fair value:

Level 1 - Quoted prices in active markets for identical assets that the District has the ability to access at themeasurement date. Level 1 assets may include debt and equity securities that are traded in an active exchangemarket and that are highly liquid and are actively traded in over-the-counter markets.

Level 2 - Observable inputs, other than Level 1 prices, such as quoted prices for similar assets in activemarkets, quoted prices for identical or similar assets in markets that are not active, or other inputs that areobservable, such as interest rates and curves observable at commonly quoted intervals, implied volatilities,and credit spreads. For financial reporting purposes, if an asset has a specified term, a Level 2 input isrequired to be observable for substantially the full term of the asset.

Level 3 - Unobservable inputs should be developed using the best information available under thecircumstances, which might include the District's own data. The District should adjust that data if reasonablyavailable information indicates that other market participants would use different data or certaincircumstances specific to the District are not available to other market participants.

Uncategorized - Investments in the Los Angeles County Investment Pool are not measured using the input levelsabove because the District's transactions are based on a stable net asset value per share. All contributions andredemptions are transacted at $1.00 net asset value per share.



34

The District's fair value measurements are as follows at June 30, 2016:

Level 1

Investment Type Fair Value Inputs Uncategorized

Certificates of Deposits and Money Market Accounts 3,854,091$ 3,854,091$ -$

Los Angeles County Investment Pool 45,371,662 - 45,371,662Total 49,225,753$ 3,854,091$ 45,371,662$

All assets have been valued using a market approach, with quoted market prices.

NOTE 5 - ACCOUNTS RECEIVABLE

Accounts receivable for the District consisted primarily of intergovernmental grants, entitlements, interest, andother local sources. All receivables are considered collectable in full.

Primary

Government

Federal Government

Categorical aid 1,828,284$

State Government

Categorical aid 2,519,253

Lottery 1,545,549

JPA 600,300

Other State sources 22,076

Local Sources

Other local sources 181,711

Total 6,697,173$

Student Loans Receivable 4,883,525$

Fiduciary Funds

Other Local Sources 30,836$

Student Loans Receivable 127,965$

NOTE 6 - PREPAID EXPENSES

Payments made to vendors for goods or services benefit periods beyond June 30, 2016 amounted to $147,939.These payments consisted of health and welfare and debt service expenses.



35

NOTE 7 - CAPITAL ASSETS

Capital asset activity for the District for the fiscal year ended June 30, 2016, was as follows:

Balance Balance

July 1, 2015 Additions Deductions June 30, 2016

Capital Assets Not Being Depreciated

Land 18,262,747$ -$ -$ 18,262,747$

Construction in progress 30,887,231 12,584,432 - 43,471,663

Total Capital Assets Not Being Depreciated 49,149,978 12,584,432 - 61,734,410

Capital Assets Being Depreciated

Buildings and improvements 99,041,714 2,743,908 - 101,785,622

Site improvements 38,138,534 - - 38,138,534

Vehicles, machinery and equipment 20,015,803 3,938,236 - 23,954,039

Total Capital Assets Being Depreciated 157,196,051 6,682,144 - 163,878,195

Total Capital Assets 206,346,029 19,266,576 - 225,612,605

Less Accumulated Depreciation

Site improvements 27,349,801 1,936,407 - 29,286,208

Buildings and improvements 15,627,403 2,044,257 - 17,671,660

Vehicles, machinery and equipment 13,245,060 1,644,363 - 14,889,423

Total Accumulated Depreciation 56,222,264 5,625,027 - 61,847,291

150,123,765$ 13,641,549$ -$ 163,765,314$

Depreciation expense for the year was $5,625,027.

Interest expense on capital related debt for the year ended June 30, 2016, was $3,127,019. Of this amount,$1,016,269 was capitalized.



36

NOTE 8 - ACCOUNTS PAYABLE

Accounts payable for the District consisted of the following:

Primary

Accrued payroll and benefits 7,403,829$

Construction 217,197

JPA parking fees 1,146,990

Student aid disbursements 352,828

Apportionment 1,953,309

Other 2,503,405Total 13,577,558$

Government

NOTE 9 - UNEARNED REVENUE

Unearned revenue for the District consisted of the following:

Primary

Government

Federal financial assistance 20,790$

State categorical aid 1,916,758

Student fees 4,673,126

Scheduled Maintenance 481,027

Other local 122,430Total 7,214,131$

NOTE 10 - INTERFUND TRANSACTIONS

Interfund Receivables and Payables (Due To/Due From)

Interfund receivable and payable balances arise from interfund transactions and are recorded by all funds affectedin the period in which transactions are executed. Interfund activity within the governmental funds and fiduciaryfunds has been eliminated respectively in the consolidation process of the basic financial statements. Balancesowing between the primary government and the fiduciary funds are not eliminated in the consolidation process.As of June 30, 2016, there were no amounts owed between the primary government and the fiduciary funds.



37

Interfund Operating Transfers

Operating transfers between funds of the District are used to (1) move revenues from the fund that statute orbudget requires to collect them to the fund that statute or budget requires to expend them, (2) move receiptsrestricted to debt service from the funds collecting the receipts to the debt service fund as debt service paymentsbecome due, and (3) use restricted revenues collected in the General Fund to finance various programs accountedfor in other funds in accordance with budgetary authorizations. Operating transfers within the funds of theDistrict have been eliminated in the consolidation process. Transfers between the primary government and thefiduciary funds are not eliminated in the consolidation process. During the 2016 fiscal year, there were notransfers between the primary government and the fiduciary funds.



38

NOTE 11 - LONG-TERM OBLIGATIONS

Summary

The changes in the District's long-term obligations during the 2016 fiscal year consisted of the following:

Balance Adjustments Adjustments Balance Due in

July 1, 2015 Additions Deductions June 30, 2016 One Year

Bonds and Notes Payable

General obligation bonds, 2003 Series B and C 15,541,711$ 816,770$ 1,135,000$ 15,223,481$ 1,205,000$

General obligation refunding bonds, 2005 Series A 6,843,025 254,741 2,435,000 4,662,766 2,435,000

Unamortized premium 628,791 - 209,597 419,194 -

General obligation bonds, 2006 Series D 1,975,000 - 960,000 1,015,000 1,015,000


General obligation bonds, 2011 Series E 4,242,066 33,978 185,000 4,091,044 190,000


General obligation bonds, 2013, Series F 13,995,000 - - 13,995,000 -

Unamortized premium 1,149,466 - 73,762 1,075,704 -

2014 General obligation Refunding Bond 25,980,000 - - 25,980,000 120,000

Unamortized premium 4,170,849 - 275,001 3,895,848 -

Certificates of participation - 1997 430,000 - 430,000 - -

Certificates of participation - 2007 2,575,000 - 170,000 2,405,000 175,000

Total Bonds and Notes

Payable 78,490,559 1,105,489 6,422,495 73,173,553 5,140,000

Other Liabilities

Capital Lease 44,771 1,903,212 547,281 1,400,702 449,746

Compensated absences 3,433,154 - 41,533 3,391,621 -

Early retirement incentive 424,512 - 424,512 - -

Load banking 2,155,962 301,623 - 2,457,585 -

Other postemployment benefits (OPEB) 6,821,914 2,479,490 2,253,093 7,048,311 -

Aggregate net pension obligation 70,111,751 10,594,649 - 80,706,400 -

Total Other Liabilities 82,992,064 15,278,974 3,266,419 95,004,619 449,746

Total Long-Term Obligations 161,482,623$ 16,384,463$ 9,688,914$ 168,178,172$ 5,589,746$

Balance Balance Due in

July 1, 2015 Additions Deductions June 30, 2016 One Year

Aggregate net pension obligation -$ 380,645$ -$ 380,645$ -$

Fiduciary Funds

Primary Government



39

Description of Debt

Payments on the general obligation bonds are to be made by the bond interest and redemption fund with localproperty tax collections. Payments for the certificates of participation are made by the other debt service fund.The compensated absences, early retirement and net pension obligation will be paid by the fund for which theemployee worked. The District's General Fund makes payments for the capital leases, load banking, andpostemployment benefits.

Bonded Debt

2002 General Obligation Bonds, 2013 Series F

During January 2013, the District issued the sixth and final series of general obligation bonds authorized by alocal election in March 2002. At June 30, 2016, $13,995,000 had been issued, the outstanding principal balancewas $13,995,000, and the unamortized premium balance was $1,075,704. The bonds mature beginning onAugust 1, 2018 through August 1, 2031, with an interest rate ranging from 3.0 percent to 5.0 percent.

2003 General Obligation Bonds, Series B and C

During July 2003, the District issued the 2003 General Obligation Bonds in the amount of $17,499,930. Thebonds included $5,000,000 of current interest bonds and $12,499,930 of Capital Appreciation bonds. The CapitalAppreciation bonds have a maturing principal balance of $15,670,000. The bonds mature beginning onAugust 1, 2006 through August 1, 2028, with an interest rate at four percent. At June 30, 2016, the principalbalance outstanding (including accreted interest to date) was $15,223,481.

2005 General Obligation Refunding Bonds

During October 2005, the District issued the 2005 General Obligation Refunding Bonds in the amount of$16,951,097. The bonds issued included $14,575,000 of current interest bonds and $2,376,097 of CapitalAppreciation bonds. The capital appreciation bonds have a maturing principal balance of $7,310,000. The bondsmature beginning on October 1, 2008 through October 1, 2017, with interest rates ranging from 3.50 percent to4.0 percent. At June 30, 2016, the principal balance outstanding (including accreted interest to date) was$4,662,766 and unamortized premium of $419,194. The premium is amortized over the life of the bonds as acomponent of interest expense on the bonds.

2006 General Obligation Bonds, Series D

During October 2006, the District issued the 2006 General Obligation Bonds, Series D in the amount of$34,500,000. The bonds mature beginning on November 1, 2007 through November 1, 2016, with interest ratesranging from 4.0 percent to 5.0 percent. As a result of the issuance of the 2014 General Obligation Refundingbonds, a partial refunding of $27,800,000 was advanced refunded for these bonds. As of June 30, 2016, theprincipal balance outstanding was $1,015,000 and the unamortized premium was $263,835.



40

2011 General Obligation Bonds, Series E

During April 2011, the District issued the 2011 General Obligation Bonds, Series E in the amount of $5,001,453.The bonds mature beginning on August 1, 2013 through August 1, 2030, with interest yields ranging from2.12 percent to 4.20 percent. The bonds issued included $3,735,000 of current interest bonds and $1,266,453 ofcapital appreciation bonds with the value of the capital appreciation bonds maturing to a principal balance of$1,705,000. At June 30, 2016, the principal balance outstanding was $4,091,044 and unamortized premium of$146,681.

2014 General Obligation Refunding Bonds

On June 26, 2014, the District issued the 2014 General Refunding Bonds in the amount of $26,660,000. Thebonds mature beginning on August 1, 2014 through August 1, 2031, with interest rates ranging from 1.0 percentto 5.0 percent.

Proceeds from the bonds were used to advance refund a portion of the District's 2006 General Obligation Bonds,Series D. The refunding of debt resulted in an economic gain (difference between the present value of the debtservice on the old and the new certificates) of approximately $1,640,000. The advance refunding met therequirements of an in-substance defeasance and the associated liability of $27,800,000 was removed from theDistrict's financial statements. An Escrow Fund was established to fund the continued payment of the principaland interest as it becomes due. As of June 30, 2016, the balance in the escrow account amounted to $28,408,391.The refunding resulted in a deferred charge on refunding which amounted to $422,067 at June 30, 2016.

At June 30, 2016, the principal outstanding on the 2014 General Obligation Refunding Bonds, was $25,980,000and unamortized premium of $3,895,848.

The outstanding general obligation bonded debt is as follows:

Bonds Accreted Bonds

Issue Maturity Interest Original Outstanding Interest Outstanding

Date Date Rate Issue July 1, 2015 Addition Redeemed June 30, 2016

2003 08/1/28 4.0% 17,499,930$ 15,541,711$ 816,770$ 1,135,000$ 15,223,481$

2005 10/1/17 3.50% - 4.0% 16,951,097 6,843,025 254,741 2,435,000 4,662,766

2006 11/1/16 4.0% - 5.0% 34,500,000 1,975,000 - 960,000 1,015,000

2011 8/1/30 2.12% - 4.2% 5,001,453 4,242,066 33,978 185,000 4,091,044

2013 8/1/31 3.0% - 5.0% 13,995,000 13,995,000 - - 13,995,000

2014 8/1/31 1% - 5.0% 26,660,000 25,980,000 - - 25,980,00068,576,802$ 1,105,489$ 4,715,000$ 64,967,291$



41

The general obligation bonds 2003 Series B and C mature through 2029 as follows:

Principal

(Including Accreted Accreted

Fiscal Year Interest to Date) Interest Total

2017 1,176,068$ 28,932$ 1,205,000$

2018 1,169,692 90,308 1,260,000

2019 1,145,652 154,348 1,300,000

2020 1,152,259 227,741 1,380,000

2021 1,144,867 305,133 1,450,000

2022-2026 5,799,096 2,603,241 8,402,337

2027-2029 3,635,847 2,897,233 6,533,080Total 15,223,481$ 6,306,936$ 21,530,417$

The general obligation refunding bonds 2005 Series A mature through 2018 as follows:

Principal

(Including Accreted Accreted

Fiscal Year Interest to Date) Interest Total

2017 2,382,000$ 53,000$ 2,435,000$

2018 2,280,766 159,234 2,440,000Total 4,662,766$ 212,234$ 4,875,000$

The general obligation bonds 2006 Series D mature through 2017 as follows:

Interest to

Fiscal Year Principal Maturity Total2017 1,015,000$ 25,375$ 1,040,375$

The general obligation bonds 2011 Series E mature through 2031 as follows:

Accreted Interest to

Fiscal Year Principal Interest Maturity Total

2017 182,691$ 7,309$ 175,600$ 365,600$

2018 173,353 21,647 175,600 370,600

2019 200,000 - 171,600 371,600

2020 210,000 - 163,400 373,400

2021 220,000 - 154,800 374,800

2022-2026 1,320,000 - 613,825 1,933,825

2027-2031 1,785,000 - 234,125 2,019,125Total 4,091,044$ 28,956$ 1,688,950$ 5,808,950$



42

The general obligation bonds 2002 Series F mature through 2032 as follows:

Interest to

Fiscal Year Principal Maturity Total

2017 -$ 515,775$ 515,775$

2018 - 515,775 515,775

2019 770,000 500,375 1,270,375

2020 800,000 468,975 1,268,975

2021 830,000 436,375 1,266,375

2022-2026 4,690,000 1,635,625 6,325,625

2027-2031 5,660,000 652,828 6,312,828

2032 1,245,000 19,453 1,264,453Total 13,995,000$ 4,745,181$ 18,740,181$

The general obligation bonds 2014 refunding bond mature through 2032 as follows:

Interest to

Fiscal Year Principal Maturity Total

2017 120,000$ 1,244,550$ 1,364,550$

2018 1,145,000 1,220,450 2,365,450

2019 1,200,000 1,173,550 2,373,550

2020 1,250,000 1,124,550 2,374,550

2021 1,285,000 1,067,425 2,352,425

2022-2026 7,825,000 4,248,125 12,073,125

2027-2031 10,625,000 2,016,525 12,641,525

2032 2,530,000 63,250 2,593,250Total 25,980,000$ 12,158,425$ 38,138,425$

Certificates of Participation

In July 1997, the Los Angeles County Schools Regionalized Business Services Corporation issued certificates ofparticipation in the amount of $4,905,000 to fund various capital improvement projects throughout the District.During the 2016 fiscal year the certificates were paid off in full.

In June 2007, the Los Angeles County Schools Regionalized Business Services Corporation issued certificates ofparticipation in the amount of $3,730,000 to finance additional improvements to a parking facility that serves theadministrators, faculty, and students of Glendale Community College. The certificates mature through 2027 withinterest rates ranging from 3.800 percent to 4.375 percent. At June 30, 2016, the principal balance outstandingwas $2,405,000.



43

2007 Certificates of Participation

The certificates mature through 2027 as follows:

Year Ending

June 30, Principal Interest Total

2017 175,000$ 105,015$ 280,015$

2018 185,000 98,015 283,015

2019 190,000 90,430 280,430

2020 200,000 82,450 282,450

2021 205,000 73,950 278,950

2022-2026 1,180,000 224,732 1,404,732

2027 270,000 12,150 282,150Total 2,405,000$ 686,742$ 3,091,742$

Capital Leases

The District has utilized capital lease purchase agreements to primarily purchase equipment. The liability onlease agreements with options to purchase is summarized below:

Total

Balance, July 1, 2015 45,087$

Additions 2,010,040

Payments (547,597)Balance, June 30, 2016 1,507,530$

The capital leases have minimum lease payments as follows:

Year Ending Lease

June 30, Payment

2017 502,510$

2018 502,510

2019 502,510

Total 1,507,530

Less: Amount Representing Interest 106,828

Present Value of Minimum Lease Payments 1,400,702$

Compensated Absences

At June 30, 2016, the liability for compensated absences was $3,391,621.



44

Early Retirement Incentive

The District has entered into various agreements including a Supplementary Retirement Plan (SRP) to providecertain benefits to employees participating in the early retirement incentive program. The District paid off theSRP during the 2016 fiscal year.

Load Banking

At June 30, 2016, the liability for load banking was $2,457,585.

Other Postemployment Benefits Obligation

The District's annual required contribution for the year ended June 30, 2016, was $2,479,490, and contributionsmade by the District during the year were $674,449 and contribution to an irrevocable trust for $1,398,310.Interest on the net OPEB obligation and adjustments to the annual required contribution were $361,561 and$(541,895), respectively, for a net change in value of the irrevocable trust of $(180,334), which resulted in anincrease to the net OPEB obligation of $226,397. As of June 30, 2016, the net OPEB obligation was $7,048,311.See Note 12 for additional information regarding the OPEB obligation and the postemployment benefits plan.

Aggregate Net Pension Obligation

At June 30, 2016, the liability for the aggregate net pension obligation amounted to $80,706,400. Set Note 14 foradditional information.

NOTE 12 - POSTEMPLOYMENT HEALTH CARE PLAN AND OTHER POSTEMPLOYMENT BENEFITS(OPEB) OBLIGATION

The District provides postemployment health care benefits for retired employees in accordance with negotiatedcontracts with the various bargaining units of the District.

Plan Description

The Glendale Community College District Health Plan (the Plan) is a single-employer defined benefit healthcareplan administered by the District. The Plan provides medical and dental insurance benefits to eligible retirees andtheir spouses. Membership of the Plan consists of 225 retirees and beneficiaries currently receiving benefits and576 active Plan members.

Contribution Information

The contribution requirements of plan members and the District are established and may be amended by theDistrict and the District's bargaining units. The required contribution is based on projected pay-as-you-gofinancing requirements with an additional amount to prefund benefits as determined annually through agreementsbetween the District and the bargaining units. For fiscal year 2015-2016, the District contributed $2,072,759 tothe Plan of which $674,449 was used for current premiums, and $1,398,310 was contributed to an irrevocabletrust.



45

Annual OPEB Cost and Net OPEB Obligation

The District's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer(ARC), an amount actuarially determined in accordance with the payments of GASB Statement No. 45. TheARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each yearand amortize any unfunded actuarial accrued liabilities (UAAL) (or funding costs) over a period not to exceed30 years. The following table shows the components of the District's annual OPEB cost for the year, the amountactually contributed to the Plan, and changes in the District's net OPEB obligation to the Plan:

Annual required contribution 2,479,490$

Contributions made by District (674,449)

Contributions made to Irrevocable Trust (1,398,310)

Change in value of Irrevocable Trust (180,334)

Increase in net OPEB obligation 226,397

Net OPEB obligation, July 1, 2015 6,821,914

Net OPEB obligation, June 30, 2016 7,048,311$

Trend Information

Trend information for the annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and thenet OPEB obligation for the past three years is as follows:

Year Ended Annual OPEB Actual Percentage Net OPEB

June 30, Cost Contribution Contributed Obligation

2014 1,342,601$ 655,246$ 48.8% 5,158,216$

2015 2,343,135 679,437 29.0% 6,821,914

2016 2,479,490 2,072,759 83.6% 7,048,311

Funding Status and Funding Progress

A schedule of funding progress as of the most recent actuarial valuation is as follows:

Actuarial Accrued Liability (AAL) 16,663,213$

Actuarial Value of Plan Assets 1,607,762

Unfunded Actuarial Accrued Liability (UAAL) 15,055,451$

Funded Ratio (Actuarial Value of Plan Assets/AAL) 10%

Covered Payroll 53,700,584$

UAAL as Percentage of Covered Payroll 28%



46

The above noted actuarial accrued liability was based on the August 29, 2015, actuarial valuation. Actuarialvaluation of an ongoing plan involves estimates of the value of reported amounts and assumptions about theprobability of occurrence of events far into the future. Examples include assumptions about future employment,mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the Plan and theannual required contribution of the employer are subject to continual revision as actual results are compared withpast expectations and new estimates are made about the future. The Schedule of Other Postemployment BenefitsFunding Progress, presented as required supplementary information, follows the notes to the financial statementsand presents multi-year trend information about whether the actuarial value of Plan assets is increasing ordecreasing over time relative to the actuarial accrued liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive Plan (the Plan as understoodby the employer and the Plan members) and include the types of benefits provided at the time of each valuationand the historical pattern of sharing of benefit costs between the employer and the Plan members to that point.The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial values of assets, consistent with the long-termperspective of the calculations.

In the August 29, 2015, actuarial valuation, the "entry age normal" actuarial cost method was used. The actuarialassumptions included a 5.3 percent investment rate of return based on the Plan being funded in an irrevocableemployee benefit trust fund invested in a long-term fixed income portfolio. Healthcare cost trend assumptionswere based on a four percent increase each year. The UAAL is being amortized at a level percentage of payrollmethod. This amortization payment would increase each year based on covered payroll. The remainingamortization period at June 30, 2016, was 24 years.

NOTE 13 - RISK MANAGEMENT

Property and Liability Insurance Coverages

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errorsand omissions; injuries to employees; and natural disasters. The District contracted with the Alliance for Schoolsfor Cooperative Insurance Program (ASCIP) Joint Powers Authority for property and liability insurance withcoverages of $1 million combined single limit per occurrence for general and automobile liability andreplacement costs subject to policy limits, terms, and conditions for property liability.

Joint Powers Authority Risk Pools

During fiscal year ended June 30, 2016, the District contracted with the ASCIP Joint Powers Authority forproperty and liability insurance coverage. Settled claims have not exceeded this commercial coverage in any ofthe past three years. There has not been a significant reduction in coverage from the prior year.



47

Workers' Compensation

For fiscal year 2016, the District participated in the Schools Linked for Insurance Management (SLIM) JointPowers Authority (JPA), an insurance purchasing pool. The intent of the JPA is to achieve the benefit of areduced premium for the District by virtue of its grouping and representation with other participants in the JPA.The workers' compensation experience of the participating districts is calculated as one experience, and acommon premium rate is applied to all districts in the JPA. Each participant pays its workers' compensationpremium based on its individual rate. Total savings are then calculated and each participant's individualperformance is compared to the overall saving. A participant will then either receive money from or be requiredto contribute to the "equity-pooling fund". This "equity pooling" arrangement ensures that each participant sharesequally in the overall performance of the JPA. Participation in the JPA is limited to K-12 and community collegedistricts that can meet the JPA's selection criteria.

NOTE 14 - EMPLOYEE RETIREMENT SYSTEMS

Qualified employees are covered under multiple-employer defined benefit pension plans maintained by agenciesof the State of California. Academic employees are members of CalSTRS and classified employees are membersof CalPERS.

For the fiscal year ended June 30, 2016, the District reported the net pension liabilities, pension expense, anddeferred outflows of resources and deferred inflows of resources for each of the above plans as follows:

Collective Collective

Collective Net Deferred Outflows Deferred Inflows Collective

Pension Plan Pension Liability of Resources of Resources Pension Expense

CalSTRS 50,907,097$ 7,950,699$ 9,011,428$ 3,692,791$

CalPERS 28,230,684 8,882,639 10,543,610 1,627,261

CalPERS - Safety Risk Pool 1,568,619 574,275 643,880 170,434Total 80,706,400$ 17,407,613$ 20,198,918$ 5,490,486$

Collective Collective

Collective Net Deferred Outflows Deferred Inflows Collective

Pension Plan Pension Liability of Resources of Resources Pension Expense

CalPERS - Misc Plan

(Associated Students) 380,645$ 221,056$ 13,470$ 173,059$

Primary Government

Fiduciary Funds



48

The details of each plan are as follows:

California State Teachers' Retirement System (CalSTRS)

Plan Description

The District contributes to the State Teachers' Retirement Plan (STRP) administered by CalSTRS. STRP is acost-sharing multiple-employer public employee retirement system defined benefit pension plan. Benefitprovisions are established by State statutes, as legislatively amended, within the State Teachers' Retirement Law.

A full description of the pension plan regarding benefit provisions, assumptions (for funding, but not accountingpurposes), and membership information is listed in the June 30, 2014, annual actuarial valuation report, DefinedBenefit Program Actuarial Valuation. This report and CalSTRS audited financial information are publicallyavailable reports that can be found on the CalSTRS website under Publications at:http://www.calstrs.com/member-publications.

Benefits Provided

The STRP provides retirement, disability, and survivor benefits to beneficiaries. Benefits are based on members'final compensation, age, and years of service credit. Members hired on or before December 31, 2012, withfive years of credited service are eligible for the normal retirement benefit at age 60. Members hired on or afterJanuary 1, 2013, with five years of credited service are eligible for the normal retirement benefit at age 62. Thenormal retirement benefit is equal to 2.0 percent of final compensation for each year of credited service.

The STRP is comprised of four programs: Defined Benefit Program, Defined Benefit Supplement Program, CashBalance Benefit Program, and Replacement Benefits Program. The STRP holds assets for the exclusive purposeof providing benefits to members and beneficiaries of these programs. CalSTRS also uses plan assets to defrayreasonable expenses of administering the STRP. Although CalSTRS is the administrator of the STRP, the State isthe sponsor of the STRP and obligor of the trust. In addition, the State is both an employer and nonemployercontributing entity to the STRP.

The District contributes exclusively to the STRP Defined Benefit Program, thus disclosures are not included forthe other plans.

The STRP provisions and benefits in effect at June 30, 2016, are summarized as follows:

Hire date

On or before

December 31, 2012

On or after

January 1, 2013

Benefit formula 2% at 60 2% at 62

Benefit vesting schedule 5 years of service 5 years of service

Benefit payments Monthly for life Monthly for life

Retirement age 60 62

Monthly benefits as a percentage of eligible compensation 2.0% - 2.4% 2.0% - 2.4%

Required employee contribution rate 9.20% 8.56%

Required employer contribution rate 10.73% 10.73%

Required State contribution rate 7.12589% 7.12589%

STRP Defined Benefit Program



49

Contributions

Required member, District, and State of California contribution rates are set by the California Legislature andGovernor and detailed in Teachers' Retirement Law. The contribution rates are expressed as a level percentage ofpayroll using the entry age normal actuarial method. In accordance with AB 1469, employer contributions intothe CalSTRS will be increasing to a total of 19.1 percent of applicable member earnings phased over a seven-yearperiod. The contribution rates for each plan for the year ended June 30, 2016, are presented above, and theDistrict's total contributions were $3,512,175.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows ofResources Related to Pensions

At June 30, 2016, the District reported a liability for its proportionate share of the net pension liability thatreflected a reduction for State pension support provided to the District. The amount recognized by the District asits proportionate share of the net pension liability, the related State support, and the total portion of the netpension liability that was associated with the District were as follows:

50,907,097$

26,924,243

77,831,340$

Total net pension liability, including State share:

District's proportionate share of net pension liability

State's proportionate share of net pension liability associated with the District

Total

The net pension liability was measured as of June 30, 2015. The District's proportion of the net pension liabilitywas based on a projection of the District's long-term share of contributions to the pension plan relative to theprojected contributions of all participating college districts and the State, actuarially determined. The District'sproportionate share for the measurement periods of June 30, 2015 and June 30, 2014, was 0.0756 percent and0.0749 percent, respectively, resulting in a net increase in the proportionate share of 0.0007 percent.

For the year ended June 30, 2016, the District recognized pension expense of $3,692,791. In addition, the Districtrecognized pension expense and revenue of $2,085,585 for support provided by the State. At June 30, 2016, theDistrict reported deferred outflows of resources and deferred inflows of resources related to pensions from thefollowing sources:

Deferred Outflows

of Resources

Deferred Inflows

of Resources

3,512,175$ -$

427,522 -

4,011,002 8,160,758

Total 7,950,699$ 9,011,428$

Pension contributions subsequent to measurement date

- 850,670

Net change in proportionate share of net pension liability

Differences between expected and actual experience in the

measurement of the total pension liability

Difference between projected and actual earnings on

pension plan investments



50

The deferred outflows of resources related to pensions resulting from District contributions subsequent to themeasurement date will be recognized as a reduction of the net pension liability in the subsequent fiscal year.

The deferred outflows/(inflows) of resources related to the difference between projected and actual earnings onpension plan investments will be amortized over a closed five-year period and will be recognized in pensionexpense as follows:

Deferred

Year Ended Outflows/(Inflows)

June 30, of Resources

2017 (1,717,502)$

2018 (1,717,502)

2019 (1,717,502)

2020 1,002,750

Total (4,149,756)$

The deferred outflows/(inflows) of resources related to the net change in proportionate share of net pensionliability and differences between expected and actual experience in the measurement of the total pension liabilitywill be amortized over the Expected Average Remaining Service Life (EARSL) of all members that are providedbenefits (active, inactive, and retirees) as of the beginning of the measurement period. The EARSL for the2014-2015 measurement period is seven years and will be recognized in pension expense as follows:

Deferred



2017 (70,525)$

2018 (70,525)

2019 (70,525)

2020 (70,525)

2021 (70,525)

Thereafter (70,523)

Total (423,148)$



51


Total pension liability for STRP was determined by applying update procedures to a financial reporting actuarialvaluation as of June 30, 2014, and rolling forward the total pension liability to June 30, 2015. The financialreporting actuarial valuation as of June 30, 2014, used the following methods and assumptions, applied to all priorperiods included in the measurement:

Valuation date June 30, 2014Measurement date June 30, 2015Experience study July 1, 2006 through June 30, 2010Actuarial cost method Entry age normalDiscount rate 7.60%Investment rate of return 7.60%Consumer price inflation 3.00%Wage growth 3.75%

CalSTRS uses custom mortality tables to best fit the patterns of mortality among its members. These customtables are based on RP2000 series tables adjusted to fit CalSTRS experience.

The long-term expected rate of return on pension plan investments was determined using a building-block methodin which best estimate ranges of expected future real rates of return (expected returns, net of pension planinvestment expense, and inflation) are developed for each major asset class. The best estimate ranges weredeveloped using capital market assumptions from CalSTRS general investment consultant. Based on the modelfor CalSTRS consulting actuary's investment practice, a best estimate range was determined by assuming theportfolio is re-balanced annually and that the annual returns are lognormally distributed and independent fromyear to year to develop expected percentiles for the long-term distribution of annualized returns. The assumedasset allocation is based on the Teachers' Retirement Board of the California State Teachers' Retirement System(board) policy for target asset allocation in effect on February 2, 2012, the date the current experience study wasapproved by the board. Best estimates of 10-year geometric real rates of return and the assumed asset allocationfor each major asset class used as input to develop the actuarial investment rate of return are summarized in thefollowing table:

Long-Term

Assumed Asset Expected Real

Asset Class Allocation Rate of Return

Global equity 47% 4.50%

Private equity 12% 6.20%

Real estate 15% 4.35%

Inflation sensitive 5% 3.20%

Fixed income 20% 0.20%

Cash/liquidity 1% 0.00%



52

Discount Rate

The discount rate used to measure the total pension liability was 7.60 percent. The projection of cash flows usedto determine the discount rate assumed the contributions from plan members and employers will be made atstatutory contribution rates. Projected inflows from investment earnings were calculated using the long-termassumed investment rate of return (7.60 percent) and assuming that contributions, benefit payments, andadministrative expense occurred midyear. Based on these assumptions, the STRP's fiduciary net position wasprojected to be available to make all projected future benefit payments to current plan members. Therefore, thelong-term assumed investment rate of return was applied to all periods of projected benefit payments to determinetotal pension liability.

The following presents the District's proportionate share of the net pension liability calculated using the currentdiscount rate, as well as what the net pension liability would be if it were calculated using a discount rate that isone percent lower or higher than the current rate:

Net Pension

Discount Rate Liability

1% decrease (6.60%) 76,865,754$

Current discount rate (7.60%) 50,907,097

1% increase (8.60%) 29,333,358

California Public Employees' Retirement System (CalPERS) - Schools Pool Plan

Plan Description

Qualified employees are eligible to participate in the School Employer Pool (SEP) under CalPERS, a cost-sharingmultiple-employer public employee retirement system defined benefit pension plan administered by CalPERS.Benefit provisions are established by State statutes, as legislatively amended, within the Public Employees'Retirement Law.

A full description of the pension plans regarding benefit provisions, assumptions (for funding, but not accountingpurposes), and membership information is listed in the June 30, 2014, annual actuarial valuation reports, SchoolsPool Actuarial Valuation, 2014. This report and CalPERS audited financial information are publically availablereports that can be found on the CalPERS website under Forms and Publications at:https://www.calpers.ca.gov/page/forms-publications.

Benefits Provided

CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefitsto plan members who must be public employees and beneficiaries. Benefits are based on years of service credit, abenefit factor, and the member's final compensation. Members hired on or before December 31, 2012, withfive years of total service are eligible to retire at age 50 with statutorily reduced benefits. Members hired on orafter January 1, 2013, with five years of total service are eligible to retire at age 52 with statutorily reducedbenefits. All members are eligible for non-duty disability benefits after five years of service. The Basic DeathBenefit is paid to any member's beneficiary if the member dies while actively employed. An employee's eligiblesurvivor may receive the 1957 Survivor Benefit if the member dies while actively employed, is at least age 50 (orage 52 for members hired on or after January 1, 2013), and has at least five years of credited service. The cost ofliving adjustments for each plan are applied as specified by the Public Employees' Retirement Law.



53

The CalPERS provisions and benefits in effect at June 30, 2016, are summarized as follows:

Hire date

On or before

December 31, 2012

On or after

January 1, 2013








School Employer Pool (CalPERS)

Contributions

Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contributionrates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1following notice of a change in the rate. Total plan contributions are calculated through the CalPERS annualactuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costsof benefits earned by employees during the year, with an additional amount to finance any unfunded accruedliability. The District is required to contribute the difference between the actuarially determined rate and thecontribution rate of employees. The contribution rates are expressed as a percentage of annual payroll. Thecontribution rates for each plan for the year ended June 30, 2016, are presented above, and the total Districtcontribution was $2,632,625.


As of June 30, 2016, the District reported net pension liabilities for its proportionate share of the CalPERS netpension liability totaling $28,230,684. The net pension liability was measured as of June 30, 2015. The District'sproportion of the net pension liability was based on a projection of the District's long-term share of contributionsto the pension plan relative to the projected contributions of all participating college districts, actuariallydetermined. The District's proportionate share for the measurement periods of June 30, 2015 and June 30, 2014,was 0.1915 percent and 0.2191 percent, respectively, resulting in a net decrease in the proportionate share of0.0276 percent.



54

For the year ended June 30, 2016, the District recognized pension expense of $1,627,261 for CalPERS. AtJune 30, 2016, the District reported deferred outflows of resources and deferred inflows of resources related topensions from the following sources:

Deferred Outflows

of Resources

Deferred Inflows

of Resources

2,632,625$ -$

- 3,205,807

4,636,589 5,603,231

Changes of assumptions 1,734,572

8,882,639$ 10,543,610$


1,613,425 -

Total


Difference between projected and actual earnings on pension

plan investments





Deferred



2017 (708,597)$

2018 (708,597)

2019 (708,597)

2020 1,159,149

Total (966,642)$



55

The deferred outflows/(inflows) of resources related to the net change in proportionate share of net pensionliability, changes of assumptions, and differences between expected and actual experience in the measurement ofthe total pension liability will be amortized over the Expected Average Remaining Service Life (EARSL) of allmembers that are provided benefits (active, inactive, and retirees) as of the beginning of the measurement period.The EARSL for the 2014-2015 measurement period is 3.9 years and will be recognized in pension expense asfollows:

Deferred



2017 (1,158,450)$

2018 (1,158,450)

2019 (1,010,054)

Total (3,326,954)$


Total pension liability for the SEP was determined by applying update procedures to a financial reportingactuarial valuation as of June 30, 2014, and rolling forward the total pension liability to June 30, 2015. Thefinancial reporting actuarial valuation as of June 30, 2014, used the following methods and assumptions, appliedto all prior periods included in the measurement:

Valuation date June 30, 2014Measurement date June 30, 2015Experience study July 1, 1997 through June 30, 2011Actuarial cost method Entry age normalDiscount rate 7.65%Investment rate of return 7.65%Consumer price inflation 2.75%Wage growth Varies by entry age and services

Mortality assumptions are based on mortality rates resulting from the most recent CalPERS experience studyadopted by the CalPERS Board. For purposes of the post-retirement mortality rates, those revised rates includefive years of projected ongoing mortality improvement using Scale AA published by the Society of Actuaries.



56

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-termmarket return expectations, as well as the expected pension fund cash flows. Using historical returns of all thefunds' asset classes, expected compound returns were calculated over the short-term (first ten years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term andlong-term, the present value of benefits was calculated for each fund. The expected rate of return was set bycalculating the single equivalent expected return that arrived at the same present value of benefits for cash flowsas the one calculated using both short-term and long-term returns. The expected rate of return was then setequivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter ofone percent. The target asset allocation and best estimates of arithmetic real rates of return for each major assetclass are summarized in the following table:

Long-Term




Global fixed income 19% 0.99%




Infrastructure and Forestland 2% 4.50%

Liquidity 2% -0.55%

Discount Rate

The discount rate used to measure the total pension liability was 7.65 percent. The projection of cash flows usedto determine the discount rate assumed the contributions from plan members and employers will be made atstatutory contribution rates. Based on these assumptions, the School Employer Pool fiduciary net position wasprojected to be available to make all projected future benefit payments to current plan members. Therefore, thelong-term assumed investment rate of return was applied to all periods of projected benefit payments to determinetotal pension liability.


Net Pension


1% decrease (6.65%) 45,947,790$


1% increase (8.65%) 13,497,726



57

Plan Fiduciary Net Position

Detailed information about CalPERS School Employer plan fiduciary net position is available in a separatecomprehensive annual financial report. Copies of the CalPERS annual financial report may be obtained from theCalPERS Executive Office, 400 P Street, Sacramento, CA 95814.

California Public Employees' Retirement System (CalPERS) - Safety Plan

Plan Description

Qualified employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Plan underCalPERS, a cost-sharing multiple-employer public employee retirement system defined benefit pension planadministered by CalPERS. The Public Agency Cost-Sharing Multiple-Employer Plan is comprised of aMiscellaneous Risk Pool and a Safety Risk Pool. The District sponsors one Safety Pool Plan (the Plan) foremployees of the District Police Department. The Plan provides retirement and disability benefits, annualcost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions areestablished by State statutes, as legislatively amended, within the Public Employees' Retirement Law.

Benefits Provided

The Plan provides service retirement and disability benefits, annual cost of living adjustments, and death benefitsto plan members who must be sworn police officers and beneficiaries. Benefits are based on years of servicecredit, a benefit factor, and the member's final compensation. Members with five years of total service are eligibleto retire at age 50 with statutorily reduced benefits. All members are eligible for employment-related disabilitybenefits regardless of length of service and non-duty disability benefits after five years of service. Disabilitybenefits are determined in the same manner as retirement benefits but are payable immediately without anactuarial reduction. The Post-Retirement Death Benefit is a one-time payment made to a retiree's designatedsurvivor or estate upon the retiree's death. The Basic Death Benefit is paid to any member's beneficiary if themember dies while actively employed. An employee's eligible survivor may receive the 1957 Survivor Benefit ifthe member dies while actively employed, is at least age 50 (or 52 for members hired on or after January 1, 2013),and has at least five years of credited service. The Special Death Benefit is provided to an employee's eligiblesurvivors if the member dies while actively employed and the death is job-related. The cost of living adjustmentsfor each plan are applied as specified by the Public Employees' Retirement Law.



58


CalPERS - Safety Plan

Benefit formula 3% at 50

Benefit vesting schedule 5 years of service

Benefit payments Monthly for life

Retirement age 50

Monthly benefits as a percentage of eligible compensation 1.0% - 2.5%

Required employee contribution rate 9.000%

Required employer contribution rate 20.230%

Required unfunded liability payment to CalPERS $123,264

Contributions

Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contributionrates for all public employers are determined on an annual basis by the actuary and shall be effective on July 1following notice of a change in the rate. Total plan contributions are determined annually through the CalPERSannual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to financethe costs of benefits earned by employees during the year, with an additional amount to finance any unfundedaccrued liability. The District is required to contribute the difference between the actuarially determined rateand the contribution rate of employees. The contribution rates are expressed as percentage of annual payroll.The contribution rates for each plan for the year ended June 30, 2016, are presented above, and the total Districtcontributions were $234,704.


As of June 30, 2016, the District reported net pension liabilities for its proportionate share of the Safety Risk Poolnet pension liability totaling $1,568,619. The net pension liability was measured as of June 30, 2015. TheDistrict's proportion of the net pension liability was based on a projection of the District's long-term share ofcontributions to the pension plan relative to the projected contributions of all participating employers, actuariallydetermined. The District's proportionate share for the measurement periods of June 30, 2015 and June 30, 2014,was 0.03810 percent and 0.02324 percent, respectively, resulting in a net increase in the proportionate share of0.01486 percent.



59

For the year ended June 30, 2016, the District recognized pension expense of $170,434. At June 30, 2016, theDistrict reported deferred outflows of resources and deferred inflows of resources related to pensions from thefollowing sources:

Deferred Outflows

of Resources

Deferred Inflows

of Resources

234,704$ -$

69,029

339,571 408,727

- 29,668

- 136,456

574,275$ 643,880$


Total




Changes of assumptions





Deferred



2017 (51,349)$

2018 (51,349)

2019 (51,349)

2020 84,891

Total (69,156)$



60


Deferred



2017 (83,982)$

2018 (83,982)

2019 (67,189)

Total (235,153)$


Total pension liability for the Plan was determined by applying update procedures to a financial reportingactuarial valuation as of June 30, 2014, and rolling forward the total pension liability to June 30, 2015. Thefinancial reporting actuarial valuation as of June 30, 2014, used the following methods and assumptions, appliedto all prior periods included in the measurement:


Mortality assumptions are based on mortality rates resulting from the most recent CalPERS experience studyadopted by the CalPERS Board. For purposes of the post-retirement mortality rates, those revised rates include20 years of projected ongoing mortality improvement using Scale BB published by the Society of Actuaries.



61

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-termmarket return expectations, as well as the expected pension fund cash flows. Using historical returns of all thePlan's asset classes, expected compound (geometric) returns were calculated over the short-term (first ten years)and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for bothshort-term and long-term, the present value of benefits was calculated for the Plan. The expected rate of returnwas set by calculating the single equivalent expected return that arrived at the same present value of benefits forcash flows as the one calculated using both short-term and long-term returns. The expected rate of return was thenset equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of onepercent. The target asset allocation and best estimates of arithmetic real rates of return for each major asset classare summarized in the following table:

Long-Term









Liquidity 2% -0.55%

Discount Rate

The discount rate used to measure the total pension liability was 7.65 percent. The projection of cash flowsused to determine the discount rate assumed the contributions from plan members and employers will be madeat statutory contribution rates. Based on these assumptions, the Plan's fiduciary net position was projected to beavailable to make all projected future benefit payments to current plan members. Therefore, the long-termassumed investment rate of return was applied to all periods of projected benefit payments to determine totalpension liability.

The following presents the District's proportionate share of the net pension liability calculated using thecurrent discount rate, as well as what the net pension liability would be if it were calculated using a discountrate that is one percent lower or higher than the current rate:

Net Pension


1% decrease (6.65%) 2,515,035$


1% increase (8.65%) 792,575


Detailed information about CalPERS Safety Risk Plan fiduciary net position is available in a separatecomprehensive annual financial report. Copies of the CalPERS annual financial report may be obtained from theCalPERS Executive Office, 400 P Street, Sacramento, CA 95814.



62

California Public Employees' Retirement System (CalPERS) - Misc. Plan (Associated Students)

Plan Description

Qualified employees are eligible to participate in the Associated Students Miscellaneous Plan under CalPERS, acost-sharing multiple-employer public employee retirement system defined benefit pension plan administered byCalPERS. Benefit provisions are established by State statutes, as legislatively amended, within the PublicEmployees' Retirement Law.

A full description of the pension plans regarding benefit provisions, assumptions (for funding, but not accountingpurposes), and membership information is listed in the June 30, 2014, annual actuarial valuation report, theMiscellaneous Risk Pool Actuarial Valuation, 2014. The report and CalPERS audited financial information arepublically available reports that can be found on the CalPERS website under Forms and Publications at:https://www.calpers.ca.gov/page/forms-publications.

Benefits Provided

CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefitsto plan members who must be public employees and beneficiaries. Benefits are based on years of service credit, abenefit factor, and the member's final compensation. Members hired on or before December 31, 2012, withfive years of total service are eligible to retire at age 50 with statutorily reduced benefits. Members hired on orafter January 1, 2013, with five years of total service are eligible to retire at age 52 with statutorily reducedbenefits. All members are eligible for non-duty disability benefits after five years of service. The Basic DeathBenefit is paid to any member's beneficiary if the member dies while actively employed. An employee's eligiblesurvivor may receive the 1957 Survivor Benefit if the member dies while actively employed, is at least age 50 (orage 52 for members hired on or after January 1, 2013), and has at least five years of credited service. The cost ofliving adjustments for each plan are applied as specified by the Public Employees' Retirement Law. The CalPERSMiscellaneous Risk Pool is closed to new entrants and no current employees are covered by the plan.


Hire date

On or before

December 31, 2012

On or after

January 1, 2013








School Employer Pool (CalPERS) - Misc. Plan



63

Contributions

Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contributionrates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1following notice of a change in the rate. Total plan contributions are calculated through the CalPERS annualactuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costsof benefits earned by employees during the year, with an additional amount to finance any unfunded accruedliability. The District is required to contribute the difference between the actuarially determined rate and thecontribution rate of employees. The contribution rates are expressed as a percentage of annual payroll. Thecontribution rates for each plan for the year ended June 30, 2016, are presented above, and the total Districtcontributions for CalPERS was $18,777.


As of June 30, 2016, the District reported net pension liabilities for its proportionate share of the CalPERSMiscellaneous Risk Pool net pension liability totaling $380,645. The net pension liability was measured as ofJune 30, 2015. The District's proportion of the net pension liability was based on a projection of the District'slong-term share of contributions to the pension plan relative to the projected contributions of all participatingcollege districts, actuarially determined. The District's proportionate share for the measurement periods ofJune 30, 2015 and June 30, 2014, was 0.01399 percent and 0.00744 percent, respectively, resulting in a netincrease in the proportionate share of 0.00655 percent.

For the year ended June 30, 2016, the District recognized pension expense of $173,059 for CalPERSMiscellaneous Risk Pool. At June 30, 2016, the District reported deferred outflows of resources and deferredinflows of resources related to pensions from the following sources:

Deferred Outflows

of Resources

Deferred Inflows

of Resources

18,777$ -$

193,785 -

8,494 10,156

- 3,314

221,056$ 13,470$

Changes of assumptions

Total








64


Deferred



2017 (1,262)$

2018 (1,262)

2019 (1,262)

2020 2,124

Total (1,662)$


Deferred



2017 68,025$

2018 68,025

2019 54,421

Total 190,471$


Total pension liability for the SEP was determined by applying update procedures to a financial reportingactuarial valuation as of June 30, 2014, and rolling forward the total pension liability to June 30, 2015. Thefinancial reporting actuarial valuation as of June 30, 2014, used the following methods and assumptions, appliedto all prior periods included in the measurement:




65

Mortality assumptions are based on mortality rates resulting from the most recent CalPERS experience studyadopted by the CalPERS Board. For purposes of the post-retirement mortality rates, those revised rates includefive years of projected ongoing mortality improvement using Scale AA published by the Society of Actuaries.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-termmarket return expectations, as well as the expected pension fund cash flows. Using historical returns of all thefunds' asset classes, expected compound returns were calculated over the short-term (first ten years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term andlong-term, the present value of benefits was calculated for each fund. The expected rate of return was set bycalculating the single equivalent expected return that arrived at the same present value of benefits for cash flowsas the one calculated using both short-term and long-term returns. The expected rate of return was then setequivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter ofone percent. The target asset allocation and best estimates of arithmetic real rates of return for each major assetclass are summarized in the following table:

Long-Term









Liquidity 2% -0.55%

Discount Rate

The discount rate used to measure the total pension liability was 7.65 percent. The projection of cash flows usedto determine the discount rate assumed the contributions from plan members and employers will be made atstatutory contribution rates. Based on these assumptions, the School Employer Pool fiduciary net position wasprojected to be available to make all projected future benefit payments to current plan members. Therefore, thelong-term assumed investment rate of return was applied to all periods of projected benefit payments to determinetotal pension liability.


Net Pension


1% decrease (6.65%) 638,368$

Current discount rate (7.65%) 380,645

1% increase (8.65%) 167,865



66


Detailed information about CalPERS School Employer plan fiduciary net position is available in a separatecomprehensive annual financial report. Copies of the CalPERS annual financial report may be obtained from theCalPERS Executive Office, 400 P Street, Sacramento, CA 95814.

On Behalf Payments

The State of California makes contributions to CalSTRS and CalPERS on behalf of the District. These paymentsconsist of State General Fund contributions to CalSTRS for the fiscal year ended June 30, 2016, which amountedto $2,134,072, (7.12589 percent for 2016) of salaries subject to CalSTRS. Contributions are no longerappropriated in the annual Budget Act for the legislatively mandated benefits to CalPERS. Therefore, there is noon behalf contribution rate for CalPERS. No contributions were made for CalPERS for the year endedJune 30, 2016. Under accounting principles generally accepted in the United States of America, these amountsare to be reported as revenues and expenditures. These amounts have been reflected in the basic financialstatements as a component of nonoperating revenue and employee benefit expense.

Deferred Compensation

The District offers its employees a deferred compensation plan created in accordance with Internal Revenue CodeSection 457. The plan, available to all District employees, permits them to defer a portion of their salary untilfuture years. The deferred compensation is not available to the employees until termination, retirement, death, oran unforeseeable emergency.

All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, andall income attributable to those amounts, property, or rights are solely the property and rights of the District untilpaid or made available to the employee or other beneficiary, subject only to the claims of the District's generalcreditors. Participants' rights under the plan are equal to those of general creditors of the District in an amountequal to the fair market value of the deferred account for each participant.

The funds are currently on deposit in the Glendale Federal Credit Union and CalPERS with separate accountsestablished for each participating employee.

Social Security

As established by Federal law, all public sector employees who are not members of their employer's existingretirement system (CalSTRS or CalPERS) must be covered by Social Security or an alternative plan. The Districthas elected to use Social Security as its plan for its classified staff. Contributions for employees and employer are6.2 percent.



67

NOTE 15 - PUBLIC AGENCY RETIREMENT SYSTEM (PARS) SUPPLEMENTARY RETIREMENTPLAN (SRP)

The District has adopted the Public Agency Retirement System (PARS) 403(b) Supplementary Retirement Plan(SRP). This SRP is designed to meet the requirements of Section 403(b) of the Internal Revenue Code of 1986, asamended, and, to the extent applicable, the Employee Retirement Income Security Act of 1974, as amended.Employees eligible to receive retirement benefits under the SRP must be a Faculty, Academic, ClassifiedManagement, Classified Non-Management, or Confidential Employee, is at least age fifty-five (55) with ten (10) ormore years of full-time equivalent District service from the date of the formal action taken by the District (retireduring the window period in the formal action taken by the District's Governing Board of Trustees). In order for theDistrict to reach fiscal goals, a minimum number of participants were required to enroll in the SRP. The benefitsprovided under the SRP are funded in five (5) annual contributions. (See Note 11 - Early Retirement Incentive.)

NOTE 16 - PARTICIPATION IN PUBLIC ENTITY RISK POOLS AND JOINT POWERS AUTHORITIES

The District is a member of the Schools Linked for Insurance Management (SLIM) and the Alliance for Schoolsfor Cooperative Insurance Programs (ASCIP) public entity risk pools. The District pays an annual premium toeach entity for its health, workers' compensation, and property liability coverage. The relationships between theDistrict and the pools, are such that they are not component units of the District for financial reporting purposes.

These entities have budgeting and financial reporting requirements independent of member units, and theirfinancial statements are not presented in these financial statements; however, transactions between the entities andthe District are included in these statements. Audited financial statements are available from the respectiveentities.

The District's share of year-end assets, liabilities, or fund equity has not been calculated.

During the year ended June 30, 2016, the District made payments of $1,273,527 and $546,918 to SLIM andASCIP, respectively.

NOTE 17 - COMMITMENTS AND CONTINGENCIES

Grants

The District receives financial assistance from Federal and State agencies in the form of grants. The disbursementof funds received under these programs generally requires compliance with terms and conditions specified in thegrant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from suchaudits could become a liability of the District. However, in the opinion of management, any such disallowedclaims will not have a material adverse effect on the overall financial position of the District at June 30, 2016.



68

Litigation

The District is involved in various litigation arising from the normal course of business. In the opinion ofmanagement and legal counsel, the disposition of all litigation pending is not expected to have a material adverseeffect on the overall financial position of the District at June 30, 2016.

Construction Commitments

As of June 30, 2016, the District had the following commitments with respect to the unfinished capital projects:

Remaining Expected

Construction Date of

CAPITAL PROJECT Commitment Completion

Lab/College Services Project 4,250,000$ April 2017

Learning Center Remodel Project 330,748 October 2016Total 4,580,748$

The projects are funded through a combination of general obligation bonds and capital project apportionmentsfrom the California State Chancellor's Office.

69

REQUIRED SUPPLEMENTARY INFORMATION


See accompanying note to required supplementary information.

70

SCHEDULE OF OTHER POSTEMPLOYMENT BENEFITS (OPEB) FUNDINGPROGRESS


Actuarial

Accrued

Liability Unfunded UAAL as a

Actuarial Actuarial (AAL) - AAL Percentage of

Valuation Value of Entry Age (UAAL) Funded Ratio Covered Covered Payroll

Date Assets (a) Normal (b) (b - a) (a / b) Payroll (c) ([b - a] / c)

May 1, 2009 -$ 17,534,021$ 17,534,021$ 0% 51,869,000$ 34%

April 1, 2013 - 12,665,791 12,665,791 0% 48,383,000 26%

August 29, 2015 1,607,762 16,663,213 15,055,451 10% 53,700,584 28%



71

SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THENET PENSION LIABILITY


2016 2015

CalSTRS

District's proportion of the net pension liability 0.0756% 0.0749%

District's proportionate share of the net pension liability 50,907,097$ 43,786,963$

State's proportionate share of the net pension liability associated with

the District 26,924,243 26,440,459Total 77,831,340$ 70,227,422$

District's covered - employee payroll 31,331,194$ 33,374,121$

District's proportionate share of the net pension liability as a percentage

of its covered - employee payroll 162.48% 131.20%

Plan fiduciary net position as a percentage of the total pension liability 74% 77%

CalPERS







CalPERS -SAFETY RISK POOL









72

SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THENET PENSION LIABILITY, CONTINUED


2016 2015

CalPERS - MISCELLANEOUS RISK POOL


District's proportionate share of the net pension liability 380,645$ 462,861$

District's covered - employee payroll 46,428$ 70,323$




Note : In the future, as data become available, ten years of information will be presented.



73

SCHEDULE OF DISTRICT CONTRIBUTIONSFOR THE YEAR ENDED JUNE 30, 2016

2016 2015

CalSTRS

Contractually required contribution 3,512,175$ 2,782,210$

Contributions in relation to the contractually required contribution 3,512,175 2,782,210Contribution deficiency (excess) -$ -$


Contributions as a percentage of covered - employee payroll 10.73% 8.88%

CalPERS

Contractually required contribution 2,632,625$ 2,638,966$

Contributions in relation to the contractually required contribution 2,632,625 2,638,966Contribution deficiency (excess) -$ -$



CalPERS - SAFETY RISK POOL

Contractually required contribution 234,704$ 225,565$

Contributions in relation to the contractually required contribution 234,704 225,565Contribution deficiency (excess) -$ -$



CalPERS - MISCELLANEOUS RISK POOL

Contractually required contribution 18,777$ 5,465$Contributions in relation to the contractually required contribution 18,777 5,465Contribution deficiency (excess) -$ -$

District's covered - employee payroll 158,496$ 46,428$


Note : In the future, as data become available, ten years of information will be presented.



74

NOTE TO REQUIRED SUPPLEMENTARY INFORMATIONJUNE 30, 2016

NOTE 1 - PURPOSE OF SCHEDULES

Schedule of Other Postemployment Benefits (OPEB) Funding Progress

This schedule is intended to show trends about the funding progress of the District's actuarially determinedliability for postemployment benefits other than pensions.

Schedule of the District's Proportionate Share of the Net Pension Liability

This schedule presents information on the District's proportionate share of the net pension liability (NPL), theplans' fiduciary net positions and, when applicable, the State's proportionate share of the NPL associated with theDistrict. In the future, as data becomes available, ten years of information will be presented.

Schedule of District Contributions

This schedule presents information on the District's required contribution, the amounts actually contributed, andany excess or deficiency related to the required contribution. In the future, as data becomes available, ten years ofinformation will be presented.

Changes in Benefit Terms

There were no changes in benefit terms since the previous valuation for either CalSTRS or CalPERS.

Changes in Assumptions

The CalSTRS plan rate of investment return assumption was not changed from the previous valuation. TheCalPERS plan rate of investment return assumption was changed from 7.50 percent to 7.65 percent since theprevious valuation.

75

SUPPLEMENTARY INFORMATION


See accompanying note to supplementary information.

76

DISTRICT ORGANIZATIONJUNE 30, 2016

The Glendale Community College District was formed in 1983, by an act of law, which required the college toseparate from the Glendale Unified School District. The District boundaries include the city of Glendale and theunincorporated area of Los Angeles known as La Crescenta. The College serves approximately 15,000 studentsat the main campus, as well as the Garfield Campus and the Professional Development Center. There were nochanges in the District's boundaries during the 2015-2016 fiscal year. The District's College is accredited by theAccrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.

BOARD OF TRUSTEES

MEMBER OFFICE TERM EXPIRES

Mrs. Anita Quinonez Gabrielian President 2017

Dr. Armine Hacopian Vice President 2017

Ms. Ann H. Ransford Clerk 2017

Dr. Vahé Peroomian Member 2019

Mr. Anthony P. Tartaglia Member 2019

ADMINISTRATION

Dr. David Viar Superintendent/President

Mr. Ronald Nakasone Executive Vice President, Administrative Services

Dr. Michael Ritterbrown Vice President, Instructional Services

Dr. Ricardo Perez Vice President, Student Services



77

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFOR THE YEAR ENDED JUNE 30, 2016

Pass-Through

Federal Grantor/Pass-Through CFDA Entity Identifying Federal

Grantor/Program or Cluster Title Number Number Expenditures

NATIONAL SCIENCE FOUNDATION

Research and Development Cluster

Supporting Two-year College Economics Faculty at the

Conference on Teaching and Research in Economic Education 47.076 31,283$

Pass-through from North Carolina Agriculture and Technology

State University

National Science Foundation - Just In Time 47.076 260229-B 1,739

Total Research and Development Cluster 33,022

U.S. DEPARTMENT OF VETERAN AFFAIRS

Veterans Education 64.117 1,008

U.S. DEPARTMENT OF EDUCATION

Student Financial Assistance Cluster

Federal Supplemental Educational Opportunity Grants (FSEOG) 84.007 349,600

FSEOG - Administration 84.007 73,968

Federal Work Study (FWS) 84.033 405,603

Federal Pell Grant (PELL) 84.063 23,880,134

Federal Pell Grant (PELL) Administration 84.063 100,431

Federal Student Direct Loans 84.268 2,175,650

Subtotal Student Financial Assistance Cluster 26,985,386

HIGHER EDUCATION ACT

Higher Education Institutional Aid, Title V 84.031S 358,308

Higher Education Institutional Aid, Title V 84.031C 2,461,514

Pass-through from California State University - Northridge

Hispanic Serving Institutions: STEM 84.031C F-11-2910GCC 180,961

ADULT EDUCATION AND FAMILY LITERACY ACT

Pass-through from California Department of Education

Adult Basic Education 84.002 14508/13978 622,836

English Literacy and Civics Education Grant (EL Civics) 84.002 14109 252,193

CAREER AND TECHNICAL EDUCATION ACT

Pass-through from California Community Colleges Chancellor's Office

Career and Technical Education (CTE), Title I, Part C 84.048 15-C01-019 470,835

CTE Transitions 84.048A 15-112-730 45,119

Total U.S. Department of Education 31,377,152

* Pass-Through Entity Identifying Number not available.



78

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, CONTINUEDFOR THE YEAR ENDED JUNE 30, 2016

Pass-Through

Federal Grantor/Pass-Through CFDA Entity Identifying Federal

Grantor/Program or Cluster Title Number Number Expenditures

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Pass-through from California Community Colleges Chancellor's Office

Temporary Assistance for Needy Families (TANF) 93.558 * 219,289$

Pass-through from Pacific Clinics

Head Start/Early Head Start 93.600 * 41,850

Total U.S. Department of Health and Human Services 261,139

U.S. DEPARTMENT OF HOMELAND SECURITY

Pass-through from Global Corporate College

Transportation Security Administration Associate Program 91.117 * 193

U.S. DEPARTMENT OF COMMERCE

National Institute of Standards and Technology

Pass-through from California Manufacturing Technology Consulting

Manufacturing Extension Partnership 11.611 70NANB15H196 121,233

Total Expenditures of Federal Awards 31,793,747$

* Pass-Through Entity Identifying Number not available.



79

SCHEDULE OF EXPENDITURES OF STATE AWARDSFOR THE YEAR ENDED JUNE 30, 2016

Current Prior Total

PROGRAM Year Year Entitlement

Board Financial Assistance Program 615,866$ -$ 615,866$

CalWORKs 1,166,849 - 1,166,849

CARE-Financial Aide 90,684 - 90,684

State Construction 12,166,211 - 12,166,211

Scheduled Maintenance 977,000 - 977,000

California Clean Energy Jobs Act 442,909 - 442,909

Disabled Students Program and Services 1,210,030 - 1,210,030

Adult Education Block Grant 985,475 - 985,475

Employment Training Panel 1,458,470 - 1,458,470

Extended Opportunity Program 738,691 - 738,691

Extended Opportunity Program and Services 1,956,881 - 1,956,881

Lottery-Prop 20 406,792 - 406,792

Instructional Equipment 1,029,799 - 1,029,799

Student Success 2,789,056 - 2,789,056

Student Equity 1,607,947 294,821 1,902,768

Staff Development - 3,580 3,580

Staff Diversity 7,334 56,281 63,615

State Preschool 29,592 - 29,592

Child & Adult Care Food Program - 908 908

Child Care Resource Center - 69,062 69,062

TANF CDC - 3,814 3,814

California State Preschool 75,048 - 75,048

Nursing Program Enrollment 226,612 13,652 240,264

Nursing Tutor/Mentor 90,000 - 90,000

Cal Grants - Financial Aid 2,000,000 - 2,000,000

F/T Student Success Grant 634,211 - 634,211

Trade Act - 14,678 14,678

Clean Energy Workforce Grant 24,838 - 24,838

California Career Pathway Trust 363,477 - 363,477

Faculty Entrepreneurship 7,498 - 7,498

Career Tech Ed - Nursing 79,552 - 79,552

Consortium Planning 90,595 69,423 160,018

ICT/Cross Hub 191,058 - 191,058

Career Tech Ed 87,023 - 87,023

State Rehab 87,966 - 87,966

Basic Skills Grants 348,813 377,763 726,576Total State Programs

Program Entitlements

79

Cash Accounts Unearned Total Program

Received Receivable Revenue Revenue Expenditures

615,866$ -$ -$ 615,866$ 615,866$

1,154,459 12,386 - 1,166,845 1,166,845

60,452 - - 60,452 60,452

9,265,791 1,773,138 - 11,038,929 11,038,929

1,495,686 - - 1,495,686 1,495,686

- 365,117 - 365,117 365,117

1,213,327 - - 1,213,327 1,213,327

1,148,027 - 1,119,359 28,668 28,668

632,879 183,307 - 816,186 486,226

1,053,545 - - 1,053,545 1,053,545

903,336 - - 903,336 903,336

47,238 725,402 - 772,640 430,495

1,029,322 - - 1,029,322 1,014,622

2,789,056 - - 2,789,056 2,789,056

1,902,228 - 209,111 1,693,117 1,693,117

3,580 - 2,029 1,551 1,551

63,615 - 39,154 24,461 24,461

51,669 - 22,080 29,589 29,589

908 - - 908 908

90,145 - - 90,145 90,145

3,814 - 3,814 - -

40,830 - - 40,830 40,830

223,512 - 44,878 178,634 178,634

90,000 - - 90,000 90,000

1,760,991 1,863 - 1,762,854 1,762,854

634,211 - 152,111 482,100 482,100

15,978 - 15,978 - -

24,142 691 - 24,833 24,833

179,813 148,635 128 328,320 328,320

- 7,500 - 7,500 7,500

37,558 11,275 - 48,833 48,833

90,595 - - 90,595 90,595

143,303 5,553 - 148,856 148,856

71,243 9,788 - 81,031 81,031

6,074 - - 6,074 6,074

726,576 - 308,116 418,460 418,46027,569,769$ 3,244,655$ 1,916,758$ 28,897,666$ 28,210,861$

Program Revenues



80

SCHEDULE OF WORKLOAD MEASURES FOR STATE GENERALAPPORTIONMENT


** Revised

Reported Audit Audited

Data Adjustments Data

CATEGORIES

A. Summer Intersession (Summer 2015 only)

1. Noncredit* 269.90 - 269.90

2. Credit 111.35 - 111.35

B. Summer Intersession (Summer 2016 - Prior to July 1, 2016)

1. Noncredit - - -

2. Credit - - -

C. Primary Terms (Exclusive of Summer Intersession)

1. Census Procedure Courses

(a) Weekly Census Contact Hours 9,084.38 - 9,084.38

(b) Daily Census Contact Hours 961.25 - 961.25

2. Actual Hours of Attendance Procedure Courses

(a) Noncredit* 2,526.18 - 2,526.18

(b) Credit 192.46 - 192.46

3. Alternative Attendance Accounting Procedure

(a) Weekly Census Contact Hours 741.19 - 741.19

(b) Daily Census Contact Hours 206.70 - 206.70

(c) Noncredit Independent Study/Distance Education Courses - - -

D. Total FTES 14,093.41 - 14,093.41

SUPPLEMENTAL INFORMATION (Subset of Above Information)

E. In-Service Training Courses (FTES) - - -

H. Basic Skills Courses and Immigrant Education

1. Noncredit* 2,594.39 - 2,594.39

2. Credit 579.02 - 579.02

CCFS-320 Addendum

CDCP Noncredit FTES 2,538.98 - 2,538.98

Centers FTES

1. Noncredit* 2,796.08 - 2,796.08

* Including Career Development and College Preparation (CDCP) FTES.** Annual report was revised as of December 13, 2016.



81

RECONCILIATION OF EDUCATION CODE SECTION 84362 (50 PERCENT LAW) CALCULATIONFOR THE YEAR ENDED JUNE 30, 2016

Object/TOP

Codes

Reported

Data

Audit

Adjustments

Audited

Data

Reported

Data

Audit

Adjustments

Audited

DataAcademic Salaries

Instructional SalariesContract or Regular 1100 15,085,320 -$ 15,085,320$ 16,286,950$ -$ 16,286,950$Other 1300 16,299,677 - 16,299,677 16,360,420 - 16,360,420

Total Instructional Salaries 31,384,997 - 31,384,997 32,647,370 - 32,647,370Noninstructional Salaries

Contract or Regular 1200 - - - 5,762,243 - 5,762,243Other 1400 - - - 584,887 - 584,887

Total Noninstructional Salaries - - - 6,347,130 - 6,347,130

Total Academic Salaries 31,384,997 - 31,384,997 38,994,500 - 38,994,500

Classified SalariesNoninstructional Salaries

Regular Status 2100 - - - 14,739,138 - 14,739,138Other 2300 - - - 1,440,047 - 1,440,047

Total Noninstructional Salaries - - - 16,179,185 - 16,179,185Instructional Aides

Regular Status 2200 1,724,243 - 1,724,243 2,189,857 - 2,189,857Other 2400 203,891 - 203,891 262,741 - 262,741

Total Instructional Aides 1,928,134 - 1,928,134 2,452,598 - 2,452,598

Total Classified Salaries 1,928,134 - 1,928,134 18,631,783 - 18,631,783Employee Benefits 3000 7,977,958 - 7,977,958 16,681,400 - 16,681,400Supplies and Material 4000 - - - 760,160 - 760,160Other Operating Expenses 5000 - - - 8,529,633 - 8,529,633

Total Expenditures

Prior to Exclusions 41,291,089 - 41,291,089 83,597,476 - 83,597,476

ECS 84362 A ECS 84362 BInstructional Salary Cost Total CEE

AC 0100 - 5900 and AC 6110 AC 0100 - 6799



82

RECONCILIATION OF EDUCATION CODE SECTION 84362 (50 PERCENT LAW) CALCULATION, CONTINUEDFOR THE YEAR ENDED JUNE 30, 2016

Object/TOP

Codes

Reported

Data

Audit

Adjustments

Audited

Data

Reported

Data

Audit

Adjustments

Audited

Data

ExclusionsActivities to Exclude

Student Transportation 6491 -$ -$ -$ 9,348$ -$ 9,348$Noninstructional Staff - Retirees' Benefits

and Retirement Incentives 6740 - - - 771,797 - 771,797

Objects to Exclude

Rents and Leases 5060 - - - 30,779 - 30,779

Other Operating Expenses and Services 5000 - - - 2,224,827 - 2,224,827

Total Exclusions -$ -$ -$ 3,036,751$ -$ 3,036,751$

Total for ECS 84362,

50 Percent Law 41,291,089$ -$ 41,291,089$ 80,560,725$ -$ 80,560,725$Percent of CEE (Instructional Salary

Cost/Total CEE) 51.25% 51.25% 100.00% 100.00%

50% of Current Expense of Education 40,280,362$ 40,280,362$

ECS 84362 A ECS 84362 BInstructional Salary Cost Total CEE

AC 0100 - 5900 and AC 6110 AC 0100 - 6799



83

RECONCILIATION OF ANNUAL FINANCIAL AND BUDGETREPORT (CCFS-311) WITH THE FINANCIAL STATEMENTS


There were no adjustments to the Annual Financial and Budget Report (CCFS-311) which required reconciliationto the audited financial statements at June 30, 2016.



84

PROPOSITION 30 EDUCATION PROTECTION ACT (EPA) EXPENDITURE REPORTFOR THE YEAR ENDED JUNE 30, 2016

EPA Proceeds: 8630

Activity Classification

Activity

Code

Operating

Expenses

(Obj 4000-5000)

Capital

Outlay

(Obj 6000)

Instructional Activities 1000-5900 -$ -$

Total Expenditures for EPA -$ -$

Revenues Less Expenditures

12,708,699$

Salaries

and Benefits

(Obj 1000-3000) Total

Activity Classification

Object Code

Unrestricted

12,708,699$ 12,708,699$

-$

12,708,699$ 12,708,699$



85

RECONCILIATION OF GOVERNMENTAL FUNDS TO THESTATEMENT OF NET POSITION

JUNE 30, 2016

Amounts Reported for Governmental Activities in the Statement

of Net Position are Different Because:

Total Fund Balances and Retained Earnings:General Funds 18,891,950$Special Revenue Funds 945,033Capital Project Funds 9,944,796Debt Service Funds 6,259,720Internal Service Funds 373,383

Total Fund Balance - All District Funds 36,414,882$

Capital assets used in governmental activities are not financial resources

and, therefore, are not reported as assets in governmental funds.The cost of capital assets is: 225,612,605Accumulated depreciation is: (61,847,291) 163,765,314

The District has refunded its general obligation bonds. The difference

between the amounts that were sent to escrow agents for the payment of

the old debt and the actual remaining debt obligations will be amortized as an

adjustment to interest expense. 422,067

Expenditures relating to contributions made to pension plans were recognized

on the modified accrual basis, but are not recognized on the accrual basis. 6,379,504

In governmental funds, unmatured interest on long-term obligations is

recognized in the period when it is due. On the government-wide

financial statements, unmatured interest on long-term obligations is

recognized when it is incurred. (517,284)

The net change in proportionate share of net pension liability as of the

measurement date is not recognized as an expenditure under the modified

accrual basis, but is recognized on the accrual basis over the expected

remaining service life of members receiving pension benefits. (2,847,314)

The difference between projected and actual earnings on pension plan

investments are not recognized on the modified accrual basis, but are

recognized on the accrual basis as an adjustment to pension expense. (5,185,554)

The differences between expected and actual experience in the measurement

of the total pension liability are not recognized on the modified accrual basis,

but are recognized on the accrual basis over the expected average remaining

service life of members receiving pension benefits. 733,087

The changes of assumptions are not recognized as an expenditure under the

modified accrual basis, but are recognized on the accrual basis over the

expected average remaining service life of members receiving pension benefits. (1,871,028)



86

RECONCILIATION OF GOVERNMENTAL FUNDS TO THESTATEMENT OF NET POSITION, CONTINUED

JUNE 30, 2016

Long-term obligations at year end consist of:

Bonds and notes payable (including unamortized premium) 73,173,553$Capital leases payable 1,400,702Compensated absences 3,391,621Load banking 2,457,585Other postemployment benefits 7,048,311Aggregate net pension obligation 80,706,400 (168,178,172)$

Total Net Position 29,115,502$


87

NOTE TO SUPPLEMENTARY INFORMATIONJUNE 30, 2016

NOTE 1 - PURPOSE OF SCHEDULES

District Organization

This schedule provides information about the District's governing board members and administration members.

Schedule of Expenditures of Federal Awards

The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of the Districtand is presented on the modified accrual basis of accounting. The information in this schedule is presented inaccordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform AdministrativeRequirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore,some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, thefinancial statements. The District has not elected to use the ten percent de minimis cost rate as covered in Section200.414 Indirect (F&A) costs of the Uniform Guidance.

Schedule of Expenditures of State Awards

The accompanying Schedule of Expenditures of State Awards includes the State grant activity of the District andis presented on the modified accrual basis of accounting. Therefore, some amounts presented in this schedulemay differ from amounts presented in, or used in the preparation of, the financial statements. The information inthis schedule is presented to comply with reporting requirements of the California State Chancellor's Office.

Schedule of Workload Measures for State General Apportionment

FTES is a measurement of the number of pupils attending classes of the District. The purpose of attendanceaccounting from a fiscal standpoint is to provide the basis on which apportionments of State funds, includingrestricted categorical funding, are made to community college districts. This schedule provides informationregarding the annual attendance measurements of students throughout the District.

Reconciliation of Education Code Section 84362 (50 Percent Law) Calculation

ECS 84362 requires the District to expend a minimum of 50 percent of the unrestricted General Fund monies onsalaries of classroom instructors. This is reported annually to the State Chancellor's Office. This scheduleprovides a reconciliation of the amount reported to the State Chancellor's Office and the impact of any auditadjustments and/or corrections noted during the audit.

Reconciliation of Annual Financial and Budget Report (CCFS-311) With the Financial Statements

This schedule provides the information necessary to reconcile the fund balance of all funds reported on the FormCCFS-311 to the District's internal fund financial statements.

Proposition 30 Education Protection Act (EPA) Expenditure Report

This schedule provides the District's summary of receipts and uses of the monies received through the EPA.


88

NOTE TO SUPPLEMENTARY INFORMATIONJUNE 30, 2016

Reconciliation of Governmental Funds to the Statement of Net Position

This schedule provides a reconciliation of the adjustments necessary to bring the District's internal fund financialstatements, prepared on a modified accrual basis, to the entity-wide full accrual basis financial statements requiredunder GASB Statements No. 34 and No. 35 business-type activities reporting model.

89

INDEPENDENT AUDITOR'S REPORTS




90

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


We have audited, in accordance with the auditing standards generally accepted in the United States of Americaand the standards applicable to financial audits contained in Government Auditing Standards issued by theComptroller General of the United States, the financial statements of the business-type activities and the aggregateremaining fund information of Glendale Community College District (the District) as of and for the year endedJune 30, 2016, and the related notes to the financial statements, which collectively comprise the District's basicfinancial statements, and have issued our report thereon dated December 21, 2016.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District's internal control overfinancial reporting (internal control) to determine the audit procedures that are appropriate in the circumstancesfor the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing anopinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on theeffectiveness of the District's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent, or detect and correct,misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internalcontrol, such that there is a reasonable possibility that a material misstatement of the District's financial statementswill not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or acombination of deficiencies, in internal control that is less severe than a material weakness, yet important enoughto merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this sectionand was not designed to identify all deficiencies in internal control that might be material weaknesses orsignificant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internalcontrol that we consider to be material weaknesses. However, material weaknesses may exist that have not beenidentified.

91

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District's financial statements are free from materialmisstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, andgrant agreements, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not anobjective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed noinstances of noncompliance or other matters that are required to be reported under Government AuditingStandards.

Purpose of This Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and theresults of that testing, and not to provide an opinion on the effectiveness of the District's internal control or oncompliance. This report is an integral part of an audit performed in accordance with Government AuditingStandards in considering the District's internal control and compliance. Accordingly, this communication is notsuitable for any other purpose.





92

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOREACH MAJOR PROGRAM AND ON INTERNAL CONTROL

OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE


Report on Compliance for Each Major Federal Program

We have audited Glendale Community College District's (the District) compliance with the types of compliancerequirements described in the OMB Compliance Supplement that could have a direct and material effect on eachof the District's major Federal programs for the year ended June 30, 2016. The District's major Federal programsare identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings andQuestioned Costs.

Management's Responsibility

Management is responsible for compliance with the requirements of Federal statutes, regulations, and the termsand conditions of its Federal awards applicable to its Federal programs.


Our responsibility is to express an opinion on compliance for each of the District's major Federal programs basedon our audit of the types of compliance requirements referred to above. We conducted our audit of compliance inaccordance with auditing standards generally accepted in the United States of America; the standards applicableto financial audits contained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform AdministrativeRequirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Thosestandards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assuranceabout whether noncompliance with the types of compliance requirements referred to above that could have adirect and material effect on a major Federal program occurred. An audit includes examining, on a test basis,evidence about the District's compliance with those requirements and performing such other procedures as weconsidered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major Federalprogram. However, our audit does not provide a legal determination of the District's compliance.

Opinion on Each Major Federal Program

In our opinion, the District complied, in all material respects, with the types of compliance requirements referredto above that could have a direct and material effect on each of its major Federal programs for the year endedJune 30, 2016.

93

Other Matters

The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported inaccordance with the Uniform Guidance and which are described in the accompanying Schedule of Findings andQuestioned Costs as item 2016-001. Our opinion on each major Federal program is not modified with respect tothese matters.

The District's response to the noncompliance finding identified in our audit is described in the accompanyingFederal Awards Findings and Questioned Costs. The District's response was not subjected to the auditingprocedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Internal Control Over Compliance

Management of the District is responsible for establishing and maintaining effective internal control overcompliance with the types of compliance requirements referred to above. In planning and performing our audit ofcompliance, we considered the District's internal control over compliance with the types of requirements thatcould have a direct and material effect on each major Federal program to determine the auditing procedures thatare appropriate in the circumstances for the purpose of expressing an opinion on compliance for each majorFederal program and to test and report on internal control over compliance in accordance with the UniformGuidance, but not for the purpose of expressing an opinion on the effectiveness of internal control overcompliance. Accordingly, we do not express an opinion on the effectiveness of the District's internal control overcompliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliancedoes not allow management or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on atimely basis. A material weakness in internal control over compliance is a deficiency, or combination ofdeficiencies, in internal control over compliance, such that there is a reasonable possibility that materialnoncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected andcorrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or acombination of deficiencies, in internal control over compliance with a type of compliance requirement of aFederal program that is less severe than a material weakness in internal control over compliance, yet importantenough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraphof this section and was not designed to identify all deficiencies in internal control over compliance that might bematerial weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies mayexist that were not identified. We did not identify any deficiencies in internal control over compliance that weconsider to be material weaknesses. However, we identified certain deficiencies in internal control overcompliance, as described in the accompanying Schedule of Findings and Questioned Costs as item 2016-001 thatwe consider to be a significant deficiency.

The District's response to the internal control over compliance finding identified in our audit is described in theaccompanying Federal Awards Findings and Questioned Costs. The District's response was not subjected to theauditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

94

The purpose of this report on internal control over compliance is solely to describe the scope of our testing ofinternal control over compliance and the results of that testing based on the requirements of the UniformGuidance. Accordingly, this report is not suitable for any other purpose.





95

INDEPENDENT AUDITOR'S REPORT ON STATE COMPLIANCE


Report on State Compliance

We have audited Glendale Community College District's (the District) compliance with the types of compliancerequirements as identified in the California Community Colleges Chancellor's Office District Audit Manual issued inNovember 2015 that could have a direct and material effect on each of the District's programs as noted below for theyear ended June 30, 2016.

Management's Responsibility

Management is responsible for compliance with the requirements of State laws and regulations, and the terms andconditions identified in the California Community Colleges Chancellor's Office District Audit Manual issued inNovember 2015.


Our responsibility is to express an opinion on compliance of each of the District's State programs based on our auditof the types of compliance requirements referred to above. We conducted our audit in accordance with auditingstandards generally accepted in the United States of America; the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States; and the standards andprocedures identified in the California Community Colleges Chancellor's Office District Audit Manual issued inNovember 2015. These standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether noncompliance with the compliance requirements referred to above could have a material effect on theapplicable programs noted below. An audit includes examining, on a test basis, evidence about the District'scompliance with those requirements and performing such procedures as we consider necessary in the circumstances.We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legaldetermination of the District's compliance with those requirements.

Basis for Qualified Opinion

As described in the accompanying Schedule of Findings and Questioned Costs, the District did not comply withrequirements regarding Section 423 - Apportionment for Instructional Service Agreements/Contracts, finding2016-002. Compliance with such requirements is necessary, in our opinion, for the District to comply with therequirements applicable to that program.

96

Qualified Opinion

In our opinion, except for the noncompliance described in the Basis for Qualified Opinion paragraph, the Districtcomplied, in all material respects, with the types of compliance requirements referred to above for the year endedJune 30, 2016.

Unmodified Opinion for Each of the Other Programs

In our opinion, the District complied, in all material respects, with the compliance requirements referred to above thatare applicable to the programs noted below that were audited for the year ended June 30, 2016, except as described inthe State Awards Findings and Questioned Costs section of the accompanying Schedule of Findings and QuestionedCosts.

In connection with the audit referred to above, we selected and tested transactions and records to determine theDistrict's compliance with State laws and regulations applicable to the following:

Section 421 Salaries of Classroom Instructors (50 Percent Law)Section 423 Apportionment for Instructional Service Agreements/ContractsSection 424 State General Apportionment Funding SystemSection 425 Residency Determination for Credit CoursesSection 426 Students Actively EnrolledSection 427 Concurrent Enrollment of K-12 Students in Community College Credit CoursesSection 429 Student Success and Support Program (SSSP)Section 430 Schedule Maintenance ProgramSection 431 Gann Limit CalculationSection 435 Open EnrollmentSection 438 Student Fees – Health Fees and Use of Health Fee FundsSection 439 Proposition 39 Clean EnergySection 440 Intersession Extension ProgramsSection 475 Disabled Student Programs and Services (DSPS)Section 479 To Be Arranged (TBA) HoursSection 490 Proposition 1D State Bond Funded ProjectsSection 491 Proposition 30 Education Protection Account Funds

The District did not offer any classes in Intersession Extension Programs; therefore, the compliance tests within thissection were not applicable.

The District's response to the finding identified in our audit is described in the accompanying Schedule of Findingsand Questioned Costs. We did not audit the District's response and, accordingly, we express no opinion on theresponse.


97

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


SUMMARY OF AUDITOR'S RESULTSFOR THE YEAR ENDED JUNE 30, 2016

98

FINANCIAL STATEMENTS

Unmodified

No

None reported

No

FEDERAL AWARDS

No

Yes

Unmodified

Yes

CFDA Numbers Name of Federal Program or Cluster84.007, 84.033, 84.063, 84.268 Student Financial Assistance Cluster

953,812$

Auditee qualified as low-risk auditee? Yes

STATE AWARDS

Qualified

Name of State Program

Section 423 - Apportionment for

Instructional Service Agreements/

Contracts

Any audit findings disclosed that are required to be reported in accordance

with Section 200.516(a) of the Uniform Guidance?

Type of auditor's report issued on compliance for State programs:

Unmodified for all State programs except for the following State program

which was qualified:

Internal control over major Federal programs:

Material weaknesses identified?

Dollar threshold used to distinguish between Type A and Type B programs:

Identification of major Federal programs:

Significant deficiencies identified?

Type of auditor's report issued on compliance for major Federal programs:

Type of auditor's report issued:

Internal control over financial reporting:

Material weaknesses identified?

Significant deficiencies identified?

Noncompliance material to financial statements noted?


FINANCIAL STATEMENT FINDINGS AND RECOMMENDATIONSFOR THE YEAR ENDED JUNE 30, 2016

99

None reported.


FEDERAL AWARDS FINDINGS AND QUESTIONED COSTSFOR THE YEAR ENDED JUNE 30, 2016

100

The following findings represent significant deficiencies and/or instances of noncompliance including questionedcosts that are required to be reported by the Uniform Guidance.

2016-001 SPECIAL TESTS AND PROVISIONS - RETURN TO TITLE IVFederal Program Affected

Program Name: Student Financial Assistance ClusterCFDA Numbers: 84.007, 84.033, 84.063, and 84.268Direct funded by U.S. Department of EducationFederal Agency: U.S. Department of Education

Criteria or Specific Requirement

Uniform Guidance Compliance Supplement, 34 CFR Section 668.173 (b):

Return of Title IV funds are required to be deposited or transferred into the Student FinancialAssistance (SFA) account or electronic funds transfer initiated to ED as soon as possible, but nolater than 45 days after the date the institution determines that the student withdrew. Returns bycheck are late if the check is issued more than 45 days after the institution determined the studentwithdrew, or the date on the cancelled check shows the check was endorsed more than 60 days afterthe date the institution determined that the student withdrew.

Condition

Significant Deficiency – The District's portion of the Return to Title IV funds were not returnedwithin the 45 day requirement.

Questioned Costs

No questioned costs. The District did return the funds; however, they were not returned within the45 day requirement.

Context

There were 18 students out of 40 tested where the District's portion of the Return to Title IV fundswas not returned within the 45 day requirement.

Effect

Without proper monitoring of Title IV returns, the District risks noncompliance with the abovereferenced criteria.

Cause

The District has not implemented policies and procedures to monitor the Return to Title IV funds.


FEDERAL AWARDS FINDINGS AND QUESTIONED COSTSFOR THE YEAR ENDED JUNE 30, 2016

101

Recommendation

The District should monitor procedures over Return to Title IV funds and make sure they met the45 day deadline.

Management's Response and Corrective Action Plan

The Glendale Community College Office of Financial Aid received a finding of non-compliance(Uniform Guidance Compliance Supplement, 34 CFR Section 668-173 (b) identified in the audityear ended June 30, 2016.

This office, per the Federal guidelines relating to the Return of Title IV funds (R2T4), makes everyeffort to comply with the 45 day deadline to return the funds (as per prior year audits indicate).However, an unusual personnel matter in our office prevented us from fulfilling our requirementswithin Federal guidelines.

The employee whose responsibility it was to process the Return of Title IV funds unexpectedly wentout on Administrative then medical leave and consequently we were unable to determine when or ifhe would be returning to work.

Due to the complexity of the situation and the job this employee left behind, we immediatelydelegated this task to one of our more experienced employees who took on this responsibility(with no knowledge of R2T4) as an additional duty to her already full work load.

Since we had no indication when or if the infirmed employee would return, and since we could notrecruit a new individual against the position, this office was forced to employ a temporary fix untilwe were informed the 1) Employee would return or 2) we could advertise against the vacantposition.

Because the absence of the employee was longer than anticipated, the 45 day deadline was exceededin 18 of the 40 cases tested. The employee who took on the additional duty had no prior training onthese additional responsibilities. Consequently, it took her longer to learn the skills needed toaccomplish this task in a timely manner.

Since then, the employee currently performing Return to Title IV has learned the job, and is inprocess of created a continuity binder with the policies and procedures needed to comply withR2T4 requirements. So that in the event of unexpected personnel changes we will be able to ensurethe timely processing of R2T4's within Federal guidelines. In addition, we have identified a secondindividual who is being trained to step in at any time and takeover R2T4 to ensure the continuity ofthe process and ensure the 45 day processing deadline is also being met.


STATE AWARDS FINDINGS AND QUESTIONED COSTSFOR THE YEAR ENDED JUNE 30, 2016

102

The following findings represent instances of noncompliance and/or questioned costs relating to State programlaws and regulations.

2016-002 SECTION 423 - APPORTIONMENT FOR INSTRUCTIONAL SERVICEAGREEMENTS/CONTRACTS

Criteria or Specific Requirement

California Education Code Section 84752, California Code of Regulations (CCR) Title 5Section 58058, and California Community College State Chancellor's Office Legal Advisory04-01.5; Instructional Service Agreements, dated March 18, 2004; and the related Contract Guide toInstructional Service Agreements between College Districts and Public Agencies.

Condition

Instructors teaching the classes under the instructional service agreement classes were not paid asemployees of the District. When an instructor is not an employee of the District, a contract must besigned before the class starts. The contract must outline the conditions of the instruction anddetermine minimum qualifications of the instructor. A written agreement or contract with eachinstructor conducting instruction was not obtained by the District.

Questioned Costs

There was a total of 14 classes reported on the CCFS-320 attendance report that had teachersindependent of the District that did not have an instructional service agreement. The total contacthours for these classes came out to 7,172 contact hours. This amount translates to 13.6602 FTES.The total amount of the questioned 13.6602 FTES is approximately $63,000.

Context

There were a total of six instructors tested who did not have any contract to teach a total of 14classes.

Effect

Classes taught by outside instructors cannot be claimed for FTES apportionment if there is nocontract with that teacher.

Cause

The District did not have a policy in place that required instructors not employed by the District tosign a contract.


STATE AWARDS FINDINGS AND QUESTIONED COSTSFOR THE YEAR ENDED JUNE 30, 2016

103

Recommendation

The District should closely monitor and review the procedures used for instructional serviceagreements and ensure all instructors have a written agreement or contract with the District. Inaddition, the District should review classes to ensure they meet the minimum conditions ofinstruction.

Management's Response and Corrective Action Plan

The problem identified by the audit finding has been corrected. All instructors not employed by theDistrict are now under contract with the District. Further, all those who are responsible forscheduling classes, including division chairs and deans, have been informed in writing of the needfor all instructors who are not employed by the District to have a contract with the District and thatsuch contracts must be approved and signed by the Executive Vice President of AdministrativeAffairs or his representative. All contracts will be signed prior to the beginning of each semester inwhich the instructor will be teaching. A recal was done to remove all the FTES for this complianceerror noted.


SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGSFOR THE YEAR ENDED JUNE 30, 2016

104

Except as specified in previous sections of this report, summarized below is the current status of all audit findingsreported in the prior year's Schedule of Findings and Questioned Costs.

Financial Statement Findings

None reported.

Federal Awards Findings

None reported.

State Awards Findings

None reported.

GLENDALE COMMUNITY COLLEGE DISTRICT - Californiatrackprop30.ca.gov/AuditReport/CCD/2016/Glendale Community Colleg… · GLENDALE COMMUNITY COLLEGE DISTRICT TABLE OF CONTENTS JUNE

Documents