comprehensive annual financial report … college is accredited by the middle states commission on...

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2017

Leslie A. Jamison, CPA Dean of Finance

5100 Black Horse Pike · Mays Landing, New Jersey 08330 · 609-625-1111

ATLANTIC CAPE COMMUNITY COLLEGE COMPREHENSIVE ANNUAL FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2017

TABLE OF CONTENTS

Introductory Section Page(s) President’s Letter 1 Transmittal Letter 2-6 Principal Officials 7 Organization Chart 8 Financial Section Independent Auditor’s Report 9-11 Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 12-13 Required Supplementary Information – Part I: Management’s Discussion and Analysis (Unaudited) 14-23 Basic Financial Statements: Statements of Net Position 24 Statements of Revenues, Expenses, and Changes in Net Position 25 Statements of Cash Flows 26-27 Notes to Financial Statements 28-69 Required Supplementary Information – Part II: RSI-1 Schedule of the College’s Proportionate Share of the

Net Pension Liability – Public Employees’ Retirement System 70 RSI-2 Schedule of College’s Contributions – Public Employees’

Retirement System 71 Notes to Required Supplementary Information – Part II 72 Supplemental Financial Information:

Balance Sheets 73-74 Statement of Changes in Fund Balances 75

Statement of Current Fund Revenues, Expenditures and Other Changes 76

Budget Comparison to Actual 77 Salary Expenditures 78 Single Audit Section

Report on Compliance for Each Major Program and Report On Internal Control Over Compliance Required By The Uniform Guidance and State of New Jersey Circular 15-08 OMB 79-80

Schedule of Expenditures of Federal Awards 81-82 Schedule of Expenditures of State Financial Assistance 83 Notes to the Schedules of Expenditures of Financial Awards 84 Schedule of Findings and Questioned Costs 85-87 Summary Schedule of Prior Audit Findings 88

Statistical Section (Unaudited) Net Position 89 Capital Assets 90 Revenues by Source 91-92 Current Unrestricted Fund Revenues by Source 93-94 Expenditures by Natural Classification 95-96 Current Unrestricted Fund Expenditures by Function 97-98 Enrollment Data 99-103 Demographic and Economic Statistics 104 Principal Employers 105 College Staffing 106

INTRODUCTORY SECTION

President’s Letter

Members of the Atlantic Cape Board of Trustees:

I am pleased to provide you and the college community with the Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2017.

Atlantic Cape Community College, the first institution of higher education in Atlantic and Cape May counties, celebrated its 50th Anniversary this year. We have built an excellent reputation of providing high quality education and training to students at an affordable price. We are proud to partner with K-12, higher education, non-profit, and business and industry institutions to ensure that graduates of Atlantic Cape are not only prepared for the 21st century workforce but are also active and positive contributors to our society.

During this time period, Dr. Peter Mora retired in December 2016 after 41 years of service at Atlantic Cape, of which almost 12 years he served as President. Subsequently, I was hired as the College’s ninth President arriving in late January 2017.

As the data in this report suggests, Fiscal Year 2017 represented a challenging year due to a continual decline in enrollment leading to a decrease in unrestricted revenue. Demographic changes in Atlantic and Cape May Counties have led to a decline of 18-24 year olds which represents over 90% of our customer base. While the demographic trend is seen across the State and the Country, the recent closing of five casinos has directly impacted our College’s enrollment due to population loss. Other areas that have affected the budget include rising health care costs, negotiated salary increases and a reduction in State aid due to decline of enrollment.

The College has used strategic finance to offset these budget impacts; however, this Spring, the College laid off 21 employees and continued to conservatively replace positions that had become vacant to help close the budget gap. The Board approved a fund balance transfer to balance the Fiscal Year 2017 budget. This fund balance transfer enabled the College to minimize the number of staff layoffs and keep tuition and fees affordable for students.

Construction continues on the new Student Center at the Mays Landing campus, a Blueprint 2020 initiative which is a reflection of the College’s priorities and commitment to student success, recruitment and retention. The facility will house Student Government and clubs, the Honors Program, a Veteran’s Lounge, and labs for supplemental learning in math and English. The Student Center is expected to open for the Spring 2018 term.

A special thanks to the finance department led by Dean Leslie Jamison for all their efforts to ensure the rigorous standards of the CAFR have been met.

Thank you to the County of Atlantic and the County of Cape May for their continued support; and many thanks to the Board of Trustees for their leadership and advocacy. We will continue to work together to meet the needs of our students at all three campuses and continue to provide high quality education at an affordable price as we chart our course for the future.

Sincerely,

Dr. Barbara Gaba President

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December 22, 2017 The Board of Trustees Atlantic Cape Community College Mays Landing, New Jersey We are pleased to provide you with the Comprehensive Annual Financial Report (CAFR) of Atlantic Cape Community College (the College) for the Fiscal Year ended June 30, 2017. The purpose of this report is to provide the Board of Trustees, college staff, citizens, and other interested parties with useful information concerning the College’s operations and financial position. The College’s Finance Office prepared this report. The responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the management of the College. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the College as of June 30, 2017, and for the Fiscal Year then ended. All disclosures necessary to enable the reader to gain an understanding of the College’s financial activities in relation to its mission have been included. The Comprehensive Annual Financial Report is organized in four sections, as follows:

1. The Introductory Section contains the President’s letter, this letter of transmittal with an overview of the College that includes factors affecting the financial condition and required supplementary information, a listing of principal officials, and the organizational chart. This letter of transmittal is designed to complement the Management’s Discussion and Analysis (MD&A) and should be read in conjunction with it.

2. The Financial Section includes the MD&A, the basic financial statements and accompanying notes,

required supplementary information, supplemental financial and management information, as well as the independent auditor’s reports.

3. The Single Audit Section contains the report of the independent auditor’s, the schedules of expenditures of federal awards and state financial assistance and notes to the schedules of expenditures of financial awards.

4. The Statistical Section includes selected unaudited financial and demographic information, generally

presented on a multi-year basis. The organization, form and contents of this report were prepared in accordance with the standards prescribed by the Governmental Accounting Standards Board (GASB), the Government Finance Officers Association of the United States and Canada (GFOA), and the American Institute of Certified Public Accountants. College Information

Atlantic Cape Community College is a two-year publicly supported community college operating under the provisions of N.J.S.A. 18A:64 A1, et seq. In December 1963, the State of New Jersey Department of Education granted approval for the establishment of the College, which became the second community college to be organized by the State on April 14, 1964. The College offers a wide range of programs to meet the needs of the surrounding community. Financial support is received from county and state governments.

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The Board of Trustees of the College voted on August 28, 1998 to approve a resolution authorizing Atlantic Community College to enter into a joint venture college with Cape May County. Officials from the College, Atlantic County and Cape May County signed a contract outlining the terms of the agreement. The New Jersey Legislature approved changes to the New Jersey Community College funding formula. The jointure agreement became effective January 1, 1999, and the College was renamed Atlantic Cape Community College in February 1999. The Counties of Atlantic and Cape May provide support to the College based upon the funding formula specified in the jointure agreement. Atlantic County has eight voting members on the Board of Trustees of the College. Cape May County has four voting members on the Board of Trustees of the College. In addition to these voting members, both counties are represented on the Board of Trustees of the College by the Executive County Superintendent of Schools (Atlantic & Cape May) who is also a voting member. Also, one voting alumnus member from Atlantic or Cape May County is elected for a one-year term by each year’s graduating class. The College President serves as Ex-Officio on the Board of Trustees.

The College serves Atlantic and Cape May counties in southern New Jersey from three campuses. The College’s main campus in Mays Landing is situated on 541 acres in the picturesque New Jersey Pinelands, 15 miles west of Atlantic City's boardwalk and 45 miles from Philadelphia. The Charles D. Worthington Campus in Atlantic City provides a broad range of educational and related services to students, especially those who live and/or work in the Atlantic City area. The College’s Cape May County campus in Cape May Court House uniquely supports students and the business community of Cape May County.

For the Fiscal Year ended June 30, 2017, the College enrolled 8,183 credit students, compared to 8,860 the prior year. The Fall 2016 unduplicated credit student headcount was 5,909. Of these, 94.7% of the students are from either Atlantic or Cape May county. Atlantic Cape Community College accounts for approximately 4% of the 19 New Jersey community college student credit hour enrollments. The College’s Workforce Development and Career Training programs provide students with training and necessary credentials to support business and industry needs. Under these programs, the College enrolled 3,851 students for the Fiscal Year ended June 30, 2017. Of these, 81.5% of the students are from either Atlantic or Cape May county. College Mission The mission of Atlantic Cape Community College is to:

Create opportunity by providing access to excellent programs and services that

successfully meet students’ educational goals

The College offers more than 45 transfer and career degree programs. Students may choose from an Associate in Arts, Associate in Applied Science, Associate in Science, Associate in Fine Arts, industry certifications and continuing education professional development and training services. Nationally recognized programs are the College’s Casino Career Institute and the Academy of Culinary Arts.

The College is accredited by the Middle States Commission on Higher Education (MSCHE). Inquiries may be sent to: Middle States Commission on Higher Education at 3624 Market Street, 2nd Floor West, Philadelphia, PA 19104. Telephone: (267) 284-5000. E-mail: [email protected] Spanish: [email protected] Professional associations have also accredited those professional-technical programs that require approval.

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Long Term Strategic Financial and Operational Planning The College engages in an annual strategic and operational planning cycle that involves all levels of the organization. This planning process provides a framework to advance the College’s mission and goals in order to meet the needs of the students and the community. Financial Information The College maintains its accounts and prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) as set forth by the Governmental and Financial Accounting Standards Boards (GASB and FASB) and the National Association of College and University Business Officers (NACUBO). The College follows GASB Statement No. 35 Basic Financial Statements and Management Discussion and Analysis for Public Colleges and Universities. The financial records are maintained on the accrual basis of accounting whereby all revenues are recorded when earned and all expenses are recorded when a legal obligation to pay exists. The notes to the financial statements expand upon the accounting principles applied. State statutes require an annual audit by an independent certified public accounting firm. The College’s Board of Trustees selected the independent public accountants, Bowman & Company LLP, to audit the College’s financial statements. Their report is included as part of the financial presentation. In accordance with GASB pronouncements, the College’s financial statements include all funds and departments of the College (the primary government) and the Atlantic Cape Community College Foundation, Inc., its component unit. The Foundation is included in the College’s reporting entity because of the significance of their operational and financial relationship with the College. Notes 2 and 22 to the financial statements give further information about the Foundation included in the financial statements. Internal Controls Management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the College are protected from loss, theft, or misuse and to ensure adequate accounting information is available for the preparation of the financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and that the valuation of costs and benefits requires estimates and judgments by management. Budgetary Controls The College maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual budget approved by the College’s Board of Trustees. The budget is prepared on an annual basis as part of the College’s strategic planning process, and the recommended budget parameters are presented to the Budget, Finance and Audit Committee of the Board of Trustees for review. After these parameters are established, the annual budget request is developed and approved by the College Board of Trustees. The Atlantic Cape Community College Board of School Estimate approves the Atlantic and Cape May Counties appropriations.

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Financial Reporting An automated financial record system captures all financial transactions and provides data for the preparation of this CAFR, including the audited financial statements. The CAFR is distributed to the College’s Board of Trustees and executive management, federal and state agencies, and financial institutions as well as others throughout the general public. The Budget, Finance and Audit Committee of the Board of Trustees routinely monitors and reports on revenue collections compared to budget and actual expenses compared to budget, carefully reviewing variances. Internal management reports, customized to meet the information and decision-making needs at all levels of the organization, aid in the management of financial resources. Cash Management The College is governed by New Jersey statute when depositing funds or investing excess funds. The Board of Trustees approves all depositories and investment policies. All excess funds are invested in a prudent, conservative and secure manner with the intent to maximize investment income. Risk Management Comprehensive business insurance is purchased through a cooperative pool. The pool provides its members with property, liability, motor vehicle, and other miscellaneous insurance. The pool is a risk sharing public entity that is both an insured and self-administered group established for the purpose of providing low cost insurance coverage to its members. In addition the College participates in a self-insurance pool for workers’ compensation. Economic Condition and Outlook After a decade of decline, the service area’s employment finally leveled off in 2016. However, the region continues to have one of the nation’s highest residential home foreclosure rates in the country. As a consequence of stability, the unemployment rate has improved from 13.5% in 2012 to 8.0% in 2016 as the employment force has contracted. Population growth rates in both counties continue to be negative as population which peaked in 2013 at 372,016 declined to 365,421 in 2016. The College plays a key role in providing the necessary workforce development and job training offerings to meet the current employment market needs. According to the N.J. Department of Labor and Workforce Development, N.J. can expect a 6.5% increase in employment opportunities by 2024. This rate is expected to be substantially lower in Atlantic (2.6%) and in Cape May (3.4%) counties. Many of the jobs with the greatest projected growth rates in this period are within the health and construction industries. Estimates of projected New Jersey employment by education and training requirements indicate that the occupations with a minimum requirement of an Associate Degree will increase by 9.1% by 2024.

The College is facing challenges influenced by the economic climate of the State and Counties. Although College enrollments reached their highest levels in the spring semester of 2010, with over 7,600 credit students taking courses, enrollment has been declining, following a predicted decline in anticipated high school graduates which began in 2009. Fall semester 2016 saw an 8.5% decrease in overall enrollment compared to the same period in 2015, and Spring semester 2017’s enrollment declined 12% from Spring semester 2016. These enrollment decreases negatively impacted unrestricted revenues.

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In addition to student tuition and fee revenue, the State of New Jersey and Counties of Atlantic and Cape May support the College. The counties have steadily supported the College with operating and capital appropriations. Although the State of New Jersey continues to experience economic constraints, it has maintained the same level of funding to the sector. The College has maintained its 4% share of that overall appropriation. In Fiscal Year 2017 students paid 58.9% toward the cost of education, with the counties funding 22.3% and the State 15.8%. The balance of revenue is provided by investment income and other sources. Operating costs in the areas of health and pension benefits, security, technology and renewal and replacement of facilities continue to escalate. The College is maintaining its program of cost containment, cost avoidance and revenue enhancement efforts, while continuing to operate within its resources. The College is challenged to provide exemplary services and continue its fiduciary responsibility of maintaining facilities with shrinking resources. Major initiatives by the College include addressing deferred maintenance on college campuses. A capital improvement plan supported by Chapter 12 and the “Building Our Futures Act” (state and county support) is ongoing. Student success and career planning centers at the Cape May and Atlantic City campuses were completed in Fiscal Year 2016. Construction of a new student success and career planning center at the Mays Landing campus is scheduled to be complete for Spring 2018. Two major construction projects, the STEM (Science, Technology, Engineering and Math) building on the Mays Landing campus and a hospitality wing on our Worthington Atlantic City campus opened during Fiscal Year 2015. Our ability to service students will be enhanced through our partnership with Rutgers University, who completed construction on a facility on our Mays Landing campus which opened for classes in September, 2012. College administration recognizes the challenges involved in providing the access that our students and community need. It will continue to maintain the balance between affordable tuition and fees while delivering quality services. Acknowledgments The timely preparation of the College’s comprehensive annual financial report was made possible by the dedicated service of the entire staff of the Finance Office. Each member of the department has our sincere appreciation for the contributions made in the preparation of this report. Respectfully submitted,

Leslie A. Jamison Dean of Finance

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ATLANTIC CAPE COMMUNITY COLLEGE (As of June 30, 2017)

BOARD OF TRUSTEES Dave Coskey, Chairperson

Maria K. Mento, Vice Chairperson James B Kennedy, Esq., Treasurer

Alma Albarran-Martinez, Alumni Representative Ellen Byrne, Esq. Christina Clemans

Brian G. Lefke Mary B. Long

Thomas E. Milhous Donald J. Parker

Dr. Richard Stepura, Interim Executive County Superintendant of Schools (Atlantic & Cape May) Maria Ivette Torres Helen W. Walsh

Dr. Barbara Gaba, College President, Ex-Officio Louis J. Greco, Esquire, Board Attorney

Jean McAlister, Board Secretary

ATLANTIC COUNTY EXECUTIVE Dennis Levinson

ATLANTIC COUNTY ADMINISTRATOR

Gerald Del Rosso

ATLANTIC COUNTY BOARD OF CHOSEN FREEHOLDERS

Frank D. Formica, Chairman John Risley, Vice Chairman

James A Bertino John L. Carman

Ernest D. Coursey Richard R. Dase

Amy L. Gatto Maureen Kern

Alexander C. Marino

CAPE MAY COUNTY DIRECTOR of OPERATIONS Michael Laffey

CAPE MAY COUNTY

BOARD OF CHOSEN FREEHOLDERS Gerald M. Thornton, Director

Leonard C. Desiderio, Vice Director E. Marie Hayes

Will Morey Jeffrey L. Pierson

COLLEGE ADMINISTRATION

Dr. Barbara Gaba, President Dr. Richard Perniciaro, Executive Vice President, Institutional Planning and Research and Facilities

Dr. Otto Hernandez, Vice President of Academic Affairs Dr. Mitchell Levy, Vice President of Student Affairs

Eileen Curristine, Dean of Human Resources, Public Safety and Compliance August Daquila Dean of Administration and Business Services

Douglas Hedges, Dean of Information Technology Services Leslie Jamison, Dean of Finance

Jean McAlister, Dean of Resource Development & President/Board Operations Andre Richburg, Dean,of Enrollment Management & College Relations

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College President

Resource Development & President/Board

of Trustees Operations

Planning, Research, Facilities, Executive Support &

WACC Campus

Management

Student Affairs & CMCC

Management

Board of Trustees

Enrollment Management &

College Relations

Academic Affairs

Finance Information Technology

Services

Human Resources, Public Safety and

Compliance

Administration And

Business Services

Office of President/Board of Trustee Services

Resource/Alumni Development

Accounting/ Budgets

Bursar’s Office

Administrative Computing

PC Services & Telephony

College Relations

Admissions & Recruitment

Testing

Financial Aid

WACC Campus

Management

Facilities & Capital Projects

Business Services

Purchasing

Perishable Storeroom

Human Resources

Public Safety

Health Services & Compliance

Counseling and Support Services

Student Development

CMCC Management

Enrollment Services

STEM Programs

Academy of Culinary Arts

Workforce Development

Liberal Studies

Academic Support Services

Career Education

Institutional Research,

Planning & Assessment

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FINANCIAL SECTION

INDEPENDENT AUDITOR’S REPORT Board of Trustees Atlantic Cape Community College Mays Landing, New Jersey 08330 Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities of Atlantic Cape Community College (the “College”), a component unit of the County of Atlantic, State of New Jersey, and its discretely presented component unit (Atlantic Cape Community College Foundation), as of and for the fiscal years ended June 30, 2017 and 2016, and the related notes to the financial statements, which collectively comprise the College's basic financial 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 accordance with 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 financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of the discretely presented component unit, as of and for the fiscal year ended June 30, 2016. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the discretely presented component unit, is based solely on the report of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The financial statements of the College’s discretely presented component unit (Atlantic Cape Community College Foundation) were audited in accordance with auditing standards generally accepted in the United States of America, but were not audited in accordance with Government Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance 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 the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the College’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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Opinions In our opinion, based on our audits and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities of Atlantic Cape Community College and the College’s discretely presented component unit, as of June 30, 2017 and 2016, and the respective changes in financial position and, where applicable, cash flows for the fiscal years then ended in conformity 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 that the management’s discussion and analysis, schedule of the College’s proportionate share of the net pension liability and schedule of College contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the College's basic financial statements. The introductory section, supplemental financial information, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) and State of New Jersey Circular 15-08-OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid, are presented for purposes of additional analysis and are also not a required part of the basic financial statements. The accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance, and supplemental financial information are the responsibility of management and were derived from and relates 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 financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedules of Expenditures of Federal Awards and State Financial Assistance, and supplemental financial information are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

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Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2017, on our consideration of Atlantic Cape Community College’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College's internal control over financial reporting and compliance.

Respectfully submitted,

BOWMAN & COMPANY LLP Certified Public Accountants & Consultants

Woodbury, New Jersey December 22, 2017

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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

INDEPENDENT AUDITOR’S REPORT

Board of TrusteesAtlantic Cape Community CollegeMays Landing, New Jersey 08330

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial statement audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the business-type activities of Atlantic Cape Community College (the “College”), a component unit of the County of Atlantic, State of New Jersey, and its discretely presented component unit (Atlantic Cape Community College Foundation), as of and for the fiscal year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements, and have issued our report thereon dated December 22, 2017. The financial statements of the College’s discretely presented component unit (Atlantic Cape Community College Foundation) were audited in accordance with auditing standards generally accepted in the United States of America, but were not audited in accordance with Government Auditing Standards.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Atlantic Cape CommunityCollege’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control. Accordingly, we do not express an opinion on the effectiveness of Atlantic Cape Community College’s internal control.

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

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

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Compliance and Other Matters

As part of obtaining reasonable assurance about whether Atlantic Cape Community College’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and materialeffect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the College’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.


BOWMAN & COMPANY LLPCertified Public Accountants& Consultants

Woodbury, New JerseyDecember 22, 2017

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ATLANTIC CAPE COMMUNITY COLLEGE MANAGEMENT’S DISCUSSION AND ANALYSIS

(UNAUDITED)

Management’s discussion and analysis of the College’s financial performance during the Fiscal Years ended June 30, 2017 and 2016, as well as Fiscal Year ended June 30, 2015 activity, is presented in this section of the annual financial report. Management prepared this discussion along with the financial statements and the related footnote disclosures, and this discussion should be read in conjunction with and is qualified in its entirety by the financial statements and footnotes. The financial statements, footnotes and this discussion are the responsibility of management. Using This Annual Report These financial statements focus on the College as a whole and are designed to emulate corporate presentation models whereby all College activities are consolidated into one total. The financial statements are prepared using the accrual basis of accounting which recognizes revenues when earned and expenses when incurred. This annual report consists of a series of financial statements prepared in accordance with Statement 35, Basic Financial Statements-and Management’s Discussion and Analysis for Public Colleges and Universities, of the Governmental Accounting Standards Board. The College implemented these reporting standards for the Fiscal Year ended June 30, 2002. The Statement of Net Position presents all of the College’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference reported as net position. The assets and liabilities are reported in order of relative liquidity while net position is categorized as Net Investment in Capital Assets, Restricted, or Unrestricted. Over time, increases or decreases in net position are an indicator of the improvement or erosion of the College’s financial health. The Statement of Revenues, Expenses, and Changes in Net Position focuses on the gross and net costs of College activities occurring during the year, and how these activities are supported. Revenues and expenses are reported as either operating or non-operating. State and county appropriations, federal and state student financial aid, as well as investment activities, are reported as non-operating and denote the dependency the College has on their support. Another way to assess the financial health of an institution is to look at the Statement of Cash Flows. Its primary purpose is to provide relevant information about the cash receipts and cash payments of an entity during a period. The Statement of Cash Flows also helps users assess:

An entity’s ability to generate future net cash flows Its ability to meet its obligations as they come due and Its needs for external financing

The Comprehensive Annual Financial Report (CAFR) is presented in four sections: introductory, financial, single audit and statistical. The introductory section includes the President’s letter, the transmittal letter, the College’s principal officers, and an organizational chart. The financial section includes the reports of the independent auditor’s, management’s discussion and analysis, the basic financial statements, notes to the financial statements, required supplementary information, and supplemental financial and management information. The single audit section contains the report of the independent auditor’s, the schedules of expenditures of federal awards and state financial assistance and notes to the schedules of expenditures of financial awards. The statistical section includes unaudited financial information.

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(UNAUDITED)

Financial Highlights Fiscal Year 2017 Compared to 2016

Cash balances decreased by $4,355,849 during the year ended June 30, 2017, compared to an increase of $253,547 during the year ended June 30, 2016. This decrease in cash is partly due to an increase in federal, state, county and local receivables of $2,338,770 from June 30, 2016 to June 30, 2017. There was a 4.2% decrease in net tuition and fee revenues. Student credit hour enrollments continue a decline which began six years ago. This enrollment decline is partially mitigated by a 3.3% average increase in tuition and fee rates. College-wide, salaries and benefits increased by $1,160,661, or 3.3%. Included in this increase is the effect of GASB 68 adjustments causing an increase of $2,170,944 in benefits. Additions of $2,533,973 in buildings and improvements reflects the completion of major renovations to the existing cafeteria at the Mays Landing campus during the year ended June 30, 2017. Construction in progress additions of $7,202,887 are mainly a result of the construction of a student success and career planning center at the Mays Landing campus scheduled to open for the Spring 2018 semester. These capital projects were supported by State of New Jersey Chapter 12 funding and New Jersey Educational Facilities Authority Building Our Future Bonds matched by Atlantic County funds. The following summary of cash flows for the years ended June 30, 2017, 2016, and 2015 was prepared from the College’s Statement of Cash Flows:

FY2017 FY2016 FY2015Change

FY2016-2017Cash provided (used) by:

Operating activities (30,326,604)$ (29,986,496)$ (31,082,506)$ $ (340,108)Non-capital f inancing activities 28,886,732 30,735,091 32,459,328 (1,848,359)Capital and related f inancing activities (3,016,857) (576,192) 1,376,525 (2,440,665)Investing activities 100,880 81,144 77,724 19,736

Net increase (decrease) in cash (4,355,849) 253,547 2,831,071 (4,609,396)

Cash, beginning of year 17,558,347 17,304,800 14,473,729 253,547

Cash, end of year 13,202,498$ 17,558,347$ 17,304,800$ (4,355,849)$

The College’s net position at June 30, 2017 increased $536,370. The major factor contributing to the increase in Fiscal Year 2017 is additions to net investment in capital assets. The College’s financial position, as a whole, is healthy. However, the College has experienced a downturn in enrollment, and if the trend continues, it will have an effect on future years. Net position increased by 1.0% from the level at the previous year-end. A decrease of 11.0% in expendable restricted net position is primarily attributable to the change in the consent decree restricted net position and a decrease in the amount appropriated for encumbrances. Non-expendable net position increased by 1.2% as the College’s endowments increased by $9,920. An increase of 6.5% in net investment in capital assets is due to capital additions in excess of depreciation expense and retirements. Total unrestricted net position decreased by 15.6%, mainly due to the Fiscal Year 2017 education and general operating margin of $(1,527,781) and the change in pension related items.

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The summary schedule below is prepared from the College’s Statement of Net Position. The schedule displays the change in net position from 2016 to 2017 and 2015 activity.

Assets

FY2017 FY2016 FY2015 Change FY2016-

2017 %

Change

Current assets $ 16,359,474 $ 18,196,611 $ 18,539,624 $ (1,837,137) (10.1)% Noncurrent assets 79,111,128 74,708,021 71,494,519 4,403,107 5.9 %

Total assets 95,470,602 92,904,632 90,034,143 2,565,970 2.8 %

Deferred Outflows of Resources Liabilities

12,702,895

5,612,130

2,170,090

7,090,765

126.3 %

Current liabilities 8,850,552 8,930,813 8,765,397 (80,261) (0.9)% Noncurrent liabilities 45,019,541 34,811,863 31,006,438 10,207,678 29.3 % Total liabilities 53,870,093 43,742,676 39,771,835 10,127,417 23.2 %

Deferred Inflows of Resources

2,299,386

3,306,438

3,557,355

(1,007,052)

(30.5)%

Net Position Unrestricted (Deficit) (27,279,336) (23,603,807) (22,816,930) (3,675,529) (15.6)% Restricted 3,993,994 4,372,942 4,497,483 (378,948) (8.7)% Net investment in

capital assets 75,289,360 70,698,513 67,194,490 4,590,847 6.5 %

Total Net Position $ 52,004,018 $51,467,648 $ 48,875,043 $ 536,370 1.0%

Enrollment College enrollment is comprised of credit and non-credit full-time equated students (FTEs). A full time equated student represents a student or combination of students taking thirty (30) credits per academic year.

FY2017 FY2016 FY2015 Change FY2016-2017

%Change

Credit FTEs 4,068 4,544 4,903 ( 476) (10.5)% Non Credit FTEs 131 196 178 (65) (33.2)% Leased/High School Curriculum

19 23 23 (4) (17.4)%

Total FTEs 4,218 4,763 5,104 (545) (11.4)%

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Revenue The College received its revenue from three main sources: tuition and fees, state aid and county support. Nonoperating revenues include $11.8 million in student financial aid received by the College for participating in the Pell Grant Program. The balance of revenue was received from miscellaneous sources that included grants, investment income, and other income. Tuition Rates The College charged $120.00 per in-county general education student credit hour (SCH) for an average of $1,800 per term during Fiscal Year 2017. In Fiscal Years 2016 and 2015, the tuition charged was $116.00 and $113.00, respectively, per in-county student credit hour. General Fee The College charged $22.00 per student credit hour for an average of $330.00 per term during Fiscal Year 2017. The general fee that was charged during Fiscal Years 2016 and 2015 was $21.30 and $20.60, respectively. In Fiscal Year 2015, the information services fee, previously charged separately, was incorporated into the general fee. The following chart illustrates sources of revenue for the year ended June 30, 2017:

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Fiscal Year 2017 Compared to 2016 From 2016 to 2017, there was a 1.6% decrease in the College’s total revenue from $55.8 million to $54.8 million. Operating revenue decreased by 9.9% or $1.8 million from the level achieved during the previous year. Of that total, net tuition and fee revenue decreased 4.2%, or $546 thousand, mainly attributable to a decline in enrollment. Operating revenues from federal, state and local grants and contracts total $2.9 million. Federal grants and contracts operating revenue decreased 29.6%, or $994 thousand, mainly due to the U.S. Department of Labor’s WIA Dislocated Worker Formula Grants and Trade Adjustment Assistance Community College Career and Training Program grant which took place in Fiscal Year 2016. Other state and local grants and contracts decreased by 45.2%, or $340 thousand, primarily due to the workforce training grants and contracts which took place in Fiscal Year 2016. Net nonoperating revenues decreased by 4.5%, or $1.4 million. The Atlantic and Cape May Counties appropriation to the College increased $23 thousand, or .3%. The State of New Jersey appropriation for operating costs decreased by 1.9%, or $106 thousand. Federal student financial aid, such as PELL and SEOG, decreased 10.2%, or $1.4 million. State student financial aid (excluding loans) decreased by 7.2% or $154 thousand. Charitable contributions increased 46.1%, or $185 thousand. Investment revenue increased 24.3%, or $20 thousand. Capital appropriations increased by $2.0 million, or 27.8%, largely attributable to major renovations to the cafeteria on the Mays Landing campus which were completed in Fiscal Year 2017. Capital appropriations reflects the support by federal, state and county agencies for the College’s master facilities plan. Expenses The following chart illustrates the relative size of operating expenses for the year ended June 30, 2017:

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The College engages in an annual strategic and operational planning cycle that involves all levels of the organization. This planning process provides a framework to advance the College’s mission and goals in order to meet the needs of the students and the community. The schedule below lists the College’s strategic goals for 2017-2021, and the current unrestricted fund budgeted and expended amounts for the Fiscal Year ended June 30, 2017:

The following chart illustrates the relative size of current unrestricted fund operating expenses for the year ended June 30, 2017 by strategic goal:

FY2017 Revised FY2017 ExpendedBudget Amount Amount

Goal 1 1,516,208$ 1,513,325$ Connect and engage students with opportunities to be successful.

Goal 2 4,886,517 4,876,895 Assist students in creating and fulfilling their academic and career Plan.

Goal 3 16,935,401 16,760,886 Increase the number of students who successfullyComplete their educational goals.

Goal 4 16,247,458 16,159,732 Lead the institution to excellence through continuous improvement and the effective and efficient use of resources to maximize student success.

39,585,584$ 39,310,838$

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Fiscal Year 2017 Compared to 2016 Operating expenses increased by 1.7% or $921 thousand over the prior year. Overall, salaries of $23.9 million decreased by 3.8% or $949 thousand, and fringe benefits of $12.0 million increased 21.4%, or $2.1 million. Included in this increase is the effect of GASB 68 adjustments causing an increase of $2.2 million in benefits. The College’s cost for medical benefits is offset by employee contributions which began on July 1, 2010. A comparison of operating expenses for the years ended June 30, 2017, 2016 and 2015 is illustrated in the following graph:

Operating Results The following summary of operating results displays the change from 2016 to 2017 and 2015 activity and was prepared from the College’s Statement of Revenues, Expenses, and Changes in Net Position:

ChangeFY2017 FY2016 FY2015 FY2016-2017

Total Operating Revenue 16,192,000$ 17,965,138$ 16,666,193$ (1,773,138)$

Total Operating Expenses 53,982,853 53,061,643 51,727,500 921,210

Operating Loss (37,790,853) (35,096,505) (35,061,307) 2,694,348

Net Nonoperating Revenue 29,047,483 30,426,056 32,334,250 (1,378,573)

Loss Before NetOther Revenues (8,743,370) (4,670,449) (2,727,057) 4,072,921

Capital Appropriation 9,269,879 7,254,485 8,502,101 2,015,394

Additions to Permanent Endowments 9,861 8,569 9,654 1,292

Increase in Net Position 536,370 2,592,605 5,784,698 (2,056,235)$

Net Position, Beginning of Year 51,467,648 48,875,043 43,090,345

Net Position, End of Year 52,004,018$ 51,467,648$ 48,875,043$

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Fiscal Year 2017 Budget to Actual Comparison Comparing the total original budget to actual activity for the current unrestricted fund, the College earned 95.7% of original budgeted revenues and expended 96.8% of original budgeted expenditures. Encumbrances at June 30, 2017, subject to automatic re-appropriation in FY2018, totaled $89,878. The summary schedule below is prepared from the College’s Supplemental Financial Information, Budget Comparison to Actual for the Fiscal Year ended June 30, 2017.

Original Adjusted Actual Variance fromBudget Revised Budget Activity Original Budget

over (under)Total Education and General

Income 38,875,106$ 37,228,924$ 37,205,184$ (1,669,922)$ ABP Reimbursement 600,000 570,000 577,873 (22,127) Adjusted Education and General

Income 39,475,106 37,798,924 37,783,057 (1,692,049) Total Education and General

Expenditures 40,600,000 39,585,584 39,310,838 (1,289,162)

Education and General Operating Margin (1,124,894)$ (1,786,660)$ (1,527,781)$ (402,887)$

The variance in revenues was $(1,692,049). This negative variance resulted primarily from less credit tuition and student fees realized than budgeted due to the decline in enrollment and from a shortfall of continuing education revenues. These budget shortfalls were partially offset by higher than budgeted interest income, costs recovered and other revenue. The original revenue budget was based on an average decrease of 5% from the prior year projected student credit hour enrollments. Actual enrollments of 122,048 student credit hours (excluding dual enrollment) were 10.5% less than the prior year, and under budget projections by 6.4%. Savings in actual salaries and benefits expenditures from the original budgeted amount total $906,177 and are reflected in the total education and general expenditures original budget variance of $(1,289,162). The savings are primarily an outcome of cost containment strategies used by management and lower adjunct and overload costs resulting from the decline in enrollment. The educational and general operating margin for Fiscal Year 2017 was $(1,527,781), and an additional $89,878 was appropriated for encumbrances carried forward to Fiscal Year 2018. Student activities resulted in net funds used of $1,228. A fund balance transfer during Fiscal Year 2017 was approved by Board Resolution for a content management system totaling $80,000. The adjusted net operating margin was $(1,608,790). Facilities Expansion Plans Two major construction projects, the STEM (Science, Technology, Engineering and Math) building on the Mays Landing campus and a hospitality wing on our Worthington Atlantic City campus opened during Fiscal Year 2015. These projects were funded by federal US EDA, State of New Jersey Chapter 12, CRDA, and College funds, with matching funds from Atlantic County.

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The State of New Jersey authorized a 2007 allocation totaling $6,244,000 of Chapter 12 funds (Public Law 1971) to renovate facilities at the college’s Worthington Atlantic City and Mays Landing campuses. Atlantic County issued bonds to fund the construction, and the State shared the debt service equally with the County. A 2008 allocation of $9,009,000 is designated for deferred maintenance and capital improvements and new construction based on master plan priorities. A 2010 allocation of $2,352,750 bonded by Atlantic County in November, 2011 is designated for the STEM building. A 2012 allocation of $8,500,000 and 2013 allocation of $1,500,000 supported campus renovations, including repurposing Building A, academic classrooms. A 2014 allocation of $4,200,000 will support the construction of a Student Success/ Career and Planning Center. A 2015 allocation of $3,200,000 is designated for academic, lab and office renovations at the Mays Landing campus, fire suppression and plumbing upgrades, as well as exterior upgrades to the Worthington Atlantic City Campus. A 2016 allocation of $3,000,000 is designated for the Student Success/ Career and Planning Center on the Mays Landing campus. In Fiscal Year 2014, the State of New Jersey, Secretary of Higher Education awarded the College four Building Our Future Bond Act grants totaling $6,841,115, with Atlantic and Cape May Counties providing 25% in matching funds for each county’s share, providing an additional amount of $2,280,372. The Building Our Future Bond Act provides funds for the construction of higher education buildings, the expansion of additional facilities, and the acquisition and installation of additional and upgraded equipment for the purpose of increasing academic capacity. The College is using the funds for renovations of existing academic buildings, the construction of a Student Success/ Career and Planning Center on the Mays Landing campus, and the renovation of space to create Student Success/ Career and Planning Centers at the Worthington Atlantic City and Cape May County campuses. In Fiscal Year 2014, the College entered into a $803,542 lease agreement with the New Jersey Educational Facilities Authority for the State of New Jersey’s Higher Education Equipment Leasing Fund Program for the purpose of providing educational equipment. The lease agreement requires that the College pay 25% of the debt service of which Atlantic and Cape May counties will provide the funds proportionately. Capital asset activity for the Fiscal Year ended June 30, 2017 was as follows:

Beginning Ending Balance Additions Retirements Balance

Land $2,370,097 $ - $ - $ 2,370,097

Construction in Progress 1,656,439

7,202,887 (968,854) 7,890,472

Land Improvements 2,391,004 - - 2,391,004

Infrastructure 224,847 487,086 - 711,933

Buildings and Improvements 96,391,722 2,533,973 - 98,925,695

Furniture and Equipment 12,890,614 294,844 (311,868) 12,873,590

Library Collection 1,359,467 13,557 (120,703) 1,252,321

Other Improvements 9,600 - - 9,600

Leasehold Improvements 121,295 - - 121,295

Other Assets 3,120,132 64,996 - 3,185,128

Total 120,535,217 10,597,343 (1,401,425) 129,731,135 Less Accumulated Depreciation

and Amortization (49,836,704) (5,028,518) 423,447 (54,441,775)

Capital Assets, Net $70,698,513 $ 5,568,825 $(977,978) $75,289,360

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Economic Factors That Affect The Future Although the College’s financial position is currently healthy, the economic position of the College is closely tied to that of the State of New Jersey and the Counties of Atlantic and Cape May. The College’s state and county appropriations and many state and local grants and contracts are influenced by the economic climate of the state and counties. Other factors that affect college tuition and fee revenues include population growth rate, unemployment rate, and the number of high school graduates in Atlantic and Cape May counties. The performance of the regional economy, especially Atlantic County, continues to lag behind that of both the nation and state as the employment loss due to the closing of five casino hotels from 2014 to 2016 which resulted in the loss of over 20,000 employees. The employment decline continued through 2015 with a leveling off in 2016. Without the needed employment growth, many residents in the labor force have moved from the region. While this has moderated the unemployment rate, it has also resulted in a decline of overall school enrollments over the entire ten-year period and an aging of the population in general. With the expansion of the capacity of the region’s four-year institution, the competition for college students has resulted in enrollment declines. These trends in the college’s service area indicate that enrollment pressures will be negative to neutral for the near term. As the region attempts to grow its economic base, declines should moderate. Salaries and benefits account for 81.4% of the College’s unrestricted operating expenses. The College’s four bargaining agreements were renegotiated in Fiscal Year 2015 for the period July 1, 2014 to June 30, 2018. This report reflects negotiated increases for Fiscal Year 2017. Health benefit costs continue to rise. Beginning in Fiscal Year 2011, all covered full-time employee salaries began to contribute to health benefits costs. Their contributions totaled $1.0 million in 2017. Utilities and telephone expenses amounted to $1.6 million, or 4% of total unrestricted expenses. As new buildings in the master plan are completed, facilities costs will increase. This increase will be partially offset by expected savings on electricity costs from the solar projects on the Mays Landing and Cape May campuses. The cost of technology continues to grow and, in order to offer exemplary programs, the College must continue to provide instruction, support, and maintenance at a cost of $2.7 million annually. This includes costs to support the College’s Colleague management information system on which implementation was completed in 2011.

Planning for the maintenance of aging facilities and identifying the funding sources required is ongoing. The College currently relies heavily on Chapter 12 funding supported by the counties and state. Most of the College’s equipment needs are currently funded through grants from various agencies and equipment leasing fund programs made available through the State. Funds from the college’s facilities fee, which is charged on a per student credit hour basis, are dedicated to deferred maintenance. It should be noted that the Board of Trustees has recognized $21.8 million needed for capital projects identified in the College’s facilities master plan. Contacting the College’s Financial Management This financial report is designed to provide readers with a general overview of Atlantic Cape Community College’s finances and to demonstrate the College’s accountability for the resources it receives. Questions concerning this report or requests for additional financial information should be directed to Leslie A. Jamison, Dean of Finance, 5100 Black Horse Pike, Mays Landing, N.J. 08330.

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Component Component College Unit College Unit

ASSETSCurrent assets: Cash and cash equivalents 9,380,730$ 357,848$ 13,548,839$ 285,038$ Security deposits 1,414 2,309 Investments 1,262,868 1,001,433 Accounts receivable: Students, net of allowance of $1,061,260 and $1,131,983 respectively 987,895 885,836 Federal, state, county, local 5,331,872 2,993,102 Other 115,321 8,100 50,328 1,990 Pledges receivable 113,065 82,641 Inventories 95,932 96,414 Prepaid expenses 426,160 5,289 569,683 9,601 Other 20,150 50,100

Total current assets 16,359,474 1,747,170 18,196,611 1,380,703

Noncurrent assets: Restricted cash and cash equivalents 3,821,768 4,009,508 Restricted investments 2,944,229 2,843,288 Capital assets, non-depreciable (Note 16) 10,260,569 4,026,536 Capital assets, net of accumulated depreciation of $54,441,775 and $49,836,704 respectively (Note 16) 65,028,791 66,671,977

Total noncurrent assets 79,111,128 2,944,229 74,708,021 2,843,288

Total assets 95,470,602 4,691,399 92,904,632 4,223,991

DEFERRED OUTFLOWS OF RESOURCES Related to pensions (Note 14) 12,702,895 5,612,130

LIABILITIESCurrent liabilities: Accounts payable and accrued liabilities 6,424,536 619,607 6,383,515 481,574 Unearned revenue 2,079,516 48,026 2,293,055 26,292 Current portion: Deposits 7,064 8,720 Compensated absences 314,430 220,518 Equipment leasing fund 25,006 25,005

Total current liabilities 8,850,552 667,633 8,930,813 507,866Noncurrent liabilities: Deposits 168,135 94,243 Compensated absences 1,562,763 1,672,733 Equipment leasing fund 124,980 149,985 Net pension liability (Note 14) 43,163,663 32,894,902

Total noncurrent liabilities 45,019,541 - 34,811,863 - Total liabilities 53,870,093 667,633 43,742,676 507,866

DEFERRED INFLOWS OF RESOURCES Related to pensions (Note 14) 2,299,386 3,306,438

NET POSITIONNet Investment in capital assets 75,289,360 70,698,513 Restricted for: Nonexpendable: Scholarships and fellowships 835,685 2,976,086 825,765 2,901,507 Expendable 3,158,309 646,834 3,547,177 463,300Unrestricted (Deficit) (27,279,336) 400,846 (23,603,807) 351,318

Total net position 52,004,018$ 4,023,766$ 51,467,648$ 3,716,125$

ATLANTIC CAPE COMMUNITY COLLEGESTATEMENTS OF NET POSITION

AS OF JUNE 30, 2017 and 2016

2017 2016

The accompanying notes are an integral part of the financial statements

Page 24

Component Component College Unit College Unit

REVENUESOperating Revenues: Student tuition and fees (including chargebacks and net of allowances of $11,193,510 and 12,464,026$ 13,010,267$

$11,810,732 respectively) Gifts and contributions 875,243$ 661,900$ Federal grants and contracts 2,367,206 3,361,387 State and local grants and contracts 411,831 751,873 Nongovernmental grants and contracts 127,445 123,422 Sales and services of educational departments 67,627 75,981 Other operating revenues 626,157 501,552 501 Auxillary enterprises - student activities 127,708 140,656

Total operating revenues 16,192,000 875,243 17,965,138 662,401EXPENSESOperating Expenses: Instructional 13,976,029 14,708,794 Public service 733,581 845,480 Academic support 4,689,638 4,979,425 Student services 5,565,654 5,199,629 Institutional support 12,196,379 323,167 10,241,084 208,591 Operations and maintenance of plant 7,182,560 6,999,871 Scholarship and student aid 4,481,558 650,822 5,262,088 441,359 Depreciation and amortization 5,028,518 4,662,374 Auxillary enterprises - student activities 128,936 162,898

Total operating expenses 53,982,853 973,989 53,061,643 649,950 Total operating income (loss) (37,790,853) (98,746) (35,096,505) 12,451

NONOPERATING REVENUES (EXPENSES)State appropriations 5,396,752 5,502,421State appropriations - alternate benefit program 577,873 624,119County appropriations 8,431,319 8,408,622Federal student financial aid 12,001,269 13,359,985State student financial aid 1,990,726 2,144,892Gifts 586,768 401,750Investment income 100,880 331,809 81,144 (69,279)Insurance proceeds 291,976 2,680Repairs funded by capital appropriations

and insurance proceeds (332,144) (109,865)Gain on equipment disposals 2,064 10,308

Net nonoperating revenues (expenses) 29,047,483 331,809 30,426,056 (69,279)

Income (loss) before net other revenues (8,743,370) 233,063 (4,670,449) (56,828)

OTHER REVENUESCapital appropriations 9,269,879 7,254,485Additions to permanent endowments 9,861 74,579 8,569 23,636

Total other revenues 9,279,740 74,579 7,263,054 23,636 Changes in net position 536,370 307,642 2,592,605 (33,192)

NET POSITIONNet position - beginning of year 51,467,648 3,716,125 48,875,043 3,749,317Net position - end of year 52,004,018$ 4,023,767$ 51,467,648$ 3,716,125$

ATLANTIC CAPE COMMUNITY COLLEGESTATEMENTS OF REVENUES, EXPENSES AND

CHANGES IN NET POSITIONFOR THE FISCAL YEARS ENDED JUNE 30, 2017 and 2016

2017 2016


Page 25

2017 2016CASH FLOWS FROM OPERATING ACTIVITIES Tuition and fees (including chargebacks) 11,391,311$ 12,372,787$ Grants and contracts 2,863,538 3,705,651 Payments to suppliers (18,023,496) (18,135,765) Payments to employees (23,990,575) (24,754,770) Payments for scholarships and student aid (3,510,002) (4,523,411) Other receipts 942,620 1,349,012

Net cash used in operating activities (30,326,604) (29,986,496)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State appropriations 5,976,895 6,244,209 County appropriations 8,431,447 8,408,708 Noncapital grants received - student financial aid 13,891,622 15,633,941 Gifts and grants received for other than capital purposes 586,768 448,233

Net cash provided by noncapital financing activities 28,886,732 30,735,091

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital appropriations 6,695,167 7,678,512 Proceeds from sale of capital assets 11,187 17,918 Insurance proceeds 227,560 2,680 Payments to suppliers (332,144) (109,865) Purchase of capital assets (2,425,601) (7,066,341) Construction in progress (7,202,887) (1,107,665) Private gifts for endowment purposes 9,861 8,569

Net cash used in capital and related financing activities (3,016,857) (576,192)

CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 100,880 81,144

Net cash provided by investing activities 100,880 81,144

Net increase (decrease) in cash (4,355,849) 253,547

Cash - beginning of year 17,558,347 17,304,800Cash - end of year 13,202,498$ 17,558,347$

RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE COMPARATIVE STATEMENTS OF NET POSITION:

Unrestricted Current 9,380,730$ 13,548,839$ Restricted Noncurrent 3,821,768 4,009,508

13,202,498$ 17,558,347$

ATLANTIC CAPE COMMUNITY COLLEGESTATEMENTS OF CASH FLOWS

(COLLEGE ONLY)FOR THE FISCAL YEARS ENDED JUNE 30, 2017 and 2016


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RECONCILIATION OF NET OPERATING REVENUES (EXPENSES) TO NET CASH USED IN OPERATING ACTIVITIES: Operating loss (37,790,853)$ (35,096,505)$ Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation expense 5,028,518 4,662,374Pension expense 3,484,051 1,549,505Noncash Student awards -textbook scholarships 29,700 8,900

Change in assets and liabilitiesStudent accounts receivable (102,059) 84,073

Federal, state, county and local receivables 125,194 234,514Other accounts receivable (577) (11,205)Inventories 482 (13,204)Prepaid expenses 143,523 (556)Other assets 4,015 3,085

Accounts payable and accrued liabilities 220,888 63,987Deposits 72,236 (81,756)Deferred revenue (213,539) (142,528)Deferred outflow of resources - related to pensions: Contributions made after the measurement date (1,313,107) (1,294,723)Compensated absences (16,058) 47,688Other liabilities 982 (145)

Net cash used in operating activities (30,326,604)$ (29,986,496)$

NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Donated textbook vouchers -$ 50,000$

(CONTINUED)

ATLANTIC CAPE COMMUNITY COLLEGESTATEMENTS OF CASH FLOWS

FOR THE FISCAL YEARS ENDED JUNE 30, 2017 and 2016 (COLLEGE ONLY)


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ATLANTIC CAPE COMMUNITY COLLEGE NOTES TO FINANCIAL STATEMENTS

FOR THE FISCAL YEARS ENDED JUNE 30, 2017 and 2016

NOTE 1: ORGANIZATION Atlantic Cape Community College (the College) is a two-year publicly supported community college operating under the provisions of N.J.S.A. 18A:64 A1, et seq. The College, which is located in Atlantic and Cape May Counties, New Jersey, offers a wide range of programs to meet the needs of the surrounding community. Financial support is received from county and state governments. The Board of Trustees of the College voted on August 28, 1998 to approve a resolution authorizing Atlantic Community College to enter into a joint venture college with Cape May County. Officials from the College, Atlantic County and Cape May County signed a contract outlining the terms of the agreement. The New Jersey Legislature approved changes to the New Jersey Community College funding formula. The jointure agreement became effective January 1, 1999. The Counties of Atlantic and Cape May provide support to the College based upon the funding formula specified in the jointure agreement. Atlantic County has eight voting members on the Board of Trustees of the College. Cape May County has four voting members on the Board of Trustees of the College. In addition to these voting members, both counties are represented on the Board of Trustees of the College by the Executive County Superintendent of Schools (Atlantic & Cape May) who is also a voting member. Also, one voting alumnus member from Atlantic or Cape May County is elected for a one-year term by each year’s graduating class. The College President serves as Ex-Officio on the Board of Trustees. Atlantic Cape Community College is a component unit of the County of Atlantic as described in Governmental Accounting Standards Board Statement No. 14 – The Financial Reporting Entity. These financial statements would be either blended or discretely presented as part of the County’s financial statements if the County prepared its financial statements in accordance with GASB Statement No. 34 – Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments. The County of Atlantic currently follows a basis of accounting and reporting model prescribed by the State of New Jersey, Department of Community Affairs, Division of Local Government Services. Therefore, the financial statements of the College are not presented with the County of Atlantic. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Component Units In evaluating how to define the College for financial reporting purposes, management has considered all potential component units. The decision to include any potential component units in the financial reporting entity was made by applying the criteria set forth in GASB Statements No. 14, The Financial Reporting Entity, as amended by GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, and GASB Statement No. 61, The Financial Reporting Entity: Omnibus – an amendment of GASB Statements No. 14 and No. 34, and GASB Statement No. 80, Blending Requirements for Certain Component Units – an amendment of GASB Statement No. 14. Blended component units, although legally separate entities, are in-substance part of the government’s operations. Each Discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the government. The basic-but not the only-criterion for including a potential component unit within the reporting entity is the governing body’s ability to exercise oversight responsibility. The most significant manifestation of this ability is financial interdependency. Other manifestations of the ability to exercise oversight responsibility include, but are not limited to, the selection of governing authority, the designation of management, the ability to significantly influence operations, and accountability for fiscal matters. A second criterion used in evaluating potential component units is the scope of public service. Application of this criterion involves considering whether the activity benefits the government and / or its citizens.

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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Component Units (Continued) A third criterion used to evaluate potential component units for inclusion or exclusion from the reporting entity is the existence of special financing relationships, regardless of whether the government is able to exercise oversight responsibilities. Finally, the nature and significance of a potential component unit to the primary government could warrant its inclusion within the reporting entity. Based upon the application of these criteria, the College has determined that Atlantic Cape Community College Foundation, Inc. (the Foundation) meets the requirement for discrete presentation in the financial statements of the College. In accordance with GASB Statements No. 34 and No. 35, certain presentation adjustments to the financial statements of the Foundation were required to conform to the classification and display requirements in the aforementioned GASB Statements, as applicable to the College. The Foundation is a legally separate, tax-exempt entity, and acts primarily as a fund-raising organization to provide funding and support to Atlantic Cape Community College, its students and educational endeavors, through special event fund-raising and community philanthropy. Although the College does not control the timing or amount of receipts from the Foundation, the majority of resources, or income thereon, which the Foundation holds and invests, is restricted to the activities of the College by the donors. During the fiscal years ended June 30, 2017 and 2016, the College received payments of $583,664 and $445,466 from the Foundation for scholarships, other contributions and capital asset donations. Complete financial statements for the Foundation can be obtained from the Foundation Office at 5100 Black Horse Pike, Mays Landing, NJ 08330. Basis of Accounting The College prepares its financial statements in conformity with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB), including GASB Statement No. 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 Public Colleges and Universities, and the National Association of College and University Business Officers (NACUBO). The College follows the “business-type activities” reporting requirements of GASB Statement Nos. 34 and 35 for financial reporting purposes. Such financial statements are prepared on the accrual basis. The Foundation reports as a not-for-profit organization under Financial Accounting Standards Board (FASB) standards. As a result, certain revenue recognition criteria and presentation features are different from GASB revenue recognition and presentation features. Fund Accounting In order to ensure observance of limitations and restrictions placed on the use of resources available to the College, the accounts of the College are maintained in accordance with the principles of “fund accounting”. The procedure of fund accounting is one by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund. However, in the accompanying financial statements, all funds are combined for an entity-wide presentation to meet the financial reporting requirements under accounting principles generally accepted in the United States of America as promulgated by GASB.

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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Contributions Contributions, including unconditional promises to give, are recognized as revenues in the period received. Conditional promises to give are not recognized until they become unconditional, that is, when the conditions on which they depend are substantially met. Contributions of assets other than cash are recorded at their estimated fair value. Contributions to be received after one year are discounted at an appropriate discount rate commensurate with the risks involved. Amortization of discount is recorded as additional contribution revenue in accordance with donor-imposed restrictions, if any, on the contributions. An allowance for uncollectible contributions receivable is provided based upon management’s judgment including such factors as prior collection history, type of contribution and nature of fund-raising activity. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents includes petty cash, amounts in deposits, and short-term investments with original maturities of three months or less. Certificates of deposit that have original maturity dates of more than three months but less than twelve months from the date of purchase are classified as investments. Cash in excess of daily requirements is invested in short-term marketable securities consisting of commercial paper, certificates of deposit and U.S. Treasury obligations. Such investments with maturities of three months or less are deemed to be cash equivalents for the purpose of the College’s financial statement presentation. Cash is categorized as restricted in compliance with purpose restrictions, such as endowment provisions, Board of Trustee funds designations, or federal, state, or other external agency requirements. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. GASB 40 requires that disclosure be made as to the credit rating of all fixed income securities except obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government. The cash management fund is unrated. New Jersey statutes require that county colleges deposit public funds in public depositories located in New Jersey that are insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or by any other agency of the United States that insures deposits made in public depositories. County colleges are also permitted to deposit public funds in the State of New Jersey Cash Management Fund. New Jersey statutes require public depositories to maintain collateral for deposits of public funds that exceed depository insurance limits as follows:

The market value of the collateral must be equal to at least 5% of the average daily balance of collected public funds on deposit.

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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Credit Risk (Continued)

In addition to the above collateral requirements, if the public funds deposited exceed 75% of the capital funds of the depository, the depository must provide collateral having a market value at least equal to 100% of the amount exceeding 75%.

All collateral must be deposited with the Federal Reserve Bank of New York, the Federal Reserve Bank of Philadelphia, the Federal Home Loan Bank of New York, or a banking institution that is a member of the Federal Reserve System and has capital funds of not less than $25,000,000.

Accounts Receivable Accounts receivable consists of tuition and fees charged to students and various other receivables. Accounts receivable are recorded net of estimated uncollectible amounts. Revenues are charged and an allowance is credited with a provision for uncollectible accounts based on experience and on any unusual circumstances that may affect the ability of students or student sponsors to meet their obligations. It is the College policy to write off uncollectible accounts after two years of delinquency. Accounts deemed uncollectible are charged against this allowance. Accounts receivable are reported net of an accumulated allowance of $1,061,260 and $1,131,983 as of June 30, 2017 and 2016, respectively. Tuition Each year the Board of Trustees sets tuition and fee rates based on a per credit hour rate. Rates vary based upon residence within Atlantic and Cape May Counties, out of county, out of state and international students. Inventory Inventory is valued at cost, with cost being determined on a first-in, first-out basis. Prepaid Expenses Prepaid expenses represent payments made to vendors for services that will benefit periods beyond June 30, 2017. Capital Assets Capital assets include land, building and improvements, equipment and infrastructure assets, such as sewer. Capital assets are defined by the College as assets with an initial unit cost of $2,500 or more, or, an aggregate purchase greater than $15,000. The costs of normal maintenance and repairs that do not add value to the asset are not capitalized. Major outlays for capital assets are capitalized as projects are constructed. Such assets are recorded at historical cost and net of accumulated depreciation and amortization of $54,441,775 and $49,836,704 for the years ended June 30, 2017 and 2016, respectively. Non-Current Liabilities Non-current liabilities include (1) principal amounts of equipment leasing obligations with contractual maturities greater than one year; (2) estimated amounts for accrued compensated absences and other liabilities that will not be paid within the next fiscal year.

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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) On-Behalf Payments for Pension Contributions In fiscal year 1997, the College adopted the requirements of Governmental Accounting Standards Board (GASB) Statement No. 24 – Accounting and Financial Reporting for Certain Grants and Other Financial Assistance. GASB Statement No. 24 recommends that revenue and expenditures be recorded in the financial statements for the State of New Jersey Pension payments for the Alternate Benefit Program (ABP). Depreciation and Amortization Depreciation has been applied using the straight-line method, with the half-year convention, over the following useful lives: Buildings and improvements 40 years Infrastructure 40 years Improvements (acquired after June 30, 2005) 15 years Other improvements (acquired after June 30, 2006) 25 years Small building 20 years Equipment and furnishings 10 years Vehicles 7 years Library books and audiovisual equipment 7 years Computer equipment (acquired after June 30, 2001) 5 years Amortization has been applied over the term of the applicable lease as follows: Leasehold improvements 2.5 to 5 years Other assets 5 to 20 years Depreciation and amortization expense amounted to $5,028,518 and $4,662,374 for the years ended June 30, 2017 and 2016, respectively. Classification of Revenue The College has classified its revenues as either operating or non-operating revenues in accordance with GASB Statement No. 33 – Accounting and Financial Reporting for non-exchange Transactions. Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship discounts and allowances, (2) sales and services of auxiliary enterprises, net of scholarship discounts and allowances and (3) most federal and state grants and contracts as well as federal appropriations. Non-operating revenues include activities that have the characteristics of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as non-operating revenues by GASB Statement No. 9 – Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting and GASB No. 35, such as state appropriations and investment income. Unearned Revenue Unearned revenue represents tuition revenue that has been received on or before June 30, 2017 for classes that are scheduled in Summer and Fall 2017. It may also include cash which has been received for grants and/ or commissions but not yet earned. Enrollment from an academic term (for example, summer session) which is conducted over a fiscal year end, is reported totally within the fiscal year in which the term is predominantly conducted. The first Summer 2017 session began May 22, 2017.

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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Scholarship Discounts and Allowances Student tuition and fee revenues are reported net of scholarship discount and allowances in the statement of revenues, expenses and changes in net position. Scholarship discount and allowances are the difference between the stated charge for goods and services provided by the College, and the amount that is paid by students and/or third parties making payments on the students’ behalf. Certain government grants, such as Pell grants, as well as other federal grants and state grants are recorded as either operating or non-operating revenue in the College’s financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees, the College has recorded a scholarship discount and allowance. The amount of scholarship discount and allowances for the fiscal years ended June 30, 2017 and 2016 was $11,193,510 and $11,810,732, respectively. Federal Financial Assistance Programs The College participates in the following federally funded financial assistance programs: Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study Grants and Federal Direct Loan Programs (FDLP). Federal programs are audited in accordance with the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Income Taxes The College is a political subdivision of the State of New Jersey and is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended. Deferred Outflows and Deferred Inflows of Resources The statement of net position reports separate sections for deferred outflows of resources and deferred inflows of resources. Deferred outflows of resources, reported after total assets, represents a reduction of net position that applies to a future period(s) and will be recognized as an outflow of resources (expense) at that time. Deferred inflows of resources, reported after total liabilities, represents an acquisition of net position that applies to a future period(s) and will be recognized as an inflow of resources (revenue) at that time. Transactions are classified as deferred outflows of resources and deferred inflows of resources only when specifically prescribed by the Governmental Accounting Standards Board (GASB) standards. The College is required to report the following as deferred outflows of resources and deferred inflows of resources:

Defined Benefit Pension Plans - The difference between expected (actuarial) and actual experience, changes in actuarial assumptions, net difference between projected (actuarial) and actual earnings on pension plan investments, changes in the College’s proportion of expenses and liabilities to the pension as a whole, differences between the College’s pension contribution and its proportionate share of contributions, and the College’s pension contributions subsequent to the pension valuation measurement date.

Compensated Absences Compensated absences are those absences for which employees will be paid for vacation and sick leave when used. A liability is accrued for compensated absences that are earned and unused in accordance with College policy at June 30th of each fiscal year.

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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Public Employees' Retirement System (“PERS”) and additions to/deductions from PERS’s fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Net Position The College’s net position is classified as follows:

Net Investment in Capital Assets represents the College’s total investment in capital assets, net of accumulated depreciation. Restricted for Nonexpendable Net Position include resources in which the College is prohibited from expending the principal portion of the funds and is legally or contractually obligated to spend the interest earnings in accordance with restrictions imposed by external third parties. Restricted for Expendable Net Position include resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties. Unrestricted Net Position represent resources derived from student tuition and fees, state and county appropriations and sales and services of educational departments or auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the College and may be used at the discretion of the Board to meet current expenses for any purposes. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.

The College’s policy is to first utilize available restricted expendable, and then unrestricted, resources in the conduct of its operations. Impact of Recently Issued Accounting Principles

Recently Issued and Adopted Accounting Pronouncements

The College implemented the following GASB Statements for the fiscal year ended June 30, 2017:

Statement No. 80, Blending Requirements for Certain Component Units an amendment of GASB Statement No. 14. This Statement amends the blending requirements for the financial statement presentation of component units of all state and local governments. The additional criterion requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. The additional criterion does not apply to component units included in the financial reporting entity pursuant to the provisions of Statement No. 39, Determining Whether Certain Organizations Are Component Units. The adoption of this Statement had no impact on the basic financial statements of the College.

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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Impact of Recently Issued Accounting Principles (Continued)

Recently Issued and Adopted Accounting Pronouncements (Continued)

Statement No. 82, Pension Issues and amendment of GASB Statements No. 67, No. 68, and No. 73. This Statement addresses issues regarding (1) the presentation of payroll-related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. The adoption of this Statement did not have a significant impact on the basic financial statements of the College.

Recently Issued Accounting Pronouncements

The GASB has issued the following Statements that will become effective for the College for the fiscal year ending June 30, 2018:

Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). It also improves information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. The Statement will become effective for the College in fiscal year 2018. Management has not yet determined the impact of this Statement on the basic financial statements of the College.

Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current year financial statements.

NOTE 3: SUPPORT OF THE COLLEGE State Aid The New Jersey Department of Treasury, Office of Management and Budget (OMB) allocates the annual appropriation for community college operating aid according to credit hour enrollments as prescribed by N.J.S.A. 18A:64A-22. County Aid Support is provided by the Counties of Atlantic and Cape May and from in-county, out-of-county, and out-of-state students who pay tuition and fees up to approximately $2,223, $3,093 and $3,873, respectively, per full-time student for each of the two academic semesters.

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NOTE 3: SUPPORT OF THE COLLEGE (CONTINUED) County Aid (Continued) The Board of School Estimate of Atlantic Cape Community College (consisting of four members of the Boards of Chosen Freeholders (two from each county) and two members of the College’s Board of Trustees) adopts a budget for each fiscal year ending June 30 and levies the amount necessary to be raised during that fiscal period on the Atlantic County and Cape May County Boards of Chosen Freeholders. The Counties operate on a calendar year fiscal period and generate the necessary revenue through a levy on a local property in the form of taxation. NOTE 4: ECONOMIC DEPENDENCY The College receives a substantial amount of its support from federal, state and county governments. A significant reduction in the level of support, if this were to occur, would have an effect on the College’s programs and activities. NOTE 5: CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of the following as of June 30, 2017 and 2016:

2017 2016

Cash and cash equivalents:Cash on hand $ 1,900 1,900 Cash (bank accounts) 8,138,025 14,515,466 New Jersey Cash Management Fund 5,062,573 3,040,981

$ 13,202,498 17,558,347

Bank balances of cash amounted to $8,377,375 and $14,855,071 as of June 30, 2017 and 2016, respectively of which $250,000 was FDIC insured. Bank balances in excess of insured amounts are collateralized in accordance with the provisions of the Governmental Unit Deposit Protection Act (GUDPA).

New Jersey Cash Management Fund During the year, the College participated in the New Jersey Cash Management Fund. The Fund is governed by regulations of the State investment Council, who prescribe standards designed to insure the quality of the investments in order to minimize risk to the Fund’s participants. Deposits with the New Jersey Cash Management Fund are not subject to FDIC or GUDPA categorizations. At June 30, 2017 and 2016, the College had $5,062,573 and $3,040,981, respectively, invested in the Fund. NOTE 6: ENDOWMENTS Donor restricted endowments totaled $835,685 and $825,765 for the fiscal years ended June 30, 2017 and 2016. Investments, if any, are stated at fair value at the date of the financial statements.

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NOTE 7: INVENTORIES Inventory for the college at June 30, 2017 and 2016 consisted of the following: 2017 2016 Supplies $ 75,229 $ 72,982 Perishable Stores 20,703 23,432 $ 95,932 $ 96,414 NOTE 8: NON-CURRENT LIABILITIES Non-current liability activity for the fiscal years ended June 30, 2017 and 2016 was as follows:

NOTE 9: COMPENSATED ABSENCES College employees may accrue annual vacation and sick leave based on length of service but subject to certain limitations regarding the amount that will be paid in the event of retirement or termination. Personal time earned but unused at June 30 is rolled into sick leave and accounted for in compensated absences. The estimated costs of compensated absences, including the college’s FICA match, for which employees are vested is estimated at $1,877,193 and $1,893,251 for the fiscal years ended June 30, 2017 and 2016, respectively.

June 30, 2016 Additions Reductions June 30, 2017 Current Portion

Deposits 102,963$ 72,236$ -$ 175,199$ 7,064$ Compensated Absences 1,893,251 301,120 (317,178) 1,877,193 314,430 Equipment Leasing Fund 174,990 - (25,004) 149,986 25,006 Net Pension Liability 32,894,902 18,180,277 (7,911,516) 43,163,663 -

35,066,106$ 18,553,633$ (8,253,698)$ 45,366,041$ 346,500$

June 30, 2015 Additions Reductions June 30, 2016 Current Portion

Deposits 184,719$ -$ (81,756)$ 102,963$ 8,720$ Compensated Absences 1,845,563 262,651 (214,963) 1,893,251 220,518 Equipment Leasing Fund 199,993 - (25,003) 174,990 25,005 Net Pension Liability 28,947,163 9,424,267 (5,476,528) 32,894,902 -

31,177,438$ 9,686,918$ (5,798,250)$ 35,066,106$ 254,243$

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NOTE 10: NET POSITION The following is a summary of Net Position balances of the College for the fiscal years ended June 30, 2017 and 2016:

2017 2016

Net Investment in Capital Assets

Gross $ 75,289,390 $ 70,698,513

Related Debt ‐ ‐

Total Net Invested In Capital Assets 75,289,390 70,698,513

Restricted Net Position

Nonexpendable Scholarships and Fellowships 835,685

825,765

Expendable

Grants, Scholarships and Fellowships 223,742 260,591

Consent Decree 210,166 450,778

State Unemployment Fund 775,000 775,000

Capital Projects 878,219 885,421

Renewal and Replacement Reserve (JEC Bond Act) 891,997 872,170

Student Government 89,307 90,534

Appropriated for Encumbrances 89,878 212,683

Subtotal Expendable 3,158,309 3,547,177

Total Restricted Net Position 3,993,994 4,372,942

Unrestricted Net Position (Deficit)

Assignment to FY18 and FY17 Budget 1,093,216 1,124,894

Pension Related Items (32,760,154) (30,589,210)

Undesignated before Pension Related Items 4,387,602 5,860,509

Total Unrestricted Net Position (Deficit) (27,279,336) (23,603,807)

TOTAL NET POSITION $ 52,004,018 $ 51,467,648

NOTE 11: NONCASH DONATIONS During the fiscal years ended June 30, 2017 and 2016, the college received the following non-cash donations that have been reflected in the financial statements: 2017 2016 Student textbook vouchers $ 0 $ 50,000

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NOTE 12: EXPENDITURES Operating expenditures by natural classification for the fiscal years ended June 30, 2017 and 2016 were:

2017 2016

Compensation:

Salaries $ 23,856,062 $ 24,805,205

Staff benefits 11,987,261 9,877,457

Total Compensation 35,843,323 34,682,662

Other Expenditures:

Supplies and other 5,843,985 5,539,948

Utilities and telephone 1,566,252 1,633,870

Insurance 723,061 725,052

Repairs and maintenance 153,213 148,320

Rent 21,299 7,284

Depreciation and amortization 5,028,518 4,662,374

Scholarship and student aid 4,481,558 5,262,088

Travel 192,708 237,147

Total other expenses before auxiliary enterprises

18,010,594 18,216,083

Auxiliary Enterprises

Student activities expenses 128,936 162,898

Total Expenditures $ 53,982,853 $ 53,061,643

NOTE 13: DEFERRED COMPENSATION SALARY ACCOUNT The College offers its employees a Deferred Compensation Plan in accordance with Internal Revenue Service Code 457. The Plan, available to full time employees at their option, permits employees to defer a portion of their salary to future years. The deferred compensation is not available to participants until termination, retirement, death or unforeseeable emergency. Amounts deferred under Section 457 plans must be held in trust for the exclusive benefit of participating employees and not be accessible by the College or its creditors. The Plan is administered by the College through TIAA-CREF. NOTE 14: PENSION PLANS The College participates in several retirement plans, administered by the State of New Jersey, Division of Pensions and Benefits (the “Division”), covering its employees – the Public Employees' Retirement System (PERS), the New Jersey Alternate Benefit Program (ABP) and the Defined Contribution Retirement Program (DCRP). PERS is a defined benefit pension plan while ABP and DCRP are defined contribution pension plans. Generally, all employees, except certain part-time employees, participate in one of these plans.

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NOTE 14: PENSION PLANS (CONTINUED) The State issues a publicly available Comprehensive Annual Financial Report (CAFR) of the State of New Jersey Division of Pensions and Benefits, which includes financial statements, required supplementary information and detailed information about the PERS’s fiduciary net position. This CAFR can be obtained by writing to the State of New Jersey or by visiting the website below.

State of New Jersey

Division of Pensions and Benefits P.O. Box 295

Trenton, New Jersey 08625-0295 http://www.nj.gov/treasury/pensions

General Information About the Pension Plans Plan Descriptions Public Employees' Retirement System - The PERS is a cost-sharing multiple-employer defined benefit pension plan which was established as of January 1, 1955, under the provisions of N.J.S.A. 43:15A. The PERS’s designated purpose is to provide retirement, death, disability and medical benefits to certain qualified members. Membership in the PERS is mandatory for substantially all full-time employees of the College, provided the employee is not required to be a member of another state-administered retirement system or other state pensions fund or local jurisdiction’s pension fund. The PERS’s Board of Trustees is primarily responsible for the administration of the PERS.

Alternate Benefit Program - The ABP is a tax-sheltered, defined contribution retirement program for certain higher education faculty, instructors and administrators which was established pursuant to P.L.1969, c. 242 (N.J.S.A. 52:18A-107 et seq., specifically, 18A:66-192). The ABP is an agency fund overseen by the State of New Jersey Division of Pensions and Benefits.

Defined Contribution Retirement Program - The Defined Contribution Retirement Program is a multiple-employer defined contribution pension fund established on July 1, 2007 under the provisions of Chapter 92, P.L. 2007, and Chapter 103, P.L. 2007 (N.J.S.A. 43:15C-1 et. seq.). The DCRP is a tax-qualified defined contribution money purchase pension plan under Internal Revenue Code (IRC) § 401(a) et seq., and is a “governmental plan” within the meaning of IRC § 414(d). The DCRP provides retirement benefits for eligible employees and their beneficiaries. Individuals covered under DCRP are employees enrolled in TPAF or PERS on or after July 1, 2007, who earn salary in excess of established “maximum compensation” limits; employees enrolled in SPRS or PFRS May 21, 2010, who earn salary in excess of established “maximum compensation” limits; employees otherwise eligible to enroll in TPAF or PERS on or after November 2, 2008, who do not earn the minimum annual salary for tier 3 enrollment but who earn salary of at least $5,000.00 annually; and employees otherwise eligible to enroll in TPAF or PERS after May 21, 2010 who do not work the minimum number of hours per week required for tiers 4 or 5 enrollment, but who earn salary of at least $5,000.00 annually.

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NOTE 14: PENSION PLANS (CONTINUED) General Information About the Pension Plans (Continued) Vesting and Benefits Provisions Public Employees’ Retirement System - The vesting and benefit provisions are set by N.J.S.A. 43:15A and 43:3B. The PERS provides retirement, death and disability benefits. All benefits vest after ten years of service, except for medical benefits, which vest after 25 years of service or under the disability provisions of the PERS.

The following represents the PERS membership tiers:

Tier Definition

1 Members who were enrolled prior to July 1, 2007 2 Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008 3 Members who were eligible to enroll on or after November 2, 2008 and prior to May 21, 2010 4 Members who were eligible to enroll after May 21, 2010 and prior to June 28, 2011 5 Members who were eligible to enroll on or after June 28, 2011

Service retirement benefits of 1/55th of final average salary for each year of service credit is available to tiers 1 and 2 members upon reaching age 60 and to tier 3 members upon reaching age 62. Service retirement benefits of 1/60th of final average salary for each year of service credit is available to tier 4 members upon reaching age 62 and tier 5 members upon reaching age 65. Early retirement benefits are available to tiers 1 and 2 members before reaching age 60, tiers 3 and 4 before age 62 with 25 or more years of service credit and tier 5 with 30 or more years of service credit before age 65. Benefits are reduced by a fraction of a percent for each month that a member retires prior to the age at which a member can receive full early retirement benefits in accordance with their respective tier. Tier 1 members can receive an unreduced benefit from age 55 to age 60 if they have at least 25 years of service. Deferred retirement is available to members who have at least 10 years of service credit and have not reached the service retirement age for the respective tier.

Deferred retirement is available to members who have at least 10 years of service credit and have not reached the service retirement age for the respective tier.

Alternate Benefit Program - ABP provides retirement benefits, life insurance and disability coverage to qualified members. Benefits are determined by the amount of individual accumulations and the retirement income option selected. All benefits vest after the completion of one year of service.

Defined Contribution Retirement Program - Eligible members are provided with a defined contribution retirement plan intended to qualify for favorable Federal income tax treatment under IRC Section 401(a), a noncontributory group life insurance plan and a noncontributory group disability benefit plan. A participant's interest in that portion of his or her defined contribution retirement plan account attributable to employee contributions shall immediately become and shall at all times remain fully vested and nonforfeitable. A participant's interest in that portion of his or her defined contribution retirement plan account attributable to employer contributions shall be vested and nonforfeitable on the date the participant commences the second year of employment or upon his or her attainment of age 65, while employed by an employer, whichever occurs first.

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NOTE 14: PENSION PLANS (CONTINUED) General Information About the Pension Plans (Continued) Contributions Public Employees’ Retirement System - The contribution policy is set by N.J.S.A. 43:15A and requires contributions by active members and contributing employers. Members contribute at a uniform rate. Pursuant to the provisions of Chapter 78, P.L. 2011, the active member contribution rate increased from 5.5% of annual compensation to 6.5% plus an additional 1% phased-in over 7 years beginning in July 2012. The member contribution rate was 7.20% and 7.06% in fiscal years 2017 and 2016 respectively. The phase-in of the additional incremental member contribution rate takes place in July of each subsequent fiscal year. The rate for members who are eligible for the Prosecutors Part of PERS (Chapter 366, P.L. 2001) increased from 8.5% of base salary to 10%. Employers' contribution amounts are based on an actuarially determined rate. The College’s contribution amounts are based on an actuarially determined rate which includes the normal cost and unfunded accrued liability.

The College’s contractually required contribution rates were 13.77% and 13.15% of the College’s covered payroll for the fiscal years ended June 30, 2017 and 2016, respectively. These amounts were actuarially determined as the amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year, including an additional amount to finance any unfunded accrued liability.

Based on the most recent PERS measurement date of June 30, 2016, the College’s contractually required contribution to the pension plan for the fiscal year ended June 30, 2017 was $1,294,723, and was paid by April 1, 2017. College employee contributions to the pension plan during the fiscal year ended June 30, 2017 were $692,022.

Based on the PERS measurement date of June 30, 2015, the College’s contractually required contribution to the pension plan for the fiscal year ended June 30, 2016 was $1,259,836, and was paid by April 1, 2016. College employee contributions to the pension plan during the fiscal year ended June 30, 2017 were $700,173.

Alternate Benefit Program - The contributions requirements of plan members are determined by State statute. In accordance with N.J.S.A. 18A:66-173, required contributions, calculated on the employee’s base pay, are 5% for plan members, and 8% for employers. Plan members may make additional voluntary contributions subject to section 403(b) of the internal revenue code. Under N.J.S.A 18A:66-174, most employer contributions are made by the State of New Jersey on-behalf of the College. The College is responsible for the employer contributions for non-academic employees. Plan members direct the investment of contributions to insurance companies and mutual fund companies selected by the New Jersey Division of Pensions' Pension Provider Selector Board. These companies administer plan funds based on alternate benefit contracts with the New Jersey Division of Pensions.

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NOTE 14: PENSION PLANS (CONTINUED) General Information About the Pension Plans (Continued) Contributions (Continued) Alternate Benefit Program (Continued) Amounts deferred under the plan are not available to employees until termination, retirement, death or unforeseeable emergency. The plan carriers are as follows:

MetLife (Travelers/Citi Street)

AXA Financial (Equitable) MassMutual Retirement Services (The Hartford)

Voya Financial Services Prudential Retirement Services

Teacher’s Insurance and Annuity Association/College Retirement Equities Fund (TIAA/CREF) The Variable Annuity Life Insurance Company (VALIC)

During the fiscal year end June 30, 2017, the College’s share of the employer contributions for participants not eligible for State reimbursement was $146,041, employee contributions to the plan were $453,270, and the State of New Jersey made on-behalf payments for the College contributions of $577,873. During the fiscal year end June 30, 2016, the College’s share of the employer contributions for participants not eligible for State reimbursement was $131,053, employee contributions to the plan were $472,721 and the State of New Jersey made on-behalf payments for the College contributions of $624,119.

Defined Contribution Retirement Program - The contribution policy is set by N.J.S.A. 43:15C-3 and requires contributions by active members and contributing employers. In accordance with Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, plan members are required to contribute 5.5% of their annual covered salary. In addition to the employee contributions, the College contributes 3% of the employees' base salary, for each pay period, to Prudential Financial not later than the fifth business day after the date on which the employee is paid for that pay period.

For the fiscal year ended June 30, 2017, employee contributions totaled $11,709, and the College recognized pension expense of $6,387. There were no forfeitures during this fiscal year. For the fiscal year ended June 30, 2016, employee contributions totaled $14,379, and the College recognized pension expense of $7,843. There were no forfeitures during this fiscal year. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions The following information relates only to the Public Employees' Retirement System (“PERS”), which is a cost-sharing multiple-employer defined benefit pension plan.

The College reported a liability of $43,163,663 and $32,894,902 for its proportionate share of the net pension liability for the fiscal years ended June 30, 2017 and 2016, respectively.

The net pension liability reported at June 30, 2017 was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The total pension liability was calculated through the use of updated procedures to roll forward from the actuarial valuation date to the measurement date of June 30, 2016. The College’s proportion of the net pension liability was based on a projection of the College’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers,

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NOTE 14: PENSION PLANS (CONTINUED) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) actuarially determined. For the June 30, 2016 measurement date, the College’s proportion was .1457388356%, which was a decrease of .0007994213% from its proportion measured as of June 30, 2015. The net pension liability reported at June 30, 2016 was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2014. The total pension liability was calculated through the use of updated procedures to roll forward from the actuarial valuation date to the measurement date of June 30, 2015. The College’s proportion of the net pension liability was based on a projection of the College’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. For the June 30, 2015 measurement date, the College’s proportion was .1465382569%, which was a decrease of .0080714349% from its proportion measured as of June 30, 2014. The College recognized $3,484,051 and $1,549,505, in its financial statements for pension expense for PERS, for the fiscal years ended June 30, 2017 and 2016, respectively. These amounts were based on the plans June 30, 2016 and 2015 measurement dates, respectively. At June 30, 2017 and 2016, the College reported deferred outflows of resources and deferred inflows of resources related to PERS from the following sources:

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NOTE 14: PENSION PLANS (CONTINUED) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) $1,313,107 and $1,294,723 included in deferred outflows of resources, for the June 30, 2016 and 2015 measurement dates, respectively, will be included as a reduction of the net pension liability in fiscal year ending June 30, 2018 and 2017, respectively. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

The amortization of the above other deferred outflows of resources and deferred inflows of resources related to pensions will be over the following number of years:

Year EndingJune 30,

2018 1,927,154$ 2019 1,927,154 2020 2,333,725

2021 2,125,361 2022 777,008

9,090,402.00$

Deferred DeferredOutflows Inflows

of Resources of ResourcesDifferences between Expected

and Actual ExperienceYear of Pension Plan Deferral:June 30, 2014 - -June 30, 2015 5.72 -June 30, 2016 5.57 -

Changes of AssumptionsYear of Pension Plan Deferral:June 30, 2014 6.44 -June 30, 2015 5.72 -

June 30, 2016 5.57 -

Net Difference between Projected

and Actual Earnings on Pension Plan Investments

Year of Pension Plan Deferral:June 30, 2014 - 5.00June 30, 2015 - 5.00June 30, 2016 5.00 -

Changes in Proportion and Differences between School District Contributions

and Proportionate Share of ContributionsYear of Pension Plan Deferral:June 30, 2014 6.44 6.44June 30, 2015 5.72 5.72June 30, 2016 5.57 5.57

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NOTE 14: PENSION PLANS (CONTINUED) Actuarial Assumptions

The net pension liability at June 30, 2017 was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The total pension liability was calculated through the use of updated procedures to roll forward from the actuarial valuation date to the measurement date of June 30, 2016.

The net pension liability at June 30, 2016 was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2014. The total pension liability was calculated through the use of updated procedures to roll forward from the actuarial valuation date to the measurement date of June 30, 2015.

These actuarial valuations used the following actuarial assumptions, applied to all periods included in the measurement:

For the June 30, 2016 measurement date, pre-retirement mortality rates were based on the RP-2000 Employee Preretirement Mortality Table for male and female active participants. Mortality tables are set back 2 years for males and 7 years for females. In addition, the tables provide for future improvements in mortality from the base year of 2013 using a generational approach based on the plan actuary’s modified MP-2014 projection scale. Post-retirement mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (set back 1 year for males and females) for service retirements and beneficiaries of former members and a one-year static projection based on mortality improvement Scale AA. In addition, the tables for service retirements and beneficiaries of former members provide for future improvements in mortality from the base year of 2013 using a generational approach based on the plan actuary’s modified MP-2014 projection scale. Disability retirement rates used to value disabled retirees were based on the RP-2000 Disabled Mortality Table (set back 3 years for males and set forward 1 year for females).

Measurement Date Measurement DateJune 30, 2016 June 30, 2015

Inflation 3.08% 3.04%

Salary Increases: 2012-2021 2.15% - 4.40% Based on Age Through 2026 1.65% - 4.15% Based on Age Thereafter 2.65% - 5.15% Based on Age 3.15% - 5.40% Based on Age

Investment Rate of Return 7.65% 7.90%

Mortality Rate Table RP-2000 RP-2000

Period of Actuarial Experience Study upon which Actuarial Assumptions were Based July 1, 2011 - June 30, 2014 July 1, 2008 - June 30, 2011

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NOTE 14: PENSION PLANS (CONTINUED) Actuarial Assumptions (Continued) For the June 30, 2015 measurement date, Mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (setback 1 year for males and females) for service retirement and beneficiaries of former members with adjustments for mortality improvements from the base year of 2012 based on Projection Scale AA. The RP-2000 Disabled Mortality Tables (setback 3 years for males and setback 1 year for females) are used to value disabled retirees. In accordance with State statute, the long-term expected rate of return on plan investments (7.65% at the June 30, 2016 measurement date and 7.90% at the 2015 measurement date) is determined by the State Treasurer, after consultation with the Directors of the Division of Investments and Division of Pensions and Benefits, the board of trustees and the actuaries. The long-term expected rate of return was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic rates of return for each major asset class included in target asset allocation are summarized in the following tables:

Discount Rate June 30, 2016 Measurement Date - The discount rate used to measure the total pension liability at the June 30, 2016 measurement date was 3.98%. The respective single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.65%, and a municipal bond rate of 2.85%, based on the Bond Buyer Go 20-Bond Municipal Bond

Long-Term Long-TermTarget Expected Real Target Expected Real

Asset Class Allocation Rate of Return Allocation Rate of Return

Cash 5.00% 0.87% 5.00% 1.04%U.S. Treasuries 1.50% 1.74% 1.75% 1.64%

Investment Grade Credit 8.00% 1.79% 10.00% 1.79%

Mortgages 2.00% 1.67% 2.10% 1.62%High Yield Bonds 2.00% 4.56% 2.00% 4.03%Inflation-Indexed Bonds 1.50% 3.44% 1.50% 3.25%Broad U.S. Equities 26.00% 8.53% 27.25% 8.52%Developed Foreign Equities 13.25% 6.83% 12.00% 6.88%Emerging Market Equities 6.50% 9.95% 6.40% 10.00%Private Equity 9.00% 12.40% 9.25% 12.41%Hedge Funds / Absolute Return 12.50% 4.68% 12.00% 4.72%Real Estate (Property) 2.00% 6.91% 2.00% 6.83%Commodities 0.50% 5.45% 1.00% 5.32%Global Debt ex U.S. 5.00% -0.25% 3.50% -0.40%REIT 5.25% 5.63% 4.25% 5.12%

100.00% 100.00%

Measurement Date Measurement DateJune 30, 2016 June 30, 2015

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NOTE 14: PENSION PLANS (CONTINUED) Actuarial Assumptions (Continued) Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made based on the contribution rate in the most recent fiscal year. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2034. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2034, and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

Discount Rate June 30, 2015 Measurement Date - The discount rate used to measure the total pension liability was 4.90% as of the June 30, 2015 measurement date. The single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.90%, and a municipal bond rate of 3.80%, based on the Bond Buyer Go 20-Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made based on the average of the last five years of contributions made in relation to the last five years of actuarially determined contributions. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2033. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2033, and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

Sensitivity of College’s Proportionate Share of Net Pension Liability to Changes in the Discount Rate The following presents the College’s proportionate share of the net pension liability at the June 30, 2016 and 2015 measurement dates, respectively. These amounts were calculated using a discount rate of 3.98% for June 30, 2016 and 4.90% for June 30, 2015, as well as what the College’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rates used:

1% Current 1%Decrease Discount Rate Increase(2.98%) (3.98%) (4.98%)

College's Proportionate Share of the Net Pension Liability 52,892,031$ 43,163,663$ 35,132,052$

1% Current 1%Decrease Discount Rate Increase(3.90%) (4.90%) (5.90%)

College's Proportionate Share of the Net Pension Liability 40,884,339$ 32,894,902$ 26,196,617$

June 30, 2016 Measurement Date

June 30, 2015 Measurement Date

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NOTE 14: PENSION PLANS (CONTINUED) Pension Plan Fiduciary Net Position

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the respective fiduciary net position of the PERS and additions to/deductions from PERS’ respective fiduciary net position have been determined on the same basis as they are reported by PERS. Accordingly, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. For additional information about PERS, please refer to the plan’s Comprehensive Annual Financial Report (CAFR), which can be found at http://www.nj.gov/treasury/pensions. NOTE 15: CAPITAL IMPROVEMENT PROGRAM At June 30, 2017, the status of bond related capital improvement projects was: Budget Expended FY16 Chapter 12 – Atlantic County $ 3,000,000 $ 1,062,746 FY15 Chapter 12 – Atlantic County 3,200,000 163,475 FY14 Chapter 12 – Atlantic County 4,200,000 3,630,040 FY13 Chapter 12 – Atlantic County 1,500,000 860,789 FY12 Chapter 12 – Atlantic County 8,500,000 6,148,384 FY10 Chapter 12 – Atlantic County 2,352,750 2,067,442 FY08 Chapter 12 – Atlantic County 9,009,000 8,020,884 FY07 Chapter 12 – Atlantic County 6,244,000 6,141,693 The bond related capital improvement project expenditures have been reflected in the accompanying financial statements. Reimbursements from the County and the State occur as capital expenditures are incurred and are recorded by the College in accordance with the terms of the agreements.

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NOTE 16: CAPITAL ASSET ACTIVITY The fiscal year 2017 and 2016 activity in capital assets and accumulated depreciation was as follows:

June 30, 2016 June 30, 2017

Balance Additions Retirements Balance

Non-depreciable assets:

Land $2,370,097 $ - $ - $2,370,097

Construction in Progress 1,656,439 7,202,887 (968,854) 7,890,472

4,026,536 7,202,887 (968,854) 10,260,569

Depreciable assets:

Land Improvements 2,391,004 - - 2,391,004

Infrastructure 224,847 487,086 - 711,933






Other Assets 3,120,132 64,996 - 3,185,128

116,508,681 3,394,456 (432,571) 119,470,566

Less accumulated depreciation

and amortization:

Land Improvements 1,314,449 159,400 - 1,473,849

Infrastructure 28,957 11,710 - 40,667


Furniture and Equipment 7,364,756 1,040,869 (302,744) 8,102,881


Other Improvements 3,648 384 - 4,032


Other Assets 1,442,371 218,786 - 1,661,157

49,836,704 5,028,518 (423,447) 54,441,775

Net Depreciable Assets 66,671,977 (1,634,062) (9,124) 65,028,791

Net Capital Assets $70,698,513 $5,568,825 $(977,978) $75,289,360

Depreciation and amortization expense for the year ended June 30, 2017 was $5,028,518. Projects were completed during the year resulting in $968,854 being reclassified from Construction in Progress.

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NOTE 16: CAPITAL ASSET ACTIVITY (CONTINUED)

June 30, 2015 June 30, 2016

Balance Additions Retirements Balance

Non-depreciable assets:

Land $2,370,097 $ - $ - $2,370,097

Construction in Progress 1,618,228 1,107,665 (1,069,454) 1,656,439

3,988,325 1,107,665 (1,069,454) 4,026,536

Depreciable assets:


Infrastructure 224,847 - - 224,847


Furniture and Equipment 12,089,310 1,598,980 (797,676) 12,890,614

Library Collection 1,340,031 19,436 - 1,359,467



Other Assets 3,054,228 65,904 - 3,120,132

109,170,561 8,135,796 (797,676) 116,508,681

Less accumulated depreciation

and amortization:


Infrastructure 23,336 5,621 - 28,957



Library Collection 1,230,691 42,655 - 1,273,346

Other Improvements 3,264 384 - 3,648


Other Assets 1,223,147 219,224 - 1,442,371

45,964,396 4,662,374 (790,066) 49,836,704

Net Depreciable Assets 63,206,165 3,473,422 (7,610) 66,671,977

Net Capital Assets $67,194,490 $4,581,087 $(1,077,064) $70,698,513

Depreciation expense for the year ended June 30, 2016 was $4,662,374. Projects were completed during the year resulting in $1,069,454 being reclassified from Construction in Progress.

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NOTE 17: COMMITMENTS AND CONTINGENCIES Operating Leases The College leases copiers, and facilities under long-term operating leases. Rental expenditures in fiscal years 2017 and 2016 under these leases amounted to $34,361 and $54,245, respectively. Aggregate approximate future minimum rental payments under non-cancelable operating leases are as follows: Year Ending Rental June 30 Payment

2018 $ 48,490 2019 31,634 2020 26,701 2021 25,740 2022 17,535

Capital Leases There are no future minimum lease payments under capital leases. Lease Purchase The College has entered into a lease agreement with the New Jersey Educational Facilities Authority for the lease-purchase of equipment approved by the State Board of Higher Education. The total approved project amount is $803,542. The College will pay to the Authority 25% of the principal and interest on the bonds to be issued to finance equipment purchases. Lease payments to the Authority for the fiscal years ended June 30, 2017 and 2016 totaled $25,005 and $25,003, respectively. The title to the equipment will pass to the College upon final payment of the lease obligation. Approximate future minimum lease payments are:

June 30 Payment

2018 25,006$ 2019 25,005 2020 24,999 2021 24,988 2022 24,989

Solar Site Lease and Power Purchase Agreement The College entered into a solar site lease agreement and power purchase agreement with Energenic, LLC, on February 26, 2013. The College has no capital investment, but will be assured of a predictable cost of energy over the 15 year term of the lease. Solar arrays were substantially complete in October, 2013 on the Mays Landing and Cape May County campuses.

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NOTE 17: COMMITMENTS AND CONTINGENCIES (CONTINUED) Rutgers University Ground Lease The College has entered into a 50 year ground lease with Rutgers University. Rutgers completed construction of an academic building on the College’s Mays Landing campus which opened for classes in September, 2012. The tenant shall pay the college an annual student use fee, adjusted annually. The student use fees for the fiscal years ended June 30, 2017 and 2016 were $24,538 and $22,509, respectively. Encumbrances The College has encumbrances representing outstanding purchase orders and other commitments with various vendors for materials and services not received as of June 30, 2017 and 2016 as follows: 2017 2016 Current unrestricted $ 89,878 $ 212,683 Not included in the above schedule are commitments of $96,856 and $317,637 for June 30, 2017 and 2016 to be offset with current restricted funds, and capital projects commitments of $5,018,841 and $13,427,711 for June 30, 2017 and 2016 to be offset with state Chapter 12 and Building our Future Bond Act and facilities fees accounted for in the plant fund. Except as reported as allocated fund balances on the balance sheet, these commitments are not reflected on the accompanying financial statements. Assignment To FY18 Current Operating Budget The Board of Trustees of the College has assigned a $1,093,216 fund balance transfer into its FY18 Current Operating Budget - Education and General Revenues. Restricted Maintenance Reserve The Jobs Education and Competitiveness Grant (JEC) which provided funding for the Cape May County Campus requires the college to retain a maintenance reserve of $971,300. When used, the reserve must be replenished over a five year period. In FY17, the College replenished $19,826 of $99,130 used in FY16 for a boiler replacement project at the Cape May County Campus. Grantor Agencies Amounts received or receivable from grantor agencies could be subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time, although the College expects such amount, if any, to be immaterial.

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NOTE 18: RISK MANAGEMENT

The College is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The College is self-insured for unemployment benefits compensation and participates in a self-insurance pool for workers’ compensation. Property and Liability Insurance Comprehensive commercial business insurance is purchased through a cooperative pool. Liability coverage limits are as follows: Property $151,672,457 General Liability 1,000,000 Automobile Liability 1,000,000 Crime / Employee Bond 1,000,000 Board of Ed Liability 5,000,000 Board of Ed Excess Liability/ Products 15,000,000 Umbrella, Auto and General 15,000,000 Workers’ Compensation Statutory Environmental 1,000,000/3,000,000 Flood & Earthquake 10,000,000 Boiler & Machinery 50,000,000 Data Security 1,000,000 Owned UAV and Non-owned Aircraft 2,000,000 Builder’s Risk 10,800,000 New Jersey Unemployment Compensation Insurance The College has elected to fund its New Jersey Unemployment Compensation Insurance under the "Benefit Reimbursement Method". Under this plan, the College is required to reimburse the New Jersey Unemployment Trust fund for benefits paid to its former employees and charged to its account with the State. The College is billed quarterly for amounts due to the State. The following is a summary of College contributions, reimbursements to the State for benefits paid and the ending balance of the College's restricted net assets for the current and previous four fiscal years:

Fiscal Year College Employee Amount Ending Ended June 30, Contributions Contributions Reimbursed Balance

2017 $71,777 $44,821 ($116,598) $775,0002016 46,084 46,268 (92,352) 775,0002015 67,925 46,970 (114,895) 775,0002014 82,303 45,398 (102,701) 775,0002013 142,376 46,743 (189,119) 750,000

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NOTE 18: RISK MANAGEMENT (CONTINUED)

Workers’ Compensation Insurance Pool The College is a member of the New Jersey Community College Insurance Pool, a non-profit self-insurance pool created pursuant to the provisions of the New Jersey State Government Regulations Act, Chapter 204, P.L. 1985, to provide workers’ compensation insurance to its members. Membership in the insurance pool is limited to New Jersey community colleges. As of June 30, 2017, fourteen colleges participated in the insurance pool. Contributions to the Pool are payable in an annual premium and are based on actuarial assumptions determined by the Pool's actuary. Contributions to the Pool for the fiscal years ended June 30, 2017 and 2016 were $259,444 and $237,212, respectively. NOTE 19: LITIGATION The College is a defendant in several legal proceedings that are in various stages of litigation. It is believed that the outcome, or exposure to the College, from such litigation is either unknown or potential losses, if any, would not be material to the financial statements. NOTE 20: SCHOOL EMPLOYEES HEALTH BENEFITS PROGRAM P.L. 1987, c.384 of P.L. 1990, c.6 required Teachers’ Pensions and Annuity Fund (“TPAF”) and the Public Employees’ Retirement System (“PERS”), respectively, to fund post-retirement medical benefits for those State employees who retire after accumulating 25 years of credited service or on a disability retirement. P.L. 2007, c.103 amended the law to eliminate the funding of postemployment medical benefits through the TPAF and PERS. It created separate funds outside of the pension plans for the funding and payment of postemployment medical benefits for retired State employees and retired educational employees. As of June 30, 2016, there were 110,512 retirees receiving postemployment medical benefits, and the State contributed $1.37 billion on their behalf. The cost of these benefits is funded through contributions by the State in accordance with P.L. 1994, c.62. Funding of post-retirement medical premiums changed from a pre-funding basis to a pay-as-you-go basis beginning in fiscal year 1994. The State is also responsible for the cost attributable to P.L. 1992 c.126, which provides free health benefits to members of PERS and the Alternate Benefit Program who retire from a board of education or county college with 25 years of service. The State paid $231.2 million toward Chapter 126 benefits for 20,045 eligible retired members in fiscal year 2016.

The School Employees Health Benefits Program (“SEHBP”) Act is found in New Jersey Statutes Annotated, Title 52, Article 17.25 et. Seq. Rules governing the operation and administration of the program are found in Title 17, Chapter 9 of the New Jersey Administrative Code. The State of New Jersey Division of Pensions and Benefits issues a publicly available financial report that includes financial statements and required supplementary information for the SEHBP. That report may be obtained from the Treasury website at:

http://www.nj.gov/treasury/pensions/pdf/financial/2015divisioncombined.pdf

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NOTE 21: NJ COMMUNITY COLLEGE CONSORTIUM FOR WORKFORCE AND ECONOMIC DEVELOPMENT AGREEMENT The College paid a $100,000 fee during fiscal year 2004 to participate in the New Jersey County College Workforce Consortium. The participation agreement allows the College to share in royalties and training revenues as a subcontractor. The effective date of participation begins July 1, 2004, and extended through September 30, 2008. The participation fee was amortized over this period. Royalties earned for the fiscal years ended June 30, 2017 and 2016 were $22,573 and $28,216, respectively. There is no future amortization expense related to this cost. NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Activities Atlantic Cape Community College Foundation (the “Foundation”) was formed in 1978 as an independent nonprofit organization for the purpose of promoting and furthering higher education among the citizens of Atlantic and Cape May Counties, New Jersey and to provide physical facilities and services at Atlantic Cape Community College (the “College”).

Although the Foundation is a legally separate, non-for-profit organization, because of the significance of its operational and financial relationships with the College it is considered a component unit of the College.

Basis of Accounting The financial statements of the Foundation have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables and other liabilities.

Financial Statement Presentation The financial statements have been prepared in conformity with the standards promulgated by the Financial Accounting Standards Board applicable to not-for-profit organizations. The Foundation’s net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Foundation and changes therein are classified and reported as follows:

Unrestricted net assets – net assets that are not subject to donor-imposed stipulations. This includes funds that are designated for discretionary use by the Foundation and board designated funds functioning as endowments. Temporarily restricted net assets – net assets subject to donor-imposed stipulations that may or will be met either by actions of the Foundation and/or the passage of time. This includes term endowments, the present value of contributions receivable, and earnings on investments.

Permanently restricted net assets – net assets subject to donor-imposed stipulations that they be maintained permanently by the Foundation. This includes the historical dollar amounts of gifts, the present value of contributions receivable, and earnings required to be added to the corpus as stipulated by the donor.

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets (i.e. the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between the applicable classes of net assets.

Income and realized and unrealized net gains or losses on investments are reported as follows:

As increases or decreases in permanently restricted net assets if the terms of the gift require that, they be added to the principal of a permanent endowment fund.

As increases or decreases in temporarily restricted net assets if the terms of the gift impose restrictions on the use of the income or by law. As increases or decreases in unrestricted net assets in all other cases.

Public Support and Revenue Recognition Contributions are recognized when the donor makes a promise to give to the Foundation that is, in substance, unconditional. Contributions of cash and other assets are reported as temporarily or permanently restricted net assets, depending on the nature of the restriction. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Contributions received with donor-imposed restrictions that are met in the same year in which the contributions are received are classified as unrestricted contributions.

Unconditional promises to give are recognized as revenues or gains in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Conditional promises to give are recognized only when the conditions on which they depend are substantially met and the promises become unconditional.

Endowment contributions may be permanently restricted by the donor. Investment earnings available for distribution are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Investment income and gains restricted by donors are reported as increases in unrestricted net assets if the restrictions are met (which happens either when a stipulated time period ends or when a purpose restriction is accomplished) during the reporting period in which the income and gains are recognized.

Contributions of donated noncash assets are recorded at their fair values in the period received. Contributions of donated services that create or enhance nonfinancial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation, are recorded at their fair values in the period received.

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Cash Equivalents For purposes of the Statements of Cash Flows, the Foundation considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. The Foundation places its cash and cash equivalents on deposit with financial institutions in the United States. The Federal Deposit Insurance Corporation covers $250,000.00 for substantially all depository accounts. Money Market funds intended for non-operating purposes are classified as investments.

Investments

The Foundation reports all investments in marketable securities with readily determinable fair values and all investments in debt securities at fair value in the statement of financial position. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor are reported as increases in unrestricted net assets if the restrictions are met (either by passage of time or by use) in the reporting period in which the income and gains are recognized. Mutual Funds are valued at the quoted market prices, which represent the net asset value of the shares held by the Foundation at year-end.

Fair Value Measurement The Foundation follows an accounting standard that defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and requires expanded disclosures about fair value measurements.

Allowance for Doubtful Accounts Pledges and accounts receivable are stated net of an allowance for doubtful accounts. The Foundation estimates the allowance based on an analysis of specific donors, taking into consideration the age of past due amounts and an assessment of the donor’s ability to pay. The Foundation has determined that there was no allowance for doubtful accounts required for receivables at June 30, 2017.

Donated Services The Foundation receives donated services from a variety of personnel who are employed by the College. The value of these services has been reflected in the statement of activities. Income Taxes The Foundation claims exemption from federal and state income taxes under section 501(c) (3) of the Internal Revenue Code and, accordingly, does not record a provision for income taxes on related income. The Foundation is eligible to receive a charitable contribution deduction under Section 170(b)(1)(A) and is classified as an organization other than a private foundation under Section 509(a)(2).

The Foundation regularly reviews and evaluates its tax positions taken in previously filed information returns and as reflected in its financial statements, with regard to issues affecting its tax-exempt status, unrelated business income, and related matters. The Foundation believes that in the event of an examination by taxing authorities, the Foundation’s positions would prevail based upon the technical merits of such positions. Therefore, the Foundation has concluded that no tax benefits or liabilities are required to be recognized in accordance with the new requirements.

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Functional Allocation of Expenses The cost of providing the various programs and supporting services have been summarized on a functional basis in the Statement of Activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

Reclassifications Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform with the presentation in the current-year financial statements.

Subsequent Events The Foundation has evaluated events and transactions through November 14, 2017, the date the financial statements were available to be issued, and determined there were no items requiring recognition or disclosure in the financial statements.

New Accounting Pronouncements Presentation of Financial Statements of Not-for-Profit Entities – Issued in August 2016, Accounting Standards Update (ASU) No. 2016-14 (Topic 958) is intended to improve the presentation of financial statements of not-for-profit (NFP) entities and provide more useful information to donors, grantors, and other users. The ASU eliminates the distinction between resources with permanent restrictions and those with temporary restrictions from the face of NFP financial statements by reducing the current three net asset classes (unrestricted, temporarily restricted, and permanently restricted) to two classes (net assets with donor restrictions and net assets without donor restrictions). The ASU will also require additional information to be disclosed about investment return, expense classifications, liquidity and availability of resources, and presentation of operating cash flows. The standard will take effect for fiscal years beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018. Early application will be permitted. The Foundation is assessing the potential impact this guidance will have on its financial statements.

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The update will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a full retrospective or retrospective with cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14 which defers the effective date of ASU No. 2014-09 one year making it effective for the Foundation’s year ending June 30, 2020. Early adoption, subsequent to the Foundation’s year ending June 30, 2017, is permitted. The Foundation is currently evaluating the effect implementation of ASU No. 2014-09 will have on its financial statements.

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note B - CONCENTRATION OF CREDIT RISK The Foundation maintains cash balances in their banking institutions, which are insured by the Federal Deposit Insurance Corporation (F.D.I.C) up to $250,000.00 per institution. At June 30, 2017 and 2016, the Foundation’s balance did not exceed the insured limit.

Note C - PLEDGES RECEIVABLE

Pledges receivable at June 30, 2017 and 2016 were as follows:

Note D - INVESTMENTS Investments, stated at fair value, are composed of the following as of June 30, 2017 and 2016, respectively:

2017 2016

Due within one year 110,065.25$ 53,550.00$ Due in two to five years 3,000.00 30,690.00

Total Pledges Receivable 113,065.25 84,240.00

Less: unamortized discount - (1,599.00)

Net Pledges Receivable 113,065.25$ 82,641.00$

UnrealizedFair Market Gain

Cost Value (Loss)Mutual Funds:

Fixed Income 1,775,495.06$ 1,784,957.57$ 9,462.51$ Domestic Equities 1,646,346.59 1,863,219.29 216,872.70 International Equities 498,726.48 558,920.35 60,193.87

Total 3,920,568.13$ 4,207,097.21$ 286,529.08$

UnrealizedFair Market Gain

Cost Value (Loss)Mutual Funds:

Fixed Income 1,810,288.00$ 1,787,093.25$ (23,194.75)$ Domestic Equities 1,510,965.00 1,598,168.26 87,203.26 International Equities 469,692.00 459,460.00 (10,232.00)

Total 3,790,945.00$ 3,844,721.51$ 53,776.51$

2016

2017

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note D – INVESTMENTS (CONTINUED)

The following summarizes the investment returns as of June 30, 2017 and 2016, respectively:

Unrestricted Temporarily Permanently Total

Interest and Dividends 26,420.21$ 110,039.99$ 10,973.33$ 147,433.53$ Investment Fees (9,376.63) (23,343.96) (3,640.59) (36,361.18) Net Interest and Dividends 17,043.58 86,696.03 7,332.74 111,072.35

Realized Gains (Losses) (8,852.30) 31,944.49 4,206.60 27,298.79 Unrealized Gains (Losses) 44,780.72 160,197.90 20,240.07 225,218.69

Total Gains (Losses) 35,928.42 192,142.39 24,446.67 252,517.48

Total Investment Return 52,972.00$ 278,838.42$ 31,779.41$ 363,589.83$

Unrestricted Temporarily Permanently Total

Interest and Dividends 51,907.00$ 108,194.00$ 17,024.00$ 177,125.00$ Investment Fees (8,736.00) (23,745.00) (3,818.00) (36,299.00) Net Interest and Dividends 43,171.00 84,449.00 13,206.00 140,826.00

Realized Gains (Losses) (6,635.00) (47,165.00) (10,942.00) (64,742.00) Unrealized Gains (Losses) (45,440.00) (97,659.00) (17,170.00) (160,269.00)

Total Gains (Losses) (52,075.00) (144,824.00) (28,112.00) (225,011.00)

Total Investment Return (8,904.00)$ (60,375.00)$ (14,906.00)$ (84,185.00)$

Restricted

Restricted

2017

2016

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note E - FAIR VALUE MEASUREMENT Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, established a hierarchy for inputs used in measuring fair value that maximized the use of observable inputs and minimized the use of unobservable inputs, requiring that inputs that are most observable be used when available. Observable inputs are inputs that market participants operating within the same marketplace as the Foundation would use in pricing the Foundation’s assets or liability based on independently derived and observable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of the Foundation are traded. The Foundation estimates the price of any assets for which there are only unobservable inputs by using assumptions that market participants that have investments in the same or similar assets would use as determined by the money managers for each investment based on best information available in the circumstances. The input hierarchy is broken down into three levels based on the degree to which the exit price is independently observable or determinable as follows:

Level 1 Valuation based on quoted market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2 Valuation based on quoted market prices of investments that are not actively traded or for which certain significant inputs are not observable, either directly or indirectly.

Level 3 Valuation based on inputs that are unobservable and reflect management’s best estimate of what market participants would use as fair value.

The assets fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Any transfer between fair value hierarchy levels is recognized by the Foundation at the end of each reporting period.

The following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis. There have been no changes to the methodologies used at June 30, 2017 and 2016.

Mutual Funds – Valued at quoted market prices in active markets on which individual

securities are traded.

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note E - FAIR VALUE MEASUREMENT (CONTINUED) Fair Value on a Recurring Basis

The following tables below present the fair value of financial instruments as measured on a recurring basis as of June 30, 2017 and 2016.

Quoted Prices in Significant Other Significant Other

Active Markets for Observable Unobservable

Identical Assets Inputs Inputs

Total (Level 1) (Level 2) (Level 3)Mutual Funds:

Fixed Income 1,784,957.57$ 1,784,957.57$ Domestic Equities 1,863,219.29 1,863,219.29 International Equities 558,920.35 558,920.35

Total 4,207,097.21$ 4,207,097.21$ -$ -$

Quoted Prices in Significant Other Significant Other

Active Markets for Observable Unobservable

Identical Assets Inputs Inputs

Total (Level 1) (Level 2) (Level 3)Mutual Funds:

Fixed Income 1,787,093.25$ 1,787,093.25$ Domestic Equities 1,598,168.26 1,598,168.26 International Equities 459,460.00 459,460.00

Total 3,844,721.51$ 3,844,721.51$ -$ -$

2017

Fair Value

2016

Fair Value

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note F - ENDOWMENT FUNDS The Foundation’s endowment consists of approximately 45 individual funds established for a variety of purposes. The endowment includes both donor-restricted endowment funds and funds designated by the Foundation Board to function as endowments. As required by generally accepted accounting principles, net assets associated with endowment funds, including funds designated by the Foundation Board to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions.

The Foundation has interpreted state law as requiring the preservation of the value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Foundation classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Foundation in a manner consistent with the standard of prudence prescribed by state law.

The Foundation considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

(1) The duration and preservation of the fund (2) The purposes of the Foundation and the donor-restricted endowment fund (3) General economic conditions (4) The possible effect of inflation and deflation (5) The expected total return from income and the appreciation of investments (6) Other resources of the Foundation (7) The investment policies of the Foundation.

Endowment Net Asset Composition by Type of Fund as of June 30, 2017 and 2016:

2017 2016Permanently Permanently

Restricted RestrictedDonor Restricted:

Endowment Funds 2,976,086.20$ 2,901,507.32$

June 30,

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note F - ENDOWMENT FUNDS (CONTINUED) The Foundation has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Foundation must hold in perpetuity or for a donor-specified period(s) as well as board-designated funds. Under this policy, as approved by the Foundation Board, the endowment assets are invested in a manner that seeks long-term capital growth, current income and growth of income, consistent with prudent, conservative, and risk-averse investments for its endowment. The endowment investments may be invested in any combination of common stocks, bond funds or mutual funds containing both stocks and bonds.

To satisfy its long-term objectives, the Foundation relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The Foundation targets a diversified asset allocation to achieve its long-term objectives within prudent risk constraints.

The Foundation has adopted an investment spend policy. Unless otherwise directed by the donor at the time of the donation and agreed to by the Foundation, 80% of annual audited net interest (interest earned less fees paid) shall be distributed from the endowed funds as per donor designation or Foundation Board direction. The remaining 20% shall be reinvested to preserve the purchasing power of the corpus over time.

From time-to-time, the fair value of assets associated with an individual donor restricted endowment fund may fall below the level that the donor or State law required the Foundation to retain as a fund of perpetual duration. The Foundation Board's policy is to restore these funds to the original endowed amount by enduring any market losses in their unrestricted funds thus enabling the endowment to remain whole.

The following table provides information regarding the change in endowment net assets for the year ended 2017 and 2016:

2017 2016Permanently PermanentlyRestricted Restricted

Endowment Net Assets - Beginning of Year 2,901,507.32$ 2,877,871.32$

Investment Income 31,779.41 (14,906.00)

Contributions 42,799.47 38,542.00

Endowment Net Assets - End of Year 2,976,086.20$ 2,901,507.32$

June 30,

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note G- TEMPORARILY RESTRICTED NET ASSETS

The Foundation follows the policy of maintaining special funds when grants and gifts are received for specific projects. Such grants and gifts are reported as temporarily restricted net assets until the donor-imposed restrictions are satisfied.

Investment income derived from permanently restricted net assets, which is restricted by the donor for a specific purpose, is included as temporarily restricted net assets.

Temporarily restricted net assets are available for scholarships and college improvements. Donor restrictions are maintained on file by the Foundation.

Temporarily restricted net assets include monies raised by the Restaurant Gala, golf events, other fundraisers, and amounts specifically designated by donors, which generally have been restricted for distributions to Atlantic Cape Community College for scholarships. Restaurant Gala monies are awarded to Culinary School students, and Golf Classic monies are awarded on a preferential basis first to Liberal Arts students and then to other college majors. Also included in temporarily restricted net assets is 90% of the income from one endowment to be used for healthcare scholarships and 100% income from other endowments to be awarded for various scholarships.

As of June 30, 2017 and 2016, temporarily restricted net assets consisted of the following:

Note H- PERMANENTLY RESTRICTED NET ASSETS

Permanently restricted net assets consist of investments to be held in perpetuity. One endowment requires that 10% of the income be added to principal and the remainder be used to fund scholarships. According to the new investment policy, 20% of the income earned on endowment funds received after the effective date of May 1, 2010 is added to principal. All other endowments require that all income be used for scholarships.

2017 2016Temporarily Restricted:

Restaurant Gala Scholarships 129,278.00$ 139,096.00$ Golf Outing Scholarships 18,752.00 21,652.00 Scholarships 442,904.82 272,552.00 Athletics 3,000.00 - Emergency Fund 7,899.00 - Culinary Loan Grant 45,000.00 30,000.00

646,833.82$ 463,300.00$

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note I- DONATED SERVICES

The Foundation receives donated services from a variety of personnel who are employed by Atlantic Cape Community College. The value of these services shown below, has been reflected in the Statements of Activities and Changes in Net Assets.

Note J - CONTRIBUTIONS FROM TRADE DONATIONS

Harrah's Atlantic City donated labor, set up and decor worth $32,256; Morey's Pier donated Steel Pier admissions worth $28,608; Longport Media, The Press of AC, and SNJ Today donated online, in print, on-air, and radio promotion worth $10,000, $8,000, and $5,000 respectively; various local restaurants donated food worth $28,428; various other vendors and individuals donated their services and products worth $24,174.31 in exchange for advertising and/or tickets for the Restaurant Gala, Golf and Alumni events. The computation of the value of the contribution of these services and products represent the difference between market value of these services or products and the market value of the services given in exchange.

For the year ended June 30, 2017, the information is summarized as follows:

2017 2016

Administrative Support 112,872.50$ 82,768.00$ Less: Paid to College (70,000.00) - Administrative Support Donated 42,872.50 82,768.00

Fundraising Support 164,271.50 139,640.00

Total 207,144.00$ 222,408.00$

Value of Services Received 136,466.31$ Value of Tickets Provided (22,605.00)

Net Contribution to the Foundation 113,861.31$

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note K - FUNDRAISING

Fundraising proceeds for the years ended June 30, 2017 and 2016 consisted of the following:

Restaurant Golf Other In KindGala Event Events Services Total

Gross Receipts 322,942.66$ 51,964.35$ 70,651.32$ 164,271.50$ 609,829.83$

Direct Benefit to Donors: Room Rental and Setup 63,761.00 5,635.00 69,396.00 Catering and Meals 28,737.76 4,102.46 11,823.65 44,663.87 Wine and Liquor 7,943.44 697.97 8,641.41 Entertainment 6,650.00 35,313.00 41,963.00 Plates 2,534.00 2,534.00 Decor 18,442.40 345.00 158.95 18,946.35 Gifts and Souvenirs 692.07 3,835.03 278.61 4,805.71

Total Direct Benefit to Donors 128,760.67 14,615.46 47,574.21 - 190,950.34

Gross Receipt less Direct Benefit to Donors 194,181.99 37,348.89 23,077.11 164,271.50 418,879.49

Expenses: Raffle Prizes 13,963.09 5,152.67 6,704.93 25,820.69 Licenses and Fees 250.00 250.00 Supplies 185.57 575.65 75.98 837.20 Donated Services 164,271.50 164,271.50 Advertising 23,000.00 945.00 23,945.00 Printing 5,410.57 260.38 251.69 5,922.64 Postage and Delivery 1,448.86 286.48 420.23 2,155.57 Travel 975.79 127.92 335.80 1,439.51 Miscellaneous 106.99 100.00 206.99

Total Expenses 45,340.87 7,348.10 7,888.63 164,271.50 224,849.10

Net Proceeds 148,841.12$ 30,000.79$ 15,188.48$ -$ 194,030.39

Net Proceeds for General Use (30,651.39)

Net Proceeds for Scholarships 163,379.00$

2017

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NOTE 22: DISCRETELY PRESENTED COMPONENT UNIT DISCLOSURES (CONTINUED) Note K: FUNDRAISING (CONTINUED)

NOTE 23: SUBSEQUENT EVENTS Management has reviewed and evaluated all events and transactions that occurred between June 30, 2017 and December 22, 2017, the date that the financial statements were issued for possible disclosure and recognition in the financial statements, and no items have come to the attention of the college that would require disclosure.

Restaurant Golf Other In KindGala Event Events Services Total

Gross Receipts 333,090.00$ 45,748.00$ 41,881.00$ 139,640.00$ 560,359.00$

Direct Benefit to Donors: Room Rental and Setup 61,957.00 5,160.00 67,117.00 Catering and Meals 30,744.00 4,140.00 3,080.00 37,964.00 Wine and Liquor 9,263.00 317.00 46.00 9,626.00 Entertainment 6,650.00 750.00 27,018.00 34,418.00 Plates 2,375.00 2,375.00 Photos and Videos 1,100.00 1,100.00 Decor 17,489.00 17,489.00 Gifts and Souvenirs 1,761.00 3,043.00 2,308.00 7,112.00

Total Direct Benefit to Donors 131,339.00 13,410.00 32,452.00 - 177,201.00

Gross Receipt less Direct Benefit to Donors 201,751.00 32,338.00 9,429.00 139,640.00 383,158.00

Expenses: Donor Recognition 274.00 274.00 Raffle Prizes 14,145.00 4,878.00 19,023.00 Licenses and Fees 50.00 50.00 Supplies 261.00 160.00 155.00 576.00 Donated Services 139,640.00 139,640.00 Advertising 20,570.00 1,500.00 22,070.00 Printing 8,102.00 385.00 155.00 8,642.00 Postage and Delivery 3,072.00 311.00 3,383.00 Travel 419.00 189.00 257.00 865.00 Miscellaneous 25.00 24.00 49.00

Total Expenses 46,644.00 7,447.00 841.00 139,640.00 194,572.00

Net Proceeds 155,107.00$ 24,891.00$ 8,588.00$ -$ 188,586.00

Net Proceeds for General Use (22,654.00)

Net Proceeds for Scholarships 165,932.00$

2016

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REQUIRED SUPPLEMENTARY INFORMATION

PART II

RSI-1

2016 2015 2014 2013

College's Proportion of the Net Pension Liability 0.1457388356% 0.1465382569% 0.1546096918% 0.1659589777%

College's Proportionate Share of the Net Pension Liability 43,163,663.00$ 32,894,902.00$ 28,947,163.00$ 31,718,058.00$

College's Covered Payroll (Plan Measurement Period) 10,150,520.00$ 10,353,340.00$ 11,023,844.00$ 11,789,404.00$

College's Proportionate Share of the Net PensionLiability as a Percentage of Covered Payroll 425.24% 317.72% 262.59% 269.04%

Plan Fiduciary Net Position as a Percentage of the TotalPension Liability 40.14% 47.93% 52.08% 48.72%

Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, this presentation will only include information for those years for which information is available.

ATLANTIC CAPE COMMUNITY COLLEGE

Measurement Date Ending June 30,

Last Four Plan YearsPublic Employees' Retirement System (PERS)

Schedule of the College's Proportionate Share of the Net Pension LiabilityRequired Supplementary Information

Page 70

RSI-2

2017 2016 2015 2014

Contractually Required Contribution 1,313,107.00$ 1,294,723.00$ 1,259,836.00$ 1,274,580.00$

Contributions in Relation to theContractually Required Contribution (1,313,107.00) (1,294,723.00) (1,259,836.00) (1,274,580.00)

Contribution Deficiency (Excess) -$ -$ -$ -$

College's Covered Payroll (Fiscal Year) 9,536,327.00$ 9,843,180.00$ 9,823,077.00$ 10,102,683.00$

Contributions as a Percentage ofCollege's Covered Payroll 13.77% 13.15% 12.83% 12.62%

Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, this presentation will only include information for those years for which information is available.


Fiscal Year Ended June 30,

Last Four Fiscal YearsPublic Employees' Retirement System (PERS)

Schedule of the College's ContributionsRequired Supplementary Information

Page 71


Public Employees' Retirement System (PERS)

Changes in Benefit Terms - None

Notes to Required Supplementary Information - Part IIFor the Fiscal Year Ended June 30, 2017

Changes in Assumptions - For 2016, the discount rate changed to 3.98%, the long-term expected rate of return changed to 7.65%, demographic assumptions were revised in accordance with the results of the July 1, 2011 - June 30, 2014 experience study and the mortality improvement scale incorporated the plan actuary's modified MP-2014 projection scale. Further, salary increases were assumed to increase between 1.65% and 4.15% (based on age) through fiscal year 2026 and 2.65% and 5.15% (based on age) for each fiscal year thereafter. For 2015, the discount rate changed to 4.90%. In addition, the social security wage base was set at $118,500 for 2015, increasing 4.00% per annum, compounded annually and the 401(a)(17) pay limit was set at $265,000 for 2015, increasing 3.00% per annum, compounded annually. For 2014, the discount rate was 5.39%.

Page 72

Supplemental Financial Information


June 30, 2017

ATLANTIC CAPE COMMUNITY COLLEGESUPPLEMENTAL FINANCIAL INFORMATION

BALANCE SHEETSJUNE 30, 2017 and 2016

2017 2016 2017 2016

ASSETS LIABILITIES AND FUND BALANCES

Current funds: Current funds:Unrestricted: Unrestricted:

Cash and cash equivalents 9,380,730$ 13,548,839$ Accounts payable and other accruals 4,547,468$ 4,527,999$

Security deposit 1,309 1,309 Compensated absences 1,877,193 1,893,251

Restricted cash 3,821,768 4,009,508 Deferred revenue 1,943,080 2,215,319

Interfund balances 940,642 - Interfund balances - 1,635,373

Accounts receivable: Student deposits and other liabilities 175,199 102,963

Students, less allowance for 8,542,940 10,374,905

uncollectible accounts of

$1,061,260 and $1,131,983 respectively 987,895 885,836

Federal, state, county and local 187,149 180,644 Fund balances:

Other 50,905 50,328 Allocated for student activities 89,307 90,534

Inventories, at cost 95,932 96,414 Allocated for JEC reserve 891,997 872,170

Prepaid expenses 403,610 537,817 Allocated for SUI reserve 775,000 775,000

Allocated for encumbrances 89,878 212,682

Unallocated 5,480,818 6,985,404

7,327,000 8,935,790

Total unrestricted 15,869,940 19,310,695 Total unrestricted 15,869,940 19,310,695

Restricted: Restricted:

Accounts receivable Accounts payable and other accruals 1,030,552 836,758

Federal, state, county and local 1,161,013 1,207,226 Deferred revenue 136,436 77,736

Other assets 20,150 50,100 Interfund balances - -

Prepaid expenses 22,550 31,866 1,166,988 914,494

Interfund balances 397,183 336,671

Fund balance 433,908 711,369

Total restricted 1,600,896 1,625,863 Total restricted 1,600,896 1,625,863

Total current funds 17,470,836$ 20,936,558$ Total current funds 17,470,836$ 20,936,558$

(CONTINUED)

Page 73


BALANCE SHEETSJUNE 30, 2017 and 2016

2017 2016 2017 2016

ASSETS LIABILITIES AND FUND BALANCES

Endowment fund: Endowment fund:Cash -$ -$ Fund balance - true endowment 835,685$ 825,765$

Interfund balances 835,685 825,765

Total endowment fund 835,685$ 825,765$ Total endowment fund 835,685$ 825,765$

Plant funds: Plant funds:Unexpended: Unexpended:

Cash -$ -$ Accounts payable 846,516$ 1,018,758$

Security deposits 105 1,000 Current portion of long term debt 25,006 25,005

Accounts receivable Long term debt 124,980 149,985

Federal, state, county and local 3,983,710 1,605,232 Interfund balances 2,173,510 -

Other 64,416 -

Interfund balances - 472,937 Fund balances:

Restricted expendable 878,219 885,421

878,219 885,421

Total unexpended plant funds 4,048,231 2,079,169 Total unexpended plant funds 4,048,231 2,079,169

Investment in plant: Investment in plant:

Land 2,370,097 2,370,097 Fund balance 75,289,360 70,698,513

Construction in progress 7,890,472 1,656,439

Land improvements 917,155 1,076,555

Infrastructure 671,266 195,890

Buildings and improvements 57,072,662 58,103,840

Other improvements 5,568 5,952

Furniture and equipment 4,770,709 5,525,858

Library books and audio equipment 67,460 86,121

Other assets 1,523,971 1,677,761

Total investment in plant 75,289,360 70,698,513 Total investment in plant 75,289,360 70,698,513

Total plant funds 79,337,591$ 72,777,682$ Total plant funds 79,337,591$ 72,777,682$

Page 74


STATEMENT OF CHANGES IN FUND BALANCESFOR THE FISCAL YEAR ENDED JUNE 30, 2017

Endowment

Fund

Investment

Unrestricted Restricted Unexpended in Plant

Revenues and other additions:

Educational and general revenues 37,109,342$ 346,287$

Sales and services auxiliary enterprises 127,708

Federal, state and county grants and contracts - restricted 16,650,245$

Private gifts, grants and contracts - restricted 586,768 9,861$

Chargeback minor capital 871

State pension contribution 577,873

Insurance proceeds 291,976

Investment and other income 95,843 5,037

Restricted appropriations 9,269,879

Funds for plant facilities 3,021,059$

Capital funded by operations 373,397

Proceeds - sale of assets 2,064

Total revenues and other additions 37,910,766 17,242,050 9,861 9,909,013 3,396,520

Expenditures and other deductions:

Educational and general expenditures 39,253,289 17,394,069

Auxiliary enterprises expenditures 128,936

Depreciation and amortization expense 5,028,518

Expansion of plant facilities 57,550 125,164 3,773,370

Total expenditures and other deductions 39,439,775 17,519,233 - 3,773,370 5,028,518

Transfers among funds:

Non-mandatory:

Plant fund (80,000) 80,000

Endowment fund (59) 59

Restricted fund 219 (219)

Other transfers

Interfund transfers 11,188 (11,188)

Construction in progress (6,234,033) 6,234,033

Net transfers (79,781) (278) 59 (6,142,845) 6,222,845

Net increase (decrease) (1,608,790) (277,461) 9,920 (7,202) 4,590,847

Fund balance, beginning of year 8,935,790$ 711,369$ 825,765$ 885,421$ 70,698,513$

Fund balance, end of year 7,327,000$ 433,908$ 835,685$ 878,219$ 75,289,360$

Current Funds Plant Funds

Page 75


STATEMENT OF CURRENT FUND REVENUES, EXPENDITURESAND OTHER CHANGES

FOR THE FISCAL YEAR ENDED JUNE 30, 2017

Unrestricted Restricted Total

Revenues:

Tuition and fees 22,566,649$ 22,566,649$

Appropriations:

State 5,974,625 5,974,625

Local 8,430,448 8,430,448

Chargebacks 70,427 70,427

Grants and contracts:

Federal, state and local 248,232 16,802,264$ 17,050,496

Private gifts, grants and contracts 586,768 586,768

Sales and services of educational departments 67,627 67,627

Sales and services auxiliary enterprises 127,708 127,708

Other sources 722,000 5,037 727,037

Total current revenues 38,207,716 17,394,069 55,601,785

Expenditures:

Educational and general:

Instruction 13,363,113 612,916 13,976,029

Public service 35,621 697,960 733,581

Academic support 4,151,964 537,674 4,689,638

Student services 4,829,018 736,636 5,565,654

Institutional support 9,955,435 70,000 10,025,435

Operation and maintenance of plant 6,918,138 34,938 6,953,076

Scholarship and other student aid 296,950 14,703,945 15,000,895

Total education and general expenditures 39,550,239 17,394,069 56,944,308

Auxiliary enterprises 128,936 128,936

Total expenditures 39,679,175 17,394,069 57,073,244

Transfers among funds and other additions:

Non-mandatory:

Plant fund (80,000) (80,000)

Endowment fund (59) (59)

Restricted fund 219 (219)

Expansion of plant facilities (57,550) (125,164) (182,714)

Other

Excess of expenditures and transfers

over restricted revenues (152,019) (152,019)

Net transfers (137,331) (277,461) (414,792)

Net decrease in fund balances (1,608,790)$ (277,461)$ (1,886,251)$

Page 76

Original Adjusted Actual Variance fromBudget Revised Budget Activity Original Budget

Current Unrestricted IncomeGeneral Education:

Credit Tuition 16,875,254$ 15,756,411$ 15,624,606$ (1,250,648)$

Continuing Education 1,250,000 1,070,000 990,872 (259,128)

Student Fees 5,859,606 5,659,231 5,654,221 (205,385)

Government Appropriations:

Atlantic County 6,760,246 6,760,246 6,760,246 -

Cape May County 1,670,202 1,670,202 1,670,202 -

State of New Jersey 5,580,000 5,396,753 5,396,752 (183,248)

Chargeback 114,798 72,605 70,427 (44,371)

Other Source (includes Investment Income, Bookstore

and Vending Commissions, Rents, Conferencing) 765,000 843,476 1,037,858 272,858

Total Education and General Income 38,875,106 37,228,924 37,205,184 (1,669,922)

ABP Reimbursement 600,000 570,000 577,873 (22,127)

Adjusted Education and General Income 39,475,106 37,798,924 37,783,057 (1,692,049)

Current Unrestricted ExpensesInstructional 13,540,475 13,492,077 13,363,113 (177,362)

Public Service 17,701 35,808 35,621 17,920

Academic Support 4,488,875 4,231,192 4,194,522 (294,353)

Student Services 4,922,453 4,839,649 4,829,018 (93,435)

Institutional Support 10,300,052 10,043,188 9,970,427 (329,625)

Plant Operations and Maintenance 7,330,444 6,943,670 6,918,137 (412,307)

Total Education and General Expenditures 40,600,000 39,585,584 39,310,838 (1,289,162)

Education and General Operating Margin (1,124,894)$ (1,786,660)$ (1,527,781) (402,887)$

**

Non-Mandatory Transfers

From Current Restricted funds for Beacons professor 219

To Plant Fund Board Resolution #7 Content Management System (80,000)

Auxiliary Enterprises (1,228)

Adjusted Operating Margin (1,608,790)$

**Note: Mandatory and non-mandatory transfers requiring use of funds from the current unrestricted fund

balance are recorded as additions or deductions from the current year operations in the above schedule.


FOR THE FISCAL YEAR ENDED JUNE 30, 2017BUDGET COMPARISON TO ACTUAL

Page 77

Current unrestricted fund:

Educational and general:

Instruction $9,407,106

Public service 1,036

Academic support 2,670,040

Student services 2,811,329

Institutional support 5,000,052

Operations and maintenance of plant 2,644,018

Total educational and general expenditures 22,533,581

Auxiliary enterprises -

Total unrestricted salary expenditures 22,533,581

Restricted funds salary expenditures 1,375,026

Capital projects salary expenditures 74,115

Subtotal 23,982,722

Federal college work study program

included in Restricted funds salary expenditures (126,660)

Total salary expenditures $23,856,062

* This schedule presents wages only. Fringe benefits are not included.


SALARY EXPENDITURESFOR THE FISCAL YEAR ENDED JUNE 30, 2017

Page 78

SINGLE AUDIT SECTION


June 30, 2017

The following single audit financial information is provided in accordance with theTitle 2 U.S. Code of Federal Regulations Part 200 and New Jersey OMB Circular 15-08

REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND REPORT ON INTERNAL CONTROLOVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE AND

STATE OF NEW JERSEY CIRCULAR 15-08-OMB

INDEPENDENT AUDITOR’S REPORT

Board of TrusteesAtlantic Cape Community CollegeMays Landing, New Jersey 08330

Report on Compliance for Each Major Federal and State Program

We have audited Atlantic Cape Community College’s (the “College”), compliance with the types of compliance requirements described in the OMB Compliance Supplement and the New Jersey State Grant Compliance Supplement that could have a direct and material effect on each of the College’s major federal and state programs for the fiscal year ended June 30, 2017. The College’s major federal and state programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs.

Management’s Responsibility

Management is responsible for compliance with federal and state statutes, regulations, and the terms and conditions of its federal and state awards applicable to its federal and state programs.

Auditor’s Responsibility

Our responsibility is to express an opinion on compliance for each of the College’s major federal and state programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); and State of New Jersey Circular 15-08-OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Those standards, the Uniform Guidance, and State of New Jersey Circular 15-08-OMB, require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal or state program occurred. An audit includes examining, on a test basis, evidence about the College’s compliance with thoserequirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal and state program. However, our audit does not provide a legal determination of the College’s compliance.

Opinion on Each Major Federal and State Program

In our opinion, Atlantic Cape Community College complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal and state programs for the fiscal year ended June 30, 2017.

Page 79

Report on Internal Control Over Compliance

Management of Atlantic Cape Community College is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the College’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal or state program to determine theauditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal or state program and to test and report on internal control over compliance in accordance with the Uniform Guidance and State of New Jersey Circular 15-08-OMB, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the College’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal or state program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might bematerial weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance and State of New Jersey Circular 15-08-OMB. Accordingly, this report is not suitable for any otherpurpose.


BOWMAN & COMPANY LLPCertified Public Accountants& Consultants

Woodbury, New JerseyDecember 22, 2017

Page 80

AWARD FY17 AMOUNT FY17 FY17 PASS- CUMULATIVE DUE TOCFDA GRANT ID GRANT AUTHOR- CASH RECEIVED RETURN TO GRANT THROUGH TO GRANT ACCOUNTS DEFERRED GRANTOR AT

NUMBER NUMBER PERIOD IZATIONS RECEIVED TO DATE GRANTOR EXPENDITURES TRANSFER SUBRECIPIENTS EXPENDITURES RECEIVABLE REVENUE 6/30/2017

U.S. DEPARTMENT OF EDUCATION: (DIRECT FUNDING) Student Financial Aid Cluster: Federal Pell Grant Program- Authorization 84.063 P063P161803 7/1/16-8/31/17 11,815,901$ 11,348,136$ 11,348,136$ (110,387)$ 11,815,901$ 11,815,901$ 578,152$ Federal Pell Grant Program- ACA 84.063 P063Q161803 7/1/16-8/31/17 18,450 15,235 15,235 18,450 18,450 3,215 Federal Pell Grant Program- Authorization 84.063 P063P151803 7/1/15-8/31/16 13,207,393 509,978 13,210,245 (2,852) 12,608 13,207,393 Federal Pell Grant Program- ACA 84.063 P063Q151803 7/1/15-8/31/16 20,170 3,545 20,015 155 20,170 155 Federal Pell Grant Program- Authorization 84.063 P063P141803 7/1/14-8/31/15 14,682,514 14,682,622 (108) 14,682,514 Federal Pell Grant Program- ACA 84.063 P063Q141803 7/1/14-8/31/15 22,445 30 22,445 22,445

11,876,924 39,298,698 (113,347) 11,847,114 39,766,873 581,522

Federal Supplemental Educational Opportunity Grants 84.007 P007A162529 7/1/16-8/31/17 151,903 110,685 110,685 172,760 (20,857)$ 151,903 41,218 Federal Supplemental Educational Opportunity Grants 84.007 P007A152529 7/1/15-8/31/16 186,959 44,559 186,959 4,715 186,959

155,244 297,644 172,760 (16,142) 338,862 41,218

Federal Work-Study Program 84.033 P033A162529 7/1/16-6/30/17 165,869 117,272 117,272 141,568 7,715 149,283 32,011 Federal Work-Study Program 84.033 P033A152529 7/1/15-6/30/16 184,105 8,427 184,105 8,427 184,105

125,699 301,377 141,568 16,142 333,388 32,011

Federal Direct Student Loans - Subsidized 84.268 P268K171803 7/1/16-8/31/17 3,022,398 3,022,398 3,022,398 3,022,398 3,022,398 Federal Direct Student Loans - Unsubsidized 84.268 P268K171803 7/1/16-8/31/17 2,354,110 2,354,110 2,354,110 2,354,110 2,354,110 Federal Direct Student Loans - PLUS 84.268 P268K171803 7/1/16-8/31/17 195,384 195,384 195,384 195,384 195,384

5,571,892 5,571,892 5,571,892 5,571,892

Total Student Financial Aid Cluster 17,729,759 45,469,611 (113,347) 17,733,334 46,011,015 654,751

Student Support Services 84.042 P042A0101092 9/1/16-8/31/17 310,110 195,332 195,332 213,877 213,877 18,545 Student Support Services 84.042 P042A0101092 9/1/15-8/31/16 292,340 66,974 280,386 50,763 280,386

262,306 475,718 264,640 494,263 18,545

(PASS THROUGH NEW JERSEY DEPARTMENT OF EDUCATION) Career and Technical Education - Basic Grants to States 84.048 PSFS017101 7/1/16-6/30/17 479,851 401,820 401,820 459,388 459,388 57,568 Career and Technical Education - Basic Grants to States 84.048 PSFS017101 7/1/15-6/30/16 484,521 249,498 482,544 482,544

651,318 884,364 459,388 941,932 57,568

Gaining Early Awareness and Readiness for Undergraduate Programs 84.334 17YR6-809170-0007 9/26/16-9/25/17 284,200 267,490 267,490 174,210 174,210 93,280$ Gaining Early Awareness and Readiness for Undergraduate Programs 84.334 16YR5-809170-0007 9/26/15-9/25/16 284,200 66,840 267,490 (2,422) 90,856 265,068 Gaining Early Awareness and Readiness for Undergraduate Programs 84.334 17YR6-809170-0007 11/18/16-5/31/17 7,676 7,676 7,676 6,921 6,921 755$ Gaining Early Awareness and Readiness for Undergraduate Programs 84.334 16YR5-809170-0007 11/7/14-5/31/15 25,856 12,020 12,020 12,020

354,026 554,676 (2,422) 271,987 458,219 93,280 755

1,005,344 1,439,040 (2,422) 731,375 1,400,151 57,568 93,280 755

(PASS THROUGH NEW JERSEY COUNCIL OF COMMUNITY COLLEGES) College Access Challenge Grant Program 84.378A N/A 9/1/16-7/30/17 31,475 18,627 18,627 18,627 College Access Challenge Grant Program 84.378A N/A 9/1/16-6/30/17 20,000 16,460 16,460 16,460 College Access Challenge Grant Program 84.378A N/A 6/1/15-8/31/16 34,066 16,378 34,066 34,066

16,378 34,066 35,087 69,153 35,087

(PASS THROUGH NJ DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT) Adult Education - Basic Grants to States 84.002 ABS-FY2017 7/1/16-6/30/17 650,300 487,836 487,836 621,093 326,859$ 621,093 133,257 Adult Education - Basic Grants to States 84.002 ABS-FY2016 7/1/15-6/30/16 672,900 119,426 656,423 656,423

607,262 1,144,259 621,093 326,859 1,277,516 133,257

Total U.S. Department of Education 19,621,049 48,562,694 (115,769) 19,385,529 326,859 49,252,098 899,208 93,280 755

BALANCE JUNE 30, 2017

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSATLANTIC CAPE COMMUNITY COLLEGE


(CONTINUED)

Page 81

AWARD FY17 AMOUNT FY17 FY17 PASS- CUMULATIVE DUE TOCFDA GRANT ID GRANT AUTHOR- CASH RECEIVED RETURN TO GRANT THROUGH TO GRANT ACCOUNTS DEFERRED GRANTOR AT

NUMBER NUMBER PERIOD IZATIONS RECEIVED TO DATE GRANTOR EXPENDITURES TRANSFER SUBRECIPIENTS EXPENDITURES RECEIVABLE REVENUE 6/30/2017


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSATLANTIC CAPE COMMUNITY COLLEGE


U.S. DEPARTMENT OF LABOR: (DIRECT FUNDING) Trade Adjustment Assistance 17.245 TC250631360A34 10/1/13-9/30/17 1,027,886$ 283,418$ 944,812$ 211,239$ 958,157$ 13,345$

283,418 944,812 211,239 958,157 13,345

(PASS THROUGH NJ DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT)Workforce Investment Act (WIA) National Emergency Grants Atlantic City Re-employment Project (Literacy) 17.277 N/A 12/15/14-6/30/17 1,216,500 38,900 1,005,000 118,200 1,084,300 79,300 (PASS THROUGH ATLANTIC CAPE MAY WORKFORCE INVESTMENT BOARD) WORK AC 17.277 N/A 2/1/17-6/30/17 318,143 15,378 15,378 76,959 33,258$ 76,959 61,581

54,278 1,020,378 195,159 33,258 1,161,259 140,881

(PASS THROUGH ATLANTIC CAPE MAY WORKFORCE INVESTMENT BOARD)WIA Youth Activities Cape May County Out of School Youth 17.259 K.15.273B 12/1/15-6/30/16 90,000 6,374 10,437 10,437

6,374 10,437 10,437

(PASS THROUGH NEW JERSEY COMMUNITY COLLEGE CONSORTIUM) H-1B Job Training Grants 17.268 N/A 2/1/17-9/30/18 250,000 12,268 12,268 12,268

12,268 12,268 12,268

Total U.S. Department of Labor 344,070 1,975,627 418,666 33,258 2,142,121 166,494

NATIONAL AERONAUTICS AND SPACE ADMINISTRATON (NASA): (PASS THROUGH RUTGERS UNIVERSITY) Education -Unmanned Aircraft Systems 43.008 NNX14AR02A 5/15/16-8/1/17 19,950 18,820 18,820 18,820 Science - K-12 STEM Outreach in Atlantic County, NJ 43.001 5516 1/15/15-8/12/16 10,000 2,412 5,520 5,520

Total NASA 2,412 5,520 18,820 24,340 18,820

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES: (PASS THROUGH KEAN UNIVERSITY PROFESSIONAL IMPACT NJ) Child Care and Development Block Grant 93.575 2016G996005 9/24/16-6/30/17 97,981 62,531 62,531 82,600 82,600 20,069 Child Care and Development Block Grant 93.575 2016G996005 5/1/15-9/23/16 373,064 62,903 109,513 27,887 109,513

125,434 172,044 110,487 192,113 20,069

(PASS THROUGH DISABILITY RIGHTS NJ) ACL Assistive Technology 93.464 N/A 4/1/17-9/30/17 10,000 4,429 4,429 4,429

4,429 4,429 4,429

Total U.S. Department of Health and Human Services 125,434 172,044 114,916 196,542 24,498

NATIONAL SCIENCE FOUNDATION (PASS THROUGH FLORENCE-DARLINGTON TECHNICAL COLLEGE) Education and Human Resources 47.076 1501183 1/11/17-6/30/17 2,400 2,056 2,056 2,056 2,056

Total National Science Foundation 2,056 2,056 2,056 2,056

Total Federal Aid 20,095,021$ 50,717,941$ (115,769)$ 19,939,987$ -$ 360,117$ 51,617,157$ 1,109,020$ 93,280$ 755$

The accompanying Notes to the Financial Statements and Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance are an integral part of this schedule.

Page 82

AWARD FY17 AMOUNT FY17 FY17 PASS- CUMULATIVE DUE TOGRANT AUTHORIZ- CASH RECEIVED RETURN TO GRANT THROUGH TO GRANT ACCOUNTS DEFERRED GRANTOR AT

GRANT ID NUMBER PERIOD ATIONS RECEIVED TO DATE GRANTOR EXPENDITURES SUBRECIPIENTS EXPENDITURES RECEIVABLE REVENUE 6/30/2017

STUDENT FINANCIAL AID CLUSTER: NEW JERSEY COMMISSION ON HIGHER EDUCATION: Educational Opportunity Fund (EOF) Article III 100-074-2401-001 7/1/16-6/30/17 189,148$ 170,435$ 170,435$ (11,741)$ 151,211$ 151,211$ 7,483$

Educational Opportunity Fund (EOF) Article III - Summer 100-074-2401-001 7/1/16-6/30/17 31,364 31,364 31,364 31,364 31,364

Educational Opportunity Fund (EOF) Article III - Summer 100-074-2401-001 7/1/17-6/30/18 34,814 10,000 10,000 10,000$

NEW JERSEY HIGHER EDUCATION STUDENT ASSISTANCE AUTHORITY: Tuition Aid Grant (TAG) 100-074-2405-007 7/1/16-6/30/17 1,558,835 1,656,456 1,656,456 (78,045) 1,558,835 1,558,835 19,576

Tuition Aid Grant (TAG) 100-074-2405-007 7/1/15-6/30/16 1,668,598 254 1,670,663 (2,065) 1,668,598

Tuition Aid Grant (TAG) 100-074-2405-007 7/1/14-6/30/15 1,911,920 1,910,206 (53) 1,910,153

NJ Stars Program 100-074-2405-313 7/1/16-6/30/17 249,316 250,194 250,194 249,316 249,316 878

NJ Stars Program 100-074-2405-313 7/1/15-6/30/16 262,988 1,672 262,988 262,988

New Jersey Class Loans N/A 7/1/16-6/30/17 144,053 144,053 144,053 144,053 144,053

Total Student Financial Aid Cluster 2,264,428 6,106,359 (91,904) 2,134,779 5,976,518 10,000 27,937

NEW JERSEY OFFICE OF THE SECRETARY OF HIGHER EDUCATION: Educational Opportunity Fund (EOF) Article IV 100-074-2401-002 7/1/16-6/30/17 203,507 203,507 203,507 203,507 203,507

College Bound 100-074-2400-012 9/26/16-6/30/17 50,000 50,000 50,000 42,514 42,514 7,486

College Bound 100-074-2400-012 9/26/15-6/30/16 50,000 50,000 (12,317) 37,683

Building our Future Bond Act 586-074-2400-019 3/1/14-Completion 2,676,394 793,549 919,937 1,745,942 1,977,053 1,057,116$

Building our Future Bond Act 586-074-2400-020 3/1/14-Completion 2,984,039 142,086 2,984,039 2,984,039

Building our Future Bond Act 586-074-2400-021 3/1/14-Completion 680,062 16,208 512,307 167,755 680,062 167,755

Building our Future Bond Act 586-074-2400-022 3/1/14-Completion 500,620 18,807 416,915 416,979 64

970,650 4,833,198 1,913,697 6,058,133 1,224,935

1,224,157 5,136,705 (12,317) 2,159,718 6,341,837 1,224,935 7,486

NEW JERSEY DEPARTMENT OF TREASURY HIGHER EDUCATION ADMINISTRATION: Operational Costs - County Colleges 100-082-2155-015 7/1/16-6/30/17 5,396,752 5,396,752 5,396,752 5,396,752 5,396,752

Employer Contributions - Alternate Benefits Program 100-082-2155-017 7/1/16-6/30/17 577,873 413,318 413,318 577,873 577,873 164,555

Employer Contributions - Alternate Benefits Program 100-082-2155-017 7/1/15-6/30/16 624,119 166,826 624,119 624,119

P.L. 1971, Chapter 12 Debt Service 100-082-2155-016 7/1/16-6/30/17 3,372,510 2,612,095 3,372,510 3,372,510 1,216,308

8,588,991 6,434,189 9,347,135 9,971,254 1,380,863

NEW JERSEY DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT: (PASS THROUGH NORTHEAST CARPENTERS APPRENTICE TRAINING)

NJ Build N/A 9/1/16-12/30/16 15,125 7,962 7,962 7,962 7,962

7,962 7,962 7,962 7,962

NEW JERSEY DEPARTMENT OF HEALTH AND HUMAN SERVICES: Director's Orientation N/A 2/2/16-12/30/16 18,138 10,181 10,181 4,918 10,181

10,181 10,181 4,918 10,181

(PASS THROUGH ATLANTIC COUNTY WORKFORCE DEVELOPMENT BOARD)

TANF/Adult Basic Education Program N/A 7/5/16-6/30/17 76,261 47,339 47,339 59,181 59,181 11,842

TANF/Adult Basic Education Program N/A 10/19/15-6/30/16 52,714 18,168 46,986 46,986

TANF/Front Desk Agent Training N/A 5/1/16-6/30/16 11,433 4,296 4,296 4,296

69,803 98,621 59,181 110,463 11,842

DEPARTMENT OF COMMUNITY AFFAIRS: Code Official Tution Remission 100-022-8015-036 7/1/15-6/30/16 10,000 15,660 15,660 15,660

15,660 15,660 15,660

Total State Financial Assistance 12,181,182$ 17,809,677$ (104,221)$ 13,713,693$ $ 22,433,875$ 2,617,640$ 17,486$ 27,937$

ATLANTIC CAPE COMMUNITY COLLEGESCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE


The accompanying Notes to the Financial Statements and Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance are an integral part of this schedule.


Page 83

ATLANTIC CAPE COMMUNITY COLLEGE Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance

For the Fiscal Year Ended June 30, 2017 Note 1: BASIS OF PRESENTATION

The accompanying schedules of expenditures of federal awards and state financial assistance (“the schedules”) include federal and state award activity of Atlantic Cape Community College (hereafter referred to as the “College”). The College is defined in note 1 to the College's basic financial statements. The information in these schedules is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and State of New Jersey Circular 15-08-OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. All federal and state awards received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies, are included on the schedules. Because these schedules present only a selected portion of the operations of the College, it is not intended to and does not present the financial position and changes in operations of the College. Accordingly, some amounts presented in the respective schedules may differ from amounts presented in, or used in the preparation of, the College’s June 30, 2017 financial statements.

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying schedules are presented using the accrual basis of accounting as described in note 2 to the College's basic financial statements. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and State of New Jersey Circular 15-08-OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid, wherein certain types of expenditures are not allowed or are limited as to reimbursement.

Note 3: INDIRECT COST RATE The College has elected not to use the 10-percent de minimis indirect cost rate allowed under Uniform Guidance.

Note 4: OTHER STUDENT LOAN PROGRAMS The College is responsible only for the performance of certain administrative duties with respect to Federal Direct Student Loans and New Jersey Class Loans; accordingly, these loans balances are not included in the College’s basic financial statements. It is not practical to determine the balance of loans outstanding to students of the College under these programs as of June 30, 2017.

Note 5: MAJOR PROGRAMS

Major programs are identified in the Summary of Auditor's Results section of the Schedule of Findings and Questioned Costs.

Page 84

Section 1- Summary of Auditor's Results

Financial Statements

Type of auditor's report issued

Internal control over financial reporting:

Material weakness(es) identified? yes X no

Significant deficiency(ies) identified? yes X none reported

Noncompliance material to financial statements noted? yes X no

Federal Awards

Internal control over major programs:



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

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

with Section 516 of Title 2 U.S. Code of Federal Regulations Part 200,

Uniform Administrative Requirements, Cost Principles, and Audit

Requirements for Federal Awards (Uniform Guidance)? yes X no

Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

Student Financial Aid Cluster:

Federal PELL Grant Program

Federal Supplemental Educational Opportunities Grants

Federal Work-Study Program

Federal Direct Student Loans

Dollar threshold used to determine Type A programs

Auditee qualified as low-risk auditee? X yes no


Schedule of Findings and Questioned Costs

For the Fiscal Year Ended June 30, 2017

750,000$

84.063

84.007

84.268

84.042 Student Support Services

Unmodified

Unmodified

84.033

Page 85

Section 1- Summary of Auditor's Results (Cont'd)

State Financial Assistance

Internal control over major programs:



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

Any audit findings disclosed that are required to be reported in

accordance with New Jersey Circular 15-08-OMB? yes X no

Identification of major programs:

GMIS Number(s) Name of State Program

P.L. 1971, Chapter 12 Debt Service

Dollar threshold used to determine Type A programs

Auditee qualified as low-risk auditee? X yes no


Schedule of Findings and Questioned Costs

750,000$

100-082-2155-016

Unmodified


Page 86

ATLANTIC CAPE COMMUNITY COLLEGESchedule of Findings and Questioned Costs


Section 2- Schedule of Financial Statement Findings

This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance related to the financial statements that are required to be reported in accordance with Government Auditing Standards.

No Current Year Findings

Section 3- Schedule of Federal Award Findings and Questioned Costs

This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including questioned costs, related to the audit of major Federal programs, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).


Section 4- Schedule of State Financial Assistance Findings and Questioned Costs

This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including questioned costs, related to the audit of major State programs, as required by State of New Jersey Circular 15-08-OMB.


Page 87

ATLANTIC CAPE COMMUNITY COLLEGESummary Schedule of Prior Year Audit Findings

and Questioned Costs as Prepared by Management

This section identifies the status of prior year findings related to the financial statements and federal awards and state financial assistance that are required to be reported in accordance with Government Auditing Standards, Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and State of New Jersey Circular 15-08-OMB.

FINANCIAL STATEMENT FINDINGS

No Prior Year Findings

FEDERAL AWARDS


STATE FINANCIAL ASSISTANCE PROGRAMS


Page 88

STATISTICAL SECTION

(UNAUDITED)

Financial Trends Information

Financial trends information is intended to assist the user in understanding and assessing how the College’s financial position has changed over time. Please refer to

the following schedules for a historical view of the College’s financial performance.

ATLANTIC CAPE COMMUNITY COLLEGENET POSITION BY COMPONENT

LAST TEN FISCAL YEARS(UNAUDITED)

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Investment in Capital Assets 75,289,360$ 70,698,513$ 67,194,490$ 61,456,749$ 47,644,622$ 47,296,098$ 48,252,911$ 47,149,289$ 46,140,245$ 44,186,457$ Restricted - expendable 3,158,309 3,547,177 3,680,323 4,057,005 5,182,967 5,874,091 5,754,594 5,288,263 6,898,483 5,439,365 Restricted - nonexpendable 835,685 825,765 817,160 807,479 791,954 790,704 778,699 762,605 747,218 730,273 Unrestricted (Deficit) (27,279,336) (23,603,807) (22,816,930) 7,212,590 5,494,227 4,635,171 4,351,237 5,426,741 3,561,662 7,082,888

Total Net Position 52,004,018$ 51,467,648$ 48,875,043$ 73,533,823$ 59,113,770$ 58,596,064$ 59,137,441$ 58,626,898$ 57,347,608$ 57,438,983$

Note: GASB Statement No. 68 was implemented for June 30, 2015 year end.

Source: Comprehensive Annual Financial Reports of the College

For the Year Ended June 30,

Page 89

June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30,2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Academic Space Net assignable square feet 167,629 167,629 167,629 117,214 117,214 117,214 117,214 117,214 117,214 117,214 Mays Landing 93,879 93,879 93,879 65,964 65,964 65,964 65,964 65,964 65,964 65,964 Worthington Atlantic City 53,182 53,182 53,182 30,682 30,682 30,682 30,682 30,682 30,682 30,682 Cape May County 20,568 20,568 20,568 20,568 20,568 20,568 20,568 20,568 20,568 20,568

Libraries 3 3 3 3 3 3 3 3 3 3 Number of volumes 67,352 76,315 75,927 75,574 74,999 74,657 79,516 80,538 80,538 80,237 Mays Landing 55,001 64,122 63,856 63,570 63,152 63,614 69,067 70,089 70,089 71,575 Worthington Atlantic City 4,272 4,192 4,130 4,090 4,012 3,378 2,878 2,878 2,878 1,646 Cape May County 8,079 8,001 7,941 7,914 7,835 7,665 7,571 7,571 7,571 7,016

Administrative and support buildings Net assignable square feet 181,959 181,959 181,959 181,959 181,959 181,959 181,959 181,959 181,959 181,959 Mays Landing 134,846 134,846 134,846 134,846 134,846 134,846 134,846 134,846 134,846 134,846 Worthington Atlantic City 22,662 22,662 22,662 22,662 22,662 22,662 22,662 22,662 22,662 22,662 Cape May County 24,451 24,451 24,451 24,451 24,451 24,451 24,451 24,451 24,451 24,451

Athletic facilities Practice and intramural fields 3 3 3 3 3 3 3 3 3 3 Gymnasiums 1 1 1 1 1 1 1 1 1 1

Transportation Vehicles 12 12 12 11 10 10 9 8 8 7 Parking capacity 1,882 1,882 1,882 1,892 1,897 1,897 1,897 1,897 1,897 1,897 Mays Landing 1,308 1,308 1,308 1,318 1,358 1,358 1,358 1,358 1,358 1,358 Worthington Atlantic City 256 256 256 256 238 238 238 238 238 238 Cape May County 318 318 318 318 301 301 301 301 301 301

Source: College records

ATLANTIC CAPE COMMUNITY COLLEGECAPITAL ASSET INFORMATION

For the Year Ended


Page 90

$0

$10

$20

$30

$40

$50

$60

$70

FY2017 FY2016 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008

Millions

Auxillary enterprises: Student activities

Other revenues

Capital gifts and grants

Capital appropriations

Other nonoperating revenues

Investment income

Gifts

County appropriations

State appropriations

Federal appropriations

Other operating revenues

Sales and services of educational departments

Nongovernmental grants and contracts

State and local grants and contracts

Federal grants and contracts

Student Tuition and Fees

ATLANTIC CAPE COMMUNITY COLLEGEREVENUES BY SOURCE


Page 91

ATLANTIC CAPE COMMUNITY COLLEGEREVENUES BY SOURCELAST TEN FISCAL YEARS

(UNAUDITED)

FY2017 FY2016 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL

Student Tuition and Fees 23,657,536$ 24,820,999$ 25,635,567$ 26,239,396$ 25,869,285$ 25,819,320$ 26,559,492$ 26,510,080$ 22,338,957$ 20,840,756$ Allowances (11,193,510) (11,810,732) (12,905,396) (12,415,667) (12,043,355) (11,518,502) (12,476,637) (11,815,125) (8,735,556) (10,842,990)

Student tuition and fees, net 12,464,026 13,010,267 12,730,171 13,823,729 13,825,930 14,300,818 14,082,855 14,694,955 13,603,401 9,997,766Federal grants and contracts 14,368,475 16,721,372 17,596,061 17,477,807 17,295,837 17,539,247 18,520,866 16,776,653 10,575,236 9,152,202State and local grants and contracts 2,402,557 2,896,765 2,818,259 3,703,562 3,293,112 3,334,461 3,948,980 5,302,411 4,842,530 3,696,579Nongovernmental grants and contracts 127,445 123,422 54,304 74,410 75,248 76,902 82,825 25,379 10,878 505,438Sales and services of educational departments 67,627 75,981 82,304 115,185 123,409 111,018 131,342 133,421 134,523 146,108Other operating revenues 626,157 501,552 567,518 540,627 680,313 791,503 735,688 815,726 812,451 1,034,751

Operating Revenues 30,056,287 33,329,359 33,848,617 35,735,320 35,293,849 36,153,949 37,502,556 37,748,545 29,979,019 24,532,844

Federal appropriations 0 0 0 0 0 0 0 327,435 0 0State appropriations 5,974,625 6,126,540 6,194,910 6,208,042 6,240,332 6,376,982 6,240,731 6,393,479 6,930,883 7,505,206County appropriations 8,431,319 8,408,622 8,409,196 8,574,993 8,559,082 8,872,749 8,699,273 8,752,743 8,347,762 8,348,413Gifts 586,768 401,750 350,384 362,823 473,413 360,539 297,590 300,939 324,590 287,944Investment income 100,880 81,144 77,724 68,168 74,320 103,768 146,716 242,073 353,106 743,830Other nonoperating revenues 55,200 133,210 402 4,547 67,378 0 0 0

Nonoperating revenues 15,093,592 15,018,056 15,087,414 15,347,236 15,347,549 15,718,585 15,451,688 16,016,669 15,956,341 16,885,393

Capital appropriations 9,269,879 7,254,485 8,502,101 15,476,336 2,686,732 1,457,962 2,045,672 1,956,866 1,695,202 3,222,746Capital gifts and grants 0 0 0 0 0 0 350,000 0 0 22,340Other revenues 294,040 12,988 22,115 25,825 208,830 53,931 0 3,667 0 0

Auxillary enterprises: Student activities 127,708 140,656 148,771 152,908 156,871 151,205 145,359 201,519 119,808 115,165

54,841,506$ 55,755,544$ 57,609,018$ 66,737,625$ 53,693,831$ 53,535,632$ 55,495,275$ 55,927,266$ 47,750,370$ 44,778,488$


Student Tuition and Fees 43.14% 44.52% 44.50% 39.32% 48.18% 48.23% 47.86% 47.40% 46.78% 46.54%Allowances -20.41% -21.18% -22.40% -18.60% -22.43% -21.52% -22.48% -21.13% -18.29% -24.21%

Student tuition and fees, net 22.73% 23.33% 22.10% 20.71% 25.75% 26.71% 25.38% 26.28% 28.49% 22.33%Federal grants and contracts 26.20% 29.99% 30.54% 26.19% 32.21% 32.76% 33.37% 30.00% 22.15% 20.44%State and local grants and contracts 4.38% 5.20% 4.89% 5.55% 6.13% 6.23% 7.12% 9.48% 10.14% 8.26%Nongovernmental grants and contracts 0.23% 0.22% 0.09% 0.11% 0.14% 0.14% 0.15% 0.05% 0.02% 1.13%Sales and services of educational departments 0.12% 0.14% 0.14% 0.17% 0.23% 0.21% 0.24% 0.24% 0.28% 0.33%Other operating revenues 1.14% 0.90% 0.99% 0.81% 1.27% 1.48% 1.33% 1.46% 1.70% 2.31%

Operating Revenues 54.81% 59.78% 58.76% 53.55% 65.73% 67.53% 67.58% 67.50% 62.78% 54.79%

Federal appropriations 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.59% 0.00% 0.00%State appropriations 10.89% 10.99% 10.75% 9.30% 11.62% 11.91% 11.25% 11.43% 14.51% 16.76%County appropriations 15.37% 15.08% 14.60% 12.85% 15.94% 16.57% 15.68% 15.65% 17.48% 18.64%Gifts 1.07% 0.72% 0.61% 0.54% 0.88% 0.67% 0.54% 0.54% 0.68% 0.64%Investment income 0.18% 0.15% 0.13% 0.10% 0.14% 0.19% 0.26% 0.43% 0.74% 1.66%Other nonoperating revenues 0.00% 0.00% 0.10% 0.20% 0.00% 0.01% 0.12% 0.00% 0.00% 0.00%

Nonoperating revenues 27.52% 26.94% 26.19% 23.00% 28.58% 29.36% 27.84% 28.64% 33.42% 37.71%

Capital appropriations 16.90% 13.01% 14.76% 23.19% 5.00% 2.72% 3.69% 3.50% 3.55% 7.20%Capital gifts and grants 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.63% 0.00% 0.00% 0.05%Other revenues 0.54% 0.02% 0.04% 0.04% 0.39% 0.10% 0.00% 0.01% 0.00% 0.00%

Auxillary enterprises: Student activities 0.23% 0.25% 0.26% 0.23% 0.29% 0.28% 0.26% 0.36% 0.25% 0.26%

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

(Excludes Additions to Permanent Endowments)

Source: Statement of Revenues, Expenses, and Changes in Net Position by Year

Page 92

ATLANTIC CAPE COMMUNITY COLLEGE REVENUE BY SOURCE

CURRENT UNRESTRICTED OPERATING FUNDLAST TEN FISCAL YEARS

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45


Millions

Federal Support

Other sources

Investment Income

Chargebacks

County Support

State Support

Tuition and Fees



(UNAUDITED)

Page 93



(UNAUDITED)


Source:Credit Tuition and fees 21,278,827$ 22,290,697$ 22,695,549$ 23,806,989$ 23,655,952$ 23,583,454$ 24,094,514$ 24,114,811$ 20,552,466$ 18,882,710$ Non-Credit Programs 990,872 1,066,620 1,093,266 911,570 981,167 1,425,012 1,396,913 1,730,355 1,282,048 1,556,349Tuition and Fees 22,269,699 23,357,317 23,788,815 24,718,559 24,637,119 25,008,466 25,491,427 25,845,166 21,834,514 20,439,059Federal Support 327,435State Support 5,974,625 6,126,540 6,194,910 6,208,042 6,240,332 6,376,982 6,240,731 6,386,507 6,923,600 7,495,903County Support 8,430,448 8,407,171 8,407,171 8,572,942 8,556,807 8,869,741 8,695,901 8,749,715 8,344,984 8,344,985Chargebacks 70,427 94,387 121,428 117,892 126,161 168,919 176,978 162,821 155,926 202,496Investment Income 95,842 78,122 75,505 65,979 71,941 99,147 135,887 239,208 337,805 687,450Other sources 942,016 1,257,862 1,054,243 922,132 951,336 1,076,101 1,087,969 1,173,380 1,194,459 1,443,870TOTAL 37,783,057$ 39,321,399$ 39,642,072$ 40,605,546$ 40,583,696$ 41,599,356$ 41,828,893$ 42,884,232$ 38,791,288$ 38,613,763$


Source:Tuition and Fees 58.94% 59.40% 60.01% 60.87% 60.71% 60.12% 60.94% 60.27% 56.29% 52.93%Federal Support 0.76%State Support 15.81% 15.58% 15.63% 15.29% 15.38% 15.33% 14.92% 14.89% 17.85% 19.41%County Support 22.31% 21.38% 21.21% 21.11% 21.08% 21.32% 20.79% 20.40% 21.51% 21.61%Chargebacks 0.19% 0.24% 0.31% 0.29% 0.31% 0.41% 0.42% 0.38% 0.40% 0.52%Investment Income 0.25% 0.20% 0.19% 0.16% 0.18% 0.24% 0.32% 0.56% 0.87% 1.78%Other sources 2.50% 3.20% 2.66% 2.27% 2.34% 2.59% 2.60% 2.74% 3.08% 3.74%TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Source: Schedules of Budget Comparison To Actual

Page 94

$‐

$10

$20

$30

$40

$50

$60


Millions

Student activities

Scholarship and student aid

Travel

Depreciation and amortization

Rent

Repairs and Maintenance

Insurance

Utilities and telephone

Supplies and other

Fringe Benefits

Salaries and Wages

ATLANTIC CAPE COMMUNITY COLLEGEEXPENDITURES BY NATURAL CLASSIFICATION


Page 95

ATLANTIC CAPE COMMUNITY COLLEGE EXPENDITURES BY NATURAL CLASSIFICATION



CompensationSalaries and Wages 23,856,062$ 24,805,205$ 24,392,423$ 24,363,547$ 25,182,142$ 25,932,657$ 26,042,735$ 25,748,467$ 24,043,673$ 22,546,608$ Fringe Benefits 11,987,261 9,877,457 9,238,260 9,220,697 9,396,685 9,444,598 9,251,407 9,185,974 8,178,840 7,415,550Total Compensation 35,843,323 34,682,662 33,630,683 33,584,244 34,578,827 35,377,255 35,294,142 34,934,441 32,222,513 29,962,158Other ExpendituresSupplies and other 5,843,985 5,539,948 5,002,350 5,259,621 4,727,285 4,551,334 5,260,160 5,812,193 5,082,017 4,929,781Utilities and telephone 1,566,252 1,633,870 1,633,998 1,562,308 1,512,753 1,631,160 1,715,466 1,562,032 1,652,343 1,687,197Insurance 723,061 725,052 704,949 689,991 612,880 509,798 445,557 448,801 389,917 414,480Repairs and Maintenance 153,213 148,320 222,468 83,864 200,638 512,892 492,257 606,210 781,201 445,893Rent 21,299 7,284 7,083 7,617 5,969 1,400 3,598 0 502 400Depreciation and amortization 5,028,518 4,662,374 3,946,402 3,401,444 3,344,763 3,230,751 3,100,293 2,969,975 2,682,852 2,524,332Travel 192,708 237,147 220,360 168,362 167,013 147,869 184,161 205,928 233,562 212,231

13,529,036 12,953,995 11,737,610 11,173,207 10,571,301 10,585,204 11,201,492 11,605,139 10,822,394 10,214,31449,372,359 47,636,657 45,368,293 44,757,451 45,150,128 45,962,459 46,495,634 46,539,580 43,044,907 40,176,472

Scholarship and student aid 4,481,558 5,262,088 6,210,634 7,290,880 7,578,634 8,257,089 8,405,427 8,049,883 4,732,931 4,104,374

Auxilliary enterprisesStudent activities 128,936 162,898 148,573 146,224 162,475 134,970 128,999 121,069 122,000 118,285

53,982,853$ 53,061,643$ 51,727,500$ 52,194,555$ 52,891,237$ 54,354,518$ 55,030,060$ 54,710,532$ 47,899,838$ 44,399,131$


Expenditures by Natural ClassificationCompensationSalaries and Wages 48.3% 52.1% 53.8% 54.4% 55.8% 56.4% 56.0% 55.3% 55.9% 56.1%Fringe Benefits 24.3% 20.7% 20.4% 20.6% 20.8% 20.5% 19.9% 19.7% 19.0% 18.5%Total Compensation 72.6% 72.8% 74.1% 75.0% 76.6% 77.0% 75.9% 75.1% 74.9% 74.6%Other ExpendituresSupplies and other 11.8% 11.6% 11.0% 11.8% 10.5% 9.9% 11.3% 12.5% 11.8% 12.3%Utilities and telephone 3.2% 3.4% 3.6% 3.5% 3.4% 3.5% 3.7% 3.4% 3.8% 4.2%Insurance 1.5% 1.5% 1.6% 1.5% 1.4% 1.1% 1.0% 1.0% 0.9% 1.0%Repairs and Maintenance 0.3% 0.3% 0.5% 0.2% 0.4% 1.1% 1.1% 1.3% 1.8% 1.1%Rent 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Depreciation and amortization 10.2% 9.8% 8.7% 7.6% 7.4% 7.0% 6.7% 6.4% 6.2% 6.3%Travel 0.4% 0.5% 0.5% 0.4% 0.4% 0.3% 0.4% 0.4% 0.5% 0.5%

27.4% 27.2% 25.9% 25.0% 23.4% 23.0% 24.1% 24.9% 25.1% 25.4%100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Source: Statement of Revenues, Expenses, and Changes in Net Position by Year

Page 96

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45


Millions

ATLANTIC CAPE COMMUNITY COLLEGEEXPENDITURES BY FUNCTION


Transfers out to other funds

Public Service

Operation and maintenance of plant

Institutional support

Student services

Academic support

Instruction

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ATLANTIC CAPE COMMUNITY COLLEGEEXPENDITURES BY FUNCTION


(UNAUDITED)


Functional category:Educational and general: Instruction Credit instruction 12,830,064$ 13,162,859$ 12,948,059$ 13,469,850$ 14,274,635$ 14,203,892$ 14,200,961$ 14,222,376$ 13,043,496$ 12,694,084$ Non-credit instruction 533,049 546,280 642,532 471,032 544,660 847,591 887,197 954,265 781,271 765,685 Total Instruction 13,363,113 13,709,139 13,590,591 13,940,882 14,819,295 15,051,483 15,088,157 15,176,641 13,824,767 13,459,769 Academic support 4,194,522 4,420,263 4,370,483 4,132,992 3,769,718 3,915,288 4,299,880 3,818,955 3,723,954 2,997,543 Student services 4,829,018 4,646,032 4,580,976 4,555,309 4,857,323 5,128,037 5,045,442 4,775,742 3,449,210 3,061,723 Institutional support 9,970,427 9,986,231 9,683,970 9,391,470 9,661,161 9,933,648 9,732,736 9,784,216 10,299,263 10,016,854 Operation and maintenance of plant 6,918,137 6,736,448 6,684,695 6,474,015 6,552,666 6,805,272 6,761,158 6,646,731 5,954,054 5,670,631 Public Service 35,621 29,957 79,997 195,853 53,523 49,552 45,521 34,322 154,099 152,379 Transfers out to other funds 80,000 599,130 0 235,235 12,909 154,308 1,685,395 519,071 3,550,044 2,589,169

TOTAL 39,390,838$ 40,127,200$ 38,990,712$ 38,925,756$ 39,726,595$ 41,037,588$ 42,658,289$ 40,755,678$ 40,955,391$ 37,948,068$


Functional category:Educational and general: Instruction Credit instruction 32.57% 32.80% 33.21% 34.60% 35.93% 34.61% 33.29% 34.90% 31.85% 33.45% Non-credit instruction 1.35% 1.36% 1.65% 1.21% 1.37% 2.07% 2.08% 2.34% 1.91% 2.02% Total Instruction 33.92% 34.16% 34.86% 35.81% 37.30% 36.68% 35.37% 37.24% 33.76% 35.47% Academic support 10.65% 11.02% 11.21% 10.62% 9.49% 9.54% 10.08% 9.37% 9.09% 7.90% Student services 12.26% 11.58% 11.75% 11.70% 12.23% 12.50% 11.83% 11.72% 8.42% 8.07% Institutional support 25.31% 24.89% 24.84% 24.13% 24.32% 24.21% 22.82% 24.01% 25.15% 26.40% Operation and maintenance of plant 17.57% 16.79% 17.14% 16.63% 16.49% 16.58% 15.85% 16.31% 14.54% 14.94% Public Service 0.09% 0.07% 0.21% 0.50% 0.13% 0.12% 0.11% 0.08% 0.38% 0.40% Transfers out to other funds 0.20% 1.49% 0.00% 0.60% 0.03% 0.38% 3.95% 1.27% 8.67% 6.82%

TOTAL 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Source: Schedules of Budget Comparison To Actual

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Revenue Capacity Information

Revenue capacity information is intended to assist the user in understanding and assessing the factors affecting the College’s ability to generate revenues. Please refer to the following schedules for a historical view of student credit hour enrollments which are the College's most significant revenue source.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000


Student Credit Hours

Fiscal Year

ATLANTIC CAPE COMMUNITY COLLEGECREDIT HOUR ENROLLMENTS BY TUITION TYPE


On‐line

Leased Curr

General

Dual Enrollment

Culinary

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-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000


StudentCredit Hours

Fiscal Year

ATLANTIC CAPE COMMUNITY COLLEGECREDIT HOUR ENROLLMENTS BY COUNTY OF ORIGIN


Leased Curriculum

Other

Cape May

Atlantic

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ATLANTIC CAPE COMMUNITY COLLEGEENROLLMENT DATA


Fiscal YearEnded Summer Fall Spring Total

6/30/2017 11,637 58,407 52,568 122,612

6/30/2016 13,376 63,818 59,825 137,019

6/30/2015 13,547 68,932 65,274 147,753

6/30/2014 14,365 74,309 69,240 157,914

6/30/2013 14,782 75,838 72,255 162,875

6/30/2012 15,662 77,357 72,638 165,657

6/30/2011 16,582 78,597 76,672 171,851

6/30/2010 17,347 77,636 78,445 173,428

6/30/2009 15,462 70,833 70,646 156,941

6/30/2008 15,246 69,245 65,954 150,445

Source: Annual Enrollment Reports

CREDIT HOUR ENROLLMENT BY SEMESTER

*Total student credit-hours not including non-credit equivalent credit hours

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Atlantic Cape May OtherDual Enroll/ Leased Curr Total

FY17 General 72,369 15,856 2,671 90,896

Culinary 845 258 982 2,085

On-line 20,320 6,579 2,168 29,067

Dual Enrollment 564 564

Total 93,534 22,693 5,821 564 122,612

FY16 General 80,976 18,699 3,173 102,848

Culinary 1,094 272 1,361 2,727

On-line 21,428 6,754 2,559 30,741


Total 103,498 25,725 7,093 703 137,019

FY15 General 89,812 20,864 3,100 113,776

Culinary 1,048 333 1,706 3,087

On-line 20,291 7,365 2,559 30,215


Total 111,151 28,562 7,365 675 147,753

FY14 General 97,309 22,726 3,361 123,396

Culinary 1,504 438 2,314 4,256

On-line 20,115 7,009 2,541 29,665


Total 118,928 30,173 8,216 597 157,914

FY13 General 100,697 23,652 2,879 127,228

Culinary 1,816 604 2,507 4,927

On-line 20,465 7,093 2,686 30,244


Total 122,978 31,349 8,072 476 162,875

FY12 General 103,021 24,263 2,316 129,600

Culinary 2,105 580 2,682 5,367

On-line 20,859 7,035 2,406 30,300


Total 125,985 31,878 7,404 390 165,657

FY11 General 104,821 27,112 2,623 134,556

Culinary 2,267 537 2,847 5,651

On-line 21,549 7,575 2,110 31,234


Total 128,637 35,224 7,580 410 171,851

FY10 General 104,017 28,267 2,870 135,154

Culinary 2,311 658 3,006 5,975

On-line 21,651 7,883 2,408 31,942


Total 127,979 36,808 8,284 357 173,428

FY09 General 92,442 26,731 2,721 121,894

Culinary 1,782 549 2,423 4,754

On-line 20,236 7,054 2,487 29,777


Total 114,460 34,334 7,631 516 156,941

FY08 General 90,888 23,790 3,372 118,050

Culinary 1,592 614 2,783 4,989

On-line 18,188 5,731 2,696 26,615

Dual Enrollment 287 287 Leased Curr 504 504

Total 110,668 30,135 8,851 791 150,445

Source: County and Fiscal Year totals agree to audited Full-Time Equivalent Enrollment reports

CREDIT HOUR ENROLLMENT COMPARISON BY COUNTY OF ORIGIN

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Atlantic Cape May OtherDual Enroll/ International % of Total

FY17 General 77.37% 69.87% 45.89% 74.13%

Culinary 0.90% 1.14% 16.87% 1.70%

On-line 21.72% 28.99% 37.24% 23.71%

Dual Enrollment 100.00% 0.46%

Leased Curr

Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY16 General 78.24% 72.69% 44.73% 75.06%

Culinary 1.06% 1.06% 19.19% 1.99%

On-line 20.70% 26.25% 36.08% 22.44%


Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY15 General 80.80% 73.05% 42.09% 77.00%

Culinary 0.94% 1.17% 23.16% 2.09%

On-line 18.26% 25.79% 34.75% 20.45%


Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY14 General 81.82% 75.32% 40.91% 78.14%

Culinary 1.26% 1.45% 28.16% 2.70%

On-line 16.91% 23.23% 30.93% 18.79%


Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY13 General 81.88% 75.45% 35.67% 78.11%

Culinary 1.48% 1.93% 31.06% 3.03%

On-line 16.64% 22.63% 33.28% 18.57%


Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY12 General 81.77% 76.11% 31.28% 78.23%

Culinary 1.67% 1.82% 36.22% 3.24%

On-line 16.56% 22.07% 32.50% 18.29%


Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY11 General 81.49% 76.97% 34.60% 78.30%

Culinary 1.76% 1.52% 37.56% 3.29%

On-line 16.75% 21.51% 27.84% 18.18%


Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY10 General 81.28% 76.80% 34.65% 77.93%

Culinary 1.81% 1.79% 36.29% 3.45%

On-line 16.92% 21.42% 29.07% 18.42%


Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY09 General 80.76% 77.86% 35.66% 77.67%

Culinary 1.56% 1.60% 31.75% 3.03%

On-line 17.68% 20.55% 32.59% 18.97%


Total 100.00% 100.00% 100.00% 100.00% 100.00%

FY08 General 82.13% 78.94% 38.10% 78.47%

Culinary 1.44% 2.04% 31.44% 3.32%

On-line 16.43% 19.02% 30.46% 17.69%


Leased Curr 100.00% 0.34%

Total 100.00% 100.00% 100.00% 100.00% 100.00%

Source: County and Fiscal Year totals agree to audited Full-Time Equivalent Enrollment reports

% CREDIT HOUR ENROLLMENT COMPARISON BY COUNTY OF ORIGIN

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Demographic and Economic Information

Demographic and economic information is intended (1) to assist the user in understanding the socioeconomic environment within which the College operates and (2) to provide information that facilitates comparisons of financial statement information over time and among Colleges. Please refer to the following exhibits for a historical view of the demographic and economic statistics and factors prevalent in the location in which the College operates.

SERVICE AREASERVICE AREA SERVICE AREA SERVICE AREA SERVICE AREA SECONDARY AND ELEMENTARY SERVICE AREA

YEAR POPULATION PERSONAL INCOME ($ths) PER CAPITA INCOME UNEMPLOYMENT % ENROLLMENT HIGH SCHOOL GRADUATES

2016 365,421 N/A N/A 8.0 56,098 3,9552015 368,946 $17,031,890 $46,164 9.8 56,610 3,9892014 370,553 $16,866,555 $45,517 10.8 58,132 4,1312013 372,016 $16,270,022 $43,735 12.0 58,062 4,3522012 371,726 $16,629,499 $44,736 13.5 58,361 4,2632011 370,939 $15,749,407 $42,458 12.8 57,655 4,3952010 371,916 $15,242,347 $40,983 12.6 57,385 4,1002009 367,803 $14,834,268 $40,332 11.9 59,047 4,2372008 366,519 $15,308,814 $41,768 7.3 60,702 4,1932007 366,298 $14,776,390 $40,340 6.1 61,498 4,245

Source: State of New Jersey Department of Labor and Workforce Development and State of New Jersey Department of Education

ATLANTIC CAPE COMMUNITY COLLEGEDEMOGRAPHIC AND ECONOMIC STATISTICS

LAST TEN CALENDAR YEARS

Note: The College's service area is comprised on Atlantic and Cape May Counties, New JerseyNote: Secondary & Elementry Enrollments & High School Graduates are based on fiscal year, i.e., 2016 (07/01/2015-06/30/2016)

(UNAUDITED)

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COUNTY EMPLOYER NUMBER OF EMPLOYEES TYPE

ATLANTIC AtlantiCare Health System 4992 PRIVATEATLANTIC Shore Medical Center 1587 PRIVATEATLANTIC Shop Rite 1076 PRIVATEATLANTIC Atlantic City Electric 1000 PRIVATEATLANTIC Wawa 915 PRIVATEATLANTIC Walmart 716 PRIVATEATLANTIC Acme Markets 597 PRIVATEATLANTIC Bacharach Institute of

Rehabilitation525 PRIVATE

ATLANTIC Atlantic City Linen 500 PRIVATEATLANTIC South Jersey Industries Inc. 455 PRIVATEATLANTIC Caring Inc. 372 PRIVATEATLANTIC Atlantic Medical Imaging 350 PRIVATEATLANTIC Home Depot 330 PRIVATEATLANTIC Bayada Nurses 305 PRIVATEATLANTIC Seaview-Richard Stockton

College300 PRIVATE

CAPE MAY Cape Regional Medical Center 1050 PRIVATECAPE MAY Acme Markets 1022 PRIVATECAPE MAY Wawa 649 PRIVATECAPE MAY Cold Spring Fish and Supply Co. 500 PRIVATECAPE MAY Walmart 277 PRIVATECAPE MAY Cape Counseling Services 253 PRIVATECAPE MAY Shop Rite 248 PRIVATECAPE MAY Shores at Wesley Manor 230 PRIVATECAPE MAY Home Depot 130 PRIVATECAPE MAY Verizon 125 PRIVATE

Source: College Records

PRINCIPAL NON-CASINO PRIVATE EMPLOYERS, 2016 (Estimated)Service Area: Atlantic and Cape May Counties, New Jersey

LARGEST EMPLOYERS


(UNAUDITED)

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ATLANTIC CAPE COMMUNITY COLLEGEFULL-TIME COLLEGE STAFFING


Fiscal Credit Hour TOTALYear Ended Enrollment FTE % Change Faculty Staff FULL-TIME % Change

(AUDITED)*

6/30/2017 122,612 4,087 -10.5% 73 216 289 -11.1%

6/30/2016 137,019 4,567 -7.3% 80 245 325 -2.1%

6/30/2015 147,753 4,925 -6.4% 79 253 332 -1.8%

6/30/2014 157,914 5,264 -3.0% 82 256 338 -0.9%

6/30/2013 162,875 5,429 -1.7% 88 253 341 -6.8%

6/30/2012 165,657 5,522 -3.6% 89 277 366 -0.3%

6/30/2011 171,851 5,728 -0.9% 89 278 367 0.3%

6/30/2010 173,428 5,781 10.5% 87 279 366 0.5%

6/30/2009 156,941 5,231 4.3% 85 279 364 1.4%6/30/2008 150,445 5,015 3.4% 84 275 359 0.0%

* - includes Dual Enrollment Credits

Source: College records

CREDIT HOUR ENROLLMENT AND FULL TIME COLLEGE STAFFING

0

100

200

300

400

216 245 253 256 253

277 278 279 279 275

73

80 79 82 88 89 89 87 85 84

# of Full-timeEmployees

Fiscal Year Ended

Staff Faculty

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