HLC Self Study
Chapter 5 Graphic

Maricopa County Community College District Financial Structure

The Maricopa County Community College District uses the fund accounting financial structure to manage its resources and is guided by accounting principles as defined by the Government Accounting Standards Board.  The District’s total adopted budget for FY2010-2011 was $1.62 billion.

Unrestricted General Fund (Fund 1)

The General Fund (Fund 1) is the largest and main operating fund for the District. Revenues are unrestricted in use and are used to cover most of the system’s basic operating costs, including salaries, benefits, utilities, and supplies. In FY2010-2011, the adopted budget totaled $655.4 million; Estrella Mountain was allocated $28.2 million, or 4.3 percent, of the total District budget. 

Auxiliary Fund (Fund 2)

This fund includes auxiliary enterprises that are substantially self-supporting. Some activities accounted for in this fund include noncredit courses, bookstore operations and the operation of the District’s skill centers. In FY2010-2011, the adopted auxiliary budget was $97.7 million.  Estrella Mountain was allocated $4.6 million and the SouthWest Skill Center allotment was $4.8 million.

Current Restricted Fund (Fund 3)

In FY2010-2011, the Maricopa County Community College Restricted Fund was $190 million. The estimated amount for Estrella Mountain totaled $9.3 million.  These funds are restricted in use and often come from student financial aid, grants (e.g., Title V, Title III, Carl Perkins), contracts, and Proposition 301 (Arizona sales tax that supports workforce development programs).

Plant Fund (Fund 7)

In FY2010-2011, the Plant Fund for the Maricopa County Community College District totaled $672.1 million. The funds are used for new construction, major remodeling, major maintenance, land purchases and capital equipment. The budget assumes the continued suspension of 100 percent of capital State Aid ($11.1 million). 

In 2004, Maricopa County Community College District’s $951.4 million General Obligation Bond program was approved by 76 percent of the Maricopa County voters. Monies were to be used for new classroom construction, renovation, technology, security, and land purchases to meet the future growth needs of all 10 colleges. To date, dozens of construction, remodeling or building projects have been completed or are underway, with more planned over the next few years.  To finance this activity, the District has issued three series of General Obligation Bonds:  Series A for $190.3 million issued in 2005; Series B issued in 2007 for $240 million; and Series C issued in 2009 for $220 million. In total, Estrella Mountain will receive more than $71 million from the 2004 General Obligation Bond program for new construction or the renovation of existing buildings, labs and equipment, parking, land, and technology to meet the future needs of students. As the College nears completion of the 2004 Bond program, Estrella Mountain will face future financial challenges with the elimination of capital funding for major emergency and preventative maintenance for facilities.

Enrollment Growth Funds

The Enrollment Growth Funding program was developed by the District to compensate the colleges for each additional Full-Time Student Equivalent (FTSE) achieved over the prior year’s actual audited FTSE.  The current formula for Enrollment Growth Funds (EGF) is based on the net of the two most recent audited fiscal years’ FTSE, multiplied by $2,130 per FTSE.  Per the recommendation of 21st Century Maricopa, FY2010-2011 marked the first year that the District allocated funds to the colleges’ respective base budgets, utilizing projected versus audited FTSE.  As a result, the colleges were allocated over $17.7 million of EGF funding in their respective FY2011-2012 budgets.

Estrella Mountain has generally experienced a consistent rate of growth in enrollment which has resulted in an influx of EGF. These funds have been utilized to support creating new faculty positions, increasing the budget line for adjunct faculty and providing enhanced learning assistance. Through participation in a District Faculty Match Program and a reallocation of resources, from FY2004-2005 through FY2011-2012, the college faculty full-time equivalent increased by 46 percent in Fund 1. Figure 29 illustrates the increase in the number of residential faculty since FY2004-2005.

Figure 29

The EGF also supports a diversified list of the College’s needs:

  • Adjunct Faculty budget line: $1.8 million increase from FY2006-2007
  • Residential Faculty supervision, overload and extended contracts: 68 percent increase from FY2006-2007
  • Temporary support staff: increased by 54 percent from FY2006-2007
  • Instructional development (e.g., hybrid and online course development, Learning Grants, workshops): $30,000 to $50,000 annually
  • Software renewals and enhancement: more than $170,000 annually
  • Campus-wide Learning College initiatives and events:
    • Student Conference
    • Day of Learning
    • Heritage months
    • Graduation day

MCCCD Carry-Forward Program

This program allows the colleges to carry forward into the next fiscal year up to 3.5 percent of their respective unexpended Fund 1 base budgets. Estrella Mountain participates in this District program, which allows the College to meet the next year’s instructional needs, fund short-term initiatives and cover budget shortfalls. The carry-forward funds play an integral role in the support of the overall operation of the College and any new funding needs that arise from enrollment growth.

Auditing of Budget – Memorandum of Understanding

Annual auditing for the District is handled by the Arizona State Office of the Auditor General.  The auditors are not permitted to issue individual audit reports for the Maricopa County Community College District.  In 1996, the North Central Association and the District created a Memorandum of Understanding to satisfy the need for an institutional external financial audit by a certified public accountant or a public agency at least every two years. The memorandum was later updated to reflect that of the Higher Learning Commission.

The memorandum addresses criteria related to resources, uses and assurances. It provides records that demonstrate efficient management of individual expenditure budgets consistent with maintaining the fiscal viability of the District. The memorandum also demonstrates the integrity of the colleges and the District.

College Financial Systems

Most of the colleges’ and the District’s respective financial systems have been automated and upgraded to the current College Financial System, supported by a web-based reporting system, Web Financials. Real-time access to financial data is available to all college fiscal managers.