Gavilan Community College District Report

Fiscal Review November 30, 2021 Gavilan Joint Community College District Michael H. Fine Chief Executive Officer November 30, 2021 Lizette Navarette, Vice Chancellor for Finance and Facilities Planning California Community Colleges Chancellor’s Office 1102 Q Street, 6th Floor Sacramento, CA 95811 Dear Vice Chancellor Navarette: On October 28, 2020, the California Community Colleges Chancellor’s Office requested that FCMAT con- duct a Fiscal Health Risk Analysis (FHRA) to determine whether Gavilan College has developed and imple- mented a strategic enrollment plan in alignment with Student Centered Funding Formula (SCFF) metrics, and determine whether the district has reviewed instructional programs, student services and administra- tive services to ensure they are aligned with revenue and cash flow projections. FCMAT’s study team collected data and interviewed leaders, staff and faculty virtually in January through March 2021. FCMAT then worked with the district again from July through September 2021 to collect ad- ditional data and conduct additional interviews. This report contains the study team’s findings and recom- mendations. FCMAT appreciates the opportunity to serve the California Community Colleges Chancellor’s Office and extends thanks to all the staff for their assistance during fieldwork. Sincerely, Michael H. Fine Chief Executive Officer Michael H. Fine • Chief Executive Officer 1300 17th Street – City Centre, Bakersfield, CA 93301-4533 • Tel. 661-636-4611 • Fax 661-636-4647 www.fcmat.org Contents Contents About FCMAT ...................................................................................................ii Introduction .......................................................................................................1 Background.......................................................................................................1 Study and Report Guidelines .................................................................................1 Study Team .................................................................................................................1 Fiscal Health Risk Analysis ..........................................................................2 Findings and Recommendations................................................................3 Small Rural District ...................................................................................................3 Data Integrity .............................................................................................................4 Fiscal Operational Condition ..............................................................................................4 Traditional Enrollment and Planning.................................................................................5 Budget Development and Fixed Costs ...........................................................................6 Total Compensation Compared to Ongoing Revenues ..............................................6 Cost to Deliver the Course Schedule ..............................................................................7 Fiscal Independence ...............................................................................................9 Strategic Enrollment Management .....................................................................10 Student Centered Funding Formula (SCFF) .................................................................10 Attendance Accounting .........................................................................................12 Program Review and Resource Allocation .......................................................17 Appendix ...................................................................................................................19 Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District i About FCMAT FCMAT’s primary mission is to assist California’s local K-14 educational agencies to identify, prevent, and resolve financial, human resources and data management challenges. FCMAT provides fiscal and data management assistance, professional development training, product development and other related school business and data services. FCMAT’s fiscal and management assistance services are used not just to help avert fiscal crisis, but to promote sound financial practices, support the training and development of chief business officials and help to create efficient organizational operations. FCMAT’s data management ser- vices are used to help local educational agencies (LEAs) meet state reporting responsibilities, improve data quality, and inform instructional program decisions. FCMAT may be requested to provide fiscal crisis or management assistance by a school district, charter school, community college, county office of education, the state superintendent of public instruction, or the Legislature. When a request or assignment is received, FCMAT assembles a study team that works closely with the LEA to define the scope of work, conduct on-site fieldwork and provide a written report with findings and rec- ommendations to help resolve issues, overcome challenges and plan for the future. Studies by Fiscal Year 90 80 70 60 50 40 30 20 10 0 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 seidutS fo rebmuN About FCMAT FCMAT has continued to make adjustments in the types of support provided based on the changing dy- namics of K-14 LEAs and the implementation of major educational reforms. FCMAT also develops and provides numerous publications, software tools, workshops and professional learning opportunities to help LEAs operate more effectively and fulfill their fiscal oversight and data management responsibilities. The California School Information Services (CSIS) division of FCMAT assists the California Department of Edu- cation with the implementation of the California Longitudinal Pupil Achievement Data System (CALPADS). CSIS also hosts and maintains the Ed-Data website (www.ed-data.org) and provides technical expertise to the Ed-Data partnership: the California Department of Education, EdSource and FCMAT. FCMAT was created by Assembly Bill (AB) 1200 in 1992 to assist LEAs to meet and sustain their financial obligations. AB 107 in 1997 charged FCMAT with responsibility for CSIS and its statewide data management work. AB 1115 in 1999 codified CSIS’ mission. AB 1200 is also a statewide plan for county offices of education and school districts to work together locally to improve fiscal procedures and accountability standards. AB 2756 (2004) provides specific responsibili- ties to FCMAT with regard to districts that have received emergency state loans. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District ii About FCMAT In January 2006, Senate Bill 430 (charter schools) and AB 1366 (community colleges) became law and ex- panded FCMAT’s services to those types of LEAs. On September 17, 2018 AB 1840 was signed into law. This legislation changed how fiscally insolvent dis- tricts are administered once an emergency appropriation has been made, shifting the former state-centric system to be more consistent with the principles of local control, and providing new responsibilities to FCMAT associated with the process. Since 1992, FCMAT has been engaged to perform more than 1,400 reviews for LEAs, including school districts, county offices of education, charter schools and community colleges. The Kern County Superin- tendent of Schools is the administrative agent for FCMAT. The team is led by Michael H. Fine, Chief Execu- tive Officer, with funding derived through appropriations in the state budget and a modest fee schedule for charges to requesting agencies. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District iii Introduction Background Introduction Background Formed in 1919, the Gavilan Joint Community College District is a one-college district that serves the res- idents of San Benito and southern Santa Clara counties and offers a wide range of services including pro- grams of continuing study in liberal arts, preprofessional, business, vocational and technical fields. Courses are offered on weekdays and weekends as well as in the evening. Gavilan College is a comprehensive institution that serves approximately 5,000 students and offers various educational programs and services including two-year degrees, certificates, and university transfer programs. On October 28, 2020, the California Community Colleges Chancellor’s Office requested that FCMAT assist Gavilan College by conducting a Fiscal Health Risk Analysis, determine whether Gavilan College has de- veloped and implemented a strategic enrollment plan in alignment with Student Centered Funding Formula (SCFF) metrics, and determine whether the district has reviewed instructional programs, student services and administrative services to ensure it is aligned with revenue and cash-flow projections. Study and Report Guidelines Because of the global pandemic, FCMAT’s study team collected data and interviewed leaders, staff and faculty virtually in January through March 2021 and again from July through September 2021. This report is the result of those activities and is divided into the following sections: • Fiscal Health Risk Analysis • Strategic Enrollment Management • Program Review and Resource Allocation FCMAT’s reports focus on systems and processes that may need improvement. Those that may be function- ing well are generally not commented on in FCMAT’s reports. In writing its reports, FCMAT uses the Asso- ciated Press Stylebook, a comprehensive guide to usage and accepted style that emphasizes conciseness and clarity. In addition, this guide emphasizes plain language, discourages the use of jargon and capitalizes relatively few terms. Study Team The study team was composed of the following members: Michelle Giacomini Cambridge West Partnership Deputy Executive Officer FCMAT Community College Consultant Leonel Martínez FCMAT Technical Writer Each team member reviewed the draft report to confirm its accuracy and to achieve consensus on the analysis. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 1 Fiscal Health Risk Analysis Fiscal Health Risk Analysis FCMAT developed the Fiscal Health Risk Analysis (FHRA) as a tool to help evaluate a community college district’s fiscal health and risk of insolvency in the current and two subsequent fiscal years. The FHRA includes 18 sections, each containing specific questions. Each section and specific question are included based on FCMAT’s work since its inception; they are the common indicators of risk or potential insolvency for districts that have neared insolvency and needed assistance from outside agencies. Each section of this analysis is critical to an organization, and lack of attention to these critical areas will eventu- ally lead to a district’s failure. The greater the number of “no” answers to the questions in the analysis, the higher the score, which points to a greater potential risk of insolvency or fiscal issues for the district. Not all sections in the analysis, and not all questions within each section, carry equal weight; some areas carry higher risk and thus count more heavily toward or against a district’s fiscal stability percentage. For this tool, 100% is the highest total risk that can be scored. A “yes” or “n/a” answer is assigned a score of 0, so the risk percentage increases only with a “no” answer or with an unanswered question. Identifying issues early is the key to maintaining fiscal health. Diligent planning will enable a district to bet- ter understand its financial objectives and strategies to sustain a high level of fiscal efficiency and overall solvency. A district should consider completing the FHRA annually to assess its own fiscal health risk and progress over time. During the scheduled evidence gathering timeline in January and February of 2021, FCMAT could not adequately gather evidence to meet the procedural intent of the FHRA process. The FHRA’s intent is to complete a “point in time” assessment of the district’s fiscal condition and most importantly, its operational status. In many circumstances, the district did not provide evidence to answer questions sufficiently and therefore a “no” answer was assessed, contributing to a draft overall score of 68%. Throughout the spring and summer, after the draft score was developed, the district brought in interim support. Cash was reconciled, a more comprehensive budget was developed, the 2019-20 books were closed, a better understanding of California community college terms and operational practices was es- tablished, and new evidence was provided to FCMAT. In concurrence with the California Community Col- leges Chancellor’s Office, FCMAT concluded the original process and approach adjusting to assist Gavilan Joint Community College District in a more positive and long-lasting manner. FCMAT decided to postpone scoring the FHRA until the district hired permanent leadership and professional staff in all administrative services areas since the FHRA questions rely on the chief business officer’s understanding of all district policies, administrative procedures, internal reports, desk manuals and district-approved processes and planning documents. The level of turnover, along with the difficulties of the pandemic and a recent cyberat- tack, means the district will need time to improve its organizational efficiencies. The use of retiree experts and additional assistance from external auditors has helped the district submit previously delayed financial reports. The receipt of Higher Education Emergency Relief Funds (HEERF) and the pausing of payments to the Joint Powers Authority (JPA) and instructional service agreement contracts have greatly improved the district’s short-term fiscal situation. However, it was more reasonable to use the external assistance to focus on hiring permanent district staff and finding long-term solutions instead of reacting to emergencies and short-term issues. This report will focus on the high-level fiscal and operational concerns that have been identified by FCMAT during fieldwork. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 2 Findings and Recommendations Small Rural District Findings and Recommendations Small Rural District The district encompasses a large geographical area but serves a much smaller student population com- pared to most California community college districts. For the purpose of revenue for the California Com- munity College system, these populations are quantified by providing funding based primarily on the total of full-time equivalent students (FTES). The larger the district, the more the district can take advantage of economies of scale and therefore provide additional services, program offerings, etc. Smaller districts do not have this luxury and must decide what services and programs they can offer; they cannot provide the same opportunities as larger districts. Smaller districts tend to rely on nontraditional enrollment to inflate full-time equivalent student counts for the purpose of increasing FTES to increase revenues when the student population in their service areas is not growing. These FTES may include incarcerated student populations or ISAs outside of their service area. ISAs can be organized numerous ways but result in sharing apportionment revenues with the con- tracting agency. Most revenue sharing agreements are based on a reimbursable fee for providing educa- tion based on a student contact hour. The district relies heavily on these instructional service agreements for its total FTES counts. Total FTES numbers can be misleading if the types of enrollments are not widely discussed districtwide. The district’s overreliance on FTES associated with ISAs and revenue sharing agreements with the South Bay Regional Public Safety Training Consortium (a joint powers authority, or JPA) make it appear to serve more students than it does, which creates total revenues larger than the service area provides. In addition, the FTES associated with the ISAs and JPA inflate the number of full-time faculty the district must employ (known as the faculty obligation number, or FON). District personnel do not fully understand these inflated numbers and resulting financial challenges. The district should be cautious when determining the level of educational opportunities and support ser- vices it can provide to the community. Any comparisons of program offerings, compensation levels, com- munity service and other factors should include only California community college districts of similar size that provide similar services. Any attempt to align salaries, benefits, programs of study or increased support services with neighboring districts will create fiscal stress because they cannot realistically be compared to the much smaller Gavilan Joint Community College District, especially at current funding levels. The district must pay close attention to the FTES it captures from ISAs and the JPA. Since it is difficult for the district to determine how many FTES will be generated from year to year; a conservative approach to budgeting is prudent. It is also important that the board and administration establish a level of comfort when using less reliable funds for ongoing costs such as ISAs and the JPA. Budgeting is a critical balancing act, and everyone including the JPA must understand what the final outcome could be. The district should begin comparing program offerings, student service levels, compensation, community service and other activities with California community college districts of similar FTES and reliance on ISAs. Until the number of FTES increases, any comparison of compensation levels, operational structure, release time and employee and student services should use like-sized California community college districts. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 3 Findings and Recommendations Data Integrity Data Integrity The district continues to struggle with data integrity. Data integrity in an educational setting means having well established reports that are fully validated for accuracy and have been institutionalized as a primary source of information. It is also important for these reports to include a multiyear trend and use consistent formatting to give the reader the opportunity to better understand the information. Trust among end users of the data is exceptionally low across the district. The district does not have the level of well-established reports that are considered standard for a California community college district. FCMAT experienced this firsthand during its inquiry: capturing the most basic financial and enrollment information was difficult. In most cases, the data could not be validated. Although improvements are under- way, data accuracy and literacy are a major obstacle. Almost every person interviewed confirmed he or she either could not trust information or did not understand the information presented. This was also the case with the two trustees who were interviewed, which led them to take a much larger role in the district’s bud- get committee. It is unusual for board members to participate at this level, and the practice has disadvan- tages. Responsibility should be returned to the participatory governance process that was historically used. Standard reports should be developed, distributed and presented districtwide regularly to the board of trustees and the campus community. Utilizing reports that are consistently standardized in both content and format and presented following a predetermined schedule will improve data integrity and trust districtwide. Over time, fewer requests will be made for reports, and the research office will be able to focus on data quality, automation, and new initiatives. A good measurement of well-developed data integrity would include having standing reports that utilize the same format and provide consistent source documentation when presenting information. These stand- ing reports would be delivered based on a board-approved presentation calendar. Providing well estab- lished, reliable data presented in a recognizable format builds data literacy and trust throughout districts. This will help everyone understand the information. Without substantial improvement in this area, anecdotal information will continue to inform decisions and hinder progress. Fiscal and Operational Condition In early spring 2021, the district had not yet closed the 2019-2020 financial books. This was problematic because FCMAT had to rely on 2018-2019 actuals as the basis for the analysis. At that time, the district had been deficit spending and projected a 2% ending balance in the 2020-2021 fiscal year. During the pan- demic, the district received one-time emergency relief funds from the HEERF to offset revenue losses and provide aid directly to students. The district properly utilized emergency relief funds to improve the ending balance by shifting expenses from the unrestricted general fund to the categorical program. In addition, the district also was able to save substantial funds by not sharing revenues with the ISAs and the JPA because those agencies could not de- liver courses during the pandemic. The district was fortunate to receive apportionment for those canceled courses as part of the emergency conditions. These actions have greatly improved the district’s ending balance as identified in the adopted budget. When the emergency conditions sunset this year, the district will be faced with the same fiscal challenges faced prior to the pandemic. In addition, if enrollment does not return to prepandemic levels, a larger fiscal cliff may be realized. The district does not have the reports and reliable data needed to accurately predict, track and make adjustments to mitigate the sunsetting of the hold harmless provisions in the student-centered funding formula. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 4 Findings and Recommendations Data Integrity The district continues to experience employee turnover at the executive and professional staff levels. This turnover, and the lack of validated reports and procedure manuals for each fiscal related task, will continue to cast doubt on the district’s ability to properly maintain internal fiscal controls, especially those required for a fiscally independent local education agency. This concern is validated by the elimination of the posi- tion that included the Education Code required (Education Code Sections 85266 and 85266.5) disburse- ment officer and the inability to provide an accurate comprehensive full-time equivalent faculty (FTEF) load report and a validated trend of all unrestricted general fund expenses. A major component of any fiscal analysis is the review of trend data. Multiple attempts were made to cap- ture basic information and verify its validity during this review. The requested information included a 5-year trend of the following: 1. Full-time equivalent student (FTES) segregated by type. The types included credit (3- year average), special admit, ISAs, traditional noncredit and Career Development and College Preparation (CDCP). 2. Average class size that takes “stacked” classes (the college offers more than one section during the same period of time to get enough students to offer the class) into consideration 3. Total teaching faculty load separated by contract faculty, overload, and part-time 4. Published faculty obligation number (FON) compared to actual 5. Management, staff and confidential full-time equivalent counts charged to the unrestricted general fund 6. Unrestricted general fund expenses During the past several months, FCMAT received data for the above list and reviewed it for accuracy. Dis- trict-provided data was compared to several public documents and reports submitted through the manage- ment information system (MIS) directly to the Chancellor’s Office. In almost every area, the published data was different than what was provided. Follow-up conversations verified the trends identified in the spread- sheet should not be published in this FCMAT report or used for decision-making purposes. Therefore, this FCMAT report will not contain financial information as previously planned. Instead, this report will focus on high-level findings based on the district’s problems in obtaining and validating information. Once reports are developed, they should be reviewed for accuracy and discussed in the district’s budget committee. These findings have validated the “information and data trust” concerns received during interviews. Traditional Enrollment and Planning Some of the district’s enrollment comes from ISAs and the JPA. Noncredit enrollments are also substantial compared to overall enrollment, and taking these factors into account reveals the district’s low census en- rollment. Census enrollment is more reliable and less likely to contribute to large changes in enrollment from year to year, which can make it difficult to manage various elements in the budget. The district’s reliance on unreliable FTES numbers generated by noncensus enrollments such as positive attendance classes to fund ongoing fixed expenses contributes to the fiscal issues. In addition, noncensus enrollments come with volatile changes in expenses. Overrelying on different types of enrollments, especially noncensus enrollment, is com- mon in most of the state’s smallest districts and is one reason to view a percentage of unreliable enrollments as one-time funds. Incorporating all revenues from outside sources as ongoing revenues is not an effective fiscal practice. The district relies on all enrollments to meet its ongoing expenses. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 5 Findings and Recommendations Data Integrity FCMAT made several attempts to validate district-provided annual enrollment data with 320 reports (which are enrollment reports) and published Exhibit C documents. The intent was to obtain a clear understanding of the enrollment trends at the district based on enrollment type. This level of information is critical when a district relies on niche enrollments such as ISAs and large disabled students’ course offerings. The district does not have a reliable report to make important decisions and therefore will lack the information needed to adjust staffing to align with enrollment. Budget Development and Fixed Costs The procedure for budget development is to roll over the previous year’s budget and add budget assump- tions for any increases. Discussions with the district determined this was accomplished differently depending on the person who occupied the chief business officer position. Budget assumptions were also developed differently based on the people who were in various positions. All districts should fully understand their fixed costs, especially those that are struggling to balance expens- es with earned revenues. The district is no exception. In fact, the recent cyberattack and migration to the cloud has made a significant impact on fixed costs trends by no longer using one-time funds to upgrade equipment, software etc. to ongoing maintenance agreement expenses. Available ongoing funds will con- tinue to decrease in the future as maintenance agreements and other expenses increase. The district’s error in overestimating its apportionment in 2017 by $3.2 million resulted in an agreement with the California Community Colleges Chancellor’s Office to repay the error over seven years through 2024. The repayment will also affect the district’s fixed cost calculation for the next several years. As part of the agreement, the annual repayment is deducted from the district’s total disbursement. This ongoing deduction to revenue should be memorialized and the expense should be identified. The district may opt to use one-time emergency condition funds saved from not having to make ISA and JPA payments during the 2020-21 fiscal year. This will reduce the annual repayment schedule to a more manageable level. The annual repayment is $600,000 through 2024-25. The district should not attempt to negotiate any additional ongoing expenses until a good understanding of fixed costs trends is available. To be more transparent about fixed costs and to be able to plan accordingly, the district should develop and present an annual fixed costs report to the governing board and public. To do so, staff will need to have a clear understanding of all other fixed costs such as utilities, licenses, lease payments, and the year-to-year increases in information-technology-related agreements. That knowledge will allow the district to make bet- ter-informed decisions. The district overrelies on less-reliable FTES to capture revenue. This practice creates larger than normal differences from the adopted to actual budgets and creates confusion when reviewing financial trends, making decision-making more difficult. The fixed cost trend report will better prepare the district to make midyear changes when fiscal issues arise from less-reliable FTES. Total Compensation Compared to Ongoing Revenues Understanding the district’s total personnel-related compensation compared to ongoing revenues charged to the unrestricted general fund is a main component of budget development. Each district must be able to provide the elements that contribute to the total cost, including all expenses related to current and retir- ee expenses. This expenditure total does not include the contribution to other post-employment benefits (OPEB) because this expenditure is actually a transfer of funds to a trust and is not considered an expense. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 6 Findings and Recommendations Data Integrity The list of ongoing personnel expenses related to the Gavilan district includes: 1. Academic salaries (1000s) 2. Nonacademic salaries (2000s) 3. Employee benefits (3000’) 4. ISAs and JPA payments (5000s) 5. Contributions to restricted general fund salaries through transfers (7000s) 6. Pay-as-you-go retiree health and welfare benefits (7000s) All of these categories reflect the ongoing personnel-related costs to the district. This annual total, along with other fixed costs, such as maintenance agreements, utilities, leases, etc. will determine the content of the district fixed-cost report. During this review, FCMAT received several versions of the budget from district staff. The first version indi- cated the district would spend more than 92% of the unrestricted general fund budget on personnel-related expenses. At the end of fieldwork, it appeared that the number was based on a budget development pro- cess using “average” salaries and not actual assumptions as the strategy. Based on recent data received, the revenue assumptions used for budget development also included larger than normal differences compared to actuals. A more reliable process and report is needed to better inform those affected about what percentage of the unrestricted general fund budget the district spends on personnel-related expenses. Cost to Deliver the Course Schedule The district could not provide a reliable process that aligns classroom production with expenses. It is im- portant for districts to know the cost of a course schedule prior to approval. Academic affairs should also know how much funding it has when developing the schedule and have the data to maximize offerings. The district has no strategy to maximize course offerings to students, which is evident by a lack of reports avail- able that trend FTEF load by type. A district that understands the costs of delivering a full-time teaching load using contract, overload or adjunct teachers will be able to offer more opportunities for students. This strategy will require improved management of the district’s FON and the establishment of a districtwide classroom efficiency standard. The lack of a process tied to a districtwide planning effort is unsustainable and explained in more detail in the enrollment management section of the report. During FCMAT’s fieldwork, personnel discussed strategies for increased efficiency, but most of these ef- forts are recent. Examples include the following: • Two-year planning for course schedules so that: a) all courses are not offered every term, and b) students can plan their schedules knowing when courses will be offered. • Moving classes to rooms that will hold more students if needed. • Revising class size maximums for both in-person and online classes. The maximum is 30 for all classes except English, which is 28 (and there is contract language that establishes online class sizes as the same sizes for in-person instruction). It is essential for all employees to acquire a thorough understanding of the relationship between funding and classroom efficiency, and of the need to balance this with a strong commitment to maintaining pro- grams and services to meet the needs of students and the community. The district also needs to hold dis- trictwide discussions to determine which strategies will be implemented to improve efficiencies in depart- ments, programs and courses. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 7 Findings and Recommendations Data Integrity Following an average efficiency standard determines the cost of delivering a course schedule and is a critical element for budget development. The district should establish a board-approved classroom course efficiency standard as part of its assumptions for budget development. The district’s Strategic Enrollment Management Plan, which is discussed later in the report, should be updated by devoting an early chapter to explaining the importance of the efficiency or productivity ratio, setting the framework and answering why becoming more efficient is essential to the district’s future. In addition, the district should focus on the following: 1. SCFF metrics – Each metric should include districtwide and division goals tied to past performance. 2. The average cost to deliver one FTEF load for full-time contract, part-time and overload rates. This data will inform budget development for academic affairs and provide clear insight on the best strategies to balance the use of contract and part-time faculty. 3. Discuss the differences related to census vs. noncensus enrollments. The strategic enrollment management plan should educate the reader on the budgetary impacts of each type of enrollment. It is important to fund new budget requests to support the program review process. The district should not attempt to eliminate all innovation during lean fiscal times, but rather find the right balance and at a minimum, identify one-time funds that are not tied to fixed costs. As a rule, districts should budget conser- vatively so it always has one-time funds to support innovative activities. This is also true for establishing a classroom efficiency standard. If districts align their classroom efficiency standard, they can always offer the traditionally low-enrolled advanced course that would otherwise get canceled, or try a new software program that improves accuracy, efficiency or student success. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 8 Findings and Recommendations Fiscal Independence Fiscal Independence The district passed a resolution to become fiscally independent as of July 1, 2018. This has proven to be cost-prohibitive and difficult during times of personnel turnover, as it would for any small California commu- nity college district. This is because the additional positions required to meet internal control requirements are more costly than state revenue allows. According to the district’s original agreement with the Santa Clara County Office of Education, those positions will cost more than $500,000 annually. Based on FCMAT’s recent review, most of the positions needed to maintain appropriate internal controls when fiscal independence was granted in 2018 have been either vacant or subject to considerable turnover. In fact, the disbursement officer position that is required by law (Education Code Sections 85266 & 85266.5) for a fiscally independent district was removed as part of a recent reorganization. Although preparing all vendor and payroll warrants in-house has benefits, the staffing levels that a small district can afford do not provide the appropriate amount of inter- nal control. The checks and balances required for fiscal independence require more staff with specific skill sets and training. At smaller districts like Gavilan, where the scope of staff duties is broad, internal controls are naturally more difficult to maintain, although they remain critical. The district must improve efforts in filling positions related to maintaining internal controls to ensure that requirements are being met. The county office is willing to work with the district to ensure that training and mechanisms are in place to strengthen controls in this area. The district will need to maintain the level of staffing negotiated in the agreement to meet internal control requirements. The district leadership and board of trustees must be aware of the increased responsi- bility that comes with fiscal independence and understand what the status means. Recommendations The district should: 1. Complete the FHRA annually to assess its own fiscal health risk and progress over time, especially as permanent staff have had time to train and develop desk manuals. 2. Continue recruiting multiple levels of expertise and make it a priority to permanently staff its positions of fiscal leadership and technical expertise. Ensure that the board focuses on leadership stability. 3. Develop a comprehensive cross-training program and desk manual development plan for all areas of the Finance Department. This will assist the district when needing to meet report deadlines during periods of turnover. 4. Conduct a comprehensive study of internal controls for all business and related transactions and ensure the viability of fiscal independence. 5. Establish a board-approved classroom course efficiency standard. 6. Develop and present a fixed costs report to the governing board and public on an annual basis. 7. Update the district’s Strategic Enrollment Management Plan with an early chapter dedicated to explaining the importance of the efficiency or productivity ratio, setting the framework and explaining why becoming more efficient is essential to the district’s future. 8. Establish standard institutional reports and a presentation schedule to increase efficiency and communication and build trust across the district. 9. Develop standard reports districtwide that are presented to the board of trustees and the campus community regularly and that capture trends using a standard snapshot in time. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 9 Findings and Recommendations Strategic Enrollment Management Strategic Enrollment Management A strategic enrollment management (SEM) plan is one of several functional, comprehensive plans that college districts or colleges create to focus on activities to accomplish larger goals. These are expressed in comprehensive plans such as the following: • A strategic plan • An educational master plan • A facilities master plan All are based on the vision, mission, values and overall goals of the district. In general terms, enrollment management is a process that brings together activities related to recruiting, funding, retaining and replacing students as they move toward, within and away from the college. Each activity includes several processes and best practices. Student Centered Funding Formula (SCFF) Although the SCFF framework provides financial rewards for successful student outcomes and supplemen- tal resources to support low-income students, SCFF resources alone will not make a district fiscally viable. A college strategic enrollment management plan should, at a minimum, articulate a goal to establish college and subunit targets for the following: • FTES • Efficiency — weekly student contact hours (WSCH) per FTEF, or FTES per FTEF • Economy (cost per FTES) • Effectiveness (SCFF-funded successful student outcomes) The district’s productivity in instruction, which is measured using the ratio of WSCH (weekly student con- tact hours)-to-FTEF, is low. For a district with a term length multiplier of 16.7 weeks, the ideal WSCH-to- FTEF ratio should be 595. The district’s average ratio from spring 2011 to 2018 was 245, far below the ideal ratio for economic viability. Another way of expressing efficiency is the class size average calculation. From 2015 through 2019, the district’s credit instruction class size average during the fall terms was 19.8. In subjects that usually have lecture as instruction, the district’s class size average was 23.7. This made the district rank 102nd of Cali- fornia’s 115 community college districts for average class size; only 13 districts had a smaller average class size. The district’s class size average in the spring terms 2015 to 2019 was 19.4. In subjects that usually have lab as instruction, the class size average was 20.4. This made the district rank 103rd of California’s 115 com- munity college districts for average class size; only 12 districts had a smaller average class size. These class size averages are far below the ideal ratio needed for economic viability. The fiscal year 2020-21 edition of the 2020-23 Gavilan College Faculty Association Collective Bargaining Agreement states the following: • Courses taught online should have the same course size [class size] as in-person courses. • Faculty are free to add students through the approved registration process. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 10 Findings and Recommendations Strategic Enrollment Management • The class size has not been negotiated for on-ground [in-person] courses but will be reeval- uated when those discussions take place. The agreement does not specify any fixed class size maximums for any subject. The district needs to be educated regarding the cost of instruction and the importance of doing so more efficiently. It may take several months of educational effort to improve understanding and make changes. The main long-term outcomes from any SEM plan should be as follows: 1. Maximize the number of students who enroll, succeed in courses, complete programs of study, and transition into the workforce or a four-year institution. 2. As a result of the increased number of students, realize increased revenues and ensure that these revenues are managed efficiently, economically, and successfully so the college remains viable. A successful SEM plan should use the SCFF metrics to gauge the ultimate success of the plan activities. The SCFF, introduced in 2018-19, is intended to augment the traditional reliance on FTES as the primary source of state revenue allocated to community colleges. The revenue value per unit among different types of FTES was changed during SCFF implementation, with additional revenue metrics introduced to com- pensate colleges for the number of low-income students enrolled as well as for a range of student success outcomes. In addition to changing how community colleges are funded, the SCFF takes into consideration how well students are doing by using new metrics. California’s community colleges now receive state money by bas- ing general apportionments, discretionary funds available to community college districts, on the following three calculations: • A base allocation, which largely reflects enrollment. • A supplemental allocation based on the number of students who receive a College Promise Grant or a Pell Grant, or who are covered by Assembly Bill (AB) 540. • A student success allocation based on outcomes that include the number of students who earn associate degrees and credit certificates, the number who transfer to four-year col- leges and universities, those who complete transfer-level math and English within their first year, those who complete nine or more career education units, and those who earn the regional living wage. The SCFF’s metrics are in line with the goals and commitments set forth in the California Community Colleges’ Vision for Success and are intended to close achievement gaps and boost key student success outcomes. District leaders recognize the overlap between the two and noted that the district’s strategic plan includes student success outcome performance targets from both the Vision for Success initiative and the SCFF student success metrics. The district’s 2018 SEM does not include the SCFF metrics because it was created before the SCFF frame- work started. The district intends to develop a new SEM plan during the 2021 calendar year that will include the SCFF metrics. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 11 Findings and Recommendations Attendance Accounting Attendance Accounting From 2015 to 2019, the district had a series of audit exceptions related to compliance with state regulations for attendance accounting. Audit recommendations from 2015 through 2019 included directions for how instructors should calculate contact hours for courses and perform an internal review before the apportionment claim is filed. Many of the problems noted in 2015 were resolved by the 2019-20 audit as illustrated in the following table. Audit Exceptions District-Overreported FTES Attendance 2019- 2015-2016 2016-2017 2017-2018 2018-2019 Type 2020 One of 25 classes Three of 40 classes sampled sampled was found to were found to have erroneously have erroneously over- overreported 3.020 FTES. Ex- reported 0.090 FTES. 25 classes were trapolation of the error resulted Extrapolation of the Weekly sampled, no errors N/A N/A in 77.846 overstated FTES for a error resulted in 3.699 were found. total cost of $380,667.05. This overstated FTES for a was not corrected in the Recal total cost of $13,785. Report. This was corrected in the Recal Report. One of 20 classes Three of 25 classes sampled sampled was found to One of 25 classes Two of 25 classes sampled were were found to have erroneously have erroneously over- sampled was found found to have erroneously over- overreported 3.430 FTES. Ex- reported 0.050 FTES. to have erroneously reported 0.150 FTES. Extrapola- trapolation of the error resulted Extrapolation of the Daily overreported .940 tion of the error resulted in 0.304 N/A in 81.224 overstated FTES for a error resulted in 0.204 FTES. That over- overstated FTES for a total cost total cost of $406,588.59. This overstated FTES for a statement of FTES is of $1,756. This was corrected in was not corrected in the Recal total cost of $761. This a cost of $4,440.18. the Recal Report. Report. was corrected in the Recal Report. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 12 Findings and Recommendations Attendance Accounting Gavilan Joint Community College District Overreported FTES Attendance Type 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 One of 25 classes Three of 25 classes One of 25 classes sampled was found Three of 25 classes sampled were found sampled was found to have erroneously sampled were found to have erroneously to have erroneously overreported 1.020 to have erroneously over reported 1.730 overreported .200 FTES. Extrapo- overreported 2.490 FTES. Extrapolation FTES. Extrapolation lation of the error Alternative FTES. Extrapolation of the error resulted of the error resulted N/A resulted in 4.077 of the error resulted in 3.390 overstated in 0.420 overstated overstated FTES in 27.300 overstated FTES for a total cost FTES for a total cost for a total cost of FTES for a total cost of $16,991. This was of $2,141. This was not $15,196. This was of $128,952. not corrected in the corrected in the Recal corrected in the Recal Report. Report. Recal Report. One class of 25 sampled was found to have been mischarac- terized. It overreported Hybrid, but Mischaracterized N/A N/A N/A N/A .030 FTES for a total cost of $150.17. This was not corrected in the Recal Report. Two of 25 classes Seven of 25 classes Two actual hour Four of 25 classes sampled were Three of 25 classes sampled were found classes of 100 sampled were found found to have sampled were found to have erroneously total classes to have overreport- erroneously overre- to have erroneously over reported .119 sampled were ed 0.008 FTES ported 0.150 FTES. overreported .064 FTES. Extrapolation found to have Extrapolation of the Extrapolation of Actual Hours FTES. Extrapolation of the errors resulted erroneously error resulted in .240 the error resulted of the error resulted in 10.210 overstated over reported overstated FTES for in 6.530 overstated in .825 overstated FTES for a total cost 1.9762 credit a total cost of $1,235. FTES for a total FTES for a total cost of $31,930. This was FTES. The esti- This was corrected in cost of $24,337. of $3,435. not corrected in the mated total cost the Recal Report. This was corrected Recal Report. was $10,179. in the Recal Report. Sources: District Annual Contracted Audit Reports Compared to the findings in the 2015-16 to 2018-19 audits, the district has eliminated many fundamental er- rors in scheduling class meeting times, in applying the correct method of attendance collection, and in the basic administrative tasks expected of faculty who manage positive (actual hour) attendance. In 2017-18, the district elected to forego claiming slightly more than 320 credit FTES, 8% of the FTES gen- erated, because the classes were incorrectly scheduled. This was recently verified by FCMAT in interviews with the district. The problems that persisted through fall 2019 were in the precision and discipline applied to the scheduling of instructional periods. Some internal auditing corrections the district planned to make have not occurred because of staffing shortages. The district has undergone staffing changes, but all staff responsible for the entry of schedule data have received training provided by the Strata Information Group. That training included a review of the require- ments in the Student Attendance Accounting Manual (SAAM) for the correct reporting of hours and time blocks required to meet state expectations. The Chancellor’s Office issued a new SAAM in December 2020. A senior administrator is working to orient the deans to changes in the manual. Based on informa- tion provided in interviews, deans and district leaders will conduct regular audits of census attendance to ensure compliance. A new academic scheduling coordinator will conduct audits of actual course hours published in the schedule. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 13 Findings and Recommendations Attendance Accounting Recommendations The district should: 1. Ensure that any revision of the strategic enrollment management plan includes the following SCFF student success outcome metrics by the end of calendar year 2021. a. Associate degrees for transfer (ADTs) b. Associate degrees (excluding ADTs) c. Credit certificates that require 16 units or more d. Completion of transfer-level mathematics and English courses within the first academic year of enrollment e. Successful transfer to four-year university f. Completion of nine or more CTE units g. Attainment of regional living wage 2. Introduce FTES goal setting processes for all future terms and academic years as part of the base funding SCFF metrics, which should include districtwide and division- and/or department-level targets such as the following: a. FTES increases disaggregated into the following categories: i. Credit instruction ii. Noncredit instruction iii. Dual enrollment generated FTES (credit) iv. Instructional service agreements v. South Bay Public Safety Training Consortium 3. Include in the strategic enrollment management plan goals that would result from successful activities as part of the supplemental allocation SCFF metrics. The goals should reflect the following SCFF supplemental allocation categories: a. Pell Grant recipients (federal) b. California College Promise Grant recipients c. AB 540 students 4. Revise the institutional goals in the strategic plan and include a broad range of the SCFF student outcome metrics as well as in the Accrediting Commission for Community and Junior Colleges (AACJC) Institutional Set Standards, and a new SEM plan. 5. Expedite educational efforts because the district’s fiscal solvency is at stake. In addition to an ideal WSCH-to-FTEF ratio of 590, the goals should include topics such as the following: a. Class fill rates of at least 80% on census day. b. Cost per FTES, calculated using the current expense of education as reported in the CCFS 311 documents, divided by the annual FTES. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 14 Findings and Recommendations Attendance Accounting c. Average annual salary and benefits of instructional faculty per section or per annual FTES. d The salary and benefits of all employees divided by the annual FTES for which there is state reimbursement. 6. Devote an early chapter in a revised SEM plan to explain the importance of the efficiency or productivity ratio; this will set the framework and answer why becoming more efficient is essential to the district’s future. 7. Develop standard reports districtwide that are presented to the board of trustees and the campus community regularly and that capture trends using a standard snapshot in time. 8. Develop standard reports districtwide that use a cohort group method to monitor the flow of student progress by groups that are presented regularly to the board of trustees and the campus community. 9. Ensure that the deans and district leaders tasked to conduct audits ensure compliance with attendance requirements in the SAAM and that the new academic scheduling coordinator conducts audits of actual course hours published in the schedule. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 15 Findings and Recommendations Program Review and Resource Allocation Program Review and Resource Allocation The fundamental purpose of ongoing program integrated planning and review (PIPR) is to maintain and improve the effectiveness of every college program and service, and of the institution as a whole, based on the results of regular, systematic assessment. In addition, all CTE programs of study are required by law to justify the need for the program every other year. A review and ranking of a nonpersonnel resource alloca- tion request in program review plans is the mechanism used to fund new expenditures. The ultimate bene- ficiaries of ongoing PIPR are the students and the community that the district serves, because expenditures for activities conducted on a college campus are justified and memorialized in written record. This process is also required by the ACCJC. Specifically, program review and resource allocation, which is a large part of PIPR, facilitates the following: • Creation of a three-year plan for each program • Improvement through comprehensive self-study, peer review, and planning • Development of a three-year budget request plan, including data to support annual budget requests • Ranking resource allocation requests to move programs, and thus the college, toward achieving their strategic plan goals • Creation of a living document that provides all basic information and planning for each pro- gram, and that can be referenced by stakeholders via a public website • Continuity of program leadership expertise even when some leadership changes occur (e.g., a change in a department chair). Establishment of a baseline for the integrated plan- ning process and cycle • Assessment of program viability • Accreditation compliance; board policy and administrative procedure compliance Another purpose of PIPR is to focus available resources, including staff time, budget, technology and space use, toward the achievement of goals and objectives to maintain or improve the effectiveness of the many programs that contribute to the college’s overall strategic plan. This means understanding that no addition- al resources are necessary, only the reallocation of existing ones. The district utilizes a three-year program review cycle. Interviews confirmed that the district is following this process for all student services and academic departments. In fact, although completion of program re- views was inconsistent in prior years, in 2020-21 37 of 39 academic and student support service programs completed their program reviews. In addition, the time spent completing the program reviews went from one year to four months. Program reviews include goals and activities, which are tied to the strategic plan. No evidence was presented to show that program review goals linked to other college planning efforts such as diversity, equity and inclusion goals; institution set standards; or Vision for Success Goals. Failure to link planning initiatives creates duplication of effort and of research requests, which leads to inconsisten- cies in data. The district has created a chart that shows all program review goals for all departments in academic affairs and student support services. Funding is not yet included on this chart, but the plan is to add that infor- mation in the future. With respect to other efforts to integrate planning with resource allocations, the only other relationship FCMAT found in its review of written materials and interviews was a rubric that had been developed for rating resource allocation requests from the program reviews. Also, it was not clear from the Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 16 Findings and Recommendations Program Review and Resource Allocation district’s website what the next step in the process was. Many unanswered questions remained, including the following: • Who would complete the rubric? • Once the ranking of resource requests is completed, where do the rankings go? • Who makes the final decisions about allocation of resources? • How are other requests that ultimately involve the allocation of resources, such as person- nel requests and infrastructure improvements, evaluated and ranked? FCMAT’s review of related board policies and administrative procedures did not provide any clarity on the above questions. In interviews, employees confirmed that resource allocations and program reviews do not depend on one another as they should, but the district hopes to create a link between the two during the upcoming year. Failure to do so will discourage people from investing time and effort in the program review process. Employees also confirmed that the budget allocation process is not described in any documents, including board policies and administrative procedures. The only written documentation FCMAT was pro- vided about budget development and allocation was a description of the “Program Integrated Planning and Review, Resource Allocation Process Committee (PIPR-RAP).” The PIPR-RAP’s purpose document stated that the committee is responsible for “the review and ranking of non-personnel resource allocation process (RAP) requests in program plans,” but it had no description about what happens once the committee ranks the requests. Individuals FCMAT interviewed stated that PIPR-RAP’s ranked requests move forward as recommendations to cabinet. However, none of the adminis- trators knew of any instances, other than when funding was not available, when the recommendations were not followed. Consequently, there is no established process for feedback regarding possible alternatives to the committee’s recommendations. In addition, the purpose statement for this committee makes it clear that it deals only in resource requests that are nonpersonnel related and not with requests for additional staffing. An academic senate subcommit- tee ranks faculty staffing requests, and these rankings are forwarded to cabinet as recommendations. The district has no established process for discussion and ranking classified staffing or management staffing re- quests. Classified staffing requests are funded based on which program is requesting the position (replace- ment or new); consequently, programs that have categorical funding (such as Puente, Extended Opportuni- ty Program and Services, and others) are approved for staffing, while programs funded using unrestricted general fund resources (such as admissions and records, counseling, academic support positions, and others) do not receive funds for staffing. FCMAT reviewed other duties of the PIPR-RAP and, although they are comprehensive with respect to program review, FCMAT learned from interviews that the members have little understanding of the bud- get process and that the committee deals only with augmentation requests. It is not involved in decisions about reductions; those are made by deans or the institutional efficiency task force, which is chaired by the district president. Most respondents indicated the majority of people at the district as a whole know little of the budget allo- cation process. FCMAT also heard of widespread distrust and confusion of any information that comes from the business office during the interview stage of the process (February through April 2021). This confusion has led to an unwillingness to discuss reductions. This culture was visible during the past year when faculty refused any cuts in pay even as administrators took 15 furlough days and classified staff took 10 so that no employees would lose their jobs. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 17 Findings and Recommendations Program Review and Resource Allocation Recommendations The district should: 1. Continue its efforts to improve the program review process so it is linked to other district planning efforts and to the resource allocation process. 2. Help educate personnel, create a flow chart that describes the program review process and includes timelines. Strive to create an open, transparent budget request process that includes input through participatory governance. 3. Establish a classified staffing committee and process to evaluate budget requests (similar to the academic senate committee and process for faculty requests). 4. Document the budget request process in board policy and administrative procedure so that it has avenues for articulation and publication of the budget request process that help foster general understanding throughout the district. 5. Provide districtwide budget information and training, including specific training for department chairs, faculty and staff leaders, and managers about the budget process, their role in it, and the relationship between overall efficiency and funding. 6. Establish connections between the members of and the work of both the PRIP-RAP and the institutional efficiency task force. 7. Establish the following categories for potential funding to assist with the budget allocation process: a. Ongoing funds – These will include all permanent staffing, licenses, etc. b. One-time funds – These include requests for one-time expenses either for unrestricted or categorical programs. Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 18 Appendix Appendix A. Study Agreement Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 19 Appendix FISCAL CRISIS & MANAGEMENT ASSISTANCE TEAM STUDY AGREEMENT October 28, 2020 The Fiscal Crisis Management and Assistance Team (FCMAT), hereinafter referred to as the Team, and the Chancellor’s Office on behalf of the California Community College Board of Directors, hereinafter referred to as the Chancellor’s Office, mutually agree as follows: 1. BASIS OF AGREEMENT The Team provides a variety of services to local educational agencies (LEAs). The Chancellor’s Office has requested that the Team provide for the assignment of professionals to study specific aspects of the Gavilan Joint Community College District operations, based on the provisions of Education Code (EC) Section 84041. These professionals may include staff of the Team, county offices of education, the California Department of Education, school districts, charter schools, community colleges, or private contractors. All work shall be performed in accordance with the terms and conditions of this Agreement. 2. SCOPE OF THE WORK A. Scope and Objectives of the Study At the request of the Chancellor’s Office, and in accordance with Education Code Section 84041, FCMAT shall review the following for the Gavilan Joint Community College District: 1. Fiscal Health Risk Analysis: Prepare an analysis using FCMAT’s Fiscal Health Risk Analysis (2020 version), identify the Gavilan Community College District’s risk rating for fiscal solvency, and provide recommendations to the district for improving fiscal health. 2. Alignment with Vision for Success & Student Centered Funding Formula: Determine whether the district has developed and implemented a strategic enrollment plan in alignment with SCFF metrics. Make recommendations regarding the plan and implementation priorities, where appropriate. 3. Strategic Program Review: Determine whether the district has reviewed instructional programs, student services, and administrative services in conjunction with revenue and cash flow projections. Make recommendations regarding the review and implementation strategies, where appropriate. B. Services and Products to be Provided Fiscal Crisis and Management Assistance Team 1 Gavilan Joint Community College District 20 Appendix 1. FCMAT will coordinate dates for technical assistance with the district. 2. At the conclusion of technical assistance, FCMAT will provide a management letter documenting that the requested services are completed. 3. PROJECT PERSONNEL Technical assistance services will be provided by FCMAT Deputy Executive Officer Michelle Giacomini, FCMAT Intervention Specialist Marcus Wirowek, and Cambridge West Partnership, LLC. 4. PROJECT COSTS The cost for studies requested pursuant to EC 42127.8(d)(1) shall be: A. $1,100 per day for each FCMAT staff member while on site, conducting fieldwork at other locations, presenting reports, or participating in meetings. The cost of independent consultants will be billed at the actual daily rate for all work performed based on the provisions of EC 84041. B. All out-of-pocket expenses, including travel, meals, lodging, etc. The Chancellor’s Office will be invoiced at actual costs, with 50% of the estimated cost due following the completion of the on-site review and the remaining amount due upon acceptance of the final management letter by the Chancellor’s Office. Based on the elements noted in section 2A, the total not-to-exceed cost of the study is $128,000. C. Any change to the scope will affect the estimate of total cost. Payments for FCMAT services are payable to Kern County Superintendent of Schools - Administrative Agent, located at 1300 17th Street, Bakersfield, CA 93301. 5. RESPONSIBILITIES OF THE DISTRICT, CHANCELLOR’S OFFICE A. The Gavilan Joint Community College District will provide office and conference room space while on-site reviews are in progress. B. The Gavilan Joint Community College District will provide the following (if requested): 1. Policies, regulations and prior reports addressing the study request. 2. Current or proposed organizational charts. 3. Current and two prior years’ audit reports. 4. Any documents requested on a supplemental list. Any documents requested on the supplemental list should be provided to FCMAT in 2 Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 21 Appendix electronic format; if only hard copies are available, they should be scanned by the Gavilan Joint Community College District and sent to FCMAT in an electronic format. All documents should be provided in advance of fieldwork; any delay in the receipt of the requested documentation may affect the start date and/or completion date of the project. Upon approval of the signed study agreement, access will be provided to FCMAT’s SharePoint document repository, and all requested documents shall be uploaded by the Gavilan Joint Community College District. C. The Chancellor’s Office administration will review a draft copy of the management letter resulting from the study. Any comments regarding the accuracy of the data presented in the management letter or the practicability of the recommendations will be reviewed with the Team prior to completion of the final management letter. The final management letter will be published on the FCMAT website. 6. PROJECT SCHEDULE The schedule of services will be jointly determined by FCMAT and the district. 7. COMMENCEMENT, TERMINATION AND COMPLETION OF WORK FCMAT will begin work as soon as it has assembled an available and appropriate study team consisting of FCMAT staff and independent consultants, taking into consideration other jobs FCMAT has previously undertaken and assignments from the state. The Team will work expeditiously to complete its work and deliver its final management letter, subject to the cooperation of the Chancellor’s Office and any other parties from which, in the Team’s judgment, it must obtain information. Once the Team has completed its fieldwork, it will proceed to prepare a draft management letter and a final management letter. Prior to completion of fieldwork, the Chancellor’s Office may terminate its request for service and will be responsible for all costs incurred by FCMAT to the date of termination under Section 4 (Project Costs). If the Chancellor’s Office does not provide written notice of termination prior to completion of fieldwork, the Team will complete its work and deliver its management letter and the Chancellor’s Office will be responsible for the full costs. The Chancellor’s Office understands and agrees that FCMAT is a state agency and all FCMAT reports are published on the FCMAT website and made available to interested parties in state government. In the absence of extraordinary circumstances, FCMAT will not withhold preparation, publication and distribution of a management letter once fieldwork has been completed, and the Chancellor’s Office shall not request that it do so. 8. INDEPENDENT CONTRACTOR FCMAT is an independent contractor and is not an employee or engaged in any manner with the Chancellor’s Office. The manner in which FCMAT’s services are rendered shall be within its sole control and discretion. FCMAT representatives are not authorized to 3 Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 22 Appendix speak for, represent, or obligate the Chancellor’s Office in any manner without prior express written authorization from an officer of the Chancellor’s Office. 9. INSURANCE During the term of this agreement, FCMAT shall maintain liability insurance of not less than $1 million unless otherwise agreed upon in writing by the Chancellor’s Office, automobile liability insurance in the amount required under California state law, and workers’ compensation as required under California state law. FCMAT shall provide certificates of insurance, with California Community Colleges Chancellor’s Office named as additional insured, indicating applicable insurance coverages upon request. 10. HOLD HARMLESS FCMAT shall hold the Chancellor’s Office, its board, officers, agents and employees harmless from all suits, claims and liabilities resulting from negligent acts or omissions of its board, officers, agents and employees undertaken under this agreement. Conversely, the Chancellor’s Office shall hold FCMAT, its board, officers, agents and employees harmless from all suits, claims and liabilities resulting from negligent acts or omissions of its board, officers, agents and employees undertaken under this agreement. 11. COVID-19 PANDEMIC Because of the existence of COVID-19 and the resulting shelter-in-place recommendations, local educational agency closures and other related considerations, at FCMAT’s sole discretion, the Scope of Work, Project Costs, Responsibilities of District (Sections I, IV and V herein) and other provisions herein may be revised. Examples of such revisions may include, but not be limited to, the following: A. Orientation and exit meetings, interviews and other information-gathering activities may be conducted remotely via telephone, video conferencing, etc. References to site work and fieldwork shall be interpreted appropriately given the circumstances. B. Activities performed remotely that are normally performed in the field shall be billed hourly as if performed in the field (excluding out-of-pocket costs). C. The district may be relieved of its duty to provide conference and other work area facilities for the Team. 12. FORCE MAJEURE Neither party will be liable for any failure of or delay in the performance of this study agreement due to causes beyond the reasonable control of the party, except for payment obligations by the district. 13. CONTACT PERSON Name: Lizette Navarette, 4 Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 23 Appendix Vice Chancellor for College Finance and Facilities Planning Telephone: (916) 445-8752 E-mail: lnavarette@cccco.edu 11-9-2020 Lizette Navarette Date Vice Chancellor for College Finance and Facilities Planning California Community Colleges Chancellor’s Office October 28, 2020 Michael H. Fine Date Chief Executive Officer Fiscal Crisis and Management Assistance Team Fiscal Crisis and Management Assistance Team Gavilan Joint Community College District 24 5