Ohio Administrative Code › Title 3358:11 - Michael J. Owens Community College › Chapter 3358:11-1 - Board of Trustees Policies › Section 3358:11-1-12 - Financial standards policy

Current through all regulations passed and filed through July 1, 2024
(A) Policy statement. The purpose of this
			 rule is to institute financial standards so for any fiscal year, whole or part,
			 the financial condition of the college maintains a generally acceptable level
			 of prudent professional financial management and foresight.
(B) Strategic standards.
(1) The board of trustees finance committee
			 
									may
			 meet up to five times during the academic year
									, unless the committee chair
			 deems otherwise
									 for a certain fiscal
			 period.
(2) Reserve/net asset
			 requirements. The college shall maintain a financial reserve or net asset
			 requirements, as follows:
(a) Unrestricted
			 educational and general current operating fund. The undesignated reserve within
			 this fund balance should be greater than or equal to fifteen per cent of this
			 fund's total prior year annual expenditures and transfers.
(b) Unrestricted auxiliary fund. The
			 undesignated reserve within this fund balance should be greater than or equal
			 to ten per cent of this fund's self-operated prior year annual revenues.
(i) Insurance claims reserve. Within the
			 auxiliary fund type, an insurance claims reserve shall be established and
			 maintained to protect against unforeseen liability claims. This reserve shall
			 be set aside to protect against future liability, health insurance and workers'
			 compensation claims.
(ii) To ensure
			 needed funds are available for future unforeseen claims, the fund shall
			 reserve, two years liability deductible, three months health insurance claims
			 and annual workers' compensation deductible. The target reserve shall be
			 established at one million dollars.
(c) Unrestricted plant fund. The undesignated
			 reserve within this fund balance should be greater than or equal to two per
			 cent of investment in plant. Investment in plant means the original book value
			 (prior to any depreciation) of land improvements, buildings, and building
			 improvements.
(d) Use of reserves.
			 Reserves shall only be utilized in emergency situations. Owens community
			 college will strive to adopt a budget where current revenues meet or exceed
			 current expenditures for all funds. When Owens community college is required to
			 use reserves as a short-term solution to resolve an immediate situation, (for
			 example, adjusting to state funding cutbacks, decrease in tuition rates, court
			 action, or to cover upfront costs of a potential liability claim), due to
			 unforeseen circumstances in the unrestricted fund, it must be disclosed to the
			 board of trustees at the next board meeting, and a plan to eliminate the use of
			 reserves in the annual budget must be prepared in the five-year planning
			 process. In addition, all other funds shall have a balanced budget. Any
			 shortfall not covered by revenues shall be covered by transfers from the
			 unrestricted fund.
(3)
			 Long-range forecast. A long-range five-year forecast shall be prepared and
			 presented as a component of the annual budget presentation to the board of
			 trustees, which includes the institution's expected financial trends under
			 clearly stated assumptions:
(a) The
			 institution's expected financial performance as compared to the institution's
			 maintenance of a financial reserve or net asset requirements.
(b) A reporting of financial dashboard
			 metrics.