TORRINGTON – Eastern Wyoming College is financially sound and fiscally responsible, according to the results of an annual audit for the fiscal year ending June 30.

That was the report from Wayne Herr, certified public accountant from McGee, Hearne & Paiz, LLP in Cheyenne, who presented the audit results to the EWC Board of Trustees on Tuesday.

There was only one “red flag” in the report, Herr told trustees, but it wasn’t due to anything EWC did. There was a negative balance in one account, which holds money not otherwise dedicated to other projects, due to changes made a few years ago to the way the state figures employee insurance and retirement accounts.

Last year, Herr told the board the state Governmental Accounting Standards Board determined there would be a future need for about $790 million to cover retired state employees and twas divvying up the responsibility for that pool of money among participating entities.

EWC’s projected share of that pot is somewhere north of $10.4 million, Herr said.

Entities “have certain liabilities involved for the future,” he said. “We talked about this coming up, but we didn’t have any idea of what the magnitude would be.”

Kwin Wilkes, vice president for administrative services at EWC, told The Telegram last year that liability is only on paper. The state sets aside a percentage of each dollar paid into the state insurance pool as premiums to cover the projected need. Last year was the first time EWC’s share of that $790 million had to appear in its annual audit. 

Again this year, the liability resulted in a negative balance. But Herr told Trustees, with that amount removed, the true balance in the account increased to some $2.6 million in the positive.

The retiree health insurance “is not a real expense,” Herr said. “Costs are just higher for everyone because retirees can stay on the state plan. (The reporting changes) put some really big liabilities on there, which you don’t have to pay, but regulators say we have to put” in the annual audit report.

Overall, the audit found the necessary controls and procedures in place at the college, and that they were implemented correctly, Herr said. EWC was found to be in compliance with all financial requirements placed upon it and there were no issues in performing the audit, he said.

“For the (controls) we test – on expenditures, cash receipts and federal funds – we test samples of transactions, look for the controls, make sure they’re there,” Herr said. “We didn’t find any problems. If there were supposed to be approvals (before funds were allocated), the approvals were there and were made by the proper person.

“Looking at controls, we look at two pieces – are they designed right and, if they are designed right, did we use them?” he said. “We tested for both and found no issues.”

In a related report, Wilkes told the board the operational fund budget as approved in July was $14,595,421. Trustees increased that budget by $15,000 in September to reimburse the College Relations department to pay for work completed for other departments. The amended budget as of Oct. 1 stands at $14,610,421.

Revenues in the operational fund totaled almost $6.7 million so far in Fiscal 2020, 46 percent of the approved budget, representing a 12 percent increase over last year. The increase is primarily due to a 46 percent increase in tuition and fees, currently at more than $1.9 million for the fiscal year.

Wilkes told the board a significant portion of the revenue bump comes mostly from an increase in mandatory student fees from $28 to $38 per credit hour instituted this semester. 

While overall revenue is up so far this year, Trustees asked what the impacts of the closure of the Western Sugar Cooperative factory in Torrington would be to the college’s bottom line. Wilkes said he’d asked that question of the Goshen County Assessor’s office and was told, while there definitely would be a financial impact, it was still too early to tell what that impact would be.

“We do know it’s going to happen, but I don’t think at this point the assessor knows what’s going to change,” Wilkes said. “I’d assumed (the financial impact of the loss of tax revenue) would have hit already, but the assessor said it hits later.”