From $13.3 million in 2008, net assets increased to $14.87 million in 2009 and $16.1 million in 2010.
The increase in net assets, the report stated, was attributable to $1.1 million increase in revenues — $6.7 million in ’09 to $7.8 million in ’10 — from federal grants and $466,636 from appreciation of the market value of NMC’s investments.
The $1,146,028 in federal grants came from State Fiscal Stabilization Fund, Education State Grants, American Recovery and Reinvestment Act, among other grants.
In the last fiscal year, the college reported a strong cash position with an overall appreciation in balances of $651,052.
Of the $16.1 million in net assets, $5.9 million was in capital assets; $3.2 million, restricted, nonexpendable; $2.2 million, restricted, expendable; and $4.79 million, unrestricted.
Operating revenues, meanwhile, increased from $9.5 million in 2009 to $10.48 million in 2010.
The report, however, noted that NMC showed net operating loss of $4.54 million.
“This indicates that the college did not generate adequate revenues from operations to cover all its expenses,” the report said.
The report, however, clarified that there’s a net operating loss because CNMI appropriations — reported at $5.32 million in FY’10 — and endowment fund activities are not reported as operating revenues but as non-operating revenues.
Last fiscal year, NMC’s Endowment Fund investments posted a net gain in fair value of $466,636.
The audit further stated that NMC will continue to reflect operating losses until such time that operating revenues are increased “substantially” and it will no longer rely on CNMI appropriations.
It was pointed out that the CNMI’s bleak economic outlook resulting in dwindling available resources will continue to affect the College’s budget under appropriations.
Despite a bleak economy, the CNMI’s support of the college has remained consistent, the report stated.
Moreover, a $243,354 decrease in tuition and fees was reported last fiscal year and the NMC acknowledged a declining trend in student enrollment since FY’ 04.
The audit also noted that “a material portion of the college’s tuition and fees are funded via Pell Grants to students. The college relies on revenues from tuition and fees for nonpayroll related expenses of the college, including equipment renewals, replacements and maintenance.”
There was a $987,087 increase in expenses consistent with the increased level of operating revenues as a result of new grants and related support costs.
Of the $15 million in expenses in FY’10, $7,186,293 was spent on salaries. This was a $549,316 increase from the previous year.
Expenses associated with services jumped from $2.5 million in FY’09 to $2.9 million in FY’10.
Other expenses were $916,676, benefits; $840,330, insurance, utilities, rent; $659,187, depreciation; $302,279, supplies; miscellaneous, $2.2 million.
