A state legislative auditing report found that Anne Arundel and Carroll community college were carrying several million-dollar, unrestricted-fund deficits in fiscal year 2013 related to future expenses for retiree benefits.
The Office of Legislative Audits on Wednesday released the findings as part of a 10-page report for fiscal year 2013 from audits at 15 state community colleges.
The report said AACC incurred a $13.9 million deficit in unrestricted funds, or money in a general fund that is not tied to a specific purpose. Carroll Community College incurred a $8.3 million deficit, the report said. The report said both schools cited increases to “post-employment benefit liabilities,” such as retirement or health care benefits.
“This was not about our annual operating results but is the result of projected retiree benefits, which we are required to report in our annual audited financial statements,” said Melissa A. Beardmore, AACC’s vice president for Learning Resources Management. “The college is fiscally stable and able to pay its bills on time. We are working in partnership with Anne Arundel County government to establish a trust as a vehicle to fund this future liability.”
“There is a deficit in our unrestricted net position related to post-employment benefits for retirees," said Carroll Community College's president, James D. Ball. "The annual cost related to this liability is fully paid on a pay-as-you-go basis out of the college’s operating budget. The college is in a strong financial position and is able to meet its financial obligations each and every year.”
Legislative auditor Thomas J. Barnickell III said that it’s not unusual for a government agency to have such a deficit and that the community colleges are not in financial trouble. But he added that the deficits could eventually become an issue for the colleges.
He added that the report will be sent to the Maryland Higher Education Commission for review and comment but offered no recommendations for the findings.