(an agency of the Commonwealth of Massachusetts) …

BERKSHIRE COMMUNITY COLLEGE

(an agency of the Commonwealth of Massachusetts)

FINANCIAL STATEMENTS

JUNE 30, 2018

BERKSHIRE COMMUNITY COLLEGE

(an agency of the Commonwealth of Massachusetts)

Financial Statements and Management's Discussion and Analysis

June 30, 2018

C O N T E N T S

Independent Auditors' Report

Management's Discussion and Analysis (Unaudited)

Financial Statements:

Statement of Net Position

Statement of Revenues and Expenses

Statement of Changes in Net Position

Statement of Cash Flows

Notes to the Financial Statements

Required Supplementary Information: Schedule of Proportionate Share of Net Pension Liability (Unaudited) Schedule of Contributions - Pension (Unaudited) Notes to the Pension Required Supplementary Information - Pension (Unaudited) Schedule of Proportionate Share of Net OPEB Liability (Unaudited) Schedule of Contributions - OPEB (Unaudited) Notes to the Required Supplementary Information - SRBT (Unaudited)

Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

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59-60

INDEPENDENT AUDITORS' REPORT

To the Board of Trustees of Berkshire Community College Pittsfield, Massachusetts

Report on Financial Statements We have audited the accompanying financial statements of Berkshire Community College (an agency of the Commonwealth of Massachusetts, the "Commonwealth") (the "College"), and its discretely presented component unit, the Berkshire Community College Foundation, Inc. (the "Foundation"), which comprise the statement of net position as of June 30, 2018, the related statements of revenues and expenses, changes in net position and cash flows, where applicable, for the year then ended, and the related notes to the financial statements, which collectively comprise the College's basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

25 Braintree Hill Office Park Suite 102 Braintree, MA 02184 P:617.471.1120 F:617.472.7560 27 Church Street Winchester, MA 01890 P:781.729.4949 F:781.729.5247

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the College and its discretely presented component unit as of June 30, 2018, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter As discussed in Note 2 to the financial statements, GASB Statement 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, is effective for fiscal year 2018 and required the College to restate beginning net position at July 1, 2017 to recognize its proportionate share of the net postemployment benefits other than pensions obligation determined for the State Retirees' Benefit Trust. Our opinion is not modified with respect to that matter.

Required Supplementary Information Accounting principles generally accepted in the United States of America require that management's discussion and analysis and the required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 12, 2018, on our consideration of the College's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Berkshire Community College's internal control over financial reporting and compliance.

Certified Public Accountants Braintree, Massachusetts

October 12, 2018

BERKSHIRE COMMUNITY COLLEGE

(an agency of the Commonwealth of Massachusetts)

Management's Discussion and Analysis (Unaudited)

June 30, 2018

The following discussion and analysis provides management's view of the financial position of the College as of June 30, 2018 as well as the results of its operations for the year then ended. This analysis should be read in conjunction with the College's financial statements and notes thereto, which are also presented in this document.

Introduction

Berkshire Community College (the "College") is a public institution of higher education serving 1,055 FTE students with 54 full-time faculty, 99 part-time faculty, and 121 full-time staff members. The College is located in Pittsfield, Massachusetts. In addition, the College offers credit and non-credit programs at the South County Center in Great Barrington, the Conte Educational Center in downtown Pittsfield, and McCann Technical School in North Adams. The College offers 55 degree and certificate programs plus a wide range of non-credit workforce development training options.

Management's Discussion and Analysis is required to focus on the College, not its component unit.

Financial Highlights

The College's financial performance from FY17 to FY18 is indicated by the following:

Total net position in FY18 increased $3,693,129 or 9.4% as compared to an increase of $13,305,505 or 46.0% in FY17.

Unrestricted net position in FY18 decreased $34,210 or 1.8% as compared to an increase of $352,487 or 37.6% in FY17.

Total operating revenues in FY18 increased $510,699 or 4.4% as compared to a decrease of $1,548,525 or 11.7% in FY17.

Net student fees in FY18 decreased $55,853 or 1.2% as compared to a decrease of $133,383 or 2.7% in FY17.

Operating grants and contributions in FY18 increased $395,282 or 6.6% as compared to a decrease of $1,415,815 or 19.1% in FY17.

FTE enrollments decreased 6.4% in FY18 as compared to a decrease of 8.4% in FY17.

Operating expenses in FY18 decreased $1,743,004 or 5.8% as compared to a decrease of $942 or 0.0% in FY17.

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