Northern Essex Community College
Board of Trustees Audit & Finance Committee Minutes
Wednesday, May 6, 2026
Attendees: Trustees Jennifer Borislow (by phone then arrival at 4:30), Evan Silverio, Juan Yepez, President Lane Glenn, Michael McCarthy, Anthony DeGregorio, Jenn Ball. Notetaking: Kathleen Teixeira
Chairman Silverio called the meeting to order 4:17 pm. The minutes of the April 1, 2025 were approved with a motion presented by Trustee Yepez and seconded by Trustee Borislow.
FY2027 Budget Process Update (AFC-26-11)
Executive Vice President Michael McCarthy presented an overview of the proposed FY2027 College Operating Budget. The budget assumes approximately 5% enrollment growth, bringing projected enrollment to approximately 90,849 credits. The College expects to return to the Committee in October with a supplemental/finalized budget once state appropriations, Free College funding, and fall enrollment are better known.
Revenue Highlights:
- Tuition and Fees revenue is projected at approximately $29.9 million, an increase of approximately $2.6 million, or 9.6%, from the FY2026 third-quarter year-end projection.
- Student Financial Aid is projected at approximately $16.1 million, reflecting a projected discount rate of approximately 54%, primarily driven by Free College funding.
- Grants and Other Revenues are projected at approximately $34.4 million.
- State Support Appropriations are budgeted conservatively at approximately $39.9 million, as the final state appropriation has not yet been determined.
- Net Investment Income is projected at approximately $2.3 million.
Expense Highlights:
- Salaries and Benefits are budgeted at approximately $59.2 million, an increase of approximately $4.2 million over the FY2026 third-quarter projection. The increase reflects current salaries, committed union increases, estimated non-unit professional increases, the full-year impact of FY2026 salary increases, and increased state benefit charges.
- Other Operating Expenses are projected at approximately $26.3 million, including increases in utilities and $500,000 for the Whittier School project.
- Depreciation is projected at approximately $6 million, with the Buildings B & E Renovation Project and related furniture and equipment purchases contributing to the increase.
- Bad Debt is projected at approximately $350,000.
- Capital Appropriations for state-funded capital projects are budgeted at approximately $1.95 million, including recently awarded state funding for smaller facilities capital projects.
The proposed FY2027 budget results in an approximately $29,000 positive increase in net position.
Motion to Approve FY2027 College Operating Budget (AFC-26-12)
The Committee reviewed the proposed FY2027 College Operating Budget of $91,849,015. The budget incorporates estimated state support, enrollment projections, salaries and benefits, grant support, previously approved Institutional Support Fee increases, and projected operating expenditures.
VOTED: To recommend that the Board of Trustees approve the FY2027 College Operating Budget of $91,849,015, as presented.
Addendum to the Investment Policy Statement (AFC-26-13)
McCarthy reviewed the proposed addendum to the College’s Investment Policy Statement, which was developed following recommendations from GW&K and is intended to better align the College’s investment strategy with the Foundation’s investment policy.
The proposed changes establish more specific asset-allocation parameters for equities, fixed income, and cash and provide additional flexibility within the College’s fixed-income portfolio. The addendum would permit up to 20% of fixed-income investments to be held in high-yield corporate bonds, while establishing minimum, target, and maximum allocations and benchmarks for the portfolio.
Discussion:
- The Committee discussed the additional flexibility provided by the revised fixed-income parameters.
- Trustees discussed the College’s longstanding relationship with GW&K and whether the College should periodically issue an RFP to evaluate investment management services.
- Additional questions were raised regarding the composition and allocation of the College’s investments.
- Administration agreed to follow up on the questions regarding the investment mix and the potential for a future RFP.
VOTED: To recommend that the Board of Trustees approve the addendum to the Investment Policy Statement for Northern Essex Community College.
Amendments to Existing Policies
McCarthy reviewed proposed revisions to the College’s Travel, P-Card, and Procurement Policies, noting that the policies are reviewed regularly as part of the College’s financial controls and audit process.
Travel Policy (AFC-26-14)
Changes to the Travel Policy are primarily administrative and include formatting improvements, updated links, and clarification regarding meal reimbursements for non-overnight conferences.
P-Card Policy (AFC-26-15)
Major revisions include:
- Increasing the single-transaction limit from $999 to $2,500.
- Eliminating the receipt requirement for transactions under $10.
- Maintaining existing controls and approval requirements while reducing administrative burden associated with low-dollar purchases.
The Committee discussed safeguards associated with P-Cards, including cardholder-specific transaction and monthly limits. Administration noted that limits vary depending upon the cardholder’s purchasing responsibilities and that transactions exceeding established limits may be rejected. Splitting transactions to circumvent established limits remains prohibited.
Procurement Policy (AFC-26-16)
The primary change increases the purchase order requirement threshold from $1,000 to $2,500, aligning the threshold with the revised P-Card limit and reducing the number of purchase orders required for lower-dollar transactions. Existing procurement controls and approval requirements remain in place.
VOTED: The Committee voted to recommend approval of the revised FY2027 Employee Travel Policy, Employee P-Card Policy, and Employee Procurement Policy. The motion carried.
Other Business
The Committee was reminded that the next Audit & Finance Committee meeting is scheduled for October 7, 2026. The FY2027 meeting schedule will be shared with the Board.
Adjournment
With no further business, the meeting was adjourned.
Respectfully submitted by Kathleen Teixeira
