Lakeland Community College Final Audit Report

By Brian Massie, A Watchman on the Wall

The final audit report from the State of Ohio regarding Lakeland Community College has been issued. We have to say that it is not a very encouraging report. Can the College be saved? The following are key statements that are in the report.

What the State Auditors found:

Many key operational decisions regarding faculty, programs, and facilities, date back to the early 2010s during a time of peak enrollment. Since that point in time, the College has seen enrollment decline by nearly 50 percent, but the administration has not made decisions to reflect the changes in operations. Staffing has not been significantly reduced, new facilities have been acquired, and courses are being held with minimal enrollment. Based on projected population trends, it is highly
unlikely to see significant increases in enrollment over the next decade.

Due to this, the Board of Trustees is at a point in time where key operational decisions should be made to guide the college into the next decade.

The College has historically maintained low fund balances, opting to use available funds on direct student services. This policy does not provide a significant cushion to weather times of difficulty, such as incurring unforeseen expenses or sudden declines in revenue. We found that, in recent years, without federal relief funds due to the COVID-19 pandemic, the College would have had an operating deficit
and been more reliant on fund balances for general expenditures.

Overall, we found that LKCC leadership, both the Board of Trustees and the administration, will need to come together and make strategic management decisions to ensure the continued operations of the College. When informed with critical information identified within the report, these individuals will be in a better position to make key strategic decisions.

Key Observations by the State Auditor:

Key Observation 1: The College relies on public funds – local property taxes and state funding –for the majority of its operational revenue. As such, the Board and Administration must work to be good stewards of public resources and ensure decisions are made to reflect the changing landscape of higher education and the local area. We found that the College has failed to make major operational adjustments as enrollment has steadily declined over the past decade. As a result, based on current enrollment, the college is overstaffed, burdened with debt related to facilities that are significantly underutilized, and is offering hundreds of course sections that do not meet minimum enrollment thresholds each semester

[LFC input: Lakeland Community College has three property tax levies that generate over $20 million per year for the school.

Type of LevyExpiration DateEffective RateAnnual Tax

Renewal 2022
20311.06 mills$8,092,126
Replacement 2010Continuous
1.30 mills$9,701,469
Bond Levy 20152041.32 mills$2,249,556

Key Observation 2: During the engagement, members of the Board of Trustees reported that they were unaware of the deteriorating financial condition of the College. Additionally, the Board lacked insight into key operational decisions. As the main governance body for LKCC, the Board must obtain appropriate information from the administration to understand the current status of the College’s operations. Further, it must identify proactive solutions that can help to align operations
with the current market conditions of Lake County.

[LFC input: It was very obvious from the Board meetings that we attended that President Morris Beverage was calling the shots and the Board was merely a rubber stamp. Hopefully, with new Board leadership they can hold the new President accountable for the College’s performance. The cornerstone of Lakeland’s teaching was Diversity, Inclusion and Equity, When Trustees Matt Hebebrand and Ellen Foley Kessler questioned their “cornerstone” they were vilified.]

Key Observation 3: As enrollment declines, revenue from student tuition and state funding will also
likely decline, which will lead to potential budget issues if expenditures are also not reduced in a
similar manner. However, while other community colleges have seemingly reacted to changes in
enrollment trends, the administration at LKCC has not similarly adapted its operations. As such, the
student to teacher ratio at LKCC is significantly lower than the statewide community college average.

Key Observation 4: The college has a total of 4,476 seats on the campus in various classroom and
laboratory settings. During the 2023 Spring semester, the total student enrollment dropped below
this number. Further, one third of students attended courses exclusively online and did not require
any classroom space. Considering that the entire student body would never be attending classes at
the same time due to scheduling, the number of classroom and laboratory spaces maintained by the
College greatly exceeds the demand of the student body.

Key Observation 5: Based on our analysis, nearly half of the classroom and laboratory space at
LKCC is considered underutilized based on industry standard criteria. The buildings on the main
campus are interconnected with each other. This building design makes the elimination or
mothballing of existing space challenging. Despite this low utilization rate, declining enrollment,
and shift to online learning, the College recently broke ground on a 16,000-foot expansion on the
main campus. Choosing to expand its campus outwards rather than addressing the existing
space that is underutilized may further exacerbate issues related to maintaining excessive
classroom and facilities space.

[LFC Input: To think that the Beverage administration and the Board entertained the thought of building dormitories shows how out of touch they were to the needs of the community. Many years ago we were told by Lake County manufacturers that the College administration ignored their requests to change the curriculum at Lakeland. It was not done and many students opted to attend Lorain Community College since their courses were not available at Lakeland. There was a definite disconnect between the college administration and the business community.]

Key Observation 6: The Holden University Center was purchased by LKCC in 2014 for $13.5
million through the issuance of bonds. The purpose of the building was to host programs offered by
four-year institutions. During the course of the audit, the Holden Building was mothballed by the
College, meaning that it is no longer in use and any programs being held were moved to facilities
on the main campus. While the College will eliminate some expenditures related to the operation of
the Holden University Center there is still outstanding debt related to the purchase of the building,
which will be fully paid in 2039. The building is separated from the main campus by a major
roadway, and the College should consider options related to the sale or lease of this building.

Key Observation 7: Because of the choices that were, or were not made, over the past decade, the
College finds itself at the precipice of fiscal watch, and in fact had to institute a reduction in force
during the engagement. The Board and Administration have the opportunity to work together to
make decisions to align operations to meet current demand for services and guide the College over
the next decade. Difficult choices regarding staffing levels, program offerings, and other operations
may need to be made during this process but will ultimately help to ensure the sustainability of the
College into the future.

Categories: Education, Lake, Lakeland Community College, Ohio Counties, Uncategorized

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