COEUR d'ALENE - North Idaho College got a clean bill of health in its annual audit Wednesday night, and is in good financial shape heading into the future.

Toni Hackwith, an auditor with Magnuson, McHugh & Company, explained to the Board of Trustees that the college is in full compliance with all state and federal guidelines.

She said the audit checked compliance with financial statements, internal controls over financial reporting and major federal programs. The college got an unqualified, or "clean," opinion in all three areas, which is the best opinion she could give.

"You have a very competent staff, you have good systems in place and you have experienced staff," Hackwith said.

She found that the college operating revenue remained stable, while operating expenses increased by $1.9 million.

"Operating revenues consist of any tuition, fees, and any operating grants you received from the state or federal government," she said.

The college had $4.13 million in capital contributions this year, and the overall increase in its net position is $5.44 million, largely due to the increased capital contributions, Hackwith said.

"Another financial highlight is your state appropriations were up by $1 million this year," she said, adding private gifts, grants and contracts were also up by $370,000.

Because the revenue streams coming into the college are intermittent throughout the year, the college uses a fund balance account to pay its day-to-day expenses to avoid borrowing.

The Government Finance Officers Association recommends a minimum healthy fund balance of 5 to 15 percent of the college's general fund operating revenues, or enough of a balance to operate the college for one to two months.

NIC's 2013 fund balance was $11.6 million, which is enough revenue to operate for 93 days, or 25 percent of the college's general fund operating revenues.

"You've been as low as 27 days in 2006, and you've been as high as 109 days in 2011," Hackwith said. "If you look at the fund balance as a percentage of your annual revenue, in 2006 you were at 7 percent and 2011 you were at 27 percent."

Board members thanked staff and Hackwith for the thorough review.

In other business, Trustee Ken Howard was elected as the board chair for 2014, and Trustee Judy Meyer was elected to the position of vice chair, and Trustee Ron Nilson was elected as secretary treasurer.