Annual financial report for the year ended June 30, 1996 |
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11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 1/19 Annual Financial Report For the Year Ended June 30, 1996 Arizona Board of Regents EX-OFFICIO The Honorable J. Fife Symington Governor of Arizona The Honorable Lisa Graham Keegan Superintendent of Public Instruction APPOINTED George H. Amos III Tucson Judy Gignac Sierra Vista Eddie Basha Chandler John F. Munger Tucson Rudy Campbell Tempe Don Ulrich Paradise Valley Arthur Chapa Tucson John Schmitt Student Regent Kurt Davis Cave Creek The University of Arizona Administration Manuel T. Pacheco President Celestino Fernandez Executive Vice President and Provost of Arizona International Campus Paul Sypherd Senior Vice President for Academic Affairs & Provost Saundra Taylor Vice President for Student Affairs Joel D.Valdez Senior Vice President for Business Affairs Ronald E. Smith Controller Michael A. Cusanovich Vice President for Research and Graduate Studies Table of Contents Introductory Letter Statement of Current Operating Funds Revenues, Expenditures Enrollment Highlights and Other Changes Financial Highlights Notes to Financial Statements Current Operating Funds Revenues Independent Auditor's Report Current Operating Funds Expenditures Supplemental Schedule of Bonds and Capitalized Leases Market Value for Endowments and Other Long-term Liabilities Current Operating Funds: Gifts, Grants & Contracts Supplemental Schedule of Federal Financial Assistance Balance Sheet Notes to Schedule of Statement of Changes Federal Financial Assistance in Fund Balances Equal Employment Opportunity Affirmative Action Employer 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 2/19 As higher education faces increased competition for dwindling resources, The University of Arizona has continued to excel in providing a quality education to its students, expanding research efforts and providing public service activities throughout the state. Faced with the threat of reduced state appropriations as a percentage of total revenue, the University continues to emphasize ways to improve efficiency and effectiveness of programs throughout the institution. This effort is exemplified by the commitment of resources to support formal business process reengineering efforts and significant investments in campus technology. The annual financial report of The University of Arizona is published for use by all interested persons and submitted as a public accounting of the University's financial operations for the fiscal year ended June 30, 1996. The financial information presented in this report is designed to enable the reader to understand how the University managed its resources to meet the overall mission of the institution. The financial statements and additional related highlights provide the evidence of the institution's continued growth and stability as we prepare to meet the challenges during the coming year. Comments and questions relating to the information provided are always welcomed. Joel Valdez Senior Vice President for Business Affairs Ronald E. Smith Controller Enrollment Highlights Academic Enrollment (Headcount) Undergraduate Graduate Total Fall 1995 Total Fall 1994 Agriculture 1,991 510 2,501 2,364 Architecture 444 38 482 498 Arts & Sciences - General 4,841 4,841 5,057 Business & Public Administration 4,637 475 5,112 5,088 Education 723 998 1,721 1,684 Engineering & Mines 2,536 808 3,344 3,544 Fine Arts 1,878 314 2,192 2,230 Health-Related Professions 122 122 202 Humanities 1,035 415 1,450 1,487 Interdisciplinary Programs 461 461 486 Law 491 491 484 Medicine 556 556 491 Nursing 257 163 420 427 Optical Sciences 138 138 140 Pharmacy 298 298 285 Science 2,811 843 3,654 3,698 Social & Behavioral Sciences 4,412 988 5,400 5,469 Correspondence/Non-Degree 466 1,128 1,594 1,672 Total Enrollment 26,153 8,624 34,777 35,306 Other Enrollment Statistics Fiscal Year: 1995-96 1994-95 1 990-91 Enrollment - undergraduate (fall) 26,153 26,468 27,522 Enrollment - graduate (fall) 8,624 8,838 8,213 Degrees awarded-bachelor 4,612 4,807 4,118 Degrees awarded-advanced 2,086 2,045 1,818 Tuition per full-time student: Resident 1,884 1,828 1,478 Nonresident 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 3/19 7,912 7,434 6,484 Faculty and Staff Instructional Faculty 1,592 1,588 1,652 Staff, Administrators, Professional 10,935 10,445 11,159 Admissions - Fall 1995 In-State Out-of-State Total Freshmen Transfers Undergraduate Applications 9,273 12,802 22,075 16,307 5,768 Admissions 8,041 9,510 17,551 13,635 3,916 Matriculations 4,462 2,316 6,778 4,557 2,221 Graduate (not including Law, Medicine, and Pharmacy) Applications 1,855 7,159 9,014 Admissions 1,549 2,332 3,881 Matriculations 1,303 1,144 2,447 Financial Highlights Funding Sources 1996 1995 1991 State Appropriations $ 282,488 $ 267,411 $ 243,420 Tuition & Fees 134,053 129,481 105,344 Federal Grants & Contracts 218,344 233,086 156,248 State and Local Grants & Contracts 12,270 12,261 5,670 Private Gifts, Grants & Contracts 66,742 66,425 71,052 Auxiliary Enterprise Operations 80,146 75,049 62,440 Investment Income & Net Realized Gains 15,586 15,740 15,702 Additions to Plant Facilities 87,630 73,507 99,169 Retirement of Indebtedness 12,022 10,619 6,718 Other Sources 43,299 26,540 15,324 Total Funding Sources $ 952,580 $ 910,119 $ 781,087 Funding Uses Instruction $ 204,419 $ 197,640 $ 177,661 Research 193,650 207,921 149,293 Public Service 30,407 27,736 22,478 Academic Support 57,332 53,878 53,590 Student Services 12,884 12,701 15,656 Institutional Support 49,125 45,856 38,383 Operation & Maintenance of Plant 37,037 35,877 30,954 Scholarships & Fellowships 54,994 52,448 40,573 Auxiliary Enterprise Operations 82,173 76,035 61,366 Indirect Costs Recovered 41,096 40,157 33,764 Facility Additions & Disposals 90,620 56,161 98,131 Debt Servicing 31,734 30,505 6,718 Other Uses 1,472 1,114 18,403 Total Funding Uses $ 886,943 $ 838,029 $ 746,970 Funding Sources Over Funding Uses 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 4/19 $ 65,637 $ 72,090 $ 34,117 Endowment (investments at market value; land at book value) $ 92,057 $ 81,405 $ 63,666 Balance Sheet (in thousands of dollars) June 30, 1996, with comparative totals at June 30, 1995 Current Operating Funds Nonoperating Funds Total All Funds Unrestricted General Operating Funds Designated Funds Auxiliary Enterprises Funds Restricted Funds Total Current Operating Funds Student Loan Funds Endowment and Similar Funds Agency Funds Plant Funds Memorandum Only Assets 1996 1995 Cash and investments (See VI) $14,424 $47,681 $21,167 $13,837 $97,109 $1,443 $68,657 $10,375 $32,413 $209,997 $217,991 Donated land 209 209 2,299 242 2,750 2,778 Notes, accounts receivable and unbilled charges, less allowance: 1996--$1,880; 1995--$2,252 242 6,910 4,583 25,560 37,295 14,168 986 454 8,374 61,277 57,957 Inventories and supplies 39 267 7,490 7,796 155 7,951 8,468 Due from other funds 58 58 64 122 721 Physical properties (See VII) 1,248,451 1,248,451 1,196,483 Total Assets $14,705 $54,916 $33,240 $39,606 $142,467 $15,611 $71,942 $10,984 $1,289,544 $1,530,548 $1,484,398 Liabilities and Fund Balances Liabilities: Accounts payable $1,643 $1,781 $2,570 $3,694 $9,688 $6 $140 $7,727 $17,561 $17,908 Accrued payroll 8,174 2,083 1,694 5,819 17,770 6 17,776 16,881 Deferred revenue and deposits 2,866 2,444 4,637 18 9,965 4 88,670 98,639 104,312 Funds held for others 10,844 10,844 13,596 Due to other funds 122 122 122 721 Capitalized lease obligations and other long-term liabilities (See IX) 66,555 66,555 68,075 Bonds payable (See VIII) 249,910 249,910 259,401 Total Liabilities 12,683 6,308 9,023 9,531 37,545 16 10,984 412,862 461,407 480,894 Fund Balances (See V) 2,022 48,608 24,217 30,075 104,922 15,595 71,942 876,682 1,069,141 1,003,504 Total Liabilities and Fund Balances $14,705 $54,916 $33,240 $39,606 $142,467 $15,611 $71,942 $10,984 $1,289,544 $1,530,548 $1,484,398 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 5/19 Fund Balances consist of: Restricted: Amount obligated for outstanding purchase orders $14,871 $14,871 $12 $14,883 $18,173 U.S. Government grants refundable 12,205 12,205 11,907 Endowment $38,116 38,116 35,742 Quasi-endowment 20,522 20,522 20,845 General 15,204 15,204 3,378 $14,056 32,638 27,362 Designated: Amount obligated for outstanding purchase orders $2,949 $3,036 5,985 11,405 17,390 14,161 Summer sessions 4,703 4,703 4,703 4,482 Quasi-endowment 13,304 13,304 11,896 General $2,022 40,956 21,181 64,159 64,159 54,746 Net Investment in Plant 851,221 851,221 804,190 Total Fund Balances $2,022 $48,608 $24,217 $30,075 $104,922 $15,595 $71,942 $876,682 $1,069,141 $1,003,504 See notes (I-XI) to Financial Statements Statement of Changes in Fund Balances (in thousands of dollars) Current Operating Funds Nonoperating Funds Total All Funds Unrestricted Total Plant Funds General Auxiliary Current Student Endowment Unexpended Debt Investment Memorandum Only Operating Designated Enterprises Restricted Operating Loan and Similar Plant Service In Funds Funds Funds Funds Funds Funds Funds Funds Funds Plant 1996 1995 Revenues and Other Additions Unrestricted current revenues $363,001 $106,073 $94,549 $563,623 $ 563,623 $ 537,891 Tuition and fees $79 79 $ 490 569 574 Federal grants and contracts 181,232 181,232 $ 236 $ 788 182,256 197,886 State grants and contracts 9,703 9,703 9,703 9,870 Local grants and contracts 1,774 1,774 1,774 1,593 Private gifts, grants and contracts 46,923 46,923 38 1,055 6,020 $2,024 56,060 54,603 Federal appropriations 2,017 2,017 6,189 8,206 2,368 State appropriations 536 536 50 80 10,232 10,898 8,044 Investment income including net realized gains 2,828 2,828 78 896 37 $1,841 5,680 7,072 Interest on loans 331 331 342 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 6/19 loans receivable 331 331 342 Additions to plant facilities including amounts expended from current funds: 1996 - $38,433; 1995 - $34,576 87,630 87,630 73,507 Retirement of indebtedness 12,022 12,022 10,619 Other additions 8,922 5 4,901 13,828 5,750 Total revenues and other additions 363,001 106,073 94,549 245,092 808,715 733 2,521 32,188 1,846 106,577 952,580 910,119 Expenditures and Other Deductions Educational and general expenditures 363,464 67,807 208,577 639,848 639,848 634,057 Auxiliary enterprises expenditures 82,173 82,173 82,173 76,035 Indirect costs recovered 41,096 41,096 41,096 40,157 Cancellation of loans and provision for bad debt 28 28 341 Administrative and collection costs 186 186 220 Expended for plant facilities (including noncapitalized expenditures of $3,663 in 1996 and $3,712 in 1995) 51,921 51,921 41,422 Interest on indebtedness including $939 capitalized as construction in progress in 1996 and $1,221 in 1995 19,712 19,712 19,886 Disposal of plant facilities 38,699 38,699 14,739 Refunded to grantors or donors 1,144 1,144 4 1,148 449 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 7/19 donors Retirement of indebtedness 12,022 12,022 10,619 Other deductions 110 110 104 Total expenditures and other deductions 363,464 67,807 82,173 250,817 764,261 214 4 51,921 31,844 38,699 886,943 838,029 Transfers Among Funds Mandatory loan fund matching grants (12) (26) (38) 38 Mandatory principal and interest (375) (25,667) (7,482) (33,524) 45 33,479 Voluntary, net 505 (2,221) (4,023) 3,795 (1,944) (70) 942 21,467 452 (20,847) Total transfers 130 (27,900) (11,505) 3,769 (35,506) (32) 942 21,512 33,931 (20,847) Net increases (decreases) for the year (333) 10,366 871 (1,956) 8,948 487 3,459 1,779 3,933 47,031 65,637 72,090 Fund balances, beginning of year 2,355 38,242 23,346 32,031 95,974 15,108 68,483 10,343 9,406 804,190 1,003,504 931,414 Fund balances, end of year $2,022 $48,608 $24,217 $30,075 $104,922 $15,595 $71,942 $12,122 $ 13,339 $851,221 $1,069,141 $1,003,504 See Notes (I-XI) to Financial Statements. Statement of Current Operating Funds Revenues, Expenditures and Other Changes (in thousands of dollars) Year Ended June 30, 1996, with comparative totals for 1995 Unrestricted Funds Total Current Operating Funds Memorandum Only General Operating Funds Designated Funds Auxiliary Enterprises Funds Total Unrestricted Funds Restricted Funds 1996 1995 Revenues State appropriations $ 271,590 $ 271,590 $ 730 $ 272,320 $ 261,051 Tuition and fees 86,444 $ 36,411 $ 10,629 133,484 368 133,852 129,197 Federal grants and contracts 36,070 18 36,088 145,567 181,655 197,582 State grants and contracts 608 1 609 8,012 8,621 8,399 Local grants and contracts 80 104 184 1,728 1,912 1,546 Private gifts, grants and contracts 7,786 2,896 10,682 43,308 53,990 52,438 Federal appropriations 3,336 5 3,341 2,208 5,549 5,636 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 8/19 Investment and endowment income 1,593 7,942 40 9,575 2,737 12,312 11,481 Sales and services of educational departments 1 14,177 14,178 14,178 11,970 Sales and services of auxiliary enterprises 80,146 80,146 80,146 75,049 Other 37 2,994 715 3,746 3,945 7,691 6,708 Total current revenues 363,001 106,073 94,549 563,623 208,603 772,226 761,057 Expenditures and Mandatory Transfers Educational and general: Instruction 156,309 32,336 188,645 15,774 204,419 197,640 Research 42,910 9,288 52,198 141,452 193,650 207,921 Public service 11,332 917 12,249 18,158 30,407 27,736 Academic support 52,862 3,026 55,888 1,444 57,332 53,878 Student services 10,779 1,385 12,164 720 12,884 12,701 Institutional support 32,541 15,828 48,369 756 49,125 45,856 Operation and maintenance of plant 34,843 2,194 37,037 37,0 37 35,877 Scholarships and fellowships 21,888 2,833 24,721 30,273 54,994 52,448 Educational and general expenditures 363,464 67,807 431,271 208,577 639,848 634,057 Mandatory transfers: Loan fund matching grants 12 12 26 38 10 Principal and interest 375 25,667 26,042 26,042 18,257 Total educational and general 363,839 93,486 457,325 208,603 665,928 652,324 Auxiliary enterprises: Expenditures 82,173 82,173 82,173 76,035 Mandatory transfers for principal and interest 7,482 7,482 7,482 7,213 Total auxiliary enterprises 89,655 89,655 89,655 83,248 Total expenditures and mandatory transfers 363,839 93,486 89,655 546,980 208,603 755,583 735,572 Other transfers and additions (deductions): Restricted receipts over transfers to revenue (4,607) (4,607) 1,741 Voluntary transfers, net 505 (2,221) (4,023) (5,739) 3,795 (1,944) (12,841) Refunded to grantors (1,144) (1,144) (449) Net increases (decreases) in fund balances $ (333) $ 10,366 $ 871 $ 10,904 $ (1,956) $ 8,948 $ 13,936 See notes (I-XI) to Financial Statements Notes to Financial Statements 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 9/19 June 30, 1996 I. FUND ACCOUNTING To recognize any limitations and restrictions placed on the use of the resources available to the University, the accounts are maintained according to the principles of fund accounting. Therefore, the resources are classified for accounting and reporting purposes into funds according to the activities or objectives specified. Separate accounts are maintained in each fund. However, in the accompanying financial statements, individual funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been reported by fund group. For each fund group, fund balances restricted by outside sources are identified and separated from fund balances allocated to specific purposes by action of the Arizona Board of Regents or the Administration. Externally restricted funds may be used only for the purposes established by the source of such funds. In contrast, designated funds are controlled by the Administration of the University in achieving its institutional purposes. Changes in the use of resources require an accounting transfer of the resources to the fund with the activity or objective to be accomplished. Mandatory transfers are those required to meet legally binding agreements such as bond indentures. Other transfers result from decisions by the Arizona Board of Regents or the Administration as to permitted use of funds. II. FUND DESCRIPTIONS The current operating funds and their functions are as follows: The General Operating Funds account for activities of State appropriations and Federal agriculture appropriations. The Designated Funds account for the recovery of indirect costs from sponsored research and academic year tuition and fees retained by the University. Summer session and extension teaching programs, unrestricted gifts and income from short-term and long-term investments are also included in these funds. The purposes of these funds are determined by the Arizona Board of Regents and University Administration. The Auxiliary Enterprises Funds account for the revenues and expenditures of revenue-producing, substantially self-supporting activities that perform a service to the student body, faculty and public but are not themselves educational activities. Auxiliary enterprises activities include student housing, bookstores, student unions, stores, intercollegiate athletics and others. The Restricted Funds account for governmental and private gifts, grants and contracts. The purposes are restricted by the donor or supporting agency. Funds not used for the restricted purpose may revert to the sponsor or donor. Revenues of the Restricted Funds are reported only to the extent of expenditures and mandatory transfers in the Statement of Current Operating Funds Revenues, Expenditures and Other Changes. The non-operating funds and their functions are as follows: The Student Loan Funds account for loans made to assist students in the financing of their education. The Endowment and Similar Funds account for private gifts and other funds that require the principal be permanently invested and only the income be utilized for general or specific requirements. Quasi-endowment funds have been established by the Arizona Board of Regents or the Administration for the same purpose as endowment funds, except that principal and income may be expended for general or specific requirements. The Agency Funds account for deposits held in custody for others. These include funds held for the University Physicians, Inc., Arizona State University and Northern Arizona University student financial aid trust funds, Boyce Thompson Arboretum and others. The Plant Funds account for activities relating to institutional properties. These include the total investment and debt incurred in the financing of University properties. III. BASIS FOR REPORTING The accompanying financial statements present all funds under the authority of the University. The basic criterion for inclusion is the exercise of financial accountability. Financial accountability for the University remains with the State of Arizona; therefore the University is considered part of the reporting entity for the state's financial reporting purposes. The financial statements do not include financially interrelated organizations described in Note IV. The financial statements are prepared on the accrual basis of accounting. The Statement of Current Operating Funds Revenues, Expenditures and Other Changes is a statement of financial activities for current operating funds during the current reporting period. It is not intended to present the results of operations or the net income or loss for the period as would a statement of income. The accounting policies followed by the University conform to generally accepted accounting principles as applied to governmental colleges and universities in the AICPA College Guide Model as defined in Governmental Accounting Standards Board Statement No. 15. The methods of applying those policies which materially affect the determination of financial position, current operating funds revenues, expenditures and other changes and the current changes in fund balances are summarized below: Investments and donated land are stated at cost or fair market value at the date of acquisition, as appropriate. Inventories and supplies are stated at the lower of cost (determined by the first-in, first-out method) or market. Physical properties are stated at cost or fair market value at date of acquisition, as appropriate. Special collections are carried at a nominal value of $1 per collection. 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 10/19 Capital expenditures reported as current operating expenditures also appear as additions to the Plant Funds. As permitted by generally accepted accounting principles, the University does not provide for depreciation of physical properties. Tuition and fees revenue (net of refunds) includes $22,203,000 of waivers charged to Scholarships and Fellowships and $2,939,000 of waivers for faculty and staff benefits charged to the appropriate expenditure programs to which the applicable personnel relate. Summer session revenue and expenditures are reported within the fiscal year in which the summer session's program is predominantly conducted. Revenue and accounts receivable include amounts received and expended by the University under Federal and State funded research, student aid and other programs. Both the direct and indirect costs of these programs are subject to audit by cognizant governmental agencies or their appointees. The University expects that adjustments or repayments, if any, resulting from such audits would not have a significant effect on the financial statements. Transfer of construction debt from Unexpended Plant Funds to Investment In Plant is accomplished as the construction proceeds are expended. The Statement of Changes in Fund Balances includes $20,847,000 of voluntary transfers all of which are associated with construction and debt. There is no net effect to the Plant Fund group as a whole. The financial information shown for fiscal year 1994-1995 in the accompanying financial statements is included as a basis for comparison with fiscal year 1995-1996 and represents summarized totals only. Certain prior year items in the accompanying financial statements have been reclassified, without effect on total fund balances, revenues or expenditures, to conform with the current year's classifications. IV. RELATED ORGANIZATIONS The financial statements of The University of Arizona do not include the operations of the University of Arizona Foundation, Inc., the University Physicians, Inc., the Arizona Research Park Authority and the Campus Research Corporation (renamed from the Rita Road Campus Corporation in January 1996). The University Foundation, Inc. is a nonprofit corporation controlled by a separate Board of Directors. The principal goals of the Foundation are to support The University of Arizona through various fund-raising activities, and to contribute funds to the University for support of various programs. According to the audited financial statements of the Foundation for the year ended June 30, 1995, assets, liabilities, revenues and expenditures totaled $122 million, $76 million, $25 million, and $24 million, respectively. The University Physicians, Inc. (UPI) is a nonprofit corporation established to provide medical services and to support The University of Arizona in its teaching and research missions. UPI is controlled by a Board of Directors, comprised of the Dean, all clinical department heads, twelve other faculty physicians, and four community members. The primary purpose of UPI is to assist the University's College of Medicine in achieving the fulfillment of its teaching and research. According to the audited financial statements of UPI for the year ended June 30, 1995, assets, liabilities, revenues and expenditures totaled $74 million, $25 million, $97 million, and $85 million, respectively. The Arizona Research Park Authority (ARPA) is a nonprofit corporation created with the permission of the Arizona Board of Regents (ABOR) and designated by Arizona law as a political subdivision of the State, governed by a separate board of directors which by law may not include officers or employees of ABOR. ARPA was established under the State's industrial development authority statute to assist in the acquisition, improvement, and operation of university research parks and related properties. In August 1994, ARPA, with the approval of ABOR, sold $98 million nontransferable special revenue bonds to International Business Machines Corporation (IBM) to enable the University to acquire from IBM a 345-acre developed industrial site (the "Research Park") near Tucson, Arizona, together with 1,000 acres of adjacent unimproved land (collectively, the University of Arizona Science and Technology Park or the "Park"). The transaction was accomplished through the following steps: (1) the University agreed to pay $98 million to IBM for title to the entire Park; (2) ARPA and Campus Research Corporation jointly agreed to lease the developed portion of the Park from the University for a period of 30 years with a prepaid rental of $98 million; (3) ARPA subleased 79% of the building space in the developed portion of the Park to IBM for periods of up to 30 years for a rental sufficient to pay debt service on ARPA's bonds; and (4) ARPA used the $98 million received from its bond sale to make the rental prepayment to the University which, in turn, applied the money to purchase the entire Park from IBM. The bonds are payable solely from lease rentals paid by IBM. If IBM defaults or cancels its lease, the bonds must be surrendered and discharged. Title to the entire Park resides in the University and neither the Park nor any payments by the University secures ARPA's bonds. Audited financial statements for the year ended June 30, 1995, reflecting assets, liabilities, revenues and expenditures are not available. The Campus Research Corporation (CRC) is a nonprofit corporation governed by a separate Board of Directors and was established to assist the University in the acquisition, improvement and operation of the Research Park and related properties. CRC leases from the University the remaining 21% of the building space of the Research Park that is not leased to ARPA (see preceding paragraph). CRC is responsible for developing presently undeveloped portions of the research park and for subleasing to the University or to third parties existing unoccupied space, newly developed space, and space now occupied by IBM or its subtenants once the current subleases expire. The University is responsible only for payment of its proportional share of operation expenses. All income received by CRC from its activities, after payment of expenses and financial reserves, will be turned over to the University. Audited financial statements for the year ended June 30, 1995, reflecting assets, liabilities, revenues and expenditures are not available. V. COMPENSATED ABSENCES The University has not made accruals for vacation pay and other compensated absences. If the accruals were made, General Operating Fund, Designated Fund, Auxiliary Enterprises Fund and Restricted Fund liabilities would be increased by approximately $14,003,000, $1,918,000, $2,419,000, and $4,630,000, respectively. The University management believes that this omission does not have a significant effect on the accompanying financial statements as a whole based on materiality and considering that the General Operating Fund Liability would be funded by the subsequent year's appropriations from the State Legislature. VI. CASH AND INVESTMENTS The University follows Arizona Board of Regents policies which require that deposits be made only to accounts authorized by the Board and at depository banks that 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 11/19 have been approved. Pooled operating investments are restricted to the purchase of collateralized time certificates of deposit and repurchase agreements with commercial banks, and United States obligations such as Treasury bills, notes, bonds and obligations of agencies sponsored by the United States Government. Gifts and grants received as endowments or for restricted purposes are invested according to conditions stipulated by the donor or grantor; however, if no conditions are imposed, such funds are usually invested in one of two Consolidated Endowment Pools. The Consolidated Endowment Pools function as highly-diversified investment funds under the control of the University Investment Committee whose responsibility is to define, develop, and implement investment objectives, policies and restrictions relating to the Endowment funds held by the University. The primary investment objective of one pool is maximum long-term total return from income and capital appreciation under a policy of maximum investment productivity at an acceptable level of risk and volatility. The primary investment objective of the other pool is to maximize the current income earned. The Separately Held Endowment funds are separately invested according to the terms of the donor's gift or the administrator. Cash and securities on deposit with trustees are held in trust for the University by various commercial banks. Trust funds are invested by the trustee in accordance with the Board's authorizing resolutions. At year-end, the University's bank balance is $2,194,000. Of this balance, $153,000 is covered by federal depository insurance. The remaining balance is collateralized by U.S. Government obligations held by the bank's trust department in the University's name. Securities are collateralized as follows: 1. Certificates of deposit are covered by FDIC or SIPC insurance. 2. Repurchase agreements are col-lateralized with securities held by the University's custodial banks in the University's name. 3. Common stocks, preferred stocks and corporate bonds are registered in the name of and held by the University or are held by the University's custodial bank in the name of the University in a book entry system. These securities were either purchased from a broker/dealer or a financial institution by the University. 4. U.S. Treasury and Agency Government obligations: a. $63,523,000 are registered in the name of and held by the University or are held by the University's custodial bank in the name of the University in a book entry system. These securities were either purchased from a broker/dealer or a financial institution by the University. b. $34,644,000 are held by major financial institutions in the name of the University. The financial institutions act as both custodial and purchasing agent for these investment transactions. c. $5,746,000 are held by trustees. Bond funds held by trustees include money market funds invested in U.S. Government obligations, U.S. Government obligations, and obligations of agencies sponsored by the Federal Government held in the trustee's Federal Reserve Bank account. These securities are recorded in the University's name in the records of the trustee. The trustee acts as both custodial and purchasing agent for these investment transactions. 5. Endowment funds held by trustees include deposits, mutual funds, common stocks, corporate bonds, U.S. Government obligations, obligations of agencies sponsored by the Federal Government and mortgage backed notes receivable. These deposits and securities are held by the trustees as irrevocable trusts in the names of the individual donors for the benefit of the University according to the donors' stipulations. 6. At June 30, 1996, the University held investment contracts with both a major insurance company and a bank amounting to $1,503,000 of proceeds from the 1994A Certificates of Participation and $1,187,000 of proceeds from the 1994B Certificates of Participation, respectively. a.The Guaranteed Investment Contract (GIC) with the insurance company is uncollateralized. The insurance company is rated Aa3/AA+ and there is a provision in the contract requiring collateralization of the investment with U.S. Government obligations if the company's rating falls below A2 by Moody's or below A by Standard & Poors, or the University may terminate the contract. b.The Bank Investment Contract (BIC) is also uncollateralized. The bank is rated Aaa/AAA and there is a provision in the contract whereby if the bank's rating falls below Aa but is at least A by Moody's and below AA but is at least A by Standard & Poors, then the bank must collateralize the investment with U.S. Government obligations. If the rating falls below A/A, then the University has the option to terminate the contract. Deposits and Investments, at June 30, 1996, consist of the following: Deposits: Total Cost Total Market Cash on Deposit with State Treasurer $ 3,058,000 $ 3,058,000 Cash -5,557,000 -5,557,000 Securities: Certificates of deposit 160,000 160,000 Repurchase Agreements 47,470,000 47,470,000 Common Stocks 20,656,000 37,787,000 Preferred Stocks 634,000 651,000 Corporate Bonds 28,385,000 27,820,000 U.S. Treasury and Agency Govt. obligations 103,913,000 103,563,000 Endowments held by trustees 8,588,000 13,035,000 Investment contracts (GIC & BIC) 2,690,000 2,690,000 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 12/19 Totals $ 209,997,000 $ 230,677,000 The cash overdraft results from an aggressive short-term investment policy in which the University invests its funds until outstanding check are cashed. Deposits and Investments, at June 30, 1996, by management areas are as follows: Total Cost Total Market Current Operating Funds: Cash on Deposit with State Treasurer $ 3,058,000 $ 3,058,000 Cash and short-term investments 45,289,000 45,175,000 Long-term investments 48,762,000 48,182,000 Endowment Funds: Consolidated Pools: Cash and short-term investments 1,884,000 1,880,000 Long-term investments 47,157,000 61,653,000 Separately held: Cash and short-term investments 2,351,000 2,351,000 Long-term investments 8,677,000 9,853,000 Funds held by trustees 8,588,000 13,035,000 Plant Funds: Cash and short-term investments 11,533,000 11,533,000 Funds held by trustees 20,880,000 20,908,000 Other Nonoperating Funds: Cash and short-term investments 5,789,000 5,803,000 Long-term investments 6,029,000 7,246,000 Totals $ 209,997,000 $ 230,677,000 VII. PHYSICAL PROPERTIES Physical Properties at June 30, 1996, consist of the following: Buildings and Improvements $ 683,535,000 Land 70,177,000 Equipment 327,392,000 Library Materials 111,822,000 Construction in Progress 55,525,000 Total Physical Properties $ 1,248,451,000 In addition to expenditures through June 30, 1996 it is estimated that $57,008,000 will be required to complete projects under or planned for construction. Of this amount $21,943,000 is contractually encumbered. On April 1, 1996, the University changed its equipment capitalization criteria from $500 or more in valuation and two years or more life expectancy to $1,000 and one year, resulting in a one-time write off of $23,927,000 in assets. VIII. BONDS PAYABLE Bonds Payable at June 30, 1996, consist of the following: Interest Year of Maturity Original Issue Currently Outstanding Student Housing Revenue Bonds 3.0-3.75% 2002-2008 $ 8,500,000 $ 2,935,000 1988 - System Revenue Bonds 6.3-7.0% 1999 31,950,000 2,390,000 1990A - System Revenue Bonds 6.5-9.0% 2003 46,300,000 9,580,000 1990B - System Revenue Bonds 6.9-9.4% 2003 39,630,000 7,485,000 1991 - System Revenue Bonds 6.0-8.5% 2010 9,665,000 4,575,000 1992 - System Revenue Bonds 3.1-6.625% 2011 113,150,000 110,835,000 1992A - System Revenue Bonds 2.9-6.2% 2016 55,490,000 53,185,000 1993 - System Revenue Bonds 2.7-5.0% 2017 42,085,000 31,310,000 1994 - System Revenue Bonds 4.8-6.35% 2014 28,500,000 27,615,000 $ 375,270,000 $ 249,910,000 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 13/19 Principal and interest on bonds outstanding at June 30, 1996, are collateralized by registration fees, tuition, rentals and other charges and such obligations are generally callable by the University. The principal amounts due over the next five years are as follows: 1997 $ 9,360,000 1998 9,830,000 1999 10,335,000 2000 10,865,000 2001 11,515,000 Cash and securities on deposit with trustees, restricted for retirement of bonded indebtedness and renewals and replacements, are $507,000 and $645,000 respectively, at June 30, 1996, as required by the bond indentures. In addition, $10,645,000 was held by trustees for payment of future construction costs. In fiscal years 1977, 1990, 1992 and 1993 the University refunded in advance of maturity certain outstanding revenue bonds. At June 30, 1996, the outstanding principal balance of the refunded bonds is $112,185,000 which will be paid by investments held in trust with a carrying value of $84,944,000. These amounts are not included in the accompanying financial statements. IX. LEASES AND OTHER LONG-TERM LIABILITIES The University has entered into certain operating leases (generally, the leases include options for annual renewal) and other rental agreements for real property, equipment and films generally for periods not in excess of one year. During the 1995-1996 fiscal year, rent expenditures amounted to $9,303,000. The University also acquired a building, certain computer, telecom-munications and farm equipment, and agricultural land under various capital leases and certificates of participation (COPs). At June 30, 1996, the balance sheet includes $39,979,000 representing the cost of assets included in land, buildings, and equipment. Cash and securities on deposit with the trustee, restricted for retirement of certificates of participation, are $8,016,000 at June 30, 1996. In addition, $1,067,000 is held by trustee for payment of future construction costs. In 1991 the University refunded in advance of maturity certain outstanding certificates of participation. At June 30, 1996, the outstanding principal balance of the refunded certificates was $16,355,000 which will be paid by investments held in trust with a carrying value of $17,237,000. These amounts are not included in the accompanying financial statements. Summary of Future Lease Payments at June 30: Capitalized Operating Leases & COPs Leases 1997 $ 7,376,000 $ 656,000 1998 7,140,000 546,000 1999 7,611,000 235,000 2000 5,945,000 153,000 2001 5,902,000 103,000 Thereafter 76,304,000 206,000 Total minimum lease payments 110,278,000 $ 1,899,000 Less: Amount representing interest ( 43,723,000) Present value of net minimum lease payments$ 66,555,000 X. PENSION PLANS Full-time, permanent employees of the University are, in general, required to be members of an authorized retirement program. The program, consisting of several plans described below, is funded through payroll deductions from covered employees' gross earnings and amounts contributed by the University. In general, employees' rights vest after five years of service under all plans. University contributions for, and interest forfeited by, employees who leave employment before five years of service are used to reduce the University's future-period contribution requirements. Retirement payments are obligations of the respective retirement funds and not of the University. Eligible Faculty, Academic Professionals and Administrators at the University may select from the following retirement plans: Arizona State Retirement System, TIAA/CREF Retirement Plan, VALIC Retirement Plan, Fidelity Investments Retirement Plan and Aetna Variable Annuity Retirement Plan. The former is a defined benefit plan and the latter four are defined contribution plans. Eligible classified staff belong to the Arizona State Retirement System. A. Defined Benefit Plan - Arizona State Retirement System The Arizona State Retirement System is a cost-sharing multiple-employer defined benefit pension plan. The payroll for employees covered by the System for the year ended June 30, 1995 was approximately $4,228,265,000. The University's total payroll for the year ended June 30, 1996 was $416,554,000; the base salary amount for those employees who participate in the Arizona State Retirement System was $189,838,000. Employees who retire at or after age 65 with any number of years of credited service, at or after age 62 with 10 or more years of credited service, or at 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 14/19 or after any combination of years of service and age that totals 80, are entitled to a monthly benefit of 2 percent of their average monthly earnings, as defined in the plan, for each year of credited service. Employees who are age 50 or older with at least five years of credited service may retire early and receive reduced retirement benefits. The plan also provides death benefits and limited retiree health benefits. Benefits are established by state statute. The Legislature established a new long-term disability program and removed the long-term disability benefit from the plan. Effective October 1, 1995, that liability for current beneficiaries was transferred to the new program. The actuarially determined contribution rate for both employees and employers for fiscal year 1995-96 was 3.95 percent of compensation ($7,499,000 each). This contribution rate would have covered the actuarially determined current service costs plus amortization of the unfunded past service liability over a rolling 30-year period, which is being phased in. The current amortization period is 11 years. However, during the year ended June 30, 1996, state statutes required that both employees and the University contribute an amount equal to only 3.36 percent of the employee's base salary. Both the University and the covered employees made the required 3.36 percent contribution, amounting to $6,379,000 from each source, totaling $12,758,000. The actuarial computation of the contribution rate is made two years in advance based on June 30 information and, therefore, the rate for fiscal year 1995-96 was based on June 30, 1994 information. The amount reported below as "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is the actuarial present value of credited projected benefits and is intended to help users assess the plan's funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among government pension plans and employers. The System does not make separate measurements of assets and the pension benefit obligation for individual employers. The pension benefit obligation at June 30, 1995, (the date of the last actuarial valuation) for the System as a whole, determined through an actuarial valuation performed as of that date, was $10,289,740,000. The System's net assets available for benefits on that date were $10,752,930,000 (market value $12,464,462,000), resulting in net assets in excess of the pension benefit obligation of $463,190,000. The University's contribution represented approximately 4.02 percent of total contributions required of all participating employers. Historical trend information for all years available presenting the System's progress in accumulating sufficient assets to pay benefits when due is presented in the Arizona State Retirement System 41st Component Unit Financial Report for the Year Ended June 30, 1995. B. Defined Contribution Plans The University offers pension benefits for its eligible Faculty, Academic Professionals and Administrators through its defined contribution plans - TIAA/CREF, VALIC, Fidelity Investments and Aetna Variable Annuity. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. State statute requires that both the employee and the University contribute an amount equal to 7 percent of the employee's base salary. The University's total payroll in fiscal year 1995-96 was $416,554,000. The University's contributions were calculated using the base salary amount of $148,531,000 for those employees who selected a defined contribution plan. Both the University and the covered employees made the required 7 percent contribution. For the defined contribution plans each source contributed $10,397,000 for a total of $20,794,000. XI. SELF-INSURANCE PROGRAM The University of Arizona is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The University of Arizona participates in a self-insurance program administered by the State of Arizona, Department of Risk Management. Arizona statutes provide that any judgment assessed against the University not covered by insurance would be paid by the State from the self-insurance program or by a future appropriation from the State Legislature. State of Arizona Office of the AUDITOR GENERAL Independent Auditors' Report Members of the Arizona State Legislature The Arizona Board of Regents We have audited the accompanying balance sheet of The University of Arizona as of June 30, 1996, and the related statements of changes in fund balances and current operating funds revenues, expenditures and other changes for the year then ended. These financial statements are the responsibility of the University's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The University of Arizona as of June 30, 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 15/19 1996, and the changes in its fund balances and its current operating funds revenues, expenditures and other changes for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the financial statements of The University of Arizona taken as a whole. The accompanying supplemental schedule of bonds and capitalized leases and other long-term liabilities as of June 30, 1996, and the supplemental schedule of federal financial assistance for the year then ended are presented for purposes of additional analysis and are not a required part of the financial statements. The information in the schedules has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. In accordance with Government Auditing Standards, we will also issue reports on our consideration of the University's internal control structure and on its compliance with laws and regulations at a future date. Douglas R. Norton Auditor General September 13, 1996 Supplemental Schedule of Bonds & Capitalized Leases & Other Long-term Liabilities (in thousands of dollars) June 30, 1996 Bonds Payable and Leases Debt Service Commitments by Fiscal Year Issue Interest Rates Year of Maturity Original Issue Currently Outstanding at June 30, 1996 1997 1998 1999 2000 2001 Thereafter Student Housing: 1962 - Sonora 3.375% 2002 $ 1,500 $ 366 $ 72 $ 70 $ 68 $ 66 $ 69 $ 63 1963 - Arizona 3.0 - 3.5% 2003 1,500 368 68 71 69 67 70 70 1965 - Coronado 3.0% 2005 3,000 1,016 134 131 132 134 136 486 1967 - Married Student Housing 3.75% 2008 2,500 1,185 123 125 122 123 125 852 System Revenue Bonds: 1988 - System Revenue Bonds 6.3 - 7.0% 1999 31,950 2,390 1,199 1,199 268 1990A - System Revenue Bonds 6.5 - 9.0% 2003 46,300 9,580 1,805 1,780 1,758 1,761 1,766 3,541 1990B - System Revenue Bonds 6.9 - 9.4% 2003 39,630 7,485 1,431 1,410 1,382 1,384 1,381 2,767 1991 - System Revenue Bonds 6.0 - 8.5% 2010 9,665 4,575 504 502 504 504 508 4,580 1992 - System Revenue Bonds 3.1 - 6.625% 2011 113,150 110,835 7,561 7,559 8,495 13,124 13,121 131,220 1992A - System Revenue Bonds 2.9 - 6.2% 2016 55,490 53,185 3,406 3,408 3,409 3,409 3,408 86,266 1993 - System Revenue Bonds 2.7 - 5.0% 2017 42,085 31,310 5,474 5,479 5,473 1,111 1,111 23,740 1994 - System Revenue Bonds 4.8 - 6.35% 2014 28,500 27,615 2,562 2,562 2,564 2,561 2,565 33,317 Total bonds payable $ 375,270 $ 249,910 $ 24,339 $ 24,296 $ 24,244 $ 24,244 $ 24,260 $ 286,902 Capitalized Leases and Other Long-term Liabilities: Telecommunication Certificates 4.6 - 6.5% 2012 25,995 21,200 2,649 2,646 2,645 1,847 1,848 21,966 Educational Certificates 3.2 - 6.4% 2007 4,670 4,020 477 475 472 472 472 3,274 Residence Life Certificates 4.1 - 5.8% 2014 16,725 16,725 1,468 1,468 1,470 1,469 1,471 19,090 Maingate Admin Certificates 4.25 - 6.0% 2024 16,170 16,170 1,177 1,175 1,178 1,180 1,180 27,156 Agriculture Demonstration Farm 9.0% 2003 2,282 1,258 250 250 250 250 250 500 University Foundation Building 4.75 - 7.75% 2007 4,950 3,780 484 485 484 482 483 3,330 Other Capitalized Leases 4.6 - 9.22% Various 4,107 3,402 871 641 1,112 245 198 988 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 16/19 Total capitalized leases and other long-term liabilities $ 74,899 $ 66,555 $ 7,376 $ 7,140 $ 7,611 $ 5,945 $ 5,902 $ 76,304 Refunded Issues: Bonds: 1968 - Student Union 5.25 - 5.5% 1998 3,000 350 1977 - Revenue Refunding 6.0% 2002 22,315 22,315 1988 - System Revenue Bonds 7.0 - 7.625% 2011 24,135 24,135 1990A - System Revenue Bonds 6.5 - 9.0% 2015 33,210 32,435 1990B - System Revenue Bonds 6.9 - 9.4% 2016 29,205 28,525 1991 - System Revenue Bonds 6.5 - 8.5% 2017 4,425 4,425 Total refunded bonds $ 116,290 $ 112,185 Certificates of Participation: 1988 Telecommunications Certificates 6.1 - 7.6% 2003 27,595 16,355 Total refunded issues $ 143,885 $ 128,540 95/96 Supplemental Schedule of Federal Financial Assistance (in thousands of dollars) Year Ended June 30, 1996 Federal Grantor/Pass-Through Grantor Funding Agency Expenditures Federal Student Financial Aid Programs: Department of Health & Human Services Other Financial Aid Programs $ 106 Subtotal Department of Health & Human Services 106 Department of Education Federal Pell Grant Program 10,372 Federal Work Study Program 839 Federal Perkins Loan Program 231 Federal SEOG Program 1,096 Other Financial Aid Programs 40 Subtotal Department of Education 12,578 Miscellaneous Federal Agencies Other Financial Aid Programs 759 Total Federal Student Financial Aid Programs $ 13,443 Federal Research & Training Programs: Agency for International Development $ 655 Department of Energy 3,889 Department of the Interior 8,580 Department of Agriculture Agriculture Extension Service 3,672 Agriculture Experiment Station 1,954 U.S. Department of Agriculture 4,027 U.S. Forestry Service 674 Other Programs 0 Subtotal Department of Agriculture 10,327 Department of Defense Air Force 7,348 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 17/19 Army 3,071 Navy 3,881 Subtotal Department of Defense 14,300 Department of Commerce 1,215 Department of Health & Human Services Agency for Health Care Policy and Research 1,248 Division of Medicine 397 U.S. Dept. of Health & Human Services 8,625 Health Resources and Services Administration 1,472 National Cancer Institute 12,279 National Center for Nursing Research 236 National Heart, Lung & Blood Institute 5,835 National Institute on Aging 1,030 National Institute of Allergy & Infectious Diseases 1,421 National Institute of Child Health/Human Development 1,018 National Institute on Drug Abuse 3,681 National Institute of Diabetes, Digestive & Kidney Diseases 1,462 National Institute of Environmental Health Sciences 4,968 National Institute of General Medical Sciences 3,008 National Institutes of Health 8,098 National Institutes of Mental Health 1,426 National Institute of Neurological Disorders 1,860 Other Programs 4,045 Subtotal Dept. of Health & Human Services 62,109 Department of Justice 242 Department of Transportation 165 National Aeronautics & Space Administration NASA AMES Research Center 313 Goddard Space Flight Center 19,880 NASA Headquarters 6,072 Other Programs 682 Subtotal NASA 26,947 National Science Foundation 19,186 Department of Education Research 1,588 Training 3,334 Subtotal Department of Education 4,922 Environmental Protection Agency 1,024 Nuclear Regulatory Commission 817 National Endowment for the Humanities 255 National Endowment for the Arts 97 Miscellaneous Federal Agencies Defense Advanced Research Projects Agency 290 Defense Logistics Agency 17 Smithsonian 1,130 Veterans Administration 3,984 Other Programs 603 Subtotal Miscellaneous Federal Agencies 6,024 Through State Government 2,249 Through Local Government 445 Through For-profits 2,243 Through Non-profits Amity 74 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 18/19 Jet Propulsion Laboratory 8,063 Other Programs 7,689 Subtotal Through Non-profits 15,826 Through Miscellaneous Private 122 Total Federal Research & Training Programs $ 181,639 Total Federal Financial Assistance $ 195,082 See Notes to Schedule of Federal Financial Assistance Notes to Schedule of Federal Financial Assistance June 30, 1996 A. BASIS OF PRESENTATION The purpose of the Schedule of Federal Financial Assistance is to summarize those expenditures of The University of Arizona for the year ended June 30, 1996, that have been financed by the U.S. government (federal awards). This schedule includes expenditures financed by all federal assistance and procurement relationships entered into directly between The University of Arizona and the federal government, and expenditures of subawards from nonfederal organizations made under federally sponsored agreements. For reporting purposes, federal awards have been classified into two types: federal student financial aid programs federal research & training programs The accounting principles followed by The University of Arizona in each of these areas and used in preparing the accompanying schedule are as follows: Federal Student Financial Aid Programs - Expenditures are recognized on the accrual basis for awards made to students and allowable administrative expenses incurred in connection with the student loan programs. The student financial aid programs are funded by the federal government under various programs. For loan programs only the federal portion of administrative costs are included in the Schedule. Other disbursements are discussed in Notes C and D. Federal Research & Training Programs - Expenditures for direct costs are recognized as incurred using the accrual method of accounting and the cost principles set forth in OMB Circular A-21, Cost Principles for Educational Institutions. Under those cost principles and requirements of the individual grant agreements, certain types of expenditures are not allowable or are limited as to reimbursement. Moreover, expenditures include a portion of costs associated with general university activities (indirect costs) that are allocated to federal awards under negotiated formulas commonly referred to as indirect cost rates. Indirect costs and related revenues applicable to these cost recoveries are classified as unrestricted expenditures and revenues on the financial statements. B. The University did not identify Catalog of Federal Domestic Assistance Numbers due to the large number of individual assistance programs. In addition, many of the assistance programs do not have Catalog of Federal Domestic Assistance Numbers as they are specific to the University. C. The University administers the following Department of Education loan program: CFDA Number Federal Perkins 84.038 For Department of Education program the following information is provided: Loans outstanding at 6/30/96 $11,964,000 New loans to students FY 95/96 1,834,000 Loans cancelled FY 95/96 74,000 The University administers the following Department of Health and Human Services (HHS) loan programs: CFDA Number Nursing (NSL 2 Programs) 93.364 Health Profession (HPSL 4 Programs) 93.342 For Health and Human Services loan programs the following information is provided: Loans outstanding at 6/30/96 $2,484,000 New loans to students FY 95/96 324,000 Loans cancelled (recovered) FY 95/96 (4,000) 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 19/19 D. Federal Family Education Loans are not considered grants to the University since the University is responsible only for determining student eligibility and distributing the loans directly to students. Consequently, such loans distributed by the University during the year ended June 30, 1996, are not included in the Schedule of Federal Financial Assistance. However, because the Federal Family Education Loans Program is a Title IV, Higher Education Act student financial assistance program (CFDA number 84.032) sponsored by the U.S. Department of Education, it is considered a federal financial assistance program for single audit purposes. During fiscal year 1995/96 the University distributed approximately $79 million of Federal Family Education Loans to students. E. Revenues equal to the expenditures reported on the Schedule of Federal Financial Assistance are included in the accompanying basic financial statements as follows (in thousands of dollars): Statement of Current Operating Funds Revenues, Expenditures and Other Changes: Federal grants and contracts $181,655 Federal appropriations 5,549 Statement of Changes in Fund Balances - Items not recognized as revenue: Federal portion of student loan funds: Financial Aid expenditures 231 Transfers for Admin charges 110 Federal portion of plant funds: Construction/renovations - current 6,977 FY 94/95 unexpended balance 860 Less: FY 95/96 unexpended balance (300) Total Federal Financial Assistance $195,082
Object Description
TITLE | Annual financial report / University of Arizona |
CREATOR | University of Arizona. |
SUBJECT | University of Arizona--Finance; University of Arizona--Funds and scholarships; Student loan funds--Arizona; |
Browse Topic |
Education Business and industry Government and politics |
DESCRIPTION | This title contains one or more publications. Annual. Report year end is June 30. University of Arizona Board of Regents. |
Language | English |
Publisher | University of Arizona. |
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Text |
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State Documents |
RIGHTS MANAGEMENT | Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution. |
ORIGINAL FORMAT | Born Digital |
Source Identifier | UA 1.3:F 45/ |
Location | o06637414 |
DIGITAL FORMAT | PDF (Portable Document Format) |
REPOSITORY | Arizona State Library, Archives and Public Records. |
Description
TITLE | Annual financial report for the year ended June 30, 1996 |
DESCRIPTION | 19 Pages (PDF version). File Size: 492 KB |
TYPE |
Text |
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State Documents |
RIGHTS MANAGEMENT | Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution. |
DATE ORIGINAL | 1996-06-30 |
Time Period |
1990s (1990-1999) |
ORIGINAL FORMAT | Born Digital |
Source Identifier | UA 1.3:F 45/1995/1996 |
Location | o06637414 |
DIGITAL IDENTIFIER | FAR_1996.pdf |
DIGITAL FORMAT | PDF (Portable Document Format) |
REPOSITORY | Arizona State Library, Archives and Public Records. |
File Size | 503812 Bytes |
Full Text | 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 1/19 Annual Financial Report For the Year Ended June 30, 1996 Arizona Board of Regents EX-OFFICIO The Honorable J. Fife Symington Governor of Arizona The Honorable Lisa Graham Keegan Superintendent of Public Instruction APPOINTED George H. Amos III Tucson Judy Gignac Sierra Vista Eddie Basha Chandler John F. Munger Tucson Rudy Campbell Tempe Don Ulrich Paradise Valley Arthur Chapa Tucson John Schmitt Student Regent Kurt Davis Cave Creek The University of Arizona Administration Manuel T. Pacheco President Celestino Fernandez Executive Vice President and Provost of Arizona International Campus Paul Sypherd Senior Vice President for Academic Affairs & Provost Saundra Taylor Vice President for Student Affairs Joel D.Valdez Senior Vice President for Business Affairs Ronald E. Smith Controller Michael A. Cusanovich Vice President for Research and Graduate Studies Table of Contents Introductory Letter Statement of Current Operating Funds Revenues, Expenditures Enrollment Highlights and Other Changes Financial Highlights Notes to Financial Statements Current Operating Funds Revenues Independent Auditor's Report Current Operating Funds Expenditures Supplemental Schedule of Bonds and Capitalized Leases Market Value for Endowments and Other Long-term Liabilities Current Operating Funds: Gifts, Grants & Contracts Supplemental Schedule of Federal Financial Assistance Balance Sheet Notes to Schedule of Statement of Changes Federal Financial Assistance in Fund Balances Equal Employment Opportunity Affirmative Action Employer 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 2/19 As higher education faces increased competition for dwindling resources, The University of Arizona has continued to excel in providing a quality education to its students, expanding research efforts and providing public service activities throughout the state. Faced with the threat of reduced state appropriations as a percentage of total revenue, the University continues to emphasize ways to improve efficiency and effectiveness of programs throughout the institution. This effort is exemplified by the commitment of resources to support formal business process reengineering efforts and significant investments in campus technology. The annual financial report of The University of Arizona is published for use by all interested persons and submitted as a public accounting of the University's financial operations for the fiscal year ended June 30, 1996. The financial information presented in this report is designed to enable the reader to understand how the University managed its resources to meet the overall mission of the institution. The financial statements and additional related highlights provide the evidence of the institution's continued growth and stability as we prepare to meet the challenges during the coming year. Comments and questions relating to the information provided are always welcomed. Joel Valdez Senior Vice President for Business Affairs Ronald E. Smith Controller Enrollment Highlights Academic Enrollment (Headcount) Undergraduate Graduate Total Fall 1995 Total Fall 1994 Agriculture 1,991 510 2,501 2,364 Architecture 444 38 482 498 Arts & Sciences - General 4,841 4,841 5,057 Business & Public Administration 4,637 475 5,112 5,088 Education 723 998 1,721 1,684 Engineering & Mines 2,536 808 3,344 3,544 Fine Arts 1,878 314 2,192 2,230 Health-Related Professions 122 122 202 Humanities 1,035 415 1,450 1,487 Interdisciplinary Programs 461 461 486 Law 491 491 484 Medicine 556 556 491 Nursing 257 163 420 427 Optical Sciences 138 138 140 Pharmacy 298 298 285 Science 2,811 843 3,654 3,698 Social & Behavioral Sciences 4,412 988 5,400 5,469 Correspondence/Non-Degree 466 1,128 1,594 1,672 Total Enrollment 26,153 8,624 34,777 35,306 Other Enrollment Statistics Fiscal Year: 1995-96 1994-95 1 990-91 Enrollment - undergraduate (fall) 26,153 26,468 27,522 Enrollment - graduate (fall) 8,624 8,838 8,213 Degrees awarded-bachelor 4,612 4,807 4,118 Degrees awarded-advanced 2,086 2,045 1,818 Tuition per full-time student: Resident 1,884 1,828 1,478 Nonresident 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 3/19 7,912 7,434 6,484 Faculty and Staff Instructional Faculty 1,592 1,588 1,652 Staff, Administrators, Professional 10,935 10,445 11,159 Admissions - Fall 1995 In-State Out-of-State Total Freshmen Transfers Undergraduate Applications 9,273 12,802 22,075 16,307 5,768 Admissions 8,041 9,510 17,551 13,635 3,916 Matriculations 4,462 2,316 6,778 4,557 2,221 Graduate (not including Law, Medicine, and Pharmacy) Applications 1,855 7,159 9,014 Admissions 1,549 2,332 3,881 Matriculations 1,303 1,144 2,447 Financial Highlights Funding Sources 1996 1995 1991 State Appropriations $ 282,488 $ 267,411 $ 243,420 Tuition & Fees 134,053 129,481 105,344 Federal Grants & Contracts 218,344 233,086 156,248 State and Local Grants & Contracts 12,270 12,261 5,670 Private Gifts, Grants & Contracts 66,742 66,425 71,052 Auxiliary Enterprise Operations 80,146 75,049 62,440 Investment Income & Net Realized Gains 15,586 15,740 15,702 Additions to Plant Facilities 87,630 73,507 99,169 Retirement of Indebtedness 12,022 10,619 6,718 Other Sources 43,299 26,540 15,324 Total Funding Sources $ 952,580 $ 910,119 $ 781,087 Funding Uses Instruction $ 204,419 $ 197,640 $ 177,661 Research 193,650 207,921 149,293 Public Service 30,407 27,736 22,478 Academic Support 57,332 53,878 53,590 Student Services 12,884 12,701 15,656 Institutional Support 49,125 45,856 38,383 Operation & Maintenance of Plant 37,037 35,877 30,954 Scholarships & Fellowships 54,994 52,448 40,573 Auxiliary Enterprise Operations 82,173 76,035 61,366 Indirect Costs Recovered 41,096 40,157 33,764 Facility Additions & Disposals 90,620 56,161 98,131 Debt Servicing 31,734 30,505 6,718 Other Uses 1,472 1,114 18,403 Total Funding Uses $ 886,943 $ 838,029 $ 746,970 Funding Sources Over Funding Uses 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 4/19 $ 65,637 $ 72,090 $ 34,117 Endowment (investments at market value; land at book value) $ 92,057 $ 81,405 $ 63,666 Balance Sheet (in thousands of dollars) June 30, 1996, with comparative totals at June 30, 1995 Current Operating Funds Nonoperating Funds Total All Funds Unrestricted General Operating Funds Designated Funds Auxiliary Enterprises Funds Restricted Funds Total Current Operating Funds Student Loan Funds Endowment and Similar Funds Agency Funds Plant Funds Memorandum Only Assets 1996 1995 Cash and investments (See VI) $14,424 $47,681 $21,167 $13,837 $97,109 $1,443 $68,657 $10,375 $32,413 $209,997 $217,991 Donated land 209 209 2,299 242 2,750 2,778 Notes, accounts receivable and unbilled charges, less allowance: 1996--$1,880; 1995--$2,252 242 6,910 4,583 25,560 37,295 14,168 986 454 8,374 61,277 57,957 Inventories and supplies 39 267 7,490 7,796 155 7,951 8,468 Due from other funds 58 58 64 122 721 Physical properties (See VII) 1,248,451 1,248,451 1,196,483 Total Assets $14,705 $54,916 $33,240 $39,606 $142,467 $15,611 $71,942 $10,984 $1,289,544 $1,530,548 $1,484,398 Liabilities and Fund Balances Liabilities: Accounts payable $1,643 $1,781 $2,570 $3,694 $9,688 $6 $140 $7,727 $17,561 $17,908 Accrued payroll 8,174 2,083 1,694 5,819 17,770 6 17,776 16,881 Deferred revenue and deposits 2,866 2,444 4,637 18 9,965 4 88,670 98,639 104,312 Funds held for others 10,844 10,844 13,596 Due to other funds 122 122 122 721 Capitalized lease obligations and other long-term liabilities (See IX) 66,555 66,555 68,075 Bonds payable (See VIII) 249,910 249,910 259,401 Total Liabilities 12,683 6,308 9,023 9,531 37,545 16 10,984 412,862 461,407 480,894 Fund Balances (See V) 2,022 48,608 24,217 30,075 104,922 15,595 71,942 876,682 1,069,141 1,003,504 Total Liabilities and Fund Balances $14,705 $54,916 $33,240 $39,606 $142,467 $15,611 $71,942 $10,984 $1,289,544 $1,530,548 $1,484,398 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 5/19 Fund Balances consist of: Restricted: Amount obligated for outstanding purchase orders $14,871 $14,871 $12 $14,883 $18,173 U.S. Government grants refundable 12,205 12,205 11,907 Endowment $38,116 38,116 35,742 Quasi-endowment 20,522 20,522 20,845 General 15,204 15,204 3,378 $14,056 32,638 27,362 Designated: Amount obligated for outstanding purchase orders $2,949 $3,036 5,985 11,405 17,390 14,161 Summer sessions 4,703 4,703 4,703 4,482 Quasi-endowment 13,304 13,304 11,896 General $2,022 40,956 21,181 64,159 64,159 54,746 Net Investment in Plant 851,221 851,221 804,190 Total Fund Balances $2,022 $48,608 $24,217 $30,075 $104,922 $15,595 $71,942 $876,682 $1,069,141 $1,003,504 See notes (I-XI) to Financial Statements Statement of Changes in Fund Balances (in thousands of dollars) Current Operating Funds Nonoperating Funds Total All Funds Unrestricted Total Plant Funds General Auxiliary Current Student Endowment Unexpended Debt Investment Memorandum Only Operating Designated Enterprises Restricted Operating Loan and Similar Plant Service In Funds Funds Funds Funds Funds Funds Funds Funds Funds Plant 1996 1995 Revenues and Other Additions Unrestricted current revenues $363,001 $106,073 $94,549 $563,623 $ 563,623 $ 537,891 Tuition and fees $79 79 $ 490 569 574 Federal grants and contracts 181,232 181,232 $ 236 $ 788 182,256 197,886 State grants and contracts 9,703 9,703 9,703 9,870 Local grants and contracts 1,774 1,774 1,774 1,593 Private gifts, grants and contracts 46,923 46,923 38 1,055 6,020 $2,024 56,060 54,603 Federal appropriations 2,017 2,017 6,189 8,206 2,368 State appropriations 536 536 50 80 10,232 10,898 8,044 Investment income including net realized gains 2,828 2,828 78 896 37 $1,841 5,680 7,072 Interest on loans 331 331 342 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 6/19 loans receivable 331 331 342 Additions to plant facilities including amounts expended from current funds: 1996 - $38,433; 1995 - $34,576 87,630 87,630 73,507 Retirement of indebtedness 12,022 12,022 10,619 Other additions 8,922 5 4,901 13,828 5,750 Total revenues and other additions 363,001 106,073 94,549 245,092 808,715 733 2,521 32,188 1,846 106,577 952,580 910,119 Expenditures and Other Deductions Educational and general expenditures 363,464 67,807 208,577 639,848 639,848 634,057 Auxiliary enterprises expenditures 82,173 82,173 82,173 76,035 Indirect costs recovered 41,096 41,096 41,096 40,157 Cancellation of loans and provision for bad debt 28 28 341 Administrative and collection costs 186 186 220 Expended for plant facilities (including noncapitalized expenditures of $3,663 in 1996 and $3,712 in 1995) 51,921 51,921 41,422 Interest on indebtedness including $939 capitalized as construction in progress in 1996 and $1,221 in 1995 19,712 19,712 19,886 Disposal of plant facilities 38,699 38,699 14,739 Refunded to grantors or donors 1,144 1,144 4 1,148 449 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 7/19 donors Retirement of indebtedness 12,022 12,022 10,619 Other deductions 110 110 104 Total expenditures and other deductions 363,464 67,807 82,173 250,817 764,261 214 4 51,921 31,844 38,699 886,943 838,029 Transfers Among Funds Mandatory loan fund matching grants (12) (26) (38) 38 Mandatory principal and interest (375) (25,667) (7,482) (33,524) 45 33,479 Voluntary, net 505 (2,221) (4,023) 3,795 (1,944) (70) 942 21,467 452 (20,847) Total transfers 130 (27,900) (11,505) 3,769 (35,506) (32) 942 21,512 33,931 (20,847) Net increases (decreases) for the year (333) 10,366 871 (1,956) 8,948 487 3,459 1,779 3,933 47,031 65,637 72,090 Fund balances, beginning of year 2,355 38,242 23,346 32,031 95,974 15,108 68,483 10,343 9,406 804,190 1,003,504 931,414 Fund balances, end of year $2,022 $48,608 $24,217 $30,075 $104,922 $15,595 $71,942 $12,122 $ 13,339 $851,221 $1,069,141 $1,003,504 See Notes (I-XI) to Financial Statements. Statement of Current Operating Funds Revenues, Expenditures and Other Changes (in thousands of dollars) Year Ended June 30, 1996, with comparative totals for 1995 Unrestricted Funds Total Current Operating Funds Memorandum Only General Operating Funds Designated Funds Auxiliary Enterprises Funds Total Unrestricted Funds Restricted Funds 1996 1995 Revenues State appropriations $ 271,590 $ 271,590 $ 730 $ 272,320 $ 261,051 Tuition and fees 86,444 $ 36,411 $ 10,629 133,484 368 133,852 129,197 Federal grants and contracts 36,070 18 36,088 145,567 181,655 197,582 State grants and contracts 608 1 609 8,012 8,621 8,399 Local grants and contracts 80 104 184 1,728 1,912 1,546 Private gifts, grants and contracts 7,786 2,896 10,682 43,308 53,990 52,438 Federal appropriations 3,336 5 3,341 2,208 5,549 5,636 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 8/19 Investment and endowment income 1,593 7,942 40 9,575 2,737 12,312 11,481 Sales and services of educational departments 1 14,177 14,178 14,178 11,970 Sales and services of auxiliary enterprises 80,146 80,146 80,146 75,049 Other 37 2,994 715 3,746 3,945 7,691 6,708 Total current revenues 363,001 106,073 94,549 563,623 208,603 772,226 761,057 Expenditures and Mandatory Transfers Educational and general: Instruction 156,309 32,336 188,645 15,774 204,419 197,640 Research 42,910 9,288 52,198 141,452 193,650 207,921 Public service 11,332 917 12,249 18,158 30,407 27,736 Academic support 52,862 3,026 55,888 1,444 57,332 53,878 Student services 10,779 1,385 12,164 720 12,884 12,701 Institutional support 32,541 15,828 48,369 756 49,125 45,856 Operation and maintenance of plant 34,843 2,194 37,037 37,0 37 35,877 Scholarships and fellowships 21,888 2,833 24,721 30,273 54,994 52,448 Educational and general expenditures 363,464 67,807 431,271 208,577 639,848 634,057 Mandatory transfers: Loan fund matching grants 12 12 26 38 10 Principal and interest 375 25,667 26,042 26,042 18,257 Total educational and general 363,839 93,486 457,325 208,603 665,928 652,324 Auxiliary enterprises: Expenditures 82,173 82,173 82,173 76,035 Mandatory transfers for principal and interest 7,482 7,482 7,482 7,213 Total auxiliary enterprises 89,655 89,655 89,655 83,248 Total expenditures and mandatory transfers 363,839 93,486 89,655 546,980 208,603 755,583 735,572 Other transfers and additions (deductions): Restricted receipts over transfers to revenue (4,607) (4,607) 1,741 Voluntary transfers, net 505 (2,221) (4,023) (5,739) 3,795 (1,944) (12,841) Refunded to grantors (1,144) (1,144) (449) Net increases (decreases) in fund balances $ (333) $ 10,366 $ 871 $ 10,904 $ (1,956) $ 8,948 $ 13,936 See notes (I-XI) to Financial Statements Notes to Financial Statements 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 9/19 June 30, 1996 I. FUND ACCOUNTING To recognize any limitations and restrictions placed on the use of the resources available to the University, the accounts are maintained according to the principles of fund accounting. Therefore, the resources are classified for accounting and reporting purposes into funds according to the activities or objectives specified. Separate accounts are maintained in each fund. However, in the accompanying financial statements, individual funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been reported by fund group. For each fund group, fund balances restricted by outside sources are identified and separated from fund balances allocated to specific purposes by action of the Arizona Board of Regents or the Administration. Externally restricted funds may be used only for the purposes established by the source of such funds. In contrast, designated funds are controlled by the Administration of the University in achieving its institutional purposes. Changes in the use of resources require an accounting transfer of the resources to the fund with the activity or objective to be accomplished. Mandatory transfers are those required to meet legally binding agreements such as bond indentures. Other transfers result from decisions by the Arizona Board of Regents or the Administration as to permitted use of funds. II. FUND DESCRIPTIONS The current operating funds and their functions are as follows: The General Operating Funds account for activities of State appropriations and Federal agriculture appropriations. The Designated Funds account for the recovery of indirect costs from sponsored research and academic year tuition and fees retained by the University. Summer session and extension teaching programs, unrestricted gifts and income from short-term and long-term investments are also included in these funds. The purposes of these funds are determined by the Arizona Board of Regents and University Administration. The Auxiliary Enterprises Funds account for the revenues and expenditures of revenue-producing, substantially self-supporting activities that perform a service to the student body, faculty and public but are not themselves educational activities. Auxiliary enterprises activities include student housing, bookstores, student unions, stores, intercollegiate athletics and others. The Restricted Funds account for governmental and private gifts, grants and contracts. The purposes are restricted by the donor or supporting agency. Funds not used for the restricted purpose may revert to the sponsor or donor. Revenues of the Restricted Funds are reported only to the extent of expenditures and mandatory transfers in the Statement of Current Operating Funds Revenues, Expenditures and Other Changes. The non-operating funds and their functions are as follows: The Student Loan Funds account for loans made to assist students in the financing of their education. The Endowment and Similar Funds account for private gifts and other funds that require the principal be permanently invested and only the income be utilized for general or specific requirements. Quasi-endowment funds have been established by the Arizona Board of Regents or the Administration for the same purpose as endowment funds, except that principal and income may be expended for general or specific requirements. The Agency Funds account for deposits held in custody for others. These include funds held for the University Physicians, Inc., Arizona State University and Northern Arizona University student financial aid trust funds, Boyce Thompson Arboretum and others. The Plant Funds account for activities relating to institutional properties. These include the total investment and debt incurred in the financing of University properties. III. BASIS FOR REPORTING The accompanying financial statements present all funds under the authority of the University. The basic criterion for inclusion is the exercise of financial accountability. Financial accountability for the University remains with the State of Arizona; therefore the University is considered part of the reporting entity for the state's financial reporting purposes. The financial statements do not include financially interrelated organizations described in Note IV. The financial statements are prepared on the accrual basis of accounting. The Statement of Current Operating Funds Revenues, Expenditures and Other Changes is a statement of financial activities for current operating funds during the current reporting period. It is not intended to present the results of operations or the net income or loss for the period as would a statement of income. The accounting policies followed by the University conform to generally accepted accounting principles as applied to governmental colleges and universities in the AICPA College Guide Model as defined in Governmental Accounting Standards Board Statement No. 15. The methods of applying those policies which materially affect the determination of financial position, current operating funds revenues, expenditures and other changes and the current changes in fund balances are summarized below: Investments and donated land are stated at cost or fair market value at the date of acquisition, as appropriate. Inventories and supplies are stated at the lower of cost (determined by the first-in, first-out method) or market. Physical properties are stated at cost or fair market value at date of acquisition, as appropriate. Special collections are carried at a nominal value of $1 per collection. 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 10/19 Capital expenditures reported as current operating expenditures also appear as additions to the Plant Funds. As permitted by generally accepted accounting principles, the University does not provide for depreciation of physical properties. Tuition and fees revenue (net of refunds) includes $22,203,000 of waivers charged to Scholarships and Fellowships and $2,939,000 of waivers for faculty and staff benefits charged to the appropriate expenditure programs to which the applicable personnel relate. Summer session revenue and expenditures are reported within the fiscal year in which the summer session's program is predominantly conducted. Revenue and accounts receivable include amounts received and expended by the University under Federal and State funded research, student aid and other programs. Both the direct and indirect costs of these programs are subject to audit by cognizant governmental agencies or their appointees. The University expects that adjustments or repayments, if any, resulting from such audits would not have a significant effect on the financial statements. Transfer of construction debt from Unexpended Plant Funds to Investment In Plant is accomplished as the construction proceeds are expended. The Statement of Changes in Fund Balances includes $20,847,000 of voluntary transfers all of which are associated with construction and debt. There is no net effect to the Plant Fund group as a whole. The financial information shown for fiscal year 1994-1995 in the accompanying financial statements is included as a basis for comparison with fiscal year 1995-1996 and represents summarized totals only. Certain prior year items in the accompanying financial statements have been reclassified, without effect on total fund balances, revenues or expenditures, to conform with the current year's classifications. IV. RELATED ORGANIZATIONS The financial statements of The University of Arizona do not include the operations of the University of Arizona Foundation, Inc., the University Physicians, Inc., the Arizona Research Park Authority and the Campus Research Corporation (renamed from the Rita Road Campus Corporation in January 1996). The University Foundation, Inc. is a nonprofit corporation controlled by a separate Board of Directors. The principal goals of the Foundation are to support The University of Arizona through various fund-raising activities, and to contribute funds to the University for support of various programs. According to the audited financial statements of the Foundation for the year ended June 30, 1995, assets, liabilities, revenues and expenditures totaled $122 million, $76 million, $25 million, and $24 million, respectively. The University Physicians, Inc. (UPI) is a nonprofit corporation established to provide medical services and to support The University of Arizona in its teaching and research missions. UPI is controlled by a Board of Directors, comprised of the Dean, all clinical department heads, twelve other faculty physicians, and four community members. The primary purpose of UPI is to assist the University's College of Medicine in achieving the fulfillment of its teaching and research. According to the audited financial statements of UPI for the year ended June 30, 1995, assets, liabilities, revenues and expenditures totaled $74 million, $25 million, $97 million, and $85 million, respectively. The Arizona Research Park Authority (ARPA) is a nonprofit corporation created with the permission of the Arizona Board of Regents (ABOR) and designated by Arizona law as a political subdivision of the State, governed by a separate board of directors which by law may not include officers or employees of ABOR. ARPA was established under the State's industrial development authority statute to assist in the acquisition, improvement, and operation of university research parks and related properties. In August 1994, ARPA, with the approval of ABOR, sold $98 million nontransferable special revenue bonds to International Business Machines Corporation (IBM) to enable the University to acquire from IBM a 345-acre developed industrial site (the "Research Park") near Tucson, Arizona, together with 1,000 acres of adjacent unimproved land (collectively, the University of Arizona Science and Technology Park or the "Park"). The transaction was accomplished through the following steps: (1) the University agreed to pay $98 million to IBM for title to the entire Park; (2) ARPA and Campus Research Corporation jointly agreed to lease the developed portion of the Park from the University for a period of 30 years with a prepaid rental of $98 million; (3) ARPA subleased 79% of the building space in the developed portion of the Park to IBM for periods of up to 30 years for a rental sufficient to pay debt service on ARPA's bonds; and (4) ARPA used the $98 million received from its bond sale to make the rental prepayment to the University which, in turn, applied the money to purchase the entire Park from IBM. The bonds are payable solely from lease rentals paid by IBM. If IBM defaults or cancels its lease, the bonds must be surrendered and discharged. Title to the entire Park resides in the University and neither the Park nor any payments by the University secures ARPA's bonds. Audited financial statements for the year ended June 30, 1995, reflecting assets, liabilities, revenues and expenditures are not available. The Campus Research Corporation (CRC) is a nonprofit corporation governed by a separate Board of Directors and was established to assist the University in the acquisition, improvement and operation of the Research Park and related properties. CRC leases from the University the remaining 21% of the building space of the Research Park that is not leased to ARPA (see preceding paragraph). CRC is responsible for developing presently undeveloped portions of the research park and for subleasing to the University or to third parties existing unoccupied space, newly developed space, and space now occupied by IBM or its subtenants once the current subleases expire. The University is responsible only for payment of its proportional share of operation expenses. All income received by CRC from its activities, after payment of expenses and financial reserves, will be turned over to the University. Audited financial statements for the year ended June 30, 1995, reflecting assets, liabilities, revenues and expenditures are not available. V. COMPENSATED ABSENCES The University has not made accruals for vacation pay and other compensated absences. If the accruals were made, General Operating Fund, Designated Fund, Auxiliary Enterprises Fund and Restricted Fund liabilities would be increased by approximately $14,003,000, $1,918,000, $2,419,000, and $4,630,000, respectively. The University management believes that this omission does not have a significant effect on the accompanying financial statements as a whole based on materiality and considering that the General Operating Fund Liability would be funded by the subsequent year's appropriations from the State Legislature. VI. CASH AND INVESTMENTS The University follows Arizona Board of Regents policies which require that deposits be made only to accounts authorized by the Board and at depository banks that 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 11/19 have been approved. Pooled operating investments are restricted to the purchase of collateralized time certificates of deposit and repurchase agreements with commercial banks, and United States obligations such as Treasury bills, notes, bonds and obligations of agencies sponsored by the United States Government. Gifts and grants received as endowments or for restricted purposes are invested according to conditions stipulated by the donor or grantor; however, if no conditions are imposed, such funds are usually invested in one of two Consolidated Endowment Pools. The Consolidated Endowment Pools function as highly-diversified investment funds under the control of the University Investment Committee whose responsibility is to define, develop, and implement investment objectives, policies and restrictions relating to the Endowment funds held by the University. The primary investment objective of one pool is maximum long-term total return from income and capital appreciation under a policy of maximum investment productivity at an acceptable level of risk and volatility. The primary investment objective of the other pool is to maximize the current income earned. The Separately Held Endowment funds are separately invested according to the terms of the donor's gift or the administrator. Cash and securities on deposit with trustees are held in trust for the University by various commercial banks. Trust funds are invested by the trustee in accordance with the Board's authorizing resolutions. At year-end, the University's bank balance is $2,194,000. Of this balance, $153,000 is covered by federal depository insurance. The remaining balance is collateralized by U.S. Government obligations held by the bank's trust department in the University's name. Securities are collateralized as follows: 1. Certificates of deposit are covered by FDIC or SIPC insurance. 2. Repurchase agreements are col-lateralized with securities held by the University's custodial banks in the University's name. 3. Common stocks, preferred stocks and corporate bonds are registered in the name of and held by the University or are held by the University's custodial bank in the name of the University in a book entry system. These securities were either purchased from a broker/dealer or a financial institution by the University. 4. U.S. Treasury and Agency Government obligations: a. $63,523,000 are registered in the name of and held by the University or are held by the University's custodial bank in the name of the University in a book entry system. These securities were either purchased from a broker/dealer or a financial institution by the University. b. $34,644,000 are held by major financial institutions in the name of the University. The financial institutions act as both custodial and purchasing agent for these investment transactions. c. $5,746,000 are held by trustees. Bond funds held by trustees include money market funds invested in U.S. Government obligations, U.S. Government obligations, and obligations of agencies sponsored by the Federal Government held in the trustee's Federal Reserve Bank account. These securities are recorded in the University's name in the records of the trustee. The trustee acts as both custodial and purchasing agent for these investment transactions. 5. Endowment funds held by trustees include deposits, mutual funds, common stocks, corporate bonds, U.S. Government obligations, obligations of agencies sponsored by the Federal Government and mortgage backed notes receivable. These deposits and securities are held by the trustees as irrevocable trusts in the names of the individual donors for the benefit of the University according to the donors' stipulations. 6. At June 30, 1996, the University held investment contracts with both a major insurance company and a bank amounting to $1,503,000 of proceeds from the 1994A Certificates of Participation and $1,187,000 of proceeds from the 1994B Certificates of Participation, respectively. a.The Guaranteed Investment Contract (GIC) with the insurance company is uncollateralized. The insurance company is rated Aa3/AA+ and there is a provision in the contract requiring collateralization of the investment with U.S. Government obligations if the company's rating falls below A2 by Moody's or below A by Standard & Poors, or the University may terminate the contract. b.The Bank Investment Contract (BIC) is also uncollateralized. The bank is rated Aaa/AAA and there is a provision in the contract whereby if the bank's rating falls below Aa but is at least A by Moody's and below AA but is at least A by Standard & Poors, then the bank must collateralize the investment with U.S. Government obligations. If the rating falls below A/A, then the University has the option to terminate the contract. Deposits and Investments, at June 30, 1996, consist of the following: Deposits: Total Cost Total Market Cash on Deposit with State Treasurer $ 3,058,000 $ 3,058,000 Cash -5,557,000 -5,557,000 Securities: Certificates of deposit 160,000 160,000 Repurchase Agreements 47,470,000 47,470,000 Common Stocks 20,656,000 37,787,000 Preferred Stocks 634,000 651,000 Corporate Bonds 28,385,000 27,820,000 U.S. Treasury and Agency Govt. obligations 103,913,000 103,563,000 Endowments held by trustees 8,588,000 13,035,000 Investment contracts (GIC & BIC) 2,690,000 2,690,000 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 12/19 Totals $ 209,997,000 $ 230,677,000 The cash overdraft results from an aggressive short-term investment policy in which the University invests its funds until outstanding check are cashed. Deposits and Investments, at June 30, 1996, by management areas are as follows: Total Cost Total Market Current Operating Funds: Cash on Deposit with State Treasurer $ 3,058,000 $ 3,058,000 Cash and short-term investments 45,289,000 45,175,000 Long-term investments 48,762,000 48,182,000 Endowment Funds: Consolidated Pools: Cash and short-term investments 1,884,000 1,880,000 Long-term investments 47,157,000 61,653,000 Separately held: Cash and short-term investments 2,351,000 2,351,000 Long-term investments 8,677,000 9,853,000 Funds held by trustees 8,588,000 13,035,000 Plant Funds: Cash and short-term investments 11,533,000 11,533,000 Funds held by trustees 20,880,000 20,908,000 Other Nonoperating Funds: Cash and short-term investments 5,789,000 5,803,000 Long-term investments 6,029,000 7,246,000 Totals $ 209,997,000 $ 230,677,000 VII. PHYSICAL PROPERTIES Physical Properties at June 30, 1996, consist of the following: Buildings and Improvements $ 683,535,000 Land 70,177,000 Equipment 327,392,000 Library Materials 111,822,000 Construction in Progress 55,525,000 Total Physical Properties $ 1,248,451,000 In addition to expenditures through June 30, 1996 it is estimated that $57,008,000 will be required to complete projects under or planned for construction. Of this amount $21,943,000 is contractually encumbered. On April 1, 1996, the University changed its equipment capitalization criteria from $500 or more in valuation and two years or more life expectancy to $1,000 and one year, resulting in a one-time write off of $23,927,000 in assets. VIII. BONDS PAYABLE Bonds Payable at June 30, 1996, consist of the following: Interest Year of Maturity Original Issue Currently Outstanding Student Housing Revenue Bonds 3.0-3.75% 2002-2008 $ 8,500,000 $ 2,935,000 1988 - System Revenue Bonds 6.3-7.0% 1999 31,950,000 2,390,000 1990A - System Revenue Bonds 6.5-9.0% 2003 46,300,000 9,580,000 1990B - System Revenue Bonds 6.9-9.4% 2003 39,630,000 7,485,000 1991 - System Revenue Bonds 6.0-8.5% 2010 9,665,000 4,575,000 1992 - System Revenue Bonds 3.1-6.625% 2011 113,150,000 110,835,000 1992A - System Revenue Bonds 2.9-6.2% 2016 55,490,000 53,185,000 1993 - System Revenue Bonds 2.7-5.0% 2017 42,085,000 31,310,000 1994 - System Revenue Bonds 4.8-6.35% 2014 28,500,000 27,615,000 $ 375,270,000 $ 249,910,000 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 13/19 Principal and interest on bonds outstanding at June 30, 1996, are collateralized by registration fees, tuition, rentals and other charges and such obligations are generally callable by the University. The principal amounts due over the next five years are as follows: 1997 $ 9,360,000 1998 9,830,000 1999 10,335,000 2000 10,865,000 2001 11,515,000 Cash and securities on deposit with trustees, restricted for retirement of bonded indebtedness and renewals and replacements, are $507,000 and $645,000 respectively, at June 30, 1996, as required by the bond indentures. In addition, $10,645,000 was held by trustees for payment of future construction costs. In fiscal years 1977, 1990, 1992 and 1993 the University refunded in advance of maturity certain outstanding revenue bonds. At June 30, 1996, the outstanding principal balance of the refunded bonds is $112,185,000 which will be paid by investments held in trust with a carrying value of $84,944,000. These amounts are not included in the accompanying financial statements. IX. LEASES AND OTHER LONG-TERM LIABILITIES The University has entered into certain operating leases (generally, the leases include options for annual renewal) and other rental agreements for real property, equipment and films generally for periods not in excess of one year. During the 1995-1996 fiscal year, rent expenditures amounted to $9,303,000. The University also acquired a building, certain computer, telecom-munications and farm equipment, and agricultural land under various capital leases and certificates of participation (COPs). At June 30, 1996, the balance sheet includes $39,979,000 representing the cost of assets included in land, buildings, and equipment. Cash and securities on deposit with the trustee, restricted for retirement of certificates of participation, are $8,016,000 at June 30, 1996. In addition, $1,067,000 is held by trustee for payment of future construction costs. In 1991 the University refunded in advance of maturity certain outstanding certificates of participation. At June 30, 1996, the outstanding principal balance of the refunded certificates was $16,355,000 which will be paid by investments held in trust with a carrying value of $17,237,000. These amounts are not included in the accompanying financial statements. Summary of Future Lease Payments at June 30: Capitalized Operating Leases & COPs Leases 1997 $ 7,376,000 $ 656,000 1998 7,140,000 546,000 1999 7,611,000 235,000 2000 5,945,000 153,000 2001 5,902,000 103,000 Thereafter 76,304,000 206,000 Total minimum lease payments 110,278,000 $ 1,899,000 Less: Amount representing interest ( 43,723,000) Present value of net minimum lease payments$ 66,555,000 X. PENSION PLANS Full-time, permanent employees of the University are, in general, required to be members of an authorized retirement program. The program, consisting of several plans described below, is funded through payroll deductions from covered employees' gross earnings and amounts contributed by the University. In general, employees' rights vest after five years of service under all plans. University contributions for, and interest forfeited by, employees who leave employment before five years of service are used to reduce the University's future-period contribution requirements. Retirement payments are obligations of the respective retirement funds and not of the University. Eligible Faculty, Academic Professionals and Administrators at the University may select from the following retirement plans: Arizona State Retirement System, TIAA/CREF Retirement Plan, VALIC Retirement Plan, Fidelity Investments Retirement Plan and Aetna Variable Annuity Retirement Plan. The former is a defined benefit plan and the latter four are defined contribution plans. Eligible classified staff belong to the Arizona State Retirement System. A. Defined Benefit Plan - Arizona State Retirement System The Arizona State Retirement System is a cost-sharing multiple-employer defined benefit pension plan. The payroll for employees covered by the System for the year ended June 30, 1995 was approximately $4,228,265,000. The University's total payroll for the year ended June 30, 1996 was $416,554,000; the base salary amount for those employees who participate in the Arizona State Retirement System was $189,838,000. Employees who retire at or after age 65 with any number of years of credited service, at or after age 62 with 10 or more years of credited service, or at 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 14/19 or after any combination of years of service and age that totals 80, are entitled to a monthly benefit of 2 percent of their average monthly earnings, as defined in the plan, for each year of credited service. Employees who are age 50 or older with at least five years of credited service may retire early and receive reduced retirement benefits. The plan also provides death benefits and limited retiree health benefits. Benefits are established by state statute. The Legislature established a new long-term disability program and removed the long-term disability benefit from the plan. Effective October 1, 1995, that liability for current beneficiaries was transferred to the new program. The actuarially determined contribution rate for both employees and employers for fiscal year 1995-96 was 3.95 percent of compensation ($7,499,000 each). This contribution rate would have covered the actuarially determined current service costs plus amortization of the unfunded past service liability over a rolling 30-year period, which is being phased in. The current amortization period is 11 years. However, during the year ended June 30, 1996, state statutes required that both employees and the University contribute an amount equal to only 3.36 percent of the employee's base salary. Both the University and the covered employees made the required 3.36 percent contribution, amounting to $6,379,000 from each source, totaling $12,758,000. The actuarial computation of the contribution rate is made two years in advance based on June 30 information and, therefore, the rate for fiscal year 1995-96 was based on June 30, 1994 information. The amount reported below as "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is the actuarial present value of credited projected benefits and is intended to help users assess the plan's funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among government pension plans and employers. The System does not make separate measurements of assets and the pension benefit obligation for individual employers. The pension benefit obligation at June 30, 1995, (the date of the last actuarial valuation) for the System as a whole, determined through an actuarial valuation performed as of that date, was $10,289,740,000. The System's net assets available for benefits on that date were $10,752,930,000 (market value $12,464,462,000), resulting in net assets in excess of the pension benefit obligation of $463,190,000. The University's contribution represented approximately 4.02 percent of total contributions required of all participating employers. Historical trend information for all years available presenting the System's progress in accumulating sufficient assets to pay benefits when due is presented in the Arizona State Retirement System 41st Component Unit Financial Report for the Year Ended June 30, 1995. B. Defined Contribution Plans The University offers pension benefits for its eligible Faculty, Academic Professionals and Administrators through its defined contribution plans - TIAA/CREF, VALIC, Fidelity Investments and Aetna Variable Annuity. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. State statute requires that both the employee and the University contribute an amount equal to 7 percent of the employee's base salary. The University's total payroll in fiscal year 1995-96 was $416,554,000. The University's contributions were calculated using the base salary amount of $148,531,000 for those employees who selected a defined contribution plan. Both the University and the covered employees made the required 7 percent contribution. For the defined contribution plans each source contributed $10,397,000 for a total of $20,794,000. XI. SELF-INSURANCE PROGRAM The University of Arizona is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The University of Arizona participates in a self-insurance program administered by the State of Arizona, Department of Risk Management. Arizona statutes provide that any judgment assessed against the University not covered by insurance would be paid by the State from the self-insurance program or by a future appropriation from the State Legislature. State of Arizona Office of the AUDITOR GENERAL Independent Auditors' Report Members of the Arizona State Legislature The Arizona Board of Regents We have audited the accompanying balance sheet of The University of Arizona as of June 30, 1996, and the related statements of changes in fund balances and current operating funds revenues, expenditures and other changes for the year then ended. These financial statements are the responsibility of the University's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The University of Arizona as of June 30, 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 15/19 1996, and the changes in its fund balances and its current operating funds revenues, expenditures and other changes for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the financial statements of The University of Arizona taken as a whole. The accompanying supplemental schedule of bonds and capitalized leases and other long-term liabilities as of June 30, 1996, and the supplemental schedule of federal financial assistance for the year then ended are presented for purposes of additional analysis and are not a required part of the financial statements. The information in the schedules has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. In accordance with Government Auditing Standards, we will also issue reports on our consideration of the University's internal control structure and on its compliance with laws and regulations at a future date. Douglas R. Norton Auditor General September 13, 1996 Supplemental Schedule of Bonds & Capitalized Leases & Other Long-term Liabilities (in thousands of dollars) June 30, 1996 Bonds Payable and Leases Debt Service Commitments by Fiscal Year Issue Interest Rates Year of Maturity Original Issue Currently Outstanding at June 30, 1996 1997 1998 1999 2000 2001 Thereafter Student Housing: 1962 - Sonora 3.375% 2002 $ 1,500 $ 366 $ 72 $ 70 $ 68 $ 66 $ 69 $ 63 1963 - Arizona 3.0 - 3.5% 2003 1,500 368 68 71 69 67 70 70 1965 - Coronado 3.0% 2005 3,000 1,016 134 131 132 134 136 486 1967 - Married Student Housing 3.75% 2008 2,500 1,185 123 125 122 123 125 852 System Revenue Bonds: 1988 - System Revenue Bonds 6.3 - 7.0% 1999 31,950 2,390 1,199 1,199 268 1990A - System Revenue Bonds 6.5 - 9.0% 2003 46,300 9,580 1,805 1,780 1,758 1,761 1,766 3,541 1990B - System Revenue Bonds 6.9 - 9.4% 2003 39,630 7,485 1,431 1,410 1,382 1,384 1,381 2,767 1991 - System Revenue Bonds 6.0 - 8.5% 2010 9,665 4,575 504 502 504 504 508 4,580 1992 - System Revenue Bonds 3.1 - 6.625% 2011 113,150 110,835 7,561 7,559 8,495 13,124 13,121 131,220 1992A - System Revenue Bonds 2.9 - 6.2% 2016 55,490 53,185 3,406 3,408 3,409 3,409 3,408 86,266 1993 - System Revenue Bonds 2.7 - 5.0% 2017 42,085 31,310 5,474 5,479 5,473 1,111 1,111 23,740 1994 - System Revenue Bonds 4.8 - 6.35% 2014 28,500 27,615 2,562 2,562 2,564 2,561 2,565 33,317 Total bonds payable $ 375,270 $ 249,910 $ 24,339 $ 24,296 $ 24,244 $ 24,244 $ 24,260 $ 286,902 Capitalized Leases and Other Long-term Liabilities: Telecommunication Certificates 4.6 - 6.5% 2012 25,995 21,200 2,649 2,646 2,645 1,847 1,848 21,966 Educational Certificates 3.2 - 6.4% 2007 4,670 4,020 477 475 472 472 472 3,274 Residence Life Certificates 4.1 - 5.8% 2014 16,725 16,725 1,468 1,468 1,470 1,469 1,471 19,090 Maingate Admin Certificates 4.25 - 6.0% 2024 16,170 16,170 1,177 1,175 1,178 1,180 1,180 27,156 Agriculture Demonstration Farm 9.0% 2003 2,282 1,258 250 250 250 250 250 500 University Foundation Building 4.75 - 7.75% 2007 4,950 3,780 484 485 484 482 483 3,330 Other Capitalized Leases 4.6 - 9.22% Various 4,107 3,402 871 641 1,112 245 198 988 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 16/19 Total capitalized leases and other long-term liabilities $ 74,899 $ 66,555 $ 7,376 $ 7,140 $ 7,611 $ 5,945 $ 5,902 $ 76,304 Refunded Issues: Bonds: 1968 - Student Union 5.25 - 5.5% 1998 3,000 350 1977 - Revenue Refunding 6.0% 2002 22,315 22,315 1988 - System Revenue Bonds 7.0 - 7.625% 2011 24,135 24,135 1990A - System Revenue Bonds 6.5 - 9.0% 2015 33,210 32,435 1990B - System Revenue Bonds 6.9 - 9.4% 2016 29,205 28,525 1991 - System Revenue Bonds 6.5 - 8.5% 2017 4,425 4,425 Total refunded bonds $ 116,290 $ 112,185 Certificates of Participation: 1988 Telecommunications Certificates 6.1 - 7.6% 2003 27,595 16,355 Total refunded issues $ 143,885 $ 128,540 95/96 Supplemental Schedule of Federal Financial Assistance (in thousands of dollars) Year Ended June 30, 1996 Federal Grantor/Pass-Through Grantor Funding Agency Expenditures Federal Student Financial Aid Programs: Department of Health & Human Services Other Financial Aid Programs $ 106 Subtotal Department of Health & Human Services 106 Department of Education Federal Pell Grant Program 10,372 Federal Work Study Program 839 Federal Perkins Loan Program 231 Federal SEOG Program 1,096 Other Financial Aid Programs 40 Subtotal Department of Education 12,578 Miscellaneous Federal Agencies Other Financial Aid Programs 759 Total Federal Student Financial Aid Programs $ 13,443 Federal Research & Training Programs: Agency for International Development $ 655 Department of Energy 3,889 Department of the Interior 8,580 Department of Agriculture Agriculture Extension Service 3,672 Agriculture Experiment Station 1,954 U.S. Department of Agriculture 4,027 U.S. Forestry Service 674 Other Programs 0 Subtotal Department of Agriculture 10,327 Department of Defense Air Force 7,348 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 17/19 Army 3,071 Navy 3,881 Subtotal Department of Defense 14,300 Department of Commerce 1,215 Department of Health & Human Services Agency for Health Care Policy and Research 1,248 Division of Medicine 397 U.S. Dept. of Health & Human Services 8,625 Health Resources and Services Administration 1,472 National Cancer Institute 12,279 National Center for Nursing Research 236 National Heart, Lung & Blood Institute 5,835 National Institute on Aging 1,030 National Institute of Allergy & Infectious Diseases 1,421 National Institute of Child Health/Human Development 1,018 National Institute on Drug Abuse 3,681 National Institute of Diabetes, Digestive & Kidney Diseases 1,462 National Institute of Environmental Health Sciences 4,968 National Institute of General Medical Sciences 3,008 National Institutes of Health 8,098 National Institutes of Mental Health 1,426 National Institute of Neurological Disorders 1,860 Other Programs 4,045 Subtotal Dept. of Health & Human Services 62,109 Department of Justice 242 Department of Transportation 165 National Aeronautics & Space Administration NASA AMES Research Center 313 Goddard Space Flight Center 19,880 NASA Headquarters 6,072 Other Programs 682 Subtotal NASA 26,947 National Science Foundation 19,186 Department of Education Research 1,588 Training 3,334 Subtotal Department of Education 4,922 Environmental Protection Agency 1,024 Nuclear Regulatory Commission 817 National Endowment for the Humanities 255 National Endowment for the Arts 97 Miscellaneous Federal Agencies Defense Advanced Research Projects Agency 290 Defense Logistics Agency 17 Smithsonian 1,130 Veterans Administration 3,984 Other Programs 603 Subtotal Miscellaneous Federal Agencies 6,024 Through State Government 2,249 Through Local Government 445 Through For-profits 2,243 Through Non-profits Amity 74 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 18/19 Jet Propulsion Laboratory 8,063 Other Programs 7,689 Subtotal Through Non-profits 15,826 Through Miscellaneous Private 122 Total Federal Research & Training Programs $ 181,639 Total Federal Financial Assistance $ 195,082 See Notes to Schedule of Federal Financial Assistance Notes to Schedule of Federal Financial Assistance June 30, 1996 A. BASIS OF PRESENTATION The purpose of the Schedule of Federal Financial Assistance is to summarize those expenditures of The University of Arizona for the year ended June 30, 1996, that have been financed by the U.S. government (federal awards). This schedule includes expenditures financed by all federal assistance and procurement relationships entered into directly between The University of Arizona and the federal government, and expenditures of subawards from nonfederal organizations made under federally sponsored agreements. For reporting purposes, federal awards have been classified into two types: federal student financial aid programs federal research & training programs The accounting principles followed by The University of Arizona in each of these areas and used in preparing the accompanying schedule are as follows: Federal Student Financial Aid Programs - Expenditures are recognized on the accrual basis for awards made to students and allowable administrative expenses incurred in connection with the student loan programs. The student financial aid programs are funded by the federal government under various programs. For loan programs only the federal portion of administrative costs are included in the Schedule. Other disbursements are discussed in Notes C and D. Federal Research & Training Programs - Expenditures for direct costs are recognized as incurred using the accrual method of accounting and the cost principles set forth in OMB Circular A-21, Cost Principles for Educational Institutions. Under those cost principles and requirements of the individual grant agreements, certain types of expenditures are not allowable or are limited as to reimbursement. Moreover, expenditures include a portion of costs associated with general university activities (indirect costs) that are allocated to federal awards under negotiated formulas commonly referred to as indirect cost rates. Indirect costs and related revenues applicable to these cost recoveries are classified as unrestricted expenditures and revenues on the financial statements. B. The University did not identify Catalog of Federal Domestic Assistance Numbers due to the large number of individual assistance programs. In addition, many of the assistance programs do not have Catalog of Federal Domestic Assistance Numbers as they are specific to the University. C. The University administers the following Department of Education loan program: CFDA Number Federal Perkins 84.038 For Department of Education program the following information is provided: Loans outstanding at 6/30/96 $11,964,000 New loans to students FY 95/96 1,834,000 Loans cancelled FY 95/96 74,000 The University administers the following Department of Health and Human Services (HHS) loan programs: CFDA Number Nursing (NSL 2 Programs) 93.364 Health Profession (HPSL 4 Programs) 93.342 For Health and Human Services loan programs the following information is provided: Loans outstanding at 6/30/96 $2,484,000 New loans to students FY 95/96 324,000 Loans cancelled (recovered) FY 95/96 (4,000) 11/28/12 Annual Financial Report-June 30, 1996 file:///S:/LAPR/Special/eReports/Processed/UA Financial Report/Fiscal Year Ended June 30, 1996.htm 19/19 D. Federal Family Education Loans are not considered grants to the University since the University is responsible only for determining student eligibility and distributing the loans directly to students. Consequently, such loans distributed by the University during the year ended June 30, 1996, are not included in the Schedule of Federal Financial Assistance. However, because the Federal Family Education Loans Program is a Title IV, Higher Education Act student financial assistance program (CFDA number 84.032) sponsored by the U.S. Department of Education, it is considered a federal financial assistance program for single audit purposes. During fiscal year 1995/96 the University distributed approximately $79 million of Federal Family Education Loans to students. E. Revenues equal to the expenditures reported on the Schedule of Federal Financial Assistance are included in the accompanying basic financial statements as follows (in thousands of dollars): Statement of Current Operating Funds Revenues, Expenditures and Other Changes: Federal grants and contracts $181,655 Federal appropriations 5,549 Statement of Changes in Fund Balances - Items not recognized as revenue: Federal portion of student loan funds: Financial Aid expenditures 231 Transfers for Admin charges 110 Federal portion of plant funds: Construction/renovations - current 6,977 FY 94/95 unexpended balance 860 Less: FY 95/96 unexpended balance (300) Total Federal Financial Assistance $195,082 |