Northern Arizona University NAU Financial Report

              Financial
Report
1998-1999
The Financial Report was produced by NAU Creative Communications.
Printed on recycled paper.
NAU is an Equal Opportunity/Affirmative Action Institution
A36309/200/12-99
1
MEMBERS OF THE ARIZONA STATE LEGISLATURE
THE ARIZONA BOARD OF REGENTS
We have audited the accompanying balance sheet of Northern Arizona University as of June 30, 1999, 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 manage-ment.
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. 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 disclo-sures
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 posi-tion
of Northern Arizona University as of June 30, 1999, 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 Northern Arizona
University taken as a whole. Disclosure regarding the year 2000 issue on Page 23 is not a required part of the
University’s financial statements, but it is supplementary information required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of manage-ment
regarding the methods of measuring and presenting the supplementary information; however, we did not
audit the information and do not express an opinion on it. In addition, we do not provide assurance that the
University is or will become year 2000 compliant, that the University’s year 2000 remediation efforts will be
successful in whole or in part, or that parties with which the University does business are or will become year
2000 compliant.
Debbie Davenport
Auditor General
September 8, 1999
INDEPENDENT AUDITORS’ REPORT
 
 
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
2 3
ARIZONA BOARD OF REGENTS
UNIVERSITY ADMINISTRATION
George H. Amos III
Tucson
Rudy Campbell
Tempe
Judy Gignac
Sierra Vista
Chris Herstam
Phoenix
Jack Jewett
Tucson
Kay McKay
Flagstaff
John Munger
Tucson
Christine Thompson
ASU Student, Tempe
Don Ulrich
Paradise Valley
Clara M. Lovett
President
Charles W. Connell
Provost
J. Michael Mullen
Vice President for Administration
S. Theodore Ford
Senior Vice President for University Advancement
Kurt R. Davis
Vice President of Public Affairs and Marketing
Ex Officio
Jane D. Hull
Governor
Lisa Graham Keegan
Superintendent of Public Instruction
FINANCIAL REPORT 1998-99
Independent Auditors’ Report . . . . . . . . . . . . . .1
About the University
Degrees Reflect Diversity . . . . . . . . . . . . .5
NAU Serves State and Beyond . . . . . . . . . .6
Enrollment Trends Shift . . . . . . . . . . . . . . .7
Financial Highlights . . . . . . . . . . . . . . . . . . . . .8
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . .14
Statement of Changes in
Fund Balances . . . . . . . . . . . . . . . . . . . . . . . .16
Statement of Current Operating
Funds Revenues, Expenditures,
and Other Changes . . . . . . . . . . . . . . . . . . . . .18
Summary of Significant
Accounting Policies . . . . . . . . . . . . . . . . . . . .19
Notes to Financial Statements . . . . . . . . . . . . .20
Supplementary Information . . . . . . . . . . . . . .23
4
NAU has maintained a tradition over the
past century as one of the West’s premier
universities – a tradition centering on
academic excellence. The university’s
programs cover a diverse range of disci-plines,
from liberal arts and the sciences
to professional and career-related pro-grams.
In fiscal year 1998-99, NAU
awarded 3,041 bachelor’s, 1,692 mas-ter’s
degrees, and 45 doctoral degrees.
Areas in Which
Degrees Are Offered
Bachelor’s Degrees
Accountancy
Advertising
American Political Studies
Anthropology
Applied Geography
Applied Science
Applied Sociology
Art
Art Education
Art History
Arts Management
Astronomy
Biology
Botany
Business Economics
Chemistry
Civil Engineering
Computer Information Systems
Computer Science and Engineering
Construction Management
Criminal Justice
Dental Hygiene
Earth Science
Economics
Electrical Engineering
Electronic Media
Elementary Education
Engineering Physics
English
Environmental Chemistry
Environmental Engineering
Environmental Science
Exercise Science
Finance
Forestry
French
Geochemistry
Geography
Geology
German
Health Education
History
Hotel and Restaurant Management
Humanities
Interior Design
International Affairs
Journalism
Journalism and Political Science
Liberal Studies
Marketing
Mathematics
Mechanical Engineering
Merchandising
Management
Microbiology
Modern Languages
Music
Music, Five-year Program
Music History and Literature
Music Performance
(Instrumental and Vocal)
Nursing
Parks and Recreation Management
Philosophy
Photography
Physical Education
Physical Science
Physics
Physics and Astronomy
Physics and Mathematics
Political Science
Psychology
Public Planning
Public Relations
Religious Studies
Social Science
Social Work
Sociology
Spanish
Special Education
Speech Communication
Technology Education
Theater
Visual Communication
Vocational Education
Zoology
Master’s Degrees
Anthropology
Applied Sociology
Bilingual/Multicultural Education
Biology
Business Administration
Chemistry
Clinical Speech Pathology
Counseling
Criminal Justice
Early Childhood Education
Earth Science
Educational Leadership
Elementary Education
Engineering
English
Forestry
Geology
History
Liberal Studies
Mathematics
Music
Nursing
Physical Education
Physical Science
Physical Therapy
Political Science
Psychology
Public Administration
Quaternary Studies
Reading and Learning Disabilities
Rural Geography
School Psychology
Secondary Education
Special Education
Teaching English
as a Second Language
Vocational Education
Doctoral Degrees
Applied Linguistics
Biology
Curriculum and Instruction
Educational Leadership
Educational Psychology
Forest Science
History
Political Science
About the University
Degrees Reflect Diversity
5
6 7
With more than twenty sites in Arizona,
students are never far from an NAU
education. Each site offers a selection
of undergraduate or graduate degrees,
certifications, and endorsements
selected especially for the needs of the
community it serves.
NAU partners with most Arizona
community colleges so students can
complete their first two years at a local
community college and then transfer to a
nearby NAU site to earn a bachelor’s
degree. With advisors, financial aid
counselors, and full- and part-time facul-ty
available at the various sites, NAU
makes going to college convenient.
NAU Online offers students the
flexibility and convenience of taking
courses on the web. Through NAU
Online, students can obtain a complete
certificate in a variety of programs, ful-fill
requirements toward a degree, round
out their professional development, or
take courses for personal enrichment.
Technical and administrative support are
available on line or over the phone.
About the University
NAU Serves State and Beyond
NAU’s total enrollment grew slightly
this past year, while enrollment of
Hispanic and Native American students
hit record levels. Freshman enrollment
also increased and represented a high
percentage of academic achievers.
“Over the past year we have
focused on getting the message out
about the high caliber of NAU’s
programs,” said Clara M. Lovett, NAU
president. “Our freshman class with its
increased quality and diversity, plus
increased overall enrollment of Native
Americans and Hispanics is an early
indicator that our message is being
heard.”
NAU’s overall enrollment growth
was modest, rising from 19,940 students
in the fall of 1998 to 19,981 this year.
Hispanic enrollment, however, is at 10
percent of the total student population
• 32 percent of all incoming
freshmen were in the top 10
percent of their graduating class.
• Almost half of the students in
the New Century Honors
Program are freshmen – 239
freshmen out of 537 total
participating, a 16.7 percent
increase over last year.
• The average in-state grade point
average is 3.43 percent for
Arizona freshmen at NAU.
Challenges still remain for NAU
because nonresident enrollment dropped
2.9 percent, and transfer students
declined slightly.
“As NAU’s academic reputation
and our smaller, personalized campus
becomes more well-known, the growth
of in-state freshmen should spread to
out of state,” Lovett said.
for the first time in NAU’s history –
1,989 representing a 2 percent increase
in Hispanic enrollment from last year’s
1,950. With that increase, the Hispanic
Association of Colleges and Universities
now classifies NAU as a Hispanic-serving
institution.
Native American enrollment also
is a historic high, now standing at 6.6
percent of total student population –
shooting up 8.1 percent, from 1,216
to 1,314 students.
In addition, the first-time freshman
population grew 1.7 percent, from 2,772
to 2,819. On the Flagstaff campus,
new freshman enrollment increased 2.6
percent. Especially encouraging is the
13 percent increase in Arizona freshmen
who chose to come to NAU.
The freshmen class at NAU is note-worthy
for the following facts:
1993-94
1999-00
2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000
Source: www.nau.edu Gary Fox - Public Affairs & Marketing
14,900 3,917
14,597 5,384
18,817
19,981
NAU Enrollment Headcount Comparison
Flagstaff Statewide
NAU Enrollment - Statewide
3,917
5,384
1993-94
1999-00
Source: www.nau.edu
= 1,000
Gary Fox - OPA&M
About the University
Enrollment Trends Shift
8
FINANCIAL HIGHLIGHTS
Funding Sources and Uses
Dollars in Millions
Fiscal Year Percentage
1999 1998 of Change
Funding Sources
(Resources acquired during the year)
State Appropriations $108.1 $ 100.6 7%
Tuition and Fees 63.6 61.6 3
Grants, Contracts, Gifts, and Advances 37.2 35.1 6
Auxiliary Enterprise Operations 25.7 24.8 4
Other Sources 12.4 14.3 (13)
Total Funding Sources $247.0 $236.4 4%
Funding Uses
(Resources consumed during the year)
Instruction $ 79.9 $ 77.4 3%
Research and Public Service 24.6 26.0 (5)
Student Services, Academic Support, and Institutional Support 59.6 56.7 5
Operation and Maintenance of Plant 13.4 14.1 (5)
Auxiliary Enterprise Operations 26.4 27.6 (4)
Facility Additions and Debt Service 30.3 27.1 12
Scholarships and Fellowships 23.1 20.2 14
Other Uses 0.4 0.4 0
Total Funding Uses $ 257.7 $ 249.5 3%
Funding Sources Under Funding Uses $ 10.7 $ 13.1
the majority of uses of funds. Educational and general expendi-tures
increased $6.2 million or 3 percent over the previous fiscal
year. Significant components of the increase within educational
and general expenditures are: instruction, $2.5 million; scholar-ships
and fellowships, $2.9 million; and academic support, $2.7
million. Facility additions and debt service consist of $18.3
million of additions to physical facilities and $11.9 million
in principal and interest. Funding uses exceed funding sources
in 1999 due to spending bond proceeds for construction and
renovation of facilities.
The above table presents an overview of the financial opera-tions
of the university; current operating and nonoperating funds
are included.
State appropriations and tuition and fees continue to be the
major funding sources for current operations related to educational
purposes. State appropriations for 1999 included $4,378,100 for
repair and maintenance of facilities and $389,500 for financial aid
purposes. Other sources of funding include investment income,
internal services, commissions, interest on loans, and other miscel-laneous
revenues.
Educational and general expenditures continued to account for
Financial Position
Dollars in Millions
Fiscal Year Percentage
1999 1998 of Change
Assets
(Resources available to provide future services
or to pay obligations)
Property, Buildings, and Equipment $393.4 $368.1 7%
Other Assets (cash, investments, receivables,
inventories, and deferred expenses) 79.5 85.8 (7)
Total Assets $472.9 $453.9 4%
Liabilities
(Obligations requiring cash or other resources
in the future)
Bonds Payable and Other Long-Term Obligations $97.2 $ 103.3 (6)%
Other Liabilities (accounts payable, payroll and other
liabilities, deferred revenue, and deposits) 28.1 23.6 19
Total Liabilities $125.3 $126.9 (1)%
Fund Balances
(Resources available after obligations for providing
future services)
Available for Current Operations:
Restricted (must be spent as specified by
external parties) $ 2.8 $ 1.9 47%
Designated (may be spent as determined
by University Administration) 15.4 17.6 (13)
Restricted or Designated for Nonoperating
Purposes (bond reserves, student loans,
endowments, and construction projects) 25.4 23.0 10
Total Fund Balances before Net
Investment in Plant $ 43.6 $ 42.5 3%
Invested in Property, Buildings, and
Equipment (property costs net of bonds
payable and other long-term obligations) 304.0 284.5 7
Total Fund Balances $347.6 $327.0 6%
The 4 percent increase in university assets resulted from $25.3
million of additional property, buildings, and equipment and a
$6.3 million decrease in other assets, primarily cash and invest-ments.
The increase in property, buildings, and equipment and the
decrease in cash and investments results from spending 1997 bond
proceeds and prior accumulated excess current fund revenues for
construction and renovation of facilities and technology enhance-ment
of equipment and operating systems.
Total fund balances increased 6 percent, primarily due to a
$19.5 million increase in net investment in property, buildings,
and equipment. Equipment and library acquisitions funded from
current operating funds accounted for $11.1 million of this
increase in net investment. The increase in net investment in
property, buildings, and equipment results from the continued
emphasis on renovation of facilities and the need to maintain
equipment at current technology.
9
10 11
49%
30%
19%
48%
31%
19%
48%
31%
19% 18%
31%
49%
50%
31%
17%
Unrestricted Current Operating Funds Revenues
Dollars in Millions
1995 1996 1997 1998 1999
Unrestricted Current Operating Funds Expenditures
Dollars in Millions
1995 1996 1997 1998 1999
Total Revenues $167.5 $181.6 $189.9 $199.3 $205.7
State Appropriations
Tuition and Fees
Auxiliary Enterprises and
Other Sources
Gifts, Grants, and Contracts
(Comprised 2% for 1995-99)
49%
35%
16%
49%
36%
15%
49%
36%
15%
48%
37%
15%
14%
36%
50%
Total Expenditures $151.1 $159.1 $173.5 $192.0 $194.4
Instruction and Academic
Support
Other Educational and
General
Auxiliary Enterprises
9
Operating Funds Composition
For the year ended June 30, 1999
General Operating Fund
Sources Uses by Expenditure Category Uses by Program
Total Current Operating Funds
Sources Uses by Expenditure Category Uses by Program
State
Appropriations
74%
State
Appropriations
44%
Tuition
and Fees
25%
Tuition
and Fees
26%
Personal
Services
62%
Personal
Services
52%
Payroll Taxes
and Fringe
Benefits
13%
Payroll Taxes
and Fringe
Benefits
10%
Operation and
Maintenance of
Plant
9%
Operation and
Maintenance
of Plant
6%
Academic
Support
15%
Academic
Support
10%
Research and
Public Service
3%
Research and
Public Service
10%
Auxiliary
Enterprises
12%
Scholarships
and Fellowships
5%
Scholarships
and Fellowships
10%
Institutional
Support
13%
Institutional
Support
10%
Instruction
35%
Instruction
49%
Student Services
6%
Student Services
7%
Operations
19%
Operations
31%
Travel
1%
Capital
5%
Travel
2%
Capital
5%
Auxiliary
Enterprises
and Other
Sources
15%
Other
Sources
1%
Gifts, Grants,
and Contracts
15%
12 13
Sources
State Appropriations
43.8% $108,085,600
Includes legislative appropriations from state of
Arizona general revenue for current operations of
the university, $389,500 for financial aid, and
$4,378,100 for repair and maintenance of facili-ties.
Tuition and Fees
25.8% $63,639,572
Includes $26,410,336 to support the operating
budget, $5,590,504 for summer sessions,
$22,422,801 for funding of local budgets, schol-arships,
and retirement of nonhousing bonded
indebtedness, and $9,215,931 of waivers, consist-ing
of $6,658,577 charged to scholarships and
fellowships and $2,557,354 for faculty and staff
benefits.
Governmental Grants and Contracts
12.2% $30,175,747
Includes $22,557,504 of federal grants and con-tracts,
$3,123,237 of state grants and contracts,
and $4,495,006 of local government grants and
contracts.
Auxiliary Enterprises
10.4% $25,656,865
Operations of substantially self-supporting activ-ities
such as housing, bookstore, student unions,
and intercollegiate athletics.
Other Sources
3.2% $7,854,821
Includes interest on loans receivable, internal
services, commissions, conferences, facility user-fees,
and other miscellaneous revenues.
Private Gifts, Grants, and Contracts
2.8% $6,989,901
Includes gifts, grants, and contracts for scholar-ships,
endowments, and plant facility additions.
Investment and Endowment Income
1.8% $4,541,334
Earnings from short-term investments of funds
not necessary for immediate expenditures and
long-term investment of endowment and bond-retirement
sinking funds.
Total Sources $246,943,840
Net Decrease in Fund Balances $10,731,651
Includes a decrease of $6,742,554 in cash and
investments, and an increase in short-term liabil-ities
of $4,485,838, offset by an increase in other
assets of $496,741.
Total $257,675,491
Combined Sources and Uses of Funds
For the year ended June 30, 1999
Note: The Combined Sources and Uses of Funds is presented to highlight major
financial data. The explanations provided are not intended to be all inclusive.
This summary is presented to give an overview of total university financial
operations. Restricted and unrestricted current operating and nonoperating funds
are included. Restricted funds have specific purposes stipulated by outside
donors or agencies.
Nonoperating funds consist of the loan fund, endowment fund, unexpended
plant fund, and debt service fund. The investment in plant fund is not included,
except for property gifts, since plant acquisitions are typically shown as a use
of funds in either the current operating funds or unexpended plant fund at time
of acquisition. The nonoperating funds are generally not available for use at
the discretion of the university. Sources and uses are allocated and controlled
by budgets.
Uses
Instruction and Academic Support
39.4% $101,548,296
Instruction, totaling $79,892,282 includes expenditures
of academic departments and other organizational units
for undergraduate and graduate courses and for occupa-tional
or technical instruction, includes regular academ-ic
year, summer sessions, and continuing education.
Academic Support, totaling $21,656,014 includes
libraries, audiovisual services, and academic administra-tion.
Student Services and Institutional Support
14.7% $37,931,758
Student services, totaling $15,101,156, includes areas
such as admissions, registrar, minority services, counsel-ing,
placement, student aid administration, and health
services. Institutional support, totaling $22,830,602,
includes executive management, financial operations,
computing support, human resource services, security,
and university relations.
Auxiliary Enterprises
10.3% $26,383,778
Expenditures of organizational units that furnish services
to students, faculty and staff, and the general public for a
fee directly related to the cost of the service and are man-aged
as essentially self-supporting activities.
Facility Additions and Debt Service
11.8% $30,369,363
Additions to physical facilities of $18,347,714 were
funded from the unexpended plant fund and $136,714
was received from property gifts. Not included in this
category are additions to property of $11,142,414 fund-ed
from current operating funds. Debt service payments
consisted of $5,810,113 of interest payments and
$6,074,822 of principal retired.
Research and Public Service
9.5% $24,561,583
Activities for which the primary objective is the discovery
or application of knowledge and may be sponsored by
external agencies or separately budgeted by organizational
units within the university. Public service activities make
available to the general public the benefits of the instruc-tional
or research activities and include local school con-sortiums
and public broadcasting.
Scholarships and Fellowships
9.0% $23,139,917
Includes grants paid from the restricted fund and tuition
and fee waivers. Scholarships and fellowships are
awarded to students enrolled in formal coursework for
which the students are not required to perform personal
services or repay the awards.
Operation and Maintenance of Plant
5.2% $13,423,232
Represents expenditures for the operation and mainte-nance
of plant, including administration, maintenance
and custodial services, landscaping and grounds upkeep,
and minor repairs and renovations. Also included are
utilities and property insurance.
Other Uses
0.1% $317,564
Other uses include $145,341 for trustee and administra-tive
costs, refunds to grantors of $32,579, cancellation of
student loans of $115,468, and an increase in provision
for uncollectible student loans of $24,176.
Total Uses $257,675,491
14 15
BALANCE SHEET
June 30, 1999 (with comparative totals for 1998)
CURRENT OPERATING FUNDS OTHER FUNDS TOTALALL FUNDS
Unrestricted Memorandum
General Designated Auxiliary Restricted Total Current Loan Endowment Plant Agency Only
Operating Fund Fund Enterprises Fund Fund Operating Funds Fund Fund Funds Fund 1999 1998
Assets
Cash and short-term investments $5,527,124 $14,339,096 $ 6,483,379 $ 88,950 $26,438,549 $ 346,257 $4,870,590 $ 11 ,214,746 $3,552,560 $ 46,422,702 $ 41,531,535
Cash and investments held by trustee 385,310 385,310 3,033,053 9,226,023 12,644,386 24,278,107
Accounts receivable 1,063,806 636,715 6,287,824 7,988,345 418 103,494 36,672 8,128,929 7,928,778
Loans receivable 6,048,858 6,048,858 6,021,325
Inventories 2,426,249 2,426,249 2,426,249 2,374,572
Deferred expenses and deposits 1,325,621 140,889 1,466,510 175,865 1,642,375 1,449,131
Due from other fund 942,718 942,718 942,718 918,582
Donated land 1,190,986 1,190,986 1,190,986
Property, buildings, and equipment 393,414,377 393,414,377 368,110,670
Total Assets $5,527,124 $17,671,241 $ 9,687,232 $6,762,084 $39,647,681 $6,395,115 $9,095,047 $413,958,640 $3,765,097 $472,861,580 $453,803,686
Liabilities and Fund Balances
Liabilities-
Accounts payable $ 951,167 $ 698,855 $ 637,438 $ 380,566 $ 2,668,026 607 $ 2,816,996 $ 1,363,500 $ 6,849,129 $ 3,976,657
Payroll and related liabilities 4,229,286 1,352,181 594,464 856,313 7,032,244 252,723 7,284,967 6,904,864
Deferred revenue 6,244,048 1,942,145 1,787,528 9,973,721 3,601 15,164 9,992,486 8,964,545
Retirement and insurance deposits 2,054,897 2,054,897 1,834,747
Other deposits 86,085 749,125 835,210 93,977 929,187 968,151
Due to other fund 942,718 942,718 942,718 918,582
Long-term obligations 1,207,976 1,207,976 1,357,798
Bonds payable 95,980,000 95,980,000 101,905,000
Total Liabilities $5,180,453 $ 8,381,169 $ 3,923,172 $3,967,125 $21,451,919 $ 607 $ 3,601 $100,020,136 $3,765,097 $125,241,360 $126,830,344
Fund balances 346,671 9,290,072 5,764,060 2,794,959 18,195,762 6,394,508 9,091,446 313,938,504 347,620,220 326,973,342
Total Liabilities and Fund Balances $5,527,124 $17,671,241 $ 9,687,232 $6,762,084 $39,647,681 $6,395,115 $9,095,047 $413,958,640 $3,765,097 $472,861,580 $453,803,686
Fund Balances Consist of-
Restricted-
U.S. government grants refundable $5,341,149 $ 5,341,149 $ 5,292,203
Endowments $4,931,981 4,931,981 4,200,591
General $2,794,959 $ 2,794,959 791,841 $ 2,949,515 6,536,315 4,446,251
Designated-
Outstanding purchase orders $ 212,761 212,761 212,761 206,070
Funding of ensuing year's budget 100,000 100,000 100,000 100,000
Summer sessions $ 48,630 48,630 48,630 182,126
Quasi-endowment 4,159,465 4,159,465 3,320,609
General 33,910 9,241,442 $ 5,764,060 15,039,412 261,518 6,983,187 22,284,117 24,735,177
Net investment in plant 304,005,802 304,005,802 284,490,315
Total Fund Balances $ 346,671 $ 9,290,072 $ 5,764,060 $2,794,959 $18,195,762 $6,394,508 $9,091,446 $313,938,504 $347,620,220 $326,973,342
See Summary of Significant Accounting Policies and Notes to Financial Statements
16 17
STATEMENT OF CHANGES IN FUND BALANCES
For the year ended June 30, 1999 (with comparative totals for 1998)
CURRENT OPERATING FUNDS OTHER FUNDS TOTALALL FUNDS
Unrestricted Plant Funds Memorandum
Investment Combined Only
General Designated Auxiliary Restricted Total Current Loan Endowment Unexpended Debt Service In Plant Plant
Operating Fund Fund Enterprises Fund Fund Operating Funds Fund Fund Plant Fund Fund Fund Funds 1999 1998
Revenues and Other Additions
Unrestricted current revenues $138,922,485 $38,423,619 $28,402,538 $205,748,642 $205,748,642 $199,261,569
State appropriations $ 194,750 194,750 $ 194,750 $ 4,378,100 $ 4,378,100 4,767,600 2,470,600
Student fees 206,608 206,608 206,608 $ 678,449 678,449 1,091,665 1,101,816
Governmental grants and contracts 29,903,637 29,903,637 47,582 47,582 29,951,219 26,868,264
Private gifts, grants, and contracts 4,368,635 4,368,635 $ 3,600 6,154 50 $ 136,714 136,764 4,515,153 5,397,672
Investment and endowment income 449,554 449,554 1,162,734 802,958 175,941 978,899 2,591,187 3,149,054
U.S. government advances and
reimbursements 89,588 89,588 74,994
Expended for plant facilities, including
$11,142,414 charged to current funds
expenditures in 1999 and $16,517,655 in 1998 27,188,489 27,188,489 27,188,489 26,589,676
Retirement of indebtedness 6,074,822 6,074,822 6,074,822 5,742,872
Other additions 213,301 15,142 15,142 228,443 166,589
Total Revenues and Other Additions $138,922,485 $38,423,619 $28,402,538 $35,123,184 $240,871,826 $ 306,489 $1,570,246 $ 5,196,250 $ 901,972 $ 33,400,025 $ 39,498,247 $282,246,808 $270,823,106
Expenditures and Other Deductions
Educational and general expenditures $138,786,183 $29,277,989 $32,540,614 $200,604,786 $200,604,786 $194,367,395
Auxiliary enterprises expenditures $26,383,778 26,383,778 26,383,778 27,652,690
Indirect costs recovered 1,992,340 1,992,340 $ 47,317 2,039,657 2,018,876
Refunded to grantors 32,579 32,579 32,579 6,462
Loan cancellations 115,468 115,468 122,142
Administrative costs 44,061 $ 101,280 $ 101,280 145,341 82,282
Provision for bad debts 24,176 24,176 231,481
Expended for plant facilities,
including expenditures not capitalized of
$2,301,639 in 1999 and $4,129,035 in 1998 $ 18,347,714 18,347,714 18,347,714 14,201,056
Retirement of indebtedness 6,074,822 6,074,822 6,074,822 5,742,872
Interest on indebtedness 5,810,113 5,810,113 5,810,113 6,144,690
Disposal of plant facilities $ 2,021,496 2,021,496 2,021,496 2,618,787
Total Expenditures and Other Deductions $138,786,183 $29,277,989 $26,383,778 $34,565,533 $229,013,483 $ 231,022 $ 18,347,714 $11,986,215 $ 2,021,496 $ 32,355,425 $261,599,930 $253,188,733
Transfers Among Funds-Additions (Deductions)
Mandatory-
Principal and interest $ (121,141) $ (7,930,566) $ (2,612,512) $ (10,664,219) $ (901,470) $11,565,689 $ 10,664,219
Loan fund matching (1,853) (1,853) $ 1,853
Grant matching (251,389) $ 251,389
Voluntary-net (1,485,314) (1,058,746) 105,830 (2,438,230) (35,207) 14,414,742 (78,263) $ (11,863,042) 2,473,437
Total Transfers $ (121,141) $ (9,669,122) $ (3,671,258) $ 357,219 $ (13,104,302) $ (33,354) $13,513,272 $11,487,426 $ (11,863,042) $ 13,137,656
Net Increase (Decrease) for the Year $ 15,161 $ (523,492) $ (1,652,498) $ 914,870 $ (1,245,959) $ 42,113 $ 1,570,246 $ 361,808 $ 403,183 $ 19,515,487 $ 20,280,478 $ 20,646,878 $ 17,634,373
Fund Balances at Beginning of Year 331,510 9,813,564 7,416,558 1,880,089 19,441,721 6,352,395 7,521,200 7,678,964 1,488,747 284,490,315 293,658,026 326,973,342 309,338,969
Fund Balances at End of Year $ 346,671 $ 9,290,072 $ 5,764,060 $ 2,794,959 $ 18,195,762 $6,394,508 $ 9,091,446 $ 8,040,772 $ 1,891,930 $304,005,802 $313,938,504 $347,620,220 $326,973,342
See Summary of Significant Accounting Policies and Notes to Financial Statements
19
STATEMENT OF CURRENT OPERATING FUNDS REVENUES,
EXPENDITURES, AND OTHER CHANGES
For the year ended June 30, 1999 (with comparative totals for 1998)
Unrestricted Total Current Operating Funds
Memorandum
General Designated Auxiliary Restricted Only
Operating Fund Fund Enterprises Fund Fund 1999 1998
Revenues
State appropriations $103,318,000 $ 194,750 $103,512,750 $ 98,310,350
Tuition and fees 35,425,339 $26,611,666 $ 510,902 206,608 62,754,515 60,703,290
Governmental grants and
contracts 1,929,193 64,424 27,594,316 29,587,933 27,228,106
Private gifts, grants, and
contracts 1,812,215 796,196 4,095,386 6,703,797 6,804,539
Investment income 1,667,494 282,653 116,743 2,066,890 2,359,906
Endowment income 332,811 332,811 292,872
Sales and services of
auxiliary enterprises 25,656,865 25,656,865 24,830,743
Internal services, less
related expenditures of
$9,549,723 in 1999 and
$9,600,660 in 1998 1,091,498 1,091,498 1,537,117
Other sources 179,146 6,403,051 6,582,197 7,169,126
Total Revenues $138,922,485 $38,423,619 $28,402,538 $32,540,614 $238,289,256 $229,236,049
Expenditures
Educational and general
Instruction $ 68,405,275 $ 7,964,864 $ 3,522,143 $ 79,892,282 $ 77,355,234
Research 2,742,975 551,626 9,067,053 12,361,654 11,318,298
Public service 1,618,957 4,694,755 5,886,217 12,199,929 14,659,754
Academic support 20,142,650 1,397,467 115,897 21,656,014 18,909,044
Student services 8,334,707 5,580,411 1,186,038 15,101,156 14,930,473
Institutional support 17,982,023 4,690,417 158,162 22,830,602 22,834,997
Operation and maintenance
of plant 12,901,019 520,148 2,065 13,423,232 14,109,957
Scholarships and fellowships 6,658,577 3,878,301 12,603,039 23,139,917 20,249,638
Educational and general
expenditures $138,786,183 $29,277,989 32,540,614 $200,604,786 $194,367,395
Auxiliary enterprises $26,383,778 26,383,778 27,652,690
Total Expenditures $138,786,183 $29,277,989 $26,383,778 $32,540,614 $226,988,564 $222,020,085
Mandatory Transfers
Principal and interest $ 121,141 $ 7,930,566 $ 2,612,512 $ 10,664,219 $ 9,944,116
Loan fund matching 1,853 1,853 1,063
Grant matching 251,389 $ (251,389)
Total mandatory transfers $ 121,141 $ 8,183,808 $ 2,612,512 $ (251,389) $ 10,666,072 $ 9,945,179
Total Expenditures and
Mandatory Transfers $138,907,324 $37,461,797 $28,996,290 $32,289,225 $237,654,636 $231,965,264
Other Transfers-Additions (Deductions)
Restricted receipts over
transfers to revenues $ 590,230 $ 590,230 $ (52,505)
Voluntary transfers-net $ (1,485,314) $ (1,058,746) 105,830 (2,438,230) (2,705,536)
Refunded to grantors (32,579) (32,579) (6,462)
Net Increase (Decrease)
in Fund Balances $ 15,161 $ (523,492) $ (1,652,498) $ 914,870 $ (1,245,959) $ (5,493,718)
See Summary of Significant Accounting Policies and Notes to Financial Statements
Basis of Accounting
The financial statements of the
university include all funds for
which the university has financial
accountability. Fiscal responsibility 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 the financial activities
of the Northern Arizona University
Foundation, Inc. The foundation is a
nonprofit corporation, controlled by
a separate board of directors. The goals
of the foundation are to promote the
cause of education and the objectives
of the university.
The financial statements have
been prepared on the accrual basis of
accounting in conformity with generally
accepted accounting principles as
applied to governmental colleges and
universities in the AICPA College Guide
model as defined in Governmental
Accounting Standards Board (GASB)
Statement No. 15. The Statement of
Current Operating Funds Revenues,
Expenditures, and Other Changes is a
statement of financial activities of
operating funds related to the current
reporting period. It does not purport to
present the results of operations or
the net income or loss for the period,
as would a statement of revenues
and expenses.
Loans and accounts receivable
as of June 30, 1999, are reported less
allowances for estimated uncollectible
amounts and collection costs of
$820,000 and $928,000, respectively
($800,000 and $778,000 in 1998).
The allowances for estimated uncol-lectible
amounts and collection costs
relating to federal loan programs have
been charged to federal and university
fund balances in the ratio of their
respective contributions to such
loan programs.
At June 30, 1999, investments are
reported at fair value. Fair value
typically is the quoted market price
for investments.
Inventories are stated at the lower
of cost or market. The cost of bookstore
inventories is determined by the retail
inventory method. The cost of other
inventories is determined generally
using the first-in, first-out or weighted
average cost methods.
Property, buildings, and equipment
are stated at cost at the date of
acquisition or fair market value at
the date of donation. The university
does not provide for depreciation of
buildings and equipment.
To the extent that current operating
funds are used to finance plant assets,
the amounts so provided are accounted
for as (1) expenditures, in the case of
normal acquisition and/or replacement
of movable equipment and library
books; (2) mandatory transfers, in the
case of required provisions for debt
amortization and interest, and equipment
renewal and replacement; and (3)
voluntary transfers in other cases.
Tuition and fees revenues
(net of refunds) include $6,658,577 of
waivers charged to scholarships and
fellowships and $2,557,354 of waivers
for faculty and staff benefits charged to
the appropriate expenditure programs
to which the benefited personnel relate.
Summer session revenues and
expenditures are reported within the
fiscal year in which the total summer
session programs are predominantly
conducted. Accordingly, only the
revenues and expenditures of the 1998
summer sessions are included on the
Statement of Current Operating Funds
Revenues, Expenditures, and Other
Changes. Revenues and expenditures
as of June 30, 1999, for the 1999
summer sessions are reported as
deferred revenues and expenses on the
Balance Sheet.
Federal grants provided to the
university are subject to review by fed-eral
agencies and audit in accordance
with the U.S. Office of Management and
Budget Circular A-133, Audits of States,
Local Governments, and Non–Profit
Organizations. In the opinion of the
university, any adjustments or repay-ments
that may be required would not
be material to the overall financial
condition of the university.
The university has not made
accruals for vacation pay. If the accruals
were made, General Operating Fund,
Designated Fund, Auxiliary Enterprises
Fund, and Restricted Fund liabilities
would be increased by approximately
$2,013,000, $253,000, $320,000, and
$85,000, respectively. University
management believes that this omission
does not have a significant effect on the
accompanying financial statements as
a whole, because the General Operating
Fund liability would be funded by the
subsequent year’s appropriations from
the state legislature.
Financial statement columns labeled
“memorandum only” are summarized
totals for fiscal years 1999 and 1998 and
are presented for comparative purposes.
Fund Accounting
To ensure observance of limitations
and restrictions placed on the use of the
resources available, the university’s
accounts are maintained in accordance
with the principles of “fund accounting.”
These principles require that resources
be classified, for accounting and
reporting purposes, into funds, according
to the activities or objectives specified.
Accounts are separately maintained
for each fund; however, in the
accompanying financial statements,
funds that have similar characteristics
have been combined into fund groups.
Accordingly, all financial transactions
have been recorded and reported by
fund group. Within each fund group,
fund balances restricted by donor or
other external agencies as to the purpose
for which they may be expended are
distinguished from unrestricted funds.
Description of Funds
The current operating funds
are used primarily to account for
transactions related to performing the
primary and support missions of the
university: instruction, research, public
service, academic support, student
services, institutional support, operation
and maintenance of plant, scholarships
and fellowships, and auxiliary
enterprises.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For the Year Ended June 30,1999
18
20 21
The cash overdraft results from
the university investing its funds until
outstanding checks are cashed. The
university’s total cash and investments
on hand were $186,893. The carrying
amount of the university’s total cash in
bank was $(506,747) and the bank
balance was $580,379, of which
$100,000 was covered by federal
depository insurance, and the remaining
balance of $480,379 was collateralized
by U.S. Government obligations held
by the bank’s trust department in the
university’s name.
The $6,770,195 in investments are
invested in U.S. Treasury notes, agency
notes, or Federal Home Loan Bank
securities, which are registered and held
by the counterparty’s agent in the agent’s
account with the Federal Reserve Bank.
The university’s ownership interest is
recorded in the bank’s records.
may be invested under the direction of
the university investment committee in
such a manner as to obtain the most
favorable rate of return and income
stability commensurate with safety of
principal. Demand deposit accounts
with authorized financial institutions are
required to be collateralized.
Cash and short-term investments at
June 30, 1999, consist of the following:
Fair Value
Cash on hand and in bank $ (372,945)
Investments on hand 53,091
Investments 6,770,195
Student Financial Aid
Trust Fund 4,787,922
Local Government
Investment Pool 35,184,439
$46,422,702
only the income be utilized. Quasi-endowment
funds have been established
by the university for the same purposes
as endowment funds and any portion
of such funds may be expended.
The Plant Funds are used to account
for transactions relating to investment in
university properties. They include:
(1) the Unexpended Plant Fund;
(2) the Debt Service Fund; and
(3) the Investment in Plant Fund.
The Unexpended Plant Fund is
composed of amounts that have been
appropriated or designated for land,
land improvements, buildings, and
equipment. Expenditures for construc-tion
in progress are accumulated in this
fund until the project is completed or
until the end of the fiscal year and then
transferred to the Investment in Plant
Fund. The Debt Service Fund represents
amounts set aside under terms of bond
indentures to provide for payment of
bond principal and interest and for
renewals and replacement of properties.
The Investment in Plant Fund represents
the total of property, buildings, equip-ment,
and related liabilities.
The Agency Fund is used to
account for assets held by the university
as custodian or fiscal agent for others.
The transactions of this fund do not
affect the Statement of Changes in
Fund Balances.
Current operating funds consist
of the following:
1. The General Operating Fund is
used to account for transactions related
to the university’s state-appropriated
budget as approved by the Arizona State
Legislature and Arizona Board of
Regents.
2. The Designated Fund is used
primarily to account for transactions
related to the university’s summer
session programs, the recovery of
indirect costs of sponsored research
programs, the recovery of administrative
costs of student aid, and the use of
unrestricted gifts and grants. Resources
in this fund group have been designated
for specific purposes by the university.
3. The Auxiliary Enterprises Fund
is used to account for transactions of
substantially self-supporting, non-educational
activities that primarily
provide a service to students, faculty,
staff, and the public. Auxiliary enter-prises
include student housing, book-store,
student unions, intercollegiate
athletics, internal service operations,
and others.
4. The Restricted Fund is used to
account for current funds expendable for
operating purposes but restricted by
donors or other outside agencies as to
the specific purpose for which they may
be expended. Revenues of the Restricted
Fund are reported in the Statement of
Current Operating Funds Revenues,
Expenditures, and Other Changes only
to the extent expended for current
operating purposes. Amounts received in
excess of expenditures are reported as
additions to the fund balance during the
year and may be subject to repayment
if not expended.
Other funds consist of the Loan
Fund, the Endowment Fund, the Plant
Funds, and the Agency Fund.
The Loan Fund, primarily financed
by the federal government, is used to
account for transactions related to loans
to students. Interest is recorded on the
accrual basis. Provisions of the federal
loan program stipulate that:
1. The university matches a portion
of federal contributions.
2. A portion of the loan principal
and interest (maximum of 30 percent
per year) will be canceled if the
recipient completes certain employment
requirements. These cancellations are
absorbed by the federal government.
The Endowment Fund consists
of endowment and quasi-endowment
funds. Endowment funds are subject
to restrictions of the donor gift
instruments, requiring that the principal
be invested in perpetuity and that
Note 1—Cash and Investments
In accordance with GASB
Statement No. 31, investments are
reported at fair value. Fair value
typically is the quoted market price for
investments. GASB Statement No. 31
also requires that changes in fair value
of investments during the year be
recognized as investment income.
The university may invest only in
the state Treasurer’s Local Government
Investment Pool, collateralized time
certificates of deposit and repurchase
agreements, U.S. Treasury securities,
and in obligations of other agencies
sponsored by the federal government.
Gift and endowment funds may be
invested according to conditions
stipulated by the donor, but if no
conditions are imposed, such funds
NOTES TO FINANCIAL STATEMENTS
For the Year Ended June 30, 1999
Included in the university’s
investments at June 30, 1999, is a
principal and interest strip from a U.S.
Government FHLMC mortgage (a
form of mortgage-backed securities),
with a fair value of $63,095. The value
of this security is based on cash flows
from principal and interest payments on
underlying mortgages. Therefore, it is
sensitive to prepayments by mortgagees,
which may result from a decline in
interest rates. In addition, the university
receives interest at a fixed interest
coupon rate of 6.95 percent for the
FHLMC mortgage.
The Student Financial Aid Trust
Fund was established in accordance
with Arizona Revised Statutes (ARS)
§15-1642 for the purpose of providing
aid to students with verifiable financial
need. The three state universities
participate in the Trust Fund, which is
held with the University of Arizona.
The university’s investment in the
State Treasurer’s Local Government
Investment Pool represents a propor-tionate
interest in the pool’s portfolio,
however, the university’s portion is not
identified with specific investments and
is not subject to custodial credit risk.
The State Board of Deposit provides
oversight for the State Treasurer’s pools,
and the Local Government Investment
Pool Advisory Committee provides
consultation and advice to the Treasurer.
The fair value of a participant’s position
in the pool approximates the value of
that participant’s pool shares. Cash and
investments held by trustees at June 30,
1999, consist of the following:
Fair Value
U.S. Government money
market portfolios $ 176,706
Local Government
Investment Pool 9,049,317
Investments with
NAU Foundation 3,418,363
$ 12,644,386
Bond indentures authorize the
bond trustees to invest in obligations
of or guaranteed by the federal govern-ment
or any agency or instrumentality
thereof; collateralized certificates of
deposit with federally insured banks,
trust companies, or savings and loan
associations within the State of Arizona;
or repurchase agreements. The bond
trustees are authorized to purchase
and sell securities.
A trust agreement between the
university and the NAU Foundation, Inc.
authorizes the foundation to invest
certain university restricted and
endowment funds according to the
foundation’s established investment
policies and procedures. At June 30,
1999, the foundation invested the entire
amount of $3,418,363 in pooled
investments with selected investment
financial institutions.
Note 2—Property, Buildings,
and Equipment
Property, buildings, and equipment at
June 30, 1999, consist of the following:
Land $ 4,893,214
Land improvements 33,024,002
Buildings 235,458,298
Equipment 77,560,184
Library books, media,
and special collections 42,478,679
$393,414,377
In addition to the accounts payable
balance shown in the Plant Funds,
the estimated cost to complete contracts
in process at June 30, 1999, totaled
$4,494,535.
Note 3—Retirement Plans
The university participates in one
cost-sharing multiple-employer defined
benefit pension plan and four defined
contribution pension plans.
The Arizona State Retirement
System (ASRS) administers a cost-sharing
multiple-employer defined
benefit pension plan. Benefits are
established by state statute and provide
retirement, death, long-term disability,
survivor, and health insurance premium
benefits. The ASRS is governed by the
Arizona State Retirement System Board,
in accordance with the provisions of
A.R.S. Title 38, Chapter 5, Article 2.
The ASRS issues a publicly available
financial report that includes its financial
statements and required supplementary
information. That report may be
obtained by writing to the ASRS, 3300
North Central Avenue, P.O. Box 33910,
Phoenix, Arizona 85067-3910, or calling
(602) 240-2000 or (800) 621-3778.
For the year ended June 30, 1999,
active ASRS members and the university
were each required by statute to
contribute at the actuarially determined
rate of 3.34 percent (2.85 percent
retirement and 0.49 percent long-term
disability) of the members’ annual
covered payroll. The university’s
retirement contributions to ASRS for
the years ended June 30, 1999, 1998,
and 1997 were $1,379,201, $1,389,602,
and $1,346,364, respectively,
which were equal to the required
contributions for the year. The Arizona
State Legislature establishes and may
amend active plan members’ and the
university’s contribution rates.
In accordance with A.R.S. §
15-1628, university faculty, academic
professionals, and administrative
officers have the option to participate in
defined contribution pension plans.
These plans are administered by
independent insurance and annuity
companies approved by the Arizona
Board of Regents. For the year ended
June 30, 1999, plans offered by the
Teachers Insurance Annuity Association/
College Retirement Equities Fund
(TIAA/CREF), Variable Annuity Life
Insurance Company (VALIC), Fidelity
Investments Tax-Exempt Service
Company (Fidelity), and Aetna Life
Insurance and Annuity Company
(Aetna) were approved by the board.
Benefits under these plans depend
solely on the contributed amounts and
the returns earned on investments of
those contributions. Contributions made
by members vest immediately, and
university contributions vest after five
years of full-time employment.
The distribution of member
contributions and associated investment
earnings are made in accordance with
the member’s contract with the
applicable insurance and annuity
company. University contributions and
associated investment earnings must
be distributed to the member in the form
of an annuity paid over a period that is
not less than the member’s life.
The Arizona State Legislature establish-es
and may amend active plan members’
and the university’s contribution rates.
For the year ended June 30, 1999, plan
members and the university were
each required by statute to contribute an
amount equal to 7 percent of a
member’s compensation.
Contributions to these plans for the
year ended June 30, 1999, are detailed
on the following page.
Note 4—Bonds Payable
In prior years, the university
defeased certain revenue bonds by
either placing the proceeds of new
bonds, or cash and investments accu-mulated
in the sinking fund, in an irrev-ocable
trust to provide for all future
debt service payments on the old bonds.
Accordingly, the trust account assets
and the liability for the defeased bonds
are not included in the university’s
financial statements. At June 30, 1999,
$4,985,000 of such bonds outstanding
are considered defeased.
Bonds payable at June 30, 1999, are
as follows:
Student housing bonds (3 issues) –
3.75% to 6.1%, principal payable
annually on April 1 through 2009,
revenues of various housing projects
pledged for payment $ 1,790,000
System revenue bonds, Series of
1990 – 6.6%, principal maturing serially
on June 1 through 2000, secured by a
first lien on certain gross revenues, on a
parity with the Series 1991, 1992,
1992A, and 1997 system revenue bonds
355,000
System revenue bonds, Series of
1991 – 6%, principal maturing serially
on June 1 through 2006, secured by a
first lien on certain gross revenues, on a
parity with the Series 1990, 1992,
1992A, and 1997 system revenue bonds
2,975,000
System revenue refunding bonds, Series
of 1992 – 5.8% to 6.4%, principal
maturing serially on June 1 through
2007, secured by a first lien on certain
gross revenues, on a parity with the
Series 1990, 1991, 1992A, and 1997
system revenue bonds 25,780,000
System revenue refunding bonds, Series
of 1992A – 5.0% to 5.8%, principal
maturing serially on June 1 through
2008, secured by a first lien on certain
gross revenues, on a parity with the
Series 1990, 1991, 1992, and 1997 sys-tem
revenue bonds 34,180,000
System revenue bonds, Series of 1997 –
5.0% to 6.5%, principal maturing
serially on June 1, 2009 through 2017,
secured by a first lien on certain gross
revenues, on a parity with the Series
1990, 1991, 1992, and 1992A system
revenue bonds 30,900,000
$95,980,000
Principal and interest requirements
to maturity, including $43,547,969
of interest, are as follows: 1999-00,
$11,359,174; 2000-01, $10,902,587;
2001-02, $11,362,074; 2002-03,
$11,450,693; 2003-04, $11,444,798;
thereafter, $83,008,643.
Note 5—Risk Management
Pursuant to A.R.S. § 41-621, the
university participates in a self-insurance
program administered by the State of
Arizona, Department of Administration,
Risk Management Section. The State’s
Risk Management Program covers the
university, subject to certain deductibles,
for risks of loss from injuries to employ-ees;
theft of, damage to, and destruction
of property, buildings and equipment;
errors and omissions; natural disasters;
and liability for acts or omissions of any
nature while acting in authorized govern-mental
or proprietary capacities and in the
course and scope of employment or
authorization except as prescribed in
A.R.S. § 41-621. The university has no
additional insurance coverage, and losses
arising from contractual breaches and
losses that arise out of and are directly
attributable to an act or omission deter-mined
by a court to be a felony are not
covered by the State’s Risk Management
Program. However, during the three years
ended June 30, 1999, such losses have not
been material to the university’s financial
statements taken as a whole.
Note 6—Reclassification
In prior years, the university
presented due to other funds as a reduc-tion
of assets in the assets section of
the balance sheet. For the fiscal year
ended June 30, 1999, the university
reclassified due to other funds at June 30,
1999, and presented the balance in the
liabilities section of the balance sheet.
Accordingly, the corresponding 1998
memorandum amounts have been
reclassified to conform with the presenta-tion
in the 1999 financial statements.
Plan: TIAA/CREF
University Member Total
Contributions Contributions Contributions
$2,289,661 $2,289,661 $4,579,322
Plan: VALIC
University Member Total
Contributions Contributions Contributions
$624,792 $624,792 $1,249,584
Plan: Fidelity
University Member Total
Contributions Contributions Contributions
$293,278 $293,278 $586,556
Plan: Aetna
University Member Total
Contributions Contributions Contributions
$109,771 $109,771 $219,542
REQUIRED SUPPLEMENTARY INFORMATION
Unaudited
For the Year Ended June 30,1999
Year 2000 Issue
Many of the university’s mission-critical,
electronic data processing
systems and equipment items are subject
to shortcomings related to the year 2000
that could adversely affect university
operations. If not corrected, many
programs and embedded chips would
not be able to distinguish the year 2000
from the year 1900. This may cause
them to process data inaccurately or
stop processing data altogether. The
university is aware of this problem and
has been taking the necessary corrective
action to its mission-critical systems
since September 1997.
Typically, efforts to address the
year 2000 issue progress through the
following four stages. However, the
completion of these stages does not
guarantee that the university’s mission-critical
systems and equipment will
be year 2000 compliant.
• Awareness-Establishing a
project plan and budget for
dealing with the year 2000 issue.
• Assessment-Identifying all
of the systems and equipment
that are critical to the university's
operations.
• Remediation-Making changes to
systems and equipment.
• Validation/testing-Testing
the changes made to systems
and equipment and reviewing
the test results.
The university has identified nine
computer systems and electronic
equipment groups that are critical to its
operations (payroll, human resources,
telecommunications, facilities, financial
aid, student business services,
admissions, student matriculation, and
accounting.) These mission-critical
systems and equipment groups affect
the financial, personnel, and safety
aspects of the university’s operations.
The university has completed the
validation/testing stage for the
telecommunications, facilities, and
admissions systems. Remediation has
been completed for all other systems,
and the university is in the validation/
testing stage for those systems.
Because of the unprecedented
nature of the year 2000 issue, its effects
and the success of related remediation
efforts will not be fully determinable
until the year 2000 and thereafter.
Management cannot assure that the
university is or will be year 2000 ready,
that the university’s remediation efforts
will be successful in whole or in part,
or that parties with whom the university
does business will be 2000 ready.
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