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Larson, Allen, Weishair & Co., LLP 14275 Golf Course Drive North, PO Box 648 Brainerd, MN 56401-0648. Audit Presentation Year Ending June 30, 2006 As presented: Tuesday, October 17, 2006 1:00 PM Office of the Chancellor. Audit Scope and Coverage. - PowerPoint PPT Presentation
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Audit PresentationYear Ending June 30, 2006
As presented: Tuesday, October 17, 2006
1:00 PM
Office of the Chancellor
Larson, Allen, Weishair & Co., LLP14275 Golf Course Drive North, PO Box 648
Brainerd, MN 56401-0648
Audit Scope and Coverage
Performed audit using a risk-based audit approach
Time spent understanding and testing each audit area was commensurate with the level of assessed risk:
Cash and investments Receivables and revenues Capital assets Expenses and accruals Debt Payroll Valuation of significant estimates
Financial Highlights2006 2005
Gross Tuition 29,536$ 28,223$ Gross Fees 4,788 4,680 Gross Sales and Service less COGS 3,171 2,584 Restricted Student Payments 9,033 8,698 Less: Scholarship Allowance (8,728) (8,859)
37,800 35,326
Tuition Rate Increase 7.00% 15.00%Fee Schedule Increase 7.00% 11.32%
Financial Highlights (Continued)2006 2005 % Increase
Total Operating Revenues 48,140$ 45,773$ 5.2%
Total Operating Expenses 80,288 73,194 9.7%
Operating Loss (32,148) (27,421) 17.2%
Nonoperating Revenues & Expenses 31,828 30,085 5.8%
Other Revenues & Expenses 6,419 1,428 349.5%
Change in Net Assets 6,099$ 4,092$ 49.0%
Management Letter
No reportable conditions or management letter comments noted during the audit
Items for Discussion
Potential for Reporting in 2007 Journal entry procedures (e.g. sign offs
and filing)
Information and Discussion Only Stale checks (30 are over 3 years old) Capital asset disclosure for capital leases
Emerging Issues for 2007
• Statement on Auditing Standard #103
- Coordination/timing of audit evidence is critical
* Representation letters
* Attorney letters
* Confirmations
* OLA and DOF reliance
- Potential for additional audit work exists• Statement on Auditing Standard #112
- No more verbal comments
- May result in more reportable conditions
- Does not consider compensating controls
Fiscal Year 2006 Financial Trend and Highlights
Presented by:
President Roland Barden
Jean Hollar, Budget Officer
Mark Rice, Comptroller
Fiscal Year 2006 Financial Trends and Highlights
Integrated Postsecondary Education Data System
Period Ending June 30, 2006
Period Ending June 30, 2005
Period Ending June 30, 2004
(In Thousands) (In Thousands) (In Thousands)
IPEDS Category Salaries Total Salaries Total Salaries Total
Instruction $ 29,831 $ 30,814 $ 27,377 $ 28,432 $ 27,084 $ 28,017
Research 8 74 16 37 38 115
Public Service 682 1,177 864 1,497 706 1,191
Academic Support 5,609 8,592 5,278 7,733 5,495 8,053
Student Services 6,770 8,565 6,643 8,786 6,396 8,142
Institutional Support 3,881 5,687 4,089 5,981 3,802 5,533
Operation & Maintenance of Plant 3,302 9,378 3,472 6,865 3,494 6,068
Depreciation - 3,884 - 3,532 - 3,249
Scholarships & Fellowships - 704 - 334 - 665
Auxiliary Enterprises 3,779 11,524 3,705 9,997 3,272 9,944
Total IPEDS $ 53,862 $ 80,399 $ 51,444 $ 73,194 $ 50,287 $ 70,977
Fiscal Year 2006 Financial Trends and Highlights
Per Full Year Equivalent Student Data
FY2006 FY2005 FY2004
Direct Student Expense $ 47,971 $ 44,951 $ 44,212
Total Operating Expenses $ 80,399 $ 73,194 $ 70,977
Total Operating Expenses/FYE $ 11,792 $ 10,443 $ 10,128
Direct Student Expense/FYE $ 7,036 $ 6,413 $ 6,309
Percent Direct Student Expense 59.7% 61.4% 62.3%
Student Based Revenue $ 5,590 $ 5,040 $ 4,333
% of Total Revenue 43.4% 45.1% 38.5%
Appropriation Revenue $ 4,547 $ 4,174 $ 4,211
% of Total Revenue 35.3% 37.4% 37.4%
Operating Margin $ (47) $ 380 $ 104
% of Total Revenue -0.4% 3.4% 0.9%
Change in Student FYE -2.7% 0% 0.2%
FYE (PER IR 10-10-2006) 6,818 7,009 7,008
FYE 2003 6,993
Fixed Assets- Investment, Age and Maintenance
FY2006 FY2005 FY2004
Additions to beginning depreciable cost 9.5% 5.2% 16.6%
Ending Accumulated depreciation to depreciation expense (age)
15.2 15.8 16.1
Facilities maintenance ratio 10.7% 8.8% 7.7%
Operations and Maintenance expense square foot
$ 5.62 $ 4.13 $ 3.85
SQUARE FOOTAGE ( Each year 1000's) 1,668 1,664 1,577
Fiscal Year 2006 Financial Trends and Highlights
Fiscal Year 2006 Financial Trends and Highlights
Margin & Unrestricted Net Assets Total
FY2006 FY2005 FY2004
Primary Reserve Ratio 15.8% 13.73% 10.57%
Return on Net Asset Ratio -0.62% 7.76% 2.28%
Viability Ratio 57.03% 57.92% 42.43%
Operating Margin Ratio 0.86% 4.51% 3.1%
Fiscal Year 2006 Financial Trends and Highlights
Margin & Unrestricited Net Assets Trends
4.51
$1.14
$5.38
0.86
3.06$3.63
0
1
2
3
4
5
6
2004 2005 2006
Fiscal Year
Millio
ns o
r O
pe
ratin
g M
arg
in
Ra
tio
Operating Margin Ratio Unrestricted Net Assets
Fiscal Year 2006 Financial Trends and Highlights Discussion
Minnesota State University Moorhead continues to improve its financial health evidenced in an increase of the unrestricted fund balance and the amount available for capital outlays.
Fiscal Year 2006 Financial Trends and Highlights Discussion
The budget officer, reporting to the president, strategically ties budget planning to revenue availability.
• Revenue projection is the first budget activity
• Budget general University expenditure projections
• Remaining revenue is then allocated to the University divisions in the form of a budget target to fund employee compensation, student payroll, and operating budgets.
• Divisions can request unspent funds be carried forward from one fiscal year to the next for specific, one-time purposes.
Fiscal Year 2006 Financial Trends and Highlights Discussion
• The University continues to implement its long-range plan to modernize its complement of older facilities, balanced with new construction.
• Renovation to the Science Building complex continued in FY2006. This multi-phased project includes renovating the existing Hagen Hall after the new Science Building opened in FY2005.
• Work began in FY2006 to renovate, furnish and equip MacLean Hall for academic functional improvements.
• Remodeling continued during FY2006 on Grantham residence hall.
• Work began on phase one of Kise Dining Complex.
Fiscal Year 2006 Financial Trends and Highlights Discussion
• The plan for the future is to commit one percent of the operating budget each year to scholarships, representing approximately the general fund charge-back to the other operating funds on campus, and to budget one percent of the general fund budget to work plan initiatives.
• The Development Office has been tasked with a major drive for new scholarship dollars for the seven major scholarship areas including the arts, athletics and honors.
• The university has also taken on an aggressive marketing campaign to promote its programs and people, including the “Dragon Core.”
Fiscal Year 2006 Financial Trends and Highlights Discussion
A new core curriculum in FY2007, the Dragon Core is based on Minnesota State University Moorhead's mission to develop knowledge, talent, and skills for a lifetime of learning, service, and citizenship.
Fiscal Year 2006 Financial Trends and Highlights Discussion
• Dragon Core is designed to develop engaged students who are aware of their diverse world and physical environment and who know how to interact productively and ethically with others in today's changing world. The knowledge acquired in the Foundation Four is applied and extended across these disciplines-
• Oral Communication
• Written Communication
• Critical and Multicultural Thinking
• Mathematics
Fiscal Year 2006 Financial Trends and Highlights Discussion
As a direct result of the president’s budget initiatives and commitment to the financial well being of the university and dedication to its people and programs, MSUM is better able to face the fiscal challenges in the years ahead.
Fiscal Year 2006 Financial Trends and Highlights Preparation
Balance Forward Reconciliation to State Treasury- General Fund
Fund Area 2006 2005 2004 2003 2002
Restricted Carry Forward Balances:
Customized Training $ 304,754 $ 288,608 $ 235,144 $ 243,684 $ 195,238
Contract Balances for Travel 486,345 473,828 465,406 478,920 441,144
Other Restricted Balances 351,333 360,465 166,439 275,284 227,125
Non Allocated Income (NAI) 1,003,183 968,019 611,174 398,783 85,577
MnSCU Reserve 1,762,375 577,388 - - 1,030,206
Total Restricted Balances $ 3,907,990 $ 2,668,308 $ 1,478,163 $ 1,396,671 $ 1,979,290
Unrestricted Carry Forward Balance:
General Fund Carry Forward $ 2,856,283 $ 2,198,997 $ 1,477,283 $ (521,153) $ (345,995)
MAPS State Treasury Balance $ 6,764,274 $ 4,867,305 $ 2,955,446 $ 875,518 $ 1,633,295
Fiscal Year 2006 Financial Trends and Highlights Preparation
($965) ($862)
$1,140
$3,632
$5,381
($1,000)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Th
ou
sa
nd
s
FY2002 FY2003 FY2004 FY2005 FY2006
Fiscal Year
Five Year Unrestricted Fund Balance
2002: Three Wise Men (and two women)
Ponder a Question-
How to spend more but get better return on the use of state funds?
General Appropriation Award
FY2006 MSU Moorhead Financial Report Exit Presentation
For outstanding handling of State Funds
Capital Appropriation Award
FY2006 MSU Moorhead Financial Report Exit Presentation
For outstanding handling of Capital Projects
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