Audit Presentation Year Ending June 30, 2006 As presented: Tuesday, October 17, 2006 1:00 PM

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



(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

http://g.msn.com/9SE/1?http://nces.ed.gov/ipeds/&&DI=293&IG=3e81979bbf0d4bb19ea53e93288ef1de&POS=1&CM=WPU&CE=1&CS=AWP&SR=1




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



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%


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

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g M

arg

in

Ra

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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.


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.


• 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.


• 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.”


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.


• 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


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

Documents

Audit Presentation Year Ending June 30, 2006 As presented: Tuesday, October 17, 2006 1:00 PM