The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.

Financial Health

Indicator / Measurement

Project

Chief Finance and Facilities Officers Conference

January 27, 2010

Slide 2

Purpose of project

Identifies possible financial or control issues putting college/university at financial risk.

Modeled in part after Higher Learning Commission program.

Requires reporting (response) to the specific exception.

Slide 3

Measures: short-term

Repair and replacement expenses over a two-year period.

Overdraft in a local bank account during the past fiscal year.

MAPS to MnSCU and local bank account reconciliations exception reporting items triggered during the past fiscal year.

Forecast General Fund cash balance. Colleges/universities cash balance <15%

Colleges/universities cash balance =>15% AND projecting cash in any month to fall below 10%

Slide 4

Monthly cash flow example

July Proj July Act Diff Aug Proj Aug Act Diff Sept Proj Jan Proj June Proj TOTAL

Beginning Cash Balance 422,221 422,221 - 299,615 318,659 (19,044) 232,060 232,284 240,689

Additions

State Appropriation 51,181 51,181 - 51,181 51,181 - 51,181 51,181 51,181 614,172

Tuition & Fees (including 3rd party) 27,890 27,890 - 108,982 108,828 154 155,000 230,000 27,500 764,372

All Other Revenues 5,000 5,000 - 5,000 3,648 1,352 5,000 5,000 5,000 60,000

ARRA Revenue - 1,000 1,000 2,000 1,000 1,000 12,000

Deductions

Salaries & Benefits (121,273) (121,273) - (76,342) (90,909) 14,567 (91,000) (91,000) (91,000) (1,153,115)

All Other Expenses (35,404) (35,404) - (27,376) (23,037) (4,339) (32,500) (32,500) (32,500) (387,780)

Loans to MMB - (150,000) (150,000) - - - (150,000)

Unallotment error (50,000) (50,000) 20,000 20,000 50,000 150,000 170,000

Ending Cash Balance 299,615 299,615 - 232,060 368,370 136,310 371,741 395,965 351,870

Slide 5

Measures: long-term

Accrual net operating revenue negative for 2 consecutive years.

Accrual primary reserve level <1.6 months for 2 consecutive years OR year-end designated Board reserve balance >60% of total year-end General Fund balance.

Composite Financial Index between 0.5 and 1.5 for 2 consecutive years OR under 0.5 for most recent year.

Slide 6

Next steps

Feedback on financial measures from college/university presidents, chief financial officers.

Present financial measures to Board of Trustees at their March meeting.

Develop “response” format – match response with exception trigger.

Implementation in fiscal year 2011 to the specific exception.