ST A T E O F L O U ISIA N A L E G ISL A T IV E A U D IT O R

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1 ST A T E O F L O U ISIA N A L E G ISL A T IV E A U D IT O R U niversity of Louisiana atm onroe State of Louisiana M onroe.t.ouisiana Decem ber Financialand C om pliance A udit D ivision D anielg.k yle,p h.d.,c PA,C FE Legislative A uditor

2 LEG ISLATIVE A UDIT A DVISO RY CO U NCIL M E'M BERS Representative Edw in R.M urray,c hairm an SenatorJ."Tom " Schedler,Vice C hairm an SenatorRobertJ.Barham SenatorFosterL.C am pbell,jr. SenatorLynn B.Dean SenatorW illie L.M ount Representative R ick Farrar Representative Victor T.Stelly Representative T.TaylorTow nsend Representative W arren J.Triche,Jr. E DanielG.Kyle,Ph.D.,C PA,C FE D IR EC TO R O F FINA NC IA L A N D C O M PLIA NC E A U D IT A lbert J.Robinson,Jr.,C PA This docum ent is produced by the Legislative A uditor,state of Louisiana,Post O fice Box 94397, Baton Rouge, Louisiana in accordance with Louisiana Revised Statute 24:513. Fifty-nine copies of this public docum ent were produced atan approximate costof$488. This materialwas produced in accordance w ith the standards for state agencies established pursuantto R.S. 43:31. A copy ofthis docum entis available on the Legislative Auditor's W eb site atww w.ija.state.la.us. In com pliance w ith the Am ericans W ith Disabilities Act, if you need specia assistance relative to this docum ent,orany docum ents ofthe Legislative A uditor please contactw ayne "Skip"Irw in,d irectorofa dm inistration,at225/

3 U N IV ERSITY O F LO U ISIA NA AT M O N RO E STA TE O F LO U ISIA NA M onroe.louisiana G eneralpurpose FinancialStatem ents and IndependentA uditor's Reports A s ofjune 30,2000,and forthe Years Ended June 30,2000 and 1999 W ith Supplem entalinform ation Schedules Underthe provisions ofstate law,this reportis a public docum ent. A copy ofthis reporthas been subm itted to the G overnor,to the Attorney G eneral,and to other public o ficials as required by state law. A copy ofthis reporthas been m ade available forpublic inspection atthe Baton Rouge and Shreveport efices ofthe Legislative Auditorand atthe office ofthe parish clerk ofcourt. Decem ber15,2000

4 UNIVERSITY O F LO UISIA NA AT M O NRO E STATE O F LO UISIA NA M onroe,louisiana G eneralpurpose FinancialStatem ents and IndependentAuditor's Reports As ofjune 30,2000,and forthe Years Ended June 30,2000 and 1999 W ith Supplem entalinform ation Schedules CO NTENTS Statem ent Page No ndependenta uditor's Reporton the FinancialStatem ents 3 G eneralpurpose F-inancialStatem ents Balance Sheet-A lfunds,june 30,2000 (Unaudited) Forthe YearEnded June 30,2000: StatementofChanges in Fund Balances (Unaudited) Statem entofrevenues,expenditures,and O ther Changes -CurrentFunds (Unaudited) Forthe YearEnded June : StatementofChanges in Fund Balances (Unaudited) Statem entofrevenues,expenditures,and O ther Changes -CurrentFunds (Unaudited) Notes to the FinancialStatements (Unaudited) D 9 E Schedule Page No Supplem entalinform ation Schedules Forthe YearEnded June : Schedule efbonds Payable (Unaudited) Schedule efi.ong-term DebtAmortization (Unaudited) 33 35

5 U NIVERSITY O F:LO UISIA NA AT M O NRO E STATE O F LO UISIA NA Contents,June 30,2000 CONTE-NTS (Cont.) Schedule Page No Forthe YearEnded June 30,1999: Schedule ofbonds Payable (Unaudited) Schedule oflong-.term DebtAmortization (Unaudited) 3 4 Exhibit Reporton Com pliance and on InternalContrelO verfinancia Reporting Based on an Auditofthe FinancialStatem ents Findings on C om pliance and on InternalControl O verfinancialreporting B A ppendix M anagem ent's Corrective Action Plans and Responses to the Findings and Recom m endations

6 AN IIiI+G.KYLE,PIiI).,CPA,([:l ]IiG ISI+A1IVlgAU DII"O]~ OFFICE OF L EG ISLA T IV E A U D ITO R STATE OF LOU ISIANA BA TON RO U G E,LO U JS]A N A Decem ber ndependenta uditor's Report on the FinancialStatem ents 1600 NORTIITIIIRD SIRIH PO S'IO FFICE BO X TElEI'IIONE:(225) [:ACSIM II,E: (225)33q-3870 UNIVERSITY O F LO UISIANA AT M O NRO E STATE O F LO UISIA NA M onroe.louisiana W e attem pted to auditthe accom panying generalpurpose financialstatem ents ofuniversity of Louisiana atm onroe,a com ponentunitofthe State oflouisiana,as ofjune 30,2000,and for the years ended June 30,2000 and 1999,as listed in the foregoing table ofcontents. These financialstatem ents are the responsibility ofu niversity oflouisiana atm onroe m anagem ent. The university's accounting records were not com plete and contained inadequacies. M anagem ent represented to us that the financial statem ents w ere com plete and that a l accounting records w ere provided for our review. How ever, audit procedures disclosed inadequacies in the accounting records, including unsupported entries in the bank reconciliation.,;and inadequate controls and record keeping forcash,investm ents;held by an afiliated organization,receivables (including the alowance fordoubtfulaccounts),and various other accounts. U ncertainties about the fair presentation of these accounts in the financial statem ents prevent m anagem ent from providing assurance that operating surpluses of the G eneralfund were returned to the State Treasury as required by state law orthatan operating deficithad notbeen incurred as prohibited by state law. Furtherm ore,funds received forthe university were found to have been deposited directly into the NortheastLouisiana University Foundation and w ere not properly recorded in the university's acco unting records. These inadequacies m ade itim practica lto apply su ficientauditprocedures to enable us to express an opinion on the fairpresentation ofthe accom panying generalpurpose financialstatem ents. Because ofthe sigrfificance ofthe m atters discussed in the preceding paragraph,the scope of ourwork was notsuficientto enable us to express,and we do notexpress,an opinion on the financialstatem ents referred to in the first paragraph or on the accom panying supplem ental inform ation schodules. In accordance w ith G overnm ent Auditing Standards,w e have also issued our reportdated Decem ber11,2000,on ourconsideration ofu niversity oflouisiana atm onroe's internalcontrol over financial reporting and our tests of its com pliance w ith certain provisions of law s, regulations,co ntracts,and grants. That report is an integralpart of a tem pting an audit in accordance with GovernmentAuditing Standards and should be read in conjunction with this report in considering the results ofourengagem ent. W JR:M AN:D,(3P:ss IULMI DanielG.Kyle,CPA,CFE Legislative A uditor

7 UNAUDITED UNIVERSITY'O F LO UISIA NA AT M O NRO E! STATE O F LO U ISIA NA Balance Sheet-A llfunds, June 30,2000 CURRENT FUNDS UNRESTRICTED AUXILIARY GENEF~ L ENTERPRISES RESTRICTED STUDENT LOAN FUNDS ENDOW MENT FUND ASSETS Cash and cash equivalenl~; Accounts receivalde,netofa lowance forunco lectibles Notes ~'eceivable,netofallowance forunce nectibles Due from private foundations Due from otherfunds Deferred charges an0 prep~fid expenses Inventories Otherassets Institutionalplant $1,456, ,928 2,019, , , $428,438 $764,365 2,606, , , , ,650 $4,959, ,788 1,405,844 35,017 $5,508,032 TOTAL ASSE~S $4, $2,528,684 $3,338,632 $6,365,472 $5,508,032 LIABILITIES AND FUND 'QUERY Liabilities: Accounts payable Accrued payrols and accrued liabilities Due to private foundations Due to otherfunds Deposits held forothers Deferred revenues Com pensated absences payable Bonds payable Obligations underca pitallease TotalLiabilities Fund equity: Netinvestm entin plant Fund balance s: Reserved fordebtservice Reserved forinventories Reserved forencu 11brances Currentoperations-unrestricted (deficit) Noncurrentoperations -restricted TotalFund Equity (3eficit) $170,174 1,562,020 5, ,542 2,147,733 5,312, ,107 5,312,637 $66,222 $192,365 $56 1,969, ,976 (~9, (700,491) ,435 1,958,575 2, ,412,544 5,412,544 NO NE $8,598,032 5,508,032 TOTAL LIABILITIES ANt)FUND EQUITY $4,832,205 $2,528,684 = $3,338,632 $6,365,472 The accom panying notes are an ntegralpartofthis statem ent 4

8 Statem enta PLANT FUNDS REI,IEW ALS AND RETIREM ENT OF INVESTM ENT AGENCY UNEXPENDED REPLACEMENTS INDEBTEDNESS IN PLANT FUNDS TOTAL. (MEMORANDUM ONLYI_ $335,970 $143,421 $1,687,861 2, ,485 23,850 2,311 $499, ,221 7, , $3,095, ,959,628 6,511,700 4,649, , , , ,233,140 $ $167,271 $1,687,861 $159,233,140 $1,088,073 $185,361,538 $ ,298 $5, NONE $5,240,724 5,043 $10,409 13, , $440,350 1,562,020 5,632 4,649, ,021 2,596,627 6,281,978 5,240, ,987, ,987, , , ,102 $1,687, NONE 1,849, , ,257 (4,054,553) $612,168 $167,271 $1,687,861 $159,233,140 $1,088,073 $185,361,538

9 UNAUDITED UNIVERSITY O F LO UISIANA AT M O NRO E STATE O F LO UISIA NA Statem entofchanges in Fund Balances Forthe YearEnded June 30,2000 Revenues and other2dditions: Unrestricted currentfund revenues $56,434,532 Tuition and fees -restricted G overnm entalgrants and contracts: Federal State Local Private gifts,grants,and co ntracts Sales/services ofeducationaldepartments investm entincom e -restricted State funded endow Ttents Intereston loans rece ivable Retirem entofindebtedness Additions to plantfacilities O thersources Tota lrevenues and otheradditions CURRENT FUNDS UNRESTRICTED GENERAL ENTERPRISES RESTRICTED $16,517, $2,826,358 12,830,131 4,979,820 (66,586) STUDENT LOAN FUNDS $14, ,204 22, ENDOW MENT FUND $556, Expenditures and otherdeductions: Educe tionaland general Auxiliary enterprises Auxiliary equipmentpurchases Expended forplantfacilities Indirectco sts reco w!red Retirementofindebtedness Intereston indebtedr~ess Disposalofplantfacilities Com pensated absences Other Totalexpenditures and otherdeductions ,037, , ,026 76,216 17, ,280, , Transfers among funds -additions (deletions): M andatory -principaland interest Nonm andatory : Other Interagency transfers Tota ltransfers am ong funds (662,423) (2,625,675) 2,446,812 (37,308) (2,662,983) 1.784, , NONE NONE Inventory increase (decrease) (19,897~ NONE NONE NONE NONE Netincrease (decrease)folthe year (275,029) 20, , , Fund balances (deflcil)atbeginning ofyear , Fund balances(deficit)atend ofyear ($5,207,530) ($518,669. ) $2,210,010 $5,412,544 $5,508,032 The accom panying notes are an integralpartofthis statem ent 6

10 Statem entb PLANT FUNDS RENEiW ALS AND RETIREM ENT O F INVESTMENT UNEXPEND[-D RE-PLACEM ENTS INDEBTEDNESS IN PLANT TOTALS (MEMORANDUM ONLY) FOR THE YEAR ENDED June June $545,015 $56,434,532 3,385,863 $55,578,143 2,799,638 21,540 $5,046 $67, $961, , ,693 12,895,728 4,979,820 (86,588) 663,919 16,517, , , , ,250 30,739,443 71, ,177,800 3,756, , ,912 17,801, , , , ,473 10,011, , , , , , ,207 27,105,263 74,097,627 18,037, ,177 42, , , ,149 27,105, ,290 2, , ,245 27,105, ,746,502 73,126,376 18,570, ,153 3, , , ,309 1,442,990 94, , ,670 (117,670) ,268 NO NE (37,308) (60,458) (37,308) (60,458) NONE NONE NONE NONE 102, , $162,102 (285,516) 4,595,430 5,649,964 11,000,320 1,973, ,391, ,973, ,973,082 $1,687,861 $153,987,373 $163,603,469 $157,973,402

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12 UNAUDITED Statem entc UNIVEP,S TY O F LO UISIANA AT M O NRO E STATE O F LO UISIA NA C URRENT FUN DS Statem ent ofrevenues,expenditures and O therc:hanges Forthe YearEnded June 30,2000 Revenues: Tuition and fees State appropriations Governm ental9rant.'~and ce ntraets: Federal State Local Private gifts,grants,and contracts Investm entincom e Auxiliary enterprise levenue Othersources Totalrevenues UNRESTRICTED AUXILIARY GENERAL ENTERPRISES RESTRICTED $ $727,794 $2,826, ,830,131 4,979,820 (86,5~8) 663, , ,789, ,815 56,434,532 16,517,041 21,213,71.~1 TOIAL (MEMORANDUM ONLY) $21,680, ,149 t3,254,672 4,979,820 (88,588) 663, ,427 15,789, , Expenditures and tcarlsfers: Educationaland general: Instructior~ Research Public service Academ ic supporl Studentservices Institutionalsuppolt O perations arid m aintenance ofplant Scholarships and felowships Com pensated absence s O ther Totaleducationaland generalexpenditures 27,545,535 3,797,590 1,065,457 4,770,047 3,t81,099 5,022,800 6,424,494 2,967, , ,431 NONE ,535 3,797,590 1,D65, ,947 3,181,099 5,022,800 5,424,494 11,918, ,026 11,235,982 11,235,982 20,187,2B~3 74,237,714 Transfers among funds-additions (deductions): M andatory lransfe,'s -principaland interest Nonm aadatory transfers: Other Interagency ganefers Auxiliary enterprises expenditures Totalexpenditures and transfers 2,601,925 37, , ,903 (2,446,812) 24,520 18,280,598 16,496,209 (153,864) (25,000) ,249 36,828 18,280,598 93,194,292 Otheradditions (deduct{ons): Increase (decrease)in inventory Other-indirectcosts 19,897) (19,897) (472,703} (472,703) Netincrease (d~.cr~:~ase)forthe year ~ ($ _2.. 75,029) _ $20,832 $732,589 $478,392 The acc.om panying notes are an integralpartofthis statem ent 8

13 UNAUDiTElb UNIVERSITY O F LO UISIANA AT M O NR O E STA TE O F LO U ISIA NA Statem entof C hanges in Fund Balances Forthe YearEnded June 30,1999 GENERAl. Revenues and otheradditions: Unrestricted currentfund revenues $55,576,143 Tuition and fees ~re.,;tdcted G overnm entalgrants and (x)ntraets: Federal State Local Private gils,grants,and contracts Sales/services Ofeducationaldepartm ents Investmentinco m e -restricted State funded endowm ents Intereston loans receivable Retirem entofindebtedness Additions to plantfacilities Othersource s Totalrevenues and otheradditions CURRENT FUNDS ENTERPRISES RESTRICTED $17,801,606 $ ,088,269 3,755, , ,912 STUDENT LOAN FUNDS $15,739 89, ENDOW MENT FUND $405, ,800 94,444 16,815 17, ,707 ' 17,801,606 20,307, , ,679 Expenditures and otherdeductions: Educationaland general 53,000,404 Auxiliary enterprises Auxiliary equipm entpurchases Expended forplantfacilities Indirectcosts re(;ow ~red Retirem entofindebledness Intereston indebtedness Disposalofplantfacilities Com pensated absence s O ther Totalexpenditure.,and otherdeductior~s 18,570, ,964, , , Transfers among funds-additions(deletions): Mandatory -pdncipalend interest Nonm andatory: Other Interagency Transfe rs Tota ltransfers among funds (660,215) (2,530,584 2,505,584 (35,938) (24,520) - '-T~20,849 25,000 25,000 NONE NONE Inventory increase (decre;ise NONE NONE NONE NONE Netincrease (decrease)forthe year (94,444) 898,856 (91,695) 69, ,075 Fundbalances(deficit)atbeginningofyear (4,434,603) (1,671,8071 1,306,438 5,152,315 Fundbalances(deficit)atendofyear ($4,5!7,830).~$672,951) ( $1,214,743 $5,221,689 $4.967,370 The accom panying notes are an integralpartofthis statem ent 9

14 Statem entd PLANT FUNDS UNEXPENDED REPLACEM ENTS INDEBTEDNESS IN PLA NT TOTALS (MEMORANDUM ONLY) FOR THE YEAR ENDED $595,386 $56,578, $54,267, ,177,802 12,357,027 3,756,268 3,241, , , ,912 1,604,478 $4,059 $44,613 17,801,606 17,169, , , , , ,279 $926,473 10,011, ,473 10,011, ,397,566 24, , , "~" ~ ~ , , , ,215 93,836 1, NO NE ,126,376 18,570, ,153 3, , , ,309 1,442,990 1,442,990 94,444 69,381,009 18,104, , , , ,062 2,832, , ,215 N ON-~'- NONE 660,215 NONE NONE NONE NONE NONE 11,217 m NONE! (85,358) 4, ,288 1,906,089 9,494,947 10,989,103 17,946, ,578 $257,054 $ $1,973,377 $149,391,943 $157,969,945 $146,969,625 10

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16 UNAUDITED Statem ente UNIVERSITY O F LO UISIA NA AT M O NRO E STATE O F LO U ISIA NA CURRENT FUNDS Statem entofrevenues,expenditures, and O therc hanges Forthe YearEnded June 30,1999 Revenues: Tuition and fees State appropriatic~ns Governm entalgrantsand (~ntracts: Federal State Local Private gifts,grants,and (~)ntracts Investm entincom e Auxiliary enterprise revenue Othersources Com pensated absences Totalrevenues UNRESTRICTED AUXILIARY GENERAL ENTERPRISES RES~R~CTED $18.817,745 $ $2, ,382, ,83~ ,578,143 17,052,040 17,601,605 13,088,269 3,756, , , ,815 20,307,596 TOTAL (MEMORA NDUM ONLY) $2t,755,828 35,382, , , , , ,B74 17,052, , ,687,344 Expenditures and transfers: Educationaland general: Instruction Research Public se/vjce Academ ic support Studentservices Institutionalsupport O perations and m aintenance ofplant Scholarships and felowships Com pensated absences Other Totaleduce tiona~and generalexpenditures 26,983, ,622 1,093,854 4,885,751 3,287,638 5,141, , ,513 94, ,648 NO NE 9,560,365 10,404,003 19,964,368 26,983,118 3,909,622 1,093,854 4,885,751 3, ,141,864 5,047,044 12,211, ,003 73,059,216 Transfersamong tun(is-additions(deductions): M andatory transfers -principaland interest Nonm andatory transfers: O ther Interagency transfer Auxiliary enterprises expenditures Totalexpenditures and transfers 2,530, g , ,215 (2,505,584) 24,520 18,723,598 16,902,749 (25,000) 660, ,723,598 92,503,487 Otheradditions (deductions): Increase (decrease)in inventory Other-indirectcost!; 11,217 (11,217) (459,923! ( ) Netincrease (decrease)fortheyear $895,856 ($91,695) $712,717 The accom panying notes are an integralpartofthis statem ent 11

17 UNAUDITED U NIVERSITY O F LO UISIA NA AT M O NRO E STATE O F LO UISIA NA Notes to the FinancialStatem ents As ofjune 30,2000,and forthe Years Ended June and 1999 NTRO DUCTIO N The U niversity of Louisiana at M onroe is a publicly supported institution of higher education. The University is a com ponent unitofthe State of Louisiana,w ithin the executive branch of governm ent. The University is under the m anagem ent and supervision of the University of Louisiana System Board ofsupervisors;however,the annualuniversity budgetand changes to the degree program s,departm ents of instruction,et cetera,require approvalby the Board of Regents. Because University of Louisiana at M onroe is a state university,operations of its instructionalprogram s are funded through annuallapsing appropriations m ade by the state legislature. The U niversity of Louisiana at M onroe is located at 700 U niversity Avenue in M onroe, Louisiana, and ofers aca dem ic, cultural, vocational, social and continuing educa tion for northeastern Louisiana. The University offers associate,baccalaureate,and selected m aster and specialistdegrees in the areas ofbusiness,educa tion,liberalarts,and the sciences. In addition,the university aw ards a DoctorofPhilosophy degree in Pharm acy and a Doctorate in M arriage and Fam ily Therapy. A. SUM IVIA F~Y O F SIG NIFICA NT A CCO UNTING PO LICIES 1. BASIS O F PRESENTATIO N Tile GovernmentalAccounting Standards Board (GASB)reco gnizes two models for cotlege and university accounting and financialreporting in G ASB Statem ent 15:the A ICPA Co lege G uide M odel, A IC PA Industry Audit G uide, Audits of Co leges and Universities, and the governm ental m odel, established by the National Council on G overnm ental Accounting, G overn m ental A ccounting and Financial Reporting Principles. Forfinancialreporting,the Division ofadm inistration has chosen the form er. The G ASB,Code Section 2100,has defined the governm entalreporting entity to be the State oflouisiana. Therefore,the accom panying financialstatem entofthe University contains sub-accountinform ation ofthe various funds ofthe State of Louisiana. As such, the accom panying financial statem ent presents inform ation only as to the transactions ofthe program s ofthe University as authorized by Louisiana statutes and adm inistrative regulations. 12

18 UNAUDITED UNIVERSITY O F:LO UISIA NA AT M O NRO E STATE O F LO U ISIA NA Notes to the FinancialStatements (Continued) 2. R EPO RTING ENTITY The University of Louisiana at M onroe is a publicly supported institution of higher education. Using the criteria established in G A SB Statem ent 14, The Financial R eporting Entity,the institution is reported as a discrete com ponentunitofthe State of Louisiana since itis lega ly separate from and is financia ly accountable to the State. A nnua ly, the State of Louisiana issues a Com prehensive A nnual Financial Report (CAFR),which includes the activity contained in the accompanying financialstatement. The general purpose financial statem ent is audited by the ofice of the Louisiana Legislative A uditor. 3. FUND ACCO UNTING In order to insure observance of lim itations and restrictions placed on the use of the resources available,the accounts of the U niversity are m aintained in accordance w ith the principles of "fund accounting." Such principles prescribe the m anner in w hich resources forvarious purposes are classified foraccounting and reporting purposes into funds thatare in accordance with the activities ofobjectives specified. Accounts are separately m aintained foreach fund;how ever,in the accom panying financialstatem ent, funds having sim ilarcharacteristics have been com bined in fund groups. Accordingly,a l financial transactions have been recorded and reported by fund groups. A brief description ofeach ofthe fund groups fo lows: a. CurrentFunds Currentfunds m eans operating funds thatw ilbe expended in the near term Such funds have tw o basic sub groups -unrestricted and restricted. Unrestricted current funds include a lfunds for operating purposes on w hich there are no restrictions,exceptthe budgetary controlprovisions included in the annuallegislative appropriations act,and include the GeneralFund and the Auxiliary Enterprise Fund. R estricted current funds represent those operating funds on w hich restrictions have been im posed w hich lim itthe purposes forw hich funds can be used,and includes the Co lege W ork Study,Supplem entaleducationalo pportunity G rant, Pe lg rants and gifts,grants,orcontracts from governm entalorprivate agencies. b. StudentLoan Funds ]-he purpose ofthis fund group is to accountforresources available forloans to students. 13

19 UNAUDITED U NIVERSITY O F LO UISIA NA AT M O NRO E STATE O F LO UISIA NA Notes to the FinancialStatements (Continued) c. Endow m entfunds Endowm ent funds are funds w ith respect to w hich donors or other outside agencies have stipulated,as a condition ofthe giftinstrum ent,thatthe principalis to be m aintained inviolate and in perpetuity and invested for the purpose of producing presentand future incom e w hich m ay eitherbe expended oradded to principal. Incom e derived from investm ents ofendow m ents is accounted forin this fund orifunrestricted as revenues in unrestricted currentfunds. d. PlantFunds The Plant Funds group contains four self-balancing subgroups. Unexpended Plant Funds are used for acquisition of long-lived assets for institutional purposes. Funds for renew als and replacem ents are set aside from current operating revenues for the renewal and replacem ent of auxiliary enterprise properties. Funds for retirem ent of indebtedness are used to service plant indebtedness ofthe University. Investm entin plantincludes a llong-lived assets ofthe U niversity. e. Agency Funds ' This tund group represents funds in w hich the University acts as custodian or fiscalagenton behalfof others,such as studentor faculty organizations and w orkshops. 4. BASIS O F ACCO UNTING The financialstatem ents ofthe University have been prepared on the accrualbasis of accounting,exceptthat (1) depreciation is notrecognized;(2) as permitted by the NationalAssociation ofcolege and University Business Oficials (NACUBO),summer schooltuition and fees forthe G eneralfund and faculty salaries and related benefits for June are notprorated,butare deferred to the succeeding year;(3)summerschoolfees foral~otherfunds are recorded atthe time ofreceipt;and (4)inventories ofthe General Fund are recorded as expenditures atthe tim e ofpurchase. The statem ent of current funds' revenues, expenditures, and other changes is a statem entoffinancialactivities ofcurrentfunds related to the currentreporting period. It does notpurport to presentthe results ofoperations (netincome orless)forthe period as w ould a statem entofrevenues and expenses. To the extent that current funds are used to finance plant assets, the am ounts so provided are accounted foras expenditures in the case ofnorm alacquisitions,repairs and renovation; m andatory transfers in the case of required provisions for debt am ortization and interest;and as transfers ofa non-m andatory nature fora lothercases. 14

20 U NAUDITED U NIVERSITY O F LO UISIA NA AT M O NRO E STATE O F LO UISIA NA Notes to the FinancialStatements (Continued) 5. ENCUM BRA NC ES Encum brance accounting, under w hich purchase orders, contracts and other com m itm ents for the expenditure of m onies are recorded in order to reserve fund balances,is em ployed by the University. Encum brances outstanding atyear-end in a l funds,exceptforthe G eneralfund,are reported as reservations offund balance since they do notconstitute expenditures ofliabilities in the yearencum bered. Encum brances ofthe G eneralfund are notincluded in the financialstatem entbecause the U niversity does nothave the ability to finance the liquidation ofencum brances afterjune 30,2000, as provided by Louisiana Revised Statute 39: TO TA L C O LU M NS O N STATEM ENTS -O VERVIEW Tile totalcolum n on the com bined statem ents are ca ptioned "M em orandum O nly" to indicate that they are presented only to facilitate financial analysis. Data in these cc~lum ns do not necessarily present financial position or results of operations in conform ity w ith genera ly accepted accounting principles. Neither are such data com parable to a consolidation. 7. INVENTO RIES The U niversity m aintains perpetualinventory records for a lsignificant inventories and reports the inventories at low er of cost or m arket. The cost of the G eneral Fund inventory and the food serv ices inventory and the bookstore w ithin the Auxiliary Enterprise Fund is determ ined by the weighted-average m ethod. The costofa lother significantinventories is determined by the first-in,first-out(fifo)method. The yearend balance ofthe G eneralfund is ofsetby a fund balance reserve w hich indicates that this portion of the fund balance does not constitute "available spendable resources." Acquisitions ofinventory in the G eneralfund are recorded as expenditures atthe tim e of purchase,and the diference betw een inventory costatthe beginning and end of the yearis reported on Statem enta as a reserv ation offund Balance. The inventories ofthe Auxiliary Enterprise Fund are expensed w hen sold orused 8. PLANT ASSETS Physicalplant and equipm entare stated atcostatthe date of acquisition,fair m arket value atdate ofdonation in the case ofgifts orestim ated historicalcostifactualcostis notknow n,orm arketvalue forlivestock. Depreciation on physicalplantequipm ent is not recorded. Public dom ain or infrastructures are not capitalized. C onstruction-inprogress is c;apitalized during construction. 15

21 UNAUDITED UNIVERSITY O F LO UISIA NA AT M O NRO E STATE O F LO U ISIA N A Notes to the FinancialStatements (Continued) 9. DEFE-RRED REVEN UES G eneralfund tuition and fees co lected atjune 30,2000,butapplicable to the 2000 slimmersession (fiscalyear2001),and certain revenuesforotherprograms oractivities to be co nducted prim arily in the nextfisca lyearare reported as deferred revenues. As described in note D,fees for other than G eneralfund expenditures are recorded at receipt,i.e.,they are notdeferred forrecognition in the fo low ing fisca lyear. Expenses related to this session's program s and activities are reported in the period the tuition and fees are recognized as revenues. B. B UDG ETA RY PRACTIC ES The annualgeneralfund budgetforthe University is established by Legislative action and by Title 39 ofthe Louisiana Revised Statutes. The subm ission ofthe budgetforapprovalby the Board of Regents and the Legislative budget process is required. The other funds of the University,although subjectto internalbudgeting,are not required to submit budgets for approvalthrough the Legislative budgetprocess. State law provkjes thatappropriations lapse atthe end of the fisca lyear w ith the exception noted in Note H, G eneral Fund. In com pliance w ith these legal restrictions, budgets are adopted on the accrualbasis ofaccounting,exceptthat(1)depreciation is notrecognized; (2)leave costs are treated as budgeted expenditures to the extentthatthey are expected to be paid;(3)summerschooltuition and fees and summerschoolfaculty salaries and related benefits forjune are notprorated butare recognized in the succeeding year;(4)inventories in the GeneralFund are recorded as expenditures atthe time ofpurchase;and (5)certain capital leases are notrecorded. Budaetarv C om earison The fo low ing is a budgetary com parison forthe currentyearg eneralfund appropriation Revenues Appropriated by Legistature: State GeneralFund (Direct) State G eneralfund - self-generated revenues Totalrevenues Expenditures Actual June Variance Favorable ( Unfavorable) $36,665,149 $36,665,149 NONE 19, ,424,236 56,424,236 58,181,295 58, _ ($1,757,059) (1,757,059) 1, U nexpended A ppropriation - C urrantyear NONE NONE NONE 16

22 UNAUDITED UNIVERSITY O F LO UISIA NA AT M O NRO E STATE O F LO UISIA NA Notes to the FinancialStatements (Continued) Revenues Appropriated by Legislature: State GeneralFund (Direct) State G eneralfund - self-generated revenues Totalravenues Expenditures June Actuat $35,382,689 $35,382, ,437 22,064,063 55,578,126 57,446,752 55,578, Variance Favorable _ (.Unfavorable) NONE ($1,868,626) (1,868,626) 1,868,626 Unexpended A ppropriation - CurrentYear NO NE NONE NO NE C DEPO SITS W ITH FINANCIAL INSTITUTIO NS A N D INV ESTM ENTS Forreporting purposes,cash and cash equivalents include pe ty cash,dem and deposits,tim e deposits,and certifica tes of deposit. Cash and ca sh equivalents are stated at cost,w hich approxim ates m arket. U nder state law these deposits m ust be secured by federaldeposit insurance orthe pledge ofsecurities ow ned by the bank. The University m ay depositfunds w ithin a bank organized underthe law s oftrle State oflouisiana,the law s ofany otherstate in the Union, or the laws of the United States. Furtherm ore, the University m ay invest in certificates ofdepositofstate banks organized underlouisiana law and nationalbanks having theirprincipaloffices in Louisiana. The U niversity of Louisiana at M onroe m aintains investm ent accounts as authorized by Louisiana Revised Statute 49:327(C)(3). A lowable University investments include repurchase agreem ents,federated funds,registered com m on and preferred stock,registered bonds,and U.S. G overnm ent securities. Investm ents are reported as required by G ASB 31, and investm ents received as gifts are recorded initia ly atm arketvalue atdate ofacquisition. For reporting purposes,deposits w ith financialinstitutions include savings,dem and deposits, tim e deposits and certificates ofdeposit. Understate law,the University m ay depositfunds with a fisca lagent bank selected and designated by the Interim Em ergency Board. Further,the U niversity m ay investin tim e certifica tes ofdepositin state banks organized underthe law s of Louisiana, national banks having their principal o fice in the State of Louisiana, in savings accounts orshares ofsavings and loan associations and savings banks and in share accounts and share certificate accounts offedera ly orstate chartered creditunions. Deposits in bank accounts are stated at cost,w hich approxim ates m arket. Under state law, these deposils (orresulting bank balances)m ustbe secured by federaldepositinsurance orthe pledge ofsecurities ow ned by the bank. [he m arketvalue ofthe pledged securities plus the federaldepositinsurance m ustata ltim e (:overthe am ounton depositw ith the bank. These 17

23 U NAUDITED U NIVERSITY O 1"LO UISIA NA AT M O NRO E STATE O F LO UISIA N A Notes to the FinancialStatements (Continued) pledged securities are held in the nam e ofthe pledging bank in a holding orcustodialbank that is m utua ly acceptable to both parties. AtJune 30,2000,the University has $7,845,393 in deposits (colecteclbank balances).these deposits are secured as folows: Deposits in Bank Accounts perbalance Sheet Deposits in Bank Accounts Certificates O ther Cash rots $3,095,067 NONE NONE $3,095,067 Bank Balances: a.insured (FDIC)orcolateralized w ith securities held by the U niversity orits agent in the University's nam e Totalbank balances $4,405,246 $4,405,246 $4,405,246 NONE NONE $4.405,246 The fo low ing is a breakdow n by banking institution,program,and am ountofthe bank balances show n above: Bankinq Institution 1. Bank O rle 2. Bank O rle 3.Bank O rle 4. Bank O rle 5, DepositG uaranty 6, DepositG uaranty 7, DepositG uaranty 8, DepositG uaranty 9, Hibernia Bank 10.Regions Bank Tota Program Depository-Checking Payro lach D epository-m erchantc redit EFT Loan Account FederalFunds FederalFunds(Sweep) Payro l Payrol(Sweep) Accounts Payable PlantFund Am ount $402,577 27,696 61,963 19, ,000 1,164, , , $4,405,246 18

24 UNAUDITED UNIVERSITY O F LO UISIA NA AT M O NRO E STATE O F LO UISIA NA Notes to the FinancialStatements (Continued) D. ACC O UNTS A ND NO TES REC EIVA BLE Accounts receivable are show n on Statem enta netofan a lowance fordoubtfulaccounts as fo low s: Fund A lowance Accounts fordoubtful Net Receivable Accounts Statem enta G eneral Auxiliary Enterprise Restricted Unexpended PlantFund Agency $1,476, ,917 2,525,940 2, $19, $1,456, ,810 2,525,940 2, ,272 Total $5,125,754 $127,100 $4,998,654 Notes receiw~ble are show n on Statem ent A net of an a lowance for doubtfulaccounts as follow s: A lowance Notes fora m ounl Net Receivable Unco lectible Statem enta Perkins Loans Pharm acy Loans Nursing Loans Short-Terrn Loans $4,414,814 1,190,563 54, $563, ,473 33, $3,851,642 1,063,090 20, Total $5,888,448 $939,237 $4,949,211 Funds available forlending by the FederalPerkins Loan and Health Profession Loan Funds are provided by restricted federaland state capital contributions and interest earned on notes receivable. The sources offunds available forlending by the Short-Term StudentLoan Fund are restricted studentfees and interestearned on notes receivable. E. INTER FU N D B O R RO W ING The interfund balances reported do not representform alborrow ing or lending arrangem ents. Daily transactions thataffectm ultiple funds frequently require corresponding transfers ofcash betw een bank accounts ofthe a fected funds. To avoid the possibility oferrors thatwould be inherent in frequent cash transfers, the U niversity accum ulates such transfers in interfund 19

25 UNAUDITED UNIVERSITY O F't.O UISIA NA AT M O NRO E STATE O F LO UISIA NA Notes to the FinancialStatements (Continued) accounts during each m onth and clears the interfund balances w ith a single cash entry after closing the books for the m onth. A lintefund loans are tem porary in nature;no interest is charged on interfund loans. The University of Louisiana at M onroe recorded the fo lowing interfund borrow ing forfiscalyear2000: Auxiliary Fund Student Unexpended Restricted Loan Plant Fund Fund Fund GeneralFund Auxiliary Loan Fund U nexpended Plant R & R Restricted Agency $1,405, ,485 23, $613,413 $952,783 3,751 $11, Due O thers $1,969,804 $617,164 $952,872 $249,298 F. PL.A NT FU N DS A sum m ary ofinvestm entin plantfo low s Balance at JulX 1,1998 Additions Deletions Balance at June 30,1999 Land Im provem ents Buildings Equipm ent Library books Construction in progress $6,009,752 4,880,026 76,264,385 27,800,406 11,171,568 $3,642, ,904,349 5,660,265 ($1,412,660) (30,330) $6,009,752 4,880,026 76,264,385 30,030, Total $147,030,486 $10,011, , ) $155, In accordance w ith Louisiana Revised Statutes 39: ,the University has com plied w ith the Louisiana m ovable property statutes.

26 Repairand M aintenance G eneral Agency Fund Fund Fund $2,530 $414, $7, $5,169 $817,263 $7,125 Total D ue From $1,994, ,595 1,405, ,485 23, , $4,618,695 Additions $33,000 25,211,520 3,109, Deletions ($33,000) (1,823,783) (36,960). (25,211,520 ]. _ Balance at June $6,042,752 4,880, ,442,905 31,316, $30,739,443 ~27,105,263) $159,233,140 21

27 U NAUDITED U NIV ERSITY O F LO U ISIA NA AT M O N RO E STATE O F LO U ISIA NA Notes to the FinancialStatements (Continued) The schedule below is a sum m ary ofthe debtservice requirem ents ofthe various bond issues and reim bursem entcontracts payable atjune 30,2000,and the am ounts available to m eet those requirem ents. Bond Issue Cash Reserves Reserv e Excess Available StudentHousing Facilities Education Natatorium Activity C enter Total $1, $1, NONE G. D U E FRO M PRIVATE FO U N DATIO NS The am ount of m atching funds received by the University from the State pursuant to the endowed chairand professorship program and the related unexpended earnings shown on the accom panying financial statem ents as "Due From Private Foundations" is $5,508,032 at June 30,2000. These funds are held and invested by the U niversity's Foundation under the term s ofa contractualagreem entbetw een the U niversity and the Foundation. H. G ENERA L FU ND AtJune 30,2000,the G eneralfund has no unexpended appropriation thatm ustbe refunded to the State Treasury. As provided by Louisiana Revised Statute 17:3886(A),the University adopted a building and facility preventive m aintenance program w hich was approved by the Board of Regents. This program a lows the University to retain any funds appropriated or a located that were unexpended and unobligated atthe end ofthe fiscalyear. Atleast50% ofthe retained funds w ilbe m aintained in a preventive m aintenance reserv e fund in the restricted fund and w ilbe used solely forpreventive maintenance purposes in accordance with the approved plan,subject to approval by the superv isory board, the Board of Regents, and the Joint Legislative Commitee on the Budget.A lretained funds wilbe spentfornonrecurring projects.as shown on StatementA,atJune 30,2000,the University has $128,495 in restricted-currentfunds to be retained forthese purposes. C HA NG ES IN LO NG -TER M D EBT The fo low ing is a sum m ary of bond reim bursem ent contracts and other long-term debt transactions ofthe U niversity forthe tw o years ended June 30,2000:

28 U NAUDITED UNIV ERSITY O F LO UISIANA AT M O NRO E STATE O F LO UISIANA Notes to the FinancialStatements (Continued) Bonds payable atjuly 1,1998 Forthe yearended June 30, bonds retired Forthe yearended June 30, bonds retired Bonds payable atjuly 1,2000 $7,133, ,250 $5,245,767 A detailed surnm ary,by issues,ofa ldebtoutstanding foreach ofthe tw o years ended June 30, 2000,including outstanding interest,is show n atschedules 1 and 3, A m ortization schedules of outstanding debtarc.=show n atschedules 2 and 4. J. CO M PENSATED A BSENC ES Em ployees accrue and accum ulate annualand sick leave in accordance w ith state law and adm inistrative regulations. The leave is accum ulated w ithout lim itation;how ever,nine-m onth (acuity m em bers do not accrue annualleave,but are granted faculty leave during holiday periods w hen students are not in class. Em ployees w ho are considered having nonexem pt status acco rding to the guidelines in the Fair Labor Standards Act m ay be paid for compensatory leave (K-time)earned. U pon separation orterm ination ofem ploym ent,both classified and non-classified personnelor theirheirs are co m pensated foraccum ulated annualleave notto exceed 300 hours. In addition, academ ic and non-classified personnelor their heirs are com pensated for accum ulated sick leave notto exceed 25 days upon retirem entordeath. Act343 of1993 a low s m em bers ofthe Louisiana State Em ployees'retirem ent System,upon applica tion for retirem ent,the option of receiving an actuaria ly determ ined lum p sum paym entforannualand sick leave w hich w ould otherw ise have been used to com pute years ofservice forretirem ent. Upon retirem ent or transfer, a classified em ployee w il be paid for any tim e and one-half com pensatory leave earned and m ay or m ay not be paid for any straight hour-for-hour com pensatory leave earned. Com pensation paid w ilbe based on the em ployee's hourly rate of pay atterm ination ortransfer. The liability for unused annualleave,sick leave,and com pensatory leave atjune 30,2000 com puted in accordance w ith the C odifica tion of G overnm ental Acco unting and Financia Reporting Standards Section C ,is estim ated to be $2,698,659,$3,339,715 and $42,503 respectively. The leave payable is recorded in the acco m panying financialstatem ent. The University has im plem ented GASB 16 -Accounting forcom pensated Absences

29 UNAUDITED UNIVERSITY O F LO UISIANA AT M O NRO E STA TE O F LO UISIA NA Notes to the FinancialStatements (Continued) K O N-B E'HA LF"PAYM ENTS FO R FRING E BENEFITS A ND SA LA RIES O n-behalfpaym ents forfringe benefits and salaries are directpaym ents m ade by one entity to a third-party recipientforthe em ployees ofanotherlega ly separate entity. O n-behalfpaym ents include pension plan contributions,em ployee health and life insurance prem ium s,and salary supplem ents or stipends. For exam ple,a nongovernm entalfund-raising foundation afi liated w ith a governm entaluniversity m ay supplem entsalaries of certain university faculty. Those paym ents constitute on-behalfpaym ents forpurposes ofreporting by the University ifthey are made to the faculty members in theircapacity as employees ofthe University (GASF~24), The University has included $89,284 in on-behalf paym ents forfringe benefits and salaries included in the accom panying financialstatem ents forfisca lyear2000. L. CO NTING ENT LIA BILITIES Losses arising from judgments, claims, and similar contingencies such as guarantor of m ortgage loans on sorority and fraternity houses are considered state liabilities and paid upon appropriation by the Legislature and not the University. The University was involved in no m ateriallaw suits atjune 30,2000,thatm anagem entbelieves w ould have a m aterialim pacton the financialstatem ent. M. LEA SE O BLIG ATIO NS Lease agreem ents have non-appropdation exculpatory clauses thata low lease cance lation if the Legislature does not m ake an appropriation for its continuation during any future fiscal period. 1. O perating Leases The University has no m aterialoperating leases atjune 30, C apitalleases Capital leases are defined as an arrangem ent in w hich any one of the fo low ing conditions apply: (1)ownership transfers atthe end ofthe lease,(2)the lease contains a bargain purchase option,(3)the lease term is 75% ofthe asset life,or (4)the discounted m inim um lease paym ents are 90% ofthe fairm arketvalue ofthe asset. The University is acquiring com puterequipm entundera capitallease agreem entw hich provides forthe U niversity to purchase the equipm entovera period ofyears. M inim um lease paym ents under the ca pital lease together w ith the present value of the net m inim um lease paym ents are show n as fo low s: 24

30 UNAUDITED U N IV ERSITY O F LO U ISIA NA AT M O N R O E STATE O F LO U ISIA NA Notes to the FinancialStatements (Continued) FiscalYear m inim um Jease paym ents Less -am ountrepresenting interest Presentvalue ofnetm inim um lease paym ents $5, $5,043 N. STATI- A PPRO PR IATIO NS During the year, the University drew funds from the State Treasury for the G eneral Fund Appropriation, Higher Education Library and Scientific Acquisition Fund and the M inority DoctoralScholarship Fund. The fo low ing table is a depiction ofthe w arrants draw n: W arrants Draw n Am ount Fund Revenue Source GeneralFund BTSC U Library Enhancem ent M inority DoctorScholarship $33,511,664 2,442, , Unrestricted Unrestricted Restricted Restricted State Appropriation State Appropriation Dedicated Funds ConsentDecree Total $36, O PO STR ETIR EM ENT H EA LTH C A R E! A ND t.ife INSURANCE The University provides certain continuing health ca re and life insurance benefits forits retired em ployees. Substantia ly a lofthe U niversity's em ployees becom e eligible forthose benefits if they reach norm alretirem entage w hile working forthe University. Those benefits forretirees and sim ilar benefits for active em ployees are provided through a state-operated group insurance cornpany and various insurance companies whose monthly premiums are paid jointly by the em ployee arrd by the University. The University recognizes its costofproviding these benefits (University portion ofpremiums)as an expenditure when paid during the year. These retiree benefits for411 retirees totaled $1,077,583 foreach ofthe years ended June 30,1999 and The costof providing those benefits for retirees is notseparable from the costof providing benefits for the active em ployees. As defined by G ASB 12,the dependants of a retiree should be counted as a single unitifthe retiree is deceased and should notbe counted if the retiree is alive. ]he costofretirees'benefits is netofparticipants'contribution. P. STU DENT LO A N FUNDS The fund balance ofstudentloan Funds atjune 30,2000,are com prised ofthe fo low ing 25

31 UNAUD TED UNIVERSITY O F LO UISIANA AT M O NRO E STATE O F LO UISIA NA Notes to the FinancialStatements (Continued) Perkins Loans Fund Health Profession StudentLoan Funds Pharm acy Nursing Short-Term StudentLoan Fund Tota $3,851,642 1,063,090 26, $4,949,211 Q. A UXILIA RY ENTERPRISES A summary ofthe netincreases (decreases)in Auxiliary Enterprise Funds is as folows Increase (decrease in fund balances Netin~ me (loss) Food Services Student Bookstore Center Other Total ($180,484) $307,637 $74,263 ($45,608) ($58,761) $97,047 (38,931) 412, (41,808) (424,014) 97,047 Netassets (7,505,283) 1,304,170 4,811,323 (804,601) 2,325, ,682 O utstanding principal and intereston debt N/A N/A N/A 2,~42,605 6,380,548 Annualdebtprincipal and interest N/A NIA NIA variable variable R. R ESERVATIO N O F FU N D BA LA N C E Fund balances atjune 30,2000,as shown on Statem enta,are sum m arized as fo lows 26

32 UNAUDITED UNIVERSITY O F LO UISIANA AT M O NRO E STATE O F LO UISIA N A Notesto the FinancialStatements(Continued) Internaly Designated Internaly Restricted Externaly Restricted Total CurrentFunds: General Auxiliary Enterpr,ses Restricted ($5,312,637) $105,107 (700,491) $181, ,435 ($5,207,530) (518,669) 2,210,010 Non*CurrentFunds: StudentLoan Funds Endowm entfun;is 5,412,444 5,508,032 6,412,444 5,508,032 PlantFunds: Unexpended Renewals/Repla cem ents Retirem entofindebtedness NetInvestm entin Piant $153,987, , , , ,102 1, ,987,373 Tota $2,063,682 $153,987,373 $13,565,442 $163,603,369 S. FUND BALANCE (DEFICIT) The Auxiliary Erterprise Fund unreserved fund balance (deficit)has been adjusted asfolows Restated Fund Balance (deficit)atjune 30,1999 Less -currentyearreduction from operations ($539,501) Fund Balance (deficit)atjune 30,2000 (StatementA) T. FEDERAL STUDENT LO A NS The University participates in a num beroffedera ly assisted grantprogram s reported in the Restricted Fund. These programs are subjectto program compliance audits by the grantors and otherexternalauditors. U. FEDERA t.g RA NTS The University participates in a num ber offedera ly assisted grant program s reported in the Restricted Fund. These programs are subjectto program compliance audits by the grantors, buta lsuch audits for 2000 have not been conducted. The am ount,if any,of expenditures which m ay be disallowed by the granting agencies cannotbe determ ined atthis tim e. Based on prior experience, the University's m anagem ent feels such disa lowance, if any, w il be im m aterial.

33 UNAUDITED UNIVERSITY O F:LO UISIANA AT M O NRO E STATE O F LO U ISIA NA Notes to the FinancialStatements (Continued) V. G RA N T AW A R DS G rantaw ards notyetfunded and forw hich the not been considered as assets in the financia grantaw ards atjune 30,2000 nstitution has notyetperform ed services have statem ents. There w ere rio such unco lected W. PI.EDG ES O F G IFTS Pledges of gifts including unco lected subscriptions,subscription notes,and estate notes not reported in the financialstatem ents w ere nil. X. FO UNDATIO NS The accom panying financial statem ent does not include foundations that are separate corporations whose financialstatement is subject to audit by independent certified public accountants. The fo low ing are outside organizations created fororon behalfofthe University w hose funds are notincluded in the financialstatem ents ofthe University butare m anaged by University em ployees: The University oflouisiana atm onroe Foundation The U niversity oflouisiana atm onroe Athletic Scholarship Foundation The U niversity oflouisiana atm onroe A lum nia ssociation Y. RELA'I'ED PA RTY TRANSACTIO NS The U niversity, w ithin the norm al course of business, enters into transactions w ith related parties. A ltransactions are negotiated on an arm s length basis atterm s com parable w ith those ofnonrelated parties. Z. DE"FERRED CO M PENSTIO N PLAN C ertain em ployees of the University voluntarily participate in the Louisiana Deferred C om pensation F'lan adopted under the provisions of Internal Revenue Code Section 457. Com plete disclosures relating to this statew ide plan are available in the financialstatem entof the State oflouisiana. A 1. SL/BSE-'Q UENT EVENTS No events ofa m aterialnature have occurred subsequentto the balance sheetdate thatwould require adjustmentto,ordisclosure in,the accompanying financialstatements. BI. PER DIEM PA ID BO A RD M EM BERS The U niversity does not pay per diem paym ents to U niversity of Louisiana System board m em bers. 28